XI’AN, China, Aug. 14 /Xinhua-PRNewswire-FirstCall/ -- SkyPeople Fruit Juice, Inc. (OTC Bulletin Board: SPFJ), a leading processor and manufacturer of concentrated apple, kiwifruit, pear and other fruit juices and fruit products in the People’s Republic of China, today announced its financial results for the second quarter of 2008.
Second Quarter 2008 Highlights
-- Revenue increased 107.9% year-over-year to $7.2 million
-- Gross profit grew 142.1% year-over-year to $2.9 million, or 40.3% of
revenue
-- Operating income increased 122.9% year-over-year to $2.2 million, or
30.4% of revenue
-- Net income increased 85.0% to $1.7 million, or $0.06 per basic and
fully diluted share
-- Appointed Ms. Spring Liu as Chief Financial Officer of the Company
-- Appointed Mr. Norman Ko, Mr. Robert B. Fields, and Mr. Guolin Wang, as
independent directors on the Board of Directors
-- Completed a 1-for-328.72898 reverse stock split of the Company's Common
Stock with a mandatory 22.006-for-1 conversion of Series A Preferred
Stock into Common Stock
-- Changed the corporate name and OTCBB trading symbol to SkyPeople Fruit
Juice, Inc. and SPFJ.OB, respectively
-- Acquired full ownership of Huludao Wonder Fruit Co., Ltd. for RMB 48.3
million (approximately $6.8 million)
-- Presented at Roth Capital Partners Third Annual China Discovery Tour in
Sanya, PRC
“The second quarter of 2008 has been a productive period for SkyPeople resulting from both a growth in sales as well as various corporate developments,” stated Mr. Yongke Xue, CEO of SkyPeople Fruit Juice. “In the period we saw increases in both our top and bottom line figures as well as increased margins. While we were pleased with the growth in sales of our existing products, particularly kiwi fruit juice, we are also excited about new additions, particularly apple juice and related products, which we are now capable of producing through the acquisition of Huludao Wonder Fruit Co., Ltd. We have also strengthened our corporate governance by electing three new independent directors to our Board of Directors. They were joined by Ms. Spring Liu as our Chief Financial Officer, who we believe will significantly improve our financial oversight and streamline SkyPeople’s internal control functions.”
Second Quarter 2008 Results
In the three months ended June 30, 2008, the Company generated total revenue of $7.2 million, a 107.9% increase from the $3.5 million posted during the same period in 2007. Sales were broken down as follows: 26.2% for concentrated apple juice and apple aroma, 29.7% for concentrated pear juice, 12.5% for concentrated kiwifruit juice and kiwifruit puree, 7.6% for kiwifruit seeds, and 24.0% for fruit beverages. The increase was primarily due to increased sales volume of the Company’s concentrated kiwifruit juice and related products as well as the Company’s consolidation of Huludao Wonder’s operations into its financial results beginning in June 2007.
Gross profit increased 142.1% to $2.9 million in the second quarter of 2008, compared to $1.2 million in the same quarter of 2007. Gross margin was 40.3% as compared to 34.6% during the prior year period. The increase in gross margin was mainly due to the increased sales of kiwifruit related products, which generated a higher gross margin compared to other products.
Selling, general and administrative expenses in the second quarter of 2008 were $0.7 million, an increase of 230.8% from $0.2 million in the first quarter of 2007. Selling expenses grew due to increased expenses related to freight and transportation resulting from higher sales volume. General and administrative expenses increased due to the consolidation of Huludao Wonder’s operating results since June 1, 2007 as well as the increased legal and audit expenses associated with being a public company.
Operating income increased 122.9% to $2.2 million, or 30.4% of revenue, in the quarter from $1.0 million in the second quarter of 2007, or 28.4% of revenue.
Net income increased to $1.7 million in the second quarter of 2008, or $0.06 per basic and fully diluted share, as compared to net income of $0.9 million, or $0.04 per basic and fully diluted share, during the same period in 2007. Fully diluted shares outstanding increased from 22.0 million shares in the second quarter of 2007 to 30.1 million shares in the second quarter of 2008 as a result of the share purchase agreement the Company entered into in February 2008. This share count has been adjusted for a 1-for-328.72898 reverse stock split which became effective on May 23, 2008.
Balance Sheet Highlights
As of June 30, 2008, cash was $9.1 million, working capital was $7.1 million and stockholders’ equity was $33.7 million. As of December 31, 2007, cash was $4.1 million, working capital was $6.9 million, and stockholders’ equity was $26.2 million.
Business Outlook
“We expect that the fruit juice market will maintain strong growth trends globally in 2008. Following the acquisition of Huludao Wonder, which has become our production base for apple juice and related products, we will actively look for other acquisition candidates to further enlarge our business scale. In the meantime, we will also upgrade our existing facilities to effectively improve our operational efficiency and productivity,” stated Mr. Xue. “We also plan to enrich our product mix by introducing more new products to the market, such as concentrated peach juice, which successfully completed trial production in July 2008.”
About SkyPeople Fruit Juice, Inc.
SkyPeople Fruit Juice, Inc. is a holding company for Shaanxi Tianren Organic Food Co., Ltd. Shaanxi Tianren is a company organized according to the laws of the People’s Republic of China. SkyPeople’s main products are concentrated apple juice, kiwifruit, pear and other fruit juices for domestic and international consumers. Its HEDETANG brand, is positioned as a high quality, healthy and nutritious juice concentrate and clear juice used both as an ingredient component in other products and as an end-use juice concentrate product. SkyPeople owns the largest kiwifruit plantation in China and is a leading worldwide producer of concentrated kiwifruit juice.
Forward Looking Statements
This press release contains certain ‘forward-looking statements’ that involve a number of risks and uncertainties. There can be no assurance that such statements will prove to be accurate and the actual results and future events could differ materially from management’s current expectations. Such factors include, but are not limited to the Company’s ability to obtain the necessary financing to continue and expand operations, to market its products in new markets and to offer products at competitive pricing, to attract and retain management, and to integrate and maintain technical information and management information systems, political and economic factors in the People’s Republic of China, compliance requirements of law and regulations of the PRC, the effects of currency policies and fluctuations, general economic conditions and other factors detailed from time to time in the Company’s filings with the United States Securities and Exchange Commission and other regulatory authorities. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
--Financial Tables Follow--
SKYPEOPLE FRUIT JUICE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME, UNAUDITED
Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
2008 2007 2008 2007
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Revenue $7,245,967 $3,485,726 $16,096,551 $8,722,912
Cost of Sales 4,329,370 2,281,264 11,320,336 5,270,685
Gross Profit 2,916,597 1,204,462 4,776,215 3,452,227
Operating Expenses
General and
administrative 455,278 143,211 1,029,469 252,416
Selling expenses 255,300 71,568 496,645 239,211
Total operating
expenses 710,578 214,779 1,526,114 491,627
Income from Operations 2,206,019 989,683 3,250,101 2,960,600
Other Income (Expense)
Interest expense (386,075) -- (445,103) --
Interest income 16,801 4,916 22,965 7,499
Subsidy income -- -- 48,778 --
Other income
(expense) 142,102 (821) 332,280 (42,277)
Total other
income (expense) (227,172) 4,095 (41,080) (34,778)
Income Before Income
Taxes 1,978,847 993,778 3,209,021 2,925,822
Income Tax Provision 180,678 83,505 311,198 456,983
Income Before Minority
Interest 1,798,169 910,273 2,897,823 2,468,839
Minority interest 134,948 11,389 182,783 89,724
Net Income $1,663,221 $898,884 $2,715,040 $2,379,115
Earnings Per Share:
Basic earnings per share $0.06 $0.04 $0.10 $0.11
Diluted earnings per
share $0.06 $0.04 $0.10 $0.11
Weighted Average Shares
Outstanding:
Basic 22,271,684 22,006,173 22,188,529 22,006,173
Diluted 30,096,324 22,006,173 28,310,157 22,006,173
Comprehensive Income:
Net income $1,663,221 $898,884 $2,715,040 $2,379,115
Foreign currency
translation adjustment 182,813 270,125 1,603,113 402,294
Comprehensive Income $1,846,034 $1,169,009 $4,318,153 $2,781,409
SKYPEOPLE FRUIT JUICE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS, UNAUDITED
June 30, December 31,
2008 2007
ASSETS (Unaudited)
CURRENT ASSETS
Cash and equivalents $9,141,322 $4,094,238
Accounts receivable, net 4,821,445 9,153,687
Other receivables 46,449 55,737
Inventories, net 1,801,539 4,460,149
Prepaid expenses and other current assets 1,473,440 101,628
Total current assets 17,284,195 17,865,439
RELATED PARTY RECEIVABLE -- 4,970,427
PROPERTY, PLANT AND EQUIPMENT, Net 20,615,419 17,564,147
LAND USAGE RIGHTS (Note 10) 6,465,964 6,138,297
OTHER ASSETS 2,657,930 71,818
TOTAL ASSETS $47,023,508 $46,610,128
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable $1,025,163 $2,997,740
Accrued expenses 337,693 339,818
Related party payable -- 143,366
Income taxes payable 185,287 114,909
Other payable 486,258 217,759
Advances from customers 883,706 708,291
Short-term notes payable 7,289,586 6,406,922
Total current liabilities 10,207,693 10, 928,805
NOTE PAYABLE, net of current portion 2,186,876 2,053,501
TOTAL LIABILITIES $12,394,569 $12,982,306
MINORITY INTEREST 949,847 1,073,364
MINORITY INTEREST-Variable interest entity -- 6,308,591
STOCKHOLDERS’ EQUITY
Preferred Stock, $0.001 par value;
10,000,000 shares authorized
3,448,480 Series B Preferred Stock
issued and outstanding 3,448 --
Common Stock, $0.01 par value;
100,000,000 shares authorized
22,271,684 and 22,006,173 shares
issued and outstanding as of
June 30, 2008 and December 31,
2007, respectively 222,717 220,062
Additional paid-in capital 13,791,724 10,682,755
Accumulated retained earnings 15,173,672 12,458,632
Accumulated other comprehensive
income 4,487,531 2,884,418
Total stockholders’
equity 33,679,092 26,245,867
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $47,023,508 $46,610,128
SKYPEOPLE FRUIT JUICE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS, UNAUDITED
June 30, June 30,
2008 2007
(Unaudited) (Unaudited)
Cash Flow from Operating Activities
Net income $ 2,715,040 $ 2,379,115
Adjustments to reconcile net income to
net cash flow provided by operating
activities
Depreciation and amortization 931,617 450,965
Minority interest 182,783 89,724
Changes in operating assets and liabilities,
net of acquisition effects
Accounts receivable 4,767,805 663,311
Other receivables 11,829 (125,485)
Prepaid expenses and other current
assets (1,345,081) (70,235)
Inventories 2,853,165 481,049
Accounts payable (2,097,350) (396,504)
Accrued expenses (22,342) 8,584
Advances from customers 125,235 287,902
Other payables 243,820 85,326
Taxes payable 60,885 (1,540,586)
Net cash provided by operating activities 8,427,406 2,313,166
Cash Flow from Investing Activities
Prepayment for lease improvement (364,479) --
Deposits to purchase target company (2,116,313) --
Loan repayment from related parties 5,411,560 --
Loan advanced to related parties (7,096,571) (36,270)
Additions to property, plant and
equipment (2,702,172) (297,287)
Net cash used in investing activities (6,867,975) (333,557)
Cash Flow from Financing Activities
Proceeds from stock issuance 3,115,072 --
Proceeds from bank loans 5,502,413 --
Repayment of bank loans (5,050,933) --
Dividend paid to minority interest (306,300) --
Repayments of related party loan (147,751) (1,469,274)
Net cash provided by (used in) financing
activities 3,112,501 (1,469,274)
Effect of Changes in Exchange Rate 375,152 54,764
NET INCREASE IN CASH 5,047,084 565,099
CASH AND CASH EQUIVALENTS, BEGINNING OF
PERIOD 4,094,238 2,135,173
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 9,141,322 $ 2,700,272
Supplementary Information of Cash Flows
Cash Paid for Interest $ 377,717 $ --
Cash paid for income tax $ 858,047 $ 1,664,694
Purchase of Huludao, offset by related
party receivables $ 6,807,472 $ --
For more information, please contact:
SkyPeople Fruit Juice, Inc.
Ms. Spring Liu, Chief Financial Officer
Tel: +1-818-390-1272
Email: springliu@skypeoplejuice.com
CCG Investor Relations
Mr. Crocker Coulson, President
Tel: +1-646-213-1915 (New York)
Email: crocker.coulson@ccgir.com
Web: http://www.ccgir.com
