XI'AN, China, May 17, 2011 /PRNewswire-Asia/ -- SkyPeople Fruit Juice, Inc. (NASDAQ: SPU) ("SkyPeople" or "the Company"), a processor and manufacturer of kiwifruit, apple, pear and other concentrated specialty fruit juices and manufacturer of Hedetang-branded fruit beverages, today announced record financial results for its first quarter ended March 31, 2011.
First Quarter 2011 Highlights
First Quarter 2011 Results |
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1Q 2011 |
1Q 2010 |
CHANGE |
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Net Sales |
$19.4 million |
$17.7 million |
+10% |
|
Gross Profit |
$8.6 million |
$7.2 million |
+19% |
|
Net Income |
$5.7 million |
$2.0 million |
+185% |
|
Adjusted Net Income* |
$5.7 million |
$4.1 million |
+39% |
|
EPS (Diluted) |
$0.20 |
$0.08 |
+150% |
|
Adjusted EPS (Diluted)* ** |
$0.20 |
$0.18 |
11.1% |
|
Diluted Avg. Shares Outstanding |
26.7 million |
20.6 million |
+29% |
|
*Adjusted net income and adjusted EPS for the three months ended March 31, 2010 exclude $2.1 million loss due to the change in fair value of warrant liability. ** EPS (diluted) for the period ended March 31 was based on 20.6 million fully diluted shares in 2010 and 26.7 million fully diluted shares in 2011. |
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Yonkue Xue, Chief Executive Officer of SkyPeople Fruit Juice explained, "Our diversified product portfolio produced respectable growth in the first quarter despite weather effects on the harvest seasons for apple and pear over the last six months. Sales of our Hedetang and Qian Mei Duo beverages grew significantly in the quarter and were the single largest revenue stream for the Company. Our branded beverages are now sold in over 100 retail stores in approximately 13 cities including Xi'an, Beijing and now, Tianjin. We are excited about the growth potential for this market and the continued growth of our concentrate business in China and international markets."
First Quarter 2011 Segment Revenue
Three Months Ended March 31, |
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2011 |
2010 |
% |
||||||||||
Concentrated apple juice and apple aroma |
$ |
3,673 |
$ |
4,483 |
(18.1%) |
|||||||
Concentrated kiwifruit juice and kiwifruit puree (excluding inter-segment sales) |
2,985 |
2,661 |
12.2% |
|||||||||
Concentrated pear juice |
4,022 |
4,169 |
(3.5%) |
|||||||||
Fruit juice beverages |
7,277 |
2,841 |
156.1% |
|||||||||
Fresh fruits and vegetables |
1,458 |
3,567 |
(59.1%) |
|||||||||
Consolidated |
$ |
19,415 |
$ |
17,721 |
9.6% |
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In the first quarter of the year SkyPeople Fruit Juice launched its Hedetang Juices in a 500ml bottle, added both pear and apple flavors to its product line and also introduced four, high-fiber, boxed juice flavors branded as Qian Mei Duo™ (which means "More fiber, better for You" in English) targeted to female consumers 18-29 years old. Corresponding revenues increased 156.1% for the period ended March 31, 2011. Retailers of Hedetang and Qian Mei Duo juices include Walmart, La Cuisine Royale and Juying stores. The Company regards its juice beverages as a key driver for revenue growth in 2011 and a natural fit for its kiwi, apple and pear concentrates manufacturing.
Sales of kiwi concentrates and purees originally forecasted in the fourth quarter of 2010 were sold in the first quarter of 2011. In the first quarter of 2011, Kiwi puree and concentrate sales totaled $3.0 million, an increase of 12% over the same period of 2010. Pear juice concentrates were down slightly due to a shortage of pears during the season. Lower temperatures than normal reduced the availability of pear and subsequently increased the price of concentrated pear juice per ton. SkyPeople sold 3,481 tons of pear juice concentrate in the quarter versus 4,930 in the same period of prior year. For the first quarter of 2011, sales of pear juice concentrate decreased 3.5% to $4.0 million as compared with that of the same period of prior year. Due to a very strong fourth quarter in 2010, the Company anticipated lower apple concentrate revenues in the first quarter of 2011. As compared with the first quarter of 2010, sales from apple-related products of the first quarter of 2011 fell by $0.8 million, or 18%, to $3.7 million due to a shortage of fresh apples as a result of cold weather in the Liaoning Province, the growing area for SkyPeople's apples and the location of the Company's Yingkou facilities.
Total revenue for the first quarter ended March 31, 2011 was $19.4 million, up 10% from $17.7 million for the quarter ended March 31, 2010.
Gross profit for the first quarter of 2011 was $8.6 million, a 20% increase from $7.2 million in the same period in 2010. Gross profit margin expanded by 390 basis points due to higher margins in fruit juice beverages and a shift in the sales mix toward higher margin kiwifruit juice and juice beverages. The Company's gross margins fluctuate based on the availability and price of each type of fruit, but have averaged between 30% and 45% on a consolidated basis for the past three years. SkyPeople's four production and processing plants are located near local farms for each type of fruit it produces, and thus the Company secures fruit supply at competitive market prices.
Operating expenses for the quarter were $1.4 million, or 7% of sales, flat from the same period last year. Operating income increased 25% to $7.2 million while operating margins were 37%, 14% improvement year over year.
Net income and earnings per share for the first quarter of 2011 were $5.7 million and $0.20, respectively, compared to $3.7 million and $0.08, respectively, in the first quarter of 2010. Fully diluted shares were 26.7 million for the first quarter of 2011, versus 20.6 million for the first quarter of 2010, reflecting the sale of 5.2 million shares of the Company's Common Stock in the third quarter of 2010.
Financial Condition
As of March 31, 2011, the Company had $65.7 million in cash and cash equivalents, up from $49.4 million as of December 31, 2010 due to $13.5 million of cash generated from operations. Working capital was $85.6 million, up from $78.6 million as of December 31, 2010. Accounts receivable were $36.2 million, compared to $46.0 million as of December 31, 2010; accounts receivable turnover was 193 days in the first quarter of 2011. There was no accounts receivable over 120 days outstanding as of March 31, 2011 compared to 3.1% of accounts receivable outstanding as of December 31, 2010. Shareholders' equity was $130.0 million as of March 31, 2011, a 6% increase from $123.2 million reported on December 31, 2010. The Company had $12.8 million in short term loans with local and provincial banks in Shaanxi and Liaoning Provinces as of March 31, 2011.
Capacity Expansion Updates
The Company's growth plan includes building an integrated manufacturing infrastructure to support higher production volumes for juice beverages and concentrates. The following table presents the capital projects that we intend to finance using the proceeds generated from our public offering consummated in 2010:
Facility |
Priority Projects |
Capital Expenditure (in million) |
|||
Huludao Wonder |
A refrigeration storage and a concentrated fruit juice mixing center |
4.4 |
|||
Huludao Wonder |
A 50 ton/hour concentrated apple juice production line |
10.7 |
|||
Huludao Wonder |
A fruit juice beverage production line |
3.0 |
|||
Huludao Wonder |
Construction and environmental project expenses |
6.7 |
|||
Total Capital Expenditure on Priority Projects |
$ |
24.8 |
|||
Recent Updates:
Huludao Wonder Projects
As of March 31, 2011, SkyPeople has completed the infrastructure construction work for the fruit juice beverage production line and has ordered the necessary machinery. Management expects to complete machinery installation and test the new beverage production line in the second quarter and commence operations in the third quarter of 2011.
In the first quarter of 2011, the Company halted all construction work on its new concentrated apple production line because of the cold weather in Huludao, which regularly suffered sub-zero daytime temperatures. The Company recommenced the infrastructure construction work in April 2011 and expects the project to be completed and production to commence by early 2012.
The Company needs to incorporate new wastewater processing facilities to properly service its apple juice concentrate expansion. This project is expected to commence in the third quarter of 2011 and be completed by early 2013.
SkyPeople plans to start the construction of the refrigeration storage unit for concentrated fruit juices and fresh fruits and vegetables in the third quarter of 2011, and a concentrated fruit juice-mixing center in the fourth quarter of 2011. Both projects are expected to be completed in the fourth quarter of 2011 or early 2012.
As of March 31, 2011, the Company has spent $1.2 million on the construction work of Huludao Wonder. The planned capital expenditures for these projects collectively total $24.8 million.
Qiyiwangguo Projects
Management has decided to delay several projects at its Qiyiwangguo factory based on the current market conditions and potential opportunities, including a 24,000 PET bottle/hour fruit juice beverage cold-filling line, concentrated pomegranate juice line, a PET bottle blowing machine, and a refrigeration system.
The Company plans to add another concentrated 20 tons pear juice line as a part of its 2011 capital expenditure plan. The production equipment for a 20 tons/hour line has been ordered and management expects to commence operations during the third quarter of 2011.
In addition, the Company plans to change its 30 ton/hour concentrated apple juice line in the Huludao Wonder factory into a concentrated pear juice line which has an estimated annual capacity of 6,000 tons once the Company completes the 50 ton/hour concentrated apple juice production line in the Huludao Wonder factory. The estimated capital expenditure for this project is $4 million.
First quarter 2011 Conference Call
At the conclusion of the call, the management team will host a question and answer session with the Company's CEO, Mr. Yongke Xue, and Ms. Spring Liu, CFO.
To attend the call, please use the dial-in information below. When prompted, ask for "SkyPeople Fruit Juice" and/or be prepared to provide the conference ID.
Conference Call |
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Date: |
Tuesday, May 17, 2011 |
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Time: |
8:30 a.m. Eastern Time, U.S. |
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Conference Line Dial-In: |
+1-877-941-1429 |
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International Dial-In: |
+1-480-629-9666 |
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Conference ID: |
4440644 "SkyPeople Fruit Juice Call" |
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Webcast link: |
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Please dial in at least 10 minutes before the call to ensure timely participation. A playback will be available through May 24, 2011. To listen, please call + 1-877-870-5176 within the United States or +1-858-384-5517 when calling internationally. Utilize the pass code 4440644 for the replay.
This call is being web cast by ViaVid Broadcasting and can be accessed at ViaVid's website at http://www.viavid.net or at the following link: http://viavid.net/dce.aspx?sid=00008668.
About SkyPeople Fruit Juice, Inc.
SkyPeople Fruit Juice, Inc., a Florida company, through its wholly-owned subsidiary Pacific Industry Holding Group Co., Ltd., a Vanuatu company, holds 99.59% ownership interest in SkyPeople Juice Group Co., Ltd. ("SkyPeople (China)"). SkyPeople (China) is engaged in the production and sales of fruit juice concentrates (including fruit purees, fruit puree concentrates, and clear fruit juice concentrates), fruit beverages (including fruit juice beverages and fruit cider beverages), and other fruit related products (including primarily organic and non-organic fresh fruits, kiwifruit seeds and apple aroma) in and from the PRC. Its fruit juice concentrates are sold to domestic customers and exported directly or via distributors. Fruit juice concentrates are used as a basic ingredient component in the food industry. Its brand, Hedetang, which is a registered trademark in the PRC, is positioned as a high quality, healthy and nutritious end-use juice beverage. For more information, please visit http://www.skypeoplefruitjuice.com.
About Non-GAAP Financial Measures
SkyPeople Fruit Juice, Inc., a Florida company, through its wholly-owned subsidiary Pacific Industry Holding Group Co., Ltd., a Vanuatu company, holds 99.78% ownership interest in SkyPeople Juice Group Co., Ltd. ("SkyPeople (China)"). SkyPeople (China) is engaged in the production and sales of fruit juice concentrates (including fruit purees, fruit puree concentrates, and clear fruit juice concentrates), fruit beverages (including fruit juice beverages and fruit cider beverages), and other fruit related products (including primarily organic and non-organic fresh fruits, kiwifruit seeds and apple aroma) in and from the PRC. Its fruit juice concentrates are sold to domestic customers and exported directly or via distributors. Fruit juice concentrates are used as a basic ingredient component in the food industry. Its brand, Hedetang, which is a registered trademark in the PRC, is positioned as a high quality, healthy and nutritious end-use juice beverage. For more information, please visit http://www.skypeoplefruitjuice.com.
SKYPEOPLE FRUIT JUICE, INC. CONDENSED CONSOLIDATED BALANCE SHEETS AS OF MARCH 31, 2011 AND DECEMBER 31, 2010 |
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March 31, |
December 31, |
||||||||
2011 |
2010 |
||||||||
ASSETS |
(Unaudited) |
||||||||
CURRENT ASSETS |
|||||||||
Cash and cash equivalents |
$ |
65,719,936 |
$ |
49,350,385 |
|||||
Restricted cash |
405,708 |
505,581 |
|||||||
Accounts receivable, net of allowance of $44,800 and $44,405 as of March 31, 2011 and December 31, 2010, respectively |
36,217,365 |
46,029,962 |
|||||||
Other receivables |
1,393,280 |
1,272,648 |
|||||||
Inventories |
6,328,309 |
5,436,117 |
|||||||
Advances to suppliers and other current assets |
59,850 |
31,604 |
|||||||
Total current assets |
110,124,448 |
102,626,297 |
|||||||
PROPERTY, PLANT AND EQUIPMENT, Net |
36,380,869 |
36,337,251 |
|||||||
LAND USAGE RIGHTS, Net |
6,554,901 |
6,541,825 |
|||||||
OTHER ASSETS |
1,487,901 |
1,694,486 |
|||||||
TOTAL ASSETS |
$ |
154,548,119 |
$ |
147,199,859 |
|||||
LIABILITIES |
|||||||||
CURRENT LIABILITIES |
|||||||||
Accounts payable |
$ |
5,954,423 |
$ |
3,446,797 |
|||||
Accrued expenses |
3,236,744 |
4,871,934 |
|||||||
Income taxes payable |
1,945,353 |
4,377,039 |
|||||||
Advances from customers |
181,084 |
573,609 |
|||||||
Short-term bank loans |
12,836,186 |
10,238,856 |
|||||||
Short-term notes payable |
405,708 |
505,581 |
|||||||
Total current liabilities |
24,559,498 |
24,013,816 |
|||||||
Commitments and contingencies (Note 11) |
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STOCKHOLDERS' EQUITY |
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SkyPeople Fruit Juice, Inc. stockholders' equity: |
|||||||||
Preferred Stock, $0.001 par value; 10,000,000 shares authorized; 1,456,647 and 1,456,647 Series B Preferred Stock issued and outstanding as of March 31, 2011 and December 31, 2010, respectively |
1,457 |
1,457 |
|||||||
Common Stock, $0.001 par value; 66,666,666 shares authorized; 25,690,402 and 25,690,402 shares issued and outstanding as of March 31, 2011 and December 31, 2010, respectively |
25,690 |
25,690 |
|||||||
Additional paid-in capital |
59,189,374 |
59,189,374 |
|||||||
Retained earnings |
56,710,459 |
51,418,283 |
|||||||
Accumulated other comprehensive income |
8,920,567 |
7,823,967 |
|||||||
Total SkyPeople Fruit Juice, Inc. stockholders' equity |
124,847,547 |
118,458,771 |
|||||||
Noncontrolling interests |
5,141,074 |
4,727,272 |
|||||||
TOTAL EQUITY |
129,988,621 |
123,186,043 |
|||||||
TOTAL LIABILITIES AND EQUITY |
$ |
154,548,119 |
$ |
147,199,859 |
|||||
SKYPEOPLE FRUIT JUICE, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME FOR THE THREE MONTHS ENDED MARCH 31, 2011 AND 2010 (UNAUDITED) |
|||||||||
For the Three Months Ended |
|||||||||
2011 |
2010 |
||||||||
Revenue |
$ |
19,414,915 |
$ |
17,721,296 |
|||||
Cost of Sales |
10,809,357 |
10,558,248 |
|||||||
Gross Margin |
8,605,558 |
7,163,048 |
|||||||
Operating Expenses |
|||||||||
General and administrative expenses |
816,160 |
766,232 |
|||||||
Selling expenses |
454,674 |
364,777 |
|||||||
Research and development expenses |
136,467 |
278,152 |
|||||||
Total operating expenses |
1,407,301 |
1,409,161 |
|||||||
Income from Operations |
7,198,257 |
5,753,887 |
|||||||
Other Income (Expenses) |
|||||||||
Interest income |
76,312 |
22,096 |
|||||||
Subsidy income |
483,067 |
43,562 |
|||||||
Interest expense |
(163,795) |
(222,959) |
|||||||
Change in fair value of warrant liability |
-- |
(2,092,972) |
|||||||
Others |
(3,033) |
(238) |
|||||||
Total other income (expenses) |
392,551 |
(2,250,511) |
|||||||
Income Before Income Tax |
7,590,808 |
3,503,376 |
|||||||
Income Tax Provision |
1,929,808 |
1,505,897 |
|||||||
Net Income |
5,661,000 |
1,997,479 |
|||||||
Less: Net Income Attributable to Noncontrolling Interests |
368,824 |
332,262 |
|||||||
NET INCOME ATTRIBUTABLE TO SKYPEOPLE FRUIT JUICE, INC. |
$ |
5,292,176 |
$ |
1,665,217 |
|||||
Earnings Per Share: |
|||||||||
Basic earnings per share |
$ |
0.20 |
$ |
0.08 |
|||||
Diluted earnings per share |
$ |
0.20 |
$ |
*0.08 |
|||||
Weighted Average Shares Outstanding |
|||||||||
Basic |
25,690,402 |
18,341,103 |
|||||||
Diluted |
26,662,599 |
20,637,806 |
|||||||
Comprehensive Income |
|||||||||
Net income |
$ |
5,661,000 |
$ |
1,997,479 |
|||||
Foreign currency translation adjustment |
1,141,578 |
(29,365) |
|||||||
Total Comprehensive Income |
$ |
6,802,578 |
$ |
1,968,114 |
|||||
Comprehensive income attributable to noncontrolling interests |
413,802 |
301,701 |
|||||||
Comprehensive Income Attributable to SkyPeople Fruit Juice, Inc. |
$ |
6,388,776 |
$ |
1,666,413 |
|||||
* The effect of 1,228,333 warrants and the related change in fair value of warrant liability was not included for the computation of diluted earnings per share for the period ended as the inclusion would be anti-dilutive.
For more information, please contact:
COMPANY
SkyPeople Fruit Juice, Inc.
Ms. Spring Liu, CFO
Tel: US +1-818-390-1272
Email: spring_liu@skypeoplejuice.com
Web: www.skypeoplefruitjuice.com
INVESTOR RELATIONS:
John Mattio, SVP
HC International, Inc.
Tel: US +1-212-301-7130
Email: john.mattio@hcinternational.net
Web: http://www.hcinternational.net