XI’AN, China, Nov. 16 /PRNewswire-Asia-FirstCall/ -- SkyPeople Fruit Juice, Inc. (NYSE Amex: SPU) ("SkyPeople" or "the Company"), 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 financial results for the third quarter ended September 30, 2009.
Third Quarter 2009 and Recent Highlights
-- Revenue increased 67.1% year-over-year to $10.6 million.
-- Operating expenses decreased 30.9% year-over-year to $1.0 million.
-- Income from operations increased 76.8% year-over-year to $2.9 million.
-- Net income increased 75.8% year-over-year to $2.1 million or $0.11 per
diluted share.
-- New Vegetable and Fresh Fruits Division established to promote the
sales of fresh kiwifruit in the Chinese domestic market.
-- The Company’s common stock, which previously traded on the OTC Bulletin
Board, began trading on the NYSE Amex on October 29, 2009.
-- In November, the Company completed a public offering by two selling
stockholders of the Company’s common stock. In connection with the
offering, the selling stockholders exercised warrants to purchase an
aggregate of 2.7 million shares of the Company’s common stock. The
Company will receive approximately $6.9 million in gross proceeds from
the exercise of these warrants during the current quarter.
Management’s Commentary
"Our strong third quarter financial results prove the potential of our business for solid sales growth and enhanced profitability," said Mr. Yongke Xue, Chief Executive Officer of SkyPeople. "Demand for fresh kiwifruit, fruit beverages and fruit vinegar beverages has accelerated substantially in the Chinese market due in part to moderate overall improvement in the Chinese economy and bolstered by the growing adoption of healthier lifestyles. Our sales growth shows that we are playing an important role in China’s fruit juice market and building awareness for our innovative products. To further capitalize on this market momentum, we recently launched a new vegetable and fresh fruits division to promote our leading fresh kiwifruit products. Sale of fresh kiwifruit counted for 28% of total sales for the third quarter. In addition to solid growth in sales of fruit beverages and fresh kiwifruit, third quarter sales of apple related products increased by 184% year-over-year. Apple juice demand has accelerated sharply since the weak year-ago squeezing season, which was substantially impacted by the instability of the global economy. To capture the renewed strength of the apple market, we began the production of concentrated apple juice in August 2009 and have already reached full capacity.
"We successfully reduced our general and administrative expenses to just 5% of total revenue, from 11% in the year-ago-period, due to our prudent controls on spending. We are equally pleased with our bottom line performance for the third quarter.
"Our cash position will be bolstered during the current quarter as a result of the offering completed earlier this month. This, plus our NYSE Amex listing, gives us better visibility among customers and investors in the U.S. and will be instrumental as we move forward with our development plans in each of the markets we serve. We will continue to leverage our unique production processes and technologies and leadership in specialty juices to meet growing consumer demand in China and further penetrate the high-growth pure juice beverage international markets," Mr. Xue concluded.
Third Quarter 2009 Results
Revenue for the third quarter of 2009 increased 67.1% year-over-year to $10.6 million, compared to $6.3 million in the third quarter of 2008. This increase was primarily associated with sales of fresh kiwifruit, fruit beverages and fruit vinegar beverages in China. A new Vegetable and Fresh Fruits Division was established by the Company in July 2009 to promote the sales of fresh kiwifruit in the Chinese domestic market. Sales of fresh kiwifruit in the three months ended September 30, 2009 were $2.9 million; there were no comparable sales of fresh kiwifruit in the year-ago period. In addition to new fresh kiwifruit sales, the Company generated sales growth of 17.8% in sales of fruit beverages and 184.1% in sales of concentrated apple juice and apple aroma products. This growth was partially offset by a modest year-over-year decrease of 2.6% in sales of concentrated pear juice and a year-over-year decrease of 26.2% in sales of concentrated kiwifruit juice and kiwifruit puree.
The Company reported gross profit of $3.9 million for the third quarter of 2009, compared with $3.0 million for the third quarter of 2008. Gross margin as a percent of revenue for the third quarter of 2009 was 36.3%, compared with 47.8% in the comparable 2008 period. The decrease in gross margin as a percentage of revenue in the third quarter of fiscal 2009 was primarily due to a decrease in the selling price of concentrated juice products in the international market in the current squeezing season, which began in July (and is typical during the summer season). Due to heavy competition in the concentrated juice market and the instability of the financial markets and their influence on the global economy, the price of concentrated juice in the international market continued to decrease in the third quarter of fiscal 2009.
Operating expenses decreased 30.9% to $1.0 million in the third quarter of 2009, compared with $1.4 million in the third quarter of 2008. The decrease in operating expenses in the third quarter of fiscal 2009 was mainly due to a decrease in general and administrative expenses, selling expenses, and accrued liquidated damages, partially offset by an increase in research and development expenses.
Income from operations increased 76.8% to $2.9 million for the third quarter of 2009, from $1.6 million for the third quarter of 2008.
Provision from income taxes was $783,000 for the third quarter of 2009, compared with $214,000 for the third quarter of 2008. The increase in tax provision was due to an increase in income before income tax and an increase in the effective tax rate of Shaanxi Tianren. (SkyPeople Fruit Juice, Inc. is the holding company for Shaanxi Tianren Organic Food Co., Ltd.). Shaanxi Tianren was awarded the status of a nationally recognized High and New Technology Enterprise in December 2006, which entitled Shaanxi Tianren to tax-free treatment for two years starting from 2007. Starting in 2009, Shaanxi Tianren became subject to the regular tax rate of 25% according to the new tax law in China, which was effective on January 1, 2008.
Net income increased 75.8% year-over-year to $2.1 million, or $0.11 per diluted share, for the third quarter of 2009, compared to net income of $1.2 million, or $0.06 per basic and diluted share, for the third quarter of 2008.
Balance Sheet Highlights
As of September 30, 2009, cash and cash equivalents totaled $12.3 million, working capital was $17.6 million and stockholders’ equity was $46.2 million.
Subsequent Event
On November 3, 2009, the Company completed a previously announced public offering of shares of Common Stock that were issued upon exercise of warrants pursuant to an exchange agreement dated May 28, 2009. The Company received approximately $6.9 million in gross proceeds from the exercise of all of the foregoing warrants. The Company intends to use the net proceeds to fund potential acquisitions and for general corporate purposes, including acquisitions and other expansion of its current production capacity.
About SkyPeople Fruit Juice, Inc.
SkyPeople Fruit Juice, Inc. is a holding company for Shaanxi Tianren. Shaanxi Tianren is a company organized according to the laws of the People’s Republic of China. SkyPeople’s main products are concentrated apple, kiwifruit, pear and other fruit juices for domestic and international consumers. Its brand, HEDETANG, is positioned as a high quality, healthy and nutritious juice concentrate and clear juice product used both as an ingredient component in other products and an end-use juice concentrate product. Shaanxi Tianren utilizes the largest kiwifruit plantation in China and is a leading worldwide producer of concentrated kiwifruit juice. For more information, please visit http://www.skypeoplefruitjuice.com .
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 requirement of laws 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.
For more information, please contact:
SkyPeople Fruit Juice, Inc.
Ms. Spring Liu, CFO
Tel: +1-818-390-1272
Email: springliu@skypeoplejuice.com
The Piacente Group, Inc.
Kristen McNally
Tel: +1-212-481-2050
Email: kristen@thepiacentegroup.com
Financial tables to follow
SKYPEOPLE FRUIT JUICE, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS,
(AMOUNTS EXPRESSED IN US DOLLAR)
September 30, December 31,
2009 2008
ASSETS (Unaudited)
CURRENT ASSETS
Cash and equivalents $12,320,597 $15,274,171
Accounts receivable 14,905,880 11,610,506
Other receivables 1,448,234 297,394
Inventories 3,768,088 1,844,397
Prepaid expenses and other current
assets 859,620 1,087,076
Total current assets 33,302,419 30,113,544
PROPERTY, PLANT AND EQUIPMENT, Net 19,321,792 20,406,967
LAND USAGE RIGHTS 6,275,908 6,404,771
OTHER ASSETS 5,053,049 2,362,049
TOTAL ASSETS $63,953,168 $59,287,331
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Accounts payable $1,126,080 $663,092
Accrued expenses 735,715 1,657,437
Accrued liquidated damages -- 254,301
Related party payables -- 23,452
Income taxes payable 783,022 1,450,433
Advances from customers 1,781,699 1,375,460
Short-term notes payable 11,280,068 11,256,871
Total current liabilities 15,706,584 16,681,046
TOTAL LIABILITIES 15,706,584 16,681,046
EQUITY
SkyPeople Fruit Juice, Inc.
stockholders’ equity:
Preferred Stock, $0.001 par value;
10,000,000 shares authorized;
3,448,480 Series B Preferred Stock
issued and outstanding as of
September 30, 2009 and December 31,
2008, respectively 3,448 3,448
Common Stock, $0.001 par value;
66,666,666 shares authorized;
14,847,857 shares issued and
outstanding as of September 30,
2009 and December 31, 2008,
respectively 14,848 14,848
Additional paid-in capital 14,253,894 13,999,593
Accumulated retained
earnings 27,465,404 22,468,934
Accumulated other
comprehensive income 4,462,381 4,573,143
Total SkyPeople
Fruit Juice,
Inc. stockholders’
equity 46,199,975 41,059,966
Noncontrolling interests 2,046,609 1,546,319
TOTAL EQUITY 48,246,584 42,606,285
TOTAL LIABILITIES AND EQUITY $63,953,168 $59,287,331
SKYPEOPLE FRUIT JUICE, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME,
(AMOUNTS EXPRESSED IN US DOLLAR)
Three Months Ended Nine Months Ended
September 30, September 30, September 30, September 30,
2009 2008 2009 2008
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Revenue $10,604,655 $6,345,778 $23,472,717 $22,442,329
Cost of Sales 6,753,327 3,315,431 14,773,081 14,635,767
Gross Profit 3,851,328 3,030,347 8,699,636 7,806,562
Operating Expenses
General and
administrative 501,831 702,385 1,469,128 1,409,895
Selling expenses 188,426 311,931 563,548 808,576
Research and
development 275,571 175,431 827,363 199,056
Accrued liquidated
damages -- 208,658 -- 208,658
Total operating
expenses 965,828 1,398,405 2,860,039 2,626,185
Income from
Operations 2,885,500 1,631,942 5,839,597 5,180,377
Other Income
(Expense)
Interest expense (191,717) (179,699) (677,375) (624,802)
Interest income 15,371 18,377 54,404 41,342
Subsidy income 4,661 3,428 1,557,340 52,206
Other income
(expense) 334,058 (1,119) 691,935 32,827
Total other
income
(expense) 162,373 (159,013) 1,626,304 (498,427)
Income Before
Income Taxes 3,047,873 1,472,929 7,465,901 4,681,950
Income Tax Provision 782,660 214,387 1,998,227 525,585
Net Income 2,265,213 1,258,542 5,467,674 4,156,365
Less: Net income
attributable to
noncontrolling
interests 181,292 73,459 471,204 256,242
NET INCOME
ATTRIBUTABLE TO
SKYPEOPLE FRUIT
JUICE, INC. $2,083,921 $1,185,083 $4,996,470 $3,900,123
Earnings Per Share:
Basic earnings per
share $0.12 $0.06 $0.28 $0.22
Diluted earnings
per share $0.11 $0.06 $0.25 $0.21
Weighted Average
Shares Outstanding:
Basic 14,847,789 14,847,789 14,847,789 14,810,966
Diluted 18,502,518 18,480,109 19,633,360 18,151,026
Comprehensive
Income:
Net income $2,265,213 $1,258,542 $5,467,674 $4,156,365
Foreign currency
translation
adjustment 28,268 414,475 (81,676) 1,711,288
Comprehensive
Income $2,293,481 $1,673,017 $5,389,998 $5,867,653
Comprehensive
income
attributable to
the noncontrolling
interest (181,246) (69,863) (500,290) 53,654
Comprehensive
Income Attributable
to SkyPeople Fruit
Juice, Inc. $2,112,235 $1,603,154 $4,885,708 $5,921,307
SKYPEOPLE FRUIT JUICE, INC. AND SUBSIDIARIES
UNAUDITED_CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS,
(AMOUNTS EXPRESSED IN US DOLLAR)
September 30, September 30,
2009 2008
(Unaudited) (Unaudited)
Cash Flow from Operating
Activities
Net income $4,996,470 $3,900,123
Adjustments to reconcile net
income to net cash flow
(used in) provided by
operating activities
Bad debt expenses 1,130 --
Depreciation and amortization 1,488,748 1,409,907
Loss on sale of property,
plant and equipment -- 1,274
Earnings attributable to
noncontrolling interests 471,204 256,242
Changes in operating assets and
liabilities, net of acquisition
effects
Accounts receivable (3,300,512) 6,030,436
Other receivables (1,150,327) 13,759
Prepaid expenses and
other current assets (2,463,972) (1,224,295)
Inventories (1,923,564) 2,847,423
Accounts payable 244,392 (1,662,730)
Accrued expenses and
other current liabilities 322,711 114,013
Accrued liquidated
damages -- 208,658
Advances from customers 406,746 17,425
Taxes payable (1,427,024) 90,920
Net cash (used in) provided by
operating activities (2,333,998) 12,003,155
Cash Flow from Investing Activities
Prepayment for lease improvement -- (356,860)
Deposits to purchase target company -- (2,141,158)
Loan repayment from related parties -- 5,475,092
Loan advanced to related parties -- (7,179,883)
Additions to property, plant
and equipment (289,945) (2,826,179)
Proceeds from sale of property,
plant and equipment -- 4,996
Net cash used in investing
activities (289,945) (7,023,992)
Cash Flow from Financing Activities
Proceeds from stock issuance -- 3,115,072
Proceeds from bank loans 9,516,559 14,988,105
Repayment of bank loans (9,487,277) (14,531,324)
Dividend paid to non-controlling
interest -- (309,896)
Repayments of related party loan -- (149,486)
Net cash provided by financing
activities 29,282 3,112,471
Effect of Changes in Exchange
Rate (358,913) 610,687
NET (DECREASE) INCREASE IN CASH (2,953,574) 8,702,321
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 15,274,171 4,094,238
CASH AND CASH EQUIVALENTS, END OF
PERIOD $12,320,597 $12,796,559
Supplementary Information of Cash
Flows
Cash paid for interest $677,446 $649,327
Cash paid for taxes $2,664,330 $1,049,534
Purchase of Huludao, offset by
related party receivables $-- $6,887,391