Full Year 2008 Revenue Increases 41.8% to $41.6 million
Full Year 2008 Net Income Increases 31.8% to $10.0 million
XI'AN, China, March 31 /PRNewswire-Asia/ -- SkyPeople Fruit Juice, Inc. (OTC Bulletin Board: SPFJ) ("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 reported full year 2008 revenue of $41.6 million and net income of $10.0 million. For the fourth quarter of 2008, revenue was $19.2 million and net income was $6.1 million.
Full Year Fiscal 2008 Highlights
-- Revenue increased 41.8% to $41.6 million compared to $29.4 million for
the prior year.
-- Gross profit margins increased by 16.7% to 43.3% in fiscal 2008,
compared to gross profit margins of 37.1% for fiscal 2007.
-- Operating income increased 44.7% to $13.1 million, compared to $9.0
million in 2007.
-- Net income increased 31.8%, to $10.0 million, compared to $7.6 million
in fiscal 2007.
-- Raised $3.4 million in gross proceeds in a private placement from
certain accredited investors.
-- Completed the acquisition of Huludao Wonder on June 10, 2008.
-- Began production of concentrated peach juice in June and launched the
large-scale production of concentrated mulberry juice in September,
both at the Company's Jingyang production base.
Management's Commentary
"We are very proud of our performance in 2008," said Mr. Yongke Xue, CEO of SkyPeople. "Due to the diversity and quality of our products and the operating leverage inherent in our business model, we achieved net income of $10 million on total revenue of $41.6 million."
Mr. Xue continued, "By successfully anticipating consumer preference for healthier fruit-based juice drinks, we are well positioned to meet the growing consumer demand both domestically and internationally. Interest in small breed fruit products such as kiwifruit and mulberry is increasing worldwide due to their nutritional advantages and unique taste. We added large-scale capacity to meet the rising demand, and continue to upgrade our existing facilities to increase output. The growth we are seeing in sales of concentrated kiwifruit juice and other related kiwifruit products has more than offset the 8% decrease in concentrated apple juice and apple aroma due to the slowdown in the global economy and decreased volume of concentrated apple juice exported from China. Our market share of fruit beverages in China is expanding and we are concentrating our sales efforts on further penetrating the high-growth pure juice beverage market."
Full Year 2008 Results
Total revenue for the full fiscal year ended December 31, 2008 was $41.6 million, or an increase of 41.8% compared to revenue of $29.4 million for the full of 2007. The increase was primarily due to an increase in sales of concentrated kiwifruit juice and kiwifruit puree, kiwifruit seed, fresh kiwifruits and fruit beverages, partially offset by a decrease in sales of concentrated apple juice and apple aroma.
The gross profit margin was 43.3% in fiscal 2008 compared with 37.1% in fiscal 2007. The increase in gross margin was primarily due to an increase in the gross margin of concentrated pear juice, concentrated kiwifruit juice and kiwifruit puree and fruit beverages, offset by a decrease in gross margin of concentrated apple juice and apple aroma and fresh fruits.
Operating expenses for the full fiscal year were $5.0 million, compared to operating expenses of $1.9 million in 2007. General and administrative expenses increased by $1.7 million to $2.8 million in fiscal 2008, compared to $1.2 million in fiscal 2007. The increase was primarily due to the consolidation of the Company's Huludao's operating results with those of Shaanxi Tianren since June 1, 2007 and forward, and an increase in legal and auditing expenses associated with being a public company. Selling expenses increased by $0.8 million to $1.5 million for fiscal 2008 from $0.7 million in fiscal 2007, mainly due to an increase in freight and transportation expenses as a result of the increase in sales. Research and development increased to $449,695 in fiscal 2008 from $30,878 for fiscal year 2007 related to the subcontracting of new products to an outside research institute.
Operating income increased 44.7% to $13.1 million in fiscal 2008 from $9.0 million in fiscal 2007. Net income increased to $10.0 million in fiscal 2008 from $7.6 million in fiscal 2007.
Fourth Quarter Results
Revenue for the fourth quarter was $19.2 million, or an increase of 13.9% compared to revenue of $16.9 million for the fourth quarter of 2008. The $2.3 million increase was primarily due to an increase in sales of concentrated kiwifruit juice and kiwifruit puree, kiwifruit seed, and fresh kiwifruits and fruit beverages, which was partially offset by a decrease in sales of concentrated apple juice and apple aroma.
Gross profit increased 66.9% to $10.2 million in the fourth quarter of 2008 compared to $6.1 million in the fourth quarter of 2007. Gross margin as a percent of revenue in the fourth quarter was 53.3% compared to 36.4% in the fourth quarter of 2007. The increase in gross margin was primarily due to increased sales of kiwifruit-related products, which generated a higher gross margin compared to the company's other juice products.
Balance Sheet Highlights
As of December 31, 2008 cash and cash equivalents were $15.3 million and working capital (defined as current assets less current liabilities) was $13.4 million and stockholders' equity was $41.1 million.
Business Outlook
Mr. Xue stated, "We enter 2009 with a growing product line, increasing market share, and strong momentum overall. We will continue to upgrade our existing facilities to improve our operational efficiency and productivity, as well as look for targeted acquisition candidates to expand our position in the domestic and international fruit juice market."
About SkyPeople Fruit Juice, Inc.
SkyPeople Fruit Juice, Inc. is a holding company for Shaanxi Tianren Organic Food Co., Ltd. ("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 owns 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.
-- Financial Tables Follow --
SKYPEOPLE FRUIT JUICE, INC.
CONSOLIDATED BALANCE SHEETS
December 31, December 31,
ASSETS 2008 2007
CURRENT ASSETS
Cash and equivalents $15,274,171 $4,094,238
Accounts receivable 11,610,506 9,153,687
Other receivables 297,394 55,737
Inventories 1,844,397 4,460,149
Advances to suppliers and other
current assets 1,087,076 101,628
Total current
assets 30,113,544 17,865,439
RELATED PARTY RECEIVABLE -- 480,254
PROPERTY, PLANT AND EQUIPMENT, Net 20,406,967 17,564,147
LAND USAGE REIGHT 6,404,771 6,138,297
OTHER ASSETS 2,362,049 71,818
TOTAL ASSETS $59,287,331 $42,119,955
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $663,092 $2,997,740
Payable-acquisition of a subsidiary -- 1,818,418
Accrued expenses 1,657,437 557,577
Accrued liquidated damages 254,301 --
Related Party Payable 23,452 143,366
Income taxes payable 1,450,433 114,909
Advances from customers 1,375,460 708,291
Short-term notes payable 11,256,871 6,406,922
Total current
liabilities 16,681,046 12,747,223
NOTE PAYABLE, net of current portion -- 2,053,501
TOTAL LIABILITIES $16,681,046 $14,800,724
MINORITY INTEREST 1,546,319 1,073,364
SHAREHOLDERS' EQUITY
Preferred B stock, $0.001 par
value; 10,000,000 shares
authorized ,448,480 Series B
Preferred Stock issued and
outstanding 3,448 --
Common stock, $0.01 par value;
100,000,000 shares authorized
22,271,786 and 22,006,173
shares issued and outstanding
as of December 31, 2008 and
December 31, 2007, respectively 222,718 220,062
Additional paid-in capital 13,791,723 10,682,755
Accumulated retained earnings 22,468,934 12,458,632
Accumulated other
comprehensive income 4,573,143 2,884,418
Total
stockholders'
equity 41,059,966 26,245,867
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $59,287,331 $42,119,955
SKYPEOPLE FRUIT JUICE, INC.
CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME
For the Year Ended December 31,
2008 2007
Revenue $41,648,605 $29,361,941
Cost of sales 23,607,409 18,467,045
Gross Margin 18,041,196 10,894,896
Operating Expenses
General and administrative expenses 2,830,739 1,158,759
Selling expenses 1,453,461 686,819
Research and development expenses 449,695 30,878
Liquidated damages 254,301 --
Total operating expenses 4,988,196 1,876,456
Income from Operations 13,053,000 9,018,440
Other Income (Expenses)
Interest Income 63,775 18,295
Subsidy Income 316,152 500,468
Interest expense (932,048) (70,622)
Other income (expenses) 353,698 (400,517)
Total other income (expenses) (198,423) 47,624
Income Before Income Tax 12,854,577 9,066,064
Income Tax Provision 2,231,140 1,109,160
Income Before Minority Interest 10,623,437 7,956,904
Minority interest 613,135 360,501
Net Income $10,010,302 $7,596,403
Earnings Per Share:
Basic earnings per share $0.37 $0.35
Diluted earnings per share $0.37 $0.35
Weighted Average Shares Outstanding
Basic 22,230,334 22,006,173
Diluted 26,831,961 22,006,173
Comprehensive Income
Net income $10,010,302 $7,596,403
Foreign currency translation
adjustment 1,688,725 2,349,283
Comprehensive Income $11,699,027 $9,945,686
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.
Ms. Brandi Piacente
Tel: +1-212-481-2050
Email: brandi@thepiacentegroup.com
