SkyPeople Fruit Juice Reports Second Quarter 2013 Financial Results

     SkyPeople Fruit Juice Reports Second Quarter 2013 Financial Results

PR Newswire

XI'AN, China, Aug. 13, 2013

XI'AN, China, Aug. 13, 2013 /PRNewswire-FirstCall/ -- SkyPeople Fruit Juice,
Inc. (NASDAQ: SPU) ("SkyPeople" or "the Company"), a producer of fruit juice
concentrates, fruit juice beverages and other fruit-related products, today
announced its financial results for the second quarter ended June 30, 2013.

Second Quarter 2013 Summary:

  oRevenue was $10.3 million, a decrease of 19% year-over-year
  oGross profit was $3.4 million, a decrease of 19% year-over-year
  oGross profit margin was 32% as compared to 33% for the same period of
    2012.
  oIncome from operations was $0.9 million, a decrease of 68% year-over-year
  oNet income attributable to the Company was $0.7 million, a decrease of 72%
    year-over-year
  oRevenue from the fruit juice beverage segment was $8.6 million, an
    increase of 35% year-over-year
  oCash and cash equivalents were $80.3 million as of June 30, 2013

"We recorded lower than expected financial results for the second quarter of
2013 attributable to reduced demand among our customers. However, we typically
increase production of our concentrated fruit juice products in the third
quarter which could potentially lead to improved sequential performance," said
Mr. Hongke Xue, Chief Executive Officer of SkyPeople. "A bright spot in the
second quarter was the continued strong performance of our fruit juice
beverages segment, a key growth area in which we have invested substantially.
For the quarter, the fruit juice beverages segment grew 35% year over year
which helped to offset decreases in other of our key product segments. We
currently sell our fruit juice beverages to more than 20,000 retail stores in
approximately 26 provinces."

"During the second quarter of 2013, we decided to build our internal research
and development team as we believe this is the best way to realize our
commitmentof creating new products with high margins to supplement our
current product offerings. Therefore, we suspended four R&D contracts that
were in effect in the quarter and will focus instead upon strengthening and
expanding our current R&D team."

"We announced early in the second quarter that we entered into an agreement
with Managing Committee of Mei County National Kiwi Fruit Wholesale Trading
Centerto establish kiwi processing facilities which we believe has excellent
potential and will strengthen our competitive positioning in this important
product segment.Our growth initiatives, including our project to develop
orange products in Hubei Province, are a key element of our strategic plan is
to further diversify our product platform in order to mitigate both the
regional and seasonal cyclicality of our products."

"We continue to believe that China's economic growth and rising incomes are
causing a transition in consumer tastes towards healthier lifestyles and
improved nutrition. We see this as a long-term phenomenon that will stimulate
further demand for our products. We believe that our diversified range of
fruit products and branded fruit juice beverages are well positioned to meet
this still emergent market environment," Mr. Hongke Xue concluded.

Second Quarter 2013 Financial Results

Revenue. Revenue for the three months endedJune 30, 2013 was $10.4 million,
a decrease of 19% as compared to $12.8 million for the same period in 2012.
This was primarily due a decrease in sales of kiwi-related products,
concentrated pear juice and other products, which was partially offset by an
increase in revenue generated from sales of the apple-related products and
fruit juice beverages.

                                        SecondQuarter 2013 Revenue by Segment
                                        (In $000's)
                                        Three Months Ended June 30
                                        2013         2012        % of change
Concentrated apple juice and apple      1,052        751         40%
aroma
Concentrated kiwifruit juice and kiwi   10           489         (98%)
puree
Concentrated pear juice                 684          3,734       (82%)
Fruit juice beverages                   8,594        6,366       35%
Fresh fruits and vegetables             4            -           NA
Other                                   6            1,497       NA
Total                                   10,350       12,837      (19%)

Revenue by Segment.  Revenue from the fruit juice beverages increased to $8.6
million, an increase of $2.2 million or 35%, from $6.4 million for the same
period of 2012, primarily due to market share gains attributable to the
Company's continuous efforts to expand their sales channel. The fruit juice
beverages segment comprised 83% of total Company revenue for the second
quarter for 2013 as compared to 50% for the same period of 2012, and so was a
large factor in mitigating the decrease in revenue for the second quarter of
2013 as compared to the same period in 2012.

Sales from apple related products increased by $0.3 million, or 40%, to $1.1
million for the three months ended June 30, 2013, from $0.8 million for the
same period of 2012. During the second quarter of 2013, the Company sold
approximately615 tons of concentrated apple juice, compared with
approximately 428 tons of concentrated apple juice sold in the same period of
2012. However, this increase was coupled with a decrease in unit price of
concentrated apple juice.

Sales from concentrated kiwifruit juice and kiwifruit puree were $0.01 million
for the second quarter of 2013, a decrease of $0.48 million, or 98%, from
$0.49 million in the same quarter of 2012, primarily due to decrease in both
amount sold and unit price. During the three months ended June 30, 2013, the
Company sold approximately 14 tons of kiwi-related products. 

Sales of concentrated pear juice decreased to $0.7 million in the second
quarter of 2013, a decrease of $3.0 million, or 82%, from $3.7 million in the
same quarter of 2012. During the second quarter of 2013, the unit selling
price and amount of concentrated pear juice decreased. During the second
quarter of 2013 and 2012, the Company sold 527 and 2,200 tons of concentrated
pear juice, respectively.

Revenue from our fruit juice beverages in the PRC increased to $8.6 million,
an increase of $2.2 million or 35%, from $6.4 million for the same period of
2012, primarily due to bigger market share gained from our continuous efforts
of expanding sales channel. 

Revenue from our fresh fruits and vegetables in the PRC were $0.004 million
and $nil for the second quarter of 2013 and 2012, respectively. 

Sales from other products decreased to $0.006 million, a decrease from $1.5
million for the same period of 2012. The amount of sales of other products is
expected to be unstable and is generally not indicative of our future sales of
other products.

Gross Profit. The Company's consolidated gross profit for the three months
ended June 30, 2013 was $3.4 million, a decrease of $0.8 million, or 19%, from
$4.2 million for the same period of 2012, primarily due to a reduced level of
gross profit generated from the Company's concentrated pear juice and
apple-related products segments. The consolidated gross profit margin for the
three months ended June 30, 2013 was 32%, a decrease of 1%, from 33% for the
same period of 2012, primarily due to a decrease in gross margin of
apple-related products, concentrated pear juice, which was partially offset by
an increase in gross profit margin of both kiwi-related products and fruit
juice beverages.

                                 Second Quarter 2013 Gross Profit by Segment
                                 (In $000's)
                                 Three Months Ended June 30
                                 2013                    2012
                                 Gross       Gross       Gross       Gross

                                 profit      margin      profit      margin
Concentrated apple juice and
                                 77          7%          94          13%
apple aroma
Concentrated kiwifruit juice and
                                 5           50%         223         46%
kiwi puree
Concentrated pear juice          121         18%         1,705       46%
Fruit juice beverages            3,147       37%         2,118       33%
Fresh fruits and vegetables      3           75%         -           NA
Other                            1           17%         81          5%
Total                            3,354       32%         4,221       33%

Gross Profit by Segment. Gross profit of the fruit juice beverages increased
to $3.1 million, an increase of $1.0 million or 49%, from $2.1 million for the
same period of 2012, primarily due to expansion of market share. The gross
profit margin of the Company's fruit juice beverages increased from to 37% for
the three months ended June 30, 2013, from 33% for the same period of 2012.
The fruit juice beverages segment accounted for 94% of total gross profit for
the second quarter of 2013 as compared to 50% for the same period of 2012.
This had the effect of offsetting reduced total gross profit levels for the
Company's other product segments for the second quarter of 2013 as compared to
the same period of 2012.

Gross profit of the apple related products segment decreased to $0.08 million
for the three months ended June 30, 2013, from $0.09 million for the same
period of 2012. The gross margin of concentrated apple juice and apple aroma
decreased to 7% for the three months ended June 30, 2013 from 13% for the same
period of 2012, primarily due to significantly lower selling price of
concentrated apple juice.

Gross profit of the company's concentrated kiwifruit juice and kiwifruit puree
segment also decreased significantly and the gross profit margin of this
segment's gross profit increased from 46% for the three months ended June 30,
2012 to 50% for the same period of 2013, primarily due to lower cost of fresh
kiwi purchased in three months ended June 30, 2013 as compared to the same
period of 2012.

Gross profit of the concentrated pear juice segment decreased to $0.1 million
in the second quarter of 2013, a decrease 93%, from $1.7 million in the same
quarter of 2012. During the second quarter of 2013, the unit selling price of
concentrated pear juice decreased which led to a decrease of the gross margin
of this segment to 18% in the second quarter of 2013 relative to 46% in the
second quarter of 2012.

Operating Expenses. Operating expenses for the second quarter of fiscal 2013
was $2.4 million, or 23% of sales, which were higher than that of the same
period of 2012, when operating expenses represented 10% of sales. General and
administrative expenses increased 96% to $1.3 million in the second quarter of
2013 as compared to $0.7 million for the same period of 2012, mainly due to an
increased amount of legal fees related to the Company's current pending
litigation and higher salary expenses resulting from an increase in the
headcount of the Company's management staff.Selling expenses increased 132%
to $1.2 million as compared to $0.5 million the same period of 2012, mainly
due to an increase in the payroll and related expenses as a result of an
increase in the Company's headcount to the handle an increase in sales work.
During the second quarter of 2013, the Company suspended research and
development work and received a fund of $79,642 from outside research and
development institutions as compared to $142,685 incurred in research and
development expenses for the three months ended June 30, 2012. In the second
quarter of 2013, the Company suspended four research and development
agreements with research institutions but concentrated on building up its own
internal research and development team.

Income from Operations. Income from operations was $0.9 million for the second
quarter of 2013, a decrease of 68% as compared to $2.9 million for the same
period in 2012. The decrease in the income from operations was mainly due to
decrease in both revenue as well as gross margin and increase in the operating
expenses.

Net Income and Earnings Per Share. Net income attributable to SkyPeople Fruit
Juice was $0.7 million for the second quarter of 2013, a decrease of 72% as
compared to $2.4 million for the same period in 2012, while diluted earnings
per share was $0.03 as compared to $0.09 for the same period in 2012.

Financial Condition

As of June 30, 2013, the Company had $80.3 million in cash and cash
equivalents, up from $77.6 million as of fiscal year end 2012. The Company's
working capital was $73.4 million. As of June 30, 2013, the Company had total
liabilities of $28.8 million, which included $14.0 million in short-term bank
loans and an $8.0 million short-term payable to a related party. As of June
30, 2013, stockholders' equity attributable to SkyPeople Fruit Juice was
$163.7 million as compared to $156.5 million as of fiscal year end 2012.

During the six months ended June 30, 2013, the Company's operating activities
generated a net cash inflow of $29.8 million, as compared to $25.1 million for
the same period in 2012. Net cash used in investing activities were $38.5
million for the six months ended June 30, 2013 as compared to $3.4 million for
the same period in 2012. For the six months ended June 30, 2013, cash flow
generated from financing activities totaled $10.1 million as compared to $5.2
million for the same period in 2012. Historically, the Company has financed
its capital expenditures and other operating expenses through cash on hand,
operating cash flows and bank loans.

Second Quarter Developments

In the second quarter of 2013, SkyPeople (China) announced an agreement to
manufacture and market kiwi products. On April 3, 2013, SkyPeople (China)
entered into an investment agreement with the Managing Committee of Mei County
National Kiwi Fruit Wholesale Trading Center, which has been authorized by the
People's Government of Mei County to be in charge of the construction and
administration of the Mei County National Kiwi Fruit Wholesale Trading Center.

Under the investment agreement, the parties agreed to invest and establish a
kiwi fruit comprehensive deep processing zone and kiwi fruit and fruit-related
materials trading zone in Mei County with a total planned area of total
planned area of approximately 47 acres.

Pursuant to the investment agreement, the Company will be responsible for
construction and financing with a total investment of approximately $71.9
million in buildings and equipment.In addition, the Company agreed to pay a
fee of RMB 0.3 million per mu for the land use rights.

Conference Call

The Company will hold a conference call on Thursday, August 15, 2013 at 9:00
am Eastern Time to discuss its financial results for the first quarter ended
June 30, 2013. The Company's Chairman, Mr. Yongke Xue, and Chief Financial
Officer, Mr. Xin Ma, will host the call.

To attend the live conference call, please dial in at least 10 minutes before
the call to ensure timely participation.Please use the dial-in information
below. When prompted by the operator, mention the conference Pass Code.

Date:                                              Thursday, August 15, 2013
Time:                                              9:00 am Eastern Time, US
Conference Line Dial-In:              +1-855-880-8437
International Dial-In:                             +1-931-229-4159
Conference Pass Code:                              28953219

To access the replay, please dial 1-855-859-2056 within the United States or
1-404-537-3406 when dialing internationally, and enter the pass code 28953219
for the replay. The replay will be available on August 15, 2013 at 12:00 pm.

About SkyPeople Fruit Juice, Inc.

SkyPeople Fruit Juice, Inc., a Florida company, through its wholly-owned
subsidiary Pacific Industry Holding Group Co., Ltd. ("Pacific"), a Vanuatu
company, and SkyPeople Juice International Holding (HK) Ltd., a company
organized under the laws of Hong Kong Special Administrative Region of the
People's Republic of China and a wholly owned subsidiary of Pacific, holds
99.78% ownership interest in SkyPeople Juice Group Co., Ltd. ("SkyPeople
(China)"). SkyPeople (China), together with its operating subsidiaries in
China, is engaged in the production and sales of fruit juice concentrates,
fruit beverages, and other fruit related products in the PRC and overseas
markets. 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 brands, "Hedetang" and
"SkyPeople," which are registered trademarks in the PRC, are positioned as
high quality, healthy and nutritious end-use juice beverages. For more
information, please visit http://www.skypeoplefruitjuice.com.

Safe Harbor Statement

Certain of the statements made in this press release are "forward-looking
statements" within the meaning and protections of Section 27A of the
Securities Act of 1933, as amended and Section 21E of the Securities Exchange
Act of 1934, as amended, or the Exchange Act. Forward-looking statements
include statements with respect to our beliefs, plans, objectives, goals,
expectations, anticipations, assumptions, estimates, intentions, and future
performance, and involve known and unknown risks, uncertainties and other
factors, which may be beyond our control, and which may cause the actual
results, performance, capital, ownership or achievements of the Company to be
materially different from future results, performance or achievements
expressed or implied by such forward-looking statements. All statements other
than statements of historical fact are statements that could be
forward-looking statements. You can identify these forward-looking statements
through our use of words such as "may," "will," "anticipate," "assume,"
"should," "indicate," "would," "believe," "contemplate," "expect," "estimate,"
"continue," "plan," "point to," "project," "could," "intend," "target" and
other similar words and expressions of the future.

All written or oral forward-looking statements attributable to us are
expressly qualified in their entirety by this cautionary notice, including,
without limitation, those risks and uncertainties described in our annual
report on Form 10-K for the year ended December 31, 2012 and otherwise in our
SEC reports and filings, including the final prospectus for our offering. Such
reports are available upon request from the Company, or from the Securities
and Exchange Commission, including through the SEC's Internet website at
http://www.sec.gov. We have no obligation and do not undertake to update,
revise or correct any of the forward-looking statements after the date hereof,
or after the respective dates on which any such statements otherwise are made.

-Financial Tables Follow-

SKYPEOPLE FRUIT JUICE, INC.
CONSOLIDATED BALANCE SHEETS
                                              June 30, 2013  December 31, 2012
                                                (Unaudited)
ASSETS
CURRENT ASSETS
 Cash and cash equivalents                 $ 80,313,361   $   77,560,278
 Accounts receivables, net of allowance
 of $47,449 and $46,643 as of June 30, 
                                                13,245,982       49,435,961
 2013 and December 31, 2012, 
 respectively
 Other receivables                           679,791          201,417
 Inventories                                 7,602,110        7,278,191
 Deferred tax assets                         239,791          90,576
 Advances to suppliers and other             82,627           71,536
 current assets
TOTAL CURRENT ASSETS                            102,163,662      134,637,959
PROPERTY, PLANT AND EQUIPMENT, NET              51,411,503       52,180,097
LAND USE RIGHT, NET                             6,528,225        6,508,149
OTHER ASSETS                                    39,992,556       1,892,806
TOTAL ASSETS                                  $ 200,095,946  $   195,219,011
LIABILITIES
CURRENT LIABILITIES
 Accounts payable                          $ 4,633,338    $   14,399,282
 Accrued expenses                            1,805,446        2,050,675
 Income tax payable                          232,459          3,127,245
 Advances from customers                     120,567          530,437
 Short-term loan - related parties           8,000,000        -
 Short-term bank loans                       13,983,524       11,661,761
TOTAL CURRENT LIABILITIES                     $ 28,775,334   $   31,769,400
STOCKHOLDERS' EQUITY
SkyPeople Fruit Juice, Inc, Stockholders'
equity
 Series B Preferred stock, $0.001 par
 value; 10,000,000 shares authorized;        -                -
 none issued and outstanding as of
 June 30, 2013 and December 31, 2012
 Common stock, $0.001 par value;
 66,666,666 shares authorized;
 26,661,499 issued and outstanding as        26,661           26,661
of,
June 30, 2013 and December 31,
 2012, respectively
 Additional paid-in capital                  59,189,860       59,189,860
 Retained earnings                           87,291,775       82,793,585
 Accumulated other comprehensive             17,165,635       14,500,860
 income
 Total SkyPeople Fruit Juice, Inc.           163,673,931      156,510,966
 stockholders' equity
 Non-controlling interests                   7,646,681        6,938,645
TOTAL STOCKHOLDERS' EQUITY                      171,320,612      163,449,611
TOTAL LIABILITIES AND STOCKHOLDERS'
                                              $ 200,095,946  $   195,219,011
EQUITY







SKYPEOPLE FRUIT JUICE, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
                    Three Months Ended            Six Months Ended
                    June 30,       June 30,       June 30,       June 30,
                    2013           2012           2013           2012
Revenue             $ 10,349,909   $ 12,837,273   $ 28,961,365   $ 27,830,773
Cost of sales         6,995,919      8,615,882      17,966,477     18,823,383
Gross Margin          3,353,990      4,221,391      10,994,888     9,007,390
Operating Expenses
General and
administrative        1,281,515      653,803        2,587,429      2,132,375
 expenses
Selling expenses      1,212,921      521,782        1,954,087      1,047,116
Research and
development           (79,642)       142,685        18,980         285,370
  expenses
Total operating       2,414,794      1,318,270      4,560,496      3,464,861
expenses
Income from           939,196        2,903,121      6,434,392      5,542,529
Operations
Otherincome
(expense)
Interest income       82,941         87,016         154,520        156,705
Subsidy income        435,839        649,607        786,813        1,083,111
Interest expense      (351,033)      (248,332)      (628,056)      (403,144)
Total other income    167,747        488,291        313,277        836,672
(expense)
Income before         1,106,943      3,391,412      6,747,669      6,379,201
income tax
 Income tax        322,754        864,293        1,806,619      1,792,673
provision
Net Income            784,189        2,527,119      4,941,050      4,586,528
Less: Net income
attributable to
                      104,147        126,468        442,860        266,719
non-controlling
interests
NET INCOME
ATTRIBUTABLE TO
                      680,042        2,400,651      4,498,190      4,319,809
SKYPEOPLE FRUIT
JUICE, INC.
Other
comprehensive
income
 Foreign
currency              2,518,720      (715,096)      2,929,951      (558,525)
translation
 adjustment
Comprehensive       $ 3,198,762    $ 1,685,555    $ 7,428,141    $ 3,761,284
income
Other
Comprehensive
income
                      227,957        (29,617)       265,176        (23,136)
attributable to
non-controlling

interests
COMPREHENSIVE
INCOME

ATTRIBUTABLE TO     $ 2,970,805    $ 1,715,172    $ 7,162,965    $ 3,784,420
SKYPEOPLE

FRUIT JUICE, INC.
Earnings Per
Share:
 Basic earnings  $ 0.03         $ 0.09         $ 0.17         $ 0.16
per share
 Diluted         $ 0.03         $ 0.09         $ 0.17         $ 0.16
earnings per share
Weighted Average Shares
Outstanding
 Basic             26,661,499     25,820,951     26,661,499     25,755,677
 Diluted           26,661,499     26,661,499     26,661,499     26,661,499





SKYPEOPLE FRUIT JUICE, INC.
CONSOLIDATED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
                                             For the Six Months Ended June 30,
                                             2013               2012
CASH FLOW FROM OPERATING ACTIVITIES
Net income                                   $  4,941,050       $ 4,586,528
Adjustments to reconcile net income to net
cash flow

provided by operating activities
Depreciation and amortization                   1,510,091         1,434,420
Deferred income tax                             (149,215)         41,656
Changes in operating assets and liabilities
 Accounts receivables                         36,671,171        20,855,020
 Other receivable                             (470,281)         (38,559)
 Advances to suppliers and other current       (10,174)          (83,436
assets
 Inventories                                  841,381           945,181
 Accounts payable                             (9,913,912)       62,809
 Accrued expenses                             (270,092)         (1,545,105)
 Income tax payable                           (2,919,124)       (1,025,682)
 Advances from customers                      (414,816)         (178,673)
Net cash provided by operating activities       29,816,079        25,054,159
Cash Flow from Investing Activities
 Additions to property, plant and equipment    (485,142)         (1,249,417)
 Prepayment for other assets                   (38,000,669)      (2,142,656)
Net cashused in investing activities           (38,485,811)      (3,392,073)
CASH FLOWS FROM FINANCING ACTIVITIES
 Increase in restricted cash                   -                 284,361
 Short-term notes payable                      -                 (284,361)
 Proceeds from related party loan              8,000,000         -
 Proceeds from short-term loan bank loans      8,653,944         6,341,757
 Repayment of short-term bank loans            (6,555,123)       (1,139,578)
Net cash provided by financing activities       10,098,821        5,202,179
Effect of change in exchange rate               1,323,994         (305,401)
NET INCREASE IN CASH AND CASH EQUIVALENTS       2,753,083         26,558,864
 Cash and cash equivalents, beginning of       77,560,278        61,154,007
period
 Cash and cash equivalents, end of period   $  80,313,361      $ 87,712,871
SUPPLEMENTAL DISCLOSURES OF CASH FLOW

INFORMATION
 Cash paid for interest                     $  496,209         $ 403,145
 Cash paid for income taxes                 $  4,874,958       $ 2,776,698
SUPPLEMENTAL DISCLOSURE OF SIGNIFICANT

NON-CASH TRANSACTION
 Transferred from other assets to
property, plant and                          $  317,258         $ 5,225,307
 equipment and construction in progress
The notes in the Company's 10-Q are an integral part of these consolidated
financial
statements.



For more information, please contact:


COMPANY
Xin Ma, Chief Financial Officer
SkyPeople Fruit Juice, Inc.
Tel: China + 86 - 29-8837-7161
Email: oliver.x.ma@skypeoplefruitjuice.com
Web: http://www.skypeoplefruitjuice.com

SOURCE SkyPeople Fruit Juice, Inc.

Website: http://www.skypeoplefruitjuice.com
 
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