SkyPeople Fruit Juice Reports Full Year 2013 Financial Results

        SkyPeople Fruit Juice Reports Full Year 2013 Financial Results

PR Newswire

XI'AN, China, March 31, 2014

XI'AN, China, March 31, 2014 /PRNewswire/ -- 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 fiscal year ended December 31, 2013.

Full Year 2013 Summary:

  oTotal revenue was $79.0 million, a decrease of 23% year-over-year
  oGross profit was $27.6 million, a decrease of 17% year-over-year
  oGross profit margin was 35% as compared to 32% year-over-year
  oNet income attributable to SkyPeople Fruit Juice, Inc. decreased 33%
    year-over-year to $12.2 million
  oRevenue from the fruit juice beverage segment was $39.5 million, an
    increase of 46% year-over-year
  oCash, cash equivalents and restricted cash were $74.1 million as of
    December 31, 2013

"We recorded less than expected financial results for fiscal year 2013 as
several of our operating segments were hampered by a limited supply of fresh
fruit for most of the year," said Mr. Hongke Xue, Chief Executive Officer of
SkyPeople. "Although our first quarter's performance showed promise, a
difficult squeezing season for several of our raw material fruit products,
particularly apples, reduced the production of our core products for the
remainder of the year.

"On the bright side, our fruit juice beverages segment had a record year as
our investment in bottling infrastructure and an expanded sales and marketing
team is generating solid returns. Our fruit juice beverages products are
soldvia over 100 distributorsin more than 20,000 retail stores in
approximately 30 provinces in China.

"We are also making substantial progress with our new project growth
initiatives intended to develop a more secure supply chain so that we might
have greater control of our raw materials. We believe that our projects to
produce kiwis in Mei County and oranges in Yidu, Hubei Province will give us a
competitive advantage and generate substantial returns for our shareholders. A
deeper product platform will enable us to further diversify our product mix,
reduce the volatility of supply and generate stable cash flow.

"We continue to see China as a tremendous growth market as higher incomes,
urbanization and changing demographics will lead to healthier lifestyles and
improved nutrition. Our outlook for 2014 is positive as we are optimistic that
our diversified product line will see a turnaround from the difficult
squeezing seasons experienced in 2013, our branded fruit juice beverages
business will gain further traction and our new projects will continue to make
important progress," CEO Hongke Xue concluded.

Full Year 2013 Financial Results

Revenue for the twelve months ended December 31, 2013 was $79.0 million, a
decrease of 23%, as compared to $102.4 million for 2012. This decrease was
primarily due to a decrease in the sales of concentrated apple juice,
concentrated pear juice,fresh fruits and vegetables and other products, which
was partially offset by an increase in sales of fruit juice beverages and
concentrated kiwi juice and kiwi puree. During 2013, due to unexpected weather
conditions, the amount of apple output in northeast China was lower than
usual, which in turn resulted in higher raw material costs for apples.
Therefore, the Company's Yingkou factory did not produce concentrated apple
juice during the year which is a major reason for the decrease in revenue. The
fruit juice beverages segment comprised 50% of total revenue for fiscal 2013
as compared to 27% for fiscal 2012 and was a large factor in mitigating the
effects of reduced revenue contributions from most of the Company's other
product segments for the year.

Fiscal Year Revenue by Segment (in thousands)

(In $000's, except %'s)                  Years ended December 31,
                                         2013          2012        % of change
Concentrated apple juice and apple aroma 7,531         22,887      (67)%
Concentrated kiwifruit juice and kiwi    9,808         9,152       7%
puree
Concentrated pear juice                  20,396        28,925      (29)%
Fruit juice beverages                    39,548        27,137      46%
Fresh fruits and vegetables              814           8,417       (90)%
Other                                    889           5,838       (85)%
Total                                    78,986        102,356     (23)%

Gross profit was $27.6 million in fiscal 2013, a decrease of 17% from $33.1
million in fiscal 2012. The gross profit margin was 35% in 2013 as compared
to 32% for 2012. The year-over-year increase in gross margin was primarily
attributable due to the fruit beverage segment, which comprised 53% of the
Company's total gross profit for fiscal year 2013, as compared to 28% in
fiscal 2012, and a higher relative contribution from the concentrated
kiwifruit juice and kiwifruit puree segment which had a 44% gross margin in
fiscal 2013.

(In $000's, except %'s)             2013                        2012
                                    Gross profit  Gross margin  Gross   Gross
                                                                profit  margin
Concentrated apple juice and apple  1,535         20%           4,640   20%
aroma
Concentrated kiwifruit juice and    4,313         44%           4,535   50%
kiwi puree
Concentrated pear juice             6,500         32%           8,507   29%
Fruit juice beverages               14,646        37%           9,288   34%
Fresh fruits and vegetables         395           49%           4,663   55%
Other                               164           18%           1,440   25%
Total                               27,553        35%           33,073  32%

Operating expenses for fiscal 2013 increased by 19% to $9.4 million, or 12% of
sales, compared to $7.9 million, or 8% of sales for fiscal 2012. General and
administrative expenses increased 20% to $5.3 million in fiscal 2013 from $4.4
million for fiscal 2012,and includes legal fees related to litigation,
payroll and directors' and officers' insurance premiums. The increase in
general and administration expenses were mainly due to depreciation for
property, plant and equipment attributable to the Company's Yingkou factory
that had not been used during 2013 of approximately $0.8 million.Selling
expenses increased 41% to $4.1 million in fiscal 2013 from $2.9 million in
fiscal 2012, which was mainly due to an increase in the payroll and related
expenses as a result of an increase in the Company's headcount to handle the
increased sales of fruit juice beverages.

During the fiscal years 2013 and 2012, the Company incurred approximately
$0.02 million and $0.6 million in research and development expenses,
respectively. In 2013, the Company suspended four research and development
agreements with research institutions and currently intends to concentrate on
building up an internal research and development team.

Income from operations for fiscal 2013 was $18.2 million, a decrease of 28%
from $25.2 million for fiscal 2012. Net income attributable to SkyPeople
Fruit Juice shareholders for the fiscal year 2013 was $12.2 million, a
decrease of 33% from $18.2 million in fiscal 2012, while diluted earnings per
share was $0.46 for fiscal year 2013 as compared to $0.68 for fiscal year
2012.

Financial Condition

As of December 31, 2013, the Company had $74.1 million in cash, cash
equivalents and restricted cash, reduced from $77.6 million as of fiscal year
end 2012. The Company's restricted cash of $7.2 millionconsists of cash
equivalentsused as collateral tosecure short-term notes payable. The
Company's working capital was $71.9 million. As of December 31, 2013, the
Company had total liabilities of $51.2 million, which included $8.0 million in
long-term loans from a related party and $22.6 million in short-term bank
loans.Stockholders' equity attributable to SkyPeople Fruit Juice was $173.5
million as of fiscal year end 2013 as compared to $156.5 million as of fiscal
year end 2012.

During 2013, the Company's operating activities generated a net cash inflow of
$24.9 million, an increase of 26% as compared to $19.7 million in 2012. Net
cash used in investing activities were $60.0 million for fiscal 2013 versus
$8.8 million in fiscal 2012. Cash flow generated from financing activities
totaled $22.0 million in fiscal 2013 versus $5.3 million in fiscal 2012.
Historically, the Company has financed its capital expenditures and other
operating expenses through operating cash flows and bank loans.

Project Updates

On July 15, 2011, SkyPeople entered into a Letter of Intent with the People's
Government of Suizhong County, Liaoning Province, to establish a fruit and
vegetable industry chain and processing zone in Suizhong County, Liaoning
Province. The Suizhong project may include the construction and operation of
fruit juice production lines, a vegetable and fruit flash freeze facility, a
refrigeration storage facility and warehouse, a world-class food safety
testing center, fruit and vegetable finished products processing center among
other facilities. The implementation of the project is subject to government
approval of the project.

During 2013, the Company finished the feasibility study of the project and
submitted a detailed project proposal to the local government. Both parties
decided to continue with the project. The Company paid RMB 78 million
(approximately $13 million) as partial payment to acquire the land use right
from the local government, purchase equipment and build facilities.

On October 29, 2012, SkyPeople (China) entered into an investment/service
agreement with the Yidu Municipal People's Government in Hubei Province of
China. The total amount of RMB 300 million (approximately $48 million) will
be mainly used to establish an orange processing and distribution center on
the project land of 280 mu (approximately 46 acres). The consideration for
transferring the land use right for the project land will be RMB 0.3 million
(approximately $0.05 million) per mu.

During 2013, the Company made partial payment of RMB 77 million (approximately
$12.4 million) as consideration to acquire the land use right. Yidu Municipal
People's Government is in the process of demolition buildings on project land.
The Company is actively working with various bodies of the Yidu Municipal
People's Government to make preparations for the start of the project.

On April 3, 2013, SkyPeople (China) announced an agreement to manufacture and
market kiwi products, entering 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. The total planned area for the project is 286
mu (approximately 47 acres). Pursuant to the investment agreement, the
Company will be responsible for construction and financing with a total
investment of RMB 445.6 million (approximately $71.9 million) in buildings and
equipment.In addition, the Company agreed to pay a fee of RMB 0.3 million
(approximately $0.05 million) per mu for the land use rights.

During 2013, the Company made partial payment of RMB200 million
(approximately $32 million) as consideration to acquire the land use right,
purchase equipment and build facilities. The Company is actively working with
the Committee to prepare for the start of the project.

Conference Call

The Company will hold a conference call on Wednesday, April 2, 2014 at 9:00
a.m. Eastern Time to discuss its financial results for the fourth quarter and
fiscal year ended December 31, 2013.

The Company's Chairman, Mr. Yongke Xue, and CFO, 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. 

Date:                                              Wednesday, April 2, 2014
Time:                                              9:00 a.m. Eastern Time, US
Conference Line Dial-In:              +1-877-407-8033
International Dial-In:                             +1-201-689-8033

To access the replay, please dial 1-877-660-6853 within the United States or
1-201-612-7415 when dialing internationally. The passcode for the replay is
13579369 and it will be available on April 2, 2014 at 12:00 pm through April
9, 2014.

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, 2013 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
                                      December 31,
                                      2013                   2012
ASSETS
CURRENT ASSETS
 Cash and cash equivalents         $    66,888,954        $   77,560,278
 Restricted cash                        7,216,782             -
 Accounts receivables, net of
 allowance of $211,039 and
 $46,643 as of December 31,           34,179,426            49,435,961
 2013 and December 31, 2012,
 respectively
 Other receivables                      575,040               201,417
 Inventories                            4,381,900             7,278,191
 Deferred tax assets                    535,713               90,576
 Advances to suppliers and
other                                      1,298,201             71,536
 current assets
TOTAL CURRENT ASSETS                       115,076,016           134,637,959
PROPERTY, PLANT AND EQUIPMENT,             61,907,175            52,294,255
NET
LAND USE RIGHT, NET                        6,522,152             6,508,149
OTHER ASSETS                               49,614,200            1,778,648
TOTAL ASSETS                          $    233,119,543       $   195,219,011
LIABILITIES
CURRENT LIABILITIES
 Accounts payable                  $    3,572,968         $   14,399,282
 Accrued expenses and other             4,008,715             2,050,675
 payables
 Income tax payable                     1,749,138             3,127,245
 Advances from customers                355,968               530,437
 Notes payable -bank                    10,825,173            -
 Short-term loan - related              24,970                -
party
 Short-term bank loans                  22,626,679            11,661,761
TOTAL CURRENT LIABILITIES                  43,163,611            31,769,400
NON-CURRENT LIABILITIES
 Long-term loan - related               8,000,000             -
party
TOTAL NON-CURRENT LIABILITIES              8,000,000             -
TOTAL LIABILITIES                          51,163,611            31,769,400
STOCKHOLDER' 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 
 December 31, 2013 and December
 31, 2012, respectively
 Common stock, $0.001 par value;
 66,666,666 shares authorized;
 26,661,499 shares issued and             26,661                26,661
 outstanding as of December 31,
2013
 and 2012, respectively
 Additional paid-in capital               59,189,860            59,189,860
 Retained earnings                        94,962,299            82,793,585
 Accumulated other comprehensive          19,354,599            14,500,860
 income
 Total SkyPeople Fruit Juice,
Inc.                                       173,533,419           156,510,966
 stockholders' equity
 Non-controlling interests                8,422,513             6,938,645
TOTAL STOCKHOLDERS' EQUITY                 181,955,932           163,449,611
TOTAL LIABILITIES AND                 $    233,119,543       $   195,219,011
STOCKHOLDERS' EQUITY
The accompanying notes in the Company's 10-K are an integral part of these
consolidated financial statements.



SKYPEOPLE FRUIT JUICE, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                                              For the years Ended December 31,
                                              2013             2012
Revenue                                     $ 78,986,296       $  102,356,001
Cost of goods sold                            51,433,323          69,283,010
Gross profit                                  27,552,973          33,072,991
Operating Expenses
 General and administrative expenses        5,296,910           4,409,055
 Selling expenses                           4,058,784           2,899,141
 Research and development expenses          20,183              570,278
Total operating expenses                      9,375,877           7,878,474
Income from operations                        18,177,096          25,194,517
Other income (expenses)
 Interest income                            319,623             314,628
 Subsidy income                             1,295,949           1,908,802
 Interest expenses                          (1,983,831)         (888,574)
 Settlement relating to prior acquisition   -                   (475,248)
Total other income (expenses)                 (368,259)           859,608
Income before income tax                      17,808,837          26,054,125
 Income tax provision                      4,639,259           6,871,238
Net income                                    13,169,578          19,182,887
Less: Net income attributable to              1,000,864           1,012,755
non-controlling interests
Net income attributable to SkyPeople Fruit    12,168,714          18,170,132
Juice, Inc.
Other comprehensive income
Foreign currency translation adjustment       5,336,743           437,329
Comprehensive income                          17,505,457          18,607,461
Other comprehensive income attributable to    483,004             23,089
non-controlling interests
COMPREHENSIVE INCOME ATTRIBUTABLE TO        $ 17,022,453       $  18,584,372
SKYPEOPLE FRUIT JUICE, INC.
Earnings per share:
 Basic earnings per share                $ 0.46             $  0.68
 Diluted earnings per share              $ 0.46             $  0.68
Weighted average number of shares
outstanding
 Basic                                     26,661,499          26,107,264
 Diluted                                   26,661,499          26,661,499
The accompanying notes in the Company's 10-K are an integral part of these
consolidated financial statements.



SKYPEOPLE FRUIT JUICE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
                                              For the years ended December 31,
                                              2013              2012
CASH FLOWS FROM OPERATING ACTIVITIES
Net income                                    $  13,169,578     $ 19,182,887
Adjustments to reconcile net income to net
cash provided by operating activities
 Depreciation and amortization                  5,169,597        4,596,276
 Deferred income tax assets                     (445,137)        83,709
 Bad debt provision                             160,418          -
 Inventory markdown                             243,198          -
Changes in operating assets and liabilities
 Accounts receivable                            16,203,666       (13,290,808)
 Other receivable                               (361,983)        (8,900)
 Advances to suppliers and other                (1,205,789)      (4,861)
 current assets
 Inventories                                    2,829,649        (1,131,943)
 Accounts payable                               (11,096,289)     11,370,240
 Accrued expenses                               1,880,263        (2,648,963)
 Income tax payable                             (1,451,888)      1,206,559
 Advances from customers                        (187,907)        349,640
Net cash provided by operating activities        24,907,376       19,703,836
CASH FLOWS FROM INVESTING ACTIVITIES
 Additions to property, plant and               (12,616,030)     (7,034,822)
 equipment
Additions to land use right                    (36,733,518)     (1,205,038)
Prepayment for other assets                    (10,659,136)     (511,172)
Net cash used in investing activities            (60,008,684)     (8,751,032)
CASH FLOWS FROM FINANCING ACTIVITIES
Increased in restricted                        (7,104,451)      315,814
 cash
 Short-term notes payable                       10,656,677       (284,131)
 Proceeds from related party loan               8,024,970        -
 Proceeds from short-term bank loans            17,178,140       6,336,634
 Repayment of short-term bank loans             (6,739,021)      (1,138,658)
Net cash provided by (used in) financing         22,016,315       5,229,659
activities
Effect of change in exchange rate                2,413,669        223,808
NET INCREASE (DECREASE) IN CASH AND CASH         (10,671,324)     16,406,271
EQUIVALENTS
 Cash and cash equivalents,                     77,560,278       61,154,007
 beginning of year
 Cash and cash equivalents, end of           $  66,888,954     $ 77,560,278
 year
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION
 Cash paid for interest                      $  1,239,500      $ 888,574
 Cash paid for income taxes                  $  6,536,283      $ 5,556,241
SUPPLEMENTARY DISCLOSURE OF SIGNIFICANT
NON-CASH TRANSACTION
 Transferred from other assets to
 property, plant and equipment and          $  355,836        $ 5,221,925
 construction in process
The accompanying notes in the Company's 10-K are an integral part of these
consolidated financial statements.



For more information, please contact:

COMPANY                                    INVESTOR RELATIONS
Xin Ma, Chief Financial Officer            David Rudnick, Account Manager
SkyPeople Fruit Juice, Inc.                Precept Investor Relations
Tel: China + 86 - 29-8837-7161          Tel: US +1 917-864-8849  
Email: oliver.x.ma@skypeoplefruitjuice.com Email: david.rudnick@preceptir.com
                                           
Web: http://www.skypeoplefruitjuice.com 

SOURCE SkyPeople Fruit Juice, Inc.

Website: http://www.skypeoplefruitjuice.com
 
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