SkyPeople Fruit Juice Reports First Quarter 2014 Financial Results

      SkyPeople Fruit Juice Reports First Quarter 2014 Financial Results

PR Newswire

XI'AN , China, May 15, 2014

XI'AN , China, May 15, 2014 /PRNewswire/ -- SkyPeople Fruit Juice, Inc.
(NASDAQ: SPU - News) ("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 first quarter ended March 31, 2014.

First Quarter 2014 Summary:

  oRevenue was $11.8 million, a decrease of 37% year-over-year
  oGross profit was $3.7 million, a decrease of 51% year-over-year
  oGross profit margin was 31% as compared to 41% for the same period of 2013
  oIncome from operations was $1.6 million, a decrease of 71% year-over-year
  oNet income attributable to the Company was $0.5 million, a decrease of 87%
    year-over-year
  oCash and cash equivalents were $76.0 million as of March 31, 2014

"We recorded disappointing results for the first quarter of 2014 with lower
sales in all of our product segments due a limited inventory of raw materials
and finished products. Although we were able to generate positive cash flow in
the quarter, the constrained availability of raw materials that we require for
processing and production hampered the quarter's financial results," said Mr.
Hongke Xue, Chief Executive Officer of SkyPeople.

"However, we believe that our new project to develop orange products in Hubei
Province is a key initiative towards securing supply and mitigating
uncertainties associated with the sourcing of our fresh fruit raw materials.
It also enables us to enact a strategy to vertically integrate our business
operations and gain efficiencies.

"In addition, another of our new projects to manufacture and market kiwi
products in Mei County is moving ahead on schedule. We are now in the process
of building facilities and purchasing equipment, and we expect to begin trial
production by the end of June. We believe that these two projects will help to
ensure the supply of raw materials, augment our existing product platform and
ultimately drive additional revenue.

"We continue to believe that China's continued economic growth and
urbanization will augur well for the Company and that we are poised to further
penetrate our markets. In particular, given the relatively low domestic
consumption rate of fruit juice beverages, we believe that our branded fruit
juice, distributed in over 20,000 retail stores, are well positioned to
capitalize upon this market opportunity," Mr. Hongke Xue concluded.

First Quarter 2014 Financial Results

Revenue for the three months ended March 31, 2014 was $11.8 million, a
decrease of 37% as compared to $18.6 million for the same period of 2013. This
decrease was due to a decline in sales in all of the Company's major product
segments. The apple segment's contribution to revenue was diminished due to
the difficult market conditions for apple-related products that occurred in
first quarter of 2014. The concentrated pear juice and kiwi-related products
segments declined substantially from the year-ago period as well, with
period-to-period declines in both volume and unit price due to lower
inventories of these products.

The fruit juice beverages segment declined 13% in the first quarter of 2014 as
compared to the year-ago period attributable to extended holidays in the
quarter. However, it comprised 63% of total Company revenue for the first
quarter of 2014 versus 44% in the year-ago quarter and was an important factor
in mitigating a further decrease in total Company revenue for the quarter.

First Quarter 2014 Revenue by Product Segment

(in $000's except %)                 Three Months ended March 31,
                                     2014              2013        % of change
Concentrated apple juice and apple   274               636         (57%)
aroma
Concentrated kiwifruit juice and     1,834             3,419       (46%)
kiwi puree
Concentrated pear juice              2,213             5,173       (57%)
Fruit juice beverages                7,440             8,585       (13%)
Fresh fruits and vegetables          4                 798         (99%)
Other                                18                -           100%
Total                                11,783            18,611      (37%)

First Quarter 2014 Gross Profit by Product Segment

Gross profit was $3.7 million in the first quarter of 2014, a decrease of 51%
from $7.6 million for the same period in 2013. The Company's total gross
profit margin was 31% in the first quarter of 2014 as compared to 41% for the
same period of 2013, primarily due to the higher cost of fresh fruit. The
fruit juice beverages segment's gross profit margin decreased to 32% in the
first quarter of 2014 from 41% for the same period of 2013 primarily due to
lower selling prices of the Company's products.

(In $000's except %)                    Three months ended March 31,
                                                      2014      2013
                                        Gross profit    Gross   Gross   Gross
                                                        margin  profit  margin
Concentrated apple juice and apple      (72)            (26%)   31      5%
aroma
Concentrated kiwifruit juice and kiwi   753             41%     2,114   62%
puree
Concentrated pear juice                 576             26%     1,599   31%
Fruit juice beverages                   2,416           32%     3,512   41%
Fresh fruits and vegetables             4               100%    385     48%
Other                                   (6)             (33%)   -       -
Total                                   3,671           31%     7,641   41%

Operating expenses for the first quarter of 2014 was $2.1 million, or 17% of
sales, as compared to $2.1 million, or 12% of sales for the same period of
2013. General and administrative expenses decreased 9% to $1.2 million in the
first quarter of 2014 as compared to $1.3 million for the same period of 2013,
mainly due to the continued decrease in legal fees related to currently
pending litigation, payroll and related expenses.Selling expenses increased
17% in the first quarter of 2014 to $0.9 million as compared to $0.7 million
for the same period of 2013, mainly due to an increase in the headcount of the
Company's sales force. The Company did not incur research and development
expenses in the first quarter of 2014 as it is in the process of building its
own research and development team.

Income from operations was $1.6 million for the first quarter of 2014, a
decrease of 71% as compared to $5.5 million for the same period of 2013.

Net income attributable to SkyPeople Fruit Juice for the first quarter of 2014
was $0.5 million for the first quarter of 2014, a decrease of 87% as compared
to $3.8 million for the same period of 2013, while earnings per share was
$0.02 for the current period, as compared to $0.67 for the same period of
2013.

Financial Condition

As of March 31, 2014, the Company had $83.6 million in cash, cash equivalents
and restricted cash, up from $74.1 million as of fiscal year end 2013. The
Company's restricted cash of $7.6 million consists of cash equivalents used as
collateral to secure short-term notes payable. The Company's working capital
was $67.8 million. As of March 31, 2014, the Company had total liabilities of
$51.7 million which included $35.1 million in short-term bank loans and bank
notes payable and an $8.0 million long-term loan to a related party. As of
March 31, 2014, shareholders' equity attributable to SkyPeople Fruit Juice was
$172.5 million as compared to $173.5 million as of fiscal year end 2013.

For the first quarter ended March 31, 2014, the Company's operating activities
generated a net cash inflow of $14.9 million as compared to $13.2 million for
the same period of 2013. Net cash used in investing activities was $3.9
million for the quarter ended March 31, 2014 as compared to $0.4 million for
the same period of 2013. For the first quarter ended March 31, 2014, cash flow
used in financing activities totaled $1.2 million as compared to cash flow
provided by financing activities of $0.8 million for the same period of 2013.
Historically, the Company has financed its capital expenditures and other
operating expenses through cash on hand, operating cash flow and bank loans.

Project Updates

The Company is developing a fruit and vegetable industry chain and processing
zone in Suizhong County, Liaoning Province, China, pursuant to its Letter of
Intent with the People's Government of Suizhong County. 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 and a fruit and
vegetable finished products processing center, among other facilities. The
estimated capital expenditure for the project is expected to be $4.6 million.
During 2013, the Company finished the feasibility study of the project and
submitted a detailed project proposal to the local government with the result
that both parties decided to continue with the project. It is expected that
the certificate of land use right will be granted to the Company in 2014.

The Company is developing an orange processing and distribution center
pursuant to its investment/service agreement with the Yidu Municipal People's
Government in Hubei Province, China. Pursuant to the agreement, the Company
will be responsible for an investment amount of approximately $48 million. The
Yidu Municipal People's Government is in the process of demolition of
buildings on the project land and the Company is actively working with various
bodies of the local government to make preparations for the start of the
project.

The Company is developing a kiwi processing and trading center pursuant to its
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, China. Pursuant to the agreement, the Company will
be responsible for construction and financing with an investment amount of
approximately $72 million. As an update, the Company is in the process of
building facilities and purchasing equipment for the project, and it is
expected that trial production will begin by the end of June.

Conference Call

The Company will hold a conference call on Friday, May 16, 2014 at 9:00 am
Eastern Time to discuss its financial results for the first quarter ended
March 31, 2014. 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:                    Friday, May 16, 2014
Time:                    9:00 am Eastern Time, US
Conference Line Dial-In: +1-877-407-8031
International Dial-In:   +1-201-689-8031

To access the replay, please dial 1-877-660-6853 within the United States or
1-201-612-7415 when dialing internationally. The pass code for the replay is
13582913 and it will be available from May 16, 2014 at 12:00 pm through May
23, 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
                                    March 31, 2014        December 31, 2013
                                         (Unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents          $    76,035,402        $    66,888,954
Restricted cash                         7,639,668              7,216,782
Accounts receivables, net of
allowance of $209,146 and
$211,039 as of March 31, 2014           20,606,619             34,179,426
and
December 31, 2013, respectively
Other receivables                       566,819                575,040
Inventories                             4,965,574              4,381,900
Deferred tax assets                     851,863                535,713
Advances to suppliers and other         861,740                1,298,201
current assets
TOTAL CURRENT ASSETS                     111,527,685            115,076,016
PROPERTY, PLANT AND EQUIPMENT,           65,210,720             61,907,175
NET
LAND USE RIGHT, NET                      6,417,224              6,522,152
LONG TERM ASSETS                         1,572,634              -
OTHER ASSETS                             47,896,839             49,614,200
TOTAL ASSETS                        $    232,625,102       $    233,119,543
LIABILITIES
CURRENT LIABILITIES
Accounts payable                   $    4,918,804         $    3,572,968
Accrued expenses                        2,962,570              4,008,715
Income tax payable                      456,003                1,749,138
Advances from customers                 308,143                355,968
Notes payable -bank                     1,215,682              10,825,173
Short-term loan - related party         -                      24,970
Short-term bank loans                   23,876,397             22,626,679
TOTAL CURRENT LIABILITIES                43,737,599             43,163,611
NON-CURRENT LIABILITIES
Long-term loan - related party          8,000,000              8,000,000
TOTAL NON-CURRENT LIABILITIES            8,000,000              8,000,000
TOTAL LIABILITIES                        51,737,599             51,163,611
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 March 31,
2014
and December 31, 2013,
respectively
Common stock, $0.001 par value;
66,666,666 shares authorized;
26,661,499 shares issued and
outstanding as of March 31,             26,661                 26,661
2014
and December 31, 2013,
respectively
Additional paid-in capital              59,189,860             59,189,860
Retained earnings                       95,465,971             94,962,299
Accumulated other comprehensive         17,803,467             19,354,599
income
Total SkyPeople Fruit Juice,
Inc.                                     172,485,959            173,533,419
stockholders' equity
Non-controlling interests               8,401,544              ,422,513
TOTAL STOCKHOLDERS' EQUITY               180,887,503            181,955,932
TOTAL LIABILITIES AND               $    232,625,102       $    233,119,543
STOCKHOLDERS' EQUITY
The accompanying notes in the Company's 10-Q are an integral part of these
consolidated financial statements.



SKYPEOPLE FRUIT JUICE, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
                                          For the Three Months ended March 31,
                                          2014               2013
Revenue                                 $ 11,783,167         $    18,611,456
Cost of goods sold                        8,111,932               10,970,558
Gross profit                              3,671,235               7,640,898
Operating Expenses
General and administrative expenses      1,193,121               1,305,914
Selling expenses                         864,498                 741,166
Research and development expenses        -                       98,622
Total operating expenses                  2,057,619               2,145,702
Income from operations                    1,613,616               5,495,196
Other income (expenses)
Interest income                          73,661                  71,579
Subsidy income                           433,597                 350,974
Interest expenses                        (812,421)               (277,023)
Consulting fee related to capital        (442,792)               -
lease
Total other income (expenses)             (747,955)               145,530
Income before income tax                  865,661                 5,640,726
Income tax provision                     228,602                 1,483,865
Net income                                637,059                 4,156,861
Less: Net income attributable to          133,387                 338,713
non-controlling interests
Net income attributable to SkyPeople    $ 503,672            $    3,818,148
Fruit Juice, Inc.
Other comprehensive income (loss)
Foreign currency translation adjustment   (1,705,488)             411,231
Comprehensive income (loss)               (1,201,816)             4,229,379
Other comprehensive income (loss)
attributable to non-controlling           (154,356)               37,219
interests
COMPREHENSIVE INCOME (LOSS)
ATTRIBUTABLE TO SKYPEOPLE FRUIT JUICE,  $ (1,047,460)        $    4,192,160
INC.
Earnings per share:
Basic and diluted earnings per share   $ 0.02               $    0.67
Weighted average number of shares
outstanding
Basic and diluted                        26,661,499              26,661,499
The accompanying notes in the Company's 10-Q are an integral part of these
consolidated financial statements.



SKYPEOPLE FRUIT JUICE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
                                          For the three months ended March 31,
                                          2014                 2013
CASH FLOWS FROM OPERATING ACTIVITIES
Net income                                $   637,059          $  4,156,861
Adjustments to reconcile net income to
net cash provided by operating
activities
Depreciation and amortization                942,144             863,343
Deferred income tax assets                   (316,150)           (56,550)
Consulting fee related to capital            442,792             -
lease
Changes in operating assets and
liabilities
Accounts receivable                          13,340,071          18,455,170
Other receivable                             3,170               (263,398)
Advances to suppliers and other              1,038,662           (69,496)
current assets
Inventories                                  (256,290)           107,472
Accounts payable                             1,385,574           (7,298,251)
Accrued expenses                             (1,020,245)         (513,157)
Income tax payable                           (1,284,561)         (1,785,680)
Advances from customers                      (44,880)            (403,363)
Net cash provided by operating                14,867,346          13,192,951
activities
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property, plant and             (3,851,844)         (428,692)
equipment
Purchase of land use right                   (15,038)            -
Prepayment for other assets                  -                   (9,600)
Net cash used in investing activities         (3,866,882)         (438,292)
CASH FLOWS FROM FINANCING ACTIVITIES
Increased in restricted cash                 (490,356)           -
Short-term notes payable                     490,356             -
Proceeds from related party loan             -                   4,000,000
Proceeds from short-term bank                2,025,169           -
loans
Repayment of short-term bank loans           (564,334)           (3,185,474)
Payment for capital lease                    (2,635,665)         -
Repayment of related party loans             (24,970)            -
Net cash provided by (used in) financing      (1,199,800)         814,526
activities
Effect of change in exchange rate             (654,216)           191,340
NET INCREASE (DECREASE) IN CASH AND CASH      9,146,448           13,760,525
EQUIVALENTS
Cash and cash equivalents,                   66,888,954          77,560,278
beginning of year
Cash and cash equivalents, end of        $   76,035,402       $  91,320,803
year
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION
Cash paid for interest                   $   753,875          $  250,722
Cash paid for income taxes               $   1,829,313        $  3,326,095
SUPPLEMENTARY DISCLOSURE OF SIGNIFICANT
NON-CASH TRANSACTION
Transferred from other assets to
property, plant and equipment and        $   1,294,323        $  315,394
construction in process
The accompanying notes in the Company's 10-Q are an integral part of these
consolidated financial statements.



SOURCE SkyPeople Fruit Juice, Inc.

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