SkyPeople Fruit Juice Reports Strong Revenue and Net Income Growth for Third Quarter 2009

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:   [phone]
   Email: 

  The Piacente Group, Inc.
   Kristen McNally
   Tel:   [phone]
   Email: 

                        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


DATASOURCE: SkyPeople Fruit Juice, Inc.



CONTACT: SkyPeople Fruit Juice, Inc., Ms. Spring Liu, CFO, +1-818-390-

1272, or ; The Piacente Group, Inc., Kristen

McNally, [phone], or  



Web site: http://www.skypeoplefruitjuice.com/ 

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