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China Fruits Corporation Reports Unaudited FY2014 Second Quarter Results

BEIJING, AUG. 15, 2014 /PRNewswire-FirstCall/ -- China Fruits Corporation (OTC: CHFR) ("China Fruits" or "the Company"), a distributor and producer of fresh tangerine and other fresh fruits in the People's Republic of China, today announces financial results for the second quarter of 2014.  

Second Quarter 2014 Highlights

  • Revenues for the six months ended June 30, 2014 were $10,551,692, a 562% increase from the corresponding period in 2013.
  • Operating income for the second quarter of 2014 was $430,249, compared to operating loss of $150,212 in the same period in 2013.
  • Gross margin was 29.80% in the second quarter of 2014, a 60% increase from the corresponding period in 2013.
  • Net income attributable to China Fruits' shareholders was $315,656, a 1515% increase from the corresponding period in 2013. Fully diluted earnings per share were $0.01, compared to earnings per share of $0.0004 in the same period in 2013.

"We are very delighted to see that the company is continuously achieving organic growth in 2014. The number of our franchise retail stores is expanding to 19, and there will be more stores through direct setups and acquisitions. The profit margin is improving as we are managed to control costs and expenses efficiently," said Mr. Quanlong Chen, Chairman and Chief Executive Officer of China Fruits Corporation, "and we are excited about the future of our fruit e-commerce business, because we believe that our retail stores can give us competitive edge of our unique O2O business model."

Second Quarter 2014 Results

  • Revenues

China Fruits reported total revenue of $2,535,831 and $10,551,692 for the three and six months ended June 30, 2014, respectively, representing an increase of 197% and 562% from the corresponding period in 2013, primarily driven by the Company's continuous efforts in developing overseas markets and in increasing franchise stores.

During the six months ended June 30, 2014, the revenues from Thailand were approximately $5,650,000, or 54% of total revenues, which were $0 during the same period in 2013, and the revenues from Dubai and other markets were approximately $620,000, or 6% of total revenues, which were $0 during the same period in 2013.

Revenues from franchise retail stores increased to approximately $2,280,000 for the six months ended June 30, 2014, primarily due to the increasing number of franchise stores. The Company had 19 franchise stores as of June 30, 2014.

  • Cost of Goods Sold

Cost of goods sold was $1,780,278 for the second quarter of 2014, an increase of 156% from $695,213 for the corresponding period in 2013.

Gross margin was 29.80% for the second quarter of 2014, compared to 18.64% for the corresponding period in 2013. The increased gross margin was contributed by strengthening the Company's cost control procedure and efforts in collaboration with non-related suppliers.

  • Operating Expenses

Operating expenses for the second quarter of 2014 were $325,304, increased by 5%, compared to $309,552 from the corresponding period in 2013. The increase in operating expenses was due primarily to the increase in selling expenses.

  • Operating Income

Operating income for the second quarter of 2014 was $430,249, compared to operating loss of $150,212 in the same period in 2013.

  • Net Income and EPS

Net income attributable to China Fruits' shareholders was $315,656, a 1515% increase from the corresponding period in 2013. Fully diluted earnings per share were $0.01, compared to earnings per share of $0.0004 in the same period in 2013. The net income during the second quarter of 2014 was due primarily to the increase in revenues. The Company also received a grant from the government in amount of $32,777, which was to encourage the Company's contribution in modern agriculture.

  • Cash

As of June, 2014, China Fruits had cash and cash equivalents of $200,576, compared to $40,217 as of December 31, 2013. Cash flows used in operating activities were $275,469 for the second quarter of 2014. Cash flows used in investing activities were $177,380. Net cash provided by financing activities was $624,040.

Financial Guidance

The Company preliminarily plans to invest approximately $160,000 to develop its e-commerce business, as they believe e-commerce market will share the same significance as traditional markets in the near future. 

The Company also expects the total number of franchise stores to be increased to around 64 by the end of 2014. The expansion will be accomplished via acquisitions, franchise sales and/or direct setups.

In June of 2014, the board of directors of the Company authorized and approved to setup a new subsidiary called US-China Fruits Company Limited ("US-China Fruits") under the laws of British Virgin Islands, of which China Fruits has 99.99% ownership. The article of incorporation of US-China Fruits was filed on June 16, 2014 but the company had no activities as of June 30, 2014. The Company believes the new subsidiary will facilitate the process and increase the efficiency when they develop overseas markets.

About China Fruits Corporation

China Fruits Corporation (OTC: CHFR) is a U.S.-listed holding company, engaging in manufacturing, trading and distributing fresh tangerine and other fresh fruits in the People's Republic of China. The Company wholly owns two subsidiaries: Taina International Fruits (Beijing) Co., Ltd., which is building and operating franchise retail stores, and Jiangxi Taina Nanfeng Orange Co., Ltd., which is operating a 782,765-square-foot manufacturing base in Jiangxi Province's Nanfeng County. The Company owns a 98,505-square-foot Express Export Zone in Nanfeng, with air-adjusted and fresh-keeping warehouse, and advanced photoelectric fruit sorter. In Beijing, the Company possesses a 26,700-square-foot distribution center and nineteen franchise retail stores across the city. With the support from the international capital markets, the company is strengthening the branded franchise fruit retail stores and digging deeply in this niche. From the very beginning of its business, the Company has been awarded with "National Leading Enterprise of Agriculture Industrialization", "China's Most Influential Fruit Brand", "Leading Fruit Enterprise", and "Top Ten Most Trustable Enterprise" among other rewards. For more information, please visit the Company's corporate website: www.taina.cn.

Forward Looking Statement

This press release contains "forward-looking information", which may include, but is not limited to, statements with respect to the future financial or operating performance of the Company and its projects. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or believes" or variations (including negative variations) of such words and phrases, or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of China Fruits Corporation to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Forward-looking statements contained herein are made as of the date of this press release and China Fruits Corporation disclaim, other than as required by law, any obligation to update any forward-looking statements whether as a result of new information, results, future events, circumstances, or if management's estimates or opinions should change, or otherwise. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, the reader is cautioned not to place undue reliance on forward-looking statements

For More Information

Investor Relations
Dragon Gate Investment Partners
Email: [email protected]
Tel: +1 (646) 801-2803
Website: http://www.dgipl.com

 

 

 

China Fruits Corporation

Consolidated Balance Sheets

As of June 30, 2014 and December 31, 2013

Unaudited

(Stated in US Dollars)

 






(Audited)

ASSETS



6/30/2014


12/31/2013


Current Assets








Cash & cash equivalents


$

200,576

$

40,217



Accounts receivable, Net



1,768,795


4,075,765



Other receivable, Net



763,911


141,363



Advance to supplies



3,364,911


2,162,844



Inventories



78,790


1,566,556



Prepaid expense



154,947


67,862



Refundable tax



94,065


266,719



Related party receivable



162,464


-




TOTAL CURRENT ASSETS



6,588,459


8,321,326











Noncurrent Assets







Investment



162,464




Property, plant & equipment, bet



3,236,423


3,370,148


Construction in progress



1,137


1,146


Intangible assets, net



318,354


331,697


Other long-term asset and deposits



24,370


24,548


Long term amortization



2,779


4,479


    TOTAL NON-CURRENT ASSETS



3,745,527


3,732,018









TOTAL ASSETS


$

10,333,986

$

12,053,344

























CURRENT LIABILITIES







  Accounts payable and Accrued Expenses


$

913,825

$

4,238,843



Short-term loans



2,713,153


2,479,379



Customer Deposit



1,530,277


493,164



Taxes Payable



312,552


261,286



Other Payables



92,829


657,952



Due to Related Parties



1,446,251


1,074,031



Accrued liabilities and Payroll Tax Liabilities



428,007


354,489



  TOTAL CURRENT LIABILITIES



7,436,894


9,559,144









TOTAL LIABILITIES


$

7,436,894

$

9,559,144







 

STOCKHOLDERS' EQUITY












Common stock, par value $.001, 100,000,000 shares authorized,  49,951,223 shares issued

and outstanding as of June 30, 2014 and December 31, 2013, respectively


$

49,941

$

49,951

Preferred stock, 200,000,000 shares authorized, designated as Series A and Series B.

Series A: par value $.001; 2,000,000 shares authorized, 13,150 shares issued and outstanding as of June 30, 2014 and December 31, 2013, respectively



13


13

Series B; par value $0.001, voting; 50,000,000 shares authorized, 12,100,000 shares issued and outstanding as of June 30, 2014 and December 31, 2013, respectively



12,100


12,100

Additional paid in capital



3,789,864


3,789,864

Statutory reserve



170,950


170,950

Accumulated deficits



(1,572,728)


(2,003,096)

Accumulated other comprehensive income



446,942


474,419

TOTAL STOCKHOLDERS' EQUITY



2,897,092


2,494,201







TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY


$

10,333,986

$

12,053,344












 

China Fruits Corporation

Consolidated Statements of Income

For the three-month and six-month periods ended June 30, 2014 and 2013

Unaudited

(Stated in US Dollars)

 



Three Months Ended


Six Months Ended

REVENUES:


6/30/2014


6/30/2013


6/30/2014


6/30/2013

Sales

$

2,535,831

$

854,553

$

10,551,692

$

1,593,775

Cost of goods sold


(1,780,278)


695,213


(8,879,022)


1,319,288

   GROSS PROFIT


755,553


159,340


1,672,670


274,487










OPERATING EXPENSES:









Selling expenses


96,438


100,701


692,908


262,348

General and administrative expenses


228,866


208,851


556,576


453,535

TOTAL OPERATING EXPENSES


325,304


309,552


1,249,484


715,883










INCOME (LOSS) FROM CONTINUING OPERATIONS


430,249


(150,212)


423,186


(441,396)










OTHER INCOME (EXPENSE):









Other income


14,224


(220)


28,532


5,606

Other expense


-


-


-


-

Interest income


-


-


59


-

Interest expense


(63,187)


(27,496)


(114,296)


(59,322)

Government grants


32,777


197,478


271,909


252,916

TOTAL OTHER INCOME (LOSS) & EXPENSE


(16,186)


169,762


186,204


199,200










INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES


414,063


19,550


609,390


(242,196)










Income tax expense


98,407


-


179,022


-

NET INCOME (LOSS)

$

315,656

$

19,550

$

430,368

$

(242,196)










Other compressive income









-Foreign currency translation gain (Loss)


3,717


34,945


(27,477)


41,194










COMPREHENSIVE INCOME (LOSS)


319,373


(54,495)


402,891


(201,002)

(Loss) per common share:









Basic and fully diluted

$

0.01


  ** 

$

0.01


  **










Weighted average number of common shares outstanding – Basic and fully diluted


49,951,223


49,951,223


49,951,223


49,951,223

 

China Fruits Corporation

Consolidated Statements of Stockholders' Equity

As of June 30, 2014 and December 31, 2013

Unaudited

(Stated in US Dollars)

 



Common Stock (Shares)

Series "A" Preferred (Shares)

Series "B" Preferred (Shares)

Common Stock (Amount)

Series
"A" Preferred (Amount)

Series
"B" Preferred (Amount)

Additional paid in capital

Statutory Reserve

Accumulated other Comprehensive Income (Loss)

Accumulated Deficit

Total

Balance at January 1, 2013


49,951,223

13,150

12,100,000

$ 49,951

$ 13

$ 12,100

$ 3,789,864

$ 129,636

$ 389,607

$ (2,128,404)

$ 2,242,693

Net income


-

-

-

-

-

-

-

-

-

166,622

166,622

Appropriations to statutory reserves


-

-

-

-

-

-

-

41,314

-

(41,314)

-

Foreign currency translation adjustment


-

-

-

-

-

-

-

-

84,886

-

84,886

Balance at December 31, 2013


49,951,223

13,150

12,100,000

$ 49,951

$ 13

$ 12,100

$ 3,789,864

$ 170,950

$ 474,419

$ (2,003,096)

$ 2,494,201



























Balance at January 1, 2014


49,951,223

13,150

12,100,000

$ 49,951

$ 13

$ 12,100

$ 3,789,864

$ 170,950

$ 474,419

$ (2,003,096)

$ 2,494,201

Net income











430,368

430,368

Foreign currency translation adjustment










(27,477)


(27,477)

Balance at June 30, 2014


49,951,223

13,150

12,100,000

$ 49,951

$ 13

$ 12,100

$ 3,789,864

$ 170,950

$ 446,942

$ (1,572,728)

$ 2,897,092

 

 


 

 

China Fruits Corporation

Consolidated Statements of Cash Flows

For the six-month period ended June 30, 2014 and 2013

Unaudited

(Stated in US Dollars)

 


For the six-month period ended

Cash Flows from Operating Activities


6/30/2014


6/30/2013

 Net Income/(loss)

$

430,368

$

(242,196)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:






Depreciation and amortization


128,703


133,487

(Increase) decrease in operating assets:






Accounts receivable


2,307,270


323,103


Inventories


1,487,766


(77,261)


Prepaid expenses and other current assets


(1,738,868)


857,894


Related party receivable


(162,464)


-

 Increase (decrease) in operating activities:






Accounts payable


(3,325,018)


309,669


Other payables and accrued liabilities


(491,605)


(27,047)


Tax payable


51,266


813


Customer deposit


1,037,113


-

Net cash (used in) provided by operating activities

$

(275,469)

$

1,278,462







Cash Flows from Investing Activities






Purchase of property and equipment

$

(14,916)

$

(22,760)


Investment


(162,464)



Net cash provided (used in) by investing activities

$

(177,380)

$

(22,760)







Cash Flows from Financing Activities






Proceeds from short-term loans

$

251,820

$

-


Advance from (to) a third party


3,653,821


(355,514)


Repayment of advance from (to) a third party


(3,366,259)


-


Proceeds from /(Payments on) Notes Payable




(945,345)


Due to stockholders


84,658


86,164


Net cash provided by (used in) Financing Activities

$

624,040

$

(1,214,695)







Foreign currency translation adjustment


(10,832)


1,056







Net increase/(decrease) in cash & cash equivalents for the periods


160,359


42,063






Cash & cash equivalents:





   Beginning of period

$

40,217

$

47,399

   End of period

$

200,576

$

89,462







Supplementary disclosures of cash flows information:






Interest received

$

793

$

-


Interest paid

$

87,797

$

58,261


Income taxes paid

$

13,030

$

-

 

SOURCE China Fruits Corporation

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