BEIJING, November 18, 2014 /PRNewswire/ -- 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 quarter ended September 30, 2014.
Financial Highlights
"495% is a very significant sales growth rate for the nine months ended September 30, 2014, compared to the same period in 2013. It indicates that our China fruits corporation is in a quick development phase with steady and sturdy paces. Meanwhile, the number of our franchise retail store is expanding to 35," 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."
Third Quarter 2014 Results
China Fruits Corporation reported that gross revenue were $2,862,463 and $13,414,155 for the three and nine months ended September 30, 2014, respectively, increased of 416%, and 495% from the corresponding period of 2013, primarily to company's effort in developing overseas markets and in increasing franchise stores.
During the nine months ended September 30, 2014, the revenues from Thailand were approximately $5,650,000, or 42% of total revenues, which were $0 during the same period of 2013, and the revenues from Dubai and other markets were approximately $1,100,000, or 8% of total revenues, which were $0 during the same period of 2013.
Revenues from franchise retail stores increased to approximately $4,730,000, or 35% of total revenues for the nine months ended September 30, 2014. Such increased was direct result from the increase in our franchise stores, which totaled 35 stores as September 30, 2014, compared to 6 stores in the same period in 2013.
The Company had $2,191,743 in cost of goods sold for the third quarter of 2014, an increase of 396% from $441,996 for the corresponding period in 2013.
Gross margin was 23.43% for the third quarter of 2014, compared to 20.36% 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 expense for the three nine months ended September 30, 2014 were $407,741, respectively, increased by 18%, compared to $344,209 for the same period in 2013. The increasing in operating expense was due primarily to the increase in selling expense.
Operating income for the third quarter of 2014 was $262,979, compared to operating loss of $231,191 in the same period of 2013.
Net income attributable to China's Fruit shareholders was $245, 211, a 397% increase from the corresponding period of 2013. Fully diluted earnings per share were 0.01, compared to net loss of $0.01 per share in the same period in 2013. The Company also received a grant from the government in amount of $2,989, which was to encourage the Company's contribution in modern agriculture.
As of September, 2014, China Fruits had cash equivalents of $15,594, compared to $40,217 as of December 31, 2013. Cash flow used in operating activities was $1,791 for the nine months ended of 2014. Cash flow used in investing activities was $457,975. Net cash provided by financing activities was $441,734.
Financial Guidance
The company preliminary 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 market 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 September 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 an approximately 26,700-square-foot distribution center and thirty-five 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 its 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 http://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: taina@dgipl.com
Tel: +1 (646) 801 - 2803
Website: http://www.dgipl.com
China Fruits Corporation Consolidated Balance Sheets As of September 30, 2014 and December 31, 2013 Unaudited (Stated in US Dollars)
|
||||||||||||
(Audited) |
||||||||||||
9/30/2014 |
12/31/2013 |
|||||||||||
ASSETS |
||||||||||||
Current Assets |
||||||||||||
Cash & cash equivalents |
$ |
15,594 |
$ |
40,217 |
||||||||
Accounts receivable, Net |
1,422,579 |
4,075,765 |
||||||||||
Other receivable, Net |
936,707 |
141,363 |
||||||||||
Advance to supplies |
3,492,018 |
2,162,844 |
||||||||||
Inventories |
75,357 |
1,566,556 |
||||||||||
Prepaid expense |
176,220 |
67,862 |
||||||||||
Refundable tax |
95,177 |
266,719 |
||||||||||
Related party receivable |
313,648 |
———— |
||||||||||
TOTAL CURRENT ASSETS |
6,527,300 |
8,321,326 |
||||||||||
Noncurrent Assets |
||||||||||||
Investment |
162,512 |
|||||||||||
Property, plant & equipment, net |
3,309,009 |
3,370,148 |
||||||||||
Construction in progress |
259,986 |
1,146 |
||||||||||
Intangible assets, net |
310,679 |
331,697 |
||||||||||
Other long-term asset and deposits |
55,192 |
24,548 |
||||||||||
Long term amortization |
1,945 |
4,479 |
||||||||||
TOTAL NON-CURRENT ASSETS |
4,099,323 |
3,732,018 |
||||||||||
TOTAL ASSETS |
$ |
10,626,623 |
$ |
12,053,344 |
||||||||
LIABILITIES & STOCKHOLDERS' EQUITY |
||||||||||||
CURRENT LIABILITIES |
||||||||||||
Accounts payable and accrued expenses |
$ |
910,061 |
$ |
4,238,843 |
||||||||
Short-term loans |
1,706,374 |
2,479,379 |
||||||||||
Customer deposit |
766,281 |
493,164 |
||||||||||
Taxes payable |
320,659 |
261,286 |
||||||||||
Other payables |
1,062,732 |
657,952 |
||||||||||
Due to related parties |
1,458,886 |
1,074,031 |
||||||||||
Accrued liabilities and payroll tax liabilities |
445,446 |
354,489 |
||||||||||
Long term debt, current portion |
377,027 |
———— |
||||||||||
TOTAL CURRENT LIABILITIES |
7,047,466 |
9,559,144 |
||||||||||
LONG TERM LIABILITIES |
||||||||||||
Long term bank loan |
435,532 |
———— |
||||||||||
TOTAL LONG TERM LIABILITIES |
435,532 |
———— |
||||||||||
TOTAL LIABILITIES |
$ |
7,482,998 |
$ |
9,559,144 |
||||||||
STOCKHOLDERS' EQUITY |
||||||||||||
Common stock, par value $.001, 100,000,000 shares authorized, 49,951,223 shares issued and outstanding as of September 30, 2014 and December 31, 2013, respectively |
$ |
49,951 |
$ |
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 September 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 September 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 |
(1,327,517) |
(2,003,096) |
||||||||||
Accumulated other comprehensive income |
448,264 |
474,419 |
||||||||||
TOTAL STOCKHOLDERS' EQUITY |
3,143,625 |
2,494,201 |
||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
$ |
10,626,623 |
$ |
12,053,344 |
China Fruits Corporation Consolidated Statements of Income For the three-month and nine-month periods ended September 30, 2014 and 2013 Unaudited (Stated in US Dollars)
|
||||||||||||||||||||||
Three Months Ended |
Nine Months Ended |
|||||||||||||||||||||
REVENUES: |
9/30/2014 |
9/30/2013 |
9/30/2014 |
9/30/2013 |
||||||||||||||||||
Sales |
$ |
2,862,463 |
$ |
555,014 |
$ |
13,414,155 |
$2,255,669 |
|||||||||||||||
Cost of goods sold |
(2,191,743) |
(441,996) |
(11,070,765) |
(1,812,733) |
||||||||||||||||||
GROSS PROFIT |
670,720 |
113,018 |
2,343,390 |
442,936 |
||||||||||||||||||
OPERATING EXPENSES: |
||||||||||||||||||||||
Selling expenses |
96,946 |
100,132 |
789,854 |
371,299 |
||||||||||||||||||
General and administrative expenses |
310,795 |
244,077 |
867,371 |
675,429 |
||||||||||||||||||
TOTAL OPERATING EXPENSES |
407,741 |
344,209 |
1,657,225 |
1,046,728 |
||||||||||||||||||
INCOME (LOSS) FROM CONTINUING OPERATIONS |
262,979 |
(231,191) |
686,165 |
(603,792) |
||||||||||||||||||
OTHER INCOME (EXPENSE): |
||||||||||||||||||||||
Other income |
14,193 |
———— |
42,725 |
11,321 |
||||||||||||||||||
Other expense |
(515) |
(43) |
(515) |
|||||||||||||||||||
Interest income |
81 |
———— |
140 |
|||||||||||||||||||
Interest expense |
(51,570) |
(35,796) |
(165,866) |
(88,486) |
||||||||||||||||||
Government grants |
2,989 |
316,370 |
274,898 |
376,778 |
||||||||||||||||||
TOTAL OTHER INCOME (LOSS) & EXPENSE |
(34,822) |
280,531 |
151,382 |
299,613 |
||||||||||||||||||
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES |
228,157 |
49,340 |
837,547 |
(304,179) |
||||||||||||||||||
Income tax expense |
(17,054) |
———— |
(161,968) |
———— |
||||||||||||||||||
NET INCOME (LOSS) |
$ |
245,211 |
$ |
49,340 |
$ |
675,579 |
$(304,179) |
|||||||||||||||
Other compressive income |
||||||||||||||||||||||
-Foreign currency translation gain (Loss) |
1,322 |
(6,513) |
(26,155) |
(47,985) |
||||||||||||||||||
COMPREHENSIVE INCOME (LOSS) |
246,533 |
42,827 |
649,424 |
(352,164) |
||||||||||||||||||
Income/(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 |
||||||||||||||||||
** Less than $0.01 |
China Fruits Corporation Consolidated Statements of Cash Flows For the three-month and nine-month periods ended September 30, 2014 and 2013 Unaudited (Stated in US Dollars)
|
||||||||
For the nine-month period ended |
||||||||
9/30/2014 |
9/30/2013 |
|||||||
Cash Flows from Operating Activities |
||||||||
Net Income/(loss) |
$ |
675,579 |
$ |
(304,179) |
||||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |
||||||||
Depreciation and amortization |
87,720 |
198,358 |
||||||
Bad debt expense |
———— |
11,048 |
||||||
(Increase)/decrease in operating assets: |
||||||||
Accounts receivable |
2,653,474 |
324,198 |
||||||
Inventories |
1,491,199 |
(27,200) |
||||||
Prepaid expenses and other current assets |
(2,091,978) |
(126,380) |
||||||
Related party receivable |
(313,648) |
———— |
||||||
Increase/(decrease) in operating activities: |
||||||||
Accounts payable |
(3,328,782) |
383,685 |
||||||
Other payables and accrued liabilities |
495,737 |
(71,001) |
||||||
Tax payable |
59,373 |
4,936 |
||||||
Customer deposit |
273,117 |
———— |
||||||
Net cash (used in) provided by operating activities |
$ |
1,791 |
$ |
393,465 |
||||
Cash Flows from Investing Activities |
||||||||
(Increase)/decrease in Construction in Progress |
$ |
(258,848) |
$ |
(811) |
||||
Purchase of property and equipment |
(36,615) |
(54,137) |
||||||
Investment |
(162,512) |
———— |
||||||
Net cash provided (used in) by investing activities |
$ |
(457,975) |
$ |
(54,948) |
||||
Cash Flows from Financing Activities |
||||||||
Proceeds from short-term loans |
$ |
628,920 |
$ |
———— |
||||
Repayments of short-term loans |
(1,007,573) |
———— |
||||||
Advance from (to) a third party |
5,410,017 |
(462,601) |
||||||
Repayment of advance from (to) a third party |
(5,122,371) |
———— |
||||||
Proceeds from notes payable |
———— |
972,873 |
||||||
Repayments of notes payable |
———— |
(948,551) |
||||||
Proceeds from notes payable - related party |
———— |
8,107 |
||||||
Due to stockholders |
97,209 |
89,664 |
||||||
Proceeds from long-term loan |
435,532 |
———— |
||||||
Net cash provided by (used in) Financing Activities |
$ |
441,734 |
$ |
(340,508) |
||||
Foreign currency translation adjustment |
(10,173) |
817 |
||||||
Net increase/(decrease) in cash & cash equivalents for the periods |
(24,623) |
(1,174) |
||||||
Cash & cash equivalents: |
||||||||
Beginning of period |
$ |
40,217 |
$ |
47,399 |
||||
End of period |
$ |
15,594 |
$ |
46,225 |
||||
Supplementary disclosures of cash flows information: |
||||||||
Interest received |
$ |
956 |
$ |
———— |
||||
Interest paid |
$ |
122,125 |
$ |
86,942 |
||||
Income taxes paid |
$ |
28,309 |
$ |
6,873 |