BEIJING, May 21, 2015 /PRNewswire/ -- China Fruits Corporation CHFR ("China Fruits" or "the Company"), a distributor and producer of fresh tangerine and other fresh fruits in the People's Republic of China, released its financial results for the quarter ended March 31, 2015.
First Quarter 2015 Highlights
- Revenues from franchise stores were approximately $4.0 million, an increase of 78% compared to the same period in 2014.
- Revenues from e-commerce were approximately $1.0 million, which were zero during the same period in 2014.
"After the expansion in our network of franchise retail stores, we switched our focus from the overseas markets to the domestic market. In 2015, we will focus on developing our markets in Nanchang and Hangzhou to expand our franchise retail stores. The 2015 target number of retail stores throughout China is expected to grow to 135 in 2015" said Mr. Quanlong Chen, Chairman and Chief Executive Officer of China Fruits Corporation, "We believe we will be able to expand our market share during 2015 through an effective and efficient franchise retail network. We were pleased to see immediate profitability in our e-commerce operations during 2014 and expect that to continue to strengthen. Our long term goal is to combine e-commerce with a network of retail stores network to increase the Company's brand recognition in fruit e-commerce business."
First Quarter 2015 Results
- Revenue
The Company reported that total gross revenue were $5,850,335 for the three months ended March 31, 2015, compared to gross revenues of $8,015,860 for the same period ended March 31, 2014.The decrease in revenues during the first quarter of 2015 was due primarily to the decrease in revenues from overseas markets.
During the first quarter of 2015, the revenues from franchised stores were approximately $4.0 million, an increase of 78% compared to the same period in 2014. The Company also had revenues from e-commerce in amount of approximately $1.0 million, which were zero during the same period in 2014. However, the revenues increased in domestic market and e-commerce failed to completely offset the revenues decreased in oversea markets, resulting in the decrease by approximately 27% in total.
- Cost of Goods Sold
The Company had $5,293,100 in cost of goods sold, or approximately 90% of revenues, during the three months ended March 31, 2015. Comparatively, the Company had $7,098,744 in cost of goods sold, or approximately 89% of revenues, during the three months ended March 31, 2014. The Company expects to reduce the cost of goods sold through collaboration with more non-related suppliers, which could also help the Company to reduce the risk of concentration.
- Operating Expense
Operating expenses for the three months ended March 31, 2015 were $1,385,855, an increase of $461,675, or 50%, compared to $924,180 for the same period in 2014. The increase in operating expenses during the first quarter of 2015 was due primarily to the increase in general and administrative expenses, which were $742,910 in the first quarter of 2015, compared to $327,710 in the same period ended March 31, 2014.
- Net Income
The Company had a net loss of $802,846 for the three months ended March 31, 2015, compared to net income of $114,711 for the three months ended March 31, 2014.The net loss during the first quarter of 2015 was due to insufficient gross profit to cover a number of relatively fixed operating expenses.
- Cash and Cash Equivalents
As of March 31, 2015, China Fruits had cash and cash equivalents of $37,080, compared to $1,586,253 as of March 31, 2014. Cash flow used in operating activities was $355,911 for the three months ended of 2015. Cash flow used in investing activities was $3,511. Net cash provided by financing activities was $1,147,692.
Financial Guidance
China Fruits continues to develop e-commerce business, as the Company believes the goal is to combine its e-commerce operations with a growing retail stores network to introduce an "online to offline" business model for their clients. Such integration will increase the Company's brand recognition and market share in the fruit e-commerce business.
The Company also expects the total number of franchise stores to be increase to around 135 by the end of 2015. 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 a new subsidiary called US-China Fruits Company Limited ("US-China Fruits") under the laws of the British Virgin Islands, of which China Fruits has a 99.99% ownership. The articles of incorporation of US-China Fruits was filed on June 16, 2014 but the Company had no activities as of March 31, 2015. The Company believes the new subsidiary will increase operating efficiencies when they develop any overseas markets in the future.
About China Fruits
China Fruits Corporation CHFR is a U.S.-listed holding company, engaged in manufacturing, trading and distributing fresh tangerine and other fresh fruits in the People's Republic of China. The Company wholly owns three subsidiaries: Taina International Fruits (Beijing) Co., Ltd., which builds and operates franchise retail stores, Jiangxi Taina Nanfeng Orange Co., Ltd., which engages in the fresh fruits manufacturing, and US-China Fruits Company Limited, which plans to do the business of import and export. The Company owns a 782,765-square-foot manufacturing base, with air-adjusted and fresh-keeping warehouse, and advanced photoelectric fruit sorter. The Company owns 64 franchise retail stores, one distribution center and one express export zone in Nanfeng. 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", "China's Fast-Growing Company", 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. The reader in encouraged to read any and all press releases in conjunction with filing made with the Securities and Exchange Commission which are publicly available at www.sec.gov.
For More Information
Investor Relations
Dragon Gate Investment Partners LLC
Email: taina@dgipl.com
Tel: +1(646)-801-2803
Website: http://www.taina.cn
China Fruits Corporation | |||||
Consolidated Balance Sheets | |||||
As of March 31, 2015 and December 31, 2014 | |||||
Unaudited | |||||
(Stated in US Dollars) | |||||
3/31/2015 |
Audited 12/31/2014 | ||||
ASSETS |
|||||
Current Assets |
|||||
Cash & Cash Equivalents |
$ |
37,080 |
$ |
801,356 | |
Accounts Receivable, Net |
34,757,522 |
41,433,191 | |||
Other Receivable, Net |
757,612 |
585,520 | |||
Advance to Supplies |
4,112,748 |
5,857,017 | |||
Inventories |
3,134,891 |
1,859,173 | |||
Prepaid Expense |
142,739 |
89,558 | |||
Refundable Tax |
2,347,120 |
1,779,485 | |||
Due From The Related Party |
— |
1,114,279 | |||
TOTAL CURRENT ASSETS |
45,289,712 |
53,519,579 | |||
Noncurrent Assets |
|||||
Investment |
163,690 |
162,906 | |||
Property, Plant & Equipment, Net |
3,668,320 |
3,366,085 | |||
Construction in Progress |
3,044 |
356,793 | |||
Intangible Assets, Net |
301,063 |
307,614 | |||
Other Long-term Asset Deposit |
55,592 |
55,326 | |||
Long-term amortization |
280 |
1,115 | |||
TOTAL NON-CURRENT ASSETS |
4,191,989 |
4,249,839 | |||
TOTAL ASSETS |
$ |
49,481,701 |
$ |
57,769,418 | |
LIABILITIES & STOCKHOLDERS' EQUITY |
|||||
CURRENT LIABILITIES |
|||||
Accounts payable and accrued expenses |
$ |
33,854,910 |
$ |
40,583,792 | |
Short-term loans |
2,807,287 |
4,936,059 | |||
Customer deposit |
757,457 |
767,396 | |||
Taxes payable |
1,783,383 |
1,360,123 | |||
Other payables |
1,647,621 |
841,156 | |||
Due to related parties |
2,178,390 |
1,941,527 | |||
Accrued liabilities and payroll tax liabilities |
362,837 |
1,262,399 | |||
Long-term bank loan, current portion |
379,761 |
377,942 | |||
TOTAL CURRENT LIABILITIES |
43,771,646 |
52,070,394 | |||
LONG-TERM LIABILITIES |
|||||
Long term bank loan |
756,249 |
342,103 | |||
TOTAL LONG TERM LIABILITIES |
756,249 |
342,103 | |||
TOTAL LIABILITIES |
$ |
44,527,895 |
$ |
52,412,497 | |
Audited | |||||
3/31/2015 |
12/31/2014 | ||||
STOCKHOLDERS' EQUITY |
|||||
Common stock, par value $.001, 100,000,000 shares authorized, 2,089,016 and 1,998,049 shares issued |
$ |
2,089 |
$ |
1,998 | |
and outstanding as of March 31, 2015 and December 31, 2014, respectively |
|||||
Preferred stock, 200,000,000 shares authorized, designated as Series A and Series B. |
13 |
13 | |||
Series A: par value $.001; 2,000,000 shares authorized, 13,150 shares issued and outstanding as of March 31, 2015 and December 31, 2014, respectively |
|||||
Series B; par value $0.001, voting; 50,000,000 shares authorized, 12,100,000 shares issued and outstanding as of March 31, 2015 and December 31, 2014, respectively |
12,100 |
12,100 | |||
Additional paid in capital |
4,208,272 |
3,837,817 | |||
Statutory reserve |
170,950 |
170,950 | |||
Retained earnings |
71,078 |
873,924 | |||
Accumulated other comprehensive income |
489,304 |
460,119 | |||
TOTAL STOCKHOLDERS' EQUITY |
4,953,806 |
5,356,921 | |||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
$ |
49,481,701 |
$ |
57,769,418 | |
China Fruits Corporation | |||||
Consolidated Statements of Income | |||||
For the three months ended March 31, 2015 and 2014 | |||||
Unaudited | |||||
(Stated in US Dollars) | |||||
Three Months Ended | |||||
REVENUES: |
3/31/2015 |
3/31/2014 | |||
Sales |
$ |
5,850,335 |
$ |
8,015,860 | |
Cost of goods sold |
(5,293,100) |
(7,098,744) | |||
GROSS PROFIT |
557,235 |
917,116 | |||
OPERATING EXPENSES: |
|||||
Selling expenses |
642,945 |
596,470 | |||
General and administrative expenses |
742,910 |
327,710 | |||
TOTAL OPERATING EXPENSES |
1,385,855 |
924,180 | |||
INCOME (LOSS) FROM CONTINUING OPERATIONS |
(828,620) |
(7,064) | |||
OTHER INCOME (EXPENSE): |
|||||
Other income |
— |
14,308 | |||
Other expense |
(1,710) |
— | |||
Interest income |
62 |
60 | |||
Interest expense |
(85,239) |
(51,109) | |||
Government grants |
155,988 |
239,132 | |||
TOTAL OTHER INCOME (LOSS) & EXPENSE |
69,101 |
202,391 | |||
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES |
(759,519) |
195,327 | |||
Income tax expense |
43,327 |
80,615 | |||
NET INCOME (LOSS) |
(802,846) |
$ |
114,712 | ||
Other compressive income |
|||||
-Foreign currency translation gain (Loss) |
29,185 |
(31,194) | |||
COMPREHENSIVE INCOME / (LOSS) |
(773,661) |
83,518 | |||
Income/(Loss) per common share: |
|||||
-Basic |
(0.39) |
0.06 | |||
-Fully diluted |
(0.15) |
0.06 | |||
Weighted average number of common shares outstanding: |
|||||
-Basic |
2,065,564 |
1,998,049 | |||
-Fully diluted |
5,439,447 |
1,998,049 | |||
China Fruits Corporation | |||||
Consolidated Statements of Cash Flows | |||||
For the three months ended March 31, 2015 and 2014 | |||||
Unaudited | |||||
(Stated in US Dollars) | |||||
For the three months ended | |||||
3/31/2015 |
3/31/2014 | ||||
Net Income/(loss) |
$ |
(802,846) |
$ |
114,711 | |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |
|||||
Depreciation and amortization |
87,925 |
59,425 | |||
Bad debt expense |
395,005 |
||||
(Increase)/decrease in operating assets: |
|||||
Accounts receivable |
6,283,260 |
(884,262 | |||
Inventories |
(1,275,717) |
1,035,267 | |||
Other receivable |
(172,092) |
— | |||
Prepaid expenses and other current assets |
1,123,187 |
326,376 | |||
Related party receivable |
1,114,279 |
— | |||
Increase/(decrease) in operating activities: |
|||||
Accounts payable |
(6,728,883) |
(2,689,030 | |||
Other payables and accrued liabilities |
(81,527) |
(509,719 | |||
Tax payable |
423,259 |
164,677 | |||
Customer deposit |
(9,939) |
— | |||
Net cash (used in) provided by operating activities |
$ |
355,911 |
$ |
(2,382,555 | |
Cash Flows from Investing Activities |
|||||
(Increase)/decrease in Construction in Progress |
$ |
355,466 |
$ |
— | |
Purchase of property and equipment |
(358,977) |
(10,225 | |||
Net cash provided (used in) by investing activities |
$ |
(3,511) |
$ |
(10,225 | |
Cash Flows from Financing Activities |
|||||
Repayments of short-term loans |
$ |
(2,152,527) |
|||
Advanced from related party |
572,916 |
3,699,006 | |||
Repayments of advanced from related party |
|||||
Proceeds from notes payable – related party |
— |
251,546 | |||
Due to stockholders |
19,420 |
— | |||
Proceeds from long-term loan |
412,499 |
— | |||
Net cash provided by (used in) Financing Activities |
$ |
(1,147,692) |
$ |
3,950,552 | |
Foreign currency translation adjustment |
31,016 |
(11,736 | |||
Net increase/(decrease) in cash & cash equivalents for the periods |
(764,276) |
1,546,036 | |||
Cash & cash equivalents: |
|||||
Beginning of period |
$ |
801,356 |
$ |
40,217 | |
End of period |
$ |
37,080 |
$ |
1,586,253 | |
Supplementary disclosures of cash flows information: |
|||||
Interest received |
$ |
149 |
$ |
— | |
Interest paid |
$ |
71,147 |
$ |
41,091 | |
Income taxes paid |
$ |
259,829 |
$ |
164 | |
Supplementary disclosure of non-cash financing activity: |
|||||
Conversion of debt and accrued interests to equity |
$ |
358,978 |
$ |
— |
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/china-fruits-corporation-reports-fy2015-first-quarter-results-300087518.html
SOURCE China Fruits Corporation
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