XI'AN, China, May 16 Entech-Q1-Results
XI'AN, China, May 16 /Xinhua-PRNewswire-FirstCall/ -- Entech Environmental
Technologies Inc. (OTC Bulletin Board: EEVT) (''Entech'' or ''the Company''), a
leading processor and manufacturer of concentrated high acidic apple juice,
kiwifruit juice and pear juice through its operating company Shaanxi Tianren
Organic Food Co., Ltd (''Tianren''), today announced its financial results for
the first quarter of 2008.
First Quarter 2008 Highlights
-- Sales increased 69.0% year-over-year to $8.9 million
-- Gross profit was $1.9 million, or 21.0% of sales
-- Operating income was $1.0 million, or 11.8% of sales
-- Net income was $1.1 million, or 0.04 per basic and fully diluted share
-- Completed the share exchange transaction with Pacific Industry Holding
Group Co., Ltd. and became a publicly traded company in February 2008
-- Raised $3.4 million gross proceeds in a private placement financing in
February 2008
''In the first quarter of 2008, our sales increased significantly from the
same period in 2007 as a result of growing demand for our products. Through
the share exchange transaction, we have successfully become quoted on the OTC
Bulletin Board. Our board of directors and the holders of a majority of our
voting stock have approved a change in our Company's name to 'Sky People Fruit
Juice Inc.' as well as a 1-for-328.72898 reverse stock split of our
outstanding common stock. We have disseminated an information statement
regarding these matters and both are expected to become effective during the
last week of May 2008," said Yongke Xue, Chief Executive Officer of Tianren.
Mr. Xue further stated ''The sharp increase of raw material prices and the
general and administrative expenses during the past quarter resulted in the
lower gross profit and net income compared with the same period in 2007. We
are still in the early stages as public company, and are still expanding our
business. We believe that the increase in our revenue will compensate for the
increase in our operating expenses in the long run.''
First Quarter 2008 Results
For the quarter ended March 31, 2008, total revenue was $8.9 million, a
69.0% increase from $5.2 million posted during the same quarter in 2007. The
increase was due to the increased sales volume of the Company's fruit related
products, especially its pear and apple products. In addition, the Company
consolidated Huludao Wonder's operations into it financial results beginning
in June 2007.
Gross profit decreased 17.3% to $1.9 million in the first quarter of 2008,
compared to $2.2 million in the prior year period. Gross margin was 21.0% as
compared to 42.9% during the same period in 2007. In the three months ended
March 31, 2008, the general price of raw kiwi increased due to a natural
disaster happened in 2007, while the price of kiwi related products remained
constant. The gross margin in apple-related products was lower due to a
decrease in the average selling price of apple juice in the market during the
quarter. These combined factors contributed to the increase in cost of sales
and the decrease in gross profit for the three months ended on March 31, 2008
as compared to the corresponding period in 2007.
Selling, general and administrative expenses in the first quarter of 2008
were $815,536, an increase of 194.6% from $276,848 in the first quarter of
2007. Selling expenses increased 44.0% to $241,345 during the quarter ended
March 31, 2008. This was mainly due to an increase in freight and
transportation as a result of the increase in sales. General and
administrative expenses increased 425.8% year-over-year to $574,191. The
increase in general and administrative expenses was mainly associated with
higher depreciation expenses and expenses associated with being a public
company.
Operating income decreased 47.0% to $1.0 million, or 11.8% of revenue,
from $2.0 million in the first quarter of 2007, or 37.6% of revenue, in the
first quarter of 2008.
Net income decreased to $1.1 million in the first quarter of 2008, or
$0.04 per basic and fully diluted share, as compared to net income of $1.5
million during the same period in 2007. Fully diluted shares outstanding
increased from 22,006,173 shares in the first quarter of 2007 to 27,528,146
shares in the first quarter of 2008 as a result of the share purchase
agreement the Company entered into in February 2008.
Financial Condition
As of March 31, 2008, cash totaled $7.4 million, an increase from the $4.1
million of cash on hand on December 31, 2007. The increase of cash was mainly
due to receipt of $3.2 million in net proceeds from private placement
transactions in February 2008. As of March 31, 2008, the Company had working
capital of $10.0 million with total current assets of $23.4 million and total
current liabilities of $13.4 million. Accounts receivable increased by $2.9
million from the balance at December 31, 2007, due primarily to an increase in
sales in the first quarter of fiscal 2008. Stockholders' equity totaled $31.9
million as of March 31, 2008, compared to $26.2 million at the end of 2007.
Net cash provided by operations was $0.8 million for the three months
ended March 31, 2008, compared with net cash provided by operations of $1.7
million for the same period in 2007.
Recent Events
-- Appointed Spring Liu as Chief Financial Officer of the Company
-- Appointed Mr. Norman Ko, Mr. Robert B. Fields, and Mr. Wang Guolin as
the Company's independent directors; established an Audit Committee and
Compensation Committee of the Board of Directors
Business Outlook
''We expect our market to continue expanding in 2008. We will actively
seek to increase our sales while enhancing operating margin through more
efficient internal management. The addition of Ms. Spring Liu as our Chief
Financial Officer and the appointment of three new independent directors will
allow us to streamline our financial management and improve corporate
governance and oversight,'' said Mr. Xue. ''We will also pursue potential
acquisition targets to expand our business to take advantage of the strong
national and international demand for concentrated juice and juice related
products.''
About Entech Environmental Technologies Inc.
Entech Environmental Technologies Inc. is a holding company for Shaanxi
Tianren Organic Food Co., Ltd. (''Tianren''). The Company expects change its
name to ''SkyPeople Fruit Juice, Inc''. by the end of May 2008. Tianren is a
company incorporated under the laws of the People's Republic of China. The
Company is engaged in the business of research and development, production and
sales of special concentrated fruit juices, fast-frozen and freeze-dried
fruits and vegetables and fruit juice drinks. Tianren's main products are
concentrated high acid apple juice, kiwifruit juice and pear juice 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. Tianren owns the largest kiwifruit plantation in Asia
and is a leading worldwide producer of kiwifruit concentrate.
Safe Harbor Statement
Under the Private Securities Litigation Reform Act of 1995, this press
release contains certain "forward-looking statements," as defined in the
United States Private Securities Litigation Reform Act of 1995, that involve a
number of risks and uncertainties. Such statements are not guarantees of
future performance and are subject to risks and uncertainties that could cause
the Company's actual results and financial condition to differ materially from
what is included within the forward-looking statements. Forward-looking
statements involve risks and uncertainties, including those relating to the
Company's ability to grow its business. Actual results may differ materially
from the results predicted and reported results should not be considered as an
indication of future performance. Potential risks and uncertainties include,
among others, currently unknown and unforeseeable constraints on the Company's
ability to continue operations, domestic or global economic conditions --
especially those relating to China, activities of competitors and the presence
of new or additional competition, and changes in United States Federal or
State laws, restrictions and regulations on doing business in a foreign
country, in particular China, and conditions in equity markets. More
information about the potential factors that could affect the Company's
business and financial results is included in the Company's filings, available
via the United States Securities and Exchange Commission. There is no
obligation undertaken to update forward looking statements to reflect
subsequent events, changed circumstances, or the occurrence of unanticipated
events.
-- Financial Tables Follow --
ENTECH ENVIRONMENTAL TECHONOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME,
UNAUDITED
Three Months Ended
March 31, March 31,
2008 2007
(Unaudited)(Unaudited)
Revenue$ 8,850,584 $ 5,237,186
Cost of Sales 6,990,966 2,989,421
Gross Margin 1,859,618 2,247,765
Operating Expenses
General and administrative expenses 574,191 109,205
Selling expense 241,345 167,643
Total operating expenses 815,536 276,848
Income from Operations 1,044,082 1,970,917
Other Income (Expenses)
Interest expenses(59,028) --
Other income (expenses) 245,120 (38,873)
Total other income (expenses)186,092 (38,873)
Income Before Income Tax 1,230,174 1,932,044
Income Tax Provision 130,520 373,478
Income Before Minority Interest1,099,654 1,558,566
Minority interest 47,835 78,335
Net Income $ 1,051,819 $ 1,480,231
Earnings Per Share:
Basic earnings per share $0.04 $0.00
Diluted earnings per share 0.040.00
Weighted Average Shares Outstanding
Basic 99,202 --
Diluted 27,528,146 22,006,173
Comprehensive Income
Net income $ 1,051,819 $ 1,480,231
Other comprehensive income 1,420,300 132,169
Comprehensive Income $ 2,472,119 $ 1,612,400
ENTECH ENVIRONMENTAL TECHONOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS, UNAUDITED
March 31, December 31,
2008 2007
ASSETS(Unaudited) (Audited)
CURRENT ASSETS
Cash and equivalents $ 7,443,613 $ 4,094,238
Trade accounts receivable 12,058,954 9,153,687
Other receivables 213,606 55,737
Inventories, net3,569,665 4,460,149
Prepaid expenses and other current assets 101,489101,628
Total current assets 23,387,327 17,865,439
RELATED PARTY RECEIVABLE6,974,253 4,970,427
PROPERTY, PLANT AND EQUIPMENT, Net 17,814,370 17,564,147
LAND USAGE RIGHTS 6,339,247 6,138,297
OTHER ASSETS 75,783 71,818
TOTAL ASSETS $ 54,590,980 $ 46,610,128
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 4,198,603 $ 2,997,740
Accrued expenses 266,096339,818
VAT tax payable 165,935114,909
Other payable 408,029217,759
Advances from customers 426,412708,291
Current portion of notes payable7,843,697 6,406,922
Related party payable 81,693143,366
Total current liabilities 13,390,465 10,928,805
NOTE PAYABLE, net of current portion2,139,190 2,053,501
TOTAL LIABILITIES$ 15,529,655 $ 12,982,306
MINORITY INTEREST 818,081 1,073,364
MINORITY INTEREST-V.I.E 6,308,591 6,308,591
SHAREHOLDERS' EQUITY
Preferred stock, $0.001 par value; 10,000,000
shares authorized 1,000,000 Series A
preferred shares issued and outstanding, 1,000 1,000
3,448,480 Series B preferred shares issued
and outstanding3,448
Common stock, $0.01 par value; 100,000,000
shares authorized 265,511 shares issued and
outstanding2,656
Paid-in capital14,112,380 10,901,817
Accumulated retained earnings 13,510,451 12,458,632
Accumulated other comprehensive income 4,304,718 2,884,418
Total stockholders' equity 31,934,653 26,245,867
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 54,590,980 $ 46,610,128
ENTECH ENVIRONMENTAL TECHONOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS, UNAUDITED
March 31, March 31,
20082007
(unaudited) (unaudited)
Cash Flow from Operating Activities
Net income $ 1,051,819 $ 1,480,231
Adjustments to reconcile net income to net
cash flow provided by operating activities
Depreciation and amortization 714,647 276,874
Minority interest47,835 78,335
Changes in operating assets and liabilities,
net of acquisition effects
Accounts receivables (2,470,381) 658,400
Other receivables (158,285) (6,937)
Prepaid expenses and other current assets 3,340 (429,550)
Inventories 1,054,021 131,874
Accounts payable 1,053,211 537,483
Accrued expenses(86,058) 10,306
Advances from customers(304,904) --
Other payables (153,304) 162,889
VAT tax payable 45,262 (1,180,417)
Net cash provided by operating activities 797,2031,719,488
Cash Flow from Investing Activities
Loan advanced to related parties (1,758,745) --
Additions to property, plant and equipment (154,458)(928)
Net cash used in investing activities(1,913,203)(928)
Cash Flow from Financing Activities
Proceeds from stock issuance 3,216,667 --
Proceeds from bank loans 1,144,900 --
Repayments of related party loan(66,236)(784,164)
Net cash provided by (used in) financing
activities 4,295,331 (784,164)
Effect of Changes in Exchange Rate 170,044 18,487
NET INCREASE IN CASH 3,349,375 952,883
CASH AND CASH EQUIVALENTS, BEGINNING OF
PERIOD 4,094,2382,135,173
CASH AND CASH EQUIVALENTS, END OF PERIOD$ 7,443,613 $ 3,008,056
Non Cash Investing and Financing Activities:
Dividend Payable to Minority Interest $ 303,118 --
(Minority interest balance was offset by the
dividend payable)
For more information, please contact:
Entech Environmental Technologies, Inc.
Ms. Spring Liu, Chief Financial Officer
Tel: +1-818-390-1272
Email: springliu@skypeoplejuice.com
CCG Elite Investor Relations
Mr. Crocker Coulson, President
Tel: +1-646-213-1915 (New York)
Email: crocker.coulson@ccgir.com
Web: http://www.ccgir.com
SOURCE Entech Environmental Technologies, Inc.
