EX-99.1 2 v114954_ex99-1.htm
 
Entech Environmental Technologies, Inc
Ms. Spring Liu Chief Financial Officer
Tel: (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
http://www.ccgir.com
 
Entech Environmental Technologies, Inc.
Announces First Quarter Results
 
Xi’an, China, May 16 2008 - 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 (first quarter 2008 versus first quarter 2007)
 
·
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 TECHNOLOGIES, 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, net
    
3,569,665
   
4,460,149
 
Prepaid expenses and other current assets
    
101,489
   
101,628
 
Total current assets
    
23,387,327
   
17,865,439
 
               
RELATED PARTY RECEIVABLE
    
6,974,253
   
4,970,427
 
PROPERTY, PLANT AND EQUIPMENT, Net
   
17,814,370
   
17,564,147
 
LAND USAGE RIGHTS (Note 10)
    
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
    
266,096
   
339,818
 
VAT tax payable (Note 11)
    
165,935
   
114,909
 
Other payable
    
408,029
   
217,759
 
Advances from customers
    
426,412
   
708,291
 
Current portion of notes payable
    
7,843,697
   
6,406,922
 
Related party payable
    
81,693
    
143,366
 
Total current liabilities
   
13, 390,465
   
10, 928,805
 
NOTE PAYABLE, net of current portion
    
2,139,190
   
2,053,501
 
TOTAL LIABILITIES
  
$
15,529,655
  
$
12,982,306
  
MINORITY INTEREST
    
818,081
    
1,073,364
 
MINORITY INTEREST-V.I.E (Note 7)
    
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 outstanding
   
3,448
        
Common stock, $0.01 par value; 100,000,000 shares authorized
              
265,511 shares issued and outstanding
    
2,656
       
Paid-in capital
    
14,112,380
   
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 TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVEINCOME, 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 Interest
    
1,099,654
   
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
    
0.04
   
0.00
  
               
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
  
 
 
 
 
 

 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS, UNAUDITED_

   
 March 31,
  
 March 31,
  
   
2008
  
2007
  
   
(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 interest
    
47,835
    
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
    
797,203
   
1,719,488
 
               
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
    
4,094,238
   
2,135,173
 
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)