Andatee China Marine Fuel Services Corporation Reports Fiscal Year 2013 Earnings Results

March 31, 2014 5:00 PM EDT | Source: Andatee China Marine Fuel Services Corporation

Beijing, China--(Newsfile Corp. - March 31, 2014) - Andatee China Marine Fuel Services Corporation (NASDAQ: AMCF), a leading independent operator engaged in the production, storage, distribution, trading of blended marine fuel oil for cargo and fishing vessels in China, today announced its financial results for the fourth quarter and fiscal year 2013.

Fiscal Year 2013 Financial Highlights

  • Total sales in 2013 increased by 19.42% to $273.3 million from $228.8 million in 2012

  • Gross profit in 2013 increased by 12.8% to $16.1 million from $14.3 million in 2012. Gross margin remained virtually unchanged at 5.9% and 6.2% in 2013 and 2012, respectively

  • Income from operations in 2013 was $6.55 million as compared to $7.28 million in 2012

  • Net loss was $1.01million mainly due to a goodwill impairment of $1.2 million, as compared to net profit of $1.64 million in 2012

Mr. Wang Hao, Chairman and Chief Executive Officer of Andatee China Marine Fuel Services Corporation, commented, "In fiscal year 2013, despite the weakness in global economy, we were able to accomplish a nearly 20% top line growth in the marine fuel supplying market by expanding our distribution network, increasing our share of retail sales and adding more products offerings. The Company continues to maintain its position as a leading marine fuel supplier along the coast of East China. Our net loss was mainly the result of increased general and administrative expense, goodwill impairment loss and increased income tax expense, among which the goodwill impairment accounted for $1,234,709."

"Going forward, we expect to grow our business for higher revenue growth as well as higher profitability. In the meantime, we intend to begin implementing various cost control measures in our existing business lines with the aim of improving our margins and achieving profitability in 2014 and beyond."

About Andatee China Marine Fuel Services Corporation, Inc.

Andatee China Marine Fuel Services Corporation, through its subsidiaries, engages in the production, storage, distribution, and trading of blended marine fuel oil for cargo and fishing vessels in the People's Republic of China. It also produces customer specific products using its proprietary blending technology. The company sells its products through distributors to retail customers in Tianjin City, Liaoning, Shandong, Jiangsu, and Zhejiang Provinces. Andatee China Marine Fuel Services Corporation is based in Dalian, the People's Republic of China.

Safe Harbor Statement

This press release contains certain statements that may include "forward-looking statements." All statements other than statements of historical fact included herein are "forward-looking statements." These forward-looking statements are often identified by the use of forward-looking terminology such as "believes," "expects" or similar expressions, involving known and unknown risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. These forward-looking statements are based upon our current expectations and projections about future events and generally relate to our plans, objectives and expectations for the development of our business. Although management believes that the plans and objectives reflected in or suggested by these forward-looking statements are reasonable, all forward-looking statements involve risks and uncertainties and actual future results may be materially different from the plans, objectives and expectations expressed in this press release. Accordingly, investors should not place any reliance on forward-looking statements as a prediction of actual results. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including the risk factors discussed in the Company's periodic reports that are filed with the Securities and Exchange Commission and available on the SEC's website (http://www.sec.gov). All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these risk factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.

Contact:

Thomas Yang
Andatee Marine Fuel Services Corporation Limited
Unit C, No. 68 West Binhai Road, Xigang District, Dalian Liaoning, China (map)
Phone: 011-86411-8240-8219
Facsimile: 011-86411-8368-8835
Website: www.andatee.com

ANDATEE CHINA MARINE FUEL SERVICES CORPORATION. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

   For the years ended December 31,  
   2013   2012  
          
Revenues $ 273,260,811  $ 228,813,813  
Cost of revenues  257,129,767   214,517,593  
    Gross profit  16,131,044   14,296,220  
          
Operating expenses         
               Selling expenses  1,081,253   1,341,203  
               General and administrative expenses  7,267,742   5,670,875  
               Goodwill impairment loss  1,234,709   -  
          Total operating expenses  9,583,704   7,012,078  
          
Income from operations  6,547,340   7,284,142  
          
Other income (expense)         
               Interest income  227,174   464,478  
               Interest expense  -5,442,725   -5,942,231  
               Income from equity investment  41,639   -  
               Change in fair value of warrants  -187,851   -  
               Other income (expense)  -136,960   306,714  
          Total other expense  -5,498,723   -5,171,039  
          
Income before income tax provision  1,048,617   2,113,103  
          
Provision for income taxes  2,269,865   703,138  
          
Net income (loss)  -1,221,248   1,409,965  
               Less: net loss attributable to noncontrolling interest  -209,181   -233,731  
Net income (loss) attributable to Andatee China Marine Fuel Services Corporation $ (1,012,067) $ 1,643,696  
          
Comprehensive income (loss)         
               Net income (loss)  -1,221,248   1,409,965  
               Foreign currency translation adjustment  2,000,126   447,735  
               Comprehensive income  778,878   1,857,700  
               Less: comprehensive loss attributable to non-controlling interest  264,703   209,142  
Comprehensive income attributable to Andatee China Marine Fuel Services Corporation  1,043,581   2,066,842  
       
Weighted average number of shares:         
   Basic  9,857,086   9,610,159  
   Diluted  9,870,430   9,610,159  
          
Earnings (loss) per share:     
   Basic $ (0.10) $ 0.17  
   Diluted $ (0.10) $ 0.17  
       

ANDATEE CHINA MARINE FUEL SERVICES CORPORATION. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

  

As of December 31,

 
   2013   2012  
          
ASSETS         
Current assets     
     Cash and cash equivalents $ 22,638,820  $ 1,625,705  
     Restricted cash  99,659,597   9,173,002  
     Accounts receivable, net  45,818,721   18,220,089  
     Inventories, net  3,893,530   9,302,913  
     Advances to suppliers, net  25,930,533   16,387,613  
     Deposits for land use rights  720,084   698,291  
     Deferred financing costs, net  4,373,603   129,555  
     Other current assets  517,320   428,950  
     Deferred tax assets  -   840,540  
                   Total current assets  203,552,208   56,806,658  
Property, plant and equipment, net  54,292,903   40,880,091  
Construction in progress  17,781,162   12,860,195  
Intangible assets, net  16,289,315   8,953,602  
Equity investment  1,351,428   -  
Goodwill  -   1,213,036  
   Total assets $ 293,267,016  $ 120,713,582  
          
LIABILITIES AND EQUITY         
          
Current liabilities     
     Short-term bank borrowings $ 27,821,419  $ 9,314,247  
     Bank note payable  191,257,528   19,679,104  
     Accounts payable and accrued liabilities  3,156,079   8,367,697  
     Advances from customers  1,693,875   8,472,233  
     Loan from third parties  98,193   9,413,436  
     Related party loans payable  1,595,594   509,255  
     Taxes payable  6,254,057    2,719,517  
     Other liabilities  1,149,298   1,777,089  
                   Total current liabilities  233,026,043   60,252,578  
          
Warrant liability  290,687   -  
          
     Total liabilities  233,316,730   60,252,578  
          
Commitments and contingencies         
          
Equity         
     Common stock, $0.001 par value; 50,000,000 shares authorized; 
        10,255,813 and 9,610,159 shares issued; 10,164,621 and 9,518,967 
        shares outstanding
 10,256   9,610  
     Treasury stock, at cost; 91,192 shares  (497,693)  -497,693  
     Additional paid-in capital  29,998,994   29,888,556  
     Accumulated other comprehensive income  6,206,460   4,273,238  
     Retained earnings  17,990,881   19,513,573  
     Statutory reserve  3,932,585    3,421,960  
                   Total stockholders' equity of the Company  57,641,483   56,609,244  
          
Noncontrolling interest  2,308,803   3,851,760  
     Total equity  59,950,286   60,461,004  
                   Total liabilities and equity $ 293,267,016  $ 120,713,582  
       

ANDATEE CHINA MARINE FUEL SERVICES CORPORATION. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

   For the years ended December 31,  
   2013   2012  
          
Cash flows from operating activities         
       Net (loss) income $ (1,221,248) $ 1,409,965  
       Adjustments to reconcile net income(loss) to net cash used in operating activities:     
                 Depreciation  2,122,918   1,826,803  
                 Amortization  476,809   483,205  
                 Bad debt provision  522,040   543,798  
                 Change in inventory reserve  -30,240   46,731  
                 Deferred tax provision (benefit)  855,557   -754,722  
                 Amortization of stock-based compensation to consulting firm  425,000   

  -

 
                 Amortization of stock-based compensation to directors  102,376   -  
                 Income from equity investment  -41,639   -  
                 Goodwill impairment  1,234,709   -  
                 Change in fair value of warrants  187,851   -  
       Changes in operating assets and liabilities:         
                 Accounts receivable  -27,083,195   1,610,536  
                 Inventories  5,656,209   7,546,758  
                 Advances to suppliers  -9,075,970   -307,837  
                 Other current assets  221,303   3,906,267  
                 Accounts payable and accrued liabilities  -6,578,103   -9,338,416  
                 Advances from customers  -6,951,641   -4,946,044  
                 Taxes payable  3,405,030   -1,022,057  
                 Other liabilities  212,845   -1,572,386  
Net cash used in operating activities  -35,559,389   -567,399  
          
Cash flows from investing activities         
       Acquisition of equity method investee  -1,292,303   -  
       Additions to construction in progress and property and equipment  -18,563,989   -859,163  
       Addition to intangible assets  -8,623,375   -1,722,815  
       Proceeds from termination of land use right    1,290,662  
       Proceeds from termination of leasehold right  1,373,072   -  
       Acquisition of non-controlling interest  -1,728,455   -  
       Notes receivable  -   1,332,614  
Net cash (used in) provided by investing activities  -28,835,050   41,298  
          
Cash flows from financing activities         
         Proceeds from short-term loans  33,842,178   35,079,384  
         Repayments of short-term loans  -15,861,401   -30,051,938  
         Proceeds from bank notes  281,182,457   96,773,170  
         Repayments of bank notes  -112,430,337   -122,632,230  
         Restricted cash, net  -89,033,196   13,556,969  
         Deferred financing costs  -4,185,143   -129,508  
         (Repayment) proceeds of loan from unrelated parties  -9,484,694   7,823,556  
         Proceeds (repayment) of loans from related parties  1,055,754   -1,795,160  
Net cash provided by (used in) financing activities  85,085,618   -1,375,757  
          
Effect of exchange rate changes on cash and cash equivalents  321,936   34,548  
          
Net increase (decrease) in cash and cash equivalents  21,013,115   -1,867,310  
       
Cash and cash equivalents, beginning of year $ 1,625,705  $ 3,493,015  
       
Cash and cash equivalents, end of year $22,638,820  $ 1,625,705  
       
Supplemental cash flow information         
         Interest paid $ 9,750,500  $ 5,063,860  
         Income taxes paid $ 678,374  $ 2,323,632  
         Transfer from construction-in-progress to fixed assets $12,413,981  $ -  
         Capitalized interest expense $ 655,438  $ -  
       
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