Andatee China Marine Fuel Services Corporation Reports Second Quarter 2014 Financial Results

By GlobeNewswire,  August 15, 2014, 08:30:00 AM EDT


BEIJING, Aug. 15, 2014 (GLOBE NEWSWIRE) -- 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 second quarter of 2014 ended June 30, 2014.

Second Quarter 2014 Financial Highlights:

  • Total sales in Q2 2014 increased by 131.67% to $175.5 million from $75.8 million in Q2 2013
  • Gross profit in Q2 2014 increased by 131.73% to $9.15 million from $3.95 million in Q2 2013
  • Income from operations in Q2 2014 increased by 495.15% to $6.56 million from $1.10 million in Q2 2013
  • Net income increased by 3767.40% to $2.9 million, from net loss of $79,414 for Q2 2013
  • Quarterly diluted earnings per share (EPS) jumped to $0.28 from a loss of $0.01 in the same period last year

Mr. Wang Hao, Chairman and Chief Executive Officer of Andatee China Marine Fuel Services Corporation, commented, "We had a great quarter as we delivered strong top and bottom line results. We have recently shifted our strategy from retail sales of fuel oil to wholesale sales of fuel oil to large wholesalers located at extended geographic markets, such as in Shanghai and Zhejiang Province, resulting in a net income of $2.9 million. During the quarter, we also diversified our business line by acquiring Qingdao Grand New Energy Co., Ltd., a technology company which has proprietary clean energy technologies and solutions Going forward, we will continue to adjust our strategy to improve our financial performance and maintain sustainable growth in 2014 and beyond."

Second Quarter of 2014 Result

Revenue increased by $99.8 million, or 131.7%, from $75.8 million in three months ended June 30, 2013 to $175.5 million in 2014 for three months ended June 30, 2014. For the six months ended June 30, 2014, our revenue increased by $88 million or 68.1%, from $129.4 million in six months ended June 30, 2013 to $217.5 million in 2014. The increase in our revenues was mainly due to increased sales volume. Our overall sales volume increase by 148,598 tons, or 177.1%, from 83,896 tons for the second quarter ended June 30, 2013 to 232,494 tons for the second quarter ended June 30, 2014. For the six months ended June 30, 2014, our overall sales volume increased by 129,793 tons, or 82.7%, from 156,907 tons for the six months ended June 30, 2013 to 286,700 tons for the six months ended June 30, 2014.

Also, we shifted our strategy from retail sales of fuel oil to wholesale sales of fuel oil to large wholesalers located at extended geographic markets, such as in Shanghai and Zhejiang Province. Our wholesales business also helped to increase the sales volume.

Cost of Revenue increased by $94.6 million, or 131.7%, from $71.8 million for the second quarter ended June 30, 2013 to $166.4 million for the second quarter ended June 30, 2014, primarily due to increased sales volume from 83,896 tons for the second quarter ended June 30, 2013 to 232,494 tons for the second quarter ended June 30, 2014. For the six months period, our cost of revenues increased by $83.5 million, or 68.4%, from $121.9 million for the six months ended June 30, 2013 to $205.5 million for the six months ended June 30, 2013 due to increased sales volume from 156,907 tons for the six months ended June 30, 2013 to 286,700 tons for the six months ended June 30, 2014. The increase in our cost of revenue was primarily due to increased sales volume.

Gross Margins increased by $5.2 million, or 131.9%, to $9.1 million for the quarter ended June 30, 2014 as compared to $3.9 million in the quarter ended June 30, 2013. As a percentage of revenues, our gross profit margin was 5.2% and 5.2% for the second quarter of 2014 and 2013, respectively; and increased by $4.6 million, or 62.1%, to $12 million for the six months ended June 30, 2014 as compared to $7.4 million for the six months ended June 30, 2013. As a percentage of revenues, our gross profit margin was 5.5% and 5.7% for the six months ended June 30, 2014 and 2013, respectively. The increase in our gross margin was largely attributable to increased sales volume and decreased unit costs as compared to the same period of 2013. However, the slight decrease in our GP% was due to the shifting of our sales mix from retail side to wholesale side.

Selling Expenses decreased by $118,114, or 33.0%, from $357,975 for the three months ended June 30, 2013 to $239,831 for the three months ended June 30, 2014. This decrease is mainly due to reduced sales promotions, oil storage tank and other facility lease expenses. As a percentage of revenues, selling expenses decreased from 0.5% for the three months ended June 30, 2013 to 0.1% for the three months ended June 30, 2014. And the selling expenses decreased by $345,879, or 42,3%, from $817,031 for the six months ended June 30, 2013 to $471,152 for the six months ended June 30, 2014. This decrease is mainly due to reduced sales promotion expenses and lease expenses. As a percentage of revenues, selling expenses decreased from 0.6% for the six months ended June 30, 2013 to 0.2% for the six months ended June 30, 2014.

General and Administrative Expenses decreased $142,823, or 5.7%, from $2.49 million for the three months ended June 30, 2013 to $2.34 million for the three months ended June 30, 2014. The decrease was because of decreases in bad debt reserves due to our efforts to collect the outstanding accounts receivable and realization of the outstanding advance payments to vendors. Also, due to terminating the oil storage tank lease, amortization on leaseholds decreased as well. As a percentage of revenues, general and administrative expenses increased from 3.3% for the three months ended June 30, 2013 to 1.3% for the three months ended June 30, 2014. However, General and administrative expenses increased by $541,539, or 13.1%, from $4.14 million for the six months ended June 30, 2013 to $4.68 million for the six months ended June 30, 2014. The increase was caused by increases in depreciation expense, professional services fees and consulting fees. As a percentage of revenues, general and administrative expenses decreased from 3.2% for the six months ended June 30, 2013 to 2.2% for the six months ended June 30, 2014.

Interest Expense increased by $3.3 million, from $1.17 million for the three months ended June 30, 2013 to $4.46 million for the three months ended June 30, 2014. And the Interest expense increased by $6.3 million, from $2.1 million for the six months ended June 30, 2013 to $8.4 million for the six months ended June 30, 2014. The increase in interest was due to our increased borrowing of short-term loans and bank notes bills for working capital and capital expenditures.

Net Income (loss) Attributable to the Company increased by $3.0 million, from net loss of $79,414 for the three months ended June 30, 2013 to net income of $2.9 million for the three months ended June 30, 2014. The increase in our net income was mainly the result of our increase in revenues, decrease in selling and general and administrative expense, and affected by an increase in interest expense as discussed above. And the Net loss attributable to the Company increased by $0.8 million, from a net income of $255,556 for the six months ended June 30, 2013 to net loss of $509,596 for the six months ended June 30, 2014. The increase in net loss was mainly the result of an increase in interest expense for the period indicated.

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 including, among others, our estimates of the Company's ability to attain and sustain growth in 2014 and beyond. 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.

 

 
ANDATEE CHINA MARINE FUEL SERVICES CORPORATION. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
 
  June 30, 2014 December 31, 2013
     
ASSETS    
Current assets    
Cash and cash equivalents $ 788,239 $ 22,638,820
Restricted cash 53,671,690 99,659,597
Accounts receivable, net 15,184,416 45,818,721
Inventories, net 36,149,447 3,893,530
Advances to suppliers, net 843,089 25,930,533
Deposits for land use rights 714,844 720,084
Deferred financing costs 2,727,307 4,373,603
Equity investment 1,352,960 1,351,428
Other current assets 6,939,575 517,320
Total current assets 118,371,567 204,903,636
     
Property, plant and equipment, net 53,048,313 54,292,903
Construction in progress 70,357,294 17,781,162
Intangible assets, net 15,940,128 16,289,315
Total assets $ 257,717,302 $ 293,267,016
     
LIABILITIES AND EQUITY    
     
Current liabilities    
Short-term bank borrowings $ 24,044,710 $ 27,821,419
Bank note payable 141,345,529 191,257,528
Accounts payable and accrued liabilities 26,179,240 3,156,079
Advances from customers 167,636 1,693,875
Loan from third parties 97,479 98,193
Related party loans payable 875,512 1,595,594
Taxes payable 4,640,796 6,254,057
Other liabilities 2,975,438 1,149,298
Total current liabilities 200,326,340 233,026,043
     
Warrant liability 272,085 290,687
Total liabilities 200,598,425 233,316,730
     
Commitments and contingencies    
     
Equity    
Common stock, $0.001 par value; 50,000,000 shares authorized; 10,255,813 shares issued; 10,164,621 shares outstanding 10,256 10,256
Treasury stock, at cost; 91,192 shares (497,693) (497,693)
Additional paid-in capital 31,578,788 29,998,994
Accumulated other comprehensive income 3,914,424 6,206,460
Retained earnings 17,481,285 17,990,881
Statutory reserve 3,932,585 3,932,585
Total stockholders' equity of the Company 56,419,645 57,641,483
Noncontrolling interest 699,232 2,308,803
Total equity 57,118,877 59,950,286
Total liabilities and equity $ 257,717,302 $ 293,267,016

 

 
ANDATEE CHINA MARINE FUEL SERVICES CORPORATION. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
 
  Three months ended June 30, Six months ended June 30,
  2014 2013 2014 2013
         
Revenues $ 175,529,194 $ 75,766,037 $ 217,485,835 $129,397,690
Cost of revenues 166,381,021 71,818,195 205,473,413 121,982,431
Gross profit 9,148,173 3,947,842 12,012,422 7,415,259
         
Operating expenses        
Selling expenses 239,831 357,975 471,152 817,031
General and administrative expenses 2,344,079 2,486,902 4,678,306 4,136,767
Total operating expenses 2,583,910 2,844,877 5,149,458 4,953,798
         
Income from operations 6,564,263 1,102,965 6,862,964 2,461,461
         
Other income (expense)        
Interest income 943,030 13,628 1,135,030 225,048
Interest expense (4,461,157) (1,167,686) (8,390,891) (2,081,214)
Income (loss) from equity investment 5,140 (8,566) 11,397 16,350
Change in fair value of warrants 17,366 10,150 18,602 10,150
Other income (expense) (13,738) (33,496) (22,095) (169)
Total other income (expense), net (3,509,359) (1,185,970) (7,247,957) (1,829,835)
         
Income (loss) before income tax provision 3,054,904 (83,005) (384,993) 631,626
         
Provision for income taxes 21,820 52,668 143,559 469,254
         
Net income (loss) 3,033,084 (135,673) (528,552) 162,372
Less: net loss attributable to noncontrolling interest 120,656 (56,259) (18,956) (93,184)
Net income (loss) attributable to Andatee China Marine Fuel Services Corporation $ 2,912,428 $ (79,414) $ (509,596) $ 255,556
         
Comprehensive income (loss)        
Net income (loss) 3,033,084 (135,673) (528,552) 162,372
Foreign currency translation adjustment (81,640) 1,032,940 (432,984) 1,615,051
Comprehensive income (loss) 3,114,724 897,267 (961,536) 1,777,423
Less: comprehensive income (loss) attributable to non-controlling interest 1,433,612 (4,207) 1,609,571 (198,671)
Comprehensive income attributable to Andatee China Marine Fuel Services Corporation 4,548,336 893,060 648,035 1,578,752
         
Weighted average number of shares:        
Basic 10,255,813 9,674,048 10,255,813 9,642,103
Diluted 10,383,420 9,674,048 10,255,813 9,642,103
         
Earnings (losses) per share:        
Basic $ 0.28 $ (0.01) $ (0.05) $ 0.03
Diluted $ 0.28 $ (0.01) $ (0.05) $ 0.03

 

 
ANDATEE CHINA MARINE FUEL SERVICES CORPORATION. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 
  Six months ended June 30,
  2014 2013
     
Cash flows from operating activities    
Net (loss) income $ (528,552) $ 162,372
Adjustments to reconcile net income(loss) to net cash used in operating activities:    
Depreciation 1,242,318 1,079,611
Amortization 204,826 253,656
Bad debt provision 782,621 1,584,462
Recovery of bad debt provision (529,088) --
Change in inventory reserve 164,605 55,864
Deferred tax provision (benefit) -- (205,650)
Amortization of deferred financing costs 5,616,212 --
Amortization of stock-based compensation to directors 68,250 67,500
Income from equity investment (11,397) (16,350)
Change in fair value of warrants (18,602) (10,150)
Changes in operating assets and liabilities:    
Accounts receivable 29,592,905 (30,016,665)
Inventories (32,530,365) (11,172,857)
Advances to suppliers 25,490,658 (5,904,874)
Other current assets (6,376,100) (1,904,385)
Accounts payable and accrued liabilities 24,234,126 12,122,383
Advances from customers (1,517,732) (1,450,003)
Taxes payable (1,571,699) 95,056
Other liabilities 675,587 (904,182)
Net cash provided by (used in) operating activities 44,988,573 (36,164,212)
     
Cash flows from investing activities    
Acquisition of equity method investee -- (1,282,154)
Additions to property and equipment (390,750) (69,053)
Additions to construction in progress (52,838,609) --
Addition to intangible assets (37,753) (1,602,693)
Cash paid for acquiring non-controlling interest (1,905,631) --
Net cash used in investing activities (55,172,743) (2,953,900)
     
Cash flows from financing activities    
Proceeds from short-term loans 19,137,743 19,152,176
Repayments of short-term loans (22,720,980) (9,406,202)
Proceeds from bank notes 141,702,363 91,674,012
Repayments of bank notes (190,344,805) (19,873,387)
Restricted cash, net 45,376,812 (37,147,199)
Deferred financing costs (3,997,672) --
Repayment of loan from unrelated parties -- (7,180,063)
Proceeds (repayment) of loans from related parties (709,947) 3,742,096
Net cash (used in) provided by financing activities (11,556,486) 40,961,433
     
Effect of exchange rate changes on cash and cash equivalents (109,925) 53,377
     
Net (decrease) increase in cash and cash equivalents (21,850,581) 1,896,698
     
Cash and cash equivalents, beginning of period $ 22,638,820 $ 1,625,705
     
Cash and cash equivalents, end of period $ 788,239 $ 3,522,403
     
Supplemental cash flow information    
Interest paid $ 6,664,759 $ 2,582,788
Income taxes paid $ 969,050 $ 315,620
Transfer from advances to suppliers to construction in progress $ 51,483,406 $ --
CONTACT: Thomas YangAndatee 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
Source: Andatee China Marine Fuel Services Corporation

This article appears in: News Headlines

Referenced Stocks: AMCF


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