DALIAN, China, Nov. 14, 2013 (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 unaudited financial results for the third quarter ended September 30, 2013.
Third Quarter 2013 Highlights
- Revenue in the third quarter of 2013 was $61.5 million, a 95% increase from the second quarter of 2012
- Gross profit increased around 6900% year over year to $4.9 million as compared to $0.07 million in the same period of 2012, while gross profit margin during the quarter improved 780 base points year over year to 8% from 0.2%
- Operating income in the third quarter of 2013 was approximately $1.0 million, a 159% increase from the corresponding period in 2012
- The Company ended the quarter with cash balance of approximately $11.3 million and restricted cash of $69.3 million.
"We are excited to report a strong quarter to our shareholders," commented Mr. Fengbin An, Chairman & CEO of Andatee Marine Fuel Services Corporation, "Our strong focus on wholesaler business as well as continuing effort to enhance our top line and bottom line growth are the main causes of our strong financial performance during the quarter. Recently, we are beginning to see some noticeable improvement in terms of shareholder confidence and interests. Going forward, the management will continue to strive to build our shareholder value by delivering solid financial performance," he concluded.
Third Quarter of 2013 Results
Revenue increased by $30 million, or 95%, from $31.5 million for the third quarter ended September 30, 2012 to $61.5 million for the third quarter ended September 30, 2013. The increase in the Company's revenue was mainly due to the increase in sales volume. The increase in our sales volume was primarily driven by increased customer demand for our 180CST, #1, #2 and #4 blended fuel oil which has a relatively competitive market price targeting a broad range of fishing boat and cargo vessel customers. Among our total sales volume in the third quarter of 2013, approximately 25.5% was from sales of our 180CST fuel oil, about 28.5% was from sales if our #1 fuel oil, about 20.1% was from sales of our #2 fuel oil and about 10.3% was from sales of our #4 fuel oil. On the other hand, among our total sales volume for the nine months ended September 30, 2013, approximately 16.1% was from sales of our 180CST fuel oil, about 15.1% was from sales of our #1 fuel oil and about 45.6% was from sales of our #4 fuel oil.
Cost of revenues increased by $25.2 million, or 80%, from $31.4 million for the third quarter ended September 30, 2012 to $56.6 million for the third quarter ended September 30, 2013 primarily due to increased sales volume from 39,533 tons for the third quarter ended September 30, 2012 to 121,573 tons for third quarter ended September 30, 2013.
Gross profit increased by $4.83 million, or 6389%, to $4.9 million for the quarter ended September 30, 2013 as compared to $75,700 in the quarter ended September 30, 2012. As a percentage of revenues, our gross profit margin was 8% and 0.2% for the third quarter of 2013 and 2012, respectively.
Total operating expenses from continuing operations for the third quarter of fiscal 2013 were $3.9 million, an increase of 116.7% from $1.8 million in the prior year period.
Selling expenses increased by $35,337, or 11%, from $332,279 for the third quarter of 2012 to $367,616 in the third quarter of 2013. This increase is mainly due to our increased sales promotion efforts to target large wholesalers during third quarter of 2013 in order to bulk sales fuel oils to them. As a percentage of revenues, selling expenses decreased from 1.1% for the third quarter of 2012 to 0.6% for the third quarter of 2013.
General and administrative expenses increased by $2.11 million, or 135%, from $1.43 million for the third quarter of 2012 to $3.54 million for the third quarter of 2013. The increase was caused by increases in the depreciation expense, bad debt reserves, professional service fees, consulting fees and stock-based compensation expense. As a percentage of revenues, general and administrative expenses increased from 4.5% for the third quarter of 2012 to 5.8% for the third quarter of 2013.
Interest expense decreased by $1.27 million, from $2 million for the third quarter ended September 30, 2012 to $0.74 million for the third quarter ended September 30, 2013. The decrease in interest expense was due to amortization of prepaid interest expense incurred on the bank acceptance bills and short-term bank loans for the three months ended September 30, 2013.
Net loss attributable to the Company decreased by $2.44 million, from a net loss of $2,983,148 for the third quarter ended September 30, 2012 to net loss of $542,859 for the third quarter ended September 30, 2013. The decrease in net loss was mainly the result of increase in sales revenue and gross profit margin, decrease in unit cost and interest expense, offset by increased operating expense for the period indicated.
Financial Condition As of September 30, 2013, the Company had cash balance of approximately $11.3 million, and an addition to $69.3 million in restricted cash.
About Andatee China Marine Fuel Services
Andatee China Marine Fuel Services Corporation is a leading independent operator engaged in the production, storage, distribution, and trading of blended marine fuel oil for cargo and fishing vessels in China. Headquartered in the City of Dalian, a key international shipping hub and an international logistics center in Northern China, Andatee maintains operations in Liaoning, Shandong, Zhejiang Provinces and Shanghai area. Additional information about the Company is available via the Company filing with The Securities Exchange Commission at www.sec.gov.
Safe Harbor Relating to the Forward Looking Statements
Statements contained in this press release not relating to historical facts are forward-looking statements that are intended to fall within the safe harbor rule under the Private Securities Litigation Reform Act of 1995. All forward-looking statements included herein are based upon information available to the Company as of the date hereof and, except as is expressly required by the federal securities laws, the Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, changed circumstances or future events or for any other reason. As a result, investors should not place undue reliance on these forward- looking statements. To the extent that any statements made here are not historical, these statements are essentially forward-looking. Forward-looking statements can be identified by the use of words such as "expects," "plans," "will," "may," "anticipates," "believes," "should," "intends," "estimates" and other words of similar meaning. The Company may also make written or oral forward-looking statements in its periodic reports filed with the U.S. Securities and Exchange Commission and other written materials and in oral statements made by its officers, directors or employees to third parties. These statements are subject to risks and uncertainties that cannot be predicted or quantified and, consequently, actual results may differ materially from those expressed or implied by these forward-looking statements. Such risk factors include, without limitation, our ability to properly execute our business model, to address price and demand volatility, to counter weather and seasonal fluctuations, to attract and retain management and operational personnel, potential volatility in future earnings, fluctuations in the Company's operating results, our ability to expand geographically into new markets and successfully integrate future acquisitions, our ability to integrate and capitalize on the acquisitions in various markets, PRC governmental decisions and regulation, and existing and future competition that the Company is facing. These forward-looking statements are subject to known and unknown risks and uncertainties that could cause actual events to differ from the forward-looking statements. More information about some of these risks and uncertainties may be found in the Company's filings with the Securities and Exchange Commission under the caption "Risk Factors" in such filings.
| ANDATEE CHINA MARINE FUEL SERVICES CORPORATION. AND SUBSIDIARIES | ||
| UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS | ||
| September | December | |
| 30, 2013 | 31, 2012 | |
| ASSETS | ||
| Current assets | ||
| Cash and cash equivalents | $11,274,002 | $1,625,705 |
| Restricted cash | 69,327,486 | 9,173,002 |
| Accounts receivable, net | 40,187,445 | 18,220,089 |
| Inventories, net | 37,670,456 | 9,302,913 |
| Advances to suppliers | 17,257,774 | 16,387,613 |
| Deposits for land use rights | 4,628,121 | 698,291 |
| Prepaid expense and other current assets | 3,854,409 | 558,505 |
| Deferred tax assets | 672,848 | 840,540 |
| Total current assets | 184,872,541 | 56,806,658 |
| Property, plant and equipment, net | 51,958,090 | 40,880,091 |
| Construction in progress | 1,477,866 | 12,860,195 |
| Equity investment | 1,332,824 | -- |
| Intangible assets, net | 9,392,615 | 8,953,602 |
| Goodwill | 1,245,594 | 1,213,036 |
| Total assets | $250,279,530 | $120,713,582 |
| LIABILITIES AND EQUITY | ||
| Current liabilities | ||
| Short-term bank borrowings | $27,703,540 | $9,314,247 |
| Bank note payable | 117,880,190 | 19,679,104 |
| Accounts payable and accrued liabilities | 24,540,298 | 8,367,697 |
| Advances from customers | 3,588,015 | 8,472,233 |
| Loan from third parties | 2,365,393 | 9,413,436 |
| Related party loans payable | 2,985,843 | 509,255 |
| Taxes payable | 6,642,679 | 2,719,517 |
| Other liabilities | 3,736,206 | 1,777,089 |
| Total current liabilities | 189,442,163 | 60,252,578 |
| Warrant liability | 363,225 | -- |
| Commitments and contingencies | ||
| Equity | ||
| Common stock, $0.001 par value; 50,000,000 shares authorized; 9,860,159 and 9,610,159 shares issued; 9,768,967 and 9,518,967 shares outstanding as of September 30, 2013, and December 31, 2012,respectively | 9,860 | 9,610 |
| Treasury stock, at cost; 91,192 shares | (497,693) | (497,693) |
| Additional paid-in capital | 30,503,899 | 29,888,556 |
| Accumulated other comprehensive income | 5,358,724 | 4,297,827 |
| Retained earnings | 18,637,401 | 19,513,573 |
| Statutory reserve | 4,010,828 | 3,421,960 |
| Total stockholders' equity of the Company | 58,023,019 | 56,633,833 |
| Noncontrolling interest | 2,451,123 | 3,827,171 |
| Total equity | 60,474,142 | 60,461,004 |
| Total liabilities and equity | $250,279,530 | $120,713,582 |
| ANDATEE CHINA MARINE FUEL SERVICES CORPORATION. AND SUBSIDIARIES | |||||
| UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) | |||||
| Six months | |||||
| Three months ended | Nine months ended | ended June | |||
| September 30, | September 30, | 30, | |||
| 2013 | 2012 | 2013 | 2012 | 2013 | |
| Revenues | $61,564,873 | $ 31,524,045 | $ 190,962,563 | $ 139,883,552 | $ 129,397,690 |
| Cost of revenues | 56,652,979 | 31,448,345 | 178,635,410 | 133,980,293 | 121,982,431 |
| Gross profit | 4,911,894 | 75,700 | 12,327,153 | 5,903,259 | 7,415,259 |
| Operating expenses | |||||
| Selling expenses | 367,616 | 332,279 | 1,184,647 | 1,288,733 | 817,031 |
| General and administrative expenses | 3,547,780 | 1,432,991 | 7,684,547 | 3,838,453 | 4,136,767 |
| Total operating expenses | 3,915,396 | 1,765,270 | 8,869,194 | 5,127,186 | 4,953,798 |
| Income from operations | 996,498 | (1,689,570) | 3,457,959 | 776,073 | 2,461,461 |
| Other income (expense) | |||||
| Interest income | 58,744 | 217,141 | 283,792 | 344,899 | 225,048 |
| Interest expense | (737,667) | (2,014,360) | (2,818,881) | (4,654,981) | (2,081,214) |
| Income (loss) from equity investment | 12,418 | -- | 28,768 | -- | 16,350 |
| Change in fair value of warrants | (270,539) | -- | (260,389) | -- | 10,150 |
| Other income (expense) | (193,101) | (68,024) | (193,270) | 221,848 | (169) |
| Total other income (expense) | (1,130,145) | (1,865,243) | (2,959,980) | (4,088,234) | (1,829,835) |
| Income (loss) before income tax provision | (133,647) | (3,554,813) | 497,979 | (3,312,161) | 631,626 |
| Provision for Income Taxes (benefit) | 408,053 | (496,583) | 877,307 | (459,163) | 469,254 |
| Net income (loss) | (541,700) | (3,058,230) | (379,328) | (2,852,998) | 162,372 |
| Less: net loss attributable to noncontrolling interest | 1,159 | (75,082) | (92,025) | (245,167) | (93,184) |
| Net income (loss) attributable to Andatee China Marine Fuel Services Corporation | $ (542,859) | $ (2,983,148) | $ (287,303) | $ (2,607,831) | $ 255,556 |
| Comprehensive income (loss) | |||||
| Net loss | (541,700) | (3,058,230) | (379,328) | (2,852,998) | |
| Foreign currency translation adjustment | (115,317) | (201,429) | 1,499,734 | 75,234 | 1,615,051 |
| Comprehensive income (loss) | (657,017) | (3,259,659) | 1,120,406 | (2,777,764) | |
| Less: foreign currency translation adjustment attributable to non-controlling interest | (24,556) | 107,555 | (316,411) | (62,530) | (291,855) |
| Comprehensive income (loss) attributable to Andatee China Marine Fuel Services Corporation | (632,461) | (3,367,214) | 1,436,817 | (2,715,234) | 1,323,196 |
| Basic and diluted weighted average shares outstanding | 9,860,159 | 9,518,967 | 9,715,858 | 9,518,967 | 9,642,103 |
| Basic and diluted net earnings (loss) per share | $ (0.06) | $ (0.31) | $ (0.03) | $ (0.27) | $ 0.03 |
| ANDATEE CHINA MARINE FUEL SERVICES CORPORATION. AND SUBSIDIARIES | ||
| UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||
| Nine months ended | ||
| September 30, | ||
| 2013 | 2012 | |
| Cash flows from operating activities: | ||
| Net income loss | $(379,328) | $(2,852,998) |
| Adjustments to reconcile net loss to net cash used in operating activities: | ||
| Depreciation | 1,813,675 | 1,343,388 |
| Amortization | 393,147 | 262,740 |
| Bad debt provision | 2,951,205 | 305,534 |
| Provision for inventory reserve | 139,549 | -- |
| Deferred tax provision (benefit) | 187,901 | (515,904) |
| Amortization of stock-based compensation to consulting firm | 356,667 | -- |
| Amortization of stock-based compensation to directors | 136,500 | |
| Income from equity investment | (28,768) | -- |
| Change in fair value of warrants | 260,389 | -- |
| Changes in operating assets and liabilities | ||
| Accounts receivable | (23,769,140) | 3,797,214 |
| Inventories | (27,909,845) | (14,688,047) |
| Settlement receivable | -- | |
| Advances to suppliers | (819,909) | 12,066,600 |
| Prepaid expense and other current assets | (3,409,281) | (3,470,866) |
| Accounts payable and accrued liabilities | 16,851,041 | (11,027,246) |
| Advances from customers | (5,048,428) | 7,775,633 |
| Taxes payable | 3,802,579 | (2,212,452) |
| Other liabilities | 1,151,546 | 1,043,416 |
| Net cash used in operating activities | (33,320,502) | (8,172,988) |
| Cash flows from investing activities | ||
| Equity investment in unconsolidated entity | (1,287,581) | -- |
| Additions to construction in progress and property and equipment | (88,554) | (588,945) |
| Purchase of land use rights | (4,452,134) | -- |
| Cash paid for acquiring non-controlling interest | (1,722,140) | -- |
| Refunds of deposits | 643,368 | |
| Net cash (used in) provided by investing activities | (7,550,410) | 54,423 |
| Cash flows from financing activities | ||
| Proceeds from short term loans | 33,718,535 | 3,283,865 |
| Repayment of short term loans | (15,803,451) | (5,809,915) |
| Proceeds from bank notes | 128,011,331 | 89,595,832 |
| Repayment of bank notes | (31,545,741) | (91,174,613) |
| Restricted cash, net | (59,167,769) | 1,162,616 |
| Advance from (Repayment of) loan to unrelated party | (7,210,455) | 14,665,815 |
| Proceeds of loan from related party | 2,354,493 | 3,112,687 |
| Net cash provided by financing activities | 50,356,942 | 14,836,287 |
| Effect of exchange rate changes on cash and cash equivalents | 162,267 | 31,076 |
| Net decrease in cash and cash equivalents | 9,648,297 | 6,748,798 |
| Cash and cash equivalents, beginning of period | $1,625,705 | $3,493,015 |
| Cash and cash equivalents, end of period | $11,274,002 | $10,241,813 |
| Supplemental cash flow information: | ||
| Interest paid | $2,593,721 | $4,653,830 |
| Income taxes paid | $316,835 | $491,902 |