Pingtan Marine Enterprise Reports Financial Results for the Fourth Quarter and Year-Ended December 31, 2016

Company Reports Fourth Quarter EPS of $0.08; Hits its Previous Provided Guidance of Approximately Break-even To A Slight Profit Per Diluted Share; and Reiterates 2017 First Quarter EPS Guidance of between $0.08 and $0.10

Company to Hold Conference Call Thursday, March 9, 2017, at 8:30 AM ET

FUZHOU, China, March 9, 2017 /PRNewswire/ -- Pingtan Marine Enterprise Ltd. (Nasdaq: PME) ("Pingtan" or the "Company"), a global fishing company based in the People's Republic of China (PRC), today announced financial results for its fourth quarter and year-ended December 31, 2016.

The Company's recent notable events are as follows:

• The Company hits its previous announced guidance for 2016 fourth quarter of approximately break-even to a slight profit per diluted share by $0.08 per basic and diluted share.
• January 17, 2017: The Company announced a cash dividend of $0.01 per share of common stock outstanding, which was paid on or about February 15, 2017 to shareholders of record on January 31, 2017. This marks the ninth consecutive quarterly dividend paid by the Company. The Company intends to continue paying a quarterly dividend and expects to adjust its quarterly dividend rate in accordance with its earnings performance.
• December 7, 2016: The Company announced that its 4 tuna longline vessels will be put into operation in the international waters of the Pacific Ocean in the first quarter of 2017. 
• December 1, 2016: The Company announced that it has completed construction on its 2 squid jigging vessels and has commenced fishing activity in the Southwest Atlantic and Southeast Pacific Oceans.
• November 22, 2016:  The Company announced that 13 of its fishing vessels were placed in Indo-Pacific waters according to the Company's previously announced operating plan in August 2016, and have arrived in their fishing designation in Indo-Pacific Waters to be put into operation. 

Management Comments

Mr. Xinrong Zhuo, Chairman and CEO of the Company, commented, "In 2016 we were dedicated to expanding into new fishing territories, and we have achieved substantial progress in the fourth quarter. Since November 2016, we have deployed 13 of our fishing vessels to the Indo-Pacific waters, 2 large-scaled squid jigging vessels to the international waters of the Pacific and Atlantic Oceans, and 4 tuna longline vessels to the international waters of the Pacific Ocean. Through these efforts, we started to recover our production capacity to about 30%, returned to profitability by the fourth quarter, and finally ended the losses since the moratorium enacted by the Indonesian government. Looking forward, we will continue to focus on expanding our fishing regions to increase harvest volume and enrich product mix and to innovate and integrate our existing resources to further penetrate into mainland areas and the retail market."

Factors Affecting Pingtan's Results of Operation – Indonesia Moratorium

As previously disclosed in our Forms 10-K and 10-Q  filed during 2015 and 2016, in early December 2014 the Indonesian government introduced a six-month moratorium on issuing new fishing licenses and renewals so that the country's Ministry of Maritime Affairs and Fisheries ("MMAF") could monitor the operations of existing fleets and fight illegal fishing activities. As a result, all licensed fishing vessels operating in Indonesian waters were informed by the Indonesian government to operate within strict guidelines. To cooperate and comply with the Indonesian government's fishing license check procedures, since February 2015, Pingtan has ceased operations of its vessels in Indonesian waters.  Since the Company derives a majority of its revenue from this area, this ban caused a significant drop in production.

In November 2015, the Indonesian government announced that the moratorium had concluded. The Company's expectation is that the MMAF will implement new fishing policies and resume the license renewal process, although this has not yet occurred. In the interim, the Company's financial results will continue to be materially adversely affected by this moratorium.

Among the Company's 135 fishing vessels, 13 are operating in Indo-Pacific waters; 12 are operating in the Bay of Bengal in India; 2 are operating in international waters of Southwest Atlantic and Southeast Pacific Oceans; 4 will be deployed to in international waters of Pacific Ocean in the first quarter of 2017, and the remaining vessels are licensed to operate in the Arafura Sea in Indonesia but temporarily not operating due to the Indonesia moratorium.

2016 Financial Highlights (all results are compared to prior year):

• As a result of the above, revenue was $20.5 million, compared to $60.7 million.
• Gross loss was $8.8 million, compared to $2.8 million, and gross margin was (42.8)% compared to (4.6)%, due to the moratorium described above.
• Net loss attributable to owners of the Company was $15.5 million, or $(0.20) per basic and diluted share, compared to net income attributable to owners of the Company of $18.4 million, or $0.23 per basic and diluted share. The decrease was primarily due to the same reasons described above. 

Fourth Quarter 2016 Financial Highlights (all results are compared to prior year period)

• As a result of the above, revenue was $13.2 million compared to $14.0 million.
• Gross profit was $9.9 million compared to gross loss of $8.9 million.
• Net income attributable to owners of the Company was $6.7 million, or $0.08 per basic and diluted share, compared to net loss attributable to owners of the Company of $9.1 million, or $(0.11) per basic and diluted share. The increase was primarily due to decrease in fuel cost, labor cost and maintenance fee as a result of the moratorium described above, as well as the increase of average unit sale price and the increase in sales volume. 

Pingtan's Revenue Break-down By PRC Territories:

2016 Selected Financial Highlights

Balance Sheet Highlights

Consolidated Financial and Operating Review

Revenues

Revenues for the three months ended December 31, 2016 was $13.2 million compared $14.0 million for the same period in 2015

For the year ended December 31, 2016, the Company's revenues were $20.5 million compared to $60.7 million for the year ended December 31, 2015. The decrease was primarily due to decrease in sales volume resulting from the moratorium described above, as well as the decrease in average unit sale price from the different sales mix.

Gross Margin

The Company's gross margin was 75.1% for the three months ended December 31, 2016, compared to (64.0)% in the prior year period.  The increase was primarily due to significant decrease in cost of revenue, namely fuel cost, labor cost and maintenance fee, as a result of the moratorium described above.   

The Company's gross margin was (42.8)% in the fiscal year ended December 31, 2016 compared to (4.6)% in the same period of 2015, the decrease was primarily due to the reduced scale of operations resulting from the moratorium described above.

Selling Expenses

For the three months ended December 31, 2016, selling expense was $0.7 million compared to $0.5 million, in the prior year period.

For the year ended December 31, 2016, total selling expense was $1.2 million compared to $1.9 million in the same period of 2015. The decrease was primarily due to the same reasons described above which resulted in less shipping and handling fees, storage fees, customs service charge and advertising expenses, partially offset by the increase in insurance cost.

General & Administrative Expenses

For the three months ended December 31, 2016, general and administrative expense was $0.9 million, compared to $0.4 million in the prior year period. 

For the fiscal year ended December 31, 2016, total general and administrative expense was $4.0 million compared to $2.9 million in the same period of 2015. The increase was primarily due to increase in depreciation expense, increase in travel for investor conferences, as well as bad debt recovery based on our periodic review of accounts receivable balances and management's evaluation of the collectability of receivable balances, and increase in other miscellaneous items, partially offset by decrease in professional fees.

Net Income (Loss)

Net income attributable to owners of the Company for the three months ended December 31, 2016 was $6.7 million, or $0,08 per basic and diluted share, compared to net loss attributable to owners of the Company of $(9.1) million, or $(0.11) per basic and diluted share, in the same period of 2015. The increase was primarily due to significant decrease in cost of revenue, namely fuel cost, labor cost and maintenance fee, as a result of the moratorium described above, as well as the increase of average unit sale price and the increase in sales volume. 

Net loss attributable to owners of the Company for the year ended December 31, 2016 was $(15.5) million, or $(0.20) per basic and diluted share, compared to net income attributable to owners of the Company of $18.4 million, or $0.23 per basic and diluted share, in the same period of 2015. The decrease was primarily due to the moratorium described above.

EPS Guidance for First Quarter 2017

Based on the current status of its deployed fleet of fishing vessels and production capacity, the Company reiterates its previously provided 2017 first quarter EPS guidance of between $0.08 and $0.10. 

Conference Call Details

Pingtan also announced that it will discuss financial results in a conference call Thursday, March 9, 2017 – 8:30 a.m. ET.

The dial-in numbers are:

To listen to the live webcast, please go to http://www.ptmarine.com and click on the conference call link at the top of the page, or go to: http://ptmarine.equisolvewebcast.com/q4-2016. This webcast will be archived and accessible through the Company's website for approximately 30 days following the call.

About Pingtan

Pingtan is a global fishing company engaging in ocean fishing through its subsidiary, Fujian Provincial Pingtan County Ocean Fishing Group Co., Ltd., or Pingtan Fishing.

Business Risks and Forward-Looking Statements

This press release may contain forward-looking statements that are subject to the safe harbors created under the Securities Act of 1933 and the Securities Exchange Act of 1934. Such forward looking statements include, but are not limited to, expectations to continue paying quarterly cash dividends and recognizing sales and commencing fishing activities in the first quarter of 2017. Although forward-looking statements reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by us. Consequently, forward-looking statements are inherently subject to risks and uncertainties and actual results and outcomes may differ materially from the results and outcomes discussed in or anticipated by the forward-looking statements. Risks include anticipated growth and growth strategies; need for additional capital and the availability of financing; our ability to successfully manage relationships with customers, distributors and other important relationships; technological changes; competition; demand for our products and services; the deterioration of general economic conditions, whether internationally, nationally or in the local markets in which we operate; legislative or regulatory changes that may adversely affect our business; operational, mechanical, climatic or other unanticipated issues that adversely affect the production capacity of the Company's fishing vessels and their ability to generate expected annual revenue and net income; and other risk factors  contained in Pingtan's SEC filings available at www.sec.gov, including Pingtan's most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q. Readers are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date on which they are made. Pingtan undertakes no obligation to update or revise any forward-looking statements for any reason.

CONTACT:

Roy Yu
Chief Financial Officer
Pingtan Marine Enterprise Ltd.
Tel: +86 591 87271753
ryu@ptmarine.net

INVESTOR RELATIONS COUNSEL:

The Equity Group Inc.
Katherine Yao, Senior Associate
Tel: +86 10 6587 6435
kyao@equityny.com