omniture

Andatee China Marine Fuel Reports 2011 First Quarter Financial Results

Company to Hold Quarterly Conference Call with Accompanying Slide Presentation Friday, May 13, 2011, at 9 a.m. ET

DALIAN, China, May 13, 2011 /PRNewswire-Asia/ -- Andatee China Marine Fuel Services Corporation (NASDAQ: AMCF) ("Andatee" or "the Company"), a leading producer, distributor, and retailer of quality marine fuel for small cargo and fishing vessels in China, today announced financial results for its first quarter ended March 31, 2011.

Q1 2011 Financial Highlights

  • Total revenues of $44.3 million, an increase of 48.6% year over year
  • Net income attributable to Andatee shareholders of $2.3 million, up 65.0% year over year
  • Earnings per share of $0.23

Operational Highlights

  • Total sales volume (metric tons of blended fuel) in Q1 increased 21.4% year over year to 57,000 tons
  • Construction of new blending facilities in Panjin City, Liaoning province, and Zibo City, Shandong province, scheduled to be completed in May 2011 and June 2011, respectively

Outlook for 2011 (Excludes any acquisitions that the Company may consummate this year)

  • Reiterates revenue guidance of between $275 million and $325 million
  • Revises net income guidance to between $10 million and $12 million (from $11 million to $13 million) for the year ending December 31, 2011, as a result of rising cost of inventory (rising oil prices) and a conservative approach to potential margin consolidation
  • Expects total sales volume to increase between 28% and 52% for the year ending December 31, 2011

Mr. An Fengbin, Chairman, CEO, and President of Andatee China Marine Fuel Services Corporation, stated, "We are pleased to report strong operational and financial growth during the 2011 first quarter, a period that is typically affected by seasonality due to the Chinese New Year holiday. During this time, both cargo and fishing traffic tend to decrease, which directly impacts demand for our marine blended fuel products. Despite this, Andatee's revenues grew over 48% from the prior-year period. We attribute this growth to the rising oil price environment, and, more importantly, our continued focus on improving all aspects of our operations, including raw material procurement through an expanding supplier network, expansion of blending capacity by building and acquiring additional facilities, improved distribution, and a diversified customer base. We continue to closely monitor the demand for our fuel products given a rising cost environment, especially in April 2011, as one of our competitive advantages is the cost efficiency for our customers compared with traditional diesel fuel. Despite these headwinds, we feel that the quality and recognition of our 'Xingyuan' brand continues to resonate with our customers. Our retail operations are expanding, and we are confident that the year and future quarters will show stable and steady growth."

Operational Review

During the first quarter of 2011, the Company's sales volume of its blended fuel products increased 21.4% to 57,000 tons from 47,000 tons in the prior-year period. This increase was primarily the result of increasing demand from the Company's existing distribution network and ongoing efforts in promoting its #1 blended marine fuel product, which is utilized by larger fishing vessels. At May 12, 2011, the Company offered six separate blended fuel products, which service smaller fishing vessels to larger handysize cargo ships.

To continue the growth in sales volume through the remainder of 2011, the Company remains focused on enhancing its marketing efforts tailored to "retail", or individual, operations and expanding its distribution base in Southern China.

The Company continues to make progress on its plan to set up market development offices in large cities, opening offices in Shanghai and Shenzhen during the first quarter of 2011. The Company expects to utilize these offices to establish an effective sales and marketing network to pursue organic expansion possibilities, such as new supply agreements and customer sales, while also providing solid foundations to pursue its acquisition-driven growth strategy in neighboring areas around major cities.

In September 2010, the Company began construction of new blending facilities in Panjin City, Liaoning province, and Zibo City, Shandong province, both of which Andatee expects will improve the Company's production capabilities in blending. The Zibo City facility has tanks with a capacity of 17,000 square meters and is scheduled to be completed in May 2011. This new facility's close proximity to a network of refineries in Shandong province should help to reduce the cost of procuring raw materials and the cost of transportation incurred by shipping products to customers in Shidao City, Shandong province. The Panjin City facility will provide an additional 15,000 square meters in tank capacity and is in close proximity to operations of Andatee's current major suppliers. Construction is scheduled to be completed in June 2011.  

Market Overview

During the 2011 first quarter, the average international oil price increased to $99 per barrel, compared to $82 per barrel in the prior-year period, and this trend continued sharply upward in April 2011. Andatee uses oil refinery by-products as raw materials for production, such as tar and heavy diesel, blends the products at its facilities, and then sells its "Xingyuan" brand to customers at a favorable rate to the market.  

Mr. An continued, "In spite of the first quarter's seasonality and rising oil prices, the Company continued to see stable and strong demand from China's fishing industry throughout this period. Typically, a steady increase in oil prices causes little fluctuation for Andatee from suppliers / customers, as the Company generally purchases its raw material from suppliers on a monthly basis and prices the current cost of these materials onto its customers on a weekly or daily basis. The rise in oil prices had a positive effect on our revenues, and to date, we have been able to mitigate the effects of our increasing raw material costs by increasing the price of our products and passing the entirety of the increase to our customers.  However, a continued sharp increase in oil pricing over an extended period of time, which was the case from January to April 2011, may cause concerns over demand.  We have not seen any shift in demand to date but remain conservative in our outlook."

2011 First Quarter Financial Review

  • The Company reported revenues for the 2011 first quarter of $44.3 million, an increase of 48.6% compared to $29.8 million in the first quarter of 2010. The increase was largely due to total sales volume increasing to 57,000 tons in the first quarter of 2011 from 47,000 tons in the prior-year period, which was the result of expanding its sales network and successful marketing efforts of #1 marine fuel products by finding more reliable distributors. Rising oil costs that the Company passed through to its customers also contributed to the increased revenues during the quarter.
  • Gross profit increased 46.4% to $5.2 million from $3.6 million in the prior-year period. Gross margin remained relatively flat at 11.8% for the three months ended March 31, 2011, compared to 12.0% for the prior-year period. The slight decrease was largely due to a similar decrease in sales to higher-margin retail customers, which resulted from the Company's efforts to promote wholesale #1 marine fuel during the 2011 first quarter.
  • The Company reported net income for the first quarter of 2011 of $2.3 million, or $0.23 per diluted share based on 9.8 million weighted average diluted shares outstanding, an increase of 65.0% from net income of $1.4 million, or $0.16 per diluted share based on 8.4 million diluted shares outstanding, in the prior-year period.

Balance Sheet Highlights

At March 31, 2011, Andatee's cash and cash equivalents (excluding $18.8 million in restricted cash) were $8.0 million, total debt was $34.8 million, and stockholders' equity was $52.6 million, compared to $10.8 million, $36.3 million, and $49.9 million, respectively, at December 31, 2010.  

Outlook for 2011

Mr. An concluded, "Andatee is reiterating its revenue guidance for 2011 as our operational and financial results during the seasonally slower first quarter were in line with expectations.  We believe growing demand, improving brand recognition, and balanced fleet growth will continue to drive the marine fuel market in China. We will continue to focus on the Company's organic growth through the opening of new regional facilities, new products, and expanded service offerings such as direct refueling at sea.  We are also working to strategically identify, research, and if appropriate, will acquire target companies with desired facilities in areas that fit into Andatee's growth plans.  We remain conservative in our approach to acquisitions and intend to maintain a balanced strategy for overall stable growth.  However, the rising cost of raw material is substantial, as the purchasing cost in April increased by approximately 30% when compared to that of March, and we do not believe that the cost will go down considerably in the coming months. Coupled with the PRC government's policy of controlling inflation, which includes the price of diesel fuel, the increases in raw material costs may lead to margin pressure on our products in the near term.  As a result, in a conservative measure, we have adjusted our internal projections and have revised the corresponding net income and sales volume guidance."

Estimated Financial Results

(unaudited) ($ in millions)


 

 

 

For the year ended
December 31, 2011

 

For the year ended
December 31, 2010

 


Percent Gain

 

 

Total Revenue

 

$275 - $325

 

$191.2

 

43.8% - 70.0%

 

 

Net Income

 

$10 - $12

 

$8.9

 

12.4% - 34.8%

 

 

 

 

 

 

 

 


Conference Call

The Company will also discuss these results in a conference call tomorrow morning (May 13, 2011) at 9 a.m. ET.

Participant Dial-In Numbers:

(877) 407-9210 (U.S.)

 

 

(201) 689-8049 (International)

 

 

 


A recorded replay of the call will be available until 11:59 p.m. ET on May 16, 2011.  Listeners may dial (877) 660-6853 (U.S.) or (201) 612-7415 (International). The following replay passcodes are both required for playback:

Account no.: 286

 

 

Conference ID: 371503

 

 

 


The call will also be simultaneously broadcast over the Internet.  To listen to the live webcast, please go directly to the Company's website at http://www.andatee.com/ or click on the conference call link, http://www.investorcalendar.com/IC/CEPage.asp?ID=164282. The Company will also have an accompanying slide presentation available in PDF format on its homepage prior to the conference call.

About Andatee China Marine Fuel Services Corporation

Andatee China Marine Fuel Services Corporation is a leading independent operator engaged in the production, storage, distribution, wholesale purchase and sale of blended marine fuel oil for cargo and fishing vessels in northern China. Andatee provides customers with value-added benefits, including single-supplier convenience, competitive pricing, logistical support and fuel quality control. Its products are substitutes for diesel used throughout east China fishing industry. Backed by core facilities, such as storage tanks, marine fuel pumps, blending facilities and berths (the space allotted to a vessel at the wharf) and small- to medium-sized cargo vessels, its sales network covers major depots along the towns of Dandong, Shidao and Shipu along the east coast of China.  Additional information about the Company is available at http://www.andatee.com/.

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. To the extent that any statements made here are not historical, these statements are essentially forward-looking. The Company uses words and phrases such as "guidance," "forecasted," "projects," "is expected," "remain confident," "will" and/or similar expressions to identify forward-looking statements in this press release. Undue reliance should not be placed on forward-looking information. 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 recent acquisitions in Mashan and other markets, PRC governmental decisions and regulation, and existing and future competition that the Company is facing. Additional risks that could affect our future operating results are more fully described in our U.S. Securities and Exchange Commission filings, including our Annual Report on Form 10-K/A for the year ended December 31, 2010, filed with the SEC on April 4, 2011, and other subsequent filings. These filings are available at http://www.sec.gov/. The Company may, from time to time, make additional written and oral forward-looking statements, including statements contained in our filings with the SEC and our reports to shareholders. We do not undertake to update any forward-looking statements that may be made from time to time by or on our behalf.

CONTACT:

 

 

Andatee China Marine Fuel Services Corp.

 

 

Mr. Wen Tong

 

 

Chief Financial Officer

 

 

+86-411-8360-4683

 

 

bill.wen@andatee.com

 

 

http://www.andatee.com

 

 

 

 

INVESTOR RELATIONS:

 

 

The Equity Group Inc.

 

 

Adam Prior

 

 

Vice President

 

 

(212) 836-9606

 

 

aprior@equityny.com

 

 

 

 

Carolyne Yu

 

 

Account Executive

 

 

(212) 836-9610

 

 

cyu@equityny.com

 

 

 



ANDATEE CHINA MARINE FUEL SERVICES CORPORATION.

 

 

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

 

 

 

 

 

 

 

 Three months ended March 31, 

 

 

 

 2011 

 

 

 2010 

 

 

 

 (Unaudited) 

 

 

 (Unaudited) 

 

 

Revenues

 

$44,257,560

 

 

$29,781,090

 

 

Cost of revenues

 

39,015,819

 

 

26,200,695

 

 

Gross profit

 

5,241,741

 

 

3,580,395

 

 

Operating expenses

 

 

 

 

 

          Selling expenses

 

919,255

 

 

737,551

 

 

           General and administrative expenses

 

751,165

 

 

624,295

 

 

Total operating expenses

 

1,670,420

 

 

1,361,846

 

 

Income from operations

 

3,571,321

 

 

2,218,549

 

 

Other income (expense)

 

 

 

 

 

           Interest expense

 

(467,568)

 

 

(120,464)

 

 

           Other expense

 

(1,368)

 

 

(172)

 

 

      Total other income (expense)

 

(468,936)

 

 

(120,636)

 

 

Net income before tax provision

 

3,102,385

 

 

2,097,913

 

 

      Tax provision

 

793,435

 

 

566,736

 

 

      Net income

 

2,308,950

 

 

1,531,177

 

 

      Net income attributable to the noncontrolling interest

 

15,320

 

 

140,992

 

 

      Net income attributable to the Company

 

$2,293,630

 

 

$1,390,185

 

 

      Foreign currency translation adjustment

 

408,091

 

 

(20,416)

 

 

      Comprehensive income attributable to the Company

 

2,701,721

 

 

1,369,769

 

 

      Comprehensive income attributable to the noncontrolling interest

 

15,320

 

 

140,992

 

 

      Comprehensive income

 

$2,717,041

 

 

$1,510,761

 

 

      Basic and diluted weighted average shares outstanding

 

9,822,284

 

 

8,415,631

 

 

      Basic and diluted net earnings per share

 

$0.23

 

 

$0.16

 

 

 

 

 

 



ANDATEE CHINA MARINE FUEL SERVICES CORPORATION.

 

 

CONSOLIDATED BALANCE SHEETS

 

 

 

 

 

 March 31, 

 

 

 December 31, 

 

 

 

 2011 

 

 

 2010 

 

 

 

 (Unaudited) 

 

 

 (Audited) 

 

 

ASSETS

 

 

 

 

 

Current assets

 

 

 

 

 

    Cash and cash equivalents

 

$8,032,989

 

 

$10,813,103

 

 

    Accounts receivable, net

 

5,796,933

 

 

6,203,662

 

 

    Other receivables, net

 

1,215,645

 

 

2,909,634

 

 

    Inventories

 

10,415,729

 

 

12,542,421

 

 

    Advances to suppliers

 

8,589,079

 

 

14,396,859

 

 

    Deposit for acquisition of land use rights

 

670,721

 

 

1,397,443

 

 

    Prepaid expense

 

130,567

 

 

455,700

 

 

    Deferred tax assets

 

45,359

 

 

45,004

 

 

    Other current assets

 

-

 

 

452,928

 

 

Total current assets

 

34,897,022

 

 

49,216,754

 

 

Property, plant and equipment, net

 

21,698,957

 

 

21,443,141

 

 

Construction in progress

 

16,207,029

 

 

14,622,609

 

 

Intangible assets, net

 

2,844,531

 

 

2,839,383

 

 

Goodwill

 

1,165,144

 

 

1,156,034

 

 

Restricted cash

 

18,825,933

 

 

17,022,770

 

 

Total assets

 

$95,638,616

 

 

$106,300,691

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

Current liabilities

 

 

 

 

 

   Accounts payable

 

$470,125

 

 

$1,445,218

 

 

   Short-term loan

 

5,334,522

 

 

4,536,586

 

 

   Taxes payable

 

4,866,942

 

 

10,195,420

 

 

   Advances from customers

 

1,669,722

 

 

6,900,193

 

 

   Accrued liabilities

 

47,160

 

 

193,517

 

 

   Dividends payable

 

241,655

 

 

239,766

 

 

   Bank notes payable

 

29,420,283

 

 

31,761,396

 

 

   Construction project payable

 

450,484

 

 

480,403

 

 

   Other payable

 

507,822

 

 

635,332

 

 

Total current liabilities

 

43,008,715

 

 

56,387,831

 

 

Total liabilities

 

43,008,715

 

 

56,387,831

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

Equity

 

 

 

 

 

Stockholder’s equity of the Company

 

 

 

 

 

Common stock: par value $.001; 50,000,000 shares

 

9,610

 

 

9,610

 

 

   authorized; 9,610,159 shares issued and outstanding at

 

 

 

   March 31, 2011 and December 31, 2010 respectively

 

 

 

Treasury stock, at cost

 

(497,693)

 

 

(497,693)

 

 

Additional paid-in capital.

 

29,827,160

 

 

29,827,160

 

 

Other comprehensive income

 

2,214,496

 

 

1,806,405

 

 

Retained earnings

 

18,736,635

 

 

16,443,005

 

 

Total stockholders' equity of the Company

 

50,290,208

 

 

47,588,487

 

 

Noncontrolling interest

 

2,339,693

 

 

2,324,373

 

 

Total equity

 

52,629,901

 

 

49,912,860

 

 

Total liabilities and equity

 

$95,638,616

 

 

$106,300,691

 

 

 

 

 

 



ANDATEE CHINA MARINE FUEL SERVICES CORPORATION.

 

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

 

 

 

 

 Three months ended March 31, 

 

 

 

 2011 

 

 

 2010 

 

 

 

 (Unaudited) 

 

 

 (Unaudited) 

 

 

Cash flows from operating activities:

 

 

 

 

 

    Net income attributable to the Company

 

$2,293,630

 

 

$1,390,185

 

 

    Adjustments to reconcile net income to net cash  

 

 

 

 

 

     provided by operating activities:

 

 

 

 

 

        Noncontrolling interest  

 

15,320

 

 

140,992

 

 

        Option issued for services

 

-

 

 

40,738

 

 

        Depreciation

 

265,883

 

 

125,643

 

 

        Amortization

 

17,175

 

 

16,711

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

     Accounts receivable

 

406,729

 

 

(56,523)

 

 

      Inventories

 

2,126,692

 

 

(4,123,493)

 

 

      Other receivables

 

1,693,989

 

 

(107,063)

 

 

      Advances to suppliers

 

5,807,780

 

 

266,922

 

 

      Prepaid expense

 

325,133

 

 

150,943

 

 

      Accounts payable

 

(975,093)

 

 

237,954

 

 

      Accrued liabilities

 

(146,357)

 

 

-

 

 

      Advances from customers

 

(5,230,471)

 

 

1,264,739

 

 

      Taxes payable

 

(5,328,478)

 

 

67,480

 

 

      Construction project payable

 

(29,919)

 

 

-

 

 

      Other payable

 

(127,510)

 

 

458,345

 

 

      Other assets

 

452,928

 

 

-

 

 

Net cash provided by (used in) operating activities

 

1,567,431

 

 

(126,427)

 

 

Cash flows from investing activities

 

 

 

 

 

    Purchase of property and equipment

 

(521,699)

 

 

(3,032)

 

 

    Construction contracts  

 

(1,584,420)

 

 

(259,607)

 

 

    Refunds toward purchase of land use right

 

726,722

 

 

-

 

 

    Payment received from related party  

 

-

 

 

122,667

 

 

Net cash used in investing activities

 

(1,379,397)

 

 

(139,972)

 

 

Cash flows from financing activities

 

 

 

 

 

     Proceeds from Initial Public Offering

 

-

 

 

19,989,504

 

 

     Proceeds from short term loans

 

797,936

 

 

-

 

 

     Payment to escrow account for bank notes

 

(1,803,163)

 

 

-

 

 

     Proceeds from bank notes

 

23,370,493

 

 

-

 

 

     Repayment of bank notes

 

(25,711,606)

 

 

-

 

 

Net cash provided by (used in) financing activities

 

(3,346,340)

 

 

19,989,504

 

 

Effect of exchange rate on cash

 

378,192

 

 

(18,855)

 

 

Net increase (decrease) in cash and cash equivalents

 

(2,780,114)

 

 

19,704,250

 

 

Cash and cash equivalents, beginning of period

 

$10,813,103

 

 

$1,539,009

 

 

Cash and cash equivalents, end of period

 

$8,032,989

 

 

$21,243,259

 

 

Supplemental cash flow information:

 

 

 

 

 

     Cash paid during the period for:

 

 

 

 

 

          Interest

 

$509,548

 

 

$107,934

 

 

          Income taxes

 

$2,963,845

 

 

$606,832

 

 

 

 

 

 


Source: Andatee China Marine Fuel Services Corporation
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