Longwei Petroleum Announces Record Revenue and Operating Results for First Quarter Fiscal 2011

TAIYUAN CITY, China, Nov. 16, 2010 /PRNewswire-Asia-FirstCall/ -- Longwei Petroleum Investment Holding Ltd. (NYSE Amex: LPH) ("Longwei" or the "Company"), an energy company engaged in the storage and distribution of finished petroleum products in the People's Republic of China ("PRC"), today announced record revenue and operating income for the three months ended September 30, 2010.

First Quarter Fiscal Year 2011 Financial Highlights: (Year-over-Year, 3-Month Results)

• Revenues increased 91% to $113.3 million, compared with $59.4 million
• Operating Income increased 86% to $20.5 million, compared with $11.1 million
• Adjusted* Net Income increased 84% to $15.2 million, compared to $8.3 million
• Adjusted* Basic EPS increased to $0.16 per share and Diluted EPS to $0.13 per share, compared to $0.10 per share (Basic and Diluted EPS) for the three months ended September 30 2010
• Net Income after $10.4 million non-cash charge for the change in the warrant derivative liability associated with the October 2009 financing decreased 32% to $4.8 million, compared to $8.3 million
• Basic GAAP EPS decreased to $0.05 per share and Diluted GAAP EPS to $0.04 per share, compared to Basic GAAP EPS of $0.09 and Diluted GAAP EPS $0.08 for the three months ended September 30, 2009
• Current assets increased 11%, or $15.3 million, to $159.3 million; no long-term debt
• Tangible book value was $186.3 million, or $1.63 per diluted share, as of September 30, 2010
• The new Gujiao fuel storage depot contributed $41.5 million in revenues for the first quarter
  (*Pro forma non-GAAP adjustment net of non-cash derivative charge)

"We experienced another record quarter of revenue growth and operating profits. The non-cash charge for the change in the warrant derivative liability related to our October 2009 financing and has no impact on our operations," stated Michael Toups, CFO of Longwei. "We have continued to improve our working capital management to enhance our inventory level flexibility and purchasing capability to react to changes in market prices. We are experiencing strong demand from our growing customer base."

Pro Forma Results of Operations

The following table contains selected statements of operations information, which is unaudited and should be read in conjunction with our financial statements and related notes included elsewhere in the Company's Form 10-Q filed with the SEC on November 15, 2010. The unaudited pro forma information reflects the adjustment to Net Income Attributable to Common Shareholders on a non-GAAP basis, whereby the effect of the noncash adjustment for each period presented of the change in the fair value of derivatives associated with the October 2009 Warrants is net to -0- in order to calculate the pro forma adjusted Net Income Attributable to Common Shareholders.  This pro forma adjustment has been used to calculate the pro forma basic and diluted earnings per share.  The pro forma operating results for the quarters presented are not necessarily indicative of results for any future periods.  

"We continue to post very strong operating results," stated Mr. Cai Yongjun, Chairman and CEO of Longwei. "Our performance remains on-track as we continue to add new customers, as well as the organic growth of our existing customer base due to the strong domestic petroleum demand from both industrial and consumer customers. We expect fiscal 2011 to be another record year as we continue to penetrate the market for our products and experience the benefits of a full year of revenue generation from our new Gujiao facility."

Conference Call and Webcast

Management will host a conference call to discuss these financial results on Wednesday, November 17, 2010 at 9:00 a.m. Eastern time (6:00 a.m. Pacific).

To participate in the call please dial (800) 474-8920, or (719) 457-2573 for international calls, approximately 10 minutes prior to the scheduled start time. Interested parties can also listen via a live Internet webcast, which can be found via the Company's website at http://www.longweipetroleum.com, or alternately at http://ViaVid.net.

A replay of the call will be available for two weeks from 12:00 p.m. noon EST on November 17, 2010, until 11:59 p.m. EST on December 1, 2010. The number for the replay is (877) 870-5176, or (858) 384-5517 for international calls; the pin number for the replay is 9181274. In addition, a recording of the call will be available via the company's website at http://www.longweipetroleum.com for one year.

About Longwei Petroleum Investment Holding Limited

Longwei Petroleum Investment Holding Limited is an energy company engaged in the storage and distribution of finished petroleum products in the People's Republic of China. The Company's oil and gas operations consist of transporting, storage and selling finished petroleum products, entirely in the PRC. The Company's headquarters are located in Taiyuan City, Shanxi Province. The Company has a storage capacity for its products of 120,000 metric tons located at storage facilities in Taiyuan and Gujiao, Shanxi. The Company's Taiyuan and Gujiao facilities can store 50,000 metric tons and 70,000 metric tons, respectively. The Company is 1 of 3 licensed intermediaries in Taiyuan and the sole licensed intermediary in Gujiao that operates its own large scale storage tanks. The Company has the necessary licenses to operate and sell petroleum products not only in Shanxi but throughout the entire PRC. The Company's storage tanks have the largest storage capacity of any non-government operated entity in Shanxi.

The Company seeks to earn profits by selling its products at competitive prices with timely delivery to coal mining operations, power supply customers, large-scale gas stations and small, independent gas stations. The Company also earns revenue under an agency fee by acting as a purchasing agent for other intermediaries in Shanxi, and through limited sales of diesel and gasoline at two retail gas stations, each located at the Company's facilities. The Company seeks to continue to expand its customer base and distribution platform through the utilization of its large storage capacity, which allows the Company the flexibility to take advantage of pricing, supply and demand fluctuations in the marketplace.

For further information on Longwei Petroleum Investment Holding Limited, please visit http://www.longweipetroleum.com. You may register to receive Longwei Petroleum Investment Holding Limited's future press releases or request to be added to the Company's distribution list by contacting Dave Gentry at info@redchip.com.

Forward-Looking Statements

Certain statements contained herein constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations, estimates and projections about Longwei's industry, management's beliefs and certain assumptions made by management. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. Because such statements involve risks and uncertainties, the actual results and performance of the Company may differ materially from the results expressed or implied by such forward-looking statements. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. Longwei's operations are conducted in the PRC and, accordingly, are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environment and foreign currency exchange. The Company's results may be adversely affected by changes in the political and social conditions in the PRC and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation. Other potential risks and uncertainties include but are not limited to the ability to procure, properly price, retain and successfully complete projects, and changes in products and competition. Unless otherwise required by law, the Company also disclaims any obligation to update its view of any such risks or uncertainties or to announce publicly the result of any revisions to the forward-looking statements made here. Readers should review carefully reports or documents the Company files periodically with the Securities and Exchange Commission.