Longwei Petroleum Announces Third Quarter Fiscal Year 2010 Financial Results, Highlighted By Record Revenues, a 94.9% Increase in Sales and Adjusted EPS of $0.15 for the Quarter and $0.37 for the Nine-Month Period
The Company Affirms 2010 and 2011 Full Year Guidance
TAIYUAN CITY, China, May 17 /PRNewswire-Asia-Firstcall -- Longwei Petroleum Investment Holding Ltd. (OTC Bulletin Board: LPIH; "Longwei" or the "Company") transports, markets and sells finished petroleum products in the People's Republic of China ("PRC"). Longwei announced its financial results for the third quarter ended March 31, 2010. Summary financial data is provided below (in millions, except EPS and share data):
Third Quarter Highlights
-- Revenues for the fiscal year 2010 third quarter totaled $96.9 million,
up from $49.7 million achieved in the third quarter of 2009,
representing an increase of $47.2 million, or 94.9%
-- Adjusted Net Income for the third quarter increased 99.7% to $13.3
million with Adjusted EPS of $0.15 above and beyond the Adjusted Net
Income of $6.7 million and Adjusted EPS of $0.09 achieved in the same
period a year ago
-- Revenues generated at the Gujiao facility totaled $29.3 million for the
third quarter
-- Revenues generated at the Taiyuan facility totaled $67.6 million for
the third quarter, an increase of 36.0%.
-- The company reaffirms its previously stated guidance for the fiscal
year 2010 financial results projecting Revenue for the fiscal year
ending June 30, 2010 of $310.8 million with Adjusted Net Income of
$40.3 million and GAAP Net Income of $20.3 million. The projection for
Adjusted EPS is $0.45 and GAAP EPS is $0.13, respectively-- The
company reaffirms its previously stated guidance for the fiscal year
2011 financial results projecting Revenue for the fiscal year ending
June 30, 2011 of $494.7 million with Adjusted Net Income of $73.0
million and GAAP Net Income of $57.3 million. The projection for
Adjusted EPS is $0.71 and GAAP EPS is $0.56, respectively
Nine-Months Ended March 31, 2010
-- Revenues for the nine months ended March 31, 2010 totaled $227.5
million up from $147.8 million achieved in the same period a year ago,
an increase of 53.9%
-- Adjusted Net Income for the nine months increased 47.5% to $30.8
million with Adjusted EPS of $0.37
-- Revenues for the first nine months generated at the Gujiao facility
totaled $37.8 million
-- Revenues for the first nine months generated at the Taiyuan facility
totaled $189.7 million, an increase of 28.3% over the nine-month period
a year ago
-- Inventory and Advances to Suppliers (Refinery Partners) for future
inventory purchases increased 77.5% to $87.5 million
Third Quarter Ended
March 31,
2010 2009
---- ----
Revenues $96.9 M $49.7 M
Gross Profit $19.5 M $9.7 M
Adjusted Net Income $13.3 M $6.7 M
GAAP Net Income $12.1 M $6.7 M
Adjusted Basic EPS $0.15 $0.09
GAAP EPS $0.14 $0.09
Nine Months Ended
March 31,
2010 2009
Revenues $227.5 M $147.8 M
Gross Profit $45.1 M $31.3 M
Adjusted Net Income $30.8 M $20.9 M
GAAP Net Income $15.7 M $20.9 M
Adjusted Basic EPS $0.37 $0.27
GAAP EPS $0.08 $0.27
Mr. Cai Yongjun, the Chairman and Chief Executive Officer of Longwei, stated: "Through March 31, 2010 we have generated substantial sales at the Gujiao facility, totaling $37.8 million. Our Gujiao deliveries continue to increase and I am most pleased with the 19% gross margin, an increase of 3% over the prior reporting quarter, generated at the Gujiao facility during this last quarter. We generated our first agency fee revenues at Gujiao during the recent quarter and also benefited from some timely purchases of additional inventory. Additionally, we purchased a significant amount of inventory leading up to the recent price increase announced by the PRC government on April 14, 2010 and should see the full benefit of the price increase during the fourth quarter."
Third Quarter 2010 Results of Operations
Revenues
Revenues for the three months ended March 31, 2010 were $96.9 million as compared to $49.7 million for the three months ended March 31, 2009. The increase of $47.2 million, or 94.9%, was primarily due to sales to new customers, including sales generated by the new Gujiao facility totaling $29.3 million. Additionally, the average sales price per metric ton of product the Company sold has been steadily increasing in recent quarters and as compared to the previous fiscal year, on a year-to-date basis.
Costs of Sales
Costs of sales for the three months ended March 31, 2010 were $77.4 million as compared to $40.0 million for the three months ended March 31, 2009. The increase of $37.4 million, or 93.2%, was primarily due to sales to new customers, including sales generated by the new Gujiao facility. The Company's gross profit was 20.1% and 19.5%, respectively, for the three months ended March 31, 2010 and 2009. The average cost per metric ton of product the Company purchases has been steadily increasing in recent quarters and as compared to the previous fiscal year, on a year-to-date basis. However, we are benefitting from some timely purchases of inventory and are generating slightly higher margins as a result of these purchases.
Operating Expenses
Operating expenses for the three months ended March 31, 2010 amounted to $1.4 million as compared to $0.7 million for the three months ended March 31, 2009. The increase of $0.7 million was primarily due to the increased administrative costs from the Gujiao facility, one-time stock issuances for compensation and an increase in consulting fees paid in cash. Repairs and maintenance expense is likely to increase in future reporting periods as a result of the initial operations of the Gujiao facility.
Net Income
Net income for the three months ended March 31, 2010 was $12.1 million as compared to $6.7 million for the three months ended March 31, 2009, due to the reasons set forth above. In accordance with GAAP, the Company recorded a noncash expense to record the change in the fair value of derivatives. The financial instruments classified as derivatives consisted of stock warrants issued in connection with the October 2009 Financing and 285,714 previously outstanding stock warrants issued in February, 2009. If the noncash adjustment had not been necessary to record, the Company's net income would have been $13.3 million, which would represent net income growth of 99.7% for the three months ended March 31, 2010 as compared to the three months ended March 31, 2009.
Basic and Diluted Income Attributable to Common Shareholders per Share
The Company's basic net income attributable to common shareholders per share was $0.14 and $0.09 for the three months ended March 31, 2010 and 2009, respectively. In accordance with GAAP, the Company recorded a noncash expense to record the change in the fair value of derivatives of $1.2 million for the three months ended March 31, 2010. The financial instruments classified as derivatives consisted of stock warrants issued in connection with the October 2009 Financing and 285,714 previously outstanding stock warrants issued in February, 2009. If the noncash adjustment had not been necessary to record, the Company's net income would have been $13.3 million and basic net income attributable to common shareholders per share would have been $0.15 for the three months ended March 31, 2010. The Company recorded a total of $0.2 million in cash dividends payable to the Investors who participated in the October 2009 Financing for the three months ended March 31, 2010. There was no noncash adjustment for the adjustment to the fair value of the Company's stock warrants during the nine months ended March 31, 2009.
The Company's diluted net income attributable to common shareholders per share was $0.10 and $0.08 for the three months ended March 31, 2010 and 2009, respectively. A total of 25,942,126 shares of common stock are potentially issuable to the holders of the Series A Preferred Stock, the holders of the Investor Stock Warrants and the holders of the Placement Agent Stock Warrants. The Series A Preferred Stock is perpetual in nature and is convertible to common stock on a 1 for 1 basis at any time, and without further cash payments by the Investors. All stock warrants outstanding as of March 31, 2010 are convertible at any time upon payment of $2.255 per warrant by the Investor or can be exercised on a cashless basis subject to a calculation whereby the total shares to be delivered to the Investor will be reduced by the effective exercise cost of the stock warrant.
Nine Months Ended March 31, 2010
Revenues
Revenues for the nine months ended March 31, 2010 were $227.5 million as compared to $147.8 million for the nine months ended March 31, 2009. The increase of $79.7 million, or 53.9%, was primarily due to sales to new customers, including sales generated by the new Gujiao facility totaling $37.8 million. Additionally, the average sales price per metric ton of product the Company sold has been steadily increasing in recent quarters and as compared to the previous fiscal year, on a year-to-date basis.
Costs of Sales
Costs of sales for the nine months ended March 31, 2010 were $182.4 million as compared to $116.6 million for the nine months ended March 31, 2009. The increase of $65.8 million, or 56.5%, was primarily due to sales to new customers, including sales generated at the new Gujiao facility. The Company's gross profit was 19.8% and 21.1%, respectively, for the nine months ended March 31, 2010 and 2009. The average cost per metric ton of product the Company purchases has been steadily increasing in recent quarters and as compared to the previous fiscal year, on a year-to-date basis.
Operating Expenses
Operating expenses for the nine months ended March 31, 2010 amounted to $2.8 million as compared to $2.9 million for the nine months ended March 31, 2009. The decrease of $0.1 million, or 2.5%, was primarily due to the curtailing of administrative costs in order to focus resources on the new Gujiao facility's buildout. Operating expenses for the remainder of the fiscal year ended June 30, 2010 should be more substantial. Repairs and maintenance expense is likely to increase in future reporting periods as a result of the initial operations of the Gujiao facility.
Net Income
Net income for the nine months ended March 31, 2010 was $15.7 million as compared to $20.9 million for the nine months ended March 31, 2009. In accordance with GAAP, the Company recorded a noncash expense to record the change in the fair value of derivatives. The financial instruments classified as derivatives consisted of stock warrants issued in connection with the October 2009 Financing and 2.7 million previously outstanding stock warrants issued in February, 2009 and December, 2007. If the noncash adjustment had not been necessary to record, the Company's net income would have been $30.8 million, which would represent net income growth of 47.5% for the nine months ended March 31, 2010 as compared to the nine months ended March 31, 2009. There was no noncash adjustment for the adjustment to the fair value of the Company's stock warrants during the nine months ended March 31, 2009.
Basic and Diluted Income Attributable to Common Shareholders per Share
The Company's basic net income attributable to common shareholders per share was $0.08 and $0.27 for the nine months ended March 31, 2010 and 2009, respectively. In accordance with GAAP, the Company recorded a noncash expense to record the change in the fair value of derivatives of $15.5 million for the nine months ended March 31, 2010. The financial instruments classified as derivatives consisted of stock warrants issued in connection with the October 2009 Financing and 2.7 million previously outstanding stock warrants issued in February, 2009 and December, 2007. The Company also recorded a noncash adjustment to the net income attributable to common shareholders to reflect a deemed dividend of $8.6 million during the nine months ended March 31, 2010. The deemed dividend is a result of the calculation of the estimated additional compensation awarded to the investors who participated in the October 2009 Financing. The estimated additional compensation is calculated by multiplying the number of shares of common stock that the Series A Preferred Stock is convertible into, or 13,499,274, by the difference between the fair market value of the Company's common on October 29, 2009, or $2.05, less the purchase price of the Series A Preferred Stock, or $1.10 per share. As a result of the Series A Preferred Stock being immediately convertible into common stock, the deemed dividend is a one-time nonrecurring adjustment to earnings per share and does not result in any mark to market adjustment, expense, or adjustment to the Company's basic and diluted income attributable to common shareholders per share in any future reporting period. If these noncash adjustments had not been necessary to record, the Company's net income would have been $30.8 million and basic net income attributable to common shareholders per share would have been $0.37 for the nine months ended March 31, 2010. The Company also recorded a total of $0.4 million in cash dividends payable to the Investors who participated in the October 2009 Financing for the nine months ended March 31, 2010. There was no noncash adjustment for the adjustment to the fair value of the Company's stock warrants or to reflect a deemed dividend during the nine months ended March 31, 2009.
The Company's diluted net income attributable to common shareholders per share was $0.07 and $0.26 for the nine months ended March 31, 2010 and 2009, respectively. A total of 25,942,126 shares of common stock are potentially issuable to the holders of the Series A Preferred Stock, the holders of the Investor Stock Warrants and the holders of the Placement Agent Stock Warrants. The Series A Preferred Stock is perpetual in nature and is convertible to common stock on a 1 for 1 basis at any time, and without further cash payments by the Investors. All stock warrants outstanding as of March 31, 2010 are convertible at any time upon payment of $2.255 per warrant by the Investor or can be exercised on a cashless basis subject to a calculation whereby the total shares to be delivered to the Investor will be reduced by the effective exercise cost of the stock warrant.
Liquidity and Capital Resources
As of March 31, 2010, the Company's current assets were $124.4 million and current liabilities were $27.7 million. Cash and cash equivalents totaled $12.0 million as of March 31, 2010. The Company's shareholders' equity at March 31, 2010 was $140.9 million. The Company had cash (used in) provided by operating activities for the nine months ended March 31, 2010 and 2009 of $(1.7) million and $26.8 million, respectively. The Company used 85.0%, or $11.8 million of the gross proceeds from the October 2009 financing to directly advance a refinery partner for future inventory purchases. Total net advances to suppliers for the nine months ended March 31, 2010 totaled $38.2 million. The Company had net cash used in investing activities of $7.7 million and $25.8 million for the nine months ended March 31, 2010 and 2009, respectively. During the nine months ended March 31, 2010, the Company incurred $7.7 million in costs to refurbish and prepare the Gujiao facility in order for the facility to be fully operational as of January 1, 2010. The Company had net cash provided by financing activities of $13.9 million and $0 for the nine months ended March 31, 2010 and 2009, respectively. The Company closed private placements for $13.8 million and $0.8 million in net proceeds in October and July, 2009, respectively.
Mr. James Crane, Longwei's Chief Financial Officer, stated: "We have exceeded our internal forecasts for the quarterly reporting period ended March 31, 2010. Revenue growth during the third quarter was significant at Gujiao, which generated 41.1% of the revenues generated at Taiyuan in the prior reporting period ending December 31, 2009. Gujiao's success thus far is compelling but growth of 36.0% at Taiyuan is also quite impressive. We are pleased to report solid revenue and earnings growth at both of our facilities."
Financial Outlook for 2010
The company reaffirms its previously stated guidance for the fiscal year 2010 financial results projecting revenue for the fiscal year ending June 30, 2010 of $310.8 million with adjusted net income of $40.3 million and GAAP net income of $20.3 million. The projection for adjusted EPS is $0.45 and GAAP EPS is $0.13, respectively.
The company reaffirms its previously stated guidance for the fiscal year 2011 financial results projecting Revenue for the fiscal year ending June 30, 2011 of $494.7 million with Adjusted Net Income of $73.0 million and GAAP Net Income of $57.3 million. The projection for Adjusted EPS is $0.71 and GAAP EPS is $0.56, respectively.
Conference Call and Webcast
Management will host a conference call to discuss these financial results on Monday, May 17, 2010 at 1:00 p.m. Eastern time (10:00 a.m. Pacific).
To participate in the call please dial (877) 545-1407, or (719) 325-4758 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 4:00 p.m. EDT on May 17, 2010, until 11:59 p.m. EDT on May 31, 2010. The number for the replay is (888) 203-1112, or (719) 457-0820 for international calls; the passcode for the replay is 4537973. 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 (the "Company") is an energy company that, through its subsidiaries, engages in oil and gas operations in the People's Republic of China ("PRC"). Oil and gas operations consist of transporting, marketing and selling finished petroleum products. The Company's headquarters and primary facilities are located in Taiyuan City, Shanxi Province ("Shanxi"). The Company's second facility is located in Gujiao, Shanxi. The Company purchases diesel, gasoline, fuel oil and kerosene (the "Products") from various petroleum refineries in the PRC. The Company is 1 of 3 licensed intermediaries in Taiyuan City 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 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 to large-scale gas stations, coal plants, other power-supply customers and small, independent gas stations. The Company also earns revenue by acting as a purchasing agent for other intermediaries in Shanxi and through the sale of diesel and gasoline at gas stations located at each of the Company's facilities. The sales price and the cost basis of the Company's products are largely dependent on regulations and price control measures instituted and controlled by the PRC government as well as the price of crude oil. The price of crude oil is subject to fluctuation due to a variety of factors, all of which are beyond the Company's control.
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 or 1-800-733-2447, Ext. 104.
About Non-GAAP Financial Measures
This press release contains non-GAAP financial measures for the accounting for the change in the fair value of the Company's warrants under the Financial Accounting Standards Board's Accounting Standards Codification ("ASC") Topic 815-40 and the accounting for a deemed dividend associated with the October 29, 2009 financing under ASC Topic 470, subtopic 20-30-6. The Company believes that these non-GAAP financial measures are useful to investors because they exclude non-cash charges that our management excludes when evaluating the Company's business and makes operating decisions, prepares and revises financial forecasts, measures business performance, and because providing these Non-GAAP financial measures allows for comparison to historical periods. Accordingly, management excludes the change in the fair value of the Company's warrants under ASC 815-40 and the deemed dividend under ASC Topic 470, subtopic 20-30-6, when making operational decisions. The Company believes its investors can utilize these non-GAAP measures for a number of reasons. These non-GAAP measures provide a consistent basis for investors to understand the Company's financial performance in comparison to historical periods. In addition, it allows investors to potentially understand and evaluate the Company's performance using the same methodology and information our management utilizes. Non-GAAP measures are subject to inherent limitations because they do not include all of the expenses or adjustments included under GAAP and because they involve the exercise of judgment of which expenses or adjustments are excluded from the non-GAAP financial measures we make available to investors. However, we believe we are compensating for these limitations by providing the relevant disclosure of the items excluded.
The following tables provide certain non-GAAP financial measures and the related GAAP measures. We also provide reconciliations of these non-GAAP measures to the equivalent GAAP measures. All amounts are U.S. dollars in millions.
Three Months Ended
------------------
March 31,
---------
2010 2009
---- ----
Net Income $12.1 $6.7
----- ---
Add Back: Change in Fair Value of
Derivatives 1.2 -
--- ---
Adjusted Net Income $13.3 $6.7
===== ====
Nine Months Ended
-----------------
March 31,
---------
2010 2009
---- ----
Net Income Attributable to Common
Shareholders $6.7 $20.9
--- -----
Add Back: Deemed Dividends 8.6 -
--- ---
Net Income 15.3 20.9
Add Back: Change in Fair Value of
Derivatives 15.5 -
---- ---
Adjusted Net Income Attributable to
Common Shareholders $30.8 $20.9
===== =====
* The term "adjusted net income" refers to the calculation of these ratios or figures utilizing net income on a Non-GAAP basis whereby the effect of the noncash adjustment for each period presented for the change in fair market value of derivatives is added back to net income in order to calculate the adjusted net income. The adjusted net income figure has been used to calculate the adjusted basic earnings per share. A reconciliation of these calculations is provided in the table above.
** The term "adjusted basic earnings per share" refers to the calculation of these ratios or figures utilizing net income attributable to common shareholders on a Non-GAAP basis whereby the effect of (1) the noncash adjustment for each period presented for the change in fair market value of derivatives is added back to net income attributable to common shareholders in order to calculate the adjusted net income attributable to common shareholders, and (2) the effect of the one-time deemed dividend of $8.6 million, recorded during the three months ended December 31, 2009, is added back to net income attributable to common shareholders, in order to calculate the adjusted basic earnings per share. A reconciliation of these calculations is provided in the table above.
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.
Longwei Petroleum Investment Holding Limited and Subsidiaries
Condensed Consolidated Balance Sheets
March
31,
2010 June 30,
------ --------
2009
---
(In Thousands,
Assets Except Share Data)
-------------------
Current Assets:
(Unaudited) (Audited)
Cash $11,992 $7,308
Accounts Receivable, Net of
Allowance for Doubtful
Accounts of $0 as of March
31, 2010 and $0 as of June
30, 2009 24,925 26,796
Inventories 28,852 13,976
Advances to Suppliers 58,642 35,317
------ ------
Total Current Assets 124,411 83,397
Property, Plant and Equipment,
Net 44,168 36,745
------ ------
Total Assets $168,579 $120,142
======== ========
Liabilities and Shareholders'
Equity
Current Liabilities:
Accounts Payable $1,805 $2,275
Convertible Notes Payable - 800
Warrant Derivative Liability 20,149 -
Taxes Payable 5,770 2,144
----- -----
Total Current Liabilities 27,724 5,219
------ -----
Total Liabilities 27,724 5,219
Commitments and Contingencies
Shareholders' Equity:
Preferred Stock, No Par Value,
86,000,000 Shares Authorized,
0 Issued and Outstanding as
of March 31, 2010 and June
30, 2009 - -
Series A Convertible Preferred
Stock, No Par Value,
14,000,000 Shares Authorized,
11,092,925 and 0 Issued and
Outstanding as of March 31,
2010 and June 30, 2009
(Liquidation Preference of
$12,202,218 as of March 31,
2010) 5,075 -
Common Stock, No Par Value;
500,000,000 Shares
Authorized; 87,552,711 and
81,852,831 Issued and
Outstanding, 13,499,274
Shares Held in Escrow Subject
to Contingent Future Events,
as of March 31, 2010 and June
30, 2009 17,420 11,949
Shares to be Issued - 126
Stock Subscription Receivable - (76)
Deferred Stock Based
Compensation (80) (25)
Additional Paid-in Capital 8,644 2,540
Retained Earnings 99,748 90,519
Other Comprehensive Income 10,048 9,890
------ -----
Total Shareholders' Equity 140,855 114,923
Total Liabilities and
Shareholders' Equity $168,579 $120,142
======== ========
Longwei Petroleum Investment Holding Limited and Subsidiaries
Condensed Consolidated Unaudited Statements of Operations
and Other Comprehensive Income
(In Thousands, Except Share Data)
For the Three Months
Ended
--------------------
March 31,
---------
2010 2009
---- ----
Net Sales $96,899 $49,720
Cost of Sales 77,376 40,049
------ ------
Gross Profit 19,523 9,671
General and Administrative
Expenses 1,440 709
----- ---
Operating Income 18,083 8,962
Change in Fair Value of
Derivatives (1,207) --
Interest Income 5 4
Interest Expense -- (49)
--- ---
Income Before Income Tax
Expense 16,881 8,917
Income Tax Expense (4,784) (2,255)
------ ------
Net Income 12,097 6,662
------ -----
Foreign Currency Translation 25 (150)
--- ----
Comprehensive Income $12,122 $6,512
======= ======
Net Income $12,097 $6,662
------- ------
Preferred Stock Dividends
Paid in Cash (209) --
Preferred Stock Deemed
Dividends -- --
--- ---
Net Income Attributable to
Common Shareholders 11,888 $6,662
====== ======
Earnings Per Common Share
Attributable to Common
Shareholders:
Basic $0.14 $0.09
===== =====
Diluted $0.10 $0.08
===== =====
Weighted Average Common
Shares Outstanding:
Basic 86,160,133 76,213,333
========== ==========
Diluted 113,828,075 81,895,661
=========== ==========
For the Nine Months
Ended
-------------------
March 31,
---------
2010 2009
---- ----
Net Sales $227,496 $147,839
Cost of Sales 182,436 116,588
------- -------
Gross Profit 45,060 31,251
General and Administrative
Expenses 2,847 2,919
----- -----
Operating Income 42,213 28,332
Change in Fair Value of
Derivatives (15,483) -
Interest Income 14 12
Interest Expense (53) (173)
--- ----
Income Before Income Tax
Expense 26,691 28,171
Income Tax Expense (10,964) (7,259)
------- ------
Net Income 15,727 20,912
------ ------
Foreign Currency Translation 158 484
--- ---
Comprehensive Income $15,885 $21,396
======= =======
Net Income $15,727 $20,912
------- -------
Preferred Stock Dividends
Paid in Cash (365) -
Preferred Stock Deemed
Dividends (8,644) -
------ ---
Net Income Attributable to
Common Shareholders 6,718 $20,912
===== =======
Earnings Per Common Share
Attributable to Common
Shareholders:
Basic $0.08 $0.27
===== =====
Diluted $0.07 $0.26
===== =====
Weighted Average Common
Shares Outstanding:
Basic 84,262,503 76,207,737
========== ==========
Diluted 102,166,908 81,408,798
=========== ==========
Longwei Petroleum Investment Holding Limited and Subsidiaries
Condensed Consolidated Unaudited Statements of Cash Flows
For the Nine Months Ended
-------------------------
March 31,
---------
2010 2009
(In Thousands)
--------------
Cash Flows From Operating
Activities:
Net Income $15,727 $20,912
Adjustments to Reconcile Net Income
to Net Cash Provided By Operating
Activities-
Depreciation and Amortization 231 289
Stock Based Compensation 315 -
Change in Fair Value of Derivatives 15,483 -
Accretion of Debt Discount - 637
(Increase) Decrease in Assets-
Accounts Receivable 1,871 (1,777)
Inventories (14,876) 14,791
Advances to Suppliers (23,325) (8,650)
Increase (Decrease) in Liabilities-
Accounts Payable (768) (417)
Taxes Payable 3,626 950
Other Current Liabilities - 21
--- ---
Net Cash (Used in) Provided By
Operating activities (1,716) 26,756
------ ------
Cash Flows From Investing
Activities:
Property Improvements (7,654) (25,844)
------ -------
Net Cash Used in Investing
Activities (7,654) (25,844)
------ -------
Cash Flows From Financing
Activities:
Net Proceeds From Issuance of Series
A Convertible Preferred Stock 13,820 -
Net Proceeds From Issuance of Common
Stock 76 -
--- ---
Net Cash Provided By Financing
activities 13,896 -
------ ---
Effect of Exchange Rate Changes in
Cash 158 73
Increase in Cash 4,684 985
Cash, Beginning of Period 7,308 8,633
----- -----
Cash, End of Period $11,992 $9,618
======= ======
Supplemental Cash Flow Information:
Cash Paid During the Period for
Interest $ - $ -
Income Taxes $7,338 $6,752
Supplemental Schedule of Noncash
Investing and Financing activities:
Common Stock Issued for Services,
Deferred Compensation $370 $ -
Increase to Warrant Derivative
Liability for Fair Value of Stock
Warrants Prior to Conversion to
Common Stock $4,218 $ -
Increase to Common Stock, Par, for
Conversion of Debt $867 $ -
Increase to Common Stock, Par, for
Common Stock Compensation Related
to October 2009 Financing $317 $ -
Initial Fair Value Allocation of
Investor Stock Warrants, to Warrant
Derivative Liability $6,205 $ -
Initial Fair Value Allocation of
Placement Agent Warrants, to
Warrant Derivative Liability $1,122 $ -
Increase to Additional Paid in
Capital, for Beneficial Conversion
Feature $8,644 $ -
Increase to Accounts Payable for
Quarterly Dividends Accrued $365 $ -
Increase to Warrant Derivative
Liability for Cumulative Effect of
Accounting Change $1,557 $ -
This information is intended to be reviewed in conjunction with the Company's filings with the Securities and Exchange Commission, which includes the accompanying notes.
For more information, please contact:
Investor Relations:
Dave Gentry
RedChip Companies, Inc.
Tel: +1-407-644-4256 x104
Email: Dave@redchip.com
http://www.RedChip.com
Alexander Nachman
Specialist
RedChip Companies
500 Winderley Place, Ste. 100
Maitland FL 32751
1.800.REDCHIP x118
407.644.4256 x118
alexn@redchip.com
www.redchip.com
James Crane, Chief Financial Officer
Longwei Petroleum Investment Holding Ltd.
U.S.: +1-617-699-6325
P.R.C.: +86-186-0125-0891
http://www.longweipetroleum.com
