Andatee China Marine Fuel Services Corporation Reports Fiscal Year 2013 Earnings Results

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| Source: Andatee China Marine Fuel Services Corporation

BEIJING, March 31, 2014 (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 financial results for the fourth quarter and fiscal year 2013.

Fiscal Year 2013 Financial Highlights

  • Total sales in 2013 increased by 19.42% to $273.3 million from $228.8 million in 2012
  • Gross profit in 2013 increased by 12.8% to $16.1 million from $14.3 million in 2012. Gross margin remained virtually unchanged at 5.9% and 6.2% in 2013 and 2012, respectively
  • Income from operations in 2013 was $6.55 million as compared to $7.28 million in 2012
  • Net loss was $1.01 million mainly due to a goodwill impairment of $1.2 million, as compared to net profit of $1.64 million in 2012

Mr. Wang Hao, Chairman and Chief Executive Officer of Andatee China Marine Fuel Services Corporation, commented, "In fiscal year 2013, despite the weakness in global economy, we were able to accomplish a nearly 20% top line growth in the marine fuel supplying market by expanding our distribution network, increasing our share of retail sales and adding more products offerings. The Company continues to maintain its position as a leading marine fuel supplier along the coast of East China. Our net loss was mainly the result of increased general and administrative expense, goodwill impairment loss and increased income tax expense, among which the goodwill impairment accounted for $1,234,709."

"Going forward, we expect to grow our business for higher revenue growth as well as higher profitability. In the meantime, we intend to begin implementing various cost control measures in our existing business lines with the aim of improving our margins and achieving profitability in 2014 and beyond."

About Andatee China Marine Fuel Services Corporation, Inc.

Andatee China Marine Fuel Services Corporation, through its subsidiaries, engages in the production, storage, distribution, and trading of blended marine fuel oil for cargo and fishing vessels in the People's Republic of China. It also produces customer specific products using its proprietary blending technology. The company sells its products through distributors to retail customers in Tianjin City, Liaoning, Shandong, Jiangsu, and Zhejiang Provinces. Andatee China Marine Fuel Services Corporation is based in Dalian, the People's Republic of China.

Safe Harbor Statement

This press release contains certain statements that may include "forward-looking statements." All statements other than statements of historical fact included herein are "forward-looking statements." These forward-looking statements are often identified by the use of forward-looking terminology such as "believes," "expects" or similar expressions, involving known and unknown risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. These forward-looking statements are based upon our current expectations and projections about future events and generally relate to our plans, objectives and expectations for the development of our business. Although management believes that the plans and objectives reflected in or suggested by these forward-looking statements are reasonable, all forward-looking statements involve risks and uncertainties and actual future results may be materially different from the plans, objectives and expectations expressed in this press release. Accordingly, investors should not place any reliance on forward-looking statements as a prediction of actual results. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including the risk factors discussed in the Company's periodic reports that are filed with the Securities and Exchange Commission and available on the SEC's website (http://www.sec.gov). All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these risk factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.

ANDATEE CHINA MARINE FUEL SERVICES CORPORATION. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
     
  For the years ended December 31,
  2013 2012
     
Revenues $273,260,811 $228,813,813
Cost of revenues 257,129,767 214,517,593
Gross profit 16,131,044 14,296,220
     
Operating expenses    
Selling expenses 1,081,253 1,341,203
General and administrative expenses 7,267,742 5,670,875
Goodwill impairment loss 1,234,709  -- 
Total operating expenses 9,583,704 7,012,078
     
Income from operations 6,547,340 7,284,142
     
Other income (expense)    
 Interest income 227,174 464,478
 Interest expense -5,442,725 -5,942,231
 Income from equity investment  41,639  -- 
 Change in fair value of warrants -187,851  -- 
 Other income (expense) -136,960 306,714
Total other expense -5,498,723 -5,171,039
     
Income before income tax provision 1,048,617 2,113,103
     
Provision for income taxes  2,269,865 703,138
     
Net income (loss)  -1,221,248 1,409,965
Less: net loss attributable to noncontrolling interest -209,181 -233,731
Net income (loss) attributable to Andatee China Marine Fuel Services Corporation  $ (1,012,067) $1,643,696
     
Comprehensive income (loss)    
Net income (loss) -1,221,248 1,409,965
Foreign currency translation adjustment 2,000,126 447,735
Comprehensive income  778,878 1,857,700
Less: comprehensive loss attributable to non-controlling interest 264,703 209,142
Comprehensive income attributable to Andatee China Marine Fuel Services Corporation 1,043,581 2,066,842
     
Weighted average number of shares:    
Basic 9,857,086 9,610,159
Diluted 9,870,430 9,610,159
     
Earnings (loss) per share:    
Basic  $ (0.10) $0.17
Diluted  $ (0.10) $0.17
     
 
 
ANDATEE CHINA MARINE FUEL SERVICES CORPORATION. AND SUBSIDIARIES
 CONSOLIDATED BALANCE SHEETS
     
  As of December 31,
  2013 2012
     
ASSETS    
Current assets    
Cash and cash equivalents $22,638,820 $1,625,705
Restricted cash 99,659,597 9,173,002
Accounts receivable, net 45,818,721 18,220,089
Inventories, net 3,893,530 9,302,913
Advances to suppliers, net 25,930,533 16,387,613
Deposits for land use rights 720,084 698,291
Deferred financing costs, net 4,373,603 129,555
Other current assets 517,320 428,950
Deferred tax assets  --  840,540
Total current assets 203,552,208 56,806,658
     
Property, plant and equipment, net 54,292,903 40,880,091
Construction in progress 17,781,162 12,860,195
Intangible assets, net 16,289,315 8,953,602
Equity investment 1,351,428  -- 
Goodwill  --  1,213,036
Total assets $293,267,016 $120,713,582
     
LIABILITIES AND EQUITY    
     
Current liabilities    
Short-term bank borrowings $27,821,419 $9,314,247
Bank note payable 191,257,528 19,679,104
Accounts payable and accrued liabilities 3,156,079 8,367,697
Advances from customers 1,693,875 8,472,233
Loan from third parties 98,193 9,413,436
Related party loans payable 1,595,594 509,255
Taxes payable 6,254,057 2,719,517
Other liabilities 1,149,298 1,777,089
Total current liabilities 233,026,043 60,252,578
     
Warrant liability 290,687  -- 
Total liabilities 233,316,730 60,252,578
     
Commitments and contingencies    
     
Equity    
Common stock, $0.001 par value; 50,000,000 shares authorized; 10,255,813 and 9,610,159 shares issued; 10,164,621 and 9,518,967 shares outstanding  10,256 9,610
Treasury stock, at cost; 91,192 shares (497,693) -497,693
Additional paid-in capital 29,998,994 29,888,556
Accumulated other comprehensive income 6,206,460 4,273,238
Retained earnings 17,990,881 19,513,573
Statutory reserve 3,932,585 3,421,960
Total stockholders' equity of the Company 57,641,483 56,609,244
Noncontrolling interest 2,308,803 3,851,760
Total equity 59,950,286 60,461,004
Total liabilities and equity $293,267,016 $120,713,582
     
     
 
ANDATEE CHINA MARINE FUEL SERVICES CORPORATION. AND SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF CASH FLOWS
     
  For the years ended December 31,
  2013 2012
     
Cash flows from operating activities    
Net (loss) income   $ (1,221,248) $1,409,965
Adjustments to reconcile net income(loss) to net cash     
used in operating activities:    
Depreciation 2,122,918 1,826,803
Amortization 476,809 483,205
Bad debt provision 522,040 543,798
Change in inventory reserve -30,240 46,731
Deferred tax provision (benefit) 855,557 -754,722
Amortization of stock-based compensation to consulting firm 425,000  -- 
Amortization of stock-based compensation to directors 102,376  -- 
Income from equity investment -41,639  -- 
Goodwill impairment 1,234,709  -- 
Change in fair value of warrants 187,851  -- 
Changes in operating assets and liabilities:    
Accounts receivable -27,083,195 1,610,536
Inventories 5,656,209 7,546,758
Advances to suppliers -9,075,970 -307,837
Other current assets 221,303 3,906,267
Accounts payable and accrued liabilities -6,578,103 -9,338,416
Advances from customers -6,951,641 -4,946,044
Taxes payable 3,405,030 -1,022,057
Other liabilities 212,845 -1,572,386
Net cash used in operating activities -35,559,389 -567,399
     
Cash flows from investing activities    
Acquisition of equity method investee -1,292,303  -- 
Additions to construction in progress and property and equipment -18,563,989 -859,163
Addition to intangible assets -8,623,375 -1,722,815
Proceeds from termination of land use right  --  1,290,662
Proceeds from termination of leasehold right 1,373,072  -- 
Acquisition of non-controlling interest -1,728,455  -- 
Notes receivable  --  1,332,614
Net cash (used in) provided by investing activities -28,835,050 41,298
     
Cash flows from financing activities    
 Proceeds from short-term loans 33,842,178 35,079,384
 Repayments of short-term loans -15,861,401 -30,051,938
 Proceeds from bank notes 281,182,457 96,773,170
 Repayments of bank notes -112,430,337 -122,632,230
 Restricted cash, net -89,033,196 13,556,969
 Deferred financing costs -4,185,143 -129,508
 (Repayment) proceeds of loan from unrelated parties -9,484,694 7,823,556
 Proceeds (repayment) of loans from related parties 1,055,754 -1,795,160
Net cash provided by (used in) financing activities 85,085,618 -1,375,757
     
Effect of exchange rate changes on cash and cash equivalents 321,936 34,548
     
Net increase (decrease) in cash and cash equivalents 21,013,115 -1,867,310
     
Cash and cash equivalents, beginning of year $1,625,705 $3,493,015
     
Cash and cash equivalents, end of year $22,638,820 $1,625,705
     
Supplemental cash flow information    
 Interest paid $9,750,500 $5,063,860
 Income taxes paid $678,374 $2,323,632
 Transfer from construction-in-progress to fixed assets $12,413,981  $ -- 
 Capitalized interest expense $655,438  $ -- 
     
Thomas Yang
Andatee Marine Fuel Services Corporation Limited
Unit C, No. 68 West Binhai Road,
Xigang District, Dalian Liaoning, China (map)
Phone: 011-86411-8240-8219
Facsimile: 011-86411-8368-8835
Website: www.andatee.com