Andatee China Marine Fuel Services Announces Fourth Quarter and Fiscal Year 2009 Financial Results
FY 2009 revenues up 57% to $124.28 million
FY 2009 net income increased 333.8% to $6.4 million, EPS $1.11
DALIAN, China, March 3 /PRNewswire-Asia/ -- Andatee China Marine Fuel Services Corporation (Nasdaq: AMCF), the 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, today announced financial results for the fourth quarter and fiscal year ended December 31, 2009.
Fiscal Year 2009 Highlights
-- Revenue increased 57% to approximately $124.3 million
-- Gross profit increased 234.2% to approximately $14.1 million
-- Income from operations was $9.5 million, up 408.8% year-over-year
-- Net income was $6.4 million representing 333.8% increase year-over-year
-- Earnings per share was $1.11 compared to $0.25 in 2008
-- Completed IPO on Nasdaq GM raising approximately $17.74 million in net
proceeds
Fourth Quarter 2009 Highlights
-- Revenue increased 173% to approximately $39.0 million
-- Gross profit increased to $3.9 million from $(1.1) million in fourth
quarter 2008
-- Income from operations was $6.0 million, up from $(241,936) in fourth
quarter 2008
-- Operating margin was 15.4%
-- Earnings per share was approximately $0.28
"We are pleased with the solid business results we delivered in the fourth quarter and for the full year 2009. This performance is the result of the strong execution of our business strategy as our efforts to expand our sales network into Shandong, Zhejiang and Donggang yielded positive results. As we look to the future, we remain focused on providing the highest quality fuel at competitive prices to build a loyal customer base and to strengthen our brand. Additionally, we expect to continue our expansion into other regions with a focus on the retail market as we move to attain our goal of becoming the leading one-stop-shop marine service depot in China," commented Mr. Fengbin An, Chairman and CEO of Andatee Marine China Fuel Services Corporation. "In addition, we are proud to announce our successful initial public offering on Nasdaq Global Market raising net proceeds of approximately $17.74 million."
Full Year 2009 Results
Revenues for the fiscal year 2009 were $124.28 million, an increase of $45.09 million or approximately 57% as compared to $79.19 million for 2008. This increase was the result of increased volumes sold due to the expansion of the Company's sales network and recovery of demand from downstream industry. Following the 2008 acquisition of the facilities located in Shandong Shidao and Zhejiang Nanlian, Andatee experienced steady sales increase in those two markets.
Total sales volume for fiscal year 2009 was up 88.7% to 240,000 tons, compared to 127,000 tons in fiscal 2008. Sales volume of 4# marine fuel, mainly used by fishing boats, generated by the selling efforts of Xinfa, increased by 21,500 tons, from 6,100 tons sold for the year of 2008 to over 27,600 tons in 2009, and in Nanlian, the volume sales of 2# marine fuel, mainly used by fishing boats, was over 19,000 tons.
The Company expanded and completed construction of facilities in Donggang, resulting in over 20,000 tons of 3# marine fuel to fishing boats of local customers, and contributing to the total increase in sales volume for the year 2009.
In 2009 2# marine fuel represented 7.1% of sales, 3# marine fuel represented 9.5% of sales, 4# marine fuel represented 63.2% of sales, 180CST represented13.1% of sales and 120CST represented 7.1% of sales. In 2008, 3# marine fuel represented 14.6% of sales, 4# marine fuel represented 71.0% of sales, 180CST represented 12.5% of our sales and 120CST represented 1.9% of sales.
2009 Sales organized by product and geographical markets:
Tons %
(in thousands)
Marine Fuel Oil Products
2# 17.18 7.14%
3# 22.81 9.48%
4# 151.93 63.17%
180CST 31.47 13.08%
120CST 17.12 7.12%
Areas
Dalian 91.03 37.85%
Shandong 109.48 45.52%
Donggang 20.16 8.38%
Zhejiang 19.85 8.25%
Gross profit margin was 11.3% for the full year 2009, compared to 5.3% for 2008. The increase in our gross profit margin results primarily from an increase in the sale of higher margin products, change in customer mix and the decrease of raw material purchasing price. Sales to retail customers, which generally contribute higher gross margin, increased from 38% of total sales in 2008 to 43% of sales in 2009 as the result of our expansion and acquisition of retail distribution facilities.
Selling, general and administrative expenses were approximately $4.6 million in 2009 compared to $2.3 million in 2008. The increase was primarily due to increased promotional and advertising activities related to the expansion of the Company's sales network, as well as increased expenses related to our initial public offering and other expenses applicable to becoming a public company.
As a result, income from operations in 2009 was $9.5 million, representing 408.8% increase from $1.9 million last year. Operating margin was 7.6% in 2009 compared to 2.4% in 2008.
Net income for the full year 2009 was $6.4 million, or $1.11 per share, an increase of $333.8% as compared to $1.5 million, or $0.25 per share, for fiscal year 2008.
Net income margin for the full year 2009 was approximately 5.4% compared to approximately 2.3% for the fiscal year 2008.
Financial Condition
As of December 31, 2009, Andatee had $1.5 million in cash and cash equivalents, and approximately $4.0 million in working capital, an increase of 42.9% from $2.8 million in 2008. Stockholders' equity as of December 31, 2009 was $17.6 million, an increase of 58.6% over the $11.1 million recorded as of December 31, 2008.
In 2009, the Company's cash flow from investing activities was $(4.3) million related acquisitions and purchase of property and equipment.
Fourth Quarter 2009 Results
For the fourth quarter 2009, total revenues were approximately $39 million, up 173% from $14.3 million in the fourth quarter of 2008. Gross profit for the fourth quarter of 2009 was $3.9 million, compared to $(1.1) million during the same comparable period. Operating profit was approximately $6 million in the fourth quarter of 2009, compared to $(241,936) during the same period in 2008. Net income for fourth quarter 2009 was $1.7 million or $0.28 per diluted share, compared to $(836,838) million during the same period in 2008.
Business Outlook
China's economy is still showing a strong growth trend and recovery from the 2008 recession, resulting in an increased demand for fuel. The eastern Liaoning Province of Northeast China, where Andatee operates, continues to see increasing demand for marine fuel products to support the fishing and cargo activities in this highly populous region. Going forward, the Company has established a solid plan to expand its footprint to capture the market share in Jiangsu, Fujian, Guangdong and Guangxi province. Additionally, the Company is also well positioned to diversify its product offering to include providing marine port services to its retail customers.
Mr. An commented: "We expect growth for the fiscal year 2010 to remain strong due to the expected further strong growth in the Chinese economy, particularly the Northeast developing region and Eastern seaports. We maintain focused on a business strategy of increasing storage for our products, including potential acquisition targets to expand our reach along the Eastern coast. We continue to maintain focus on capitalizing on the opportunities to meet the growing demand for marine fuel in the region."
About Andatee China Marine Fuel Services
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. Headquartered in the City of Dalian, a key international shipping hub and an international logistics center in Northern China, Andatee maintains operations in Liaoning, Shandong and Zhejiang Provinces in the People's Republic of China.
Andatee China Marine Fuel Services 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), 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. As a result, investors should not place undue reliance on these forward-looking statements. To the extent that any statements made here are not historical, these statements are essentially forward-looking. Forward-looking statements can be identified by the use of words such as "expects," "plans," "will," "may," "anticipates," "believes," "should," "intends," "estimates" and other words of similar meaning. 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 attract and retain management and operational personnel, potential volatility in future earnings, fluctuations in the Company's operating results, PRC governmental decisions and regulation, and existing and future competition that the Company is facing. These forward-looking statements are subject to known and unknown risks and uncertainties that could cause actual events to differ from the forward-looking statements. More information about some of these risks and uncertainties may be found in the Company's filings with the Securities and Exchange Commission under the caption "Risk Factors" in such filings.
For further information, please contact:
Andatee China Marine Fuel Services Corporation
Mr. Wen Tong
Chief Financial Officer
Tel: +86-411-8360-4683
Email: [email protected]
Web: http://www.andatee.com
CCG Investor Relations
Ed Job, CFA
Account Manager
Tel: +86-21-5175-7780 (China)
Tel: +1+646+213+1914 (U.S.)
Email: [email protected]
Web: http://ccgirasia.com
ANDATEE CHINA MARINE FUEL SERVICES CORPORATION
COMBINED AND CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
INCOME
For the year ended December 31,
2009 2008
Revenues $124,277,622 $79,186,659
Cost of revenues 110,201,272 74,974,371
Gross profit 14,076,350 4,212,288
Operating expenses
Selling expenses 3,551,292 1,497,723
General and
administrative expenses 1,029,840 848,366
Total operating expenses 4,581,132 2,346,089
Income from operations 9,495,218 1,866,199
Other income (expense)
Other income -- 154,899
Interest expense (331,739) (605)
Other expense (221,032) (13,981)
Total other income (expense) (552,771) 140,313
Income before income tax provision 8,942,447 2,006,512
Tax provision 2,292,266 527,284
Net income 6,650,181 1,479,228
Net income attributable to the
noncontrolling interest 233,144 --
Net income attributable to the
Company $6,417,037 $1,479,228
Foreign currency translation
adjustment 33,812 329,758
Comprehensive income
attributable to the Company 6,450,849 1,808,986
Comprehensive income
attributable to the
noncontrolling interest 233,144 --
Comprehensive income $6,683,993 $1,808,986
Basic and diluted weighted
average shares outstanding 6,000,000 6,000,000
Basic and diluted net earnings
per share $1.11 $0.25
ANDATEE CHINA MARINE FUEL SERVICES CORPORATION
COMBINED AND CONSOLIDATED BALANCE SHEETS
December 31,
2009 2008
ASSETS
Current assets
Cash and cash equivalents $1,539,009 $4,923,913
Accounts receivable, net 2,515,403 1,518,429
Other receivables 1,307,474 1,015,849
Inventories 13,302,530 4,701,681
Advances to suppliers 7,691,266 2,168,620
Related party receivable 122,667 4,909,643
Deferred expense 150,943 --
Deferred tax assets 112,743 59,448
Total current assets 26,742,035 19,297,583
Property, plant and equipment, net 10,441,246 2,766,905
Construction in progress 632,202 127,952
Intangible assets 2,691,974 2,754,656
Goodwill 1,117,923 1,115,150
Restricted cash -- 8,228,532
Total assets $41,625,380 $34,290,778
LIABILITIES AND EQUITY
Current liabilities
Accounts payable $565,802 $296,349
Short-term loan 10,238,109 2,917,919
Taxes payable 11,001,715 3,518,518
Advances from customers 456,715 1,339,773
Dividends payable 231,861 231,286
Bank notes payable -- 13,422,427
Other payable 287,914 405,235
Total current liabilities 22,782,116 22,131,507
Total liabilities 22,782,116 22,131,507
Commitments and contingencies
Equity
Stockholder's equity of the Company
"Common stock: par value $.001;
50,000,000 shares authorized;
6,000,000 shares issued and
outstanding" 6,000 6,000
Additional paid-in capital 9,533,619 9,533,619
Other comprehensive income 488,640 454,828
Retained earnings 7,543,994 1,126,957
Total stockholders' equity
of the Company 17,572,253 11,121,404
Noncontrolling interest 1,271,011 1,037,867
Total equity 18,843,264 12,159,271
Total liabilities and equity $41,625,380 $34,290,778
ANDATEE CHINA MARINE FUEL SERVICES CORPORATION
COMBINED AND CONSOLIDATED STATEMENTS OF CASH FLOWS
For the year ended December 31,
2009 2008
Cash flows from operating activities:
Net income attributable to the
Company $6,417,037 $1,479,228
Adjustments to reconcile net
income to net cash
provided by operating
activities:
Noncontrolling interest 233,144 --
Depreciation 410,269 91,642
Amortization 69,494 6,414
Bad debt allowance 212,473 135,425
Provision for impairment
loss on construction --
(Gain) loss on disposal of
property, plant and
equipment -- (24,632)
Changes in operating assets and
liabilities:
Accounts receivable (992,664) 1,380,659
Inventories (8,584,537) 3,075,442
Other receivables 713,655 (951,103)
Advances to suppliers (5,514,286) 1,275,859
Related party receivable (122,601)
Prepaid expense (150,862) --
Accounts payable 269,125 (2,974,304)
Salary and accrued benefit
payable -- (23,163)
Advances from customers (885,912) 413,187
Taxes payable 7,417,310 926,926
Other payable 876,391 (1,581,958)
Net cash provided by operating
activities 368,036 3,229,622
Cash flows from investing activities
Consideration for acquisition (2,210,242) --
Cash acquired by acquisition -- 252
Certificate of deposit 1,520,272 (1,493,770)
Purchase of property and
equipment (8,073,606) (55,577)
Construction contracts (503,661) (125,966)
Repayment of related party
receivable 4,919,203
Due from related party -- (4,833,448)
Purchase of intangible assets -- (555,225)
Proceeds on sale of fixed assets -- 143,632
Net cash used in investing
activities (4,348,034) (6,920,102)
Cash flows from financing activities
Proceeds from shareholders -- 4,314,697
Proceeds from short term loans 7,309,001 --
Repayment of short term loans -- (2,585,371)
Collection from (payment to)
escrow account for bank notes 6,724,281 (6,607,059)
Proceeds from bank notes -- 13,214,119
Repayment of bank notes (13,448,562) --
Dividends distribution -- (107,280)
Net cash provided by financing
activities 584,720 8,229,106
Effect of exchange rate on cash 10,374 91,273
Net increase (decrease) in cash and
cash equivalents (3,384,904) 4,629,899
Cash and cash equivalents, beginning
of period $4,923,913 $294,014
Cash and cash equivalents, end of
period $1,539,009 $4,923,913
Supplemental cash flow information:
Cash paid during the year for:
Interest $478,610 $210,080
Income taxes $1,121,660 $176,523
SOURCE Andatee China Marine Fuel Services Corporation
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