Andatee China Marine Fuel Services Reports Third Quarter Financial Results

Andatee China Marine Fuel Services Reports Third Quarter Financial Results

DALIAN, China, Nov. 14, 2013 (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 unaudited financial
results for the third quarter ended September 30, 2013.

Third Quarter 2013 Highlights

  *Revenue in the third quarter of 2013 was $61.5 million, a 95% increase
    from the second quarter of 2012
  *Gross profit increased around 6900% year over year to $4.9 million as
    compared to $0.07 million in the same period of 2012, while gross profit
    margin during the quarter improved 780 base points year over year to 8%
    from 0.2%
  *Operating income in the third quarter of 2013 was approximately $1.0
    million, a 159% increase from the corresponding period in 2012
  *The Company ended the quarter with cash balance of approximately $11.3
    million and restricted cash of $69.3 million.

"We are excited to report a strong quarter to our shareholders," commented Mr.
Fengbin An, Chairman & CEO of Andatee Marine Fuel Services Corporation, "Our
strong focus on wholesaler business as well as continuing effort to enhance
our top line and bottom line growth are the main causes of our strong
financial performance during the quarter. Recently, we are beginning to see
some noticeable improvement in terms of shareholder confidence and interests.
Going forward, the management will continue to strive to build our shareholder
value by delivering solid financial performance," he concluded.

Third Quarter of 2013 Results

Revenue increased by $30 million, or 95%, from $31.5 million for the third
quarter ended September 30, 2012 to $61.5 million for the third quarter ended
September 30, 2013. The increase in the Company's revenue was mainly due to
the increase in sales volume. The increase in our sales volume was primarily
driven by increased customer demand for our 180CST, #1, #2 and #4 blended fuel
oil which has a relatively competitive market price targeting a broad range of
fishing boat and cargo vessel customers. Among our total sales volume in the
third quarter of 2013, approximately 25.5% was from sales of our 180CST fuel
oil, about 28.5% was from sales if our #1 fuel oil, about 20.1% was from sales
of our #2 fuel oil and about 10.3% was from sales of our #4 fuel oil. On the
other hand, among our total sales volume for the nine months ended September
30, 2013, approximately 16.1% was from sales of our 180CST fuel oil, about
15.1% was from sales of our #1 fuel oil and about 45.6% was from sales of our
#4 fuel oil.

Cost of revenues increased by $25.2 million, or 80%, from $31.4 million for
the third quarter ended September 30, 2012 to $56.6 million for the third
quarter ended September 30, 2013 primarily due to increased sales volume from
39,533 tons for the third quarter ended September 30, 2012 to 121,573 tons for
third quarter ended September 30, 2013.

Gross profit increased by $4.83 million, or 6389%, to $4.9 million for the
quarter ended September 30, 2013 as compared to $75,700 in the quarter ended
September 30, 2012. As a percentage of revenues, our gross profit margin was
8% and 0.2% for the third quarter of 2013 and 2012, respectively.

Total operating expenses from continuing operations for the third quarter of
fiscal 2013 were $3.9 million, an increase of 116.7% from $1.8 million in the
prior year period.

Selling expenses increased by $35,337, or 11%, from $332,279 for the third
quarter of 2012 to $367,616 in the third quarter of 2013. This increase is
mainly due to our increased sales promotion efforts to target large
wholesalers during third quarter of 2013 in order to bulk sales fuel oils to
them. As a percentage of revenues, selling expenses decreased from 1.1% for
the third quarter of 2012 to 0.6% for the third quarter of 2013.

General and administrative expenses increased by $2.11 million, or 135%, from
$1.43 million for the third quarter of 2012 to $3.54 million for the third
quarter of 2013. The increase was caused by increases in the depreciation
expense, bad debt reserves, professional service fees, consulting fees and
stock-based compensation expense. As a percentage of revenues, general and
administrative expenses increased from 4.5% for the third quarter of 2012 to
5.8% for the third quarter of 2013.

Interest expense decreased by $1.27 million, from $2 million for the third
quarter ended September 30, 2012 to $0.74 million for the third quarter ended
September 30, 2013. The decrease in interest expense was due to amortization
of prepaid interest expense incurred on the bank acceptance bills and
short-term bank loans for the three months ended September 30, 2013.

Net loss attributable to the Company decreased by $2.44 million, from a net
loss of $2,983,148 for the third quarter ended September 30, 2012 to net loss
of $542,859 for the third quarter ended September 30, 2013. The decrease in
net loss was mainly the result of increase in sales revenue and gross profit
margin, decrease in unit cost and interest expense, offset by increased
operating expense for the period indicated.

Financial Condition As of September 30, 2013, the Company had cash balance of
approximately $11.3 million, and an addition to $69.3 million in restricted
cash.

About Andatee China Marine Fuel Services

Andatee China Marine Fuel Services Corporation is a leading independent
operator engaged in the production, storage, distribution, and trading of
blended marine fuel oil for cargo and fishing vessels in 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, Zhejiang Provinces and Shanghai area. Additional information about
the Company is available via the Company filing with The Securities Exchange
Commission at www.sec.gov.

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 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 acquisitions in
various markets, 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.

ANDATEE CHINA MARINE FUEL SERVICES CORPORATION. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
                                                              
                                                September      December
                                               30, 2013      31, 2012
                                                            
ASSETS                                                        
Current assets                                                
Cash and cash equivalents                       $11,274,002 $1,625,705
Restricted cash                                 69,327,486     9,173,002
Accounts receivable, net                        40,187,445     18,220,089
Inventories, net                                37,670,456     9,302,913
Advances to suppliers                           17,257,774     16,387,613
Deposits for land use rights                    4,628,121      698,291
Prepaid expense and other current assets        3,854,409      558,505
Deferred tax assets                             672,848        840,540
Total current assets                             184,872,541    56,806,658
                                                            
Property, plant and equipment, net              51,958,090     40,880,091
Construction in progress                        1,477,866      12,860,195
Equity investment                               1,332,824      --
Intangible assets, net                          9,392,615      8,953,602
Goodwill                                        1,245,594      1,213,036
                                                            
Total assets                                     $250,279,530 $120,713,582
                                                            
LIABILITIES AND EQUITY                                        
                                                            
Current liabilities                                           
Short-term bank borrowings                      $27,703,540  $9,314,247
Bank note payable                               117,880,190    19,679,104
Accounts payable and accrued liabilities        24,540,298     8,367,697
Advances from customers                         3,588,015      8,472,233
Loan from third parties                         2,365,393      9,413,436
Related party loans payable                     2,985,843      509,255
Taxes payable                                   6,642,679      2,719,517
Other liabilities                               3,736,206      1,777,089
Total current liabilities                        189,442,163    60,252,578
                                                            
Warrant liability                                363,225        --
                                                            
Commitments and contingencies                                 
                                                            
Equity                                                        
Common stock, $0.001 par value; 50,000,000
shares authorized; 9,860,159 and 9,610,159
shares issued; 9,768,967 and 9,518,967 shares    9,860          9,610
outstanding as of September 30, 2013, and
December 31, 2012,respectively
Treasury stock, at cost; 91,192 shares          (497,693)      (497,693)
Additional paid-in capital                      30,503,899     29,888,556
Accumulated other comprehensive income          5,358,724      4,297,827
Retained earnings                               18,637,401     19,513,573
Statutory reserve                               4,010,828      3,421,960
Total stockholders' equity of the Company        58,023,019     56,633,833
Noncontrolling interest                         2,451,123      3,827,171
Total equity                                     60,474,142     60,461,004
                                                            
Total liabilities and equity                     $250,279,530  $120,713,582
                                                              

                                                                  
ANDATEE CHINA MARINE FUEL SERVICES CORPORATION. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(LOSS)
                                                                  
                                                                    Six months
               Three months ended         Nine months ended           ended June
              September 30,            September 30,              30,
              2013         2012          2013          2012          2013
                                                             
Revenues       $61,564,873 $31,524,045  $190,962,563 $139,883,552 $
                                                                       129,397,690
Cost of         56,652,979   31,448,345    178,635,410   133,980,293   121,982,431
revenues
Gross profit    4,911,894    75,700        12,327,153    5,903,259     7,415,259
                                                             
Operating                                                      
expenses
Selling        367,616      332,279       1,184,647     1,288,733     817,031
expenses
General and
administrative  3,547,780    1,432,991     7,684,547     3,838,453     4,136,767
expenses
Total operating 3,915,396    1,765,270     8,869,194     5,127,186     4,953,798
expenses
                                                             
Income from     996,498      (1,689,570)   3,457,959     776,073       2,461,461
operations
                                                             
Other income                                                   
(expense)
Interest       58,744       217,141       283,792       344,899       225,048
income
Interest       (737,667)    (2,014,360)   (2,818,881)   (4,654,981)   (2,081,214)
expense
Income (loss)
from equity     12,418       --           28,768        --           16,350
investment
Change in fair
value of        (270,539)    --           (260,389)     --           10,150
warrants
Other income   (193,101)    (68,024)      (193,270)     221,848       (169)
(expense)
Total other
income          (1,130,145)  (1,865,243)   (2,959,980)   (4,088,234)   (1,829,835)
(expense)
                                                             
Income (loss)
before income   (133,647)    (3,554,813)   497,979       (3,312,161)   631,626
tax provision
                                                             
Provision for
Income Taxes    408,053      (496,583)     877,307       (459,163)     469,254
(benefit)
                                                             
Net income      (541,700)    (3,058,230)   (379,328)     (2,852,998)   162,372
(loss)
Less: net loss
attributable to 1,159        (75,082)      (92,025)      (245,167)     (93,184)
noncontrolling
interest
Net income
(loss)
attributable to
Andatee China   $(542,859)  $(2,983,148) $(287,303)   $(2,607,831) $255,556
Marine Fuel
Services
Corporation
                                                             
Comprehensive                                                  
income (loss)
Net loss      (541,700)    (3,058,230)   (379,328)     (2,852,998)   
Foreign
currency        (115,317)    (201,429)     1,499,734     75,234        1,615,051
translation
adjustment
Comprehensive  (657,017)    (3,259,659)   1,120,406     (2,777,764)   
income (loss)
Less: foreign
currency
translation
adjustment      (24,556)     107,555       (316,411)     (62,530)      (291,855)
attributable to
non-controlling
interest
Comprehensive
income (loss)
attributable to
Andatee China   (632,461)    (3,367,214)   1,436,817     (2,715,234)   1,323,196
Marine Fuel
Services
Corporation
                                                             
                                                             
Basic and
diluted
weighted        9,860,159    9,518,967     9,715,858     9,518,967     9,642,103
average shares
outstanding
Basic and
diluted net     $(0.06)     $(0.31)      $(0.03)      $(0.27)      $0.03
earnings (loss)
per share
                                                                  

                                                                
ANDATEE CHINA MARINE FUEL SERVICES CORPORATION. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                                
                                                    Nine months ended
                                                   September 30,
                                                   2013         2012
                                                              
Cash flows from operating activities:                           
Net income loss                                     $(379,328)  $(2,852,998)
Adjustments to reconcile net loss to net cashused              
in operating activities:
Depreciation                                        1,813,675    1,343,388
Amortization                                        393,147      262,740
Bad debt provision                                  2,951,205    305,534
Provision for inventory reserve                     139,549      --
Deferred tax provision (benefit)                    187,901      (515,904)
Amortization of stock-based compensation to          356,667      --
consulting firm
Amortization of stock-based compensation to          136,500      
directors
Income from equity investment                       (28,768)     --
Change in fair value of warrants                    260,389      --
Changes in operating assets and liabilities                    
Accounts receivable                                 (23,769,140) 3,797,214
Inventories                                         (27,909,845) (14,688,047)
Settlement receivable                               --          
Advances to suppliers                               (819,909)    12,066,600
Prepaid expense and other current assets            (3,409,281)  (3,470,866)
Accounts payable and accrued liabilities            16,851,041   (11,027,246)
Advances from customers                             (5,048,428)  7,775,633
Taxes payable                                       3,802,579    (2,212,452)
Other liabilities                                   1,151,546    1,043,416
Net cash used in operating activities                (33,320,502) (8,172,988)
                                                              
Cash flows from investing activities                            
Equity investment in unconsolidated entity          (1,287,581)  --
Additions to construction in progress and property   (88,554)     (588,945)
and equipment
Purchase of land use rights                         (4,452,134)  --
Cash paid for acquiring non-controlling interest    (1,722,140)  --
Refunds of deposits                                            643,368
Net cash (used in) provided by investing activities  (7,550,410)  54,423
                                                              
Cash flows from financing activities                            
Proceeds from short term loans                     33,718,535   3,283,865
Repayment of short term loans                      (15,803,451) (5,809,915)
Proceeds from bank notes                           128,011,331  89,595,832
Repayment of bank notes                            (31,545,741) (91,174,613)
Restricted cash, net                               (59,167,769) 1,162,616
Advance from (Repayment of) loan to unrelated       (7,210,455)  14,665,815
party
Proceeds of loan from related party                2,354,493    3,112,687
Net cash provided by financing activities            50,356,942   14,836,287
                                                              
Effect of exchange rate changes on cash and cash     162,267      31,076
equivalents
                                                              
Net decrease in cash and cash equivalents            9,648,297    6,748,798
                                                              
Cash and cash equivalents, beginning of period       $1,625,705  $3,493,015
                                                              
Cash and cash equivalents, end of period             $11,274,002 $10,241,813
                                                              
Supplemental cash flow information:                             
Interest paid                                      $2,593,721  $4,653,830
Income taxes paid                                  $316,835    $491,902
                                                                

CONTACT: For more information, please contact:
        
         Company Contact:
         Mr. Hao Wang
         Chief Financial Officer
         Andatee China Marine Fuel Services Corporation
         Phone: +86-411-8360-4683
 
Press spacebar to pause and continue. Press esc to stop.