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Pingtan Marine Enterprise Ltd. Reports Financial Results For The First Quarter Ended March 31, 2014 - Valley News Live - KVLY/KXJB - Fargo/Grand Forks

Pingtan Marine Enterprise Ltd. Reports Financial Results For The First Quarter Ended March 31, 2014

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SOURCE Pingtan Marine Enterprise Ltd.

Company to Hold Conference Call on Thursday, May 8, 2014, at 8:30 AM ET

Company Reiterates 2014 net income guidance of between $80 and $85 million

FUZHOU, China, May 7, 2014 /PRNewswire-FirstCall/ -- Pingtan Marine Enterprise Ltd. (Nasdaq: PME), ("Pingtan," or the "Company") a global fishing company based in the People's Republic of China (PRC), today announced its financial results for the first quarter ended March 31, 2014.

First Quarter 2014 Financial Highlights (all results are compared to prior year period)

  • Revenue from continuing operations ("fishing business") increased 233.4% to $65.6 million from $19.7 million, primarily due to increases in sales volume and unit selling price.
  • Gross profit increased 347.1% to $24.0 million from $5.4 million, and gross margin was 36.7% compared to 27.3%, due to an increase in unit selling price, change in product mix and tighter control on cost of revenue.
  • Net income from the fishing business increased 393.1% to $21.7 million, or $0.27 per diluted share, from $4.4 million, or $0.06 per diluted share. 

First Quarter 2014 Operation Highlights

  • In January 2014, the Company entered into a strategic cooperation framework with China Co-op (Hainan) Industry Development Co., Ltd. As part of this agreement, the two companies will jointly construct a fish processing plant and the Company's fishing products will then be sold to China Co-op's numerous supermarket locations across China.
  • During the first quarter of 2014, the 66 fishing vessels the Company added in June and September 2013 operated at full capacity after a run-in period on water.

Mr. Xinrong Zhuo, Chairman and CEO of the Company, commented, "We are pleased to have achieved significant growth in revenue and net income during the first quarter of 2014, which was a positive result from our fleet expansion plan implemented throughout 2013.  We expect to increase our production during 2014 to take advantage of a steadily increasing consumer demand in China.   In December 2013, we further expanded our fleet to 126 vessels with the addition of the 25-year exclusive operating license rights for 20 new fishing drifters.  These vessels completed their initial run-in period (vessels placed into sea for testing), are fully licensed to fish in Indian and Indonesian waters, and are now operating at full capacity.  At full operation, each of our vessels are capable of harvesting 900 to 1,000 tons of fish. We expect that the expansions of our fleet will continue to increase our fish harvest volume and revenue.  We are also excited about the strategic cooperation with China Co-op and anticipated to work jointly on the construction of a fish processing plant in the coming months. Our management remains dedicated to delivering on our financial goals for the year while also leveraging a strong infrastructure for growth well into the future."

First Quarter 2014 Selected Financial Highlights (A)

($ in millions, except per share data)

Three Months ended March 31,


2014

2013

Fishing Business (continuing operations)



Revenue

$65.6

$19.7

Cost of Revenue

41.5

14.3

Gross Profit

24.0

5.4

Gross Profit Margin

36.7%

27.3%

Net Income from Fishing Business

21.7

4.4

Basic and Diluted Weighted Average Shares

79.1

79.1

EPS (from continuing operations)(in $)

$0.27

$0.06




Balance Sheet Highlights





3/31/2014

(Unaudited)

12/31/2013

(Audited)

Cash and Cash Equivalents



$26.0

$8.2

Total Current Assets



55.2

28.8

Total Assets



377.4

357.9

Total Current Liabilities



52.8

51.2

Total Long-term Debt, net of current portion



52.0

54.5

Total Liabilities



104.7

105.7

Shareholders' Equity



272.7

252.2

Total Liabilities and Shareholders' Equity



377.4

357.9

Book Value Per Share (in $)



$3.45

$3.19






(A) Represents the consolidation retrospectively restated as if Pingtan Marine Enterprise Ltd. (formerly known as China Growth Equity Investment Ltd.) completed its merger with China Dredging Group Co., Ltd. and the share purchase of Merchant Supreme Co., Ltd. on January 1, 2013 rather than on February 25, 2013.

Consolidated Financial and Operating Review
Revenues
Revenues from the fishing business, sales of frozen fish and other marine catches for the three months ended March 31, 2014, increased by 233.4% to $65.6 million from $19.7 million for the same period in 2013. The increase was primarily due to higher sales volume as a result of the addition of vessels acquired in the past twelve months, in addition to increases in unit selling price.

Gross Margin
The Company's gross margin for its fishing business increased to 36.7% for the three months ended March 31, 2014, from 27.3% in the prior year period.  The increase was the result of an increase in unit selling price, change in product mix and a tighter control on cost of revenue.

Selling, General & Administrative Expenses
For the three months ended March 31, 2014, total selling, general and administrative expenses for the fishing business was $1.3 million, or 2.0% of revenue, compared to $0.5 million, or 2.5% of revenue, in the prior year period.

Net Income
Net income from the fishing business for the three months ended March 31, 2014 was $21.7 million, or $0.27 per basic and diluted share, compared to $4.4 million, or $0.06 per basic and diluted share, in the same period of 2013. The increase was primarily due to the same reasons described above.

Outlook for 2014
Based on its current fleet capacity, strong demand for fishing products in China and continued efforts in building market share, the Company reiterates the 2014 net income guidance of between $80 and $85 million

Conference Call Details
Pingtan also announced that it will discuss financial results in a conference call on Tuesday, May 8, 2014, at 8:30 AM ET.
The dial-in numbers are:
Live Participant Dial In (Toll Free): 877-407-0310
Live Participant Dial In (International): 201-493-6786

To listen to the live webcast, please go to http://www.ptmarine.com and click on the conference call link at the top of the page, or go to: http://ptmarine.equisolvewebcast.com/q1-2014. This webcast will be archived and accessible through the Company's website for approximately 30 days following the call.

About Pingtan Marine
Pingtan is a global fishing company, engaging in ocean fishing through its wholly-owned subsidiary, Fujian Provincial Pingtan County Ocean Fishing Group Co., Ltd., or Pingtan Fishing.  Pingtan Fishing primarily engages in ocean fishing with many of its self-owned vessels operating within the Indian Exclusive Economic Zone and the Arafura Sea of Indonesia. Pingtan Fishing is a growing fishing company and provider of high quality seafood in the PRC.

Business Risks and Forward-Looking Statements
This press release may contain forward-looking statements that are subject to the safe harbors created under the Securities Act of 1933 and the Securities Exchange Act of 1934. Readers are cautioned that actual results could differ materially from those expressed in any forward-looking statements. In addition, please refer to the risk factors contained in Pingtan's SEC filings available at www.sec.gov, including Pingtan's most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Definitive Proxy Statement. Readers are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date on which they are made. Pingtan undertakes no obligation to update or revise any forward-looking statements for any reason.

CONTACT:
Roy Yu
Chief Financial Officer
Pingtan Marine Enterprise Ltd.
Tel: +86 591 87271753
ryu@ptmarine.net 
INVESTOR RELATIONS:
The Equity Group Inc.
Katherine Yao, Associate
86 10 6587 6435
kyao@equityny.com

PINGTAN MARINE ENTERPRISE LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(IN U.S. DOLLARS)






  For the Three Months Ended
March 31, 











2014


 2013 (A)









Revenue




$     65,582,952


$     19,669,476









Cost of revenue



(41,541,994)


(14,292,134)









Gross profit



24,040,958


5,377,342









Selling and marketing expenses



(670,951)


(194,688)









General and administrative expenses



(620,915)


(301,342)









Operating income



22,749,092


4,881,312









Other income/(expense)






   Interest income



3,424


1,096

   Interest expenses



(1,372,941)


(685,377)

   Subsidy income



524,421


35,387

   Sundry income



89


2,003

   (Loss)/Gain on foreign exchange, net



(223,233)


207,984

Total other expense



(1,068,240)


(438,907)









Income from continuing operations before income taxes

21,680,852


4,442,405









Income tax expense



-


-









Net income from continuing operations



21,680,852


4,442,405









Net income from discontinued operations, net of

   income tax expense



-


9,340,136









Consolidated net income



$     21,680,852


$    13,782,541









Basic and diluted earnings per share






From continuing operations



$          0.27


$          0.06

   From discontinued operations



-


0.11

   Net income



$          0.27


$          0.17








Weighted average number of ordinary shares outstanding




- Basic and diluted



79,055,053


79,055,053













(A) Represents the consolidation retrospectively restated as if Pingtan Marine Enterprise Ltd. (formerly known as China Growth Equity Investment Ltd.) completed its merger with China Dredging Group Co., Ltd. and the share purchase of Merchant Supreme Co., Ltd. on January 1, 2013 rather than on February 25, 2013.

 

PINGTAN MARINE ENTERPRISE LTD. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(IN U.S. DOLLARS)







March 31, 2014


December 31, 2013







(Unaudited)


(A)










Assets








Current assets







Cash




$     26,039,273


$      8,156,599


Accounts receivable


16,601,060


9,133,130


Inventories



11,790,469


9,095,736


Prepaid expenses and deposits


719,383


2,380,874


Other receivables


1,874


11,665

Total current assets



55,152,059


28,778,004










Other assets







Other receivables


1,181,681


1,213,440


Long-term investment


3,378,161


3,468,953


Prepaid fixed asset deposits


-


1,928,700


Prepaid operating license rights


213,220,339


215,381,356


Property, plant and equipment, net


104,451,702


107,178,269

Total other assets



322,231,883


329,170,718










Total assets



$    377,383,942


$    357,948,722










Liabilities and equity





Current liabilities







Accounts payable - third parties


$      2,489,257


$      2,184,964


- related parties


9,051,769


13,807,605


Receipt in advance


-


297,034


Short-term loans



10,808,850


9,085,353


Long-term loans - current portion


24,535,905


20,252,077


Accrued liabilities and other payables


3,542,520


3,851,047


Advance from a director


650,000


-


Deferred income



1,688,115


1,733,485

Total current liabilities


52,766,416


51,211,565
















 

PINGTAN MARINE ENTERPRISE LTD. AND SUBSIDIARIES



CONSOLIDATED BALANCE SHEETS (UNAUDITED) (CONTINUED)


(IN U.S. DOLLARS)










March 31, 2014


December 31, 2013







(Unaudited)


(A)

Other liabilities







Long-term loans, net of current portion


51,959,333


54,499,727

Total other liabilities


51,959,333


54,499,727

Total liabilities



104,725,749


105,711,292













 

Shareholders' equity






Ordinary shares, 225,000,000 shares authorized







with $0.001 per share; 79,055,053 shares issued and







outstanding as of March 31, 2014 and December 31, 2013


79,055


79,055


Statutory reserves


22,410,773


22,410,773


Retained earnings


221,022,364


199,341,512


Accumulated other comprehensive income


29,146,001


30,406,090

Total shareholders' equity


272,658,193


252,237,430










Total liabilities and shareholders' equity


$    377,383,942


$    357,948,722












(A) Represents the consolidation retrospectively restated as if Pingtan Marine Enterprise Ltd.

(formerly known as China Growth Equity Investment Ltd.) completed

its merger with China Dredging Group Co., Ltd. and the share purchase of Merchant Supreme Co., Ltd.

on January 1, 2013 rather than on February 25, 2013.

 

PINGTAN MARINE ENTERPRISE LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(IN U.S. DOLLARS)







For the Three Months Ended March 31,













2014


 2013 (A)










Cash flows from operating activities






Net income




$     21,680,852


$     13,782,541

Discontinued operations, net of tax



-


(9,340,136)

Income from continuing operations



21,680,852


4,442,405










Adjustments to reconcile net income to net







cash provided by operating activities







Depreciation of property, plant and equipment



1,004,698


760,401


Amortization of operating license rights



2,161,017


-










Changes in operating assets and liabilities







Accounts receivable



(7,802,740)


9,300,852


Inventories



(2,969,237)


(527,208)


Prepaid expenses and deposits



1,619,089


392,674


Other receivables



9,603


(7,587,081)


Accounts payable - third parties



365,972


2,250,318


               - related parties



(4,449,061)


5,280,689


Receipt in advance - third parties



(292,855)


417,066


                - related parties



-


(7,964,540)


Accrued liabilities and other payables



(999,575)


641,562

Net cash provided by operating activities from continuing operations



10,327,763


7,407,138










Cash flows from investing activities







Proceeds from deferred income



-


9,401,148


Purchase of property, plant and equipment



(299,428)


(12,868,150)


Refunds from fixed assets deposits



1,901,560


-


Advance to related parties



-


(9,125,403)

Net cash provided by/(used in) investing activities from continuing operations


1,602,132


(12,592,405)










Cash flows from financing activities







Proceeds from short-term loans



8,707,682


9,727,422


Repayment of short-term loans



(6,722,024)


(23,259,126)


Proceeds from long-term loans



3,745,867


-


Advance from a director



650,000


-


Advance from related parties



-


17,609,551

Net cash provided by financing activities from continuing operations



6,381,525


4,077,847




















 

PINGTAN MARINE ENTERPRISE LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (CONTINUED)


(IN U.S. DOLLARS)











  For the Three Months Ended
March 31, 













2014


2013 (A)










Cash flow from discontinued operations






Net cash provided by operating activities from discontinued operations



-


24,068,420

Net cash provided by investing activities from discontinued operations



-


2,405,595

Net cash provided by financing activities from discontinued operations



-


5,017,690

Net cash provided by discontinued operations



-


31,491,705







Net increase in cash


18,311,420


30,384,285






Effect of exchange rate


(428,746)


235,221






Cash at the beginning of period (1)


8,156,599


175,488,715






Cash at the end of period (2)


$     26,039,273


$     206,108,221






Supplemental disclosure of cash flow information:














Cash paid:








Interest paid



$      1,641,419


$       685,377










Supplemental disclosure of non-cash transaction eliminated in above:









Payable for purchase of ship equipment



$        784,825


$                  -











Proceeds from deferred income



$                  -


$      7,550,451











Deposit on setting up Joint Venture netted of







   accounts payable - related party



$                  -


$      6,090,302


(1) Includes cash and cash equivalents of discontinued operations of $nil and $168,627,930 at the beginning of the year in 2014 and 2013, respectively.

 

(2) Includes cash and cash equivalents of discontinued operations of $nil and $200,247,921 as of March 31, 2014 and 2013, respectively.

 

(A) Represents the consolidation retrospectively restated as if Pingtan Marine Enterprise Ltd. (formerly known as China Growth Equity Investment Limited) completed its merger with China Dredging Group Co., Ltd. and the share purchase of Merchant Supreme Co., Ltd. on January 1, 2013 rather than on February 25, 2013.

 

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