Exhibit 99.1

 

 

 

pingtan marine enterprise Reports FINANCIAL RESULTS

for the Third quarter and nine months ended September 30, 2016

 

Company to Hold Conference Call on Wednesday, November 9, 2016, at 8:30 AM ET

 

FUZHOU, China, November 8, 2016 – Pingtan Marine Enterprise Ltd. (Nasdaq: PME) (“Pingtan” or the “Company”), a global fishing company based in the People’s Republic of China (PRC), announced today its unaudited financial results for the third quarter and nine months ended September 30, 2016.

 

The Company's recent notable events are as follows:

 

October 20, 2016: The Company announced that it has declared a cash dividend of $0.01 per share of common stock outstanding. The dividend was payable in cash on, or about November 15, 2016 to shareholders of record on October 31, 2016.  This marks the eighth consecutive quarterly dividend paid by the Company, which it intends to continue paying on a quarterly basis.
  
The Company previously announced in August 2016, that 13 fishing vessels controlled by the Company have obtained fishing licenses from the Ministry of Agriculture and Fisheries of Democratic Republic of Timor-Leste and are expected to operate in the sea area of Timor-Leste. In November, these 13 fishing vessels have completed its modification process to change their fishing method in order to meet the local requirements, and are on the way to their operating destination in the sea area of Timor-Leste.

 

Management Comments

 

Mr. Xinrong Zhuo, Chairman and CEO of the Company, commented, “In the third quarter 2016, we continued to reach out to different countries and regions seeking to expand our fishing territories. We are pleased to announce that 13 of our fishing vessels are on the way to their fishing destination in the sea area of Timor-Leste, and we expect to put these vessels in full operation the upcoming weeks. Meanwhile, we are also in the process of negotiating with delegates from several countries with fertile fish resources, and we have already looked into opportunities outside of Asia-Pacific. We are committed to providing a variety of natural seafood products around the world to Chinese consumers.”

 

Factors Affecting Pingtan’s Results of Operation – Indonesia Moratorium

 

As previously disclosed in Form 10-K and 10-Q the Company filed in 2015 and 2016, in early December 2014 the Indonesian government introduced a nine-month moratorium on issuing new fishing licenses and renewals so that the country’s Ministry of Maritime Affairs and Fisheries (“MMAF”) could monitor the operations of existing fleets and fight illegal fishing activities. As a result, all licensed fishing vessels operating in Indonesian waters were informed by the Indonesian government to operate within strict guidelines and subsequently to cease operation, in order to avoid potential enforcement actions by the Indonesian Navy such as boat seizures.

 

 
 

 

Pingtan Marine Enterprise, Ltd. Page 2
November 8, 2016  

 

To cooperate and comply with the Indonesian government’s fishing license check procedures; the Company reduced its operations in January 2015. Since February 2015, Pingtan has ceased operations of the vessels in Indonesian waters. Since the Company derives a majority of its revenue from this area, this ban caused a significant drop in production.

 

In November 2015, the Indonesian government announced that the moratorium had concluded. The Company’s expectation is that the MMAF will implement new fishing policies and resume the license renewal process, although this has not yet occurred. In the interim, the Company’s financial results will continue to be materially adversely affected by this moratorium.

 

Among the company’s 135 fishing vessels, 13 vessels have obtained fishing licenses from the Ministry of Agriculture and Fisheries of Democratic Republic of Timor-Leste and will operate in the sea area of Democratic Republic of Timor-Leste; 12 vessels are operating in the Bay of Bengal in India; 6 vessels are licensed to operate in Western and Central Pacific Ocean of the international waters, and the remaining vessels are licensed to operate in the Arafura Sea in Indonesia.

 

Third Quarter 2016 Financial Highlights (all results are compared to prior year period)

 

As a result of the above, revenue was $1.2 million compared to $2.7 million.
  
Gross loss was $12.3 million compared to of $6.5 million.
  
Net loss was $13.9 million, or $0.16 per basic and diluted share, compared to net income of $22.5 million, or $0.26 per basic and diluted share.

  

Third Quarter 2016 Selected Financial Highlights

 

($ in millions, except per share data)  Three Months ended September 30, 
   2016   2015 
   (Unaudited)   (Unaudited) 
Revenue  $1.2   $2.7 
Cost of Revenue  $13.5   $9.2 
Gross loss  $(12.3)  $(6.5)
Gross Margin   (1,053.3%)   (237.4%)
Net (loss) income  $(13.9)  $22.5 
Basic and Diluted Weighted Average Shares   79.1    79.1 
Net (loss) income per ordinary share (in $)  $(0.16)  $0.26 

  

Balance Sheet Highlights

 

($ in millions, except per share data)   9/30/2016   12/31/2015 
  (Unaudited)   (Audited) 
Cash and Cash Equivalents  $0.6   $11.4 
Total Current Assets   48.5    91.9 
Total Assets   225.3    231.9 
Total Current Liabilities   56.7    42.5 
Total Long-term Debt, net of current portion   31.8    22.6 
Total Liabilities   88.5    65.1 
Shareholders’ Equity   136.7    166.8 
Total Liabilities and Shareholders’ Equity   225.3    231.9 
Book Value Per Share (in $)  $1.73   $2.11 

  

 
 

 

Pingtan Marine Enterprise, Ltd. Page 3
November 8, 2016  

 

Consolidated Financial and Operating Review

 

Revenues

Revenues from the fishing business and sales of frozen fish and other marine catches, for the three months ended September 30, 2016, were $1.2 million compared to $2.7 million for the same period in 2015. The decrease was primarily due to significant decrease in sales volumes, as the Company temporarily ceased its operations in the Indonesia waters since February 2015 due to the moratorium described above, as well as decrease in average unit sale price compared to prior year period.

 

For the nine months ended September 30, 2016, the Company’s revenues were $7.4 million compared to $46.7 million in the first nine months of 2015. The decrease was primarily due to decrease in sales volume due to the moratorium described above.

 

Gross Margin

As a result of the moratorium described above, the Company’s gross margin was negative for the three and nine months ended September 30, 2016.

 

Selling Expenses

Selling expenses were $0.09 million for the three months ended September 30, 2016, compared to $0.3 million in the prior-year period.

 

For the nine months ended September 30, 2016, selling expenses were $0.5 million, compared to $1.3 million in the same period of 2015.

 

General & Administrative Expenses

For the three months ended September 30, 2016 and 2015, general and administrative expenses were $0.7 million.

 

For the nine months ended September 30, 2016, general and administrative expenses were $3.0 million compared to $2.5 million in the same period of 2015.

 

Net (Loss) Income

For the three months ended September 30, 2016, net loss was $13.9 million, or $(0.16) per basic and diluted share, compared to net income of $22.5 million, or $0.26 per basic and diluted share, in the same period of 2015. The decrease was primarily due to the factors described above.

 

For the nine months ended September 30, 2016, the Company’s net loss was $23.9 million, or $(0.28) per basic and diluted share, compared to net income of $29.4 million, or $0.35 per basic and diluted share, in the same period of 2015.

 

 
 

 

Pingtan Marine Enterprise, Ltd. Page 4
November 8, 2016  

 

Conference Call Details

 

Pingtan also announced that it will discuss financial results in a conference call on Wednesday, November 9, 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/q3-2016. This webcast will be archived and accessible through the Company’s website for approximately 30 days following the call.

 

About Pingtan

 

Pingtan is a global fishing company engaging in ocean fishing through its wholly-owned subsidiary, Fujian Provincial Pingtan County O cean Fishing Group Co., Ltd., or Pingtan Fishing. Pingtan Fishing, a provider of high quality seafood in the PRC, 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.

 

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. Such forward looking statements include, but are not limited to, Pingtan’s expectation thatit intends to continue paying on a quarterly basis and that it expects to put 13 modified vessels in full operation the upcoming weeks.. 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 COUNSEL:

The Equity Group Inc.

Katherine Yao, Senior Associate

Tel: +86 10 6587 6435

kyao@equityny.com

 

 
 

 

Pingtan Marine Enterprise, Ltd. Page 5
November 8, 2016  

 

PINGTAN MARINE ENTERPRISE LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME (UNAUDITED)

(IN U.S. DOLLARS)

 

     For the Three Months Ended   For the Nine Months Ended 
     September 30,   September 30, 
     2016   2015   2016   2015 
                    
REVENUE  $1,168,946   $2,740,981   $7,388,395   $46,727,808 
                        
COST OF REVENUE   13,481,775    9,248,696    26,054,703    40,562,651 
                        
GROSS (LOSS) PROFIT   (12,312,829)   (6,507,715)   (18,666,308)   6,165,157 
                        
OPERATING EXPENSES:                        
Selling   93,843    312,574    508,062    1,309,859 
General and administrative   660,700    733,923    3,038,984    2,547,225 
                        
Total Operating Expenses   754,543    1,046,497    3,547,046    3,857,084 
                        
(LOSS) INCOME FROM OPERATIONS   (13,067,372)   (7,554,212)   (22,213,354)   2,308,073 
                        
OTHER INCOME (EXPENSE):                        
Interest income   782    10,875    4,051    98,894 
Interest expense   (738,548)   (817,321)   (1,656,672)   (2,856,516)
Foreign currency transaction loss   (86,414)   (774,934)   (542,694)   (714,620)
Grant income   -    31,691,166    153,514    31,691,166 
Gain (loss) from cost method investment   -    (3,264)   378,997    417,434 
Loss on equity method investment   (6,968)   (34,187)   (25,095)   (37,545)
Loss on fixed assets disposal   -    -    -    (1,544,277)
Other (expense) income   (59)   1    (476)   (212)
                        
Total Other (Expense) Income, net   (831,207)   30,072,336    (1,688,375)   27,054,324 
                        
(LOSS) INCOME BEFORE INCOME TAXES   (13,898,579)   22,518,124    (23,901,729)   29,362,397 
                        
INCOME TAXES   -    -    993    - 
                        
NET (LOSS) INCOME  $(13,898,579)  $22,518,124   $(23,902,722)  $29,362,397 
                        
LESS: NET (LOSS) INCOME ATTRIBUTABLE TO THE NON-CONTROLLING INTEREST   (1,075,177)   1,834,497    (1,750,492)   1,925,443 
                        
NET (LOSS) INCOME ATTRIBUTABLE TO OWNERS OF THE COMPANY  $(12,823,402)  $20,683,627   $(22,152,230)  $27,436,954 
                        
COMPREHENSIVE (LOSS) INCOME:                        
NET (LOSS) INCOME   (13,898,579)   22,518,124    (23,902,722)   29,362,397 
OTHER COMPREHENSIVE LOSS                        
Unrealized foreign currency translation loss   (459,166)   (6,948,652)   (3,831,852)   (5,848,277)
COMPREHENSIVE (LOSS) INCOME  $(14,357,745)  $15,569,472   $(27,734,574)  $23,514,120 
LESS: COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO THE NON-CONTROLLING INTEREST   (1,111,153)   1,277,639    (2,054,095)   1,600,169 
COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO OWNERS OF THE COMPANY  $(13,246,592)  $14,291,833   $(25,680,479)  $21,913,951 
                        
NET (LOSS) INCOME PER ORDINARY SHARE ATTRIBUTABLE TO OWNERS OF THE COMPANY                        
Basic and diluted  $(0.16)  $0.26   $(0.28)  $0.35 
                        
WEIGHTED AVERAGE ORDINARY SHARES OUTSTANDING:                        
Basic and diluted   79,055,053    79,055,053    79,055,053    79,055,053 

 

 
 

 

Pingtan Marine Enterprise, Ltd. Page 6
November 8, 2016  

 

PINGTAN MARINE ENTERPRISE LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(IN U.S. DOLLARS)

 

   September 30,   December 31, 
   2016   2015 
ASSETS  (Unaudited)     
         
CURRENT ASSETS:        
Cash  $567,931   $11,448,684 
Restricted cash   4,039,344    1,577,642 
Accounts receivable, net of allowance for doubtful accounts   3,140,043    12,575,042 
Inventories, net of reserve for inventories   2,287,067    2,336,167 
Advances to suppliers   34,735,933    35,994,146 
Prepaid expenses   6,297    1,818 
Prepaid expenses - related parties   1,128,172    4,640,166 
Receivable from transferring equity method investment shares   -    15,406,659 
Other receivables   171,752    78,051 
Other receivables - related parties   2,429,988    7,887,527 
           
Total Current Assets   48,506,527    91,945,902 
           
OTHER ASSETS:          
Cost method investment   3,148,709    3,235,398 
Equity method investment   29,644,707    30,486,314 
Prepayment for long-term assets   16,987,556    11,654,645 
Property, plant and equipment, net   126,968,222    94,555,114 
           
Total Other Assets   176,749,194    139,931,471 
           
Total Assets  $225,255,721   $231,877,373 
           
LIABILITIES AND SHAREHOLDERS' EQUITY          
           
CURRENT LIABILITIES:          
Accounts payable  $911,613   $978,353 
Accounts payable - related parties   105,024    408,631 
Short-term bank loans   26,148,156    21,971,438 
Long-term bank loans - current portion   15,098,809    12,679,680 
Accrued liabilities and other payables   5,826,736    5,044,049 
Due to related parties   8,614,831    1,384,644 
           
Total Current Liabilities   56,705,169    42,466,795 
           
OTHER LIABILITIES:          
Long-term bank loans - non-current portion   31,816,955    22,570,755 
           
Total Liabilities   88,522,124    65,037,550 
           
COMMITMENTS AND CONTINGENCIES          
           
SHAREHOLDERS' EQUITY:          
Equity attributable to owners of the company:          
Ordinary shares ($0.001 par value; 225,000,000 shares authorized; 79,055,053 shares issued and outstanding at September 30, 2016 and December 31, 2015)    
79,055
     
79,055
 
Additional paid-in capital   111,008,085    111,008,085 
Retained earnings   9,794,158    34,318,040 
Statutory reserve   9,391,827    9,391,827 
Accumulated other comprehensive loss   (7,854,600)   (4,326,351)
Total equity attributable to owners of the company   122,418,525    150,470,656 
Non-controlling interest   14,315,072    16,369,167 
           
Total Shareholders' Equity   136,733,597    166,839,823 
           
Total Liabilities and Shareholders' Equity  $225,255,721   $231,877,373 

 

 
 

 

Pingtan Marine Enterprise, Ltd. Page 7
November 8, 2016  

 

PINGTAN MARINE ENTERPRISE LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(IN U.S. DOLLARS)

 

         For the Nine Months Ended 
         September 30, 
         2016   2015 
               
CASH FLOWS FROM OPERATING ACTIVITIES:        
Net (loss) income  $(23,902,722)  $29,362,397 
Adjustments to reconcile net (loss) income from operations to net cash provided by operating activities:          
Depreciation   4,769,455    4,360,186 
Decrease in allowance for doubtful accounts   (112,562)   (87,535)
Increase in reserve for inventories   1,506,320    - 
Loss on equity method investment   25,095    37,545 
Loss on disposal of fixed assets   -    1,544,277 
Changes in operating assets and liabilities:          
Accounts receivable   9,335,357    39,365,984 
Inventories   (1,520,001)   6,466,615 
Advances to suppliers   297,813    (35,352,076)
Prepaid expenses   (4,590)   (4,474,501)
Prepaid expenses - related parties   3,434,109    (7,684,028)
Deferred expenses - related parties   -    977,895 
Other receivables   (95,068)   88,115 
Other receivables - related parties   -    4,384,313 
Accounts payable   (41,081)   (31,612)
Accounts payable - related parties   (296,671)   2,624,623 
Advances from customers   -    (164,133)
Accrued liabilities and other payables   930,168    3,970,928 
Accrued liabilities and other payables - related party   8,709,266    - 
                 
NET CASH PROVIDED BY OPERATING ACTIVITIES   3,034,888    45,388,993 
                 
CASH FLOWS FROM INVESTING ACTIVITIES:          
Refunds from commercial retail space prepayments   -    22,407,331 
Purchase of property, plant and equipment   (959,034)   (16,295)
Prepayments made for long-term assets   (44,329,098)   - 
Proceeds from transferring equity method investment share   15,199,416    - 
Payments for equity method investment   -    (40,580,463)
                 
NET CASH USED IN INVESTING ACTIVITIES   (30,088,716)   (18,189,427)

 

 
 

 

Pingtan Marine Enterprise, Ltd. Page 8
November 8, 2016  

 

PINGTAN MARINE ENTERPRISE LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

(IN U.S. DOLLARS)

 

         For the Nine Months Ended
September 30,
 
         2016   2015 
         
CASH FLOWS FROM FINANCING ACTIVITIES:        
Proceeds from short-term bank loans   18,999,502    15,472,361 
Repayments of short-term bank loans   (14,168,748)   (16,250,334)
Proceeds from long-term bank loans   18,999,270    - 
Repayments of long-term bank loans   (6,216,561)   (14,255,917)
Increase in restricted cash   (2,538,303)   - 
Advances from related parties   3,753,620    2,550,000 
Payments made for dividend   (2,371,652)   (1,581,101)
Capital contribution from non-controlling interest   -    64,928,741 
Payments made to related parties in connection with the termination of VIE   -    (13,472,714)
Acquisition of fishing vessels from related parties under common control   -    (56,206,080)
                 
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES   16,457,128    (18,815,044)
           
EFFECT OF EXCHANGE RATE ON CASH AND CASH EQUIVALENTS   (284,053)   (44,484)
           
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS   (10,880,753)   8,340,038 
           
CASH AND CASH EQUIVALENTS - beginning of period   11,448,684    12,752,272 
           
CASH AND CASH EQUIVALENTS - end of period  $567,931   $21,092,310 
           
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:          
Cash paid for:          
Interest  $1,976,789   $2,858,417 
Income taxes  $993   $- 
                 
NON-CASH INVESTING AND FINANCING ACTIVITIES:          
Acquisition of property and equipment by decreasing prepayment for long-term assets  $38,606,518   $- 
Offset other receivables - related parties against due to related parties  $5,114,910   $-