Investors

Pingtan Marine Enterprise Reports Financial Results For The Fourth Quarter And Year-ended December 31, 2014

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Company to Hold Conference Call on Wednesday, March 11, 2015, at 8:30 AM ET

FUZHOU, China, March 10, 2015 /PRNewswire/ -- 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 financial results for its fourth quarter and year-ended December 31, 2014.

2014 Financial Highlights (all results are compared to  prior year):

  • Revenue from continuing operations (the "fishing business") increased 90.2% to $233.4 million from $122.7 million, largely as a result of an increase in sales volume and unit selling price.
  • Gross profit increased 62.7% to $77.6 million from $47.7 million due to business expansion. Gross margin was 33.2% compared to 38.9%, due to the increase in fuel cost, labor cost and fishing license and agent fee.
  • Net income from the fishing business increased 81.9% to $85.8 million, or $1.08 per ordinary share (basic and diluted), from $47.1 million, or $0.60 per ordinary share (basic and diluted). 

Commenting on the results, Mr. Xinrong Zhuo, Chairman and CEO of the Company, commented, "We are very pleased with our robust 2014 financial and operating results, which were largely driven by our continuous efforts in further development: enhance our fleet to increase our fishing capacity, and expand our sales network to penetrate new markets.  We have sold 76.4 million Kilogram of our 30 different species of fish and marine products to more than 5 provinces, covering 337 million people in mainland China (including Fujian, Guangdong, Shandong, Zhejiang, Liaoning and other areas). During Fiscal Year 2014, Pingtan continued to realize our goal of becoming a vertically integrated seafood product provider. Greater expansion took place due to our utilization of both operation and financial leverage strengths. Recently, we proudly announced the RMB400 million strategic investment made by China Agriculture Industry Development Fund, which is a strong long-term strategic partner. We expect to work with them to seek win-win ideas through additional capital, resource sharing and transparency."

2014 Fleet Development

  • In September 2014, The Company expanded its fleet with 3 newly-built fishing trawlers, in addition to 126 vessels originally present. These three trawlers were initially ordered in October 2012 and each of them has annual fishing capacity of 2,000 tons at full operation.

Pingtan currently owns 107 trawlers and 2 drifters and has exclusive operating license rights to 20 drifters. The Company is the second largest China based fishery company operating its vessels outside of China waters. These vessels are fully licensed to fish in Indonesian and Indian waters with an average remaining useful life of approximately 15 years. Among the 129 fishing vessels, 117 of these vessels are operating in the Arafura Sea in Indonesia, and the remaining 12 vessels are operating in the Bay of Bengal in India.

Currently Pingtan catches nearly 30 different species of fish including ribbon fish, Indian white shrimp, croaker fish, pomfret, Spanish mackerel, conger eel, squid and red snapper. All fish products caught by the Company are shipped and transported to cold storage warehouse facilities to nearby onshore fishing bases. The Company then arranges periodic chartered transportation to deliver the frozen fish to its nine cold storage warehouses located in one of China's largest seafood trading centers, Mawei Seafood Market in Fujian Province.

Pingtan's revenue break-down by PRC territories:


For the Years Ended December 31,


2014


2013


2012

Fujian province

44%


26%


27%

Guangdong province

34%


46%


55%

Shandong province

11%


4%


4%

Zhejiang province

5%


17%


11%

Liaoning province

1%


2%


2%

Other areas

5%


5%


1%

Total

100%


100%


100%

The Company encourages investors to review detailed information on each vessel (including age of vessel / tonnage capacity) and revenue breakdown from its catch available in its 2014 Annual Report on Form 10-K.

SIGNIFICANT EVENTS

The Company's recent significant events are as follows:

  • January 13, 2015:  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 February 18, 2015 to shareholders of record on January 15, 2015.  This marks the second consecutive quarterly dividend paid by the Company, which it intends to continue paying on a quarterly basis.
  • February 10, 2015: The Company announced a RMB 400 million investment agreement with China Agriculture Industry Development Fund Co., Ltd. The investment goes to Pingtan's wholly-owned subsidiary, Fujian Provincial Pingtan County Ocean Fishing Group Co., Ltd, with a 8% equity interest of Pingtan Fishing in return. The investment raises Pingtan Fishing valuation up to approximately 5 billion RMB (US $813 million at current exchange rates). Due to the execution of this strategic Investment Agreement, Pingtan terminated its existing variable interest entity agreements, as permitted by the laws of the People's Republic of China. This provides the shareholders of Pingtan Marine Enterprises with direct ownership of its subsidiaries rather than contractual ownership through the VIE structure.
  • February 17, 2015: The Company announced the closing of the previously announced RMB400 million (approximately US$65.0 million at current exchange rates) strategic investment by China Agriculture Industry Development Fund Co., Ltd. In the Company's wholly-owned subsidiary, Fujian Provincial Pingtan County Ocean Fishing Group Co., Ltd.

2014 Selected Financial Highlights (A)

($ in millions, except per share data)

Three Months ended December 31

 Year Ended December 31,


2014

2013

2014

2013

2012(A)

Fishing Business (continuing operations)






Revenue

$56.5

$61.0

$233.4

$122.7

$67.5

Cost of Revenue

37.4

35.6

155.8

75.0

41.6

Gross Profit

19.1

25.4

77.6

47.7

25.9

Gross Profit Margin

33.8%

41.6%

33.2%

38.9%

38.4%

Net Income from Fishing Business

33.3

29.8

85.8

47.1

24.3

Basic and Diluted Weighted Average Shares Outstanding

79.1

79.1

79.1

78.8

77.2

EPS (from continuing operations) (in $)

$0.42

$0.38

$1.08

$0.60

$0.32







Balance Sheet Highlights (A)

(in million U.S. dollar except for book value per share)


12/31/2014

12/31/2013







Cash and Cash Equivalents


$12.8

$8.2


Total Current Assets


105.9

30.7


Total Assets


249.0

170.1


Total Current Liabilities


61.1

50.8


Total Long-term Debt, net of current portion


38.6

54.5


Total Liabilities


99.7

105.3


Shareholders' Equity


149.3

64.8


Total Liabilities and Shareholders' Equity


249.0

170.1


Book Value Per Share (in $)


$1.89

$0.82


Consolidated Financial and Operating Review

Revenues

Revenues from the fishing business, sales of frozen fish and other marine catches for the three months ended December 31, 2014, decreased by 7.4% to $56.5 million from $61.0 million for the same period in 2013. The decrease was primarily due to delay in Spring Festival, which is the Company's peak season. For 2013, Spring Festival was in January 2014, while for 2014, it was in February 2015. 

For the year ended December 31, 2014, the Company's revenue from its fishing business, sales of frozen fish and other marine catches increased by 90.2% to $233.4 million from $122.7 million in the year ended December 31, 2013. The increase was mainly due to increase in sales volume as a result of the addition of 66 fishing vessels into the Company's operation in June and September 2013, most of which were operating at full capacity in the year ended December 31, 2014; and the addition of 20 new fishing vessels acquired from Hong Long in December 2013, which were put in the Company's operation in the year ended December 31, 2014.

Gross Margin

The Company's gross margin for fishing business was 33.8% for the three months ended December 31, 2014, compared to 41.6% in the prior year period.  The decrease in gross profit is resulted from increment in fuel cost, labor cost and fishing license and agent fee.

The Company's gross margin for the fishing business was 33.2% in the fiscal year ended December 31, 2014 compare to 38.9% in that of 2013. The decrease was primarily due to an increase in fuel cost, labor cost and fishing license and agent fee from additional vessels.

Selling Expense

For the three months ended December 31, 2014, selling expense for the fishing business was $0.8 million, or 1.3% of revenue, compared to $0.9 million, or 1.5% of revenue, in the prior year period. The slightly decrease in selling expense is in accordance with mild drop in sales.

For the fiscal year ended December 31, 2014, total selling expense increased to $2.7 million from $1.6 million in the same period of 2013.

General & Administrative Expense

For the three months ended December 31, 2014, general and administrative expense for the fishing business was $2.1 million, or 3.8% of revenue, compared to $0.8 million, or 1.4% of revenue, in the prior year period. The increase is primarily due to allowance for doubtful debts of $1.2 million in December, 2014.

For the fiscal year ended December 31, 2014, total general and administrative expense increased to $4.5 million from $3.2 million in the same period of 2013.

Net Income

Net income from the fishing business for the three months ended December 31, 2014 was $33.3 million, or $0.42 per basic and diluted share, compared to $29.8 million, or $0.38 per basic and diluted share, in the same period of 2013. The increase was primarily due to all factors described above.

Net income from the fishing business in the year ended December 31, 2014 was $85.8 million, or $1.08 per basic and diluted share, increased $38.7 million, or 82.2% from $47.1 million, or $0.60 per basic and diluted share, in the same period of 2013. The increase was primarily due to the same reasons described above.

Conference Call Details

Pingtan also announced that it will discuss financial results in a conference call on Wednesday, March 11, 2015, 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

The conference call will also be webcast live.  To listen to the call, please go to the Investor Relations section of Pingtan's website at www.ptmarine.com, or click on the following link: http://ptmarine.equisolvewebcast.com/q4-2014.   

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.


In China

Adam Prior, Senior Vice President


Katherine Yao, Associate

(212) 836-9606


86 10 6587 6435

aprior@equityny.com


kyao@equityny.com

 

PINGTAN MARINE ENTERPRISE LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(IN U.S. DOLLARS)









For the three months ended December 31,








2014


2013






















Revenue






$       56,517,834


$            61,026,829












Cost of revenue





(37,452,094)


(35,603,682)












Gross Profit





19,065,740


25,423,147












Operating expenses:









Selling and marketing expenses



(758,398)


(887,544)


General and administrative expenses



(2,129,981)


(846,068)


Total operating expenses




(2,888,379)


(1,733,612)












Operating income





16,177,361


23,689,535












Other income (expenses)








Investment income





141


230


Interest income





2,756


3,389


Interest expenses





(1,726,985)


(1,177,896)


Subsidy income





18,853,497


7,133,781


Sundry income





-


123


Gain/(Loss) on foreign exchange, net



28,328


170,712












Income from continuing operations before income taxes

33,335,098


29,819,874












Income tax expense





-


-












Net income from continuing operations



$       33,335,098


$            29,819,874











NET INCOME FROM DISCONTINUED OPERATIONS, NET OF INCOME TAX

-


12,448,885











NET INCOME





33,335,098


42,268,759











COMPREHENSIVE INCOME:







   NET INCOME





33,335,098


42,268,759











   OTHER COMPREHENSIVE INCOME






       Foreign currency translation (loss) gain



138,292


1,643,644

       Unrealized change in fair value of available-for-sale investment














   TOTAL COMPREHENSIVE INCOME  



33,473,390


43,912,403











BASIC AND DILUTED EARNINGS PER SHARE





    From continuing operations




0.42


0.38

    From discontinued operations




0


0.16

    Net income





0.42


0.54











WEIGHTED AVERAGE ORDINARY SHARES OUTSTANDING:




    Basic and diluted





79,055,053


79,055,053











 

PINGTAN MARINE ENTERPRISE LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(IN U.S. DOLLARS)




For the Years Ended December 31,



2014


2013


2012















REVENUE







     Revenue

$

233,427,011

$

112,295,158

$

53,673,848

     Revenue - related party


-


10,372,611


13,787,620








        Total Revenue


233,427,011


122,667,769


67,461,468








COST OF REVENUE







     Cost of revenue


155,840,823


68,403,097


34,040,301

     Cost of revenue - related party


-


6,580,193


7,530,171








        Total Cost of Revenue


155,840,823


74,983,290


41,570,472








GROSS PROFIT


77,586,188


47,684,479


25,890,996








OPERATING EXPENSES:







     Selling


2,673,213


1,618,278


647,850

     General and administrative


4,537,351


3,191,637


463,501








        Total Operating Expenses


7,210,564


4,809,915


1,111,351








INCOME FROM OPERATIONS


70,375,624


42,874,564


24,779,645








OTHER INCOME (EXPENSE):







     Interest income


16,772


8,250


3,276

     Interest expense


(4,815,670)


(3,301,696)


(2,876,253)

     Foreign currency transaction (loss) gain


(258,248)


144,740


(5,113)

     Grant income


20,094,039


7,338,273


2,363,575

     Investment income


348,523


69,519


15,138

     Other (expense) income


(335)


2,144


-








        Total Other Income (Expense), net


15,385,081


4,261,230


(499,377)








INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES


85,760,705


47,135,794


24,280,268








INCOME TAXES


-


-


-








NET INCOME FROM CONTINUING OPERATIONS


85,760,705


47,135,794


24,280,268








NET INCOME FROM DISCONTINUED OPERATIONS, NET OF INCOME TAX


-


51,910,662


84,494,428








NET INCOME

$

85,760,705

$

99,046,456

$

108,774,696








COMPREHENSIVE INCOME:







   NET INCOME

$

85,760,705

$

99,046,456

$

108,774,696








   OTHER COMPREHENSIVE INCOME







       Foreign currency translation (loss) gain


(552,656)


8,195,045


4,113,599

       Unrealized change in fair value of available-for-sale investment


-


-


(717)








   TOTAL COMPREHENSIVE INCOME  

$

85,208,049

$

107,241,501

$

112,887,578








BASIC AND DILUTED EARNINGS PER SHARE







    From continuing operations

$

1.08

$

0.60

$

0.32

    From discontinued operations


-


0.66


1.09

    Net income

$

1.08

$

1.26

$

1.41








WEIGHTED AVERAGE ORDINARY SHARES OUTSTANDING:







    Basic and diluted


79,055,053


78,772,743


77,215,000








 

PINGTAN MARINE ENTERPRISE LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(IN U.S. DOLLARS)




December 31,



2014


2013






ASSETS





CURRENT ASSETS:





    Cash

$

12,752,272

$

8,156,599

    Accounts receivable, net of allowance for doubtful accounts


49,999,712


9,133,130

    Inventories


12,123,405


9,095,736

    Prepaid expenses


32,913


4,309,574

    Prepaid expenses - related parties


7,319,975


-

    Deferred expenses - related parties


1,029,114


-

    Other receivables


22,656,232


11,665






        Total Current Assets


105,913,623


30,706,704






OTHER ASSETS:





    Long-term investment


19,385,843


3,468,953

    Prepayment for long-term assets


13,750,102


33,985,148

    Property, plant and equipment, net


109,980,617


101,970,707






        Total Other Assets


143,116,562


139,424,808






        Total Assets

$

249,030,185

$

170,131,512






LIABILITIES AND SHAREHOLDERS' EQUITY










CURRENT LIABILITIES:





    Accounts payable

$

1,181,977

$

2,184,964

    Accounts payable - related parties


2,601,314


13,807,605

    Advances from customers


164,724


297,034

    Short-term bank loans


30,353,890


9,085,353

    Long-term bank loans - current portion


18,868,616


20,252,077

    Accrued liabilities and other payables


5,602,307


4,643,272

    Due to related parties


2,373,352


-

    Deferred grant income


-


520,045






        Total Current Liabilities


61,146,180


50,790,350






OTHER LIABILITIES:





    Long-term bank loans - non-current portion


38,625,071


54,499,727






        Total Liabilities


99,771,251


105,290,077






SHAREHOLDERS' EQUITY:





    Ordinary shares ($0.001 par value; 225,000,000 shares authorized; 79,055,053





        shares issued and outstanding at December 31, 2014 and 2013)


79,055


79,055

    Additional paid-in capital


117,525,377


117,525,377

    Retained earnings (accumulated deficit)


21,315,710


(63,654,445)

    Statutory reserve


6,412,892


6,412,892

    Accumulated other comprehensive income


3,925,900


4,478,556






        Total Shareholders' Equity


149,258,934


64,841,435






        Total Liabilities and Shareholders' Equity

$

249,030,185

$

170,131,512






 

PINGTAN MARINE ENTERPRISE LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN U.S. DOLLARS)







For the Years Ended December 31,






2014


2013


2012











CASH FLOWS FROM OPERATING ACTIVITIES:








Net income from continuing operations

$

85,760,705

$

47,135,794

$

24,280,268


Adjustments to reconcile net income from operations to net cash








          provided by operating activities:








          Depreciation


6,017,886


2,394,692


2,677,418


          Increase in allowance for doubtful accounts


1,173,223


-


-


          Short-term investment income


-


-


(15,860)


Changes in operating assets and liabilities:








          Accounts receivable


(42,134,612)


2,788,320


(10,562,176)


          Accounts receivable - related parties


-


-


4,584,509


          Notes receivable (banker's acceptances)


-


3,745,196


-


          Other receivables


(156,606)


19,201


6,797,156


          Prepaid expenses


4,213,938


(1,925,477)


(218,759)


          Prepaid expenses - related parties


(7,314,375)


-


-


          Deferred expenses - related parties


(1,028,327)


-


-


          Inventories


(3,150,909)


(8,766,511)


2,397,340


          Advances to suppliers


-


-


-


          Accounts payable


(1,762,518)


2,081,172


(43,377)


          Accounts payable - related parties


(8,604,461)


13,944,394


3,060,668


          Advances from customers


(128,109)


292,802


(1,160,618)


          Advances from customers - related parties


-


(13,026,770)


12,675,074


          Accrued liabilities and other payables


1,019,221


3,583,989


777,587


          Due to related parties


23,352


-


-











NET CASH PROVIDED BY OPERATING ACTIVITIES FROM CONTINUING OPERATIONS


33,928,408


52,266,802


45,249,230











CASH FLOWS FROM INVESTING ACTIVITIES:








         Payment for long-term investment


-


-


(2,661,766)


         Proceeds from disposition of short-term investment


-


-


808,052


         Proceeds from government grants for fishing vessels construction


3,451,914


8,320,882


-


         Payment for fishing vessels deposit


-


(1,901,220)


-


         Prepayments made for acquisition of commercial retail space


(22,470,798)


-


-


         Purchase of property, plant and equipment


(890,897)


(257,701,854)


(33,992,757)


         Advance to related parties


-


(312,569)


(41,505,027)


         Payments for long-term investment


(15,952,598)


-


-


         Decrease in cash related to sale of subsidiary


-


(84,917,899)


-











NET CASH USED IN INVESTING ACTIVITIES FOR CONTINUING OPERATIONS


(35,862,379)


(336,512,660)


(77,351,498)











 

PINGTAN MARINE ENTERPRISE LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

(IN U.S. DOLLARS)




For the Years Ended December 31,



2014


2013


2012

CASH FLOWS FROM FINANCING ACTIVITIES:







     Proceeds from short-term bank loans



67,175,414


43,713,708


51,384,055

     Repayments of short-term bank loans



(45,797,736)


(64,358,336)


(48,079,121)

     Proceeds from long-term bank loans



3,743,977


55,811,568


26,617,656

     Repayments of long-term bank loans



(19,957,026)


(7,584,023)


(1,845,808)

     Advances from related parties



2,350,000


(777)


9,075,004

     Payments made for dividend



(790,550)


-


-

     Cash acquired in recapitalization



-


3,565,355


-











NET CASH PROVIDED BY FINANCING ACTIVITIES FROM CONTINUING OPERATIONS


6,724,079


31,147,495


37,151,786











CASH FLOWS FROM DISCONTINUED OPERATIONS:

















NET CASH PROVIDED BY OPERATING ACTIVITIES FROM DISCONTINUED OPERATIONS


-


79,605,841


92,587,488











NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES FROM DISCONTINUED OPERATIONS


-


7,099,979


(42,204,987)











NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES FOR DISCONTINUED OPERATIONS


-


(407,030)


560,216











NET CASH PROVIDED BY DISCONTINUED OPERATIONS


-


86,298,790


50,942,717











EFFECT OF EXCHANGE RATE ON CASH AND CASH EQUIVALENTS


(194,435)


3,032,812


1,726,785











NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS


4,595,673


(163,766,761)


57,719,020











CASH AND CASH EQUIVALENTS - beginning of year


8,156,599


171,923,360


114,204,340











CASH AND CASH EQUIVALENTS - end of year

$

12,752,272

$

8,156,599

$

171,923,360











SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:








 Cash paid:








    From continuing operations









       Interest paid



$

5,648,796

$

4,060,069

$

3,428,193


    From discontinued operations









       Income tax paid



$

-

$

17,278,643

$

29,324,336











NON-CASH INVESTING AND FINANCING ACTIVITIES:








Purchase of property and equipment pursuant to capital lease

$

-

$

26,435,403

$

-


Purchase of property and equipment by setting off advance to related parties

$

-

$

55,064,953

$

-


Deposit on setting up joint venture netted of accounts payable - related parties

$

-

$

6,090,302

$

-


Acquisition of property and equipment by decreasing prepayment for long-term assets

$

19,750,438

$

-

$

-


Property and equipment acquired on credit as payable

$

790,459

$

-

$

-


Decrease in cost of property and equipment by proceeds from government grants

$

3,451,914

$

-

$

-


Decrease in cost of property and equipment by recognition of deferred grant income

$

512,469

$

-

$

-











 

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SOURCE Pingtan Marine Enterprise Ltd.