China Bio Energy Reports Fiscal First Quarter 2008 Financial Results
Fri May 16, 8:00 AMXI'AN, China, May 16, 2008 /Xinhua-PRNewswire-FirstCall/ -- China Bio Energy Holdings (OTC Bulletin Board: CBEH.OB), (CBEH or the "Company"), an energy company engaged in the distribution of heavy oil and finished oil products and the production and distribution of bio-diesel fuel, today announced consolidated financial results for the fiscal first quarter ended March 31, 2008.
Net sales for the first quarter of 2008 were approximately $35.6 million, a 208% increase as compared to net sales in the first quarter of 2007 of approximately $11.6 million. Sales of bio-diesel amounted to approximately $6.8 million for the first quarter, or roughly 19% of total revenue. Sales of petroleum-based products, primarily gasoline and petro-diesel, increased by 160%, from $11.1 million in the first quarter of 2007 to $28.8 million in the first quarter of 2008. The increase in sales of petroleum-based products was the result of a general increase in demand for fuel in China, an increase in the export of fuel from Shaanxi province to the rest of China, and an increase in sales to parts of China that cannot be accessed via commercial railway but which the Company can access via military railroad links, which is an ability that is unique to the Company among Shaanxi petroleum distributors. The increase in bio-diesel sales was the result of the completion of the Company's 100,000 ton bio-diesel production facility in October of 2007 which allowed the Company to bring more bio-diesel to market.
Gross profit was approximately $5.0 million for the first quarter of 2008, an increase of 350% as compared to approximately $1.1 million for the first quarter of 2007. Gross margin as a percentage of sales increased 450 basis points to 14.1% in the first quarter from 9.6% in the year ago period. The increase in gross margin was mainly due to the increased portion of sales coming from bio-diesel which had a gross margin of roughly 16% as compared to 11% for petroleum products.
General and administrative expenses were approximately $320,000 for first quarter 2008 as compared to $127,000 for first quarter 2007, an increase of approximately $193,000 or 152%. This increase was a result of the general expansion of revenue and production. For the first quarter of both 2008 and 2007 general and administrative expenses amounted to approximately 1% of sales.
Net income in the first quarter was $4.7 million as compared to $1.0 million in the year ago period, an increase of $3.7 million or 384%. Earnings per diluted share were $0.15 in the first quarter compared with $0.04 in the year ago period, an increase of 275%.
"We are pleased with our financial results for the first quarter of 2008," stated Gao Xincheng, Chief Executive Officer of China Bio Energy. "We were able to leverage a key advantage of our distribution network -- our connection to military railways that reach parts of China that commercial railways cannot -- to significantly increase our revenue. Furthermore, our bio-diesel production facility continued to successfully increase production while maintaining our high quality standards. During the first quarter we produced roughly 50% of our capacity and we expect the production level to continue to grow throughout 2008. As production increases, we also expect that our gross margin from bio-diesel will continue to improve until we eventually reach our expected average of 45%. Overall, 2008 is off to a strong start for all aspects of our business. As we expand our production of bio-diesel and leverage our distribution network we expect 2008 to continue to be a good year for our Company."
About China Bio Energy Holdings
CBEH is a distributor of petroleum related products and a manufacturer and distributor of biodiesel fuel. CBEH sells a variety of related products including, gasoline (used primarily in automobiles), diesel fuel (commercial vehicles, agricultural machines, etc.), heavy oil and slurry (ship boilers, heating furnaces, metallurgical furnaces and other industrial furnaces), residual oil (utilized to manufacture petroleum coke, residual lubricating oil and asphalt or as a feedstock for cracking), and naphtha (used to manufacture ethane, propane, benzene, toluene and xylene). Sales of oil products in 2007 currently accounts for approximately 94% of CBEH's total revenues.
Bio-diesel refers to a clean burning alternative fuel produced from domestic, renewable resources. Bio-diesel is made through a chemical process whereby glycerin is separated from fat or vegetable oil. Bio-diesel contains no petroleum, but it can be blended at any level with petroleum diesel to create a bio-diesel blend and can be used in compression-ignition (diesel) engines with little or no modifications. Bio-diesel is the ideal substitute of petro-diesel and it has many benefits, including excellent environmental performance, superior ignition, compatibility with existing diesel engines, better lubrication to extend the life time of engines, and renewability. Sales of bio-diesel fuel accounted for approximately 6% of the Company's total revenues in 2007 and 19% in the first quarter of 2008. The percent of bio-diesel in the Company's total revenues will increase greatly as the output of biodiesel increases.
Safe Harbor Statement
This press release contains certain statements that may include "forward-looking statements." All statements other than statements of historical fact included herein are "forward-looking statements." These forward-looking statements are often identified by the use of forward-looking terminology such as "believes," "expects" or similar expressions, involve known and unknown risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company's periodic reports that are filed with the Securities and Exchange Commission and available on its website ( http://www.sec.gov ). All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.
CHINA BIO ENERGY HOLDING GROUP CO., LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME
(Unaudited) For The Three Months Ended March 31,
2008 2007
Sales 35,560,840 11,558,725
Cost of goods sold 30,547,663 10,444,290
Gross profit 5,013,177 1,114,435
General and administrative expenses 319,806 127,101
Income from operations 4,693,371 987,334
Non-operating income (expenses)
Interest income (expenses) (28,271) (19,967)
Other income (expenses) (70) --
Financial expenses (125) (4,444)
Total non-operating expenses (28,466) (24,411)
Net income 4,664,905 962,923
Other comprehensive item
Foreign currency translation
gain 1,243,160 175,187
Comprehensive Income 5,908,065 1,138,110
Basic and diluted weighted average
shares outstanding
Basic 25,454,545 23,954,545
Diluted 31,459,006 23,954,545
Basic and diluted net earnings per
share available to common
stockholders
Basic $0.18 $0.04
Diluted $0.15 $0.04
CHINA BIO ENERGY HOLDING GROUP CO., LTD. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
As of March 31, As of December 31,
2008 2007
ASSETS (Unaudited)
CURRENT ASSETS
Cash and cash equivalents $1,552,219 $1,382,371
Restricted cash 200,000 200,000
Accounts receivable, net 5,893,346 288,589
Other receivables 274,947 1,548,681
Prepaid expenses 2,936,408 2,896,493
Advance to suppliers 14,869,631 16,546,506
Inventories 12,391,064 12,082,962
Due from related party 655,855 593,696
Total current assets 38,773,470 35,539,298
CONSTRUCTION IN PROGRESS 1,923,351 --
PROPERTY AND EQUIPMENT, net 8,341,165 8,166,250
TOTAL ASSETS $49,037,986 $43,705,548
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ -- $179,617
Advance from customers 1,969,776 499,908
Tax payable 289,120 125,015
Other payables 1,091,031 3,165,677
Accrued expenses 70,540 67,875
Loan payable 1,424,704 1,370,877
Long term notes payable -
current portion 65,743 67,287
Total current liabilities 4,910,914 5,476,256
LONG TERM LIABILITIES 26,118 33,655
Total liabilities 4,937,032 5,509,911
COMMITMENT AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Preferred stock, $.001 par value;
authorized shares 1,000,000; issued and
outstanding 1,000,000 shares 1,000 1,000
Common stock, $.0001 par value;
authorized shares 80,000,000;
issued and outstanding 25,454,545
shares 2,545 2,545
Paid in capital 16,213,404 19,611,938
Statutory reserve 2,051,030 2,051,030
Accumulated other comprehensive
income 3,562,891 2,319,732
Retained earnings 22,270,084 14,209,392
Total stockholders' equity 44,100,954 38,195,637
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $49,037,986 $43,705,548
For more information, please contact:
Dan Joseph
ICR, Inc.
Tel: +86-21-6122-1077
Bill Zima
ICR, Inc.
Tel: +1-203-682-8200
SOURCE China Bio Energy Holdings
