Exhibit 99.1
pingtan marine enterprise Reports FINANCIAL RESULTS
for the FIRST quarter ended MARCH 31, 2016
Company to Hold Conference Call on Wednesday, May 11, 2016, at 8:30 AM ET
FUZHOU, China, May 10, 2016 – Pingtan Marine Enterprise Ltd. (Nasdaq: PME), (“Pingtan,” or the “Company”) a global fishing company based in the People’s Republic of China (PRC), todayannounced its unauditedfinancial results the first quarter ended March 31, 2016.
Factors Affecting Pingtan’s Results of Operation
As previously disclosed in Form 10-K and 10-Q the Company filed in 2015, in early December 2014 the Indonesian government introduced a six-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.
Among the Company’s 135 fishing vessels, 117 of these vessels operate in the Arafura Sea of Indonesia. To cooperate and comply with the Indonesian government’s fishing license check procedures, in January 2015, the Company reduced its operations - since February 2015, Pingtan has ceased operations of the 117 vessels which are licensed to operate 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.
As a result, the Company’s sales for the three months ended March 31, 2016 decreased significantly as compared to the three months ended March 31, 2015.
During the three months ended March 31, 2016, the Company purchased fish from a third party to satisfy customer demands. The resale of purchased fish to its customers generated a positive gross margin on such sales. The positive gross margin in these reselling activities partially offset the decrease in the Company’s overall gross margin for the three months ended March 31, 2016.
| Pingtan Marine Enterprises, Ltd. | Page 2 |
| May 10, 2016 |
First Quarter 2016 Financial Highlights (all results are compared toprior year corresponding period)
| · | As a result of the above, revenue from fishing business was $4.1 million compared to $28.7 million. |
| · | Gross loss was $3.3 million, compared to gross profit of $11.5 million, and gross margin was (80.5%) compared to 39.9%, due toreduced scale of operationsresulted by the moratorium described above. |
| · | Net loss was $5.5 million, or $(0.06) per basic and diluted share, compared to net income of $8.4 million, or $0.10 per basic and diluted share. The decrease was primarily due to the same reasons described above. |
Management Commentary
Mr. Xinrong Zhuo, Chairman and CEO of the Company, commented, “While the first quarter of 2016 was challenging due to the moratorium by the Indonesian government, our team successfully met customer demands and needs by purchasing fish for resale from a third party supplier. These resale activities of purchased fish generated a positive gross margin on such sales and helped us to continue to maintain positive relationships with key customers. We believe it is only a matter of time before fully licensed fishing companies like Pingtan are allowed to resume fishing in Indonesian waters. We continue seeking to diversify ourfishing territories and we are actively negotiating with neighboring countries toexpand into new fishing regions.”
First Quarter 2016 Selected Financial Highlights
| ($ in millions, except per share data) | Three Months ended March 31, | |||||||
| 2016 | 2015 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Revenue | $ | 4.1 | $ | 28.7 | ||||
| Cost of Revenue | $ | 7.4 | $ | 17.3 | ||||
| Gross (Loss) Profit | $ | (3.3 | ) | $ | 11.5 | |||
| Gross Margin | (80.5 | %) | 39.9 | % | ||||
| Net (Loss) Income | $ | (5.5 | ) | $ | 8.4 | |||
| Basic and Diluted Weighted Average Ordinary Shares Outstanding | 79.1 | 79.1 | ||||||
| Net (Loss) Income Per Ordinary Share Attributable to Owners of The Company | $ | (0.06 | ) | $ | 0.10 | |||
Balance Sheet Highlights
| ($ in millions, except per share data) | 3/31/2016 | 12/31/2015 | ||||||
| (Unaudited) | (Audited) | |||||||
| Cash and Cash Equivalents | $ | 2.6 | $ | 11.4 | ||||
| Total Current Assets | 62.8 | 91.9 | ||||||
| Total Assets | 222.3 | 231.9 | ||||||
| Total Current Liabilities | 38.2 | 42.5 | ||||||
| Total Long-term Debt, net of current portion | 22.7 | 22.5 | ||||||
| Total Liabilities | 60.9 | 65.0 | ||||||
| Shareholders’ Equity | 161.4 | 166.9 | ||||||
| Total Liabilities and Shareholders’ Equity | 222.3 | 231.9 | ||||||
| Book Value Per Share (in $) | $ | 2.04 | $ | 2.11 | ||||
| Pingtan Marine Enterprises, Ltd. | Page 3 |
| May 10, 2016 |
Consolidated Financial and Operating Review
Revenue
Revenue from the fishing business, sales of frozen fish and other marine catches forthe three months ended March 31, 2016, were $4.1 million compared to $28.7 million for the same period in 2015. The decrease was primarily due to the Company ceasing its operations in Indonesia waters since February 2015 resulting from the moratorium described above.
Gross Margin
The Company’s gross margin was (80.5%) for the three months ended March 31, 2016, compared to 39.9% in the prior-year period.The significant decrease was primarily due to the reduced scale of operations resulting in lower revenue, which is reflected in the allocation of fixed costs, mainly consisting of depreciation, to cost of revenue; partially offset by the positive gross margin from our fish resale activities.
Selling Expenses
Selling expenses were $0.3 million, for the three months ended March 31, 2016, compared to $0.7 million,in theprior-year period.
General & Administrative Expenses
For the three months ended March 31, 2016,general and administrative expenses were $1.5 million, compared to $1.4 million, in theprior-year period.
Net (Loss) Income
Net loss for the three months endedMarch 31, 2016, was $5.5 million, or $(0.06) per basic and diluted share, compared to net income of $8.4 million, or $0.10 per basic and diluted share, in the same period of 2015. The decrease was primarily due tothe reasons described above.
Conference Call Details
Pingtan also announced that it will discuss financial results in a conference call onWednesday, May 11, 2016, 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/q1-2016. 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 Ocean 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.
| Pingtan Marine Enterprises, Ltd. | Page 4 |
| May 10, 2016 |
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, including statements that the Company’s expectation is that the MMAF will implement new fishing policies, that the Company seeks to expand into new fishing territories to help reduce its dependency on a single region, diversify its revenue stream and fulfill the needs of its customers. 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.
Adam Prior, Senior Vice President
Tel: (212) 836-9606
aprior@equityny.com
In China
Katherine Yao, Senior Associate
Tel: +86 10 6587 6435
kyao@equityny.com
| Pingtan Marine Enterprises, Ltd. | Page 5 |
| May 10, 2016 |
| PINGTAN MARINE ENTERPRISE LTD. AND SUBSIDIARIES |
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (UNAUDITED) |
| (IN U.S. DOLLARS) |
| For the Three Months Ended March 31, | ||||||||
| 2016 | 2015 | |||||||
| REVENUE | $ | 4,115,098 | $ | 28,732,824 | ||||
| COST OF REVENUE | 7,427,810 | 17,266,289 | ||||||
| GROSS (LOSS) PROFIT | (3,312,712 | ) | 11,466,535 | |||||
| OPERATING EXPENSES: | ||||||||
| Selling | 343,020 | 705,520 | ||||||
| General and administrative | 1,467,471 | 1,444,214 | ||||||
| Total Operating Expenses | 1,810,491 | 2,149,734 | ||||||
| (LOSS) INCOME FROM OPERATIONS | (5,123,203 | ) | 9,316,801 | |||||
| OTHER INCOME (EXPENSE): | ||||||||
| Interest income | 2,367 | 19,232 | ||||||
| Interest expense | (522,265 | ) | (953,644 | ) | ||||
| Foreign currency transaction gain | 20,797 | 37,381 | ||||||
| Grant income | 154,447 | - | ||||||
| Loss on equity method investment | (10,316 | ) | (3,345 | ) | ||||
| Other expense | (264 | ) | (163 | ) | ||||
| Total Other Income (Expense), net | (355,234 | ) | (900,539 | ) | ||||
| (LOSS) INCOME BEFORE INCOME TAXES | (5,478,437 | ) | 8,416,262 | |||||
| INCOME TAXES | 413 | - | ||||||
| NET (LOSS) INCOME | $ | (5,478,850 | ) | $ | 8,416,262 | |||
| LESS: NET (LOSS) INCOME ATTRIBUTABLE TO THE NON-CONTROLLING INTEREST | (378,471 | ) | 193,015 | |||||
| NET (LOSS) INCOME ATTRIBUTABLE TO OWNERS OF THE COMPANY | $ | (5,100,379 | ) | $ | 8,223,247 | |||
| COMPREHENSIVE (LOSS) INCOME: | ||||||||
| NET (LOSS) INCOME | (5,478,850 | ) | 8,416,262 | |||||
| OTHER COMPREHENSIVE INCOME | ||||||||
| Unrealized foreign currency translation gain | 879,423 | 646,756 | ||||||
| COMPREHENSIVE (LOSS) INCOME | $ | (4,599,427 | ) | $ | 9,063,018 | |||
| LESS: COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO THE NON-CONTROLLING INTEREST | (309,448 | ) | 387,343 | |||||
| COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO OWNERS OF THE COMPANY | $ | (4,289,979 | ) | $ | 8,675,675 | |||
| NET (LOSS) INCOME PER ORDINARY SHARE ATTRIBUTABLE TO OWNERS OF THE COMPNAY | ||||||||
| Basic and diluted | $ | (0.06 | ) | $ | 0.10 | |||
| WEIGHTED AVERAGE ORDINARY SHARES OUTSTANDING: | ||||||||
| Basic and diluted | 79,055,053 | 79,055,053 | ||||||
| Pingtan Marine Enterprises, Ltd. | Page 6 |
| May 10, 2016 |
| PINGTAN MARINE ENTERPRISE LTD. AND SUBSIDIARIES | ||
| CONSOLIDATED BALANCE SHEETS (UNAUDITED) | ||
| (IN U.S. DOLLARS) | ||
| March 31, 2016 | December 31, 2015 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash | $ | 2,583,497 | $ | 11,448,684 | ||||
| Restricted cash | 2,208,471 | 1,577,642 | ||||||
| Accounts receivable, net of allowance for doubtful accounts | 8,921,998 | 12,575,042 | ||||||
| Inventories, net of reserve for inventories | 3,789,465 | 2,336,167 | ||||||
| Advances to suppliers | 36,059,841 | 35,994,146 | ||||||
| Prepaid expenses | 546 | 1,818 | ||||||
| Prepaid expenses - related parties | 2,783,783 | 4,640,166 | ||||||
| Receivable from transferring equity method investment shares | - | 15,406,659 | ||||||
| Other receivables | 78,088 | 78,051 | ||||||
| Other receivables - related parties | 6,412,506 | 7,887,527 | ||||||
| Total Current Assets | 62,838,195 | 91,945,902 | ||||||
| OTHER ASSETS: | ||||||||
| Cost method investment | 3,256,874 | 3,235,398 | ||||||
| Equity method investment | 30,678,214 | 30,486,314 | ||||||
| Prepayment for long-term assets | 21,425,085 | 11,654,645 | ||||||
| Property, plant and equipment, net | 104,139,615 | 94,555,114 | ||||||
| Total Other Assets | 159,499,788 | 139,931,471 | ||||||
| Total Assets | $ | 222,337,983 | $ | 231,877,373 | ||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Accounts payable | $ | 946,414 | $ | 978,353 | ||||
| Accounts payable - related parties | 1,076,728 | 408,631 | ||||||
| Short-term bank loans | 18,002,118 | 21,971,438 | ||||||
| Long-term bank loans - current portion | 12,763,846 | 12,679,680 | ||||||
| Accrued liabilities and other payables | 4,563,261 | 5,044,049 | ||||||
| Dividend payable | 790,551 | - | ||||||
| Due to related parties | 24,644 | 1,384,644 | ||||||
| Total Current Liabilities | 38,167,562 | 42,466,795 | ||||||
| OTHER LIABILITIES: | ||||||||
| Long-term bank loans - non-current portion | 22,720,576 | 22,570,755 | ||||||
| Total Liabilities | 60,888,138 | 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 March 31, 2016 and December 31, 2015) | 79,055 | 79,055 | ||||||
| Additional paid-in capital | 111,008,085 | 111,008,085 | ||||||
| Retained earnings | 28,427,110 | 34,318,040 | ||||||
| Statutory reserve | 9,391,827 | 9,391,827 | ||||||
| Accumulated other comprehensive loss | (3,515,951 | ) | (4,326,351 | ) | ||||
| Total equity attributable to owners of the company | 145,390,126 | 150,470,656 | ||||||
| Non-controlling interest | 16,059,719 | 16,369,167 | ||||||
| Total Shareholders' Equity | 161,449,845 | 166,839,823 | ||||||
| Total Liabilities and Shareholders' Equity | $ | 222,337,983 | $ | 231,877,373 | ||||
| Pingtan Marine Enterprises, Ltd. | Page 7 |
| May 10, 2016 |
| PINGTAN MARINE ENTERPRISE LTD. AND SUBSIDIARIES | ||
| CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) | ||
| (IN U.S. DOLLARS) | ||
| For the Three Months Ended March 31, | ||||||||
| 2016 | 2015 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net (loss) income | $ | (5,478,850 | ) | $ | 8,416,262 | |||
| Adjustments to reconcile net (loss) income from operations to net cash provided by operating activities: | ||||||||
| Depreciation | 1,682,985 | 1,528,756 | ||||||
| Increase in allowance for doubtful accounts | 277,982 | 160,765 | ||||||
| Increase in reserve for inventories | 1,550,335 | - | ||||||
| Loss on equity method investment | 10,316 | 3,345 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | 3,406,211 | 19,795,236 | ||||||
| Inventories | (2,967,993 | ) | 7,266,034 | |||||
| Advances to suppliers | 170,802 | - | ||||||
| Prepaid expenses | 1,266 | 13,289 | ||||||
| Prepaid expenses - related parties | 1,860,757 | (10,140,274 | ) | |||||
| Deferred expenses - related parties | - | 472,387 | ||||||
| Other receivables | (17 | ) | 164,836 | |||||
| Other receivables - related parties | (97 | ) | - | |||||
| Accounts payable | (37,895 | ) | 122,267 | |||||
| Accounts payable - related parties | 656,067 | (2,307,645 | ) | |||||
| Advances from customers | - | (155,489 | ) | |||||
| Accrued liabilities and other payables | (507,011 | ) | 792,197 | |||||
| Due to related parties | - | 3 | ||||||
| NET CASH PROVIDED BY OPERATING ACTIVITIES | 624,858 | 26,131,969 | ||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Refunds from commercial retail space prepayments | - | 22,497,898 | ||||||
| Purchase of property, plant and equipment | (113,479 | ) | (16,361 | ) | ||||
| Prepayments made for long-term assets | (20,108,663 | ) | - | |||||
| Proceeds from transferring equity method investment share | 15,291,759 | �� | - | |||||
| Payments for equity method investment | - | (40,744,483 | ) | |||||
| NET CASH USED IN INVESTING ACTIVITIES | (4,930,383 | ) | (18,262,946 | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Proceeds from short-term bank loans | 3,156,505 | 7,153,729 | ||||||
| Repayments of short-term bank loans | (7,214,044 | ) | (6,158,048 | ) | ||||
| Repayments of long-term bank loans | - | (6,506,894 | ) | |||||
| Increase in restricted cash | (611,670 | ) | - | |||||
| Advances from related parties | 200,000 | 1,100,000 | ||||||
| Payments made for dividend | - | (790,551 | ) | |||||
| Capital contribution from non-controlling interest | - | 65,191,173 | ||||||
| Payments made to related parties in connection with the termination of VIE | - | (13,527,168 | ) | |||||
| NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES | (4,469,209 | ) | 46,462,241 | |||||
| EFFECT OF EXCHANGE RATE ON CASH AND CASH EQUIVALENTS | (90,453 | ) | 296,407 | |||||
| NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | (8,865,187 | ) | 54,627,671 | |||||
| CASH AND CASH EQUIVALENTS - beginning of period | 11,448,684 | 12,752,272 | ||||||
| CASH AND CASH EQUIVALENTS - end of period | $ | 2,583,497 | $ | 67,379,943 | ||||
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||||||
| Cash paid for: | ||||||||
| Interest | $ | 556,138 | $ | 939,951 | ||||
| Income taxes | $ | - | $ | - | ||||
| NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||||||||
| Acquisition of property and equipment by decreasing prepayment for long-term assets | $ | 10,551,314 | $ | - | ||||
| Offset other receivables - related parties against due to related parties | $ | 1,560,000 | $ | - | ||||