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 toproviding 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.
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| 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 toprior 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 | ||||
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| November 8, 2016 |
Consolidated Financial and Operating Review
Revenues
Revenues from the fishing business and sales of frozen fish and other marine catches, forthe 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 $46.7million 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 millionin theprior-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 endedSeptember 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 tothe 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.
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| 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 tohttp://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
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| 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 | ||||||||||||
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| 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 | ||||
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| 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 | ) | ||||
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| 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 | $ | - | ||||