China Clean Energy Announces First Quarter 2009 Results
FUQING CITY,
Energy Inc. (OTC Bulletin Board: CCGY) (“China Clean Energy”, the “Company”),
a producer of biodiesel fuel and environmentally-friendly specialty chemical
products made from renewable resources in
(“PRC”), today reported financial results for the first quarter ended
31, 2009
First Quarter 2009 Highlights
-- Revenue totaled $2.8 million
-- Gross profit totaled $356,332
-- Adjusted EBITDA was $194,118
-- Operating loss was $159,038
-- Net loss was $143,484
“The slowdown in the global economy and lower oil prices adversely
affected both our specialty chemical and biodiesel business during the first
quarter,” said Mr. Tai-ming Ou, China Clean Energy’s Chairman and CEO. “As we
move into the second quarter we are encouraged by signs of recovery in demand
for our products and anticipate the first quarter of 2009 to be the low point
of the year. We also expect construction of our Jiangyin plant to be
completed in
full capacity by the second quarter of 2010.”
First Quarter 2009 Results
China Clean Energy’s net revenue in the first quarter was
down 37.3% from the first quarter of 2008. The decline in revenue was driven
by lower sales volume and lower sales prices primarily for specialty chemical
products, due to the decline in demand caused by the global economic slowdown.
In addition, the sharp decline in crude oil price during the second half of
2008 has negatively affected selling prices of biodiesel in
to the first quarter of 2008 and fourth quarter of 2008, the selling price of
biodiesel decreased by about 29% and 19%, respectively.
Gross profit in the first quarter of 2009 was
the first quarter of 2008. Gross margin was 12.7% in the first quarter of
2009, down from 23.3% during the same period in 2008 driven by lower selling
prices and higher manufacturing overhead costs.
Operating expense in the first quarter of 2009 was
29.6% decrease from
stock-based compensation expenses and decrease in selling expenses related to
specialty chemical product exports. In the first quarter of 2009 the Company
recorded an operating loss of
Adjusted EBITDA for the first quarter 2009 was
Net loss for the first quarter of 2009 was
of
Financial Condition
As of
approximately
equity at
Recent Events
On
Fujian Zhongde Technology Co., Ltd., secured a credit line for up to
million
Commercial Bank.
On
plant is now expected to be completed in
month delay from the Company’s previous estimate. The delay in the plant’s
construction has been due to the rainy season, as well as to delays resulting
from a construction accident suffered by one of the Company’s contractors.
This accident has caused no other impact on the Company.
Conference Call
China Clean Energy will hold its first quarter 2009 conference call for
all interested persons at
its results. To participate in the live conference call, please dial the
following number five to ten minutes prior to the scheduled conference call
time: +1-888-419-5570. International callers should dial +1-617-896-9871.
When prompted by the operator, mention Conference Passcode 28126360. If you
are unable to participate in the call at this time, a replay will be available
for 14 days starting on
the replay, dial 888-286-8010 and International callers should dial
617-801-6888 and enter the passcode 61804670.
About China Clean Energy:
China Clean Energy, through its wholly-owned subsidiaries, Fujian Zhongde
Technology Co., Ltd. and Fujian Zhongde Energy Co., Ltd, is engaged in the
development, manufacturing, and distribution of biodiesel and specialty
chemical products made from renewable resources. For additional information
please visit: http://www.chinacleanenergyinc.com
Safe Harbor Statement
This announcement contains forward-looking statements within the meaning
of the safe harbor provisions of the Private Securities Litigation Reform Act
of 1995. All statements other than statements of historical fact in this
announcement are forward-looking statements, including but not limited to, the
Company’s ability to raise additional capital to finance the Company’s
activities; the effectiveness, profitability, and the marketability of its
products; legal and regulatory risks associated with the share exchange; the
future trading of the common stock of the Company; the ability of the Company
to expand its production capacity; the period of time for which its current
liquidity will enable the Company to fund its operations; the Company’s
ability to protect its proprietary information; general economic and business
conditions; the volatility of the Company’s operating results and financial
condition; the Company’s ability to attract or retain qualified senior
management personnel and research and development staff; and other risks
detailed in the Company’s filings with the Securities and Exchange Commission.
These forward-looking statements involve known and unknown risks and
uncertainties and are based on current expectations, assumptions, estimates
and projections about the Company and the industry. The Company undertakes no
obligation to update forward-looking statements to reflect subsequent
occurring events or circumstances, or to changes in its expectations, except
as may be required by law. Although the Company believes that the
expectations expressed in these forward looking statements are reasonable,
they cannot assure you that their expectations will turn out to be correct,
and investors are cautioned that actual results may differ materially from the
anticipated results.
--FINANCIAL TABLES FOLLOW--
CHINA CLEAN ENERGY INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 2009 AND 2008 (UNAUDITED)
2009 2008
REVENUES $2,806,262 $4,473,009
Less: cost of goods sold 2,449,930 3,429,773
GROSS PROFIT 356,332 1,043,236
OPERATING EXPENSE
Selling and marketing 48,056 87,881
General and administrative 441,390 603,887
Research and development 25,924 39,782
Total operating expense 515,370 731,550
INCOME (LOSS) FROM OPERATIONS (159,038) 311,686
OTHER INCOME (EXPENSE)
Interest income (expense), net 953 (25,667)
Other income (expense) (1,101) (25,653)
Change in fair value of warrants 26,064 --
Total other income (expense) 25,916 (51,320)
INCOME (LOSS) BEFORE INCOME TAXES (133,122) 260,366
PROVISION FOR INCOME TAXES 10,362 96,583
NET INCOME (LOSS) (143,484) 163,783
OTHER COMPREHENSIVE INCOME (LOSS)
Foreign currency translation
adjustment (45,210) 1,163,218
COMPREHENSIVE INCOME (LOSS) $(188,694) $1,327,001
BASIC AND DILUTED EARNINGS (LOSS) PER
SHARE
Weighted average number of shares 31,512,269 30,523,258
Earnings (loss) per share $(0.005) $0.005
CHINA CLEAN ENERGY INC. AND SUBSIDIARIES
RECONCILIATION OF ADJUSTED EBITDA TO NET INCOME
Adjusted EBITDA represents earnings before net interest expense, income
tax provision, depreciation and amortization, stock based compensation,
inventory write downs and other impairment charges. Our management believes
adjusted EBITDA is useful to investors because it is frequently used by
securities analysts, investors and other interested parties in evaluating
companies in our industry. In addition, our management believes that adjusted
EBITDA is useful in evaluating our operating performance compared to that of
other companies in our industry because the calculation of adjusted EBITDA
generally eliminates the effects of financing and income taxes and the
accounting effects of non cash charges, which items may vary for different
companies for reasons unrelated to overall operating performance. As a
result, our management uses adjusted EBITDA as a measure to evaluate the
performance of our business. However, adjusted EBITDA is not a recognized
measurement under generally accepted accounting principles, or GAAP, and when
analyzing our operating performance, investors should use adjusted EBITDA in
addition to, and not as an alternative for, income from operations and net
income, each as determined in accordance with GAAP. Because not all companies
use identical calculations, our presentation of adjusted EBITDA may not be
comparable to similarly titled measures of other companies. Furthermore,
adjusted EBITDA is not intended to be a measure of free cash flow for our
management’s discretionary use, as it does not consider certain cash
requirements such as a tax and debt service payments.
Adjusted EBITDA Q1 2009 Q1 2008
Net Income (143,484) 163,783
Depreciation and Amortization 235,699 185,778
Interest (953) 25,667
Taxes 10,362 96,583
Stock-based Compensation 93,094 253,618
Inventory Write-down 25,464 --
Change in Warrants Liability (26,064) --
Total Adjusted EBITDA 194,118 725,429
Adjusted EBITDA per share 0.01 0.02
CHINA CLEAN ENERGY INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31, 2009 AND DECEMBER 31, 2008
ASSETS
March 31, December 31,
2009 2008
(Unaudited)
CURRENT ASSETS
Cash and cash equivalents $2,458,843 $2,913,711
Accounts receivable, net of
allowance for doubtful accounts of
$165,354 and $136,389 as of March
31, 2009 and December 31, 2008,
respectively 1,265,617 1,092,768
Inventories, net 833,442 815,210
Advances for inventory and other
current assets 207,477 310,773
Total current assets 4,765,379 5,132,462
PLANT AND EQUIPMENT, NET 20,112,793 19,167,624
INTANGIBLE ASSETS, NET 5,007,252 5,072,626
ADVANCES ON EQUIPMENT PURCHASES 3,251,263 3,649,192
TOTAL ASSETS $33,136,687 $33,021,904
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $957,445 $350,618
Customer deposits 61,180 31,422
Accrued liabilities 219,606 349,435
Taxes payable 144,517 156,965
Long-term bank loans - current portion -- 236,308
Total current liabilities 1,382,748 1,124,748
WARRANT LIABILITIES 269,317 --
LONG-TERM BANK LOANS -- 21,553
COMMITMENTS AND CONTINGENCIES
Total liabilities 1,652,065 1,146,301
SHAREHOLDERS' EQUITY
Preferred stock, par value $0.001
per share, authorized 10,000,000
shares, no shares issued and
outstanding as of March 31, 2009
and December 31, 2008, respectively -- --
Common stock, par value $0.001 per
share, authorized 90,000,000
shares, 31,512,269 and 21,512,269
shares issued and outstanding as
of March 31, 2009 and December 31,
2008, respectively 3,151 3,151
Additional paid-in capital 12,137,396 21,584,006
Statutory reserves 1,465,519 1,457,432
Retained earnings 14,753,777 5,661,025
Accumulated other comprehensive income 3,124,779 3,169,989
Total shareholders' equity 31,484,622 31,875,603
Total liabilities and
shareholders' equity $33,136,687 $33,021,904
CHINA CLEAN ENERGY INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2009 AND 2008 (UNAUDITED)
2009 2008
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $(143,484) $163,783
Adjusted to reconcile net
income (loss) to cash provided
by operating activities:
Depreciation 177,236 126,371
Bad debt expense 29,153 --
Amortization of intangible
assets 58,463 59,407
Stock-based compensation
expense 93,094 253,618
Writedown of inventory 25,464 --
Loss on disposal of assets -- 490
Change in fair value of
warrants (26,064) --
Changes in operating assets and
liabilities
Accounts receivable (203,504) 1,028,595
Inventories (19,346) 440,923
Other receivables and prepaid
expenses -- 32,330
Advances for inventory and
other current assets 102,880 (23,660)
Accounts payable 607,346 (42,189)
Customer deposits 29,803 (43,216)
Accrued liabilities (129,361) 66,010
Taxes payables (12,235) (144,130)
Net cash provided by
operating activities 589,445 1,918,332
CASH FLOWS FROM INVESTING ACTIVITIES
Addition to construction in
progress (558,889) (3,711,599)
Purchase of equipment (2,102) (127,150)
Proceeds from sale of equipment -- 1,747
Advances for equipment purchase (194,631) (5,850,585)
Net cash used in investing
activities (755,622) (9,687,587)
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from issuance of
common stock -- 13,627,403
Payment on short-term bank
loans (236,002) (1,048,275)
Payment on long-term bank loans (21,525) (49,977)
Net cash used in financing
activities (257,527) 12,529,151
EFFECT OF EXCHANGE RATE ON CASH (31,164) 305,571
INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS (454,868) 5,065,467
CASH AND CASH EQUIVALENTS, beginning 2,913,711 1,133,555
CASH AND CASH EQUIVALENTS, ending $2,458,843 $6,199,022
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION
Interest expenses paid $2,652 $27,755
Income taxes paid $-- $86,113
Reclassification of advances of
equipment purchase to
construction in progress $587,612 --
For more information, please contact:
China Clean Energy Inc.
Shannon Yan, CFO
Email: shannon.yan@chinacleanenergyinc.com
CCG Investor Relations Inc.
Crocker Coulson, President
Phone: +1-646-213-1915 (New York)
Ed Job, CFA
Phone: +1-646-213-1914
Email: ed.job@ccgir.com
SOURCE China Clean Energy Inc.