WEB NEWS Comments & Business Outlook
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME
(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 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 COMPANY
Basic and diluted
$
(0.06
)
$
0.10
WEIGHTED AVERAGE ORDINARY SHARES OUTSTANDING:
Basic and diluted
79,055,053
79,055,053
Comments & Business Outlook
PINGTAN MARINE ENTERPRISE LTD. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(IN U.S. DOLLARS)
For the Three Months Ended September 30,
For the Nine Months Ended September 30,
2015
2014
2015
2014
REVENUE
$
2,740,981
$
54,416,793
$
46,727,808
$
176,909,177
COST OF REVENUE
9,248,696
38,932,806
40,562,651
118,388,729
GROSS (LOSS) PROFIT
(6,507,715
)
15,483,987
6,165,157
58,520,448
OPERATING EXPENSES:
Selling
312,574
675,442
1,309,859
1,914,815
General and administrative
733,923
828,530
2,547,225
2,407,370
Total Operating Expenses
1,046,497
1,503,972
3,857,084
4,322,185
(LOSS) INCOME FROM OPERATIONS
(7,554,212
)
13,980,015
2,308,073
54,198,263
OTHER INCOME (EXPENSE):
Interest income
10,875
4,845
98,894
14,016
Interest expense
(817,321
)
(679,484
)
(2,856,516
)
(3,088,685
)
Foreign currency transaction (loss) gain
(774,934
)
171,058
(714,620
)
(286,576
)
Grant income
31,691,166
716,121
31,691,166
1,240,542
Investment (loss) income from cost method investment
(3,264
)
2,399
417,434
348,382
Loss on equity method investment
(34,187
)
-
(37,545
)
-
Loss on fixed assets disposal
-
-
(1,544,277
)
-
Other income (expense)
1
(424
)
(212
)
(335
)
Total Other Income (Expense), net
30,072,336
214,515
27,054,324
(1,772,656
)
INCOME BEFORE INCOME TAXES
22,518,124
14,194,530
29,362,397
52,425,607
INCOME TAXES
-
-
-
-
NET INCOME
$
22,518,124
$
14,194,530
$
29,362,397
$
52,425,607
LESS: NET INCOME ATTRIBUTABLE TO THE NON-CONTROLLING INTEREST
1,834,497
-
1,925,443
-
NET INCOME ATTRIBUTABLE TO OWNERS OF THE COMPANY
$
20,683,627
$
14,194,530
$
27,436,954
$
52,425,607
COMPREHENSIVE INCOME:
NET INCOME
22,518,124
14,194,530
29,362,397
52,425,607
OTHER COMPREHENSIVE (LOSS) INCOME
Unrealized foreign currency translation (loss) gain
(6,948,652
)
302,391
(5,848,277
)
(690,948
)
COMPREHENSIVE INCOME
$
15,569,472
$
14,496,921
$
23,514,120
$
51,734,659
LESS: COMPREHENSIVE INCOME ATTRIBUTABLE TO THE NON-CONTROLLING INTEREST
1,277,639
-
1,600,169
-
COMPREHENSIVE INCOME ATTRIBUTABLE TO OWNERS OF THE COMPANY
$
14,291,833
$
14,496,921
$
21,913,951
$
51,734,659
NET INCOME PER ORDINARY SHARE ATTRIBUTABLE TO OWNERS OF THE COMPANY
Basic and diluted
$
0.26
$
0.18
$
0.35
$
0.66
WEIGHTED AVERAGE ORDINARY SHARES OUTSTANDING:
Basic and diluted
79,055,053
79,055,053
79,055,053
79,055,053
Management Discussion and Analysis
Revenue
We recognize revenue from sales of frozen fish and other marine catches when persuasive evidence of an arrangement exists, delivery has occurred, the price to the customer is fixed or determinable, and collection of the resulting receivable is reasonably assured.
With respect to the sales to third party customers the majority of whom are sole proprietor regional wholesalers in China, we recognize revenue when customers receive purchased goods at our cold storage warehouse, after payment is received or credit sale is approved for recurring customers with excellent payment histories.
We do not offer promotional payments, customer coupons, rebates or other cash redemption offers to customers. We do not accept returns from customers. Deposits or advance payments from customers prior to delivery of goods are recorded as advances from customers.
As a result of the factors described above, our net income was $22,518,124, or $0.26 per ordinary share (basic and diluted) for the three months ended September 30, 2015, as compared with net income of $14,194,530, or $0.18 per ordinary share (basic and diluted) for the three months ended September 30, 2014, an increase of $8,323,594 or 58.6%. Our net income was $29,362,397, or $0.35 per ordinary share (basic and diluted) for the nine months ended September 30, 2015, as compared with $52,425,607, or $0.66 per ordinary share (basic and diluted) for the nine months ended September 30, 2014, a decrease of $23,063,210 or 44.0%.
Comments & Business Outlook
PINGTAN MARINE ENTERPRISE LTD. AND SUBSIDIARIES
(IN U.S. DOLLARS)
For the Three Months For the Six Months
2015 2014 2015 2014
REVENUE $ 15,254,003 $ 56,909,432 $ 43,986,827 $ 122,492,384
COST OF REVENUE 14,047,666 39,472,433 31,313,955 79,455,923
GROSS PROFIT 1,206,337 17,436,999 12,672,872 43,036,461
OPERATING EXPENSES:
Selling 291,765 568,422 997,285 1,239,373
General and administrative 369,088 798,569 1,813,302 1,578,840
Total Operating Expenses 660,853 1,366,991 2,810,587 2,818,213
INCOME FROM OPERATIONS 545,484 16,070,008 9,862,285 40,218,248
OTHER INCOME (EXPENSE):
Interest income 68,787 5,746 88,019 9,171
Interest expense (1,085,551 ) (1,276,778 ) (2,039,195 ) (2,409,201 )
Foreign currency transaction gain (loss) 22,933 (302,850 ) 60,314 (457,634 )
Grant income - - - 524,421
Investment income from cost method investment 420,698 345,983 420,698 345,983
Loss on equity method investment (13 ) - (3,358 ) -
Loss on fixed assets disposal (1,556,353 ) - (1,556,353 ) -
Other (expense) income (50 ) 252 (213 ) 89
Total Other Income (Expense), net (2,129,549 ) (1,227,647 ) (3,030,088 ) (1,987,171 )
(LOSS) INCOME BEFORE INCOME TAXES (1,584,065 ) 14,842,361 6,832,197 38,231,077
INCOME TAXES - - - -
NET (LOSS) INCOME $ (1,584,065 ) $ 14,842,361 $ 6,832,197 $ 38,231,077
LESS: NET (LOSS) INCOME ATTRIBUTABLE TO THE NON-CONTROLLING INTEREST 102,069 - (90,946 ) -
NET (LOSS) INCOME ATTRIBUTABLE TO OWNERS OF THE COMPANY $ (1,481,996 ) $ 14,842,361 $ 6,741,251 $ 38,231,077
COMPREHENSIVE INCOME:
NET (LOSS) INCOME (1,584,065 ) 14,842,361 6,832,197 38,231,077
OTHER COMPREHENSIVE INCOME (LOSS):
Unrealized foreign currency translation gain (loss) 465,695 306,262 1,112,451 (993,339 )
COMPREHENSIVE (LOSS) INCOME $ (1,118,370 ) $ 15,148,623 $ 7,944,648 $ 37,237,738
LESS: COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO THE NON-CONTROLLING INTEREST 64,813 - (322,530 ) -
COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO OWNERS OF THE COMPANY $ (1,053,557 ) $ 15,148,623 $ 7,622,118 $ 37,237,738
NET (LOSS) INCOME PER ORDINARY SHARE ATTRIBUTABLE TO OWNERS OF THE COMPANY
Basic and diluted $ (0.02 ) $ 0.19 $ 0.09 $ 0.48
WEIGHTED AVERAGE ORDINARY SHARES OUTSTANDING:
Basic and diluted 79,055,053 79,055,053 79,055,053 79,055,053
Management Discussion and Analysis
Revenue
We recognize revenue from sales of frozen fish and other marine catches when persuasive evidence of an arrangement exists, delivery has occurred, the price to the customer is fixed or determinable, and collection of the resulting receivable is reasonably assured.
With respect to the sales to third party customers the majority of whom are sole proprietor regional wholesalers in China, we recognize revenue when customers receive purchased goods at our cold storage warehouse, after payment is received or credit sale is approved for recurring customers with excellent payment histories.
We do not offer promotional payments, customer coupons, rebates or other cash redemption offers to customers. We do not accept returns from customers. Deposits or advance payments from customers prior to delivery of goods are recorded as advances from customers.
For the three months ended June 30, 2015, we had revenue of $15,254,003, as compared to revenue of $56,909,432 for the three months ended June 30, 2014, a decrease of $41,655,429, or 73.2%. Sales volumes in the three months ended June 30, 2015 decreased 74.6% to 4,851,324 kg from 19,077,991 kg in the three months ended June 30, 2014. Average unit sale price increased 5.4% in the three months ended June 30, 2015 as compared to the three months ended June 30, 2014, which was primarily due to the different sales mix.
Net (loss) income
As a result of the factors described above, our net loss was $1,584,065 for the three months ended June 30, 2015, as compared with net income of $14,842,361 for the three months ended June 30, 2014, a change of $16,426,426 or 110.7%. Our net income was $6,832,197 for the six months ended June 30, 2015, as compared with $38,231,077 for the six months ended June 30, 2014, a decrease of $31,398,880 or 82.1%.
Comments & Business Outlook
Item 1.01 Entry into a Material Definitive Agreement.
The Master Agreement with Fuzhou Honglong provides for the purchase by the Company of four (4) fishing vessels, for $37.7 Million (RMB 230,600,000) in cash consideration. The Master Agreement with Fuzhou Yishun provides for the purchase by the Company of two (2) fishing vessels, for $18.6 Million (RMB 113,800,000) in cash consideration. Delivery of each vessel will be pursuant to a memorandum of agreement in the form provided as an exhibit to the Master Agreements. The closing of the sale of each vessel is conditioned on the delivery of certain documents, including the required government approvals (the “Closing”). During the time period between the signing of the Master Agreements and the Closing, the Company is entitled to 100% of the net profits received by each of the vessels. The Master Agreements contain customary representations and warranties and covenants of each party. Breaches of the representations and warranties will be subject to customary indemnification and termination provisions.
Comments & Business Outlook
For the Three Months Ended
2015
2014
REVENUE
$
28,732,824
$
65,582,952
COST OF REVENUE
17,266,289
39,983,490
GROSS PROFIT
11,466,535
25,599,462
OPERATING EXPENSES:
Selling
705,520
670,951
General and administrative
1,444,214
780,271
Total Operating Expenses
2,149,734
1,451,222
INCOME FROM OPERATIONS
9,316,801
24,148,240
OTHER INCOME (EXPENSE):
Interest income
19,232
3,425
Interest expense
(953,644
)
(1,132,423
)
Foreign currency transaction gain (loss)
37,381
(154,784
)
Grant income
-
524,421
Loss on equity method investment
(3,345
)
-
Other expense
(163
)
(163
)
Total Other Income (Expense), net
(900,539
)
(759,524
)
INCOME BEFORE INCOME TAXES
8,416,262
23,388,716
INCOME TAXES
-
-
NET INCOME
$
8,416,262
$
23,388,716
LESS: NET INCOME ATTRIBUTABLE TO THE NON-CONTROLLING INTEREST
193,015
-
NET INCOME ATTRIBUTABLE TO OWNERS OF THE COMPANY
$
8,223,247
$
23,388,716
COMPREHENSIVE INCOME:
NET INCOME
8,416,262
23,388,716
OTHER COMPREHENSIVE INCOME (LOSS):
Unrealized foreign currency translation gain (loss)
646,756
(1,299,601
)
COMPREHENSIVE INCOME
$
9,063,018
$
22,089,115
LESS: COMPREHENSIVE INCOME ATTRIBUTABLE TO THE NON-CONTROLLING INTEREST
387,343
-
COMPREHENSIVE INCOME ATTRIBUTABLE TO OWNERS OF THE COMPANY
$
8,675,675
$
22,089,115
NET INCOME PER ORDINARY SHARE ATTRIBUTABLE TO OWNERS OF THE COMPANY
Basic and diluted
$
0.10
$
0.30
WEIGHTED AVERAGE ORDINARY SHARES OUTSTANDING:
Basic and diluted
79,055,053
79,055,053
Management Discussion and Analysis
Revenue
We recognize revenue from sales of frozen fish and other marine catches when persuasive evidence of an arrangement exists, delivery has occurred, the price to the customer is fixed or determinable, and collection of the resulting receivable is reasonably assured.
With respect to the sales to third party customers the majority of whom are sole proprietor regional wholesalers in China, we recognize revenue when customers receive purchased goods at our cold storage warehouse, after payment is received or credit sale is approved for recurring customers with excellent payment histories.
We do not offer promotional payments, customer coupons, rebates or other cash redemption offers to customers. We do not accept returns from customers. Deposits or advance payments from customers prior to delivery of goods are recorded as advances from customers.
For the three months ended March 31, 2015, we had revenue of $28,732,824, as compared to revenue of $65,582,952 for the three months ended March 31, 2014, a decrease of $36,850,128, or 56.2%. Sales volumes in the three months ended March 31, 2015 decreased 53.9% to 10,535,326 kg from 22,846,444 kg in the three months ended March 31, 2014. Average unit sale price decreased 4.9% in the three months ended March 31, 2015 as compared to the three months ended March 31, 2014, which was primarily due to the different sales mix.
Our decrease in revenue is attributable to the fact that, 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 to fight illegal fishing activities. As a result, all licensed fishing vessels operating in the Indonesian waters have been informed by the Indonesian government to only operate within strict guidelines in order to avoid potential enforcement actions by the Indonesian Navy such as boat seizures.
We currently operate 129 fishing vessels and 117 of these vessels operate in the Arafura Sea of Indonesia. To cooperate and remain in compliance with the Indonesian government’s fishing license check procedures, in January 2015, we lowered our operation to approximately half of normal level; and from February 2015, we have temporarily ceased operations in the Indonesian waters. Since we derive a majority of our revenue from this area, this temporary ban caused a significant drop in our production. As a result, our sales for the three months ended March 31, 2015 decreased significantly as compared to the three months ended March 31, 2014.
The Indonesian government had previously expected the license check of fishing vessels to be completed by April 30, 2015. As of the date of this report, the checking was still in process. While we believe that over the long-term the Indonesian government’s anti illegal fishing measures will be beneficial to fully licensed fishing companies such as PME, the company cannot guarantee when fishing will resume in this area, and our financial condition and results of operation will continue to be materially impacted while this moratorium is in existence.
As a result of the factors described above, our net income was $8,416,262 for the three months ended March 31, 2015, as compared with $23,388,716 for the three months ended March 31, 2014, a decrease of $14,972,454 or 64.0%.
Comments & Business Outlook
Item 7.01 Regulation FD Disclosure.
Comments & Business Outlook
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
0.00
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
Management Discussion and Analysis
Revenue
With respect to the sales to third party customers the majority of whom are sole proprietor regional wholesalers in China, we recognize revenue when customers receive purchased goods at our cold storage warehouse, after payment is received or credit sale is approved for recurring customers with excellent payment histories.
We do not offer promotional payments, customer coupons, rebates or other cash redemption offers to customers. We do not accept returns from customers. Deposits or advance payments from customers prior to delivery of goods are recorded as advances from customers.
For the year ended December 31, 2014, we had revenue of approximately $233,427,000, as compared to revenue of approximately $122,668,000 for the year ended December 31, 2013, an increase of approximately $110,759,000, or 90.3%. The increase was mainly due to increase in sales volume as a result of the addition of 66 fishing vessels into our 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 our operation in the year ended December 31, 2014. Sales volumes in the year ended December 31, 2014 increased 77.0% to 76,402,423 kg from 43,171,311 kg in the year ended December 31, 2013. Average unit sales prices increased 7.7% in the year ended December 31, 2014 compared to the year ended December 31, 2013, which was driven by the higher demand of natural seafood in China.
Comments & Business Outlook
Item 7.01 Regulation FD Disclosure.
Comments & Business Outlook
Item 1.01 Entry into a Material Definitive Agreement.
In conjunction with the execution of the Investment Agreement, the Company terminated its existing variable interest entity agreements, or VIEs, as permitted by the laws of the People’s Republic of China (the “VIE Termination”), pursuant to an Equity Transfer Agreement dated February 9, 2015 (the “Equity Transfer Agreement”), entered into by and among Ms. Honghong Zhuo, Mr. Zhiyang Lin (each a shareholder of Pingtan Fishing, together the “Shareholders”), Pingtan Fishing and Fujian Heyue Marine Fishing Development Co., Ltd. (“Fujian Heyue”), and an Agreement of Termination, entered into by and among Pingtan Guansheng Ocean Fishing Co., Ltd., a wholly-owned subsidiary of the Company (“WFOE”), Pingtan Fishing and the Shareholders. Pursuant to the Equity Transfer Agreement, the Shareholders transferred 100% of their equity interest to Fujian Heyue. Fujian Heyue was established as a wholly-owned subsidiary of WFOE. This VIE Termination provides the Company with direct ownership of Pingtan Fishing through the WFOE rather than contractual ownership through the VIE structure.
Upon the VIE Termination and the closing of the Investment, China Agriculture will become the owner of 8% of Pingtan Fishing and Fujian Heyue will become the 92% equity owner of Pingtan Fishing.
Comments & Business Outlook
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(IN U.S. DOLLARS)
For the Three Months Ended
For the Nine Months Ended
September 30,
September 30,
2014
2013
2014
2013
(As Restated)
(As Restated)
REVENUE
Revenue
$
54,416,793
$
20,576,492
$
176,909,177
$
51,302,671
Revenue - related party
-
32,615
-
10,338,269
Total Revenue
54,416,793
20,609,107
176,909,177
61,640,940
COST OF REVENUE
Cost of revenue
38,932,806
12,956,478
118,388,729
32,909,027
Cost of revenue - related party
-
20,413
-
6,470,581
Total Cost of Revenue
38,932,806
12,976,891
118,388,729
39,379,608
GROSS PROFIT
15,483,987
7,632,216
58,520,448
22,261,332
OPERATING EXPENSES:
Selling
675,442
362,000
1,914,815
730,734
General and administrative
828,530
1,178,033
2,407,370
2,345,569
Total Operating Expenses
1,503,972
1,540,033
4,322,185
3,076,303
INCOME FROM OPERATIONS
13,980,015
6,092,183
54,198,263
19,185,029
OTHER INCOME (EXPENSE):
Interest income
4,845
2,305
14,016
4,861
Interest expense
(679,484
)
(1,414,015
)
(3,088,685
)
(2,123,800
)
Foreign currency transaction gain (loss)
171,058
194,433
(286,576
)
(25,972
)
Grant income
716,121
168,900
1,240,542
204,492
Investment income
2,399
218
348,382
69,289
Other (expense) income
(424
)
7
(335
)
2,021
Total Other Income (Expense), net
214,515
(1,048,152
)
(1,772,656
)
(1,869,109
)
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
14,194,530
5,044,031
52,425,607
17,315,920
INCOME TAXES
-
-
-
-
NET INCOME FROM CONTINUING OPERATIONS
14,194,530
5,044,031
52,425,607
17,315,920
NET INCOME FROM DISCONTINUED OPERATIONS, NET OF INCOME TAX
-
12,362,523
-
39,461,777
NET INCOME
$
14,194,530
$
17,406,554
$
52,425,607
$
56,777,697
COMPREHENSIVE INCOME:
NET INCOME
$
14,194,530
$
17,406,554
$
52,425,607
$
56,777,697
OTHER COMPREHENSIVE INCOME Foreign currency translation gain (loss)
302,391
796,724
(690,948
)
6,551,401
TOTAL COMPREHENSIVE INCOME
$
14,496,921
$
18,203,278
$
51,734,659
$
63,329,098
BASIC AND DILUTED EARNINGS PER SHARE
From continuing operations
$
0.18
$
0.06
$
0.66
$
0.22
From discontinued operations
0.00
0.16
0.00
0.50
Net income
$
0.18
$
0.22
$
0.66
$
0.72
WEIGHTED AVERAGE ORDINARY SHARES OUTSTANDING:
Basic and diluted
79,055,053
79,055,053
79,055,053
78,641,031
Management Discussion and Analysis
Revenue
We recognize revenue from sales of frozen fish and other marine catches when persuasive evidence of an arrangement exists, delivery has occurred, the price to the customer is fixed or determinable, and collection of the resulting receivable is reasonably assured.
With respect to the sales to third party customers the majority of whom are sole proprietor regional wholesalers in China, we recognize revenue when customers receive purchased goods at our cold storage warehouse, after payment is received or credit sale is approved for recurring customers with excellent payment histories.
We do not offer promotional payments, customer coupons, rebates or other cash redemption offers to customers. We do not accept returns from customers. Payments received from customers prior to delivery of goods are recorded as advance from customers.
Investor Alert
Item 4.02 Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Report.
• our audited consolidated balance sheets as of December 31, 2013 and 2012 and the related consolidated statements of income and comprehensive income for the years ended December 31, 2013 and 2012.
• our unaudited consolidated balance sheet as of September 30, 2013 and the related condensed consolidated statements of income and comprehensive income for the three and nine months ended September 30, 2013.
• our unaudited condensed consolidated balance sheets as of June 30, 2014 and 2013 and the related condensed consolidated statements of income and comprehensive income for the three and six months ended June 30,. 2014 and 2013.
• our unaudited condensed consolidated balance sheets as of March 31, 2014 and 2013 and the related condensed consolidated statements of income and comprehensive income for the three months ended March 31,. 2014 and 2013.
The Company, including the Audit Committee of the Board of Directors, has discussed these matters with the Company’s previous independent registered public accounting firm, UHY VOCATION HK CPA LIMITED.
We shall file an amended 10-K report for the year ended December 31, 2013. The amended Annual Report on Form 10-K/A of Pingtan Marine Enterprise Ltd for the year ended December 31, 2013 will reflect the restatement of our consolidated financial statements as of December 31, 2013 and 2012 and for the years ended December 31, 2013 and.2012.
We will file amended 10-Q reports for the periods ended June 30, 2014 and March 31, 2014. The amended Quarterly Reports on Form 10-Q/A of Pingtan Marine Enterprise Ltd for the periods ended June 30, 2014 and March 31, 2014 will reflect the restatement of our unaudited consolidated financial statements as of June 30, 2014 and March 31, 2014, and for the three and six months ended June 30, 2014 and 2013, and for the three months ended March 31, 2014 and 2013.
The Quarterly Reports on Form 10-Q of Pingtan Marine Enterprise Ltd for the period ended September 30. 2014 will reflect the restatement of our unaudited consolidated financial statements for the three and nine months ended September 30, 2013.
SPAC Activity
NEW YORK, Oct 25, 2012 /PRNewswire/ -- China Growth Equity Investment Ltd. (Nasdaq: CGEI; CGEIU; CGEIW) ("CGEI"), a special purpose acquisition company ("SPAC"), China Dredging Group Co., Ltd. ("CDGC") and Fujian Provincial Pingtan County Ocean Fishing Group Co., Ltd. ("Pingtan Fishing") today announced that CGEI and CDGC have entered into a definitive merger agreement for CGEI to merge with CDGC and that CGEI and Pingtan Fishing have entered into a definitive agreement for CGEI to acquire Pingtan Fishing. The parties expect the transactions to provide CDGC and Pingtan Fishing with necessary financial resources for the companies' next stage of growth.
CDGC, a British Virgin Islands holding company, is one of the leading independent (not state-owned) providers of dredging services in the PRC through its PRC subsidiary Fujian Xing Gang Port Service Co., Ltd., or Fujian Service. Pingtan Fishing is a rapidly growing fishing company and provider of quality seafood in the PRC.
The combined entity, which will be renamed "Pingtan Marine Enterprise Ltd.," intends to apply to be listed on NASDAQ under the ticker symbol "PME". Upon completion of the merger and the acquisition, successful entrepreneur Xinrong Zhuo, the founder, Chairman and controlling shareholder of both CDGC and Pingtan Fishing will be the chairman of the combined company.
The business combination is subject to the approval of CGEI's shareholders as well as other customary closing conditions. Assuming the closing conditions are met, the business combination is expected to be completed during the first quarter of 2013.
Pro forma fiscal year 2011 revenues and net income for CGEI, CDGC and Pingtan Fishing were $252.6 million and $106.8 million, respectively. For the 6 months ending June 30, 2012, pro forma combined revenues were $145.0 million and net income was $49.4 million.
"CGEI's combination with CDGC and Pingtan Fishing is the culmination of our search for a successful company with a proven track record of profitability and attractive growth prospects," said Xuesong Song, China Growth's board chairman. "We believe that CDGC's highly profitable dredging business represents a unique opportunity as one of the largest dredging providers in China. Pingtan Fishing provides the combined company with a strong and fast growing platform in a fragmented industry."
Added Mr. Zhuo, the Chairman of CDGC: "We are truly excited about the immediate positive impact of the capital this transaction will provide to help Pingtan Marine Enterprise execute on its long-term growth strategy with greater access to capital and a public currency to support additional future growth."
Reverse Merger Activity
NEW YORK, Oct 25, 2012 /PRNewswire/ -- China Growth Equity Investment Ltd. (Nasdaq: CGEI; CGEIU; CGEIW) ("CGEI"), a special purpose acquisition company ("SPAC"), China Dredging Group Co., Ltd. ("CDGC") and Fujian Provincial Pingtan County Ocean Fishing Group Co., Ltd. ("Pingtan Fishing") today announced that CGEI and CDGC have entered into a definitive merger agreement for CGEI to merge with CDGC and that CGEI and Pingtan Fishing have entered into a definitive agreement for CGEI to acquire Pingtan Fishing. The parties expect the transactions to provide CDGC and Pingtan Fishing with necessary financial resources for the companies' next stage of growth.
CDGC, a British Virgin Islands holding company, is one of the leading independent (not state-owned) providers of dredging services in the PRC through its PRC subsidiary Fujian Xing Gang Port Service Co., Ltd., or Fujian Service. Pingtan Fishing is a rapidly growing fishing company and provider of quality seafood in the PRC.
The combined entity, which will be renamed "Pingtan Marine Enterprise Ltd.," intends to apply to be listed on NASDAQ under the ticker symbol "PME". Upon completion of the merger and the acquisition, successful entrepreneur Xinrong Zhuo, the founder, Chairman and controlling shareholder of both CDGC and Pingtan Fishing will be the chairman of the combined company.
The business combination is subject to the approval of CGEI's shareholders as well as other customary closing conditions. Assuming the closing conditions are met, the business combination is expected to be completed during the first quarter of 2013.
Pro forma fiscal year 2011 revenues and net income for CGEI, CDGC and Pingtan Fishing were $252.6 million and $106.8 million, respectively. For the 6 months ending June 30, 2012, pro forma combined revenues were $145.0 million and net income was $49.4 million.
"CGEI's combination with CDGC and Pingtan Fishing is the culmination of our search for a successful company with a proven track record of profitability and attractive growth prospects," said Xuesong Song, China Growth's board chairman. "We believe that CDGC's highly profitable dredging business represents a unique opportunity as one of the largest dredging providers in China. Pingtan Fishing provides the combined company with a strong and fast growing platform in a fragmented industry."
Added Mr. Zhuo, the Chairman of CDGC: "We are truly excited about the immediate positive impact of the capital this transaction will provide to help Pingtan Marine Enterprise execute on its long-term growth strategy with greater access to capital and a public currency to support additional future growth."
