AMCF Andatee China Marine Fuel Services Corp (CE)

Andatee China Marine Fuel Services Corporation (Nasdaq:AMCF), a leading independent operator engaged in the production, storage, distribution, trading of blended marine fuel oil for cargo and fishing vessels in China, today announced its financial results for the fourth quarter and fiscal year 2013.

Fiscal Year 2013 Financial Highlights

• Total sales in 2013 increased by 19.42% to $273.3 million from $228.8 million in 2012
• Gross profit in 2013 increased by 12.8% to $16.1 million from $14.3 million in 2012. Gross margin remained virtually unchanged at 5.9% and 6.2% in 2013 and 2012, respectively
• Income from operations in 2013 was $6.55 million as compared to $7.28 million in 2012
• Net loss was $1.01 million mainly due to a goodwill impairment of $1.2 million, as compared to net profit of $1.64 million in 2012

Mr. Wang Hao, Chairman and Chief Executive Officer of Andatee China Marine Fuel Services Corporation, commented, "In fiscal year 2013, despite the weakness in global economy, we were able to accomplish a nearly 20% top line growth in the marine fuel supplying market by expanding our distribution network, increasing our share of retail sales and adding more products offerings. The Company continues to maintain its position as a leading marine fuel supplier along the coast of East China. Our net loss was mainly the result of increased general and administrative expense, goodwill impairment loss and increased income tax expense, among which the goodwill impairment accounted for $1,234,709."

"Going forward, we expect to grow our business for higher revenue growth as well as higher profitability. In the meantime, we intend to begin implementing various cost control measures in our existing business lines with the aim of improving our margins and achieving profitability in 2014 and beyond."

About Andatee China Marine Fuel Services Corporation, Inc.

Andatee China Marine Fuel Services Corporation, through its subsidiaries, engages in the production, storage, distribution, and trading of blended marine fuel oil for cargo and fishing vessels in the People's Republic of China. It also produces customer specific products using its proprietary blending technology. The company sells its products through distributors to retail customers in Tianjin City, Liaoning, Shandong, Jiangsu, and Zhejiang Provinces. Andatee China Marine Fuel Services Corporation is based in Dalian, the People's Republic of China.

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, involving 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. These forward-looking statements are based upon our current expectations and projections about future events and generally relate to our plans, objectives and expectations for the development of our business. Although management believes that the plans and objectives reflected in or suggested by these forward-looking statements are reasonable, all forward-looking statements involve risks and uncertainties and actual future results may be materially different from the plans, objectives and expectations expressed in this press release. Accordingly, investors should not place any reliance on forward-looking statements as a prediction of actual results. 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 the risk factors discussed in the Company's periodic reports that are filed with the Securities and Exchange Commission and available on the SEC's 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 risk factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.

ANDATEE CHINA MARINE FUEL SERVICES CORPORATION. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
	For the years ended December 31,
	2013	2012
Revenues	$273,260,811	$228,813,813
Cost of revenues	257,129,767	214,517,593
Gross profit	16,131,044	14,296,220
Operating expenses
Selling expenses	1,081,253	1,341,203
General and administrative expenses	7,267,742	5,670,875
Goodwill impairment loss	1,234,709	--
Total operating expenses	9,583,704	7,012,078
Income from operations	6,547,340	7,284,142
Other income (expense)
Interest income	227,174	464,478
Interest expense	-5,442,725	-5,942,231
Income from equity investment	41,639	--
Change in fair value of warrants	-187,851	--
Other income (expense)	-136,960	306,714
Total other expense	-5,498,723	-5,171,039
Income before income tax provision	1,048,617	2,113,103
Provision for income taxes	2,269,865	703,138
Net income (loss)	-1,221,248	1,409,965
Less: net loss attributable to noncontrolling interest	-209,181	-233,731
Net income (loss) attributable to Andatee China Marine Fuel Services Corporation	$ (1,012,067)	$1,643,696
Comprehensive income (loss)
Net income (loss)	-1,221,248	1,409,965
Foreign currency translation adjustment	2,000,126	447,735
Comprehensive income	778,878	1,857,700
Less: comprehensive loss attributable to non-controlling interest	264,703	209,142
Comprehensive income attributable to Andatee China Marine Fuel Services Corporation	1,043,581	2,066,842
Weighted average number of shares:
Basic	9,857,086	9,610,159
Diluted	9,870,430	9,610,159
Earnings (loss) per share:
Basic	$ (0.10)	$0.17
Diluted	$ (0.10)	$0.17

ANDATEE CHINA MARINE FUEL SERVICES CORPORATION. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
	As of December 31,
	2013	2012
ASSETS
Current assets
Cash and cash equivalents	$22,638,820	$1,625,705
Restricted cash	99,659,597	9,173,002
Accounts receivable, net	45,818,721	18,220,089
Inventories, net	3,893,530	9,302,913
Advances to suppliers, net	25,930,533	16,387,613
Deposits for land use rights	720,084	698,291
Deferred financing costs, net	4,373,603	129,555
Other current assets	517,320	428,950
Deferred tax assets	--	840,540
Total current assets	203,552,208	56,806,658
Property, plant and equipment, net	54,292,903	40,880,091
Construction in progress	17,781,162	12,860,195
Intangible assets, net	16,289,315	8,953,602
Equity investment	1,351,428	--
Goodwill	--	1,213,036
Total assets	$293,267,016	$120,713,582
LIABILITIES AND EQUITY
Current liabilities
Short-term bank borrowings	$27,821,419	$9,314,247
Bank note payable	191,257,528	19,679,104
Accounts payable and accrued liabilities	3,156,079	8,367,697
Advances from customers	1,693,875	8,472,233
Loan from third parties	98,193	9,413,436
Related party loans payable	1,595,594	509,255
Taxes payable	6,254,057	2,719,517
Other liabilities	1,149,298	1,777,089
Total current liabilities	233,026,043	60,252,578
Warrant liability	290,687	--
Total liabilities	233,316,730	60,252,578
Commitments and contingencies
Equity
Common stock, $0.001 par value; 50,000,000 shares authorized; 10,255,813 and 9,610,159 shares issued; 10,164,621 and 9,518,967 shares outstanding	10,256	9,610
Treasury stock, at cost; 91,192 shares	(497,693)	-497,693
Additional paid-in capital	29,998,994	29,888,556
Accumulated other comprehensive income	6,206,460	4,273,238
Retained earnings	17,990,881	19,513,573
Statutory reserve	3,932,585	3,421,960
Total stockholders' equity of the Company	57,641,483	56,609,244
Noncontrolling interest	2,308,803	3,851,760
Total equity	59,950,286	60,461,004
Total liabilities and equity	$293,267,016	$120,713,582

ANDATEE CHINA MARINE FUEL SERVICES CORPORATION. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
	For the years ended December 31,
	2013	2012
Cash flows from operating activities
Net (loss) income	$ (1,221,248)	$1,409,965
Adjustments to reconcile net income(loss) to net cash
used in operating activities:
Depreciation	2,122,918	1,826,803
Amortization	476,809	483,205
Bad debt provision	522,040	543,798
Change in inventory reserve	-30,240	46,731
Deferred tax provision (benefit)	855,557	-754,722
Amortization of stock-based compensation to consulting firm	425,000	--
Amortization of stock-based compensation to directors	102,376	--
Income from equity investment	-41,639	--
Goodwill impairment	1,234,709	--
Change in fair value of warrants	187,851	--
Changes in operating assets and liabilities:
Accounts receivable	-27,083,195	1,610,536
Inventories	5,656,209	7,546,758
Advances to suppliers	-9,075,970	-307,837
Other current assets	221,303	3,906,267
Accounts payable and accrued liabilities	-6,578,103	-9,338,416
Advances from customers	-6,951,641	-4,946,044
Taxes payable	3,405,030	-1,022,057
Other liabilities	212,845	-1,572,386
Net cash used in operating activities	-35,559,389	-567,399
Cash flows from investing activities
Acquisition of equity method investee	-1,292,303	--
Additions to construction in progress and property and equipment	-18,563,989	-859,163
Addition to intangible assets	-8,623,375	-1,722,815
Proceeds from termination of land use right	--	1,290,662
Proceeds from termination of leasehold right	1,373,072	--
Acquisition of non-controlling interest	-1,728,455	--
Notes receivable	--	1,332,614
Net cash (used in) provided by investing activities	-28,835,050	41,298
Cash flows from financing activities
Proceeds from short-term loans	33,842,178	35,079,384
Repayments of short-term loans	-15,861,401	-30,051,938
Proceeds from bank notes	281,182,457	96,773,170
Repayments of bank notes	-112,430,337	-122,632,230
Restricted cash, net	-89,033,196	13,556,969
Deferred financing costs	-4,185,143	-129,508
(Repayment) proceeds of loan from unrelated parties	-9,484,694	7,823,556
Proceeds (repayment) of loans from related parties	1,055,754	-1,795,160
Net cash provided by (used in) financing activities	85,085,618	-1,375,757
Effect of exchange rate changes on cash and cash equivalents	321,936	34,548
Net increase (decrease) in cash and cash equivalents	21,013,115	-1,867,310
Cash and cash equivalents, beginning of year	$1,625,705	$3,493,015
Cash and cash equivalents, end of year	$22,638,820	$1,625,705
Supplemental cash flow information
Interest paid	$9,750,500	$5,063,860
Income taxes paid	$678,374	$2,323,632
Transfer from construction-in-progress to fixed assets	$12,413,981	$ --
Capitalized interest expense	$655,438	$ --

CONTACT: Thomas Yang
         Andatee Marine Fuel Services Corporation Limited
         Unit C, No. 68 West Binhai Road,
         Xigang District, Dalian Liaoning, China (map)
         Phone: 011-86411-8240-8219
         Facsimile: 011-86411-8368-8835
         Website: www.andatee.com