XI'AN, China, May 15,
2013 /PRNewswire/ -- China Natural Gas, Inc. ("China Natural
Gas" or the "Company") (PINK: CHNG), a leading provider of
compressed natural gas (CNG) and LNG for vehicular fuel and
pipeline natural gas for industrial, commercial and residential use
in Xi'an, China, today announced its financial results
for the first quarter ended March 31,
2013.
First Quarter 2013 Results
Revenue in the first quarter of 2013 increased by 10.0% to
$35.5 million from $32.3 million in the first quarter of 2012,
driven by increased capacity of our LNG plant. Sales revenue of
natural gas grew by 9.5% year-over-year to $32.2 million, from $29.4
million in the first quarter of 2012. Gasoline revenue in
the first quarter of 2013 decreased by 42.5% to $0.5 million, from $0.8
million in the same period of the prior year, mainly because
the closure of one gasoline fueling stations during the fourth
quarter of 2012. Installation and automobile conversion services
revenue increased by 38.6% year-over-year to $2.8 million, from $2.1
million a year ago. In the first quarter of 2013, sales of
natural gas, gasoline, and installation and automobile conversion
services contributed 90.7%, 1.3%, and 8.0% of total revenue,
respectively.
Gross profit in the first quarter of 2013 increased 13.8% to
$12.9 million from $11.4 million in the same period of the prior
year. Gross margin in the first quarter of 2013 was 36.4%, compared
to 35.2% a year ago. Gross margin increased primarily due to the
increase in gross margin for our LNG business.
Operating income in the first quarter of 2013 was $5.8 million, an increase of 57.9% year-over-year
from $3.7 million, primarily
attributable to the increase in gross profit of LNG and decrease in
general and administrative expenses.
Income tax expense was $0.9
million at an effective tax rate of 15.9%, as compared to
$0.8 million at an effective tax rate
of 28.9% in the first quarter of 2012. The decrease of effective
income tax rate was primarily attributable to the reduced income
tax rate of 15% enjoyed by JBLNG beginning on January 1, 2013.
Net income in the first quarter of 2013 increased by 139.6% to
$4.7million or $0.22 per diluted share from $1.9 million or $0.10 per diluted share in the first quarter of
2012.
As of March 31, 2013, the Company
had $10.7 million of cash and cash
equivalents on hand, compared to $10.9
million of cash and cash equivalents as of December 31, 2012. The decrease was primarily
attributable to the construction of the LNG plant and other
projects, and the repayment of the loans from Shanghai Pudong
Development Bank.
Net cash provided by operating activities was $5.0 million for the first quarter of 2013, as
compared to net cash provided by operations of $7.4 million for the first quarter of 2012. The
decrease was primarily due to the increase in advances to
suppliers, accounts receivable and other receivable, and
adjustments for non-cash expense items.
About China Natural Gas, Inc.
China Natural Gas (http://www.naturalgaschina.com )
transports and sells natural gas to vehicular fueling terminals, as
well as commercial, industrial and residential customers through
its distribution networks in China's Shaanxi, Henan and Hubei Provinces. The Company owns
approximately 120 km of high-pressure pipelines and operates 20 CNG
fueling stations in Shaanxi
Province, 10 CNG fuelling stations in Henan Province and 1 CNG fueling station in
Hubei Province and one LNG factory
in Jingbian, Shaanxi province.
China Natural Gas' five primary business lines include: (1)
distribution and sales of CNG through Company-owned CNG fueling
stations serving hybrid (natural gas/gasoline) powered vehicles;
(2) installation, distribution and sales of piped natural gas to
residential and commercial customers through Company-owned
pipelines; (3) production and sales of LNG through our LNG
production facility in Jingbian County, Shaanxi Province; (4) distribution and sales
of gasoline through Company-owned CNG fueling stations for hybrid
(natural gas/gasoline) powered vehicles; and (5) conversion of
gasoline-fueled vehicles to hybrid (natural gas/gasoline) powered
vehicles at its automobile conversion workshops.
SAFE HARBOR: FORWARD-LOOKING STATEMENTS
This press release includes statements that may constitute
forward-looking statements made pursuant to the safe harbor
provision of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements can be identified by terminology
such as "will," "expects," "anticipates," "future," "intends,"
"plans," "believes," "estimates" and similar statements. For
example, statements about the future plans and goals of the JV with
CNPC and its prospects are forward looking and subject to risks.
China Natural Gas, Inc. may also make written or oral
forward-looking statements in its periodic reports to the U.S.
Securities and Exchange Commission on forms 10-K, 10-Q and 8-K, in
its annual report to shareholders, in press releases and other
written materials and in oral statements made by its officers,
directors or employees to fourth parties. Statements that are not
historical facts, including statements about the Company's beliefs
and expectations, are forward-looking statements. Forward-looking
statements involve inherent risks and uncertainties that could
cause actual results to differ materially from the forward-looking
statements. A number of important factors could cause actual
results to differ materially from those contained in any
forward-looking statement. Potential risks and uncertainties
include, but are not limited to, risks outlined in the Company's
filings with the U.S. Securities and Exchange Commission, including
its registration statements on Forms S-1 and S-3, in each case as
amended. The Company does not undertake any obligation to update
any forward-looking statement, except as required under applicable
law.
This release is not an offer of securities for sale in
the United States. Securities may
not be offered or sold in the United
States absent registration or an exemption from
registration. Any public offering of securities to be made in
the United States will be made by
means of a prospectus that may be obtained from the issuer or
selling security holder and that will contain detailed information
about the company and management, as well as financial
statements.
|
CHINA
NATURAL GAS, INC. AND SUBSIDIARIES
|
|
CONSOLIDATED BALANCE SHEETS
|
|
AS OF
MARCH 31, 2013 AND DECEMBER 31, 2012
|
|
(Stated
in US Dollars)
|
|
|
|
March
31, 2013
|
|
December 31, 2012
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
CURRENT
ASSETS:
|
|
|
|
|
|
|
|
Cash and
cash equivalents
|
|
$
|
10,700,924
|
|
$
|
10,857,456
|
|
Accounts
receivable, net
|
|
|
3,289,300
|
|
|
2,148,379
|
|
Other
receivables, net
|
|
|
969,170
|
|
|
458,605
|
|
Employee
advances
|
|
|
325,505
|
|
|
399,031
|
|
Inventories
|
|
|
3,041,500
|
|
|
2,473,933
|
|
Advances
to suppliers
|
|
|
8,449,792
|
|
|
4,869,606
|
|
Prepaid
expense and other current assets
|
|
|
2,724,481
|
|
|
3,541,431
|
|
Total
current assets
|
|
|
29,500,672
|
|
|
24,748,441
|
|
|
|
|
|
|
|
|
Investment
in unconsolidated joint ventures
|
|
|
-
|
|
|
1,587,000
|
|
Property
and equipment, net
|
|
|
177,582,135
|
|
|
179,515,563
|
|
Construction in progress
|
|
|
57,149,739
|
|
|
53,393,933
|
|
Goodwill
|
|
|
844,569
|
|
|
839,806
|
|
Other
intangible assets
|
|
|
21,094,232
|
|
|
21,400,924
|
|
Prepaid
expenses and other assets
|
|
|
7,367,886
|
|
|
7,015,142
|
|
TOTAL
ASSETS
|
|
$
|
293,539,233
|
|
$
|
288,500,809
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
|
|
|
|
|
Senior
notes- current maturities
|
|
$
|
38,569,998
|
|
$
|
38,352,498
|
|
Current
portion of bank loan payable
|
|
|
4,788,000
|
|
|
4,761,000
|
|
Redeemable
liabilities - warrants
|
|
|
17,500,000
|
|
|
17,500,000
|
|
Accounts
payable and accrued liabilities
|
|
|
6,752,805
|
|
|
6,756,278
|
|
Other
payable - related party
|
|
|
827,596
|
|
|
1,616,429
|
|
Short-term
borrowing - related party
|
|
|
2,679,945
|
|
|
2,679,945
|
|
Unearned
revenue
|
|
|
4,590,622
|
|
|
3,663,570
|
|
Accrued
interest
|
|
|
2,392,773
|
|
|
1,936,584
|
|
Taxes
payable
|
|
|
1,887,751
|
|
|
2,232,546
|
|
Total
current liabilities
|
|
|
79,989,490
|
|
|
79,498,850
|
|
|
|
|
|
|
|
|
LONG-TERM LIABILITIES:
|
|
|
|
|
|
|
|
Bank loan
payable, net of current portion
|
|
|
3,192,000
|
|
|
4,761,000
|
|
Total
long-term liabilities
|
|
|
3,192,000
|
|
|
4,761,000
|
|
Total
liabilities
|
|
$
|
83,181,490
|
|
$
|
84,259,850
|
|
|
|
|
|
|
|
|
STOCKHOLDERS' EQUITY:
|
|
|
|
|
|
|
|
Preferred
stock, par value $0.0001 per share, 5,000,000 authorized, none
issued and outstanding
|
|
$
|
-
|
|
$
|
-
|
|
Common
stock, par value $0.0001 per share, 45,000,000 authorized,
21,458,654 issued and outstanding at March 31, 2013 and December
31, 2012, respectively
|
|
|
2,145
|
|
|
2,145
|
|
Additional
paid-in capital
|
|
|
83,649,675
|
|
|
83,501,637
|
|
Accumulated other comprehensive income
|
|
|
22,579,356
|
|
|
21,276,931
|
|
Statutory
reserves
|
|
|
12,368,349
|
|
|
11,818,087
|
|
Retained
earnings
|
|
|
91,499,821
|
|
|
87,410,615
|
|
Noncontrolling interests
|
|
|
258,397
|
|
|
231,544
|
|
Total
stockholders' equity
|
|
|
210,357,743
|
|
|
204,240,959
|
|
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
$
|
293,539,233
|
|
$
|
288,500,809
|
|
CHINA
NATURAL GAS, INC. AND SUBSIDIARIES
|
|
CONSOLIDATED STATEMENTS OF INCOME AND
COMPREHENSIVE INCOME
|
|
FOR THE
THREE MONTHS PERI ODS ENDED MARCH 31, 2013 AND 2012
|
|
(Stated
in US Dollars)
|
|
|
|
Three
Months Ended March 31,
|
|
|
2013
|
|
2012
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
Natural
gas
|
|
$
|
32,180,068
|
|
$
|
29,399,687
|
|
Gasoline
|
|
|
474,999
|
|
|
825,895
|
|
Installation and other
|
|
|
2,844,263
|
|
|
2,051,736
|
|
|
|
35,499,330
|
|
|
32,277,318
|
|
|
|
|
|
|
|
|
Cost of
revenue
|
|
|
|
|
|
|
|
Natural
gas
|
|
|
20,953,430
|
|
|
19,274,859
|
|
Gasoline
|
|
|
420,661
|
|
|
788,144
|
|
Installation and other
|
|
|
1,196,648
|
|
|
852,245
|
|
|
|
22,570,739
|
|
|
20,915,248
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
|
12,928,591
|
|
|
11,362,070
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
|
|
|
|
Selling
|
|
|
5,553,854
|
|
|
4,950,800
|
|
General
and administrative
|
|
|
1,531,990
|
|
|
2,711,646
|
|
|
|
7,085,844
|
|
|
7,662,446
|
|
|
|
|
|
|
|
|
Income
from operations
|
|
|
5,842,747
|
|
|
3,699,624
|
|
|
|
|
|
|
|
|
Non-operating income (expense):
|
|
|
|
|
|
|
|
Interest
income
|
|
|
9,723
|
|
|
10,746
|
|
Interest
expense
|
|
|
(189,379)
|
|
|
(432,037)
|
|
Loss on
disposal of fixed assets
|
|
|
(57,045)
|
|
|
-
|
|
Loss on
sales of long term investment
|
|
|
(79,650)
|
|
|
-
|
|
Other
income (expense), net
|
|
|
26,199
|
|
|
(33,093)
|
|
Change in
fair value of warrants
|
|
|
-
|
|
|
(83)
|
|
Foreign
currency exchange loss
|
|
|
(813)
|
|
|
(505,940)
|
|
|
|
(290,965)
|
|
|
(960,407)
|
|
|
|
|
|
|
|
|
Income
before income tax
|
|
|
5,551,782
|
|
|
2,739,217
|
|
|
|
|
|
|
|
|
Provision for income tax
|
|
|
885,461
|
|
|
791,471
|
|
|
|
|
|
|
|
|
Net
income
|
|
|
4,666,321
|
|
|
1,947,746
|
|
Less:
Income/(loss) attributable to noncontrolling interests
|
|
|
26,853
|
|
|
(228,059)
|
|
Net
income attributable to China Natural Gas, Inc.
|
|
|
4,639,468
|
|
|
2,175,805
|
|
|
|
|
|
|
|
|
Other
comprehensive income
|
|
|
|
|
|
|
|
Foreign
currency translation gain
|
|
|
1,302,425
|
|
|
1,758,800
|
|
Comprehensive income
|
|
$
|
5,941,893
|
|
$
|
3,934,605
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding
|
|
|
|
|
|
|
|
Basic
|
|
|
21,458,654
|
|
|
21,458,654
|
|
Diluted
|
|
|
21,458,654
|
|
|
21,458,654
|
|
|
|
|
|
|
|
|
Earnings per share
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.22
|
|
$
|
0.10
|
|
Diluted
|
|
$
|
0.22
|
|
$
|
0.10
|
|
CHINA
NATURAL GAS, INC. AND SUBSIDIARIES
|
|
CONSOLIDATED STATEMENTS OF CASH
FLOWS
|
|
FOR THE
THREE MONTHS ENDED MARCH 31, 2013 AND 2012
|
|
(Stated
in US Dollars)
|
|
|
|
For the
Three Months Ended March 31,
|
|
|
2013
|
|
2012
|
|
|
|
|
|
|
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
|
4,666,321
|
|
|
1,947,746
|
|
Adjustments to reconcile net income to net cash
provided by operating activities:
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
3,453,703
|
|
|
3,411,668
|
|
Provision
for (recovery of) doubtful accounts
|
|
|
66,400
|
|
|
284,740
|
|
Loss
(Gain) on disposal of equipment
|
|
|
57,045
|
|
|
-
|
|
Loss
(Gain) on sales of long term investment
|
|
|
79,650
|
|
|
-
|
|
Stock-based compensation
|
|
|
148,038
|
|
|
148,038
|
|
Change in
fair value of warrants
|
|
|
-
|
|
|
83
|
|
Change in
assets and liabilities:
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
(1,193,016)
|
|
|
1,272,022
|
|
Other
receivables
|
|
|
(931,273)
|
|
|
(1,196,797)
|
|
Employee
advances
|
|
|
75,568
|
|
|
(88,962)
|
|
Inventories
|
|
|
(552,497)
|
|
|
124,084
|
|
Advances
to suppliers
|
|
|
(3,545,892)
|
|
|
(2,961,113)
|
|
Prepaid
expense and other current assets
|
|
|
874,291
|
|
|
3,195,216
|
|
Accounts
payable and accrued liabilities
|
|
|
763,439
|
|
|
997,587
|
|
Unearned
revenue
|
|
|
904,572
|
|
|
1,359,757
|
|
Accrued
interest
|
|
|
456,189
|
|
|
(484,705)
|
|
Taxes
payable
|
|
|
(356,785)
|
|
|
(588,625)
|
|
Net
cash provided by operating activities
|
|
|
4,965,753
|
|
|
7,420,739
|
|
|
|
|
|
|
|
|
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
Payment
for acquisition of property and equipment
|
|
|
(76,831)
|
|
|
(3,192,954)
|
|
Proceeds
from sales of property and equipment
|
|
|
7,133
|
|
|
-
|
|
Proceeds
from sales of long term investment
|
|
|
716,850
|
|
|
-
|
|
Additions
to construction in progress
|
|
|
(3,353,310)
|
|
|
(4,744,279)
|
|
Prepayment
on long-term assets
|
|
|
(89,747)
|
|
|
4,962,691
|
|
Payment
for acquisition of business
|
|
|
-
|
|
|
(657,421)
|
|
Payment
for intangible assets
|
|
|
-
|
|
|
(1,506,029)
|
|
Net
cash used in investing activities
|
|
|
(2,795,905)
|
|
|
(5,137,992)
|
|
|
|
|
|
|
|
|
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
Repayment
of short-term borrowing and other payable, related
parties
|
|
|
(796,500)
|
|
|
-
|
|
Repayment
of long -term debt
|
|
|
(1,593,000)
|
|
|
(794,000)
|
|
Repayment
of senior notes
|
|
|
-
|
|
|
(3,333,334)
|
|
Increase
in restricted cash
|
|
|
-
|
|
|
(794,000)
|
|
Net
cash (used in) provided by financing activities
|
|
|
(2,389,500)
|
|
|
(4,921,334)
|
|
|
|
|
|
|
|
|
Effect of
exchange rate changes on cash and cash equivalents
|
|
|
63,120
|
|
|
23,216
|
|
|
|
|
|
|
|
|
NET
(DECREASE) INCREASEIN CASH & CASH EQUIVALENTS
|
|
|
(156,532)
|
|
|
(2,615,371)
|
|
|
|
|
|
|
|
|
CASH
AND CASH EQUIVALENTS, BEGINNING OF PERIOD
|
|
|
10,857,456
|
|
|
9,622,883
|
|
CASH
AND CASH EQUIVALENTS, END OF PERIOD
|
|
$
|
10,700,924
|
|
$
|
7,007,512
|
|
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
|
|
|
|
|
|
|
|
Interest
paid, net of capitalized interest
|
|
$
|
149,857
|
|
$
|
1,194,334
|
|
Income
taxes paid
|
|
$
|
1,076,702
|
|
$
|
1,143,667
|
|
|
|
|
|
|
|
|
Non-cash transactions for investing and financing
activities:
|
|
|
|
|
|
|
|
Construction material transferred to construction in
progress
|
|
$
|
-
|
|
$
|
67,185
|
|
Construction in progress transferred to property and
equipment
|
|
$
|
526
|
|
$
|
15,506,551
|
|
Other
assets transferred to construction in progress
|
|
|
93,729
|
|
|
671,615
|
|
Capitalized interest - amortization of discount of
notes payable and issuance costs
|
|
$
|
-
|
|
$
|
1,016,672
|
For more information, please contact:
China Natural Gas, Inc.
Zhaoyang Qiao, CFO
Phone: +86-29-8832-7391
Email: qiaochaoyang@naturalgaschina.com
Jackie Shi
Investor Relations Director
Phone: +86-29-8832-3325 x922
Cell: +86-139-9287-9998
Email: yjshi@naturalgaschina.com
SOURCE China Natural Gas, Inc.