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China Clean Energy Announces Record Fourth Quarter and Fiscal Year 2007 Results
China Clean Energy Announces Record Fourth Quarter and Fiscal Year 2007 Results
FUQING CITY, China, March 12 /Xinhua-PRNewswire-FirstCall/ -- China Clean
Energy Inc. (OTC Bulletin Board: CCGY) ('China Clean Energy', the 'Company'),
a leading producer of biodiesel fuel and environmentally-friendly specialty
chemical products made from renewable resources in The People's Republic of
China ('PRC'), today reported record financial results for the fourth quarter
and fiscal year ended December 31, 2007.
Fourth Quarter 2007 Highlights -- Total revenues increased to $6.9 million, up 87.1% from the fourth quarter of 2006 -- Gross Profits reached $1.9 million, up 73.9% from the fourth quarter of 2006 -- Operating Income totaled $1.4 million, up 895% from the fourth quarter of 2006 -- Net Income was $1.3 million, or $0.06 per share -- Completed private placement financing and raised $15 million to build new biodiesel plant -- Initiated construction for new a 100,000 metric ton facility on December 19, 2007
Full Year 2007 Highlights -- Total revenues increased 61.3% in 2007 to $21.8 million -- Operating Income increased 60.8% in 2007 to $3.5 million -- Net income increased 164.6% in 2007 to $3.4 million
'This was a very successful quarter for China Clean Energy, both in terms
of financial performance and the execution of our expansion strategy. We
achieved double-digit sequential growth in net revenues, driven by strong
demand of our biodiesel and specialty chemical products. The rise of
international oil price has also increased the company's margin and net income
from operations,' said Mr. Tai-ming Ou, China Clean Energy's Chairman and CEO.
'In addition, the successful completion of our private placement was an
important milestone for our company, and provided us with the capital
necessary to complete our expansion strategy to build a 100,000 metric ton
annual capacity biodiesel plant.'
Fourth Quarter 2007 Results
China Clean Energy's net revenues in the fourth quarter were $6.9 million,
an increase of 26.4% from the third quarter of 2007 and an increase of 87%
year-over-year. The increase from the third quarter of 2007 was due to
increased demand for the company's biodiesel and specialty chemical product
lines, increased sales volume, higher sales prices, as well as greater sales
volume due to our increased sales force.
Gross profit in the fourth quarter of 2007 was $1.9 million, an increase
of 31% since the third quarter of 2007 and an increase of 73.9% year-over-year.
Gross margins were 27.1% in the fourth quarter of 2007, down from 29.1% during
the same period in 2006. The increase in gross profit was the result of higher
sales prices and sales volume. The decrease in gross margin, however, was the
result of a decrease in Chinese government export tax rebates from 13% to 5%,
effective on July 1, 2007, for our exported specialty chemical products.
Operating expense in the fourth quarter of 2007 was $507,346 for the
fourth quarter of 2007, a 45.9% decrease from $937,559 in the fourth quarter
of 2006 which included a one time 'reverse merger' charge. The Company's
operating income was up 58% from the third quarter of 2007 and up 895% year-
over-year. The Company recorded a 20% increase in operating margin in the
fourth quarter of 2007, representing a 400 basis point improvement compared to
the third quarter of 2007 as well as the fourth quarter of 2006. This was due
to the increase in production capacity and benefits from economies of scale.
Net income for the fourth quarter of 2007 was $1.3 million or $0.06 per
basic and diluted share, compared to a loss of $3,606 in the fourth quarter of
2006. The increase in net income was driven by the increase of sales and the
improvement in operating margins.
Full Year 2007 Results
For the full year 2007, net revenues were $21.8 million, up 61.5% from
$13.5 million in 2006. 26.54% of revenue came from biodiesel sales and 73.46%
came from specialty chemical sales. Gross profit for the full year 2007 was
$5.9 million, an increase of 55.3% from $3.8 million in 2006. The increase was
attributed to a significant increase in selling price and sales volume of the
Company's biodiesel and specialty chemical export business. Gross margin
decreased slightly from 28.2% in 2006 to 27.0% in 2007 due to the decrease in
Chinese government export tax rebates from 13% to 5% effective on July 1, 2007
for the Company's exported specialty chemical products. Operating income for
the full year 2007 was $3.5 million, up 59% from $2.2 million in 2006.
Operating margin remained the same at 16% in 2006 and 2007. Net Income for
2007 increased 164.6% to $3.4 million from $1.3 million in 2006. Earnings per
share also increased 128.5% to $0.16 per basic and diluted share in 2007 from
$0.07 in 2006. Cash flow from operations for 2007 totaled $2.1 million,
compared to $1.4 million in 2006. Capital expenditures for 2007 totaled $3.8
million, including a partial payment for initial construction and land-usage
rights related to the Company's new 100,000 ton-per-annum biodiesel plant.
Financial Condition
As of December 31, 2007, China Clean Energy had $1.1 million in total cash,
approximately $4.3 million in working capital, and $1.5 million in debt.
Stockholders' equity at December 31, 2007 stood at $14.8 million, a 13.8%
increase over the $13.0 million recorded at September 30, 2007.
Additional Information
In connection with the private placement financing, certain stockholders
and officers of the Company deposited an aggregate of 1.5 million shares of
common stock into an escrow account, which shares shall be disbursed, pro rata,
among the investors should (i) the Company fail to begin the production of
biodiesel at its currently proposed production facility in Jiang Yin, People's
Republic of China on or before January 1, 2009 or (ii) the Company fail to
achieve at least $14,000,000 of adjusted net income during 2009. The Company
plans to provide investors with regular updates as it makes progress on its
Jiang Yin production facility construction. At this time the Company reaffirms
its belief that it will commence biodiesel production from the new facility by
January 1, 2009 and achieve at least $14,000,000 of adjusted net income during
2009.
In addition, over the next several quarters the Company plans to recruit
independent directors to join its Board and take all additional actions
necessary to fulfill the requirements to support an application to list on a
national stock exchange.
Conference Call
To participate in the live conference call, please dial the following
number five to ten minutes prior to the scheduled conference call time: 888-
552-2116. International callers should dial 706-645-9795 or 706-758-9965. When
prompted by the operator, mention Conference Passcode 38344624. If you are
unable to participate in the call at this time, a replay will be available for
seven days starting on Wednesday, March 12 at 12:30 p.m. Eastern Time. To
access the replay, dial 800-462-1687, international callers dial 706-645-9291,
and enter the passcode 38344624.
This conference call will also be broadcast live over the Internet and can
be accessed by all interested parties on China Clean Energy's website at
http://www.chinacleanenergyinc.com. To listen to the live webcast, please go
to China Clean Energy's website at least fifteen minutes prior to the start of
the call to register, download, and install any necessary audio software. For
those unable to participate during the live broadcast, a replay will be
available shortly after the call on China Clean Energy's website for 90 days.
About China Clean Energy:
China Clean Energy, through its wholly-owned subsidiary, Fujian Zhongde
Technology Co., Ltd., is engaged in the development, manufacturing, and
distribution of biodiesel fuel and specialty chemical products made from
renewable resources. Since its inception, the Company has been engaged in the
manufacture of high-quality specialty chemical products from renewable
resources. Through its research and development efforts, the Company
developed a proprietary process for refining biodiesel fuel from waste grease
and certain vegetable oil-based waste. Using this proprietary process, China
Clean Energy began producing biodiesel in 2005 and commenced selling biodiesel
commercially starting in December 2005.
