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 unaudited financial results for the third quarter ended September 30, 2013.

Third Quarter 2013 Highlights

• Revenue in the third quarter of 2013 was $61.5 million, a 95% increase from the second quarter of 2012
• Gross profit increased around 6900% year over year to $4.9 million as compared to $0.07 million in the same period of 2012, while gross profit margin during the quarter improved 780 base points year over year to 8% from 0.2%
• Operating income in the third quarter of 2013 was approximately $1.0 million, a 159% increase from the corresponding period in 2012
• The Company ended the quarter with cash balance of approximately $11.3 million and restricted cash of $69.3 million.

"We are excited to report a strong quarter to our shareholders," commented Mr. Fengbin An, Chairman & CEO of Andatee Marine Fuel Services Corporation, "Our strong focus on wholesaler business as well as continuing effort to enhance our top line and bottom line growth are the main causes of our strong financial performance during the quarter. Recently, we are beginning to see some noticeable improvement in terms of shareholder confidence and interests. Going forward, the management will continue to strive to build our shareholder value by delivering solid financial performance," he concluded.

Third Quarter of 2013 Results

Revenue increased by $30 million, or 95%, from $31.5 million for the third quarter ended September 30, 2012 to $61.5 million for the third quarter ended September 30, 2013. The increase in the Company's revenue was mainly due to the increase in sales volume. The increase in our sales volume was primarily driven by increased customer demand for our 180CST, #1, #2 and #4 blended fuel oil which has a relatively competitive market price targeting a broad range of fishing boat and cargo vessel customers. Among our total sales volume in the third quarter of 2013, approximately 25.5% was from sales of our 180CST fuel oil, about 28.5% was from sales if our #1 fuel oil, about 20.1% was from sales of our #2 fuel oil and about 10.3% was from sales of our #4 fuel oil. On the other hand, among our total sales volume for the nine months ended September 30, 2013, approximately 16.1% was from sales of our 180CST fuel oil, about 15.1% was from sales of our #1 fuel oil and about 45.6% was from sales of our #4 fuel oil.

Cost of revenues increased by $25.2 million, or 80%, from $31.4 million for the third quarter ended September 30, 2012 to $56.6 million for the third quarter ended September 30, 2013 primarily due to increased sales volume from 39,533 tons for the third quarter ended September 30, 2012 to 121,573 tons for third quarter ended September 30, 2013.

Gross profit increased by $4.83 million, or 6389%, to $4.9 million for the quarter ended September 30, 2013 as compared to $75,700 in the quarter ended September 30, 2012. As a percentage of revenues, our gross profit margin was 8% and 0.2% for the third quarter of 2013 and 2012, respectively.

Total operating expenses from continuing operations for the third quarter of fiscal 2013 were $3.9 million, an increase of 116.7% from $1.8 million in the prior year period.

Selling expenses increased by $35,337, or 11%, from $332,279 for the third quarter of 2012 to $367,616 in the third quarter of 2013. This increase is mainly due to our increased sales promotion efforts to target large wholesalers during third quarter of 2013 in order to bulk sales fuel oils to them. As a percentage of revenues, selling expenses decreased from 1.1% for the third quarter of 2012 to 0.6% for the third quarter of 2013.

General and administrative expenses increased by $2.11 million, or 135%, from $1.43 million for the third quarter of 2012 to $3.54 million for the third quarter of 2013. The increase was caused by increases in the depreciation expense, bad debt reserves, professional service fees, consulting fees and stock-based compensation expense. As a percentage of revenues, general and administrative expenses increased from 4.5% for the third quarter of 2012 to 5.8% for the third quarter of 2013.

Interest expense decreased by $1.27 million, from $2 million for the third quarter ended September 30, 2012 to $0.74 million for the third quarter ended September 30, 2013. The decrease in interest expense was due to amortization of prepaid interest expense incurred on the bank acceptance bills and short-term bank loans for the three months ended September 30, 2013.

Net loss attributable to the Company decreased by $2.44 million, from a net loss of $2,983,148 for the third quarter ended September 30, 2012 to net loss of $542,859 for the third quarter ended September 30, 2013. The decrease in net loss was mainly the result of increase in sales revenue and gross profit margin, decrease in unit cost and interest expense, offset by increased operating expense for the period indicated.

Financial Condition As of September 30, 2013, the Company had cash balance of approximately $11.3 million, and an addition to $69.3 million in restricted cash.

About Andatee China Marine Fuel Services

Andatee China Marine Fuel Services Corporation is a leading independent operator engaged in the production, storage, distribution, and trading of blended marine fuel oil for cargo and fishing vessels in China. Headquartered in the City of Dalian, a key international shipping hub and an international logistics center in Northern China, Andatee maintains operations in Liaoning, Shandong, Zhejiang Provinces and Shanghai area. Additional information about the Company is available via the Company filing with The Securities Exchange Commission at www.sec.gov.

Safe Harbor Relating to the Forward Looking Statements

Statements contained in this press release not relating to historical facts are forward-looking statements that are intended to fall within the safe harbor rule under the Private Securities Litigation Reform Act of 1995. All forward-looking statements included herein are based upon information available to the Company as of the date hereof and, except as is expressly required by the federal securities laws, the Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, changed circumstances or future events or for any other reason. As a result, investors should not place undue reliance on these forward- looking statements. To the extent that any statements made here are not historical, these statements are essentially forward-looking. Forward-looking statements can be identified by the use of words such as "expects," "plans," "will," "may," "anticipates," "believes," "should," "intends," "estimates" and other words of similar meaning. The Company may also make written or oral forward-looking statements in its periodic reports filed with the U.S. Securities and Exchange Commission and other written materials and in oral statements made by its officers, directors or employees to third parties. These statements are subject to risks and uncertainties that cannot be predicted or quantified and, consequently, actual results may differ materially from those expressed or implied by these forward-looking statements. Such risk factors include, without limitation, our ability to properly execute our business model, to address price and demand volatility, to counter weather and seasonal fluctuations, to attract and retain management and operational personnel, potential volatility in future earnings, fluctuations in the Company's operating results, our ability to expand geographically into new markets and successfully integrate future acquisitions, our ability to integrate and capitalize on the acquisitions in various markets, PRC governmental decisions and regulation, and existing and future competition that the Company is facing. These forward-looking statements are subject to known and unknown risks and uncertainties that could cause actual events to differ from the forward-looking statements. More information about some of these risks and uncertainties may be found in the Company's filings with the Securities and Exchange Commission under the caption "Risk Factors" in such filings.

ANDATEE CHINA MARINE FUEL SERVICES CORPORATION. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
	September	December
	30, 2013	31, 2012
ASSETS
Current assets
Cash and cash equivalents	$11,274,002	$1,625,705
Restricted cash	69,327,486	9,173,002
Accounts receivable, net	40,187,445	18,220,089
Inventories, net	37,670,456	9,302,913
Advances to suppliers	17,257,774	16,387,613
Deposits for land use rights	4,628,121	698,291
Prepaid expense and other current assets	3,854,409	558,505
Deferred tax assets	672,848	840,540
Total current assets	184,872,541	56,806,658
Property, plant and equipment, net	51,958,090	40,880,091
Construction in progress	1,477,866	12,860,195
Equity investment	1,332,824	--
Intangible assets, net	9,392,615	8,953,602
Goodwill	1,245,594	1,213,036
Total assets	$250,279,530	$120,713,582
LIABILITIES AND EQUITY
Current liabilities
Short-term bank borrowings	$27,703,540	$9,314,247
Bank note payable	117,880,190	19,679,104
Accounts payable and accrued liabilities	24,540,298	8,367,697
Advances from customers	3,588,015	8,472,233
Loan from third parties	2,365,393	9,413,436
Related party loans payable	2,985,843	509,255
Taxes payable	6,642,679	2,719,517
Other liabilities	3,736,206	1,777,089
Total current liabilities	189,442,163	60,252,578
Warrant liability	363,225	--
Commitments and contingencies
Equity
Common stock, $0.001 par value; 50,000,000 shares authorized; 9,860,159 and 9,610,159 shares issued; 9,768,967 and 9,518,967 shares outstanding as of September 30, 2013, and December 31, 2012,respectively	9,860	9,610
Treasury stock, at cost; 91,192 shares	(497,693)	(497,693)
Additional paid-in capital	30,503,899	29,888,556
Accumulated other comprehensive income	5,358,724	4,297,827
Retained earnings	18,637,401	19,513,573
Statutory reserve	4,010,828	3,421,960
Total stockholders' equity of the Company	58,023,019	56,633,833
Noncontrolling interest	2,451,123	3,827,171
Total equity	60,474,142	60,461,004
Total liabilities and equity	$250,279,530	$120,713,582

ANDATEE CHINA MARINE FUEL SERVICES CORPORATION. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
					Six months
	Three months ended		Nine months ended		ended June
	September 30,		September 30,		30,
	2013	2012	2013	2012	2013
Revenues	$61,564,873	$ 31,524,045	$ 190,962,563	$ 139,883,552	$ 129,397,690
Cost of revenues	56,652,979	31,448,345	178,635,410	133,980,293	121,982,431
Gross profit	4,911,894	75,700	12,327,153	5,903,259	7,415,259
Operating expenses
Selling expenses	367,616	332,279	1,184,647	1,288,733	817,031
General and administrative expenses	3,547,780	1,432,991	7,684,547	3,838,453	4,136,767
Total operating expenses	3,915,396	1,765,270	8,869,194	5,127,186	4,953,798
Income from operations	996,498	(1,689,570)	3,457,959	776,073	2,461,461
Other income (expense)
Interest income	58,744	217,141	283,792	344,899	225,048
Interest expense	(737,667)	(2,014,360)	(2,818,881)	(4,654,981)	(2,081,214)
Income (loss) from equity investment	12,418	--	28,768	--	16,350
Change in fair value of warrants	(270,539)	--	(260,389)	--	10,150
Other income (expense)	(193,101)	(68,024)	(193,270)	221,848	(169)
Total other income (expense)	(1,130,145)	(1,865,243)	(2,959,980)	(4,088,234)	(1,829,835)
Income (loss) before income tax provision	(133,647)	(3,554,813)	497,979	(3,312,161)	631,626
Provision for Income Taxes (benefit)	408,053	(496,583)	877,307	(459,163)	469,254
Net income (loss)	(541,700)	(3,058,230)	(379,328)	(2,852,998)	162,372
Less: net loss attributable to noncontrolling interest	1,159	(75,082)	(92,025)	(245,167)	(93,184)
Net income (loss) attributable to Andatee China Marine Fuel Services Corporation	$ (542,859)	$ (2,983,148)	$ (287,303)	$ (2,607,831)	$ 255,556
Comprehensive income (loss)
Net loss	(541,700)	(3,058,230)	(379,328)	(2,852,998)
Foreign currency translation adjustment	(115,317)	(201,429)	1,499,734	75,234	1,615,051
Comprehensive income (loss)	(657,017)	(3,259,659)	1,120,406	(2,777,764)
Less: foreign currency translation adjustment attributable to non-controlling interest	(24,556)	107,555	(316,411)	(62,530)	(291,855)
Comprehensive income (loss) attributable to Andatee China Marine Fuel Services Corporation	(632,461)	(3,367,214)	1,436,817	(2,715,234)	1,323,196
Basic and diluted weighted average shares outstanding	9,860,159	9,518,967	9,715,858	9,518,967	9,642,103
Basic and diluted net earnings (loss) per share	$ (0.06)	$ (0.31)	$ (0.03)	$ (0.27)	$ 0.03

ANDATEE CHINA MARINE FUEL SERVICES CORPORATION. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
	Nine months ended
	September 30,
	2013	2012
Cash flows from operating activities:
Net income loss	$(379,328)	$(2,852,998)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	1,813,675	1,343,388
Amortization	393,147	262,740
Bad debt provision	2,951,205	305,534
Provision for inventory reserve	139,549	--
Deferred tax provision (benefit)	187,901	(515,904)
Amortization of stock-based compensation to consulting firm	356,667	--
Amortization of stock-based compensation to directors	136,500
Income from equity investment	(28,768)	--
Change in fair value of warrants	260,389	--
Changes in operating assets and liabilities
Accounts receivable	(23,769,140)	3,797,214
Inventories	(27,909,845)	(14,688,047)
Settlement receivable	--
Advances to suppliers	(819,909)	12,066,600
Prepaid expense and other current assets	(3,409,281)	(3,470,866)
Accounts payable and accrued liabilities	16,851,041	(11,027,246)
Advances from customers	(5,048,428)	7,775,633
Taxes payable	3,802,579	(2,212,452)
Other liabilities	1,151,546	1,043,416
Net cash used in operating activities	(33,320,502)	(8,172,988)
Cash flows from investing activities
Equity investment in unconsolidated entity	(1,287,581)	--
Additions to construction in progress and property and equipment	(88,554)	(588,945)
Purchase of land use rights	(4,452,134)	--
Cash paid for acquiring non-controlling interest	(1,722,140)	--
Refunds of deposits		643,368
Net cash (used in) provided by investing activities	(7,550,410)	54,423
Cash flows from financing activities
Proceeds from short term loans	33,718,535	3,283,865
Repayment of short term loans	(15,803,451)	(5,809,915)
Proceeds from bank notes	128,011,331	89,595,832
Repayment of bank notes	(31,545,741)	(91,174,613)
Restricted cash, net	(59,167,769)	1,162,616
Advance from (Repayment of) loan to unrelated party	(7,210,455)	14,665,815
Proceeds of loan from related party	2,354,493	3,112,687
Net cash provided by financing activities	50,356,942	14,836,287
Effect of exchange rate changes on cash and cash equivalents	162,267	31,076
Net decrease in cash and cash equivalents	9,648,297	6,748,798
Cash and cash equivalents, beginning of period	$1,625,705	$3,493,015
Cash and cash equivalents, end of period	$11,274,002	$10,241,813
Supplemental cash flow information:
Interest paid	$2,593,721	$4,653,830
Income taxes paid	$316,835	$491,902

CONTACT: For more information, please contact:
         
         Company Contact:
         Mr. Hao Wang
         Chief Financial Officer
         Andatee China Marine Fuel Services Corporation
         Phone: +86-411-8360-4683