New Oriental Energy & Chemical Corp.
(NASDAQ: NOEC) (the "Company"), a China-based specialty chemical
and emerging coal-based alternative fuel manufacturer, today
announced results of operations for its second quarter and six
months ended September 30, 2010.
In this year's second quarter, the Company reported a net loss
of $(704,191), on revenues in the period of $3,187,574. This
compared with a net loss of $(3,173,415) on revenues of $7,553,115
in the same period in the prior fiscal year.
In the first six months of the current fiscal year, revenues of
$17,000,693 were 6.67% higher than revenues of $15,937,433 in the
first half last year. The net loss in the first six months this
year was $(3,316,871), a decrease of $3,008,058, or 47.56%, from
the net loss of $(6,324,929) in the six months ended September 30,
2009.
Gross profit in the three months ended September 30, 2010
increased by $3,467,903 or 176.12% to $1,498,853 compared with the
prior year period, mainly due to increased selling prices and a
decrease in production cost year over year. The Company noted that
it closed its factory for an extended period from July through
mid-October to undergo a comprehensive examination of its
production equipment.
Urea sales in the 2010 second quarter declined 48.03% to
$3,173,217 year over year, however, gross margins increased to
47.16%, which reflected the lower production cost and higher sales
prices. There were no DME or methanol sales in the period as such
sales would have produced negative gross profits.
Mr. Chen S. Qiang, CEO and Chairman of the Company commented,
"This has been a very difficult period for us, but we continue to
be optimistic about seeing continuing improving conditions in the
second half of the year. In recent weeks, we also have taken many
steps, as reported, to strengthen the Company's financial
condition."
SEE ATTACHED TABLE
New Oriental Energy & Chemical
Corp.
New Oriental Energy & Chemical Corp. (NASDAQ: NOEC) is an
emerging coal-based alternative fuels and specialty chemical
manufacturer based in Henan Province, in the PRC. The Company's
core products are urea and other coal-based chemicals primarily
utilized as fertilizers. Future growth is anticipated from its
focus on expanding production of coal-based alternative fuels, in
particular, methanol, as an additive to gasoline and dimethyl ether
(DME), which has been a cheaper, more environmentally friendly
alternative to LPG for home heating and cooking, and diesel fuel
for cars and buses. All of the Company's sales are made through a
network of distribution partners in the PRC. Additional information
on the Company is available on its website at
www.neworientalenergy.com.
Safe Harbor Statement
This press release may contain forward-looking statements
concerning New Oriental Energy & Chemical Corp. The actual
results may differ materially depending on a number of risk factors
including, but not limited to, the following: general economic and
business conditions, development, shipment, market acceptance,
additional competition from existing and new competitors, changes
in technology or product techniques, and various other factors
beyond its control. All forward-looking statements are expressly
qualified in their entirety by this Cautionary Statement and the
risk factors detailed in the Company's reports filed with the
Securities and Exchange Commission. New Oriental Energy &
Chemical Corp. undertakes no duty to revise or update any
forward-looking statements to reflect events or circumstances after
the date of this release.
NEW ORIENTAL ENERGY & CHEMICAL CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE LOSS
(UNAUDITED)
Three Months Ended Six Months Ended
September 30, September 30,
--------------------------- --------------------------
2010 2009 2010 2009
------------- ------------ ------------ ------------
REVENUES $ 3,187,574 $ 7,553,115 $ 17,000,693 $ 15,937,433
COST OF GOODS SOLD (1,688,721) (9,522,165) (16,567,459) (19,494,540)
------------- ------------ ------------ ------------
GROSS PROFIT (LOSS) 1,498,853 (1,969,050) 433,234 (3,557,107)
General and
administrative 1,821,007 478,077 2,469,372 1,206,715
Selling and
distribution 10,988 260,196 253,588 547,716
Research and
development 9,112 15,045 27,460 42,673
------------- ------------ ------------ ------------
LOSS FROM OPERATIONS (342,254) (2,722,368) (2,317,186) (5,354,211)
OTHER INCOME
(EXPENSES)
Interest expense,
net (430,593) (426,547) (1,310,718) (887,699)
Other income
(expenses), net (459) 6,263 8,988 2,754
Change in fair value
of derivatives 69,115 - 302,045 -
------------- ------------ ------------ ------------
LOSS BEFORE INCOME
TAXES (704,191) (3,142,652) (3,316,871) (6,239,156)
INCOME TAX EXPENSE - (30,763) - (85,773)
------------- ------------ ------------ ------------
NET LOSS (704,191) (3,173,415) (3,316,871) (6,324,929)
------------- ------------ ------------ ------------
OTHER COMPREHENSIVE
INCOME
Foreign currency
translation gain 43,290 17,756 49,398 7,743
------------- ------------ ------------ ------------
OTHER COMPREHENSIVE
INCOME 43,290 17,756 49,398 7,743
------------- ------------ ------------ ------------
COMPREHENSIVE LOSS $ (660,901) $ (3,155,659) $ (3,267,473) $ (6,317,186)
============= ============ ============ ============
WEIGHTED AVERAGE
SHARES OUTSTANDING,
BASIC AND DILUTED 14,664,149 12,640,000 14,108,315 12,640,000
============= ============ ============ ============
NET LOSS PER SHARE,
BASIC AND DILUTED $ (0.05) $ (0.25) $ (0.24) $ (0.50)
============= ============ ============ ============
Contacts: Li Donglai Chief Financial Officer New Oriental Energy
& Chemical Corp. Xicheng Industrial Zone of Luoshan, Xinyang
Henan Province, The People's Republic of China Tel: (011-86)
139-3764-6299
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