SYS-CON MEDIA Authors: Sean Houghton, Glenn Rossman, Ignacio M. Llorente, Xenia von Wedel, Peter Silva

News Feed Item

Changfeng Revenue Up 39%, Gross Profit Up 40% and Net Income Up 52% for the Three Months Ended March 31, 2014 With Compared to the Same Period of 2013

TORONTO, ONTARIO -- (Marketwired) -- 05/15/14 -- Changfeng Energy Inc. (TSX VENTURE:CFY) ("Changfeng" or the "Company") is pleased to announce that the Company has filed its unaudited condensed interim consolidated financial results for the first quarter ended March 31, 2013. The unaudited condensed interim consolidated financial results and Management Discussion and Analysis can be downloaded from www.SEDAR.com or from the Company's website at www.changfengenergy.com.

Summary of the First Quarter of 2014 Consolidated Financial Results


---------------------------------------------------------------------------
In thousands of Canadian dollars      Three months ended March 31,         
except percentages and per share             2014     2013   Change       %
amounts                                                                    
------------------------------------- -------------------------------------
Revenue                                    13,381    9,623    3,758     39%
------------------------------------- -------------------------------------
Gross margin                                7,790    5,572    2,218     40%
------------------------------------- -------------------------------------
Net income                                  1,930    1,273      657     52%
------------------------------------- -------------------------------------
EBITDA (1)                                  5,019    3,001    2,018     67%
------------------------------------- -------------------------------------
Note:                                                                       
(1) See Non- IFRS Financial Measures in this Press Release.                 

Sales from the gas distribution utility for the three months ended March 31, 2014 were $11.4 million, an increase of $3.4 million, or 43%, from $8.0 million for same period of 2013. This increase was attributable to the 11.5% appreciation of exchange rate between the Chinese RMB and the Canadian dollar, an increase in connection fees in the Sanya operation, increased gas volume sold of 11.0 million m3 in the Sanya operation in the first three months of 2014 compared to 10.9 million m3 sold in Sanya operation in the same period of 2013; and increased gas volume sold of 0.3 million m3 in the Xiangdong operation in the first three months of 2014 compared to 0.0 million m3 sold in the same period of 2013.

Total revenue from the CNG refueling retail station for the three months ended March 31, 2014 was $2.0 million, an increase of $0.3 million, or 18%, from $1.7 million for same period of 2013. The increase was attributable to the combined effect of the increased gas volume sold and the appreciation of exchange rate between the Chinese RMB and the Canadian dollar. (3.0 million m3 in the three months ended March 31, 2014 compared to 2.8 million m3 sold in the same period of 2013). The Company has been upgrading its station's refueling capacity to meet the increasing demand that is primarily driven by both rising gasoline prices and continued government support for clean energy vehicles. It is expected that more existing gasoline-fueled buses in the city will be converted into dual-fuel vehicles (gasoline/CNG).

Gross margin for the first quarter of 2014 increased $2.2 million, or 40%, to $7.8 million from $5.6 for the comparable period in 2013. The gross margin percentage of 58% for the first quarter of 2014 is approximately the same as for the first quarter of 2013.

General and administrative expenses for the first quarter of 2014 were $2.7 million, an increase of $0.6 million, or 27%, from $2.2 million in the same period of 2013. The increase was attributable to higher employee salaries and benefits as a result of a higher inflation rate in China, additional employees, higher conference and professional fees and higher exchange rate between the Chinese RMB and the Canadian dollar. General and administrative expenses as a percentage of sales for the first quarter of 2014 decreased to 20% from 22% in the first quarter of 2013.

Travel and business development expenses for the first quarter of 2014 were $1.1 million, an increase of $0.1 million, or 12%, from $1.0 million in the first quarter of 2013. Travel and business development expenses as a percentage of sales for the first quarter of 2014 decreased to 8% from 10% in the first quarter of 2013. These expenses normally fluctuate with travel and business development activities in mainland China as the Company seeks to develop new projects in close proximity to the new national pipelines.

Net income for the first quarter of 2014 was $1.9 million, or $0.030 per share (basic and diluted) compared to $1.3 million or $0.020 per share (basic and diluted) for the same period in 2013, primarily due to the reasons discussed above.

EBITDA (non-IFRS measure as identified and defined under section "Non-IFRS Measures") for the first quarter of 2014 was $5.0 million, an increase of $2.0 million, or 67%, from $3.0 million for the same period of 2013. The increase was driven primarily by higher sales. EBITDA as a percentage of revenue for the first quarter of 2014 was 38%, compared to 31% in the first quarter of 2013, representing an increase of 7% due to the sales increases but was partially offset by higher operating expenses, as discussed above.

Financial Position

Cash increased by $0.05 million to $15.20 million at March 31, 2014 from $15.15 million at December 31, 2013, primarily resulting from cash provided during the quarter by operating activities of $2.1 million and effects of foreign exchange on cash balances of $0.2 million, offset by $0.1 million repayment of long-term debt, $0.3 million for share buyback and cash used for capital expenditures of $1.9 million during the quarter.

Net cash provided by operations was $2.1 million for the first quarter of 2014 compared to $1.7 million for the same period of 2013.

Cash used in financing activities in the first quarter of 2014 included a $0.1 million principle payment of long-term debt and $0.3 million paid for the share buyback.

Capital expenditures in property and equipment totaled $1.9 million in the first quarter of 2014 compared to $2.2 million in the same period of 2013. The expenditures were mainly related to the purchase of equipment for the Xiangdong project and the on-going construction of pipeline networks to connect new customers in the Sanya Region.

Changfeng will finance the majority of the upcoming construction of projects under development in mainland China through its long-term bank loans with BOC Sanya and BOC Pingxiang, as well as operating cash flow from its existing operations.

Non-IFRS Financial Measures

The Company uses the following non-IFRS financial measure: EBITDA. The Company believes this non-IFRS financial measure provides useful information to both management and investors in measuring the financial performance and financial condition of the Company for the reasons outlined below.

Management uses this non-IFRS financial measure to exclude the impact of certain expenses and income that must be recognized under IFRS when analyzing consolidated operating performance, as the excluded items are not necessarily reflective of the Company's underlying operating performance and make comparisons of underlying financial performance between periods difficult. From time to time, the Company may exclude additional items if it believes doing so would result in a more effective analysis of underlying operating performance. The exclusion of certain items does not imply that they are non-recurring.

This measure do not have a standardized meaning prescribed by IFRS and therefore they may not be comparable to similarly titled measures presented by other publicly traded companies and should not be construed as an alternative to other financial measures determined in accordance with IFRS. This measure is listed and defined below:

EBITDA

EBITDA is defined herein as income before income tax expense, interest expense, depreciation and amortization, share of loss of investment in associate, as well as non-cash stock-based compensation expense. EBITDA does not have any standardized meaning prescribed by IFRS and therefore may not conform to the definition used by other companies. A reconciliation of net income to EBITDA for each of the periods presented as follows:


---------------------------------------------------------------------------
In thousands                         Three months ended March 31,          
(except for % figures)                   2014      2013    Change         %
---------------------------------------------------------------------------
Net Income                              1,930     1,273       657       52%
Add (less):                                                                
 Income tax                             1,469       744       725       97%
 Interest income                          (9)       (9)         0        0%
 Share of loss of investment in                                            
  associate                               7.6       0.3         7     2333%
 Stock-based compensation                  87         -        87      100%
 Amortization                           1,044       551       493       89%
 Interest expense                         490       442        48       11%
---------------------------------------------------------------------------
EBITDA                                  5,019     3,001     2,018       67%
---------------------------------------------------------------------------

About Changfeng Energy Inc.

Changfeng Energy Inc. is a natural gas service provider with operations located throughout the People's Republic of China. The Company services industrial, commercial and residential customers, providing them with natural gas for heating purposes and fuel for transportation. The Company has developed a significant natural gas pipeline network as well as urban gas delivery networks, stations, substations and gas pressure regulating stations in Sanya City & Haitang Bay. Through its network of pipelines, the Company provides safe and reliable delivery of natural gas to both homes and businesses. The Company is headquartered in Toronto, Ontario and its shares trade on the Toronto Venture Exchange under the trading symbol "CFY". For more information, please visit the Company website at www.changfengenergy.com.

Forward-Looking Statements

Information set forth in this news release may involve forward-looking statements under applicable securities laws. The forward-looking statements contained herein are expressly qualified in their entirety by this cautionary statement. The forward-looking statements included in this document are made as of the date of this document and the Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by applicable securities legislation. Although Management believes that the expectations represented in such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct. This news release does not constitute an offer to sell or solicitation of an offer to buy any of the securities described herein and accordingly undue reliance should not be put on such.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
SYS-CON Media announced today that Sematext launched a popular blog feed on DevOps Journal with over 6,000 story reads over the weekend. DevOps Journal is focused on this critical enterprise IT topic in the world of cloud computing. DevOps Journal brings valuable information to DevOps professionals who are transforming the way enterprise IT is done. Sematext is a globally distributed organization that builds innovative Cloud and On Premises solutions for performance monitoring, alerting an...
Lori MacVittie is responsible for education and evangelism of application services available across F5's entire product suite. Her role includes authorship of technical materials and participation in a number of community-based forums and industry standards organizations, among other efforts. MacVittie has extensive programming experience as an application architect, as well as network and systems development and administration expertise. Prior to joining F5, MacVittie was an award-winning Senio...
SYS-CON Media announced today that Skytap blog on "DevOps Journal" exceeded 84,000 story reads. DevOps Journal is focused on this critical enterprise IT topic in the world of cloud computing. DevOps Journal brings valuable information to DevOps professionals who are transforming the way enterprise IT is done. Noel Wurst is the managing content editor at Skytap. Skytap provides SaaS-based dev/test environments to the enterprise. Skytap solution removes the inefficiencies and constraints that comp...
ScriptRock makes GuardRail, a DevOps-ready platform for configuration monitoring. Realizing we were spending way too much time digging up, cataloguing, and tracking machine configurations, we began writing our own scripts and tools to handle what is normally an enormous chore. Then we took the concept a step further, giving it a beautiful interface and making it simple enough for our bosses to understand. We named it GuardRail after its function - to allow businesses to move fast and stay sa...
SYS-CON Events announced today Isomorphic Software, the global leader in high-end, web-based business applications, will exhibit at SYS-CON's DevOps Summit 2015 New York, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. Isomorphic Software is the global leader in high-end, web-based business applications. We develop, market, and support the SmartClient & Smart GWT HTML5/Ajax platform, combining the productivity and performance of traditional desktop software ...
SYS-CON Events announced today that Cloudian, Inc., the leading provider of hybrid cloud storage solutions, will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. Cloudian, Inc., is a Foster City, California - based software company specializing in cloud storage software. The main product is Cloudian, an Amazon S3-compliant cloud object storage platform, the bedrock of cloud computing systems, that enables c...
Leysin American School is an exclusive, private boarding school located in Leysin, Switzerland. Leysin selected an OpenStack-powered, private cloud as a service to manage multiple applications and provide development environments for students across the institution. Seeking to meet rigid data sovereignty and data integrity requirements while offering flexible, on-demand cloud resources to users, Leysin identified OpenStack as the clear choice to round out the school's cloud strategy. Additional...
SYS-CON Events announced today that Windstream, a leading provider of advanced network and cloud communications, has been named “Silver Sponsor” of SYS-CON's 16th International Cloud Expo®, which will take place on June 9–11, 2015, at the Javits Center in New York, NY. Windstream (Nasdaq: WIN), a FORTUNE 500 and S&P 500 company, is a leading provider of advanced network communications, including cloud computing and managed services, to businesses nationwide. The company also offers broadband, p...
The BPM world is going through some evolution or changes where traditional business process management solutions really have nowhere to go in terms of development of the road map. In this demo at 15th Cloud Expo, Kyle Hansen, Director of Professional Services at AgilePoint, shows AgilePoint’s unique approach to dealing with this market circumstance by developing a rapid application composition or development framework.
In high-production environments where release cycles are measured in hours or minutes — not days or weeks — there's little room for mistakes and no room for confusion. Everyone has to understand what's happening, in real time, and have the means to do whatever is necessary to keep applications up and running optimally. DevOps is a high-stakes world, but done well, it delivers the agility and performance to significantly impact business competitiveness.
"Our premise is Docker is not enough. That's not a bad thing - we actually love Docker. At ActiveState all our products are based on open source technology and Docker is an up-and-coming piece of open source technology," explained Bart Copeland, President & CEO of ActiveState Software, in this SYS-CON.tv interview at DevOps Summit at Cloud Expo®, held Nov 4-6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
The Internet of Things is not new. Historically, smart businesses have used its basic concept of leveraging data to drive better decision making and have capitalized on those insights to realize additional revenue opportunities. So, what has changed to make the Internet of Things one of the hottest topics in tech? In his session at @ThingsExpo, Chris Gray, Director, Embedded and Internet of Things, discussed the underlying factors that are driving the economics of intelligent systems. Discover ...
"BSQUARE is in the business of selling software solutions for smart connected devices. It's obvious that IoT has moved from being a technology to being a fundamental part of business, and in the last 18 months people have said let's figure out how to do it and let's put some focus on it, " explained Dave Wagstaff, VP & Chief Architect, at BSQUARE Corporation, in this SYS-CON.tv interview at @ThingsExpo, held Nov 4-6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
The major cloud platforms defy a simple, side-by-side analysis. Each of the major IaaS public-cloud platforms offers their own unique strengths and functionality. Options for on-site private cloud are diverse as well, and must be designed and deployed while taking existing legacy architecture and infrastructure into account. Then the reality is that most enterprises are embarking on a hybrid cloud strategy and programs. In this Power Panel at 15th Cloud Expo (http://www.CloudComputingExpo.com...
Verizon Enterprise Solutions is simplifying the cloud-purchasing experience for its clients, with the launch of Verizon Cloud Marketplace, a key foundational component of the company's robust ecosystem of enterprise-class technologies. The online storefront will initially feature pre-built cloud-based services from AppDynamics, Hitachi Data Systems, Juniper Networks, PfSense and Tervela. Available globally to enterprises using Verizon Cloud, Verizon Cloud Marketplace provides a one-stop shop fo...