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China Bio Energy Reports Fiscal 2007 Financial Results
Date:4/1/2008

-- Full Year Revenue Increases 60% to $87.1 Million

-- Full Year Net Income Increases 61% to $8.6 Million

XIAN, China, April 1, 2008 /Xinhua-PRNewswire-FirstCall/ -- China Bio Energy Holdings (OTC Bulletin Board: CBEH), (CBEH or the "Company"), an energy company engaged in the wholesale distribution and processing of heavy oil and finished oil products and the development, production and distribution of bio- diesel fuel, today announced consolidated financial results for the fiscal year ended December 31, 2007.

Fiscal 2007 Results

Net sales for 2007 were approximately $87.1 million, a 60% increase as compared to net sales in 2006 of approximately $54.4 million. The net sales increase was a result of the Company's territorial expansion into five new provinces in China through the opening of two new representative offices. In addition, the Company started production of the new biodiesel production line in October 2007, which resulted in a $4.4 million increase in biodiesel sales.

Gross profit was approximately $10.5 million for 2007, an increase of 58% as compared to approximately $5.8 million for 2006. Gross margin as a percentage of sales increased from 11% in 2006 to 12 % in 2007. The slight increase in gross margin was mainly due to greater production of biodiesel and sales volume of oil products in 2007.

Operating expenses, consisting of selling, general and administrative expenses, were approximately $2.1 million for 2007 as compared to $0.4 million for 2006, an increase of approximately $1.8 million or 498%. General and administrative expenses increased $1.3 million from 2006, of which $1.1 million was associated with the Company's reverse merger and financing in 2007. The major expenses related to the reverse merger and financing included U.S. and Chinese legal counsel expenses, auditing expenses, consulting expenses, and due diligence expenses.

Net income in 2007 was $8.6 million as compare -150

Shares issued for

cash 1,000,000 1,000 -- -- 13,172,527

Net income for the

year -- -- -- -- --

Transfer to

statutory

reserves -- -- -- -- --

Foreign currency

translation gain -- -- -- -- --

Balance at

December 31,

2007 1,000,000 $1,000 25,454,545 $2,545 $19,611,938

Common stock

Other Total

Statutory comprehensive Retained stockholders'

reserves income earnings equity

Balance at December

31, 2004 $130,317 $32,040 $1,464,408 $4,162,997

Net income for the

year -- -- 4,141,087 4,141,087

Transfer to

statutory reserves 445,699 -- -445,699 --

Foreign currency

translation gain -- 128,667 -- 128,667

Balance at December

31, 2005 576,016 160,707 5,159,796 8,432,751

Net income for the

year -- -- 5,343,579 5,343,579

Transfer to

statutory

reserves 534,358 -- -534,358 --

Foreign currency

translation gain -- 464,099 -- 464,099

Balance at December

31, 2006 1,110,374 624,806 9,969,017 14,240,429

Capital contribution -- -- -- 3,905,724

Recapitalization on

reverse acquisition -- -- -- --

Shares issued for

cash -- -- -3,398,534 9,774,993

Net income for the

year -- -- 8,579,565 8,579,565

Transfer to

statutory

reserves 940,656 -- -940,656 --

Foreign currency

translation gain -- 1,694,926 -- 1,694,926

Balance at

December 31,

2007 $2,051,030 $2,319,732 $14,209,392 $38,195,637

For more information, please contact:

US Contact:

Mary Xia/Lin Li

Tel: +1-732-230-3148

Asia Contact:

Dan Joseph

ICR, Inc.

Tel: +86-21-6122-1077

Gaihong Li

China Bio Energy Holdings

Tel: +86-29-8320-4383

d to $5.3 million in 2006, an increase of $3.2 million or 61%. This increase was due to the benefit of the economies of scale resulting from the growth in revenue and corresponding efficiencies in manufacturing operations and the extension in industry chain. Earnings per diluted share decreased to $0.21 in 2007 from $0.22 in 2006, a decrease of roughly 5%. The decrease was primarily the result of a $3.4 million deemed dividend to preferred shareholders related to warrants and conversion rights attached to the Company's preferred shares. The management of CBEH believes that the sales revenue and net income will continue to grow well as the increases of the output of biodiesel and oil products business. Excluding the deemed dividend to preferred shareholders, earnings per share actually increased 55% to $0.34 per share.

"We are pleased with our results for 2007," stated Gao Xincheng, Chief Executive Officer of China Bio Energy. "All segments of our business experienced significant growth and we believe that we are well positioned to continue growing. With the launch of our new bio diesel production facility in October of 2007 we expect bio diesel fuel revenue to continue to increase in 2008. As we did in 2007 we plan to continue to strengthen our distribution channel for our petroleum products business and expect that business to continue to grow as well."

About China Bio Energy Holdings

CBEH is a distributor of petroleum related products and a manufacturer and distributor of biodiesel fuel. CBEH sells a variety of related products including, gasoline (used primarily in automobiles), diesel fuel (commercial vehicles, agricultural machines, etc.), heavy oil and slurry (ship boilers, heating furnaces, metallurgical furnaces and other industrial furnaces), residual oil (utilized to manufacture petroleum coke, residual lubricating oil and asphalt or as a feedstock for cracking), and naphtha (used to manufacture ethane, propane, benzene, toluene and xylene). Sales of oil products in 2007 currently accounts for approximately 94% of CBEH's total revenues.

Bio-diesel refers to a clean burning alternative fuel produced from domestic, renewable resources. Bio-diesel is made through a chemical process whereby glycerin is separated from fat or vegetable oil. Bio-diesel contains no petroleum, but it can be blended at any level with petroleum diesel to create a bio-diesel blend and can be used in compression-ignition (diesel) engines with little or no modifications. Bio-diesel is the ideal substitute of petro-diesel and it has many benefits, including excellent environmental performance, superior ignition, compatibility with existing diesel engines, better lubrication to extend the life time of engines, and renewability. Sales of bio-diesel fuel in 2007 account for approximately 6% of the Company's total revenues. The percent of bio-diesel in the Company's total revenues will increase greatly as the output of biodiesel increases.

Safe Harbor Statement

This press release contains certain statements that may include "forward looking statements." All statements other than statements of historical fact included herein are "forward-looking statements." These forward-looking statements are often identified by the use of forward-looking terminology such as "believes," "expects" or similar expressions, involve known and unknown risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company's periodic reports that are filed with the Securities and Exchange Commission and available on its website ( http://www.sec.gov ). All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.

CHINA BIO ENERGY HOLDING GROUP CO., LTD. AND ITS SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

As of December 31,

2007 2006

ASSETS

CURRENT ASSETS

Cash and cash equivalents $1,382,371 $ 631,443

Restricted cash 200,000 641,433

Accounts receivable, net 288,589 5,745,362

Other receivables 1,548,681 159,857

Prepaid expenses 2,896,493 --

Advance to suppliers 16,546,506 4,276,233

Inventories 12,082,962 7,303,981

Advance to shareholders -- 22,054

Due from related party 593,696 315,497

Total current assets 35,539,298 19,095,860

CONSTRUCTION IN PROGRESS -- 515,742

PROPERTY AND EQUIPMENT, net 8,166,250 704,871

TOTAL ASSETS $43,705,548 $20,316,473

LIABILITIES AND STOCKHOLDERS'

EQUITY

CURRENT LIABILITIES

Accounts payable 179,617 2,267,116

Advance from customers 499,908 381,809

Value added tax payable 125,015 744,666

Other payables 3,165,677 282,638

Accrued expenses 67,875 --

Notes payable - trade /

related party -- 1,282,052

Loan payable 1,370,877 1,019,231

Long term notes payable -

current portion 67,287 36,670

Total current

liabilities 5,476,256 6,014,182

LONG TERM LIABILITIES 33,655 61,862

Total liabilities 5,509,911 6,076,044

COMMITMENT AND CONTINGENCIES

STOCKHOLDERS' EQUITY

Preferred stock, $.001 par

value; authorized shares

1,000,000; issued and

outstanding 1,000,000 shares 1,000 --

Common stock, $.0001 par

value; authorized shares

80,000,000; issued and

outstanding 25,454,545 and

23,954,545 as of December

31, 2007 and 2006,

respectively 2,545 2,395

Paid in capital 19,611,938 2,533,837

Statutory reserve 2,051,030 1,110,374

Accumulated other

comprehensive income 2,319,732 624,806

Retained earnings 14,209,392 9,969,017

Total stockholders'

equity 38,195,637 14,240,429

TOTAL LIABILITIES AND

STOCKHOLDERS' EQUITY $43,705,548 $20,316,473

CHINA BIO ENERGY HOLDING GROUP CO., LTD. AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME

For The Years Ended December 31,

2007 2006 2005

Net sales $87,104,187 $54,427,820 $29,217,184

Cost of goods sold 77,006,690 48,666,440 24,843,313

Gross profit 10,097,497 5,761,380 4,373,871

General and

administrative expenses 1,686,760 356,392 216,362

Income from operations 8,410,737 5,404,988 4,157,509

Non-operating income (expenses)

Interest income expenses) (142,442) (86,254) (16,422)

Other income 328,264 24,845 --

Financial expenses (16,994) -- --

Total non-operating

income (expenses) 168,828 (61,409) (16,422)

Net income 8,579,565 5,343,579 4,141,087

Other comprehensive item

Foreign currency

translation gain 1,694,926 464,099 128,667

Comprehensive Income $10,274,491 $ 5,807,678 $ 4,269,754

Net income $ 8,579,565 $ 5,343,579 $ 4,141,087

Deemed dividend to

preferred stockholders 3,398,534 -- --

Net income available to

common stockholders $ 5,181,031 $ 5,343,579 $ 4,141,087

Basic and diluted

weighted average shares

outstanding

Basic 24,238,107 23,954,545 23,954,545

Diluted 25,145,122 23,954,545 23,954,545

Basic and diluted net

earnings per share

available to common

stockholders

Basic $ 0.21 $ 0.22 $ 0.17

Diluted $ 0.21 $ 0.22 $ 0.17

CHINA BIO ENERGY HOLDING GROUP CO., LTD. AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOW

For The Years Ended December 31,

2007 2006 2005

CASH FLOWS FROM OPERATING

ACTIVITIES:

Net income $8,579,565 $5,343,579 $4,141,087

Adjustments to

reconcile net income

to net cash provided

by operating

activities:

Depreciation 228,833 104,443 65,861

Bad debt expenses -- 28,930 --

(Increase) decrease

in current assets:

Accounts receivable 5,644,946 (3,607,785) 734,378

Other receivable

and prepaid expenses (4,099,356) (143,252) 299,071

Advance to suppliers (11,484,067) (1,826,306) (4,129,702)

Inventory (4,098,099) (1,791,200) (460,985)

Due from related party (245,852) (37,756) (528,426)

Advance to shareholders -- -- --

Increase (decrease) in

current liabilities:

Accounts payable (1,889,778) 1,226,872 1,040,244

Advance from customers 87,896 (83,033) (1,456,698)

Taxes payable (643,780) 752,253 (56,980)

Other payables and

accrued expenses 2,811,389 53,803 130,706

Net cash provided by (used in)

operating activities (5,108,303) 20,548 (221,444)

CASH FLOWS FROM INVESTING

ACTIVITIES:

Restricted cash for

investing activity (200,000) -- --

Sale of investment -- 37,175 --

Acquisition of property

and equipment (6,809,173) (412,717) (19,659)

Construction in progress -- (515,742) --

Net cash provided by

(used in) investing

activities (7,009,173) (891,284) (19,659)

CASH FLOWS FROM FINANCING

ACTIVITIES:

Repayment from / (Advance

to) shareholder 22,617 (738) (12,790)

Repayment of short term

loan (1,577,744) -- --

Proceeds from short term

loan 269,531 1,019,231 --

Repayment of long term

notes payable (4,235) -- (21,800)

Proceeds from long term

notes payable -- 89,697 --

Issuance of preferred

stock 9,774,993 -- --

Capital contribution 3,905,724 -- --

Notes payable - trade -- (743,494) 743,494

Notes payable -

related party -- 290,726 (713,912)

Restricted cash 657,811 225,977 (14,791)

Net cash provided by

(used in) financing

activities 13,048,697 881,399 (19,799)

NET INCREASE (DECREASE) IN

CASH AND CASH EQUIVALENTS 931,221 10,663 (260,902)

EFFECT OF EXCHANGE RATE CHANGE

ON CASH AND CASH EQUIVALENTS (180,293) 464,099 128,033

CASH AND CASH EQUIVALENTS,

BEGINNING OF YEAR 631,443 156,681 289,550

CASH AND CASH EQUIVALENTS, END

OF YEAR $1,382,371 $ 631,443 $ 156,681

Supplemental Cash flow

data:

Income tax paid $ -- $ -- $ --

Interest paid $ 137,463 $ 108,423 $ 40,016

CHINA BIO ENERGY HOLDING GROUP CO., LTD. AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

Preferred stock

Additional

paid in

Shares Amount Shares Amount capital

Balance at December

31, 2004 -- $ -- 23,954,545 $2,395 $2,533,837

Net income for the

year -- -- -- -- --

Transfer to

statutory

reserves -- -- -- -- --

Foreign currency

translation gain -- -- -- -- --

Balance at December

31, 2005 -- -- 23,954,545 2,395 2,533,837

Net income for the

year -- -- -- -- --

Transfer to

statutory

reserves -- -- -- -- --

Foreign currency

translation gain -- -- -- -- --

Balance at December

31, 2006 -- -- 23,954,545 2,395 2,533,837

Capital

contribution -- -- -- -- 3,905,724

Recapitalization on

reverse

acquisition -- -- 1,500,000 150
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SOURCE China Bio Energy Holding Group Co., Ltd.
Copyright©2008 PR Newswire.
All rights reserved

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