Pingtan Marine Enterprise Reports Financial Results for the First Quarter Ended March 31, 2020

FUZHOU,China,May 12,2020 -- Pingtan Marine Enterprise Ltd. (Nasdaq: PME) ("Pingtan" or the "Company"),a global fishing company based in the People's Republic of China (PRC),today announced financial results for its first quarter ended March 31,2020.

First Quarter 2020 Financial Highlights (Year-on-Year Comparisons)

Revenue decreased by 6.1% to $17.3 million from $18.4 million.

Gross profit increased by 41.0% to $5.8 million from $4.1 million.

Net income was $8.42 million,compared to net loss of $1.97 million.

Net income attributable to owners of the Company was $7.66 million,or $0.10 per basic and diluted share,compared to net loss attributable to owners of the Company of $1.89 million,or $0.02 per basic and diluted share.

Management Comments

Mr. Xinrong Zhuo,Chairman and CEO of the Company,commented,"In the first quarter of 2020,economic activities in China and many countries of the world were affected to a varied extent by the COVID-19 pandemic. In the first quarter of 2020,Pingtan's sales volume was over 13 million kg,which shows a robust year-on-year growth,but our sales revenue was adversely affected by both the pandemic and the seafood market situation. On the one hand,there was a decrease in the demand from the catering industry in the first quarter due to the pandemic,which affects the price of seafood; on the other hand,the market supply of Indian Ocean squid,one of our key product types,was more than sufficient to meet the market demand,which led to a downward pricing trend for this product. However,the market activity in China is starting to recover from the pandemic,and we believe consumption of seafood will gradually return to normal levels. The evolving and uncertain environment related to COVID-19 worldwide,however,makes it difficult to accurately predict the future impact on our results. In light of the current developments,we expect demand will increase having a positive impact on our sales for the remainder of the year."

Factors Affecting Pingtan's Results of Operations

COVID-19 pandemic

Since the outbreak of COVID-19 in December 2019,business activities in China have been seriously affected. In reaction to this pandemic,many provinces and municipalities in China activated the highest Level-I Response to the emergency public health incident in late January. Emergency quarantine measures and travel restrictions have had a significant impact on many sectors across China,which has also adversely affected our operations. To reduce the impact on the Company's production and operation,the Company implemented certain safety measures to allow its employees to gradually resume work in mid-February. For the employees who left Fuzhou during the Spring Festival holiday and could not return to Fuzhou as scheduled,or those who could only resume work after satisfying the 14-day quarantine requirement,the Company provided paid leave. Since resuming work in mid-February,the Company has been using a shift system and adopted additional health and safety procedures to protect its employees. With these measures,the Company was able to maintain its sales and operations from mid-February to mid-March. On March 23,2020,the Company resumed normal operations.

The situation created by the COVID-19 pandemic has led to an unprecedented economic uncertainty globally. However,the extent of the overall impact on the Company's financial conditions and results of operations is still highly uncertain and will depend on future developments,such as the ultimate duration and scope of the outbreak,its impact on our customers and exporters,how quickly normal economic conditions,operations,and the demand for our products can resume and whether the pandemic leads to recessionary conditions in China. Some of our customers are fish processing plants that exports processed fish products to foreign countries. These customers tended to reduce or postpone their purchases from us in the initial stage of the pandemic and have now started adjusting their business strategies in relation to exportation or domestic sale. Although the market activity in China is beginning to recover,the Company expects its full year 2020 results of operations to be adversely affected by the pandemic.

Indonesia's Moratorium on Fishing License Renewals

In early December 2014,the Indonesian government introduced a six-month moratorium on issuing new fishing licenses and renewals so that the country's Ministry of Maritime Affairs and Fisheries ("MMAF") could combat illegal fishing and rectify ocean fishing order. In February 2015,the Company ceased all fishing operations in Indonesia. In November 2015,the Indonesian government announced that the moratorium had concluded,but the MMAF has neither implemented new fishing policies nor resumed the license renewal process. The Company has been paying close attention to any new trends in the MMAF's fishing policy and has been actively exploring new locations to deploy its vessels.

As of March 31,of the Company's 142 vessels,69 were operating in international waters,12 were operating in the Bay of Bengal in India,13 were located in the PRC,37 were located in the Arafura Sea in Indonesia,and the remaining 11 vessels were undergoing modification and rebuilding projects.

First Quarter 2020 Selected Financial Highlights

($ in millions,except shares and per share data)

Three Months ended March 31,

2020

2019

Revenue

$17.3

$18.4

Cost of Revenue

$11.6

$14.3

Gross Profit

$5.8

$4.1

Gross Margin

33.2%

22.1%

Net Income (Loss)

$8.42

$(1.97)

Basic and Diluted Weighted Average Shares

79.1

79.1

EPS (in $)

$0.10

$(0.02)

Balance Sheet Highlights

($ in millions,except for book value per share)

3/31/2020

12/31/2019

Cash and Cash Equivalents

$32.8

$10.1

Total Current Assets

$159.5

$64.3

Total Assets

$478.6

$404.1

Total Current Liabilities

$161.0

$88.8

Long-term bank loans,non-current portion

$155.7

$160.2

Total Liabilities

$316.7

$249.1

Shareholders' Equity

$161.8

$155.1

Total Liabilities and Shareholders' Equity

$478.6

$404.1

Book Value Per Share (in $)

$2.05

$1.96

Consolidated Financial and Operating Review

Revenue

Revenue for the three months ended March 31,2020 was $17.3 million,a decrease of $1.1 million,or 6.1%,from $18.4 million for the same period in 2019. Sales volume increased by 54.9% to 13.5 million KG in the three months ended March 31,2020 from 8.7 million KG in the same period of 2019. Sales volumes increased by a larger percentage while revenue decreased slightly for the first quarter of 2020. The decrease in revenue was primarily attributable to the different sales mix,impact of market situation and the 39.3% decrease in average unit sale price during the three months ended March 31,as compared to the three months ended March 31,2019.

Gross Margin

The Company's gross margin was 33.2% for the three months ended March 31,compared to 22.1% in the prior year period. The increase in gross margin was primarily attributable to a drop of unit production cost by 48.0% for the first quarter of 2020,as compared to the same period in the prior year. In the first quarter 2019,we deployed new fishing vessels to sea,which drove up the refueling cost and other related costs of revenue,but no revenue was generated because the vessels were not yet in operation during that time.

Selling Expenses

For the three months ended March 31,selling expenses were $0.9 million compared to $0.7 million in the prior year period. The increase was primarily due to the $0.79 million increase in storage fees and a $0.16 million increase in shipping and handling fees as a result of renting larger warehouses and an increased number of fish inventory delivered to the warehouses,partially offset by the decrease in insurance fees and customs clearance charge.

General & Administrative Expenses

For the three months ended March 31,general and administrative expenses were $2.0 million,compared to $4.8 million in the prior year period. The decrease was primarily due to the $510,728 decrease in the depreciation of non-operating vessels,or 41.8%,2019,as well as no impairment of assets for the first quarter in 2020,compared to a $2.2 million impairment loss that was recorded in the prior year period.

NetIncome (Loss)

Net income for the three months ended March 31,2020 was $8.42 million,compared to net loss of $1.97 million in the same period of 2019,an increase of 527.6%.

NetIncome(Loss) Attributable to Owners of the Company

Net income attributable to owners of the Company for the three months ended March 31,2020 was $7.66 million,or $0.02 per basic and diluted share,in the same period of 2019.

Conference Call Details

Pingtan will discuss the financial results for the first quarter of 2020 during a conference call on Tuesday,2020 – 8:00 a.m. ET.

The dial-in numbers are:

Live Participant Dial-in (Toll Free): +1 (877) 407-0310

Live Participant Dial-in (International): +1 (201) 493-6786

To listen to the live webcast,please go to http://www.ptmarine.com and click on the conference call link at the top of the page,or go to: https://78449.themediaframe.com/dataconf/productusers/pme/mediaframe/38112/indexl.html. This webcast will be archived and accessible through the Company's website for approximately 30 days following the call.

About Pingtan

Pingtan is a global fishing company engaging in ocean fishing through its subsidiary,Fujian Provincial Pingtan County Ocean Fishing Group Co.,Ltd.,or Pingtan Fishing.

Business Risks and Forward-Looking Statements

This press release may contain forward-looking statements that are subject to the safe harbors created under the Securities Act of 1933 and the Securities Exchange Act of 1934,as amended. Words such as "estimate," "project," "forecast," "plan," "believe," "may," "expect," "anticipate," "intend," "planned," "potential," "can," "expectation" and similar expressions,or the negative of those expressions,may identify forward-looking statements. Although forward-looking statements reflect the good faith judgment of our management,such statements can only be based on facts and factors currently known by us. Consequently,forward-looking statements are inherently subject to risks and uncertainties and actual results and outcomes may differ materially from the results and outcomes discussed in or anticipated by the forward-looking statements. Risks include anticipated growth and growth strategies; need for additional capital and the availability of financing; locating or re-locating vessels,in foreign waters and related license requirements; our ability to successfully manage relationships with customers,distributors and other important relationships; actions taken by government regulators,such as the Indonesian moratorium; technological changes; competition; demand for our products and services; the deterioration of general economic conditions,whether internationally,nationally or in the local markets in which we operate; the impact of the current coronavirus (COVID-19) pandemic on the Company's financial condition,business operations and liquidity; the impact of COVID-19 on our customers and distributors; legislative or regulatory changes that may adversely affect our business; operational,mechanical,climatic or other unanticipated issues that adversely affect the production capacity of the Company's fishing vessels and their ability to generate expected annual revenue and net income; and other risk factors contained in Pingtan's SEC filings available at www.sec.gov,including Pingtan's most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Readers are cautioned not to place undue reliance on any forward-looking statements,which speak only as of the date on which they are made. Pingtan undertakes no obligation to update or revise any forward-looking statements for any reason,except as required by law.

CONTACT:

LiMing Yung (Michael)

Chief Financial Officer

Pingtan Marine Enterprise Ltd.

Tel: +86 591 87271753

michaelyung@ptmarine.net

Maggie Li

Investor Relations Manager

Pingtan Marine Enterprise Ltd.

Tel: +86 591 8727 1753

mli@ptmarine.net

INVESTOR RELATIONS

PureRock Communications Limited

PTmarine@pure-rock.com

PINGTAN MARINE ENTERPRISE LTD. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(IN U.S. DOLLARS)

For the Three Months Ended

March 31,

2020

2019

REVENUE

$

17,307,000

$

18,424,209

COST OF REVENUE

11,554,443

14,343,558

GROSS PROFIT

5,752,557

4,080,651

OPERATING EXPENSES:

Selling

901,651

709,929

General and administrative

1,270,143

3,595,390

General and administrative - depreciation

711,433

1,222,161

Subsidy

(7,773,993)

-

Total Operating (Income) Expenses

(4,890,766)

5,527,480

INCOME (LOSS) PROFIT FROM OPERATIONS

10,643,323

(1,446,829)

OTHER INCOME (EXPENSE):

Interest income

1,200,126

2,516

Interest expense

(2,898,896)

(529,165)

Foreign currency transaction (loss) gain

(366,409)

90,084

Loss on equity method investment

(125,528)

(110,616)

Other (expense) income

(35,540)

25,671

Total Other Expense Income,net

(2,226,247)

(521,510)

INCOME (LOSS) BEFORE INCOME TAXES

8,417,076

(1,968,339)

INCOME TAXES

-

-

NET INCOME (LOSS)

$

8,076

$

(1,339)

LESS: NET INCOME (LOSS) ATTRIBUTABLE TO THE NON-CONTROLLING INTEREST

752,386

(81,100)

NET INCOME (LOSS) ATTRIBUTABLE TO OWNERS OF THE COMPANY

$

7,664,690

$

(1,887,239)

COMPREHENSIVE INCOME:

NET INCOME (LOSS)

8,339)

OTHER COMPREHENSIVE (LOSS) GAIN

Unrealized foreign currency translation (loss) gain

(1,688,439)

2,899,349

COMPREHENSIVE INCOME

$

6,728,637

$

931,010

LESS: COMPREHENSIVE INCOME ATTRIBUTABLE TO THE NON-CONTROLLING INTEREST

617,214

124,977

COMPREHENSIVE INCOME ATTRIBUTABLE TO OWNERS OF THE COMPANY

$

6,111,423

$

806,033

NET INCOME (LOSS) PER ORDINARY SHARE ATTRIBUTABLE TO OWNERS OF THE COMPANY

Basic and diluted

$

0.10

$

(0.02)

WEIGHTED AVERAGE ORDINARY SHARES OUTSTANDING:

Basic and diluted

79,055,053

79,053

PINGTAN MARINE ENTERPRISE LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(IN U.S. DOLLARS)

March 31,

December 31,

2020

2019

(Unaudited)

ASSETS

CURRENT ASSETS:

Cash and cash equivalents

$

32,763,999

$

10,092,205

Restricted cash

6,218,903

-

Accounts receivable,net of allowance for doubtful accounts

10,234,384

9,273,446

Due from related parties

58,470,920

12,477,777

Inventories,net of reserve for inventories

50,761,587

30,752

Prepaid expenses

962,879

1,354,129

Other receivables

46,099

613,384

Total Current Assets

159,458,771

64,338,693

OTHER ASSETS:

Cost method investment

2,963,967

3,010,235

Equity method investment

27,370,624

27,923,464

Prepayment for long-term assets

32,816,080

49,040,338

Right-of-use asset

346,531

438,254

Property,plant and equipment,net

255,596,955

259,377,729

Total Other Assets

319,094,157

339,790,020

Total Assets

$

478,552,928

$

404,128,713

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:

Accounts payable

$

3,064,252

$

7,951,766

Accounts payable - related parties

1,360

1,707,217

Short-term bank loans

90,612,694

10,034,116

Long-term bank loans - current portion

55,539,089

57,122,789

Accrued liabilities and other payables

9,837,231

11,428,018

Lease liability- current liability

315,939

375,922

Due to related parties

18,354

168,328

Total Current Liabilities

161,030,919

88,788,156

OTHER LIABILITIES:

Lease liability

-

32,203

Long-term bank loans - non-current portion

155,715,516

160,230,498

Total Liabilities

316,746,435

249,050,857

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY:

Equity attributable to owners of the company:

Ordinary shares ($0.001 par value; 125,000,000 shares authorized; 79,053 shares issued and outstanding at March 31,2020 and December 31,2019)

79,055

79,055

Additional paid-in capital

81,682,599

81,599

Retained earnings

61,144

54,286,454

Statutory reserve

15,748,751

15,751

Accumulated other comprehensive loss

(17,634,175)

(16,908)

Total equity attributable to owners of the company

141,827,374

135,951

Non-controlling interest

19,979,119

19,361,905

Total Shareholders' Equity

161,806,493

155,077,856

Total Liabilities and Shareholders' Equity

$

478,713

PINGTAN MARINE ENTERPRISE LTD. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN U.S. DOLLARS)

For the Three Months Ended

March 31,

2020

2019

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income (loss)

$

8,339)

Adjustments to reconcile net income from operations to net cash provided by operating activities:

Depreciation

3,378,428

2,740,118

Increase in allowance for doubtful accounts

107,542

-

Increase (decrease) in reserve for inventories

(266,298)

213,454

Loss on equity method investment

125,528

110,616

Impairment loss of fishing vessels

-

2,229,502

Changes in operating assets and liabilities:

Accounts receivable

(1,227,791)

(814,569)

Inventories

(20,751,500)

(4,498,954)

Prepaid expenses

376,068

391,018

Other receivables

566,339

592,037

Accounts payable

(4,739)

5,444,714

Accounts payable - related parties

(38,188)

(318,642)

Advance from customers

(821,178)

96,342

Accrued liabilities and other payables

(615,618)

950,819

Accrued liabilities and other payables - related party

-

(1,290)

Due from related parties

(1,165,502)

Due to related parties

(332,844)

5,223,359

NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES

(17,085,677)

10,390,185

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchase of property,plant and equipment

(8,709,670)

(21,353,232)

Proceeds from government subsidies for fishing vessels construction

21,051,727

2,159,246

Deposit for purchase of land use right

-

(4,357,621)

NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES

12,342,057

(23,551,607)

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from short-term bank loans

81,960,166

-

Proceeds from long-term bank loans

8,161,628

83,002,312

Repayments of long-term bank loans

(10,961,456)

(926,365)

Advances from related parties

-

5,534,231

Advance to related party-HL

(45,721,566)

-

NET CASH PROVIDED BY FINANCING ACTIVITIES

33,438,772

87,610,178

EFFECT OF EXCHANGE RATE ON CASH,CASH EQUIVALENTS AND RESTRICTED CASH

195,545

477,710

NET INCREASE IN CASH,CASH EQUIVALENTS AND RESTRICTED CASH

28,697

74,926,466

CASH,CASH EQUIVALENTS AND RESTRICTED CASH - beginning of period

10,205

1,966,855

CASH,CASH EQUIVALENTS AND RESTRICTED CASH - end of period

$

38,982,902

$

76,893,321

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

Cash paid for:

Interest

$

3,059,072

$

1,302

Income taxes

$

-

$

-

RECONCILIATION TO AMOUNTS ON CONSOLIDATED BALANCE SHEETS:

Cash and cash equivalents

32,999

76,321

Restricted cash

6,903

-

TOTAL CASH,CASH EQUIVALENTS AND RESTRICTED CASH

$

38,321

NON-CASH INVESTING AND FINANCING ACTIVITIES:

Acquisition of property and equipment by decreasing prepayment for long-term assets

$

15,705,688

$

-

Property and equipment acquired on credit as payable

$

-

$

10,168

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