Commodities News

Mar. 12, 2010 (PR Newswire) --

In the news release, "China Integrated Energy Reports Record Fourth Quarter and 2009 Financial Results" issued on March 12 by China Integrated Energy, Inc. (Nasdaq: CBEH) over PR Newswire Asia, we are advised by the Company that earnings per share for the fourth quarter of 2009 has been updated to $0.30 from $0.28 due to a revision in shares outstanding to 40.2 million from 42.2 million as issued inadvertently. Full correct release follows:

China Integrated Energy Reports Record Fourth Quarter and 2009 Financial Results

    -- Fourth quarter 2009 sales increase 57.9% to $93.3 million; net income
       $12.0 million represents an 84.3% increase over 2008 adjusted net
       income*, with EPS of $0.30

    -- Fiscal Year 2009 sales increase 33.8% to $289.6 million; net income of
       $37.9 million, a 32.8% increase over 2008 adjusted net income*, with
       EPS of $1.04

    -- Management to host earnings conference call on March 12, 2010 at 10:00
       am ET

XI'AN, China, March 12 /PRNewswire-Asia-FirstCall/ -- China Integrated Energy, Inc. (Nasdaq: CBEH), a leading non-state-owned integrated energy company in China, today announced its financial results for the fourth quarter and fiscal year 2009.

    SUMMARY FINANCIALS

    Fourth Quarter 2009 Results
                                  Q4 2009        Q4 2008            CHANGE
    Sales                      $93.3 million  $59.1 million         +57.9%
    Gross Profit               $13.5 million   $7.5 million         +79.3%
    GAAP Net Income (Loss)     $12.0 million  ($3.3 million)           N/A
    Stock-based Compensation*            N/A   $9.8 million
    Adjusted Net Income*       $12.0 million   $6.5 million         +84.3%
    GAAP EPS                            $.30         ($0.13)           N/A
    Adjusted EPS (Fully
     Diluted)*                          $.30          $0.17         +76.5%



    Fiscal Year 2009 Results
                                  FY 2009        FY 2008            CHANGE
    Sales                     $289.6 million $216.5 million         +33.8%
    Gross Profit               $41.5 million  $30.6 million         +35.3%
    GAAP Net Income            $37.9 million  $18.7 million        +102.6%
    Stock-based Compensation*            N/A   $9.8 million
    Adjusted Net Income*       $37.9 million  $28.6 million         +32.8%
    GAAP EPS                           $1.04          $0.54         +94.4%
    Adjusted EPS (Fully
     Diluted)*                         $1.04          $0.84         +25.0%

    * Adjusted Net Income and EPS in Q4 2008 and Fiscal Year 2008 are non-GAAP
      calculations and do not include $9.8 million of non-cash, stock-based
      compensation charge related to the "Make Good" provision of an October
      2008 financing agreement. For more information about the non-GAAP
      financial measures contained in this press release, please see "About
      Non-GAAP Financial Measures" below.

Fourth Quarter 2009 Financial Results

Sales -- Sales for the fourth quarter of 2009 were $93.3 million compared to $59.1 million in the fourth quarter of 2008, representing an increase of 57.9%. The increase was mainly due to strong market demand for finished oil and heavy oil products and sales growth generated by the Company's retail gas stations. Revenue from our three business segments, Wholesale Distribution of Finished Oil and Heavy Oil Products, Production and Sales of Biodiesel, and Operations of Retail Gas Stations is reported as follows:

    Fourth Quarter 2009 Revenue Breakdown
                                   Q4 2009         Q4 2008           CHANGE
    Wholesales Distribution
     of Finished Oil and
     Heavy Oil                  $66.1 million   $36.7 million        +80.1%
      % of Sales                        70.8%           62.1%
    Production and Sale of
     Biodiesel                  $15.7 million   $14.9 million         +5.4%
     % of Sales                         16.8%           25.2%
    Operations of Retail
     Gas Stations               $11.5 million    $7.5 million        +53.3%
     % of Sales                         12.4%           12.7%
    Total Sales                 $93.3 million   $59.1 million        +57.9%

"Growth was exceptionally robust during the fourth quarter of 2009, enabling us to generate record results for 2009 and to surpass our previously issued guidance," stated Mr. Gao Xincheng, Chief Executive Officer of China Integrated Energy, Inc. "We increased sales in all business segments as we continued to expand our customer base and further penetrate existing markets as well as new market territories, while capitalizing on increased demand for our fuel products. During the quarter we increased distributed petroleum product sales by 80.1%, retail gas sales by about 53.3%, and biodiesel sales by more than 5.4% over the same period last year. Today, we service 14 provinces and municipalities through our extensive petroleum distribution network, operate 12 retail gas stations, and one of the largest biodiesel manufacturing facilities in China with 100,000 tons of annual production capacity. Based upon our expansion plans, which address each of our business segments, supported by favorable government policies and market conditions and crude oil prices as a result of China's economic recovery, we anticipate another year of strong growth in 2010."

Cost of Sales -- Cost of sales for the three months ended December 31, 2009 was approximately $79.8 million compared to $51.5 million in the same period of 2008, an increase of 54.9%, which was attributable to the increase in production and sales activities during the fourth quarter of 2009. Cost of sales as a percentage of sales was approximately 85.6% for the fourth quarter of 2009 and 87.3% for the same period in 2008.

Gross Profit and Gross Margin -- Gross profit was $13.5 million for the fourth quarter of 2009 compared to $7.5 million for the same period in 2008, an increase of 79.3% and representing gross margins of 14.4% and 12.7%, respectively. The increase in gross margin was attributable to favorable frequent pricing adjustments by the NDRC reflecting global oil pricing, an increase of higher margin heavy oil products and success in leveraging new suppliers, enhanced by operating efficiencies in retail gas stations and increased sales volumes. For the fourth quarter of 2009, the gross profit margin for production and sales of biodiesel was 31.2%, wholesale distribution of finished oil and heavy oil products was 10.6%, and retail gas station operations was 13.5%.

Operating Expenses -- Selling, general and administrative expenses for the fourth quarter of 2009 were approximately $1.7 million compared to $1.0 million for the same period in 2008 and remained stable at 1.8% of total sales for both periods.

Net Income -- For the quarter ended December 31, 2009, the Company reported net income of $12.0 million, or $.30 per diluted share, compared to a GAAP net loss of $3.3 million, or a loss of $0.13 per diluted share in the fourth quarter of 2008. Net loss for the fourth quarter of 2008 included a $9.8 million non-cash charge in stock-based compensation expenses related to the "Make Good" provision of the October 2008 financing agreement. Excluding that charge, fourth quarter 2008 adjusted net income was $6.5 million or $0.17 per diluted share. Diluted weighted average shares outstanding were 40.2 million and 32.8 million for the fourth quarter of 2009 and 2008, respectively.

Fiscal Year 2009 Financial Results

Sales -- Sales for 2009 were $289.6 million, an increase of 33.8% compared to $216.5 million in 2008. The increase was mainly attributable to growth in the Wholesale Distribution of Finished Oil and Heavy Oil Products and Operations of Retail Gas Station segments, achieved through continued expansion of sales channels and territories as well as increased penetration of existing markets. During 2009, the Company increased the number of customers in its wholesale distribution segment to over 1,180 from 936 in 2008, and the sales volume of wholesale distribution of finished oil and heavy oil products increased by 126,000 tons or 82.3% from 2008. Sales from the Company's retail gas station segment increased as a result of the addition of four fully operational gas stations and increased sales volume per gas station. Sales volume of biodiesel production in 2009 increased by 9,700 tons, or 14.0%, to 78,800 tons over 2008 and capacity utilization stood at 100.0%. Business segment results for the years 2009 and 2008 were as follows:

    Fiscal Year 2009 Revenue Breakdown
                                   FY 2009         FY 2008          CHANGE
    Wholesale Distribution
     of Finished Oil and
     Heavy Oil                 $195.9 million  $143.5 million       +36.5%
     % of Sales                         67.6%           66.3%
    Production and Sale of
     Biodiesel                  $55.8 million   $50.0 million       +11.5%
     % of Sales                         19.3%           23.1%
    Operations of Retail
     Gas Stations               $37.9 million   $23.0 million       +65.2%
     % of Sales                         13.1%           10.6%
    Total Sales                $289.6 million  $216.5 million       +33.8%

Cost of Sales -- Cost of sales for 2009 was $248.1 million compared to $185.9 million in 2008, an increase of $62.2 million, or 33.5%, which was in direct relation to increased production and sales activities during 2009.

Gross Profit and Gross Margin - Gross profit was $41.5 million for 2009 compared to $30.6 million for 2008, an increase of 35.3% and representing gross margins of approximately 14.3% and 14.2%, respectively. During 2009, the gross profit margin for production and sale of biodiesel was approximately 28.4% while gross profit margin for wholesale distribution of finished oil and heavy oil products, such as gasoline and diesel oil, was approximately 10.5%. The retail gas stations during this same period yielded gross margins of 13.5%, which improved due to operational improvements and increased sales volume per gas station.

Operating Expenses -- Selling, general and administrative expenses for 2009 were $3.8 million compared to $2.0 million for 2008, an increase of $1.8 million or 88.0%. Total operating expenses as a percentage of sales was 1.3% and 0.9% for 2009 and 2008, respectively. The increase in operating expenses was mainly attributable to approximately $1.0 million of legal, consulting fees, stock option expenses, and filing expenses in connection with the Company being public in the U.S. In addition, payroll and related expenses of sales and administrative staff increased by approximately $439,000 as a result of business growth and expansion of distribution channels and territories.

Net Income -- Net income for 2009 increased 102.6% to $37.9 million, or $1.04 per diluted share, compared to GAAP net income of $18.7 million, or $.54 per diluted share, in 2008. Excluding the $9.8 million one-time non-cash stock based compensation expense related to the make good provision in the 2008 financing agreement, 2008 adjusted net income was $28.6 million, or $0.84 per diluted share. Diluted weighted average shares outstanding were 36.3 million and 32.9 million for 2009 and 2008, respectively.

Liquidity and Capital Resources

Cash and cash equivalents were $62.4 million on December 31, 2009, compared to $23.1 million on December 31, 2008. 2009 cash and cash equivalents included proceeds from a financing agreement in October 2008 and net proceeds from a public offering completed in November 2009. The Company had working capital of $121.2 million on December 31, 2009 and a current ratio of 12.9 to 1. Inventories were $20.9 million and the accounts receivable balance was $3.1 million on December 31, 2009, compared to $22.3 and $8.2 million on December 31, 2008, respectively. The annualized days sales outstanding for the fiscal year 2009 were 4 days. Net cash provided by operations was $4.4 million in 2009, compared to $8.5 million in 2008.

Financial Outlook for 2010

Management expects fiscal year 2010 revenues of $382 million and net income of $48 million, representing an increase of 32.8% and 26.3% compared to 2009 revenue and net income, respectively. Guidance includes an additional 50,000 tons of annual biodiesel manufacturing capacity expected to come online during the third quarter of 2010 and the lease of 3 additional retail gas stations. Management reserves the right to revise guidance in the future.

Business Outlook for 2010

Our management believes that China Integrated Energy is well positioned to serve China's growing demand for fuels used in transportation, heating and industrial production. In addition to its expanding biodiesel manufacturing capacity and retail gas station business, China Integrated Energy's wholesale distribution business benefits from its geographic location, which includes valuable railway access, an extensive distribution network and a diversified, established base of customers and suppliers. The company is focused on growing all of its business segments, both organically and through complementary acquisitions, while further diversifying its supplier base for finished oil and heavy oil products.

In November 2009, China Integrated Energy began construction of a new biodiesel production facility in Tongchuan City, Shaanxi Province. The new production facility, adjacent to the existing production base, is expected to add 50,000 tons in annual production capacity, bringing total output to 150,000 tons. Management expects to bring this facility online during the third quarter of 2010 and anticipates $15 million in capital expenditures to accomplish this goal.

In January 2010, China Integrated Energy signed a contract with an existing wholesale distribution customer to deliver an estimated 160,000 tons of petroleum products in 2010, an increase of 62,000 tons over sales to this customer in 2009. The newly signed contract is expected to generate an additional $52 million in revenue from this customer in 2010. The company plans to increase volume with existing customers while adding new ones across the provinces it services, which include a collective population of approximately 640 million people.

The Company plans to add additional retail gas stations through acquisition or lease, which should benefit its overall distribution profit margins. At the end of 2009, China Integrated Energy operated 10 retail gas stations, up from five at the end of 2008. Three of the newly added stations were acquired in December 2009, and are expected to add approximately $19.9 million in revenues for FY2010. In January 2010, the Company announced the acquisition of two additional gas stations, bringing the total number of operating gas stations in Shaanxi province to 12. These two additional stations are expected to add approximately $14.2 million in revenues for FY 2010.

"China Integrated Energy is the only vertically integrated biodiesel producer in China with a distribution license and one of only three companies in Shaanxi licensed to distribute both finished and heavy oil. With our proprietary biodiesel production capabilities, we are able to utilize multiple feedstock sources to effectively manage our input costs. In addition, we are capitalizing on a unique opportunity to leverage these assets with a growing retail fuel station business. Collectively, these represent strong competitive advantages and are the reason for our superior operating margins. We have momentum and will exploit our assets, working capital and operating strengths to successfully execute on our growth strategies," Mr. Gao concluded.

Conference Call Information

Interested parties may access the Company's conference call, scheduled for 10:00 a.m. EST on March 12, 2010, by dialing +1-888-549-7735 from within the United States, or +1-480-629-9858 if calling internationally. The conference ID is 4259230. It is advisable to dial in approximately 5-10 minutes prior to the start of the call. A replay will be available through March 19, 2010 and can be accessed by dialing +1-800-406-7325 (U.S.), +1-303-590-3030 (Int'l), passcode 4259230.

This call is being web cast by ViaVid Broadcasting and can be accessed at ViaVid's website at http://www.viavid.netor at the following link: http://viavid.net/dce.aspx?sid=00007211 . To access the web cast, you will need to have the Windows Media Player on your desktop. For the free download of the Media Player please visit: http://www.microsoft.com/windows/windowsmedia/en/download/default.asp .

About China Integrated Energy, Inc.

China Integrated Energy, Inc. is a leading non-state-owned integrated energy company in the PRC engaged in three business segments: the wholesale distribution of finished oil and heavy oil products, the production and sale of biodiesel, and the operation of retail gas stations. The Company's primary business segment is the wholesale distribution of finished oil and heavy oil products. The Company also operates a 100,000-ton biodiesel production plant and twelve retail gas stations in China.

Safe Harbor Statement

This press release includes statements that may constitute forward-looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. For example, statements about the future use of the proceeds are forward looking and subject to risks. China Integrated Energy, Inc. may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission on forms 10-K, 10-Q and 8-K, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about the Company's beliefs and expectations, are forward-looking statements. Forward- looking statements involve inherent risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Potential risks and uncertainties include, but are not limited to, risks outlined in the Company's filings with the U.S. Securities and Exchange Commission. The Company does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

About Non-GAAP Financial Measures

To supplement our consolidated financial statements, which statements are prepared and presented in accordance with GAAP, we use the following non-GAAP financial measures: non-GAAP net income, and non-GAAP EPS. The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. We use these non-GAAP financial measures for financial and operational decision making and as a means to evaluate period-to-period comparisons. Our management believes that these non-GAAP financial measures provide meaningful supplemental information regarding our performance and liquidity by excluding certain expenses and expenditures that may not be indicative of our "recurring core business operating results," meaning our operating performance excluding not only non-cash charges, such as stock-based compensation, but also discrete cash charges that are infrequent in nature. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting and analyzing future periods. These non-GAAP financial measures also facilitate management's internal comparisons to our historical performance and liquidity as well as comparisons to our competitors' operating results. We believe these non-GAAP financial measures are useful to investors both because (1) they allow for greater transparency with respect to key metrics used by management in its financial and operational decision making and (2) they are used by our institutional investors and the analyst community to help them analyze the health of our business.

    For more information, please contact:

    HC International, Inc.
     Ted Haberfield, Executive VP
     Tel:   +1-760-755-2716
     Email: thaberfield@hcinternational.net
     Web:   http://www.hcinternational.net

                              Financial Tables Follow


                 CHINA INTEGRATED ENERGY, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

                                               December 31,       December 31,
                                                   2009               2008
      ASSETS

      CURRENT ASSETS
           Cash and cash equivalents            $62,415,443       $23,119,028
           Restricted cash                               --           919,351
           Accounts receivable                    3,099,587         8,164,320
           Other receivables and deposits         7,231,586         3,986,984
           Prepaid expenses                       3,145,502         1,884,102
           Advance to suppliers                  34,544,100        17,945,487
           Inventories, net                      20,954,851        22,268,903

              Total current assets              131,391,069        78,288,175

            Prepaid rents                        24,620,685         6,408,568
            Property and equipment, net           7,561,907         9,997,674

               Total noncurrent assets           32,182,592        16,406,242

      TOTAL ASSETS                             $163,573,661       $94,694,417

      LIABILITIES AND STOCKHOLDERS' EQUITY

      CURRENT LIABILITIES
           Advance from customers                $1,903,124        $4,580,462
           Taxes payable                          1,242,931           735,461
           Other payables                         2,700,988         3,232,088
           Loans payable                          4,395,025         2,247,197

               Total current liabilities         10,242,068        10,795,208

      TOTAL LIABILITIES                          10,242,068        10,795,208

      STOCKHOLDERS' EQUITY
           Preferred stock,  $.001 par
            value;  authorized shares
            10,000,000; issued and
            outstanding 3,115,753 and
            3,465,753 shares at December
            31, 2009 and December 31 2008,
            respectively                              3,115             3,465
           Common stock,  $.0001 par
            value; authorized shares
            79,000,000; issued and
            outstanding 33,269,091 and
            27,169,091 shares at December
            31, 2009 and December 31,
            2008, respectively                        3,326             2,716
           Additional paid in capital            75,858,994        44,434,250
           Statutory reserve                      4,920,114         4,920,114
           Accumulated other
            comprehensive income                  5,473,420         5,337,003
           Retained earnings                     67,072,624        29,201,661

               Total stockholders' equity       153,331,593        83,899,209

      TOTAL LIABILITIES AND STOCKHOLDERS'
       EQUITY                                  $163,573,661       $94,694,417



                      CHINA INTEGRATED ENERGY, INC. AND SUBSIDIARIES
            CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME


       (Unaudited)                            For The Years Ended December 31,
                                                   2009              2008

       Sales                                   $289,572,053      $216,506,969

       Cost of goods sold                       248,101,339       185,858,502

       Gross profit                              41,470,714        30,648,467

       Selling, general and administrative
        expenses                                  3,820,173         1,997,818


       Income from operations                    37,650,541        28,650,649

       Non-operating income (expenses)
            Interest expenses                      (121,522)         (125,201)
            Subsidy income                          540,403           100,792
            Other expense                          (199,115)          (63,519)
       Stock based compensation - make
        good provision                                   --        (9,838,354)

            Total non-operating income
             (expenses)                             219,766        (9,926,282)

       Net income                                37,870,307        18,724,367

       Other comprehensive item
            Foreign currency translation
             gain (Loss)                             64,508         3,017,271

       Comprehensive Income                     $37,934,815       $21,741,638

    Net Income                                   37,870,307        18,724,367
       Deemed dividend to preferred
        stockholders                                     --           863,014
       Net income available to common
        stockholders                             37,870,307        17,861,353

       Basic and diluted weighted average
        shares outstanding
       Basic                                     28,230,461        25,889,748
       Diluted                                   36,267,527        32,877,570

       Basic and diluted net earnings per
        share available to common
        stockholders
       Basic                                          $1.34             $0.69
       Diluted                                        $1.04             $0.54

------

China Integrated Energy Reports Record Fourth Quarter and 2009 Financial Results

-- Fourth quarter 2009 sales increase 57.9% to $93.3 million; net income $12.0 million represents an 84.3% increase over 2008 adjusted net income*, with EPS of $0.28
-- Fiscal Year 2009 sales increase 33.8% to $289.6 million; net income of $37.9 million, a 32.8% increase over 2008 adjusted net income*, with EPS of $1.04
-- Management to host earnings conference call on March 12, 2010 at 10:00 am ET

XI'AN, China, March 12 /PRNewswire-Asia-FirstCall/ -- China Integrated Energy, Inc. (Nasdaq: CBEH), a leading non-state-owned integrated energy company in China, today announced its financial results for the fourth quarter and fiscal year 2009.

    SUMMARY FINANCIALS

    Fourth Quarter 2009 Results
                                  Q4 2009        Q4 2008            CHANGE
    Sales                      $93.3 million  $59.1 million         +57.9%
    Gross Profit               $13.5 million   $7.5 million         +79.3%
    GAAP Net Income (Loss)     $12.0 million  ($3.3 million)           N/A
    Stock-based Compensation*            N/A   $9.8 million
    Adjusted Net Income*       $12.0 million   $6.5 million         +84.3%
    GAAP EPS                            $.28         ($0.13)           N/A
    Adjusted EPS (Fully
     Diluted)*                          $.28          $0.17         +64.7%



    Fiscal Year 2009 Results
                                  FY 2009        FY 2008            CHANGE
    Sales                     $289.6 million $216.5 million         +33.8%
    Gross Profit               $41.5 million  $30.6 million         +35.3%
    GAAP Net Income            $37.9 million  $18.7 million        +102.6%
    Stock-based Compensation*            N/A   $9.8 million
    Adjusted Net Income*       $37.9 million  $28.6 million         +32.8%
    GAAP EPS                           $1.04          $0.54         +94.4%
    Adjusted EPS (Fully
     Diluted)*                         $1.04          $0.84         +25.0%

    * Adjusted Net Income and EPS in Q4 2008 and Fiscal Year 2008 are non-GAAP
      calculations and do not include $9.8 million of non-cash, stock-based
      compensation charge related to the "Make Good" provision of an October
      2008 financing agreement. For more information about the non-GAAP
      financial measures contained in this press release, please see "About
      Non-GAAP Financial Measures" below.

Fourth Quarter 2009 Financial Results

Sales -- Sales for the fourth quarter of 2009 were $93.3 million compared to $59.1 million in the fourth quarter of 2008, representing an increase of 57.9%. The increase was mainly due to strong market demand for finished oil and heavy oil products and sales growth generated by the Company's retail gas stations. Revenue from our three business segments, Wholesale Distribution of Finished Oil and Heavy Oil Products, Production and Sales of Biodiesel, and Operations of Retail Gas Stations is reported as follows:

    Fourth Quarter 2009 Revenue Breakdown
                                   Q4 2009         Q4 2008           CHANGE
    Wholesales Distribution
     of Finished Oil and
     Heavy Oil                  $66.1 million   $36.7 million        +80.1%
      % of Sales                        70.8%           62.1%
    Production and Sale of
     Biodiesel                  $15.7 million   $14.9 million         +5.4%
     % of Sales                         16.8%           25.2%
    Operations of Retail
     Gas Stations               $11.5 million    $7.5 million        +53.3%
     % of Sales                         12.4%           12.7%
    Total Sales                 $93.3 million   $59.1 million        +57.9%

"Growth was exceptionally robust during the fourth quarter of 2009, enabling us to generate record results for 2009 and to surpass our previously issued guidance," stated Mr. Gao Xincheng, Chief Executive Officer of China Integrated Energy, Inc. "We increased sales in all business segments as we continued to expand our customer base and further penetrate existing markets as well as new market territories, while capitalizing on increased demand for our fuel products. During the quarter we increased distributed petroleum product sales by 80.1%, retail gas sales by about 53.3%, and biodiesel sales by more than 5.4% over the same period last year. Today, we service 14 provinces and municipalities through our extensive petroleum distribution network, operate 12 retail gas stations, and one of the largest biodiesel manufacturing facilities in China with 100,000 tons of annual production capacity. Based upon our expansion plans, which address each of our business segments, supported by favorable government policies and market conditions and crude oil prices as a result of China's economic recovery, we anticipate another year of strong growth in 2010."

Cost of Sales -- Cost of sales for the three months ended December 31, 2009 was approximately $79.8 million compared to $51.5 million in the same period of 2008, an increase of 54.9%, which was attributable to the increase in production and sales activities during the fourth quarter of 2009. Cost of sales as a percentage of sales was approximately 85.6% for the fourth quarter of 2009 and 87.3% for the same period in 2008.

Gross Profit and Gross Margin -- Gross profit was $13.5 million for the fourth quarter of 2009 compared to $7.5 million for the same period in 2008, an increase of 79.3% and representing gross margins of 14.4% and 12.7%, respectively. The increase in gross margin was attributable to favorable frequent pricing adjustments by the NDRC reflecting global oil pricing, an increase of higher margin heavy oil products and success in leveraging new suppliers, enhanced by operating efficiencies in retail gas stations and increased sales volumes. For the fourth quarter of 2009, the gross profit margin for production and sales of biodiesel was 31.2%, wholesale distribution of finished oil and heavy oil products was 10.6%, and retail gas station operations was 13.5%.

Operating Expenses -- Selling, general and administrative expenses for the fourth quarter of 2009 were approximately $1.7 million compared to $1.0 million for the same period in 2008 and remained stable at 1.8% of total sales for both periods.

Net Income -- For the quarter ended December 31, 2009, the Company reported net income of $12.0 million, or $.28 per diluted share, compared to a GAAP net loss of $3.3 million, or a loss of $0.13 per diluted share in the fourth quarter of 2008. Net loss for the fourth quarter of 2008 included a $9.8 million non-cash charge in stock-based compensation expenses related to the "Make Good" provision of the October 2008 financing agreement. Excluding that charge, fourth quarter 2008 adjusted net income was $6.5 million or $0.17 per diluted share. Diluted weighted average shares outstanding were 42.2 million and 32.8 million for the fourth quarter of 2009 and 2008, respectively.

Fiscal Year 2009 Financial Results

Sales -- Sales for 2009 were $289.6 million, an increase of 33.8% compared to $216.5 million in 2008. The increase was mainly attributable to growth in the Wholesale Distribution of Finished Oil and Heavy Oil Products and Operations of Retail Gas Station segments, achieved through continued expansion of sales channels and territories as well as increased penetration of existing markets. During 2009, the Company increased the number of customers in its wholesale distribution segment to over 1,180 from 936 in 2008, and the sales volume of wholesale distribution of finished oil and heavy oil products increased by 126,000 tons or 82.3% from 2008. Sales from the Company's retail gas station segment increased as a result of the addition of four fully operational gas stations and increased sales volume per gas station. Sales volume of biodiesel production in 2009 increased by 9,700 tons, or 14.0%, to 78,800 tons over 2008 and capacity utilization stood at 100.0%. Business segment results for the years 2009 and 2008 were as follows:

    Fiscal Year 2009 Revenue Breakdown
                                   FY 2009         FY 2008          CHANGE
    Wholesale Distribution
     of Finished Oil and
     Heavy Oil                 $195.9 million  $143.5 million       +36.5%
     % of Sales                         67.6%           66.3%
    Production and Sale of
     Biodiesel                  $55.8 million   $50.0 million       +11.5%
     % of Sales                         19.3%           23.1%
    Operations of Retail
     Gas Stations               $37.9 million   $23.0 million       +65.2%
     % of Sales                         13.1%           10.6%
    Total Sales                $289.6 million  $216.5 million       +33.8%

Cost of Sales -- Cost of sales for 2009 was $248.1 million compared to $185.9 million in 2008, an increase of $62.2 million, or 33.5%, which was in direct relation to increased production and sales activities during 2009.

Gross Profit and Gross Margin - Gross profit was $41.5 million for 2009 compared to $30.6 million for 2008, an increase of 35.3% and representing gross margins of approximately 14.3% and 14.2%, respectively. During 2009, the gross profit margin for production and sale of biodiesel was approximately 28.4% while gross profit margin for wholesale distribution of finished oil and heavy oil products, such as gasoline and diesel oil, was approximately 10.5%. The retail gas stations during this same period yielded gross margins of 13.5%, which improved due to operational improvements and increased sales volume per gas station.

Operating Expenses -- Selling, general and administrative expenses for 2009 were $3.8 million compared to $2.0 million for 2008, an increase of $1.8 million or 88.0%. Total operating expenses as a percentage of sales was 1.3% and 0.9% for 2009 and 2008, respectively. The increase in operating expenses was mainly attributable to approximately $1.0 million of legal, consulting fees, stock option expenses, and filing expenses in connection with the Company being public in the U.S. In addition, payroll and related expenses of sales and administrative staff increased by approximately $439,000 as a result of business growth and expansion of distribution channels and territories.

Net Income -- Net income for 2009 increased 102.6% to $37.9 million, or $1.04 per diluted share, compared to GAAP net income of $18.7 million, or $.54 per diluted share, in 2008. Excluding the $9.8 million one-time non-cash stock based compensation expense related to the make good provision in the 2008 financing agreement, 2008 adjusted net income was $28.6 million, or $0.84 per diluted share. Diluted weighted average shares outstanding were 36.3 million and 32.9 million for 2009 and 2008, respectively.

Liquidity and Capital Resources

Cash and cash equivalents were $62.4 million on December 31, 2009, compared to $23.1 million on December 31, 2008. 2009 cash and cash equivalents included proceeds from a financing agreement in October 2008 and net proceeds from a public offering completed in November 2009. The Company had working capital of $121.2 million on December 31, 2009 and a current ratio of 12.9 to 1. Inventories were $20.9 million and the accounts receivable balance was $3.1 million on December 31, 2009, compared to $22.3 and $8.2 million on December 31, 2008, respectively. The annualized days sales outstanding for the fiscal year 2009 were 4 days. Net cash provided by operations was $4.4 million in 2009, compared to $8.5 million in 2008.

Financial Outlook for 2010

Management expects fiscal year 2010 revenues of $382 million and net income of $48 million, representing an increase of 32.8% and 26.3% compared to 2009 revenue and net income, respectively. Guidance includes an additional 50,000 tons of annual biodiesel manufacturing capacity expected to come online during the third quarter of 2010 and the lease of 3 additional retail gas stations. Management reserves the right to revise guidance in the future.

Business Outlook for 2010

Our management believes that China Integrated Energy is well positioned to serve China's growing demand for fuels used in transportation, heating and industrial production. In addition to its expanding biodiesel manufacturing capacity and retail gas station business, China Integrated Energy's wholesale distribution business benefits from its geographic location, which includes valuable railway access, an extensive distribution network and a diversified, established base of customers and suppliers. The company is focused on growing all of its business segments, both organically and through complementary acquisitions, while further diversifying its supplier base for finished oil and heavy oil products.

In November 2009, China Integrated Energy began construction of a new biodiesel production facility in Tongchuan City, Shaanxi Province. The new production facility, adjacent to the existing production base, is expected to add 50,000 tons in annual production capacity, bringing total output to 150,000 tons. Management expects to bring this facility online during the third quarter of 2010 and anticipates $15 million in capital expenditures to accomplish this goal.

In January 2010, China Integrated Energy signed a contract with an existing wholesale distribution customer to deliver an estimated 160,000 tons of petroleum products in 2010, an increase of 62,000 tons over sales to this customer in 2009. The newly signed contract is expected to generate an additional $52 million in revenue from this customer in 2010. The company plans to increase volume with existing customers while adding new ones across the provinces it services, which include a collective population of approximately 640 million people.

The Company plans to add additional retail gas stations through acquisition or lease, which should benefit its overall distribution profit margins. At the end of 2009, China Integrated Energy operated 10 retail gas stations, up from five at the end of 2008. Three of the newly added stations were acquired in December 2009, and are expected to add approximately $19.9 million in revenues for FY2010. In January 2010, the Company announced the acquisition of two additional gas stations, bringing the total number of operating gas stations in Shaanxi province to 12. These two additional stations are expected to add approximately $14.2 million in revenues for FY 2010.

"China Integrated Energy is the only vertically integrated biodiesel producer in China with a distribution license and one of only three companies in Shaanxi licensed to distribute both finished and heavy oil. With our proprietary biodiesel production capabilities, we are able to utilize multiple feedstock sources to effectively manage our input costs. In addition, we are capitalizing on a unique opportunity to leverage these assets with a growing retail fuel station business. Collectively, these represent strong competitive advantages and are the reason for our superior operating margins. We have momentum and will exploit our assets, working capital and operating strengths to successfully execute on our growth strategies," Mr. Gao concluded.

Conference Call Information

Interested parties may access the Company's conference call, scheduled for 10:00 a.m. EST on March 12, 2010, by dialing +1-888-549-7735 from within the United States, or +1-480-629-9858 if calling internationally. The conference ID is 4259230. It is advisable to dial in approximately 5-10 minutes prior to the start of the call. A replay will be available through March 19, 2010 and can be accessed by dialing +1-800-406-7325 (U.S.), +1-303-590-3030 (Int'l), passcode 4259230.

This call is being web cast by ViaVid Broadcasting and can be accessed at ViaVid's website at http://www.viavid.netor at the following link: http://viavid.net/dce.aspx?sid=00007211 . To access the web cast, you will need to have the Windows Media Player on your desktop. For the free download of the Media Player please visit: http://www.microsoft.com/windows/windowsmedia/en/download/default.asp .

About China Integrated Energy, Inc.

China Integrated Energy, Inc. is a leading non-state-owned integrated energy company in the PRC engaged in three business segments: the wholesale distribution of finished oil and heavy oil products, the production and sale of biodiesel, and the operation of retail gas stations. The Company's primary business segment is the wholesale distribution of finished oil and heavy oil products. The Company also operates a 100,000-ton biodiesel production plant and twelve retail gas stations in China.

Safe Harbor Statement

This press release includes statements that may constitute forward-looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. For example, statements about the future use of the proceeds are forward looking and subject to risks. China Integrated Energy, Inc. may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission on forms 10-K, 10-Q and 8-K, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about the Company's beliefs and expectations, are forward-looking statements. Forward- looking statements involve inherent risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Potential risks and uncertainties include, but are not limited to, risks outlined in the Company's filings with the U.S. Securities and Exchange Commission. The Company does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

About Non-GAAP Financial Measures

To supplement our consolidated financial statements, which statements are prepared and presented in accordance with GAAP, we use the following non-GAAP financial measures: non-GAAP net income, and non-GAAP EPS. The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. We use these non-GAAP financial measures for financial and operational decision making and as a means to evaluate period-to-period comparisons. Our management believes that these non-GAAP financial measures provide meaningful supplemental information regarding our performance and liquidity by excluding certain expenses and expenditures that may not be indicative of our "recurring core business operating results," meaning our operating performance excluding not only non-cash charges, such as stock-based compensation, but also discrete cash charges that are infrequent in nature. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting and analyzing future periods. These non-GAAP financial measures also facilitate management's internal comparisons to our historical performance and liquidity as well as comparisons to our competitors' operating results. We believe these non-GAAP financial measures are useful to investors both because (1) they allow for greater transparency with respect to key metrics used by management in its financial and operational decision making and (2) they are used by our institutional investors and the analyst community to help them analyze the health of our business.

    For more information, please contact:

    HC International, Inc.
     Ted Haberfield, Executive VP
     Tel:   +1-760-755-2716
     Email: thaberfield@hcinternational.net
     Web:   http://www.hcinternational.net

                           Financial Tables Follow


                CHINA INTEGRATED ENERGY, INC. AND SUBSIDIARIES
                         CONSOLIDATED BALANCE SHEETS

                                               December 31,       December 31,
                                                   2009               2008
      ASSETS

      CURRENT ASSETS
           Cash and cash equivalents            $62,415,443       $23,119,028
           Restricted cash                               --           919,351
           Accounts receivable                    3,099,587         8,164,320
           Other receivables and deposits         7,231,586         3,986,984
           Prepaid expenses                       3,145,502         1,884,102
           Advance to suppliers                  34,544,100        17,945,487
           Inventories, net                      20,954,851        22,268,903

              Total current assets              131,391,069        78,288,175

            Prepaid rents                        24,620,685         6,408,568
            Property and equipment, net           7,561,907         9,997,674

               Total noncurrent assets           32,182,592        16,406,242

      TOTAL ASSETS                             $163,573,661       $94,694,417

      LIABILITIES AND STOCKHOLDERS' EQUITY

      CURRENT LIABILITIES
           Advance from customers                $1,903,124        $4,580,462
           Taxes payable                          1,242,931           735,461
           Other payables                         2,700,988         3,232,088
           Loans payable                          4,395,025         2,247,197

               Total current liabilities         10,242,068        10,795,208

      TOTAL LIABILITIES                          10,242,068        10,795,208

      STOCKHOLDERS' EQUITY
           Preferred stock,  $.001 par
            value;  authorized shares
            10,000,000; issued and
            outstanding 3,115,753 and
            3,465,753 shares at December
            31, 2009 and December 31 2008,
            respectively                              3,115             3,465
           Common stock,  $.0001 par
            value; authorized shares
            79,000,000; issued and
            outstanding 33,269,091 and
            27,169,091 shares at December
            31, 2009 and December 31,
            2008, respectively                        3,326             2,716
           Additional paid in capital            75,858,994        44,434,250
           Statutory reserve                      4,920,114         4,920,114
           Accumulated other
            comprehensive income                  5,473,420         5,337,003
           Retained earnings                     67,072,624        29,201,661

               Total stockholders' equity       153,331,593        83,899,209

      TOTAL LIABILITIES AND STOCKHOLDERS'
       EQUITY                                  $163,573,661       $94,694,417



                CHINA INTEGRATED ENERGY, INC. AND SUBSIDIARIES
       CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME


       (Unaudited)                            For The Years Ended December 31,
                                                   2009              2008

       Sales                                   $289,572,053      $216,506,969

       Cost of goods sold                       248,101,339       185,858,502

       Gross profit                              41,470,714        30,648,467

       Selling, general and administrative
        expenses                                  3,820,173         1,997,818


       Income from operations                    37,650,541        28,650,649

       Non-operating income (expenses)
            Interest expenses                      (121,522)         (125,201)
            Subsidy income                          540,403           100,792
            Other expense                          (199,115)          (63,519)
       Stock based compensation - make
        good provision                                   --        (9,838,354)

            Total non-operating income
             (expenses)                             219,766        (9,926,282)

       Net income                                37,870,307        18,724,367

       Other comprehensive item
            Foreign currency translation
             gain (Loss)                             64,508         3,017,271

       Comprehensive Income                     $37,934,815       $21,741,638

    Net Income                                   37,870,307        18,724,367
       Deemed dividend to preferred
        stockholders                                     --           863,014
       Net income available to common
        stockholders                             37,870,307        17,861,353

       Basic and diluted weighted average
        shares outstanding
       Basic                                     28,230,461        25,889,748
       Diluted                                   36,267,527        32,877,570

       Basic and diluted net earnings per
        share available to common
        stockholders
       Basic                                          $1.34             $0.69
       Diluted                                        $1.04             $0.54

SOURCE China Integrated Energy, Inc.