LONGWEI PETROLEUM INVESTMENT HOLDING LTD

CIK:0001111817|SEC Filings

EARNINGS PER SHARE

3 Months Ended

Sep. 30, 2012

NOTE 12 – EARNINGS PER SHARE

FASB ASC Topic 260, “Earnings Per Share”, requires a reconciliation of the numerator and denominator of the basic and diluted earnings per share (EPS) computations.

The Company only has common stock and the following convertible instruments outstanding at September 30, 2012:

1. 814,643 Preferred Shares – convertible on a 1:1 basis for common shares

2. 11,542,252 October 2009 Financing Warrants – exercisable at $2.255 per share

3. 24,000 Common Shares – issuable to officers, directors and consultants under various agreements

Total number of potential additional dilutive common shares outstanding as of September 30, 2012 was 12,380,895 from outstanding convertible instruments.

Basic earnings per share is calculated by dividing net earnings available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share is based on the assumption that all dilutive convertible shares, stock options, warrants and other equity awards were converted or exercised during the period. Dilution is computed by applying the treasury stock method. Under this method, warrants and options are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. In periods where losses are reported, the weighted-average number of common stock outstanding excludes common stock equivalents, because their inclusion would be anti-dilutive.

The following table sets forth the computation of basic and dilutive net income per share:

	For the Three Months Ended
	September 30, 2012		September 30, 2011
Net income attributable to common stockholders*	$	17,758,275	$	17,836,126

Basic weighted average outstanding shares of common stock		100,961,162		100,752,129
Weighted number of dilutive shares		852,610		949,045
Diluted weighted average common stock and common stock equivalents		101,813,772		101,701,174

Earnings per share:
Basic	$	0.18	$	0.18
Dilutive* (September 30, 2011 – Restated)	$	0.17	$	0.15

*The diluted earnings per share calculation deducts the gain from the warrant derivative liability of $2,126,653 for the three months ended September 30, 2011 from the net income attributable to common stockholders in the numerator for the diluted earnings per share. The diluted earnings per share for the three month period ended September 30, 2011, as previously reported, were $0.18 per share. The diluted earnings per share for the period were recalculated to properly apply the adjustment for the gain from the warrant derivative liability and restated to reflect the adjusted net income attributable to common shareholders of $15,709,473 for the diluted earnings per share calculation.

Unaudited Condensed Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Cash Flows From Operating Activities:
Net Income	$ 17,773	$ 17,851
Adjustments to Reconcile Net Income to Net Cash Provided by (Used in) Operating Activities:
Depreciation and Amortization	557	515
Stock Based Compensation	17	17
Changes in Warrant Derivative Liability	575	(2,127)
(Increases) Decreases in Assets:
Accounts Receivable	3,095	(203)
Inventories	4,446	(13,935)
Advances to Suppliers	75	(6,149)
Increases (Decreases) in Liabilities:
Accounts Payable	(28)	25
Taxes Payable	74	(2,620)
Net Cash Provided By (Used in) Operating activities	26,584	(6,626)
Cash Flows From Investing Activities:
Purchase and Improvements to Land and Fixed Assets	(23,710)
Net Cash Provided By (Used in) Investing Activities	(23,710)
Cash Flows From Financing Activities:
Payment of Dividends	(15)	(15)
Net Cash Provided By (Used in) Financing Activities	(15)	(15)
Effect of Exchange Rate Changes in Cash	(24)	131
(Decrease) Increase in Cash	2,835	(6,510)
Cash, Beginning of Period	11,578	9,422
Cash, End of Period	14,413	2,912
Cash Paid During the Year for:
Income Taxes	5,585	6,956
Supplemental Schedule of Noncash Investing and Financing Activities:
Conversion of Preferred Stock into Common Stock
Deposits-Long Term Assets for Fixed Assets	$ 87,103

Condensed Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Jun. 30, 2012
Current Assets:
Cash	$ 14,413	$ 11,578
Accounts Receivable, Net of Allowance for Doubtful Accounts of $0 as of September 30, 2012 and June 30, 2012	30,775	33,935
Inventories	48,072	52,619
Advances to Suppliers	109,578	109,865
Total Current Assets	202,838	207,997
Property, Plant and Equipment, Net	132,937	47,202
Land Use Rights, Net	24,262
Deposit Paid for Long-Term Assets		87,103
Total Assets	360,037	342,302
Current Liabilities:
Accounts Payable	926	750
Warrant Derivative	895	320
Taxes Payable	7,558	7,687
Total Current Liabilities	9,379	8,757
Total Liabilities	9,379	8,757
Stockholders' Equity:
Preferred Stock, No Par Value; 100,000,000 Shares Authorized; 814,643 and 914,643 Issued and Outstanding as of September 30, 2012 and June 30, 2012	373	418
Common Stock, No Par Value; 500,000,000 Shares Authorized; 100,989,966 and 100,889,966 Issued and Outstanding as of September 30, 2012 and June 30, 2012	31,713	31,667
Additional Paid-in Capital	7,992	7,992
Retained Earnings	279,454	261,696
Other Comprehensive Income	31,126	31,772
Total Stockholders' Equity	350,658	333,545
Total Liabilities and Stockholders' Equity	$ 360,037	$ 342,302