BEIJING, November 28, 2012 /PRNewswire-FirstCall/ -- Fuwei Films (Holdings) Co., Ltd. (Nasdaq: FFHL) ("Fuwei Films" or the "Company"), a manufacturer and distributor of high-quality BOPET plastic films in China, today announced its unaudited financial results for the third quarter of 2012 ended September 30, 2012.
Highlights
Mr. Xiaoan He, Chairman and CEO of the Company, said, "We have made significant progress in the construction of our third production line for thick films despite the current market condition. If all goes as planned, we expect to start trial operations of the line by the end of the year or early next year. We have started the R&D for our thick films to be manufactured by this production line including high performance electric insulation film, base film for solar backsheet and TFT-LCD optical films. In addition, we have started marketing these products and contacting target clients."
Third quarter of 2012 Results
Revenues for the third quarter ended September 30, 2012 were RMB88.8 million (US$14.1 million), compared with RMB117.0 million in the same period of 2011, which was a decrease of RMB28.2 million, or 24.1% compared with the third quarter of 2011. The decrease in sales was mainly due to the significant decrease in sales prices compared to the same period in 2011 arising from stronger competition attributing to increased capacity in China and overseas.
Overseas sales during the third quarter ended September 30, 2012 were RMB19.5 million (US$3.1 million,) or 22.0% of total revenues, compared with RMB22.4 million or 19.2% of total revenues in the same period of 2011. The decrease in overseas sales was mainly due to the decrease in sales prices compared with the same period last year. With respect to the percentage of total sales, overseas sales increased due to increased marketing efforts.
The following is a breakdown of domestic versus overseas sales for the three-month periods ended September 30, 2012 and 2011 (amounts in thousands):
Three-Month Period Ended | ||||||
September 30, 2012 | % of Total | September 30, 2011 | % of Total | |||
RMB | US$ | RMB | ||||
Sales in China | 69,240 | 11,017 | 78.0% | 94,533 | 80.8% | |
Sales in other countries | 19,521 | 3,106 | 22.0% | 22,430 | 19.2% | |
Total | 88,761 | 14,123 | 100.0% | 116,963 | 100.0% | |
Gross profit was RMB0.9 million (US$0.1 million) for the third quarter of 2012, compared with RMB10.4 million in the same period of 2011. Gross margin was 1.0%, compared with 8.9% in the third quarter of 2011. This was mainly due to the decrease in sales price exceeding those in raw material during the third quarter ended September 30, 2012 compared with the same period in 2011.
Operating expenses for the three months ended September 30, 2012 was RMB13.4 million (US$2.1 million), compared with RMB14.0 million in the third quarter of 2011, which was RMB0.6 million, or 4.3% lower than the same period in 2011.
Operating loss for the third quarter of 2012 was RMB12.5 million (US$2.0 million), compared with operating loss of RMB3.7 million in the same period of 2011.
Net loss attributable to the Company for the third quarter of 2012 was RMB14.9 million (US$2.4 million), compared with net loss attributable to the Company of RMB4.9 million in the third quarter of 2011.
Basic and diluted net loss per share was RMB1.14 (US$0.18), compared with basic and diluted net loss per share of RMB0.38 in the third quarter of 2011.
Total shareholders' equity was RMB531.8 million (US$84.6 million) as of September 30, 2012, compared with RMB573.7 million as of December 31, 2011.
As of September 30, 2012, the Company had 13,062,500 basic and diluted total ordinary shares outstanding.
Conference Call Information
The Company will host a teleconference on Wednesday, November 28, 2012, at 8:00 a.m. EST / 9:00 p.m. Beijing time to discuss the financial results. To participate in the call, please dial +1-877-407-9205 in North America, or +1-201-689-8054 internationally, approximately 10 minutes prior to the scheduled start time.
A replay of the call can also be accessed via telephone by calling +1-877-660-6853 in North America, or +1-201-612-7415 internationally, and entering the following Conference ID: 404179. The replay will be available until December 28, 2012, at 11:59 p.m. EST.
About Fuwei Films
Fuwei Films conducts its business through its wholly owned subsidiary, Fuwei Films (Shandong) Co., Ltd. ("Shandong Fuwei"). Shandong Fuwei develops, manufactures and distributes high-quality plastic films using the biaxial oriented stretch technique, otherwise known as BOPET film (biaxially oriented polyethylene terephthalate). Fuwei Films' BOPET film is widely used to package food, medicine, cosmetics, tobacco, and alcohol, as well as in the imaging, electronics, and magnetic products industries.
Safe Harbor
This press release contains information that constitutes forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and are subject to risks. Risk factors that could contribute to such differences include those matters more fully disclosed in the Company's reports filed with the U.S. Securities and Exchange Commission which, among other things, include competition in the BOPET film industry; growth of, and risks inherent in, the BOPET film industry in China; uncertainty as to future profitability and our ability to obtain adequate financing for our planned capital expenditure requirements; uncertainty as to our ability to continuously develop new BOPET film products and keep up with changes in BOPET film technology; risks associated with possible defects and errors in our products including complaints and claims from clients; uncertainty as to our ability to protect and enforce our intellectual property rights; uncertainty as to our ability to attract and retain qualified executives and personnel; and uncertainty in acquiring raw materials on time and on acceptable terms, particularly in view of the volatility in the prices of petroleum products in recent years. The forward-looking information provided herein represents the Company's estimates as of the date of the press release, and subsequent events and developments may cause the Company's estimates to change. The Company specifically disclaims any obligation to update the forward-looking information in the future. Therefore, this forward-looking information should not be relied upon as representing the Company's estimates of its future financial performance as of any date subsequent to the date of this press release. Actual results of our operations may differ materially from information contained in the forward-looking statements as a result of the risk factors.
For more information, please contact:
In China:
Miss Lysander Lee
Investor Relations Officer
Phone: +86 133 615 59266
Email: fuweiIR@fuweifilms.com
In the U.S.:
Ms Leslie Wolf-Creutzfeldt
Investor Relations
Grayling
Phone: +1-646-284-9472
Email: leslie.wolf-creutzfeldt@grayling.com
Financial Tables to Follow
FUWEI FILMS (HOLDINGS) CO., LTD. AND SUBSIDIARIES | |||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||
AS OF SEPTEMBER 30, 2012 AND DECEMBER 31, 2011 | |||||
(amounts in thousands except share and per share value) | |||||
(Unaudited) | |||||
September 30, 2012 | December 31, 2011 | ||||
RMB | US$ | RMB | |||
ASSETS | |||||
Current assets | |||||
Cash and cash equivalents | 15,767 | 2,509 | 44,172 | ||
Restricted cash | 49,168 | 7,823 | 102,212 | ||
Accounts and bills receivable, net | 17,859 | 2,842 | 52,457 | ||
Inventories | 39,911 | 6,350 | 41,774 | ||
Advance to suppliers | 17,994 | 2,863 | 8,808 | ||
Prepayments and other receivables | 22,423 | 3,568 | 31,172 | ||
Deferred tax assets - current | 1,274 | 203 | 1,309 | ||
Total current assets | 164,396 | 26,158 | 281,904 | ||
Plant, properties and equipment, net | 245,772 | 39,106 | 277,119 | ||
Construction in progress | 277,320 | 44,126 | 119,647 | ||
Lease prepayments, net | 19,654 | 3,127 | 20,047 | ||
Advance to suppliers - long term | 37,542 | 5,973 | 62,799 | ||
Goodwill | 10,276 | 1,635 | 10,276 | ||
Long-term deposit | 16,760 | 2,667 | 16,760 | ||
Deferred tax assets - non current | 1,516 | 241 | 1,622 | ||
Total assets | 773,236 | 123,033 | 790,174 | ||
LIABILITIES AND EQUITY | |||||
Current liabilities | |||||
Short-term borrowings | 120,000 | 19,094 | 168,501 | ||
Accounts payables | 22,427 | 3,568 | 19,317 | ||
Notes payable | 62,459 | 9,938 | - | ||
Advance from customers | 18,884 | 3,005 | 11,876 | ||
Accrued expenses and other payables | 6,717 | 1,069 | 5,798 | ||
Total current liabilities | 230,487 | 36,674 | 205,492 | ||
Long-term loan | 10,000 | 1,591 | 10,000 | ||
Deferred tax liabilities | 1,803 | 287 | 1,811 | ||
Total liabilities | 242,290 | 38,552 | 217,303 | ||
Commitments and contingencies | |||||
Equity | |||||
Shareholders' equity | |||||
Registered capital (of US$0.129752 par value; 20,000,000 shares authorized; 13,062,500 issued and outstanding) | 13,323 | 2,120 | 13,323 | ||
Additional paid-in capital | 311,907 | 49,629 | 311,907 | ||
Statutory reserve | 37,441 | 5,957 | 37,441 | ||
Retained earnings | 167,868 | 26,710 | 209,768 | ||
Cumulative translation adjustment | 1,213 | 193 | 1,230 | ||
Total shareholders' equity | 531,752 | 84,609 | 573,669 | ||
Non-controlling interest | (806) | (128) | (798) | ||
Total equity | 530,946 | 84,481 | 572,871 | ||
Total liabilities and equity | 773,236 | 123,033 | 790,174 | ||
FUWEI FILMS (HOLDINGS) CO., LTD. AND SUBSIDIARIES | ||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ||||||||||
FOR THE THREE- AND NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2012 AND 2011 | ||||||||||
(amounts in thousands except share and per share value) | ||||||||||
(Unaudited) | ||||||||||
The Three-Month Period Ended September 30, | The Nine-Month Period Ended September 30, | |||||||||
2012 | 2011 | 2012 | 2011 | |||||||
RMB | US$ | RMB | RMB | US$ | RMB | |||||
Net sales | 88,761 | 14,123 | 116,963 | 272,196 | 43,310 | 428,433 | ||||
Cost of sales | 87,895 | 13,985 | 106,596 | 272,475 | 43,355 | 350,403 | ||||
Gross margin | 866 | 138 | 10,367 | (279) | (45) | 78,030 | ||||
Operating expenses | ||||||||||
Selling expenses | 4,561 | 726 | 5,097 | 13,325 | 2,120 | 14,136 | ||||
Administrative expenses | 8,801 | 1,400 | 8,946 | 22,618 | 3,599 | 27,824 | ||||
Total operating expenses | 13,362 | 2,126 | 14,043 | 35,943 | 5,719 | 41,960 | ||||
Operating (loss) income | (12,496) | (1,988) | (3,676) | (36,222) | (5,764) | 36,070 | ||||
Other income (expense) | ||||||||||
- Interest income | 83 | 13 | 358 | 2,592 | 412 | 1,435 | ||||
- Interest (expense) | (2,564) | (408) | (2,736) | (8,621) | (1,372) | (7,462) | ||||
- Other income (expense), net | 126 | 20 | 543 | 475 | 76 | 307 | ||||
Total other income (expense) | (2,355) | (375) | (1,835) | (5,554) | (884) | (5,720) | ||||
(Loss)/income before provision for income taxes | (14,851) | (2,363) | (5,511) | (41,776) | (6,648) | 30,350 | ||||
Provision for income tax (expense)/benefit | (12) | (2) | 597 | (133) | (21) | (5,507) | ||||
Net (loss) income | (14,863) | (2,365) | (4,914) | (41,909) | (6,669) | 24,843 | ||||
Net (loss) income attributable to | (7) | (1) | (12) | (9) | (1) | (21) | ||||
Net income (loss) attributable to | (14,856) | (2,364) | (4,902) | (41,900) | (6,668) | 24,864 | ||||
Other comprehensive income | ||||||||||
- Foreign currency translation adjustments attributable to non-controlling interest | 9 | 1 | 27 | 1 | 0 | 44 | ||||
- Foreign currency translation adjustments attributable to the Company | 9 | 1 | 30 | (17) | (3) | 35 | ||||
Comprehensive income (loss) attributable to non-controlling interest | 2 | 0 | 15 | (8) | (1) | 23 | ||||
Comprehensive (loss) income attribute to the Company | (14,847) | (2,363) | (4,872) | (41,917) | (6,671) | 24,899 | ||||
Earnings (loss) per share, Basic and diluted | (1.14) | (0.18) | (0.38) | (3.21) | (0.51) | 1.90 | ||||
Weighted average number ordinary shares, Basic and diluted | 13,062,500 | 13,062,500 | 13,062,500 | 13,062,500 | 13,062,500 | 13,062,500 | ||||
FUWEI FILMS (HOLDINGS) CO., LTD. AND SUBSIDIARIES | |||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||
FOR THE NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2012 AND 2011 | |||||
(amounts in thousands except share and per share value) | |||||
(Unaudited) | |||||
The Nine-Month Period Ended September 30, | |||||
2012 | 2011 | ||||
RMB | US$ | RMB | |||
Cash flow from operating activities | |||||
Net (loss) income | (41,909) | (6,668) | 24,843 | ||
Adjustments to reconcile net income to net cash | |||||
(used in)provided by operating activities | |||||
- Loss/(gain) on disposal of property, plant and equipment | (35) | (6) | - | ||
- Depreciation of property, plant and equipment | 36,537 | 5,814 | 31,013 | ||
- Amortization of intangible assets | 340 | 54 | 340 | ||
- Deferred income taxes | 133 | 21 | 726 | ||
- Bad debt (recovery) expense | (236) | (38) | (5,690) | ||
Changes in operating assets and liabilities | |||||
- Accounts and bills receivable | 35,040 | 5,575 | (16,983) | ||
- Inventories | 1,863 | 296 | 4,853 | ||
- Advance to suppliers | (9,186) | (1,462) | 4,161 | ||
- Prepaid expenses and other current assets | 28,216 | 4,490 | 5,372 | ||
- Accounts payable | 3,210 | 511 | 525 | ||
- Accrued expenses and other payables | 653 | 115 | (7,348) | ||
- Note payable | 62,459 | 9,938 | |||
- Advance from customers | 7,009 | 1,115 | (18,816) | ||
- Tax payable | (19,399) | (3,087) | (5,911) | ||
Net cash provided by operating activities | 104,695 | 16,668 | 17,085 | ||
Cash flow from investing activities | |||||
Purchases of property, plant and equipment | (5,452) | (867) | (33,629) | ||
Restricted cash related to trade finance | 53,043 | 8,440 | (98,134) | ||
Advanced to suppliers - non current | 25,257 | 4,019 | (1,993) | ||
Amount change in construction in progress | (157,673) | (25,088) | 20,470 | ||
Proceeds from sale of property, plant and equipment | 250 | 40 | - | ||
Net cash used in investing activities | (84,575) | (13,456) | (113,286) | ||
Cash flow from financing activities | |||||
Principal payments of short-term bank loans | (168,501) | (26,811) | (7,000) | ||
Proceeds from short-term bank loans | 120,000 | 19,094 | 18,501 | ||
Net cash (used in) provided by financing activities | (48,501) | (7,717) | 11,501 | ||
Effect of foreign exchange rate changes | (24) | (4) | (173) | ||
Net decrease in cash and cash equivalent | (28,405) | (4,509) | (84,873) | ||
Cash and cash equivalent | |||||
At beginning of period/year | 44,172 | 7,018 | 171,227 | ||
At end of period/year | 15,767 | 2,509 | 86,354 | ||
SUPPLEMENTARY DISCLOSURE: | |||||
Interest paid | 8,621 | 1,372 | 7,462 | ||
Income tax paid | - | - | 9,654 | ||
SUPPLEMENTARY SCHEDULE OF NONCASH INVESTING AND FINANCIAL ACTIVITIES: | |||||
During the period ended September 30, 2012, the Company acquired equipment by incurring accounts payable in the | 3,834 | 610 | - | ||
