BEIJING, August 21, 2012 /PRNewswire-Asia/ -- 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 second quarter of 2012 ended June 30, 2012.
Highlights
Mr. Xiaoan He, Chairman and CEO of the Company, said, "Fuwei Films has made significant progress in the construction of our third production line for thick films. As of July 2012, all of the equipment of Dornier has arrived at our factory and we have begun installation. If all goes as planned and we can obtain additional funding, we believe that by the end of October 2012, we may be able to complete installation and start trial operations of the line by the end of the 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."
Second quarter of 2012 Results
Revenues for the second quarter ended June 30, 2012 were RMB92.4 million (US$14.5 million), compared with RMB137.3 million in the same period of 2011, which was an decrease of RMB44.9 million, or 32.7% compared with the second 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 attributable to increased capacity in China and overseas.
Overseas sales during the second quarter ended June 30, 2012 were RMB20.1 million (US$3.2 million) or 21.8% of total revenues, compared with RMB43.1 million or 31.4% of total revenues in the same period of 2011. The decrease in overseas sales was mainly due to the significant decrease of overseas market demand and decrease in sales prices compared with the same period last year.
The following is a breakdown of domestic versus overseas sales for the three-month periods ended June 30, 2012 and 2011 (amounts in thousands):
Three-Month Period Ended | ||||||
June 30,2012 | % of Total | June 30,2011 | % of Total | |||
RMB | US$ | RMB | ||||
Sales in China | 72,279 | 11,377 | 78.2% | 94,189 | 68.6% | |
Sales in other countries | 20,145 | 3,171 | 21.8% | 43,127 | 31.4% | |
Total | 92,424 | 14,548 | 100.0% | 137,316 | 100.0% | |
Gross profit was RMB1.9 million (US$0.3 million) for the second quarter of 2012, compared with RMB22.5 million in the same period of 2011. Gross margin was 2.0%, compared with 16.4% in the second quarter of 2011. This was mainly due to the decrease in sales price largely exceeding those in raw material during the second quarter ended June 30, 2012 compared with the same period in 2011.
Operating expenses for the second quarter of 2012 was RMB12.1 million (US$1.9 million), compared with RMB12.2 million in the second quarter of 2011, which was comparable when compared to the same period in 2011.
Operating loss for the second quarter of 2012 was RMB10.3 million (US$1.6 million), compared with operating income of RMB10.3 million in the same period of 2011.
Net loss attributable to the Company for the second quarter of 2012 was RMB11.9 million (US$1.9 million), compared with net income attributable to the Company of RMB6.1 million in the second quarter of 2011.
Basic and diluted net loss per share was RMB0.91 (US$0.14), compared with basic and diluted earnings per share of RMB0.47 in the second quarter of 2011.
Total shareholders' equity was RMB546.6 million (US$86.0 million) as of June 30, 2012, compared with RMB573.7 million as of December 31, 2011.
As of June 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 Tuesday, August 21, 2012, at 9:00 a.m. EDT / 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 access codes: Account#: 286 and Conference ID: 398549. The replay will be available until September 21, 2012, at 11:59 p.m. EDT.
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's 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 both the possible delisting of the Company's ordinary shares from the NASDAQ Global Market; 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; 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 JUNE 30, 2012 AND DECEMBER 31, 2011 | |||||
(amounts in thousands except share and per share value) | |||||
(Unaudited) | |||||
June 30, 2012 | December 31, 2011 | ||||
RMB | US$ | RMB | |||
ASSETS | |||||
Current assets | |||||
Cash and cash equivalents | 40,925 | 6,442 | 44,172 | ||
Restricted cash | 40,033 | 6,301 | 102,212 | ||
Accounts and bills receivable, net | 23,184 | 3,649 | 52,457 | ||
Inventories | 41,830 | 6,584 | 41,774 | ||
Advance to suppliers | 6,510 | 1,025 | 8,808 | ||
Prepayments and other receivables | 19,994 | 3,147 | 31,172 | ||
Deferred tax assets - current | 1,253 | 197 | 1,309 | ||
Total current assets | 173,729 | 27,345 | 281,904 | ||
Plant, properties and equipment, net | 253,049 | 39,831 | 277,119 | ||
Construction in progress | 120,945 | 19,037 | 119,647 | ||
Lease prepayments, net | 19,785 | 3,114 | 20,047 | ||
Advance to suppliers - long term | 160,190 | 25,215 | 62,799 | ||
Goodwill | 10,276 | 1,618 | 10,276 | ||
Long-term deposit | 16,760 | 2,638 | 16,760 | ||
Deferred tax assets - non current | 1,552 | 244 | 1,622 | ||
Total assets | 756,286 | 119,042 | 790,174 | ||
LIABILITIES AND EQUITY | |||||
Current liabilities | |||||
Short-term borrowings | 120,000 | 18,889 | 168,501 | ||
Accounts payables | 21,204 | 3,338 | 19,317 | ||
Notes payable | 33,110 | 5,212 | - | ||
Advance from customers | 17,958 | 2,827 | 11,876 | ||
Accrued expenses and other payables | 6,417 | 1,010 | 5,798 | ||
Total current liabilities | 198,689 | 31,276 | 205,492 | ||
Long-term loan | 10,000 | 1,574 | 10,000 | ||
Deferred tax liabilities | 1,806 | 284 | 1,811 | ||
Total liabilities | 210,495 | 33,134 | 217,303 | ||
Equity | |||||
Shareholders' equity | |||||
Registered capital(of US$0.129752 par value; 20,000,000 shares authorized; 13,062,500 issued and outstanding) | 13,323 | 2,097 | 13,323 | ||
Additional paid-in capital | 311,907 | 49,096 | 311,907 | ||
Statutory reserve | 37,441 | 5,893 | 37,441 | ||
Retained earnings | 182,724 | 28,762 | 209,768 | ||
Cumulative translation adjustment | 1,204 | 187 | 1,230 | ||
Total shareholders' equity | 546,599 | 86,035 | 573,669 | ||
Non-controlling interest | (808) | (127) | (798) | ||
Total equity | 545,791 | 85,908 | 572,871 | ||
Total liabilities and equity | 756,286 | 119,042 | 790,174 | ||
FUWEI FILMS (HOLDINGS) CO., LTD. AND SUBSIDIARIES | ||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ||||||||||
FOR THE THREE- AND SIX-MONTH PERIODS ENDED JUNE 30, 2012 AND 2011 | ||||||||||
(amounts in thousands except share and per share value) | ||||||||||
(Unaudited) | ||||||||||
The Three-Month Period Ended June 30, | The Six-Month Period Ended June 30, | |||||||||
2012 | 2011 | 2012 | 2011 | |||||||
RMB | US$ | RMB | RMB | US$ | RMB | |||||
Net sales | 92,424 | 14,548 | 137,316 | 183,435 | 28,874 | 311,470 | ||||
Cost of sales | 90,543 | 14,252 | 114,789 | 184,580 | 29,054 | 243,807 | ||||
Gross margin | 1,881 | 296 | 22,527 | (1,145) | (180) | 67,663 | ||||
Operating expenses | ||||||||||
Selling expenses | 4,678 | 736 | 4,945 | 8,764 | 1,380 | 9,039 | ||||
Administrative expenses | 7,469 | 1,176 | 7,242 | 13,817 | 2,175 | 18,878 | ||||
Total operating expenses | 12,147 | 1,912 | 12,187 | 22,581 | 3,555 | 27,917 | ||||
Operating (loss) income | (10,266) | (1,616) | 10,340 | (23,726) | (3,735) | 39,746 | ||||
Other income (expense) | ||||||||||
- Interest income | 1,851 | 291 | 525 | 2,509 | 395 | 1,076 | ||||
- Interest expense | (3,332) | (524) | (2,427) | (6,057) | (953) | (4,727) | ||||
- Others income (expense), net | (78) | (12) | (132) | 349 | 55 | (236) | ||||
Total other expense | (1,559) | (245) | (2,034) | (3,199) | (503) | (3,887) | ||||
(Loss) income before provision for income taxes | (11,825) | (1,861) | 8,306 | (26,925) | (4,238) | 35,859 | ||||
Provision for income taxes | (90) | (14) | (2,191) | (121) | (19) | (6,104) | ||||
Net (loss) income | (11,915) | (1,875) | 6,115 | (27,046) | (4,257) | 29,756 | ||||
Net (loss) income attributable to noncontrolling interests | 1 | 0 | (5) | (2) | 0 | (9) | ||||
Net (loss) income attributable to the Company | (11,916) | (1,875) | 6,120 | (27,044) | (4,257) | 29,764 | ||||
Other comprehensive income | ||||||||||
- Foreign currency translation adjustments attributable to noncontrolling interest | (8) | (1) | 12 | (8) | (1) | 17 | ||||
- Foreign currency translation adjustments attributable to the Company | (18) | (3) | 18 | (26) | (4) | 6 | ||||
Comprehensive income (loss) attributable to non-controlling interest | (7) | (1) | 7 | (10) | (1) | 8 | ||||
Comprehensive (loss) income attribute to the Company | (11,934) | (1,878) | 6,138 | (27,070) | (4,261) | 29,770 | ||||
(Loss) earnings per share, Basic and diluted | (0.91) | (0.14) | 0.47 | (2.07) | (0.33) | 2.28 | ||||
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 SIX-MONTH PERIODS ENDED JUNE 30, 2012 AND 2011 | ||||||||
(amounts in thousands except share and per share value) | ||||||||
(Unaudited) | ||||||||
The Six-Month Period Ended June 30, | ||||||||
2012 | 2011 | |||||||
RMB | US$ | RMB | ||||||
Cash flow from operating activities | ||||||||
Net (loss) income | (27,046) | (4,257) | 29,756 | |||||
Adjustments to reconcile net income to net cash | ||||||||
(used in)provided by operating activities | ||||||||
- Gain on disposal of property, plant and equipment | (35) | (6) | - | |||||
- Depreciation of property, plant and equipment | 24,346 | 3,832 | 18,868 | |||||
- Amortization of intangible assets | 227 | 36 | 227 | |||||
- Deferred income taxes | 121 | 19 | 664 | |||||
- Bad debt (recovery) expense | (375) | (59) | (5,638) | |||||
Changes in operating assets and liabilities | ||||||||
- Accounts and bills receivable | 29,840 | 4,697 | (9,130) | |||||
- Inventories | (56) | (9) | 9,360 | |||||
- Advance to suppliers | 2,298 | 362 | 5,605 | |||||
- Prepaid expenses and other current assets | 28,976 | 4,561 | (23,184) | |||||
- Accounts payable | 1,986 | 313 | 4,032 | |||||
- Accrued expenses and other payables | 328 | 52 | (8,153) | |||||
- Note payable | 33,110 | 5,212 | - | |||||
- Advance from customers | 6,083 | 958 | (27,983) | |||||
- Tax payable | (17,715) | (2,788) | (3,816) | |||||
Net cash provided by (used in) operating activities | 82,088 | 12,923 | (9,392) | |||||
Cash flow from investing activities | ||||||||
Purchases of property, plant and equipment | (556) | (88) | (33,556) | |||||
Restricted cash related to trade finance | 62,180 | 9,788 | (87,383) | |||||
Advanced to suppliers - non current | (97,391) | (15,330) | (1,329) | |||||
Amount change in construction in progress | (1,298) | (204) | 27,495 | |||||
Proceeds from sale of property, plant and equipment | 250 | 39 | - | |||||
Net cash used in investing activities | (36,815) | (5,795) | (94,773) | |||||
Cash flow from financing activities | ||||||||
Principal payments of short-term bank loans | (168,501) | (26,523) | (7,000) | |||||
Proceeds from short-term bank loans | 120,000 | 18,889 | 18,501 | |||||
Net cash (used in) provided by financing activities | (48,501) | (7,634) | 11,501 | |||||
Effect of foreign exchange rate changes | (19) | (70) | (116) | |||||
Net increase in cash and cash equivalent | (3,247) | (576) | (92,780) | |||||
Cash and cash equivalent | ||||||||
At beginning of period | 44,172 | 7,018 | 171,227 | |||||
At end of period | 40,925 | 6,442 | 78,446 | |||||
SUPPLEMENTARY DISCLOSURE: | ||||||||
Interest paid | 6,057 | 953 | 4,727 | |||||
Income tax paid | - | - | 8,456 | |||||
During the period ended June 30, 2012, the Company acquired equipment by incurring accounts payable in the amount of: | 1,711 | 269 | - | |||||
