BEIJING, August 21, 2015 /PRNewswire/ -- 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 ended June 30, 2015.
Second Quarter 2015 Financial Highlights
Mr. Zengyong Wang, Chairman and CEO of Fuwei Films, commented, "We continue to face strong competition from emerging and incumbent players which has created oversupply relative to demand in the marketplace. While this has impacted the Company's quarterly financial results, we intend to capitalize upon opportunities in international markets. We believe that our focus on continued innovation and R&D will enable the Company to expand end-user applications and we are encouraged by this positive trend as we expect this to enable us to weather different industry and economic conditions in the periods ahead."
Second Quarter of 2015 Financial Results
Net sales during the second quarter ended June 30, 2015 were RMB66.7 million or US$10.8 million, compared to RMB70.0 million during the same period in 2014, representing a decrease of RMB3.3 million or 4.7%, mainly due to the reduction of average sales price by 7.2% arising from stronger competition in China and a 13.9% reduction in prices of main raw materials. The reduction of average sales price caused a decrease of RMB5.2 million and the sales volume increase caused an increase of RMB1.9 million.
In the second quarter of 2015, sales of specialty films were RMB21.3 million or US$3.4 million representing 31.9% of our total revenues as compared to RMB16.6 million or 23.7% in the same period of 2014, which was an increase of RMB4.7 million, or 28.3% as compared to the same period in 2014. The reduction of average sales price caused a decrease of RMB1.5 million and the increase in the sales volume caused an increase of RMB6.2 million. The increase was largely attributable to the increase in sales volume.
Overseas sales were RMB15.1 million or US$2.4 million, or 22.7% of total revenues, compared with RMB1.1 million or 15.9% of total revenues in the second quarter of 2014. The decrease of average sales price caused a decrease of RMB2.1 million and the increase in sales volume resulted in an increase of RMB6.1 million. The increase in overseas sales was mainly due to the increase in sales volume.
The following is a breakdown of PRC domestic and overseas sales (amounts in thousands):
Three-Month |
% of Total |
Three-Month |
||||
RMB |
US$ |
RMB |
% of Total |
|||
Sales in China |
51,589 |
8,321 |
77.3% |
58,873 |
84.1% |
|
Sales in other countries |
15,120 |
2,439 |
22.7% |
11,111 |
15.9% |
|
66,709 |
10,760 |
100.0% |
69,984 |
100.0% |
||
Our gross profit was RMB0.3 million or US$0.04 million for the second quarter ended June 30, 2015, representing a gross margin of 0.4%, as compared to a gross loss margin of 13.6% for the same period in 2014. Correspondingly, gross margin increased by 14 percentage point compared to the same period in 2014. Our average product sales prices decreased by 7.2% compared to the same period last year while the average cost of goods sold decreased by 18.6% compared to the same period last year. Consequently, the amount of decrease in cost of goods sold was larger than that in sales revenue during the second quarter ended June 30, 2015 compared with the same period in 2014, which resulted in an increase in our gross profit.
Operating expenses for the second quarter ended June 30, 2015 were RMB13.0 million or US$2.1 million, as compared to RMB10.4 million for the same period in 2014, which was RMB2.6 million, or 25.0% higher than the same period in 2014. This increase was mainly due to depreciation charged to general and administrative expenses in the accounting period in which they are incurred as a result of lack of manufacturing from the third production line in May and June of2015.
Net loss attributable to the Company during the second quarter ended June 30, 2015 was RMB14.7 million or US$2.4 million compared to net loss attributable to the Company of RMB23.0 million during the same period in 2014, representing a decrease of RMB8.3 million for the same period in 2014.
Basic and diluted net loss per share was RMB1.12 or US$0.18 and RMB1.76 for the three months period ended June 30, 2015 and 2014, respectively.
Total shareholders' equity was RMB359.2 million or US$57.9 million as of June 30, 2015, compared with RMB388.9 million as of December 31, 2014.
As of June 30, 2015, the Company had 13,062,500 basic and diluted total ordinary shares outstanding.
Conference Call Information
The Company will host a teleconference on Friday, August 21, 2015, 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: 13617384. The replay will be available until September 21, 2015, at 11:59 p.m. EDT.
About Fuwei Films
Fuwei Films conducts its business through its wholly owned subsidiary, Fuwei Films (Shandong) Co., Ltd. ("Fuwei Shandong"). Fuwei Shandong develops, manufactures and distributes high-quality plastic films using the biaxial oriented stretch technique, otherwise known as BOPET film (biaxially oriented polyethylene terephthalate). Fuwei'sBOPET 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 trends affecting the global economy, including the devaluation of the RMB by China in August 2015; 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:
Ms. Xiaoli Yu
Investor Relations Officer
Phone: +86-133-615-59266
Email: fuweiIR@fuweifilms.com
In the U.S.:
Ms. Vivian Chen
Investor Relations
Grayling
Phone: +1-646-284-9427
Email: vivian.chen@grayling.com
Financial Tables to Follow
FUWEI FILMS (HOLDINGS) CO., LTD. AND SUBSIDIARIES |
|||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
|||||
AS OF JUNE 30, 2015 AND DECEMBER 31, 2014 |
|||||
(amounts in thousands except share and per share value) |
|||||
(Unaudited) |
|||||
June 30, 2015 |
December 31, 2014 |
||||
RMB |
US$ |
RMB |
|||
ASSETS |
|||||
Current assets |
|||||
Cash and cash equivalents |
10,871 |
1,753 |
9,020 |
||
Restricted cash |
42,220 |
6,810 |
48,085 |
||
Accounts and bills receivable, net |
16,229 |
2,618 |
9,867 |
||
Inventories |
28,244 |
4,555 |
24,034 |
||
Advance to suppliers |
5,160 |
832 |
7,512 |
||
Prepayments and other receivables |
20,706 |
3,340 |
18,772 |
||
Deferred tax assets - current |
1,802 |
291 |
2,794 |
||
Total current assets |
125,232 |
20,199 |
120,084 |
||
Property, plant and equipment, net |
459,549 |
74,121 |
482,534 |
||
Construction in progress |
1,096 |
177 |
366 |
||
Lease prepayments, net |
18,144 |
2,926 |
18,406 |
||
Advance to suppliers - long term, net |
1,272 |
205 |
722 |
||
Long-term deposit |
- |
- |
16,760 |
||
Other Assets |
12,054 |
1,944 |
12,500 |
||
Deferred tax assets - non current |
21,414 |
3,454 |
21,573 |
||
Total assets |
638,761 |
103,026 |
672,945 |
||
LIABILITIES AND EQUITY |
|||||
Current liabilities |
|||||
Long-term loan, current portion |
3,350 |
540 |
3,350 |
||
Due to related parties |
139,734 |
22,538 |
125,938 |
||
Accounts payables |
27,046 |
4,362 |
29,484 |
||
Notes payable |
81,626 |
13,165 |
95,539 |
||
Advance from customers |
6,236 |
1,006 |
3,392 |
||
Accrued expenses and other payables |
7,467 |
1,204 |
6,095 |
||
Obligations under capital leases-current |
4,196 |
677 |
8,259 |
||
Total current liabilities |
269,655 |
43,492 |
272,057 |
||
Obligations under capital leases |
- |
- |
303 |
||
Long-term loan |
4,975 |
802 |
6,650 |
||
Deferred tax liabilities |
5,709 |
921 |
5,816 |
||
Total liabilities |
280,339 |
45,215 |
284,826 |
||
Equity |
|||||
Shareholders' equity |
|||||
Registered capital(of US$0.129752 par value; |
13,323 |
2,149 |
13,323 |
||
Additional paid-in capital |
311,907 |
50,308 |
311,907 |
||
Statutory reserve |
37,441 |
6,039 |
37,441 |
||
(Accumulated deficit) retained earnings |
(4,605) |
(743) |
25,043 |
||
Cumulative translation adjustment |
1,150 |
186 |
1,199 |
||
Total shareholders' equity |
359,216 |
57,939 |
388,913 |
||
Non-controlling interest |
(794) |
(128) |
(794) |
||
Total equity |
358,422 |
57,811 |
388,119 |
||
Total liabilities and equity |
638,761 |
103,026 |
672,945 |
||
FUWEI FILMS (HOLDINGS) CO., LTD. AND SUBSIDIARIES |
|||||||||
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) |
|||||||||
FOR THE THREE- AND SIX-MONTH PERIODS ENDED JUNE 30, 2015 AND 2014 |
|||||||||
(amounts in thousands except share and per share value) |
|||||||||
(Unaudited) |
|||||||||
The Three-Month Period Ended June 30, |
The Six-Month Period Ended June 30, |
||||||||
2015 |
2014 |
2015 |
2014 |
||||||
RMB |
US$ |
RMB |
RMB |
US$ |
RMB |
||||
Net sales |
66,709 |
10,760 |
69,984 |
119,485 |
19,272 |
140,689 |
|||
Cost of sales |
66,422 |
10,713 |
79,482 |
127,023 |
20,488 |
150,256 |
|||
Gross margin (loss) |
287 |
47 |
(9,498) |
(7,538) |
(1,216) |
(9,567) |
|||
Operating expenses |
|||||||||
Selling expenses |
3,157 |
509 |
3,430 |
6,353 |
1,025 |
6,789 |
|||
Administrative expenses |
9,877 |
1,593 |
7,004 |
15,490 |
2,498 |
14,058 |
|||
Total operating expenses |
13,034 |
2,102 |
10,434 |
21,843 |
3,523 |
20,847 |
|||
Operating loss |
(12,747) |
(2,055) |
(19,932) |
(29,381) |
(4,739) |
(30,414) |
|||
Other income (expense) |
|||||||||
- Interest income |
218 |
35 |
260 |
738 |
119 |
640 |
|||
- Interest expense |
(2,082) |
(336) |
(3,256) |
(4,413) |
(712) |
(6,424) |
|||
- Others income (expense), net |
(32) |
(5) |
25 |
4,452 |
718 |
(63) |
|||
Total other income (expense) |
(1,896) |
(306) |
(2,971) |
777 |
125 |
(5,847) |
|||
Loss before provision for income taxes |
(14,643) |
(2,361) |
(22,903) |
(28,604) |
(4,614) |
(36,261) |
|||
Income tax benefit (expense) |
(8) |
(1) |
(79) |
(1,044) |
(168) |
20 |
|||
Net loss |
(14,651) |
(2,362) |
(22,982) |
(29,648) |
(4,782) |
(36,241) |
|||
Net (loss) income attributable to |
- |
- |
(1) |
- |
- |
(1) |
|||
Net loss attributable to the |
(14,651) |
(2,362) |
(22,981) |
(29,648) |
(4,782) |
(36,240) |
|||
Other comprehensive income (loss) |
|||||||||
- Foreign currency translation |
- |
- |
1 |
- |
- |
(19) |
|||
- Foreign currency translation |
(25) |
(4) |
(7) |
(49) |
(8) |
(55) |
|||
Comprehensive income (loss) |
- |
- |
- |
- |
- |
(20) |
|||
Comprehensive loss attributable to the Company |
(14,676) |
(2,366) |
(22,988) |
(29,697) |
(4,790) |
(36,295) |
|||
Loss per share, |
(1.12) |
(0.18) |
(1.76) |
(2.27) |
(0.37) |
(2.77) |
|||
Weighted average number ordinary |
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, 2015 AND 2014 |
|||||
(amounts in thousands except share and per share value) |
|||||
(Unaudited) |
|||||
The Six-Month Period Ended June 30, |
|||||
2015 |
2014 |
||||
RMB |
US$ |
RMB |
|||
Cash flow from operating activities |
|||||
Net loss |
(29,648) |
(4,782) |
(36,241) |
||
Adjustments to reconcile net loss to net cash |
|||||
used in operating activities |
|||||
- Depreciation of property, plant and equipment |
23,076 |
3,722 |
24,031 |
||
- Amortization of intangible assets |
262 |
42 |
262 |
||
- Deferred income taxes |
1,044 |
168 |
(20) |
||
- Bad debt recovery |
(4,135) |
(667) |
(115) |
||
Changes in operating assets and liabilities |
|||||
- Accounts and bills receivable |
(6,634) |
(1,070) |
1,150 |
||
- Inventories |
(4,210) |
(679) |
5,942 |
||
- Advance to suppliers |
2,518 |
406 |
109 |
||
- Prepaid expenses and other current assets |
12 |
2 |
(814) |
||
- Accounts payable |
(2,439) |
(393) |
2,418 |
||
- Accrued expenses and other payables |
1,377 |
222 |
1,116 |
||
- Advance from customers |
2,844 |
459 |
(7,551) |
||
- Tax payable |
(1,499) |
(242) |
2,236 |
||
Net cash used in operating activities |
(17,432) |
(2,812) |
(7,477) |
||
Cash flow from investing activities |
|||||
Purchases of property, plant and equipment |
(91) |
(15) |
(4,823) |
||
Restricted cash related to trade finance |
5,865 |
946 |
(357) |
||
Advanced to suppliers - non current |
(550) |
(89) |
(811) |
||
Amount change in construction in progress |
(730) |
(118) |
265 |
||
Return of long-term deposit |
21,000 |
3,387 |
- |
||
Net cash provided by (used in) investing activities |
25,494 |
4,111 |
(5,726) |
||
Cash flow from financing activities |
|||||
Principal payments of bank loans |
(1,675) |
(270) |
(105,000) |
||
Proceeds from short-term bank loans |
- |
- |
- |
||
Proceeds from related party |
13,796 |
2,225 |
120,000 |
||
Payment of capital lease obligation |
(4,366) |
(704) |
(4,090) |
||
Change in notes payable |
(13,913) |
(2,244) |
(3,790) |
||
Proceeds from sale-leaseback equipment |
- |
- |
- |
||
Net cash provided by (used in) financing activities |
(6,158) |
(993) |
7,120 |
||
Effect of foreign exchange rate changes |
(53) |
(7) |
(17) |
||
Net increase (decrease) in cash and cash equivalent |
1,851 |
299 |
(6,100) |
||
Cash and cash equivalent |
|||||
At beginning of period |
9,020 |
1,454 |
11,578 |
||
At end of period |
10,871 |
1,753 |
5,478 |
||
SUPPLEMENTARY DISCLOSURE: |
|||||
Interest paid |
4,413 |
712 |
6,424 |
||
Income tax paid |
- |
- |
- |
||
SUPPLEMENTARY SCHEDULE OF NONCASH INVESTING AND FINANCIAL ACTIVITIES: |
|||||
Account payable for plant and equipment: |
2,215 |
357 |
7,883 |
||
Obligations for acquired equipment under capital lease: |
4,196 |
677 |
12,787 |
||
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