BEIJING, May 16, 2012 /PRNewswire-Asia-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 first quarter of 2012 ended March 31, 2012.
Highlights
Mr. Xiaoan He, Chairman and CEO, said, "Fuwei Films had a difficult first quarter 2012 but we are taking steps to improve performance. The significant reduction in product sales prices due to rising competition, which significantly exceeded the reduction in costs of raw materials, resulted in the decline in margins. We believe that Fuwei Films, by continuing to position itself in the market as a leading provider of high level BOPET specialty films, can improve margins and net results. In addition to servicing our current customers and attaching great importance to R & D, we will also cut costs and expenses. We believe that new product sales opportunities and the completion of our Third Line will put the Company in a better competitive position for the long run."
First Quarter of 2012 Results
Revenues were RMB91.0 million (US$14.5 million), compared with RMB174.2 million in the same period of 2011, which was an decrease of RMB83.2 million, or 47.8% compared with the first 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 three month ended March 31, 2012 were RMB16.3 million (US$2.6 million,) or 17.9% of total revenues, compared with RMB64.8 million or 37.2% of total revenues in the same period of 2011. The decrease in overseas sales was mainly due to the significant drop of overseas sales volume and decrease in sales prices and orders in the first quarter of 2012 compared with the same period last year.
The following is a breakdown of domestic versus overseas sales for the three-month periods ended March 31, 2012 and 2011 (amounts in thousands):
Three-Month Period Ended | ||||||
March 31,2012 | % of Total | March 31,2011 | % of Total | |||
RMB | US$ | RMB | ||||
Sales in China | 74,700 | 11,862 | 82.10% | 109,367 | 62.80% | |
Sales in other countries | 16,311 | 2,590 | 17.90% | 64,787 | 37.20% | |
Total | 91,011 | 14,452 | 100.00% | 174,154 | 100.00% | |
Gross profit was negative RMB3.0 million (negative US$0.5 million) for the first three months of 2012, compared with RMB45.1 million in the same period of 2011. Gross margin was negative 3.3%, compared with 25.9% in the first quarter of 2011. This was mainly due to the decrease in sales price largely exceeding those in raw material during the first quarter ended March 31, 2012 compared with the same period in 2011.
Operating expenses for the three months ended March 31, 2012 was RMB10.4 million (US$1.7 million), compared with RMB15.7 million in the first quarter of 2011. This decrease was mainly due to reduced R&D expenditure for this quarter.
Operating loss for the first quarter of 2012 was RMB13.5 million (US$2.1 million), compared with operating income of RMB29.4 million in the same period of 2011.
Net loss attributable to the Company during the first three months of 2012 was RMB15.1 million (US$2.4 million), compared with net income attributable to the Company of RMB 23.6 million in the first quarter of 2011.
Basic and diluted net loss per share was RMB1.16 (US$0.18), compared with basic and diluted earnings per share of RMB1.81 in the first quarter of 2011.
Total shareholders' equity was RMB558.5 million (US$88.7 million) as of March 31, 2012, compared with RMB 573.7 million as of December 31, 2011.
As of March 31, 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, May 16, 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: 393639. The replay will be available until June 16, 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 MARCH 31, 2012 AND DECEMBER 31, 2011 | |||||
(amounts in thousands except share and per share value) | |||||
(Unaudited) | |||||
March 31, 2012 | December 31, 2011 | ||||
RMB | US$ | RMB | |||
ASSETS | |||||
Current assets | |||||
Cash and cash equivalents | 64,860 | 10,299 | 44,172 | ||
Restricted cash | 110,228 | 17,504 | 102,212 | ||
Accounts and bills receivable, net | 17,759 | 2,820 | 52,457 | ||
Inventories | 43,415 | 6,894 | 41,774 | ||
Advance to suppliers | 12,008 | 1,907 | 8,808 | ||
Prepayments and other receivables | 12,044 | 1,912 | 31,172 | ||
Deferred tax assets - current | 1,311 | 208 | 1,309 | ||
Total current assets | 261,625 | 41,544 | 281,904 | ||
Plant, properties and equipment, net | 265,042 | 42,087 | 277,119 | ||
Construction in progress | 183,302 | 29,107 | 179,386 | ||
Lease prepayments, net | 19,916 | 3,163 | 20,047 | ||
Advance to suppliers - long term | 2,789 | 443 | 3,060 | ||
Goodwill | 10,276 | 1,632 | 10,276 | ||
Long-term deposit | 16,760 | 2,661 | 16,760 | ||
Deferred tax assets - non current | 1,587 | 252 | 1,622 | ||
Total assets | 761,297 | 120,889 | 790,174 | ||
LIABILITIES AND EQUITY | |||||
Current liabilities | |||||
Short-term borrowings | 148,501 | 23,581 | 168,501 | ||
Accounts payables | 17,391 | 2,762 | 19,317 | ||
Note payable | 6,510 | 1,034 | |||
Advance from customers | 13,387 | 2,126 | 11,876 | ||
Accrued expenses and other payables | 5,969 | 948 | 5,798 | ||
Total current liabilities | 191,758 | 30,451 | 205,492 | ||
Long-term loan | 10,000 | 1,588 | 10,000 | ||
Deferred tax liabilities | 1,808 | 287 | 1,811 | ||
Total liabilities | 203,566 | 32,326 | 217,303 | ||
Equity | |||||
Shareholders' equity | |||||
Registered capital(of US$0.129752 par value; 20,000,000 shares authorized; 13,062,500 issued and outstanding) | 13,323 | 2,116 | 13,323 | ||
Additional paid-in capital | 311,907 | 49,529 | 311,907 | ||
Statutory reserve | 37,441 | 5,945 | 37,441 | ||
Retained earnings | 194,640 | 30,907 | 209,768 | ||
Cumulative translation adjustment | 1,222 | 193 | 1,230 | ||
Total shareholders' equity | 558,533 | 88,690 | 573,669 | ||
Non-controlling interest | (802) | (127) | (798) | ||
Total equity | 557,731 | 88,563 | 572,871 | ||
Total liabilities and equity | 761,297 | 120,889 | 790,174 | ||
FUWEI FILMS (HOLDINGS) CO., LTD. AND SUBSIDIARIES | ||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) | ||||
FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2012 AND 2011 | ||||
(amounts in thousands except share and per share value) | ||||
(Unaudited) | ||||
The Three-Month Period Ended March 31, | ||||
2012 | 2011 | |||
RMB | US$ | RMB | ||
Net sales | 91,011 | 14,452 | 174,154 | |
Cost of sales | 94,037 | 14,932 | 129,018 | |
Gross profit | (3,026) | (480) | 45,136 | |
Operating expenses | ||||
Selling expenses | 4,086 | 649 | 4,095 | |
Administrative expenses | 6,348 | 1,008 | 11,636 | |
Total operating expenses | 10,434 | 1,657 | 15,730 | |
Operating (loss) income | (13,460) | (2,137) | 29,405 | |
Other income (expense) | ||||
- Interest income | 658 | 104 | 551 | |
- Interest expense | (2,725) | (433) | (2,299) | |
- Others income (expense), net | 427 | 68 | (104) | |
Total other expense | (1,640) | (261) | (1,852) | |
Income (loss) before income tax expense | (15,100) | (2,398) | 27,553 | |
Income tax expense | (31) | (5) | (3,913) | |
Net (loss) income | (15,131) | (2,403) | 23,640 | |
Net loss attributable to noncontrolling interests | (3) | - | (4) | |
Net income (loss) attributable to the Company | (15,128) | (2,403) | 23,644 | |
Other comprehensive income | ||||
- Foreign currency translation adjustments attributable to noncontrolling interest | - | - | - | |
- Foreign currency translation adjustments attributable to the Company | (8) | (1) | (7) | |
Comprehensive income (loss) attributable to non-controlling interest | (3) | - | 2 | |
Comprehensive income (loss) attribute to the Company | (15,136) | (2,404) | 23,632 | |
Earnings (loss) per share, | (1.16) | (0.18) | 1.81 | |
Basic and diluted | ||||
Weighted average number ordinary shares, | 13,062,500 | 13,062,500 | 13,062,500 | |
Basic and diluted | ||||
FUWEI FILMS (HOLDINGS) CO., LTD. AND SUBSIDIARIES | ||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||
FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2012 AND 2011 | ||||
(amounts in thousands except share and per share value) | ||||
(Unaudited) | ||||
The Three-Month Period Ended March 31, | ||||
2012 | 2011 | |||
RMB | US$ | RMB | ||
Cash flow from operating activities | ||||
Net (loss) income | (15,131) | (2,403) | 23,640 | |
Adjustments to reconcile net income to net cash | ||||
(used in) provided by operating activities | ||||
- Depreciation of property, plant and equipment | 12,186 | 1,935 | 8,917 | |
- Amortization of intangible assets | 113 | 18 | 113 | |
- Deferred income taxes | 31 | 5 | (218) | |
- Bad debt (recovery) expense | 14 | 2 | 22 | |
Changes in operating assets and liabilities | ||||
- Accounts and bills receivable | 34,682 | 5,507 | (7,902) | |
- Inventories | (1,641) | (261) | 521 | |
- Advance to suppliers | (3,201) | (508) | (1,475) | |
- Prepaid expenses and other current assets | 19,129 | 3,038 | 409 | |
- Accounts payable | (1,926) | (306) | 897 | |
- Accrued expenses and other payables | 407 | 65 | (6,130) | |
- Note payable | 6,510 | 1,034 | ||
- Advance from customers | 1,511 | 240 | (18,021) | |
- Tax payable | (234) | (37) | (1,254) | |
Net cash provided by (used in) operating activities | 52,450 | 8,329 | (481) | |
Cash flow from investing activities | ||||
Purchases of property, plant and equipment | (91) | (14) | (1,717) | |
Restricted cash related to trade finance | (8,016) | (1,273) | 977 | |
Advanced to suppliers - non current | 271 | 43 | (2,604) | |
Amount decrease to construction in progress | (3,916) | (622) | 21,524 | |
Net cash (used in) provided by investing activities | (11,752) | (1,866) | 18,180 | |
Cash flow from financing activities | ||||
Principal payments of short-term bank loans | (20,000) | (3,176) | (7,000) | |
Proceeds from short-term bank loans | - | - | - | |
Net cash used in financing activities | (20,000) | (3,176) | (7,000) | |
Effect of foreign exchange rate changes | (10) | (6) | (72) | |
Net increase in cash and cash equivalent | 20,688 | 3,281 | 10,627 | |
Cash and cash equivalent | ||||
At beginning of period/year | 44,172 | 7,018 | 171,227 | |
At end of period/year | 64,860 | 10,299 | 181,852 | |
SUPPLEMENTARY DISCLOSURE: | ||||
Interest paid | 2,725 | 433 | 2,299 | |
Income tax paid | - | - | 4,723 | |
