omniture

Fuwei Films Announces Its Unaudited Financial Results for the Second Quarter of 2010

2010-08-17 08:18 1033
-  Teleconference to be Held on August 17, 2010 at 8:00 a.m. EDT -

    BEIJING, Aug. 17 /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 and first six months of 2010.

    Highlights
    -- Net sales for the second quarter were RMB 110.3 million (US$16.3
       million), compared with RMB 72.6 million in the same period of 2009;
    -- Gross profit for the second quarter was RMB 19.7 million (US$2.9
       million), compared with RMB 6.3 million in the same period of 2009;
    -- Net sales during the first six months were RMB 198.8 million (US$29.3
       million), compared with RMB 147.1 million in the same period of 2009;
    -- Net income for the first six months was RMB 297,000 (US$ 44,000),
       compared with a net loss of RMB 21.5 million in the same six month
       period of 2009;
    -- Basic and diluted earnings per share for the first six months was RMB
       0.02 (US$0.003), compared with basic and diluted net loss per share of
       RMB 1.65 in the same period of 2009;
    -- Sales of Specialty films for the first six months were RMB 24.8 million
       (US$3.7 million) compared to RMB 10.7 million in the same period of
       2009;
    -- Overseas sales during the first six months were RMB 36.7 million
       (US$5.4 million) compared to RMB 18.4 million in the same period of 
       2009.

    Mr. Xiaoan He, Chairman and CEO of Fuwei Films, said, "We are pleased with our financial results for the first half of 2010. The market demand for our BOPET film products have increased. Thanks to a more robust global economy, internal cost cutting and sales of higher margin products, we believe that 2010 will be a good year for Fuwei Films."

    Second Quarter of 2010 Results

    Net sales during the second quarter ended June 30, 2010 were RMB 110.3 million (US$16.3 million), compared to RMB 72.6 million (US$10.6 million), during the same period in 2009, representing a 52.0% increase.

    The sales of specialty films during the second quarter ended June 30, 2010 were RMB 16.2 million (US$ 2.4 million), reflected 14.7% of total net sales as compared to 9.0% in the same period of 2009. The increase was largely attributable to a recovery in demand for luxury goods packaging.

    The following is a breakdown of commodity and specialty film sales for the three month period ended June 30, 2010 and 2009 (amounts in thousands):


                                            Three              Three 
                                            Month              Month 
                                           Period             Period
                                            Ended              Ended 
                                           June 30,          June 30, 
                                             2010       % of    2009   % of
                                         RMB     US$    Total    RMB   Total

    Printing film                      18,801   2,772   17.0%   9,503   13.1%
    Stamping film                      64,897   9,570   58.8%  37,235   51.3%
    Metallization film                  4,978     734    4.5%   8,131   11.2%
    Special film                       16,248   2,396   14.7%   6,521    9.0%
    Base film for other applications    5,395     796    4.9%  11,181   15.4%
                                      110,319  16,268  100.0%  72,571  100.0%

    Overseas sales during the second quarter ended June 30, 2010 were RMB 25.4 million (US$3.7 million), which accounted for 23.0% of total net sales, as compared with RMB 7.9 million (US$1. 2 million), and 10.9% in the same period in 2009, which is 221.5% higher than the same period last year. The increase in export sales was mainly due to the recovery of overseas market demand, especially demand in the Europe, North America and Southeast Asia regions.

    The following is a breakdown of domestic and overseas sales for the three month period ended June 30, 2010 and 2009 (amounts in thousands):


                                            Three              Three 
                                            Month              Month 
                                           Period             Period
                                            Ended              Ended 
                                           June 30,          June 30, 
                                             2010       % of    2009   % of
                                         RMB     US$    Total    RMB   Total

    Sales in China                     84,959  12,529   77.0%  64,632   89.1%
    Sales in other countries           25,360   3,739   23.0%   7,939   10.9%

                                      110,319  16,268  100.0%  72,571  100.0%


    Gross profit was RMB 19.7 million (US$ 2.9 million) for the second quarter ended June 30, 2010, representing a gross margin of 17.8%, as compared to a gross margin of 8.6% from the same period in 2009. This was mainly due to an increase in the average sales price during the second quarter ended June 30, 2010 compared with the same period in 2009.

    Operating expenses for the second quarter ended June 30, 2010 were RMB17.1 million (US$2.5 million), which was RMB 7.3 million (US$1.1 million) the same period in 2009, or 134.2% higher than the same period in 2009. This increase was mainly due to accrued compensation expense for class action litigation and related legal fees.

    Net loss during the second quarter ended June 30, 2010 was RMB 3,000 (US$400) compared to net loss of RMB 7.4 million (US$ 1.1 million) during the same period in 2009, representing an increase in net income of RMB 7.4 million(US$1.1 million) from the same period in 2009. The increase was mainly due to higher average selling prices, leading to higher net sales and gross margin.

    Net cash flows provided by operating activities for the six months ended June 30, 2010, was RMB 17.2 million (US$ 2.6 million) compared to net cash flows of RMB 12.3 million (US$ 1.8 million) for the six months ended June 30, 2009, which is an increase of RMB 5.0 million (US$0.7 million). This increase in cash flows from operating activities was attributable primarily to the increased earnings, decrease of inventories, increase of accrued expenses and other payables.

    Total shareholders' equity was RMB 511.8 million (US$75.5 million) as of June 30, 2010, compared with RMB 511.6 million as of December 31, 2009.

    As of June 30, 2010, the Company had 13,062,500 basic and diluted total ordinary shares outstanding.

    Conference Call Information

    The Company will host a teleconference on August 17, at 8:00 a.m. EDT / 8:00 p.m. Beijing time to discuss its quarterly 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. The call will be webcast simultaneously and can be accessed on the Fuwei Films' Website at http://www.fuweiholdings.com . Please visit the Web site at least 15 minutes prior to the scheduled start time to register for the Web cast and download any necessary audio software.

    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: 350870. The replay will be available until August 24, 2010, 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 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 both the short and long-term effects of the global financial crisis on the Company and the BOPET film industry; 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. Maggie Huang
     Investor Relations Manager
     Phone: +86-10-6852-2612
     Email: fuweiIR@fuweifilms.com

    In the U.S.:

     Ms. Leslie Wolf-Creutzfeldt
     Investor Relations
     Grayling
     Phone: +1-646-284-9472
     Email: leslie.wolf-creutzfeldt@us.grayling.com





                 FUWEI FILMS (HOLDINGS) CO., LTD. AND SUBSIDIARIES
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                   AS OF JUNE 30, 2010 AND DECEMBER 31, 2009
           (amounts in thousands except share and per share value)
                                   (Unaudited)


                                                          June       December
                                                        30, 2010     31, 2009
                                                       RMB      US$      RMB
                       ASSETS
    Current assets
    Cash and cash equivalents                        50,615    7,464   26,804
    Restricted cash                                     500       74   12,541
    Accounts and bills
     receivable, net                                 37,289    5,499   28,785
    Inventories                                      39,357    5,804   45,039
    Advance to suppliers                              6,626      977    3,956
    Prepayments and other
     receivables                                        829      122      957
    Deferred tax assets -
     current                                          1,198      177    1,198
    Total current assets                            136,414   20,117  119,282

    Plant, properties and
     equipment, net                                 301,710   44,490  318,600
    Construction in progress                        236,004   34,801  237,118
    Lease prepayments, net                           21,286    3,139   21,548
    Advanced to suppliers -
     Long Term                                        1,457      215    2,367
    Goodwill                                         10,276    1,515   10,276
    Deposit                                          21,000    3,097   21,000
    Deferred tax assets - non
     current                                          5,341      788    5,318

    Total assets                                    733,488  108,162  735,509

                    LIABILITIES AND SHAREHOLDERS' EQUITY

    Current liabilities
    Short-term borrowings                           137,000   20,202  153,179
    Accounts payables                                21,750    3,207   25,898
    Advance from customers                           13,220    1,949   12,608
    Accrued expenses and other
     payables                                        14,463    2,135    6,981
                                                    186,433   27,493  198,666

     Long-term loan                                  35,000    5,161   25,000

    Total liabilities                               221,433   32,654  223,666

    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    1,965   13,323
    Additional paid-in capital                      311,907   45,994  311,907
    Statutory reserve                                29,338    4,326   29,338
    Retained earnings                               156,303   23,048  156,006
    Cumulative translation
     adjustment                                         977      144      993
    Total shareholders' equity                      511,849   75,477  511,567
    Non-controlling interest                            207       31      276
    Total equity                                    512,056   75,508  511,843
    Total liabilities and
     equity                                         733,488  108,162  735,509





               FUWEI FILMS (HOLDINGS) CO., LTD. AND SUBSIDIARIES
    CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME
         FOR THE THREE AND SIX MONTH PERIODS ENDED JUNE 30, 2010 AND 2009
             (amounts in thousands except share and per share value)
                                  (UNAUDITED)
                                                       The Three Month
                                                    Period            Period
                                                     Ended             Ended
                                                    June 30,         June 30,
                                                      2010              2009
                                                RMB         US          $RMB

    Net sales                                 110,319      16,268      72,571
    Cost of sales                             (90,648)    (13,367)    (66,297)

    Gross profit                               19,670       2,901       6,274

    Operating expenses
    Selling expenses                           (4,159)       (613)     (2,734)
    Administrative expenses                   (12,896)     (1,902)     (4,609)
    Total operating expenses                  (17,055)     (2,515)     (7,343)

    Operating income/(loss)                     2,615         386      (1,069)

    Other income/(expense)
    - Interest income                             157          23          41
    - Interest expense                         (2,669)       (394)     (4,119)
    - Others income, net                         (180)        (27)     (3,437)

    Total other income/(expense)               (2,692)       (397)     (7,515)

    Income/ (loss) before income tax
     benefit/(expense)                            (77)        (11)     (8,584)
    Income tax benefit/(expense)                   42           6       1,210

    Net income/(loss)                             (35)       (5.2)     (7,374)
    Net income/(loss) attributable to non-
     controlling interests                        (33)       (4.8)         -- 
    Net income/(loss) attributable to the
     Company                                       (3)       (0.4)     (7,374)

    Other comprehensive income
    - Foreign currency translation
     adjustments                                   --          --        (416)
    Comprehensive income/ (loss)                   (3)       (0.4)     (7,790)

    Earnings/ (loss) per share, Basic and
     diluted                                  (0.0002)   (0.00003)      (0.56)
    Weighted average number ordinary
     shares, Basic and diluted             13,062,500  13,062,500  13,062,500


                                                         The Six Month
                                                    Period            Period
                                                     Ended             Ended
                                                    June 30,         June 30,
                                                      2010              2009
                                                RMB         US          $RMB

    Net sales                                 198,774      29,311     147,088
    Cost of sales                            (166,337)    (24,528)   (140,741)

    Gross profit                               32,437       4,783       6,347

    Operating expenses
    Selling expenses                           (7,555)     (1,114)     (7,631)
    Administrative expenses                   (20,425)     (3,012)    (16,071)
    Total operating expenses                  (27,980)     (4,126)    (23,702)

    Operating income/(loss)                     4,457         657     (17,355)

    Other income/(expense)
    - Interest income                             171          25         143
    - Interest expense                         (4,287)       (632)     (4,119)
    - Others income, net                         (136)        (20)     (3,882)

    Total other income/(expense)               (4,251)       (627)     (7,858)

    Income/ (loss) before income tax
     benefit/(expense)                            205          30     (25,213)
    Income tax benefit/(expense)                   23           3       3,704

    Net income/(loss)                             228          34     (21,510)
    Net income/(loss) attributable to non-
     controlling interests                        (69)        (10)         --
    Net income/(loss) attributable to the
     Company                                      297          44     (21,510)

    Other comprehensive income
    - Foreign currency translation
     adjustments                                  (16)         (2)       (428)
    Comprehensive income/ (loss)                  281          41     (21,937)

    Earnings/ (loss) per share, Basic and
     diluted                                     0.02       0.003       (1.65)
    Weighted average number ordinary
     shares, Basic and diluted             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 PERIOD ENDED JUNE 30, 2010 AND 2009
            (amounts in thousands except share and per share value)
                                   (UNAUDITED)
                                                  The Six         The Six
                                                    Month           Month
                                                   Period          Period
                                                    Ended           Ended
                                                   June 30,        June 30,
                                                     2010            2009
                                                RMB         US$       RMB
    Cash flow from operating activities
    Net income                                   228         34     (21,510)
    Adjustments to reconcile net income
     to net cash (used in)/provided by
     operating activities

    - Depreciation of property, plant and
     equipment                                18,158      2,678      16,048
    - Amortization of intangible assets          227         33         227
    - Deferred income taxes                      (23)        (3)     (3,320)
    - Bad debt expense/(recovery)                 (2)      (0.2)      5,945
    - Accounts receivable                     (8,502)    (1,254)     13,948
    - Inventories                              5,682        838       1,567
    - Advance to suppliers                    (2,670)      (394)      2,504
    - Prepaid expenses and other current
     assets                                       87         13      (5,842)
    - Accounts payable                        (4,147)      (611)      2,637
    - Accrued expenses and other payables      5,922        899        (247)
    - Advance from customers                     613         90       3,383
    - Tax payable                              1,610        237      (3,042)

    Net cash provided by operating
     activities                               17,184      2,560      12,298

    Cash flow from investing activities
    Purchases of property, plant and
     equipment                                (1,234)      (182)    (88,458)
    Restricted cash related to trade
     finance                                  12,041      1,776        (644)
    Advanced to suppliers - non current          910        134          --
    Addition to construction in progress       1,114        164      78,953

    Net cash used in investing activities     12,832      1,892     (10,149)

    Cash flow from financing activities
    Principal payments of short-term bank
     loans                                   (16,179)    (2,386)    (11,585)
    Proceeds from short-term bank loans       10,000      1,475      10,000

    Net cash (used in)/provided by
     financing activities                     (6,179)      (911)     (1,585)

    Effect of foreign exchange rate
     changes                                     (26)        (3)       (431)

    Net increase (decrease) in cash and
     cash equivalent                          23,810      3,538         134

    Cash and cash equivalent
    At beginning of period/year               26,804      3,926      15,823
    At end of period/year                     50,615      7,464      15,957

    SUPPLEMENTARY DISCLOSURE:
    Interest paid                              4,441        655       3,901
    Income tax paid                               --         --          -- 
Source: Fuwei Films (Holdings) Co., Ltd.
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