omniture

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

2010-11-16 10:59 2073

Teleconference to be Held on November 16, 2010 at 8:00 a.m. EST

BEIJING, Nov. 15, 2010 /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 third quarter and first nine months of 2010.

Highlights

  • Net sales for the third quarter were RMB 129.2 million (US$19.3 million), compared with RMB 89.6 million in the same period of 2009;
  • Gross profit for the third quarter was RMB 40.5 million (US$6.0 million), compared with RMB 7.9 million in the same period of 2009;
  • Net sales during the first nine months were RMB 327.9 million (US$49.0 million), compared with RMB 236.7 million in the same period of 2009;
  • Net income for the first nine months was RMB 15.3 million (US$2.3 million), compared with a net loss of RMB 19.5 million in the same nine-month period of 2009;
  • Basic and diluted earnings per share for the first nine months were RMB 1.17 (US$0.18), compared with basic and diluted net loss per share of RMB 1.49 in the same period of 2009;
  • Sales of Specialty films for the first nine months were RMB 53.3 million (US$8.0 million) compared to RMB 21.8 million in the same period of 2009;
  • Overseas sales during the first nine months were RMB 67.6 million (US$10.1 million) compared to RMB 24.5 million in the same period of 2009.

Mr. Xiaoan He, Chairman and CEO of Fuwei Films, said, "We are very pleased with our third quarter and nine months financial results. The demand for BOPET films in domestic and foreign markets has continued to increase, especially in the foreign markets. In the third quarter we also saw the demand in the domestic market continued to expand which resulted in the significant increase of sales prices especially in the commodity films area. In spite of rising competition, we saw significant revenue growth this quarter and our gross profit was significantly higher than the previous year."

Third Quarter of 2010 Results

Net sales during the third quarter ended September 30, 2010 were RMB 129.2 million (US$19.3 million), compared to RMB 89.6 million (US$13.1 million), during the same period in 2009, representing a 44.2% increase.

The sales of specialty films during the third quarter ended September 30, 2010 were RMB28.5 million (US$4.3 million), reflecting 22.1% of total net sales as compared to 12.4% in the same period of 2009. The increase was largely attributable to the increase in demand for packaging for luxury goods.

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



Three-Month Period Ended
September 30, 2010

% of Total


Three-Month Period Ended
September 30, 2009

% of  Total




RMB

US$



RMB



Printing film

18,842

2,813

14.6%

10,292

11.5%


Stamping film


67,636

10,098

52.4%


53,441

59.6%


Metallization film

8,799

1,314

6.8%

8,105

9.0%


Specialty film


28,489

4,253

22.1%


11,149

12.4%


Base film for other application

5,408

807

4.2%

6,616

7.4%











129,174

19,285

100.0%

89,603

100.0%












Overseas sales during the third quarter ended September 30, 2010 were RMB30.9 million (US$4.6 million), which accounted for 23.9% of our total net revenues, as compared with RMB 6.0 million (US$0.9 million) and 6.7% in the same period in 2009, which is 411.8% higher than the same period last year. The increase in overseas sales was mainly due to the recovery of overseas demand, especially the increase of demand in Europe, North America, Korea, Japan and Southeast Asia.

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



Three-Month Period Ended
September 30, 2010

% of Total

Three-Month Period Ended
September 30, 2009

% of Total




RMB

US$

RMB


Sales in China

98,264

14,670

76.1%

83,564

93.3%


Sales in other countries


30,910

4,615

23.9%

6,039

6.7%










129,174

19,285

100.0%

89,603

100.0%











Gross profit was RMB40.5 million (US$6.0 million) for the third quarter ended September 30, 2010, representing a gross margin of 31.4%, as compared to a gross margin of 8.8% from the same period in 2009. This was mainly due to a significant increase in the average sales price of our products during the third quarter compared with the same period in 2009.

Operating expenses for the third quarter ended September 30, 2010 were RMB 22.4 million (US$3.3 million), which was RMB 15.3 million (US$2.3 million) or 218.0% higher than the same period in 2009. This increase was mainly due to increased delivery costs of overseas sales, allowances for doubtful account receivables and other receivables.

Net income during the third quarter ended September 30, 2010 was RMB 15.0 million (US$2.2 million) compared to net income of RMB2.0 million (US$0.3 million) during the same period in 2009, representing an increase in net income of RMB 13.0 million(US$1.9 million)from the same period in 2009. The increase was mainly due to the increase of revenue and gross margin.

Net cash flows provided by operating activities for the nine months ended September 30, 2010 was RMB 67.8 million (US$ 10.2 million) compared to net cash flows provided by operating activities of RMB10.7 (US$1.6 million) for the nine months ended September 30, 2009, which is an increase of RMB 57.0 million (US$8.5 million). This increase in cash flows from operating activities was attributable primarily to the increased earnings, decrease of accounts receivables and inventories, and increase of advance payments.

Total shareholders' equity was RMB526.9 million (US$78.7 million) as of September 30, 2010, compared with RMB 511.6 million as of December 31, 2009.

As of September 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 Tuesday, November 16, 2010, at 8:00 a.m. EDT / 9:00 p.m. Beijing time to discuss the 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.

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: 360959. The replay will be available until December 16, 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 is 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@grayling.com






FUWEI FILMS (HOLDINGS) CO., LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF SEPTEMBER 30, 2010 AND DECEMBER 31, 2009

(amounts in thousands except share and per share value)





September 30,
2010


December 31,
2009



(Unaudited)




ASSETS

RMB

US$


RMB


Current assets







Cash and cash equivalents


93,362

13,939


26,804


Restricted cash


8,583

1,281


12,541


Accounts and bills receivable, net


42,659

6,369


28,785


Inventories


32,028

4,782


45,039


Advance to suppliers


16,191

2,417


3,956


Prepayments and other receivables

1,759

263


957


Deferred tax assets - current


2,569

384


1,198


Total current assets


197,152

29,435


119,282









Plant, properties and equipment, net


294,372

43,949


318,600


Construction in progress


235,955

35,227


237,118


Lease prepayments, net


21,155

3,158


21,548


Advanced to suppliers - Long Term


-

-


2,367


Goodwill


10,276

1,534


10,276


Deposit


16,760

2,502


21,000


Deferred tax assets - non current


1,963

293


5,318









Total assets


777,633

116,098


735,509


LIABILITIES AND SHAREHOLDERS' EQUITY


Current liabilities







Short-term borrowings


137,000

20,454


153,179


Accounts payables


22,229

3,319


25,898


Advance from customers


42,251

6,308


12,608


Accrued expenses and other payables

14,056

2,098


6,981




215,536

32,179


198,666


Long-term loan


35,000

5,225


25,000









Total liabilities


250,536

37,404


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)


13,322

1,989


13,323


Additional paid-in capital


311,896

46,565


311,907


Statutory reserve


29,338

4,380


29,338


Retained earnings


171,251

25,567


156,006


Cumulative translation adjustment


1,109

166


993


Total shareholders' equity


526,916

78,667


511,567


Non-controlling interest


182

27


276


Total equity


527,098

78,694


511,843


Total liabilities and equity


777,633

116,098


735,509













FUWEI FILMS (HOLDINGS) CO., LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND OTHER
COMPREHENSIVE INCOME

FOR THE THREE AND NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2010 AND 2009

(amounts in thousands except share and per share value)

(UNAUDITED)





The Three Months


The Nine Months




Period Ended
September 30,2010


Period
Ended
September
30,2009


Period Ended
September 30,2010


Period
Ended
September
30,2009




RMB

US$


RMB


RMB

US$


RMB














Net sales

129,174

19,285

89,603

327,948

48,961

236,691


Cost of sales


(88,658)

(13,236)


(81,749)


(254,996)

(38,070)


(220,490)



Gross profit


40,515

6,049


7,854


72,952

10,891


14,201












Operating expenses












Selling expenses

(4,389)

(655)

(2,868)

(11,944)

(1,783)

(10,499)


Administrative expenses


(17,992)

(2,686)


(4,170)


(38,417)

(5,736)


(20,241)


Total operating expenses

(22,381)

(3,341)

(7,038)

(50,361)

(7,519

(30,740)














Operating income/(loss)

18,143

2,707

816

22,591

3,373

(16,539)














Other income/(expense)


- Interest income


42

6


5


214

32


148


- Interest expense

(2,337)

(349)

(2,091)

(6,624)

(989)

(6,210)


- Others income, net


(245)

(37)


3,547


(381)

(57)


(335)



Total other income/(expense)


(2,540)

(379)


1,461


(6,791)

(1,014)


(6,398)



Income before income tax benefit/(expense)


15,594

2,328


2,277


15,800

2,359


(22,937)



Income tax benefit/(expense)


(578)

(86)


(264)


(555)

(83)


3,440



Net Income/(loss)


15,017

2,242


2,013


15,245

2,276


(19,497)



Net income/(loss) attributable to noncontrolling interests


(26)

(4)


(5)


(95)

(14)


(5)


Net income/(loss) attributable to the Company

15,043

2,246

2,018


15,340

2,290

(19,492)














Other comprehensive income



- Foreign currency translation adjustments


132

19


2


116

17


614


Comprehensive income


15,174

2,265


2,020


15,456

2,307


(18,877)












Earnings per share, basic and diluted


1.15

0.17


0.15


1.17

0.18


(1.49)


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, 2010 AND 2009

(amounts in thousands except share and per share value)

(UNAUDITED)



Periods Ended September 30, 2010

Periods Ended September 30, 2009




RMB

US$


RMB


Cash flow from operating activities


Net income


15,245

2,276


(19,492)


Adjustments to reconcile net income to net cash


(used in)/provided by operating activities







- Depreciation of property, plant and equipment

26,763

3,996

25,732


- Amortization of intangible assets


340

51


340


- Deferred income taxes

1,942

290

-


- Bad debt expense/(recovery)


9,138

1,364


3,767


- Accounts receivable

(15,138)

(2,260)

11,751


- Inventories


13,011

1,942


(9,922)


- Advance to suppliers

(16,236)

(2,424)

(1,070)


- Prepaid expenses and other current assets


(487)

(73)


(6,437)


- Accounts payable

(3,656)

(546)

5,707


- Accrued expenses and other payables


7,236

1,080


(1,352)


- Advance from customers

29,643

4,426

7,791


- Tax payable

(38)

(6)

(6,101)



Net cash provided by operating activities


67,762

10,117


10,716



Cash flow from investing activities







Purchases of property, plant and equipment

(2,482)

(371)

(93,091)


Restricted cash related to trade finance


3,952

590


(400)


Advanced to suppliers - non current

2,367

353

-


Addition to construction in progress


1,163

174

83,469









Net cash used in investing activities

5,000

747

(10,023)









Cash flow from financing activities


Principal payments of short-term bank loans


(16,179)

(2,415)


(11,585)


Proceeds from short-term bank loans

10,000

1,493

10,000









Net cash (used in)/provided by financing activities

(6,179)

(923)

(1,585)









Effect of foreign exchange rate changes

(26)

72

892









Net increase (decrease) in cash and cash equivalent

66,557

10,013

(1)









Cash and cash equivalent


At beginning of period/year

26,804

3,926

15,823


At end of period/year

93,362

13,939

15,822









SUPPLEMENTARY DISCLOSURE:


Interest paid


6,624

989


5,991


Income tax paid

3,966

592

-










Source: Fuwei Films (Holdings) Co., Ltd.
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