SHANGHAI, June 27, 2015 /PRNewswire/ -- Ossen Innovation Co., Ltd. ("Ossen" or the "Company") (Nasdaq: OSN), a China-based manufacturer of an array of plain surface, rare earth and zinc coated pre-stressed steel materials, today announced its financial results for the quarter ended March 31, 2015.
Dr. Liang Tang, Chairman of Ossen Innovation, commented: "The overall business environment remained challenging for us during the first quarter of 2015 as China's economy continued to lose steam with its GDP growth hitting the lowest point in six years to just 7.0%, leading to a 4.5% year-over-year decrease in our total revenues. However, we continued to execute well and improved net income and gross and operating margins significantly on a year-over-year basis, leading to an EPS of $0.04 for the first quarter of 2015 from $0.02 for the same period of last year."
Three Months Ended March 31, 2015 Financial Results |
||||||
For the Three Months Ended March 31, |
||||||
($ millions, expect per share data) |
2015 |
2014 |
% Change |
|||
Revenues |
$26.8 |
$28.0 |
-4.5% |
|||
Gross profit |
$3.6 |
$2.6 |
37.2% |
|||
Gross margin |
13.5% |
9.4% |
4.1% |
|||
Operating income |
$1.7 |
$1.2 |
39.5% |
|||
Operating margin |
6.2% |
4.3% |
2.0% |
|||
Net income attributable to Ossen Innovation |
$0.9 |
$0.5 |
79.1% |
|||
EPS |
$0.04 |
$0.02 |
79.1% |
For the three months ended March 31, 2015, revenues decreased by $1.3 million, or 4.5%, to $26.8 million from $28.0 million for the same period of last year, mainly due to weakness in rare earth coated products sales and partially offset by strength in zinc coated, plain surfaced and others products. The sales of coated PC steel materials, including both rare earth and zinc coated products, decreased by $4.4 million, or 16.6%, to $22.1 million and accounted for 83% of total sales for the three months ended March 31, 2015. The sales of rare earth and zinc coated products were $18.2 million and $3.9 million, respectively, for the three months ended March 31, 2015, compared to $26.5 million and nil, respectively, for the same period of last year. The sales of plain surface PC strands and others increased by approximately $3.1 million, or 210.0%, to $4.6 million and accounted for 17% of total sales for the three months ended March 31, 2015 mainly due to increased sales volume of plain surface PC strands as well as sales of other products.
Gross profit increased by approximately $1.0 million, or 37.2%, to $3.6 million for the three months ended March 31, 2015 from $2.6 million for the same period of last year. Gross margin was 13.5% for the three months ended March 31, 2015, compared to 9.4% for the same period of last year. Gross margins for rare earth and zinc coated products were 11.6% and 26.2%, respectively, for the three months ended March 31, 2015, compared to 8.9% and nil, respectively, for the same period of last year. Gross margin for plain surface PC Strands and others was 11.3% for the three months ended March 31, 2015, compared to 19.1% for the same period of last year.
Selling expenses increased by $0.02 million, or 14.8%, to approximately $0.1 million for the three months ended March 31, 2015. General and administrative expenses increased by $0.5 million, or 36.9%, to $1.8 million for the three months ended March 31, 2015 mainly due to increase in the provision for bad debts. As a result, total operating expenses increased by $0.5 million, or 35.2%, to approximately $2.0 million for the three months ended March 31, 2015 from $1.4 million for the same period of last year.
Operating income was $1.7 million, or 6.2% of total revenues, for the three months ended March 31, 2015, compared to $1.2 million, or 4.3% of total revenues, for the same period of last year.
Net income increased by approximately $0.3 million, or 64.9%, to $0.9 million for the three months ended March 31, 2015 from $0.5 million for the same period of last year.
After deducting net income attributable to non-controlling interest, net income attributable to Ossen Innovation increased by $0.4 million, or 79.1%, to $0.9 million for the three months ended March 31, 2015 from $0.5 million for the same period of last year. Earnings per share, both basic and diluted, were $0.04 for the three months ended March 31, 2015, versus $0.02 for the same period of last year.
Balance Sheet and Cash Flows
The Company had approximately $10.8 million of cash and restricted cash as of March 31, 2015, compared to $18.3 million at December 31, 2014. Accounts receivable were $68.7 million as of March 31, 2015, compared to $53.8 million at December 31, 2014. The days of sales of outstanding (DSO) were 206 days for the three months ended March 31, 2015 compared to 151 days for the year of 2014. The increase in DSO is attributable to the higher accounts receivable as of March 31, 2015 pushing the Company higher than its historical range. The balance of prepayment to suppliers for raw materials totaled $54.1 million as of March 31, 2015, compared to $56.3 million at December 31, 2014. The Company had inventories of $16.0 million as of March 31, 2015, compared to $20.1 million at the end of 2014. Total working capital was $109.7 million as of March 31, 2015, compared to $108.0 million at December 31, 2014.
Net cash provided by operating activities was $3.6 million for the three months ended March 31, 2015, compared to net cash used in operating activities of $1.1 million for the same period of last year. Net cash used in investing activities was $0.016 million for the three months ended March 31, 2015, compared to $0.001 million for the same period of last year. Net cash used in financing activities was $4.1 million for the three months ended March 31, 2015, compared to $0.1 million for the same period of last year.
Conference Call
To attend the call, please use the information below for either dial-in access or webcast access. When prompted on dial-in, ask for "Ossen Innovation First Quarter 2015 Conference Call" or be prepared to utilize the conference ID.
Conference Call |
Ossen Innovation First Quarter 2015 Conference Call |
Date: |
Monday, June 29, 2015 |
Time: |
8:30 am EDT, U.S. |
Conference Line Dial-In (U.S.): |
+1-845-675-0437 |
International Toll Free: |
United States: +1-866-519-4004 China, Domestic Mobile: 400-620-8038 China, Domestic: 800-819-0121 |
Conference ID: |
71214017 |
Please dial in at least 10 minutes before the call to ensure timely participation. A playback will be available through July 7, 2015. To listen, please call +1-855-452-5696 within the United States or +1-646-254-3697 if calling internationally. Utilize the pass code 71214017 for the replay.
This call is being webcast and can be accessed by clicking on this link: http://edge.media-server.com/m/p/jh9aiioi.
About Ossen Innovation Co., Ltd.
Ossen Innovation Co., Ltd. manufactures and sells a wide variety of plain surface pre-stressed steel materials and rare earth coated and zinc coated pre-stressed steel materials. The Company's products are mainly used in the construction of bridges, as well as in highways and other infrastructure projects. Ossen has two manufacturing facilities located in Maanshan, Anhui Province, and Jiujiang, Jiangxi Province.
Safe Harbor Statements
This press release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements involve inherent risks and uncertainties that could cause actual results to differ materially from those projected or anticipated, including risks outlined in the Company's public filings with the Securities and Exchange Commission, including the Company's annual report on Form 20-F, as amended. All information provided in this press release is as of the date hereof. Except as required by law, the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events.
For more information, please contact:
Ossen Innovation Co., Ltd.
Feng Peng, Chief Financial Officer
Email: feng.peng@ossencorp.com
Phone: +86-21-6888-8886
Web: www.osseninnovation.com
Investor Relations
Weitian Group LLC
Phone: +1-917-609-0333
Email: tina.xiao@weitian-ir.com
OSSEN INNOVATION CO., LTD AND SUBSIDIARIES |
|||||
CONSOLIDATED BALANCE SHEETS |
|||||
(Unaudited) |
|||||
March 31, |
December 31, |
||||
2015 |
2014 |
||||
(Unaudited) |
|||||
ASSETS |
|||||
Current Assets |
|||||
Cash and cash equivalents |
$ |
784,640 |
$ |
684,592 |
|
Restricted cash |
10,050,376 |
17,572,732 |
|||
Notes receivable - bank acceptance notes |
- |
9,925,155 |
|||
Accounts receivable, net of allowance for doubtful accounts |
68,672,444 |
53,764,414 |
|||
Inventories |
15,983,332 |
20,137,901 |
|||
Advance to suppliers |
54,114,560 |
56,327,390 |
|||
Other current assets |
1,012,951 |
946,319 |
|||
Total Current Assets |
150,618,303 |
159,358,503 |
|||
Property, plant and equipment, net |
6,857,517 |
7,174,646 |
|||
Land use rights, net |
4,223,735 |
4,231,348 |
|||
TOTAL ASSETS |
$ |
161,699,555 |
$ |
170,764,497 |
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|||||
Current Liabilities |
|||||
Notes payable - bank acceptance notes |
$ |
18,217,168 |
$ |
26,521,315 |
|
Short-term bank loans |
15,521,354 |
18,711,357 |
|||
Accounts payable |
3,520,025 |
3,217,076 |
|||
Customer deposits |
682,205 |
588,005 |
|||
Income tax payable |
798,241 |
552,459 |
|||
Other payables and accrued expenses |
2,038,242 |
1,622,958 |
|||
Due to related party |
- |
69,469 |
|||
Due to shareholder |
130,000 |
100,000 |
|||
Total Current Liabilities |
40,907,235 |
51,382,639 |
|||
Bond payable |
16,075,195 |
15,972,837 |
|||
TOTAL LIABILITIES |
56,982,430 |
67,355,476 |
|||
EQUITY |
|||||
Shareholders' Equity |
|||||
Ordinary shares, $0.01 par value: 100,000,000 shares |
200,000 |
200,000 |
|||
Additional paid-in capital |
33,971,455 |
33,971,455 |
|||
Statutory reserve |
5,124,079 |
5,021,752 |
|||
Retained earnings |
45,732,899 |
44,971,082 |
|||
Treasury stock, at cost: 98,041 shares as of March 31, 2014 |
(96,608) |
(96,608) |
|||
Accumulated other comprehensive income |
8,862,493 |
8,425,697 |
|||
TOTAL SHAREHOLDERS' EQUITY |
93,794,318 |
92,493,378 |
|||
Non-controlling interest |
10,922,807 |
10,915,643 |
|||
TOTAL EQUITY |
104,717,125 |
103,409,021 |
|||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |
$ |
161,699,555 |
$ |
170,764,497 |
OSSEN INNOVATION CO., LTD AND SUBSIDIARIES |
|||||
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME |
|||||
(Unaudited) |
|||||
Three Months Ended March 31, |
|||||
2015 |
2014 |
||||
REVEUNUES |
$ |
26,768,356 |
$ |
28,036,908 |
|
COST OF GOODS SOLD |
23,141,983 |
25,392,916 |
|||
GROSS PROFIT |
3,626,373 |
2,643,992 |
|||
Selling expenses |
124,435 |
108,438 |
|||
General and administrative expenses |
1,833,670 |
1,339,531 |
|||
Total Operating Expenses |
1,958,105 |
1,447,969 |
|||
INCOME FROM OPERATIONS |
1,668,268 |
1,196,023 |
|||
Financial expenses, net |
(753,917) |
(700,735) |
|||
Other income, net |
139,314 |
168,265 |
|||
INCOME BEFORE INCOME TAX |
1,053,665 |
663,553 |
|||
INCOME TAX |
(182,357) |
(135,272) |
|||
NET INCOME |
871,308 |
528,281 |
|||
LESS: NET INCOME ATTRIBUTABLE TO NON- |
|||||
7,164 |
45,829 |
||||
NET INCOME ATTRIBUTABLE TO CONTROLLING INTEREST |
|||||
864,144 |
482,452 |
||||
OTHER COMPREHENSIVE INCOME |
|||||
Foreign currency translation gain |
436,796 |
495,320 |
|||
TOTAL OTHER COMPREHENSIVE INCOME |
|||||
436,796 |
495,320 |
||||
COMPREHENSIVE INCOME |
$ |
1,300,940 |
$ |
977,772 |
|
EARNINGS PER ORDINARY SHARE |
|||||
Basic and diluted |
$ |
0.04 |
$ |
0.02 |
|
WEIGHTED AVERAGE ORDINARY SHARES OUTSTANDING |
|||||
Basic and diluted |
19,901,959 |
19,901,959 |
OSSEN INNOVATION CO., LTD. AND SUBSIDIARIES |
||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||
(Unaudited) |
||||||
Three Months Ended March 31, |
||||||
2015 |
2014 |
|||||
CASH FLOWS FROM OPERATING ACTIVITIES: |
||||||
Net income |
$ |
871,308 |
$ |
528,281 |
||
Adjustments to reconcile net income to net cash |
||||||
Depreciation and amortization |
387,371 |
388,213 |
||||
Share-based compensation expense |
||||||
Changes in operating assets and liabilities: |
||||||
(Increase) Decrease In: |
||||||
Accounts receivable |
(14,908,029) |
3,991,328 |
||||
Inventories |
4,154,569 |
(15,112,464) |
||||
Advance to suppliers |
2,212,830 |
(3,811,538) |
||||
Other current assets |
(66,632) |
814,733 |
||||
Notes receivable - bank acceptance notes |
9,925,155 |
(2,446,020) |
||||
Notes receivable from related party - bank acceptance notes |
- |
12,915,099 |
||||
Increase (Decrease) In: |
||||||
Accounts payable |
302,949 |
(156,056) |
||||
Customer deposits |
94,199 |
2,061,988 |
||||
Income tax payable |
245,782 |
176,656 |
||||
Other payables and accrued expenses |
415,285 |
(612,444) |
||||
Due to related party |
(69,469) |
78,722 |
||||
Due to shareholder |
30,000 |
50,000 |
||||
Net cash provided by/(used in) operating activities |
3,595,318 |
(1,133,502) |
||||
CASH FLOWS FROM INVESTING ACTIVITIES: |
||||||
Purchases of plant and equipment |
(16,736) |
(1,150) |
||||
Net cash used in investing activities |
(16,736) |
(1,150) |
||||
CASH FLOWS FROM FINANCING ACTIVITIES: |
||||||
Decrease in restricted cash |
7,522,356 |
6,100,001 |
||||
Proceeds from short-term bank loans |
- |
8,336,466 |
||||
Repayments of short-term bank loans |
(3,254,996) |
(6,701,865) |
||||
Proceeds from notes payable-bank acceptance notes |
6,428,618 |
15,365,252 |
||||
Repayment of notes payable-bank acceptance notes |
(14,810,234) |
(23,211,338) |
||||
Net cash used in financing activities |
(4,114,256) |
(111,484) |
||||
DECREASE IN CASH AND CASH EQUIVALENTS |
(535,674) |
(1,246,136) |
||||
Effect of exchange rate changes on cash |
635,722 |
868,927 |
||||
Cash and cash equivalents at beginning of period |
684,592 |
1,139,451 |
||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD |
$ |
784,640 |
$ |
762,242 |
||
SUPPLEMENTARY CASH FLOW INFORMATION |
||||||
Cash paid during the periods: |
||||||
Income taxes paid |
$ |
67,249 |
$ |
241,679 |
||
Interest paid |
$ |
359,116 |
$ |
572,627 |
||
Non-cash transactions: |
||||||
Appropriation to statutory reserve |
$ |
102,327 |
$ |
64,402 |
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/ossen-innovation-announces-first-quarter-2015-financial-results-300105459.html