omniture

Ossen Innovation Announces First Quarter 2015 Financial Results

Earnings Conference Call is Scheduled for 8:30 am EDT on June 29, 2015
2015-06-27 04:30 1938

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.

  • Revenues decreased by 4.5% to $26.8 million for the three months ended March 31, 2015, mainly due to weakness in rare earth coated products sales and partially offset by strength in zinc coated, plain surfaced and others products.
  • Net income attributable to Ossen Innovation increased by 79.1% to $0.9 million, or $0.04 per share, for the three months ended March 31, 2015, compared to $0.5 million, or $0.02 per share, for the same period of last year.
  • Gross margin improved by more than four points to 13.5% for the three months ended March 31, 2015, due to improvement in gross margin for coated PC steel materials that include both rare earth and zinc coated products and partially offset by decrease in gross margin for plain surface PC strands and others.
  • Operating margin improved by approximately two points to 6.2% for the three months ended March 31, 2015 from 4.3% for the same period of last year.

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
of $2,295,907 and $1,874,330 at March 31, 2015 and
December 31, 2014, respectively


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
authorized,
20,000,000 shares issued; 19,901,959 shares
outstanding as of March 31, 2015 and December 31, 2014,
respectively

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
and December 31, 2013, respectively


(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-
CONTROLLING INTEREST








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
provided by/ (used in) operating activities:



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

Source: Ossen Innovation Co., Ltd.
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