Ossen Innovation Announces Fourth Quarter and Full Year 2015 Financial Results

SHANGHAI, April 22, 2016 /PRNewswire/ -- Ossen Innovation Co., Ltd. ("Ossen Innovation" 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 fourth quarter and full year ended December 31, 2015.

Dr. Liang Tang, Chairman of Ossen Innovation, commented, "Despite 2015 being another difficult year for China's steel industry, as slowing GDP growth and infrastructure buildout, industry-wide overcapacity, and high price volatility continued to plague the steel value chain, we managed to increase our overall sales volume by 16.6%, mostly offsetting the impact of an 18.2% decrease in blended average selling prices of our products. Our margins, including both gross and operating, as well as net profit, also improved in 2015 and reached their highest levels since 2012, highlighting our strong execution amidst challenging macro and industry environment."

"Looking ahead, we expect the Chinese central government to continue to stimulate economic growth by further injecting capital into the economy by funding new infrastructure projects. While we do not believe that the Chinese government will initiate another large scale, comprehensive capital injection, we believe that infrastructure spending will be selectively targeted at developing regions in Central or Western China. Furthermore, through the "One Belt, One Road" initiatives, investments are expected to be made during the next decade to construct new bridges, highways, and railroads. In addition, the Asian Infrastructure Investment Bank launched in December 2015 could pave the way for new infrastructure projects outside of China and create new bidding opportunities for us. In 2016, we expect the market for our products to recover gradually as steel industry fundamentals improve over time thanks to the central government's continuing efforts to curb excess capacity. We also expect to do well in the Japanese market as we are one of the two suppliers to supply plain surface prestressed steel products to a major Japanese company who won the bid for the construction of the Tokyo New National Stadium for the 2020 Tokyo Olympics," concluded Dr. Tang.

Twelve Months Ended December 31, 2015 Financial Results

For the twelve months ended December 31, 2015, revenues decreased by $5.7 million, or 4.6%, to $117.9 million from $123.6 million for the same period of last year, mainly due to decrease in average selling price for all our products and partially offset in sales volume for both coated PC steel materials and plain surface PC strands and others. The sales of coated PC steel materials, including both rare earth and zinc coated products, decreased by $12.1 million, or 11.3%, to $95.5 million and accounted for 81% of total sales for the twelve months ended December 31, 2015 from $107.6 million, or 87% of total sales, for the same period of last year. This decrease was mainly due to decrease in average selling price and partially offset by increase in sales volumes for both rare earth and zinc coated products. Sales of rare earth coated products decreased the most by $12.6 million, or 12.9%, to $85.0 million for the twelve months ended December 31, 2015 from $97.6 million for the same period of last year. Sales of zinc coated products increased by $0.4 million, or 4.3%, to $10.5 million for the twelve months ended December 31, 2015 from $10.0 million for the same period of last year. The sales of plain surface PC strands and others increased by $6.5 million, or 40.5%, to $22.4 million and accounted for 19% of total sales for the twelve months ended December 31, 2015 from $16.0 million, or 13% of total sales, for the same period of last year.

Gross profit increased by $2.4 million, or 17.9%, to $15.7 million for the twelve months ended December 31, 2015 from $13.3 million for the same period of last year. Gross margin was 13.3% for the twelve months ended December 31, 2015, compared to 10.8% for the same period of last year. The increase in gross profit and gross margin were mainly due to low raw materials costs and change in product mix with increased contribution from the higher margin plain surfaced PC strands and others as well as zinc coated products. Gross margins for rare earth and zinc coated products were 11.8% and 19.7%, respectively, for the twelve months ended December 31, 2015, compared to 9.8% and 18.7%, respectively, for the same period of last year. Gross margin for plain surfaced PC Strands and others was 16.2% for the twelve months ended December 31, 2015, compared to 11.7% for the same period of last year.

Selling expenses increased by $0.2 million, or 27.7%, to $1.0 million for the twelve months ended December 31, 2015 from $0.8 million for the same period of last year. General and administrative expenses decreased by $1.9 million, or 29.4%, to $4.5 million for the twelve months ended December 31, 2015 from $6.3 million for the same period of last year. As a result, total operating expenses decreased by $1.6 million, or 23.2%, to $5.5 million for the twelve months ended December 31, 2015 from $7.1 million for the same period of last year.

Operating income was $10.2 million, or 8.7% of total revenues, for the twelve months ended December 31, 2015, compared to $6.2 million, or 5.0% of total revenues, for the same period of last year.

Net income increased by $2.5 million, or 59.9%, to $6.6 million for the twelve months ended December 31, 2015 from $4.1 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 $2.0 million, or 52.8%, to $5.9 million for the twelve months ended December 31, 2015 from $3.9 million for the same period of last year. Earnings per share, both basic and diluted, were $0.30 for the twelve months ended December 31, 2015, compared to $0.19 for the same period of last year.

Due to a depreciation of the RMB as compared to the U.S. dollar in 2015, our comprehensive income was $67,334, reflecting a foreign currency translation loss of approximately $5.8 million, unrelated to our operations.

Three Months Ended December 31, 2015 Financial Results

For the three months ended December 31, 2015, revenues increased by $3.5 million, or 11.1%, to $35.3 million from $31.8 million for the same period of last year. This increase was primarily due to increased revenue contribution from plain surface PC strands and zinc coated products and partially offset by decrease in sales from rare earth coated products. The sales of coated PC steel materials, including both rare earth and zinc coated products, increased by $0.7 million, or 2.5%, to $27.4 million and accounted for 77% of total sales for the three months ended December 31, 2015 from $26.7 million, or 84% of total sales, for the same period of last year. This increase was mainly due to increase in sales volume for both rare earth and zinc coated products and partially offset by decrease in average selling price of zinc coated products. Sales of rare earth coated products decreased by $2.6 million, or 10.1%, to $23.1 million for the three months ended December 31, 2015 from $25.7 million for the same period of last year. Sales of zinc coated products increased by $3.3 million, or 323.5%, to $4.3 million for the three months ended December 31, 2015 from $1.0 million for the same period of last year. Sales of plain surface PC strands and others increased by $2.9 million, or 56.9%, to $7.9 million and accounted for 23% of total sales for the three months ended December 31, 2015 from $5.1 million, or 16% of total sales, for the same period of last year. This increase was mainly due to increase in sales volume and partially offset by decrease in average selling price for plain surfaced PC strands and other products.

Gross profit decreased by $0.7 million, or 13.3%, to $3.9 million for the three months ended December 31, 2015 from $4.5 million for the same period of last year. Gross margin decreased to 10.9% for the three months ended December 31, 2015 from 14.3% for the same period of last year. Gross margins for rare earth and zinc coated products were 9.5% and 14.1%, respectively, for the three months ended December 31, 2015, compared to 15.3% and negative 11.1%, respectively, for the same period of last year. Gross margin for plain surface PC strands and others was 13.4% for the three months ended December 31, 2015, compared to 14.0% for the same period of last year.

Selling expenses increased by $0.1 million, or 50.0%, to $0.3 million for the three months ended December 31, 2015 from $0.2 million for the same period of last year. General and administrative expenses decreased by $0.4 million, or 17.4%, to $1.9 million for the three months ended December 31, 2015 from $2.3 million for the same period of last year. As a result, total operating expenses decreased by $0.3 million, or 12.0%, to $2.2 million for the three months ended December 31, 2015 from $2.5 million for the same period of last year.

Operating income was $1.7 million, or 4.8% of total revenues, for the three months ended December 31, 2015, compared to $2.0 million, or 6.3% of total revenues, for the same period of last year.

Net income decreased by $0.9 million, or 62.4%, to $0.6 million for the three months ended December 31, 2015 from $1.5 million for the same period of last year.

After deducting net income attributable to non-controlling interest, net income attributable to Ossen Innovation decreased by $0.9 million, or 67.9%, to $0.5 million for the three months ended December 31, 2015 from $1.4 million for the same period of last year. Earnings per share, both basic and diluted, were $0.02 for the three months ended December 31, 2015, compared to $0.07 for the same period of last year.

Balance Sheet and Cash Flows

The Company had $9.6 million of cash and restricted cash as of December 31, 2015, compared to $18.3 million at December 31, 2014. Notes receivable were $8.0 million as of December 31, 2015, compared to $9.9 million at December 31, 2014. Accounts receivable were $43.2 million as of December 31, 2015, compared to $53.8 million at December 31, 2014. The average days of sales of outstanding (DSO) were 150 days for the twelve months ended December 31, 2015, compared to 151 days for the year of 2014. The balance of prepayment to suppliers for raw materials totaled $55.7 million as of December 31, 2015, compared to $56.3 million at December 31, 2014. The Company had inventories of $27.3 million as of December 31, 2015, compared to $20.1 million at the end of 2014. Total working capital was $94.7 million as of December 31, 2015, compared to $108.0 million at December 31, 2014.

Net cash provided by operating activities was $12.4 million for the twelve months ended December 31, 2015, compared to $1.8 million for the same period of last year. Net cash used in investing activities was $0.03 million for the twelve months ended December 31, 2015, compared to $0.08 million for the same period of last year. Net cash used in financing activities was $4.4 million for the twelve months ended December 31, 2015, compared to $3.5 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 Fourth Quarter 2015 Earnings Conference Call" or be prepared to utilize the conference ID.

Please dial in at least 10 minutes before the call to ensure timely participation. A playback will be available through April 30, 2016. To listen, please call +1-855-452-5696 within the United States or +1-646-254-3697 if calling internationally. Utilize the pass code 93675079 for the replay.

This call is being webcast and can be accessed by clicking on this link: http://edge.media-server.com/m/p/c8epmi3e

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 Ma'anshan, 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

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/ossen-innovation-announces-fourth-quarter-and-full-year-2015-financial-results-300255625.html