omniture

Fuwei Films Announces Fourth Quarter and Full Year 2019 Financial Results

- Teleconference to be Held on Wednesday, April 29, 2020, at 9:00 a.m. ET -
2020-04-29 04:15 6791

BEIJING, April 29, 2020 /PRNewswire/ -- 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 financial results for the fourth quarter and full year ended December 31, 2019.

4Q 2019 Highlights

  • Net revenues were RMB86.8 million or US$12.5 million, down 3.7% year-over-year.
  • Sales of specialty films were RMB47.7 million or US$6.9 million, up 19.8% year-over-year.
  • Gross margin was 35.7%, compared to 23.7% a year ago.
  • Basic and diluted profit per share was RMB3.17 or US$0.46, compared to loss per share of RMB1.06 a year ago.

Full Year 2019 Highlights

  • Net revenues were RMB335.6 million or US$48.2 million, up 0.6% year-over-year.
  • Sales of specialty films were RMB162.4 million or US$23.3 million, up 9.1% year-over-year. Gross margin was 24.9%, compared to 16.4% a year ago.
  • Basic and diluted profit per share was RMB3.48 or US$0.50, compared to loss per share of RMB6.79 a year ago.
  • Net cash provided by operating activities was RMB54.4 million or US$7.8 million, compared to RMB25.4 million a year ago.

"Despite persisting oversupply in the BOPET plastic films market, our revenues and gross margins continued to grow. Sales of specialty films increased by 9.1% year-over-year and accounted for 48.4% of our total revenues in 2019. Our gross margin increased by 8.5 percentage points to 24.9% for the year of 2019, as compared to 16.4% in 2018. We believe that our focus on innovation will enable the Company to expand end-user product applications and attract new clients and expand relationships with existing customers. We are encouraged by positive trends in revenues and gross margins which we expect to enable us to better navigate the industrial and economic landscape ahead," commented Mr. Zengyong Wang, CEO and Chairman of the Company.

Fourth Quarter 2019 Results

Revenues for the fourth quarter of 2019 were RMB86.8 million or US$12.5 million, compared with RMB90.1 million in the fourth quarter of 2018, a decrease of RMB3.3 million, or 3.7%. Sales volume accounted for an increase of RMB3.2 million while the decrease of average sales price caused a decrease of RMB6.5 million.

Sales of specialty films for the fourth quarter of 2019 were RMB47.7 million or US$6.9 million, or 54.9% of total revenues, compared with RMB39.8 million or 44.1% of total revenue in the fourth quarter of 2018. Sales volume accounted for an increase of RMB10.9 million while the decrease of average sales price caused a decrease of RMB3.0 million.

The following is a breakdown of commodity and specialty film sales for the three-month periods ended December 31, 2019 and 2018 (amounts in thousands):

 



Three months period ended



December 31, 2019

% of Total

December 31, 2018

% of Total



RMB

US$

RMB

Stamping and transfer film


30,005

4,309

34.6%

38,617

42.9%

Printing film


5,265

756

6.1%

6,813

7.6%

Metallized film


1,682

242

1.9%

1,805

2.0%

Specialty film


47,720

6,855

54.9%

39,781

44.1%

Base film for other applications


2,171

312

2.5%

3,108

3.4%








Total


86,843

12,474

100%

90,124

100%

 

Sales in China for the fourth quarter of 2019 were RMB81.4 million, or US$11.7 million, or 93.8% of total revenues, compared with RMB80.8 million or 89.7% of total revenues in the fourth quarter of 2018. Sales volume accounted for an increase of RMB7.0 million while the decrease of average sales price caused a decrease of RMB6.4 million.

Overseas sales for the fourth quarter of 2019 were RMB5.4 million or US$0.8 million, or 6.2% of total revenues, compared with RMB9.3 million or 10.3% of total revenues in the fourth quarter of 2018.

The following is a breakdown of domestic versus overseas sales for the three-month periods ended December 31, 2019 and 2018 (amounts in thousands):

 



Three-month period ended

 



December 31, 2019

% of Total

December 31, 2018

% of Total



RMB

US$

RMB

Sales in China


81,442

11,698

93.8%

80,837

89.7%

Sales in other countries


5,401

776

6.2%

9,287

10.3%








Total


86,843

12,474

100%

90,124

100%

 

Gross profit for the fourth quarter of 2019 was RMB31.0 million or US$4.5 million, representing a gross margin of 35.7%, compared with a gross profit of RMB21.3 million, representing a gross margin of 23.7% in the fourth quarter of 2018.

Operating expenses for the fourth quarter of 2019 were RMB15.7 million or US$2.3 million compared with RMB19.0 million in the fourth quarter of 2018.

Net profit attributable to the Company for the fourth quarter of 2019 was RMB10.3 million or US$1.5 million, compared with net loss attributable to the Company of RMB3.5 million in the fourth quarter of 2018.

Basic and diluted profit per share was RMB3.17 or US$0.46, compared with basic and diluted loss per share of RMB1.06 in the fourth quarter of 2018.

2019 Full Year Results

During the fiscal year ended December 31, 2019, net revenues were RMB335.6 million (US$48.2 million), compared to RMB333.5 million in 2018, representing an increase of RMB2.1 million or 0.6%. The decrease in average sales price caused a decrease of RMB0.8 million, which was more than offset by the increase in sales volume factor caused an increase of RMB2.9 million.

In 2019, sales of specialty films were RMB162.4 million (US$23.3 million) or 48.4% of our total revenues as compared to RMB148.8 million or 44.6% in 2018, which was an increase of RMB13.6 million, or 9.1% higher than 2018. The increase of sales volume led to an increase of RMB14.3 million, offset in part by the decline in average sales price which caused a decrease of RMB0.7 million.

Overseas sales were RMB47.6 million (US$6.8 million) or 14.2% of total revenues, compared with RMB45.4 million or 13.6% of total revenues in 2018. The increase of average sales price caused an increase of RMB0.6 million and the increase of sales volume caused an increase of RMB1.6 million.

The following is a breakdown of domestic versus overseas sales for the periods ended December 31, 2019 and 2018 (amounts in thousands):

 


                For the year ended December 31




 

2019

% of Total

 

 

2018

% of Total





RMB

US$


           RMB




Sales in China


288,066

41,378

85.8%

288,128

86.4%


Sales in other countries


47,554

6,831

14.2%

45,394

13.6%




335,620

48,209

100.0%

333,522

100.0%














 

Our gross profit for the year ended December 31, 2019 was RMB83.6 million (US$12.0 million), compared to RMB 54.7 million (US$8.0 million) in 2018. Our average unit sales price decreased by 0.2% compared to last year. The unit sales cost decreased by 10.4% due to the price decrease of main raw materials. Our gross margin was 24.9% for the year of 2019, as compared to a gross margin of 16.4% in 2018.

Our operating expenses during the year ended December 31, 2019 were RMB60.5 million, a decrease of RMB5.5 million, or 8.3%, as compared to 2018. The decrease was mainly due to the reduction in expense of R&D.

Net profit attributable to the Company for full year 2019 was RMB11.4 million or US$1.6 million, compared with a net loss of RMB22.2 million in 2018.

Basic and diluted earnings per share for the year ended December 31, 2019 was RMB3.48 or US$0.50.

Net cash provided by operating activities was RMB54.4 million for the year ended December 31, 2019 as compared to net cash provided by operating activities of RMB25.4 million for the year ended December 31, 2018.

Cash and cash equivalents on December 31, 2019 was RMB60.9 million or US$8.7 million, compared with RMB8.9 million as of December 31, 2018.

Conference Call 

The Company will host a teleconference on Wednesday, April 29, 2020, at 9:00 a.m. ET / 9:00 p.m. Beijing time to discuss the financial results. To participate in the call, please dial +1-844-369-8770 in North America, or +1-862-298-0840 internationally, approximately 5 minutes prior to the scheduled start time.

A replay of the call can also be accessed via telephone by calling +1-877-481-4010 in North America, or +1-919-882-2331 internationally, and entering the following Conference ID: 34138. The replay will be available until May 13, 2020.

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's 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 significant competition in the BOPET film industry, especially the significant oversupply of BOPET films resulting from the rapid growth of the Chinese BOPET industry capacity, changes in the international market and trade barriers, especially the adverse impact of the antidumping investigation and imposition of an anti-dumping duty on imports of the BOPET films originating from the People's Republic of China ("China") conducted by certain main importing countries; fluctuations of RMB exchange rate, the reduce in demand for the Company's products or the loss of main customers which may result in the decrease of sales, and negatively influencing the Company's financial performance, uncertainty as to the future profitability, uncertainty as to the Company's ability to successfully obtain additional funds to meet the working capital needs of the new BOPET production line, uncertainty as to the Company's ability to continuously develop new BOPET film products to be produced by the third production line and keep up with changes in BOPET film technology, risks associated with possible defects and errors in its products including complaints and claims from clients, uncertainty as to its ability to protect and enforce its intellectual property rights, uncertainty as to its ability to attract and retain qualified executives and personnel, and uncertainty in acquiring raw materials on time and on acceptable terms, particularly in light of the volatility in the prices of petroleum products in recent years, instability of power and energy supply, uncertainty around coronavirus (COVID-19) outbreak and the effects of government and other measures seeking to contain its spread; risks related to an economic downturn or recession in the United States and in other countries around the world; and changes in political, business, and economic conditions, and the uncertainty regarding the future operation of the Company in connection with the changes in the labor law in China, the measures taken by the Chinese government to save energy and reduce emissions, and the complaints from nearby residents and local government about the noise caused by our production as well as the uncertainty of the impact of major shareholder transfer that have substantial influence over the Company and the Company's business operation including possible overlap of our BOPET products, customers and market orientation with an BOPET film manufacturer, which is controlled by the same individual who has control over the shares of our major shareholder. 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. Xiaoli Yu 
Investor Relations Manager 
Phone: +86-133-615-59266 
Email: fuweiIR@fuweifilms.com

In the U.S.:

Shiwei Yin
Investor Relations
Grayling
Phone: +1-646-284-9474
Email: shiwei.yin@grayling.com

Financial Tables Follow

 

FUWEI FILMS (HOLDINGS) CO., LTD and SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

As of December 31, 2019 and 2018

(amounts in thousands, except share and per share data)




December 31, 2019


December 31, 2018


RMB

US$


RMB

ASSETS

Current assets






Cash and cash equivalents


60,871

8,744


8,908

Restricted cash


25,500

3,663


38,000

Accounts and bills receivable, net


26,960

3,873


22,627

Inventories


23,584

3,388


24,675

Advance to suppliers


6,277

902


5,694

Prepayments and other receivables


1,058

152


1,068

Deferred tax assets – current


1,266

182


1,195

Total current assets


145,516

20,904


102,167







Property, plant and equipment, net


302,642

43,472


331,168

Construction in progress


-

-


366

Lease prepayments, net


15,762

2,264


16,296

Advance to suppliers - long term, net


1,542

221


1,542

Deferred tax assets - non current


509

73


3,143







Total assets


465,971

66,934


454,682







LIABILITIES AND EQUITY

Current liabilities






Short-term borrowings


65,000

9,337


64,950

Due to related parties


119,297

17,136


114,692

Accounts payables


19,532

2,806


20,750

Notes payable


41,000

5,889


48,000

Advance from customers


5,204

748


1,859

Accrued expenses and other payables


5,454

783


5,072

Total current liabilities


255,487

36,699


255,323

Deferred tax liabilities


2,290

329


2,528







Total liabilities


257,777

37,028


257,851







Equity






Shareholders' equity












Registered capital (of US$0.519008 par value; 5,000,000
shares authorized; 3,265,837 issued and outstanding)


13,323

1,914


13,323







Additional paid-in capital


311,907

44,803


311,907

Statutory reserve


37,441

5,378


37,441

Retained earnings


(155,317)

(22,310)


(166,680)

Cumulative translation adjustment


840

121


840

Total shareholders' equity


208,194

29,906


196,831







Total equity


208,194

29,906


196,831

Total liabilities and equity


465,971

66,934


454,682








 

 

FUWEI FILMS (HOLDINGS) CO., LTD and SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

For the Years Ended December 31, 2019, 2018 and 2017

(amounts in thousands, except share and per share data)




The Year Ended December 31,






2019

2018

2017


       RMB

        US$

       RMB

       RMB

Net sales


335,620

48,209

333,522

290,706

Cost of sales


252,010

36,199

278,834

263,606







Gross profit


83,610

12,010

54,688

27,100







Operating expenses:






Selling expenses


13,721

1,971

13,363

14,520

Administrative expenses


46,794

6,722

52,593

46,514

Loss on impairment of assets


-

-

-

-

Total operating expenses


60,515

8,693

65,956

61,034







Operating income (loss)


23,095

3,317

(11,268)

(33,934)







Other income (expense):






- Interest income


1,106

159

1,225

725

- Interest expense


(8,892)

(1,277)

(9,766)

(9,453)

- Others income (expense), net


(1,621)

(233)

1,255

(2,533)

Total other income (expense)


(9,407)

(1,351)

(7,286)

(11,261)







Income (loss) before provision for income taxes


13,688

1,966

(18,554)

(45,195)







Income tax (expense) benefit 


(2,325)

(334)

(3,618)

(808)







Net income (loss) 


11,363

1,632

(22,172)

(46,003)







Net  income (loss) attributable to noncontrolling interests


-

-

-

-

Net income (loss) attributable to the Company


11,363

1,632

(22,172)

(46,003)







Other comprehensive income (loss):






- Foreign currency translation adjustments attributable to
noncontrolling interest


-

-

-

-

- Foreign currency translation adjustments attributable to
the Company


-

-

(2,026)

1,821







Comprehensive income (loss) attributable to
non-controlling interest


-

-

-

-

Comprehensive income (loss) attribute to the Company


11,363

1,632

(24,198)

(44,182)







Net earnings (loss) per share,
Basic and diluted


3.48

0.50

(6.79)

(14.09)

Weighted average number ordinary shares,
Basic and diluted 


3,265,837

3,265,837

3,265,837

3,265,837

 

 

FUWEI FILMS (HOLDINGS) CO., LTD and SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Years Ended December 31, 2019, 2018 and 2017

(Amounts in thousands)




The Years Ended December 31,






2019


2018

2017



    RMB

   US$


    RMB

    RMB

Cash flow from operating activities







Net loss


11,363

1,632


(22,172)

(46,003)

Adjustments to reconcile net loss to net cash







provided by (used in) operating activities














- Loss on Long-term assets impairment


-

-


-

-

- Depreciation of property, plant and equipment


41,451

5,954


44,509

42,877

- Amortization of intangible assets


534

77


534

528

- Deferred income taxes (benefit)


2,325

334


3,617

808

- Bad debt (recovery) expense


(1,014)

(146)


(620)

(746)

- Inventory provision


1,489

214


-

1,340

Changes in operating assets and liabilities 







- Investment income recorded on Fuwei Holdings' book


-

-


-

-

- Accounts and bills receivable


(3,319)

(477)


(1,884)

10,075

- Inventories


(399)

(57)


(96)

(766)

- Advance to suppliers


(583)

(84)


(1,796)

2,145

- Prepaid expenses and other current assets


10

1


161

75

- Accounts payable


(1,217)

(174)


3,278

(3,110)

- Accrued expenses and other payables


(302)

(43)


(850)

128

- Advance from customers


3,344

480


(117)

(1,533)

- Tax payable


684

98


817

5,009








Net cash provided by (used in) operating activities


54,366

7,809


25,381

10,827








Cash flow from investing activities







Purchases of property, plant and equipment


(12,925)

(1,857)


(4,619)

(3,282)

Advanced to suppliers - non current


-

-


28

291

Amount change in construction in progress


366

53


-

65








Deposit for purchase


-

-


-

-








Net cash used in (provided by) investing activities


(12,559)

(1,804)


(4,591)

(2,926)








Cash flow from financing activities







Principal payments of bank loans


-

-


-

(3,300)

Proceeds from short-term bank loans


50

7


14,950

(10,000)

Proceeds from related party


4,606

662


(36,382)

19,327

Payment of capital lease obligation


-

-


-

-

Change in notes payable


(7,000)

(1,005)


(19,900)

(32,988)















Net cash provided by (used in) financing activities


(2,344)

(336)


(41,332)

(26,961)








Effect of foreign exchange rate changes


-

(85)


(2,014)

1,760








Net increase (decrease) in cash and cash equivalent, restricted cash


39,463

5,584


(22,556)

(17,300)








Cash and cash equivalent,and  restricted cash







At beginning of period/year


46,908

6,823


69,464

86,764

At end of period/year


86,371

12,407


46,908

69,464








SUPPLEMENTARY DISCLOSURE:







Interest paid


8,892

1,277


9,766

9,453

Income tax paid


-

-


-

-








SUPPLEMENTARY SCHEDULE OF NONCASH INVESTING AND
FINANCIAL ACTIVITIES:







Account payable for plant and equipment:


1,010

145


1,010

1,374

Obligations for acquired equipment under capital lease:


-

-


-

-

 

 

Cision View original content:http://www.prnewswire.com/news-releases/fuwei-films-announces-fourth-quarter-and-full-year-2019-financial-results-301047988.html

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