omniture

Fuwei Films Announces Its Unaudited Financial Results for the Third Quarter of 2018

-Teleconference to be Held on Wednesday, November 28, 2018 at 8:00 am ET-
2018-11-28 05:30 400

BEIJING, Nov. 28, 2018 /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 unaudited financial results for the three and nine months ended September 30, 2018.

Third Quarter 2018 Financial Highlights

  • Net sales during the third quarter ended September 30, 2018 increased to RMB86.9 million or US$12.6 million from RMB73.9 million last year.
  • Sales of specialty films were RMB45.3 million (US$6.6 million) or 52.2% of our total quarterly revenues.
  • Gross profit grew to RMB17.1 million (US$2.5 million) from RMB6.7 million a year ago; gross margin was 19.6%t compared to 9.1% last year.
  • Net loss attributable to the Company was RMB1.8 million (US$0.3 million) compared to net loss of RMB12.1 million during the same period in 2017, representing a decrease in loss of RMB10.3 million.
  • Basic and diluted net loss per share was RMB0.57 or US$0.08.

First Nine Months 2018 Financial Highlights

  • Net sales during the first nine months ended September 30, 2018 increased to RMB243.4 million or US$35.4 million from RMB211.9 million last year.
  • Sales of specialty films were RMB109.0 million (US$15.9 million) or 44.8% of total revenues during the period.
  • Gross profit grew to RMB33.3 million (US$4.9 million) from RMB15.5 million a year ago; gross margin was 13.7%t compared to 7.3% last year.
  • Net loss attributable to the Company was RMB18.7 million (US$2.7 million) compared to net loss of RMB35.9 million during the same period in 2017, representing a decrease in loss of RMB17.2 million.
  • Basic and diluted net loss per share was RMB5.73 or US$0.83.

Mr. Zengyong Wang, Chairman and CEO of Fuwei Films, commented, "While we continued to be adversely affected by intense competition and increased supply over demand in China's BOPET market, our net sales and the sales of specialty films increased. We are glad to announce that the sales of specialty films accounted for 52.2% of the total revenues for the third quarter of 2018. We believe the improvement of our financial metrics benefits from continued implementation of differentiation strategy. Looking ahead, encouraged by this positive trend, we believe our commitment to innovation and R&D will enable us to capitalize on market opportunities and as a result expect to realize profits despite challenging industry and economic conditions."

Third Quarter 2018 Results

Net sales during the third quarter ended September 30, 2018 were RMB86.9 million (US$12.6 million), compared to RMB73.9 million during the same period in 2017, representing an increase of RMB13.0 million or 17.6%. The increase of average sales price caused an increase of RMB18.6 million and the sales volume decrease caused a decrease of RMB5.6 million.

In the third quarter of 2018, sales of specialty films were RMB45.3 million (US$6.6 million) or 52.2% of our total revenues as compared to RMB28.5 million or 38.6% in the same period of 2017, which was an increase of RMB16.8 million, or 58.9% as compared to the same period in 2017. The increase in average sales price caused an increase of RMB2.9 million and the increase in the sales volume caused an increase of RMB13.9 million.

The following is a breakdown of commodity and specialty film sales (amounts in thousands):


Three-Month
Period Ended
September 30,
2018

% of Total


Three-Month
Period Ended
September 30,
2017

% of Total


RMB

US$



RMB


Stamping and
transfer film

30,650

4,464

35.3%


29,588

40.0%

Printing film

6,293

916

7.2%


7,068

9.6%

Metallization film

773

112

0.9%


1,874

2.5%

Specialty film

45,325

6,599

52.2%


28,487

38.6%

Base film for other
application

3,832

558

4.4%


6,839

9.3%









86,872

12,649

100.0%


73,857

100.0%

Overseas sales were RMB8.5 million or US$1.2 million, or 9.8% of total revenues, compared with RMB15.2 million or 20.6% of total revenues in the third quarter of 2017. The increase in average sales price caused an increase of RMB2.3 million and the decrease in sales volume resulted in a decrease of RMB9.0 million.

The following is a breakdown of PRC domestic and overseas sales (amounts in thousands):



Three-Month
Period Ended
September 30,
2018

% of Total

Three-Month
Period Ended
September 30,
2017

% of Total



RMB

US$

RMB

Sales in China


78,369

11,411

90.2%

58,614

79.4%

Sales in other
countries


8,503

1,238

9.8%

15,243

20.6%










86,872

12,649

100.0%

73,857

100.0%

Our gross profit was RMB17.1 million (US$2.5 million) for the third quarter ended September 30, 2018, representing a gross margin rate of 19.6%, as compared to a gross margin rate of 9.1% for the same period in 2017. Correspondingly, gross margin rate increased by 10.5 percentage point compared to the same period in 2017 mainly due to the increase of average sales price.

Operating expenses for the third quarter ended September 30, 2018 were RMB17.8 million (US$2.6 million), which was RMB1.5 million, or 9.2% higher than the same period in 2017. This increase was mainly due to increased expenses on research and development.

Net loss attributable to the Company during the third quarter ended September 30, 2018 was RMB1.8 million (US$0.3 million) compared to net loss attributable to the Company of RMB12.1 million during the same period in 2017, representing a decrease in loss of RMB10.3 million.

Basic and diluted net loss per share was RMB0.57 (US$0.08) and RMB3.70 for the three-month period ended September 30, 2018 and 2017, respectively.

Total shareholders' equity was RMB200.26 million or US$29.16 million as of September 30, 2018, compared with RMB221.03 million as of December 31, 2017.

As of September 30, 2018, the Company had 3,265,837 basic and diluted total ordinary shares outstanding.

Nine Months 2018 Results

Net sales during the nine-month period ended September 30, 2018 were RMB243.4 million (US$35.4 million), compared to RMB211.9 million, during the same period in 2017, representing an increase of RMB31.5 million or 14.9%. The increase of average sales price caused an increase of RMB35.6 million and the decrease in the sales volume caused a decrease of RMB4.1 million.

In the nine-month period ended September 30, 2018, sales of specialty films were RMB109.0 million (US$15.9 million) or 44.8% of our total revenues as compared to RMB75.8 million or 35.8% in the same period of 2017, which was an increase of RMB33.2 million, or 43.8% as compared to the same period in 2017. The increase of average sales price caused an increase of RMB2.8 million and the increase in the sales volume caused an increase of RMB30.4 million.

The following is a breakdown of commodity and specialty film sales (amounts in thousands):


Nine-Month
Period Ended
September 30,
2018

% of Total


Nine-Month
Period Ended
September 30,
2017

% of Total


RMB

US$



RMB


Stamping and
transfer film

90,930

13,239

37.3%


83,038

39.2%

Printing film

23,874

3,476

9.8%


18,627

8.8%

Metallization film

2,568

374

1.1%


6,976

3.3%

Specialty film

109,020

15,874

44.8%


75,817

35.8%

Base film for other
applications

17,006

2,476

7.0%


27,409

12.9%









243,398

35,439

100.0%


211,867

100.0%

Overseas sales during the nine months ended September 30, 2018 were RMB36.1 million or US$5.3 million, or 14.8% of total revenues, compared with RMB44.2 million or 20.9% of total revenues in the same period in 2017. This was RMB8.1 million lower than the same period in 2017. The decrease in sales volume resulted in a decrease of RMB12.7 million and the increase of average sales price caused an increase of RMB4.6 million.

The following is a breakdown of PRC domestic and overseas sales (amounts in thousands):



Nine-Month
Period Ended
September 30,
2018

% of Total

Nine-Month
Period Ended
September 30,
2017

% of Total



RMB

US$

RMB

Sales in China


207,291

30,181

85.2%

167,622

79.1%

Sales in other
countries


36,107

5,258

14.8%

44,245

20.9%










243,398

35,439

100.0%

211,867

100.0%

Our gross profit was RMB33.3 million (US$4.9 million) for the first nine months ended September 30, 2018, representing a gross margin of 13.7%, as compared to a gross margin of 7.3% for the same period in 2017. Correspondingly, gross margin increased by 6.4 percentage. Our average product sales prices increased by 17.2% compared to the same period last year while the average cost of goods sold increased by 9.1% compared to the same period last year. Consequently, the amount of increase in sales price was higher than that in cost of goods sold during the nine months ended September 30, 2018 compared with the same period in 2017, which resulted in an increase in our gross profit.

Operating expenses for the nine months ended September 30, 2018 were RMB47.0 million (US$6.8 million), compared to RMB44.3 million in the same period in 2017, which was RMB2.7 million or 6.1% higher than the same period in 2017. This increase is mainly due to increased expenses on research and development.

Conference Call Information

The Company will host a teleconference on Wednesday, November 28, 2018, at 8:00 a.m. ET / 9:00 p.m. Beijing time to discuss the financial results. To participate in the call, please dial +1-877-407-9205 in North America, or +1-201-689-8054 internationally prior to the scheduled start time.

A replay of the call can be accessed via telephone by calling +1-877-481-4010 in North America, or +1-919-882-2331 internationally, and entering the following reply ID: 41237. The replay will be available until December 28, 2018, at 08:00 a.m. ET.

About Fuwei Films

Fuwei Films develops, manufactures and distributes high-quality plastic films using the biaxial oriented stretch technique, also 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 used 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 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. Xiaoli Yu
Investor Relations Officer
Phone: +86-133-615-59266
Email: fuweiIR@fuweifilms.com

In the U.S.:

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

Financial Tables to Follow

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

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF SEPTEMBER 30, 2018 AND DECEMBER 31, 2017

(amounts in thousands except share and per share value)

(Unaudited)



September 30, 2018


December 31, 2017


RMB

US$


RMB

ASSETS

Current assets






Cash and cash equivalents


24,635

3,587


12,963

Restricted cash


60,990

8,880


56,501

Accounts and bills receivable, net


15,574

2,268


20,123

Inventories


25,594

3,727


24,578

Advance to suppliers


8,885

1,294


3,898

Prepayments and other receivables


1,780

259


1,404

Deferred tax assets – current


1,268

185


1,288

Total current assets


138,726

20,200


120,755







Property, plant and equipment, net


342,600

49,884


371,058

Construction in progress


366

53


366

Lease prepayments, net


16,429

2,392


16,830

Advance to suppliers - long term, net


1,542

225


1,570

Deferred tax assets - non current


6,796

990


6,901







Total assets


506,459

73,744


517,480







LIABILITIES AND EQUITY

Current liabilities






Short-term borrowings


64,950

9,457


50,000

Due to related parties


113,602

16,541


151,074

Accounts payables


19,907

2,899


17,470

Notes payable


90,980

13,247


67,900

Advance from customers


8,829

1,286


1,976

Accrued expenses and other payables

5,343

778


5,268

Total current liabilities


303,611

44,208


293,688







Deferred tax liabilities


2,587

377


2,763







Total liabilities


306,198

44,585


296,451







Equity






Shareholders' equity






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


13,323

1,940


13,323

Additional paid-in capital


311,907

45,415


311,907

Statutory reserve


37,441

5,452


37,441

Accumulated deficit


(163,223)

(23,766)


(144,508)

Cumulative translation adjustment


813

118


2,866

Total equity


200,261

29,159


221,029

Total liabilities and equity


506,459

73,744


517,480

 

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

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

FOR THE THREE- AND NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2018 AND 2017

(amounts in thousands except share and per share value)

(Unaudited)




The Three-Month Period Ended
September 30,

The Nine-Month Period Ended
September 30, 



2018


2017

2018


2017


RMB

US$


RMB

RMB

US$


RMB

Net sales


86,872

12,649


73,857

243,398

35,439


211,867

Cost of sales


69,812

10,165


67,145

210,051

30,584


196,373











Gross profit


17,060

2,484


6,712

33,347

4,855


15,494











Operating expenses










Selling expenses


2,960

431


3,410

9,325

1,358


10,617

Administrative expenses


14,874

2,166


12,917

37,667

5,484


33,669

Total operating expenses


17,834

2,597


16,327

46,992

6,842


44,286











Operating loss 


(774)

(113)


(9,615)

(13,645)

(1,987)


(28,792)











Other income (expense)










- Interest income


356

52


103

739

108


607

- Interest expense


(2,769)

(403)


(2,244)

(7,227)

(1,052)


(7,097)

- Others income (expense), net


1,324

193


(374)

1,369

199


(763)











Total other expense


(1,089)

(158)


(2,515)

(5,119)

(745)


(7,253)











Loss before provision for income
taxes


(1,863)

(271)


(12,130)

(18,764)

(2,732)


(36,045)











Income tax benefit


15

2


54

49

7


168











Net loss 


(1,848)

(269)


(12,076)

(18,715)

(2,725)


(35,877)











Other comprehensive loss










- Foreign currency translation
adjustments


24

3


1,206

(2,053)

(299)


993











Comprehensive loss


(1,824)

(266)


(10,870)

(20,768)

(3,024)


(34,884)











Loss per share,
Basic and diluted


(0.57)

(0.08)


(3.70)

(5.73)

(0.83)


(10.99)

Weighted average number ordinary s
hares,
Basic and diluted


3,265,837

3,265,837


3,265,837

3,265,837

3,265,837


3,265,837

 

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

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2018 AND 2017

(amounts in thousands except share and per share value)

(Unaudited)




The Nine-Month Period Ended September 30, 



2018


2017



RMB

US$


RMB

Cash flow from operating activities






Net loss


(18,715)

(2,725)


(35,877)

Adjustments to reconcile net loss to net cash used in operating
activities






- Depreciation of property, plant and equipment


33,271

4,844


32,334

- Amortization of intangible assets


400

58


394

- Deferred income taxes


(51)

(7)


(168)

- Bad debt (recovery) expense


(132)

(19)


714

-Inventory provision


-

-


(57)

Changes in operating assets and liabilities 






- Accounts and bills receivable


4,682

682


5,589

- Inventories


(1,016)

(148)


3,790

- Advance to suppliers


(4,987)

(726)


(5,591)

- Prepaid expenses and other current assets


(551)

(80)


100

- Accounts payable


2,436

355


(1,037)

- Accrued expenses and other payables


(1,031)

(150)


354

- Advance from customers


6,852

998


2,021

- Tax payable


1,270

185


4,693







Net cash provided by (used in) operating activities


22,428

3,267


7,259







Cash flow from investing activities






Purchases of property, plant and equipment


(4,812)

(701)


(4,024)

Restricted cash related to trade finance


(4,489)

(654)


871

Advance to suppliers - non current


28

4


161

Amount change in construction in progress


-

-


65







Net cash used in investing activities


(9,273)

(1,351)


(2,927)







Cash flow from financing activities






Principal payments of bank loans


-

-


(1,675)

Proceeds from short-term bank loans


14,950

2,177


5,000

Proceeds from related party


(37,472)

(5,456)


2,666

Change in notes payable


23,080

3,361


(888)







Net cash provided by financing activities


558

82


5,103







Effect of foreign exchange rate changes


(2,041)

(403)


942







Net increase in cash and cash equivalent


11,672

1,595


10,377







Cash and cash equivalent






At beginning of period/year


12,963

1,992


13,343

At end of period/year


24,635

3,587


23,720







SUPPLEMENTARY DISCLOSURE:






Interest paid


7,227

1,052


7,097

Income tax paid


-

-


-







SUPPLEMENTARY SCHEDULE OF NONCASH INVESTING AND FINANCIAL ACTIVITIES:

Account payable for plant and equipment:


1,029

150


2,040

 

Cision View original content:http://www.prnewswire.com/news-releases/fuwei-films-announces-its-unaudited-financial-results-for-the-third-quarter-of-2018-300755931.html

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