omniture

Ossen Innovation Announces Full Year 2019 Financial Results

2020-05-19 18:30 8400

SHANGHAI, May 19, 2020 /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 fiscal year ended December 31, 2019.

"Despite 2019 being another challenging year for China's steel industry, as slowing GDP growth and high price volatility continued to plague the steel value chain, we managed to continue improving our operation results by focusing on high margin rare earth coated products," commented Dr. Liang Tang, Chairman of Ossen Innovation. "We are very pleased with the progress and accomplishments our entire team made during the 2019 calendar year."

"We would like to extend our gratitude to medical personnel, health officials and volunteers in China who worked tirelessly to respond to the COVID-19 pandemic," continued Dr. Tang. "Our manufacturing facilities in China remain fully operational since March 9, 2020 and we have maintained high standards for safety and sanitation in our manufacturing facilities. In response to the impact of the COVID-19 pandemic, China's central and local governments have announced key infrastructure project investment plans for 2020. The total investment is approximately $3.6 trillion and the planned investment in 2020 is approximately $500 billion. As the Company's business is closely connected with the infrastructure investment in China, we believe that these developments should create new opportunities for us in 2020 and beyond."

Twelve months Ended December 31, 2019 Financial Results



For the Twelve Months Ended December 31,

($ millions, except per share data)


2019


2018


% Change

Revenues


$138.9


$136.1


2.1%

Gross profit


$22.4


$20.5


9.0%

Gross margin


16.1%


15.1%


1.0%

Operating income


$15.8


$14.9


6.1%

Operating margin


11.4%


11.0%


0.4%

Net income attributable to Ossen Innovation


$11.1


$10.4


6.7%

EPS (per ordinary share)


$0.56


$0.52


7.7%















EPS (per ADS*)


$1.68


$1.56


7.7%

* One ADS equals to three ordinary shares.

For the twelve months ended December 31, 2019, revenues increased by $2.8 million, or 2.1%, to $138.9 million from $136.1 million for 2018. The increase in revenues during the year ended December 31, 2019 was mainly attributable to a 3.8% increase in sales of rare earth coated PC wires and PC strands and a 151.8% increase in other products, partially offset by a 41.4% decrease in plain surface products and a 2.9% decrease in zinc coated PC wires and PC strands.

Gross profit increased by $1.9 million, or 9.0%, to $22.4 million for the twelve months ended December 31, 2019 from $20.5 million for the same period of last year. Gross margin increased by 100 basis points to 16.1% for the twelve months ended December 31, 2019 from 15.1% for the same period of last year. The increase of gross margin was primarily due to the improvement of the profitability of rare earth coated PC wires and PC strands.

Selling expenses increased by $0.1 million, or 9.2%, to $0.4 million for the twelve months ended December 31, 2019 from $0.3 million for the same period of last year. This increase was primarily due to higher transportation cost for domestic sales in 2019, partially offset by lower freight and sales commission for international sales. General and administrative expenses increase by $0.9 million, or 16.9%, to $6.2 million for the twelve months ended December 31, 2019 from $5.3 million for the same period of last year, mainly due to higher research and development cost in 2019. As a result, total operating expenses increased by $0.9 million, or 16.5%, to $6.5 million for the twelve months ended December 31, 2019 from $5.6 million for the same period of last year.

Operating income increased by $0.9 million, or 6.1%, to $15.8 million for the twelve months ended December 31, 2019 from $14.9 million for the same period of last year. This increase was primarily due to higher sales and gross profit. Operating margin was 11.4% for the twelve months ended December 31, 2019, compared to 11.0% for the same period of last year.

Net income increased by $0.8 million, or 7.4%, to $12.2 million for the twelve months ended December 31, 2019 from $11.4 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 $0.7 million, or 6.7%, to $11.1 million for the twelve months ended December 31, 2019 from $10.4 million for the same period of last year. Earnings per ordinary share, both basic and diluted, were $0.56 for the twelve months ended December 31, 2019, compared to $0.52 for the same period of last year. Earnings per ADS (one ADS equals to three ordinary shares), both basic and diluted, were $1.68 and $1.56 for 2019 and 2018, respectively.

Impact of COVID-19

From the beginning of 2020 until early March 2020, due to the widespread of the COVID-19 pandemic in China, many cities imposed travel and work restrictions in efforts to curb the spread of COVID-19. As a result, the factories situated in Jiujiang and Maanshan were temporarily closed after the Chinese New Year holiday until the second week of March 2020, and the supply of the raw materials was affected in February 2020. Since then, the factories are fully operational. Due to the travel and work restrictions in order to curb the widespread of COVID-19 in China since the end of January 2020, many cities in China were under lockdown. As a result, production and sales orders were delayed. Restrictions on the movement of people and goods currently remain in place in certain regions from time to time as the COVID-19 pandemic situation fluctuates, which requires the Company to adapt certain of the sales and delivery processes. This may affect the overall financial performance in 2020, although the Company cannot quantify the overall impact for the time being. With the anticipated completion of the construction of new production facility in Jiujiang, Jiangxi Province in 2020, it is expected that the Company's business scale could be further increased, subject to any future developments relating to COVID-19 and its aftermath.

Balance Sheet and Cash Flows

As of December 31, 2019, the Company had cash and restricted cash of $2.6 million, compared to $3.4 million at December 31, 2018. Accounts receivable were $72.5 million as of December 31, 2019, compared to $60.6 million at December 31, 2018. The average days of sales of outstanding (DSO) were 175 days for the twelve months ended December 31, 2019, compared to 150 days for the year 2018. The balance of prepayment to suppliers for raw materials totaled $74.4 million as of December 31, 2019, compared to $70.0 million at December 31, 2018. The Company had inventories of $15.1 million as of December 31, 2019, compared to $17.2 million at the end of 2018. Total working capital was $130.2 million as of December 31, 2019, compared to $113.1 million at December 31, 2018.

Net cash provided by operating activities was $0.4 million for the twelve months ended December 31, 2019, compared to $7.6 million of net cash provided by operating activities for the same period of last year. This was mainly due to a decrease in inventories, an increase in customer deposits, and an increase in due to related party, partially offset by an increase in accounts receivable, an increase in advance to suppliers,  a decrease in customer deposits from related parties, and a decrease in due to shareholder. Net cash used in investing activities was $139,795 for the twelve months ended December 31, 2019, compared to $72,305 for the same period of last year. Net cash provided in financing activities was $2.9 million for the twelve months ended December 31, 2019, compared to $0.7 million of net cash used in financing activities for the same period of last year. This was the result of an increase in proceeds from short-term bank loans and an increase in proceeds from long-term bank loans, partially offset by an increase in repayments of short-term bank loans and an increase in repayments of long-term bank loans.

Recent Developments

On May 28, 2019, Pujiang International Group Limited, the parent entity of Acme which owns approximately 65.9% of Ossen Innovation Co., Ltd outstanding ordinary shares, was successfully listed and commenced trading on the main board of the Hong Kong Stock Exchange.

On November 26, 2019, the Company announced the completion of its 2018 annual general meeting of shareholders. At the Annual Meeting, the Company's shareholders re-elected six directors, Dr. Liang Tang, Mr. Wei Hua, Mr. Junhong Li, Ms. Yingli Pan, and Mr. Zhongcai Wu to the Board of Directors and re-appointed BDO China Shu Lun Pan Certified Public Accountants LLP as the Company's independent registered accounting firm for the fiscal year ending December 31, 2019.

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:

Wei Hua, Chief Executive Officer
Email: int.tr@ossengroup.com
Phone: +86-21-6888-8886
Web: www.osseninnovation.com

Investor Relations
GIC IR
Phone: +1-917-207-2173
Email: info@goldenir.com

 


 

OSSEN INNOVATION CO., LTD AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2019 AND 2018

 


December 31,


2019


2018

ASSETS






Current assets






Cash and cash equivalents

$

2,576,677


$

3,444,421

Restricted cash


6,025,718



4,070,655

Accounts receivable, net of allowance for doubtful accounts of $1,253,571 and $939,535 at December 31, 2019 and 2018, respectively


72,544,202



60,586,869

Inventories


15,100,328



17,177,926

Advance to suppliers


74,391,886



69,986,656

Other current assets


24,643



26,496

Accounts receivable - related parties


536,358



-

  Total current assets


171,199,812



155,293,023

Property, plant and equipment, net


2,948,264



3,371,387

Land use rights, net


3,288,959



3,422,365

Deferred tax assets


206,002



159,136

TOTAL ASSETS

$

177,643,037


$

162,245,911







 

 

 


OSSEN INNOVATION CO., LTD AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2019 AND 2018 (Continued)


December 31,


2019


2018







Current Liabilities






Notes payable-bank acceptance notes

$

8,895,107


$

8,722,832

Short-term bank loans


17,072,867



13,593,080

Accounts payables


951,358



289,954

Customer deposits


3,131,916



283,869

Taxes payable


1,417,176



1,547,882

Other payables and accrued liabilities


3,875,529



3,980,565

Customer deposits – related parties


3,358,897



4,800,384

Due to shareholder


-



1,695,259

Due to related parties


2,297,639



-

Long-term bank loans – current portion


-



7,269,027

  Total current liabilities


41,000,489



42,182,852

Long-term bank loans


6,097,453



-

TOTAL LIABILITIES


47,097,942



42,182,852







EQUITY






Shareholders' Equity






Ordinary shares, $0.01 par value: 100,000,000 shares authorized; 20,000,000 shares issued; 19,791,110 shares outstanding as both of December 31, 2019 and 2018


200,000



200,000

Additional paid-in capital


33,971,455



33,971,455

Statutory reserve


9,043,010



7,764,813

Retained earnings


78,484,535



68,673,562

Treasury stock, at cost: 208,890 shares as of December 31, 2019 and 2018


(192,153)



(192,153)

Accumulated other comprehensive loss


(5,789,815)



(4,044,969)

TOTAL SHAREHOLDERS' EQUITY


115,717,032



106,372,708

Non-controlling interest


14,828,063



13,690,351

TOTAL EQUITY


130,545,095



120,063,059

 

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$

177,643,037


$

162,245,911







OSSEN INNOVATION CO., LTD AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2019, 2018 AND 2017


Year Ended December 31,


2019


2018


2017










REVENUES

$

138,900,357


$

136,104,867


$

132,375,915

COST OF GOODS SOLD


116,541,972



115,585,803



117,721,799

GROSS PROFIT


22,358,385



20,519,064



14,654,116

Selling expenses


357,426



327,365



598,832

General and administrative expenses


6,155,316



5,263,914



6,002,121

  Total Operating Expenses


6,512,742



5,591,279



6,600,953

INCOME FROM OPERATIONS


15,845,643



14,927,785



8,053,163

Financial expenses, net


(2,382,405)



(1,621,486)



(1,610,337)

Other income, net


297,438



208,071



147,108

INCOME BEFORE INCOME TAX


13,760,676



13,514,370



6,589,934

INCOME TAX


(1,533,794)



(2,129,387)



(691,556)

NET INCOME


12,226,882



11,384,983



5,898,378

LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST









1,137,712


1,005,530


553,067

NET INCOME ATTRIBUTABLE TO OSSEN INNOVATION CO.,LTD
AND SUBSIDIARIES









11,089,170


10,379,453


5,345,311

OTHER COMPREHENSIVE INCOME (LOSS)









Foreign currency translation gain (loss)


(1,744,846)



(6,272,303)



6,606,207

TOTAL OTHER COMPREHENSIVE INCOME (LOSS)


(1,744,846)



(6,272,303)



6,606,207

COMPREHENSIVE INCOME

$

9,344,324


$

4,107,150


$

11,951,518

EARNINGS PER ORDINARY SHARE









Basic and diluted

$

0.56


$

0.52


$

0.27

WEIGHTED AVERAGE ORDINARY SHARES OUTSTANDING









Basic and diluted


19,791,110



19,791,110



19,791,110

 

 


OSSEN INNOVATION CO., LTD AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDER'S EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2019, 2018 AND 2017


Total Ossen Innovation Co., Ltd. Shareholders' Equity


Ordinary Shares



Additional Paid-in








Accumulated Other






Retained



Non Controlling



Total


$0.01 Par Value



Capital


Treasury stock



Comprehensive Income/(loss)



Statutory Reserve



Earnings



 Interest





Shares


Amount





Shares


Amount
















Balance at January 1, 2017 

20,000,000


$

200,000


$

33,971,455


(208,890)


$

(192,153)


$

(4,378,873)


$

6,123,022


$

54,590,589


$

12,131,754


$

102,445,794

Net income

-



-



-


-



-



-



-



5,345,311



553,067



5,898,378

Transfer to statutory reserve

-



-



-


-



-



-



549,232



(549,232)






-

Foreign currency translation adjustment

-



-



-


-



-



6,606,207



-



-






6,606,207

Balance at December 31, 2017

20,000,000


$

200,000


$

33,971,455


(208,890)


$

(192,153)


$

2,227,334


$

6,672,254


$

59,386,668


$

12,684,821


$

114,950,379

Net income

-



-



-


-



-



-



-



10,379,453



1,005,530



11,384,983

Transfer to statutory reserve

-



-



-


-



-



-



1,092,559



(1,092,559)






-

Foreign currency translation adjustment

-



-



-


-



-



(6,272,303)



-



-






(6,272,303)

Balance at December 31, 2018

20,000,000


$

200,000


$

33,971,455


(208,890)


$

(192,153)


$

(4,044,969)


$

7,764,813


$

68,673,562


$

13,690,351


$

120,063,059

Net income

-



-



-


-



-



-



-



11,089,170



1,137,712



12,226,882

Transfer to statutory reserve

-



-



-


-



-



-



1,278,197



(1,278,197)






-

Foreign currency translation adjustment

-



-



-


-



-



(1,744,846)



-



-






(1,744,846)

Balance at December 31, 2019

20,000,000


$

200,000


$

33,971,455


(208,890)


$

(192,153)


$

(5,789,815)


$

9,043,010


$

78,484,535


$

14,828,063


$

130,545,095

 


 

OSSEN INNOVATION CO., LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2019, 2018 AND 2017



Year Ended December 31,




2019



2018



2017

CASH FLOWS FROM OPERATING ACTIVITIES:










 Net income


$

12,226,882


$

11,384,983


$

5,898,378

 Adjustments to reconcile net income to net cash provided by operating activities:










 Depreciation and amortization



606,045



641,647



796,566

Changes in operating assets and liabilities:










(Increase) Decrease In:










 Accounts receivable



(11,957,333)



(8,886,939)



(14,401,465)

 Inventories



2,077,598



(3,698,453)



12,519,709

 Advance to suppliers



(4,405,230)



1,294,247



(24,551,618)

 Other current assets



1,853



10,894



(6,023)

 Deferred tax assets



(46,866)



(9,625)



16,440

 Notes receivable - bank acceptance notes



-



-



15,280,381

 Accounts receivable - related parties



(536,358)



-



-

Increase (Decrease) In:










 Accounts payable



661,404



(69,973)



(1,144,936)

 Customer deposits



2,848,047



(32,524)



180,490

 Income tax payable



(130,706)



1,097,171



(144,084)

 Other payables and accrued expenses



(105,037)



(256,258)



2,496,349

Customer deposits - RPT



(1,441,487)



4,800,384



-

Due to related party



2,297,639



-



(3,912)

Due to shareholder



(1,695,259)



1,343,760



44,000

Net cash provided by/ (used in) operating activities



401,192



7,619,314



(3,019,725)











CASH FLOWS FROM INVESTING ACTIVITIES:










 Purchases of plant and equipment



(139,795)



(72,305)



(37,848)

Net cash used in investing activities



(139,795)



(72,305)



(37,848)

 


 

OSSEN INNOVATION CO., LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2019, 2018 AND 2017 (Continued) 



Year Ended December 31,




2019



2018



2017

CASH FLOWS FROM FINANCING ACTIVITIES:










 Proceeds from short-term bank loans



85,479,789



17,900,302



13,497,882

 Repayments of short-term bank loans



(81,777,165)



(17,543,051)



(17,380,550)

 Proceeds from long-term bank loans



6,171,040



-



-

 Repayments of long-term bank loans



(7,260,047)



-



-

 Proceeds from notes payable-bank acceptance notes



9,002,458



9,063,444



14,662,757

 Repayment of notes payable-bank acceptance notes



(8,712,056)



(10,120,846)



(14,588,702)

Net cash used in financing activities



2,904,019



(700,151)



(3,808,613)











INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH



3,165,416



6,846,858



(6,866,186)

 Effect of exchange rate changes on cash, cash equivalents, and restricted cash



(2,078,097)



(7,474,935)



8,088,466

Cash, cash equivalents and restricted cash at beginning of period



7,515,076



8,143,153



6,920,873

CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD


$

8,602,395


$

7,515,076


$

8,143,153











SUPPLEMENTARY CASH FLOW INFORMATION










Cash paid during the periods:










 Income taxes paid


$

1,749,389


$

1,019,270


$

840,670

 Interest paid


$

2,148,285


$

1,388,283


$

1,397,635

Non-cash transactions:










Appropriation to statutory reserve


$

1,278,197


$

1,092,559


$

549,232

 

 

Cision View original content:http://www.prnewswire.com/news-releases/ossen-innovation-announces-full-year-2019-financial-results-301061245.html

Source: Ossen Innovation Co., Ltd.
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