2014

Fuwei Films Announces Fourth Quarter and Full Year 2012 Financial Results - Teleconference to be Held on Friday, April 12, 2013, at 9:00 a.m. EDT -

BEIJING, April 11, 2013 /PRNewswire-FirstCall/ -- 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, 2012.

Fuwei Films 2012 Highlights

  • Net cash provided by operating activities was RMB46.5 million for the year ended December 31, 2012 as compared to net cash used in operating activities of RMB14.0 million for the year ended December 31, 2011. This increase in cash flows from operating activities was attributable primarily to the decrease in accounts receivables.
  • Operating expenses during the year ended December 31, 2012 were RMB60.9 million, an increase of RMB6.1 million, or 11.2%, as compared to 2011. This was due to goodwill impairment for the year ended December 31, 2012.
  • Fuwei Films was selected as one of the outstanding brands of the plastic packaging industry in China in 2011 and 2012. This award was granted by the China Packaging Federation, one of the leading State-approved national industry federations committed to advocating the development of the packaging industry in China.
  • Fuwei Films' third production line to manufacture high-performance electric insulation film, base film for solar backsheet and TFT-LCD optical film with an annual design capacity of 23,000 metric tons and thickness between 38 and 250um was put into trial operation.

Mr. Xiaoan He, Chairman and CEO of Fuwei Films said, "Despite the challenges in the marketplace, including increased competition and a significant reduction in selling prices arising from excessive capacity, Fuwei Films focused on innovation and completed the installation of its third production line. We intend to develop our high value-added thick films to meet market demands. We believe this is the key to our long term growth and prosperity."

Fourth Quarter 2012 Results

Revenues for the fourth quarter of 2012 were RMB100.7 million (US$16.2 million), compared with RMB109.2 million in the fourth quarter of 2011, a decrease of RMB8.5 million, or 7.8%, mainly due to the decrease in selling prices compared to the same period in 2011 arising from stronger competition attributed to increased capacity in China and overseas.

Sales of specialty films for the fourth quarter of 2012 were RMB27.6 million (US$4.4 million), or 27.4% of total revenues, compared with RMB32.1 million or 29.4% of total revenue in the fourth quarter of 2011. The decrease was mainly attributable to decreased selling prices compared to those in 2011.

The following is a breakdown of commodity and specialty film sales for the three-month periods ended December 31, 2012 and 2011 (amounts in thousands):



Three months period ended



December 31,2012

% of Total

December 31,2011

% of Total



RMB

US$

RMB

Stamping and transfer film


54,434

8,737

54.1%

59,819

54.8%

Printing film


8,621

1,384

8.6%

11,725

10.7%

Metallized film


4,520

726

4.5%

3,429

3.1%

Specialty film


27,603

4,431

27.4%

32,076

29.4%

Base film for other applications


5,492

882

5.5%

2,164

2.0%








Total


100,670

16,159

100%

109,213

100%

Overseas sales for the fourth quarter of 2012 were RMB14.6 million (US$2.3 million), or 14.5% of total revenues, compared with RMB15.1 million or 13.8% of total revenues in the fourth quarter of 2011. The reduction in overseas sales was mainly due to stronger competition in the global market causing a significant drop of overseas selling prices in the fourth quarter of 2012 compared with the same period last year.

The following is a breakdown of domestic versus overseas sales for the three-month periods ended December 31, 2012 and 2011 (amounts in thousands):



Three-month period ended



December 31,2012

% of Total

December 31,2011

% of Total



RMB

US$

RMB

Sales in China


86,070

13,815

85.5%

94,106

86.2%

Sales in other countries


14,600

2,343

14.5%

15,107

13.8%








Total


100,670

16,159

100%

109,213

100.0%

Gross profit for the fourth quarter of 2012 was RMB(2.8 million) (US$(0.5 million)), compared with RMB7.4 million in the fourth quarter of 2011. Gross margin was (2.8)%, compared with 6.8% in the fourth quarter of 2011. The significant decrease in gross profit was primarily due to the significant decrease in selling prices.  

Operating expenses for the fourth quarter of 2012 was RMB24.9 million (US$4.0 million) compared with RMB12.8 million in the fourth quarter of 2011. This increase was mainly due to the increase of R&D expenses and goodwill impairment for the year ended December 31, 2012.

Operating loss for the fourth quarter of 2012 was RMB(27.8 million) (US$(4.5 million)), compared with operating loss RMB(5.3 million) in the fourth quarter of 2011.

Net loss attributable to the Company for the fourth quarter of 2012 was RMB(12.5 million) (US$(2.0 million)), compared with net loss attributable to the Company RMB(3.8 million) in the fourth quarter of 2011. Basic and diluted loss per share was RMB(0.96) (US$(0.15)), compared with basic and diluted loss per share of RMB(0.29) in the fourth quarter of 2011.

2012 Full Year Results

For the fiscal year ended December 31, 2012, our net revenues were RMB372.9 million (US$59.8 million), which was a decrease of RMB164.7 million or 30.6%, as compared to 2011. The decrease in revenue was mainly due to the reduction of average selling prices by 30.6% and total sales volumes by 0.7%. 

In 2012, sales of specialty films were RMB92.5 million (US$14.9 million) and 24.8% of our total revenues as compared to RMB140.5 million and 26.1% in 2011, which was a decrease of RMB48.0 million, or 34.1%, as compared to the same period in 2011. The decrease was largely attributable to the decrease in demand and selling prices for films in electronics and high-end packaging.

The Company's revenue by significant types of films for the periods ended December 31, 2012 and 2011 is as follows (amounts in thousands):



 For the year ended December 31,



2012

% of Total

2011

% of Total



RMB

US$

RMB

Stamping and transfer film


202,029

32,428

54.2%

293,768

54.6%

Printing film


42,449

6,814

11.4%

55,218

10.3%

Metallized film


18,886

3,031

5.1%

28,205

5.3%

Specialty film


92,537

14,853

24.8%

140,491

26.1%

Base film for other
applications


16,966

2,723

4.6%

19,963

3.7%



372,867

59,849

100.0%

537,645

100.0%

Overseas sales were RMB70.6 million or US$11.3 million, or 18.9% of total revenues, compared with RMB145.5 million or 27.1% of total revenues in 2011. The decrease in overseas sales was mainly due to less demand from international markets and enhanced competition as well as anti-dump measures taken by the USA and South Korea, which led to decrease in orders from the overseas markets and the significant decrease of selling prices compared to the same period of 2011.

The following is a breakdown of domestic versus overseas sales for the periods ended December 31, 2012 and 2011 (amounts in thousands):                                                                   



For the year ended December 31,



2012

% of Total

2011

% of Total



RMB

US$

RMB

Sales in China


302,290

48,521

81.1%

392,195

72.9%

Sales in other
countries


70,577

11,328

18.9%

145,450

27.1%



372,867

59,849

100.0%

537,645

100.0%

Our gross loss was RMB(3.1 million) (US$(0.5 million)) for the year of 2012, representing a gross margin of (0.8)%, as compared to a gross margin of 15.9% in 2011. Gross margin decreased by 16.7 percentage points compared to the same period in 2011. Our average unit selling price decreased by 30.6% compared to last year due to excess capacity and stronger competition in the market. In addition, the main raw materials used in our production of BOPET films, polyethylene terephthalate (or PET) resin and additives, comprised approximately 73.0% of our total costs of goods sold and these prices were greatly influenced by price fluctuation in crude oil. Our main raw material costs, PET resin, were reduced by 14.7% compared to last year. The decrease in product selling prices largely exceeded that in main raw material costs during 2012 compared with 2011, which contributed to the significant decrease in our gross profit.

Our operating expenses during the year ended December 31, 2012 were RMB60.9 million, which was an increase of RMB6.1 million, or 11.2%, as compared to 2011. The increase was mainly due to goodwill impairment for the year ended December 31, 2012.

Total other income during the year ended December 31, 2012 was RMB1.8 million (US$0.3 million), compared to total other expense of RMB(5.7 million) in 2011, which was mainly attributable to interest capitalization of RMB11.2 million (US$1.8 million) related to the third production line project in 2012. Interest payments totaled RMB11.2 million (US$1.8 million) during 2012, which was RMB1.0 million or 9.3% higher than that in 2011, mainly due to higher interest rates on bank loans.

Income tax benefits during the year ended December 31, 2012 were RMB7.7 million (US$1.2 million) compared to an income tax expense of RMB(4.0 million) during 2011, which was mainly attributable to the tax effect of changes in deferred tax during 2012.

Net loss attributable to the Company for full year 2012 was RMB(54.4 million) (US$(8.7 million)), compared with net income of RMB21.1 million in 2011.

Net cash provided by operating activities was RMB46.5 million (US$7.5 million) for the year ended December 31, 2012 as compared to net cash used in operating activities of RMB(14.0 million) for the year ended December 31, 2011. This increase in cash flows from operating activities was attributable primarily to the decrease in accounts receivables. In this year, we took actions to collect overdue invoices from our customers, which resulted in an increase in cash flows.

Cash and cash equivalents on December 31, 2012 was RMB5.0 million (US$0.8 million), compared with RMB44.2 million as of December 31, 2011.

Conference Call Information

The Company will host a teleconference on Friday, April 12, 2013, at 9:00 a.m. EDT / 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, approximately 10 minutes prior to the scheduled start time.

A replay of the call can also be accessed via telephone by calling +1-877-660-6853 in North America, or +1-201-612-7415 internationally, and entering the following Conference ID: 411313. The replay will be available until May 12, 2013, at 11:59 p.m. EDT.

About Fuwei Films

Fuwei Films conducts its business through its wholly owned subsidiary, Fuwei Films (Shandong) Co., Ltd. ("Shandong Fuwei"). Shandong Fuwei develops, manufactures and distributes high-quality plastic films using the biaxial oriented stretch technique, otherwise known as BOPET film (biaxially oriented polyethylene terephthalate). Fuwei Films' 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 is 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:
Miss Lysander Lee
Investor Relations Officer
Phone: +86 133 615 59266

In the U.S.:
Ms. Leslie Wolf-Creutzfeldt
Investor Relations
Grayling
Phone: +1-646-284-9472
Email: leslie.wolf-creutzfeldt@grayling.com

 

Financial Tables Follow

 

FUWEI FILMS (HOLDINGS) CO., LTD and SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
As of December 31, 2012 and 2011
(amounts in thousands, except share and per share data)








December 31, 2012


December 31, 2011


RMB

US$


RMB

ASSETS

Current assets






Cash and cash equivalents


5,006

804


44,172

Restricted cash


21,457

3,444


102,212

Accounts and bills receivable, net


21,587

3,465


52,457

Inventories


34,291

5,504


41,774

Advance to suppliers


13,543

2,174


8,808

Prepayments and other receivables


26,174

4,201


31,172

Deferred tax assets - current


1,857

298


1,309

Total current assets


123,915

19,890


281,904







Plant, properties and equipment, net


233,335

37,453


277,119

Construction in progress


337,990

54,251


119,647

Lease prepayments, net


19,523

3,134


20,047

Advance to suppliers - long term, net


5,299

851


62,799

Goodwill


-

-


10,276

Long-term deposit


16,760

2,690


16,760

Other assets


262

42


-

Deferred tax assets - non current


10,466

1,680


1,622







Total assets


747,550

119,991


790,174







LIABILITIES AND EQUITY

Current liabilities






Short-term borrowings


110,000

17,656


168,501

Accounts payables


28,796

4,622


19,317

Notes payable


38,299

6,147


-

Advance from customers


11,714

1,880


11,876

Accrued expenses and other payables


6,831

1,096


5,798

Obligations under capital leases-current


6,282

1,008


-

Total current liabilities


201,922

32,409


205,492







Obligations under capital leases


13,718

2,202



Long-term loan


10,000

1,605


10,000

Deferred tax liabilities


3,476

558


1,811







Total liabilities


229,116

36,774


217,303







Equity






Shareholders' equity






Registered capital(of US$0.129752 par value; 20,000,000 shares
authorized; 13,062,500 issued and outstanding)


13,323

2,138


13,323

Additional paid-in capital


311,907

50,065


311,907

Statutory reserve


37,441

6,010


37,441

Retained earnings


155,341

24,934


209,768

Accumulated other comprehensive income


1,222

198


1,230

Total shareholders' equity


519,234

83,345


573,669

Non-controlling interest


(800)

(128)


(798)

Total equity


518,434

83,217


572,871

Total liabilities and equity


747,550

119,991


790,174

 

FUWEI FILMS (HOLDINGS) CO., LTD and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
For the Years Ended December 31, 2012, 2011 and 2010
(amounts in thousands, except share and per share data)






The Year Ended December 31, 



2012

2011

2010


RMB

US$

RMB

RMB

Net sales


372,866

59,849

537,645

501,458

Cost of sales


375,973

60,348

452,173

370,905







Gross (loss) margin


(3,107)

(499)

85,472

130,553







Operating expenses:






Selling expenses


18,212

2,923

19,930

21,642

Administrative expenses


32,389

5,199

34,806

49,281

Goodwill impairment


10,276

1,649

-

-

Total operating expenses


60,877

9,771

54,736

70,922







Operating (loss) income 


(63,984)

(10,270)

30,736

59,630







Other income (expense):






- Interest income


1,022

164

2,612

544

- Interest expense


-

-

(10,227)

(8,846)

- Others income (expense), net


798

128

1,872

(575)

Total other income (expense)


1,820

292

(5,743)

(8,877)







(Loss) Income before provision for income taxes


(62,164)

(9,978)

24,993

50,754







Income tax benefit (expense)


7,727

1,240

(3,955)

(11,059)







Net (Loss) income 


(54,437)

(8,738)

21,038

39,695







Net (Loss) income attributable to noncontrolling interests                


(10)

(2)

(43)

(1,088)

Net income (loss) attributable to the Company


(54,427)

(8,736)

21,081

40,783







Other comprehensive income (loss):






- Foreign currency translation adjustments attributable to noncontrolling interest


8

1

39

18

- Foreign currency translation adjustments attributable to
the Company


(8)

(1)

44

193







Comprehensive income (loss) attributable to non-
controlling interest


(2)

(1)

(4)

(1,070)

Comprehensive (loss) income attribute to the Company


(54,435)

(8,737)

21,125

40,976







(Loss) Earnings per share,
Basic and diluted


(4.17)

(0.67)

1.61

3.12

Weighted average number ordinary shares,
Basic and diluted 


13,062,500

13,062,500

13,062,500

13,062,500

 

FUWEI FILMS (HOLDINGS) CO., LTD and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 2012, 2011 and 2010







The Years Ended December 31, 




2012


2011

2010



RMB

US$


RMB

RMB

Cash flow from operating activities







Net (loss) income


(54,437)

(8,738)


21,038

39,695

Adjustments to reconcile net (loss) income to net cash







(used in) provided by operating activities







- Loss on disposal of property, plant and equipment


10

2


-

-

- Loss on goodwill impairment


10,276

1,649


-

-

- Depreciation of property, plant and equipment


48,709

7,818


43,783

36,731

- Amortization of intangible assets


524

84


454

454

- Deferred income taxes


(7,727)

(1,240)


165

5,231

- Bad debt (recovery) expense


1,026

165


(354)

(266)

- Inventory provision


-

-


3,533

-

Changes in operating assets and liabilities 







- Accounts and bills receivable


31,460

5,050


(26,620)

3,404

- Inventories


7,483

1,201


7,270

(7,538)

- Advance to suppliers


(6,351)

(1,019)


2,167

(7,018)

- Prepaid expenses and other current assets


29,192

4,686


(30,180)

523

- Accounts payable


9,579

1,538


5,021

(11,581)

- Accrued expenses and other payables


789

127


(7,185)

8,341

- Advance from customers


(162)

(26)


(25,415)

24,683

- Tax payable


(23,920)

(3,839)


(7,695)

5,917








Net cash provided by (used in) operating activities


46,451

7,458


(14,018)

98,575








Cash flow from investing activities







Purchases of property, plant and equipment


(5,285)

(848)


(35,943)

(2,951)

Restricted cash related to trade finance


80,752

12,962


(100,915)

11,217

Advanced to suppliers - non current


57,500

9,229


(273)

(420)

Amount change in construction in progress


(207,432)

(33,295)


17,806

39,926

Interest capitalization related to CIP


(11,174)

(1,794)


-

-

Amount decrease in deposit


-

-


-

4,240

Proceeds from sale of property, plant and equipment


250

40


-

-








Net cash (used in) provided by investing activities


(85,389)

(13,706)


(119,325)

52,012








Cash flow from financing activities







Principal payments of short-term bank loans


(168,501)

(27,046)


(142,000)

(11,179)

Proceeds from short-term bank loans


110,000

17,656


148,501

5,000

Change in notes payable


38,299

6,147


-

-

Proceeds from sale-leaseback equipment


20,000

3,210


-

-








Net cash (used in) provided by financing activities


(202)

(33)


6,501

(6,179)








Effect of foreign exchange rate changes


(26)

67


(213)

16








Net (decrease) increase in cash and cash equivalent


(39,166)

(6,214)


(127,055)

144,424








Cash and cash equivalent







At beginning of period/year


44,172

7,018


171,227

26,804

At end of period/year


5,006

804


44,172

171,227








SUPPLEMENTARY DISCLOSURE:







Interest paid


11,174

1,794


10,227

8,846

Income tax paid


-

-


9,654

3,658








SUPPLEMENTARY SCHEDULE OF NONCASH INVESTING
AND FINANCIAL ACTIVITIES:







Account payable for plant and equipment:


6,003

964


1,730

-

Obligations for acquired equipment under capital lease:


20,000

3,210


-

-









SOURCE Fuwei Films (Holdings) Co., Ltd.



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