Fuwei Films Announces Its Unaudited Financial Results for the Second Quarter of 2010
- Teleconference to be Held on August 17, 2010 at 8:00 a.m. EDT -
BEIJING, Aug. 16 /PRNewswire-Asia-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 unaudited financial results for the second quarter and first six months of 2010.
Highlights
-- Net sales for the second quarter were RMB 110.3 million (US$16.3
million), compared with RMB 72.6 million in the same period of 2009;
-- Gross profit for the second quarter was RMB 19.7 million (US$2.9
million), compared with RMB 6.3 million in the same period of 2009;
-- Net sales during the first six months were RMB 198.8 million (US$29.3
million), compared with RMB 147.1 million in the same period of 2009;
-- Net income for the first six months was RMB 297,000 (US$ 44,000),
compared with a net loss of RMB 21.5 million in the same six month
period of 2009;
-- Basic and diluted earnings per share for the first six months was RMB
0.02 (US$0.003), compared with basic and diluted net loss per share of
RMB 1.65 in the same period of 2009;
-- Sales of Specialty films for the first six months were RMB 24.8 million
(US$3.7 million) compared to RMB 10.7 million in the same period of
2009;
-- Overseas sales during the first six months were RMB 36.7 million
(US$5.4 million) compared to RMB 18.4 million in the same period of
2009.
Mr. Xiaoan He, Chairman and CEO of Fuwei Films, said, "We are pleased with our financial results for the first half of 2010. The market demand for our BOPET film products have increased. Thanks to a more robust global economy, internal cost cutting and sales of higher margin products, we believe that 2010 will be a good year for Fuwei Films."
Second Quarter of 2010 Results
Net sales during the second quarter ended June 30, 2010 were RMB 110.3 million (US$16.3 million), compared to RMB 72.6 million (US$10.6 million), during the same period in 2009, representing a 52.0% increase.
The sales of specialty films during the second quarter ended June 30, 2010 were RMB 16.2 million (US$ 2.4 million), reflected 14.7% of total net sales as compared to 9.0% in the same period of 2009. The increase was largely attributable to a recovery in demand for luxury goods packaging.
The following is a breakdown of commodity and specialty film sales for the three month period ended June 30, 2010 and 2009 (amounts in thousands):
Three Three
Month Month
Period Period
Ended Ended
June 30, June 30,
2010 % of 2009 % of
RMB US$ Total RMB Total
Printing film 18,801 2,772 17.0% 9,503 13.1%
Stamping film 64,897 9,570 58.8% 37,235 51.3%
Metallization film 4,978 734 4.5% 8,131 11.2%
Special film 16,248 2,396 14.7% 6,521 9.0%
Base film for other applications 5,395 796 4.9% 11,181 15.4%
110,319 16,268 100.0% 72,571 100.0%
Overseas sales during the second quarter ended June 30, 2010 were RMB 25.4 million (US$3.7 million), which accounted for 23.0% of total net sales, as compared with RMB 7.9 million (US$1. 2 million), and 10.9% in the same period in 2009, which is 221.5% higher than the same period last year. The increase in export sales was mainly due to the recovery of overseas market demand, especially demand in the Europe, North America and Southeast Asia regions.
The following is a breakdown of domestic and overseas sales for the three month period ended June 30, 2010 and 2009 (amounts in thousands):
Three Three
Month Month
Period Period
Ended Ended
June 30, June 30,
2010 % of 2009 % of
RMB US$ Total RMB Total
Sales in China 84,959 12,529 77.0% 64,632 89.1%
Sales in other countries 25,360 3,739 23.0% 7,939 10.9%
110,319 16,268 100.0% 72,571 100.0%
Gross profit was RMB 19.7 million (US$ 2.9 million) for the second quarter ended June 30, 2010, representing a gross margin of 17.8%, as compared to a gross margin of 8.6% from the same period in 2009. This was mainly due to an increase in the average sales price during the second quarter ended June 30, 2010 compared with the same period in 2009.
Operating expenses for the second quarter ended June 30, 2010 were RMB17.1 million (US$2.5 million), which was RMB 7.3 million (US$1.1 million) the same period in 2009, or 134.2% higher than the same period in 2009. This increase was mainly due to accrued compensation expense for class action litigation and related legal fees.
Net loss during the second quarter ended June 30, 2010 was RMB 3,000 (US$400) compared to net loss of RMB 7.4 million (US$ 1.1 million) during the same period in 2009, representing an increase in net income of RMB 7.4 million
US$1.1 million from the same period in 2009. The increase was mainly due to higher average selling prices, leading to higher net sales and gross margin.
Net cash flows provided by operating activities for the six months ended June 30, 2010, was RMB 17.2 million (US$ 2.6 million) compared to net cash flows of RMB 12.3 million (US$ 1.8 million) for the six months ended June 30, 2009, which is an increase of RMB 5.0 million (US$0.7 million). This increase in cash flows from operating activities was attributable primarily to the increased earnings, decrease of inventories, increase of accrued expenses and other payables.
Total shareholders' equity was RMB 511.8 million (US$75.5 million) as of June 30, 2010, compared with RMB 511.6 million as of December 31, 2009.
As of June 30, 2010, the Company had 13,062,500 basic and diluted total ordinary shares outstanding.
Conference Call Information
The Company will host a teleconference on August 17, at 8:00 a.m. EDT / 8:00 p.m. Beijing time to discuss its quarterly 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. The call will be webcast simultaneously and can be accessed on the Fuwei Films' Website at http://www.fuweiholdings.com . Please visit the Web site at least 15 minutes prior to the scheduled start time to register for the Web cast and download any necessary audio software.
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 access codes: Account #: 286 and Conference ID: 350870. The replay will be available until August 24, 2010, at 11:59 p.m. EDT.
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 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 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. Maggie Huang
Investor Relations Manager
Phone: +86-10-6852-2612
Email: [email protected]
In the U.S.:
Ms. Leslie Wolf-Creutzfeldt
Investor Relations
Grayling
Phone: +1-646-284-9472
Email: [email protected]
FUWEI FILMS (HOLDINGS) CO., LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 2010 AND DECEMBER 31, 2009
(amounts in thousands except share and per share value)
(Unaudited)
June December
30, 2010 31, 2009
RMB US$ RMB
ASSETS
Current assets
Cash and cash equivalents 50,615 7,464 26,804
Restricted cash 500 74 12,541
Accounts and bills
receivable, net 37,289 5,499 28,785
Inventories 39,357 5,804 45,039
Advance to suppliers 6,626 977 3,956
Prepayments and other
receivables 829 122 957
Deferred tax assets -
current 1,198 177 1,198
Total current assets 136,414 20,117 119,282
Plant, properties and
equipment, net 301,710 44,490 318,600
Construction in progress 236,004 34,801 237,118
Lease prepayments, net 21,286 3,139 21,548
Advanced to suppliers -
Long Term 1,457 215 2,367
Goodwill 10,276 1,515 10,276
Deposit 21,000 3,097 21,000
Deferred tax assets - non
current 5,341 788 5,318
Total assets 733,488 108,162 735,509
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Short-term borrowings 137,000 20,202 153,179
Accounts payables 21,750 3,207 25,898
Advance from customers 13,220 1,949 12,608
Accrued expenses and other
payables 14,463 2,135 6,981
186,433 27,493 198,666
Long-term loan 35,000 5,161 25,000
Total liabilities 221,433 32,654 223,666
Commitments and
contingencies
Equity
Shareholders' equity
Registered capital(of
US$0.129752 par value;
20,000,000 shares
authorized; 13,062,500
issued and outstanding) 13,323 1,965 13,323
Additional paid-in capital 311,907 45,994 311,907
Statutory reserve 29,338 4,326 29,338
Retained earnings 156,303 23,048 156,006
Cumulative translation
adjustment 977 144 993
Total shareholders' equity 511,849 75,477 511,567
Non-controlling interest 207 31 276
Total equity 512,056 75,508 511,843
Total liabilities and
equity 733,488 108,162 735,509
FUWEI FILMS (HOLDINGS) CO., LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME
FOR THE THREE AND SIX MONTH PERIODS ENDED JUNE 30, 2010 AND 2009
(amounts in thousands except share and per share value)
(UNAUDITED)
The Three Month
Period Period
Ended Ended
June 30, June 30,
2010 2009
RMB US $RMB
Net sales 110,319 16,268 72,571
Cost of sales (90,648) (13,367) (66,297)
Gross profit 19,670 2,901 6,274
Operating expenses
Selling expenses (4,159) (613) (2,734)
Administrative expenses (12,896) (1,902) (4,609)
Total operating expenses (17,055) (2,515) (7,343)
Operating income/(loss) 2,615 386 (1,069)
Other income/(expense)
- Interest income 157 23 41
- Interest expense (2,669) (394) (4,119)
- Others income, net (180) (27) (3,437)
Total other income/(expense) (2,692) (397) (7,515)
Income/ (loss) before income tax
benefit/(expense) (77) (11) (8,584)
Income tax benefit/(expense) 42 6 1,210
Net income/(loss) (35) (5.2) (7,374)
Net income/(loss) attributable to non-
controlling interests (33) (4.8) --
Net income/(loss) attributable to the
Company (3) (0.4) (7,374)
Other comprehensive income
- Foreign currency translation
adjustments -- -- (416)
Comprehensive income/ (loss) (3) (0.4) (7,790)
Earnings/ (loss) per share, Basic and
diluted (0.0002) (0.00003) (0.56)
Weighted average number ordinary
shares, Basic and diluted 13,062,500 13,062,500 13,062,500
The Six Month
Period Period
Ended Ended
June 30, June 30,
2010 2009
RMB US $RMB
Net sales 198,774 29,311 147,088
Cost of sales (166,337) (24,528) (140,741)
Gross profit 32,437 4,783 6,347
Operating expenses
Selling expenses (7,555) (1,114) (7,631)
Administrative expenses (20,425) (3,012) (16,071)
Total operating expenses (27,980) (4,126) (23,702)
Operating income/(loss) 4,457 657 (17,355)
Other income/(expense)
- Interest income 171 25 143
- Interest expense (4,287) (632) (4,119)
- Others income, net (136) (20) (3,882)
Total other income/(expense) (4,251) (627) (7,858)
Income/ (loss) before income tax
benefit/(expense) 205 30 (25,213)
Income tax benefit/(expense) 23 3 3,704
Net income/(loss) 228 34 (21,510)
Net income/(loss) attributable to non-
controlling interests (69) (10) --
Net income/(loss) attributable to the
Company 297 44 (21,510)
Other comprehensive income
- Foreign currency translation
adjustments (16) (2) (428)
Comprehensive income/ (loss) 281 41 (21,937)
Earnings/ (loss) per share, Basic and
diluted 0.02 0.003 (1.65)
Weighted average number ordinary
shares, Basic and diluted 13,062,500 13,062,500 13,062,500
FUWEI FILMS (HOLDINGS) CO., LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2010 AND 2009
(amounts in thousands except share and per share value)
(UNAUDITED)
The Six The Six
Month Month
Period Period
Ended Ended
June 30, June 30,
2010 2009
RMB US$ RMB
Cash flow from operating activities
Net income 228 34 (21,510)
Adjustments to reconcile net income
to net cash (used in)/provided by
operating activities
- Depreciation of property, plant and
equipment 18,158 2,678 16,048
- Amortization of intangible assets 227 33 227
- Deferred income taxes (23) (3) (3,320)
- Bad debt expense/(recovery) (2) (0.2) 5,945
- Accounts receivable (8,502) (1,254) 13,948
- Inventories 5,682 838 1,567
- Advance to suppliers (2,670) (394) 2,504
- Prepaid expenses and other current
assets 87 13 (5,842)
- Accounts payable (4,147) (611) 2,637
- Accrued expenses and other payables 5,922 899 (247)
- Advance from customers 613 90 3,383
- Tax payable 1,610 237 (3,042)
Net cash provided by operating
activities 17,184 2,560 12,298
Cash flow from investing activities
Purchases of property, plant and
equipment (1,234) (182) (88,458)
Restricted cash related to trade
finance 12,041 1,776 (644)
Advanced to suppliers - non current 910 134 --
Addition to construction in progress 1,114 164 78,953
Net cash used in investing activities 12,832 1,892 (10,149)
Cash flow from financing activities
Principal payments of short-term bank
loans (16,179) (2,386) (11,585)
Proceeds from short-term bank loans 10,000 1,475 10,000
Net cash (used in)/provided by
financing activities (6,179) (911) (1,585)
Effect of foreign exchange rate
changes (26) (3) (431)
Net increase (decrease) in cash and
cash equivalent 23,810 3,538 134
Cash and cash equivalent
At beginning of period/year 26,804 3,926 15,823
At end of period/year 50,615 7,464 15,957
SUPPLEMENTARY DISCLOSURE:
Interest paid 4,441 655 3,901
Income tax paid -- -- --
SOURCE Fuwei Films (Holdings) Co., Ltd.
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