Fuwei Films Announces Its Unaudited Financial Results for the Third Quarter of 2012

- Teleconference to be Held on Wednesday, November 28, 2012 at 8:00 am EST -

27 Nov, 2012, 15:30 ET from Fuwei Films (Holdings) Co., Ltd.

BEIJING, Nov. 27, 2012 /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 unaudited financial results for the third quarter of 2012 ended September 30, 2012.

Highlights

  • Net sales for the third quarter were RMB88.8 million (US$14.1 million), compared with RMB117.0 million in the same period of 2011.
  • Net loss attributable to the Company for the third quarter was RMB14.9 million (US$2.4 million), compared with net loss attributable to the Company of RMB4.9 million in the same period of 2011.
  • Net cash provided by operating activities during the first nine months was RMB104.7 million (US$16.7 million), compared with net cash provided by operating activities RMB17.1 million in the same period of 2011.
  • Basic and diluted net loss per share for the third quarter was RMB1.14 (US$0.18), compared with basic and diluted net loss per share of RMB0.38 in the same period of 2011.

Mr. Xiaoan He, Chairman and CEO of the Company, said, "We have made significant progress in the construction of our third production line for thick films despite the current market condition. If all goes as planned, we expect to start trial operations of the line by the end of the year or early next year. We have started the R&D for our thick films to be manufactured by this production line including high performance electric insulation film, base film for solar backsheet and TFT-LCD optical films. In addition, we have started marketing these products and contacting target clients."

Third quarter of 2012 Results

Revenues for the third quarter ended September 30, 2012 were RMB88.8 million (US$14.1 million), compared with RMB117.0 million in the same period of 2011, which was a decrease of RMB28.2 million, or 24.1% compared with the third quarter of 2011. The decrease in sales was mainly due to the significant decrease in sales prices compared to the same period in 2011 arising from stronger competition attributing to increased capacity in China and overseas.

Overseas sales during the third quarter ended September 30, 2012 were RMB19.5 million (US$3.1 million,) or 22.0% of total revenues, compared with RMB22.4 million or 19.2% of total revenues in the same period of 2011. The decrease in overseas sales was mainly due to the decrease in sales prices compared with the same period last year. With respect to the percentage of total sales, overseas sales increased due to increased marketing efforts.

The following is a breakdown of domestic versus overseas sales for the three-month periods ended September 30, 2012 and 2011 (amounts in thousands):

Three-Month Period Ended

September 30, 2012

% of Total

September 30, 2011

% of Total

RMB

US$

RMB

Sales in China

69,240

11,017

78.0%

94,533

80.8%

Sales in other countries

19,521

3,106

22.0%

22,430

19.2%

Total

88,761

14,123

100.0%

116,963

100.0%

Gross profit was RMB0.9 million (US$0.1 million) for the third quarter of 2012, compared with RMB10.4 million in the same period of 2011. Gross margin was 1.0%, compared with 8.9% in the third quarter of 2011. This was mainly due to the decrease in sales price exceeding those in raw material during the third quarter ended September 30, 2012 compared with the same period in 2011.

Operating expenses for the three months ended September 30, 2012 was RMB13.4 million (US$2.1 million), compared with RMB14.0 million in the third quarter of 2011, which was RMB0.6 million, or 4.3% lower than the same period in 2011.

Operating loss for the third quarter of 2012 was RMB12.5 million (US$2.0 million), compared with operating loss of RMB3.7 million in the same period of 2011.

Net loss attributable to the Company for the third quarter of 2012 was RMB14.9 million (US$2.4 million), compared with net loss attributable to the Company of RMB4.9 million in the third quarter of 2011.

Basic and diluted net loss per share was RMB1.14 (US$0.18), compared with basic and diluted net loss per share of RMB0.38 in the third quarter of 2011.

Total shareholders' equity was RMB531.8 million (US$84.6 million) as of September 30, 2012, compared with RMB573.7 million as of December 31, 2011.

As of September 30, 2012, the Company had 13,062,500 basic and diluted total ordinary shares outstanding.

Conference Call Information

The Company will host a teleconference on Wednesday, November 28, 2012, at 8:00 a.m. EST / 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: 404179. The replay will be available until December 28, 2012, at 11:59 p.m. EST.

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 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 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 including complaints and claims from clients; 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 Email: fuweiIR@fuweifilms.com

In the U.S.:

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

 

Financial Tables to Follow

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

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF SEPTEMBER 30, 2012 AND DECEMBER 31, 2011

(amounts in thousands except share and per share value)

(Unaudited)

September 30, 2012

December 31, 2011

RMB

US$

RMB

ASSETS

Current assets

Cash and cash equivalents

15,767

2,509

44,172

Restricted cash

49,168

7,823

102,212

Accounts and bills receivable, net

17,859

2,842

52,457

Inventories

39,911

6,350

41,774

Advance to suppliers

17,994

2,863

8,808

Prepayments and other receivables

22,423

3,568

31,172

Deferred tax assets - current

1,274

203

1,309

Total current assets

164,396

26,158

281,904

Plant, properties and equipment, net

245,772

39,106

277,119

Construction in progress

277,320

44,126

119,647

Lease prepayments, net

19,654

3,127

20,047

Advance to suppliers - long term

37,542

5,973

62,799

Goodwill

10,276

1,635

10,276

Long-term deposit

16,760

2,667

16,760

Deferred tax assets - non current

1,516

241

1,622

Total assets

773,236

123,033

790,174

LIABILITIES AND EQUITY

Current liabilities

Short-term borrowings

120,000

19,094

168,501

Accounts payables

22,427

3,568

19,317

Notes payable

62,459

9,938

-

Advance from customers

18,884

3,005

11,876

Accrued expenses and other payables

6,717

1,069

5,798

Total current liabilities

230,487

36,674

205,492

Long-term loan

10,000

1,591

10,000

Deferred tax liabilities

1,803

287

1,811

Total liabilities

242,290

38,552

217,303

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

2,120

13,323

Additional paid-in capital

311,907

49,629

311,907

Statutory reserve

37,441

5,957

37,441

Retained earnings

167,868

26,710

209,768

Cumulative translation adjustment

1,213

193

1,230

Total shareholders' equity

531,752

84,609

573,669

Non-controlling interest

(806)

(128)

(798)

Total equity

530,946

84,481

572,871

Total liabilities and equity

773,236

123,033

790,174

 

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

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

FOR THE THREE- AND NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2012 AND 2011

(amounts in thousands except share and per share value)

(Unaudited)

The Three-Month Period Ended September 30,

The Nine-Month Period Ended September 30, 

2012

2011

2012

2011

RMB

US$

RMB

RMB

US$

RMB

Net sales

88,761

14,123

116,963

272,196

43,310

428,433

Cost of sales

87,895

13,985

106,596

272,475

43,355

350,403

Gross margin

866

138

10,367

(279)

(45)

78,030

Operating expenses

Selling expenses

4,561

726

5,097

13,325

2,120

14,136

Administrative expenses

8,801

1,400

8,946

22,618

3,599

27,824

Total operating expenses

13,362

2,126

14,043

35,943

5,719

41,960

Operating (loss) income

(12,496)

(1,988)

(3,676)

(36,222)

(5,764)

36,070

Other income (expense)

- Interest income

83

13

358

2,592

412

1,435

- Interest (expense)

(2,564)

(408)

(2,736)

(8,621)

(1,372)

(7,462)

- Other income (expense), net

126

20

543

475

76

307

Total other income (expense)

(2,355)

(375)

(1,835)

(5,554)

(884)

(5,720)

(Loss)/income before provision for income taxes

(14,851)

(2,363)

(5,511)

(41,776)

(6,648)

30,350

Provision for income tax (expense)/benefit

(12)

(2)

597

(133)

(21)

(5,507)

Net (loss) income

(14,863)

(2,365)

(4,914)

(41,909)

(6,669)

24,843

Net (loss) income attributable to non-controlling interests

(7)

(1)

(12)

(9)

(1)

(21)

Net income (loss) attributable to the Company

(14,856)

(2,364)

(4,902)

(41,900)

(6,668)

24,864

Other comprehensive income

- Foreign currency translation adjustments attributable to non-controlling interest

9

1

27

1

0

44

- Foreign currency translation adjustments attributable to the Company

9

1

30

(17)

(3)

35

Comprehensive income (loss) attributable to non-controlling interest

2

0

15

(8)

(1)

23

Comprehensive (loss) income attribute to the Company

(14,847)

(2,363)

(4,872)

(41,917)

(6,671)

24,899

Earnings (loss) per share, Basic and diluted

(1.14)

(0.18)

(0.38)

(3.21)

(0.51)

1.90

Weighted average number ordinary shares, Basic and diluted

13,062,500

13,062,500

13,062,500

13,062,500

13,062,500

13,062,500

 

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

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2012 AND 2011

(amounts in thousands except share and per share value)

(Unaudited)

The Nine-Month Period Ended September 30,

2012

2011

RMB

US$

RMB

Cash flow from operating activities

Net (loss) income

(41,909)

(6,668)

24,843

Adjustments to reconcile net income to net cash

(used in)provided by operating activities

- Loss/(gain) on disposal of property, plant and equipment

(35)

(6)

-

- Depreciation of property, plant and equipment

36,537

5,814

31,013

- Amortization of intangible assets

340

54

340

- Deferred income taxes

133

21

726

- Bad debt (recovery) expense

(236)

(38)

(5,690)

Changes in operating assets and liabilities

- Accounts and bills receivable

35,040

5,575

(16,983)

- Inventories

1,863

296

4,853

- Advance to suppliers

(9,186)

(1,462)

4,161

- Prepaid expenses and other current assets

28,216

4,490

5,372

- Accounts payable

3,210

511

525

- Accrued expenses and other payables

653

115

(7,348)

- Note payable

62,459

9,938

- Advance from customers

7,009

1,115

(18,816)

- Tax payable

(19,399)

(3,087)

(5,911)

Net cash provided by operating activities

104,695

16,668

17,085

Cash flow from investing activities

Purchases of property, plant and equipment

(5,452)

(867)

(33,629)

Restricted cash related to trade finance

53,043

8,440

(98,134)

Advanced to suppliers - non current

25,257

4,019

(1,993)

Amount change in construction in progress

(157,673)

(25,088)

20,470

Proceeds from sale of property, plant and equipment

250

40

-

Net cash used in investing activities

(84,575)

(13,456)

(113,286)

Cash flow from financing activities

Principal payments of short-term bank loans

(168,501)

(26,811)

(7,000)

Proceeds from short-term bank loans

120,000

19,094

18,501

Net cash (used in) provided by financing activities

(48,501)

(7,717)

11,501

Effect of foreign exchange rate changes

(24)

(4)

(173)

Net decrease in cash and cash equivalent

(28,405)

(4,509)

(84,873)

Cash and cash equivalent

At beginning of period/year

44,172

7,018

171,227

At end of period/year

15,767

2,509

86,354

SUPPLEMENTARY DISCLOSURE:

Interest paid

8,621

1,372

7,462

Income tax paid

-

-

9,654

SUPPLEMENTARY SCHEDULE OF NONCASH INVESTING AND FINANCIAL ACTIVITIES:

During the period ended September 30, 2012, the Company acquired equipment by incurring accounts payable in the amount of:

3,834

610

-

SOURCE Fuwei Films (Holdings) Co., Ltd.



RELATED LINKS

http://www.fuweiholdings.com