Fuwei Films Announces Second Quarter Fiscal 2013 Unaudited Financial Results

-Teleconference to be Held on Friday, August 23, 2013 at 9:00 am EDT-

22 Aug, 2013, 16:00 ET from Fuwei Films (Holdings) Co., Ltd.

BEIJING, Aug. 22, 2013 /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 second quarter ended June 30, 2013.

Second Quarter 2013 Highlights

  • Net sales for the second quarter were RMB77.4 million (US$12.6 million), compared with RMB92.4 million in the same period of 2012.
  • Net loss attributable to the Company for the second quarter was RMB18.2 million (US$3.0 million), compared with net loss attributable to the Company of RMB11.9 million in the same period of 2012.
  • Net cash used in operating activities during the first six months was RMB11.2 million (US$1.8 million), compared with net cash provided by operating activities RMB49.0 million in the same period of 2012.

Mr. Xiaoan He, Chairman and CEO of Fuwei Films, said, "We are still facing strong competition arising from increased supply over demand in the market which is impacting the Company's quarterly results. However, I am pleased to report that the progress with the third production line is on track. This production line has produced some commodity thick films ranging in thickness from 38μm to 250μm, and the Company is producing sample diffusion films (a type of TFT-LCD optical film) at 188μm at the request of our clients. We will continue to conduct commissioning and testing while developing new products during the trial operation. We believe the addition of the third line is a sound strategy that will help us deliver long-term value for our shareholders.

Second Quarter 2013 Results

Revenues for the second quarter ended June 30, 2013 were RMB77.4 million (US$12.6 million), representing a decrease of 16.2% from RMB92.4 million in the second quarter of 2012. The decrease in revenues was due to the reduction of average sales price by 5.9% driven by stronger competition in China and a simultaneous decrease in total sales volumes by 11.0%.

Overseas sales in the second quarter of 2013 were RMB9.5 million or US$1.5 million, or 12.3% of total revenues, compared with RMB20.1 million or 21.8% of total revenues in the second quarter of 2012. The decrease in overseas sales was due to lower demand from international markets and enhanced competition as well as anti-dumping measures taken by the USA and South Korea, which led to a decrease in orders from the overseas markets compared to the second quarter of 2012.

The following is a breakdown of domestic versus overseas sales for the three-month periods ended June 30, 2013 and 2012 (amounts in thousands):

Three-Month Period Ended

June 30, 2013

June 30, 2012

RMB

US$

% of Total

RMB

% of Total

Sales in China

67,906

11,064

87.7%

72,279

78.2%

Sales in other

countries

9,495

1,547

12.3%

20,145

21.8%

Total

77,401

12,611

100.0%

92,424

100.0%

Gross loss for the second quarter of 2013 was RMB2.3 million (US$0.4 million) , representing a decrease of 221.1% from a gross profit of RMB1.9 million in the second quarter of 2012. Gross loss margin was 3.0%, as compared to a gross profit margin of 2.0% for the same period in 2012. The decrease of gross margin was primarily due to a 5.9% decrease in average product sales price driven by stronger competition in China which outpaced the decrease in the average cost of goods sold of 1.1% compared to the second quarter of 2012 which contributed to an increase in gross loss for the second quarter of 2013. 

Operating expenses for the second quarter 2013 were RMB13.6 million (US$2.2 million), representing a 12.4% increase from RMB12.1 million in the second quarter of 2012. The increase was mainly due to increased R&D expenditure on new products in the second quarter of 2013.

Operating loss for the second quarter of 2013 was RMB15.9 million (US$2.6 million), compared with operating loss of RMB10.3 million in the same period of 2012.

Net loss attributable to the Company for the second quarter of 2013 was RMB18.2 million (US$3.0 million), compared with net loss attributable to the Company of RMB11.9 million in the second quarter of 2012.

Basic and diluted net loss per share was RMB1.39 (US$0.23), compared with basic and diluted net loss per share of RMB0.91 in the second quarter of 2012.

Total shareholders' equity was RMB483.0 million (US$78.7 million) as of June 30, 2013, compared with RMB519.2 million as of December 31, 2012.

As of June 30, 2013, the Company had 13,062,500 basic and diluted total ordinary shares outstanding.

Conference Call Information

The Company will host a teleconference on Friday, August 23, 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: 419304. The replay will be available until September 23, 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's 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 possible delisting of the Company's ordinary shares from the NASDAQ Global Market; 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:

Mr. Yong Jiang Board Secretary Phone: +86 158 632 92177 Email: fuweiir@fuweifilms.com

In the U.S.:

Ms. Vivian Chen Investor Relations Grayling Phone: +1-646-284-9427 Email: vivian.chen@grayling.com

Financial Tables to Follow

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

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF JUNE 30, 2013 AND DECEMBER 31, 2012

(amounts in thousands except share and per share value)

(Unaudited)

June 30, 2013

December 31, 2012

RMB

US$

RMB

ASSETS

Current assets

Cash and cash equivalents

9,167

1,494

5,006

Restricted cash

47,750

7,780

21,457

Accounts and bills receivable, net

13,296

2,166

21,587

Inventories

48,816

7,954

34,291

Advance to suppliers

4,842

789

13,543

Prepayments and other receivables

30,498

4,969

26,174

Deferred tax assets - current

2,081

339

1,857

Total current assets

156,450

25,491

123,915

Property, plant and equipment, net

209,227

34,090

233,335

Construction in progress

328,418

53,511

337,990

Lease prepayments, net

19,261

3,138

19,523

Advance to suppliers - long term, net

7,587

1,236

5,299

Long-term deposit

16,760

2,731

16,760

Other Assets

13,393

2,182

262

Deferred tax assets - non current

10,396

1,694

10,466

Total assets

761,492

124,073

747,550

LIABILITIES AND EQUITY

Current liabilities

Short-term borrowings

107,032

17,439

110,000

Accounts payables

27,155

4,425

28,796

Notes payable

88,185

14,368

38,299

Advance from customers

16,116

2,626

11,714

Accrued expenses and other payables

6,488

1,057

6,831

Obligations under capital leases-current

8,049

1,311

6,282

Total current liabilities

253,025

41,226

201,922

Obligations under capital leases

12,787

2,083

13,718

Long-term loan

10,000

1,629

10,000

Deferred tax liabilities

3,471

566

3,476

Total liabilities

279,283

45,504

229,116

Equity

Shareholders' equity

Registered capital(of US$0.129752 par value;

20,000,000 shares authorized; 13,062,500 issued and

outstanding)

13,323

2,171

13,323

Additional paid-in capital

311,907

50,821

311,907

Statutory reserve

37,441

6,100

37,441

Retained earnings

119,075

19,402

155,341

Cumulative translation adjustment

1,252

204

1,222

Total shareholders' equity

482,998

78,698

519,234

Non-controlling interest

(789)

(129)

(800)

Total equity

482,209

78,569

518,434

Total liabilities and equity

761,492

124,073

747,550

The accompanying notes are an integral part of these unaudited condensed consolidated statements.

 

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

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

FOR THE THREE- AND SIX-MONTH PERIODS ENDED JUNE 30, 2013 AND 2012

(amounts in thousands except share and per share value)

(Unaudited)

The Three-Month Period Ended June 30,

The Six-Month Period Ended June 30, 

2013

2012

2013

2012

RMB

US$

RMB

RMB

US$

RMB

Net sales

77,401

12,611

92,424

153,978

25,088

183,435

Cost of sales

79,708

12,987

90,543

157,476

25,658

184,580

Gross (loss) profit

(2,307)

(376)

1,881

(3,498)

(570)

(1,145)

Operating expenses

Selling expenses

3,625

591

4,678

7,970

1,299

8,764

Administrative expenses

9,985

1,627

7,469

19,291

3,143

13,817

Total operating expenses

13,610

2,218

12,147

27,261

4,442

22,581

Operating loss 

(15,917)

(2,594)

(10,266)

(30,759)

(5,012)

(23,726)

Other income (expense)

- Interest income

281

46

1,851

342

56

2,509

- Interest expense

(2,664)

(434)

(3,332)

(5,881)

(958)

(6,057)

- Others income (expense), net

(27)

(4)

(78)

(128)

(21)

349

Total other income (expense)

(2,410)

(392)

(1,559)

(5,667)

(923)

(3,199)

Loss before provision for income

taxes

(18,327)

(2,986)

(11,825)

(36,426)

(5,935)

(26,925)

Income tax benefit (expense)

136

22

(90)

159

26

(121)

Net loss 

(18,191)

(2,964)

(11,915)

(36,267)

(5,909)

(27,046)

Net (loss) income attributable to

noncontrolling interests

(1)

0

1

(1)

0

(2)

Net loss attributable to the

Company

(18,190)

(2,964)

(11,916)

(36,266)

(5,909)

(27,044)

Other comprehensive income (loss)

- Foreign currency translation

adjustments attributable to

noncontrolling interest

10

2

(8)

12

2

(8)

- Foreign currency translation

adjustments attributable to the

Company

19

3

(18)

30

5

(26)

Comprehensive income (loss)

attributable to non-controlling

interest

9

2

(7)

11

2

(10)

Comprehensive loss attribute to the

Company

(18,171)

(2,961)

(11,934)

(36,236)

(5,904)

(27,070)

Loss per share, Basic and diluted

(1.39)

(0.23)

(0.91)

(2.78)

(0.45)

(2.07)

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

The accompanying notes are an integral part of these unaudited condensed consolidated statements.

 

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

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2013 AND 2012

(amounts in thousands except share and per share value)

(Unaudited)

The Six-Month Period Ended June 30, 

2013

2012

RMB

US$

RMB

Cash flow from operating activities

Net loss

(36,267)

(5,909)

(27,046)

Adjustments to reconcile net loss to net cash

(used in) provided by operating activities

- Gain on disposal of property, plant and equipment

-

-

(35)

- Depreciation of property, plant and equipment

24,353

3,968

24,346

- Amortization of intangible assets

262

43

227

- Deferred income taxes

(159)

(26)

121

- Bad debt expense (recovery)

1,495

244

(375)

Changes in operating assets and liabilities 

- Accounts and bills receivable

6,797

1,107

29,840

- Inventories

(14,526)

(2,367)

(56)

- Advance to suppliers

8,701

1,418

2,298

- Prepaid expenses and other current assets

(1,916)

(312)

28,976

- Accounts payable

(1,641)

(267)

1,986

- Accrued expenses and other payables

(291)

(47)

328

- Advance from customers

4,402

717

6,083

- Tax payable

(2,408)

(392)

(17,715)

Net cash (used in) provided by operating activities

(11,198)

(1,823)

48,978

Cash flow from investing activities

Purchases of property, plant and equipment

(244)

(40)

(556)

Restricted cash related to trade finance

(26,298)

(4,285)

62,180

Advanced to suppliers - non current

(2,288)

(373)

(97,391)

Amount change in construction in progress

(3,559)

(580)

(1,298)

Proceeds from sale of property, plant and equipment

-

-

250

Net cash used in investing activities

(32,389)

(5,278)

(36,815)

Cash flow from financing activities

Principal payments of short-term bank loans

(110,000)

(17,923)

(168,501)

Proceeds from short-term bank loans

107,032

17,439

120,000

Payment of capital lease obligation

(4,164)

(678)

-

Change in notes payable

49,886

8,128

33,110

Proceeds from sale-leaseback equipment

5,000

815

-

Net cash provided by (used in) financing activities

47,754

7,781

(15,391)

Effect of foreign exchange rate changes

(6)

10

(19)

Net increase (decrease) in cash and cash equivalent

4,161

690

(3,247)

Cash and cash equivalent

At beginning of period

5,006

804

44,172

At end of period

9,167

1,494

40,925

SUPPLEMENTARY DISCLOSURE:

Interest paid

5,881

958

6,057

Income tax paid

-

-

-

SUPPLEMENTARY SCHEDULE OF NONCASH INVESTING AND FINANCIAL ACTIVITIES:

Account payable for plant and equipment:

6,220

1,013

1,711

Obligations for acquired equipment under capital lease:

20,836

3,395

-

The accompanying notes are an integral part of these unaudited condensed consolidated statements.

 

SOURCE Fuwei Films (Holdings) Co., Ltd.



RELATED LINKS

http://www.fuweiholdings.com