Ossen Innovation Supplements Its First Half 2011 Results and Provides First and Second Quarter Results Breakdown

12 Aug, 2011, 08:30 ET from Ossen Innovation Co., Ltd.

SHANGHAI, Aug. 12, 2011 /PRNewswire-Asia-FirstCall/ -- Ossen Innovation Co., Ltd. ("Ossen" or the "Company") (Nasdaq: OSN), a China-based manufacturer of galvanized pre-stressed steel wires used in the production of bridge cables as well as other pre-stressed steel materials, today supplements its previously released financial results for the six months ended June 30, 2011 and provides first and second quarter results breakdown.

First Quarter 2011 Results

(in millions except EPS)

Q1 2011

Q1 2010

Chg.

Revenue

$31.7

$28.7

11%

Gross Profit

$9.1

$5.4

68%

Net Income

$5.9

$3.4

75%

EPS

$0.29

$0.22

31%

Shares Outstanding*

20

15

33%

Second Quarter 2011 Results

(in millions except EPS)

Q2 2011

Q2 2010

Chg.

Revenue

$29.0

$30.0

(3%)

Gross Profit

$6.8

$6.2

9%

Net Income

$3.6

$3.8

(4%)

EPS

$0.18

$0.25

(28%)

Shares Outstanding*

20

15

33%

*20 million shares were outstanding as of June 30, 2011. The number includes the five million shares sold through Company's initial public offering completed in December 2010.

About Ossen Innovation Co., Ltd.

Ossen Innovation Co., Ltd. manufactures and sells galvanized pre-stressed steel wires used in the production of bridge cables as well as other pre-stressed materials. The Company's products are mainly used in the construction of bridges and other infrastructure projects. Ossen has two manufacturing facilities located in Maanshan, 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. 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:

Ossen Innovation Co., Ltd.

Alan Jin, Chief Financial Officer

Email: alanjin@osseninnovation.com

Phone: +86 (21) 6888-8886

Web:   www.osseninnovation.com

Investor Relations

MZ-HCI

Ted Haberfield, President

Phone: +1-760-755-2716

Email: thaberfield@hcinternational.net

Web: www.hcinternational.net

OSSEN INNOVATION CO., LTD AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

March 31,

December 31,

2011

2010

(Unaudited)

ASSETS

Current Assets

Cash and cash equivalents

$

4,341,983

$

12,322,982

Restricted cash

9,800,897

13,799,018

Notes receivable  bank acceptance notes

1,522,047

17,636,928

Accounts receivable, net of allowance for doubtful accounts    of $37,584 and $37,347 at March 31, 2011 and December 31,2010, respectively

29,867,084

13,332,492

Inventories

18,098,689

27,949,781

Advance to suppliers

55,459,065

25,072,350

Other current assets

2,757,512

3,343,302

Notes receivable from related party  bank acceptance notes

-

3,024,895

Account receivable from related party

3,911,917

707,487

  Total Current Assets

125,759,194

117,189,235

Property, plant and equipment, net

11,773,356

12,029,612

Land use rights, net

4,312,903

4,306,091

Prepayment for plant and equipment

7,610,234

7,562,237

TOTAL ASSETS

$

149,455,687

$

141,087,175

LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities

Notes payable  bank acceptance notes

$

19,786,609

$

26,014,096

Short-term bank loans

43,987,137

38,325,414

Accounts payable

454,108

2,493,665

Customer deposits

2,345,797

833,768

Income tax payable

1,180,100

662,585

Other payables and accrued expenses

619,987

94,510

Due to related party

780,770

-

  Total Current Liabilities

69,154,508

68,424,038

TOTAL LIABILITIES

69,154,508

68,424,038

EQUITY

Shareholders' Equity

Ordinary shares, $0.01 par value: 100,000,000 shares authorized, 20,000,000    shares issued and outstanding as of March 31, 2011 and December 31, 2010, respectively

200,000

200,000

Additional paid-in capital

33,805,090

33,338,096

Statutory reserve

3,263,552

2,674,457

Retained earnings

31,171,569

25,887,113

Accumulated other comprehensive income

2,672,320

2,192,996

TOTAL SHAREHOLDERS' EQUITY

71,112,531

64,292,662

Non-controlling interest

9,188,648

8,370,475

TOTAL EQUITY

80,301,179

72,663,137

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$

149,455,687

$

141,087,175

OSSEN INNOVATION CO., LTD AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(Unaudited)

Three Months Ended March 31,

2011

2010

REVEUNUES

$

31,745,263

$

28,678,325

COST OF GOODS SOLD

22,643,557

23,265,571

GROSS PROFIT

9,101,706

5,412,754

Selling expenses

241,441

93,043

General and administrative expenses

321,496

251,416

 Total Operating Expenses

562,937

344,459

INCOME FROM OPERATIONS

8,538,769

5,068,295

Financial expenses, net

(808,664)

(532,127)

Other income, net

44,032

27,871

INCOME BEFORE INCOME TAX

7,774,137

4,564,039

INCOME TAX

(1,082,413)

(599,431)

NET INCOME

6,691,724

3,964,608

LESS: NET INCOME ATTRIBUTABLE TO NON-CONTROLLING INTEREST

818,173

611,672

NET INCOME ATTRIBUTABLE TO CONTROLLING INTEREST

5,873,551

3,352,936

OTHER COMPREHENSIVE INCOME

Foreign currency translation gain

479,324

3,856

TOTAL OTHER COMPREHENSIVE INCOME

479,324

3,856

COMPREHENSIVE INCOME

$

6,352,875

$

3,356,792

EARNINGS PER ORDINARY SHARE

Basic and diluted

$

0.29

$

0.22

WEIGHTED AVERAGE ORDINARY SHARES OUTSTANDING

Basic and diluted

20,000,000

15,000,000

OSSEN INNOVATION CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

Three Months Ended March 31,

2011

2010

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income

$

6,691,724

$

3,964,608

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

Depreciation and amortization

400,374

355,070

Share-based compensation expense

26,040

-

Changes in operating assets and liabilities:

(Increase) Decrease In:

Accounts receivable

(16,534,592)

(609,982)

Inventories

9,851,092

1,344,477

Advance to suppliers

(30,386,714)

(5,524,252)

Other current assets

585,790

550,149

Notes receivable - bank acceptance notes

16,114,881

-

Notes receivable from related party - bank acceptance notes

3,024,895

1,828,234

Due from and advance to related party

-

(11,714,379)

Account receivable from related party

(3,204,430)

(6,986,666)

Increase (Decrease) In:

Accounts payable

(2,039,556)

8,046,852

Customer deposits

1,512,029

788,175

Income tax payable

517,514

369,664

Other payables and accrued expenses

525,477

542,613

Due to related party

780,770

-

Net cash used in operating activities

(12,134,706)

(7,045,437)

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of plant and equipment

(4,748)

(11,871)

Net cash used in investing activities

(4,748)

(11,871)

CASH FLOWS FROM FINANCING ACTIVITIES:

 Decrease in restricted cash

3,998,120

12,726

 Proceeds from short-term bank loans

22,526,280

23,551,440

 Repayments of short-term bank loans

(16,864,557)

(16,232,927)

 Proceeds from notes payable-bank acceptance notes

6,544,801

11,702,579

 Repayment of notes payable-bank acceptance notes

(12,772,288)

(10,236,580)

 IPO expenditure refund

440,954

-

Net cash provided by financing activities

3,873,310

8,797,238

INCREASE /( DECREASE) IN CASH AND CASH EQUIVALENTS

(8,266,144)

1,739,930

 Effect of exchange rate changes on cash

285,145

10,063

 Cash and cash equivalents at beginning of period

12,322,982

8,409,467

CASH AND CASH EQUIVALENTS AT END OF PERIOD

$

4,341,983

$

10,159,460

SUPPLEMENTARY CASH FLOW INFORMATION

Cash paid during the periods:

 Income taxes paid

$

570,608

$

198,199

 Interest paid

$

656,225

$

397,775

Non-cash transactions:

 Appropriation to statutory reserve

$

589,095

$

404,710

OSSEN INNOVATION CO., LTD AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(Unaudited)

Three Months Ended June 30,

2011

2010

REVENUES

$

29,036,672

$

30,030,450

COST OF GOODS SOLD

22,282,476

23,836,150

GROSS PROFIT

6,754,196

6,194,300

Selling expenses

316,520

102,663

General and administrative expenses

856,142

280,860

   Total Operating Expenses

1,172,662

383,523

INCOME FROM OPERATIONS

5,581,534

5,810,777

Financial expenses, net

(799,256)

(537,532)

Other income, net

26,654

68,849

INCOME BEFORE INCOME TAX

4,808,932

5,342,094

INCOME TAX

(694,317)

(771,167)

NET INCOME

4,114,615

4,570,927

LESS: NET INCOME ATTRIBUTABLE TO

 NON-CONTROLLING INTEREST

503,273

818,357

NET INCOME ATTRIBUTABLE TO CONTROLLING

 INTEREST

3,611,342

3,752,570

OTHER COMPREHENSIVE INCOME

Foreign currency translation gain

1,318,437

113,679

TOTAL OTHER COMPREHENSIVE INCOME

1,318,437

113,679

COMPREHENSIVE INCOME

$

4,929,779

$

3,866,249

EARNINGS PER ORDINARY SHARE

   Basic and diluted

$

0.18

$

0.25

WEIGHTED AVERAGE ORDINARY SHARES OUTSTANDING

   Basic and diluted

20,000,000

15,000,000

OSSEN INNOVATION CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

Three Months Ended June 30,

2011

2010

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income

$

4,114,615

$

4,570,927

Adjustments to reconcile net income to net cash provided by/ (used in) operating activities:

Depreciation and amortization

487,314

372,523

Share-based compensation expense

26,329

-

Changes in operating assets and liabilities:

(Increase) Decrease In:

Accounts receivable

(1,863,434)

(18,014,751)

Inventories

(2,160,408)

(6,240,707)

Advance to suppliers

(17,040,730)

7,415,128

Other current assets

2,617,257

(251,713)

Notes receivable - bank acceptance notes

1,522,047

150,208

Due from and advance to related party

-

3,403,036

Account receivable from related party

2,855,463

6,986,666

Increase (Decrease) In:

Accounts payable

70,938

(7,556,308)

Customer deposits

3,903,949

452,899

Income tax payable

(441,374)

408,222

Other payables and accrued expenses

(345,952)

(562,344)

Due to related party

(780,770)

Net cash used in operating activities

(7,034,756)

(8,866,214)

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of plant and equipment

(122,712)

(85,016)

Net cash used in investing activities

(122,712)

(85,016)

CASH FLOWS FROM FINANCING ACTIVITIES:

Increase in restricted cash

(3,799,809)

(338,218)

Proceeds from short-term bank loans

16,458,853

6,263,794

Repayments of short-term bank loans

(11,095,758)

(4,655,035)

Proceeds from notes payable-bank acceptance notes

19,445,298

10,328,382

Repayment of notes payable-bank acceptance notes

(13,241,808)

(9,508,345)

Net cash provided by financing activities

7,766,776

2,090,578

INCREASE /( DECREASE) IN CASH AND CASH EQUIVALENTS

609,308

(6,860,652)

Effect of exchange rate changes on cash

813,476

161,533

Cash and cash equivalents at beginning of period

4,341,983

10,159,460

CASH AND CASH EQUIVALENTS AT END OF PERIOD

$

5,764,767

$

3,460,341

SUPPLEMENTARY CASH FLOW INFORMATION

Cash paid during the periods:

Income taxes paid

$

1,145,915

$

594,575

Interest paid

$

680,367

$

448,839

Non-cash transactions:

Appropriation to statutory reserve

$

381,285

$

551,044

SOURCE Ossen Innovation Co., Ltd.



RELATED LINKS

http://www.osseninnovation.com