Fuwei Films Announces Its Fourth Quarter & Full Year 2010 Financial Results

Annual Revenues of RMB 501.5 million (US$ 75.8 million) increase 56.3% compared to the same period for 2009.

- Teleconference to be Held on March 25, 2011, at 8:00 a.m. EDT -

Mar 24, 2011, 22:48 ET from Fuwei Films (Holdings) Co., Ltd.

BEIJING, March 24, 2011 /PRNewswire-Asia-FirstCall/ -- Fuwei Films (Holdings) Co. Ltd. (Nasdaq: FFHL) ("Fuwei" 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, 2010.

Financial Results 2010 Highlights

  • Revenues for 2010 were RMB 501.5 million or US$75.8 million, compared with RMB 320.7 million in 2009.
  • Net income for 2010 was RMB 40.8 million or US$6.2 million, compared with net loss of RMB 19.0 million in 2009.
  • Basic and diluted earnings per share for 2010 was RMB 3.12 or US$0.47, compared with basic and diluted net loss per share of RMB 1.45 in 2009.
  • Cash and cash equivalents as of December 31, 2010 was RMB 171.2 million or US$25.9 million, compared with RMB 26.8 million as of December 31, 2009.

"2010 was a profitable year for Fuwei with significant increases in both revenue and net income, which was mainly due to higher demand and sales prices," said Mr. Xiaoan He, Chairman and CEO of Fuwei. "We believe that we are well positioned to leverage our market leadership and competitive advantages. In 2011, we plan to continue to focus on our R&D, expansion in global markets and the acceleration of our thick-film production line construction."

Fourth Quarter 2010 Results

Revenues for the fourth quarter of 2010 were RMB 173.5 million or US$26.2 million, compared with RMB 84.0 million in the fourth quarter of 2009, which was an increase of RMB 89.5 million, or 106.5% compared with the fourth quarter of 2009, mainly due to the significant increase in the price of goods sold.

Sales of specialty films for the fourth quarter of 2010 were RMB 34.7 million or US$5.2 million, or 20.0% of total revenues, compared with RMB 12.2 million or 14.5% of total revenue in the fourth quarter of 2009, which was mainly due to higher demand for specialty films and higher sales price of goods sold.

The following is a breakdown of commodity and specialty film sales for the three-month periods ended December 31, 2010 and 2009 (amounts in thousands):

Three-month Period Ended

December 31, 2010

% of Total

December 31, 2009

% of Total

RMB

US$

RMB

Printing film

29,792

4,506

17.2%

8,307

9.9%

Stamping film

91,816

13,887

52.9%

52,493

62.5%

Metallization film

6,626

1,002

3.8%

6,629

7.9%

Specialty film

34,687

5,246

20.0%

12187

14.5%

Base film for other applications

10,590

1,602

6.1%

4423

5.3%

 Total

173,511

26,243

100%

84,040

100%

Overseas sales for the fourth quarter of 2010 were RMB 36.1 million or US$5.5 million, or 20.8% of total revenues, compared with RMB 11.1 million or 13.3% of total revenues in the fourth quarter of 2009, which was mainly due to increased overseas demand and higher sales prices.

The following is a breakdown of domestic versus overseas sales for the three-month periods ended December 31, 2010 and 2009 (amounts in thousands):

Three-month Period Ended

December 31,2010

% of Total

December 31,2009

% of Total

RMB

US$

RMB

Sales in China

 

137,433

20,786

79.2%

72,890

86.7%

Sales in other countries

36,078

5,457

20.8%

11,150

13.3%

 

 

 

 

 

 

 

Total

173,511

26,243

100%

84,040

100.0%

Gross profit for the fourth quarter of 2010 was RMB 57.6 million or US$ 8.7 million, compared with RMB 10.4 million in the fourth quarter of 2009. Gross margin was 33.2%, compared with 12.4% in the fourth quarter of 2009. The increase in gross profit was primarily due to the significant increase in sales prices.

Operating expenses for the fourth quarter of 2010 was RMB 20.6 million or US$ 3.1 million, compared with RMB 10.4 million in the fourth quarter of 2009. This increase was mainly due to the increase of R&D expenses, accrued class action indemnity and related legal fees, and overseas sales expenses.

Operating income for the fourth quarter of 2010 was RMB 37.0 million or US$5.6 million, compared with operating loss of RMB 8,000 in the fourth quarter of 2009.

Net income for the fourth quarter of 2010 was RMB 25.4 million or US$3.8 million, compared with RMB 0.5 million in the fourth quarter of 2009. Basic and diluted earnings per share was RMB 1.95 or US$0.29, compared with RMB 0.04 in the fourth quarter of 2009.

2010 Full Year Results

During the fiscal year ended December 31, 2010, our revenues were RMB 501.5 million or US$ 75.8 million, which is an increase of RMB 180.7 million or 56.3%, as compared to the same period for 2009. The significant increase in revenue was mainly due to the increase of average unit sales price.

In 2010, sales of specialty films were RMB 88.0 million or US$ 13.3 million, or 17.5% of our total revenues as compared to RMB 34.0 million and 10.6% in 2009, which was an increase of RMB 54.0 million or 158.7%, as compared to the same period in 2009. The increase was mainly attributable to the increased demand for high value-added packaging. Furthermore, the increase of the sales of some specialty films, such as dry films also attributed to the sales increase.

The following is a breakdown of commodity and specialty film sales for the periods ended December 31, 2010 and 2009 (amounts in thousands):

Twelve-month Period Ended

December 31,2010

% of Total

December 31,2009

% of Total

RMB

US$

RMB

Printing film

 

76,720

11,604

15.3%

35,231

11.0%

Stamping film

282,033

42,656

56.2%

174,356

54.4%

Metallization film

 

28,108

4,251

5.6%

35,138

10.9%

Specialty film

87,956

13,303

17.5%

34,004

10.6%

Base film for other applications

 

26,641

4,029

5.4%

42,002

13.1%

501,458

75,843

100.0%

320,731

100.0%

Overseas sales were RMB 103.7 million or US$15.7 million, or 20.7% of total revenues, compared with RMB35.6 million or 11.1% of total revenues in 2009.

The following is a breakdown of domestic versus overseas sales for the periods ended December 31, 2010 and 2009 (amounts in thousands):

Twelve-month Period Ended

December 31,2010

% of Total

December 31,2009

% of Total

RMB

US$

RMB

Sales in China

397,781

60,162

79.3%

285,120

88.9%

Sales in other countries

 

103,677

15,681

20.7%

35,611

11.1%

501,458

75,843

100.0%

320,731

100.0%

Gross profit in 2010 was RMB 130.6 million or US$19.7 million, representing a gross margin of 26.0%, an increase of RMB 106.0 million or 430.4% compared with RMB 24.6 million or gross margin of 7.7% in the same period of 2009. The increase in gross margin was mainly due to the increase of sales price that was much higher than the increase of unit price of cost of goods sold.

Operating expenses during the year ended December 31, 2010 was RMB 70.9 million or US$ 10.7 million, which was an increase of RMB 29.8 million, or 72.3%, as compared to the same period for 2009. This increase was mainly due to the increase of R&D expenses, accrued class action indemnity and related legal fees, and overseas sales expenses.

Other expenses during the year ended December 31, 2010 was RMB 8.9 million or US$ 1.3 million, which was an increase of RMB 2.4 million, or 37.0%, as compared to the same period for 2009. The increase was mainly due to bank loan interest increase of RMB 2.3 million.

The effective tax rate was 21.8% and 17.7% in 2010 and 2009, respectively. The higher effective tax rate in 2010 was primarily due to higher profit in 2010 and the carryforward net loss for the period ended 2009.

Net income for 2010 was RMB 40.8 million or US$6.2 million, compared with net loss of RMB 19.0 million in 2009.

Basic and diluted earnings per share for 2010 was RMB 3.12 or US$ 0.47, compared with basic and diluted net loss per share of RMB 1.45 in 2009.

Net cash provided from operating activities was RMB 98.6 million or US$ 15.0 million for the year ended December 31, 2010 as compared to RMB 8.0 million for the year ended December 31, 2009. The increase was mainly due to the increase of net income and increased advance from customers.  

Cash and cash equivalents on December 31, 2010 was RMB 171.2 million or US$25.9 million, compared with RMB 26.8 million as of December 31, 2009.

2010 Highlights

Our subsidiary, Fuwei Films (Shandong) Co., Ltd. ("Shandong Fuwei"), received the following awards and certificates, each of which, we believe, is an indication of our achievements, the quality of our products. We believe that this will make us more attractive to our potential customers and as a result a more competitive company both in the local and international markets.

In June 2010, Shandong Fuwei was designated as an A-Category taxpayer by the National Taxation Bureau and the Local Taxation Bureau of Shandong Province, and Shandong Engineering Technology Research Center by the Department of Science & Technology of Shandong Province.

In January 2011, Shandong Fuwei was granted the "Award for Cooperative and Innovative Manufacturing, Study and Research of Small and Medium Enterprise ("SME")", and the "First Award of Private SME Innovation of Shandong Province" by SME Productivity Promotion Center of Shandong Province, and SME Innovative Committee of Technological Promotion of Shandong Province. Our brand "Fuwei Films" was selected as one of the "Famous Shandong Brand" by Shandong Provincial Quality Supervision Bureau; and the "Scientific Innovative Enterprise of Shandong Province" by the Department of Science & Technology of Shandong Province.

Conference Call Information

The Company will host a teleconference on Friday, March 25, 2011, at 8:00 a.m. EDT / 8:00 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 access codes: Account#: 286 and Conference ID: 369500. The replay will be available until April 25, 2011, 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 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. Amy Gao

Investor Relations Manager

Phone: +86-10-6852-2612

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

CONSOLIDATED BALANCE SHEETS

As of December 31, 2010 and 2009

(amounts in thousands, except share and per share data)

December 31, 2010

December 31, 2009

RMB

US$

RMB

ASSETS

Current assets

 

 

 

 

Cash and cash equivalents

171,227

25,897

26,804

Restricted cash

1,314

199

12,541

Accounts and bills receivable, net

25,482

3,854

28,785

Inventories

52,577

7,952

45,039

Advance to suppliers

10,974

1,660

3,956

Prepayments and other receivables

540

82

957

Deferred tax assets – current

1,344

203

1,198

Total current assets

263,458

39,847

119,282

Plant, properties and equipment, net

284,891

43,088

318,600

Construction in progress

197,193

29,824

237,118

Lease prepayments, net

21,024

3,180

21,548

Advanced to suppliers - Long term

2,787

422

2,367

Goodwill

10,276

1,554

10,276

Long-term deposit

16,760

2,535

21,000

Deferred tax assets - non current

1,763

267

5,318

Total assets

798,152

120,716

735,509

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities

Short-term borrowings

142,000

21,477

153,179

Accounts payables

14,296

2,162

25,898

Advance from customers

37,291

5,640

12,608

Accrued expenses and other payables

20,993

3,175

6,981

Deferred tax liabilities

1,822

276

-

216,402

32,730

198,666

Long-term loans

30,000

4,537

25,000

 

Total liabilities

246,402

37,267

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

2,015

13,323

Additional paid-in capital

311,907

47,174

311,907

Statutory reserve

35,195

5,323

29,338

Retained earnings

190,933

28,878

156,006

Cumulative translation adjustment  

1,186

179

993

Total shareholders' equity

552,544

83,569

511,567

Non-controlling interest

(794)

(120)

276

Total equity

551,750

83,449

511,843

Total liabilities and equity

798,152

120,716

735,509

FUWEI FILMS (HOLDINGS) CO., LTD and SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

For the Years Ended December 31, 2010, 2009 and 2008

(amounts in thousands, except share and per share data)

2010

2009

2008

RMB

US$

RMB

RMB

Revenues, net

501,458

75,843

320,731

447,255

Cost of goods sold

(370,905)

(56,098)

(296,118)

(376,923)

Gross profit

130,553

19,745

24,612

70,332

 

Operating expenses

- Distribution expenses

21,642

3,273

15,227

15,604

- Administrative expenses

49,281

7,453

25,932

30,124

 

Total operating expenses

70,922

10,727

41,159

45,728

 

Operating income (loss)

59,630

9,019

(16,547)

24,604

 

Other income (expense)

- Interest income

544

82

154

688

- Interest expense

(8,846)

(1,338)

(6,540)

(3,995)

- Other income, net

(575)

(87)

(92)

(174)

Total other expense

(8,877)

(1,343)

(6,478)

(3,481)

Income (loss) before income tax benefit (expense)

50,754

7,676

(23,024)

21,123

Income tax (expense) benefit

(11,059)

(1,673)

4,064

(2,966)

Net Income (loss)

39,695

6,004

(18,960)

18,157

Net (loss) income attributable to non-controlling interest

(1,088)

(165)

3

-

Net income (loss) attributable to the Company

40,783

6,168

(18,963)

18,157

Other comprehensive income (loss)

- Foreign currency translation adjustments

211

32

(68)

(87)

 

Comprehensive (loss) income attributable to non-controlling interest

(1,070)

162

3

-

Comprehensive income (loss) attributable to the Company

40,976

6,197

(19,032)

18,070

Earnings (loss) per share, Basic and diluted

3.12

0.47

(1.45)

1.39

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, 2010, 2009 and 2008

(amounts in thousands)

2010

2009

2008

RMB

US$

RMB

RMB

Cash flow from operating activities

Net income (loss) including non-controlling interest

39,695

6,004

(18,960)

18,157

Adjustments to reconcile net income to net cash

-

provided by (used in) operating activities

-

- Depreciation of property, plant and equipment

36,731

5,555

35,464

25,168

- Amortization of intangible assets

454

69

889

490

- Deferred income taxes

5,231

791

(4,064)

(1,748)

- Bad debt (recovery) expense

(266)

(40)

697

4,818

- Inventory provision

-

-

4,242

-

Changes in operating assets and liabilities

- Accounts receivable

3,404

515

11,609

18,186

- Inventories

(7,538)

(1,140)

(18,693)

11,080

- Advance to suppliers

(7,018)

(1,061)

2,890

2,384

- Prepaid expenses and other current assets

523

79

(4,929)

89

- Accounts payable

(11,581)

(1,752)

(4,475)

3,691

- Accrued expenses and other payables

8,341

1,262

1,902

(284)

- Advance from customers

24,683

3,733

3,827

(2,176)

- Tax payable

5,917

895

(2,411)

172

Net cash provided by operating activities

98,575

14,909

7,988

80,027

Cash flow from investing activities

Purchases of property, plant and equipment

(2,951)

(446)

(87,758)

(56,093)

Restricted cash related to trade finance

11,217

1,697

(2,130)

54,498

Advanced to suppliers - non current

(420)

(64)

1,941

-

Change in construction in progress

39,926

6,039

82,290

(54,155)

Amount decrease in deposit

4,240

641

-

(21,000)

 

Net cash provided by (used in) investing activities

52,012

7,867

(5,657)

(76,750)

 

Cash flow from financing activities

Principal payments of short-term bank loans

(11,179)

(1,691)

(11,585)

(23,262)

Proceeds from short-term bank loans

5,000

756

20,000

5,000

 

Net cash (used in) provided by financing activities

(6,179)

(935)

8,415

(18,262)

 

Effect of foreign exchange rate changes

16

2

236

(104)

 

Net increase (decrease) in cash and cash equivalent

144,424

21,843

10,982

(15,086)

 

Cash and cash equivalent

At beginning of the year

26,804

4,054

15,823

30,909

At end of the year

171,227

25,897

26,804

15,823

SUPPLEMENTARY DISCLOSURE:

Interest paid

8,846

1,338

8,399

11,705

Income tax paid

3,658

553

-

2,966

SUPPLEMENTARY SCHEDULE OF NONCASH INVESTING AND FINANCIAL ACTIVITIES:

During the years ended December 31, 2010, 2009 and 2008, the Company acquired equipment by incurring accounts

payable in the amount of:

-

-

7,071

-

SOURCE Fuwei Films (Holdings) Co., Ltd.



RELATED LINKS

http://www.fuweiholdings.com