Fuwei Films Announces Its Unaudited Financial Results for the First Quarter of 2015

-Teleconference to be Held on Friday, May 22, 2015 at 9:00 am EDT-

May 21, 2015, 16:01 ET from Fuwei Films (Holdings) Co., Ltd.

BEIJING, May 21, 2015 /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 first quarter of 2015 ended March 31, 2015.

Highlights

  • Net sales during the first quarter ended March 31, 2015 were RMB52.8million or US$8.5 million, compared to RMB70.7million, during the same period in 2014, representing a decrease of RMB17.9 million or 25.3%.
  • Net loss attributable to the Company during the first quarter ended March 31, 2015 was RMB15.0 million or US$2.4 million compared to net loss attributable to the Company of RMB13.3 million during the same period in 2014, representing an increase of RMB1.7 million.
  • Basic and diluted net loss per share was RMB1.15 or US$0.19 and RMB1.02 for the three-month period ended March 31, 2015and 2014, respectively.
  • Net cash used in operating activities for the three months ended March 31, 2015 was RMB7.7 million or US$1.2 million compared to net cash used in operating activities of RMB2.5 million for the three months ended March 31, 2014. This increase in net cash flows used in operating activities was primarily attributable to the increase of loss.

Mr. Zengyong Wang, Chairman and CEO of Fuwei Films, commented, "The first quarter financial results continued to reflect weakened market conditions due to significant competition which caused oversupply and excess capacity in the marketplace. However, we continue to believe that our focus on innovation will enable the Company to better approach the current down cycle while increasing the ratio of high-valued films."

First Quarter 2015Results

Net sales during the first quarter ended March 31, 2015 were RMB52.8million or US$8.5 million, compared to RMB70.7million, during the same period in 2014, representing a decrease of RMB17.9 million or 25.3%, mainly due to the reduction of average sales price and sales volume arising from stronger competition in China and a reduction in the prices of raw materials. The decrease of output caused by the repair of the production lines from February 2015 to March 2015 also contributed to the reduction of sales volume.

Overseas sales were RMB13.1 million or US$2.1 million, or 24.8% of total revenues, compared with RMB10.5 million or 14.8% of total revenues in the first quarter of 2014, representing anincrease of RMB2.6 million or 24.8%. The reduction of average sales price caused a decrease of RMB3.1 million and the increase in sales volume resulted in an increase of RMB5.7 million.The increase in overseas sales was mainly due to the increase of sales volume.

The following is a breakdown of PRC domestic and overseas sales (amounts in thousands except percentages):



Three-Month
Period Ended
March 31, 2014

% of Total

Three-Month
Period Ended
March 31, 2014

% of Total



RMB

US$

RMB

Sales in China


39,696

6,404

75.2%

60,238

85.2%

Sales in other countries


13,080

2,110

24.8%

10,467

14.8%










52,776

8,514

100.0%

70,705

100.0%

Our gross loss was RMB7.8 million or US$1.3 million for the first quarter ended March 31, 2015, representing a gross loss margin of 14.8%, as compared to a gross loss margin of 0.1% for the same period in 2014. Our average product sales prices decreased by 19.5% compared to the same period in 2014 while the average cost of goods sold decreased by 7.7% compared to the same period last year. Consequently, the decrease in average product sales prices was significantly higher than that in the average cost of goods sold during the first quarter ended March 31, 2015, which contributed to the increase in gross loss margin compared with the same period in 2014.

Operating expenses for the first quarter ended March 31, 2015 were RMB8.8 million or US$1.4 million, which was RMB1.6 million, or 15.4% lower than the same period in 2014. This decrease was mainly due to decreased general and administration expenses in the first quarter of 2015.

Net loss attributable to the Company during the first quarter ended March 31, 2015 was RMB15.0 million or US$2.4 million compared to net loss attributable to the Company of RMB13.3 million during the same period in 2014, representing an increase of RMB1.7 million.

Basic and diluted net loss per share was RMB1.15 or US$0.19 and RMB1.02 for the three-month period ended March 31, 2015and 2014, respectively.

Total shareholders' equity was RMB373.9 million or US$60.3 million as of March 31, 2015, compared with RMB388.9million as of December 31, 2014.

As of March 31, 2015, the Company had 13,062,500 basic and diluted ordinary shares outstanding.

Conference Call Information

The Company will host a teleconference on Friday, May 22, 2015, 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: 13609782. The replay will be available until June 22, 2015, 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'sBOPET 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; significant competition in the BOPET film industry, especially the significant oversupply of BOPET films resulting from the rapid growth of the Chinese BOPET industry capacity, changes in the international market and trade barriers, especially the adverse impact of the antidumping investigation and imposition of an anti-dumping duty on imports of the BOPET films originating from the People's Republic of China ("China") conducted by certain main importing countries; fluctuations of RMB exchange rate, the reduce in demand for the Company's products or the loss of main customers which may result in the decrease of sales, and negatively influencing the Company's financial performance, uncertainty as to the future profitability, uncertainty as to the Company's ability to successfully obtain additional funds to meet the working capital needs of the new BOPET production line, uncertainty as to the Company's ability to continuously develop new BOPET film products to be produced by the third production line and keep up with changes in BOPET film technology, risks associated with possible defects and errors in its products including complaints and claims from clients, uncertainty as to its ability to protect and enforce its intellectual property rights, uncertainty as to its ability to attract and retain qualified executives and personnel, and uncertainty in acquiring raw materials on time and on acceptable terms, particularly in light of the volatility in the prices of petroleum products in recent years, instability of power and energy supply, and the uncertainty regarding the future operation of the Company in connection with the changes in the labor law in China, the measures taken by the Chinese government to save energy and reduce emissions, and the complaints from nearby residents and local government about the noise caused by our production as well as the uncertainty of the impact of major shareholder transfer that have substantial influence over the Company and the Company's business operation including possible overlap of our BOPET products, customers and market orientation with an BOPET film manufacturer, which is controlled by the same individual who has control over the shares of our major shareholder. 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. Xiaoli Yu
Investor Relations Manager
Phone: +86-133-615-59266
Email: fuweiIR@fuweifilms.com

In the U.S.:

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 MARCH 31, 2015 AND DECEMBER 31, 2014

(amounts in thousands except share and per share value)

(Unaudited)




March 31, 2015


December 31, 2014


RMB

US$


RMB

ASSETS

Current assets






Cash and cash equivalents


6,499

1,048


9,020

Restricted cash


31,001

5,001


48,085

Accounts and bills receivable, net


7,244

1,169


9,867

Inventories


26,671

4,302


24,034

Advance to suppliers


3,467

559


7,512

Prepayments and other receivables


20,846

3,363


18,772

Deferred tax assets - current


1,756

283


2,794

Total current assets


97,484

15,725


120,084







Plant, properties and equipment, net


470,619

75,919


482,534

Construction in progress


1,046

169


366

Lease prepayments, net


18,274

2,948


18,406

Advance to suppliers - long term, net


636

103


722

Long-term deposit


-

-


16,760

Other Assets


12,277

1,980


12,500

Deferred tax assets - non current


21,473

3,464


21,573







Total assets


621,809

100,308


672,945







LIABILITIES AND EQUITY

Current liabilities






Long-term loan, current portion


3,350

540


3,350

Due to related parties


129,932

20,960


125,938

Accounts payables


24,521

3,956


29,484

Notes payable


61,380

9,902


95,539

Advance from customers


3,523

568


3,392

Accrued expenses and other payables

7,244

1,169


6,095

Obligations under capital leases-current


6,397

1,032


8,259

Total current liabilities


236,347

38,127


272,057







Obligations under capital leases


-

-


303

Long-term loan


6,650

1,073


6,650

Deferred tax liabilities


5,714

922


5,816







Total liabilities


248,711

40,122


284,826







Equity






Shareholders' equity






Registered capital(of US$0.129752 par value;
20,000,000 shares authorized; 13,062,500 issued and
outstanding)


13,323

2,149


13,323

Additional paid-in capital


311,907

50,316


311,907

Statutory reserve


37,441

6,040


37,441

Retained earnings


10,046

1,621


25,043

Cumulative translation adjustment


1,175

188


1,199

Total shareholders' equity


373,892

60,314


388,913

Non-controlling interest


(794)

(128)


(794)

Total equity


373,098

60,186


388,119

Total liabilities and equity


621,809

100,308


672,945

 

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

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2015 AND 2014

(amounts in thousands except share and per share value)

(Unaudited)






The Three-Month Period Ended March 31, 



2015


2014


RMB

US$


RMB

Net sales


52,776

8,514


70,705

Cost of sales


60,601

9,776


70,774







Gross loss


(7,825)

(1,262)


(69)







Operating expenses






Selling expenses


3,196

516


3,359

Administrative expenses


5,613

905


7,054

Total operating expenses


8,809

1,421


10,413







Operating loss 


(16,634)

(2,683)


(10,482)







Other income (expense)






- Interest income


520

84


380

- Interest expense


(2,331)

(376)


(3,168)

- Others (expense) income, net


4,484

723


(88)







Total other income (expense)


2,673

431


(2,876)







Loss before provision for income taxes


(13,961)

(2,252)


(13,358)







Income tax benefit(expense)


(1,036)

(167)


99







Net loss 


(14,997)

(2,419)


(13,259)







Net loss attributable to non-controlling interests


-

-


-

Net loss attributable to the Company


(14,997)

(2,419)


(13,259)







Other comprehensive income






- Foreign currency translation adjustments attributable to
non-controlling interest


-

-


(20)

- Foreign currency translation adjustments attributable to
the Company


(24)

(4)


(48)







Comprehensivelossattributable to non-controlling interest


-

-


(20)

Comprehensive lossattributable to the Company


(15,021)

(2,423)


(13,307)







Loss per share,
Basic and diluted


(1.15)

(0.19)


(1.02)

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 THREE-MONTH PERIOD ENDED MARCH 31, 2015 AND 2014

(amounts in thousands except share and per share value)

(Unaudited)






The Three-Month Period Ended March 31, 



2015


2014



RMB

US$


RMB

Cash flow from operating activities






Net loss


(14,997)

(2,419)


(13,259)

Adjustments to reconcile net loss to net cash






used in operating activities






- Losson disposal of property, plant and equipment


4

1


-

  - Depreciation of property, plant and equipment


11,888

1,918


12,069

  - Amortization of intangible assets


132

21


132

  - Deferred income taxes


1,036

167


(99)

  - Bad debt expense


(4,319)

(697)


477

Changes in operating assets and liabilities 






  - Accounts and bills receivable


2,535

409


(1,072)

  - Inventories


(2,637)

(425)


(355)

  - Advance to suppliers


4,211

679


(10)

  - Prepaid expenses and other current assets


(377)

(61)


(264)

  - Accounts payable


(4,962)

(800)


(82)

  - Accrued expenses and other payables


1,155

186


(219)

  - Advance from customers


132

21


(1,443)

  - Tax payable


(1,475)

(238)


1,639







Net cash used in operating activities


(7,674)

(1,238)


(2,486)







Cash flow from investing activities






Purchases of property, plant and equipment


22

4


(1,639)

Restricted cash related to trade finance


17,084

2,756


1,992

Advanced to suppliers - non current


86

14


(811)

Amount change in construction in progress


(680)

(110)


265

Return of long-term deposit


21,000

3,388


-







Net cash used ininvesting activities


37,512

6,052


(193)







Cash flow from financing activities






Proceeds from related party


3,993

644


-

Payment of capital lease obligation


(2,165)

(349)


(2,028)

Change in notes payable


(34,159)

(5,510)


(3,985)

Net cash (used in) provided by financing activities


(32,331)

(5,215)


(6,013)







Effect of foreign exchange rate changes


(28)

(464)


(9)







Net decrease in cash and cash equivalent


(2,521)

(865)


(8,701)







Cash and cash equivalent






At beginning of period/year


9,020

1,913


11,578

At end of period/year


6,499

1,048


2,877







SUPPLEMENTARY DISCLOSURE:






Interest paid


2,331

376


3,168

Income tax paid


-

-


-







SUPPLEMENTARY SCHEDULE OF NONCASH INVESTING AND FINANCIAL ACTIVITIES:

Account payable for plant and equipment:


2,266

366


8,275

Obligations for acquired equipment under capital lease:


6,397

1,032


14,848







SOURCE Fuwei Films (Holdings) Co., Ltd.



RELATED LINKS

http://www.fuweiholdings.com