Fuwei Films Announces its Unaudited Financial Results for the Third Quarter of 2011

In the news release, Fuwei Films Announces its Unaudited Financial Results for the Third Quarter of 2011, issued 10-Nov-2011 by Fuwei Films (Holdings) Co., Ltd. over PR Newswire, we are advised by the company that in the "Highlights" section, second bullet, and also in the "Third Quarter of 2011 Results" section, the third paragraph under the second table, the sentence "Net loss was RMB 4.9 million or US$0.8 million, compared with RMB 15.0 million in the same period of 2010,” should read “Net loss was RMB 4.9 million or US$0.8 million, compared with net income of RMB 15.0 million in the same period of 2010.” The complete corrected, release follows:

Fuwei Films Announces its Unaudited Financial Results for the Third Quarter of 2011

- Teleconference to be Held on November 11, 2011, at 8:00 a.m. EST -

BEIJING, Nov. 11, 2011 /PRNewswire-Asia-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 2011 ended September 30, 2011.

Highlights

• Revenues were RMB 117.0 million or US$18.3 million, compared with RMB 129.2 million in the same period of 2010.
• Net loss was RMB 4.9 million or US$0.8 million, compared with net income of RMB 15.0 million in the same period of 2010.
• Net sales during the nine-month period were RMB 428.4 million or US$67.0 million compared to RMB 327.9 million or US$49.0 million in the same period in 2010, representing a 30.6% increase.
• Sales of specialty films during the nine-month period were RMB 108.4 million or US$17.0 million, reflecting 25.3% of total nets sales as compared to 16.2% in the same period of 2010, an increase of 9.1%.

Mr. Xiaoan He, Chairman and CEO, said, "As we predicted, the sales price of BOPET film products in the Chinese market continues to decrease resulting from more supply than demand, although the sales percentage of our higher margin specialty film increased. Going forward, we intend to take proactive measures in order to effectively compete and withstand serious market challenges by continuing improve our product portfolio in accordance with the differentiation strategy."

Third Quarter of 2011 Results

Revenues were RMB 117.0 million, or US$18.3 million, compared with RMB 129.2 million in the same period of 2010, representing a 9.4% decrease compared with the third quarter of 2010, mainly due to the decrease of average unit sales price together with lower sales volume.

Sales of specialty films in the third quarter of 2011 were RMB 28.9 million or US$4.5 million, or 24.7% of total revenues, compared with 22.1% in the same period of 2010, an increase of 2.6%. The increase was largely attributable to the increase in demand for films in electronics as well as high-end and environmentally friendly packaging.

The following is a breakdown of commodity and specialty film sales for the three-month periods ended September 30, 2011 and 2010 (amounts in thousands):

Overseas sales during the third quarter ended September 30, 2011 were RMB 22.4 million or US$3.5 million, or 19.2% of total revenues, compared with RMB 30.9 million or 23.9% of total revenues in the same period of 2010, representing a 27.5% decrease. The decrease in overseas sales was mainly due to decreases overseas sales prices as well as the significant decline of overseas sales volume.

The following is a breakdown of domestic versus overseas sales for the three-month periods ended September 30, 2011 and 2010 (amounts in thousands):

Gross profit was RMB 10.4 million or US$ 1.6 million for the third quarter of 2011, compared with RMB 40.5 million in the same period of 2010. Gross margin was 8.9%, compared with 31.4% in the third quarter of 2010. This was mainly due to increased costs of sales and lower sales price during the third quarter ended September 30, 2011 compared with the same period in 2010.

Operating expenses for the third quarter ended September 30, 2011 were RMB 14.0 million or US$2.2 million, which was RMB 8.3 million lower than the third quarter of 2010. This decrease was mainly due to the decrease of provision for bad debts, and reduced class action litigation and related legal fees.

Net loss was RMB 4.9 million or US$0.8 million, compared with net income of RMB 15.0 million in the same period of 2010.

Basic and diluted net loss per share was RMB 0.38 or US$0.06, compared with basic and diluted earnings per share of RMB 1.15 in the same period of 2010.

Total shareholders' equity was RMB 577.5 million (US$90.3 million) as of September 30, 2011, compared with RMB 552.5 million as of December 31, 2010.

As of September 30, 2011, the Company had 13,062,500 basic and diluted total ordinary shares outstanding.

Mr. He concluded, "With the rapid increase of BOPET capacity in the market, we cannot control global market conditions and pricing, especially in the Chinese market. Nevertheless, we can focus on higher margin specialty products and work hard to remain a leader in our field. We will continue to keep you informed of our progress."

Conference Call Information

The Company will host a teleconference on Friday, November 11, 2011, at 8:00 a.m. EST / 9:00 p.m. Beijing time to discuss the financial results. To participate in the call, please dial +1-877-407-9210 in North America, or +1-201-689-8049 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: 382036. The replay will be available until December 11, 2011, 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.

- Financial Tables to Follow -

SOURCE Fuwei Films (Holdings) Co., Ltd.