Ossen Innovation Announces First Quarter 2015 Financial Results

SHANGHAI, June 26, 2015 /PRNewswire/ -- Ossen Innovation Co., Ltd. ("Ossen" or the "Company") (Nasdaq: OSN), a China-based manufacturer of an array of plain surface, rare earth and zinc coated pre-stressed steel materials, today announced its financial results for the quarter ended March 31, 2015.

• Revenues decreased by 4.5% to $26.8 million for the three months ended March 31, 2015, mainly due to weakness in rare earth coated products sales and partially offset by strength in zinc coated, plain surfaced and others products.
• Net income attributable to Ossen Innovation increased by 79.1% to $0.9 million, or $0.04 per share, for the three months ended March 31, 2015, compared to $0.5 million, or $0.02 per share, for the same period of last year.
• Gross margin improved by more than four points to 13.5% for the three months ended March 31, 2015, due to improvement in gross margin for coated PC steel materials that include both rare earth and zinc coated products and partially offset by decrease in gross margin for plain surface PC strands and others.
• Operating margin improved by approximately two points to 6.2% for the three months ended March 31, 2015 from 4.3% for the same period of last year.

Dr. Liang Tang, Chairman of Ossen Innovation, commented: "The overall business environment remained challenging for us during the first quarter of 2015 as China's economy continued to lose steam with its GDP growth hitting the lowest point in six years to just 7.0%, leading to a 4.5% year-over-year decrease in our total revenues. However, we continued to execute well and improved net income and gross and operating margins significantly on a year-over-year basis, leading to an EPS of $0.04 for the first quarter of 2015 from $0.02 for the same period of last year."  

For the three months ended March 31, 2015, revenues decreased by $1.3 million, or 4.5%, to $26.8 million from $28.0 million for the same period of last year, mainly due to weakness in rare earth coated products sales and partially offset by strength in zinc coated, plain surfaced and others products. The sales of coated PC steel materials, including both rare earth and zinc coated products, decreased by $4.4 million, or 16.6%, to $22.1 million and accounted for 83% of total sales for the three months ended March 31, 2015. The sales of rare earth and zinc coated products were $18.2 million and $3.9 million, respectively, for the three months ended March 31, 2015, compared to $26.5 million and nil, respectively, for the same period of last year. The sales of plain surface PC strands and others increased by approximately $3.1 million, or 210.0%, to $4.6 million and accounted for 17% of total sales for the three months ended March 31, 2015 mainly due to increased sales volume of plain surface PC strands as well as sales of other products.

Gross profit increased by approximately $1.0 million, or 37.2%, to $3.6 million for the three months ended March 31, 2015 from $2.6 million for the same period of last year. Gross margin was 13.5% for the three months ended March 31, 2015, compared to 9.4% for the same period of last year. Gross margins for rare earth and zinc coated products were 11.6% and 26.2%, respectively, for the three months ended March 31, 2015, compared to 8.9% and nil, respectively, for the same period of last year. Gross margin for plain surface PC Strands and others was 11.3% for the three months ended March 31, 2015, compared to 19.1% for the same period of last year.

Selling expenses increased by $0.02 million, or 14.8%, to approximately $0.1 million for the three months ended March 31, 2015. General and administrative expenses increased by $0.5 million, or 36.9%, to $1.8 million for the three months ended March 31, 2015 mainly due to increase in the provision for bad debts. As a result, total operating expenses increased by $0.5 million, or 35.2%, to approximately $2.0 million for the three months ended March 31, 2015 from $1.4 million for the same period of last year.

Operating income was $1.7 million, or 6.2% of total revenues, for the three months ended March 31, 2015, compared to $1.2 million, or 4.3% of total revenues, for the same period of last year.

Net income increased by approximately $0.3 million, or 64.9%, to $0.9 million for the three months ended March 31, 2015 from $0.5 million for the same period of last year.

After deducting net income attributable to non-controlling interest, net income attributable to Ossen Innovation increased by $0.4 million, or 79.1%, to $0.9 million for the three months ended March 31, 2015 from $0.5 million for the same period of last year. Earnings per share, both basic and diluted, were $0.04 for the three months ended March 31, 2015, versus $0.02 for the same period of last year.

Balance Sheet and Cash Flows

The Company had approximately $10.8 million of cash and restricted cash as of March 31, 2015, compared to $18.3 million at December 31, 2014. Accounts receivable were $68.7 million as of March 31, 2015, compared to $53.8 million at December 31, 2014. The days of sales of outstanding (DSO) were 206 days for the three months ended March 31, 2015 compared to 151 days for the year of 2014. The increase in DSO is attributable to the higher accounts receivable as of March 31, 2015 pushing the Company higher than its historical range. The balance of prepayment to suppliers for raw materials totaled $54.1 million as of March 31, 2015, compared to $56.3 million at December 31, 2014. The Company had inventories of $16.0 million as of March 31, 2015, compared to $20.1 million at the end of 2014. Total working capital was $109.7 million as of March 31, 2015, compared to $108.0 million at December 31, 2014.

Net cash provided by operating activities was $3.6 million for the three months ended March 31, 2015, compared to net cash used in operating activities of $1.1 million for the same period of last year. Net cash used in investing activities was $0.016 million for the three months ended March 31, 2015, compared to $0.001 million for the same period of last year. Net cash used in financing activities was $4.1 million for the three months ended March 31, 2015, compared to $0.1 million for the same period of last year.

Conference Call

To attend the call, please use the information below for either dial-in access or webcast access. When prompted on dial-in, ask for "Ossen Innovation First Quarter 2015 Conference Call" or be prepared to utilize the conference ID.

Please dial in at least 10 minutes before the call to ensure timely participation. A playback will be available through July 7, 2015. To listen, please call +1-855-452-5696 within the United States or +1-646-254-3697 if calling internationally. Utilize the pass code 71214017 for the replay.

This call is being webcast and can be accessed by clicking on this link: http://edge.media-server.com/m/p/jh9aiioi.

About Ossen Innovation Co., Ltd.

Ossen Innovation Co., Ltd. manufactures and sells a wide variety of plain surface pre-stressed steel materials and rare earth coated and zinc coated pre-stressed steel materials. The Company's products are mainly used in the construction of bridges, as well as in highways 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, as amended. 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.
Feng Peng, Chief Financial Officer
Email: [email protected]
Phone: +86-21-6888-8886
Web: www.osseninnovation.com

Investor Relations
Weitian Group LLC
Phone: +1-917-609-0333
Email: [email protected]

 

 

 

SOURCE Ossen Innovation Co., Ltd.

Related Links

http://www.osseninnovation.com