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

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Aug 12, 2011, 08:30 ET

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: [email protected]
Phone: +86 (21) 6888-8886
Web: www.osseninnovation.com

Investor Relations
MZ-HCI
Ted Haberfield, President
Phone: +1-760-755-2716
Email: [email protected]
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