BEIJING, Nov. 20, 2013 /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 third quarter
ended September 30, 2013.
Mr. Xiaoan He, Chairman and CEO
of Fuwei Films, said, "We are still facing strong competition
arising from increased supply over demand in China's BOPET market as well as the overseas
market which is impacting the Company's quarterly results. However,
I am pleased to report that we have made progress in the
construction of our third production line for thick films, which we
believe, remains a key driver of the Company's long-term growth
strategy and profitability. As of September
2013, our third production line has been approved and as a
result, we believe we can sustain stable production for common
thick films ranging from thickness of 38μm to 250μm. In addition, a
sample diffusion film (a type of TFT-LCD optical films) has been
delivered to a client for testing. This type of diffusion film will
be produced in small batches if the test is well received. We
believe the addition of the third line is a sound strategy that
will help us deliver long-term value for our shareholders."
Third Quarter 2013 Results
Revenues for the third quarter ended September 30, 2013 were RMB75.9 million (US$12.4
million), representing a decrease of 14.5% from RMB88.8 million in the third quarter of 2012. The
decrease in revenues was due to the reduction of average sales
price by 6.3% driven by stronger competition in China and a simultaneous decrease in total
sales volumes by 8.8%.
Overseas sales in the third quarter of 2013 were RMB12.8 million or US$2.1
million, or 16.9% of total revenues, compared with
RMB19.5 million or 22% of total
revenues in the third quarter of 2012. The decrease in overseas
sales was mainly due to enhanced competition from international
markets as well as anti-dumping measures taken by the USA and South
Korea, which led to a decrease in orders from the overseas
markets compared to the third quarter of 2012.
The following is a breakdown of domestic versus overseas sales
for the three-month periods ended September
30, 2013 and 2012 (amounts in thousands):
Three-Month Period
Ended
|
|
|
September 30,
2013
|
% of
Total
|
September 30,
2012
|
% of
Total
|
|
|
RMB
|
US$
|
RMB
|
Sales in
China
|
|
63,064
|
10,305
|
83.1%
|
69,240
|
78.0%
|
Sales in other
countries
|
|
12,826
|
2,095
|
16.9%
|
19,521
|
22.0%
|
|
|
|
|
|
|
|
|
|
75,890
|
12,400
|
100.0%
|
88,761
|
100.0%
|
Gross loss was RMB9.9 million
(US$1.6 million) for the third
quarter ended September 30, 2013,
representing a gross loss rate of 13.0%, as compared to a gross
profit rate of 1.0% for the same period in 2012. Correspondingly,
gross loss rate increased by 14.0 percentage points compared to the
same period in 2012. Our average product sales prices decreased by
6.3% compared to the same period last year while the average cost
of goods sold increased by 7.0% compared to the same period last
year. Consequently, the amount of decrease in sales revenue
together with the increase in cost of goods sold during the third
quarter ended September 30, 2013
compared with the same period in 2012, resulted in an increase in
our gross loss.
Operating expenses for the third quarter 2013 were RMB9.6 million (US$1.6
million), which was RMB3.8
million, or 28.4% lower than the same period in 2012. This
decrease was mainly due to the decrease in general and
administration expenses in the third quarter of 2013.
Operating loss for the third quarter of 2013 was RMB19.5 million (US$3.2
million), compared with operating loss of RMB12.5 million in the same period of 2012.
Net loss attributable to the Company for the third quarter of
2013 was RMB23.2 million
(US$3.8 million), compared with net
loss attributable to the Company of RMB14.9
million in the third quarter of 2012.
Basic and diluted net loss per share was RMB1.78 (US$0.29),
compared with basic and diluted net loss per share of RMB1.14 in the third quarter of 2012.
Total shareholders' equity was RMB459.8
million (US$75.1 million) as
of September 30, 2013, compared with
RMB519.2 million as of December 31, 2012.
As of September 30, 2013, the
Company had 13,062,500 basic and diluted total ordinary shares
outstanding.
On August 14, 2013, the Company
announced that it had received a notice from the its controlling
shareholder, the Weifang State-owned Assets Operation
Administration Company, a wholly-owned subsidiary of Weifang
State-owned Asset Management and Supervision Committee
(collectively, the "Administration Company") indicating that the
Administration Company had determined to place control over
6,912,503 (or 52.9%) of its outstanding ordinary shares up for sale
at a public auction to be held in China. To date, three public auctions have
been held in Jinan, Shandong Province, China, and the Company has learned that these
public auctions have failed due to a lack of bidders registered for
the auction. To date, the Company has not received any additional
notices relating to any further actions that may take place with
respect to such public auctions from its controlling
shareholder.
Conference Call Information
The Company will host a teleconference on Thursday, November 21, 2013 at 8:00 AM EST / 9:00
PM 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: 13572780. The replay will be available
until December 21, 2013, 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'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 possible
delisting of the Company's ordinary shares from the NASDAQ Global
Market; 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:
Mr. Yong Jiang
Board Secretary
Phone: +86 158 632 92177
Email: fuweiir@fuweifilms.com
In the U.S.:
Ms. 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 SEPTEMBER
30, 2013 AND DECEMBER 31, 2012
(amounts in thousands
except share and per share value)
(Unaudited)
|
|
|
September 30,
2013
|
|
December 31,
2012
|
|
RMB
|
US$
|
|
RMB
|
ASSETS
|
Current
assets
|
|
|
|
|
|
Cash and cash
equivalents
|
|
3,891
|
636
|
|
5,006
|
Restricted
cash
|
|
39,566
|
6,465
|
|
21,457
|
Accounts and bills
receivable, net
|
|
9,457
|
1,545
|
|
21,587
|
Inventories
|
|
41,247
|
6,740
|
|
34,291
|
Advance to
suppliers
|
|
6,449
|
1,054
|
|
13,543
|
Prepayments and other
receivables
|
|
29,139
|
4,761
|
|
26,174
|
Deferred tax assets -
current
|
|
1,749
|
286
|
|
1,857
|
Total current
assets
|
|
131,498
|
21,487
|
|
123,915
|
|
|
|
|
|
|
Property, plant and
equipment, net
|
|
197,262
|
32,232
|
|
233,335
|
Construction in
progress
|
|
334,618
|
54,676
|
|
337,990
|
Lease prepayments,
net
|
|
19,130
|
3,126
|
|
19,523
|
Advance to suppliers
- long term, net
|
|
5,222
|
853
|
|
5,299
|
Long-term
deposit
|
|
16,760
|
2,739
|
|
16,760
|
Other
Assets
|
|
13,393
|
2,188
|
|
262
|
Deferred tax assets -
non current
|
|
10,360
|
1,693
|
|
10,466
|
|
|
|
|
|
|
Total
assets
|
|
728,243
|
118,994
|
|
747,550
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
Current
liabilities
|
|
|
|
|
|
Short-term
borrowings
|
|
106,432
|
17,391
|
|
110,000
|
Accounts
payables
|
|
36,273
|
5,927
|
|
28,796
|
Notes
payable
|
|
73,393
|
11,992
|
|
38,299
|
Advance from
customers
|
|
13,918
|
2,274
|
|
11,714
|
Accrued expenses and
other payables
|
6,861
|
1,121
|
|
6,831
|
Obligations under
capital leases-current
|
|
8,180
|
1,337
|
|
6,282
|
Total current
liabilities
|
|
245,057
|
40,042
|
|
201,922
|
|
|
|
|
|
|
Obligations under
capital leases
|
|
10,692
|
1,747
|
|
13,718
|
Long-term
loan
|
|
10,000
|
1,634
|
|
10,000
|
Deferred tax
liabilities
|
|
3,469
|
567
|
|
3,476
|
|
|
|
|
|
|
Total
liabilities
|
|
269,218
|
43,990
|
|
229,116
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
Shareholders'
equity
|
|
|
|
|
|
Registered capital(of
US$0.129752 par value; 20,000,000 shares authorized; 13,062,500
issued and outstanding)
|
|
13,323
|
2,177
|
|
13,323
|
Additional paid-in
capital
|
|
311,907
|
50,965
|
|
311,907
|
Statutory
reserve
|
|
37,441
|
6,118
|
|
37,441
|
Retained
earnings
|
|
95,871
|
15,665
|
|
155,341
|
Cumulative
translation adjustment
|
|
1,253
|
205
|
|
1,222
|
Total
shareholders' equity
|
|
459,795
|
75,130
|
|
519,234
|
Non-controlling
interest
|
|
(770)
|
(126)
|
|
(800)
|
Total
equity
|
|
459,025
|
75,004
|
|
518,434
|
Total liabilities
and equity
|
|
728,243
|
118,994
|
|
747,550
|
FUWEI FILMS
(HOLDINGS) CO., LTD. AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(LOSS)
FOR THE THREE- AND
NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2013 AND 2012
(amounts in thousands
except share and per share value)
(Unaudited)
|
|
|
The Three-Month
Period Ended September 30,
|
The Nine-Month
Period Ended September 30,
|
|
|
2013
|
|
2012
|
2013
|
|
2012
|
|
RMB
|
US$
|
|
RMB
|
RMB
|
US$
|
|
RMB
|
Net sales
|
|
75,890
|
12,400
|
|
88,761
|
229,868
|
37,560
|
|
272,196
|
Cost of
sales
|
|
85,747
|
14,011
|
|
87,895
|
243,223
|
39,742
|
|
272,475
|
|
|
|
|
|
|
|
|
|
|
Gross (loss)
profit
|
|
(9,857)
|
(1,611)
|
|
866
|
(13,355)
|
(2,182)
|
|
(279)
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
Selling
expenses
|
|
3,991
|
652
|
|
4,561
|
11,961
|
1,954
|
|
13,325
|
Administrative
expenses
|
|
5,635
|
921
|
|
8,801
|
24,926
|
4,073
|
|
22,618
|
Total operating
expenses
|
|
9,626
|
1,573
|
|
13,362
|
36,887
|
6,027
|
|
35,943
|
|
|
|
|
|
|
|
|
|
|
Operating
loss
|
|
(19,483)
|
(3,184)
|
|
(12,496)
|
(50,242)
|
(8,209)
|
|
(36,222)
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense)
|
|
|
|
|
|
|
|
|
|
- Interest
income
|
|
494
|
81
|
|
83
|
835
|
136
|
|
2,592
|
- Interest
expense
|
|
(3,566)
|
(583)
|
|
(2,564)
|
(9,447)
|
(1,544)
|
|
(8,621)
|
- Others income
(expense), net
|
|
(265)
|
(43)
|
|
126
|
(393)
|
(64)
|
|
475
|
|
|
|
|
|
|
|
|
|
|
Total other income
(expense)
|
|
(3,337)
|
(545)
|
|
(2,355)
|
(9,005)
|
(1,472)
|
|
(5,554)
|
|
|
|
|
|
|
|
|
|
|
Loss before provision
for income taxes
|
|
(22,820)
|
(3,729)
|
|
(14,851)
|
(59,247)
|
(9,681)
|
|
(41,776)
|
|
|
|
|
|
|
|
|
|
|
Income tax
expense
|
|
(366)
|
(60)
|
|
(12)
|
(207)
|
(34)
|
|
(133)
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
(23,186)
|
(3,789)
|
|
(14,863)
|
(59,454)
|
(9,715)
|
|
(41,909)
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to noncontrolling interests
|
|
17
|
3
|
|
(7)
|
16
|
3
|
|
(9)
|
Net loss attributable
to the Company
|
|
(23,203)
|
(3,792)
|
|
(14,856)
|
(59,470)
|
(9,718)
|
|
(41,900)
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive
income
|
|
|
|
|
|
|
|
|
|
- Foreign currency
translation adjustments attributable to noncontrolling
interest
|
|
2
|
0
|
|
9
|
14
|
2
|
|
1
|
- Foreign currency
translation adjustments attributable to the Company
|
|
1
|
0
|
|
9
|
31
|
5
|
|
(17)
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income
(loss) attributable to non-controlling interest
|
|
19
|
3
|
|
2
|
30
|
5
|
|
(8)
|
Comprehensive loss
attribute to the Company
|
|
(23,202)
|
(3,792)
|
|
(14,847)
|
(59,439)
|
(9,713)
|
|
(41,917)
|
|
|
|
|
|
|
|
|
|
|
Loss per share,
Basic and diluted
|
|
(1.78)
|
(0.29)
|
|
(1.14)
|
(4.55)
|
(0.74)
|
|
(3.21)
|
Weighted average
number ordinary shares,
Basic and diluted
|
|
13,062,500
|
13,062,500
|
|
13,062,500
|
13,062,500
|
13,062,500
|
|
13,062,500
|
FUWEI FILMS
(HOLDINGS) CO., LTD. AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE-MONTH
PERIODS ENDED SEPTEMBER 30, 2013 AND 2012
(amounts in thousands
except share and per share value)
(Unaudited)
|
|
|
The Nine-Month
Period Ended September 30,
|
|
|
2013
|
|
2012
|
|
|
RMB
|
US$
|
|
RMB
|
Cash flow from
operating activities
|
|
|
|
|
|
Net loss
|
|
(59,454)
|
(9,715)
|
|
(41,909)
|
Adjustments to
reconcile net (loss) income to net cash (used in) provided by
operating activities
|
|
|
|
|
|
- Loss/(Gain) on
disposal of property, plant and equipment
|
|
-
|
-
|
|
(35)
|
- Depreciation of
property, plant and equipment
|
|
36,401
|
5,948
|
|
36,537
|
- Amortization of
intangible assets
|
|
393
|
64
|
|
340
|
- Deferred income
taxes
|
|
207
|
34
|
|
133
|
- Bad debt (recovery)
expense
|
|
(87)
|
(14)
|
|
(236)
|
Changes in operating
assets and liabilities
|
|
|
|
|
|
- Accounts and bills
receivable
|
|
12,218
|
1,996
|
|
35,040
|
-
Inventories
|
|
(6,957)
|
(1,137)
|
|
1,863
|
- Advance to
suppliers
|
|
7,094
|
1,159
|
|
(9,186)
|
- Prepaid expenses
and other current assets
|
|
(303)
|
(50)
|
|
28,216
|
- Accounts
payable
|
|
7,478
|
1,222
|
|
3,210
|
- Accrued expenses
and other payables
|
|
92
|
15
|
|
653
|
- Advance from
customers
|
|
2,205
|
360
|
|
7,009
|
- Tax
payable
|
|
(2,663)
|
(435)
|
|
(19,399)
|
|
|
|
|
|
|
Net cash (used in)
provided by operating activities
|
|
(3,376)
|
(553)
|
|
42,236
|
|
|
|
|
|
|
Cash flow from
investing activities
|
|
|
|
|
|
Purchases of
property, plant and equipment
|
|
(328)
|
(54)
|
|
(5,452)
|
Restricted cash
related to trade finance
|
|
(18,115)
|
(2,960)
|
|
53,043
|
Advance to suppliers
- non current
|
|
77
|
13
|
|
25,257
|
Amount change in
construction in progress
|
|
(9,759)
|
(1,595)
|
|
(157,673)
|
Proceeds from sale of
property, plant and equipment
|
|
-
|
-
|
|
250
|
|
|
|
|
|
|
Net cash used in
investing activities
|
|
(28,125)
|
(4,596)
|
|
(84,575)
|
|
|
|
|
|
|
Cash flow from
financing activities
|
|
|
|
|
|
Principal payments of
short-term bank loans
|
|
(110,000)
|
(17,974)
|
|
(168,501)
|
Proceeds from
short-term bank loans
|
|
106,432
|
17,391
|
|
120,000
|
Payment of capital
lease obligation
|
|
(6,128)
|
(1,001)
|
|
-
|
Change in notes
payable
|
|
35,094
|
5,734
|
|
62,459
|
Proceeds from
sale-leaseback equipment
|
|
5,000
|
817
|
|
-
|
|
|
|
|
|
|
Net cash provided by
financing activities
|
|
30,398
|
4,967
|
|
13,958
|
|
|
|
|
|
|
Effect of foreign
exchange rate changes
|
|
(12)
|
14
|
|
(24)
|
|
|
|
|
|
|
Net decrease in cash
and cash equivalent
|
|
(1,115)
|
(168)
|
|
(28,405)
|
|
|
|
|
|
|
Cash and cash
equivalent
|
|
|
|
|
|
At beginning of
period/year
|
|
5,006
|
804
|
|
44,172
|
At end of
period/year
|
|
3,891
|
636
|
|
15,767
|
|
|
|
|
|
|
SUPPLEMENTARY
DISCLOSURE:
|
|
|
|
|
|
Interest
paid
|
|
9,447
|
1,544
|
|
8,621
|
Income tax
paid
|
|
-
|
-
|
|
-
|
|
|
|
|
|
|
SUPPLEMENTARY
SCHEDULE OF NONCASH INVESTING AND FINANCIAL
ACTIVITIES:
|
Account payable for
plant and equipment:
|
|
8,445
|
1,380
|
|
3,834
|
Obligations for
acquired equipment under capital lease:
|
|
18,872
|
3,084
|
|
-
|
SOURCE Fuwei Films (Holdings) Co., Ltd.