BEIJING, May 21, 2014 /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
2014 ended March 31, 2014.
Highlights
- Revenues were RMB70.7 million or
US$11.4 million, compared with
RMB76.6 million in the same period of
2013.
- A sample diffusion film (a type of TFT-LCD optical film) was
delivered to clients and we are making improvements and
modifications based on the client's initial positive feedback. We
expect that it will be manufactured in small batches by the third
production line in the near future. In addition, a sample base film
for solar backsheet has been delivered to clients for testing.
- On May 12, 2014, the Company
issued a press release announcing that the Company has learned that
the successful bidder, Shandong SNTON Optical Materials Technology
Co., Ltd. ("SNTON") in the fifth public auction of 6,912,503 (or
52.9%) of the Company's outstanding ordinary shares (the "Apex
Shares") held on March 25, 2014, was
entrusted by Hongkong Ruishang International Trade Co., Ltd., a
Hong Kong corporation ("Hongkong
Ruishang"), to handle all the formalities and procedures in
connection with the public auction. Weifang City State-Owned Assets
Operation Administration Company (the "Administration Company")
originally held the Apex Shares indirectly through an intermediate
holding company, Apex Glory Holdings Limited, a British Virgin Islands corporation.
- On May 14, 2014, the Company
announced it had received a notification from its new shareholder,
Shandong Fuhua Investment Company Limited ("Shandong Fuhua") with
respect to an ownership transfer from Weifang- City State-Owned
Assets Operation Administration Company (the "Administration
Company") to Shandong Fuhua of the Company's 12.55% outstanding
ordinary shares (the "Easebright Shares"). The Administration
Company originally held the Shares indirectly through an
intermediate holding company, Easebright Investments Limited
("Easebright"). As a result of this transfer, Shandong Fuhua
indirectly owns Easebright Shares through Easebright.
Mr. Xiaoan He, Chairman and CEO
of Fuwei Films, commented, "The first quarter financial results
continue to reflect weakened market conditions due to intensified
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 weather the current down
cycle while increasing the ratio of high-valued films. I am pleased
to announce that the preliminary test of a sample diffusion film (a
type of TFT-LCD optical film) was delivered demonstrating our
ability to better serve our customers through expanded product
offerings. I am also pleased to announce that our controlling
shareholder, a government entity, has transferred its ownership to
a private company which we believe will enable our management to
realign its strategic goals and will allow the Company to obtain
more effective support in the fierce marketplace."
First Quarter 2014 Results
Net sales during the first quarter ended March 31, 2014 were RMB70.7 million or US$11.4
million, compared to RMB76.6
million, during the same period in 2013, representing a
decrease of RMB5.9 million or 7.7%,
mainly due to the reduction of average sales price by 8% arising
from stronger competition in China
and reduced prices of main raw materials.
Overseas sales for the first quarter 2014 were RMB10.5 million or US$1.7
million, or 14.8% of total revenues, compared with
RMB12.6 million or 16.5% of total
revenues in the first quarter of 2013, representing a decrease of
RMB2.1 million or 16.7%. The
reduction of average sales price caused a decrease of RMB0.9 million and the decrease in sales volume
resulted in a decrease of RMB1.2
million. The decrease in overseas sales was mainly due to
the lower demand from international markets and enhanced
competition as well as anti-dumping measures taken by the
USA and South Korea, which led to a decrease in orders
from the overseas markets compared to the same period of 2013.
The following is a breakdown of domestic versus overseas sales
for the three-month periods ended March 31,
2014 and 2013 (amount in thousands except percentages):
|
|
Three-Month Period
Ended
|
|
|
March 31, 2014
|
% of Total
|
March 31, 2013
|
% of Total
|
|
|
RMB
|
US$
|
RMB
|
Sales in
China
|
|
60,238
|
9,690
|
85.2%
|
63,979
|
83.5%
|
Sales in other
countries
|
|
10,467
|
1,684
|
14.8%
|
12,598
|
16.5%
|
|
|
|
|
|
|
|
Total
|
|
70,705
|
11,374
|
100.0%
|
76,577
|
100.0%
|
Our gross loss was RMB0.07 million
or US$0.01 million for the first
quarter ended March 31, 2014,
representing a gross loss margin of 0.1%, as compared to a gross
loss margin of 1.6% for the same period in 2013. Our average
product sales prices decreased by 8.0% compared to the same period
in 2013 while the average cost of goods sold decreased by 9.0%
compared to the same period last year. Consequently, the decrease
in cost of goods sold exceeded that in sales revenue during the
first quarter ended March 31, 2014,
which contributed to the slight improvement in our gross loss
margin compared with the same period in 2013.
Operating expenses for the first quarter ended March 31, 2014 were RMB10.4 million or US$1.7
million, which was RMB3.3
million, or 24.1% lower than the same period in 2013. This
decrease was mainly due to decreased R&D expenditures and
transportation expenses in the first quarter of 2014.
Net loss attributable to the Company during the first quarter
ended March 31, 2014 was RMB13.3 million or US$2.1
million, compared to net loss attributable to the Company of
RMB18.1 million during the same
period in 2013, representing a decrease of RMB4.8 million for the same period in 2013 due to
the factors described above.
Basic and diluted net loss per share was RMB1.02 or US$0.16,
compared with basic and diluted net loss per share of RMB1.38 in the first quarter of 2013.
Total shareholders' equity was RMB447.0
million or US$71.9 million as
of March 31, 2014, compared with
RMB460.3 million as of December 31, 2013.
As of March 31, 2014, the Company
had 13,062,500 basic and diluted total ordinary shares
outstanding.
Conference Call Information
The Company will host a teleconference on Thursday, May 22, 2014, 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: 13582855. The replay will be available
until June 22, 2014, 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'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 short and
long-term effects of the global financial crisis on the Company and
the BOPET film industry; 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:
Ms Xiaoli Yu
Investor Relations Officer
Phone: +86-133-615-59266
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 MARCH 31,
2014 AND DECEMBER 31, 2013
(amounts in thousands
except share and per share value)
(Unaudited)
|
|
|
|
|
|
|
|
March 31, 2014
|
|
December 31, 2013
|
|
|
RMB
|
US$
|
|
RMB
|
ASSETS
|
Current
assets
|
|
|
|
|
|
Cash and cash
equivalents
|
|
2,877
|
463
|
|
11,578
|
Restricted
cash
|
|
39,438
|
6,344
|
|
41,422
|
Accounts and bills
receivable, net
|
|
8,968
|
1,443
|
|
8,373
|
Inventories
|
|
38,810
|
6,243
|
|
38,454
|
Advance to
suppliers
|
|
6,987
|
1,124
|
|
6,977
|
Prepayments and other
receivables
|
|
24,806
|
3,990
|
|
26,107
|
Deferred tax assets -
current
|
|
1,774
|
285
|
|
1,702
|
Total current
assets
|
|
123,660
|
19,892
|
|
134,613
|
|
|
|
|
|
|
Plant, properties and
equipment, net
|
|
514,346
|
82,740
|
|
524,777
|
Construction in
progress
|
|
366
|
59
|
|
632
|
Lease prepayments,
net
|
|
18,868
|
3,035
|
|
18,999
|
Advance to suppliers
- long term, net
|
|
2,945
|
474
|
|
2,134
|
Long-term
deposit
|
|
16,760
|
2,696
|
|
16,760
|
Other
Assets
|
|
13,170
|
2,119
|
|
13,244
|
Deferred tax assets -
non current
|
|
20,853
|
3,355
|
|
20,888
|
|
|
|
|
|
|
Total
assets
|
|
710,968
|
114,370
|
|
732,047
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
Current
liabilities
|
|
|
|
|
|
Short-term
borrowings
|
|
105,000
|
16,891
|
|
105,000
|
Accounts
payables
|
|
33,372
|
5,368
|
|
33,454
|
Notes
payable
|
|
78,005
|
12,548
|
|
81,990
|
Advance from
customers
|
|
13,223
|
2,127
|
|
14,665
|
Accrued expenses and
other payables
|
6,625
|
1,066
|
|
6,777
|
Obligations under
capital leases-current
|
|
8,450
|
1,359
|
|
8,314
|
Total current
liabilities
|
|
244,675
|
39,359
|
|
250,200
|
|
|
|
|
|
|
Obligations under
capital leases
|
|
6,398
|
1,029
|
|
8,563
|
Long-term
loan
|
|
10,000
|
1,609
|
|
10,000
|
Deferred tax
liabilities
|
|
3,674
|
591
|
|
3,736
|
|
|
|
|
|
|
Total
liabilities
|
|
264,747
|
42,588
|
|
272,499
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
Shareholders'
equity
|
|
|
|
|
|
Registered capital (of US$0.129752 par value;
20,000,000 shares authorized; 13,062,500 issued and
outstanding)
|
|
13,323
|
2,143
|
|
13,323
|
Additional paid-in
capital
|
|
311,907
|
50,175
|
|
311,907
|
Statutory
reserve
|
|
37,441
|
6,023
|
|
37,441
|
Retained
earnings
|
|
83,111
|
13,370
|
|
96,370
|
Cumulative
translation adjustment
|
|
1,218
|
196
|
|
1,266
|
Total
shareholders' equity
|
|
447,000
|
71,907
|
|
460,307
|
Non-controlling
interest
|
|
(779)
|
(125)
|
|
(759)
|
Total
equity
|
|
446,221
|
71,782
|
|
459,548
|
Total liabilities
and equity
|
|
710,968
|
114,370
|
|
732,047
|
FUWEI FILMS
(HOLDINGS) CO., LTD. AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(LOSS)
FOR THE
THREE-MONTH PERIOD ENDED MARCH 31, 2014 AND 2013
(amounts in thousands
except share and per share value)
(Unaudited)
|
|
|
|
|
|
The Three-Month
Period Ended March 31,
|
|
|
2014
|
|
2013
|
|
|
RMB
|
US$
|
|
RMB
|
Net sales
|
|
70,705
|
11,374
|
|
76,577
|
Cost of
sales
|
|
70,774
|
11,385
|
|
77,768
|
|
|
|
|
|
|
Gross loss
|
|
(69)
|
(11)
|
|
(1,191)
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
Selling
expenses
|
|
3,359
|
540
|
|
4,345
|
Administrative
expenses
|
|
7,054
|
1,135
|
|
9,306
|
Total operating
expenses
|
|
10,413
|
1,675
|
|
13,651
|
|
|
|
|
|
|
Operating
loss
|
|
(10,482)
|
(1,686)
|
|
(14,842)
|
|
|
|
|
|
|
Other income
(expense)
|
|
|
|
|
|
- Interest
income
|
|
380
|
61
|
|
61
|
- Interest
expense
|
|
(3,168)
|
(510)
|
|
(3,217)
|
- Others (expense)
income, net
|
|
(88)
|
(14)
|
|
(101)
|
|
|
|
|
|
|
Total other
expense
|
|
(2,876)
|
(463)
|
|
(3,257)
|
|
|
|
|
|
|
Loss before provision
for income taxes
|
|
(13,358)
|
(2,149)
|
|
(18,099)
|
|
|
|
|
|
|
Income tax
benefit
|
|
99
|
16
|
|
23
|
|
|
|
|
|
|
Net
loss
|
|
(13,259)
|
(2,133)
|
|
(18,076)
|
|
|
|
|
|
|
Net loss attributable
to non-controlling interests
|
|
-
|
-
|
|
-
|
Net loss attributable
to the Company
|
|
(13,259)
|
(2,133)
|
|
(18,076)
|
|
|
|
|
|
|
Other comprehensive
income
|
|
|
|
|
|
- Foreign currency translation adjustments attributable to
non-controlling interest
|
|
(20)
|
(3)
|
|
2
|
- Foreign currency translation adjustments attributable to the
Company
|
|
(48)
|
(8)
|
|
11
|
|
|
|
|
|
|
Comprehensive (loss) income attributable to non-controlling
interest
|
|
(20)
|
(3)
|
|
2
|
Comprehensive loss
attributable to the Company
|
|
(13,307)
|
(2,141)
|
|
(18,065)
|
|
|
|
|
|
|
Loss per share,
Basic and
diluted
|
|
(1.02)
|
(0.16)
|
|
(1.38)
|
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, 2014 AND 2013
(amounts in thousands
except share and per share value)
(Unaudited)
|
|
|
|
|
|
The Three-Month Period Ended March 31,
|
|
|
2014
|
|
2013
|
|
|
RMB
|
US$
|
|
RMB
|
Cash flow from
operating activities
|
|
|
|
|
|
Net loss
|
|
(13,259)
|
(2,133)
|
|
(18,076)
|
Adjustments to
reconcile net loss to net cash
|
|
|
|
|
|
used in operating
activities
|
|
|
|
|
|
- Depreciation of
property, plant and equipment
|
|
12,069
|
1,941
|
|
12,197
|
- Amortization of
intangible assets
|
|
132
|
21
|
|
131
|
- Deferred income
taxes
|
|
(99)
|
(16)
|
|
(23)
|
- Bad debt
expense
|
|
477
|
77
|
|
376
|
Changes in operating
assets and liabilities
|
|
|
|
|
|
- Accounts and bills
receivable
|
|
(1,072)
|
(172)
|
|
7,035
|
-
Inventories
|
|
(355)
|
(57)
|
|
(14,714)
|
- Advance to
suppliers
|
|
(10)
|
(2)
|
|
8,850
|
- Prepaid expenses
and other current assets
|
|
(264)
|
(42)
|
|
(1,379)
|
- Accounts
payable
|
|
(82)
|
(13)
|
|
1,258
|
- Accrued expenses
and other payables
|
|
(219)
|
(35)
|
|
264
|
- Advance from
customers
|
|
(1,443)
|
(232)
|
|
3,385
|
- Tax
payable
|
|
1,639
|
264
|
|
(2,605)
|
|
|
|
|
|
|
Net cash used in
operating activities
|
|
(2,486)
|
(399)
|
|
(3,301)
|
|
|
|
|
|
|
Cash flow from
investing activities
|
|
|
|
|
|
Purchases of
property, plant and equipment
|
|
(1,639)
|
(264)
|
|
(213)
|
Restricted cash
related to trade finance
|
|
1,992
|
320
|
|
(27,371)
|
Advanced to suppliers
- non current
|
|
(811)
|
(130)
|
|
(1,034)
|
Amount change in
construction in progress
|
|
265
|
43
|
|
(1,862)
|
|
|
|
|
|
|
Net cash used in
investing activities
|
|
(193)
|
(31)
|
|
(30,480)
|
|
|
|
|
|
|
Cash flow from
financing activities
|
|
|
|
|
|
Principal payments of
short-term bank loans
|
|
-
|
-
|
|
-
|
Proceeds from
short-term bank loans
|
|
-
|
-
|
|
2,032
|
Payment of capital
lease obligation
|
|
(2,028)
|
(326)
|
|
(2,091)
|
Change in notes
payable
|
|
(3,985)
|
(641)
|
|
53,773
|
Proceeds from
sale-leaseback equipment
|
|
-
|
-
|
|
5,000
|
|
|
|
|
|
|
Net cash (used in)
provided by financing activities
|
|
(6,013)
|
(967)
|
|
58,714
|
|
|
|
|
|
|
Effect of foreign
exchange rate changes
|
|
(9)
|
(53)
|
|
(1)
|
|
|
|
|
|
|
Net (decrease)
increase in cash and cash equivalent
|
|
(8,701)
|
(1,450)
|
|
24,932
|
|
|
|
|
|
|
Cash and cash
equivalent
|
|
|
|
|
|
At beginning of
period/year
|
|
11,578
|
1,913
|
|
5,006
|
At end of
period/year
|
|
2,877
|
463
|
|
29,938
|
|
|
|
|
|
|
SUPPLEMENTARY
DISCLOSURE:
|
Interest
paid
|
|
3,168
|
510
|
|
3,217
|
Income tax
paid
|
|
-
|
-
|
|
-
|
|
|
|
|
|
|
SUPPLEMENTARY
SCHEDULE OF NONCASH INVESTING AND FINANCIAL
ACTIVITIES:
|
Account payable for
plant and equipment:
|
|
8,275
|
1,331
|
|
5,053
|
Obligations for
acquired equipment under capital lease:
|
|
14,848
|
2,389
|
|
22,909
|
SOURCE Fuwei Films (Holdings) Co., Ltd.