BEIJING, Nov. 5, 2015 /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 three and nine
months ended September 30, 2015.
Highlights
- Net sales during the third quarter ended September 30, 2015 were RMB65.7 million or US$10.3
million, compared to RMB69.2
million during the same period in 2014.
- Overseas sales were RMB16.1
million or US$2.5 million, or
24.5% of total revenues, compared with RMB11.8 million or 17.1% of total revenues in the
third quarter of 2014. The increase in overseas sales was mainly
due to the increase in sales volume.
- Gross profit was RMB3.8 million
or US$0.6 million for the third
quarter ended September 30, 2015,
representing a gross margin of 5.8%, as compared to a gross loss
rate of 4.5% for the same period in 2014.
- Basic and diluted net loss per share was RMB0.94 or US$0.15
and RMB1.36 for the three-month
period ended September 30, 2015 and
2014, respectively.
"We continue to face strong competition from emerging and
incumbent players which has created oversupply relative to demand
in the marketplace. While this has impacted the Company's financial
results, we intend to capitalize upon opportunities in
international markets. We believe that our focus on continued
innovation and R&D will enable the Company to expand end-user
applications and our high-end specialty films while increasing the
product portfolio, which we believe, will help us to attract new
clients and expand relationships with existing customers. We are
encouraged by positive trends in sales volume and gross margins
that we expect to enable us to weather different industry and
economic conditions in the periods ahead," commented by Mr.
Zengyong Wang, the CEO and Chairman of the Company.
Third Quarter 2015 Results
Net sales during the third quarter ended September 30, 2015 were RMB65.7 million or US$10.3
million, compared to RMB69.2
million during the same period in 2014, representing a
decrease of RMB3.5 million or 5.1%,
mainly due to the reduction of average sales price by 16.2% arising
from stronger competition in China
and large reduction in prices of main raw materials. The reduction
of average sales price caused a decrease of RMB12.6 million and the sales volume increase
caused an increase of RMB9.1
million.
In the third quarter of 2015, sales of specialty films were
RMB18.7 million or US$2.9 million representing 28.5% of our total
revenues as compared to RMB20.7
million or 30.0% in the same period of 2014, which was a
decrease of RMB2.0 million, or 9.7%
as compared to the same period in 2014. The reduction in average
sales price caused a decrease of RMB2.8
million and the increase in the sales volume caused an
increase of RMB0.8 million.
Overseas sales were RMB16.1
million or US$2.5 million, or
24.5% of total revenues, compared with RMB11.8 million or 17.1% of total revenues in the
third quarter of 2014. This is an increase of RMB4.3 million. The decrease in average sales
price caused a decrease of RMB2.6
million and the increase in sales volume resulted in an
increase of RMB6.9 million. The
increase in overseas sales was mainly due to the increase in sales
volume.
The following is a breakdown of PRC domestic and overseas sales
(amounts in thousands):
|
|
Three-Month Period
Ended
September 30, 2015
|
% of Total
|
Three-Month Period
Ended
September 30, 2014
|
% of Total
|
|
|
RMB
|
US$
|
RMB
|
Sales in
China
|
|
49,568
|
7,799
|
75.5%
|
57,405
|
82.9%
|
Sales in other
countries
|
|
16,102
|
2,534
|
24.5%
|
11,812
|
17.1%
|
|
|
|
|
|
|
|
|
|
65,670
|
10,333
|
100.0%
|
69,217
|
100.0%
|
Our gross profit was RMB3.8
million or US$0.6 million for
the third quarter ended September 30,
2015, representing a gross margin of 5.8%, as compared to a
gross loss rate of 4.5% for the same period in 2014.
Correspondingly, gross profit rate increased by 10.3 percentage
points compared to the same period in 2014. Our average product
sales prices decreased by 16.2% compared to the same period last
year and the average cost of goods sold decreased by 24.4% compared
to the same period last year. Consequently, the amount of decrease
in cost of goods sold was higher than that in the average sales
prices, which resulted in an increase in our gross profit.
Operating expenses for the third quarter ended September 30, 2015 were RMB14.5 million or US$2.3
million, which was RMB2.4
million, or 19.8% higher than the same period in 2014. This
increase was mainly due to depreciation charged to general and
administrative expenses during the accounting period when the
depreciation expense incurred as a result of lack of manufacturing
for the third production line in May and June 2015.
Net loss attributable to the Company during the third quarter
ended September 30, 2015 was
RMB12.3 million or US$1.9 million compared to net loss attributable
to the Company of RMB17.8million
during the same period in 2014, representing a decrease of
RMB5.5 million for the same period in
2014.
Nine Months 2015 Results
Net sales during the nine-month period ended September 30, 2015 were RMB185.2 million or US$29.1 million, compared to RMB209.9 million, during the same period in 2014,
representing a decrease of RMB24.7
million or 11.8%, mainly due to the reduction of average
sales price by 14.2% arising from stronger competition in
China together with reduction in
prices of main raw materials.
In the nine-month period ended September
30, 2015, sales of specialty films were RMB55.0 million or US$8.7million or 29.7% of our total revenues as
compared to RMB57.1 million or 27.2%
in the same period of 2014, which was a decrease of RMB2.1 million, or 3.7% as compared to the same
period in 2014. The reduction of average sales price caused a
decrease of RMB6.2 million and the
increase in the sales volume caused an increase of RMB4.1million.
Overseas sales during the nine months ended September 30, 2015 were RMB44.3 million or US$7.0
million, or 23.9% of total revenues, compared with
RMB33.4 million or 15.9% of total
revenues in the same period in 2014. This was RMB10.9 million higher than the same period in
2014. The increase in sales volume resulted in an increase of
RMB18.7 million and the decrease of
average sales price caused a decrease of RMB7.8 million. The increase in overseas sales
was mainly due to increases in sales volume.
Our gross loss was RMB3.7 million
or US$0.6 million for the first nine
months ended September 30, 2015,
representing a gross loss rate of 2.0%, as compared to a gross loss
rate of 6.0% for the same period in 2014. Correspondingly, gross
loss rate decreased by 4.0 percentages. Our average product sales
prices decreased by 14.2% compared to the same period last year
while the average cost of goods sold decreased by 17.5% compared to
the same period last year. Consequently, the amount of decrease in
cost of goods sold was higher than that in sales revenue during the
nine months ended September 30, 2015
compared with the same period in 2014, which resulted in a decrease
in our gross loss.
Operating expenses for the nine months ended September 30, 2015 were RMB36.4 million or US$5.7
million, compared to RMB32.9
million in the same period in 2014, which was RMB3.5 million or 10.6% higher than the same
period in 2014. This increase is mainly due to depreciation charged
to general and administrative expenses during the accounting period
when the depreciation expense incurred as a result of lack of
manufacturing for the third production line in May and June 2015.
Basic and diluted net loss per share was RMB0.94 or US$0.15
and RMB1.36 for the three-month
period ended September 30, 2015 and
2014, respectively.
Total shareholders' equity was RMB346.9
million or US$54.6 million as
of September 30, 2015, compared with
RMB388.9 million as of December 31, 2014.
As of September 30, 2015, the
Company had 13,062,500 basic and diluted total ordinary shares
outstanding.
Conference Call Information
The Company will host a teleconference on Friday, November 6, 2015, at 8:00 a.m. EST / 9:00
p.m. Beijing time to
discuss the financial results. To participate in the call, please
dial +1-877-407-9205 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: 13624211. The replay will be available
until December 6, 2015, 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; significant competition in the BOPET film industry,
especially the significant oversupply of BOPET films resulting from
the rapid growth of the Chinese BOPET industry capacity, changes in
the international market and trade barriers, especially the adverse
impact of the antidumping investigation and imposition of an
anti-dumping duty on imports of the BOPET films originating from
the People's Republic of China
("China") conducted by certain
main importing countries; fluctuations of RMB exchange rate, the
reduce in demand for the Company's products or the loss of main
customers which may result in the decrease of sales, and negatively
influencing the Company's financial performance, uncertainty as to
the future profitability, uncertainty as to the Company's ability
to successfully obtain additional funds to meet the working capital
needs of the new BOPET production line, uncertainty as to the
Company's ability to continuously develop new BOPET film products
to be produced by the third production line and keep up with
changes in BOPET film technology, risks associated with possible
defects and errors in its products including complaints and claims
from clients, uncertainty as to its ability to protect and enforce
its intellectual property rights, uncertainty as to its ability to
attract and retain qualified executives and personnel, and
uncertainty in acquiring raw materials on time and on acceptable
terms, particularly in light of the volatility in the prices of
petroleum products in recent years, instability of power and energy
supply, and the uncertainty regarding the future operation of the
Company in connection with the changes in the labor law in
China, the measures taken by the
Chinese government to save energy and reduce emissions, and the
complaints from nearby residents and local government about the
noise caused by our production as well as the uncertainty of the
impact of major shareholder transfer that have substantial
influence over the Company and the Company's business operation
including possible overlap of our BOPET products, customers and
market orientation with an BOPET film manufacturer, which is
controlled by the same individual who has control over the shares
of our major shareholder. 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 SEPTEMBER
30, 2015 AND DECEMBER 31, 2014
(amounts in thousands
except share and per share value)
(Unaudited)
|
|
|
September 30,
2015
|
|
December 31,
2014
|
|
RMB
|
US$
|
|
RMB
|
ASSETS
|
Current
assets
|
|
|
|
|
|
Cash and cash
equivalents
|
|
13,569
|
2,135
|
|
9,020
|
Restricted
cash
|
|
50,548
|
7,953
|
|
48,085
|
Accounts and bills
receivable, net
|
|
13,119
|
2,064
|
|
9,867
|
Inventories
|
|
34,689
|
5,458
|
|
24,034
|
Advance to
suppliers
|
|
9,198
|
1,447
|
|
7,512
|
Prepayments and other
receivables
|
|
21,983
|
3,459
|
|
18,772
|
Deferred tax assets -
current
|
|
1,759
|
277
|
|
2,794
|
Total current
assets
|
|
144,865
|
22,793
|
|
120,084
|
|
|
|
|
|
|
Property, plant and
equipment, net
|
|
449,108
|
70,663
|
|
482,534
|
Construction in
progress
|
|
1,289
|
203
|
|
366
|
Lease prepayments,
net
|
|
18,012
|
2,834
|
|
18,406
|
Advance to suppliers
- long term, net
|
|
1,098
|
173
|
|
722
|
Long-term
deposit
|
|
-
|
-
|
|
16,760
|
Other
Assets
|
|
11,830
|
1,861
|
|
12,500
|
Deferred tax assets -
non current
|
|
21,356
|
3,360
|
|
21,573
|
|
|
|
|
|
|
Total
assets
|
|
647,558
|
101,887
|
|
672,945
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
Current
liabilities
|
|
|
|
|
|
Long-term loan,
current portion
|
|
3,350
|
527
|
|
3,350
|
Due to related
parties
|
|
141,448
|
22,256
|
|
125,938
|
Accounts
payables
|
|
32,508
|
5,115
|
|
29,484
|
Notes
payable
|
|
98,266
|
15,461
|
|
95,539
|
Advance from
customers
|
|
5,095
|
802
|
|
3,392
|
Accrued expenses and
other payables
|
8,161
|
1,284
|
|
6,095
|
Obligations under
capital leases-current
|
|
1,960
|
308
|
|
8,259
|
Total current
liabilities
|
|
290,788
|
45,753
|
|
272,057
|
|
|
|
|
|
|
Obligations under
capital leases
|
|
-
|
-
|
|
303
|
Long-term
loan
|
|
4,975
|
783
|
|
6,650
|
Deferred tax
liabilities
|
|
5,705
|
898
|
|
5,816
|
|
|
|
|
|
|
Total
liabilities
|
|
301,468
|
47,434
|
|
284,826
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
Shareholders'
equity
|
|
|
|
|
|
Registered capital
(of US$0.129752 par value; 20,000,000 shares authorized; 13,062,500
issued and outstanding)
|
|
13,323
|
2,096
|
|
13,323
|
Additional paid-in
capital
|
|
311,907
|
49,076
|
|
311,907
|
Statutory
reserve
|
|
37,441
|
5,891
|
|
37,441
|
Retained
earnings
|
|
(16,858)
|
(2,652)
|
|
25,043
|
Cumulative
translation adjustment
|
|
1,095
|
171
|
|
1,199
|
Total
shareholders' equity
|
|
346,908
|
54,582
|
|
388,913
|
Non-controlling
interest
|
|
(818)
|
(129)
|
|
(794)
|
Total
equity
|
|
346,090
|
54,453
|
|
388,119
|
Total liabilities
and equity
|
|
647,558
|
101,887
|
|
672,945
|
|
The accompanying
notes are an integral part of these unaudited condensed
consolidated statements.
|
FUWEI FILMS
(HOLDINGS) CO., LTD. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(LOSS)
|
FOR THE THREE- AND
NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2015 AND 2014
|
(amounts in thousands
except share and per share value)
|
(Unaudited)
|
|
|
|
The Three-Month
Period Ended
|
|
The Nine-Month
Period
|
September
30,
|
|
Ended September
30,
|
|
2015
|
2014
|
|
2015
|
2014
|
|
RMB
|
US$
|
RMB
|
|
RMB
|
US$
|
RMB
|
Net
sales
|
65,670
|
10,333
|
69,217
|
|
185,155
|
29,133
|
209,906
|
Cost of
sales
|
61,876
|
9,736
|
72,326
|
|
188,899
|
29,722
|
222,582
|
|
|
|
|
|
|
|
|
Gross margin
(loss)
|
3,794
|
597
|
(3,109)
|
|
(3,744)
|
(589)
|
(12,676)
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
Selling
expenses
|
3,771
|
593
|
4,119
|
|
10,124
|
1,593
|
10,908
|
Administrative
expenses
|
10,774
|
1,695
|
7,979
|
|
26,264
|
4,132
|
22,037
|
Total operating
expenses
|
14,545
|
2,288
|
12,098
|
|
36,388
|
5,725
|
32,945
|
|
|
|
|
|
|
|
|
Operating
loss
|
(10,751)
|
(1,691)
|
(15,207)
|
|
(40,132)
|
(6,314)
|
(45,621)
|
|
|
|
|
|
|
|
|
Other income
(expense)
|
|
|
|
|
|
|
|
- Interest
income
|
207
|
33
|
392
|
|
945
|
149
|
1,032
|
- Interest
expense
|
(2,145)
|
(337)
|
(3,140)
|
|
(6,558)
|
(1,032)
|
(9,564)
|
- Others income
(expense), net
|
530
|
83
|
98
|
|
4,982
|
784
|
35
|
|
|
|
|
|
|
|
|
Total other
expense
|
(1,408)
|
(221)
|
(2,650)
|
|
(631)
|
(99)
|
(8,497)
|
|
|
|
|
|
|
|
|
Loss before provision
for income taxes
|
(12,159)
|
(1,912)
|
(17,857)
|
|
(40,763)
|
(6,413)
|
(54,118)
|
|
|
|
|
|
|
|
|
Income tax benefit
(expense)
|
(97)
|
(15)
|
83
|
|
(1,141)
|
(180)
|
103
|
|
|
|
|
|
|
|
|
Net
loss
|
(12,256)
|
(1,927)
|
(17,774)
|
|
(41,904)
|
(6,593)
|
(54,015)
|
|
|
|
|
|
|
|
|
Net loss attributable
to noncontrolling interests
|
(3)
|
-
|
(15)
|
|
(3)
|
-
|
(16)
|
Net loss attributable
to the Company
|
(12,253)
|
(1,927)
|
(17,759)
|
|
(41,901)
|
(6,593)
|
(53,999)
|
|
|
|
|
|
|
|
|
Other comprehensive
income (loss)
|
|
|
|
|
|
|
|
- Foreign currency
translation adjustments attributable to noncontrolling
interest
|
(21)
|
(3)
|
9
|
|
(21)
|
(3)
|
(10)
|
- Foreign currency
translation adjustments attributable to the Company
|
(55)
|
(9)
|
10
|
|
(104)
|
(16)
|
(45)
|
|
|
|
|
|
|
|
|
Comprehensive income
(loss) attributable to non-controlling interest
|
(24)
|
(3)
|
(6)
|
|
(24)
|
(3)
|
(26)
|
Comprehensive loss
attributable to the Company
|
(12,308)
|
(1,936)
|
(17,749)
|
|
(42,005)
|
(6,609)
|
(54,044)
|
|
|
|
|
|
|
|
|
Loss per
share,
|
|
|
|
|
|
|
|
Basic and
diluted
|
(0.94)
|
(0.15)
|
(1.36)
|
|
(3.21)
|
(0.51)
|
(4.13)
|
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
|
|
The
accompanying notes are an integral part of these unaudited
condensed consolidated statements.
|
FUWEI FILMS
(HOLDINGS) CO., LTD. AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE-MONTH
PERIODS ENDED SEPTEMBER 30, 2015 AND 2014
(amounts in thousands
except share and per share value)
(Unaudited)
|
|
|
The Nine-Month
Period Ended September 30,
|
|
|
2015
|
|
2014
|
|
|
RMB
|
US$
|
|
RMB
|
Cash flow from
operating activities
|
|
|
|
|
|
Net loss
|
|
(41,904)
|
(6,593)
|
|
(54,015)
|
Adjustments to
reconcile net loss to net cash used in operating
activities
|
|
|
|
|
|
- Depreciation of
property, plant and equipment
|
|
33,659
|
5,296
|
|
36,021
|
- Amortization of
intangible assets
|
|
393
|
62
|
|
393
|
- Deferred income
taxes
|
|
1,141
|
180
|
|
(103)
|
- Bad debt (recovery)
expense
|
|
(4,309)
|
(678)
|
|
261
|
Changes in operating
assets and liabilities
|
|
|
|
|
|
- Accounts and bills
receivable
|
|
(3,350)
|
(527)
|
|
(1,083)
|
-
Inventories
|
|
(10,655)
|
(1,676)
|
|
7,702
|
- Advance to
suppliers
|
|
(1,520)
|
(239)
|
|
1,536
|
- Prepaid expenses and
other current assets
|
|
(1,140)
|
(179)
|
|
112
|
- Accounts
payable
|
|
3,025
|
476
|
|
(8,304)
|
- Accrued expenses and
other payables
|
|
1,980
|
312
|
|
(141)
|
- Advance from
customers
|
|
1,704
|
268
|
|
(4,294)
|
- Tax
payable
|
|
(1,401)
|
(220)
|
|
3,028
|
|
|
|
|
|
|
Net cash used in
operating activities
|
|
(22,377)
|
(3,518)
|
|
(18,887)
|
|
|
|
|
|
|
Cash flow from
investing activities
|
|
|
|
|
|
Purchases of
property, plant and equipment
|
|
(233)
|
(37)
|
|
(5,396)
|
Restricted cash
related to trade finance
|
|
(2,455)
|
(386)
|
|
(15,272)
|
Advance to suppliers
- non current
|
|
(376)
|
(59)
|
|
937
|
Amount change in
construction in progress
|
|
(923)
|
(145)
|
|
265
|
Return of long-term
deposit
|
|
21,000
|
3,304
|
|
-
|
|
|
|
|
|
|
Net cash provided by
(used in) investing activities
|
|
17,013
|
2,677
|
|
(19,466)
|
|
|
|
|
|
|
Cash flow from
financing activities
|
|
|
|
|
|
Principal payments of
bank loans
|
|
(1,675)
|
(264)
|
|
(105,000)
|
Proceeds from related
party
|
|
15,510
|
2,440
|
|
123,849
|
Payment of capital
lease obligation
|
|
(6,602)
|
(1,039)
|
|
(6,185)
|
Change in notes
payable
|
|
2,727
|
429
|
|
17,939
|
|
|
|
|
|
|
Net cash provided by
financing activities
|
|
9,960
|
1,566
|
|
30,603
|
|
|
|
|
|
|
Effect of foreign
exchange rate changes
|
|
(47)
|
(44)
|
|
(21)
|
|
|
|
|
|
|
Net increase
(decrease) in cash and cash equivalent
|
|
4,549
|
681
|
|
(7,771)
|
|
|
|
|
|
|
Cash and cash
equivalent
|
|
|
|
|
|
At beginning of
period/year
|
|
9,020
|
1,454
|
|
11,578
|
At end of
period/year
|
|
13,569
|
2,135
|
|
3,807
|
|
|
|
|
|
|
SUPPLEMENTARY
DISCLOSURE:
|
|
|
|
|
|
Interest
paid
|
|
6,558
|
1,032
|
|
9,564
|
Income tax
paid
|
|
-
|
-
|
|
-
|
|
|
|
|
|
|
SUPPLEMENTARY
SCHEDULE OF NONCASH INVESTING AND FINANCIAL
ACTIVITIES:
|
Account payable for
plant and equipment:
|
|
2,237
|
352
|
|
5,886
|
Obligations for
acquired equipment under capital lease:
|
|
1,960
|
308
|
|
10,692
|
|
The accompanying
notes are an integral part of these unaudited condensed
consolidated statements.
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/fuwei-films-announces-its-unaudited-financial-results-for-the-third-quarter-of-2015-300173553.html
SOURCE Fuwei Films (Holdings) Co., Ltd.