-Teleconference to be held on Friday, August 18, 2017 at 9:00 am EDT-
BEIJING, Aug. 18, 2017 /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-month and six-month periods ended June 30, 2017.
Second Quarter 2017 Financial Highlights
- Net sales during the second quarter ended June 30, 2017 were RMB70.1 million or US$10.3 million.
- Sales of specialty films were RMB25.6 million or US$3.8 million or 36.5% of our total revenues.
- Overseas sales were RMB15.8 million or US$2.3 million, or 22.5% of total revenues.
- Our gross profit was RMB5.0 million or US$0.7 million for the second quarter ended June 30, 2017, representing a gross profit rate of 7.2%.
Mr. Zengyong Wang, Chairman and CEO of Fuwei Films, commented, "While we continue to face strong competition from emerging and incumbent players in the marketplace, which has led to oversupply relative to demand in the marketplace, we are encouraged by positive trends in the sales of specialty films. We believe our commitment to innovation and R&D has expanded our end-user applications that will enable the Company to capitalize on these opportunities despite challenging industry and economic conditions."
Financial Results for the Three Months Ended June 30, 2017
Net sales during the second quarter ended June 30, 2017 were RMB70.1 million or US$10.3 million, compared to RMB59.3 million during the same period in 2016, representing an increase of RMB10.8 million or 18.2%. The increase of average sales price caused an increase of RMB7.0 million and the sales volume increase caused an increase of RMB3.8 million.
In the second quarter of 2017, sales of specialty films were RMB25.6 million or US$3.8 million or 36.5% of our total revenues as compared to RMB23.5 million or 39.7% in the same period of 2016, which was an increase of RMB2.1 million, or 8.9% as compared to the same period in 2016. The increase of average sales price caused an increase of RMB0.3 million and the increase in the sales volume caused an increase of RMB1.8 million. The increase was largely attributable to the increase in sales volume.
Overseas sales were RMB15.8 million or US$2.3 million, or 22.5% of total revenues, compared with RMB11.2 million or 18.9% of total revenues in the second quarter of 2016. The increase of average sales price caused an increase of RMB1.9 million and the increase in sales volume resulted in an increase of RMB2.7 million.
The following is a breakdown of PRC domestic and overseas sales (amounts in thousands):
| Three-Month |
% of Total |
Three-Month |
% of Total |
|||
| RMB |
US$ |
RMB |
||||
| Sales in China |
54,277 |
8,006 |
77.5% |
48,106 |
81.1% |
|
| Sales in other countries |
15,789 |
2,329 |
22.5% |
11,210 |
18.9% |
|
| 70,066 |
10,335 |
100.0% |
59,316 |
100.0% |
||
Our gross profit was RMB5.0 million or US$0.7 million for the second quarter ended June 30, 2017, representing a gross profit rate of 7.2%, as compared to a gross profit rate of 9.5% for the same period in 2016. Correspondingly, gross profit rate decreased by 2.3 percentage point compared to the same period in 2016. Our average product sales prices increased by 11.1% compared to the same period last year while the average cost of goods sold increased by 13.9% compared to the same period last year. Consequently, the amount of increase in cost of goods sold was greater than that in sales revenue during the second quarter ended June 30, 2017 compared with the same period in 2016, which resulted in a decrease in our gross profit.
Operating expenses for the second quarter ended June 30, 2017 were RMB14.2 million or US$2.1 million, as compared to RMB14.5 million for the same period in 2016.
Net loss attributable to the Company during the second quarter ended June 30, 2017 was RMB11.6 million or US$1.7 million compared to net loss attributable to the Company of RMB10.2 million during the same period in 2016, representing an increase of RMB1.4 million for the same period in 2016.
Basic and diluted net loss per share was RMB3.57 or US$0.53 and RMB3.12 for the three months period ended June 30, 2017 and 2016, respectively.
Total shareholders' equity was RMB241.2 million or US$35.58 million as of June 30, 2017, compared with RMB265.2 million as of December 31, 2016.
As of June 30, 2017, the Company had 3,265,837 basic and diluted total ordinary shares outstanding.
Financial Results for the Six Months Ended June 30, 2017
Net sales during the six-month period ended June 30, 2017 were RMB138.0 million or US$20.4 million, compared to RMB121.5 million in the same period in 2016, representing an increase of RMB16.5 million or 13.6%. The increase in average sales price caused an increase of RMB12.6 million and the increase in the sales volume caused an increase of RMB3.9 million.
In the six-month period ended June 30, 2017, sales of specialty films were RMB47.3 million or US$7.0 million or 34.3% of our total revenues as compared to RMB45.3 million or 37.3% in the same period of 2016, which was an increase of RMB2.0 million, or 4.4% as compared to the same period in 2016. The increase in the sales volume caused an increase of RMB1.8 million and the increase in average sales price caused an increase of RMB0.2 million.
Overseas sales during the six months ended June 30, 2017 were RMB29.0 million or US$4.3 million, or 21.0% of total revenues, compared with RMB23.7 million or 19.5% of total revenues in the same period in 2016. This was RMB5.3 million higher than the same period in 2016. The increase in sales volume resulted in an increase of RMB2.5 million and the increase in average sales price caused an increase of RMB2.8 million.
The following is a breakdown of PRC domestic and overseas sales (amounts in thousands):
| Six-Month |
% of Total |
Six-Month |
% of Total |
|||
| RMB |
US$ |
RMB |
||||
| Sales in China |
109,008 |
16,080 |
79.0% |
97,738 |
80.5% |
|
| Sales in other countries |
29,002 |
4,278 |
21.0% |
23,725 |
19.5% |
|
| 138,010 |
20,358 |
100.0% |
121,463 |
100.0% |
||
Our gross profit was RMB8.8 million or US$1.3 million for the first six months ended June 30, 2017, representing a gross margin of 6.4%, as compared to a gross loss rate of 9.2% for the same period in 2016. Correspondingly, gross margin decreased by 2.8 percentage points. Our average product sales prices increased by 10.0% compared to the same period last year while the average cost of goods sold increased by 13.5% compared to the same period last year. Consequently, the amount of increase in cost of goods sold was higher than that in sales revenue during the six months ended June 30, 2017 compared with the same period in 2016, which resulted in a decrease in our gross margin.
Operating expenses for the six months ended June 30, 2017 were RMB28.0 million or US$4.1 million, compared to RMB29.5 million in the same period in 2016, which was RMB1.5 million lower than the same period in 2016. This decrease was mainly due to decreased allowance for doubtful accounts receivable.
Net loss attributable to the Company during the first half of 2017 was RMB23.8 million or US$3.5 million compared to net loss attributable to the Company of RMB22.3 million during the same period in 2016, representing an increase of RMB1.5 million from the same period in 2016 due to the factors described above.
Conference Call Information
The Company will host a teleconference on Friday, August 18, 2017, 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 +1-877-481-4010 in North America, or +1-919-882-2331 internationally, and entering the following Conference ID: 19863. The replay will be available until September 18, 2017, at 09:00 a.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 trends affecting the global economy, including the devaluation of the RMB by China in August 2017; 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 JUNE 30, 2017 AND DECEMBER 31, 2016 (amounts in thousands except share and per share value) (Unaudited) |
|||||
| June 30, |
December 31, |
||||
| RMB |
US$ |
RMB |
|||
| ASSETS |
|||||
| Current assets |
|||||
| Cash and cash equivalents |
16,452 |
2,427 |
13,343 |
||
| Restricted cash |
30,001 |
4,425 |
73,421 |
||
| Accounts and bills receivable, net |
29,039 |
4,283 |
29,453 |
||
| Inventories |
24,907 |
3,674 |
25,153 |
||
| Advance to suppliers |
6,073 |
896 |
6,043 |
||
| Prepayments and other receivables |
3,634 |
536 |
6,489 |
||
| Deferred tax assets - current |
1,267 |
187 |
1,199 |
||
| Total current assets |
111,373 |
16,428 |
155,101 |
||
| Property, plant and equipment, net |
389,373 |
57,436 |
410,654 |
||
| Construction in progress |
2,588 |
382 |
431 |
||
| Lease prepayments, net |
17,096 |
2,522 |
17,358 |
||
| Advance to suppliers - long term, net |
2,118 |
312 |
1,861 |
||
| Deferred tax assets - non current |
7,961 |
1,174 |
8,032 |
||
| Total assets |
530,509 |
78,254 |
593,437 |
||
| Current liabilities |
|||||
| Short-term borrowings |
49,500 |
7,302 |
60,000 |
||
| Long-term loan, current portion |
1,625 |
240 |
3,300 |
||
| Due to related parties |
147,069 |
21,694 |
131,747 |
||
| Accounts payables |
19,092 |
2,816 |
20,581 |
||
| Notes payable |
60,000 |
8,850 |
100,888 |
||
| Advance from customers |
3,680 |
543 |
3,509 |
||
| 5,465 |
806 |
5,204 |
|||
| Total current liabilities |
286,431 |
42,251 |
325,229 |
||
| Deferred tax liabilities |
2,880 |
425 |
2,997 |
||
| Total liabilities |
289,311 |
42,676 |
328,226 |
||
| Equity |
|||||
| Shareholders' equity |
|||||
| Registered capital(of US$0.519008 par value; 5,000,000 shares authorized; 3,265,837 issued and outstanding) |
13,323 |
1,965 |
13,323 |
||
| Additional paid-in capital |
311,907 |
46,009 |
311,907 |
||
| Statutory reserve |
37,441 |
5,523 |
37,441 |
||
| (Accumulated deficit) |
(122,307) |
(18,041) |
(98,505) |
||
| Cumulative translation adjustment |
834 |
122 |
1,045 |
||
| Total shareholders' equity |
241,198 |
35,578 |
265,211 |
||
| Total equity |
241,198 |
35,578 |
265,211 |
||
| Total liabilities and equity |
530,509 |
78,254 |
593,437 |
||
|
FUWEI FILMS (HOLDINGS) CO., LTD. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) FOR THE THREE- AND SIX-MONTH PERIODS ENDED JUNE 30, 2017 AND 2016 (amounts in thousands except share and per share value) (Unaudited) |
||||||||||
| The Three-Month Period Ended |
The Six-Month Period |
|||||||||
| 2017 |
2016 |
2017 |
2016 |
|||||||
| RMB |
US$ |
RMB |
RMB |
US$ |
RMB |
|||||
| Net sales |
70,066 |
10,335 |
59,316 |
138,010 |
20,358 |
121,463 |
||||
| Cost of sales |
65,041 |
9,594 |
53,690 |
129,228 |
19,062 |
110,248 |
||||
| Gross margin |
5,025 |
741 |
5,626 |
8,782 |
1,296 |
11,215 |
||||
| Operating expenses |
||||||||||
| Selling expenses |
3,701 |
546 |
3,340 |
7,207 |
1,063 |
6,289 |
||||
| Administrative expenses |
10,486 |
1,547 |
11,149 |
20,752 |
3,061 |
23,197 |
||||
| Total operating expenses |
14,187 |
2,093 |
14,489 |
27,959 |
4,124 |
29,486 |
||||
| Operating loss |
(9,162) |
(1,352) |
(8,863) |
(19,177) |
(2,828) |
(18,271) |
||||
| Other income (expense) |
||||||||||
| - Interest income |
217 |
32 |
134 |
503 |
74 |
352 |
||||
| - Interest expense |
(2,407) |
(355) |
(1,707) |
(4,853) |
(716) |
(3,461) |
||||
| - Others income (expense), net |
(342) |
(50) |
175 |
(389) |
(57) |
(1,354) |
||||
| Total other expenses |
(2,532) |
(373) |
(1,398) |
(4,739) |
(699) |
(4,463) |
||||
| Loss before provision for income taxes |
(11,694) |
(1,725) |
(10,261) |
(23,196) |
(3,527) |
(22,734) |
||||
| Income tax benefit |
49 |
7 |
64 |
114 |
17 |
482 |
||||
| Net loss |
(11,645) |
(1,718) |
(10,197) |
(23,802) |
(3,510) |
(22,252) |
||||
| Net (loss) income attributable to non-controlling interests |
- |
- |
- |
- |
- |
- |
||||
| Net loss attributable to the Company |
(11,645) |
(1,718) |
(10,197) |
(23,802) |
(3,510) |
(22,252) |
||||
| Other comprehensive income (loss) |
||||||||||
| - Foreign currency translation adjustments attributable to non-controlling interest |
- |
- |
(25) |
- |
- |
(21) |
||||
| - Foreign currency translation adjustments attributable to the Company |
(487) |
(72) |
(74) |
(211) |
(31) |
(79) |
||||
| Comprehensive loss attributable to non-controlling interest |
- |
- |
(25) |
- |
- |
(21) |
||||
| Comprehensive loss attributable to the Company |
(12,132) |
(1,790) |
(10,271) |
(24,013) |
(3,541) |
(22,331) |
||||
| Loss per share, |
(3.57) |
(0.53) |
(3.12) |
(7.29) |
(1.08) |
(6.81) |
||||
| Weighted average number ordinary shares, |
3,265,837 |
3,265,837 |
3,265,837 |
3,265,837 |
3,265,837 |
3,265,837 |
||||
|
FUWEI FILMS (HOLDINGS) CO., LTD. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2017 AND 2016 (amounts in thousands except share and per share value) (Unaudited) |
|||||
| The Six-Month Period Ended June 30, |
|||||
| 2017 |
2016 |
||||
| RMB |
US$ |
RMB |
|||
| Cash flow from operating activities |
|||||
| Net loss |
(23,802) |
(3,511) |
(22,252) |
||
| Adjustments to reconcile net loss to net cash |
|||||
| used in operating activities |
|||||
| - Depreciation of property, plant and equipment |
21,728 |
3,205 |
21,364 |
||
| - Amortization of intangible assets |
262 |
39 |
261 |
||
| - Deferred income taxes |
(114) |
(17) |
(482) |
||
| - Bad debt recovery |
512 |
76 |
2,197 |
||
| -Inventory provision |
(57) |
(8) |
(226) |
||
| Changes in operating assets and liabilities |
|||||
| - Accounts and bills receivable |
(98) |
(14) |
(13,076) |
||
| - Inventories |
303 |
45 |
1,869 |
||
| - Advance to suppliers |
(30) |
(4) |
(2,699) |
||
| - Prepaid expenses and other current assets |
(1,104) |
(163) |
72 |
||
| - Accounts payable |
(1,489) |
(221) |
(341) |
||
| - Accrued expenses and other payables |
288 |
42 |
(1,045) |
||
| - Advance from customers |
171 |
25 |
(308) |
||
| - Tax payable |
3,959 |
584 |
9,974 |
||
| Net cash provided by (used in) operating activities |
529 |
78 |
(4,692) |
||
| Cash flow from investing activities |
|||||
| Purchases of property, plant and equipment |
(447) |
(66) |
(2,722) |
||
| Restricted cash related to trade finance |
43,421 |
6,405 |
(9,344) |
||
| Advanced to suppliers - non current |
(257) |
(38) |
(266) |
||
| Amount change in construction in progress |
(2,157) |
(318) |
(1,496) |
||
| Net cash provided by (used in) investing activities |
40,560 |
5,983 |
(13,828) |
||
| Cash flow from financing activities |
|||||
| Principal payments of bank loans |
(1,675) |
(247) |
(1,675) |
||
| Proceeds from short-term bank loans |
(10,500) |
(1,549) |
- |
||
| Proceeds from related party |
15,322 |
2,260 |
3,167 |
||
| Payment of capital lease obligation |
- |
- |
(302) |
||
| Change in notes payable |
(40,888) |
(6,031) |
11,450 |
||
| Net cash (used in) provided by financing activities |
(37,741) |
(5,567) |
12,640 |
||
| Effect of foreign exchange rate changes |
(239) |
11 |
(29) |
||
| Net decrease( increase) in cash and cash equivalent |
3,109 |
505 |
(5,909) |
||
| Cash and cash equivalent |
|||||
| At beginning of period |
13,343 |
1,922 |
14,355 |
||
| At end of period |
16,452 |
2,427 |
8,446 |
||
| SUPPLEMENTARY DISCLOSURE: |
|||||
| Interest paid |
4,853 |
716 |
3,461 |
||
| Income tax paid |
- |
- |
- |
||
| SUPPLEMENTARY SCHEDULE OF NONCASH INVESTING AND FINANCIAL ACTIVITIES: |
|||||
| Account payable for plant and equipment: |
1,398 |
206 |
2,354 |
||
| Obligations for acquired equipment under capital lease: |
- |
- |
- |
||
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