BEIJING, June 22, 2020 /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 2020 ended March 31, 2020.
First quarter highlights
- Net sales during the first quarter ended March 31, 2020 were RMB83.2 million (US$11.8 million), up from RMB81.1 million during the same period in 2019, representing an increase of RMB2.1 million or 2.6%.
- Sales of specialty films were RMB39.9 million (US$5.6 million) or 47.9% of our total revenues, up from RMB32.2 million or 39.7% in the same period of 2019.
- Our gross profit was RMB29.8 million (US$4.2 million) for the first quarter ended March 31, 2020, representing a gross margin of 35.8%, up from a gross profit of RMB12.4 million and gross margin of 15.3% for the same period in 2019.
- Net profit attributable to the Company during the first quarter ended March 31, 2020 was RMB13.0 million (US$1.8 million) compared to net loss attributable to the Company of RMB3.4 million during the same period in 2019.
Mr. Zengyong Wang, Chairman and CEO of Fuwei Films, commented, "Despite the oversupply in the marketplace and the outbreak of COVID-19 pandemic which has caused significant adverse effects on the world economy, we achieved positive trends in overall sales, especially sales of specialty films which accounted for 47.9% of our total revenues. In addition, we achieved net profit for four consecutive quarters. We believe these results benefit from our commitment to innovation and differentiated marketing strategy which have expanded the end-user applications of our films products. We will continue with these efforts and expect that they will enable the Company to capitalize on new opportunities despite challenging industry and economic conditions."
First Quarter 2020 Results
Net sales during the first quarter ended March 31, 2020 were RMB83.2 million (US$11.8 million), compared to RMB81.1 million, during the same period in 2019, representing an increase of RMB2.1 million or 2.6%, mainly due to increased sales price.
In the first quarter of 2020, sales of specialty films were RMB39.9 million (US$5.6 million) or 47.9% of our total revenues as compared to RMB32.2 million or 39.7% in the same period of 2019. The increase was mainly due to increased sales volume.
The following is a breakdown of commodity and specialty film sales (amounts in thousands):
| Three-Month Period
Ended
March 31, 2020 | % of Total | Three-Month Period
Ended
March 31, 2019 | % of Total |
| RMB | US$ |
| RMB |
|
Stamping and transfer film | 34,522 | 4,876 | 41.5% | 31,529 | 38.9% |
Printing film | 5,845 | 825 | 7.0% | 12,219 | 15.1% |
Metallization film | 1,501 | 212 | 1.8% | 676 | 0.8% |
Specialty film | 39,877 | 5,632 | 47.9% | 32,196 | 39.7% |
Base film for other application | 1,488 | 210 | 1.8% | 4,454 | 5.5% |
|
|
|
|
|
|
| 83,233 | 11,755 | 100.0% | 81,074 | 100.0% |
Overseas sales were RMB5.8 million (US$0.8 million), or 6.9% of total revenues, compared with RMB16.2 million or 20.0% of total revenues in the first quarter of 2019, representing a decrease of RMB10.4 million or 64.2%. The decrease was mainly due to decreased sales volume.
The following is a breakdown of PRC domestic and overseas sales (amounts in thousands except percentages):
|
| Three-Month Period
Ended
March 31, 2020 | % of Total | Three-Month Period
Ended
March 31, 2019 | % of Total |
|
| RMB | US$ | RMB |
Sales in China |
| 77,448 | 10,938 | 93.1% | 64,854 | 80.0% |
Sales in other countries |
| 5,785 | 817 | 6.9% | 16,220 | 20.0% |
|
|
|
|
|
|
|
|
| 83,233 | 11,755 | 100.0% | 81,074 | 100.0% |
Our gross profit was RMB29.8 million (US$4.2 million) for the first quarter ended March 31, 2020, representing a gross margin of 35.8%, as compared to a gross profit of RMB12.4 million and gross margin of 15.3% for the same period in 2019. Our average product sales prices increased by 5.4% while our average cost of goods sold decreased by 20.0% compared to the same period in 2019. Consequently, our gross profit and gross margin was higher during the period.
Operating expenses for the first quarter ended March 31, 2020 were RMB15.0 million (US$2.1 million), which was RMB1.5 million, or 11.1% higher than the same period in 2019. This increase was mainly due to the increased accrued allowance for doubtful accounts receivable and increased transportation expenses.
Net profit attributable to the Company during the first quarter ended March 31, 2020 was RMB13.0 million (US$1.8 million) compared to net loss attributable to the Company of RMB3.4 million during the same period in 2019.
Basic and diluted net earnings per share was RMB3.97 (US$0.56) for the three-month period ended March 31, 2020 while basic and diluted net loss per share was RMB1.03 for the three-month period ended March 31, 2019.
Total shareholders' equity was RMB221.1 million or US$31.2 million as of March 31, 2020, compared with RMB208.2 million as of December 31, 2019.
As of March 31, 2020, the Company had 3,265,837 basic and diluted ordinary shares outstanding.
Conference Call Information
The Company will host a teleconference on Tuesday, June 23, 2020, at 9:00 a.m. ET / 9:00 p.m. Beijing time to discuss the financial results. To participate in the call, please dial +1-844-369-8770 in North America, or +1-862-298-0840 internationally, approximately 5 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: 35316. The replay will be available until July 7, 2020.
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 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 uncertainty 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 countries; uncertainty around coronavirus (COVID-19) outbreak and the effects of government and other measures seeking to contain its spread, uncertainty around U.S.-China trade war and its effect on the Company's operation, fluctuations of the RMB exchange rate, 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.:
Shiwei Yin
Investor Relations
Grayling
Phone: +1-646-284-9474
Email: shiwei.yin@grayling.com
Financial Tables to Follow
FUWEI FILMS (HOLDINGS) CO., LTD. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS AS OF MARCH 31, 2020 AND DECEMBER 31, 2019 (amounts in thousands except share and per share value) (Unaudited) |
|
|
| March 31, 2020 |
| December 31, 2019 |
| RMB | US$ |
| RMB |
ASSETS |
Current assets |
|
|
|
|
|
Cash and cash equivalents |
| 55,671 | 7,862 |
| 60,871 |
Restricted cash |
| 15,000 | 2,118 |
| 25,500 |
Accounts and bills receivable, net |
| 41,496 | 5,860 |
| 26,960 |
Inventories |
| 24,265 | 3,427 |
| 23,584 |
Advance to suppliers |
| 12,448 | 1,758 |
| 6,277 |
Prepayments and other receivables |
| 1,131 | 160 |
| 1,058 |
Deferred tax assets - current |
| 1,333 | 188 |
| 1,266 |
Total current assets |
| 151,344 | 21,373 |
| 145,516 |
|
|
|
|
|
|
Plant, properties and equipment, net |
| 296,159 | 41,826 |
| 302,642 |
Lease prepayments, net |
| 15,628 | 2,207 |
| 15,762 |
Advance to suppliers - long term, net |
| 1,542 | 218 |
| 1,542 |
Deferred tax assets - non current |
| 474 | 67 |
| 509 |
|
|
|
|
|
|
Total assets |
| 465,147 | 65,691 |
| 465,971 |
|
|
|
|
|
|
LIABILITIES AND EQUITY |
Current liabilities |
|
|
|
|
|
Short-term borrowings |
| 65,000 | 9,180 |
| 65,000 |
Due to related parties |
| 120,445 | 17,010 |
| 119,297 |
Accounts payables |
| 20,818 | 2,940 |
| 19,532 |
Notes payable |
| 26,800 | 3,785 |
| 41,000 |
Advance from customers |
| 1,664 | 235 |
| 5,204 |
Accrued expenses and other payables | 7,044 | 995 |
| 5,454 |
Total current liabilities |
| 241,771 | 34,145 |
| 255,487 |
|
|
|
|
|
|
Deferred tax liabilities |
| 2,228 | 315 |
| 2,290 |
|
|
|
|
|
|
Total liabilities |
| 243,999 | 34,460 |
| 257,777 |
|
|
|
|
|
|
Equity |
|
|
|
|
|
Shareholders' equity |
|
|
|
|
|
Registered capital(of US$0.519008 par value;
5,000,000 shares authorized; 3,265,837 issued
and outstanding) |
| 13,323 | 1,882 |
| 13,323 |
Additional paid-in capital |
| 311,907 | 44,050 |
| 311,907 |
Statutory reserve |
| 37,441 | 5,288 |
| 37,441 |
Accumulated deficit |
| (142,363) | (20,105) |
| (155,317) |
Cumulative translation adjustment |
| 840 | 116 |
| 840 |
Total shareholders' equity |
| 221,148 | 31,231 |
| 208,194 |
Total equity |
| 221,148 | 31,231 |
| 208,194 |
Total liabilities and equity |
| 465,147 | 65,691 |
| 465,971 |
FUWEI FILMS (HOLDINGS) CO., LTD. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2020 AND 2019 (amounts in thousands except share and per share value) (Unaudited) |
|
|
|
|
| The Three-Month Period Ended March 31, |
|
| 2020 |
| 2019 |
| RMB | US$ |
| RMB |
Net sales |
| 83,233 | 11,755 |
| 81,074 |
Cost of sales |
| 53,474 | 7,552 |
| 68,670 |
|
|
|
|
|
|
Gross Profit |
| 29,759 | 4,203 |
| 12,404 |
|
|
|
|
|
|
Operating expenses |
|
|
|
|
|
Selling expenses |
| 4,086 | 577 |
| 2,964 |
Administrative expenses |
| 10,955 | 1,547 |
| 10,577 |
Total operating expenses |
| 15,041 | 2,124 |
| 13,541 |
|
|
|
|
|
|
Operating income (loss) |
| 14,718 | 2,079 |
| (1,137) |
|
|
|
|
|
|
Other income (expense) |
|
|
|
|
|
- Interest income |
| 289 | 41 |
| 213 |
- Interest expense |
| (2,216) | (313) |
| (2,191) |
- Others income (expense),net |
| 69 | 10 |
| (242) |
|
|
|
|
|
|
Total other expense |
| (1,858) | (262) |
| (2,220) |
|
|
|
|
|
|
Income (loss) before provision for income taxes |
| 12,860 | 1,817 |
| (3,357) |
|
|
|
|
|
|
Income tax benefit (expense) |
| 94 | 13 |
| (17) |
|
|
|
|
|
|
Net income (loss) |
| 12,954 | 1,830 |
| (3,374) |
|
|
|
|
|
|
Net loss attributable to non-controlling interests |
| - | - |
| - |
Net income (loss) attributable to the Company |
| 12,954 | 1,830 |
| (3,374) |
|
|
|
|
|
|
Other comprehensive income |
|
|
|
|
|
- Foreign currency translation adjustments attributable to
non-controlling interest |
| - | - |
| - |
- Foreign currency translation adjustments attributable to
the Company |
| - | - |
| (1) |
|
|
|
|
|
|
Comprehensive loss attributable to non-controlling interest |
| - | - |
| - |
Comprehensive income (loss) attributable to the Company |
| 12,954 | 1,830 |
| (3,375) |
|
|
|
|
|
|
Earnings (loss) per share,
Basic and diluted |
| 3.97 | 0.56 |
| (1.03) |
Weighted average number ordinary shares,
Basic and diluted |
| 3,265,837 | 3,265,837 |
| 3,265,837 |
FUWEI FILMS (HOLDINGS) CO., LTD. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2020 AND 2019 (amounts in thousands except share and per share value) (Unaudited) |
|
|
|
|
| The Three-Month Period Ended March 31, |
|
| 2020 |
| 2019 |
|
| RMB | US$ |
| RMB |
Cash flow from operating activities |
|
|
|
|
|
Net income (loss) |
| 12,954 | 1,829 |
| (3,374) |
Adjustments to reconcile net loss to net cash |
|
|
|
|
|
used in operating activities |
|
|
|
|
|
- Depreciation of property, plant and equipment |
| 6,847 | 967 |
| 12,044 |
- Amortization of intangible assets |
| 134 | 19 |
| 133 |
- Deferred income taxes |
| (94) | (13) |
| 18 |
- Bad debt expense |
| 447 | 63 |
| (286) |
-Inventory provision |
| - | - |
| - |
Changes in operating assets and liabilities |
|
|
|
|
|
- Accounts and bills receivable |
| (14,984) | (2,116) |
| (4,123) |
- Inventories |
| (679) | (96) |
| (814) |
- Advance to suppliers |
| (6,171) | (872) |
| 2,935 |
- Prepaid expenses and other current assets |
| (73) | (10) |
| 13 |
- Accounts payable |
| 1,285 | 182 |
| (589) |
- Accrued expenses and other payables |
| - | - |
| (136) |
- Advance from customers |
| (3,540) | (500) |
| (700) |
- Tax payable |
| 1,590 | 225 |
| 512 |
|
|
|
|
|
|
Net cash provided by operating activities |
| (2,284) | (322) |
| 5,633 |
|
|
|
|
|
|
Cash flow from investing activities |
|
|
|
|
|
Purchases of property, plant and equipment |
| (364) | (51) |
| (1,529) |
Restricted cash related to trade finance |
| - | - |
| - |
Advanced to suppliers - non current |
| - | - |
| - |
Amount change in construction in progress |
| - | - |
| 345 |
|
|
|
|
|
|
Net cash provided by investing activities |
| (364) | (51) |
| (1,184) |
|
|
|
|
|
|
Cash flow from financing activities |
|
|
|
|
|
Proceeds from related party |
| 1,148 | 162 |
| 1,136 |
Payment of capital lease obligation |
| - | - |
| - |
Change in notes payable |
| (14,200) | (2,005) |
| 3,580 |
|
|
|
|
|
|
Net cash used in financing activities |
| (13,052) | (1,843) |
| 4,716 |
|
|
|
|
|
|
Effect of foreign exchange rate changes |
| - | (211) |
| (1) |
|
|
|
|
|
|
Net decrease in cash and cash equivalent |
| (15,700) | (2,427) |
| 9,164 |
|
|
|
|
|
|
Cash and cash equivalent |
|
|
|
|
|
At beginning of period/year |
| 86,371 | 12,407 |
| 46,908 |
At end of period/year |
| 70,671 | 9,980 |
| 56,072 |
|
|
|
|
|
|
SUPPLEMENTARY DISCLOSURE: |
|
|
|
|
|
Interest paid |
| 2,216 | 313 |
| 2,191 |
Income tax paid |
| - | - |
| - |
|
|
|
|
|
|
SUPPLEMENTARY SCHEDULE OF NONCASH INVESTING AND FINANCIAL ACTIVITIES: |
Account payable for plant and equipment: |
| 1,010 | 143 |
| 1,010 |
|
|
|
|
|
|
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SOURCE Fuwei Films (Holdings) Co., Ltd.
