BEIJING, June 26, 2019 /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
2019 ended March 31, 2019.
Highlights
- Net sales during the first quarter ended March 31, 2019 were RMB81.1 million (US$12.1
million), compared to RMB76.9
million, during the same period in 2018, representing an
increase of RMB4.2 million or
5.5%.
- Sales of specialty films were RMB32.2
million (US$4.8 million) or
39.7% of our total revenues as compared to RMB32.9 million or 42.8% in the same period of
2018.
- Our gross profit was RMB12.4
million (US$1.8 million) for
the first quarter ended March 31,
2019, representing a gross margin of 15.3%, as compared to a
gross margin of 12.3% for the same period in 2018.
Mr. Zengyong Wang, Chairman and CEO of Fuwei Films, commented,
"While we continue to face headwinds due to oversupply in the
marketplace, we are encouraged by continued positive trends in
overall sales, sales of specialty films and improvement in gross
margin. We believe our commitment to innovation and R&D has
expanded the end-user applications of our films that will enable
the Company to capitalize on new opportunities despite challenging
industry and economic conditions."
First Quarter 2019 Results
Net sales during the first quarter ended March 31, 2019 were RMB81.1 million (US$12.1
million), compared to RMB76.9
million, during the same period in 2018, representing an
increase of RMB4.2 million or 5.5%,
mainly due to the increased sales price.
In the first quarter of 2019, sales of specialty films were
RMB32.2 million (US$4.8 million) or 39.7% of our total revenues as
compared to RMB32.9 million or 42.8%
in the same period of 2018. The decrease was mainly due to
decreased sales volume.
The following is a breakdown of commodity and specialty film
sales (amounts in thousands):
|
Three-Month
Period
Ended
March 31, 2019
|
% of Total
|
Three-Month
Period
Ended
March 31, 2018
|
% of Total
|
|
RMB
|
US$
|
|
RMB
|
|
Stamping and transfer
film
|
31,529
|
4,697
|
38.9%
|
30,852
|
40.2%
|
Printing
film
|
12,219
|
1,821
|
15.1%
|
5,868
|
7.6%
|
Metallization
film
|
676
|
101
|
0.8%
|
1,174
|
1.5%
|
Specialty
film
|
32,196
|
4,797
|
39.7%
|
32,947
|
42.8%
|
Base film for
other
application
|
4,454
|
664
|
5.5%
|
6,086
|
7.9%
|
|
|
|
|
|
|
|
81,074
|
12,080
|
100.0%
|
76,927
|
100.0%
|
Overseas sales were RMB16.2
million or US$2.4 million, or
20.0% of total revenues, compared with RMB11.0 million or 14.3% of total revenues in the
first quarter of 2018, representing an increase of RMB5.2 million or 47.3%. Higher sales volume
resulted in an increase of RMB4.2
million in overseas sales, and increases in sale prices led
to an increase of RMB1.0 million.
The following is a breakdown of PRC domestic and overseas sales
(amounts in thousands except percentages):
|
|
Three-Month
Period
Ended
March 31, 2019
|
% of Total
|
Three-Month
Period
Ended
March 31, 2018
|
% of Total
|
|
|
RMB
|
US$
|
RMB
|
Sales in
China
|
|
64,854
|
9,663
|
80.0%
|
65,928
|
85.7%
|
Sales in other
countries
|
|
16,220
|
2,417
|
20.0%
|
10,999
|
14.3%
|
|
|
|
|
|
|
|
|
|
81,074
|
12,080
|
100.0%
|
76,927
|
100.0%
|
Our gross profit was RMB12.4
million (US$1.8 million) for
the first quarter ended March 31,
2019, representing a gross margin of 15.3%, as compared to a
gross margin of 12.3% for the same period in 2018. Correspondingly,
gross margin rate increased by 3.0 percentage points compared to
the same period in 2018. Our average product sales prices increased
by 3.8% compared to the same period in 2018 while our average cost
of goods sold increased by 0.3% compared to the same period in
2018. Consequently, the increase in average product sales prices
was significantly higher than that in the average cost of goods
sold during the first quarter ended March
31, 2019, which contributed to the increase in our gross
margin compared with the same period in 2018.
Operating expenses for the first quarter ended March 31, 2019 were RMB13.5 million (US$2.0
million), which was RMB2.3
million, or 14.6% lower than the same period in 2018. This
decrease was mainly due to the decreased allowance for doubtful
accounts receivable and increased expense in R&D.
Net loss attributable to the Company during the first quarter
ended March 31, 2019 was RMB3.4 million (US$0.5
million) compared to net loss attributable to the Company of
RMB8.2 million during the same period
in 2018.
Basic and diluted net loss per share was RMB1.03 (US$0.15)
and RMB2.51 for the three-month
period ended March 31, 2019 and 2018,
respectively.
Total shareholders' equity was RMB193.5
million or US$28.8 million as
of March 31, 2019, compared with
RMB196.8 million as of December 31, 2018.
As of March 31, 2019, the Company
had 3,265,837 basic and diluted ordinary shares outstanding.
Conference Call Information
The Company will host a teleconference on Thursday, June 27, 2019, at 9:00 a.m. ET / 9:00
p.m. Beijing time to
discuss the financial results. To participate in the call, please
dial +1-877-407-9205 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: 49575. The replay will be available
until July 27, 2019, at 9:00 a.m. ET.
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; 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; uncertainty around U.S.-China trade war and its effect on the
Company's operation, fluctuations of RMB exchange rate, the
reduction 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 operate its third 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, uncertainty around completion of
transactions contemplated by the Securities Purchase Agreement and
the Shares Transfer Agreement (as described herein) entered into
between the Company and Gold Glory Blockchain Inc., 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.:
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,
2019 AND DECEMBER 31, 2018
|
(amounts in thousands
except share and per share value)
|
(Unaudited)
|
|
|
March 31,
2019
|
|
December 31,
2018
|
|
RMB
|
US$
|
|
RMB
|
ASSETS
|
Current
assets
|
|
|
|
|
|
Cash and cash
equivalents
|
|
30,282
|
4,512
|
|
8,908
|
Restricted
cash
|
|
25,790
|
3,843
|
|
38,000
|
Accounts and bills
receivable, net
|
|
27,036
|
4,028
|
|
22,627
|
Inventories
|
|
25,488
|
3,798
|
|
24,675
|
Advance to
suppliers
|
|
2,759
|
411
|
|
5,694
|
Prepayments and other
receivables
|
|
1,056
|
157
|
|
1,068
|
Deferred tax assets -
current
|
|
1,152
|
172
|
|
1,195
|
Total current
assets
|
|
113,563
|
16,921
|
|
102,167
|
|
|
|
|
|
|
Plant, properties and
equipment, net
|
|
320,653
|
47,779
|
|
331,168
|
Construction in
progress
|
|
21
|
3
|
|
366
|
Lease prepayments,
net
|
|
16,162
|
2,408
|
|
16,296
|
Advance to suppliers
- long term, net
|
|
1,542
|
230
|
|
1,542
|
Deferred tax assets -
non current
|
|
3,108
|
463
|
|
3,143
|
|
|
|
|
|
|
Total
assets
|
|
455,049
|
67,804
|
|
454,682
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
Short-term
borrowings
|
|
64,950
|
9,678
|
|
64,950
|
Due to related
parties
|
|
115,827
|
17,259
|
|
114,692
|
Accounts
payables
|
|
20,162
|
3,004
|
|
20,750
|
Notes
payable
|
|
51,580
|
7,686
|
|
48,000
|
Advance from
customers
|
|
1,159
|
173
|
|
1,859
|
|
5,448
|
812
|
|
5,072
|
Total current
liabilities
|
|
259,126
|
38,612
|
|
255,323
|
|
|
|
|
|
|
Deferred tax
liabilities
|
|
2,467
|
368
|
|
2,528
|
|
|
|
|
|
|
Total
liabilities
|
|
261,593
|
38,980
|
|
257,851
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
Shareholders'
equity
|
|
|
|
|
|
Registered capital(of
US$0.519008 par value;
5,000,000 shares
authorized; 3,265,837 issued and
outstanding)
|
|
13,323
|
1,985
|
|
13,323
|
Additional paid-in
capital
|
|
311,907
|
46,476
|
|
311,907
|
Statutory
reserve
|
|
37,441
|
5,579
|
|
37,441
|
Accumulated
deficit
|
|
(170,054)
|
(25,339)
|
|
(166,680)
|
Cumulative
translation adjustment
|
|
839
|
123
|
|
840
|
Total
shareholders' equity
|
|
193,456
|
28,824
|
|
196,831
|
Total
equity
|
|
193,456
|
28,824
|
|
196,831
|
Total liabilities
and equity
|
|
455,049
|
67,804
|
|
454,682
|
FUWEI FILMS
(HOLDINGS) CO., LTD. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
LOSS
|
FOR THE
THREE-MONTH PERIOD ENDED MARCH 31, 2019 AND 2018
|
(amounts in thousands
except share and per share value)
|
(Unaudited)
|
|
|
The Three-Month
Period Ended March 31,
|
|
|
2019
|
|
2018
|
|
RMB
|
US$
|
|
RMB
|
Net sales
|
|
81,074
|
12,080
|
|
76,927
|
Cost of
sales
|
|
68,670
|
10,232
|
|
67,436
|
|
|
|
|
|
|
Gross
Profit
|
|
12,404
|
1,848
|
|
9,491
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
Selling
expenses
|
|
2,964
|
442
|
|
2,970
|
Administrative
expenses
|
|
10,577
|
1,576
|
|
12,876
|
Total operating
expenses
|
|
13,541
|
2,018
|
|
15,846
|
|
|
|
|
|
|
Operating
loss
|
|
(1,137)
|
(170)
|
|
(6,355)
|
|
|
|
|
|
|
Other income
(expense)
|
|
|
|
|
|
- Interest
income
|
|
213
|
32
|
|
374
|
- Interest
expense
|
|
(2,191)
|
(326)
|
|
(2,201)
|
- Others (expense)
income, net
|
|
(242)
|
(36)
|
|
(237)
|
|
|
|
|
|
|
Total other
expense
|
|
(2,220)
|
(330)
|
|
(2,064)
|
|
|
|
|
|
|
Loss before provision
for income taxes
|
|
(3,357)
|
(500)
|
|
(8,419)
|
|
|
|
|
|
|
Income tax
benefit
|
|
(17)
|
(3)
|
|
210
|
|
|
|
|
|
|
Net
loss
|
|
(3,374)
|
(503)
|
|
(8,209)
|
|
|
|
|
|
|
Net loss attributable
to non-controlling interests
|
|
-
|
-
|
|
-
|
Net loss attributable
to the Company
|
|
(3,374)
|
(503)
|
|
(8,209)
|
|
|
|
|
|
|
Other comprehensive
income
|
|
|
|
|
|
- Foreign currency
translation adjustments attributable to
non-controlling
interest
|
|
-
|
-
|
|
-
|
- Foreign currency
translation adjustments attributable to the
Company
|
|
(1)
|
-
|
|
(2,041)
|
|
|
|
|
|
|
Comprehensive loss
attributable to non-controlling interest
|
|
-
|
-
|
|
-
|
Comprehensive loss
attributable to the Company
|
|
(3,375)
|
(503)
|
|
(10,250)
|
|
|
|
|
|
|
Loss per share,
Basic and diluted
|
|
(1.03)
|
(0.15)
|
|
(2.51)
|
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, 2019 AND 2018
|
(amounts in thousands
except share and per share value)
|
(Unaudited)
|
|
|
The Three-Month
Period Ended March 31,
|
|
|
2019
|
|
2018
|
|
|
RMB
|
US$
|
|
RMB
|
Cash flow from
operating activities
|
|
|
|
|
|
Net loss
|
|
(3,374)
|
(503)
|
|
(8,209)
|
Adjustments to
reconcile net loss to net cash
|
|
|
|
|
|
used in operating
activities
|
|
|
|
|
|
- Depreciation of
property, plant and equipment
|
|
12,044
|
1,795
|
|
11,155
|
- Amortization of
intangible assets
|
|
133
|
20
|
|
134
|
- Deferred income
taxes
|
|
18
|
3
|
|
(212)
|
- Bad debt
expense
|
|
(286)
|
(43)
|
|
1,251
|
-Inventory
provision
|
|
-
|
-
|
|
-
|
Changes in operating
assets and liabilities
|
|
|
|
|
|
- Accounts and bills
receivable
|
|
(4,123)
|
(614)
|
|
(5,273)
|
-
Inventories
|
|
(814)
|
(121)
|
|
1,768
|
- Advance to
suppliers
|
|
2,935
|
437
|
|
(1,261)
|
- Prepaid expenses and
other current assets
|
|
13
|
2
|
|
89
|
- Accounts
payable
|
|
(589)
|
(87)
|
|
3,111
|
- Accrued expenses and
other payables
|
|
(136)
|
(20)
|
|
(71)
|
- Advance from
customers
|
|
(700)
|
(104)
|
|
27
|
- Tax
payable
|
|
512
|
76
|
|
1,516
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
|
5,633
|
841
|
|
4,025
|
|
|
|
|
|
|
Cash flow from
investing activities
|
|
|
|
|
|
Purchases of
property, plant and equipment
|
|
(1,529)
|
(228)
|
|
(74)
|
Restricted cash
related to trade finance
|
|
-
|
-
|
|
-
|
Advanced to suppliers
- non current
|
|
-
|
-
|
|
-
|
Amount change in
construction in progress
|
|
345
|
51
|
|
(114)
|
|
|
|
|
|
|
Net cash provided by
investing activities
|
|
(1,184)
|
(177)
|
|
(188)
|
|
|
|
|
|
|
Cash flow from
financing activities
|
|
|
|
|
|
Proceeds from related
party
|
|
1,136
|
169
|
|
5,004
|
Payment of capital
lease obligation
|
|
-
|
-
|
|
-
|
Change in notes
payable
|
|
3,580
|
533
|
|
(62,900)
|
|
|
|
|
|
|
Net cash used in
financing activities
|
|
4,716
|
702
|
|
(57,896)
|
|
|
|
|
|
|
Effect of foreign
exchange rate changes
|
|
(1)
|
166
|
|
(2,070)
|
|
|
|
|
|
|
Net decrease in cash
and cash equivalent
|
|
9,164
|
1,532
|
|
(56,129)
|
|
|
|
|
|
|
Cash and cash
equivalent
|
|
|
|
|
|
At beginning of
period/year
|
|
46,908
|
6,823
|
|
69,464
|
At end of
period/year
|
|
56,072
|
8,355
|
|
13,335
|
|
|
|
|
|
|
SUPPLEMENTARY
DISCLOSURE:
|
|
|
|
|
|
Interest
paid
|
|
2,191
|
326
|
|
2,201
|
Income tax
paid
|
|
-
|
-
|
|
-
|
|
|
|
|
|
|
SUPPLEMENTARY
SCHEDULE OF NONCASH INVESTING AND FINANCIAL
ACTIVITIES:
|
Account payable for
plant and equipment:
|
|
1,010
|
150
|
|
1,257
|
|
|
|
|
|
|
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content:http://www.prnewswire.com/news-releases/fuwei-films-announces-its-unaudited-financial-results-for-the-first-quarter-of-2019-300875436.html
SOURCE Fuwei Films (Holdings) Co., Ltd.