BEIJING, Nov. 27, 2018 /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, 2018.
Third Quarter 2018 Financial Highlights
- Net sales during the third quarter ended September 30, 2018 increased to RMB86.9 million or US$12.6
million from RMB73.9 million
last year.
- Sales of specialty films were RMB45.3
million (US$6.6 million) or
52.2% of our total quarterly revenues.
- Gross profit grew to RMB17.1
million (US$2.5 million) from
RMB6.7 million a year ago; gross
margin was 19.6%t compared to 9.1% last year.
- Net loss attributable to the Company was RMB1.8 million (US$0.3
million) compared to net loss of RMB12.1 million during the same period in 2017,
representing a decrease in loss of RMB10.3
million.
- Basic and diluted net loss per share was RMB0.57 or US$0.08.
First Nine Months 2018 Financial Highlights
- Net sales during the first nine months ended September 30, 2018 increased to RMB243.4 million or US$35.4 million from RMB211.9 million last year.
- Sales of specialty films were RMB109.0
million (US$15.9 million) or
44.8% of total revenues during the period.
- Gross profit grew to RMB33.3
million (US$4.9 million) from
RMB15.5 million a year ago; gross
margin was 13.7%t compared to 7.3% last year.
- Net loss attributable to the Company was RMB18.7 million (US$2.7
million) compared to net loss of RMB35.9 million during the same period in 2017,
representing a decrease in loss of RMB17.2
million.
- Basic and diluted net loss per share was RMB5.73 or US$0.83.
Mr. Zengyong Wang, Chairman and CEO of Fuwei Films, commented,
"While we continued to be adversely affected by intense competition
and increased supply over demand in China's BOPET market, our net sales and the
sales of specialty films increased. We are glad to announce that
the sales of specialty films accounted for 52.2% of the total
revenues for the third quarter of 2018. We believe the improvement
of our financial metrics benefits from continued implementation of
differentiation strategy. Looking ahead, encouraged by this
positive trend, we believe our commitment to innovation and R&D
will enable us to capitalize on market opportunities and as a
result expect to realize profits despite challenging industry and
economic conditions."
Third Quarter 2018 Results
Net sales during the third quarter ended September 30, 2018 were RMB86.9 million (US$12.6
million), compared to RMB73.9
million during the same period in 2017, representing an
increase of RMB13.0 million or 17.6%.
The increase of average sales price caused an increase of
RMB18.6 million and the sales volume
decrease caused a decrease of RMB5.6
million.
In the third quarter of 2018, sales of specialty films were
RMB45.3 million (US$6.6 million) or 52.2% of our total revenues as
compared to RMB28.5 million or 38.6%
in the same period of 2017, which was an increase of RMB16.8 million, or 58.9% as compared to the same
period in 2017. The increase in average sales price caused an
increase of RMB2.9 million and the
increase in the sales volume caused an increase of RMB13.9 million.
The following is a breakdown of commodity and specialty film
sales (amounts in thousands):
|
Three-Month
Period Ended
September 30,
2018
|
%
of Total
|
|
Three-Month
Period Ended
September 30,
2017
|
%
of Total
|
|
RMB
|
US$
|
|
|
RMB
|
|
Stamping and
transfer film
|
30,650
|
4,464
|
35.3%
|
|
29,588
|
40.0%
|
Printing
film
|
6,293
|
916
|
7.2%
|
|
7,068
|
9.6%
|
Metallization
film
|
773
|
112
|
0.9%
|
|
1,874
|
2.5%
|
Specialty
film
|
45,325
|
6,599
|
52.2%
|
|
28,487
|
38.6%
|
Base film for
other
application
|
3,832
|
558
|
4.4%
|
|
6,839
|
9.3%
|
|
|
|
|
|
|
|
|
86,872
|
12,649
|
100.0%
|
|
73,857
|
100.0%
|
Overseas sales were RMB8.5 million
or US$1.2 million, or 9.8% of total
revenues, compared with RMB15.2
million or 20.6% of total revenues in the third quarter of
2017. The increase in average sales price caused an increase of
RMB2.3 million and the decrease in
sales volume resulted in a decrease of RMB9.0 million.
The following is a breakdown of PRC domestic and overseas sales
(amounts in thousands):
|
|
Three-Month
Period Ended
September 30,
2018
|
% of Total
|
Three-Month
Period Ended
September 30,
2017
|
% of Total
|
|
|
RMB
|
US$
|
RMB
|
Sales in
China
|
|
78,369
|
11,411
|
90.2%
|
58,614
|
79.4%
|
Sales in other
countries
|
|
8,503
|
1,238
|
9.8%
|
15,243
|
20.6%
|
|
|
|
|
|
|
|
|
|
86,872
|
12,649
|
100.0%
|
73,857
|
100.0%
|
Our gross profit was RMB17.1
million (US$2.5 million) for
the third quarter ended September 30,
2018, representing a gross margin rate of 19.6%, as compared
to a gross margin rate of 9.1% for the same period in 2017.
Correspondingly, gross margin rate increased by 10.5 percentage
point compared to the same period in 2017 mainly due to the
increase of average sales price.
Operating expenses for the third quarter ended September 30, 2018 were RMB17.8 million (US$2.6
million), which was RMB1.5
million, or 9.2% higher than the same period in 2017. This
increase was mainly due to increased expenses on research and
development.
Net loss attributable to the Company during the third quarter
ended September 30, 2018 was
RMB1.8 million (US$0.3 million) compared to net loss attributable
to the Company of RMB12.1 million
during the same period in 2017, representing a decrease in loss of
RMB10.3 million.
Basic and diluted net loss per share was RMB0.57 (US$0.08)
and RMB3.70 for the three-month
period ended September 30, 2018 and
2017, respectively.
Total shareholders' equity was RMB200.26
million or US$29.16 million as
of September 30, 2018, compared with
RMB221.03 million as of December 31, 2017.
As of September 30, 2018, the
Company had 3,265,837 basic and diluted total ordinary shares
outstanding.
Nine Months 2018 Results
Net sales during the nine-month period ended September 30, 2018 were RMB243.4 million (US$35.4
million), compared to RMB211.9
million, during the same period in 2017, representing an
increase of RMB31.5 million or 14.9%.
The increase of average sales price caused an increase of
RMB35.6 million and the decrease in
the sales volume caused a decrease of RMB4.1
million.
In the nine-month period ended September
30, 2018, sales of specialty films were RMB109.0 million (US$15.9
million) or 44.8% of our total revenues as compared to
RMB75.8 million or 35.8% in the same
period of 2017, which was an increase of RMB33.2 million, or 43.8% as compared to the same
period in 2017. The increase of average sales price caused an
increase of RMB2.8 million and the
increase in the sales volume caused an increase of RMB30.4 million.
The following is a breakdown of commodity and specialty film
sales (amounts in thousands):
|
Nine-Month
Period Ended
September 30,
2018
|
% of
Total
|
|
Nine-Month
Period Ended
September 30,
2017
|
% of Total
|
|
RMB
|
US$
|
|
|
RMB
|
|
Stamping and
transfer film
|
90,930
|
13,239
|
37.3%
|
|
83,038
|
39.2%
|
Printing
film
|
23,874
|
3,476
|
9.8%
|
|
18,627
|
8.8%
|
Metallization
film
|
2,568
|
374
|
1.1%
|
|
6,976
|
3.3%
|
Specialty
film
|
109,020
|
15,874
|
44.8%
|
|
75,817
|
35.8%
|
Base film for
other
applications
|
17,006
|
2,476
|
7.0%
|
|
27,409
|
12.9%
|
|
|
|
|
|
|
|
|
243,398
|
35,439
|
100.0%
|
|
211,867
|
100.0%
|
Overseas sales during the nine months ended September 30, 2018 were RMB36.1 million or US$5.3
million, or 14.8% of total revenues, compared with
RMB44.2 million or 20.9% of total
revenues in the same period in 2017. This was RMB8.1 million lower than the same period in
2017. The decrease in sales volume resulted in a decrease of
RMB12.7 million and the increase of
average sales price caused an increase of RMB4.6 million.
The following is a breakdown of PRC domestic and overseas sales
(amounts in thousands):
|
|
Nine-Month
Period Ended
September 30,
2018
|
% of Total
|
Nine-Month
Period Ended
September 30,
2017
|
% of Total
|
|
|
RMB
|
US$
|
RMB
|
Sales in
China
|
|
207,291
|
30,181
|
85.2%
|
167,622
|
79.1%
|
Sales in other
countries
|
|
36,107
|
5,258
|
14.8%
|
44,245
|
20.9%
|
|
|
|
|
|
|
|
|
|
243,398
|
35,439
|
100.0%
|
211,867
|
100.0%
|
Our gross profit was RMB33.3
million (US$4.9 million) for
the first nine months ended September 30,
2018, representing a gross margin of 13.7%, as compared to a
gross margin of 7.3% for the same period in 2017. Correspondingly,
gross margin increased by 6.4 percentage. Our average product sales
prices increased by 17.2% compared to the same period last year
while the average cost of goods sold increased by 9.1% compared to
the same period last year. Consequently, the amount of increase in
sales price was higher than that in cost of goods sold during the
nine months ended September 30, 2018
compared with the same period in 2017, which resulted in an
increase in our gross profit.
Operating expenses for the nine months ended September 30, 2018 were RMB47.0 million (US$6.8
million), compared to RMB44.3
million in the same period in 2017, which was RMB2.7 million or 6.1% higher than the same
period in 2017. This increase is mainly due to increased expenses
on research and development.
Conference Call Information
The Company will host a teleconference on Wednesday, November 28, 2018, at 8:00 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 prior to the
scheduled start time.
A replay of the call can be accessed via telephone by calling
+1-877-481-4010 in North America,
or +1-919-882-2331 internationally, and entering the following
reply ID: 41237. The replay will be available until December 28, 2018, at 08:00 a.m. ET.
About Fuwei Films
Fuwei Films develops, manufactures and distributes high-quality
plastic films using the biaxial oriented stretch technique, also
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 used 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.:
Mr. 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 SEPTEMBER
30, 2018 AND DECEMBER 31, 2017
|
(amounts in thousands
except share and per share value)
|
(Unaudited)
|
|
|
September 30,
2018
|
|
December 31,
2017
|
|
RMB
|
US$
|
|
RMB
|
ASSETS
|
Current
assets
|
|
|
|
|
|
Cash and cash
equivalents
|
|
24,635
|
3,587
|
|
12,963
|
Restricted
cash
|
|
60,990
|
8,880
|
|
56,501
|
Accounts and bills
receivable, net
|
|
15,574
|
2,268
|
|
20,123
|
Inventories
|
|
25,594
|
3,727
|
|
24,578
|
Advance to
suppliers
|
|
8,885
|
1,294
|
|
3,898
|
Prepayments and other
receivables
|
|
1,780
|
259
|
|
1,404
|
Deferred tax assets –
current
|
|
1,268
|
185
|
|
1,288
|
Total current
assets
|
|
138,726
|
20,200
|
|
120,755
|
|
|
|
|
|
|
Property, plant and
equipment, net
|
|
342,600
|
49,884
|
|
371,058
|
Construction in
progress
|
|
366
|
53
|
|
366
|
Lease prepayments,
net
|
|
16,429
|
2,392
|
|
16,830
|
Advance to suppliers
- long term, net
|
|
1,542
|
225
|
|
1,570
|
Deferred tax assets -
non current
|
|
6,796
|
990
|
|
6,901
|
|
|
|
|
|
|
Total
assets
|
|
506,459
|
73,744
|
|
517,480
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
Current
liabilities
|
|
|
|
|
|
Short-term
borrowings
|
|
64,950
|
9,457
|
|
50,000
|
Due to related
parties
|
|
113,602
|
16,541
|
|
151,074
|
Accounts
payables
|
|
19,907
|
2,899
|
|
17,470
|
Notes
payable
|
|
90,980
|
13,247
|
|
67,900
|
Advance from
customers
|
|
8,829
|
1,286
|
|
1,976
|
Accrued expenses and
other payables
|
5,343
|
778
|
|
5,268
|
Total current
liabilities
|
|
303,611
|
44,208
|
|
293,688
|
|
|
|
|
|
|
Deferred tax
liabilities
|
|
2,587
|
377
|
|
2,763
|
|
|
|
|
|
|
Total
liabilities
|
|
306,198
|
44,585
|
|
296,451
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
Shareholders'
equity
|
|
|
|
|
|
Registered capital
(of US$0.519008 par value;
5,000,000 shares authorized; 3,265,837 issued and
outstanding)
|
|
13,323
|
1,940
|
|
13,323
|
Additional paid-in
capital
|
|
311,907
|
45,415
|
|
311,907
|
Statutory
reserve
|
|
37,441
|
5,452
|
|
37,441
|
Accumulated
deficit
|
|
(163,223)
|
(23,766)
|
|
(144,508)
|
Cumulative
translation adjustment
|
|
813
|
118
|
|
2,866
|
Total
equity
|
|
200,261
|
29,159
|
|
221,029
|
Total liabilities
and equity
|
|
506,459
|
73,744
|
|
517,480
|
FUWEI FILMS
(HOLDINGS) CO., LTD. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(LOSS)
|
FOR THE THREE- AND
NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2018 AND 2017
|
(amounts in thousands
except share and per share value)
|
(Unaudited)
|
|
|
|
The Three-Month
Period Ended
September 30,
|
The Nine-Month
Period Ended
September 30,
|
|
|
2018
|
|
2017
|
2018
|
|
2017
|
|
RMB
|
US$
|
|
RMB
|
RMB
|
US$
|
|
RMB
|
Net sales
|
|
86,872
|
12,649
|
|
73,857
|
243,398
|
35,439
|
|
211,867
|
Cost of
sales
|
|
69,812
|
10,165
|
|
67,145
|
210,051
|
30,584
|
|
196,373
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
17,060
|
2,484
|
|
6,712
|
33,347
|
4,855
|
|
15,494
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
Selling
expenses
|
|
2,960
|
431
|
|
3,410
|
9,325
|
1,358
|
|
10,617
|
Administrative
expenses
|
|
14,874
|
2,166
|
|
12,917
|
37,667
|
5,484
|
|
33,669
|
Total operating
expenses
|
|
17,834
|
2,597
|
|
16,327
|
46,992
|
6,842
|
|
44,286
|
|
|
|
|
|
|
|
|
|
|
Operating
loss
|
|
(774)
|
(113)
|
|
(9,615)
|
(13,645)
|
(1,987)
|
|
(28,792)
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense)
|
|
|
|
|
|
|
|
|
|
- Interest
income
|
|
356
|
52
|
|
103
|
739
|
108
|
|
607
|
- Interest
expense
|
|
(2,769)
|
(403)
|
|
(2,244)
|
(7,227)
|
(1,052)
|
|
(7,097)
|
- Others income
(expense), net
|
|
1,324
|
193
|
|
(374)
|
1,369
|
199
|
|
(763)
|
|
|
|
|
|
|
|
|
|
|
Total other
expense
|
|
(1,089)
|
(158)
|
|
(2,515)
|
(5,119)
|
(745)
|
|
(7,253)
|
|
|
|
|
|
|
|
|
|
|
Loss before provision
for income
taxes
|
|
(1,863)
|
(271)
|
|
(12,130)
|
(18,764)
|
(2,732)
|
|
(36,045)
|
|
|
|
|
|
|
|
|
|
|
Income tax
benefit
|
|
15
|
2
|
|
54
|
49
|
7
|
|
168
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
(1,848)
|
(269)
|
|
(12,076)
|
(18,715)
|
(2,725)
|
|
(35,877)
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive
loss
|
|
|
|
|
|
|
|
|
|
- Foreign currency
translation
adjustments
|
|
24
|
3
|
|
1,206
|
(2,053)
|
(299)
|
|
993
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
loss
|
|
(1,824)
|
(266)
|
|
(10,870)
|
(20,768)
|
(3,024)
|
|
(34,884)
|
|
|
|
|
|
|
|
|
|
|
Loss per share,
Basic and diluted
|
|
(0.57)
|
(0.08)
|
|
(3.70)
|
(5.73)
|
(0.83)
|
|
(10.99)
|
Weighted average
number ordinary s
hares,
Basic and diluted
|
|
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 NINE-MONTH
PERIODS ENDED SEPTEMBER 30, 2018 AND 2017
|
(amounts in thousands
except share and per share value)
|
(Unaudited)
|
|
|
|
The Nine-Month
Period Ended September 30,
|
|
|
2018
|
|
2017
|
|
|
RMB
|
US$
|
|
RMB
|
Cash flow from
operating activities
|
|
|
|
|
|
Net loss
|
|
(18,715)
|
(2,725)
|
|
(35,877)
|
Adjustments to
reconcile net loss to net cash used in operating
activities
|
|
|
|
|
|
- Depreciation of
property, plant and equipment
|
|
33,271
|
4,844
|
|
32,334
|
- Amortization of
intangible assets
|
|
400
|
58
|
|
394
|
- Deferred income
taxes
|
|
(51)
|
(7)
|
|
(168)
|
- Bad debt (recovery)
expense
|
|
(132)
|
(19)
|
|
714
|
-Inventory
provision
|
|
-
|
-
|
|
(57)
|
Changes in operating
assets and liabilities
|
|
|
|
|
|
- Accounts and bills
receivable
|
|
4,682
|
682
|
|
5,589
|
-
Inventories
|
|
(1,016)
|
(148)
|
|
3,790
|
- Advance to
suppliers
|
|
(4,987)
|
(726)
|
|
(5,591)
|
- Prepaid expenses and
other current assets
|
|
(551)
|
(80)
|
|
100
|
- Accounts
payable
|
|
2,436
|
355
|
|
(1,037)
|
- Accrued expenses and
other payables
|
|
(1,031)
|
(150)
|
|
354
|
- Advance from
customers
|
|
6,852
|
998
|
|
2,021
|
- Tax
payable
|
|
1,270
|
185
|
|
4,693
|
|
|
|
|
|
|
Net cash provided by
(used in) operating activities
|
|
22,428
|
3,267
|
|
7,259
|
|
|
|
|
|
|
Cash flow from
investing activities
|
|
|
|
|
|
Purchases of
property, plant and equipment
|
|
(4,812)
|
(701)
|
|
(4,024)
|
Restricted cash
related to trade finance
|
|
(4,489)
|
(654)
|
|
871
|
Advance to suppliers
- non current
|
|
28
|
4
|
|
161
|
Amount change in
construction in progress
|
|
-
|
-
|
|
65
|
|
|
|
|
|
|
Net cash used in
investing activities
|
|
(9,273)
|
(1,351)
|
|
(2,927)
|
|
|
|
|
|
|
Cash flow from
financing activities
|
|
|
|
|
|
Principal payments of
bank loans
|
|
-
|
-
|
|
(1,675)
|
Proceeds from
short-term bank loans
|
|
14,950
|
2,177
|
|
5,000
|
Proceeds from related
party
|
|
(37,472)
|
(5,456)
|
|
2,666
|
Change in notes
payable
|
|
23,080
|
3,361
|
|
(888)
|
|
|
|
|
|
|
Net cash provided by
financing activities
|
|
558
|
82
|
|
5,103
|
|
|
|
|
|
|
Effect of foreign
exchange rate changes
|
|
(2,041)
|
(403)
|
|
942
|
|
|
|
|
|
|
Net increase in cash
and cash equivalent
|
|
11,672
|
1,595
|
|
10,377
|
|
|
|
|
|
|
Cash and cash
equivalent
|
|
|
|
|
|
At beginning of
period/year
|
|
12,963
|
1,992
|
|
13,343
|
At end of
period/year
|
|
24,635
|
3,587
|
|
23,720
|
|
|
|
|
|
|
SUPPLEMENTARY
DISCLOSURE:
|
|
|
|
|
|
Interest
paid
|
|
7,227
|
1,052
|
|
7,097
|
Income tax
paid
|
|
-
|
-
|
|
-
|
|
|
|
|
|
|
SUPPLEMENTARY
SCHEDULE OF NONCASH INVESTING AND FINANCIAL
ACTIVITIES:
|
Account payable for
plant and equipment:
|
|
1,029
|
150
|
|
2,040
|
View original
content:http://www.prnewswire.com/news-releases/fuwei-films-announces-its-unaudited-financial-results-for-the-third-quarter-of-2018-300755931.html
SOURCE Fuwei Films (Holdings) Co., Ltd.