BEIJING, April 28, 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 financial results for the fourth quarter and full
year ended December 31, 2019.
4Q 2019 Highlights
- Net revenues were RMB86.8 million
or US$12.5 million, down 3.7%
year-over-year.
- Sales of specialty films were RMB47.7
million or US$6.9 million, up
19.8% year-over-year.
- Gross margin was 35.7%, compared to 23.7% a year ago.
- Basic and diluted profit per share was RMB3.17 or US$0.46,
compared to loss per share of RMB1.06
a year ago.
Full Year 2019 Highlights
- Net revenues were RMB335.6
million or US$48.2 million, up
0.6% year-over-year.
- Sales of specialty films were RMB162.4
million or US$23.3 million, up
9.1% year-over-year. Gross margin was 24.9%, compared to 16.4% a
year ago.
- Basic and diluted profit per share was RMB3.48 or US$0.50,
compared to loss per share of RMB6.79
a year ago.
- Net cash provided by operating activities was RMB54.4 million or US$7.8
million, compared to RMB25.4
million a year ago.
"Despite persisting oversupply in the BOPET plastic films
market, our revenues and gross margins continued to grow. Sales of
specialty films increased by 9.1% year-over-year and accounted for
48.4% of our total revenues in 2019. Our gross margin increased by
8.5 percentage points to 24.9% for the year of 2019, as compared to
16.4% in 2018. We believe that our focus on innovation will enable
the Company to expand end-user product applications and attract new
clients and expand relationships with existing customers. We are
encouraged by positive trends in revenues and gross margins which
we expect to enable us to better navigate the industrial and
economic landscape ahead," commented Mr. Zengyong Wang, CEO and
Chairman of the Company.
Fourth Quarter 2019 Results
Revenues for the fourth quarter of 2019 were RMB86.8 million or US$12.5
million, compared with RMB90.1
million in the fourth quarter of 2018, a decrease of
RMB3.3 million, or 3.7%. Sales volume
accounted for an increase of RMB3.2
million while the decrease of average sales price caused a
decrease of RMB6.5 million.
Sales of specialty films for the fourth quarter of 2019 were
RMB47.7 million or US$6.9 million, or 54.9% of total revenues,
compared with RMB39.8 million or
44.1% of total revenue in the fourth quarter of 2018. Sales volume
accounted for an increase of RMB10.9
million while the decrease of average sales price caused a
decrease of RMB3.0 million.
The following is a breakdown of commodity and specialty film
sales for the three-month periods ended December 31, 2019 and 2018 (amounts in
thousands):
|
|
Three months
period ended
|
|
|
December 31,
2019
|
% of Total
|
December 31,
2018
|
% of Total
|
|
|
RMB
|
US$
|
RMB
|
Stamping and transfer
film
|
|
30,005
|
4,309
|
34.6%
|
38,617
|
42.9%
|
Printing
film
|
|
5,265
|
756
|
6.1%
|
6,813
|
7.6%
|
Metallized
film
|
|
1,682
|
242
|
1.9%
|
1,805
|
2.0%
|
Specialty
film
|
|
47,720
|
6,855
|
54.9%
|
39,781
|
44.1%
|
Base film for other
applications
|
|
2,171
|
312
|
2.5%
|
3,108
|
3.4%
|
|
|
|
|
|
|
|
Total
|
|
86,843
|
12,474
|
100%
|
90,124
|
100%
|
Sales in China for the fourth
quarter of 2019 were RMB81.4 million,
or US$11.7 million, or 93.8% of total
revenues, compared with RMB80.8
million or 89.7% of total revenues in the fourth quarter of
2018. Sales volume accounted for an increase of RMB7.0 million while the decrease of average
sales price caused a decrease of RMB6.4
million.
Overseas sales for the fourth quarter of 2019 were RMB5.4 million or US$0.8
million, or 6.2% of total revenues, compared with
RMB9.3 million or 10.3% of total
revenues in the fourth quarter of 2018.
The following is a breakdown of domestic versus overseas sales
for the three-month periods ended December
31, 2019 and 2018 (amounts in thousands):
|
|
Three-month period
ended
|
|
|
December 31,
2019
|
% of Total
|
December 31,
2018
|
% of Total
|
|
|
RMB
|
US$
|
RMB
|
Sales in
China
|
|
81,442
|
11,698
|
93.8%
|
80,837
|
89.7%
|
Sales in other
countries
|
|
5,401
|
776
|
6.2%
|
9,287
|
10.3%
|
|
|
|
|
|
|
|
Total
|
|
86,843
|
12,474
|
100%
|
90,124
|
100%
|
Gross profit for the fourth quarter of 2019 was RMB31.0 million or US$4.5
million, representing a gross margin of 35.7%, compared with
a gross profit of RMB21.3 million,
representing a gross margin of 23.7% in the fourth quarter of
2018.
Operating expenses for the fourth quarter of 2019 were
RMB15.7 million or US$2.3 million compared with RMB19.0 million in the fourth quarter of
2018.
Net profit attributable to the Company for the fourth quarter of
2019 was RMB10.3 million or
US$1.5 million, compared with net
loss attributable to the Company of RMB3.5
million in the fourth quarter of 2018.
Basic and diluted profit per share was RMB3.17 or US$0.46,
compared with basic and diluted loss per share of RMB1.06 in the fourth quarter of 2018.
2019 Full Year Results
During the fiscal year ended December 31,
2019, net revenues were RMB335.6
million (US$48.2 million),
compared to RMB333.5 million in 2018,
representing an increase of RMB2.1
million or 0.6%. The decrease in average sales price caused
a decrease of RMB0.8 million, which
was more than offset by the increase in sales volume factor caused
an increase of RMB2.9 million.
In 2019, sales of specialty films were RMB162.4 million (US$23.3
million) or 48.4% of our total revenues as compared to
RMB148.8 million or 44.6% in 2018,
which was an increase of RMB13.6
million, or 9.1% higher than 2018. The increase of sales
volume led to an increase of RMB14.3
million, offset in part by the decline in average sales
price which caused a decrease of RMB0.7
million.
Overseas sales were RMB47.6
million (US$6.8 million) or
14.2% of total revenues, compared with RMB45.4 million or 13.6% of total revenues in
2018. The increase of average sales price caused an increase of
RMB0.6 million and the increase of
sales volume caused an increase of RMB1.6
million.
The following is a breakdown of domestic versus overseas sales
for the periods ended December 31,
2019 and 2018 (amounts in thousands):
|
For the year ended December 31
|
|
|
|
2019
|
% of Total
|
2018
|
% of Total
|
|
|
|
|
RMB
|
US$
|
|
RMB
|
|
|
|
Sales in
China
|
|
288,066
|
41,378
|
85.8%
|
288,128
|
86.4%
|
|
Sales in other
countries
|
|
47,554
|
6,831
|
14.2%
|
45,394
|
13.6%
|
|
|
|
335,620
|
48,209
|
100.0%
|
333,522
|
100.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Our gross profit for the year ended December 31, 2019 was RMB83.6 million (US$12.0
million), compared to RMB 54.7
million (US$8.0 million) in
2018. Our average unit sales price decreased by 0.2% compared to
last year. The unit sales cost decreased by 10.4% due to the price
decrease of main raw materials. Our gross margin was 24.9% for the
year of 2019, as compared to a gross margin of 16.4% in 2018.
Our operating expenses during the year ended December 31, 2019 were RMB60.5 million, a decrease of RMB5.5 million, or 8.3%, as compared to 2018. The
decrease was mainly due to the reduction in expense of R&D.
Net profit attributable to the Company for full year 2019 was
RMB11.4 million or US$1.6 million, compared with a net loss of
RMB22.2 million in 2018.
Basic and diluted earnings per share for the year ended
December 31, 2019 was RMB3.48 or US$0.50.
Net cash provided by operating activities was RMB54.4 million for the year ended December 31, 2019 as compared to net cash
provided by operating activities of RMB25.4
million for the year ended December
31, 2018.
Cash and cash equivalents on December 31,
2019 was RMB60.9 million or
US$8.7 million, compared with
RMB8.9 million as of December 31, 2018.
Conference Call
The Company will host a teleconference on Wednesday, April 29, 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: 34138. The replay will be available
until May 13, 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 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, uncertainty around coronavirus (COVID-19) outbreak and the
effects of government and other measures seeking to contain its
spread; risks related to an economic downturn or recession in
the United States and in other
countries around the world; and changes in political, business, and
economic conditions, 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 Manager
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 Follow
FUWEI FILMS
(HOLDINGS) CO., LTD and SUBSIDIARIES
|
CONSOLIDATED
BALANCE SHEETS
|
As of December 31,
2019 and 2018
|
(amounts in
thousands, except share and per share data)
|
|
|
|
December 31,
2019
|
|
December 31,
2018
|
|
RMB
|
US$
|
|
RMB
|
ASSETS
|
Current
assets
|
|
|
|
|
|
Cash and cash
equivalents
|
|
60,871
|
8,744
|
|
8,908
|
Restricted
cash
|
|
25,500
|
3,663
|
|
38,000
|
Accounts and bills
receivable, net
|
|
26,960
|
3,873
|
|
22,627
|
Inventories
|
|
23,584
|
3,388
|
|
24,675
|
Advance to
suppliers
|
|
6,277
|
902
|
|
5,694
|
Prepayments and other
receivables
|
|
1,058
|
152
|
|
1,068
|
Deferred tax assets –
current
|
|
1,266
|
182
|
|
1,195
|
Total current
assets
|
|
145,516
|
20,904
|
|
102,167
|
|
|
|
|
|
|
Property, plant and
equipment, net
|
|
302,642
|
43,472
|
|
331,168
|
Construction in
progress
|
|
-
|
-
|
|
366
|
Lease prepayments,
net
|
|
15,762
|
2,264
|
|
16,296
|
Advance to suppliers
- long term, net
|
|
1,542
|
221
|
|
1,542
|
Deferred tax assets -
non current
|
|
509
|
73
|
|
3,143
|
|
|
|
|
|
|
Total
assets
|
|
465,971
|
66,934
|
|
454,682
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
Current
liabilities
|
|
|
|
|
|
Short-term
borrowings
|
|
65,000
|
9,337
|
|
64,950
|
Due to related
parties
|
|
119,297
|
17,136
|
|
114,692
|
Accounts
payables
|
|
19,532
|
2,806
|
|
20,750
|
Notes
payable
|
|
41,000
|
5,889
|
|
48,000
|
Advance from
customers
|
|
5,204
|
748
|
|
1,859
|
Accrued expenses and
other payables
|
|
5,454
|
783
|
|
5,072
|
Total current
liabilities
|
|
255,487
|
36,699
|
|
255,323
|
Deferred tax
liabilities
|
|
2,290
|
329
|
|
2,528
|
|
|
|
|
|
|
Total
liabilities
|
|
257,777
|
37,028
|
|
257,851
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
Shareholders'
equity
|
|
|
|
|
|
|
|
|
|
|
|
Registered capital
(of US$0.519008 par value; 5,000,000
shares authorized; 3,265,837 issued and outstanding)
|
|
13,323
|
1,914
|
|
13,323
|
|
|
|
|
|
|
Additional paid-in
capital
|
|
311,907
|
44,803
|
|
311,907
|
Statutory
reserve
|
|
37,441
|
5,378
|
|
37,441
|
Retained
earnings
|
|
(155,317)
|
(22,310)
|
|
(166,680)
|
Cumulative
translation adjustment
|
|
840
|
121
|
|
840
|
Total
shareholders' equity
|
|
208,194
|
29,906
|
|
196,831
|
|
|
|
|
|
|
Total
equity
|
|
208,194
|
29,906
|
|
196,831
|
Total liabilities
and equity
|
|
465,971
|
66,934
|
|
454,682
|
|
|
|
|
|
|
|
FUWEI FILMS
(HOLDINGS) CO., LTD and SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(LOSS)
|
For the Years Ended
December 31, 2019, 2018 and 2017
|
(amounts in
thousands, except share and per share data)
|
|
|
|
The Year Ended
December 31,
|
|
|
|
|
|
2019
|
2018
|
2017
|
|
RMB
|
US$
|
RMB
|
RMB
|
Net sales
|
|
335,620
|
48,209
|
333,522
|
290,706
|
Cost of
sales
|
|
252,010
|
36,199
|
278,834
|
263,606
|
|
|
|
|
|
|
Gross
profit
|
|
83,610
|
12,010
|
54,688
|
27,100
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
Selling
expenses
|
|
13,721
|
1,971
|
13,363
|
14,520
|
Administrative
expenses
|
|
46,794
|
6,722
|
52,593
|
46,514
|
Loss on impairment of
assets
|
|
-
|
-
|
-
|
-
|
Total operating
expenses
|
|
60,515
|
8,693
|
65,956
|
61,034
|
|
|
|
|
|
|
Operating income
(loss)
|
|
23,095
|
3,317
|
(11,268)
|
(33,934)
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
- Interest
income
|
|
1,106
|
159
|
1,225
|
725
|
- Interest
expense
|
|
(8,892)
|
(1,277)
|
(9,766)
|
(9,453)
|
- Others income
(expense), net
|
|
(1,621)
|
(233)
|
1,255
|
(2,533)
|
Total other income
(expense)
|
|
(9,407)
|
(1,351)
|
(7,286)
|
(11,261)
|
|
|
|
|
|
|
Income (loss) before
provision for income taxes
|
|
13,688
|
1,966
|
(18,554)
|
(45,195)
|
|
|
|
|
|
|
Income tax (expense)
benefit
|
|
(2,325)
|
(334)
|
(3,618)
|
(808)
|
|
|
|
|
|
|
Net income
(loss)
|
|
11,363
|
1,632
|
(22,172)
|
(46,003)
|
|
|
|
|
|
|
Net income
(loss) attributable to noncontrolling interests
|
|
-
|
-
|
-
|
-
|
Net income (loss)
attributable to the Company
|
|
11,363
|
1,632
|
(22,172)
|
(46,003)
|
|
|
|
|
|
|
Other comprehensive
income (loss):
|
|
|
|
|
|
- Foreign currency
translation adjustments attributable to
noncontrolling interest
|
|
-
|
-
|
-
|
-
|
- Foreign currency
translation adjustments attributable to
the Company
|
|
-
|
-
|
(2,026)
|
1,821
|
|
|
|
|
|
|
Comprehensive income
(loss) attributable to
non-controlling interest
|
|
-
|
-
|
-
|
-
|
Comprehensive income
(loss) attribute to the Company
|
|
11,363
|
1,632
|
(24,198)
|
(44,182)
|
|
|
|
|
|
|
Net earnings (loss)
per share,
Basic and diluted
|
|
3.48
|
0.50
|
(6.79)
|
(14.09)
|
Weighted average
number ordinary shares,
Basic and diluted
|
|
3,265,837
|
3,265,837
|
3,265,837
|
3,265,837
|
FUWEI FILMS
(HOLDINGS) CO., LTD and SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
For the Years Ended
December 31, 2019, 2018 and 2017
|
(Amounts in
thousands)
|
|
|
|
The Years Ended
December 31,
|
|
|
|
|
|
2019
|
|
2018
|
2017
|
|
|
RMB
|
US$
|
|
RMB
|
RMB
|
Cash flow from
operating activities
|
|
|
|
|
|
|
Net loss
|
|
11,363
|
1,632
|
|
(22,172)
|
(46,003)
|
Adjustments to
reconcile net loss to net cash
|
|
|
|
|
|
|
provided by (used in)
operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Loss on Long-term
assets impairment
|
|
-
|
-
|
|
-
|
-
|
- Depreciation of
property, plant and equipment
|
|
41,451
|
5,954
|
|
44,509
|
42,877
|
- Amortization of
intangible assets
|
|
534
|
77
|
|
534
|
528
|
- Deferred income
taxes (benefit)
|
|
2,325
|
334
|
|
3,617
|
808
|
- Bad debt (recovery)
expense
|
|
(1,014)
|
(146)
|
|
(620)
|
(746)
|
- Inventory
provision
|
|
1,489
|
214
|
|
-
|
1,340
|
Changes in operating
assets and liabilities
|
|
|
|
|
|
|
- Investment income
recorded on Fuwei Holdings' book
|
|
-
|
-
|
|
-
|
-
|
- Accounts and bills
receivable
|
|
(3,319)
|
(477)
|
|
(1,884)
|
10,075
|
-
Inventories
|
|
(399)
|
(57)
|
|
(96)
|
(766)
|
- Advance to
suppliers
|
|
(583)
|
(84)
|
|
(1,796)
|
2,145
|
- Prepaid expenses and
other current assets
|
|
10
|
1
|
|
161
|
75
|
- Accounts
payable
|
|
(1,217)
|
(174)
|
|
3,278
|
(3,110)
|
- Accrued expenses and
other payables
|
|
(302)
|
(43)
|
|
(850)
|
128
|
- Advance from
customers
|
|
3,344
|
480
|
|
(117)
|
(1,533)
|
- Tax
payable
|
|
684
|
98
|
|
817
|
5,009
|
|
|
|
|
|
|
|
Net cash provided by
(used in) operating activities
|
|
54,366
|
7,809
|
|
25,381
|
10,827
|
|
|
|
|
|
|
|
Cash flow from
investing activities
|
|
|
|
|
|
|
Purchases of
property, plant and equipment
|
|
(12,925)
|
(1,857)
|
|
(4,619)
|
(3,282)
|
Advanced to suppliers
- non current
|
|
-
|
-
|
|
28
|
291
|
Amount change in
construction in progress
|
|
366
|
53
|
|
-
|
65
|
|
|
|
|
|
|
|
Deposit for
purchase
|
|
-
|
-
|
|
-
|
-
|
|
|
|
|
|
|
|
Net cash used in
(provided by) investing activities
|
|
(12,559)
|
(1,804)
|
|
(4,591)
|
(2,926)
|
|
|
|
|
|
|
|
Cash flow from
financing activities
|
|
|
|
|
|
|
Principal payments of
bank loans
|
|
-
|
-
|
|
-
|
(3,300)
|
Proceeds from
short-term bank loans
|
|
50
|
7
|
|
14,950
|
(10,000)
|
Proceeds from related
party
|
|
4,606
|
662
|
|
(36,382)
|
19,327
|
Payment of capital
lease obligation
|
|
-
|
-
|
|
-
|
-
|
Change in notes
payable
|
|
(7,000)
|
(1,005)
|
|
(19,900)
|
(32,988)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by
(used in) financing activities
|
|
(2,344)
|
(336)
|
|
(41,332)
|
(26,961)
|
|
|
|
|
|
|
|
Effect of foreign
exchange rate changes
|
|
-
|
(85)
|
|
(2,014)
|
1,760
|
|
|
|
|
|
|
|
Net increase
(decrease) in cash and cash equivalent, restricted cash
|
|
39,463
|
5,584
|
|
(22,556)
|
(17,300)
|
|
|
|
|
|
|
|
Cash and cash
equivalent,and restricted cash
|
|
|
|
|
|
|
At beginning of
period/year
|
|
46,908
|
6,823
|
|
69,464
|
86,764
|
At end of
period/year
|
|
86,371
|
12,407
|
|
46,908
|
69,464
|
|
|
|
|
|
|
|
SUPPLEMENTARY
DISCLOSURE:
|
|
|
|
|
|
|
Interest
paid
|
|
8,892
|
1,277
|
|
9,766
|
9,453
|
Income tax
paid
|
|
-
|
-
|
|
-
|
-
|
|
|
|
|
|
|
|
SUPPLEMENTARY
SCHEDULE OF NONCASH INVESTING AND
FINANCIAL ACTIVITIES:
|
|
|
|
|
|
|
Account payable for
plant and equipment:
|
|
1,010
|
145
|
|
1,010
|
1,374
|
Obligations for
acquired equipment under capital lease:
|
|
-
|
-
|
|
-
|
-
|
View original
content:http://www.prnewswire.com/news-releases/fuwei-films-announces-fourth-quarter-and-full-year-2019-financial-results-301047988.html
SOURCE Fuwei Films (Holdings) Co., Ltd.