- Teleconference to be
Held on Tuesday, April 24, 2018, at
9:00 a.m. EDT –
BEIJING, April 23, 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 financial results for the fourth quarter and full
year ended December 31, 2017.
Fuwei Films 2017 Highlights
- Net revenues were RMB290.7
million or US$44.7
million.
- Net cash provided by operating activities was RMB10.8 million.
- Our gross margin was 9.3%.
- Basic and diluted loss per share was RMB14.09 or US$2.17.
"We continue to face strong competition from emerging and
incumbent players which created oversupply relative to demand in
the marketplace in 2017. While this has impacted the Company's
financial results, we are pleased to announce that our sales volume
for specialty films has continuously increased. We believe that our
focus on continued innovation and R&D will enable the Company
to expand end-user applications and our high-end specialty films
while increasing the product portfolio, which we believe, will help
us to attract new clients and expand relationships with existing
customers. We are encouraged by positive trends in sales volume and
gross margins that we expect to enable us to weather different
industry and economic conditions in the periods ahead," commented
by Mr. Zengyong Wang, the CEO and Chairman of the Company.
Fourth Quarter 2017
Results
Revenues for the fourth quarter of 2017 were RMB78.8 million or US$12.1
million, compared with RMB70.9
million in the fourth quarter of 2016, an increase of
RMB7.9 million, or 11.1%. Sales
volume accounted for a decrease of RMB2.8
million while the increase of average sales price caused an
increase of RMB10.7 million.
Sales of specialty films for the fourth quarter of 2017 were
RMB32.3 million or US$5.0 million, or 40.9% of total revenues,
compared with RMB28.1 million or
39.7% of total revenue in the fourth quarter of 2016. The increase
was mainly attributable to increased selling volumes compared to
those in 2016.
The following is a breakdown of commodity and specialty film
sales for the three-month periods ended December 31, 2017 and 2016 (amounts in
thousands):
|
Three months
period ended
|
|
December 31,
2017
|
% of Total
|
December 31,
2016
|
% of Total
|
|
RMB
|
US$
|
RMB
|
Stamping and transfer
film
|
33,357
|
5,127
|
42.3%
|
28,269
|
39.9%
|
Printing
film
|
6,152
|
946
|
7.8%
|
4,135
|
5.8%
|
Metallized
film
|
1,456
|
224
|
1.8%
|
2,111
|
3.0%
|
Specialty
film
|
32,272
|
4,960
|
40.9%
|
28,141
|
39.7%
|
Base film for other
applications
|
5,602
|
861
|
7.1%
|
8,247
|
11.6%
|
|
|
|
|
|
|
Total
|
78,839
|
12,118
|
100%
|
70,903
|
100%
|
Overseas sales for the fourth quarter of 2017 were RMB11.3 million or US$1.7
million, or 14.4% of total revenues, compared with
RMB6.7 million or 9.5% of total
revenues in the fourth quarter of 2016. Sales volume accounted for
an increase of RMB3.2 million while
the increase of average sales price caused an increase of
RMB1.4 million.
The following is a breakdown of domestic versus overseas sales
for the three-month periods ended December
31, 2017 and 2016 (amounts in thousands):
|
Three-month period
ended
|
|
December 31,
2017
|
% of Total
|
December 31,
2016
|
% of Total
|
|
RMB
|
US$
|
RMB
|
Sales in
China
|
67,522
|
10,378
|
85.6%
|
64,186
|
90.5%
|
Sales in other
countries
|
11,317
|
1,739
|
14.4%
|
6,717
|
9.5%
|
|
|
|
|
|
|
Total
|
78,839
|
12,117
|
100%
|
70,903
|
100%
|
Gross profit for the fourth quarter of 2017 was RMB11.6 million or US$1.8
million, representing a gross margin of 14.7%, compared with
a gross profit of RMB5.5 million,
representing a gross margin of 7.7% in the fourth quarter of
2016.
Operating expenses for the fourth quarter of 2017 were
RMB16.7 million or US$2.6 million compared with RMB17.8 million or US$2.6million in the fourth quarter of 2016.
Operating loss for the fourth quarter of 2017 was RMB5.1 million or US$0.8
million, compared with an operating loss of RMB12.3 million or US$1.8
million in the fourth quarter of 2016.
Net loss attributable to the Company for the fourth quarter of
2017 was RMB10.1 million or
US$1.6 million, compared with net
loss attributable to the Company of RMB18.8
million in the fourth quarter of 2016.
Basic and diluted loss per share was RMB3.10 or US$0.48,
compared with basic and diluted loss per share of RMB5.76 or US$0.83
in the fourth quarter of 2016.
2017 Full Year Results
During the fiscal year ended December 31,
2017, net revenues were RMB290.7
million or US$44.7 million,
compared to RMB253.9 million during
the same period in 2016, representing an increase of RMB36.8 million or 14.5%. For further analysis of
the factors causing revenue increase, the increase of average sales
price caused an increase of RMB32.0
million and the sales volume factor made an increase of
RMB4.8 million.
In 2017, sales of specialty films were RMB108.1 million or US$16.6 million or 37.2% of our total revenues as
compared to RMB96.1 million or 37.8%
in 2016, which was an increase of RMB12.0
million, or 12.5%, as compared to the same period in 2016.
The increase was due to the increased sales volume.
Overseas sales were RMB55.6
million or US$8.5 million, or
19.1% of total revenues, compared with RMB41.8 million or 16.5% of total revenues in
2016. For further analysis of the factors causing overseas sales
increase, the increase of average sales price caused an increase of
RMB5.5 million and sales volume
factor made an increase of RMB8.3
million.
The following is a breakdown of domestic versus overseas sales
for the periods ended December 31,
2017 and 2016 (amounts in thousands):
|
For the year ended
December 31,
|
|
|
2017
|
% of Total
|
2016
|
% of Total
|
|
|
RMB
|
US$
|
RMB
|
Sales in
China
|
|
235,143
|
36,141
|
80.9%
|
212,129
|
83.5%
|
Sales in other
countries
|
|
55,563
|
8,540
|
19.1%
|
41,797
|
16.5%
|
|
|
290,706
|
44,681
|
100.0%
|
253,926
|
100.0%
|
Our gross margin was 9.3% for the year of 2017, as compared to a
gross margin of 7.0% in 2016. Gross margin increased by 2.3
percentage points compared to the same period in 2016. Our average
unit sales price increased by 12.3% compared to last year. The unit
sales cost increased by 9.5% due to the price increase of main raw
materials. Consequently, the increase in sales price exceeded that
cost of goods sold per unit in product during 2017 compared with
2016, which contributed to the increase in our gross profit.
Total other expense is a combination result of interest income,
interest expense and others income (expense). Total other expense
during the year ended December 31,
2017 was RMB11.3 million or
US$1.7 million, compared to total
other expense of RMB6.9 million in
2016. This is mainly attributed to the increased interest.
Income tax expense during the year ended December 31, 2017 was RMB0.8 million or US$0.1
million compared to an income tax expense of RMB5.3 million during 2016, which was mainly
attributable to tax effect changes in deferred tax during 2017. We
only recognized deferred tax assets for the loss of 2017 after
considering the possibility of realizing the benefits under the
conservatism principle.
Net loss attributable to the Company for full year 2017 was
RMB46.0 million or US$7.1 million, compared with a net loss of
RMB54.5 million in 2016.
Net cash provided by operating activities was RMB10.8 million for the year ended December 31, 2017 as compared to net cash used in
operating activities of RMB23.2
million for the year ended December
31, 2016.
Cash and cash equivalents on December 31,
2017 was RMB12.96 million or
US$1.99 million, compared with
RMB13.3 million as of December 31, 2016.
Basic and diluted loss per share for the year ended December 31, 2017 was RMB14.09 or US$2.17.
Conference Call Information
The Company will host a teleconference on Tuesday, April
24, 2018 at 9:00 am 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: 27774.
The replay will be available until May 24, 2018, 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 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, 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.:
Vivian Chen
Investor Relations
Citigate Dewe Rogerson
Phone: +1-646-284-9427
Email: vivian.chen@citigatedewerogerson.com
Financial Tables Follow
FUWEI FILMS
(HOLDINGS) CO., LTD and SUBSIDIARIES
|
CONSOLIDATED
BALANCE SHEETS
|
As of December 31,
2017 and 2016
|
(amounts in
thousands, except share and per share data)
|
|
|
|
|
|
|
|
December 31,
2017
|
|
December 31,
2016
|
|
RMB
|
|
US$
|
|
RMB
|
ASSETS
|
Current
assets
|
|
|
|
|
|
Cash and cash
equivalents
|
12,963
|
|
1,992
|
|
13,343
|
Restricted
cash
|
56,501
|
|
8,684
|
|
73,421
|
Accounts and bills
receivable, net
|
20,123
|
|
3,093
|
|
29,453
|
Inventories
|
24,578
|
|
3,778
|
|
25,153
|
Advance to
suppliers
|
3,898
|
|
599
|
|
6,043
|
Prepayments and other
receivables
|
1,404
|
|
216
|
|
6,489
|
Deferred tax assets –
current
|
1,288
|
|
198
|
|
1,199
|
Total current
assets
|
120,755
|
|
18,560
|
|
155,101
|
|
|
|
|
|
|
Property, plant and
equipment, net
|
371,058
|
|
57,031
|
|
410,654
|
Construction in
progress
|
366
|
|
56
|
|
431
|
Lease prepayments,
net
|
16,830
|
|
2,587
|
|
17,358
|
Advance to suppliers
- long term, net
|
1,570
|
|
241
|
|
1,861
|
Deferred tax assets -
non current
|
6,901
|
|
1,061
|
|
8,032
|
|
|
|
|
|
|
Total
assets
|
517,480
|
|
79,536
|
|
593,437
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
Current
liabilities
|
|
|
|
|
|
Short-term
borrowings
|
50,000
|
|
7,685
|
|
60,000
|
Long-term loan,
current portion
|
-
|
|
-
|
|
3,300
|
Due to related
parties
|
151,074
|
|
23,220
|
|
131,747
|
Accounts
payables
|
17,470
|
|
2,685
|
|
20,581
|
Notes
payable
|
67,900
|
|
10,436
|
|
100,888
|
Advance from
customers
|
1,976
|
|
304
|
|
3,509
|
Accrued expenses and
other payables
|
5,268
|
|
810
|
|
5,204
|
Obligations under
capital leases-current
|
-
|
|
-
|
|
-
|
Total current
liabilities
|
293,688
|
|
45,140
|
|
325,229
|
Deferred tax
liabilities
|
2,763
|
|
425
|
|
2,997
|
|
|
|
|
|
|
Total
liabilities
|
296,451
|
|
45,565
|
|
328,226
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
Shareholders'
equity
|
|
|
|
|
|
Registered capital(of
US$0.519008 par value; 5,000,000 shares authorized; 3,265,837
issued and outstanding)
|
13,323
|
|
2,048
|
|
13,323
|
Additional paid-in
capital
|
311,907
|
|
47,939
|
|
311,907
|
Statutory
reserve
|
37,441
|
|
5,755
|
|
37,441
|
Retained
earnings
|
(144,508)
|
|
(22,210)
|
|
(98,505)
|
Cumulative
translation adjustment
|
2,866
|
|
439
|
|
1,045
|
Total
shareholders' equity
|
221,029
|
|
33,971
|
|
265,211
|
|
|
|
|
|
|
Total
equity
|
221,029
|
|
33,971
|
|
265,211
|
Total liabilities
and equity
|
517,480
|
|
79,536
|
|
593,437
|
FUWEI FILMS
(HOLDINGS) CO., LTD and SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(LOSS)
For the Years Ended
December 31, 2017, 2016 and 2015
(amounts in
thousands, except share and per share data)
|
|
|
The Year Ended
December 31,
|
|
2017
|
|
2016
|
|
2015
|
|
RMB
|
US$
|
|
RMB
|
|
RMB
|
Net sales
|
290,706
|
44,681
|
|
253,926
|
|
248,862
|
Cost of
sales
|
263,606
|
40,516
|
|
236,190
|
|
248,866
|
|
|
|
|
|
|
|
Gross profit
(loss)
|
27,100
|
4,165
|
|
17,736
|
|
(4)
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
Selling
expenses
|
14,520
|
2,232
|
|
13,764
|
|
14,404
|
Administrative
expenses
|
46,514
|
7,149
|
|
46,211
|
|
39,559
|
Loss on impairment of
assets
|
-
|
-
|
|
-
|
|
7,219
|
Total operating
expenses
|
61,034
|
9,381
|
|
59,975
|
|
61,182
|
|
|
|
|
|
|
|
Operating
loss
|
(33,934)
|
(5,216)
|
|
(42,239)
|
|
(61,186)
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
- Interest
income
|
725
|
111
|
|
735
|
|
1,236
|
- Interest
expense
|
(9,453)
|
(1,453)
|
|
(7,865)
|
|
(8,333)
|
- Others income
(expense), net
|
(2,533)
|
(389)
|
|
203
|
|
6,215
|
Total other income
(expense)
|
(11,261)
|
(1,731)
|
|
(6,927)
|
|
(882)
|
|
|
|
|
|
|
|
Loss before provision
for income taxes
|
(45,195)
|
(6,947)
|
|
(49,166)
|
|
(62,068)
|
|
|
|
|
|
|
|
Income tax (expense)
benefit
|
(808)
|
(124)
|
|
(5,317)
|
|
(7,000)
|
|
|
|
|
|
|
|
Net
loss
|
(46,003)
|
(7,071)
|
|
(54,483)
|
|
(69,068)
|
|
|
|
|
|
|
|
Net income
(loss) attributable to noncontrolling interests
|
-
|
-
|
|
-
|
|
(3)
|
Net loss attributable
to the Company
|
(46,003)
|
(7,071)
|
|
(54,483)
|
|
(69,065)
|
|
|
|
|
|
|
|
Other comprehensive
income (loss):
|
|
|
|
|
|
|
- Foreign currency
translation adjustments attributable to noncontrolling
interest
|
-
|
-
|
|
-
|
|
(37)
|
- Foreign currency
translation adjustments attributable to the Company
|
1,821
|
280
|
|
(4)
|
|
(150)
|
|
|
|
|
|
|
|
Comprehensive income
(loss) attributable to non-controlling interest
|
-
|
-
|
|
-
|
|
(40)
|
Comprehensive loss
attribute to the Company
|
(44,182)
|
(6,791)
|
|
(54,487)
|
|
(69,215)
|
|
|
|
|
|
|
|
Net loss per
share,
Basic and diluted
|
(14.09)
|
(2.17)
|
|
(16.68)
|
|
(21.15)
|
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, 2017, 2016 and 2015
(Amounts in
thousands)
|
|
|
The Years Ended
December 31,
|
|
2017
|
|
2016
|
|
2015
|
|
RMB
|
US$
|
|
RMB
|
|
RMB
|
Cash flow from
operating activities
|
|
|
|
|
|
|
Net loss
|
(46,003)
|
(7,071)
|
|
(54,483)
|
|
(69,068)
|
Adjustments to
reconcile net loss to net cash
|
|
|
|
|
|
|
provided by (used in)
operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Loss on Long-term
assets impairment
|
-
|
-
|
|
-
|
|
7,219
|
- Depreciation of
property, plant and equipment
|
42,877
|
6,590
|
|
43,193
|
|
44,515
|
- Amortization of
intangible assets
|
528
|
81
|
|
524
|
|
524
|
- Deferred income
taxes (benefit)
|
808
|
124
|
|
5,317
|
|
7,000
|
- Bad debt (recovery)
expense
|
(746)
|
(115)
|
|
2,466
|
|
(4,484)
|
- Inventory
provision
|
1,340
|
206
|
|
(226)
|
|
(1,106)
|
Changes in operating
assets and liabilities
|
|
|
|
|
|
|
- Investment income
recorded on Fuwei Holdings' book
|
-
|
-
|
|
(1,722)
|
|
-
|
- Accounts and bills
receivable
|
10,075
|
1,549
|
|
(21,873)
|
|
(103)
|
-
Inventories
|
(766)
|
(118)
|
|
4,647
|
|
(4,434)
|
- Advance to
suppliers
|
2,145
|
330
|
|
(403)
|
|
2,038
|
- Prepaid expenses and
other current assets
|
75
|
12
|
|
18
|
|
1,347
|
- Accounts
payable
|
(3,110)
|
(479)
|
|
(12,179)
|
|
(9,683)
|
- Accrued expenses and
other payables
|
128
|
20
|
|
(3,597)
|
|
2,446
|
- Advance from
customers
|
(1,533)
|
(236)
|
|
1,263
|
|
(1,145)
|
- Tax
payable
|
5,009
|
770
|
|
13,827
|
|
(2,016)
|
|
|
|
|
|
|
|
Net cash provided by
(used in) operating activities
|
10,827
|
1,663
|
|
(23,228)
|
|
(26,950)
|
|
|
|
|
|
|
|
Cash flow from
investing activities
|
|
|
|
|
|
|
Purchases of
property, plant and equipment
|
(3,282)
|
(504)
|
|
(11,218)
|
|
(222)
|
Restricted cash
related to trade finance
|
16,921
|
2,601
|
|
(30,198)
|
|
4,884
|
Advanced to suppliers
- non current
|
291
|
45
|
|
(421)
|
|
(718)
|
Amount change in
construction in progress
|
65
|
10
|
|
1,269
|
|
(1,334)
|
|
|
|
|
|
|
|
Deposit for
purchase
|
-
|
-
|
|
-
|
|
21,000
|
|
|
|
|
|
|
|
Net cash used in
(provided by) investing activities
|
13,995
|
2,152
|
|
(40,568)
|
|
23,610
|
|
|
|
|
|
|
|
Cash flow from
financing activities
|
|
|
|
|
|
|
Principal payments of
bank loans
|
(3,300)
|
(507)
|
|
(3,350)
|
|
(3,350)
|
Proceeds from
short-term bank loans
|
(10,000)
|
(1,537)
|
|
60,000
|
|
-
|
Proceeds from related
party
|
19,327
|
2,970
|
|
(11,333)
|
|
30,102
|
Payment of capital
lease obligation
|
-
|
-
|
|
(302)
|
|
(8,260)
|
Change in notes
payable
|
(32,988)
|
(5,070)
|
|
15,108
|
|
(9,759)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by
(used in) financing activities
|
(26,961)
|
(4,144)
|
|
60,123
|
|
8,733
|
|
|
|
|
|
|
|
Effect of foreign
exchange rate changes
|
1,759
|
399
|
|
2,661
|
|
(58)
|
|
|
|
|
|
|
|
Net (decrease)
increase in cash and cash equivalent
|
(380)
|
70
|
|
(1,012)
|
|
5,335
|
|
|
|
|
|
|
|
Cash and cash
equivalent
|
|
|
|
|
|
|
At beginning of
period/year
|
13,343
|
1,922
|
|
14,355
|
|
9,020
|
At end of
period/year
|
12,963
|
1,992
|
|
13,343
|
|
14,355
|
|
|
|
|
|
|
|
SUPPLEMENTARY
DISCLOSURE:
|
|
|
|
|
|
|
Interest
paid
|
9,453
|
1,453
|
|
7,865
|
|
8,333
|
Income tax
paid
|
-
|
-
|
|
-
|
|
-
|
|
|
|
|
|
|
|
SUPPLEMENTARY
SCHEDULE OF NONCASH INVESTING AND FINANCIAL
ACTIVITIES:
|
|
|
|
|
|
|
Account payable for
plant and equipment:
|
1,374
|
211
|
|
1,597
|
|
2,075
|
Obligations for
acquired equipment under capital lease:
|
-
|
-
|
|
-
|
|
302
|
View original
content:http://www.prnewswire.com/news-releases/fuwei-films-announces-fourth-quarter-and-full-year-2017-financial-results-300633805.html
SOURCE Fuwei Films (Holdings) Co., Ltd.