-Teleconference to be Held on Friday, June 15, 2018 at 9:00 am EDT–
BEIJING, June 14, 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 first quarter of
2018 ended March 31, 2018.
Highlights
- Net sales increased 13.3% to RMB76.9
million or US$12.3 million
during the first quarter ended March 31,
2018 compared to the same period in 2017
- Specialty film sales accounted for 42.8% of total revenues
compared to 32.0% for the same period in 2017
- Gross margins increased to 12.3% compared to gross margin of
5.5% during the same period in 2017
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 our gross margin
improvement. We believe our commitment to innovation and R&D
has expanded our end-user applications that will enable the Company
to capitalize on these opportunities despite challenging industry
and economic conditions."
First Quarter 2018 Results
Net sales during the first quarter ended March 31, 2018 were RMB76.9 million or US$12.3
million, compared to RMB67.9
million, during the same period in 2017, representing an
increase of RMB9.0 million or 13.3%,
mainly due to sales price increases.
In the first quarter of 2018, sales of specialty films were
RMB32.9 million or US$5.3 million or 42.8% of our total revenues as
compared to RMB21.8 million or 32.0%
in the same period of 2017. The increase was mainly due to
increases in sales volume.
The following is a breakdown of commodity and specialty film
sales (amounts in thousands):
|
Three-Month
Period
|
|
Three-Month
Period
|
|
|
Ended
|
|
Ended
|
|
|
March 31,
2018
|
% of Total
|
March 31,
2017
|
% of Total
|
|
RMB
|
US$
|
|
RMB
|
|
Stamping and transfer
film
|
30,852
|
4,918
|
40.2%
|
27,071
|
39.9%
|
Printing
film
|
5,868
|
936
|
7.6%
|
6,270
|
9.2%
|
Metalization
film
|
1,174
|
187
|
1.5%
|
2,618
|
3.9%
|
Specialty
film
|
32,947
|
5,253
|
42.8%
|
21,762
|
32.0%
|
Base film for other
application
|
6,086
|
970
|
7.9%
|
10,223
|
15.0%
|
|
|
|
|
|
|
|
76,927
|
12,264
|
100.0%
|
67,944
|
100.0%
|
Overseas sales were RMB11.0
million or US$1.8 million, or
14.3% of total revenues, compared with RMB13.2 million or 19.4% of total revenues in the
first quarter of 2017, representing a decrease of RMB2.2 million or 16.7%. While a decrease in
sales volume caused a decrease of RMB2.9
million, this was offset by an increase of RMB0.7 million caused by the increase of sales
price.
The following is a breakdown of PRC domestic and overseas sales
(amounts in thousands except percentages):
|
Three-Month
Period
|
|
Three-Month
Period
|
|
|
Ended
|
|
Ended
|
|
|
March 31,
2018
|
% of Total
|
March 31,
2017
|
% of Total
|
|
RMB
|
US$
|
|
RMB
|
|
Sales in
China
|
65,928
|
10,510
|
85.7%
|
54,730
|
80.6%
|
Sales in other
countries
|
10,999
|
1,754
|
14.3%
|
13,214
|
19.4%
|
|
|
|
|
|
|
|
76,927
|
12,264
|
100.0%
|
67,944
|
100.0%
|
Our gross profit was RMB9.5
million or US$1.5 million for
the first quarter ended March 31,
2018, representing a gross margin of 12.3%, as compared to a
gross margin of 5.5% for the same period in 2017. Correspondingly,
gross margin increased by 6.8 percentage points compared to the
same period in 2017. Our average cost of goods sold increased by
5.1% compared to the same period in 2017 due to the price increase
of main raw materials while our average product sales prices
increased by 13.0% compared to the same period in 2017.
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,
2018, which contributed to the increase in our gross margin
compared with the same period in 2017.
Operating expenses for the first quarter ended March 31, 2018 were RMB15.8 million or US$2.5
million, which was RMB2.0
million, or 8.0% higher than the same period in 2017. This
increase was mainly due to the increased allowance for doubtful
accounts receivable and increased expense in R&D.
Net loss attributable to the Company during the first quarter
ended March 31, 2018 was RMB8.2 million or US$1.3
million compared to net loss attributable to the Company of
RMB12.2 million during the same
period in 2017.
Basic and diluted net loss per share was RMB2.51 or US$0.40
and RMB3.72 for the three-month
period ended March 31, 2018 and 2017,
respectively.
Total shareholders' equity was RMB210.8
million or US$33.6 million as
of March 31, 2018, compared with
RMB221.0 million as of December 31, 2017.
As of March 31, 2018, the Company
had 3,265,837 basic and diluted ordinary shares outstanding.
Conference Call Information
The Company will host a teleconference on Friday, June 15, 2018, at 9:00 a.m. 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: 33501. The replay will be available
until July 15, 2018, at 9:00 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 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,
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.:
Vivian Chen
Investor Relations
Grayling
Phone: +1-646-284-9427
Email: vivian.chen@grayling.com
Financial Tables to Follow
FUWEI FILMS
(HOLDINGS) CO., LTD. AND SUBSIDIARIES
CONDENSED
CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31,
2018 AND DECEMBER 31, 2017
(amounts in thousands
except share and per share value)
(Unaudited)
|
|
|
March 31,
2018
|
|
December 31,
2017
|
|
RMB
|
US$
|
|
RMB
|
ASSETS
|
Current
assets
|
|
|
|
|
|
Cash and cash
equivalents
|
|
8,335
|
1,329
|
|
12,963
|
Restricted
cash
|
|
5,000
|
797
|
|
56,501
|
Accounts and bills
receivable, net
|
|
24,144
|
3,849
|
|
20,123
|
Inventories
|
|
22,810
|
3,636
|
|
24,578
|
Advance to
suppliers
|
|
5,160
|
823
|
|
3,898
|
Prepayments and other
receivables
|
|
1,140
|
182
|
|
1,404
|
Deferred tax assets -
current
|
|
1,476
|
235
|
|
1,288
|
Total current
assets
|
|
68,065
|
10,851
|
|
120,755
|
|
|
|
|
|
|
Plant, properties and
equipment, net
|
|
359,976
|
57,389
|
|
371,058
|
Construction in
progress
|
|
480
|
77
|
|
366
|
Lease prepayments,
net
|
|
16,696
|
2,662
|
|
16,830
|
Advance to suppliers -
long term, net
|
|
1,570
|
250
|
|
1,570
|
Deferred tax assets -
non current
|
|
6,866
|
1,095
|
|
6,901
|
|
|
|
|
|
|
Total
assets
|
|
453,653
|
72,324
|
|
517,480
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
Current
liabilities
|
|
|
|
|
|
Short-term
borrowings
|
|
50,000
|
7,971
|
|
50,000
|
Long-term loan,
current portion
|
|
-
|
-
|
|
-
|
Due to related
parties
|
|
156,078
|
24,883
|
|
151,074
|
Accounts
payables
|
|
20,581
|
3,281
|
|
17,470
|
Notes
payable
|
|
5,000
|
797
|
|
67,900
|
Advance from
customers
|
|
2,003
|
319
|
|
1,976
|
Accrued expenses and
other payables
|
6,508
|
1,038
|
|
5,268
|
Total current
liabilities
|
|
240,170
|
38,289
|
|
293,688
|
|
|
|
|
|
|
Deferred tax
liabilities
|
|
2,704
|
431
|
|
2,763
|
|
|
|
|
|
|
Total
liabilities
|
|
242,874
|
38,720
|
|
296,451
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
Shareholders'
equity
|
|
|
|
|
|
Registered capital(of
US$0.519008 par value; 5,000,000 shares authorized; 3,265,837
issued and outstanding)
|
|
13,323
|
2,124
|
|
13,323
|
Additional paid-in
capital
|
|
311,907
|
49,725
|
|
311,907
|
Statutory
reserve
|
|
37,441
|
5,969
|
|
37,441
|
Accumulated
deficit
|
|
(152,717)
|
(24,347)
|
|
(144,508)
|
Cumulative translation
adjustment
|
|
825
|
133
|
|
2,866
|
Total shareholders'
equity
|
|
210,779
|
33,604
|
|
221,029
|
Total
equity
|
|
210,779
|
33,604
|
|
221,029
|
Total liabilities
and equity
|
|
453,653
|
72,324
|
|
517,480
|
FUWEI FILMS
(HOLDINGS) CO., LTD. AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
LOSS
FOR THE
THREE-MONTH PERIOD ENDED MARCH 31, 2018 AND 2017
(amounts in thousands
except share and per share value)
(Unaudited)
|
|
The Three-Month
Period Ended
March 31,
|
|
2018
|
|
2017
|
|
RMB
|
US$
|
|
RMB
|
Net sales
|
76,927
|
12,264
|
|
67,944
|
Cost of
sales
|
67,436
|
10,751
|
|
64,187
|
|
|
|
|
|
Gross
Profit
|
9,491
|
1,513
|
|
3,757
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
Selling
expenses
|
2,970
|
473
|
|
3,506
|
Administrative
expenses
|
12,876
|
2,053
|
|
10,266
|
Total operating
expenses
|
15,846
|
2,526
|
|
13,772
|
|
|
|
|
|
Operating
loss
|
(6,355)
|
(1,013)
|
|
(10,015)
|
|
|
|
|
|
Other income
(expense)
|
|
|
|
|
- Interest
income
|
374
|
60
|
|
286
|
- Interest
expense
|
(2,201)
|
(351)
|
|
(2,446)
|
- Others (expense)
income, net
|
(237)
|
(38)
|
|
(47)
|
|
|
|
|
|
Total other
expense
|
(2,064)
|
(329)
|
|
(2,207)
|
|
|
|
|
|
Loss before provision
for income taxes
|
(8,419)
|
(1,342)
|
|
(12,222)
|
|
|
|
|
|
Income tax
benefit
|
210
|
33
|
|
65
|
|
|
|
|
|
Net
loss
|
(8,209)
|
(1,309)
|
|
(12,157)
|
|
|
|
|
|
Net loss attributable
to non-controlling interests
|
-
|
-
|
|
-
|
Net loss attributable
to the Company
|
(8,209)
|
(1,309)
|
|
(12,157)
|
|
|
|
|
|
Other comprehensive
income
|
|
|
|
|
- Foreign currency
translation adjustments attributable to non-controlling
interest
|
-
|
-
|
|
-
|
- Foreign currency
translation adjustments attributable to the Company
|
(2,041)
|
(325)
|
|
276
|
|
|
|
|
|
Comprehensive loss
attributable to non-controlling interest
|
-
|
-
|
|
-
|
Comprehensive loss
attributable to the Company
|
(10,250)
|
(1,634)
|
|
(11,881)
|
|
|
|
|
|
Loss per share,
Basic and diluted
|
(2.51)
|
(0.40)
|
|
(3.72)
|
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, 2018 AND 2017
(amounts in thousands
except share and per share value)
(Unaudited)
|
|
|
The Three-Month
Period Ended
March 31,
|
|
|
2018
|
|
2017
|
|
|
RMB
|
US$
|
|
RMB
|
Cash flow from
operating activities
|
|
|
|
|
|
Net loss
|
|
(8,209)
|
(1,309)
|
|
(12,157)
|
Adjustments to
reconcile net loss to net cash
|
|
|
|
|
|
used in operating
activities
|
|
|
|
|
|
-
Depreciation of property, plant and equipment
|
|
11,155
|
1,778
|
|
10,981
|
-
Amortization of intangible assets
|
|
134
|
21
|
|
131
|
-
Deferred income taxes
|
|
(212)
|
(34)
|
|
(65)
|
-
Bad debt expense
|
|
1,251
|
199
|
|
287
|
-
Inventory provision
|
|
-
|
-
|
|
-
|
Changes in operating
assets and liabilities
|
|
|
|
|
|
-
Accounts and bills receivable
|
|
(5,273)
|
(841)
|
|
4,906
|
-
Inventories
|
|
1,768
|
282
|
|
227
|
-
Advance to suppliers
|
|
(1,261)
|
(201)
|
|
(4,683)
|
-
Prepaid expenses and other current assets
|
|
89
|
14
|
|
47
|
-
Accounts payable
|
|
3,111
|
495
|
|
(2,110)
|
-
Accrued expenses and other payables
|
|
(71)
|
(11)
|
|
97
|
-
Advance from customers
|
|
27
|
4
|
|
(945)
|
-
Tax payable
|
|
1,516
|
242
|
|
3,361
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
|
4,025
|
639
|
|
77
|
|
|
|
|
|
|
Cash flow from
investing activities
|
|
|
|
|
|
Purchases of property,
plant and equipment
|
|
(74)
|
(12)
|
|
(14)
|
Restricted cash
related to trade finance
|
|
51,501
|
8,210
|
|
27,921
|
Advanced to suppliers
- non current
|
|
-
|
-
|
|
1,329
|
Amount change in
construction in progress
|
|
(114)
|
(18)
|
|
-
|
|
|
|
|
|
|
Net cash provided by
investing activities
|
|
51,313
|
8,180
|
|
29,236
|
|
|
|
|
|
|
Cash flow from
financing activities
|
|
|
|
|
|
Proceeds from related
party
|
|
5,004
|
798
|
|
4,393
|
Payment of capital
lease obligation
|
|
-
|
-
|
|
-
|
Change in notes
payable
|
|
(62,900)
|
(10,028)
|
|
(25,388)
|
|
|
|
|
|
|
Net cash used in
financing activities
|
|
(57,896)
|
(9,230)
|
|
(20,995)
|
|
|
|
|
|
|
Effect of foreign
exchange rate changes
|
|
(2,070)
|
(252)
|
|
267
|
|
|
|
|
|
|
Net decrease in cash
and cash equivalent
|
|
(4,628)
|
(663)
|
|
8,585
|
|
|
|
|
|
|
Cash and cash
equivalent
|
|
|
|
|
|
At beginning of
period/year
|
|
12,963
|
1,992
|
|
13,343
|
At end of
period/year
|
|
8,335
|
1,329
|
|
21,928
|
|
|
|
|
|
|
SUPPLEMENTARY
DISCLOSURE:
|
|
|
|
|
|
Interest
paid
|
|
2,201
|
351
|
|
2,446
|
Income tax
paid
|
|
-
|
-
|
|
-
|
|
|
|
|
|
|
SUPPLEMENTARY
SCHEDULE OF NONCASH INVESTING AND FINANCIAL
ACTIVITIES:
|
Account payable for
plant and equipment:
|
|
1,257
|
200
|
|
1,231
|
|
|
|
|
|
|
View original
content:http://www.prnewswire.com/news-releases/fuwei-films-announces-its-unaudited-financial-results-for-the-first-quarter-of-2018-300666712.html
SOURCE Fuwei Films (Holdings) Co., Ltd.