BEIJING, April 29, 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 financial results for the fourth quarter and full
year ended December 31, 2018.
Fuwei Films 4Q 2018 Highlights
- Net revenues were RMB90.1 million
or US$13.1 million, up 14.3%
year-over-year.
- Sales of specialty films were RMB39.8
million or US$5.8 million, up
23.2% year-over-year.
- Gross margin was 23.7%, compared to 14.7% a year ago.
- Basic and diluted loss per share was RMB1.1 or US$0.15,
compared to loss per share of RMB3.1
a year ago.
Fuwei Films 2018 Highlights
- Net revenues were RMB333.5
million or US$48.5 million, up
14.7% year-over-year.
- Sales of specialty films were RMB148.8
million or US$21.6 million, up
37.7% year-over-year.
- Net cash provided by operating activities was RMB25.4 million or US$3.7
million, compared to RMB10.8
million a year ago.
- Gross margin was 16.4%, compared to 9.3% a year ago.
- Basic and diluted loss per share was RMB6.79 or US$0.99,
compared to loss per share of RMB14.09 a year ago.
"Oversupply in the BOPET plastic films market persisted in 2018.
While this impacted the Company's results, we are pleased that our
revenues and gross margins continued to grow. Sales of specialty
films increased 37.7% year-over-year and accounted for 44.6% of our
total revenues 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 by Mr. Zengyong
Wang, the CEO and Chairman of the Company.
Fourth Quarter 2018 Results
Revenues for the fourth quarter of 2018 were RMB90.1 million or US$13.1
million, compared with RMB78.8
million in the fourth quarter of 2017, an increase of
RMB11.3 million, or 14.3%. Sales
volume accounted for a decrease of RMB7.3
million while the increase of average sales price caused an
increase of RMB18.6 million.
Sales of specialty films for the fourth quarter of 2018 were
RMB39.8 million or US$5.8 million, or 44.1% of total revenues,
compared with RMB32.3 million or
40.9% of total revenue in the fourth quarter of 2017. The increase
was mainly attributable to increase in sales volumes and average
sales price compared to the prior year.
The following is a breakdown of commodity and specialty film
sales for the three-month periods ended December 31, 2018 and 2017 (amounts in
thousands):
|
|
Three months
period ended
|
|
|
December 31,
2018
|
% of Total
|
December 31,
2017
|
% of Total
|
|
|
RMB
|
US$
|
RMB
|
Stamping and transfer
film
|
|
38,617
|
5,616
|
42.8%
|
33,357
|
42.3%
|
Printing
film
|
|
6,813
|
991
|
7.6%
|
6,152
|
7.8%
|
Metallized
film
|
|
1,805
|
263
|
2.0%
|
1,456
|
1.8%
|
Specialty
film
|
|
39,781
|
5,786
|
44.1%
|
32,272
|
40.9%
|
Base film for other
applications
|
|
3,108
|
452
|
3.4%
|
5,602
|
7.1%
|
|
|
|
|
|
|
|
Total
|
|
90,124
|
13,108
|
100%
|
78,839
|
100%
|
Sales in China for the fourth
quarter of 2018 were RMB80.8 million,
or US$11.8 million, or 89.7% of total
revenues, compared with RMB67.5
million or 85.6% of total revenues in the fourth quarter of
2017. Sales volume accounted for a decrease of RMB3.4 million while the increase of average
sales price caused an increase of RMB16.7
million.
Overseas sales for the fourth quarter of 2018 were RMB9.3 million or US$1.4
million, or 10.3% of total revenues, compared with
RMB11.3 million or 14.4% of total
revenues in the fourth quarter of 2017. Sales volume accounted for
a decrease of RMB3.9 million while
the increase of average sales price caused an increase of
RMB1.9 million.
The following is a breakdown of domestic versus overseas sales
for the three-month periods ended December
31, 2018 and 2017(amounts in thousands):
|
|
Three-month period
ended
|
|
|
December 31,
2018
|
% of Total
|
December 31,
2017
|
% of Total
|
|
|
RMB
|
US$
|
RMB
|
Sales in
China
|
|
80,837
|
11,757
|
89.7%
|
67,522
|
85.6%
|
Sales in other
countries
|
|
9,287
|
1,351
|
10.3%
|
11,317
|
14.4%
|
|
|
|
|
|
|
|
Total
|
|
90,124
|
13,108
|
100%
|
78,839
|
100%
|
Gross profit for the fourth quarter of 2018 was RMB21.3 million or US$3.1
million, representing a gross margin of 23.7%, compared with
a gross profit of RMB11.6 million,
representing a gross margin of 14.7% in the fourth quarter of
2017.
Operating expenses for the fourth quarter of 2018 were
RMB19.0 million or US$2.8 million compared with RMB16.7 million in the fourth quarter of
2017.
Operating profit for the fourth quarter of 2018 was RMB2.4 million or US$0.3
million, compared with an operating loss of RMB5.1 million in the fourth quarter of 2017.
Net loss attributable to the Company for the fourth quarter of
2018 was RMB3.5 million or
US$0.5 million, compared with net
loss attributable to the Company of RMB10.1
million in the fourth quarter of 2017.
Basic and diluted loss per share was RMB1.1 or US$0.15,
compared with basic and diluted loss per share of RMB3.1 in the fourth quarter of 2017.
2018 Full Year Results
During the fiscal year ended December 31,
2018, net revenues were RMB333.5
million (US$48.5 million),
compared to RMB290.7 million during
the same period in 2017, representing an increase of RMB42.8 million or 14.7%. The increase of average
sales price caused an increase of RMB53.9
million and the reduction of sales volume factor made a
decrease of RMB11.1 million.
In 2018, sales of specialty films were RMB148.8 million (US$21.6
million) or 44.6% of our total revenues as compared to
RMB108.1 million or 37.2% in 2017,
which was an increase of RMB40.7
million, or 37.7%, as compared to the same period in 2017.
The increase of average sales price caused an increase of
RMB7.1 million and the increase of
sales volume factor made an increase of RMB33.6 million.
Sales in China in 2018 were
RMB288.1 million, or US$41.9 million, or 86.4% of total revenues,
compared with RMB235.1 million or
80.9% of total revenues in 2017. Sales volume accounted for an
increase of RMB5.9 million while the
increase of average sales price caused an increase of RMB47.1 million.
Overseas sales were RMB45.4
million or US$6.6 million, or
13.6% of total revenues, compared with RMB55.6 million or 19.1% of total revenues in
2017. The increase of average sales price caused an increase of
RMB6.4 million and the reduction of
sales volume factor made a decrease of RMB16.6 million.
The following is a breakdown of domestic versus overseas sales
for the periods ended December 31,
2018 and 2017 (amounts in thousands):
|
For the year ended
December 31,
|
|
|
2018
|
% of Total
|
2017
|
% of Total
|
|
|
RMB
|
US$
|
RMB
|
Sales in
China
|
|
288,128
|
41,907
|
86.4%
|
235,143
|
80.9%
|
Sales in other
countries
|
|
45,394
|
6,602
|
13.6%
|
55,563
|
19.1%
|
|
|
333,522
|
48,509
|
100.0%
|
290,706
|
100.0%
|
Our gross margin was 16.4% for the year of 2018, as compared to
a gross margin of 9.3% in 2017.
Our average unit sales price increased by 19.3% compared to last
year. The unit sales cost increased by 10.0% 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
2018 compared with 2017, which contributed to the increase in our
gross profit.
Our operating expenses during the year ended December 31, 2018 were RMB66.0 million, an increase of RMB5.0 million, or 8.2%, as compared to 2017.
Net loss attributable to the Company for full year 2018 was
RMB22.2 million or US$3.2 million, compared with a net loss of
RMB46.0 million in 2017.
Basic and diluted loss per share for the year ended December 31, 2018 was RMB6.79 or US$0.99.
Net cash provided by operating activities was RMB25.4 million for the year ended December 31, 2018 as compared to net cash
provided by operating activities of RMB10.8
million for the year ended December
31, 2017.
Cash and cash equivalents on December 31,
2018 was RMB8.9 million or
US$1.3 million, compared with
RMB13.0 million as of December 31, 2017.
Conference Call Information
The Company will host a teleconference on Tuesday, April 30, 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 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: 45517. The replay will be available until May 30, 2019, at 09:00
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; 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.:
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,
2018 and 2017
|
(amounts in
thousands, except share and per share data)
|
|
|
|
December 31,
2018
|
|
December 31,
2017
|
|
RMB
|
US$
|
|
RMB
|
ASSETS
|
Current
assets
|
|
|
|
|
|
Cash and cash
equivalents
|
|
8,908
|
1,296
|
|
12,963
|
Restricted
cash
|
|
38,000
|
5,527
|
|
56,501
|
Accounts and bills
receivable, net
|
|
22,627
|
3,291
|
|
20,123
|
Inventories
|
|
24,675
|
3,589
|
|
24,578
|
Advance to
suppliers
|
|
5,694
|
828
|
|
3,898
|
Prepayments and other
receivables
|
|
1,068
|
155
|
|
1,404
|
Deferred tax assets –
current
|
|
1,195
|
174
|
|
1,288
|
Total current
assets
|
|
102,167
|
14,860
|
|
120,755
|
|
|
|
|
|
|
Property, plant and
equipment, net
|
|
331,168
|
48,166
|
|
371,058
|
Construction in
progress
|
|
366
|
53
|
|
366
|
Lease prepayments,
net
|
|
16,296
|
2,370
|
|
16,830
|
Advance to suppliers
- long term, net
|
|
1,542
|
224
|
|
1,570
|
Deferred tax assets -
non current
|
|
3,143
|
457
|
|
6,901
|
|
|
|
|
|
|
Total
assets
|
|
454,682
|
66,130
|
|
517,480
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
Current
liabilities
|
|
|
|
|
|
Short-term
borrowings
|
|
64,950
|
9,447
|
|
50,000
|
Due to related
parties
|
|
114,692
|
16,681
|
|
151,074
|
Accounts
payables
|
|
20,750
|
3,018
|
|
17,470
|
Notes
payable
|
|
48,000
|
6,981
|
|
67,900
|
Advance from
customers
|
|
1,859
|
270
|
|
1,976
|
Accrued expenses and
other payables
|
|
5,072
|
738
|
|
5,268
|
Total current
liabilities
|
|
255,323
|
37,135
|
|
293,688
|
Deferred tax
liabilities
|
|
2,528
|
368
|
|
2,763
|
|
|
|
|
|
|
Total
liabilities
|
|
257,851
|
37,503
|
|
296,451
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
Shareholders'
equity
|
|
|
|
|
|
Registered capital(of
US$0.519008 par value; 5,000,000
shares authorized; 3,265,837 issued and outstanding)
|
|
13,323
|
1,938
|
|
13,323
|
Additional paid-in
capital
|
|
311,907
|
45,365
|
|
311,907
|
Statutory
reserve
|
|
37,441
|
5,446
|
|
37,441
|
Retained
earnings
|
|
(166,680)
|
(24,243)
|
|
(144,508)
|
Cumulative
translation adjustment
|
|
840
|
121
|
|
2,866
|
Total
shareholders' equity
|
|
196,831
|
28,627
|
|
221,029
|
|
|
|
|
|
|
Total
equity
|
|
196,831
|
28,627
|
|
221,029
|
Total liabilities
and equity
|
|
454,682
|
66,130
|
|
517,480
|
|
|
|
|
|
|
|
FUWEI FILMS
(HOLDINGS) CO., LTD and SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(LOSS)
|
For the Years Ended
December 31, 2018, 2017 and 2016
|
(amounts in
thousands, except share and per share data)
|
|
|
|
The Year Ended
December 31,
|
|
|
2018
|
2017
|
2016
|
|
RMB
|
US$
|
RMB
|
RMB
|
Net sales
|
|
333,522
|
48,509
|
290,706
|
253,926
|
Cost of
sales
|
|
278,834
|
40,555
|
263,606
|
236,190
|
|
|
|
|
|
|
Gross
margin
|
|
54,688
|
7,954
|
27,100
|
17,736
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
Selling
expenses
|
|
13,363
|
1,944
|
14,520
|
13,764
|
Administrative
expenses
|
|
52,593
|
7,649
|
46,514
|
46,211
|
Loss on impairment of
assets
|
|
-
|
-
|
-
|
-
|
Total operating
expenses
|
|
65,956
|
9,593
|
61,034
|
59,975
|
|
|
|
|
|
|
Operating
loss
|
|
(11,268)
|
(1,639)
|
(33,934)
|
(42,239)
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
- Interest
income
|
|
1,225
|
178
|
725
|
735
|
- Interest
expense
|
|
(9,766)
|
(1,420)
|
(9,453)
|
(7,865)
|
- Others income
(expense), net
|
|
1,255
|
183
|
(2,533)
|
203
|
Total other income
(expense)
|
|
(7,286)
|
(1,059)
|
(11,261)
|
(6,927)
|
|
|
|
|
|
|
Loss before provision
for income taxes
|
|
(18,554)
|
(2,698)
|
(45,195)
|
(49,166)
|
|
|
|
|
|
|
Income tax (expense)
benefit
|
|
(3,618)
|
(526)
|
(808)
|
(5,317)
|
|
|
|
|
|
|
Net
loss
|
|
(22,172)
|
(3,224)
|
(46,003)
|
(54,483)
|
|
|
|
|
|
|
Net income (loss) attributable
to noncontrolling interests
|
|
-
|
-
|
-
|
-
|
Net loss attributable
to the Company
|
|
(22,172)
|
(3,224)
|
(46,003)
|
(54,483)
|
|
|
|
|
|
|
Other comprehensive
income (loss):
|
|
|
|
|
|
- Foreign currency
translation adjustments attributable to noncontrolling
interest
|
|
-
|
-
|
-
|
-
|
- Foreign currency
translation adjustments attributable to the Company
|
|
(2,026)
|
(295)
|
1,821
|
(4)
|
|
|
|
|
|
|
Comprehensive income
(loss) attributable to non-controlling interest
|
|
-
|
-
|
-
|
-
|
Comprehensive loss
attribute to the Company
|
|
(24,198)
|
(3,519)
|
(44,182)
|
(54,487)
|
|
|
|
|
|
|
Net loss per
share,
Basic and diluted
|
|
(6.79)
|
(0.99)
|
(14.09)
|
(16.68)
|
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, 2018, 2017 and 2016
|
(Amounts in
thousands)
|
|
|
|
The Years Ended
December 31,
|
|
|
2018
|
|
2017
|
2016
|
|
|
RMB
|
US$
|
|
RMB
|
RMB
|
Cash flow from
operating activities
|
|
|
|
|
|
|
Net loss
|
|
(22,172)
|
(3,224)
|
|
(46,003)
|
(54,483)
|
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
|
|
44,509
|
6,474
|
|
42,877
|
43,193
|
- Amortization of
intangible assets
|
|
534
|
78
|
|
528
|
524
|
- Deferred income
taxes (benefit)
|
|
3,617
|
526
|
|
808
|
5,317
|
- Bad debt (recovery)
expense
|
|
(620)
|
(90)
|
|
(746)
|
2,466
|
- Inventory
provision
|
|
-
|
-
|
|
1,340
|
(226)
|
Changes in operating
assets and liabilities
|
|
|
|
|
|
|
- Investment income
recorded on Fuwei Holdings' book
|
|
-
|
-
|
|
-
|
(1,722)
|
- Accounts and bills
receivable
|
|
(1,884)
|
(274)
|
|
10,075
|
(21,873)
|
-
Inventories
|
|
(96)
|
(14)
|
|
(766)
|
4,647
|
- Advance to
suppliers
|
|
(1,796)
|
(261)
|
|
2,145
|
(403)
|
- Prepaid expenses and
other current assets
|
|
161
|
23
|
|
75
|
18
|
- Accounts
payable
|
|
3,278
|
477
|
|
(3,110)
|
(12,179)
|
- Accrued expenses and
other payables
|
|
(850)
|
(124)
|
|
128
|
(3,597)
|
- Advance from
customers
|
|
(117)
|
(17)
|
|
(1,533)
|
1,263
|
- Tax
payable
|
|
817
|
119
|
|
5,009
|
13,827
|
|
|
|
|
|
|
|
Net cash provided by
(used in) operating activities
|
|
25,381
|
3,693
|
|
10,827
|
(23,228)
|
|
|
|
|
|
|
|
Cash flow from
investing activities
|
|
|
|
|
|
|
Purchases of
property, plant and equipment
|
|
(4,619)
|
(672)
|
|
(3,282)
|
(11,218)
|
Advanced to suppliers
- non current
|
|
28
|
4
|
|
291
|
(421)
|
Amount change in
construction in progress
|
|
-
|
-
|
|
65
|
1,269
|
|
|
|
|
|
|
|
Deposit for
purchase
|
|
-
|
-
|
|
-
|
-
|
|
|
|
|
|
|
|
Net cash used in
(provided by) investing activities
|
|
(4,591)
|
(668)
|
|
(2,926)
|
(10,370)
|
|
|
|
|
|
|
|
Cash flow from
financing activities
|
|
|
|
|
|
|
Principal payments of
bank loans
|
|
-
|
-
|
|
(3,300)
|
(3,350)
|
Proceeds from
short-term bank loans
|
|
14,950
|
2,174
|
|
(10,000)
|
60,000
|
Proceeds from related
party
|
|
(36,382)
|
(5,292)
|
|
19,327
|
(11,333)
|
Payment of capital
lease obligation
|
|
-
|
-
|
|
-
|
(302)
|
Change in notes
payable
|
|
(19,900)
|
(2,894)
|
|
(32,988)
|
15,108
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by
(used in) financing activities
|
|
(41,332)
|
(6,012)
|
|
(26,961)
|
60,123
|
|
|
|
|
|
|
|
Effect of foreign
exchange rate changes
|
|
(2,014)
|
(866)
|
|
1,760
|
2,669
|
|
|
|
|
|
|
|
Net decrease in cash
and cash equivalent, restricted cash
|
|
(22,556)
|
(3,853)
|
|
(17,300)
|
29,194
|
|
|
|
|
|
|
|
Cash and cash
equivalent,and restricted cash
|
|
|
|
|
|
|
At beginning of
period/year
|
|
69,464
|
10,676
|
|
86,764
|
57,570
|
At end of
period/year
|
|
46,908
|
6,823
|
|
69,464
|
86,764
|
|
|
|
|
|
|
|
SUPPLEMENTARY
DISCLOSURE:
|
|
|
|
|
|
|
Interest
paid
|
|
9,766
|
1,420
|
|
9,453
|
7,865
|
Income tax
paid
|
|
-
|
-
|
|
-
|
-
|
|
|
|
|
|
|
|
SUPPLEMENTARY
SCHEDULE OF NONCASH INVESTING AND
FINANCIAL ACTIVITIES:
|
|
|
|
|
|
|
Account payable for
plant and equipment:
|
|
1,010
|
147
|
|
1,374
|
1,597
|
Obligations for
acquired equipment under capital lease:
|
|
-
|
-
|
|
-
|
-
|
View original
content:http://www.prnewswire.com/news-releases/fuwei-films-announces-fourth-quarter-and-full-year-2018-financial-results-300839919.html
SOURCE Fuwei Films (Holdings) Co., Ltd.