BEIJING, April 12, 2012 /PRNewswire-Asia-FirstCall/ --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 financial results for the fourth quarter and full year ended December 31, 2011.
Financial Results 2011 Highlights
- Revenues for full year 2011 were RMB537.6 million (US$85.4 million), compared with RMB501.5 million in 2010.
- For the full year 2011, sales of specialty films were RMB140.5 million (US$22.3 million), or 26.1% of our total revenues, as compared to RMB88.0 million or 17.5% of our revenue in 2010.
- Overseas sales were RMB145.5 million (US$23.1 million) or 27.1% of total revenues for the full year 2011, compared with RMB103.7 million or 20.7% of total revenues in 2010.
"As we predicted, since the second half of 2011, the rapid capacity expansion of BOPET films around the world resulted in fiercer competition and reduced sales prices. High international crude oil prices also resulted in high prices of raw materials which reduced profit margins in 2011. We were, however, pleased that overseas sales and sales of specialty films designed for the electronics industry and environmentally friendly films increased as a percentage of total sales for the full year," said Mr. Xiaoan He, Chairman and CEO of Fuwei Films.
Fourth Quarter 2011 Results
Revenues for the fourth quarter of 2011 were RMB109.2 million (US$17.4 million), compared with RMB173.5 million in the fourth quarter of 2010, a decrease of RMB64.3 million, or 37.1%, mainly due to decreased sales price and volume.
Sales of specialty films for the fourth quarter of 2011 were RMB32.1 million (US$5.1 million), or 29.4% of total revenues, compared with RMB34.7 million or 20.0% of total revenue, in the fourth quarter of 2010. The decrease was mainly attributable to decreased sales prices compared to those in 2010. However, the sales of specialty films accounted for a higher percentage of total sales.
The following is a breakdown of commodity and specialty film sales for the three-month periods ended December 31, 2011 and 2010 (amounts in thousands):
Three months period ended | ||||||
December 31,2011 | %ofTotal | December 31,2010 | %ofTotal | |||
RMB | US$ | RMB | ||||
Stamping and transfer film | 59,819 | 9,504 | 54.8% | 91,816 | 52.9% | |
Printing film | 11,725 | 1,863 | 10.7% | 29,792 | 17.2% | |
Metallization film | 3,429 | 545 | 3.1% | 6,626 | 3.8% | |
Specialty film | 32,076 | 5,096 | 29.4% | 34,687 | 20.0% | |
Base film for other applications | 2,164 | 344 | 2.0% | 10,589 | 6.1% | |
Total | 109,213 | 17,352 | 100% | 173,511 | 100% |
Overseas sales for the fourth quarter of 2011 were RMB15.1 million (US$2.4 million), or 13.8% of total revenues, compared with RMB36.1 million or 20.8% of total revenues in the fourth quarter of 2010. The reduction in overseas sales was mainly due to stronger competition and reduced orders in the global market causing a significant drop of overseas sales volume and sales prices in the fourth quarter of 2011 compared with the same period last year.
The following is a breakdown of domestic versus overseas sales for the three-month periods ended December 31, 2011 and 2010 (amounts in thousands):
Three-month period ended | ||||||
December 31,2011 | %ofTotal | December 31,2010 | %ofTotal | |||
RMB | US$ | RMB | ||||
Sales in China | 94,106 | 14,952 | 86.2% | 137,433 | 79.2% | |
Sales in other countries | 15,107 | 2,400 | 13.8% | 36,078 | 20.8% | |
Total | 109,213 | 17,352 | 100% | 173,511 | 100.0% |
Gross profit for the fourth quarter of 2011 was RMB7.4 million (US$1.2 million), compared with RMB57.6 million in the fourth quarter of 2010. Gross margin was 6.8%, compared with 33.2% in the fourth quarter of 2010. The significant decrease in gross profit was primarily due to the significant decrease in sales prices and increases in raw material costs.
Operating expenses for the fourth quarter of 2011 was RMB12.8 million (US$2.0 million), compared with RMB20.6 million in the fourth quarter of 2010. This decrease was mainly due to the decrease of R&D expenses and antidumping duties.
Operating loss for the fourth quarter of 2011 was RMB5.3 million (US$0.8 million), compared with operating income RMB37.0 million in the fourth quarter of 2010.
Net loss attributable to the Company for the fourth quarter of 2011 was RMB3.8 million (US$0.6 million), compared with net income attributable to the Company RMB25.4 million in the fourth quarter of 2010. Basic and diluted loss per share was RMB0.29 (US$0.05), compared with earnings per share of RMB1.95 in the fourth quarter of 2010.
2011 Full Year Results
For the fiscal year ended December 31, 2011,our net revenues were RMB537.6 million (US$85.4 million), which was an increase of RMB36.2 million or 7.2%, as compared to 2010. The increase in revenue was mainly due to the increased average unit price and sales volume of high value-added products in the product portfolio.
In the full year 2011, sales of specialty films were RMB140.5 million (US$ 22.3 million), or 26.1% of our total revenues, as compared to RMB88.0 million or 17.5% of our revenue in 2010. This rise in sales was mainly attributable to the increased demand for films designed for the electronics industry and environmentally friendly films.
The Company's revenue by significant types of films for the periods ended December 31, 2011 and 2010 is as follows (amounts in thousands):
December 31, 2011 | December 31, 2010 | ||||
RMB | US$ | % of Total | RMB | % of Total | |
Stamping and transfer film | 293,768 | 46,675 | 54.6% | 282,033 | 56.2% |
Printing film | 55,218 | 8,773 | 10.3% | 76,720 | 15.3% |
Metallization film | 28,205 | 4,481 | 5.3% | 28,108 | 5.6% |
Specialty film | 140,491 | 22,322 | 26.1% | 87,956 | 17.5% |
Base film for other applications | 19,963 | 3,172 | 3.7% | 26,641 | 5.4% |
537,645 | 85,423 | 100% | 501,458 | 100% |
Overseas sales for full year 2011 were RMB145.5 million (US$23.1 million), or 27.1% of total revenues, compared with RMB103.7 million or 20.7% of total revenues in 2010. The increase of overseas sales mainly is attributed to the increase of the export volume and sales prices of BOPET products.
The following is a breakdown of domestic versus overseas sales for the periods ended December 31, 2011 and 2010 (amounts in thousands):
2011 | %ofTotal | 2010 | %ofTotal | |||
RMB | US$ | RMB | ||||
Sales in China | 392,195 | 62,313 | 72.9% | 397,781 | 79.3% | |
Sales in other countries | 145,450 | 23,110 | 27.1% | 103,677 | 20.7% | |
537,645 | 85,423 | 100.0% | 501,458 | 100.0% |
Our gross profit during the year ended December 31, 2011 was RMB85.5 million (US$13.6 million) representing a gross margin of 15.9%, reduced by RMB45.1 million or 10.1%, compared to RMB130.6 million or 26.0% for the year ended December 31, 2010. The decrease in gross margin was mainly due to the increase of raw material prices and the increase in cost of sales compared with the increase in sales price.
Operating expenses during the year ended December 31, 2011 were RMB54.7 million (US$8.7 million), which was a decrease of RMB16.2 million, or 22.8%, as compared to the same period for 2010. This change was mainly due to the decrease of accrued class action indemnity and related legal fees, and allowance for doubtful trade receivables as well as the anti-dumping duty.
Other expenses during the year ended December 31, 2011 was RMB5.7 million (US$0.9 million), which was a decrease of RMB3.2 million, or 35.3%, as compared to the same period for 2010. The decrease was mainly due to the short-term financial income being more than bank loan interest increase.
The effective tax rates in 2011 and 2010 are 15.8% and 21.8%, respectively. The lower effective tax rate in 2011 is primarily due to lower profit in 2011 and the carry forward net loss for the period ended 2010.
Net income attributable to the Company for full year 2011 was RMB21.1 million (US$3.3 million), compared with RMB40.8 million in 2010.
Net cash used in operating activities was RMB14.0 million (US$2.2 million) for the year ended December 31, 2011 as compared to net cash provided from operating activities of RMB98.6 million for the year ended December 31, 2010. This decrease was mainly due to the increase of receivables from clients and other receivables and reduced advances from our customers.
Cash and cash equivalents on December 31, 2011 was RMB44.2 million (US$7.0 million), compared with RMB171.2 million as of December 31, 2010. This decrease was mainly due to deposit for the Letter of Credit for Dornier equipment and advances paid regarding the equipment.
2011 Highlights
In January 2011, our subsidiary, Fuwei Films (Shandong) Co., Ltd. ("Shandong Fuwei") was granted the Award for Cooperative and Innovative Manufacturing, Study and Research of Small and Medium Enterprise ("SME")", and the First Award of Private SME Innovation of Shandong Province by SME Productivity Promotion Center of Shandong Province, and SME Innovative Committee of Technological Promotion of Shandong Province. Our brand "Fuwei Films" was selected as one of the "Famous Shandong Brand" by Shandong Provincial Quality Supervision Bureau; and the Scientific Innovative Enterprise of Shandong Province by the Department of Science & Technology of Shandong Province.
In May 2011, Shandong Fuwei was awarded a renewed National Industrial Product Manufacturing Permission, upon passing the review of the key projects on food plastic packaging materials and containers.
In June 2011, Shandong Fuwei signed a letter of intent on PETG heat shrinkable label film supply for the second half of 2011 with China Bottlers Procurement Consortium, the authorized procurement service provider for the Coca-Cola Bottling (COKE) system in China.
In August 2011, we received three utility patents from the Ministry of State Intellectual Property Office of the PRC. These utility patents relate to anti-condensation automotive window film, oligomer-proof automotive window PET base film and anti-flaming matte film for architectural heat insulation.
Mr. He concluded, "In 2012, we are confronted with more challenges. Therefore, we are focused on constructing our BOPET thick film production line, producing films mainly used in the electronics, electrical, solar energy and other industries, which we view as a key market segment for Fuwei Films' potential growth, and it is expected to be put into trial run by the end of 2012. In addition, we attach great importance to cost cutting this year so as to address the tough market with more supply than demand and significant decline in prices."
Conference Call Information
The Company will host a teleconference on Friday, April 13, 2012, 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, approximately 10 minutes prior to the scheduled start time.
A replay of the call can also be accessed via telephone by calling +1-877-660-6853 in North America, or +1-201-612-7415 internationally, and entering the following access codes: Account#: 286 and Conference ID: 391626. The replay will be available until May 13, 2012, at 11:59 p.m. ET.
About Fuwei Films
Fuwei Films conducts its business through its wholly owned subsidiary, Fuwei Films (Shandong) Co., Ltd. ("Shandong Fuwei"). Shandong Fuwei 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 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:
Miss Lysander Lee
Investor Relations Officer
Phone: +86 133 615 59266
In the U.S.:
Ms. Leslie Wolf-Creutzfeldt
Investor Relations
Grayling
Phone: +1-646-284-9472
Email: leslie.wolf-creutzfeldt@grayling.com
Financial Tables to Follow
FUWEI FILMS (HOLDINGS) CO., LTD and SUBSIDIARIES | ||||
CONSOLIDATED BALANCE SHEETS | ||||
As of December 31, 2011 and 2010 | ||||
(amounts in thousands, except share and per share data) | ||||
2011 | 2010 | |||
RMB | US$ | RMB | ||
ASSETS | ||||
Current assets | ||||
Cash and cash equivalents | 44,172 | 7,018 | 171,227 | |
Restricted cash | 102,212 | 16,240 | 1,314 | |
Accounts and bills receivable, net | 52,457 | 8,334 | 25,482 | |
Inventories | 41,774 | 6,637 | 52,577 | |
Advance to suppliers | 8,808 | 1,399 | 10,974 | |
Prepayments and other receivables | 31,172 | 4,953 | 540 | |
Deferred tax assets - current | 1,309 | 208 | 1,344 | |
Total current assets | 281,904 | 44,789 | 263,458 | |
Plant, properties and equipment, net | 277,119 | 44,030 | 284,891 | |
Construction in progress | 179,386 | 28,502 | 197,193 | |
Lease prepayments, net | 20,047 | 3,185 | 21,024 | |
Advance to suppliers - long term | 3,060 | 486 | 2,787 | |
Goodwill | 10,276 | 1,633 | 10,276 | |
Long-term deposit | 16,760 | 2,663 | 16,760 | |
Deferred tax assets - non current | 1,622 | 258 | 1,763 | |
Total assets | 790,174 | 125,546 | 798,152 | |
LIABILITIES AND EQUITY | ||||
Current liabilities | ||||
Short-term borrowings | 168,501 | 26,772 | 142,000 | |
Accounts payables | 19,317 | 3,069 | 14,296 | |
Advance from customers | 11,876 | 1,887 | 37,291 | |
Accrued expenses and other payables | 5,798 | 921 | 20,993 | |
Total current liabilities | 205,492 | 32,649 | 214,580 | |
Long-term loans | 10,000 | 1,589 | 30,000 | |
Deferred tax liabilities | 1,811 | 288 | 1,822 | |
Total liabilities | 217,303 | 34,526 | 246,402 | |
Equity | ||||
Shareholders' equity | ||||
Common Stock (of US$0.129752 par value; 20,000,000 shares authorized; 13,062,500 issued and outstanding) | 13,323 | 2,117 | 13,323 | |
Additional paid-in capital | 311,907 | 49,557 | 311,907 | |
Statutory reserve | 37,441 | 5,949 | 35,195 | |
Retained earnings | 209,768 | 33,329 | 190,933 | |
Cumulative translation adjustment | 1,230 | 195 | 1,186 | |
Total shareholders' equity | 573,669 | 91,147 | 552,544 | |
Non-controlling interest | (798) | (127) | (794) | |
Total equity | 572,871 | 91,020 | 551,750 | |
Total liabilities and equity | 790,174 | 125,546 | 798,152 |
FUWEI FILMS (HOLDINGS) CO., LTD and SUBSIDIARIES | |||||
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) | |||||
For the Years Ended December 31, 2011, 2010 and 2009 | |||||
(amounts in thousands, except share and per share data) | |||||
2011 | 2010 | 2009 | |||
RMB | US$ | RMB | RMB | ||
Revenues, net | 537,645 | 85,423 | 501,458 | 320,731 | |
Cost of goods sold | 452,173 | 71,843 | 370,905 | 296,118 | |
Gross profit | 85,472 | 13,580 | 130,553 | 24,612 | |
Operating expenses | |||||
- Distribution expenses | 19,930 | 3,167 | 21,642 | 15,227 | |
- Administrative expenses | 34,806 | 5,530 | 49,281 | 25,932 | |
Total operating expenses | 54,736 | 8,697 | 70,922 | 41,159 | |
Operating income (loss) | 30,736 | 4,883 | 59,630 | (16,547) | |
Other income (expense) | |||||
- Interest income | 2,612 | 415 | 544 | 154 | |
- Interest expense | (10,227) | (1,625) | (8,846) | (6,540) | |
- Others income (expense), net | 1,872 | 297 | (575) | (92) | |
Total other income (expense) | (5,743) | (913) | (8,877) | (6,478) | |
Income (loss) before income tax (expense) benefit | 24,993 | 3,970 | 50,754 | (23,024) | |
Income tax (expense) benefit | (3,955) | (628) | (11,059) | 4,064 | |
Net Income (loss) | 21,038 | 3,342 | 39,695 | (18,960) | |
Net (loss) income attributable non-controlling interest | (43) | (7) | (1,088) | 3 | |
Net income (loss) attributable to the Company | 21,081 | 3,349 | 40,783 | (18,963) | |
Other comprehensive income (loss) | |||||
-Foreign currency translation adjustments attributable to non-controlling interest | 39 | 6 | 18 | - | |
-Foreign currency translation adjustments attributable to the Company | 44 | 7 | 193 | (68) | |
Comprehensive income (loss) attributable to non-controlling interest | (4) | (1) | (1,070) | 3 | |
Comprehensive income (loss) attributable to the Company | 21,125 | 3,356 | 40,976 | (19,032) | |
Earnings (loss) per share, | 1.61 | 0.26 | 3.12 | (1.45) | |
Weighted average number ordinary shares, | |||||
Basic and diluted | 13,062,500 | 13,062,500 | 13,062,500 | 13,062,500 | |
FUWEI FILMS (HOLDINGS) CO., LTD and SUBSIDIARIES | |||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||
For the Years Ended December 31, 2011, 2010 and 2009 | |||||
(amounts in thousands) | |||||
2011 | 2010 | 2009 | |||
RMB | US$ | RMB | RMB | ||
Cash flow from operating activities | |||||
Net income (loss) | 21,038 | 3,342 | 39,695 | (18,960) | |
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities | |||||
- Depreciation of property, plant and equipment | 43,783 | 6,956 | 36,731 | 35,464 | |
- Amortization of intangible assets | 454 | 72 | 454 | 889 | |
- Deferred income taxes | 165 | 26 | 5,231 | (4,064) | |
- Bad debt (recovery) expense | (354) | (56) | (266) | 697 | |
- Inventory provision | 3,533 | 561 | - | 4,242 | |
Changes in operating assets and liabilities | |||||
- Accounts receivable | (26,620) | (4,229) | 3,404 | 11,609 | |
- Inventories | 7,270 | 1,155 | (7,538) | (18,693) | |
- Advance to suppliers | 2,167 | 344 | (7,018) | 2,890 | |
- Prepaid expenses and other current assets | (30,180) | (4,795) | 523 | (4,929) | |
- Accounts payable | 5,021 | 798 | (11,581) | (4,475) | |
- Accrued expenses and other payables | (7,185) | (1,142) | 8,341 | 1,902 | |
- Advance from customers | (25,415) | (4,038) | 24,683 | 3,827 | |
- Tax payable | (7,695) | (1,223) | 5,917 | (2,411) | |
Net cash (used in) provided by operating activities | (14,018) | (2,228) | 98,575 | 7,988 | |
Cash flow from investing activities | |||||
Purchases of property, plant and equipment | (35,943) | (5,711) | (2,951) | (87,758) | |
Restricted cash related to trade finance | (100,915) | (16,034) | 11,217 | (2,130) | |
Advanced to suppliers - non current | (273) | (43) | (420) | 1,941 | |
Amount decrease in construction in progress | 17,806 | 2,829 | 39,926 | 82,290 | |
Amount decrease in deposit | - | - | 4,240 | - | |
Net cash (used in) provided by investing activities | (119,325) | (18,959) | 52,012 | (5,657) | |
Cash flow from financing activities | |||||
Principal payments of short-term bank loans | (142,000) | (22,562) | (11,179) | (11,585) | |
Proceeds from short-term bank loans | 148,501 | 23,594 | 5,000 | 20,000 | |
Net cash provided by (used in) financing activities | 6,501 | 1,032 | (6,179) | 8,415 | |
Effect of foreign exchange rate changes | (213) | 1,276 | 16 | 236 | |
Net (decrease) increase in cash and cash equivalent | (127,055) | (18,879) | 144,424 | 10,982 | |
Cash and cash equivalent | |||||
At beginning of the year | 171,227 | 25,897 | 26,804 | 15,823 | |
At end of the year | 44,172 | 7,018 | 171,227 | 26,804 | |
SUPPLEMENTARY DISCLOSURE: | |||||
Interest paid | 10,227 | 1,625 | 8,846 | 8,399 | |
Income tax paid | 9,654 | 1,534 | 3,658 | - | |
SUPPLEMENTARY SCHEDULE OF NONCASH INVESTING AND FINANCIAL ACTIVITIES: | |||||
During the year ended December 31, 2011, the Company acquired equipment by incurring accounts payable in the amount of: | 1,730 | 275 | 7,071 |
SOURCE Fuwei Films (Holdings) Co., Ltd.