Beijing Time
EST

News Center

Company News

Home>News Center>Company News

Fuwei Films Announces Its Unaudited Financial Results for the First Quarter of 2020
Time:2020/6/22 16:06:06  Source:

Fuwei Films Announces Its Unaudited Financial Results for the First Quarter of 2020

-Teleconference to be Held on Tuesday, June 23, 2020 at 9:00 am ET-

BEIJING, June 22, 2020 /-- 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 2020 ended March 31, 2020.

First quarter highlights

  • Net sales during the first quarter ended March 31, 2020 were RMB83.2 million (US$11.8 million), up from RMB81.1 million during the same period in 2019, representing an increase of RMB2.1 million or 2.6%.
  • Sales of specialty films were RMB39.9 million (US$5.6 million) or 47.9% of our total revenues, up from RMB32.2 million or 39.7% in the same period of 2019.
  • Our gross profit was RMB29.8 million (US$4.2 million) for the first quarter ended March 31, 2020, representing a gross margin of 35.8%, up from a gross profit of RMB12.4 million and gross margin of 15.3% for the same period in 2019.
  • Net profit attributable to the Company during the first quarter ended March 31, 2020 was RMB13.0 million (US$1.8 million) compared to net loss attributable to the Company of RMB3.4 million during the same period in 2019.

Mr. Zengyong Wang, Chairman and CEO of Fuwei Films, commented, "Despite the oversupply in the marketplace and the outbreak of COVID-19 pandemic which has caused significant adverse effects on the world economy, we achieved positive trends in overall sales, especially sales of specialty films which accounted for 47.9% of our total revenues. In addition, we achieved net profit for four consecutive quarters. We believe these results benefit from our commitment to innovation and differentiated marketing strategy which have expanded the end-user applications of our films products. We will continue with these efforts and expect that they will enable the Company to capitalize on new opportunities despite challenging industry and economic conditions."

First Quarter 2020 Results

Net sales during the first quarter ended March 31, 2020 were RMB83.2 million (US$11.8 million), compared to RMB81.1 million, during the same period in 2019, representing an increase of RMB2.1 million or 2.6%, mainly due to increased sales price.

In the first quarter of 2020, sales of specialty films were RMB39.9 million (US$5.6 million) or 47.9% of our total revenues as compared to RMB32.2 million or 39.7% in the same period of 2019. The increase was mainly due to increased sales volume.

The following is a breakdown of commodity and specialty film sales (amounts in thousands):

 

Three-Month Period
Ended
March 31, 2020

% of Total

Three-Month Period
Ended
March 31, 2019

% of Total

 

RMB

US$

 

RMB

 

Stamping and transfer film

34,522

4,876

41.5%

31,529

38.9%

Printing film

5,845

825

7.0%

12,219

15.1%

Metallization film

1,501

212

1.8%

676

0.8%

Specialty film

39,877

5,632

47.9%

32,196

39.7%

Base film for other application

1,488

210

1.8%

4,454

5.5%

           
 

83,233

11,755

100.0%

81,074

100.0%

Overseas sales were RMB5.8 million (US$0.8 million), or 6.9% of total revenues, compared with RMB16.2 million or 20.0% of total revenues in the first quarter of 2019, representing a decrease of RMB10.4 million or 64.2%. The decrease was mainly due to decreased sales volume. 

The following is a breakdown of PRC domestic and overseas sales (amounts in thousands except percentages):

   

Three-Month Period
Ended
March 31, 2020

% of Total

Three-Month Period
Ended
March 31, 2019

% of Total

   

RMB

US$

RMB

Sales in China

 

77,448

10,938

93.1%

64,854

80.0%

Sales in other countries

 

5,785

817

6.9%

16,220

20.0%

             
   

83,233

11,755

100.0%

81,074

100.0%

Our gross profit was RMB29.8 million (US$4.2 million) for the first quarter ended March 31, 2020, representing a gross margin of 35.8%, as compared to a gross profit of RMB12.4 million and gross margin of 15.3% for the same period in 2019. Our average product sales prices increased by 5.4% while our average cost of goods sold decreased by 20.0% compared to the same period in 2019. Consequently, our gross profit and gross margin was higher during the period.

Operating expenses for the first quarter ended March 31, 2020 were RMB15.0 million (US$2.1 million), which was RMB1.5 million, or 11.1% higher than the same period in 2019. This increase was mainly due to the increased accrued allowance for doubtful accounts receivable and increased transportation expenses.

Net profit attributable to the Company during the first quarter ended March 31, 2020 was RMB13.0 million (US$1.8 million) compared to net loss attributable to the Company of RMB3.4 million during the same period in 2019.

Basic and diluted net earnings per share was RMB3.97 (US$0.56) for the three-month period ended March 31, 2020 while basic and diluted net loss per share was RMB1.03 for the three-month period ended March 31, 2019.

Total shareholders' equity was RMB221.1 million or US$31.2 million as of March 31, 2020, compared with RMB208.2 million as of December 31, 2019.

As of March 31, 2020, the Company had 3,265,837 basic and diluted ordinary shares outstanding.

Conference Call Information

The Company will host a teleconference on Tuesday, June 23, 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: 35316. The replay will be available until July 7, 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 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 uncertainty 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 countries; uncertainty around coronavirus (COVID-19) outbreak and the effects of government and other measures seeking to contain its spread, uncertainty around U.S.-China trade war and its effect on the Company's operation, fluctuations of the RMB exchange rate, 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:

Ms. Xiaoli Yu
Investor Relations Officer
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 to Follow

FUWEI FILMS (HOLDINGS) CO., LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF MARCH 31, 2020 AND DECEMBER 31, 2019

(amounts in thousands except share and per share value)

(Unaudited)

 
   

March 31, 2020

 

December 31, 2019

 

RMB

US$

 

RMB

ASSETS

Current assets

         

Cash and cash equivalents

 

55,671

7,862

 

60,871

Restricted cash

 

15,000

2,118

 

25,500

Accounts and bills receivable, net

 

41,496

5,860

 

26,960

Inventories

 

24,265

3,427

 

23,584

Advance to suppliers

 

12,448

1,758

 

6,277

Prepayments and other receivables

 

1,131

160

 

1,058

Deferred tax assets - current

 

1,333

188

 

1,266

Total current assets

 

151,344

21,373

 

145,516

           

Plant, properties and equipment, net

 

296,159

41,826

 

302,642

Lease prepayments, net

 

15,628

2,207

 

15,762

Advance to suppliers - long term, net

 

1,542

218

 

1,542

Deferred tax assets - non current

 

474

67

 

509

           

Total assets

 

465,147

65,691

 

465,971

           

LIABILITIES AND EQUITY

Current liabilities

         

Short-term borrowings

 

65,000

9,180

 

65,000

Due to related parties

 

120,445

17,010

 

119,297

Accounts payables

 

20,818

2,940

 

19,532

Notes payable

 

26,800

3,785

 

41,000

Advance from customers

 

1,664

235

 

5,204

Accrued expenses and other payables

7,044

995

 

5,454

Total current liabilities

 

241,771

34,145

 

255,487

           

Deferred tax liabilities

 

2,228

315

 

2,290

           

Total liabilities

 

243,999

34,460

 

257,777

           

Equity

         

Shareholders' equity

         

Registered capital(of US$0.519008 par value;
    5,000,000 shares authorized; 3,265,837 issued
    and outstanding)

 

13,323

1,882

 

13,323

Additional paid-in capital

 

311,907

44,050

 

311,907

Statutory reserve

 

37,441

5,288

 

37,441

Accumulated deficit

 

(142,363)

(20,105)

 

(155,317)

Cumulative translation adjustment

 

840

116

 

840

Total shareholders' equity

 

221,148

31,231

 

208,194

Total equity

 

221,148

31,231

 

208,194

Total liabilities and equity

 

465,147

65,691

 

465,971

FUWEI FILMS (HOLDINGS) CO., LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2020 AND 2019

(amounts in thousands except share and per share value)

(Unaudited)

     
   

The Three-Month Period Ended March 31, 

   

2020

 

2019

 

RMB

US$

 

RMB

Net sales

 

83,233

11,755

 

81,074

Cost of sales

 

53,474

7,552

 

68,670

           

Gross Profit

 

29,759

4,203

 

12,404

           

Operating expenses

         

Selling expenses

 

4,086

577

 

2,964

Administrative expenses

 

10,955

1,547

 

10,577

Total operating expenses

 

15,041

2,124

 

13,541

           

Operating income (loss)

 

14,718

2,079

 

(1,137)

           

Other income (expense)

         

- Interest income

 

289

41

 

213

- Interest expense

 

(2,216)

(313)

 

(2,191)

- Others income (expense),net

 

69

10

 

(242)

           

Total other expense

 

(1,858)

(262)

 

(2,220)

           

Income (loss) before provision for income taxes

 

12,860

1,817

 

(3,357)

           

Income tax benefit (expense)

 

94

13

 

(17)

           

Net income (loss) 

 

12,954

1,830

 

(3,374)

           

Net loss attributable to non-controlling interests

 

-

-

 

-

Net income (loss) attributable to the Company

 

12,954

1,830

 

(3,374)

           

Other comprehensive income

         

- Foreign currency translation adjustments attributable to 
  non-controlling interest

 

-

-

 

-

- Foreign currency translation adjustments attributable to
  the Company

 

-

-

 

(1)

           

Comprehensive loss attributable to non-controlling interest

 

-

-

 

-

Comprehensive income (loss) attributable to the Company

 

12,954

1,830

 

(3,375)

           

Earnings (loss) per share,
Basic and diluted

 

3.97

0.56

 

(1.03)

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, 2020 AND 2019

(amounts in thousands except share and per share value)

(Unaudited)

     
   

The Three-Month Period Ended March 31, 

   

2020

 

2019

   

RMB

US$

 

RMB

Cash flow from operating activities

         

Net income (loss)

 

12,954

1,829

 

(3,374)

Adjustments to reconcile net loss to net cash

         

used in operating activities

         

- Depreciation of property, plant and equipment

 

6,847

967

 

12,044

- Amortization of intangible assets

 

134

19

 

133

- Deferred income taxes

 

(94)

(13)

 

18

- Bad debt expense

 

447

63

 

(286)

-Inventory provision

 

-

-

 

-

Changes in operating assets and liabilities 

         

- Accounts and bills receivable

 

(14,984)

(2,116)

 

(4,123)

- Inventories

 

(679)

(96)

 

(814)

- Advance to suppliers

 

(6,171)

(872)

 

2,935

- Prepaid expenses and other current assets

 

(73)

(10)

 

13

- Accounts payable

 

1,285

182

 

(589)

- Accrued expenses and other payables

 

-

-

 

(136)

- Advance from customers

 

(3,540)

(500)

 

(700)

- Tax payable

 

1,590

225

 

512

           

Net cash provided by operating activities

 

(2,284)

(322)

 

5,633

           

Cash flow from investing activities

         

Purchases of property, plant and equipment

 

(364)

(51)

 

(1,529)

Restricted cash related to trade finance

 

-

-

 

-

Advanced to suppliers - non current

 

-

-

 

-

Amount change in construction in progress

 

-

-

 

345

           

Net cash provided by investing activities

 

(364)

(51)

 

(1,184)

           

Cash flow from financing activities

         

Proceeds from related party

 

1,148

162

 

1,136

Payment of capital lease obligation

 

-

-

 

-

Change in notes payable

 

(14,200)

(2,005)

 

3,580

           

Net cash used in financing activities

 

(13,052)

(1,843)

 

4,716

           

Effect of foreign exchange rate changes

 

-

(211)

 

(1)

           

Net decrease in cash and cash equivalent

 

(15,700)

(2,427)

 

9,164

           

Cash and cash equivalent

         

At beginning of period/year

 

86,371

12,407

 

46,908

At end of period/year

 

70,671

9,980

 

56,072

           

SUPPLEMENTARY DISCLOSURE:

         

Interest paid

 

2,216

313

 

2,191

Income tax paid

 

-

-

 

-

           

SUPPLEMENTARY SCHEDULE OF NONCASH INVESTING AND FINANCIAL ACTIVITIES:

Account payable for plant and equipment:

 

1,010

143

 

1,010