- Teleconference to be Held Friday, August 15, 2008, at 8:30 a.m. EDT
BEIJING, Aug. 14 /Xinhua-PRNewswire-FirstCall/ -- Fuwei Films (Holdings)
Co. Limited (Nasdaq: FFHL) ('Fuwei' or 'the Company'), a manufacturer and
distributor of high-quality BOPET plastic films in China, today released the
financial results for the second quarter and first six months of 2008.
Financial Highlights
-- In the second quarter of 2008, revenues rose 3.1% to RMB 124.7 million
(US$17.9 million) from the same period of 2007.
-- In the first six months of 2008, revenues rose 3.9% to RMB 228.8
million (US$32.4 million) from the same period of 2007.
'We hereby release our second quarter of 2008 financial results,' said
Xiaoan He, Chairman and CEO of Fuwei Films. 'We entered the first half of 2008
with a number of challenges including strong competition in the marketplace,
an increase in cost, a decrease in export orders resulting from the anti-
dumping cases in Korea and the US, and a decreased average sales price.'
Mr. He continued, 'However, we believe that Fuwei Films will be able to
continuously utilize the current advantages and the strengthened R&D platform
to ensure our leading position in the marketplace.'
Second Quarter 2008 Financial Results
Revenues for the second quarter of 2008 rose 3.1% to RMB 124.7 million
(US$17.9 million), from RMB 120.9 million (US$ 15.8 million) in the second
quarter of 2007.
Revenues of specialty films in second quarter 2008 were RMB 41.1 million
(US$5.9 million), or 33.0% of total revenues.
The following is a breakdown of commodity and specialty film sales for the
three-month periods ended June 30, 2008 and June 30, 2007 (amounts in
thousands):
Three-month period ended
June 30,2008 June 30,2007
RMB US$ % of Total RMB % of Total
Printing film 12,157 1,747 9.70% 7,552 6.20%
Stamping film 24,759 3,559 19.80% 15,039 12.40%
Metallization film 12,844 1,846 10.30% 27,486 22.70%
Base film for other
applications 33,850 4,866 27.10% 21,681 18.00%
Specialty film 41,136 5,913 33.00% 49,171 40.70%
Total 124,747 17,932 100.00% 120,929 100.00%
Revenues from overseas in the second quarter of 2008 were RMB 8.0 million
(US$1.1 million), or 6.4% of total revenues.
The following is a breakdown of domestic versus overseas sales for the
three-month periods ended June 30, 2008 and June 30, 2007 (amounts in
thousands):
Three-month period ended
June 30,2008 June 30,2007
RMB US$ % of Total RMB % of Total
Sales in China 116,725 16,779 93.60% 82,220 68.00%
Sales in other countries 8,022 1,153 6.40% 38,709 32.00%
Total 124,747 17,932 100.00% 120,929 100.00%
Gross profit for the second quarter of 2008 was RMB 21.9 million (US$3.2
million), compared with RMB 32.7 million (US$4.3 million) in same period 2007.
The Company generated a gross margin of 17.6% in the second quarter of 2008,
versus 27.0% in the same period of 2007. The decrease in gross margin was due
to the decreased average sales price and the increased consumption of raw
materials, power and labor.
Operating expenses in the second quarter of 2008 were RMB 9.0 million
(US$1.3 million). Selling expenses in the second quarter 2008 decreased to RMB
4.3 million (US$0.6 million) from RMB 5.1 million (US$0.7 million) in the same
period 2007. Administrative expenses increased to RMB 4.7 million (US$0.7
million) from RMB 3.9 million (US$0.5 million) in the second quarter of 2007.
Net income for the second quarter of 2008 decreased to RMB 9.7 million
(US$1.4million), or diluted EPS of RMB 0.74 (US$0.11), from RMB 20.1 million
(US$2.6 million), or diluted EPS of RMB 1.54 (US$0.20) in the same period of
2007.
Six-month 2008 Financial Results
Revenues for the first six months of 2008 rose 3.9% to RMB 228.8 million
(US$32.4 million), from RMB 220.2 million (US$28.5 million) in the same period
of 2007. Revenues of specialty films in the first six months of 2008 were RMB
74.9 million (US$10.6 million), or 32.7% of total revenues.
The following is a breakdown of commodity and specialty film sales for the
six-month periods ended June 30, 2008 and June 30, 2007 (amounts in thousands):
Six-month period ended
June 30,2008 June 30,2007
RMB US$ % of Total RMB % of Total
Printing film 31,370 4,444 13.70% 13,605 6.20%
Stamping film 45,969 6,513 20.10% 27,407 12.50%
Metallization film 15,759 2,233 6.90% 51,072 23.20%
Base film for other
applications 60,780 8,611 26.60% 41,654 18.90%
Specialty film 74,902 10,612 32.70% 86,456 39.30%
Total 228,781 32,413 100.00% 220,194 100.00%
Revenues from overseas in the first six months of 2008 were RMB 31.6
million (US$4.5 million), or 13.8% of total revenues.
The following is a breakdown of domestic versus overseas sales for the
six-month periods ended June 30, 2008 and June 30, 2007 (amounts in thousands):
Six-month period ended
June 30,2008 June 30,2007
RMB US$ % of Total RMB % of Total
Sales in China 197,148 27,932 86.20% 148,467 67.40%
Sales in other countries 31,633 4,482 13.80% 71,727 32.60%
Total 228,781 32,413 100.00% 220,194 100.00%
Gross profit for the first six months of 2008 was RMB 43.6 million (US$6.2
million), compared with RMB 56.9 million (US$7.4 million) in same period 2007.
The Company generated a gross margin of 19.0% in the first six months of 2008,
versus 25.9% in the same period of 2007. The decrease in gross margin was due
to the decreased average sales price and the increased consumption of raw
materials, power, and labor.
Operating expenses in the first six months of 2008 were RMB 20.2 million
(US$2.9 million), compared with RMB 15.2 million (US$2.0 million) in the same
period of 2007. The increase was mainly due to increases in allowances for
doubtful accounts, domestic transportation expenses, labor costs and expenses
related to ongoing litigation etc. Selling expenses in the first six months of
2008 decreased to RMB 7.7 million (US$1.1 million) from RMB 8.8 million
(US$1.1 million) in the same period of 2007. Administrative expenses increased
to RMB12.4 million (US$1.8 million) from RMB 6.5 million (US$ 0.8 million) in
the first half of 2007.
Net income for the first six months of 2008 decreased to RMB 17.6 million
(US$2.5 million), or diluted EPS of RMB 1.35 (US$0.19), from RMB 33.4 million
(US$4.3 million), or diluted EPS of RMB 2.55 (US$0.33) in the same period of
2007.
Total shareholders' equity increased to RMB 530.3 million (US$77.3 million)
as of June 30, 2008 from RMB 521.1 million (US$74.3 million) as of March 31,
2008.
Conference Call Information
The Company will host a teleconference on Friday, August 15, 2008, at 8:30
a.m. EDT / 8:30 p.m. Beijing time to discuss the quarterly 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
call start time. The call is being simultaneously Webcast and can be accessed
on the Fuwei Films Website at http://www.fuweiholdings.com . Please visit the
Web site at least 15 minutes prior to the scheduled call time to register for
the Web cast and download any necessary audio software.
A replay of the call can also be accessed via telephone from 12:00 p.m.
EDT on Friday, August 15, 2008, through 11:59 p.m. EDT on Sunday, August 23,
2008, 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: 293428. A Web cast replay of the call will also be made and can
be accessed on the Fuwei Films site at http://www.fuweiholdings.com .
About Fuwei Films
Fuwei Films conducts its business through its wholly owned subsidiary
Shandong Fuwei Films Co., Ltd. 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.
For more information about the Company, please visit the Company's website
at http://www.fuweiholdings.com .
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. Any such forward-looking statements
involve risk and uncertainties that could cause actual results to differ
materially from any future results described by the forward-looking statements.
Risk factors that could contribute to such differences include those matters
disclosed in the Company's reports filed with the United States Securities and
Exchange Commission. 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.
The forward-looking statements included in this press release are subject
to risks, uncertainties and assumptions about our businesses and business
environments. These statements reflect our current views with respect to
future events and are not a guarantee of future performance. Actual results of
our operations may differ materially from information contained in the
forward-looking statements as a result of risk factors some of which are
include, among other things, 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.
For more information, please contact:
In China:
Christina He
Investor Relations Manager
Tel: +86-10-8518-5620
Email: fuweiIR@fuweifilms.com
In the U.S.:
Leslie Wolf-Creutzfeldt
Investor Relations
Grayling Global
Tel: +1-646-284-9472
Email: lwolf-creutzfeldt@hfgcg.com
FUWEI FILMS (HOLDINGS) CO., LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 2008 AND DECEMBER 31, 2007
(amounts in thousands except share and per share value)
As of As of
Jun. 30,2008 Dec. 31,2007
(Unaudited)
RMB US$ RMB
ASSETS
Current assets
Cash and cash equivalents 7,087 1,033 30,909
Restricted cash 30,147 4,395 64,909
Accounts receivable, net 63,153 9,207 58,195
Inventory 48,927 7,133 41,670
Advance to suppliers 26,842 3,913 13,538
Prepayments and other receivables 6,070 885 2,622
Total current assets 182,226 26,567 211,842
Plant and equipment, net 217,991 31,781 228,309
Construction in progress 297,673 43,398 265,253
Lease prepayments, net 22,769 3,320 22,290
Intangible assets -- -- 36
Goodwill 10,276 1,498 10,276
Deposit 21,000 3,062 --
Deferred tax assets 969 141 969
Total assets 752,904 109,767 738,975
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Short-term borrowings 179,280 26,138 188,027
Accounts payables 19,828 2,891 19,609
Accrued expenses and other payables 23,238 3,388 18,544
Deferred tax liabilities 265 39 265
Total liability 222,611 32,455 226,445
Shareholders' equity
Registered capital (of US$0.129752
par value; 20,000,000 shares
authorized; 13,062,500 issued and
outstanding) 13,323 1,942 13,323
Additional paid-in capital 311,907 45,473 311,907
Statutory reserve 29,254 4,265 26,924
Retained earnings 174,494 25,440 159,229
Cumulative translation adjustment 1,316 192 1,148
Total shareholders' equity 530,293 77,312 512,531
Total liabilities and shareholders'
equity 752,904 109,767 738,975
FUWEI FILMS (HOLDINGS) CO., LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND OTHER
COMPREHENSIVE INCOME
FOR THE THREE AND SIX MONTHS PERIODS ENDED JUNE 30, 2008 AND 2007
(amounts in thousands except share and per share value)
(UNAUDITED)
The Three Months Periods ended June 30
2008 2007
RMB US$ RMB
Net sales 124,747 17,932 120,929
Cost of sales (102,799) (14,777) (88,264)
Gross profit 21,948 3,155 32,665
Operating expenses
Selling expenses (4,300) (618) (5,088)
Administrative expenses (4,705) (676) (3,946)
Total operating expenses (9,005) (1,294) (9,034)
Operating income 12,943 1,861 23,631
Other income/(expense)
- Interest income 52 8 87
- Interest expense (4,855) (698) (1,684)
- Other, net 2,410 346 (178)
Total other income/(expense) (2,393) (344) (1,775)
Income before income tax
benefit/(expense) 10, 550 1,517 21,856
Income tax expense (896) (129) (1,770)
Net income 9,655 1,388 20,086
Other comprehensive income
-Foreign currency translation
adjustments (453) (65) (4,547)
Comprehensive income 9,202 1,323 15,539
Earnings per share, basic and diluted 0.74 0.11 1.54
Weighted average number ordinary
shares, basic and diluted 13,062,500 13,062,500 13,062,500
FUWEI FILMS (HOLDINGS) CO., LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND OTHER
COMPREHENSIVE INCOME
FOR THE THREE AND SIX MONTHS PERIODS ENDED JUNE 30, 2008 AND 2007
(amounts in thousands except share and per share value)
(UNAUDITED)
The Six Months Periods ended June 30
2008 2007
RMB US$ RMB
Net sales 228,781 32,413 220,194
Cost of sales (185,207) (26,240) (163,257)
Gross profit 43,573 6,173 56,937
Operating expenses
Selling expenses (7,738) (1,096) (8,754)
Administrative expenses (12,429) (1,761) (6,455)
Total operating expenses (20,167) (2,857) (15,209)
Operating income 23,406 3,316 41,728
Other income/(expense)
- Interest income 68 10 277
- Interest expense (8,645) (1,225) (4,835)
- Other, net 4,651 659 (562)
Total other income/(expense) (3,926) (556) (5,120)
Income before income tax
benefit/(expense) 19,480 2,760 36,608
Income tax expense (1,889) (268) (3,258)
Net income 17,591 2,492 33,350
Other comprehensive income
-Foreign currency translation
adjustments 168 24 (571)
Comprehensive income 17,759 2,516 32,779
Earnings per share, basic and diluted 1.35 0.19 2.55
Weighted average number ordinary
shares, basic and diluted 13,062,500 13,062,500 13,062,500
FUWEI FILMS (HOLDINGS) CO., LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS PERIODS ENDED JUNE 30, 2008 AND 2007
(amounts in thousands except share and per share value)
(UNAUDITED)
Periods Ended Periods Ended
June 30, 2008 June 30, 2007
RMB US$ RMB
CASH FLOWS FROM OPERATING ACTIVITIES
Net income 17,591 2,492 33,350
Adjustments to reconcile net income
to net
cash provided by operating activities
- Depreciation of property, plant and
equipment 12,308 1,744 11,742
- Amortization of intangible assets 263 37 429
- Deferred income taxes -- -- 664
- Bad debt expense 55 8 --
Changes in operating assets and
liabilities, net of
- Accounts receivable (4,624) (655) 17,334
- Inventories (7,258) (1,028) (13,140)
- Advance to suppliers (13,304) (1,885) --
- Prepaid expenses and other current
assets (4,379) (620) (28,360)
- Accounts payable 223 32 4,257
- Accrued expenses and other payables 1,341 190 3,357
- Advance from customers 5,932 840 --
- Tax payable (2,575) (365) --
Net cash provided by operating
activities 5,572 790 29,633
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property, plant and
equipment (1,989) (282) (83,365)
Restricted cash related to trade
finance 34,761 4,925 --
Addition to construction in progress (32,420) (4,593) (24)
Deposit for purchase (21,000) (2,975) --
Net cash provided by (used in)
investing activities 20,648 (2,925) (83,380)
CASH FLOW FROM FINANCING ACTIVITIES
Principal payments of short-term bank
loans (119,590) (16,943) (239,678)
Proceeds from short-term bank loans 110,844 15,704 169,090
Net cash used in financing activities (8,746) (1,239) (70,588)
Effect of foreign exchange rate
changes -- 171 (571)
Net decrease in cash and cash
equivalent (23,821) (3,204) (124,906)
- Cash and cash equivalent at
beginning of period 30,908 4,237 253,250
- Cash and cash equivalent at end
of period 7,087 1,033 128,344
Supplemental disclosure of cash flow
information
Cash paid during the period for
-Interest paid 4,838 686 7,413
-Income taxes paid 2,561 363 981
SOURCE Fuwei Films (Holdings) Co. Limited
