Ossen Innovation Announces First Quarter 2012 Financial Results
"We are seeing encouraging signs regarding demand for our products," stated Dr.
Financial Summary
(in millions ex- EPS) |
Q1 2012 |
Q1 2011 |
Chg. |
Revenue |
$22.3 |
$31.7 |
-30% |
Gross Profit |
$2.6 |
$9.1 |
-72% |
Net Income* |
$0.3 |
$5.9 |
-95% |
EPS |
$0.01 |
$0.29 |
-95% |
Shares Outstanding |
20.0 |
20.0 |
- |
*Net income attributable to controlling interest |
First Quarter 2012 Financial Results
Revenue was
Gross profit decreased by $6.5 million to $2.6 million, a 71.9% year-over-year decline. Consolidated gross margin fell from 28.7% to 11.5%. The lower margin and lower profit of coated products during the first quarter of 2012 was a result of the difficulties faced by the infrastructure sector in
Gross margin for the first quarter of 2012 were 14.0% and 8.2% for coated pre-stressed steel products and for plain surface pre-stressed steel products, respectively.
Selling and distribution expenses decreased 61.7% to
Net income attributable to controlling interest fell 95.4% to
Balance Sheet and Cash Flows
Ossen had approximately
For the first quarter of 2012, the Company used approximately
In
Business Updates
- As of the end of April, Ossen has collected
$24.1million , or approximately 50%, of the$48 million accounts receivable balance atDecember 31, 2011 . Management is confident about the collection of the remaining balance. - According to government announcements and news release from major media channels, several positive developments have occurred recently about the
Ministry of Railways ("MOR") and its related projects. Total credit lines from Chinese local banks available to MOR has reached$317 billion (orRMB2 trillion ) to support funding of MOR's suspended and new projects. With more funding becoming available to MOR related projects, more construction will resume. The PRC government aims to invest more than$63 billion (RMB400 billion ) in MOR related infrastructure projects in 2012 in order to boost economic growth.
Conference Call
To attend the call, please use the information below for either dial-in access or webcast access. When prompted on dial-in, ask for "Ossen Innovation First quarter 2012 Conference Call" or be prepared to utilize the conference ID.
Conference Call |
|
Date: |
Thursday, May 31, 2012 |
Time: |
9:00 am Eastern Time, US |
Conference Line Dial-In (U.S.): |
+1-718-354-1231 |
International Toll Free: |
United States: +1-866-519-4004 |
Conference ID: |
84905084 |
Please dial in at least 10 minutes before the call to ensure timely participation. A playback will be available through
This call is being webcast and can be accessed by clicking on this link: http://www.media-server.com/m/p/4kf4gj3m
About
Safe Harbor Statements
This press release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements involve inherent risks and uncertainties that could cause actual results to differ materially from those projected or anticipated, including risks outlined in the Company's public filings with the
For more information, please contact: |
Ossen Innovation Co., Ltd. |
Alan Jin, Chief Financial Officer |
Email: alanjin@osseninnovation.com |
Phone: +86 (21) 5888-3163 |
Web: www.osseninnovation.com |
Investor Relations |
MZ North America |
Ted Haberfield, President |
Phone: +1-760-755-2716 |
Email: thaberfield@mzgroup.us |
Web: www.mz-ir.com |
AND SUBSIDIARIES
UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED
OSSEN INNOVATION CO., LTD AND SUBSIDIARIES |
||||||||
CONSOLIDATED BALANCE SHEETS |
||||||||
March 31, |
December 31, |
|||||||
2012 |
2011 |
|||||||
(Unaudited) |
||||||||
ASSETS |
||||||||
Current Assets |
||||||||
Cash and cash equivalents |
$ |
2,383,087 |
$ |
1,568,261 |
||||
Restricted cash |
19,415,474 |
19,764,900 |
||||||
Notes receivable - bank acceptance notes |
- |
10,851,616 |
||||||
Accounts receivable, net of allowance for doubtful accounts |
50,162,989 |
48,049,722 |
||||||
Inventories |
15,117,401 |
17,222,664 |
||||||
Advance to suppliers |
53,807,795 |
41,391,174 |
||||||
Other current assets |
6,493,010 |
6,495,241 |
||||||
Account receivable from related party |
20,930 |
20,799 |
||||||
Total Current Assets |
147,400,686 |
145,364,377 |
||||||
Property, plant and equipment, net |
10,735,699 |
11,022,916 |
||||||
Land use rights, net |
4,384,056 |
4,380,708 |
||||||
Prepayment for plant and equipment |
7,919,348 |
7,869,529 |
||||||
TOTAL ASSETS |
$ |
170,439,789 |
$ |
168,637,530 |
||||
LIABILITIES AND SHAREHOLDERS' EQUITY |
||||||||
Current Liabilities |
||||||||
Notes payable ¨C bank acceptance notes |
$ |
30,228,694 |
$ |
24,848,628 |
||||
Short-term bank loans |
43,127,097 |
47,966,209 |
||||||
Accounts payable |
1,184,505 |
948,475 |
||||||
Customer deposits |
401,071 |
459,915 |
||||||
Income tax payable |
5,985 |
4,792 |
||||||
Other payables and accrued expenses |
141,304 |
324,423 |
||||||
Due to related party |
498,007 |
- |
||||||
Total Current Liabilities |
75,586,663 |
74,552,442 |
||||||
Long-term bank loans |
4,589,697 |
4,718,094 |
||||||
TOTAL LIABILITIES |
80,176,360 |
79,270,536 |
||||||
EQUITY |
||||||||
Shareholders' Equity |
||||||||
Ordinary shares, $0.01 par value: 100,000,000 shares |
200,000 |
200,000 |
||||||
Additional paid-in capital |
33,910,985 |
33,884,656 |
||||||
Statutory reserve |
3,941,265 |
3,884,808 |
||||||
Retained earnings |
36,440,790 |
36,224,467 |
||||||
Treasury stock, at cost: 14,016 and 0 shares as of as of |
(13,715) |
- |
||||||
Accumulated other comprehensive income |
5,856,541 |
5,295,641 |
||||||
TOTAL SHAREHOLDERS' EQUITY |
80,335,866 |
79,489,572 |
||||||
Non-controlling interest |
9,927,563 |
9,877,422 |
||||||
TOTAL EQUITY |
90,263,429 |
89,366,994 |
||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |
$ |
170,439,789 |
$ |
168,637,530 |
OSSEN INNOVATION CO., LTD AND SUBSIDIARIES |
|||||
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME |
|||||
(Unaudited) |
|||||
Three Months Ended March 31, |
|||||
2012 |
2011 |
||||
REVEUNUES |
$ |
22,287,288 |
$ |
31,745,263 |
|
COST OF GOODS SOLD |
19,725,350 |
22,643,557 |
|||
GROSS PROFIT |
2,561,938 |
9,101,706 |
|||
Selling expenses |
92,361 |
241,441 |
|||
General and administrative expenses |
1,125,491 |
321,496 |
|||
Total Operating Expenses |
1,217,852 |
562,937 |
|||
INCOME FROM OPERATIONS |
1,344,086 |
8,538,769 |
|||
Financial expenses, net |
(933,230) |
(808,664) |
|||
Other income, net |
20,543 |
44,032 |
|||
INCOME BEFORE INCOME TAX |
431,399 |
7,774,137 |
|||
INCOME TAX |
(108,478) |
(1,082,413) |
|||
NET INCOME |
322,921 |
6,691,724 |
|||
LESS: NET INCOME ATTRIBUTABLE TO NON-CONTROLLING INTEREST |
50,141 |
818,173 |
|||
NET INCOME ATTRIBUTABLE TO CONTROLLING INTEREST |
272,780 |
5,873,551 |
|||
OTHER COMPREHENSIVE INCOME |
|||||
Foreign currency translation gain |
560,900 |
479,324 |
|||
TOTAL OTHER COMPREHENSIVE INCOME |
560,900 |
479,324 |
|||
COMPREHENSIVE INCOME |
$ |
833,680 |
$ |
6,352,875 |
|
EARNINGS PER ORDINARY SHARE |
|||||
Basic and diluted |
$ |
0.01 |
$ |
0.29 |
|
WEIGHTED AVERAGE ORDINARY SHARES OUTSTANDING |
|||||
Basic and diluted |
19,987,441 |
20,000,000 |
OSSEN INNOVATION CO., LTD AND SUBSIDIARIES |
||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||
(Unaudited) |
||||||
Three Months Ended March 31, |
||||||
2012 |
2011 |
|||||
CASH FLOWS FROM OPERATING ACTIVITIES: |
||||||
Net income |
$ |
322,921 |
$ |
6,691,724 |
||
Adjustments to reconcile net income to net cash provided |
||||||
Depreciation and amortization |
439,492 |
400,374 |
||||
Share-based compensation expense |
26,329 |
26,040 |
||||
Changes in operating assets and liabilities: |
||||||
(Increase) Decrease In: |
||||||
Accounts receivable |
(2,113,267) |
(16,534,592) |
||||
Inventories |
2,105,263 |
9,851,092 |
||||
Advance to suppliers |
(12,416,621) |
(30,386,714) |
||||
Other current assets |
2,232 |
585,790 |
||||
Notes receivable - bank acceptance notes |
10,851,616 |
16,114,881 |
||||
Notes receivable from related party - bank acceptance notes |
- |
3,024,895 |
||||
Account receivable from related party |
- |
(3,204,430) |
||||
Increase (Decrease) In: |
||||||
Accounts payable |
236,030 |
(2,039,556) |
||||
Customer deposits |
(58,844) |
1,512,029 |
||||
Income tax payable |
1,193 |
517,514 |
||||
Other payables and accrued expenses |
(183,119) |
525,477 |
||||
Due to related party |
498,007 |
780,770 |
||||
Net cash used in operating activities |
(288,768) |
(12,134,706) |
||||
CASH FLOWS FROM INVESTING ACTIVITIES: |
||||||
Purchases of plant and equipment |
(3,522) |
(4,748) |
||||
Net cash used in investing activities |
(3,522) |
(4,748) |
||||
CASH FLOWS FROM FINANCING ACTIVITIES: |
||||||
Decrease in restricted cash |
349,427 |
3,998,120 |
||||
Proceeds from short-term bank loans |
10,223,587 |
22,526,280 |
||||
Repayments of short-term bank loans |
(15,374,261) |
(16,864,557) |
||||
Repayments of long-term bank loans |
(158,509) |
- |
||||
Proceeds from notes payable-bank acceptance notes |
14,107,279 |
6,544,801 |
||||
Repayment of notes payable-bank acceptance notes |
(8,876,490) |
(12,772,288) |
||||
Repurchase of common shares |
(13,715) |
|||||
IPO compensation |
- |
440,954 |
||||
Net cash provided by financing activities |
257,318 |
3,873,310 |
||||
DECREASE IN CASH AND CASH EQUIVALENTS |
(34,972) |
(8,266,144) |
||||
Effect of exchange rate changes on cash |
849,798 |
285,145 |
||||
Cash and cash equivalents at beginning of period |
1,568,261 |
12,322,982 |
||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD |
$ |
2,383,087 |
$ |
4,341,983 |
||
SUPPLEMENTARY CASH FLOW INFORMATION |
||||||
Cash paid during the periods: |
||||||
Income taxes paid |
$ |
107,314 |
$ |
570,608 |
||
Interest paid |
$ |
937,179 |
$ |
656,225 |
||
Non-cash transactions: |
||||||
Appropriation to statutory reserve |
$ |
56,457 |
$ |
589,095 |
SOURCE