Ossen Innovation Announces Second Quarter 2012 Financial Results
"We are pleased to see a rebound in our sales in the quarter," stated Dr.
Financial Summary
(in millions ex- EPS) |
Q2 2012 |
Q2 2011 |
Chg. |
1H 2012 |
1H 2011 |
Chg. |
Revenue |
$31.6 |
$29.0 |
+9% |
$53.9 |
$60.8 |
-11% |
Gross Profit |
$2.2 |
$6.8 |
-67% |
$4.8 |
$15.9 |
-70% |
Net Income* |
$0.1 |
$3.6 |
-98% |
$0.3 |
$9.5 |
-96% |
EPS |
$0.003 |
$0.18 |
-98% |
$0.02 |
$0.47 |
-96% |
Shares Outstanding |
19.9 |
20.0 |
-0.3% |
19.9 |
20.0 |
-0.1% |
*Net income attributable to controlling interest
Second Quarter 2012 Financial Results
Revenue for the three months ended
Gross profit decreased from $6.8 million to $2.2 million, a 67% year-over-year decline. Consolidated gross margin fell from 23.3% to 7.1%. Gross profit and gross margin were down mainly due to the price decreases of some of our products because of the continued tough market conditions in the infrastructure sector in
Gross margin for the second quarter of 2012 were 8.9% and 6.0% for coated pre-stressed steel products and for plain surface pre-stressed steel products, respectively.
Selling and distribution expenses decreased 23% to
Net income attributable to controlling interest fell 98% to
First Half 2012 Financial Results
Revenues for the six months ended
Gross profit fell 70% in the first six months of 2012 to
Operating expenses were
Net income attributable to controlling shareholders was
Balance Sheet and Cash Flows
Ossen had approximately
For the second quarter of 2012, the Company used approximately
The Company generated approximately
In
Business Updates and Outlook
1. As of the end of August, Ossen has collected
2. According to government announcements and news release from major media channels, from
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 Second Quarter 2012 Conference Call" or be prepared to utilize the conference ID.
Conference Call |
|
Date: |
Monday, September 17, 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: |
22964240 |
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/9cz9j4f7
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 |
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Investor Relations |
|
MZ North America |
|
Ted Haberfield, President |
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Phone: +1-760-755-2716 |
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Email: thaberfield@mzgroup.us |
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Web: www.mz-ir.com |
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AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED
OSSEN INNOVATION CO., LTD AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS |
|||||
June 30, |
December 31, |
||||
2012 |
2011 |
||||
(Unaudited) |
|||||
ASSETS |
|||||
Current Assets |
|||||
Cash and cash equivalents |
$ |
2,097,093 |
$ |
1,568,261 |
|
Restricted cash |
17,113,101 |
19,764,900 |
|||
Notes receivable – bank acceptance notes |
7,918,534 |
10,851,616 |
|||
Accounts receivable, net of allowance for doubtful accounts of |
49,952,764 |
48,049,722 |
|||
Inventories |
15,004,624 |
17,222,664 |
|||
Advance to suppliers |
62,791,410 |
41,391,174 |
|||
Other current assets |
5,952,014 |
6,495,241 |
|||
Account receivable from related party |
20,944 |
20,799 |
|||
Total Current Assets |
160,850,484 |
145,364,377 |
|||
Property, plant and equipment, net |
10,408,766 |
11,022,916 |
|||
Land use rights, net |
4,362,572 |
4,380,708 |
|||
Prepayment for plant and equipment |
7,926,199 |
7,869,529 |
|||
TOTAL ASSETS |
$ |
183,548,021 |
$ |
168,637,530 |
OSSEN INNOVATION CO., LTD AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS |
|||||
June 30, |
December 31, |
||||
2012 |
2011 |
||||
(Unaudited) |
|||||
LIABILITIES AND SHAREHOLDERS' EQUITY |
|||||
Current Liabilities |
|||||
Notes payable – bank acceptance notes |
$ |
34,999,921 |
$ |
24,848,628 |
|
Short-term bank loans |
51,311,874 |
47,966,209 |
|||
Accounts payable |
1,145,233 |
948,475 |
|||
Customer deposits |
351,400 |
459,915 |
|||
Income tax payable |
46,055 |
4,792 |
|||
Other payables and accrued expenses |
334,868 |
324,423 |
|||
Due to related party |
316,741 |
- |
|||
Total Current Liabilities |
88,506,092 |
74,552,442 |
|||
Long-term bank loans |
4,592,750 |
4,718,094 |
|||
TOTAL LIABILITIES |
93,098,842 |
79,270,536 |
|||
EQUITY |
|||||
Shareholders' Equity |
|||||
Ordinary shares, $0.01 par value: 100,000,000 shares authorized, |
200,000 |
200,000 |
|||
Additional paid-in capital |
33,937,314 |
33,884,656 |
|||
Statutory reserve |
3,963,003 |
3,884,808 |
|||
Retained earnings |
36,484,891 |
36,224,467 |
|||
Treasury stock, at cost: 69,782 and 0 shares as of as of June 30, |
(69,031) |
- |
|||
Accumulated other comprehensive income |
5,916,868 |
5,295,641 |
|||
TOTAL SHAREHOLDERS' EQUITY |
80,433,045 |
79,489,572 |
|||
Non-controlling interest |
10,016,134 |
9,877,422 |
|||
TOTAL EQUITY |
90,449,179 |
89,366,994 |
|||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |
$ |
183,548,021 |
$ |
168,637,530 |
OSSEN INNOVATION CO., LTD AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Unaudited) |
|||||||||
FOR THE THREE MONTHS ENDED JUNE 30, |
FOR THE SIX MONTHS ENDED JUNE 30, |
||||||||
2012 |
2011 |
2012 |
2011 |
||||||
REVENUES |
$ |
31,603,237 |
$ |
29,036,672 |
$ |
53,890,525 |
$ |
60,781,935 |
|
COST OF GOODS SOLD |
29,357,849 |
22,282,476 |
49,083,199 |
44,926,033 |
|||||
GROSS PROFIT |
2,245,388 |
6,754,196 |
4,807,326 |
15,855,902 |
|||||
Operating Expenses: |
|||||||||
Selling and distribution expenses |
242,733 |
316,520 |
335,094 |
557,961 |
|||||
General and administrative expenses |
1,269,156 |
856,142 |
2,394,647 |
1,177,638 |
|||||
Total Operating Expenses |
1,511,889 |
1,172,662 |
2,729,741 |
1,735,599 |
|||||
INCOME FROM OPERATIONS |
733,499 |
5,581,534 |
2,077,585 |
14,120,303 |
|||||
Other Income (Expenses): |
|||||||||
Financial expenses, net |
(838,435) |
(799,256) |
(1,771,665) |
(1,607,920) |
|||||
Other income, net |
313,339 |
26,654 |
333,881 |
70,686 |
|||||
INCOME BEFORE INCOME TAXES |
208,403 |
4,808,932 |
639,801 |
12,583,069 |
|||||
INCOME TAXES |
(53,992) |
(694,317) |
(162,470) |
(1,776,730) |
|||||
NET INCOME |
154,411 |
4,114,615 |
477,331 |
10,806,339 |
|||||
LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST |
88,571 |
503,273 |
138,712 |
1,321,446 |
|||||
NET INCOME ATTRIBUTABLE TO OSSEN INNOVATION CO.,LTD AND SUBSIDIARIES |
65,840 |
3,611,342 |
338,619 |
9,484,893 |
|||||
OTHER COMPREHENSIVE INCOME |
|||||||||
Foreign currency translation gain, net of tax |
60,327 |
1,318,437 |
621,227 |
1,797,761 |
|||||
TOTAL OTHER COMPREHENSIVE INCOME |
60,327 |
1,318,437 |
621,227 |
1,797,761 |
|||||
COMPREHENSIVE INCOME |
126,167 |
4,929,779 |
959,846 |
11,282,654 |
|||||
EARNINGS PER ORDINARY SHARE Basic and diluted |
$ |
0.003 |
$ |
0.18 |
$ |
0.02 |
$ |
0.47 |
|
WEIGHTED AVERAGE ORDINARY SHARES OUTSTANDING Basic and diluted |
$ |
19,957,935 |
$ |
20,000,000 |
$ |
19,972,688 |
$ |
20,000,000 |
OSSEN INNOVATION CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) |
||||||
Six Months Ended June 30, |
||||||
2012 |
2011 |
|||||
CASH FLOWS FROM OPERATING ACTIVITIES: |
||||||
Net income |
$ |
477,331 |
$ |
10,806,339 |
||
Adjustments to reconcile net income to net cash provided by/ (used in) operating activities: |
||||||
Depreciation and amortization |
828,846 |
887,688 |
||||
Share-based compensation expense |
52,658 |
52,369 |
||||
Changes in operating assets and liabilities: |
||||||
(Increase) Decrease In: |
||||||
Accounts receivable |
(1,903,041) |
(18,398,026) |
||||
Inventories |
2,218,040 |
7,690,684 |
||||
Advance to suppliers |
(21,400,236) |
(47,427,444) |
||||
Other current assets |
543,227 |
3,203,047 |
||||
Notes receivable - bank acceptance notes |
2,933,082 |
17,636,928 |
||||
Notes receivable from related party - bank acceptance notes |
- |
3,024,895 |
||||
Account receivable from related party |
- |
(348,967) |
||||
Increase (Decrease) In: |
||||||
Accounts payable |
196,757 |
(1,968,618) |
||||
Customer deposits |
(108,515) |
5,415,978 |
||||
Income tax payable |
41,263 |
76,140 |
||||
Other payables and accrued expenses |
10,445 |
179,525 |
||||
Due to related party |
316,741 |
- |
||||
Net cash used in operating activities |
(15,793,402) |
(19,169,462) |
||||
CASH FLOWS FROM INVESTING ACTIVITIES: |
||||||
Purchases of plant and equipment |
(28,412) |
(127,460) |
||||
Prepayment for plant and equipment |
(1,584) |
- |
||||
Net cash used in investing activities |
(29,996) |
(127,460) |
OSSEN INNOVATION CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) |
||||||
Six Months Ended June 30, |
||||||
2012 |
2011 |
|||||
CASH FLOWS FROM FINANCING ACTIVITIES: |
||||||
Decrease in restricted cash |
2,651,800 |
198,311 |
||||
Proceeds from short-term bank loans |
32,466,791 |
38,985,133 |
||||
Repayments of short-term bank loans |
(29,456,793) |
(27,960,315) |
||||
Repayments of long-term bank loans |
(158,376) |
- |
||||
Proceeds from notes payable-bank acceptance notes |
39,910,676 |
25,990,099 |
||||
Repayment of notes payable-bank acceptance notes |
(29,933,007) |
(26,014,096) |
||||
Repurchase of common shares |
(69,031) |
- |
||||
IPO compensation |
- |
440,954 |
||||
Net cash provided by financing activities |
15,412,060 |
11,640,086 |
||||
DECREASE IN CASH AND CASH EQUIVALENTS |
(411,338) |
(7,656,836) |
||||
Effect of exchange rate changes on cash |
940,170 |
1,098,621 |
||||
Cash and cash equivalents at beginning of period |
1,568,261 |
12,322,982 |
||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD |
$ |
2,097,093 |
$ |
5,764,767 |
||
SUPPLEMENTARY CASH FLOW INFORMATION |
||||||
Cash paid during the periods: |
||||||
Income taxes paid |
$ |
121,240 |
$ |
1,716,523 |
||
Interest paid |
$ |
1,849,501 |
$ |
1,336,592 |
||
Non-cash transactions: |
||||||
Appropriation to statutory reserve |
$ |
78,195 |
$ |
970,380 |
OSSEN INNOVATION CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) |
||||||
Three Months Ended June 30, |
||||||
2012 |
2011 |
|||||
CASH FLOWS FROM OPERATING ACTIVITIES: |
||||||
Net income |
$ |
154,410 |
$ |
4,114,615 |
||
Adjustments to reconcile net income to net cash provided by/ (used in) operating activities: |
||||||
Depreciation and amortization |
389,354 |
487,314 |
||||
Share-based compensation expense |
26,329 |
26,329 |
||||
Changes in operating assets and liabilities: |
||||||
(Increase) Decrease In: |
||||||
Accounts receivable |
210,226 |
(1,863,434) |
||||
Inventories |
112,777 |
(2,160,408) |
||||
Advance to suppliers |
(8,983,615) |
(17,040,730) |
||||
Other current assets |
540,995 |
2,617,257 |
||||
Notes receivable - bank acceptance notes |
(7,918,534) |
1,522,047 |
||||
Account receivable from related party |
- |
2,855,463 |
||||
Increase (Decrease) In: |
||||||
Accounts payable |
(39,272) |
70,938 |
||||
Customer deposits |
(49,671) |
3,903,949 |
||||
Income tax payable |
40,070 |
(441,374) |
||||
Other payables and accrued expenses |
193,564 |
(345,952) |
||||
Due to related party |
(181,266) |
(780,770) |
||||
Net cash used in operating activities |
(15,504,633) |
(7,034,756) |
||||
CASH FLOWS FROM INVESTING ACTIVITIES: |
||||||
Purchases of plant and equipment |
(24,890) |
(122,712) |
||||
Prepayment for plant and equipment |
(1,584) |
- |
||||
Net cash used in investing activities |
(26,474) |
(122,712) |
OSSEN INNOVATION CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) |
||||||
Three Months Ended June 30, |
||||||
2012 |
2011 |
|||||
CASH FLOWS FROM FINANCING ACTIVITIES: |
||||||
(Increase)/Decrease in restricted cash |
2,302,373 |
(3,799,809) |
||||
Proceeds from short-term bank loans |
22,243,204 |
16,458,853 |
||||
Repayments of short-term bank loans |
(14,082,532) |
(11,095,758) |
||||
Proceeds from notes payable-bank acceptance notes |
25,803,397 |
19,445,298 |
||||
Repayment of notes payable-bank acceptance notes |
(21,056,517) |
(13,241,808) |
||||
Repurchase of common shares |
(55,316) |
- |
||||
Net cash provided by financing activities |
15,154,609 |
7,766,776 |
||||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |
(376,498) |
609,308 |
||||
Effect of exchange rate changes on cash |
90,504 |
813,476 |
||||
Cash and cash equivalents at beginning of period |
2,383,087 |
4,341,983 |
||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD |
$ |
2,097,093 |
$ |
5,764,767 |
||
SUPPLEMENTARY CASH FLOW INFORMATION |
||||||
Cash paid during the periods: |
||||||
Income taxes paid |
$ |
13,926 |
$ |
1,145,915 |
||
Interest paid |
$ |
911,872 |
$ |
680,367 |
||
Non-cash transactions: |
||||||
Appropriation to statutory reserve |
$ |
21,738 |
$ |
381,285 |
SOURCE