Press Release
 
Ossen Innovation Supplements Its First Half 2011 Results and Provides First and Second Quarter Results Breakdown
08/12/11

SHANGHAI, Aug. 12, 2011 /PRNewswire via COMTEX/ --

Ossen Innovation Co., Ltd. ("Ossen" or the "Company") (Nasdaq: OSN), a China-based manufacturer of galvanized pre-stressed steel wires used in the production of bridge cables as well as other pre-stressed steel materials, today supplements its previously released financial results for the six months ended June 30, 2011 and provides first and second quarter results breakdown.

First Quarter 2011 Results


(in millions except EPS)

Q1 2011

Q1 2010

Chg.

Revenue

$31.7

$28.7

11%

Gross Profit

$9.1

$5.4

68%

Net Income

$5.9

$3.4

75%

EPS

$0.29

$0.22

31%

Shares Outstanding*

20

15

33%


Second Quarter 2011 Results


(in millions except EPS)

Q2 2011

Q2 2010

Chg.

Revenue

$29.0

$30.0

(3%)

Gross Profit

$6.8

$6.2

9%

Net Income

$3.6

$3.8

(4%)

EPS

$0.18

$0.25

(28%)

Shares Outstanding*

20

15

33%


*20 million shares were outstanding as of June 30, 2011. The number includes the five million shares
sold through Company's initial public offering completed in December 2010.

About Ossen Innovation Co., Ltd.

Ossen Innovation Co., Ltd. manufactures and sells galvanized pre-stressed steel wires used in the production of bridge cables as well as other pre-stressed materials. The Company's products are mainly used in the construction of bridges and other infrastructure projects. Ossen has two manufacturing facilities located in Maanshan, Anhui Province, and Jiujiang, Jiangxi Province.

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 Securities and Exchange Commission, including the Company's annual report on Form 20-F. All information provided in this press release is as of the date hereof. Except as required by law, the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events.


For more information, please contact:




Ossen Innovation Co., Ltd.


Alan Jin, Chief Financial Officer


Email: alanjin@osseninnovation.com


Phone: +86 (21) 6888-8886


Web: www.osseninnovation.com




Investor Relations


MZ-HCI


Ted Haberfield, President


Phone: +1-760-755-2716


Email: thaberfield@hcinternational.net


Web: www.hcinternational.net



OSSEN INNOVATION CO., LTD AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS



March31,



December31,



2011



2010



(Unaudited)




ASSETS






CurrentAssets






Cashandcashequivalents

$

4,341,983


$

12,322,982

Restrictedcash


9,800,897



13,799,018

Notesreceivable-bankacceptancenotes


1,522,047



17,636,928

Accountsreceivable,netofallowancefordoubtfulaccounts
of$37,584and$37,347atMarch31,2011andDecember31,2010,respectively


29,867,084



13,332,492

Inventories


18,098,689



27,949,781

Advancetosuppliers


55,459,065



25,072,350

Othercurrentassets


2,757,512



3,343,302

Notesreceivablefromrelatedparty-bankacceptancenotes


-



3,024,895

Accountreceivablefromrelatedparty


3,911,917



707,487

TotalCurrentAssets


125,759,194



117,189,235

Property,plantandequipment,net


11,773,356



12,029,612

Landuserights,net


4,312,903



4,306,091

Prepaymentforplantandequipment


7,610,234



7,562,237

TOTALASSETS

$

149,455,687


$

141,087,175







LIABILITIESANDSHAREHOLDERS'EQUITY






CurrentLiabilities






Notespayable-bankacceptancenotes

$

19,786,609


$

26,014,096

Short-termbankloans


43,987,137



38,325,414

Accountspayable


454,108



2,493,665

Customerdeposits


2,345,797



833,768

Incometaxpayable


1,180,100



662,585

Otherpayablesandaccruedexpenses


619,987



94,510

Duetorelatedparty


780,770



-

TotalCurrentLiabilities


69,154,508



68,424,038

TOTALLIABILITIES


69,154,508



68,424,038





EQUITY




Shareholders'Equity






Ordinaryshares,$0.01parvalue:100,000,000sharesauthorized,20,000,000
sharesissuedandoutstandingasofMarch31,2011andDecember31,2010,respectively


200,000



200,000

Additionalpaid-incapital


33,805,090



33,338,096

Statutoryreserve


3,263,552



2,674,457

Retainedearnings


31,171,569



25,887,113

Accumulatedothercomprehensiveincome


2,672,320



2,192,996

TOTALSHAREHOLDERS'EQUITY


71,112,531



64,292,662

Non-controllinginterest


9,188,648



8,370,475

TOTALEQUITY


80,301,179



72,663,137

TOTALLIABILITIESANDSHAREHOLDERS'EQUITY

$

149,455,687


$

141,087,175







OSSEN INNOVATION CO., LTD AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(Unaudited)



ThreeMonthsEndedMarch31,



2011



2010







REVEUNUES

$

31,745,263


$

28,678,325

COST OF GOODS SOLD


22,643,557



23,265,571

GROSS PROFIT


9,101,706



5,412,754

Selling expenses


241,441



93,043

General and administrative expenses


321,496



251,416

Total Operating Expenses


562,937



344,459







INCOME FROM OPERATIONS


8,538,769



5,068,295

Financial expenses, net


(808,664)



(532,127)

Other income, net


44,032



27,871

INCOME BEFORE INCOME TAX


7,774,137



4,564,039

INCOME TAX


(1,082,413)



(599,431)

NET INCOME


6,691,724



3,964,608

LESS: NET INCOME ATTRIBUTABLE TO NON-CONTROLLING INTEREST


818,173



611,672

NET INCOME ATTRIBUTABLE TO CONTROLLING INTEREST


5,873,551



3,352,936

OTHER COMPREHENSIVE INCOME






Foreign currency translation gain


479,324



3,856

TOTAL OTHER COMPREHENSIVE INCOME


479,324



3,856

COMPREHENSIVE INCOME

$

6,352,875


$

3,356,792







EARNINGS PER ORDINARY SHARE






Basic and diluted

$

0.29


$

0.22

WEIGHTED AVERAGE ORDINARY SHARES OUTSTANDING






Basic and diluted


20,000,000



15,000,000


OSSEN INNOVATION CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)




ThreeMonthsEndedMarch31,




2011



2010

CASH FLOWS FROM OPERATING ACTIVITIES:







Net income


$

6,691,724


$

3,964,608

Adjustments to reconcile net income to net cash provided byoperating activities:







Depreciation and amortization



400,374



355,070

Share-based compensation expense



26,040



-

Changes in operating assets and liabilities:







(Increase) Decrease In:







Accounts receivable



(16,534,592)



(609,982)

Inventories



9,851,092



1,344,477

Advance to suppliers



(30,386,714)



(5,524,252)

Other current assets



585,790



550,149

Notes receivable - bank acceptance notes



16,114,881



-

Notes receivable from related party - bank acceptance notes



3,024,895



1,828,234

Due from and advance to related party



-



(11,714,379)

Account receivable from related party



(3,204,430)



(6,986,666)

Increase (Decrease) In:







Accounts payable



(2,039,556)



8,046,852

Customer deposits



1,512,029



788,175

Income tax payable



517,514



369,664

Other payables and accrued expenses



525,477



542,613

Due to related party



780,770



-

Net cash used in operating activities



(12,134,706)



(7,045,437)








CASH FLOWS FROM INVESTING ACTIVITIES:







Purchases of plant and equipment



(4,748)



(11,871)

Net cash used in investing activities



(4,748)



(11,871)







CASH FLOWS FROM FINANCING ACTIVITIES:






Decrease in restricted cash


3,998,120



12,726

Proceeds from short-term bank loans


22,526,280



23,551,440

Repayments of short-term bank loans


(16,864,557)



(16,232,927)

Proceeds from notes payable-bank acceptance notes


6,544,801



11,702,579

Repayment of notes payable-bank acceptance notes


(12,772,288)



(10,236,580)

IPO expenditure refund


440,954



-

Net cash provided by financing activities


3,873,310



8,797,238







INCREASE /( DECREASE) IN CASH AND CASH EQUIVALENTS


(8,266,144)



1,739,930

Effect of exchange rate changes on cash


285,145



10,063

Cash and cash equivalents at beginning of period


12,322,982



8,409,467

CASH AND CASH EQUIVALENTS AT END OF PERIOD

$

4,341,983


$

10,159,460







SUPPLEMENTARY CASH FLOW INFORMATION






Cash paid during the periods:






Income taxes paid

$

570,608


$

198,199

Interest paid

$

656,225


$

397,775

Non-cash transactions:






Appropriation to statutory reserve

$

589,095


$

404,710







OSSEN INNOVATION CO., LTD AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(Unaudited)


Three Months Ended June 30,


2011


2010

REVENUES

$

29,036,672


$

30,030,450

COST OF GOODS SOLD


22,282,476



23,836,150

GROSS PROFIT


6,754,196



6,194,300

Selling expenses


316,520



102,663

General and administrative expenses


856,142



280,860

Total Operating Expenses


1,172,662



383,523







INCOME FROM OPERATIONS


5,581,534



5,810,777

Financial expenses, net


(799,256)



(537,532)

Other income, net


26,654



68,849

INCOME BEFORE INCOME TAX


4,808,932



5,342,094

INCOME TAX


(694,317)



(771,167)

NET INCOME


4,114,615



4,570,927

LESS: NET INCOME ATTRIBUTABLE TO






NON-CONTROLLING INTEREST


503,273



818,357

NET INCOME ATTRIBUTABLE TO CONTROLLING






INTEREST


3,611,342



3,752,570

OTHER COMPREHENSIVE INCOME






Foreign currency translation gain


1,318,437



113,679







TOTAL OTHER COMPREHENSIVE INCOME


1,318,437



113,679

COMPREHENSIVE INCOME

$

4,929,779


$

3,866,249







EARNINGS PER ORDINARY SHARE






Basic and diluted

$

0.18


$

0.25

WEIGHTED AVERAGE ORDINARY SHARES OUTSTANDING






Basic and diluted


20,000,000



15,000,000

OSSEN INNOVATION CO., LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)










ThreeMonthsEndedJune30,




2011



2010

CASH FLOWS FROM OPERATING ACTIVITIES:







Net income


$

4,114,615


$

4,570,927

Adjustments to reconcile net income to net cash provided by/ (used in) operating activities:







Depreciation and amortization



487,314



372,523

Share-based compensation expense



26,329



-

Changes in operating assets and liabilities:







(Increase) Decrease In:







Accounts receivable



(1,863,434)



(18,014,751)

Inventories



(2,160,408)



(6,240,707)

Advance to suppliers



(17,040,730)



7,415,128

Other current assets



2,617,257



(251,713)

Notes receivable - bank acceptance notes



1,522,047



150,208

Due from and advance to related party



-



3,403,036

Account receivable from related party



2,855,463



6,986,666

Increase (Decrease) In:







Accounts payable



70,938



(7,556,308)

Customer deposits



3,903,949



452,899

Income tax payable



(441,374)



408,222

Other payables and accrued expenses



(345,952)



(562,344)

Due to related party



(780,770)




Net cash used in operating activities



(7,034,756)



(8,866,214)








CASH FLOWS FROM INVESTING ACTIVITIES:







Purchases of plant and equipment



(122,712)



(85,016)

Net cash used in investing activities



(122,712)



(85,016)








CASH FLOWS FROM FINANCING ACTIVITIES:







Increase in restricted cash



(3,799,809)



(338,218)

Proceeds from short-term bank loans



16,458,853



6,263,794

Repayments of short-term bank loans



(11,095,758)



(4,655,035)

Proceeds from notes payable-bank acceptance notes



19,445,298



10,328,382

Repayment of notes payable-bank acceptance notes



(13,241,808)



(9,508,345)

Net cash provided by financing activities



7,766,776



2,090,578








INCREASE /( DECREASE) IN CASH AND CASH EQUIVALENTS



609,308



(6,860,652)

Effect of exchange rate changes on cash



813,476



161,533

Cash and cash equivalents at beginning of period



4,341,983



10,159,460

CASH AND CASH EQUIVALENTS AT END OF PERIOD


$

5,764,767


$

3,460,341








SUPPLEMENTARY CASH FLOW INFORMATION







Cash paid during the periods:







Income taxes paid


$

1,145,915


$

594,575

Interest paid


$

680,367


$

448,839

Non-cash transactions:







Appropriation to statutory reserve


$

381,285


$

551,044


SOURCE Ossen Innovation Co., Ltd.

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