PR Newswire | Jun 24, 2021 04:15PM EDT

2021

06/24 15:15 CDT

Fuwei Films Announces Its Unaudited Financial Results for the First Quarter of 2021-Teleconference to be Held on Friday, June 25, 2021 at 9:00 am ET- BEIJING, June 24, 2021

BEIJING, June 24, 2021 /PRNewswire/ -- 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 2021 ended March 31, 2021.

First quarter highlights

* Net sales were RMB101.6 million (US$15.5 million), compared to RMB83.2 million, during the same period in 2020, representing an increase of RMB18.4 million or 22.1%. * Sales of specialty films were RMB65.0 million (US$9.9 million) or 63.9% of total revenues as compared to RMB39.9 million or 47.9% in the same period of 2020. * Gross profit was RMB42.5 million (US$6.5 million), representing a gross margin of 41.8%, as compared to a gross profit of RMB29.8 million and gross margin of 35.8% for the same period in 2020. * Net profit attributable to the Company was RMB31.4 million (US$4.8 million) compared to net profit attributable to the Company of RMB13.0 million a year ago.

Mr. Lei Yan, Chairman and CEO of Fuwei Films, commented, "Despite the oversupply in the marketplace and the ongoing coronavirus pandemic, we achieved positive trends in overall sales, especially sales of specialty films, including base film for dry film, which accounted for 63.9% of our total revenues. Base film is a high value-added and differentiated product, which is used to produce dry film that is used in printed circuit boards. The sales increase of base film for dry film demonstrates that the quality of our products is well recognized by our customers. We believe that the order growth also helps improve the Company's financial performance. For the future, we remain committed to innovation and differentiated marketing strategy and expanding 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 2021 Results

Net sales during the first quarter ended March 31, 2021 were RMB101.6 million (US$15.5 million), compared to RMB83.2 million, during the same period in 2020, representing an increase of RMB18.4 million or 22.1%, mainly due to increased sales volume. The increase of sales volume led to an increase of RMB12.2 million, and the increase of sales price resulted in the increase of RMB6.2 million.

In the first quarter of 2021, sales of specialty films were RMB65.0 million (US$9.9 million) or 63.9% of total revenues as compared to RMB39.9 million or 47.9% in the same period of 2020. 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 % of Three-Month Period % of Ended Total Ended Total March 31, 2021 March 31, 2020

RMB US$ RMB

Stamping and transfer film 25,350 3,869 25.0% 34,522 41.5%

Printing film 5,482 837 5.4% 5,845 7.0%

Metallization film 1,643 251 1.6% 1,501 1.8%

Specialty film 64,963 9,915 63.9% 39,877 47.9%

Base film for other 4,186 639 4.1% 1,488 1.8%application

101,624 15,511 100.0% 83,233 100.0%

Overseas sales were RMB9.0 million or US$1.4 million, or 8.9% of total revenues, compared with RMB5.8 million or 6.9% of total revenues in the first quarter of 2020, representing an increase of RMB3.2 million or 55.2%. The increase was mainly due to increased sales volume.

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

Three-Month Period % of Three-Month Period % of Ended Total Ended Total March 31, 2021 March 31, 2020

RMB US$ RMB

Sales in China 92,596 14,133 91.1% 77,448 93.1%

Sales in other countries 9,028 1,378 8.9% 5,785 6.9%

101,624 15,511 100.0% 83,233 100.0%

Gross profit was RMB42.5 million (US$6.5 million) for the first quarter ended March 31, 2021, representing a gross margin of 41.8%, as compared to a gross profit of RMB29.8 million and gross margin of 35.8% for the same period in 2020. Average product sales prices increased by 6.5% while average cost of goods sold decreased by 3.5% compared to the same period in 2020. Consequently, the increase in average product sales prices and the decrease in the average cost of goods sold during the first quarter ended March 31, 2021 contributed to the increase in gross profit and gross margin during the period.

Operating expenses for the first quarter ended March 31, 2021 were RMB10.5 million (US$1.6 million), which was RMB4.5 million, or 30.0% lower than the same period in 2020. This decrease was mainly due to the decreased depreciation on the Dornier Production Line and the trial production line as assets of these two production lines were classified as assets as held for sale.

Net profit attributable to the Company during the first quarter ended March 31, 2021 was RMB31.4 million (US$4.8 million) compared to net profit attributable to the Company of RMB13.0 million during the same period in 2020.

Basic and diluted net benefit per share was RMB9.60(US$1.47) and RMB3.97 for the three-month period ended March 31, 2021 and 2020, respectively.

Total shareholders' equity was RMB259.2 million or US$39.6 million as of March 31, 2021, compared with RMB227.8 million as of December 31, 2020.

As of March 31, 2021, the Company had 3,265,837 basic and diluted ordinary shares outstanding.

Conference Call Information

The Company will host a teleconference on Friday, June 25, 2021, 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: 41764.

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.

Financial Tables to Follow

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

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF MARCH 31, 2021 AND DECEMBER 31, 2020

(amounts in thousands except share and per share value)

(Unaudited)

March 31, 2021 December 31, 2020

RMB US$ RMB

ASSETS

Current assets

Cash and cash equivalents 218,279 33,316 113,423

Restricted cash 12,500 1,908 7,500

Accounts and bills receivable, net 45,329 6,919 32,393

Inventories 22,227 3,393 25,436

Advance to suppliers 12,408 1,894 7,359

Prepayments and other receivables 1,172 179 1,103

Assets held for sale 122,919 18,761 122,919

Deferred tax assets - current 6,947 1,060 6,947

Total current assets 441,781 67,430 317,080

Plant, properties and equipment, net 108,879 16,618 111,308

Lease prepayments, net 15,085 2,302 15,219

Advance to suppliers - long term, net 926 141 1,542

Deferred tax assets - non current 472 72 507

Total assets 567,143 86,563 445,656

LIABILITIES AND EQUITY

Current liabilities

Short-term borrowings 65,000 9,921 65,000

Due to related parties 50,519 7,711 73,571

Accounts payables 20,187 3,081 25,730

Notes payable 25,000 3,816 15,000

Advance from customers 139,112 21,233 9,297

Accrued expenses and other payables 6,318 964 27,400

Total current liabilities 306,136 46,726 215,998

Deferred tax liabilities 1,838 281 1,854

Total liabilities 307,974 47,007 217,852

Equity

Shareholders' equity

Registered capital (of US$0.519008 parvalue;5,000,000 shares authorized; 3,265,837 13,323 2,033 13,323issued andoutstanding)

Additional paid-in capital 311,907 47,606 311,907

Statutory reserve 37,441 5,715 37,441

Accumulated deficit (104,342) (15,926) (135,707)

Cumulative translation adjustment 840 128 840

Total shareholders' equity 259,169 39,556 227,804

Total equity 259,169 39,556 227,804

Total liabilities and equity 567,143 86,563 445,656

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

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2021 AND 2020

(amounts in thousands except share and per share value)

(Unaudited)

The Three-Month Period Ended March 31,

2021 2020

RMB US$ RMB

Net sales 101,624 15,511 83,233

Cost of sales 59,174 9,032 53,474

Gross Profit 42,450 6,479 29,759

Operating expenses

Selling expenses 4,114 628 4,086

Administrative expenses 6,355 970 10,955

Total operating expenses 10,469 1,598 15,041

Operating income 31,981 4,881 14,718

Other income (expense)

- Interest income 856 131 289

- Interest expense (1,575) (240) (2,216)

- Others income (expense),net 122 19 69

Total other expense (597) (90) (1,858)

Income (loss) before provision for income taxes 31,384 4,791 12,860

Income tax benefit (expense) (19) (3) 94

Net income 31,365 4,788 12,954

Net loss attributable to non-controlling - - -interests

Net income attributable to the Company 31,365 4,788 12,954

Other comprehensive income

- Foreign currency translation adjustmentsattributable to - - -non-controlling interest

- Foreign currency translation adjustmentsattributable to the - - -Company

Comprehensive loss attributable to - - -non-controlling interest

Comprehensive income (loss) attributable to the 31,365 4,788 12,954Company

Earnings per share, 9.60 1.47 3.97Basic and diluted

Weighted average number ordinary shares, 3,265,837 3,265,837 3,265,837Basic and diluted

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

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2021 AND 2020

(amounts in thousands except share and per share value)

(Unaudited)

The Three-Month Period Ended March 31,

2021 2020

RMB US$ RMB

Cash flow from operating activities

Net income 31,365 4,788 12,954

Adjustments to reconcile net loss to netcash

used in operating activities

- Depreciation of property, plant and 3,162 483 6,847equipment

- Amortization of intangible assets 134 20 134

- Deferred income taxes 19 3 (94)

- Bad debt expense (2) - 447

-Inventory provision - - -

Changes in operating assets andliabilities

- Accounts and bills receivable (12,934) (1,974) (14,984)

- Inventories 3,209 490 (679)

- Advance to suppliers (5,049) (771) (6,171)

- Prepaid expenses and other current assets (69) (11) (73)

- Accounts payable (5,542) (846) 1,285

- Accrued expenses and other payables (21,259) (3,246) -

- Advance from customers 11,607 1,772 (3,540)

- Tax payable 177 27 1,590

Net cash provided by operating activities 4,818 735 (2,284)

Cash flow from investing activities

Purchases of property, plant and equipment (734) (112) (364)

Restricted cash related to trade finance - - -

Advanced to suppliers - non current 616 94 -

Proceeds from sale of property, plant and 118,208 18,042 -equipment

Net cash provided by investing activities 118,090 18,024 (364)

Cash flow from financing activities

Proceeds from related party (23,052) (3,518) 1,148

Payment of capital lease obligation - - -

Change in notes payable 10,000 1,526 (14,200)

Net cash used in financing activities (13,052) (1,992) (13,052)

Effect of foreign exchange rate changes - (75) -

Net decrease in cash and cash equivalent 109,856 16,692 (15,700)

Cash and cash equivalent

At beginning of period/year 120,923 18,532 86,371

At end of period/year 230,779 35,224 70,671

SUPPLEMENTARY DISCLOSURE:

Interest paid 1,575 240 2,216

Income tax paid - - -

SUPPLEMENTARY SCHEDULE OF NONCASH INVESTING AND FINANCIAL ACTIVITIES:

Account payable for plant and equipment: 1,010 154 1,010

View original content: http://www.prnewswire.com/news-releases/fuwei-films-announces-its-unaudited-financial-results-for-the-first-quarter-of-2021-301319473.html

SOURCE Fuwei Films (Holdings) Co., Ltd.