BEIJING, May 3, 2012 /PRNewswire-Asia-FirstCall/ -- Fushi
Copperweld, Inc. (Nasdaq: FSIN), the leading global manufacturer
and innovator of copper-clad bimetallic wire used in a variety of
telecommunication, utility, transportation and other electrical
applications, today announced financial results for the first
quarter ended March 31, 2012.
First Quarter 2012 Results
- Revenues were $62.1 million
compared to $65.9 million in the year
ago period;
- Gross profit was $16.4 million,
or 26.3% of revenues, compared to $17.1
million, or 26.0% of revenues, in the year ago period;
- Income from operations was $8.1
million, or 13.0% of revenues, compared to $10.5 million, or 15.9% of revenues, in the year
ago period;
- Net income was $4.9 million, or
$0.13 per diluted share, compared to
net income of $6.8 million, or
$0.18 per diluted share, in the year
ago period;
- Cash position of $205.4 million
at March 31, 2012.
Joe Longever, co-Chief Executive
Officer of Fushi Copperweld, commented, "The quarter came in
largely as expected, and we saw a slight improvement in business
conditions and greater predictability in orders relative to what we
experienced in the 2011 fourth quarter. While sales at
Dalian were impacted by softening
telecom demand, we benefitted from solid performance in our utility
product lines and lower raw material costs in what continued to be
a challenging market environment. We also began to see some
traction from our growth initiatives in the period, including
increased order and inquiry activity from European, African and
broader Asian markets, for a variety of products. The ramp up
of our operations in Liege,
Belgium continued, and Liege is becoming a key competitive
differentiator for us, as we have secured promising new copper
tubing and bi-metallic wire orders and interest, as a result of our
on-the-ground presence in this market."
Revenues in the first quarter of 2012 were $62.1 million, a decrease of 5.7% compared to
$65.9 million in the prior year
quarter, primarily due to lower sales volumes.
Gross profit in the first quarter was $16.4 million compared to $17.1 million last year. Gross margin increased
to 26.3% from 26.0% in the same period last year. Gross margin for
the Company's Dalian cladding
facility was 33.1%, compared to 32.6% in the prior year period,
while gross margin for the Company's Fayetteville, TN facility was 10.3% in the
first quarter of 2012, compared to 8.9% in the 2011 first
quarter.
Operating expenses in the first quarter of 2012 increased to
$8.3 million, compared to
$6.7 million in the prior year's
quarter, primarily as a result of the Company's continued
investment in its global business development efforts, as well as
incremental costs of approximately $0.9
million related to the start-up of operations at its new
facility in Liege, Belgium. As a
percentage of revenue, operating expenses increased to 13.3% from
10.1% in the first quarter of 2011. While not significant to
date, the Liege facility did
generate nominal revenues from sales of copper-clad aluminum and
copper tubing products during the quarter. The Company expects
that revenues from this facility will continue to increase and be
slightly dilutive to earnings in 2012.
The Company's effective income tax rate in the first quarter of
2012 was 39.2% compared to 33.5% in the year ago period. The
Company continues to expect its effective tax rate for the 2012
full year period to be 31.5%.
Net income in the first quarter was $4.9
million, or $0.13 per diluted
share, compared to net income of $6.8
million, or $0.18 per diluted
share, for the 2011 first quarter.
Fully diluted shares in the first quarter of 2012 were 38.3
million compared to 38.4 million a year ago.
During the three months ended March 31,
2012, the Company generated net cash from operating
activities of $7.1 million, compared
to $15.0 million in the comparable
period in 2011.
Mr. Longever concluded, "As we exit the seasonally soft first
quarter, we are encouraged by our performance and the improved
conditions in our markets. Order trends have remained
promising, our growth investments are beginning to generate
benefits that we expect to build on throughout the year, and the
feedback we have received from our customers and prospects
reinforces the value proposition of our products as a technically
superior and economically attractive alternative to pure copper. We
remain confident in the long-term demand drivers for our products
and in our ability to grow the business. In the meantime, we
continue to generate healthy cash flows and add to our strong cash
position, which keeps us well positioned through the economic
cycle."
Outlook
Based on its first quarter performance and current business
trends, Fushi Copperweld continues to expect 2012 fully diluted
earnings per share between $0.76 and
$0.86, based on an estimated weighted average diluted share
count of 38.3 million shares and an effective tax rate of 31.5%.
The Company expects profitability in subsequent quarters to improve
over the first quarter due to higher revenues with the absence of
the Chinese New Year and increased
traction from business development and certification efforts.
Conference Call
The Company will conduct a conference call to discuss the first
quarter 2012 results today, Thursday, May 3,
2012, at 8:30 am ET. To
participate, the conference call may be directly accessed from the
U.S. and Canada at 1-866-226-1792
and accessed internationally at 1-416-340-2216. A live webcast of
the conference call will also be available at
http://bit.ly/eventFSIN. A replay of the call will be available at
www.fushicopperweld.com on the Investor Relations section.
About Fushi Copperweld
Fushi Copperweld Inc., principally through its wholly owned
subsidiaries, Fushi International (Dalian) Bimetallic Cable Co. Ltd. and
Copperweld Bimetallics LLC, is the leading manufacturer and
innovator of copper-clad bimetallic engineered conductor products
for electrical, telecommunications, transportation, utilities and
industrial applications. With extensive design and production
capabilities, and a long-standing dedication to customer service,
Fushi Copperweld is the preferred choice for bimetallic products
worldwide.
Safe Harbor Statement
This press release may include certain statements that are not
descriptions of historical facts, but are forward-looking
statements. Forward-looking statements can be identified by the use
of forward-looking terminology such as "will", "believes",
"expects" or similar expressions. These forward-looking statements
may also include statements about our proposed discussions related
to our business or growth strategy, which is subject to change.
Such information is based upon expectations of our management that
were reasonable when made but may prove to be incorrect. All of
such assumptions are inherently subject to uncertainties and
contingencies beyond our control and upon assumptions with respect
to future business decisions, which are subject to change. We do
not undertake to update the forward-looking statements contained in
this press release. For a description of the risks and
uncertainties that may cause actual results to differ from the
forward-looking statements contained in this press release, see our
most recent Annual Report filed with the Securities and Exchange
Commission (SEC) on Form 10-K, and our subsequent SEC filings.
Copies of filings made with the SEC are available through the SEC's
electronic data gathering analysis retrieval system (EDGAR) at
www.sec.gov.
For more information, please contact:
Investors
Jolin Qiao, Investor Relations
Officer
Fushi Copperweld Inc.
Phone +1.931.433.0482
E-mail: ir@fushicopperweld.com
Web: www.fushicopperweld.com
FUSHI COPPERWELD,
INC. AND SUBSIDIARIES
|
CONSOLIDATED BALANCE
SHEETS
|
AS OF MARCH 31, 2012
and DECEMBER 31, 2011
|
UNAUDITED
|
|
|
|
|
|
|
|
March
31,
|
|
December 31,
|
ASSETS
|
|
2012
|
|
2011
|
Current
assets:
|
|
USD
|
|
USD
|
Cash
|
|
205,375,102
|
|
200,451,902
|
Accounts receivable, net
of allowance for doubtful accounts
|
|
63,844,604
|
|
63,978,861
|
Inventories
|
|
15,053,070
|
|
10,695,123
|
Advances to
suppliers
|
|
6,970,168
|
|
6,793,904
|
Prepaid expenses and
other current assets
|
|
1,488,592
|
|
1,332,204
|
Total current
assets
|
|
292,731,536
|
|
283,251,994
|
|
|
|
|
|
Property, plant and
equipment, net
|
|
114,205,897
|
|
117,405,523
|
Intangible assets,
net
|
|
387,900
|
|
431,441
|
Land use
rights
|
|
13,213,366
|
|
13,321,796
|
Deposits for land use
rights
|
|
10,084,905
|
|
10,090,621
|
Goodwill
|
|
1,811,041
|
|
1,812,068
|
Other non-current
assets
|
|
459,845
|
|
491,380
|
Total
assets
|
|
432,894,490
|
|
426,804,823
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Current portion of
long-term loan
|
|
650,000
|
|
650,000
|
Accounts
payable
|
|
5,595,197
|
|
3,802,155
|
Amounts due to a related
party
|
|
-
|
|
2,000,000
|
Accrued expenses and
other current liabilities
|
|
17,026,671
|
|
15,880,176
|
Total current
liabilities
|
|
23,271,868
|
|
22,332,331
|
Long-term
loans
|
|
7,542,740
|
|
7,632,100
|
Deferred income tax
liabilities
|
|
663,100
|
|
672,943
|
Total
liabilities
|
|
31,477,708
|
|
30,637,374
|
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
|
Common stock, $0.006 par
value, 100,000,000 shares authorized; 38,286,054 and 38,240,438
shares issued and outstanding as of March 31, 2012 and December 31,
2011, respectively
|
|
229,718
|
|
229,444
|
Additional paid-in
capital
|
|
169,696,936
|
|
169,335,522
|
Retained
earnings
|
|
177,374,216
|
|
172,507,890
|
Accumulated other
comprehensive income
|
|
54,115,912
|
|
54,094,593
|
Total shareholders'
equity
|
|
401,416,782
|
|
396,167,449
|
Commitments and
contingencies
|
|
|
|
|
Total liabilities and
shareholders' equity
|
|
432,894,490
|
|
426,804,823
|
FUSHI
COPPERWELD, INC. AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF
|
COMPREHENSIVE
INCOME
|
FOR THE THREE-MONTH
PERIOD ENDED MARCH 31, 2012 AND 2011
|
UNAUDITED
|
|
|
|
|
|
|
Three-Month
Period Ended March 31,
|
|
2012
|
|
|
2011
|
|
USD
|
|
|
USD
|
|
|
|
|
|
Revenues
|
62,146,186
|
|
|
65,925,866
|
Cost of
revenues
|
45,790,996
|
|
|
48,777,114
|
Gross
profit
|
16,355,190
|
|
|
17,148,752
|
|
|
|
|
|
Selling
expenses
|
1,619,393
|
|
|
1,149,524
|
General and
administrative expenses
|
6,656,755
|
|
|
5,515,123
|
Total
operating expenses
|
8,276,148
|
|
|
6,664,647
|
|
|
|
|
|
Income
from operations
|
8,079,042
|
|
|
10,484,105
|
|
|
|
|
|
Interest
income
|
236,709
|
|
|
228,854
|
Interest
expense
|
(131,185)
|
|
|
(98,094)
|
Foreign currency
exchange losses, net
|
(175,595)
|
|
|
(354,892)
|
Total
other expense, net
|
(70,071)
|
|
|
(224,132)
|
|
|
|
|
|
Income
before income taxes
|
8,008,971
|
|
|
10,259,973
|
|
|
|
|
|
Income tax
expense
|
3,142,645
|
|
|
3,433,688
|
|
|
|
|
|
Net
income
|
4,866,326
|
|
|
6,826,285
|
|
|
|
|
|
Other
comprehensive income:
|
|
|
|
|
Foreign currency
translation adjustment, net of nil income taxes
|
21,319
|
|
|
2,655,537
|
|
|
|
|
|
Comprehensive income
|
4,887,645
|
|
|
9,481,822
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
Basic
|
0.13
|
|
|
0.18
|
Diluted
|
0.13
|
|
|
0.18
|
FUSHI COPPERWELD,
INC. AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
FOR THE THREE-MONTH
PERIOD ENDED MARCH 31, 2012 AND 2011
|
UNAUDITED
|
|
|
|
|
|
Three-Month Period Ended March 31,
|
|
|
2012
|
|
2011
|
|
|
USD
|
|
USD
|
Cash flows from
operating activities:
|
|
|
|
|
Net cash provided by
operating activities
|
|
7,115,016
|
|
15,013,956
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
Purchases of property,
plant and equipment
|
|
(199,054)
|
|
(282,486)
|
Net cash used in
investing activities
|
|
(199,054)
|
|
(282,486)
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
Payment for acquisition
of Jinchuan
|
|
-
|
|
(4,819,107)
|
Repayment of
interest-free loans provided by Mr. Li Fu
|
|
(2,000,000)
|
|
-
|
Repayment of long-term
bank loans
|
|
(162,500)
|
|
(162,500)
|
Proceeds from issuance
of common stock and warrants
|
|
185,873
|
|
622,275
|
Net cash used in
financing activities
|
|
(1,976,627)
|
|
(4,359,332)
|
|
|
|
|
|
Effect of foreign
currency exchange rate changes on cash
|
|
(16,135)
|
|
1,065,919
|
Net increase in
cash
|
|
4,923,200
|
|
11,438,057
|
|
|
|
|
|
Cash at beginning of
period
|
|
200,451,902
|
|
123,000,338
|
|
|
|
|
|
Cash at end of
period
|
|
205,375,102
|
|
134,438,395
|
|
|
|
|
|
Supplemental disclosure
of cash flow information:
|
|
|
|
|
Interest paid
|
|
131,185
|
|
98,595
|
Income taxes
paid
|
|
2,249,133
|
|
2,572,995
|
SOURCE Fushi Copperweld, Inc.