Fushi Copperweld Announces 2012 First Quarter Results
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.”
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.
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.
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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.