0001144204-11-046300.txt : 20110815 0001144204-11-046300.hdr.sgml : 20110815 20110812185853 ACCESSION NUMBER: 0001144204-11-046300 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20110812 FILED AS OF DATE: 20110815 DATE AS OF CHANGE: 20110812 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Ossen Innovation Co. Ltd. CENTRAL INDEX KEY: 0001485538 STANDARD INDUSTRIAL CLASSIFICATION: STEEL WORKS, BLAST FURNACES ROLLING MILLS (COKE OVENS) [3312] IRS NUMBER: 000000000 STATE OF INCORPORATION: D8 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 6-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-34999 FILM NUMBER: 111032733 BUSINESS ADDRESS: STREET 1: 518 SHANGCHENG ROAD STREET 2: FLOOR 17 CITY: SHANGHAI STATE: F4 ZIP: 200120 BUSINESS PHONE: 86 (21) 6888-8886 MAIL ADDRESS: STREET 1: 518 SHANGCHENG ROAD STREET 2: FLOOR 17 CITY: SHANGHAI STATE: F4 ZIP: 200120 FORMER COMPANY: FORMER CONFORMED NAME: Ultra Glory International Ltd. DATE OF NAME CHANGE: 20100225 6-K 1 v232008_6k.htm Unassociated Document
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
Form 6-K

REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
 
For the month of August 2011
 
Commission File Number 333-168496
 
  
OSSEN INNOVATION CO., LTD.
(Translation of registrant’s name into English)

518 SHANGCHENG ROAD, FLOOR 17, SHANGHAI, 200120,
PEOPLE’S REPUBLIC OF CHINA
(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F x   Form 40-F o                     

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): o

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): o

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes o   No x
 
If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):  82-_________________.
 
 
 
 
 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 
OSSEN INNOVATION CO., LTD.
  
 
(Registrant)
  
       
Date: August 12, 2011
By:
/s/ Wei Hua  
    Name: Wei Hua  
    Title:   Chief Executive Officer  
       
 
 
2
 
 
EXHIBIT INDEX
 
Exhibit Number 
Description
 
99.1
Press Release of Ossen Innovation Co., Ltd., dated August 11, 2011
 
99.2
Supplemental Press Release of Ossen Innovation Co., Ltd., dated August 12, 2011
 
 
3
 
EX-99.1 2 v232008_ex99-1.htm Unassociated Document
 
Ossen Innovation Announces First Half 2011 Financial Results;
Earnings Conference Call Scheduled for Friday, August 12, 2011 at 9:00 am ET


 
·
Net revenue increased 4% to $60.8 million in first six months of 2011

 
·
Gross profit grew 37% to $15.9 million; gross margin expanded 632 bps to 26.1%

 
·
Net income up 34% to $9.5 million in the first six months of 2011

 
·
Reaffirmed FY 2011 Guidance: $138.5-$144.6 million revenue; $18.0-$18.8 million net income; and $0.90-$0.94 EPS
 
SHANGHAI, August 12, 2011  -- 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 announced financial results for the six months ended June 30, 2011.

"2011 is a pivotal year for Ossen,” stated Dr. Liang Tang, Chairman of Ossen Innovation. “We are running at full capacity this year, which positively impacted our growth, margins and profitability. After completing our initial public offering at the end of 2010, we are preparing to add 30,000 tons of additional coated products capacity, which we expect will come online during the first half of 2012. As Chinese government continues to push forward on multiple high profile bridge projects around the country, we are well positioned to leverage on our strong competitive advantage in this market.”

Financial Summary

(in millions except EPS)
     1H 2011       1H 2010    
Chg.
  
Revenue
   $ 60.8     $ 58.7       4 %
Gross Profit
   $ 15.9     $ 11.6       37 %
Net Income
   $ 9.5     $ 7.1       34 %
EPS
   $ 0.47     $ 0.47       -  
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.

 
 
 

First Half 2011 Financial Results

Revenue for the first half ended June 30, 2011 was $60.8 million, with $37.8 million or 62% generated from the sale of coated pre-stressed steel materials. This represented an increase of $4.4 million or 13% over the $33.4 million in sales of coated pre-stressed steel products during the same period of 2010.  Sales of rare earth coated products increased 7% to $34.1 million.
 
   
Six months ended June 30
        
    1H 2011     1H 2010        
   
Revenue ($)
    
% of Total Revenue
    
Revenue ($)
    
% of Total Revenue
    
Change
from 2010 to 2011
  
Products:
                                  
Plain surface PC strands
   $ 18,018,742       30 %   $ 18,004,460       31 %     0 %
Zinc coated PC wires and PC strands
   $ 3,720,377       6 %   $ 1,516,857       3 %     145 %
Stabilized PC wires
   $ 4,913,533       8 %   $ 7,261,189       12 %     -32 %
Rare earth coated PC wires and PC strands
   $ 34,129,283       56 %   $ 31,926,269       54 %     7 %
                                         
Total
   $ 60,781,935             $ 58,708,775                  
 
Gross profit increased from $11.6 million in the first half of 2010 to $15.9 million, a 37% increase. This increase resulted from our increased revenues, discounts on raw material purchases due to a significant increase in advance payments to suppliers, and a shift in product mix, with a greater portion of sales derived from higher margin coated products.  Gross margin expanded from 19.8% to 26.1% as a result of higher contribution from higher-margin coated products, as well as improved overall pricing of raw materials. Coated pre-stressed steel wires and strands on average have generated a gross margin of 28.5% as compared to roughly 22.1% for plain surface products.

Selling expenses increased from $0.2 million to $0.6 million due to higher salaries, marketing and transportation costs. General and administrative expenses increased from $0.5 million to $1.2 million due to costs related to our being a public company.  Operating income grew 30% to $14.1 million in the six months ended June 30, 2011.  Operating margins were 23.2% in the first half of 2011 compared to 18.5% in the same period a year ago.

Net income attributable to controlling interest increased 34% to $9.5 million in the first half of 2011 from $7.1 million in the year-ago period. Earnings per share were $0.47 for both periods, reflecting an increase of 5 million shares outstanding year-over-year as a result of the December 2010 IPO.

Balance Sheet and Cash Flows

Ossen had approximately $19.3 million of cash and restricted cash at June 30, 2011 compared to $26.1 million at December 31, 2010. Total accounts receivable and notes receivable increased from $31.0 million to $31.7 million as of June 30, 2011. The average accounts receivable days sales outstanding were 68 days in the first six months of 2011.
 
 
2
 

In the first six months of 2011, the Company had a net cash outflow from operations of approximately $19.1 million. Inventories decreased by approximately $7.7 million. Total advance to suppliers increased to $72.5 million in anticipation of higher sales and as a result of the Company’s ability to obtain additional short term working capital loans from local banks.

The Company raised approximately $22 million from its IPO in December 2010. The funds are being used to fund its 30,000-ton rare earth coated production facility expansion. Through June 30, 2011, Ossen has spent $7.7 million for equipment purchases related to this project.

Financial Outlook for 2011

Management has reiterated its financial forecast for fiscal 2011 as follows:

Revenue:
$138.5 million to $144.6 million
Net Income:
$18.0 to $18.8 million
EPS:
$0.90 to $0.94

Business Updates

Ossen continues to expand its customer base of domestic and international customers. As of the date of this press release, the Company had approximately 126 customers in 25 provinces and five countries, including South Africa, New Zealand, The Philippines, Papua New Guinea and Singapore.

The outlook for new orders remains healthy. Ossen is currently bidding for several bridge and other infrastructure contracts for delivery in 2012.

The Company remains on track and on budget with its 30,000-ton rare earth coated production facility expansion by the first half of 2012. This project, with an estimated cost of approximately $22 million, will increase Ossen’s rare earth coated production capacity by approximately 60% to 80,000 tons per year.
 
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 " Interim 2011 Ossen Innovation Co Ltd Earnings Conference Call” or be prepared to utilize the conference ID.
 
Conference Call
  
   
Date:
Friday, August 12, 2011
   
Time:
9:00 am Eastern Time, US
   
Conference Line Dial-In (U.S.):
+1-800-599-9829
 
 
3
 
 
International Dial-In:
+1-617-847-8703
   
Asia Dial-In:
South China toll free / China Telecom - 10 800 130 0399
 
North China toll free / China Telecom - 10 800 152 1490
 
South China toll free / China Netcom - 10 800 852 1490
 
China Toll: 4008811629 / 4008811630
   
Conference ID:
40394378 or “Interim 2011 Ossen Innovation Co Ltd Earnings Conference Call”
   
Webcast link:
http://ir.osseninnovation.com
   
Replay:
Available From 08/12/2011 12:00 PM to 08/19/2011 12:00 PM
 
Dial In # / US Toll Free 1 888 286 8010
 
International Dial In #   1 617 801 6888
 
Passcode:  19866501
 
Please dial in at least 10 minutes before the call to ensure timely participation. The conference call will be live webcast and also archived for 1 year on the Company’s IR website.
 
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.
 
 
4
 
 
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
  
 

 
 
5
 
 
OSSEN INNOVATION CO., LTD AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
 
   
June 30,
    
December 31,
  
   
2011
    
2010
  
   
(Unaudited)
        
ASSETS
            
Current Assets
            
Cash and cash equivalents
   $ 5,764,767     $ 12,322,982  
Restricted cash
     13,600,707       13,799,018  
Notes receivable – bank acceptance notes
     -       17,636,928  
Accounts receivable, net of allowance for doubtful accounts of $38,201 and $37,347 at June 30, 2011 and December 31,2010, respectively
     31,730,518       13,332,492  
Inventories
     20,259,098       27,949,781  
Advance to suppliers
     72,499,794       25,072,350  
Other current assets
     140,255       3,343,302  
Notes receivable from related party – bank acceptance notes
     -       3,024,895  
Account receivable from related party
     1,056,454       707,487  
Total Current Assets
     145,051,593       117,189,235  
Property, plant and equipment, net
     11,744,824       12,029,612  
Land use rights, net
     4,356,880       4,306,091  
Prepayment for plant and equipment
     7,735,148       7,562,237  
TOTAL ASSETS
   $ 168,888,445     $ 141,087,175  

 
6
 
 
OSSEN INNOVATION CO., LTD AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
 
   
June 30,
    
December 31,
  
   
2011
    
2010
  
   
(Unaudited)
        
LIABILITIES AND SHAREHOLDERS’ EQUITY
            
Current Liabilities
            
Notes payable – bank acceptance notes
   $ 25,990,099     $ 26,014,096  
Short-term bank loans
     49,350,232       38,325,414  
Accounts payable
     525,047       2,493,665  
Customer deposits
     6,249,746       833,768  
Income tax payable
     738,726       662,585  
Other payables and accrued expenses
     274,035       94,510  
  Total Current Liabilities
     83,127,885       68,424,038  
TOTAL LIABILITIES
     83,127,885       68,424,038  
           
EQUITY
          
Shareholders' Equity
                
Ordinary shares, $0.01 par value: 100,000,000 shares authorized, 20,000,000 shares issued and outstanding as of June 30, 2011 and December 31, 2010, respectively
     200,000       200,000  
Additional paid-in capital
     33,831,419       33,338,096  
Statutory reserve
     3,644,837       2,674,457  
Retained earnings
     34,401,626       25,887,113  
Accumulated other comprehensive income
     3,990,757       2,192,996  
TOTAL SHAREHOLDERS’ EQUITY
     76,068,639       64,292,662  
Non-controlling interest
     9,691,921       8,370,475  
TOTAL EQUITY
     85,760,560       72,663,137  
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
   $ 168,888,445     $ 141,087,175  
 
 
7
 
 
OSSEN INNOVATION CO., LTD AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)
   
Six Months Ended
 June 30,
  
   
2011
    
2010
  
             
REVEUNUES
   $ 60,781,935     $ 58,708,775  
COST OF GOODS SOLD
     44,926,033       47,101,721  
GROSS PROFIT
     15,855,902       11,607,054  
Selling expenses
     557,961       195,706  
General and administrative expenses
     1,177,638       532,276  
Total Operating Expenses
     1,735,599       727,982  
                 
INCOME FROM OPERATIONS
     14,120,303       10,879,072  
Financial expenses, net
     (1,607,920 )     (1,069,659 )
Other income, net
     70,686       96,720  
INCOME BEFORE INCOME TAX
     12,583,069       9,906,133  
INCOME TAX
     (1,776,730 )     (1,370,598 )
NET INCOME
     10,806,339       8,535,535  
LESS: NET INCOME ATTRIBUTABLE TO NON-CONTROLLING INTEREST
     1,321,446       1,430,029  
NET INCOME ATTRIBUTABLE TO CONTROLLING INTEREST
     9,484,893       7,105,506  
OTHER COMPREHENSIVE INCOME
                
Foreign currency translation gain
     1,797,761       117,535  
TOTAL OTHER COMPREHENSIVE INCOME
     1,797,761       117,535  
COMPREHENSIVE INCOME
   $ 11,282,654     $ 7,223,041  
                 
EARNINGS PER ORDINARY SHARE
                
Basic and diluted
   $ 0.47     $ 0.47  
WEIGHTED AVERAGE ORDINARY SHARES  OUTSTANDING
                
Basic and diluted
     20,000,000       15,000,000  
 
 
8
 
 
OSSEN INNOVATION CO., LTD AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER’S EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 2011 AND 2010
(Unaudited)
 
    
Ossen Innovation Co., Ltd. Shareholders’ Equity
              
                     
Accumulated
                          
   
Ordinary Shares
    
Additional
    
Other
                
Non
        
   
$0.01 Par Value
    
Paid-in
    
Comprehensive
    
Statutory
    
Retained
    
Controlling
        
   
Shares
    
Amount
    
Capital
    
Income
    
Reserve
    
Earnings
    
Interest
    
Total
  
Balance at December 31, 2010
     20,000,000       200,000       33,338,096       2,192,996       2,674,457       25,887,113       8,370,475       72,663,137  
Net income
     -       -       -       -       -       9,484,893       1,321,446       10,806,339  
Transfer to statutory reserve
     -       -       -       -       970,380       (970,380 )     -       -  
IPO expenditure refund
     -       -       440,954       -               -       -       440,954  
Share-based compensation to employee
     -       -       52,369       -       -       -       -       52,369  
Foreign currency translation adjustment
     -       -       -       1,797,761       -       -       -       1,797,761  
Balance at June 30, 2011
     20,000,000     $ 200,000     $ 33,831,419     $ 3,990,757     $ 3,644,837     $ 34,401,626     $ 9,691,921     $ 85,760,560  
 
 
9
 
 
OSSEN INNOVATION CO., LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 
   
Six Months Ended
 June 30,
  
   
2011
    
2010
  
CASH FLOWS FROM OPERATING ACTIVITIES:
            
Net income
   $ 10,806,339     $ 8,535,535  
Adjustments to reconcile net income to net cash provided by/ (used in) operating activities:
                
Depreciation and amortization
     887,688       727,593  
Share-based compensation expense
     52,369       -  
Changes in operating assets and liabilities:
                
(Increase) Decrease In:
                
Accounts receivable
     (18,398,026 )     (18,624,733 )
Inventories
     7,690,684       (4,896,230 )
Advance to suppliers
     (47,427,444 )     1,890,876  
Other current assets
     3,203,047       298,436  
Notes receivable - bank acceptance notes
     17,636,928       150,208  
Notes receivable from related party - bank acceptance notes
     3,024,895       1,828,234  
Due from and advance to related party
     -       (8,311,343 )
Account receivable from related party
     (348,967 )     -  
Increase (Decrease) In:
                
Accounts payable
     (1,968,618 )     490,544  
Customer deposits
     5,415,978       1,241,074  
Income tax payable
     76,140       777,886  
Other payables and accrued expenses
     179,525       (19,731 )
Net cash used in operating activities
     (19,169,462 )     (15,911,651 )
                 
CASH FLOWS FROM INVESTING ACTIVITIES:
                
Purchases of plant and equipment
     (127,460 )     (96,887 )
Net cash used in investing activities
     (127,460 )     (96,887 )

 
10
 
 
OSSEN INNOVATION CO., LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

   
Six Months Ended
 June 30,
  
   
2011
    
2010
  
CASH FLOWS FROM FINANCING ACTIVITIES:
            
(Increase)/Decrease in restricted cash
     198,311       (325,492 )
Proceeds from short-term bank loans
     38,985,133       29,815,234  
Repayments of short-term bank loans
     (27,960,315 )     (20,887,962 )
Proceeds from notes payable-bank acceptance notes
     25,990,099       22,030,961  
Repayment of notes payable-bank acceptance notes
     (26,014,096 )     (19,744,925 )
.IPO expenditure refund
     440,954       -  
Net cash provided by financing activities
     11,640,086       10,887,816  
                 
DECREASE IN CASH AND CASH EQUIVALENTS
     (7,656,836 )     (5,120,722 )
Effect of exchange rate changes on cash
     1,098,621       171,596  
Cash and cash equivalents at beginning of period
     12,322,982       8,409,467  
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
   $ 1,716,523     $ 792,774  
Interest paid
   $ 1,336,592     $ 846,614  
Non-cash transactions:
                
Appropriation to statutory reserve
   $ 970,380     $ 955,754  
 
 
11
 
 
RELATED PARTY TRANSACTIONS

(a)
Names and Relationship of Related Parties:

 
Existing Relationship with the Company
Dr. Tang
  
Chairman and controlling shareholder of the Company
     
Shanghai Zhengfangxing Steel Co., Ltd. (“SZS”)
  
Under common control of Dr. Tang
     
Shanghai Ossen Investment Co., Ltd. (“SOI”)
  
Under common control of Dr. Tang
     
Shanghai Ossen Investment Holdings (Group) Co., Ltd. (“Ossen Shanghai)
  
Dr. Tang is the President
     
Shanghai Zhaoyang New Metal Material Co., Ltd. (“Zhaoyang”)
  
Zhaoyang owns a 30% interest in Ossen Shanghai
     
Shanghai Pujiang Cable Co., Ltd. (“Shanghai Pujiang”)
  
Subsidiary of Ossen Shanghai since September 2010
 
(b)
Summary of Balances with Related Party:
   
June 30,
    
December 31,
  
   
2011
    
2010
  
   
(unaudited)
        
Notes receivable from related party:
            
SZS, due April 20, 2011, subsequently settled on due date
   $ -     $ 1,512,448  
SZS, due February 15, 2011, subsequently settled on due date
     -       1,512,447  
    $ -     $ 3,024,895  

The interest-free, unsecured notes were provided to a related party to assist with their working capital need.

   
June 30,
    
December 31,
  
   
2011
    
2010
  
   
(unaudited)
        
Account receivable from related party:
            
Zhaoyang
   $ 119,936     $ -  
Shanghai Pujiang
     936,518       707,487  
    $ 1,056,454     $ 707,487  

Zhaoyang and Shanghai Pujiang are customers of the Company. For the six months ended June 30, 2011, Zhaoyang and Shanghai Pujiang purchased $5,400,949 and $7,678,450 of products from the Company, respectively. The balance of account receivable from related party arises from the sales of our products to Zhaoyang and Shanghai Pujiang. The balance of account receivable from related party was all collected subsequently.
 
 
12
 
EX-99.2 3 v232008_ex99-2.htm Unassociated Document
 
Ossen Innovation Supplements Its First Half 2011 Results and
Provides First and Second Quarter Results Breakdown

SHANGHAI, August 12, 2011  -- 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
  

 
2
 
 
OSSEN INNOVATION CO., LTD AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

   
March 31,
    
December 31,
  
   
2011
    
2010
  
   
(Unaudited)
        
ASSETS
            
Current Assets
            
Cash and cash equivalents
   $ 4,341,983     $ 12,322,982  
Restricted cash
     9,800,897       13,799,018  
Notes receivable – bank acceptance notes
     1,522,047       17,636,928  
Accounts receivable, net of allowance for doubtful accounts of $37,584 and $37,347 at March 31, 2011 and December 31,2010, respectively
     29,867,084       13,332,492  
Inventories
     18,098,689       27,949,781  
Advance to suppliers
     55,459,065       25,072,350  
Other current assets
     2,757,512       3,343,302  
Notes receivable from related party – bank acceptance notes
     -       3,024,895  
Account receivable from related party
     3,911,917       707,487  
  Total Current Assets
     125,759,194       117,189,235  
Property, plant and equipment, net
     11,773,356       12,029,612  
Land use rights, net
     4,312,903       4,306,091  
Prepayment for plant and equipment
     7,610,234       7,562,237  
TOTAL ASSETS
   $ 149,455,687     $ 141,087,175  

 
3
 

   
March 31,
    
December 31,
  
   
2011
    
2010
  
   
(Unaudited)
        
LIABILITIES AND SHAREHOLDERS’ EQUITY
            
Current Liabilities
            
Notes payable – bank acceptance notes
   $ 19,786,609     $ 26,014,096  
Short-term bank loans
     43,987,137       38,325,414  
Accounts payable
     454,108       2,493,665  
Customer deposits
     2,345,797       833,768  
Income tax payable
     1,180,100       662,585  
Other payables and accrued expenses
     619,987       94,510  
Due to related party
     780,770       -  
Total Current Liabilities
     69,154,508       68,424,038  
TOTAL LIABILITIES
     69,154,508       68,424,038  
           
EQUITY
          
Shareholders' Equity
                
Ordinary shares, $0.01 par value: 100,000,000 shares authorized, 20,000,000 shares issued and outstanding as of March 31, 2011 and December 31, 2010, respectively
     200,000       200,000  
Additional paid-in capital
     33,805,090       33,338,096  
Statutory reserve
     3,263,552       2,674,457  
Retained earnings
     31,171,569       25,887,113  
Accumulated other comprehensive income
     2,672,320       2,192,996  
TOTAL SHAREHOLDERS’ EQUITY
     71,112,531       64,292,662  
Non-controlling interest
     9,188,648       8,370,475  
TOTAL EQUITY
     80,301,179       72,663,137  
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
   $ 149,455,687     $ 141,087,175  
 
 
4
 
 
OSSEN INNOVATION CO., LTD AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)
 
   
Three Months Ended
 March 31,
  
   
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  
 
 
5
 
 
OSSEN INNOVATION CO., LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 
   
Three Months Ended
 March 31,
  
   
2011
    
2010
  
CASH FLOWS FROM OPERATING ACTIVITIES:
            
Net income
   $ 6,691,724     $ 3,964,608  
 Adjustments to reconcile net income to net cash provided by operating 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 )
 
 
6
 
 
   
Three Months Ended
 March 31,
  
   
2011
    
2010
  
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  


 
7
 
 
OSSEN INNOVATION CO., LTD AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)

   
Three Months Ended
 June 30,
  
   
2011
    
2010
  
             
REVEUNUES
   $ 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  

 
8
 
 
OSSEN INNOVATION CO., LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 
   
Three Months Ended
 June 30,
  
   
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 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 )

 
9
 
 
   
Three Months Ended
 June 30,
  
   
2011
    
2010
  
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  

 
10