Unassociated Document

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.”

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.

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.

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.

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 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.

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

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

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.

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

	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

	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

	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

	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

	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	)

	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

	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

	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

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.

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

(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	%