OSSEN INNOVATION CO., LTD. | |||
(Registrant) | |||
Date: November 16, 2011
|
By:
|
/s/ Wei Hua | |
Name: Wei Hua | |||
Title: Chief Executive Officer |
Exhibit Number
|
Description
|
99.1
|
Press Release of Ossen Innovation Co., Ltd., dated November15, 2011
|
(in millions except EPS)
|
Q3 2011
|
Q3 2010
|
Chg.
|
YTD 2011
|
YTD 2010
|
Chg.
|
Revenue
|
$31.1
|
$30.9
|
1%
|
$91.9
|
$89.6
|
3%
|
Gross Profit
|
$4.2
|
$7.2
|
-41%
|
$20.1
|
$18.8
|
7%
|
Net Income
|
$2.0
|
$4.5
|
-56%
|
$11.5
|
$11.6
|
-1%
|
EPS
|
$0.10
|
$0.30
|
-67%
|
$0.57
|
$0.77
|
-26%
|
Shares Outstanding(1)
|
20.0
|
15.0
|
33%
|
20.0
|
15.0
|
33%
|
Conference Call
|
|
Date:
|
Wednesday, November 16, 2011
|
Time:
|
9:00 am Eastern Time, US
|
Conference Line Dial-In (U.S.):
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+1-718-354-1231
|
International Dial-In:
|
United States: +1-866-519-4004
China, Domestic Mobile: 4006208038
China, Domestic: 8008190121
|
Conference ID:
|
27941910 or “Ossen Innovation Third Quarter 2011 Conference Call”
|
Webcast link:
|
http://ir.osseninnovation.com
|
Replay:
|
Available From 11/16/2011 13:00 ET to 11/23/2011 23:59 ET
Dial In # / US Toll Free 1-866-214-5335
International Dial In # 1-718-354-1232
Passcode: 27941910
|
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 North America
|
|
Ted Haberfield, President
|
|
Phone: +1-760-755-2716
|
|
Email: thaberfield@hcinternational.net
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|
Web: www.mz-ir.com
|
September 30,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
(Unaudited)
|
||||||||
ASSETS
|
||||||||
Current Assets
|
||||||||
Cash and cash equivalents
|
$ | 7,160,291 | $ | 12,322,982 | ||||
Restricted cash
|
15,127,341 | 13,799,018 | ||||||
Notes receivable – bank acceptance notes
|
- | 17,636,928 | ||||||
Accounts receivable, net of allowance for doubtful accounts of $38,572 and $37,347 at September 30, 2011 and December 31,2010, respectively
|
48,992,573 | 13,332,492 | ||||||
Inventories
|
24,129,115 | 27,949,781 | ||||||
Advance to suppliers
|
48,587,162 | 25,072,350 | ||||||
Other current assets
|
448,036 | 3,343,302 | ||||||
Notes receivable from related party – bank acceptance notes
|
- | 3,024,895 | ||||||
Account receivable from related party
|
2,082,056 | 707,487 | ||||||
Total Current Assets
|
146,526,574 | 117,189,235 | ||||||
Property, plant and equipment, net
|
11,305,567 | 12,029,612 | ||||||
Land use rights, net
|
4,375,145 | 4,306,091 | ||||||
Prepayment for plant and equipment
|
7,810,303 | 7,562,237 | ||||||
TOTAL ASSETS
|
$ | 170,017,589 | $ | 141,087,175 |
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
||||||||
Current Liabilities
|
||||||||
Notes payable – bank acceptance notes
|
$ | 28,117,092 | $ | 26,014,096 | ||||
Short-term bank loans
|
44,205,245 | 38,325,414 | ||||||
Accounts payable
|
4,628,338 | 2,493,665 | ||||||
Customer deposits
|
884,221 | 833,768 | ||||||
Income tax payable
|
407,328 | 662,585 | ||||||
Other payables and accrued expenses
|
112,599 | 94,510 | ||||||
Due to related party
|
2,811,709 | - | ||||||
Total Current Liabilities
|
81,166,532 | 68,424,038 | ||||||
TOTAL LIABILITIES
|
81,166,532 | 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 September 30, 2011 and December 31, 2010, respectively
|
200,000 | 200,000 | ||||||
Additional paid-in capital
|
33,858,038 | 33,338,096 | ||||||
Statutory reserve
|
3,847,867 | 2,674,457 | ||||||
Retained earnings
|
36,198,336 | 25,887,113 | ||||||
Accumulated other comprehensive income
|
4,782,215 | 2,192,996 | ||||||
TOTAL SHAREHOLDERS’ EQUITY
|
78,886,456 | 64,292,662 | ||||||
Non-controlling interest
|
9,964,601 | 8,370,475 | ||||||
TOTAL EQUITY
|
88,851,057 | 72,663,137 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
|
$ | 170,017,589 | $ | 141,087,175 |
FOR THE THREE MONTHS ENDED SEPTEMBER 30,
|
FOR THE NINE MONTHS ENDED SEPTEMBER 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
REVENUES
|
$ | 31,084,373 | $ | 30,858,544 | $ | 91,866,308 | $ | 89,567,319 | ||||||||
COST OF GOODS SOLD
|
26,867,212 | 23,696,304 | 71,793,245 | 70,798,025 | ||||||||||||
GROSS PROFIT
|
4,217,161 | 7,162,240 | 20,073,063 | 18,769,294 | ||||||||||||
Operating Expenses:
|
||||||||||||||||
Selling expenses
|
251,721 | 183,924 | 809,683 | 379,630 | ||||||||||||
General and administrative expenses
|
329,795 | 255,938 | 1,507,432 | 788,214 | ||||||||||||
Total Operating Expenses
|
581,516 | 439,862 | 2,317,115 | 1,167,844 | ||||||||||||
INCOME FROM OPERATIONS
|
3,635,645 | 6,722,378 | 17,755,948 | 17,601,450 | ||||||||||||
Other Income (Expenses):
|
||||||||||||||||
Financial expenses, net
|
(1,003,853 | ) | (597,761 | ) | (2,611,774 | ) | (1,667,420 | ) | ||||||||
Other income, net
|
15,006 | 56,660 | 85,692 | 153,380 | ||||||||||||
INCOME BEFORE INCOME TAXES
|
2,646,798 | 6,181,277 | 15,229,866 | 16,087,410 | ||||||||||||
INCOME TAXES
|
(374,377 | ) | (829,443 | ) | (2,151,107 | ) | (2,200,041 | ) | ||||||||
NET INCOME
|
2,272,421 | 5,351,834 | 13,078,759 | 13,887,369 | ||||||||||||
LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST
|
272,679 | 854,324 | 1,594,126 | 2,284,353 | ||||||||||||
NET INCOME ATTRIBUTABLE TO OSSEN INNOVATION CO.,LTD
AND SUBSIDIARIES
|
1,999,742 | 4,497,510 | 11,484,633 | 11,603,016 | ||||||||||||
OTHER COMPREHENSIVE INCOME
|
||||||||||||||||
Foreign currency translation gain, net of tax
|
791,458 | 546,806 | 2,589,219 | 664,342 | ||||||||||||
TOTAL OTHER COMPREHENSIVE INCOME
|
791,458 | 546,806 | 2,589,219 | 664,342 | ||||||||||||
COMPREHENSIVE INCOME
|
2,791,200 | 5,044,316 | 14,073,852 | 12,267,358 | ||||||||||||
EARNINGS PER ORDINARY SHARE
Basic and diluted
|
$ | 0.10 | $ | 0.30 | $ | 0.57 | $ | 0.77 | ||||||||
WEIGHTED AVERAGE ORDINARY SHARES OUTSTANDING
Basic and diluted
|
$ | 20,000,000 | $ | 15,000,000 | $ | 20,000,000 | $ | 15,000,000 |
Nine Months Ended September 30,
|
||||||||
2011
|
2010
|
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net income
|
$ | 13,078,759 | $ | 13,887,369 | ||||
Adjustments to reconcile net income to net cash provided by/ (used in) operating activities:
|
||||||||
Depreciation and amortization
|
1,566,548 | 1,191,874 | ||||||
Share-based compensation expense
|
78,987 | - | ||||||
Changes in operating assets and liabilities:
|
||||||||
(Increase) Decrease In:
|
||||||||
Accounts receivable
|
(35,660,081 | ) | (4,474,523 | ) | ||||
Inventories
|
3,820,667 | (2,707,409 | ) | |||||
Advance to suppliers
|
(23,514,812 | ) | (13,158,315 | ) | ||||
Other current assets
|
2,895,266 | 234,030 | ||||||
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
|
- | (9,416,442 | ) | |||||
Account receivable from related party
|
(1,374,570 | ) | (13,763,159 | ) | ||||
Increase (Decrease) In:
|
||||||||
Accounts payable
|
2,134,674 | 4,887,549 | ||||||
Customer deposits
|
50,453 | 58,379 | ||||||
Income tax payable
|
(255,258 | ) | 694,671 | |||||
Other payables and accrued expenses
|
18,089 | 352,877 | ||||||
Due to related party
|
2,811,709 | - | ||||||
Net cash used in operating activities
|
(13,687,746 | ) | (20,234,657 | ) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Purchases of plant and equipment
|
(154,820 | ) | (98,911 | ) | ||||
Net cash used in investing activities
|
(154,820 | ) | (98,911 | ) |
Nine Months Ended September 30,
|
||||||||
2011
|
2010
|
|||||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
(Increase)/Decrease in restricted cash
|
(1,328,323 | ) | (2,442,459 | ) | ||||
Proceeds from short-term bank loans
|
57,482,746 | 46,283,696 | ||||||
Repayments of short-term bank loans
|
(51,602,914 | ) | (32,368,643 | ) | ||||
Proceeds from notes payable-bank acceptance notes
|
34,833,953 | 35,839,148 | ||||||
Repayment of notes payable-bank acceptance notes
|
(32,730,957 | ) | (30,950,222 | ) | ||||
.IPO compensation
|
440,955 | - | ||||||
Net cash provided by financing activities
|
7,095,460 | 16,361,520 | ||||||
DECREASE IN CASH AND CASH EQUIVALENTS
|
(6,747,106 | ) | (3,972,048 | ) | ||||
Effect of exchange rate changes on cash
|
1,584,415 | 490,614 | ||||||
Cash and cash equivalents at beginning of period
|
12,322,982 | 8,409,467 | ||||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD
|
$ | 7,160,291 | $ | 4,928,033 | ||||
SUPPLEMENTARY CASH FLOW INFORMATION
|
||||||||
Cash paid during the periods:
|
||||||||
Income taxes paid
|
$ | 2,424,113 | $ | 1,579,104 | ||||
Interest paid
|
$ | 2,177,824 | $ | 1,363,682 | ||||
Non-cash transactions:
|
||||||||
Appropriation to statutory reserve
|
$ | 1,173,410 | $ | 1,160,331 |
Three Months Ended September 30,
|
||||||||
2011
|
2010
|
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net income
|
$ | 2,272,421 | $ | 5,351,834 | ||||
Adjustments to reconcile net income to net cash provided by/ (used in) operating activities:
|
||||||||
Depreciation and amortization
|
678,860 | 464,281 | ||||||
Share-based compensation expense
|
26,618 | - | ||||||
Changes in operating assets and liabilities:
|
||||||||
(Increase) Decrease In:
|
||||||||
Accounts receivable
|
(17,262,055 | ) | 14,150,210 | |||||
Inventories
|
(3,870,017 | ) | 2,188,821 | |||||
Advance to suppliers
|
23,912,632 | (15,049,191 | ) | |||||
Other current assets
|
(307,780 | ) | (64,407 | ) | ||||
Due from and advance to related party
|
- | (1,105,099 | ) | |||||
Account receivable from related party
|
(1,025,603 | ) | (13,763,159 | ) | ||||
Increase (Decrease) In:
|
||||||||
Accounts payable
|
4,103,291 | 4,397,005 | ||||||
Customer deposits
|
(5,365,525 | ) | (1,182,695 | ) | ||||
Income tax payable
|
(331,398 | ) | (83,214 | ) | ||||
Other payables and accrued expenses
|
(161,436 | ) | 372,607 | |||||
Due to related party
|
2,811,709 | - | ||||||
Net cash provided by (used in) operating activities
|
5,481,717 | (4,323,007 | ) | |||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Purchases of plant and equipment
|
(27,360 | ) | (2,025 | ) | ||||
Net cash used in investing activities
|
(27,360 | ) | (2,025 | ) |
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
(Increase)/Decrease in restricted cash
|
(1,526,634 | ) | (2,116,967 | ) | ||||
Proceeds from short-term bank loans
|
18,497,612 | 16,468,462 | ||||||
Repayments of short-term bank loans
|
(23,642,600 | ) | (11,480,682 | ) | ||||
Proceeds from notes payable-bank acceptance notes
|
8,843,854 | 13,808,187 | ||||||
Repayment of notes payable-bank acceptance notes
|
(6,716,861 | ) | (11,205,297 | ) | ||||
.IPO compensation
|
- | |||||||
Net cash provided by (used in) financing activities
|
(4,544,629 | ) | 5,473,703 | |||||
DECREASE IN CASH AND CASH EQUIVALENTS
|
909,728 | 1,148,671 | ||||||
Effect of exchange rate changes on cash
|
485,796 | 319,019 | ||||||
Cash and cash equivalents at beginning of period
|
5,764,767 | 3,460,342 | ||||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD
|
$ | 7,160,291 | $ | 4,928,032 | ||||
SUPPLEMENTARY CASH FLOW INFORMATION
|
||||||||
Cash paid during the periods:
|
||||||||
Income taxes paid
|
$ | 707,589 | $ | 786,330 | ||||
Interest paid
|
$ | 841,232 | $ | 517,068 | ||||
Non-cash transactions:
|
||||||||
Appropriation to statutory reserve
|
$ | 230,030 | $ | 204,577 |
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
|
September 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 |
September 30,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
(unaudited)
|
||||||||
Account receivable from related party:
|
||||||||
Zhaoyang
|
$ | 1,136,439 | $ | - | ||||
Shanghai Pujiang
|
945,617 | 707,487 | ||||||
$ | 2,082,056 | $ | 707,487 |
September 30,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
(unaudited)
|
||||||||
Due to related party:
|
||||||||
SZS
|
$ | 2,811,709 | $ | - |