UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF THE
SECURITIES EXCHANGE ACT OF 1934
For the month of June 2014
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 offices)
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 ¨
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): ____
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): ____
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 ¨ 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: June 30, 2014
| By: | /s/ Wei Hua | |
| Name: Wei Hua | ||
| Title: Chief Executive Officer |
EXHIBIT INDEX
|
Exhibit |
Description |
| 99.1 | Press Release of Ossen Innovation Co., Ltd., dated June 27, 2014 |
Ossen Innovation Announces First Quarter 2014 Financial Results
To Host Conference call at 8:30 am ET on June 30, 2014
SHANGHAI, June 27, 2014 /PRNewswire-FirstCall/ -- Ossen Innovation Co., Ltd. ("Ossen" or the "Company") (Nasdaq: OSN), a China-based manufacturer of an array of plain surface, rare earth and zinc coated pre-stressed steel materials, today announced its financial results for the three months ended March 31, 2014.
“I am pleased with Ossen’s significant increase in revenue during this quarter” said Dr. Liang Tang, Chairman of Ossen Innovation. “We experienced year over year demand growth for our higher quality and more durable rare earth coated products. Although our margin was impacted by price competition, I am pleased to announce the addition of several new customers who placed large orders in the first quarter of 2014. We are striving to add more customers throughout the year, who continue to be drawn to our products’ superior performance, durability and cost effectiveness, compared to our competitors,” concluded Dr. Tang.
Financial Summary
| (in millions ex- EPS) | Q1 2014 | Q1 2013 | Chg. |
| Revenue | $28.0 | $14.6 | +92% |
| Gross Profit | $2.6 | $1.7 | +56% |
| Net Income* | $0.5 | $0.1 | +550% |
| EPS | $0.02 | $0.004 | +400% |
| Shares Outstanding | 19.9 | 19.9 | 0% |
*Net income attributable to Ossen Innovation Co., Ltd.
First Quarter Ended March 31, 2014 Financial Results
Revenue for the three months ended March 31, 2014 was $28.0 million, up 92% from the same period a year ago. Sales of coated pre-stressed steel materials, including rare earth and zinc coated products, were approximately $26.5 million, up 105.4% compared to approximately $12.9 million in the first quarter of 2013. Sales of plain surface PC strands were $1.5 million for the three months ended March 31, 2014, a decrease of $0.2 million compared to the prior year. The overall increase in revenue was primarily due to increased demand because of our ability to use lower grade raw material for rare earth coated steel products, enabling us to compete on price, as well as the addition of several new customers. The decrease in sales of plain surface products was due to the Company’s strategy to focus more on the sales of rare earth coated products.
Gross profit was $2.6 million, a 56% increase from $1.7 million in the year ago period. Gross margin was 9.4% in the first quarter of 2014, down from 11.6% in the first quarter of 2013. Gross margin was lower primarily due to increased price competition and lower unit pricing of its coated products in the first quarter of 2014, in order to attract new customers.
Selling expenses increased by 146% to $0.1 million due to an increase in sales. General and administrative expenses increased 122% to $1.3 million, primarily due to increased R&D expenses. Operating income was approximately $1.2 million, an increase of 14.4% from the same period a year ago.
Net income attributable to Ossen Innovation Co., Ltd. was $0.5 million in the first quarter of 2014 compared to $0.1 million in the year-ago period. Earnings per share were $0.02 versus $0.00 a year ago. The weighted average diluted shares outstanding were 19.9 million, unchanged from the year-ago period.
Balance Sheet and Cash Flows
Ossen had approximately $26.4 million of cash and restricted cash as of March 31, 2014 compared to $32.9 million at December 31, 2013. Total accounts receivable on March 31, 2014 decreased to $44.2 million from $48.2 million on December 31, 2013. The average accounts receivable days sales outstanding were 142 days for the first quarter of 2014 compared to 152 days for 2013. This decrease was primarily due to improved accounts receivable collection times and increased revenue in the first quarter.The balance of prepayments to suppliers of raw materials was $54.4 million as of March 31, 2014, an increase of $3.8 million compared with December 31, 2013. The increase was mainly due to prepayment for raw materials due to an anticipated increase in future sales. Inventories increased from $18.8 million at December 31, 2013 to $33.9 million at March 31, 2014, primarily due to an increase in raw materials for coated products. Total working capital was $87.1 million at March 31, 2014.
The Company experienced cash outflows from operations of $1.1 million for the three months ended March 31, 2014 as compared to positive cash flows from operations of $9.1 for the same period of 2013. The primary reasons for the cash outflows from operations were an increase in inventories and advances to suppliers, partially offset by an increase in net income and a decrease in accounts receivable.
Cash flow used in financing activities was $0.1 million for the three months ended March 31, 2014 as compared to cash flow used in financing activities of $7.8 million for the same period of 2013. The primary reasons for the decrease in cash used in financing activities was a decrease in the repayment of short-term bank loans and an increase in proceeds from short-term bank loans.
Business Updates and Outlook
On June 16, China’s central bank made a targeted cut in the portion of deposits that banks need to keep on reserve. It trimmed the rate by half a percentage point for banks that lend to the rural sector and smaller companies. It is consistent with the Chinese central bank’s objective of avoiding big stimulus that had been used in the past. We believe it is a positive signal in support of the economy and we expect that infrastructure spending will be selectively targeted at developing regions in Central and Western China.
The CPC Committee Political Bureau held a meeting on April 25 and discussed the current Chinese economic situation and development. The meeting announced that the government will accelerate the development of railroad in Central and Western China. In addition, currently a number of Development and Reform Commission departments in Western provinces are studying a number of new high speed rail projects, including high speed rail projects from Guiyang to Zhengzhou, from Guiyang to Nanning, from Lanzhou to Yinchuan, from Lanzhou to Xi'an, and from Lanzhou to Taiyuan. We expect these projects should create additional bidding opportunities for us if they are successfully launched by the government.
We note several positive developments in the first part of 2014. Specifically:
| · | In February 2014, Ossen was awarded the national title of 'outstanding foreign-invested enterprise.' This prestigious recognition is awarded by the China Association of Enterprises with Foreign Investment, a division of the Ministry of Commerce of the PRC. Separately, Ossen's two new products, 15.24 mm 1860 MPa coated steel strand and 7.0 mm 1670 MPa high performance zinc coated steel wire, received key new products identification from the Jiangxi Provincial Department of Science and Technology. |
| · | In March 2014, we announced that the Company’s Jiujiang subsidiary, Ossen (Jiujiang) Steel Wire & Cable Co., Ltd., was recently honored as an ‘Innovative Enterprise’ in Jiangxi province. This recognition is awarded by the Jiangxi provincial government. In addition, Ossen (Jiujiang) Steel Wire & Cable Co., Ltd. was recognized as a ‘First Class Export Enterprise’ in Jiangxi province by the Jiangxi government agency. |
| · | In June 2014, we received new sales contracts to supply our coated steel wire for cables used for the construction of five bridges in South Korea, including the Saecheonnyeon bridge, Jangja bridge, Bubal bridge, Daedeok 2nd bridge and Gujeuk bridge. Product delivery is expected in June 2014. |
| · | In June 2014, Ossen (Jiujiang) Steel Wire & Cable Co., Ltd. applied for Major Scientific and Technological Innovation Title in Jiujiang City for the year 2014. It is to develop 5mm series zinc-aluminum rare earth coated bridge cables. Currently Science and Technology Bureau of Jiujiang City has recommended this project to Science and Technology Department of Jiangxi province. If this project is recognized as Major Scientific and Technological Innovation by the Science and Technology Department of Jiangxi province, Ossen (Jiujiang) will receive tax incentives and subsidy from the government. |
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 "Ossen Innovation First Quarter 2014 Conference Call” or be prepared to utilize the conference ID.
| Conference Call | Ossen Innovation First Quarter 2014 Conference Call |
| Date: | Monday, June 30, 2014 |
| Time: | 8:30 am Eastern Time, US |
| Conference Line Dial-In (U.S.): | +1-845-675-0437 |
| International Toll Free: | United States: +1-866-519-4004 China, Domestic Mobile: 4006208038 China, Domestic: 8008190121 |
| Conference ID: | 64623766 |
Please dial in at least 10 minutes before the call to ensure timely participation. A playback will be available through July 8, 2014. To listen, please call +1-855-452-5696 within the United States or +1-646-254-3697 if calling internationally. Utilize the pass code 64623766 for the replay.
This call is being webcast and can be accessed by clicking on this link: http://www.media-server.com/m/p/rxairs2g
About Ossen Innovation Co., Ltd.
Ossen Innovation Co., Ltd. manufactures and sells a wide variety of plain surface pre-stressed steel materials and rare earth coated and zinc coated pre-stressed steel materials. The Company's products are mainly used in the construction of bridges, as well as in highways 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, as amended. 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.
Feng Peng, Chief Financial Officer
Email: feng.peng@ossencorp.com
Phone: +86 (21) 6888-8886
Web: www.osseninnovation.com
Investor Relations
FCC Group LLC
Phone: +1-347-850-7098
Email: ir@ossencorp.com
OSSEN INNOVATION CO., LTD AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
| March 31, | December 31, | |||||||
| 2014 | 2013 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | 762,242 | $ | 1,139,450 | ||||
| Restricted cash | 25,683,669 | 31,783,670 | ||||||
| Notes receivable – bank acceptance notes | 4,867,601 | 2,421,581 | ||||||
| Accounts receivable, net of allowance for doubtful accounts of $1,251,115 and $1,336,177 at March 31, 2014 and December 31,2013, respectively | 44,208,748 | 48,200,076 | ||||||
| Inventories | 33,863,234 | 18,750,770 | ||||||
| Advance to suppliers | 54,426,353 | 50,614,815 | ||||||
| Other current assets | 2,633,153 | 3,447,886 | ||||||
| Notes receivable from related party – bank acceptance notes | - | 12,915,099 | ||||||
| Total Current Assets | 166,445,000 | 169,273,347 | ||||||
| Property, plant and equipment, net | 8,141,594 | 8,458,121 | ||||||
| Land use rights, net | 4,294,538 | 4,297,849 | ||||||
| TOTAL ASSETS | $ | 178,881,132 | $ | 182,029,317 | ||||
OSSEN INNOVATION CO., LTD AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
| March 31, | December 31, | |||||||
| 2014 | 2013 | |||||||
| (Unaudited) | ||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current Liabilities | ||||||||
| Notes payable – bank acceptance notes | $ | 43,459,566 | $ | 50,990,427 | ||||
| Short-term bank loans | 29,043,354 | 27,283,147 | ||||||
| Accounts payable | 347,889 | 503,944 | ||||||
| Customer deposits | 4,970,260 | 2,908,271 | ||||||
| Income tax payable | 409,198 | 232,541 | ||||||
| Other payables and accrued expenses | 937,303 | 1,549,748 | ||||||
| Due to related party | 95,633 | 16,911 | ||||||
| Due to shareholder | 100,000 | 50,000 | ||||||
| Total Current Liabilities | 79,363,203 | 83,534,989 | ||||||
| TOTAL LIABILITIES | 79,363,203 | 83,534,989 | ||||||
| EQUITY | ||||||||
| Shareholders' Equity | ||||||||
| Ordinary shares, $0.01 par value: 100,000,000 shares authorized, 20,000,000 shares issued; 19,901,959 shares outstanding as of March 31, 2014 and December 31, 2013, respectively | 200,000 | 200,000 | ||||||
| Additional paid-in capital | 33,971,455 | 33,971,455 | ||||||
| Statutory reserve | 4,680,101 | 4,615,699 | ||||||
| Retained earnings | 41,936,309 | 41,518,259 | ||||||
| Treasury stock, at cost: 98,041 shares as of March 31, 2014 and December 31, 2013, respectively | (96,608 | ) | (96,608 | ) | ||||
| Accumulated other comprehensive income | 8,141,882 | 7,646,562 | ||||||
| TOTAL SHAREHOLDERS’ EQUITY | 88,833,139 | 87,855,367 | ||||||
| Non-controlling interest | 10,684,790 | 10,638,961 | ||||||
| TOTAL EQUITY | 99,517,929 | 98,494,328 | ||||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 178,881,132 | $ | 182,029,317 | ||||
OSSEN INNOVATION CO., LTD AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)
| Three Months Ended March 31, | ||||||||
| 2014 | 2013 | |||||||
| REVEUNUES | $ | 28,036,908 | $ | 14,592,753 | ||||
| COST OF GOODS SOLD | 25,392,916 | 12,900,737 | ||||||
| GROSS PROFIT | 2,643,992 | 1,692,016 | ||||||
| Selling expenses | 108,438 | 44,075 | ||||||
| General and administrative expenses | 1,339,531 | 602,707 | ||||||
| Total Operating Expenses | 1,447,969 | 646,782 | ||||||
| INCOME FROM OPERATIONS | 1,196,023 | 1,045,234 | ||||||
| Financial expenses, net | (700,735 | ) | (904,173 | ) | ||||
| Other income, net | 168,265 | 44,391 | ||||||
| INCOME BEFORE INCOME TAX | 663,553 | 185,452 | ||||||
| INCOME TAX | (135,272 | ) | (85,270 | ) | ||||
| NET INCOME | 528,281 | 100,182 | ||||||
| LESS: NET INCOME ATTRIBUTABLE TO NON-CONTROLLING INTEREST | 45,829 | 26,143 | ||||||
| NET INCOME ATTRIBUTABLE TO CONTROLLING INTEREST | 482,452 | 74,039 | ||||||
| OTHER COMPREHENSIVE INCOME | ||||||||
| Foreign currency translation gain | 495,320 | 510,447 | ||||||
| TOTAL OTHER COMPREHENSIVE INCOME | 495,320 | 510,447 | ||||||
| COMPREHENSIVE INCOME | $ | 977,772 | $ | 584,486 | ||||
| EARNINGS PER ORDINARY SHARE | ||||||||
| Basic and diluted | $ | 0.02 | $ | 0.004 | ||||
| WEIGHTED AVERAGE ORDINARY SHARES OUTSTANDING | ||||||||
| Basic and diluted | 19,901,959 | 19,901,959 | ||||||
OSSEN INNOVATION CO., LTD AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDER’S EQUITY
(Unaudited)
| Total Ossen Innovation Co., Ltd. Shareholders’ Equity | ||||||||||||||||||||||||||||||||||||||||
| Accumulated | ||||||||||||||||||||||||||||||||||||||||
| Ordinary Shares | Additional | Other | Non | |||||||||||||||||||||||||||||||||||||
| $0.01 Par Value | Treasury Stock | Paid-in | Comprehensive | Statutory | Retained | Controlling | ||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Income | Reserve | Earnings | Interest | Total | |||||||||||||||||||||||||||||||
| Balance at December 31, 2013 | 20,000,000 | 200,000 | (98,041 | ) | (96,608 | ) | 33,971,455 | 7,646,562 | 4,615,699 | 41,518,259 | 10,638,961 | 98,494,328 | ||||||||||||||||||||||||||||
| Net income | - | - | - | - | - | - | - | 482,452 | 45,829 | 528,281 | ||||||||||||||||||||||||||||||
| Transfer to statutory reserve | - | - | - | - | - | - | 64,402 | (64,402 | ) | - | - | |||||||||||||||||||||||||||||
| Foreign currency translation adjustment | - | - | - | - | - | 495,320 | - | - | - | 495,320 | ||||||||||||||||||||||||||||||
| Balance at March 31, 2014 | 20,000,000 | $ | 200,000 | (98,041 | ) | $ | (96,608 | ) | $ | 33,971,455 | $ | 8,141,882 | $ | 4,680,101 | $ | 41,936,309 | $ | 10,684,790 | $ | 99,517,929 | ||||||||||||||||||||
OSSEN INNOVATION CO., LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| Three Months Ended March 31, | ||||||||
| 2014 | 2013 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net income | $ | 528,281 | $ | 100,182 | ||||
| Adjustments to reconcile net income to net cash provided by/ (used in) operating activities: | ||||||||
| Depreciation and amortization | 388,213 | 384,490 | ||||||
| Share-based compensation expense | - | |||||||
| Changes in operating assets and liabilities: | ||||||||
| (Increase) Decrease In: | ||||||||
| Accounts receivable | 3,991,328 | 7,598,791 | ||||||
| Inventories | (15,112,464 | ) | (6,346,785 | ) | ||||
| Advance to suppliers | (3,811,538 | ) | 5,061,431 | |||||
| Other current assets | 814,733 | 39,668 | ||||||
| Notes receivable - bank acceptance notes | (2,446,020 | ) | 394,079 | |||||
| Notes receivable from related party - bank acceptance notes | 12,915,099 | 1,830,208 | ||||||
| Accounts receivable from related party | - | (2,625,082 | ) | |||||
| Increase (Decrease) In: | ||||||||
| Accounts payable | (156,056 | ) | 25,822 | |||||
| Customer deposits | 2,061,988 | 3,259,299 | ||||||
| Income tax payable | 176,656 | (337,907 | ) | |||||
| Other payables and accrued expenses | (612,444 | ) | (297,020 | ) | ||||
| Due to related party | 78,722 | - | ||||||
| Due to shareholder | 50,000 | - | ||||||
| Net cash provided by/(used in) operating activities | (1,133,502 | ) | 9,087,176 | |||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Purchases of plant and equipment | (1,150 | ) | (12,671 | ) | ||||
| Net cash used in investing activities | (1,150 | ) | (12,671 | ) | ||||
OSSEN INNOVATION CO., LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| Three Months Ended March 31, | ||||||||
| 2014 | 2013 | |||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Decrease in restricted cash | 6,100,001 | 6,561,343 | ||||||
| Proceeds from short-term bank loans | 8,336,466 | 6,049,607 | ||||||
| Repayments of short-term bank loans | (6,701,865 | ) | (12,177,826 | ) | ||||
| Proceeds from notes payable-bank acceptance notes | 15,365,252 | 14,487,216 | ||||||
| Repayment of notes payable-bank acceptance notes | (23,211,338 | ) | (22,765,625 | ) | ||||
| Net cash used in financing activities | (111,484 | ) | (7,845,285 | ) | ||||
| INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS | (1,246,136 | ) | 1,229,220 | |||||
| Effect of exchange rate changes on cash | 868,927 | 879,543 | ||||||
| Cash and cash equivalents at beginning of period | 1,139,451 | 1,996,764 | ||||||
| CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ | 762,242 | $ | 4,105,527 | ||||
| SUPPLEMENTARY CASH FLOW INFORMATION | ||||||||
| Cash paid during the periods: | ||||||||
| Income taxes paid | $ | 241,679 | $ | 389,179 | ||||
| Interest paid | $ | 572,627 | $ | 899,973 | ||||
| Non-cash transactions: | ||||||||
| Appropriation to statutory reserve | $ | 64,402 | $ | 45,706 | ||||