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 December 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: December 29, 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 December 26, 2014 |
Exhibit 99.1
Ossen Innovation Announces Third Quarter 2014 Financial Results
To Host Conference Call at 8:30 am ET on December 29, 2014
SHANGHAI, Dec. 26, 2014 /PRNewswire/ -- 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 quarter ended September 30, 2014.
Dr. Liang Tang, Chairman of Ossen Innovation, commented: "Our business remained challenged on the back of China's GDP growth hitting 5-year low despite stimulus measures by the central government during the third quarter, leading to year-over-year declines in both our revenue and profitability. However, our Rare Earth coated products sales remained strong, growing 7% year-over-year to $24.7 million in the third quarter as we continue to win new contracts and add new customers. Additionally, we used lower grade raw materials for some of our Rare Earth coated products to improve margins without sacrificing product strength or quality. Looking ahead, despite continued economic headwinds, we remain confident in the long-term prospects of our business and believe we are well positioned for an eventual recovery of the steel materials industry."
Three Months Ended September 30, 2014 Financial Results
For the Three Months Ended September 30, | ||||||||||||
($ millions, expect per share data) | 2014 | 2013 | % Change | |||||||||
Revenue | $ | 27.9 | $ | 33.1 | -16 | % | ||||||
Gross profit | $ | 2.4 | $ | 3.9 | -38 | % | ||||||
Gross margin | 8.7 | % | 11.7 | % | -3 | % | ||||||
Operating income | $ | 0.9 | $ | 2.9 | -70 | % | ||||||
Operating margin | 3.1 | % | 8.7 | % | -6 | % | ||||||
Net income attributable to Ossen Innovation | $ | 0.5 | $ | 1.7 | -72 | % | ||||||
EPS | $ | 0.02 | $ | 0.08 | -72 | % |
For the three months ended September 30, 2014, revenue decreased by $5.3 million, or 16%, to $27.9 million from $33.1 million for the same period of last year, mainly due to the weaknesses in both Zinc coated products and plain surface pre-stressed ("PC") strands sales and partially offset by strength in Rare Earth coated products sales. The sales of coated PC steel materials, including Rare Earth and Zinc coated products, decreased by $2.9 million, or 11%, to $24.7 million and accounted for 89% of total sales for the three months ended September 30, 2014. The sales of Rare Earth and Zinc coated products were $24.7 million and nil, respectively, for the three months ended September 30, 2014, compared to $23.0 million and $4.6 million for the same period of last year. Zinc coated products, that didn't contribute any revenue during the third quarter of 2014, are expected to generate revenue in future quarters based on current order trends. The sales of plain surface PC strands also decreased by approximately $2.4 million, or 43%, to $3.1 million and accounted for 11% of total sales for the three months ended September 30, 2014 as a result of declines in both sales volume and average selling price.
Gross profit decreased by $1.5 million, or 38%, to $2.4 million for the three months ended September 30, 2014 from $3.9 million for the same period of last year. Gross margin was 8.7% for the three months ended September 30, 2014, compared to 11.7% for the same period of last year. The decline in gross margin was mainly due to lower average selling price and the lack of sales of higher-margin Zinc coated products in the third quarter of this year.
Selling expenses increased by $0.1 million, or 84%, to approximately $0.3 million for the three months ended September 30, 2014, primarily due to higher transportation cost associated with new overseas' customers and higher commission fees. General and administrative expenses increased by $0.4 million, or 49%, to approximately $1.3 million for the three months ended September 30, 2014 mainly due to a $0.3 million increase in research and development expenses and a $0.1 million increase in bad-debt provision. Operating income and operating margin were $0.9 million and 3.1% for the three months ended September 30, 2014, compared to $2.9 million and 8.7% for the same period of last year, respectively.
After deducting net income attributable to non-controlling interest, net income attributable to Ossen Innovation decreased by $1.2 million, or 72%, to $0.5 million for the three months ended September 30, 2014 from $1.7 million for the same period of last year. Earnings per share, both basic and diluted, was $0.02 for the three months ended September 30, 2014, versus $0.08 for the same period of last year.
Nine Months Ended September 30, 2014 Financial Results
For the Nine Months Ended September 30, | ||||||||||||
($ millions, expect per share data) | 2014 | 2013 | % Change | |||||||||
Revenue | $ | 91.8 | $ | 71.9 | 28 | % | ||||||
Gross profit | $ | 8.8 | $ | 8.5 | 3 | % | ||||||
Gross margin | 9.6 | % | 11.8 | % | -2 | % | ||||||
Operating income | $ | 4.2 | $ | 5.6 | -26 | % | ||||||
Operating margin | 4.6 | % | 7.9 | % | -3 | % | ||||||
Net income attributable to Ossen Innovation | $ | 2.4 | $ | 2.5 | -1 | % | ||||||
EPS | $ | 0.12 | $ | 0.12 | -1 | % |
For the nine months ended September 30, 2014, revenue increased by $19.9 million, or 28%, to $91.8 million from $71.9 million for the same period of last year as sales of plain surface PC strands, Rare Earth and Zinc coated products all grew on a year-over-year basis. The sales of coated PC steel materials, including Rare Earth and Zinc coated products, increased by $19.1 million, or 31%, to $80.9 million and accounted for 88% of total sales for the nine months ended September 30, 2014. The sales of Rare Earth and Zinc coated products were $71.9 million and $9.0 million, respectively, for the nine months ended September 30, 2014, compared to $54.1 million and $7.7 million for the same period of last year. The sales of plain surface PC strands also increased by $0.8 million, or 8%, to $10.9 million and accounted for 12% of total sales for the nine months ended September 30, 2014.
Gross profit increased by $0.3 million, or 3%, to $8.8 million for the nine months ended September 30, 2014 from $8.5 million for the same period of last year. Gross margin was 9.6% for the nine months ended September 30, 2014, compared to 11.8% for the same period of last year. The decline in gross margin was mainly due to a decrease in the average unit selling price in 2014 compared to the prior year period.
Selling expenses increased by $0.1 million, or 29%, to approximately $0.6 million for the nine months ended September 30, 2014. General and administrative expenses increased by $1.6 million, or 68%, to approximately $4.0 million for the nine months ended September 30, 2014 mainly due to increase in research and development expenses. Operating income and operating margin were $4.2 million and 4.6% for the nine months ended September 30, 2014, compared to $5.6 million and 7.9% for the same period of last year, respectively.
After deducting net income attributable to non-controlling interest, net income attributable to Ossen Innovation decreased by $0.1 million, or 1%, to $2.4 million for the nine months ended September 30, 2014 from $2.5 million for the same period of last year. Earnings per share, both basic and diluted, was $0.12 for the nine months ended September 30, 2014, essentially unchanged from the same period of last year.
Balance Sheet and Cash Flows
The Company had approximately $23.1 million of cash and restricted cash as of September 30, 2014, compared to $32.9 million at December 31, 2013. Accounts receivable were $49.3 million as of September 30, 2014, compared to $48.2 million at December 31, 2013. The days sales of outstanding were 154 days for the three months ended September 30, 2014, compared to 150 days for the year of 2013. The balance of prepayment to suppliers for raw materials totaled $43.3 million as of September 30, 2014, compared to $50.6 million at December 31, 2013. The Company had inventories of $24.1 million as of September 30, 2014, compared to $18.8 million at the end of last year. Total working capital was $98.2 million as of September 30, 2014, compared to $85.7 million at December 31, 2013.
Net cash provided by operating activities was $7.5 million for the nine months ended September 30, 2014, compared to $18.0 million for the same period of last year. Net cash used in investing activities was $7.8 million for the nine months ended September 30, 2014, compared to $14,806 for the same period of last year. Net cash provided by financing activities was $1.4 million for the nine months ended September 30, 2014, compared to net cash used in financing activities of $21.9 million for the same period of last year. The Company's 81% owned subsidiary in Ma'anshan, Ossen Innovation Materials Co., Ltd. ("Ossen Materials") completed a private placement of RMB 100 million (approximately $16.2 million) in aggregate principal amount of bonds to certain accredited investors in China (the "Offering") and received net proceeds of $15.4 million for the purpose to retire it's regular bank loans during the third quarter of 2014. The bonds bear a fixed interest rate of 10.75 per cent per annum, payable annually in arrears, and mature on September 2, 2016. China-based GuoYuan Securities Co., Ltd. acted as sole placement agent for the Offering.
Recent Development
On December 1, 2014, the Company announced that it had been awarded approximately $11.4 million contracts to supply its PC strands/wires, both plain surface and coated, for the construction of three bridges in Jiaozuo, Henan Province, Ji'an, Jiangxi Province, and Zhaoqing, Guangdong Province. The constructions of these bridges are expected to last over a year with product delivery to start in December 2014.
On November 25, 2014, our chairman, Dr. Tang, was recognized as one of the national winners of "National Outstanding Contributors" at the Fourth National Outstanding Contributors Awards Ceremony. Sponsored by four national ministries, the National Outstanding Contributors Award is a flagship national award given every other year to individuals who have made significant contributions to the society.
On October 9, 2014, the Company provided an update on its supply contract to provide 5,000 tons of plain surface products to the 205 National Highway reconstruction project in Anhui Province (the "Project"). The Project, which was originally secured in December 2013 and subsequently suspended due to the delay of a geological survey, had resumed with the delivery of our plain surface products to commence in late 2014 or early 2015.
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 Third Quarter 2014 Conference Call" or be prepared to utilize the conference ID.
Conference Call | Ossen Innovation Third Quarter 2014 Conference Call |
Date: | Monday, December 29, 2014 |
Time: | 8:30 am Eastern Time, U.S. |
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: | 58509895 |
Please dial in at least 10 minutes before the call to ensure timely participation. A playback will be available through January 6, 2015. To listen, please call +1-855-452-5696 within the United States or +1-646-254-3697 if calling internationally. Utilize the pass code 58509895 for the replay.
This call is being webcast and can be accessed by clicking on this link: http://edge.media-server.com/m/p/irvv26je
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 |
OSSEN INNOVATION CO., LTD AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS | ||||||||
September 30, | December 31, | |||||||
2014 | 2013 | |||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
Current Assets | ||||||||
Cash and cash equivalents | $ | 3,320,365 | $ | 1,139,450 | ||||
Restricted cash | 19,822,389 | 31,783,670 | ||||||
Notes receivable - bank acceptance notes | 14,622,971 | 2,421,581 | ||||||
Accounts receivable, net of allowance for doubtful accounts of $1,515,522 and $1,336,177 at September 30, 2014 and December 31,2013, respectively | 49,301,453 | 48,200,076 | ||||||
Inventories | 24,059,857 | 18,750,770 | ||||||
Advance to suppliers | 43,264,393 | 50,614,815 | ||||||
Other current assets | 770,996 | 3,447,886 | ||||||
Notes receivable from related party - bank acceptance notes | - | 12,915,099 | ||||||
Total Current Assets | 155,162,424 | 169,273,347 | ||||||
Property, plant and equipment, net | 7,461,918 | 8,458,121 | ||||||
Land use rights, net | 4,253,533 | 4,297,849 | ||||||
Prepayment for plant and equipment | 7,798,918 | - | ||||||
TOTAL ASSETS | $ | 174,676,793 | $ | 182,029,317 | ||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
Current Liabilities | ||||||||
Notes payable – bank acceptance notes | $ | 28,758,510 | $ | 50,990,427 | ||||
Short-term bank loans | 23,559,231 | 27,283,147 | ||||||
Accounts payable | 315,343 | 503,944 | ||||||
Customer deposits | 2,894,437 | 2,908,271 | ||||||
Income tax payable | 457,087 | 232,541 | ||||||
Other payables and accrued expenses | 918,959 | 1,549,748 | ||||||
Due to related party | - | 16,911 | ||||||
Due to shareholder | 100,000 | 50,000 | ||||||
Total Current Liabilities | 57,003,567 | 83,534,989 | ||||||
Bond payable | 15,927,517 | - | ||||||
TOTAL LIABILITIES | 72,931,084 | 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 September 30, 2014 and December 31, 2013, respectively | 200,000 | 200,000 | ||||||
Additional paid-in capital | 33,971,455 | 33,971,455 | ||||||
Statutory reserve | 4,868,443 | 4,615,699 | ||||||
Retained earnings | 43,702,367 | 41,518,259 | ||||||
Treasury stock, at cost: 98,041 shares as of September 30, 2014 and December 31, 2013, respectively | (96,608 | ) | (96,608 | ) | ||||
Accumulated other comprehensive income | 8,281,672 | 7,646,562 | ||||||
TOTAL SHAREHOLDERS' EQUITY | 90,927,329 | 87,855,367 | ||||||
Non-controlling interest | 10,818,380 | 10,638,961 | ||||||
TOTAL EQUITY | 101,745,709 | 98,494,328 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 174,676,793 | $ | 182,029,317 |
OSSEN INNOVATION CO., LTD AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Unaudited)
FOR THE THREE MONTHS ENDED SEPTEMBER 30, |
FOR THE NINE MONTHS ENDED SEPTEMBER 30, |
|||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
REVENUES | $ | 27,854,785 | $ | 33,118,243 | $ | 91,812,445 | $ | 71,897,988 | ||||||||
COST OF GOODS SOLD | 25,441,673 | 29,239,480 | 83,030,331 | 63,407,366 | ||||||||||||
GROSS PROFIT | 2,413,112 | 3,878,763 | 8,782,114 | 8,490,622 | ||||||||||||
Operating Expenses: | ||||||||||||||||
Selling and distribution expenses | 293,161 | 159,249 | 565,957 | 439,357 | ||||||||||||
General and administrative expenses | 1,263,169 | 848,110 | 4,032,921 | 2,406,865 | ||||||||||||
Total Operating Expenses | 1,556,330 | 1,007,359 | 4,598,878 | 2,846,222 | ||||||||||||
INCOME FROM OPERATIONS | 856,782 | 2,871,404 | 4,183,236 | 5,644,400 | ||||||||||||
Other Income (Expenses): | ||||||||||||||||
Financial expenses, net | (484,152 | ) | (727,244 | ) | (1,608,610 | ) | (2,458,130 | ) | ||||||||
Other income, net | 244,935 | 38,232 | 472,356 | 134,143 | ||||||||||||
INCOME BEFORE INCOME TAXES | 617,565 | 2,182,392 | 3,046,982 | 3,320,413 | ||||||||||||
INCOME TAXES | (89,857 | ) | (333,683 | ) | (430,711 | ) | (577,733 | ) | ||||||||
NET INCOME | 527,708 | 1,848,709 | 2,616,271 | 2,742,680 | ||||||||||||
LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST |
60,344 | 172,305 | 179,419 | 287,858 | ||||||||||||
NET INCOME ATTRIBUTABLE TO OSSEN INNOVATION CO.,LTD AND SUBSIDIARIES |
467,364 | 1,676,404 | 2,436,852 | 2,454,822 | ||||||||||||
OTHER COMPREHENSIVE INCOME | ||||||||||||||||
Foreign currency translation gain, net of tax | 31,441 | 591,937 | 635,110 | 2,524,920 | ||||||||||||
TOTAL OTHER COMPREHENSIVE INCOME |
31,441 | 591,937 | 635,110 | 2,524,920 | ||||||||||||
COMPREHENSIVE INCOME | 498,805 | 2,268,341 | 3,071,962 | 4,979,742 | ||||||||||||
EARNINGS PER ORDINARY SHARE Basic and diluted |
$ | 0.02 | $ | 0.08 | $ | 0.12 | $ | 0.12 | ||||||||
WEIGHTED AVERAGE ORDINARY SHARES OUTSTANDING Basic and diluted |
$ | 19,901,959 | $ | 19,901,959 | $ | 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 | - | - | - | - | - | - | - | 2,436,852 | 179,419 | 2,616,271 | ||||||||||||||||||||||||||||||
Transfer to statutory reserve | - | - | - | - | - | - | 252,744 | (252,744 | ) | - | - | |||||||||||||||||||||||||||||
Foreign currency translation | - | - | - | - | - | 635,110 | - | - | - | 635,110 | ||||||||||||||||||||||||||||||
adjustment | ||||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2014 | 20,000,000 | $ | 200,000 | (98,041 | ) | $ | (96,608 | ) | $ | 33,971,455 | $ | 8,281,672 | $ | 4,868,443 | $ | 43,702,367 | $ | 10,818,380 | $ | 101,745,709 |
OSSEN INNOVATION CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) | ||||||||
Nine Months Ended September 30, | ||||||||
2014 | 2013 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net income | $ | 2,616,271 | $ | 2,742,680 | ||||
Adjustments to reconcile net income to net cash provided by/ (used in) operating activities: | ||||||||
Depreciation and amortization | 1,160,345 | 1,152,788 | ||||||
Share-based compensation expense | - | |||||||
Changes in operating assets and liabilities: | ||||||||
(Increase) Decrease In: | ||||||||
Accounts receivable | (1,101,377 | ) | (5,359,744 | ) | ||||
Inventories | (5,309,087 | ) | (6,765,517 | ) | ||||
Advance to suppliers | 7,350,422 | 22,390,059 | ||||||
Other current assets | 2,676,891 | (301,259 | ) | |||||
Notes receivable - bank acceptance notes | (12,201,390 | ) | 394,079 | |||||
Notes receivable from related party - bank acceptance notes | 12,915,099 | 1,830,208 | ||||||
Increase (Decrease) In: | ||||||||
Accounts payable | (188,602 | ) | (163,724 | ) | ||||
Customer deposits | (13,834 | ) | 1,443,528 | |||||
Income tax payable | 224,545 | (304,130 | ) | |||||
Other payables and accrued expenses | (630,789 | ) | 449,408 | |||||
Due to related party | (16,911 | ) | 467,252 | |||||
Due to shareholders | 50,000 | |||||||
Net cash provided by operating activities | 7,531,583 | 17,975,628 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Purchases of plant and equipment | (36,984 | ) | (14,806 | ) | ||||
Prepayment for plant and equipment | (7,807,417 | ) | - | |||||
Net cash used in investing activities | (7,844,401 | ) | (14,806 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
(Increase) Decrease in restricted cash | 11,961,281 | (7,287,207 | ) | |||||
Proceeds from short-term bank loans | 17,078,725 | 28,766,506 | ||||||
Repayments of short-term bank loans | (20,982,433 | ) | (49,171,458 | ) | ||||
Repayments of long-term bank loans | - | (4,503,563 | ) | |||||
Proceeds from notes payable-bank acceptance notes | 44,079,375 | 62,406,511 | ||||||
Repayment of notes payable-bank acceptance notes | (66,663,956 | ) | (52,112,653 | ) | ||||
Proceeds from bond payable | 15,940,143 | - | ||||||
Net cash provided by/(used in) financing activities | 1,413,135 | (21,901,864 | ) | |||||
DECREASE IN CASH AND CASH EQUIVALENTS | 1,100,317 | (3,941,042 | ) | |||||
Effect of exchange rate changes on cash | 1,080,598 | 4,242,895 | ||||||
Cash and cash equivalents at beginning of period | 1,139,450 | 1,996,764 | ||||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ | 3,320,365 | $ | 2,298,617 | ||||
SUPPLEMENTARY CASH FLOW INFORMATION | ||||||||
Cash paid during the periods: | ||||||||
Income taxes paid | $ | 528,663 | $ | 884,946 | ||||
Interest paid | $ | 1,568,976 | $ | 2,428,135 | ||||
Non-cash transactions: | ||||||||
Appropriation to statutory reserve | $ | 252,744 | $ | 298,596 |
Three Months Ended September 30, | ||||||||
2014 | 2013 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net income | $ | 527,708 | $ | 1,848,709 | ||||
Adjustments to reconcile net income to net cash provided by/ (used in) operating activities: | ||||||||
Depreciation and amortization | 389,223 | 383,139 | ||||||
Share-based compensation expense | - | |||||||
Changes in operating assets and liabilities: | ||||||||
(Increase) Decrease In: | ||||||||
Accounts receivable | (5,315,309 | ) | (1,290,529 | ) | ||||
Inventories | (3,436,528 | ) | (1,343,507 | ) | ||||
Advance to suppliers | 3,818,770 | 17,239,266 | ||||||
Other current assets | 157,152 | (294,734 | ) | |||||
Notes receivable - bank acceptance notes | 2,432,174 | - | ||||||
Increase (Decrease) In: | ||||||||
Accounts payable | (66,827 | ) | (6,694,566 | ) | ||||
Customer deposits | (852,819 | ) | (3,370,578 | ) | ||||
Income tax payable | 26,847 | (69,176 | ) | |||||
Other payables and accrued expenses | 89,514 | 330,731 | ||||||
Due to related party | (76,245 | ) | (1,121,686 | ) | ||||
Net cash provided by/(used in) operating activities | (2,306,340 | ) | 5,617,069 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Purchases of plant and equipment | (34,475 | ) | (493 | ) | ||||
Prepayment for plant and equipment | (7,807,417 | ) | - | |||||
Net cash used in investing activities | (7,841,892 | ) | (493 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Increase in restricted cash | (5,192,389 | ) | (1,974,345 | ) | ||||
Proceeds from short-term bank loans | 5,681,600 | 14,215,839 | ||||||
Repayments of short-term bank loans | (6,491,803 | ) | (16,544,377 | ) | ||||
Repayments of long-term bank loans | - | (4,503,563 | ) | |||||
Proceeds from notes payable-bank acceptance notes | 14,772,483 | 16,600,338 | ||||||
Repayment of notes payable-bank acceptance notes | (11,982,180 | ) | (14,795,037 | ) | ||||
Proceeds from bond payable | 15,940,143 | - | ||||||
Net cash provided by/(used in) financing activities | 12,727,854 | (7,001,145 | ) | |||||
INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS | 2,579,622 | (1,384,569 | ) | |||||
Effect of exchange rate changes on cash | 8,970 | 949,486 | ||||||
Cash and cash equivalents at beginning of period | 731,773 | 2,733,700 | ||||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ | 3,320,365 | $ | 2,298,617 | ||||
SUPPLEMENTARY CASH FLOW INFORMATION | ||||||||
Cash paid during the periods: | ||||||||
Income taxes paid | $ | 82,453 | $ | 402,645 | ||||
Interest paid | $ | 363,022 | $ | 682,581 | ||||
Non-cash transactions: | ||||||||
Appropriation to statutory reserve | $ | 44,763 | $ | 171,856 |