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8-K - Fushi Copperweld, Inc. | v165334_8k.htm |
Exhibit
99.1
Fushi
Copperweld Reports Third Quarter 2009 Financial Results
DALIAN,
China, Nov. 6, 2009 /PRNewswire-Asia-FirstCall/ -- Fushi Copperweld, Inc.
(Nasdaq: FSIN), the leading global manufacturer and innovator of copper-clad
bimetallic wire used in a variety of telecommunication, utility, transportation
and other electrical applications, today announced financial results for the
third quarter ended September 30, 2009.
Third
Quarter Highlights
--
GAAP EPS of $0.31
--
Adjusted Non-GAAP EPS of $0.26
--
Metric tons of volume shipped at Dalian increased 9.5% compared to
the
third quarter 2008
--
Gross margin increased 530 basis points from 26.5% of revenues to
31.8%
of revenues
--
Operating income increased 300 basis points from 19.2% to 22.2% of
revenues
--
Returned to profitability at Fayetteville facility; generated
approximately
$0.2 million of net income
--
Generated $11.1 million of cash flow from operations in the
quarter;
$15.6
million year-to-date
--
GAAP EPS for 4Q 2009 projected to be $0.26 - $0.30
Revenues
for the third quarter of 2009 were $47.7 million compared to $63.8 million in
the third quarter of the prior year, a decrease of $16.1 million or 25.2%. The
decline was driven primarily by a decrease in average selling price (21.6%)
resulting from lower raw material prices. Revenues were $38.9 million at the
Company's Dalian, China facility and revenues from the Fayetteville, TN and
Telford, UK facilities combined accounted for $8.8 million. Volume at the
Company's Dalian facility increased 9.5% as compared to the third quarter 2008
due to increased 3G related demand, increased government spending on basic
infrastructure projects in China and continued expansion into the utility
market. On a consolidated basis, the Company experienced a slight decline of
3.7% in metric tons sold.
Gross
profit for the third quarter of 2009 was $15.2 million compared to $16.9 million
in the third quarter of the prior year, a decrease of $1.7 million or 10.1%.
Gross margin as a percentage of revenues increased to 31.8% from 26.5% in the
same period of the prior year. Gross margin at the Company's Dalian, China
facility increased from 32.3% in the third quarter of 2008 to 34.6% in the third
quarter of 2009 as the Company cycled through lower cost inventory. The gross
margin at the Company's Fayetteville facility increased from 11.3% to 20.1% year
over year mostly as a result of cost savings initiatives implemented by
management. This gross margin represented the highest quarterly gross margin
level achieved at the Fayetteville facility since the October 2007 acquisition
of Copperweld Bimetallics.
Operating
expenses for the third quarter 2009 remained relatively flat for the third
quarter 2009 compared to the prior year's period at approximately $4.6 million.
On a percentage basis, operating expenses in the third quarter 2009 increased
230 basis points to 9.6% from 7.3% in the prior year's quarter, primarily a
result of lower sales in the third quarter of 2009.
Operating
income was $10.6 million in the third quarter of 2009 compared $12.2 million in
the third quarter of 2008, a decrease of $1.6 million or 13.6%. The decrease in
operating income was primarily due to lower average selling prices resulting
from lower raw material prices. On a percentage basis, operating income in the
third quarter 2009 increased 300 basis points to 22.2% from 19.2% in the prior
year's quarter.
Profit
before tax for Dalian and Fayetteville and Telford combined was $10.9 million
and $0.2 million respectively in the third quarter of 2009. The loss
at the Fushi Copperweld parent company level was $1.0 million primarily due to
interest expenses on the high yield notes, non-cash stock-based compensation,
non-cash charges related to changes in fair value of derivative liabilities
related to the convertible notes conversion options, as well as professional
fees and outside service expenses and partially offset by gain from the
repurchase of the convertible notes. On a consolidated basis, profit before tax
was $10.1 million and we recognized a net tax expense of $0.9 million,
reflecting an 8.9% effective tax rate.
Dalian
|
Fayetteville
&
Telford
|
Parent
Company
|
Consolidated
|
|||||||||||||
Profit
(Loss) before income tax
|
10,947,268 | 218,310 | (1,070,657 | ) | 10,094,921 | |||||||||||
Income
tax expense (credit)
|
1,788,366 | - | (888,378 | ) | 899,988 | |||||||||||
Profit
after income tax
|
9,194,933 |
Net
income on a GAAP basis of $9.2 million increased $0.2 million, or 2.2%, from
$9.0 million for the same period in 2008. GAAP net income margin increased to
19.3% from 14.2% for the same period in 2008.
GAAP
earnings per diluted share were $0.31 per diluted share compared with $0.31 per
diluted share in the third quarter of 2008. GAAP results included :(1) $2.1
million charge related to changes in fair value of derivative liability --
conversion option, (2) $3.8 million of gain on the convertible notes
extinguishment (3) $0.2 million of stock-based compensation cost. Excluding the
non-cash gains and expenses related to changes in fair value of derivative
liability and share-based compensation, adjusted non-GAAP net income was $7.5
million, or $0.26 per diluted share in the third quarter of 2009.
During
the quarter, the Company generated $11.1 million of cash flows from operations,
which represented a $27.3 million increase over the same period in the previous
year. The Company's cash position at the end of the third quarter was $60.0
million and the Company's debt position was $39.0 million compared to debt of
$67.3 million at December 31, 2008. Accounts receivables at September 30, 2009
were $69.1 million compared to $49.8 million on December 31, 2008, an increase
of 38.8%. This increase is primarily a result of extended credit terms in 2009
to certain credible customers that have long-standing business relationships
with us in order to capture increased market share.
Mr. Li
Fu, Chairman and Chief Executive Officer of Fushi Copperweld, commented, "We are
extremely pleased with achieving yet another successful quarter for the Company.
Despite the global slowdown, we were able to realize profit at all our
facilities worldwide. Our China operations remained strong and we are optimistic
that our results will continue to improve as we realize further benefits from
the Chinese government's stimulus package and 3G network infrastructure build
out. We have been prudently expanding our Chinese operations and believe we are
well positioned to capitalize on the increasing demand. Market conditions in
North America and Europe have stabilized, and despite flat sales our
Fayetteville and Telford operations achieved profitability for the first quarter
this year, a clear indication that cost savings initiatives have successfully
lowered the breakeven levels at Fayetteville and Telford."
Mr. Fu
continued, "We are especially pleased with the addition of Linda Zhang as Chief
Financial Officer and the expertise she has brought at a pivotal time in our
strategic growth plan. I am also very proud and pleased with the overall
performance of our entire management team and their individual contributions
will only serve to strengthen our team in total. I am confident that our current
team will take us to the next level and build a stronger Company."
Fourth
Quarter 2009 Outlook and Macro Trends
In the
2009 fourth quarter, the Company expects adjusted fully diluted earnings per
share before the impact of non-cash expense related to stock-based compensation
between $0.26 and $0.30 based on an estimated weighted average diluted share
count of approximately 29.4 million shares. This expectation is based on an
effective tax rate at the consolidated level of 8%.
Mr. Fu
continued, "As we look forward, we continue to be optimistic and expect
continued growth in demand for CCA-based telecom products due to China's 3G
infrastructure investments. We also continue to believe that the electrical
utility market presents significant opportunities as stimulus packages increase
national transmission and distribution spending and we prep the market for the
introduction of 8,200 metric tons of CCS cladding capacity by the end of first
quarter 2010. At our Fayetteville and Telford facilities, we have successfully
lowered the breakeven level at our Fayetteville facility and have recalibrated
costs to match economic conditions. With markets stabilizing, we are now in a
stronger position to pursue incremental growth opportunities."
Accounting
for derivative liability -- conversion option
Effective
January 1, 2009, the Company adopted the provisions of EITF Issue 07-5
"Determining Whether an Instrument (or Embedded Feature) Is Indexed to an
Entity's Own Stock", which is effective for financial statements for fiscal
years beginning after December 15, 2008 and which replaced the previous guidance
on this topic in EITF Issue 01-6. As a result, from January 1, 2009, the Company
is required to separately account for the conversion option embedded in the
Company's $5,000,000 convertible notes as a derivative instrument liability,
carried at fair value and marked-to-market each period, with changes in the fair
value each period charged or credited to income. In the third quarter of 2009,
the Company recorded non-cash charges to income for changes in the fair value of
these derivative liabilities of $2.1 million, or $0.07 per diluted share. There
is no impact on periodic cash flows.
Reconciliation
of Non-GAAP Financial Measures
Our net
income was materially impacted by certain non-cash expenses including
stock-based compensation and change in the fair value of derivative liabilities
related to the conversion in our outstanding convertible notes. In the third
quarter 2009, we also recognized a one-time non-cash gain on redemption of
convertible notes. To supplement our consolidated financial statements, which
are prepared and presented in accordance with GAAP, we use EPS as adjusted for
the impact of non-cash expenses related to stock-based compensation and the
change in the fair value of derivative liabilities related to the conversion
option in our outstanding convertible notes. These Company-defined adjusted
measures are being provided because management believes they are useful in
analyzing the underlying operating performance of the business. These measures
may be inconsistent with similar measures presented by other companies and
should only be used in conjunction with our results reported according to
accounting principles generally accepted in the United States. A reconciliation
of earnings per share as reported and operating income as reported to adjusted
non-GAAP earnings per share and adjusted non-GAAP operating income
follows:
2009 Q3 | 2008 Q3 | |||||||
GAAP
Net Income
|
9,194,932 | 9,046,950 | ||||||
Non-cash
expense:
|
||||||||
Change
in fair value of derivative liability - conversion option
|
2,058,352 | - | ||||||
Gain
on CB extinguishment
|
(3,842,935 | ) | - | |||||
Stock-based
compensation
|
179,527 | 523,474 | ||||||
Total
non-cash expense
|
(1,605,056 | ) | 523,474 | |||||
Provision
for income tax
|
(61,039 | ) | (177,981 | ) | ||||
Adjusted
to Non-GAAP Net income
|
7,528,837 | 9,392,443 | ||||||
GAAP
Earnings per share:
|
||||||||
Basic
|
0.33 | 0.33 | ||||||
Diluted
|
0.31 | 0.32 | ||||||
Non-GAAP
Earnings per share:
|
||||||||
Basic
|
0.27 | 0.34 | ||||||
Diluted
|
0.26 | 0.33 |
Explanation
of Redemption of Convertible Notes
On August
13, 2009, the Company entered into a Notes Purchase Agreement (the "Repurchase
Agreement") with Citadel Equity Fund Ltd. Pursuant to the Repurchase Agreement,
the Company repurchased $2.0 million principal amount of the convertible notes
in exchange for the issuance 440,529 shares of our common stock, valued at $4.0
million. The remaining $3.0 million principal amount will be
repurchased for cash in the amount of $6,060,000. The early repurchase of the
notes prior to the maturity date will result in a recognized gain of $3.8
million.
Third
Quarter Earnings Call
The
Company will conduct a conference call to discuss the third quarter 2009 results
today, Friday, November 6, 2009, at 8:00 am ET. Listeners may access the call by
dialing +1-800-355-4959. To listen to the live webcast of the event, please got
to Fushi Copperweld's website at
http://www.fushicopperweld.com/fcw/index.php/events-presentations . Please go to
the website 15 minutes early to download and install any necessary audio
software.
A replay
of the call will be available from November 6, 2009 to November 16, 2009.
Listeners may access the replay by dialing +1-800-408-3053; password:
5500028.
About
Fushi Copperweld, Inc.
Fushi
Copperweld, Inc. through its wholly owned subsidiaries, Fushi International
(Dalian) Bimetallic Cable Co, Ltd., and Copperweld Bimetallics, LLC, is the
leading manufacturer and innovator of copper cladded bimetallic engineered
conductor products used in the electrical, telecommunications, transportation,
utilities and industrial industries. With extensive design and production
capabilities and a long-standing dedication to customer service, Fushi
Copperweld, Inc. is the preferred choice bimetallic products
world-wide. For more information, visit:
http://www.fushicopperweld.com .
Safe
Harbor Statement
This
press release may include certain statements that are not descriptions of
historical facts, but are forward-looking statements. Forward-looking statements
can be identified by the use of forward-looking terminology such as "will"
"believes", "expects" or similar expressions. These forward-looking statements
may also include statements about our proposed discussions related to our
business or growth strategy, which is subject to change. Such information is
based upon expectations of our management that were reasonable when made but may
prove to be incorrect. All of such assumptions are inherently subject
to uncertainties and contingencies beyond our control and upon assumptions with
respect to future business decisions, which are subject to change. We do not
undertake to update the forward-looking statements contained in this press
release. For a description of the risks and uncertainties that may cause actual
results to differ from the forward-looking statements contained in this press
release, see our most recent Annual Report filed with the Securities and
Exchange Commission (SEC) on Form 10-K, and our subsequent SEC filings. Copies
of filings made with the SEC are available through the SEC's electronic data
gathering analysis retrieval system (EDGAR) at http://www.sec.gov.
For
more information, please contact:
Nathan
J. Anderson
Vice
President of Investor Relations
Fushi
Copperweld, Inc.
Tel: +1-931-433-0482
Email:
IR@fushicopperweld.com
Judy
Zhu
IR
Manager
Fushi
Copperweld, Inc.
Tel: +1-931-433-0482
Email:
jzhu@fushicopperweld.com
FUSHI
COPPERWELD, INC. AND SUBSIDIARIES
|
||||||||
CONSOLIDATED BALANCE
SHEETS
|
||||||||
AS
OF SEPTEMBER 30, 2009 AND DECEMBER 31, 2008
|
||||||||
ASSETS
|
||||||||
September
30,
|
December
31,
|
|||||||
2009
|
2008
|
|||||||
Unaudited
|
||||||||
CURRENT
ASSETS:
|
||||||||
Cash
|
$ | 60,009,611 | $ | 65,611,770 | ||||
Restricted
cash
|
- | 1,000,000 | ||||||
Accounts
receivable, trade, net of allowance of bad debt of
$1,181,365
|
||||||||
and
$318,529 as of September 30, 2009 and December 31, 2008,
respectively
|
69,052,683 | 49,782,548 | ||||||
Inventories
|
10,657,786 | 6,977,852 | ||||||
Other
receivables and prepaid expenses
|
656,439 | 1,041,273 | ||||||
Advances
to suppliers
|
5,164,959 | 20,261,585 | ||||||
Deposit
in derivative hedge
|
1,000,000 | 1,000,000 | ||||||
Prepaid
taxes
|
- | 670,805 | ||||||
Total
current assets
|
146,541,478 | 146,345,833 | ||||||
PLANT
AND EQUIPMENT, net
|
115,610,582 | 119,761,027 | ||||||
OTHER
ASSETS:
|
||||||||
Advances
to suppliers, non-current
|
5,862,776 | 4,022,879 | ||||||
Notes
receivables, non-current
|
729,106 | 799,106 | ||||||
Intangible
assets, net of accumulated amortization
|
12,042,501 | 12,406,920 | ||||||
Deferred
loan expense, net
|
2,500,375 | 3,317,725 | ||||||
Deferred
tax assets
|
11,057,111 | 7,804,027 | ||||||
Total
other assets
|
32,191,869 | 28,350,657 | ||||||
Total
assets
|
$ | 294,343,929 | $ | 294,457,517 | ||||
LIABILITIES
AND SHAREHOLDERS' EQUITY
|
||||||||
CURRENT
LIABILITIES:
|
||||||||
Revolver
line of credit
|
$ | 3,988,509 | $ | 4,712,075 | ||||
Accounts
payable, trade
|
3,335,847 | 7,204,156 | ||||||
Notes
payable, current
|
10,000,000 | 5,000,000 | ||||||
Short-term bank
loans
|
- | 17,588,400 | ||||||
Other
payables and accrued liabilities
|
8,385,214 | 4,751,460 | ||||||
Extinguished
convertible note liabilities
|
6,060,000 | - | ||||||
Customer
deposits
|
297,533 | 542,540 | ||||||
Taxes
payable
|
3,314,803 | - | ||||||
Cross
currency hedge payable
|
1,071,557 | 104,324 | ||||||
Obligation
under capital lease, current
|
68,976 | - | ||||||
Loan
from shareholder
|
4,553,731 | - | ||||||
Total
current liabilities
|
41,076,170 | 39,902,955 | ||||||
LONG-TERM
LIABILITIES:
|
||||||||
Notes
payable, non-current
|
25,000,000 | 40,000,000 | ||||||
Obligation
under capital lease, non-current
|
174,046 | - | ||||||
Fair
value of derivative instrument
|
7,652,664 | 4,377,076 | ||||||
Total
long-term liabilities
|
32,826,710 | 44,377,076 | ||||||
Total
liabilities
|
73,902,880 | 84,280,031 | ||||||
COMMITMENTS
AND CONTINGENCIES
|
7,197,794 | |||||||
SHAREHOLDERS'
EQUITY:
|
||||||||
Preferred
stock, $0.001 par value, 5,000,000 shares authorized, none
issued
or outstanding as of September 30, 2009 and December 31,
2008
|
- | - | ||||||
Common
stock, $0.006 par value, 100,000,000 shares
authorized,
|
||||||||
September
30, 2009: 30,543,716 shares issued and 28,343,716
outstanding
|
||||||||
December
31, 2008: 27,499,034 shares issued and 27,399,034
outstanding
|
170,063 | 164,395 | ||||||
Restricted
common stock in escrow
|
13,200 | 600 | ||||||
Additional
paid in capital
|
105,197,671 | 91,172,890 | ||||||
Common
stock subscription receivable
|
(5,919,597 | ) | - | |||||
Statutory
reserves
|
14,979,861 | 12,316,147 | ||||||
Retained
earnings
|
88,450,844 | 78,613,158 | ||||||
Accumulated
other comprehensive income
|
17,549,007 | 20,712,502 | ||||||
Total
shareholders' equity
|
220,441,049 | 202,979,692 | ||||||
Total
liabilities and shareholders' equity
|
$ | 294,343,929 | $ | 294,457,517 |
FUSHI
COPPERWELD, INC. AND SUBSIDIARIES
|
||||||||||||||||
CONSOLIDATED
STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME
|
||||||||||||||||
FOR
THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2009 AND
2008
|
||||||||||||||||
(UNAUDITED)
|
||||||||||||||||
Three
months ended September 30,
|
Nine
months ended September 30,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
REVENUES
|
$ | 47,676,346 | $ | 63,823,927 | $ | 131,234,427 | $ | 180,369,083 | ||||||||
COST
OF GOODS SOLD
|
32,506,879 | 46,931,400 | 93,672,906 | 131,996,263 | ||||||||||||
GROSS
PROFIT
|
15,169,467 | 16,892,527 | 37,561,521 | 48,372,820 | ||||||||||||
OPERATING
EXPENSES
|
||||||||||||||||
Selling
expenses
|
1,078,158 | 1,223,087 | 3,366,719 | 3,274,048 | ||||||||||||
General
and administrative expenses
|
3,510,034 | 3,418,704 | 9,747,637 | 11,335,948 | ||||||||||||
Total
operating expenses
|
4,588,192 | 4,641,791 | 13,114,356 | 14,609,996 | ||||||||||||
INCOME
FROM OPERATIONS
|
10,581,275 | 12,250,736 | 24,447,165 | 33,762,824 | ||||||||||||
OTHER
INCOME (EXPENSE)
|
||||||||||||||||
Interest
income
|
76,094 | 176,830 | 242,717 | 529,651 | ||||||||||||
Interest
expense
|
(1,201,014 | ) | (1,800,738 | ) | (4,150,086 | ) | (7,386,274 | ) | ||||||||
(Loss)
gain on derivative instrument
|
(1,199,438 | ) | (32,482 | ) | (1,581,812 | ) | 322,708 | |||||||||
Gain
on convertible note extinguishment
|
3,842,935 | - | 3,842,935 | - | ||||||||||||
Change
in fair value of derivative liability - warrants
|
- | - | (752,114 | ) | - | |||||||||||
Change
in fair value of derivative liability - conversion option
|
(2,058,352 | ) | - | (7,181,198 | ) | - | ||||||||||
Other
income (expense)
|
53,421 | (71,653 | ) | (193,061 | ) | (179,655 | ) | |||||||||
Total
other expense, net
|
(486,354 | ) | (1,728,043 | ) | (9,772,619 | ) | (6,713,570 | ) | ||||||||
INCOME
BEFORE INCOME TAXES
|
10,094,921 | 10,522,693 | 14,674,546 | 27,049,254 | ||||||||||||
PROVISION
FOR INCOME TAXES
|
899,988 | 1,475,743 | 815,996 | 3,150,962 | ||||||||||||
NET
INCOME
|
9,194,933 | 9,046,950 | 13,858,550 | 23,898,292 | ||||||||||||
OTHER
COMPREHENSIVE INCOME
|
||||||||||||||||
Unrealized
gain on marketable securities
|
- | - | - | 22,301 | ||||||||||||
Foreign
currency translation adjustment
|
72,136 | 1,899,163 | 112,093 | 14,062,515 | ||||||||||||
Change
in fair value of derivative instrument
|
237,768 | 3,940,908 | (3,275,588 | ) | 3,209,403 | |||||||||||
COMPREHENSIVE
INCOME
|
$ | 9,504,837 | $ | 14,887,021 | $ | 10,695,055 | $ | 41,192,511 | ||||||||
EARNINGS
PER SHARE:
|
||||||||||||||||
Basic
|
$ | 0.33 | $ | 0.33 | $ | 0.50 | $ | 0.88 | ||||||||
Diluted
|
$ | 0.31 | $ | 0.31 | $ | 0.48 | $ | 0.83 | ||||||||
WEIGHTED
AVERAGE SHARES:
|
||||||||||||||||
Basic
|
28,084,416 | 27,387,302 | 27,827,152 | 27,263,638 | ||||||||||||
Diluted
|
29,206,508 | 28,446,786 | 28,676,832 | 28,601,237 |
FUSHI
COPPERWELD, INC. AND SUBSIDIARIES
|
||||||||
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
||||||||
FOR
THE NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
|
||||||||
(UNAUDITED)
|
||||||||
2009
|
2008
|
|||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net
income
|
$ | 13,858,550 | $ | 23,898,292 | ||||
Adjustments
to reconcile net income
|
||||||||
provided
by (used in) operating activities:
|
||||||||
Bad
debt expense
|
862,302 | 355,293 | ||||||
Inventories
write-off
|
119,133 | - | ||||||
Reserve
for inventories
|
62,914 | 401,646 | ||||||
Depreciation
|
7,191,842 | 4,728,235 | ||||||
Loss
on sale of property and equipment
|
117,430 | - | ||||||
Deferred
taxes
|
(3,253,085 | ) | (1,295,286 | ) | ||||
Amortization
of intangible assets
|
357,449 | 256,722 | ||||||
Amortization
of loan commission
|
817,349 | 2,525,756 | ||||||
Interest
penalty
|
- | 710,544 | ||||||
Amortization
of stock compensation expense
|
1,108,254 | 1,437,557 | ||||||
Loss
(gain) on derivative instrument
|
1,581,812 | (322,708 | ) | |||||
Gain
on convertible note extinguishment
|
(3,842,935 | ) | - | |||||
Change
in fair value of derivative liability - conversion option
|
7,181,198 | - | ||||||
Change
in fair value of derivative liability - warrants
|
752,114 | - | ||||||
Investment
loss on marketable securities
|
- | 16,158 | ||||||
(Loss)
gain on derivative instrument
|
||||||||
Accounts
receivable
|
(20,177,587 | ) | (24,965,036 | ) | ||||
Inventories
|
(3,756,514 | ) | (7,885,132 | ) | ||||
Other
receivables and prepayments
|
501,770 | 1,092,497 | ||||||
Advances
to suppliers - current
|
15,073,210 | (22,061,823 | ) | |||||
Accounts
payable
|
(3,839,555 | ) | 2,521,359 | |||||
Other
payables and accrued liabilities
|
(2,863,124 | ) | (2,737,772 | ) | ||||
Customer
deposits
|
(250,861 | ) | 528,731 | |||||
Taxes
payable
|
3,984,006 | 960,752 | ||||||
Net
cash provided by (used in) operating activities
|
15,585,672 | (19,834,215 | ) | |||||
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Proceeds
from sale of marketable securities
|
- | 2,983,842 | ||||||
Payments
on derivative instrument
|
(614,580 | ) | - | |||||
Proceeds
from derivative instrument
|
- | 973,556 | ||||||
Deposit
in derivative hedge
|
- | (1,000,000 | ) | |||||
Purchase
of land use right
|
- | (1,687,468 | ) | |||||
Proceeds
from sale of property and equipment
|
424,444 | - | ||||||
Purchases
of property and equipment
|
(3,292,007 | ) | (15,540,210 | ) | ||||
Net
of refund and (payments) on prepayment of equipment
|
(1,877,177 | ) | (3,148,802 | ) | ||||
Net
cash used in investing activities
|
(5,359,320 | ) | (17,419,082 | ) | ||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Release
of restricted cash
|
1,000,000 | - | ||||||
Net
(payments) borrowings on revolver line of credit
|
(723,566 | ) | 2,279,289 | |||||
Proceeds
from short-term bank loans
|
- | 16,908,000 | ||||||
Proceeds
from shareholder loan
|
4,552,000 | - | ||||||
Payments
on short-term bank loans
|
(17,553,600 | ) | (17,268,032 | ) | ||||
Payment
on capital lease obligation
|
(23,575 | ) | - | |||||
Payment
of high yield notes payable
|
(5,000,000 | ) | - | |||||
Proceeds
from exercise of stock warrants
|
- | 139,394 | ||||||
Proceeds
on issuance of common stock and warrants
|
1,920,000 | - | ||||||
Net
cash (used in) provided by financing activities
|
(15,828,741 | ) | 2,058,651 | |||||
EFFECT
OF EXCHANGE RATE ON CASH
|
230 | 5,323,298 | ||||||
DECREASE
IN CASH
|
(5,602,159 | ) | (29,871,348 | ) | ||||
CASH,
beginning of period
|
65,611,770 | 79,914,758 | ||||||
CASH,
end of period
|
$ | 60,009,611 | $ | 50,043,410 | ||||
Supplemental
cash flow disclosures:
|
||||||||
Interest
paid
|
$ | 3,650,785 | $ | 5,895,129 | ||||
Income
tax paid
|
$ | 3,609,505 | $ | 2,907,756 |
FUSHI
COPPERWELD, INC AND SUBSIDIARIES
|
||||||||||||||||||||||||||||||||||||||||
CONSOLIDATED
STATEMENTS OF SHAREHOLDERS' EQUITY
|
||||||||||||||||||||||||||||||||||||||||
Common
stock
|
||||||||||||||||||||||||||||||||||||||||
Shares
outstanding
|
Shares
In escrow
|
Additional
|
Common
stock
|
Retained
earnings
|
Accumulated
|
|||||||||||||||||||||||||||||||||||
Number
|
Par
|
Number
|
Par
|
paid
in
|
subscription
|
Statutory
|
Unrestricted
|
comprehensive
|
||||||||||||||||||||||||||||||||
of
shares
|
value
|
of
shares
|
value
|
capital
|
receivable
|
reserves
|
earnings
|
income
(loss)
|
Totals
|
|||||||||||||||||||||||||||||||
BALANCE,
December 31, 2007
|
25,211,304 | $ | 151,268 | 100,000 | $ | 600 | $ | 77,665,064 | $ | $ | 8,321,726 | $ | 54,133,070 | $ | 4,015,930 | $ | 144,287,658 | |||||||||||||||||||||||
CB
transfer to common stock @$7.00
|
2,142,857 | 12,857 | 14,987,143 | 15,000,000 | ||||||||||||||||||||||||||||||||||||
Adjustment
to shares outstanding
|
4,851 | 29 | (29 | ) | - | |||||||||||||||||||||||||||||||||||
Exercise
of warrants for cash @ $3.11
|
44,873 | 270 | 139,124 | 139,394 | ||||||||||||||||||||||||||||||||||||
Stock
compensation expense
|
1,437,557 | 1,437,557 | ||||||||||||||||||||||||||||||||||||||
Net
income
|
23,898,292 | 23,898,292 | ||||||||||||||||||||||||||||||||||||||
Allocation
of APIC due to Kuhn's litigation
|
(3,487,250 | ) | (3,487,250 | ) | ||||||||||||||||||||||||||||||||||||
Adjustment
to statutory reserve
|
3,254,932 | (3,254,932 | ) | - | ||||||||||||||||||||||||||||||||||||
Change
in fair value of derivative instrument
|
3,209,403 | 3,209,403 | ||||||||||||||||||||||||||||||||||||||
Foreign
currency translation gain
|
14,062,515 | 14,062,515 | ||||||||||||||||||||||||||||||||||||||
Reverse
unrealized loss on marketable securities
|
22,301 | 22,301 | ||||||||||||||||||||||||||||||||||||||
BALANCE,
September 30, 2008 (unaudited)
|
27,403,885 | 164,424 | 100,000 | 600 | 90,741,609 | - | 11,576,658 | 74,776,430 | 21,310,149 | 198,569,870 | ||||||||||||||||||||||||||||||
Adjustment
to shares outstanding
|
(4,851 | ) | (29 | ) | 29 | - | ||||||||||||||||||||||||||||||||||
Stock
compensation expense
|
431,252 | 431,252 | ||||||||||||||||||||||||||||||||||||||
Net
income
|
4,576,217 | 4,576,217 | ||||||||||||||||||||||||||||||||||||||
(Loss)
gain on derivative instrument
|
739,489 | (739,489 | ) | - | ||||||||||||||||||||||||||||||||||||
Change
in fair value of derivative instrument
|
928,917 | 928,917 | ||||||||||||||||||||||||||||||||||||||
Foreign
currency translation gain
|
(1,526,564 | ) | (1,526,564 | ) | ||||||||||||||||||||||||||||||||||||
BALANCE,
December 31, 2008, as previously reported
|
27,399,034 | 164,395 | 100,000 | 600 | 91,172,890 | - | 12,316,147 | 78,613,158 | 20,712,502 | 202,979,692 | ||||||||||||||||||||||||||||||
Cumulative
effect of reclassification of conversion option
|
||||||||||||||||||||||||||||||||||||||||
BALANCE,
January 1, 2009, as adjusted (unaudited)
|
27,399,034 | 164,395 | 100,000 | 600 | 91,172,890 | - | 12,316,147 | 77,256,008 | 20,712,502 | 201,622,542 | ||||||||||||||||||||||||||||||
Shares
issued for cash @ $4.80
|
400,000 | 2,400 | 1,706,157 | 1,708,557 | ||||||||||||||||||||||||||||||||||||
Shares
issued for convertible note extinguishment @ $9.80
|
440,529 | 2,643 | 3,997,357 | 4,000,000 | ||||||||||||||||||||||||||||||||||||
Shares
placed in escrow (subscription receivable)
|
2,200,000 | 13,200 | 6,249,481 | (6,262,681 | ) | - | ||||||||||||||||||||||||||||||||||
Shares
removed from escrow as payment of liability
|
100,000 | 600 | (100,000 | ) | (600 | ) | 343,084 | 343,084 | ||||||||||||||||||||||||||||||||
Reclassification
of derivative liability-warrant to equity
|
963,557 | 963,557 | ||||||||||||||||||||||||||||||||||||||
Exercise
of stock option
|
4,153 | 25 | (25 | ) | - | |||||||||||||||||||||||||||||||||||
Stock
compensation expense
|
1,108,254 | 1,108,254 | ||||||||||||||||||||||||||||||||||||||
Net
income
|
13,858,550 | 13,858,550 | ||||||||||||||||||||||||||||||||||||||
Adjustment
to statutory reserve
|
2,663,714 | (2,663,714 | ) | - | ||||||||||||||||||||||||||||||||||||
Change
in fair value of derivative instrument
|
(3,275,588 | ) | (3,275,588 | ) | ||||||||||||||||||||||||||||||||||||
Foreign
currency translation gain
|
112,093 | 112,093 | ||||||||||||||||||||||||||||||||||||||
BALANCE,
September 30, 2009 (unaudited)
|
28,343,716 | $ | 170,063 | 2,200,000 | $ | 13,200 | $ | 105,197,671 | $ | (5,919,597 | ) | $ | 14,979,861 | $ | 88,450,844 | $ | 17,549,007 | $ | 220,441,049 |