Ossen Innovation Announces Fourth Quarter and Full Year 2012 Financial Results

Ossen Innovation Announces Fourth Quarter and Full Year 2012 Financial Results

To Host Conference call at 9:00 am ET on April 30, 2013

PR Newswire

SHANGHAI, April 30, 2013

SHANGHAI, April 30, 2013 /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 and
twelve months ended December 31, 2012.

"We finished 2012 with positive momentum," said Dr. Liang Tang, Chairman of
Ossen Innovation. "The year-over-year growth in revenues for the quarter
represented our third consecutive quarter of sales growth. This reflects a
gradual improvement in demand for our products. Given the shakeout that
occurred among suppliers of coated and uncoated steel products over the past
two years, we are in a stronger position today to take advantage of the long
term growth in this industry."

Financial Summary

(in millions ex- EPS) Q4 2012 Q4 2011 Chg.   FY 2012 FY 2011 Chg.
Revenue               $27.4   $26.8   +3%    $122.4  $118.6  +3%
Gross Profit          $3.1    $2.0    +56%   $10.8   $22.0   -51%
Net Income*           $1.3    $0.1    +1965% $2.4    $11.5   -79%
EPS                   $0.07   $0.00   +2233% $0.12   $0.58   -79%
Shares Outstanding    19.9    20.0    -0.3%  19.9    20.0    -0.3%
*Net income attributable to Ossen Innovation Co., Ltd.

Fourth quarter 2012 Financial Results

Revenue for the three months ended December 31, 2012 was $27.4 million, an
increase of 3% from the same period a year ago. Sales of coated pre-stressed
steel materials, including rare earth coated products, were approximately
$21.1 million, up 160% compared to approximately $8.1 million in the fourth
quarter of 2011 due to overall higher demand of coated pre-stressed steel
materials.

Gross profit increased from $2 million to $3.1 million, a 56% year-over-year
increase. Gross margin was 11.1%, up from 7.1% in the third quarter of 2012
and 7.3% in the fourth quarter of 2011. Gross profit and gross margin were up
as a result of higher sales of rare earth coated products, which provide 1%-5%
higher gross margin than similar zinc coated products.

Selling expenses fell by 30% to $0.3 million due to lower sales commissions.
General and administrative expenses were $1.0 million compared to $1.2 million
in the fourth quarter of 2011. Operating income was approximately $1.7
million, an increase of $1.4 million from the same period a year ago.

Net income attributable to Ossen Innovation Co., Ltd. was $1.3 million in the
fourth quarter of 2012 compared to $0.1 million in the year-ago period.
Earnings per share were $0.07 versus $0.00 a year ago. The weighted average
diluted shares outstanding was 19.9 million compared to 20.0 million a year
ago as a result of 98,041 shares repurchased by Ossen as of December 31, 2012.


Fiscal Year 2012 Financial Results

Revenues for the twelve months ended December 31, 2012 were $122.4 million, an
increase of approximately 3% compared to $118.6 million in the same period a
year ago. Sales of coated products were $92.6 million, an increase of 64% from
$56.5 million in 2011. Coated products, including rare earth coated products,
accounted for approximately 76% of total sales in 2012.

Gross profit fell 51% in the fiscal 2012 to $10.8 million. Gross margin was
8.8% for the twelve months ended December 31, 2012 compared to 18.6% for
fiscal 2011 due to lower selling prices for coated and uncoated products.

Operating expenses were $4.9 million, up 23% from $4 million in the first
twelve months of 2011 primarily due to a 44% year-over-year increase in
general and administrative expenses. Operating income and operating margin for
2012 was $5.9 million and 4.8% compared to $18.1 million and 15.2%,
respectively, for the twelve months ended December 31, 2011.

Net income attributable to Ossen Innovation Co., Ltd. was $2.4 million, down
from $11.5 million in the fiscal 2011. Earnings per share was $0.12 for the
twelve months ended December 31, 2012.

Balance Sheet and Cash Flows

Ossen had approximately $27.4 millionof cash and restricted cash as
ofDecember 31, 2012compared to$21.3 millionatDecember 31, 2011. Total
accounts receivable on December 31, 2012 decreased to $45.7 million from $48.0
million on December 31, 2011. The average accounts receivable days sales
outstanding were 140 days in the twelve months of 2012 compared to 94 days in
the twelve months of 2011. Inventories were down from $17.2 million at
December 31, 2011 to $9.8 million at December 31, 2012. Total working capital
was $70.8 million at the end of 2012 and 2011.

The Company had cash outflows from operations of $8.8 million in the twelve
months ended December 31, 2012 as compared to $20.1 million of outflows in the
same period of 2011. The primary reason for the reduction in cash used in
operations was improvement in accounts receivable collection during the twelve
months of 2012, which was partially offset by increased advances to suppliers.

In November 2011, the Company's Board of Directors approved a share repurchase
program for up to 500,000 shares of the Company's American Depositary Receipts
("ADSs") through May 2012. On May 31, 2012 the program was further extended
for another 12 months to May 31, 2013. The Board decided to suspend the
repurchase program in December 2012 to evaluate the best uses of the Company's
capital.

Business Updates and Outlook

1.Ossen's plans to add 30,000 tons of annual production capacity for rare
    earth coated products was delayed due to unfavorable business climate in
    China in 2011 and 2012. In light of recent favorable policy changes made
    by China's State Council (see below), the Company will proceed with its
    expansion plan starting in 2013. Management expects to complete the
    installation and start operation of its new production lines in the first
    half of 2014, pending its ability to expand its business and the general
    business environment in China at that time. Capital expenditures in fiscal
    year 2013 will be incurred primarily in connection with the purchase of
    manufacturing equipment for the construction of its new facility in
    Maanshan City, China, as well as the expansion of existing factory
    buildings to accommodate new production lines.
2.On March 10, 2013, China's State Council announced its plan to restructure
    the Ministry of Railways (MOR) to separate the administrative and
    supervision function from the commercial arm. The responsibility for
    planning and policy-making for railway development is to move to the
    Ministry of Transport (MOT). A newly created National Railways Bureau
    (NRB) under the MOT will be responsible for setting technical standards of
    railways and supervising the safety of operations, quality of transport
    services and quality of railway projects. The MOR's enterprise/commercial
    responsibilities will be incorporated into China National Railway Co.
    (CNRC), which was established on March 14, 2013 with registered capital of
    1.04 trillion Yuan (USD $166.8 billion) and will be administrated by the
    central government. These reforms are expected to attract more private
    investment and much needed efficiencies to the railway industry.

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 4th
Quarter 2012 Conference Call" or be prepared to utilize the conference ID.

Conference Call                 Ossen Innovation 4^th Quarter 2012 Conference
                                Call
Date:                           Tuesday, April 30, 2013
Time:                           9:00 am Eastern Time, US
Conference Line Dial-In (U.S.): 718-354-1231
                                United States: +1-866-519-4004
International Toll Free:        China, Domestic Mobile: 4006208038
                                China, Domestic: 8008190121
Conference ID:                  51548431

Please dial in at least 10 minutes before the call to ensure timely
participation. A playback will be available through May 7, 2013. To listen,
please call + 1-855-452-5696 within the United States or + 1-646-254-3697 if
calling internationally. Utilize the pass code 51548431 for the replay.

This call is being webcast and can be accessed by clicking on this link:
http://www.media-server.com/m/p/h5n84b75

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. 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: +86-138-1227-1616
Web: www.osseninnovation.com
Investor Relations
MZ North America
Ted Haberfield, President
Phone: +1-760-755-2716
Email: thaberfield@mzgroup.us
Web: www.mzgroup.us



OSSEN INNOVATION CO., LTD AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Audited)
                                                 December 31,
                                                 2012           2011
ASSETS
Current assets
Cash and cash equivalents                        $ 1,996,764    $  1,568,261
Restricted cash                                    25,407,499      19,764,900
Note receivable-bank acceptance note               394,079         10,851,616
Accounts receivable, net of allowance for
doubtful accounts
                                                   45,734,381      48,049,722
of $1,277,091 and $384,311 as of December 31,
2012 and 2011, respectively
Inventories                                        9,807,044       17,222,664
Advance to suppliers                               77,948,496      41,391,174
Other current assets                               1,904,626       6,495,241
Notes receivable from related party- bank         1,830,208       -
acceptance notes
Accounts receivable from related party             -               20,799
 Total current assets                             165,023,097     145,364,377
Property, plant and equipment, net                 9,707,587       11,022,916
Land use rights, net                               4,317,669       4,380,708
Prepayment for plant and equipment                 7,933,361       7,869,529
TOTAL ASSETS                                     $ 186,981,714  $  168,637,530
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Notes payable-bank acceptance notes              $ 36,933,710    $ 24,848,628
Short-term bank loans                              50,679,026      47,966,209
Long term bank loans – current portion             4,438,386       -
Accounts payables                                  572,305         948,475
Customer deposits                                  384,602         459,915
Taxes payable                                      391,353         4,792
Other payables and accrued liabilities             805,196         324,423
 Total current liabilities                        94,204,578      74,552,442
Long term bank loans                               -               4,718,094
TOTAL LIABILITIES                                  94,204,578      79,270,536
EQUITY
Shareholders' Equity
Ordinary shares, $0.01 par value: 100,000,000
shares authorized; 20,000,000 shares issued; and   200,000         200,000
19,901,959 and 20,000,000 shares outstanding as
of December 31, 2012 and 2011, respectively
Additional paid-in capital                         33,971,455      33,884,656
Statutory reserve                                  4,179,027       3,884,808
Retained earnings                                  38,311,527      36,224,467
Treasury stock, at cost: 98,041 and 0 shares as
of as of December 31, 2012 and 2011,               (96,608)        -
respectively
Accumulated other comprehensive income             5,999,214       5,295,641
TOTAL SHAREHOLDERS' EQUITY                         82,564,615      79,489,572
Non-controlling interest                           10,212,521      9,877,422
TOTAL EQUITY                                       92,777,136      89,366,994
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY       $ 186,981,714   $ 168,637,530







OSSEN INNOVATION CO., LTD AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Audited)
                                             Year Ended December 31,
                                             2012           2011           2010
REVEUNUES                                    $ 122,397,886  $ 118,616,971  $ 117,453,024
COST OF GOODS SOLD                             111,611,457    96,588,172     92,298,319
GROSS PROFIT                                   10,786,429     22,028,799     25,154,705
Selling expenses                               917,074        1,216,504      660,934
General and administrative expenses            3,950,934      2,747,514      1,796,995
 Total Operating Expenses                     4,868,008      3,964,018      2,457,929
INCOME FROM OPERATIONS                         5,918,421      18,064,781     22,696,776
Financial expenses, net                        (3,556,045)    (3,480,766)    (2,437,426)
Other income, net                              911,430        609,666        151,757
INCOME BEFORE INCOME TAX                       3,273,806      15,193,681     20,411,107
INCOME TAX                                     (557,428)      (2,139,029)    (2,865,372)
NET INCOME                                     2,716,378      13,054,652     17,545,735
LESS: NET INCOME ATTRIBUTABLE TO
NONCONTROLLING INTEREST                        335,099        1,506,947      2,897,397
NET INCOME ATTRIBUTABLETO OSSEN INNOVATION
CO.,LTD                                        2,381,279      11,547,705     14,648,338
AND SUBSIDIARIES
OTHER COMPREHENSIVE INCOME
Foreigncurrencytranslationgain              703,573        3,102,645      1,649,960
TOTAL OTHER COMPREHENSIVE INCOME               703,573        3,102,645      1,649,960
COMPREHENSIVE INCOME                         $ 3,084,852    $ 14,650,350   $ 16,298,298
EARNINGSPERORDINARYSHARE
Basic and diluted                            $ 0.12         $ 0.58         $ 0.97
WEIGHTEDAVERAGEORDINARYSHARESOUTSTANDING
Basic and diluted                              19,942,333     20,000,000     15,150,685







OSSEN INNOVATION CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Audited)




                                Year Ended December 31,
                                  2012            2011            2010
CASH FLOWS FROM OPERATING
ACTIVITIES:
 Net income                  $ 2,716,378     $ 13,054,652    $ 17,545,735
 Adjustments to reconcile
net income to net cash

 provided by/ (used in)
operating activities:
 Depreciation and              1,601,197       2,007,263       1,838,794
amortization
 Share-based compensation      86,799          105,605         19,096
expense
Changes in operating assets
and liabilities:
(Increase) Decrease In:
 Accounts receivable           2,315,342       (34,717,230)    1,824,595
 Inventories                   7,415,620       10,727,118      (17,742,920)
 Advance to suppliers          (36,557,323)    (16,318,824)    (5,238,789)
 Other current assets          4,590,616       3,151,939       (2,378,426)
 Notes receivable - bank       10,457,537      6,785,312       (17,486,720)
acceptance notes
 Notes receivable from
related party - bank              (1,830,208)     3,024,895       (1,196,661)
acceptance notes
 Account receivable from       20,799          686,688         (707,487)
related party
Increase (Decrease) In:
 Accounts payable              (376,169)       (1,545,190)     2,253,390
 Customer deposits             (75,312)        (373,853)       (4,355,991)
 Income tax payable            386,561         (657,793)       552,092
 Other payables and accrued    480,773         229,913         62,037
expenses
Net cash used in operating        (8,767,390)     (20,143,383)    (25,011,255)
activities
CASH FLOWS FROM INVESTING
ACTIVITIES:
 Purchases of plant and        (32,856)        (156,288)       (73,466)
equipment
 Prepayment for purchases      (1,584)         (5,941)         (7,562,237)
of plant and equipment
 Disposal of property,         1,458           -               -
plant and equipment
Net cash used in investing        (32,982)        (162,229)       (7,635,703)
activities
CASH FLOWS FROM FINANCING
ACTIVITIES:
 Increase in restricted        (5,642,598)     (5,965,883)     (1,974,804)
cash
 Proceeds from short-term      68,716,602      75,184,567      57,578,620
bank loans
 Repayments of short-term      (66,384,299)    (65,543,772)    (46,603,583)
bank loans
 Proceeds from long-term       -               4,718,094       -
bank loans
 Repayments of long-term       (316,877)       -               -
bank loans
 Proceeds from notes           76,842,639      50,433,168      50,216,280
payable-bank acceptance notes
 Repayment of notes            (64,959,757)    (51,598,637)    (43,947,109)
payable-bank acceptance notes
 Repurchase of common share    (96,608)        -               -
 Proceeds from issuance of
ordinary shares to public,        -               -               20,345,000

 net of issuance cost
 IPO compensation              -               440,955         -
Net cash provided by financing    8,159,102       7,668,492       35,614,404
activities
INCREASE (DECREASE) IN CASH       (641,270)       (12,637,120)    2,967,446
AND CASH EQUIVALENTS
 Effect of exchange rate       1,069,773       1,882,399       946,069
changes on cash
 Cash and cash equivalents     1,568,261       12,322,982      8,409,467
at beginning of period
CASH AND CASH EQUIVALENTS AT    $ 1,996,764     $ 1,568,261     $ 12,322,982
END OF PERIOD
SUPPLEMENTARY CASH
FLOWINFORMATION
Cash paid during the periods:
 Income taxes paid           $ 310,355       $ 2,863,026     $ 2,355,451
 Interest paid               $ 3,676,992     $ 2,998,929     $ 1,949,982
Non-cash transactions:
Appropriation to statutory      $ 294,219       $ 1,210,351     $ 1,581,126
reserve
Debt forgiven by shareholder    $ -             $ -             $ 12,924,000





SOURCE Ossen Innovation Co., Ltd.

Website: http://www.osseninnovation.com