Breaking News

Tweet TWEET

Ossen Innovation Announces Third Quarter 2013 Financial Results

       Ossen Innovation Announces Third Quarter 2013 Financial Results

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

PR Newswire

SHANGHAI, Dec. 9, 2013

SHANGHAI, Dec. 9, 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 nine
months ended September 30, 2013.

"The market for steel materials used in infrastructure projects in China
continued to be challenging in the third quarter of 2013," said Dr. Liang
Tang, Chairman of Ossen Innovation. "However, I am pleased to report that
Ossen continued to sell more of our higher margin, pre-stressed coated
products as a percentage of total sales. Combined with lower raw material
prices, this resulted in improved gross profit, gross margin and increased
earnings for the third quarter and nine months ended September 30, 2013.
Although the domestic infrastructure environment remains challenging, we
continue to focus on driving sales of higher margin products and maintaining
conservative operating expenses," concluded Dr. Tang.

Financial Summary

(in millions ex- EPS) Q3 2013 Q3 2012 Chg.  YTD 2013 YTD 2012 Chg.
Revenue               $33.1   $41.1   -19%  $71.9    $95.0    -24%
Gross Profit          $3.9    $2.9    +33%  $8.5     $7.7     +10%
Net Income*           $1.7    $0.7    +126% $2.5     $1.1     +127%
EPS                   $0.08   $0.04   +100% $0.12    $0.05    +140%
Shares Outstanding    19.9    20.0    -0.9% 19.9     20.0     -0.3%

*Net income attributable to Ossen Innovation Co., Ltd.

Third Quarter 2013 Financial Results

Revenue for the three months ended September 30, 2013 was $33.1 million, down
19% from the same period a year ago. Sales of coated pre-stressed steel
materials, including rare earth and zinc coated products, were approximately
$24.3 million, down 8% compared to approximately $26.4 million in the third
quarter of 2012. Sales of plain surface PC strands were $4.9 million for the
three months ended September 30, 2013, a decrease of $5.9 million compared to
the prior year. These decreases are primarily due to lower demand of coated
pre-stressed steel materials and plain surface PC strands because of a
decrease in large scale infrastructure projects and increased price
competition.

Gross profit increased from $2.9 million to $3.9 million, a 33% year-over-year
increase. Gross margin was 11.7%, up from 7.1% in the third quarter of 2012.
Gross profit and gross margin were higher as a result of lower raw material
prices and an increase in sales of higher margin coated pre-stressed steel
materials as a percentage of total sales in the third quarter of 2013 compared
to the prior year period.

Selling expenses were reduced by 47% to $0.2 million due to a decrease in
total sales. General and administrative expenses were $0.8 million, an
increase of 63% compared to $0.5 million in the third quarter of 2012 due to
higher R&D expenses related to Japanese Industrial Standards certification.
Operating income was approximately $2.9 million, an increase of 36% from the
same period a year ago.

Net income attributable to Ossen Innovation Co., Ltd. was $1.7 million in the
third quarter of 2013 compared to $0.7 million in the year-ago period.
Earnings per share were $0.08 versus $0.04 a year ago. The weighted average
diluted shares outstanding were 19.9 million compared to 20.0 million. 

Nine Months Ended September 30, 2013 Financial Results

Revenue for the nine months ended September 30, 2013 was $71.9 million, down
24% from the same period a year ago. Sales of coated pre-stressed steel
materials, including rare earth and zinc coated products, were approximately
$61.8 million, down 13% compared to approximately $71.0 million in the same
period of 2012. Sales of plain surface PC strands were $10.1 million for the
nine months ended September 30, 2013, a decrease of $13.9 million compared to
the prior year. These decreases are primarily due to lower demand of coated
pre-stressed steel materials and plain surface PC strands because of a
decrease in large scale infrastructure projects and increased price
competition. 

Gross profit increased from $7.7 million to $8.5 million, a 10% year-over-year
increase. Gross margin was 11.8%, up from 8.1% in the same period of 2012.
Gross margin was higher as a result of lower raw material prices and an
increase in sales of higher margin coated pre-stressed steel materials as a
percentage of total sales in 2013 compared to the prior year period.

Selling expenses were reduced by 31% to $0.4 million due to a decrease in
total sales. General and administrative expenses were $2.4 million, down 17%
compared to $2.9 million in the same period of 2012 due to lower audit fees
and R&D expenses. Operating income was approximately $5.6 million, an increase
of 35% from the same period a year ago.

Net income attributable to Ossen Innovation Co., Ltd. was $2.5 million in the
nine months ended September 30, 2013 compared to $1.1 million in the year-ago
period. Earnings per share were $0.12 versus $0.05 a year ago. The weighted
average diluted shares outstanding were 19.9 million compared to 20.0 million.


Balance Sheet and Cash Flows

Ossen had approximately $35.0 millionof cash and restricted cash as
ofSeptember 30, 2013compared to$27.4 millionatDecember 31, 2012. Total
accounts receivable on September 30, 2013 increased to $51.1 million from
$45.7 million on December 31, 2012. The average accounts receivable days sales
outstanding were 139 days in the third quarter of 2013 compared to 101 days in
the third quarter of 2012 which was primarily due to a decrease in total
sales. The balance of prepayments to suppliers of raw materials was $55.6
million as of September 30, 2013, a decrease of $22.4 million compared with
December 31, 2012. The decrease was mainly due to the Company receiving a
large delivery of raw materials from two major suppliers during the first nine
months of 2013. Accordingly, inventories increased from $9.8 million at
December 31, 2012 to $16.6 million at September 30, 2013. Total working
capital was $76.6 million at September 30, 2013.

The Company generated positive cash flows from operations of $18.0 million for
the nine months ended September 30, 2013 as compared to $13.0 million of
outflows for the same period of 2012. The primary reasons for the increase in
cash generated in operations were an increase in customer deposits and a
decrease in advance to suppliers during the first nine months of 2013,
partially offset by higher inventories and accounts receivable.

Cash flow used by financing activities was $21.9 million for the nine months
ended September 30, 2013 as compared to cash flow provided by financing
activities of $12.9 million for the same period of 2012. The primary reasons
for the increase in cash used by financing activities were increases in
restricted cash, repayments of bank loans and notes payable, and a decrease in
proceeds from short-term bank loans due to the Chinese government's prudent
monetary policy.

Business Updates and Outlook

Ossen believes that the Chinese central government will continue to stimulate
economic growth by further injecting capital into the economy by funding new
infrastructure projects. While Ossen does not believe that the Chinese
government will initiate another large scale, comprehensive capital injection,
the Company believes that infrastructure spending will be selectively targeted
at developing regions in Central or Western China. Furthermore, Ossen expects
spending by local governments on regional infrastructure development, all of
which should create additional bidding opportunities for the Company in 2014
and beyond.

In addition, Ossen recently announced that it has been awarded two contracts
to supply its plain surface steel strands for new infrastructure projects in
Anhui Province. The first contract is to supply 2,500 tons of plain surface
steel strands for the renovation of the G205 national highway's Cihu to Caishi
section. This renovation project, overseen by the Chinese Ministry of
Transport, will use the steel strands for long span prestressed concrete
structures of the overpass. The second contract is to supply 18,000 tons of
plain surface steel strands for the construction of the Wangdong Yangtze River
highway bridge upstream of the Wan River in Anhui Province. This construction
project, overseen by the Anhui Province Planning Department, will use the
steel strands for long span prestressed concrete structures of the bridge
approach. Based on information received from the Ministry of Transport and the
Anhui Province Planning Department, respectively, Ossen expects to begin
delivery of these plain surface steel strands in the first half of 2014.

Furthermore, Ossen announced that it has been awarded a contract to supply
15,000 tons of plain surface steel strands to a construction company
responsible for building the new Jiujiang express loop highway in Jiujiang
City, Jiangxi Province, China. The steel strands will be used in the
construction of bridges and elevated highways in this infrastructure project.
Based on information received from the construction company responsible for
building the Jujiang express loop highway, Ossen expects to begin delivery of
the plain surface steel strands in the first quarter of 2014.

Finally, Ossen expects Q4 2013 sales will be similar to the third quarter of
2013 while 2014 results are expected to significantly improve over 2013,
provided that the industry is not impeded by the problemsit encountered this
past year, including government regulation and lack of liquidity among lending
institutions.

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 2013 Conference Call" or be prepared to utilize the conference ID.

Conference Call                 Ossen Innovation Third Quarter 2013 Conference
                                Call
Date:                           Monday, December 9, 2013
Time:                           9:00 am Eastern Time, US
Conference Line Dial-In (U.S.): +1-845-675-0437
                                United States: +1-866-519-4004
International Toll Free:        China, Domestic Mobile: 4006208038
                                China, Domestic: 8008190121
Conference ID:                  19296069

Please dial in at least 10 minutes before the call to ensure timely
participation. A playback will be available through December 17, 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 19296069 for
the replay.

This call is being webcast and can be accessed by clicking on this
link:http://www.media-server.com/m/p/rpe2si4h

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

                                                 September 30,    December 31,
                                                 2013             2012
                                                 (Unaudited)
ASSETS
Current Assets
Cash and cash equivalents                      $ 2,298,617      $ 1,996,764
Restricted cash                                  32,694,705       25,407,499
Notes receivable – bank acceptance notes         -                394,079
Accounts receivable, net of allowance for
doubtful accounts of

 $1,286,407 and $1,277,091 at September 30,     51,094,124       45,734,381
2013 and December

 31,2012, respectively
Inventories                                      16,572,561       9,807,044
Advance to suppliers                             55,558,438       77,948,496
Other current assets                             2,205,884        1,904,626
Notes receivable from related party – bank       -                1,830,208
acceptance notes
 Total Current Assets                           160,424,329      165,023,097
Property, plant and equipment, net               8,888,337        9,707,587
Land use rights, net                             4,361,318        4,317,669
Prepayment for plant and equipment               8,146,031        7,933,361
TOTAL ASSETS                                   $ 181,820,015    $ 186,981,714



OSSEN INNOVATION CO., LTD AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

                                                 September 30,    December 31,
                                                 2013             2012
                                                 (Unaudited)
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Notes payable – bank acceptance notes          $ 48,340,631     $ 36,933,710
Short-term bank loans                            31,388,857       50,679,026
Long term bank loans – current portion           -                4,438,386
Accounts payable                                 408,581          572,305
Customer deposits                                1,828,131        384,602
Income tax payable                               87,223           391,353
Other payables and accrued expenses              1,254,604        805,196
Due to related party                             467,252          -
 Total Current Liabilities                      83,775,279       94,204,578
TOTAL LIABILITIES                                83,775,279       94,204,578
EQUITY
Shareholders' Equity
Ordinary shares, $0.01 par value: 100,000,000
shares authorized,

 20,000,000 shares issued and outstanding as    200,000          200,000
of September 30,

 2013 and December 31, 2012, respectively
Additional paid-in capital                       33,971,455       33,971,455
Statutory reserve                                4,477,623        4,179,027
Retained earnings                                40,467,753       38,311,527
Treasury stock, at cost: 98,041 shares as both
of September 30,                                 (96,608)         (96,608)

 2013 and December 31, 2012
Accumulated other comprehensive income           8,524,134        5,999,214
TOTAL SHAREHOLDERS' EQUITY                       87,544,357       82,564,615
Non-controlling interest                         10,500,379       10,212,521
TOTAL EQUITY                                     98,044,736       92,777,136
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY     $ 181,820,015    $ 186,981,714



OSSEN INNOVATION CO., LTD AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)

                        FOR THE THREE MONTHS ENDED   FOR THE NINE MONTHS
                        SEPTEMBER 30,
                                                     ENDED SEPTEMBER 30,
                        2013           2012          2013          2012
REVENUES              $ 33,118,243  $  41,066,144  $ 71,897,988  $ 94,956,669
COST OF GOODS SOLD      29,239,480     38,141,575    63,407,366    87,224,774
GROSS PROFIT            3,878,763      2,924,569     8,490,622     7,731,895
Operating Expenses:
Selling and             159,249        298,231       439,357       633,325
distribution expenses
General and
administrative          848,110        521,602       2,406,865     2,916,249
expenses
Total Operating         1,007,359      819,833       2,846,222     3,549,574
Expenses
INCOME FROM             2,871,404      2,104,736     5,644,400     4,182,321
OPERATIONS
Other Income
(Expenses):
Financial expenses,     (727,244)      (1,143,588)   (2,458,130)   (2,915,253)
net
Other income, net       38,232         49,374        134,143       383,255
INCOME BEFORE INCOME    2,182,392      1,010,522     3,320,413     1,650,323
TAXES
INCOME TAXES            (333,683)      (156,041)     (577,733)     (318,511)
NET INCOME              1,848,709      854,481       2,742,680     1,331,812
LESS: NET INCOME
ATTRIBUTABLE
                        172,305        113,215       287,858       251,927
 TO NONCONTROLLING
INTEREST
NET INCOME
ATTRIBUTABLE TO

 OSSEN INNOVATION      1,676,404      741,266       2,454,822     1,079,885
CO.,LTD

AND SUBSIDIARIES
OTHER COMPREHENSIVE
INCOME
Foreign currency
translation gain, net   591,937        (174,728)     2,524,920     446,498
of tax
TOTAL OTHER
COMPREHENSIVE           591,937        (174,728)     2,524,920     446,498

INCOME (LOSS)
COMPREHENSIVE INCOME    2,268,341      566,538       4,979,742     1,526,383


EARNINGS PER ORDINARY $ 0.08        $  0.04        $ 0.12        $ 0.05
SHARE

Basic and diluted
WEIGHTED AVERAGE
ORDINARY
                      $ 19,901,959  $  19,919,613  $ 19,901,959  $ 19,954,867
SHARES OUTSTANDING

Basic and diluted



OSSEN INNOVATION CO., LTD AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDER'S EQUITY
(Unaudited)

                                                         Total Ossen Innovation Co., Ltd. Shareholders' Equity
             Ordinary Shares                               Additional   Accumulated                                Non
                                    Treasury Stock         Paid-in      Other                         Retained      Controlling    Total
             $0.01 Par Value                                            Comprehensive    Statutory    Earnings      Interest
             Shares     Amount      Shares   Amount        Capital      Income           Reserve
Balance at                                                                          
December 31, 20,000,000   200,000   (98,041)                                                          38,311,527    10,212,521     92,777,136
2012                                         (96,608)   33,971,455    5,999,214        4,179,027
Net income   -            -         -        -             -            -                -            2,454,822     287,858        2,742,680
Transfer to
statutory    -            -         -        -             -            -                298,596      (298,596)     -              -
reserve
Foreign
currency                                                                               
translation -            -                                -            2,524,920                     -             -              2,524,920
                                    -        -                                           -
 adjustment
Balance at                                                                            
September    20,000,000 $ 200,000   (98,041) $ (96,608)    33,971,455   8,524,134                   $ 40,467,753  $ 10,500,379   $ 98,044,736
30, 2013                                                $             $                $ 4,477,623



OSSEN INNOVATION CO., LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

                                               Nine Months Ended September 30,
                                                  2013            2012
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                    $  2,742,680     $ 1,331,812
Adjustments to reconcile net income to net
cash provided by/

 (used in) operating activities:
Depreciation and amortization                    1,152,788       1,190,589
Share-based compensation expense                 -               79,276
Changes in operating assets and liabilities:
(Increase) Decrease In:
Accounts receivable                              (5,359,744)     7,501,657
Inventories                                      (6,765,517)     4,774,010
Advance to suppliers                             22,390,059      (34,144,039)
Other current assets                             (301,259)       3,310,212
Notes receivable - bank acceptance notes         394,079         2,948,352
Notes receivable from related party - bank        1,830,208       -
acceptance notes
Account receivable from related party            -               (513,817)
Increase (Decrease) In:
Accounts payable                                 (163,724)       251,104
Customer deposits                                1,443,528       148,935
Income tax payable                               (304,130)       38,206
Other payables and accrued expenses              449,408         96,882
Due to related party                             467,252         -
Net cash provided by/(used in) operating          17,975,628      (12,986,821)
activities
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of plant and equipment                 (14,806)        (28,882)
Prepayment for plant and equipment               -               (1,583)
Net cash used in investing activities             (14,806)        (30,465)



OSSEN INNOVATION CO., LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

                                               Nine Months Ended September 30,
                                                  2013            2012
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in restricted cash                      (7,287,207)     (2,848,766)
Proceeds from short-term bank loans              28,766,506      41,784,077
Repayments of short-term bank loans              (49,171,458)    (44,474,787)
Repayments of long-term bank loans               (4,503,563)     (158,278)
Proceeds from notes payable-bank acceptance      62,406,511      59,354,226
notes
Repayment of notes payable-bank acceptance       (52,112,653)    (40,677,430)
notes
Repurchase of common shares                      -               (87,733)
Net cash provided by/(used in) financing          (21,901,864)    12,891,309
activities
DECREASE IN CASH AND CASH EQUIVALENTS             (3,941,042)     (125,977)
Effect of exchange rate changes on cash          4,242,895       658,425
Cash and cash equivalents at beginning of        1,996,764       1,568,261
period
CASH AND CASH EQUIVALENTS AT END OF PERIOD     $  2,298,617     $ 2,100,709
SUPPLEMENTARY CASH FLOW INFORMATION
Cash paid during the periods:
Income taxes paid                             $  884,946       $ 280,278
Interest paid                                 $  2,428,135     $ 2,778,438
Non-cash transactions:
Appropriation to statutory reserve             $  298,596       $ 155,297



OSSEN INNOVATION CO., LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

                                              Three Months Ended September 30,
                                                 2013             2012
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                   $  1,848,709      $ 854,481
Adjustments to reconcile net income to net
cash provided by/ (used in) operating
activities:
Depreciation and amortization                   383,139          361,743
Share-based compensation expense                -                26,618
Changes in operating assets and liabilities:
(Increase) Decrease In:
Accounts receivable                             (1,290,529)      9,404,698
Inventories                                     (1,343,507)      2,555,970
Advance to suppliers                            17,239,266       (12,743,803)
Other current assets                            (294,734)        2,766,985
Notes receivable - bank acceptance notes        -                15,270
Account receivable from related party           -                (513,817)
Increase (Decrease) In:
Accounts payable                                (6,694,566)      54,347
Customer deposits                               (3,370,578)      257,450
Income tax payable                              (69,176)         (3,057)
Other payables and accrued expenses             330,731          86,437
Due to related party                            (1,121,686)      (316,741)
Net cash provided by operating activities        5,617,069        2,806,581
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of plant and equipment                (493)            (486)
Net cash used in investing activities            (493)            (486)



OSSEN INNOVATION CO., LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

                                              Three Months Ended September 30,
                                                 2013             2012
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in restricted cash                     (1,974,345)      (5,500,566)
Proceeds from short-term bank loans             14,215,839       9,317,286
Repayments of short-term bank loans             (16,544,377)     (15,017,994)
Repayments of long-term bank loans              (4,503,563)      -
Proceeds from notes payable-bank acceptance     16,600,338       19,443,550
notes
Repayment of notes payable-bank acceptance      (14,795,037)     (10,744,423)
notes
Repurchase of common shares                     -                (18,702)
Net cash used in financing activities            (7,001,145)      (2,520,849)
INCREASE/(DECREASE) IN CASH AND CASH             (1,384,569)      285,246
EQUIVALENTS
Effect of exchange rate changes on cash         949,486          (281,630)
Cash and cash equivalents at beginning of       2,733,700        2,097,093
period
CASH AND CASH EQUIVALENTS AT END OF PERIOD    $  2,298,617      $ 2,100,709
SUPPLEMENTARY CASH FLOW INFORMATION
Cash paid during the periods:
Income taxes paid                            $  402,645        $ 159,038
Interest paid                                $  682,581        $ 928,937
Non-cash transactions:
Appropriation to statutory reserve            $  171,856        $ 77,102



SOURCE Ossen Innovation Co., Ltd.

Website: http://www.osseninnovation.com