Third Quarter 2012 Financial Results
Revenue for the three months ended September 30, 2012 was $41.1 million, an increase of $10 million, or 32%, from the same period a year ago.
Gross profit decreased from $4.2 million to $2.9 million, a 31% year-over-year decline. Gross margin was 7.1%, flat from the second quarter of 2012 and down from 13.6% in the third quarter of 2011.
Gross margin for the third quarter of 2012 were 9.2% and 3.4% for coated pre-stressed steel products and for plain surface pre-stressed steel products, respectively.
Net income attributable to controlling interest decreased 63% to $0.7 million in the third quarter of 2012 from $2 million in the year-ago period.
Earnings per share were $0.04 versus $0.10 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 88,616 shares repurchased by Ossen as of September 30, 2012.
"We had positive revenue growth for a second consecutive quarter," said Dr. Liang Tang, Chairman of Ossen Innovation. "More importantly, we generated positive net income. These developments indicate a rebound in the industry and strong execution from our team. As the market demand improves further, we anticipate our margins to gradually return to historical levels."
Business Updates and Outlook
Accounts receivable collection improved during the first three quarters of 2012. The average accounts receivable days sales outstanding in Q1, Q2 and Q3 of 2012 were 201 days, 145 days and 101 days respectively. The Company expects accounts receiveable collection will further improve and return to the historical levels in the near future.
According to recent government announcements, total investments in railway construction in China will reach RMB530 billion (approx. USD84 billion) in 2013. Funding sources to support these constructions include central government support, bond issuance and bank loans. These funding sources have been secured by the Ministry of Railways in China.
