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 May 2020

 

Commission File Number 001-34999

    

OSSEN INNOVATION CO., LTD.

(Translation of registrant’s name into English)

 

518 SHANGCHENG ROAD, FLOOR 17

SHANGHAI, CHINA 200120

(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.
Date: May 19, 2020    
     
  By:   /s/ Wei Hua
    Name: Wei Hua
    Title: Chief Executive Officer

 

 

 

 


EXHIBIT INDEX

 

Exhibit
Number
  Description
     
99.1   Press Release

 

 

 

 

Exhibit 99.1

 

Ossen Innovation Announces Full Year 2019 Financial Results

  

SHANGHAI, May 19, 2020 /PRNewswire/ -- Ossen Innovation Co., Ltd. (“Ossen Innovation” 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 fiscal year ended December 31, 2019.

 

“Despite 2019 being another challenging year for China's steel industry, as slowing GDP growth and high price volatility continued to plague the steel value chain, we managed to continue improving our operation results by focusing on high margin rare earth coated products,” commented Dr. Liang Tang, Chairman of Ossen Innovation. “We are very pleased with the progress and accomplishments our entire team made during the 2019 calendar year.”

 

“We would like to extend our gratitude to medical personnel, health officials and volunteers in China who worked tirelessly to respond to the COVID-19 pandemic,” continued Dr. Tang. “Our manufacturing facilities in China remain fully operational since March 9, 2020 and we have maintained high standards for safety and sanitation in our manufacturing facilities. In response to the impact of the COVID-19 pandemic, China’s central and local governments have announced key infrastructure project investment plans for 2020. The total investment is approximately $3.6 trillion and the planned investment in 2020 is approximately $500 billion. As the Company’s business is closely connected with the infrastructure investment in China, we believe that these developments should create new opportunities for us in 2020 and beyond.”

 

Twelve months Ended December 31, 2019 Financial Results

 

   For the Twelve Months Ended December 31, 
($ millions, except per share data)  2019   2018   % Change 
Revenues  $138.9   $136.1    2.1%
Gross profit  $22.4   $20.5    9.0%
Gross margin   16.1%   15.1%   1.0%
Operating income  $15.8   $14.9    6.1%
Operating margin   11.4%   11.0%   0.4%
Net income attributable to Ossen Innovation  $11.1   $10.4    6.7%
EPS (per ordinary share)  $0.56   $0.52    7.7%
EPS (per ADS*)  $1.68   $1.56    7.7%

 

* One ADS equals to three ordinary shares.

 

For the twelve months ended December 31, 2019, revenues increased by $2.8 million, or 2.1%, to $138.9 million from $136.1 million for 2018. The increase in revenues during the year ended December 31, 2019 was mainly attributable to a 3.8% increase in sales of rare earth coated PC wires and PC strands and a 151.8% increase in other products, partially offset by a 41.4% decrease in plain surface products and a 2.9% decrease in zinc coated PC wires and PC strands.

 

Gross profit increased by $1.9 million, or 9.0%, to $22.4 million for the twelve months ended December 31, 2019 from $20.5 million for the same period of last year. Gross margin increased by 100 basis points to 16.1% for the twelve months ended December 31, 2019 from 15.1% for the same period of last year. The increase of gross margin was primarily due to the improvement of the profitability of rare earth coated PC wires and PC strands.

 

 

 

 

Selling expenses increased by $0.1 million, or 9.2%, to $0.4 million for the twelve months ended December 31, 2019 from $0.3 million for the same period of last year. This increase was primarily due to higher transportation cost for domestic sales in 2019, partially offset by lower freight and sales commission for international sales. General and administrative expenses increase by $0.9 million, or 16.9%, to $6.2 million for the twelve months ended December 31, 2019 from $5.3 million for the same period of last year, mainly due to higher research and development cost in 2019. As a result, total operating expenses increased by $0.9 million, or 16.5%, to $6.5 million for the twelve months ended December 31, 2019 from $5.6 million for the same period of last year.

 

Operating income increased by $0.9 million, or 6.1%, to $15.8 million for the twelve months ended December 31, 2019 from $14.9 million for the same period of last year. This increase was primarily due to higher sales and gross profit. Operating margin was 11.4% for the twelve months ended December 31, 2019, compared to 11.0% for the same period of last year.

 

Net income increased by $0.8 million, or 7.4%, to $12.2 million for the twelve months ended December 31, 2019 from $11.4 million for the same period of last year.

 

After deducting net income attributable to non-controlling interest, net income attributable to Ossen Innovation increased by $0.7 million, or 6.7%, to $11.1 million for the twelve months ended December 31, 2019 from $10.4 million for the same period of last year. Earnings per ordinary share, both basic and diluted, were $0.56 for the twelve months ended December 31, 2019, compared to $0.52 for the same period of last year. Earnings per ADS (one ADS equals to three ordinary shares), both basic and diluted, were $1.68 and $1.56 for 2019 and 2018, respectively.

 

Impact of COVID-19

 

From the beginning of 2020 until early March 2020, due to the widespread of the COVID-19 pandemic in China, many cities imposed travel and work restrictions in efforts to curb the spread of COVID-19. As a result, the factories situated in Jiujiang and Maanshan were temporarily closed after the Chinese New Year holiday until the second week of March 2020, and the supply of the raw materials was affected in February 2020. Since then, the factories are fully operational. Due to the travel and work restrictions in order to curb the widespread of COVID-19 in China since the end of January 2020, many cities in China were under lockdown. As a result, production and sales orders were delayed. Restrictions on the movement of people and goods currently remain in place in certain regions from time to time as the COVID-19 pandemic situation fluctuates, which requires the Company to adapt certain of the sales and delivery processes. This may affect the overall financial performance in 2020, although the Company cannot quantify the overall impact for the time being. With the anticipated completion of the construction of new production facility in Jiujiang, Jiangxi Province in 2020, it is expected that the Company’s business scale could be further increased, subject to any future developments relating to COVID-19 and its aftermath.

 

Balance Sheet and Cash Flows

 

As of December 31, 2019, the Company had cash and restricted cash of $2.6 million, compared to $3.4 million at December 31, 2018. Accounts receivable were $72.5 million as of December 31, 2019, compared to $60.6 million at December 31, 2018. The average days of sales of outstanding (DSO) were 175 days for the twelve months ended December 31, 2019, compared to 150 days for the year 2018. The balance of prepayment to suppliers for raw materials totaled $74.4 million as of December 31, 2019, compared to $70.0 million at December 31, 2018. The Company had inventories of $15.1 million as of December 31, 2019, compared to $17.2 million at the end of 2018. Total working capital was $130.2 million as of December 31, 2019, compared to $113.1 million at December 31, 2018.

 

 

 

 

Net cash provided by operating activities was $0.4 million for the twelve months ended December 31, 2019, compared to $7.6 million of net cash provided by operating activities for the same period of last year. This was mainly due to a decrease in inventories, an increase in customer deposits, and an increase in due to related party, partially offset by an increase in accounts receivable, an increase in advance to suppliers, a decrease in customer deposits from related parties, and a decrease in due to shareholder. Net cash used in investing activities was $139,795 for the twelve months ended December 31, 2019, compared to $72,305 for the same period of last year. Net cash provided in financing activities was $2.9 million for the twelve months ended December 31, 2019, compared to $0.7 million of net cash used in financing activities for the same period of last year. This was the result of an increase in proceeds from short-term bank loans and an increase in proceeds from long-term bank loans, partially offset by an increase in repayments of short-term bank loans and an increase in repayments of long-term bank loans.

 

Recent Developments

 

On May 28, 2019, Pujiang International Group Limited, the parent entity of Acme which owns approximately 65.9% of Ossen Innovation Co., Ltd outstanding ordinary shares, was successfully listed and commenced trading on the main board of the Hong Kong Stock Exchange.

 

On November 26, 2019, the Company announced the completion of its 2018 annual general meeting of shareholders. At the Annual Meeting, the Company's shareholders re-elected six directors, Dr. Liang Tang, Mr. Wei Hua, Mr. Junhong Li, Ms. Yingli Pan, and Mr. Zhongcai Wu to the Board of Directors and re-appointed BDO China Shu Lun Pan Certified Public Accountants LLP as the Company's independent registered accounting firm for the fiscal year ending December 31, 2019.

 

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 Ma'anshan, 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:

 

Wei Hua, Chief Executive Officer
Email: int.tr@ossengroup.com
Phone: +86-21-6888-8886
Web: www.osseninnovation.com

 

Investor Relations
GIC IR
Phone: +1-917-207-2173
Email: info@goldenir.com

 

 

 

 

OSSEN INNOVATION CO., LTD AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2019 AND 2018

 

   December 31, 
   2019   2018 
ASSETS        
Current assets          
Cash and cash equivalents  $2,576,677   $3,444,421 
Restricted cash   6,025,718    4,070,655 
Accounts receivable, net of allowance for doubtful accounts of $1,253,571 and $939,535 at December 31, 2019 and 2018, respectively   72,544,202    60,586,869 
Inventories   15,100,328    17,177,926 
Advance to suppliers   74,391,886    69,986,656 
Other current assets   24,643    26,496 
Accounts receivable - related parties   536,358    - 
Total current assets   171,199,812    155,293,023 
Property, plant and equipment, net   2,948,264    3,371,387 
Land use rights, net   3,288,959    3,422,365 
Deferred tax assets   206,002    159,136 
TOTAL ASSETS  $177,643,037   $162,245,911 

 

 

 

 

OSSEN INNOVATION CO., LTD AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2019 AND 2018 (Continued)

 

   December 31, 
   2019   2018 
         
Current Liabilities          
Notes payable-bank acceptance notes  $8,895,107   $8,722,832 
Short-term bank loans   17,072,867    13,593,080 
Accounts payables   951,358    289,954 
Customer deposits   3,131,916    283,869 
Taxes payable   1,417,176    1,547,882 
Other payables and accrued liabilities   3,875,529    3,980,565 
Customer deposits – related parties   3,358,897    4,800,384 
Due to shareholder   -    1,695,259 
Due to related parties   2,297,639    - 
Long-term bank loans – current portion   -    7,269,027 
Total current liabilities   41,000,489    42,182,852 
Long-term bank loans   6,097,453    - 
TOTAL LIABILITIES   47,097,942    42,182,852 
           
EQUITY          
Shareholders' Equity          
Ordinary shares, $0.01 par value: 100,000,000 shares authorized; 20,000,000 shares issued; 19,791,110 shares outstanding as both of December 31, 2019 and 2018   200,000    200,000 
Additional paid-in capital   33,971,455    33,971,455 
Statutory reserve   9,043,010    7,764,813 
Retained earnings   78,484,535    68,673,562 
Treasury stock, at cost: 208,890 shares as of December 31, 2019 and 2018   (192,153)   (192,153)
Accumulated other comprehensive loss   (5,789,815)   (4,044,969)
TOTAL SHAREHOLDERS’ EQUITY   115,717,032    106,372,708 
Non-controlling interest   14,828,063    13,690,351 
TOTAL EQUITY   130,545,095    120,063,059 

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

$177,643,037   $162,245,911 

 

 

 

 

OSSEN INNOVATION CO., LTD AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2019, 2018 AND 2017

 

   Year Ended December 31, 
   2019   2018   2017 
             
REVENUES  $138,900,357   $136,104,867   $132,375,915 
COST OF GOODS SOLD   116,541,972    115,585,803    117,721,799 
GROSS PROFIT   22,358,385    20,519,064    14,654,116 
Selling expenses   357,426    327,365    598,832 
General and administrative expenses   6,155,316    5,263,914    6,002,121 
Total Operating Expenses   6,512,742    5,591,279    6,600,953 
INCOME FROM OPERATIONS   15,845,643    14,927,785    8,053,163 
Financial expenses, net   (2,382,405)   (1,621,486)   (1,610,337)
Other income, net   297,438    208,071    147,108 
INCOME BEFORE INCOME TAX   13,760,676    13,514,370    6,589,934 
INCOME TAX   (1,533,794)   (2,129,387)   (691,556)
NET INCOME   12,226,882    11,384,983    5,898,378 
LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST   1,137,712    1,005,530    553,067 
NET INCOME ATTRIBUTABLE TO OSSEN INNOVATION CO.,LTD
AND SUBSIDIARIES
   11,089,170    10,379,453    5,345,311 
OTHER COMPREHENSIVE INCOME (LOSS)               
Foreign currency translation gain (loss)   (1,744,846)   (6,272,303)   6,606,207 
TOTAL OTHER COMPREHENSIVE INCOME (LOSS)   (1,744,846)   (6,272,303)   6,606,207 
COMPREHENSIVE INCOME  $9,344,324   $4,107,150   $11,951,518 
EARNINGS PER ORDINARY SHARE               
Basic and diluted  $0.56   $0.52   $0.27 
WEIGHTED AVERAGE ORDINARY SHARES OUTSTANDING               
Basic and diluted   19,791,110    19,791,110    19,791,110 

 

 

 

 

OSSEN INNOVATION CO., LTD AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDER’S EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2019, 2018 AND 2017

 

   Total Ossen Innovation Co., Ltd. Shareholders’ Equity 
   Ordinary Shares   Additional Paid-in           Accumulated Other Comprehensive   Statutory   Retained   Non Controlling   Total 
   $0.01 Par Value   Capital   Treasury stock   Income/(loss)   Reserve   Earnings   Interest     
   Shares   Amount       Shares   Amount                     
Balance at January 1, 2017   20,000,000   $200,000   $33,971,455    (208,890)  $(192,153)  $(4,378,873)  $6,123,022   $54,590,589   $12,131,754   $102,445,794 
Net income   -    -    -    -    -    -    -    5,345,311    553,067    5,898,378 
Transfer to statutory reserve   -    -    -    -    -    -    549,232    (549,232)        - 
Foreign currency translation adjustment   -    -    -    -    -    6,606,207    -    -         6,606,207 
Balance at December 31, 2017   20,000,000   $200,000   $33,971,455    (208,890)  $(192,153)  $2,227,334   $6,672,254   $59,386,668   $12,684,821   $114,950,379 
Net income   -    -    -    -    -    -    -    10,379,453    1,005,530    11,384,983 
Transfer to statutory reserve   -    -    -    -    -    -    1,092,559    (1,092,559)        - 
Foreign currency translation adjustment   -    -    -    -    -    (6,272,303)   -    -         (6,272,303)
Balance at December 31, 2018   20,000,000   $200,000   $33,971,455    (208,890)  $(192,153)  $(4,044,969)  $7,764,813   $68,673,562   $13,690,351   $120,063,059 
Net income   -    -    -    -    -    -    -    11,089,170    1,137,712    12,226,882 
Transfer to statutory reserve   -    -    -    -    -    -    1,278,197    (1,278,197)        - 
Foreign currency translation adjustment   -    -    -    -    -    (1,744,846)   -    -         (1,744,846)
Balance at December 31, 2019   20,000,000   $200,000   $33,971,455    (208,890)  $(192,153)  $(5,789,815)  $9,043,010   $78,484,535   $14,828,063   $130,545,095 

 

 

 

 

OSSEN INNOVATION CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2019, 2018 AND 2017

 

   Year Ended December 31, 
   2019   2018   2017 
CASH FLOWS FROM OPERATING ACTIVITIES:               
Net income  $12,226,882   $11,384,983   $5,898,378 
Adjustments to reconcile net income to net cash provided by operating activities:               
Depreciation and amortization   606,045    641,647    796,566 
Changes in operating assets and liabilities:               
(Increase) Decrease In:               
Accounts receivable   (11,957,333)   (8,886,939)   (14,401,465)
Inventories   2,077,598    (3,698,453)   12,519,709 
Advance to suppliers   (4,405,230)   1,294,247    (24,551,618)
Other current assets   1,853    10,894    (6,023)
Deferred tax assets   (46,866)   (9,625)   16,440 
Notes receivable - bank acceptance notes   -    -    15,280,381 
Accounts receivable - related parties   (536,358)   -    - 
Increase (Decrease) In:               
Accounts payable   661,404    (69,973)   (1,144,936)
Customer deposits   2,848,047    (32,524)   180,490 
Income tax payable   (130,706)   1,097,171    (144,084)
Other payables and accrued expenses   (105,037)   (256,258)   2,496,349 
Customer deposits - RPT   (1,441,487)   4,800,384    - 
Due to related party   2,297,639    -    (3,912)
Due to shareholder   (1,695,259)   1,343,760    44,000 
Net cash provided by/ (used in) operating activities   401,192    7,619,314    (3,019,725)
                
CASH FLOWS FROM INVESTING ACTIVITIES:               
Purchases of plant and equipment   (139,795)   (72,305)   (37,848)
Net cash used in investing activities   (139,795)   (72,305)   (37,848)

 

 

 

 

OSSEN INNOVATION CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2019, 2018 AND 2017 (Continued)

 

   Year Ended December 31, 
   2019   2018   2017 
CASH FLOWS FROM FINANCING ACTIVITIES:               
Proceeds from short-term bank loans   85,479,789    17,900,302    13,497,882 
Repayments of short-term bank loans   (81,777,165)   (17,543,051)   (17,380,550)
Proceeds from long-term bank loans   6,171,040    -    - 
Repayments of long-term bank loans   (7,260,047)   -    - 
Proceeds from notes payable-bank acceptance notes   9,002,458    9,063,444    14,662,757 
Repayment of notes payable-bank acceptance notes   (8,712,056)   (10,120,846)   (14,588,702)
Net cash used in financing activities   2,904,019    (700,151)   (3,808,613)
                
INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH   3,165,416    6,846,858    (6,866,186)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash   (2,078,097)   (7,474,935)   8,088,466 
Cash, cash equivalents and restricted cash at beginning of period   7,515,076    8,143,153    6,920,873 
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD  $8,602,395   $7,515,076   $8,143,153 
                
SUPPLEMENTARY CASH FLOW INFORMATION               
Cash paid during the periods:               
Income taxes paid  $1,749,389   $1,019,270   $840,670 
Interest paid  $2,148,285   $1,388,283   $1,397,635 
Non-cash transactions:               
Appropriation to statutory reserve  $1,278,197   $1,092,559   $549,232