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 August 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: August 27, 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 Unaudited Financial Results for the Six Months Ended June 30, 2020

 

SHANGHAI, Aug. 27, 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 six months ended June 30, 2020.

 

"Because of the COVID-19 pandemic and China’s economic slowdown during the first half of 2020, our top line decreased slightly. Nonetheless, our gross margin increased to 18.7% as we managed to lower our cost," stated Dr. Liang Tang, Chairman of Ossen Innovation. "Looking ahead, with the anticipated recovery of China's infrastructure investment and economic rebound, we are cautiously optimistic to see recovery in infrastructure investment in the construction industry.”

 

Six Months Ended June 30, 2020 Financial Results

 

    For the Six Months Ended June 30,  
($ millions, except per share data)   2020     2019     % Change  
Revenues   $ 54.9     $ 65.1       -15.7 %
Gross profit   $ 10.3     $ 10.1       1.4 %
Gross margin     18.7 %     15.6 %     3.1 %
Operating income   $ 7.8     $ 7.3       6.9 %
Operating margin     14.3 %     11.2 %     3.1 %
Net income attributable to Ossen Innovation   $ 5.3     $ 5.6       -6.7 %
EPS   $ 0.27     $ 0.29       -6.9 %

 

For the six months ended June 30, 2020, revenues decreased by $10.2 million, or 15.7%, to $54.9 million from $65.1 million for the same period of last year. This decrease was mainly attributable to the decrease in rare earth coated, zinc coated products and other products, partially offset by the increase in plain surface products.

 

Gross profit increased by $0.2 million, or 1.4%, to $10.3 million for the six months ended June 30, 2020 from $10.1 million for the same period of last year. Gross margin increased by 3.1 percentage points to 18.7% for the six months ended June 30, 2020 from 15.6% for the same period of last year. The increase of gross margin was due to the improvement of the profitability of almost all products in our portfolio.

 

Selling expenses increased by $38,512, or 29.4%, to $169,438 for the six months ended June 30, 2020 from $130,926 for the same period of last year. The increase was due to higher freight expenses. General and administrative expenses decreased by $0.4 million, or 14.7%, to $2.3 million for the six months ended June 30, 2020 from $2.7 million for the same period of last year.

 

As a result, total operating expenses decreased by $0.35 million, or 12.6%, to $2.5 million for the six months ended June 30, 2020 from $2.8 million for the same period of last year.

 

 

 

 

Operating income increased by $0.5 million, or 6.9%, to $7.8 million for the six months ended June 30, 2020 from $7.3 million for the same period of last year. The increase in operating income was primarily attributable to the increase in gross profit and the decrease in general and administrative expenses. Operating margin was 14.3% for the six months ended June 30, 2020, compared to 11.2% for the same period of last year.

 

Net income decreased by $0.3 million, or 5.2%, to $5.9 million for the six months ended June 30, 2020 from $6.2 million for the same period of last year.

 

After deducting net income attributable to non-controlling interest, net income attributable to Ossen Innovation decreased by $0.4 million, or 6.7%, to $5.3 million for the six months ended June 30, 2020 from $5.7 million for the same period of last year. Earnings per share, both basic and diluted, were $0.27 for the six months ended June 30, 2020, compared to $0.29 for the same period of last year. Basic and diluted earnings per ADS were $0.81 for the six months ended June 30, 2020, compared with $0.87 for the same period of 2019.

 

Balance Sheet and Cash Flows

 

As of June 30, 2020, the Company had cash and restricted cash of $11.9 million, compared to $8.6 million at December 31, 2019. Accounts receivable were $64.3 million as of June 30, 2020, compared to $72.5 million as of December 31, 2019. The average days of sales of outstanding (”DSO“) were 225 days for the six months ended June 30, 2020, compared to 161 days for the year of 2019. The increase in average DSO was primarily due to the slower payments from our customers during the first half of 2020 as a result of the impact from the pandemic. The balance of prepayment to suppliers for raw materials totaled $75.1 million as of June 30, 2020, compared to $74.4 million at December 31, 2019, due to the expectation of increasing demand of raw materials in the second half of 2020. The Company had inventories of $27.2 million as of June 30, 2020, compared to $15.1 million at the end of 2019. Total working capital was $133.6 million as of June 30, 2020, compared to $130.2 million at December 31, 2019.

 

Net cash provided by operating activities was $3.4 million for the six months ended June 30, 2020, compared to net cash used in operating activities of $13.5 million for the same period of last year. This was primarily due to the decrease in account receivable and less advance to suppliers, partially offset by the increase in inventories. Net cash used in investing activities was $1,127 for the six months ended June 30, 2020, compared to $74,216 for the same period of last year. Net cash provided by financing activities was $2.9 million for the six months ended June 30, 2020, compared to net cash provided by financing activities of $18.8 million for the same period of last year. This was primarily due to the increase in repayments of short-term bank loans.

 

Recent Developments

 

On July 24, 2020, the Company announced that Pujiang International Group Limited (the "Parent"), a Cayman Islands company listed in Hong Kong which indirectly owns 65.9% of the Company, entered into certain facility agreement (the "Agreement") with two financial institutions (the "Lenders"). Pursuant to the Agreement, the Lenders agreed to make a term loan (the "Loan") of up to US$40 million (with a green shoe option of up to US$30 million) to the Parent for 24 months for working capital and investment purposes. The Loan may be extended for another 12 months upon approval of the Lenders. The Loan is secured by, among others, the Parent's 65.9% beneficial ownership in the Company, and guaranteed by the Company, its affiliates and the Parent's affiliates, including Dr. Liang Tang, chairman of the board of directors of the Company.

 

 

 

 

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. The Company has two manufacturing facilities located in Ma'anshan, Anhui Province, and Jiujiang, Jiangxi Province.

 

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

 

Investor Relations
GCI IR
Phone: +1-347-393-4230
Email: info@goldenir.com

 

 

 

 

OSSEN INNOVATION CO., LTD AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

 

    June 30,     December 31,  
    2020     2019  
    (Unaudited)        
ASSETS                
Current Assets                
Cash and cash equivalents   $ 1,454,063     $ 2,576,677  
Restricted cash     10,403,397       6,025,718  
Accounts receivable, net of allowance for doubtful accounts of $705,731 and $ $1,253,571 at June 30, 2020 and December 31,2019, respectively     64,307,044       72,544,202  
Inventories     27,204,367       15,100,328  
Advance to suppliers     75,109,128       74,391,886  
Other current assets     714,326       24,643  
Accounts receivable - related parties     570,271       536,358  
Total Current Assets     179,762,596       171,199,812  
Property, plant and equipment, net     2,687,522       2,948,264  
Land use rights, net     4,098,030       3,288,959  
Deferred tax assets     148,063       206,002  
TOTAL ASSETS   $ 186,696,211     $ 177,643,037  

  

 

 

 

OSSEN INNOVATION CO., LTD AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

 

    June 30,     December 31,  
    2020     2019  
    (Unaudited)        
LIABILITIES AND SHAREHOLDERS’ EQUITY                
Current Liabilities                
Notes payable – bank acceptance notes   $ 10,898,797     $ 8,895,107  
Short-term bank loans     17,622,081       17,072,867  
Accounts payable     2,874,300       951,358  
Customer deposits     6,226,397       3,131,916  
Income tax payable     906,569       1,417,176  
Other payables and accrued expenses     3,634,493       3,875,529  
Customer deposits - related parties     1,307,377       3,358,897  
Due to related parties     2,646,172       2,297,639  
Total Current Liabilities     46,116,186       41,000,489  
Long-term bank loans     6,015,570       6,097,453  
TOTAL LIABILITIES     52,131,756       47,097,942  
                 
Shareholders' Equity                
Ordinary shares, $0.01 par value: 100,000,000 shares authorized, 20,000,000 shares issued; 19,791,110 shares outstanding as of June 30, 2020 and December 31, 2019, respectively     200,000       200,000  
Additional paid-in capital     33,971,455       33,971,455  
Statutory reserve     9,661,185       9,043,010  
Retained earnings     83,130,110       78,484,535  
Treasury stock, at cost: 208,890 shares as both of June 30, 2020 and December 31, 2019     (192,153 )     (192,153 )
Accumulated other comprehensive loss     (7,624,205 )     (5,789,815 )
TOTAL SHAREHOLDERS’ EQUITY     119,146,392       115,717,032  
Non-controlling interest     15,418,063       14,828,063  
TOTAL EQUITY     134,564,455       130,545,095  
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY   $ 186,696,211     $ 177,643,037  

 

 

 

 

OSSEN INNOVATION CO., LTD AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(Unaudited)

 

    FOR THE SIX MONTHS ENDED JUNE 30,  
    2020     2019  
             
REVENUES   $ 54,850,700     $ 65,078,854  
COST OF GOODS SOLD     44,587,771       54,957,652  
GROSS PROFIT     10,262,929       10,121,202  
Operating Expenses:                
Selling and distribution expenses     169,438       130,926  
General and administrative expenses     2,276,815       2,678,356  
Total Operating Expenses     2,446,253       2,809,282  
INCOME FROM OPERATIONS     7,816,676       7,311,920  
Other Income (Expenses):                
Financial expenses, net     (1,570,173 )     (731,974 )
Other income, net     34,881       45,226  
INCOME BEFORE INCOME TAXES     6,281,384       6,625,172  
INCOME TAXES     (427,634 )     (448,781 )
NET INCOME     5,853,750       6,176,391  
LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST     590,000       532,394  

NET INCOME ATTRIBUTABLE TO OSSEN INNOVATION CO.,LTD AND SUBSIDIARIES

    5,263,750       5,643,997  
OTHER COMPREHENSIVE LOSS                
Foreign currency translation loss, net of tax     (1,834,390 )     (252,155 )
TOTAL OTHER COMPREHENSIVE LOSS     (1,834,390 )     (252,155 )
COMPREHENSIVE INCOME     3,429,360       5,391,842  
EARNINGS PER ORDINARY SHARE                

Basic and diluted

  $ 0.27     $ 0.29  
WEIGHTED AVERAGE ORDINARY SHARES OUTSTANDING                

Basic and diluted

  $ 19,791,110     $ 19,791,110  

 

 

 

 

OSSEN INNOVATION CO., LTD AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDER’S EQUITY

(Unaudited)

 

    Total Ossen Innovation Co., Ltd. Shareholders’ Equity              
   

Ordinary Shares

$0.01 Par Value

    Treasury Stock     Additional Paid-in     Accumulated Other
Comprehensive 		    Statutory     Retained     Non Controlling        
    Shares     Amount     Shares     Amount     Capital     Income     Reserve     Earnings     Interest     Total  
Balance at December 31, 2019     20,000,000       200,000       (208,890 )     (192,153 )     33,971,455       (5,789,815 )     9,043,010       78,484,535       14,828,063       130,545,095  
Net income     -       -       -       -       -       -       -       5,263,750       590,000       5,853,750  
Transfer to statutory reserve     -       -       -       -       -       -       618,175       (618,175 )     -       -  
Foreign currency translation
adjustment 		    -       -       -       -       -       (1,834,390 )     -       -       -       (1,834,390 )
Balance at June 30, 2020     20,000,000     $ 200,000       (208,890 )   $ (192,153 )   $ 33,971,455     $ (7,624,205 )   $ 9,661,185     $ 83,130,110     $ 15,418,063     $ 134,564,455  

 

 

 

 

OSSEN INNOVATION CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

    Six Months Ended June 30,  
    2020     2019  
CASH FLOWS FROM OPERATING ACTIVITIES:                
Net income   $ 5,853,750     $ 6,176,391  
Adjustments to reconcile net income to net cash provided by/ (used in) operating activities:                
Depreciation and amortization     275,652       309,983  
Changes in operating assets and liabilities:                
(Increase) Decrease In:                
Accounts receivable     8,237,159       4,897,473  
Inventories     (12,104,038 )     7,599,204  
Advance to suppliers     (717,242 )     (31,704,863 )
Other current assets     (689,684 )     3,043  
Accounts receivable - related parties     (33,913 )     (801,511 )
Deferred tax assets     57,939       5,814  
Increase (Decrease) In:                
Accounts payable     1,922,942       2,879,547  
Customer deposits     3,094,481       353,627  
Income tax payable     (510,606 )     (277,676 )
Other payables and accrued expenses     (241,036 )     (99,840 )
Customer deposits - related parties     (2,051,520 )     (3,740,404 )
Due to related parties     348,532       2,559,998  
Due to shareholder     -       (1,695,259 )
Net cash provided by/ (used in) operating activities     3,442,416       (13,534,473 )
                 
CASH FLOWS FROM INVESTING ACTIVITIES:                
Purchases of plant and equipment     (1,127 )     (74,216 )
Net cash used in investing activities     (1,127 )     (74,216 )

 

 

 

 

OSSEN INNOVATION CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

    Six Months Ended June 30,  
    2020     2019  
CASH FLOWS FROM FINANCING ACTIVITIES:                
Proceeds from short-term bank loans     44,091,837       28,495,089  
Repayments of short-term bank loans     (43,307,030 )     (8,489,469 )
Proceeds from notes payable-bank acceptance notes     3,567,301       1,476,429  
Repayment of notes payable-bank acceptance notes     (1,426,920 )     (2,657,573 )
Net cash provided by financing activities     2,925,188       18,824,476  
                 
INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH     6,366,477       5,215,785  
Effect of exchange rate changes on cash, cash equivalents, and restricted cash     (3,111,412 )     (485,440 )
Cash, cash equivalents and restricted cash at beginning of period     8,602,395       8,098,052  
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD   $ 11,857,460     $ 12,828,397  
                 
SUPPLEMENTARY CASH FLOW INFORMATION                
Cash paid during the periods:                
Income taxes paid   $ 867,580     $ 1,102,556  
Interest paid   $ 1,484,798     $ 735,675  
Non-cash transactions:                
Appropriation to statutory reserve   $ 618,175     $ 645,941