Ossen Innovation, a manufacturer of pre-stressed steel materials, announced its financial results for the first quarter ended March 31, 2016.
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For the three months ended March 31, 2016, revenues increased by $3.3 million, or 12.4%, to $30.1 million from $26.8 million for the same period of last year.
This increase was primarily due to increased revenue contribution from plain surface PC strands and other products and partially offset by decrease in sales from coated PC steel materials.
The sales of coated PC steel materials, including both rare earth and zinc coated products, decreased by $12.5 million, or 56.8%, to $9.5 million and accounted for 32% of total sales for the three months ended March 31, 2016 from $22.1 million, or 82% of total sales, for the same period of last year.
This decrease was the combined result of decreases in both sales volume and average selling prices for both rare earth and zinc coated products. Sales of rare earth coated products decreased by $8.9 million, or 49.2%, to $9.2 million for the three months ended March 31, 2016 from $18.2 million for the same period of last year.
Sales of zinc coated products decreased by $3.6 million, or 92.6%, to $0.3 million for the three months ended March 31, 2016 from $3.9 million for the same period of last year.
Sales of plain surface PC strands and others increased by $15.9 million, or 337.6%, to $20.6 million and accounted for 68% of total sales for the three months ended March 31, 2016 from $4.7 million, or 18% of total sales, for the same period of last year.
This increase was mainly due to increased contribution from other products, including sales of steel wire and services that together contributed $19.1 million in revenues for the three months ended March 31, 2016 versus $0.3 million for the same period of last year.
Gross profit decreased by $0.5 million, or 13.8%, to $3.1 million for the three months ended March 31, 2016 from $3.6 million for the same period of last year. Gross margin decreased to 10.4% for the three months ended March 31, 2016 from 13.5% for the same period of last year.
Gross margins for rare earth and zinc coated products were 1.9% and 33.7%, respectively, for the three months ended March 31, 2016, compared to 11.5% and 26.2%, respectively, for the same period of last year.
Gross margin for plain surface PC strands and others was 13.9% for the three months ended March 31, 2016, compared to 11.2% for the same period of last year due to higher gross margin of plain surface products in the first quarter of 2016.
Selling expenses increased by $0.1 million, or 86.6%, to $0.2 million for the three months ended March 31, 2016 from $0.1 million for the same period of last year. The increase was due to higher transportation cost and higher commission fees.
General and administrative expenses decreased by $0.5 million, or 25.4%, to $1.4 million for the three months ended March 31, 2016 from $1.8 million for the same period of last year, mainly due to the decrease in bad debt provision in the first quarter of 2016.
As a result, total operating expenses decreased by $0.4 million, or 18.3%, to $1.6 million for the three months ended March 31, 2016 from $2.0 million for the same period of last year.
Operating income decreased by $0.1 million, or 8.4%, to $1.5 million for the three months ended March 31, 2016 from $1.7 million for the same period of last year.
Operating margin was 5.1% for the three months ended March 31, 2016, compared to 6.2% for the same period of last year.
Net income decreased by $0.3 million, or 33.6%, to $0.6 million for the three months ended March 31, 2016 from $0.9 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 46.5%, to $0.5 million for the three months ended March 31, 2016 from $0.9 million for the same period of last year.
Earnings per share, both basic and diluted, were $0.02 for the three months ended March 31, 2016, compared to $0.04 for the same period of last year. ■