Ossen Innovation Q2 revenues decreased 9.4%
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For the three months ended June 30, 2016, revenues decreased by $2.4 million, or 9.4%, to $23.4 million from $25.9 million for the same period of last year.
Sales of rare earth coated products increased by $1.0 million.
The sales of coated PC steel materials, including both rare earth and zinc coated products, decreased by $1.2 million, or 5.6%, to $21.0 million and accounted for 89% of total sales for the three months ended June 30, 2016 from $22.2 million, or 86% of total sales, for the same period of last year.
This decrease was the result of decreases in average selling prices for both rare earth and zinc coated products and sales volume for zinc coated products and partially offset by increased sales volume from rare earth coated products.
Sales of rare earth coated products increased by $1.0 million, or 5.0%, to $20.7 million for the three months ended June 30, 2016 from $19.7 million for the same period of last year.
Sales of zinc coated products decreased by $2.2 million, or 89.0%, to $0.3 million for the three months ended June 30, 2016 from $2.5 million for the same period of last year.
Sales of plain surface PC strands and others decreased by $1.1 million, or 30.7%, to $2.5 million and accounted for 10.8% of total sales for the three months ended June 30, 2016 from $3.7 million, or 14.2% of total sales, for the same period of last year.
Gross profit decreased by $0.8 million, or 25.3%, to $2.5 million for the three months ended June 30, 2016 from $3.3 million for the same period of last year. Gross margin decreased to 10.5% for the three months ended June 30, 2016 from 12.7% for the same period of last year.
Gross margins for rare earth and zinc coated products were 10.1% and 32.4%, respectively, for the three months ended June 30, 2016, compared to 9.2% and 20.3%, respectively, for the same period of last year.
The increase in gross margins of zinc coated products was primarily due to switching to lower price raw materials. Gross margin for plain surface PC strands and others was 13.3% for the three months ended June 30, 2016, compared to 26.2% for the same period of last year.
The decrease was due to lower gross margin of other products sold and services rendered in the second quarter of 2016, while gross margin of plain surface PC strands was flat at approximately 24.3% compared to the same period of last year.
Selling expenses decreased by $0.2 million, or 52.0%, to $0.2 million for the three months ended June 30, 2016 from $0.4 million for the same period of last year. The decrease was due to lower commission fees.
General and administrative expenses increased by $0.5 million, or 52.3%, to $1.3 million for the three months ended June 30, 2016 from $0.9 million for the same period of last year, mainly due to higher research and development cost in the second quarter of 2016.
As a result, total operating expenses increased by $0.3 million, or 20.5%, to $1.5 million for the three months ended June 30, 2016 from $1.3 million for the same period of last year.
Operating income decreased by $1.1 million, or 54.0%, to $0.9 million for the three months ended June 30, 2016 from $2.0 million for the same period of last year. Operating margin was 4.0% for the three months ended June 30, 2016, compared to 7.8% for the same period of last year.
Net income decreased by $1.0 million, or 77.3%, to $0.3 million for the three months ended June 30, 2016 from $1.4 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 $1.0 million, or 77.2%, to $0.3 million for the three months ended June 30, 2016 from $1.3 million for the same period of last year.
Earnings per share, both basic and diluted, were $0.02 for the three months ended June 30, 2016, compared to $0.07 for the same period of last year. ■