Fushi Copperweld Reports Fourth Quarter and Full Year 2009 Financial Results
DALIAN, China, March 10 /PRNewswire-Asia-FirstCall/ — Fushi Copperweld, Inc. (Nasdaq: FSIN), the leading global manufacturer and innovator of copper-clad bimetallic wire used in a variety of telecommunication, utility, transportation and other electrical applications, today announced financial results for the fourth quarter and full year ended December 31, 2009.
Fourth Quarter Highlights:
| — | Q4 Net income increased 121% to $10.1 million or $0.34 per diluted share |
| — | Metric tons shipped at Dalian increased 27.1% compared to fourth quarter 2008 |
| — | Q4 Gross profit increased 94% to $17.2 million or 33% of revenue |
| — | Q4 Operating expenses decreased 13.4% or $0.79 million to $4.8 million or 9% of revenue |
| — | Q4 Cash flow from operations totaled $11.5 million |
| — | Cash position at year end remains strong at $60.6 million |
| — | Execution of strategic initiatives provides better visibility into 2010 |
Q4 2009
Revenues for the fourth quarter of 2009 increased 25.9% to $51.7 million, up from $41.1 million in the prior year's quarter, primarily due to a recovery in copper prices and continued strong demand across the board for our CCA products in China, particularly RF cable to support the ongoing 3G network buildout and expansion into the utility market. Volume at the Company's Dalian facility increased 27.1% as compared to the fourth quarter 2008. On a consolidated basis, the Company experienced an increase of 18.0% in metric tons sold.
Gross profit in the fourth quarter increased 94.0% year-over-year to $17.2 million from $8.9 million. Consolidated gross margin increased to 33.3% from 21.6% in the prior year period, driven by cost reductions in manufacturing at the Company's Fayetteville facility, product mix and the absence of extreme volatility in raw material prices experienced in fourth quarter 2008. Gross margin for the Company's Dalian facility increased to approximately 37.7% from 30.6%, while gross margin for the Company's Fayetteville, TN facility improved substantially to 8.7%, an increase of 15.8% compared to the prior year.
Operating expenses in the fourth quarter decreased 13.4% to $4.8 million, compared to $5.5 million in the prior year's quarter. This decrease was due to effective cost reductions in general and administrative expenses and stronger operating leverage. On a percentage basis, operating expenses decreased approximately 9.3% in the current year period from 13.5% in the fourth quarter 2008.
Net income for the 2009 fourth quarter was $10.1 million, or $0.34 per diluted share. This compares with net income of $4.6 million, or $0.16 per diluted share, in the fourth quarter of 2008.
Full Year 2009
For the full year 2009, revenues were $182.9 million, compared to $221.4 million in 2008. Gross profit was $54.8 million, compared to $57.3 million in 2008. Operating profit remained relatively flat at $36.9 million, compared to $37.1 million in 2008, but operating margin in 2009 improved to 20.2% of revenues, compared to 16.7% of revenues in 2008. Net income for the full year was $24.0 million, or $0.84 per diluted share, compared to $28.5 million, or $1.00 per diluted share in 2008. Excluding the non-cash items related to loss resulting from change fair value of derivative liability, one-time gain on redemption of convertible notes, and share-based compensation expense, adjusted non-GAAP net income was $28.9 million, or $1.01 per diluted share in 2009.
Cash flow from operations was $27.1 million for the 2009 full-year period, compared to $0.6 million in 2008. Cash as of December 31, 2009 was $60.6 million, or $2.02 per share. Accounts Receivable increased 35% to $67.3 million driven by extended credit terms to certain customers as well as longer collection cycles as a result of challenging economic conditions. Inventories increased 56% to $10.9 million primarily as a result of higher raw materials prices. Advances to suppliers at the end of 2009 dropped from $20.3 million to $8.6 million.
The Company's debt position was $39.0 million at December 31, 2009 compared to $63.3 million at December 31, 2008. A portion of the proceeds from the Company's follow-on offering completed in February 2010 has been used to retire this remaining debt. The Company ended 2009 with a book value per share of $7.96.
Mr. Li Fu, Chairman and Chief Executive Officer of Fushi Copperweld, commented, "I am very pleased with our performance, both for the fourth quarter and for what was a very challenging year. While much of the world suffered through a global economic slowdown in 2009, growth in China was very strong and we benefitted accordingly. As the rest of the world resumes GDP growth, we continued to deliver highly engineered bi-metallic wire used in a variety of ways throughout the world. In addition, we made important strides in strengthening our business in the fourth quarter by driving new business, entering new markets, lowering our operating expenses, strengthening our balance sheet, and generating strong cash flow from operations. Importantly, with the close of our follow-on offering in February of this year, we have retired most of our debt and are free of the non-financial covenants that limited our growth. Looking ahead, we are optimistic that demand for our value-added products in existing markets and efforts in generating market awareness in new markets will further fuel our growth."
Outlook
Based on current business trends and the visibility the Company has from fourth quarter performance, the Company expects adjusted first quarter fully diluted earnings per share between $0.22 and $0.24 and adjusted full year fully diluted earnings per share between $1.20 and $1.25, both based on an estimated weighted average diluted share count of 33.4 and 35.2 million shares, respectively. This expectation is based on the assumption that the effective tax rate at the consolidated level will be 8%. The 2010 first quarter is seasonally the Company's weakest quarter due to the timing of the Chinese New Year, during which the Company's operating facilities are closed for two weeks. The Company expects profitability in subsequent quarters to improve over the first quarter due to higher revenues with the absence of the Chinese New Year, increased profitability at the Fayetteville facility as a result of cost saving initiatives, and continued incentives from China's stimulus package.
Conference Call
The Company will conduct a conference call to discuss the fourth quarter and full year 2009 results today, Wednesday, March 10, 2010, at 8:30 am ET. Listeners may access the call by dialing 1-866-223-7781. A live webcast of the conference call will also be available at http://www.fushicopperweld.com on the Investor Relations section. A replay of the call will be available at http:///www.fushicopperweld.com on the Investor Relations section or from March 10, 2010 to March 20, 2010 by telephone. Listeners may access the replay by dialing 1-800-408-3053; passcode: 2636737.
Accounting for derivative liability - conversion option and warrants
Effective January 1, 2009, the Company adopted the provisions of EITF Issue 07-5 "Determining Whether an Instrument (or Embedded Feature) Is Indexed to an Entity's Own Stock", which is effective for financial statements for fiscal years beginning after December 15, 2008 and which replaced the previous guidance on this topic in EITF Issue 01-6. As a result, from January 1, 2009, the Company was required to separately account for the conversion option embedded in the Company's $5,000,000 convertible notes as a derivative instrument liability, carried at fair value and marked-to-market each period, with changes in the fair value each period charged or credited to income. In addition, during the first quarter of 2009, the Company completed a private placement of its common stock and warrants. The warrants are also recorded as a derivative instrument liability, carried at fair value. During the fiscal year of 2009, the Company repurchased all of the convertible notes and amended the warrant agreements, thus in the fourth quarter of 2009, there were no non-cash charges to income for changes in the fair value of these derivative liabilities.
For the full year ended December 31, 2009, the Company recognized a loss in the change in fair value of derivative liability - conversion option in the amount of $7,181,198 and a loss in the change in fair value of derivative liability - warrants in the amount of $752,114. There was no impact on periodic cash flows.
Reconciliation of Non-GAAP Financial Measures
Our net income was materially impacted by certain non-cash expenses including stock-based compensation and change in the fair value of derivative liabilities related to the conversion in our outstanding convertible bonds. In the third quarter 2009, we also recognized a one-time non-cash gain on redemption of convertible notes. To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, we use EPS as adjusted for the impact of non-cash expenses related to stock-based compensation and the change in the fair value of derivative liabilities related to the conversion option in our outstanding convertible notes. These Company-defined adjusted measures are being provided because management believes they are useful in analyzing the underlying operating performance of the business. These measures may be inconsistent with similar measures presented by other companies and should only be used in conjunction with our results reported according to accounting principles generally accepted in the United States. A reconciliation of earnings per share as reported and operating income as reported to adjusted non-GAAP earnings per share and adjusted non-GAAP operating income follows:
| | | FY 2009 | | | FY 2008 | |
| | | | | | | |
| GAAP Net Income | | | 23,994,386 | | | | 28,474,509 | |
| Non-cash expense: | | | | | | | | |
| Change in fair value of derivative | | | | | | | | |
| liability - conversion option | | | 7,181,198 | | | | — | |
| Change in fair value of derivative | | | | | | | | |
| liability - warrant | | | 752,114 | | | | — | |
| Gain on CB extinguishment | | | (3,842,935 | ) | | | — | |
| Stock-based compensation | | | 1,280,008 | | | | 1,868,809 | |
| Total non-cash expense | | | 5,370,385 | | | | 1,868,809 | |
| Provision for income tax | | | (435,203 | ) | | | (635,395 | ) |
| Adjusted to Non-GAAP Net income | | | 28,929,568 | | | | 29,707,923 | |
| | | | | | | | | |
| GAAP Earnings per share: | | | | | | | | |
| Basic | | | 0.85 | | | | 1.04 | |
| Diluted | | | 0.84 | | | | 1.00 | |
| | | | | | | | | |
| Non-GAAP Earnings per share: | | | | | | | | |
| Basic | | | 1.02 | | | | 1.09 | |
| Diluted | | | 1.01 | | | | 1.05 | |
About Fushi Copperweld, Inc.
Fushi Copperweld, Inc. through its wholly owned subsidiaries, Fushi International (Dalian) Bimetallic Cable Co, Ltd., and Copperweld Bimetallics, LLC, is the leading manufacturer and innovator of copper-cladded bi-metallic engineered conductor products used in the electrical, telecommunications, transportation, utilities and industrial industries. With extensive design and production capabilities and a long-standing dedication to customer service, Fushi Copperweld, Inc. is the preferred choice bi-metallic products world-wide. For more information, visit: http://www.fushicopperweld.com .
Safe Harbor Statement
This press release may include certain statements that are not descriptions of historical facts, but are forward-looking statements.
Forward-looking statements can be identified by the use of forward-looking terminology such as "will" "believes", "expects" or similar expressions. These forward-looking statements may also include statements about our proposed discussions related to our business or growth strategy, which is subject to change. Such information is based upon expectations of our management that were reasonable when made but may prove to be incorrect. All of such assumptions are inherently subject to uncertainties and contingencies beyond our control and upon assumptions with respect to future business decisions, which are subject to change. We do not undertake to update the forward-looking statements contained in this press release. For a description of the risks and uncertainties that may cause actual results to differ from the forward-looking statements contained in this press release, see our most recent Annual Report filed with the Securities and Exchange Commission (SEC) on Form 10-K, and our subsequent SEC filings. Copies of filings made with the SEC are available through the SEC's electronic data gathering analysis retrieval system (EDGAR) at http://www.sec.gov .
For more information, please contact:
Nathan Anderson
Vice President of Finance
Fushi Copperweld, Inc.
Email: ir@fushicopperweld.com
Tel: +1-931-433-0482
FUSHI COPPERWELD, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME
FOR THE THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2009 AND 2008
| | | (UNAUDITED) | | | (UNAUDITED) | |
| | | Three months ended | | | Twelve months ended | |
| | | December 31, | | | December 31, | |
| | | 2009 | | | 2008 | | | 2009 | | | 2008 | |
| | | | | | | | | | | | | |
| REVENUES | | $ | 51,697,865 | | | $ | 41,065,619 | | | $ | 182,932,292 | | | $ | 221,434,702 | |
| | | | | | | | | | | | | | | | | |
| COST OF GOODS SOLD | | | 34,449,453 | | | | 32,185,476 | | | | 128,122,357 | | | | 164,181,739 | |
| | | | | | | | | | | | | | | | | |
| GROSS PROFIT | | | 17,248,412 | | | | 8,880,143 | | | | 54,809,935 | | | | 57,252,963 | |
| | | | | | | | | | | | | | | | | |
| OPERATING EXPENSES | | | | | | | | | | | | | | | | |
| Selling expenses | | | 1,503,268 | | | | 1,333,411 | | | | 4,869,987 | | | | 4,607,459 | |
| General and administrative expenses | | | 3,303,805 | | | | 4,219,320 | | | | 13,051,442 | | | | 15,555,267 | |
| Total operating expenses | | | 4,807,073 | | | | 5,552,731 | | | | 17,921,429 | | | | 20,162,726 | |
| | | | | | | | | | | | | | | | | |
| INCOME FROM OPERATIONS | | | 12,441,339 | | | | 3,327,412 | | | | 36,888,506 | | | | 37,090,237 | |
| | | | | | | | | | | | | | | | | |
| OTHER INCOME (EXPENSE) | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Interest income | | | 126,552 | | | | 132,639 | | | | 369,267 | | | | 662,290 | |
| Interest expense | | | (1,121,342 | ) | | | (1,447,592 | ) | | | (5,271,427 | ) | | | (8,833,866 | ) |
| (Loss) gain on derivative instrument | | | 6,823 | | | | (159,646 | ) | | | (1,574,989 | ) | | | 163,062 | |
| Gain on convertible note extinguishment | | | — | | | | — | | | | 3,842,935 | | | | — | |
| Change in fair value of derivative liability - warrants | | | — | | | | — | | | | (752,114 | ) | | | — | |
| Change in fair value of derivative liability - conversion option | | | — | | | | — | | | | (7,181,198 | ) | | | — | |
| Other income (expense) | | | (121,509 | ) | | | 67,351 | | | | (314,570 | ) | | | (112,303 | ) |
| Total other expense, net | | | (1,109,476 | ) | | | (1,407,248 | ) | | | (10,882,096 | ) | | | (8,120,817 | ) |
| | | | | | | | | | | | | | | | | |
| INCOME BEFORE INCOME TAXES | | | 11,331,863 | | | | 1,920,164 | | | | 26,006,410 | | | | 28,969,420 | |
| | | | | | | | | | | | | | | | | |
| Deferred income tax benefit | | | (665,357 | ) | | | (4,455,744 | ) | | | (3,918,442 | ) | | | (4,952,027 | ) |
| Current income tax expense | | | 1,861,385 | | | | 1,799,694 | | | | 5,930,466 | | | | 5,446,938 | |
| PROVISION FOR INCOME TAXES | | | 1,196,028 | | | | (2,656,050 | ) | | | 2,012,024 | | | | 494,911 | |
| | | | | | | | | | | | | | | | | |
| NET INCOME | | | 10,135,835 | | | | 4,576,214 | | | | 23,994,386 | | | | 28,474,509 | |
| | | | | | | | | | | | | | | | | |
| OTHER COMPREHENSIVE INCOME | | | | | | | | | | | | | | | | |
| Unrealized gain on marketable securities | | | — | | | | — | | | | — | | | | 22,301 | |
| Foreign currency translation adjustment | | | 20,721 | | | | (1,526,564 | ) | | | 132,816 | | | | 12,535,951 | |
| Change in fair value of derivative instrument | | | 120,137 | | | | 928,917 | | | | (3,155,451 | ) | | | 4,138,320 | |
| | | | | | | | | | | | | | | | | |
| COMPREHENSIVE INCOME | | $ | 10,276,693 | | | $ | 3,978,567 | | | $ | 20,971,751 | | | $ | 45,171,081 | |
| | | | | | | | | | | | | | | | | |
| EARNINGS PER SHARE: | | | | | | | | | | | | | | | | |
| Basic | | $ | 0.35 | | | $ | 0.17 | | | $ | 0.85 | | | $ | 1.04 | |
| Diluted | | $ | 0.34 | | | $ | 0.16 | | | $ | 0.84 | | | $ | 1.00 | |
| | | | | | | | | | | | | | | | | |
| WEIGHTED AVERAGE SHARES: | | | | | | | | | | | | | | | | |
| Basic | | | 29,528,635 | | | | 27,399,034 | | | | 28,265,748 | | | | 27,298,891 | |
| Diluted | | | 29,957,947 | | | | 28,222,466 | | | | 28,643,002 | | | | 28,271,863 | |
FUSHI COPPERWELD, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 2009 AND 2008
| | | 2009 | | | 2008 | |
| ASSETS | | | | | | |
| CURRENT ASSETS: | | | | | | |
| Cash | | $ | 60,597,849 | | | $ | 65,611,770 | |
| Restricted cash | | | — | | | | 1,000,000 | |
| Accounts receivable, trade, net of allowance of bad debt $1,024,684 and $318,529 as of December 31, 2009 and 2008, respectively | | | 67,284,600 | | | | 49,782,548 | |
| Inventories | | | 10,875,782 | | | | 6,977,852 | |
| Notes receivables | | | 122,972 | | | | 171,300 | |
| Other receivables and prepaid expenses | | | 1,137,566 | | | | 869,973 | |
| Advances to suppliers | | | 8,582,346 | | | | 20,261,585 | |
| Deposit in derivative hedge | | | 1,000,000 | | | | 1,000,000 | |
| Prepaid taxes | | | — | | | | 670,805 | |
| Total current assets | | | 149,601,115 | | | | 146,345,833 | |
| | | | | | | | | |
| PLANT AND EQUIPMENT, net | | | 117,385,566 | | | | 119,761,027 | |
| | | | | | | | | |
| OTHER ASSETS: | | | | | | | | |
| Advances to suppliers, noncurrent | | | 1,356,404 | | | | 4,022,879 | |
| Notes receivables, noncurrent | | | 699,106 | | | | 799,106 | |
| Intangible asset, net | | | 11,924,056 | | | | 12,406,920 | |
| Deferred loan expense, net | | | 2,045,349 | | | | 3,317,725 | �� |
| Deferred tax assets | | | 11,722,469 | | | | 7,804,027 | |
| Total other assets | | | 27,747,384 | | | | 28,350,657 | |
| | | | | | | | | |
| Total assets | | $ | 294,734,065 | | | $ | 294,457,517 | |
| | | | | | | | | |
| LIABILITIES AND SHAREHOLDERS' EQUITY | | | | | | | | |
| | | | | | | | | |
| CURRENT LIABILITIES: | | | | | | | | |
| Accounts payable, trade | | $ | 4,002,773 | | | $ | 7,204,156 | |
| Notes payable, current | | | 10,000,000 | | | | 5,000,000 | |
| Revolver line | | | 4,033,783 | | | | 4,712,075 | |
| Short term bank loans | | | — | | | | 17,588,400 | |
| Other payables and accrued liabilities | | | 3,854,355 | | | | 4,751,460 | |
| Customer deposits | | | 74,019 | | | | 542,540 | |
| Taxes payable | | | 2,599,055 | | | | — | |
| Cross currency hedge payable | | | 436,702 | | | | 104,324 | |
| Obligation under capital lease, current | | | 71,503 | | | | — | |
| Total current liabilities | | | 25,072,190 | | | | 39,902,955 | |
| | | | | | | | | |
| LONG TERM LIABILITIES: | | | | | | | | |
| Notes payable, noncurrent | | | 25,000,000 | | | | 40,000,000 | |
| Obligation under capital lease, non current | | | 153,626 | | | | — | |
| Fair value of derivative instrument | | | 7,532,527 | | | | 4,377,076 | |
| | | | | | | | | |
| Total liabilities | | | 57,758,343 | | | | 84,280,031 | |
| | | | | | | | | |
| COMMITMENTS AND CONTINGENCIES | | | | | | | 7,197,794 | |
| | | | | | | | | |
| SHAREHOLDERS' EQUITY: | | | | | | | | |
| Common stock,$0.006 par value, 100,000,000 shares authorized, December 31, 2009: 29,772,780 shares issued and outstanding December 31, 2008: 27,499,034 shares issued and 27,399,034 outstanding | | | 178,638 | | | | 164,395 | |
| Restricted common stock in escrow | | | — | | | | 600 | |
| Additional paid in capital | | | 105,540,676 | | | | 91,172,890 | |
| Statutory reserves | | | 16,282,793 | | | | 12,316,147 | |
| Retained earnings | | | 97,283,748 | | | | 78,613,158 | |
| Accumulated other comprehensive income | | | 17,689,867 | | | | 20,712,502 | |
| Total shareholders' equity | | | 236,975,722 | | | | 202,979,692 | |
| | | | | | | | | |
| Total liabilities and shareholders' equity | | $ | 294,734,065 | | | $ | 294,457,517 | |
FUSHI COPPERWELD, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008
| | | 2009 | | | 2008 | |
| CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | | |
| Net income | | $ | 23,994,386 | | | $ | 28,474,509 | |
| Adjustments to reconcile net income to cash provided by operating activities: | | | | | | | | |
| Deferred taxes | | | (3,918,442 | ) | | | (4,952,027 | ) |
| Bad debt expenses | | | 705,825 | | | | 178,467 | |
| Reserve for obsolete inventory | | | — | | | | 96,893 | |
| Inventory value write off | | | 79,563 | | | | — | |
| Depreciation | | | 9,762,096 | | | | 6,457,629 | |
| Loss on sale of property and equipment | | | 117,430 | | | | 28,887 | |
| Amortization of intangible assets | | | 476,696 | | | | 417,681 | |
| Amortization of loan commission | | | 1,272,375 | | | | 2,798,205 | |
| Interest penalty | | | — | | | | 710,544 | |
| Amortization of stock option compensation expense | | | 1,280,008 | | | | 1,868,809 | |
| Loss (gain) on derivative instrument | | | 1,574,987 | | | | (163,062 | ) |
| Gain on convertible note extinguishment | | | (3,842,934 | ) | | | — | |
| Change in derivative liability - conversion option | | | 7,181,198 | | | | — | |
| Change in derivative liability - warrants | | | 752,114 | | | | — | |
| Investment loss on marketable securities | | | — | | | | 16,158 | |
| Change in operating assets and liabilities: | | | | | | | | |
| Accounts receivable | | | (18,247,931 | ) | | | (24,794,459 | ) |
| Inventories | | | (3,856,156 | ) | | | 5,113,772 | |
| Other receivables and prepayments | | | (220,547 | ) | | | 189,808 | |
| Notes receivables | | | 148,273 | | | | (114,896 | ) |
| Advances to suppliers - current | | | 11,661,597 | | | | (17,408,968 | ) |
| Accounts payable | | | (3,111,464 | ) | | | 4,076,919 | |
| Other payables and accrued liabilities | | | (1,474,776 | ) | | | (1,083,919 | ) |
| Customer deposits | | | (474,407 | ) | | | 509,481 | |
| Taxes payable | | | 3,270,610 | | | | (1,788,643 | ) |
| Net cash provided by operating activities | | | 27,130,501 | | | | 631,788 | |
| | | | | | | | | |
| CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | | | | |
| Proceeds from sales (purchases) of marketable securities | | | — | | | | 2,983,842 | |
| Payments on derivative instrument | | | (1,242,612 | ) | | | — | |
| Proceeds from derivative instrument | | | — | | | | 973,556 | |
| Deposit in derivative hedge | | | — | | | | (1,000,000 | ) |
| Proceeds from sale of property and equipment | | | 424,444 | | | | — | |
| Purchase of land use right | | | — | | | | (1,698,433 | ) |
| Advances for purchase of land use right | | | — | | | | — | |
| Purchase of property and equipment | | | (5,058,250 | ) | | | (15,226,592 | ) |
| Advances for purchase of property and equipment | | | — | | | | (3,148,802 | ) |
| Net cash used in investing activities | | | (5,876,418 | ) | | | (17,116,429 | ) |
| | | | | | | | | |
| CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | | | | |
| Proceeds from from shareholder | | | 12,186,677 | | | | — | |
| Repayments on shareholders | | | (12,186,677 | ) | | | — | |
| Release (deposit) of restricted cash | | | 1,000,000 | | | | — | |
| Net (payments) borrowings on revolver line | | | (678,292 | ) | | | (2,419,008 | ) |
| Proceeds from short-term bank loans | | | — | | | | 16,908,000 | |
| Payments on short-term bank loans | | | (17,553,600 | ) | | | (17,268,032 | ) |
| Payments on capital lease obligation | | | (41,468 | ) | | | — | |
| Payment on high yield notes payable | | | (5,000,000 | ) | | | — | |
| Repurchase of convertible notes payables | | | (6,060,000 | ) | | | — | |
| Net proceeds from stock issuance in private placement | | | — | | | | — | |
| Net proceeds from long term notes | | | — | | | | — | |
| Proceeds on issuance of common stock and warrants | | | 2,086,626 | | | | 139,124 | |
| Net cash (used in) provided by financing activities | | | (26,246,734 | ) | | | (2,639,916 | ) |
| | | | | | | | | |
| EFFECT OF EXCHANGE RATE ON CASH | | | (21,270 | ) | | | 4,821,569 | |
| | | | | | | | | |
| (DECREASE) INCREASE IN CASH | | | (5,013,921 | ) | | | (14,302,988 | ) |
| | | | | | | | | |
| CASH, beginning of period | | | 65,611,770 | | | | 79,914,758 | |
| | | | | | | | | |
| CASH, end of period | | $ | 60,597,849 | | | $ | 65,611,770 | |
| | | | | | | | | |
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | | | | | | | | |
| | | | | | | | | |
| Cash paid for interest expense | | $ | 3,725,954 | | | $ | 6,327,084 | |
| | | | | | | | | |
| Cash paid for income taxes | | $ | 5,131,397 | | | $ | 4,509,274 | |
SOURCE Fushi Copperweld, Inc.
