Plastec Technologies (PLTYF) 6-K Plastec Technologies Reports Unaudited Fiscal 2012 First and Second Quarter Financial Results

Plastec Technologies, Ltd.

PLASTEC TECHNOLOGIES REPORTS UNAUDITED FISCAL 2012 FIRST AND SECOND QUARTER FINANCIAL RESULTS

FY 2012 Q1 Financial Highlights

· Sales of $49.3 million, an increase of 27.2% year-over-year

· Gross margin of 15.5% compared to 19.2% in the prior year period

· EBITDA of $10.1 million, up 6.8% year-over-year

· Net income of $3.6 million, or $0.21 per diluted share

FY 2012 Q2 Financial Highlights

· Sales of $43.7 million, a decrease of 7.8% year-over year

· Gross margin of 9.7% compared to 19.7% in the prior year period

· EBITDA of $6.2 million, down 43.1% year-over-year

· Net income of $0.6 million, or $0.04 per diluted share

Fiscal 2012 Six Month Financial Highlights

· Sales of $93.1 million, an increase of 7.9% year-over-year

· Gross margin of 12.8% compared to 19.5% in the prior year period

· EBITDA of $16.3 million, down 20.0% year-over-year

· Net income of $4.2 million, or $0.24 diluted earnings per share

· $15.0 million cash generated from operations for the six months ended October 31, 2011

Hong Kong – January 3, 2012 – Plastec Technologies, Ltd. (OTCBB: PLTYF (common stock), PLTWF (warrants), PLTEF (units), (“Plastec” or the “Company”), an integrated plastic manufacturing services provider that operates in the People’s Republic of China, announced today its unaudited financial results for fiscal 2012 first  quarter ended July 31, 2011 and second quarter ended October 31, 2011.

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See attached tables at the end of this release in Hong Kong Dollars (HKD).  All other amounts in this press release are presented in U.S. dollars (USD) with a conversion rate of US$1.0: HK$7.8 (see table below).

Plastec Technologies, Ltd.

Selected Financial Statements in USD ($ in millions, except per share data)

	��	3monthsended 7/31/2011			3monthsended 7/31/2010			3monthsended 10/31/2011			3monthsended 10/31/2010			6monthsended 10/31/2011			6monthsended 10/31/2010
Sales			49.3			38.8			43.7			47.5			93.1			86.2
Cost of Revenues			41.7			31.3			39.5			38.1			81.2			69.4
Gross Profit			7.6			7.4			4.2			9.4			11.9			16.8
Gross Profit Ratio			15.5	%		19.2	%		9.7	%		19.7	%		12.8	%		19.5	%
Income from Operations			5.2			5.3			1.3			6.4			6.5			11.7
Net Income			3.6			4.4			0.6			5.4			4.2			9.7
Diluted EPS			0.21			0.62			0.04			0.76			0.24			1.38
EBITDA			10.1			9.4			6.2			11.0			16.3			20.4

Mr. Kin Sun Sze-To, Chairman of Plastec, stated, “For the first fiscal half year of 2012, we were pleased to have completed a 9,000 square meter facility at our largest location in Shenzhen in September 2011, which increased our mold manufacturing capabilities by 20%.  While we did see a general slowdown in market conditions and slowing trends in the new products developments of some of our major customers, we expect that China’s continuing economic development coupled with a large global demand for our unique service offering in the plastics industry will continue to drive demand in the future.  We believe our financial position is very strong, with approximately $31.4 million in cash as of October 31, 2011 and a continued record of generating operating cash flow while still regularly investing in our business.”

Mr. Sze-To continued, “We continued to execute our diversification strategy and actively search for new clients and new orders in consumer electronics and other sectors that require high-quality, specialized plastic molding and plastic injection services. We will continue this same strategy to grow our business organically while also seeking appropriate merger and acquisition opportunities to help build on our position as an industry leader.”

Fiscal Year 2012 First Quarter Financial Review

· The Company’s total sales for the three months ended July 31, 2011 increased 27.2% to $49.3 million from $38.8 million.

· Plastec’s gross profit margin for the three months ended July 31, 2011 decreased to 15.5% from 19.2% in the prior-year period.  The decrease in gross margin was largely the result of higher cost of sales due to rising labor costs in China, increased and inflated cost of raw materials and factory overheads.  The impact of the higher costs could not be mitigated in the first half of the year, but the Company expects to mitigate the effect by raising sales prices in the future.

· EBITDA for the three months ended July 31, 2011 was $10.1 million, compared to $9.4 million in the prior three-month period. A table reconciling EBITDA to net income can be found at the end of this release.

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January 3, 2012

· Net income for the three months ended July 31, 2011 was $3.6 million, or $0.21 per share based on a weighted average number of diluted shares outstanding of 16.7 million, compared to net income of 4.4 million, or $0.62 per share based on 7.1 million weighted average number of diluted shares, in the prior-year period.

Fiscal Year 2012 Second Quarter Financial Review

· The Company’s total sales for the three months ended October 31, 2011 decreased 7.8% to $43.7 million from $47.5 million.

· The Company’s gross profit margin for the three months ended October 31, 2011 was 9.7%, compared to 19.7% in the prior-year period, largely due to the increased cost of sales as mentioned above.

· EBITDA for the three months ended October 31, 2011, was $6.2 million, compared to $11.0 million in the prior three-month period.

· Net income for the three months ended October 31, 2011 was $0.6 million, or $0.04 per share based on a weighted average number of diluted shares outstanding of 16.7 million, compared to $5.4 million, or $0.76 per share based on 7.1 million weighted average number of diluted shares, in the prior-year period.

Fiscal 2012 Six Month Financial Review

· The Company’s total sales for the six months ended October 31, 2011 increased 7.9% to $93.1 million from $86.2 million.  Plastec’s sales grew during the period as a result of increased sales from its existing larger client base during the first three months of the fiscal year from its expanded manufacturing capacity and a decrease of second quarter was due to decreasing order from some of the Company’s major customers which are in a longer phase of developing new products.

· The Company’s gross profit margin during the six months ended October 31, 2011 decreased 12.8% compared to 19.5% same period last year, due to the reasons of increased cost of sales cited above.

· EBITDA for the six months ended October 31, 2011 was $16.3, compared to $20.4 in the prior year period.

· Net income for the six months ended October 31, 2011 was $4.2 million, or $0.24 per share based on a weighted average number of diluted shares outstanding of 16.7 million, compared to $9.7 million, or $1.38 per share based on 7.1 million weighted average number of diluted shares, in the prior-year period.

Balance Sheet Highlights

As of October 31, 2011, the Company had cash and cash equivalents of $31.4 million; working capital of $27.3 million, total bank borrowings of $19.8 million, and shareholders’ equity of $100.8 million.

About Plastec

Originally founded in 1993 by Chairman and CEO, Mr. Kin Sun Sze-To, Plastec is an integrated plastic manufacturing services provider that operates in the People’s Republic of China through its wholly owned subsidiaries. With approximately 5,500 employees, Plastec currently operates 6 separate, high-output, low-defect facilities (with gross floor areas of approximately 167,000 square meters) in 5 locations in Guangdong province in Southern China and Jiangsu province in Eastern China. Plastec provides precision plastic manufacturing services from mold design and fabrication, plastic injection manufacturing to secondary-process finishing, as well as parts assembly.

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Forward Looking Statements

This press release contains “forward-looking statements.” These forward-looking statements involve significant risks and uncertainties that could cause the actual results to differ materially from the expected results. Actual results may differ from expectations, estimates and projections and, consequently, you should not rely on these forward looking statements as predictions of future events. Words such as “expect,” “estimate,” “project,” “budget,” “forecast,” “anticipate,” “intend,” “plan,” “may,” “will,” “could,” “should,” “believes,” “predicts,” “potential,” “continue,” and similar expressions are intended to identify such forward-looking statements.

CONTACT:	INVESTOR RELATIONS:
Plastec Technologies, Ltd.	The Equity Group Inc.
Eli D. Scher	Adam Prior
Director	Vice President
eli@plastec.com.hk	(212) 836-9606
	aprior@equityny.com
HL Ning	Katherine Yao
Chief Financial Officer	Account Executive
ning@plastec.com.hk	kyao@equityny.com

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January 3, 2012

PLASTEC TECHONOLOGIES, LTD.

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (UNAUDITED)

(Hong Kong dollars in thousands, except number of shares, per share data and unless otherwise stated)

	Forthe3monthsended
	July 31,
	2011			2010
	HK$			HK$
Revenue		384,651			302,322
Cost of revenues		(324,982	)		(244,419	)
Gross profit		59,669			57,903
Operating expenses
Selling, general and administrative expenses		(19,828	)		(17,457	)
Other income		353			460
Gain on disposals of property, plant and equipment		76			375
Total operating expenses, net		(19,399	)		(16,622	)
Income from operations		40,270			41,281
Interest income		51			16
Interest expense		(722	)		(664	)
Income before income tax expense		39,599			40,633
Income tax expense		(11,903	)		(6,394	)
Net income (Note)		27,696			34,239
Other comprehensive income
Foreign currency translation adjustment		7,138			60
Comprehensive income attributable to Plastec Technologies, Ltd.		34,834			34,299
Weighted average number of ordinary shares		16,733,196			7,054,583
Weighted average number of diluted ordinary shares		16,733,196			7,054,583
Basic earnings per share attributable to Plastec Technologies, Ltd.	HK$	1.6		HK$	4.9
Diluted earnings per share attributable to Plastec Technologies, Ltd.	HK$	1.6		HK$	4.9

Note:  Income tax expenses for the 3 months ended July 31, 2010 included a tax adjustment for HK$2,431 for additional tax payable under enterprise income tax in China.

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January 3, 2012

PLASTEC TECHONOLOGIES, LTD.

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (UNAUDITED)

(Hong Kong dollars in thousands, except number of shares, per share data and unless otherwise stated)

	Forthe3monthsended						Forthe6monthsended
	October 31,						October 31,
	2011			2010			2011			2010
	HK$			HK$			HK$			HK$
Revenue		341,163			370,280			725,814			672,602
Cost of revenues		(308,036	)		(297,216	)		(633,018	)		(541,635	)
Gross profit		33,127			73,064			92,796			130,967
Operating expenses
Selling, general and administrative expenses		(23,872	)		(22,299	)		(43,700	)		(39,756	)
Other income		866			135			1,219			595
Gain/(loss) on disposal of property, plant and equipment		62			(1,303	)		138			(928	)
Total operating expenses, net		(22,944	)		(23,467	)		(42,343	)		(40,089	)
Income from operations		10,183			49,597			50,453			90,878
Interest income		64			22			115			38
Interest expense		(719	)		(689	)		(1,441	)		(1,353	)
Income before income tax expense		9,528			48,930			49,127			89,563
Income tax expense		(4,744	)		(7,138	)		(16,647	)		(13,532	)
Net income (Note)		4,784			41,792			32,480			76,031
Other comprehensive income
Foreign currency translation adjustment		-			193			7,138			253
Comprehensive income attributable to Plastec Technologies, Ltd.		4,784			41,985			39,618			76,284
Weighted average number of ordinary shares		16,733,196			7,054,583			16,733,196			7,054,583
Weighted average number of diluted ordinary shares		16,733,196			7,054,583			16,733,196			7,054,583
Basic earnings per share attributable to Plastec Technologies, Ltd.	HK$	0.3		HK$	5.9		HK$	1.9		HK$	10.8
Diluted earnings per share attributable to Plastec Technologies, Ltd.	HK$	0.3		HK$	5.9		HK$	1.9		HK$	10.8

Note:  Income tax expenses for the three months and six months ended Oct 31, 2010 included tax adjustments for HK$2,431 and HK$4,862 for additional tax payable under enterprise income tax in China.

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PLASTEC TECHONOLOGIES, LTD.

CONSOLIDATED BALANCE SHEETS

(Hong Kong dollars in thousands, except number of shares, per share data and unless otherwise stated)

	Asof		Asof
	October31,2011		April30,2011
	HK$		HK$
	(Unaudited)		(Audited)
ASSETS
Current assets
Cash and cash equivalents		244,957		219,757
Trade receivables, net of allowances for doubtful accounts of HK$nil and HK$nil as of Oct 31 and Apr 30 2011 respectively		301,035		270,763
Inventories		109,096		117,733
Deposits, prepayment and other receivables		15,434		8,357
Total current assets		670,522		616,610
Property, plant and equipment, net		552,777		551,079
Prepaid lease payment, net		25,529		26,237
Other assets		9,079		8,001
Total assets		1,257,907		1,201,927
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Bank borrowings		154,447		169,710
Capital lease obligations		2,376		5,311
Trade payables		124,366		127,987
Other payables and accruals		103,891		80,811
Tax payable		72,445		56,389
Total current liabilities		457,525		440,208
Capital lease obligations		-		303
Deferred tax liabilities		14,504		15,156
Total liabilities		472,029		455,667
Commitments and contingencies		-		-
Shareholders' equity
Preferred shares (US$0.001 par value; 1,000,000 share authorized, none issued and outstanding)		-		-
Ordinary shares (US$0.001 par value; 100,000,000 shares authorized, 16,733,196 shares and 16,733,196 shares issued and outstanding as of Oct 31 and Apr 30, 2011 respectively)		131		131
Additional paid-in capital		169,973		169,973
Accumulated other comprehensive income		15,244		8,106
Retained earnings		600,530		568,050
Total Plastec Technologies, Ltd. shareholders' equity		785,878		746,260
Total liabilities and shareholders' equity		1,257,907		1,201,927

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PLASTEC TECHONOLOGIES, LTD.

CONSOLIDATED STATEMENTS OFCASH FLOWS (UNAUDITED)

(Hong Kong dollars in thousands, except number of shares, per share data and unless otherwise stated)

	Forthe6monthsended
	October 31,
	2011			2010
	HK$			HK$
Operating activities
Net Income after taxation		32,480			76,031
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization		78,165			67,912
Net loss/(gain) on disposal of property, plant and equipment		(138	)		928
Deferred tax charge		(652	)		-
Change in operating assets and liabilities:
Trade receivables		(30,272	)		(92,816	)
Inventories		8,637			(32,474	)
Deposits, prepayment and other receivables		(7,075	)		3,548
Trade payables		(3,621	)		10,270
Other payables and accruals		23,080			32,129
Tax payables		16,056			13,532
Net cash provided by operating activities		116,660			79,060
Investing activities
Purchase of property, plant and equipment		(73,075	)		(102,512	)
Proceeds from disposal of property, plant and equipment		2,127			1,268
Deposits for purchase of property, plant and equipment		(9,080	)		(10,804	)
Net cash used in investing activities		(80,028	)		(112,048	)
Financing activities
Proceeds from bank borrowings		187,277			249,377
Repayment of bank borrowings		(202,540	)		(174,760	)
Repayment of capital lease obligations		(3,238	)		(5,323	)
Dividends paid		-			(30,000	)
Net cash provided by/(used in) financing activities		(18,501	)		39,294
Effect of exchange rate changes on cash and cash equivalents		7,069			253
Net increase in cash and cash equivalents		18,131			6,306
Cash and cash equivalents, beginning of period		219,757			151,304
Cash and cash equivalents, end of period		244,957			157,863
Supplementary
interest paid		1,326			1,315
income tax paid		1,243			-

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RECONCILIATION OF NON-GAAP FINANCIAL MEASURE

A reconciliation of Adjusted EBITDA to net income is provided below:

	3monthsended July31,						3monthsended October31,						6monthsended October31,
HKD’000	2011			2010			2011			2010			2011			2010
Net income (Note)		27,267			33,404			3,856			42,960			31,123			76,364
Plus    : Interest expenses		722			664			719			689			1,441			1,353
Minus  : Interest income		(51	)		(16	)		(64	)		(22	)		(115	)		(38	)
Plus    : Income tax expense		11,903			6,394			4,744			7,138			16,647			13,532
Income from Operations		39,841			40,446			9,255			50,765			49,096			91,211
Plus    : Depreciation & Amortization		38,824			33,215			39,341			34,697			78,165			67,912
Adjusted EBITDA		78,665			73,661			48,596			85,462			127,261			159,123

Note:  Excl. Other Incomes and gain/(loss) on disposal

This press release includes financial information (EBITDA) not derived in accordance with generally accepted accounting principles or international financial reporting standards.  Plastec believes that the presentation of such financial information provides more useful information to investors as it indicates more clearly Plastec’s future performance.  EBITDA was derived by taking earnings before interest expense (net), taxes, depreciation and amortization as adjusted for certain one-time non-recurring items and exclusions.