plastec technologies Reports UNAUDITED 2013 FIRST QUARTER FINANCIAL RESULTS
Hong Kong – August 1, 2013 – Plastec Technologies, Ltd. - (OTCBB: PLTYF (ordinary shares), PLTWF (warrants), PLTEF (units)) (“Plastec” or the “Company”), an integrated plastic manufacturing services provider that operates in the People’s Republic of China, today reported unaudited financial results for the three months ended March 31, 2013.
Financial and Operating Highlights for the Three Months Ended March 31, 2013
(all comparisons to same period of prior year)
| · | Sales of $37.8 million, up 13.3% due to new customers and new product launches from existing clients |
| · | Gross margin of 20.7%, compared to 9.4%, resulting primarily from lower costs of revenue during the period |
| · | EBITDA of $7.1 million, compared to $5.6 million |
| · | Net income of $1.6 million, or $0.12 per diluted share based on 13.8 million diluted shares outstanding, compared to $0.4 million, or $0.03 per diluted share based on 15.0 million diluted shares outstanding |
| · | $3.9 million in cash generated from operations for the three months ended March 31, 2013 |
| · | During the period, the Company repurchased 600,000 of its ordinary shares |
| · | $40.6 million in working capital and no long-term debt |
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$7.8 (see table below for reference).
| ($ in millions, except per share data) | | 3 months period ended
March 31, 2013 | | | 3 months period ended
March 31, 2012 | | | Percentage
Change | |
| | | | | | | | | | |
| Sales | | $ | 37.8 | | | $ | 33.4 | | | | 13.3 | % |
| Cost of Revenues | | $ | 30.0 | | | $ | 30.2 | | | | (0.8 | )% |
| Gross Profit | | $ | 7.8 | | | $ | 3.2 | | | | 148.6 | % |
| Gross Profit Ratio | | | 20.7 | % | | | 9.4 | % | | | | |
| | | | | | | | | | | | | |
| Income from Operations | | $ | 2.9 | | | $ | 0.6 | | | | 366.2 | % |
| Operating Margin | | | 7.8 | % | | | 1.9 | % | | | | |
| | | | | | | | | | | | | |
| Net Income | | $ | 1.6 | | | $ | 0.4 | | | | 344.1 | % |
| Net Margin | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| Diluted EPS | | $ | 0.12 | | | $ | 0.03 | | | | 350.0 | % |
| Adjusted EBITDA* | | | 7.1 | | | | 5.6 | | | | 26.7 | % |
* Reconciliation table at end of release
Balance Sheet Highlights
| | | 3/31/2013 | | | 12/31/2012 | | | Percentage
Change | |
| | | | | | | | | | |
| Cash and Cash Equivalents | | $ | 36.2 | | | $ | 39.7 | | | | (8.9 | )% |
| Total Current Assets | | $ | 82.4 | | | $ | 89.8 | | | | (8.2 | )% |
| Total Assets | | $ | 141.8 | | | $ | 151.2 | | | | (6.2 | )% |
| Working Capital | | $ | 40.6 | | | $ | 39.9 | | | | 1.9 | % |
| Total Long-term Debt | | | 0 | | | | 0 | | | | 0.0 | % |
| Total Liabilities | | $ | 43.3 | | | $ | 51.4 | | | | (15.8 | )% |
| Shareholders’ Equity | | $ | 98.5 | | | $ | 99.8 | | | | (1.3 | )% |
| Total Liabilities and Shareholders' Equity | | $ | 141.8 | | | $ | 151.2 | | | | (6.2 | )% |
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Management Comments
Mr. Kin Sun Sze-To, Chairman of Plastec, stated, “We are pleased to report solid financial and operating results for the quarter, largely driven by new product launchings from existing clients and the addition of new customers. Our results compared favorably to the prior year period in 2012, when the whole industry was subjected to difficult and unusual circumstances brought about by the Japanese earthquake and tsunami and flooding in Thailand. We continue to strive toward improving our operating performance, which includes maintaining a low cost structure while achieving higher margins through the completion of precision molding services and new product offerings from our customers.”
Financial Review
| · | Total sales for the three months ended March 31, 2013 increased 13.3% to $37.8 million from $33.4 million in the prior-year period. This was largely due to an increase in sales orders from existing customers for new products launchings, as well as Plastec’s receipt of orders from new customers. |
| · | Gross profit margin for the three months ended March 31, 2013 was 20.7%, compared to 9.4% in the prior-year period. The increase in margin for the period was largely due to a reduction in costs of revenues resulting from the Company’s efforts to further streamline its manufacturing process and to improve control of direct wages and factory overheads. |
| · | Income from operations was $2.9 million, or 7.8% of revenues, during the three months ended March 31, 2013, compared to $0.6 million, or 1.9%, in the prior-year period. |
| · | EBITDA for the three months ended March 31, 2013 was $7.1 million, compared to $5.6 million in the prior-year period. |
| · | Net income for the three months ended March 31, 2013 was $1.6 million, or $0.12 per share based on approximately 13.8 million weighted average diluted shares outstanding, compared to $0.4 million, or $0.03 per share based on approximately 15.0 million weighted average diluted shares in the prior-year period. |
Share Repurchase Update
In December 2012, the Company approved a twelve-month extension of its previously announced share repurchase plan through December 9, 2013, allowing Plastec to purchase up to $5 million of its ordinary shares in both open market and privately negotiated transactions at the discretion of the Company’s management and as market conditions allow. The Company also expanded the scope of the repurchase plan to include Plastec’s publicly-held warrants, with all other terms of the repurchase plan remaining unchanged. To date, the Company repurchased 758,775 shares and 80,000 warrants under its repurchase plan.
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 5,400 employees, Plastec provides precision plastic manufacturing services from mold design and fabrication, plastic injection manufacturing to secondary-process finishing, as well as parts assembly.
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.
| Plastec Technologies, Ltd. | Page 3 |
| August 1, 2013 | |
CONTACT:
Plastec Technologies, Ltd.
HL Ning, Chief Financial Officer
ning@plastec.com.hk
Eli D. Scher, Director
eli@plastec.com.hk
INVESTOR RELATIONS:
The Equity Group Inc.
Adam Prior, Senior Vice President
(212) 836-9606
aprior@equityny.com
Katherine Yao, Associate
kyao@equityny.com
| Plastec Technologies, Ltd. | Page 4 |
| August 1, 2013 | |
PLASTEC TECHNOLOGIES, 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)
| | | For the 3-month
period ended March 31, | |
| | | 2013 | | | 2012 | |
| | | HK$ | | | HK$ | |
| | | | | | | |
| Revenues | | | 294,686 | | | | 260,133 | |
| Cost of revenues | | | (233,772 | ) | | | (235,632 | ) |
| Gross profit | | | 60,914 | | | | 24,501 | |
| | | | | | | | | |
| Operating expenses, net | | | | | | | | |
| Selling, general and administrative expenses | | | (37,944 | ) | | | (20,706 | ) |
| Other income | | | 86 | | | | 587 | |
| Gain/(loss) on disposal of property, plant and equipment | | | (67 | ) | | | 549 | |
| Total operating expenses, net | | | (37,925 | ) | | | (19,570 | ) |
| | | | | | | | | |
| Income from operations | | | 22,989 | | | | 4,931 | |
| | | | | | | | | |
| Interest income | | | 51 | | | | 45 | |
| Interest expense | | | (388 | ) | | | (660 | ) |
| Income before income tax expense | | | 22,652 | | | | 4,316 | |
| | | | | | | | | |
| Income tax expense | | | (10,474 | ) | | | (1,574 | ) |
| Net income | | | 12,178 | | | | 2,742 | |
| | | | | | | | | |
| Other comprehensive income | | | | | | | | |
| Foreign currency translation adjustment | | | 1,318 | | | | 119 | |
| Comprehensive income attributable to Plastec Technologies, Ltd. | | | 13,496 | | | | 2,861 | |
| | | | | | | | | |
| Net income per share: | | | | | | | | |
| | | | | | | | | |
| Weighted average number of ordinary shares | | | 13,785,561 | | | | 15,028,884 | |
| | | | | | | | | |
| Weighted average number of diluted ordinary shares | | | 13,785,561 | | | | 15,028,884 | |
| | | | | | | | | |
| Basic income per share attributable to Plastec Technologies, Ltd. | | | HK$0.9 | | | | HK$0.2 | |
| | | | | | | | | |
| Diluted income per share attributable to Plastec Technologies, Ltd. | | | HK$0.9 | | | | HK$0.2 | |
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PLASTEC TECHNOLOGIES, LTD.
CONSOLIDATED BALANCE SHEETS
(Hong Kong dollars in thousands, except number of shares, per share data and unless otherwise stated)
| | | (Unaudited)
March 31, | | | (Audited)
December 31, | |
| | | 2013 | | | 2012 | |
| | | HK$ | | | HK$ | |
| ASSETS | | | | | | | | |
| Current assets | | | | | | | | |
| Cash and cash equivalents | | | 282,347 | | | | 309,862 | |
| Trade receivables, net of allowances for doubtful accounts of HK$nil, and HK$nil as of December 31, 2012 and March 31, 2013 respectively | | | 235,776 | | | | 257,299 | |
| Inventories | | | 81,144 | | | | 97,467 | |
| Deposits, prepayment and other receivables | | | 43,558 | | | | 35,471 | |
| Total current assets | | | 642,825 | | | | 700,099 | |
| | | | | | | | | |
| Property, plant and equipment, net | | | 427,037 | | | | 440,383 | |
| Prepaid lease payments, net | | | 23,331 | | | | 23,719 | |
| Other assets | | | 12,192 | | | | 14,503 | |
| Intangible assets | | | 438 | | | | 438 | |
| Total assets | | | 1,105,823 | | | | 1,179,142 | |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | | | |
| Current liabilities | | | | | | | | |
| Bank borrowings | | | 77,305 | | | | 96,892 | |
| Trade payables | | | 124,083 | | | | 151,436 | |
| Other payables and accruals | | | 88,927 | | | | 115,715 | |
| Tax payable | | | 35,700 | | | | 25,225 | |
| Total current liabilities | | | 326,015 | | | | 389,268 | |
| | | | | | | | | |
| Deferred tax liabilities | | | 11,629 | | | | 11,629 | |
| Total liabilities | | | 337,644 | | | | 400,897 | |
| | | | | | | | | |
| Commitments and contingencies | | | - | | | | - | |
| | | | | | | | | |
| Shareholders’ equity | | | | | | | | |
| Ordinary shares (US$0.001 par value; 100,000,000 authorized 14,292,228 and 13,692,228 shares issued and outstanding as of December 31, 2012 and March 31, 2013 respectively) | | | 107 | | | | 112 | |
| | | | | | | | | |
| Additional paid-in capital | | | 61,775 | | | | 85,332 | |
| Accumulated other comprehensive income | | | 15,842 | | | | 14,524 | |
| Retained earnings | | | 690,455 | | | | 678,277 | |
| Total shareholders’ equity | | | 768,179 | | | | 778,245 | |
| | | | | | | | | |
| Total liabilities and shareholders’ equity | | | 1,105,823 | | | | 1,179,142 | |
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PLASTEC TECHNOLOGIES, LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(Hong Kong dollars in thousands, except number of shares, per share data and unless otherwise stated)
| | | For the 3-month
period ended March 31, | |
| | | 2013 | | | 2012 | |
| | | HK$ | | | HK$ | |
| Operating activities | | | | | | | | |
| Net income | | | 12,178 | | | | 2,742 | |
| Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | | | |
| Depreciation and amortization | | | 32,217 | | | | 39,764 | |
| Loss/(gain) on disposal of property, plant and equipment | | | 67 | | | | (549 | ) |
| Changes in operating assets and liabilities: | | | | | | | | |
| Trade receivables | | | 21,523 | | | | (11,218 | ) |
| Inventories | | | 16,323 | | | | (486 | ) |
| Deposits, prepayment and other receivables | | | (8,087 | ) | | | (6,066 | ) |
| Trade payables | | | (27,353 | ) | | | (11,907 | ) |
| Other payables and accruals | | | (26,788 | ) | | | (6,477 | ) |
| Tax payables | | | 10,474 | | | | 1,901 | |
| Net cash provided by operating activities | | | 30,554 | | | | 7,704 | |
| | | | | | | | | |
| Investing activities | | | | | | | | |
| Purchase of property, plant and equipment | | | (11,954 | ) | | | (30,325 | ) |
| Proceeds from disposal of property, plant and equipment | | | 350 | | | | 1,147 | |
| Deposits for purchase of property, plant and equipment | | | (116 | ) | | | (1,459 | ) |
| Net cash used in investing activities | | | (11,720 | ) | | | (30,637 | ) |
| | | | | | | | | |
| Financing activities | | | | | | | | |
| Repurchases of shares | | | (28,080 | ) | | | (181 | ) |
| Net repayment of bank borrowings | | | (19,587 | ) | | | (20,427 | ) |
| Repayment of capital lease obligations | | | - | | | | (1,112 | ) |
| Net cash used in financing activities | | | (47,667 | ) | | | (21,720 | ) |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| Net decrease in cash and cash equivalents | | | (28,833 | ) | | | (44,653 | ) |
| Effect of exchange rate changes on cash and cash equivalents | | | 1,318 | | | | 110 | |
| Cash and cash equivalents, beginning of period | | | 309,862 | | | | 187,072 | |
| Cash and cash equivalents, end of period | | | 282,347 | | | | 142,529 | |
| | | | | | | | | |
Supplementary disclosures of cash flow information:
| | | | | | | | |
| Interest paid, net | | | 337 | | | | 615 | |
| Income taxes paid/(refunded) | | | - | | | | (327 | ) |
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PLASTEC TECHNOLOGIES, LTD.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (Unaudited)
(Hong Kong dollars in thousands)
| | | | | 3 Months Ended | |
| | | | | March 31, | |
| | | | | 2013 | | | 2012 | |
| | | | | HK$ | | | HK$ | |
| | | | | | | | | |
| Net Income (note) | | | | | 12,159 | | | | 1,606 | |
| Plus | | Interest expenses | | | 388 | | | | 660 | |
| Minus | | Interest incomes | | | (51 | ) | | | (45 | ) |
| Plus | | Income tax expenses | | | 10,474 | | | | 1,574 | |
| Income from operations | | | | | 22,970 | | | | 3,795 | |
| | | | | | | | | | | |
| Plus | | Depreciation and Amortization | | | 32,217 | | | | 39,764 | |
| Adjusted EBITDA | | | | | 55,187 | | | | 43,559 | |
Note: Excl. other incomes and gain / (loss) on disposals
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
