UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE
SECURITIES EXCHANGE ACT OF 1934
For the month of: November 2014
Commission File Number:000-53826
PLASTEC TECHNOLOGIES, LTD.
(Translation of registrant’s name into English)
Unit 01, 21/F, Aitken Vanson Centre, 61 Hoi Yuen Road, Kwun Tong, Kowloon, Hong Kong
(Address of Principal Executive Offices)
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F. Form 20-F x Form 40-Fo
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): _____
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): _____
Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.Yeso Nox
If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-___________.
Unaudited Financial Statements
This Report of Foreign Private Issuer on Form 6-K by Plastec Technologies, Ltd. (“we, “us”, “our” or the “Company”) contains the Company’s unaudited financial results for its fiscal year 2014 third quarter and nine months ended September 30, 2014.
Forward Looking Statement
This Report of Foreign Private Issuer on Form 6-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934. These statements relate to future events or the Company’s future financial performance. The Company has attempted to identify forward-looking statements by terminology including “anticipates”, “believes”, “expects”, “can”, “continue”, “could”, “estimates”, “intends”, “may”, “plans”, “potential”, “predict”, “should” or “will” or the negative of these terms or other comparable terminology. These statements are only predictions, uncertainties and other factors may cause the Company’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. The information in this Report of Foreign Private Issuer on Form 6-K is not intended to project future performance of the Company. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot and does not guarantee future results, levels of activity, performance or achievements. The Company’s expectations are as of the date this Report of Foreign Private Issuer on Form 6-K is filed, and the Company does not intend to update any of the forward-looking statements after the date this Report of Foreign Private Issuer on Form 6-K is filed to conform these statements to actual results, unless required by law.
The forward-looking statements included in this Report of Foreign Private Issuer on Form 6-K are subject to risks, uncertainties and assumptions about our businesses and business environments. These statements reflect our current views with respect to future events and are not a guarantee of future performance. Actual results of our operations may differ materially from information contained in the forward-looking statements as a result of risk factors some of which include, among other things: continued compliance with government regulations; changing legislation or regulatory environments; requirements or changes affecting the business in which the Company is engaged; industry trends, including factors affecting supply and demand; labor and personnel relations; credit risks affecting the Company's revenue and profitability; changes in the plastic industry; the Company’s ability to effectively manage its growth, including implementing effective controls and procedures and attracting and retaining key management and personnel; changing interpretations of generally accepted accounting principles; general economic conditions; and other relevant risks detailed in the Company’s filings with the Securities and Exchange Commission.
PLASTEC TECHNOLOGIES, LTD.
CONSOLIDATED BALANCE SHEETS
(Hong Kong dollars in thousands, except number of shares, per share data and unless otherwise stated)
| (Unaudited) September 30, | (Audited) December 31, | |||||||
| 2014 | 2013 | |||||||
| HK$ | HK$ | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | 485,883 | 348,901 | ||||||
| Trade receivables, net of allowances for doubtful accounts of HK$nil, and HK$nil as of December 31, 2013 and September 30, 2014, respectively | 290,579 | 269,419 | ||||||
| Inventories | 98,935 | 107,058 | ||||||
| Deposits, prepayment and other receivables | 36,606 | 28,139 | ||||||
| Total current assets | 912,003 | 753,517 | ||||||
| Property, plant and equipment, net | 292,052 | 364,149 | ||||||
| Prepaid lease payments, net | 20,074 | 22,167 | ||||||
| Other assets | 10,681 | 2,325 | ||||||
| Deferred tax assets | 13,141 | 12,225 | ||||||
| Intangible assets | 438 | 438 | ||||||
| Total assets | 1,248,389 | 1,154,821 | ||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current liabilities | ||||||||
| Bank borrowings | 21,423 | 37,782 | ||||||
| Trade payables | 130,897 | 105,428 | ||||||
| Other payables and accruals | 113,571 | 116,608 | ||||||
| Tax payable | 55,321 | 41,389 | ||||||
| Total current liabilities | 321,212 | 301,207 | ||||||
| Bank Borrowings | 50,000 | 50,000 | ||||||
| Total liabilities | 371,212 | 351,207 | ||||||
| Commitments and contingencies | - | - | ||||||
| Shareholders’ equity | ||||||||
| Ordinary shares (US$0.001 par value; 100,000,000 authorized 12,938,128 and 12,938,128 shares issued and outstanding as of December 31, 2013 and September 30, 2014, respectively) | 101 | 101 | ||||||
| Additional paid-in capital | 26,050 | 26,455 | ||||||
| Accumulated other comprehensive income | 9,569 | 17,901 | ||||||
| Retained earnings | 841,457 | 759,157 | ||||||
| Total shareholders’ equity | 877,177 | 803,614 | ||||||
| Total liabilities and shareholders’ equity | 1,248,389 | 1,154,821 | ||||||
PLASTEC TECHNOLOGIES, LTD.
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (Unaudited)
(Hong Kong dollars in thousands, except number of shares, per share data and unless otherwise stated)
| For the 3-month period ended September 30, | For the 9-month period ended September 30, | |||||||||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||||||||
| HK$ | HK$ | HK$ | HK$ | |||||||||||||
| Revenues | 343,270 | 286,835 | 880,463 | 881,902 | ||||||||||||
| Cost of revenues | (254,790 | ) | (226,847 | ) | (676,045 | ) | (684,256 | ) | ||||||||
| Gross profit | 88,480 | 59,988 | 204,418 | 197,646 | ||||||||||||
| Operating expenses, net | ||||||||||||||||
| Selling, general and administrative expenses | (47,018 | ) | (41,379 | ) | (104,517 | ) | (121,104 | ) | ||||||||
| Other income/(expenses) | 463 | (858 | ) | 1,627 | 1,872 | |||||||||||
| Gain/(loss) on disposal of a subsidiary | (432 | ) | - | 29,125 | - | |||||||||||
| Gain/(loss) on disposal of property, plant and equipment | 383 | (13,636 | ) | 494 | (16,408 | ) | ||||||||||
| Total operating expenses, net | (46,604 | ) | (55,873 | ) | (73,271 | ) | (135,640 | ) | ||||||||
| Income from operations | 41,876 | 4,115 | 131,147 | 62,006 | ||||||||||||
| Interest income | 501 | 73 | 1,056 | 178 | ||||||||||||
| Interest expense | (413 | ) | (272 | ) | (1,281 | ) | (950 | ) | ||||||||
| Income before income tax expense | 41,964 | 3,916 | 130,922 | 61,234 | ||||||||||||
| Income tax expense | (8,635 | ) | (3,688 | ) | (18,348 | ) | (4,350 | ) | ||||||||
| Net income | 33,329 | 228 | 112,574 | 56,884 | ||||||||||||
| Other comprehensive income/(expense) | ||||||||||||||||
| Foreign currency translation adjustment | (6,179 | ) | 479 | (8,330 | ) | 2,776 | ||||||||||
| Comprehensive income attributable to Plastec Technologies, Ltd. | 27,150 | 707 | 104,244 | 59,660 | ||||||||||||
| Net income per share: | ||||||||||||||||
| Weighted average number of ordinary shares | 12,938,128 | 13,594,107 | 12,938,128 | 13,681,314 | ||||||||||||
| Weighted average number of diluted ordinary shares | 12,938,128 | 13,594,107 | 12,938,128 | 13,681,314 | ||||||||||||
| Basic income per share attributable to Plastec Technologies, Ltd. | HK$2.6 | HK$0.0 | HK$8.7 | HK$4.2 | ||||||||||||
| Diluted income per share attributable to Plastec Technologies, Ltd. | HK$2.6 | HK$0.0 | HK$8.7 | HK$4.2 | ||||||||||||
PLASTEC TECHNOLOGIES, LTD.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (Unaudited)
(Hong Kong dollars in thousands, except number of shares, per share data and unless otherwise stated)
| Ordinary shares | Accumulated | |||||||||||||||||||||||
| Number of shares outstanding | Amount | Additional paid-in capital | other comprehensive income | Retained earnings | Shareholders’ equity | |||||||||||||||||||
| HK$ | HK$ | HK$ | HK$ | HK$ | ||||||||||||||||||||
| Balance at December 31, 2012 and at January 1, 2013 | 14,292,228 | 112 | 85,332 | 14,524 | 678,277 | 778,245 | ||||||||||||||||||
| Net income for the year | - | - | - | - | 80,880 | 80,880 | ||||||||||||||||||
| Share repurchases | (1,354,100 | ) | (11 | ) | (63,360 | ) | - | - | (63,371 | ) | ||||||||||||||
| Warrant repurchases | - | - | (33 | ) | - | - | (33 | ) | ||||||||||||||||
| Capital contribution | - | - | 4,516 | - | - | 4,516 | ||||||||||||||||||
| Cumulative translation adjustment | - | - | - | 3,377 | - | 3,377 | ||||||||||||||||||
| Balance at December 31, 2013 and at January 1, 2014 | 12,938,128 | 101 | 26,455 | 17,901 | 759,157 | 803,614 | ||||||||||||||||||
| Net income for the period | - | - | - | - | 112,574 | 112,574 | ||||||||||||||||||
| Dividends declared | - | - | - | - | (30,275 | ) | (30,275 | ) | ||||||||||||||||
| Warrant repurchases | - | - | (406 | ) | - | - | (406 | ) | ||||||||||||||||
| Cumulative translation adjustment | - | - | - | (8,330 | ) | - | (8,330 | ) | ||||||||||||||||
| Balance at September 30, 2014 | 12,938,128 | 101 | 26,049 | 9,571 | 841,456 | 877,177 | ||||||||||||||||||
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 9-month period ended September 30, | ||||||||
| 2014 | 2013 | |||||||
| HK$ | HK$ | |||||||
| Operating activities | ||||||||
| Net income | 112,574 | 56,884 | ||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 82,859 | 95,405 | ||||||
| Gain on disposal of a subsidiary | (29,125 | ) | - | |||||
| (Gain)/loss on disposal of property, plant and equipment | (494 | ) | 16,408 | |||||
| Deferred tax credit | (1,829 | ) | (15,917 | ) | ||||
| Changes in operating assets and liabilities: | ||||||||
| Trade receivables | (21,159 | ) | (8,718 | ) | ||||
| Inventories | 8,123 | 1,205 | ||||||
| Deposits, prepayment and other receivables | (8,493 | ) | (11,730 | ) | ||||
| Trade payables | 25,470 | (23,001 | ) | |||||
| Other payables and accruals | (2,449 | ) | (28,117 | ) | ||||
| Tax payables | 17,328 | 18,744 | ||||||
| Net cash provided by operating activities | 182,805 | 101,163 | ||||||
| Investing activities | ||||||||
| Purchase of property, plant and equipment | (24,740 | ) | (23,281 | ) | ||||
| Proceeds from disposal of a subsidiary | 43,015 | - | ||||||
| Proceeds from disposal of property, plant and equipment | 1,204 | 3,811 | ||||||
| Deposits for purchase of property, plant and equipment | (10,681 | ) | (353 | ) | ||||
| Net cash (used in)/generated from investing activities | 8,798 | (19,823 | ) | |||||
| Financing activities | ||||||||
| Repurchases of shares and/or warrants | (406 | ) | (35,979 | ) | ||||
| Net repayment of bank borrowings | (16,360 | ) | (50,519 | ) | ||||
| Dividends paid | (30,275 | ) | - | |||||
| Net cash used in financing activities | (47,041 | ) | (86,498 | ) | ||||
| Net increase/(decrease) in cash and cash equivalents | 144,562 | (5,158 | ) | |||||
| Effect of exchange rate changes on cash and cash equivalents | (7,580 | ) | 2,776 | |||||
| Cash and cash equivalents, beginning of period | 348,901 | 309,862 | ||||||
| Cash and cash equivalents, end of period | 485,883 | 307,480 | ||||||
| Supplementary disclosures of cash flow information: | ||||||||
| Interest paid, net | 225 | 772 | ||||||
| Income taxes paid | 2,849 | 881 | ||||||
Plastec Technologies, Ltd.
Management discussion and analysis
General
The unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“USGAAP”). The preparation of financial statements in conformity with USGAAP requires management to make estimates and assumptions that reported amounts of assets and liabilities at the date of the financial statements and the amount of expenses reported during the period. Actual results could differ from those estimates. Unless otherwise indicated, all financial information presented in HK$ may be converted to US$ using the exchange rate of 7.8 HK$ for every 1 US$.
Results of Operations
Operating results for the third quarter ended September 30, 2014 compared to the third quarter ended September 30, 2013
We recorded an approximately 19.7% increase in revenue for the third quarter ended September 30, 2014 to HK$343.3 million compared to the corresponding period in the prior year. The increase in revenue was primarily due to increased sales orders in line with the product launching of our customers, as well as new sales orders solicited in this quarter.
Our gross profit increased by approximately 47.5% to HK$88.5 million compared to the corresponding period in the prior year. The increase was primarily due to a decrease in costs of revenues such as raw materials costs compared to the corresponding period in the prior year as a result of our continued focusing on sales orders with higher margins. Gross profit margin increased to 25.8% from 20.9% compared to the corresponding period in the prior year.
Income before income tax expenses increased by approximately 971.6% to HK$42.0 million compared to the corresponding period in the prior year. The increase in this period resulted from the increased gross margin and that there was a loss on disposals of property, plant and equipment of HK$13.6 million in the corresponding period in the prior year.
Total selling, general and administrative expenses increased by approximately 13.6% to HK$47.0 million compared to the corresponding period in the prior year. This increase was mainly attributable to an exchange loss of approximately HK$9.7 million during the period compared to an exchange loss of HK$3.5 million in the corresponding period in the prior year.
Income tax expense was HK$8.6 million in this period compared to HK$3.7 million in the corresponding period in the prior year, representing an effective tax rate of 20.6% currently. Net income after tax increased to HK$33.3 million in the third quarter ended September 30, 2014, compared to net income after tax of HK$0.2 million in the corresponding period in the prior year.
Operating results for the nine months ended September 30, 2014 compared to the nine months ended September 30, 2013
We recorded an approximately 0.2% slight decline in revenue for the nine months ended September 30, 2014 to HK$880.5 million compared to the corresponding period in the prior year. The decrease in revenue was mainly attributable to our continued efforts in pursuing sales orders with higher margins.
Our gross profit was HK$204.4 million for the nine months ended September 30, 2014, increased by approximately 3.4% from the corresponding period in the prior year. Gross profit margin increased to 23.2% from 22.4% correspondingly.
Income before income tax expenses increased by approximately 113.8% to HK$130.9 million compared to the corresponding period in the prior year. The increase was largely a combined result of a one-off gain on disposal of a subsidiary for approximately HK$29.1 million and a minimization of selling, general and administrative expenses in the period, in contrast with loss arising from disposals of property, plant and equipment of HK$16.4 million in the corresponding period in the prior year.
Total selling, general and administrative expenses decreased by approximately 13.7% to HK$104.5 million compared to the corresponding period in the prior year. The decrease was mainly attributable to our implementation of costs containment strategies and capacity restructuring during 2013 resulting in downsizing and cessation of our operations at Heyuan and Zuhai.
Income tax expense was HK$18.3 million compared to HK$4.4 million in the corresponding period in the prior year, representing an effective tax rate of 14.0% currently.
Net income after tax increased by approximately 97.9% to HK$112.6 million in the nine months ended September 30, 2014, compared to net income after tax of HK$56.9 million in the corresponding period in prior year.
Balance sheet positions as at September 30, 2014 compared to December 31, 2013
Total assets increased by HK$93.6 million or approximately 8.1% to HK$1,248.4 million as at September 30, 2014 compared to HK$1,154.8 million as at December 31, 2013. This increase was mainly attributed to a HK$137.0 million increase in cash and cash equivalents, a HK$21.2 million increase in trade receivables, a HK$8.5 million increase in deposits, prepayment and other receivables, and a HK$8.3 million increase in other assets against a HK$72.1 million decrease in net book value of fixed assets and a HK$8.1 million decrease in inventories.
Total liabilities increased by HK$20.0 million or approximately 5.7% to HK$371.2 million as at September 30, 2014 compared to HK$351.2 million as at December 31, 2013. This increase was mainly attributed to a HK$25.5 increase in trade payables and a HK$13.9 increase in tax payables, against a HK$16.4 million decrease in bank borrowings.
Cashflow analysis
We have relied primarily upon internally generated funds and bank borrowings to finance our operations and expansion.
For the nine months ended September 30, 2014, we recorded HK$144.5 million cash inflow as compared to HK$5.2 million cash outflow in the corresponding period in the prior year, arising from increased cash provided by operating activities, increased cash generated from investing activities which included proceeds from disposals of a subsidiary, underpinned also by a decreased cash used in financing activities during the period.
We generated HK$182.8 million net cash inflow provided by operating activities which included an adjustment of HK$29.1 million gain on disposal of a subsidiary, compared to HK$101.2 million net cash inflow in the corresponding period in the prior year. We recorded approximately HK$43.0 million proceeds from disposal of a subsidiary which accordingly contributed to the HK$8.8 million net cash generated from investing activities, compared to HK$19.8 million net cash used in investing activities in the corresponding period in the prior year. Net cash used in financing activities for the period was HK$47.0 million which included HK$30.3 million payment of dividends, compared to HK$86.5 million net cash used in financing activities in the corresponding period in the prior year which included HK$36.0 million used in repurchases of securities during the corresponding period in the prior year.
Off-Balance Sheet Arrangements
The Company has not entered into any financial guarantees or other commitments to guarantee the payment obligations of third parties. The Company has not entered into any derivative contracts that are indexed to its shares and classified as shareholder’s equity or that are not reflected in its combined financial statements. Furthermore, the Company does not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. The Company does not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to it or that engages in leasing, hedging or research and development services with the Company. There are no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company’s financial condition, net sales or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to an investor.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| PLASTEC TECHNOLOGIES, LTD. | ||
| By: | /s/ Kin Sun Sze-To | |
| Name: | Kin Sun Sze-To | |
| Title: | Chief Executive Officer | |
Dated: November 12, 2014
