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.
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. | ||||||||||||
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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 | 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.
- 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 $100.8 million.
About Plastec
Originally founded in 1993 by Chairman and CEO, Mr. Kin Sun Sze-To, Plastec is an integrated plastic manufacturing services provider that operates in the People's Republic of China through its wholly owned subsidiaries. With approximately 5,500 employees, Plastec currently operates 6 separate, high-output, low-defect facilities (with gross floor areas of approximately 167,000 square meters) in 5 locations in Guangdong province in Southern China and Jiangsu province in Eastern China. Plastec provides precision plastic manufacturing services from mold design and fabrication, plastic injection manufacturing to secondary-process finishing, as well as parts assembly.
Forward Looking Statements
This press release contains "forward-looking statements." These forward-looking statements involve significant risks and uncertainties that could cause the actual results to differ materially from the expected results. Actual results may differ from expectations, estimates and projections and, consequently, you should not rely on these forward looking statements as predictions of future events. Words such as "expect," "estimate," "project," "budget," "forecast," "anticipate," "intend," "plan," "may," "will," "could," "should," "believes," "predicts," "potential," "continue," and similar expressions are intended to identify such forward-looking statements.
PLASTEC TECHNOLOGIES, LTD. | ||||||
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (UNAUDITED) | ||||||
(Hong Kong dollars in thousands, except number of shares, per share data and unless otherwise stated) | ||||||
For the 3 months ended July 31, | ||||||
2011 HK$ |
2010 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 | HK$1.6 | HK$4.9 | ||||
Diluted earnings per share attributable to | HK$1.6 | HK$4.9 |
Note: Income tax expenses for the 3 months ended July 31, 2010 included a tax adjustment for HK$2,431 for additional tax payable under enterprise income tax in China.
PLASTEC TECHNOLOGIES, LTD. | |||||||||
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (UNAUDITED) | |||||||||
(Hong Kong dollars in thousands, except number of shares, per share data and unless otherwise stated) | |||||||||
For the 3 months ended October 31, |
For the 6 months ended October 31, | ||||||||
2011 HK$ |
2010 HK$ |
2011 HK$ |
2010 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$4,862 for additional tax payable under enterprise income tax in China.
PLASTEC TECHNOLOGIES, LTD. | |||||
CONSOLIDATED BALANCE SHEETS | |||||
(Hong Kong dollars in thousands, except number of shares, per share data and unless otherwise stated) | |||||
As of October 31, 2011 HK$ |
As of April 30, 2011 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$0.001 par value; 100,000,000 shares
authorized, 16,733,196 shares and 16,733,196 shares issued and outstanding as of Oct 31 and Apr 30, 2011 respectively) | 131 | 131 | |||
Additional paid-in capital | 169,973 | 169,973 | |||
Accumulated other comprehensive income | 15,244 | 8,106 | |||
Retained earnings | 600,530 | 568,050 | |||
Total Plastec Technologies, Ltd. shareholders' equity | 785,878 | 746,260 | |||
Total liabilities and shareholders' equity | 1,257,907 | 1,201,927 |
PLASTEC TECHNOLOGIES, LTD. | ||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) | ||||||
(Hong Kong dollars in thousands, except number of shares, per share data and unless otherwise stated) | ||||||
For the 6 months ended October 31, | ||||||
2011 HK$ | 2010 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 | - |
RECONCILIATION OF NON-GAAP FINANCIAL MEASURE | ||||||||||||||||||
A reconciliation of Adjusted EBITDA to net income is provided below: | ||||||||||||||||||
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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.
Plastec Technologies, Ltd.
Eli D. Scher, Director
eli@plastec.com.hk
HL
Ning, Chief Financial Officer
ning@plastec.com.hk
or
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