Plastec Technologies Reports 2015 First Quarter Financial Results
May 12, 2015 | By Business Wire News
HONG KONG
Plastec Technologies, Ltd. – (OTCBB: PLTYF (ordinary shares), PLTEF (units)) (“Plastec” or the “Company”), an integrated plastic manufacturing services provider that operates in the People’s Republic of China and Thailand, today reported unaudited financial results for fiscal 2015 first quarter ended March 31, 2015. See financial 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.
Financial and Operating Highlights for the Three Months Ended March 31, 2015
(all comparisons to prior year)
- Sales of $37.6 million, an increase of 6.8% compared to $35.2 million, as a result of increasing new orders from existing customers and the addition of new customers
- Gross margin of 25.3%, compared to 24.0%, resulting primarily from execution of cost-containment strategies
- Adjusted EBITDA of $8.5 million, compared to $8.3 million
- Net income of $4.5 million, or $0.35 per diluted share based on 12.9 million diluted shares outstanding, compared to $7.9 million, or $0.62 per diluted share based on 12.9 million diluted shares outstanding
- $5.6 million in cash from operations
Balance Sheet Highlights
- $84.7 million in working capital at March 31, 2015, compared to $82.5 million at December 31, 2014
- Book value per share of $9.44 at March 31, 2015
Dividends Distribution
- On May 1, 2015, the Company paid a final cash dividend for the fiscal year ended December 31, 2014 of $0.20 per ordinary share.
- The Company also announced today that its Board of Directors has declared a special one-time cash dividend of $0.90 on each outstanding ordinary share. The special cash dividend will be paid on or about June 02, 2015 to shareholders of record as of May 26, 2015.
Management Comments
Mr. Kin Sun Sze-To, Chairman of Plastec, stated, “We were pleased to announce good first quarter results. We continued to invest in our company, which allows us to provide our customers with higher quality of plastic molding services and maintain a stable cost infrastructure. We are focused on upgrading our operations with the latest tooling and molding machineries in order to meet the growing needs of our customers in first-run products, as well as improving our distribution both in terms of capabilities and capacities. We intend to continue to focus on bottom line performance, avoiding lower margin orders for the sole benefit of generating sales. We also continue to balance this growth while also rewarding the continued support of our shareholders, by such means as securities repurchases and dividend payouts, when appropriate. We believe these demonstrate confidence in our growth prospects, free cash flow generation and financial outlook over the long-term. This special one-time cash dividend further reinforces our commitment to delivering value to our shareholders, while continuing to invest in our business.”
Selected Financial Highlights |
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(USD in millions, except number of shares and per share data) |
|||||||||||
(Results and percentages rounded to the nearest tenth) |
|||||||||||
3 months ended |
3 months ended |
Percentage |
|||||||||
Sales | $37.6 | $35.2 | 6.8% | ||||||||
Cost of Revenues | $28.1 | $26.7 | 5.0% | ||||||||
Gross Profit | $9.5 | $8.4 | 12.6% | ||||||||
Gross Profit Ratio | 25.3% | 24.0% | |||||||||
Income from Operations | $5.3 | $8.7 | -38.7% | ||||||||
Operating Margin | 14.2% | 24.7% | -10.5 pts | ||||||||
Net Income | $4.5 | $7.9 | -43.2% | ||||||||
Net Margin | 11.9% | 22.4% | -10.5 pts | ||||||||
Weighted Average Number of Diluted Shares Outstanding | 12,938,128 | 12,938,128 | – | ||||||||
Diluted EPS | $0.35 | $0.62 | -43.75 pts | ||||||||
Adjusted EBITDA* | $8.5 | $8.3 | 3.2% | ||||||||
* Reconciliation table at end of release |
Balance Sheet Highlights (USD in Millions) | ||||||
3/31/2015 | 12/31/2014 |
Percentage Change |
||||
Cash and Cash Equivalents | $70.6 | $67.8 | 4.1% | |||
Total Current Assets | $125.6 | $122.2 | 2.8% | |||
Total Assets | $166.7 | $163.0 | 2.3% | |||
Working Capital | $84.7 | $82.5 | 2.6% | |||
Total Liabilities | $44.6 | $43.4 | 2.9% | |||
Shareholders’ Equity | $122.1 | $119.6 | 2.1% | |||
Total Liabilities and Shareholders’ Equity | $166.7 | $163.0 | 2.3% |
Financial Review
- Total sales for three months ended March 31, 2015 increased to $37.6 million from $35.2 million in the prior-year period. The increase was due to factors including our continued focus on soliciting new orders from existing customers as well as new customers.
- The Company’s gross profit increased by 12.6% to $9.5 million during the period ended March 31, 2015, and gross profit margin improved to 25.3% from 24.0% for the prior-year period. The increase in gross profit and margin was due to a number of factors, including capturing more first-run product lines from our customers and streamlining our manufacturing process.
- Income from operations was $5.3 million, or 14.2% of revenues, during period ended March 31, 2015, compared to $8.7 million, or 24.7%, in the prior-year period mainly attributable to a one-time $4.1 million gain on disposal of a subsidiary recorded in the 2014 first quarter.
- Similarly, net income for the period ended March 31, 2015 was $4.5 million or $0.35 per share based on approximately 12.9 million weighted average diluted shares outstanding, compared to $7.9 million, or $0.62 per share based on approximately 12.9 million weighted average diluted shares, in the prior-year period.
- Adjusted EBITDA for the three months ended March 31, 2015 was $8.5 million, compared to $8.3 million in the prior-year period.
Update on Securities Repurchase Plan
The Company has a repurchase plan in place, expanded and extended through September 25, 2015, allowing it to purchase up to $5 million of its securities in both open market and privately negotiated transactions at the discretion of the Company’s management and as market conditions allow; which repurchase plan may be suspended, modified or discontinued without any notice at any time. As of the date of this press release, the Company had repurchased 586,010 ordinary shares, 547,600 warrants and no units under the current plan.
About Plastec
Originally founded in 1993 by Chairman and CEO, Mr. Kin Sun Sze-To, Plastec is an integrated plastic manufacturing services provider that operates in the People’s Republic of China and Thailand through its wholly owned subsidiaries. With approximately 4,800 employees, Plastec provides precision plastic manufacturing services from mold design and fabrication, plastic injection manufacturing to secondary-process finishing, as well as parts assembly.
Forward Looking Statements
This press release contains “forward-looking statements.” These forward-looking statements involve significant risks and uncertainties that could cause the actual results to differ materially from the expected results. Actual results may differ from expectations, estimates and projections and, consequently, you should not rely on these forward looking statements as predictions of future events. Words such as “expect,” “estimate,” “project,” “budget,” “forecast,” “anticipate,” “intend,” “plan,” “may,” “will,” “could,” “should,” “believes,” “predicts,” “potential,” “continue,” and similar expressions are intended to identify such forward-looking statements.
PLASTEC TECHNOLOGIES, LTD. | |||||||||
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (Unaudited) | |||||||||
(Hong Kong dollars in thousands, except number of shares, per share data and unless otherwise stated) | |||||||||
For the 3-month
period ended March 31, |
|||||||||
2015 | 2014 | ||||||||
HK$ | HK$ | ||||||||
Revenues | 292,892 | 274,253 | |||||||
Cost of revenues | (218,926 | ) | (208,547 | ) | |||||
Gross profit | 73,966 | 65,706 | |||||||
Operating income/(expenses), net | |||||||||
Selling, general and administrative expenses | (32,361 | ) | (29,850 | ) | |||||
Other income | 297 | 57 | |||||||
Gain on disposal of a subsidiary | – | 32,162 | |||||||
Written-off of property, plant and equipment | (433 | ) | (440 | ) | |||||
Gain on disposal of property, plant and equipment |
137 |
188 |
|||||||
Total operating (expenses)/income, net | (32,360 | ) | 2,117 | ||||||
Income from operations | 41,606 | 67,823 | |||||||
Interest income | 651 | 167 | |||||||
Interest expense | (313 | ) | (420 | ) | |||||
Income before income tax expense | 41,944 | 67,570 | |||||||
Income tax expense | (6,949 | ) | (6,005 | ) | |||||
Net income | 34,995 | 61,565 | |||||||
Other comprehensive income/(expenses) |
|||||||||
Foreign currency translation adjustment | 4,844 | (2,151 | ) | ||||||
Comprehensive income attributable to |
39,839 |
59,414 |
|||||||
Net income per share: | |||||||||
Weighted average number of ordinary shares | 12,938,128 | 12,938,128 | |||||||
Weighted average number of diluted |
12,938,128 |
12,938,128 |
|||||||
Basic income per share |
HK$2.7 |
HK$4.8 |
|||||||
Diluted income per share |
HK$2.7 |
HK$4.8 |
PLASTEC TECHNOLOGIES, LTD. | |||||
CONSOLIDATED BALANCE SHEETS | |||||
(Hong Kong dollars in thousands, except number of shares, per share data and unless otherwise stated) | |||||
(Unaudited) | (Audited) | ||||
March 31, |
December 31, |
||||
2015 | 2014 | ||||
HK$ | HK$ | ||||
ASSETS |
|||||
Current assets | |||||
Cash and cash equivalents | 550,321 | 528,527 | |||
Trade receivables, net of allowances for doubtful accounts of |
275,848 |
278,553 |
|||
Inventories | 88,171 | 96,030 | |||
Deposits, prepayment and other receivables | 65,633 | 50,204 | |||
Total current assets | 979,973 | 953,314 | |||
Property, plant and equipment, net | 284,608 | 283,500 | |||
Prepaid lease payments, net | 19,310 | 19,692 | |||
Deferred tax assets | 16,277 | 14,212 | |||
Intangible assets | 438 | 438 | |||
Total assets | 1,300,606 | 1,271,156 | |||
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|||||
Current liabilities | |||||
Bank borrowings | 21,429 | 21,429 | |||
Trade payables | 110,540 | 125,854 | |||
Other payables and accruals | 105,105 | 103,576 | |||
Dividend payables | 20,183 | – | |||
Tax payable | 62,132 | 58,736 | |||
Total current liabilities | 319,389 | 309,595 | |||
Bank borrowings | 28,571 | 28,571 | |||
Total liabilities | 347,960 | 338,166 | |||
Commitments and contingencies | – | – | |||
Shareholders’ equity | |||||
Ordinary shares (US$0.001 par value; 100,000,000 |
101 |
101 |
|||
Additional paid-in capital | 26,049 | 26,049 | |||
Accumulated other comprehensive income | 14,981 | 10,137 | |||
Retained earnings | 911,515 | 896,703 | |||
Total shareholders’ equity | 952,646 | 932,990 | |||
Total liabilities and shareholders’ equity | 1,300,606 | 1,271,156 |
PLASTEC TECHNOLOGIES, LTD. | ||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) | ||||||||
(Hong Kong dollars in thousands, except number of shares, per share data and unless otherwise stated) | ||||||||
For the 3-month
period ended March 31, |
||||||||
2015 | 2014 | |||||||
HK$ | HK$ | |||||||
Operating activities | ||||||||
Net income | 34,995 | 61,565 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 24,862 | 28,550 | ||||||
Gain on disposal of a subsidiary | – | (32,162 | ) | |||||
Loss on written-off of property, plant and equipment | 433 | 440 | ||||||
Gain on disposal of property, plant and equipment | (137 | ) | (186 | ) | ||||
Deferred tax charge | (1,335 | ) | (985 | ) | ||||
Changes in operating assets and liabilities: | ||||||||
Trade receivables | 2,705 | 31,871 | ||||||
Inventories | 7,859 | 15,519 | ||||||
Deposits, prepayment and other receivables | (15,431 | ) | (5,513 | ) | ||||
Trade payables | (15,315 | ) | (17,449 | ) | ||||
Other payables and accruals | 1,530 | (20,308 | ) | |||||
Tax payables | 3,397 | 6,990 | ||||||
Net cash provided by operating activities | 43,563 | 68,332 | ||||||
Investing activities | ||||||||
Purchase of property, plant and equipment | (27,882 | ) | (8,925 | ) | ||||
Proceeds from disposal of a subsidiary | – | 46,052 | ||||||
Proceeds from disposal of property, plant and equipment | 1,269 | 220 | ||||||
Deposits for purchase of property, plant and equipment | – | (2,517 | ) | |||||
Net cash (used in)/provided by investing activities | (26,613 | ) | 34,830 | |||||
Financing activities | ||||||||
Net repayment of bank borrowings | – | (4,297 | ) | |||||
Net cash used in financing activities | – | (4,297 | ) | |||||
Effect of exchange rate changes on cash and cash equivalents | 4,844 | (2,955 | ) | |||||
Net increase in cash and cash equivalents | 16,950 | 98,865 | ||||||
Cash and cash equivalents, beginning of period | 528,527 | 348,901 | ||||||
Cash and cash equivalents, end of period | 550,321 | 444,811 | ||||||
Supplementary disclosures of cash flow information: | ||||||||
Interest received/(paid), net | 338 | (254 | ) | |||||
Income taxes paid | 4,888 | – |
PLASTEC TECHNOLOGIES, LTD. | |||||||||
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (Unaudited) | |||||||||
(Hong Kong dollars in thousands) | |||||||||
Three Months Ended | |||||||||
March 31 | |||||||||
2015 | 2014 | ||||||||
HKD | HKD | ||||||||
Net Income (note) | 34,994 | 29,598 | |||||||
Plus | Interest expenses | 313 | 420 | ||||||
Minus | Interest income | (651 | ) | (167 | ) | ||||
Plus | Income tax expenses | 6.949 | 6,005 | ||||||
Income from operations | 41,605 | 35,856 | |||||||
Plus | Depreciation and Amortization | 24,862 | 28,550 | ||||||
Adjusted EBITDA | 66,467 | 64,406 | |||||||
Note: Excl. other income and gain/(loss) on disposals/written-off |
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
Plastec Technologies, Ltd.
HL Ning, Chief Financial Officer
ning@plastec.com.hk
or
Eli D. Scher, Director
eli@plastec.com.hk
or
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