MRO Magazine

Plastec Technologies Reports 2015 First Quarter Financial Results

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

(USD in millions, except number of shares and per share data)

(Results and percentages rounded to the nearest tenth)

 
       

3 months ended
March 31, 2015

   

3 months ended
March 31, 2014

   

Percentage
Change

Sales $37.6 $35.26.8%
Cost of Revenues $28.1 $26.75.0%
Gross Profit $9.5 $8.412.6%
Gross Profit Ratio25.3%24.0%
 
Income from Operations $5.3 $8.7-38.7%
Operating Margin14.2%24.7%-10.5 pts
 
Net Income $4.5 $7.9-43.2%
Net Margin11.9%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 $8.33.2%
 

* 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 $67.84.1%
Total Current Assets $125.6 $122.22.8%
Total Assets$166.7$163.02.3%
Working Capital $84.7 $82.52.6%
Total Liabilities $44.6 $43.42.9%
Shareholders’ Equity $122.1 $119.62.1%
Total Liabilities and Shareholders’ Equity$166.7$163.02.3%

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
Plastec Technologies, Ltd.

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
ordinary shares

12,938,128

   

12,938,128

 
 

Basic income per share
attributable to Plastec Technologies, Ltd.

HK$2.7

   

HK$4.8

 
 

Diluted income per share
attributable to Plastec Technologies, Ltd.

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
HK$nil, and HK$nil as of December 31, 2014 and March 31,
2015, respectively

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
authorized 12,938,128 and 12,938,128 shares issued and
outstanding as of December 31, 2014 and March 31, 2015,
respectively)

 

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
HKDHKD
 
Net Income (note)34,99429,598
 
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 EBITDA66,467    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
INVESTOR RELATIONS:
The Equity Group Inc.
Adam Prior, Senior Vice President
212-836-9606
aprior@equityny.com
or
Jiayi Fan, Associate
212-836-9612
jfan@equityny.com
or
In China
Katherine Yao, Associate
86 10 6587 6435
kyao@equityny.com

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