Plastec Technologies Reports Unaudited Financial Results for the Two- and Nine-Month Transition Peri

Plastec Technologies Reports Unaudited Financial Results for the Two- and Nine-Month Transition Periods Ended September 30, 2012

Financial Highlights for the Two Months Ended September 30, 2012

  • Sales of $31.3 million; an increase of 1.3%

  • Gross margin of 17.7% compared to 11.0%

  • EBITDA of $7.0 million;

  • Net income of $3.2 million, or $0.22 per diluted share


HONG KONG--(BUSINESS WIRE)-- 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, announced today unaudited financial results for the two months and year-to-date ended September 30, 2012.

As previously disclosed in the Company's Form 6-K filing with the SEC on September 11, 2012, Plastec's Board of Directors approved a change in the Company's fiscal year to a calendar period ending December 31st from a fiscal year ending on April 30th. The change in fiscal year end was made so that the Company's fiscal year end would coincide with all the Company's operating subsidiaries in the People's Republic of China. The Company will file a transition report on Form 20-F within four months after December 31, 2012 to cover the transition period from May 1, 2012 to December 31, 2012 in order to reflect this change.

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)

2 months ended

9/30/2012

2 months ended

9/30/2011

9 months ended

9/30/2012

9 months ended

9/30/2011

Sales

$

31.3

$

30.9

$

126.0

$

132.5

Cost of Revenues

$

25.8

$

27.5

$

110.2

$

113.3

Gross Profit

$

5.5

$

3.4

$

15.8

$

19.2

Gross Profit Ratio

17.7

%

11.0

%

12.5

%

14.5

%

Income from Operations

$

3.4

$

1.5

$

7.6

$

11.1

Net Income

$

3.2

$

1.1

$

6.6

$

8.0

Diluted EPS

$

0.22

$

0.07

$

0.46

$

0.60

Adjusted EBITDA*

$

7.0

$

4.8

$

22.4

$

25.7

* Reconciliation table at end of release

Management Comments

Mr. Kin Sun Sze-To, Chairman of Plastec, stated, "We are pleased to report improved margins and profitable results during the period, despite relatively flat sales. We remain conservative in our short-term view of the market and have focused our attention on streamlining our costs and improving our operating performance. We achieved a better margin in these two months largely due to more value added services rendered in our products. Throughout the difficult conditions of the past 18 months, we have focused on continuing to remain profitable and cost-effectively growing our business. We increased our capacity through the expansion of our largest facility in Shenzhen, and have begun preparations to establish production lines in Thailand. We have carefully selected the locations of production facilities in order to facilitate timely delivery of our products to customers, and our expansion into Thailand is an extension of this philosophy."

Financial Review for the Two Months Ended September 30, 2012

  • The Company's total sales for the two months ended September 30, 2012 increased 1.3% to $31.3 million from $30.9 million in the prior-year period.

  • The Company's gross profit margin for the two months ended September 30, 2012 was 17.7%, compared to 11.0% in the prior-year period. The increase in margin for the period was largely the result of a more favorable product mix, which included higher margin secondary-process finishing services.

  • EBITDA for the two months ended September 30, 2012 was $7.0 million, compared to $4.8 million in the prior-year period.

  • Net income for the two months ended September 30, 2012 was $3.2 million, or $0.22 per share based on a weighted average number of diluted shares outstanding of approximately 14.3 million, compared to $1.1 million, or $0.07 per share based on approximately 16.7 million weighted average number of diluted shares in the prior-year period.

YTD Financial Review

  • The Company's total sales for the nine months ended September 30, 2012 were $126.0 million, compared to $132.5 million in the prior-year period. The decrease is largely due to lower volume in the first half of calendar 2012.

  • The Company's gross profit margin for the nine months ended September 30, 2012 was 12.5%, compared to 14.5% in the prior-year period.

  • EBITDA for the nine months ended September 30, 2012, was $22.4 million, compared to $25.7 million in the prior-year period.

  • Net income for the nine months ended September 30, 2012 was $6.6 million, or $0.46 per share based on a weighted average number of diluted shares outstanding of approximately 14.5 million, compared to $8.0 million, or $0.60 per share based on approximately 13.5 million weighted average number of diluted shares, in the prior-year period.

Balance Sheet Highlights

($ in millions)

9/30/2012

4/30/2012

% Change

Cash and Cash Equivalents

$

28.5

$

25.6

11.3

%

Total Current Assets

89.7

81.0

10.7

%

Total Assets

157.7

153.0

3.1

%

Working Capital

30.0

21.1

42.2

%

Total Long-term Debt

0

0

N/A

Stockholders' Equity

96.1

91.3

5.3

%

Share Repurchase Update

In June 2012, the Company approved a six-month extension of its previously announced share repurchase plan, 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 (under ticker "PLTWF"), with all other terms of the repurchase plan remaining unchanged. To date, the Company has repurchased 64,675 shares and 0 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 5,500 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 2 months ended

For the 9 months ended

September 30,

September 30,

2012

2011

2012

2011

HK$

HK$

HK$

HK$

Revenue

244,121

240,978

982,728

1,033,750

Cost of revenues

(201,002

)

(214,354

)

(859,452

)

(883,694

)

Gross profit

43,119

26,624

123,276

150,056

Operating expenses

Selling, general and administrative expenses

(15,721

)

(14,873

)

(65,676

)

(64,487

)

Other income

484

77

2,620

529

Gain/(loss) on disposal of property, plant and equipment

(1,262)

55

(1,203

)

611

Total operating expenses, net

(16,499

)

(14,741

)

(64,259

)

(63,347

)

Income from operations

26,620

11,883

59,017

86,709

Interest income

45

59

145

163

Interest expense

(446

)

(544

)

(1,810

)

(2,327

)

Income before income tax expense

26,219

11,398

57,352

84,545

Income tax expense

(1,196

)

(2,611

)

(5,865

)

(21,877

)

Net income

25,023

8,787

51,487

62,668

Other comprehensive income

Foreign currency translation adjustment

(248

)

-

(649

)

7,138

Comprehensive income attributable to

Plastec Technologies, Ltd.

24,775

8,787

50,838

69,806

Weighted average number of ordinary shares

14,292,228

16,733,196

14,498,320

13,469,699

Weighted average number of diluted ordinary

shares

14,292,228

16,733,196

14,498,320

13,469,699

Basic earnings per share attributable to Plastec Technologies, Ltd.

HK$1.8

HK$0.5

HK$3.6

HK$4.7

Diluted earnings per share attributable to Plastec Technologies, Ltd.

HK$1.8

HK$0.5

HK$3.6

HK$4.7

PLASTEC TECHNOLOGIES, LTD.

CONSOLIDATED BALANCE SHEETS

(Hong Kong dollars in thousands, except number of shares, per share data and unless otherwise stated)

As at

As at

September 30, 2012

April 30, 2012

HK$

HK$

(Unaudited)

(Audited)

ASSETS

Current assets

Cash and cash equivalents

222,552

199,818

Trade receivables, less allowance for doubtful amounts of HK$nil and HK$nil as of September 30 & April 30, 2012 respectively

333,755

282,869

Inventories

122,130

128,387

Deposits, prepayment and other receivables

21,335

20,514

Total current assets

699,772

631,588

Property, plant and equipment

495,736

524,137

Prepaid lease payments

24,107

24,753

Other assets

9,987

12,813

Intangible assets

438

438

Total assets

1,230,040

1,193,729

LIABILITIES AND EQUITY

Current liabilities

Bank borrowings

121,806

156,866

Capital lease obligations

25

303

Trade payables

133,593

121,964

Other payables and accruals

135,076

115,109

Tax payable

75,369

72,936

Total current liabilities

465,869

467,178

Deferred tax liabilities

14,504

14,504

Total liabilities

480,373

481,682

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, 14,292,228 and 14,352,903 shares issued and outstanding as of September 30, 2012 and April 30, 2012, respectively)

111

112

Additional paid-in capital

75,128

77,967

Accumulated other comprehensive income

14,866

15,514

Retained earnings

659,562

618,454

Total Plastec Technologies, Ltd. Shareholders' equity

749,667

712,047

Total liabilities and shareholders' equity

1,230,040

1,193,729

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 months ended

September 30,

2012

2011

HK$

HK$

Operating activities

Net income after taxation

51,487

62,668

Adjustments to reconcile net income to net cash provided by operating activities

Depreciation and amortization

118,375

115,903

Net loss/(gain) on disposal of property, plant and equipment

1,203

(611

)

Deferred tax charge

-

(652

)

Change in operating assets and liabilities:

Trade receivables

(76,547

)

1,084

Inventories

13,285

12,888

Deposits, prepayment and other receivables

(8,785

)

1,064

Trade payables

9,657

(16,699

)

Other payables and accruals

20,120

14,577

Tax payables

6,192

22,530

Net cash provided by operating activities

134,987

212,752

Investing activities

Purchase of property, plant and equipment

(69,066

)

(123,646

)

Proceeds from disposal of property, plant and equipment

12,491

2,615

Deposits for purchase of property, plant and equipment

(9,988

)

(11,786