Plastec Technologies Reports Audited Financial Results for the Eight-Month Transition Period Ended D

Plastec Technologies Reports Audited Financial Results for the Eight-Month Transition Period Ended December 31, 2012

Financial Highlights for the Eight Months Transition Period Ended December 31, 2012
(all comparisons to same period of prior year)

  • Sales of $119.7 million, up 2.5%

  • Gross margin of 13.6%, compared to 12.1%

  • EBITDA of $21.0 million, compared to $20.3 million

  • Net income of $7.7 million, or $0.54 per diluted share based on 14.3 million diluted shares outstanding, compared to $5.1 million, or $0.31 per diluted share based on 16.5 diluted shares outstanding

  • $31.7 million cash generated from operations for the eight months ended December 31, 2012

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, today reported audited financial results for the eight months transition period ended December 31, 2012.


On September 11, 2012, the Company determined to change its fiscal year end from April 30 to December 31. 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 financial highlights and figures below for the 8-month period ended December 31, 2011 have not been audited and are presented for comparative purposes only.

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)

8 months period ended
12/31/2011

8 months period ended
12/31/2012

Year ended
April 30,2011

Year ended
April 30,2012

Sales

$116.8

$119.7

$169.7

$165.5

Cost of Revenues

102.7

103.5

137.8

146.5

Gross Profit

14.1

16.3

31.9

19.0

Gross Profit Ratio

12.1%

13.6%

18.8%

11.5%

Income from Operations

7.1

8.3

21.7

8.9

Net Income

5.1

7.7

17.1

6.5

Diluted EPS

$0.31

$0.54

$2.17

$0.41

Adjusted EBITDA*

20.3

21.0

39.6

28.7

* Reconciliation table at end of release

Management Comments

Mr. Kin Sun Sze-To, Chairman of Plastec, stated, "We are pleased to report solid margins and profitable results during the period, despite relatively flat sales due to a difficult export market. We remain conservative in our short-term view of the industry cycle and have focused our attention on streamlining our costs and improving our operating performance. We have focused on continuing to remain profitable and cost-effectively growing our business by utilizing our advanced and modernized machines and equipment. We continue to benefit from increased capacity at our largest facility in Shenzhen, and have been undergoing trial production runs at a manufacturing facility in Thailand since January 2013. Our goal is to match our production centers in close proximity to our largest customers, many of whom have been Plastec clients for over 5 years. We have carefully selected the locations of these 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 Eight Months Transition Period Ended December 31, 2012

  • The Company's total sales for the eight months ended December 31, 2012 increased 2.5% to $119.7 million from $116.8 million in the prior-year period.

  • The Company's gross profit margin for the eight months ended December 31, 2012 was 13.6%, compared to 12.1% in the prior-year period. The increase in margin for the period was largely the result of a higher number of new products ordered by the Company's existing clients coupled with new customers.

  • Adjusted EBITDA for the eight months ended December 31, 2012 was $21.0 million, compared to $20.3 million in the prior-year period.

  • Net income for the eight months ended December 31, 2012 was $7.7 million, or $0.54 per share based on a weighted average number of diluted shares outstanding of approximately 14.3 million, compared to $5.1 million, or $0.31 per share based on approximately 16.5 million weighted average number of diluted shares in the prior-year period.

Balance Sheet Highlights

($ in millions)

4/30/2011

4/30/2012

12/31/2012

Cash and Cash Equivalents

$28.2

$25.6

$39.7

Total Current Assets

79.1

81.0

89.8

Total Assets

154.1

153.0

151.2

Working Capital

22.7

21.1

39.9

Total Long-term Debt

0

0

0

Shareholders' Equity

95.7

91.3

99.8

Repurchase Update

In December 2012, the Company approved a twelve-month extension of its previously announced share repurchase plan through December 09, 2013, 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, with all other terms of the repurchase plan remaining unchanged. To date, the Company has repurchased 664,675 shares and nil 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 5,400 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

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

Year ended April 30,

For 8-month
Period ended December 31,

2011

2012

2012

HK$

HK$

HK$

Revenues

1,323,533

1,291,223

933,888

Cost of revenues

(1,074,880)

(1,142,653)

(807,104)

Gross profit

248,653

148,570

126,784

Operating expenses, net

Selling, general and administrative expenses

(83,584)

(81,557)

(66,330)

Other income

4,711

2,431

6,266

Write-off of property, plant and equipment

(1,791)

(690)

(4,058)

Gain on disposal of property, plant and equipment

1,315

938

1,898

Total operating expenses, net

(79,349)

(78,878)

(62,224)

Income from operations

169,304

69,692

64,560

Interest income

124

218

166

Interest expense

(3,008)

(2,695)

(1,559)

Income before income tax expense

166,420

67,215

63,167

Income tax expense

(33,106)

(16,811)

(3,344)

Net income

133,314

50,404

59,823

Other comprehensive income

Foreign currency translation adjustment

218

7,408

(990)

Comprehensive income attributable to
Plastec Technologies, Ltd.

133,532

57,812

58,833

Net income per share:

Weighted average number of ordinary shares

7,891,754

15,944,233

14,303,544

Weighted average number of diluted
ordinary shares

7,891,754

15,944,233

14,303,544

Basic income per share
attributable to Plastec Technologies, Ltd.

HK$16.9

HK$3.2

HK$4.2

Diluted income per share
attributable to Plastec Technologies, Ltd.

HK$16.9

HK$3.2

HK$4.2

PLASTEC TECHNOLOGIES, LTD.

CONSOLIDATED BALANCE SHEETS

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

April 30,

April 30,

December 31,

2011

2012

2012

HK$

HK$

HK$

ASSETS

Current assets

Cash and cash equivalents

219,757

199,818

309,862

Trade receivables, net of allowances for doubtful accounts of
HK$nil, HK$nil and HK$nil as of April 30, 2011 and 2012, and
December 31, 2012 respectively

270,763

282,869

257,299

Inventories

117,733

128,387

97,467

Deposits, prepayment and other receivables

8,357

20,514

35,471

Total current assets

616,610

631,588

700,099

Property, plant and equipment, net

551,079

524,137

440,383

Prepaid lease payments, net

26,237

24,753

23,719

Other assets

8,001

12,813

14,503

Intangible assets

-

438

438

Total assets

1,201,927

1,193,729

1,179,142

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities

Bank borrowings

169,710

156,866

96,892

Capital lease obligations

5,311

303

-

Trade payables

127,987

121,964

151,436

Other payables and accruals

80,811

115,109

115,715

Tax payable

56,389

72,936

25,225

Total current liabilities

440,208

467,178

389,268

Capital lease obligations

303

-

-

Deferred tax liabilities

15,156

14,504

11,629

Total liabilities

455,667

481,682

400,897

Commitments and contingencies

-

-

-

Shareholders' equity

Ordinary shares (US$0.001 par value; 100,000,000
authorized, 16,733,196, 14,352,903 and 14,292,228
shares issued and outstanding as of April 30, 2011 and
2012, and December 31, 2012, respectively)

131

112

112

Additional paid-in capital

169,973

77,967

85,332

Accumulated other comprehensive income

8,106

15,514

14,524

Retained earnings

568,050

618,454

678,277

Total shareholders' equity

746,260

712,047

778,245

Total liabilities and shareholders' equity

1,201,927

1,193,729

1,179,142

PLASTEC TECHNOLOGIES, LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS

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

Year ended April 30,

For 8-month
Period ended December 31,

2011

2012

2012

HK$

HK$

HK$

Operating activities

Net income

133,314

50,404

59,823

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

Depreciation and amortization

143,640

157,219

103,513

Net gain on disposal of property, plant and equipment

(1,315)

(938)

(1,897)

Net gain on disposal of prepaid leases

(3,799)

-

-

Write-off of property, plant and equipment

1,791

690

4,058

Impairment on inventories

6,095

6,920

4,108

Deferred tax charge

-

(652)

(2,732)

Changes in operating assets and liabilities:

Trade receivables

(28,666)

(12,106)

25,553

Inventories

(49,530)

(17,574)

26,812

Deposits, prepayment and other receivables

3,382

(12,158)

(13,772)

Trade payables

(8,027)

(6,023)

29,472

Other payables and accruals

27,044

34,299

12,212

Tax payables

37,711

16,547

416

Net cash provided by operating activities

261,640

216,628

247,566

Investing activities

Purchase of property, plant and equipment

(225,904)

(126,167)

(87,224)

Proceeds from disposal of property, plant and equipment

2,405

5,252

29,665

Proceeds from disposal of prepaid leases

3,919

-

-

Deposits for purchase of property, plant and equipment

(8,001)

(12,813)

(15,690)

Net loss on disposals of subsidiaries

-

-

(165)

Net cash used in investing activities

(227,581)