HONG KONG--(BUSINESS WIRE)--Plastec Technologies, Ltd. - (OTCBB:PLTYF), (the “Company”), today reported unaudited financial results for fiscal 2016 third quarter and nine-month ended September 30, 2016. 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.
Closing of Share Transfer Agreement with Shanghai Yongli
On October 11, 2016, the Company announced the closing of its previously announced Share Transfer Agreement (“Agreement”) with Shanghai Yongli Belting Co., Ltd. (“SYB”) and its wholly-owned subsidiary, Shanghai Yongjing Investment Management Co., Ltd.. As a result, the Company no longer owns Plastec International Holdings Limited (“Plastec”) or its integrated plastic manufacturing operations.
As a result of the closing occurring subsequent to quarter end, the Company’s third quarter and nine-month financial and operating highlights still represent that of the Company’s previously owned integrated plastic manufacturing service business in the People’s Republic of China and Thailand through its wholly owned subsidiaries.
Financial and Operating Highlights for the Three Months Ended September 30, 2016
(All comparisons to prior year)
- Sales of $50.6 million, an increase of 9.3% compared to $46.2 million
- Gross margin of 27.5% decreased from 28.7%
- Adjusted EBITDA of $10.3 million, an increase of 4.2% compared to $9.8 million
- Net income of $6.0 million, or $0.46 per diluted share based on 12.9 million diluted shares outstanding, compared to $6.5 million, or $0.50 per diluted share based on 12.9 million diluted shares outstanding
Fiscal 2016 Nine-Month Financial and Operating Highlights
(All comparisons to same period of prior year)
- Sales of $137.6 million, an increase of 9.9% compared to $125.2 million
- Gross margin of 28.4%, compared to 25.3%
- Adjusted EBITDA of $31.4 million, increased 24.5% from $25.2 million
- Net income of $20 million, or $1.54 per diluted share based on 12.9 million diluted shares outstanding, increased 38% from $14.5 million, or $1.12 per diluted share based on 12.9 million diluted shares outstanding
- $26.9 million in income generated from operations for the nine months ended September 30, 2016, compared to $21.8 million
Declaration of Special Dividend to Shareholders
In connection with the Agreement and following receipt of the initial portion of the Transfer Price, the Company’s Board of Directors declared a special cash dividend of US$8.00 on each outstanding ordinary share. The special cash dividend was paid on or about November 1, 2016 to shareholders of record as of October 25, 2016.
Including this special cash dividend, the Company has distributed approximately US$9.80 per ordinary share in dividends in aggregate as a measure of rewarding shareholders for their continued support since 2014.
Management Comments
Mr. Kin Sun Sze-To, Chairman of the Company, stated, “We were pleased to compete the transaction with SYB last month, while also paying a special dividend to our shareholders as part of the transaction. We are now operating as a holding company while we continue to fulfill our obligations post-transaction and evaluating potential opportunities for future upside.”
Selected Financial Highlights in USD ($ in millions, except number of shares and per share data) |
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3 months ended |
3 months ended |
Percentage |
9 months ended |
9 months ended |
Percentage |
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Sales | 50,564 | 46,245 | 9.3% | 137,633 | 125,181 | 9.9% | ||||||||||||
Cost of Revenues | 36,677 | 32,981 | 11.2% | 98,478 | 93,483 | 5.3% | ||||||||||||
Gross Profit | 13,887 | 13,264 | 4.7% | 39,155 | 31,699 | 23.5% | ||||||||||||
Gross Profit Margin | 27.5% | 28.7% | -1.2pts | 28.4% | 25.3% | 3.1pts | ||||||||||||
Income from Operations | 8,140 | 7,062 | 15.3% | 24,179 | 16,402 | 47.4% | ||||||||||||
Operating Margin | 16.1% | 15.3% | 0.8pts | 17.6% | 13.1% | 4.5pts | ||||||||||||
Net Income | 5,951 | 6,469 | -8.0% | 19,987 | 14,479 | 38.0% | ||||||||||||
Net Margin | 11.8% | 14.0% | -2.2pts | 14.5% | 11.6% | 2.9pts | ||||||||||||
Weighted Average Number of Diluted Ordinary Shares Outstanding | 12,938,128 | 12,938,128 | 12,938,128 | 12,938,128 | ||||||||||||||
Diluted EPS | $0.46 | $0.50 | -8.0% | $1.54 | $1.12 | 38.0% | ||||||||||||
Adjusted EBITDA* | 10,251 | 9,843 | 4.2% | 31,426 | 25,240 | 24.5% |
* Reconciliation table at end of release
Balance Sheet Highlights (USD in Millions) | |||||||||
9/30/2016 | 12/31/2015 | Percentage Change | |||||||
Cash and Cash Equivalents | $207.5 | $60.9 | 240.5% | ||||||
Total Current Assets | $273.9 | $119.8 | 128.6% | ||||||
Total Assets | $316.5 | $167.0 | 89.5% | ||||||
Working Capital | $92.3 | $73.4 | 25.8% | ||||||
Total Liabilities | $181.5 | $46.4 | 291.0% | ||||||
Shareholders’ Equity | $135.0 | $120.6 | 11.9% | ||||||
Total Liabilities and Shareholders' Equity | $316.5 | $167.0 | 89.5% | ||||||
2016 Third Quarter and First Nine Months Financial Review
- Total sales for three months ended September 30, 2016 increased to $50.6 million from $46.2 million in the prior-year period. Total sales for the nine months period ended September 30, 2015 were $137.6 million, compared to $125.2 million in the corresponding period in the prior year.
- The Company’s gross profit increased 4.7% from $13.3 million to $13.9 million during the third quarter ended September 30, 2016, and gross profit margin decreased to 27.5% from 28.7% for the prior-year period. For the nine months period ended September 30, 2016, the Company’s gross profit increased 23.5% from $31.7 million, or 25.3% of revenues, to $39.2 million, or 28.4% of revenues, in the prior year period.
- Income from operations increased to $8.1 million, or 16.1% of revenues, during the third quarter ended September 30, 2016, compared $7.1 million, or 15.3% of revenues, in the prior-year period. For the nine months period, income from operations increased to $24.2 million, or 17.6% of the revenues, compared to $16.4 million, or 13.1% of the revenues for the prior-year period.
- Net income for the third quarter ended September 30, 2016 decreased to $6.0 million or $0.46 per share based on approximately 12.9 million weighted average diluted shares outstanding, compared to $6.5 million or $0.50 per share based on approximately 12.9 million weighted average diluted shares, in the prior-year period. For the first nine months of 2016, the Company’s net income increased to $20 million, or $1.54 per share based on 12.9 million weighted average shares outstanding, compared to $14.5 million, or $1.12 per share based on 12.9 million weighted average shares outstanding, in the prior-year period.
- Adjusted EBITDA for the three months ended September 30, 2016 was $10.3 million, compared to $9.8 million in the prior-year period. For the first nine months of 2016, adjusted EBITDA was $31.4 million, compared to $25.2 million in the prior-year period.
Current Status of Plastec Technologies, Ltd.
The Company intends to maintain its reporting status with the U.S. Securities and Exchange Commission following the closing of the transactions contemplated by the Agreement.
The Company’s continuing operations will consist of:
- completing the construction of its manufacturing plant in Kai Ping, China, which is intended to be disposed of to SYB prior to its official operation at a price equivalent to the capital used for its construction, subject to terms and specifics to be agreed upon by the parties concerned in due course;
- collecting rental income from certain property the Company owns and that is being leased to one of Plastec’s subsidiaries;
- collect any payments we may receive upon Plastec achieving the performance targets for the years ended December 31, 2016, 2017 and 2018 as described in the Agreement; and
- to explore other investment opportunities.
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. |
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CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (Unaudited) |
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(Hong Kong dollars in thousands, except number of shares, per share data and unless otherwise stated) |
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For the 3-month
period ended September 30, |
For the 9-month
period ended September 30, |
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2016 | 2015 | 2016 | 2015 | |||||
HK$ | HK$ | HK$ | HK$ | |||||
Revenues | 394,400 | 360,712 | 1,073,536 | 976,415 | ||||
Cost of revenues | (286,084) | (257,249) | (768,129) | (729,164) | ||||
Gross profit | 108,316 | 103,463 | 305,407 | 247,251 | ||||
Operating expenses, net | ||||||||
Selling, general and administrative expenses | (48,771) | (49,851) | (124,449) | (122,646) | ||||
Other income | 2,551 | 618 | 5,899 | 1,305 | ||||
Written-off of property, plant and equipment | - | (858) | - | (2,119) | ||||
Gain on disposal of property, plant and equipment | 1,394 | 1,712 | 1,742 | 4,142 | ||||
Total operating expenses, net | (44,826) | (48,379) | (116,808) | (119,318) | ||||
Income from operations | 63,490 | 55,084 | 188,599 | 127,933 | ||||
Interest income | 203 | 204 | 873 | 1,139 | ||||
Interest expense | (173) | (338) | (545) | (1,138) | ||||
Income before income tax expense | 63,520 | 54,950 | 188,927 | 127,934 | ||||
Income tax expense | (17,106) | (4,494) | (33,030) | (14,994) | ||||
Net income | 46,414 | 50,456 | 155,897 | 112,940 | ||||
Other comprehensive income | ||||||||
Foreign currency translation adjustment | (4,184) | (6,184) | (13,439) | (1,603) | ||||
Comprehensive income attributable to Plastec Technologies, Ltd. |
42,230 |
44,272 |
142,458 |
111,337 |
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Net income per share: | ||||||||
Weighted average number of ordinary shares |
12,938,128 | 12,938,128 | 12,938,128 | 12,938,128 | ||||
Weighted average number of diluted ordinary shares |
12,938,128 |
12,938,128 |
12,938,128 |
12,938,128 |
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Basic income per share attributable to Plastec Technologies, Ltd. |
HK$3.6 |
HK$3.9 |
HK$12.0 |
HK$8.7 |
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Diluted income per share attributable to Plastec Technologies, Ltd. |
HK$3.6 |
HK$3.9 |
HK$12.0 |
HK$8.7 |
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PLASTEC TECHNOLOGIES, LTD. |
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CONSOLIDATED BALANCE SHEETS |
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(Hong Kong dollars in thousands, except number of shares, per share data and unless otherwise stated) |
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(Unaudited) September 30, |
(Audited) December 31, |
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2016 |
2015 |
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HK$ |
HK$ |
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ASSETS |
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Current assets | |||||
Cash and cash equivalents | 1,618,834 | 475,361 | |||
Trade receivables, net of allowances for doubtful accounts of
HK$nil, and |
352,187 |
303,681 |
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Inventories | 85,358 | 105,221 | |||
Bills receivable | 37,304 | 5,782 | |||
Deposits, prepayment and other receivables | 42,359 | 44,473 | |||
Total current assets | 2,136,042 | 934,518 | |||
Property, plant and equipment, net | 300,808 | 336,491 | |||
Prepaid lease payments, net | 17,020 | 18,165 | |||
Deferred tax assets | 14,486 | 13,260 | |||
Intangible assets | 520 | 438 | |||
Total assets | 2,468,876 | 1,302,872 | |||
LIABILITIES AND SHAREHOLDERS’ EQUITY |
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Current liabilities |
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Bank borrowings | 23,409 | 29,223 | |||
Trade payables | 115,147 | 111,658 | |||
Other payables and accruals | 1,193,237 | 152,095 | |||
Tax payable | 84,214 | 69,210 | |||
Total current liabilities | 1,416,007 | 362,186 | |||
Bank Borrowings | - | - | |||
Total liabilities | 1,416,007 | 362,186 | |||
Commitments and contingencies | - | - | |||
Shareholders’ equity | |||||
Ordinary shares (US$0.001 par value; 100,000,000 authorized |
101 |
101 |
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Additional paid-in capital | 26,049 | 26,049 | |||
Accumulated other comprehensive income | (5,840) | 7,599 | |||
Retained earnings | 1,032,559 | 906,937 | |||
Total shareholders’ equity | 1,052,869 | 940,686 | |||
Total liabilities and shareholders’ equity | 2,468,876 | 1,302,872 | |||
PLASTEC TECHNOLOGIES, LTD. |
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CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) |
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(Hong Kong dollars in thousands, except number of shares, per share data and unless otherwise stated) |
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For the 9-month period ended September 30, |
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2016 | 2015 | |||
HK$ | HK$ | |||
Operating activities | ||||
Net income | 155,897 | 112,940 | ||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Depreciation and amortization | 64,161 | 72,265 | ||
Loss on written-off of property, plant and equipment | - | 2,119 | ||
Gain on disposal of property, plant and equipment | (1,742) | (4,142) | ||
Deferred tax credit | (1,225) | (6,021) | ||
Changes in operating assets and liabilities: | ||||
Trade receivables | (42,746) | (38,121) | ||
Inventories | 19,863 | (10,474) | ||
Deposits, prepayment and other receivables | (26,055) | (1,636) | ||
Trade payables | 3,489 | 9,770 | ||
Other payables and accruals | 23,698 | 27,729 | ||
Tax payables | 14,823 | 5,806 | ||
Net cash provided by operating activities | 210,163 | 170,235 | ||
Investing activities | ||||
Purchase of property, plant and equipment | (36,427) | (106,321) | ||
Purchase of intangible assets | (82) | - | ||
Proceeds from disposal of property, plant and equipment | 1,906 | 8,289 | ||
Proceeds related to disposal of a subsidiary | 1,017,442 | - | ||
Net cash used in investing activities | 982,839 | (98,032) | ||
Financing activities | ||||
Net (repayment)/proceeds from bank borrowings | (5,815) | 8,258 | ||
Dividends paid | (30,275) | (121,100) | ||
Net cash used in financing activities | (36,090) | (112,842) | ||
Net increase/(decrease) in cash and cash equivalents | 1,156,912 | (40,639) | ||
Effect of exchange rate changes on cash and cash equivalents | (13,439) | (1,603) | ||
Cash and cash equivalents, beginning of period | 475,361 | 528,527 | ||
Cash and cash equivalents, end of period | 1,618,834 | 486,285 | ||
Supplementary disclosures of cash flow information: | ||||
Interest received, net | 328 | 1 | ||
Income taxes paid | (19,433) | (15,210) | ||
PLASTEC TECHNOLOGIES, LTD. |
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RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (Unaudited) |
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(Hong Kong dollars in thousands) |
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Three Months Ended | Nine Months Ended | |||||||||
September 30, | September 30, | |||||||||
2016 | 2015 | 2016 | 2015 | |||||||
HKD | HKD | HKD | HKD | |||||||
Net Income (note) | 42.469 | 48,984 | 148,256 | 109,612 | ||||||
Plus | Interest expenses | 173 | 338 | 545 | 1,138 | |||||
Minus | Interest income | (203) | (204) | (873) | (1,139) | |||||
Plus | Income tax expenses | 17,106 | 4,494 | 33,030 | 14,994 | |||||
Income from operations | 59,545 | 53,612 | 180,958 | 124,605 | ||||||
Plus | Depreciation and Amortization | 20,414 | 23,160 | 64,161 | 72,265 | |||||
Adjusted EBITDA | 79,959 | 76,772 | 245,119 | 196,870 | ||||||
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. The Company believes that the presentation of such financial information provides more useful information to investors as it indicates more clearly the Company’s future performance. EBITDA was derived by taking earnings before interest expense (net), taxes, depreciation and amortization.