PLTWF Planet 13 Holdings Inc (PK)

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 ended12/31/2011

   

8 months period ended12/31/2012

   

Year endedApril 30,2011

   

Year endedApril 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-monthPeriod 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 toPlastec 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 dilutedordinary shares

7,891,754

 

15,944,233

 

14,303,544

 

Basic income per shareattributable to Plastec Technologies, Ltd.

HK$16.9

 

HK$3.2

 

HK$4.2

 

Diluted income per shareattributable 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 ofHK$nil, HK$nil and HK$nil as of April 30, 2011 and 2012, andDecember 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; 100,000,000authorized, 16,733,196, 14,352,903 and 14,292,228shares issued and outstanding as of April 30, 2011 and2012, 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-monthPeriod 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)   (133,728)   (73,414)   Financing activities Net cash inflow from the merger transaction 58,160 - - Repurchases of shares - (92,025) (2,841) Proceeds from bank borrowings 464,651 379,465 220,809 Repayment of bank borrowings (408,917) (392,309) (280,783) Repayment of capital lease obligations (9,718) (5,311) (303) Dividends paid (70,000)   -   -   Net cash provided by (used in) financing activities 34,176   (110,180)   (63,118)   Effect of exchange rate changes on cash and cash equivalents 218 7,341 (990)   Net increase (decrease) in cash and cash equivalents 68,235 (27,280) 111,034 Cash and cash equivalents, beginning of year 151,304   219,757   199,818 Cash and cash equivalents, end of year 219,757   199,818   309,862   Supplementary disclosures of cash flow information:   Interest paid, net 2,883   2,477   1,393   Income taxes paid (4,605)   916   5,660 PLASTEC TECHNOLOGIES, LTD. RECONCILIATION OF NON-GAAP FINANCIAL MEASURE (Hong Kong dollars in thousands)                                 A reconciliation of EBITDA to net income is provided below   12 Months Ended 8 Months Ended April 30, December 31, 2011   2012 2011   2012  

 

Net Income (note)

129,079   47,725 38,296   55,717  

 

Plus

Interest expenses 3,008 2,695 1,880 1,559

 

Minus

Interest incomes (124) (218) (172) (166)

 

Plus

Income tax expenses 33,106   16,811 13,379   3,344

 

Income from operations

165,069 67,013 53,383 60,454  

 

Plus

Depreciation and Amortization 143,640   157,219 104,674   103,513

 

Adjusted EBITDA

308,709 224,232 158,057 163,967  

Note: Excl. Other Incomes and gain/(loss) on disposals

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 as adjusted for certain one-time non-recurring items and exclusions.