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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 unaudited financial results for the three months ended March 31, 2013.

Financial and Operating Highlights for the Three Months Ended March 31, 2013

(all comparisons to same period of prior year)

• Sales of $37.8 million, up 13.3% due to new customers and new product launches from existing clients
• Gross margin of 20.7%, compared to 9.4%, resulting primarily from lower costs of revenue during the period
• EBITDA of $7.1 million, compared to $5.6 million
• Net income of $1.6 million, or $0.12 per diluted share based on 13.8 million diluted shares outstanding, compared to $0.4 million, or $0.03 per diluted share based on 15.0 million diluted shares outstanding
• $3.9 million in cash generated from operations for the three months ended March 31, 2013
• During the period, the Company repurchased 600,000 of its ordinary shares
• $40.6 million in working capital and no long-term debt

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)

3 months period endedMarch 31, 2013

 

3 months period endedMarch 31, 2012

 

PercentageChange

  Sales $37.8 $33.4 13.3% Cost of Revenues $30.0 $30.2 (0.8%) Gross Profit $7.8 $3.2 148.6% Gross Profit Ratio 20.7% 9.4%   Income from Operations $2.9 $0.6 366.2% Operating Margin 7.8% 1.9%   Net Income $1.6 $0.4 344.1% Net Margin   Diluted EPS $0.12 $0.03 350.0% Adjusted EBITDA* 7.1 5.6 26.7%   * Reconciliation table at end of release   Balance Sheet Highlights

3/31/2013

12/31/2012

PercentageChange

Cash and Cash Equivalents $36.2 $39.7 (8.9%) Total Current Assets $82.4 $89.8 (8.2%) Total Assets $141.8 $151.2 (6.2%) Working Capital $40.6 $39.9 1.9% Total Long-term Debt 0 0 0.0% Total Liabilities $43.3 $51.4 (15.8%) Shareholders’ Equity $98.5 $99.8 (1.3%) Total Liabilities and Shareholders' Equity $141.8 $151.2 (6.2%)

Management Comments

Mr. Kin Sun Sze-To, Chairman of Plastec, stated, “We are pleased to report solid financial and operating results for the quarter, largely driven by new product launchings from existing clients and the addition of new customers. Our results compared favorably to the prior year period in 2012, when the whole industry was subjected to difficult and unusual circumstances brought about by the Japanese earthquake and tsunami and flooding in Thailand. We continue to strive toward improving our operating performance, which includes maintaining a low cost structure while achieving higher margins through the completion of precision molding services and new product offerings from our customers.”

Financial Review

• Total sales for the three months ended March 31, 2013 increased 13.3% to $37.8 million from $33.4 million in the prior-year period. This was largely due to an increase in sales orders from existing customers for new products launchings, as well as Plastec’s receipt of orders from new customers.
• Gross profit margin for the three months ended March 31, 2013 was 20.7%, compared to 9.4% in the prior-year period. The increase in margin for the period was largely due to a reduction in costs of revenues resulting from the Company’s efforts to further streamline its manufacturing process and to improve control of direct wages and factory overheads.
• Income from operations was $2.9 million, or 7.8% of revenues, during the three months ended March 31, 2013, compared to $0.6 million, or 1.9%, in the prior-year period.
• EBITDA for the three months ended March 31, 2013 was $7.1 million, compared to $5.6 million in the prior-year period.
• Net income for the three months ended March 31, 2013 was $1.6 million, or $0.12 per share based on approximately 13.8 million weighted average diluted shares outstanding, compared to $0.4 million, or $0.03 per share based on approximately 15.0 million weighted average diluted shares in the prior-year period.

Share Repurchase Update

In December 2012, the Company approved a twelve-month extension of its previously announced share repurchase plan through December 9, 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 repurchased 758,775 shares and 80,000 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 (Unaudited)

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

         

For the 3-monthperiod ended March 31,

2013   2012 HK$   HK$     Revenues 294,686 260,133 Cost of revenues (233,772)   (235,632) Gross profit 60,914 24,501   Operating expenses, net Selling, general and administrative expenses (37,944) (20,706) Other income 86 587 Gain/(loss) on disposal of property, plant and equipment

(67)

 

549

Total operating expenses, net (37,925)   (19,570)   Income from operations 22,989 4,931   Interest income 51 45 Interest expense (388)   (660) Income before income tax expense 22,652 4,316   Income tax expense (10,474)   (1,574) Net income 12,178 2,742   Other comprehensive income Foreign currency translation adjustment 1,318   119

Comprehensive income attributable to

Plastec Technologies, Ltd.

13,496

 

2,861

  Net income per share:   Weighted average number of ordinary shares 13,785,561   15,028,884   Weighted average number of diluted

ordinary shares

13,785,561

 

15,028,884

  Basic income per share

attributable to Plastec Technologies, Ltd.

HK$0.9

 

HK$0.2

  Diluted income per share

attributable to Plastec Technologies, Ltd.

HK$0.9

 

HK$0.2

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 31,2013

 

December 31,2012

HK$ HK$

ASSETS

  Current assets Cash and cash equivalents 282,347 309,862

Trade receivables, net of allowances for doubtful accounts of HK$nil,and HK$nil as of December 31, 2012 and March 31, 2013 respectively

235,776

257,299

Inventories 81,144 97,467 Deposits, prepayment and other receivables   43,558   35,471 Total current assets 642,825 700,099   Property, plant and equipment, net 427,037 440,383 Prepaid lease payments, net 23,331 23,719 Other assets 12,192 14,503 Intangible assets   438   438 Total assets   1,105,823   1,179,142  

LIABILITIES AND SHAREHOLDERS’ EQUITY

  Current liabilities Bank borrowings 77,305 96,892 Trade payables 124,083 151,436 Other payables and accruals 88,927 115,715 Tax payable   35,700   25,225 Total current liabilities 326,015 389,268   Deferred tax liabilities   11,629   11,629 Total liabilities   337,644   400,897   Commitments and contingencies - -   Shareholders’ equity

Ordinary shares (US$0.001 par value; 100,000,000 authorized14,292,228 and 13,692,228 shares issued and outstanding as ofDecember 31, 2012 and March 31, 2013 respectively)

107

112

Additional paid-in capital 61,775 85,332 Accumulated other comprehensive income 15,842 14,524 Retained earnings   690,455   678,277 Total shareholders’ equity   768,179   778,245         Total liabilities and shareholders’ equity   1,105,823   1,179,142

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,

  2013   2012   HK$ HK$ Operating activities Net income 12,178 2,742

Adjustments to reconcile net income to net cash provided byoperating activities:

Depreciation and amortization 32,217 39,764 Loss/(gain) on disposal of property, plant and equipment 67 (549) Changes in operating assets and liabilities: Trade receivables 21,523 (11,218) Inventories 16,323 (486) Deposits, prepayment and other receivables (8,087) (6,066) Trade payables (27,353) (11,907) Other payables and accruals (26,788) (6,477) Tax payables   10,474   1,901 Net cash provided by operating activities   30,554   7,704   Investing activities Purchase of property, plant and equipment (11,954) (30,325) Proceeds from disposal of property, plant and equipment 350 1,147 Deposits for purchase of property, plant and equipment   (116)   (1,459) Net cash used in investing activities   (11,720)   (30,637)   Financing activities Repurchases of shares (28,080) (181) Net repayment of bank borrowings (19,587) (20,427) Repayment of capital lease obligations   -   (1,112) Net cash used in financing activities   (47,667)   (21,720)       Net decrease in cash and cash equivalents (28,833) (44,653) Effect of exchange rate changes on cash and cash equivalents 1,318 110 Cash and cash equivalents, beginning of period   309,862   187,072 Cash and cash equivalents, end of period   282,347   142,529   Supplementary disclosures of cash flow information: Interest paid, net   337   615 Income taxes paid/(refunded)   -   (327)

PLASTEC TECHNOLOGIES, LTD.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (Unaudited)

(Hong Kong dollars in thousands)

    3 Months Ended   March 31, 2013   2012   HK$   HK$   Net Income (note) 12,159   1,606 Plus Interest expenses 388 660 Minus Interest incomes (51) (45) Plus Income tax expenses 10,474   1,574 Income from operations 22,970 3,795   Plus Depreciation and Amortization 32,217   39,764 Adjusted EBITDA 55,187 43,559   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

Plastec Technologies, Ltd.HL Ning, Chief Financial Officerning@plastec.com.hkEli D. Scher, Directoreli@plastec.com.hkorINVESTOR RELATIONS:The Equity Group Inc.Adam Prior, Senior Vice President212-836-9606aprior@equityny.comKatherine Yao, Associatekyao@equityny.com