Packaging
Plastec Technologies, Ltd. Reports Unaudited Fiscal 2011 Third Quarter and Nine Month Financial Results for Its Operating Subsidiary
Thursday 14. April 2011 - Record sales of $42.0 million, an increase of 42.8% year over year
FY 2011 Q3 Financial Highlights
Record sales of $42.0 million, an increase of 42.8% year over year
Gross margin of 19.9% compared to 16.1%
EBITDA of $10.4 million, up 54.4% year over year
Net income of $5.6 million, or $0.69 per diluted share
Fiscal 2011 Nine Month Financial Highlights
Sales of $128.3 million, an increase of 40.1% year over year
Gross margin of 19.6% compared to 17.8%
EBITDA of $31.2 million, up 41.7% year over year
Net income of $16.0 million, an increase of 274.0% year over year
Diluted earnings per share of $2.15
$24.8 million cash generated from operations for the nine months ended January 31, 2011
Plastec Technologies, Ltd. (OTCBB: PLTYF, PLTEF, PLTWF) (the “Company”), an integrated plastic manufacturing services provider that operates in the Peoples Republic of China through its wholly owned subsidiary, Plastec International Holdings Limited (“Plastec”), today reported interim, unaudited financial results for the Companys fiscal 2011 third quarter and nine months ended January 31, 2011.
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$7.8 (see table below).
Plastec Technologies, Ltd.
Selected Financial Statements in USD ($ in 000s)
3 months ended
3 months ended
9 months ended
9 months ended
1/31/2011
1/31/2010 1/31/2011 1/31/2010
Sales $42,048 $29,442 $128,279 $91,541
Cost of Revenues $33,674 $24,702 $103,115 $75,213
Gross Profit $8,374 $4,740 $25,164 $16,328
Gross Profit Ratio 19.9 % 16.1 % 19.6 % 17.8 %
Income from operations $6,215 ($2,064 ) $18,206 $5,553
Net Income $5,606 ($2,480 ) $15,977 $4,272
Diluted EPS $0.69 ($0.35 ) $2.15 $0.61
EBITDA $10,443 $6,762 $31,183 $22,010
Mr. Kin Sun Sze-To, Chairman of Plastec, stated, “We are very pleased with our growth during the quarter. We have continued to benefit from our existing long-term customer relationships, particularly with one company in the educational toy business that launched a new, highly specialized plastic toy in January 2011. Plastec was the manufacturer for this complicated, “first run” product line. A number of these customers have indicated their optimistic forecast for coming years, and we have benefitted by providing our high-quality precision plastic molding services for these new product lines. Despite a number of our competitors having struggled in recent years due to a difficult global economic environment, we have remained profitable. Our financial position is very strong, with approximately $28.3 million in cash as of January 31, 2011, and a continued record of generating free cash flow while still regularly investing in our business.”
Mr. Sze-To continued, “We currently are operating at capacity and expect to complete expansion of our largest facility in Shenzhen by September 2011, which will increase our manufacturing capabilities by 20%. In addition to our leading market position in consumer electronics, we also are continuing to look at potential acquisition possibilities in new markets that require high-quality, specialized plastic injection services, such as medical devices or automotive parts. “
Fiscal 2011 Third Quarter and Nine Month Financial Review
The Companys total sales for the three months ended January 31, 2011 increased 42.8% to $42.0 million from $29.4 million. Plastecs sales grew during the period largely as a result of increased sales from its existing larger client base (primarily leading, international brand manufacturers and OEMs of consumer electronics, telecommunication and precision plastic toys). Plastecs top 5 customers account for approximately 75.1% of its revenues, and all have long-standing customer relationships with Plastec, averaging approximately 5 years. For the nine months ended January 31, 2011, Plastecs total sales were $128.3 million, an increase of 40.1% over the $91.5 million reported in the prior-year period.
The Companys gross profit margin improved during the three and nine months ended January 31, 2011, due to a higher average price for its products, partially offset by increases in wages and raw material costs. As a percentage of total sales, overall gross margin improved to 19.9% for the three months ended January 31, 2011, up from 16.1% in the prior-year period. Gross margin was 19.6% and 17.8% for the nine months ended January 31, 2011, and January 31, 2010, respectively.
EBITDA for the three months ended January 31, 2011, increased 54.4% to $10.4 million from $6.8 million in the prior three-month period, and 41.7% to $31.2 million in the first nine months of fiscal 2011 from $22.0 million in the prior-year period. A table reconciling EBITDA to net income can be found at the end of this release.
Net income for the three months ended January 31, 2011 was $5.6 million, or $0.69 per share based on a weighted average number of diluted shares outstanding of 8.2 million, compared to a net loss of $2.5 million, or $0.35 per share based on 7.1 million weighted average number of diluted shares, in the prior-year period. The primary reason for the net loss in the prior-year period was significantly higher administrative expenses pertaining to a onetime loss on disposal of fixed assets related to the closure of an older manufacturing plant in December 2009 for approximately $5 million. For the nine months ended January 31, 2011, net income was $16.0 million, or $2.15 per share based on a weighted average number of diluted shares outstanding of 7.4 million, compared to $4.3 million, of $0.61 per share based on 7.1 million weighted average number of diluted shares, in the prior-year period.
Balance Sheet Highlights
As of January 31, 2011, the Company had cash and cash equivalents of $28.3 million; working capital of $22.9 million, total bank borrowings of $24.0 million, and shareholders equity of $94.6 million.