TechFaith Reports First Half 2017 Financial Results
BEIJING, Aug. 23, 2017 /PRNewswire/ -- China TechFaith Wireless Communication Technology Limited (NASDAQ: CNTF) ("TechFaith" or the "Company") today announced its unaudited condensed financial results for the first half period ended June 30, 2017.
For the first half of 2017, TechFaith reported total net revenues of US$24.6 million compared to US$34.5 million in the same period of last year. Gross profit for the first half of 2017 was US$4.5 million compared to US$5.5 million in the same period of last year. Gross margin for the first half of 2017 was 18.1% compared to 15.9% in the same period of last year.
Operating expenses for the first half of 2017 were US$9.4 million compared to US$5.7 million in the same period of last year. The first half of 2017 includes a charge of US$1.8 million for the write-off of impairment of acquired intangible assets. Net loss attributed to TechFaith for the first half of 2017 was US$2.6 million, or US$0.24 per basic and diluted weighted average outstanding ADS, compared to net loss of US$1.2 million, or US$0.11 per basic and diluted weighted average outstanding ADS, in the same period of last year.
Miss Ouyang Yuping, TechFaith's Chief Financial Officer, said, "We were able to maintain revenue in our mobile phone business at a healthy level but our efforts were impacted by softness in the overall China handset market. Separately, we expect to further strengthen our balance sheet over the coming quarters as we execute on our business strategy and deliver a greater return to our shareholders. Earlier this year we announced the share transfer agreement to sell our Beijing real estate portfolio for a total consideration of RMB1 billion (approximately US$144 million). We have already received approximately RMB 400 million of the proceeds as of Jun 30, 2017 and expect to receive approximately RMB 400 million by the end of the third quarter 2017, with the balance of RMB 200 million to be received upon final construction and transfer of relevant ownership certificates."
Mr. Deyou Dong, Chief Executive Officer of TechFaith, said, "We continue to build upon our positive operating position, with a stabilized gross margin and lower cost structure. We are also pleased with the ongoing successful development of our real estate business, led by the announced agreement to sell our Beijing real estate portfolio. We continue to execute on the buildout of our other real estate assets in Hangzhou and Shenyang, which we expect to serve as additional catalysts for our revenue and profit growth, and our success will allow us to build greater value for our shareholders. We believe our actions will benefit our long term business growth based on China's real estate market, help to further improve our cash flow, and reduce potential operational challenges. Overall, we will continue to focus on delivering an improved return on investment to the company and our shareholders, as we optimize our existing resources and infrastructure, and work to keep operating expenses under tight control to avoid any unnecessary risks and costs."
Investor Conference Call / Webcast Details
TechFaith will hold a conference call on Wednesday, August 23, 2017 at 8:00 a.m. U.S. Eastern Time (8:00 p.m. Wednesday, August 23, 2017 in Beijing) using the following dial-in numbers: +1-866-519-4004 or +1-845-675-0437. The conference call passcode is 66054251. A live webcast of the conference call will also be available on TechFaith's website at www.techfaithwireless.com.
A replay of the call will be available approximately 2 hours after the conclusion of the live call by telephone at +1-646-254-3697, with passcode 66054251. A webcast replay will also be available at www.techfaithwireless.com.
About TechFaith
TechFaith (NASDAQ: CNTF) is a developer, owner and operator of commercial real estate properties across China as well as a China-based mobile solutions provider for the global mobile handsets market. TechFaith continues to maintain a team of professional engineers focused on the development of ruggedized smart devices for both its consumer and enterprise segments, although it started investing in the construction of buildings and facilities in 2009 as part of its growth and business diversification strategy, gradually shifting away from its traditional focus on the mobile solutions and handset markets. The Company currently focuses on developing office space that can serve as anchor bases in areas with developing economies, as it meets the needs of both established businesses and innovative start-up companies in China. For more information, please visit www.techfaithwireless.com.
Safe Harbor Statement
This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "confident," "outlook" and similar statements. Among other things, the business outlook and strategic and operational plans of TechFaith and management quotations contain forward-looking statements. TechFaith may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission on Forms 20-F and 6-K, among others, and in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about TechFaith's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Potential risks and uncertainties include, but are not limited to, those risks outlined in TechFaith's filings with the U.S. Securities and Exchange Commission, including its annual report on Form 20-F. TechFaith does not undertake any obligation to update any forward-looking statement, except as required under applicable law.
CHINA TECHFAITH WIRELESS COMMUNICATION TECHNOLOGY LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(In Thousands of U.S. Dollars, except share and per share/ADS data)
Six Months Ended
June 30
-------
2016 2017
Revenues:
Mobile phone business
Third parties $29,165 $23,249
Related party 3,536 190
Real estate 1,796 1,165
----- -----
Total net revenues $34,497 $24,604
------- -------
Cost of revenues:
Mobile phone business
Third parties $25,145 $19,478
Related party 3,313 149
Real estate 552 527
Total cost of revenues $29,010 $20,154
------- -------
Gross Profit $5,487 $4,450
Operating expenses:
General and administrative, including real $2,047 $3,374
estate operating expenses
Research and development 3,303 3,665
Selling and marketing 398 649
Impairment of long-lived assets - 1,750
--- -----
Total operating expenses $5,748 $9,438
Government subsidy income 93 -
--- ---
Loss from operations $(168) $(4,988)
Interest expense (901) (606)
Interest income 22 23
Other expenses, net - (16)
Change in fair value of put option (90) (1,800)
--- ------
Loss before income taxes $(1,137) $(7,387)
Income tax expenses - -
--- ---
Net loss from continuing operations $(1,137) $(7,387)
Net income from operations disposed $275 $3,837
Net loss $(862) $(3,550)
Less: net income (loss) attributable to the 337 (963)
noncontrolling interest
Net loss attributable to TechFaith $(1,199) $(2,587)
======= =======
Net (loss) income per share attributable to
China TechFaith Wireless Communication
Technology Limited-Basic and Diluted:
Continuing operations $(0.00) $(0.01)
====== ======
Operations disposed $0.00 $0.01
===== =====
$(0.00) $(0.00)
Net loss per share attributable to China
TechFaith Wireless Communication
Technology Limited-Basic and Diluted
Net (loss) income per ADS attributable to
China TechFaith Wireless Communication
Technology Limited-Basic and Diluted:
*
Continuing operations $(0.14) $(0.60)
====== ======
Discontinuing operations $0.03 $0.36
===== =====
$(0.11) $(0.24)
Net loss per ADS attributable to
China TechFaith Wireless Communication
Technology Limited-Basic and Diluted
Net loss $(862) $(3,550)
Other comprehensive income (loss), net of
tax
Foreign currency translation adjustment (7,730) 3,827
------ -----
Comprehensive (loss) income (8,592) 277
Less: Comprehensive loss attributable to (314) (1,527)
noncontrolling interest
Comprehensive (loss) income attributable to $(8,278) $1,804
TechFaith
Weighted average shares
outstanding
Basic 794,003,193 794,003,193
=========== ===========
Diluted 794,003,193 794,003,193
=========== ===========
*Giving retroactive effect to the 1-for-5 reverse ADS split effected on March 1,2016
CHINA TECHFAITH WIRELESS COMMUNICATION TECHNOLOGY LIMITED
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands of U.S. Dollars)
June 30, December 31,
2016
2017
----
Assets
Current assets:
Cash and cash equivalents $5,554 $6,363
Restricted cash - 2,881
Accounts receivable, net of allowances of 28,643 25,459
$3,637 and $2,184 as of June 30, 2017
and December 31, 2016, respectively
Accounts receivable due from a related 2,134 2,247
party
Amount due from a related party 1,081 950
Inventories, net 264 4,646
Prepaid expenses and other current 97,531 40,914
assets
Assets held for sale - 3,352
--- -----
Total current assets $135,207 $86,812
-------- -------
Property, plant and equipment, net $48,412 $49,145
Construction in progress 96,620 69,792
Land use rights, net 1,987 1,966
Acquired intangible assets, net 1,089 3,785
Other non-current assets 28,988 19,126
Other long-term receivable 29,502 -
Other assets held for sale - 152,904
--- -------
Total assets $341,805 $383,530
======== ========
Liabilities and equity
Current liabilities:
Accounts payable 4,221 6,120
Notes payable - 5,761
Short-term loans 4,345 7,816
Accrued expenses and other current 21,477 22,597
liabilities
Advance from customers 7,984 10,136
Deferred revenue 3,803 5,138
Income tax payable 916 896
Put option liability 4,260 2,460
Liabilities held for sale - 27,644
--- ------
Total current liabilities $47,006 $88,568
Long-term loans 12,165 12,605
------ ------
Total liabilities $59,171 $101,173
------- --------
Equity
Ordinary shares ($0.00002 par value; $16 $16
50,000,000,000,000 shares authorized;
794,003,193 and 794,003,193 shares
issued and outstanding as of June 30,
2017 and December 31, 2016,
respectively)
Additional paid-in capital 144,836 144,836
Accumulated other comprehensive 19,422 16,159
income
Statutory reserves 21,567 22,258
Retained earnings 73,881 75,777
------ ------
Total TechFaith shareholders' equity $259,722 $259,046
-------- --------
Noncontrolling interest $22,912 $23,311
------- -------
Total equity $282,634 $282,357
-------- --------
Total liabilities and equity $341,805 $383,530
======== ========
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SOURCE China TechFaith Wireless Technology Limited
