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TechFaith Reports First Half 2016 Financial Results

BEIJING, Aug. 23, 2016 /PRNewswire/ -- China TechFaith Wireless Communication Technology Limited (NASDAQ: CNTF) ("TechFaith" or the "Company") today announced its unaudited financial results for the first six months ended June 30, 2016.

For the first half of 2016, TechFaith reported total net revenues of US$35.0 million compared to US$16.3 million in the six months ended December 31, 2015 and US$48.3 million in the same period of last year.  Gross profit for the first half of 2016 was US$5.9 million compared to US$1.7 million in the six months ended December 31, 2015 and US$5.0 million in the same period of last year. Gross margin for the first half of 2016 was 16.9% compared to 10.3% in the six months ended December 31, 2015 and 10.4% in the same period of last year. The improvement in gross margin in the first half of 2016 primarily reflects the positive impact of the completion of various non-recurring engineering projects and higher-end handset sales. 

Operating expenses for the first half of 2016 were US$6.2 million compared to US$8.6 million for the six months ended December 31, 2015 and US$9.4 million in the same period of last year. Net loss attributed to TechFaith for the first half of 2016 was US$1.2 million, or a loss of US$0.11 per basic and diluted weighted average outstanding ADS, compared to a net loss of US$7.8 million, or a loss of US$0.74 per basic and diluted weighted average outstanding ADS, in the six months ended December 31, 2015, and a net loss of US$5.0 million, or a loss of US$0.47 per basic and diluted weighted average outstanding ADS, in the same period of last year.  

As of June 30, 2016, the Company had a balance of non-mobile related real estate, fixed assets, construction in progress and advances of US$303.1 million (or RMB 2,014.6 million), as compared to US$308.3 million (or RMB 1,996.8 million) as of December 31, 2015.

Miss Ouyang Yuping, TechFaith's Chief Financial Officer, said, "Our focus in the first half of 2016 has remained on restoring higher operating efficiency at our current revenue level.  We are pleased with our progress and are targeting further improvements in profitability.  We were able to reduce operating expenses by 34.3%, as compared to the first half of 2015, led by reductions in our professional service expenses and other non-revenue generating areas of our business. Our results also benefitted from the contribution of our real estate business.  Overall, we ended the first half of 2016 with a net book value of approximately US$26.9 per ADS as of June 30, 2016 versus US$27.7 per ADS as of December 31, 2015."

Mr. Deyou Dong, Chief Executive Officer of TechFaith, said, "We achieved better performance in our revenue growth and profitability in the first half of 2016, while executing on our longer-term business strategy.  We are focused on extracting additional operating expenses out of our business, and have moved away from less profitable business areas that negatively impacted our profitability in prior periods. As a result, we are now able to direct our resources and energies to the promising, higher return areas of our business, mainly mobile handsets sales and our expanding real estate business.  We believe we have moved beyond the low point in revenue and expect to benefit from our ability to provide customers tailor made solutions, where we are more competitive and able to secure orders in the enterprise segment of the mobile phone business. We are also optimistic about the ongoing development of our real estate business, with a highly attractive commercial portfolio that we can lease or hold to capture ongoing value appreciation. Overall, we are pursuing more growth opportunities for the mobile phone business and our expanding real estate business, while optimizing our existing resources and infrastructure, and keeping tight control over all operating expenses to avoid any unnecessary overhead costs."

Investor Conference Call / Webcast Details

TechFaith will hold a conference call on Tuesday, August 23, 2016 at 8:00 a.m. U.S. Eastern Time (8:00 p.m. Tuesday, August 23, 2016 in Beijing) using the following dial-in numbers: +1-866-519-4004 or +1-845-675-0437. The conference call passcode is 63642569. 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 63642569. 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

2015





Revenues:




Mobile phone business




  Third parties


29,165

46,209

  Related party


3,536

-

Real estate


2,251

2,107

Total net revenues


$34,952

$48,316





Cost of revenues:




Mobile phone business




  Third parties


25,145

42,788

  Related party


3,313

-

Real estate


588

490

Total cost of revenues


$29,046

$43,278





Gross Profit


$5,906

$5,038





Operating expenses:




General and administrative, including real estate operating expenses


$2,488

$4,703

Research and development


3,303

3,920

Selling and marketing


398

795

Total operating expenses


$6,189

$9,418





Government subsidy income


93

35

Other operating income


-

11





Loss from operations


$(190)

$(4,334)





Interest expense


(604)

(485)

Interest income


22

307

Other expense


-

(2)

Change in fair value of put option


(90)

(90)

Loss before income taxes


$(862)

$(4,604)

Income tax expenses


-

(305)

Net loss


$(862)

$(4,909)

Less: net income attributable to the noncontrolling interest


337

71

Net loss attributable to TechFaith


$(1,199)

$(4,980)





Net loss attributable to TechFaith per share




  Basic


$(0.00)

$(0.01)

  Diluted


$(0.00)

$(0.01)





Net loss attribute to TechFaith per ADS*




  Basic


$(0.11)

$(0.47)

  Diluted


$(0.11)

$(0.47)





Net loss


$(862)

$(4,909)

Other comprehensive income (loss), net of tax




Foreign currency translation adjustment


(7,730)

(85)

Comprehensive loss


(8,592)

(4,994)





Less: Comprehensive income (loss) attributable to noncontrolling interest


(314)

86

Comprehensive loss attributable to TechFaith


$(8,278)

$(5,080)





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 30,2016


December 31, 2015





Assets




Current assets:




Cash and cash equivalents

$7,692


$514

Restricted cash

16,783


-

Accounts receivable, net of allowances of $934 and $1,043
as of June 30, 2016  and December 31, 2015, respectively

33,930


21,864

Accounts receivable due from a related party

2,536


821

Amount due from a related party

38


66

Inventories, net

4,083


3,108

Prepaid expenses and other current assets

19,682


31,397

Assets held for sale

11,155


11,445

Total current assets

$95,899


$69,215





Property, plant and equipment, net,

$55,400


$58,631

Construction in progress

148,529


147,302

Land use rights, net

9,257


9,603

Acquired intangible assets, net

6,011


8,157

Other non-current assets

93,055


97,060

Total assets

$408,151


$389,968





Liabilities and equity




Current liabilities:








Accounts payable

8,840


9,433

Notes payable

13,542


-

Short-term loans

18,681


21,402

Accrued expenses and other current liabilities

49,394


45,002

Advance from customers

11,360


9,028

Deferred revenue

5,166


7,394

Income tax payable

933


1,065

Put option liability

2,340


2,250

Total current liabilities

$110,256


$95,574





Long-term loans

13,155


1,062





Total liabilities

$123,411


$96,636





Equity




Ordinary shares ($0.00002 par value; 50,000,000,000,000
shares authorized; 794,003,193 and 794,003,193 shares
issued and outstanding as of June 30, 2016  and December
31, 2015, respectively)

$16


$16

Additional paid-in capital

144,836


144,836

Accumulated other comprehensive income

28,499


35,578

Statutory reserves

22,258


22,258

Retained earnings

64,446


65,645

Total Techfaith shareholders' equity

$260,055


$268,333

Noncontrolling interest

$24,685


$24,999

Total equity

$284,740


$293,332

Total liabilities and equity

$408,151


$389,968





 

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/techfaith-reports-first-half-2016-financial-results-300316932.html

SOURCE China TechFaith Wireless Technology Limited

In China: Jay Ji, China TechFaith Wireless Communication Technology Limited, +86-10-5822-8866, ir@techfaith.cn; In the U.S.: David Pasquale, Global IR Partners, +1-914-337-8801, cntf@globalirpartners.com


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