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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
estate operating expenses


$2,047

$3,374

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
noncontrolling interest


337

(963)

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


Net loss per share attributable to China
TechFaith Wireless Communication
Technology Limited-Basic and Diluted


$(0.00)

$(0.00)





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


Net loss per ADS attributable to
China TechFaith Wireless Communication
Technology Limited-Basic and Diluted


$(0.11)

$(0.24)





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
noncontrolling interest


(314)

(1,527)

Comprehensive (loss) income attributable to
TechFaith


$(8,278)

$1,804





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,

2017


December 31,
2016





Assets




Current assets:




Cash and cash equivalents

$5,554


$6,363

Restricted cash

-


2,881

Accounts receivable, net of allowances of
$3,637 and $2,184 as of June 30, 2017
and December 31, 2016, respectively

28,643


25,459

Accounts receivable due from a related
party

2,134


2,247

Amount due from a related party

1,081


950

Inventories, net

264


4,646

Prepaid expenses and other current
assets

97,531


40,914

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
liabilities

21,477


22,597

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;
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)

$16


$16

Additional paid-in capital

144,836


144,836

Accumulated other comprehensive
income

19,422


16,159

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

 

 

View original content:http://www.prnewswire.com/news-releases/techfaith-reports-first-half-2017-financial-results-300508325.html

SOURCE China TechFaith Wireless Technology Limited

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


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