BEIJING, April 12, 2017 /PRNewswire/ -- China TechFaith
Wireless Communication Technology Limited (NASDAQ: CNTF)
("TechFaith" or the "Company") today announced its unaudited
financial results for the second half and the full year ended
December 31, 2016, as well as the
agreement to sell certain of its Beijing real estate assets for RMB 1 billion (approximately US$144 million).
2H and Full Year 2016 Financial Results
For the second half of 2016, TechFaith reported total net
revenues of US$26.5 million compared
to US$34.5 million in the first half
of 2016 and US$15.8 million in the
second half of 2015. Gross profit for the second half of 2016
was US$7.0 million compared to
US$5.5 million in the first half of
2016 and US$1.2 million in second
half of 2015. Gross margin for the second half of 2016 was 26.3%
compared to 15.9% in the first half of 2016 and 7.8% in the second
half of 2015. Operating expenses for the second half of 2016 were
US$10.2 million compared to
US$6.0 million for the first half of
2016 and US$8.5 million in the second
half of 2015. Net income attributed to TechFaith for the second
half of 2016 was US$11.3 million, or
US$1.07 per basic and diluted
weighted average outstanding ADS, compared to a net loss of
US$1.2 million, or US$0.11 per basic and diluted weighted average
outstanding ADS, in the first half of 2016, and a net loss of
US$7.8 million, or US$0.74 per basic and diluted weighted average
outstanding ADS, in the second half of 2015.
For the full year ended December 31,
2016, TechFaith reported total net revenues of US$61.0 million compared to US$63.7 million for the full year ended
December 31, 2015. Gross profit for
the full year 2016 was US$12.5
million, compared to US$5.8
million for the full year 2015. Gross margin for the full
year 2016 was 20.4%, compared to 9.2% for the full year 2015.
Operating expenses for the full year 2016 were US$16.3 million compared to US$17.8 million for the full year 2015. Net
income attributed to TechFaith for full year 2016 was US$10.1 million, or US$0.96 per basic and diluted weighted average
outstanding ADS, compared to a net loss of US$12.8 million, or US$1.21 per basic and diluted weighted average
outstanding ADS, for the full year 2015.
RMB1 Billion Beijing Real
Estate Sale Agreement
Through its wholly owned subsidiary, Infoexcel Technology
Limited ("Infoexcel"), TechFaith has entered into a share transfer
agreement (the "Agreement") with Beijing Hongkungu Investment
Company Limited ("Hongkungu"). Under the Agreement, Infoexcel
will sell its 100% equity interest in Techfaith Intelligent Handset
Technology (Beijing) Limited (the
"Project Company") to Hongkungu for a total consideration of
RMB1 billion (approximately
US$144 million), payable in
installments. The Project Company has also acquired certain land
use rights related to a piece of land in Beijing comprising 139,650 square meters and
is in the process of developing and constructing certain facilities
on such premise. The consummation of the transaction pursuant to
the Agreement is subject to certain customary closing
conditions.
The Company will continue to own and manage its real estate
portfolio consisting of 3 completed buildings in Hangzhou, two completed buildings in
Shenyang and a variety of in
progress construction, which is at various stages.
Miss Ouyang Yuping, TechFaith's
Chief Financial Officer, said, "Our improved profitability directly
reflects our further reduction in operating expenses by nearly 8.5%
in 2016 compared to 2015, while we effectively leveraged our
existing infrastructure and resources in pursuit of growth
opportunities without added overhead costs. Actions we previously
took to streamline our mobile business and shift resources to
R&D, sales and customer support areas also helped us win
attractive enterprise opportunities that carry higher profitability
levels. At the same time, we closed the sale of three floors in one
of our Beijing buildings and
announced the agreement today with Hongkungu for the sale of our
Beijing real estate projects. As a
result of the Agreement, assets covered by the Agreement have been
classified as assets held for sale, and its operating results are
presented as net income from discontinued operations in our
consolidated financial statements."
Mr. Deyou Dong, Chief Executive
Officer of TechFaith, said, "We achieved a dramatic turnaround in
our financial results underscoring the success of our continued
execution on our business diversification. The powerful leverage of
our strategic model is evidenced in our net income of US$0.96 per ADS, which we achieved for the full
year 2016, with net income of US$1.07
per ADS coming in the second half of 2016. Our focus remains
on driving operating costs lower, while evaluating and reallocating
investments to support the business areas that will lead our
success and profitability. Our mobile phone business continues
to both stabilize and evolve as we navigate the highly competitive
markets we operate in. By concentrating on areas where we have
a competitive advantage based on our strong R&D and design
history, track record of developing reliable tailored solutions
that leverage the latest technologies, and our supply chain
relationships, we are winning attractive customer orders in the
enterprise segment of the mobile phone business."
Mr. Deyou Dong continued, "The
Agreement announced today is a milestone achievement for the
Company and our shareholders. This Agreement will deliver immediate
and highly attractive cash inflow from our investment, while
eliminating the routine risks associated with ongoing development
and market cycles. The proceeds will be received as a series
of installments, which will strengthen our balance sheet and
provide the capital to support targeted growth initiatives for our
existing business lines and the exploration of other opportunities.
While we expect the macro environment to remain challenging in
2017, we are optimistic and well positioned for profitability at
current revenue levels based on actions we took to lower operating
costs and make our core business healthier."
Investor Conference Call / Webcast Details
TechFaith will hold a conference call on Wednesday, April 12, 2017 at 8:00 a.m. U.S. Eastern Time (8:00 p.m. Wednesday, April 12, 2017 in
Beijing) using the following
dial-in numbers: +866-519-4004 or +1-845-675-0437. The conference
call passcode is 1775219. 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 1775219. 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
|
|
Six Months
Ended
|
|
Twelve Months
Ended
|
|
June
30
|
|
December
31
|
|
December
31
|
|
|
2016
|
|
2016
|
2015
|
|
2016
|
2015
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
Mobile phone
business
|
|
|
|
|
|
|
|
|
Third
parties
|
$29,165
|
|
$24,817
|
$11,790
|
|
$53,982
|
$57,999
|
|
Related
party
|
3,536
|
|
113
|
2,195
|
|
3,649
|
2,195
|
|
Real
estate
|
1,796
|
|
1,531
|
1,840
|
|
3,327
|
3,474
|
|
Total net
revenues
|
$34,497
|
|
$26,461
|
$15,825
|
|
$60,958
|
$63,668
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenues:
|
|
|
|
|
|
|
|
|
Mobile phone
business
|
|
|
|
|
|
|
|
|
Third
parties
|
$25,145
|
|
$18,856
|
$11,847
|
|
$44,001
|
$54,635
|
|
Related
party
|
3,313
|
|
104
|
2,167
|
|
3,417
|
2,167
|
|
Real
estate
|
552
|
|
536
|
569
|
|
1,088
|
1,022
|
|
Total cost of
revenues
|
$29,010
|
|
$19,496
|
$14,583
|
|
$48,506
|
$57,824
|
|
|
|
|
|
|
|
|
|
|
Gross
Profit
|
$5,487
|
|
$6,965
|
$1,242
|
|
$12,452
|
$5,844
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
General and
administrative, including real
estate operating expenses
|
$2,344
|
|
$3,058
|
$3,821
|
|
$5,402
|
$8,366
|
|
Research and
development
|
3,303
|
|
3,298
|
4,164
|
|
6,601
|
8,084
|
|
Selling and
marketing
|
398
|
|
3,861
|
536
|
|
4,259
|
1,331
|
|
Total operating
expenses
|
$6,045
|
|
$10,217
|
$8,521
|
|
$16,262
|
$17,781
|
|
|
|
|
|
|
|
|
|
|
Government subsidy
income
|
93
|
|
(73)
|
127
|
|
20
|
162
|
|
Other operating
income
|
-
|
|
-
|
(143)
|
|
-
|
(132)
|
|
Other operating
income-net gain from sale
of real estate
|
-
|
|
14,939
|
-
|
|
14,939
|
-
|
|
|
|
|
|
|
|
|
|
|
(Loss) income from
operations
|
$ (465)
|
|
$11,614
|
$(7,295)
|
|
$11,149
|
$(11,907)
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
(604)
|
|
(706)
|
(617)
|
|
(1,310)
|
(1,102)
|
|
Interest
income
|
22
|
|
43
|
105
|
|
65
|
412
|
|
Other
income
|
-
|
|
84
|
112
|
|
84
|
110
|
|
Change in fair value
of put option
|
(90)
|
|
(120)
|
(120)
|
|
(210)
|
(210)
|
|
(Loss) income before
income taxes
|
$(1,137)
|
|
$10,915
|
$(7,815)
|
|
$9,778
|
$(12,697)
|
|
Income tax
expenses
|
-
|
|
-
|
(691)
|
|
-
|
(996)
|
|
Net (loss) income
from continuing
operations
|
$(1,137)
|
|
$10,915
|
$(8,506)
|
|
$9,778
|
$(13,693)
|
|
|
|
|
|
|
|
|
|
|
Net income from
discontinued operations
|
$275
|
|
$106
|
$318
|
|
$381
|
$596
|
|
|
|
|
|
|
|
|
|
|
Net (loss)
income
|
$(862)
|
|
$11,021
|
$(8,188)
|
|
$10,159
|
$(13,097)
|
|
Less: net income
(loss) attributable to the
noncontrolling interest
|
337
|
|
(310)
|
(363)
|
|
27
|
(292)
|
|
Net (loss) income
attributable to TechFaith
|
$(1,199)
|
|
$11,331
|
$(7,825)
|
|
$10,132
|
$(12,805)
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income per
share attributable to
China Techfaith Wireless Communication
Technology Limited-Basic and Diluted:
|
|
|
|
|
|
|
|
|
Continuing
operations
|
$(0.00)
|
|
$0.01
|
$(0.01)
|
|
$0.01
|
$(0.02)
|
|
Discontinuing
operation
|
$0.00
|
|
$0.00
|
$0.00
|
|
$0.00
|
$0.00
|
|
Net (loss) income per
share attributable to
China Techfaith Wireless Communication
Technology Limited-Basic and Diluted
|
$(0.00)
|
|
$0.01
|
$(0.01)
|
|
$0.01
|
$(0.02)
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income per
ADS attributable to
China Techfaith Wireless Communication
Technology Limited-Basic and Diluted:
*
|
|
|
|
|
|
|
|
|
Continuing
operations
|
$(0.14)
|
|
$1.06
|
$(0.77)
|
|
$0.92
|
$(1.27)
|
|
Discontinuing
operation
|
$0.03
|
|
$0.01
|
$0.03
|
|
$0.04
|
$0.06
|
|
Net (loss) income per
ADS attributable to
China Techfaith Wireless Communication
Technology Limited-Basic and Diluted
|
$(0.11)
|
|
$1.07
|
$(0.74)
|
|
$0.96
|
$(1.21)
|
|
|
|
|
|
|
|
|
|
|
Net (loss)
income
|
$(862)
|
|
$11,021
|
$(8,188)
|
|
$10,159
|
$(13,097)
|
|
Other comprehensive
income (loss), net of
tax
|
|
|
|
|
|
|
|
|
Foreign currency
translation adjustment
|
(7,730)
|
|
(13,404)
|
(13,611)
|
|
(21,134)
|
(13,695)
|
|
Comprehensive
loss
|
(8,592)
|
|
(2,383)
|
(21,799)
|
|
(10,975)
|
(26,792)
|
|
|
|
|
|
|
|
|
|
|
Less: Comprehensive
loss attributable to
noncontrolling interest
|
(314)
|
|
(1,374)
|
(1,583)
|
|
(1,688)
|
(1,497)
|
|
Comprehensive (loss)
income attributable
to TechFaith
|
$(8,278)
|
|
$(1,009)
|
$(20,216)
|
|
$(9,287)
|
$(25,295)
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares
outstanding
|
|
|
|
|
|
|
|
|
Basic
|
794,003,193
|
|
794,003,193
|
794,003,193
|
|
794,003,193
|
794,003,193
|
|
Diluted
|
794,003,193
|
|
794,003,193
|
794,003,193
|
|
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)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
2016
|
|
June 30,
2016
|
|
December 31,
2015
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$6,363
|
|
$7,692
|
|
$514
|
|
Restricted
cash
|
2,881
|
|
16,783
|
|
-
|
|
Accounts receivable,
net of allowances of
$2,184, $934 and $1,043 as of December
31, 2016, June 30, 2016 and December
31, 2015, respectively
|
25,459
|
|
33,457
|
|
21,864
|
|
Accounts receivable
due from a related
party
|
2,247
|
|
2,536
|
|
821
|
|
Amount due from a
related party
|
950
|
|
38
|
|
66
|
|
Inventories,
net
|
4,646
|
|
4,083
|
|
3,108
|
|
Prepaid expenses and
other current
assets
|
40,948
|
|
19,682
|
|
31,397
|
|
Assets held for
sale
|
3,352
|
|
11,628
|
|
11,445
|
|
Total current
assets
|
$86,846
|
|
$95,899
|
|
$69,215
|
|
|
|
|
|
|
|
|
Property, plant and
equipment, net
|
$49,145
|
|
$52,722
|
|
$55,848
|
|
Construction in
progress
|
69,792
|
|
40,254
|
|
36,389
|
|
Land use rights,
net
|
1,966
|
|
2,052
|
|
2,129
|
|
Acquired intangible
assets, net
|
3,785
|
|
6,011
|
|
8,157
|
|
Other non-current
assets
|
19,126
|
|
52,693
|
|
57,380
|
|
Other assets held for
sale
|
152,904
|
|
158,520
|
|
160,850
|
|
Total
assets
|
$383,564
|
|
$408,151
|
|
$389,968
|
|
|
|
|
|
|
|
|
Liabilities and
equity
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts
payable
|
6,120
|
|
8,840
|
|
9,433
|
|
Notes
payable
|
5,761
|
|
13,542
|
|
-
|
|
Short-term
loans
|
7,850
|
|
18,681
|
|
21,402
|
|
Accrued expenses and
other current
liabilities
|
22,597
|
|
35,079
|
|
30,346
|
|
Advance from
customers
|
10,136
|
|
11,360
|
|
9,028
|
|
Deferred
revenue
|
5,138
|
|
5,166
|
|
7,394
|
|
Income tax
payable
|
896
|
|
933
|
|
1,065
|
|
Put option
liability
|
2,460
|
|
2,340
|
|
2,250
|
|
Liabilities held for
sale
|
27,644
|
|
14,315
|
|
14,656
|
|
Total current
liabilities
|
$88,602
|
|
$110,256
|
|
$95,574
|
|
|
|
|
|
|
|
|
Long-term
loans
|
12,605
|
|
13,155
|
|
1,062
|
|
|
|
|
|
|
|
|
Total
liabilities
|
$101,207
|
|
$123,411
|
|
$96,636
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
Ordinary shares
($0.00002 par value;
50,000,000,000,000 shares authorized;
794,003,193, 794,003,193 and
794,003,193 shares issued and
outstanding as of December 31, 2016,
June 30, 2016 and December 31, 2015,
respectively)
|
$16
|
|
$16
|
|
$16
|
|
Additional paid-in
capital
|
144,836
|
|
144,836
|
|
144,836
|
|
Accumulated other
comprehensive income
|
16,159
|
|
28,499
|
|
35,578
|
|
Statutory
reserves
|
22,258
|
|
22,258
|
|
22,258
|
|
Retained
earnings
|
75,777
|
|
64,446
|
|
65,645
|
|
Total Techfaith
shareholders' equity
|
$259,046
|
|
$260,055
|
|
$268,333
|
|
Noncontrolling
interest
|
$23,311
|
|
$24,685
|
|
$24,999
|
|
Total
equity
|
$282,357
|
|
$284,740
|
|
$293,332
|
|
Total liabilities
and equity
|
$383,564
|
|
$408,151
|
|
$389,968
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/techfaith-reports-its-unaudited-2h-and-full-year-2016-financial-results-and-the-sale-of-certain-beijing-real-estate-assets-300438599.html
SOURCE China TechFaith Wireless Technology Limited