CNTF...Nice action today after yesterday's Q1 report. This spec of green on the screen seems to be getting lost in all the red today...
HUGE Cash position. Very low to no LT Debt. Diluted EP(ADS)S = $0.13. And growing...
TechFaith Reports First Quarter 2010 Financial Results
BEIJING--(Marketwire - 05/19/10) - China Techfaith Wireless Communication Technology Limited (NASDAQ:CNTF - News) ("TechFaith" or the "Company") today announced its unaudited financial results for the first quarter ended March 31, 2010.
For the first quarter of 2010, TechFaith reported net revenue of US$60.9 million (RMB 415.8 million), a 1.8% increase compared to US$59.8 million (RMB 408.3 million) in the fourth quarter of 2009 and a 25.1% increase compared to US$48.7 million (RMB 332.9 million) in the same period of last year. Gross margin for the first quarter of 2010 improved to 22.0% compared to 16.1% in the previous quarter and 18.1% in the same quarter last year. Net income attributable to Techfaith for the first quarter of 2010 was US$6.9 million (RMB47.1 million), compared to US$3.1 million (RMB21.2 million) in the fourth quarter of 2009, and US$2.1 million (RMB14.4 million) in the same quarter of last year.
Starting with this quarter, TechFaith will report its financial results in three segments. The original developed products ("ODP") segment, which focuses on selling products designed by the Company, will include revenue from product sales and handset design. The brand name phone sales segment will include revenue from selling phones under licensed brands or brands owned by the Company's subsidiary QIGI&BODEE Technology (Beijing) Co., Ltd. ("QIGI"). The game segment will include revenue from the Company's online and mobile games.
Ouyang Yuping, TechFaith's CFO, said, "We achieved our highest revenues level in this quarter since the Company was founded, and one of the highest net income levels by focusing on higher margin opportunities and cost controls. We increased our overall gross margin from 18.1% for the first quarter of 2009 and 16.1% for the fourth quarter of 2009 to 22.0% in the first quarter of 2010. We also achieved another company record in our ODP business, where we sold more than a half million units of mobile phones and data cards for revenues of US$54.4 million (RMB 371.4 million). The higher selling price of mobile phones helped gross margin improve from 15.5% to 18.7% in our ODP business. We expect continued growth in our ODP business as we are launching several new high-end products in China and overseas. Results also benefited from our acquisition of QIGI, which had revenues of US$5.2 million (RMB35.5 million) and a gross margin of 39.5% in the first quarter of 2010, led by higher margin brand name mobile phone products. We also continued to expand our mobile game and online game business, where we generated a combined US$1.3 million (RMB 8.9million) revenues with a 94.4% gross margin in the first quarter."
Dong Defu, TechFaith's Chairman and CEO, commented, "Overall, our businesses are performing well entering the second quarter. In our ODP business, we have nearly forty mid- to high-end mobile phone models based on HSDPA, EVDO, TD-SCDMA, and GSM technologies ready to launch. We expect further improvements in our ODP business to contribute to improvements in our gross margin. We are also excited about the upcoming launch of two global brands for handsets - Barbie and Disney. We expect to launch both branded mobile phones this summer through our subsidiary Glomate Mobile (Beijing) Co., Ltd., to target girls and teenage users. We continue to evaluate other brands for opportunities in niches ranging from sporting to fashion and luxury. Also central to our continued success is QIGI, already a leading smart phone brand in China, which focuses on enterprise users and the operator tailored market. QIGI plans to promote a series of larger display mobile phones, with features such as Windows Mobile based or Android based operating systems for businesses users based on HASDPA, EVDO, TD-SCDMA, and GSM technologies. For our mobile and online game business, we are on track to launch additional mobile and online gaming titles this year, with the goal of building out our catalog and establishing a larger audience among loyal game players."
Second Quarter 2010 Outlook
TechFaith currently expects revenue to be in the range of US$62 million to US$65 million for the second quarter of 2010, with a gross margin level similar to the first quarter of 2010. This forecast reflects TechFaith's current and preliminary view, which is subject to change. http://finance.yahoo.com/news/TechFaith-Reports-First-iw-3757166798.html?x=0&.v=1
CHINA TECHFAITH WIRELESS COMMUNICATION TECHNOLOGY LIMITED UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In Thousands of U.S. Dollars, except share and per share/ADS data and unless otherwise stated) Three Months Ended March 31 December 31 ------------------------ ----------- 2010 2009 2009Revenues:ODP $ 54,438 $ 48,670 $ 59,273Brand name phone sales 5,211 - -Game 1,257 - 488 ----------- ----------- -----------Total net revenues $ 60,906 $ 48,670 $ 59,761Cost of revenues:ODP $ 44,259 $ 39,856 $ 50,060Brand name phone sales 3,154 - -Game 70 - 64 ----------- ----------- -----------Total cost of revenues $ 47,483 $ 39,856 $ 50,124Gross Profit $ 13,423 $ 8,814 $ 9,637Operating expenses:General and administrative $ 2,947 $ 1,740 $ 2,947Research and development 2,995 3,096 3,199Selling and marketing 1,289 802 828Exchange loss (gain) - 14 (8) ----------- ----------- -----------Total operating expenses $ 7,231 $ 5,652 $ 6,966Government subsidy income 100 5 207Income from operations $ 6,292 $ 3,167 $ 2,878Interest expenses (265) (30) (366)Interest income 184 177 169Other income (expense), net 5 - 171Change in fair value of derivatives embedded in Convertible notes 3,343 - 1,831Change in fair value of put option (33) (18) (27) ----------- ----------- -----------Income before income taxes $ 9,526 $ 3,296 $ 4,656Income tax expenses (1,933) (1,219) (1,215) ----------- ----------- -----------Net income $ 7,593 $ 2,077 $ 3,441Less: net income (loss) attributable to the noncontrolling interest (738) 44 (329) ----------- ----------- -----------Net income attributable to TechFaith $ 6,855 $ 2,121 $ 3,112 =========== =========== ===========Net income attributable to TechFaith per share Basic $ 0.01 $ 0.00 $ 0.00 =========== =========== =========== Diluted $ 0.01 $ 0.00 $ 0.00 =========== =========== ===========Net income attributable to TechFaith per ADS* Basic $ 0.15 $ 0.05 $ 0.07 =========== =========== =========== Diluted $ 0.13 $ 0.05 $ 0.07 =========== =========== ===========Weighted average shares outstanding Basic 685,868,082 650,034,590 650,043,806 =========== =========== =========== Diluted 811,983,427 650,034,590 776,158,621 =========== =========== =========== CHINA TECHFAITH WIRELESS COMMUNICATION TECHNOLOGY LIMITED UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (In Thousands of U.S. Dollars) March 31, March 31, December 31, 2010 2009 2009 --------- --------- ------------AssetsCurrent assets:Cash and cash equivalents $ 162,421 $ 97,499 $ 130,544Restricted cash - 80 -Accounts receivable 17,740 29,812 28,992Notes receivable - 443 -Amounts due from a related party 2,622 7,954 9,941Contingent receivable 196 - -Inventories 24,178 30,367 22,937Prepaid expenses and other current assets 13,470 11,917 12,420Deferred tax assets-current - 78 - --------- --------- ------------Total current assets $ 220,627 $ 178,150 $ 204,834 --------- --------- ------------Plant, machinery and equipment, net $ 20,245 $ 23,255 $ 20,902Construction in progress 23,965 23,521 23,680Acquired intangible assets, net 3,235 838 645Deferred tax assets-noncurrent - 29 -Goodwill 1,848 606 606 --------- --------- ------------Total assets $ 269,920 $ 226,399 $ 250,667 ========= ========= ============Liabilities and equityCurrent liabilities:Current portion of long term payable $ 687 $ 1,211 $ 799Accounts payable 9,952 7,362 10,514Amounts due to related parties 701 438 266Accrued expenses and other current liabilities 10,408 9,597 10,484Advance from customers 5,494 11,839 4,720Deferred revenue 1,031 1,431 755Income tax payable 2,221 1,343 1,162 --------- --------- ------------Total current liabilities $ 30,494 $ 33,221 $ 28,700Convertible notes and embedded derivatives 12,363 - 15,441Deferred tax liability-noncurrent 170 - -Total liabilities $ 43,027 $ 33,221 $ 44,141 --------- --------- ------------EquityPaid in capital $ 14 $ 13 $ 13Additional paid-in capital 126,292 105,847 113,458Accumulated other comprehensive income 23,801 23,711 23,863Statutory reserve 10,993 8,542 10,993Retained earnings 62,721 54,101 55,866 --------- --------- ------------Total Techfaith shareholders' equity $ 223,821 $ 192,214 $ 204,193 --------- --------- ------------Noncontrolling interest $ 3,072 $ 964 $ 2,333 --------- --------- ------------Total equity $ 226,893 $ 193,178 $ 206,526 --------- --------- ------------Total liabilities and equity $ 269,920 $ 226,399 $ 250,667 ========= ========= ============
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