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Form 6-K China Techfaith Wireless For: Aug 24

August 24, 2016 6:13 AM EDT

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 6-K

 

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of August 2016

 

 

Commission File Number: 000-51242

 

 

CHINA TECHFAITH WIRELESS COMMUNICATION TECHNOLOGY LIMITED

 

 

Tower C, No. 5 Rong Chang East Street

Beijing Economic-Technological Development Area (Yi Zhuang)

Beijing 100176

People’s Republic of China

(Address of principal executive office)

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F  x            Form 40-F  ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):  ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):  ¨

 

 

 


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

  CHINA TECHFAITH WIRELESS COMMUNICATION TECHNOLOGY LIMITED
  By:  

 /s/ Yuping Ouyang

  Name:   Yuping Ouyang
  Title:   Chief Financial Officer

Date: August 24, 2016


EXHIBIT INDEX

 

Exhibit No.

  

Description

99.1    Press Release

Exhibit 99.1

 

LOGO

TechFaith Reports First Half 2016 Financial Results

Beijing, China, August 23, 2016 – 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.”

 

Page 1


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.

 

CONTACTS:

  

In China:

Jay Ji

China TechFaith Wireless Communication Technology Limited

Tel: +86-10-5822-8866

[email protected]

  

In the U.S.:

David Pasquale

Global IR Partners

Tel: +1-914-337-8801

[email protected]

 

Page 2


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

 

Page 3


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   
  

 

 

    

 

 

 

 

Page 4



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