Form 6-K China Techfaith Wireless For: Nov 25

 

 

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 November 2015

 

 

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.

 

Date: November 25, 2015

---

EXHIBIT INDEX

 

Exhibit No.		Description
99.1		Press Release

Exhibit 99.1

 

 

TechFaith Reports 3Q15 Financial Results; Appoints New Director to Board

Beijing, China, November 25, 2015 - China TechFaith Wireless Communication Technology Limited (NASDAQ: CNTF) (“TechFaith” or the “Company”) today announced its unaudited condensed consolidated financial results for the quarter ended September 30, 2015. The Company also announced the appointment of Mr. Hongwei Zhao to the Company’s Board of Directors, effective immediately. Mr. Zhao replaces Mr. Tom Zhang as an independent director of the Company.

Third Quarter 2015 Financial Highlights

For the third quarter of 2015, TechFaith reported total net revenues of US$7.6 million compared to US$23.6 million in the second quarter of 2015 and US$22.1 million in the third quarter of 2014. The Company incurred a US$2.35 million inventory obsolescence charge in the third quarter of 2015 in relation to the Company’s mobile handset business, which negatively impacted its gross margin and net income. As a result, gross margin for the third quarter of 2015 was negative 6.7% compared to 11.9% in the second quarter of 2015 and 7.7% in the third quarter of 2014. Net loss attributed to TechFaith for the third quarter of 2015 was US$5.4 million, or US$0.10 per basic and diluted weighted average outstanding American Depositary Share (ADS), compared to a net loss of US$1.8 million, or US$0.03 per basic and diluted weighted average outstanding ADS, in the second quarter of 2015 and a net loss of US$4.6 million, or US$0.09 per basic and diluted weighted average outstanding ADS, in the third quarter of 2014.

Miss Ouyang Yuping, TechFaith Chief Financial Officer, said: “The third quarter of 2015 developed as expected with revenues in line with our guidance. Rental income for the third quarter of 2015 was US$1.2 million, representing 15.2% of total revenue, as compared to US$1.3 million or 5.7% of total revenue in the second quarter of 2015. We expect rental income to continue to increase in the coming year as additional space becomes available to lease. The inventory obsolescence charge in the third quarter was a result of our ongoing evaluation of business options and operating costs for our low margin mobile handset business. We reviewed our existing inventory this past quarter and wrote off certain components and devices deemed obsolete in today’s market, as required under generally accepted accounting practices.”

Mr. Deyou Dong, Chief Executive Officer of TechFaith, said, “We remain very confident in our long-term prospects due to our significant progress in our real estate business in Beijing and Hangzhou, where commercial properties continue to perform well. We are moving more exclusively in the direction of developing industrial real estate due to the compelling financial opportunities. We have made considerable progress in the rental of our Hangzhou and Shenyang Technology Parks, which, as we previously announced, are at 95% and full occupancy rates, respectively. This healthy lease activity increases the confidence we have in our Beijing Xi-Hong Men Technology Park and our broader real estate business. We are also looking at other ways we can leverage our real estate properties as a platform for growth in other areas, such as potentially hosting an incubator for start-up technology companies within our premises. We intend to proceed cautiously on any such new venture and target to carefully limit our risk exposure in any such potential investment.”

---

During the nine months ended September 30, 2015, the Company invested US$146.8 million in its real estate projects. At September 30, 2015, the Company had a balance of non-mobile related real estate, fixed assets, construction in progress and advances of US$308.7 million included in plant, property and equipment and other non-current assets, as noted within the attached unaudited condensed consolidated balance sheet.

Appointment of Mr. Hongwei Zhao to Board of Directors

The Company also announced the appointment of Mr. Hongwei Zhao to the Company’s Board of Directors, effective immediately. Mr. Zhao replaces Mr. Tom Zhang as an independent director, a position which Mr. Zhang has held since 2006 and resigned as of the date hereof. Mr. Zhao will also serve as a member of the Compensation Committee and Corporate Governance and Nominating Committee of the Company’s Board of Directors.

Mr. Zhao brings 18 years of management expertise with a strong background in establishing entrepreneurial business incubator services in China and also has in-depth experience in attracting tenants to commercial properties based on different industries. He currently serves as Chairman of the Beijing Zhongguancun International Incubator Park, a leading platform for many successful technology startups in Beijing. Mr. Zhao holds a Master’s Degree in Economics and Management from Capital University of Business and Economics in China.

“We appreciate the many contributions Mr. Zhang has made to TechFaith and its Board since 2006 and wish him well,” said Mr. Defu Dong, Chairman of TechFaith. “Our business has changed dramatically from its initial focus as an outsourced mobile phone design house into one focused on the more stable, profitable commercial real estate market. We are pleased that Mr. Zhao has agreed to join our Board at this important juncture in the Company’s evolution. His direct experience in developing commercial real estate is closely aligned with our management’s current strategic focus and TechFaith’s expected future growth drivers. Mr. Zhao’s background and perspective will make him a valued resource to the Company as we work to accelerate development of our company’s real estate pipeline and as TechFaith monetizes available but unoccupied properties.”

Fourth Quarter of 2015 Outlook

TechFaith currently expects its total net revenues for the fourth quarter of 2015 to be in the range of US$6.0 million to US$8.0 million. This forecast represents TechFaith’s current and preliminary view, which is subject to change.

Investor Conference Call / Webcast Details

TechFaith will hold a conference call on Wednesday, November 25, 2015 at 8:00 a.m. U.S. Eastern Time (9:00 p.m., Wednesday, November 25, 2015 in Beijing) using the following dial-in numbers: +1-866-519-4004 or +1-845-675-0437. The conference call passcode is: 83661202. 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, using the following passcode: 83661202. 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]

---

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)

 

		Three Months Ended				Three Months Ended								Nine Months Ended
		June 30				September 30								September 30
		2015				2015				2014				2015				2014
Revenues:
ODP
Third parties		$	19,041			$	5,364			$	15,349				43,692			$	57,435
Related party			—				486				—				486				—
Brand name phone sales
Third parties			3,225				26				6,117				7,907				13,292
Related party			—				558				—				558				—
Real estate			1,341				1,152				618				3,259				1,836
Total net revenues		$	23,607			$	7,586			$	22,084			$	55,902			$	72,563
Cost of revenues:
ODP
Third parties		$	17,046			$	6,464			$	13,907				41,304			$	52,513
Related party			—				559				—				559				—
Brand name phone sales
Third parties			3,476				208				6,266				8,156				12,969
Related party			—				556				—				556				—
Real estate			278				305				217				795				690
Total cost of revenues		$	20,800			$	8,092			$	20,390			$	51,370			$	66,172
Gross Profit (loss)		$	2,807			($	506	)		$	1,694			$	4,532			$	6,391
Operating expenses:
General and administrative, including real estate operating expenses		$	1,754			$	2,202			$	1,472			$	6,905			$	5,019
Research and development			2,110				2,259				2,281				6,179				5,547
Selling and marketing			399				286				2,244				1,081				6,942
Total operating expenses		$	4,263			$	4,747			$	5,997			$	14,165			$	17,508
Government subsidy income			34				—				4				35				95
Other operating income			11				16				22				27				22
Loss from operations		$	(1,411	)		$	(5,237	)		$	(4,277	)		$	(9,571	)		$	(11,000	)
Interest expense			(268	)			(181	)			(145	)			(666	)			(396	)
Interest income			146				9				425				316				1,302
Other expense			(2	)			(61	)			—				(63	)			2
Change in fair value of put option			(60	)			(30	)			(60	)			(120	)			(150	)
Loss before income taxes		$	(1,595	)		$	(5,500	)		$	(4,057	)		$	(10,104	)		$	(10,242	)
Income tax expenses			(305	)			—				(22	)			(305	)			(142	)
Net loss		$	(1,900	)		$	(5,500	)		$	(4,079	)		$	(10,409	)		$	(10,384	)
Less: net income (loss) attributable to the non-controlling interest			(69	)			(123	)			510				(52	)			(817	)
Net loss attributable to TechFaith		$	(1,831	)		$	(5,377	)		$	(4,589	)		$	(10,357	)		$	(9,567	)
Net loss attributable to TechFaith per share
Basic		$	(0.00	)		$	(0.01	)		$	(0.01	)		$	(0.01	)		$	(0.01	)
Diluted		$	(0.00	)		$	(0.01	)		$	(0.01	)		$	(0.01	)		$	(0.01	)
Net loss attribute to TechFaith per ADS
Basic		$	(0.03	)		$	(0.10	)		$	(0.09	)		$	(0.20	)		$	(0.18	)
Diluted		$	(0.03	)		$	(0.10	)		$	(0.09	)		$	(0.20	)		$	(0.18	)
Net loss		$	(1,900	)		$	(5,500	)		$	(4,079	)		$	(10,409	)		$	(10,384	)
Other comprehensive income (loss), net of tax
Foreign currency translation adjustment			(308	)			(8,037	)			3,783				(8,122	)			(5,025	)
Comprehensive loss			(2,208	)			(13,537	)			(296	)			(18,531	)			(15,409	)
Less: Comprehensive income (loss) attributable to non-controlling interest			(53	)			(974	)			887				(888	)			(1,279	)
Comprehensive loss attributable to TechFaith		$	(2,155	)		$	(12,563	)		$	(1,183	)		$	(17,643	)		$	(14,130	)
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

---

CHINA TECHFAITH WIRELESS COMMUNICATION TECHNOLOGY LIMITED

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In Thousands of U.S. Dollars)

 

		September 30, 2015				June 30, 2015				December 31, 2014
Assets
Current assets:
Cash and cash equivalents		$	8,332			$	11,640			$	170,960
Restricted cash			4,720				4,839				4,835
Accounts receivable, net of allowances of $1,296, $1,269 and $599 as of September 30, 2015, June 30, 2015 and December 31, 2014, respectively			25,205				23,145				10,004
Accounts receivable due from a related party, net of allowances of $nil as of September 30, 2015			553				—				—
Notes receivable, net			—				—				429
Inventories, net			8,020				11,102				10,096
Prepaid expenses and other current assets			35,433				29,453				28,151
Assets held for sale			11,665				11,958				11,949
Total current assets		$	93,928			$	92,137			$	236,424
Property, plant and equipment, net, including CIP			200,022			$	196,102			$	143,661
Land use rights, net			9,842				10,144				10,247
Acquired intangible assets, net			8,188				7,782				5,529
Other non-current assets			107,836				122,036				21,639
Total assets		$	419,816			$	428,201			$	417,500
Liabilities and equity
Current liabilities:
Accounts payable			12,766				13,797				15,377
Accounts payable due to a related party			19				—				—
Notes payable			9,440				9,677				9,670
Due to related parties			613				443				178
Short-term loans			11,132				11,532				14,734
Accrued expenses and other current liabilities			53,403				46,760				24,199
Advance from customers			8,966				8,437				8,602
Advance from a related party			818				—				—
Deferred revenue			9,312				9,702				9,685
Income tax payable			397				570				452
Put option liability			2,160				2,130				2,040
Total current liabilities		$	109,026			$	103,048			$	84,937
Long-term loans			1,077				1,903				4,319
Total liabilities		$	110,103			$	104,951			$	89,256
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 September 30, 2015, June 30, 2015 and December 31, 2014, respectively)		$	16			$	16			$	16
Additional paid-in capital			144,836				144,836				144,836
Accumulated other comprehensive income			40,782				47,968				48,068
Statutory reserves			23,755				23,755				23,755
Retained earnings			66,596				71,973				76,953
Total Techfaith shareholders’ equity		$	275,985			$	288,548			$	293,628
Non-controlling interest		$	33,728			$	34,702			$	34,616
Total equity		$	309,713			$	323,250			$	328,244
Total liabilities and equity		$	419,816			$	428,201			$	417,500

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• Dimensional Fund Advisors Ltd. : Form 8.3 - BARRATT DEVELOPMENTS PLC - Ordinary Shares
• Company announcement no 8 Idavang 2024 Annual General Meeting 26-04-2024
• Form 8.5 (EPT/RI) - Abrdn European Logistics Income Plc