Form 6-K China Techfaith Wireless For: Sep 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 September 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: September 25, 2015

---

EXHIBIT INDEX

 

Exhibit No.		Description
99.1		Press Release

Exhibit 99.1

 

        

TechFaith Reports Second Quarter 2015 Financial Results

Beijing, China, September 24, 2015 - China TechFaith Wireless Communication Technology Limited (NASDAQ: CNTF) (“TechFaith” or the “Company”) today announced its unaudited financial results for the second quarter ended June 30, 2015.

For the second quarter of 2015, TechFaith reported total net revenues of US$23.6 million compared to US$24.7 million in the first quarter of 2015 and US$23.7 million in the second quarter of 2014. Gross profit for the second quarter of 2015 was US$2.8 million compared to US$2.2 million in the first quarter of 2015 and US$2.4 million in the second quarter of 2014. Gross margin for the second quarter of 2015 was 11.9% compared to 9.0% in the first quarter of 2015 and 10.1% in the second quarter of 2014, which reflects an increase in rental income during the second quarter of 2015.

Net loss attributed to TechFaith for the second quarter of 2015 was US$1.8 million or US$0.03 per basic and diluted weighted average outstanding American Depositary Share (ADS), compared to a net loss of US$3.1 million or US$0.06 per basic and diluted weighted average outstanding ADS in the first quarter of 2015 and a net loss of US$2.1 million or US$0.04 per basic and diluted weighted average outstanding ADS in the second quarter of 2014.

Ms. Ouyang Yuping, TechFaith’s Chief Financial Officer, said, “The second quarter of 2015 developed as expected with revenues coming in line with our guidance. Our gross margin improved to 11.9% in the second quarter of 2015 from 9.0% in the first quarter of 2015, as we achieved a 75% increase in our rental income over the same period, which rose from US$0.8 million to US$1.3 million. We continue to evaluate resources and programs as we work to better align our cost structure to our lower revenue base and to support the increased significance of our real estate business. As a result, we further reduced our operating expenses to US$4.3 million in the second quarter of 2015 compared to US$5.2 million in the first quarter of 2015. We remain on schedule with the expansion of our real estate business, with the second quarter of 2015 marking another major milestone in our progress. We invested US$139.1 million as part of a planned expansion of our real estate portfolio, which had the impact of reducing our balance of cash and cash equivalents to US$16.5 million at the end of the second quarter of 2015. We continue to have both sufficient resources and flexibility to meet our operating and working capital needs. Importantly, we expect to strengthen our balance sheet over the coming quarters as we start to secure a return on our real estate investments through the sale or lease of all available and unoccupied space.”

Mr. Deyou Dong, Chief Executive Officer of TechFaith, said, “Our overall assessment of the mobile sector remains unchanged from earlier in the year, with growth expected to face significant challenges for the foreseeable future due to shorter product lifecycles, high levels of competition and continued cost pressure. We are starting to evaluate strategic options around our mobile business, which may or may not ultimately result in the sale of our mobile business. We continue to focus on our growing real estate portfolio and expect this to be a major catalyst to unlock value for our Company and shareholders going forward. As we have completed most of the construction associated with our 16 buildings in Beijing, in addition to our two already completed buildings in Shenyang, our focus is on finishing the final construction phase of our technology parks in Beijing and attracting suitable tenants or buyers to lease or purchase all available and unused space.”

---

Third Quarter of 2015 Outlook

TechFaith currently expects its total net revenues for the third quarter of 2015 to be in the range of US$4.5 million to US$8.0 million. The decline in expected total net revenues for the third quarter 2015 as compared to the second quarter of 2015 reflects the expected significant negative impact of reduced orders from one of the Company’s large enterprise customers. 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 Thursday, September 24, 2015 at 8:00 a.m. U.S. Eastern Time (8:00 p.m. Thursday, September 24, 2015 in Beijing) using the following dial-in numbers: +1-866-515-2912 or +1-617-399-5126. The conference call passcode is: 65963380. 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 +1-617-801-6888, using the following passcode: 93510463. A webcast replay will also be available at www.techfaithwireless.com.

About TechFaith

TechFaith (NASDAQ: CNTF) is a China-based mobile solutions provider for the global mobile handsets market, with a focus on the original design and development of specialized mobile handsets for consumers and enterprises under both our customers’ and our own brands, as well as on the sale of finished products to local and international customers. Starting in 2008, we began investing in the construction of buildings and facilities to expand our real estate portfolio in China as part of our growth and diversification strategy. 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 COMPREHENSIVE INCOME (LOSS)

(In Thousands of U.S. Dollars, except share and per share/ADS data)

 

		Three Months Ended				Three Months Ended								Six Months Ended
		March 31				June 30								June 30
		2015				2015				2014				2015				2014
Revenues:
ODP		$	19,287			$	19,041			$	18,631			$	38,328			$	42,086
Brand name phone sales			4,656				3,225				4,463				7,881				7,175
Rental			766				1,341				606				2,107				1,218
Total net revenues		$	24,709			$	23,607			$	23,700			$	48,316			$	50,479
Cost of revenues:
ODP		$	17,794			$	17,046			$	16,861			$	34,840			$	38,606
Brand name phone sales			4,472				3,476				4,211				7,948				6,703
Rental			212				278				234				490				473
Total cost of revenues		$	22,478			$	20,800			$	21,306			$	43,278			$	45,782
Gross Profit		$	2,231			$	2,807			$	2,394			$	5,038			$	4,697
Operating expenses:
General and administrative		$	2,949			$	1,754			$	1,682			$	4,703			$	3,547
Research and development			1,810				2,110				1,467				3,920				3,266
Selling and marketing			396				399				2,278				795				4,698
Impairment of long-lived assets			—				—				—				—				—
Total operating expenses		$	5,155			$	4,263			$	5,427			$	9,418			$	11,511
Government subsidy income			1				34				91				35				91
Other operating income			—				11				—				11				—
Loss from operations		$	(2,923	)		$	(1,411	)		$	(2,942	)		$	(4,334	)		($	6,723	)
Interest expenses			(217	)			(268	)			(121	)			(485	)			(251	)
Interest income			161				146				434				307				877
Other expense			—				(2	)			3				(2	)			2
Change in fair value of put option			(30	)			(60	)			(30	)			(90	)			(90	)
Loss before income taxes		$	(3,009	)		$	(1,595	)		$	(2,656	)		$	(4,604	)		($	6,185	)
Income tax expenses			—				(305	)			(88	)			(305	)			(120	)
Net loss		$	(3,009	)		$	(1,900	)		$	(2,744	)		$	(4,909	)		($	6,305	)
Less: net income (loss) attributable to the noncontrolling interest			140				(69	)			(659	)			71				(1327	)
Net loss attributable to TechFaith		$	(3,149	)		$	(1,831	)		$	(2,085	)		$	(4,980	)		($	4,978	)
Net loss attributable to TechFaith per share
Basic and diluted		$	(0.00	)		$	(0.00	)		$	(0.00	)		$	(0.01	)		($	0.01	)
Net loss attribute to TechFaith per ADS
Basic and diluted		$	(0.06	)		$	(0.03	)		$	(0.04	)		$	(0.09	)		($	0.09	)
Net loss		$	(3,009	)		$	(1,900	)		$	(2,744	)		$	(4,909	)		($	6,305	)
Other comprehensive income (loss), net of tax
Foreign currency translation adjustment			223				(308	)			721				(85	)			(8,808	)
Comprehensive loss			(2,786	)			(2,208	)			(2,023	)			(4,994	)			(15,113	)
Less: Comprehensive income (loss) attributable to noncontrolling interest			139				(53	)			(621	)			86				(2,166	)
Comprehensive loss attributable to TechFaith		$	(2,925	)		$	(2,155	)		$	(1,402	)		$	(5,080	)		($	12,947	)
Weighted average shares outstanding
Basic and 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)

 

		June 30, 2015				March 31, 2015				December 31, 2014
Assets
Current assets:
Cash and cash equivalents		$	11,640			$	165,209			$	170,960
Restricted cash			4,839				4,839				4,835
Accounts receivable, net of allowances of $1,269, $791 and $599 as of June 30, 2015, March 31, 2015 and December 31, 2014, respectively			23,145				14,781				10,004
Notes receivable, net			—				—				429
Inventories, net			11,102				16,946				10,096
Prepaid expenses and other current assets			29,453				20,245				28,151
Assets held for sale			11,958				11,960				11,949
Total current assets		$	92,137			$	233,980			$	236,424
Property, plant and equipment, net			196,102			$	151,361			$	143,661
Land use rights, net			10,144				10,201				10,247
Acquired intangible assets, net			7,782				6,656				5,529
Other non-current assets			122,036				21,659				21,639
Total assets		$	428,201			$	423,857			$	417,500
Liabilities and equity
Current liabilities:
Accounts payable (including accounts payable of the consolidated variable interest entity without recourse to China TechFaith Wireless Communication Technology Limited, $nil, $nil and $nil as of June 30, 2015, March 31, 2015 and December 31, 2014, respectively)			13,797				10,198				15,377
Notes payable (including notes payable of the consolidated variable interest entity without recourse to China TechFaith Wireless Communication Technology Limited, $nil, $nil and $nil as of June 30, 2015, March 31, 2015 and December 31, 2014, respectively)			9,677				9,679				9,670
Amount due to a related party (including amount due to a related party of the consolidated variable interest entity without recourse to China TechFaith Wireless Communication Technology Limited, $nil, $nil and $nil as of June 30, 2015, March 31, 2015 and December 31, 2014, respectively)			443				310				178
Short-term loans (including short-term loans of the consolidated variable interest entity without recourse to China TechFaith Wireless Communication Technology Limited, $nil, $nil and $nil as of June 30, 2015, March 31, 2015 and December 31, 2014, respectively)			11,532				24,292				14,734
Accrued expenses and other current liabilities (including accrued expenses and other current liabilities of the consolidated variable interest entity without recourse to China TechFaith Wireless Communication Technology Limited, $nil, $197 and $196 as of June 30, 2015, March 31, 2015 and December 31, 2014, respectively)			46,760				28,075				24,199
Advance from customers (including advance from customers of the consolidated variable interest entity without recourse to China TechFaith Wireless Communication Technology Limited, $nil, $nil and $nil as of June 30, 2015, March 31, 2015 and December 31, 2014, respectively)			8,437				10,140				8,602
Deferred revenue (including deferred revenue of the consolidated variable interest entity without recourse to China TechFaith Wireless Communication Technology Limited, $nil, $nil and $nil as of June 30, 2015, March 31, 2015 and December 31, 2014, respectively)			9,702				9,683				9,685
Income tax payable (including income tax payable of the consolidated variable interest entity without recourse to China TechFaith Wireless Communication Technology Limited, $nil, $30 and $46 as of June 30, 2015, March 31, 2015 and December 31, 2014, respectively)			570				436				452
Put option liability (including a put option liability of the consolidated variable interest entity without recourse to China TechFaith Wireless Communication Technology Limited, $nil, $nil and $nil as of June 30, 2015, March 31, 2015 and December 31, 2014, respectively)			2,130				2,070				2,040
Total current liabilities		$	103,048			$	94,883			$	84,937
Long-term loans (including long-term loans of the consolidated variable interest entity without recourse to China TechFaith Wireless Communication Technology Limited, $nil, $nil and $nil as of June 30, 2015, March 31, 2015 and December 31, 2014, respectively)			1,903				3,516				4,319
Total liabilities		$	104,951			$	98,399			$	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 June 30, 2015, March 31, 2015 and December 31, 2014, respectively)		$	16			$	16			$	16
Additional paid-in capital			144,836				144,836				144,836
Accumulated other comprehensive income			47,968				48,292				48,068
Statutory reserves			23,755				23,755				23,755
Retained earnings			71,973				73,804				76,953
Total TechFaith shareholders’ equity		$	288,548			$	290,703			$	293,628
Noncontrolling interest		$	34,702			$	34,755			$	34,616
Total equity		$	323,250			$	325,458			$	328,244
Total liabilities and equity		$	428,201			$	423,857			$	417,500

---

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

---

You May Also Be Interested In

• Composition of the Nomination Committee of Orion Corporation
• RROCKET Burns 50% of Its Supply to Fuel Growth and Investor Confidence
• HSBC Continental Europe: Post Stabilisation Notice