6-K 1 v306452_6k.htm FORM 6-K

 

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: March 2012

 

Commission File Number: 000-53826

 

PLASTEC TECHNOLOGIES, LTD.

(Translation of registrant’s name into English)

 

Unit 01, 21/F, Aitken Vanson Centre, 61 Hoi Yuen Road, Kwun Tong, Kowloon, Hong Kong

(Address of Principal Executive Offices)

 

Indicate by check mark whether the registrant files or will file annual reports under cover 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): ¨

 

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934. Yes ¨  No x

 

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-___________.

 

 
 

 

Unaudited Financial Statements

 

This Report of Foreign Private Issuer on Form 6-K by Plastec Technologies, Ltd. (the “Company”) contains the Company’s unaudited financial results for its fiscal year 2012 third quarter and nine months ended January 31, 2012. A copy of the press release issued by the Company announcing such financial results is attached to this report as Exhibit 99.1.

 

Forward Looking Statement

 

This Report of Foreign Private Issuer on Form 6-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934. These statements relate to future events or the Company’s future financial performance. The Company has attempted to identify forward-looking statements by terminology including “anticipates”, “believes”, “expects”, “can”, “continue”, “could”, “estimates”, “intends”, “may”, “plans”, “potential”, “predict”, “should” or “will” or the negative of these terms or other comparable terminology. These statements are only predictions, uncertainties and other factors may cause the Company’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. The information in this Report on Form 6-K is not intended to project future performance of the Company. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company does not guarantee future results, levels of activity, performance or achievements. The Company expectations are as of the date this Report on Form 6-K is filed, and the Company does not intend to update any of the forward-looking statements after the date this Report on Form 6-K is filed to confirm these statements to actual results, unless required by law.

 

The forward-looking statements included in this Report on Form 6-K are subject to risks, uncertainties and assumptions about our businesses and business environments. These statements reflect our current views with respect to future events and are not a guarantee of future performance. Actual results of our operations may differ materially from information contained in the forward-looking statements as a result of risk factors some of which include, among other things: continued compliance with government regulations; changing legislation or regulatory environments; requirements or changes affecting the business in which the Company is engaged; industry trends, including factors affecting supply and demand; labor and personnel relations; credit risks affecting the Company's revenue and profitability; changes in the plastic industry; the Company’s ability to effectively manage its growth, including implementing effective controls and procedures and attracting and retaining key management and personnel; changing interpretations of generally accepted accounting principles; general economic conditions; and other relevant risks detailed in the Company’s filings with the Securities and Exchange Commission.

 

 
 

 

PLASTEC TECHNOLOGIES, LTD.
CONSOLIDATED BALANCE SHEETS
(Hong Kong dollars in thousands, except number of shares, per share data and unless otherwise stated)

 

         
   As of   As of 
   January 31, 2012   April 30, 2011 
   HK$   HK$ 
   (Unaudited)   (Audited) 
ASSETS          
Current assets          
Cash and cash equivalents   165,464    219,757 
Trade receivables, net of allowances for doubtful accounts of HK$nil
and HK$nil as of January 31, 2012 and April 30, 2011 respectively
   239,657    270,763 
Inventories   137,896    117,733 
Deposits, prepayment and other receivables   16,418    8,357 
Total current assets   559,435    616,610 
           
Property, plant and equipment, net   544,344    551,079 
Prepaid lease payment, net   25,140    26,237 
Other assets   11,550    8,001 
Intangible asset   438    - 
Total assets   1,140,907    1,201,927 
           
LIABILITIES AND SHAREHOLDERS' EQUITY          
Current liabilities          
Bank borrowings   148,010    169,710 
Capital lease obligations   1,158    5,311 
Trade payables   107,497    127,987 
Other payables and accruals   103,199    80,811 
Tax payable   70,847    56,389 
Total current liabilities   430,711    440,208 
           
Capital lease obligations   -    303 
Deferred tax liabilities   14,504    15,156 
Total liabilities   445,215    455,667 
           
Commitments and contingencies   -    - 
           
Shareholders' equity          
Preferred shares (US$0.001 par value; 1,000,000 shares authorized, none issued and outstanding)   -    - 
Ordinary shares (US$0.001 par value; 100,000,000 shares authorized,
15,163,196 shares and 16,733,196 shares issued and outstanding
as of January 31, 2012 and April 30, 2011 respectively)
   118    131 
Additional paid-in capital   78,140    169,973 
Accumulated other comprehensive income   15,263    8,106 
Retained earnings   602,171    568,050 
Total Plastec Technologies, Ltd. shareholders' equity   695,692    746,260 
           
Total liabilities and shareholders' equity   1,140,907    1,201,927 

 

 
 

 

PLASTEC TECHNOLOGIES, LTD.
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (UNAUDITED)
(Hong Kong dollars in thousands, except number of shares, per share data and unless otherwise stated)

 

   For the 3 months ended   For the 9 months ended 
   January 31,   January 31, 
   2012   2011   2012   2011 
   HK$   HK$   HK$   HK$ 
                 
Revenue   248,127    327,976    973,941    1,000,578 
Cost of revenues   (229,227)   (262,661)   (862,245)   (804,296)
Gross profit   18,900    65,315    111,696    196,282 
                     
Operating expenses                    
Selling, general and administrative expenses   (18,759)   (20,522)   (62,460)   (60,279)
Other income   418    4,075    1,637    4,670 
Gain/(loss) on disposal of property, plant and equipment   51    (28)   190    (956)
                     
Total operating expenses, net   (18,290)   (16,475)   (60,633)   (56,565)
                     
Income from operations   610    48,840    51,063    139,717 
                     
Interest income   59    38    174    76 
Interest expense   (626)   (852)   (2,067)   (2,205)
Income before income tax expense   43    48,026    49,170    137,588 
                     
Income tax expense (Note)   1,598    (6,729)   (15,049)   (20,260)
Net income   1,641    41,297    34,121    117,328 
                     
Other comprehensive income                    
Foreign currency translation adjustment   19    (35)   7,157    218 
Comprehensive income attributable to                    
Plastec Technologies, Ltd.   1,660    41,262    41,278    117,546 
                     
Weighted average number of ordinary shares   15,692,218    8,174,291    16,386,203    7,427,819 
Weighted average number of diluted ordinary shares   15,692,218    8,174,291    16,386,203    7,427,819 
                     
Basic earnings per share attributable to                    
Plastec Technologies, Ltd.  HK$ 0.1   HK$ 5.1   HK$ 2.1   HK$ 15.8 
Diluted earnings per share attributable to                    
Plastec Technologies, Ltd.  HK$ 0.1   HK$ 5.1   HK$ 2.1   HK$ 15.8 

 

Note:   Income tax expenses for the three and nine months ended January 31, 2011 included tax adjustments for HK$2,431 and HK$7,293  for additional tax payable under enterprise income tax in China respectively.

 

 
 

 

PLASTEC TECHNOLOGIES, LTD.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(Hong Kong dollars in thousands, except number of shares, per share data and unless otherwise stated)

 

    Ordinary Shares       Accumulated         
   Number of       Additional   Other       
   Shares       Paid-in   Comprehensive   Retained   Total 
   Outstanding   Amount   Capital   Income   Earnings    Equity 
       HK$   HK$   HK$   HK$   HK$ 
                         
Balance at May 1, 2010
(retroactively restated)
   7,054,583    55    113,413    7,888    444,736    566,092 
                              
Recapitalization in connection with the reverse merger   2,191,768    17    56,619    -    -    56,636 
                               
Issuance of new shares   7,486,845    59    (59)   -    -    - 
Net income for the year   -    -    -    -    133,314    133,314 
Dividend declared and approved   -    -    -    -    (10,000)   (10,000)
Cumulative translation adjustment   -    -    -    218    -    218 
                               
Balance at April 30, 2011 and May 1, 2011   16,733,196    131    169,973    8,106    568,050    746,260 
                               
Share repurchase   (1,570,000)   (13)   (91,833)   -    -    (91,846)
Net income for the period   -    -    -    -    34,121    34,121 
Cumulative translation adjustment   -    -    -    7,157    -    7,157 
                               
Balance at January 31, 2012   15,163,196    118    78,140    15,263    602,171    695,692 

 

 
 

 

PLASTEC TECHNOLOGIES, LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(Hong Kong dollars in thousands, except number of shares, per share data and unless otherwise stated)

 

   For the 9 months ended 
   January 31, 
   2012   2011 
   HK$   HK$ 
Operating activities        
Net Income after taxation   34,121    117,328 
Adjustments to reconcile net income to net cash provided by operating activities          
Depreciation and amortization   117,900    104,933 
Gain on disposals prepaid leases   -    (3,798)
Loss on disposal of property, plant and equipment   690    - 
(Gain)/loss on disposal of property, plant and equipment   (879)   956 
Deferred liabilities charge   (652)   - 
Change in operating assets and liabilities:          
Trade receivables   25,372    (25,428)
Inventories   (20,163)   (51,139)
Deposits, prepayment and other receivables   (8,062)   3,073 
Trade payables   (14,757)   7,152 
Other payables and accruals   22,394    15,804 
Tax payables   14,458    24,867 
           
Net cash provided by operating activities   170,422    193,748 
           
Investing activities          
Purchase of property, plant and equipment   (103,998)   (171,511)
Purchase of intangible assets   (438)   - 
Proceeds from disposal of property, plant and equipment   -    3,926 
Deposits for purchase of property, plant and equipment   2,187    1,925 
    (11,552)   (12,650)
Net cash used in investing activities   (113,801)   (178,310)
           
Financing activities          
Repurchase of shares   (91,846)   - 
Net cash inflow from the Merger transaction   -    58,160 
Proceeds from bank borrowings   273,306    376,019 
Repayment of bank borrowings   (295,006)   (303,010)
Repayment of capital lease obligations   (4,457)   (7,615)
Dividends paid   -    (70,000)
           
Net cash provided by/(used in) financing activities   (118,003)   53,554 
           
Effect of exchange rate changes on cash and cash equivalents   7,089    218 
           
Net increase/(decrease) in cash and cash equivalents   (61,382)   68,992 
Cash and cash equivalents, beginning of period   219,757    151,304 
Cash and cash equivalents, end of period   165,464    220,514 
           
Supplementary          
interest paid   2,067    2,205
income tax paid   1,243    (4,606)

 

 
 

 

Plastec Technologies, Ltd.

Management discussion and analysis

 

General

 

The unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“USGAAP”). The preparation of financial statements in conformity with USGAAP requires management to make estimates and assumptions that reported amounts of assets and liabilities at the date of the financial statements and the amount of expenses reported during the period. Actual results could differ from those estimates.

 

Plastec Technologies, Ltd. (the “Company”), formerly known as “GSME Acquisition Partners I” (“GSME”), is a Cayman Islands exempted company that was formed on March 27, 2008, for the purpose of acquiring an operating business that has its principal operations located in the People Republic of China through a merger, share exchange, asset acquisition, plan of arrangement, recapitalization, reorganization or similar business combination, or control of such operating business through contractual arrangements. On December 16, 2010, the Company consummated the transactions contemplated by the Amended and Restated Agreement and Plan of Reorganization, dated as of September 13, 2010, as amended (the “Merger Agreement”), pursuant to which, among other things, Plastec International Holdings Limited (“Plastec”) became a wholly owned subsidiary of the Company (the “Merger Transaction”). The Merger Transaction was accounted for as a reverse acquisition with Plastec being considered the accounting acquirer in the merger. In connection with the merger, the Company changed its name to Plastec Technologies, Ltd.

 

The completion of the merger enabled the Plastec shareholders to obtain a majority voting interest in the Company. USGAAP requires that a company whose shareholders retain the majority interest in a combined business be treated as the acquirer for accounting purposes. Accordingly, the aforesaid Merger Transaction was accounted for as a reverse acquisition of a private operating company (Plastec) with a non-operating public company (GSME) with significant amount of cash. The reverse acquisition process utilizes the capital structure of GSME and assets and liabilities of Plastec are recorded at historical cost. The transaction was recorded as a recapitalization of Plastec and thus was reflected retrospectively in Plastec’s historical financial statements. Although Plastec is deemed to be the accounting acquirer for financial accounting and reporting purposes, the legal status of the Company as the surviving company did not change.

 

Under the reverse acquisition accounting, the historical consolidated financial statements of the Company for the periods prior to December 16, 2010 are those of Plastec and its subsidiaries. Since Plastec is deemed as accounting acquirer, Plastec’s fiscal year replaced the Company’s fiscal year. The fiscal year end is changed from October 31 to April 30. The financial statements of the Company reflect the aforementioned Merger Transaction in the consolidated statements of shareholders’ equity through a line of “Recapitalization in connection with the reverse merger” to present the net assets of the Company as of December 16, 2010. The net assets of the Company as of December 16, 2010 were as follows:

 

Net assets acquired:

 

   HK$’000 
Cash   58,160 
Accounts payable and accrued liabilities   (1,524)
    56,636 

 

On April 30, 2011, the parties amended the Merger Agreement to remove certain earnout provisions. In connection therewith, an aggregate of 7,486,845 ordinary shares of the Company were issued to the former Plastec shareholders on April 30, 2011.

 

By purchase agreement dated December 1, 2011, the Company repurchased from Sun Yip Industrial Company Limited, a company controlled by Mr. Kin Sun Sze-To, the Company’s Chief Executive Officer, 1,570,000 ordinary shares of the Company at a price of US$7.50 per share for an aggregate purchase price of US$11,775,000. Upon consummation of the transaction, the shares were cancelled by the Company.

 

 
 

 

Results of Operations

 

Operating results for the third quarter ended January 31, 2012 compared to the third quarter ended January 31, 2011

 

Revenue for the third quarter ended January 31, 2012 decreased by HK$79.8 million or 24.3% to HK$248.1 million compared to the corresponding period in the prior year, as a result of reduced sales orders from key customers, due to both the sluggish market sentiment and shortage of electronics components resulting from flooding in Thailand.

 

Cost of revenue for the third quarter ended January 31, 2012 decreased correspondingly by HK$33.4 million or 12.7% to HK$229.2 million compared to the corresponding period in the prior year. This was mainly due to decrease in raw materials consumed in line with less sales orders. Wages and factory overheads, however, increased as a result of the increasing cost of labor in China and inflation.

 

Gross profit decreased by HK$46.4 million or 71.1% to HK$18.9 million and gross profit margin decreased to 7.6% from 19.9% accordingly.

 

Total selling, general and administrative expenses decreased by HK$1.8 million or 8.6% to HK$18.8 million as a result of the exchange gain offsetting increased administration costs such as professional fees and salaries including non-executive directors fees.

 

Income tax expenses were reversed to adjust for the full fiscal year computation. The Company recorded net income after tax of HK$1.6 million in the third quarter ended January 31, 2012, compared to a profit of HK$41.3 million in the corresponding period in last year, or reduced by 96.0%.

 

Operating results for the nine months ended January 31, 2012 compared to the nine months ended January 31, 2011

 

Revenue for the nine months ended January 31, 2012 decreased by HK$26.6 million or 2.7% to HK$973.9 million compared to the corresponding period in the prior year. The effect of reduced revenue in the third quarter was mitigated by the increased revenue in the first six months. Delay in new products launching also resulted in a negative impact to our sales and profit margin.

 

Cost of revenue for the nine months ended January 31, 2012 increased correspondingly by HK$57.9 million or 7.2% to HK$862.2 million compared to the corresponding period in last year. This was mainly due to increased wages, factory overheads for the increasing cost of labor and inflation.

 

Gross profit decreased by HK$84.6 million or 43.1% to HK$111.7M and gross profit margin decreased to 11.5% from 19.6% accordingly.

 

Total selling, general and administrative expenses increased by HK$2.2 million or 3.6% to HK$62.5 million as a result of the increased administration costs such as professional fees and salaries after listing.

 

The Company recorded net income after tax of HK$34.1 million in the nine months ended January 31, 2012, compared to a profit of HK$117.3 million in the corresponding period in last year, or reduced by 70.9%.

 

 
 

 

Balance sheet positions as at January 31, 2012 compared to April 30, 2011

 

Total assets decreased by HK$61.0 million or 5.1% to HK$1,140.9 million as at January 31, 2012 from HK$1,201.9 million, which were mainly attributed to a HK$31.1 million decrease in trade receivables, a HK$54.3 million decrease in cash and cash equivalents after the cash paid out for shares repurchased, and a HK$20.2 million increase in inventories.

 

Total liabilities decreased by HK$10.5 million or 2.3% to HK$445.2 million as at January 31, 2012 from HK$455.7 million, which were mainly attributed to a HK$25.9 million decrease in bank borrowing and capital lease obligations, a HK$20.5 million decrease in trade payables, a HK$22.4 million increase in other payables and accruals and a HK$14.5 million increase in tax payable.

 

Cashflow analysis

 

The Company has relied primarily upon internally generated funds and bank borrowings to finance its operations and expansion.

 

For the nine months ended January 31, 2012, the Company had recorded a HK$61.4 million cash outflow as compared to HK$69.0 million cash inflow in the same corresponding period in the prior fiscal year, which was mainly due to a HK$91.8 million cash paid out for the share repurchase in December, 2011. The decreases in the nine months ended January 31, 2012 were also attributed to net cash provided by operating activities of HK$170.4 million, offsetting net cash used in investing activities of HK$113.8 million for the purchase of property, plant and equipment including the new buildings construction in the Company’s Shenzhen plant in China, and net cash used in repayment of bank borrowings and capital lease obligations of HK$26.2 million.

 

Off-Balance Sheet Arrangements

 

The Company has not entered into any financial guarantees or other commitments to guarantee the payment obligations of third parties. The Company has not entered into any derivative contracts that are indexed to its shares and classified as shareholder’s equity or that are not reflected in its combined financial statements. Furthermore, the Company does not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. The Company does not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to it or that engages in leasing, hedging or research and development services with the Company. There are no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company’s financial condition, net sales or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to an investor.

 

 
 

 

SIGNATURE

 

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 hereunto duly authorized.

 

  PLASTEC TECHNOLOGIES, LTD.
     
  By: /s/ Kin Sun Sze-To
  Name: Kin Sun Sze-To
  Title: Chief Executive Officer
     
Dated: March 19, 2012