Asia Pacific Wire And Cable Company Reports First Half 2013 Financial Results

TAIPEI, Taiwan, Oct. 16, 2013 (GLOBE NEWSWIRE) -- Asia Pacific Wire & Cable Corporation Limited (Nasdaq:APWC) ("APWC" or the "Company"), a leading manufacturer of wire and cable products for the telecommunications and electric-power industries in the Asia-Pacific region, today announced the Company's financial results for the six months ended June 30, 2013.

Financial Summary
1H 2013 Financial Results
       
  1H 2013 1H 2012 CHANGE
Revenues  $212.6 million $215.3 million -1.2%
Gross Profit $19.7 million $22.8 million -13.3%
Net Income  $1.3 million $5.3 million -75.9%
EPS  $0.09 $0.38 -76.3%

* Earnings per share are based on 13.8 million and 13.8 million shares in 1H 2012 and 1H 2013, respectively.

First Half 2013 Results

Revenues for the six months ended June 30, 2013 were $212.6 million, an approximate 1.2% decrease from the prior period. The slight decrease in sales was attributed to a decrease in the Company's manufactured products which include; enameled wire, telecommunications cable and power cables. Power cable sales in Thailand were the primary cause of the decrease in sales year over year mainly due to slowdown in customers' orders. Sales of telecommunications cable and enameled wire remained relatively flat year-over-year. Offsetting these declines were double digit increases in the sales of distributed products which increased by71% to $27.8 million, and the revenue recognition of contracts for Supply, Delivery and Installation ("SDI") of cable which increased by 337% to $7.1 million for the period.

Combined gross profit for the first half of 2013 fell by 13.3% to $19.7 million from $22.8 million in the year-ago period. Gross margins for the six month ended June 30 th in 2013 and 2012, were 9.3% and 10.6%, respectively. Gross margins were down 129 basis points year-over-year as a result of the increase of inventory provision due to decreasing copper prices. Excluding the inventory provision, gross margins were 9.6% and 9.3% for the first half of 2013 and 2012, respectively.

Selling, general and administrative expenses for the first six months decreased 6% to $14.5 million due to expense reductions in response to lower sales. Operating income was $4.7 million compared to $11 million in the first half of 2012.

Net income attributable to APWC shareholders was $1.3 million for the first half of 2013 compared to $5.3 million in the corresponding period in 2012. Earnings per basic and diluted share were $0.09 for the period, compared to $0.38 in the first six months of 2012. The basic and diluted weighted average shares outstanding were 13.8 million for the first half of 2012 and 2013. 

Financial Condition

As of June 30, 2013, APWC had $59.3 million in cash and cash equivalents, $2.9 million in unrestricted short-term bank deposits, and $10.8 million in restricted short-term bank deposits, totaling $73.0 million, compared to cash and cash equivalents and unrestricted and restricted bank deposits totaling $90.2 million as of December 31, 2012.

Total current assets were $306.2 million at June 30, 2013 compared to $330.2 million at December 31, 2012. Working capital was $177.3 million as June 30, 2013, compared to $183.7 million at December 31, 2012. APWC ended June 30, 2013 with total short term bank loans and overdrafts of $54.1 million, down from $57.8 million at December 31, 2012. The Company had no long term debt outstanding at June 30, 2013. Shareholders' equity attributable to APWC was $157.6 million at June 30, 2013 compared to $161.7 million at December 31, 2012.

APWC used approximately $6.6 million of cash for operating activities during the first six months of 2013, a reduction of $9.8 million compared to $16.4 million of cash outflows from operations in the corresponding period in 2012. The Company had capital expenditures of $5.7 million in the first half of 2013 compared to $4.5 million in the first half of 2012.

Business Updates

Asia Pacific Wire and Cable's newly opened Ningbo factory has finished test runs and started trial production of electronic wire.  The target markets for APWC's electronic wire are in consumer electronics and automotive industries; both are fast-growing manufacturing sectors in China.

APWC's subsidiary in Shenzhen, China, is constructing a new factory to partially switch its target market from originally predominated export sales to domestic sales. The new factory is planned for completion before the end of 2013 and to start commercial production in February 2014.

The company will inject $2.5 million into its subsidiary in Shanghai, China before the end of this month. The increased capital is mainly deployed for replacing out-of-date machinery, thus increase efficiency and lowering production cost to increase its competitiveness. The funds were also used to reduce bank loans.

About Asia Pacific Wire & Cable Corporation

Asia Pacific Wire & Cable Corporation is principally engaged in the manufacture and distribution of telecommunications (copper and fiber optic) and power cable and enameled wire products in the Asia Pacific region, primarily in Thailand, China, Singapore and Australia. The Company manufactures and distributes its own wire and cable products and also distributes wire and cable products ("Distributed Products") manufactured by its principal shareholder, Pacific Electric Wire & Cable Company, a Taiwanese company ("PEWC"). The Company also provides project engineering services in the supply, delivery and installation ("SDI") of power cables to certain of its customers. For more information on the Company, visit http://www.APWCC.com. Information on the Company's Web site or any other Web site does not constitute a portion of this release.

Safe Harbor Statement

This release contains certain "forward-looking statements" relating to the Company, its business, and its subsidiary companies. These forward looking statements are often identified by the use of forward-looking terminology such as "believes", "expects" or similar expressions. Such forward looking statements involve known and unknown risks and uncertainties that may cause actual results to be materially different from those described herein as anticipated, believed, estimated or expected. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company's periodic reports that are filed with the Securities and Exchange Commission and available on its website ( www.sec.gov). All forward-looking statements attributable to the Company or to persons acting on its behalf are expressly qualified in their entirety by these factors other than as required under the securities laws. The Company does not assume a duty to update these forward-looking statements.
ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Amounts in thousands of US Dollars, except share data)
   
  For the six-month ended June 30,
  2012 2013
Net sales    
 Manufactured products (sales to related parties amounted to $1,002 and $1,187 for the six-month ended June 30, 2012 and 2013, respectively) $197,436 $177,771
 Distributed products 16,230 27,750
 Supply, delivery and installation of wires and cables 1,628 7,116
  215,294 212,637
Cost of sales (purchases from related parties amounted to$22,952 and $20,952 for the six-month ended June 30, 2012 and 2013, respectively) (192,544) (192,914)
Gross profit 22,750 19,723
Selling, general and administrative expenses (15,525) (14,535)
Allowance for doubtful accounts  (39) (65)
Charge related to flooding  (749) 0
Impairment of investment  0 (464)
Recovery of losses from flooding  4,611 40
Income from operations 11,048 4,699
Exchange gain (loss), net 665 (378)
Interest income 659 768
Interest expense (988) (951)
Gain on disposal of an investment 0 554
Share of net gain (loss) of equity investees 27 (47)
Other income, net 1,011 481
Income before income taxes 12,422 5,126
Income taxes expense (3,780) (1,757)
Net income 8,642 3,369
Less: Net income attributable to non-controlling interests (3,348) (2,092)
Net income attributable to APWC 5,294 1,277
Basic and diluted earnings per share 0.38 0.09
Basic and diluted weighted average common shares outstanding  13,830,769 13,821,612
     
ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
(Amounts in thousands of US Dollars, except share data)
   
  For the six-month ended June 30,
  2012 2013
  $8,642 $3,369
Net income    
Other comprehensive income (loss)    
Currency translation adjustment, net of tax of nil 389 (7,075)
Pension liability adjustments 10 158
Reclassification of unrealized loss of available-for-sale securities upon disposal or impairment 0 464
Other comprehensive income (loss) for the period 399 (6,453)
Total comprehensive income (loss) for the period 9,041 (3,084)
Less: total comprehensive income attributable to non-controlling interest (2,546) (1,029)
Total comprehensive income (loss) attributable to APWC shareholders 6,495 (4,113)
     
ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands of US Dollars, except share data)
  As of December 31, 2012 As of June 30, 2013, (Unaudited) 
     
ASSETS    
     
Current assets:    
 Cash and cash equivalents $72,816 $59,312
 Unrestricted short-term bank deposits 6,210 2,898
 Restricted short-term bank deposits 11,217 10,799
 Accounts receivable, net of allowance for 125,128 105,620
  doubtful accounts of $2,580 and $2,499 as at    
 December 31, 2012 and June 30, 2013, respectively    
 Amounts due from related parties 4,066 4,692
 Inventories    
  Distributed products 12,780 11,122
  Finished products 40,589 46,560
  Work-in-progress 19,743 16,515
  Raw materials and supplies 25,409 39,325
  98,521 113,522
     
 Deferred tax assets 3,134 2,978
 Prepaid expenses 6,738 6,401
 Short - term investment in held-to-maturity securities  2,378 0
Total current assets 330,208 306,222
     
Property, plant and equipment:    
 Land 6,194 5,973
 Land use rights 2,914 2,952
 Buildings 52,372 51,216
 Machinery and equipment 122,584 116,710
 Motor vehicles 4,336 4,400
 Office equipment 6,830 6,668
 Construction in progress 4,998 7,081
  200,228 195,000
 Accumulated depreciation and impairment losses (149,832) (142,948)
  50,396 52,052
Investments 1,002 985
Investments in equity investees 4,414 3,085
Other assets 889 182
Deferred tax assets 2,475 2,514
  8,780 6,766
Total assets $389,384 $365,040
     
LIABILITIES AND EQUITY    
     
Current liabilities:    
 Bank loans and overdrafts 57,845 54,145
 Accounts payable 40,616 33,919
 Accrued expenses 13,499 11,356
 Amounts due to related parties 11,428 13,304
 Short-term loans from the immediate holding company 1,732 1,732
 Income tax liabilities 11,225 9,694
 Other current liabilities 10,149 4,812
Total current liabilities 146,494 128,962
     
Non-current liabilities:    
     
Other non-current liabilities 6,060 6,183
Deferred tax liabilities 2,219 2,278
Total non-current liabilities 8,279 8,461
Total liabilities 154,773 137,423
     
Commitments and contingencies    
     
Shareholders' equity:    
Common shares, $0.01 per share:    
Authorized shares of 50,000,000  138 138
Issued shares: 13,830,769    
Outstanding shares:    
Jun 30, 2013 – 13,819,669 shares     
Dec 31, 2012 – 13,828,869 shares    
 Additional paid-in capital 110,608 110,608
 Retained earnings 45,553 46,830
 Treasury shares (6) (38)
 Accumulated other comprehensive income 5,424 33
Total APWC shareholders' equity 161,717 157,571
Non-controlling interests 72,894 70,046
Total equity 234,611 227,617
Total liabilities and equity $389,384 $365,040
     
ASIA PACIFIC WIRE & CABLE CORPORATION LIMITED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands of U.S. Dollars)
  For the six-month ended June 30,
   
  2012   2013
Net cash (used in) operating activities ($16,409)   ($6,600)
Net cash provided by (used in) investing activities (10,790)   1,757
Net cash provided by (used in) financing activities 4,373   (8,253)
Effect of exchange rate changes on cash and cash equivalents 381   (408)
Net (decrease) in cash and cash      
  equivalents (22,445)   (13,504)
Cash and cash equivalents at beginning of period 76,672   72,816
Cash and cash equivalents at end of period $54,227   $59,312
CONTACT: Company Contact:         Asia Pacific Wire & Cable Corporation Limited         Mr. Ivan Hsia, CFO         Phone: +886-2-2712-2558 ext. 27         E-mail: ivan.hsia@apwcc.com                  Investor Relations Contact:         MZ North America         John Mattio, SVP         Tel: +1-212-301-7130         Email: john.mattio@mzgroup.us         www.mzgroup.us