Primax — Call Transcript 2015

Aug 14, 2015

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Primax Electronics Ltd. (4915 TT)

2Q15 Earnings Conference Call

CEO Brian Yang CFO Yi Pin Lee

14 Aug 2015

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2Q15 Result

Record Quarter Revenue

NTD: MNS	Q2 15		Q1 15	Q2 14	QoQ	YoY
Net Sales	14,540		12,958	13,580	12.2%	7.1%
COGS Gross Profit	12,994		11,526 1,432	11,998 1,582
	1,546
Gross Margin	10.6%		11.1%	11.6%	-0.4%	-1.0%
Operating Expense Operating Expense % Operating Income Operating Margin Non-operating Items Income before Tax Income Tax	1,153		1,059 8.2% 373 2.9% 118 492 114	1,094 8.1% 488 3.6% 60 548 122	-0.2% 5.1% -0.2% -1.4%
	7.9%					-0.1% -19.6%
	392
	2.7%					-0.9%
	92
	485					-11.5%
	95
Net Income	390		378	426	3.2%	-8.5%
Net Margin Net income attributed to Primax EPS (NT$)	2.7%		2.9% 368 0.85	3.1% 412 0.95	-0.2%	-0.5%
	399
	0.91

Quarterly Sales Record YoY Record High

Record 1H Revenue

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16,000
14,539
NTD:Millions 13,622
13,435
13,580
14,000
12,948
11,603
12,000
11,064
10,315 10,359
10,000
8,000
6,000
4,000
2,000
0
2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15
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Gross Profit

Record YoY Record High

1,800 NTD:Millions 1,626 1,586 1,582 1,546 1,500 1,425 1,432 1,200 1,085 1,038 900 660 600 300 0 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15

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Gross Margin

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14.0%
11.9% 11.8%
11.6%
12.0%
11.1%
10.6%
10.5%
10.1% 12.3%
10.0%
8.0%
6.0%
6.0%
4.0%
2.0%
0.0%
2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15
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Operating Profit

Record YoY Record 2[[nd]] High

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Record 2 [[nd]] High
700
NTD:Millions
600
497 522
488
500
392
400 373
323
300 233 260
200
100
0
2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15
-100 -49
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Operating Margin

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6.0%
5.0%
4.3%
3.8%
4.0%
2.9%
3.6% 2.4% 2.7%
3.0%
2.5%
2.3%
2.0%
1.0%
-0.4%
0.0%
2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15
-1.0%
-2.0%
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Record YoY Since Re-Listing EPS NTD Record High Since Re-Listing

NTD

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1.19
1.10
Record 1H EPS
0.99 0.95 0.91
0.85
0.79 0.75 0.76
0.59
0.59
0.47
0.39
0.19
-0.01
2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15
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ROE

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25.0% 23.3%
20.9%
20.0%
17.2%
15.0%
16.7%
15.8%
13.7%
15.0%
10.9%
10.0%
5.0%
-1.0%
0.0%
2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15
-5.0%
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2Q15 Balance Sheet

	Selected items from Balance Sheet (Amount�NTD M) Cash Accounts receivable Inventory Total Current Assets Fixed Assets Total Assets Accounts Payable S-T Borrowings CPLTD Total Current Liabilities L-T Borrowings Total Liabilities Total Equity	2015/6/30	2015/6/30		Amt % 6,458 23% 9,122 32% 4,692 17% 21,255 75% 3,311 12% 28,299 100% 10,649 38% 3,159 11% 600 2% 17,789 63% 1,200 4% 19,291 68% 9,008 32% 60 80 37 17 119.5 68.2 18.20 2014/06/30
		Amt 6,871 11,450 5,756 25,479 5,583	%
			19% 32% 16% 71% 16%
		35,828	100%
		12,106 4,369 626 21,493 1,318	34% 12% 2% 60% 4%
		24,331 11,497	68% 32%
	Key Indices AR Turnover (days) AP Turnover (days) Inventory Turnover (days) Cash Conversion Cycle (days) Current Ratio (%) Total Liabilities -to-Assets Ratio (%) Book Value Per Share (NT$)	68 85 39 22 118.5 67.9 20.63

2Q15 Cash Flow

	NTD: MNS	1H15	1H14 545 994 600 (80) (1,011) 302 24 (284) (2,654) (323) (2,330) (2) 3,797 1 2,094 1,720 (18) 1,688 (16) 0 4,787 6,264
	From Operation	(1,133)
	- Income before tax - Depreciation and amortization - Notes and Account receivable - Notes and Account payable - Inventory - Financial instruments held for trading - Other Operating Sources / (Uses)	976 687 (376) (919) (617) (275) (609)
	From Investment	(666)
	- Fixed Assets - Acquisition of subsidiaries' shareholding - Other Investing Sources / (Uses)	(625) (39) (2)
	From Financing	1,912
	- Exercise of ESOP - S-T Borrowings - L-T Borrowings - Other Financing Sources / (Uses)	14 1,918 4 (24) 113 (55) 0 6,814
	Net Cash Position Change Effect of foreign currency exchange translation Exchange Rate Changes & Others Cash at beginning of year
	Ending Cash Balance	6,864

3Q15 Outlook

• Top-line & Gross Margin:

• 2H better than 1H Q3 better than Q2

• Expecting record top-line & EPS in 2015

• Product mix: Audio (+) Mobile Device (+) PC peripherals & Business Equip. rev to sustain

• � CCM: Broader customer base & higher wallet share

• Major Audio customers’ new projects to mass production

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Thank you!

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Safe Harbor Notice

– We have made forward-looking statements in the presentation. Our forward-looking statements contain information regarding, among other things, our financial conditions, future expansion plans and business strategies. We have based these forward-looking statements on our current expectations and projections about future events. Although we believe that these expectations and projections are reasonable, such forward-looking statements are inherently subject to risks, uncertainties, and assumptions about us

– We undertake no obligation to publicly update or revise any forwardlooking statements whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking events in the conference might not occur and our actual results could differ materially from those anticipated in these forwardlooking statements.

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