Primax — Call Transcript 2015

May 25, 2015

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Primax Electronics Ltd. (4915 TT)

1Q15 Earnings Conference Call

CFO Yi Pin Lee

14 May 2015

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1Q15 Result

Record Q1 Revenue

Amount�NTD M Net Sales COGS Gross Profit Gross Margin Operating Expense Operating Expense % Operating Income Operating Margin Non-operating Items Income before Tax Income Tax Net Income Net Margin Net income attributed to Primax EPS (NT$)	Q1 15		Q4 14	Q1 14	QoQ	YoY 11.7% -1.2% 0.2% -24.9% -1.4% 10.1% 9.5% -0.1%
	12,958		13,435	11,603	-3.6%
	11,526		11,849 1,586	10,178 1,425
	1,432
	11.1%		11.8%	12.3%	-0.8%
	1,059		1,263 9.4% 323 2.4% 102 425 85	927 8.0% 497 4.3% (51) 446 101	-1.2% 15.5% 0.5% 15.6%
	8.2%
	373
	2.9%
	118
	492
	114
	378		340	345	11.1%
	2.9%		2.5% 332 0.76	3.0% 323 0.75	0.4%
	368
	0.85

Quarterly Sales

Record YoY

Record 2[nd] High

Consecutive 3 Years Record Q1

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16,000
NTD:Millions
13,580 13,622 12,948
14,000 13,435
11,064
11,603
12,000
10,359
10,583
10,315
10,000
8,000
6,000
4,000
2,000
0
1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15
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Gross Profit

Record YoY NTD:Millions Record High

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1,626
1,582 1,586
1,500 1,425 1,432
1,200
1,085
1,038
971
900
660
600
300
0
1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15
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Gross Margin

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14.0%
12.3%
11.9% 11.1%
11.8%
11.6%
12.0%
10.5%
10.1%
10.0%
9.2%
8.0%
6.0%
6.0%
4.0%
1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15
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Operating Profit

Record YoY Record 2[nd] High

600 500 400 300 200

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NTD:Millions
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488 522
497
373
323
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260 250 233 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15

100

0

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-100

-49

Operating Margin

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5.0%
3.8%
4.0% 4.3% 3.6%
2.9%
2.5%
3.0%
2.4% 2.4%
2.3%
2.0%
1.0%
0.0%
1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15
-0.4%
-1.0%
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EPS

Record YoY Since Re-Listing Record High Since Re-Listing

NTD

1.19 1.10 0.99 0.95 0.85 0.79 0.75 0.76 0.59 0.59 0.54 0.47 0.39 0.19 -0.01 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15

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1Q15 Statement of Financial Position

	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	1Q15	1Q15		Amt % 6,264 24% 7,682 29% 4,413 17% 19,272 73% 3,479 13% 26,546 100% 9,687 37% 2,926 11% 600 2% 15,990 60% 1,200 5% 17,514 66% 9,032 34% 56 80 38 14 120.5 66.0 18.27 1Q14
		Amt 6,864 10,299 5,534 24,201 5,016	%
			20% 30% 16% 71% 15%
		33,919	100%
		11,707 4,209 604 19,933 1,328	35% 12% 2% 59% 4%
		21,984 11,935	65% 35%
	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$)	63 85 39 18 121.4 64.8 21.64

1Q15 Statement of Cash Flows

	Amount�NTD M	1Q15	1Q14 342 446 295 1,399 (1,973) 601 (427) (2,474) (142) (2,330) (2) 3,579 1 1,861 1,720 (2) 1,447 31 4,787 6,264
	From Operation	(1,149)
	- Income before tax - Depreciation and amortization - Notes and Account receivable - Notes and Account payable - Inventory - Other Operating Sources / (Uses)	492 340 759 (1,307) (310) (1,123)
	From Investment	(580)
	- Fixed Assets - Acquisition of Tymphany's 70% shareholding - Other Investing Sources / (Uses)	(540) (39) (1)
	From Financing	1,803
	- Exercise of ESOP - S-T Borrowings - L-T Borrowings - Other Financing Sources / (Uses)	14 1,754 (7) 41 73 (24) 6,814
	Net Cash Position Change Effect of foreign currency exchange translation Cash at beginning of year
	Ending Cash Balance	6,864

2Q15 Outlook

• Continuous Top-Line Growth Earnings Structure Further Improving

• Product Mix: Pc Peripherals (+) Mobile Device (+) Businiss Equipment & Audio Sustain

• High Entry Barrier Pc Peripherals Product Strong Demand & New Account Add-In Following By New Project Mass Production

• • CCM OIS Product To Perform Broader Customer Base & Higher Wallet Share

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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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