Primax — Interim / Quarterly Report 2014

Nov 12, 2014

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Primax Electronics Ltd. (4915 TT)

3Q 2014 Earnings Conference COO Brian Yang CFO Yi Pin Lee

13 Nov 2014

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Record 2[nd] High Revenue 3Q14 Result

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Amount � NTD M Q3 14 Q2 14 Q3 13 QoQ YoY
Net Sales 13,622 13,580 10,359 0.3% 31.5%
COGS 11,996 11,998 9,274
Gross Profit 1,626 1,582 1,085
Gross Margin 11.9% 11.6% 10.5% 0.3% 1.5%
Operating Expense 1,104 1,094 825
Operating Expense % 8.1% 8.1% 8.0% 0.1% 0.1%
EBITDA 825 802 542 2.9% 52.2%
Operating Income 522 488 260 6.9% 100.8%
Operating Margin 3.8% 3.6% 2.5% 0.2% 1.3%
Non-operating Items 106 60 28
Income before Tax 628 548 288 14.5% 118.1%
Income Tax 130 122 86
Net Income 497 426 202 16.7% 146.3%
Net Margin 3.7% 3.1% 2.0% 0.5% 1.7%
EPS (NT$) 1.10 0.95 0.47
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Quarterly Sales

� 3Q14 31.5% YoY

NTD:Millions

� YTD 24.2% YoY

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16,000
13,622
13,580
14,000
11,688
11,603
12,000 10,583 11,064
10,709
10,315 10,359
10,000
8,000
6,000
4,000
2,000
0
3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14
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Gross Profit (Margin)

NTD:Millions

Earnings structure fundamentally changed from old fashioned peripherals to mobility and audio

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11.7% 10.1% 10.5% 12.3% 11.6% 11.9%
9.2%
9.6%
6.0%
1,626
1,582
1,500 1,425
1,371
1,200
1,085
1,027 1,038
971
900
660
600
300
0
3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14
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Operating Profit (Margin) Record High Operating Income

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NTD:Millions
4.3% 4.3% 3.6% 3.8%
2.4% 2.3% 2.5%
2.4%
-0.4%
600
522
506
497 488
500
400
300 260 260
250
233
200
100
0
3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14
-100
-49
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• 2014 Quarterly Performance Review Q1 Q2 Q3 Q4 2015!

• Q1 Q2 Q3 � Record Q1 � Record Q2 � Record 2[nd] Revenue Revenue High Revenue

• � Record Q1 � Record Q2 � Record Operating Income Operating Income Operating Income

• � Record 2[nd] Q1 � Record Q2 � Record Net Income Net Income Net Income

• Record 2[nd] Q1 EPS � Record 2[nd] Q2 EPS � Record 2[nd] High EPS

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3Q14 Statement of Financial Position

	Selected items from Balance Sheet (Amount�NTD M) Cash Accounts receivable Inventory Total Current Assets Total Assets Accounts Payable S-T Borrowings CPLTD Total Current Liabilities L-T Borrowings Total Liabilities Total Equity	Q3 14	Q3 14		Q3 13
		Amt 6,779 10,245 4,667 22,648	%		Amt % 4,927 23% 7,434 34% 4,439 20% 17,532 81%
			23% 34% 16% 76%
		29,669	100%		21,821 100%
		11,503 3,208 600 18,722 900	38% 11% 2% 63% 3%		8,863 41% 2,611 12% 0 0% 14,168 65% 0 0%
		20,036 9,633	68% 32%		14,360 66% 7,461 34%
	Key Indices AR Turnover (days) AP Turnover (days) Inventory Turnover (days) Cash Conversion Cycle (days) Current Ratio (%) Total Liabilities -to-Assets Ratio (%)	62 82 36 17 121.0 67.5			60 84 43 19 123.7 65.8
	Book Value Per Share (NT$)	19.57			17.30

3Q14 Statement of Cash Flows

	Amount�NTD M	Q3 14 YTD	Q3 13 YTD 982 929 850 (285) (680) 375 (207) (503) (488) 0 (15) 2,041 34 2,611 0 (647) 43 2,521 (7) 0 2,413
	From Operation	1,553
	- Income before tax - Depreciation and amortization - Notes and Account receivable - Notes and Account payable - Inventory - Other Operating Sources / (Uses)	1,622 896 (1,193) (156) 345 40
	From Investment	(2,884)
	- Fixed Assets - Intangible Assets - Fixed Assets Sales - Restricted Assets - Acquisition of Tymphany's 70% shareholding - Other Investing Sources / (Uses)	(551) (2,330) (3)
	From Financing	3,288
	- Exercise of ESOP - S-T Borrowings - L-T Borrowings - Cash Dividend - Other Financing Sources / (Uses)	10 2,143 1,420 (347) 62 1,957 36 0 4,787
	Net Cash Position Change Effect of foreign currency exchange translation Exchange Rate Changes & Others Cash at beginning of year
	Ending Cash Balance	6,779	4,927

4Q14 Outlook

• Sustainable order demand

• Solid earnings structure

• Product mix: Audio & PC Peripheral (+) Mobile Device (–) Business Equipment maintain

• 2014: to surpass historical top-line

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2015 Outlook

• 1Q15 outperforming light season

• 2015 continuous strong top-line growth

• Earnings structure further improving

• Top-line & bottom-line catalyst fundamentally changed from old fashioned peripherals to mobility and audio

• New PC peripherals plant in Chong Qin for preferable cost structure

• Mobile device, integrated audio expansion plan to bolster future growth

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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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