TechFaith Reports Third Quarter 2012 Financial Results

            TechFaith Reports Third Quarter 2012 Financial Results

PR Newswire

BEIJING, Nov. 21, 2012

BEIJING, Nov. 21, 2012 /PRNewswire/ -- China TechFaith Wireless Communication
Technology Limited (NASDAQ:CNTF) ("TechFaith" or the "Company") today
announced its unaudited financial results for the third quarter ended
September 30, 2012.

For the third quarter of 2012, TechFaith reported revenue of US$31.5 million
compared to US$32.4 million in the second quarter of 2012 and US$80.6 million
in the third quarter of 2011. This is in line with the Company's prior
guidance for third quarter 2012 revenue to be in the range of US$30.0 million
to US$35.0 million. Gross profit for the third quarter of 2012 was US$7.2
million compared to US$7.3 million in the second quarter of 2012. Gross margin
for the third quarter increased slightly to 22.8% compared to 22.6% in the
previous quarter. Net income attributed to TechFaith for the third quarter of
2012 was US$0.9 million or US$0.02 per basic and diluted weighted average
outstanding ADS, compared to a net loss of US$0.7 million or US$0.01 loss per
basic and diluted weighted average outstanding ADS in the second quarter of
2012.

Miss Ouyang Yuping, TechFaith's Chief Financial Officer, said, "The third
quarter developed as expected with a favorable mixed product shipment. Our
operating expenses were reduced to US$5.1 million in the third quarter of 2012
from US$8.3 million in the second quarter of 2012. We had lower bad debt
expense in the third quarter and lower selling and marketing expenses compared
to the previous quarter. While we are starting to see some stability, we
remain cautious, given the continued challenging economic environment and
uncertain macro demand picture."

Mr. Deyou Dong, President and Chief Operating Officer of TechFaith, said, "We
remain focused on developing unique mobile devices targeting certain niche and
enterprise segments, which is important given the positive impact on
TechFaith's revenue and margins. Our sales team continues to work closely with
both local and regional customers to provide tailored solutions. As just one
example, during the third quarter of 2012, we benefitted from shipments of our
TITAN model to the European and Southeast Asian market."

Mr. Defu Dong, Chairman and Chief Executive Officer of TechFaith, said, "We
have enhanced the integration among our applications, software and hardware to
better target current market opportunities. We also continue to develop our
motion games, mobile games and Disney theme games. We have extensive
intellectual property in this area. Our focus on intellectual property helps
differentiate our products in a crowded market and helps us add value to
customer-tailored solutions. We are also working to further grow our user base
in the Internet segment as it provides even greater opportunities for our
strategy. We believe this will bring us added synergies and eventual business
growth."

Fourth Quarter of 2012 Outlook

The below forecast is TechFaith's current and preliminary view, which is
subject to change. TechFaith currently expects total revenue for the fourth
quarter of 2012 to be in the range of US$30.0 million to US$35.0 million.

Investor Conference Call / Webcast Details

TechFaith will hold a conference call on Wednesday, November 21, 2012 at 8:00
a.m. U.S. Eastern Time (9:00 p.m. Wednesday, November 21, 2012 in Beijing).
The dial-in is +1-617-614-3453 or +1-800-510-9691, with passcode 67589141. A
live webcast of the conference call will also be available on TechFaith's
website at www.techfaithwireless.com.

A replay of the call will be available approximately 2 hours after the
conclusion of the live call by telephone at +1-617-801-6888, with passcode
11634361. A webcast replay will also be available at
www.techfaithwireless.com.

About TechFaith

TechFaith (NASDAQ: CNTF) has three primary businesses. The Company is a
leading global mobile solutions provider for the global mobile handsets market
(previously called the ODP (Original Developed Product) business)). The
Company is a leading developer of specialized mobile phones for differentiated
market segments, including the rapidly growing smartphone market targeting
wireless mobile phone network operators and end users; the Company also serves
sports enthusiasts with a tailored line under the Jungle brand and the teen
market under licensed brands. Under the Company's 17FOX brand, the Company has
built a leading intellectual property based motion gaming business ranging
from Bluetooth-enabled motion gaming controllers and software to a planned
proprietary set-top motion game box. For more information, please visit
www.techfaithwireless.com, www.17vee.com and www.798game.com.

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are
made under the "safe harbor" provisions of the U.S. Private Securities
Litigation Reform Act of 1995. These forward-looking statements can be
identified by terminology such as "will," "expects," "anticipates," "future,"
"intends," "plans," "believes," "estimates," "confident," "outlook" and
similar statements. Among other things, the business outlook and strategic and
operational plans of TechFaith and management quotations contain
forward-looking statements. TechFaith may also make written or oral
forward-looking statements in its periodic reports to the U.S. Securities and
Exchange Commission on Forms 20-F and 6-K, etc., in its annual report to
shareholders, in press releases and other written materials and in oral
statements made by its officers, directors or employees to third parties.
Statements that are not historical facts, including statements about
TechFaith's beliefs and expectations, are forward-looking statements.
Forward-looking statements involve inherent risks and uncertainties. A number
of important factors could cause actual results to differ materially from
those contained in any forward-looking statement. Potential risks and
uncertainties include, but are not limited to, those risks outlined in
TechFaith's filings with the U.S. Securities and Exchange Commission,
including its annual report on Form 20-F. TechFaith does not undertake any
obligation to update any forward-looking statement, except as required under
applicable law.

 

CHINA TECHFAITH WIRELESS COMMUNICATION TECHNOLOGY LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In Thousands of U.S. Dollars, except share and per share/ADS data and unless
otherwise stated)
                Three Months  Three Months Ended       Nine Months Ended
                Ended
                June 30,      September 30,            September 30,
                2012          2012        2011         2012        2011
Revenues:
ODP             $13,470       $13,311     $52,348      $45,726     $162,073
Brand name      11,785        11,329      17,168       38,649      48,261
phone sales
Game            7,151         6,909       11,131       22,256      31,779
Total net       $32,406       $31,549     $80,647      $106,631    $242,113
revenues
Cost of
revenues:
ODP             $13,661       $12,222     $44,423      $43,394     $129,929
Brand name      7,680         7,783       10,379       25,310      29,364
phone sales
Game            3,746         4,337       6,731        12,569      16,663
Total cost of   $25,087       $24,342     $61,533      $81,273     $175,956
revenues
Gross Profit    $7,319        $7,207      $19,114      $25,358     $66,157
Operating
expenses:
General and     $1,512        $669        $3,126       $3,637      $14,464
administrative
Research and    2,179         2,192       3,687        7,333       9,721
development
Selling and     4,626         1,545       4,425        11,527      9,544
marketing
Impairment of
intangible      -             702         -            702         -
assets
Impairment of   -             -           606          -           606
goodwill
Total operating $8,317        $5,108      $11,844      $23,199     $34,335
expenses
Government      -             99          111          188         188
subsidy income
Other operating 269           281         175          649         1,258
income
(Loss) income   $(729)        $2,479      $7,556       $2,996      $33,268
from operations
Interest income 635           523         362          1,604       977
Investment      -             -           -            -           883
income
Other income    4             (313)       3            (309)       4
(expenses)
Change in fair
value of put    -             (90)        -            (90)        -
option
(Loss) income
before income   $(90)         $2,599      $7,921       $4,201      $35,132
taxes
Income tax      (278)         (1,518)     (4,249)      (3,488)     (8,783)
expenses
Net (loss)      $(368)        $1,081      $3,672       $713        $26,349
income
Less: net
income
attributable to (346)         (205)       (395)        (964)       (1,907)
the
noncontrolling
interest
Net
income(loss)    $(714)        $876        $3,277       $(251)      $24,442
attributable to
TechFaith
Net (loss)
income
attributable to
TechFaith per
share
  Basic         $(0.00)       $0.00       $0.00        $(0.00)     $0.03
  Diluted       $(0.00)       $0.00       $0.00        $(0.00)     $0.03
Net income
(loss)
attribute to
TechFaith per
ADS
  Basic         $(0.01)       $0.02       $0.06        $(0.00)     $0.46
  Diluted       $(0.01)       $0.02       $0.06        $(0.00)     $0.46
Net income      $(368)        $1,081      $3,672       $713        $26,349
Other
comprehensive
income (loss),
net of tax
Foreign
currency        (3,093)       4,008       3,634        642         9,066
translation
adjustment
Comprehensive   (3,461)       5,089       7,306        1,355       35,415
income (loss)
Less:
Comprehensive
income          (159)         (482)       (395)        (1,043)     (1,907)
attributable to
noncontrolling
interest
Comprehensive
income(loss)    $(3,620)      $4,607      $6,911       $312        $33,508
attributable to
TechFaith
Weighted
average shares
outstanding
  Basic         794,003,193   794,003,193 794,003,193  794,003,193 794,003,193
  Diluted       794,003,193   794,003,193 794,003,193  794,003,193 794,003,193

 

CHINA TECHFAITH WIRELESS COMMUNICATION TECHNOLOGY LIMITED
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands of U.S. Dollars)
                                         September 30,  June 30,  December 31,
                                         2012           2012      2011
Assets
Current assets:
Cash and cash equivalents                $265,044       $252,033  $250,637
Restricted cash                          -              26        -
Accounts receivable                      4,552          2,246     6,715
Inventories                              6,486          8,771     7,984
Prepaid expenses and other current       20,528         14,520    17,560
assets
Deferred tax assets-current              226            222       207
Total current assets                     $296,836       $277,818  $283,103
Plant, machinery and equipment, net      $44,214        $44,926   $48,977
Land use rights, net                     10,607         10,547    10,755
Construction in progress                 26,688         22,757    21,002
Acquired intangible assets, net          6,306          7,563     2,327
Goodwill                                 1,242          1,242     1,242
Deferred tax assets-noncurrent           1              1         3
Total assets                             $385,894       $364,854  $367,409
Liabilities and shareholders' equity
Current liabilities:
Accounts payable (including accounts
payable of the consolidated variable
interest entities without recourse to
China Techfaith Wireless Communication   10,176         9,414     8,792
Technology Limited, $nil, $nil and $nil
as of September 30, 2012, June 30, 2012
and December 31, 2011 respectively)
Accrued expenses and other current
liabilities(including accrued expenses
and other current liabilities of the
consolidated variable interest entities
without recourse to China Techfaith      14,364         15,639    21,721
Wireless Communication Technology
Limited, $684, $831 and $837 as of as of
September 30, 2012, Jun 30, 2012 and
December 31, 2011 respectively)
Advance from customers(including advance
from customers of the consolidated
variable interest entities without
recourse to China Techfaith Wireless     9,324          8,681     8,492
Communication Technology Limited, $217
and $212 and $202 as of September 30,
2012, June 30, 2012 and December 31,
2011 respectively)
Deferred revenue(including deferred
revenue of the consolidated variable
interest entities without recourse to
China Techfaith Wireless Communication   4,584          2,111     219
Technology Limited, $nil, $nil and $nil
as of September 30, 2012, June 30, 2012
and December 31, 2011 respectively)
Income tax payable (including income tax
payable of consolidated variable
interest entities without recourse to
China Techfaith Wireless Communication   660            439       1,804
Technology Limited, $21, $23 and $21 as
of September 30, 2012, June 30, 2012 and
December 31, 2011 respectively)
Short-term loan (including short-term
loan of the consolidated variable
interest entities without recourse to
China Techfaith Wireless Communication   15,350         5,350     -
Technology Limited, $nil, $nil and $nil
as of September 30, 2012, June 30, 2012
and December 31, 2011 respectively)
Total current liabilities                $54,458        $41,634   $41,028
Long-term loan                           290            290       290
Deferred tax liability-noncurrent        81             89        106
Total liabilities                        $54,829        $42,013   $41,424
Shareholders' equity
Paid in capital                          $16            $16       $16
Additional paid-in capital               142,549        142,268   141,667
Accumulated other comprehensive income   44,149         40,418    43,597
Statutory reserve                        22,631         22,631    22,631
Retained earnings                        97,021         96,145    97,272
Total Techfaith shareholders' equity     $306,366       $301,478  $305,183
Noncontrolling interest                  $24,699        $21,363   $20,802
Total shareholders' equity               $331,065       $322,841  $325,985
Total liabilities and shareholders'      $385,894       $364,854  $367,409
equity

SOURCE China TechFaith Wireless Technology Limited

Website: http://www.techfaithwireless.com
Website: http://www.17vee.com
Website: http://www.798game.com
Contact: China Techfaith Wireless Communication Technology Limited, Jay Ji,
+86-10-5822-8390, ir@techfaith.cn or Global IR Partners, David Pasquale,
+1-914-337-8801, cntf@globalirpartners.com for China Techfaith Wireless
Communication Technology Limited