China Techfaith Wireless (NASDAQ:CNTF)

First Quarter 2012 Results

• For the first quarter of 2012, TechFaith reported net revenue of US$42.7 million compared to US$81.7 million in the fourth quarter of 2011 and US$78.7 million in the first quarter of 2011.
• Net loss attributed to TechFaith for the first quarter of 2012 was US$0.4 million, or a US$0.01 loss per basic and diluted weighted average outstanding ADS, compared to net income of US$2.7 million, or US$0.05 per basic and diluted weighted average outstanding ADS in the fourth quarter of 2011, and net income of US$13.8 million or US$0.26 per basic and diluted weighted average outstanding ADS in the first quarter of 2011.

Ms. Ouyang Yuping, TechFaith's Chief Financial Officer, said, "We had an extremely challenging quarter for our business as lower demand in our Original Developed Product (ODP) segment, combined with our fixed operating costs structure, resulted in a net loss for the quarter. Our operating structure is able to support revenues considerably higher than US$100 million per quarter, which results in absorption issues with the current lower revenue levels. We are working to better align our resources to the current business environment, including potential cost reduction measures. "

Mr. Deyou Dong, President and Chief Operating Officer of TechFaith, said "Our focus is on continuing to develop commercially attractive mobile phones and phones targeting niche segments, like our ruggedized outdoor smart phones. We will continue to work to expand our sales volumes through our unique ruggedized smart phones and our branded mobile phones business which can contribute to our long-term strategy."

Mr. Defu Dong, Chairman and Chief Executive Officer of TechFaith, said, "For our game business, we intend to focus on strengthening and building up our customer base. We have successfully navigated business cycles before and are confident we can adjust our business to current demand levels."

Second 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 second quarter of 2012 to be in the range of US$32.0 million to US$36.0 million.

BEIJING, March 29, 2012 /PRNewswire-Asia/ -- China TechFaith Wireless Communication Technology Limited (NASDAQ: CNTF) ("TechFaith" or the "Company") today announced it will further expand shipments of its Android smartphones into Hong Kong, South Africa and Latin America during the first half of 2012.

Specifically, the Company is scheduled to ship its Titan model, a rugged Android smartphone, to distribution partners in Hong Kong and South Africa in the first and second quarters of 2012, respectively.

TechFaith is also scheduled to ship its rugged Titan Android smartphone to a leading Wireless Mobile Phone Network Operator in Latin America in the second quarter of 2012.

TechFaith's Titan is a WCDMA/GSM 3.5G rugged Android Smart phone featuring 3.5 inch WVGA capacitive touch screen, shock resistant, 1 meter water resistant, 5.0 mega pixel rear camera, supports dual sim cards, WIFI and more.

Mr. Deyou Dong, President and COO of TechFaith, said, "We continue to see steady demand for our rugged smartphone long after its formal introduction. The model has established a longer than typical lifecycle driven by wireless mobile phone mobile carriers, distribution partners and end users because of its unique value proposition which addresses a market need that remains unserved. Our Titan is a rugged but sleek, fully functioning smartphone. Its Android architecture gives users the high quality voice they are used to with the rich functionality of a smartphone. Our ability to consistently offer value added and unique products clearly differentiates us in the market worldwide and provides us with a distinctive advantage."

Fourth Quarter 2011 Results

• For the fourth quarter of 2011, TechFaith reported net revenue of US$81.7 million, a 6.2% increase compared to US$76.9 million in the fourth quarter of 2010
• Net income attributed to TechFaith for the fourth quarter of 2011 was US$2.7 million or US$0.05 per basic and diluted weighted average outstanding ADS, compared to US$8.9 million or US$0.17 per basic and diluted weighted average outstanding ADS in the fourth quarter of 2010.

Ms. Ouyang Yuping, TechFaith's chief financial officer, said, "We continue to focus on business opportunities in the ODP, branded mobile phone and gaming markets. We are working to put the appropriate resources in place to support the areas of our business that have the highest potential, while also actively managing our operating expenses. Our strong balance sheet gives us the continued ability to support the long-term business initiatives and strategy central to our long-term success, despite continued expected near-term market weakness."

Mr. Deyou Dong, President and chief operating officer of TechFaith, said, "We have made considerable headway in our efforts to establish TechFaith as a globally recognized brand. Our success is evidenced by the geographic mix of our revenue 2011, with shipments of our phones to diverse markets including China, South East Asia, Europe, Latin America and Japan. We continue to gain attention due to the value prospect we offer with tailored phones and compelling enterprise solutions. Our history of design expertise allows us to move quickly and to deliver the technically sound, tailored solutions that customers are seeking."

First Quarter 2012 Outlook

The following forecast reflects the expected material impact of seasonality in the first quarter of 2012. The forecast is TechFaith's current and preliminary view, which is subject to change. TechFaith currently expects total revenue for its ODP, branded and gaming businesses to be in the range of US$41 million to US$45 million in the first quarter of 2012. The anticipated decline from the fourth quarter of 2011 and recent revenue levels is driven primarily by the expected material impact of seasonality in the first quarter, combined with higher competition and expected lower overall demand for its ODP and branded mobile phone business.

Third Quarter 2011 Results

• For the third quarter of 2011, TechFaith reported net revenue of US$80.6 million, a 17% increase compared to US$68.6 million in the third quarter of 2010
• Net income attributed to TechFaith for the third quarter of 2011 was US$3.3 million or US$0.06 per basic and diluted weighted average outstanding ADS, compared to US$4.5 million or US$0.09 per basic and diluted weighted average outstanding ADS in the third quarter of 2010

Ms. Ouyang Yuping, TechFaith's CFO, said, "We were able to achieve revenue above the high-end of our prior guidance in a weaker global economic environment and under the increased pricing pressure in several of the markets we serve. Higher demand levels for Android-based mobile phones and continued developments in our branded mobile phone business and motion gaming business helped us to partially offset the market pressure. We are pleased that we were able to keep our gross margin relatively stable at 24% despite such uncertain market conditions. This performance reflects the success of our higher margin branded mobile phone and motion gaming businesses. In addition, we remained focused on cost control and operating efficiencies, which helped us to further strengthen our balance sheet due to the continued healthy cash flow from our operations. We ended the third quarter of 2011 with US$4.46 per ADS in cash and cash equivalents compared to US$4.17 per ADS at the end of the second quarter of 2011."

Mr. Deyou Dong, President and COO of TechFaith, said, "We are pleased with the continued success we are having in various markets worldwide. Our ability to tailor mobile solutions in the enterprise and branded market is a competitive advantage for TechFaith, which led to additional orders for our leading Android-based smartphone models in South East Asia, Latin America, Japan and domestic China market. We further strengthened our product line-up with the launching of several innovative new models, including Titan, Tracker, PAD, Qphone and Eagle, in the third quarter of 2011. All are Android-based 3G smartphones. Additionally, we have leveraged the success of our TecFace-branded mobile phone business beyond China and extended into the international market with the well-received launching of new products and stronger marketing support. Our efforts have positioned TechFaith for long-term business success."

Fourth Quarter of 2011 Outlook

The fourth quarter 2011 outlook reflects TechFaith's current and preliminary view, which is subject to change. Based on current market conditions, the Company expects its revenue for the fourth quarter of 2011 to be in the range of US$78 million to US$81 million, with gross margin levels similar to those for the third quarter of 2011.

Mr. Defu Dong, Chairman and CEO of TechFaith, added, "We entered the fourth quarter in a very solid financial position which can help us navigate our course among continued market volatility. We continue to build momentum with customers in our mobile solutions business, branded mobile phone business and motion gaming business. We believe that our efforts would more readily translate to growth in our financial results when the broader market environment improves. We will remain conservative in our outlook and approach and maintain strict cost controls in light of the uncertain global economic environment. At the same time, we will continue to invest in the research and development and sales and marketing efforts that are critical to the support of our customers and brands while focusing on profitability. Strategic investments made in our business today will, we expect, fuel our growth when the market situation improves, as has happened in previous market cycles."

Second Quarter 2011 Results

• For the second quarter of 2011, TechFaith reported net revenue of US$82.8 million, a 26% increase compared to US$65.5 million in the second quarter of 2010
• Income from operations for the second quarter of 2011 was US$10.0 million, an 18% increase compared to US$8.5 million in the same quarter last year
• Net income attributed to TechFaith for the second quarter of 2011 was US$7.3million or US$0.14 per basic and diluted weighted average outstanding ADS, compared to US$7.5 million or US$0.16 per basic weighted average outstanding ADS and US$0.11 per diluted weighted average outstanding ADS in the second quarter of 2010, compared to US$13.8 million or US$0.26 per basic and diluted weighted average outstanding ADS in the first quarter of 2011

BEIJING, June 8, 2011 /PRNewswire-Asia/ -- China TechFaith Wireless Technology Limited (NASDAQ: CNTF) ("TechFaith") today announced it will launch six Android-based smartphones in the third quarter 2011 under its TecFace brand.

First Quarter Results:

• For the first quarter of 2011, TechFaith reported net revenue of US$78.7 million, a 29% increase compared to US$60.9 million in the first quarter of 2010, and a 2% increase compared to US$76.9 million in the fourth quarter of 2010.
• Income from operations for the first quarter of 2011 was US$15.8 million, a 151% increase compared to US$6.3 million in the same quarter last year, and a 31% increase compared to US$12.1 million in the previous quarter.
• Net income attributed to TechFaith for the first quarter of 2011 was US$13.8 million or US$0.26 per basic and diluted weighted average outstanding ADS, compared to US$7.1 million or US$0.15 per basic weighted average outstanding ADS and US$0.07 per diluted weighted average outstanding ADS in the first quarter of 2010, compared to US$8.9 million or US$0.17 per basic and diluted weighted average outstanding ADS in the fourth quarter of 2010.

Ms Ouyang Yuping, TechFaith's CFO, said "This was another strong quarter for us. Our gross margin of 32% reflects the continued success in our sales of higher margin products to our ODP customers, growth in our branded mobile phone business and growth in our gaming business. Continued success in our brand name phone sales business was led by strong demand from customers in the China market. Importantly, we continue to strengthen our financial position in order to securely support the Company's future growth opportunities in the domestic China market and worldwide.  We ended the first quarter of 2011 with approximately US$4.06 per ADS in cash and cash equivalents."

The below forecast reflects TechFaith's current and preliminary view, which is subjected to change. TechFaith currently expects revenue for the second quarter of 2011 to be in the range of US$82.0 million to US$84.0 million, with gross margin levels similar to the first quarter of 2011.

BEIJING, April 7, 2011 /PRNewswire-Asia/ -- It was announced today that China TechFaith Wireless Technology Limited has received approval from the Beijing Daxing Government for the acquisition of approximately 140,000 square meters (approximately 34.5 acres) of land in XiHong Men, Daxing County for industrial purpose. The total value of the contract is value at approximately RMB 54 million (approximately US$8.25 million).

Mr. Defu Dong, Chairman and CEO of TechFaith, said, "Securing this additional tract of land gives us the flexibility needed to add to our state-of-the-art research and development capabilities, along with new trial production lines, and a sales and marketing center.  These expanded capabilities will help support the continued growth in our business as we continue to build TechFaith into a much larger company both domestically and internationally."

Fourth Quarter Highlights:

• For the fourth quarter of 2010, TechFaith reported net revenue of US$76.9 million, a 29% increase compared to US$59.8 million in the fourth quarter of 2009, due to strong growth of QIGI branded mobile sales, and strong growth in the Company's gaming business.
• Gross profit for the fourth quarter of 2010 was US$21.5 million, a 124% increase compared to US$9.6 million in the same quarter last year, due to the strong growth in the Company's QIGI branded mobile phone sales and its gaming business, both of which are higher gross margin businesses.
• As a result, gross margin for the fourth quarter of 2010 was 28.0% compared to 16.1% in the same quarter of 2009.
• Income from operations for the fourth quarter of 2010 was US$12.1 million -- a Company record level -- representing a 317% increase compared to US$2.9 million in the fourth quarter of 2009, due the above noted growth in the Company's higher gross margin businesses.
• Net income attributed to TechFaith for the fourth quarter of 2010 was US$8.9 million or US$0.17 per basic and diluted weighted average outstanding ADS, compared to US$3.1 million or US$0.07 per basic and diluted weighted average outstanding ADS in the fourth quarter of 2009.

Mr. Deyou Dong, President and COO of TechFaith in charge of the Company's mobile phone business, said, "We are pleased with the success of our mobile phone business. We continue to gain traction by supporting strong customer demand for our customized ODP mobile phones, QIGI branded phones for enterprise users and Disney phones for the consumer market. Of note, we are also seeing growth in diverse markets for our Android based smartphones, including China, India, Latin America, Europe and the United States."

The below forecast reflects typical seasonality in the first quarter and is TechFaith's current and preliminary view, which is subjected to change. TechFaith currently expects continued growth in its ODP, branded and gaming businesses, with total revenue in the first quarter of 2011 to be in the range of US$78.0 million to US$81.0 million.

BEIJING, Feb. 1, 2011 /PRNewswire-Asia/ -- China TechFaith Wireless Communication Technology Limited today announced that its wholly owned subsidiary, QiGi Future Technology Co., Ltd. (Beijing) ("QiGi") won an order from China Telecom and another order from the Jilin provincial police department. Initial units started shipping in January.

Under the first order, China Telecom selected QiGi for an EVDO-based mobile phone, specialized with infrared scanning capabilities for the enterprise customer segment. The first 5,000 units have been shipped to China Telecom. Under the second, initial shipments under the 12,550 unit order to the Jilin provincial police department started in January. The handset was jointly developed by QiGi and China Telecom.  The handset is customized for use by police departments, with state-of-the art capabilities, including finger print identification, identity card scanning, built-in printing and a payment function.

For the third quarter of 2010, TechFaith reported 

• net revenue of US$ 68.6 million (RMB 464.3 million), a 30% increase compared to US$ 52.8 million (RMB 360.7 million) in the third quarter of last year.
• Gross margin for the third quarter of 2010 was 24% compared to 19% in the same quarter last year. Income from operations for the third quarter of 2010 was US$ 9.0 million (RMB 60.9 million), a 61% increase compared to US$ 5.6 million (RMB38.3 million) in the same quarter last year.
• Net income attributed to TechFaith for the third quarter of 2010 was US$ 4.3 million (RMB 29.1 million), compared to a loss of US$ 3.4 million (RMB 23.2 million) in the same quarter last year.
• Third quarter of 2010 results reflect the non-cash impact of a US$ 3.3 million loss due to IDG's conversion in the quarter of US$ 6.25 million convertible bonds into TechFaith ordinary shares and the remaining US$3.75 million into shares of TechFaith's gaming subsidiary 798 Entertainment, compared to a US$9.2 million non-cash loss in the same quarter last year as a result of change in fair value of derivatives associated with the convertible note.

• Non-GAAP EPS was $0.16 vs. $0.13

Ms. Ouyang Yuping TechFaith's CFO, said, "Revenue in the third quarter exceeded our prior guidance and reached another record level for TechFaith. In addition to the higher revenue levels, the successful implementation of our business strategy is resulting in a more stable gross margin. Continued growth in our branding business, QIGI, was led by strong demand for existing phone models, along with initial shipments of two new high end smartphone models into the China market. TechFaith remains in a position of operating strength with continued growth expected in each of our operating units, along with a continued strong balance sheet with approximately US$3.70 per ADS in cash and cash equivalents."

Mr. Deyou Dong, President and COO of TechFaith in charge of the company's mobile business said, "Our focus in the mobile business has been on market expansion and profitable unit growth.  To achieve this we have cooperated with global leading brands, built our enterprise business and acquired the QIGI branded phone business.   In the case of QIGI, total shipment volume increased 20% in the third quarter of 2010 compared to the second quarter of 2010. This improvement was driven by growth in the domestic smartphone market and demand from enterprise mobile phones users.  QIGI's fast growth is in line with our expectations and we expect our branded mobile phone business to become one of our major business segments.  To support the expected growth, we recently announced the planned addition of a major 10 million-unit capacity smartphone production line.  As for our ODP business, we expect continued stability in revenue and gross margin to continue from the China, India, South East Asia, Middle East and Latin America Markets."

Fourth Quarter 2010 Outlook

The below forecast reflects TechFaith's current and preliminary view, which is subjected to change. TechFaith currently expects revenue for the fourth quarter of 2010 to be in the range of US$ 74.0 million to US$ 77.0 million, with gross margin levels similar to the third quarter of 2010.

Looking forward, Mr. Defu Dong, Chairman and CEO of TechFaith added: "We expect further sequential growth based on the strength of our core ODP, branding and expanding gaming business, with increased business momentum in 2011."  

TechFaith currently expects revenue to be in the range of US$60 million to US$62 million for the first quarter of 2010. This forecast reflects TechFaith's current and preliminary view, which is subject to change.

The company reported first quarter 2008 sales of $48.7 million.

^a The above forecasts reflect the Company's current and preliminary views and are therefore subject to change. Please refer to the Company's Safe Harbor Statement (usually in press releases) for the factors that could cause actual results to differ materially from those contained in any forward-looking statement.

^a Company forecasts reflect the Company's current and preliminary view and are subject to change.

The above forecasts reflect the Company's current and preliminary view and are therefore subject to change. Please refer to the Company's Safe Harbor Statement (usually in press releases) for the factors that could cause actual results to differ materially from those contained in any forward-looking statement.

Guidance Report:

The Company expects revenues in the fourth quarter of 2008 to be in the range of US$43 million to US$48 million. The Smartphone products in China are the major revenue drivers for the fourth quarter and the overseas markets including South East Asian, European Union and Latin America will continue to drive revenue. TechFaith expects operating costs to be significantly lower in the fourth quarter due to cost saving measures and the completion of the corporate restructuring.