Click here to close now.


Mobile IoT Authors: Elizabeth White, Liz McMillan, Sanjay Zalavadia, Mehdi Daoudi, Jennifer Gill

News Feed Item

TechFaith Reports Second Quarter 2014 Financial Results

BEIJING, Aug. 19, 2014 /PRNewswire/ -- China TechFaith Wireless Communication Technology Limited (NASDAQ: CNTF) ("TechFaith" or the "Company") today announced unaudited financial results for the second quarter ended June 30, 2014.

For the second quarter of 2014, TechFaith reported net revenue of US$23.1 million compared to US$26.2 million in the first quarter of 2014. This is in line with the Company's previously issued guidance for the second quarter, which estimated revenue to be in the range of US$22 million to US$26 million. Revenue for the Company's Original Developed Product, or ODP, business was US$18.4 million, as compared to US$23.3 million in the first quarter of 2014. The 21.3% sequential decline in revenue from the ODP business was mainly due to continuing intensive competition in smartphone markets worldwide. Revenue in the Company's brand name phone business was US$4.5 million, as compared to US$2.7 million in the first quarter of 2014. The 64.6% sequential increase in revenue from the brand name phone business was mainly due to increased customer demand for the Company's tailored mobile devices. 

Gross profit for the second quarter was US$2.0 million, compared to US$1.9 million in the first quarter of 2014 and US$3.4 million in the second quarter of 2013, reflecting the adverse impact of the lower revenue base and different business mix compared to the same period from last year. Gross margin for the second quarter of 2014 was 8.8%, compared to 7.4% in the first quarter of 2014 and 11.2% in the second quarter of 2013. Net loss attributed to TechFaith for the second quarter of 2014 was US$2.1 million, or US$0.04 loss per basic and diluted weighted average outstanding ADS, compared to net loss of US$2.9 million, or US$0.05 loss per basic and diluted weighted average outstanding ADS, in the first quarter of 2014, and a net loss of US$1.0 million, or US$0.02 loss per basic and diluted weighted average outstanding ADS, in the second quarter of 2013.

Miss Ouyang Yuping, TechFaith's Chief Financial Officer, said, "Revenue for the second quarter was in line with our guidance, as sequential growth in our brand name phone business helped offset declines in our ODP business.  We were also able to achieve a sequential improvement in our gross margin to 8.8% from 7.4% in the first quarter. This remains below our historical average gross margin level, reflecting the continuing negative impact of intense competition worldwide in the smartphone markets.  As a positive, operating expenses declined slightly in the second quarter of 2014 as we continually monitor our costs. We are also keeping the development of our real estate portfolio on track from an investment cost and timeline standpoint.  This is reflected in our quarter end balance of cash and cash equivalents, which declined slightly to US$253.9 million, as compared to US$258.5 million in the first quarter, primary due to the planned costs associated with our ongoing real estate portfolio development."

Mr. Deyou Dong, President and Chief Operating Officer of TechFaith, said, "Despite the lower revenues level at which we have been operating, we are very optimistic about TechFaith's prospects.  There is a fundamental shift going on in the dynamic mobile market. Large dominant brands are no longer able to control all local markets. The pendulum has swung back in favor of local brands being able to make inroads with competitively priced, value-added offerings. We are seeing this in our domestic China market and other key markets worldwide. For TechFaith, we expect the competitive environment to remain very challenging for the foreseeable future. We understand, however, that we can make inroads above our current lower revenue level by leveraging our design expertise, market knowledge and close customer relationships. Areas where we have been at the forefront – including our branded ruggedized smartphones and perfecting features like dual-SIM capacity, better camera capabilities and a variety of healthcare applications - give us a window of opportunity on which we can capitalize. For example, we are optimistic that shipments for our new ruggedized models will increase over the next few quarters given the uniqueness of our integrated hardware and software. Finally, we continue our efforts in developing our branded Smart ruggedized devices in the domestic China market through above and below the line advertisements, as well as new social media platforms."

Mr. Defu Dong, Chairman and Chief Executive Officer of TechFaith, said, "The continued challenging competitive market is masking our continued progress on the development of our real estate portfolio and the value of our core handset business. We have navigated widespread industry and business shifts in the past. By focusing on our core market strengths and the needs of customers and carriers we serve worldwide, we have built TechFaith as a global brand that is equated with excellence in design and superb handset performance. We remain flexible in navigating the challenging market and focused on keeping operating costs lean, while maintaining a very strong balance sheet. We are optimistic about our long-term prospects despite our current lower revenue level. We have several promising product upgrades and new launches in the pipeline, including our planned entry later this year into the wearables market with a ruggedized sports watch. We also plan to expand and extend the success of our ruggedized product line by developing a ruggedized extreme camera. This is particularly exciting for us as we can offer a complete line of ruggedized solutions to our clients."

Third Quarter of 2014 Outlook

The forecast below is TechFaith's current and preliminary view, which is subject to change.  TechFaith currently expects total revenues for the third quarter of 2014 to be in the range of US$22.0 million to US$24.0 million.

Investor Conference Call / Webcast Details

TechFaith will hold a conference call on Tuesday, August 19, 2014 at 8:00 a.m. U.S. Eastern Time (8:00 p.m. Tuesday, August 19, 2014 in Beijing), using dial-in +1-857-244-7556 or +1-877-474-9503. The conference call passcode is 93469840.  A live webcast of the conference call will also be available on TechFaith's website at

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 43203244. A webcast replay will also be available at

About TechFaith 

TechFaith (NASDAQ: CNTF) has three primary businesses. The Company is a leading global mobile solutions provider under its  ODP business (Original Developed Product).  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 MFOX brand and the teen market under licensed brands. Under the Company's 17Fox brand (previously "17Vee"), 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  

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.




(In Thousands of U.S. Dollars, except share and per share/ADS data)

Three Months Ended

Three Months Ended

Six Months Ended

March 31

June 30

June 30













Brand name phone sales












Total net revenues






Cost of revenues:







Brand name phone sales












Total cost of revenues






Gross Profit






Operating expenses:

General and administrative






Research and development






Selling and marketing






Total operating expenses






Government subsidy income






Other operating income






(Loss) income from operations






Interest expenses






Interest income






Other (expense) income






Change in fair value of put option






(Loss) income before income taxes






Income tax expenses






Net loss






Less: net loss attributable to the noncontrolling interest






Net loss attributable to TechFaith






Net loss attributable to TechFaith per share













Net loss attribute to TechFaith per ADS













Net loss






Other comprehensive (loss) income, net of tax

Foreign currency translation adjustment






Comprehensive (loss) income






Less: Comprehensive loss attributable to noncontrolling interest






Comprehensive (loss) income attributable to TechFaith






Weighted average shares

















(In Thousands of U.S. Dollars)

June 30, 2014

March 31, 2014

December 31, 2013


Current assets:

Cash and cash equivalents




Accounts receivable, net of allowances of $713, $605 and $543 as of June 30, 2014, March 31, 2014 and December 31, 2013, respectively




Notes receivable




Inventories, net




Prepaid expenses and other current assets




Property held for sale




Total current assets




Property, plant and equipment, net




Land use rights, net




Acquired intangible assets, net




Prepayment for purchase land use right




Total assets




Liabilities and equity

Current liabilities:

Accounts payable (including accounts payable of the consolidated variable interest entity without recourse to China Techfaith Wireless Communication Technology Limited, $nil, $nil and $nil as of June 30, 2014, March 31, 2014 and December 31, 2013, respectively)




Short-term loan (including short-term loan of the consolidated variable interest entity without recourse to China Techfaith Wireless Communication Technology Limited, $nil, $nil and $nil as of June 30, 2014, March 31, 2014 and December 31, 2013, respectively)




Accrued expenses and other current liabilities(including accrued expenses and other current liabilities of the consolidated variable interest entity without recourse to China Techfaith Wireless Communication Technology Limited, $185, $184 and $189 as of June 30, 2014, March 31, 2014 and December 31, 2013, respectively)




Advance from customers(including advance from customers of the consolidated variable interest entity without recourse to China Techfaith Wireless Communication Technology Limited, $nil, $nil and $nil as of June 30, 2014, March 31, 2014 and December 31, 2013, respectively)




Deferred revenues (including deferred revenues of the consolidated variable interest entity without recourse to China Techfaith Wireless Communication Technology Limited, $nil, $nil and $nil as of June 30, 2014, March 31, 2014 and December 31, 2013, respectively)




Income tax payable (including income tax payable of consolidated variable interest entity without recourse to China Techfaith Wireless Communication Technology Limited, $22, $22 and $22 as of June 30, 2014, March 31, 2014 and December 31, 2013, respectively)




Put option liability (including put option liability of consolidated variable interest entity without recourse to China Techfaith Wireless Communication Technology Limited, $nil, $nil and $nil as of June 30, 2014, March 31, 2014 and December 31, 2013, respectively)




Total current liabilities




Long-term loan (including long-term loan of consolidated variable interest entity without recourse to China Techfaith Wireless Communication Technology Limited, $nil, $nil and $nil as of June 30, 2014, March 31, 2014 and December 31, 2013, respectively)




Total liabilities





Ordinary shares of par value $0.00002:
(50,000,000,000,000 shares authorized; shares issued and outstanding, 794,003,193, 794,003,193 and 794,003,193 as of June 30, 2014, March 31, 2014 and December 31, 2013, respectively)




Additional paid-in capital




Accumulated other comprehensive income




Statutory reserve




Retained earnings




Total Techfaith shareholders' equity




Noncontrolling interest




Total equity




Total liabilities and equity





SOURCE China TechFaith Wireless Technology Limited

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

@ThingsExpo Stories
The Internet of Things (IoT) is growing rapidly by extending current technologies, products and networks. By 2020, Cisco estimates there will be 50 billion connected devices. Gartner has forecast revenues of over $300 billion, just to IoT suppliers. Now is the time to figure out how you’ll make money – not just create innovative products. With hundreds of new products and companies jumping into the IoT fray every month, there’s no shortage of innovation. Despite this, McKinsey/VisionMobile data shows "less than 10 percent of IoT developers are making enough to support a reasonably sized team....
Most of the IoT Gateway scenarios involve collecting data from machines/processing and pushing data upstream to cloud for further analytics. The gateway hardware varies from Raspberry Pi to Industrial PCs. The document states the process of allowing deploying polyglot data pipelining software with the clear notion of supporting immutability. In his session at @ThingsExpo, Shashank Jain, a development architect for SAP Labs, discussed the objective, which is to automate the IoT deployment process from development to production scenarios using Docker containers.
Just over a week ago I received a long and loud sustained applause for a presentation I delivered at this year’s Cloud Expo in Santa Clara. I was extremely pleased with the turnout and had some very good conversations with many of the attendees. Over the next few days I had many more meaningful conversations and was not only happy with the results but also learned a few new things. Here is everything I learned in those three days distilled into three short points.
DevOps is about increasing efficiency, but nothing is more inefficient than building the same application twice. However, this is a routine occurrence with enterprise applications that need both a rich desktop web interface and strong mobile support. With recent technological advances from Isomorphic Software and others, rich desktop and tuned mobile experiences can now be created with a single codebase – without compromising functionality, performance or usability. In his session at DevOps Summit, Charles Kendrick, CTO and Chief Architect at Isomorphic Software, demonstrated examples of com...
As organizations realize the scope of the Internet of Things, gaining key insights from Big Data, through the use of advanced analytics, becomes crucial. However, IoT also creates the need for petabyte scale storage of data from millions of devices. A new type of Storage is required which seamlessly integrates robust data analytics with massive scale. These storage systems will act as “smart systems” provide in-place analytics that speed discovery and enable businesses to quickly derive meaningful and actionable insights. In his session at @ThingsExpo, Paul Turner, Chief Marketing Officer at...
In his keynote at @ThingsExpo, Chris Matthieu, Director of IoT Engineering at Citrix and co-founder and CTO of Octoblu, focused on building an IoT platform and company. He provided a behind-the-scenes look at Octoblu’s platform, business, and pivots along the way (including the Citrix acquisition of Octoblu).
In his General Session at 17th Cloud Expo, Bruce Swann, Senior Product Marketing Manager for Adobe Campaign, explored the key ingredients of cross-channel marketing in a digital world. Learn how the Adobe Marketing Cloud can help marketers embrace opportunities for personalized, relevant and real-time customer engagement across offline (direct mail, point of sale, call center) and digital (email, website, SMS, mobile apps, social networks, connected objects).
With all the incredible momentum behind the Internet of Things (IoT) industry, it is easy to forget that not a single CEO wakes up and wonders if “my IoT is broken.” What they wonder is if they are making the right decisions to do all they can to increase revenue, decrease costs, and improve customer experience – effectively the same challenges they have always had in growing their business. The exciting thing about the IoT industry is now these decisions can be better, faster, and smarter. Now all corporate assets – people, objects, and spaces – can share information about themselves and thei...
Two weeks ago (November 3-5), I attended the Cloud Expo Silicon Valley as a speaker, where I presented on the security and privacy due diligence requirements for cloud solutions. Cloud security is a topical issue for every CIO, CISO, and technology buyer. Decision-makers are always looking for insights on how to mitigate the security risks of implementing and using cloud solutions. Based on the presentation topics covered at the conference, as well as the general discussions heard between sessions, I wanted to share some of my observations on emerging trends. As cyber security serves as a fou...
The Internet of Everything is re-shaping technology trends–moving away from “request/response” architecture to an “always-on” Streaming Web where data is in constant motion and secure, reliable communication is an absolute necessity. As more and more THINGS go online, the challenges that developers will need to address will only increase exponentially. In his session at @ThingsExpo, Todd Greene, Founder & CEO of PubNub, exploreed the current state of IoT connectivity and review key trends and technology requirements that will drive the Internet of Things from hype to reality.
The cloud. Like a comic book superhero, there seems to be no problem it can’t fix or cost it can’t slash. Yet making the transition is not always easy and production environments are still largely on premise. Taking some practical and sensible steps to reduce risk can also help provide a basis for a successful cloud transition. A plethora of surveys from the likes of IDG and Gartner show that more than 70 percent of enterprises have deployed at least one or more cloud application or workload. Yet a closer inspection at the data reveals less than half of these cloud projects involve production...
Countless business models have spawned from the IaaS industry – resell Web hosting, blogs, public cloud, and on and on. With the overwhelming amount of tools available to us, it's sometimes easy to overlook that many of them are just new skins of resources we've had for a long time. In his general session at 17th Cloud Expo, Harold Hannon, Sr. Software Architect at SoftLayer, an IBM Company, broke down what we have to work with, discussed the benefits and pitfalls and how we can best use them to design hosted applications.
Discussions of cloud computing have evolved in recent years from a focus on specific types of cloud, to a world of hybrid cloud, and to a world dominated by the APIs that make today's multi-cloud environments and hybrid clouds possible. In this Power Panel at 17th Cloud Expo, moderated by Conference Chair Roger Strukhoff, panelists addressed the importance of customers being able to use the specific technologies they need, through environments and ecosystems that expose their APIs to make true change and transformation possible.
Microservices are a very exciting architectural approach that many organizations are looking to as a way to accelerate innovation. Microservices promise to allow teams to move away from monolithic "ball of mud" systems, but the reality is that, in the vast majority of organizations, different projects and technologies will continue to be developed at different speeds. How to handle the dependencies between these disparate systems with different iteration cycles? Consider the "canoncial problem" in this scenario: microservice A (releases daily) depends on a couple of additions to backend B (re...
We all know that data growth is exploding and storage budgets are shrinking. Instead of showing you charts on about how much data there is, in his General Session at 17th Cloud Expo, Scott Cleland, Senior Director of Product Marketing at HGST, showed how to capture all of your data in one place. After you have your data under control, you can then analyze it in one place, saving time and resources.
Container technology is shaping the future of DevOps and it’s also changing the way organizations think about application development. With the rise of mobile applications in the enterprise, businesses are abandoning year-long development cycles and embracing technologies that enable rapid development and continuous deployment of apps. In his session at DevOps Summit, Kurt Collins, Developer Evangelist at, examined how Docker has evolved into a highly effective tool for application delivery by allowing increasingly popular Mobile Backend-as-a-Service (mBaaS) platforms to quickly crea...
Too often with compelling new technologies market participants become overly enamored with that attractiveness of the technology and neglect underlying business drivers. This tendency, what some call the “newest shiny object syndrome” is understandable given that virtually all of us are heavily engaged in technology. But it is also mistaken. Without concrete business cases driving its deployment, IoT, like many other technologies before it, will fade into obscurity.
The Internet of Things is clearly many things: data collection and analytics, wearables, Smart Grids and Smart Cities, the Industrial Internet, and more. Cool platforms like Arduino, Raspberry Pi, Intel's Galileo and Edison, and a diverse world of sensors are making the IoT a great toy box for developers in all these areas. In this Power Panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, panelists discussed what things are the most important, which will have the most profound effect on the world, and what should we expect to see over the next couple of years.
Growth hacking is common for startups to make unheard-of progress in building their business. Career Hacks can help Geek Girls and those who support them (yes, that's you too, Dad!) to excel in this typically male-dominated world. Get ready to learn the facts: Is there a bias against women in the tech / developer communities? Why are women 50% of the workforce, but hold only 24% of the STEM or IT positions? Some beginnings of what to do about it! In her Day 2 Keynote at 17th Cloud Expo, Sandy Carter, IBM General Manager Cloud Ecosystem and Developers, and a Social Business Evangelist, wil...
PubNub has announced the release of BLOCKS, a set of customizable microservices that give developers a simple way to add code and deploy features for realtime apps.PubNub BLOCKS executes business logic directly on the data streaming through PubNub’s network without splitting it off to an intermediary server controlled by the customer. This revolutionary approach streamlines app development, reduces endpoint-to-endpoint latency, and allows apps to better leverage the enormous scalability of PubNub’s Data Stream Network.