Asia Pacific Wire & Cable Company Reports Third Quarter 2014 Financial Results

Asia Pacific Wire & Cable Corporation Limited, a leading manufacturer of wire and cable products for the telecommunications and electric-power industries in the Asia-Pacific region, today announced the Company's financial results for the nine months ended September 30, 2014. Unless otherwise indicated all dates are reported in US dollars at the exchange rate prevailing on the date of the event or result reported.

First Nine Months 2014 Financial Results (Ended September 30, 2014)

   First 9 Months 2014    First 9 Months 2013    CHANGE
Revenues    $338.7 million    $336.4 million    +0.7%
Gross Profit    $28.9 million    $35.3 million    -19.1%
Net Income    $0.3 million    $3.9 million    -93.2%
EPS(1)    $0.02    $0.28    

(1) Earnings per share are based on 13.8 million shares in Q3 2013 and Q3 2014

Revenues for the nine months ended September 30, 2014 were $338.7 million, up from $336.4 million in the prior year, primarily attributable to a 7.6% rise in sales in the Company's Rest of the World Region (ROW Region) an increased sales volumes in SDI, and a 1.7% increase in sales in the North Asia Region from manufactured products. APWC's ROW Region includes Singapore, Australia and the other markets where APWC has operations or sales outside of the Thailand Region and North Asia Region. The North Asia Region includes China and Hong Kong, and the Thailand Region contains the operations and sales inside Thailand.

Gross profit for the nine months ended September 30, 2014 declined by 19.1% to $28.9 million from $35.3 million in the same period last year. Gross margin was down by 18.5%, falling from 10.5% in the first nine months of 2013 to 8.5% this year. In the Thailand Region, gross margin fell following a decline in higher margin Thai government projects due to the political unrest since Q4 2013. The ROW Region also experienced declining sales prices and an increase in manufacturing overhead.

Selling, general and administrative expenses of $20.6 million were reported for the first nine months of 2014, compared to $22.6 million booked a year ago. Operating income was $6.3 million, compared to $12.4 million in the comparable nine month period last year. The Company booked a one-time $2.1 million non-cash impairment charge for trade receivables in 2014. Operating income for the nine months ended September 30, 2014 would have been $8.4 million excluding the non-cash impairment charge.

Net income attributable to APWC shareholders was $0.3 million for the nine months of 2014, compared to $3.9 million in 2013. Net income per share was $0.02 for the year to date, while net income of $0.28 per share was reported for the comparable period a year ago. The weighted average number of shares outstanding was 13.8 million for the first nine months of each of 2014 and 2013.

APWC reported $81.3 million in cash and cash equivalents as of September 30, 2014, compared to cash and cash equivalents of $62.5 million on December 31, 2013. Most of the cash is held by operating subsidiaries and, in certain instances, subject to limitations on distribution to APWC.

Current assets totaled $338.4 million on September 30, 2014 compared to $302.2 million as of December 31, 2013. Working capital was $175.8 million as of September 30, 2014. Short term bank loans were reported at $67.1 million on the same date, up from $41.8 million at the end of the 2013. The Company had no long-term debt outstanding on September 30, 2014. Shareholder's equity attributable to APWC was $157.6 million as of September 30, 2014, compared to $157.2 million on December 31, 2013.

Over the nine months ended September 30, 2014, the Company used $1.6 million in cash from operating activities, compared to a $18.7 million cash inflow in the comparable nine months of 2013. Capital expenditures totaled $4.1 million in the third quarter of 2014, compared to $7.2 million in the comparable period last year.

Business Update

The Company is pleased to announce that the ROW region was awarded a public sector contract in Q3 2014 of approximately US$58 million. APWC expects to initiate delivery in January 2015 and complete the contract by Q3 2016.

The business in the Thailand region has been affected by the political unrest since Q4 2013. The coup in May 2014 has arguably improved the political stability in the country, which might accelerate economic recovery in 2015. However, Thailand's political future is still unknown and will continue to affect the Company's business in the region.

The Company's Ningbo subsidiary has been awarded the ISO/TS16949 certification, which regulates the design, development and production of automotive-related products. The subsidiary is also in the midst of applying for the China Compulsory Certification, which is required for many of the Company's products to meet the requirement of its domestic customers in China.

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