MACAO, China, Aug. 4 /PRNewswire-FirstCall/ -- Nam Tai Electronics,
Inc. ("Nam Tai" or the "Company") (NYSE: NTE) today announced its unaudited
results for the second quarter ended June 30, 2008.
KEY HIGHLIGHTS
(In thousands of US Dollars, except per share data, percentages and as
otherwise stated)
Quarterly Results Half-Year Results
Q2 2008 Q2 2007 YoY(%) 1H2008 1H2007 YoY(%)
Net sales $146,168 $197,830 (26.1) $293,297 $389,401 (24.7)
Gross profit $20,762 $22,745 (8.7) $40,292 $39,946 0.9
% of sales 14.2% 11.5% - 13.7% 10.3% -
Operating income $8,608 $11,834 (27.3) $16,420 $19,051 (13.8)
% of sales 5.9% 6.0% - 5.6% 4.9% -
per share
(diluted) $0.19 $0.26 (26.9) $0.37 $0.43 (14.0)
Net income $11,804 $38,805 (69.6) $40,170 $47,204 (14.9)
% of sales 8.1% 19.6% - 13.7% 12.1% -
Basic earnings
per share $0.26 $0.87 (70.1) $0.90 $1.06 (15.1)
Diluted earnings
per share $0.26 $0.87 (70.1) $0.90 $1.05 (14.3)
Weighted average
number of
shares ('000')
Basic 44,804 44,804 - 44,804 44,360 -
Diluted 44,811 44,806 - 44,807 44,805 -
In addition to disclosing results determined in accordance with
accounting principles generally accepted in the United States ("US GAAP")
as set forth in the table above, management utilizes a measure of operating
income, net income and earnings per share on a non-GAAP basis that excludes
certain income and expenses to better assess operating performance. Those
non-GAAP financial measures exclude certain items, such as share-based
compensation expenses and infrequent or unusual items such as gain on
disposal of subsidiaries' shares and gain on disposal of marketable
securities. By disclosing the non-GAAP information, management intends to
provide investors with additional information to analyze the Company's
performance, core results and underlying trends. Non-GAAP information is
not determined using US GAAP; therefore, the information is not necessarily
comparable to other companies and should not be used to compare the
Company's performance over different periods. Non-GAAP information should
not be viewed as a substitute for, or superior to, net income or other
financial data prepared in accordance with US GAAP as measures of our
operating results or liquidity. Users of this financial information should
consider the types of events and transactions for which adjustments have
been made. See the table below for a reconciliation of non-GAAP amounts to
amounts reported under US GAAP.
GAAP TO NON-GAAP RECONCILIATION
(In millions of US Dollars, except for per share (diluted) and numbers of
shares)
Three months ended
June 30,
2008 2007
per share per share
millions (diluted) millions (diluted)
GAAP Operating Income $8.6 $0.19 $11.8 $0.26
Add back:
-share-based compensation
expenses(a) 0.2 0.01 0.2 0.01
Non-GAAP Operating Income $8.8 $0.20 $12.0 $0.27
GAAP Net Income $11.8 $0.26 $38.8 $0.87
Add back/(Less):
-share-based compensation
expenses(a) 0.2 0.01 0.2 0.01
-gain on sale of
subsidiaries' shares (b) - - (0.4) (0.01)
-other income recovered
from Tele-Art Inc. (in
liquidation)(c) (2.9) (0.07) - -
-gain on disposal of
marketable securities - - (28.0) (0.63)
Non-GAAP Net Income $9.1 $0.20 $10.6 $0.24
Weighted average number of
shares - diluted ('000) 44,811 44,806
Six months ended
June 30,
2008 2007
per share per share
millions (diluted) millions (diluted)
GAAP Operating Income $16.4 $0.37 $19.1 $0.42
Add back:
-share-based compensation
expenses(a) 1.2 0.03 0.3 0.01
Non-GAAP Operating Income $17.6 $0.40 $19.4 $0.43
GAAP Net Income $40.2 $0.90 $47.2 $1.06
Add back/(Less):
-share-based compensation
expenses(a) 1.2 0.03 0.3 0.01
-gain on sale of
subsidiaries' shares (b) (20.2) (0.45) (0.4) (0.01)
-other income recovered
from Tele-Art Inc. (in
liquidation)(c) (2.9) (0.07) - -
-gain on disposal of
marketable securities - - (28.0) (0.63)
Non-GAAP Net Income $18.3 $0.41 $19.1 $0.43
Weighted average number of
shares - diluted ('000) 44,807 44,805
Note:
(a) The share-based compensation expenses included approximately $0.2
million attributable to options to purchase 75,000 shares granted in the
second quarter of 2008 to non-employee directors in accordance with the
Company's practice of making annual option grants to its non-employee
directors upon their election for the ensuing year and approximately $1.0
million principally attributable to options to purchase approximately 20
million shares granted by the Company's Hong Kong Stock Exchange- listed
subsidiary, Nam Tai Electronic & Electrical Products Limited
("NTEEP")(Stock Code : 2633), to certain of its executive directors and
employees in the first quarter of 2008.
(b) On March 4, 2008, Nam Tai completed the sale of its entire equity
interest in J.I.C. Technology Company Limited ("JIC"), a Hong Kong Stock
Exchange listed subsidiary (Stock Code: 00987), to an independent third
party. In this transaction, Nam Tai sold 572,594,978 shares of JIC,
representing 74.99% of its outstanding share capital for cash of
approximately $51 million, which resulted in a gain on disposal of
approximately $20 million.
(c) A total amount of approximately $2.9 million of other income in the
Company's financial statements for the second quarter of 2008. This amount
represents Nam Tai's share of proceeds realized from the disposal for the
account of Tele-Art, Inc.'s liquidator of 477,319 Nam Tai shares owned by
Tele-Art, Inc. (in liquidation)("Tele-Art") and was paid in settlement of
amounts previously funded by Nam Tai in connection with Tele-Art's
liquidation and in partial satisfaction of judgments in favor of Nam Tai
against Tele-Art.
SECOND QUARTER REVIEW
The business environment in Nam Tai's product sectors remains difficult
and extremely competitive. Net sales in the second quarter of 2008 were
$146.2 million, a decrease of 26.1% as compared to the sales of $197.8
million in the second quarter of 2007, mainly as a consequence of the
continuing decline in business from the Company's telecommunication
components assembly ("TCA") segment. Net sales in the TCA segment for the
second quarter of 2008 decreased by 48.0% compared to the same quarter of
2007. Our TCA segment is primarily dependent on the mobile phone market.
The Company suffered another substantial drop in sales volume of its
devices used in mobile phones, a trend Nam Tai began experiencing in 2007
and which has continued and accelerated as a result of declining demand
experienced in the mobile phone market and persistent pressure to lower
unit prices. The challenging environment in the TCA segment is expected to
continue and may increase in the coming quarters. Sales of products in our
liquid crystal display product ("LCDP") segment and sales from our consumer
electronics and communication products ("CECP") segment also dropped by
6.1% and 3.1% respectively, during the second quarter of 2008 as compared
to sales of the corresponding quarter of 2007. The decrease in sales in our
LCDP segment was mainly a consequence of the drop of sales of our LCD
modules products. Sales in our CECP segment were affected by a decrease in
sales of mobile phone accessories of approximately 28% from comparable
sales in the second quarter of 2007, offset by the increase in sales of our
home entertainment devices amounting to approximately 22% from 2007 second
quarter sales.
The Company's gross profit margin in the second quarter of 2008
improved by approximately 2.7 %, to 14.2% in the second quarter of 2008
compared to 11.5% in the second quarter of 2007. Management attributes this
increase in gross profit margins to it's program selectivity, with strong
emphasis on profitability, and the effect of efforts to improve
manufacturing efficiencies. We will continue our efforts in improving
manufacturing efficiencies, broadening our product offerings and
diversifying our customer base which we expect will help to manage
operations in the ongoing tough business environment. Gross profit in the
second quarter of 2008 was $20.8 million, a decrease of 8.7% as compared to
$22.7 million in the second quarter of 2007, primarily resulting from the
decline in 2008 sales.
Operating income in the second quarter of 2008 was $8.6 million, or
$0.19 per share (diluted), compared to operating income of $11.8 million,
or $0.26 per share (diluted) in the second quarter of 2007. Net income in
the second quarter of 2008 was $11.8 million, compared to net income of
$38.8 million (of which, approximately $28.0 million resulted from a net
gain on disposal of marketable securities) in the second quarter of 2007.
Basic and diluted earnings per share in the second quarter of 2008 were
$0.26 per share, compared to $0.87 in the second quarter of 2007.
For the six months ended June 30, 2008, Nam Tai's net sales were $293.3
million, a decrease of 24.7% as compared to $389.4 million in the same
period last year. Gross profit was $40.3 million, an increase of 0.9% as
compared to $40.0 million in the same period last year. Operating income
for the first six months in 2008 decreased 13.8% to $16.4 million, or $0.37
per share (diluted), compared to $19.1 million, or $0.43 per share
(diluted), in the same period last year. Net income was $40.2 million, or
$0.90 per share (diluted), a decrease of 14.9% as compared to $47.2 million
or $1.05 per share (diluted) in the same period last year.
The Company's financial position remains strong and net cash provided
by operating activities in the second quarter was $30.8 million. The
Company ended the quarter with $271.9 million cash and cash equivalents on
June 30, 2008 even after capital expenditures of $5.8 million and cash
dividends of $9.8 million paid to shareholders of the Company and $6.0
million paid to minority shareholders of NTEEP.
NON-GAAP FINANCIAL INFORMATION
Non-GAAP operating income for the second quarter of 2008 was $8.8
million, or $0.20 per share (diluted), compared to non-GAAP operating
income of $12.0 million, or $0.27 per share (diluted), in the second
quarter of 2007. Non-GAAP net income for the second quarter of 2008
decreased by 14.2% over the second quarter of 2007 to $9.1 million, or
$0.20 per share (diluted), compared to $10.6 million, or $0.24 per share
(diluted), in the second quarter of 2007.
Non-GAAP operating income for the first six months in 2008 was $17.6
million, or $0.40 per share (diluted), compared to non-GAAP operating
income of $19.4 million, or $0.43 per share (diluted) for the same period
last year. Non-GAAP net income for the first six months in 2008 was $18.3
million or $0.41 per share (diluted), a decrease of 4.2% as compared to
$19.1 million, or $0.43 per share (diluted), for the same period last year.
COMPANY OUTLOOK
Recent global adverse economic conditions (which, we believe, have been
primarily driven by the sub-prime crisis in the US) aggravated the
Company's results in the past quarter and may exacerbate the difficult
business environment we currently face and could result in negative effects
to our results of operations over the next several quarters. Additionally,
we also face issues such as the continuing appreciation of the exchange
rate of the renminbi to the US dollar, the effects of changing tax and
labor laws in the People's Republic of China ("PRC"), shortages of
electricity supply and increases in overhead expenses resulting from
inflation.
To respond to the challenges surfacing from the current business
environment, management has continued to focus efforts to optimize
operating efficiencies by realigning production capacity to higher margin
product offerings and has sought to diversify Nam Tai's customer base.
Management believes that Nam Tai has begun to realize limited benefits from
the Company's simpler organizational structure implemented at the beginning
of 2008, which management believes has fostered, and will continue to,
foster a more efficient and effective exchange of know-how and technology
among our group companies, reduced overhead costs and facilitated stronger
management controls.
During the second quarter of 2008, the foundation of the first of the
Company's planned new factories in Wuxi in the Jiangsu Province of China
was completed and the Company had, according to its schedule, selected a
contractor for the mechanical and electrical construction required for the
expansion project. Management is optimistic that Nam Tai will be in a
position to begin mass production at the new Wuxi facility in early to mid-
2009.
SUPPLEMENTARY INFORMATION (UNAUDITED) IN THE SECOND QUARTER OF 2008
1. Quarterly Sales Breakdown
(In thousands of US Dollars, except percentage information)
Quarter YoY(%)
YoY(%) (Quarterly
2008 2007 (Quarterly) accumulated)
1st Quarter 147,129 191,571 (23.2) (23.2)
2nd Quarter 146,168 197,830 (26.1) (24.7)
3rd Quarter - 204,485 - -
4th Quarter - 186,936 - -
Total 293,297 780,822
2. Breakdown of Net Sales by Product Segment (as a percentage of Total Net
Sales)
2008 2007
Segments Q2 YTD Q2 YTD
(%) (%) (%) (%)
Consumer Electronic and
Communication Products 50% 49% 38% 33%
Telecommunication Component 36% 38% 51% 57%
Assembly
LCD Products 14% 13% 11% 10%
100% 100% 100% 100%
3. Key Highlights of Financial Position
As at June 30, As at December 31,
2008 2007 2007
Cash on hand (a) $271.9 million $268.3 million $272.5 million
Ratio of cash (a) to
current liabilities 2.28 1.79 1.87
Current ratio 3.29 2.74 2.83
Ratio of total assets
to total liabilities 4.37 3.61 3.70
Return on equity 23.6% 28.9% 21.5%
Ratio of total
liabilities to equity 0.34 0.45 0.45
Debtors turnover 50 days 48 days 45 days
Inventory turnover 16 days 19 days 17 days
Average payable period 56 days 58 days 56 days
Note: (a) Includes cash equivalents.
4. Claims against Tele-Art We reported a total of approximately $2.9 million as other income in
our financial statements for the second quarter of 2008. This amount
represents the Company's share of proceeds realized from the sales on
behalf of Tele- Art's liquidator of 477,319 Nam Tai shares for the benefit
of unsecured creditors of Tele-Art and was paid to Nam Tai in settlement of
amounts previously funded by Nam Tai in connection with Tele-Art's
liquidation proceedings and in partial satisfaction of judgments in favor
of Nam Tai against Tele-Art. Total net proceeds from sales of such 477,319
shares were approximately $4.9 million, which together with approximately
$300,000 in cash dividends that had accrued on the shares prior to their
sale, were, in addition to the aforementioned payment to the Company, used
as follows (amounts are approximate):
-- $200,000 to satisfy claims of unsecured creditors of Tele-Art other
than Nam Tai;
-- $400,000 to satisfy the claims of Tele-Art's former liquidator;
-- $600,000 in payment of professional fees and expenses, including
expenses relating to the sale of the shares, incurred through June 30,
2008; and
The balance of the sale proceeds, amounting $1,100,000 at June 30,
2008, have been reserved for on-going legal and professional costs expected
in connection with efforts to locate and recover additional assets of
Tele-Art's liquidation estate.
5. Increase the equity interest in NTEEP
At March 31, 2008, Nam Tai owned 645,229,470 shares of Nam Tai
Electronic & Electrical Products Limited ("NTEEP"), its operating
subsidiary that is listed on the Hong Kong Stock Exchange (Stock Code:
2633). During the period from April 1 to June 30, 2008, the Company made
open-market purchases of 11,116,000 shares of NTEEP at prices per share
ranging from HK$1.47 to HK$1.53 (or approximately $0.188 to $0.196),
increasing the Company's equity interest in NTEEP's outstanding share
capital by 1.26%, from 73.18% to 74.44%, at June 30, 2008. From July 1
through July 25, 2008, Nam Tai made purchases of an additional 3,870,000
shares of NTEEP increasing its equity interest in NTEEP to 74.88%, which is
the maximum level permitted by the Hong Kong Stock Exchange in order to
allow a minimum of 25% public float pursuant to the Rules governing the
Listing of Securities on The Stock Exchange of Hong Kong Limited.
SECOND QUARTER RESULTS ANALYST CONFERENCE CALL
The Company will hold a conference call on Monday, August 4, 2008 at
8:00 a.m. Eastern Time for analysts to discuss the second quarter results
with Nam Tai's management. Shareholders, media, and interested investors
are invited to listen to the live conference over the Internet by going to
http://www.namtai.com and clicking on the conference call link (under events) or
over the phone by dialing (612) 332-0107 just prior to its start time.
DIVIDENDS
The second quarter dividend of $0.22 per share was paid on or about
July 21, 2008. The record date for the third quarter dividend of $0.22 per
share is September 30, 2008 and the payment date is on or before October
21, 2008. The payment dates for the fourth quarter is scheduled to be on or
before January 21, 2009.
The schedule for quarterly dividends paid and payable for fiscal year 2008
are as follows:
Quarterly Dividend
Payment Record Date Scheduled Payment Date (per share)
Q1/08 March 31, 2008 Paid on or before April 21, 2008 $0.22
Q2/08 June 30, 2008 Paid on or before July 21, 2008 $0.22
Q3/08 September 30, 2008 On or before October 21, 2008 $0.22
Q4/08 December 31, 2008 On or before January 21, 2009 $0.22
Full Year 2008 $0.88
FORWARD-LOOKING STATEMENTS AND FACTORS THAT COULD CAUSE OUR SHARE PRICE
TO DECLINE
Statements in this press release, such as management's assessment of
the effects of management's efforts to improve Nam Tai's profitability and
profit margins, benefits expected from the Company's internal
reorganization that was completed at the end of 2007 and management's
estimates of when Nam Tai will be in a position to begin mass production at
its new facility in Wuxi, Jiangsu Province, PRC, among other statements in
this press release, are "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Forward-looking statements may be identified by the
use of words like "believes," "intends," "expects," "plans" or "planned,"
"may," "will," "should" or "anticipates," or the negative equivalents of
those words or comparable terminology, and involve risks and uncertainties.
Such statements are based on current expectations and assumptions and
reflect management's views with respect to future events and may not
actually occur during the periods indicated or at all and are not a
guarantee of Nam Tai's future performance. These forward-looking statements
are, by their nature, subject to risks, uncertainties and other factors
that could cause the actual results to differ materially from future
results expressed or implied by the forward-looking statements in this
press release.
Whether the effects of management's efforts to improve Nam Tai's
profitability have resulted or will result in improved profitability or
profit margins or overcome the perceived onset of adverse global economic
conditions generally or the ongoing weakness in the mobile phone supply
chain, specifically, increasing taxes and labor costs from new tax and
labor legislation in the PRC, whether material additional benefits expected
from the Company's internal reorganization that was completed at the end of
2007 will actually be realized, whether management's estimates of when
construction of Nam Tai's new manufacturing faciliy in Wuxi, Jiangsu
Province, PRC will be available for production will prove true, and whether
revenues expected when production at Nam Tai's new Wuxi facility commences
will materialize will depend upon future sales orders and on Nam Tai's
actual ability to contain manufacturing costs and the level of capital
expenditures required for each of the planned expansion projects. Product
orders and Nam Tai's growth, operating income, available cash, cash flows
and levels of capital expenditures may be adversely affected by numerous
factors including Nam Tai's dependence on a few large customers; intense
competition in the electronics industry in which the Company participates,
particularly in the mobile phone market that places constant pressure on
the Company to reduce unit prices; continuing competitive pressures that
adversely affect its profit margins; its operating results fluctuating and
lacking predictability; risks relating to its doing business in the PRC
such as arising from changes in governmental policies, trade regulation,
currency exchange rates, particularly from the appreciation of the renminbi
to the U.S. dollar which has occurred since June 2005 and has shown no
signs of abating, inflation in the PRC; the timing and amount of
significant orders from customers; delays in product development and
related product release schedules; obsolete inventory or product returns;
warranty and other claims on products; technological shifts; the
availability of competitive products of comparable quality at prices below
Nam Tai's prices; maturing product life cycles of the products manufactured
by Nam Tai; concessions Nam Tai may make on product sale terms and
conditions; implementation of operating cost structures that align with
revenue growth, if any; the financial condition of Nam Tai's customers and
vendors; the availability and increasing costs of materials and other
components needed to manufacture its products; potential shortages of
materials or skilled labor needed for its planned expansion projects or for
its existing facilities; unforeseen engineering problems, work stoppages,
weather interference, flood, earthquake or other acts of God, delays in
obtaining or failure to obtain necessary permits from regulatory
authorities needed for completion of its expansion projects or continue
existing operations, other unexpected project delays or unanticipated cost
increases; risks of expanding into new areas of the PRC where Nam Tai's has
not yet conducted business, diversion of management's attention to
expansion and its management to new locations and to other business
concerns; the impact of legislative actions, higher insurance costs and
potential new accounting pronouncements; a worsening of relations between
the PRC and the United States or Taiwan; the effects of terrorist activity
and armed conflict such as disruptions in general economic activity and
changes in Nam Tai's operations and security arrangements; the effects of
travel restrictions and quarantines associated with major health problems,
such as the Severe Acute Respiratory Syndrome or Bird Flu, on general
economic activity; or other changes in general economic conditions,
including an exacerbation of the current global economic weaknesses that
continue adversely affecting, or further reduce, demand for Nam Tai's
products. In addition, factors, among others, that could cause the market
price of our shares to decline in the future could include further
decreases in our revenues from those we reported in earlier periods, the
operating results or those of our competitors or customers to meet the
expectations of public market analysts and investors who follow the
electronics manufacturing services, or EMS, industry, or one or more of the
factors discussed in "Item 3. Key Information - Risk Factors" in our Annual
Report on Form 20-F for the year ended December 31, 2007 as filed on March
17, 2008 with the Securities and Exchange Commission ("SEC").
For further information regarding risks and uncertainties associated
with Nam Tai's business, please refer to the "Management's Discussion and
Analysis of Results of Operations and Financial Condition" and "Risk
Factors" sections of Nam Tai's SEC filings, including, but not limited to,
its annual reports on Form 20-F, copies of which may be obtained from Nam
Tai's website at http://www.namtai.com.
All information in this press release is as of August 1, 2008 in Macao,
Special Administrative Region of the People's Republic of China. Nam Tai
does not undertake any duty, and should not be expected, to update any
forward- looking statement to conform the statement to actual results or
changes in Nam Tai's expectations.
ABOUT NAM TAI ELECTRONICS, INC.
We are an electronics manufacturing and design services provider to a
select group of the world's leading OEMs of telecommunications and consumer
electronic products. Through our electronics manufacturing services
operations, we manufacture electronic components and subassemblies,
including LCD panels, LCD modules, RF modules, DAB modules, FPC
subassemblies and image-sensor modules and PCBAs for headsets containing
Bluetooth(R) wireless technology.(1) These components are used in numerous
electronic products, including mobile phones, laptop computers, digital
cameras, electronic toys, handheld video game devices, and entertainment
devices. We also manufacture finished products, including mobile phone
accessories, home entertainment products and educational products. We
assist our OEM customers in the design and development of their products
and furnish full turnkey manufacturing services that utilize advanced
manufacturing processes and production technologies.
Nam Tai's operations are conducted by its subsidiary, Nam Tai
Electronic & Electrical Products Limited ("NTEEP"), a Hong Kong Stock
Exchange-listed company, in which Nam Tai owns approximately 74.88% of the
outstanding share capital. In addition to reports that Nam Tai files with
the SEC, which may accessed through the SEC's EDGAR database at
http://www.sec.gov, interested investors may review the website of The
Stock Exchange of Hong Kong at http://www.hkex.com.hk to obtain information that
NTEEP is required to file under applicable rules of the Hong Kong Stock
Exchange. The stock code of NTEEP on The Stock Exchange of Hong Kong is
2633. Investors are reminded to exercise caution when assessing information
from the Hong Kong Stock Exchange and not to deal with the shares of Nam
Tai based solely upon reliance on such information.
(1) The Bluetooth(R) word mark and logos are owned by the Bluetooth
SIG, Inc. and any use of such marks by Nam Tai is under license.
NAM TAI ELECTRONICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE PERIODS ENDED JUNE 30, 2008 AND 2007
(In Thousands of US Dollars except share and per share data)
Unaudited Unaudited
Three months ended Six months ended
June 30 June 30
2008 2007 2008 2007
Net sales $146,168 $197,830 $293,297 $389,401
Cost of sales 125,406 175,085 253,005 349,455
Gross profit 20,762 22,745 40,292 39,946
Costs and expenses
Selling, general and
administrative expenses 9,480 8,486 18,831 16,293
Research and development
expenses 2,674 2,425 5,041 4,602
12,154 10,911 23,872 20,895
Operating Income 8,608 11,834 16,420 19,051
Other income, net 5,101 789 6,487 323
Gain on disposal of marketable
securities - 43,815 - 43,815
Gain on sales of subsidiaries'
shares - 390 20,206 390
Interest income 1,575 2,303 3,290 4,474
Interest expense (69) (109) (143) (210)
Income before income taxes
and minority interests 15,215 59,022 46,260 67,843
Income taxes (1,242) (5,502) (1,501) (3,914)
Income before minority interests 13,973 53,520 44,759 63,929
Minority interests (2,169) (14,715) (4,589) (16,725)
Net income $11,804 $38,805 $40,170 $47,204
Earnings per share
Basic $0.26 $0.87 $0.90 $1.06
Diluted $0.26 $0.87 $0.90 $1.05
Weighted average number of
shares ('000')
Basic 44,804 44,804 44,804 44,360
Diluted 44,811 44,806 44,807 44,805
NAM TAI ELECTRONICS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
AS AT JUNE 30, 2008 AND DECEMBER 31, 2007
(In Thousands of US Dollars)
Unaudited Audited
June 30 December 31
2008 2007
ASSETS (Note)
Current assets:
Cash and cash equivalents $271,854 $272,459
Accounts receivable, net 81,095 95,802
Entrusted loan receivable (Note 1) 8,166 -
Inventories 22,257 32,356
Prepaid expenses and other receivables 3,717 5,803
Income tax recoverable 3,544 5,483
Deferred tax assets - current 568 54
Total current assets 391,201 411,957
Property, plant and equipment, net 90,668 94,669
Land use right 13,742 3,930
Deposits for property, plant and equipment 1,280 536
Prepayment for land use right - 9,019
Goodwill 20,296 20,296
Deferred tax assets 3,426 3,192
Other assets 1,219 1,219
Total assets $521,832 $544,818
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable $2,571 $4,580
Long-term bank loans - current portion - 1,990
Entrusted loan payable (Note 1) 8,166 -
Accounts payable 77,700 107,326
Accrued expenses and other payables 19,534 21,690
Dividend payable 9,857 9,509
Income tax payable 1,157 556
Total current liabilities 118,985 145,651
Long-term bank loans - non-current portion - 1,558
Deferred tax liabilities 379 -
Total liabilities 119,364 147,209
Minority interests 50,919 67,428
Shareholders' equity:
Common shares 448 448
Additional paid-in capital 282,807 281,895
Retained earnings 68,302 47,846
Accumulated other comprehensive income (Note 2) (8) (8)
Total shareholders' equity 351,549 330,181
Total liabilities and shareholders' equity $521,832 $544,818
Note: Information extracted from the audited financial statements
included in the 2007 Form 20-F of the Company filed with the Securities and
Exchange Commission on March 17, 2008.
NAM TAI ELECTRONICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE PERIODS ENDED JUNE 30 2008 AND 2007
(In Thousands of US Dollars)
Unaudited Unaudited
Three months ended Six months ended
June 30 June 30
2008 2007 2008 2007
CASH FLOWS FROM OPERATING
ACTIVITIES
Net income $11,804 $38,805 $40,170 $47,204
Adjustments to
reconcile net income
to net cash provided
by operating activities:
Depreciation and
amortization of property,
plant and equipment and
land use right 5,616 5,289 11,311 10,313
Net (gain) loss on disposal
of property, plant and
equipment (2) 37 2 44
Dividend withheld (305) - (305) -
Gain on disposal of
marketable securities - (43,815) - (43,815)
Gain on sales of
subsidiaries' sales - (390) (20,206) (390)
Share-based compensation
expenses 158 230 1,158 317
Minority interests 2,169 14,715 4,589 16,725
Deferred income taxes 126 112 (369) (1,871)
Unrealized exchange (gain)
loss (1,066) 93 (3,771) (58)
Changes in current assets
and liabilities:
Decrease in accounts
receivable 8,717 6,802 14,556 16,009
Decrease (increase) in
inventories 6,230 (5,773) 10,099 (5,963)
Decrease (increase) in
prepaid expenses and
other receivables 545 (33) 2,005 (291)
Decrease in income taxes
recoverable 23 3,019 1,895 2,821
(Decrease) increase in
notes payable (1,288) 4,671 (2,009) 5,577
(Decrease) increase in
accounts payable (634) 3,338 (29,626) (14,678)
(Decrease) increase in
accrued expenses and
other payables (1,689) (141) (2,249) 1,732
Increase in income tax
payable 362 1,766 755 1,766
Total adjustments 18,962 (10,080) (12,165) (11,762)
Net cash provided by
operating activities $30,766 $28,725 $28,005 $35,442
CASH FLOWS FROM INVESTING
ACTIVITIES
Net cash (outflow)
inflow from disposal
of subsidiaries (104) - 6,671 -
Purchase of property,
plant and equipment (5,780) (5,672) (7,668) (7,720)
Increase in deposits for
purchase of property,
plant and equipment (1,258) (481) (949) (324)
Increase in prepayment for
purchase of land - (731) (663) (736)
Increase in entrusted loan
receivable (8,166) - (8,166) -
Acquisition of additional
shares in subsidiaries (2,030) (13,808) (2,030) (13,808)
Proceeds from disposal
of property, plant and
equipment 22 14 30 14
Proceeds from disposal of
marketable securities - 53,914 - 53,914
Proceeds from sales of
subsidiaries shares - 7,287 - 7,287
Net cash (used in) provided
by investing activities $(17,316) $40,523 $(12,775) $38,627
CASH FLOWS FROM FINANCING
ACTIVITIES
Cash dividends paid $(15,815) $(9,409) $(25,124) $(26,048)
Proceeds from entrusted
loan 8,166 - 8,166 -
Repayment of bank loans (2,225) (437) (2,648) (875)
Net cash used in
financing activities $(9,874) $(9,846) $(19,606) $(26,923)
Net increase in cash and
cash equivalents 3,576 59,402 (4,376) 47,146
Cash and cash equivalents
at beginning of period 267,212 208,979 272,459 221,084
Effect of exchange rate
changes on cash and cash
equivalents 1,066 (93) 3,771 58
Cash and cash equivalents
at end of period $271,854 $268,288 $271,854 $268,288
NAM TAI ELECTRONICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
FOR THE PERIODS ENDED JUNE 30, 2008 AND 2007
(In Thousands of US Dollars)
1. The entrusted loan represents the loan arrangement between two
subsidiaries, Namtai Electronic (Shenzhen) Co. Ltd. (the "entrusting
party") and Jetup Electronic (Shenzhen) Co. Ltd. (the "borrower"), via HSBC
Bank (China) Company Limited, Shenzhen Branch (the "lender").
2. Accumulated other comprehensive income represents foreign currency
translation adjustments and unrealized gain on marketable securities. The
comprehensive income of the Company was $40,170 and $37,124 for the six
months ended June 30, 2008 and June 30, 2007, respectively.
3. Business segment information - The Company operates primarily in three
segments, the Consumer Electronic and Communication Products ("CECP") segment,
Telecommunication Component Assembly ("TCA") segment, and the LCD Products
("LCDP") segment.
Unaudited Unaudited
Three months ended Six months ended
June 30 June 30
2008 2007 2008 2007
NET SALES :
- CECP $73,391 $75,732 $143,178 $130,291
- TCA 51,876 99,846 111,158 220,008
- LCDP 20,901 22,252 38,961 39,102
Total net sales $146,168 $197,830 $293,297 $389,401
NET INCOME :
- CECP $7,284 $35,397 $14,942 $39,980
- TCA 2,088 3,140 4,201 7,161
- LCDP (135) 369 (98) 564
- Corporate 2,567 (101) 21,125 (501)
Total net income $11,804 $38,805 $40,170 $47,204
Unaudited Audited
June 30, Dec. 31,
2008 2007
IDENTIFIABLE ASSETS BY SEGMENT:
- CECP $216,740 $212,098
- TCA 113,769 150,963
- LCDP 69,046 64,628
- Corporate 122,277 117,129
Total assets $521,832 $544,818
4. A summary of the net sales, net income and long-lived assets by
geographic areas is as follows:
Unaudited Unaudited
Three months ended Six months ended
June 30 June 30
2008 2007 2008 2007
NET SALES FROM OPERATIONS
WITHIN:
-PRC, excluding Hong Kong
and Macao:
Unaffiliated customers $146,168 $197,830 $293,297 $389,401
Intercompany sales 38 42 118 149
-Intercompany eliminations (38) (42) (118) (149)
Total net sales $146,168 $197,830 $293,297 $389,401
NET INCOME FROM OPERATIONS
WITHIN:
-PRC, excluding Hong Kong $6,377 $33,370 $11,253 $37,370
and Macao
-Hong Kong & Macao 5,427 5,435 28,917 9,834
Total net income $11,804 $38,805 $40,170 $47,204
Unaudited Audited
June 30, Dec. 31,
2008 2007
LONG-LIVED ASSETS WITHIN:
-PRC, excluding Hong Kong and Macao $104,216 $98,441
-Hong Kong and Macao 194 158
Total long-lived assets $104,410 $98,599
SOURCE Nam Tai Electronics, Inc.
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Related links:
http://www.namtai.com
CONTACT:
Investors, John Farina, +853-2835-6333, or
Fax, +853-2835-6262, shareholder@namtai.com
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