MACAO, PRC, Feb. 4 /PRNewswire-FirstCall/ -- Nam Tai Electronics,
Inc. ("Nam Tai" or the "Company") (NYSE Symbol: NTE) today
announced its unaudited results for the fourth quarter and year
ended December 31, 2007. KEY HIGHLIGHTS (In thousands of US
Dollars, except per share data, percentages and as otherwise
stated) Quarterly Results Year Results Q4 2007 Q4 2006 YoY 12M 2007
12M 2006 YoY(%) (%) Net sales $186,936 $229,647 (18.6) $780,822
$870,174 (10.3) Gross profit $21,034 $22,010 (4.4) $87,018 $86,221
0.9 % of sales 11.3% 9.6% - 11.1% 9.9% - Operating income (loss)
$7,679 $(2,604) n/a $40,670 $42,480 (4.3) % of sales 4.1% (1.1)% -
5.2% 4.9% - per share (diluted) $0.17 $(0.06) n/a $0.91 $0.97 (6.2)
Net income (loss) $9,605 $(2,324) - $69,503 $40,756 70.5 % of sales
5.1% (1.0)% - 8.9% 4.7% - Basic earnings (loss) per share $0.21
$(0.05) n/a $1.56 $0.93 67.7 Diluted earnings (loss) per share
$0.21 $(0.05) n/a $1.55 $0.93 66.7 Weighted average number of
shares ('000') Basic 44,804 43,787 - 44,584 43,702 - Diluted 44,804
44,251 - 44,805 43,858 - In addition to disclosing results
determined in accordance with accounting principles generally
accepted in the United States ("US GAAP") above, management
utilizes a measure of operating income, net income and earnings per
share on a non-GAAP basis that excludes certain income/expenses as
below to better assess operating performance. Those non-GAAP
financial measures exclude certain items, such as gains on disposal
of marketable securities, gains on disposal of assets held for
sale, loss on marketable securities arising from split share
structure reform, losses arising from judgment to reinstate
redeemed shares, or other infrequent or unusual items. 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 data prepared
in accordance with US GAAP as measures of our profitability 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 Nine months ended December
31, December 31, 2007 2006 2007 2006 million per million per
million per million per share share share share (diluted) (diluted)
(diluted) (diluted) GAAP Operating Income (loss) 7.7 0.17 (2.6)
(0.06) 40.7 0.91 42.5 0.97 Add back/(Less): - gain on disposal of
asset held for sale - - - - - - (9.3)(0.21) - losses arising from
judgment to reinstate redeemed shares Tele-Art(b) - - 14.5 0.33 - -
14.5 0.33 - expenses in relation to reorganization of subsidiaries
1.9 0.04 - - 1.9 0.04 - - Non-GAAP Operating Income 9.6 0.21 11.9
0.27 42.6 0.95 47.7 1.09 GAAP Net Income 9.6 0.21 (2.3) (0.05) 69.5
1.55 40.8 0.93 (loss) Add back/(Less): - gain on disposal of asset
held for sale - - - - - - (9.3)(0.21) - loss on marketable
securities arising from split share structure reform - - - - - -
1.3 0.03 - gain on disposal of marketable securities (a) - - - -
(28.0) (0.63) - - - gain on sales of subsidiaries' shares - - - -
(0.4) (0.01) - - - losses arising from judgment to reinstate
redeemed shares - Tele-Art(b) - - 14.5 0.33 14.5 0.33 - expenses in
relation to reorganization of subsidiaries, net after minority
interest 1.6 0.04 - - 1.6 0.04 - - Non-GAAP Net Income 11.2 0.25
12.2 0.28 42.7 0.95 47.3 1.08 Weighted average number of shares -
diluted ('000) 44,804 44,251 44,805 43,858 Note: (a) As announced
on April 24, 2007, the Company, through a subsidiary of one of its
Hong Kong listed subsidiaries, Nam Tai Electronic & Electrical
Products Limited ("NTEEP"), disposed of all of its 80,600,173 A
Shares of TCL Corporation on April 20 and April 23, 2007 through
market sales on the Shenzhen Stock Exchange for an aggregate of
approximately $54 million, resulting in a one-off gain of
approximately $28 million net of the portion attributable to
minority interests. (b) Losses arising from the judgment to
reinstate redeemed shares were determined for the three months and
year ended December 31, 2006 after taking into account the total
issue price of the 1,017,149 redeemed shares at the market price of
Nam Tai shares on November 20, 2006 (the date of the Privy Council
judgment); the estimated costs and expenses of BOC and former
Tele-Art, Inc. ("Tele-Art")'s liquidator that Nam Tai expects will
be claimed in connection with the Privy Council litigation
proceedings; and a reversal of amounts Nam Tai previously reserved
in its financial statements for potential losses to be incurred as
result of the share redemptions (see discussion under "Tele-Art
Litigation" below). FOURTH QUARTER AND YEAR END REVIEW Primarily as
a consequence of a decline in business from the telecommunication
components assembly ("TCA") segment, sales in the fourth quarter
and for the year ended December 31, 2007 decreased 18.6% and 10.3%,
respectively, as compared to the fourth quarter and year ended
December 31, 2006. The TCA segment is dependent on demand in the
mobile phone market and one of our indirect customers suffered a
substantial drop in sales volume in its mobile devices business in
Asia and Europe, which continued into the fourth quarter and thus
far is showing no signs of reversing in 2008. Thus, we and other
participants in the mobile phone supply chain were inevitably
affected in the quarter and year 2007 and we expect this adverse
trend to continue, at least in the near term. During the fourth
quarter and entire year, the business environment was extremely
competitive and challenging, from our efforts focusing on sales in
other segments, we were able to increase sales in both our LCDP
segment, consisting of liquid crystal display panels and modules,
which grew by 29.0% and 29.7% during the fourth quarter and year
ended December 31, 2007, respectively, and in our consumer
electronics and communication products ("CECP") segment, which grew
by 29.2% and 59.1% during the fourth quarter and year ended
December 31, 2007, respectively. Growth in our CECP segment was
primarily driven from increased sales of mobile phone accessories,
such as speaker stands and headsets containing Bluetooth(R)
wireless technology*, educational devices such as FLY Fusion(TM)
Pentop Computers* and home entertainment products such as gaming
accessories. The increases in sales from our LCDP and CECP
segments, however, were not sufficient to offset the decreases in
sales from our TCA product segment. Net sales in the fourth quarter
of 2007 were $186.9 million, a decrease of 18.6% as compared to
$229.6 million in the fourth quarter of 2006. Gross profit in the
fourth quarter of 2007 was $21.0 million, a decrease of 4.4% as
compared to $22.0 million in the fourth quarter of 2006, primarily
as the result of the decline in sales in our TCA product segment.
Operating income in the fourth quarter of 2007 was $7.7 million, or
$0.17 per share (diluted), compared to operating loss of $2.6
million, or $0.06 per share (diluted) in the fourth quarter of
2006. Our 2006 fourth quarter operating loss resulted from the
judgment requiring us to reinstate our shares that we redeemed from
Tele-Art. Basic and diluted earnings per share in the fourth
quarter of 2007 were $0.21 per share, compared to a loss per share
of $0.05 in the fourth quarter of 2006. For the year ended December
31, 2007, Nam Tai's net sales were $780.8 million, a decrease of
10.3% as compared to $870.2 million in the year 2006. Gross profit
was $87.0 million, an increase of 0.9% as compared to $86.2 million
in the year 2006. Operating income for the year 2007 decreased 4.3%
to $40.7 million, or $0.91 per share (diluted), compared to $42.5
million, or $0.97 per share (diluted), in the year 2006. Net Income
for year 2007 was $69.5 million, or $1.55 per share (diluted), an
increase of 70.5% as compared to $40.8 million or $0.93 per share
(diluted) in the year 2006. The Company continues to maintain a
strong financial position. It has a low debt to equity ratio of
only 2.4%. Net cash provided by operating activities in the fourth
quarter of 2007 was $31.2 million. The Company ended the quarter
with $272.5 million of cash on hand even after capital expenditures
of $3.3 million, prepayment for a land purchase of $6.8 million and
dividends accrued in the third quarter of $9.3 million that we paid
to our shareholders on October 21, 2007. (*) Note with respect to
our use of "Bluetooth" and FLY Fusion in this press release: 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. The
trademark Fly Fusion is owned by Leapfrog. NON-GAAP FINANCIAL
INFORMATION Non-GAAP operating income for the fourth quarter of
2007 was $9.6 million, or $0.21 per share (diluted), compared to
non-GAAP operating income of $11.9 million, or $0.27 per share
(diluted), in the fourth quarter of 2006. Non-GAAP net income for
the fourth quarter of 2007 decreased by 8.2% over the fourth
quarter of 2006 to $11.2 million, or $0.25 per share (diluted),
compared to $12.2 million, or $0.28 per share (diluted), in the
fourth quarter of 2006. Non-GAAP operating income for the full year
in 2007 was $42.6 million, or $0.95 per share (diluted), compared
to non-GAAP operating income of $47.7 million, or $1.09 per share
(diluted) for the year 2006. Non-GAAP net income for the year 2007
was $42.7 million or $0.95 per share (diluted), a decrease of 9.7%
as compared to $47.3 million, or $1.08 per share (diluted), for the
year 2006. COMPANY OUTLOOK The Company is operating in a
challenging business environment, where competition remains intense
and is expected to continue to manifest pricing pressures from
customers. This is expected to pose a significant ongoing challenge
for the electronics manufacturing services industry in the coming
quarters and years. Additionally, we will also have to face issues
such as the continuing appreciation of Renminbi, changing tax and
labour laws in the People's Republic of China ("PRC"), shortages of
electricity supply and increases in overhead expenses resulting
from inflation. We continue to concentrate our efforts to improve
manufacturing efficiencies, broaden our product offerings and
diversify our customer base. Going forward, we are still cautiously
optimistic about our business levels in 2008. In our first quarter
of 2008, we are anticipating steady business levels in the CECP and
LCDP product segments, however, we are anticipating continuing
weakness in demand in the TCA segment. Longer-term, the Company
will strive to improve profitability in our core operations,
especially after the increase in capacities from the production in
the new factory facilities when they are operational. In December
2007, we paid approximately $6.8 million for the land in Shenzhen
Guangming Hi-Tech Industrial Park underlying our previously
announced Shenzhen expansion project, satisfying in full the land
payments required for that project. We are currently awaiting for
the land use right certificate to be issued by PRC Bureau of State
Land and Resource. Pursuant to a competitive bidding process we
implemented in regard to our expansion project in Wuxi, Jiangsu
Province of the PRC, we awarded construction to a local Wuxi
construction company, which we believe has a strong management team
that includes experienced members from both Hong Kong and the PRC.
Construction on this project began in the first quarter of 2008, is
targeted for completion by the end of 2008 with manufacturing
operations scheduled to begin in the early of 2009. SUPPLEMENTARY
INFORMATION (UNAUDITED) IN THE FOURTH QUARTER OF 2007 1. Quarterly
Sales Breakdown (In thousands of US Dollars, except percentage
information) YoY(%) YoY(%) (Quarterly Quarter 2007 2006 (Quarterly)
accumulated) 1st Quarter 191,571 208,358 (8.1) (8.1) 2nd Quarter
197,830 213,653 (7.4) (7.7) 3rd Quarter 204,485 218,516 (6.4) (7.3)
4th Quarter 186,936 229,647 (18.6) (10.3) Total 780,822 870,174 2.
Breakdown of Net Sales by Product Segment (as a percentage of Total
Net Sales) 2007 2006 Q4 YTD Q4 YTD Segments (%) (%) (%) (%)
Consumer Electronic and Communication Products 34% 36% 21% 21%
Telecommunication Component Assembly 55% 53% 72% 72% LCDP 11% 11%
7% 7% 100% 100% 100% 100% 3. Key Highlights of Financial Position
As at December 31, 2007 2006 Cash on hand (a) $272.5 million $221.1
million Marketable securities - $24.4 million Ratio of cash (a) to
current liabilities 1.87 1.36 Current ratio 2.83 2.46 Ratio of
total assets to total liabilities 3.70 3.23 Return on equity 21.5%
13.0% Ratio of total liabilities to equity 0.45 0.52 Debtors
turnover 45 days 49 days Inventory turnover 17 days 14 days Average
payable period 56 days 59 days Note: (a) Includes cash equivalents.
4. Developments in Class Action Litigation As we had previously
reported and announced, the U.S. District Court denied the
plaintiffs' motion for class certification on August 21, 2007. A
conference with the court was held on January 17, 2008 wherein the
plaintiff indicated that he wished to proceed with his case as an
individual, notwithstanding the denial of class certification. The
court ordered that the parties to begin discovery within the next
six months. The damages sought by the plaintiff in an individual
capacity is not material to our financial condition or results of
operations and accordingly we do not intend to provide further
updates on this litigation unless an event occurs during its course
that we believe would be material to investors. 5. Tele-Art/Bank of
China Litigation As previously announced, and in compliance with
the November 2006 decision of the Privy Council of the United
Kingdom, we reinstated 1,017,149 of our common shares that we had
previously redeemed from Tele-Art, registered them on our stock
register in the name of Bank of China Hong Kong Limited ("BOC") and
delivered the share certificates to BOC. We have been advised that
BOC has sold 539,830 of the reinstated shares in early September
2007 and applied the proceeds to the secured debt that BOC claimed
was due to it from Tele-Art. The proceeds from the sale retained by
BOC included the amount it asserted to satisfy the obligation it
claimed from Tele-Art through the date of sale, plus a reserve of
approximately $900,000 for legal costs and expenses that BOC has
claimed for related litigation. BOC has delivered to Tele-Art's
liquidator the 477,319 shares remaining from the reinstated shares
it sold ("Remaining Shares"). Investigations on behalf of the
liquidator seeking to locate and recover additional Tele-Art assets
for its estate in liquidation are ongoing. The liquidator has
authorized us to utilize the cash dividends attributable to the
reinstated shares for the benefit of the estate of Tele-Art (in
Liquidation). We have deposited such cash dividends and will
deposit proceeds from the disposal of the Remaining Shares and any
other assets of Tele-Art's estate that are discovered into a
segregated bank account, from which all future legal costs and
other expenses relating to the liquidation of Tele-Art will be paid
until its liquidation proceedings are concluded. 6. Reorganization
of Nam Tai Group As previously announced, the reorganization of the
Nam Tai Group companies consisting of its Hong Kong Stock
Exchange-listed subsidiaries, NTEEP and J.I.C. Technology Company
Limited was completed in Macao, PRC on December 31, 2007. The
Company is now in the process of reorganizing its internal
structure in order to realize the expected benefits arising from
clear division of its core and non-core businesses, including the
centralization of resources, the efficient exchange of know-how and
technology among the Group's companies, and a reduction of overhead
costs following the reorganization. 7. Appointment of New Chief
Executive Officer Nam Tai is pleased to announce the appointment of
Mr. Masaaki Yasukawa as Chief Executive Officer ("CEO") of the
Company with a commencement date of February 1, 2008. When the
appointment of Mr. Yasukawa as CEO takes effect, he will succeed
Mr. M. K. Koo, who has been serving as Acting CEO since May 2007.
Mr. Koo will continue to serve Nam Tai as a non-executive director
and the Chairman of the Board. Mr. Yasukawa, brings to Nam Tai a
strong foundation in engineering technical support and business
development experience, having over 20 years of service at Seiko
Epson Corporation ("Seiko Epson"), one of Japan's leading
information technology products manufacturers. . Mr. Yasukawa has
strong relationships with various top-tier OEM companies in Japan
and other regions. At Seiko Epson, he served as General Manager of
its New Business Development Unit and originated and implemented
various cross-divisional, multi-functional new business development
programs. In 2003, he transferred to the Epson Business Solution
business unit, where he served as General Manager at Epson Hong
Kong, where he initiated and oversaw programs focusing on
solution-based corporate businesses, targeting Hong Kong, PRC and
other Asian firms. Mr. Yasukawa has a Bachelor of Mechanical
Engineering degree from University of Tokyo, Japan and a Master of
Business Administration degree from University of Michigan, Ann
Arbor, which he received with high distinction. FOURTH QUARTER
RESULTS ANALYST CONFERENCE CALL The Company will hold a conference
call on Monday, February 4, 2008 at 8:00 a.m. Eastern Time for
analysts to discuss the fourth 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 record date for the first
quarter dividend of $0.22 per share is March 31, 2008 and the
payment date is on or before April 21, 2008. Schedule for quarterly
dividends for fiscal year 2008 are as follows: Quarterly Dividend
Payment Record Date Scheduled Payment Date (per share) Q1/08 March
31, 2008 On or before April 21, 2008 $0.22 Q2/08 June 30, 2008 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
concerning management's optimism and first quarter 2008 business
levels, management's estimates of when its expansion projects in
Wuxi, PRC will be available for production, and the benefits to be
obtained there from management's assessment regarding the benefits
expected from the recently completed reorganization of its group
operations and the Company's schedule of dividends to be paid in
fiscal 2008, 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 our 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 management's optimism regarding Nam Tai's
prospects for near-term business levels will be realized,, whether
management's assessment of future demands and market conditions
will prove true and expectancies regarding Nam Tai's position to
meet such demands and requirements, whether the Company can or will
be able to meet the stages of its planned expansion by the dates
currently expected, whether Nam Tai's capital expenditures to
achieve expanded capacity will result in material increases in
revenues or result in increased or any profits and whether future
dividends will actually be declared, or even if declared,
continued, will depend upon future sales orders, the Company's
operating income in future periods, on Nam Tai's ability to contain
manufacturing costs and the actual level of capital expenditures
required for its expansion projects. Whether management's
expectations of benefits to be achieved from the recently completed
reorganization of its group operations will depend on the
successful implementation of the reorganization's goal of clearer
division of Nam Tai's core and non-core businesses, including the
success of the strategies seeking to centralize of resources,
foster the exchange of know-how and technology efficiently among
the Group's companies, and to reduce overhead costs some of which
may not be achieved or, if achieved, may not result in the benefits
expected. 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; Nam Tai being subject to continuing
pressure on its margins; its operating results fluctuating and
lacking predictability, continuing softness in its
telecommunication components assembly segment and the failure to
grow other business segments to compensate for the lacking demand
for such components; risks relating to its doing business in the
PRC such as arising from changes in governmental policies,
taxation, trade regulation, currency exchange rates, increasing
labor costs, inflation and income taxes; 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; 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 and those companies in which Nam
Tai holds marketable securities or other investments; the
availability and increasing costs of materials and other components
needed to manufacture its products; adverse results in litigation,
including its on- going securities class action litigation;
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 to permit expansion or continue existing
operations, other unexpected project delays or unanticipated costs
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 that affect 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 the failure of our
growth, if any, or 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, the sale, availability for sale or the preparations
for the sell, of the reinstated shares on behalf of Tele-Art's
liquidator to satisfy the claims of Tele-Art's creditors 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, 2006 as filed 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 by contacting Nam Tai
using the contact information provided above, or from Nam Tai's
website at http://www.namtai.com/. All information in this press
release is as of February 1, 2008. Nam Tai undertakes no duty 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
sensors modules and PCBAs for headsets containing Bluetooth
wireless technology. 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 has two Hong Kong
listed subsidiaries, Nam Tai Electronic & Electrical Products
Limited ("NTEEP") and J.I.C. Technology Company Limited ("JIC").
Interested investors may go to the website of The Stock Exchange of
Hong Kong at http://www.hkex.com.hk/ to obtain the information. The
stock codes of NTEEP and JIC in The Stock Exchange of Hong Kong are
2633 and 987, respectively. Investors are reminded to exercise
caution when assessing such information and not to deal with the
shares of the Company based solely upon reliance on such
information. NAM TAI ELECTRONICS, INC. CONDENSED CONSOLIDATED
STATEMENTS OF INCOME FOR THE PERIODS ENDED DECEMBER 31, 2007 AND
2006 (In Thousands of US Dollars except share and per share data)
Unaudited Unaudited Three months ended Year ended December 31
December 31 2007 2006 2007 2006 Net sales $186,936 $229,647
$780,822 $870,174 Cost of sales 165,902 207,637 693,804 783,953
Gross profit 21,034 22,010 87,018 86,221 Gain on disposal of asset
held for sale - - - 9,258 Costs and expenses Selling, general and
10,768 8,129 36,550 30,668 administrative expenses Research and
development expenses 2,587 2,020 9,798 7,866 Losses arising from
the judgment - 14,465 - 14,465 to reinstate redeemed shares 13,355
24,614 46,348 52,999 Operating Income (loss) 7,679 (2,604) 40,670
42,480 Other income (expenses), net 825 (504) 2,219 (1,265) Gain on
disposal of marketable securities - - 43,815 - Gain on sales of
subsidiaries' shares - - 390 Loss on marketable securities arising
from split share structure reform - - - (1,869) Interest income
2,340 2,396 9,163 8,542 Interest expense (121) (146) (452) (602)
Income (loss) before income taxes 10,723 (858) 95,805 47,286 and
minority interests Income taxes credit (expense) 1,095 (70) (4,030)
(377) Income (loss) before minority 11,818 (928) 91,775 46,909
interests Minority interests (2,213) (1,396) (22,272) (6,153) Net
income (loss) $9,605 (2,324) $69,503 40,756 Earnings (loss) per
share Basic $0.21 $(0.05) $1.56 $0.93 Diluted $0.21 $(0.05) $1.55
$0.93 Weighted average number of shares ('000') Basic 44,804 43,787
44,584 43,702 Diluted 44,804 44,251 44,805 43,858 NAM TAI
ELECTRONICS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS AS AT
DECEMBER 31, 2007 AND 2006 (In Thousands of US Dollars) Unaudited
Audited December 31 December 31 2007 2006 (Note) ASSETS Current
assets: Cash and cash equivalents $272,459 $221,084 Marketable
securities - 24,360 Accounts receivable, net 95,802 117,561
Inventories 32,356 30,894 Prepaid expenses and other receivables
5,803 2,503 Income tax recoverable 5,483 4,316 Deferred tax assets
- current 54 - Total current assets 411,957 400,718 Property, plant
and equipment, net 94,669 102,721 Land use right 3,930 2,673
Deposits for property, plant and equipment 536 609 Prepayment for
land use right 9,019 2,880 Goodwill 20,296 18,476 Deferred tax
assets 3,192 - Other assets 1,219 1,158 Total assets $544,818
$529,235 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities:
Notes payable $4,580 $4,516 Long-term bank loans - current portion
1,990 1,750 Accounts payable 107,326 125,893 Accrued expenses and
other payables 21,690 13,649 Dividend payable 9,509 16,639 Income
tax payable 556 166 Total current liabilities 145,651 162,613
Long-term bank loans - non-current portion 1,558 1,100 Total
liabilities 147,209 163,713 Minority interests 67,428 48,428
Shareholders' equity: Common shares 448 438 Reinstatement of
redeemed shares - 17,159 Additional paid-in capital 281,895 264,393
Retained earnings 47,846 25,030 Accumulated other comprehensive
income (Note 1) (8) 10,074 Total shareholders' equity 330,181
317,094 Total liabilities and shareholders' equity $544,818
$529,235 Note: Information extracted from the audited financial
statements included in the 2006 Form 20-F of the Company filed with
the SEC on March 19, 2007. NAM TAI ELECTRONICS, INC. CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE PERIODS ENDED
DECEMBER 31, 2007 AND 2006 (In Thousands of US Dollars) Unaudited
Unaudited Three months ended Year ended December 31 December 31
2007 2006 2007 2006 CASH FLOWS FROM OPERATING ACTIVITIES Net income
(loss) $9,605 $(2,324) $69,503 $40,756 Adjustments to reconcile net
income to net cash provided by operating activities: Depreciation
and amortization of property, plant and equipment and land use
right 5,670 4,833 21,501 19,024 Net gain on disposal of property,
plant and equipment (89) (127) (66) (317) Losses arising from
judgment to reinstate redeemed shares - 14,465 - 14,465 Gain on
disposal of marketable securities - - (43,815) - Gain on sales of
subsidiaries' shares - - (390) - Share-based compensation expenses
36 103 389 873 Gain on disposal of asset held for sale - - -
(9,258) Loss on marketable securities arising from split share
structure reform - - - 1,869 Minority interests 2,213 1,396 22,272
6,153 Deferred income taxes (1,331) - (3,246) - Changes in current
assets and liabilities: Decrease in accounts receivable 19,777
10,615 21,704 8,101 Decrease (increase) in inventories 786 1,335
(1,462) 850 (Increase) decrease in prepaid expenses and other
receivables (1,557) 1,173 (3,303) (1,013) Decrease (increase) in
income taxes recoverable 1,216 (118) (1,167) (1,645) (Decrease)
increase in notes payable (609) (1,060) 79 (297) (Decrease)
increase in accounts payable (5,655) (11,769) (18,567) 4,285
Increase (decrease) in accrued expenses and other payables 4,585
1,412 8,041 (3,104) (Decrease) increase in income tax payable
(1,083) - 390 - Others (2,356) (117) (813) (931) Total adjustments
21,603 22,141 1,547 39,055 Net cash provided by operating
activities $31,208 $19,817 $71,050 $79,811 CASH FLOWS FROM
INVESTING ACTIVITIES Purchase of property, plant and equipment
(3,349) (12,684) (13,785) (23,793) Increase in deposits for
purchase of property, plant and equipment 1,191 9,136 73 641
(Increase) decrease in other assets (25) (24) (61) 142 Increase in
prepayment for purchase of land use right (6,796) (2,880) (7,532)
(2,880) Acquisition of additional shares in subsidiaries - -
(13,808) (3,130) Proceeds from disposal of asset held for sale - -
- 20,170 Proceeds from disposal of property, plant and equipment 96
134 522 420 Proceeds from disposal of marketable securities - -
53,914 - Proceeds from sales of subsidiaries shares - - 7,287 - Net
cash (used in) provided by investing activities $(8,883) $(6,318)
$26,610 $(8,430) CASH FLOWS FROM FINANCING ACTIVITIES Cash
dividends paid $(9,308) $(16,638) $(47,796) $(65,923) Repayment of
bank loans (660) (2,910) (1,972) (8,067) Proceeds from bank loans -
- 2,670 3,480 Proceeds from shares issued on exercise of options -
- - 5,439 Net cash used in financing activities $(9,968) $(19,548)
$(47,098) $(65,071) Net increase (decrease) in cash and cash
equivalents 12,357 (6,049) 50,562 6,310 Cash and cash equivalents
at beginning of period 257,746 227,016 221,084 213,843 Effect of
exchange rate changes on cash and cash Equivalents 2,356 117 813
931 Cash and cash equivalents at end of period $272,459 $221,084
$272,459 $221,084 NAM TAI ELECTRONICS, INC. NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) FOR THE PERIODS ENDED
DECEMBER 31, 2007 AND 2006 (In Thousands of US Dollars) 1.
Accumulated other comprehensive income represents foreign currency
translation adjustments and unrealized gain on marketable
securities. The comprehensive income of the Company was $59,421 and
$49,812 for the year ended December 31, 2007 and December 31, 2006,
respectively. 2. 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 panels and modules
("LCDP") segment. Unaudited Unaudited Three months ended Year ended
December 31 December 31 2007 2006 2007 2006 Net sales: - CECP
$63,191 $48,898 $283,757 $178,320 - TCA 102,489 164,275 413,199
627,199 - LCDP 21,256 16,474 83,866 64,655 Total net sales $186,936
$229,647 $780,822 $870,174 Net Income: - CECP $5,703 $3,331 $54,518
$12,254 - TCA 5,043 9,040 15,949 31,424 - LCDP 502 - 1,348 2,575 -
Corporate (1,643) (14,695) (2,312) (5,497) Total net income $9,605
$(2,324) $69,503 $40,756 Unaudited Audited December December 31,
2007 31, 2006 Identifiable assets by SEGMENT: - CECP $203,809
$181,634 - TCA 150,963 170,129 - LCDP 79,790 58,172 - Corporate
110,256 119,300 Total assets $544,818 $529,235 NAM TAI ELECTRONICS,
INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited) FOR THE PERIODS ENDED DECEMBER 31, 2007 AND 2006 (In
Thousands of US Dollars) 3. A summary of the net sales, net income
and long-lived assets by geographic areas is as follows: Unaudited
Unaudited Three months ended Year ended December 31 December 31
2007 2006 2007 2006 Net sales from operations within: - PRC,
excluding Hong Kong and Macao: Unaffiliated customers 186,936
229,647 780,822 870,174 Intercompany sales 41 70 253 418 -
Intercompany eliminations (41) (70) (253) (418) Total net sales
$186,936 $229,647 $780,822 $870,174 Net Income from operations
within: - PRC, excluding Hong Kong and Macao $6,413 $6,180 $52,338
$18,743 - Macao 3,764 (7,777) 20,409 16,833 - Hong Kong (572) (727)
(3,244) 5,180 Total net income $9,605 $(2,324) $69,503 $40,756
Unaudited Audited December December 31, 2007 31, 2006 LONG-LIVED
assets WITHIN: - PRC, excluding Hong Kong and Macao $98,441
$105,123 - Macao 9 39 - Hong Kong 149 232 Total long-lived assets
$98,599 $105,394 DATASOURCE: Nam Tai Electronics, Inc. CONTACT:
Investors, John Farina of Nam Tai Electronics, Inc., 853-2835-6333,
(fax) 853-2835-6262, Web site: http://www.namtai.com/
Copyright