MACAO, Nov. 3 /PRNewswire-FirstCall/ -- Nam Tai Electronics, Inc.
("Nam Tai" or the "Company") (NYSE Symbol: NTE) today announced its
unaudited results for the third quarter and nine months ended
September 30, 2008. KEY HIGHLIGHTS (In thousands of US Dollars,
except per share data, percentages and as otherwise stated)
Quarterly Results Nine Months Results Q3 2008 Q3 2007 YoY(%) 9M
2008 9M 2007 YoY(%) Net sales $160,534 $204,485 (21.5) $453,831
$593,886 (23.6) Gross profit $15,738 $26,038 (39.6) $56,030 $65,984
(15.1) % of sales 9.8% 12.7% - 12.3% 11.1% - Operating income
$4,421 $13,940 (68.3) $20,841 $32,991 (36.8) % of sales 2.8% 6.8% -
4.6% 5.6% - per share (diluted) $0.10 $0.31 (67.7) $0.47 $0.74
(36.5) Net income $4,912 $12,694 (61.3) $45,082 $59,898 (24.7) % of
sales 3.1% 6.2% - 9.9% 10.1% - Basic earnings per share $0.11 $0.28
(60.7) $1.01 $1.35 (25.2) Diluted earnings per share $0.11 $0.28
(60.7) $1.01 $1.34 (24.6) Weighted average number of shares ('000)
44,804 44,804 - 44,804 44,509 - Basic 44,806 44,805 - 44,806 44,805
- Diluted 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 exclude 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) data and number of shares) Three
months ended Nine months ended September 30, September 30, 2008
2007 2008 2007 per per per per share share share share mil- (dil-
mil- (dil- mil- (dil- mil- (dil- lion uted) lion uted) lion uted)
lion uted) GAAP Operating Income $4.4 $0.10 $13.9 $0.31 $20.8 $0.47
$33.0 $0.74 Add back: -- share-based - - - - 1.2 0.03 0.3 0.01
compensation expenses(a) Non-GAAP Operating Income $4.4 $0.10 $13.9
$0.31 $22.0 $0.50 $33.3 $0.75 GAAP Net Income $4.9 $0.11 $12.7
$0.28 $45.1 $1.01 $59.9 $1.34 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)
("Tele-Art")( c ) - - - - (2.9) (0.07) - - -- gain on disposal of
marketable securities - - - - - - (28.0) (0.63) Non-GAAP Net Income
$4.9 $0.11 $12.7 $0.28 $23.2 $0.52 $31.8 $0.71 Weighted average
number of shares - diluted ('000) 44,806 44,805 44,806 44,805
Notes: (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 ) Other income totaling
approximately $2.9 million was reported 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.'s liquidator of 477,319 Nam Tai shares owned
by Tele-Art and was paid to the Company 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. THIRD QUARTER REVIEW Sales in the third
quarter of 2008 were $160.5 million, a decrease of 21.5% as
compared to sales of $204.5 million in the third quarter of 2007,
mainly as a consequence of the continuing decline in business from
the Company's telecommunication component assembly ("TCA") segment,
a trend we have experienced since 2007 and which has continued and
accelerated as a result of declining demand encountered in the
mobile phone market and persistent pressure to lower unit prices.
Net sales in the TCA segment for the third quarter of 2008
decreased by 20.0% compared to the same quarter of 2007. Sales of
products in our liquid crystal display ("LCD") product ("LCDP")
segment and from our consumer electronic and communication products
("CECP") segment also decreased, by 6.0% and 27.0% respectively,
during the third quarter of 2008, as compared to sales in the
corresponding quarter of 2007. The drop in sales in our LCDP
segment was mainly a consequence of the decrease in sales of our
LCD module products. Sales in our CECP segment were principally
affected by a decrease in sales of educational products and home
entertainment devices. The Company's gross profit in the third
quarter of 2008 was $15.7 million, a decrease of 39.6% as compared
to $26.0 million in the third quarter of 2007, primarily resulting
from the decline in 2008 sales. Gross profit margin in the third
quarter of 2008 was 9.8% as compared to 12.7% in the third quarter
of 2007. The lower margin was also caused by the increase in
factory overhead costs and a shift of sales mix as relatively
higher margin products, such as educational products and home
entertainment devices, represented a smaller percentage of our
quarterly sales in 2008. Operating income in the third quarter of
2008 was $4.4 million, or $0.10 per share (diluted), compared to
operating income of $13.9 million, or $0.31 per share (diluted) in
the third quarter of 2007. Net income in the third quarter of 2008
was $4.9 million, compared to net income of $12.7 million in the
third quarter of 2007. Basic and diluted earnings per share in the
third quarter of 2008 were $0.11 per share, compared to basic and
diluted earnings per share of $0.28 in the third quarter of 2007.
For the nine months ended September 30, 2008, Nam Tai's net sales
were $453.8 million, a decrease of 23.6% as compared to $593.9
million in the same period last year. Gross profit was $56.0
million, a decrease of 15.1% as compared to $66.0 million in the
same period last year. Operating income for the first nine months
in 2008 decreased 36.8% to $20.8 million, or $0.47 per share
(diluted), compared to $33.0 million, or $0.74 per share (diluted),
in the same period last year. Net income was $45.1 million, or
$1.01 per share (diluted), a decrease of 24.7% as compared to $59.9
million or $1.34 per share (diluted) in the same period of last
year. The Company's financial position remained strong at the end
of the third quarter of 2008, with $250.5 million of cash and cash
equivalents at September 30, 2008. During the third quarter, the
Company made capital expenditures of $5.8 million and paid cash
dividends of $9.8 million to shareholders of the Company and $2.8
million to minority shareholders of NTEEP. Besides, the Company
continues to exercise rigorous corporate governance and control
policies and is not involved in trading of any debt securities or
financial derivative products. NON-GAAP FINANCIAL INFORMATION
Non-GAAP operating income for the first nine months in 2008 was
$22.0 million, or $0.50 per share (diluted), compared to non-GAAP
operating income of $33.3 million, or $0.75 per share (diluted) for
the same period last year. Non-GAAP net income for the first nine
months in 2008 was $23.2 million or $0.52 per share (diluted), a
decrease of 27.0% as compared to $31.8 million, or $0.71 per share
(diluted), for the same period last year. COMPANY OUTLOOK In 2008,
global economic conditions have experienced a downturn from the
sequential effects of the subprime lending crisis, general credit
market crisis, collateral effects on the finance and banking
industries, volatile energy costs, concerns about inflation, slower
economic activity, decreased consumer confidence, reduced corporate
profits and capital spending, adverse business conditions and
liquidity concerns. These conditions make it difficult for our
customers, our vendors and us to forecast and plan future business
activities or expansion accurately, and they appear to have caused
and may continue to cause, companies worldwide to slow spending
generally and our customers to slow ordering and spending on our
products specifically. If our customers' markets continue to
deteriorate because of these macroeconomic effects, our business,
financial condition and results of operations will in turn likely
be materially and adversely affected. We cannot predict the timing
or duration of the economic slowdown or the timing or strength of
any subsequent economic recovery of markets worldwide or in the
electronics manufacturing services industry in which we serve. The
global adverse economic conditions we currently face could result,
and we expect, barring an unexpectedly swift reversal of global
economic trends, will result, in negative effects to our results of
operations over the next several quarters. The business environment
for us is made even more difficult as we continue to face factors
that have adversely affected our operations such as the
appreciation of the exchange rate of the renminbi to the US dollar,
and the adverse effects of changing tax and labor laws in the
People's Republic of China ("PRC") and the resulting increases in
our overhead expenses and income taxes. Under these circumstances,
management has continued our strategy to concentrate our efforts to
improve manufacturing efficiencies, broaden our product offerings
and diversify our customer base. In addition, we are planning to
streamline our supporting service team in Hong Kong and Macao to
reduce overhead costs and accelerate our efforts to strengthen
management controls. In operations, dealing effectively with
competitive pressures to reduce unit pricing and with short product
lifecycles have always been, and remain, our challenge. The Company
plans to concentrate on production efficiencies and improving
resources utilization in order to foster Nam Tai's ability to adapt
readily to new product development and new requirements of
customers. EXPANSION PROJECTS Construction of Nam Tai's new factory
building in Wuxi, Jiangsu Province of the PRC, the first of the
Company's three planned expansion projects, continues on schedule
with completion still targeted for the first half of 2009 in order
for the Company to be positioned to begin mass production in
mid-2009. However, in view of prevailing global economic conditions
and the emerging uncertainty in the business climate, management is
giving serious consideration to postponing implementation of the
second two stages of Nam Tai's expansion plan consisting of the
construction of a new factory in the Shenzhen Guangming Hi-Tech
Industrial Park and the development of the Company's second real
estate site in Wuxi. The Company will reconsider the resumption of
these expansion plans in mid-2009 by taking into account of the
global economic conditions and business development of the Company.
SUPPLEMENTARY INFORMATION (UNAUDITED) IN THE THIRD QUARTER OF 2008
1. Quarterly Sales Breakdown (In thousands of US Dollars, except
percentage information) YoY(%) YoY(%) (Quarterly Quarter 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 160,534
204,485 (21.5) (23.6) 4th Quarter - 186,936 - - Total 453,831
780,822 2. Breakdown of Net Sales by Product Segment (as a
percentage of Total Net Sales) 2008 2007 Q3 YTD Q3 YTD Segments (%)
(%) (%) (%) Consumer Electronic and Communication Products 41 % 46
% 44 % 37 % Telecommunication Component Assembly 45 % 41 % 44 % 52
% LCD Products 14 % 13 % 12 % 11 % 100 % 100 % 100 % 100 % 3. Key
Highlights of Financial Position As at September 30, As at December
31, 2008 2007 2007 Cash on hand (a) $250.5 million $257.7 million
$272.5 million Ratio of cash (a) to current liabilities 1.61 1.74
1.87 Current ratio 2.69 2.81 2.83 Ratio of total assets to total
liabilities 3.52 3.63 3.70 Return on equity 17.8% 24.3% 21.5% Ratio
of total liabilities to equity 0.45 0.44 0.45 Debtors turnover 75
days 53 days 45 days Inventory turnover 23 days 17 days 17 days
Average payable period 81 days 59 days 56 days Note: (a) Includes
cash equivalents. DIVIDENDS 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 is as follows: Dividend Quarterly (per Payment Record
Date Scheduled Payment Date share) Q1/08 March 31, Paid on or
before $0.22 2008 April 21, 2008 Q2/08 June 30, Paid on or before
$0.22 2008 July 21, 2008 Q3/08 September 30, Paid on or before
$0.22 2008 October 21, 2008 Q4/08 December 31, On or before $0.22
2008 January 21, 2009 Full Year 2008 $0.88 APPOINTMENT OF NEW
PRESIDENT AND CHIEF EXECUTIVE OFFICER (ACTING) Mr. Masaaki
Yasukawa, Nam Tai's Chief Executive Officer had tendered his
resignation as Chief Executive Officer of the Company with
immediate effect for personal reasons related to his family. Nam
Tai's Board accepted Mr. Yasukawa's resignation and expressed
sincere gratitude to him for his valuable contributions and
guidance during his service to Nam Tai. Ms. Wong Kuen Ling, Karene
(Karene Wong), has been appointed as President and Chief Executive
Officer (Acting) of Nam Tai with effect from November 1, 2008. Ms.
Wong joined the Company in June 1989. In January 2001, Ms. Wong was
promoted to managing director of a subsidiary of Nam Tai. She later
held the position of chairman of NTEEP. After the reorganization of
Nam Tai Group in 2007, she was re-designated as Chief Executive
Officer of the NTEEP business unit, responsible for overseeing the
overall business of the NTEEP business unit. Nam Tai's board of
directors believes that Ms. Wong's long service with Nam Tai and to
the NTEEP Group and her familiarity and experience with its
operations qualifies her for the position as the Company's
President and Chief Executive Officer (Acting) and is confident
that she will exhibit the same abilities, dedication and acumen
that she has demonstrated in each of the positions she has
undertaken during her rise as a Nam Tai executive. FORWARD-LOOKING
STATEMENTS AND FACTORS THAT COULD CAUSE OUR SHARE PRICE TO DECLINE
Statements in this press release, such as management's plans to
concentrate on production efficiencies and improving resources
utilization in order to foster Nam Tai's ability to adapt readily
to new product development and the evolving and new requirements of
existing and new customers 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 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 on production efficiencies or
resources utilization will achieve material improvements in
production efficiencies or resources utilization, translate into
increased sales, maintain or increase orders from existing
customers, attract orders from new customers, improve or maintain
Nam Tai's profitability or profit margins or overcome or cope with
adverse global economic conditions generally or the fallout from
such conditions on Nam Tai's business specifically, increasing
taxes and labor costs from new tax and labor legislation in the
PRC, whether management's estimates of when construction of Nam
Tai's new manufacturing facility in Wuxi, Jiangsu Province, PRC
will be completed and the new facility available for production
will prove true, and whether material revenues from production at
Nam Tai's new Wuxi facility when construction is completed 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 to complete construction and
adequately staff and equip its added Wuxi manufacturing facilities.
Product orders and Nam Tai's operating income, available cash, cash
flows, net income and levels of capital expenditures may be
adversely affected by numerous factors including adverse global
economic conditions generally and the growing uncertainties and
fears regarding the world's and nations' economies, Nam Tai's
dependence on a few large customers; intense competition in the
electronics industry in which the Company participates,
particularly in markets that place 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 and elsewhere globally; the timing and amount
of significant orders from customers; Nam Tai's success at
attracting new 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, the financial condition of Nam
Tai's customers and vendors; the availability and increasing costs
of materials and other components needed to manufacture Nam Tai's
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 planned new Wuxi facility
or to continue existing operations, other unexpected project delays
or unanticipated cost increases; risks of expanding into a new area
of the PRC where Nam Tai's has not yet conducted business,
diversion of management's attention to expansion and its management
to a new location 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 that cause 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 to adversely affect, 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, our 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 October 31, 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 be 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. NAM TAI ELECTRONICS, INC. CONDENSED CONSOLIDATED
STATEMENTS OF INCOME FOR THE PERIODS ENDED SEPTEMBER 30, 2008 AND
2007 (In Thousands of US Dollars except share and per share data)
Unaudited Unaudited Three months ended Nine months ended September
30 September 30 2008 2007 2008 2007 Net sales $160,534 $204,485
$453,831 $593,886 Cost of sales 144,796 178,447 397,801 527,902
Gross profit 15,738 26,038 56,030 65,984 Costs and expenses
Selling, general and administrative expenses 8,484 9,489 27,315
25,782 Research and development expenses 2,833 2,609 7,874 7,211
11,317 12,098 35,189 32,993 Operating Income 4,421 13,940 20,841
32,991 Other income, net 244 1,071 6,731 1,394 Gain on disposal of
marketable securities - - - 43,815 Gain on sales of subsidiaries'
shares - - 20,206 390 Interest income 1,583 2,349 4,873 6,823
Interest expense (103) (121) (246) (331) Income before income taxes
and minority interests 6,145 17,239 52,405 85,082 Income taxes
(351) (1,211) (1,852) (5,125) Income before minority interests
5,794 16,028 50,553 79,957 Minority interests (882) (3,334) (5,471)
(20,059) Net income $4,912 $12,694 $45,082 $59,898 Earnings per
share Basic $0.11 $0.28 $1.01 $1.35 Diluted $0.11 $0.28 $1.01 $1.34
Weighted average number of shares ('000') Basic 44,804 44,804
44,804 44,509 Diluted 44,806 44,805 44,806 44,805 NAM TAI
ELECTRONICS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS AS AT
SEPTEMBER 30, 2008 AND DECEMBER 31, 2007 (In Thousands of US
Dollars) Unaudited Audited September 30 December 31 2008 2007
ASSETS (Note) Current assets: Cash and cash equivalents $250,508
$272,459 Accounts receivable, net 124,568 95,802 Entrusted loan
receivable (Note 1) 8,185 - Inventories 32,739 32,356 Prepaid
expenses and other receivables 3,820 5,803 Income tax recoverable -
5,483 Deferred tax assets - current 1,257 54 Total current assets
421,077 411,957 Property, plant and equipment, net 90,978 94,669
Land use right 13,667 3,930 Deposits for property, plant and
equipment 555 536 Prepayment for land use right - 9,019 Goodwill
20,296 20,296 Deferred tax assets 3,498 3,192 Other assets 1,219
1,219 Total assets $551,290 $544,818 LIABILITIES AND SHAREHOLDERS'
EQUITY Current liabilities: Notes payable $ - $4,580 Long-term bank
loans - current portion - 1,990 Entrusted loan payable (Note 1)
8,185 - Accounts payable 117,580 107,326 Accrued expenses and other
payables 19,434 21,690 Dividend payable 9,856 9,509 Income tax
payable 928 556 Total current liabilities 155,983 145,651 Long-term
bank loans - non-current portion - 1,558 Deferred tax liabilities
566 - Total liabilities 156,549 147,209 Minority interests 48,088
67,428 Shareholders' equity: Common shares 448 448 Additional
paid-in capital 282,855 281,895 Retained earnings 63,358 47,846
Accumulated other comprehensive loss (Note 2) (8) (8) Total
shareholders' equity 346,653 330,181 Total liabilities and
shareholders' equity $551,290 $544,818 Note: Information extracted
from the audited financial statements is 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
SEPTEMBER 30 2008 AND 2007 (In Thousands of US Dollars) Unaudited
Unaudited Three months Nine months ended ended September 30
September 30 2008 2007 2008 2007 CASH FLOWS (USED IN) FROM
OPERATING ACTIVITIES Net income $4,912 $12,694 $45,082 $59,898
Adjustments to reconcile net income to net cash (used in) provided
by operating activities: Depreciation and amortization of 5,433
5,518 16,744 15,831 property, plant and equipment and land use
right Net loss (gain) on disposal of property, plant and equipment
3 (21) 5 23 Dividend withheld - - (305) - Gain on disposal of
marketable securities - - - (43,815) Gain on sales of subsidiaries'
sales - - (20,206) (390) Share-based compensation expenses 48 36
1,206 353 Minority interests 882 3,334 5,471 20,059 Deferred income
taxes (574) (44) (943) (1,915) Unrealized exchange gain (257)
(1,450) (3,940) (442) Changes in current assets and liabilities:
(Increase) decrease in accounts receivable (43,473) (14,082)
(28,917) 1,927 (Increase) decrease in inventories (10,482) 3,715
(383) (2,248) (Increase) decrease in prepaid expenses and other
receivables (103) (1,455) 1,902 (1,746) Decrease (increase) in
income taxes recoverable 3,544 (5,204) 5,439 (2,383) (Decrease)
increase in notes payable (2,571) (4,889) (4,580) 688 Increase
(decrease) in accounts payable 39,880 1,766 10,254 (12,912)
Increase (decrease) in accrued expenses and other payables 30 1,724
(2,219) 3,456 (Decrease) increase in income tax payable (229) (293)
526 1,473 Total adjustments (7,869) (11,345) (19,946) (22,041) Net
cash (used in) provided by operating activities $(2,957) $1,349
$25,136 $37,857 CASH FLOWS (USED IN) FROM INVESTING ACTIVITIES Net
cash inflow from disposal of subsidiaries - - 6,671 - Purchase of
property, plant and equipment (5,801) (2,716) (13,469) (10,436)
Decrease (increase) in deposits for purchase of property, plant and
equipment 725 (794) (224) (1,118) Increase in other assets - (36) -
(36) Increase in prepayment for land use right - - (663) (736)
Increase in entrusted loan receivable (19) - (8,185) - Acquisitions
of additional shares in subsidiaries (876) - (2,906) (13,808)
Proceeds from disposal of property, plant and equipment 1 412 31
426 Proceeds from disposal of marketable securities - - - 53,914
Proceeds from sales of subsidiaries' shares - - - 7,287 Net cash
(used in) provided by investing activities $(5,970) $(3,134)
$(18,745) $35,493 CASH FLOWS USED IN FINANCING ACTIVITIES Cash
dividends paid $(12,695) $(12,440) $(37,819)$(38,488) Proceeds from
entrusted loan 19 - 8,185 - Repayment of bank loans - (437) (2,648)
(1,312) Proceeds from bank loans - 2,670 - 2,670 Net cash used in
financing activities $(12,676) $(10,207) $(32,282) $(37,130) Net
(decrease) increase in cash and cash equivalents (21,603) (11,992)
(25,891) 36,220 Cash and cash equivalents at beginning of period
271,854 268,288 272,459 221,084 Effect of exchange rate changes on
cash and cash equivalents 257 1,450 3,940 442 Cash and cash
equivalents at end of period $250,508 $257,746 $250,508 $257,746
NAM TAI ELECTRONICS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL
INFORMATION(Unaudited) FOR THE PERIODS ENDED SEPTEMBER 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. as the entrusting party and Jetup Electronic
(Shenzhen) Co., Ltd. as the borrower, via HSBC Bank (China) Company
Limited, Shenzhen Branch as the lender. 2. Accumulated other
comprehensive loss represents foreign currency translation
adjustments. The comprehensive income of the Company was $45,082
and $49,818 for the nine months ended September 30, 2008 and
September 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
Nine months ended September 30 September 30 2008 2007 2008 2007 NET
SALES : - CECP $65,884 $90,275 $209,062 $220,566 - TCA 72,557
90,702 183,715 310,710 - LCDP 22,093 23,508 61,054 62,610 Total net
sales $160,534 $204,485 $453,831 $593,886 NET INCOME (LOSS) : -
CECP $6,530 $8,835 $21,472 $48,815 - TCA (545) 3,745 3,656 10,906 -
LCDP (317) 282 (415) 846 - Corporate (756) (168) 20,369 (669) Total
net income $4,912 $12,694 $45,082 $59,898 Unaudited Audited Sep 30,
Dec. 31, 2008 2007 IDENTIFIABLE ASSETS BY SEGMENT: - CECP $216,928
$212,098 - TCA 148,304 150,963 - LCDP 66,862 64,628 - Corporate
119,196 117,129 Total assets $551,290 $544,818 NAM TAI ELECTRONICS,
INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION
(Unaudited) FOR THE PERIODS ENDED SEPTEMBER 30, 2008 AND 2007 (In
Thousands of US Dollars) 4. A summary of the net sales, net income
and long-lived assets by geographic areas is as follows: Unaudited
Unaudited Three months ended Nine months ended September 30
September 30 2008 2007 2008 2007 NET SALES FROM OPERATIONS WITHIN:
- PRC, excluding Hong Kong and Macao: Unaffiliated customers
$160,534 204,485 $453,831 593,886 Intercompany sales 18 63 136 212
- Intercompany eliminations (18) (63) (136) (212) Total net sales
$160,534 $204,485 $453,831 $593,886 NET INCOME FROM OPERATIONS
WITHIN: - PRC, excluding Hong Kong and Macao $1,288 $8,555 $12,541
$45,925 - Hong Kong & Macao 3,624 4,139 32,541 13,973 Total net
income $4,912 $12,694 $45,082 $59,898 Unaudited Audited Sep 30,
Dec. 31, 2008 2007 LONG-LIVED ASSETS WITHIN: - PRC, excluding Hong
Kong and Macao $104,448 $98,441 - Hong Kong and Macao 197 158 Total
long-lived assets $104,645 $98,599 (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. DATASOURCE: Nam Tai Electronics,
Inc. CONTACT: Investors, Anthony Chan, TEL: (853)-2835-6333, FAX:
(853)-2835- 6262, Web site: http://www.namtai.com/
Copyright