-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PBb8XWryWficitcY999IssTFBtJ79fBBsrSA0OF92+MZhtXDbp9MjOVvzzR+hmQI JSi+iIm2Fm+UiVYvaNC2kQ== 0000947871-05-001447.txt : 20050803 0000947871-05-001447.hdr.sgml : 20050803 20050803065331 ACCESSION NUMBER: 0000947871-05-001447 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20050803 FILED AS OF DATE: 20050803 DATE AS OF CHANGE: 20050803 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NAM TAI ELECTRONICS INC CENTRAL INDEX KEY: 0000829365 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRONIC COMPONENTS, NEC [3679] IRS NUMBER: 000000000 STATE OF INCORPORATION: D8 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 6-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-31583 FILM NUMBER: 05993746 BUSINESS ADDRESS: STREET 1: 116 MAIN STREET STREET 2: 2ND FLOOR CITY: ROAD TOWN, TORTOLA STATE: D8 ZIP: 00000 BUSINESS PHONE: 85223410273 MAIL ADDRESS: STREET 1: C/O PAN PACIFIC I.R. LTD. STREET 2: 999 WEST HASTINGS STREET, SUITE 1790 CITY: VANCOUVER BC STATE: A1 ZIP: V6C 2W2 6-K 1 f6k_080205.txt REPORT OF FOREIGN PRIVATE ISSUER FORM 6-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Report of Foreign Private Issuer Pursuant to Rule 13a-16 or 15d-16 of the Securities Exchange Act of 1934 For the month of August 2005 NAM TAI ELECTRONICS, INC. (Name of the Registrant) 116 Main Street 3rd Floor Road Town, Tortola British Virgin Islands (Address of Principal Executive Offices) (Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.) Form 20-F X Form 40-F --- (Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7).) Yes No X --- --- (Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.) Yes No X --- --- (If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- ) Nam Tai Electronics, Inc. (the "Company") is furnishing under the cover of Form 6-K: Exhibit 99.1: a press release dated August 1, 2005, announcing the Company's unaudited results for the second quarter of 2005. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Nam Tai Electronics, Inc. Date: August 2, 2005 By: /s/ Joseph Li ------------------------------- Name: Joseph Li Title: Chief Executive Officer EX-99.1 2 ex99-1_080205.txt PRESS RELEASE DATED AUG. 1, 2005 [NAM TAI LOGO] SECOND QUARTER NEWS RELEASE - -------------------------------------------------------------------------------- REPRESENTED BY PAN PACIFIC I.R. LTD. CONTACT: Lorne Waldman 1790 - 999 WEST HASTINGS STREET President VANCOUVER, BC, CANADA V6C 2W2 E-MAIL: shareholder@namtai.com TEL:(604) 669-7800 FAX: (604) 669-7816 WEB: www.namtai.com TOLL FREE TEL/FAX: 1-800-661-8831 NAM TAI ELECTRONICS, INC. New Record Sales for Q2 2005, Gross Profit Margin Rebounds to Over 12%, Guidance Exceeded VANCOUVER, CANADA -- August 1, 2005 -- Nam Tai Electronics, Inc. ("Nam Tai" or the "Company") (NYSE Symbol: NTE) today announced its unaudited results for the second quarter ended June 30, 2005. KEY HIGHLIGHTS (In thousands of US Dollars, except as otherwise stated)
- ------------------------------------------------------------------------------------------------------------------------------- Quarterly Results Half-Year Results - ------------------------------------------------------------------------------------------------------------------------------- 2Q2005 2Q2004 YoY(%) 1H2005 1H2004 YoY(%) - ------------------------------------------------------------------------------------------------------------------------------- Net sales 185,277 147,664 25.5 342,200 243,099 40.8 - ------------------------------------------------------------------------------------------------------------------------------- Gross Profit 23,835 22,275 7.0 42,252 36,571 15.5 - ------------------------------------------------------------------------------------------------------------------------------- % of sales 12.9% 15.1% 12.3% 15.0% - ------------------------------------------------------------------------------------------------------------------------------- Income from operations 14,322 13,415 6.8 24,056 20,346 18.2 - ------------------------------------------------------------------------------------------------------------------------------- % of sales 7.7% 9.1% 7.0% 8.4% - ------------------------------------------------------------------------------------------------------------------------------- per share (diluted) $0.33 $0.31 6.5 $0.56 $0.48 16.7 - ------------------------------------------------------------------------------------------------------------------------------- Net income(a) 5,997 83,027 (92.8) 19,803 90,414 (78.1) - ------------------------------------------------------------------------------------------------------------------------------- % of sales 3.2% 56.2% 5.8% 37.2% - ------------------------------------------------------------------------------------------------------------------------------- Basic earnings per share(a) $0.14 $1.93 (92.7) 0.46 $2.14 (78.5) - ------------------------------------------------------------------------------------------------------------------------------- Diluted earning per share $0.14 $1.92 (92.7) 0.46 $2.14 (78.5) - ------------------------------------------------------------------------------------------------------------------------------- Weighted average number of shares ('000) Basic 42,736 43,100 42,706 42,165 Diluted 42,988 43,141 42,943 42,217 - -------------------------------------------------------------------------------------------------------------------------------
Note: (a) Included in net income in the second quarter of 2005 are the following other income/expenses items: - $6.5 million unrealized loss on impairment of marketable securities in TCL Communication (Based on the share price of TCL Communication as at June 30, 2005). - $1.3 million in expenses in relation to the termination of a potential listing of one of the Company's subsidiaries in Hong Kong. - $1.9 million gain from the partial disposal of the Company's interest in its subsidiary, Namtek Software Development Company Limited. After adjusting for the above items, the Company's pro-forma Net Income and Pro-forma EPS (diluted) for the second quarter of 2005 would have been $11.9 million and $0.28, respectively. (USD Million) (EPS Diluted USD) ------------- ------------ GAAP-based Net Income 6.0 0.14 Add: - unrealized loss on the impairment of marketable securities in TCL 6.5 0.15 Page 1 of 10 Communication - expenses in relation to the termination 1.3 0.03 of a potential listing of its subsidiary in Hong Kong. - gain on partial disposal of the (1.9) (0.04) Company's interest in Namtek Software Development Company Limited Total 5.9 0.14 -------------------------------- Pro-forma Net Income 11.9 0.28 -------------------------------- Nam Tai is very pleased to announce its strong performance in the second quarter of 2005. The Company achieved another all time quarterly sales record. This growth in sales had even exceeded the Company's second quarter upper sales guidance of $180 million. The growth in sales was mainly attributable to the growth of the Company's key component sub-assemblies business. In addition to delivering record-breaking results, the Company also improved its gross profit margin. With the enhancement of production yield, and our cost-cutting sourcing strategy, we were able to improve our gross profit margin from 11.7% in the first quarter of 2005 to 12.9% in the second quarter of 2005. The diluted income from operations also increased to $0.33 per share, which also exceeded the second quarter upper guidance of $0.32. Net profit for the second quarter was approximately $6 million, representing a decrease of 92.8% as compared with approximately $83 million in the second quarter of 2004. The significant decrease in the net profit was mainly due to the Company received a special other income of approximately $71 million from the IPO of one of its subsidiaries in Hong Kong during the second quarter of 2004. Mr. Joseph Li, Chief Executive Officer of Nam Tai said, "We are very delighted to see that the Company has achieved outstanding results in both sales and profitability during the second quarter of 2005, which even exceeded our expectations. Such an achievement is a testament to the continued success of our strategy of focusing on the key component sub-assemblies business. We are confident of meeting the target of achieving a sales growth of 30%-35% in 2005 and reiterate our overall gross profit margin of approximately 12%." "We are aware of the uncertainties in the market, such as the shortage of skilled labor in the PRC, the recent announcement of the 2% appreciation of the RMB on July 21, 2005, power supply shortages and high oil and material prices," commented Mr. Li. "The Company reviews these, and many other issues on a regular basis, and is taking appropriate steps to safeguard itself and to mitigate the potential impact on our performance. Our comparatively good wages and benefits allow us to maintain a very low labor turnover rate. Currently, the Company has one-third of its cash on hand in RMB, we do not expect any impact from the RMB appreciation on Nam Tai within this year. Moreover, we are likely to benefit from the 2% appreciation of the RMB on our reserves in the coming quarter. Our factories have their own electricity generating capability to ensure our operations will not be affected by any disruptions to the electricity supply. High costs of oil and raw materials will undoubtedly exert pressure on the Company's gross profit margin. Nevertheless, we expect it to be relieved by our proven cost-cutting sourcing strategy and long term relationship with our supplier." Company Outlook - --------------- Competition remains keen, especially in the cellular phone market, but Nam Tai has successfully secured a number of new customers and orders to offset the potential impact from increased competition and we expect our growth to remain stable. Going forward, the Company will continue to expand its operation in the PRC and restructure its Hong Kong operation to keep a minimal workforce, which we Page 2 of 10 will maintain for so long as our subsidiaries are listed on The Stock Exchange of Hong Kong Limited. To keep abreast of the rapid growth in coming years, the Company is actively exploring the opportunity to purchase additional land in Shenzhen, the PRC, to further expand its manufacturing facilities. Looking into the third quarter of 2005, we are confident that stable growth momentum and a gross profit margin of over 12% will be maintained. The Company is pleased to give its projection for the third quarter of 2005 based on market information and current order situation as follows: (In millions of US Dollars, except for earnings per share)
- ---------------------------------------------------------------------------------------------------------------------------------- 3Q 2005 3Q 2004 3Q 2005 2Q 2005 3Q 2005 (Estimated) (Actual) (Estimated) (Actual) (Estimated) vs. vs. 3Q 2004 2Q 2005 (Actual) (Actual) - ---------------------------------------------------------------------------------------------------------------------------------- Sales $170-$180 $138 23%-30% $185 (8)%-(3)% - ---------------------------------------------------------------------------------------------------------------------------------- Income from Operations per Share (diluted)(a)(b) $0.30-$0.32 $0.30 0%-7% $0.33 (9)%-(3)% - ---------------------------------------------------------------------------------------------------------------------------------- Pro-forma Earnings per Share (diluted)(a)(b)(c) $0.24-$0.27 $0.24 0%-13% $0.28 (14)%-(4)% - ----------------------------------------------------------------------------------------------------------------------------------
Note: (a) The income from operations and pro-forma earnings per share estimate and comparison figures for prior periods exclude any one-time income or expense items. (b) The diluted earnings per share will be affected by the fluctuation in the total number of outstanding shares. (c) The pro-forma earnings per share estimate is calculated with a current minority interest of approximately 27.9% of NTEEP and approximately 28.4% in JIC. Minority interest may fluctuate within and between quarters. Investment in TCL Communication - ------------------------------- Due to the share swap between TCL Communication and Alcatel on July 18, 2005, the shareholding of Nam Tai in TCL Communication decreased from 9% to 8.57%. In light of the performance of the share price of TCL Communication, the Company considered it a prudent approach to record the unrealized loss of its investment in TCL Communication pursuant to the guidance from Emerging Issue Task Force 03-1 issued by the Financial Accounting Standard Board. Accordingly, based on the share price of TCL Communication as at June 30, 2005, an unrealized loss of $6.5 million was recorded in Nam Tai's income statement for the second quarter of 2005. Such unrealized loss has no impact on Nam Tai's cash position. Compliance with Sarbanes-Oxley Act - ---------------------------------- The Company is working towards full compliance with the relevant sections of the Sarbanes-Oxley Act as scheduled. Supplementary Information (Unaudited) for the Second Quarter of 2005 - -------------------------------------------------------------------- 1. Quarterly Sales Breakdown (In Thousands of US Dollars)
--------------------------------------------------------------------------------------------------------------------- Quarter 2005 2004 YoY(%) YoY(%) (Quarterly) (Quarterly accumulated) --------------------------------------------------------------------------------------------------------------------- 1st Quarter 156,923 95,435 64.4 64.4 --------------------------------------------------------------------------------------------------------------------- 2nd Quarter 185,277 147,664 25.5 40.8 --------------------------------------------------------------------------------------------------------------------- 3rd Quarter 137,986 --------------------------------------------------------------------------------------------------------------------- 4th Quarter 152,776 --------------------------------------------------------------------------------------------------------------------- Total 342,200 533,861 ---------------------------------------------------------------------------------------------------------------------
Page 3 of 10 2. Net Sales Breakdown by Product Segment
-------------------------------------------------------------------------------------------- 2005 2004 -------------------------------------------------------------------------------------------- Segment 2nd Quarter YTD 2nd Quarter YTD (%) (%) (%) (%) -------------------------------------------------------------------------------------------- Consumer Electronics and Communication Products(a)(e) 21% 24% 32% 31% -------------------------------------------------------------------------------------------- Telecom. Components Assembly: - Telecom. Components Assembly(b) 70% 67% 59% 58% - Software Development Services(c)(e) 0% 1% 1% 1% -------------------------------------------------------------------------------------------- Parts & Components: - LCD Panels(d) 9% 8% 8% 10% -------------------------------------------------------------------------------------------- 100% 100% 100% 100% --------------------------------------------------------------------------------------------
Note: (a) Represents the sales of NTEEP (b) Represents the sales of Zastron Precision-Tech Limited. (c) Represents the sales of Namtek Software Development Company Limited ("Namtek"). (d) Represents the sales of JIC. (e) Namtek was injected into NTEEP on May 17, 2005 and became a 100% wholly owned subsidiary of NTEEP. Sales in relation to Software Development Services of Namtek was therefore included in Consumer Electronics and Communication Products from the second quarter of 2005. 3. Key Highlight of Financial Position
-------------------------------------------------------------------------------------------------------------- (unaudited) (audited) As at June 30 As at December 31 -------------------------------------------------------------------------------------------------------------- 2005 2004 2004 -------------------------------------------------------------------------------------------------------------- Cash on Hand $155.0 million $121.4 million $160.6 million -------------------------------------------------------------------------------------------------------------- Marketable Securities $26.4 million -- $41.9 million -------------------------------------------------------------------------------------------------------------- Cash/Current Liabilities 1.39 1.05 1.38 -------------------------------------------------------------------------------------------------------------- Current Ratio 2.78 2.44 2.87 -------------------------------------------------------------------------------------------------------------- Total Assets/Total Liabilities 3.81 4.18 3.79 -------------------------------------------------------------------------------------------------------------- Debtors Turnover 50 days 86 days 62 days -------------------------------------------------------------------------------------------------------------- Inventory Turnover 16 days 34 days 18 days -------------------------------------------------------------------------------------------------------------- Average Payable Period 44 days 79 days 72 days --------------------------------------------------------------------------------------------------------------
With $12.3 million of net cash provided by operating activities in the second quarter of 2005, the Company continues to maintain a strong financial position even after the payment of quarterly dividends of $16.4 million during the second quarter of 2005. Moreover, the Company's other financial ratios remain healthy. Second Quarter Results Analyst Conference Call - ---------------------------------------------- The Company will hold a conference call on Monday, August 1, 2005 at 10:00 a.m. Eastern Time for analysts to discuss the second quarter results with management. Shareholders, media, and interested investors are invited to listen to the live conference over the internet by going to www.namtai.com and clicking on the conference call link (under events) or over the phone by dialing (612) 332-0932 just prior to its start time. Dividends - --------- The record date for the third quarter dividend of $0.33 per share is September 30, 2005 and the payment date is October 21, 2005. Page 4 of 10 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 sub-assemblies, including LCD panels, LCD modules, RF modules, FPC sub-assemblies and image sensors modules. These components are used in numerous electronic products, including cellular phones, laptop computers, digital cameras, copiers, fax machines, electronic toys, handheld video game devices and microwave ovens. We also manufacture finished products, including cellular phones, palm-sized PCs, personal digital assistants, electronic dictionaries, calculators, digital camera accessories and BluetoothTM wireless headset accessory for use with cellular phones. Nam Tai has two Hong Kong listed subsidiaries, Nam Tai Electronic & Electrical Products Limited ("NTEEP") and J.I.C. Technology Company Limited ("JIC") and their Second Quarter Results were announced earlier today in Hong Kong. Interested investors may go to the website of The Stock Exchange of Hong Kong Limited at www.hkex.com.hk to obtain the information. The stock codes of NTEEP and JIC on The Stock Exchange of Hong Kong Limited 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 on reliance of such information. The results of NTEEP and JIC only represent a part of the results of the Company and there are GAAP differences in the financial statements of NTEEP and JIC when compared with the financial statements of the Company. Furthermore, different subsidiaries of the Company may have different peak seasons during a year. Forward-Looking Statements - -------------------------- Certain statements in this press release are "forward-looking statements" within the meaning of U.S. federal securities laws. Nam Tai intends that these statements be covered by the safe harbors created under these laws. 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. These forward-looking statements include, without limitation, statements relating to the Company's projected sales projected income from operations per share (diluted) and projected pro-forma earnings per share (diluted) for the third quarter of 2005, and the ability of the Company to finance investments and business expansions through internal resources in the foreseeable future. These forward-looking statements reflect our current views with respect to future events and are not a guarantee of our future performance. There are important factors that could cause the actual results to differ materially from the information set forth in these forward-looking statements. Given these uncertainties, readers are cautioned not to place undue reliance on the forward-looking statements which only speak as of the date of this press release. Because of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this news release might not occur the way we expect, or at all. Nam Tai does not undertake any obligation to release publicly any revisions to these forward-looking statements to reflect events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events, except as may be required under applicable securities laws. These factors include, without limitation, lower than expected sales in the third quarter of 2005, unexpected changes to the Company's cash position, general economic, market and business conditions and other factors beyond the Company's control. Page 5 of 10
NAM TAI ELECTRONICS, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) - ----------------------------------------------------------------------------------------------------------------------- FOR THE PERIODS ENDED JUNE 30, 2005 AND 2004 (In Thousands of US Dollars except share data) Unaudited Unaudited Three months ended Six months ended June 30 June 30 2005 2004 2005 2004 - ----------------------------------------------------------------------------------------------------------------------- Net sales - related parties $ 1,038 $ 11,594 $ 6,143 $ 19,329 Net sales - third parties 184,239 136,070 336,057 223,770 ------------------------------------------------------------------- Total net sales 185,277 147,664 342,200 243,099 Cost of sales 161,442 125,389 299,948 206,528 ------------------------------------------------------------------- Gross profit 23,835 22,275 42,252 36,571 Costs and expenses Selling, general and administrative expenses 7,838 7,603 15,040 13,926 Research and development expenses 1,675 1,257 3,156 2,299 ------------------------------------------------------------------- 9,513 8,860 18,196 16,225 ------------------------------------------------------------------- Income from operations 14,322 13,415 24,056 20,346 Other income (expenses) - net (1,797) 779 (2,294) 1,943 Gain on partial disposal of subsidiaries 1,930 71,071 7,800 71,071 Unrealized loss on marketable securities (6,525) -- (6,525) -- Interest income 787 173 1,460 248 Interest expense (102) (30) (184) (51) ------------------------------------------------------------------- Income before income taxes and minority interests 8,615 85,408 24,313 93,557 Income taxes (196) (311) (337) (589) ------------------------------------------------------------------- Income before minority interests and equity 8,419 85,097 23,976 92,968 in (loss) income of an affiliated company Minority interests (2,280) (2,104) (4,031) (2,680) ------------------------------------------------------------------- Income after minority interests 6,139 82,993 19,945 90,288 Equity in (loss) income of an affiliated company (142) 34 (142) 126 ------------------------------------------------------------------- Net income $ 5,997 $ 83,027 $ 19,803 $ 90,414 =================================================================== Net income per share Basic $ 0.14 $ 1.93 $ 0.46 $ 2.14 =================================================================== Diluted $ 0.14 $ 1.92 $ 0.46 $ 2.14 =================================================================== Weighted average number of shares ('000') Basic 42,736 43,100 42,706 42,165 Diluted 42,988 43,141 42,943 42,217
Page 6 of 10
NAM TAI ELECTRONICS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS - ------------------------------------------------------------------------------------------------ AS AT JUNE 30, 2005 AND DECEMBER 31, 2004 (In Thousands of US Dollars) Unaudited Audited June 30, December 31, 2005 2004 - ------------------------------------------------------------------------------------------------ ASSETS Current assets: Cash and cash equivalents $ 155,045 $ 160,649 Marketable securities 26,381 41,906 Accounts receivable, net 93,990 90,362 Amount due from a related party -- 66 Inventories 25,676 23,096 Prepaid expenses and other receivables 2,476 12,087 Income taxes recoverable 7,937 6,566 ----------------------------------- Total current assets 311,505 334,732 Investment in affiliated companies 2,907 3,049 Property, plant and equipment, at cost 176,217 158,147 Less: accumulated depreciation and amortization (68,051) (60,706) ----------------------------------- 108,166 97,441 Deposits for property, plant and equipment 1,869 7,701 Intangible assets 17,522 16,290 Other assets 1,260 1,260 ----------------------------------- Total assets $ 443,229 $ 460,473 =================================== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Notes payable $ 3,939 $ 2,080 Long term bank loan - current portion 3,075 2,875 Accounts payable 72,755 89,570 Accrued expenses and other payables 17,738 16,661 Amount due to a related party 159 -- Dividend payable 14,104 5,120 Income taxes payable 165 183 ----------------------------------- Total current liabilities 111,935 116,489 Long-term bank loan - non-current portion 4,275 5,163 ----------------------------------- Total liabilities 116,210 121,652 Minority interests 36,108 33,768 Shareholders' equity: Common shares 427 426 Additional paid-in capital 242,757 241,756 Retained earnings 47,922 56,324 Accumulated other comprehensive (loss) income (Note 1) (195) 6,547 ----------------------------------- Total shareholders' equity 290,911 305,053 Total liabilities and shareholders' equity $ 443,229 $ 460,473 ===================================
Page 7 of 10
NAM TAI ELECTRONICS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - ------------------------------------------------------------------------------------------------------------------------- FOR THE PERIODS ENDED JUNE 30, 2005 AND 2004 (In Thousands of US Dollars) Unaudited Unaudited Three months ended Six months ended June 30 June 30 2005 2004 2005 2004 - ------------------------------------------------------------------------------------------------------------------------- CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 5,997 $ 83,027 $ 19,803 $ 90,414 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization of property, 4,248 3,425 8,092 6,705 plant and equipment Amortization of intangible assets 23 24 46 47 Net loss (gain) on disposal of property, plant 59 (79) 30 (48) and equipment Gain on partial disposal of subsidiaries (1,930) (71,071) (7,800) (71,071) Unrealized loss on marketable securities 6,525 -- 6,525 -- Equity in (loss) income of an affiliated company 142 (34) 142 (126) Minority interests 2,280 2,104 4,031 2,680 Changes in current assets and liabilities, net of effects of acquisition and disposal: Increase in accounts receivable (290) (52,599) (3,628) (45,306) Decrease in amount due from a related party -- 1,477 66 1,022 Increase in inventories (4,132) (5,575) (2,580) (11,579) Decrease (increase) in prepaid expenses and other 383 (209) (608) 1,380 receivables Increase in income taxes recoverable (813) (1,152) (1,371) (1,322) Increase in notes payable 781 6,323 1,859 5,291 (Decrease) increase in accounts payable (2,547) 27,336 (16,815) 28,105 Increase in accrued expenses and other payables 2,593 4,627 605 1,764 (Decrease) increase in amount due to a related party (957) -- 159 -- (Decrease) increase in income taxes payable (6) 74 (18) 289 ----------------------------------------------------------- Total adjustments 6,359 (85,329) (11,265) (82,169) ----------------------------------------------------------- ----------------------------------------------------------- Net cash provided by (used in) operating activities $ 12,356 $ (2,302) $ 8,538 $ 8,245 ----------------------------------------------------------- CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of long term investment $ -- $ (25,073) $ -- $ (25,084) Purchase of property, plant and equipment (7,542) (7,258) (18,870) (12,865) Deposit for purchase of property, plant & equipment 2,788 (2,863) 5,832 (3,562) Proceeds from disposal of property, plant and equipment 10 2,989 48 3,010 Proceeds from partial disposal of subsidiaries 92,767 20,055 92,767 ----------------------------------------------------------- Net cash (used in) provided by investing activities $ (4,744) $ 60,562 $ 7,065 $ 54,266 ----------------------------------------------------------- CASH FLOWS FROM FINANCING ACTIVITIES Cash dividends paid $ (16,401) $ (5,199) $ (21,521) $ (7,665) Repayment of bank loans (769) (281) (1,488) (563) Proceeds from bank loans -- 5,200 800 5,200 Proceeds from shares issued on exercise of options 57 72 1,002 72 ----------------------------------------------------------- Net cash used in financing activities $ (17,113) $ (208) $ (21,207) $ (2,956) ----------------------------------------------------------- Net (decrease) increase in cash and cash equivalents (9,501) 58,052 (5,604) 59,555 Cash and cash equivalents at beginning of period 164,546 63,330 160,649 61,827 ----------------------------------------------------------- Cash and cash equivalents at end of period $ 155,045 $ 121,382 $ 155,045 $ 121,382 ===========================================================
Page 8 of 10 NAM TAI ELECTRONICS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) - -------------------------------------------------------------------------------- FOR THE PERIODS ENDED JUNE 30, 2005 AND 2004 (In Thousands of US Dollars) 1. Accumulated other comprehensive income represents foreign currency translation adjustments and unrealized loss on marketable securities. The comprehensive income of the Company was $19,610 (including an unrealized loss on marketable securities of US$193 in relation to TCL Corporation) and $90,414 for the six months ended June 30, 2005 and June 30, 2004 respectively. 2. Business segment information - The Company operates primarily in three segments, the Consumer Electronics and Communication Products ("CECP") segment, Telecom. Components Assembly ("TCA") segment, and the LCD Panels ("LCDP") segment. Unaudited Unaudited Three months ended Six months ended June 30 June 30 2005 2004 2005 2004 - -------------------------------------------------------------------------------- NET SALES: - CECP $ 39,668 $ 47,316 $ 81,696 $ 74,794 - TCA 129,905 87,722 232,527 144,593 - LCDP 15,704 12,626 27,977 23,712 -------------------------------------------------------- Total net sales $185,277 $147,664 $342,200 $243,099 ======================================================== NET INCOME: - CECP $ 4,665 $ 6,392 $ 8,547 $ 9,631 - TCA 221 75,985 9,536 79,448 - LCDP 1,111 650 1,720 1,335 -------------------------------------------------------- Total net income $ 5,997 $ 83,027 $ 19,803 $ 90,414 ======================================================== Unaudited Audited June 30, Dec. 31, 2005 2004 - -------------------------------------------------------------------------------- IDENTIFIABLE ASSETS BY SEGMENT: - CECP $134,615 $134,473 - TCA 251,949 274,664 - LCDP 56,665 51,336 --------------------------- Total assets $443,229 $460,473 =========================== Page 9 of 10 3. 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 2005 2004 2005 2004 - ------------------------------------------------------------------------------------------------------------- NET SALES FROM OPERATIONS WITHIN: - Hong Kong and Macao: Unaffiliated customers $ 15,704 $ 12,626 $ 27,977 $ 23,712 Inter-companies sales 240 140 426 246 - PRC, excluding Hong Kong and Macao: Unaffiliated customers 169,573 123,444 314,223 200,058 Related party -- 11,594 -- 19,329 Inter-companies sales 1,038 1,711 6,143 4,393 - Inter-companies eliminations (1,278) (1,851) (6,569) (4,639) ------------------------------------------------------------------ Total net sales $ 185,277 $ 147,664 $ 342,200 $ 243,099 ================================================================== NET INCOME WITHIN: - PRC, excluding Hong Kong and Macao $ 9,152 $ 10,010 $ 14,175 $ 16,398 - Macao 8,757 5,429 14,271 5,687 - Hong Kong (11,192) 67,588 (8,643) 68,329 ------------------------------------------------------------------ Total net income $ 5,997 $ 83,027 $ 19,803 $ 90,414 ==================================================================
Unaudited Audited June 30, Dec. 31, 2005 2004 - -------------------------------------------------------------------------------- LONG-LIVED ASSETS WITHIN: - PRC, excluding Hong Kong and Macao $ 95,610 $ 84,453 - Macao 117 134 - Hong Kong 12,439 12,854 ------------------------------- Total long-lived assets $ 108,166 $ 97,441 =============================== Page 10 of 10 -----END PRIVACY-ENHANCED MESSAGE-----