-----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, NnEv0W4+I5fN9jUP/vp2jCteX/1HAq9ASvxIHVmZDH3ROa3in9MZSxafRvn4Mh/F wx0Ah80QoxWXsA/5ygcIbw== 0000950123-10-071759.txt : 20100803 0000950123-10-071759.hdr.sgml : 20100803 20100803155028 ACCESSION NUMBER: 0000950123-10-071759 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20100803 FILED AS OF DATE: 20100803 DATE AS OF CHANGE: 20100803 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: 10987517 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 v56897e6vk.htm FORM 6-K e6vk
     
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
 
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of: August, 2010
Commission File Number: 001-31583
NAM TAI ELECTRONICS, INC.
(Translation of registrant’s name into English)
Gushu Industrial Estate, Xixiang
Baoan, Shenzhen
People’s Republic of China
(Address of principal executive office)
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 þ Form 40-F o
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): o
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): o
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 o No þ
If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-                    .
 
 

 

 

(NAMTAI LOGO)   SECOND QUARTER NEWS RELEASE
Investor relations contact: Kee Wong
E-mail: shareholder@namtai.com
Address: Units 5811-12, 58/F, The Center
Website: www.namtai.com
99 Queen’s Road Central, Central, Hong Kong
Tel: (852) 2341 0273 Fax: (852) 2263 1223
NAM TAI ELECTRONICS, INC.
Q2 2010 Sales up 11.9% , Gross profit margin at 11.2%
SHENZHEN, PRC — August 2, 2010 — Nam Tai Electronics, Inc. (“Nam Tai” or the “Company”) (NYSE Symbol: NTE) today announced its unaudited results for the second quarter ended June 30, 2010.
KEY HIGHLIGHTS
(In thousands of US Dollars, except per share data, percentages and as otherwise stated)
                                                 
    Quarterly Results     Half year Results  
    Q2 2010     Q2 2009     YoY(%)     1H 2010     1H 2009     YoY(%)  
 
Net sales
   $ 113,912     $ 101,836       11.9     $ 193,178     $ 203,986       (5.3 )
Gross profit
   $ 12,706     $ 10,422       21.9     $ 19,209     $ 17,544       9.5  
% of sales
     11.2 %     10.2 %     —       9.9 %     8.6 %     —  
Operating income (loss) (a)
   $ 3,796     $ 1,425       166.4     $ 3,219     $ (5,114 )     —  
% of sales
     3.3 %     1.4 %     —       1.7 %     (2.5 %)     —  
per share (diluted)
  $ 0.08     $ 0.03       166.7     $ 0.07       ($0.11 )     —  
Net income (loss) attributable to Nam Tai shareholders(a )(b)
   $ 3,211     $ 613       423.8     $ 2,114     $ (3,268 )     —  
% of sales
     2.8 %     0.6 %     —       1.1 %     (1.6 %)     —  
Basic earnings (loss) per share
   $ 0.07     $ 0.01       600.0     $ 0.05       ($0.07 )     —  
Diluted earnings (loss) per share
   $ 0.07     $ 0.01       600.0     $ 0.05       ($0.07 )     —  
Weighted average number of shares (‘000)
                                                
Basic
     44,804       44,804       —       44,804       44,804       —  
Diluted
     44,807       44,804       —       44,809       44,804       —  
 
Notes:
(a)   Operating loss and net loss for the first half of 2009 included $5.1 million restructuring costs in relation to employee severance benefits in PRC subsidiaries.
 
(b)   In November 2009, Nam Tai successfully completed the privatization of Nam Tai Electronic & Electrical Products Limited, or NTEEP, by tendering for and acquiring the 25.12 percent of NTEEP that it did not previously own, i.e., NTEEP’s noncontrolling shares, resulting in NTEEP becoming the Company’s wholly-owned subsidiary. During the year ended December 31, 2009, including the periods covered by this press release, we reported consolidated net income in accordance with SFAS 160, which required that consolidated net income be reported in amounts that include the amounts attributable to both the parent (Nam Tai) and its noncontrolling interest in NTEEP. Accordingly, “Net income (loss) attributable to Nam Tai shareholders” in 2009 represents amounts attributable to Nam Tai, net of its non-controlling interest in NTEEP. In 2010, however, “Net income (loss) attributable to Nam Tai shareholders” represents amounts without deduction for any non-controlling interest.
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 / (loss), net income / (loss) and earnings (loss) per share on a non-GAAP basis that excludes certain income and expenses to better assess operating performance. Those non-GAAP financial measures exclude certain items, such as share-based compensation expenses and employee severance benefits in PRC subsidiaries. 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

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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/(loss) or other financial data prepared in accordance with US GAAP as measures of our operating results or liquidity. Users of this financial information should consider the types of events and transactions for which adjustments have been made. See the table below for a reconciliation of non-GAAP amounts to amounts reported under US GAAP.
GAAP TO NON-GAAP RECONCILIATION
(In millions of US Dollars, except for per share (diluted) and numbers of shares)
                                                                 
    Three months ended Jun 30,     Six months ended Jun 30,  
    2010     2009     2010     2009  
    millions     per share
(diluted)		     millions     per share
(diluted)		     millions     per share
(diluted)		     millions     per share
(diluted)		  
GAAP Operating Income (Loss)
   $ 3.8     $ 0.08     $ 1.4     $ 0.03     $ 3.2     $ 0.07     $ (5.1 )   $ (0.11 )
 
                                                
Add back:
                                                                
- Share-based compensation expenses(a)
     —       —       0.1       —       —       —       0.1       —  
- Professional expenses in relation to privatization of NTEEP
     —       —       0.9       0.02       —       —       0.9       0.02  
- Employee severance benefits in PRC subsidiaries(b)
     0.7       0.02       —       —       0.7       0.02       5.1       0.11  
Non-GAAP Operating Income
   $ 4.5     $ 0.10     $ 2.4     $ 0.05     $ 3.9     $ 0.09     $ 1.0     $ 0.02  
 
                                                
GAAP Net Income (Loss) attributable to Nam Tai shareholders
   $ 3.2     $ 0.07     $ 0.6     $ 0.01     $ 2.1     $ 0.05     $ (3.3 )   $ (0.07 )
 
                                                
Add back:
                                                                
- Share-based compensation expenses(a)
     —       —       0.1       —       —       —       0.1       —  
- Professional expenses in relation to privatization of NTEEP
     —       —       0.9       0.02       —       —       0.9       0.02  
- Employee severance benefits in PRC subsidiaries (after deducting tax and sharing with noncontrolling interests) (b)
     0.5       0.01       —       —       0.5       0.01       3.2       0.07  
Non-GAAP Net Income attributable to Nam Tai shareholders
   $ 3.7     $ 0.08     $ 1.6     $ 0.03     $ 2.6     $ 0.06     $ 0.9     $ 0.02  
 
                                                
Weighted average number of shares — diluted (’000)
     44,807               44,804               44,809               44,804          
 
Notes:
(a)   The share-based compensation expenses included approximately $0.1 million attributable to options to purchase 75,000 shares granted in the second quarter of 2009 to directors in accordance with the Company’s practice of making annual option grants to its directors upon their election for the ensuing year.
 
(b)   The expense represents employee benefits and severance arrangements in accordance with the PRC statutory severance requirements.

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SUPPLEMENTARY INFORMATION (UNAUDITED) IN THE SECOND QUARTER OF 2010
1.   Quarterly Sales Breakdown
(In thousands of US Dollars, except percentage information)
                                 
                            YoY(%)  
                    YoY(%)     (Quarterly  
Quarter   2010     2009     (Quarterly)     accumulated)  
1st Quarter
     79,266       102,150       (22.4 )     (22.4 )
2nd Quarter
     113,912       101,836       11.9       (5.3 )
3rd Quarter
     —       110,416                  
4th Quarter
     —       93,735                  
Total
     193,178       408,137                  
2.   Breakdown of Net Sales by Product Segment (as a percentage of Total Net Sales)
                                 
    2010     2009  
Segments
     Q2 ( %)   YTD (%)     Q2 ( %)   YTD (%)
Consumer Electronic and Communication Products (“CECP”)
     27       25       26       31  
Telecommunication Component Assembly (“TCA”)
     55       56       57       54  
Liquid Crystal Display Products (“LCDP”)
     18       19       17       15  
 
     100       100       100       100  
3.   Key Highlights of Financial Position
                         
    As at June 30,     As at December 31  
    2010     2009     2009  
Cash on hand (a) (b)
   $ 203.0  million   $ 232.2  million   $ 182.7  million
Ratio of cash to current liabilities
     2.04       2.54       2.39  
Current ratio
     3.11       3.58       3.59  
Ratio of total assets to total liabilities
     4.25       4.96       5.21  
Return on Nam Tai shareholders’ equity
     1.3 %     (2.0 %)     0.5 %
Ratio of total liabilities to total equity
     0.31       0.25       0.24  
Debtors turnover
     74  days     59  days     52  days
Inventory turnover
     25  days     16  days     16  days
Average payable period
     87  days     62  days     59  days
 
Notes:
(a)   Includes cash equivalents. Information for December 31, 2009 extracted from the audited financial statements included in the 2009 Form 20-F of the Company filed with the Securities and Exchange Commission on March 16, 2010.
 
(b)   Despite current economic conditions, Nam Tai’s financial position as at June 30, 2010 remained strong. Net cash provided by operating activities in the second quarter was $5.9 million.
OPERATIONS REVIEW
On a year-over-year basis, composite growth for Q2 2010 has reflected improvements which management believes were attributable to the simplification of corporate and organization structures, continued focus on strengthening of management controls and enterprise efficiencies, which has resulted in costs savings. During the first half of 2010, the Company has returned to profitability and growth and shown encouraging signs of recovery. Management plans to remain vigilant in the areas that have improved the Company’s operating performance in the first half of 2010 and seek to achieve additional costs savings and improvements in gross and operating margins.

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Sales in the second quarter of 2010 were $113.9 million, an increase of 11.9% as compared to sales of $101.8 million in the same quarter of 2009. Sales during the second quarter of 2010 improved by varying degrees in each of our business segments over results reported for the second quarter of 2009, with our CECP segment increasing by 16.7%, our TCA segment increasing by 6.7% and our LCDP segment increasing by 22%. Nevertheless, the global economy still showed signs of instability, particularly in the demand for our consumer products, principally our headsets containing Bluetooth®1 wireless technology, educational products, optical products and home entertainment devices, which adversely affected sales of our end-user products such as mobile phone accessories.
The Company’s gross profit margin in the second quarter of 2010 was 11.2% as compared to 10.2% in the second quarter of 2009. Gross profit in the second quarter of 2010 was $12.7 million, an increase of 21.9%, as compared to $10.4 million in the second quarter of 2009, primarily resulting from the increase of sales and the effects of costs savings.
Net income in the second quarter of 2010 was $3.2 million, as compared to net income attributable to Nam Tai shareholders of $0.6 million in same quarter of 2009. The profit in the second quarter of 2010 primarily resulted from the overall increase of sales. Basic and diluted earnings per share in the second quarter of 2010 were $0.07, as compared to $0.01 in the second quarter of 2009.
For the six months ended June 30, 2010, our net sales were $193.2 million, a decrease of 5.3% as compared to $204.0 million in the same period of last year. The Company’s gross profit margin was 9.9% as compared to 8.6% in the same period of 2009. Gross profit was $19.2 million, an increase of 9.5%, as compared to $17.5 million in the same period of last year. We reported an operating income for the first six months of 2010 of $3.2 million, compared to operating loss of $5.1 million in the same period of last year. The loss in the first six months of 2009 was attributable to a $5.1 million restructuring charge for employee severance expenses in Nam Tai’s PRC subsidiaries. Our net income for the six months ended June 30, 2010 was $2.1 million, or $0.05 per share (diluted), as compared to net loss attributable to Nam Tai shareholders of $3.3 million, or $0.07 per share (diluted), in the same period of last year.
Non-GAAP Financial Information
Non-GAAP operating income for the second quarter of 2010 was $4.5 million, or $0.10 per share (diluted), compared to non-GAAP operating income of $2.4 million, or $0.05 per share (diluted), in the second quarter of 2009. Non-GAAP net income for the second quarter of 2010 increased to $3.7 million or $0.08 per share (diluted), compared to $1.6 million, or $0.03 per share (diluted), in the second quarter of 2009.
EXPANSION PROJECTS
The Company is still awaiting the release of the land in Guangming by the PRC government of its raw land in Guangming Shenzhen, consisting of approximately 118,000 square meters which will be reserved for future expansion of business after 3 to 5 years. The Company is also considering further expansion in Wuxi, subject to improvements and growth in our business.
 
(1)   The Bluetooth® word mark and logo are owned by the Bluetooth SIG, Inc. and any use of such mark by Nam Tai is under license.

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COMPANY OUTLOOK
Following a soft start in the first quarter, the Company’s business has picked up in the second quarter. We expect demand for LCD modules and telecommunication subassemblies to increase during the remainder of 2010. We anticipate that orders for optical and educational products in our CECP segment, which have dropped considerably from previous years, to remain weak in 2010, but stable to levels in 2009. Based on the signs indicated from the first half of 2010, we now believe that the overall business of the Company will improve over 2009, and begin to show growth and become profitable. However, the prevailing economic environment and the prospects for a continuing economic recovery remain uncertain and we cannot predict with reasonable accuracy future levels of demand for our customers’ electronics products and therefore cannot predict with reasonable accuracy the future level of demand for our manufacturing services. The volume and timing of orders received during a quarter have been, even in normal economic climates, difficult to forecast and fluctuate as a consequence of variation in demand for our customers’ products; our customers’ attempts to manage their inventory; electronic design changes; changes in our customers’ manufacturing strategies; and acquisitions of or consolidations among our customers. Accordingly, our operating results in the first half of 2010, or in any other period, should not be considered indicative of results to be expected in any future period.
For the first half of 2010, our newly operating FPC manufacturing plant in Wuxi has been engrossed in qualifying samples and manufacturing processes with customers. Sales of products emanating from this factory have been slow and the plant is still consuming cash rather than generating it. Yet, available indicators cause us to believe business from this facility will begin in earnest after the third quarter of 2010. Our confidence in the potential for this facility has not diminished and is evidenced by our continuing investment in technology and infrastructure to maximize capacity for this facility, as well as our plan to recruit quality management, aiming at a goal of achieving breakeven performance at this facility in the third quarter of 2011.
Following the integration of management of our TCA and LCDP segments, synergies in our LCD modules segment have proven effective in allowing consolidation and conservation of costs. This integration and synergies have allowed the Company to become more competitive in these segments, fostered their return to growth and provided opportunities for our overall return to growth. In an effort to seek the same efficiencies for our CECP segment, and mindful of the substantial decreases in sales from this segment over the past several years, we plan to integrate management of our CECP segment with our TCA and LCDP management teams and expect to complete this integration at the end of the current third quarter.
We anticipate that the improvements in operations that we have achieved, and hope to achieve, to be mitigated somewhat by the appreciation of the exchange rate between Chinese renminbi against other world currencies, especially the U.S. dollar, which appears to have started again since mid-June 2010 when China’s central bank announced that it planned to introduce more flexibility in the management of the renminbi. Inflation too in China, which has increased beginning in the second half of 2009, and adds to the existing pressures to raise compensation levels of workers in China, could also adversely affect our gross and operating margins.

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FORWARD-LOOKING STATEMENTS AND FACTORS THAT COULD CAUSE OUR SHARE PRICE TO DECLINE
Express or implied statements in this press release, such as the statements included in “Company Outlook,” particularly management’s expectations regarding increases in the demand for LCD modules and telecommunication subassemblies during the remainder of 2010, the stability of sales in our CEPC business to 2009 levels, the improvement of our overall business in 2010 compared to 2009 and its growth and continued profitability, continued costs savings in future periods expected from the merger of management in Nam Tai’s TCA and LCDP segments or additional costs savings in future periods expected from the integration of management in Nam Tai’s CEPC segment into its TCA and LCDP segments; management’s assessment concerning the timing of when significant business will begin from Nam Tai’s newly operational Wuxi facility or reach the breakeven point; and management’s assessment of the strength of Nam Tai’s financial condition and cash position, 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. Actual results could differ materially from those projected in these forward-looking statements as a result of a number of factors, including continued deterioration of the market for the Company’s customers’ products and the global economy as a whole, which could negatively impact the Company’s revenue and the ability of the Company’s customers to pay for the Company’s products; customer bankruptcy filings; the sufficiency of the Company’s cash position and other sources of liquidity to operate its business; competition negatively impacting the Company’s revenues and margins; and one or more of the factors discussed in “Item 3. Key Information — Risk Factors” in the Company’s Annual Report on Form 20-F for the year ended December 31, 2009 as filed on March 16, 2010 with the Securities and Exchange Commission.
For further information regarding risks and uncertainties associated with Nam Tai’s business, operating results or financial condition, please refer to the “Operating and Financial Review and Prospects,” “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 and Reports on Form 6-K containing releases of Nam Tai’s quarterly financial results, copies of which may be obtained from Nam Tai’s website at http://www.namtai.com or from the SEC’s EDGAR website at http://www.sec.gov.
All information in this press release is as of July 30, 2010 in Shenzhen 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, unless so required by law.
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® 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.

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NAM TAI ELECTRONICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE PERIODS ENDED JUNE 30, 2010 AND 2009
(In Thousands of US Dollars except share and per share data)
                                 
    Unaudited     Unaudited  
    Three months ended     Six months ended  
    June 30     June 30  
    2010     2009     2010     2009  
 
Net sales
   $ 113,912     $ 101,836     $ 193,178     $ 203,986  
Cost of sales
     101,206       91,414       173,969       186,442  
     
 
                                
Gross profit
     12,706       10,422       19,209       17,544  
 
                                
Costs and expenses
                                
General and administrative expenses (1)(2)
     6,042       6,396       10,568       16,464  
Selling expenses(1)
     1,422       1,290       2,493       2,703  
Research and development expenses
     1,446       1,311       2,929       3,491  
     
 
     8,910       8,997       15,990       22,658  
 
                                
Operating income (loss)
     3,796       1,425       3,219       (5,114 )
 
                                
Other income (expenses) , net
     784       (108 )     614       (106 )
Interest income
     325       200       604       606  
Interest expense
     —       (114 )     —       (220 )
     
 
                                
Income (loss) before income tax
     4,905       1,403       4,437       (4,834 )
Income tax expenses
     (1,694 )     (875 )     (2,323 )     (638 )
     
 
                                
Net income (loss)
     3,211       528       2,114       (5,472 )
Less: Net loss attributable to the noncontrolling interests
     —       85       —       2,204  
     
Net income (loss) attributable to Nam Tai shareholders
   $ 3,211     $ 613     $ 2,114     $ (3,268 )
     
 
                                
Income (loss) per share (attributable to Nam Tai shareholders)
                                
Basic
   $ 0.07     $ 0.01     $ 0.05     $ (0.07 )
     
Diluted
   $ 0.07     $ 0.01     $ 0.05     $ (0.07 )
     
 
                                
Weighted average number of shares (’000)
                                
Basic
     44,804       44,804       44,804       44,804  
Diluted
     44,807       44,804       44,809       44,804  
 
(1)   The 2010 presentation shows general and administrative expenses and selling expenses as separate line items, whereas the Company’s consolidated statements of operations for 2009, as originally published, combined general and administrative expenses and selling expenses as a single line item labeled “Selling, general and administrative expenses.” General and administrative expenses and selling expenses for 2009 have been presented separately to conform to the 2010 presentation.
 
(2)   General and administrative expenses for the period ended June 30, 2009 include employee severance benefits of $5,058,000 which was disclosed separately in 2009 second quarter news release.

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NAM TAI ELECTRONICS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
AS AT JUNE 30, 2010 AND DECEMBER 31, 2009
(In Thousands of US Dollars)
                 
    Unaudited     Audited  
    June 30     December 31  
    2010     2009  
 
 
           (Note)
ASSETS
            
Current assets:
                
Cash and cash equivalents
   $ 203,026     $ 182,722  
Fixed deposits maturing over three months
     —       12,903  
Accounts receivable, net
     77,946       57,911  
Inventories
     23,425       16,054  
Prepaid expenses and other receivables
     4,698       3,079  
Deferred tax assets – current
     1,035       1,460  
     
Total current assets
     310,130       274,129  
 
                
Property, plant and equipment, net
     97,107       108,110  
Land use right
     13,148       13,296  
Deposits for property, plant and equipment
     459       32  
Goodwill
     2,951       2,951  
Deferred tax assets-non current
     5,092       4,486  
Other assets
     649       920  
     
Total assets
   $ 429,536     $ 403,924  
     
 
                
LIABILITIES AND SHAREHOLDERS’ EQUITY
                
Current liabilities:
                
Notes payable
   $ —     $ 691  
Accounts payable
     82,731       58,667  
Accrued expenses and other payables
     15,113       16,397  
Income tax payable
     1,872       656  
     
Total current liabilities
     99,716       76,411  
 
                
Deferred tax liabilities
     1,296       1,103  
     
Total liabilities
     101,012       77,514  
 
                
EQUITY
                
Nam Tai shareholders’ equity:
                
Common shares
     448       448  
Additional paid-in capital
     285,264       285,264  
Retained earnings
     42,820       40,706  
Accumulated other comprehensive loss (Note 1)
     (8 )     (8 )
     
Total shareholders’ equity
     328,524       326,410  
     
Total liabilities and shareholders’ equity
   $ 429,536     $ 403,924  
     
 
Note:
 
Information extracted from the audited financial statements included in the 2009 Form 20-F of the Company filed with the Securities and Exchange Commission on March 16, 2010.

Page 8 of 11

 

NAM TAI ELECTRONICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2010 AND 2009
                                 
    Unaudited     Unaudited  
    Three months ended     Six months ended  
    June 30     June 30  
    2010     2009     2010     2009  
 
CASH FLOWS FROM OPERATING ACTIVITIES
                                
 
                                
Net income (loss)
   $ 3,211     $ 528     $ 2,114     $ (5,472 )
Adjustments to reconcile net income to net cash provided by operating activities:
                                
Depreciation and amortization
     6,505       5,068       12,942       10,483  
Gain on disposal of property, plant and equipment
     (412 )     (8 )     (434 )     (263 )
Share-based compensation expenses
     —       67       —       67  
Deferred income taxes
     (231 )     297       12       (60 )
Unrealized exchange (gain) loss
     (505 )     (34 )     (505 )     39  
Changes in current assets and liabilities:
                                
(Increase) decrease in accounts receivable
     (27,011 )     (7,085 )     (20,035 )     38,526  
(Increase) decrease in inventories
     (8,938 )     387       (7,371 )     11,076  
(Increase) decrease in prepaid expenses and other receivables
     (860 )     1,410       (1,619 )     1,770  
Decrease in notes payable
     —       —       (691 )     —  
Increase (decrease) in accounts payable
     33,628       8,247       24,064       (34,878 )
(Decrease) increase in accrued expenses and other payables
     (966 )     (4,368 )     585       (2,864 )
Increase (decrease) in income tax payable
     1,475       376       1,216       (320 )
           
Total adjustments
     2,685       4,357       8,164       23,576  
     
 
                                
     
Net cash provided by operating activities
   $ 5,896     $ 4,885     $ 10,278     $ 18,104  
           
 
                                
CASH FLOWS FROM INVESTING ACTIVITIES
                                
Purchase of property, plant and equipment
     (377 )     (3,382 )     (3,457 )     (14,533 )
(Increase) decrease in deposits for purchase of property, plant and equipment
     (257 )     855       (427 )     135  
Proceeds from disposal of property, plant and equipment
     441       9       502       705  
Decrease in fixed deposits maturing over three months
     —       —       12,903       —  
           
Net cash (used in) provided by investing activities
   $ (193 )   $ (2,518 )   $ 9,521     $ (13,693 )
     
 
                                
CASH FLOWS FROM FINANCING ACTIVITIES
                                
Cash dividends paid
   $ —     $ —     $ —     $ (9,857 )
Proceeds from bank loans
     —       788       —       1,826  
Repayment of bank loans
     —       (1,198 )     —       (1,198 )
           
Net cash used in financing activities
   $ —     $ (410 )   $ —     $ (9,229 )
           
Net increase (decrease) in cash and cash equivalents
     5,703       1,957       19,799       (4,818 )
           
Cash and cash equivalents at beginning of period
     196,818       230,169       182,722       237,017  
           
Effect of exchange rate changes on cash and cash equivalents
     505       34       505       (39 )
           
Cash and cash equivalents at end of period
   $ 203,026     $ 232,160     $ 203,026     $ 232,160  
     

Page 9 of 11

 

NAM TAI ELECTRONICS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
FOR THE PERIODS ENDED JUNE 30, 2010 AND 2009
(In Thousands of US Dollars)
1.   Accumulated other comprehensive loss represents foreign currency translation adjustments. The comprehensive income (loss) attributable to Nam Tai shareholders of the Company were $2,114 and ($3,268) for the six months ended June 30, 2010 and June 30, 2009, 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 Products (“LCDP”) segment.
                                 
    Unaudited     Unaudited  
    Three months ended     Six months ended  
    June 30     June 30  
    2010     2009     2010     2009  
 
NET SALES :
                                
- CECP
   $ 31,040     $ 26,606     $ 48,227     $ 62,573  
- TCA
     62,201       58,279       107,919       110,967  
- LCDP
     20,671       16,951       37,032       30,446  
     
Total net sales
   $ 113,912     $ 101,836     $ 193,178     $ 203,986  
           
NET INCOME :
                                
- CECP
   $ 3,244     $ 2,042     $ 4,114     $ 1,997  
- TCA
     214       234       (1,271 )     (1,649 )
- LCDP
     1,003       249       1,506       (1,408 )
- Corporate
     (1,250 )     (1,912 )     (2,235 )     (2,208 )
     
Total net income (loss) attributable to Nam Tai shareholders
   $ 3,211     $ 613     $ 2,114     $ (3,268 )
           
                 
    Unaudited     Audited  
    Jun. 30, 2010     Dec. 31,2009  
 
IDENTIFIABLE ASSETS BY SEGMENT:
                
- CECP
   $ 120,351     $ 112,058  
- TCA
     169,624       141,734  
- LCDP
     32,004       42,153  
- Corporate
     107,557       107,979  
       
 
                
Total assets
   $ 429,536     $ 403,924  
       

Page 10 of 11

 

NAM TAI ELECTRONICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
FOR THE PERIODS ENDED JUNE 30, 2010 AND 2009
(In Thousands of US Dollars)
3.   A summary of the net sales, net loss and long-lived assets by geographic areas is as follows:
                                 
    Unaudited     Unaudited  
    Three months ended     Six months ended  
    June 30     June 30  
    2010     2009     2010     2009  
 
NET SALES FROM OPERATIONS WITHIN:
                                
- PRC, excluding Hong Kong and Macao:
                                
Unaffiliated customers
   $ 113,912     $ 101,836     $ 193,178     $ 203,986  
Intercompany sales
     301       7       436       15  
 
                                
- Intercompany eliminations
     (301 )     (7 )     (436 )     (15 )
           
 
                                
Total net sales
   $ 113,912     $ 101,836     $ 193,178     $ 203,986  
           
 
                                
NET INCOME (LOSS) FROM OPERATIONS WITHIN:
                                
- PRC, excluding Hong Kong and Macao
   $ 4,461     $ 2,314     $ 4,349     $ (1,209 )
- Hong Kong & Macao
     (1,250 )     (1,701 )     (2,235 )     (2,059 )
           
 
                                
Total net income (loss) attributable to Nam Tai shareholders
   $ 3,211     $ 613     $ 2,114     $ (3,268 )
           
                 
    Unaudited     Audited  
    June. 30, 2010     Dec. 31,2009  
 
LONG-LIVED ASSETS WITHIN:
                
- PRC, excluding Hong Kong and Macao
   $ 110,034     $ 121,286  
- Hong Kong and Macao
     221       120  
     
Total long-lived assets
   $ 110,255     $ 121,406  
       

Page 11 of 11

 

SIGNATURES
     Pursuant to the requirements of the Securities Exchange Act of 1934, 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 3, 2010  By:   /s/ M. K. Koo    
    Name:   M. K. Koo   
    Title:   Executive Chairman and Chief Financial Officer   
 

 

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