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 November 2012
Commission File Number 001-31583
NAM TAI ELECTRONICS, INC.
(Translation of registrant’s name into English)
Namtai Industrial Estate
2 Namtai Road, Gushu, 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 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)(1): ¨
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): ¨
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- .
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.
Date: November 5, 2012
| NAM TAI ELECTRONICS, INC. | ||||
| By: | /s/ M. K. Koo | |||
| Name: | M. K. Koo | |||
| Title: | Executive Chairman and | |||
| Chief Financial Officer | ||||
|
THIRD QUARTER NEWS RELEASE | |
|
Investor relations contact: |
Please refer to the Nam Tai website (www.namtai.com) or the SEC website (www.sec.gov) for Nam Tai press releases and financial statements. | |
|
Mr. Kevin McGrath |
||
| Managing Partner of Cameron Associates | ||
| Tel.: 212.245.4577 | ||
| E-mail: kevin@cameronassoc.com |
NAM TAI ELECTRONICS, INC.
Q3 2012 Sales up 198%, Gross profit margin at 9.2%
SHENZHEN, PRC – November 5, 2012 – Nam Tai Electronics, Inc. (“Nam Tai” or the “Company”) (NYSE Symbol: NTE) today announced its unaudited results for the third quarter ended September 30, 2012.
KEY HIGHLIGHTS
(In thousands of US Dollars, except per share data, percentages and as otherwise stated)
| Quarterly Results | Nine months Results | |||||||||||||||||||||||
| Q3 2012 | Q3 2011 | YoY(%)(d) | 9M 2012 | 9M 2011 | YoY(%)(d) | |||||||||||||||||||
| Net sales (a) |
$ | 380,251 | $ | 127,600 | 198 | $ | 679,459 | $ | 396,004 | 72 | ||||||||||||||
| Gross profit (a) |
$ | 34,801 | $ | 5,695 | 511 | $ | 56,813 | $ | 18,014 | 215 | ||||||||||||||
| % of sales |
9.2 | % | 4.5 | % | — | 8.4 | % | 4.5 | % | — | ||||||||||||||
| Operating income (loss) (a) |
$ | 26,797 | $ | (851 | ) | — | $ | 35,080 | $ | (2,300 | ) | — | ||||||||||||
| % of sales |
7.0 | % | (0.7 | %) | — | 5.2 | % | (0.6 | %) | — | ||||||||||||||
| per share (diluted) |
$ | 0.59 | $ | (0.02 | ) | — | $ | 0.78 | $ | (0.05 | ) | — | ||||||||||||
| Net income (b) (c) |
$ | 24,552 | $ | 1,095 | 2,142 | $ | 30,315 | $ | 6,116 | 396 | ||||||||||||||
| % of sales |
6.5 | % | 0.9 | % | — | 4.5 | % | 1.5 | % | — | ||||||||||||||
| Basic earnings per share |
$ | 0.55 | $ | 0.02 | 2,650 | $ | 0.68 | $ | 0.14 | 386 | ||||||||||||||
| Diluted earnings per share |
$ | 0.54 | $ | 0.02 | 2,600 | $ | 0.67 | $ | 0.14 | 379 | ||||||||||||||
| Weighted average number of shares (‘000) |
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| Basic |
44,804 | 44,804 | — | 44,804 | 44,804 | — | ||||||||||||||||||
| Diluted |
45,304 | 44,825 | — | 45,093 | 44,843 | — | ||||||||||||||||||
Notes:
| (a) | The net sales, gross profit and operating income (loss) have excluded the discontinued business of Liquid Crystal Display Panels (LCDP). For the three months ended September 30, 2012 and September 30, 2011, the discontinued operation recognized net sales of $1.8 million and $19.8 million, a gross profit of $0.6 million and $2.4 million, and an operating income of $0.9 million and $1.0 million respectively. For the nine months ended September 30, 2012 and September 30, 2011, the discontinued operation recognized net sales of $24.1 million and $61.0 million, a gross (loss) profit of ($0.6 million) and $7.8 million, an operating (loss) income of ($2.7 million) and $3.4 million respectively. (Please see page 7 of the Company’s Condensed Consolidated Statements of Operations for details). |
| (b) | Net income for the three months ended September 30, 2012 has included income from discontinued business (net of tax) of $0.7 million and other & interest income of $2 million, which consisted of incentive allowance received from Shenzhen government for mechanical and electrical products of $0.6 million and interest income & exchange gain of $1.4 million. |
| (c) | Net income for the nine months ended September 30, 2012 has included loss from discontinued business (net of tax) of $0.8 million and other & interest income of $7.7 million, which consisted of subsidy received as an advance technology allowance from Wuxi government as an incentive for our investment and factory expansion in Wuxi of $2.6 million, incentive allowance from Shenzhen government for mechanical and electrical products of $0.6 million and interest income & exchange gain of $2.5 million. |
| (d) | Percentage change is not applicable if either of the two periods contains a loss. |
| (e) | This information has been published on the Company’s website http://www.namtai.com/quarterly/quarterly.htm under the quarterly earnings report of Q3 2012 on page 7, Condensed Consolidated Statements of Operations. |
1
SUPPLEMENTARY INFORMATION (UNAUDITED) IN THE THIRD QUARTER OF 2012
1. Quarterly Sales
(In thousands of US Dollars, except percentage information)
| Quarter |
2012 | 2011 | YoY(%) (Quarterly) |
YoY(%) (Quarterly accumulated) |
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|
1st Quarter |
$ | 94,062 | $ | 142,410 | (33.9 | ) | (33.9 | ) | ||||||||
|
2nd Quarter |
$ | 205,146 | $ | 125,994 | 62.8 | 11.5 | ||||||||||
|
3rd Quarter |
$ | 380,251 | $ | 127,600 | 198.0 | 71.6 | ||||||||||
|
4th Quarter |
— | $ | 129,073 | |||||||||||||
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| Total |
$ | 679,459 | $ | 525,077 | ||||||||||||
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Note:
| * | The above sales have excluded certain discontinued business. Please see page 7 of the Company’s Condensed Consolidated Statements of Operations for details. This information has also been published on the Company’s website at http://www.namtai.com/quarterly/quarterly.htm in the quarterly earnings report of Q3 2012 on page 7, Condensed Consolidated Statements of Operations. |
2. Key Highlights of Financial Position
| As at September 30, | As at December 31, | |||||||||||
| 2012(a) | 2011(a) | 2011(a) | ||||||||||
| Cash on hand (b) |
$ | 155.2 million | $ | 154.8 million | $ | 118.5 million | ||||||
| Ratio of cash to current liabilities |
0.52 | 1.54 | 0.88 | |||||||||
| Current ratio |
1.55 | 3.07 | 2.22 | |||||||||
| Ratio of total assets to total liabilities |
2.18 | 4.33 | 3.38 | |||||||||
| Return on equity |
12.0 | % | 2.4 | % | 0.2 | % | ||||||
| Ratio of total liabilities to total equity |
0.85 | 0.30 | 0.42 | |||||||||
| Debtors turnover |
63 days | 39 days | 46 days | |||||||||
| Inventory turnover |
47 days | 17 days | 19 days | |||||||||
| Average payable period |
107 days | 49 days | 54 days | |||||||||
Notes:
| (a) | The Company’s ratios as at September 30,2011 have been restated according to the reclassified assets and liabilities resulting from discontinued business. Please see page 8 of the Company’s Condensed Consolidated Balance Sheets for further information. This information has also been published on the Company’s website at http://www.namtai.com/quarterly/quarterly.htm in the quarterly earnings report of Q3 2012 on page 8, Condensed Consolidated Balance Sheets. |
| (b) | According to the definition of “Balance Sheet” under the Financial Accounting Standard Board (the “FASB”) Accounting Standards Codification (“ASC”) 210-10-20, cash equivalents are short-term, highly liquid investments that are readily convertible to cash. Only investments with original maturities of three months or less when purchased qualify under that definition. Therefore, the fixed deposits maturing over three months are not classified as cash on hand but require separate disclosure. |
OPERATING RESULTS
Sales in the third quarter of 2012 were $380.3 million, an increase of 198.0%, compared to the sales of $127.6 million for the same quarter of 2011. Gross profit in the third quarter of 2012 was $34.8 million, an increase of 511.1%, compared to $5.7 million in the third quarter of last year. Gross profit margin for the third quarter of 2012 was 9.2%, up 4.7% from 4.5% in the third quarter of last year. Operating income for the third quarter of 2012 was $26.8 million, compared to the operating loss of $0.9 million in the third quarter of last year. Net income in the third quarter of 2012 was $24.6 million, or $0.54 per share (diluted), an increase of 2,142.2%, as compared to the net income of $1.1 million, or $0.02 per share (diluted) in the third quarter of last year.
For the nine months ended September 30, 2012, net sales were $679.5 million, an increase of 71.6%, compared to $396.0 million in the same period of 2011. Gross profit for the nine months September 30, 2012 was $56.8 million, an increase of 215.4%, compared to $18.0 million in the same period of last year. Gross profit margin for the nine months ended September 30, 2012 was 8.4%, an increase of 3.9%, compared to 4.5% for the same period of last year. Operating income for the nine months ended September 30, 2012 was $35.1 million, compared to an operating loss of $2.3 million in the same period of last year. Net income for the nine months ended September 30, 2012 was $30.3 million, or $0.67 per share (diluted), an increase of 396.7%, compared to net income of $6.1 million, or $0.14 per share (diluted), in the same period last year.
2
The improvement of the Company’s results in the third quarter of 2012 was mainly due to six factors. First, sales increased significantly by 198.0% compared to the same period last year, as a result of (i) the Company’s Wuxi manufacturing facility continued to ramp up of its production of high-resolution liquid crystal display modules (“LCMs”) for tablets and (ii) the Company’s Shenzhen manufacturing facility began mass production of high-resolution LCMs for smartphones in September 2012. Second, the management of the Company adopted certain employee stock option arrangement and forfeited a cash incentive bonus of $5.1 million. Third, the Company had $2.0 million in other and interest income, including $0.6 million of incentive allowance from the PRC government for the manufacturing of mechanical and electrical products, $0.9 million of interest income and $0.5 million of exchange gain. Fourth, the Company has improved its gross and net profit by discontinuing certain sales orders that have had poor performance. Fifth, the Company enjoyed benefit from the certain exemption treatment and tax reduction for its Wuxi operation and a tax benefit of $1.1 million as a result of tax losses carried forward from last year. Lastly, the Company has also been successful in its cost control management which effectively maintaining expenses at a similar level as before even though it had a significant increase in sales.
With respect to the discontinued low profit margin businesses, for the three months ended September 30, 2012 and September 30, 2011, the net sales were $1.8 million and $19.8 million, gross profit were $0.6 million and $2.4 million, and operating income were $0.9 million and $1.0 million, respectively. For the nine months ended September 30, 2012 and September 30, 2011, the net sales were $24.1 million and $61.0 million, gross (loss) profit were ($0.6 million) and $7.8 million, and operating (loss) income were ($2.7 million) and $3.4 million, respectively. Please see page 7 of the Company’s Condensed Consolidated Statements of Operations for further details. This information has also been published on the Company’s website at http://www.namtai.com/quarterly/quarterly.htm in the quarterly earnings report of Q3 2012 on page 7, Condensed Consolidated Statements of Operations.
EXPANSION PROJECT
a) Expansion Project in Wuxi City, PRC
The Company had purchased a parcel of land of approximately 470,000 square feet from the Wuxi government for the expansion of its Wuxi manufacturing facility. On July 12, 2012, the Company conducted the stone-laying ceremony for the construction of the facility’s new additions, which is expected to be completed by August 2014. The expanded facility will include office buildings, a research and development center, an environmental and safety control center, an SMT plant and warehouse, labor union buildings and employee activity centers.
b) Expansion Project in Shenzhen City, PRC
The Company is still actively and closely working with the Shenzhen government to expedite the release of a parcel of land in Shenzhen, Guangming Hi-Tech Industrial Park of approximately 1,270,000 square feet. The Shenzhen government recently announced a city rezoning project for an area that encompasses the Company’s existing Shenzhen facility. As a result, the location of the Company’s existing Shenzhen facility will be redeveloped as an high-end commercial district area and will no longer be suitable for any manufacturing factory thereafter. The Company has been requested to move out from the existing facility in due course and therefore has placed the need for relocation in high priority. The Company plans to continue to focus its efforts to facilitate the Shenzhen government to release the land in Guangming for its relocation, expansion and development needs at the earliest practical time. The Company currently aims to move into the new location in Guangming within three years. Subsequent to this relocation, the Company will continue to hold the existing location of its Shenzhen manufacturing facility, as a significant valuable asset for the time being.
3
COMPANY OUTLOOK
The Company’s revenue increased by 198.0% in the third quarter of 2012 compared to the third quarter of 2011, excluding the contribution from the discontinued businesses. This significant revenue increase was principally due to the ramping up of the production of high-resolution LCM for tablets at the Company’s Wuxi facility and the commencement of the production of high-resolution LCM for smartphones at the Company’s Shenzhen facility beginning in September 2012. After the final evaluation on the viability of its flexible printed circuit (“FPC”) business based on its performance in the third quarter of 2012, the Company has decided to discontinue its FPC business at the end of March 2013, which business has been generating losses since its initial production.
The Company is currently under discussion with its existing customers, as essential production partners, for the manufacturing of another LCM product, which the Company believes will continue to drive the expansion of its existing production capacity and production facilities.
The Company’s management anticipates its customer orders would grow steadily and the existing production capacity would be expected to reach full capacity before the end of 2013, if the increases in demand for the existing production of LCMs for smartphones and tablets as well as the other new LCM product business continue to hold. Nevertheless, the Company may continue to face certain risks including but not limited to, the appreciation of renminbi, inflation in China, labor shortage, materials shortage, customers and suppliers’ inability to meet their contractual obligations, financial difficulties resulting in customers and suppliers’ illiquidity and global political events and actions, including war and terrorism. These risks could affect the Company’s sales, profit margin and investment lost.
THIRD QUARTER RESULTS ANALYST CONFERENCE CALL AND WEBCAST
The Company will hold a conference call on Monday, November 5, 2012, at 8:30 a.m. (EST). Shareholders, media and interested investors are invited to listen to the live webcast at www.namtai.com by clicking on the conference call link (under events) or over the phone by dialing 877.407.3140 just prior to its start time. International participants may dial 201.689.8473. Analysts who wish to receive the toll free dial-in number for this conference call are invited to contact us at 212.245.4577 or via email to kevin@cameronassoc.com.
PAYMENT OF QUARTERLY DIVIDENDS FOR 2012 AND 2013
As announced on October 31, 2011, the Company has set payment of quarterly dividends for 2012. The dividends for Q4 2012 were paid on October 20, 2012. The following table updates the previously announced schedule for declaration and payment of quarterly dividends in 2012.
| Quarterly Payment |
Record Date | Payment Date | Dividend (per share) |
Status | ||||||
| Q1 2012 |
December 31, 2011 | January 20, 2012 | $ | 0.07 | PAID | |||||
| Q2 2012 |
March 31, 2012 | April 20, 2012 | $ | 0.07 | PAID | |||||
| Q3 2012 |
June 30, 2012 | July 20, 2012 | $ | 0.07 | PAID | |||||
| Q4 2012 |
September 30, 2012 | October 20, 2012 | $ | 0.07 | PAID | |||||
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| Total for Full Year 2012 |
$ | 0.28 | ||||||||
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We are pleased to announce that, considering the Company’s cash position and the promising future outlook for a continual and profitable growth, our Board of Directors has determined it appropriate to continue dividend payments and has authorized a 114.3% increase in the quarterly dividend payments in 2013 according to the schedule set forth below.
4
| Quarterly Payment |
Record Date |
Payment Date |
Dividend (per share) |
Status | ||||||
| Q1 2013 |
December 31, 2012 | before January 31, 2013 | $ | 0.15 | ||||||
| Q2 2013 |
March 31, 2013 | before April 30, 2013 | $ | 0.15 | ||||||
| Q3 2013 |
June 30, 2013 | before July 31, 2013 | $ | 0.15 | ||||||
| Q4 2013 |
September 30, 2013 | before October 31, 2013 | $ | 0.15 | ||||||
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| Total for Full Year 2013 |
$ | 0.60 | ||||||||
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The Company’s decision to continue dividend payments in 2013 does not necessarily mean that cash dividend payments will continue thereafter. Whether future dividends will be declared will depend upon the Company’s future growth and earnings, of which there can be no assurance, and the Company’s cash flow needs for further expansion. Accordingly, there can be no assurance that cash dividends on the Company’s common shares will be declared beyond those declared for 2013, what the amounts of such dividends will be or whether such dividends, once declared for a specific period, will continue for any future period, or at all.
PROPOSED SCHEDULE OF RELEASE OF QUARTERLY FINANCIAL RESULTS FOR Q4 2012 and 2013
To enhance the efficiency of delivering the Company’s quarterly financial results to reach the market, the Company’s management has decided to accelerate the schedule of release of quarterly financial results for 2013 to be one week earlier than before. Details of the expected quarterly release dates are as follows:-
| Announcements of Financial Results | ||
| Quarter |
Date of release | |
| Q4 2012 |
January 28, 2013 (Mon) | |
| Q1 2013 |
April 29, 2013 (Mon) | |
| Q2 2013 |
July 29, 2013 (Mon) | |
| Q3 2013 |
October 28, 2013 (Mon) | |
| Q4 2013 |
January 27, 2014 (Mon) | |
CORPORATE VIDEO and WEBSITE
The Company is producing a new Corporate Video and website in order to provide the most recent company information to its shareholders and investors. The Company expects that the new video also will be available on the Company’s new website before the end of November 2012. If any shareholders, media and interested investors would like more information about the Company or its new corporate video, please contact us at 212.245.4577 or via email to kevin@cameronassoc.com to arrange the distribution.
5
FORWARD-LOOKING STATEMENTS AND FACTORS THAT COULD CAUSE OUR SHARE PRICE TO DECLINE
Certain statements included in this press release and the subsequent conference call, other than statements of historical fact, are forward-looking statements. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “may”, “will”, “expect”, “intend”, “estimate”, “anticipate”, “plan”, “seek” or “believe”. These forward-looking statements, which are subject to risks, uncertainties, and assumptions, may include projections of our future financial performance based on our growth strategies and anticipated trends in our business. These statements are only predictions based on our current expectations about future events. There are important factors that could cause our actual results, level of activity, performance, or achievements to differ materially from the results, level of activities, performance, or achievements expressed or implied by the forward-looking statements, including, but not limited to, a deterioration of the markets 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 confirm prior orders or pay for the Company’s products; the financial resources and credit rating of Company’s customers under the current global recession; the effects that current credit and market conditions could have on the liquidity and financial condition of our customers and suppliers, including any impact on their ability to meet their contractual obligations; the sufficiency of the Company’s cash position and other sources of liquidity to operate its business; the negative effects of increased competition pressure on the Company’s revenues and margins; component quality or shortage, whether or not cause by customers change in specifications, delay in the Company’s ability to take possession of land for development of additional production facilities, continued inflation and appreciation of the Renminbi against the US dollar; rising labor costs in China and changes in the labor supply and labor relations our ability to win additional government business. In particular, you should consider the risks outlined under the heading “Risk Factors” in our most recent Annual Report on Form 20-F and in our Current Report filed from time to time on Form 6-K. The Company’s decision to continue dividend payments in 2013 does not necessarily mean that dividend payments will continue thereafter. Whether future dividends will be declared depend upon the Company’s future growth and earnings, of which there can be no assurance, as well as the Company’s cash flow needs for further expansion. Accordingly, there can be no assurance that cash dividends on the Company’s common shares will be declared beyond those declared for 2013, what amount that dividends may be or whether such dividends, once declared for a specific period, will continue for any future period, or at all, Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance, or achievements. You should not rely upon forward-looking statements as predictions of future events. These forward-looking statements apply only as of the date of this press release and the subsequent investors conference call; as such, they should not be unduly relied upon as circumstances change. Except as required by law, we are not obligated, and we undertake no obligation, to release publicly any revisions to these forward-looking statements that might reflect events or circumstance occurring after the date of this release or those that might reflect the occurrence of unanticipated events.
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, consumer electronic, medical and automotive products. Through our electronics manufacturing services operations, we manufacture electronic components and subassemblies, including LCD modules, FPC subassemblies and image-sensor modules and PCBAs. These components are used in numerous electronic products, including mobile phones, tablets, 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 Electronics, Inc. is a corporation registered in the British Virgin Islands and listed on the New York Stock Exchange (Symbol “NTE”). All the Company’s operations are located in the People’s Republic of China.
6
NAM TAI ELECTRONICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE PERIODS ENDED SEPTEMBER 30, 2012 AND 2011
(In Thousands of US Dollars except share and per share data)
| Unaudited Three months ended September 30 |
Unaudited Nine months ended September 30 |
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| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| Net sales |
$ | 380,251 | $ | 127,600 | $ | 679,459 | $ | 396,004 | ||||||||
| Cost of sales |
345,450 | 121,905 | 622,646 | 377,990 | ||||||||||||
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| Gross profit |
34,801 | 5,695 | 56,813 | 18,014 | ||||||||||||
| Costs and expenses |
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| General and administrative expenses (1) |
6,850 | 4,956 | 18,078 | 15,782 | ||||||||||||
| Selling expenses |
964 | 1,025 | 2,387 | 2,896 | ||||||||||||
| Research and development expenses |
190 | 565 | 1,268 | 1,636 | ||||||||||||
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| 8,004 | 6,546 | 21,733 | 20,314 | |||||||||||||
| Operating income (loss) |
26,797 | (851 | ) | 35,080 | (2,300 | ) | ||||||||||
| Other income , net (2) |
1,416 | 767 | 6,452 | 3,463 | ||||||||||||
| Interest income |
659 | 639 | 1,480 | 2,119 | ||||||||||||
| Interest expenses |
(47 | ) | — | (260 | ) | — | ||||||||||
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| Income before income tax |
28,825 | 555 | 42,752 | 3,282 | ||||||||||||
| Income tax expenses |
(5,022 | ) | (388 | ) | (11,638 | ) | (571 | ) | ||||||||
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| Income from continuing business |
23,803 | 167 | 31,114 | 2,711 | ||||||||||||
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| Income (loss) from discontinued business, net of tax (3) |
749 | 928 | (799 | ) | 3,405 | |||||||||||
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| Consolidated net income |
$ | 24,552 | $ | 1,095 | $ | 30,315 | $ | 6,116 | ||||||||
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| Basic net income (loss) per share: |
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| Basic income per share from continuing business |
$ | 0.53 | $ | 0.00 | $ | 0.69 | $ | 0.06 | ||||||||
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| Basic income (loss) per share from discontinued business |
$ | 0.02 | $ | 0.02 | $ | (0.01 | ) | $ | 0.08 | |||||||
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| Basic net income per share |
$ | 0.55 | $ | 0.02 | $ | 0.68 | $ | 0.14 | ||||||||
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| Diluted net income (loss) per share: |
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| Diluted income per share from continuing business |
$ | 0.53 | $ | 0.00 | $ | 0.69 | $ | 0.06 | ||||||||
| Diluted income (loss) per share from discontinued business |
$ | 0.01 | $ | 0.02 | $ | (0.02 | ) | $ | 0.08 | |||||||
| Diluted net income per share |
$ | 0.54 | $ | 0.02 | $ | 0.67 | $ | 0.14 | ||||||||
| Weighted average number of shares (’000) |
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| Basic |
44,804 | 44,804 | 44,804 | 44,804 | ||||||||||||
| Diluted |
45,304 | 44,825 | 45,093 | 44,843 | ||||||||||||
Notes:
| (1) | The Company management adopted the employee stock option plan with a total of 1.43 million shares options granted, in which 600,000 shares options have an exercise price of $6.66 and 831,000 share options with an exercise price of $5.63. The management has given up the cash incentive bonus and which were reversed in the third quarter of 2012. |
| (2) | The other & interest income of $2 million from continuing business in the third quarter of 2012 included incentive allowance of $0.6 million from Shenzhen government for mechanical and electrical product and interest income & exchange gain of $1.4 million. |
| (3) | The sales from the discontinued business were $1.8 million and $19.8 million for the three months ended September 30, 2012 and 2011 respectively. |
7
NAM TAI ELECTRONICS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
AS AT SEPTEMBER 30, 2012 AND DECEMBER 31, 2011
(In Thousands of US Dollars)
| Unaudited September 30 2012 |
December 31 2011 |
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| ASSETS |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 155,239 | $ | 118,510 | ||||
| Fixed deposits maturing over three months |
3,871 | 34,825 | ||||||
| Accounts and notes receivable, net |
155,268 | 65,754 | ||||||
| Inventories |
106,415 | 26,515 | ||||||
| Prepaid expenses and other receivables |
34,342 | 14,334 | ||||||
| Finance lease receivable – current |
3,504 | — | ||||||
| Deferred tax assets – current |
2,011 | 3,101 | ||||||
| Income taxes recoverable |
167 | — | ||||||
| Current assets from discontinued business |
1,648 | 34,179 | ||||||
|
|
|
|
|
|||||
| Total current assets |
462,465 | 297,218 | ||||||
|
|
|
|
|
|||||
| Property, plant and equipment, net |
158,790 | 137,393 | ||||||
| Finance lease receivable – non current |
9,391 | — | ||||||
| Land use rights |
16,627 | 11,981 | ||||||
| Deposits for property, plant and equipment |
— | 4,247 | ||||||
| Deferred tax assets – non current |
4,124 | 5,922 | ||||||
| Other assets |
809 | 982 | ||||||
|
|
|
|
|
|||||
| Total assets |
$ | 652,206 | $ | 457,743 | ||||
|
|
|
|
|
|||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||||||
| Current liabilities: |
||||||||
| Notes payable |
$ | 4,306 | $ | 268 | ||||
| Accounts payable |
242,302 | 74,429 | ||||||
| Accrued expenses and other payables |
42,367 | 35,980 | ||||||
| Dividend payable |
3,136 | 12,545 | ||||||
| Income tax payable |
2,727 | 656 | ||||||
| Current liabilities from discontinued business |
3,085 | 10,280 | ||||||
|
|
|
|
|
|||||
| Total current liabilities |
297,923 | 134,158 | ||||||
| Deferred tax liabilities |
1,379 | 1,379 | ||||||
|
|
|
|
|
|||||
| Total liabilities |
299,302 | 135,537 | ||||||
| EQUITY |
||||||||
| Shareholders’ equity: |
||||||||
| Common shares |
448 | 448 | ||||||
| Additional paid-in capital |
287,438 | 287,055 | ||||||
| Retained earnings |
65,026 | 34,711 | ||||||
| Accumulated other comprehensive loss |
(8 | ) | (8 | ) | ||||
|
|
|
|
|
|||||
| Total shareholders’ equity |
352,904 | 322,206 | ||||||
|
|
|
|
|
|||||
| Total liabilities and shareholders’ equity |
$ | 652,206 | $ | 457,743 | ||||
|
|
|
|
|
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8
NAM TAI ELECTRONICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE PERIODS ENDED SEPTEMBER 30, 2012 AND 2011
(In Thousands of US Dollars)
| Unaudited Three months ended September 30 |
Unaudited Nine months ended September 30 |
|||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES |
||||||||||||||||
| Consolidated net income |
$ | 24,552 | $ | 1,095 | $ | 30,315 | $ | 6,116 | ||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||||||||||
| Depreciation and amortization of property, plant and equipment, land use rights and other assets |
7,161 | 4,105 | 17,614 | 13,260 | ||||||||||||
| (Reversal) provision for inventories |
(32 | ) | (72 | ) | 1,308 | 64 | ||||||||||
| (Reversal) provision for goods return |
(37 | ) | — | 603 | — | |||||||||||
| (Reversal) provision for bad debts |
(288 | ) | (165 | ) | 606 | 94 | ||||||||||
| Reversal for loss on purchase commitments |
(496 | ) | — | — | — | |||||||||||
| Loss (gain) on disposal of property, plant and equipment |
235 | 5 | (806 | ) | 45 | |||||||||||
| Loss on derivative financial instrument |
— | — | 156 | — | ||||||||||||
| Share-based compensation expenses |
383 | — | 383 | 112 | ||||||||||||
| Decrease (increase) in deferred income taxes |
813 | (751 | ) | 5,202 | (2,639 | ) | ||||||||||
| Unrealized exchange gain |
(381 | ) | (482 | ) | (141 | ) | (2,492 | ) | ||||||||
| Changes in current assets and liabilities: |
||||||||||||||||
| (Increase) decrease in accounts receivable |
(41,252 | ) | 6,022 | (82,960 | ) | 5,852 | ||||||||||
| (Increase) decrease in inventories |
(41,993 | ) | 6,531 | (75,960 | ) | (39 | ) | |||||||||
| Increase in prepaid expenses and other receivables |
(319 | ) | (4,044 | ) | (14,416 | ) | (5,240 | ) | ||||||||
| Increase in income tax recoverable |
(1 | ) | (1 | ) | (167 | ) | (3 | ) | ||||||||
| (Decrease) increase in notes payable |
(13,572 | ) | — | 4,038 | — | |||||||||||
| Increase (decrease) in accounts payable |
74,360 | (6,797 | ) | 159,486 | (5,612 | ) | ||||||||||
| Increase in accrued expenses and other payables |
12,757 | 1,963 | 16,113 | 294 | ||||||||||||
| Increase (decrease) in income tax payable |
1,248 | (701 | ) | 2,723 | (2,129 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total adjustments |
(1,414 | ) | 5,613 | 33,782 | 1,567 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net cash provided by operating activities |
$ | 23,138 | $ | 6,708 | $ | 64,097 | $ | 7,683 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
9
NAM TAI ELECTRONICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE PERIODS ENDED SEPTEMBER 30, 2012 AND 2011
(In Thousands of US Dollars)
| Unaudited Three months ended September 30 |
Unaudited Nine months ended September 30 |
|||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES |
||||||||||||||||
| Purchase of property, plant and equipment and land use rights |
$ | (4,562 | ) | $ | (12,147 | ) | $ | (53,037 | ) | $ | (21,747 | ) | ||||
| Decrease (increase) in deposits for purchase of property, plant and equipment |
254 | (15,891 | ) | 4,543 | (20,487 | ) | ||||||||||
| Increase in other assets |
— | — | — | (106 | ) | |||||||||||
| Payment for derivative financial instrument |
— | — | (156 | ) | — | |||||||||||
| Decrease in Entrusted loan |
3,956 | — | — | — | ||||||||||||
| Proceeds from disposal of property, plant and equipment and other assets |
42 | — | 12,491 | — | ||||||||||||
| Increase (decrease) in finance lease receivable |
898 | — | (12,895 | ) | — | |||||||||||
| Increase (decrease) in fixed deposits maturing over three months |
1,284 | (34,388 | ) | 30,954 | (34,388 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net cash provided by (used in) investing activities |
$ | 1,872 | $ | (62,426 | ) | $ | (18,100 | ) | $ | (76,728 | ) | |||||
|
|
|
|
|
|
|
|
|
|||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES |
||||||||||||||||
| Cash dividends paid |
$ | (3,137 | ) | $ | (2,240 | ) | $ | (9,409 | ) | $ | (6,721 | ) | ||||
| Repayment of Trust Receipt loans |
(5,817 | ) | — | — | — | |||||||||||
| Repayment of Entrusted loan |
(3,956 | ) | — | — | — | |||||||||||
| Repayment of bank loans |
(4,592 | ) | — | — | — | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net cash used in financing activities |
$ | (17,502 | ) | $ | (2,240 | ) | $ | (9,409 | ) | $ | (6,721 | ) | ||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net increase (decrease) in cash and cash equivalents |
7,508 | (57,958 | ) | 36,588 | (75,766 | ) | ||||||||||
| Cash and cash equivalents at beginning of period |
147,350 | 212,269 | 118,510 | 228,067 | ||||||||||||
| Effect of exchange rate changes on cash and cash equivalents |
381 | 482 | 141 | 2,492 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Cash and cash equivalents at end of period |
$ | 155,239 | $ | 154,793 | $ | 155,239 | $ | 154,793 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
10
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIODS ENDED SEPTEMBER 30, 2012 AND 2011
(In Thousands of US Dollars)
| 1. | Accumulated other comprehensive income represents foreign currency translation adjustments. The comprehensive income was $24,552 and $1,095 for the three months ended September 30, 2012 and 2011 respectively. |
| 2. | Business segment information: |
The Company’s business is separated into the Telecommunication Components Assembly – (“TCA”) and Flexible Printed Circuit (“FPC”) segments in 2012. Since the first quarter of 2012, the Consumer Electronic Communication Products (“CECP”) segment fell below the threshold prescribed under FASB ASC 280-10-50-12 and the CECP segment was combined with the TCA segment. In the third quarter of 2012, the net loss from the FPC segment was above the threshold prescribed under FASB ASC 280-10-50-12 and the FPC segment was separated from the TCA segment.
| Unaudited Three months ended September 30 |
Unaudited Nine months ended September 30 |
|||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| NET SALES CONTINUING BUSINESS: |
||||||||||||||||
| - TCA |
$ | 372,339 | $ | 122,966 | $ | 658,578 | $ | 385,627 | ||||||||
| - FPC |
7,912 | 4,634 | 20,881 | 10,377 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total net sales from continuing business |
$ | 380,251 | $ | 127,600 | $ | 679,459 | $ | 396,004 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| NET (LOSS) INCOME FROM CONTINUING BUSINESS |
||||||||||||||||
| - TCA |
$ | 24,809 | $ | 3,803 | $ | 36,924 | $ | 13,974 | ||||||||
| - FPC |
(1,792 | ) | (3,051 | ) | (4,805 | ) | (9,695 | ) | ||||||||
| - Corporate |
786 | (585 | ) | (1,005 | ) | (1,568 | ) | |||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total net income from continuing business |
$ | 23,803 | $ | 167 | $ | 31,114 | $ | 2,711 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Unaudited Sep. 30 2012 |
Dec. 31 2011 | |||||||
| IDENTIFIABLE ASSETS BY SEGMENT: |
||||||||
| - TCA |
$ | 490,933 | $ | 239,734 | ||||
| - FPC |
41,743 | 50,915 | ||||||
| - Corporate |
117,882 | 132,915 | ||||||
|
|
|
|
|
|||||
| Total assets |
$ | 650,558 | $ | 423,564 | ||||
|
|
|
|
|
|||||
11
NAM TAI ELECTRONICS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIODS ENDED SEPTEMBER 30, 2012 AND 2011
(In Thousands of US Dollars)
| 3. | A summary of the net sales, net income (loss) and long-lived assets by geographic areas is as follows: |
| Unaudited Three months ended September 30 |
Unaudited Nine months ended September 30 |
|||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| NET SALES FROM OPERATIONS WITHIN: |
||||||||||||||||
| - PRC, excluding Hong Kong: |
||||||||||||||||
| Unaffiliated customers |
$ | 380,251 | $ | 127,600 | $ | 679,459 | $ | 396,004 | ||||||||
| Intercompany sales |
22,855 | 196 | 41,526 | 812 | ||||||||||||
| - Intercompany eliminations |
(22,855 | ) | (196 | ) | (41,526 | ) | (812 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total net sales |
$ | 380,251 | $ | 127,600 | $ | 679,459 | $ | 396,004 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| NET INCOME (LOSS) FROM OPERATIONS WITHIN: |
||||||||||||||||
| - PRC, excluding Hong Kong |
$ | 24,568 | $ | 1,153 | $ | 33,248 | $ | 6,262 | ||||||||
| - Hong Kong |
(765 | ) | (986 | ) | (2,134 | ) | (3,551 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total net income |
$ | 23,803 | $ | 167 | $ | 31,114 | $ | 2,711 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Unaudited Sep. 30 2012 |
Dec. 31 2011 |
|||||||
| LONG-LIVED ASSETS WITHIN: |
||||||||
| - PRC, excluding Hong Kong |
$ | 171,051 | $ | 144,788 | ||||
| - Hong Kong |
4,366 | 4,586 | ||||||
|
|
|
|
|
|||||
| Total long-lived assets |
$ | 175,417 | $ | 149,374 | ||||
|
|
|
|
|
|||||
12