Nov. 2, 2009 (PR Newswire) --
SHENZHEN, China, Nov. 2 /PRNewswire-FirstCall/ -- Nam Tai Electronics, Inc. ("Nam Tai" or the "Company") (NYSE: NTE) today announced its unaudited results for the third quarter ended September 30, 2009.
KEY HIGHLIGHTS
(In thousands of US Dollars, except per share data, percentages and as otherwise stated)
Quarterly Results Nine Months Results
----------------- -------------------
Q3 2009 Q3 2008 YoY(%) 9M 2009 9M 2008 YoY(%)
-------- -------- ----- -------- -------- -----
Net sales $110,416 $160,534 (31.2) $314,402 $453,831 (30.7)
--------- -------- -------- ----- -------- -------- -----
Gross profit $12,614 $15,738 (19.9) 30,158 $56,030 (46.2)
------------ ------- ------- ----- ------ ------- -----
% of sales 11.4% 9.8% - 9.6% 12.3% -
---------- ---- --- --- --- ---- ---
Operating income
(loss)(a) $4,810 $4,421 8.8 $(304) $20,841 (101.5)
---------------- ------ ------ --- ----- ------- ------
% of sales 4.4% 2.8% - (0.1%) 4.6% -
---------- --- --- --- ----- --- ---
per share
(diluted) $0.11 $0.10 10.0 ($0.01) $0.47 (102.1)
---------- ----- ----- ---- ------ ----- ------
Net income
attributable to
Nam Tai
shareholders(a) (b) $4,504 $4,912 (8.3) $1,236 $45,082 (97.3)
---------------- ------ ------ ---- ------ ------- -----
% of sales 4.1% 3.1% - 0.4% 9.9% -
---------- --- --- ---- --- --- ----
Basic earnings per
share $0.10 $0.11 (9.1) $0.03 $1.01 (97.0)
------------------ ----- ----- ---- ----- ----- -----
Diluted earnings
per share $0.10 $0.11 (9.1) $0.03 $1.01 (97.0)
---------------- ----- ----- ---- ----- ----- -----
Weighted average
number of shares
('000)
Basic 44,804 44,804 - 44,804 44,804 -
Diluted 44,813 44,806 - 44,808 44,806 -
------- ------ ------ ----- ------ ------ ------
Note:
(a) Operating loss and net income for the nine months ended September 30,
2009 included $5.1 million of employee severance benefits in PRC
subsidiaries.
(b) For the nine months ended September 30, 2008, net income included
$20.2 million of gain on disposal of Namtek business in J.I.C.
Technology Company Limited ("JIC").
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 infrequent or unusual items such as gain on sale of shares of a subsidiary, employee severance benefits in PRC subsidiaries and other income recovered from Tele-Art Inc. (in liquidation). By disclosing the non-GAAP information, management intends to provide investors with additional information to analyze the Company's performance, core results and underlying trends. Non-GAAP information is not determined using US GAAP; therefore, the information is not necessarily comparable to other companies and should not be used to compare the Company's performance over different periods. Non-GAAP information should not be viewed as a substitute for, or superior to, net income or other financial data prepared in accordance with US GAAP as measures of our operating results or liquidity. Users of this financial information should consider the types of events and transactions for which adjustments have been made. See the table below for a reconciliation of non-GAAP amounts to amounts reported under US GAAP.
GAAP TO NON-GAAP RECONCILIATION
(In millions of US Dollars, except for per share (diluted) and numbers of shares)
Three months ended
September 30,
-------------
2009 2008
---- ----
per per
share share
millions (diluted) millions (diluted)
------------------------- -------- ------- -------- -------
GAAP Operating Income (Loss) $4.8 $0.11 $4.4 $0.10
--------------------- ---- ----- ---- -----
Add back:
- Share-based
compensation expenses(a) - - - -
--------------------------- --- --- ---- ---
- Professional expenses in
relation to privatization
of NTEEP - - - -
-------------------------- --- --- ---- ---
- Employee severance
benefits in PRC
subsidiaries (b) - - - -
------------------------- --- --- ---- ---
Non-GAAP Operating Income $4.8 $0.11 $4.4 $0.10
------------------------- ==== ===== ==== =====
GAAP Net Income (Loss)
attributable to Nam Tai
shareholders $4.5 $0.10 $4.9 $0.11
------------------------ ---- ----- ---- -----
Add back/(Less):
- Share-based
compensation expenses(a) - - - -
--------------------------- --- --- ---- ---
- Professional expenses in
relation to privatization
of NTEEP - - - -
-------------------------- --- --- ---- ---
- Employee severance
benefits in PRC
subsidiaries (after
deducting tax and sharing
with noncontrolling
interest) (b) - - - -
-------------------------- --- --- ---- ---
- Gain on sale of
subsidiaries' shares (c) - - - -
------------------------- --- --- ---- ---
- Other income
recovered from Tele-Art
Inc. (in liquidation)(d) - - - -
-------------------------- --- --- ---- ---
Non-GAAP Net Income
attributable to Nam Tai
shareholders $4.5 $0.10 $4.9 $0.11
------------------------- ==== ===== ==== =====
Weighted average number of
shares - diluted ('000) 44,813 44,806
-------------------------- ------ ------
Nine months ended
September 30,
-------------
2009 2008
---- ----
per per
share share
millions (diluted) millions (diluted)
------------------------- -------- ------- -------- -------
GAAP Operating Income (Loss) $(0.3) $(0.01) $20.8 $0.47
--------------------- ----- ------ ----- -----
Add back:
- Share-based
compensation expenses(a) 0.1 - 1.2 0.03
--------------------------- --- --- --- ----
- Professional expenses in
relation to privatization
of NTEEP 0.9 0.02 - -
-------------------------- --- ---- --- ---
- Employee severance
benefits in PRC
subsidiaries (b) 5.1 0.11 - -
------------------------- --- ---- --- ---
Non-GAAP Operating Income $5.8 $0.12 $22.0 $0.50
------------------------- ==== ===== ===== =====
GAAP Net Income (Loss)
attributable to Nam Tai
shareholders $1.2 $0.03 $45.1 $1.01
------------------------ ---- ----- ----- -----
Add back/(Less):
- Share-based
compensation expenses(a) 0.1 - 1.2 0.03
--------------------------- --- --- --- ----
- Professional expenses in
relation to privatization
of NTEEP 0.9 0.02 - -
-------------------------- --- ---- --- ---
- Employee severance
benefits in PRC
subsidiaries (after
deducting tax and sharing
with noncontrolling
interest) (b) 3.2 0.07 - -
-------------------------- --- ---- --- ---
- Gain on sale of
subsidiaries' shares (c) - - (20.2) (0.45)
------------------------- --- --- ----- -----
- Other income
recovered from Tele-Art
Inc. (in liquidation)(d) - - (2.9) (0.07)
-------------------------- --- --- ---- -----
Non-GAAP Net Income
attributable to Nam Tai
shareholders $5.4 $0.12 $23.2 $0.52
------------------------- ==== ===== ===== =====
Weighted average number of
shares - diluted ('000) 44,808 44,806
-------------------------- ------ ------
Note:
(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 ($0.2 million for year 2008 to directors in
accordance with the Company's practice of making annual option grants
to its directors upon their election for the ensuing year and
approximately $1.0 million principally attributable to options to
purchase approximately 20 million shares granted by the Company's Hong
Kong Stock Exchange- listed subsidiary, Nam Tai Electronic &
Electrical Products Limited ("NTEEP")(Stock Code : 2633)), to certain
of its executive directors and employees in the first quarter of
2008. In December 2008, NTEEP repurchased and cancelled all of its
outstanding 17,440,000 options from the option holders at a total
consideration of approximately $42,000. Accordingly, Nam Tai recorded
no share-based compensation expense (relating to NTEEP) during the
three ended September 30, 2009.
(b) The expense represents employee benefit and severance arrangements in
accordance with the PRC statutory severance requirements.
(c) On March 4, 2008, Nam Tai completed the sale of its entire equity
interest of Namtek business in JIC, a Hong Kong Stock Exchange listed
subsidiary (Stock Code: 00987), to an independent third party. In this
transaction, Nam Tai sold 572,594,978 shares of JIC, representing
74.99% of its outstanding share capital for cash of approximately $51
million, which resulted in a gain on disposal of approximately $20
million.
(d) A total amount of approximately $2.9 million of other income in the
Company's financial statements for the second quarter of 2008. This
amount represents Nam Tai's share of proceeds realized from the
disposal for the account of Tele-Art, Inc.'s liquidator of 477,319 Nam
Tai shares owned by Tele-Art, Inc. (in liquidation)("Tele-Art") and
was paid in settlement of amounts previously funded by Nam Tai in
connection with Tele-Art's liquidation and in partial satisfaction of
judgments in favor of Nam Tai against Tele-Art.
SUPPLEMENTARY INFORMATION (UNAUDITED) IN THE THIRD QUARTER OF 2009
1. Quarterly Sales Breakdown
(In thousands of US Dollars, except percentage information)
YoY(%)
YoY(%) (Quarterly
Quarter 2009 2008 (Quarterly) accumulated)
------- ---- ---- ----------- ------------
1st
Quarter 102,150 147,129 (30.6) (30.6)
--------- ------- ------- ----- -----
2nd
Quarter 101,836 146,168 (30.3) (30.5)
--------- ------- ------- ----- -----
3rd
Quarter 110,416 160,534 (31.2) (30.7)
--------- ------- ------- ----- -----
4th
Quarter - 169,021
--------- --- -------
Total 314,402 622,852
----- ------- -------
2. Breakdown of Net Sales by Product Segment (as a percentage of
Total Net Sales)
2009 2008
---- ----
Segments Q3(%) YTD(%) Q3(%) YTD(%)
-------- ---- ----- ---- -----
Consumer Electronic
and Communication
Products ("CECP") 26% 29% 41% 46%
------------------- -- -- -- --
Telecommunication
Component Assembly
("TCA") 56% 55% 45% 41%
------------------- -- -- -- --
Liquid Crystal
Display Products
("LCDP") 18% 16% 14% 13%
----------------- -- -- -- --
100% 100% 100% 100%
--- --- --- ---
3. Key Highlights of Financial Position
As at
As at September 30, December
31,
2009 2008 2008
---- ---- ----
Cash on hand (a) $189.6 million $250.5 million $237.0 million
----------- -------------- -------------- --------------
Ratio of
cash (a) to
current
liabilities 2.26 1.61 1.66
------------ ---- ---- ----
Current ratio 3.35 2.69 2.67
------------- ---- ---- ----
Ratio of total
assets to
total
liabilities 4.86 3.52 3.58
-------------- ---- ---- ----
Return on Nam
Tai
shareholders'
equity 0.5% 17.8% 9.4%
-------------- --- ---- ---
Ratio of total
liabilities to
total equity 0.26 0.45 0.39
--------------- ---- ---- ----
Debtors
turnover 63 days 75 days 61 days
--------- ------- ------- -------
Inventory
turnover 14 days 23 days 18 days
--------- ------- ------- -------
Average payable
period 62 days 81 days 65 days
--------------- ------- ------- -------
Note: (a) Includes cash equivalents.
THIRD QUARTER REVIEW
The business environment in Nam Tai's product sectors remains difficult and extremely competitive. Sales in the third quarter of 2009 were $110.4 million, a decrease of 31.2% as compared to sales of $160.5 million in the same quarter of 2008. Sales in our CECP segment, TCA segment and LCDP segment dropped by 57.3%, 14.8% and 7.6%, respectively, during the third quarter of 2009, as compared to same period in 2008.
