Nam Tai Electronics (NYSE:NTE)

SHENZHEN, China, May 10, 2013 /PRNewswire/ -- Nam Tai Electronics, Inc. ("Nam Tai" or the "Company") (NYSE Symbol: NTE) today announced that it has received a new purchase order from an existing customer to extend the production at the Company'sShenzhen facility of high-resolution liquid crystal display modules ("LCMs") for a smartphone. 

Under this new purchase order, the Company expects to extend its production of LCMs for smartphones for this customer to the period ending September 2013 to manufacture approximately 15 million additional units. This new purchase order does not alter the customer's decision to eventually transfer its future orders to other suppliers with lower assembling charge. This order only offers temporary relief for the Company and does not guarantee that any new future order will be awarded. In addition, the customer may cancel any or all of this purchase order with payment of a cancellation fee to the Company.

FIRST QUARTER FINANCIALRESULTS

• Net sales in the first quarter of 2013 were $177.5 million, an increase of 102.1%, compared to the net sales of $87.8 million for the same quarter of 2012.
• Gross profit in the first quarter of 2013 was $7.3 million, an increase of 58.4%, compared to $4.6 million in the first quarter of last year. Gross profit margin for the first quarter of 2013 was 4.1%, 1.2% down from 5.3% in the first quarter of last year.
• Net income was $5.0 million, or $0.11 per diluted share, compared to the net loss of $3.6 million, or loss of $0.08 per diluted share, in the first quarter of last year.

COMPANY OUTLOOK

The Company's revenue increased by 102.1% in the first quarter of 2013 compared to the first quarter of 2012, excluding the contribution from the discontinued business. This revenue increase was attributable to the commencement of production of high-resolution LCMs for smartphones at the Company's Shenzhen facility since 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 discontinued its FPC business as of the end of March 2013, which business has been generating losses since its initial production.

The Company depends on a small number of customers. In the first quarter of 2013, as a result of the weak consumer market, LCM orders placed by the Company's major customers were significantly lower than the customers' original forecast. The Company was also compelled to lower the unit sales prices in response to its customers' cost down requirements. There was also indication that orders placed by these customers could be cancelled with short notice. In response to these adverse market conditions, the management has made efforts to minimize potential losses resulting from cancellation and fluctuation of orders by its customers and decided to halt capital investment into technology platforms that cannot produce steady income streams. Unless market conditions improve to the extent that the Company has confidence to achieve a reasonable gross profit and there is no risk of customer confirmed orders being cancelled or significantly reduced or other strategic alternatives are found, the Company may have to halt its best quality LCM production operations service in both its Shenzhen and Wuxi manufacturing facilities by the end of June 2013 in order to minimize further losses and preserve cash. The Company's LCM operations comprise the core of the Company's existing businesses.

The Company is exploring all commercially viable alternatives to maintain its LCM operations, including strategic or technological alliances with complementary business operations, such as with backlight and touch key panel manufacturers. However, there is no assurance that the Company will be able to reach an agreement with these potential business partners on favorable and satisfactory terms.

SHENZHEN, China, March 25, 2013 /PRNewswire/ -- Nam Tai Electronics, Inc. ("Nam Tai" or the "Company") (NYSE: NTE) today announced that the record date for its upcoming cash dividend of $0.15 per common share will be March 28, 2013. The change is being made due to the Good Friday holiday at the New York Stock Exchange on March 29, 2013. The dividend payment date will be April 19, 2013.

Fourth Quarter of 2012

• Sales were $468.5 million, an increase of 262.9%, compared to the sales of $129 million for the same quarter of 2011.
• Gross profit in the fourth quarter of 2012 was $49 million, an increase of 3,855%, compared to $1 million in the fourth quarter of last year.
• Net income in the fourth quarter of 2012 was $36.6 million, or $0.8 per share (diluted), compared to the net loss of $5.6 million, or loss of $0.13 per share (diluted), in the fourth quarter of last year.

COMPANY OUTLOOK

The Company's revenue increased year-over-year 118.6% for 2012, when compared with 2011, excluding the contribution from the discontinued business. This significant revenue increase was attributable to the ramp up of the production of high-resolution LCMs for tablets at the Company's Wuxi facility in June 2012 and the commencement of mass production of high-resolution LCMs for smartphones at the Company's Shenzhen facility 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 also decided to discontinue its FPC business by the end of March 2013, which business has been generating losses since its initial production.

In the fourth quarter of 2012, the Company's revenue increased by 263% compared to the fourth quarter of 2011. The Company is currently coordinating with its existing customers, as essential production partners, to further diversify the Company's product portfolio by developing and manufacturing new model for the existing end-buyer and also extend to other new customers' LCM products used in smartphones, tablets, ultrabook computers and automobiles, which the Company believes, with confidence, will continue to drive its growth in 2013 of its existing production capacity and production facilities.

Due to the high level of competition in the market for tablets, smartphones and ultrabook computers, the Company's management expects its customer orders will continue to fluctuate and its gross profit would also be under more pressure in 2013. In addition, the Company may also 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 loss of investments.

Third Quarter 2012 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.
• 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.

Second Quarer 2012 Results

• Sales in the second quarter of 2012 were $205.1 million, an increase of 62.8%, as compared to sales of $126.0 million for the same quarter of 2011.
  
• Net income in the second quarter of 2012 was $9.4 million, or $0.21 per diluted share, an increase of 212.9%, as compared to net income of $3.0 million, or $0.07 per diluted share in the second quarter of last year.
  

SHENZHEN, China, July 2, 2012 /PRNewswire/ -- Nam Tai Electronics, Inc. ("Nam Tai" or the "Company") (NYSE Symbol: NTE) today provided an update on its acquisition of land in Wuxi, Jiangsu Province of the PRC.

Nam Tai has recently entered into an agreement with the local governmental authorities in Wuxi to purchase a parcel of land of approximately 470,000 square feet for the expansion of its Wuxi manufacturing facility. On July 13, 2012, a stone-laying ceremony will be held for the construction of the facilities' new sections.

For the expansion project in its Shenzhen manufacturing facility that involves the purchase of land in Guangming Hi-Tech Industrial Park, Shenzhen, PRC, although the Company fully paid for the land use rights for this land six years ago and additionally compensated farmers occupying the land, as of the date of this press release, Nam Tai is still undergoing the approval process and awaiting the release of the land by the local governmental authorities.

SHENZHEN, China, June 5, 2012 /PRNewswire/ -- Nam Tai Electronics, Inc. ("Nam Tai" or the "Company") (NYSE Symbol: NTE) today announced the latest business development in two of its most significant new projects in the area of high-resolution LCD modules ("LCM") for tablets and smart-phones.

For the tablet high-resolution LCM project based in its Wuxi facility, after further improvement of key components' quality, the sample has been approved by the customer. Nam Tai is pleased to announce the order book from the customer has been confirmed and its Wuxi facility has commenced mass production.

For the smart-phone high-resolution LCM project based in its Shenzhen facility, Nam Tai's customer has continuously upgraded the product specifications, which has resulted in further delay on the approval of final specifications. As a result, Nam Tai continues to negotiate its quotation with the customer based on the upgraded specifications. The specifications for the current sample model is currently expected to be finalized before end of August 2012. If the result of the pilot-run meets the customer's requirements, mass production is expected to commence in November 2012. It is important to note that there remain uncertainties on the success of this project, which is subject to whether the parties may accept the corresponding quotation within a short period.

SHENZHEN, China, Oct. 31, 2011 /PRNewswire/ -- Nam Tai Electronics, Inc. ("Nam Tai" or the "Company") (NYSE Symbol: NTE) today announced its unaudited results for the third quarter ended September 30, 2011.

SHENZHEN, China, Aug. 1, 2011 /PRNewswire/ -- Nam Tai Electronics, Inc. ("Nam Tai" or the "Company") (NYSE Symbol: NTE) today announced its unaudited results for the second quarter ended June 30, 2011.

KEY HIGHLIGHTS

(In thousands of US Dollars, except per share data, percentages and as otherwise stated)

Outlook:

Continuing inflation in China and appreciation of the PRC renminbi is expected to further increase labor cost pressure on margins and necessitate ongoing cost control measures to sustain profitability. However, the Company anticipates business growth in the third and fourth quarter to accelerate the rate of improvement in the financial performance of the Wuxi manufacturing facility, enabling breakeven performance by the end of the fourth quarter.

For the fourth quarter of 2010, Nam Tai achieved

• Sales revenue of $166.5 million U.S. dollars, an increase of 78 percent compared to the sales revenue of $93.7 million dollars in the fourth quarter of 2009.
• Gross profit of $14.2 million dollars also grew by 40 percent from $10.2 million dollars in the same quarter last year.
• EPS (Basic and Diluted): $0.12 vs. $0.01 a year ago.

The demand for LCD modules and telecommunication subassemblies increased considerably during 2009 and 2010, and we expect that momentum to be strong into 2011. Accordingly, we believe that Nam Tai's overall business in the first quarter of 2011 will be stable, although the usual seasonal decline from the Chinese New Year period in February should be anticipated.

• Sales in the third quarter of 2010 were $174.7 million, an increase of 58.3% as compared to sales of $110.4 millionin the same quarter of 2009.  
• Net income in the third quarter of 2010 was $7.6 million, an increase of 68.9% as compared to net income attributable to Nam Tai shareholders of $4.5 million in the same quarter of 2009.
• Basic and diluted earnings per share in the third quarter of 2010 were $0.17, as compared to $0.10 in the third quarter of 2009.

COMPANY OUTLOOK

Following a marginal first half of 2010, the Company's business showed substantial improvement in the third quarter. Orders for optical and educational products in our CECP segment, although dropping considerably from previous years and expected to remain weak in 2010, increased in the third quarter and are expected to remain stable to levels in 2009 for the balance of 2010.  Demand for LCD modules and telecommunication subassemblies increased considerably during the third quarter and are expected to show similar momentum into the fourth quarter. Based on these developments, we believe that Nam Tai's overall business in the fourth quarter will be strong, although the usual seasonal decline at the end of 2010 should be anticipated.  We continue to forecast that business for 2010 as a whole will exceed 2009.  

So far in 2010, we have integrated management of our TCA and LCDP segment to reduce expenses. Sales of products manufactured at our newly operating FPC manufacturing plant in Wuxi have not materially contributed to the Company's total revenue and operations from that facility continue to consume more cash than it generates.  However, the Company's confidence in the potential for FPC business at this facility remains strong.  We have successfully recruited a new senior executive to manage and spearhead operations at our Wuxi facilities, who brings to Nam Tai expertise from over 20 years in technology manufacturing, management of factory operations and FPC product and business development, the most recent 10 years of which were in the PRC at manufacturing facilities relatively close in proximity to the Company's site in Wuxi. For further information on Nam Tai's new President of FPC manufacturing in Wuxi, please see the background summary of Mr. Tohru Odashima in the discussion of senior management changes below.

The Company plans to continue to focus its business on manufacturing high value and higher margin LCD modules geared toward applications in market segments which we perceive as strong such as telecommunications, medical and automotive. For the automotive market segment, we have recently established a strategic long term supply arrangement for liquid crystal display ("LCD") panels and LCD modules to a large US-listed first-tier automotive components OEM, which supplies to major automobile manufacturers globally.

We anticipate that the improvements in operations that we have achieved so far in 2010, and expect to continue to achieve, to be mitigated not only by global economic factors generally, but by factors specific to conducting business in the PRC, including:

• Appreciation of the exchange rate between Chinese renminbi against other world currencies, especially the U.S. dollar, which, since mid-June 2010 when China's central bank announced that it planned to introduce more flexibility in the management of the renminbi, has appreciated against the US dollar, increasing approximately 2.4% from, according to the historical currency converter available at http://forex-history.net, RMB6.8262 on June 18, 2010 to RMB6.6627 on October 26, 2010;
• Inflation in China, where, according to news reports, the consumer price index, the broadest measure of inflation, rose 3.6 percent in September 2010 from the level in September 2009; and
• Increasing employee salaries, which rose approximately 20% in the second quarter of 2010 from average salary levels in April 2010 and increased again by approximately 30% at the start of the fourth quarter of 2010 from average salary levels in October 2010.

EXPANSION PROJECTS

Currently, the Company has two separate projects under consideration for future expansion.

One is the development of the Company's raw land in Guangming Hi-Tech Industrial Park, Shenzhen, PRC, approximately 30 minutes driving distance from its existing facilities in Gushu, Shenzhen consisting of approximately 118,000 square meters. The Company is still awaiting the release of this land by the PRC government and, when released, plans to reserve future development for long-term expansion of business.

The other is expansion of the Company's Wuxi facilities regarding the acquisition of additional real estate just beside the Company's current Wuxi facility for necessary supporting facilities such as dormitories, canteen, labor activity center and research laboratory to back up and service the existing operations and for reserving for further expansion of the production.

Management currently expects to fund the above expansion internally with cash on hand and cash generated from operations.

The business environment in Nam Tai's product sectors remains difficult and extremely competitive.

As expected when we announced our results for the first quarter of 2009, the second quarter of 2009 was difficult for Nam Tai as the Company's operations continued to suffer from the effects of the global economic recession. Yet it was apparent from our second quarter results that our efforts to combat the continuing challenges of the current business environment and ever intensifying competition among electronics manufacturing service providers by reducing our headcount since the end of September 2008 and the salaries of our remaining employees since the beginning of April 2009 have had a positive effect on our operating results and bottom line.

Despite these highlights of our second quarter results, we continue to view our future performance conservatively as the bleak economic environment continues. Until the global business environment recovers, we could still suffer further declines in revenues that could result in losses from operations during periods in 2009 and beyond, like those we suffered in the first quarter of 2009. Unless economic conditions recover sooner than we currently anticipate, we continue to expect no significant improvement in demand, particularly for our products or components for the end-user consumer markets, until the summer of 2010 at the earliest.

Source: PR Newswire (August 3, 2009)

As expected when we announced our results for the first quarter of 2009, the second quarter of 2009 was difficult for Nam Tai as the Company's operations continued to suffer from the effects of the global economic recession. Yet it was apparent from our second quarter results that our efforts to combat the continuing challenges of the current business environment and ever intensifying competition among electronics manufacturing service providers by reducing our headcount since the end of September 2008 and the salaries of our remaining employees since the beginning of April 2009 have had a positive effect on our operating results and bottom line.

Despite these highlights of our second quarter results, we continue to view our future performance conservatively as the bleak economic environment continues. Until the global business environment recovers, we could still suffer further declines in revenues that could result in losses from operations during periods in 2009 and beyond, like those we suffered in the first quarter of 2009. Unless economic conditions recover sooner than we currently anticipate, we continue to expect no significant improvement in demand, particularly for our products or components for the end-user consumer markets, until the summer of 2010 at the earliest.

Source: PR Newswire (August 3, 2009)

The Company's outlook has not improved.

'Even assuming that the global economic crisis does not deteriorate further, we expect that it will be difficult for the Company to improve operating results significantly or at all in 2009.'

Source: PR Newswire, May 12, 2009

Guidance Report:

Under the current global economic downturn, we continue to experience weaker demand across all of our product segments. However, Nam Tai is financially sound with a strong cash position and adequate liquidity to weather these challenging market conditions. To offset the decline and potential further decline in our sales during 2009, management has remained focused on efforts to reduce cost, improve operating and manufacturing efficiencies and deliver advanced technologies and innovative manufacturing solutions that offer value to our customers. Recent actions taken to reduce costs and conserve cash include:

• Although we are taking a conservative position regarding expected demand during 2009 as the economic downturn continues or worsens, and expect further near-term declines in revenues that could even result in losses from operations during periods in 2009, we are nevertheless seeking to take advantage perceived opportunities to expand our market share in targeted areas. Accordingly, we plan to strengthen our sales force and customer and technical support by establishing local sales and support offices in Japan and Taiwan to increase our presence and better serve our customers in those markets. By seeking to capitalize on these opportunities, we hope to ensure a more robust future when end markets stabilize and the recovery cycle begins.

Source: SEC Form 6K (February 10, 2009)