FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
REPORT OF FOREIGN ISSUER
Pursuant to Rule 13a-16 or 15d-16 of the
Securities Exchange Act of 1934
For News Releases of:
July 29, 2002;
Additional items (not included in July 29, 2002
news release):
Consolidated Statement of Changes in
Shareholder Equity;
Management Discussion & Analysis
July 8, 2002;
June 20, 2002;
June 3, 2002
NAM TAI ELECTRONICS, INC.
(Registrant's name in English)
15th Floor, China Merchants Tower, Shun Tak Centre
168-200 Connaught Road Central, Hong Kong
NEWS RELEASE
NAM TAI ELECTRONICS, INC.
REPRESENTED BY: PAN PACIFIC I.R. LTD.
SUITE 1790 - 999 WEST HASTINGS STREET
VANCOUVER, B.C. CANADA V6C 2W2
TEL: (604) 669-7800 FAX: (604) 669-7816
TOLL FREE TEL & FAX: 1-800-661-8831
E-MAIL: investor@namtai.com
WEB SITE: www.namtai.com
CONTACT: LORNE WALDMAN
NAM TAI ELECTRONICS, INC.
Q2 Net Income $5.3 Million vs. $4.0 Million Loss, EBITDA per Share $0.79 vs.
Loss of $0.04
VANCOUVER, CANADA July 29, 2002 -- Nam Tai Electronics, Inc. ("Nam Tai" or the
"Company") (NASDAQ/NM Symbol: NTAI and NTAIW; CBOE Symbol: QNA) announced
unaudited results for the second quarter ended June 30, 2002. Net sales of $52.3
million for the second quarter of 2002 was down 6.4% compared to net sales of
$55.9 million for the second quarter of 2001. Gross profit for the second
quarter of 2002 was $11.9 million, an increase of 307.2% compared to gross
profit of $2.9 million for the second quarter of 2001. Operating income for the
second quarter of 2002 was $7.0 million ($0.65 per share) compared to operating
loss of $4.0 million ($0.39 per share) in the second quarter of 2001. Net income
for the second quarter of 2002 was $5.3 million, compared to a net loss of $4.0
million in the second quarter of 2001. Basic and diluted earnings per share for
the second quarter of 2002 were $0.51 and $0.50 compared to a loss per share of
$0.39 in the second quarter of 2001.
Net sales for the six months ended June 30, 2002 was down by 3.6% to $103.5
million from $107.4 million for the six months of 2001. Gross profit for the
first six months of 2002 was $19.7 million, an increase of 115.8% compared to
gross profit of $9.1 million for the first six months of 2001. Operating income
for the first six months of 2002 was $10.1 million ($0.96 per share) compared to
operating loss of $4.3 million ($0.42 per share) for the first six months of
2001. Net income for the first six months in 2002 was $9.5 million. This
compares to a net loss of $3.3 million for the first six months of 2001. Basic
and diluted earnings per share for the first six months of 2002 were $0.91 and
$0.90 compared to a loss per share of $0.33 and $0.32 respectively for the first
six months of 2001.
"Despite the economic downturn and the challenging market condition, and
continued price pressure from the competitors, the Company is able to remain
profitable. Besides stringent overhead control, material cost reduction achieved
by shifting of vendors and seasonal product mix, the disposal of lower margin
battery pack business also contributed to the favourable profit margin for this
quarter", commented Mr. Tadao Murakami, Nam Tai's Chairman. "The Company is
planning to further expand its business to China market, deploy more resources
in R&D for new product and technological development, and continue to pursue
merger and acquisition opportunities to help augment its internal growth. With
our solid foundation, our management believes that the economic downturn
provides the Company with many growth opportunities."
During the second quarter of 2002, the Company has successfully written back to
cost of sales $2.0 million balance in provision for slow moving raw material.
The write back was associated with the $4.7 million one-time inventory
write-offs and provision for slow moving raw material which the Company made in
the second quarter of 2001. The Company appreciated the strong support and
co-operation from the respective customers, and finally the Company was
successful to either utilize those items in production or obtain customers'
compensation. Included in the Other (Loss) Income, the Company incurred a $2.5
million listing necessary administration professional charges as a result of the
recent listing of its subsidiary, JIC, on the Hong Kong Stock Exchange. The
summarized pro-forma financial results excluding these two items is presented
below:
Summary of June 30, 2002 Financial Results
Excluding non-recurring items
(In Thousands of US Dollars)
--------------------------------------------------------------------------------
Three months ended Six months ended
June 30 June 30
2002 2001 2002 2001
--------------------------------------------------------------------------------
Net sales 52,311 55,882 103,528 107,369
Gross profit 9,936 7,909 17,687 14,905
Operating income 5,000 2,428 8,134 3,290
Net income 5,891 2,895 10,066 4,456
--------------------------------------------------------------------------------
Nam Tai's recent investment in the TCL Corporation (formerly known as TCL
Holding Corporation Limited") is already producing returns. TCL Corporation
announced their profit after tax and reserve for the first quarter of 2002 was
approximately $13.4 million, and declared a special dividend of $13.4 million.
With the Company's 6% shareholding in TCL Corporation, it received about $0.8
million dividend income during the second quarter of 2002. There is no assurance
that dividend of similar amount or at similar payout ratio will be made in the
future.
In May, 2002, Huizhou TCL Mobile Communication Co., Ltd. ("TCL Mobile")
(www.tclmobile.com) announced an increase in capital and the issuance of 10% of
the increased capital to the management of TCL Mobile. As a result, the
Company's 5% indirect shareholding in TCL Mobile (the Company holds 25% in Mate
Fair Group Ltd. and Mate Fair Group Ltd. holds 20% in TCL Mobile) was diluted to
4.5% (Mate Fair Group Limited's shareholding in TCL Mobile reduced to 18%).
Pursuant to the GAAP, with effect from June 2002, the Company ceased to adopt
the equity accounting method.
On April 22, 2002, the Company announced that it would transfer its interest in
BPC (Shenzhen) Co., Ltd. ("BPC") to Toshiba Corporation by April 30, 2002. As a
result, revenue from the battery pack business is not included in the net sales
from May, 2002 onward.
The Company continues to maintain a strong financial position with $14.4 million
positive operating cash flow during the second quarter of 2002, and $5.22 of
cash per share and $16.76 of net book value per share, based on 10,566,240
shares outstanding as of June 30, 2002. The Company as at June 30, 2002 had a
cash to current liabilities ratio of 1.28, a current ratio of 2.73, a total
assets to total liabilities ratio of 4.05, and approximately $55.2 million of
cash on hand.
Supplementary Information for the Second Quarter of 2002
1. Quarterly Sales Breakdown
(In Thousands of US Dollars)
------------------------------------------------------------------------
Quarter 2000 2001 2002 YoY (%) YoY (%) notes
------------------------------------------------------------------------
(Accumulated)
------------------------------------------------------------------------
1st Quarter 44,592 51,487 51,217 (0.5%) (0.5%)
------------------------------------------------------------------------
2nd Quarter 50,540 55,882 52,311 (6.4%) (3.6%) (a)
------------------------------------------------------------------------
3rd Quarter 57,249 59,551
------------------------------------------------------------------------
4th Quarter 61,307 67,086
------------------------------------------------------------------------
Total 213,688 234,006 103,528
------------------------------------------------------------------------
Note (a):
Sales of Battery Packs for May and June 2001 were US$1,181K & 1,648K
respectively. Upon disposal of BPC on April 30, 2002, revenue from Battery
Packs was no longer included in the total sales for the months of May and
June 2002.
2. Net Sales Breakdown by Product Segment
---------------------------------------------------------------------------
2002 2001
---------------------------------------------------------------------------
Segment 2nd Quarter YTD 2nd Quarter YTD
(%) (%) (%) (%)
---------------------------------------------------------------------------
Assembling:
- LCD Consumer Products 36% 36% 34% 35%
- Telecom. Components Assembly 46% 49% 49% 49%
---------------------------------------------------------------------------
Parts & Components :
- LCD Panels 12% 9% 11% 9%
- Transformers 5% 5% 5% 6%
---------------------------------------------------------------------------
Software Development Services 1% 1% 1% 1%
---------------------------------------------------------------------------
100% 100% 100% 100%
---------------------------------------------------------------------------
Assembling included finished goods and modules, together with Software
Development Services collectively termed as Consumer Electronic Products
("CEP"), while parts and components including LCD panels and transformer
termed ("LPT") for business segment classification.
3. Production Capacity Utilization Rate
The utilization rate for second quarter of 2002 was as follows:
Assembling 55%
Parts & Components 80%
Software development 100%
4. Average Selling Price (ASP)
ASP for second quarter of 2002 was 13% lower than first quarter of 2002 and
6.5% lower than second quarter of 2001.
5. Backlog
The Company's definition of backlog is on-hand firm orders from customer as
at the closing date of each quarter. The backlog for second quarter of 2002
was 16.6% higher than first quarter of 2002.
Second Quarter Results Analyst Conference Call
The Company will hold a conference call on Monday, July 29, 2002 at 10:00 a.m.
Eastern Time for analysts to discuss the second quarter results with management.
Shareholders, media, and interested investors are invited to listen to the live
conference over the internet by going to http://www.namtai.com/news/news.htm and
clicking on the conference call link or over the phone by dialing (612)-332-0923
just prior to its start time. Callers will be asked to register with the
conference call operator.
Warrant Expiry Date
In response to inquiries from shareholders, Nam Tai's management today confirmed
that the Company has no intention to extend the expiry date of its Warrants. The
Warrants are traded on the NASDAQ National Market under the ticker symbol NTAIW.
Each Warrant is exercisable to purchase one Common Share of Nam Tai at a price
of $20.40 per share at any time until November 24, 2002. The Warrants are
redeemable by the Company at any time at $0.05 per Warrant if the average
closing sale price of the Common Shares for 20 consecutive trading days within
the 30-day period preceding the date the notice is given equals or exceed $25.50
per share. As at June 30, 2002, there were 3,053,659 warrants outstanding.
Dividends
The record date for the third quarter dividend of $0.12 per share is September
30, 2002 and the payment date is October 21, 2002.
Nam Tai Electronics, Inc. is an electronics design and manufacturing service
provider to some of the world's leading original equipment manufacturers. Nam
Tai manufactures telecommunication products, palm-sized PCs, personal digital
assistants, linguistic products, calculators and various components including
LCD modules for cellular phones, transformers and LCD panels. The Company
utilises advanced production technologies such as chip on board (COB), chip on
glass (COG), chip on film (COF), surface mount technology (SMT), ball grid array
(BGA), tape automated bonding (TAB), and outer lead bonding (OLB) technologies.
Further information is available on Nam Tai's website at www.namtai.com.
Except for the historical information contained herein, matters discussed in
this press release are forward looking statements. For example, the statement
regarding plans to expand business to the China market is a forward looking
statement that is subject to political and economic conditions in China. Other
factors that might cause differences in this and other forward looking
statements, include those discussed in the Company's reports filed with the
Securities and Exchange Commission from time to time, such as the factors set
forth in Item 3 "Key Information - Risk Factors" in the Company's Annual Report
on Form 20-F for the year ended December 31, 2001.
NAM TAI ELECTRONICS, INC.
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
FOR THE PERIODS ENDED JUNE 30, 2002 AND 2001
(In Thousands of US Dollars except share data)
Unaudited Unaudited
Three months ended Six months ended
June 30 June 30
2002 2001 2002 2001
------------------------------------------------------- ---------- ---------- ---------- ----------
Net sales $ 52,311 $ 55,882 $103,528 $107,369
Cost of sales 40,375 52,951 83,841 98,247
---------- ---------- ---------- ----------
Gross profit 11,936 2,931 19,687 9,122
Costs and expenses
Selling, general and administrative expenses 4,273 6,169 8,225 11,867
Research and development expenses 663 811 1,328 1,572
---------- ---------- ---------- ----------
4,936 6,980 9,553 13,439
---------- ---------- ---------- ----------
Income (loss) from operations 7,000 (4,049) 10,134 (4,317)
Gain on disposal of land - - - 18
Interest income 189 221 336 723
Other (loss) income - net (2,341) (525) (2,316) 36
Equity in income of affiliated companies 969 321 2,104 304
---------- ---------- ---------- ----------
Income (loss) before income taxes and minority interest 5,817 (4,032) 10,258 (3,236)
Income taxes (expense) benefit (452) 17 (617) (115)
---------- ---------- ---------- ----------
Income (loss) before minority interest 5,365 (4,015) 9,641 (3,351)
Minority interest (57) 6 (158) 17
---------- ---------- ---------- ----------
Net income (loss) $ 5,308 $ (4,009) $ 9,483 $ (3,334)
========== ========== ========== ==========
Net income (loss) per share
Basic $ 0.51 $ (0.39) $ 0.91 $ (0.33)
========== ========== ========== ==========
Diluted $ 0.50 $ (0.39) $ 0.90 $ (0.32)
========== ========== ========== ==========
Weighted average number of shares (`000')
Basic 10,440 10,189 10,374 10,214
Diluted 10,704 10,270 10,590 10,343
NAM TAI ELECTRONICS, INC.
CONSOLIDATED BALANCE SHEETS
AS AT JUNE 30, 2002 AND DECEMBER 31, 2001
(In Thousands of US Dollars)
Unaudited Audited
June 30 December 31
2002 2001
--------------------------------------------------------------------------------
ASSETS
Current assets:
Cash and cash equivalents $ 55,154 $ 58,676
Marketable securities - 9,505
Accounts receivable, net 44,801 41,968
Inventories 13,734 11,892
Prepaid expenses and deposits 2,196 2,377
Income taxes recoverable 1,999 1,353
----------------------
Total current assets 117,884 125,771
Investments in affiliated companies 5,524 3,921
Long term investment 11,968 -
Property, plant and equipment, at cost 116,896 105,536
Less: accumulated depreciation and amortization (39,043) (35,122)
----------------------
77,853 70,414
Intangible assets - net 22,135 23,060
Other assets 1,407 1,407
----------------------
Total assets $ 236,771 $ 224,573
======================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable $ 284 $ 1,547
Long term bank loan - current portion 3,265 2,140
Accounts payable and accrued expenses 37,750 34,258
Amount due to a related party - 2,733
Dividend payable 1,247 1,023
Income taxes payable 582 88
----------------------
Total current liabilities 43,128 41,789
Long-term bank loan - non-current portion 15,165 12,860
Deferred income taxes 151 151
----------------------
Total liabilities 58,444 54,800
Minority interest 1,219 422
Shareholders' equity:
Common shares 106 104
Additional paid-in capital 115,685 111,368
Retained earnings 61,319 57,864
Accumulated other comprehensive (loss) income (Note 1) (2) 15
----------------------
Total shareholders' equity 177,108 169,351
Total liabilities and shareholders' equity $ 236,771 $ 224,573
======================
NAM TAI ELECTRONICS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE PERIODS ENDED JUNE 30, 2002 AND 2001
(In Thousands of US Dollars)
Unaudited Unaudited
Three months ended Six months ended
June 30 June 30
2002 2001 2002 2001
------------------------------------------------------ --------- --------- ---------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ 5,308 $ (4,009) $ 9,483 $ (3,334)
Adjustments to reconcile net income (loss) to
net cash provided by ( used in) operating activities:
Depreciation and amortization 2,517 3,573 5,064 6,356
Loss on disposal of property, plant and equipment 76 86 115 66
Gain on disposal of intangible assets (60) - (60) -
Unrealised (gain) loss on marketable securities - (375) - 437
Gain on disposal of a subsidiary (17) - (17) -
Loss on partial disposal of subsidiaries 1,172 - 1,172 -
Equity in income of affiliated companies (937) (321) (2,072) (304)
less dividend received and amortisation of goodwill
Loss on partial disposal of investment in affiliated 469 - 469 -
company
Minority interest 57 (6) 158 (17)
Changes in current assets and liabilities, net of
effects of acquisitions and disposals:
Decrease in marketable securities - - 9,505 -
Decrease (increase) in accounts receivable 84 (9,484) (257) (4,779)
(Increase) decrease in inventories (3,436) 8,167 (2,159) 9,911
Decrease (increase) in prepaid expenses and 207 494 167 (4,921)
deposits
Decrease (increase) in income taxes recoverable 80 (63) (646) 919
Decrease in notes payable (512) (208) (1,263) (1,494)
Increase (decrease) in accounts payable and 12,113 2,455 3,000 (3,913)
accrued expenses
Repayment of capital leases - - - (65)
(Decrease) increase in amount due to a related (2,975) 1,534 (2,766) (87)
party
Increase (decrease) in income taxes payable 237 (47) 494 (239)
--------- --------- --------- -----------
Total adjustments 9,075 5,805 10,904 1,870
--------- --------- --------- -----------
Net cash provided by (used in) operating activities $ 14,383 $ 1,796 $ 20,387 $ (1,464)
--------- --------- --------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of long term investment $ (11) $ - $(11,968) $ -
Purchase of property, plant and equipment (2,667) (18,626) (13,430) (23,601)
Increase in investment of subsidiaries - - - (85)
Cash outflow on disposal of a subsidiary (1,277) - (1,277) -
Proceeds from disposal of intangible assets 800 - 800 -
Proceeds from disposal of property, plant and 10 35 15 279
equipment
--------- --------- --------- -----------
Net cash used in investing activities $ (3,145) $(18,591) $(25,860) $ (23,407)
--------- --------- --------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Share buy-back program $ - $ (600) $ (3,528) $ (1,892)
Dividends paid (1,213) (1,009) (2,236) (1,913)
Repayment of bank loan (535) - (1,070) -
Repayment of short term debt - - - (24)
Proceeds from shares issued on exercise of 3,522 - 4,311 1,231
options and warrants
Proceeds from bank loan 4,500 - 4,500 -
--------- --------- --------- -----------
Net cash provided by (used in) financing activities $ 6,274 $ (1,609) $ 1,977 $ (2,598)
--------- --------- --------- -----------
Foreign currency translation adjustments 14 (1) (26) (1)
--------- --------- --------- -----------
Net increase (decrease) in cash and cash equivalents 17,526 (18,405) (3,522) (27,470)
--------- --------- --------- -----------
Cash and cash equivalents at beginning of period 37,628 49,831 58,676 58,896
--------- --------- --------- -----------
Cash and cash equivalents at end of period $ 55,154 $ 31,426 $ 55,154 $ 31,426
--------- --------- --------- -----------
NAM TAI ELECTRONICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
FOR THE PERIODS ENDED JUNE 30, 2002 AND 2001
(In Thousands of US Dollars)
1. Accumulated other comprehensive income represents foreign currency
translation adjustments. The comprehensive income (loss) of the Company was
$9,466 and ($3,117) for the six months ended June 30, 2002 and June 30, 2001,
respectively.
2. Business segment information - The Company operates primarily in two
segments, the consumer electronic product ("CEP") segment and the LCD panels and
transformers ("LPT") segment.
Unaudited Unaudited
Three months ended Six months ended
June 30 June 30
2002 2001 2002 2001
--------------------------------- ----------- --------- ---------- -----------
Net SALES:
- CEP $ 43,361 $ 46,902 $ 89,202 $ 90,006
- LPT 8,950 8,980 14,326 17,363
----------- --------- ---------- -----------
Total net sales $ 52,311 $ 55,882 $ 103,528 $ 107,369
=========== ========= ========== ===========
Income (loss) from OPERATIONS:
- CEP $ 4,137 $ (4,338) $ 8,206 $ (4,912)
- LPT 1,171 329 1,277 1,578
----------- --------- ---------- -----------
Total net income $ 5,308 $ (4,009) $ 9,483 $ (3,334)
=========== ========= ========== ===========
Unaudited Audited
June 30, Dec. 31,
2002 2001
------------------------------------------------------- ---------- ------------
Identifiable assets by SEGMENT:
- CEP $ 185,754 $ 188,262
- LPT 51,017 36,311
========== ===========
Total assets $ 236,771 $ 224,573
========== ===========
3. A summary of the net sales, income (loss) from operations and identifiable
assets by geographic areas is as follows:
Unaudited Unaudited
Three months ended Six months ended
June 30 June 30
2002 2001 2002 2001
-------------------------------------- --------- --------- --------- ----------
Net sales from operations within:
- Hong Kong:
Unaffiliated customers $ 48,482 $ 51,239 $ 93,416 $ 98,565
Intersegment sales 447 - 924 -
- PRC, excluding Hong Kong:
Affiliated customers 2,753 3,400 7,849 6,728
Unaffiliated customers 1,076 1,243 2,263 2,076
Intersegment sales 37,594 39,619 75,267 76,240
- Intersegment eliminations (38,041) (39,619) (76,191 (76,240)
-------- --------- --------- ----------
Total net sales $ 52,311 $ 55,882 $ 103,528 $ 107,369
======== ========= ========= ==========
Income (loss) from operations within:
- PRC, excluding Hong Kong $ 7,186 $ (2,644) $ 9,421 $ (2,909)
- Hong Kong (1,878) (1,365) 62 (425)
-------- --------- --------- ----------
Total net income $ 5,308 $ (4,009) $ 9,483 $ (3,334)
======== ========= ========= ==========
Unaudited Audited
June 30, Dec. 31,
2002 2001
---------------------------------------------------------- --------- -----------
Identifiable assets by geographic area:
- PRC, excluding Hong Kong $ 104,649 $ 60,866
- Hong Kong 132,122 163,707
========= ===========
Total assets $ 236,771 $ 224,573
========= ===========
NAM TAI ELECTRONICS, INC.
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE PERIOD ENDED JUNE 30, 2002
(In Thousands of US Dollars except share data)
Accumulated
Other
Common Common Additional Comprehensive Total
Shares Shares Paid-in Retained Income Shareholders'
Outstanding Amount Capital Earnings (Loss) Equity
---------- ------- ---------- ---------- ------------- -------------
Balance at December 31, 2001 10,401,940 $ 104 $ 111,368 $ 57,864 $ 15 $ 169,351
Share buy-back program (197,600) (2) (3,526) (3,528)
Share issued on exercise of options 360,400 4 4,277 4,281
Share issued on exercise of warrants 1,500 30 30
Issue of advisors' options 10 10
Comprehensive income:
Net income 9,483 9,483
Foreign currency translation (17) (17)
Dividends (2,502) (2,502)
---------- ------- ---------- ---------- ------------- -------------
Balance at June 30, 2002 10,566,240 $ 106 $ 115,685 $ 61,319 $ (2) $ 177,108
========== ======= ========== ========== ============= ============
Management Discussion and Analysis of Financial Condition and Results of
Operations
Results of Operations
General
The Company derives its revenues principally from the design and manufacturing
services to original equipment manufacturers (OEMs) of consumer electronic
products ("CEP segment") and LCD panels and transformers ("LPT segment").
Products manufactured in the CEP segment by Nam Tai include finished consumer
electronic products such a telecommunication products, palm-sized PC's, personal
digital assistants, electronic dictionaries, and calculators as well as
telecommunication components assembly. Products manufactured in the LPT segment
including transformers and LCD panels used in the manufacture of cellular
phones, personal digital assistants, watches, and various electronic home
appliances. The Company carries out all of its manufacturing operations in
southern China.
Six Months Ended June 30, 2002 Compared to the Six Months Ended June 30, 2001
The Company's net sales for the six months ended June 30, 2002 were $103,528,000
a decrease of 4% compared to $107,369,000 in the corresponding period in 2001.
On April 22, 2002, the Company announced that it would transfer its 86.7%
interest in BPC (Shenzhen) Co., Ltd. ("BPC") to Toshiba Corporation by April 30,
2002. As a result, revenue from the battery pack business is not included in the
net sales from May 2002 onward and this is the primary reason for the decrease
in the Company's sales during the six months ended June 30, 2002 as compared
with the same period in 2001.
Management believes sales in the CEP segment, including calculators, personal
organizers, and electronic dictionaries, to its OEM customers will continue to
be an important line of business; however, telecommunication products and
component assembly, particularly LCD modules and display panels, along with new
products such as digital camera will continue to be an increasing proportion of
total revenue in the future. Sales of products in each of Nam Tai's product
segments as a percentage of total sales were essentially the same in 2002 as
compared to 2001. Such sales were as follows:
------------------------------------------------------------------
Six months ended June 30,
------------------------------------------------- --------------
Segment 2002 2001
------------------------------------------------- --------------
Assembling:
LCD consumer products 36% 35%
Telecom components assembly 49% 49%
------------------------------------------------- --------------
Parts and components:
LCD panels 9% 9%
Transformers 5% 6%
------------------------------------------------- --------------
Software development services 1% 1%
------------------------------------------------- --------------
100% 100%
------------------------------------------------- --------------
Assembling included finished goods and modules, together with software
development services collectively termed as Consumer Electronic Products
("CEP"), while parts and components including LCD panels and transformer are
termed ("LPT") for product segment classifications.
The gross profit for the six months ended June 30, 2002 was $19,687,000 (19%
gross margin), compared with $9,122,000 (8.5% gross margin) in the same period
in 2001. The increase in the gross margin is primarily the result of the write
back of $2.0 million in provisions for slow moving raw materials in the first
six months of 2002 compared to $5.5 million in inventory write-offs and
provisions for slow moving raw materials and $0.3 million for severance payment
in the first six months of 2001. Adjusted for these items gross profit for the
six months ended June 30, 2002 was $17,687,000 (17.1% gross margin) compared
with $14,905,000 (13.9% gross margin) in the prior year period. Improvements in
gross margin have also been achieved by applying tighter controls over overhead
costs, seeking and obtaining lower material costs through new suppliers and
vendors, and a shift in the product mix, including the elimination of the lower
margin battery pack business beginning on May 1, 2002.
Selling, general and administrative expenses for the six months ended June 30,
2002 were $8,225,000, or 8% of sales, compared to $11,867,000, or 11% of sales,
in the same period of 2001, which included stock option compensation expense of
$0.8 million and realignment charges of $0.7 million. Reductions in selling,
general and administrative expenses were achieved though salary reductions and
tighter controls of overhead cost. Research and development expenses for the six
months ended June 30, 2002 were $1,328,000, or 1.3% of sales, compared to
$1,572,000, or 1.5% of sales, in the same period of 2001.
Operating income for the six months ended June 30, 2002 was a positive
$10,134,000 compared to a loss of $4,317,000 for the six months ended June 30,
2001. Net income for the six months ended June 30, 2002 was $9,483,000. This
compares to a loss of $3,334,000 in the prior year period. Basic and diluted
earnings per share for the first six months of 2002 were $0.91 and $0.90,
respectively, compared to losses per share of $0.33 and $0.32, respectively, for
the first six months of 2001.
Liquidity and Capital Resources
Traditionally, the Company has relied primarily upon internally generated funds
and trade finance facilities to finance its operations and expansion.
As of June 30, 2002 the Company had $55,154,000 in cash and cash equivalents,
consisting of cash and short-term deposits, compared to $31,426,000 at June 30,
2001. As of June 30, 2002 the Company had a working capital of $74,756,000
compared to $66,417,000 at June 30, 2001.
At June 30, 2002, the Company had in place general banking facilities with four
financial institutions aggregating $92.1 million. Such facilities, which are
subject to annual review, permit the Company to obtain overdrafts, lines of
credit for forward exchange contracts, letters of credit, import facilities,
trust receipt financing, shipping guarantees and working capital, as well as
fixed loans. As at June 30, 2002 the Company had utilized approximately $19.5
million under such general credit facilities and had available unused credit
facilities of $72.6 million.
As at June 30, 2002 there was $18.4 million in long-term debt, including a
current portion of $3.3 million, compared to long-term debt of $15.0 million,
including a current portion of $2.1 million, at December 31, 2001. The Company
had no off balance sheet financing arrangements at either June 30, 2002 or
December 31, 2001.
Cash provided by operating activities was $20.4 million for the first six months
of 2002 compared to cash used of $1.9 million during the same period in 2001.
Cash provided by operating activities in the first six months of 2002 was
primarily due to positive operating income and the sale of marketable
securities. Cash used in operating activities for the first six months of 2001
was primarily the result of an operating loss being offset by a decrease in
inventory.
Accounts receivable, net of allowance for doubtful accounts was $44.8 million
and $42.0 million at June 30, 2002 and December 31, 2001, respectively. The
increase in accounts receivable was attributable to changes in product mix and
timing of customer payments.
Inventories increased 15.5% to $13.7 million at June 30, 2002 from $11.9 million
at December 31, 2001. The increase in inventories was primarily the result of
seasonality within the Company's business. Inventory at year end is reduced in
anticipation of the closing of the Company's factories in China for two weeks
for the Chinese New Year holidays and the general reduction in sales following
the holiday season.
Cash used in investing activities was $25.9 million and $23.4 million for the
first six months of 2002 and fiscal 2001, respectively. Cash used in investing
activities for the first six months of 2002 was primarily related to net capital
expenditures of $13.4 million to purchase equipment and for continued expansion
of manufacturing facilities and payment of $12 million for its 6% equity
investment in TCL Holdings Corporation Ltd. Cash used in investing activities
for the first six months of 2001 consisted primarily of net capital expenditures
of $23.3 million to purchase equipment and for continued expansion of
manufacturing facilities.
Cash used in financing activities was $8.8 million and $1.2 million for the
first six months of 2002 and 2001, respectively. Cash provided by financing
activities was $6.8 million and $3.8 million for the first six months of 2002
and 2001, respectively. Cash provided by financing activities for the first six
months of 2002 primarily resulted from net proceeds of $4.3 million received
from the exercise of options and warrants and $4.5 million received from a 4
year variable rate term loan offset by the payment of $3.5 million for the
repurchase of the Company's shares pursuant to its share repurchase program and
$2.2 million paid to shareholders as dividends. Cash used in financing
activities for the first six months of 2001 primarily resulted from by the
payment of $1.9 million for the repurchase of the Company's shares pursuant to
its share repurchase program and another $1.9 million paid to shareholders as
dividends offset by net proceeds of $1.2 million received from the exercise of
options and warrants.
There were no material changes during the six months ended June 30, 2002 to the
Company's exposure to market risk for changes in interest rates and foreign
currency exchange rates.
The Company's working capital requirements and capital expenditures could
increase in order to support future expansions of its operations. It is possible
that future acquisitions or investments may be significant and may require the
payment of cash. Future liquidity needs will also depend on fluctuations in
levels of inventory, the timing of expenditures by the Company on new equipment
and for factory expansion and levels of shipments and changes in volumes of
customer orders. The Company believes that cash on hand and internally generated
funds, in addition to banking facilities, are sufficient to fund working capital
requirements for at least the next 12 months. However, the Company may choose to
obtain additional debt or equity financing if it believes it appropriate.
NEWS RELEASE
NAM TAI ELECTRONICS, INC.
REPRESENTED BY: PAN PACIFIC I.R. LTD.
SUITE 1790 - 999 WEST HASTINGS STREET
VANCOUVER, B.C. CANADA V6C 2W2
TEL: (604) 669-7800 FAX: (604) 669-7816
TOLL FREE TEL & FAX: 1-800-661-8831
E-MAIL: investor@namtai.com
WEB SITE: www.namtai.com
CONTACT: LORNE WALDMAN
NAM TAI ELECTRONICS, INC.
To Release Q2/02 Results on July 29, 2002
VANCOUVER, CANADA, July 8, 2002 -- Nam Tai Electronics, Inc. ("Nam Tai" or the
"Company") (NASDAQ/NM Symbol: NTAI and NTAIW; CBOE Symbol: QNA) today announced
it will release its unaudited second quarter results for the period ended June
30, 2002 before the market opens on Monday, July 29, 2002.
The Company will hold a conference call on Monday, July 29, 2002 @ 10:00
a.m. Eastern Time for analysts to discuss the second quarter results with
management. Analysts who wish to receive the toll free dial-in number for this
conference call are invited to contact the Investor Relations Office at
1-800-661-8831 no later than 6:00 p.m. Eastern Time on Friday, July 26, 2002.
Shareholders, media, and interested investors are invited to listen to the live
conference call by dialing (612) 332-0923 or on the internet at
http://www.namtai.com/news/news.htm.
Dividends
On July 21, 2002 the Company will pay its second quarter dividend of $0.12 per
share to shareholders of record at the close of business on June 30, 2002. The
record date for the third quarter dividend of $0.12 per share is September 30,
2002 and the payment date is October 21, 2002.
Nam Tai Electronics, Inc. is an electronics design and
manufacturing service provider to some of the world's leading original equipment
manufacturers. Nam Tai manufactures telecommunication products, palm-sized PCs,
personal digital assistants, linguistic products, calculators and various
components including LCD modules for cellular phones, transformers and LCD
panels. The Company utilises advanced production technologies such as chip on
board (COB), chip on glass (COG), chip on film (COF), surface mount technology
(SMT), ball grid array (BGA), tape automated bonding (TAB), and outer lead
bonding (OLB) technologies. Further information is available on Nam Tai's web
site at www.namtai.com.
NEWS RELEASE
NAM TAI ELECTRONICS, INC.
REPRESENTED BY: PAN PACIFIC I.R. LTD.
SUITE 1790 - 999 WEST HASTINGS STREET
VANCOUVER, B.C. CANADA V6C 2W2
TEL: (604) 669-7800 FAX: (604) 669-7816
TOLL FREE TEL & FAX: 1-800-661-8831
E-MAIL: investor@namtai.com
WEB SITE: www.namtai.com
CONTACT: LORNE WALDMAN
NAM TAI ELECTRONICS, INC.
Annual Shareholders' Meeting Results
VANCOUVER, CANADA June 20, 2002 -- Nam Tai Electronics, Inc. ("Nam Tai" or
the"Company") (NASDAQ/NM Symbol: NTAI and NTAIW; CBOE Symbol: QNA) held its
annual meeting of shareholders in Los Angeles on June 14 where shareholders
approved the election of the nominated slate of directors. In addition,
shareholders approved the appointments of Joseph Li as Chief Executive Officer
and President and Ming Kown Koo as Chief Financial Officer.
The firm of HLB Hodgson Impey Cheng received almost unanimous (99.8%)
shareholder support for their appointment as independent accountants of the
Company for the year ending December 31, 2002. Ranked as the 13th largest
international accounting firm, HLB Hodgson Impey Cheng was formed in 1983 but
can trace its origins back 50 years in Hong Kong and 200 years in the United
Kingdom. They have a client base drawn from across all sectors of the business
community. Global and regional resources are available through the firm's
membership in HLB International whose client base includes publicly listed
companies on the world's leading stock exchanges including the New York Stock
Exchange and the NASDAQ. For more information see their web site www.hlbi.com.
"I am encouraged by the success of the annual shareholders' meeting and the
strong shareholder support received on each proposal voted at the meeting",
commented Mr. Murakami, Nam Tai's Chairman. "The overwhelming 99.8% shareholder
support for HLB Hodgson Impey Cheng to be appointed as independent accountants
for year 2002 is particularly encouraging. We are looking forward to HLB Hodgson
Impey Cheng providing excellent service for Nam Tai and its shareholders."
Second Quarter Dividend
Nam Tai will pay its second quarter dividend of $0.12 per share on or before
July 21, 2002 to shareholders of record at the close of business on June 30,
2002.
Nam Tai Electronics, Inc. is an electronics design and manufacturing
service provider to some of the world's leading original equipment
manufacturers. Nam Tai manufactures telecommunication products, palm-sized PCs,
personal digital assistants, linguistic products, calculators and various
components including LCD modules for cellular phones, transformers and LCD
panels. The Company utilises advanced production technologies such as chip on
board (COB), chip on glass (COG), chip on film (COF), surface mount technology
(SMT), ball grid array (BGA), tape automated bonding (TAB), and outer lead
bonding (OLB) technologies. Further information is available on Nam Tai's web
site at www.namtai.com.
NEWS RELEASE
NAM TAI ELECTRONICS, INC.
REPRESENTED BY: PAN PACIFIC I.R. LTD.
SUITE 1790 - 999 WEST HASTINGS STREET
VANCOUVER, B.C. CANADA V6C 2W2
TEL: (604) 669-7800 FAX: (604) 669-7816
TOLL FREE TEL & FAX: 1-800-661-8831
E-MAIL: investor@namtai.com
WEB SITE: www.namtai.com
CONTACT: LORNE WALDMAN
NAM TAI ELECTRONICS, INC.
JIC Tech Listing on Hong Kong Stock Exchange
VANCOUVER, CANADA June 3, 2002 -- Nam Tai Electronics, Inc. ("Nam Tai" or the
"Company") (NASDAQ/NM Symbol: NTAI and NTAIW; CBOE Symbol: QNA) today announced
that the listing of its subsidiary JIC on the Hong Kong Stock Exchange ("HKSE")
and trading of shares will commence on June 4, 2002, subject to final approval
by the HKSE.
On January 14, 2002 Nam Tai entered into a restructuring agreement with the
joint liquidators of Albatronics (Far East) Company Limited (in liquidation)
("Albatronics"). Albatronics, a 50% owned subsidiary of Nam Tai, was placed into
voluntary liquidation in August 1999. Under the restructuring agreement Nam Tai
will inject its wholly-owned subsidiary JIC into J.I.C. Technology Company
Limited ("JIC Tech") for 92.9% ownership in JIC Tech on a fully diluted basis
after conversion of preference shares. Albatronics' listing status on the Hong
Kong Stock Exchange will be withdrawn and JIC Tech will be listed on the Hong
Kong Stock Exchange by way of introduction and free from the liabilities of
Albatronics.
Except for the historical information contained herein, matters discussed in
this press release are forward-looking statements. For example, the statement
regarding the listing of its subsidiary JIC on the Hong Kong Stock Exchange is a
forward looking statement that is subject to the Hong Kong Stock Exchange
granting the listing of and permission to deal in the shares of JIC Tech. Other
factors that might cause differences in this and the other forward looking
statements, include those discussed in the Company's reports filed with the
Securities and Exchange Commission from time to time, such as the factors set
forth in Item 3 "Key Information - Risk Factors" in the Company's Annual Report
on Form 20-F for the year ended December 31, 2001.
Nam Tai Electronics, Inc. is an electronics design and manufacturing service
provider to some of the world's leading original equipment manufacturers. Nam
Tai manufactures telecommunication products, palm-sized PCs, personal digital
assistants, linguistic products, calculators and various components including
LCD modules for cellular phones, transformers and LCD panels. The Company
utilises advanced production technologies such as chip on board (COB), chip on
film (COF), chip on glass (COG), surface mount technology (SMT), ball grid array
(BGA), tape automated bonding (TAB), and outer lead bonding (OLB) technologies.
Further information is available on Nam Tai's web site at www.namtai.com.
The Registrant hereby incorporates this Report on Form 6-K into its Registration
Statements on Form F-3 (Registration Nos. 333-36135 and 333-58468).
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.
For and on behalf of
Nam Tai Electronics, Inc.
/s/ MING KOWN KOO
-----------------------
MING KOWN KOO
CHIEF FINANCIAL OFFICER
Date: August 7, 2002