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 Release of:
July 30, 2001;
July 18, 2001
NAM TAI ELECTRONICS, INC.
(Registrant's name in English)
Suite 4, 9/F, Tower 1
China Hong Kong City, 33 Canton Road
TST, Kowloon, 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 Sales Up 11%, Adjusted Cash EPS $0.33 vs. $0.43
VANCOUVER, CANADA July 30, 2001 -- 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, 2001.
Summary of June 30, 2001 Financial Results
Excluding one-time charges and amortisation of goodwill
(In Thousands of US Dollars except share data
- --------------------------------------------------------------------------------
Three months ended Six months ended
June 30 June 30
2001 2000 2001 2000
- -------------------------- -------------- -------------- -------------- --------------
Net sales $ 55,882 $ 50,540 $ 107,369 $ 95,132
Gross profit (1)(2) 7,909 7,541 14,905 14,450
Operating income (1,2,3) 2,428 2,871 3,290 5,482
Net income (1-4) 2,895 3,846 4,456 6,462
EPS diluted $ 0.28 $ 0.42 $ 0.43 $ 0.71
Cash net income (1-5) 3,352 3,894 5,370 6,559
Cash EPS diluted $ 0.33 $ 0.43 $ 0.52 $ 0.72
EBITDA (1-4) 6,452 5,881 10,935 10,547
EBITDA per share diluted $ 0.63 $ 0.65 $ 1.06 $ 1.16
- -------------------------- -------------- -------------- -------------- --------------
(1) Excludes $4.7 million in inventory write-offs and provisions for slow moving
raw materials in the second quarter of 2001 and $5.5 million for the six months
ended June 30, 2001. The inventory provisions are made under the conservative
assumption that the Company is unable to resolve inventory issues with its
customers. To the extent that inventory issues are resolved such provisions
would be written back. (2) Excludes severance provision of $0.3 million. (3)
Excludes stock option compensation expense of $0.8 million and realignment
charges (including additional provisions for severance payments) of $0.6 million
for the second quarter of 2001 and $0.7 million for the six months ended June
30, 2001. (4) Excludes provision for impairment in value of non-core assets of
$0.5 million for the three months and six months ended June 30, 2001, and a
$12.1 million gain on the sale of non-core assets in the first quarter of 2000.
(5) Excludes amortisation of goodwill of $0.4 million and $0.9 million for the
three months and six months ended June 30, 2001.
As a result of the economic slowdown in the electronics industry the Company has
continued to experience delays, postponements, and cancellation of some customer
orders, and lack of customer order visibility. As a result, in the second
quarter the company recorded $6.9 million in one-time charges. The above
one-time charges fully resolves all outstanding inventory uncertainties and
provides necessary provisions for the Company's realignment plans which aims to
reduce expenses and position the Company to achieve its 13th consecutive year of
profitability in 2001.
The Company continues to maintain a strong financial position, ending the second
quarter of 2001 with $3.08 of cash per share and approximately $15.46 of net
book value per share, based on 10,186,940 shares outstanding as at June 30,
2001. The Company, as at June 30, 2001, had a cash to current liabilities ratio
of 0.78, a current ratio of 2.65, a total assets to total liabilities ratio of
4.92 and approximately $31.4 million of cash.
With the Company's strong financial position, and positive operating cash flow,
it will continue with internal expansion plans in anticipation of an economic
recovery that it expects by the second quarter of 2002. Internal expansion plans
include the construction of a new 138,000 square foot factory in expectation of
increased orders for both new and existing products from new and existing
customers. The Company is also pursuing merger and acquisition opportunities to
help augment its internal growth.
Summary of June 30, 2001 Financial Results
Including one-time charges and amortisation of goodwill
(In Thousands of US Dollars except share data)
- --------------------------------------------------------------------------------
Net sales for the second quarter of 2001 was $55.9 million, an increase of 11%
compared to net sales of $50.5 million for the second quarter of 2000. Operating
loss for the second quarter of 2001 was $4.0 million (loss of $0.39 per share)
compared to operating income of $2.6 million ($0.29 per share) for the second
quarter of 2000. Net loss for the second quarter of 2001 was $4.0 million
compared to net income of $3.6 million in the second quarter of 2000. Basic and
diluted loss per share for the second quarter of 2001 were $0.39 compared to
earnings per share of $0.41 and $0.40 in the second quarter of 2000.
Net sales for the six months ended June 30, 2001 increased by 13% to $107.4
million from $95.1 million for the six months of 2000. Operating loss for the
first six months of 2001 was $4.0 million (loss of $0.39 per share) compared to
operating income of $5.1 million ($0.56 per share) for the first six months of
2000. Net loss for the first six months in 2001 was $3.3 million. This compares
to net income of $18.2 million for the first six months of 2000, including a
$12.1 million gain of the sale of a non-core asset. Basic and diluted loss per
share for the first six months of 2001 were $0.33 and $0.32 compared to earnings
per share of $2.05 and $2.00 for the first six months.
Second Quarter Results Analyst Conference Call
The Company will hold a conference call on Monday, July 30, 2001 at 10:00 a.m.
Eastern Time for analysts to discuss the second quarter results with management.
Shareholders, investors and other interested individuals are invited to listen
to the live conference call over the internet by clicking
http://www.videonewswire.com/event.asp?id=274 or over the phone by dialing (612)
332-0932 just prior to its start time. Callers will be asked to register with
the conference call operator.
Dividends
On July 21, 2001 the Company paid a quarterly dividend of $0.10 per share to
shareholders of record at the close of business on July 1, 2001. The record date
for the third quarter dividend of $0.10 per share is September 30, 2001 and the
payment date is October 21, 2001.
It is the general policy of Nam Tai to determine the actual annual amount of
future dividends based upon the Company's profitability during the preceding
year. There can be no assurance that any dividend will be declared in 2002 or if
declared the amount of such dividend.
Telecom Strength Propels Economic Growth in China
Despite the worldwide economic slowdown, China's domestic economy continues to
experience among the world's fastest economic growth rates. China's GDP grew by
7.8% in the first six months of 2001 and industrial production was up by 10.1%
in June from a year ago. Real GDP for 2002 is expected to be up 7.7%. The
telecommunication sector in China is also expected to see healthy growth with
marketing reports estimating demand for cellular phone handsets in China growing
from 37 million pieces in 2000 to over 100 million pieces by 2003.
To manufacture cellular phones in China requires licensing that is strictly
controlled by Chinese regulatory authorities. One of the most aggressive Chinese
companies to obtain this licensing is TCL Mobile Communication (HK) Co., Ltd.
and Huizhou TCL Mobile Communication Co., Ltd. (collectively "TCL Mobile"). TCL
Mobile, a private company controlled by a People's Republic of China state-owned
enterprise, has operation facilities in Hong Kong and Huizhou, China, and is one
of only 10 PRC companies licensed to manufacture, distribute and sell GSM
cellular phones, and recently CDMA cellular phones in China. It also distributes
and trades digital mobile telephones and accessories in China and overseas.
In order to enhance its position in the growing domestic China
telecommunications market, and strengthen its relationship with state-owned TCL
Holdings, Nam Tai made a strategic investment, acquiring a 5% indirect
shareholding in TCL Mobile in September 2000. TCL Mobile is also a customer of
Nam Tai, as it currently purchases rechargeable battery packs from BPC
(Shenzhen) Co., Ltd - a joint venture company owned by Nam Tai and Toshiba
Battery Co., Ltd.
Nam Tai is pleased that TCL Mobile's significant growth and profitability have
positively impacted Nam Tai's results. Nam Tai's share of TCL Mobile's income,
accounted for under the equity method, is $321,000 for the second quarter of
2001 and $304,000 for the six month period ended June 30, 2001. In addition, Nam
Tai anticipates that its investment in TCL mobile as a business partner will
open up new opportunities in China's rapidly growing domestic telecommunications
market.
Consolidation of Administration and Marketing Offices
On August 18, 2001 Nam Tai will consolidate three of its administrative and
marketing offices, now at different locations, when it moves onto a single floor
of prime office space at the Shun Tak Centre in the Central district of Hong
Kong. The new centralised 23,000 square feet office location will help
strengthen management communication and control, reduce rental charges, and
provide room for future expansion as Nam Tai's Far-East headquarters. The office
is conveniently located above the ferry terminal and beside the highway,
permitting easy transportation, by sea or by land, between the manufacturing
facilities in Shenzhen.
The new office address is:
15th Floor, China Merchants Tower, Shun Tak Centre
Nos. 168-200 Connaught Road
Central, Hong Kong
Tel: 011-852-2341-0273
Fax: 011-852-2341-4164
e-mail: investor@namtai.com
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, lithium ion rechargeable battery packs,
transformers and LCD panels. The Company utilises advanced production
technologies such as chip on board (COB), 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
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 Company's
forward guidance for 2001 profitability and new customer and product orders are
forward-looking statements the results of which are uncertain and dependant upon
many factors including the level of overall growth in the electronics
manufacturing services (EMS) industry, end-user demand, competitive pressures,
changes in general economic conditions, and currency fluctuations. Other factors
that might cause differences in these and the other forward looking statements,
include, but are not limited to, 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, 2000.
NAM TAI ELECTRONICS, INC.
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
FOR THE PERIODS ENDED JUNE 30, 2001 AND 2000
(In Thousands of US Dollars except share data)
Unaudited Unaudited
Three months ended Six months ended
June 30 June 30
2001 2000 2001 2000
- ------------------------------------------------------------ -------------- -------------- -------------- --------------
Net sales $ 55,882 $ 50,540 $ 107,369 $ 95,132
Cost of sales 52,951 43,024 98,247 80,743
-------------- -------------- -------------- --------------
Gross profit 2,931 7,516 9,122 14,389
Costs and expenses
Selling, general and administrative expenses 6,096 3,928 11,550 7,587
Research and development expenses 811 949 1,572 1,723
-------------- -------------- -------------- --------------
6,907 4,877 13,122 9,310
-------------- -------------- -------------- --------------
(Loss) Income from operations (3,976) 2,639 (4,000) 5,079
(Loss) gain on disposal of land - (27) 18 313
Interest income 221 1,082 723 1,702
Other (loss) income - net (598) 165 (281) 11,436
Equity in income (loss) of affiliated companies 321 (31) 304 (31)
-------------- -------------- -------------- --------------
(Loss) income before income taxes and minority interest (4,032) 3,828 (3,236) 18,499
Income taxes benefit (expense) 17 (227) (115) (324)
-------------- -------------- -------------- --------------
(Loss) income before minority interest (4,015) 3,601 (3,351) 18,175
Minority interest 6 13 17 13
-------------- -------------- -------------- --------------
Net (loss) income $ (4,009) $ 3,614 $ (3,334) $ 18,188
============== ============== ============== ==============
Net (loss) income per share
Basic $ (0.39) $ 0.41 $ (0.33) $ 2.05
============== ============== ============== ==============
Diluted $ (0.39) $ 0.40 $ (0.32) $ 2.00
============== ============== ============== ==============
Weighted average number of shares (`000')
Basic 10,189 8,848 10,214 8,854
Diluted 10,270 9,108 10,343 9,106
NAM TAI ELECTRONICS, INC.
CONSOLIDATED BALANCE SHEETS
AS AT JUNE 30, 2001 AND DECEMBER 31, 2000 (In Thousands of US Dollars)
Unaudited Audited
June 30 December 31
2001 2000
- ----------------------------------------------------------------------------------------------------
ASSETS
Current assets:
Cash and cash equivalents $ 31,426 $ 58,896
Marketable securities 7,700 7,937
Accounts receivable, net 42,369 37,550
Inventories 17,283 27,172
Prepaid expenses and deposits 6,678 1,755
Income taxes recoverable 1,123 2,042
-----------------------------------
Total current assets 106,579 135,352
Investments in affiliated companies 2,358 2,054
Property, plant and equipment, at cost 94,493 71,624
Less: accumulated depreciation and amortization (30,994) (27,025)
-----------------------------------
63,499 44,599
Intangible assets - net 24,076 24,996
Other assets 1,369 1,369
-----------------------------------
Total assets $ 197,881 $ 208,370
===================================
LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities:
Notes payable $ 5 $ 1,499
Short term debt - 24
Accounts payable and accrued expenses 36,308 40,224
Amount due to a related party 2,644 2,691
Dividend payable 1,002 904
Income taxes payable 203 442
-----------------------------------
Total current liabilities 40,162 45,784
Deferred income taxes 34 34
-----------------------------------
Total liabilities 40,196 45,818
Minority interest 174 188
Shareholders' equity:
Common shares 102 102
Additional paid-in capital 108,164 105,963
Retained earnings 49,033 56,304
Accumulated other comprehensive income (Note 1) 212 (5)
-----------------------------------
Total shareholders' equity 157,511 162,364
Total liabilities and shareholders' equity $ 197,881 $ 208,370
===================================
NAM TAI ELECTRONICS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE PERIODS ENDED JUNE 30, 2001 AND 2000
(In Thousands of US Dollars)
Unaudited Unaudited
Three months ended Six months ended
June 30 June 30
2001 2000 2001 2000
- ------------------------------------------------------------ --------------- -------------- --------------- --------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) income $ (4,009) $ 3,614 $ (3,334) $ 18,188
Adjustments to reconcile net income to net cash provided by ( used in) operating
activities:
Depreciation and amortization 3,573 1,808 6,356 3,615
Loss (gain) on disposal of property, plant and equipment 86 28 66 (312)
Unrealised (gain) loss on marketable securities (375) - 437 -
Gain on disposal of marketable securities - - - (10,783)
Gain on disposal of investment in an affiliated company - - - (1,346)
Equity in (income) loss of affiliated companies less (321) 31 (304) 31
dividend received and amortisation of goodwill
Fair value of shares issued as compensation - - - 135
Minority interest (6) (13) (17) (13)
Changes in current assets and liabilities, net of effects of acquisitions and
disposals:
Increase in accounts receivable (9,484) (3,223) (4,779) (11,860)
Decrease (increase) in inventories 8,167 (6,623) 9,911 (7,361)
Decrease (increase) in prepaid expenses and deposits 494 (275) (4,921) 298
(Increase) decrease in income taxes recoverable (63) 195 919 154
Decrease in notes payable (208) (42) (1,494) (6,949)
Increase (decrease) in accounts payable and accrued 2,455 6,730 (3,913) 13,016
expenses
Repayment of capital leases - - (65) -
Increase (decrease) in amount due to a related party 1,534 - (87) -
(Decrease) increase in income taxes payable (47) 108 (239) 205
--------------- -------------- --------------- --------------
Total adjustments 5,805 (1,276) 1,870 (21,170)
--------------- -------------- --------------- --------------
Net cash provided by (used in) operating activities $ 1,796 $ 2,338 $ (1,464) $ (2,982)
--------------- -------------- --------------- --------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment $ (18,626) $ (915) $ (23,601) $ (1,296)
Decrease in other assets - 159 - 159
Increase in investment of subsidiaries - - (85) -
Proceeds from disposal of investment in an - - - 3,875
affiliated company
Purchase of interest in affiliated companies - - - (207)
Proceeds from disposal of property, plant and 35 - 279 376
equipment
Proceeds from disposal of marketable securities - - - 22,588
--------------- -------------- --------------- --------------
Net cash (used in) provided by investing activities $ (18,591) $ (756) $ (23,407) $ 25,495
--------------- -------------- --------------- --------------
CASH FLOWS FROM FINANCING ACTIVITIES
Share buy-back program $ (600) $ - $ (1,892) $ (73)
Dividends paid (1,009) (9,664) (1,913) (10,381)
Repayment of short term debt - (121) (24) -
Proceeds from shares issued on exercise of options - 190 1,231 295
and warrants
Contribution by minority interest - - - 200
--------------- -------------- --------------- --------------
Net cash used in financing activities $ (1,609) $ (9,595) $ (2,598) $ (9,959)
--------------- -------------- --------------- --------------
Foreign currency translation adjustments (1) (1) (1) 1
--------------- -------------- --------------- --------------
Net (decrease) increase in cash and cash equivalents (18,405) (8,014) (27,470) 12,555
--------------- -------------- --------------- --------------
Cash and cash equivalents at beginning of period 49,831 74,784 58,896 54,215
--------------- -------------- --------------- --------------
Cash and cash equivalents at end of period $ 31,426 $ 66,770 $ 31,426 $ 66,770
=============== ============== =============== ==============
NAM TAI ELECTRONICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
FOR THE PERIODS ENDED JUNE 30, 2001 AND 2000
(In Thousands of US Dollars)
1. Accumulated other comprehensive income represents foreign currency
translation adjustments and unrealised gain on marketable securities. The
comprehensive (loss) income of the Company was ($3,117) and $19,022 for the
six months ended June 30, 2001 and June 30, 2000, respectively.
2. Business segment information - The Company operates principally in the
consumer electronic product segment of the electronics manufacturing
services (EMS) industry. A summary of the net sales, income from operations
and identifiable assets by geographic areas is as follows:
Unaudited Unaudited
Three months ended Six months ended
June 30 June 30
2001 2000 2001 2000
- --------------------------------------------- --------------- --------------- --------------- --------------
Net sales from operations within:
- Hong Kong:
Unaffiliated customers $ 51,239 $ 49,557 $ 98,565 $ 93,114
- PRC, excluding Hong Kong:
Unaffiliated customers 4,643 983 8,804 2,018
Intersegment sales 39,619 48,233 76,240 90,217
- Intersegment eliminations (39,619) (48,233) (76,240) (90,217)
--------------- --------------- --------------- --------------
Total net sales $ 55,882 $ 50,540 $ 107,369 $ 95,132
=============== =============== =============== ==============
Income (loss) from operations within:
- PRC, excluding Hong Kong $ (2,644) $ 1,588 $ (2,909) $ 3,605
- Hong Kong (1,365) 2,026 (425) 14,583
--------------- --------------- --------------- --------------
Total net income $ (4,009) $ 3,614 $ (3,334) $ 18,188
=============== =============== =============== ==============
Unaudited Audited
June 30, 2001 Dec. 31, 2000
- --------------------------------------------- --------------- ---------------
Identifiable assets by geographic area:
- PRC, excluding Hong Kong $ 64,121 $ 71,242
- Hong Kong 133,760 137,128
--------------- ---------------
Total assets $ 197,881 $ 208,370
=============== ===============
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 Q2/01 Results on July 30, 2001
VANCOUVER, CANADA, July 18, 2001 -- 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, 2001 before the market opens on Monday, July 30, 2001.
The Company will hold a conference call on Monday, July 30, 2001 @ 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 27, 2001.
Shareholders, media, and interested investors are invited to listen to the live
conference call by dialing (612) 332-0932 or on the internet at
http://www.videonewswire.com/event.asp?id=274
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, lithium ion rechargeable battery packs,
transformers and LCD panels. The Company utilises advanced production
technologies such as chip on board (COB), 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
website 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/ M. K. KOO
-----------------------
M. K. KOO
CHIEF FINANCIAL OFFICER
Date: July 31, 2001