[NAM TAI LOGO] [NTE LISTED NYSE logo] FOURTH QUARTER NEWS RELEASE
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Represented by PAN PACIFIC I.R. LTD. Contact: Lorne Waldman
1790 - 999 WEST HASTINGS STREET President
VANCOUVER, BC, CANADA V6C 2W2 E-MAIL: shareholder@namtai.com
TEL: (604) 669-7800 FAX: (604) 669-7816 WEB: www.namtai.com
TOLL FREE TEL/FAX: 1-800-661-8831
NAM TAI ELECTRONICS, INC.
Dividend in 2005 increased 175% to $1.32 per share
Q4 Net Sales Up 40.9% to $152.8 Million vs. $108.4 Million
Operating Income Up 32.4% to $10.3 Million vs. $7.8 Million
VANCOUVER, CANADA -- February 7, 2005 -- Nam Tai Electronics, Inc. ("Nam Tai" or
the "Company") (NYSE Symbol: NTE; CBOE Symbol: QNA; Frankfurt Stock Exchange
Symbol: 884852) is pleased to announce its unaudited results for the fourth
quarter ended December 31, 2004.
KEY HIGHLIGHTS
(In thousands of US Dollars, except as otherwise stated)
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Quarterly Results Twelve Months Results
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4Q 2004 4Q 2003 YoY(%) 2004 2003 YoY(%)
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Net sales 152,776 108,454 40.9 533,861 406,306 31.4
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Gross Profit 19,386 17,275 12.2 76,476 66,290 15.4
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% of sales 12.7% 15.9% 14.3% 16.3%
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Income from operations 10,280 7,765 32.4 43,378 37,387 16.0
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% of sales 6.7% 7.2% 8.1% 9.2%
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per share(diluted) $0.24 $0.19 26.3 $1.02 $0.92 10.9
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Net income (loss) (a) &(b) (42,465) 13,706 -409.8 66,885 43,802 52.7
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% of sales -27.8% 12.6% 12.5% 10.8%
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Basic earnings per share ($1.00) $0.33 -397.6 $1.57 $1.09 44.9
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Diluted earnings per share N/A $0.33 N/A $1.57 $1.07 46.6
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Weighted average number of shares
('000)
Basic 42,665 40,975 - 42,496 40,336 -
Diluted 42,733 41,253 - 42,548 40,839 -
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Notes:
(a) Other income in the fourth quarter of 2004 consisted of $6.2 million from
the partial disposal of the Company's interest in its subsidiary, JIC
Technology Company Limited. In the fourth quarter of 2003, other income
amounted to a total of $2.0 million.
(b) After adjusting for the unrealized loss on the impairment of marketable
securities in TCL Communication in the fourth quarter of 2004, the
Pro-forma net income and earnings per shares would be as follow:
Page 1 of 12
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Quarterly Results Twelve Months Results
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4Q 2004 4Q 2003 YoY(%) 2004 2003 YoY(%)
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US GAAP based income from
operations 10,280 7,765 32.4 43,378 37,387 16.0
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US GAAP based other income (loss)
/income tax (expenses) benefit / (52,745) 5,941 23,507 6,415
minority interests
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US GAAP based net income(loss) (42,465) 13,706 -409.8 66,885 43,802 52.7
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Add:
Unrealized loss on the impairment of
marketable securities in TCL
Communication 58,316 58,316
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Pro-forma net income 15,851 13,706 15.7 125,201 43,802 185.8
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% of sales 10.4% 12.6% 23.5% 10.8%
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Proforma $0.37 $0.33 11.1 $2.95 $1.09 171.3
Basic earnings per share
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Diluted earning per share $0.37 $0.33 11.6 $2.94 $1.07 174.4
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Weighted average number of shares
(`000)
Basic 42,665 40,975 - 42,496 40,336 -
Diluted 42,733 41,253 - 42,548 40,839 -
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Note:
Excluding the $58.3 million non-cash unrealized loss on the impairment of
marketable securities in TCL Communication during the fourth quarter of 2004,
the cash based realized gain on other income after deducting income tax expense
and minority interests for the year of 2004 was $81.8 million.
Nam Tai is excited to announce that it has achieved its strongest sales in the
fourth quarter ended December 31, 2004. The net sales of $152.8 million for the
fourth quarter of 2004 not only exceeded the fourth quarter upper sales guidance
of $135 million given by Nam Tai, it is also a new record quarterly sales of the
Company. Sales were driven mainly by key component sub-assemblies, such as CMOS
image sensor modules for cellular phones with built in camera function and
flexible printed circuit board ("FPC") sub-assemblies. Such business, which is
high-tech in focus and has the potential for significant growth, is currently
the main focus of Nam Tai.
The gross profit margin for the fourth quarter of 2004 decreased to 12.7% mainly
because of the prevalent product mix. The orders for key component sub-assembly
business, which generally accounts for lower gross profit margins, sharply
increased in the fourth quarter of 2004, causing a reduction in overall gross
profit margins. High oil price and a strong Yen also impacted the operation
costs.
However, strong sales growth augmented operating income, offsetting the impact
of lower gross profit margins. The Company attained an income from operations
per share of $0.24, which also exceeded the upper guidance given by Nam Tai.
For the whole year, Nam Tai achieved an impressive sales growth of 31.4%,
reaching net sales of $533.9 million. The net income for the whole year has also
increased remarkably by 52.7% to $66.9 million, partly due to the benefit of
certain one-time other income items.
Page 2 of 12
Company Outlook
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The Company has been very successful in shifting its focus to key component
sub-assembly, which accounted for 64% of its sales in the fourth quarter of 2004
and 59% of its sales for the whole year of 2004. Nam Tai believes that the
strong growth of this business will offset the impact of lower gross profit
margins and the Company can continue to achieve strong growth in its overall
profits. In the long run, Nam Tai expects to achieve an overall gross profit
margin of around 12%, which is still one of the leaders in the EMS industry.
The Company is also well-positioned for any re-valuation of the RMB. Two of its
subsidiaries, Nam Tai Electronic & Electrical Products Limited and J.I.C.
Technology Company Limited are listed on the Hong Kong Stock Exchange. The
Company also has investments in TCL Corporation and TCL Communication, which
shares are denominated in either RMB or HK$. All these will help to hedge the
risk of any re-valuation of the RMB.
To maintain its future growth, Nam Tai must keep itself abreast of its
competitors. As a result, the Company has to put more resources on R&D and new
production capacity to back up its continued growth. Nam Tai may have to be more
vertically integrated to maintain its competitive edge. The SG&A expenses in
forthcoming years will accordingly increase. However, the Company is confident
that it can find a proper balance point so that the growth of its earnings per
share will not be slowed down and its shareholders will continue to be rewarded
like before.
The Company is pleased to adjust its long-term target growth rate for net sales
from 22% per annum to 25% per annum for the coming five years. The short-term
target growth rate for 2005 is temporarily adjusted to 30%-35%, taking in
account the Company's current situation. This year to year short-term target
growth rate will be adjusted if the Company's business continues to grow
significantly as it has recently.
Nam Tai's sales are seasonally lower in the first quarter. However, Nam Tai is
encouraged by its performance in the fourth quarter of 2004. The Company is
looking forward to achieving a new quarterly sales record for the first quarter
of 2005. Based on current market conditions and orders on hand as well as orders
carried forward from the fourth quarter of 2004, the Company is pleased to
provide the following business projection for the first quarter of 2005.
(In millions of US Dollars, except for earnings per share)
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1Q 2005 1Q 2004 1Q 2005 4Q 2004
(Estimated) (Actual) vs (Actual)
1Q 2004
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Sales $150 -$155 $95 58%-63% $153
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Pro Forma Earnings per
Share (diluted)(a) $0.22 -$0.24 $0.15(b) 47%-60% $0.23(c)
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Note: (a) Diluted Earnings per share includes tax expenses and the minority
interest of 25% in NTEEP and approximately 28% in JIC and 20% in Namtek
Software Development Company Limited
(b) Excluded US$1.4 million dividend income from Huizhou TCL Mobile
Communication Company Limited.
(c) Excluded US$6.2 million gain on partial disposal of subsidiaries and
US$58.3 million unrealized loss on the impairment of marketable securities
in TCL Communication.
"2004 was once again a year of great harvest for Nam Tai," said Mr. Joseph Li,
CEO of Nam Tai. "We have achieved new records in 2004 and are looking forward to
breaking these records in 2005. We are
Page 3 of 12
so pleased that our strategy of focusing on key component sub-assembly has been
so successful. With upgraded production technology and capability, expanded new
production capacity which construction has completed on schedule, and a strong
cash reserve, we are very confident for our continued growth and our capability
to satisfy our customers' strong demand. All businesses of Nam Tai are now run
by its four subsidiary groups and Nam Tai has become a holding company. Each
subsidiary group has a different team of independent management. They are
focused on different product segments and customers. This corporate structure
provides flexibility and enhances Nam Tai's responsiveness to requests of
customers and any changes in the market environment. With our experienced
management teams, we strongly believe we can continue to enjoy more successful
years ahead. "
Unrealized Loss on Marketable Securities in TCL Communication
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In the third quarter of 2004, the Company classified its investment in TCL
Communication as marketable securities - available for sale and recorded the
difference between the fair market value and the carrying cost of such
investment in shareholders' equity. Under US GAAP, there will be no impact on
Nam Tai's income statement until such investments are sold. However, in light of
the performance of the share price of TCL Communication since its listing in
September, 2004, the Company considered it a prudent approach to record the
unrealized loss of its investment in TCL Communication pursuant to the guidance
from Emerging Issue Task Force 03-1 issued by the Financial Accounting Standard
Board. The initial cost of our investment of TCL Communication was $79.5
million. The fair market value as calculated by reference to the closing price
of the shares of TCL Communication as at December 31, 2004 was $21.2 million.
Accordingly, an aggregated unrealized loss of $58.3 million was recorded in Nam
Tai's income statement for the fourth quarter of 2004.
Such unrealized loss has no impact on Nam Tai's cash position. The Company still
has confidence in its investment in TCL Communication and believes it will again
benefit its shareholders when it realizes its investment in TCL Communication.
Compliance with Sarbanes-Oxley Act
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The Company has engaged an external consultant to advise the Company on its
compliance with Section 404 of the Sarbanes-Oxley Act ("the Act"). The Company
is confident that it will meet the deadline for compliance on time towards the
end of 2005. The estimated cost in relation to the compliance process is
expected to be immaterial and will have no significant impact to the Company's
earnings for 2005.
Dividend for 2005
- -----------------
To maintain a strong financial position to support and back up the future growth
of the Company, the Company, after due consideration, has decided not to pay any
special dividend.
Regarding the regular dividend, taking into account the cash on hand, the
expansion plans of the Company and its earnings in 2004, the Company has taken a
conservative approach and determined the regular dividend for 2005 to be $1.32
per share to be paid quarterly at the rate of $0.33 per share. This represents
an increase of 175% from the dividend paid in 2004, following an increase of
140% in 2004 from 2003. The Board considers this to be an appropriate reward for
the shareholders and the dividend paid will not affect the continuous growth of
the Company.
The payment dates and record dates for the quarterly dividend of $0.33 per share
payable in each quarter for 2005 are as follows:-
Page 4 of 12
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Record Date Payment Date Dividend (US$)
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1 March 31, 2005 On or before April 21, 2005 $0.33
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2 June 30, 2005 On or before July 21, 2005 $0.33
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3 September 30, 2005 On or before Oct 21, 2005 $0.33
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4 December 31, 2005 On or before January 21, 2006 $0.33
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Total $1.32
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Supplementary Information (Unaudited) for the Fourth Quarter of 2004
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1. Quarterly Sales Breakdown
(In Thousands of US Dollars)
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Quarter 2004 2003 YoY(%) YoY(%)
(Quarterly) (Quarterly accumulated)
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1st Quarter 95,435 87,981 8.5% 8.5%
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2nd Quarter 147,664 116,714 26.5% 18.8%
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3rd Quarter 137,986 93,157 48.1% 27.9%
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4th Quarter 152,776 108,454 40.9% 31.4%
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Total 533,861 406,306
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2. Net Sales Breakdown by Product Segment
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2004 2003
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Segment 4Q YTD 4Q YTD
(%) (%) (%) (%)
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Consumer Electronics and Communication
Products (a) 28% 31% 31% 32%
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Telecom. Components Assembly:
-Telecom. Components Assembly (b) 64% 59% 58% 57%
-Software Development Services (c) 1% 1% 1% 1%
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Parts & Components:
-LCD Panels (d) 7% 9% 10% 9%
-Transformers (e) 0% 0% 0% 1%
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100% 100% 100% 100%
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Note:
(a) Represents the sales of Nam Tai Electronic & Electrical Products Ltd.
(b) Represents the sales of Zastron Precision-Tech Limited (formerly known as
Nam Tai Telecom(Cayman) Co., Ltd.)
(c) Represents the sales of Namtek Software Development Company Limited
(d) Represents the sales of JIC
(e) In June 2003, we sold our transformers operation to a third party.
3. Key Highlight of Financial Position
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(unaudited) (audited)
As at December 31 As at December 31
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2004 2003
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Cash on Hand $160.6 million (a) $61.8 million
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Marketable Securities $41.9 million -
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Page 5 of 12
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Cash/Current Liabilities 1.38 0.83
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Current Ratio 2.87 2.25
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Total Assets/Total Liabilities 3.79 3.88
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Debtors Turnover 62 days 58 days
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Inventory Turnover 20 times 13 times
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Average Payable Period 72 days 60 days
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Note : (a) Taking into consideration the $10.2 million in proceeds from
the partial disposal of shares in J.I.C. Technology Company
Limited, which was recorded in Prepaid Expenses and Other
Receivable as at December 31, 2004 and received on January 3,
2005. The cash on hand for the Company would have been $170.8
million.
Fourth Quarter Results Analyst Conference Call
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The Company will hold a conference call on Monday, February 7, 2005 at 10:00
a.m. Eastern Time for analysts to discuss the fourth quarter results with
management. Shareholders, media, and interested investors are invited to listen
to the live conference over the internet by going to
www.namtai.com/news/news.htm and clicking on the conference call link or over
the phone by dialing (612) 288-0329 just prior to its start time. Callers will
be asked to register with the conference call operator.
About Nam Tai Electronics, Inc.
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We are an electronics manufacturing and design services provider to original
equipment manufacturers of telecommunications and consumer electronic products.
Through our electronics manufacturing services operations, we manufacture
electronic components and subassemblies, including LCD panels, LCD modules,
radio frequency modules, flexible printed circuit sub-assemblies and image
sensor modules. These components are used in numerous electronic products,
including cellular phones, laptop computers, digital cameras, copiers, fax
machines, electronic toys, handheld video game devices and microwave ovens. We
also manufacture finished products, including cellular phones, palm-sized PCs,
personal digital assistants, electronic dictionaries, calculators and digital
camera accessories for use with cellular phones.
Nam Tai has two Hong Kong listed subsidiaries, Nam Tai Electronic & Electrical
Products Limited ("NTEEP") and J.I.C. Technology Company Limited ("JIC") and
their Fourth Quarter Results were announced earlier today in Hong Kong.
Interested investors may go to the website of The Stock Exchange of Hong Kong at
www.hkex.com.hk to obtain the information. The stock code of NTEEP and JIC on
The Stock Exchange of Hong Kong are the 2633 and 987 respectively. Investors are
reminded to exercise caution when assessing such information and not to deal
with the shares of the Company based solely on reliance of such information. The
results of NTEEP and JIC only represent a part of the results of the Company and
there are GAAP differences in the financial statements of NTEEP and JIC when
compared with the financial statements of the Company. Furthermore, different
subsidiaries of the Company may have different peak seasons during a year.
Forward-Looking Statements
- --------------------------
Certain statements in this press release are "forward-looking statements" within
the meaning of U.S. federal securities laws. Nam Tai intends that these
statements be covered by the safe harbors created under these laws. These
forward-looking statements are, by their nature, subject to risks, uncertainties
and other factors that could cause the actual results to differ materially from
future results expressed or implied by the forward-looking statements. These
forward-looking statements include, without
Page 6 of 12
limitation, statements relating to the Company's projected sales and (diluted)
earnings per share for the first quarter of 2005, and the ability of the Company
to finance investments and business expansions through internal resources in the
foreseeable future. These forward-looking statements reflect our current views
with respect to future events and are not a guarantee of our future performance.
There are important factors that could cause the actual results to differ
materially from the information set forth in these forward-looking statements.
Given these uncertainties, readers are cautioned not to place undue reliance on
the forward-looking statements which only speak as of the date of this press
release. Because of these risks, uncertainties and assumptions, the
forward-looking events and circumstances discussed in this news release might
not occur the way we expect, or at all. Nam Tai does not undertake any
obligation to release publicly any revisions to these forward-looking statements
to reflect events or circumstances after the date of this press release or to
reflect the occurrence of unanticipated events, except as may be required under
applicable securities laws. These factors include, without limitation, lower
than expected sales in the first quarter of 2005, unexpected changes to the
Company's cash position, general economic, market and business conditions and
other factors beyond the Company's control. NAM TAI ELECTRONICS, INC.
CONSOLIDATED STATEMENTS OF INCOME
Page 7 of 12
NAM TAI ELECTRONICS, INC.
CONSOLIDATED STATEMENTS OF INCOME
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FOR THE PERIODS ENDED DECEMBER 31, 2004 AND 2003
(In Thousands of US Dollars except share data)
Unaudited Unaudited
Three months ended Twelve months ended
December 31 December 31
2004 2003 2004 2003
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Net sales - related parties $ 5,260 $ 6,843 $ 34,181 $ 20,782
Net sales - third parties 147,516 101,611 499,680 385,524
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Total net sales 152,776 108,454 533,861 406,306
Cost of sales 133,390 91,179 457,385 340,016
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Gross profit 19,386 17,275 76,476 66,290
Costs and expenses
Selling, general and administrative expenses 7,674 8,248 28,053 24,866
Research and development expenses 1,432 1,262 5,045 4,037
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9,106 9,510 33,098 28,903
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Income from operations 10,280 7,765 43,378 37,387
Interest income 523 235 1,110 788
Gain on partial disposal of subsidiaries 6,249 1,989 77,320 1,838
Unrealized loss on marketable securities (58,316) - (58,316) -
Other income (loss) - net (545) 2,805 17,283 2,899
Interest expense (68) (26) (195) (121)
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Income before income taxes and minority interests (41,877) 12,768 80,580 42,791
and equity in income (loss) of an affiliated
company
Income tax benefit (expense) 840 930 (879) (399)
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Income (loss) before minority interests (41,037) 13,698 79,701 42,392
Minority interests (1,428) (202) (6,010) (1,067)
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Income (loss) after minority interests (42,465) 13,496 73,691 41,325
Equity in income (loss) of an affiliated company - 210 (6,806) 498
Discontinued operation - - - 1,979
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Net income (loss) $ (42,465) $ 13,706 $ 66,885 $ 43,802
===================================================
Net income (loss) per share
Basic $ (1.00) $ 0.33 $ 1.57 $ 1.09
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Diluted $ N/A $ 0.33 $ 1.57 $ 1.07
===================================================
Weighted average number of shares (`000')
Basic 42,665 40,975 42,496 40,336
Diluted 42,733 41,253 42,548 40,839
Page 8 of 12
NAM TAI ELECTRONICS, INC.
CONSOLIDATED BALANCE SHEETS
AS AT DECEMBER 31, 2004 AND DECEMBER 31, 2003
(In Thousands of US Dollars) Unaudited Audited
December 31, December 31,
2004 2003
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ASSETS
Current assets:
Cash and cash equivalents $ 160,649 $ 61,827
Marketable securities 41,906 -
Accounts receivable, net 90,362 62,090
Amount due from a related party 66 2,707
Inventories 23,096 27,032
Prepaid expenses and other receivables 12,087 9,799
Income taxes recoverable 6,566 4,922
------------------------------
Total current assets 334,732 168,377
Investment in an affiliated company 3,049 9,855
Investments, at cost - 16,366
Property, plant and equipment, at cost 158,147 127,930
Less: accumulated depreciation and amortization (60,706) (50,283)
------------------------------
97,441 77,647
Deposit for fixed assets 7,701 3,327
Intangible assets 16,290 20,688
Other assets 1,260 1,435
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Total assets $ 460,473 $ 297,695
==============================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable $ 2,080 $ 1,879
Long term bank loan - current portion 2,875 1,125
Accounts payable 89,570 55,674
Accrued expenses and other payables 16,661 13,633
Amount due to a related party - -
Dividend payable 5,120 2,062
Income taxes payable 183 530
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Total current liabilities 116,489 74,903
Long-term bank loan - non-current portion 5,163 1,688
Deferred income taxes - 78
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Total liabilities 121,652 76,669
Minority interests 33,768 3,908
Shareholders' equity:
Common shares 426 412
Additional paid-in capital 241,756 206,845
Retained earnings 56,324 9,863
Accumulated other comprehensive income (loss) (Note 1) 6,547 (2)
------------------------------
Total shareholders' equity 305,053 217,118
Total liabilities and shareholders' equity $ 460,473 $ 297,695
==============================
Page 9 of 12
NAM TAI ELECTRONICS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE PERIODS ENDED DECEMBER 31, 2004 AND 2003
(In Thousands of US Dollars)
Unaudited Unaudited
Three months ended Twelve months ended
December 31 December 31
2004 2003 2004 2003
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ (42,465) $ 13,706 $ 66,885 $ 43,802
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization of property, plant and equipment 3,737 3,183 13,924 12,172
Amortization of intangible assets 22 23 92 92
Net loss (gain) on disposal of property, plant and equipment 376 94 347 (6)
Gain on disposal of other asset (19) - (19) -
Gain on disposal of a subsidiary net of minority interests - - - (1,979)
Gain on partial disposal of subsidiaries (6,249) (1,989) (77,320) (1,838)
Unrealized loss on marketable securities 58,316 - 58,316 -
Loss on disposal of long term investment - - 67 -
Loss on disposal of convertible notes - - - 102
Compensation cost on partial disposal of a subsidiary - - - 509
Equity in loss (income) of an affiliated company - (209) 6,806 (498)
Dividend income - - (15,913) -
Minority interests 1,431 202 6,013 1,067
Deferred income taxes (78) (9) (78) (34)
Changes in current assets and liabilities, net of effects of
acquisition and disposal:
(Increase) Decrease in accounts receivable (16,531) 2,223 (28,272) (11,146)
Decrease (Increase) in amount due from a related party (66) (633) 2,641 (2,707)
Decrease (Increase) in inventories 5,153 (7,081) 3,936 (8,554)
Decrease (Increase) in prepaid expenses and other receivables 575 (462) 2,651 (3,027)
(Increase) Decrease in income taxes recoverable 210 (631) (1,644) (4,067)
Increase (Decrease) in notes payable (1,658) 319 201 894
Increase in accounts payable 33,044 1,170 33,896 17,971
Increase in accrued expenses and other payables 1,963 3,317 3,028 1,189
Decrease in amount due to a related party (288) - - -
(Decrease) Increase in income taxes payable (1,011) (874) (347) 330
--------------------------------------------------
Total adjustments 78,927 (1,357) 8,325 470
--------------------------------------------------
Net cash provided by operating activities $ 36,462 $ 12,349 $ 75,210 $ 44,272
--------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of long term investment $ - $ - $ (25,084) $ (384)
Purchase of property, plant and equipment (14,396) (4,826) (38,611) (17,053)
Deposit for purchase of property, plant & equipment 2,736 (1,865) (4,374) (3,103)
Increase in other assets (37) (24) (37) (24)
Proceeds from disposal of investment in other assets 231 - 231 -
Proceeds from disposal of property, plant and equipment 1,498 2 4,546 2,595
Proceeds from disposal of long term investment 385 - 5,609 -
Proceeds from partial disposal of subsidiaries 2,682 3,712 95,449 6,551
Proceeds from disposal of convertible notes - - - 5,026
Prepayment for long term investment - (5,277) - (5,277)
Acquisition of an affiliated company - - - (10,000)
--------------------------------------------------
Net cash provided by (used in) investing activities $ (6,901) $ (8,278) $ 37,729 $ (21,669)
--------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Cash dividends paid $ (5,120) $ (31,876) $ (19,414) $ (37,777)
Repayment of bank loans (606) (281) (5,375) (13,984)
Proceeds from bank loans 1,800 - 10,600 -
Proceeds from shares issued on exercise of options and warrants - 4,388 72 8,508
--------------------------------------------------
Net cash used in financing activities $ (3,926) $ (27,769) $ (14,117) $ (43,253)
--------------------------------------------------
Net increase (decrease) in cash and cash equivalents 25,635 (23,698) 98,822 (20,650)
--------------------------------------------------
Cash and cash equivalents at beginning of period 135,014 85,525 61,827 82,477
--------------------------------------------------
Cash and cash equivalents at end of period $ 160,649 $ 61,827 $ 160,649 $ 61,827
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Page 10 of 12
NAM TAI ELECTRONICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
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FOR THE PERIODS ENDED DECEMBER 31, 2004 AND 2003 (In Thousands of US Dollars)
1. Accumulated other comprehensive income represents foreign currency
translation adjustments and unrealized loss on marketable securities. The
comprehensive income of the Company was $73,434 (including an unrealized
gain on marketable securities of US$6,549 in relation to TCL Corp.) and
$43,802 for the twelve months ended December 31, 2004 and December 31,
2003, respectively.
2. Business segment information - The Company operates primarily in three
segments, the Consumer Electronics and Communication Products ("CECP")
segment, Telecom. Components Assembly ("TCA") segment, and the LCD Panels
and Transformers ("LCDP") segment.
Unaudited Unaudited
Three months ended Twelve months ended
December 31 Decemberr 31
2004 2003 2004 2003
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NET SALES:
-CECP $ 42,189 $ 33,894 $ 163,584 $ 128,778
-TCA 99,366 64,180 321,567 236,204
-LCDP 11,221 10,380 48,710 41,324
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Total net sales $ 152,776 $ 108,454 $ 533,861 $ 406,306
===============================================
NET INCOME (LOSS):
-CECP $ 4,236 $ 6,642 $ 18,562 $ 22,848
-TCA (46,344) 7,196 46,225 18,254
-LCDP (357) (132) 2,098 2,700
-----------------------------------------------
Total net income (loss) $ (42,465) $ 13,706 $ 66,885 $ 43,802
===============================================
Unaudited. Audited
Dec. 31, Dec. 31,
2004 2003
- --------------------------------------------------------------------------------
IDENTIFIABLE ASSETS BY SEGMENT:
-CECP $ 134,473 $ 85,799
-TCA 274,664 162,366
-LCDP 51,336 49,530
-----------------------
Total assets $ 460,473 $ 297,695
=======================
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3. The following is a summary of the net sales, net income and long-lived assets
by geographical area.
Unaudited Unaudited
Three months ended Twelve months ended
December 31 Decemberr 31
2004 2003 2004 2003
- --------------------------------------------------------------------------------------
NET SALES FROM OPERATIONS WITHIN:
-Hong Kong:
Unaffiliated customers $ 11,221 $ 26,946 $ 48,710 $ 295,113
Related party - 839 - 14,770
Inter-companies sales 113 14 563 404
-PRC, excluding Hong Kong:
Unaffiliated customers 136,295 74,665 450,970 90,411
Related party 5,260 6,004 34,181 6,012
Inter-companies sales - 19,717 4,393 263,971
-Inter-companies eliminations (113) (19,731) (4,956) (264,375)
------------------------------------------------
Total net sales $ 152,776 $ 108,454 $ 533,861 $ 406,306
================================================
NET INCOME (LOSS) WITHIN:
-PRC, excluding Hong Kong and Macao $ 4,999 $ 11,394 $ 30,981 $ 38,627
-Macao 5,621 1,273 16,240 1,273
-Hong Kong (53,085) 1,039 19,664 3,902
------------------------------------------------
Total net income (loss) $ (42,465) $ 13,706 $ 66,885 $ 43,802
================================================
Unaudited. Audited
Dec. 31, Dec. 31,
2004 2003
- --------------------------------------------------------------------------------------
LONG-LIVED ASSETS WITHIN:
-PRC, excluding Hong Kong and Macao $ 84,453 $ 59,399
-Macao 134 180
-Hong Kong 12,854 18,068
----------------------
Total long-lived assets $ 97,441 $ 77,647
======================
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