Nam Tai Electronics, Inc., a company domiciled in the British Virgin Islands and generally engaged in electronics manufacturing and design services, on February 12 announced its unaudited results in the fourth quarter and twelve months which ended December 31, 2006.
The electronic manufacturing services industry in which the BVI-based Company is operating has had a difficult year in 2006. As a consequence of the decrease of sales from telecommunication components assembly, Nam Tai’s 4th quarter 2006 net sales declined 7%. The 4th quarter operating income went down 118% as a result of competitive pricing pressure requiring the company to lower unit prices.
For the full year of 2006 Nam Tai experienced growth in business volume from existing customers, but this growth was insufficient to smooth away the effects of pressure to reduce unit prices, resulting in lower operating income and net profit for 2006, if compared to 2005. In the 4th quarter 2006 the BVI Company’s net sales were $229.6 million, which is a decrease of 7.1% if compared to $247.2 million in the 4th quarter 2005. Operating loss in the 4th quarter 2006 made $2.6 million, or $0.06 per share, a decrease of 117.9% if compared to the same period last year. Net loss in the 4th quarter of 2006 was $2.3 million, a decrease of 118.3% if compared to $12.7 million for the same period of 2005.
For the year ended December 31, 2006, Nam Tai’s net sales increased 9.1% compared to the last year: they made $870.2 million, while last year they were $797.2 million. Operating income for the year ended December 31, 2006 was $42.5 million, a decrease of 19.3.% as compared with $52.7 million in 2005. Net income for the year ended December 31, 2006 was $40.8 million, a decrease of 20.6% if compared to $51.3 million or $1.19 per share (diluted) in 2005.
Operating income in the 4th quarter 2006 was $12.0 million, or $0.27 per share – a decrease of 17.2% as compared to the operating income of $14.5 million, or $0.33 per share for the same period 2005. The net income in the 4th quarter of 2006 was $12.3 million, or $0.28 per share, a decrease of 18.0% as compared to $15.0 million, or $0.34 per share, in the fourth quarter of 2005. Operating income for the year 2006 was $42.5 million, or $0.97 per share. Net income for the year 2006 was $40.8 million, or $0.93 per share, a decrease of 20.6% as compared to $51.3 million or $1.19 per share in 2005.
Nam Tai has announced that its financial position remains strong, and net cash provided by operating activities in the 4th quarter 2006 was $19.8 million. The Company ended the quarter with $221.1 million cash on hand after capital expenditures of $6.4 million. The third quarter dividends of $16.6 million were paid to shareholders on October 21, 2006.
BVI Company’s management team remains focused on growing both sales and profitability. Nam Tai’s expansion plans to increase capacity include the construction of additional manufacturing facilities in the People’s Republic of China. Nam Tai management expects that the new capabilities will enhance Company’s competitiveness by enabling it to offer customers more diversified services.
Mr. Warren Lee, Nam Tai’s Chief Executive Officer, has commented, “Despite a challenging 2006, which we expect to continue in 2007, our target of 12% sales growth for 2007 remains unchanged. With our aggressive expansion plans and strong customer relationships, I am optimistic about the long-term prospects of the Company”.