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Nam Tai Electronics, Inc. reported sales for the first quarter ended March 31, 1997 of $31,152,000, up 23% from $25,357,000 for the first quarter of 1996. Operating income for the first quarter of 1997 was $3,630,000, an increase of 81% compared to $2,007,000 for the prior year period. Net income for the period increased by 139% to $5,570,000 from $2,333,000 for the first quarter of 1996. Earnings per share for the first quarter of 1997 increased to $0.71 per share from $0.29 per share for the prior year period.
The results for the quarter include other income of $2,565,000 from the sale of 225,000 shares of Deswell Industries, Inc. less a provision of $515,000 relating to the sale of a building owned by the Company in Burnaby, British Columbia. Net income and earnings per share increased as a result of these two items by $2,050,000 or $0.26 per share, respectively.
Nam Tai is very satisfied with its sales and earnings for the first quarter of 1997. The significant growth in sales results from both stronger demand for the Company’s manufacturing services from its existing customers as well as orders for new products such as the integrated circuit (IC) card balance reader. Growth in sales is anticipated through the second quarter of 1997 such that the Company expects to report continuing favorable sales performance, particularly compared to the second quarter of 1996 when the Company suffered from weakness in sales.
Nam Tai also reported continuing strength in its gross profit margin. Factory utilization is increasing and the Company is now benefitting from both the additional capacity associated with its new factory, which opened in 1996, as well as the efficiencies of a more modern facility. In addition, more favorable component pricing, in part as a result in the decline in the Japanese yen during the first quarter of 1997, also contributed to profitability.
In the first quarter of 1996 the Company was honored with a Texas Instruments Supplier Excellence Award for a second consecutive year. It is unusual for the Company’s respected OEM customer to grant this award for two consecutive years. This award will increase Nam Tai’s commitment to meeting and surpassing the demanding quality criteria required by Texas Instruments and the Company’s other customers.
Nam Tai was pleased to take advantage of the increase in value of the common shares of Deswell in order to realize some profit on its investment. The Company continues to believe in the importance of maintaining strong long term relationships with suppliers such as Deswell and continues to hold a total of 252,000 shares of Deswell as an investment.
Nam Tai’s Annual Meeting of Shareholders will be held at 4:30 p.m. on June 26, 1997 at the Plaza Hotel, Fifth Avenue at Central Park South, New York. The record date for the Annual Meeting has been set at May 7, 1997. The Company’s dividend plan will be announced at the Annual Meeting.
This report contains certain forward-looking statements. The actual results may differ significantly as a result of various factors including, but not limited to: the possibility of fluctuations in demand for the products manufactured by the Company, reductions or cancellations in customer requirements and the ability to manufacture and ship customer orders to required specifications.
Nam Tai is a full service contract manufacturer which provides hardware and software design, plastic moulding, component purchasing, assembly, quality control and shipping services to major original equipment manufacturers (“OEMs”) from Japan and North America. The Company makes use of highly advanced technology at its ISO 9001 certified facilities in Shenzhen, China. It also maintains marketing and administrative operations in Hong Kong and Vancouver, Canada, respectively. The Company’s electronic products include personal organizers, spell checkers, dictionaries, calculators and IC card balance readers as well as complex electronic subassemblies and components. The Company’s customers include Canon, Casio, Citizen, Matsushita Battery, Nintendo (which orders through Sharp), Optrex, Radio Shack, Sanyo Electric, Seiko Instruments, Sharp and Texas Instruments.
M.K. Koo Chairman |
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