Nam Tai Electronics said 3rd-quarter net income was flat at $18.8...
Nam Tai Electronics said 3rd-quarter net income was flat at $18.8 million vs. $18.9 million a year earlier as it took a $960,000 charge for closing its Hong Kong office and trimming an undisclosed number of jobs. The Hong…
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Kong operations, which included accounting and inventor relations, will be consolidated with Nam Tai’s facilities in China. Nam Tai expects to generate $20 million in proceeds from the sale of the Hong Kong office, which has a $10-$12 million book value, company officials told analysts in an earnings conference call Mon. Revenue rose to $207.9 million from $138 million. Shares of Nam Tai stock fell 6.5% Mon. to close at $22.58 after company officials told analysts that gross margins would fall in the 4th quarter to 10.6% from 12.2% in the 3rd quarter as subsidiary Nam Tai Electronic & Electrical Products (NTTP) faced increased competition and began work on a new OEM contract. Nam Tai officials didn’t disclose the type product NTTP was building although they said it was related to home entertainment. In the past, NTTP has built the Eye-Toy camera and a karaoke device for Sony’s PlayStation 2, a spokesman said. Unclear is whether the new agreement was related to Sony’s PlayStation 3. Initial production of the new product will run 3 to 5 months, but the agreement could cover up to a year, a spokesman said. Nam Tai also will move forward with plans to take subsidiaries JIC and NTTP private, by increasing its stake in both companies to 90%. Nam Tai will spend about $76.5 million on privatization plan including $59.6 million and $16.9 million on buying shares of NTTP and JIC, respectively. During the quarter, Semitronics, Sharp, Sony and Wuxi Sharp accounted for more than 10% of Nam Tai’s revenues. Nam Tai also plans to spend $150 million in capital expenses during the next 5 years to build a new manufacturing facility in China. It recently signed an agreement to buy a 1.3-million-sq.-ft. piece of land near its current plant to build the new facility, a spokesman said.