Nam Tai Electronics, Inc. Major Customer Contract Signed
SHENZHEN, China, Nov. 14, 2011 /PRNewswire/ -- Nam Tai Electronics, Inc. ("Nam Tai" or the "Company") (NYSE: NTE) today announced that it has signed a major customer contract for LCD modules that had previously been reported as being under negotiation in the Company's press release of financial results for the third quarter of 2011.
The Company's management believes that this new contract is consistent with the Company's previously reported projections of customer demand with the potential to more than double the Company's annual sales revenue in 2012. Customer order volumes are not guaranteed, however, and will vary depending on end-equipment sales and other factors. The Company expects to receive firm orders under the contract soon which will support high-volume production starting at the end of December with shipments beginning in early January from the Company's factory in Wuxi.
Discussions with a second major customer to produce LCD module subassemblies for smart phone applications at the Company's Shenzhen site remain in progress. The parties currently plan high-volume production of the modules to begin about June of next year, but the Company has not yet received firm orders.
The Company continues to note several risks that could impact sales revenue growth resulting from new contracts and the two planned expansion projects including the possibility of labor shortages in China or subassembly component shortages limiting production volumes the Company can achieve. As highlighted in the Company's October 31 press release, future increases in sales revenue are not expected to relieve pressure on margins. Continuing inflation in China and appreciation of the PRC renminbi are expected to further increase overhead and cost pressure on margins, necessitating ongoing cost control measures to sustain profitability.
FORWARD-LOOKING STATEMENTS AND FACTORS THAT COULD CAUSE OUR SHARE PRICE TO DECLINE
Express or implied statements in this press release regarding management's assessments of the impact of the developments reported on the business performance and financial results of the Company are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Actual results could differ materially from those projected in these forward-looking statements as a result of a number of factors, including one or more of the factors discussed in "Item 3. Key Information — Risk Factors" in the Company's Annual Report on Form 20-F for the year ended December 31, 2010 as filed on March 16, 2011 with the Securities and Exchange Commission and Reports on Form 6-K containing releases of Nam Tai's quarterly financial results, copies of which may be obtained from Nam Tai's website at http://www.namtai.com or from the SEC's EDGAR website at http://www.sec.gov.
All information in this press release is as of November 14, 2011, in Shenzhen of the People's Republic of China except as otherwise indicated. Nam Tai does not undertake any duty, and should not be expected, to update any forward-looking statement to conform the statement to actual results or changes in Nam Tai's expectations, unless so required by law. Readers are cautioned not to place undue reliance on these forward-looking statements. The inclusion of any statement in the release does not constitute an admission by the Company or any other person that the events or circumstances described in such statements are material.
ABOUT NAM TAI ELECTRONICS, INC.
We are an electronics manufacturing and design services provider to a select group of the world's leading OEMs of telecommunications, consumer electronic, medical and automotive products. Through our electronics manufacturing services operations, we manufacture electronic components and subassemblies, including LCD modules, FPC subassemblies and image-sensor modules and PCBAs. These components are used in numerous electronic products, including mobile phones, laptop computers, digital cameras, electronic toys, handheld video game devices, and entertainment devices. We also manufacture finished products, including mobile phone accessories, home entertainment products and educational products. We assist our OEM customers in the design and development of their products and furnish full turnkey manufacturing services that utilize advanced manufacturing processes and production technologies.
Nam Tai Electronics, Inc. is registered in the British Virgin Islands and listed on the New York Stock Exchange (Symbol "NTE"). All the Company's operations are located in the People's Republic of China and its investor relations office is located in Hong Kong.
SOURCE Nam Tai Electronics, Inc.