SHENZHEN -- Nam Tai Electronics reported a net loss of $5.6 million in the fourth quarter, down from net income of $5.3 million in 2010.

The electronics manufacturing services company took one-time costs of $2.7 million due to layoffs and a goodwill impairment loss of $3.0 million during the period ended Dec. 31.

Net sales in the quarter were $145.3 million, down 12.7% from 2010. Gross profit decreased 83.8% to $2.3 million. Gross profit margin fell from 8.5% to 1.6% due to changes in product mix, higher labor costs, and currency depreciation. The company was also hit in December with a 1,200-worker labor strike over dissatisfaction with wages for 2012, leading to a $2.7 million payout for employee severance benefits. Startup costs and operating losses at the company's facility in Wuxi continued to accrue, and the firm's flexible PCB business continues to incur losses.

The lower gross margins drove down operating losses to $12.5 million, down from operating income of $4.3 million in 2010.

For the year, net sales were $602.3 million, up 12.7%. Net income plunged however, to $500,000, versus  $15 million Gross margin fell by more than half, to 4.7%, and gross profit dropped 45.2% to $28.1 million. The operating loss was $11.5 million, compared to operating income of $14.8 million in 2010.

Meanwhile, a pair of expansion projects continue to be delayed due to government foot-dragging and a dispute over land rights. Nam Tai says the projects are "critical to the company's future growth and both depend upon the prompt action and cooperation of the local PRC government."

The firm said it see great potential for growth in LCD manufacturing.

Nam Tai is a Top 25 global EMS company, according to the CIRCUITS ASSEMBLY Top 50.

• Prev
• Next