Nam Tai Property Inc. Reports Q1 2015 Results

SHENZHEN, China, April 27, 2015 /PRNewswire/ -- Nam Tai Property Inc. ("Nam Tai" or the "Company") (NYSE Symbol: NTP) today announced its unaudited results for the first quarter ended March 31, 2015. The Company's original core manufacturing business of LCM module, including Wuxi and Shenzhen production operations was classified as "discontinued operations" and disclosed in the statement of comprehensive income separately under the loss from discontinued operations and not included in the presentation of rental income, net rental income and operating loss that form parts of the operating loss of "continuing operations" and reported as the following:

OPERATING RESULTS

Rental income, net rental income and operating loss for the first quarter of 2015 and the same quarter of 2014 were presented excluding the discontinued operations (Shenzhen and Wuxi facilities). Rental income was mainly derived from properties and lands located in Shenzhen. Operating loss for the first quarter of 2015 was $2.5 million, an increase of $0.8 million, compared to operating loss of $1.7 million in the first quarter of last year.

With respect to the discontinued operations (Shenzhen and Wuxi facilities), for the first quarter of 2015 and the same period of 2014, net sales were nil and $50.6 million, gross profit was nil and $2.5 million, and operating loss was $0.2 million and $15.6 million, respectively.

After considering the loss from discontinued operations (net of tax), net loss in the first quarter of 2015 was $0.02 million, or loss of $0.00 per diluted share, compared to net loss of $21.6 million, or loss of $0.48 per diluted share in the first quarter of last year. Net loss primarily is comprised of (i) income of $0.08 million from continuing operations in the first quarter of 2015, compared to $3.2 million loss in the same period of last year, (ii) and the $0.1 million loss from discontinued operations (net of tax) in the first quarter of 2015, compared to $18.4 million loss in the same period of last year.

Please see page 6 of the Company's Condensed Consolidated Statements of Comprehensive Income for further details. This information has also been published on the Company's website at http://www.namtai.com/investors#investors/quarterly_earnings in the quarterly earnings report of Q1 2015 on page 6, Condensed Consolidated Statements of Comprehensive Income.

COMPANY OUTLOOK

With the cessation of LCM business in April 2014, the Company has been focusing its effort in developing the land parcels in Shenzhen.

In relation to the land parcels (in Guangming and Gushu) in Shenzhen, the construction permit application processes have been proceeding smoothly, and we believe that we can obtain the necessary permits and approvals to carry out the next stages of our property development projects on schedule.

For the Guangming project (Phase 1), the construction permit application processes have been proceeding smoothly, and we are in the final stages of selecting and appointing the qualified professional architectural firms for the next stage of the project. The construction phase of the Guangming project (Phase 1) is expected to commence in Q1 of 2016. Based on the current plan, subject to the final approval of the relevant authorities in China, the Phase 1 of the Guangming project will consist of mixed development of office buildings, retail area, hotel and apartment complexes. The Guangming project (Phase 2) will commence upon the completion of Guangming project (Phase 1). Based on the current timetable, the construction at the Gushu area is expected to commence no earlier than 2017

A summary of our planned gross floor area of the two land parcels in Shenzhen is as follows:

Please note that the eventual plot ratio and GFA, for the two parcels of land could be different from the above, are subject to the final approval of the relevant authorities in China.

In the recent weeks leading to the date of this announcement, the Chinese government has introduced a series of stimulus programs that are favorable to the property market. The average selling prices of properties sold in Shenzhen continued to show modest growth.

At this juncture, we continue to seek potential joint venture partners for the development of the land parcels in Shenzhen. External agents have been engaged to source suitable, capable and experienced joint venture partners. Before a joint venture partner is secured, we will work with other external professional firms in all material matters concerning our permit applications. In the event that no suitable joint venture partners can be found, we will continue with the land development projects mainly by relying on and supported by external professional firms. Based on the current timetable and progress, we do not foresee any immediate difficulties in the application process. We will continue to make timely announcements to keep shareholders informed about material developments.

As for our Wuxi plant, the factory building continues to be listed for sale.

The current headcount of our Group is 61 and we believe that our overhead expenses are under control. We currently derive a majority of our income from rental and interest income. Any future reductions in the official cash deposit interest rates in China and Hong Kong could adversely impact our income. As of March 31, 2015, total cash was $298 million. As a result of our cash position, we believe our finances remain healthy to fund the initial stages of these property development projects in the next two to three years. All our land development related applications are subject to government policies and regulations in the real estate market. However, this is our first venture into the land development projects after the cessation of the LCM business, and we may encounter industry-specific difficulties that result in losses as we progress with our projects in Shenzhen. For more information on risks in our business, please refer to the Risk Factors section of the 2014 Form 20-F as filed with the SEC and on our website.

The information contained in or that can be accessed through the website mentioned in this announcement does not form part of this announcement.

SHARE REPURCHASE PROGRAM UPDATE

The stock repurchase program previously announced on May 7, 2014 was completed on November 28, 2014. The share repurchase has been conducted in accordance with Rule 10b-18 of the Securities and Exchange Act of 1934. During this 6-month period, we have bought back a total of 2,669,413 common stocks from the open market for a total consideration of $17.6 million (represents an average price of $6.56 per share). The $40.0 million loan from HSBC to finance the share repurchase program will be repaid in May 2015 upon maturity.

APPOINTMENT OF CHIEF FINANCIAL OFFICER

Effective May 1, 2015, Mr. Shan-Nen Bong ("Mr. Bong"), will be appointed as Chief Financial Officer of the Company. Mr. Bong joined Nam Tai as VP of Finance and Administration since October 2014 and has familiarized himself with the finance and operations of Nam Tai Group. Mr. Bong has previously worked in one of the Big-4 accounting firms for 17 years in Singapore, New Zealand, San Jose (USA) and Beijing, and was an audit partner for the last 2.5 years at that firm before agreeing to join the Company.

Mr. Bong is a member of Institute of Chartered Accountants in England and Wales, Hong Kong Institute of Certified Public Accountants and Chartered Accountants Australia and New Zealand. The Board of Directors is confident that Mr. Bong can take the position of Chief Financial Officer to support the continuous growth of the Company.

PAYMENT OF QUARTERLY DIVIDENDS FOR 2014 and 2015

As announced on December 19, 2014, the Company has set the payment schedule of quarterly dividends for 2015. The dividend for Q2 2015 was paid on April 20, 2015.

The following table updates the previously announced schedule for declaration and payment of quarterly dividends in 2015.

The Company's decision to continue dividend payments in 2015 as set out and confirmed in the above table does not necessarily mean that cash dividend payments will continue thereafter. Whether future dividends after 2015 are to be declared will depend upon Company's future growth and earnings at each relevant period, of which there can be no assurance, and the Company's cash flow needs for business transformation. Accordingly, there can be no assurance that cash dividends on the Company's common shares will be declared beyond those declared for 2015, and we also cannot assure you what the amounts of such dividends will be or whether such dividends, once declared for a specific period, will continue for any future period, or at all.

PROPOSED SCHEDULE OF RELEASE OF QUARTERLY FINANCIAL RESULTS FOR 2015

To maintain the efficiency of delivering the Company's quarterly financial results to the market, the Company's management has decided to follow approximately the same schedule of 2014 to release the quarterly financial results for 2015. Details of the expected quarterly release dates are as follows:

ANNUAL GENERAL MEETING

The 2015 Annual General Meeting ("AGM") has been scheduled to be held on Friday, June 5, 2015 at 11:30 a.m. (China Standard Time) at the Company's Shenzhen offices in the location of Namtai Industrial Estate East , 2 Namtai Road, Gushu, Xixiang, Baoan District, Shenzhen, People's Republic of China. The record date for determining shareholders entitled to vote at its annual meeting was April 24, 2015 and the proxy materials will be released to shareholders on April 30, 2015.

FORWARD-LOOKING STATEMENTS AND FACTORS THAT COULD CAUSE OUR SHARE PRICE TO DECLINE

Certain statements included in this press release, other than statements of historical fact, are forward-looking statements. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "may", "will", "expect", "intend", "estimate", "anticipate", "plan", "seek" or "believe". These forward-looking statements, which are subject to risks, uncertainties, and assumptions, may include projections of our future financial performance based on our growth strategies and anticipated trends in our business. These statements are only predictions based on our current expectations about future events. There are important factors that could cause our actual results, level of activity, performance, or achievements to differ materially from the results, level of activities, performance, or achievements expressed or implied by the forward-looking statements, including, but not limited to, delay in the Company's ability to obtain all requisite permits and approvals from relevant government authorities in relation to the redevelopment of two parcels of properties in Gushu, Shenzhen, and Guangming, Shenzhen, respectively, and the successfully redevelopment of the two parcels of properties; the sufficiency of the Company's cash position and other sources of liquidity to fund its property developments; continued inflation and appreciation of the Renminbi against the US dollar; rising labor costs in China and changes in the labor supply and labor relations. In particular, you should consider the risks outlined under the heading "Risk Factors" in our most recent Annual Report on Form 20-F and in our Current Report filed from time to time on Form 6-K. The Company's decision to continue dividend payments in 2015 does not necessarily mean that dividend payments will continue thereafter. Whether future dividends will be declared depend upon the Company's future growth and earnings, of which there can be no assurance, as well as the Company's cash flow needs for further expansion. Accordingly, there can be no assurance that cash dividends on the Company's common shares will be declared beyond those declared for 2015, what amount those dividends may be or whether such dividends, once declared for a specific period, will continue for any future period, or at all; and whether we will purchase any of our shares in the open markets or otherwise. Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance, or achievements. You should not rely upon forward-looking statements as predictions of future events. These forward-looking statements apply only as of the date of this press release; as such, they should not be unduly relied upon as circumstances change. Except as required by law, we are not obligated, and we undertake no obligation, to release publicly any revisions to these forward-looking statements that might reflect events or circumstance occurring after the date of this release or those that might reflect the occurrence of unanticipated events.

ABOUT NAM TAI PROPERTY INC.

Upon the cessation of our LCM manufacturing business in April 2014, we formally transformed our core business from the EMS industry to property development and management. We currently focus our efforts on redeveloping two parcels of land in Gushu and Guangming, Shenzhen, China, by converting these two parcels of land into high-end commercial complexes. Subsequently, we believe our principal income in the future will be derived from the rental income from the commercial complexes.

Nam Tai Property Inc. is a corporation registered in the British Virgin Islands and listed on the New York Stock Exchange (Symbol: "NTP").

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