JST Jinpan International Limited

- 1Q09 Net Sales Increases 36.1% to $ 32.4 Million Compared to 1Q08 - ENGLEWOOD CLIFFS, N.J., May 15 /PRNewswire-FirstCall/ -- Jinpan International Ltd (NASDAQ:JST), a leading designer, manufacturer and distributor of cast resin transformers for voltage distribution equipment, today announced consolidated financial results for the first quarter ended March 31, 2009. Net sales for the first quarter were $32.4 million, a 36.1% increase from $23.8 million over the same period last year. Growth in net sales was fueled by both a sizeable increase of international orders, which include wind energy products and non-wind related cast resin transformers as well as from increased domestic cast resin sales orders. In the first quarter, net sales outside of China increased 485% to $8.0 million, or 25% of net sales, compared to $1.65 million, or 6.9% of net sales in the same period last year. First quarter domestic sales increased 10.2% to $24.4 million from $22.2 million in the prior year period. Cast resin transformers (excluding those for wind power applications), switch gears and unit substations represented $25.9 million, or 80% of net sales in the first quarter, while wind energy products represented $6.5 million, or 20% of net sales in the first quarter. Gross margin in the first quarter was $11.7 million, a 56% increase from $7.5 million, in the same period last year. First quarter gross margin increased to 36.2% compared to 31.3% in the same period last year. The Company benefited from a lower cost of sales on an absolute basis due to lower raw material prices compared to the same period last year. Selling, general and administrative expenses in the first quarter were $6.2 million, or 19.2% of net sales, versus $4.5 million, or 18.8% of net sales in the same period last year. Selling, general, and administrative expenses increased primarily due to additional overhead costs at the Company's Wuhan and Shanghai facilities, which were not operating during the same period last year. Operating income increased to $5.5 million, or 16.9% of net sales, an 83.5% increase compared to $3.0 million, or 12.6% of net sales in the same period last year. Net income for the first quarter was $4.7 million, or $0.58 per diluted share, increased 94.9% compared with $2.4 million or $0.30 per diluted share, in the same period last year. First quarter net income as a percentage of net sales was 14.4% as compared to 10.1% in the same period last year. Mr. Zhiyuan Li, Chief Executive Officer of Jinpan commented, "We are off to a good start in what is traditionally one of our slower quarters of the year. We are pleased to see a substantial increase in orders from our international business segment in the first quarter. Our international customers are placing orders for cast resin transformers for wind power applications as well as transformers for more traditional power generation applications used in urban (trains & subways, hospitals, airports, office buildings), industrial (factories), and commercial developments (processing plants, data centers). We expect a steady rise in international demand in 2009 as we continue to garner attention and receive orders from some of the largest, most prominent electrical equipment OEMs in the industry. We expect international sales to account for a greater portion of our total sales in 2009 than 2008. We are pleased to see that a substantial portion of China's $585 billion economic stimulus plan will be allocated to the infrastructure development projects. We believe that we are well positioned to benefit from the stimulus package As such, we are taking the necessary steps to ensure we have an appropriate level of capacity to meet demand over the next several quarters and well into the future. Our newest operational facility in Wuhan, which currently manufactures our standard cast resin transformers will be outfitted to maximize capacity by the end of 2009 while our Shanghai manufacturing facility is also expected to be completed in the third quarter of 2009. Once completed, this facility will house all of our wind related products. We are making steady progress in our business. We believe that we are well positioned to capitalize on current challenging market conditions, penetrate new markets, and expand our market share in the electrical equipment market. We have a strong balance sheet, a healthy cash position, manageable debt and the right strategic plan to sustain ably manage our business for growth this year and beyond. We look forward to capitalizing on our opportunities and enhancing value for our shareholders," concluded Mr. Li. Financial Outlook For the full year 2009, the Company currently anticipates net sales of approximately $176 million to $182 million, a 14% to 18% increase over 2008 sales of $154 million. The Company anticipates net income of approximately $22.5 million to $23.3 million, a 14% to 18% increase over 2008 net income of $19.8 million. The Company anticipates diluted earnings per share for 2009 to be $2.75 to $2.85 per share. Conference Call Information Jinpan's management will host an earnings conference call today, May 15, 2009 at 8:30 a.m. U.S. Eastern Standard Time. Listeners may access the call by dialing #1-913-981-5567. A webcast will also be available via the Company's website at http://www.jstusa.net/ or at http://www.viavid.net/. A replay of the call will be available through May 29, 2009. Listeners may access the replay by dialing #1-719-457-0820, access code: 7695004. About Jinpan International Ltd Jinpan International Ltd. (NASDAQ:JST) designs, manufactures and distributes cast resin transformers for voltage distribution equipment in China and other countries around the world. Jinpan's cast resin transformers allow high voltage transmissions of electricity to be distributed to various locations at lower, more usable voltage levels. The Company has obtained ISO9001 and ISO1401 certification of its cast resin transformers. Its principal executive offices are located in Hainan, China and its U.S. headquarters is based in Englewood Cliffs, New Jersey. Safe Harbor Provision This press release contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management's current expectations and observations and involve known and unknown risks, and uncertainties or other factors not under the Company's control, which may cause actual results, performance or achievements of the company to be materially different from the results, performance or other expectations implied by these forward-looking statements. These factors include, but are not limited to, the following: -- our ability to successfully implement our business strategy; -- the impact of existing and new competitors in the markets in which we compete, including competitors that may offer less expensive products and services, more desirable or innovative products or technological substitutes, or have more extensive resources or better financing; -- the effects of rapid technological changes and vigorous competition in the markets in which we operate; -- uncertainties about the future growth in electricity consumption and infrastructure development in the markets in which we operate; -- uncertainties about the degree of growth in the number of consumers in the markets in which we operate using mobile personal communications services and the growth in the population in those areas; -- other factors or trends affecting the industry generally and our financial condition in particular; -- the effects of the higher degree of regulation in the markets in which we operate; -- general economic and political conditions in the countries in which we operate or other countries which have an impact on our business activities or investments; -- the monetary and interest rate policies of the countries in which we operate; -- changes in competition and the pricing environments in the countries in which we operate; -- exchange rates; and -- other factors listed from time-to-time in our filings with the Securities and Exchange Commission, including, without limitation, our Annual Report on Form 20-F for the period ended December 31, 2007 and our subsequent reports on Form 6-K. Except as required by law, we are not under any obligation, and expressly disclaim any obligation, to update or alter any forward-looking statements, whether as a result of new information, future events or otherwise. Jinpan International Limited and Subsidiaries Consolidated Statements of Income (unaudited) Three months ended March 31 2009 2008 (In thousands, except per share data) US$ US$ Net sales 32,387 23,798 Cost of Goods Sold (20,672) (16,339) Gross Margin 11,715 7,459 Operating Expenses Selling and administrative (6,230) (4,470) Operating income 5,485 2,989 Interest Expenses (105) (179) Other Income 51 183 Income before income taxes 5,431 2,993 Income taxes (753) (593) Net income after taxes 4,678 2,400 Earnings per share -Basic US$0.58 US$0.30 -Diluted US$0.58 US$0.30 Weighted average number of shares -Basic 7,998,325 7,984,147 -Diluted 8,017,528 8,117,923 Jinpan International Limited and Subsidiaries Consolidated Balance Sheets (unaudited) March 31, December 31, 2009 2008 US$ US$ Assets Current assets: Cash and cash equivalents 14,922 16,739 Accounts receivable, net 61,276 58,793 Inventories 30,042 31,868 Prepaid expenses 7,001 4,713 Other receivables 5,224 7,317 Total current assets 118,465 119,430 Property, plant and equipment, net 18,430 18,213 Construction in progress 6,326 6,055 Land use right 6,080 6,098 Intangible asset-Goodwill 12,328 12,348 Deferred tax assets 293 301 Total assets 161,922 162,445 Liabilities and Shareholders' Equity Current liabilities: Short term bank loans 11,158 11,726 Accounts payable 11,051 11,300 Income tax 2,835 3,671 Advance from customers 8,128 7,828 Other Payable 17,933 20,733 Total current liabilities 51,105 55,258 Shareholders' equity: Common stock, US$0.009 par value: Authorized shares - 20,000,000 Issued and outstanding shares - 8,209,684 in 2009 and 8,189,684 in 2008 74 73 Common Stock, Warrants 854 854 Convertible preferred stock, US$0.009 par value: Authorized shares - 1,000,000 Issued and outstanding shares - 3,044 in 2008 and 2009 - - Additional paid-in capital 34,164 34,035 Reserves 3,906 3,906 Retained earnings 64,004 60,296 Accumulated other comprehensive income 8,604 8,812 111,606 107,976 Less: Treasure shares at cost, common stock-206,470 in 2009 and 206,470 in 2008 (789) (789) Total shareholders' equity 110,817 107,187 Total liabilities and shareholders' equity 161,922 162,445 Jinpan International Limited and Subsidiaries Consolidated Statements of Cash Flows (Unaudited) Three months ended March 31, 2009 2008 US$ US$ Operating activities Net income 4,678 2,400 Adjustments to reconcile net income to net cash provided by/(used in) operating activities: Depreciation 874 360 Provision for Doubtful Debt (4) - Loss/(Gain) on disposal of fixed assets - - Deferred Income Tax 7 20 Stock-based compensation cost 102 Changes in operating assets and liabilities Accounts receivable (2,576) (2,391) Notes receivable 1,551 (7) Inventories 1,776 (6,351) Prepaid expenses (2,298) 1,430 Other receivables 532 172 Accounts payable (231) (597) Income tax (831) (104) Advance from customers 313 891 Other liabilities (2,769) (336) Net cash provided by/(used in) operating activities 1,124 (4,513) Investing activities Purchases of property, plant and equipment (1,113) (258) Proceeds from sales of property, plant and equipment - - Payment for construction in progress (280) (726) Purchase of available-for -sales securities - (1,956) Net cash provided by (used in) investing activities (1,393) (2,940) Financing activities Proceeds from bank loan 2,380 4,434 Repayment of bank loan (2,929) (2,281) Proceeds from exercise of stock options 27 - Decrease in Minority Interest - - Acquired minority interest - - Dividends paid (970) (967) Net cash provided by/(used in) financing activities (1,492) 1,186 Effect of exchange rate changes on cash (56) 139 Net increase/(decrease) in cash and cash equivalents (1,817) (6,128) Cash and cash equivalents at beginning of year 16,739 17,122 Cash and cash equivalents at end of year 14,922 10,994 Interest paid 112 292 Income taxes paid 1,522 686 DATASOURCE: Jinpan International Ltd CONTACT: Mark Du, Chief Financial Officer of Jinpan International Ltd., +1-201-227-0680, or U.S., Brian M. Prenoveau, CFA, +1-203-682-8200, China, William Zima, +86 10 6599 7969, both of ICR, Inc. for Jinpan International Ltd Web Site: http://www.jstusa.net/

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