CARLSTADT, N.J., Aug. 14, 2012 /PRNewswire/ -- Jinpan
International Ltd. (NASDAQ: JST), a leading designer, manufacturer,
and distributor of cast resin transformers, today announced the
unaudited consolidated financial results for the second quarter
ended June 30, 2012.
Second Quarter 2012 Results
Net sales for the second quarter were $55.5 million, a 4.7% decrease from $58.3 million in the same period last year.
The decrease in sales was primarily the result of decreased
international sales. In the second quarter, domestic sales
accounted for $51.2 million, or 92.3%
of net sales, compared to $46.1
million, which also represented 79.1% of net sales in the
same period last year. Net sales outside of China for the quarter were $4.3 million, or 7.7% of net sales compared to
$12.2 million, or 20.9% of net sales
for the same period last year.
The sales of cast resin transformers (excluding those for wind
power applications), switchgears and unit substations represented
$48.6 million, or 87.6% of net sales
in the second quarter, while wind energy products (cast resin
transformers and VPI products for wind power applications)
represented $6.9 million, or 12.4% of
net sales during this quarter.
Gross profit in the second quarter decreased 23.0% year over
year to $17.1 million from
$22.2 million in the same period last
year. Second quarter 2012 gross profit margin was 30.8%,
compared to 38.1% in the prior year period, and 36.9% in the 2012
first quarter. Gross margin decreased in the second quarter due to
lower product prices, resulting from a competitive pricing
environment, and a higher ratio of standard to customized products
sold.
Selling and administrative expenses in the second quarter were
$14.2 million, or 25.6% of net sales,
compared to $13.8 million, or 23.7%
of net sales in the same period last year. Selling
expenses increased in the second quarter due to higher commissions
resulting from increased sales in China. Compared with international sales, the
Company pays more commission per dollar of sales in China, because it employs a direct market
strategy in China whereas
international sales are comprised mostly of large orders from
several OEMs. Administrative expenses also increased due to
increased salary expenses resulting from the Company's
implementation of its expansion plans.
Operating income for the second quarter decreased 65.4% to
$2.9 million, or 5.3% of net sales,
from $8.4 million, or 14.5% of net
sales, in the same period last year. Net income for the second
quarter decreased 67.6% to $2.4
million, or $0.14 per diluted
share, from $7.3 million, or
$0.44 per diluted share, in the same
period last year. Second quarter net income as a percentage
of net sales was 4.2% compared to 12.5% in the same period last
year.
Mr. Zhiyuan Li, Chief Executive
Officer of Jinpan, commented, "Our results were generally in line
with our preliminary results announced in the first half of July.
As reported earlier, our business in the second quarter was
negatively impacted by a change in the design of wind power
products by our primary OEM customer, resulting in decreased
international sales. We were also impacted by weaker than
expected domestic orders in China
due to a softer economic environment."
"In our international business, we continue to work closely with
our major OEM customer on new product specifications and design so
they can be integrated into the new wind power cast resin
transformer products we will manufacture for this customer.
We expect a portion of our export sales shortfall to be
offset by increased orders from our two other OEM customers in the
second half of the year resulting in international sales to be
equal or slightly less than last year."
"In our domestic business, despite the softer economic
environment, we continue to manufacture our cast resin transformer
products for many sizeable infrastructure projects and continue to
receive a steady flow of new orders. At the end of July, we
had a backlog of approximately $115
million, of which we expect approximately 70% to 80% of this
backlog to be shipped in 2012, setting us up for an improved second
half. While we are adjusting our full year forecast to
reflect reduced domestic order activity in July, we remain
confident in our long term growth trajectory and will continue
towards the goal of developing Jinpan into a leading, world class
cast resin transformer manufacturer."
Balance Sheet
As of June 30, 2012, the Company
had $26.0 million in cash and cash
equivalents, compared to $24.2
million at December 31, 2011.
The Company's accounts receivable on June
30, 2012 totaled $121.7
million, compared to $110.4
million at December 31,
2011. Notes payable in the 2012 second quarter decreased to
$6.0 million compared to $13.6 million on December
31, 2011. Total bank loans outstanding at June 30, 2012 increased to $45.3 million as compared to $23.0 million at December
31, 2011. During the second quarter, the Company increased
$7.9 million long term loan that
related to the construction of its Guilin manufacturing
facility.
Financial Outlook
For the full year 2012, the Company currently anticipates net
sales of $208-$219 million, a
decrease of 0% to 5% compared to 2011, net income of $15.5-$16.5 million, a decrease of 30% to 35%
compared to 2011, and gross profit margin of approximately 33% to
34% of net sales.
Conference Call Information
Jinpan's management will host an earnings conference call on
August 14th, 2012 at 8:30 a.m. U.S. Eastern Time. Listeners may
access the call by dialing #1-913-312-1396. A webcast will
also be available via www.viavid.net. A replay of the call
will be available through August
28th, 2012. Listeners may access the replay by dialing
#1-858-384-5517, access code: 2445315.
About Jinpan International Ltd
Jinpan International Ltd. (NASDAQ: JST) designs, manufactures,
and markets cast resin transformers for power distribution and wind
energy products. Jinpan's cast resin transformers allow high
voltage transmissions of electricity to be distributed to various
locations in lower, more usable voltages. The Company has obtained
ISO9001 and ISO14001 certifications for its cast resin
transformers. Its principal executive offices are located in
Hainan, China and its United States office is based in Carlstadt, 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 are
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, 2011 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)
For the Three and Six Month Periods Ended June 30, 2012
|
Three
months
ended
June
30
|
Three
months
ended
June
30
|
Six
months
ended
June
30
|
Six
months
ended
June
30
|
|
|
2012
|
2011
|
2012
|
2011
|
(In
thousands, except per share data)
|
|
US$
|
US$
|
US$
|
US$
|
|
|
|
|
|
|
Net
sales
|
|
55,529
|
58,270
|
98,283
|
88,153
|
Cost of
Goods Sold
|
|
(38,418)
|
(36,040)
|
(65,410)
|
(54,965)
|
Gross
Margin
|
|
17,111
|
22,230
|
32,873
|
33,188
|
|
|
|
|
|
|
Operating
Expenses
|
|
|
|
|
|
Selling and administrative
|
|
(14,188)
|
(13,785)
|
(25,103)
|
(21,567)
|
Operating
income
|
|
2,923
|
8,445
|
7,770
|
11,621
|
|
|
|
|
|
|
Interest
Expenses
|
|
(627)
|
(272)
|
(1,086)
|
(447)
|
Other
Income
|
|
364
|
228
|
579
|
510
|
Income
before income taxes
|
|
2,660
|
8,401
|
7,263
|
11,684
|
|
|
|
|
|
|
Income
taxes
|
|
(302)
|
(1,125)
|
(941)
|
(1,667)
|
Net
income
|
|
2,358
|
7,276
|
6,322
|
10,017
|
|
|
|
|
|
|
Earnings
per share
|
|
|
|
|
|
|
|
|
|
|
|
-Basic
|
|
US$0.15
|
US$0.45
|
US$0.39
|
US$0.62
|
|
|
|
|
|
|
-Diluted
|
|
US$0.14
|
US$0.44
|
US$0.39
|
US$0.61
|
|
|
|
|
|
|
Weighted
average number of shares
|
|
|
|
|
|
|
|
|
|
|
|
-Basic
|
|
16,164,487
|
16,253,494
|
16,164,487
|
16,253,494
|
|
|
|
|
|
|
-Diluted
|
|
16,522,898
|
16,469,879
|
16,400,668
|
16,525,324
|
|
|
|
|
|
|
|
|
|
|
|
|
Jinpan International Limited and Subsidiaries
Consolidated Balance Sheets
|
|
Unaudited
|
|
Audited
|
|
|
|
June
30,
|
|
December
31,
|
|
|
|
2012
|
|
2011
|
|
|
|
US$
|
|
US$
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
26,005
|
|
24,218
|
|
Restricted cash
|
|
19
|
|
322
|
|
Notes receivable
Accounts receivable, net
|
|
11,147
121,716
|
|
19,114
110,382
|
|
Inventories
|
|
44,910
|
|
36,675
|
|
Prepaid expenses
|
|
10,183
|
|
13,251
|
|
Other receivables
|
|
6,354
|
|
3,878
|
|
|
|
|
|
|
|
Total
current assets
|
|
220,334
|
|
207,840
|
|
|
|
|
|
|
|
Property,
plant and equipment, net
|
|
40,123
|
|
37,102
|
|
|
|
|
|
|
|
Construction in progress
|
|
6,173
|
|
2,406
|
|
|
|
|
|
|
|
Land use
right
|
|
15,282
|
|
15,523
|
|
Intangible
asset-Goodwill
|
|
13,320
|
|
13,371
|
|
Other
assets
|
|
81
|
|
76
|
|
Deferred
tax assets
|
|
1,153
|
|
1,044
|
|
|
|
|
|
|
|
Total
assets
|
|
296,466
|
|
277,362
|
|
|
|
|
|
|
|
Liabilities and Shareholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
Short term bank loans
|
|
35,853
|
|
21,426
|
|
Accounts payable
|
|
24,252
|
|
22,833
|
|
Notes Payable
|
|
5,956
|
|
13,611
|
|
Tax Payable
|
|
1,516
|
|
2,335
|
|
Advance from customers
|
|
14,399
|
|
12,642
|
|
Other Payable
|
|
16,956
|
|
22,072
|
|
|
|
|
|
|
|
Total
current liabilities
|
|
98,932
|
|
94,919
|
|
|
|
|
|
|
|
Long
TermLoan
|
|
9,423
|
|
1,550
|
|
Deferred
Income
|
|
2,643
|
|
|
|
Shareholders' equity:
|
|
|
|
|
|
|
|
|
|
|
|
Common stock, US$0.0045 par value:
|
|
|
|
|
|
Authorized shares - 40,000,000
|
|
|
|
|
|
Issued and outstanding shares – 16,395,456 in
2011
and 2010
|
|
74
|
|
74
|
|
Common Stock, Warrants
|
|
-
|
|
854
|
|
Convertible preferred stock, US$0.0045 par
value:
|
|
|
|
|
|
Authorized shares – 2,000,000
|
|
|
|
|
|
Issued and outstanding shares –none in
2012
and 2011
|
|
-
|
|
-
|
|
Additional paid-in capital
|
|
37,079
|
|
36,114
|
|
Reserves
|
|
12,023
|
|
12,023
|
|
Retained earnings
|
|
117,106
|
|
111,915
|
|
Accumulated other comprehensive income
|
|
19,644
|
|
20,392
|
|
|
|
185,926
|
|
181,372
|
|
Less: Treasury shares at cost, common stock-215,306 in 2012
and 227,306 in 2011
|
|
(458)
|
|
(479)
|
|
Total
shareholders' equity
|
|
185,468
|
|
180,893
|
|
|
|
|
|
|
|
Total
liabilities and shareholders' equity
|
|
296,466
|
|
277,362
|
|
Jinpan International Limited and Subsidiaries
Consolidated Statements of Cash Flows
For the Six Months Ended June 30,
2012 (Unaudited)
|
Six months
ended June 30
|
Six months
ended June 30
|
|
2012
|
2011
|
Operating
activities
|
|
|
Net income
|
6,322
|
10,017
|
Adjustments to reconcile net income to
|
|
|
net cash provided by/(used in) operating
activities:
|
|
|
Depreciation
|
2,080
|
2,067
|
Provision for Doubtful Debt
|
973
|
163
|
Loss/(Gain) on disposal of fixed assets
|
(4)
|
-
|
Deferred Income Tax
|
(114)
|
55
|
Deferred Income
|
2,649
|
-
|
Stock-based compensation
cost
|
111
|
123
|
Changes in operating assets and
liabilities
|
|
|
Restricted cash
|
301
|
(384)
|
Accounts receivable
|
(12,747)
|
(18,809)
|
Notes receivable
|
7,910
|
(7,117)
|
Inventories
|
(8,390)
|
(10,681)
|
Prepaid expenses
|
3,024
|
(1,181)
|
Other receivables
|
(2,501)
|
(300)
|
Accounts payable
|
1,509
|
8,030
|
Notes Payable
|
(7,618)
|
(27,424)
|
Income tax
|
(812)
|
229
|
Advance from customers
|
1,808
|
4,888
|
Other liabilities
|
(5,105)
|
5,819
|
Net cash
provided by/(used in) operating activities
|
(10,604)
|
(34,505)
|
Investing
activities
|
|
|
Purchases of property, plant and equipment
|
(5,272)
|
(2,440)
|
Proceeds from sales of property, plant and
equipment
|
29
|
-
|
Payment for construction in progress
|
(3,783)
|
-
|
Long Term Prepaid
Lease
|
182
|
161
|
Net cash
provided by (used in) investing activities
|
(8,844)
|
(2,279)
|
Financing
activities
|
|
|
Proceeds from bank loan
|
37,412
|
18,815
|
Repayment of bank loan
|
(14,982)
|
(2,003)
|
Proceeds from exercise of stock options
|
21
|
-
|
Dividends paid
|
(1,129)
|
(1,139)
|
Net cash
provided by/(used in) financing activities
|
21,322
|
15,673
|
Effect of
exchange rate changes on cash
|
(87)
|
388
|
Net
increase/(decrease) in cash and cash equivalents
|
1,787
|
(20,723)
|
Cash and
cash equivalents at beginning of year
|
24,218
|
27,527
|
Cash and
cash equivalents at end of the period
|
26,005
|
6,804
|
|
|
|
Interest
paid
|
1,087
|
478
|
Income
taxes paid
|
1,959
|
1,196
|
SOURCE Jinpan International Ltd.