Jinpan International Reports Second Quarter 2012 Financial Results
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.
Investor Contact Information
:
|
At Jinpan International Ltd.:
Mark Du
Chief Financial Officer
(201) 460-8778
|
|
At ICR, Inc.:
In U.S.
Bill Zima
(646) 308-1630
|
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
|
|
|
11,147
|
|
|
|
19,114
|
|
|
Accounts receivable, net
|
|
|
121,716
|
|
|
|
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 Term Loan
|
|
|
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
|
|