JST Jinpan International Limited

CARLSTADT, N.J., March 10, 2014 /PRNewswire/ -- Jinpan International Limited (Nasdaq: JST), a leading designer, manufacturer, and distributor of cast resin transformers, today reported unaudited consolidated financial results for the fourth quarter and full year ending December 31, 2013. 

Fourth Quarter 2013 Results

Net sales for the fourth quarter were $63.1 million, an 18.2% increase from $53.4 million in the same period last year.  The increase was driven by robust growth in the Chinese market and a strong recovery in international sales.  In the fourth quarter, China sales increased 18.7% year-over-year to $57.5 million, or 91.1% of net sales, compared to $48.5 million, or 90.8% of net sales in the same period last year. Net sales outside of China for the quarter increased 14.3% year-over-year to $5.6 million, or 8.9% of net sales, compared to $4.9 million, or 9.2% of net sales for the same period last year.

The sales of cast resin and VPI transformers (excluding those for wind power applications), switchgears and unit substations increased 17.2% year-over-year to $58.5 million, or 92.7% of net sales in the fourth quarter, while wind energy products (cast resin transformers and VPI reactors for wind power applications) represented $4.6 million, or 7.3% of net sales during this quarter.

Gross profit in the fourth quarter increased 27.2% year over year to $20.7 million from $16.3 million in the same period last year.  Fourth quarter 2013 gross profit margin was 32.9%, compared to 30.5% in the prior year period. Gross margin in the fourth quarter increased compared to the same period last year due to a stabilized pricing environment and favorable raw material costs.

Selling and administrative expenses in the fourth quarter were $18.5 million, or 29.3% of net sales, compared to $14.0 million, or 26.2% of net sales in the same period last year.  Selling and administrative expenses increased from the same period last year due to higher sales volume and increased research and development expenses, which were abnormally low in the prior year period.

Operating income for the fourth quarter decreased 4.8% to $2.2 million, or 3.5% of net sales, from $2.3 million, or 4.4% of net sales, in the same period last year.

Net income for the fourth quarter increased 6.2% to $4.1 million, or $0.24 per diluted share, compared to $3.8 million, or $0.23 per diluted share, in the same period last year.  Fourth quarter net income, as a percentage of net sales, was 6.4% compared to 7.2% in the same period last year.

Full Year 2013 Results

Net sales for the full year 2013 were $225.7 million, a 7.2% increase from $210.5 million last year.  Gross profit in 2013 increased 5.3% to $72.4 million and gross profit margin decreased to 32.1%, compared to 32.7% during 2012.  Selling and administrative expenses were $55.7 million, compared to $53.9 million last year. The Company reclassified installation service fees of $4.4 million from selling expense to cost of goods sold for the year 2013.  Operating profit in 2013 increased 12.1% to $16.7 million, or 7.4% of net sales, compared to $14.9 million, or 7.1% of net sales, last year.  Net income in 2013 increased 17.8% to $16.6 million, or $0.99 per share, compared to $14.1 million, or $0.84 per share, in the prior year.

Mr. Zhiyuan Li, Chief Executive Officer of Jinpan International, stated, "We are pleased with our accomplishments during 2013, which translated into a return to growth and operating margin expansion for the year.  Our team's exceptional execution on the ramp-up of production at our new Guilin facility enabled us to achieve record annual sales and has put us on a path for continued revenue and earnings growth."

"We remain focused on the disciplined execution of our growth strategy.  We believe the key factors are in place to drive sustainable demand for our products within our core electrical infrastructure sector as well as within renewable energy sectors such as wind power and utility-scale solar.  Looking ahead, we anticipate steady demand from the domestic market and are making good progress with our international OEM customers.  Our optimism about our growth outlook is reflected by the Board of Directors' recent decision to increase our quarterly dividend." 

"At the end of December, our backlog equaled $100 million, down 27.5% from the prior year period and down 4.8% from the third quarter of 2013.  The increased production of standardized cast resin transformers from our Guilin facility has accelerated our average cycle time and enabled us to convert orders into revenue more quickly.  This is reflected by our record level of inventory turnover for 2013.  We are comfortable with our backlog and expect it to gradually increase from these levels as our business expands."

Balance Sheet

As of December 31, 2013, the Company had $30.8 million in cash and cash equivalents, restricted cash, and short term investments, compared to $30.5 million as of December 31, 2012. The Company's accounts receivable on December 31, 2013 totaled $144.6 million, compared to $124.6 million as of December 31, 2012.   Total bank loans outstanding at December 31, 2013 were $43.1 million, compared to $43.9 million at December 31, 2012. 

Financial Outlook

For the full year 2014, the Company projects revenue and earnings growth of approximately 10% to 15% compared to 2013.  Net sales are expected to be in the range of $248 million to $260 million and net income is expected to be in the range of $18.2 million to $19.1 million, or $1.09 to $1.14 per share.

Conference Call Information

Jinpan's management will host a conference call and webcast on Monday, March 10, 2014, at 4:30 p.m. Eastern Time.  Listeners may access the call by dialing 1-888-230-5498 (toll free) or 1-913-905-3226 (international).  A webcast will also be available via http://public.viavid.com, with event ID: 108065.  A replay of the call will be available through March 24, 2014, by dialing 1-877-870-5176, access code 9355802. 

ABOUT JINPAN INTERNATIONAL

Jinpan International Limited (NASDAQ: JST) designs, manufactures, and markets electrical control and distribution equipment used in demanding industrial applications, utility projects, renewable energy installations, and infrastructure projects.  Major products include cast resin transformers, VPI transformers and reactors, switchgears, and unit substations.  Jinpan serves a wide range of customers in China and reaches international markets as a qualified supplier to leading global industrial electrical equipment manufacturers. Jinpan's four manufacturing facilities in China are located in the cities of Haikou, Wuhan, Shanghai and Guilin.  The Company's manufacturing facilities in China comprise the largest cast resin transformer production capacity in that country. The Company was founded in 1993.  Its principal executive offices are located in Haikou, Hainan, China and its United States office is based in Carlstadt, New Jersey.  For more information, visit www.jinpaninternational.com. 

Safe Harbor Regarding Forward Looking Statements

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, 2012 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.

FINANCIAL STATEMENTS FOLLOW:

SOURCE Jinpan International