Jinpan International Reports Fourth Quarter and Full Year 2013 Financial Results
* Fourth quarter revenue increased 18.2% year-over-year to $63.1 million; Full year 2013 revenue increased 7.2% to a record $225.7 million
* Fourth quarter net income increased 6.2% year-over-year to $4.1 million, or $0.24 per share; Full year 2013 net income increased 17.8% to $16.6 million, or $0.99 per share
* Fiscal 2014 earnings outlook; net income expected to be in the range of $18.2 million to $19.1 million, or $1.09 to $1.14 per share, reflecting 10-15% growth
* In February 2014, Jinpan’s Board of Directors approved an increase in the Company’s quarterly dividend to $0.04 per common share
Carlstadt, N.J., March 10, 2014 - 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.
Investor Contact Information
:
|
At Jinpan International Ltd.:
Mark Du
Chief Financial Officer
(201) 460-8778
|
|
At Tobin Tao & Company, Inc.:
Mark Tobin
(949) 870-9778
jinpan@tobintao.com
|
FINANCIAL STATEMENTS FOLLOW:
Jinpan International Limited and Subsidiaries
Consolidated Statements of Comprehensive Income (unaudited)
For the Three and Twelve Month Periods Ended December 31, 2013
|
|
|
Three months ended
|
Twelve months ended
|
|
|
|
December 31
|
December 31
|
|
|
|
|
|
|
|
|
|
|
2013
|
2012
|
2013
|
2012
|
|
(In thousands, except per share data)
|
|
US$
|
US$
|
US$
|
US$
|
|
|
|
|
|
|
|
|
Net sales
|
|
63,148
|
53,422
|
225,727
|
210,537
|
|
Cost of Goods Sold
|
|
(42,399)
|
(37,112)
|
(153,325)
|
(141,747)
|
|
Gross Margin
|
|
20,749
|
16,310
|
72,402
|
68,790
|
|
|
|
|
|
|
|
|
Operating Expenses
|
|
|
|
|
|
|
Selling and administrative
|
|
(18,531)
|
(13,981)
|
(55,718)
|
(53,903)
|
|
Operating income
|
|
2,218
|
2,329
|
16,684
|
14,887
|
|
|
|
|
|
|
|
|
Interest Expenses
|
|
(731)
|
(325)
|
(2,072)
|
(1,766)
|
|
Other Income
|
|
2,781
|
2,287
|
4,636
|
3,223
|
|
Income before income taxes
|
|
4,268
|
4,291
|
19,248
|
16,344
|
|
|
|
|
|
|
|
|
Income taxes
|
|
(195)
|
(456)
|
(2,677)
|
(2,282)
|
|
Net income after taxes
|
|
4,073
|
3,835
|
16,571
|
14,062
|
|
|
|
|
|
|
|
|
Other comprehensive income (loss)
|
|
|
|
|
|
|
Foreign currency translation adjustment
|
|
(14)
|
(20)
|
(27)
|
(73)
|
|
Total comprehensive income
|
|
4,059
|
3,815
|
16,544
|
13,989
|
|
|
|
|
|
|
|
|
Earnings per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-Basic
|
|
US$ 0.25
|
US$ 0.24
|
US$ 1.02
|
US$ 0.87
|
|
|
|
|
|
|
|
|
-Diluted
|
|
US$ 0.24
|
US$ 0.23
|
US$ 0.99
|
US$ 0.84
|
|
|
|
|
|
|
|
|
Weighted average number of shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-Basic
|
|
16,230,165
|
16,170,107
|
16,230,165
|
16,170,107
|
|
|
|
|
|
|
|
|
-Diluted
|
|
16,631,378
|
16,701,657
|
16,711,192
|
16,717,277
|
Jinpan International Limited and Subsidiaries
Consolidated Balance Sheet
|
|
|
(Unaudited)
|
|
|
(Audited)
|
|
|
|
|
December 31, 2013
|
|
|
December 31, 2012
|
|
|
(In thousands, except number of shares and per share data)
|
|
US$
|
|
|
US$
|
|
|
Assets
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
24,582
|
|
|
|
18,510
|
|
|
Restricted cash
|
|
|
1,316
|
|
|
|
824
|
|
|
Short-term investment
|
|
|
4,920
|
|
|
|
11,137
|
|
|
Notes receivable
|
|
|
15,802
|
|
|
|
15,720
|
|
|
Accounts receivable, net
|
|
|
144,606
|
|
|
|
124,608
|
|
|
Inventories, net
|
|
|
33,614
|
|
|
|
29,565
|
|
|
Prepaid expenses
|
|
|
4,204
|
|
|
|
2,528
|
|
|
Land use right
|
|
|
367
|
|
|
|
366
|
|
|
Deferred tax assets
|
|
|
2,119
|
|
|
|
1,339
|
|
|
Other receivables
|
|
|
6,891
|
|
|
|
5,900
|
|
|
Total current assets
|
|
|
238,421
|
|
|
|
210,497
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net
|
|
|
75,601
|
|
|
|
41,361
|
|
|
Construction-in-progress
|
|
|
3,787
|
|
|
|
29,196
|
|
|
Land use right
|
|
|
14,850
|
|
|
|
14,760
|
|
|
Goodwill
|
|
|
13,818
|
|
|
|
13,403
|
|
|
Other assets
|
|
|
90
|
|
|
|
32
|
|
|
Deferred tax assets
|
|
|
34
|
|
|
|
34
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
|
346,601
|
|
|
|
309,283
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and shareholders' equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term bank loans
|
|
|
11,101
|
|
|
|
17,644
|
|
|
Accounts payable
|
|
|
27,013
|
|
|
|
25,029
|
|
|
Notes Payable
|
|
|
10,498
|
|
|
|
6,008
|
|
|
Income tax payable
|
|
|
2,516
|
|
|
|
1,880
|
|
|
Advances from customers
|
|
|
14,207
|
|
|
|
13,624
|
|
|
Other liabilities
|
|
|
30,339
|
|
|
|
22,844
|
|
|
Total current liabilities
|
|
|
95,674
|
|
|
|
87,029
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
Long term liability:
|
|
|
|
|
|
|
|
|
|
Deferred Income
|
|
|
4,785
|
|
|
|
3,080
|
|
|
Long Term bank loans
|
|
|
31,998
|
|
|
|
26,315
|
|
|
Total Liabilities
|
|
|
132,457
|
|
|
|
116,424
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' equity:
|
|
|
|
|
|
|
|
|
|
Convertible preferred stock, US$0.0045 par value:
|
|
|
|
|
|
|
|
|
|
Authorized shares - 2,000,000
|
|
|
|
|
|
|
|
|
|
Issued and outstanding shares – none in 2012 and 2011
|
|
|
-
|
|
|
|
-
|
|
|
Common stock, US$0.0045 par value:
|
|
|
|
|
|
|
|
|
|
Authorized shares – 40,000,000
|
|
|
|
|
|
|
|
|
|
Issued and outstanding shares –16,415,456 in 2013 and 16,395,456 in 2012
|
|
|
74
|
|
|
|
74
|
|
|
Common stock-warrants
|
|
|
-
|
|
|
|
-
|
|
|
Additional paid-in capital
|
|
|
37,726
|
|
|
|
37,374
|
|
|
Reserves
|
|
|
12,849
|
|
|
|
12,023
|
|
|
Retained earnings
|
|
|
136,874
|
|
|
|
123,065
|
|
|
Accumulated other comprehensive income
|
|
|
26,937
|
|
|
|
20,781
|
|
|
|
|
|
214,460
|
|
|
|
193,317
|
|
|
Less: Treasury shares at cost,
|
|
|
|
|
|
|
|
|
|
Common stock –135,306 in 2013 and 215,306 in 2012
|
|
|
(316
|
)
|
|
|
(458
|
)
|
|
Total shareholders' equity
|
|
|
214,144
|
|
|
|
192,859
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and shareholders' equity
|
|
|
346,601
|
|
|
|
309,283
|
|
Jinpan International Limited and Subsidiaries
Consolidated Statement of Cash Flows
For the Twelve Months Ended December 31, 2013 (unaudited)
|
|
|
For the Twelve Months Ended
|
|
|
|
|
December 31
|
|
|
|
|
2013
|
|
|
2012
|
|
|
|
|
US$
|
|
|
US$
|
|
|
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Activities
|
|
|
|
|
|
|
|
Net Income
|
|
|
16,571
|
|
|
|
14,062
|
|
|
Adjustments to reconcile net income to
|
|
|
|
|
|
|
|
|
|
Net Cash provided by (used in ) operating activities:
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
6,491
|
|
|
|
5,246
|
|
|
Amortization of prepaid lease
|
|
|
372
|
|
|
|
|
|
|
Deferred Income Tax
|
|
|
(727
|
)
|
|
|
(326
|
)
|
|
Provision for doubtful debts
|
|
|
4,295
|
|
|
|
2,733
|
|
|
Loss/(gain) on disposal of fixed assets
|
|
|
(40
|
)
|
|
|
(4
|
)
|
|
Stock-based compensation Cost
|
|
|
277
|
|
|
|
406
|
|
|
Changes in operating assets and liabilities
|
|
|
|
|
|
|
|
|
|
Restricted Cash
|
|
|
(459
|
)
|
|
|
(501
|
)
|
|
Accounts Receivable
|
|
|
(20,188
|
)
|
|
|
(16,671
|
)
|
|
Notes Receivable
|
|
|
399
|
|
|
|
3,437
|
|
|
Inventories
|
|
|
(3,086
|
)
|
|
|
7,192
|
|
|
Prepaid Expenses
|
|
|
(1,573
|
)
|
|
|
10,743
|
|
|
Other Receivable
|
|
|
(852
|
)
|
|
|
(426
|
)
|
|
Accounts Payable
|
|
|
1,191
|
|
|
|
1,492
|
|
|
Notes Payable
|
|
|
4,238
|
|
|
|
(7,628
|
)
|
|
Income Tax
|
|
|
569
|
|
|
|
(461
|
)
|
|
Advance From customers
|
|
|
159
|
|
|
|
951
|
|
|
Other liabilities
|
|
|
6,700
|
|
|
|
(928
|
)
|
|
Net Cash provided by ( used in ) operating activities
|
|
|
14,337
|
|
|
|
19,317
|
|
|
Investing activities
|
|
|
|
|
|
|
|
|
|
Purchases of property, plant and equipment
|
|
|
(370
|
)
|
|
|
(8,787
|
)
|
|
Proceeds from sales of property, plant and equipment
|
|
|
40
|
|
|
|
29
|
|
|
Payment for construction in progress
|
|
|
(12,667
|
)
|
|
|
(26,751
|
)
|
|
Purchase of Land use right
|
|
|
-
|
|
|
|
434
|
|
|
Sale of short term investment
|
|
|
57,179
|
|
|
|
12,711
|
|
|
Increase in short term investment
|
|
|
(50,719
|
)
|
|
|
(23,834
|
)
|
|
Receipt of government grant for new plant construction
|
|
|
1,582
|
|
|
|
3,080
|
|
|
Decrease in investment in Beijing Jinpan Huineng Co.
|
|
|
-
|
|
|
|
32
|
|
|
Net Cash provided by ( used in ) investing activities
|
|
|
(4,955
|
)
|
|
|
(43,086
|
)
|
|
Financing activities
|
|
|
|
|
|
|
|
|
|
Proceeds from bank loan
|
|
|
42,213
|
|
|
|
63,218
|
|
|
Repayment of bank loan
|
|
|
(44,400
|
)
|
|
|
(42,315
|
)
|
|
Proceeds from exercised stock option
|
|
|
216
|
|
|
|
21
|
|
|
Dividend paid
|
|
|
(1,950
|
)
|
|
|
(2,912
|
)
|
|
Net Cash provided by ( used in ) financing activities
|
|
|
(3,921
|
)
|
|
|
18,012
|
|
|
Effect of exchange rate changes on cash
|
|
|
611
|
|
|
|
49
|
|
|
Net increase/(decrease) in cash and cash equivalents
|
|
|
6,072
|
|
|
|
(5,708
|
)
|
|
Cash and Cash equivalents at beginning of year
|
|
|
18,510
|
|
|
|
24,218
|
|
|
Cash and Cash equivalents at end of year
|
|
|
24,582
|
|
|
|
18,510
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest paid
|
|
|
2,724
|
|
|
|
1,673
|
|
|
Income Tax paid
|
|
|
2,470
|
|
|
|
3,027
|
|