- 2Q09 Gross Margin Increases to 46.6% Compared to 34.1% 2Q08- -
2Q09 Operating Income Increases 46.9% to $10.0 Million Compared to
2Q08 - - 2Q09 Net Income increases 44.0% to $8.7 Million Compared
to 2Q08 - - Reiterates FY09 Net Income and Diluted EPS Forecast -
ENGLEWOOD CLIFFS, N.J., Aug. 14 /PRNewswire-FirstCall/ -- Jinpan
International Ltd. (NASDAQ:JST), a leading designer, manufacturer
and distributor of cast resin transformers for high voltage
distribution equipment, today announced consolidated financial
results for the second quarter ended June 30, 2009. Net sales in
the second quarter were $40.9 million, a 0.7% increase from $40.6
million in the same period last year. Net sales remained
approximately the same as that of the second quarter of 2008
primarily due to downward pressure on unit sale price stemming from
lower material prices. In the second quarter, net sales outside of
China increased 16.0% to $5.8 million, or 14.2% of net sales,
compared to $5 million, or 12.3% of net sales in the same period
last year. Cast resin transformers (excluding those for wind power
applications), switch gears and unit substations represented $32.6
million, or 79.7% of net sales in the second quarter, while wind
energy products represented $8.3 million, or 20.3% of net sales in
the second quarter. Gross profit in the second quarter was $19.0
million, a 37.6% increase from $13.8 million, in the same period
last year. Second quarter gross margin increased to 46.6% compared
to 34.1% 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 and an increase in
sales of customized, high-end products resulting in gross margins
during the second quarter which were above normal levels. Selling,
general and administrative expenses in the second quarter were $9.0
million, or 22.1% of net sales, a 28.6% increase compared to $7.0
million, or 17.3% of net sales in the same period last year. These
expenses increased primarily due to increase in R&D expense and
additional overhead costs at the Company's Wuhan and Shanghai
facilities, which were not operating during the same period last
year. Operating income in the second quarter was $10.0 million, or
24.4% of net sales, a 46.9% increase compared to $6.8 million, or
16.8% of net sales in the same period last year. Net income in the
second quarter was $8.7 million, or $1.07 per diluted share, a
44.0% increase compared to $6.0 million, or $0.74 per diluted
share, in the same period last year. Second quarter net income as a
percentage of net sales was 21.2% as compared to 14.9% in the same
period last year. Mr. Zhiyuan Li, Chief Executive Officer of Jinpan
made the following comments: "In such a difficult economic
environment, we were pleased with our results for the second
quarter. We were able to have modest revenue growth in an
environment with lower prices. Also in the second quarter, we
recorded favorable gross margins because of lower raw materials
prices, but also because of a high level of customized, high-end
orders that the Company was able to deliver to its clients. For the
second half of 2009, we believe gross margins will return to more
typical levels of 33% - 34%, which is a level to be proud of in
this industry. "We were also pleased to see an increase in orders
from our international business segment and believe international
orders could generate a growing percentage of net sales in 2009.
Our international customers are placing orders for cast resin
transformers that benefit wind power applications as well as our
more traditional power generation applications typically used in
urban settings (such as trains and subways, hospitals, airports and
office buildings), industrial (factories) and commercial
development settings (processing plants, data centers). "JST
continues to take the necessary steps to ensure we have the
capacity to meet growing demand from domestic and international
customers. Both our Wuhan facility now in operation and soon to be
completed first phase of our Shanghai facility can deliver
increased production. Our Shanghai facility will house our growing
wind energy products business. "As we evaluate our financial
performance for the remainder of the year, we anticipate that order
volume to grow but the dollar value of our projects will likely
remain subject to the challenging global market conditions, thus
impacting our original sales projections. We expect gross margins
within the high end of our historic range and anticipate net income
and EPS growth. We believe we will benefit from the stimulus plans
of China and the U.S. and expect growth in our overall financial
performance as the domestic and international markets in which we
operate continue to show signs of stabilization and increased
infrastructure development projects materialize. JST has a strong
balance sheet, a healthy cash position, manageable debt and the
right strategic plan to sustainably 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. Balance Sheet As of June 30, 2009, the Company had $21.3
million of cash and cash equivalents, compared to $16.7 million at
December 31, 2008. The Company's accounts receivables on June 30,
2009 totaled $60.2 million, compared to $58.8 million at December
31, 2008. Financial Outlook For the full year 2009, the Company
currently anticipates net sales of approximately $154 million to
$159 million, a 0% to 3% increase over 2008 sales of $154 million.
The Company reiterates its original estimate of 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 that
diluted earnings per share for 2009 will be between $2.75 to $2.85
per share. Conference Call Information Jinpan's management will
host an earnings conference call today, August 14, 2009 at 8:30
a.m. U.S. Eastern Time. Listeners may access the call by dialing
#1-913-312-1450. A webcast will also be available via the Company's
website at http://www.viavid.net/. A recording of the call will be
available through August 28, 2009. Listeners may access it by
dialing #1-719-457-0820, access code: 9513647. About Jinpan
International Ltd Jinpan International Ltd. (NASDAQ:JST) designs,
manufactures and distributes cast resin transformers for high
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;
-- 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 Condensed Consolidated Statements of
Income (unaudited) For the Three and Six Month Periods Ended June
30, 2009 Three Three Six Six months months months months ended
ended ended ended June 30 June 30 June 30 June 30 (In thousands,
except 2009 2008 2009 2008 per share data) US$ US$ US$ US$ Net
sales 40,903 40,604 73,290 64,402 Cost of Goods Sold (21,859)
(26,767) (42,530) (43,106) Gross Margin 19,044 13,837 30,760 21,296
Operating Expenses Selling and administrative (9,047) (7,033)
(15,277) (11,503) Operating income 9,997 6,804 15,483 9,793
Interest Expenses (248) (291) (352) (470) Other Income 72 187 122
371 Income before income taxes 9,821 6,700 15,253 9,694 Income
taxes (1,133) (667) (1,886) (1,261) Net income 8,688 6,033 13,367
8,433 Earnings per share -Basic $1.09 $0.76 $1.67 $1.06 -Diluted
$1.07 $0.74 $1.65 $1.03 Weighted average number of shares -Basic
8,002,794 7,984,147 8,002,794 7,984,147 -Diluted 8,086,090
8,152,304 8,086,090 8,152,304 Jinpan International Limited and
Subsidiaries Condensed Consolidated Balance Sheets (unaudited) June
30, December 31, 2009 2008 (In thousands) US$ US$ Assets Current
assets: Cash and cash equivalents 21,331 16,739 Accounts
receivable, net 60,196 58,793 Inventories 28,508 31,868 Prepaid
expenses 27,934 4,713 Other receivables 6,915 7,317 Total current
assets 144,884 119,430 Property, plant and equipment, net 18,045
18,213 Construction in progress 6,693 6,055 Land use right 6,130
6,098 Intangible asset-Goodwill 12,333 12,348 Deferred tax assets
257 301 Total assets 188,342 162,445 Liabilities and Shareholders'
Equity Current liabilities: Short term bank loans 4,392 11,726
Accounts payable 9,758 11,300 Notes Payable 26,352 - Tax Payable
1,640 3,671 Advances from customers 6,419 7,828 Other Payable
19,544 20,733 Total current liabilities 68,105 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 74 73
and 8,189,684 in 2008 Common Stock, Warrants 854 854 Convertible
preferred stock, US$0.009 par value: Authorized shares - 1,000,000
Issued and outstanding shares - 3,044 in 2008 - - and 2009
Additional paid-in capital 34,266 34,035 Reserves 3,906 3,906
Retained earnings 72,692 60,296 Accumulated other comprehensive
income 9,192 8,812 120,984 107,976 Less: Treasury shares at cost,
common stock-192,470 in 2009 and 202,470 in 2008 (747) (789) Total
shareholders' equity 120,237 107,187 Total liabilities and
shareholders' equity 188,342 162,445 Jinpan International Limited
and Subsidiaries Consolidated Statements of Cash Flows For the Six
Months Ended June 30, 2009 (Unaudited) Six Six months months ended
ended June 30, June 30, 2009 2008 (In thousands) US$ US$ Operating
activities Net income 13,367 8,433 Adjustments to reconcile net
income to net cash provided by/(used in) operating activities:
Depreciation 1,454 632 Provision for doubtful debt (286) (282) Loss
on disposal of fixed assets - 1 Deferred income tax 43 277
Stock-based compensation cost 205 184 Changes in operating assets
and liabilities Accounts receivable (1,188) (10,639) Inventories
3,324 (5,662) Prepaid expenses (23,241) (4,209) Other receivables
394 207 Accounts payable (1,529) 3,003 Notes payable 26,367 - Tax
payable (2,028) (463) Advance from customers (1,401) 888 Other
payable (1,164) 2,706 Net cash provided by/(used in) operating
activities 14,317 (4,924) Investing activities Purchases of
property, plant and equipment (1,348) (1,055) Proceeds from sales
of property, plant and equipment - 2 Payment for construction in
progress (645) (10,952) Purchase of available-for sale securities -
(1,180) Net cash used in investing activities (1,993) (13,185)
Financing activities Proceeds from bank loan 4,850 17,436 Repayment
of bank loan (12,175) (4,580) Proceeds from exercise of stock
options 70 - Dividends paid (970) (967) Net cash provided by/(used
in) financing activities (8,225) 11,889 Effect of exchange rate
changes on cash 493 464 Net increase/(decrease) in cash and cash
equivalents 4,592 (5,756) Cash and cash equivalents at beginning of
year 16,739 17,122 Cash and cash equivalents at end of the period
21,331 11,366 Interest paid 364 544 Income taxes paid 2,971 1,715
DATASOURCE: Jinpan International Ltd. CONTACT: Investors, Mark Du,
Chief Financial Officer of Jinpan International Ltd.,
+1-201-227-0680; or In China: Yuening Jiang of ICR, Inc.,
+86-10-6599-7965; or In U.S.: Brian M. Prenoveau, CFA,
+1-203-682-8200 Web Site: http://www.viavid.net/
Copyright