2014

51job, Inc. Reports First Quarter 2013 Financial Results

SHANGHAI, May 9, 2013 /PRNewswire/ -- 51job, Inc. (Nasdaq: JOBS), a leading provider of integrated human resource services in China, announced today its unaudited financial results for the first quarter of 2013 ended March 31, 2013.

First Quarter 2013 Financial Highlights:

  • Total revenues of RMB380.4 million (US$61.2 million), a 0.1% decrease compared to Q1 2012 and within the Company's guidance range
  • Online recruitment services revenues increased 8.3% over Q1 2012 to RMB248.0 million (US$39.9 million)
  • Gross margin was 72.8% compared with 72.4% in Q1 2012
  • Income from operations of RMB115.5 million (US$18.6 million), a 11.7% decrease compared to Q1 2012
  • Fully diluted earnings per common share were RMB1.82 (US$0.59 per ADS)
  • Excluding share-based compensation expense and loss from foreign currency translation as well as their related tax impact, non-GAAP adjusted fully diluted earnings per common share were RMB2.07 (US$0.67 per ADS), within the Company's guidance range
  • Cash and short-term investments increased to RMB2,808.2 million (US$452.2 million) as of March 31, 2013

Commenting on the results, Rick Yan, President and Chief Executive Officer of 51job, Inc., said, "Although the late Chinese New Year holiday meaningfully delayed the recruitment peak season and affected the amount of revenues we were able to capture in the first quarter, we have observed a solid increase in hiring activity and improved sentiment among employers in 2013. The acceleration in the growth of online employers was especially encouraging as we stepped up our customer acquisition efforts and strengthened our market leadership position. For this year, we remain focused on expanding our customer base, deepening relationships with HR departments for cross-selling opportunities, and innovating new products to increase user engagement and effectiveness for our corporate clients and individuals alike."

First Quarter 2013 Unaudited Financial Results

Total revenues for the first quarter ended March 31, 2013 were RMB380.4 million (US$61.2 million), a decrease of 0.1% from RMB380.8 million for the same quarter in 2012.

Online recruitment services revenues for the first quarter of 2013 were RMB248.0 million (US$39.9 million), representing an 8.3% increase from RMB229.1 million for the same quarter of the prior year. The growth was principally due to an increase in the number of unique employers using the Company's online recruitment services, which was partially offset by a decrease in average revenue per unique employer. Unique employers increased 20.3% to 206,329 in the first quarter of 2013 compared with 171,545 in the same quarter of the prior year driven by customer acquisition efforts and the growing usage of online recruitment services by employers. However, average revenue per unique employer decreased 10.0% in the first quarter of 2013 as compared to the same quarter in 2012 due to a greater number of new customers and employers who purchased lower priced services.

Print advertising revenues for the first quarter of 2013 decreased 48.1% to RMB24.8 million (US$4.0 million) compared with RMB47.8 million for the same quarter in 2012 primarily due to the ongoing shift in demand away from print advertising services. The estimated number of print advertising pages generated in the first quarter of 2013 declined 48.5% to 595 from 1,155 pages in the same quarter in 2012. In addition, due to the Company's strategic decision to discontinue certain newspaper editions, the number of cities where 51job Weekly is published decreased to six as of March 31, 2013 compared with eleven cities as of March 31, 2012.

Other human resource related revenues for the first quarter of 2013 increased 3.5% to RMB107.5 million (US$17.3 million) from RMB103.9 million in the same quarter of 2012 primarily due to greater customer adoption of business process outsourcing services, which was partially offset by a decrease in revenues from training and executive search services attributed to the late Chinese New Year holiday.

Gross profit for the first quarter of 2013 increased 0.8% to RMB265.4 million (US$42.7 million) from RMB263.3 million for the same quarter of the prior year. Gross margin, which is gross profit as a percentage of net revenues, was 72.8% in the first quarter of 2013 compared with 72.4% in the same quarter in 2012.

Operating expenses for the first quarter of 2013 increased 13.1% to RMB149.9 million (US$24.1 million) from RMB132.5 million for the same quarter of 2012. Operating expenses as a percentage of net revenues was 41.1% for the first quarter of 2013 compared with 36.4% for the first quarter of 2012. Sales and marketing expenses for the first quarter of 2013 increased 12.2% to RMB101.4 million (US$16.3 million) from RMB90.4 million for the same quarter of the prior year primarily due to higher employee compensation expenses, headcount additions, and greater advertising and promotional expenses. General and administrative expenses for the first quarter of 2013 increased 14.9% to RMB48.4 million (US$7.8 million) from RMB42.2 million in the first quarter of 2012 primarily due to higher employee compensation, rental, office and depreciation expenses.

Income from operations for the first quarter of 2013 decreased 11.7% to RMB115.5 million (US$18.6 million) from RMB130.8 million for the same quarter of the prior year. Operating margin, which is income from operations as a percentage of net revenues, was 31.7% in the first quarter of 2013 compared with 36.0% in the same quarter of 2012. Excluding share-based compensation expense, operating margin would be 35.4% in the first quarter of 2013 compared with 39.2% in the same quarter of 2012.

Net income for the first quarter of 2013 decreased 9.7% to RMB108.8 million (US$17.5 million) from RMB120.5 million for the same quarter in 2012. Fully diluted earnings per common share for the first quarter of 2013 were RMB1.82 (US$0.29) compared with RMB2.03 for the same quarter in 2012. Fully diluted earnings per ADS for the first quarter of 2013 were RMB3.64 (US$0.59) compared with RMB4.06 in the first quarter of 2012.

In the first quarter of 2013, the Company recognized total share-based compensation expense of RMB13.5 million (US$2.2 million) compared with RMB11.7 million in the first quarter of 2012. The Company also recognized a loss from foreign currency translation of RMB1.4 million (US$0.2 million) in the first quarter of 2013 compared with RMB0.2 million in the first quarter of 2012.

Excluding share-based compensation expense and loss from foreign currency translation as well as their related tax impact, non-GAAP adjusted net income for the first quarter of 2013 decreased 6.6% to RMB123.7 million (US$19.9 million) compared with RMB132.3 million for the first quarter of 2012. Non-GAAP adjusted fully diluted earnings per common share were RMB2.07 (US$0.33) in the first quarter of 2013 compared with RMB2.23 in the first quarter of 2012. Non-GAAP adjusted fully diluted earnings per ADS in the first quarter of 2013 were RMB4.14 (US$0.67) compared with RMB4.46 in the first quarter of 2012.

As of March 31, 2013, the Company had cash and short-term investments totaling RMB2,808.2 million (US$452.2 million) compared with RMB2,531.4 million as of December 31, 2012. Short-term investments consist of certificates of deposit with original maturities from three months to one year.

Business Outlook

Based on current market conditions and an expected year-over-year decrease in print advertising revenues as the Company transitions away from this business, the Company's revenue target for the second quarter of 2013 is in the estimated range of RMB395 million to RMB410 million (US$63.6 million to US$66.0 million). Excluding share-based compensation expense and any loss or gain from foreign currency translation as well as their related tax impact, the Company's non-GAAP fully diluted earnings target for the second quarter of 2013 is in the estimated range of RMB2.20 to RMB2.35 per common share (US$0.71 to US$0.76 per ADS). The Company expects total share-based compensation expense in the second quarter of 2013 to be approximately RMB15 million to RMB16 million (US$2.4 million to US$2.6 million).

Other Company News

In March 2013, the Company discontinued the publication of 51job Weekly in Shenzhen but continues to maintain its facilities and all other operations in the city.

Currency Convenience Translation

For the convenience of readers, certain Renminbi amounts have been translated into U.S. dollars at the rate of RMB6.2108 to US$1.00, the noon buying rate on March 29, 2013 in New York for cable transfers of Renminbi as set forth in the H.10 weekly statistical release of the Federal Reserve Board.

Conference Call Information

Management will hold a conference call at 9:00 p.m. Eastern Time on May 9, 2013 (9:00 a.m. Shanghai / Hong Kong time zone on May 10, 2013) to discuss its first quarter 2013 financial results, operating performance and business outlook. To dial in to the call, please use conference ID 4615904 and the following telephone numbers:

US:

+1-888-549-7750

Hong Kong:

+852-3009-5027

International:

+1-480-629-9722

The call will also be available live and on replay through 51job's investor relations website, http://ir.51job.com. Please go to the website at least fifteen minutes early to register or install any necessary audio software.

Use of Non-GAAP Financial Measures

To supplement the consolidated financial statements presented in accordance with United States Generally Accepted Accounting Principles (GAAP), 51job uses non-GAAP measures of income before income tax expense, income tax expense, adjusted net income, adjusted earnings per share and adjusted earnings per ADS, which are adjusted from results based on GAAP to exclude share-based compensation expense and loss from foreign currency translation as well as their related tax impact. The Company believes excluding share-based compensation expense and its related tax impact from its non-GAAP financial measures is useful for its management and investors to assess and analyze the Company's core operating results as such expense is not directly attributable to the underlying performance of the Company's business operations and do not impact its cash earnings. The Company believes excluding loss from foreign currency translation and its related tax impact from its non-GAAP financial measures is useful for its management and investors as such translation loss is not indicative of the Company's core business operations and will not result in cash settlement nor impact the Company's cash earnings. 51job also believes these non-GAAP measures excluding share-based compensation expense and loss from foreign currency translation, as well as their related tax impact, are important in helping investors to understand the Company's current financial performance and future prospects and to compare business trends among different reporting periods on a consistent basis. The presentation of these additional measures should not be considered a substitute for or superior to GAAP results or as being comparable to results reported or forecasted by other companies. The non-GAAP measures have been reconciled to GAAP measures in the attached financial statements.

About 51job

51job, Inc. (Nasdaq: JOBS) is a leading provider of integrated human resource services in China with a strong focus on recruitment related services. Through online recruitment services at www.51job.com and print advertisements in 51job Weekly, 51job enables enterprises to attract, identify and recruit employees and connects millions of job seekers with employment opportunities. 51job also provides a number of other value-added human resource services, including business process outsourcing, training, executive search and compensation and benefits analysis. 51job has a call center in Wuhan and a nationwide sales office network spanning 25 cities across China.

Safe Harbor Statement

Statements in this release regarding targets for the second quarter of 2013, future business and operating results constitute "forward-looking" statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the Private Securities Litigation Reform Act of 1995. These statements are based upon management's current expectations, and actual results could differ materially. Among the factors that could cause actual results to differ are the number of recruitment advertisements placed, sales orders received and customer contracts executed during the remaining weeks of the second quarter of 2013; any accounting adjustments that may occur during the quarterly close; fluctuations in the value of the Renminbi against the U.S. dollar and other currencies; behavioral and operational changes of customers in meeting their human resource needs as they respond to evolving social, economic, regulatory and political changes in China as well as stock market volatilities; introduction by its competitors of new or enhanced products or services; price competition in the market for the various human resource services that the Company provides in China; acceptance of new products and services developed or introduced by the Company outside of the human resources industry and fluctuations in general economic conditions. For additional information on these and other factors that may affect the Company's financial results, please refer to the Company's filings with the Securities and Exchange Commission. 51job undertakes no obligation to update these targets prior to announcing final results for the second quarter of 2013 or as a result of new information, future events or otherwise.

Contact:
Rebecca Liu
Investor Relations
51job, Inc.
+(86-21) 6879-6250
ir@51job.com



51job, Inc.

Consolidated Statements of Operations and Comprehensive Income






For the Three Months Ended

 

(In thousands, except share, per share and per ADS data)

March 31, 2012

(unaudited)


March 31, 2013

(unaudited)


March 31, 2013

(unaudited)


RMB


RMB


USD (Note 1)







Revenues:






  Online recruitment services

229,079


248,031


39,935

  Print advertising

47,808


24,802


3,993

  Other human resource related revenues

103,925


107,542


17,316

Total revenues

380,812


380,375


61,244







Less: Business and related tax

(17,195)


(15,646)


(2,519)

Net revenues

363,617


364,729


58,725







Cost of services (Note 2)

(100,333)


(99,363)


(15,998)







Gross profit

263,284


265,366


42,727







Operating expenses:






  Sales and marketing (Note 3)

(90,369)


(101,433)


(16,332)

  General and administrative (Note 4)

(42,151)


(48,420)


(7,796)

Total operating expenses

(132,520)


(149,853)


(24,128)







Income from operations

130,764


115,513


18,599

Loss from foreign currency translation

(162)


(1,401)


(226)

Interest and investment income

14,214


17,277


2,782

Other income

14


140


23







Income before income tax expense

144,830


131,529


21,178

Income tax expense

(24,322)


(22,737)


(3,661)







Net income

120,508


108,792


17,517







Other comprehensive income:






  Currency translation adjustments

(3)


3


0







Comprehensive income

120,505


108,795


17,517







Earnings per share:






  Basic

2.11


1.88


0.30

  Diluted

2.03


1.82


0.29







Earnings per ADS (Note 5):






  Basic

4.22


3.76


0.61

  Diluted

4.06


3.64


0.59







Weighted average number of common shares outstanding:






  Basic

57,125,048


57,902,999


57,902,999

  Diluted

59,340,782


59,701,301


59,701,301







Notes:






1. The conversion of Renminbi amounts into U.S. dollar amounts is based on the noon buying rate of US$1.00 to RMB6.2108 on March 29, 2013 in New York for cable transfers of Renminbi as set forth in the H.10 weekly statistical release of the Federal Reserve Board.

2. Includes share-based compensation expense of RMB1,702 and RMB2,156 (US$347) for the three months ended March 31, 2012 and 2013, respectively.

3. Includes share-based compensation expense of RMB1,463 and RMB1,854 (US$298) for the three months ended March 31, 2012 and 2013, respectively.

4. Includes share-based compensation expense of RMB8,497 and RMB9,450 (US$1,522) for the three months ended March 31, 2012 and 2013, respectively.

5. Each ADS represents two common shares.

 


51job, Inc.

Reconciliation of GAAP and Non-GAAP Results






For the Three Months Ended

(In thousands, except share, per share and per ADS data)

March 31, 2012
(unaudited)


March 31, 2013
(unaudited)


March 31, 2013
(unaudited)


RMB


RMB


USD (Note 1)







GAAP income before income tax expense

144,830


131,529


21,178

Add back: Share-based compensation expense

11,662


13,460


2,167

Add back: Loss from foreign currency translation

162


1,401


226

Non-GAAP income before income tax expense

156,654


146,390


23,571







GAAP income tax expense

(24,322)


(22,737)


(3,661)

Tax impact of share-based compensation expense and loss

  from foreign currency translation


(1)


(0)

Non-GAAP income tax expense

(24,322)


(22,738)


(3,661)







Non-GAAP adjusted net income

132,332


123,652


19,910







Non-GAAP adjusted earnings per share:






      Basic

2.32


2.14


0.34

      Diluted

2.23


2.07


0.33







Non-GAAP adjusted earnings per ADS (Note 2):






      Basic

4.63


4.27


0.69

      Diluted

4.46


4.14


0.67







Weighted average number of common shares outstanding:






      Basic

57,125,048


57,902,999


57,902,999

      Diluted

59,340,782


59,701,301


59,701,301







Notes:






1. The conversion of Renminbi amounts into U.S. dollar amounts is based on the noon buying rate of US$1.00 to RMB6.2108 on March 29, 2013 in New York for cable transfers of Renminbi as set forth in the H.10 weekly statistical release of the Federal Reserve Board.

2. Each ADS represents two common shares.

 

51job, Inc.

Consolidated Balance Sheets






As of

(In thousands, except share and per share data)

December 31,

2012

(unaudited)


March 31,

2013

(unaudited)


March 31,

2013

(unaudited)


RMB


RMB


USD (Note 1)







ASSETS












Current assets:






    Cash

1,122,557


1,002,972


161,488

    Restricted cash

14,468


59,043


9,507

    Short-term investments

1,408,845


1,805,244


290,662

    Accounts receivable (net of allowance of RMB3,260 and 
        RMB3,494 as of December 31, 2012 and March 31,
        2013, respectively)

52,688


41,607


6,699

    Prepayments and other current assets

280,242


250,068


40,264

    Deferred tax assets, current

8,643


5,343


860







Total current assets

2,887,443


3,164,277


509,480







Property and equipment, net

280,657


278,973


44,917

Intangible assets, net

3,919


3,498


563

Other long-term assets

69,343


67,052


10,796

Deferred tax assets, non-current


392


63







Total non-current assets

353,919


349,915


56,339







Total assets

3,241,362


3,514,192


565,819







LIABILITIES












Current liabilities:






    Accounts payable

17,146


25,231


4,062

    Salary and employee related accrual

48,450


27,653


4,452

    Taxes payable

65,858


68,199


10,981

    Advance from customers

338,330


394,499


63,518

    Other payables and accruals

103,565


183,446


29,536







Total current liabilities

573,349


699,028


112,549







Deferred tax liabilities, non-current

1,985


2,121


342







Total liabilities

575,334


701,149


112,891







Shareholders' equity:






      Common shares (US$0.0001 par value; 500,000,000   
           shares authorized, 57,786,679 and 58,260,065 shares
           issued and outstanding as of December 31, 2012 and
           March 31, 2013, respectively)

48


48


8

      Additional paid-in capital

1,152,174


1,190,394


191,665

      Statutory reserves

6,944


6,944


1,118

      Accumulated other comprehensive income

1,629


1,632


263

      Retained earnings

1,505,233


1,614,025


259,874







Total shareholders' equity

2,666,028


2,813,043


452,928







Total liabilities and shareholders' equity

3,241,362


3,514,192


565,819







Note 1: The conversion of Renminbi amounts into U.S. dollar amounts is based on the noon buying rate of US$1.00 to RMB6.2108 on March 29, 2013 in New York for cable transfers of Renminbi as set forth in the H.10 weekly statistical release of the Federal Reserve Board.

 

SOURCE 51job, Inc.



RELATED LINKS
http://www.51job.com
http://ir.51job.com

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