Jinpan International Reports First Quarter 2012 Financial Results

~ First Quarter 2012 Net Sales Increased 43.1% Year-to-Year to $42.8 Million

~~ First Quarter 2012 Net Income Increased 44.6% Year-to-Year to $4.0 Million

~~ First Quarter 2012 Diluted EPS Increased 41.2% Year-to-Year to $0.24 per Share

May 11, 2012, 06:30 ET from Jinpan International Ltd

CARLSTADT, N.J., May 11, 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 first quarter ended March 31, 2012. 

First Quarter 2012 Results

Net sales for the first quarter were $42.8 million, a 43.1% increase from $29.9 million in the same period last year.  The increase in sales was primarily the result of increased international and domestic transformer sales.  In the first quarter, domestic sales accounted for $33.8 million, or 79.0% of net sales, compared to $27.8 million, which also represented 93.0% of net sales in the same period last year. Net sales outside of China for the quarter were $9.0 million, or 21% of net sales compared to $2.1 million, or 7.0% 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 $31.9 million, or 74.5% of net sales in the first quarter, while wind energy products represented $10.9 million, or 25.5% of net sales during this quarter.

Gross profit in the first quarter increased 43.9% year over year to $15.8 million from $11.0 million in the same period last year.  First quarter 2012 gross profit margin was 36.9%, compared to 36.7% in the prior year period, and 34.6% in the 2011 fourth quarter.

Selling and administrative expenses in the first quarter were $10.9 million, or 25.5% of net sales, compared to $7.8 million, or 26.0% of net sales in the same period last year.   Selling expenses increased in the first quarter as a result of increased sales. Administrative expenses increased due to higher Research and Development expenses and increased salary expenses resulting from the Company's implementation of its expansion plans.

Operating income for the first quarter increased 52.6% to $4.8 million, or 11.3% of net sales, from $3.2 million, or 10.6% of net sales, in the same period last year. Net income for the first quarter increased 44.6% to $4.0 million, or $0.24 per diluted share, from $2.7 million, or $0.17 per diluted share, in the same period last year.  First quarter net income as a percentage of net sales was 9.3% compared to 9.2% in the same period last year.

Mr. Zhiyuan Li, Chief Executive Officer of Jinpan, commented, "We experienced strong results in the first quarter of 2012 fueled by domestic and export sales growth.  Our international business exceeded our expectations driven by a large number of customized transformers for wind applications.  Sales in our domestic business increased 21.6% from the prior year period and are expected to continue to grow in the coming quarters. 

While the design and development of customized transformers remains a major priority for Jinpan, the domestic market for standardized transformers also represents a very large opportunity for our business.  Our expanded operating capabilities will enable us to have the capacity necessary to compete on quality and price with our competitors in China in the standard transformer market.  With our expanding capacity, we now have the ability to go out and make a more aggressive push in this market resulting in greater sales and profits over time.

We expect sales growth to continue in the remaining quarters of the year. Our customer base has expanded by approximately 20% over the past year.  At the end of March, our domestic China sales order backlog was $112 million compared to $102 million at the end of December 2011.  Jinpan has become a more widely recognized brand name within the cast resin transformer industry, which enables us to participate in a greater number of industrial projects sponsored by private businesses and state-owned enterprises.  With quality products, competitive pricing, efficient and growing manufacturing platform, and an expanding customer base, we believe that Jinpan will continue its record of sales and net income growth in 2012."

Balance Sheet

As of March 31, 2012, the Company had $12.6 million in cash and cash equivalents, compared to $24.2 million at December 31, 2011. The Company's accounts receivable on March 31, 2012 totaled $114.4 million, compared to $110.4 million at December 31, 2011.  Notes payable in the 2012 first quarter decreased to $2.2 million compared to $13.6 million at the end of December 31, 2011.  Total bank loans outstanding at March 31, 2012 increased to $31.6 million as compared to $23.0 million at December 31, 2011.

Financial Outlook For the full year 2012, the Company currently anticipates net sales growth of 20-25% to $262-$273 million, gross profit margin of 33%-35%, and net income growth of approximately 17-22% to $27.8-$29.0 million

Conference Call Information Jinpan's management will host an earnings conference call on May 11, 2012 at 8:30 a.m. U.S. Eastern Time.  Listeners may access the call by dialing #1-913-312-0978.  A webcast will also be available via www.viavid.net.  A replay of the call will be available through May 25, 2012.  Listeners may access the replay by dialing #1-858-384-5517, access code: 4686071.

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.

(Financial Statements on Following Page)

Jinpan International Limited and Subsidiaries Consolidated Statements of Income (unaudited)

 

Three

months

ended

March 31

 

2012

2011

(In thousands, except per share data)

US$

US$

Net sales

42,755

29,882

Cost of Goods Sold

(26,993)

(18,925)

Gross Margin

15,762

10,957

Operating Expenses

Selling and administrative

(10,915)

(7,782)

Operating income

4,847

3,175

Interest Expenses

(459)

(175)

Other Income

215

283

Income before income taxes

4,603

3,283

Income taxes

(638)

(542)

Net income after taxes

3,965

2,741

Earnings per share

-Basic

US$ 0.25

US$0.17

-Diluted

US$ 0.24

US$0.17

Weighted average number of shares

-Basic

16,163,696

16,163,696

-Diluted

16,549,619

16,427,141

                                                                                                                          

Jinpan International Limited and Subsidiaries Consolidated Balance Sheets (unaudited)

March 31,

December 31,

2012

2011

US$

US$

Assets

Current assets:

Cash and cash equivalents

12,582

24,218

Restricted Cash

20

322

Notes receivable

9,878

19,114

Accounts receivable, net

114,445

110,382

Inventories, net

44,184

36,675

Prepaid expenses

11,930

13,251

Other receivables

5,552

3,878

Total current assets

198,591

207,840

Property, plant and equipment, net

40,135

37,102

Construction in progress

3,494

2,406

Land use right

15,449

15,523

Intangible asset-Goodwill

13,384

13,371

Other assets

74

76

Deferred tax assets

1,029

1,044

Total assets

272,156

277,362

Liabilities and Shareholders' Equity

Current liabilities:

Short term bank loans

30,097

21,426

Accounts payable

21,947

22,833

Notes Payable

2,178

13,611

Income tax

2,797

2,335

Advance from customers

13,823

12,642

Other Payable

15,919

22,072

Total current liabilities

86,761

94,919

Long Term Loan

1,537

1,550

Shareholders' equity:

Common stock, US$0.0045 par value:

Authorized shares - 40,000,000

Issued and outstanding shares - 16,395,456 in 2012 and 2011

 

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 20012

and 2011

-

-

Additional paid-in capital

36,980

36,114

Reserves

12,023

12,023

Retained earnings

114,748

111,915

Accumulated other comprehensive income

20,512

20,392

184,337

181,372

  Less: Treasure shares at cost, common stock-227,036 in 2012 and  2011

(479)

(479)

Total shareholders' equity

183,858

180,893

Total liabilities and shareholders' equity

272,156

277,362

Jinpan International  Ltd

Consolidated Statement of Cash Flows

For the Three Months Ended March 31, 2012

For the Three Months Ended

                 March 31

2012

2011

US$

US$

( In thousands)

Operating Activities

      Net Income

3,965

2,741

      Adjustments to reconcile net income to

           Net Cash provided by (used in ) operating activities:

           Depreciation

1,183

1,025

           Deferred Income Tax

16

(20)

           Provision for doubtful debts

862

(99)

           Loss/(gain) on disposal of fixed assets

(3)

-

           Stock-based compensation Cost

11

61

      Changes in operating assets and liabilities

           Restricted Cash

302

39

           Accounts Receivable

(4,807)

(1,014)

           Notes Receivable

9,252

(3,471)

           Inventories

(7,466)

(8,694)

           Prepaid Expenses

1,334

(4,170)

           Other Receivable

(1,667)

(572)

           Accounts Payable

(909)

4,216

           Notes Payable

(11,441)

(3,278)

           Income Tax

459

142

           Advance From customers

1,167

2,532

           Other liabilities

(6,243)

8,324

Net Cash provided by ( used in ) operating activities

(13,985)

(2,238)

Investing activities

     Purchases of property, plant and equipment

(4,200)

(941)

     Proceeds from sales of property, plant and equipment

27

(240)

     Payment for construction in progress

(1,084)

-

     L/T Prepaid Lease

90

80

Net Cash provided by ( used in ) investing activities

(5,167)

(1,101)

Financing activities

     Proceeds from bank loan

11,820

1,925

     Repayment of bank loan

(3,189)

(28)

     Dividend paid

(1,132)

(1,132)

Net Cash provided by ( used in ) financing activities

7,499

765

Effect of exchange rate changes on cash

17

261

Net increase/(decrease) in cash and cash equivalents

(11,636)

(2,313)

Cash and Cash equivalents at beginning of year

24,218

27,527

Cash and Cash equivalents at end of year

12,582

25,214

Interest paid

340

199

Income Tax paid

164

419

 

SOURCE Jinpan International Ltd