Jinpan International Reports First Quarter 2013 Financial Results

--Company Reiterates FY13 Revenue & Net Profit Guidance Forecast--

May 15, 2013, 06:30 ET from Jinpan International Ltd.

CARLSTADT, N.J., May 15, 2013 /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 of 2013 ending March 31, 2013. 

First Quarter 2013 Results

Net sales for the first quarter were $35.2 million, a 17.8% decrease from $42.8 million in the same period last year.  The decrease in sales was primarily the result of lower levels of international sales compared to the prior year period, which experienced higher than average sales activity.  In the first quarter, domestic China sales accounted for $32.2 million, or 91.5% of net sales, compared to $33.8 million, or 79.0% of net sales in the same period last year. Net sales outside of China for the quarter were $3.0 million, or 8.5% of net sales compared to $9.0 million, or 21.0% 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 $33.2 million, or 94.3% of net sales in the first quarter, while wind energy products (cast resin transformers and VPI products for wind power applications) represented $2.0 million, or 5.7% of net sales during this quarter.

Gross profit in the first quarter decreased 25.7% year over year to $11.7 million from $15.8 million in the same period last year.  First quarter 2013 gross profit margin was 33.3%, compared to 36.9% in the prior year period, and 30.5% in the fourth quarter of 2012. Gross margin in the first quarter decreased compared to the same period last year mainly due to a decrease in international sales, which usually represent sales of higher margin products.  Gross margin in the first quarter increased over that of the fourth quarter of 2012 reflects the stabilizing of transformer prices in China.

Selling and administrative expenses in the first quarter were $10.4 million, or 29.5% of net sales, compared to $10.9 million, or 25.5% of net sales in the same period last year, and $14.0 million, or 26.2% in the fourth quarter of 2012.  While 2013 first quarter selling and administrative expenses declined year over year, as a percent of revenue, expenses were higher due to a higher percentage of contribution from domestic China sales which typically incur greater selling expenses per dollar of revenue compared to export sales.  

Operating income for the first quarter decreased to $1.3 million, or 3.8% of net sales from $4.8 million, or 11.3% of net sales, in the same period last year.

Other income for the first quarter of 2013 was $0.4 million compared to $0.2 million in the same quarter of 2012.

Net income for the first quarter was $1.1 million, or $0.07 per diluted share, compared to $4.0 million, or $0.24 per diluted share, in the same period last year.  First quarter net income, as a percentage of net sales, was 3.2% compared to 9.3% in the same period last year.

Mr. Zhiyuan Li, Chief Executive Officer of Jinpan, commented, "Despite lower sales in the first quarter compared to the prior year period, we expect steady growth in customer order activity as we progress through 2013. On the domestic front, sales orders for traditional cast resin transformers held steady and product pricing was stable, resulting in an improvement in gross margin compared to gross margin in the fourth quarter of 2012.  Internationally, we expect our order flow to gain momentum going forward as one of our major OEM customers has completed their change in design technology for their wind energy transformers and resumes more regular order activity.  We are generating orders from three major OEM's this year ensuring greater stability for this segment of our business and continue to pursue other high profile international OEM customer opportunities.

"We commenced production at our new Guilin transformer manufacturing facility at the end of the first quarter and aim to ramp up production and maximize performance from this facility in the quarters ahead.  At the end of April, our backlog rose to $142 million, up 27% over the prior year period and up 3% since the end of December 2012.

"China recently completed its leadership transition at the national level.  Proactive fiscal policy is stimulating domestic demand for electrical distribution equipment from manufacturers. Our customers in China, the majority of which are state-owned enterprises and regional governments, are expected to gradually increase spending on infrastructure development. We expect stronger performance in the second half of 2013 as the level of infrastructure development picks up in China. We also expect to increase international sales as we ship more products to our OEM customers.  We are well positioned to capitalize on opportunities in China and in other strategic markets around the world."

Balance Sheet

As of March 31, 2013, the Company had $26.3 million in cash and cash equivalents, compared to $18.5 million as of December 31, 2012. The Company's accounts receivable on March 31, 2013 totaled $124.9 million, compared to $124.6 million as of December 31, 2012.  Notes payable in the first quarter of 2013 decreased to $4.9 million compared to $6.0 million on December 31, 2012.  Total bank loans outstanding at March 31, 2013 were $45.0 million, compared to $44.0 million at December 31, 2012.

Financial Outlook

For the full year 2013, the Company reiterates projected net sales of $231-$241 million, an increase of 10% to 15% over 2012 and net income of $14.0-$14.5 million, which represents an increase of 0% to 3% compared to 2012.  Projected net profit growth in 2013 is expected to trend lower than revenue growth primarily due to the fixed costs associated with the Company's newly built Guilin facility.

Conference Call Information

Jinpan's management will host an earnings conference call on May 15th, 2013 at 8:30 a.m. U.S. Eastern Time.  Listeners may access the call by dialing #1-913-312-0971.  A webcast will also be available via http://public.viavid.com, with event ID: 104646.  A replay of the call will be available through May 29th, 2013.  Listeners may access the replay by dialing #1-858-384-5517, access code: 2671109.

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. 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, 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.

 

Jinpan International Limited and Subsidiaries

Consolidated Statements of Comprehensive Income (unaudited)

 Three months ended

March 31

2013

2012

(In thousands, except per share data)

US$

Net sales

35,171

42,755

Cost of Goods Sold

(23,453)

(26,993)

Gross Margin

11,718

15,762

Operating Expenses

Selling and administrative

(10,371)

(10,915)

Operating income

1,347

4,847

Interest Expenses

(268)

(459)

Other Income

373

215

Income before income taxes

1,452

4,603

Income taxes

(310)

(638)

Net income after taxes

1,142

3,965

Other comprehensive income (loss)

   Foreign currency translation adjustment

(4)

(71)

Total comprehensive income

1,138

3,894

Earnings per share

-Basic

US$ 0.07

US$ 0.25

-Diluted

US$ 0.07

US$ 0.24

Weighted average number of shares

-Basic

16,187,218

16,163,696

-Diluted

16,722,062

16,549,619

 

 

Jinpan International Limited and Subsidiaries

Consolidated Balance Sheets

(Unaudited)

(Audited)

March 31,

December 31,

2013

2012

US$

(In thousands, except number of shares and per share data)

Assets

Current assets:

Cash and cash equivalents

26,260

18,510

Restricted cash

593

824

Short-term investment

-

11,137

Notes receivable

11,000

15,720

Accounts receivable, net

124,899

124,608

Inventories, net

33,020

29,565

Prepaid expenses

5,551

2,528

Land use right

367

366

Deferred tax assets

1,512

1,339

Other receivables

7,183

5,900

Total current assets

210,385

210,497

Property, plant and equipment, net

45,879

41,361

Construction-in-progress

30,403

29,196

Land use right

14,708

14,760

Goodwill

13,439

13,403

Other assets

129

32

Deferred tax assets

34

34

Total assets

314,977

309,283

Liabilities and shareholders' equity

Current liabilities:

Short-term bank loans

13,327

17,644

Accounts payable

29,442

25,029

Notes Payable

4,940

6,008

Income tax payable

1,838

1,880

Advances from customers

15,678

13,624

Other liabilities

19,835

22,844

Total current liabilities

85,060

87,029

Commitments and contingencies

     Deferred Income

4,202

3,080

     Long Term bank loans

31,610

26,315

120,872

116,424

Shareholders' equity:

Convertible preferred stock, US$0.0045 par value:

      Authorized shares - 2,000,000

      Issued and outstanding shares – none in 2013 and     2012

-

-

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

37,459

37,374

Reserves

12,023

12,023

Retained earnings

123,722

123,065

Accumulated other comprehensive income

21,285

20,781

194,563

193,317

Less: Treasury shares at cost,

Common stock –215,306 in 2013 and 227,306 in  2012

(458)

(458)

Total shareholders' equity

194,105

192,859

Total liabilities and shareholders' equity

314,977

309,283

 

 

Jinpan International  Ltd

Consolidated Statement of Cash Flows

For the Three Months Ended March 31, 2012

For the Three Months Ended

March 31

2013

2012

US$

US$

( In thousands)

Operating Activities

      Net Income

1,142

3,965

      Adjustments to reconcile net income to

           Net Cash provided by (used in ) operating activities:

           Depreciation

1,629

1,183

           Amortization of prepaid lease

92

90

           Deferred Income Tax

(170)

16

           Provision for doubtful debts

562

862

           Loss/(gain) on disposal of fixed assets

-

(3)

           Stock-based compensation Cost

13

11

      Changes in operating assets and liabilities

           Restricted Cash

233

302

           Accounts Receivable

(523)

(4,807)

           Notes Receivable

4,756

9,252

           Inventories

(3,372)

(7,466)

           Prepaid Expenses

(3,012)

1,334

           Other Receivable

(1,363)

(1,667)

           Accounts Payable

4,341

(909)

           Notes Payable

(1,082)

(11,441)

           Income Tax

(47)

459

           Advance From customers

2,015

1,167

           Other liabilities

(3,065)

(6,243)

Net Cash provided by ( used in ) operating activities

2,149

(13,895)

Investing activities

     Purchases of property, plant and equipment

(6,032)

(4,200)

     Proceeds from sales of property, plant and equipment

-

27

     Payment for construction in progress

(1,128)

(1,084)

     Sell of short term investment

11,151

-

 Rec eipt of government grant for new plant construction

1,109

-

Net Cash provided by ( used in ) investing activities

5,100

(5,257)

Financing activities

     Proceeds from bank loan

8,125

11,820

     Repayment of bank loan

(7,265)

(3,189)

     Proceeds from exercised stock option

73

-

     Dividend paid

(486)

(1,132)

Net Cash provided by ( used in ) financing activities

447

7,499

Effect of exchange rate changes on cash

54

17

Net increase/(decrease) in cash and cash equivalents

7,750

(11,636)

Cash and Cash equivalents at beginning of year

18,510

24,218

Cash and Cash equivalents at end of year

26,260

12,582

Interest paid

340

340

Income Tax paid

193

164

 

SOURCE Jinpan International Ltd.