Jinpan International Reports Fourth Quarter and Full Year 2011 Financial Results ~ Fourth Quarter 2011 Net Sales Increase 49.4% Year-to-Year to $64.1 Million ~

CARLSTADT, N.J., March 8, 2012 /PRNewswire/ -- Jinpan International Ltd (Nasdaq: JST), a leading designer, manufacturer, and distributor of cast resin transformers for voltage distribution equipment, today announced the unaudited consolidated financial results for the fourth quarter and full year ended December 31, 2011.

Fourth Quarter 2011 Results

Net sales for the fourth quarter were $64.1 million, a 49.4% increase from $42.9 million in the same period last year.  The increase in sales was primarily the result of higher transformer sales both in the Company's domestic business and increased international sales.  In the fourth quarter, domestic sales accounted for $59.8 million, or 93.3% of net sales, compared to $40.0 million, which also represented 93.3% of net sales in the same period last year.  Net sales outside of China for the quarter were $4.3 million, compared to $2.9 million for the same period last year.  The quarterly figures for both years represented 6.7 % of net sales.

The sales of cast resin transformers (excluding those for wind power applications), switchgears and unit substations represented $57.1 million, or 89.1% of net sales in the fourth quarter, while wind energy products represented $7.0 million, or 10.9% of net sales during this quarter.

Gross profit in the fourth quarter increased 32.9% year over year to $22.2 million from $16.7 million.  Fourth quarter 2011 gross profit margin was 34.6%, compared to 38.9% in the prior year period, and 37.4% in the 2011 third quarter.  During the fourth quarter, the Company completed a one-time sale of approximately $2.0 million worth of silicon steel to a customer, which to some extent negatively impacted gross profit margin.  Excluding this sale, gross margin for the fourth quarter would have increased to 35.7%.  Selling and administrative expenses in the fourth quarter were $16.2 million, or 25.3% of net sales, compared to $11.2 million, or 26.0% of net sales in the same period last year.   Selling expenses increased in the fourth quarter as a result of increased sales.  Administrative expenses increased due to higher Research and Development expenses and staff salaries related to the Company's expanded manufacturing initiatives.

Operating income for the fourth quarter increased 7.3% to $5.9 million, or 9.2% of net sales, from $5.5 million, or 12.8% of net sales, in the same period last year.  Net income for this quarter decreased 8.5% to $5.4 million, or $0.33 per diluted share, from $5.9 million, or $0.36 per diluted share, in the same period last year.  Fourth quarter net income as a percentage of net sales was 8.4% compared to 13.7% in the same period last year.

Mr. Zhiyuan Li, Chief Executive Officer of Jinpan, commented: "Overall, we experienced strong results in the fourth quarter 2011 and were pleased to finish the 2011 fiscal year with record revenue and net profit.  Our growth was fueled by solid demand in both our domestic and international operations.  We continue to make progress improving our competitive position for cast resin transformer products in the Chinese market.  Over the past several years, we have made a conscious effort to enhance our operations in the areas of product engineering, marketing, R&D and business development to increase market share against our domestic competitors.  These initiatives are paying off today with strong domestic customer orders which we believe will continue through 2012.  In our international business, orders primarily for wind related transformers grew quite favorably.  We currently work with three (3) major international OEM's and continue to cultivate new customer opportunities."

"As our capacity utilization remains at elevated levels and customer demand for our products increases, we continue to expand our manufacturing capabilities.  We have expanded our Haikou facility, which increased our total manufacturing capacity by 25% in 2012.  Additionally, we remain on target with regard to the development of the first phase of our integrated cast resin and transformer manufacturing plant located in Guilin which will add additional manufacturing capacity at the end of this year."

Results for the Full Fiscal Year 2011

For the full year, total sales increased 52.2% to $218.9 million from $143.8 million in the prior year.

Gross profit in 2011 increased 43.9% year-over-year to $80.3 million from $55.8 million and gross profit margin decreased by 2.1% year over year to 36.7% from 38.8%.

Selling and administrative expenses in 2011 were $54.3 million or 24.8% of net sales, compared to $40.7 million, or 28.3% of net sales, in the prior year.

Operating profit in 2011 increased 71.1% to $26.0 million, or 11.9% of net sales, compared to $15.2 million, or 10.6% of net sales, in the prior year.

Net income in 2011 increased 78.4% to $23.9 million, or $1.45 per diluted share, compared to $13.4 million, or $0.81 per diluted share, in the prior year.

Balance Sheet

As of December 31, 2011, the Company had $24.2 million in cash and cash equivalents, compared to $27.5 million at December 31, 2010.  The Company's accounts receivable on December 31, 2011 totaled $110.4 million, compared to $75.7 million at December 31, 2010.  Notes payable in the 2011 fourth quarter decreased to $13.6 million compared to $27.1 million at the end of December 31, 2010.  Total bank loans outstanding at December 31, 2011 increase to $23.0 million as compared to $13.7 million at December 31, 2010.

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.

"We believe 2012 will be another exciting year for Jinpan.  As we look at our market opportunities this year, we intend to actively pursue the large market opportunity for standardized cast resin transformers in China where we have less than 10% of the total market share.  We also intend to further expand our position in the international market.  Domestic sales are expected to represent approximately 88% of total revenue while international revenue is expected to represent 12% of total revenue in 2012.  As of the end of February 2012, our backlog grew to $112 million, which is a 10% increase from the end of December 2011.  With our expanding manufacturing capacity, leading research, design and engineering capabilities and appropriate development strategies, we believe Jinpan remains poised to deliver sustainable, long-term growth," concluded Mr. Li.

Conference Call Information

Jinpan's management will host an earnings conference call on March 8, 2012 at 8:30 a.m. U.S. Eastern Time.  Listeners may access the call by dialing #1-913-312-0961.  A webcast will also be available via www.viavid.net.  A replay of the call will be available through March 22nd, 2012.  Listeners may access the replay by dialing #1-858-384-5517, access code: 1715634.

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 headquarters 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, 2010 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 Follow)

Jinpan International Limited and Subsidiaries

Consolidated Statements of Income (unaudited)

For the Three and Twelve Month Periods Ended December 31, 2011



Three

months

ended

December

31

Three

months

ended

December

31

Twelve

months

ended

December

31

Twelve

months

ended

December

31



2011

2010

2011

2010

(In thousands, except per share data)


US$

US$

US$

US$







Net sales


64,076

42,898

218,869

143,807

Cost of Goods Sold


(41,916)

(26,230)

(138,579)

(87,971)

Gross Margin


22,160

16,669

80,290

55,836







Operating Expenses






Selling and administrative


(16,217)

(11,169)

(54,292)

(40,673)

Operating income


5,943

5,500

25,998

15,163







Interest Expenses


(387)

(150)

(1,252)

(309)

Other Income


413

1,173

2,409

2,443

Income before income taxes


5,969

6,523

27,155

17,297







Income taxes


(563)

(651)

(3,301)

(3,913)

Net income


5,406

5,872

23,854

13,384







Earnings per share












-Basic


US$0.33

US$0.36

US$1.48

US$0.83







-Diluted


US$0.33

US$0.36

US$1.45

US$0.81







Weighted average number of shares












-Basic


16,163,696

16,159,893

16,163,696

16,159,893







-Diluted


16,441,544

16,338,491

16,456,611

16,457,462
















Jinpan International Limited and Subsidiaries

Consolidated Balance Sheets




Unaudited


Audited




Dec 30,


December 31,




2011


2010




US$


US$


Assets












Current assets:












Cash and cash equivalents


24,218


27,527


Restricted cash


322


1,079


Accounts receivable, net


110,382


75,658


Inventories


36,675


29,532


Prepaid expenses


13,251


28,939


Other receivables


22,993


9,833








Total current assets


207,841


172,568








Property, plant and equipment, net


37,102


32,138








Construction in progress


2,406


1,861








Land use right


15,523


6,374


Intangible asset-Goodwill


13,370


12,721


Other assets


76


69


Deferred tax assets


1,044


858








Total assets


277,362


226,589








Liabilities and Shareholders' Equity












Current liabilities:












Short term bank loans


21,425


12,080


Accounts payable


22,833


13,269


Notes Payable


13,611


27,111


Tax Payable


2,335


1,659


Advance from customers


12,642


5,319


Other Payable


22,073


14,061








Total current liabilities


94,919


73,499








Long TermLoan


1,550


1,597


Shareholders' equity:












Common stock, US$0.0045 par value:






Authorized shares - 40,000,000






Issued and outstanding shares – 16,395,456 in 2011

and  2010


74


74


Common Stock, Warrants


854


854


Convertible preferred stock, US$0.0045 par value:






Authorized shares – 2,000,000






Issued and outstanding shares –none in 2011

and 2010


-


-


Additional paid-in capital


36,114


35,738


Reserves


12,023


9,514


Retained earnings


111,915


92,834


Accumulated other comprehensive income


20,392


12,958




181,372


151,972


 Less: Treasury shares at cost, common stock-227,306 in 2011 and  2010


(479)


(479)


Total shareholders' equity


180,893


151,493








Total liabilities and shareholders' equity


277,362


226,589





Jinpan International Limited and Subsidiaries

Consolidated Statements of Cash Flows

For the Twelve Months Ended December 31, 2011(Unaudited)



Twelve

months

ended

Dec 30

Twelve

months

ended

Dec 30


2011

2010

Operating activities



Net income

23,854

13,384

Adjustments to reconcile net income to



net cash provided by/(used in) operating activities:



Depreciation

4,301

3,636

Provision for Doubtful Debt

861

257

Provision for inventories

388

338

Loss/(Gain) on disposal of fixed assets

19

(67)

Deferred Income Tax

(139)

(488)

    Stock-based compensation cost

371

213

Changes in operating assets and liabilities



Restricted cash

793

1,006

Accounts receivable

( 31,063)

(9,618)

Notes receivable

(13,125)

2,129

Inventories

(5,883)

(3,414)

Prepaid expenses

16,739

(18,571)

Other receivables

(532)

(1,972)

Accounts payable

8,481

2,524

Notes Payable

(14,514)

21,614

Income tax

576

(241)

Value added tax

1,075

(4,136)

Advance from customers

6,875

1,182

Government Grant

774

(556)

Other liabilities

4,226

(5,376)

Net cash provided by/(used in) operating activities

4,077

1,844

Investing activities



Purchases of property, plant and equipment

(7,347)

(8,202)

Proceeds from sales of property, plant and equipment

31

111

Payment for construction in progress

(372)

-

    Long Term Prepaid Lease

(5,275)

(195)

     Payment for investment in subsidiary

(1,785)

-

    Investment in Beijing Jinpan Huineng Electronics Co

-

(30)

Net cash provided by (used in) investing activities

(14,748)

(8,316)

Financing activities



Proceeds from bank loan

46,795

16,726

Repayment of bank loan

(38,409)

(4,925)

Proceeds from exercise of stock options

-

30

Dividends paid

(2,263)

(2,293)

Net cash provided by/(used in) financing activities

6,123

9,538

Effect of exchange rate changes on cash

1,239

797

Net increase/(decrease) in cash and cash equivalents

(3,309)

3,863

Cash and cash equivalents at beginning of year

27,527

23,664

Cash and cash equivalents at end of the period

24,218

27,527




Interest paid

1,285

250

Income taxes paid

2,742

4,665




SOURCE Jinpan International Ltd



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