Jinpan International Reports Fourth Quarter and Full Year 2013 Financial Results * Fourth quarter revenue increased 18.2% year-over-year to $63.1 million; Full year 2013 revenue increased 7.2% to a record $225.7 million

* Fourth quarter net income increased 6.2% year-over-year to $4.1 million, or $0.24 per share; Full year 2013 net income increased 17.8% to $16.6 million, or $0.99 per share

* Fiscal 2014 earnings outlook; net income expected to be in the range of $18.2 million to $19.1 million, or $1.09 to $1.14 per share, reflecting 10-15% growth

* In February 2014, Jinpan's Board of Directors approved an increase in the Company's quarterly dividend to $0.04 per common share

CARLSTADT, N.J., March 10, 2014 /PRNewswire/ -- Jinpan International Limited (Nasdaq: JST), a leading designer, manufacturer, and distributor of cast resin transformers, today reported unaudited consolidated financial results for the fourth quarter and full year ending December 31, 2013. 

Fourth Quarter 2013 Results

Net sales for the fourth quarter were $63.1 million, an 18.2% increase from $53.4 million in the same period last year.  The increase was driven by robust growth in the Chinese market and a strong recovery in international sales.  In the fourth quarter, China sales increased 18.7% year-over-year to $57.5 million, or 91.1% of net sales, compared to $48.5 million, or 90.8% of net sales in the same period last year. Net sales outside of China for the quarter increased 14.3% year-over-year to $5.6 million, or 8.9% of net sales, compared to $4.9 million, or 9.2% of net sales for the same period last year.

The sales of cast resin and VPI transformers (excluding those for wind power applications), switchgears and unit substations increased 17.2% year-over-year to $58.5 million, or 92.7% of net sales in the fourth quarter, while wind energy products (cast resin transformers and VPI reactors for wind power applications) represented $4.6 million, or 7.3% of net sales during this quarter.

Gross profit in the fourth quarter increased 27.2% year over year to $20.7 million from $16.3 million in the same period last year.  Fourth quarter 2013 gross profit margin was 32.9%, compared to 30.5% in the prior year period. Gross margin in the fourth quarter increased compared to the same period last year due to a stabilized pricing environment and favorable raw material costs.

Selling and administrative expenses in the fourth quarter were $18.5 million, or 29.3% of net sales, compared to $14.0 million, or 26.2% of net sales in the same period last year.  Selling and administrative expenses increased from the same period last year due to higher sales volume and increased research and development expenses, which were abnormally low in the prior year period.

Operating income for the fourth quarter decreased 4.8% to $2.2 million, or 3.5% of net sales, from $2.3 million, or 4.4% of net sales, in the same period last year.

Net income for the fourth quarter increased 6.2% to $4.1 million, or $0.24 per diluted share, compared to $3.8 million, or $0.23 per diluted share, in the same period last year.  Fourth quarter net income, as a percentage of net sales, was 6.4% compared to 7.2% in the same period last year.

Full Year 2013 Results

Net sales for the full year 2013 were $225.7 million, a 7.2% increase from $210.5 million last year.  Gross profit in 2013 increased 5.3% to $72.4 million and gross profit margin decreased to 32.1%, compared to 32.7% during 2012.  Selling and administrative expenses were $55.7 million, compared to $53.9 million last year. The Company reclassified installation service fees of $4.4 million from selling expense to cost of goods sold for the year 2013.  Operating profit in 2013 increased 12.1% to $16.7 million, or 7.4% of net sales, compared to $14.9 million, or 7.1% of net sales, last year.  Net income in 2013 increased 17.8% to $16.6 million, or $0.99 per share, compared to $14.1 million, or $0.84 per share, in the prior year.

Mr. Zhiyuan Li, Chief Executive Officer of Jinpan International, stated, "We are pleased with our accomplishments during 2013, which translated into a return to growth and operating margin expansion for the year.  Our team's exceptional execution on the ramp-up of production at our new Guilin facility enabled us to achieve record annual sales and has put us on a path for continued revenue and earnings growth."

"We remain focused on the disciplined execution of our growth strategy.  We believe the key factors are in place to drive sustainable demand for our products within our core electrical infrastructure sector as well as within renewable energy sectors such as wind power and utility-scale solar.  Looking ahead, we anticipate steady demand from the domestic market and are making good progress with our international OEM customers.  Our optimism about our growth outlook is reflected by the Board of Directors' recent decision to increase our quarterly dividend." 

"At the end of December, our backlog equaled $100 million, down 27.5% from the prior year period and down 4.8% from the third quarter of 2013.  The increased production of standardized cast resin transformers from our Guilin facility has accelerated our average cycle time and enabled us to convert orders into revenue more quickly.  This is reflected by our record level of inventory turnover for 2013.  We are comfortable with our backlog and expect it to gradually increase from these levels as our business expands."

Balance Sheet

As of December 31, 2013, the Company had $30.8 million in cash and cash equivalents, restricted cash, and short term investments, compared to $30.5 million as of December 31, 2012. The Company's accounts receivable on December 31, 2013 totaled $144.6 million, compared to $124.6 million as of December 31, 2012.   Total bank loans outstanding at December 31, 2013 were $43.1 million, compared to $43.9 million at December 31, 2012. 

Financial Outlook

For the full year 2014, the Company projects revenue and earnings growth of approximately 10% to 15% compared to 2013.  Net sales are expected to be in the range of $248 million to $260 million and net income is expected to be in the range of $18.2 million to $19.1 million, or $1.09 to $1.14 per share.

Conference Call Information

Jinpan's management will host a conference call and webcast on Monday, March 10, 2014, at 4:30 p.m. Eastern Time.  Listeners may access the call by dialing 1-888-230-5498 (toll free) or 1-913-905-3226 (international).  A webcast will also be available via http://public.viavid.com, with event ID: 108065.  A replay of the call will be available through March 24, 2014, by dialing 1-877-870-5176, access code 9355802. 

ABOUT JINPAN INTERNATIONAL

Jinpan International Limited (NASDAQ: JST) designs, manufactures, and markets electrical control and distribution equipment used in demanding industrial applications, utility projects, renewable energy installations, and infrastructure projects.  Major products include cast resin transformers, VPI transformers and reactors, switchgears, and unit substations.  Jinpan serves a wide range of customers in China and reaches international markets as a qualified supplier to leading global industrial electrical equipment manufacturers. Jinpan's four manufacturing facilities in China are located in the cities of Haikou, Wuhan, Shanghai and Guilin.  The Company's manufacturing facilities in China comprise the largest cast resin transformer production capacity in that country. The Company was founded in 1993.  Its principal executive offices are located in Haikou, Hainan, China and its United States office is based in Carlstadt, New Jersey.  For more information, visit www.jinpaninternational.com

Safe Harbor Regarding Forward Looking Statements

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.

FINANCIAL STATEMENTS FOLLOW:

Jinpan International Limited and Subsidiaries

Consolidated Statements of Comprehensive Income (unaudited)

For the Three and Twelve Month Periods Ended December 31, 2013





Three months ended

Twelve months ended



December 31

December 31









2013

2012

2013

2012

(In thousands, except per share data)


US$

US$

US$

US$







Net sales


63,148

53,422

225,727

210,537

Cost of Goods Sold


(42,399)

(37,112)

(153,325)

(141,747)

Gross Margin


20,749

16,310

72,402

68,790







Operating Expenses






Selling and administrative


(18,531)

(13,981)

(55,718)

(53,903)

Operating income


2,218

2,329

16,684

14,887







Interest Expenses


(731)

(325)

(2,072)

(1,766)

Other Income


2,781

2,287

4,636

3,223

Income before income taxes


4,268

4,291

19,248

16,344







Income taxes


(195)

(456)

(2,677)

(2,282)

Net income after taxes


4,073

3,835

16,571

14,062







Other comprehensive income (loss)






   Foreign currency translation adjustment


(14)

(20)

(27)

(73)

Total comprehensive income


4,059

3,815

16,544

13,989







Earnings per share












-Basic


US$ 0.25

US$ 0.24

US$ 1.02

US$ 0.87







-Diluted


US$ 0.24

US$ 0.23

US$ 0.99

US$ 0.84







Weighted average number of shares












-Basic


16,230,165

16,170,107

16,230,165

16,170,107







-Diluted


16,631,378

16,701,657

16,711,192

16,717,277

 

 

Jinpan International Limited and Subsidiaries

Consolidated Balance Sheet




(Unaudited)


(Audited)


December 31, 2013


December 31, 2012

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

US$


US$

Assets




Current assets:




     Cash and cash equivalents

24,582


18,510

     Restricted cash

1,316


824

     Short-term investment

4,920


11,137

     Notes receivable

15,802


15,720

     Accounts receivable, net

144,606


124,608

     Inventories, net

33,614


29,565

     Prepaid expenses

4,204


2,528

     Land use right

367


366

     Deferred tax assets

2,119


1,339

     Other receivables

6,891


5,900





     Total current assets

238,421


210,497





Property, plant and equipment, net

75,601


41,361

Construction-in-progress

3,787


29,196

Land use right

14,850


14,760

Goodwill

13,818


13,403

Other assets

90


32

Deferred tax assets

34


34





Total assets

346,601


309,283





Liabilities and shareholders' equity








Current liabilities:








     Short-term bank loans

11,101


17,644

     Accounts payable

27,013


25,029

     Notes Payable

10,498


6,008

     Income tax payable

2,516


1,880

     Advances from customers

14,207


13,624

     Other liabilities

30,339


22,844





     Total current liabilities

95,674


87,029





Commitments and contingencies




Long term liability:




     Deferred Income

4,785


3,080

     Long Term bank loans

31,998


26,315





Total Liabilities

132,457


116,424





Shareholders' equity:




Convertible preferred stock, US$0.0045 par value:




      Authorized shares - 2,000,000




      Issued and outstanding shares – none in 2012 and 2011

-


-

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

37,726


37,374

Reserves

12,849


12,023

Retained earnings

136,874


123,065

Accumulated other comprehensive income

26,937


20,781


214,460


193,317

Less: Treasury shares at cost,








Common stock –135,306 in 2013 and 215,306 in  2012

(316)


(458)





Total shareholders' equity

214,144


192,859





Total liabilities and shareholders' equity

346,601


309,283

 

 

Jinpan International Limited and Subsidiaries

Consolidated Statement of Cash Flows

For the Twelve Months Ended December 31, 2013 (unaudited)




For the Twelve Months Ended


                 December 31


2013

2012


US$

US$

(In thousands)






Operating Activities



      Net Income

16,571

14,062

      Adjustments to reconcile net income to



           Net Cash provided by (used in ) operating activities:



           Depreciation

6,491

5,246

           Amortization of prepaid lease

372


           Deferred Income Tax

(727)

(326)

           Provision for doubtful debts

4,295

2,733

           Loss/(gain) on disposal of fixed assets

(40)

(4)

           Stock-based compensation Cost

277

406




     Changes in operating assets and liabilities



           Restricted Cash

(459)

(501)

           Accounts Receivable

(20,188)

(16,671)

           Notes Receivable

399

3,437

           Inventories

(3,086)

7,192

           Prepaid Expenses

(1,573)

10,743

           Other Receivable

(852)

(426)

           Accounts Payable

1,191

1,492

           Notes Payable

4,238

(7,628)

           Income Tax

569

(461)

           Advance From customers

159

951

           Other liabilities

6,700

(928)

Net Cash provided by ( used in ) operating activities

14,337

19,317




Investing activities



     Purchases of property, plant and equipment

(370)

(8,787)

     Proceeds from sales of property, plant and equipment

40

29

     Payment for construction in progress

(12,667)

(26,751)

     Purchase of Land use right

-

434

     Sale of short term investment

57,179

12,711

     Increase in short term investment

(50,719)

(23,834)

     Receipt of government grant for new plant construction

1,582

3,080

     Decrease in investment in Beijing Jinpan Huineng Co.

-

32

Net Cash provided by ( used in ) investing activities

(4,955)

(43,086)




Financing activities



     Proceeds from bank loan

42,213

63,218

     Repayment of bank loan

(44,400)

(42,315)

     Proceeds from exercised stock option

216

21

     Dividend paid

(1,950)

(2,912)

Net Cash provided by ( used in ) financing activities

(3,921)

18,012




Effect of exchange rate changes on cash

611

49




Net increase/(decrease) in cash and cash equivalents

6,072

(5,708)




Cash and Cash equivalents at beginning of year

18,510

24,218




Cash and Cash equivalents at end of year

24,582

18,510




Interest paid

2,724

1,673

Income Tax paid

2,470

3,027

 

SOURCE Jinpan International



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