Jinpan International Reports Second Quarter 2007 Results
- Company Reports 2Q07 Revenues of $32.1 Million; Diluted EPS of $0.50 -
- Raises 2007 Net Income Growth Expectations -
ENGLEWOOD CLIFFS, N.J., Aug. 13 /PRNewswire-FirstCall/ -- Jinpan International Ltd (Amex: JST), a leading designer, manufacturer, and distributor of cast resin transformers for voltage distribution equipment, today announced consolidated financial results for the second quarter ended June 30, 2007. Comparison data with the second quarter of last year is not available as the company did not report quarterly results prior to June 30, 2006. Highlights for the Second Quarter Ended June 30, 2007 -- Total sales for the second quarter were USD $ 32.1 million. The sales contribution reflects orders for cast resin transformers in China as well as growing international sales, primarily to the U.S. -- Revenues derived from customers in China represented approximately 95% of revenues in the second quarter while shipments to U.S. customers generated the remaining 5% of the revenue total. Through the first six months of 2007, U.S. sales have already surpassed the Company's total U.S. sales for 2006. -- Gross profit in the second quarter was $10.7 million. Gross margin as a percent of revenue was 33.3% Gross margin primarily reflects stable pricing and lower material costs associated with growing sales of the company's new electricity transformer model supplied to customers in China. -- Selling, general and administrative expenses in the second quarter were $5.4 million, or 17% of sales. Second quarter operating profit was $5.2 million, or 16% of sales. -- Net income for the second quarter was $4.1 million, or $0.50 per diluted share. Mr. Zhiyuan Li, Chief Executive Officer of Jinpan commented, "We are very pleased with our second quarter performance which reflects strong customer demand in China as well as growing international revenues. The Chinese economy continues to grow at a healthy pace. As a result, there is increased development of power infrastructure projects in both urban and rural areas. As one of the largest manufacturers and distributors of cast resin transformers in China, we are well positioned to benefit from overall demand. We are particularly proud of the sales and margin performance of our new cast resin transformer product, which is available to our customer base in China. This product contains non-conventional materials in the design which results in lower material cost, quality performance and improved margins for our business. This product highlights the strength of our engineering and design team and enhances our competitive position in the marketplace." Financial Outlook for 2007 For the full 2007 fiscal year, the Company anticipates revenue of approximately $115 million, a 40% increase compared to 2006 revenue of $82.3 million. Due to the seasonal nature of order shipments, the second half of the fiscal year is generally a stronger period for the company compared to the first half. The Company anticipates net income to be in the range of $12.4 to 12.8 million, or $1.53 to $1.58 per diluted share, which is a 65% to 70% increase compared to 2006 net income of $7.5 million, or $1.12 per diluted share. Updated 2007 net income growth of 65%-70% compares to prior net income growth of 55%-60% issued by the Company on April 2, 2007. This increase is largely a result of greater than expected gross margin due to the sales mix of the Company's new designed transformers, which generally have lower material production costs. The Company's fiscal 2007 diluted EPS guidance is based on an estimated average diluted share count of 8.1 million shares for the full year, which is an increase of approximately 1.4 million shares from its fiscal 2006 diluted share count of 6.7 million shares, due to its secondary offering completed in December 2006. Mr. Li continued, "As we look to the second half of 2007, we expect that overall demand for our cast resin transformers will remain strong due to continued economic growth and infrastructure development in China. We also anticipate further upside to our U.S. business as we generate additional interest for orders, which is a direct result of the UL product certification we received earlier this year. We are operating near full capacity and our current backlog is very healthy. In order to fulfill future product orders, we remain focused on the completion of our new Wuhan manufacturing facility which will allow us to increase our current capacity by nearly 50%. We expect to complete construction by the end of the year and believe this new, state- of-the-art facility will be fully operational by January 2008." "Our products are well suited to meet the growing demands for electricity in China and abroad due to their product quality and reliability, competitive pricing, energy efficiency and functionality, and environmental and safety characteristics. Overall, we are comfortable with our position in the market and feel very strongly that we will continue to maintain strong growth and improve profitability as electricity demand increases in our target markets, concluded Li." Financial Results for Six Months of 2007 -- For the six month period ending June 30, 2007, total sales increased 40% to $48.3 million compared to $34.6 million in the prior six month period last year. -- Gross profit increased to $15.4 million compared to $9.7 million in the prior year period. Gross margin increased 390 basis points to 31.9% from 28.0% in the prior year period. -- Selling, general and administrative expenses in the for the first six months of 2007 were $8.4 million, or 17.4% of sales, compared to $5.7 million, or 16.5% of sales, in the prior year period. This increase was a result of hiring and training of additional manufacturing workers for the new Wuhan facility. Operating profit for the first six months of 2007 increased 75.3% to $7.0 million compared to $4.0 million in the prior year period. Six month operating margin increased 290 basis points to 14.5% compared to 11.6% in the prior year period. -- Net income for the first six months of 2007 was $5.7 million, or $0.70 per diluted share, compared to $2.7 million, or $0.40 per diluted share in the prior year period. About Jinpan International Ltd Jinpan International Ltd. (Amex: JST) designs, manufactures, and distributes cast resin transformers for voltage distribution equipment in China and other various countries around the world. Jinpan's cast resin transformers allow high voltage transmissions of electricity to be distributed to various locations in lower, more usable voltages. The Company has obtained ISO9001 and ISO1401 certification of its cast resin transformers. Its principal executive offices are located in Hainan, China and its U.S. headquarters is based in Englewood Cliffs, New Jersey. Safe Harbor Provision Statements in this press release which are not historical data are forward-looking statements which involve known and unknown risks, uncertainties or other factors not under the company's control, which may cause actual results, performance or achievements of the company to be materially different from the results, performance or other expectations implied by these forward-looking statements. These factors include, but are not limited to, those detailed in the company's periodic filings with the Securities and Exchange Commission. Jinpan International Limited and Subsidiaries Consolidated Statements of Income (unaudited) For the Three and Six Month Periods Ended June 30, 2007 Three months Six months Six months ended ended ended June 30 June 30 June 30 2007 2007 2006 (In thousands, except per share data) US$ US$ US$ Net sales 32,056 48,289 34,580 Cost of Goods Sold (21,386) (32,869) (24,881) Gross Margin 10,670 15,420 9,699 Operating Expenses Selling and administrative (5,463) (8,418) (5,705) Operating income 5,207 7,002 3,994 Interest Expenses (188) (246) (156) Other Income 6 194 9 Income before income taxes 5,025 6,950 3,847 Income taxes (933) (1,258) (620) Income before minority interest 4,092 5,692 3,227 Minority Interest - - (536) Net income 4,092 5,692 2,691 Earnings per share -Basic US$0.51 US$0.71 US$0.41 -Diluted US$0.50 US$0.70 US$0.40 Weighted average number of shares -Basic 7,971,336 7,971,336 6,549,144 -Diluted 8,083,467 8,083,467 6,651,166 Jinpan International Limited and Subsidiaries Consolidated Balance Sheets (unaudited) As of June 30, 2007 June 30 June 30 2007 2006 US$ US$ Assets Current assets: Cash and cash equivalents 15,361 5,010 Investment available for sales 683 164 Accounts receivable, net 35,728 25,178 Inventories 19,281 15,009 Prepaid expenses 4,112 2,848 Other receivables 3,231 920 Total current assets 78,396 49,129 Property, plant and equipment, net 4,444 4,182 Construction in progress 3,408 714 Deferred tax assets 102 104 Total assets 86,350 54,129 Liabilities and Shareholders' Equity Current liabilities: Short term bank loans 6,355 2,448 Accounts payable 3,535 2,072 Income tax 953 356 Advance from customers 5,065 5,260 Other Payable 13,381 8,598 Total current liabilities 29,289 18,734 Minority interest - 939 Shareholders' equity: Common stock, US$0.009 par value: Authorized shares - 20,000,000 Issued and outstanding shares - 8,186,617 in 2007 and 6,791,246 in 2006 73 60 Convertible preferred stock, US$0.009 par value: Authorized shares - 1,000,000 Issued and outstanding shares - 6,111 in 2007 and 2006 - Additional paid-in capital 23,556 10,767 Reserves 3,595 2,647 Retained earnings 29,528 21,292 Accumulated other comprehensive income 1,127 513 57,879 35,279 Less: Treasure shares at cost, common stock - 206,470 in 2007 and 208,470 in 2006 (818) (823) Total shareholders' equity 57,061 34,456 Total liabilities and shareholders' equity 86,350 54,129 Jinpan International Limited and Subsidiaries Consolidated Statements of Cash Flows For the Six Months Ended June 30, 2007(Unaudited) Six months Six months ended ended June 30 June 30 2007 2006 Operating activities Net income 5,692 2,692 Adjustments to reconcile net income to net cash provided by/(used in) operating activities: Depreciation 545 401 Provision for Doubtful Debt 67 - Loss/(Gain) on disposal of fixed assets (13) - Minority interest - 536 Changes in operating assets and liabilities Accounts receivable (10,060) (2,027) Notes receivable (546) (876) Inventories (487) (1,579) Prepaid expenses 578 (631) Other receivables (991) 63 Accounts payable (2,718) (920) Note Payable (1,037) - Income tax 360 355 Advance from customers 1,368 1,950 Other liabilities 3,918 1,176 Net cash provided by/(used in) operating activities (3,324) 1,140 Investing activities Purchases of property, plant and equipment (815) (619) Proceeds from sales of property, plant and equipment 40 - Payment for construction in progress (1,675) (368) Purchase of available-for -sales securities (489) - Net cash provided by (used in) investing activities (2,939) (987) Financing activities Proceeds from bank loan 3,575 7,426 Repayment of bank loan (3,274) (9,500) Acquisition of treasury stock - - Proceeds from exercise of stock options 27 193 Decrease in dividend payable to minority shareholders (1,084) (373) Acquired minority interest (11,000) - Dividends paid (964) (794) Net cash provided by/(used in) financing activities (12,720) (3,048) Effect of exchange rate changes on cash 229 48 Net increase/(decrease) in cash and cash equivalents (18,754) (2,847) Cash and cash equivalents at beginning of year 34,115 7,857 Cash and cash equivalents at end of year 15,361 5,010 Interest paid 193 144 Income taxes paid 906 197
SOURCE Jinpan International Ltd
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