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2014

Jinpan International Reports Third Quarter 2007 Results

- Company Reports 3Q07 Revenues of $29.5 Million; Diluted EPS of $0.51 -

- Raises FY07 Net Income and Diluted EPS Estimates -



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    ENGLEWOOD CLIFFS, N.J., Nov. 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 third quarter ended
 September 30, 2007.
     Highlights for the Third Quarter Ended June 30, 2007
 
     -- Total sales for the third quarter were USD $29.5 million, a 26.3%
        increase over the same period last year.  The increase in revenues was
        a result of continued strong sales of the Company's cast resin
        transformers, switch gear equipment, reactors and unit substations.
 
     -- Sales growth benefited from the continued expansion of the Chinese
        economy and the accompanying increase in demand for power generation
        equipment.  The third quarter also saw a significant increase in the
        sale of custom-designed transformers, which tend to require a longer
        manufacturing cycles but also bring higher gross margins.
 
     -- Gross profit in the third quarter was $10.6 million, a 64% increase
        over the same period last year.  Third quarter gross margin increased
        820 basis points to 35.8% compared to 27.6% in the year ago period.
        Gross margin benefited primarily from lower material costs associated
        with growing sales of the company's new electricity transformer model
        supplied to customers in China as well as from an increase in custom-
        designed transformers which are generally sold at a higher gross
        margin.
 
     -- Selling, general and administrative expenses in the third quarter were
        $5.7 million, or 19.5% of sales, versus $3.4 million, or 14.7% of
        sales, in the year ago period.  SG&A increased primarily due to
        additional costs related to SOX 404 compliance and the hiring and
        training of personnel for the Company's new manufacturing facility in
        Wuhan.
 
     -- Operating income increased to $4.8 million, or 16.4% of sales, compared
        to $3.0, or 12.9% of sales in the prior year period.
 
     -- Net income for the third quarter increased 96.2% to $4.1 million, or
        $0.51 per diluted share, versus $2.1 million, or $0.32 per diluted
        share, in the third quarter of 2006.  Third quarter net income as a
        percentage of revenue increased 500 basis points to 14.0% from 9.0% in
        the prior year period, attributable to the increase in gross margin
        which outweighed the increases in SG&A.
     Mr. Zhiyuan Li, Chief Executive Officer of Jinpan commented, "Our
 financial performance in the third quarter was strong across the board. The
 increased need for power generating equipment in China and abroad remains
 strong, which bodes well for our business. We managed our growth well
 during the quarter and are pleased with our margin improvement.
     Our products are well positioned in the market due to their quality,
 reliability, competitive pricing, and energy efficiency. In addition, our
 ability to efficiently and cost-effectively produce custom-designed
 products that meet the needs of individual customers is another strength we
 bring to the market.
     Our cast resin transformers are meeting the needs of our expanding
 customer base which numbered over 400 in the third quarter. Our products
 are used in a broad range of applications, including urban applications
 such as railroad, airport, harbor, hospitals, and office buildings,
 commercial and industrial applications such as factories and processing
 plants, and electrical power plants.
     Our current backlog is strong and we are operating at full capacity. We
 are getting close to completing our major initiative to expand our
 production capacity with the build out of our new Wuhan manufacturing
 facility. Once operational, this 400,000 square foot facility will be
 dedicated to the manufacturing and design of our cast resin transformers.
 The centralized location of this new facility in China can also help to
 minimize transportation and production costs. We are currently training
 individuals to operate and run this facility and plan for it to be
 operational by Jan 2008. Once fully operational, our production for cast
 resin transformers is expected to increase by 50%."
     Financial Outlook for 2007
     For the full 2007 fiscal year, the Company currently anticipates
 revenue of approximately $113 million, a 37% increase compared to 2006
 revenue of $82.3 million. The Company anticipates net income to be in the
 range of $13.5 to $13.9 million, or $1.67 to $1.72 per diluted share, which
 is an 80% to 85% increase compared to 2006 net income of $7.5 million, or
 $1.12 per diluted share. This increased net income estimate from the prior
 quarter is largely a result of higher than anticipated gross margin
 stemming from the sales mix of newly designed transformers, which generally
 have lower material production costs, and also higher than expected sales
 of custom-designed transformers, which tend to be sold at higher gross
 margins.
     The Company's fiscal 2007 diluted EPS guidance is based on an estimated
 average diluted share count of approximately 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 concluded, "We see many good opportunities in China and abroad
 for the remainder of this year and well into 2008. International sales,
 primarily to the U.S., continue to grow and are on a pace to double as
 compared to last year. We continue to take the right steps to grow our
 business responsibly while also ensuring the quality of our client base. We
 are increasingly becoming a global player with our cast resin transformers
 and related equipment and are encouraged with our prospects for growth. We
 look forward to meeting the power generating needs for our customers with
 the most reliant, highest quality products and are pleased with our market
 opportunity in the years ahead."
     Financial Results for the Nine Months ending September 30, 2007
 
     -- For the nine month period ending September 30, 2007, total sales
        increased 34.3% to $77.8 million compared to $57.9 million in the first
        three quarters of last year.
 
     -- Gross profit increased to $26.0 million compared to $16.1 million in
        the prior year period.  Gross margin increased 560 basis points to
        33.4% from 28.0% in the prior year period.
 
     -- Selling, general and administrative expenses in the for the first nine
        months of 2007 were $14.2 million, or 18.2% of sales, compared to $9.1
        million, or 15.8% of sales, in the prior year period.
 
     -- Operating profit for the first nine months of 2007 increased 69% to
        $11.8 million compared to $7.0 million in the prior year period.  Nine
        month operating margin increased 310 basis points to 15.2% compared to
        12.1% in the prior year period.
 
     -- Net income for the first nine months of 2007 was $9.8 million, or $1.21
        per diluted share, compared to $4.8 million, or $0.72 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.
     Investor Contact Information:
     Mark Du
     Chief Financial Officer
     Jinpan International Ltd.
     (201)227-0680
 
     Bill Zima
     Integrated Corporate Relations, Inc.
     (203) 682-8200
 
 
 
     Jinpan International Limited and Subsidiaries
     Consolidated Statements of Income (unaudited)
     For the Three and Nine Month Periods Ended September 30, 2007
 
                                  Three       Three         Nine        Nine
                                  months      months       months      months
                                  ended       ended        ended       ended
                                Sept. 30    Sept. 30     Sept. 30    Sept. 30
     (In thousands, except        2007        2006         2007        2006
      per share data)              US$         US$          US$         US$
 
     Net sales                   29,467      23,324       77,756      57,905
     Cost of Goods Sold         (18,908)    (16,899)     (51,777)    (41,780)
     Gross Margin                10,559       6,425       25,979      16,125
 
     Operating Expenses
       Selling and
        administrative           (5,736)     (3,424)     (14,154)     (9,128)
     Operating income             4,823       3,001       11,825       6,997
 
     Interest Expenses             (196)        (86)        (442)       (242)
     Other Income                   157          33          351          41
     Income before income taxes   4,784       2,948       11,734       6,796
 
     Income taxes                  (652)       (455)      (1,910)     (1,075)
     Income before minority
      interest                    4,132       2,493        9,824       5,721
     Minority Interest                -        (387)           -        (923)
     Net income                   4,132       2,106        9,824       4,798
 
     Earnings per share
 
       -Basic                   US$0.52     US$0.32      US$1.23     US$0.73
 
       -Diluted                 US$0.51     US$0.32      US$1.21     US$0.72
 
     Weighted average number
      of shares
 
       -Basic                 7,974,295   6,570,755    7,974,295   6,570,755
 
       -Diluted               8,087,308   6,662,141    8,087,308   6,662,141
 
 
 
     Jinpan International Limited and Subsidiaries
     Consolidated Balance Sheets (unaudited)
     As of September 30, 2007
 
                                                      Sept. 30       June. 30
                                                        2007           2007
                                                         US$            US$
     Assets
     Current assets:
       Cash and cash equivalents                        9,220         15,361
       Investment available for sales                     193            683
       Accounts receivable, net                        39,537         35,728
       Inventories                                     21,503         19,281
       Prepaid expenses                                 9,645          4,112
      Other receivables                                 2,279          3,231
     Total current assets                              82,377         78,396
 
     Property, plant and equipment, net                 7,608          4,444
     Construction in progress                           2,593          3,408
     Deferred tax assets                                   99            102
 
     Total assets                                      92,677         86,350
     Liabilities and Shareholders' Equity
     Current liabilities:
       Short term bank loans                            6,376          6,355
       Accounts payable                                 5,560          3,535
       Income tax                                       1,282            953
       Advance from customers                           4,668          5,065
       Other Payable                                   12,834         13,381
     Total current liabilities                         30,720         29,289
     Minority interest                                      -              -
     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             73
       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                      23,577         23,556
       Reserves                                         3,617          3,595
       Retained earnings                               33,020         29,528
       Accumulated other comprehensive income           2,474          1,127
                                                       62,761         57,879
       Less: Treasure shares at cost, common
        stock-206,470 in 2007 and 208,470 in 2006        (804)          (818)
     Total shareholders' equity                        61,957         57,061
 
     Total liabilities and shareholders' equity        92,677         86,350
 
 
 
     Jinpan International Limited and Subsidiaries
     Consolidated Statements of Cash Flows
     For the Nine Months Ended September 30, 2007 (Unaudited)
 
                                                           Nine          Nine
                                                         months        months
                                                          ended         ended
                                                        Sept. 30      Sept. 30
                                                           2007          2006
     Operating activities
       Net income                                         9,824         4,798
         Adjustments to reconcile net income to
          net cash provided by/(used in)
          operating activities:
           Depreciation                                     762           614
           Deferred Income Tax                                6             -
           Provision for Doubtful Debt                      373           (36)
           Loss/(Gain) on disposal of fixed assets            8             -
           Employee Stock based compensation                 21             -
           Minority interest                                  -           923
         Changes in operating assets and liabilities
           Accounts receivable                          (13,207)       (5,839)
           Notes receivable                                 188           451
           Inventories                                   (2,152)       (4,692)
           Prepaid expenses                              (4,736)       (1,926)
           Other receivables                               (707)       (1,219)
           Accounts payable                                (845)       (1,160)
           Note Payable                                  (1,043)            -
           Income tax                                       660           690
           Advance from customers                           851         2,092
           Other liabilities                              1,980         1,636
     Net cash provided by/(used in)
      operating activities                               (8,017)       (1,348)
     Investing activities
       Purchases of property, plant and equipment        (4,018)         (754)
       Proceeds from sales of property, plant
        and equipment                                        18             -
       Payment for construction in progress                (795)         (739)
       Purchase of available-for -sales securities            -             -
     Net cash provided by (used in) investing
      activities                                         (4,795)       (1,493)
       Financing activities
       Proceeds from bank loan                            9,309        12,729
       Repayment of bank loan                            (9,157)      (12,982)
       Acquisition of treasury stock                          -             -
       Proceeds from exercise of stock options               34           308
       Decrease in dividend payable to
        minority shareholders                                 -          (680)
       Acquired minority interest                       (11,000)            -
       Dividends paid                                    (1,931)       (1,594)
     Net cash provided by/(used in)
      financing activities                              (12,745)       (2,219)
     Effect of exchange rate changes on cash                662            87
     Net increase/(decrease) in cash and
      cash equivalents                                  (24,895)       (4,973)
     Cash and cash equivalents at
      beginning of period                                34,115         8,020
     Cash and cash equivalents at end of period           9,220         3,047
 
     Interest paid                                          274           194
     Income taxes paid                                    1,282           384
 
 

SOURCE Jinpan International Ltd

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