See more news releases in: Oil & Energy, Earnings, Earnings Forecasts & Projections
Jinpan International Reports Third Quarter 2009 Financial Results
-- 3Q09 Gross Margin Increases 12.3% to 43.7% Compared to 3Q08--
-- 3Q09 Operating Income Increases 34.0% to $9.8 Million Compared to 3Q08 --
--3Q09 Net Income increases 81.6% to $9.4 Million Compared to 3Q08 -
-- Raises FY09 Net Income and Diluted EPS Estimates --
CARLSTADT, N.J., Nov. 17 /PRNewswire-FirstCall/ -- Jinpan International Ltd (Nasdaq: JST), a leading designer, manufacturer and distributor of cast resin transformers for high voltage distribution equipment, today announced consolidated financial results for the third quarter ended September 30, 2009.
Net sales for the third quarter were $43.9 million, a 1.8% decrease from $44.7 million over the same period last year. The decrease in sales was primarily a result of reduction of material costs being passed onto customers in the form of lower unit prices. However, the overall sales volume for the first nine months increased 20% to 25% depending on the product line compared to the same period last year. In the third quarter, net sales outside of China increased 40% to $8.1 million, or 18.5% of net sales, compared to $5.8 million, or 13.0% of net sales in the same period last year. Sales of cast resin transformers (excluding those for wind power applications), switch gears and unit substations represented $36 million, or 82% of net sales in the third quarter, while wind energy products represented $7.9 million, or 18% of net sales in the third quarter.
Gross margin in the third quarter was $19.2 million, a 37.1% increase from $14.0 million, in the same period last year. Third quarter gross margin increased 12.3% to 43.7% compared to 31.4% in the same period last year. The Company benefited from a lower cost of sales on an absolute basis due to lower raw material prices compared to the same period last year.
Selling, general and administrative expenses in the third quarter were $9.4 million, or 21.4% of net sales, versus $6.7 million, or 15.0% of net sales in the same period last year. Such expenses increased primarily due to increase in R&D expenses and additional overhead costs at the Company's Wuhan facility, which was not fully operational in 2008, and at the Company's Shanghai facility, which was not operating during the same period last year.
Operating income increased to $9.8 million, or 22.3% of net sales, a 34.0% increase compared to $7.3 million, or 16.4% of net sales in the same period last year.
Net income for the third quarter was $9.4 million, or $1.15 per diluted share, an 81.6% increase compared with $5.2 million, or $0.63 per diluted share, in the same period last year. Third quarter net income as a percentage of net sales was 21.3% as compared to 11.5% in the same period last year. Net income benefited from a lower tax rate in the third quarter as sales generated from the Company's Wuhan facility are exempt from taxes in 2009.
Mr. Zhiyuan Li, Chief Executive Officer of Jinpan commented, "We are pleased to announce solid financial performance in the third quarter. Jinpan recorded favorable gross margins of 43.7% because of lower raw materials prices on a year over year basis. For the fourth quarter of 2009, we believe gross margins will be closer to the levels of 34% - 37%.
"We were also pleased to see an increase in orders from our international business segment. Our international customers are placing orders for cast resin transformers that benefit wind power applications as well as our more traditional power generation applications typically used in urban settings (such as trains and subways, hospitals, airports and office buildings), industrial (factories) and commercial development settings (processing plants, data centers).
"Our Wuhan facility is now operating at approximately 90% of capacity and is driving significant sales with the added benefit of enjoying a tax exemption for the remainder of this year. Our Shanghai facility became operational in the third quarter of 2009 and the facility is starting to contribute to our revenue stream. These two facilities ensure that we can meet the growing demand for our conventional power distribution and wind energy products.
"As we evaluate our financial performance for the fourth quarter, we anticipate order volume to grow but that pricing will come under pressure in conjunction with the lower raw materials prices. Overall, we believe Jinpan remains well positioned to manage our business for growth this year and beyond. We look forward to capitalizing on our opportunities and enhancing value for our shareholders," concluded Mr. Li.
Balance Sheet
As of September 30, 2009, the Company had $38.1 million of cash and cash equivalents, compared to $16.7 million at December 31, 2008. The Company's accounts receivables on September 30, 2009 totaled $63.4 million, compared to $58.8 million at December 31, 2008.
Financial Outlook
For the full year 2009, the Company currently anticipates net sales of approximately $154 million to $159 million, a 0% to 3% increase over 2008 sales of $154 million. The Company now estimates its net income to be approximately $28 million to $29 million, a 40% to 46% increase over 2008 net income of $19.8 million. The Company anticipates that diluted earnings per share for 2009 will be between $3.40 to $3.54 per share.
Foreign Currency Translation
Our assets and liabilities are translated into United States dollars at the period-end exchange rate which is RMB 6.829 to 1 US dollar as of September 30, 2009. Revenues and expenses are translated into United Stated dollars at weighted average exchange rates which is RMB 6.826 to 1 US dollar for the period from January 1, 2009 to September 30, 2009. Equity transactions are translated using historical rates.
Conference Call Information
Jinpan's management will host an earnings conference call on November 17, 2009 at 8:30 a.m. U.S. Eastern Time. Listeners may access the call by dialing #1-719-325-4836. A webcast will also be available at www.viavid.net. A replay of the call will be available through December 1, 2009. Listeners may access the replay by dialing #1-719-457-0820, access code: 8254408.
About Jinpan International Ltd
Jinpan International Ltd. (Nasdaq: JST) designs, manufactures and distributes cast resin transformers for voltage distribution equipment in China and other countries around the world. Jinpan's cast resin transformers allow high voltage transmissions of electricity to be distributed to various locations at lower, more usable voltage levels. 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 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 include, but are not limited to, the following:
- our ability to successfully implement our business strategy;
- the impact of existing and new competitors in the markets in which we compete, including competitors that may offer less expensive products and services, more desirable or innovative products or technological substitutes, or have more extensive resources or better financing;
- the effects of rapid technological changes and vigorous competition in the markets in which we operate;
- uncertainties about the future growth in electricity consumption and infrastructure development in the markets in which we operate;
- uncertainties about the degree of growth in the number of consumers in the markets in which we operate using mobile personal communications services and the growth in the population in those areas;
- other factors or trends affecting the industry generally and our financial condition in particular;
- the effects of the higher degree of regulation in the markets in which we operate;
- general economic and political conditions in the countries in which we operate or other countries which have an impact on our business activities or investments;
- the monetary and interest rate policies of the countries in which we operate;
- changes in competition and the pricing environments in the countries in which we operate;
- exchange rates; and
- other factors 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, 2007 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 Income (unaudited)
For the Three and Nine Month Periods Ended September 30, 2009
Three Three Nine Nine
months months months months
ended ended ended ended
Sept 30 Sept 30 Sept 30 Sept 30
2009 2008 2009 2008
---- ---- ---- ----
(In thousands, except per US$ US$ US$ US$
share data) --- --- --- ---
Net sales 43,901 44,724 117,190 109,126
Cost of Goods Sold (24,714) (30,684) (67,244) (73,789)
------- ------- ------- -------
Gross Margin 19,187 14,040 49,946 35,337
Operating Expenses
Selling and administrative (9,385) (6,725) (24,662) (18,228)
------- ------- ------- -------
Operating income 9,802 7,315 25,284 17,109
Interest Expenses 0 (451) (241) (921)
Other Income 413 186 424 556
--- --- --- ---
Income before income
taxes 10,215 7,050 25,467 16,744
Income taxes (855) (1,895) (2,741) (3,156)
------------ ----------- ------ ------
Net Income 9,360 5,155 22,726 13,588
===== ===== ====== ======
Earnings per share
-Basic US$1.17 US$0.65 US$2.84 US$1.70
======= ======= ======= =======
-Diluted US$1.15 US$0.63 US$2.80 US$1.67
======= ======= ======= =======
Weighted average number
of shares
-Basic 8,008,699 7,987,214 8,008,699 7,987,214
-Diluted 8,122,330 8,147,342 8,122,330 8,147,342
Jinpan International Limited and Subsidiaries
Consolidated Balance Sheets (unaudited)
September December
30, 31,
2009 2008
---- ----
(In thousands) US$ US$
Assets
Current assets:
Cash and cash equivalents 38,132 16,739
Accounts receivable, net 63,444 58,793
Inventories 22,038 31,868
Prepaid expenses 18,121 4,713
Other receivables 8,430 7,317
----- -----
Total current assets 150,165 119,430
Property, plant and equipment, net 23,983 18,213
Construction in progress 1,577 6,055
Land use right 6,061 6,098
Intangible asset-Goodwill 12,336 12,348
Deferred tax assets 304 301
--- ---
Total assets 194,426 162,445
======= =======
Liabilities and Shareholders' Equity
Current liabilities:
Short term bank loans - 11,726
Accounts payable 8,210 11,300
Notes Payable 26,358 -
Tax Payable 2,031 3,671
Advance from customers 5,858 7,828
Other Payable 23,189 20,733
------ ------
Total current liabilities 65,646 55,258
Shareholders' equity:
Common stock, US$0.009 par value:
Authorized shares - 20,000,000
Issued and outstanding shares - 8,209,684 in
2009 and 8,189,684 in 2008 74 73
Common Stock, Warrants 854 854
Convertible preferred stock, US$0.009 par value:
Authorized shares - 1,000,000
Issued and outstanding shares - 3,044 in
2008 and 2009 - -
Additional paid-in capital 34,368 34,035
Reserves 3,906 3,906
Retained earnings 81,080 60,296
Accumulated other comprehensive income 9,167 8,812
----- -----
129,449 107,976
Less: Treasure shares at cost, common
stock-186,179 in 2009 and 202,470 in 2008 (669) (789)
---- ----
Total shareholders' equity 128,780 107,187
------- -------
Total liabilities and shareholders' equity 194,426 162,445
======= =======
Jinpan International Limited and Subsidiaries
Consolidated Statements of Cash Flows
For the Nine Months Ended September 30, 2009 (Unaudited)
Nine Nine
months months
ended ended
September September
30 30
2009 2008
---- ----
(In thousands) US$ US$
Operating activities
Net income 22,726 13,588
Adjustments to reconcile net income to net
cash provided by/(used in) operating activities:
Depreciation 2,219 1,109
Provision for Doubtful Debt 30 (298)
Loss on disposal of fixed assets - 7
Deferred Income Tax (4) 58
Stock-based compensation cost 307 183
Changes in operating assets and liabilities
Accounts receivable (4,739) (13,553)
Notes receivable (1,141) -
Inventories 9,804 (7,654)
Prepaid expenses (13,419) (3,585)
Other receivables 19 (2,588)
Accounts payable (3,081) 4,380
Note Payable 26,371 -
Income tax (1,638) 922
Advance from customers (1,963) 1,266
Other liabilities 2,913 6,985
----- -----
Net cash provided by operating activities 38,404 820
Investing activities
Purchases of property, plant and equipment (3,471) (8,853)
Proceeds from sales of property, plant and
equipment - 2
Payment for construction in progress - (6,966)
Purchase of available-for -sales securities - (511)
-- ----
Net cash (used in) investing activities (3,471) (16,328)
Financing activities
Proceeds from bank loan 4,851 25,921
Repayment of bank loan (16,571) (14,124)
Proceeds from exercise of stock options 147 -
Dividends paid (1,942) (1,934)
------ ------
Net cash (used in)/provided by financing
activities (13,515) 9,863
Effect of exchange rate changes on cash (25) 852
--- ---
Net increase/(decrease) in cash and cash
equivalents 21,393 (4,793)
Cash and cash equivalents at beginning of year 16,739 17,122
------ ------
Cash and cash equivalents at end of the period 38,132 12,329
====== ======
Interest paid 377 843
Income taxes paid 3,389 1,812
SOURCE Jinpan International Ltd.
Back to top
Custom Packages
Browse our custom packages or build your own to meet your unique communications needs.
PR Newswire Membership
Fill out a PR Newswire membership form or contact us at (888) 776-0942.
Learn about PR Newswire services
Request more information about PR Newswire products and services or call us at (888) 776-0942.
Featured Video
More in These Categories
Journalists and Bloggers
Visit PR Newswire for Journalists for releases, photos, ProfNet experts, and customized feeds just for Media.
View and download archived video content distributed by MultiVu on The Digital Center.
Free Investing Newsletter from Investor Uprising!
Learn to navigate the world's financial system and profit from leading companies.
Register for Investor Uprising, the people's investment site, for a free weekly newsletter, information, education and premium research including our latest IU Confidential Report - "All The Glitters: The Ultimate Gold Report".