Jinpan International Reports Third Quarter 2012 Financial Results

14 Nov, 2012, 06:30 ET from Jinpan International Ltd.

CARLSTADT, N.J., Nov. 14, 2012 /PRNewswire/ -- Jinpan International Ltd. (Nasdaq: JST), a leading designer, manufacturer, and distributor of cast resin transformers, today announced the unaudited consolidated financial results for the third quarter ended September 30, 2012. 

Third Quarter 2012 Results Net sales for the third quarter were $58.8 million, an 11.7% decrease from $66.6 million in the same period last year.  The decrease in sales was primarily the result of lower domestic China sales compared to the prior year period.  In the third quarter, domestic China sales accounted for $51.6 million, or 87.8% of net sales, compared to $59.1 million, which also represented 88.7% of net sales in the same period last year. Net sales outside of China for the quarter were $7.2 million, or 12.2% of net sales compared to $7.5 million, or 11.3% of net sales for the same period last year.

The sales of cast resin transformers (excluding those for wind power applications), switchgears and unit substations represented $55.2 million, or 93.9% of net sales in the third quarter, while wind energy products (cast resin transformers and VPI products for wind power applications) represented $3.6 million, or 6.1% of net sales during this quarter.

Gross profit in the third quarter decreased 21.4% year over year to $19.6 million from $24.9 million in the same period last year.  Third quarter 2012 gross profit margin was 33.3%, compared to 37.4% in the prior year period, and 30.8% in the 2012 second quarter. Gross margin decreased in the third quarter mainly due to lower gross margin on recently introduced products. 

Selling and administrative expenses in the third quarter were $14.8 million, or 25.2% of net sales, compared to $16.5 million, or 24.8% of net sales in the same period last year.   Selling expenses decreased in the third quarter due to lower domestic product sales.

Operating income for the third quarter decreased 43.2% to $4.8 million, or 8.1% of net sales, from $8.4 million, or 12.7% of net sales, in the same period last year.

Net income for the third quarter decreased 53.7% to $3.9 million, or $0.23 per diluted share, from $8.4 million, or $0.51 per diluted share, in the same period last year.  Third quarter net income as a percentage of net sales was 6.6% compared to 12.6% in the same period last year.

Mr. Zhiyuan Li, Chief Executive Officer of Jinpan, commented, "For the first nine months of 2012, while our top line was in line with the prior year period, our bottom line was lower mainly due to lower gross margin on sales of  gas insulated switchgears and  certain types of VPI products. We priced these recently introduced products aggressively to penetrate the market.  Despite a softer economic environment in China, we were able to expand our cast resin transformer sales volume by 3% in the first nine months of 2012 compared to the same period last year.  We also took steps to improve efficiency and reduce costs, including a reduction in headcount within our administrative and manufacturing departments."

"Our Guilin facility is on schedule to complete its first phase of construction by year end and commence production by the end of the 2013 first quarter. As this new facility gradually ramps its production, more production capacity is expected to come on line throughout 2013 allowing us to capture a greater share of China's market for standard cast resin transformers."

"At the end of September, we had a backlog of approximately $104 million, of which we expect over 41% of this backlog to be shipped in the fourth quarter. In addition, we continue to receive meaningful orders in the fourth quarter enabling us to meet our full year sales revenue guidance.  We have modified our bottom line full year guidance to reflect pricing pressure associated with lower silicon steel costs, the primary component of our cast resin transformers.  As we look to 2013, we believe the once-a-decade leadership change at the national level can result in increased spending on domestic infrastructure projects positioning us well for new order flow in our domestic business, particularly in the second half of the next year.  We remain confident in our current and long-term operating initiatives which can improve our future revenue and profit growth."

Balance Sheet As of September 30, 2012, the Company had $16.0 million in cash and cash equivalents, compared to $24.2 million at December 31, 2011. The Company's accounts receivable on September 30, 2012 totaled $132.8 million, compared to $110.4 million at December 31, 2011.  Notes payable in the 2012 third quarter decreased to $10.2 million compared to $13.6 million on December 31, 2011.  Total bank loans outstanding at September 30, 2012 were $33.9 million, compared to $23.0 million at December 31, 2011 and $45.3 million at June 30, 2012.

Financial Outlook For the full year 2012, the Company currently anticipates net sales of $208-$219 million, a decrease of 0% to 5% compared to 2011, net income of $13.2-$14.3 million, a decrease of 40% to 45% compared to 2011, and gross profit margin of approximately 33% to 34% of net sales.

Conference Call Information Jinpan's management will host an earnings conference call on November 14th, 2012 at 8:30 a.m. U.S. Eastern Time.  Listeners may access the call by dialing #1-913-312-0686.  A webcast will also be available via www.viavid.net.  A replay of the call will be available through November 28th, 2012.  Listeners may access the replay by dialing #1-858-384-5517, access code: 4077527.

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 office 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, 2011 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, 2012

 

Three months 

ended

Sept 30

Three months 

ended

Sept 30

Nine

months 

ended

Sept 30

Nine

months 

ended

Sept 30

2012

2011

2012

2011

(In thousands, except per share data)

US$

US$

US$

US$

Net sales

58,832

66,641

157,115

154,793

Cost of Goods Sold

(39,225)

(41,698)

(104,635)

(96,663)

Gross Margin

19,607

24,943

52,480

58,130

Operating Expenses

Selling and administrative

(14,819)

(16,508)

(39,922)

(38,074)

Operating income

4,788

8,435

12,558

20,056

Interest Expenses

(355)

(418)

(1,441)

(865)

Other Income

357

1,485

936

1,996

Income before income taxes

4,790

9,502

12,053

21,187

Income taxes

(886)

(1,072)

(1,827)

(2,739)

Net income

3,904

8,430

10,226

18,448

Earnings per share

-Basic

US$0.24

US$0.52

US$0.63

US$1.14

-Diluted

US$0.23

US$0.51

US$0.61

US$1.12

Weighted average number of shares

-Basic

16,168,251

16,163,696

16,168,251

16,163,696

-Diluted

16,709,705

16,452,359

16,718,793

16,426,253

                                                                                                              

 

Jinpan International Limited and Subsidiaries Consolidated Balance Sheets

 

Unaudited

Audited

September  30,

December 31,

2012

2011

US$

US$

Assets

Current assets:

Cash and cash equivalents

15,955

24,218

Restricted cash

854

322

Notes receivable

10,243

19,114

      Accounts receivable, net

132,754

110,382

Inventories

37,094

36,675

Prepaid expenses

11,325

13,251

Other receivables

7,866

3,878

Total current assets

216,091

207,840

Property, plant and equipment, net

39,408

37,102

Construction in progress

17,018

2,406

Land use right

15,200

15,523

Intangible asset-Goodwill

13,328

13,371

Other assets

70

76

Deferred tax assets

1,295

1,044

Total assets

302,410

277,362

Liabilities and Shareholders' Equity

Current liabilities:

Short term bank loans

15,008

21,426

Accounts payable

26,983

22,833

Notes Payable

10,276

13,611

Tax Payable

2,000

2,335

Advance from customers

15,912

12,642

Other Payable

22,008

22,072

Total current liabilities

92,187

94,919

Long TermLoan

18,903

1,550

Deferred Income

2,859

-

Shareholders' equity:

Common stock, US$0.0045 par value:

Authorized shares - 40,000,000

Issued and outstanding shares – 16,395,456 in 2012

and  2011

74

74

Common Stock, Warrants

-

854

Convertible preferred stock, US$0.0045 par value:

Authorized shares – 2,000,000

Issued and outstanding shares –none in 2012

and 2011

-

-

Additional paid-in capital

37,179

36,114

Reserves

12,023

12,023

Retained earnings

121,010

111,915

Accumulated other comprehensive income

18,633

20,392

188,919

181,372

  Less: Treasury shares at cost, common stock-215,306 in 2012 and  227,306 in 2011

(458)

(479)

Total shareholders' equity

188,461

180,893

Total liabilities and shareholders' equity

302,410

277,362

 

 

Jinpan International Limited and Subsidiaries Consolidated Statements of Cash Flows For the Nine Months Ended September 30, 2012 (Unaudited)

 

Nine months ended September 30

Nine months ended  September 30

2012

2011

Operating activities

Net income

10,226

18,448

Adjustments to reconcile net income to

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

Depreciation

3,822

3,153

Provision for Doubtful Debt

1,604

696

Loss/(Gain) on disposal of fixed assets

(4)

12

Deferred Income Tax

(255)

(58)

     Deferred Income

2,859

-

     Stock-based compensation cost

211

184

Changes in operating assets and liabilities

Restricted cash

(534)

1,036

Accounts receivable

(24,325)

( 31,475)

Notes receivable

8,811

(4,539)

Inventories

(536)

(13,750)

Prepaid expenses

1,885

(1,784)

Other receivables

(3,994)

166

Accounts payable

4,223

8,160

Notes Payable

(3,292)

(17,773)

Income tax

(328)

909

Advance from customers

3,310

8,588

Other liabilities

(58)

5,717

Net cash provided by/(used in) operating activities

3,625

(22,310)

Investing activities

Purchases of property, plant and equipment

(6,270)

(4,257)

Proceeds from sales of property, plant and equipment

28

31

Payment for construction in progress

(14,619)

-

     Long Term Prepaid Lease

273

243

Net cash provided by (used in) investing activities

(20,588)

(3,983)

Financing activities

Proceeds from bank loan

46,890

27,555

Repayment of bank loan

(35,881)

(13,627)

Proceeds from exercise of stock options

22

-

Dividends paid

(2,264)

(2,264)

Net cash provided by/(used in) financing activities

8,767

11,664

Effect of exchange rate changes on cash

(67)

829

Net increase/(decrease) in cash and cash equivalents

(8,263)

(13,800)

Cash and cash equivalents at beginning of year

24,218

27,527

Cash and cash equivalents at end of the period

15,955

13,727

Interest paid

1,418

879

Income taxes paid

2,397

1,758

 

SOURCE Jinpan International Ltd.