Jinpan International Reports Second Quarter 2015 Financial Results

* Second quarter revenue increased 20.2% year-over-year to RMB483.8 million (US$79.1 million)

* Second quarter net income increased 6.5% year-over-year to RMB34.5 million (US$5.6 million), or RMB2.06 (US$0.34) per share

* Fiscal 2015 earnings outlook: revenue expected to increase 9-12% to approximately RMB1.60 billion to RMB1.65 billion (US$261 million to US$270 million); earnings per share are expected to be RMB5.64 to RMB5.80 (US$0.92 to US$0.95) per share.

Aug 11, 2015, 16:05 ET from Jinpan International Limited

CARLSTADT, N.J., Aug. 11, 2015 /PRNewswire/ -- Jinpan International Limited (Nasdaq: JST), a leading designer, manufacturer, and distributor of cast resin transformers, today reported unaudited consolidated financial results for the second quarter ending June 30, 2015. This announcement contains translations of certain RMB amounts into U.S. dollars at specified rates solely for the convenience of the reader. All translations from RMB to U.S. dollars are made at a rate of RMB6.1136 to US$1.00, the rate published by China administration of foreign exchange on June 30, 2015.

Second Quarter 2015 Results

Net sales for the second quarter were RMB483.8 million (US$79.1 million), a 20.2% increase from RMB 402.5 million (US$65.8 million) in the same period last year.  The increase was driven by continued strength in sales of switchgear and unit substations, a ramp-up in sales to the Company's newest OEM customer, and moderate growth in sales of transformers. 

In the second quarter, China sales increased 21.1% year-over-year to RMB415.1 million (US$67.9 million), or 85.8% of net sales, compared to RMB342.6 million (US$56.0 million), or 85.1% of net sales in the same period last year. Net sales outside of China for the second quarter increased 14.7% year-over-year to RMB68.7 million (US$11.2 million), or 14.2% of net sales, compared to RMB59.9 million (US$9.8 million), or 14.9% of net sales, for the same period last year.

Sales of cast resin transformers increased 11.1% year-over-year to RMB285.5 million (US$46.7 million), or 59.0% of net sales, compared to RMB257.0 million (US$42 million) or 63.9% of net sales, for the same period last year. Sales of our integrated products, including switchgear and unit substations, increased 56.6% year-over-year to RMB124.4 million (US$20.4 million), or 25.7% of sales, compared to RMB79.4 million (US$13.0 million), or 19.7% of net sales, for the same period last year. 

Sales to OEM customers increased 24.6% year-over-year to RMB89.8 million (US$14.7 million), or 18.6% of net sales, compared to RMB72.1 million (US$11.8 million), or 17.9% of net sales in the same period last year.

Gross profit in the second quarter decreased 3.0% year over year to RMB130.8 million (US$21.4 million) from RMB134.8 million (US$22.0 million) in the same period last year.  Second quarter 2015 gross profit margin was 27.0%, compared to 33.5% in the prior year period. Gross margin in the second quarter decreased compared to the same period last year primarily due to increased materials prices and an increased mix of sales of switchgear and unit substations, which carry lower gross margins.

Selling and administrative expenses in the second quarter were RMB94.6 million (US$15.5 million), or 19.6% of net sales, compared to RMB95.4 million (US$15.6 million), or 23.7% of net sales in the same period last year.  Selling and administrative expenses decreased slightly from the same period last year due to lower selling expense partially offset by increased research and development expense, while general and administrative expenses remained roughly flat.   

Operating income for the second quarter decreased 8.1% to RMB36.2 million (US$5.9 million), or 7.5% of net sales, from RMB39.4 million (US$6.4 million), or 9.8% of net sales, in the same period last year.

Net income for the second quarter increased 6.5% to RMB34.5 million (US$5.6 million), or RMB2.06 (US$0.34) per diluted share, compared to RMB32.4 million (US$5.3 million), or RMB1.95 (US$0.32) per diluted share, in the same period last year.  Second quarter net income, as a percentage of net sales, was 7.1% compared to 8.0% in the same period last year.

Mr. Zhiyuan Li, Chief Executive Officer of Jinpan International, stated, "Our second quarter sales of RMB 438.8 million (US$79.1 million) exceeded our expectations and represented a historical quarterly record.  The strong sales performance reflects the results of our concerted effort to increase sales volume to offset margin pressure within the industry.  This strategy is enabled by the increased production capacity and competitive cost structure of our Guilin production facility." 

"During the second quarter we experienced many of the same positive dynamics that we have seen over the past several quarters. Our product sales continued to diversify, driven by a strong increase in sales of switchgear and unit substations.  Sales to our OEM customers increased as our newest OEM, a leading global wind turbine manufacturer, ramped up shipments during the quarter." 

"While our gross margins improved from the first quarter, we continued to experience margin pressure due to rising materials cost and product mix. Foreign currency exchange rates also negatively impacted our earnings due to fluctuations in the valuation of the Euro during the quarter. We remained focused on managing our working capital and our days sales outstanding demonstrated a slight improvement."   

"Jinpan operates in a cyclical industry closely tied to China's economic environment, which is experiencing decelerating growth.  We are focused on navigating the current industry down-cycle through disciplined execution and fiscal conservatism, with a vision to enter the recovery period in a more dominant competitive position within the market."

"At the end of June 2015, our backlog equaled RMB937 million (US$153 million), up 28.6% from the same period last year and up 7.5% from the first quarter of 2015." 

Balance Sheet

As of June 30, 2015, the Company had RMB125.8 million (US$20.6 million) in cash and cash equivalents, restricted cash, and short term investments, compared to RMB168.5 million (US$27.5 million) as of December 31, 2014. The Company's net accounts receivable on June 30, 2015 totaled RMB1.07 billion (US$174.2 million), compared to RMB858.0 million (US$140.2 million) as of December 31, 2014.  Total bank loans outstanding at June 30, 2015 were RMB160.3 million (US$26.2 million), compared to RMB160.6 million (US$26.2 million) at December 31, 2014. 

Financial Outlook

For the full year 2015, the Company projects revenue growth of approximately 9-12% compared to 2014.  Net sales are expected to be approximately RMB1.60 billion to RMB1.65 billion (US$261 million to US$270 million). Net income is expected to be in a range of approximately RMB93.8 million to RMB96.6 million (US$15.3 million to US$15.8 million).  Earnings per share are expected to be RMB5.64 to RMB5.80 (US$0.92 to US$0.95) per share.

Conference Call Information

Jinpan's management will host a conference call and webcast at 4:30 p.m. ET on Tuesday, August 11, 2015. The conference call can be accessed by dialing 1-888-389-5988 (toll free) or 1-719-457-2645 (international).  A webcast will also be available via http://public.viavid.com, with event ID: 115666.  A replay of the call will be available through August 18, 2015, by dialing 1-877-870-5176, access code 7758500.   

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, 2014 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

For the Three Months Ended June 30, 2015

Three months ended

June 30,

2015

2015

2014

 US$

 RMB

 RMB

In thousands, except per share data

 (unaudited)

 (unaudited)

 (unaudited)

Net Sales

79,128

483,756

402,487

Cost of Goods Sold

(57,725)

(352,908)

(267,642)

Gross Profit

21,403

130,848

134,845

Selling and Administrative Expenses

(15,478)

(94,626)

(95,422)

Operating income

5,925

36,222

39,423

Interest Expense

(395)

(2,416)

(3,743)

Other Income

1,043

6,377

3,257

Income Before Income Taxes

6,573

40,183

38,937

Income Taxes

(937)

(5,725)

(6,572)

Net Income After Taxes

5,636

34,458

32,365

Other Comprehensive Income (Loss)

Foreign Currency Translation Adjustment

(15)

(93)

(26)

Total Comprehensive Income

5,621

34,365

32,339

Earnings per Share

Basic

US$0.35

RMB 2.12

RMB 1.99

Diluted

US$0.34

RMB 2.06

RMB 1.95

Weighted Average Number of Shares

Basic

16,232,381

16,232,381

16,231,769

Diluted

16,752,929

16,752,929

16,637,117

 

Jinpan International Limited and Subsidiaries

Consolidated Statements of Comprehensive Income

For the Six Months Ended June 30, 2015

Six months ended

June 30,

2015

2015

2014

 US$

 RMB

 RMB

In thousands, except per share data

 (unaudited)

 (unaudited)

 (unaudited)

Net Sales

137,522

840,752

655,523

Cost of Goods Sold

(101,508)

(620,578)

(442,353)

Gross Profit

36,014

220,174

213,170

Selling and Administrative Expenses

(27,951)

(170,878)

(161,877)

Operating income

8,063

49,296

51,293

Interest Expense

(805)

(4,924)

(7,466)

Other Income

1,090

6,667

5,900

Income Before Income Taxes

8,348

51,039

49,727

Income Taxes

(1,214)

(7,423)

(8,072)

Net Income After Taxes

7,134

43,616

41,655

Other Comprehensive Income (Loss)

Foreign Currency Translation Adjustment

(2)

(11)

73

Total Comprehensive Income

7,132

43,605

41,728

Earnings per Share

Basic

US$0.44

RMB 2.69

RMB 2.57

Diluted

US$0.43

RMB 2.60

RMB 2.50

Weighted Average Number of Shares

Basic

16,232,381

16,232,381

16,231,769

Diluted

16,752,929

16,752,929

16,645,156

 

Jinpan International Limited and Subsidiaries

Consolidated Balance Sheet

(Unaudited)

(Unaudited)

(Audited)

June 30, 2015

June 30, 2015

December 31, 2014

In thousands, except per share data

$US

RMB

RMB

Assets

Current Assets

Cash and bank

10,979

67,122

80,826

Restricted Cash

3,876

23,699

7,210

Short Term Investment

5,725

35,000

80,500

Notes receivable

11,670

71,343

70,718

Accounts receivable, net

174,224

1,065,134

858,037

Inventories

65,370

399,647

305,967

Prepayments

20,496

125,304

127,619

Deferred Tax Assets

3,062

18,719

15,388

Other receivables

10,576

64,656

42,229

305,978

1,870,624

1,588,494

Fixed Assets

Property, plant and equipment, net

70,726

432,390

452,660

Construction in progress

2,615

15,989

16,481

Intangible Assets

13,780

84,245

84,245

Prepaid leases

14,680

89,751

90,902

Other assets

17

105

649

TOTAL ASSETS

407,796

2,493,104

2,233,431

Current Liabilities

Short term loans

-

-

-

Accounts payable

43,518

266,050

228,633

Notes Payable

42,758

261,408

89,733

Advances from customers

23,587

144,203

131,946

Other payables

30,148

184,310

192,687

Taxes payable

2,134

13,049

12,389

Total current liabilities

142,145

869,020

655,388

Long Term Loans

26,228

160,347

160,553

Deferred Income

5,770

35,276

30,377

Total Liabilities

174,143

1,064,643

846,318

Shareholders' Equity

Convertible preferred stock, US$0.0045 par value:

-

-

-

Authorized shares - 2,000,000

Issued and outstanding shares - none in 2015 & 2014

Common stock, US$0.0045 par value:

99

606

606

Authorized shares - 40,000,000

Issued and outstanding shares - 16,418,456 in 2015 and 2014

Additional paid-in capital

48,931

299,148

298,418

Reserves

15,373

93,985

93,985

Retained earnings

170,388

1,041,683

1,001,054

Accumulated other comprehensive income

(631)

(3,859)

(3,848)

234,160

1.431,563

1,390,215

Less: Treasury shares at cost

Common stock - 135,488 in 2015 and  2014

(507)

(3,102)

(3,102)

Total Shareholders' Equity

233,653

1,428,461

1,387,113

Total Liabilities and Shareholders' Equity

407,796

2,493,104

2,233,431

 

Jinpan International Limited and Subsidiaries

Consolidated Statement of Cash Flows

For the Six Months Ended June 30, 2015

Six Months Ended June 30

2015

2015

2014

US$

RMB

RMB

(Unaudited)

(Unaudited)

(Unaudited)

In thousands

Operating Activities

      Net Income

7,134

43,616

41,655

      Adjustments to reconcile net income to

           Net Cash provided by (used in) operating activities:

           Depreciation

4,107

25,106

19,510

           Amortization of prepaid lease

188

1,151

724

           Deferred Income Tax

(486)

(2,969)

(2,244)

           Provision for doubtful debts

2,210

13,509

13,252

           Loss/(gain) on disposal of fixed assets

-

-

-

           Stock-based compensation Cost

119

730

994

      Changes in operating assets and liabilities

           Restricted Cash

(2,697)

(16,489)

2,722

           Accounts Receivable

(36,084)

(220,605)

(60,352)

           Notes Receivable

(102)

(625)

23,010

           Inventories

(15,324)

(93,680)

(51,858)

           Prepaid Expenses

379

2,315

(16,625)

           Other Receivable

(3,639)

(22,245)

(7,801)

           Accounts Payable

6,120

37,416

13,241

           Notes Payable

28,081

171,675

3,169

           Income Tax

108

659

(5,379)

           Advance From customers

2,005

12,257

(6,404)

           Other liabilities

(1,370)

(8,376)

(13,842)

Net Cash provided by (used in) operating activities

(9,251)

(56,555)

(46,228)

Investing activities

     Purchases of property, plant and equipment

(711)

(4,344)

(6,113)

     Proceeds from sales of property, plant and equipment

-

-

-

     Payment for construction in progress

-

-

(2,896)

     Sell of S/T Investment

70,403

430,415

156,000

     Increase in S/T investment

(62,960)

(384,915)

(155,000)

     Receipt of government grant for new plant construction

801

4,900

-

Net Cash provided by (used in) investing activities

7,533

46,056

(8,009)

Financing activities

     Proceeds from bank loan

-

-

60,297

     Repayment of bank loan

(33)

(206)

(66,666)

     Proceeds from exercised stock options

-

-

96

     Dividend paid

(489)

(2,988)

(7,978)

Net Cash provided by (used in) financing activities

(522)

(3,194)

(14,251)

Effect of exchange rate changes on cash

(1)

(11)

105

Net increase/(decrease) in cash and cash equivalents

(2,241)

(13,704)

(68,383)

Cash and Cash equivalents at beginning of year

13,220

80,826

149,874

Cash and Cash equivalents at end of year

10,979

67,122

81,491

Interest paid

545

3,333

5,367

Income Tax paid

1,459

8,922

15,683

 

SOURCE Jinpan International Limited



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