51job, Inc. Reports First Quarter 2010 Financial Results
SHANGHAI, May 6 /PRNewswire-Asia-FirstCall/ -- 51job, Inc. (Nasdaq: JOBS), a leading provider of integrated human resource services in China, announced today unaudited financial results for the first quarter of 2010 ended March 31, 2010.
First Quarter 2010 Financial Highlights:
-- Total revenues increased 42.6% over Q1 2009 to RMB254.3 million
(US$37.3 million), exceeding the Company's guidance range of RMB230
million to RMB240 million
-- Gross margin expanded to 64.3% compared with 56.1% in Q1 2009
-- Operating income increased to RMB61.1 million (US$8.9 million) compared
with RMB11.7 million in Q1 2009
-- Fully diluted earnings per common share were RMB0.91 (US$0.27 per ADS)
-- Excluding the impact of share-based compensation expense and foreign
currency translation loss, non-GAAP adjusted fully diluted earnings per
common share were RMB1.02 (US$0.30 per ADS), exceeding the Company's
guidance range of RMB0.68 to RMB0.78
-- Cash and short-term investments increased to RMB1,274.2 million
(US$186.7 million) as of March 31, 2010
Commenting on the results, Rick Yan, President and Chief Executive Officer of 51job, Inc., said, "Despite a late Chinese New Year which fell in mid February, the high level of recruitment activity in the post-holiday period drove better than expected revenues, which resulted in significant margin expansion and profitability in the first quarter. We observed strong market demand as many employers emerged from last year's challenging conditions with a renewed focus on growth and aggressive hiring targets. During the quarter, we also continued to acquire customers for our online business at a rapid pace. Led by this robust online segment and combined with a seasonal rebound in our print business and steady development in our other HR services, our solid first quarter results give us confidence for a successful 2010."
First Quarter 2010 Unaudited Financial Results
Total revenues for the first quarter ended March 31, 2010 were RMB254.3 million (US$37.3 million), an increase of 42.6% from RMB178.3 million for the same quarter in 2009.
Print advertising revenues for the first quarter of 2010 increased 30.9% to RMB92.4 million (US$13.5 million) compared with RMB70.6 million for the same quarter in 2009. The increase was primarily due to higher average revenue per page as well as a greater volume of print advertising pages. Although print advertising prices in each city remained relatively unchanged, overall average revenue per page increased 22.3% over the first quarter of 2009 due to an increase in page volume contribution from higher priced cities as compared to the same quarter of the prior year. Despite the termination of print operations in the cities of Tianjin and Hefei in the first quarter of this year, the estimated number of print advertising pages generated in the first quarter of 2010 increased 7.0% to 3,120 compared with 2,916 pages in the same quarter in 2009 resulting from an improvement in market demand.
Online recruitment services revenues for the first quarter of 2010 were RMB109.7 million (US$16.1 million), representing a 60.8% increase from RMB68.2 million for the same quarter of the prior year. The increase primarily resulted from a greater number of unique employers using the Company's online recruitment services, which was partially offset by lower average revenue per unique employer. Unique employers increased 76.3% to 112,245 in the first quarter of 2010 compared with 63,684 in the same quarter of the prior year driven by greater customer acceptance and usage of online recruitment services. Average revenue per unique employer decreased 8.8% in the first quarter of 2010 as compared to the same quarter in 2009 due to an increase in new customers who generally purchased introductory or other lower priced products.
Other human resource related revenues for the first quarter of 2010 increased 32.3% to RMB52.2 million (US$7.6 million) from RMB39.5 million in the same quarter of 2009 primarily due to greater market demand for our business process outsourcing, executive search and training services.
Gross profit for the first quarter of 2010 increased 63.2% to RMB154.6 million (US$22.6 million) from RMB94.7 million for the same quarter of the prior year. Gross margin, which is equal to gross profit divided by net revenues, expanded to 64.3% in the first quarter of 2010 compared with 56.1% in the same quarter in 2009 primarily due to greater economies of scale and improved efficiency.
Operating expenses for the first quarter of 2010 were RMB93.5 million (US$13.7 million) compared with RMB83.0 million for the same quarter of 2009. Operating expenses as a percentage of net revenues decreased to 38.9% for the first quarter of 2010 compared with 49.2% for the first quarter of 2009.
Sales and marketing expenses for the first quarter of 2010 increased 13.1% to RMB56.2 million (US$8.2 million) from RMB49.6 million for the same quarter of the prior year primarily due to higher advertising expenses and office expenses as compared to the same quarter in 2009.
General and administrative expenses for the first quarter of 2010 increased 12.0% to RMB37.3 million (US$5.5 million) from RMB33.3 million in the first quarter of 2009 primarily due to higher employee compensation expenses.
Income from operations for the first quarter of 2010 increased to RMB61.1 million (US$8.9 million) from RMB11.7 million for the same quarter of the prior year. The reduction in the effective tax rate to 22.8% in the first quarter of 2010 from 39.5% in the first quarter of 2009 was primarily due to the qualification of an operating entity as a High and New Technology Enterprise in December 2009, which is subject to a preferential tax rate of 15%.
Net income for the first quarter of 2010 increased to RMB50.4 million (US$7.4 million) from RMB9.4 million for the same quarter in 2009. Fully diluted earnings per common share for the first quarter of 2010 were RMB0.91 (US$0.13) compared with RMB0.17 for the same quarter in 2009. Fully diluted earnings per ADS for the first quarter of 2010 were RMB1.81 (US$0.27) compared with RMB0.34 in the first quarter of 2009.
In the first quarter of 2010, the Company recognized total share-based compensation expense of RMB6.4 million (US$0.9 million) compared with RMB7.6 million in the first quarter of 2009. The Company also recognized a foreign currency translation loss of RMB68,000 (US$10,000) in the first quarter of 2010 compared with a translation gain of RMB31,000 in the first quarter of 2009.
Excluding the impact of share-based compensation expense and foreign currency translation, non-GAAP adjusted income for the first quarter of 2010 increased to RMB56.9 million (US$8.3 million) compared with RMB17.0 million for the first quarter of 2009. Non-GAAP adjusted fully diluted earnings per common share were RMB1.02 (US$0.15) in the first quarter of 2010 compared with RMB0.30 in the first quarter of 2009. Non-GAAP adjusted fully diluted earnings per ADS in the first quarter of 2010 were RMB2.05 (US$0.30) compared with RMB0.60 in the first quarter of 2009.
As of March 31, 2010, the Company had cash and short-term investments totaling RMB1,274.2 million (US$186.7 million) compared with RMB1,214.7 million at December 31, 2009. Short-term investments consist of certificates of deposit with original maturities from three months to one year.
Business Outlook
For the second quarter of 2010, based on current market and operating conditions, the Company's revenue target is in the estimated range of RMB250 million to RMB260 million (US$36.6 million to US$38.1 million). Excluding the impact of share-based compensation expense and any foreign currency translation loss or gain, the Company's non-GAAP fully diluted earnings target for the second quarter of 2010 is in the estimated range of RMB0.95 to RMB1.05 per common share (US$0.28 to US$0.31 per ADS). The Company expects aggregate share-based compensation expense in the second quarter of 2010 to be in the estimated range of RMB6 million to RMB7 million (US$0.9 million to US$1.0 million).
Other Company News
In September 2008, the Company announced that its shareholders had approved a share repurchase program authorizing the repurchase of up to US$25 million worth of outstanding ADSs. In the first quarter of 2010, the Company repurchased 77,776 ADSs, representing 155,552 common shares, in the open market for an aggregate consideration of US$1.4 million, including transaction fees. Since the inception of this share repurchase program, the Company has repurchased a total of 923,803 ADSs, representing 1,847,606 common shares, for an aggregate consideration of US$9.2 million.
In 2010, the Company has terminated the publication of the local editions of 51job Weekly in Tianjin in January, in Hefei in March, and in Dalian and Zhengzhou in April. The Company continues to maintain sales offices in each of these cities.
In May 2010, the Company changed its newspaper contractor in Ningbo to Ningbo Evening News. No interruption in the printing and distribution of 51job Weekly is expected during the transition.
Currency Convenience Translation
For the convenience of readers, certain Renminbi amounts have been translated into U.S. dollars at the rate of RMB6.8258 to US$1.00, the noon buying rate on March 31, 2010 in New York for cable transfers of Renminbi per U.S. dollar as set forth in the H.10 weekly statistical release of the Federal Reserve Board.
Conference Call Information
Management will hold a conference call at 9:00 p.m. Eastern Time on May 6, 2010 (9:00 a.m. Shanghai / Hong Kong time zone on May 7, 2010) to discuss its first quarter 2010 results, operating performance and business outlook.
To dial in to the call, please use conference ID 4290260 and the following telephone numbers:
US: +1-877-941-2332
Hong Kong: +852-3009-5027
International: +1-480-629-9722
The call will also be available live and on replay through 51job's investor relations website, http://ir.51job.com . Please go to the website at least fifteen minutes early to register or install any necessary audio software.
Use of Non-GAAP Financial Measures
To supplement the consolidated financial statements presented in accordance with United States Generally Accepted Accounting Principles (GAAP), 51job uses non-GAAP measures of income before income tax expense, income tax expense, adjusted net income, adjusted earnings per common share and adjusted earnings per ADS, which are adjusted from results based on GAAP to exclude the impact of share-based compensation expense and foreign currency translation gain or loss. The Company believes excluding share-based compensation expense from its non-GAAP financial measures is useful for its management and investors to assess and analyze the Company's core operating results as such expense is not directly attributable to the underlying performance of the Company's business operations and do not impact its cash earnings. The Company believes excluding foreign currency translation gain or loss from its non-GAAP financial measures is useful for its management and investors as such translation gain or loss is unrelated to the Company's core business operations and will not result in cash settlement nor impact the Company's cash earnings. 51job also believes these non-GAAP measures excluding share-based compensation expense and foreign currency translation gain or loss are important in helping investors to understand the Company's current financial performance and future prospects and to compare business trends among different reporting periods on a consistent basis. The presentation of these additional measures should not be considered a substitute for or superior to GAAP results or as being comparable to results reported or forecasted by other companies. The non-GAAP measures have been reconciled to GAAP measures in the attached financial statements.
About 51job
51job, Inc. (Nasdaq: JOBS) is a leading provider of integrated human resource services in China with a strong focus on recruitment related services. Through print advertisements in 51job Weekly and online recruitment services at http://www.51job.com , 51job enables enterprises to attract, identify and recruit employees and connects millions of job seekers with employment opportunities. 51job also provides a number of other value-added human resource services, including business process outsourcing, training, executive search and salary surveys. 51job has a call center in Wuhan and a nationwide sales office network spanning 25 cities across China.
Safe Harbor Statement
Statements in this release regarding targets for the second quarter of 2010, future business and operating results constitute "forward-looking" statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the Private Securities Litigation Reform Act of 1995. These statements are based upon management's current expectations, and actual results could differ materially. Among the factors that could cause actual results to differ are the number of recruitment advertisements placed, sales orders received and customer contracts executed during the remaining weeks of the second quarter of 2010; any accounting adjustments that may occur during the quarterly close; fluctuations in the value of the Renminbi against the U.S. dollar and other currencies; behavioral and operational changes of customers in meeting their human resource needs as they respond to evolving social, economic and political changes in China as well as stock market volatilities; introduction by its competitors of new or enhanced products or services; price competition in the market for the various human resource services that the Company provides in China; acceptance of new products and services developed or introduced by the Company outside of the human resources industry and fluctuations in general economic conditions. For additional information on these and other factors that may affect the Company's financial results, please refer to the Company's filings with the Securities and Exchange Commission. 51job undertakes no obligation to update these targets prior to announcing final results for the second quarter of 2010 or as a result of new information, future events or otherwise.
- Financial tables follow -
51job, Inc.
Consolidated Statements of Operations
For the Three Months Ended
March 31, March 31, March 31,
2009 2010 2010
(In thousands, except number of shares (unaudited)(unaudited) (unaudited)
and per share data) RMB RMB USD
(Note 1)
Revenues:
Print advertising 70,564 92,369 13,532
Online recruitment services 68,247 109,709 16,073
Other human resource related
revenues 39,452 52,193 7,646
Total revenues 178,263 254,271 37,251
Less: Business and related tax (9,466) (13,763) (2,016)
Net revenues 168,797 240,508 35,235
Cost of services (Note 2) (74,092) (85,955) (12,593)
Gross profit 94,705 154,553 22,642
Operating expenses:
Sales and marketing (Note 3) (49,638) (56,154) (8,227)
General and administrative (Note 4) (33,328) (37,322) (5,467)
Total operating expenses (82,966) (93,476) (13,694)
Income from operations 11,739 61,077 8,948
Gain (Loss) from foreign currency
translation 31 (68) (10)
Interest and investment income 3,633 4,089 599
Other income 224 240 35
Income before income tax expense 15,627 65,338 9,572
Income tax expense (6,179) (14,896) (2,182)
Net income 9,448 50,442 7,390
Earnings per share:
Basic 0.17 0.92 0.13
Diluted 0.17 0.91 0.13
Earnings per ADS (Note 5):
Basic 0.34 1.83 0.27
Diluted 0.34 1.81 0.27
Weighted average number of common
shares outstanding:
Basic 56,134,358 55,114,287 55,114,287
Diluted 56,212,697 55,612,293 55,612,293
-----------
Notes:
1. The conversion of RMB amounts into USD amounts is based on the noon
buying rate of USD1.00=RMB6.8258 on March 31, 2010 in New York for
cable transfers of RMB as set forth in the H.10 weekly statistical
release of the Federal Reserve Board.
2. Includes share-based compensation expense of RMB1,211 and RMB1,020
(US$149) for the three months ended March 31, 2009 and 2010,
respectively.
3. Includes share-based compensation expense of RMB1,041 and RMB877
(US$129) for the three months ended March 31, 2009 and 2010,
respectively.
4. Includes share-based compensation expense of RMB5,306 and RMB4,470
(US$655) for the three months ended March 31, 2009 and 2010,
respectively.
5. Each ADS represents two common shares.
51job, Inc.
Reconciliation of GAAP and Non-GAAP Results
For the Three Months Ended
March 31, March 31, March 31,
2009 2010 2010
(In thousands, except number of shares (unaudited)(unaudited) (unaudited)
and per share data) RMB RMB USD
(Note 1)
GAAP income before income tax expense 15,627 65,338 9,572
Add back: Share-based compensation
expense 7,558 6,367 933
Add back: (Gain) Loss from foreign
currency translation (31) 68 10
Non-GAAP income before income tax
expense 23,154 71,773 10,515
Non-GAAP income tax expense (6,182) (14,896) (2,182)
Non-GAAP adjusted net income 16,972 56,877 8,333
Non-GAAP adjusted earnings per share:
Basic 0.30 1.03 0.15
Diluted 0.30 1.02 0.15
Non-GAAP adjusted earnings per
ADS (Note 2):
Basic 0.60 2.06 0.30
Diluted 0.60 2.05 0.30
Weighted average number of common
shares outstanding:
Basic 56,134,358 55,114,287 55,114,287
Diluted 56,212,697 55,612,293 55,612,293
----------
Notes:
1. The conversion of RMB amounts into USD amounts is based on the noon
buying rate of USD1.00=RMB6.8258 on March 31, 2010 in New York for
cable transfers of RMB as set forth in the H.10 weekly statistical
release of the Federal Reserve Board.
2. Each ADS represents two common shares.
51job, Inc.
Consolidated Balance Sheets
As of
December 31, March 31, March 31,
2009 2010 2010
(audited) (unaudited)(unaudited)
(In thousands, except number of shares RMB RMB USD
and per share data) (Note 1)
ASSETS
Current assets:
Cash 957,407 1,016,812 148,966
Short-term investments 257,310 257,382 37,707
Accounts receivable (net of
allowance of RMB2,620 and
RMB2,511 as of December 31, 2009
and March 31, 2010, respectively) 17,946 26,824 3,930
Prepayments and other current
assets 39,899 51,164 7,496
Deferred tax assets, current 4,982 3,120 457
Total current assets 1,277,544 1,355,302 198,556
Long-term investments 15,912 15,908 2,331
Property and equipment, net 181,943 207,077 30,337
Intangible assets, net 5,301 5,775 846
Other long-term assets 31,531 7,159 1,049
Deferred tax assets, non-current 285 324 47
Total non-current assets 234,972 236,243 34,610
Total assets 1,512,516 1,591,545 233,166
LIABILITIES
Current liabilities:
Accounts payable 9,896 13,757 2,015
Salary and employee related accrual 28,095 19,122 2,801
Taxes payable 15,696 26,052 3,817
Advance from customers 118,277 146,737 21,498
Other payables and accruals 15,402 11,906 1,744
Total current liabilities 187,366 217,574 31,875
Deferred tax liabilities, non-current 1,011 1,292 189
Total liabilities 188,377 218,866 32,064
Shareholders' equity:
Common shares (US$0.0001 par value;
500,000,000 shares authorized,
55,126,859 and 54,995,107 shares
issued and outstanding as of
December 31, 2009 and March 31,
2010, respectively) 46 46 7
Additional paid-in capital 902,124 900,211 131,884
Statutory reserves 7,368 7,368 1,079
Other comprehensive income 1,067 1,078 158
Retained earnings 413,534 463,976 67,974
Total shareholders' equity 1,324,139 1,372,679 201,102
Total liabilities and shareholders'
equity 1,512,516 1,591,545 233,166
----------
Note 1: The conversion of RMB amounts into USD amounts is based on the
noon buying rate of USD1.00=RMB6.8258 on March 31, 2010 in New
York for cable transfers of RMB as set forth in the H.10 weekly
statistical release of the Federal Reserve Board.
For more information, please contact:
Linda Chien
Investor Relations
51job, Inc.
Tel: +86-21-6879-6250
Email: [email protected]
SOURCE 51job, Inc.
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