Jinpan International Reports Fourth Quarter and Full Year 2009 Financial Results
-Full Year Net Sales Increased 3.2% to $158.9 Million -
- Full Year Net Income Increased 46.4% to $29 Million -
- Company Provides Full Year 2010 Financial Guidance -
CARLSTADT, N.J., March 15 /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 fourth quarter and fiscal year ended December 31, 2009.
Fourth Quarter 2009 Results
Net sales for the fourth quarter were $41.7 million, a 7.1% decrease from $44.9 million in the same period last year. The decrease in sales was in line with expectations and was a result of downward pressure on raw materials prices passed onto customers in the form of lower unit prices. In the fourth quarter, net sales outside of China decreased 70% to $2.0 million, or 4.8% of net sales, compared to $7.1 million, or 15.8% of net sales in the same period last year. The decrease in international sales was primarily the result of a higher percentage of sales shipped in the first three quarters of 2009 versus 2008 where 36% of our international sales shipped in the fourth quarter. Cast resin transformers (excluding those for wind power applications), switch gears and unit substations represented $35.7 million, or 85.6% of net sales in the fourth quarter. Wind energy products represented $6.0 million, or 14.4% of net sales in the fourth quarter.
Gross profit in the fourth quarter increased 27.3% year over year to $17.2 million from $13.5 million, and gross profit margin increased 11.1% year over year to 41.3% from 30.2%. In spite of lower unit sales pricing, 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 and administrative expenses in the fourth quarter were $11.4 million, or 27.3% of net sales, compared to $8.0 million, or 17.8% of net sales in the same period last year. Selling and administrative expenses increased primarily due to new development initiatives and additional overhead costs at the Company's Shanghai facility, which were not operational during the year 2008.
Operating income increased 5.6% to $5.9 million, or 14.1% of net sales, from $5.5 million, or 12.4% of net sales in the same period last year.
Net income for the fourth quarter increased 1.2% to $6.2 million, or $0.77 per diluted share, from $6.2 million, or $0.75 per diluted share, in the same period last year. Fourth quarter net income as a percentage of net sales was 15.0%, compared to 13.8% in the same period last year.
Fiscal 2009 Results
For the full year, total sales increased 3.2% to $158.9 million from $154.0 million in the prior year.
Gross profit in 2009 increased 37.5% year-over-year to $67.2 million from $48.9 million and gross profit margin increased by 33.2% year over year to 42.3% from 31.7%.
Selling and administrative expenses in 2009 were $36 million or 22.7% of net sales, compared to $26.2 million, or 17.0% of net sales, in the prior year.
Operating profit in 2009 increased 37.5% to $31.1 million, or 19.6% of net sales, compared to $22.7 million, or 14.7% of net sales, in the prior year.
Net income in 2009 increased 46.4% to $29.0 million, or $3.56 per diluted share, compared to $19.8 million, or $2.43 per diluted share, in the prior year.
Mr. Zhiyuan Li, Chief Executive Officer of Jinpan, commented, "We are pleased with our fourth quarter and full year 2009 financial results. In spite of a difficult global environment, we were able to achieve record annual results and have had substantial success increasing our overall base of customers. We continue to see strong demand for both our traditional cast resin transformers and wind energy equipment as the number of customers and product applications continue to expand. Our balance sheet remains healthy and provides the company with ample financial flexibility even as our size and operating structure have increased. We ended 2009 with a strong cash position of nearly $24 million, $1.6 million in bank loans which is an 86% reduction from the prior year, and notes payable of $5.0 million which is an 81% reduction compared to the 2009 third quarter reporting period.
"In order to meet the growing needs of power generation equipment among our customers, we remain highly focused on our research and development initiatives. We have pursued these initiatives on a standalone basis as well as with our partners. We are currently working with a major OEM to develop new power electrical equipment and are also researching new ways to develop more efficient and effective products for our customers. We are encouraged with the potential of some of our latest efforts which we hope to commercialize later in 2010."
Balance Sheet
As of December 31, 2009, the Company had $23.7 million in cash and cash equivalents, compared to $15.4 million at December 31, 2008. The Company's accounts receivable on December 31, 2009 totaled $64.2 million, compared to $58.8 million at December 31, 2008. Notes payable in the 2009 fourth quarter decreased sequentially by 81% to $5.0 million compared to $26.4 million at the end of September 30, 2009. Total bank loans outstanding at December 31, 2009 decreased to $1.6 million compared to $11.7 million in the prior year fourth quarter period.
Financial Outlook
For the full year 2010, the Company currently anticipates a net sales increase of approximately 10%-15% over 2009 sales, gross profit to range from 34%-37%, and net income growth of approximately 2% to 5% over 2009 net income results.
Mr. Li continued, "We believe that 2010 will be another strong year for our business. We expect to ship a greater number of units in 2010 at a slightly lower sales cost due to competitive pressures associated with lower raw materials prices. Our cast resin transformer business is expected to generate roughly 75% to 80% of total sales and wind power applications expected to contribute roughly 20% to 25% of total sales. Our customer base is expanding both domestically and abroad and we believe we are taking market share from our competitors due to our high quality products, customer service and quick adoption to customer product needs. We continue with our expansion efforts to capitalize on compelling market opportunities in our cast resin transformer and wind energy businesses and believe that we're positioning Jinpan to capture additional market share in the months and years to come."
Foreign Currency Translation
Our assets and liabilities are translated into United States dollars at the period-end exchange rate which is RMB 6.827 to 1 US dollar as of December 31, 2009. Revenues and expenses are translated into United Stated dollars at weighted average exchange rates which is RMB 6.825 to 1 US dollar for the period from January 1, 2009 to December 31, 2009. Equity transactions are translated using historical rates.
Conference Call Information
Jinpan's management will host an earnings conference call on March 15, 2010 at 8:30 a.m. U.S. Eastern Time. Listeners may access the call by dialing 1-719-325-4807. A webcast will also be available via the Company's website at http://www.jstusa.net or at www.viavid.net. A replay of the call will be available through March 29, 2010. Listeners may access the replay by dialing #1-719-457-0820, access code: 7465353.
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, 2008 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 Twelve Month Periods Ended December 31, 2009
Three Three Twelve Twelve
months months months months
ended ended ended ended
Dec 31 Dec 31 Dec 31 Dec 31
2009 2008 2009 2008
---- ---- ---- ----
(In thousands, except per share
data) US$ US$ US$ US$
--- --- --- ---
Net sales 41,689 44,853 158,879 153,979
Cost of Goods Sold (24,455) (31,315) (91,699) (105,104)
------- ------- ------- --------
Gross Margin 17,234 13,538 67,180 48,875
Operating Expenses
Selling and administrative (11,373) (7,989) (36,035) (26,217)
------- ------ ------- -------
Operating income 5,861 5,549 31,145 22,658
Interest Expenses - (274) (212) (1,195)
Other Income 636 1,103 1,032 1,689
--- ----- ----- -----
Income before income taxes 6,497 6,378 31,965 23,152
Income taxes (252) (207) (2,993) (3,364)
---- ---- ------ ------
Net Income 6,245 6,171 28,972 19,788
===== ===== ====== ======
Earnings per share
-Basic US$0.78 US$0.77 US$3.62 US$2.47
======= ======= ======= =======
-Diluted US$0.77 US$0.75 US$3.56 US$2.43
======= ======= ======= =======
Weighted average number of
shares
-Basic 8,014,076 7,985,080 8,014,076 7,985,080
-Diluted 8,134,720 8,130,598 8,134,720 8,130,598
Jinpan International Limited and Subsidiaries
Consolidated Balance Sheets (unaudited)
December December
31 31
2009 2008
---- ----
(In thousands) US$ US$
Assets
Current assets:
Cash and cash equivalents 23,664 15,408
Restricted Cash 2,085 1,331
Accounts receivable, net 64,173 58,793
Inventories 25,618 31,868
Prepaid expenses 9,780 4,713
Other receivables 9,732 7,317
----- -----
Total current assets 135,052 119,430
Property, plant and equipment, net 26,716 18,213
Construction in progress 1,811 6,055
Land use right 5,991 6,098
Intangible asset-Goodwill 12,340 12,348
Deferred tax assets 351 301
--- ---
Total assets 182,261 162,445
======= =======
Liabilities and Shareholders' Equity
Current liabilities:
Short term bank loans - 11,726
Accounts payable 10,385 11,300
Notes Payable 5,009 -
Tax Payable 1,837 3,671
Advance from customers 3,996 7,828
Other Payable 23,453 20,733
------ ------
Total current liabilities 44,680 55,258
Long-Term Loan 1,643
Shareholders' equity:
Common stock, US$0.009 par value:
Authorized shares - 20,000,000
Issued and outstanding shares -8,218,501 in
2009 74 73
and 8,189,684 in 2008
Common Stock, Warrants 854 854
Convertible preferred stock, US$0.009 par value:
Authorized shares - 1,000,000
Issued and outstanding shares – 3,044 in 2008 - -
and 2009
Additional paid-in capital 35,525 34,035
Reserves 3,906 3,906
Retained earnings 87,325 60,296
Accumulated other comprehensive income 8,764 8,812
----- -----
136,448 107,976
Less: Treasure shares at cost, common stock-
131,653 in 2009 and 202,470 in 2008 (510) (789)
---- ----
Total shareholders' equity 135,938 107,187
------- -------
Total liabilities and shareholders' equity 182,261 162,445
======= =======
Jinpan International Limited and Subsidiaries
Consolidated Statements of Cash Flows
For the Twelve Months Ended December 31, 2009 (Unaudited)
Year ended Year ended
December December
31 31
2009 2008
---- ----
(In thousands) US$ US$
Operating activities
Net income 28,972 19,788
Adjustments to reconcile net income to
net cash provided by/(used in) operating activities:
Depreciation 3,738 1,661
Provision for Doubtful Debt 339 (198)
Loss on disposal of fixed assets (4) 10
Deferred Income Tax (51) 543
Stock-based compensation cost 908 93
(Gain) from sales of available-for –sales securities - (10)
Changes in operating assets and liabilities
Restricted Cash (754) 178
Accounts receivable (5,759) (12,165)
Notes receivable (2,426) (3,061)
Inventories 6,231 (4,198)
Prepaid expenses (5,072) 3,654
Other receivables 6 (933)
Accounts payable (908) 4,337
Note Payable 5,011 -
Income tax (1,833) 1,117
Advance from customers (3,829) 2,773
Other liabilities 2,766 4,547
----- -----
Net cash provided by operating activities 27,335 18,136
Investing activities
Purchases of property, plant and equipment (8,017) (15,838)
Proceeds from sales of property, plant and equipment 109 2
Payment for construction in progress - (2,868)
Proceeds from sales of available-for–sales
securities 210
---
Net cash (used in) investing activities (7,908) (18,494)
Financing activities
Proceeds from bank loan 6,495 41,698
Repayment of bank loan (16,574) (40,569)
Issued shares from treasury stock 557 -
Proceeds from exercise of stock options 306 -
Dividends paid (1,942) (1,940)
------ ------
Net cash (used in)/provided by financing activities (11,158) (811)
Effect of exchange rate changes on cash (13) 872
--- ---
Net increase/(decrease) in cash and cash equivalents 8,256 (297)
Cash and cash equivalents at beginning of year 15,408 15,705
------ ------
Cash and cash equivalents at end of the period 23,664 15,408
====== ======
Interest paid 257 1,204
Income taxes paid 4,316 108
SOURCE Jinpan International Ltd.
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