Jingwei International Limited Reports First Quarter 2011 Financial Results

News provided by

Jingwei International Limited

May 16, 2011, 06:00 ET

SHENZHEN, China, May 16, 2011 /PRNewswire-Asia/ -- Jingwei International Limited (NASDAQ: JNGW) ("Jingwei" or "the Company"), a leading provider of data-mining, interactive marketing and software services in China's rapidly growing economy, today announced its financial results for the first quarter ended March 31, 2011.

First Quarter 2011 Highlights:

  • Total revenue increased 47% year-over-year to $7.5 million
  • Data Mining segment revenue grew 18% year-over-year to $3.6 million
  • Software Services segment revenue rose 92% year-over-year to $3.9 million
  • Gross profit climbed 49% year-over-year to $3.9 million
  • Gross margin was flat year-over-year at 52%
  • Net income declined 8% year-over-year to $0.9 million
  • EPS for the quarter was$0.05 per basic share and $0.05 per diluted share compared to $0.06 per basic share and $0.05 per diluted share last year

"We are pleased to report strong year-over-year revenue growth in our two business segments as we sharpened our focus in mobile value-added services ("MVAS") during the quarter," commented Mr. George Du, Chairman and Chief Executive Officer of Jingwei. "In data mining, we have expanded our offerings in 3G related services, and have entered into a strategic partnering agreement with Zhejiang China Unicom to design, develop and operate Zhejiang China Unicom's MVAS Society Channel and marketing support system. As this business has drawn interest from several other China Unicom provincial offices, we expect to see a significant revenue contribution from this part of the business later this year."

"In Software Services, the Company continued to expand the deployment of internet protocol TV ("IPTV") overseas through our business partner in the quarter. In addition, we have been engaged by several China Unicom's regional offices to upgrade their integrated call center platforms, and to develop new capabilities called "Communication Managers," to support China Unicom's launch of the "WO Family Service" offering nationwide."

Key Financial Results

Key financial results for the first quarter 2011 versus the first quarter 2010 are as follows (in US dollars thousands, except per share data):  


Three Months Ended March 31


2011

2010

% change


(Unaudited)

(Unaudited)





Data Mining Net Revenue

$3,615

$3,070

18%

Software Services Net Revenue

3,927

2,050

92%

Net Revenue


7,542

5,120

47%

Gross Profit

3,934

2,640

49%

Net Income

944

1,021

-8%

Earnings per Basic Share

0.05

0.06

-17%

Earning per Diluted Share

0.05

0.05

-

Financial Outlook

In 2011, the Company reiterates its guidance with projected total revenue of between $45.2 million and $49.2 million, net income of between $11.8 million and $13.0 million, and dilutive earnings per basic share of between $0.58 and $0.64 assuming 20.5 million weighted average common shares outstanding on a dilutive basis.

The range of anticipated revenues takes into account both organic growth and the possibility of acquisition related growth within the context of current economic conditions.

About Jingwei International Limited:

Jingwei International Limited ("Jingwei") has established a leading position in China in data mining, interactive marketing and software services.  By leveraging its proprietary database of over 400 million consumer profiles, Jingwei helps companies to more effectively reach their target audiences. To capitalize on China's explosive mobile, Internet and e-Commerce growth, Jingwei has focused on new data mining offerings that encompass interactive marketing, bundled mobility solutions and mobile value added services.  The Company's software services include business intelligence, billing, customer relationship management and decision support solutions for Chinese telecom operators and power companies.

Business Risks and Forward-Looking Statements

This report includes forward-looking statements. Generally, the words "believes," "anticipates," "may," "will," "should," "expect," "intend," "estimate," "continue," and similar expressions or the negative thereof or comparable terminology are intended to identify forward-looking statements. Such statements are subject to certain risks and uncertainties, including the matters set forth in this report or other reports or documents we file with the Securities and Exchange Commission from time to time, which could cause actual results or outcomes to differ materially from those projected. Undue reliance should not be placed on these forward-looking statements, which speak only as of the date hereof. We undertake no obligation to update these forward-looking statements.

-Financial Tables Follow-

Jingwei International Limited and Subsidiaries

Condensed Consolidated Statements of Income and Comprehensive Income

(in US dollars thousands, except share and per share data)


Three Months Ended

March 31,


2011

2010


(Unaudited)

(Unaudited)







Sales

$

7,542

$

5,120

Cost of sales

3,608


2,480

Gross profit

3,934


2,640









Operating expenses







Selling, general and administrative expenses

2,581


954

Research and development costs

739


733



3,320


1,687









Income from operations

614


953









Other income (expenses)







Subsidy income

399


309

Interest income

32


23

Interest expense

-


(2)

Other expense

(1)


(46)



430


284









Income before income taxes

1,043


1,237

Income tax expense

99


216









Net income

944


1,021

Less: Net income attributable to noncontrolling interest

-


-

Net income attributable to the Company's stockholders

944


1,021

Foreign currency translation adjustment

590


18

Comprehensive income

$

1,534

$

1,039

Comprehensive income attributable to noncontrolling interest

73


18

Comprehensive income attributable to the Company's stockholders

1,461


1,021

Basic earnings per share

$

0.05

$

0.06

Diluted earnings per share

$

0.05

$

0.05

Weighted average common shares outstanding







Basic

20,353,270


17,049,000

Diluted

20,549,905


18,862,295

See notes to condensed consolidated financial statements.

Jingwei International Limited and Subsidiaries

Condensed Consolidated Balance Sheets

(in US dollars thousands, except share and par value)


March 31, 2011

December 31, 2010


(Unaudited)



ASSETS





Current assets





Cash and cash equivalents

$

5,003

$

7,519

Accounts receivable, less allowance of doubtful accounts of $2,155 and $2,040, respectively

35,166


34,558

Other receivables, prepayments and deposits, less allowance for doubtful accounts of $135 and $134, respectively

6,242


3,610

Inventories

7,080


5,780

Deferred tax assets

420


413

Total current assets

53,911


51,880









Non-current assets







Property, plant and equipment, net

2,158


1,854

Intangible assets, net

16,651


17,448

Long-term investment

1,814


1,797

Goodwill

3,239


3,209

Total assets

$

77,773

$

76,188









LIABILITIES AND EQUITY







Current liabilities







Accounts payable

$

4,450

$

4,122

Accruals and other payable

1,595


1,890

Income tax payable

1,687


1,610

Deferred tax

261


259

Loan from a stockholder

157


262

Total current liabilities

8,150


8,143









Non-current liabilities







Deferred tax liabilities

909


965









Total liabilities

9,059


9,108









Commitments and contingencies

-


-

Equity







Common stock, ($0.001 par value; 75,000,000 shares authorized; 20,362,209 and 20,350,167 shares issued as of March 31, 2011 and December 31, 2010, respectively; 20,354,209 and 20,347,167 shares outstanding as of March 31, 2011 and December 31, 2010, respectively)

20


20

Treasury stock, at cost (8,000 shares and 3,000 share as of March 31, 2011 and December 31, 2010, respectively)

(32)


(12)

Additional paid-in capital

22,622


22,502

Statutory and other reserves

3,590


3,590

Retained earnings

29,892


28,948

Accumulated other comprehensive income

4,816


4,299

Total Company's stockholders' equity

60,908


59,347

Noncontrolling interest

7,806


7,733

Total equity

68,714


67,080









Total liabilities and equity

$

77,773

$

76,188

See notes to condensed consolidated financial statements.

Jingwei International Limited and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(in US dollars thousands)


Three Months Ended March 31,


2011

2010


(Unaudited)

(Unaudited)

Cash flows from operating activities





Net income

$

944

$

1,021

Adjustments to reconcile net income to net cash (used in) provided by operating activities:







Depreciation and amortisation

1,228


854

Allowance for doubtful accounts

527


10

Share-based compensation expense

100


66

Changes in operating assets and liabilities:







Accounts receivables

(1,135)


(140)

Other receivables, prepayments and deposits

(2,632)


1,304

Inventories

(1,300)


(2,156)

Deferred tax asset

(61)


34

Accounts payable

267


(1,191)

Accruals and other payables

11


(104)

Income tax payable

77


51

Net cash used in operating activities

(1,974)


(251)

Cash flows from investing activities







Acquisition of property and equipment

(491)


(153)

Acquisition of intangible assets

(67)


-

Net cash used in investing activities

(558)


(153)

Cash flows from financing activities







Repayment of stockholder loans

(411)


-

Net cash used in financing activities

(411)


-

Effect of foreign currency translation on cash and cash equivalents

427


73

Net decrease in cash and cash equivalents

(2,516)


(331)

Cash and cash equivalents - beginning of period

7,519


10,239

Cash and cash equivalents - end of period

$

5,003

$

9,908

Supplemental Disclosure of Cash Flow Information







Income tax paid

$

104

$

131

Interest paid

$

-

$

-

See notes to condensed consolidated financial statements.

Company Contact:

Jingwei International Limited

Yong Xu or Cao Wei

Tel: +86-755-8631-9430

Email: weicao@jingweicom.com

www.jingweicom.com

SOURCE Jingwei International Limited

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