Jingwei International Limited Reports Record Second Quarter 2010 Financial Results
SHENZHEN, China, Aug. 16, /PRNewswire-Asia-FirstCall/ -- 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 second quarter ended June 30, 2010.
Second Quarter 2010 Highlights:
-- Total revenue increased 101.4% year-over-year to $8.2 million
-- Data Mining segment revenue grew 71.6% year-over-year to $4.4 million
-- Software Services segment revenue rose 152.3% year-over-year to $3.8
million
-- Gross profit climbed 212.7% year-over-year to $4.6 million
-- Gross margin was 56.1%, up 2,000 basis points from 36.1% a year ago
-- Net income increased 215% year-over-year to $2.5 million, or $0.15 per
basic share and $0.12 per diluted share
-- Cash and equivalents at end of the second quarter was $7.9 million,
compared to $10.2 million at the end of 2009
-- Jingwei common shares began trading on NASDAQ on May 20, 2010
Key financial results for the second quarter 2010 versus the second quarter 2009 and the first six months 2010 versus first six months 2009 are as follows (in US dollars thousands, except per share data):
Three Months Ended June 30, Six Months Ended June 30,
2010 2009 %change 2010 2009 %change
(Unaud- (Unaud- (Unaud- (Unaud- (Unaud- (Unaud-
ited) ited) ited) ited) ited) ited)
Data Mining Net
Revenue $4,428 $2,580 71.6 % $7,498 $4,770 57.2 %
Software Services
Net 3,802 1,507 5,851 3,261
Revenue 152.3 % 79.4 %
Net Revenue 8,230 4,087 101.4 % 13,349 8,031 66.2 %
Gross Profit 4,615 1,476 212.7 % 7,254 2,997 142.0 %
Net Income 2,479 787 215.0 % 3,499 1,408 148.5 %
Earning per Basic
Share 0.15 0.05 200.0 % 0.21 0.08 162.5 %
Earning per Diluted
Share 0.12 0.05 140.0 % 0.18 0.08 125.0 %
"We achieved strong year-over-year growth in our two business segments during the second quarter of 2010," commented Mr. Rick Luk, Chief Executive Officer of Jingwei International. "This quarter's performance demonstrates that our strategy to enter select growth areas last year is paying off. In particular, the Data Mining segment continued to benefit from strong demand for our bundled mobile value-added service (VAS) offerings. Software Services, on the other hand, enjoyed stellar revenue and earnings growth from providing software solutions to major telecom carriers to support IPTV / DTV deployment. In addition, the delivery of an App Store software platform to a major telecom carrier has contributed favorably to this quarter's results."
Business Outlook
Given the strong momentum in the first half of 2010 and the outlook for the remainder of the year, the Company reaffirms its previous revenue guidance for fiscal year 2010 of total revenues between $37.5 million and $42.0 million, and raises its net income guidance to between $7.8 million and $8.7 million from between $7.3 million and $8.2 million. Pursuant to asset acquisition agreement with Shenzhen Newway Digital S&T Co., LTD ("Newway"), the Company has agreed to pay Newway an acquisition fee of RMB 45,000,000 in the form of both cash and contingent shares. As the net income targets at the one-year anniversary have been met, the Company expects to pay 3.3 million contingent shares to Newway in the third quarter of 2010. Taking into account of the impact of these shares, we expect this year's diluted share count to approximate 20.8 million on a weighed average basis, and diluted earnings per share to range from $0.38 to $0.42 in 2010, which compares to the Company's original guidance of between $0.43 and $0.48 in 2010 based on 17.05 million shares outstanding.
"Looking at the second half of the year, while there are rising concerns over the possibility of an economic slowdown in China, due to the combined effect of weaker-than-expected economic recovery in the US and European Union and tightening credits in the Chinese banking system, we have observed that general industry dynamics still appear favorable to support our growth strategy. Therefore, we remain cautiously optimistic about our growth projection for the traditionally strong second half of the year. In terms of growth initiatives, we expect our data mining, interactive marketing and bundled mobile VAS solutions to continue to perform well. In the Software Services segment, we are well positioned to benefit from continued growth in demand for our software solutions to support the 3G rollout as well as the nationwide IPTV/DTV deployment in the telecom and cable TV sector. And, as the 3-network convergence and the national smart grid modernization programs gain traction, we will consider leveraging our strong cash position to conduct disciplined M&A activities, that are accretive to earnings and are consistent with our ultimate goal of creating long term shareholder value," Mr. Luk concluded.
Conference Call
The company will host a conference call at 9:00 a.m. Eastern Daylight Time on Tuesday, August 17, 2010, to discuss second quarter 2010 results. To participate in the live teleconference, please dial 877-473-2978 five to ten minutes before the scheduled start time. International callers are invited to call 706-679-8157. Please refer to conference ID 93870025. If you are unable to participate in the call at this time, a replay will be available for 14 days starting on August 17, 2010 at 10:00 a.m. Eastern Daylight Time. To access the replay, dial 800-642-1687. International callers please dial 706-645-9291, and enter conference ID 93870025.
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 per share data)
Six Months Ended Three Months Ended
June 30, June 30,
2010 2009 2010 2009
(Unaudited)(Unaudited) (Unaudited)(Unaudited)
Sales $13,349 $8,031 $8,230 $4,087
Cost of sales 6,095 5,034 3,615 2,611
Gross profit 7,254 2,997 4,615 1,476
Operating expenses
Selling, general and
administrative expenses 2,563 1,119 1,609 715
Research and development costs 1,331 443 598 190
3,894 1,562 2,207 905
Income from operations 3,360 1,435 2,408 571
Other income (expenses)
Subsidy income 320 355 11 234
Interest income 33 8 10 3
Interest expense (5) -- (3) --
Other expense (60) (26) (14) (12)
288 337 4 225
Income before income taxes 3,648 1,772 2,412 796
Income tax expense 149 364 (67) 9
Net income 3,499 1,408 2,479 787
Less: Net income attributable
to noncontrolling interest -- -- -- --
Net income attributable to the
Company's stockholders 3,499 1,408 2,479 787
Foreign currency translation
adjustment 188 48 173 5
Comprehensive income $3,687 $1,456 $2,652 $792
Comprehensive income
attributable to non-
controlling interest 32 10 31 1
Comprehensive income
attributable to the
Company's stockholders 3,655 1,446 2,621 791
Basic earnings per share $0.21 $0.08 $0.15 $0.05
Diluted earnings per share $0.18 $0.08 $0.12 $0.05
Weighted average common shares
outstanding
Basic 17,049 17,049 17,049 17,049
Diluted 19,897 17,049 20,788 17,049
Jingwei International Limited and Subsidiaries
Consolidated Balance Sheets
(in US dollars thousands, except par value)
June 30, 2010 December 31,
2009
(Unaudited)
ASSETS
Current assets
Cash and equivalents $7,933 $10,239
Accounts receivable, less allowance of
doubtful accounts of $1,154 and $1,266,
respectively 28,974 23,457
Other receivables, prepayments and
deposits, less allowance for doubtful
accounts of $198 and $176, respectively 2,147 3,219
Inventories 4,281 2,316
Deferred tax assets 245 258
Total current assets 43,580 39,489
Non-current assets
Property, plant and equipment, net 1,371 1,385
Intangible assets, net 16,047 17,451
Long-term investment 1,745 1,737
Total assets $62,743 $60,062
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $2,591 $4,154
Accruals and other payable 1,606 1,279
Income tax payable 1,510 1,719
Loan from a stockholder 369 369
Total current liabilities 6,076 7,521
Non-current liabilities
Deferred tax liabilities 807 803
Total liabilities 6,883 8,324
Equity
Common stock, $0.001 par value; 75,000
shares authorized, 17,049 shares issued
and outstanding 17 17
Additional paid-in capital 19,334 18,931
Statutory and other reserves 2,916 2,916
Retained earnings 23,237 19,738
Accumulated other comprehensive income 2,846 2,658
Total Company's stockholders' equity 48,350 44,260
Noncontrolling interest 7,510 7,478
Total equity 55,860 51,738
Total liabilities and equity $62,743 $60,062
Jingwei International Limited and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(in US dollars thousands)
Six Months Ended June 30,
2010 2009
(Unaudited) (Unaudited)
Cash flows from operating activities
Net income 3,499 1,408
Adjustments to reconcile net income to
net cash provided by (used in) operating
activities:
Depreciation & amortisation 1,731 1,064
Share-based compensation expense 404 72
Changes in operating assets and liabilities:
Accounts receivable, net (5,518) (626)
Other receivables, prepayments and deposits 1,050 191
Inventories (1,965) 463
Deferred tax asset 13 --
Accounts payable (1,562) 320
Accruals and other payables 326 (480)
Income tax payable (208) 163
Net cash (used in) provided by operating
activities (2,230) 2,575
Cash flows from investing activities
Acquisition of property and equipment (174) (360)
Acquisition of intangible assets -- (270)
Long term Investment -- (50)
Net cash used in investing activities (174) (680)
Cash flows from financing activities
Repayment of stockholder loans -- (71)
Net cash used in financing activities -- (71)
Effect of foreign currency translation on 98 7
cash and cash equivalents
Net (decrease) increase in cash and cash
equivalents (2,306) 1,831
Cash and cash equivalents - beginning of
period 10,239 5,472
Cash and cash equivalents - end of period 7,933 7,303
Supplemental Disclosure of Cash Flow
Information
Income tax paid 351 197
Interest paid -- --
For more information, please contact:
Company Contact:
Jingwei International Limited
Yong Xu or Vanessa Bao
Phone: +86-755-8631-9436
Email: [email protected]
Web: http://www.jingweicom.com
Investor Relations Contact:
CCG Investor Relations
Kalle Ahl, CFA
Phone: +1-646-833-3417 (New York)
Email: [email protected]
Web: http://www.ccgir.com
SOURCE Jingwei International Limited
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