Jingwei International Limited Reports Second Quarter 2011 Financial Results

News provided by

Jingwei International Limited

Aug 15, 2011, 06:07 ET

SHENZHEN, China, Aug. 15, 2011 /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, today announced its financial results for the second quarter ended June 30, 2011.

Second Quarter 2011 Highlights:

  • Total revenue increased 39% year-over-year to $11.4 million
  • Data Mining segment revenue grew 9% year-over-year to $4.8 million
  • Software Services segment revenue rose 73% year-over-year to $6.6 million
  • Gross profit declined 2% year-over-year to $4.5 million
  • Net income (non-GAAP)(1) declined 16% year-over-year to $3.0 million
  • Net income declined 23% year-over-year to $1.9 million
  • EPS for the quarter was$0.09 per basic share and $0.09 per diluted share compared to $0.15 per basic share and $0.12 per diluted share last year
  • Cash and equivalents at end of the second quarter was $4.4 million, as compared to $7.5 million at the end of 2010

"We have continued our strong year-over-year revenue growth in both of our business segments during the second quarter of 2011," commented Mr. George Du, Chairman and Chief Executive Officer of Jingwei. "In data mining, we have expanded greatly our product offering in 3G related MVAS business, and have seen significant revenue contribution from this part of the business in the current period. In the second quarter of 2011, the Company successfully deployed the mobile value-added services ("MVAS") Society Channel and marketing support system in Fujian province, and is currently operating the system with early success. Furthermore, the Company is in discussion with several other provincial operators to leverage similar capabilities to benefit their local operation. In the software service segment, the Company took significant system integration contracts to develop a web-based integrated governmental service platform for local governments in Guangdong province."

Key Financial Results

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

Six Months Ended
June  30,


Three Months Ended
June 30,

2011

2010

% change

2011

2010

% change

(Unaudited)

(Unaudited)

Data Mining Net Revenue

$8,438

$7,498

13%

$4,823

$4,428

9%

Software Services Net Revenue

10,502

5,851

79%

6,591

3,802

73%

Net Revenue

18,940

13,349

42%

11,414

8,230

39%

Gross Profit

8,451

7,254

17%

4,519

4,615

-2%

Net Income (non-GAAP)(1)

5,094

5,443

-6%

3,028

3,594

-16%

Net Income

2,851

3,499

-19%

1,907

2,479

-23%

Earnings per Basic Share

0.14

0.21

-33%

0.09

0.15

-40%

Earning per Diluted Share

0.14

0.18

-22%

0.09

0.12

-25%









Financial Outlook

In 2011, the Company reiterates its guidance with projected total revenue of between $45.2 million and $49.2 million, and revises its net income guidance to between $9.0 million and $12.0 million, and dilutive earnings per basic share guidance to between $0.44 and $0.59, 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.

Jingwei International Limited and Subsidiaries

Condensed Consolidated Statements of Income and Comprehensive Income

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


Six Months Ended

June 30,

Three Months Ended

June 30,


2011

2010

2011

2010


(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)

Sales

$       18,940

$    13,349

$      11,414

$       8,230

Cost of sales

10,489

6,095

6,895

3,615

Gross profit

8,451

7,254

4,519

4,615









Operating expenses







Selling, general and administrative expenses

4,982

2,563

2,403

1,609

Research and development costs

1,520

1,331

781

598


6,502

3,894

3,184

2,207









Income from operations

1,949

3,360

1,335

2,408









Other income (expenses)







Subsidy income

921

320

523

11

Interest income

40

33

8

10

Interest expense

-

(5)

-

(3)

Other expense

(1)

(60)

-

(14)


960

288

531

4









Income before income taxes

2,909

3,648

1,866

2,412

Income tax expense (benefit)

58

149

(41)

(67)









Net income

2,851

3,499

1,907

2,479

Less: Net income attributable to noncontrolling interest

-

-

-

-

Net income attributable to the Company's stockholders

2,851

3,499

1,907

2,479

Foreign currency translation adjustment

1,461

188

872

173

Comprehensive income

$        4,312

$     3,687

$       2,779

$       2,652

Comprehensive income attributable to noncontrolling interest

178

32

105

31

Comprehensive income attributable to the Company's stockholders

4,134

3,655

2,674

2,621

Basic earnings per share

$         0.14

$      0.21

$        0.09

$        0.15

Diluted earnings per share

$         0.14

$      0.18

$        0.09

$        0.12

Weighted average common shares outstanding







Basic

20,390,342

17,049,000

20,427,007

17,049,000

Diluted

20,522,955

19,897,076

20,447,519

20,787,762

Jingwei International Limited and Subsidiaries

Condensed Consolidated Balance Sheets

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


June 30, 2011

December 31, 2010


(Unaudited)


ASSETS




Current assets




Cash and cash equivalents

$

4,445

$

7,519

Accounts receivable, less allowance of doubtful accounts of $2,885 and $2,040, respectively

37,687


34,558

Other receivables, prepayments and deposits, less allowance for doubtful accounts of $137 and $134, respectively

7,111


3,610

Inventories

7,522


5,780

Deferred tax assets

544


413

Total current assets

57,309


51,880








Non-current assets






Property, plant and equipment, net

1,999


1,854

Intangible assets, net

15,831


17,448

Long-term investment

1,838


1,797

Goodwill

3,283


3,209

Total assets

$

80,260

$

76,188








LIABILITIES AND EQUITY






Current liabilities






Accounts payable

$

5,231

$

4,122

Accruals and other payable

561


1,890

Income tax payable

1,582


1,610

Deferred tax

265


259

Loan from a stockholder

201


262

Total current liabilities

7,840


8,143








Non-current liabilities






Deferred tax liabilities

857


965








Total liabilities

8,697


9,108








Commitments and contingencies

-


-

Equity






Common stock, ($0.001 par value; 75,000,000 shares authorized; 20,478,676 and 20,350,167 shares issued as of June 30, 2011 and December 31, 2010, respectively; 20,452,334 and 20,347,167 shares outstanding as of June 30, 2011 and December 31, 2010, respectively)

21


20

Treasury stock, at cost (26,342 shares and 3,000 share as of June 30, 2011 and December 31, 2010, respectively)

(91)


(12)

Additional paid-in capital

22,751


22,502

Statutory and other reserves

3,590


3,590

Retained earnings

31,799


28,948

Accumulated other comprehensive income

5,582


4,299

Total Company's stockholders' equity

63,652


59,347

Noncontrolling interest

7,911


7,733

Total equity

71,563


67,080








Total liabilities and equity

$

80,260

$

76,188

Jingwei International Limited and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(in US dollars thousands)


Six Months Ended June 30,


2011

2010


(Unaudited)

(Unaudited)

Cash flows from operating activities





Net income

$

2,851

$

3,499

Adjustments to reconcile net income to net cash used in operating activities:







Depreciation and amortization

2,506


1,731

Allowance for doubtful accounts

1,232


285

Share-based compensation expense

172


404

Changes in operating assets and liabilities:







Accounts receivables

(4,361)


(5,803)

Other receivables, prepayments and deposits

(3,501)


1,050

Inventories

(1,742)


(1,965)

Deferred tax asset

(233)


13

Accounts payable

1,047


(1,562)

Accruals and other payables

(559)


326

Income tax payable

(28)


(208)

Net cash used in operating activities

(2,616)


(2,230)

Cash flows from investing activities







Acquisition of property and equipment

(534)


(174)

)

Acquisition of intangible assets

(68)


-

Cash paid for acquisition of Haicom (Note 1)

(771)


-

Net cash used in investing activities

(1,373)


(174)

Cash flows from financing activities







Loan from a stockholder



48




Repayment of stockholder loans

(410)


-

Net cash used in financing activities

(362)


-

Effect of foreign currency translation on cash and cash equivalents

1,277


98

Net decrease in cash and cash equivalents

(3,074)


(2,306)

Cash and cash equivalents - beginning of period

7,519


10,239

Cash and cash equivalents - end of period

$

4,445

$

7,933

Supplemental Disclosure of Cash Flow Information







Income tax paid

$

232

$

351

Interest paid

$

-

$

-

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.

Note (1):

Net income (non-GAAP)

Net income (non-GAAP) excludes share-based compensation expenses and amortization of acquired intangible assets. We believe that this non-GAAP financial measure provides meaningful supplemental information regarding our performance by excluding certain expenses that may not be indicative of our operating performance. The following table provides the non-GAAP financial measure and the related GAAP measure and provides a reconciliation of the non-GAAP measure to the equivalent GAAP measure.

Q2-2011 Reconciliation of Net Income to Net Income (non-GAAP)

For Three Months and Six Months Ended June 30, 2011

6 Mos. Ended

6 Mos. Ended

3 Mos. Ended

3 Mos. Ended

30-Jun-11

30-Jun-10

30-Jun-11

30-Jun-10

Net income

2,851

3,499

1,907

2,479

Amortization of intangibles assets

2,071

1,540

1,050

776

Share-based compensation expenses

172

404

72

339

Net income (non-GAAP)

5,094

5,443

3,028

3,594

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

WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM?

icon3
440k+
Newsrooms &
Influencers
icon1
9k+
Digital Media
Outlets
icon2
270k+
Journalists
Opted In
GET STARTED