Jinpan International Reports First Quarter 2012 Financial Results

CARLSTADT, N.J., May 11, 2012  /PRNewswire/ -- Jinpan International Ltd (Nasdaq: JST), a leading designer, manufacturer, and distributor of cast resin transformers, today announced the unaudited consolidated financial results for the first quarter ended March 31, 2012. 

First Quarter 2012 Results

Net sales for the first quarter were $42.8 million, a 43.1% increase from $29.9 million in the same period last year.  The increase in sales was primarily the result of increased international and domestic transformer sales.  In the first quarter, domestic sales accounted for $33.8 million, or 79.0% of net sales, compared to $27.8 million, which also represented 93.0% of net sales in the same period last year. Net sales outside of China for the quarter were $9.0 million, or 21% of net sales compared to $2.1 million, or 7.0% of net sales for the same period last year.

The sales of cast resin transformers (excluding those for wind power applications), switchgears and unit substations represented $31.9 million, or 74.5% of net sales in the first quarter, while wind energy products represented $10.9 million, or 25.5% of net sales during this quarter.

Gross profit in the first quarter increased 43.9% year over year to $15.8 million from $11.0 million in the same period last year.  First quarter 2012 gross profit margin was 36.9%, compared to 36.7% in the prior year period, and 34.6% in the 2011 fourth quarter.

Selling and administrative expenses in the first quarter were $10.9 million, or 25.5% of net sales, compared to $7.8 million, or 26.0% of net sales in the same period last year.   Selling expenses increased in the first quarter as a result of increased sales. Administrative expenses increased due to higher Research and Development expenses and increased salary expenses resulting from the Company's implementation of its expansion plans.

Operating income for the first quarter increased 52.6% to $4.8 million, or 11.3% of net sales, from $3.2 million, or 10.6% of net sales, in the same period last year. Net income for the first quarter increased 44.6% to $4.0 million, or $0.24 per diluted share, from $2.7 million, or $0.17 per diluted share, in the same period last year.  First quarter net income as a percentage of net sales was 9.3% compared to 9.2% in the same period last year.

Mr. Zhiyuan Li, Chief Executive Officer of Jinpan, commented, "We experienced strong results in the first quarter of 2012 fueled by domestic and export sales growth.  Our international business exceeded our expectations driven by a large number of customized transformers for wind applications.  Sales in our domestic business increased 21.6% from the prior year period and are expected to continue to grow in the coming quarters. 

While the design and development of customized transformers remains a major priority for Jinpan, the domestic market for standardized transformers also represents a very large opportunity for our business.  Our expanded operating capabilities will enable us to have the capacity necessary to compete on quality and price with our competitors in China in the standard transformer market.  With our expanding capacity, we now have the ability to go out and make a more aggressive push in this market resulting in greater sales and profits over time.

We expect sales growth to continue in the remaining quarters of the year. Our customer base has expanded by approximately 20% over the past year.  At the end of March, our domestic China sales order backlog was $112 million compared to $102 million at the end of December 2011.  Jinpan has become a more widely recognized brand name within the cast resin transformer industry, which enables us to participate in a greater number of industrial projects sponsored by private businesses and state-owned enterprises.  With quality products, competitive pricing, efficient and growing manufacturing platform, and an expanding customer base, we believe that Jinpan will continue its record of sales and net income growth in 2012."

Balance Sheet

As of March 31, 2012, the Company had $12.6 million in cash and cash equivalents, compared to $24.2 million at December 31, 2011. The Company's accounts receivable on March 31, 2012 totaled $114.4 million, compared to $110.4 million at December 31, 2011.  Notes payable in the 2012 first quarter decreased to $2.2 million compared to $13.6 million at the end of December 31, 2011.  Total bank loans outstanding at March 31, 2012 increased to $31.6 million as compared to $23.0 million at December 31, 2011.

Financial Outlook
For the full year 2012, the Company currently anticipates net sales growth of 20-25% to $262-$273 million, gross profit margin of 33%-35%, and net income growth of approximately 17-22% to $27.8-$29.0 million. 

Conference Call Information
Jinpan's management will host an earnings conference call on May 11, 2012 at 8:30 a.m. U.S. Eastern Time.  Listeners may access the call by dialing #1-913-312-0978.  A webcast will also be available via www.viavid.net.  A replay of the call will be available through May 25, 2012.  Listeners may access the replay by dialing #1-858-384-5517, access code: 4686071.

About Jinpan International Ltd

Jinpan International Ltd. (NASDAQ: JST) designs, manufactures, and markets cast resin transformers for power distribution and wind energy products. Jinpan's cast resin transformers allow high voltage transmissions of electricity to be distributed to various locations in lower, more usable voltages. The Company has obtained ISO9001 and ISO14001 certifications for its cast resin transformers. Its principal executive offices are located in Hainan, China and its United States office 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 are 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, 2011 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.

(Financial Statements on Following Page)

SOURCE Jinpan International Ltd