Jinpan International Reports Fourth Quarter and Full Year 2012 Financial Results

CARLSTADT, N.J., March 15, 2013 /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 fourth quarter and full year ended December 31, 2012.

Fourth Quarter 2012 Results

Net sales for the fourth quarter were $53.4 million, a 16.7% decrease from $64.1 million in the same period last year. The decrease in sales was primarily the result of lower domestic China sales compared to the prior year period. In the fourth quarter, domestic China sales accounted for $48.5 million, or 90.8% of net sales, compared to $59.8 million, or 93.3% of net sales in the same period last year. Net sales outside of China for the quarter were $4.9 million, or 9.2% of net sales compared to $4.3 million, or 6.7% 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 $50.0 million, or 93.6% of net sales in the fourth quarter, while wind energy products (cast resin transformers and VPI products for wind power applications) represented $3.4 million, or 6.4% of net sales during this quarter.

Gross profit in the fourth quarter decreased 26.5% year over year to $16.3 million from $22.2 million in the same period last year. Fourth quarter 2012 gross profit margin was 30.5%, compared to 34.6% in the prior year period, and 33.3% in the third quarter of 2012. Gross margin decreased in the fourth quarter mainly due to reduced sales and lower average selling prices for its cast resin transformers.

Selling and administrative expenses in the fourth quarter were $14.0 million, or 26.2% of net sales, compared to $16.2 million, or 25.3% of net sales in the same period last year, and $14.8 million, or 25.2% in the third quarter of 2012. Selling expenses decreased in the fourth quarter due to lower domestic product sales.

Operating income for the fourth quarter decreased 60.8% to $2.3 million, or 4.4% of net sales from $5.9 million, or 9.3% of net sales, in the same period last year.

Other income for the fourth quarter of 2012 was $2.3 million compared to $0.4 million in the same quarter of 2011 due primarily to recognized income from a government grant.

Net income for the fourth quarter decreased 29.1% to $3.8 million, or $0.23 per diluted share, from $5.4 million, or $0.33 per diluted share, in the same period last year. Fourth quarter net income, as a percentage of net sales, was 7.2% compared to 8.4% in the same period last year.

Mr. Zhiyuan Li, Chief Executive Officer of Jinpan, commented, "We are pleased to have met our full year revenue and net income forecasts. Business activity in the fourth quarter moderated as expected largely due to slower domestic and international order demand. While the economic environment remained challenging in the fourth quarter, we are more encouraged with our outlook for 2013 as we believe infrastructure spending in China will accelerate in the second half of the year positioning Jinpan for improved order flow and market share gains. Internationally, we successfully passed the qualification test for new wind product design at our largest OEM customer in the fourth quarter, which was a major accomplishment. We continue to explore opportunities to expand our international customer base this year and expect international orders in 2013 will improve over last year."

"At the end of December 2012, our backlog improved to $138 million, a 33% increase from the end of September 2012. Additionally, we completed the construction of our Guilin facility in January and are currently calibrating our manufacturing equipment and running production trials. We remain on schedule to begin full scale production by the end of first quarter this year."

"With an improving economic outlook in China along with Jinpan's expanding manufacturing facilities, our growing customer base and leading R&D capabilities, we expect improved customer order activity in 2013. We believe our domestic and international business are well positioned for long-term success as we develop high quality products and incorporate the latest technology to improve our competitive advantage and expand our market position for cast resin transformers."

Fiscal 2012 Results

For the full year, total sales decreased 3.8% to $210.5 million from $218.9 million in the prior year.

Gross profit in 2012 decreased 14.3% year-over-year to $68.8 million from $80.3 million and gross profit margin decreased by 401 bps year over year to 32.7% from 36.7%.

Selling and administrative expenses in 2012 were $53.9 million or 25.6% of net sales, compared to $54.3 million, or 24.8% of net sales, in the prior year.

Operating profit in 2012 decreased 42.7% to $14.9 million, or 7.1% of net sales, compared to $26.0 million, or 11.9% of net sales, in the prior year.

Net income in 2012 decreased 41.1% to $14.1 million, or $0.84 per diluted share, compared to $23.9 million, or $1.45 per diluted share, in the prior year.

Balance Sheet

As of December 31, 2012, the Company had $18.5 million in cash and cash equivalents, compared to $24.2 million at December 31, 2011. The Company's accounts receivable on December 31, 2012 totaled $124.6 million, compared to $110.4 million at December 31, 2011. Notes payable in the fourth quarter of 2012 decreased to $6.0 million compared to $13.6 million on December 31, 2011. Total bank loans outstanding at December 31, 2012 were $44.0 million, compared to $23.0 million at December 31, 2011 and $33.9 million at September 30, 2012.

Financial Outlook

For the full year 2013, the Company currently anticipates net sales of $231-$241 million, an increase of 10% to 15% over 2012 and net income of $14.0-$14.5 million, which represents increase of 0% to 3 compared to 2012. Net profit is expected to trend at lower levels in 2013 primarily due to fixed costs associated with the Company's Guilin facility.

Conference Call Information

Jinpan's management will host an earnings conference call on March 15^th, 2013 at 8:30 a.m. U.S. Eastern Time. Listeners may access the call by dialing #1-913-312-0825. A webcast will also be available via www.viavid.net. A replay of the call will be available through March 29^th, 2013. Listeners may access the replay by dialing #1-858-384-5517, access code: 7849569.

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.

SOURCE Jinpan International Ltd.

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