JINPAN INTERNATIONAL LIMITED CARLSTADT, N.J., May 14, 2015 /PRNewswire/ -- Jinpan International Limited (Nasdaq: JST), a leading designer, manufacturer, and distributor of cast resin transformers, today reported unaudited consolidated financial results for the first quarter ending March 31, 2015. This announcement contains translations of certain RMB amounts into U.S. dollars at specified rates solely for the convenience of the reader. All translations from RMB to U.S. dollars are made at a rate of RMB6.1422 to US$1.00, the rate published by China administration of foreign exchange on March 31, 2015.
First Quarter 2015 Results
Net sales for the first quarter were RMB357.0 million (US$58.1 million), a 41.1% increase from RMB 253.0 million (US$41.3 million) in the same period last year. The increase was driven by broad-based growth across all product categories and markets, with particular strength in international OEM sales and in sales of switchgear and unit substations.
In the first quarter, China sales increased 29.8% year-over-year to RMB295.0 million (US$48.0 million), or 82.6% of net sales, compared to RMB227.3 million (US$37.1 million), or 89.8% of net sales in the same period last year. Net sales outside of China for the first quarter increased 141.1% year-over-year to RMB62.0 million (US$10.1 million), or 17.4% of net sales, compared to RMB25.7 million (US$4.2 million), or 10.2% of net sales, for the same period last year.
Sales of cast resin transformers increased 28.5% year-over-year to RMB200.2 million (US$32.6 million), or 56.1% of net sales, compared to RMB155.8 million (US$25.4 million) or 61.6% of net sales, for the same period last year. Sales of our integrated products, including switchgear and unit substations, increased 72.1% year-over-year to RMB96.0 million (US$15.6 million), or 26.9% of sales, compared to RMB55.8 million (US$9.1 million), or 22.1% of net sales, for the same period last year.
Sales to OEM customers increased 109.5% year-over-year to RMB83.6 million (US$13.6 million), or 23.4% of net sales, compared to RMB39.9 million (US$6.5 million), or 15.8% of net sales in the same period last year.
Gross profit in the first quarter increased 14.0% year over year to RMB89.3 million (US$14.5 million) from RMB78.3 million (US$12.8 million) in the same period last year. First quarter 2015 gross profit margin was 25.0%, compared to 31% in the prior year period. Gross margin in the first quarter decreased compared to the same period last year primarily due to increased materials prices and an increased mix of sales of switchgear and unit substations, which carry lower gross margins.
Selling and administrative expenses in the first quarter were RMB76.3 million (US$12.4 million), or 21.4% of net sales, compared to RMB66.5 million (US$10.9 million), or 26.3% of net sales in the same period last year. Selling and administrative expenses increased from the same period last year due to the increased sales volume and higher general and administrative expenses.
Operating income for the first quarter increased 10.1% to RMB13.1 million (US$2.1 million), or 3.7% of net sales, from RMB11.9 million (US$1.9 million), or 4.7% of net sales, in the same period last year.
Net income for the first quarter decreased 1.4% to RMB9.2 million (US$1.5 million), or RMB0.55 (US$0.09) per diluted share, compared to RMB9.3 million (US$1.5 million), or RMB0.56 (US$0.09) per diluted share, in the same period last year. First quarter net income, as a percentage of net sales, was 2.6% compared to 3.7% in the same period last year.
Mr. Zhiyuan Li, Chief Executive Officer of Jinpan International, stated, "Our 1Q15 results reflect well balanced revenue growth across our product lines and our markets, which drove abnormally strong sales during our typically weakest quarter. We also remained focused on managing our working capital and collecting our accounts receivable. I applaud the entire Jinpan team for their hard work and dedication to achieve these results during the holiday quarter."
"We continue to face a challenging environment within the Chinese market, marked by increasing material costs and pricing pressure which impacted margins. We are addressing this margin pressure by attempts to drive increased sales volume, reflected by the strong sales during the first quarter, as well as through targeted price increases to pass through the rising materials costs on our more recent orders. Additionally, visibility into demand for the second half of 2015 remains limited and we continue to adhere to our cautious approach."
"Our first quarter results reflect continued diversification of our business, by product line and by market. In particular, our sales of integrated products, such as switchgear and substations, increased by more than 60% and now represent more than 25% of our total sales. These products typically carry higher sales prices and provide access to larger, albeit more competitive and therefore lower margin, end markets. We are pleased with our progress with these product lines and expect this trend to continue."
"Our OEM business was a highlight during the quarter, with first quarter revenue more than doubling from the same period last year. This strength was driven by a recovery in shipments to our largest OEM customer and a ramp-up of shipments to our newest OEM customer. Sales forecasts from our OEM partners suggest continued strength during the second quarter, but are less certain for the second half of the year."
"At the end of March 2015, our backlog equaled RMB 872 million (US$142 million), up 20.3% from the same period last year and up 19.3% from the fourth quarter of 2014."
Balance Sheet
As of March 31, 2015, the Company had RMB112.8 million (US$18.4 million) in cash and cash equivalents, restricted cash, and short term investments, compared to RMB168.5 million (US$27.5 million) as of December 31, 2014. The Company's net accounts receivable on March 31, 2015 totaled RMB923.6 million (US$150.4 million), compared to RMB858.0 million (US$139.7 million) as of December 31, 2014. Total bank loans outstanding at March 31, 2015 were RMB160.5 million (US$26.1 million), compared to RMB160.6 million (US$26.2 million) at December 31, 2014.
Financial Outlook
For the full year 2015, the Company projects revenue growth of approximately 7-10% compared to 2014. Net sales are expected to be approximately RMB1.57 billion to RMB1.62 billion (US$258 million to US$265 million). Net income is expected to be in a range of approximately RMB90.0 million to RMB94.8 million (US$14.7 million to US$15.5 million). Earnings per share are expected to be RMB5.42 to RMB5.70 (US$0.88 to US$0.93) per share.
Year to date, our sales and orders are tracking slightly ahead of our expectations. However, the margin pressure has been more intense than expected. While we are taking steps to mitigate the impact, it will take several months for this margin recovery to be reflected in our financial results.
Conference Call Information
Jinpan's management will host a conference call and webcast at 4:30 p.m. ET on Thursday, May 14, 2015. The conference call can be accessed by dialing 1-888-438-5448 (toll free) or 1-719-325-2469 (international). A webcast will also be available via http://public.viavid.com, with event ID: 114484. A replay of the call will be available through May 21, 2015, by dialing 1-877-870-5176, access code 5958617.
ABOUT JINPAN INTERNATIONAL
Jinpan International Limited (NASDAQ: JST) designs, manufactures, and markets electrical control and distribution equipment used in demanding industrial applications, utility projects, renewable energy installations, and infrastructure projects. Major products include cast resin transformers, VPI transformers and reactors, switchgears, and unit substations. Jinpan serves a wide range of customers in China and reaches international markets as a qualified supplier to leading global industrial electrical equipment manufacturers. Jinpan's four manufacturing facilities in China are located in the cities of Haikou, Wuhan, Shanghai and Guilin. The Company's manufacturing facilities in China comprise the largest cast resin transformer production capacity in that country. The Company was founded in 1993. Its principal executive offices are located in Haikou, Hainan, China and its United States office is based in Carlstadt, New Jersey. For more information, visit www.jinpaninternational.com.
Safe Harbor Regarding Forward Looking Statements
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, 2014 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 FOLLOW:
Jinpan International Limited and Subsidiaries
Consolidated Statements of Comprehensive Income
For the Three Month Period Ended March 31, 2015
Three months ended
31-Mar
2015 2015 2014
---- ---- ----
US$ RMB RMB
In thousands, except
shares and per
share data (unaudited) (unaudited) (unaudited)
Net Sales 58,122 356,996 253,036
Cost of Goods Sold (43,579) (267,670) (174,711)
------- -------- --------
Gross Profit 14,543 89,326 78,325
Selling and
Administrative
Expenses (12,415) (76,252) (66,456)
------- ------- -------
Operating income 2,128 13,074 11,869
Interest Expense (408) (2,508) (3,723)
Other Income 47 290 2,644
--- --- -----
Income Before Income
Taxes 1,767 10,856 10,790
Income Taxes (276) (1,697) (1,500)
Net Income After
Taxes 1,491 9,159 9,290
===== ===== =====
Other Comprehensive Income (Loss)
Foreign Currency
Translation
Adjustment 13 82 99
--- --- ---
Total Comprehensive
Income 1,504 9,241 9,389
===== ===== =====
Earnings per Share
Basic US$0.09 RMB 0.56 RMB 0.57
======= ======== ========
Diluted US$0.09 RMB 0.55 RMB 0.56
======= ======== ========
Weighted Average Number of Shares
Basic 16,752,929 16,752,929 16,230,541
========== ========== ==========
Diluted 16,752,929 16,752,929 16,651,207
========== ========== ==========
Jinpan International Limited and Subsidiaries
Consolidated Balance Sheet
(Unaudited) (Unaudited) (Audited)
March 31, 2015 March 31, 2015 December 31, 2014
-------------- -------------- -----------------
In thousands, except
per share data $US RMB RMB
Assets
Current Assets
Cash and cash
equivalents 8,322 51,118 80,826
Restricted cash 2,037 12,512 7,210
Short term investment 8,010 49,200 80,500
Notes receivable 7,719 47,410 70,718
Accounts receivable,
net 150,370 923,604 858,037
Inventories, net 57,927 355,800 305,967
Prepaid expenses 22,502 138,209 127,619
Deferred tax assets 2,777 17,053 15,388
Other receivables 8,949 54,968 42,229
----- ------ ------
Total current assets 268,613 1,649,874 1,588,494
Fixed Assets
Property, plant and
equipment, net 72,500 445,310 452,659
Construction in
progress 2,789 17,129 16,481
Intangible assets 13,716 84,246 84,246
Prepaid leases 14,706 90,326 90,902
Other assets 47 290 649
Total Assets 372,371 2,287,175 2,233,431
======= ========= =========
Liabilities and Shareholders' Equity
Current Liabilities
Short term loans - - -
Accounts payable 34,092 209,400 228,633
Notes payable 29,457 180,930 89,733
Advances from
customers 19,997 122,826 131,946
Other payables 28,025 172,138 192,687
Income tax payable 2,269 13,935 12,389
----- ------ ------
Total current
liabilities 113,840 699,229 655,388
Long term loans 26,128 160,485 160,553
Deferred income 4,946 30,377 30,377
----- ------ ------
Total Liabilities 144,914 890,091 846,318
Shareholders' Equity
Convertible preferred
stock, US$0.0045 par
value: - - -
Authorized shares - 2,000,000
Issued and outstanding shares - none in 2014 and 2013
Common stock,
US$0.0045 par value: 99 606 606
Authorized shares - 40,000,000
Issued and outstanding shares - 16,418,456 in 2015 and 2014
Common stock -
warrants - - -
Additional paid-in
capital 48,704 299,147 298,418
Reserves 15,301 93,985 93,985
Retained earnings 164,471 1,010,213 1,001,054
Accumulated other
comprehensive income (613) (3,765) (3,848)
---- ------ ------
227,962 1,400,186 1,390,215
Less: Treasury shares at cost
Common stock -135,488
in 2015 and 2014 (505) (3,102) (3,102)
---- ------ ------
Total Shareholders'
Equity 227,457 1,397,084 1,387,113
Total Liabilities and
Shareholders' Equity 372,371 2,287,175 2,233,431
======= ========= =========
Jinpan International Limited and Subsidiaries
Consolidated Statement of Cash Flows
For the Three Months Ended March 31, 2015
Three Months Ended March 31
2015 2015 2014
---- ---- ----
US$ RMB RMB
In thousands (unaudited) (unaudited) (unaudited)
Operating Activities
Net Income 1,491 9,159 9,290
Adjustments to reconcile net income to
Net Cash provided by (used in ) operating activities:
Depreciation 2,287 14,049 6,504
Amortization of prepaid lease 94 575 148
Deferred Income Tax (212) (1,303) (877)
Provision for doubtful debts 769 4,722 4,953
Stock-based compensation Cost 119 730 124
Changes in operating assets and liabilities
Restricted Cash (863) (5,301) 2,759
Accounts Receivable (11,443) (70,288) 12,153
Notes Receivable 3,795 23,308 16,145
Inventories (8,113) (49,833) (22,678)
Prepaid Expenses (1,724) (10,590) (12,864)
Other Receivable (2,075) (12,742) (5,860)
Accounts Payable (3,131) (19,233) (11,777)
Notes Payable 14,848 91,197 (29,278)
Income Tax 252 1,545 (1,969)
Advance From customers (1,485) (9,121) (2,585)
Other liabilities (3,348) (20,548) (31,623)
------ ------- -------
Net Cash provided by ( used in ) operating activities (8,739) (53,674) (67,435)
Investing activities
Purchases of property, plant and equipment (1,196) (7,348) (1,144)
Proceeds from sales of property, plant and equipment - - -
Payment for construction in progress - - (1,263)
Sell of S/T Investment 34,890 214,300 132,000
Increase in S/T investment (29,794) (183,000) (126,000)
Receipt of government grant for new plant construction - - -
--- --- ---
Net Cash provided by ( used in ) investing activities 3,900 23,952 3,593
Financing activities
Proceeds from bank loan - - 37,713
Repayment of bank loan (11) (68) (34,789)
Proceeds from exercised stock options - - 96
Dividend paid - - (3,988)
--- --- ------
Net Cash provided by ( used in ) financing activities (11) (68) (968)
Effect of exchange rate changes on cash (37) 82 58
--- --- ---
Net increase/(decrease) in cash and cash equivalents (4,887) (29,708) (64,752)
------ ------- -------
Cash and Cash equivalents at beginning of year 13,209 80,826 149,874
------ ------ -------
Cash and Cash equivalents at end of year 8,322 51,118 85,122
===== ====== ======
Interest paid 277 1,701 2,810
Income Tax paid 443 2,720 4,347
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SOURCE Jinpan International Limited
