Jinpan International Reports First Quarter 2014 Financial Results - WDRB 41 Louisville News

Jinpan International Reports First Quarter 2014 Financial Results

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SOURCE Jinpan International Limited

* First quarter revenue increased 17.5% year-over-year to $41.3 million

* Sales to OEM customers increased 36.6% year-over-year to $6.5 million

* First quarter net income increased 32.8% year-over-year to $1.5 million, or $0.09 per share

* Maintaining Fiscal 2014 earnings outlook; net income expected to be in the range of $18.2 million to $19.1 million, or $1.09 to $1.14 per share, reflecting 10-15% earnings growth

CARLSTADT, N.J., May 14, 2014 /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, 2014. 

First Quarter 2014 Results

Net sales for the first quarter were $41.3 million, a 17.5% increase from $35.2 million in the same period last year.  Sales growth was driven by steady demand in the Chinese market, increased sales of switchgears and unit substations, and expanded sales to OEM customers. 

In the first quarter, China sales increased 15% year-over-year to $37.1 million, or 89.8% of net sales, compared to $32.2 million, or 91.6% of net sales in the same period last year. Net sales outside of China for the quarter increased 40% year-over-year to $4.2 million, or 10.2% of net sales, compared to $3.0 million, or 8.5% of net sales for the same period last year. 

Sales to OEM customers increased 36.6% year-over-year to $6.5 million, or 15.8% of net sales, compared to $4.8 million, or 13.6% of net sales in the same period last year.

Gross profit in the first quarter increased 17.1% year over year to $12.8 million from $10.9 million in the same period last year.  First quarter 2014 gross profit margin was 31.0%, compared to 31.0% in the prior year period. Gross margin in the first quarter was stable compared with the same period last year as slightly improved pricing and lower production costs were offset by an increased mix of lower margin products.

Selling and administrative expenses in the first quarter were $10.9 million, or 26.3% of net sales, compared to $9.6 million, or 27.2% of net sales in the same period last year.  Selling and administrative expenses increased from the same period last year due to higher sales volume and increased costs associated with the establishment of the Guilin plant.

Operating income for the first quarter increased 43.9% to $1.9 million, or 4.7% of net sales, from $1.3 million, or 3.8% of net sales, in the same period last year.

Net income for the first quarter increased 32.8% to $1.5 million, or $0.09 per diluted share, compared to $1.1 million, or $0.07 per diluted share, in the same period last year.  First quarter net income, as a percentage of net sales, was 3.7% compared to 3.2% in the same period last year.

Mr. Zhiyuan Li, Chief Executive Officer of Jinpan International, stated, "We are pleased with our strong start to 2014, which builds on the positive momentum from last year.  We posted double-digit sales growth for the third consecutive quarter.  Our Guilin facility has enabled us to enhance our position in the cast resin transformer market and to further penetrate new and larger markets for switchgears and unit substations. 

Demand for our products remains healthy, driving a strong increase in orders during the first quarter of 2014, which led to a recovery in our backlog.  We remain focused on serving our core markets, with railroad, subway, wind power, and utility-scale solar continuing to drive robust growth. Our switchgear and unit substation products are gaining traction, as we seek to penetrate these markets in China. Finally, having qualified with six international OEM customers, we have shifted our focus from expanding our OEM customer base to deepening our relationships with these customers to increase our sales.

At the end of March, our backlog equaled $118 million, down 16.9% from the prior year period and up 18.0% from the fourth quarter of 2013.  Our year-over-year backlog decline reflects the increased production of standardized cast resin transformers from our Guilin facility, which has accelerated our average cycle time and enabled us to convert orders into revenue more quickly.  We expect our backlog will gradually increase as our business expands."

Balance Sheet

As of March 31, 2014, the Company had $18.6 million in cash and cash equivalents, restricted cash, and short term investments, compared to $30.8 million as of December 31, 2013. The Company's accounts receivable on March 31, 2014 totaled $140.5 million, compared to $144.6 million as of December 31, 2013.  Total bank loans outstanding at March 31, 2014 were $43.2 million, compared to $43.1 million at December 31, 2013. 

Financial Outlook

The Company reiterates its guidance for the full year 2014, projecting revenue and earnings growth of approximately 10% to 15% compared to 2013.  Net sales are expected to be in the range of $248 million to $260 million and net income is expected to be in the range of $18.2 million to $19.1 million, or $1.09 to $1.14 per share.

Conference Call Information

Jinpan's management will host a conference call and webcast on Thursday, May 15, 2014, at 8:30 a.m. Eastern Time.  Listeners may access the call by dialing 1-888-264-8904 (toll free) or 1-913-312-0686 (international).  A webcast will also be available via http://public.viavid.com, with event ID: 108983.  A replay of the call will be available through May 22, 2014, by dialing 1-877-870-5176, access code 2035761. 

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 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, 2013 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 (unaudited)

For the Three Month Period Ended March 31, 2014






Three months ended



March 31







2014

2013

(US$ in thousands, except per share data)








Net sales


41,315

35,171

Cost of Goods Sold


(28,526)

(24,254)

Gross Margin


12,789

10,917





Operating Expenses




Selling and administrative


(10,851)

(9,570)

Operating income


1,938

1,347





Interest Expenses


(608)

(268)

Other Income


432

373

Income before income taxes


1,762

1,452





Income taxes


(245)

(310)

Net income after taxes


1,517

1,142





Other comprehensive income (loss)




   Foreign currency translation adjustment


16

(4)

Total comprehensive income


1,533

1,138





Earnings per share








-Basic


US$0.09

US$ 0.07





-Diluted


US$0.09

US$ 0.07





Weighted average number of shares








-Basic


16,230,541

16,187,218





-Diluted


16,651,207

16,722,062

 


Jinpan International Limited and Subsidiaries

Consolidated Balance Sheet






(Unaudited)


(Audited)


March 31, 2014


December 31, 2013

(In US$ thousands, except number of shares and per share data)




Assets




Current assets:




     Cash and cash equivalents

13,836


24,582

     Restricted cash

856


1,316

     Short-term investment

3,901


4,920

     Notes receivable

13,035


15,802

     Accounts receivable, net

140,528


144,606

     Inventories, net

36,999


33,614

     Prepaid expenses

6,257


4,204

     Land use right

377


377

     Deferred tax assets

2,243


2,119

     Other receivables

7,784


6,891

     Total current assets

225,816


238,431





Property, plant and equipment, net

76,413


75,601

Construction-in-progress

1,597


3,787

Land use right

14,679


14,840

Goodwill

13,694


13,818

Other assets

87


90

Deferred tax assets

34


34

Total assets

332,320


346,601





Liabilities and shareholders' equity




Current liabilities:




     Short-term bank loans

10,759


11,101

     Accounts payable

24,857


27,013

     Notes Payable

5,645


10,498

     Income tax payable

2,173


2,516

     Advances from customers

13,659


14,207

     Other liabilities

24,926


30,339

     Total current liabilities

82,019


95,674

Commitments and contingencies




Long term liability:




     Deferred Income

4,737


4,785

     Long Term bank loans

32,428


31,998

Total Liabilities

119,184


132,457





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:




Authorized shares – 40,000,000




Issued and outstanding shares –16,418,456 in 2014 and 2013

74


74

Common stock-warrants

-


-

Additional paid-in capital

37,714


37,693

Reserves

12,849


12,849

Retained earnings

137,739


136,874

Accumulated other comprehensive income

25,028


26,937


213,404


214,427

Less: Treasury shares at cost,




Common stock –135,488 in 2014 and 138,306 in 2013

(268)


(283)

Total shareholders' equity

213,136


214,144

Total liabilities and shareholders' equity

332,320


346,601

 

Jinpan International Limited and Subsidiaries

Consolidated Statement of Cash Flows

For the Three Months Ended March 31, 2014 (unaudited)




For the Three Months Ended


March 31


2014

2013

(In US$ thousands)






Operating Activities



      Net Income

1,517

1,142

      Adjustments to reconcile net income to



           Net Cash provided by (used in) operating activities:



           Depreciation

1,062

1,629

           Amortization of prepaid lease

24

92

           Deferred Income Tax

(143)

(170)

           Provision for doubtful debts

809

562

           Loss/(gain) on disposal of fixed assets

-

-

           Stock-based compensation Cost

20

13

      Changes in operating assets and liabilities



           Restricted Cash

450

233

           Accounts Receivable

1,984

(523)

           Notes Receivable

2,636

4,756

           Inventories

(3,703)

(3,372)

           Prepaid Expenses

(2,100)

(3,012)

           Other Receivable

(957)

(1,363)

           Accounts Payable

(1,923)

4,341

           Notes Payable

(4,780)

(1,082)

           Income Tax

(321)

(47)

           Advance From customers

(422)

2,015

           Other liabilities

(5,164)

(3,065)

Net Cash provided by (used in) operating activities

(11,011)

2,149




Investing activities



     Purchases of property, plant and equipment

(187)

(6,032)

     Proceeds from sales of property, plant and equipment

-

-

     Payment for construction in progress

(206)

(1,128)

     Sell of short term investment

21,553

11,151

Purchase of short term investment

(20,573)

-

 Receipt of government grant for new plant construction

-

1,109

Net Cash provided by (used in) investing activities

587

5,100




Financing activities



     Proceeds from bank loan

6,158

8,125

     Repayment of bank loan

(5,680)

(7,265)

     Proceeds from exercised stock option

15

73

     Dividend paid

(651)

(486)

Net Cash provided by (used in) financing activities

(158)

447




Effect of exchange rate changes on cash

(164)

54

Net increase/(decrease) in cash and cash equivalents

(10,746)

7,750

Cash and Cash equivalents at beginning of year

24,582

18,510

Cash and Cash equivalents at end of year

13,836

26,260




Interest paid

458

340

Income Tax paid

710

193

 

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