-- 4Q07 Revenue Increases 72% to $41.9 Million Compared to 4Q06 --
ENGLEWOOD CLIFFS, N.J., March 27 /PRNewswire-FirstCall/ -- Jinpan International Ltd (AMEX:JST), a leading designer, manufacturer, and distributor of cast resin transformers for voltage distribution equipment, today announced consolidated financial results for the fourth quarter and full year ended December 31, 2007.
Highlights for the 2007 Fourth Quarter Total sales for the fourth quarter were USD $41.9 million, a 71.8% increase over the same period last year. The increase in revenues was a result of continued strong sales of the Company's cast resin transformers, in both China and abroad.
Gross profit in the fourth quarter was $15.7 million, a 131% increase over the same period last year. Fourth quarter gross margin increased 960 basis points to 37.4% compared to 27.8% in the year ago period. Gross margin benefitted primarily from lower raw material costs and strong sales of custom- designed transformers.
Selling, general and administrative expenses in the fourth quarter were $8.7 million, or 20.8% of sales, versus $4.0 million, or 16.4% of sales, in the year ago period. SG&A increased primarily due to increased costs associated with operating the Company's new manufacturing facility in Wuhan and from additional costs related to SOX 404 compliance.
Operating income increased to $6.9 million, or 16.5% of sales, compared to $2.7, or 11.1% of sales in the prior year period.
Net income for the fourth quarter increased 120% to $6.7 million, or $0.83 per diluted share, versus $2.7 million, or $0.40 per diluted share, in the fourth quarter of 2006. Fourth quarter net income as a percentage of revenue increased 480 basis points to 15.9% from 11.1% in the prior year period, attributable to the increase in gross margin which outweighed the increases in SG&A.
Fiscal 2007 Results For the full year, total sales increased 45.4% to $119.6 million compared to $82.3 million in the prior year period.
Gross profit increased to $41.6 million compared to $22.9 million in the prior year period. Gross margin increased 700 basis points to 34.8% from 27.8% in the prior year period.
Selling, general and administrative expenses for the year were $22.8 million or 19.1% of sales, compared to $13.1 million, or 16.0% of sales, in the prior year period.
Operating profit in 2007 increased 92.6% to $18.3 million compared to $9.5 million in the prior year period. Full year operating margin increased 380 basis points to 15.3% compared to 11.5% in the prior year period.
Net income in 2007 increased 119.5% to $16.5 million, or $2.04 per diluted share, compared to $7.5 million, or $1.12 per diluted share in the prior year period.
Mr. Zhiyuan Li, Chief Executive Officer of Jinpan commented, "We ended the 2007 fiscal year in a very strong position and are very pleased with our financial performance. The 45% annual increase in our sales performance is indicative of the continued strong demand for our cast resin transformer products both in China and internationally. We saw strong demand across the board for our power generation, industrial, and commercial & residential transformers. Additionally, our reactor business for wind power is gaining favorable momentum as overall customer interest continues to increase. Product sales in China increased 42% to $113.6 million while our international sales increased 161% to $6.0 million from the prior year period.
Our gross margin was very strong in 2007 largely due to a combination of lower material prices and increased sales of customized, higher margin transformer products, which contributed significantly to our international sales performance. We were also pleased that our cash position at the end of the year increased 86% sequentially to $17.1 million which provides us with greater operational flexibility moving forward." 2008 Financial Outlook For the full 2008 fiscal year, the Company currently anticipates revenues of approximately $155 million, which is a 30% over 2007 sales of $119.6 million. The Company anticipates net income of approximately $21.4 million, or approximately $2.64 per diluted share, which is a 30% increase compared to 2007 net income of $16.5 million, or $2.04 per diluted share. In 2008, the fourth quarter is expected to be the strongest quarter for the Company due to an increase in orders that typically occur before the Chinese New Year in the first quarter, followed by Q3, Q2 and Q1.
Mr. Li continued, "We are very encouraged with our ability to further grow our revenue and profit by at least 30% in 2008 as we expect to see continued growth for our cast resin transformers in China and internationally. Our products are being increasingly utilized in urban, commercial and industrial applications and we are seeing greater customer migration to our brand due to the high quality, performance, competitive pricing, efficiency and customization of our products.
Our Wuhan facility is expected to be operational in the middle of the 2008 second quarter which, together with the expanded capacity of our Hainan facility, will increase overall KVA production capacity and help meet the growing needs of our global customer base in 2008.
We expect gross margin in 2008 to trend between 31%-33% compared to 34.8% in 2007 due to higher material and energy costs. SG&A costs as a percent of total revenue in 2008 are expected to be approximately 17% compared to 19.1% in 2007 primarily due to lower overall sales costs from the 30% expected increase in sales.
We believe that 2008 will be another solid year for Jinpan as we continue to meet the growing needs of our customers, which include electric utilities, commercial developers and large contractors. We are focused on leveraging our market opportunities in China, further product customization at competitive prices and continued expansion of sales internationally. Global demand for efficient, reliable, customized power generation equipment continues to be strong and Jinpan is emerging as a major player in this high growth area. We are optimistic about our opportunities and believe Jinpan is well positioned for continued growth in the years to come," concluded Li.
About Jinpan International Ltd Jinpan International Ltd. (AMEX:JST) designs, manufactures, and distributes cast resin transformers for voltage distribution equipment in China and other various countries around the world. Jinpan's cast resin transformers allow high voltage transmissions of electricity to be distributed to various locations at lower, more usable voltage levels. The Company has obtained ISO9001 and ISO1401 certification of its cast resin transformers. Its principal executive offices are located in Hainan, China and its U.S. headquarters is based in Englewood Cliffs, New Jersey. Safe Harbor Provision Statements in this press release which are not historical data are forward-looking statements which involve known and unknown risks, 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 include, but are not limited to, those detailed in the company's periodic filings with the Securities and Exchange Commission.
Jinpan International Limited and Subsidiaries
Consolidated Statements of Income
For the Twelve Months Ended December 31, 2007 (unaudited) (audited)
Twelve Months Ended December 31,
2007 2006
US$ US$
(In thousands, except per share data) Net sales 119,623 82,270
Other income 414 530
120,037 82,800 Costs and expenses:
Cost of products sold (77,988) (59,372)
Selling and administrative (22,865) (13,123)
Interest Income(expenses) (465) (175)
(101,318) (72,670) Income before income taxes 18,719 10,130 Income taxes (2,226) (1,372) Income before minority
interest 16,493 8,758 Minority interest - (1,244) Net income 16,493 7,514 Earnings per share -Basic US$2.07 US$1.13 -Diluted US$2.04 US$1.12 Weighted average number of
shares -Basic 7,976,755 6,625,726 -Diluted 8,090,630 6,728,915 Jinpan International Limited and Subsidiaries
Consolidated Balance Sheets (unaudited) (audited)
2007 2006
Dec.31 Dec.31
US$ US$
Assets Current assets: Cash and cash equivalents 17,122 34,115
Investment available for sale 193 193
Notes Receivable 1,615 963
Accounts receivable, net 43,026 25,467
Inventories 25,743 18,589
Prepaid expenses 7,943 4,638
Other receivables 1,354 714 Total current assets 96,996 84,679 Property, plant and
equipment, net 8,829 4,155 Construction in progress 3,016 1,717 Intangible assets 9,952 -
Deferred tax assets 870 101 Total assets 119,663 90,652 Liabilities and Shareholders' Equity Current liabilities: Short term bank loans 9,874 5,989
Accounts payable 6,372 6,181
Notes Payable - 1,062
Income tax 2,416 587
Advance from customers 4,638 3,659
Other payable 15,021 8,818
Total current liabilities 38,321 26,296
Long Term Liability:
Government Grant 507
Minority interest 1,069
Shareholders' equity: Common stock, US$0.009 par value:
Authorized shares - 20,000,000
Issued and outstanding shares
- 8,186,617 in 2007 73 73
And 8,171,617 in 2006
Common Stock-Warrants 854
Convertible preferred stock,
US$0.009 par value:
Authorized shares - 1,000,000
Issued and outstanding shares
- 6,111 in 2006 1 1
And 2007
Additional paid-in capital 33,938 34,556
Reserves 3,905 3,595
Retained earnings 39,172 24,251
Accumulated other
comprehensive income 4,188 1,123
82,131 63,598
Less: Treasure shares at
cost, common
stock-202,470 in (789) (818)
2007 and 208,470 in 2006
Total shareholders' equity 81,342 62,780 Total liabilities and
shareholders' equity 119,663 90,652 Jinpan International Limited and Subsidiaries
Consolidated Statements of Cash Flows
For the Twelve Months Ended December 31, 2007 (unaudited) audited
For For
Twelve Twelve
months months
ended ended
2007 2006
US$ US$ Operating activities
Net income 15,639 7,514
Adjustments to reconcile net income
to net cash provided by/(used in)
operating activities:
Depreciation 1,172 861
Deferred income taxes (736) 6
Provision for doubtful debts 811 (88)
Loss/(Gain) on disposal of fixed assets 49 (13)
Minority interest - 1,243
Stock based compensation cost 1,034
Changes in operating assets and
liabilities
Restricted Cash - 121
Accounts receivable (16,038) (3,456)
Inventories (5,645) (4,765)
Prepaid expenses (2,877) (2,293)
Other receivables (558) 264
Accounts payable (237) 3,063
Income tax 1,727 577
Advance from customers 697 275
Other Payable 4,867 1,663
Net cash provided by/(used in)
operating activities (659) 4,939
Investing activities
Purchases of property, plant and
equipment (5,481) (1,361)
Proceeds from sales of property,
plant and equipment 29 20
Payment for construction in progress (1,015) (1,313)
Acquired Minority Interest (11,000) (80,240)
Net cash provided by (used in)
investing activities (17,467) (2,654)
Financing activities
Notes Payable (1,098) 1,045
Proceeds from bank loan 13,961 15,402
Repayment of bank loan (10,616) (14,075)
Proceeds from issued treasury shares 28 23,299
Proceeds from exercise of stock options 20 303
Decrease in dividend payable to
minority shareholders (217) (972)
Dividends paid (1,931) (1,594)
Net cash provided by/(used in)
financing activities 147 23,408
Effect of exchange rate changes on
cash 986 686
Net increase/(decrease) in cash and
cash equivalents (16,993) 26,379
Cash and cash equivalents at
beginning of year 34,115 6,446
Cash and cash equivalents at end of
year 17,122 32,825 Interest paid 432 271 Income taxes paid 1,301 750
DATASOURCE: Jinpan International Ltd.
CONTACT: Investor Contact Information: Mark Du, Chief Financial Officer of Jinpan International Ltd., +1-201-227-0680, or Bill Zima of ICR, Inc., +1-203-682-8200 Web site: http://www.jstusa.net/
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