JST Jinpan International Limited

CARLSTADT, N.J., Aug. 11, 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 second quarter ending June 30, 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 RMB6.1136 to US$1.00, the rate published by China administration of foreign exchange on June 30, 2015.

Second Quarter 2015 Results

Net sales for the second quarter were RMB483.8 million (US$79.1 million), a 20.2% increase from RMB 402.5 million (US$65.8 million) in the same period last year.  The increase was driven by continued strength in sales of switchgear and unit substations, a ramp-up in sales to the Company's newest OEM customer, and moderate growth in sales of transformers. 

In the second quarter, China sales increased 21.1% year-over-year to RMB415.1 million (US$67.9 million), or 85.8% of net sales, compared to RMB342.6 million (US$56.0 million), or 85.1% of net sales in the same period last year. Net sales outside of China for the second quarter increased 14.7% year-over-year to RMB68.7 million (US$11.2 million), or 14.2% of net sales, compared to RMB59.9 million (US$9.8 million), or 14.9% of net sales, for the same period last year.

Sales of cast resin transformers increased 11.1% year-over-year to RMB285.5 million (US$46.7 million), or 59.0% of net sales, compared to RMB257.0 million (US$42 million) or 63.9% of net sales, for the same period last year. Sales of our integrated products, including switchgear and unit substations, increased 56.6% year-over-year to RMB124.4 million (US$20.4 million), or 25.7% of sales, compared to RMB79.4 million (US$13.0 million), or 19.7% of net sales, for the same period last year. 

Sales to OEM customers increased 24.6% year-over-year to RMB89.8 million (US$14.7 million), or 18.6% of net sales, compared to RMB72.1 million (US$11.8 million), or 17.9% of net sales in the same period last year.

Gross profit in the second quarter decreased 3.0% year over year to RMB130.8 million (US$21.4 million) from RMB134.8 million (US$22.0 million) in the same period last year.  Second quarter 2015 gross profit margin was 27.0%, compared to 33.5% in the prior year period. Gross margin in the second 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 second quarter were RMB94.6 million (US$15.5 million), or 19.6% of net sales, compared to RMB95.4 million (US$15.6 million), or 23.7% of net sales in the same period last year.  Selling and administrative expenses decreased slightly from the same period last year due to lower selling expense partially offset by increased research and development expense, while general and administrative expenses remained roughly flat.   

Operating income for the second quarter decreased 8.1% to RMB36.2 million (US$5.9 million), or 7.5% of net sales, from RMB39.4 million (US$6.4 million), or 9.8% of net sales, in the same period last year.

Net income for the second quarter increased 6.5% to RMB34.5 million (US$5.6 million), or RMB2.06 (US$0.34) per diluted share, compared to RMB32.4 million (US$5.3 million), or RMB1.95 (US$0.32) per diluted share, in the same period last year.  Second quarter net income, as a percentage of net sales, was 7.1% compared to 8.0% in the same period last year.

Mr. Zhiyuan Li, Chief Executive Officer of Jinpan International, stated, "Our second quarter sales of RMB 438.8 million (US$79.1 million) exceeded our expectations and represented a historical quarterly record.  The strong sales performance reflects the results of our concerted effort to increase sales volume to offset margin pressure within the industry.  This strategy is enabled by the increased production capacity and competitive cost structure of our Guilin production facility." 

"During the second quarter we experienced many of the same positive dynamics that we have seen over the past several quarters. Our product sales continued to diversify, driven by a strong increase in sales of switchgear and unit substations.  Sales to our OEM customers increased as our newest OEM, a leading global wind turbine manufacturer, ramped up shipments during the quarter." 

"While our gross margins improved from the first quarter, we continued to experience margin pressure due to rising materials cost and product mix. Foreign currency exchange rates also negatively impacted our earnings due to fluctuations in the valuation of the Euro during the quarter. We remained focused on managing our working capital and our days sales outstanding demonstrated a slight improvement."   

"Jinpan operates in a cyclical industry closely tied to China's economic environment, which is experiencing decelerating growth.  We are focused on navigating the current industry down-cycle through disciplined execution and fiscal conservatism, with a vision to enter the recovery period in a more dominant competitive position within the market."

"At the end of June 2015, our backlog equaled RMB937 million (US$153 million), up 28.6% from the same period last year and up 7.5% from the first quarter of 2015." 

Balance Sheet

As of June 30, 2015, the Company had RMB125.8 million (US$20.6 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 June 30, 2015 totaled RMB1.07 billion (US$174.2 million), compared to RMB858.0 million (US$140.2 million) as of December 31, 2014.  Total bank loans outstanding at June 30, 2015 were RMB160.3 million (US$26.2 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 9-12% compared to 2014.  Net sales are expected to be approximately RMB1.60 billion to RMB1.65 billion (US$261 million to US$270 million). Net income is expected to be in a range of approximately RMB93.8 million to RMB96.6 million (US$15.3 million to US$15.8 million).  Earnings per share are expected to be RMB5.64 to RMB5.80 (US$0.92 to US$0.95) per share.

Conference Call Information

Jinpan's management will host a conference call and webcast at 4:30 p.m. ET on Tuesday, August 11, 2015. The conference call can be accessed by dialing 1-888-389-5988 (toll free) or 1-719-457-2645 (international).  A webcast will also be available via http://public.viavid.com, with event ID: 115666.  A replay of the call will be available through August 18, 2015, by dialing 1-877-870-5176, access code 7758500.   

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:

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/jinpan-international-reports-second-quarter-2015-financial-results-300126944.html

SOURCE Jinpan International Limited