SHANGHAI, August 10, 2012 /PRNewswire-Asia/ -- 51job, Inc. (Nasdaq: JOBS), a leading provider of integrated human resource services in China, announced today unaudited financial results for the second quarter of 2012 ended June 30, 2012.
Second Quarter 2012 Financial Highlights:
Commenting on the results, Rick Yan, President and Chief Executive Officer of 51job, Inc., said, "Amid increased economic uncertainty in China, we observed softer market demand for our recruitment services in the second quarter. Despite these stronger headwinds, we moved ahead in executing our key business initiatives, adding new corporate customers and extending our sales coverage. In addition, we were pleased that the continued, rising contribution of our other HR services area offset some of the recruitment demand volatility. While employers remain cautious about hiring, we will focus our efforts on product development and service efficiency to strengthen our market position and company fundamentals for sustainable, long-term growth."
Second Quarter 2012 Unaudited Financial Results
Total revenues for the second quarter ended June 30, 2012 were RMB360.4 million (US$56.7 million), an increase of 8.4% from RMB332.4 million for the same quarter in 2011.
Online recruitment services revenues for the second quarter of 2012 were RMB235.9 million (US$37.1 million), representing a 17.6% increase from RMB200.5 million for the same quarter of the prior year. The growth was primarily due to an increase in the number of unique employers using the Company's online recruitment services as well as higher average revenue per unique employer. Unique employers increased 9.3% to 184,667 in the second quarter of 2012 compared with 168,957 in the same quarter of the prior year driven by new customer acquisition and growing adoption of online recruitment services by employers. Average revenue per unique employer increased 7.6% in the second quarter of 2012 as compared to the same quarter in 2011 due to greater customer acceptance and usage of online recruitment services.
Print advertising revenues for the second quarter of 2012 decreased 57.3% to RMB22.1 million (US$3.5 million) compared with RMB51.8 million for the same quarter in 2011 primarily due to the ongoing shift in secular demand away from print advertising services. The estimated number of print advertising pages generated in the second quarter of 2012 declined 57.8% to 664 from 1,574 pages in the same quarter in 2011. In addition, the number of cities where 51job Weekly is published decreased to 10 as of June 30, 2012 from 15 cities as of June 30, 2011.
Other human resource related revenues for the second quarter of 2012 increased 27.9% to RMB102.5 million (US$16.1 million) from RMB80.1 million in the same quarter of 2011 primarily due to greater market demand for our business process outsourcing and training services.
Gross profit for the second quarter of 2012 increased 10.7% to RMB250.8 million (US$39.5 million) from RMB226.6 million for the same quarter of the prior year. Gross margin, which is gross profit as a percentage of net revenues, expanded to 72.6% in the second quarter of 2012 compared with 71.8% in the same quarter in 2011 primarily due to greater economies of scale.
Operating expenses for the second quarter of 2012 increased 12.4% to RMB132.4 million (US$20.8 million) from RMB117.8 million for the same quarter of 2011. Operating expenses as a percentage of net revenues was 38.3% for the second quarter of 2012 compared with 37.3% for the second quarter of 2011. Sales and marketing expenses for the second quarter of 2012 increased 12.9% to RMB88.8 million (US$14.0 million) from RMB78.7 million for the same quarter of the prior year primarily due to higher employee compensation expenses and headcount additions. General and administrative expenses for the second quarter of 2012 increased 11.5% to RMB43.6 million (US$6.9 million) from RMB39.1 million in the second quarter of 2011 primarily due to higher employee compensation, rental and office expenses.
Income from operations for the second quarter of 2012 increased 8.8% to RMB118.4 million (US$18.6 million) from RMB108.8 million for the same quarter of the prior year. Operating margin, which is income from operations as a percentage of net revenues, was 34.3% in the second quarter of 2012 compared with 34.5% in the same quarter of 2011.
Net income for the second quarter of 2012 increased 37.3% to RMB114.6 million (US$18.0 million) from RMB83.5 million for the same quarter in 2011. Fully diluted earnings per common share for the second quarter of 2012 were RMB1.93 (US$0.30) compared with RMB1.41 for the same quarter in 2011. Fully diluted earnings per ADS for the second quarter of 2012 were RMB3.86 (US$0.61) compared with RMB2.82 in the second quarter of 2011.
In the second quarter of 2012, the Company recognized total share-based compensation expense of RMB11.2 million (US$1.8 million) compared with RMB9.7 million in the second quarter of 2011. The Company also recognized a gain from foreign currency translation of RMB1.0 million (US$0.2 million) in the second quarter of 2012 compared with a loss of RMB2.1 million in the second quarter of 2011.
Excluding share-based compensation expense, gain/loss from foreign currency translation and loss from impairment of long-term investments as well as their related tax impact, non-GAAP adjusted net income for the second quarter of 2012 increased 13.2% to RMB124.9 million (US$19.7 million) compared with RMB110.3 million for the second quarter of 2011. Non-GAAP adjusted fully diluted earnings per common share were RMB2.10 (US$0.33) in the second quarter of 2012 compared with RMB1.87 in the second quarter of 2011. Non-GAAP adjusted fully diluted earnings per ADS in the second quarter of 2012 were RMB4.21 (US$0.66) compared with RMB3.73 in the second quarter of 2011.
Six Months 2012 Unaudited Financial Results
Total revenues for the six months ended June 30, 2012 were RMB741.2 million (US$116.7 million), an increase of 12.8% from RMB657.0 million for the same period in 2011. Income from operations for the six months ended June 30, 2012 increased 14.9% to RMB249.2 million (US$39.2 million) from RMB216.9 million for the same period in 2011.
Net income for the six months ended June 30, 2012 increased 34.3% to RMB235.1 million (US$37.0 million) from RMB175.1 million for the same period in 2011. Fully diluted earnings per common share for the six months ended June 30, 2012 increased to RMB3.96 (US$0.62) from RMB2.96 for the same period in 2011. Fully diluted earnings per ADS for the six months ended June 30, 2012 were RMB7.92 (US$1.25) compared with RMB5.92 for the same period in 2011.
Excluding share-based compensation expense, gain/loss from foreign currency translation and loss from impairment of long-term investments as well as their related tax impact, non-GAAP adjusted net income for the six months ended June 30, 2012 increased 21.6% to RMB257.2 million (US$40.5 million) from RMB211.5 million for the six months ended June 30, 2011. Non-GAAP adjusted fully diluted earnings per common share were RMB4.33 (US$0.68) for the six months ended June 30, 2012 compared with RMB3.58 in the same period in 2011. Non-GAAP adjusted fully diluted earnings per ADS for the six months ended June 30, 2012 were RMB8.67 (US$1.36) compared with RMB7.16 in the same period in 2011.
As of June 30, 2012, the Company had cash and short-term investments totaling RMB2,280.4 million (US$358.9 million) compared with RMB2,054.0 million as of December 31, 2011. Short-term investments consist of certificates of deposit with original maturities from three months to one year.
Business Outlook
Based on current market conditions and factoring in a significant year-over-year decrease in print advertising revenues as the Company transitions away from this business, the Company's revenue target for the third quarter of 2012 is in the estimated range of RMB355 million to RMB370 million (US$55.9 million to US$58.2 million). Excluding share-based compensation expense and any loss or gain from foreign currency translation as well as their related tax impact, the Company's non-GAAP fully diluted earnings target for the third quarter of 2012 is in the estimated range of RMB1.95 to RMB2.10 per common share (US$0.61 to US$0.66 per ADS). The Company expects total share-based compensation expense in the third quarter of 2012 to be approximately RMB13 million to RMB14 million (US$2.0 million to US$2.2 million).
Other Company News
In June 2012, the Company discontinued the publication of 51job Weekly in Fuzhou but continues to maintain a sales office in the city. As a result, the Company currently operates 10 city editions of 51job Weekly.
Currency Convenience Translation
For the convenience of readers, certain Renminbi amounts have been translated into U.S. dollars at the rate of RMB6.3530 to US$1.00, the noon buying rate on June 29, 2012 in New York for cable transfers of Renminbi as set forth in the H.10 weekly statistical release of the Federal Reserve Board.
Conference Call Information
Management will hold a conference call at 9:00 p.m. Eastern Time on August 9, 2012 (9:00 a.m. Shanghai / Hong Kong time zone on August 10, 2012) to discuss its second quarter 2012 results, operating performance and business outlook.
To dial in to the call, please use conference ID 4553519 and the following telephone numbers:
US: +1-877-941-9205
Hong Kong: +852-3009-5027
International: +1-480-629-9818
The call will also be available live and on replay through 51job's investor relations website, ir.51job.com. Please go to the website at least fifteen minutes early to register or install any necessary audio software.
Use of Non-GAAP Financial Measures
To supplement the consolidated financial statements presented in accordance with United States Generally Accepted Accounting Principles (GAAP), 51job uses non-GAAP measures of income before income tax expense, income tax expense, adjusted net income, adjusted earnings per share and adjusted earnings per ADS, which are adjusted from results based on GAAP to exclude share-based compensation expense, gain/loss from foreign currency translation and loss from impairment of long-term investments as well as their related tax impact. The Company believes excluding share-based compensation expense and its related tax impact from its non-GAAP financial measures is useful for its management and investors to assess and analyze the Company's core operating results as such expense is not directly attributable to the underlying performance of the Company's business operations and do not impact its cash earnings. The Company believes excluding gain/loss from foreign currency translation and its related tax impact from its non-GAAP financial measures is useful for its management and investors as such translation loss is not indicative of the Company's core business operations and will not result in cash settlement nor impact the Company's cash earnings. The Company believes excluding the loss from impairment of long-term investments and its related tax impact from its non-GAAP financial measures is useful for its management and investors as such loss is unrelated to the Company's core business operations. 51job also believes these non-GAAP measures excluding share-based compensation expense, gain/loss from foreign currency translation and loss from impairment of long-term investments, as well as their related tax impact, are important in helping investors to understand the Company's current financial performance and future prospects and to compare business trends among different reporting periods on a consistent basis. The presentation of these additional measures should not be considered a substitute for or superior to GAAP results or as being comparable to results reported or forecasted by other companies. The non-GAAP measures have been reconciled to GAAP measures in the attached financial statements.
About 51job
51job, Inc. (Nasdaq: JOBS) is a leading provider of integrated human resource services in China with a strong focus on recruitment related services. Through online recruitment services at www.51job.com and print advertisements in 51job Weekly, 51job enables enterprises to attract, identify and recruit employees and connects millions of job seekers with employment opportunities. 51job also provides a number of other value-added human resource services, including business process outsourcing, training, executive search and compensation and benefits analysis. 51job has a call center in Wuhan and a nationwide sales office network spanning 25 cities across China.
Safe Harbor Statement
Statements in this release regarding targets for the third quarter of 2012, future business and operating results constitute "forward-looking" statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the Private Securities Litigation Reform Act of 1995. These statements are based upon management's current expectations, and actual results could differ materially. Among the factors that could cause actual results to differ are the number of recruitment advertisements placed, sales orders received and customer contracts executed during the remaining weeks of the third quarter of 2012; any accounting adjustments that may occur during the quarterly close; fluctuations in the value of the Renminbi against the U.S. dollar and other currencies; behavioral and operational changes of customers in meeting their human resource needs as they respond to evolving social, economic and political changes in China as well as stock market volatilities; introduction by its competitors of new or enhanced products or services; price competition in the market for the various human resource services that the Company provides in China; acceptance of new products and services developed or introduced by the Company outside of the human resources industry and fluctuations in general economic conditions. For additional information on these and other factors that may affect the Company's financial results, please refer to the Company's filings with the Securities and Exchange Commission. 51job undertakes no obligation to update these targets prior to announcing final results for the third quarter of 2012 or as a result of new information, future events or otherwise.
51job, Inc. Consolidated Statements of Operations and Comprehensive Income
| |||
For the Three Months Ended | |||
| June 30, 2011 (unaudited) | June 30, 2012 (unaudited) | June 30, 2012 (unaudited) |
RMB | RMB | USD (Note 1) | |
Revenues: | |||
Online recruitment services | 200,543 | 235,861 | 37,126 |
Print advertising | 51,785 | 22,098 | 3,478 |
Other human resource related revenues | 80,111 | 102,469 | 16,129 |
Total revenues | 332,439 | 360,428 | 56,733 |
Less: Business and related tax | (17,067) | (15,094) | (2,376) |
Net revenues | 315,372 | 345,334 | 54,357 |
Cost of services (Note 2) | (88,781) | (94,503) | (14,875) |
Gross profit | 226,591 | 250,831 | 39,482 |
Operating expenses: | |||
Sales and marketing (Note 3) | (78,679) | (88,803) | (13,978) |
General and administrative (Note 4) | (39,092) | (43,584) | (6,860) |
Total operating expenses | (117,771) | (132,387) | (20,838) |
Income from operations | 108,820 | 118,444 | 18,644 |
Gain (Loss) from foreign currency translation | (2,067) | 960 | 151 |
Loss from impairment of long-term investments | (15,081) | ———— | ———— |
Interest and investment income | 11,255 | 15,383 | 2,421 |
Other income | 3,238 | 2,774 | 437 |
Income before income tax expense | 106,165 | 137,561 | 21,653 |
Income tax expense | (22,702) | (22,948) | (3,612) |
Net income | 83,463 | 114,613 | 18,041 |
Other comprehensive income: | |||
Currency translation adjustments | 88 | (18) | (3) |
Comprehensive income | 83,551 | 114,595 | 18,038 |
Earnings per share: | |||
Basic | 1.47 | 1.99 | 0.31 |
Diluted | 1.41 | 1.93 | 0.30 |
Earnings per ADS (Note 5): | |||
Basic | 2.94 | 3.98 | 0.63 |
Diluted | 2.82 | 3.86 | 0.61 |
Weighted average number of common shares outstanding: | |||
Basic | 56,723,431 | 57,573,988 | 57,573,988 |
Diluted | 59,131,101 | 59,339,624 | 59,339,624 |
__________ | |||
Notes: |
1. The conversion of Renminbi amounts into U.S. dollar amounts is based on the noon buying rate of US$1.00 to RMB6.3530 on June 29, 2012 in New York for cable transfers of Renminbi as set forth in the H.10 weekly statistical release of the Federal Reserve Board. |
2. Includes share-based compensation expense of RMB1,554 and RMB1,795 (US$283) for the three months ended June 30, 2011 and 2012, respectively. |
3. Includes share-based compensation expense of RMB1,336 and RMB1,543 (US$243) for the three months ended June 30, 2011 and 2012, respectively. |
4. Includes share-based compensation expense of RMB6,808 and RMB7,867 (US$1,238) for the three months ended June 30, 2011 and 2012, respectively. |
5. Each ADS represents two common shares. |
51job, Inc. Consolidated Statements of Operations and Comprehensive Income | |||
For the Six Months Ended | |||
| June 30, 2011 | June 30, 2012 | June 30, 2012 |
RMB | RMB | USD (Note 1) | |
Revenues: | |||
Online recruitment services | 373,331 | 464,940 | 73,184 |
Print advertising | 138,190 | 69,906 | 11,004 |
Other human resource related revenues | 145,466 | 206,394 | 32,487 |
Total revenues | 656,987 | 741,240 | 116,675 |
Less: Business and related tax | (35,765) | (32,289) | (5,082) |
Net revenues | 621,222 | 708,951 | 111,593 |
Cost of services (Note 2) | (179,154) | (194,836) | (30,668) |
Gross profit | 442,068 | 514,115 | 80,925 |
Operating expenses: | |||
Sales and marketing (Note 3) | (149,343) | (179,172) | (28,203) |
General and administrative (Note 4) | (75,794) | (85,735) | (13,495) |
Total operating expenses | (225,137) | (264,907) | (41,698) |
Income from operations | 216,931 | 249,208 | 39,227 |
Gain (Loss) from foreign currency translation | (5,542) | 798 | 125 |
Loss from impairment of long-term investments | (15,081) | ———— | ———— |
Interest and investment income | 18,717 | 29,597 | 4,659 |
Other income | 3,536 | 2,788 | 439 |
Income before provision for income tax | 218,561 | 282,391 | 44,450 |
Income tax expense | (43,487) | (47,270) | (7,441) |
Net income | 175,074 | 235,121 | 37,009 |
Other comprehensive income: | |||
Currency translation adjustments | 159 | (21) | (3) |
Comprehensive income | 175,233 | 235,100 | 37,006 |
Earnings per share: | |||
Basic | 3.09 | 4.10 | 0.65 |
Diluted | 2.96 | 3.96 | 0.62 |
Earnings per ADS (Note 5): | |||
Basic | 6.18 | 8.20 | 1.29 |
Diluted | 5.92 | 7.92 | 1.25 |
Weighted average number of common shares outstanding: | |||
Basic | 56,616,471 | 57,349,518 | 57,349,518 |
Diluted | 59,097,459 | 59,340,203 | 59,340,203 |
__________ | |||
Notes: |
1. The conversion of Renminbi amounts into U.S. dollar amounts is based on the noon buying rate of US$1.00 to RMB6.3530 on June 29, 2012 in New York for cable transfers of Renminbi as set forth in the H.10 weekly statistical release of the Federal Reserve Board. |
2. Includes share-based compensation expense of RMB2,540 and RMB3,497 (US$550) for the six months ended June 30, 2011 and 2012, respectively. |
3. Includes share-based compensation expense of RMB2,183 and RMB3,006 (US$473) for the six months ended June 30, 2011 and 2012, respectively. |
4. Includes share-based compensation expense of RMB11,127 and RMB16,364 (US$2,576) for the six months ended June 30, 2011 and 2012, respectively. |
5. Each ADS represents two common shares. |
51job, Inc. Reconciliation of GAAP and Non-GAAP Results
| |||
For the Three Months Ended | |||
| June 30, 2011 | June 30, 2012 | June 30, 2012 |
RMB | RMB | USD (Note 1) | |
GAAP income before income tax expense | 106,165 | 137,561 | 21,653 |
Add back: Share-based compensation expense | 9,698 | 11,205 | 1,764 |
Add back: (Gain) Loss from foreign currency translation | 2,067 | (960) | (151) |
Add back: Loss from impairment of long-term investments | 15,081 | ———— | ———— |
Non-GAAP income before income tax expense | 133,011 | 147,806 | 23,266 |
GAAP income tax expense | (22,702) | (22,948) | (3,612) |
Tax impact of share-based compensation expense, gain |
(27) |
1 |
0 |
Non-GAAP income tax expense | (22,729) | (22,947) | (3,612) |
Non-GAAP adjusted net income | 110,282 | 124,859 | 19,654 |
Non-GAAP adjusted earnings per share: | |||
Basic | 1.94 | 2.17 | 0.34 |
Diluted | 1.87 | 2.10 | 0.33 |
Non-GAAP adjusted earnings per ADS (Note 2): | |||
Basic | 3.89 | 4.34 | 0.68 |
Diluted | 3.73 | 4.21 | 0.66 |
Weighted average number of common shares outstanding: | |||
Basic | 56,723,431 | 57,573,988 | 57,573,988 |
Diluted | 59,131,101 | 59,339,624 | 59,339,624 |
For the Six Months Ended | |||
| June 30, 2011 | June 30, 2012 | June 30, 2012 |
RMB | RMB | USD (Note 1) | |
GAAP income before income tax expense | 218,561 | 282,391 | 44,450 |
Add back: Share-based compensation expense | 15,850 | 22,867 | 3,599 |
Add back: (Gain) Loss from foreign currency translation | 5,542 | (798) | (125) |
Add back: Loss from impairment of long-term investments | 15,081 | ———— | ———— |
Non-GAAP income before income tax expense | 255,034 | 304,460 | 47,924 |
GAAP income tax expense | (43,487) | (47,270) | (7,441) |
Tax impact of share-based compensation expense, gain |
(42) |
1 |
0 |
Non-GAAP income tax expense | (43,529) | (47,269) | (7,441) |
Non-GAAP adjusted net income | 211,505 | 257,191 | 40,483 |
Non-GAAP adjusted earnings per share: | |||
Basic | 3.74 | 4.48 | 0.71 |
Diluted | 3.58 | 4.33 | 0.68 |
Non-GAAP adjusted earnings per ADS (Note 2): | |||
Basic | 7.47 | 8.97 | 1.41 |
Diluted | 7.16 | 8.67 | 1.36 |
Weighted average number of common shares outstanding: | |||
Basic | 56,616,471 | 57,349,518 | 57,349,518 |
Diluted | 59,097,459 | 59,340,203 | 59,340,203 |
__________ | |||
Notes: |
1. The conversion of RMB amounts into USD amounts is based on the noon buying rate of USD1.00=RMB6.3530 on June 29, 2012 in New York for cable transfers of RMB as set forth in the H.10 weekly statistical release of the Federal Reserve Board. |
2. Each ADS represents two common shares. |
51job, Inc. Consolidated Balance Sheets
| |||
As of | |||
| December 31, 2011 (unaudited) | June 30, 2012 (unaudited) | June 30, 2012 (unaudited) |
RMB | RMB | USD (Note 1) | |
ASSETS | |||
Current assets: | |||
Cash | 783,699 | 853,560 | 134,356 |
Restricted cash | 4,263 | 4,485 | 706 |
Short-term investments | 1,270,343 | 1,426,846 | 224,594 |
Accounts receivable (net of allowance of RMB2,022 |
43,708 |
37,108 |
5,841 |
Prepayments and other current assets | 199,836 | 349,418 | 55,001 |
Deferred tax assets, current | 11,042 | 5,026 | 791 |
Total current assets | 2,312,891 | 2,676,443 | 421,289 |
Property and equipment, net | 192,120 | 191,055 | 30,073 |
Intangible assets, net | 4,290 | 3,602 | 567 |
Other long-term assets | 48,649 | 58,621 | 9,227 |
Deferred tax assets, non-current | 86 | 8 | 1 |
Total non-current assets | 245,145 | 253,286 | 39,868 |
Total assets | 2,558,036 | 2,929,729 | 461,157 |
LIABILITIES | |||
Current liabilities: | |||
Accounts payable | 20,326 | 25,765 | 4,056 |
Salary and employee related accrual | 44,287 | 33,981 | 5,349 |
Taxes payable | 54,623 | 44,731 | 7,041 |
Advance from customers | 290,460 | 343,489 | 54,067 |
Other payables and accruals | 40,793 | 84,931 | 13,369 |
Total current liabilities | 450,489 | 532,897 | 83,882 |
Deferred tax liabilities, non-current | 1,972 | 1,807 | 284 |
Total liabilities | 452,461 | 534,704 | 84,166 |
Shareholders' equity: | |||
Common shares (US$0.0001 par value; 500,000,000 |
47 |
47 |
7 |
Additional paid-in capital | 1,061,819 | 1,116,169 | 175,692 |
Statutory reserves | 7,332 | 7,332 | 1,154 |
Other comprehensive income | 1,638 | 1,617 | 254 |
Retained earnings | 1,034,739 | 1,269,860 | 199,884 |
Total shareholders' equity | 2,105,575 | 2,395,025 | 376,991 |
Total liabilities and shareholders' equity | 2,558,036 | 2,929,729 | 461,157 |
__________ | |||
Note 1: The conversion of Renminbi amounts into U.S. dollar amounts is based on the noon buying rate of US$1.00 to RMB6.3530 on June 29, 2012 in New York for cable transfers of Renminbi as set forth in the H.10 weekly statistical release of the Federal Reserve Board. |