SHANGHAI, March 4 /PRNewswire-Asia/ -- 51job, Inc.
(Nasdaq: JOBS), a leading provider of integrated human resource services in China, announced today unaudited financial results for the fourth quarter of 2008 and for the fiscal year ended December 31, 2008.
Fourth Quarter 2008 Financial Highlights:
-- Total revenues decreased 8.1% over Q4 2007 to RMB196.2 million (US$28.8
million), but exceeded the Company’s guidance range of RMB185 to
RMB195 million
-- Gross margin of 51.0% compared with 55.8% in Q4 2007
-- Operating income decreased to RMB5.9 million (US$0.9 million)
-- Fully diluted earnings per common share were RMB0.12 (US$0.04 per ADS)
-- Excluding share-based compensation expense and foreign currency
translation gain, non-GAAP adjusted fully diluted earnings per common
share were RMB0.24 (US$0.07 per ADS), within the Company’s guidance
range of RMB0.20 to RMB0.30
-- Cash and short-term investments totaling RMB1,074.4 million (US$157.5
million) as of December 31, 2008
Fiscal Year 2008 Financial Highlights:
-- Total revenues increased 1.9% over 2007 to RMB860.4 million (US$126.1
million)
-- Gross margin of 53.7% compared with 56.3% in 2007
-- Operating income decreased 31.2% over 2007 to RMB96.8 million (US$14.2
million)
-- Fully diluted earnings per common share were RMB1.35 (US$0.40 per ADS)
-- Excluding share-based compensation expense and foreign currency
translation loss, non-GAAP adjusted income decreased 19.6% over 2007 to
RMB121.8 million (US$17.8 million) and non-GAAP adjusted fully diluted
earnings per common share were RMB2.15 (US$0.63 per ADS)
Commenting on the results, Rick Yan, President and Chief Executive Officer of 51job, Inc., said, “Hiring activity slowed materially in the fourth quarter as many corporate customers scaled back their recruitment efforts and cut spending in the face of worsening global economic conditions. The current market sentiment among employers in China continues to be highly cautious and we believe it will remain so throughout 2009 as companies navigate through these unprecedented and challenging times.”
“Partially offsetting the effect of the economic downturn on our recruitment businesses, we were pleased that our other HR related services maintained solid growth momentum throughout last year. We believe that our ongoing investments in corporate training and HR outsourcing services have provided us with a significant competitive advantage, enabling us to build deeper relationships with customers and capture a greater share of corporate HR budgets. With our diverse product portfolio, premier brand name and strong balance sheet, we believe that we are in a strong position to capitalize on opportunities in 2009 and beyond,” said Mr. Yan.
Fourth Quarter 2008 Unaudited Financial Results
Total revenues for the fourth quarter ended December 31, 2008 were RMB196.2 million (US$28.8 million), a decrease of 8.1% from RMB213.6 million for the same quarter in 2007.
Print advertising revenues for the fourth quarter of 2008 decreased 37.4% to RMB59.7 million (US$8.8 million) from RMB95.4 million for the same quarter in 2007. The decrease was primarily due to lower average revenue per page resulting from higher revenue contribution from lower priced cities and less page volume in 51job Weekly, which was impacted by a slowdown in market demand and reduced hiring activity during the fourth quarter of 2008. Print advertising prices charged in each city were relatively unchanged compared with rates in the fourth quarter of 2007, but average revenue per page decreased 28.2% over the same quarter in 2007 as lower priced cities comprised a larger portion of print advertising volumes. The estimated number of print advertising pages generated in the fourth quarter of 2008 decreased 12.9% to 3,452 compared with 3,962 pages in the same quarter in 2007.
Online recruitment services revenues for the fourth quarter of 2008 decreased 5.4% to RMB72.7 million (US$10.7 million) from RMB76.9 million for the same quarter in 2007. The decrease was primarily the result of a decline in market demand and reduced corporate spending on online recruitment products. Average revenue per unique employer decreased 4.6% in the fourth quarter of 2008 compared to the same quarter in 2007. Unique employers using the Company’s online recruitment services decreased 0.9% to 57,071 in the fourth quarter of 2008 from 57,565 in the same quarter of the prior year.
Executive search revenues for the fourth quarter of 2008 was RMB2.4 million (US$0.3 million) compared with RMB4.0 million for the same quarter in 2007. For the fourth quarter of 2008, other human resource related revenues grew 64.5% to RMB61.4 million (US$9.0 million) from RMB37.3 million in the fourth quarter of 2007 principally due to greater customer demand for human resource outsourcing services as well as the inclusion of RMB5.8 million (US$0.8 million) in service fees from certain newspaper contractors in the fourth quarter of 2008.
Gross profit for the fourth quarter of 2008 was RMB94.5 million (US$13.8 million) compared with RMB112.8 million for the same quarter of the prior year. Gross margin, which is equal to gross profit divided by net revenues, decreased to 51.0% in the fourth quarter of 2008 compared with 55.8% in the same quarter in 2007.
Operating expenses for the fourth quarter of 2008 were RMB88.6 million (US$13.0 million) compared with RMB92.4 million for the same quarter in 2007. Operating expenses as a percentage of net revenues was 47.8% for the fourth quarter of 2008 compared with 45.7% for the fourth quarter of 2007. Excluding share-based compensation expense, operating expenses as a percentage of net revenues was 44.4% in the fourth quarter of 2008 compared with 42.7% for the fourth quarter of 2007.
Sales and marketing expenses for the fourth quarter of 2008 increased 6.4% to RMB58.2 million (US$8.5 million) from RMB54.7 million for the same quarter in 2007 primarily due to increased labor costs from staff additions and higher wage levels compared to the fourth quarter of 2007.
General and administrative expenses for the fourth quarter of 2008 decreased 19.5% to RMB30.4 million (US$4.5 million) from RMB37.8 million in the fourth quarter of 2007. The decrease was primarily due to a RMB9.7 million loss provision related to a third party contractor recorded in the fourth quarter of 2007, partially offset by higher rental, property management and office expenses in the fourth quarter of 2008 as compared to the same quarter in 2007.
Income from operations for the fourth quarter of 2008 decreased to RMB5.9 million (US$0.9 million) from RMB20.4 million for the same quarter of the prior year. The Company’s effective tax rate increased to 44.7% in the fourth quarter of 2008 compared with 33.4% in the fourth quarter of the prior year as certain non-tax deductible expenses, including share-based compensation, comprised a higher portion of the taxable income base.
Net income for the fourth quarter of 2008 decreased to RMB6.8 million (US$1.0 million) from RMB13.7 million for the same quarter in 2007. Fully diluted earnings per common share for the fourth quarter of 2008 were RMB0.12 (US$0.02) compared with RMB0.24 for the same quarter in 2007. Fully diluted earnings per ADS for the fourth quarter of 2008 were RMB0.24 (US$0.04) compared with RMB0.48 in the fourth quarter of 2007.
In the fourth quarter of 2008, the Company recognized total share-based compensation expense of RMB7.5 million (US$1.1 million) compared with RMB7.3 million in the fourth quarter of 2007. The Company also recognized a foreign currency translation gain of RMB0.6 million (US$0.1 million) in the fourth quarter of 2008 compared with a translation loss of RMB7.4 million in the fourth quarter of 2007 resulting from the slight depreciation of the Renminbi against the U.S. dollar during the last quarter of 2008.
Excluding share-based compensation expense and the impact of foreign currency translation, non-GAAP adjusted income for the fourth quarter of 2008 decreased to RMB13.6 million (US$2.0 million) from RMB28.4 million for the fourth quarter of 2007. Non-GAAP adjusted fully diluted earnings per common share were RMB0.24 (US$0.04) in the fourth quarter of 2008 compared with RMB0.50 in the fourth quarter of 2007. Non-GAAP adjusted fully diluted earnings per ADS in the fourth quarter of 2008 were RMB0.48 (US$0.07) compared with RMB1.00 in the fourth quarter of 2007.
Fiscal Year 2008 Unaudited Financial Results
Total revenues for 2008 were RMB860.4 million (US$126.1 million), an increase of 1.9% from RMB844.3 million in 2007. Income from operations for 2008 decreased 31.2% to RMB96.8 million (US$14.2 million) from RMB140.7 million for 2007.
The estimated number of print advertising pages generated in 2008 was 16,512 compared with 16,568 estimated pages in 2007. Unique employers using the Company’s online recruitment services grew 9.0% to 102,562 in 2008 from 94,125 in 2007. Employers who purchase online services multiple times or in multiple quarters throughout the fiscal year are counted as one unique employer for the annual total.
Net income for 2008 decreased 26.0% to RMB76.6 million (US$11.2 million) compared with RMB103.6 million for 2007. Fully diluted earnings per common share for 2008 decreased to RMB1.35 (US$0.20) from RMB1.83 in 2007. Fully diluted earnings per ADS for 2008 were RMB2.70 (US$0.40) compared with RMB3.66 in 2007.
Excluding share-based compensation expense and foreign currency translation loss, non-GAAP adjusted income for 2008 decreased 19.6% to RMB121.8 million (US$17.8 million) from RMB151.3 million for 2007. Non-GAAP adjusted fully diluted earnings per common share were RMB2.15 (US$0.32) for 2008 compared with RMB2.67 for 2007. Non-GAAP adjusted fully diluted earnings per ADS in 2008 were RMB4.29 (US$0.63) compared with RMB5.35 in 2007.
As of December 31, 2008, the Company had cash and short-term investments totaling RMB1,074.4 million (US$157.5 million), an increase from RMB1,007.5 million at December 31, 2007.
Business Outlook
For the first quarter of 2009, based on current market and operating conditions, the Company’s revenue target is in the estimated range of RMB175 million to RMB185 million (US$25.7 million to US$27.1 million). Excluding share-based compensation expense and any foreign currency translation losses or gains, the Company’s non-GAAP fully diluted earnings target for the first quarter of 2009 is in the estimated range of nil to RMB0.10 per common share (nil to US$0.03 per ADS). The Company expects aggregate share-based compensation expense in the first quarter of 2009 to be in the estimated range of RMB7 million to RMB8 million (US$1.0 million to US$1.2 million).
Other Company News
On September 30, 2008, the Company announced that its shareholders had approved a share repurchase program authorizing the repurchase of up to US$25 million worth of outstanding ADSs. In the fourth quarter of 2008, the Company repurchased 136,827 ADSs, representing 273,654 common shares, in the open market at an average price of US$6.65 per ADS.
In January 2009, the Company terminated the publication of the local edition of 51job Weekly in Changchun. The Company continues to maintain an office in Changchun for sales and customer service support. Also in January 2008, the Company completed the change of its newspaper contractor in Dalian to Northern Times.
Currency Convenience Translation
For the convenience of readers, certain Renminbi amounts have been translated into U.S. dollars at the rate of RMB6.8225 to US$1.00 the noon buying rate in the City of New York for cable transfers of Renminbi per U.S. dollar as certified for customs purposes by the Federal Reserve Bank of New York, as of December 31, 2008.
Conference Call Information
Management of 51job will host a conference call at 8:00 p.m. Eastern Time on March 3, 2009 (9:00 a.m. Shanghai / Hong Kong time zone on March 4, 2009) to discuss fourth quarter and fiscal year 2008 results. The call will be available live and on replay through 51job’s investor relations website, http://ir.51job.com . Please go to the website at least fifteen minutes early to register and install any necessary audio software. Participants may also dial into the teleconference at +1-888-401-4685 (+1-719-325-2244 for international callers) and provide the passcode 7036164. An audio replay of the conference call will be available three hours after completion through March 10, 2009, by dialing +1-888-203-1112 (+1-719-457-0820 for international callers) and entering the passcode 7036164.
Note Regarding Preliminary Unaudited Financial Information
The unaudited financial information contained in this press release is preliminary and subject to change. The audit of the financial statements and related notes to be included in the Company’s annual report on Form 20-F for the year ended December 31, 2008 is currently in progress and adjustments to the financial statements may be identified when the audit process is completed. As a result, the audited financial statements may be materially different from the preliminary unaudited financial information contained in this press release. In addition, because management’s evaluation of the Company’s internal controls over financial reporting in connection with the
Sarbanes-Oxley Act of 2002 has not yet been completed, the Company currently makes no representation as to the effectiveness of those internal controls as of December 31, 2008.
Use of Non-GAAP Financial Measures
To supplement the consolidated financial information presented in accordance with United States Generally Accepted Accounting Principles (GAAP), 51job uses non-GAAP measures of adjusted income, adjusted earnings per common share and adjusted earnings per ADS, which are adjusted from results based on GAAP to exclude the impact of share-based compensation expense and foreign currency translation gain or loss. The Company believes excluding share-based compensation expense 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 foreign currency translation gain or loss from its non-GAAP financial measures is useful for its management and investors as such translation gain or loss is unrelated to the Company’s core business operations and will not result in cash settlement nor impact the Company’s cash earnings. 51job also believes these non-GAAP measures excluding share-based compensation expense and foreign currency translation gain or loss 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 information.
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. Offering a broad array of products and services, 51job connects millions of job seekers with employment opportunities and streamlines the recruitment process and human resource administration for tens of thousands of companies in China. Through print advertisements in 51job Weekly and online recruitment services at http://www.51job.com, both domestic Chinese employers and multinational companies alike are able to attract, identify and recruit new employees. 51job also provides executive search services and a number of other value-added human resource services, including training, business process outsourcing and salary surveys. 51job’s nationwide office network in China spans 26 cities operating 22 local editions of 51job Weekly.
Safe Harbor Statement
Statements in this release regarding targets for the first quarter of 2009, 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 first quarter of 2009; 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 first quarter of 2009 or as a result of new information, future events or otherwise.
- Financial tables to follow -
51job, Inc.
Consolidated Statements of Operations
For the Three Months Ended
December 31, December 31, December 31,
2007 2008 2008
(In thousands, except number (unaudited) (unaudited) (unaudited)
of shares and per share data) RMB RMB USD (Note 1)
Revenues:
Print advertising 95,430 59,699 8,750
Online recruitment services 76,882 72,741 10,662
Executive search 3,966 2,379 349
Other human resource related
revenues 37,325 61,392 8,999
Total revenues 213,603 196,211 28,760
Less: Business and related tax (11,327) (10,866) (1,593)
Net revenues 202,276 185,345 27,167
Cost of services (Note 2) (89,439) (90,879) (13,321)
Gross profit 112,837 94,466 13,846
Operating expenses:
Sales and marketing (Note 3) (54,674) (58,192) (8,529)
General and administrative (Note 4) (37,762) (30,398) (4,456)
Total operating expenses (92,436) (88,590) (12,985)
Income from operations 20,401 5,876 861
(Loss) Gain from foreign currency
translation (7,397) 637 93
Interest and investment income 6,760 6,193 908
Other income (expense) 831 (487) (71)
Income before provision for income tax 20,595 12,219 1,791
Income tax expense (6,882) (5,463) (801)
Net income 13,713 6,756 990
Earnings per share:
Basic 0.24 0.12 0.02
Diluted 0.24 0.12 0.02
Earnings per ADS (Note 5):
Basic 0.49 0.24 0.04
Diluted 0.48 0.24 0.04
Weighted average number of common
shares outstanding:
Basic 56,457,123 56,584,296 56,584,296
Diluted 56,706,721 56,659,627 56,659,627
Notes:
1. The conversion of RMB amounts into USD amounts is based on the noon
buying rate of USD1.00=RMB6.8225 on December 31, 2008 in The City of
New York for cable transfers of RMB as certified for customs purposes
by the Federal Reserve Bank of New York.
2. Includes share-based compensation expense of RMB1,279 and RMB1,210
(US$177) for the three months ended December 31, 2007 and 2008,
respectively.
3. Includes share-based compensation expense of RMB1,100 and RMB1,040
(US$153) for the three months ended December 31, 2007 and 2008,
respectively.
4. Includes share-based compensation expense of RMB4,946 and RMB5,220
(US$765) for the three months ended December 31, 2007 and 2008,
respectively.
5. Each ADS represents two common shares.
51job, Inc.
Consolidated Statements of Operations
For the Year Ended
December 31, December 31, December 31,
2007 2008 2008
(In thousands, except number (audited) (unaudited) (unaudited)
of shares and per share data) RMB RMB USD (Note 1)
Revenues:
Print advertising 430,621 359,234 52,654
Online recruitment services 282,688 312,121 45,749
Executive search 16,086 13,979 2,049
Other human resource related
revenues 114,871 175,083 25,663
Total revenues 844,266 860,417 126,115
Less: Business and related tax (44,982) (44,939) (6,587)
Net revenues 799,284 815,478 119,528
Cost of services (Note 2) (349,022) (377,487) (55,330)
Gross profit 450,262 437,991 64,198
Operating expenses:
Sales and marketing (Note 3) (181,230) (215,228) (31,547)
General and administrative (Note 4) (128,347) (125,981) (18,465)
Total operating expenses (309,577) (341,209) (50,012)
Income from operations 140,685 96,782 14,186
Loss from foreign currency translation (18,134) (17,732) (2,599)
Interest and investment income 24,635 26,400 3,869
Other income 1,793 2,327 341
Income before provision for income tax 148,979 107,777 15,797
Income tax expense (45,402) (31,176) (4,570)
Net income 103,577 76,601 11,227
Earnings per share:
Basic 1.84 1.35 0.20
Diluted 1.83 1.35 0.20
Earnings per ADS (Note 5):
Basic 3.68 2.71 0.40
Diluted 3.66 2.70 0.40
Weighted average number of common
shares outstanding:
Basic 56,279,193 56,581,719 56,581,719
Diluted 56,631,598 56,709,513 56,709,513
Notes:
1. The conversion of RMB amounts into USD amounts is based on the noon
buying rate of USD1.00=RMB6.8225 on December 31, 2008 in The City of
New York for cable transfers of RMB as certified for customs purposes
by the Federal Reserve Bank of New York.
2. Includes share-based compensation expense of RMB4,931 and RMB4,564
(US$669) for 2007 and 2008, respectively.
3. Includes share-based compensation expense of RMB4,241 and RMB3,923
(US$575) for 2007 and 2008, respectively.
4. Includes share-based compensation expense of RMB20,479 and RMB18,947
(US$2,777) for 2007 and 2008, respectively.
5. Each ADS represents two common shares.
51job, Inc.
Reconciliation of GAAP and Non-GAAP Results
For the Three Months Ended
December 31, December 31, December 31,
2007 2008 2008
(In thousands, except number (unaudited) (unaudited) (unaudited)
of shares and per share data) RMB RMB USD (Note 1)
GAAP income before provision
for income tax 20,595 12,219 1,791
Add back: Share-based compensation
expense 7,325 7,470 1,095
Add back: Loss (Gain) from foreign
currency translation 7,397 (637) (93)
Non-GAAP income before provision for
income tax 35,317 19,052 2,793
Non-GAAP income tax expense (6,886) (5,459) (800)
Non-GAAP adjusted income 28,431 13,593 1,993
Non-GAAP adjusted earnings per share:
Basic 0.50 0.24 0.04
Diluted 0.50 0.24 0.04
Non-GAAP adjusted earnings per ADS
(Note 2):
Basic 1.00 0.48 0.07
Diluted 1.00 0.48 0.07
Weighted average number of common
shares outstanding:
Basic 56,457,123 56,584,296 56,584,296
Diluted 56,706,721 56,659,627 56,659,627
For the Year Ended
December 31, December 31, December 31,
2007 2008 2008
(In thousands, except number (unaudited) (unaudited) (unaudited)
of shares and per share data) RMB RMB USD (Note 1)
GAAP income before provision
for income tax 148,979 107,777 15,797
Add back: Share-based compensation
expense 29,651 27,434 4,021
Add back: Loss from foreign currency
translation 18,134 17,732 2,599
Non-GAAP income before provision for
income tax 196,764 152,943 22,417
Non-GAAP income tax expense (45,415) (31,185) (4,571)
Non-GAAP adjusted net income 151,349 121,758 17,846
Non-GAAP adjusted earnings per share:
Basic 2.69 2.15 0.32
Diluted 2.67 2.15 0.32
Non-GAAP adjusted earnings per ADS
(Note 2):
Basic 5.38 4.30 0.63
Diluted 5.35 4.29 0.63
Weighted average number of common
shares outstanding:
Basic 56,279,193 56,581,719 56,581,719
Diluted 56,631,598 56,709,513 56,709,513
Notes:
1. The conversion of RMB amounts into USD amounts is based on the noon
buying rate of USD1.00=RMB6.8225 on December 31, 2008 in The City of
New York for cable transfers of RMB as certified for customs purposes
by the Federal Reserve Bank of New York.
2. Each ADS represents two common shares.
51job, Inc.
Consolidated Balance Sheets
December 31, December 31, December 31,
2007 2008 2008
(In thousands, except number of (audited) (unaudited) (unaudited)
shares) RMB RMB USD (Note 1)
ASSETS
Current assets:
Cash 1,007,520 1,058,310 155,121
Short-term investments -- 16,100 2,360
Accounts receivable (net of
allowance of RMB3,879 and
RMB2,783 as of December 31,
2007 and 2008, respectively) 29,706 19,524 2,862
Prepayments and other current
assets 33,132 44,996 6,595
Deferred tax assets, current 4,930 2,322 340
Total current assets 1,075,288 1,141,252 167,278
Long-term investments 8,788 15,927 2,335
Property and equipment 205,984 205,805 30,166
Intangible assets 6,869 4,669 684
Other long-term assets 5,031 6,311 925
Deferred tax assets, non-current 1,206 405 59
Total assets 1,303,166 1,374,369 201,447
LIABILITIES
Current liabilities:
Accounts payable 9,804 10,511 1,541
Salary and employee related
accrual 29,064 22,371 3,279
Taxes payable 33,498 13,337 1,955
Advance from customers 75,535 87,639 12,845
Other payables and accruals 28,214 12,939 1,897
Total current liabilities 176,115 146,797 21,517
Deferred tax liabilities, non-current 516 730 107
Total liabilities 176,631 147,527 21,624
Shareholders’ equity:
Common shares (US$0.0001 par
value; 500,000,000 shares
authorized, 56,519,471 and
56,378,139 shares issued and
outstanding as of December 31,
2007 and 2008, respectively) 47 47 7
Additional paid-in capital 894,019 917,352 134,460
Statutory reserves 5,991 6,946 1,018
Other comprehensive gain 680 1,054 154
Retained earnings 225,798 301,443 44,184
Total shareholders’ equity 1,126,535 1,226,842 179,823
Total liabilities and shareholders’
equity 1,303,166 1,374,369 201,447
Note 1: The conversion of RMB amounts into USD amounts is based on the
noon buying rate of USD1.00=RMB6.8225 on December 31, 2008 in The
City of New York for cable transfers of RMB as certified for
customs purposes by the Federal Reserve Bank of New York.
For more information, please contact:
Linda Chien
Investor Relations
51job, Inc.
Tel: +86-21-6879-6250
Email: investor.relations@51job.com
