omniture

51job, Inc. Reports Fourth Quarter and Fiscal Year 2009 Financial Results

2010-03-04 23:56 1251

SHANGHAI, March 5 /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 2009 and for the fiscal year ended December 31, 2009.

Fourth Quarter 2009 Financial Highlights:

-- Total revenues increased 15.2% over Q4 2008 to RMB226.0 million

(US$33.1 million), above the Company's guidance range of RMB215 million

to RMB225 million

-- Gross margin expanded to 62.8% compared with 51.0% in Q4 2008

-- Operating income increased to RMB41.7 million (US$6.1 million) compared

with RMB5.9 million in Q4 2008

-- Fully diluted earnings per common share were RMB0.84 (US$0.24 per ADS)

-- Excluding share-based compensation expense and foreign currency

translation loss, non-GAAP adjusted fully diluted earnings per common

share were RMB0.95 (US$0.28 per ADS), exceeding the Company's guidance

range of RMB0.58 to RMB0.68

-- Cash and short-term investments increased to RMB1,214.7 million

(US$178.0 million) as of December 31, 2009

Fiscal Year 2009 Financial Highlights:

-- Total revenues decreased 5.0% from 2008 to RMB817.1 million (US$119.7

million)

-- Gross margin of 60.5% compared with 53.7% in 2008

-- Operating income increased 24.3% over 2008 to RMB120.3 million (US$17.6

million)

-- Fully diluted earnings per common share were RMB2.02 (US$0.59 per ADS)

-- Excluding share-based compensation expense and foreign currency

translation loss, non-GAAP adjusted fully diluted earnings per common

share were RMB2.51 (US$0.73 per ADS)

Commenting on the results, Rick Yan, President and Chief Executive Officer of 51job, Inc., said, "In light of the challenges we faced and overcame in 2009, we were especially pleased to end the year on a high note by achieving record profit in the fourth quarter. We have observed a strengthening trend in market conditions and believe our online business in particular has carried solid momentum into 2010. In addition, with the opening of our new call center in Wuhan, this business is well positioned to not only extend our geographic reach and addressable employer base, but also streamline our service network for greater efficiency and margin expansion. We believe the year is off to a robust start for 51job."

Fourth Quarter 2009 Unaudited Financial Results

Total revenues for the fourth quarter ended December 31, 2009 were RMB226.0 million (US$33.1 million), an increase of 15.2% from RMB196.2 million for the same quarter in 2008.

Print advertising revenues for the fourth quarter of 2009 increased 8.2% to RMB64.6 million (US$9.5 million) compared with RMB59.7 million for the same quarter in 2008. The increase was primarily due to higher average revenue per page, which was partially offset by a lower volume of print advertising pages in 51job Weekly resulting from a decline in market demand. Although print advertising prices in each city remained relatively unchanged, overall average revenue per page increased 39.8% over the fourth quarter of 2008 due to an increase in page volume contribution from cities where print advertising prices are generally higher as compared to the same quarter of the prior year. The estimated number of print advertising pages generated in the fourth quarter of 2009 decreased 22.6% to 2,672 compared with 3,452 pages in the same quarter in 2008.

Online recruitment services revenues for the fourth quarter of 2009 were RMB97.3 million (US$14.2 million), representing a 33.7% increase from RMB72.7 million for the same quarter of the prior year. The increase primarily resulted from a greater number of unique employers using the Company's online recruitment services, which was partially offset by lower average revenue per unique employer. Unique employers increased 66.4% to 94,993 in the fourth quarter of 2009 compared with 57,071 in the same quarter of the prior year driven by greater customer acceptance and usage of online recruitment services. Average revenue per unique employer decreased 19.7% in the fourth quarter of 2009 due to employers purchasing lower priced products and/or reducing their overall spending on online services as compared to the same quarter in 2008.

Other human resource related revenues for the fourth quarter of 2009 increased 0.5% to RMB64.1 million (US$9.4 million) from RMB63.8 million in the same quarter of 2008.

Gross profit for the fourth quarter of 2009 increased 42.1% to RMB134.3 million (US$19.7 million) from RMB94.5 million for the same quarter of the prior year. Gross margin, which is equal to gross profit divided by net revenues, expanded to 62.8% in the fourth quarter of 2009 compared with 51.0% in the same quarter in 2008 primarily due to lower printing related and other direct expenses resulting from the implementation of cost control and efficiency measures in 2009.

Operating expenses for the fourth quarter of 2009 were RMB92.5 million (US$13.6 million) compared with RMB88.6 million for the same quarter of 2008. Operating expenses as a percentage of net revenues decreased to 43.2% for the fourth quarter of 2009 compared with 47.8% for the fourth quarter of 2008.

Sales and marketing expenses for the fourth quarter of 2009 increased 8.4% to RMB63.1 million (US$9.2 million) from RMB58.2 million for the same quarter of the prior year primarily due to increased commissions resulting from higher sales, which were partially offset by lower travel and entertainment expenses as compared to the same quarter in 2008.

General and administrative expenses for the fourth quarter of 2009 decreased 3.2% to RMB29.4 million (US$4.3 million) from RMB30.4 million in the fourth quarter of 2008 primarily due to lower office expenses and professional fees, which were partially offset by higher rental and depreciation expenses incurred in the fourth quarter of 2009.

Income from operations for the fourth quarter of 2009 increased to RMB41.7 million (US$6.1 million) from RMB5.9 million for the same quarter of the prior year. During the fourth quarter of 2009, one of the Company's main subsidiaries received notification from relevant tax authorities that it had qualified as a High Technology Enterprise under the Enterprise Income Tax Law of the PRC, which reduced its tax rate for 2009 from 20% to 15% in Shanghai and from 25% to 15% in other localities. The cumulative impact of this tax change resulted in an effective tax rate of 1.0% in the fourth quarter of 2009.

Net income for the fourth quarter of 2009 increased to RMB46.4 million (US$6.8 million) from RMB6.8 million for the same quarter in 2008. Fully diluted earnings per common share for the fourth quarter of 2009 were RMB0.84 (US$0.12) compared with RMB0.12 for the same quarter in 2008. Fully diluted earnings per ADS for the fourth quarter of 2009 were RMB1.67 (US$0.24) compared with RMB0.24 in the fourth quarter of 2008.

In the fourth quarter of 2009, the Company recognized total share-based compensation expense of RMB6.2 million (US$0.9 million) compared with RMB7.5 million in the fourth quarter of 2008. The Company also recognized a foreign currency translation loss of RMB37,000 (US$5,000) in the fourth quarter of 2009 compared with a translation gain of RMB0.6 million in the fourth quarter of 2008.

Excluding share-based compensation expense and the impact of foreign currency translation loss, non-GAAP adjusted income for the fourth quarter of 2009 increased to RMB52.6 million (US$7.7 million) compared with RMB13.6 million for the fourth quarter of 2008. Non-GAAP adjusted fully diluted earnings per common share were RMB0.95 (US$0.14) in the fourth quarter of 2009 compared with RMB0.24 in the fourth quarter of 2008. Non-GAAP adjusted fully diluted earnings per ADS in the fourth quarter of 2009 were RMB1.90 (US$0.28) compared with RMB0.48 in the fourth quarter of 2008.

Fiscal Year 2009 Unaudited Financial Results

Total revenues for 2009 were RMB817.1 million (US$119.7 million), a decrease of 5.0% from RMB860.4 million in 2008 as a result of the impact of the global financial crisis on market demand. However, due to the implementation of cost control, realignment and efficiency measures, income from operations for 2009 increased 24.3% to RMB120.3 million (US$17.6 million) from RMB96.8 million for 2008.

The estimated number of print advertising pages generated in 2009 decreased 29.4% to 11,661 compared with 16,512 estimated pages in 2008. Unique employers using the Company's online recruitment services grew 39.9% to 143,451 in 2009 from 102,562 in 2008. 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 2009 increased 46.9% to RMB112.5 million (US$16.5 million) from RMB76.6 million in 2008. Fully diluted earnings per common share for 2009 increased to RMB2.02 (US$0.30) from RMB1.35 in 2008. Fully diluted earnings per ADS for 2009 were RMB4.03 (US$0.59) compared with RMB2.70 in 2008.

Excluding share-based compensation and foreign currency translation loss, non-GAAP adjusted net income for 2009 increased to RMB139.8 million (US$20.5 million) from RMB121.8 million in 2008. Non-GAAP adjusted fully diluted earnings per common share were RMB2.51 (US$0.37) in 2009 compared with RMB2.15 in 2008. Non-GAAP adjusted fully diluted earnings per ADS in 2009 were RMB5.01 (US$0.73) compared with RMB4.29 in 2008.

In September 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 2009, the Company repurchased 51,422 ADSs, representing 102,844 common shares, in the open market for an aggregate consideration of US$0.7 million, including transaction fees. Since the inception of this share repurchase program, the Company has repurchased a total of 846,027 ADSs, representing 1,692,054 common shares, for an aggregate consideration of US$7.8 million.

As of December 31, 2009, the Company had cash and short-term investments totaling RMB1,214.7 million (US$178.0 million) compared with RMB1,074.4 million at December 31, 2008. Short-term investments consist of certificates of deposit held by the Company in banking institutions in China.

Business Outlook

For the first quarter of 2010, based on current market and operating conditions, the Company's revenue target is in the estimated range of RMB230 million to RMB240 million (US$33.7 million to US$35.2 million). Excluding share-based compensation expense and any foreign currency translation loss or gain, the Company's non-GAAP fully diluted earnings target for the first quarter of 2010 is in the estimated range of RMB0.68 to RMB0.78 per common share (US$0.20 to US$0.23 per ADS). The Company expects aggregate share-based compensation expense in the first quarter of 2010 to be in the estimated range of RMB6 million to RMB7 million (US$0.9 million to US$1.0 million).

Other Company News

In February 2010, the Company's newly established sales and customer service call center became operational in the city of Wuhan, China.

In January and March 2010, the Company terminated the publication of the local edition of 51job Weekly in Tianjin and Hefei, respectively. The Company continues to maintain sales offices in both cities.

Currency Convenience Translation

For the convenience of readers, certain Renminbi amounts have been translated into U.S. dollars at the rate of RMB6.8259 to US$1.00, the noon buying rate on December 31, 2009 in New York for cable transfers of Renminbi per U.S. dollar 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 7:00 p.m. Eastern Time on March 4, 2010 (8:00 a.m. Shanghai / Hong Kong time zone on March 5, 2010) to discuss its fourth quarter and fiscal year 2009 results, operating performance and business outlook.

To dial in to the call, please use conference ID 4245617 and the following telephone numbers:

US: +1-877-941-2928

Hong Kong: +852-3009-5027

International: +1-480-629-9726

The call will also 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 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 adjusted net 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 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 print advertisements in 51job Weekly and online recruitment services at http://www.51job.com , 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 salary surveys. 51job has a call center in Wuhan and a nationwide sales office network spanning 26 cities across China.

Safe Harbor Statement

Statements in this release regarding targets for the first quarter of 2010, 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 2010; 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 2010 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,

2008 2009 2009

(unaudited) (unaudited) (unaudited)

RMB RMB USD (Note 1)

(In thousands, except number

of shares and per share data)

Revenues:

Print advertising 59,699 64,594 9,463

Online recruitment services 72,741 97,252 14,248

Other human resource

related revenues 63,771 64,110 9,392

Total revenues 196,211 225,956 33,103

Less: Business and related tax (10,866) (12,019) (1,761)

Net revenues 185,345 213,937 31,342

Cost of services (Note 2) (90,879) (79,677) (11,673)

Gross profit 94,466 134,260 19,669

Operating expenses:

Sales and marketing (Note 3) (58,192) (63,103) (9,245)

General and administrative

(Note 4) (30,398) (29,413) (4,309)

Total operating expenses (88,590) (92,516) (13,554)

Income from operations 5,876 41,744 6,115

Gain (Loss) from foreign

currency translation 637 (37) (5)

Interest and investment

income 6,193 3,895 571

Other (expense) income (487) 1,245 182

Income before income tax

expense 12,219 46,847 6,863

Income tax expense (5,463) (466) (68)

Net income 6,756 46,381 6,795

Earnings per share:

Basic 0.12 0.84 0.12

Diluted 0.12 0.84 0.12

Earnings per ADS (Note 5):

Basic 0.24 1.68 0.25

Diluted 0.24 1.67 0.24

Weighted average number of

common shares outstanding:

Basic 56,584,296 55,055,425 55,055,425

Diluted 56,659,627 55,538,208 55,538,208

Notes:

1. The conversion of RMB amounts into USD amounts is based on the noon

buying rate of USD1.00=RMB6.8259 on December 31, 2009 in New York for

cable transfers of RMB as set forth in the H.10 weekly statistical

release of the Federal Reserve Board.

2. Includes share-based compensation expense of RMB1,210 and RMB1,027

(US$150) for the three months ended December 31, 2008 and 2009,

respectively.

3. Includes share-based compensation expense of RMB1,040 and RMB882

(US$129) for the three months ended December 31, 2008 and 2009,

respectively.

4. Includes share-based compensation expense of RMB5,220 and RMB4,305

(US$631) for the three months ended December 31, 2008 and 2009,

respectively.

5. Each ADS represents two common shares.

51job, Inc.

Consolidated Statements of Operations

For the Year Ended

December 31, December 31, December 31,

2008 2009 2009

(unaudited) (unaudited) (unaudited)

RMB RMB USD (Note 1)

(In thousands, except number

of shares and per share data)

Revenues:

Print advertising 359,234 279,467 40,942

Online recruitment services 312,121 332,987 48,783

Other human resource related

revenues 189,062 204,666 29,984

Total revenues 860,417 817,120 119,709

Less: Business and related tax (44,939) (43,173) (6,325)

Net revenues 815,478 773,947 113,384

Cost of services (Note 2) (377,487) (305,722) (44,789)

Gross profit 437,991 468,225 68,595

Operating expenses:

Sales and marketing (Note 3) (215,228) (214,400) (31,410)

General and administrative

(Note 4) (125,981) (133,511) (19,560)

Total operating expenses (341,209) (347,911) (50,970)

Income from operations 96,782 120,314 17,625

Loss from foreign

currency translation (17,732) (234) (34)

Interest and investment

income 26,400 15,083 2,210

Other income 2,327 9,554 1,400

Income before income

tax expense 107,777 144,717 21,201

Income tax expense (31,176) (32,205) (4,718)

Net income 76,601 112,512 16,483

Earnings per share:

Basic 1.35 2.03 0.30

Diluted 1.35 2.02 0.30

Earnings per ADS (Note 5):

Basic 2.71 4.05 0.59

Diluted 2.70 4.03 0.59

Weighted average number of

common shares outstanding:

Basic 56,581,719 55,559,252 55,559,252

Diluted 56,709,513 55,768,866 55,768,866

Notes:

1. The conversion of RMB amounts into USD amounts is based on the noon

buying rate of USD1.00=RMB6.8259 on December 31, 2009 in New York for

cable transfers of RMB as set forth in the H.10 weekly statistical

release of the Federal Reserve Board.

2. Includes share-based compensation expense of RMB4,564 and RMB4,360

(US$639) for 2008 and 2009, respectively.

3. Includes share-based compensation expense of RMB3,923 and RMB3,748

(US$549) for 2008 and 2009, respectively.

4. Includes share-based compensation expense of RMB18,947 and RMB18,912

(US$2,771) 2008 and 2009, 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,

2008 2009 2009

(unaudited) (unaudited) (unaudited)

RMB RMB USD (Note 1)

(In thousands, except number

of shares and per share data)

GAAP income before

income tax expense 12,219 46,847 6,863

Add back: Share-based

compensation expense 7,470 6,214 910

Add back: (Gain) Loss

from foreign currency

translation (637) 37 5

Non-GAAP income before

income tax expense 19,052 53,098 7,778

Non-GAAP income tax

expense (5,459) (468) (68)

Non-GAAP adjusted net

income 13,593 52,630 7,710

Non-GAAP adjusted

earnings per share:

Basic 0.24 0.96 0.14

Diluted 0.24 0.95 0.14

Non-GAAP adjusted

earnings per ADS (Note 2):

Basic 0.48 1.91 0.28

Diluted 0.48 1.90 0.28

Weighted average number

of common shares

outstanding:

Basic 56,584,296 55,055,425 55,055,425

Diluted 56,659,627 55,538,208 55,538,208

For the Year Ended

December 31, December 31, December 31,

2008 2009 2009

(unaudited) (unaudited) (unaudited)

RMB RMB USD (Note 1)

(In thousands, except number

of shares and per share data)

GAAP income before

income tax expense 107,777 144,717 21,201

Add back: Share-based

compensation expense 27,434 27,020 3,959

Add back: Loss from

foreign currency

translation 17,732 234 34

Non-GAAP income before

income tax expense 152,943 171,971 25,194

Non-GAAP income tax

expense (31,185) (32,208) (4,719)

Non-GAAP adjusted net

income 121,758 139,763 20,475

Non-GAAP adjusted

earnings per share:

Basic 2.15 2.52 0.37

Diluted 2.15 2.51 0.37

Non-GAAP adjusted

earnings per ADS (Note 2):

Basic 4.30 5.03 0.74

Diluted 4.29 5.01 0.73

Weighted average number

of common shares

outstanding:

Basic 56,581,719 55,559,252 55,559,252

Diluted 56,709,513 55,768,866 55,768,866

Notes:

1. The conversion of RMB amounts into USD amounts is based on the noon

buying rate of USD1.00=RMB6.8259 on December 31, 2009 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, December 31, December 31,

2008 2009 2009

(audited) (unaudited) (unaudited)

RMB RMB USD (Note 1)

(In thousands, except number

of shares and per share data)

ASSETS

Current assets:

Cash 1,058,310 957,407 140,261

Short-term investments 16,100 257,310 37,696

Accounts receivable (net

of allowance of RMB2,783

and RMB2,620 as of

December 31, 2008 and

2009, respectively) 19,524 17,946 2,629

Prepayments and other

current assets 44,996 39,899 5,845

Deferred tax assets,

current 2,322 4,982 730

Total current assets 1,141,252 1,277,544 187,161

Long-term investments 15,927 15,912 2,331

Property and equipment 205,805 181,943 26,655

Intangible assets 4,669 5,301 777

Other long-term assets 6,311 31,531 4,619

Deferred tax assets,

non-current 405 285 42

Total non-current assets 233,117 234,972 34,424

Total assets 1,374,369 1,512,516 221,585

LIABILITIES

Current liabilities:

Accounts payable 10,511 9,896 1,450

Salary and employee

related accrual 22,370 28,095 4,116

Taxes payable 13,337 15,696 2,300

Advance from customers 87,639 118,277 17,328

Other payables and

accruals 12,939 15,402 2,256

Total current liabilities 146,796 187,366 27,450

Deferred tax liabilities,

non-current 730 1,011 148

Total liabilities 147,526 188,377 27,598

Shareholders' equity:

Common shares (US$0.0001

par value; 500,000,000

shares authorized,

56,378,139 and 55,126,859

shares issued and

outstanding as of

December 31, 2008 and

2009, respectively) 47 46 7

Additional paid-in

capital 917,352 902,124 132,162

Statutory reserves 6,947 7,368 1,079

Other comprehensive

income 1,054 1,067 156

Retained earnings 301,443 413,534 60,583

Total shareholders'

equity 1,226,843 1,324,139 193,987

Total liabilities and

shareholders' equity 1,374,369 1,512,516 221,585

Note 1: The conversion of RMB amounts into USD amounts is based on the

noon buying rate of USD1.00=RMB6.8259 on December 31, 2009 in New

York for cable transfers of RMB as set forth in the H.10 weekly

statistical release of the Federal Reserve Board.

For more information, please contact:

Linda Chien

Investor Relations

51job, Inc.

Phone: +86-21-6879-6250

Email: investor.relations@51job.com

Source: 51job, Inc.
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