SHANGHAI, Aug. 6 /PRNewswire-Asia-FirstCall/ -- 51job, Inc.
(Nasdaq: JOBS), a leading provider of integrated human resource services in China, announced today unaudited financial results for the second quarter of 2010 ended June 30, 2010.
Second Quarter 2010 Financial Highlights:
-- Total revenues increased 35.7% over Q2 2009 to RMB262.4 million
(US$38.7 million), exceeding the Company's guidance range of RMB250
million to RMB260 million
-- Online recruitment services revenues increased 74.0% over Q2 2009 to
RMB134.6 million (US$19.9 million)
-- Gross margin expanded to 68.0% compared with 59.8% in Q2 2009
-- Operating income increased to RMB64.5 million (US$9.5 million) compared
with RMB26.8 million in Q2 2009
-- Fully diluted earnings per common share were RMB0.97 (US$0.29 per ADS)
-- Excluding share-based compensation expense and foreign currency
translation loss as well as their related tax impact, non-GAAP adjusted
fully diluted earnings per common share were RMB1.11 (US$0.33 per ADS),
exceeding the Company's guidance range of RMB0.95 to RMB1.05
-- Cash and short-term investments increased to RMB1,409.7 million
(US$207.9 million) as of June 30, 2010
Commenting on the results, Rick Yan, President and Chief Executive Officer of 51job, Inc., said, "We continued to observe a recovery trend in the Chinese recruitment market during the second quarter. Our online business achieved record revenues as we successfully grew our client base, adding employers from existing cities and new geographies. Although we increased sales and customer service headcount as well as marketing activities in light of improved market conditions, we reached new highs in gross margin and operating margin in the second quarter by leveraging the powerful scale economies and operating efficiency of our business model. We remain focused on executing our strategic plan, delivering tangible results to our clients and increasing value for our shareholders."
Second Quarter 2010 Unaudited Financial Results
Total revenues for the second quarter ended June 30, 2010 were RMB262.4 million (US$38.7 million), an increase of 35.7% from RMB193.3 million for the same quarter in 2009.
Print advertising revenues for the second quarter of 2010 increased 6.8% to RMB71.7 million (US$10.6 million) compared with RMB67.2 million for the same quarter in 2009. The increase was primarily due to improved market demand and higher average revenue per page which was partially offset by a decrease in the number of print advertising pages. Although print advertising prices in each city were largely unchanged, overall average revenue per page increased 18.1% over the second quarter of 2009 as a result of an increase in page volume contribution from higher priced cities as compared to the same quarter of the prior year. However, mainly due to the decrease in the number of cities where 51job Weekly is published, from 22 cities as of June 30, 2009 to 17 cities as of June 30, 2010, the estimated number of print advertising pages generated in the second quarter of 2010 decreased 9.5% to 2,587 compared with 2,860 pages in the same quarter in 2009.
Online recruitment services revenues for the second quarter of 2010 were RMB134.6 million (US$19.9 million), representing a 74.0% increase from RMB77.4 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. Unique employers increased 73.2% to 137,111 in the second quarter of 2010 compared with 79,151 in the same quarter of the prior year driven by greater customer acceptance and usage of online recruitment services.
Other human resource related revenues for the second quarter of 2010 increased 14.9% to RMB56.0 million (US$8.3 million) from RMB48.7 million in the same quarter of 2009 primarily due to greater market demand for our business process outsourcing, executive search and training services.
Gross profit for the second quarter of 2010 increased 54.3% to RMB169.0 million (US$24.9 million) from RMB109.6 million for the same quarter of the prior year. Gross margin, which is gross profit as a percentage of net revenues, expanded to 68.0% in the second quarter of 2010 compared with 59.8% in the same quarter in 2009 primarily due to greater economies of scale, improved efficiency and a decrease in printing-related expenses.
Operating expenses for the second quarter of 2010 were RMB104.6 million (US$15.4 million) compared with RMB82.8 million for the same quarter of 2009. Sales and marketing expenses for the second quarter of 2010 increased 41.3% to RMB68.5 million (US$10.1 million) from RMB48.5 million for the same quarter of the prior year primarily due to an increase in salaries and commissions resulting from higher sales and headcount additions as well as greater advertising and promotion expenses. General and administrative expenses for the second quarter of 2010 increased 5.1% to RMB36.1 million (US$5.3 million) from RMB34.3 million in the second quarter of 2009 primarily due to higher employee compensation expenses.
Income from operations for the second quarter of 2010 increased to RMB64.5 million (US$9.5 million) from RMB26.8 million for the same quarter of the prior year. Operating margin, which is income from operations as a percentage of net revenues, increased to 25.9% in the second quarter of 2010 compared with 14.6% in the same quarter of 2009. The reduction in the effective tax rate to 23.0% in the second quarter of 2010 from 32.7% in the second quarter of 2009 was primarily due to the qualification of an operating entity as a High and New Technology Enterprise in December 2009, which is subject to a preferential tax rate of 15%.
Net income for the second quarter of 2010 increased to RMB54.3 million (US$8.0 million) from RMB20.8 million for the same quarter in 2009. Fully diluted earnings per common share for the second quarter of 2010 were RMB0.97 (US$0.14) compared with RMB0.37 for the same quarter in 2009. Fully diluted earnings per ADS for the second quarter of 2010 were RMB1.95 (US$0.29) compared with RMB0.74 in the second quarter of 2009.
In the second quarter of 2010, the Company recognized total share-based compensation expense of RMB6.5 million (US$1.0 million) compared with RMB6.8 million in the second quarter of 2009. The Company also recognized a foreign currency translation loss of RMB1.0 million (US$0.2 million) in the second quarter of 2010 compared with RMB0.1 million in the second quarter of 2009 due to an appreciation of the Renminbi against the U.S. dollar.
Excluding share-based compensation expense and foreign currency translation loss as well as their related tax impact, non-GAAP adjusted net income for the second quarter of 2010 increased to RMB61.9 million (US$9.1 million) compared with RMB27.7 million for the second quarter of 2009. Non-GAAP adjusted fully diluted earnings per common share were RMB1.11 (US$0.16) in the second quarter of 2010 compared with RMB0.50 in the second quarter of 2009. Non-GAAP adjusted fully diluted earnings per ADS in the second quarter of 2010 were RMB2.22 (US$0.33) compared with RMB0.99 in the second quarter of 2009.
Six Months 2010 Unaudited Financial Results
Total revenues for the six months ended June 30, 2010 were RMB516.6 million (US$76.2 million), an increase of 39.0% from RMB371.6 million in the comparable period in 2009. Income from operations for the six months ended June 30, 2010 increased to RMB125.5 million (US$18.5 million) from RMB38.5 million for the same period last year.
Net income for the first half of 2010 increased to RMB104.8 million (US$15.4 million) from RMB30.2 million for the same period in 2009. Fully diluted earnings per common share for the first half of 2010 increased to RMB1.88 (US$0.28) from RMB0.54 in the comparable period in 2009. Fully diluted earnings per ADS for the first half of 2010 were RMB3.76 (US$0.55) compared with RMB1.08 in the same period in 2009.
Excluding share-based compensation and foreign currency translation loss as well as their related tax impact, non-GAAP adjusted net income for the six months ended June 30, 2010 increased to RMB118.8 million (US$17.5 million) from RMB44.7 million for the six months ended June 30, 2009. Non-GAAP adjusted fully diluted earnings per common share were RMB2.13 (US$0.31) in first half of 2010 compared with RMB0.80 in the same period in 2009. Non-GAAP adjusted fully diluted earnings per ADS in the first half of 2010 were RMB4.27 (US$0.63) compared with RMB1.59 in the same period in 2009.
As of June 30, 2010, the Company had cash and short-term investments totaling RMB1,409.7 million (US$207.9 million) compared with RMB1,214.7 million at December 31, 2009. Short-term investments consist of certificates of deposit with original maturities from three months to one year.
Business Outlook
For the third quarter of 2010, based on current market and operating conditions, the Company's revenue target is in the estimated range of RMB255 million to RMB265 million (US$37.6 million to US$39.1 million). Excluding share-based compensation expense and any foreign currency translation loss or gain as well as their related tax impact, the Company's non-GAAP fully diluted earnings target for the third quarter of 2010 is in the estimated range of RMB0.95 to RMB1.05 per common share (US$0.28 to US$0.31 per ADS). The Company expects aggregate share-based compensation expense in the third 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 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 second quarter of 2010, the Company repurchased 83,796 ADSs, representing 167,592 common shares, in the open market for an aggregate consideration of US$1.6 million, including transaction fees. Since the inception of this share repurchase program, the Company has repurchased a total of 1,007,599 ADSs, representing 2,015,198 common shares, for an aggregate consideration of US$10.8 million.
In June 2010, the Company discontinued print advertising services in Qingdao but continues to maintain a sales office in the city. The Company currently operates 17 local 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 RMB6.7815 to US$1.00, the noon buying rate on June 30, 2010 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 9:00 p.m. Eastern Time on August 5, 2010 (9:00 a.m. Shanghai / Hong Kong time zone on August 6, 2010) to discuss its second quarter 2010 results, operating performance and business outlook.
To dial in to the call, please use conference ID 4338605 and the following telephone numbers:
US: +1-877-941-2928
Hong Kong: +852-3009-5027
International: +1-480-629-9692
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 common share and adjusted earnings per ADS, which are adjusted from results based on GAAP to exclude share-based compensation expense and foreign currency translation gain or loss 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 foreign currency translation gain or loss and its related tax impact from its non-GAAP financial measures is useful for its management and investors as such translation gain or 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. 51job also believes these non-GAAP measures excluding share-based compensation expense and foreign currency translation gain or loss and 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 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 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 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 third 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 third quarter of 2010 or as a result of new information, future events or otherwise.
For more information, please contact:
Linda Chien
Investor Relations
51job, Inc.
Tel: +86-21-6879-6250
Email: investor.relations@51job.com
- Financial tables follow -
51job, Inc.
Consolidated Statements of Operations
For the Three Months Ended
June 30, June 30, June 30,
2009 2010 2010
(In thousands, except number of shares (unaudited)(unaudited)(unaudited)
and per share data) RMB RMB USD (Note 1)
Revenues:
Print advertising 67,169 71,740 10,579
Online recruitment services 77,386 134,634 19,853
Other human resource related
revenues 48,749 56,002 8,258
Total revenues 193,304 262,376 38,690
Less: Business and related tax (10,102) (13,773) (2,031)
Net revenues 183,202 248,603 36,659
Cost of services (Note 2) (73,644) (79,586) (11,736)
Gross profit 109,558 169,017 24,923
Operating expenses:
Sales and marketing (Note 3) (48,491) (68,500) (10,101)
General and administrative (Note 4) (34,301) (36,061) (5,318)
Total operating expenses (82,792) (104,561) (15,419)
Income from operations 26,766 64,456 9,504
Loss from foreign currency translation (142) (1,045) (154)
Interest and investment income 3,581 4,661 687
Other income 649 2,456 363
Income before income tax expense 30,854 70,528 10,400
Income tax expense (10,085) (16,200) (2,389)
Net income 20,769 54,328 8,011
Earnings per share:
Basic 0.37 0.99 0.15
Diluted 0.37 0.97 0.14
Earnings per ADS (Note 5):
Basic 0.74 1.97 0.29
Diluted 0.74 1.95 0.29
Weighted average number of common
shares outstanding:
Basic 55,800,083 55,055,771 55,055,771
Diluted 55,857,437 55,758,113 55,758,113
Notes:
1. The conversion of RMB amounts into USD amounts is based on the noon
buying rate of USD1.00=RMB6.7815 on June 30, 2010 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 RMB1,086 and RMB1,043
(US$154) for the three months ended June 30, 2009 and 2010,
respectively.
3. Includes share-based compensation expense of RMB934 and RMB897 (US$132)
for the three months ended June 30, 2009 and 2010, respectively.
4. Includes share-based compensation expense of RMB4,759 and RMB4,572
(US$674) for the three months ended June 30, 2009 and 2010,
respectively.
5. Each ADS represents two common shares.
51job, Inc.
Consolidated Statements of Operations
For the Six Months Ended
June 30, June 30, June 30,
2009 2010 2010
(In thousands, except number of shares (unaudited)(unaudited) (unaudited)
and per share data) RMB RMB USD (Note 1)
Revenues:
Print advertising 137,733 164,109 24,200
Online recruitment services 145,633 244,343 36,031
Other human resource related
revenues 88,201 108,195 15,954
Total revenues 371,567 516,647 76,185
Less: Business and related tax (19,568) (27,536) (4,060)
Net revenues 351,999 489,111 72,125
Cost of services (Note 2) (147,736) (165,541) (24,411)
Gross profit 204,263 323,570 47,714
Operating expenses:
Sales and marketing (Note 3) (98,129) (124,654) (18,381)
General and administrative (Note 4) (67,629) (73,383) (10,821)
Total operating expenses (165,758) (198,037) (29,202)
Income from operations 38,505 125,533 18,512
Loss from foreign currency translation (111) (1,113) (164)
Interest and investment income 7,214 8,750 1,290
Other income 873 2,696 397
Income before provision for income tax 46,481 135,866 20,035
Income tax expense (16,264) (31,096) (4,585)
Net income 30,217 104,770 15,450
Earnings per share:
Basic 0.54 1.90 0.28
Diluted 0.54 1.88 0.28
Earnings per ADS (Note 5):
Basic 1.08 3.80 0.56
Diluted 1.08 3.76 0.55
Weighted average number of common
shares outstanding:
Basic 55,966,297 55,084,868 55,084,868
Diluted 56,034,144 55,685,041 55,685,041
Notes:
1. The conversion of RMB amounts into USD amounts is based on the noon
buying rate of USD1.00=RMB6.7815 on June 30, 2010 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 RMB2,297 and RMB2,063
(US$304) for the six months ended June 30, 2009 and 2010, respectively.
3. Includes share-based compensation expense of RMB1,975 and RMB1,774
(US$262) for the six months ended June 30, 2009 and 2010, respectively.
4. Includes share-based compensation expense of RMB10,065 and RMB9,042
(US$1,333) for the six months ended June 30, 2009 and 2010,
respectively.
5. Each ADS represents two common shares.
51job, Inc.
Reconciliation of GAAP and Non-GAAP Results
For the Three Months Ended
June 30, June 30, June 30,
2009 2010 2010
(In thousands, except number of shares (unaudited)(unaudited) (unaudited)
and per share data) RMB RMB USD (Note 1)
GAAP income before income tax expense 30,854 70,528 10,400
Add back: Share-based compensation
expense 6,779 6,512 960
Add back: Loss from foreign currency
translation 142 1,045 154
Non-GAAP income before income tax
expense 37,775 78,085 11,514
Non-GAAP income tax expense (10,085) (16,203) (2,389)
Non-GAAP adjusted net income 27,690 61,882 9,125
Non-GAAP adjusted earnings per share:
Basic 0.50 1.12 0.17
Diluted 0.50 1.11 0.16
Non-GAAP adjusted earnings per ADS
(Note 2):
Basic 0.99 2.25 0.33
Diluted 0.99 2.22 0.33
Weighted average number of common
shares outstanding:
Basic 55,800,083 55,055,771 55,055,771
Diluted 55,857,437 55,758,113 55,758,113
For the Six Months Ended
June 30, June 30, June 30,
2009 2010 2010
(In thousands, except number of shares (unaudited)(unaudited) (unaudited)
and per share data) RMB RMB USD (Note 1)
GAAP income before provision for
income tax 46,481 135,866 20,035
Add back: Share-based compensation
expense 14,337 12,879 1,899
Add back: Loss from foreign currency
translation 111 1,113 164
Non-GAAP income before provision for
income tax 60,929 149,858 22,098
Non-GAAP income tax expense (16,267) (31,099) (4,586)
Non-GAAP adjusted net income 44,662 118,759 17,512
Non-GAAP adjusted earnings per share:
Basic 0.80 2.16 0.32
Diluted 0.80 2.13 0.31
Non-GAAP adjusted earnings per ADS
(Note 2):
Basic 1.60 4.31 0.64
Diluted 1.59 4.27 0.63
Weighted average number of common
shares outstanding:
Basic 55,966,297 55,084,868 55,084,868
Diluted 56,034,144 55,685,041 55,685,041
Notes:
1. The conversion of RMB amounts into USD amounts is based on the noon
buying rate of USD1.00=RMB6.7815 on June 30, 2010 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, June 30, June 30,
2009 2010 2010
(In thousands, except number of shares (audited) (unaudited)(unaudited)
and per share data) RMB RMB USD (Note 1)
ASSETS
Current assets:
Cash 957,407 1,072,397 158,136
Short-term investments 257,310 337,334 49,743
Accounts receivable (net of
allowance of RMB2,620 and
RMB2,587 as of December 31, 2009
and June 30, 2010, respectively) 17,946 19,945 2,941
Prepayments and other current
assets 39,899 39,798 5,868
Deferred tax assets, current 4,982 3,704 546
Total current assets 1,277,544 1,473,178 217,234
Long-term investments 15,912 15,825 2,333
Property and equipment, net 181,943 203,748 30,045
Intangible assets, net 5,301 5,272 777
Other long-term assets 31,531 6,982 1,030
Deferred tax assets, non-current 285 386 57
Total non-current assets 234,972 232,213 34,242
Total assets 1,512,516 1,705,391 251,476
LIABILITIES
Current liabilities:
Accounts payable 9,896 10,695 1,577
Salary and employee related accrual 28,095 24,337 3,589
Taxes payable 15,696 24,932 3,676
Advance from customers 118,277 159,283 23,488
Other payables and accruals 15,402 39,262 5,789
Total current liabilities 187,366 258,509 38,119
Deferred tax liabilities, non-current 1,011 1,389 205
Total liabilities 188,377 259,898 38,324
Shareholders' equity:
Common shares (US$0.0001 par value;
500,000,000 shares authorized,
55,126,859 and 55,252,899 shares
issued and outstanding as of
December 31, 2009 and
June 30, 2010, respectively) 46 46 7
Additional paid-in capital 902,124 918,640 135,463
Statutory reserves 7,368 7,368 1,086
Other comprehensive income 1,067 1,135 167
Retained earnings 413,534 518,304 76,429
Total shareholders' equity 1,324,139 1,445,493 213,152
Total liabilities and shareholders'
equity 1,512,516 1,705,391 251,476
Note 1: The conversion of RMB amounts into USD amounts is based on the
noon buying rate of USD1.00=RMB6.7815 on June 30, 2010 in New York
for cable transfers of RMB as set forth in the H.10 weekly
statistical release of the Federal Reserve Board.
Source: 51job, Inc.
