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Jingwei International Limited Reports First Quarter 2011 Financial Results

Jingwei International Limited
2011-05-17 06:18 1996

SHENZHEN, China, May 17, 2011 /PRNewswire-Asia/ -- Jingwei International Limited (NASDAQ: JNGW) ("Jingwei" or "the Company"), a leading provider of data-mining, interactive marketing and software services in China's rapidly growing economy, today announced its financial results for the first quarter ended March 31, 2011.

First Quarter 2011 Highlights:

  • Total revenue increased 47% year-over-year to $7.5 million
  • Data Mining segment revenue grew 18% year-over-year to $3.6 million
  • Software Services segment revenue rose 92% year-over-year to $3.9 million
  • Gross profit climbed 49% year-over-year to $3.9 million
  • Gross margin was flat year-over-year at 52%
  • Net income declined 8% year-over-year to $0.9 million
  • EPS for the quarter was$0.05 per basic share and $0.05 per diluted share compared to $0.06 per basic share and $0.05 per diluted share last year

"We are pleased to report strong year-over-year revenue growth in our two business segments as we sharpened our focus in mobile value-added services ("MVAS") during the quarter," commented Mr. George Du, Chairman and Chief Executive Officer of Jingwei. "In data mining, we have expanded our offerings in 3G related services, and have entered into a strategic partnering agreement with Zhejiang China Unicom to design, develop and operate Zhejiang China Unicom's MVAS Society Channel and marketing support system. As this business has drawn interest from several other China Unicom provincial offices, we expect to see a significant revenue contribution from this part of the business later this year."

"In Software Services, the Company continued to expand the deployment of internet protocol TV ("IPTV") overseas through our business partner in the quarter. In addition, we have been engaged by several China Unicom's regional offices to upgrade their integrated call center platforms, and to develop new capabilities called "Communication Managers," to support China Unicom's launch of the "WO Family Service" offering nationwide."

Key Financial Results

Key financial results for the first quarter 2011 versus the first quarter 2010 are as follows (in US dollars thousands, except per share data):  


 		  

 
 

Three Months Ended March 31

 		  

 
 

2011

 

2010

 

% change

 		  

 
 

(Unaudited)

 

(Unaudited)

 
 		  

 
 
 
 
 		  

Data Mining Net Revenue

 

$3,615

 

$3,070

 

18%

 		  

Software Services Net Revenue

 

3,927

 

2,050

 

92%

 		  

Net Revenue

 
 

7,542

 

5,120

 

47%

 		  

Gross Profit

 
 

3,934

 

2,640

 

49%

 		  

Net Income

 
 

944

 

1,021

 

-8%

 		  

Earnings per Basic Share

 

0.05

 

0.06

 

-17%

 		  

Earning per Diluted Share

 

0.05

 

0.05

 

-

 		  

 		  
         


Financial Outlook

In 2011, the Company reiterates its guidance with projected total revenue of between $45.2 million and $49.2 million, net income of between $11.8 million and $13.0 million, and dilutive earnings per basic share of between $0.58 and $0.64 assuming 20.5 million weighted average common shares outstanding on a dilutive basis.

The range of anticipated revenues takes into account both organic growth and the possibility of acquisition related growth within the context of current economic conditions.

About Jingwei International Limited:

Jingwei International Limited ("Jingwei") has established a leading position in China in data mining, interactive marketing and software services.  By leveraging its proprietary database of over 400 million consumer profiles, Jingwei helps companies to more effectively reach their target audiences. To capitalize on China's explosive mobile, Internet and e-Commerce growth, Jingwei has focused on new data mining offerings that encompass interactive marketing, bundled mobility solutions and mobile value added services.  The Company's software services include business intelligence, billing, customer relationship management and decision support solutions for Chinese telecom operators and power companies.

Business Risks and Forward-Looking Statements

This report includes forward-looking statements. Generally, the words "believes," "anticipates," "may," "will," "should," "expect," "intend," "estimate," "continue," and similar expressions or the negative thereof or comparable terminology are intended to identify forward-looking statements. Such statements are subject to certain risks and uncertainties, including the matters set forth in this report or other reports or documents we file with the Securities and Exchange Commission from time to time, which could cause actual results or outcomes to differ materially from those projected. Undue reliance should not be placed on these forward-looking statements, which speak only as of the date hereof. We undertake no obligation to update these forward-looking statements.

-Financial Tables Follow-

Jingwei International Limited and Subsidiaries

Condensed Consolidated Statements of Income and Comprehensive Income

(in US dollars thousands, except share and per share data)


 		  

 
 

Three Months Ended

March 31,

 
 		  

 
 

2011

 
 
 

2010

 
 		  

 
 

(Unaudited)

 
 
 

(Unaudited)

 
 		  

 
 
 
 
 
 
 		  

Sales

 
 

$

 

7,542

 
 
 

$

 

5,120

 
 		  

Cost of sales

 
 
 

3,608

 
 
 
 

2,480

 
 		  

Gross profit

 
 
 

3,934

 
 
 
 

2,640

 
 		  

 
 
 
 
 
 
 
 
 		  

Operating expenses

 
 
 
 
 
 
 
 
 		  

Selling, general and administrative expenses

 
 
 

2,581

 
 
 
 

954

 
 		  

Research and development costs

 
 
 

739

 
 
 
 

733

 
 		  

 
 
 

3,320

 
 
 
 

1,687

 
 		  

 
 
 
 
 
 
 
 
 		  

Income from operations

 
 
 

614

 
 
 
 

953

 
 		  

 
 
 
 
 
 
 
 
 		  

Other income (expenses)

 
 
 
 
 
 
 
 
 		  

Subsidy income

 
 
 

399

 
 
 
 

309

 
 		  

Interest income

 
 
 

32

 
 
 
 

23

 
 		  

Interest expense

 
 
 

-

 
 
 
 

(2)

 
 		  

Other expense

 
 
 

(1)

 
 
 
 

(46)

 
 		  

 
 
 

430

 
 
 
 

284

 
 		  

 
 
 
 
 
 
 
 
 		  

Income before income taxes

 
 
 

1,043

 
 
 
 

1,237

 
 		  

Income tax expense

 
 
 

99

 
 
 
 

216

 
 		  

 
 
 
 
 
 
 
 
 		  

Net income

 
 
 

944

 
 
 
 

1,021

 
 		  

Less: Net income attributable to noncontrolling interest

 
 
 

-

 
 
 
 

-

 
 		  

Net income attributable to the Company's stockholders

 
 
 

944

 
 
 
 

1,021

 
 		  

Foreign currency translation adjustment

 
 
 

590

 
 
 
 

18

 
 		  

Comprehensive income

 
 

$

 

1,534

 
 
 

$

 

1,039

 
 		  

Comprehensive income attributable to noncontrolling interest

 
 
 

73

 
 
 
 

18

 
 		  

Comprehensive income attributable to the Company's stockholders

 
 
 

1,461

 
 
 
 

1,021

 
 		  

Basic earnings per share

 
 

$

 

0.05

 
 
 

$

 

0.06

 
 		  

Diluted earnings per share

 
 

$

 

0.05

 
 
 

$

 

0.05

 
 		  

Weighted average common shares outstanding

 
 
 
 
 
 
 
 
 		  

Basic

 
 
 

20,353,270

 
 
 
 

17,049,000

 
 		  

Diluted

 
 
 

20,549,905

 
 
 
 

18,862,295

 
 		  

See notes to condensed consolidated financial statements.

 		  
                 



Jingwei International Limited and Subsidiaries

Condensed Consolidated Balance Sheets

(in US dollars thousands, except share and par value)


 		  

 
 

March 31, 2011

 
 
 

December 31, 2010

 
 		  

 
 

(Unaudited)

 
 
 
 
 		  

ASSETS

 
 
 
 
 
 
 		  

Current assets

 
 
 
 
 
 
 		  

Cash and cash equivalents

 
 

$

 

5,003

 
 
 

$

 

7,519

 
 		  

Accounts receivable, less allowance of doubtful accounts of $2,155 and $2,040, respectively

 
 
 

35,166

 
 
 
 

34,558

 
 		  

Other receivables, prepayments and deposits, less allowance for doubtful accounts of $135 and $134, respectively

 
 
 

6,242

 
 
 
 

3,610

 
 		  

Inventories

 
 
 

7,080

 
 
 
 

5,780

 
 		  

Deferred tax assets

 
 
 

420

 
 
 
 

413

 
 		  

Total current assets

 
 
 

53,911

 
 
 
 

51,880

 
 		  

 
 
 
 
 
 
 
 
 		  

Non-current assets

 
 
 
 
 
 
 
 
 		  

Property, plant and equipment, net

 
 
 

2,158

 
 
 
 

1,854

 
 		  

Intangible assets, net

 
 
 

16,651

 
 
 
 

17,448

 
 		  

Long-term investment

 
 
 

1,814

 
 
 
 

1,797

 
 		  

Goodwill

 
 
 

3,239

 
 
 
 

3,209

 
 		  

Total assets

 
 

$

 

77,773

 
 
 

$

 

76,188

 
 		  

 
 
 
 
 
 
 
 
 		  

LIABILITIES AND EQUITY

 
 
 
 
 
 
 
 
 		  

Current liabilities

 
 
 
 
 
 
 
 
 		  

Accounts payable

 
 

$

 

4,450

 
 
 

$

 

4,122

 
 		  

Accruals and other payable

 
 
 

1,595

 
 
 
 

1,890

 
 		  

Income tax payable

 
 
 

1,687

 
 
 
 

1,610

 
 		  

Deferred tax

 
 
 

261

 
 
 
 

259

 
 		  

Loan from a stockholder

 
 
 

157

 
 
 
 

262

 
 		  

Total current liabilities

 
 
 

8,150

 
 
 
 

8,143

 
 		  

 
 
 
 
 
 
 
 
 		  

Non-current liabilities

 
 
 
 
 
 
 
 
 		  

Deferred tax liabilities

 
 
 

909

 
 
 
 

965

 
 		  

 
 
 
 
 
 
 
 
 		  

Total liabilities

 
 
 

9,059

 
 
 
 

9,108

 
 		  

 
 
 
 
 
 
 
 
 		  

Commitments and contingencies

 
 
 

-

 
 
 
 

-

 
 		  

Equity

 
 
 
 
 
 
 
 
 		  

Common stock, ($0.001 par value; 75,000,000 shares authorized; 20,362,209 and 20,350,167 shares issued as of March 31, 2011 and December 31, 2010, respectively; 20,354,209 and 20,347,167 shares outstanding as of March 31, 2011 and December 31, 2010, respectively)

 
 
 

20

 
 
 
 

20

 
 		  

Treasury stock, at cost (8,000 shares and 3,000 share as of March 31, 2011 and December 31, 2010, respectively)

 
 
 

(32)

 
 
 
 

(12)

 
 		  

Additional paid-in capital

 
 
 

22,622

 
 
 
 

22,502

 
 		  

Statutory and other reserves

 
 
 

3,590

 
 
 
 

3,590

 
 		  

Retained earnings

 
 
 

29,892

 
 
 
 

28,948

 
 		  

Accumulated other comprehensive income

 
 
 

4,816

 
 
 
 

4,299

 
 		  

Total Company's stockholders' equity

 
 
 

60,908

 
 
 
 

59,347

 
 		  

Noncontrolling interest

 
 
 

7,806

 
 
 
 

7,733

 
 		  

Total equity

 
 
 

68,714

 
 
 
 

67,080

 
 		  

 
 
 
 
 
 
 
 
 		  

Total liabilities and equity

 
 

$

 

77,773

 
 
 

$

 

76,188

 
 		  

See notes to condensed consolidated financial statements.

 		  
                 



Jingwei International Limited and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(in US dollars thousands)


 		  

 
 

Three Months Ended March 31,

 
 		  

 
 

2011

 
 
 

2010

 
 		  

 
 

(Unaudited)

 
 
 

(Unaudited)

 
 		  

Cash flows from operating activities

 
 
 
 
 
 
 		  

Net income

 
 

$

 

944

 
 
 

$

 

1,021

 
 		  

Adjustments to reconcile net income to net cash (used in) provided by operating activities:

 
 
 
 
 
 
 
 
 		  

Depreciation and amortisation

 
 
 

1,228

 
 
 
 

854

 
 		  

Allowance for doubtful accounts

 
 
 

527

 
 
 
 

10

 
 		  

Share-based compensation expense

 
 
 

100

 
 
 
 

66

 
 		  

Changes in operating assets and liabilities:

 
 
 
 
 
 
 
 
 		  

Accounts receivables

 
 
 

(1,135)

 
 
 
 

(140)

 
 		  

Other receivables, prepayments and deposits

 
 
 

(2,632)

 
 
 
 

1,304

 
 		  

Inventories

 
 
 

(1,300)

 
 
 
 

(2,156)

 
 		  

Deferred tax asset

 
 
 

(61)

 
 
 
 

34

 
 		  

Accounts payable

 
 
 

267

 
 
 
 

(1,191)

 
 		  

Accruals and other payables

 
 
 

11

 
 
 
 

(104)

 
 		  

Income tax payable

 
 
 

77

 
 
 
 

51

 
 		  

Net cash used in operating activities

 
 
 

(1,974)

 
 
 
 

(251)

 
 		  

Cash flows from investing activities

 
 
 
 
 
 
 
 
 		  

Acquisition of property and equipment

 
 
 

(491)

 
 
 
 

(153)

 
 		  

Acquisition of intangible assets

 
 
 

(67)

 
 
 
 

-

 
 		  

Net cash used in investing activities

 
 
 

(558)

 
 
 
 

(153)

 
 		  

Cash flows from financing activities

 
 
 
 
 
 
 
 
 		  

Repayment of stockholder loans

 
 
 

(411)

 
 
 
 

-

 
 		  

Net cash used in financing activities

 
 
 

(411)

 
 
 
 

-

 
 		  

Effect of foreign currency translation on cash and cash equivalents

 
 
 

427

 
 
 
 

73

 
 		  

Net decrease in cash and cash equivalents

 
 
 

(2,516)

 
 
 
 

(331)

 
 		  

Cash and cash equivalents - beginning of period

 
 
 

7,519

 
 
 
 

10,239

 
 		  

Cash and cash equivalents - end of period

 
 

$

 

5,003

 
 
 

$

 

9,908

 
 		  

Supplemental Disclosure of Cash Flow Information

 
 
 
 
 
 
 
 
 		  

Income tax paid

 
 

$

 

104

 
 
 

$

 

131

 
 		  

Interest paid

 
 

$

 

-

 
 
 

$

 

-

 
 		  

See notes to condensed consolidated financial statements.

 		  
                 



Company Contact:

 		  

Jingwei International Limited

 		  

Yong Xu or Cao Wei

 		  

Tel: +86-755-8631-9430

 		  

Email: weicao@jingweicom.com

 		  

www.jingweicom.com

 		  
 
Source: Jingwei International Limited
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