SHENZHEN, China, August 16, 2011 /PRNewswire-Asia-FirstCall/ -- Jingwei International Limited (NASDAQ: JNGW) ("Jingwei" or "the Company"), a leading provider of data-mining, interactive marketing and software services in China, today announced its financial results for the second quarter ended June 30, 2011.
Second Quarter 2011 Highlights:
"We have continued our strong year-over-year revenue growth in both of our business segments during the second quarter of 2011," commented Mr. George Du, Chairman and Chief Executive Officer of Jingwei. "In data mining, we have expanded greatly our product offering in 3G related MVAS business, and have seen significant revenue contribution from this part of the business in the current period. In the second quarter of 2011, the Company successfully deployed the mobile value-added services ("MVAS") Society Channel and marketing support system in Fujian province, and is currently operating the system with early success. Furthermore, the Company is in discussion with several other provincial operators to leverage similar capabilities to benefit their local operation. In the software service segment, the Company took significant system integration contracts to develop a web-based integrated governmental service platform for local governments in Guangdong province."
Key Financial Results
Key financial results for the second quarter 2011 versus the second quarter 2010 and the first six months 2011 versus the first six months 2010 are as follows (in US dollars thousands, except per share data):
Six Months Ended | Three Months Ended | |||||||
2011 | 2010 | % change | 2011 | 2010 | % change | |||
(Unaudited) | (Unaudited) | |||||||
Data Mining Net Revenue | $8,438 | $7,498 | 13% | $4,823 | $4,428 | 9% | ||
Software Services Net Revenue | 10,502 | 5,851 | 79% | 6,591 | 3,802 | 73% | ||
Net Revenue | 18,940 | 13,349 | 42% | 11,414 | 8,230 | 39% | ||
Gross Profit | 8,451 | 7,254 | 17% | 4,519 | 4,615 | -2% | ||
Net Income (non-GAAP)(1) | 5,094 | 5,443 | -6% | 3,028 | 3,594 | -16% | ||
Net Income | 2,851 | 3,499 | -19% | 1,907 | 2,479 | -23% | ||
Earnings per Basic Share | 0.14 | 0.21 | -33% | 0.09 | 0.15 | -40% | ||
Earning per Diluted Share | 0.14 | 0.18 | -22% | 0.09 | 0.12 | -25% | ||
Financial Outlook
In 2011, the Company reiterates its guidance with projected total revenue of between $45.2 million and $49.2 million, and revises its net income guidance to between $9.0 million and $12.0 million, and dilutive earnings per basic share guidance to between $0.44 and $0.59, 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.
Jingwei International Limited and Subsidiaries Condensed Consolidated Statements of Income and Comprehensive Income (in US dollars thousands, except share and per share data) | |||||||||
Six Months Ended June 30, | Three Months Ended June 30, | ||||||||
2011 | 2010 | 2011 | 2010 | ||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||
Sales | $ 18,940 | $ 13,349 | $ 11,414 | $ 8,230 | |||||
Cost of sales | 10,489 | 6,095 | 6,895 | 3,615 | |||||
Gross profit | 8,451 | 7,254 | 4,519 | 4,615 | |||||
Operating expenses | |||||||||
Selling, general and administrative expenses | 4,982 | 2,563 | 2,403 | 1,609 | |||||
Research and development costs | 1,520 | 1,331 | 781 | 598 | |||||
6,502 | 3,894 | 3,184 | 2,207 | ||||||
Income from operations | 1,949 | 3,360 | 1,335 | 2,408 | |||||
Other income (expenses) | |||||||||
Subsidy income | 921 | 320 | 523 | 11 | |||||
Interest income | 40 | 33 | 8 | 10 | |||||
Interest expense | - | (5) | - | (3) | |||||
Other expense | (1) | (60) | - | (14) | |||||
960 | 288 | 531 | 4 | ||||||
Income before income taxes | 2,909 | 3,648 | 1,866 | 2,412 | |||||
Income tax expense (benefit) | 58 | 149 | (41) | (67) | |||||
Net income | 2,851 | 3,499 | 1,907 | 2,479 | |||||
Less: Net income attributable to noncontrolling interest | - | - | - | - | |||||
Net income attributable to the Company's stockholders | 2,851 | 3,499 | 1,907 | 2,479 | |||||
Foreign currency translation adjustment | 1,461 | 188 | 872 | 173 | |||||
Comprehensive income | $ 4,312 | $ 3,687 | $ 2,779 | $ 2,652 | |||||
Comprehensive income attributable to noncontrolling interest | 178 | 32 | 105 | 31 | |||||
Comprehensive income attributable to the Company's stockholders | 4,134 | 3,655 | 2,674 | 2,621 | |||||
Basic earnings per share | $ 0.14 | $ 0.21 | $ 0.09 | $ 0.15 | |||||
Diluted earnings per share | $ 0.14 | $ 0.18 | $ 0.09 | $ 0.12 | |||||
Weighted average common shares outstanding | |||||||||
Basic | 20,390,342 | 17,049,000 | 20,427,007 | 17,049,000 | |||||
Diluted | 20,522,955 | 19,897,076 | 20,447,519 | 20,787,762 | |||||
Jingwei International Limited and Subsidiaries Condensed Consolidated Balance Sheets (in US dollars thousands, except share and par value) | |||||||||
June 30, 2011 | December 31, 2010 | ||||||||
(Unaudited) | |||||||||
ASSETS | |||||||||
Current assets | |||||||||
Cash and cash equivalents | $ | 4,445 | $ | 7,519 | |||||
Accounts receivable, less allowance of doubtful accounts of $2,885 and $2,040, respectively | 37,687 | 34,558 | |||||||
Other receivables, prepayments and deposits, less allowance for doubtful accounts of $137 and $134, respectively | 7,111 | 3,610 | |||||||
Inventories | 7,522 | 5,780 | |||||||
Deferred tax assets | 544 | 413 | |||||||
Total current assets | 57,309 | 51,880 | |||||||
Non-current assets | |||||||||
Property, plant and equipment, net | 1,999 | 1,854 | |||||||
Intangible assets, net | 15,831 | 17,448 | |||||||
Long-term investment | 1,838 | 1,797 | |||||||
Goodwill | 3,283 | 3,209 | |||||||
Total assets | $ | 80,260 | $ | 76,188 | |||||
LIABILITIES AND EQUITY | |||||||||
Current liabilities | |||||||||
Accounts payable | $ | 5,231 | $ | 4,122 | |||||
Accruals and other payable | 561 | 1,890 | |||||||
Income tax payable | 1,582 | 1,610 | |||||||
Deferred tax | 265 | 259 | |||||||
Loan from a stockholder | 201 | 262 | |||||||
Total current liabilities | 7,840 | 8,143 | |||||||
Non-current liabilities | |||||||||
Deferred tax liabilities | 857 | 965 | |||||||
Total liabilities | 8,697 | 9,108 | |||||||
Commitments and contingencies | - | - | |||||||
Equity | |||||||||
Common stock, ($0.001 par value; 75,000,000 shares authorized; 20,478,676 and 20,350,167 shares issued as of June 30, 2011 and December 31, 2010, respectively; 20,452,334 and 20,347,167 shares outstanding as of June 30, 2011 and December 31, 2010, respectively) | 21 | 20 | |||||||
Treasury stock, at cost (26,342 shares and 3,000 share as of June 30, 2011 and December 31, 2010, respectively) | (91) | (12) | |||||||
Additional paid-in capital | 22,751 | 22,502 | |||||||
Statutory and other reserves | 3,590 | 3,590 | |||||||
Retained earnings | 31,799 | 28,948 | |||||||
Accumulated other comprehensive income | 5,582 | 4,299 | |||||||
Total Company's stockholders' equity | 63,652 | 59,347 | |||||||
Noncontrolling interest | 7,911 | 7,733 | |||||||
Total equity | 71,563 | 67,080 | |||||||
Total liabilities and equity | $ | 80,260 | $ | 76,188 | |||||
Jingwei International Limited and Subsidiaries Condensed Consolidated Statements of Cash Flows (in US dollars thousands) | |||||||||||||
Six Months Ended June 30, | |||||||||||||
2011 | 2010 | ||||||||||||
(Unaudited) | (Unaudited) | ||||||||||||
Cash flows from operating activities | |||||||||||||
Net income | $ | 2,851 | $ | 3,499 | |||||||||
Adjustments to reconcile net income to net cash used in operating activities: | |||||||||||||
Depreciation and amortization | 2,506 | 1,731 | |||||||||||
Allowance for doubtful accounts | 1,232 | 285 | |||||||||||
Share-based compensation expense | 172 | 404 | |||||||||||
Changes in operating assets and liabilities: | |||||||||||||
Accounts receivables | (4,361) | (5,803) | |||||||||||
Other receivables, prepayments and deposits | (3,501) | 1,050 | |||||||||||
Inventories | (1,742) | (1,965) | |||||||||||
Deferred tax asset | (233) | 13 | |||||||||||
Accounts payable | 1,047 | (1,562) | |||||||||||
Accruals and other payables | (559) | 326 | |||||||||||
Income tax payable | (28) | (208) | |||||||||||
Net cash used in operating activities | (2,616) | (2,230) | |||||||||||
Cash flows from investing activities | |||||||||||||
Acquisition of property and equipment | (534) | (174) | ) | ||||||||||
Acquisition of intangible assets | (68) | - | |||||||||||
Cash paid for acquisition of Haicom (Note 1) | (771) | - | |||||||||||
Net cash used in investing activities | (1,373) | (174) | |||||||||||
Cash flows from financing activities | |||||||||||||
Loan from a stockholder | 48 | ||||||||||||
Repayment of stockholder loans | (410) | - | |||||||||||
Net cash used in financing activities | (362) | - | |||||||||||
Effect of foreign currency translation on cash and cash equivalents | 1,277 | 98 | |||||||||||
Net decrease in cash and cash equivalents | (3,074) | (2,306) | |||||||||||
Cash and cash equivalents - beginning of period | 7,519 | 10,239 | |||||||||||
Cash and cash equivalents - end of period | $ | 4,445 | $ | 7,933 | |||||||||
Supplemental Disclosure of Cash Flow Information | |||||||||||||
Income tax paid | $ | 232 | $ | 351 | |||||||||
Interest paid | $ | - | $ | - | |||||||||
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.
Note (1):
Net income (non-GAAP)
Net income (non-GAAP) excludes share-based compensation expenses and amortization of acquired intangible assets. We believe that this non-GAAP financial measure provides meaningful supplemental information regarding our performance by excluding certain expenses that may not be indicative of our operating performance. The following table provides the non-GAAP financial measure and the related GAAP measure and provides a reconciliation of the non-GAAP measure to the equivalent GAAP measure.
Q2-2011 Reconciliation of Net Income to Net Income (non-GAAP) For Three Months and Six Months Ended June 30, 2011 | |||||
6 Mos. Ended | 6 Mos. Ended | 3 Mos. Ended | 3 Mos. Ended | ||
30-Jun-11 | 30-Jun-10 | 30-Jun-11 | 30-Jun-10 | ||
Net income | 2,851 | 3,499 | 1,907 | 2,479 | |
Amortization of intangibles assets | 2,071 | 1,540 | 1,050 | 776 | |
Share-based compensation expenses | 172 | 404 | 72 | 339 | |
Net income (non-GAAP) | 5,094 | 5,443 | 3,028 | 3,594 | |
Company Contact: Jingwei International Limited Yong Xu or Cao Wei Email: weicao@jingweicom.com www.jingweicom.com | ||
