omniture

Jingwei International Limited Reports Third Quarter 2011 Financial Results

2011-11-15 20:06 1177

SHENZHEN, China, November 15, 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 third quarter ended September 30, 2011.

Third Quarter 2011 Highlights:

  • Total revenue decreased 17% year-over-year to $8.6 million
  • Data Mining segment revenue decreased 33% year-over-year to $3.6 million
  • Software Services segment revenue declined 1% year-over-year to $5.1 million
  • Gross profit declined 19% year-over-year to $3.9 million
  • Net income (non-GAAP) (1) declined 65% year-over-year to $1.3 million
  • Net loss declined to $(0.8) million
  • Loss per share for the quarter was $(0.04) per basic share and $(0.04) per diluted share, as compared to earnings per share of $0.13 per basic share and $0.13 per diluted share last year
  • Cash and cash equivalents at end of the third quarter was $4.0 million, as compared to $7.5 million at the end of 2010

"After a strong performance in operating results in 2010, we experienced some softness in our key BSS/OSS product offerings to the telecom carriers. Management changes within a major telecom carrier have also impacted the expected ramp-up of our interactive marketing services in the quarter; which in turn negatively impacted our cost structure for the services," commented Mr. George Du, Chairman and Chief Executive Officer of Jingwei. "In addition, net income was negatively affected by a one-time impairment charge of about $1.1 million to a long-term investment, as well as a sharp increase in SG&A Expense in part to support our quick business expansion in the Data mining segment."

Mr. George Du continued, "In spite of the challenges, we have invested greatly to expand our product offerings and strengthen the sales team in data mining segment. We have upgraded our major MVAS "Stock Trading Secretary" to a more comprehensive program, adding new features such as personal wealth management information, financial advisor commentaries and basic wealth management consultation over the phone. With successful deployment of the MVAS Society Channel and marketing support system for China Unicom in four provinces, the Company has built up a strong operating team for this product line. We aim to build on momentum to quickly expand the coverage to ten provinces in the next six months. In the software services segment, we have maintained our market leadership in development of IPTV billing and OSS solution, and continued to upgrade integrated call center platforms in multiple provinces for China Unicom in support of its widely popular "116114" service. Moreover we are making efforts to diversify our customer base into municipal governments and telecom carriers in Eastern European and African countries."

Key Financial Results

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


Nine Months Ended
September 30,


Three Months Ended
September 30,


2011

2010

% change


2011

2010

% change


(Unaudited)



(Unaudited)


Data Mining Net Revenue

$12,027

$12,805

-6%


$3,569

$5,306

(32)%

Software Services Net Revenue

15,575

10,944

42%


5,069

5,104

0%

Net Revenue

27,602

23,749

16%


8,638

10,410

(17)%

Gross Profit

12,380

12,089

2%


3,919

4,840

(19)%

Net Income (non-GAAP)(1)

6,404

9,072

(29)%


1,290

3,631

(65)%

Net Income

2,045

6,242

(67)%


(826)

2,744

(130)%

Earnings per Basic Share

0.10

0.34

(70)%


(0.04)

0.13

(130)%

Earning per Diluted Share

0.10

0.31

(68)%


(0.04)

0.13

(130)%



Financial Outlook

Jingwei has revised its initial outlook for full year 2011 and now expects total revenue between $36.0 million and $40.0 million, net income of between $3.0 million and $4.6 million, and dilutive earnings per basic share of between $0.15 and $0.23 assuming 20.5 million weighted average common shares outstanding on a fully diluted basis.

Jingwei International Limited and Subsidiaries

Consolidated Statements of Income and Comprehensive Income

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




Nine Months Ended
September 30,


Three Months Ended
September 30,



2011


2010


2011


2010



(Unaudited)


(Unaudited)


(Unaudited)


(Unaudited)

Sales


$ 27,602


$ 23,749


$ 8,638


$ 10,410

Cost of sales


15,222


11,660


4,719


5,570

Gross profit


12,380


12,089


3,919


4,840










Operating expenses









Selling, general and administrative expenses


8,013


4,023


3,040


1,462

Research and development costs


2,355


1,867


835


536



10,368


5,890


3,875


1,998










Income from operations


2,012


6,199


44


2,842










Other income (expenses)









Subsidy income


1,265


392


344


71

Interest income


72


46


32


13

Interest expense


-


(5)


-


(1)

Impairment loss on long-term investments


(1,059)


-


(1,059)


-

Other expense


(2)


(74)


(2)


(14)



276


359


(686)


69










Income (loss) before income taxes


2,288


6,558


(642)


2,911

Income tax expense


243


316


184


167










Net income (loss)


2,045


6,242


(826)


2,744

Less: Net income attributable to noncontrolling interest


-


-


-


-

Net income (loss) attributable to the Company's stockholders


2,045


6,242


(826)


2,744

Foreign currency translation adjustment


2,089


936


628


748

Comprehensive income


$ 4,134


$ 7,178


$ (198)


$ 3,492

Comprehensive income attributable to noncontrolling interest


270


156


92


124

Comprehensive income attributable to the Company's stockholders


3,864


7,022


(290)


3,368

Basic earnings (loss) per share


$ 0.10


$ 0.34


$ (0.04)


$ 0.13

Diluted earnings (loss) per share


$ 0.10


$ 0.31


$ (0.04)


$ 0.13

Weighted average common shares outstanding









Basic


20,407,859


18,156,763


20,442,322


20,336,167

Diluted


20,467,059


20,015,271


20,442,322


20,642,134




Jingwei International Limited and Subsidiaries

Consolidated Balance Sheets

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




September 30, 2011



December 31, 2010




(Unaudited)





ASSETS







Current assets







Cash and cash equivalents


$

4,045



$

7,519


Accounts receivable, less allowance of doubtful accounts of $4,163 and $2,040, respectively



38,447




34,558


Other receivables, prepayments and deposits, less allowance for doubtful accounts of $139 and $134, respectively



7,952




3,610


Inventories



8,591




5,780


Deferred tax assets



321




413


Amount due from a stockholder



868




-


Total current assets



60,224




51,880











Non-current assets









Property, plant and equipment, net



1,805




1,854


Intangible assets, net



15,006




17,448


Long-term investment



784




1,797


Goodwill



3,321




3,209


Total assets


$

81,140



$

76,188











LIABILITIES AND EQUITY









Current liabilities









Accounts payable


$

6,685



$

4,122


Accruals and other payable



1,716




1,890


Income tax payable



1,601




1,610


Deferred tax



265




259


Loan from a stockholder



268




262


Amount due to a related company



819




-


Total current liabilities



11,354




8,143











Non-current liabilities









Deferred tax liabilities



804




965


Total liabilities



12,158




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 September 30, 2011 and December 31, 2010, respectively; 20,438,461 and 20,347,167 shares outstanding as of September 30, 2011 and December 31, 2010, respectively)



21




20


Treasury stock, at cost (40,215 shares and 3,000 share as of September 30, 2011 and December 31, 2010, respectively)



(129)




(12)


Additional paid-in capital



20,386




22,502


Statutory and other reserves



3,590




3,590


Retained earnings



30,993




28,948


Accumulated other comprehensive income



6,118




4,299


Total Company's stockholders' equity



60,979




59,347


Noncontrolling interest



8,003




7,733


Total equity



68,982




67,080











Total liabilities and equity


$

81,140



$

76,188





Jingwei International Limited and Subsidiaries

Consolidated Statements of Cash Flows

(in US dollars thousands)




Nine Months Ended September 30,




2011



2010




(Unaudited)



(Unaudited)


Cash flows from operating activities







Net income


$

2,045



$

6,242


Adjustments to reconcile net income to net cash used in operating activities:









Depreciation and amortization



3,770




2,625


Allowance for doubtful accounts



2,527




-


Share-based compensation expense



200




495


Loss on investment impairment



1,059






Changes in operating assets and liabilities:









Accounts receivables



(6,417)




(8,815)


Other receivables, prepayments and deposits



(4,342)




967


Inventories



(2,811)




(2,290)


Deferred tax asset



(63)




(27)


Amount due from shareholders



(868)






Accounts payable



2,500




(31)


Accruals and other payables



(410)




235


Amount due to related companies



819






Income tax payable



(9)




(31)


Net cash used in operating activities



(2,000)




(630)


Cash flows from investing activities









Acquisition of property and equipment



(562)




(223)


Acquisition of intangible assets



(69)




(187)


Cash paid for business acquisition



(2,004)




-


Net cash used in investing activities



(2,635)




(410

)

Cash flows from financing activities









Repurchase of common shares



(39)






Loan from a stockholder



118






Repayment of stockholder loans



(412)




-


Net cash used in financing activities



(333)




-


Effect of foreign currency translation on cash and cash equivalents



1,494




904


Net decrease in cash and cash equivalents



(3,474)




(136)


Cash and cash equivalents - beginning of period



7,519




10,239


Cash and cash equivalents - end of period


$

4,045



$

10,103


Supplemental Disclosure of Cash Flow Information









Income tax paid


$

412



$

404


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, 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.

Company Contact:
Jingwei International Limited
Yong Xu or Cao Wei
Tel: +86-755-8631-9430
Email: weicao@jingweicom.com
www.jingweicom.com

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.


Q3-2011 Reconciliation of Net Income to Net Income (non-GAAP)

For Nine Months and Three Months Ended September 30, 2011


9 Mos. Ended

9 Mos. Ended

3 Mos. Ended

3 Mos. Ended


30-Sep-11

30-Sep-10

30-Sep-11

30-Sep-10

Net income Attributable to the Company

2,045

6,242

-826

2,744

Amortization of intangibles assets

3,100

2,335

1,029

795

Share-based compensation expenses

200

495

28

92

Impairment loss on long-term investment

1,059


1,059


Net income (non-GAAP)

6,404

9,072

1,290

3,631




Source: Jingwei International Limited
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