First Nine Months Net Income Increased 75% to $7.7M
SHENZHEN, China, Nov. 10 /Xinhua-PRNewswire-FirstCall/ -- Jingwei International Limited (OTC Bulletin Board: JNGW)("Jingwei"), one of the leading providers of data mining and customer relationship marketing services in China, today announced financial results for the three month and nine month periods ended September 30, 2008. The Company plans to file its Quarterly Report on Form 10-Q with the US Securities and Exchange Commission on Friday November 14, 2008.
Recent Financial Highlights
-- Net income increased 75% to $7.7 million in the first nine months of
2008 compared to the same period last year
-- Revenue in the first nine months of 2008 increased 53% to $23.1 million
compared to the same period last year
-- Gross margin in the first nine months of 2008 was 52% compared to 42%
in the same period last year
-- Third quarter 2008 net income increased 46% to $1.9 million compared to
the third quarter last year
Regis Kwong, Chief Executive Officer of Jingwei stated, "I am extremely pleased with the financial results for our third quarter and the first nine months. The robust growth of our business reflects the continued strong demands for our integrated marketing services and we are reaping the investment we have put into data mining technologies. Especially with this challenging economic environment, our customers are looking to leverage Jingwei's targeted marketing approach to maximize their ROI."
Highlights of Three Months Ended September 30, 2008
-- Revenue maintains aggressive growth trend, up 64% reaching $8.6 million
compared with the same period of 2007
-- Datamining segment contributes $6.0 million or 70 percent of total
revenue and software segment brings in $2.6 million or 30 percent
-- Gross margin drops slightly, down 6% reaching 40% compared with the
same period of 2007
-- Datamining segment contributes $2.4 million or 71 percent of total
gross profit and software segment brings in $1.0 million or 29 percent
-- Net margin remains relatively stable, down 3% reaching 22% compared
with the same period of 2007
-- Datamining segment contributes $1.3 million or 71 percent of total net
income and software segment brings in $0.6 million or 29 percent
-- Diluted EPS is up $0.03, reaching $0.11 for third quarter of 2008,
compared with the same period of 2007
Please refer to the table below for details:
Three Months Ended September 30,
2008 2007 Change 08/07
Net sales $8,568,360 $5,216,602 64%
Gross profit $3,441,144 $2,398,474 43%
Gross margin 40% 46%
Net income $1,901,799 $1,292,265 46%
Net margin 22% 25%
EPS, fully diluted $0.11 $0.08 $0.03
Highlights of Nine Months Ended September 30, 2008
-- Revenue continues strong growth, up 53% reaching $23.1 million compared
with the same period of 2007
-- Datamining segment contributes $15.6 million or 68 percent of total
revenue and software segment brings in $7.5 million or 32 percent
-- Gross margin improves, up 10% reaching 52% compared with the same
period of 2007
-- Datamining segment contributes $7.8 million or 65 percent of total
gross profit and software segment brings in $4.3 million or 35 percent
-- Net margin is up 4% reaching 33% compared with the same period of 2007;
-- Datamining segment contributes $4.9 million or 63 percent of total net
income and software segment brings in $2.8 million or 37 percent ;
-- Fully diluted EPS demonstrates higher returns to shareholders, up $0.16
reaching $0.45 compared with the same period of 2007.
Please refer to the table below for the details:
Nine Months Ended September 30
2008 2007 Change 08/07
Net sales $23,110,226 $15,101,900 53%
Gross profit $12,044,491 $6,412,353 88%
Gross margin 52% 42%
Net income $7,718,152 $4,425,192 75%
Net margin 33% 29%
EPS, fully diluted $0.45 $0.29 $0.16
Balance Sheet
As of September 30, 2008, the Company had $7.1 million of cash on hand and had no long term debt.
Business Update
Subject to the effects of the global economic recession, Jingwei anticipates that its business will continue to grow in the next three to five years, and that the growth will be driven by demands from corporate clients for its integrated marketing services to reach the consumers with increasing spending power fueled by the government's policy to stimulate internal consumption.
Amid global financial crisis, China's exports have declined significantly. The government has implemented stimulus measures such as lower interest rates and encouraging banking for consumers to help increase consumer spending. Companies are eager to get their share of this increased consumer consumption. Jingwei is best positioned to target the focused consumers of international brands as well as local companies and provide an attractive cost effective model to reach target audiences. This trend is reflected in the increase of Jingwei's data mining segment to account for 68% of total revenues for the first nine months of 2008.
In order to take advantages of this trend and to solidify its leadership in integrated marketing, Jingwei decided to cease negotiations to acquire the Red Flag Outdoor Advertising business and intends to focus on discrete data mining and marketing projects going forward less capital intensive requirements.
Another trend that impacts our business is the consolidation in the Telecom industry as well as the addition of new 3G services in China. As the telecom operators are in the final process of completing their restructurings, Jingwei experienced increase in software orders during the third quarter of 2008.
About Jingwei International Limited
Jingwei International Limited ("Jingwei") is a leading provider of data mining and customer relationship marketing services in the fast growing Chinese market. Powered by advanced data mining technology and a proprietary database of over 300 million Chinese consumers, Jingwei enables leading Chinese companies as well as international brands to reach their target audiences. The Company's services include market segmentation, customer trend, revenue analysis and direct marketing. Jingwei is evolving into an integrated marketing service provider with targeted campaigns via multi media channels including: interactive mobile, telemarketing, direct mail and new media.
For more information, please visit the Company's web site: http://www.jingweicom.com.
Safe Harbor Statement
Certain of the statements made in the press release constitute forward- looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by the use of forward- looking terminology such as "believe," "expect," "may," "will," "should," "project," "plan," "seek," "intend," or "anticipate" or the negative thereof or comparable terminology. Such statements typically involve risks and uncertainties and may include financial projections or information regarding our future plans, objectives or performance. Actual results could differ materially from the expectations reflected in such forward-looking statements as a result of a variety of factors, including the risks associated with the effect of changing economic conditions in The People's Republic of China including as a result of the global financial crisis of 2008, variations in cash flow, reliance on collaborative retail partners and on new product development, variations in new product development, risks associated with rapid technological change, and the potential of introduced or undetected flaws and defects in products, and other risk factors detailed in reports filed with the Securities and Exchange Commission from time to time.
Jingwei International Limited And Subsidiaries
Condensed Consolidated Statements of Operations (unaudited)
(Stated in US Dollars)
Three Months Three Months Nine Months Nine Months
Ended Ended Ended Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2008 2007 2008 2007
Sales $8,568,360 $5,216,602 $23,110,226 $15,101,900
Cost of sales (5,127,216) (2,818,128) (11,065,735) (8,689,547)
Gross profit 3,441,144 2,398,474 12,044,491 6,412,353
Expenses
Selling, General and
Administrative
expenses (1,278,613) (516,336) (2,988,800) (975,301)
Research and
development costs (202,503) (138,949) (718,646) (315,468)
Total Expenses (1,481,116) (655,285) (3,707,446) (1,290,769)
Income (loss) from
operations 1,960,028 1,743,189 8,337,045 5,121,584
Other income
(expenses)
Subsidy income -- 640 543,690 65,561
Interest income 224,673 147,574 233,433 148,686
Finance costs (3,940) (18,048) (11,979) (39,229)
Other income (expense) (13,733) (89,294) (38,183) (24,911)
Total other income 207,000 40,872 726,961 150,107
Income (loss) before
income taxes 2,167,028 1,784,061 9,064,006 5,271,691
Income taxes (265,229) (491,796) (1,345,854) (846,499)
Net income (loss) $1,901,799 $1,292,265 $7,718,152 $4,425,192
Earnings Per Share
(Basic) $0.11 $0.08 $0.45 $0.29
Earnings Per Share
(Diluted) $0.11 $0.08 $0.45 $0.29
Weighted Average
Common Shares
Outstanding
Basic 17,049,000 17,049,000 17,049,000 15,395,026
Diluted 17,049,000 17,049,000 17,049,000 15,395,026
Jingwei International Limited And Subsidiaries
Condensed Consolidated Balance Sheets
(Stated in US Dollars)
September 30 December 31
2008 2007
(unaudited) (audited)
ASSETS
Current assets
Cash and equivalents $7,134,782 10,760,020
Inventories 2,684,750 1,051,866
Trade receivables (net of allowance of
doubtful accounts of $206,689 and
$176,808) 22,775,905 11,857,099
Other receivables, prepayments
and deposits
(net of allowance of doubtful
accounts of $116,357 and $95,513) 2,127,091 7,299,973
Total Current Assets 34,722,528 30,968,958
Non-current assets
Property, plant and equipment - Net 1,291,020 952,638
Acquired Intangible Assets 11,711,291 5,681,669
Total Assets $47,724,839 37,603,265
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Trade payables $3,506,486 3,221,088
Accruals and other payables 1,764,828 2,480,449
Income Tax payable 502,739 557,514
Deferred Tax 616,512 270,707
Loan from a stockholder 555,327 543,597
Total Current Liabilities 6,945,892 7,073,355
Total Liabilities 6,945,892 7,073,355
Minority Interest - Variable
Interest Entities 7,458,679 6,566,914
Stockholders' Equity
Common stock, $.001 par value;
75,000,000 shares authorized,
17,049,000 shares issued
and outstanding 17,049 17,049
Additional Paid-in Capital 15,364,108 15,063,981
Statutory and other reserves 703,475 703,475
Accumulated other comprehensive income 2,562,366 1,223,373
Retained Earnings 14,673,270 6,955,118
Total Stockholders' Equity 33,320,268 23,962,996
Total Liabilities and Stockholders'
Equity $47,724,839 37,603,265
For more information, please contact:
John BI
CFO, Jingwei International
Tel: +86-755-8631-9436
Email: John.bi@jingweicom.com or john.bi.5198@gmail.com
