SHENZHEN, China, May 21 /PRNewswire-Asia/ -- Jingwei International Limited (OTC Bulletin Board: JNGW) ("Jingwei") today announced financial results for the three months ended March 31, 2009. The Company plans to file its Quarterly Report on Form 10-Q today.
Recent Financial Highlights Include:
-- Revenue decreased 33% to $3.9 million in 2009 from $5.8 million in the
first quarter of 2008
-- Gross profit decreased 59% to $1.5 million from $3.7 million in the
first quarter of 2008
-- Net income decreased 78% to $0.6 million from $2.8 million in the first
quarter of 2008
Regis Kwong, Chief Executive Officer of Jingwei, stated, "Even though revenue in our first quarter in 2009 was lower compared to last year, we are encouraged as the overall economic condition has been steadily improving in China. 3G in telecom is finally starting to move forward as operators have been issued licenses in the first quarter of 2009. We believe our investment and preparation for 3G-related marketing and software services will help us increase our share of the businesses with telecom operators."
Revenue for the first quarter 2009 decreased 33% to $3.9 million from $5.8 million in the first quarter of 2008. Data mining services contributed $2.2 million in revenue in the first quarter of 2009, down from $3.3 million in the first quarter of 2008. Revenue from software services was $1.8 million, down 32% from $2.5 million in the prior year's period.
Gross profit decreased 59% to $1.5 million in the first quarter of 2009 from $3.7 million in the first quarter of 2008. Gross margins were 39% compared to 64% in the prior year's period, and level with the fourth quarter of 2008. As a result of experiencing pricing pressure, Jingwei provided additional functionality to customers and rendered additional add-ons to products. Consequently, costs of sales were significantly higher than in 2008.
For the three months ended March 31, 2009, gross margin related to data mining revenue was approximately 45%, and gross margin related to software services was approximately 30%.
Data Software
mining Services Total
Revenue ($ million) 2.2 1.8 4.0
Cost of Sales
($ million) 1.2 1.2 2.4
Gross Profit
($ million) 1.0 0.5 1.5
Gross margin 45% 30% 39%
Income from operations was $0.9 million, down 69% from $2.8 million in the first quarter of 2008. Operating margin was 22%, compared to 49% in the first quarter of 2008 and 9% in the fourth quarter of 2008. To retain existing customers and gain potential 3G projects, Jingwei representatives traveled frequently to visit customers and to collect newly-developed requirements, thereby increasing operating costs. Entertaining expenses have been significantly reduced, while depreciation and amortization diminishes operational profit.
During the first quarter of 2009, Jingwei's effective income tax rate for its Chinese operations increased to 36% from 10%.
Net income decreased 78% to $0.6 million, or $0.04 per diluted share in the first quarter of 2009 from $2.8 million, or $0.16 per diluted share in the first quarter of 2008.
Business Update
-- Data mining and database marketing services picked up pace during first
quarter of 2009. Jingwei was able to gain momentum sales in the real
estate, financial and retail sectors. A marketing campaign for
McDonald's commenced in Southern China, as did campaigns for Wangke
Real Estate and an international bank.
-- Expansion of 3G services in both marketing and software services. By
implementing smaller trial projects with telecom operators, Jingwei
has positioned itself well to take advantage of 3G growth in China.
About Jingwei International
Jingwei International ("Jingwei") is one of the leading providers of data mining and software services in China. With a customer database of over 300 million Chinese consumers, Jingwei enables leading Chinese companies to reach their target audience. The Company's services include market segmentation, customer trend and churn analysis, fraud detection and direct marketing services such as telemarketing and WVAS. The Company also operates a software services business, which provides a broad range of billing systems, provisioning solutions, decision support and customer relationship management systems for China's leading mobile telecommunication carriers. The software services business strengthens sales opportunities for Jingwei's higher margin data mining platform, and allows the Company to enhance its customer database. Jingwei plans to evolve into an integrated marketing platform with targeted outbound sales campaigns via mobile phone advertising, and customer service/order fulfillment at call centers throughout the country.
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, 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 Balance Sheets
(Stated in US Dollars)
March 31, December 31,
2009 2008
(Unaudited) (Audited)
ASSETS
Current assets
Cash and equivalents $6,495,461 $5,472,408
Inventories 4,473,557 2,802,037
Trade receivables (net of allowance
of doubtful accounts of $141,045 and
$135,422) 19,098,672 19,371,524
Other receivables, prepayments and
deposits (net of allowance of
doubtful accounts of $103,410 and
$117,787) 1,516,194 3,749,169
Total Current Assets 31,583,884 31,395,138
Non-current assets
Property, plant and equipment - Net 1,238,730 1,305,917
Acquired Intangible Assets 11,807,993 12,238,501
Long term Investment 1,784,943 1,733,244
Total Assets $46,415,550 $46,672,800
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Trade payables $1,296,397 $1,965,619
Accruals and other payables 1,055,994 1,465,571
Income Tax payable 463,247 358,168
Deferred Tax 267,890 192,930
Loan from a stockholder 487,905 559,286
Total Current Liabilities 3,571,433 4,541,574
Total Liabilities 3,571,433 4,541,574
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 15,442,714 15,403,411
Statutory and other reserves 883,936 883,936
Accumulated other comprehensive
income 2,607,586 2,564,066
Retained Earnings 16,423,802 15,803,104
Total Jingwei International Limited
Stockholders' Equity 35,375,087 34,671,566
Noncontrolling interest 7,469,030 7,459,660
Total Equity 42,844,117 42,131,226
Total Liabilities and Stockholders'
Equity $46,415,550 $46,672,800
Jingwei International Limited And Subsidiaries
Condensed Consolidated Statements of Operations (unaudited)
(Stated in US Dollars)
Three months Ended Three months Ended
March 31, 2009 March 31, 2008
Sales $3,943,718 $5,753,448
Cost of sales (2,422,306) (2,069,388)
Gross profit 1,521,412 3,684,060
Expenses
Selling, General and
Administrative expenses (403,377) (697,524)
Research and development costs (253,857) (164,992)
Total Expenses (657,234) (862,516)
Income from operations 864,178 2,821,544
Other income (expenses)
Subsidy income 121,216 256,728
Interest income 4,024 4,925
Finance costs -- (3,763)
Other income (expense) (14,066) 4,094
Total other income 111,174 261,984
Income before income taxes 975,352 3,083,528
Income taxes (354,654) (303,939)
Net income 620,698 2,779,589
Less: Net income attributable to the
noncontrolling interest -- --
Net Income attributable to
Jingwei International Limited $620,698 $2,779,589
Earnings Per Share (Basic) $0.04 $0.16
Earnings Per Share (Diluted) $0.04 $0.16
Weighted Average Common Shares
Outstanding
Basic 17,049,000 17,049,000
Diluted 17,049,000 17,131,660
Jingwei International Limited And Subsidiaries
Condensed Consolidated Statements of Comprehensive Income (unaudited)
(Stated in US Dollars)
Three Months Ended Three Months Ended
March 31, 2009 March 31, 2008
Net Income $620,698 $2,779,589
Other Comprehensive Income
Foreign currency translation
adjustment 43,520 617,851
Comprehensive Income 664,218 3,397,440
Comprehensive income attributable to
the noncontrolling interest -- --
Comprehensive income attributable to
Jingwei Limited $664,218 $3,397,440
