EARNINGS SHOW IMPROVEMENT IN SECOND QUARTER OF 2009
SHENZHEN, China, Aug. 13 /PRNewswire-Asia/ -- 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 six month periods ended June 30, 2009. The Company plans to file its 10-Q on Friday August 14, 2009.
Recent Financial Highlights Include:
-- Net Income increased 3% to $0.8 million in the second quarter compared
to the first quarter in 2009;
-- Revenue increased 4% to $4.1 million in the second quarter compared to
the first quarter in 2009;
-- Net income decreased 76% to $1.4 million in the first six months of
2009 compared to the same period last year
-- Revenue in the first six months of 2009 decreased 45% to $8.0 million
compared to the same period last year
-- Gross margin in the first half of 2009 was 37% compared to 59% in the
same period last year
-- Second quarter 2009 net income decreased 73% to $0.8 million compared
to the second quarter last year
-- Second quarter 2009 gross margin was 36% compared to 56% in the second
quarter last year
Regis Kwong, Chief Executive Officer of Jingwei International stated, "We are encouraged by the improvement of revenue and net profit in the second quarter of 2009 from the previous quarter. With the real estate, retail, and consumer electronics sectors beginning to show signs of recovery, as well as the continued deployment of wireless 3G, we are experiencing increasing demand for our data mining and software services. We are looking forward to continued improvement in demand for our services."
Second Quarter Ended June 30, 2009
Revenue for the second quarter decreased 53% to $4.1 million from $8.8 million in the second quarter of 2008. Gross profit decreased 69% to $1.5 million from $4.9 million in the second quarter of 2008. Gross margin in the quarter was 36% compared to 56% in the prior year's period.
Income from operations was $0.6 million, down 83% from $3.6 million in the second quarter of 2008. Operating margin was 15% in the second quarter of 2009 compared to 40% during the second quarter of last year.
Net income decreased 73% to $0.8 million, or $0.05 per diluted share in the second quarter of 2009 from $3.0 million, or $0.18 per diluted share in the second quarter of 2008.
Please refer to the table below for the breakdown of segment performance in the three month periods ended June 30, 2009 and 2008.
Three Months Ended June 30
2009 2008
Datamining Software Total Datamining Software Total
Services Services Services Services
Net
Revenue $2,580,227 $1,506,568 $4,086,795 $6,406,853 $2,381,565 $8,788,418
Gross
Profit 970,236 505,169 1,475,405 3,398,773 1,520,514 4,919,287
Gross
Margin 38% 34% 36% 53% 64% 56%
Six Months Ended June 30, 2009
For the six months ended June 30, 2009, revenue decreased 45% to $8.0 million from $14.5 million in the first six months of 2008. During this same time period, gross profit decreased 65% to $3.0 million from $8.6 million. Gross margin is 37% compared to 59% in the same period last year. Income from operations decreased 78% to $1.4 million from $6.4 million in the first half of 2008, and net income decreased 76% to $1.4 million, or $0.08 per diluted share, from $5.8 million, or $0.34 per diluted share, in the first six months of 2008.
Please refer to the table below for the breakdown of segment performance in the six month periods ended June 30, 2009 and 2008.
Six Months Ended June 30
2009 2008
Datamining Software Total Datamining Software Total
Services Services Services Services
Net
Revenue $4,769,923 $3,260,589 $8,030,513 $9,663,094 $4,878,772 $14,541,866
Gross
Profit 1,958,493 1,038,324 2,996,817 5,336,790 3,266,556 8,603,346
Gross
Margin 41% 32% 37% 55% 67% 59%
Balance Sheet
As of June 30, 2009, the Company had approximately $7.3 million of cash and no long-term debt.
Business Update
We have seen slight improvements in our business during the second quarter of 2009. Although our data mining business continued to experience slowdowns from the private business sectors, demand for our software in the telecom sectors has improved.
In data mining, due to stimulus measures implemented by the Chinese government, we have seen increasing activities in real estate marketing as this sector is the first to benefit from this measure. Revenue from the real estate sectors account for a large share of our data mining revenues. However, other business sectors such as finance and retail were still very cautious on spending in marketing and advertising. With our current large accounts cutting back significantly on their marketing budgets, the data mining revenue share has dropped slightly compared to our previous year.
On the other hand, we have seen increased demand for our software services in the telecom sector as operators are now in full gear for 3G deployment. As some of our trials have started to transition into commercial deployments, we experienced increase revenue shares from the software segment. We supplied application software to telecom operators for their 3G services. One particular significant win for us was the Unicom Operation Analysis Software System, where we are the sole provider of the systems software for the Guangzhou branch of China Unicom operations. We expect this trend to continue as the subscriber base expands in China.
Going forward, in addition to the real estate sector, we anticipate that the retail and consumer electronics sectors will be the first to rebound in demand for marketing services. We have experienced an increase in orders for our data mining services from these two sectors in July and August of 2009.
CONFERENCE CALL
Management will host a conference call today at 9:00 a.m. EDT to discuss financial results.
To access the conference call within the U.S., dial: 800.860.2442. For international/toll access, dial: +1.412.858.4600. The Pass Code is: Jingwei. Parties should ask for Jingwei. Please dial in a few minutes before the conference call is scheduled to begin.
A replay of the conference call will be accessible on Jingwei's website at http://www.jingweicom.com
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 global financial crisis, effects 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.
For more information, please contact:
Regis Kwong
Tel: +86-755-8631-9436
Email: regis@jingweicom.com / vanessa@jingweicom.com
Jingwei International Limited And Subsidiaries
Condensed Consolidated Balance Sheets
(Stated in US Dollars)
June 30 December 31
2009 2008
(Unaudited) (Audited)
ASSETS
Current assets
Cash and equivalents $7,303,235 5,472,408
Inventories 4,401,449 2,802,037
Trade receivables (net of allowance
of doubtful accounts of $141,133
and $135,422) 19,564,068 19,371,524
Other receivables, prepayments and
deposits (net of allowance of
doubtful accounts of $103,410 and
$117,787) 1,521,570 3,749,169
Total Current Assets 32,790,322 31,395,138
Non-current assets
Property, plant and equipment - Net 1,510,393 1,305,917
Acquired Intangible Assets 11,620,073 12,238,501
Long term Investment 1,735,624 1,733,244
Total Assets $47,656,412 46,672,800
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Trade payables $1,795,126 1,965,619
Accruals and other payables 984,858 1,465,571
Income Tax payable 430,553 358,168
Deferred Tax 288,035 192,930
Loan from a stockholder 487,916 559,286
Total Current Liabilities 3,986,488 4,541,574
Total Liabilities 3,986,488 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 15,475,331 15,403,411
Statutory and other reserves 883,936 883,936
Accumulated other comprehensive income 2,612,423 2,564,066
Retained Earnings 17,211,282 15,803,104
Total Jingwei International Limited
and Subsidiaries' Stockholders' Equity 36,200,021 34,671,566
Noncontrolling interest 7,469,903 7,459,660
Total Equity 43,669,924 42,131,226
Total Liabilities and Stockholders'
Equity $47,656,412 $46,672,800
Jingwei International Limited And Subsidiaries
Condensed Consolidated Statements of Operations (unaudited)
(Stated in US Dollars)
Three months Three months Six months Six months
Ended Ended Ended Ended
June 30, June 30, June 30, June 30,
2009 2008 2009 2008
(Unaudited) (Audited) (Unaudited) (Audited)
Sales $4,086,795 $8,788,418 $8,030,513 $14,541,866
Cost of sales (2,611,391) (3,869,131) (5,033,697) (5,938,519)
Gross profit 1,475,404 4,919,287 2,996,816 8,603,347
Expenses
Selling, General and
Administrative
expenses (715,112) (1,012,663) (1,118,489) (1,710,188)
Research and
development costs (189,530) (351,151) (443,387) (516,142)
Total Expenses (904,642) (1,363,814) (1,561,876) (2,226,330)
Income from
operations 570,762 3,555,473 1,434,940 6,377,017
Other income
(expenses)
Subsidy income 234,171 286,962 355,386 543,690
Interest income 3,740 3,835 7,764 8,760
Finance costs -- (4,276) -- (8,039)
Other income
(expense) (12,229) (28,544) (26,295) (24,450)
Total other income 225,682 257,977 336,855 519,961
Income before income
taxes 796,444 3,813,450 1,771,795 6,896,978
Income taxes (8,963) (776,686) (363,617) (1,080,625)
Net income 787,481 3,036,764 1,408,178 5,816,353
Less: Net income
attributable to
the noncontrolling
interest -- -- -- --
Net Income
attributable
to Jingwei
International
Limited and
Subsidiaries $787,481 $3,036,764 $1,408,178 $5,816,353
Earnings Per Share
(Basic) $0.05 $0.18 $0.08 $0.34
Earnings Per Share
(Diluted) $0.05 $0.18 $0.08 $0.34
Weighted Average
Common Shares
Outstanding
Basic 17,049,000 17,049,000 17,049,000 17,049,000
Diluted 17,049,000 17,131,660 17,049,000 17,090,330
