Net Income Increased by 85% Over Second Quarter of 2009
SHENZHEN, China, Nov. 14 /PRNewswire-Asia/ -- Jingwei International Limited (OTC Bulletin Board: JNGW; "Jingwei" or the "Company"), 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, 2009. The Company plans to file its 10-Q on Monday November 16, 2009.
Recent Financial Highlights:
-- Net Income increased 85% to $1.5 million in the third quarter compared
to the second quarter in 2009;
-- Revenue increased 114% to $8.8 million in the third quarter compared to
the second quarter in 2009;
-- Net income decreased 62% to $2.9 million in the nine months of 2009
compared to the same period last year;
-- Revenue decreased 27% to $16.8 million in the nine months of 2009
compared to the same period last year;
-- Gross margin in the nine months of 2009 was 38% compared to 52 % in the
same period last year;
-- Third quarter 2009 net income decreased 21% to $1.5 million compared to
the third quarter last year;
-- Third quarter 2009 gross margin was 39% compared to 40% in the third
quarter last year.
Rick Luk, Chief Executive Officer of Jingwei International stated, "We are very excited about the significant improvement of revenue and earnings in the third quarter of 2009 compared to the previous two quarters. Based on the results, we believe management actions taken in the third quarter are on track; and we expect this momentum to continue as the global economy continues to recover. In the quarter, we enjoyed a significant increase of demand for our services as result of our added capabilities driven by the full deployment of 3G in the telecom sector and the increased subscriber base in the PRC. For the full year, while we still expect our results to trail behind 2008, we are forecasting a strong growth of revenue and earnings in the second half compared to the first half of 2009."
Third Quarter Ended September 30, 2009
Revenue for the third quarter increased 2% to $8.8 million from $8.6 million in the third quarter of 2008.
Gross profit decreased 1% to $3.39 million from $3.44 million in the third quarter of 2008. Gross margin in the quarter was 39% compared to 40% in the same period in 2008.
Income from operations was $1.4 million, down 30% from $2.0 million in the third quarter of 2008. Operating margin was 16% in the third quarter of 2009 compared to 23% during the third quarter of last year.
Net income decreased 21% to $1.5 million, or $0.09 per diluted share in the third quarter of 2009 from $1.9 million, or $0.11 per diluted share in the third quarter of 2008.
Please refer to the table below for the breakdown of segment performance in the three month periods ended September 30, 2009 and 2008.
Three Months Ended September 30
2009
Datamining Software
Services Services Total
Net Revenue $5,451,796 $3,311,371 $8,763,167
Gross Profit 2,271,341 1,122,582 3,393,923
Gross Margin 42% 34% 39%
Three Months Ended September 30
2008
Datamining Software
Services Services Total
Net Revenue $5,959,194 $2,609,166 $8,568,360
Gross Profit 2,433,045 1,008,099 3,441,144
Gross Margin 41% 39% 40%
Nine Months Ended September 30, 2009
For the nine months ended September 30, 2009, revenue decreased 27% to $16.8 million from $23.1 million in the nine months of 2008. During this same time period, gross profit decreased 47% to $6.4 million from $12.0 million. Gross margin is 38% compared to 52% in the same period last year. Income from operations decreased 66% to $2.8 million from $8.3 million in the nine months of 2008, and net income decreased 62% to $2.9 million, or $0.17 per diluted share, from $7.7 million, or $0.45 per diluted share, in the nine months of 2008.
Please refer to the table below for the breakdown of segment performance in the nine month periods ended September 30, 2009 and 2008.
Nine Months Ended September 30
2009
Datamining Software
Services Services Total
Net Revenue $10,221,720 $6,571,960 $16,793,680
Gross Profit 4,229,834 2,160,905 6,390,739
Gross Margin 41% 33% 38%
Nine Months Ended September 30
2008
Datamining Software
Services Services Total
Net Revenue $15,622,288 $7,487,938 $23,110,226
Gross Profit 7,769,835 4,274,655 12,044,490
Gross Margin 50% 57% 52%
Balance Sheet
As of September 30, 2009, the Company had approximately $2.9 million of cash and no long-term debt.
Business Update
In the data mining segment, while Jingwei has achieved marginal improvement in the existing market sector, its acquisition of the value added service and channel sales business of Newway Technology in July 2009 has contributed to a solid growth in revenue and earnings in Q3 for the 3G related value added service offerings. This growth is expected to accelerate as Jingwei begins to integrate the acquired capabilities into its mainstream offerings. Also, building on the momentum to become an integrated marketing solutions provider through multi-media channels, on October 22, 2009, the Company signed a framework agreement with Jiangsu province (Suqian municipal government Industrial Park) to collaborate with the telecom operators to leverage our data mining and software services expertise to build an outsourced e-Contact center with integrated telemarketing and customer support capabilities to support the business promotion and customer care programs for the telecom operators nation-wide.
In the Software Services segment, operation analysis and billing software continued to enjoy moderate growth in revenue and earnings. In addition, following full deployment of 3G nation-wide in China, Jingwei delivered several major application service solutions to the telecom operators, resulting in strong growth in revenue over Q2. One major customer win was to provide a total system solution to the Henan Telecom Bureau of China Telecom for their security monitoring and operation control systems in their switching centers in the province.
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:
Vanessa Bao
Tel: +86-755-8631-9436
Email: vanessa@jingweicom.com / rickluk@jingweicom.com
Jingwei International Limited and Subsidiaries
Consolidated Balance Sheets
(Stated in US Dollars)
September 30, December 31,
2009 2008
(Unaudited) (Audited)
ASSETS
Current assets
Cash and equivalents $2,882,340 5,472,408
Inventories 2,338,740 2,802,037
Trade receivables, less allowance for
doubtful accounts of $907,409 and
$135,422, respectively 24,000,277 19,371,524
Other receivables, prepayments and
deposits, less allowance for
doubtful accounts of $175,701 and
$117,787, respectively 3,247,783 3,749,169
Total Current Assets 32,469,140 31,395,138
Non-current assets
Property, plant and equipment, net 1,442,624 1,305,917
Intangible assets, net 17,000,373 12,238,501
Long term investment 1,737,452 1,733,244
$52,649,589 46,672,800
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Trade payables $2,082,215 1,965,619
Accruals and other payables 1,105,479 1,465,571
Income tax payable 604,770 358,168
Deferred tax 347,004 192,930
Loan from a stockholder 488,006 559,286
Total Current Liabilities 4,627,474 4,541,574
Non-current liabilities
Other liabilities 2,809,904 --
Total Liabilities 7,437,378 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 15,512,405 15,403,411
Statutory and other reserves 883,936 883,936
Accumulated other comprehensive
income 2,649,840 2,564,066
Retained earnings 18,671,214 15,803,104
Total Jingwei International
Stockholders' Equity 37,734,444 34,671,566
Noncontrolling interest 7,477,767 7,459,660
Total Equity 45,212,211 42,131,226
$52,649,589 $46,672,800
Jingwei International Limited and Subsidiaries
Consolidated Statements of Operations and Comprehensive Income
(Stated in US Dollars)
Three months Ended Nine months Ended
September September September September
30, 2009 30, 2008 30, 2009 30, 2008
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Sales $8,763,167 $8,568,360 $16,793,680 $23,110,226
Cost of sales (5,369,243) (5,127,216) (10,402,940) (11,065,735)
Gross Margin 3,393,924 3,441,144 6,390,740 12,044,491
Expenses
Selling, General and
Administrative
expenses (1,639,683) (1,278,613) (2,758,172) (2,988,800)
Research and
development costs (392,855) (202,503) (836,242) (718,646)
(2,032,538) (1,481,116) (3,594,414) (3,707,446)
Income from operations 1,361,386 1,960,028 2,796,326 8,337,045
Other income (expense)
Subsidy income 196,655 -- 552,041 543,690
Interest income 167,154 224,673 174,918 233,433
Finance costs -- (3,940) -- (11,979)
Other expenses (15,290) (13,733) (41,585) (38,183)
348,519 207,000 685,374 726,961
Income before income
taxes 1,709,905 2,167,028 3,481,700 9,064,006
Income tax expense (249,973) (265,229) (613,590) (1,345,854)
Net income 1,459,932 1,901,799 2,868,110 7,718,152
Less: Net income
attributable to the
noncontrolling
interest -- -- -- --
Net Income attributable
to Jingwei
International Limited
and Subsidiaries $1,459,932 $1,901,799 $2,868,110 $7,718,152
Foreign currency
translation adjustment 37,417 77,559 85,774 1,338,993
Comprehensive Income $1,497,349 $1,979,358 $2,953,884 $9,057,145
Earnings per share
Basic and diluted $0.09 $0.11 $0.17 $0.45
Weighted Average Common
Shares Outstanding
Basic 17,049,000 17,049,000 17,049,000 17,049,000
Jingwei International Limited and Subsidiaries
Consolidated Statements of Cash Flows
(Stated in US Dollars)
Nine Months Ended
September September
30, 2009 30, 2008
(Unaudited) (Unaudited)
Cash flows from operating activities:
Net income $2,868,110 $7,718,152
Adjustments to reconcile net income
to net cash provided by (used in)
operating activities:
Depreciation & amortization 1,884,359 1,230,667
Allowance for doubtful accounts 829,901 31,821
Amortization of stock options
issued for services 108,994 300,127
Changes in operating assets and
liabilities:
Trade receivables (5,536,162) (10,031,166)
Other receivables, prepayments
and deposits 443,472 (1,275,529)
Inventories 463,297 (592,805)
Trade payables 116,596 78,592
Other payables and accrued
expenses (360,092) (438,628)
Deferred tax 154,074 --
Income tax payable 246,602 289,598
Net cash flows provided by (used in)
operating activities 1,219,151 (2,689,171)
Cash flows from investing activities:
Acquisition of property and
equipment (343,536) --
Acquisition of intangible assets (3,589,934) (494,498)
Long term Investment -- (893,918)
Net cash flows used in investing
activities (3,933,470) (1,388,416)
Cash flows from financing activities:
Repayment to loan from a stockholder (71,579) --
Net cash flows used in financing
activities (71,579) --
Effect of foreign currency
translation on cash
and cash equivalents 195,830 452,349
Net decrease in cash and equivalents (2,590,068) (3,625,238)
Cash and cash equivalents-beginning
of period 5,472,408 10,760,020
Cash and cash equivalents-end of
period $2,882,340 $7,134,782
Supplemental disclosure of cash flow
information
Income tax paid $268,536 $1,101,020
Supplemental disclosure of non-cash
investing activities
Transfer of prepayment to intangible
assets $-- $5,557,110
