Jingwei International Reports 2009 Year End Results
Poster: SySAdmin
Posted on March 31, 2010 at 9:42:01 AM
Jingwei International Reports 2009 Year End Results
SHENZHEN, China, March 31 -- Jingwei International Limited (OTC Bulletin Board: JNGW; "Jingwei" or the "Company"), a leading provider of data mining and interactive marketing services in China, today reported financial results for the fourth quarter and year ended December 31, 2009.
FOURTH QUARTER 2009 RESULTS
Net revenue for the fourth quarter of 2009 increased 181% to $13.5 million compared to $4.8 million in the fourth quarter of 2008. Net revenues from both data mining and software services revenue segments saw significant growth over the fourth quarter of 2008.
During the fourth quarter of 2009, the Company's gross margin declined slightly to 37% from 39% in the fourth quarter of 2008. Net income in the fourth quarter of 2009 increased 138% to $3.1 million compared to $1.3 million in the fourth quarter of 2008. Net earnings per diluted share for the fourth quarter of 2009 increased to $0.18 compared to $0.08 in the fourth quarter of 2008.
The Company ended the quarter with approximately $10.2 million in cash and equivalents.
Key financial results for fourth quarter 2009 versus fourth quarter 2008 are as follows:
Fourth quarter
=============================
2009 2008
==================================================================
Data Mining Net Revenue $9.2 million $2.9 million
==================================================================
Software Services Net Revenue $4.3 million $1.9 million
==================================================================
Net Revenue $13.5 million $4.8 million
==================================================================
Gross Profit $5.0 million $1.8 million
==================================================================
Net Income $3.1 million $1.3 million
==================================================================
Earnings per Diluted Share $0.18 $0.08
==================================================================
2009 FINANCIAL YEAR RESULTS
Net revenue for 2009 increased to $30.3 million compared to $27.9 million in 2008. Both of the revenue segments, data mining and software services, saw increase in net revenue in 2009 over 2008.
During 2009, the Company's gross margin declined to 38% from 50% in 2008. Net income for 2009 decreased to $6.0 million compared to $9.0 million in 2008. Net earnings per diluted share for 2009 declined to $0.35 compared to $0.53 in 2008.
Key financial results for 2009 versus 2008 are as follows:
(in thousands) 2009 2008
Data Data
Mining Software Mining Software
Services Services Total Services Services Total
Net Revenue $19,452 $10,807 $30,259 $18,537 $9,345 $27,882
Gross Profit 7,075 4,303 11,378 8,676 5,216 13,892
Gross Margin 36% 40% 38% 47% 56% 50%
Net Income 5,964 9,028
Net Income % 20% 32%
Free Cash
Flow (1) 8,367 (2,047)
(1) Free Cash Flow is defined as net cash flows provided by operating
activities, less purchases of property and equipment.
Rick Luk, Chief Executive Officer of Jingwei International stated, "We are pleased to be regaining momentum with the continuing improvement of revenue and overall performance in the fourth quarter and second half of 2009 compared to the previous two quarters. Second half revenue and net income increased 177% and 224% over the first half of 2009. Based on the results, we believe on-going management initiatives undertaken in the second half are on track; and we expect this to continue as the Chinese and global economies recover further. 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 were able to grow revenue over 2008, other results trailed behind 2008, as expected. We did achieve both a strong growth of revenue and earnings in the second half compared to the first half of 2009."
"As we enter 2010, we look forward to turning our attention to new initiatives," said Rick Luk. "In addition to continuing growth and expansion of our proprietary consumer database and, expanding mobile VAS capabilities to strengthen our portfolio in the data mining segment to enhance our market competitiveness, we are targeting a strategic breakthrough into interactive marketing services and providing mobile Internet solutions that we expect will benefit from the burgeoning growth of the Chinese consumer market as well as mobile services."
BUSINESS OUTLOOK
The Company confirmed that for fiscal 2010, it is forecasting to achieve total revenue of between $37.5 million and $42.0 million, net income of between $7.3 million and $8.2 million, and earnings per basic share of between $0.43 and $0.48.
The range of anticipated revenues takes into account both organic growth and the possibility of acquisition related growth within the context of current economic conditions.
About Jingwei International
Jingwei International Limited ("Jingwei") is a leading provider of data- mining, Interactive Marketing Services and Mobile Internet marketing solutions in the fast growing Chinese market. Powered by advanced data mining technology and a proprietary database of over 400 million Chinese consumers, Jingwei enables leading Chinese companies as well as international brands to reach their target audiences. The Company's products and services include software services and system integration, data mining and business intelligence services, interactive marketing, mobile internet marketing, wireless VAS and Mobile Products. Jingwei is evolving into a dominant player in interactive marketing services and mobile internet marketing solutions in China.
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. You are also reminded that the press release contains non-GAAP financial measures of free cash flow. These measures should not be considered an alternative to net income, or any other measure of financial performance or liquidity presented in accordance with generally accepted accounting principles (GAAP). These measures are not necessarily comparable to a similarly titled measure of another company. Please refer to Appendix A for information that reconciles these discussed figures with the most comparable GAAP measures.
Jingwei International Limited and Subsidiaries
Consolidated Balance Sheets
(Stated in US Dollars)
December 31,
2009 2008
ASSETS
Current assets
Cash and cash equivalents $10,238,930 $5,472,408
Inventories, net 2,316,043 2,802,037
Trade receivables, less allowance
for doubtful accounts of $1,266,293
and $135,422, respectively 23,456,704 19,371,524
Other receivables, prepayments and
deposits, less allowance for
doubtful accounts of $175,712 and
$117,787, respectively 3,219,008 3,749,169
Deferred tax assets 257,837 --
Total current assets 39,488,522 31,395,138
Non-current assets
Property and equipment, net 1,385,438 1,305,917
Intangible assets, net 16,283,425 12,238,501
Long term investment 1,737,553 1,733,244
Total non-current assets 19,406,416 15,277,662
Total assets $58,894,938 $46,672,800
Jingwei International Limited and Subsidiaries
Consolidated Balance Sheets (Continued)
(Stated in US Dollars)
December 31,
2009 2008
LIABILITIES AND EQUITY
Current liabilities
Trade payables $4,152,787 $1,965,619
Accruals and other payables 1,279,474 1,465,571
Income tax payable 1,718,786 551,098
Loan from a stockholder 369,462 559,286
Total current liabilities 7,520,509 4,541,574
Non-current liabilities
Other liabilities 2,930,257 --
Total liabilities 10,450,766 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 15,643,139 15,403,411
Statutory and other reserves 2,916,292 883,936
Retained earnings 19,734,935 15,803,104
Accumulated other comprehensive
income 2,654,550 2,564,066
Total Company's stockholders'
equity 40,965,965 34,671,566
Noncontrolling interest 7,478,207 7,459,660
Total equity 48,444,172 42,131,226
Total liabilities and equity $58,894,938 $46,672,800
Jingwei International Limited and Subsidiaries
Consolidated Statements of Income and Comprehensive Income
(Stated in US Dollars)
Year Ended December 31,
2009 2008
Sales $30,258,956 $27,881,694
Cost of sales 18,881,066 13,989,763
Gross margin 11,377,890 13,891,931
Operating expenses
Selling, general and administrative
expenses 3,979,435 3,922,323
Research and development costs 1,155,397 1,184,661
5,134,832 5,106,984
Income from operations 6,243,058 8,784,947
Other income (expense)
Subsidy income 736,236 1,037,008
Interest income 180,893 237,017
Finance costs (14,061) (15,918)
Other expense (55,482) (51,751)
847,586 1,206,356
Income before income taxes 7,090,644 9,991,303
Income tax expense 1,126,457 962,856
Net income 5,964,187 9,028,447
Less: Net income attributable to
noncontrolling interest -- --
Net income attributable to the Company 5,964,187 9,028,447
Foreign currency translation
adjustment 90,484 1,340,693
Comprehensive income $6,054,671 $10,369,140
Basic earnings per share $0.35 $0.53
Diluted earnings per share $0.35 $0.53
Weighted average number of shares
outstanding
Basic 17,049,000 17,049,000
Diluted 17,101,714 17,049,000
Jingwei International Limited and Subsidiaries
Consolidated Statements of Cash Flows
(Stated in US Dollars)
Year Ended December 31,
2009 2008
Cash flows from operating activities
Net income $5,964,187 $9,028,447
Adjustments to reconcile net income
to net
Cash provided by (used in) operating
activities
Depreciation and amortization 2,766,445 1,850,340
Allowance for doubtful accounts 1,188,796 66,162
Amortization of stock options
Issued for services 239,728 339,430
Change in operating assets and
liabilities:
Trade receivables (5,216,051) (6,656,514)
Other receivables, prepayments
and deposits 472,236 (2,992,392)
Inventories 485,994 (739,649)
Deferred tax assets (257,837) --
Trade payables 2,187,168 (1,463,008)
Accruals and other payables (186,097) (1,005,514)
Income tax payable 1,167,688 100,336
Net cash flows provided by (used in)
operating activities 8,812,257 (1,472,362)
Cash flows from investing activities
Acquisition of property and equipment (445,000) (574,336)
Acquisition of intangible assets (3,632,955) (1,964,867)
Long-term investment -- (1,733,492)
Net cash flows used in investing activities (4,077,955) (4,272,695)
Cash flows from financing activities
Loan from a stockholder -- 3,940
Repayment of loan from a stockholder (189,824) --
Net cash flows (used in) provided by
financing activities (189,824) 3,940
Effect of foreign currency fluctuation on
cash and cash equivalents 222,044 453,505
Net increase (decrease) in cash and cash
equivalents 4,766,522 (5,287,612)
Cash and cash equivalents-beginning of year 5,472,408 10,760,020
Cash and cash equivalents-end of year $10,238,930 $5,472,408
Income tax paid $309,594 $1,482,796
Interest paid $-- $--
Supplemental Disclosure of Non-cash
Investing Activities
Transfer of prepayment to intangible assets $-- $5,557,110
APPENDIX A:
The Company makes reference to Non-GAAP financial measures, namely free cash flow, in this press release. Management believes that this Non-GAAP financial measure is useful to investors in that it provides supplemental information to possibly better understand the liquidity of the Company. The Company uses free cash flow to evaluate operating performance. However, this Non-GAAP financial measure should not be considered as an alternative to net income or any other performance measures derived in accordance with GAAP.
The following is reconciliation from GAAP Net Cash Flow provided by
Operating activities to free cash flow:
Net Cash Flow Provided by Operating activities $8.8M
-Capital Expenditure -0.4M
Free Cash Flow $8.4M
For more information, please contact:
Yong Xu or Vanessa Bao
Phone: +86-755-8631-9436
Email: vanessa@jingweicom.com
Source: Jingwei International Limited
CONTACT: Yong Xu or Vanessa Bao, +86-755-8631-9436,
vanessa@jingweicom.com
Web site: http://www.jingweicom.com/
SHENZHEN, China, March 31 -- Jingwei International Limited (OTC Bulletin Board: JNGW; "Jingwei" or the "Company"), a leading provider of data mining and interactive marketing services in China, today reported financial results for the fourth quarter and year ended December 31, 2009.
FOURTH QUARTER 2009 RESULTS
Net revenue for the fourth quarter of 2009 increased 181% to $13.5 million compared to $4.8 million in the fourth quarter of 2008. Net revenues from both data mining and software services revenue segments saw significant growth over the fourth quarter of 2008.
During the fourth quarter of 2009, the Company's gross margin declined slightly to 37% from 39% in the fourth quarter of 2008. Net income in the fourth quarter of 2009 increased 138% to $3.1 million compared to $1.3 million in the fourth quarter of 2008. Net earnings per diluted share for the fourth quarter of 2009 increased to $0.18 compared to $0.08 in the fourth quarter of 2008.
The Company ended the quarter with approximately $10.2 million in cash and equivalents.
Key financial results for fourth quarter 2009 versus fourth quarter 2008 are as follows:
Fourth quarter
=============================
2009 2008
==================================================================
Data Mining Net Revenue $9.2 million $2.9 million
==================================================================
Software Services Net Revenue $4.3 million $1.9 million
==================================================================
Net Revenue $13.5 million $4.8 million
==================================================================
Gross Profit $5.0 million $1.8 million
==================================================================
Net Income $3.1 million $1.3 million
==================================================================
Earnings per Diluted Share $0.18 $0.08
==================================================================
2009 FINANCIAL YEAR RESULTS
Net revenue for 2009 increased to $30.3 million compared to $27.9 million in 2008. Both of the revenue segments, data mining and software services, saw increase in net revenue in 2009 over 2008.
During 2009, the Company's gross margin declined to 38% from 50% in 2008. Net income for 2009 decreased to $6.0 million compared to $9.0 million in 2008. Net earnings per diluted share for 2009 declined to $0.35 compared to $0.53 in 2008.
Key financial results for 2009 versus 2008 are as follows:
(in thousands) 2009 2008
Data Data
Mining Software Mining Software
Services Services Total Services Services Total
Net Revenue $19,452 $10,807 $30,259 $18,537 $9,345 $27,882
Gross Profit 7,075 4,303 11,378 8,676 5,216 13,892
Gross Margin 36% 40% 38% 47% 56% 50%
Net Income 5,964 9,028
Net Income % 20% 32%
Free Cash
Flow (1) 8,367 (2,047)
(1) Free Cash Flow is defined as net cash flows provided by operating
activities, less purchases of property and equipment.
Rick Luk, Chief Executive Officer of Jingwei International stated, "We are pleased to be regaining momentum with the continuing improvement of revenue and overall performance in the fourth quarter and second half of 2009 compared to the previous two quarters. Second half revenue and net income increased 177% and 224% over the first half of 2009. Based on the results, we believe on-going management initiatives undertaken in the second half are on track; and we expect this to continue as the Chinese and global economies recover further. 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 were able to grow revenue over 2008, other results trailed behind 2008, as expected. We did achieve both a strong growth of revenue and earnings in the second half compared to the first half of 2009."
"As we enter 2010, we look forward to turning our attention to new initiatives," said Rick Luk. "In addition to continuing growth and expansion of our proprietary consumer database and, expanding mobile VAS capabilities to strengthen our portfolio in the data mining segment to enhance our market competitiveness, we are targeting a strategic breakthrough into interactive marketing services and providing mobile Internet solutions that we expect will benefit from the burgeoning growth of the Chinese consumer market as well as mobile services."
BUSINESS OUTLOOK
The Company confirmed that for fiscal 2010, it is forecasting to achieve total revenue of between $37.5 million and $42.0 million, net income of between $7.3 million and $8.2 million, and earnings per basic share of between $0.43 and $0.48.
The range of anticipated revenues takes into account both organic growth and the possibility of acquisition related growth within the context of current economic conditions.
About Jingwei International
Jingwei International Limited ("Jingwei") is a leading provider of data- mining, Interactive Marketing Services and Mobile Internet marketing solutions in the fast growing Chinese market. Powered by advanced data mining technology and a proprietary database of over 400 million Chinese consumers, Jingwei enables leading Chinese companies as well as international brands to reach their target audiences. The Company's products and services include software services and system integration, data mining and business intelligence services, interactive marketing, mobile internet marketing, wireless VAS and Mobile Products. Jingwei is evolving into a dominant player in interactive marketing services and mobile internet marketing solutions in China.
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. You are also reminded that the press release contains non-GAAP financial measures of free cash flow. These measures should not be considered an alternative to net income, or any other measure of financial performance or liquidity presented in accordance with generally accepted accounting principles (GAAP). These measures are not necessarily comparable to a similarly titled measure of another company. Please refer to Appendix A for information that reconciles these discussed figures with the most comparable GAAP measures.
Jingwei International Limited and Subsidiaries
Consolidated Balance Sheets
(Stated in US Dollars)
December 31,
2009 2008
ASSETS
Current assets
Cash and cash equivalents $10,238,930 $5,472,408
Inventories, net 2,316,043 2,802,037
Trade receivables, less allowance
for doubtful accounts of $1,266,293
and $135,422, respectively 23,456,704 19,371,524
Other receivables, prepayments and
deposits, less allowance for
doubtful accounts of $175,712 and
$117,787, respectively 3,219,008 3,749,169
Deferred tax assets 257,837 --
Total current assets 39,488,522 31,395,138
Non-current assets
Property and equipment, net 1,385,438 1,305,917
Intangible assets, net 16,283,425 12,238,501
Long term investment 1,737,553 1,733,244
Total non-current assets 19,406,416 15,277,662
Total assets $58,894,938 $46,672,800
Jingwei International Limited and Subsidiaries
Consolidated Balance Sheets (Continued)
(Stated in US Dollars)
December 31,
2009 2008
LIABILITIES AND EQUITY
Current liabilities
Trade payables $4,152,787 $1,965,619
Accruals and other payables 1,279,474 1,465,571
Income tax payable 1,718,786 551,098
Loan from a stockholder 369,462 559,286
Total current liabilities 7,520,509 4,541,574
Non-current liabilities
Other liabilities 2,930,257 --
Total liabilities 10,450,766 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 15,643,139 15,403,411
Statutory and other reserves 2,916,292 883,936
Retained earnings 19,734,935 15,803,104
Accumulated other comprehensive
income 2,654,550 2,564,066
Total Company's stockholders'
equity 40,965,965 34,671,566
Noncontrolling interest 7,478,207 7,459,660
Total equity 48,444,172 42,131,226
Total liabilities and equity $58,894,938 $46,672,800
Jingwei International Limited and Subsidiaries
Consolidated Statements of Income and Comprehensive Income
(Stated in US Dollars)
Year Ended December 31,
2009 2008
Sales $30,258,956 $27,881,694
Cost of sales 18,881,066 13,989,763
Gross margin 11,377,890 13,891,931
Operating expenses
Selling, general and administrative
expenses 3,979,435 3,922,323
Research and development costs 1,155,397 1,184,661
5,134,832 5,106,984
Income from operations 6,243,058 8,784,947
Other income (expense)
Subsidy income 736,236 1,037,008
Interest income 180,893 237,017
Finance costs (14,061) (15,918)
Other expense (55,482) (51,751)
847,586 1,206,356
Income before income taxes 7,090,644 9,991,303
Income tax expense 1,126,457 962,856
Net income 5,964,187 9,028,447
Less: Net income attributable to
noncontrolling interest -- --
Net income attributable to the Company 5,964,187 9,028,447
Foreign currency translation
adjustment 90,484 1,340,693
Comprehensive income $6,054,671 $10,369,140
Basic earnings per share $0.35 $0.53
Diluted earnings per share $0.35 $0.53
Weighted average number of shares
outstanding
Basic 17,049,000 17,049,000
Diluted 17,101,714 17,049,000
Jingwei International Limited and Subsidiaries
Consolidated Statements of Cash Flows
(Stated in US Dollars)
Year Ended December 31,
2009 2008
Cash flows from operating activities
Net income $5,964,187 $9,028,447
Adjustments to reconcile net income
to net
Cash provided by (used in) operating
activities
Depreciation and amortization 2,766,445 1,850,340
Allowance for doubtful accounts 1,188,796 66,162
Amortization of stock options
Issued for services 239,728 339,430
Change in operating assets and
liabilities:
Trade receivables (5,216,051) (6,656,514)
Other receivables, prepayments
and deposits 472,236 (2,992,392)
Inventories 485,994 (739,649)
Deferred tax assets (257,837) --
Trade payables 2,187,168 (1,463,008)
Accruals and other payables (186,097) (1,005,514)
Income tax payable 1,167,688 100,336
Net cash flows provided by (used in)
operating activities 8,812,257 (1,472,362)
Cash flows from investing activities
Acquisition of property and equipment (445,000) (574,336)
Acquisition of intangible assets (3,632,955) (1,964,867)
Long-term investment -- (1,733,492)
Net cash flows used in investing activities (4,077,955) (4,272,695)
Cash flows from financing activities
Loan from a stockholder -- 3,940
Repayment of loan from a stockholder (189,824) --
Net cash flows (used in) provided by
financing activities (189,824) 3,940
Effect of foreign currency fluctuation on
cash and cash equivalents 222,044 453,505
Net increase (decrease) in cash and cash
equivalents 4,766,522 (5,287,612)
Cash and cash equivalents-beginning of year 5,472,408 10,760,020
Cash and cash equivalents-end of year $10,238,930 $5,472,408
Income tax paid $309,594 $1,482,796
Interest paid $-- $--
Supplemental Disclosure of Non-cash
Investing Activities
Transfer of prepayment to intangible assets $-- $5,557,110
APPENDIX A:
The Company makes reference to Non-GAAP financial measures, namely free cash flow, in this press release. Management believes that this Non-GAAP financial measure is useful to investors in that it provides supplemental information to possibly better understand the liquidity of the Company. The Company uses free cash flow to evaluate operating performance. However, this Non-GAAP financial measure should not be considered as an alternative to net income or any other performance measures derived in accordance with GAAP.
The following is reconciliation from GAAP Net Cash Flow provided by
Operating activities to free cash flow:
Net Cash Flow Provided by Operating activities $8.8M
-Capital Expenditure -0.4M
Free Cash Flow $8.4M
For more information, please contact:
Yong Xu or Vanessa Bao
Phone: +86-755-8631-9436
Email: vanessa@jingweicom.com
Source: Jingwei International Limited
CONTACT: Yong Xu or Vanessa Bao, +86-755-8631-9436,
vanessa@jingweicom.com
Web site: http://www.jingweicom.com/