CARLSTADT, N.J., April 27 /PRNewswire-FirstCall/ -- Jinpan International Ltd. , a leading designer, manufacturer, and distributor of cast resin transformers for voltage distribution equipment, today announced preliminary financial results for the first quarter ended March 31, 2010.
The Company reported preliminary unaudited net sales for the first quarter of 2010 of $19.6 million, a 39.6% decrease from $32.4 million for the same period last year. Domestic sales accounted for $17.3 million of revenue while international sales represented $2.3 million. First quarter gross margin is expected to be approximately 36.1% which is within the Company's full year forecast range of 34%-37%. Preliminary first quarter net income and diluted earnings per share are expected to be approximately $1.1 million and $0.07, respectively.
Mr. Zhiyuan Li, Chief Executive Officer of Jinpan, commented, "Our first quarter performance did not meet our expectations because of lower than expected domestic sales and shipments to a large international OEM customer especially the month of March.
"Domestically, in the first quarter, we faced a more competitive price environment in China. The competitive price environment is primarily due to lower silicon steel prices, a significant component in cast resin transformers, which enabled smaller manufacturers to compete aggressively with Jinpan on price. To meet this competition, we recently adjusted our sales and marketing strategies to better suit this price environment. In addition, we believe that the trend for silicon steel prices for the remainder of the year is to stabilize or to rise, which may lead to an improved price environment.
"Internationally, we made fewer shipments in the first quarter compared to the same period last year. However, at this time, we do not expect full year demand to decline. The framework supply agreements we signed with a primary OEM customer indicates a slight increase in demand for 2010. Furthermore, we recently advanced our goal of diversifying our OEM customer base by successfully qualifying with two large international OEMs to supply cast resin transformers, which we expect will beneficially impact our business this year. As we move forward this year, we expect to make further inroads into the OEM market.
"The first quarter has traditionally been the slowest quarter of the year and despite financial performance that was below expectations, we remain confident about our business prospects for the year. We have backlog of approximately $50 million at the end of March 2010, a 25% increase from the end of 2009 and are comfortable with our projected sales and profit trends for the remainder of the year based on anticipated order patterns from new and existing customers. Consequently, we maintain our previously announced full year 2010 guidance of 10%-15% sales growth over 2009 sales, gross margin of 34%-37%, and net income growth of approximately 2% to 5% over 2009 net income results."
Jinpan plans to release full financial results on Wednesday, May 12, 2010 after the market closes and will host an earnings conference call at 5:00 p.m. U.S. Eastern Time. Listeners may access the call by dialing # 1-719-457-2656. A webcast will also be available at http://www.viavid.net/. A replay of the call will be available through May 26, 2010. Listeners may access the replay by dialing # 1-719-457-0820, access code: 8817471.
About Jinpan International Ltd.
Jinpan International Ltd. designs, manufactures, and markets cast resin transformers for power distribution and wind energy products. Jinpan's cast resin transformers allow high voltage transmissions of electricity to be distributed to various locations in lower, more usable voltages. The Company has obtained ISO9001 and ISO1401 certifications of its cast resin transformers. Its principal executive offices are located in Hainan, China and its U.S. headquarters is based in Carlstadt, New Jersey.
Safe Harbor Provision
Statements in this press release which are not historical data are forward-looking statements which involve known and unknown risks, uncertainties or other factors not under the company's control, which may cause actual results, performance or achievements of the company to be materially different from the results, performance or other expectations implied by these forward-looking statements. These factors include, but are not limited to, those detailed in the company's periodic filings with the Securities and Exchange Commission.
Jinpan International Ltd.
CONTACT: Mark Du, Chief Financial Officer of Jinpan International Ltd.,
+1-201-460-8778; or In China, Yuening Jiang, +86 10 6599 7965, or In U.S.,
Brian M. Prenoveau, CFA, +1-203-682-8200, both of ICR, Inc.
