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51job, Inc. Reports First Quarter 2011 Financial Results
May 05, 2011 (04:05 PM EDT)


SHANGHAI, May 5, 2011 /PRNewswire-Asia-FirstCall/ -- 51job, Inc. (Nasdaq: JOBS), a leading provider of integrated human resource services in China, announced today unaudited financial results for the first quarter of 2011 ended March 31, 2011.

First Quarter 2011 Financial Highlights:

  • Total revenues increased 27.6% over Q1 2010 to RMB324.5 million (US$49.6 million), exceeding the Company's guidance range of RMB305 million to RMB315 million
  • Online recruitment services revenues increased 57.5% over Q1 2010 to RMB172.8 million (US$26.4 million)
  • Gross margin expanded to 70.5% compared with 64.3% in Q1 2010
  • Income from operations increased 77.0% over Q1 2010 to RMB108.1 million (US$16.5 million)
  • Fully diluted earnings per common share were RMB1.55 (US$0.47 per ADS)
  • Excluding share-based compensation expense and foreign currency translation loss as well as their related tax impact, non-GAAP adjusted fully diluted earnings per common share were RMB1.71 (US$0.52 per ADS), exceeding the Company's guidance range of RMB1.20 to RMB1.30
  • Cash and short-term investments increased to RMB1,734.4 million (US$264.9 million) as of March 31, 2011

Commenting on the results, Rick Yan, President and Chief Executive Officer of 51job, Inc., said, "We have continued to observe favorable market conditions and robust customer demand for our services thus far in 2011.  Our online recruitment business maintained a rapid growth rate as we achieved record revenues and transacted with a record number of unique employers in the first quarter.  Through operational discipline and improved efficiency, we also successfully drove margin expansion despite higher employee costs and investments for the long term.  We believe these strong first quarter results provide further confirmation that we are executing the right strategic plan to develop the most powerful brand in human resource services in China."

First Quarter 2011 Unaudited Financial Results

Total revenues for the first quarter ended March 31, 2011 were RMB324.5 million (US$49.6 million), an increase of 27.6% from RMB254.3 million for the same quarter in 2010.

Online recruitment services revenues for the first quarter of 2011 were RMB172.8 million (US$26.4 million), representing a 57.5% increase from RMB109.7 million for the same quarter of the prior year.  The increase primarily resulted from a greater number of unique employers using the Company's online recruitment services as well as higher average revenue per unique employer.  Unique employers increased 37.9% to 154,823 in the first quarter of 2011 compared with 112,245 in the same quarter of the prior year driven by greater customer acceptance and usage of online recruitment services.  Average revenue per unique employer increased 14.2% in the first quarter of 2011 as compared to the same quarter in 2010 due to stronger market demand and increased spending on online services by employers.

Print advertising revenues for the first quarter of 2011 decreased 6.5% to RMB86.4 million (US$13.2 million) compared with RMB92.4 million for the same quarter in 2010.  The decline was primarily due to a reduction in the number of cities where 51job Weekly is published, from 20 cities as of March 31, 2010 to 16 cities as of March 31, 2011. The estimated number of print advertising pages generated in the first quarter of 2011 decreased 28.4% to 2,234 compared with 3,120 pages in the same quarter in 2010.  This decline was partially offset by higher average revenue per page.  Average revenue per page increased 30.6% primarily as a result of greater page contribution from higher priced cities and modest print advertising rate increases in select cities.

Other human resource related revenues for the first quarter of 2011 increased 25.2% to RMB65.4 million (US$10.0 million) from RMB52.2 million in the same quarter of 2010 primarily due to greater market demand for our business process outsourcing and training services.

Gross profit for the first quarter of 2011 increased 39.4% to RMB215.5 million (US$32.9 million) from RMB154.6 million for the same quarter of the prior year.  Gross margin, which is gross profit as a percentage of net revenues, expanded to 70.5% in the first quarter of 2011 compared with 64.3% in the same quarter in 2010 primarily due to greater economies of scale and improved efficiency.

Operating expenses for the first quarter of 2011 increased 14.9% to RMB107.4 million (US$16.4 million) from RMB93.5 million for the same quarter of 2010.  Operating expenses as a percentage of net revenues decreased to 35.1% for the first quarter of 2011 compared with 38.9% for the first quarter of 2010.  Sales and marketing expenses for the first quarter of 2011 increased 25.8% to RMB70.7 million (US$10.8 million) from RMB56.2 million for the same quarter of the prior year primarily due to higher salary expenses, commissions and bonuses.  General and administrative expenses for the first quarter of 2011 decreased 1.7% to RMB36.7 million (US$5.6 million) from RMB37.3 million in the first quarter of 2010.

Income from operations for the first quarter of 2011 increased 77.0% to RMB108.1 million (US$16.5 million) from RMB61.1 million for the same quarter of the prior year.  Operating margin, which is income from operations as a percentage of net revenues, increased to 35.3% in the first quarter of 2011 compared with 25.4% in the same quarter of 2010.

Net income for the first quarter of 2011 increased 81.6% to RMB91.6 million (US$14.0 million) from RMB50.4 million for the same quarter in 2010.  Fully diluted earnings per common share for the first quarter of 2011 were RMB1.55 (US$0.24) compared with RMB0.91 for the same quarter in 2010.  Fully diluted earnings per ADS for the first quarter of 2011 were RMB3.10 (US$0.47) compared with RMB1.81 in the first quarter of 2010.

In the first quarter of 2011, the Company recognized total share-based compensation expense of RMB6.2 million (US$0.9 million) compared with RMB6.4 million in the first quarter of 2010.  The Company also recognized a foreign currency translation loss of RMB3.5 million (US$0.5 million) in the first quarter of 2011 compared with RMB68,000 in the first quarter of 2010 due to an appreciation of the Renminbi against the U.S. dollar.

Excluding share-based compensation expense and foreign currency translation loss as well as their related tax impact, non-GAAP adjusted income for the first quarter of 2011 increased 78.0% to RMB101.2 million (US$15.5 million) compared with RMB56.9 million for the first quarter of 2010.  Non-GAAP adjusted fully diluted earnings per common share were RMB1.71 (US$0.26) in the first quarter of 2011 compared with RMB1.02 in the first quarter of 2010.  Non-GAAP adjusted fully diluted earnings per ADS in the first quarter of 2011 were RMB3.43 (US$0.52) compared with RMB2.05 in the first quarter of 2010.

As of March 31, 2011, the Company had cash and short-term investments totaling RMB1,734.4 million (US$264.9 million) compared with RMB1,599.8 million as of December 31, 2010.  Short-term investments consist of certificates of deposit with original maturities from three months to one year.

Business Outlook

For the second quarter of 2011, based on current market and operating conditions, the Company's revenue target is in the estimated range of RMB325 million to RMB335 million (US$49.6 million to US$51.2 million).  Excluding share-based compensation expense and any foreign currency translation loss or gain as well as their related tax impact, the Company's non-GAAP fully diluted earnings target for the second quarter of 2011 is in the estimated range of RMB1.60 to RMB1.70 per common share (US$0.49 to US$0.52 per ADS).  The Company expects aggregate share-based compensation expense to increase in the second quarter of 2011 to approximately RMB10 million (US$1.5 million).

Other Company News

In April 2011, the Company discontinued the publication of 51job Weekly in Kunming but continues to maintain a sales office in the city.

Currency Convenience Translation

For the convenience of readers, certain Renminbi amounts have been translated into U.S. dollars at the rate of RMB6.5483 to US$1.00, the noon buying rate on March 31, 2011 in New York for cable transfers of Renminbi per U.S. dollar as set forth in the H.10 weekly statistical release of the Federal Reserve Board.

Conference Call Information

Management will hold a conference call at 9:00 p.m. Eastern Time on May 5, 2011 (9:00 a.m. Shanghai / Hong Kong time zone on May 6, 2011) to discuss its first quarter 2011 results, operating performance and business outlook.

To dial in to the call, please use conference ID 4435937 and the following telephone numbers:

US: +1-877-941-2333

Hong Kong: +852-3009-5027

International: +1-480-629-9723



The call will also be available live and on replay through 51job's investor relations website, ir.51job.com. Please go to the website at least fifteen minutes early to register or install any necessary audio software.

Use of Non-GAAP Financial Measures

To supplement the consolidated financial statements presented in accordance with United States Generally Accepted Accounting Principles (GAAP), 51job uses non-GAAP measures of income before income tax expense, income tax expense, adjusted net income, adjusted earnings per common share and adjusted earnings per ADS, which are adjusted from results based on GAAP to exclude share-based compensation expense and foreign currency translation gain or loss as well as their related tax impact.  The Company believes excluding share-based compensation expense and its related tax impact from its non-GAAP financial measures is useful for its management and investors to assess and analyze the Company's core operating results as such expense is not directly attributable to the underlying performance of the Company's business operations and do not impact its cash earnings. The Company believes excluding foreign currency translation gain or loss and its related tax impact from its non-GAAP financial measures is useful for its management and investors as such translation gain or loss is not indicative of the Company's core business operations and will not result in cash settlement nor impact the Company's cash earnings. 51job also believes these non-GAAP measures excluding share-based compensation expense and foreign currency translation gain or loss as well as their related tax impact are important in helping investors to understand the Company's current financial performance and future prospects and to compare business trends among different reporting periods on a consistent basis.  The presentation of these additional measures should not be considered a substitute for or superior to GAAP results or as being comparable to results reported or forecasted by other companies.  The non-GAAP measures have been reconciled to GAAP measures in the attached financial statements.

About 51job

51job, Inc. (Nasdaq: JOBS) is a leading provider of integrated human resource services in China with a strong focus on recruitment related services.  Through online recruitment services at www.51job.com and print advertisements in 51job Weekly, 51job enables enterprises to attract, identify and recruit employees and connects millions of job seekers with employment opportunities.  51job also provides a number of other value-added human resource services, including business process outsourcing, training, executive search and compensation and benefits analysis.  51job has a call center in Wuhan and a nationwide sales office network spanning 25 cities across China.

Safe Harbor Statement

Statements in this release regarding targets for the second quarter of 2011, future business and operating results constitute "forward-looking" statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the Private Securities Litigation Reform Act of 1995. These statements are based upon management's current expectations, and actual results could differ materially.  Among the factors that could cause actual results to differ are the number of recruitment advertisements placed, sales orders received and customer contracts executed during the remaining weeks of the second quarter of 2011; any accounting adjustments that may occur during the quarterly close; fluctuations in the value of the Renminbi against the U.S. dollar and other currencies; behavioral and operational changes of customers in meeting their human resource needs as they respond to evolving social, economic and political changes in China as well as stock market volatilities; introduction by its competitors of new or enhanced products or services; price competition in the market for the various human resource services that the Company provides in China; acceptance of new products and services developed or introduced by the Company outside of the human resources industry and fluctuations in general economic conditions. For additional information on these and other factors that may affect the Company's financial results, please refer to the Company's filings with the Securities and Exchange Commission. 51job undertakes no obligation to update these targets prior to announcing final results for the second quarter of 2011 or as a result of new information, future events or otherwise.

- Financial tables follow -

51job, Inc.

Consolidated Statements of Operations



For the Three Months Ended


(In thousands, except share, per share and per ADS data)

March 31, 2010

(unaudited)

March 31, 2011

(unaudited)

March 31, 2011

(unaudited)


RMB

RMB

USD (Note 1)





Revenues:




   Online recruitment services

109,709

172,788

26,387

   Print advertising

92,369

86,405

13,195

   Other human resource related revenues

52,193

65,355

9,980

Total revenues

254,271

324,548

49,562





Less: Business and related tax

(13,763)

(18,698)

(2,855)

Net revenues

240,508

305,850

46,707





Cost of services (Note 2)

(85,955)

(90,373)

(13,801)





Gross profit

154,553

215,477

32,906





Operating expenses:




   Sales and marketing (Note 3)

(56,154)

(70,664)

(10,791)

   General and administrative (Note 4)

(37,322)

(36,702)

(5,605)

Total operating expenses

(93,476)

(107,366)

(16,396)





Income from operations

61,077

108,111

16,510

Loss from foreign currency translation

(68)

(3,475)

(531)

Interest and investment income

4,089

7,462

1,139

Other income

240

298

46





Income before income tax expense

65,338

112,396

17,164

Income tax expense

(14,896)

(20,785)

(3,174)





Net income

50,442

91,611

13,990





Earnings per share:




   Basic

0.92

1.62

0.25

   Diluted

0.91

1.55

0.24





Earnings per ADS (Note 5):




   Basic

1.83

3.24

0.49

   Diluted

1.81

3.10

0.47





Weighted average number of common shares outstanding:




   Basic

55,114,287

56,508,322

56,508,322

   Diluted

55,612,293

59,062,630

59,062,630



Notes:

1. The conversion of RMB amounts into USD amounts is based on the noon buying rate of USD1.00=RMB6.5483 on March 31, 2011 in New York for cable transfers of RMB as set forth in the H.10 weekly statistical release of the Federal Reserve Board.

2. Includes share-based compensation expense of RMB1,020 and RMB986 (US$151) for the three months ended March 31, 2010 and 2011, respectively.

3. Includes share-based compensation expense of RMB877 and RMB847 (US$129) for the three months ended March 31, 2010 and 2011, respectively.

4. Includes share-based compensation expense of RMB4,470 and RMB4,319 (US$660) for the three months ended March 31, 2010 and 2011, respectively.

5. Each ADS represents two common shares.




51job, Inc.

Reconciliation of GAAP and Non-GAAP Results



For the Three Months Ended

(In thousands, except share, per share and per ADS data)

March 31, 2010

(unaudited)

March 31, 2011

(unaudited)

March 31, 2011

(unaudited)


RMB

RMB

USD (Note 1)





GAAP income before income tax expense

65,338

112,396

17,164

Add back: Share-based compensation expense

6,367

6,152

940

Add back: Loss from foreign currency translation

68

3,475

531

Non-GAAP income before income tax expense

71,773

122,023

18,635





GAAP income tax expense

(14,896)

(20,785)

(3,174)

Tax impact of share-based compensation expense and loss from foreign currency translation

(0)

(15)

(2)

Non-GAAP income tax expense

(14,896)

(20,800)

(3,176)





Non-GAAP adjusted net income

56,877

101,223

15,459





Non-GAAP adjusted earnings per share:




   Basic

1.03

1.79

0.27

   Diluted

1.02

1.71

0.26





Non-GAAP adjusted earnings per ADS (Note 2):




   Basic

2.06

3.58

0.55

   Diluted

2.05

3.43

0.52





Weighted average number of common shares outstanding:




   Basic

55,114,287

56,508,322

56,508,322

   Diluted

55,612,293

59,062,630

59,062,630



Notes:

1. The conversion of RMB amounts into USD amounts is based on the noon buying rate of USD1.00=RMB6.5483 on March 31, 2011 in New York for cable transfers of RMB as set forth in the H.10 weekly statistical release of the Federal Reserve Board.

2. Each ADS represents two common shares.




51job, Inc.

Consolidated Balance Sheets



As of



(In thousands, except share and per share data)

December 31,

2010

(unaudited)

March 31,

2011

(unaudited)

March 31,

2011

(unaudited)


RMB

RMB

USD (Note 1)





ASSETS








Current assets:




   Cash

1,192,888

750,918

114,674

   Restricted cash

44,888

14,083

2,150

   Short-term investments

406,943

983,476

150,188

     Accounts receivable (net of allowance of RMB1,965 and
        RMB2,069 as of December 31, 2010 and March 31, 2011,
        respectively)

33,386

31,057

4,743

   Prepayments and other current assets

75,256

94,891

14,491

   Deferred tax assets, current

6,749

3,884

593





Total current assets

1,760,110

1,878,309

286,839





Long-term investments

15,433

15,279

2,333

Property and equipment, net

202,699

198,807

30,360

Intangible assets, net

4,805

4,416

674

Other long-term assets

4,853

7,164

1,094

Deferred tax assets, non-current

110

470

72





Total non-current assets

227,900

226,136

34,533





Total assets

1,988,010

2,104,445

321,372





LIABILITIES








Current liabilities:




   Accounts payable

15,551

14,387

2,197

   Salary and employee related accrual

39,543

24,424

3,730

   Taxes payable

39,795

38,153

5,826

   Advance from customers

186,191

237,054

36,201

   Other payables and accruals

50,491

30,641

4,679





Total current liabilities

331,571

344,659

52,633





Deferred tax liabilities, non-current

1,583

1,680

257





Total liabilities

333,154

346,339

52,890





Shareholders' equity:




     Common shares (US$0.0001 par value; 500,000,000 shares

        authorized, 56,473,949 and 56,581,719 shares issued and
        outstanding as of December 31, 2010 and March 31, 2011,
        respectively)

47

47

7

   Additional paid-in capital

997,933

1,009,501

154,162

   Statutory reserves

6,811

6,811

1,040

   Other comprehensive income

1,313

1,384

211

   Retained earnings

648,752

740,363

113,062





Total shareholders' equity

1,654,856

1,758,106

268,482





Total liabilities and shareholders' equity

1,988,010

2,104,445

321,372



Note 1:

The conversion of RMB amounts into USD amounts is based on the noon buying rate of USD1.00=RMB6.5483 on March 31, 2011 in New York for cable transfers of RMB as set forth in the H.10 weekly statistical release of the Federal Reserve Board.



Contact:


Rebecca Liu

Investor Relations

51job, Inc.

+(86-21) 6879-6250

investor.relations@51job.com



SOURCE 51job, Inc.