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Jingwei International Limited Reports Second Quarter 2011 Financial Results
Aug 15, 2011 (06:08 PM EDT)


SHENZHEN, China, Aug. 15, 2011 /PRNewswire-Asia-FirstCall/ -- Jingwei International Limited (NASDAQ: JNGW) ("Jingwei" or "the Company"), a leading provider of data-mining, interactive marketing and software services in China, today announced its financial results for the second quarter ended June 30, 2011.

Second Quarter 2011 Highlights:

  • Total revenue increased 39% year-over-year to $11.4 million
  • Data Mining segment revenue grew 9% year-over-year to $4.8 million
  • Software Services segment revenue rose 73% year-over-year to $6.6 million
  • Gross profit declined 2% year-over-year to $4.5 million
  • Net income (non-GAAP)(1) declined 16% year-over-year to $3.0 million
  • Net income declined 23% year-over-year to $1.9 million
  • EPS for the quarter was$0.09 per basic share and $0.09 per diluted share compared to $0.15 per basic share and $0.12 per diluted share last year
  • Cash and equivalents at end of the second quarter was $4.4 million, as compared to $7.5 million at the end of 2010

"We have continued our strong year-over-year revenue growth in both of our business segments during the second quarter of 2011," commented Mr. George Du, Chairman and Chief Executive Officer of Jingwei. "In data mining, we have expanded greatly our product offering in 3G related MVAS business, and have seen significant revenue contribution from this part of the business in the current period. In the second quarter of 2011, the Company successfully deployed the mobile value-added services ("MVAS") Society Channel and marketing support system in Fujian province, and is currently operating the system with early success. Furthermore, the Company is in discussion with several other provincial operators to leverage similar capabilities to benefit their local operation. In the software service segment, the Company took significant system integration contracts to develop a web-based integrated governmental service platform for local governments in Guangdong province."

Key Financial Results

Key financial results for the second quarter 2011 versus the second quarter 2010 and the first six months 2011 versus the first six months 2010 are as follows (in US dollars thousands, except per share data):



Six Months Ended
June  30,


Three Months Ended
June 30,


2011

2010

% change


2011

2010

% change


(Unaudited)



(Unaudited)


Data Mining Net Revenue

$8,438

$7,498

13%


$4,823

$4,428

9%

Software Services Net Revenue

10,502

5,851

79%


6,591

3,802

73%

Net Revenue

18,940

13,349

42%


11,414

8,230

39%

Gross Profit

8,451

7,254

17%


4,519

4,615

-2%

Net Income (non-GAAP)(1)

5,094

5,443

-6%


3,028

3,594

-16%

Net Income

2,851

3,499

-19%


1,907

2,479

-23%

Earnings per Basic Share

0.14

0.21

-33%


0.09

0.15

-40%

Earning per Diluted Share

0.14

0.18

-22%


0.09

0.12

-25%












Financial Outlook

In 2011, the Company reiterates its guidance with projected total revenue of between $45.2 million and $49.2 million, and revises its net income guidance to between $9.0 million and $12.0 million, and dilutive earnings per basic share guidance to between $0.44 and $0.59, assuming 20.5 million weighted average common shares outstanding on a dilutive basis.

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.

Jingwei International Limited and Subsidiaries

Condensed Consolidated Statements of Income and Comprehensive Income

(in US dollars thousands, except share and per share data)



Six Months Ended

June 30,


Three Months Ended

June 30,



2011


2010


2011


2010



(Unaudited)


(Unaudited)


(Unaudited)


(Unaudited)

Sales


$       18,940


$    13,349


$      11,414


$       8,230

Cost of sales


10,489


6,095


6,895


3,615

Gross profit


8,451


7,254


4,519


4,615










Operating expenses









Selling, general and administrative expenses


4,982


2,563


2,403


1,609

Research and development costs


1,520


1,331


781


598



6,502


3,894


3,184


2,207










Income from operations


1,949


3,360


1,335


2,408










Other income (expenses)









Subsidy income


921


320


523


11

Interest income


40


33


8


10

Interest expense


-


(5)


-


(3)

Other expense


(1)


(60)


-


(14)



960


288


531


4










Income before income taxes


2,909


3,648


1,866


2,412

Income tax expense (benefit)


58


149


(41)


(67)










Net income


2,851


3,499


1,907


2,479

Less: Net income attributable to noncontrolling interest


-


-


-


-

Net income attributable to the Company's stockholders


2,851


3,499


1,907


2,479

Foreign currency translation adjustment


1,461


188


872


173

Comprehensive income


$        4,312


$     3,687


$       2,779


$       2,652

Comprehensive income attributable to noncontrolling interest


178


32


105


31

Comprehensive income attributable to the Company's stockholders


4,134


3,655


2,674


2,621

Basic earnings per share


$         0.14


$      0.21


$        0.09


$        0.15

Diluted earnings per share


$         0.14


$      0.18


$        0.09


$        0.12

Weighted average common shares outstanding









Basic


20,390,342


17,049,000


20,427,007


17,049,000

Diluted


20,522,955


19,897,076


20,447,519


20,787,762




Jingwei International Limited and Subsidiaries

Condensed Consolidated Balance Sheets

(in US dollars thousands, except share and par value)



June 30, 2011



December 31, 2010



(Unaudited)




ASSETS






Current assets






Cash and cash equivalents


$

4,445



$

7,519

Accounts receivable, less allowance of doubtful accounts of $2,885 and $2,040, respectively



37,687




34,558

Other receivables, prepayments and deposits, less allowance for doubtful accounts of $137 and $134, respectively



7,111




3,610

Inventories



7,522




5,780

Deferred tax assets



544




413

Total current assets



57,309




51,880









Non-current assets








Property, plant and equipment, net



1,999




1,854

Intangible assets, net



15,831




17,448

Long-term investment



1,838




1,797

Goodwill



3,283




3,209

Total assets


$

80,260



$

76,188









LIABILITIES AND EQUITY








Current liabilities








Accounts payable


$

5,231



$

4,122

Accruals and other payable



561




1,890

Income tax payable



1,582




1,610

Deferred tax



265




259

Loan from a stockholder



201




262

Total current liabilities



7,840




8,143









Non-current liabilities








Deferred tax liabilities



857




965









Total liabilities



8,697




9,108









Commitments and contingencies



-




-

Equity








Common stock, ($0.001 par value; 75,000,000 shares authorized; 20,478,676 and 20,350,167 shares issued as of June 30, 2011 and December 31, 2010, respectively; 20,452,334 and 20,347,167 shares outstanding as of June 30, 2011 and December 31, 2010, respectively)



21




20

Treasury stock, at cost (26,342 shares and 3,000 share as of June 30, 2011 and December 31, 2010, respectively)



(91)




(12)

Additional paid-in capital



22,751




22,502

Statutory and other reserves



3,590




3,590

Retained earnings



31,799




28,948

Accumulated other comprehensive income



5,582




4,299

Total Company's stockholders' equity



63,652




59,347

Noncontrolling interest



7,911




7,733

Total equity



71,563




67,080









Total liabilities and equity


$

80,260



$

76,188




Jingwei International Limited and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(in US dollars thousands)



Six Months Ended June 30,




2011



2010




(Unaudited)



(Unaudited)


Cash flows from operating activities







Net income


$

2,851



$

3,499


Adjustments to reconcile net income to net cash used in operating activities:









Depreciation and amortization



2,506




1,731


Allowance for doubtful accounts



1,232




285


Share-based compensation expense



172




404


Changes in operating assets and liabilities:









Accounts receivables



(4,361)




(5,803)


Other receivables, prepayments and deposits



(3,501)




1,050


Inventories



(1,742)




(1,965)


Deferred tax asset



(233)




13


Accounts payable



1,047




(1,562)


Accruals and other payables



(559)




326


Income tax payable



(28)




(208)


Net cash used in operating activities



(2,616)




(2,230)


Cash flows from investing activities









Acquisition of property and equipment



(534)




(174)

)

Acquisition of intangible assets



(68)




-


Cash paid for acquisition of Haicom (Note 1)



(771)




-


Net cash used in investing activities



(1,373)




(174)


Cash flows from financing activities









Loan from a stockholder



48






Repayment of stockholder loans



(410)




-


Net cash used in financing activities



(362)




-


Effect of foreign currency translation on cash and cash equivalents



1,277




98


Net decrease in cash and cash equivalents



(3,074)




(2,306)


Cash and cash equivalents - beginning of period



7,519




10,239


Cash and cash equivalents - end of period


$

4,445



$

7,933


Supplemental Disclosure of Cash Flow Information









Income tax paid


$

232



$

351


Interest paid


$

-



$

-





About Jingwei International Limited:

Jingwei International Limited ("Jingwei") has established a leading position in China in data mining, interactive marketing and software services. By leveraging its proprietary database of over 400 million consumer profiles, Jingwei helps companies to more effectively reach their target audiences. To capitalize on China's explosive mobile, Internet and e-Commerce growth, Jingwei has focused on new data mining offerings that encompass interactive marketing, bundled mobility solutions and mobile value added services. The Company's software services include business intelligence, billing, customer relationship management and decision support solutions for Chinese telecom operators and power companies.

Business Risks and Forward-Looking Statements

This report includes forward-looking statements. Generally, the words "believes," "anticipates," "may," "will," "should," "expect," "intend," "estimate," "continue," and similar expressions or the negative thereof or comparable terminology are intended to identify forward-looking statements. Such statements are subject to certain risks and uncertainties, including the matters set forth in this report or other reports or documents we file with the Securities and Exchange Commission from time to time, which could cause actual results or outcomes to differ materially from those projected. Undue reliance should not be placed on these forward-looking statements, which speak only as of the date hereof. We undertake no obligation to update these forward-looking statements.

Note (1):

Net income (non-GAAP)

Net income (non-GAAP) excludes share-based compensation expenses and amortization of acquired intangible assets. We believe that this non-GAAP financial measure provides meaningful supplemental information regarding our performance by excluding certain expenses that may not be indicative of our operating performance. The following table provides the non-GAAP financial measure and the related GAAP measure and provides a reconciliation of the non-GAAP measure to the equivalent GAAP measure.

Q2-2011 Reconciliation of Net Income to Net Income (non-GAAP)

For Three Months and Six Months Ended June 30, 2011


6 Mos. Ended

6 Mos. Ended

3 Mos. Ended

3 Mos. Ended


30-Jun-11

30-Jun-10

30-Jun-11

30-Jun-10

Net income

2,851

3,499

1,907

2,479

Amortization of intangibles assets

2,071

1,540

1,050

776

Share-based compensation expenses

172

404

72

339

Net income (non-GAAP)

5,094

5,443

3,028

3,594




Company Contact:

Jingwei International Limited

Yong Xu or Cao Wei
Tel: +86-755-8631-9430

Email: weicao@jingweicom.com

www.jingweicom.com





SOURCE Jingwei International Limited