CARLSTADT, N.J., July 9, 2012 /PRNewswire/ -- Jinpan International Ltd. (Nasdaq: JST), a leading designer, manufacturer, and distributor of cast resin transformers, today announced preliminary financial results for the second quarter ended June 30, 2012.
The Company reported preliminary unaudited net sales for the second quarter of 2012 of approximately US$55.6 million, a 4.6% decrease from US$58.3 million for the same period last year. Domestic sales accounted for US$50.8 million of revenue while international sales represented US$4.8 million, compared to US$46.1 million of domestic sales and US$12.2 million of international sales in the second quarter of 2011. Preliminary second quarter gross profit margin is expected to be approximately $14.5 million or 26% of net sales, compared to US$22.2 million, or 38.1% in the prior year period. Preliminary second quarter net income and diluted earnings per share are expected to be approximately US$2.5 million and US$0.15, respectively.
In light of the preliminary second quarter results, management is adjusting its full year guidance. Management expects that -
(i) the Company's net sales for 2012 to be US$ 219 to US$ 230 million or 0% to 5% growth over net sales in 2011 of US$ 219 million;(ii) the Company's gross profit margin for 2012 is expected to be approximately 33% of net sales, compared to gross profit margin in 2011 of 36.7% of net sales; and (iii) the Company's net income for 2012 is expected to experience a decrease of 15% to 20%, compared to US$ 23.8 million in 2011. Mr. Zhiyuan Li, Chief Executive Officer of Jinpan, commented, "We have experienced a larger than expected slowdown in the second quarter due to a change in the design by our primary OEM customer of their wind power product(s), which resulted in a decrease in our international sales in the second quarter. Currently, we are waiting for our customer to provide new specifications, so we can make corresponding design changes to our cast resin transformer products and integrate our transformers into their newly designed wind power product(s). The time that our customer requires for the new design is longer than we had expected. We continue to work closely with our customer on product development and integration. Even though we experienced slower sales to our primary OEM customer, we do expect a pick up in orders from other OEM customers in the second half of 2012. "We also experienced some weakness in domestic order flows in the second quarter due to a softer economic environment in China. We saw a slow-down in total industrial project activity in the second quarter, which resulted in fewer customized transformer sales in the second quarter. The majority of our domestic sales in the second quarter came from standard product orders. While industrial activity in China appears to have slowed, we are actively working on a large number of projects that require completion and we continue to receive quality, higher margin orders for large infrastructure projects." "We believe the second half of 2012 will be stronger for our business than the first half. We have backlog of approximately $113 million at the end of June 2012 and believe that approximately 80% to 90% of the backlog will be shipped in 2012. Despite the challenges stemming from a softer broader economic environment, we remain confident in our long term growth trajectory and will continue working towards the goal of developing Jinpan into a leading, world class cast resin transformer manufacturer." Jinpan plans to release its second quarter earnings results and conduct an earnings conference call in mid-August. Specific information related to the date and time of the call will be released at a later date.