Jingwei International (JNGW.OB)
F4Q09 Earnings Call
April 1, 2010
Rick Luk - Chief Executive Officer
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Good Morning everyone and welcome to the Jingwei International fourth quarter and full year 2009 conference call. Today’s call is being recorded.
Before we continue, please bear with me as I take you through the Company’s Safe Harbor policy. Certain of the statements made in this conference call 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. 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 and uncertainties, all of of which are described in the Company's filings with the SEC.
Jingwei does not undertake any obligation to update forward-looking statements, except as required by applicable law.
Today on the call, Rick Luk, CEO, and Yong Yu, CFO of Jingwei, will review key highlights from fourth quarter and for the full year of 2009 and provide a business update of the Company.
Now, allow me to turn the call over to Mr. Rick Luk. Mr. Luk?
Ladies and gentlemen, thank you for dialing into our fourth quarter and full year 2009 results conference call.
First, I'd like to take a moment to thank all of our colleagues for their hard work and commitment this year. I'd also like to thank our advisors and investors for their ongoing enthusiasm and support. We look forward to working with all of you as we move forward.
All in all, 2009 has been a difficult and trying year for Jingwei as we suffered from some very disappointing results in the first two quarters - largely as result of the general slow down in global economy following the financial tsunami that took the world by surprise in late 2008; and China, as you know, was no exception in the aftermath of the seriousness of its impact to the macro economy.
Like many others in the industry, weathering through the rough ride from the fourth quarter of 2008 into 2009, the management team faced numerous challenges, but was able to keep the right focus by taking appropriate actions to contain costs and re-vector investment priorities to insure the Company maintained a healthy balance sheet and was able to regain growth momentum as the economy recovered.
As you might recall from our quarterly reported revenue and earnings profile last year, third quarter marked the turning point of our business performance in 2009 as the Chinese government continued to roll out stimulus programs to increase consumer spending and the long-awaited 3G was formally launched in China in the beginning of the year; while the general economy also began to show signs of recovery. These factors have created opportunities for Jingwei as many of the businesses in China increased their focus again on effective ways to increase sales and maximizing profits by understanding and targeting the right customers. In the case of the telecom industry, in which Jingwei has been a strong player, the broad adoption of mobile advertising and marketing targeting the consumers, the rollout of 3G and the need for new infrastructure to support logically created significant new opportunities for our data mining, interactive marketing and our software services business.
Capitalizing on these opportunities, fourth quarter of 2009 was both exciting and stimulating for the Company; as we continued to build on the momentum established in the third quarter and were pleased to end the quarter with revenue increase of 54% to $13.5 million from $8.8 million in the third quarter; while net income increased 112% sequentially to $3.1 million from $1.5 million.
Compared to the same quarter last year, fourth quarter revenue increased 182% to $13.5 million from $4.8 million; while net income increased 138% to 3.1 million from $1.3 million and, Gross Margin was $5 million, or 37% compared to $1.8 million, or 39% in 2008. Diluted earnings per share was $0.18 vs. $0.08 last year.
For the full year, revenue increased 9% to $30.3 million compared to $27.9 million despite a significant drop in the first two quarters. Net income, however, decreased 34% to $6.0 million from $9.0 million and Gross margin was $11.4 million, or 38% compared to $13.9 million, or 50% for the same period last year.
Our press release is available on our website and includes our financial tables and the key facts about our fourth quarter and full year financial performance in 2009. Our 10-K was filed yesterday with the SEC.
Instead of going through our results line by line, I’d like to use this time to give you a brief overview of our business in the fourth quarter and what our plan is going forward and why, I believe, our Company is well positioned to capitalize on the new opportunities presented to us during this challenging economic environment.
Going forward, we believe there are three primary drivers behind our business growth: (First) is the growth of consumer spending and the broad adoption of data mining and interactive marketing services for business enterprises targeting the consumers across a broad sector of industries, (second) is the growth in the use of mobile Internet in e-Commerce propelled by the full deployment of 3G in China; and (thirdly) there are major telecom and government sponsored power industry infrastructure upgrade programs that require new billing, OSS, BSS and software system solutions.