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Jinpan International Reports First Quarter 2012 Financial Results

CARLSTADT, N.J., May 11, 2012 /PRNewswire/ -- Jinpan International Ltd (Nasdaq: JST), a leading designer, manufacturer, and distributor of cast resin transformers, today announced the unaudited consolidated financial results for the first quarter ended March 31, 2012.

First Quarter 2012 Results

Net sales for the first quarter were $42.8 million, a 43.1% increase from $29.9 million in the same period last year. The increase in sales was primarily the result of increased international and domestic transformer sales. In the first quarter, domestic sales accounted for $33.8 million, or 79.0% of net sales, compared to $27.8 million, which also represented 93.0% of net sales in the same period last year. Net sales outside of China for the quarter were $9.0 million, or 21% of net sales compared to $2.1 million, or 7.0% of net sales for the same period last year.

The sales of cast resin transformers (excluding those for wind power applications), switchgears and unit substations represented $31.9 million, or 74.5% of net sales in the first quarter, while wind energy products represented $10.9 million, or 25.5% of net sales during this quarter.

Gross profit in the first quarter increased 43.9% year over year to $15.8 million from $11.0 million in the same period last year. First quarter 2012 gross profit margin was 36.9%, compared to 36.7% in the prior year period, and 34.6% in the 2011 fourth quarter.

Selling and administrative expenses in the first quarter were $10.9 million, or 25.5% of net sales, compared to $7.8 million, or 26.0% of net sales in the same period last year. Selling expenses increased in the first quarter as a result of increased sales. Administrative expenses increased due to higher Research and Development expenses and increased salary expenses resulting from the Company's implementation of its expansion plans.

Operating income for the first quarter increased 52.6% to $4.8 million, or 11.3% of net sales, from $3.2 million, or 10.6% of net sales, in the same period last year. Net income for the first quarter increased 44.6% to $4.0 million, or $0.24 per diluted share, from $2.7 million, or $0.17 per diluted share, in the same period last year. First quarter net income as a percentage of net sales was 9.3% compared to 9.2% in the same period last year.

Mr. Zhiyuan Li, Chief Executive Officer of Jinpan, commented, "We experienced strong results in the first quarter of 2012 fueled by domestic and export sales growth. Our international business exceeded our expectations driven by a large number of customized transformers for wind applications. Sales in our domestic business increased 21.6% from the prior year period and are expected to continue to grow in the coming quarters.

While the design and development of customized transformers remains a major priority for Jinpan, the domestic market for standardized transformers also represents a very large opportunity for our business. Our expanded operating capabilities will enable us to have the capacity necessary to compete on quality and price with our competitors in China in the standard transformer market. With our expanding capacity, we now have the ability to go out and make a more aggressive push in this market resulting in greater sales and profits over time.

We expect sales growth to continue in the remaining quarters of the year. Our customer base has expanded by approximately 20% over the past year. At the end of March, our domestic China sales order backlog was $112 million compared to $102 million at the end of December 2011. Jinpan has become a more widely recognized brand name within the cast resin transformer industry, which enables us to participate in a greater number of industrial projects sponsored by private businesses and state-owned enterprises. With quality products, competitive pricing, efficient and growing manufacturing platform, and an expanding customer base, we believe that Jinpan will continue its record of sales and net income growth in 2012."

Balance Sheet

As of March 31, 2012, the Company had $12.6 million in cash and cash equivalents, compared to $24.2 million at December 31, 2011. The Company's accounts receivable on March 31, 2012 totaled $114.4 million, compared to $110.4 million at December 31, 2011. Notes payable in the 2012 first quarter decreased to $2.2 million compared to $13.6 million at the end of December 31, 2011. Total bank loans outstanding at March 31, 2012 increased to $31.6 million as compared to $23.0 million at December 31, 2011.

Financial Outlook
For the full year 2012, the Company currently anticipates net sales growth of 20-25% to $262-$273 million, gross profit margin of 33%-35%, and net income growth of approximately 17-22% to $27.8-$29.0 million.

Conference Call Information
Jinpan's management will host an earnings conference call on May 11, 2012 at 8:30 a.m. U.S. Eastern Time. Listeners may access the call by dialing #1-913-312-0978. A webcast will also be available via A replay of the call will be available through May 25, 2012. Listeners may access the replay by dialing #1-858-384-5517, access code: 4686071.

About Jinpan International Ltd

Jinpan International Ltd. (NASDAQ: JST) 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 ISO14001 certifications for its cast resin transformers. Its principal executive offices are located in Hainan, China and its United States office is based in Carlstadt, New Jersey.

Safe Harbor Provision

This press release contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management's current expectations and observations and involve known and unknown risks, and 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 are listed from time-to-time in our filings with the Securities and Exchange Commission, including, without limitation, our Annual Report on Form 20-F for the period ended December 31, 2011 and our subsequent reports on Form 6-K.

Except as required by law, we are not under any obligation, and expressly disclaim any obligation, to update or alter any forward-looking statements, whether as a result of new information, future events or otherwise.

(Financial Statements on Following Page)

    Jinpan International Limited and Subsidiaries
    Consolidated Statements of Income (unaudited)

                                                 March 31

                                                      2012            2011
                                                      ----            ----
    (In thousands, except per share
     data)                                                  US$             US$

    Net sales                                       42,755          29,882
    Cost of Goods Sold                             (26,993)        (18,925)
                                                   -------         -------
    Gross Margin                                    15,762          10,957

    Operating Expenses
    Selling and administrative                     (10,915)         (7,782)
                                                   -------          ------
    Operating income                                 4,847           3,175

    Interest Expenses                                 (459)           (175)
    Other Income                                       215             283
                                                       ---             ---
    Income before income taxes                       4,603           3,283

    Income taxes                                      (638)           (542)
                                                      ----            ----
    Net income after taxes                           3,965           2,741
                                                     =====           =====

    Earnings per share

    -Basic                                        US$ 0.25         US$0.17
                                                  ========         =======

    -Diluted                                      US$ 0.24         US$0.17
                                                  ========         =======

    Weighted average number of shares

    -Basic                                      16,163,696      16,163,696
                                                ==========      ==========

    -Diluted                                    16,549,619      16,427,141
                                                ==========      ==========

    Jinpan International Limited and Subsidiaries
    Consolidated Balance Sheets (unaudited)
                                                  March 31,         December 31,
                                                              2012                 2011
                                                              ----                 ----
                                                     US$                 US$

    Current assets:

    Cash and cash equivalents                               12,582               24,218
    Restricted Cash                                             20                  322
    Notes receivable                                         9,878               19,114
    Accounts receivable, net                               114,445              110,382
    Inventories, net                                        44,184               36,675
    Prepaid expenses                                        11,930               13,251
    Other receivables                                        5,552                3,878
                                                             -----                -----

    Total current assets                                   198,591              207,840

    Property, plant and
     equipment, net                                         40,135               37,102

    Construction in progress                                 3,494                2,406

    Land use right                                          15,449               15,523
    Intangible asset-Goodwill                               13,384               13,371
    Other assets                                                74                   76
    Deferred tax assets                                      1,029                1,044
                                                             -----                -----

    Total assets                                           272,156              277,362
                                                           =======              =======

    Liabilities and
     Shareholders' Equity

    Current liabilities:

    Short term bank loans                                   30,097               21,426
    Accounts payable                                        21,947               22,833
    Notes Payable                                            2,178               13,611
    Income tax                                               2,797                2,335
    Advance from customers                                  13,823               12,642
    Other Payable                                           15,919               22,072
                                                            ------               ------

    Total current liabilities                               86,761               94,919

    Long Term Loan                                           1,537                1,550
    Shareholders' equity:

    Common stock, US$0.0045 par
    Authorized shares -
    Issued and outstanding
     shares -16,395,456 in 2012
     and 2011                                                   74                   74

    Common Stock, Warrants                                                          854
    Convertible preferred stock,
     US$0.0045 par value:
    Authorized shares -
    Issued and outstanding
     shares - none in 20012                                      -                    -
    and 2011
    Additional paid-in capital                              36,980               36,114
    Reserves                                                12,023               12,023
    Retained earnings                                      114,748              111,915
    Accumulated other
     comprehensive income                                   20,512               20,392
                                                            ------               ------
                                                           184,337              181,372
      Less: Treasure shares at
       cost, common stock-227,036
       in 2012 and  2011                                      (479)                (479)
                                                              ----                 ----
    Total shareholders' equity                             183,858              180,893
                                                           -------              -------

    Total liabilities and
     shareholders' equity                                  272,156              277,362
                                                           =======              =======

    Jinpan International  Ltd
    Consolidated Statement of Cash Flows
    For the Three Months Ended March 31, 2012

                                                                     For the Three Months Ended
                                                                                      March 31
                                                                                            2012                        2011
                                                                                 US$                              US$
                                                                                 ---                              ---
                                                                                                  ( In thousands)

    Operating Activities
          Net Income                                                                       3,965                       2,741
          Adjustments to reconcile net income to
               Net Cash provided by (used in ) operating activities:
               Depreciation                                                                1,183                       1,025
               Deferred Income Tax                                                            16                         (20)
               Provision for doubtful debts                                                  862                         (99)
               Loss/(gain) on disposal of fixed assets                                        (3)                          -
               Stock-based compensation Cost                                                  11                          61
          Changes in operating assets and liabilities
               Restricted Cash                                                               302                          39
               Accounts Receivable                                                        (4,807)                     (1,014)
               Notes Receivable                                                            9,252                      (3,471)
               Inventories                                                                (7,466)                     (8,694)
               Prepaid Expenses                                                            1,334                      (4,170)
               Other Receivable                                                           (1,667)                       (572)
               Accounts Payable                                                             (909)                      4,216
               Notes Payable                                                             (11,441)                     (3,278)
               Income Tax                                                                    459                         142
               Advance From customers                                                      1,167                       2,532
               Other liabilities                                                          (6,243)                      8,324
                                                                                          ------                       -----
    Net Cash provided by ( used in ) operating activities                                (13,985)                     (2,238)
    Investing activities
         Purchases of property, plant and equipment                                       (4,200)                       (941)
         Proceeds from sales of property, plant and equipment                                 27                        (240)
         Payment for construction in progress                                             (1,084)                          -
         L/T Prepaid Lease                                                                    90                          80
                                                                                             ---                         ---
    Net Cash provided by ( used in ) investing activities                                 (5,167)                     (1,101)
    Financing activities
         Proceeds from bank loan                                                          11,820                       1,925
         Repayment of bank loan                                                           (3,189)                        (28)
         Dividend paid                                                                    (1,132)                     (1,132)
                                                                                          ------                      ------
    Net Cash provided by ( used in ) financing activities                                  7,499                         765
    Effect of exchange rate changes on cash                                                   17                         261
                                                                                             ---                         ---
    Net increase/(decrease) in cash and cash equivalents                                 (11,636)                     (2,313)
    Cash and Cash equivalents at beginning of year                                        24,218                      27,527
                                                                                          ------                      ------
    Cash and Cash equivalents at end of year                                              12,582                      25,214
                                                                                          ======                      ======

    Interest paid                                                                            340                         199
    Income Tax paid                                                                          164                         419

SOURCE Jinpan International Ltd

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