VanceInfo Technologies Inc.(ADR) : VanceInfo Announces Second Quarter 2012 Financial Results08/10/2012| 07:30am US/Eastern
 Recommend:
BEIJING, Aug.10, 2012 /PRNewswire-Asia/ --
VanceInfo Technologies Inc. (NYSE: VIT)
("VanceInfo" or the "Company"), an IT
service provider and one of the leading offshore software
development companies in China, today reported
its unaudited financial results for the second quarter
ended June 30, 2012.
Second Quarter 2012 Financial and Operating Highlights
-
Net revenues for the second quarter of 2012 increased to
$94.7 million, up 38.8% from $68.2
millionfor the second quarter of 2011.
-
Net revenues from the Consulting and Solutions business
increased to $11.7 million, up 112.1% over
the same quarter last year.
-
Net revenues from the BFSI sector were $15.4
million, up 103.0% from $7.6
millionin the second quarter of 2011.
-
Diluted earnings per share ("EPS") and non-GAAP
diluted EPS(1) were $0.11and
$0.19, respectively, for the second quarter
of 2012.
-
Employees totaled 15,605, including 14,014 billable
professionals, as of June 30, 2012.
"We are delighted to report another record quarter of
revenues," said Chris Chen, Chairman and
Chief Executive Officer of VanceInfo. "In spite of the
sluggish macroeconomic environment, we are still seeing
robust demand for our services. Our strategic investments
in consulting and solutions services, especially in BFSI
and Travel & Transportation verticals, have yielded
impressive results in new client engagements and growing
pipelines. With our enhanced business mix and service
model, we will continue to deliver quality growth with
gradually recovering margins."
Second Quarter 2012 Financial Results
Due to the seasonal nature of its business, the Company
presents its financial analysis on a year-over-year basis,
comparing the second quarter of 2012 and the second quarter
of 2011 as in the following paragraphs.
Net Revenues
Net revenues were $94.7 millionin the second
quarter of 2012, up 38.8% from $68.2
millionfor the second quarter of 2011. The increase
in net revenues was attributable to the demand from most of
the markets we serve, except for the European market.
Net Revenues by Service Lines
The Company provides four broad sets of services: R&D
Outsourcing Services, Consulting and Solutions Services,
Application Management Services and Other Solutions &
Services. R&D Outsourcing Services consist of the research
& development service line and the globalization &
localization service line. Consulting and Solutions
Services consist of consulting, business intelligence, ERP
implementation and industry-specific solutions. Application
Management Services consist of application development and
maintenance ("ADM") and quality assurance and
testing services. Other Solutions & Services consist of
business process outsourcing ("BPO") and system
integration ("SI") services.
Consistent with the Company's growth strategy, net
revenues from Consulting and Solutions Services grew 112.1%
over the same period in 2011 and contributed 12.3% of total
net revenues in the second quarter of 2012. Net revenues
from Application Management Services increased 42.7% from
the second quarter of 2011, accounting for 34.1% of total
net revenues in the second quarter of 2012.
|
Three Months Ended
June 30, 2012
|
Three Months Ended
June 30, 2011
|
|
(in thousands of US$, except
percentages)
|
|
R&D Outsourcing Services
|
46,436
|
49.0%
|
36,920
|
54.1%
|
|
Consulting and Solutions Services
|
11,681
|
12.3%
|
5,508
|
8.1%
|
|
Application Management Services
|
32,304
|
34.1%
|
22,642
|
33.2%
|
|
Other Solutions & Services
|
4,322
|
4.6%
|
3,177
|
4.6%
|
|
Total net revenues
|
94,743
|
100.0%
|
68,247
|
100.0%
|
Net Revenues by Geographic Markets
Based on the location of our clients' headquarters, net
revenues from clients headquartered in Greater
Chinawere $45.6 million, or 48.2% of
total net revenues in the second quarter of 2012, followed
by 34.5% from clients headquartered in the United
States, 10.1% in Europeand 4.7% in
Japan.
Measuring the Company's revenues by geographic markets
based on the location of the contract signing entities,
Greater Chinaaccounted for 66.7% of total net
revenues in the second quarter of 2012, while the
United Statesaccounted for 26.8% in the same period.
Net Revenues by Industries
The Company classifies its clients into four broad industry
segments: Telecommunications ("Telecom"), High
Technology ("High Tech"), Banking, Financial
Services and Insurance ("BFSI"), and other
industry segments including manufacturing, retail,
distribution, travel and transportation and public
services, etc. ("Others").
|
Three Months Ended
June 30, 2012
|
Three Months Ended
June 30, 2011
|
|
(in thousands of US$, except
percentages)
|
|
Telecom
|
34,406
|
36.3%
|
28,527
|
41.8%
|
|
High Tech
|
33,065
|
34.9%
|
22,644
|
33.2%
|
|
BFSI
|
15,413
|
16.3%
|
7,594
|
11.1%
|
|
Others
|
11,859
|
12.5%
|
9,482
|
13.9%
|
|
Total net revenues
|
94,743
|
100.0%
|
68,247
|
100.0%
|
Largest Clients
Revenues from the top five clients totaled $50.5
millionor 53.3% of total net revenues in the second
quarter of 2012, compared to 53.5% in the second quarter of
2011.
Gross Profit and Gross Margin
Gross profit in the second quarter of 2012 was $30.9
million, an increase of 24.4% from $24.8
millionin the second quarter of 2011. Gross margin
was 32.6% in the second quarter of 2012, compared to 36.4%
in the second quarter of 2011. The lower gross margin in
the second quarter of 2012 was due to the negative impact
from certain large customers as well as wage inflation in
excess of billing rate increase as compared to the same
period in 2011.
Operating Expenses
Selling, general and administrative expenses totaled
$26.0 millionfor the second quarter of 2012,
up 44.8% from $18.0 milliona year ago. The
increase in selling, general and administrative expenses
was primarily due to higher business development costs and
staff expenses over the same period of last year.
Operating Income and Operating Margin
As a result of increased costs and expenses as described
above, operating income in the second quarter of 2012 was
$5.5 million, compared to $7.7
millionin the second quarter of 2011. Non-GAAP
operating income[1] in the second quarter of 2012 was
$9.1 million, compared to $10.0
millionin the same period a year ago. Non-GAAP
operating margin[1]was 9.6% in the second quarter of 2012,
compared to 14.7% in the second quarter of 2011.
Provision for Income Taxes
The provision for income taxes was $0.8
millionin the second quarter of 2012, compared to
$0.9 millionin the second quarter of 2011. The
effective income tax rate was 14.9%, compared to 10.7% in
the same period of 2011. The higher effective income tax
rate reflected expiration of tax holiday at one of our
major operating subsidies in China.
Net Income and EPS
Net income in the second quarter of 2012 was $4.7
million, compared to $7.1 millionin the
second quarter of 2011. Non-GAAP net income[1]was
$8.2 millionin the second quarter of 2012,
compared to $9.5 millionin the same period a
year ago. Non-GAAP net margin[1] was 8.6% in the second
quarter of 2012, compared with 13.9% in the year-ago
quarter.
For the second quarter of 2012, diluted EPS and Non-GAAP
diluted EPS[1] were $0.11and
$0.19, respectively, based on 43.9 million
total ADS-equivalent average shares outstanding, compared
with $0.16and $0.21,
respectively, for the second quarter of 2011.
The non-GAAP measures and related reconciliations to GAAP
measures are described in the accompanying section of
"About Non-GAAP Financial Measures" and the
accompanying table of "Reconciliations of Non-GAAP
Financial Measures to Comparable GAAP Measures."
Cash and Cash Flow
As of June 30, 2012, VanceInfo had cash and
cash equivalents, restricted cash, term deposits and
short-term investments totaling $81.6 million.
Operating cash flow in the second quarter of 2012 was a net
outflow of approximately $5.9 million.
Investing cash flow in the second quarter of 2012 included
a $2.5 millioncapital expenditure in the
construction of our new headquarters.
Days sales outstanding ("DSO") was 132 days for
the second quarter of 2012, which was the same as the first
quarter of 2012. DSO was 128 days for the trailing twelve
months ended June 30, 2012, compared with 127
days the trailing twelve months ended March 31,
2012.
DSO was calculated by dividing average accounts receivable,
net of average deferred revenues, by the period's gross
revenues before business tax, and multiplying by the number
of days in the corresponding period.
|
Three Months Ended
|
Twelve Months Ended
|
|
June 30, 2012
|
March 31, 2012
|
June 30, 2012
|
March 31, 2012
|
|
( in thousands of US$)
|
|
Gross revenues before business tax
|
96,934
|
88,155
|
347,319
|
320,048
|
|
Average deferred revenues
|
4,332
|
4,214
|
3,679
|
3,298
|
|
Note: Deferred revenues include advances from
clients. Twelve-month average amounts are
calculated based on the respective five quarter-end
balances.
|
First Half 2012 Financial Results
Net Revenues
Net revenues for the first half of 2012 were $180.9
million, up 43.9% from $125.7 millionin
the first half of 2011.
Net Revenues by Service Lines
|
Six Months Ended
June 30, 2012
|
Six Months Ended
June 30, 2011
|
|
(in thousands of US$, except
percentages)
|
|
R&D Outsourcing Services
|
89,915
|
49.7%
|
70,010
|
55.7%
|
|
Consulting and Solutions Services
|
21,441
|
11.9%
|
10,175
|
8.1%
|
|
Application Management Services
|
61,788
|
34.2%
|
41,281
|
32.8%
|
|
Other Solutions & Services
|
7,709
|
4.2%
|
4,189
|
3.4%
|
|
Total net revenues
|
180,853
|
100.0%
|
125,655
|
100.0%
|
Net Revenues by Geographic Markets
Based on the location of our clients' headquarters,
Greater Chinais the Company's largest
geographic market, accounting for $ 85.8
millionor 47.5% of the net revenues in the first
half of 2012, followed by 34.8% from clients headquartered
in the United States, 11.2% in
Europeand 4.3% in Japan.
Measuring the Company's revenues by geographic markets
based on the location of the contract signing entities,
rather than the location of the clients' headquarters,
Greater Chinaaccounted for 66.9% of net
revenues in the first half of 2012, while the United
Statesaccounted for 26.2% in the same period.
Net Revenues by Industries
|
Six Months Ended
June 30, 2012
|
Six Months Ended
June 30, 2011
|
|
(in thousands of US$, except
percentages)
|
|
Telecom
|
65,589
|
36.3%
|
53,342
|
42.4%
|
|
High Tech
|
63,102
|
34.9%
|
41,614
|
33.1%
|
|
BFSI
|
29,289
|
16.2%
|
14,016
|
11.2%
|
|
Others
|
22,873
|
12.6%
|
16,683
|
13.3%
|
|
Total net revenues
|
180,853
|
100.0%
|
125,655
|
100.0%
|
Largest Clients
Revenues from the top five clients totaled 53.4% of the
Company's net revenues in the first half of 2012,
compared to 54.7% in the same period in 2011.
Gross Profit and Gross Margin
Gross profit for the first half of 2012 was $58.0
million, an increase of 25.1% from $46.3
millionin the first half of 2011. Gross margin was
32.0% in the first half of 2012, compared to 36.9% in the
prior year period. Gross profit includes $1.3
millionand $1.5 millionof government
subsidies in the first half of 2012 and 2011, respectively.
Operating Income and Operating Margin
Operating income in the first half of 2012 was $8.7
million, compared with $14.5 millionin
the same period last year. Non-GAAP operating income[1] in
the first half of 2012 was $15.8 million,
compared with $19.0 millionin the same period
last year. Non-GAAP operating margin[1] was 8.7% in the
first half of 2012, compared to 15.1% in the year-ago
period.
Net Income and EPS
Net income for the first half of 2012 was $8.0
million, compared to $14.1 millionfor
the same period of 2011. Non-GAAP net income[1] was
$15.1 millionfor the first half of 2012,
compared with $18.6 milliona year ago.
Non-GAAP net margin[1] was 8.4%, compared with 14.8% in the
first half of 2011. Diluted EPS for the first half of 2012
was $0.18, compared to $0.31in
the year-ago period. Non-GAAP diluted EPS[1] was
$0.34for the first half of 2012, compared to
$0.40for the first half of 2011.
Recent Developments
Option Amendment Program
In July 2012, the board of directors of the
Company approved an option amendment program. Certain
previously granted options were amended to have a lower
exercise price and a new vesting schedule determined by
adding 12 months to each vesting date under the amended
options' original vesting schedule. In addition, the
amended options will vest no sooner than six months after
the amendment date. The modification charge of the
amendment is estimated to be under $3.5
million, which will be recognized over the vesting
periods ranging from six months to four years.
Outlook for the Third Quarter and Full Year 2012
For the third quarter of 2012, the Company expects:
-
Third quarter 2012 net revenues to be between $95
million and $97 million, representing an increase
between 35% and 38% from the corresponding period in
2011.
-
Third quarter 2012 non-GAAP diluted EPS[1]to be between
$0.18 and $0.20, based on 44.3 million total
ADS-equivalent average shares outstanding. The EPS
outlook reflects the near-term negative impact from a
large European client's recent downsizing and a major
Chinese customer forming a joint venture with one of our
competitors.
For the full year of 2012:
-
The Company raised its guidance and expects 2012 net
revenues to be between $372 million and $376
million, representing a growth between 31% and 33%
from 2011.
-
The Company revised its original 2012 non-GAAP diluted
EPS[1] guidance to $0.75 to $0.81, excluding
the merger transaction costs, based on 44.2 million total
ADS-equivalent average shares outstanding. The reduced
non-GAAP diluted EPS guidance reflects the near-term
negative impact from the recent events with two large
customers as mentioned above.
-
The EPS outlook assumes an effective income tax rate of
14% to 16%.
Conference Call
The Company will host a corresponding conference call and
live webcast to discuss the results at 7:30 AM
Eastern Daylight Time(EDT) on Friday, August
10, 2012(7:30 PMBeijing/Hong
Kongtime). Please dial-in five minutes prior to the
call to register and receive further instruction.
The dial-in details for the live conference call are as
below:
- U.S. Toll Free Dial-in Number: + 1.866.519.4004
- International Dial-in Number: +65.6723.9381
- Hong Kong Dial-in Number: +852.2475.0994
Passcode: 11975262
The conference call will be available live via webcast on
the Investors section of VanceInfo Technologies website at
http://ir.vanceinfo.com. The
archive replay will be available on VanceInfo's website
shortly after the call.
A dial-in replay of the conference call will be available
until August 18, 2012:
- U.S. Toll Free Dial-in Number: +1.866.214.5335
- International Dial-in Number: +61.2.8235.5000
Passcode: 11975262
About VanceInfo
VanceInfo Technologies Inc. is an IT service provider and
one of the leading offshore software development companies
in China.
The Company ranked number one among Chinese offshore
software development service providers for the North
American and European markets as measured by 2011 revenues,
according to International Data Corporation (IDC). This
marks the fifth consecutive year that VanceInfo has been
ranked number one by IDC in this category.
VanceInfo's comprehensive range of IT services includes
R&D Outsourcing Services, Consulting and Solutions
Services, Application Management Services and Other
Solutions & Services. VanceInfo provides these services
primarily to corporations headquartered in Greater
China, the United States,
Europeand Japan, targeting
high-growth industries such as telecommunications,
technology, financial services, travel and transportation
services, manufacturing, retail and distribution.
For more information about VanceInfo, please visit www.vanceinfo.com
Safe Harbor
This news release includes statements that may constitute
forward-looking statements made pursuant to the safe harbor
provisions of the U.S. Private Securities Litigation Reform
Act of 1995. These forward-looking statements can be
identified by terminology such as will, should, expects,
anticipates, future, intends, plans, believes, estimates,
and similar statements. Among other things, the
management's quotations and "Outlook for the Third
Quarter and Full Year 2012" contain forward-looking
statements. Such statements are subject to risks and
uncertainties that could cause actual results to differ
materially from those projected. Potential risks and
uncertainties include, but are not limited to, the
company's dependence on a limited number of clients for
a significant portion of its revenues, uncertainty relating
to its clients' forming or plan to form joint venture
with the Company's clients, the economic slowdown in
its principal geographic markets, the quality and portfolio
of its service lines and industry expertise, and the
availability of a large talent pool in
Chinaand inflation of qualified
professionals' wages, as well as the PRC
government's investment in infrastructure construction
and adoption of various incentives in the IT service
industry. Further information regarding these and
other risks is included in VanceInfo's filings with the
U.S. Securities and Exchange Commission. All
information provided in this news release and in the
attachments is as of August 102012, and
VanceInfo does not undertake any obligation to update any
forward-looking statement as a result of new information,
future events or otherwise, except as required under
applicable law.
About Non-GAAP Financial Measures
To supplement VanceInfo's consolidated financial
results presented in accordance with GAAP, VanceInfo uses
the following measures defined as non-GAAP financial
measures by the SEC: income from operations, net income and
diluted EPS excluding share-based compensation expense,
amortization of acquired intangible assets and land use
right, and change in fair value of contingent consideration
payable for business acquisition. The non-GAAP income from
operations, net income and diluted EPS for prior periods
have been reclassified so that the presentations are
consistent. The presentation of these non-GAAP financial
measures is not intended to be considered in isolation or
as a substitute for the financial information prepared and
presented in accordance with GAAP. For more information on
these non-GAAP financial measures, please see the tables
captioned "Reconciliations of Non-GAAP Financial
Measures to Comparable GAAP Measures" and
"Reconciliations of Forward-Looking Guidance for
Non-GAAP Financial Measures to Comparable GAAP
Measures" set forth at the end of this release.
VanceInfo believes that these non-GAAP financial measures
provide meaningful supplemental information regarding its
performance by excluding certain expenses and expenditures
that may not be indicative of its operating performance.
The Company believes that both management and investors
benefit from referring to these non-GAAP financial measures
in assessing the Company's performance and when
planning and forecasting future periods. A limitation of
using non-GAAP net income and diluted EPS is that these
non-GAAP measures exclude the share-based compensation
charges, amortization of acquired intangible assets and
land use right, and change in fair value of contingent
consideration payable for business acquisition that have
been and will continue to be, for the foreseeable future, a
significant recurring expense in the business. Management
compensates for these limitations by providing specific
information regarding the GAAP amounts excluded from each
non-GAAP measure. The accompanying tables have more details
on the reconciliations between GAAP financial measures that
are comparable to non-GAAP financial measures. The
reconciliations of the forward-looking guidance for
non-GAAP financial measures to the most directly comparable
GAAP financial measures in the accompanying table include
all information reasonably available to VanceInfo at the
date of this press release. The table includes adjustments
that the Company can reasonably predict.
|
(1) Non-GAAP income from operations, net
income, diluted EPS and related margins exclude
share-based compensation expense, amortization of
acquired intangible assets and land use right, and
change in fair value of contingent consideration
payable for business acquisition. The non-GAAP
measures and related reconciliations to GAAP
measures are described in the accompanying section
of "About Non-GAAP Financial Measures"
and the accompanying tables of
"Reconciliations of Non-GAAP Financial
Measures to Comparable GAAP Measures" and
"Reconciliations of Forward-Looking Guidance
for Non-GAAP Financial Measures to Comparable GAAP
Measures" at the end of the press
release.
|
|
VANCEINFO TECHNOLOGIES INC.
|
|
Condensed Consolidated Balance Sheets
(Unaudited)
|
|
(US dollars in thousands, except share
data)
|
|
|
June 30,
|
|
December 31,
|
|
2012
|
|
2011
|
|
Assets
|
|
|
|
|
Current assets
|
|
|
|
|
Cash and cash equivalents
|
76,432
|
|
96,170
|
|
Term deposits
|
-
|
|
5,000
|
|
Restricted cash
|
3,148
|
|
1,587
|
|
Held-to-maturity securities-current
|
2,007
|
|
9,401
|
|
Accounts receivable, net of allowance for doubtful
accounts of $2,962
as of June 30, 2012 and $2,200
as of December 31, 2011, respectively
|
151,567
|
|
126,389
|
|
Other current assets
|
20,288
|
|
16,042
|
|
Total current assets
|
253,442
|
|
254,589
|
|
|
|
|
|
Property and equipment, net
|
39,725
|
|
36,580
|
|
Long-term investment
|
212
|
|
-
|
|
Goodwill and other intangible assets
|
75,339
|
|
67,807
|
|
Land use right
|
23,449
|
|
23,884
|
|
Other long-term assets
|
3,574
|
|
3,036
|
|
Total assets
|
395,741
|
|
385,896
|
|
|
|
|
|
Liabilities and equity
|
|
|
|
|
Current liabilities
|
63,723
|
|
66,438
|
|
Non-current liabilities
|
14,394
|
|
16,014
|
|
Total liabilities
|
78,117
|
|
82,452
|
|
|
|
|
|
Equity (a)
|
317,624
|
|
303,444
|
|
|
|
|
|
Total liabilities and equity
|
395,741
|
|
385,896
|
|
|
|
|
|
|
|
|
|
Note:
|
|
|
|
|
(a) As of June 30, 2012, there were 44,714,963 ordinary shares issued and 42,320,390 ordinary shares outstanding,
|
|
excluding 2,394,573 treasury stocks in the
form of ADSs repurchased from the open
market.
|
|
VANCEINFO TECHNOLOGIES INC.
|
|
Condensed Consolidated Statements of
Comprehensive Income (Unaudited)
|
|
(US dollars in thousands, except per share
data)
|
|
|
|
|
|
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
|
|
|
|
|
|
|
|
Net revenues
|
94,743
|
|
68,247
|
|
180,853
|
|
125,655
|
|
Cost of revenues (a)
|
(63,831)
|
|
(43,399)
|
|
(122,892)
|
|
(79,308)
|
|
Gross profit
|
30,912
|
|
24,848
|
|
57,961
|
|
46,347
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses
(a)
|
(25,993)
|
|
(17,954)
|
|
(50,333)
|
|
(33,713)
|
|
Change in fair value of contingent consideration payable for business
acquisition
|
173
|
|
513
|
|
84
|
|
602
|
|
Other operating income
|
449
|
|
278
|
|
951
|
|
1,230
|
|
Income from operations
|
5,541
|
|
7,685
|
|
8,663
|
|
14,466
|
|
Interest income,net
|
423
|
|
669
|
|
952
|
|
1,136
|
|
Exchange difference
|
(481)
|
|
(346)
|
|
(118)
|
|
(330)
|
|
Gain on re-measurement of fair value of
noncontrolling equity
investment in connection with business acquisition
|
-
|
|
-
|
|
-
|
|
514
|
|
Income before income taxes and earnings in
equity method
investment
|
5,483
|
|
8,008
|
|
9,497
|
|
15,786
|
|
Provision for income taxes
|
(816)
|
|
(856)
|
|
(1,514)
|
|
(1,688)
|
|
Income before earnings in equity method
investment
|
4,667
|
|
7,152
|
|
7,983
|
|
14,098
|
|
Earnings(Loss)earnings in equity method
investment
|
15
|
|
(15)
|
|
31
|
|
(35)
|
|
Net income
|
4,682
|
|
7,137
|
|
8,014
|
|
14,063
|
|
Income attributable to VanceInfo Technologies
Inc. shareholders
|
4,682
|
|
7,137
|
|
8,014
|
|
14,063
|
|
Earnings per share
|
|
|
|
|
|
|
|
|
Basic - ordinary shares
|
0.11
|
|
0.16
|
|
0.19
|
|
0.32
|
|
Diluted - ordinary shares
|
0.11
|
|
0.16
|
|
0.18
|
|
0.31
|
|
|
|
|
|
|
|
|
|
Net income
|
4,682
|
|
7,137
|
|
8,014
|
|
14,063
|
|
Other comprehensive income, net of tax
|
(1,824)
|
|
2,297
|
|
(1,544)
|
|
3,510
|
|
Comprehensive income
|
2,858
|
|
9,434
|
|
6,470
|
|
17,573
|
|
Comprehensive income attributable to
VanceInfo Technologies Inc.
Shareholders
|
2,858
|
|
9,434
|
|
6,470
|
|
17,573
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding (in
thousands)
|
|
|
|
|
|
|
|
|
Basic - ordinary shares
|
42,358
|
|
43,687
|
|
42,211
|
|
43,754
|
|
Diluted - ordinary shares
|
43,934
|
|
45,827
|
|
43,904
|
|
45,993
|
|
|
|
|
|
|
|
|
|
Note:
|
|
|
|
|
|
|
|
|
(a) Depreciation and amortization
expenses included in cost of revenues and selling,
general and administrative expenses totaled $3,523
and $2,463 for the three months ended June 30, 2012
and 2011, respectively and $6,592 and $4,611 for
the six months ended June 30,2012 and
2011,respectively.
|
|
Share-base compensation included in cost of
revenues and selling, general and administrative
expenses totaled $2,155 and $2,118 for the three
months ended June 30, 2012 and 2011, respectively
and $4,537 and $3,862 for the six months ended June
30,2012 and 2011,respectively.
|
|
VANCEINFO TECHNOLOGIES INC.
|
|
Condensed Consolidated Statements of Cash
Flow (Unaudited)
|
|
(US dollars in thousands)
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
Cash flows from operating
activities:
|
|
|
|
|
|
|
|
|
Net income
|
4,682
|
|
7,137
|
|
8,014
|
|
14,063
|
|
Adjustments to reconcile net income to net cash provided by
|
|
|
|
|
|
|
|
|
operating activities:
|
|
|
|
|
|
|
|
|
Share-based compensation
|
2,155
|
|
2,118
|
|
4,537
|
|
3,862
|
|
Depreciation and amortization of property and
equipment
|
1,995
|
|
1,719
|
|
3,951
|
|
3,373
|
|
Amortization of intangible
assets
|
1,408
|
|
744
|
|
2,400
|
|
1,238
|
|
Amortization of land use right
|
120
|
|
-
|
|
241
|
|
-
|
|
Loss(gain) on foreign currency exchange
forward contracts
transfer to statements of
operations
|
154
|
|
247
|
|
(79)
|
|
238
|
|
Loss (gain) on disposal of property and
equipment
|
4
|
|
4
|
|
14
|
|
7
|
|
Allowance for doubtful accounts
|
583
|
|
(348)
|
|
1,194
|
|
(294)
|
|
Change in fair value of contingent
consideration payable for
acquisition
|
(173)
|
|
(513)
|
|
(84)
|
|
(602)
|
|
(Earnings) loss in equity method
investment
|
(15)
|
|
15
|
|
(31)
|
|
35
|
|
Gain on remeasurement of fair value of
noncontrolling
equity investment in connection with
business acquisition
|
-
|
|
-
|
|
-
|
|
(514)
|
|
Changes in operating assets and
liabilities
|
|
|
|
|
|
|
|
|
Rental deposits and prepaid
rentals
|
(212)
|
|
(105)
|
|
(315)
|
|
(154)
|
|
Accounts receivable
|
(15,819)
|
|
(5,652)
|
|
(26,741)
|
|
(15,880)
|
|
Prepaid expenses and other current
assets
|
1,080
|
|
(1)
|
|
48
|
|
(892)
|
|
Deferred income tax
assets-current
|
142
|
|
(242)
|
|
959
|
|
727
|
|
Deferred income tax assets-non
current
|
(11)
|
|
26
|
|
(11)
|
|
19
|
|
Other long term assets
|
53
|
|
-
|
|
(238)
|
|
-
|
|
Accounts payable
|
95
|
|
(149)
|
|
(1,547)
|
|
(588)
|
|
Deferred revenue
|
(545)
|
|
(135)
|
|
65
|
|
(399)
|
|
Accrued expenses and other
payables
|
152
|
|
3,745
|
|
(6,518)
|
|
(1,526)
|
|
Payment for change in fair value of
contingent consideration
|
(87)
|
|
-
|
|
(87)
|
|
-
|
|
Income tax payable
|
(1,311)
|
|
1,190
|
|
(1,985)
|
|
289
|
|
Deferred income
|
(119)
|
|
(72)
|
|
(239)
|
|
640
|
|
Deferred income tax liability-non
current
|
(243)
|
|
(118)
|
|
(430)
|
|
(209)
|
|
Net cash (used in) provided by operating
activities
|
(5,912)
|
|
9,610
|
|
(16,882)
|
|
3,433
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
VANCEINFO TECHNOLOGIES INC.
|
|
Condensed Consolidated Statements of Cash
Flow (Unaudited)
|
|
(US dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
|
|
2012
|
|
2011
|
|
2012
|
|
2010
|
|
Cash flows from investing
activities
|
|
|
|
|
|
|
|
|
Purchase of property and
equipment
|
(3,076)
|
|
(2,190)
|
|
(4,411)
|
|
(3,580)
|
|
Payment for construction in
progress
|
(2,492)
|
|
-
|
|
(8,439)
|
|
|
|
Consideration paid for business
acquisitions
|
(91)
|
|
(7,322)
|
|
(694)
|
|
(9,086)
|
|
Cash received upon maturity of term
deposit
|
-
|
|
-
|
|
5,000
|
|
5,000
|
|
Purchase of term deposit
|
-
|
|
-
|
|
-
|
|
(5,000)
|
|
Cash received upon maturity of restricted
cash
|
-
|
|
231
|
|
-
|
|
231
|
|
Restricted cash
|
-
|
|
-
|
|
(1,584)
|
|
-
|
|
Purchase of non-current investment -
held-to-maturity
|
-
|
|
-
|
|
-
|
|
(6,079)
|
|
Purchase of current investment -
held-to-maturity
|
-
|
|
(2,097)
|
|
-
|
|
(5,253)
|
|
Proceeds from maturity of investments -
held-to-maturity
|
7,250
|
|
7,272
|
|
7,250
|
|
8,293
|
|
Proceeds from disposal of property and
equipment
|
5
|
|
1
|
|
12
|
|
1
|
|
Net cash provided by (used in) investing
activities
|
1,596
|
|
(4,105)
|
|
(2,866)
|
|
(15,473)
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing
activities
|
|
|
|
|
|
|
|
|
Proceeds from exercise of
options
|
386
|
|
381
|
|
1,467
|
|
2,804
|
|
Payment for issuance costs of ordinary shares
upon
share offering in 2011
|
-
|
|
-
|
|
-
|
|
(52)
|
|
Consideration paid for business
acquisitions
|
(2,913)
|
|
-
|
|
(3,004)
|
|
-
|
|
Repurchase of ordinary shares
|
-
|
|
(21,031)
|
|
-
|
|
(21,031)
|
|
Proceeds of short-term bank loan
|
-
|
|
-
|
|
1,584
|
|
-
|
|
Repayments of short-term bank
loan
|
-
|
|
(1,542)
|
|
-
|
|
(1,542)
|
|
Net cash (used in) provided by financing
activities
|
(2,527)
|
|
(22,192)
|
|
47
|
|
(19,821)
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on
cash
|
19
|
|
480
|
|
(37)
|
|
817
|
|
Net decrease in cash and cash
equivalents
|
(6,843)
|
|
(16,687)
|
|
(19,701)
|
|
(31,861)
|
|
Cash and cash equivalents, beginning of
period
|
83,256
|
|
146,428
|
|
96,170
|
|
161,265
|
|
Cash and cash equivalents, end of
period
|
76,432
|
|
130,221
|
|
76,432
|
|
130,221
|
|
VANCEINFO TECHNOLOGIES INC.
|
|
|
Reconciliations of Non-GAAP Financial
Measures to Comparable GAAP Measures
|
|
|
(US dollars in thousands, except per share
data and percentages)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2012
|
|
Three Months Ended June 30, 2011
|
|
|
GAAP
|
|
Adjustments
|
|
Non-GAAP
|
|
GAAP
|
|
Adjustments
|
|
Non-GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations
|
$5,541
|
|
$3,510
|
(a)
|
$9,051
|
|
$7,685
|
|
$2,349
|
(b)
|
$10,034
|
|
|
Operating margin
|
5.8%
|
|
3.8%
|
(a)
|
9.6%
|
|
11.3%
|
|
3.4%
|
(b)
|
14.7%
|
|
|
Net income
|
$4,682
|
|
$3,510
|
(a)
|
$8,192
|
|
$7,137
|
|
$2,349
|
(b)
|
$9,486
|
|
|
Net margin
|
4.9%
|
|
3.7%
|
(a)
|
8.6%
|
|
10.5%
|
|
3.4%
|
(b)
|
13.9%
|
|
|
Diluted EPS
|
$0.11
|
|
$0.08
|
(e)
|
$0.19
|
|
$0.16
|
|
$0.05
|
(e)
|
$0.21
|
|
|
|
|
Six months Ended June 30, 2012
|
|
Six months Ended June 30, 2011
|
|
|
GAAP
|
|
Adjustments
|
|
Non-GAAP
|
|
GAAP
|
|
Adjustments
|
|
Non-GAAP
|
|
|
Income from operations
|
$8,663
|
|
$7,094
|
(c)
|
$15,757
|
|
$14,466
|
|
$4,499
|
(d)
|
$18,965
|
|
|
Operating margin
|
4.8%
|
|
3.9%
|
(c)
|
8.7%
|
|
11.5%
|
|
3.6%
|
(d)
|
15.1%
|
|
|
Net income
|
$8,014
|
|
$7,094
|
(c)
|
$15,108
|
|
$14,063
|
|
$4,499
|
(d)
|
$18,562
|
|
|
Net margin
|
4.4%
|
|
4.0%
|
(c)
|
8.4%
|
|
11.2%
|
|
3.6%
|
(d)
|
14.8%
|
|
|
Diluted EPS
|
$0.18
|
|
$0.16
|
(e)
|
$0.34
|
|
$0.31
|
|
$0.09
|
(e)
|
$0.40
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Adjustment to exclude acquisition related
intangible assets amortization expense of $1,408,
land use right amortization expense of $120, change
in fair value of contingent consideration payable
for business acquisition of $(173) and
share-based compensation of $2,155 from the
unaudited condensed consolidated statements of
operations.
|
|
|
(b) Adjustment to exclude acquisition related
intangible assets amortization expense of $744,
change in fair value of contingent consideration
payable for business acquisition of $(513) and
share-based compensation of $2,118 from the
unaudited condensed consolidated statements of
operations.
|
|
|
(c) Adjustment to exclude acquisition related
intangible assets amortization expense of $2,400,
land use right amortization expense of $241, change
in fair value of contingent consideration payable
for business acquisition of $(84) and
share-based compensation of $4,537 from the
unaudited condensed consolidated statements of
operations.
|
|
|
(d) Adjustment to exclude acquisition related
intangible assets amortization expense of $1,239,
change in fair value of contingent consideration
payable for business acquisition of $(602),
and share-based compensation of $3,862 from the
unaudited condensed consolidated statements of
operations.
|
|
|
(e) Non-GAAP diluted EPS is computed by
dividing non-GAAP net income attributable to
VanceInfo Technologies Inc. by the weighted average
number of diluted ordinary shares outstanding used
in computing the GAAP diluted EPS for the
respective periods.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
VANCEINFO TECHNOLOGIES INC.
|
|
|
Reconciliations of Forward-Looking Guidance
for
|
|
|
Non-GAAP Financial Measures to Comparable
GAAP Measures
|
|
|
(US dollars in thousands, except per share
data)
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ending September 30, 2012
|
|
Year Ending December 31, 2012
|
|
|
GAAP
|
|
Adjustments
|
|
Non-GAAP
|
|
GAAP
|
|
Adjustments
|
|
Non-GAAP
|
|
|
Range of Estimate
|
|
|
|
Range of Estimate
|
|
Range of Estimate
|
|
|
|
Range of Estimate
|
|
|
|
|
|
|
|
|
|
|
From
|
To
|
|
|
|
From
|
To
|
|
|
Diluted EPS (a)
|
0.09
|
0.11
|
|
0.09
|
(b)
|
0.18
|
0.20
|
|
0.41
|
0.47
|
|
0.34
|
(b)
|
0.75
|
0.81
|
|
|
|
|
|
Notes:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Based on 44.3 million and 44.2 million
total ADS-equivalent average shares outstanding for
the third quarter 2012 and full year 2012,
respectively.
|
|
|
(b) Reflects estimated adjustment for
acquisition related intangible assets, land use
right, amortization expense and
|
|
|
share-based compensation expenses of
approximately $4.0 million for the third quarter
2012 and $15.0 million for the full
|
|
|
year 2012.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For further information, please contact:
Sheryl Zhang
Investor Relations
VanceInfo Technologies Inc.
Tel: +86-10-8282-5330
E-mail: ir@vanceinfo.com
SOURCE VanceInfo Technologies Inc.
distributed by
|
|
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