CDC Software Corporation (NASDAQ: CDCS), a global provider of
enterprise software applications and services, today announced
that, based on preliminary financial projections and estimates, the
company is revising upward its 2009 GAAP net income guidance to be
in the range of (U.S.)$20.5 million to (U.S.)$21.5 million, a more
than a 25 percent increase from its previously issued original
guidance in August 2009 after the company’s initial public offering
in that month.
CDC Software’s latest guidance estimates also represent a 15
percent increase from its previously issued and revised guidance
provided in November 2009 of (U.S.)$17.2 million to (U.S.)$19.3
million. CDC Software also increased its adjusted EBITDA (a)
estimate for the second time and is now expecting to report
(U.S.)$53.2 million to (U.S.)$54.5 million in adjusted EBITDA in
2009, a 10 percent increase from its guidance in August.
The company also expects that non-GAAP earnings per share (a)
for the full year 2009 is expected to be in the range of
(U.S.)$1.25 to (U.S.)$1.27 per share, which exceeds First Call
consensus estimates.
This latest guidance revision follows CDC Software’s recent
announcement of a projected 37 percent growth in fourth quarter
2009 license revenues, including a 30 percent improvement in
organic license revenues.
"We are pleased to revise upward our previous guidance estimates
for profitability for the second time since our IPO last August,”
said Peter Yip, CEO of CDC Software. “Notably, since CDC Software
went public, this is the third consecutive quarter we have exceeded
our internal quarterly expectations, which we believe were the most
appropriate measure for us at the time since analyst coverage of
CDC Software did not start until the third quarter of 2009. We are
also pleased that our projections indicate we expect to exceed Wall
Street consensus estimates for non-GAAP earnings per share for
2009. This is the first time we provided guidance on non-GAAP
earnings per share and we plan to continue to use this as our
profitability measure going forward since it is a metric widely
used to gauge profitability and value.”
Yip continued, “The solid expected increases in our profit
metrics reflect fourth quarter projections of healthy organic
growth, increased cross-selling opportunities, faster sales cycles,
growth in virtually all of our targeted vertical markets, and
continued economies of scale achieved in the most recently
completed quarter. Additionally, we are pleased with the
performance of our recently acquired companies (Activplant,
Truition and gomembers) which have exceeded our internal
expectations. We closed in excess of $1.0 million in software as a
service (SaaS) bookings in the last month of the fourth quarter in
2009. Annualizing this $1.0 million run rate would expand our
recurring revenues, which we define as SaaS revenues plus
maintenance revenues, by approximately 12 percent. We are also
pleased to see growth in our sales pipeline for the first quarter
of 2010. With our healthy sales momentum, organic growth, efficient
cost management and the synergistic acquisitions executed in recent
months, along with the inroads we made with license sales in
emerging growth economies such as India and China, I feel
cautiously optimistic on our long-term prospects. I also believe
that CDC Software will continue to strive to improve its business
fundamentals and operational metrics in the future.”
(a) Adjusted Financial Measures
This press release includes Adjusted EBITDA and non-GAAP
earnings per share, which are not prepared in accordance with GAAP
("Non-GAAP Financial Measures"). Non-GAAP Financial Measures are
not alternatives for measures such as net income, earnings per
share and cash and cash equivalents prepared under generally
accepted accounting principles in the United States ("GAAP"). These
Non-GAAP Financial measures may also be different from non-GAAP
measures used by other companies. Non-GAAP Financial Measures
should not be used as a substitute for, or considered superior to,
measures of financial performance prepared in accordance with
GAAP.
Investors should be aware that these Non-GAAP Financial Measures
have inherent limitations, including their variance from certain of
the financial measurement principals underlying GAAP, should not be
considered as a replacement for GAAP performance measures, and
should be read in conjunction with our consolidated financial
statements prepared in accordance with GAAP. These supplemental
Non-GAAP Financial Measures should not be construed as an inference
that the Company's future results will be unaffected by similar
adjustments to net earnings determined in accordance with GAAP.
About CDC
Software
CDC Software (NASDAQ: CDCS), The Customer-Driven Company™, is a
provider of enterprise software applications and services designed
to help organizations deliver a superior customer experience, while
increasing efficiencies and profitability. CDC Software provides
customers with maximum flexibility in their solutions through
multiple deployment options which best fit their business needs.
Leveraging a service-oriented architecture (SOA), CDC Software
offers multiple delivery options for their solutions such as
on-premise, cloud-based or hybrid (blending of the two options)
deployment offerings. CDC Software's product suite includes: CDC
Factory (manufacturing operations management), Activplant
(enterprise manufacturing intelligence), CDC Ross ERP (enterprise
resource planning), CDC Supply Chain (supply chain management,
warehouse management and order management),CDC xAlerts (real-time
supply chain event management), CDC Power (discrete ERP), CDC
eCommerce, CDC NFP/NGO, CDC Pivotal CRM and Saratoga CRM (customer
relationship management), CDC Respond (customer complaint and
feedback management), c360 CRM add-on products, industry solutions
and development tools for the Microsoft Dynamics CRM platform, CDC
HRM (human resources) and business analytics solutions.
These industry-specific solutions are used by more than 6,000
customers worldwide within the manufacturing, financial services,
health care, home building, real estate, wholesale and retail
distribution industries. The company completes its offerings with a
full continuum of services that span the life cycle of technology
and software applications, including implementation, project
consulting, technical support and IT consulting. For more
information, please visit www.cdcsoftware.com.
About CDC Corporation
The CDC family of companies includes CDC Software (NASDAQ: CDCS)
focused on enterprise software applications and services, CDC
Global Services focused on IT consulting services, and outsourced
R&D and application development, CDC Games focused on online
games, and China.com China.com, Inc. (HKGEM:8006) focused on
portals for the greater China markets. For more information about
CDC Corporation (NASDAQ: CHINA), please visit
www.cdccorporation.net.
Cautionary Note Regarding Forward-Looking Statements
This press release includes "forward-looking statements" within
the meaning of the United States Private Securities Litigation
Reform Act of 1995. These forward-looking statements include
statements regarding our expectations relating to license revenue
growth and organic license sales growth in the fourth quarter of
2009, our expectations regarding GAAP net income, adjusted EBITDA
and Non-GAAP earnings per share, our beliefs regarding or internal
metrics and indices, as well as the propriety thereof, our
expectations and estimates regarding Non-GAAP earnings per share
and our use thereof going forward, our beliefs regarding our Q1
2010 pipeline and the reasons for our performance in Q4 2009, our
expectations regarding increases in new logo license sales, sales
to our installed base customers and our sales pipeline, our beliefs
regarding license sales from newly-acquired companies including the
continuation thereof, our beliefs regarding reasons for increases
in revenues, our expectations regarding the geographic distribution
of our revenues, our beliefs regarding our future performance and
improvements in financial and business metrics, our beliefs
regarding a possible rebound in the enterprise software market, and
other statements that are not historical fact, the achievement of
which involve risks, uncertainties and assumptions. If any such
risks or uncertainties materialize or if any of the assumptions
proves incorrect, our results could differ materially from the
results expressed or implied by the forward-looking statements we
make. These statements are based on management's current
expectations and are subject to risks and uncertainties and changes
in circumstances. There are important factors that could cause
actual results to differ materially from those anticipated in the
forward looking statements, including the following: (a) the
ability to realize strategic objectives by taking advantage of
market opportunities in targeted geographic markets; (b) the
ability to make changes in business strategy, development plans and
product offerings to respond to the needs of current, new and
potential customers, suppliers and strategic partners; (c) the
effects of restructurings and rationalization of operations; (d)
the ability to address technological changes and developments
including the development and enhancement of products; (e) the
entry of new competitors and their technological advances; (f) the
need to develop, integrate and deploy enterprise software
applications to meet customer's requirements; (g) the possibility
of development or deployment difficulties or delays; (h) the
dependence on customer satisfaction with the company's software
products and services; (i) continued commitment to the deployment
of the enterprise software solutions; (j) risks involved in
developing software solutions and integrating them with third-party
software and services; (k) the continued ability of the company's
enterprise software solutions to address client-specific
requirements; (l) demand for and market acceptance of new and
existing enterprise software and services and the positioning of
the company's solutions; (m) the ability of staff to operate the
enterprise software and extract and utilize information from the
company's enterprise software solutions; (n) the continued
cooperation of our strategic and business partners; (o) risks
relating to economic conditions and other matters beyond our
control; and (p) the risk that the preliminary financial results
provided herein could differ from our actual results. Further
information on risks or other factors that could cause results to
differ is detailed in our filings or submissions with the United
States Securities and Exchange Commission, and those of our
ultimate parent company, CDC Corporation, located at www.sec.gov.
All forward-looking statements included in this press release are
based upon information available to management as of the date of
the press release, and you are cautioned not to place undue
reliance on any forward looking statements which speak only as of
the date of this press release. The company assumes no obligation
to update or alter the forward looking statements whether as a
result of new information, future events or otherwise. Historical
results are not indicative of future performance.
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