CDC Software Corporation (NASDAQ: CDCS), a global provider of
hybrid enterprise software applications and services, today
announced that, based on preliminary financial projections and
estimates, the company expects third quarter 2010 Non-GAAP earnings
per share(a) to be in the range of (U.S.) $0.23-$0.24 per share,
and Non-GAAP revenue(a) is projected to be in the range of $53-$54
million. Third quarter 2009 Non-GAAP earnings per share was
$0.33 and Non-GAAP revenue was $48.6 million.
CDC Software expects third quarter 2010 Adjusted EBITDA(a) to be
in the range of $9.5-$10.0 million. First Call consensus estimates
as of Oct. 29, 2010, for CDC Software’s third quarter 2010 are
Non-GAAP earnings per share of $0.22 per share and Non-GAAP revenue
of $53.9 million.
“Overall, we are delighted that we expect to exceed consensus
estimates despite the company’s transition to its hybrid software
model, which required increased upfront costs for sales, marketing
and R&D,” said Bruce Cameron, president of CDC Software. “As we
previously reported, we expect application sales to increase
approximately 49 percent despite the fact that the third quarter is
typically negatively impacted by the seasonality of our
sales/business cycle, including European holidays. In addition, we
are projecting a solid third quarter in software-as-a-service
(SaaS) sales, increased license and new logo license sales and an
especially strong sales quarter for our European region compared to
the third quarter of 2009. Notably, we are expecting to achieve our
highest cross-selling performance in two years, while our fourth
quarter sales pipeline has continued to increase and has shown
steady growth over the last four quarters.”
As previously disclosed, CDC Software will hold its third
quarter 2010 earnings call on Nov. 11, 2010, at 8:30 AM EST with
its earnings release preceding the call. CDC Software also will be
presenting on Nov. 9, 2010, at the Wells Fargo Securities 2010
Technology, Media & Telecom Conference and Nov. 10 at the Piper
Jaffray Technology, Media & Telecommunications Conference. Both
conferences are held in New York City.
About CDC Software
CDC Software (NASDAQ: CDCS), The Customer-Driven Company™, is a
hybrid enterprise software provider of on-premise and cloud
deployments. Leveraging a service-oriented architecture (SOA), CDC
Software offers multiple delivery options for their solutions
including on-premise, hosted, cloud-based software-as-a-service
(SaaS) or blended-hybrid deployment offerings. CDC Software’s
solutions include enterprise resource planning (ERP), manufacturing
operations management, enterprise manufacturing intelligence,
supply chain management (demand management, order management and
warehouse and transportation management), global trade management,
e-Commerce, human capital management, customer relationship
management (CRM), complaint management and aged care solutions.
CDC Software’s recent acquisitions are part of its “acquire,
integrate, innovate and grow” strategy. Fueling the success of this
strategy is the company’s global scalable business and
technology infrastructure featuring multiple complementary
applications and services, domain expertise in vertical markets,
cost effective product engineering centers in India and China, a
highly collaborative and fast product development process utilizing
Agile methodologies, and a worldwide network of direct sales and
channel operations. This strategy has helped CDC Software deliver
innovative and industry-specific solutions to 10,000 customers
worldwide within the manufacturing, distribution, transportation,
retail, government, real estate, financial services, health care,
and not-for-profit industries. For more information, please visit
www.cdcsoftware.com.
(a) Adjusted Financial Measures
This press release includes information on Non-GAAP earnings per
share, Non-GAAP revenue and Adjusted EBITDA, which are not prepared
in accordance with generally accepted accounting principles in the
United States (“GAAP”) (collectively, the "Non-GAAP Financial
Measures"). We believe that these Non-GAAP Financial Measures are
helpful in understanding our past financial performance and our
future results. Non-GAAP Financial Measures are not alternatives
for measures such as revenue, earnings per share and others
prepared under 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 determined in accordance with GAAP. Please see
reconciliations of Non-GAAP Financial Measures to GAAP which we
provide in our earnings press releases.
Special Note Regarding CDC Software Financial Estimates and
Information
The financial estimates and information contained herein apply
only to CDC Software Corporation, a subsidiary of CDC Corporation.
These estimates and amounts do not apply to, and are not indicative
of, the expected consolidated financial performance of CDC
Corporation, or the expected financial performance of CDC Games
Corporation, China.com, Inc. or any of their respective
subsidiaries. Investors are cautioned not to place reliance on the
financial estimates and amounts set forth herein for purposes of
any investment decision with respect to the shares of CDC
Corporation, and should read the foregoing in conjunction with the
reports and other materials filed with the United States Securities
and Exchange Commission by CDC Corporation and CDC Software
Corporation, from time to time.
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 beliefs and expectations regarding Q3 2010
Non-GAAP earnings per share, Non-GAAP revenue and Adjusted EBITDA,
our expectations regarding Q3 2010 application sales as well as
reasons for any potential increases therein, our beliefs and
expectations regarding SaaS revenue, new logo and license sales,
and cross-selling as well as sales pipeline increases, including
growth in the European region and the expected performance of that
region, our beliefs regarding future growth and the reasons
therefor, as well as any trends we may see, 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,
the positioning of the company's and its partners’ solutions, as
well as the success of any of our strategies; (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; (p) the ability to complete and integrate any
acquisitions we may undertake; (q) 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,
including our Annual Report on form 20-F for the year ended
December 31, 2009, filed with the SEC on June 1, 2010, 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. All estimates contained
herein regarding Q3 2010 performance and other periods, are based
upon preliminary financial projections, beliefs and estimates. 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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