BEIJING, Feb. 28, 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 fourth
quarter and full year ended December 31,
2011.
Fourth Quarter and Full Year 2011 Financial and Operating
Highlights
- Net revenues for the fourth quarter of 2011 increased to
$87.2 million, up 46.3% from
$59.6 million for the fourth quarter
of 2010.
- Diluted earnings per share ("EPS") and non-GAAP diluted EPS(1)
were $0.11 and $0.20, respectively, for the fourth quarter of
2011.
- Net revenues for the full year 2011 were $283.1 million, an increase of 33.8% over
2010.
- Diluted EPS and non-GAAP diluted EPS1 were
$0.49 and $0.74, respectively, for the full year 2011.
- Employees totaled 14,958, including 13,424 billable
professionals, as of December 31,
2011.
"We are very excited about the strong growth momentum in the
fourth quarter of 2011," said Chris
Chen, Chairman and Chief Executive Officer of VanceInfo.
"Our strategic investment in the financial services vertical, new
service lines and U.S. onshore presence has contributed to our
performance in this quarter. We are committed to continued
investment in consulting and solution based capabilities and
diversifying our business mix to support our sustainable growth
objectives. While 2011 has been a challenging year for our
industry, we hope 2012 is a year of stabilization with continued
revenue growth and gradual margin recovery."
Fourth Quarter 2011 Financial Results
Due to the seasonal nature of its business, the Company presents
its financial analysis on a year-over-year basis, comparing the
fourth quarter of 2011 and the fourth quarter of 2010 as in the
following paragraphs.
Net Revenues
Net revenues were $87.2 million in
the fourth quarter of 2011, up 46.3% from $59.6 million for the fourth quarter of 2010. The
increase in net revenues was primarily driven by continued growth
of the Company's business in the U.S. and Greater China (including mainland China, Hong Kong,Taiwan and Macau) markets.
Net Revenues by Service Lines
The Company provides three broad sets of services: R&D
Outsourcing Services, IT Services and Other Solutions &
Services. R&D Outsourcing Services consist of the research
& development service line and the globalization &
localization service line. IT Services consist of the enterprise
solutions, the application development & maintenance ("ADM"),
and the quality assurance & testing service lines. Other
Solutions & Services consist of business process outsourcing
("BPO") and system integration ("SI") services, as well as other
solutions.
Net revenues from IT Services remained strong in the fourth
quarter of 2011, increasing 64.7% from the same period in 2010 and
accounting for 45.2% of total net revenues in the fourth quarter of
2011. Net revenues from Other Solutions & Services grew 213.0%
compared to the fourth quarter of 2010 and increased to 4.4% of
total net revenues in the fourth quarter of 2011, consistent with
the Company's growth strategy.
|
|
Three Months
Ended
December 31,
2011
|
Three Months
Ended
December 31,
2010
|
|
(in thousands of US$,
except percentages)
|
|
R&D
Outsourcing Services
|
|
Research & development
services
|
42,055
|
48.2%
|
32,891
|
55.2%
|
|
Globalization &
localization
|
1,897
|
2.2%
|
1,569
|
2.6%
|
|
IT
Services
|
|
Enterprise
solutions
|
8,926
|
10.2%
|
5,537
|
9.3%
|
|
Application development &
maintenance
|
23,794
|
27.3%
|
14,376
|
24.1%
|
|
Quality assurance &
testing
|
6,673
|
7.7%
|
4,004
|
6.7%
|
|
Other
Solutions & Services
|
3,843
|
4.4%
|
1,228
|
2.1%
|
|
Total net
revenues
|
87,188
|
100.0%
|
59,605
|
100.0%
|
Net Revenues by Geographic Markets
Based on the location of our clients' headquarters, net revenues
from clients headquartered in Greater
China were $40.6 million, or
46.5% of total net revenues in the fourth quarter of 2011, followed
by 36.0% from clients headquartered in the United States, 12.6% in Europe and 3.3% in Japan.
Measuring the Company's revenues by geographic markets based on
the location of the contract signing entities, Greater China accounted for 67.3% of total net
revenues in the fourth quarter of 2011, while the United States accounted for 25.1% in the
same period.
Net Revenues by Industries
The Company classifies its clients into four broad industry
segments: Telecommunications ("Telecom"), High Technology ("High
Tech"), Banking, Financial Services and Insurance ("BFSI"), and
other industry segments including manufacturing, retail,
distribution, travel and transportation and public services, etc.
("Others").
|
|
Three Months
Ended
December 31,
2011
|
Three Months
Ended
December 31,
2010
|
|
(in thousands of US$,
except percentages)
|
|
Telecom
|
31,930
|
36.6%
|
25,817
|
43.3%
|
|
High Tech
|
30,590
|
35.1%
|
19,134
|
32.1%
|
|
BFSI
|
13,375
|
15.3%
|
6,421
|
10.8%
|
|
Others
|
11,293
|
13.0%
|
8,233
|
13.8%
|
|
Total net
revenues
|
87,188
|
100.0%
|
59,605
|
100.0%
|
Largest Clients
Revenues from the top five clients totaled $46.3 million or 53.1% of total net revenues in
the fourth quarter of 2011, down from 54.0% in the fourth quarter
of 2010. The decline in customer concentration reflected our
continued efforts to diversify our customer base. Excluding top
five clients, net revenues in the fourth quarter of 2011 grew 48.9%
over the same period in 2010.
Gross Profit and Gross Margin
Gross profit in the fourth quarter of 2011 was $28.3 million, an increase of 24.0% from
$22.8 million in the fourth quarter
of 2010. Gross margin was 32.4% in the fourth quarter of 2011,
compared to 38.3% in the fourth quarter of 2010. Gross profit
included $3.4 million and
$0.5 million of government subsidies
in the fourth quarter of 2011 and 2010, respectively. The lower
gross margin in the fourth quarter of 2011 reflected the wage
inflation in excess of billing rate increase as compared to the
same period in 2010 as well as the temporary impact from our
investment in the business intelligence service line, the BFSI
vertical and the U.S. onshore delivery team, which were still in
the transitional and build-up phase during the quarter.
Operating Expenses
Selling, general and administrative expenses totaled
$25.9 million for the fourth quarter
of 2011, up 69.4 % from $15.3 million
a year ago. The increase in selling, general and administrative
expenses was primarily due to the continued investment in building
solution-based capabilities and pre-sale activities as well as
higher staff costs in 2011.
Operating Income and Operating Margin
As a result of the increased costs, expenses and investment,
operating income in the fourth quarter of 2011 was $3.8 million, compared to $9.0 million in the fourth quarter of 2010.
Non-GAAP operating income1 in the fourth quarter of 2011
was $7.4 million, compared to
$10.2 million in the same period a
year ago. Non-GAAP operating margin1 was 8.5% in the
fourth quarter of 2011, compared to 17.1% in the fourth quarter of
2010. The operating results reflected a temporary operating loss of
approximately $2.1 million associated
with our recent expansion efforts in the financial services
vertical. We expect these newly formed service units to become
profitable in the first quarter of 2012.
Provision for Income Taxes
The provision for income taxes was negative $0.8 million in the fourth quarter of 2011,
compared to $0.4 million in the
fourth quarter of 2010. The negative provision for income tax
reflected a tax reversal at one of the Company's subsidiaries,
which obtained a preferential tax status in 2011.
Net Income and EPS
Net income in the fourth quarter of 2011 was $4.9 million, compared to $8.4 million in the fourth quarter of 2010.
Non-GAAP net income1 was $8.6
million in the fourth quarter of 2011, compared to
$9.7 million in the same period a
year ago. Non-GAAP net margin1 was 9.8% in the fourth
quarter of 2011, compared with 16.2% in the year-ago
quarter.
For the fourth quarter of 2011, diluted EPS and Non-GAAP diluted
EPS1 were $0.11 and
$0.20, respectively, based on 43.6
million total ADS-equivalent average shares outstanding, compared
with $0.19 and $0.22, respectively, for the fourth quarter of
2010.
The non-GAAP measures and related reconciliations to GAAP
measures are described in the accompanying sections of "About
Non-GAAP Financial Measures" and "Reconciliations of Non-GAAP
Financial Measures to Comparable GAAP Measures."
Cash and Cash Flow
As of December 31, 2011, VanceInfo
had cash and cash equivalents, restricted cash, term deposits and
short-term investments totaling $112.2
million. Operating cash flow in the fourth quarter of 2011
was a net inflow of approximately $0.1
million, compared with a net inflow of $7.6 million in the fourth quarter of 2010. The
operating cash flow reflected substantial net cash invested in our
continued expansion efforts in the financial services vertical.
Investing cash flow in the fourth quarter of 2011 included a
$20.8 million capital expenditure in
the construction of our new headquarters.
Days sales outstanding ("DSO") was 115 days for the fourth
quarter of 2011, compared with 131 days in the third quarter of
2011. DSO was 127 days for the trailing twelve months ended
December 31, 2011, compared with 128
days(2) for the trailing twelve months ended September 30, 2011.Unbilled accounts receivable
was 62.2% of the total receivable as of December 31, 2011, compared to 69.2% as of
December 31, 2010.
DSO was calculated by dividing average accounts receivable, net
of average advance from clients and average deferred revenues, by
the period's gross revenues before business tax, and multiplying by
the number of days in the corresponding period.
|
|
Three Months
Ended
|
Twelve Months
Ended
|
|
December 31,
2011
|
September
30,2011
|
December 31,
2011
|
September 30,
2011
|
|
( in thousands of
US$)
|
|
Gross revenues before
business tax
|
90,127
|
72,103
|
290,583
|
261,277
|
|
Average advance from
clients
|
3,015
|
2,124
|
1,990
|
1,493(2)
|
|
Average deferred
revenues
|
590
|
838
|
873
|
1,022(2)
|
Note: Twelve-month average amounts are calculated based on the
respective five quarter-end balances.
Full Year 2011 Financial Results
Net Revenues
Net revenues for the full year of 2011 were $283.1 million, up 33.8% from $211.6 million in 2010.
Net Revenues by Service Lines
Net revenues from IT Services for 2011 totaled $123.3 million, up 61.1% from $76.6 million in 2010. Net revenues from Other
Solutions & Services for 2011 increased 136.5% to $11.2 million, compared with $4.8 million in 2010.
|
|
Year Ended
December 31,
2011
|
Year Ended
December 31,
2010
|
|
(in thousands of US$,
except percentages)
|
|
R&D Outsourcing
Services
|
|
Research & development
services
|
141,251
|
49.9%
|
124,181
|
58.7%
|
|
Globalization &
localization
|
7,312
|
2.6%
|
6,060
|
2.9%
|
|
IT
Services
|
|
Enterprise
solutions
|
25,236
|
8.9%
|
19,725
|
9.3%
|
|
Application development &
maintenance
|
75,543
|
26.7%
|
43,825
|
20.7%
|
|
Quality assurance &
testing
|
22,548
|
8.0%
|
13,003
|
6.2%
|
|
Other
Solutions & Services
|
11,247
|
3.9%
|
4,756
|
2. 2%
|
|
Total net
revenues
|
283,137
|
100.0%
|
211,550
|
100.0%
|
Net Revenues by Geographic Markets
Based on the location of our clients' headquarters, net revenues
from clients headquartered in Greater
China were $132.7 million,
accounting for 46.9% of total net revenues in 2011, followed by
33.7% in the United States, 15.0%
in Europe and 3.4% in Japan.
Measuring the Company's revenues by geographic markets based on
the location of the contract signing entities, Greater China accounted for 71.4% of total net
revenues in 2011, while the United
States accounted for 22.8% in the same period.
Net Revenues by Industries
|
|
Year
Ended
December 31,
2011
|
Year
Ended
December 31,
2010
|
|
(in thousands of US$,
except percentages)
|
|
Telecom
|
112,782
|
39.8%
|
95,052
|
44.9%
|
|
High Tech
|
95,390
|
33.7%
|
71,395
|
33.7%
|
|
BFSI
|
35,994
|
12.7%
|
18,583
|
8.8%
|
|
Others
|
38,971
|
13.8%
|
26,520
|
12.6%
|
|
Total net
revenues
|
283,137
|
100.0%
|
211,550
|
100.0%
|
Largest Clients
Revenues from the top five clients totaled 53.1% of the
Company's total net revenues in the full year of 2011, compared to
55.5% in 2010.
Gross Profit and Gross Margin
Gross profit for the full year of 2011 was $98.6 million, an increase of 21.0% from
$81.5 million for the full year of
2010. Gross margin was 34.8% for the full year of 2011, compared to
38.5% for the prior year. Gross profit included $5.5 million and $2.9 million of government
subsidies in the full year of 2011 and 2010, respectively.
Operating Income and Operating Margin
Operating income in 2011 was $20.9
million, compared with $31.9
million last year. Non-GAAP operating income1 in
the full year of 2011 was $31.9
million, compared with $36.9
million last year. Non-GAAP operating margin1 was
11.3% for the full year of 2011, compared to 17.5% in 2010.
Net Income and EPS
Net income for the full year of 2011 was $22.2million, compared to $29.9 million in 2010. Non-GAAP net
income1 was $33.3 million
for the full year of 2011, compared with $34.9 million a year ago. Diluted EPS for the
full year of 2011 was $0.49, compared
to $0.69 in 2010. Non-GAAP diluted
EPS1 was $0.74 for the
full year of 2011, compared to $0.80
for the full year of 2010.
Recent Development
Acquisition of Beijing Sunwin Corporation Limited
In February 2012, VanceInfo
acquired 100% equity interest in Beijing Sunwin Corporation Limited
("Sunwin"), a China-based company
providing IT consulting and solutions to companies in Chinese
airline industry. Under the terms of the acquisition agreement,
VanceInfo paid an initial consideration of approximately
$2.4 million in cash and $1.1 million in VanceInfo ordinary shares.
Contingent consideration will be paid based on Sunwin's financial
performance in the next 24 to 36 months. The acquisition is
expected to further strengthen VanceInfo's consulting and solution
capabilities in the travel and transportation sector. Over 90
professionals from Sunwin joined the Company as a result of this
transaction.
Outlook for the First Quarter and Full Year 2012
For the first quarter and full year of 2012, the Company
expects:
- First quarter 2012 net revenues to be at least $80 million, representing at least 39.4% increase
from the corresponding period in 2011.
- First quarter 2012 non-GAAP diluted EPS1 to be
between $0.14 and $0.15,
based on 43.7 million total ADS-equivalent average shares
outstanding, reflecting the seasonality effect of the domestic
business, relatively lower government subsidies and higher
effective income tax rate in 2012.
- 2012 net revenues to be at least $360
million, representing at least 27.1% increase from
2011.
- 2012 non-GAAP diluted EPS1 to be between
$0.86 and $0.92, representing an
increase of 16.2% to 24.3% from 2011, based on 44.2 million total
ADS-equivalent average shares outstanding. The non-GAAP diluted EPS
guidance reflects continued uncertainties on the wage inflation
environment in China.
- 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 Standard Time (EST) on Tuesday, February 28, 2012 (8:30 PM Beijing/Hong
Kong time). Please dial-in five minutes prior to the call to
register and receive further instruction.
The 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: 48271068
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
March 6, 2012:
- U.S. Toll Free Dial-in Number: +1.866.214.5335
- International Dial-in Number: +61.2.8235.5000
Passcode: 48271068
(1) Non-GAAP income from operations, net income, diluted EPS and
related margins exclude share-based compensation expense,
amortization of acquired intangible assets, 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 table of "Reconciliations
of Non-GAAP Financial Measures to Comparable GAAP Measures" at the
end of the press release.
(2) Prior period information has been adjusted to ensure
consistency of the financial statement presentation.
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 2010 revenues, according to International
Data Corporation (IDC). This marks the fourth consecutive year that
VanceInfo has been ranked number one by IDC in this category.
VanceInfo's comprehensive range of IT services includes research
& development services, enterprise solutions, application
development & maintenance, quality assurance & testing,
globalization & localization and other solutions and services.
VanceInfo provides these services primarily to corporations
headquartered in the United
States, Europe,
Japan and Greater China, targeting high-growth
industries such as telecommunications, technology, financial
services, travel and transportation services, manufacturing, retail
and distribution.
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 First 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, the economic slowdown in its principal geographic
markets, the quality and portfolio of its services lines and
industry expertise, and the availability of a large talent pool in
China and supply of qualified
professionals, 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 February 28, 2012, 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 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" 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 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.
|
VANCEINFO
TECHNOLOGIES INC.
|
|
Condensed
Consolidated Balance Sheets (Unaudited)
|
|
(US dollars in
thousands, except share data)
|
|
|
|
|
December
31,
|
|
December
31,
|
|
|
2011
|
|
2010
|
|
Assets
|
|
|
|
|
Current
assets
|
|
|
|
|
Cash and cash
equivalents
|
96,170
|
|
161,265
|
|
Term deposits
|
5,000
|
|
5,000
|
|
Restricted
cash
|
1,587
|
|
679
|
|
Held-to-maturity
securities-current
|
9,401
|
|
13,208
|
|
Accounts receivable, net
of allowance for doubtful accounts of $2,200
as of December 31, 2011 and $1,956 as of
December 31, 2010, respectively
|
126,389
|
|
85,437
|
|
Other current
assets
|
16,042
|
|
8,603
|
|
Total current
assets
|
254,589
|
|
274,192
|
|
|
|
|
|
|
Property and equipment,
net
|
36,580
|
|
20,344
|
|
Held-to-maturity
securities-non current
|
-
|
|
1,558
|
|
Long-term
investment
|
-
|
|
193
|
|
Goodwill and other
intangible assets
|
67,807
|
|
34,908
|
|
Land use
right
|
23,884
|
|
18,009
|
|
Other long-term
assets
|
3,036
|
|
2,435
|
|
Total assets
|
385,896
|
|
351,639
|
|
|
|
|
|
|
Liabilities and
equity
|
|
|
|
|
Current
liabilities
|
66,738
|
|
49,678
|
|
Non-current
liabilities
|
16,014
|
|
5,794
|
|
Total
liabilities
|
82,752
|
|
55,472
|
|
|
|
|
|
|
Equity (a)
|
303,144
|
|
296,167
|
|
|
|
|
|
|
Total liabilities and
equity
|
385,896
|
|
351,639
|
|
|
|
|
|
|
|
|
|
|
|
Note:
|
|
|
|
|
(a) As of December 31,
2011, there were 44,714,963 ordinary shares issued and 42,320,390
ordinary shares outstanding,
due to the existence of 2,394,573 treasury shares in the form of
ADSs repurchased from the open market.
|
|
|
|
VANCEINFO
TECHNOLOGIES INC.
|
|
Condensed
Consolidated Statements of Operations (Unaudited)
|
|
(US dollars in
thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
December 31,
|
|
Twelve months ended
December 31,
|
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
Net
revenues
|
87,188
|
|
59,605
|
|
283,137
|
|
211,550
|
|
Cost of revenues
(a)(b)
|
(58,899)
|
|
(36,788)
|
|
(184,518)
|
|
(130,035)
|
|
Gross profit
|
28,289
|
|
22,817
|
|
98,619
|
|
81,515
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses (a)
|
(25,895)
|
|
(15,288)
|
|
(81,848)
|
|
(51,901)
|
|
Change in fair value of
contingent consideration payable
for business acquisition
|
(54)
|
|
414
|
|
920
|
|
221
|
|
Other operating income
(b)
|
1,471
|
|
1,013
|
|
3,172
|
|
2,036
|
|
Income from
operations
|
3,811
|
|
8,956
|
|
20,863
|
|
31,871
|
|
Interest income,
net
|
372
|
|
196
|
|
2,174
|
|
697
|
|
Exchange
difference
|
(17)
|
|
(332)
|
|
(949)
|
|
(950)
|
|
Gain on re-measurement
of fair value of noncontrolling equity
investment in connection with business
acquisition
|
-
|
|
-
|
|
1,215
|
|
612
|
|
Income before income
taxes and earnings in equity method
investment
|
4,166
|
|
8,820
|
|
23,303
|
|
32,230
|
|
Benefit(provision) for
income taxes
|
773
|
|
(410)
|
|
(1,075)
|
|
(2,518)
|
|
Income before earnings
in equity method investment
|
4,939
|
|
8,410
|
|
22,228
|
|
29,712
|
|
(Loss)earnings in equity
method investment
|
-
|
|
(6)
|
|
(35)
|
|
151
|
|
Net
income
|
4,939
|
|
8,404
|
|
22,193
|
|
29,863
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share
|
|
|
|
|
|
|
|
|
Basic - ordinary
shares
|
0.12
|
|
0.20
|
|
0.51
|
|
0.74
|
|
Diluted - ordinary
shares
|
0.11
|
|
0.19
|
|
0.49
|
|
0.69
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding (in thousands)
|
|
|
|
|
|
|
|
|
Basic - ordinary
shares
|
41,868
|
|
41,911
|
|
43,103
|
|
40,298
|
|
Diluted - ordinary
shares
|
43,606
|
|
44,581
|
|
45,248
|
|
43,406
|
|
|
|
|
|
|
|
|
|
|
Note:
|
|
|
|
|
|
|
|
|
(a) Depreciation
and amortization expenses included in cost of revenues and selling,
general and administrative
|
|
expenses totaled $3,156 and $1,975 for the three months ended
December 31, 2011 and 2010, respectively, and $10,606
|
|
and
$8,420 for the twelve months ended December 31, 2011 and 2010,
respectively. Share-base compensation included
|
|
in cost of revenues and selling, general and administrative
expenses totaled $2,320 and $1,127 for the three months
ended
|
|
December 31, 2011 and 2010, respectively, and $8,444 and $3,247 for
the twelve months ended December 31, 2011 and 2010,
|
|
respectively.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(b) In consistency
with certain peer practice, beginning in 2011, we are reporting the
training related government subsidies
|
|
as
a deduction to cost of revenues. Prior period information has been
adjusted to ensure consistency of the financial
|
|
statement
presentation.
|
|
VANCEINFO
TECHNOLOGIES INC.
|
|
Condensed Consolidated Statements Of Cash Flows
(Unaudited)
|
|
(US dollars in
thousands)
|
|
|
|
Three months ended
December 31,
|
|
Twelve months ended
December 31,
|
|
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
|
Net
income
|
4,939
|
|
8,404
|
|
22,193
|
|
29,863
|
|
Adjustments to reconcile net income to net cash provided
by
|
|
|
|
|
|
|
|
|
operating activities:
|
|
|
|
|
|
|
|
|
|
Share-based
compensation
|
2,320
|
|
1,127
|
|
8,444
|
|
3,247
|
|
|
Depreciation and
amortization of property and equipment
|
1,901
|
|
1,440
|
|
7,057
|
|
6,397
|
|
|
Amortization of
intangible assets
|
1,255
|
|
535
|
|
3,549
|
|
2,023
|
|
|
Amortization of
land use right
|
220
|
|
-
|
|
220
|
|
-
|
|
|
Loss on foreign
currency exchange forward contracts
transfer to statements of operations
|
62
|
|
131
|
|
333
|
|
578
|
|
|
Gain(loss) on
disposal of property and equipment
|
(17)
|
|
6
|
|
(3)
|
|
(298)
|
|
|
Allowance for
doubtful accounts
|
322
|
|
10
|
|
75
|
|
685
|
|
|
Change in fair
value of contingent consideration payable for
acquisition
|
54
|
|
(414)
|
|
(920)
|
|
(221)
|
|
|
(Gain) loss
earnings in equity method investment
|
-
|
|
6
|
|
35
|
|
(151)
|
|
|
Gain on
remeasurement of fair value of noncontrolling
equity investment in connection with business
acquisition
|
-
|
|
-
|
|
(1,215)
|
|
(612)
|
|
|
Accrued interest
income of available-for-sale investment
|
-
|
|
(16)
|
|
-
|
|
(41)
|
|
Changes in operating assets and liabilities
|
|
|
|
|
|
|
|
|
|
Rental deposits
and prepaid rentals
|
(216)
|
|
(23)
|
|
(511)
|
|
(475)
|
|
|
Accounts
receivable
|
(19,162)
|
|
(8,348)
|
|
(35,186)
|
|
(22,156)
|
|
|
Prepaid expenses
and other current assets
|
126
|
|
1,110
|
|
(468)
|
|
945
|
|
|
Deferred income
tax assets-current
|
(1,141)
|
|
(849)
|
|
(595)
|
|
(901)
|
|
|
Deferred income
tax assets-non current
|
15
|
|
(3)
|
|
44
|
|
(41)
|
|
|
Other long term
asstes
|
(109)
|
|
-
|
|
(183)
|
|
-
|
|
|
Accounts
payable
|
707
|
|
408
|
|
247
|
|
74
|
|
|
Deferred
revenue
|
(395)
|
|
121
|
|
(905)
|
|
(1,495)
|
|
|
Accrued expenses
and other payables
|
9,904
|
|
3,197
|
|
5,666
|
|
8,810
|
|
|
Income tax
payable
|
(681)
|
|
882
|
|
(140)
|
|
2,643
|
|
|
Deferred
income
|
325
|
|
(62)
|
|
1,094
|
|
(270)
|
|
|
Prepaid land use
right
|
-
|
|
-
|
|
(5,132)
|
|
(16,727)
|
|
|
Deferred income
tax liability-non current
|
(254)
|
|
(92)
|
|
(697)
|
|
(323)
|
|
|
Contingent
consideration payable
|
(114)
|
|
-
|
|
(125)
|
|
-
|
|
Net cash
provided by operating activities
|
61
|
|
7,570
|
|
2,877
|
|
11,554
|
|
VANCEINFO
TECHNOLOGIES INC.
|
|
Condensed Consolidated Statements Of Cash Flows
(Unaudited)-Continued
|
|
(US dollars in
thousands)
|
|
|
|
Three months ended
December 31,
|
|
Twelve months ended
December 31,
|
|
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
Cash flows from
investing activities
|
|
|
|
|
|
|
|
|
|
Purchase of
property and equipment
|
(1,323)
|
|
(3,336)
|
|
(6,678)
|
|
(11,680)
|
|
|
Payment in
construction in progress
|
(20,810)
|
|
-
|
|
(20,810)
|
|
-
|
|
|
Consideration paid
for business acquisitions
|
(3,000)
|
|
(200)
|
|
(9,165)
|
|
(127)
|
|
|
Cash received upon
maturity of term deposit
|
-
|
|
5,000
|
|
5,000
|
|
5,000
|
|
|
Purchase of term
deposit
|
-
|
|
-
|
|
(5,000)
|
|
-
|
|
|
Cash received upon
maturity of restricted cash
|
-
|
|
-
|
|
695
|
|
-
|
|
|
Restricted
cash
|
-
|
|
-
|
|
(1,568)
|
|
(659)
|
|
|
Purchase of
non-current investment - held-to-maturity
|
-
|
|
-
|
|
(6,079)
|
|
(1,560)
|
|
|
Purchase of
current investment - held-to-maturity
|
-
|
|
(1,560)
|
|
(5,253)
|
|
(15,213)
|
|
|
Proceeds from
maturity of investments - held-to-maturity
|
5,287
|
|
1,543
|
|
16,826
|
|
13,648
|
|
|
Purchase of
available-for-sale
|
-
|
|
-
|
|
-
|
|
(200)
|
|
|
Purchase of
long-term investment
|
-
|
|
-
|
|
-
|
|
(661)
|
|
|
Payment for
settlement of foreign currency forward
exchange contracts
|
-
|
|
(388)
|
|
(339)
|
|
(388)
|
|
|
Proceeds from
disposal of property and equipment
|
19
|
|
-
|
|
90
|
|
501
|
|
Net cash (used
in) provided by investing activities
|
(19,827)
|
|
1,059
|
|
(32,281)
|
|
(11,339)
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities
|
|
|
|
|
|
|
|
|
|
Proceeds from
exercise of options
|
63
|
|
999
|
|
3,304
|
|
5,011
|
|
|
Repayment of
advance received for option granted
|
-
|
|
-
|
|
(660)
|
|
-
|
|
|
Payment for
issuance costs of ordinary shares upon
share offering in 2009
|
-
|
|
-
|
|
-
|
|
(220)
|
|
|
Proceeds from
issurance of common stock upon share offering in 2010
|
-
|
|
89,816
|
|
-
|
|
89,816
|
|
|
Payment for
issuance costs of ordinary shares upon
share offering in 2010
|
-
|
|
(507)
|
|
(52)
|
|
(507)
|
|
|
Consideration paid
for business acquisitions
|
(364)
|
|
-
|
|
(3,933)
|
|
(814)
|
|
|
Repurchase of
ordinary shares
|
(5,814)
|
|
-
|
|
(34,791)
|
|
-
|
|
|
Proceeds of
short-term bank loan
|
-
|
|
-
|
|
1,568
|
|
2,939
|
|
|
Repayments of
short-term bank loan
|
-
|
|
-
|
|
(3,086)
|
|
-
|
|
Net cash (used
in) provided by financing activities
|
(6,115)
|
|
90,308
|
|
(37,650)
|
|
96,225
|
|
|
|
|
|
|
|
|
|
|
|
Effect of
exchange rate changes on cash
|
233
|
|
444
|
|
1,959
|
|
768
|
|
Net
(decrease)increase in cash and cash equivalents
|
(25,881)
|
|
98,937
|
|
(67,054)
|
|
96,440
|
|
Cash and cash
equivalents, beginning of period
|
121,818
|
|
61,884
|
|
161,265
|
|
64,057
|
|
Cash and cash
equivalents, end of period
|
96,170
|
|
161,265
|
|
96,170
|
|
161,265
|
|
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
December 31, 2011
|
|
Three Months Ended
December 31, 2010
|
|
GAAP
|
|
Adjustments
|
|
Non-GAAP
|
|
GAAP
|
|
Adjustments
|
|
Non-GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
operations
|
3,811
|
|
3,629
|
(a)
|
7,440
|
|
8,956
|
|
1,248
|
(b)
|
10,204
|
|
Operating
margin
|
4.4%
|
|
4.1%
|
(a)
|
8.5%
|
|
15.0%
|
|
2.1%
|
(b)
|
17.1%
|
|
Net income
|
4,939
|
|
3,629
|
(a)
|
8,568
|
|
8,404
|
|
1,248
|
(b)
|
9,652
|
|
Net margin
|
5.7%
|
|
4.1%
|
(a)
|
9.8%
|
|
14.1%
|
|
2.1%
|
(b)
|
16.2%
|
|
Diluted EPS
|
0.11
|
|
0.09
|
(e)
|
0.20
|
|
0.19
|
|
0.03
|
(e)
|
0.22
|
|
|
|
|
Twelve months Ended
December 31, 2011
|
|
Twelve months Ended
December 31, 2010
|
|
GAAP
|
|
Adjustments
|
|
Non-GAAP
|
|
GAAP
|
|
Adjustments
|
|
Non-GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
operations
|
20,863
|
|
11,073
|
(c)
|
31,936
|
|
31,871
|
|
5,050
|
(d)
|
36,921
|
|
Operating
margin
|
7.4%
|
|
3.9%
|
(c)
|
11.3%
|
|
15.1%
|
|
2.4%
|
(d)
|
17.5%
|
|
Net income
|
22,193
|
|
11,073
|
(c)
|
33,266
|
|
29,863
|
|
5,050
|
(d)
|
34,913
|
|
Net margin
|
7.8%
|
|
3.9%
|
(c)
|
11.7%
|
|
14.1%
|
|
2.4%
|
(d)
|
16.5%
|
|
Diluted EPS
|
0.49
|
|
0.25
|
(e)
|
0.74
|
|
0.69
|
|
0.11
|
(e)
|
0.80
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes:
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Adjustment to
exclude acquisition related intangible assets amortization expense
of $1,255, change in
|
|
fair value of contingent consideration payable for business
acquisition of $54 and share-based
|
|
|
|
compensation of $2,320 from the unaudited condensed consolidated
statements of operations.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(b) Adjustment to
exclude acquisition related intangible assets amortization expense
of $535, change in
|
|
fair value of contingent consideration payable for business
acquisition of $(414) and share-based
|
|
|
compensation of $1,127 from the unaudited condensed consolidated
statements of operations.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(c) Adjustment to
exclude acquisition related intangible assets amortization expense
of $3,549, change in
|
|
fair value of contingent consideration payable for business
acquisition of $(920) and share-based
|
|
|
compensation of $8,444 from the unaudited condensed consolidated
statements of operations.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(d) Adjustment to
exclude acquisition related intangible assets amortization expense
of $2,024,
|
|
|
|
change in fair value of contingent consideration payable for
business acquisition of $(221),
|
|
|
|
and
share-based compensation of $3,247 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
March 31, 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
|
|
From
|
To
|
|
|
|
From
|
To
|
|
Diluted EPS
(a)
|
0.06
|
0.07
|
|
0.08
|
(b)
|
0.14
|
0.15
|
|
0.55
|
0.61
|
|
0.31
|
(b)
|
0.86
|
0.92
|
|
|
|
|
Notes:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Based on 43.7
million and 44.2 million total ADS-equivalent average shares
outstanding for the first quarter 2012 and full year 2012,
respectively.
|
|
(b) Reflects estimated
adjustment for acquisition related intangible assets amortization
expense and share-based
|
|
compensation expenses of approximately $3.5 million for the first
quarter 2012 and $13.8 million for the full year 2012.
|
For further information,
please contact:
In China
Sheryl Zhang
Investor Relations
VanceInfo Technologies Inc.
Tel: +86-10-8282-5330
E-mail: ir@vanceinfo.com
Wendy Sun
The Piacente Group, Inc.
Investor Relations
Tel: +86-10-6590-7991
Email: vanceinfo@tpg-ir.com
In the US:
The Piacente Group, Inc.
Investor Relations
Brandi Floberg or Lee Roth
Tel: (212) 481-2050
Email: vanceinfo@tpg-ir.com
SOURCE VanceInfo Technologies Inc.