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 million for 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 million in the second quarter of 2011.
- Diluted earnings per share ("EPS") and non-GAAP diluted EPS(1)
were $0.11 and $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 million in
the second quarter of 2012, up 38.8% from $68.2 million for the second quarter of 2011. The
increase in net revenues was attributable to the demand from most
of the markets we serve, except for the European market.
Net Revenues by Service Lines
The Company provides four broad sets of services: R&D
Outsourcing Services, Consulting and Solutions Services,
Application Management Services and Other Solutions & Services.
R&D Outsourcing Services consist of the research &
development service line and the globalization & localization
service line. Consulting and Solutions Services consist of
consulting, business intelligence, ERP implementation and
industry-specific solutions. Application Management Services
consist of application development and maintenance ("ADM") and
quality assurance and testing services. Other Solutions &
Services consist of business process outsourcing ("BPO") and system
integration ("SI") services.
Consistent with the Company's growth strategy, net revenues from
Consulting and Solutions Services grew 112.1% over the same period
in 2011 and contributed 12.3% of total net revenues in the second
quarter of 2012. Net revenues from Application Management Services
increased 42.7% from the second quarter of 2011, accounting for
34.1% of total net revenues in the second quarter of 2012.
|
Three
Months Ended
June
30, 2012
|
Three
Months Ended
June
30, 2011
|
(in
thousands of US$, 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
China were $45.6 million, or
48.2% of total net revenues in the second quarter of 2012, followed
by 34.5% from clients headquartered in the United States, 10.1% in Europe and 4.7% in Japan.
Measuring the Company's revenues by geographic markets based on
the location of the contract signing entities, Greater China accounted for 66.7% of total net
revenues in the second quarter of 2012, while the United States accounted for 26.8% in the
same period.
Net Revenues by Industries
The Company classifies its clients into four broad industry
segments: Telecommunications ("Telecom"), High Technology ("High
Tech"), Banking, Financial Services and Insurance ("BFSI"), and
other industry segments including manufacturing, retail,
distribution, travel and transportation and public services, etc.
("Others").
|
Three
Months Ended
June
30, 2012
|
Three
Months Ended
June
30, 2011
|
(in
thousands of US$, 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 million or 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 million in 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 million for the second quarter
of 2012, up 44.8% from $18.0 million
a 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 million in the second quarter of 2011.
Non-GAAP operating income[1] in the second quarter of 2012 was
$9.1 million, compared to
$10.0 million in 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
million in the second quarter of 2012, compared to
$0.9 million in 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 million in the second quarter of 2011.
Non-GAAP net income[1] was $8.2
million in the second quarter of 2012, compared to
$9.5 million in 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 $0.11 and $0.19, respectively, based on 43.9 million total
ADS-equivalent average shares outstanding, compared with
$0.16 and $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 $2.5 million capital
expenditure in the construction of our new headquarters.
Days sales outstanding ("DSO") was 132 days for the second
quarter of 2012, which was the same as the first quarter of 2012.
DSO was 128 days for the trailing twelve months ended June 30, 2012, compared with 127 days the
trailing twelve months ended March 31,
2012.
DSO was calculated by dividing average accounts receivable, net
of average deferred revenues, by the period's gross revenues before
business tax, and multiplying by the number of days in the
corresponding period.
|
Three
Months Ended
|
Twelve
Months Ended
|
June
30, 2012
|
March
31, 2012
|
June
30, 2012
|
March
31, 2012
|
( in
thousands of US$)
|
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 $125.7 million in the first half of 2011.
Net Revenues by Service Lines
|
Six
Months Ended
June
30, 2012
|
Six
Months Ended
June
30, 2011
|
(in
thousands of US$, 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 China is the Company's largest
geographic market, accounting for $ 85.8
million or 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 Europe and 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 China accounted for 66.9% of net
revenues in the first half of 2012, while the United States accounted 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 million in 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 million and $1.5
million of 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 million in the same period last year.
Non-GAAP operating income[1] in the first half of 2012 was
$15.8 million, compared with
$19.0 million in 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 million for the same period of 2011.
Non-GAAP net income[1] was $15.1
million for the first half of 2012, compared with
$18.6 million a 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 $0.31 in the year-ago period. Non-GAAP diluted
EPS[1] was $0.34 for the first half
of 2012, compared to $0.40 for 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 PM Beijing/Hong
Kong time). 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, Europe and 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 China and 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 10 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 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.