BEIJING, China, Nov. 17 /Xinhua-PRNewswire/ -- Ninetowns Internet
Technology Group Company Limited (Nasdaq: NINE), who streamlines the
import/export process in China through its scalable enterprise platform
products, today reported its financial results for the third quarter of 2006.
Financial Results
Total net revenue for the third quarter of 2006 was US$3.7 million,
representing a 50.5% decrease, compared to US$7.3 million for the third
quarter of 2005. Net revenue from sales of enterprise software for the third
quarter of 2006 was US$3.2 million, representing 86.3% of total net revenue,
as compared to 87.8% for the third quarter of 2005. Net revenue from software
development services for the third quarter of 2006 was US$0.5 million,
representing 13.7% of total net revenue, as compared to 11.5% for the third
quarter of 2005.
Gross profit for the third quarter of 2006 was US$3.5 million, or 95.1% of
total net revenue, representing a decrease of 49.4% compared to US$6.8 million
or 93.0% of total net revenue for the third quarter of 2005.
Operating income for the third quarter of 2006 was US$0.8 million,
representing a 79.6% decrease compared to US$3.6 million for the third quarter
of 2005. Operating margin for the third quarter of 2006 was 20.5%, compared
to 49.5% for the third quarter of 2005.
Net income for the third quarter of 2006 was US$1.4 million, representing
a 67.3% decrease compared to net income of US$4.1 million for the third
quarter of 2005. Diluted earnings per ADS / share for the third quarter of
2006 were US$0.04, compared to the diluted earnings per ADS / share of US$0.11
for the third quarter of 2005. Diluted earnings per ADS / share computations
for the third quarter of 2006 were based on 35.6 million weighted average
number of ADSs / shares outstanding, compared to 35.8 million in the third
quarter of 2005.
The conversion of Renminbi into U.S. dollars in this release, made solely
for the convenience of the reader, is based on the noon buying rate in The
City of New York for cable transfers of Renminbi as certified for customs
purposes by the Federal Reserve Bank of New York as of September 30, 2006,
which was RMB7.9040 to US$1.00. Certain comparative figures extracted from
the past releases are converted by using the rate as of the respective balance
sheet date. The percentages stated in this press release are calculated based
on Renminbi.
Third quarter 2006 achievements
* Installed iDeclare user base increased to 128,000 at the end of the
third quarter of 2006 from 126,000 at the end of the second quarter of
2006.
* Sold approximately 2,100 iDeclare software packages, approximately 4,500
iDeclare maintenance contracts.
Mr. Shuang Wang, Chief Executive Officer of Ninetowns, said, "In the third
quarter, we continued to experience the transition in our core business area
of selling enterprise platform products to both new and existing clients. In
addition, we have initiated the execution of our B2B strategy in order to
realize our vision of providing more value-added services within the
international trade value chain for the import/export enterprises in China."
Mr. Tommy Fork, Chief Financial Officer of Ninetowns, said, "In the third
quarter, we continued to realize the benefit of our cost control process in
the areas of sales and marketing. Despite the transition and the increased
investment in research and development activities for our B2B platform
development initiatives, we were still able to maintain profitability and
healthy financial position with a cash balance of US$ 120.2 million. "
Investor Conference Call / Webcast Details
A conference call has been scheduled for 7:00 a.m. in Beijing on November
17, 2006. This will be 6:00 p.m. on November 16, 2006 in New York. During the
call, time will be set-aside for analysts and interested investors to ask
questions of executive officers.
The call may be accessed by dialing +1-617-213-8895 and the passcode is
85837656. A live webcast of the conference call will be available on our
website at http://www.ninetowns.com/english. A replay of the call will be
available from 9:00 a.m. Beijing time on November 17, 2006 (8:00 p.m. in New
York on November 16, 2006) through 9:00 a.m. on November 24 in Beijing (8:00
p.m. in New York on November 23) by telephone at +1-617-801-6888 and through
www.ninetowns.com/english. The passcode to access the call replay is
76361319.
About Ninetowns Internet Technology Group Company Limited
Ninetowns (Nasdaq: NINE) streamlines the import/export process for
enterprises in China. Through its scalable enterprise platform products,
Ninetowns' clients have the ability to automate import/export processing over
the Internet. This is a more cost-effective and efficient alternative to the
traditional paper-based method. For more information, visit
www.ninetowns.com/english.
Forward-Looking Statements:
Certain statements in this press release include forward-looking
statements within the meaning of the U.S. Private Securities Litigation Reform
Act of 1995. Forward-looking statements generally can be identified by the use
of forward-looking terminology, such as "may," "will," "expect," "intend,"
"estimate," "anticipate," "believe," "project" or "continue" or the negative
thereof or other similar words. All forward-looking statements involve risks
and uncertainties, including, but not limited to, customer acceptance and
market share gains, competition from companies that have greater financial
resources; introduction of new products into the marketplace by competitors;
successful product development; dependence on significant customers; the
ability to recruit and retain quality employees as the Company grows; and
economic and political conditions globally. Actual results may differ
materially from those discussed in, or implied by, the forward-looking
statements. The forward-looking statements speak only as of the date of this
release and the Company assumes no duty to update them to reflect new,
changing or unanticipated events or circumstances.
NINETOWNS INTERNET TECHNOLOGY GROUP COMPANY LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 2005, JUNE 30,2006 AND SEPTEMBER 30, 2006
(In thousands, except share and
per share data)
For the three months ended
Sep 30, Sep 30, June 30,
2005 2005 2006
RMB US$ RMB
(unaudited) (unaudited) (unaudited)
Total net revenues 58,985 7,289 40,223
Cost of revenues (4,148) (513) (3,059)
Gross profit 54,837 6,776 37,164
Selling expenses (8,279) (1,023) (2,682)
General and administrative
expenses (15,197) (1,878) (15,588)
Research and development
expenses (2,154) (266) (4,751)
Other operating income - - -
Income from operations 29,207 3,609 14,143
Interest income 3,808 471 4,605
Other income 310 38 -
Income before income taxes 33,325 4,118 18,748
Income taxes (117) (14) (519)
Net income 33,208 4,104 18,229
Net income per share:
Basic RMB0.95 US$0.12 RMB0.52
Diluted RMB0.93 US$0.11 RMB0.51
Weighted average
number of shares
used in computing
net income per share:
Basic 34,991,834 34,991,834 34,991,834
Diluted 35,812,577 35,812,577 35,561,327
For the three months ended
June 30, Sep 30, Sep 30,
2006 2006 2006
US$ RMB US$
(unaudited) (unaudited) (unaudited)
Total net revenues 5,031 29,187 3,693
Cost of revenues (383) (1,428) (181)
Gross profit 4,648 27,759 3,512
Selling expenses (335) (1,427) (181)
General and administrative
expenses (1,950) (13,756) (1,740)
Research and development
expenses (594) (7,206) (912)
Other operating income - 600 76
Income from operations 1,769 5,970 755
Interest income 576 4,999 632
Other income - 58 7
Income before income taxes 2,345 11,027 1,394
Income taxes (65) (174) (22)
Net income 2,280 10,853 1,372
Net income per share:
Basic US$0.07 RMB0.31 US$0.04
Diluted US$0.06 RMB0.31 US$0.04
Weighted average
number of shares
used in computing
net income per share:
Basic 34,991,834 34,991,834 34,991,834
Diluted 35,561,327 35,551,209 35,551,209
NINETOWNS INTERNET TECHNOLOGY GROUP COMPANY LIMITED
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 2005 AND SEPTEMBER 30, 2006
(In thousands, except share and
per share data)
December 31, September 30,
2005 2005 2006 2006
RMB US$ RMB US$
(note) (note) (unaudited) (unaudited)
ASSETS
Current assets:
Cash and cash equivalents and
term deposits 938,474 116,289 950,213 120,219
Inventories 7,722 957 12,286 1,554
Trade receivable 47,211 5,850 16,072 2,033
Other current assets 43,832 5,431 61,503 7,781
Total current assets 1,037,239 128,527 1,040,074 131,587
Goodwill 193,570 23,986 193,570 24,490
Other non-current assets 114,964 14,245 141,688 17,927
TOTAL ASSETS 1,345,773 166,758 1,375,332 174,004
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term unearned revenue 67,886 8,412 28,518 3,608
Other current liabilities 30,922 3,832 37,697 4,769
Total current liabilities 98,808 12,244 66,215 8,377
Minority interests 600 74 600 76
Total shareholders' equity 1,246,365 154,440 1,308,517 165,551
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY 1,345,773 166,758 1,375,332 174,004
Note: The condensed financial information is derived from the audited
financial statements in the Company's annual report filed on Form 20-F.
