Total Revenues Reach US$20.2 million, Up 80.3% Year-on-Year over Adjusted Revenues Due to Continued Diversification of Customer Base
XIAMEN, China, Nov. 19 /Xinhua-PRNewswire/ -- Longtop Financial Technologies Limited ("Longtop") (NYSE: "LFT"), a leading software developer and solutions provider targeting the financial services industry in China, announced today unaudited financial results for the quarter ended September 30, 2007, which is the second quarter of its fiscal year ending March 31, 2008.
FINANCIAL HIGHLIGHTS FOR THE SEPTEMBER 30, 2007 QUARTER:
-- Total revenue was US$20.2 million, an increase of 80.3% year-on-year
("YoY") compared to Adjusted Revenues for the quarter ended September
30, 2006.
-- Software development revenues amounted to US$18.2 million, up 115.6%
YoY compared to 2006 Adjusted Software Development Revenues for the
quarter ended September 30,, 2006.
-- Adjusted Income from Operations was US$13.6 million, an increase of
88.2% YoY.
-- Adjusted Net Income was US$11.6 million, or US$0.28 per fully diluted
share.
Explanation of the Company's Adjusted (ie non-GAAP) financial measures and the related reconciliations to GAAP financial measures are included in the accompanying "Non-GAAP Disclosure" and the "Consolidated Adjusted Statements of Operations."
Commenting on the results, Weizhou Lian, CEO of Longtop, remarked:
"During this past quarter we demonstrated significant revenue and profit growth by leveraging our leading portfolio of software and services to leading financial services companies in China. We also successfully diversified our revenue base by generating strong growth within national and city commercial banks, as well as insurance companies. We are well positioned to benefit from the rapid development and evolution of China's financial services industry."
RECENT OPERATIONAL HIGHLIGHTS:
-- On October 24, 2007 Longtop successfully completed its IPO on the New
York Stock Exchange of 9,000,000 American Depositary Shares ("ADSs"),
which generated net proceeds of approximately US$143 million for
Longtop. Each ADS represents one ordinary share.
-- Demonstrated successful customer diversification as revenues from the
Company's two largest customers, which increased year-on-year,
accounted for 31.6% of software development revenues in the September
30, 2007 quarter, compared to 61.5% for the same period of 2006.
-- In October 2007, Longtop closed the acquisition of FEnet, a leading
provider of business intelligence solutions to the financial and
insurance industry in China. FEnet added 261 employees to Longtop's
1,094 existing employees as of September 30, 2007.
Weizhou Lian continued:
"On October 24th we successfully listed on the New York Stock Exchange, and I would like to thank our customers and employees, and our investors Cathay and Tiger Global, for their dedication and support. As China's financial institutions seek to modernize and become increasingly competitive, I believe that Longtop is entering a new and exciting era of opportunity in which our unique understanding of China's financial services sector combined with our comprehensive product offering puts us in an excellent position to grow in this dynamic business environment."
SEPTEMBER 30, 2007 QUARTER DETAILED FINANCIAL RESULTS
Adjusted Revenues
Three months ended Six months ended
Adjusted September September % Change September September % Change
revenue 30, 2006 30, 2007 (Decrease) 30, 2006 30, 2007 (Decrease)
Software
Development 8,465 18,249 115.6% 14,316 26,489 85.0%
Other Services 2,739 1,951 (28.8%) 6,126 5,241 (14.4%)
Total Adjusted
Revenue 11,204 20,200 80.3% 20,442 31,730 55.2%
Total revenues for our second fiscal quarter were US$20.2 million, compared to Adjusted Revenues of US$11.2 million for the quarter ended September 30, 2006. Software development revenues of US$18.2 million contributed 90.3% of total revenues, and increased 115.6% YoY compared to Adjusted Software Development Revenues for the corresponding period in the previous fiscal year. Software development revenue growth was primarily driven by new customers and to a lesser extent by increased sales to existing customers.
Total revenues for the six months ended September 30, 2007 were US$31.7 million, compared to Adjusted Revenues of US$20.4 million for the six months ended September 30, 2006, a YoY increase of 55.2%. Software development revenues, which were 83.5% of total revenues for the six months ended September 30, 2007, amounted to US$26.5 million, up 85.0% YoY compared to Adjusted Software Development Revenues in the corresponding period a year ago.
Adjusted software development revenue customer concentration analysis
% of adjusted
software Three months ended Six months ended
development September September Change September September Change
revenue from 30,2006 30,2007 (Decrease) 30,2006 30,2007 (Decrease)
Two largest
bank customers 61.5% 31.6% (29.9%) 69.3% 43.7% (25.6%)
Other banks and
non-financial 36.0% 60.1% 24.1% 28.5% 49.1% 20.6%
Insurance 2.5% 8.3% 5.8% 2.2% 7.2% 5.0%
Total 100.0% 100.0% 0.0% 100.0% 100.0% 0.0%
For our second fiscal quarter, Adjusted Software Development Sales to our two largest customers, which are two of the Big Four banks in China, increased year-on-year but declined as a percentage of total Adjusted Software Development Revenue from 61.5% in the three months ended September 30, 2006 to 31.6% in this quarter. Software development sales to other banks and non-financial customers, which includes one of the Big 4 banks as well as national and city banks, increased significantly from the corresponding period in the previous year. These banks and non-financial customers accounted for 60.1% of software development revenues as compared to 36.0% of our Adjusted Software Development Revenues in the quarter ended September 30, 2006. Insurance customers accounted for 8.3% of software development revenue in the quarter ended September 30, 2007, up from 2.5% of Adjusted Software Development Revenue in 2006, resulting in a 626.0% YoY increase.
Software Development revenue by solution type as a percentage of
total adjusted software development revenue
Three months ended Six months ended
September September Change September September Change
30,2006 30,2007 (Decrease) 30,2006 30,2007 (Decrease)
Customised 51.9% 48.3% (3.6%) 57.4% 51.4% (6.0%)
Standardised 39.4% 49.2% 9.8% 33.8% 44.6% 10.8%
Maintenance 8.7% 2.5% (6.2%) 8.8% 4.0% (4.8%)
Total 100.0% 100.0% 0.0% 100.0% 100.0% 0.0%
The percentage of software development revenues in the second quarter from customized solutions was 48.3%, largely unchanged from 51.9% in the corresponding period a year ago. Standardized solutions increased to 49.2% of revenue from 39.4% in 2006 due to demand from new customers, including national and city commercial banks and insurance companies.
Adjusted Gross Margins
Adjusted gross margin percentage
Three months ended Six months ended
September September Change September September Change
30,2006 30,2007 (Decrease) 30,2006 30,2007 (Decrease)
Software
Development
Gross Margin 88.6% 85.8% (2.8%) 88.0% 81.6% (6.4%)
Other Services
Gross Margin 78.4% 62.7% (15.7%) 80.0% 73.2% (6.8%)
Total Gross
Margin % 84.9% 82.7% (2.2%) 84.3% 79.3% (5.0%)
Adjusted Gross Margin of 82.7% in the second quarter and 79.3% for the six months ended September 30, 2007 declined from 84.9% and 84.3% in the respective corresponding periods of the previous year. The reduction in Adjusted Gross Margin was due to lower gross margins in both software development and other services. Adjusted Software Development Gross Margins of 85.8% in the second quarter and 81.6% for the six months ended September 30, 2007 declined from 88.6% and 88.0% in the respective periods of the prior year as the Company continued to invest aggressively in software delivery headcount. As of September 30, 2007 we had 634 employees working on software development delivery as compared to 499 as of June 30, 2007 and 317 as of September 30, 2006.
Adjusted Operating Expenses
For the quarter ended September 30, 2007, Longtop's Adjusted Operating Expenses totaled US$3.1 million, an increase of 40.0% YoY, primarily due to additional headcount related expenses, a $366,000 provision for software purchased for internal use and professional fees. Adjusted Operating Expenses as a percentage of revenue for the six months ended September 30, 2007 were 19.0%, up slightly from 17.3% as a percentage of Adjusted Revenues for the comparative year ago period.
Profitability
Adjusted Operating Income margin was 67.3% for the quarter ended September 30, 2007 and 60.3% for the six months ended September 30, 2007, as compared to 65.1% and 66.9% for the corresponding periods in 2006.
Adjusted Net Income for our second quarter was US$11.6 million or US$0.28 per fully diluted share. Adjusted Net Income for the six months ended September 30, 2007 was US$17.1 million or US$0.42 per fully diluted share.
Commenting on the results, Derek Palaschuk, CFO of Longtop, said:
"The strong revenue and income growth we reported is a result of our increasingly diversified customer base, as we continued to monetize new client relationships through our expanded range of higher margin services and solutions. Although we experienced a slight decline in gross margin due to our reinvestment in headcount, making these expenditures is important as we look to ensure our future expansion."
BUSINESS OUTLOOK
Longtop anticipates for the quarter ended December 31, 2007:
i) Total revenues, excluding revenues from FEnet which closed in
October 2007, of US$15.5 million, an increase of 33.6% from Adjusted
Revenues of $11.6 million in the corresponding year ago period.
Although we expect that there will be a sequential quarterly revenue
decline from the September 30, 2007 quarter due to the typical
seasonality of the business, this outlook indicates our expectation
that there will be healthy growth from the year ago period.
ii) Software development revenues to be $13.5 million, an increase of
39.7% from Adjusted Software Development Revenue in the
corresponding period a year ago.
iii) Adjusted Net Income, excluding a US$1.1 million refund of the
previous year's income taxes which was received in October 2007 and
will be included in Adjusted Net Income for the quarter ended
December 31, 2007, to be US$8.5 million as compared to US$5.3
million in the comparable period a year ago.
iv) Fully diluted Adjusted Earnings per Share, excluding the US$1.1
million income tax refund, to be US$0.17, based on 51 million
weighted average fully diluted shares outstanding.
Longtop anticipates for its fiscal year ended March 31, 2008:
i) Total revenues, excluding revenues from FEnet which closed in
October 2007, of US$58.0 million, an increase of 45.7% from Adjusted
Revenues of $39.8 million in the corresponding year ago period.
ii) Software development revenues of $49.0 million, an increase of 64.4%
from Adjusted Software Development Revenue in the corresponding
period a year ago.
iii) Adjusted income from operations of $33.0 million an increase of
42.6% from the previous fiscal year.
iv) Adjusted Net Income, excluding a US$1.1 million refund of the
previous year's income taxes which was received in October 2007 to
be US$30 million.
v) Fully diluted Adjusted Earnings Per Share, excluding the US$1.1
million income tax refund, to be US$0.60.
CONFERENCE CALL AND WEBCAST
Longtop's management team will host a conference call today at 7:00 P.M. ET, November 19, 2007 (or 4:00 PM U.S. Pacific Time on November 19, 2007 and 8:00 AM, November 20, 2007 Beijing/Hong Kong time). A live audio webcast of the conference call will be available on Longtop's website at http://www.longtop.com/en. To listen to the conference call, please use the dial in numbers below:
USA Toll Number: +1-800-860-2442
International: +1-412-858-4600
A replay of the call will be available for two weeks following the call and can be accessed on the Company website or by dialing the numbers below:
USA Replay Number: 877-344-7529
International: +1-412-317-0088
Passcode: 413057
SHARE-BASED COMPENSATION
In the quarter ended December 31, 2007, excluding any new equity grants made subsequent to this earnings release, Longtop will record share-based compensation expenses of approximately $25.8 million, which includes:
1) $24.0 million related to ordinary shares that prior to the IPO were
given by one of our Founders to Longtop's employees. This is a one
time expense and will not increase or change the total shares
outstanding. It will have no dilutive impact on earnings per share,
nor any impact on cash flow or the net assets of the Company.
2) $0.6 million for shares granted in March 2007 for which share-based
compensation was deferred pending the initial public offering and
will be recorded in the quarter ended December 2007 commensurate with
the IPO.
3) $1.2 million in recurring share-based compensation expenses for
equity we have previously issued to our employees.
NON-GAAP DISCLOSURE ("ADJUSTED")
To supplement the unaudited consolidated financial statements presented in accordance with United States Generally Accepted Accounting Principles ("GAAP"), Longtop's management reports and uses non-GAAP ("Adjusted") measures of revenues, cost of revenues, operating expenses, net income and net income per share, which are adjusted from results based on GAAP. Management believes these non-GAAP financial measures enhance the user's overall understanding of our current financial performance and our prospects for the future and, additionally, uses these non-GAAP financial measures for the general purpose of analyzing and managing the Company's business. Specifically, we believe the non-GAAP financial measures provide useful information to both management and investors by excluding certain items that we believe are not indicative of our core operating results. The presentation of this additional information is not meant to be considered superior to, in isolation from or as a substitute for results prepared in accordance with US GAAP. We encourage investors to examine the reconciling adjustments between the GAAP and non-GAAP measures contained in this release and which we discuss below. Readers are cautioned not to view non-GAAP results on a stand-alone basis or as a substitute for results under GAAP, or as being comparable to results reported or forecasted by other companies.
Definitions of Non-GAAP Measures
Adjusted Revenue is defined as revenue excluding, if applicable: software development revenue deferred on standardized contracts from previous years to financial periods ending on or prior to December 31,2006 because Longtop did not have Vendor Specific Objective Evidence ("VSOE") or evidence that costs of Post Contract Service ("PCS") had been immaterial. Subsequent to January 1,2007, Longtop had evidence that PCS for standardized contracts was immaterial and Adjusted adjustments were not required after this date.
Adjusted Cost of Revenue is defined as cost of revenue excluding, if applicable: (1) non-cash compensation expense and (2) amortization of acquired intangibles.
Adjusted Gross Margin is defined as Adjusted Revenue less Adjusted Cost of Revenue.
Adjusted Operating Expenses is defined as operating expenses excluding, if applicable: (1) non-cash compensation expense,(2) amortization of acquired intangibles and goodwill impairment, and (3) one-time items.
Adjusted Operating Income is defined as Adjusted Gross Margin less Adjusted Operating Expenses.
Adjusted Net Income is defined as Adjusted Operating Income plus/minus other income/(expenses), less income taxes, excluding: (1) one time items and (2) discontinued operations.
Adjusted EPS is defined as Adjusted Net Income divided by diluted shares.
One-Time Items, if applicable, are excluded from Adjusted Operating Income and Adjusted Net Income. These items are one-time in nature and non-recurring, infrequent or unusual, and have not occurred in the past two years or are not expected to recur in the next two years. GAAP results include one-time items.
Non-Cash Expenses That Are Excluded From Our Non-GAAP Measures
Non-cash compensation expense consists principally of expense associated with the grants, including unvested grants assumed in acquisitions, of restricted stock, restricted stock units and stock options. These expenses are not paid in cash, and we include the related shares in our fully diluted shares outstanding, which, for restricted stock units and stock options, are included on a treasury method basis. Longtop's management believes excluding the share-based compensation expense from its non-GAAP financial measure is useful for itself and investors. Further, the amount of share-based compensation expense cannot be anticipated by management and business line leaders and these expenses were not built into the annual budgets and quarterly forecasts, which have been the basis for information Longtop provides to analysts and investors as guidance for future operating performance. As share-based compensation expense does not involve any upfront or subsequent cash outflow, Longtop does not factor this in when evaluating and approving expenditures or when determining the allocation of its resources to its business segments. As a result, the monthly financial results for internal reporting and any performance measure for commission and bonus are based on non-GAAP financial measures that exclude share-based compensation expense.
Amortization of acquired intangibles is a non-cash expense relating to acquisitions. At the time of an acquisition, the intangible assets of the acquired company, such as backlog, customer relationships, and intellectual property are valued and amortized over their estimated lives. While it is likely that we will have significant intangible amortization expense as we continue to acquire companies, we believe that since intangibles represent costs incurred by the acquired company to build value prior to acquisition, they were part of transaction costs.
OTHER INFORMATION
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995
It is currently expected that the Business Outlook will not be updated until the release of Longtop's next quarterly earnings announcement; however, Longtop reserves the right to update its Business Outlook at any time for any reason.
This announcement contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by such terms as "believes," "expects," "anticipates," "intends," "estimates," the negative of these terms, or other comparable terminology. Factors that could cause actual results to differ include the effectiveness, profitability, and marketability of the Company's solutions; the Company's limited operating history; its reliance on a limited number of customers that continue to account for a high percentage of the Company's revenues; risk of payment failure by any of its large customers, which could significantly harm the Company's cash flows and profitability; the ability of the Company to operate effectively as a public company; the period of time for which its current cash will enable the Company to fund its operations; future shortage or availability of the supply of employees; general economic and business conditions; the volatility of the Company's operating results and financial condition; the Company's ability to attract or retain qualified senior management personnel and research and development staff; and other risks detailed in the Company's filings with the Securities and Exchange Commission. These forward-looking statements involve known and unknown risks and uncertainties and are based on current expectations, assumptions, estimates and projections about the companies and the industry. The Company undertakes no obligation to update forward-looking statements to reflect subsequent occurring events or circumstances, or to changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward looking statements are reasonable, they cannot assure you that their expectations will turn out to be correct, and investors are cautioned that actual results may differ materially from the anticipated results. Our actual results of operations for the quarter ended September 30, 2007 are not necessarily indicative of our operating results for any future periods. Any projections in this release are based on limited information currently available to us, which is subject to change.
About Longtop Financial Technologies Limited
Longtop is a leading software development and solutions provider targeting the financial services industry in China. Longtop develops and delivers a comprehensive range of software applications and solutions with a focus on meeting the rapidly growing IT needs of the financial services institutions in China. Longtop has five solution delivery centers, three research centers and thirty-four service centers located in 20 provinces throughout China. Longtop was founded in 1996 by Jia Xiaogong, our Chairman and Lian Weizhou, our CEO, as a system integration Company focusing on the financial services industry in China and made the transition to a software and solutions provider in 2001. For more information, please visit: http://www.longtop.com.
CONSOLIDATED BALANCE SHEETS
March 31, September 30,
2007 2007
Audited Unaudited
(In U.S. dollar thousands, except
share and per share data)
Assets
Current assets:
Cash, bank deposits and cash
equivalents $69,920 $87,301
Restricted cash 3,395 247
Accounts receivable, net 19,495 19,131
Inventories 1,081 2,526
Amounts due from related
parties -- 54
Deferred tax assets 644 173
Other current assets 3,231 9,609
Total current assets 97,766 119,041
Fixed assets, net 4,835 4,779
Intangible assets, net 8,040 1,831
Goodwill 9,112 9,988
Investment in an associate -- --
Deferred tax assets 33 142
Other assets 646 577
Total assets $120,432 $136,358
Liabilities, mezzanine equity and
shareholders’ equity
Current liabilities:
Short-term borrowings $8,669 $21,126
Accounts payable 4,581 1,773
Deferred revenue 4,725 5,755
Amounts due to related parties -- --
Deferred tax liabilities -- --
Accrued and other current
liabilities 9,714 13,875
Total current liabilities 27,689 42,529
Long-term liabilities:
Obligations under capital
leases, net of current portion 219 142
Deferred tax liabilities 617 263
Other non-current liabilities -- 520
Total liabilities 28,525 43,454
Mezzanine equity:
Series A convertible redeemable
preferred shares: $0.01 par value
(6,360,001 and 6,360,001 shares
authorized, issued and outstanding
as of March 31, 2007 and September
30, 2007, respectively, liquidation
value $23,416) $23,214 $23,214
Series B convertible redeemable
preferred shares: $0.01 par value
(3,858,005 and 3,953,861 shares
authorized, issued, and outstanding
as of March 31, 2007 and September
30, 2007, respectively, liquidation
value $24,826) 24,673 24,673
Total mezzanine equity 47,887 47,887
Shareholders’ equity:
Ordinary shares $0.01 par value
(68,640,000 shares authorized,
29,705,267 and 30,434,240 shares
issued and outstanding as of March
31, 2007 and September 30, 2007) $297 $304
Additional paid-in capital 19,120 28,102
Subscription receivable -- --
Retained earnings 22,320 12,215
Accumulated other comprehensive
income 2,283 4,396
Total shareholders’ equity 44,020 45,017
Total liabilities, mezzanine
equity and shareholders’
equity $120,432 $136,358
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended Six Months Ended
September September September September
30,2006 30,2007 30,2006 30,2007
Unaudited Unaudited Unaudited Unaudited
(In U.S. dollar thousands, except share and per
share data)
Revenues:
Software
development $10,608 $18,249 $18,162 $26,489
Other services 2,739 1,951 6,126 5,241
Total revenues 13,347 20,200 24,288 31,730
Less business
taxes (137) (187) (262) (304)
Net revenues 13,210 20,013 24,026 31,426
Cost of revenues:
Software
development 971 2,591 1,724 4,876
Other services 814 972 1,523 1,886
Total cost of
revenues 1,785 3,563 3,247 6,762
Gross profit 11,425 16,450 20,779 24,664
Operating expenses:
Research and
development 384 453 701 890
Sales and marketing 618 716 625 1,628
General and
administrative 2,363 2,107 3,903 3,921
Total operating
expenses 3,365 3,276 5,229 6,439
Income from operations 8,060 13,174 15,550 18,225
Other income (expenses):
Interest income 58 198 127 473
Interest expense (162) (269) (330) (438)
Other (expenses)
income, net 14 32 25 66
Total other income
(expenses) (90) (39) (178) 101
Income before income tax
expense 7,970 13,135 15,372 18,326
Income tax expense (2,423) (1,991) (4,673) (2,185)
Income from continuing
operations 5,547 11,144 10,699 16,141
Loss from
discontinued
operations (114) (1,225) (157) (1,293)
Net income 5,433 9,919 10,542 14,848
Net income per share:
Continuing
operations $0.15 $0.28 $0.32 $0.40
Discontinued
operations $(0.00) $(0.03) $(0.00) $(0.03)
Basic ordinary
share $0.15 $0.25 $0.32 $0.37
Continuing
operations $0.15 $0.28 $0.32 $0.40
Discontinued
operations $(0.00) $(0.03) $(0.00) $(0.03)
Basic preferred
share $0.15 $0.25 $0.32 $0.37
Continuing
operations $0.14 $0.27 $0.28 $0.40
Discontinued
operations $(0.00) $(0.03) $(0.00) $(0.03)
Diluted $0.13 $0.24 $0.28 $0.36
Shares used in
computation of net
income per share:
Basic ordinary
share 29,490,000 29,745,320 29,699,667 29,725,294
Basic preferred
share 6,360,000 10,244,339 3,427,334 10,231,172
Diluted 40,831,880 41,192,580 38,064,537 40,844,608
Adjusted net income per
share (unaudited):
Continuing
operations $0.15 $0.28 $0.32 $0.40
Discontinued
operations $(0.00) $(0.03) $(0.00) $(0.03)
Basic ordinary
share $0.15 $0.25 $0.32 $0.37
Continuing
operations $0.14 $0.27 $0.28 $0.40
Discontinued
operations $(0.00) $(0.03) $(0.00) $(0.03)
Diluted $0.13 $0.24 $0.28 $0.36
Shares used in adjusted
net income per share
computation (unaudited):
Basic ordinary
share 35,850,000 39,989,659 33,127,001 39,956,466
Diluted 40,831,880 41,192,580 38,064,537 40,844,608
Includes share-based
compensation related to:
Cost of revenues software
development $3 $3 $5 $6
General and
administrative expenses $1,124 $166 $1,497 $414
Sales and marketing
expenses $12 $11 $24 $22
Research and development
expenses $-- $-- $-- $--
UNAUDITED CONSOLIDATED ADJUSTED STATEMENTS OF OPERATIONS
Three Months Ended Six Months Ended
September September September September
30,2006 30,2007 30,2006 30,2007
(In U.S. dollar thousands, except share and per
share data)
Revenues:
Software development 10,608 18,249 $18,162 $26,489
Other services 2,739 1,951 6,126 5,241
Total revenues 13,347 20,200 24,288 31,730
Less business taxes (137) (187) (262) (304)
Net revenues 13,210 20,013 24,026 31,426
Software development
revenue adjustments:
Revenue deferred to
2006 because of
lack of VSOE (2,143) -- (3,846) --
Adjusted revenues:
Software development 8,465 18,249 14,316 26,489
Other services 2,739 1,951 6,126 5,241
Total revenues 11,204 20,200 20,442 31,730
Less business taxes (137) (187) (262) (304)
Net adjusted
revenues 11,067 20,013 20,180 31,426
Cost of revenues:
Software development 971 2,591 1,724 4,876
Other services 814 972 1,523 1,886
Total cost of
revenues 1,785 3,563 3,247 6,762
Cost of revenue
adjustments:
Share-based
compensation
software
development (3) (3) (5) (6)
Amortization of
acquired intangible
assets other
services (222) (244) (295) (482)
Adjusted cost of revenues:
Software development 968 2,588 1,719 4,870
Other services 592 728 1,228 1,404
Total adjusted cost
of revenues 1,560 3,316 2,947 6,274
Gross profit 11,425 16,450 20,779 24,664
Adjusted gross profit 9,507 16,697 17,233 25,152
Operating expenses:
Research and
development 384 453 701 890
Sales and marketing 618 716 625 1,628
General and
administrative 2,363 2,107 3,903 3,921
Total operating
expenses 3,365 3,276 5,229 6,439
Operating expense
adjustments:
Share-based
compensation
research and
development -- -- -- --
Share-based
compensation sales
and marketing (12) (11) (24) (22)
Share-based
compensation
general and
administrative (1,124) (166) (1,497) (414)
Non-recurring costs
general and
administration (15) -- (160) --
Initial public
offering
expenses
written off (15) -- (160) --
Provision for
Deposits -- -- -- --
Dividend to
Founders
recorded as
compensation -- -- -- --
Adjusted operating
expenses:
Research and
development 384 453 701 890
Sales and marketing 606 705 601 1,606
General and
administrative 1,224 1,941 2,246 3,507
Total adjusted
operating expenses 2,214 3,099 3,548 6,003
Income from operations 8,060 13,174 15,550 18,225
Adjusted income from
operations 7,293 13,598 13,685 19,149
Other income (expenses):
Interest income 58 198 127 473
Interest expense (162) (269) (330) (438)
Other (expenses)
income, net 14 32 25 66
Total other income
(expenses) (90) (39) (178) 101
Income before income tax
expense 7,970 13,135 15,372 18,326
Adjusted income before
income tax expense 7,203 13,559 13,507 19,250
Income tax expense (2,423) (1,991) (4,673) (2,185)
Income from continuing
operations 5,547 11,144 10,699 16,141
Adjusted net income 4,780 11,568 8,834 17,065
Loss from
discontinued
operations (114) (1,225) (157) (1,293)
Net income 5,433 9,919 10,542 14,848
Net income per share:
Continuing
operations $0.15 $0.28 $0.32 $0.40
Discontinued
operations $(0.00) $(0.03) $(0.00) $(0.03)
Basic ordinary share $0.15 $0.25 $0.32 $0.37
Continuing
operations $0.15 $0.28 $0.32 $0.40
Discontinued
operations $(0.00) $(0.03) $(0.00) $(0.03)
Basic preferred
share $0.15 $0.25 $0.32 $0.37
Continuing
operations $0.14 $0.27 $0.28 $0.40
Discontinued
operations $(0.00) $(0.03) $(0.00) $(0.03)
Diluted $0.13 $0.24 $0.28 $0.36
Adjusted net income per
share:
Basic ordinary share $0.13 $0.29 $0.27 $0.43
Diluted $0.12 $0.28 $0.23 $0.42
Shares used in computation
of net income and
adjusted net income per
share:
Basic ordinary share 29,490,000 29,745,320 29,699,667 29,725,294
Basic preferred
share 6,360,000 10,244,339 3,427,334 10,231,172
Diluted 40,831,880 41,192,580 38,064,537 40,844,608
