Total and service revenue increase 92.8 and 241.6 percent year over year, respectively
Company raises full-year 2008 total revenue guidance
BEIJING, June 23 /Xinhua-PRNewswire/ -- eFuture Information Technology Inc. (Nasdaq: EFUT; “eFuture”), a leading provider of front-end supply chain management software and services in China, today announced its unaudited financial results for the first quarter ended March 31, 2008.
Financial Results Highlights for the First Quarter of 2008
-- Total revenue for the first quarter of 2008 was RMB14.0 million (US$2.0
million), an increase of 92.8% from the first quarter of 2007.
-- Software revenue for the first quarter of 2008 was RMB7.6 million
(US$1.1 million), an increase of 33.5% from the first quarter of 2007.
-- Service fee income for the first quarter of 2008 was RMB5.0 million
(US$0.7 million), an increase of 241.6% from the first quarter of 2007.
-- Gross profit for the first quarter of 2008 was RMB4.7 million (US$0.7
million), an increase of 31.8% from the first quarter of 2007.
Excluding amortization of acquired technology, gross profit for the
first quarter of 2008 would have been RMB8.6 million (US$1.2 million),
an increase of 130.9% from the first quarter of 2007.
-- Gross margin for the first quarter of 2008 decreased to 33.6% from
49.2% in the first quarter of 2007. Excluding amortization of acquired
technology, gross margin for the first quarter of 2008 would have been
61.2%, compared to 51.1% in the first quarter of 2007.
-- Net loss for the first quarter of 2008 was RMB9.2 million
(US$1.3 million), an increase of 658.2% over the first quarter of 2007.
“We are pleased to report strong top-line growth in a traditionally weak first fiscal quarter that includes the long Chinese New Year holiday and this year was marked by severe snow storms across large parts of China. With a strong start to 2008, we are optimistic about our prospects and our earnings per share for the full year,” said Mr. Adam Yan, eFuture’s chairman and chief executive officer. “In addition, a larger base of installed clients contributed to strong organic growth. Service revenue was up 241.6%, the strongest growth of any quarter in ten years, with software revenue growth remaining solid. Moreover, we have strengthened our position and significantly broadened our opportunity in the fast-growing retail market in China with the successful integration of our Guangzhou Royalstone acquisition. Looking forward to the remainder of 2008, we expect that our B2B services, including http://www.bfuture.com.cn and http://www.jindian.com.cn, will begin to contribute to our revenue and drive value for retailers and their suppliers.”
First Quarter of 2008 Operational Highlights
-- Sales contracts in the first quarter of 2008 increased 102.5% to
RMB18.0 million (US$2.6 million) from RMB8.8 in the first quarter of
2007.
-- Service sales contracts in first quarter of 2008 increased 662.8% to
RMB8.6 million (US$1.2 million) from RMB1.13 million in the first
quarter of 2007.
-- Total new orders increased 350% to 117 orders from 26 in the first
quarter of 2007.
“During the first quarter, we placed particular emphasis on integrating our acquisitions completed in 2007 into a single platform,” Mr. Yan continued. “We worked to smoothly incorporate culture, strengthen back-office resource integration and improve processes to streamline internal operations and reduce software deployment costs. This organic growth strategy has translated into a 12% increase in gross margins, excluding amortization of acquired technology.”
As part of its effort to streamline its operations to promote organic growth, the company organized its software business according to six vertical strategy business areas: small and medium business, key accounts, department stores and shopping malls, grocery and supermarkets, specialty stores and fast-moving consumer goods.
Financial Results for the First Quarter of 2008
Revenue
eFuture reported total revenue of RMB14.0 million (US$2.0 million) for the first quarter of 2008, a 92.8% increase from RMB7.3 million in the first quarter of 2007.
Software sales in the first quarter of 2008 increased 33.5% to RMB7.6 million (US$1.1 million) from RMB5.7 million in the first quarter of 2007. Software sales contributed 54.0% to total revenue in the first quarter of 2008, compared to 78.0% in the first quarter of 2007.
Hardware sales in the first quarter of 2008 increased 1020% to RMB1.4 million (US$0.2 million) from RMB0.1 million in the first quarter of 2007. Hardware sales contributed 10.1% to total revenue in the first quarter of 2008, compared to 1.7% in the first quarter of 2007.
Service fee income in the first quarter of 2008 increased 241.6% to RMB5.0 million (US$0.7 million) from RMB1.5 million in the first quarter of 2007. Service fee income contributed 36.0% to total revenue in the first quarter of 2008, compared to 20.3% in the first quarter of 2007. The increase was largely due to eFuture’s policy to provide free maintenance for its products in the first year of operation, after which the company begins to charge maintenance and support fees.
Gross Margins
Gross profit for the first quarter of 2008 was RMB4.7 million (US$0.7 million), a 31.8% increase from RMB3.6 million in the first quarter of 2007. Excluding amortization of acquired technology, gross profit for the first quarter of 2008 would have been RMB8.6 million (US$1.2 million), an increase of 130.8% from the first quarter of 2007.
Consolidated gross margin for the first quarter of 2008 was 33.6%, compared to 49.2% in the first quarter of 2007 and 43.5% in the fourth quarter of 2007. The decrease in gross margin was largely due to the amortization of acquired technology of RMB3.8 million (US$0.55 million), which represented 27.5% of total revenue in the first quarter of 2008, compared to 1.9% in the first quarter of 2007. Excluding amortization of acquired technology, gross margin for the first quarter of 2008 would have been 61.2%, compared to 51.1% in the first quarter of 2007.
Operating Expenses
Research and development expenses in the first quarter increased 37.2 percent year over year to RMB0.2 million (US$24 thousand). The increase in research and development was mainly due to the acquisition of Royalstone last year, which led to the integration of two research and development teams.
General and administrative expenses in the first quarter increased 169.7 percent year over year to RMB7.9 million (US$1.1 million). The increase in general and administrative expenses was mainly due to RMB2.3 million (US$0.3 million) of bad debt expenses caused by significantly increased accounts receivable. We had US$2 million of accounts receivable in the first quarter, an 84.9% increase from the same period of 2007.General and administrative expenses for the first quarter of 2008 were 56.2 percent of total revenues, compared to 40.1 percent in the first quarter of 2007 and 20.8 percent in the fourth quarter of 2007.
Selling and distribution expenses in the first quarter increased 73.0 percent year over year to RMB3.8 million (US$536 thousand). The increase in selling and distribution expenses was partially due to a significant increase in our sales contracts. Selling and distribution expenses for the first quarter of 2008 were 26.8 percent of total revenues, compared to 29.9 percent in the first quarter of 2007 and 8.2 percent in the fourth quarter of 2007.
Total share-based compensation expenses in the first quarter of 2008 were RMB0.8 million (US$0.1 million).
Operating loss in the first quarter of 2008 was RMB7.1 million (US$1.0 million), a 332.5% increase from RMB1.6 million in the first quarter of 2007. Operating margin was -50.5% in the first quarter of 2008, compared to -22.5% in the first quarter 2007 and 14.1% in the fourth quarter of 2007.
Net Income
Net loss for the first quarter of 2008 was RMB9.2 million (US$1.3 million), compared to net losses of RMB1.2 million in the first quarter of 2007 and net loss RMB24.6 million in the fourth quarter of 2007. Net margins were -65.8% in the first quarter of 2008 compared to -16.74% in the first quarter of 2007 and -50.6% in the fourth quarter of 2007. The increase in net loss and decrease in net margin was due to a number of factors including amortization of acquired technology from the acquisitions completed in 2007 of RMB3.8 million (US$0.6 million), bad debt expenses of RMB2.4 million (US$0.3 million) as a result of a large increase in accounts receivable at the end of the quarter.
Basic and diluted losses per share for the first quarter of 2008 were RMB3.14 (US$0.45) and RMB3.14 (US$0.45), respectively.
EBITDA
EBITDA (non-GAAP) for the first quarter of 2008 was RMB-1.39 million (US$-0.2 million), a decrease of 101.1% from the first quarter of 2007. First quarter of 2008 adjusted net loss (non-GAAP) was RMB3.2 million (US$0.5 million), an increase of 732% from the first quarter of 2007.
Adjusted non-GAAP diluted losses per share for the first quarter of 2008 was RMB1.09 (US$0.16).
Cash Flow and Capital Expenditures
As of March 31, 2008, the company had RMB59.3 million (US$8.5 million) in cash and cash equivalents and short-term investments. Net cash generated from operating activities and capital expenditures in the first quarter of 2008 were RMB-8.2 million (US$-1.2 million) and RMB2.2 million (US$0.3 million), respectively.
As of March 31, 2008 the company had 627 employees compared to 588 employees as of December 31, 2007.
Business Outlook for 2008
The company has raised its full-year 2008 total revenue guidance to be in the range of approximately US$19 to US$20 million, representing annual growth of 65 to 74% over 2007. This forecast is a current and preliminary view and is subject to change.
Conference Call Information
eFuture’s management will hold an earnings conference call at 8:30 p.m. on June 23, 2008 U.S. Eastern Time (8:30 a.m. on June 24, 2008 Beijing/Hong Kong Time).
Dial-in details for the earnings conference call are as follows:
U.S. and International: +1-888-710-9688
Mainland China: +86-10-5851-1260
Hong Kong: +852-8306-5032
Please dial in 10 minutes before the call is scheduled to begin and request to be connected to the "eFuture earnings call."
Additionally, an archived webcast of the conference call will be available on the company’s website at http://www.e-future.com.cn .
About eFuture Information Technology Inc.
eFuture is a leading provider of front-end supply chain management software and services in China. eFuture provides integrated software and service solutions to manufacturers, distributors, wholesalers, logistics companies and retailers in China’s front-end supply chain market, especially in the retail and Fast Moving Consumer Goods industries. eFuture currently serves more than 1,000 clients, including Fortune 500 companies, over 770 retailers and over 200 distributors operating in China. eFuture is also one of IBM’s premier business partners in Asia Pacific and is a strategic partner with Oracle, Microsoft, JDA, Motorola and Samsung Network China. The company has over 650 employees and 20 branch offices across China.
For more information about eFuture, please visit
http://www.e-future.com.cn/.
Safe Harbor
This announcement contains forward-looking statements. These statements are made under 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,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates” and similar statements. Among other things, 2008 financial outlook and quotations from management in this announcement, as well as strategic and operational plans, contain forward-looking statements. eFuture may also make written or oral forward-looking statements in periodic reports to the Securities and Exchange Commission (the “SEC”), in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to first parties. Statements that are not historical facts, including statements about the company’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: eFuture’s anticipated growth strategies; eFuture’s future business development, results of operations and financial condition; expected changes in the company’s revenues and certain cost or expense items; eFuture’s ability to attract customers and leverage its brand; trends and competition in the software industry; the company’s ability to hire, train and retain qualified managerial and other employees; the company’s ability to develop new software’s and pilot new business model at desirable locations in a timely and cost-effective manner; the expected growth of the Chinese economy software market in retail and consumer goods industries; and Chinese governmental policies relating to private managers and operators of software and applicable tax rates.
Further information regarding these and other risks is included in eFuture’s annual report on Form 20-F and other documents filed with the SEC. All information provided in this press release and in the attachments is as of June 24, 2008, and the company undertakes no duty to update such information or any other forward-looking information, except as required under applicable law.
This announcement contains translations of certain amounts from Chinese Renminbi (“RMB”) into U.S. dollars (“US$”) at specified rates solely for the convenience of the reader. Unless otherwise noted, all currency translations are made at a rate of RMB7.012 to US$1.00, the effective noon buying rate on March 31, 2008.
Non-GAAP Financial Measures
To supplement eFuture’s unaudited consolidated financial results presented in accordance with U.S. GAAP, eFuture uses the following non-GAAP measures defined as non-GAAP financial measures by the SEC: adjusted EBITDA excluding amortization of acquired software technology, amortization of intangibles, share-based compensation expenses, depreciation, adjusted net income excluding amortization of acquired software technology, amortization of intangibles, share-based compensation expenses and accretion on convertible notes, adjusted basic and diluted earnings per share excluding amortization of acquired software technology, amortization of intangibles, share-based compensation expenses and accretion on convertible notes.
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 U.S. GAAP.
eFuture believes that these non-GAAP financial measures provide meaningful supplemental information regarding its performance and liquidity by excluding expenses that may not be indicative of its operating performance from a cash perspective or be indicative of its operating performance. eFuture 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. These non-GAAP financial measures also facilitate management’s internal comparisons to eFuture’s historical performance and liquidity. eFuture computes its non-GAAP financial measures using the same consistent method from quarter to quarter. The company believes these non-GAAP financial measures are useful to investors in allowing for greater transparency with respect to supplemental information used by management in its financial and operational decision-making. The accompanying paragraphs have more details on the reconciliations between GAAP financial measures that are most directly comparable to non-GAAP financial measures.
eFuture’s management also believes that EBITDA, defined as earnings before interest, income tax expense, depreciation and amortization is a useful financial metric to assess its operating and financial performance before the impact of investing and financing transactions and income taxes. In addition, eFuture’s management believes that EBITDA is widely used by other companies in the software industry and may be used by investors as a measure of its financial performance. Given the significant investments that eFuture has made in property, equipment, depreciation and amortization expense comprises a meaningful portion of the company’s cost structure. eFuture’s management believes that EBITDA will provide investors with a useful tool for comparability between periods because it eliminates depreciation and amortization expense attributable to capital expenditures. The presentation of EBITDA should not be construed as an indication that the company’s future results will be unaffected by other charges and gains eFuture considers to be outside the ordinary course of its business.
The use of EBITDA and adjusted EBITDA has certain limitations. Depreciation and amortization expense for various long-term assets, income tax expense, interest expense and interest income have been and will be incurred and are not reflected in the presentation of EBITDA. Further, share-based compensation expenses have been and will be incurred and are not reflected in the presentation of adjusted EBITDA. Each of these items should also be considered in the overall evaluation of eFuture’s financial results. The term EBITDA or adjusted EBITDA is not defined under U.S. GAAP, and EBITDA or adjusted EBITDA is not a measure of net income, operating income, operating performance or liquidity presented in accordance with U.S. GAAP. When assessing eFuture’s operating and financial performance, you should not consider this data in isolation or as a substitute for its net income, operating income or any other operating performance measure that is calculated in accordance with U.S. GAAP. In addition, the company’s EBITDA and adjusted EDITDA may not be comparable to EBITDA or similarly titled measures utilized by other companies since such other companies may not calculate EBITDA in the same manner as eFuture does.
E-FUTURE INFORMATION TECHNOLOGY INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
USD=RMB 7.0120
Chinese Yuan (Renminbi) U.S. Dollars
March 31, December 31,
2007 2008 2008
(Audited) (Unaudited) (Unaudited)
ASSETS
Current assets
Cash and cash equivalents 120,286,585 59,283,677 8,454,603
Trade receivables, less
allowance for doubtful
accounts of RMB2,109,910 and
RMB4,695,898, respectively 7,488,146 13,845,503 1,974,544
Refundable value added tax 2,120,021 2,351,243 335,317
Deposits 1,038,943 209,660 29,900
Advances to employees 2,284,645 2,815,950 401,590
Advances to suppliers 2,366,200 657,724 93,800
Other receivables 125,544 5,681,883 810,309
Prepaid expenses 453,157 880,875 125,624
Inventory 5,772,441 13,771,667 1,964,014
Total current assets 141,935,681 99,498,181 14,189,701
Non-current assets
Long-term investments 1,500,000 4,901,912 699,075
Deferred loan costs, net of
RMB1,238,854 of amortization 10,927,691 4,539,826 647,437
Deferred assets -- 171,583 24,470
Property and equipment, net
of accumulated depreciation
of RMB4,690,856 and
RMB5,191,489, respectively 1,072,124 1,969,249 280,840
Intangible assets, net of
accumulated amortization of
RMB8,678,751 and
RMB24,556,344 respectively 10,704,703 42,288,011 6,030,806
Goodwill -- 46,814,929 6,676,402
Total non-current assets 24,204,518 100,685,509 14,359,030
Total assets 166,140,199 200,183,690 28,548,729
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Trade accounts payable 330,220 4,052,516 577,940
Other payables -- 2,209,216 315,062
Accrued expenses 4,317,348 3,566,471 508,624
Accrued interest -- 76,619 10,927
Taxes payable 4,487,920 5,101,258 727,504
Deferred Tax -- 4,826,454 688,313
Advances from customers 12,467,830 15,564,504 2,219,695
Royalstone acquisition
obligation, current portion -- 15,860,198 2,261,865
Health Filed acquisition
obligation -- 3,175,318 452,841
Make-whole obligation,
current portion -- 707,312 100,872
Convertible note payable,
current portion 43,065,681 2,785,890 397,303
Total current liabilities 64,668,999 57,925,757 8,260,946
Long-term liabilities
Royalstone acquisition
obligation, net of current
portion -- 6,093,683 869,036
Make-whole obligation, net of
current portion -- 9,290,082 1,324,883
12% RMB75,108,000 ($10,000,000)
convertible note payable,
net of RMB53,379,624 unamortized
discount based on an imputed
interest rate of 28.9%, net of
current portion -- 6,770,666 965,583
Minority shareholder interests -- (375,070) (53,490)
Total long-term liabilities -- 21,779,360 3,106,013
Shareholders’ equity
Ordinary shares, $0.0756 U.S.
dollars (RMB0.6257) par
value; 6,613,756 shares
authorized; 2,633,500
shares and 2,633,500
shares outstanding (2,833,580
shares pro forma),
respectively 1,647,781 1,839,898 262,393
Additional paid-in capital 115,919,796 169,131,602 24,120,308
Statutory reserves 3,084,020 3,084,020 439,820
Accumulated foreign currency
translation adjustment (545,625) -- --
Accumulated deficit (18,634,772) (53,576,948) (7,640,751)
Total shareholders’ equity 101,471,200 120,478,573 17,181,770
Total liabilities and
shareholders’ equity 166,140,199 200,183,690 28,548,729
E-FUTURE INFORMATION TECHNOLOGY INC. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF OPERATION INFORMATION
USD=RMB 7.0120
Three Months Ended
March December
31,2007 31,2007 March 31,2008
RMB RMB RMB US$
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Revenues
Software sales 5,667,407 18,702,618 7,565,110 1,078,881
Hardware sales 125,812 9,816,609 1,409,113 200,957
Service fee
income 1,475,465 19,990,060 5,040,249 718,803
Total Revenues 7,268,684 48,509,287 14,014,472 1,998,641
Cost of revenues
Cost of
software 2,317,874 8,363,521 1,845,125 263,138
Cost of
hardware 145,778 7,181,112 1,204,786 171,818
Cost of
service fee
income 396,408 4,950,478 1,493,129 212,939
Amortization
of acquired
technology 137,500 6,002,248 3,860,243 550,520
Amortization
of software
costs 695,172 904,237 896,856 127,903
Total Cost of
Revenue 3,692,732 27,401,597 9,300,139 1,326,318
Gross Profit 3,575,952 21,107,691 4,714,333 672,323
Expenses
Research and
development 121,955 194,159 167,288 23,857
General and
administrative 2,918,162 10,097,655 7,870,673 1,122,458
Selling and
distribution
expenses 2,173,488 3,986,341 3,759,182 536,107
Total Expenses 5,213,605 14,278,155 11,797,143 1,682,422
Profit from
operations (1,637,652) 6,829,536 (7,082,810) (1,010,099)
Interest income 1,252,499 764,491 112,611 16,060
Interest expense (11,358) 444,949 (314,520) (44,855)
Amortization
of discount
on notes payable -- (28,208,015) (488,504) (69,667)
Amortization
of loan costs -- (5,373,092) (242,378) (34,566)
Income (loss)
on investments -- 844,938 (558,389) (79,633)
Foreign
exchange loss (820,292) 99,738 (805,787) (114,915)
Minority
shareholder
income -- 32,520 154,491 22,032
Net Income
(loss) (1,216,803) (24,564,935) (9,225,286) (1,315,643)
Earnings per
ordinary share
Basic (0.46) (9.33) (3.14) (0.45)
Diluted (0.46) (9.33) (3.14) (0.45)
E-FUTURE INFORMATION INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
USD=RMB 7.0120
Chinese Yuan (Renminbi) U.S. Dollars
March 31, March 31,
2007 2008 2008
(Audited) (Unaudited) (Unaudited)
Cash flows from
operating activities:
Net income (loss) (1,216,803) (9,225,286) (1,315,643)
Adjustments to reconcile
net income (loss) to
net cash provided by
(used in) operating
activities:
Depreciation 113,986 150,246 21,427
Amortization of
intangible assets 832,672 4,757,099 678,423
Amortization of discount
on notes payable -- 488,504 69,667
Amortization of deferred
loan costs -- 242,378 34,566
Investment income 558,389 79,633
Compensation expense for
options issued to
employees -- 785,699 112,051
Minority interest -- (154,491) (22,032)
Change in assets and
liabilities:
Accounts receivable (3,035,187) 2,563,830 365,635
Refundable value added
tax 350,920 1,339,792 191,071
Deposits (994,000) (52,965) (7,553)
Advances to employees (1,086,044) 760,997 108,528
Advances to suppliers (1,923,170) -- --
Other receivables 45,576 (2,104,918) (300,188)
Prepaid expenses 81,598 (18,222) (2,599)
Inventories (1,651,305) (8,021,716) (1,143,998)
Trade payables (900,562) 206,643 29,470
Other payables -- 84,689 12,078
Accrued expenses 375,730 170,681 24,341
Accrued interest -- (201,801) (28,779)
Taxes payable (694,695) (2,595,273) (370,119)
Deferred Tax -- (455,622) (64,977)
Advances from customers 4,346,787 2,538,526 362,026
Net cash provided by
operating activities (5,354,496) (8,182,818) (1,166,974)
Cash flows from
investing activities:
Purchases of property
and equipment (171,529) (54,455) (7,766)
Payments for software (1,129,131) (2,015,976) (287,504)
Long-term investments (1,500,000) 558,389 79,633
Payment to purchase net
assets of Royalstone -- -- --
Loan to Guarantor -- -- --
Net cash used in
investing activities (2,800,660) (1,512,041) (215,636)
Cash flows from
financing activities:
Issuance of ordinary
shares for cash, net of
offering costs paid 66,414,309 2,667,829 380,466
Issue convertible notes -- -- --
Short-term loan -- (456,804) (65,146)
Net cash provided by
(used in) financing
activities 66,414,309 2,211,025 315,320
Effect of exchange rate
changes on cash 562,694 (459,836) (65,578)
Net increase in cash 58,821,848 (7,943,671) (1,132,868)
Cash and cash
equivalents at
beginning of period 61,464,737 67,227,348 9,587,471
Cash and cash
equivalents at end of
period 120,286,585 59,283,677 8,454,603
Supplemental cash flow
information
Interest paid 66,593 305,137 43,516
E-FUTURE INFORMATION TECHNOLOGY INC. AND SUBSIDIARY
NON-GAAP MEASURES PERFORMANCE
USD=RMB 7.0120
Three Months Ended
March December
31,2007 31,2007 March 31,2008
RMB RMB RMB US$
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
NON-GAAP OPERATING
INCOME (LOSS) AND
ADJUSTED EBITDA
Operating income
(loss) (GAAP
Basis) (1,637,652) 6,829,536 (7,082,810) (1,010,098)
Adjustments for
non-GAAP measures
of performance:
Add back
amortization of
acquired software
technology -- 6,002,248 3,860,243 550,520
Add back
amortization of
intangibles 832,672 904,237 896,856 127,903
Add back share-
based
compensation
expenses -- 2,663,105 785,699 112,051
Adjusted non-GAAP
operating income (804,980) 16,399,125 (1,540,011) (219,624)
Add back
depreciation 113,986 163,599 150,246 21,427
Adjusted EBITDA
(Earnings before
interest, taxes,
depreciation and
amortization) (690,994) 16,562,724 (1,389,765) (198,198)
NON-GAAP OPERATING
INCOME (LOSS) AND
ADJUSTED EBITDA,
as a percentage
of revenue
Operating income
(loss) (GAAP
BASIS) -23% 14% -51% -15%
Adjustments for
non-GAAP measures
of performance:
Amortization of
acquired software
technology -- 12% 28% 28%
Amortization of
intangibles 11% 2% 6% 6%
Share-based
compensation
expenses -- 5% 6%
Adjusted non-GAAP
operating income -11% 34% -11% 19%
Depreciation 2% 0% 1% 1.1%
Adjusted EBITDA
(Earnings before
interest, taxes,
depreciation and
amortization) -10% 34% -10% 20%
NON-GAAP EARNINGS
PER SHARE
Net Income(Loss) (1,216,803) (24,564,935) (9,225,286) (1,315,643)
Amortization of
acquired software
technology -- 6,002,248 3,860,243 550,520
Amortization of
intangibles 832,672 904,237 896,856 127,903
Accretion on
convertible notes -- 28,208,015 488,504 69,667
Share-based
compensation
expenses -- 2,663,105 785,699 112,051
Adjusted Net
income (384,131) 13,212,670 (3,193,983) (455,502)
Adjusted non-GAAP
diluted earnings
per share (0.15) 4.41 (1.09) (0.16)
Shares used to
compute non-GAAP
diluted earnings
per share 2,633,500 2,997,921 2,934,419 2,934,419
