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 For more information, please contact: Longtop Financial
Technologies Limited Huiying Yang Phone: +86-592-239-6888 x1312
Email: Financial Dynamics Julian Wilson Phone: +86-10-8591-1951
Email: Peter Schmidt Phone: +86-10-8591-1953 Email: DATASOURCE:
Longtop Financial Technologies Limited CONTACT: Huiying Yang of
Longtop Financial Technologies Limited +86-592- 239-6888 x1312 or ;
or Financial Dynamics - Julian Wilson, +86- 10-8591-1951 or ; or
Peter Schmidt, +86-10-8591-1953 or , both for Longtop Financial
Technologies Limited Web Site: http://www.longtop.com/en
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