BEIJING, May 15, 2012 /PRNewswire-Asia-FirstCall/ --
Yucheng Technologies Limited (Nasdaq: YTEC) ("Yucheng," the
"Company," "we," "us" and "our"), a leading provider of IT
Solutions to the financial services industry in China, today announced unaudited financial
results for the first quarter ended March
31, 2012.
- First quarter software & solutions revenues of US$15.0 million, an increase of 56.1% year over
year;
- First quarter net revenue of US$16.5
million, an increase of 43.7% year over year, and first
quarter net revenue (Non-GAAP)(1) of US$16.5
million, an increase of 43.7% year over year;
- First quarter operating income of US0.2 million, an increase of
14.5% year over year, and first quarter operating income
(Non-GAAP)(4) of US$0.9 million, an
increase of 89.6% year over year;
- First quarter operating margin of revenue of 1.2%, as compared
to 1.6% in the prior year period, and first quarter operating
margin of net revenue (Non-GAAP)(5) of 5.2%, as compared to 3.9% in
the prior year period;
- First quarter net loss of US$0.5
million, or loss of US$0.03
per share, as compared to net income of US$27.6 thousand, or US$0.00 per share in the prior year period, and
first quarter net income (Non-GAAP)(6) of US$0.1 million, or US$0.01 per share, as compared to US$0.3 million, or US$0.02 per share in the prior year period
"We continued the strong growth in software & solutions
revenues at the rate of 56.1% in the quarter, offsetting the
negative impact from the declining revenues in platform &
maintenance services businesses. On the other hand, increasing
costs, notably increasing wages, more subcontracting to strategic
partners, and research and development costs, caused declining
gross margin compared with last year. We expect this trend to
continue in the second quarter and rest of the year," said Mr.
Weidong Hong, CEO of Yucheng
Technologies. "Although the margin pressure will be persistent in
the near term, we are also seeing gradual pricing increase from our
customers that will mitigate partially the pressure. As a result,
we are still comfortable with our full year guidance. Furthermore,
we are optimistic about the long term potential of the company with
our leading position in the industry."
First Quarter 2012 Financial Results
Total revenues for the first quarter of 2012 were US$16.5 million, an increase of 43.7% year over
year and a decrease of 45.2% sequentially. Net revenues
(non-GAAP)for the first quarter of 2012 were US$16.5 million, an increase of 43.7% year over
year and a decrease of 45.2% sequentially. The year over year
increase in revenues was primarily due to the strong demand from
our customers for our software solutions. The sequential decrease
in revenues reflected the inherent seasonality.
Gross margin for the first quarter of 2012 was 43.8%, compared
to 50.6% in the prior year period and 43.7% in the previous
quarter. Gross margin of net revenues (non-GAAP)(2) for the first
quarter of 2012 was 43.8%, compared to 50.6% in the prior year
period and 43.7% in the previous quarter. The decrease in gross
margin year over year was due mainly to the increase in labor
costs, higher research and development costs, the decrease of
resale services and increased subcontracting to our strategic
partner where our margin is significantly lower.
Software & solutions revenues for the first quarter of 2012
were US$15.0 million, an increase of
56.1% year over year and a decrease of 44.3% sequentially to
reflect the inherent seasonality. Gross margin of the
software & solutions business for the first quarter of 2012 was
43.0%, compared to 48.3% in the prior year period and 43.0% in the
previous quarter. The decrease in the gross margin was primarily
due to the increase in labor costs, higher research and development
costs, and increased subcontracting to our strategic partner where
our margin is significantly lower.
Platform & maintenance services revenues for the first
quarter of 2012 were US$1.5 million,
compared to US$1.9 million in the
prior year period and US$3.2 million
in the previous quarter. Net revenues of platform & maintenance
services (non-GAAP) for the first quarter of 2012 were US$1.5 million, compared to US$1.9 million in the prior year period and
US$3.2 million in the previous
quarter.
Gross margin of platform & maintenance services business for
the first quarter of 2012 was 51.2%, compared to 62.7% in the prior
year period and 49.9% in the previous quarter. Gross margin of net
revenues (non-GAAP) for platform maintenance services in first
quarter of 2012 was 51.2%, compared to 62.7% in the prior year
period and 49.2% in the previous quarter. The decrease in gross
margin (non-GAAP) was due mainly to the decrease of resale
services.
Total operating expenses for the first quarter of 2012 increased
24.6% year over year and decreased 24.2% sequentially to
US$7.0 million. Total operating
expenses (non-GAAP)(3) for the first quarter of 2012 increased
18.8% year over year and decreased 27.1% sequentially to
US$6.4 million. The year-over-year
increase was attributable mainly to the increase of labor costs,
rental fees, and research and development expenses for enhancing
our research and development capability.
Income from continuing operations for the first quarter of 2012
was US$0.2 million, compared to
US$0.2 million in the prior year
period and US$3.9 million in the
previous quarter. Income from continuing operations (non-GAAP) for
the first quarter of 2012 was US$0.9
million, compared to US$0.5
million in the prior year period and US$4.4 million in the previous quarter.
Operating margin of total revenue was 1.2% for the first quarter
of 2012, compared to 1.6% in the prior year period and 13.0% in the
previous quarter. Operating margin of net revenues (non-GAAP) was
5.2% for the first quarter of 2012, compared to 3.9% in the prior
year period and 14.7% in the previous quarter.
In the first quarter of 2012, the Company recorded net loss of
US$0.5 million, or loss of
US$0.03 per diluted share, compared
to US$27.6 thousand, or US$0.00 per diluted share in the prior year
period and net income of US$3.0
million, or US$0.16 per
diluted share in the previous quarter.
Net income (non-GAAP) was US$0.1
million in the first quarter of 2012 or US$0.01 per diluted share. Net income (non-GAAP)
in the prior year period was US$0.3
million or US$0.02 per diluted
share. Net income (non-GAAP) in the previous quarter was
US$3.5 million or US$0.18 per diluted share.
As of March 31, 2012, Yucheng had
cash and cash equivalents and restricted cash totaling US$14.1 million, compared to US$32.5 million as of December 31, 2011 and US$16.0 million as of March 31, 2011.Operating cash flow in the first
quarter of 2012 was a net outflow of US$18.4million.
Business Outlook
For the quarter ending June 30,
2012, Yucheng expects net revenue (non-GAAP) to be
approximately US$19.0 million and net
income (non-GAAP) per share of US$0.10.
YUCHENG
TECHNOLOGIES LIMITED AND SUBSIDIARIES
|
Consolidated Balance Sheets (Unaudited)
|
March 31,
2012 and Dec 31, 2011
|
|
|
|
|
2012.03.31
|
2011.12.31
|
|
USD
|
USD
|
|
|
|
Assets
|
|
|
Current
assets:
|
|
|
Cash and
cash equivalents
|
14,075,661
|
32,503,415
|
Trade
accounts receivable, net
|
43,083,117
|
38,811,858
|
Costs and
estimated earnings in excess of billings on uncompleted
contracts
|
29,002,458
|
26,882,642
|
Due from
related parties
|
2,390,622
|
1,989,818
|
Inventories
|
3,389,124
|
170,952
|
Pre-contract costs
|
6,421,658
|
3,937,775
|
Other
current assets
|
8,299,062
|
8,987,693
|
Deferred
tax assets
|
211,134
|
210,913
|
|
|
|
Total
current assets
|
106,872,836
|
113,495,066
|
|
|
|
Investments under equity method
|
4,972,177
|
5,369,949
|
Properties
and equipment
|
8,825,907
|
8,800,683
|
Less:
Accumulated depreciation
|
(4,456,969)
|
(4,188,825)
|
Properties
and equipment, net
|
4,368,938
|
4,611,858
|
Intangible
assets, net
|
6,279,899
|
6,484,638
|
Goodwill
|
30,028,693
|
29,997,238
|
Deferred
tax assets
|
94,231
|
91,157
|
|
|
|
Total
assets
|
152,616,774
|
160,049,906
|
|
|
|
|
|
|
|
|
|
|
|
|
YUCHENG
TECHNOLOGIES LIMITED AND SUBSIDIARIES
|
Consolidated Balance Sheets (Unaudited
continued)
|
March 31,
2012 and Dec 31, 2011
|
|
|
|
|
2012.03.31
|
2011.12.31
|
|
USD
|
USD
|
|
|
|
Liabilities and stockholders'
equity
|
|
|
Current
liabilities:
|
|
|
Short term
borrowings
|
12,709,912
|
19,037,556
|
Trade
accounts payables
|
5,663,655
|
15,471,807
|
Billings
in excess of costs and estimated earnings on uncompleted
contracts
|
5,919,646
|
5,962,613
|
Employee
and payroll accruals
|
6,238,997
|
3,101,855
|
Dividends
payable to ex-owners
|
12,231
|
12,218
|
Due to
related parties
|
1,414,756
|
239,012
|
Income
taxes payable
|
429,090
|
417,065
|
Other
current liabilities
|
14,742,859
|
10,250,995
|
Deferred
tax liabilities
|
361,587
|
363,994
|
|
|
|
Total
current liabilities
|
47,492,733
|
54,857,115
|
|
|
|
Deferred
tax liabilities
|
235,303
|
225,444
|
|
|
|
Total
liabilities
|
47,728,036
|
55,082,559
|
|
|
|
|
|
|
Stockholders' equity
|
|
|
Preferred
stock, $0.0001 par value, authorized
2,000,000 shares and none issued;
Common stock, $0.0001 par value, authorized
60,000,000 shares; 18,941,417 shares and
18,941,417 shares issued and outstanding as of Dec 31, 2011 and
March 31, 2012
|
3,178,789
|
3,175,459
|
Additional
paid-in capital
|
65,765,719
|
65,245,341
|
Reserves
|
9,109,916
|
9,100,374
|
Retained
earnings
|
27,426,206
|
27,944,804
|
Accumulated other comprehensive loss
|
(574,552)
|
(569,733)
|
|
|
|
Total
YTEC stockholders' equity
|
104,906,078
|
104,896,245
|
|
|
|
Non-controlling interests
|
(17,340)
|
71,102
|
|
|
|
Total stockholders' equity
|
104,888,738
|
104,967,347
|
|
|
|
Liabilities and stockholders'
equity
|
152,616,774
|
160,049,906
|
YUCHENG
TECHNOLOGIES LIMITED AND SUBSIDIARIES
|
Consolidated Statements of Income
(Unaudited)
|
|
|
|
Three
months
Ended Mar.31
|
|
|
2012
|
2011
|
|
|
USD
|
USD
|
|
|
|
|
Revenues:
|
|
|
|
Software
& solutions
|
15,016,961
|
9,617,915
|
|
Platform
services
|
0
|
0
|
|
Maintenance services
|
1,513,902
|
1,883,575
|
|
|
|
|
Total
revenues
|
16,530,863
|
11,501,490
|
|
|
|
|
Cost of
revenues:
|
|
|
|
Software
& solutions
|
(8,555,290)
|
(4,974,529)
|
|
Platform
services
|
(1,589)
|
0
|
|
Maintenance services
|
(737,500)
|
(702,840)
|
|
|
|
|
Total
cost of revenues
|
(9,294,379)
|
(5,677,369)
|
|
|
|
|
Gross
profit
|
7,236,484
|
5,824,121
|
|
|
|
|
Operating expenses:
|
|
|
|
Research
and development
|
(870,028)
|
(545,591)
|
|
Selling
and marketing
|
(1,352,421)
|
(1,404,311)
|
|
General
and administrative
|
(4,808,746)
|
(3,694,961)
|
|
|
|
|
|
|
|
|
Total
operating expenses
|
(7,031,195)
|
(5,644,863)
|
|
|
|
|
Income
from continuing operations
|
205,289
|
179,258
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YUCHENG
TECHNOLOGIES LIMITED AND SUBSIDIARIES
|
Consolidated Statements of Income (Unaudited
continued)
|
|
|
|
Three
months
Ended Mar.31
|
|
|
2011
|
2010
|
|
|
USD
|
USD
|
|
|
|
|
Other
income (expenses):
|
|
|
|
Interest
income
|
43,390
|
13,519
|
|
Interest
expense
|
(283,883)
|
(195,149)
|
|
Loss from
equity method investees
|
(403,403)
|
(22,476)
|
|
Loss
on disposal of intangible assets and fixed assets
|
0
|
(205)
|
|
Other
income , net
|
2,540
|
142
|
|
|
|
|
Income
(loss) before income tax and minority interests
|
(436,067)
|
(24,911)
|
|
|
|
|
|
Income tax
expense
|
(200,350)
|
(82,380)
|
|
Net loss
attributable to non-controlling interests
|
88,517
|
134,875
|
|
|
|
|
Net
(loss) income
|
(547,900)
|
27,584
|
|
|
|
|
Weighted average common shares
outstanding
|
|
|
Basic
|
19,798,120
|
18,560,014
|
Diluted
|
19,804,702
|
18,949,359
|
|
|
|
|
Earnings per share
|
|
|
Basic
|
(0.03)
|
0.00
|
Diluted
|
(0.03)
|
0.00
|
YUCHENG
TECHNOLOGIES LIMITED AND SUBSIDIARIES
|
Consolidated Statements of Cash Flows
(Unaudited)
|
Three
Months Ended Mar 31
|
|
|
|
|
2012
|
2011
|
|
USD
|
USD
|
|
|
|
Cash
flows from operating activities:
|
|
|
Net income
(loss)
|
(547,900)
|
27,584
|
Adjustments to reconcile net income to net cash used
in operating activities:
|
|
|
|
|
|
Depreciation
|
263,752
|
254,356
|
Amortization
|
551,324
|
380,282
|
Loss on
disposal intangible assets and fixed assets
|
0
|
711
|
Non-controlling interests
|
(88,518)
|
(134,875)
|
Loss from
equity method investees
|
403,403
|
22,476
|
Increase
in trade accounts receivable, net
|
(4,230,237)
|
(931,607)
|
(Increase)
Decrease in costs and estimated earnings in excess of billing on
uncompleted contracts
|
(2,091,628)
|
281,739
|
(Increase)
Decrease in due from related parties
|
168,231
|
(23,187)
|
Increase
in inventories
|
(3,217,993)
|
(2,407,836)
|
Increase
in pre-contract costs
|
(2,479,755)
|
(2,348,960)
|
Increase
in other current assets
|
(455,592)
|
(4,567,559)
|
Increase
in deferred tax assets - Non-current
|
(2,979)
|
(1,996)
|
Decrease
in trade accounts payable
|
(9,824,762)
|
(727,687)
|
Decrease
in billings in excess of costs and estimated earnings on
uncompleted contracts
|
(49,219)
|
(1,754,156)
|
Increase
in employee and payroll accruals
|
3,133,891
|
1,664,934
|
Increase
in income taxes payable
|
11,588
|
87,514
|
Increase in due to related parties
|
994,560
|
131,197
|
Increase
in other current liabilities
|
4,468,354
|
2,594,275
|
Increase
(Decrease) in deferred tax liabilities
|
6,834
|
(3,596)
|
Stock
based compensation to employees
|
432,702
|
227,989
|
|
|
|
Net
cash used in operating activities
|
(12,553,944)
|
(7,228,402)
|
|
|
|
|
|
|
YUCHENG
TECHNOLOGIES LIMITED AND SUBSIDIARIES
|
Consolidated Statements of Cash Flows (Unaudited
continued)
|
Three
Months Ended Mar 31
|
|
|
|
|
2012
|
2011
|
|
USD
|
USD
|
|
|
|
Cash
flows from investing activities:
|
|
|
Capital
expenditures
|
(355,781)
|
(957,355)
|
Payment of
purchase of subsidiaries, net of cash acquired
|
0
|
(18,359)
|
Advances
to investments under equity method
|
814,171
|
0
|
Investment
in equity method investments
|
0
|
(800,744)
|
Proceeds
from disposal of fixed assets
|
0
|
684
|
Proceeds
from disposal of investments under equity method
|
0
|
1,715,881
|
|
|
|
Net
cash provided by (used in) investing activities
|
458,390
|
(59,893)
|
|
|
|
Cash
flows from financing activities:
|
|
|
Repayment
of capital leases
|
0
|
(29,686)
|
Proceeds
from bank borrowings
|
11,121,173
|
4,895,980
|
Repayments
of bank borrowings
|
(17,468,780)
|
(6,100,909)
|
|
|
|
Net
cash used in financing activities
|
(6,347,607)
|
(1,234,615)
|
|
|
|
Effect
of exchange rate changes on cash and cash equivalent
|
15,407
|
0
|
|
|
|
Net
increase in cash and cash equivalents
|
(18,427,754)
|
(8,522,910)
|
|
|
|
Cash
and cash equivalents at beginning of period
|
32,503,415
|
24,542,295
|
Cash
and cash equivalents at the end of period
|
14,075,661
|
16,019,385
|
First Quarter 2012 Conference Call Details
Yucheng Management will conduct a conference call to discuss the
financial results of the three-month period ended March 31, 2012 on, May 15,
2012 at 8:00AM EDT/
8:00PM BJT.
To participate, please dial one of the local access numbers,
listed below, ten minutes prior to the scheduled start of the call.
The conference call identification number is 8899.
US
+1 866 636 3243
China Toll
Free Number: 800 888
0221
China Toll
Number:
400 678 3355
Hong Kong
Toll Number: +852 3005
1322
All Other
Participants: +86
10 5851 2626
A
recording of the call will be accessible within 48 hours on the
Investor Relations section of the Yucheng's website at
http://www.yuchengtech.com/english/success.php?classid=41.
|
|
About Yucheng Technologies Limited
Yucheng Technologies Limited (NASDAQ: YTEC) is a leading IT
service provider to the Chinese financial service providers.
Headquartered in Beijing, China,
Yucheng services clients from its nationwide network with
approximately 2,800 employees. Yucheng provides a comprehensive
suite of IT solutions to Chinese Banks including: (i) Channel
Solutions, such as e-banking and call centers; (ii) Business
Solutions, such as core banking systems and loan management; and
(iii) Management Solutions, such as risk analytics and business
intelligence. The independent research firm IDC named Yucheng the
No. 1 market share leader in China's Banking IT solution market in 2010.
For more information about Yucheng Technologies Limited, please
visit www.yuchengtech.com.
Reconciliation of non-GAAP Measures
This earnings release presents the following "non-GAAP financial
measures" as defined by applicable U.S. securities regulations. The
presentation of these non-GAAP financial measures is not meant to
be considered in isolation or as a substitute for our financial
results prepared in accordance with GAAP. The non-GAAP financial
measures are provided as additional information to help both
management and investors compare business trends among different
reporting periods on a consistent and more meaningful basis and
enhance investors' overall understanding of the Company's current
financial performance and prospects for the future. These
non-GAAP measures have limitations, however, because they do not
include all items of income and expenses that impact the Company's
operations. Management compensates for these limitations by
also considering the Company's GAAP results. The non-GAAP
financial measures the Company uses are not prepared in accordance
with, and should not be considered an alternative to measurements
required by GAAP and should not be considered measures of the
Company's liquidity. Pursuant to relevant regulatory
requirements, we are providing the following reconciliations of the
non-GAAP financial measures to the most directly comparable GAAP
measures.
(1) Net revenue (non-GAAP)
Yucheng's net revenue (non-GAAP) represents total revenue net of
third party hardware and software costs that are passed through to
our customers. We believe total revenues net of third party
hardware and software costs more accurately reflects our core
business, which is the provision of software solutions and
services, and provides transparency to our investors. It is also
the same measure used by our management to evaluate the
competitiveness and development of our business.
Reconciliation of net revenues (non-GAAP) to GAAP
total revenues
|
|
2012
Q1
|
2011
Q1
|
2011
Q4
|
|
(in US
dollar thousands)
|
Total
Revenues (GAAP)
|
16,531
|
11,501
|
30,145
|
Third
Party Hardware Costs
|
2
|
0
|
-41
|
Net
Revenue (non-GAAP)
|
16,529
|
11,501
|
30,187
|
|
|
|
|
Reconciliation of net revenues of platform &
maintenance services (non-GAAP) to GAAP total revenues of platform
&
maintenance services
|
|
2012
Q1
|
2011
Q1
|
2011
Q4
|
|
(in US
dollar thousands)
|
Total
Revenues of platform & maintenance
services(GAAP)
|
1,514
|
1,884
|
3,174
|
Third
Party Hardware Costs
|
2
|
0
|
-41
|
Net
Revenue of platform & maintenance
services(non-GAAP)
|
1,512
|
1,884
|
3,215
|
(2) Gross margin of net revenue (non-GAAP)
Gross margin of net revenues (non-GAAP) is calculated by
dividing gross profit by net revenue (non-GAAP). We believe that
this non-GAAP financial measure provides meaningful supplemental
information regarding our performance. Management uses the gross
margin of net revenue (non-GAAP) measure to gain a better
understanding of the Company's comparative operating performance
from period-to-period and as a basis of planning and forecasting
future periods. Management believes this non-GAAP measure, when
read in conjunction with the Company's GAAP gross margin and other
GAAP financial metrics, provides useful information to investors by
offering: a) the ability to make more meaningful period-to-period
comparisons of the Company's on-going operating results; b) the
ability to better identify trends in the Company's underlying
business and perform related trend analysis; c) a better
understanding of how management plans and measures the Company's
underlying business; and d) an easier way to compare the Company's
most recent results of operations against investor and analyst
financial models.
Reconciliation of Gross margin (non-GAAP) to GAAP
Gross margin
|
|
2012
Q1
|
2011
Q1
|
2011
Q4
|
Gross
margin (GAAP)
|
43.8%
|
50.6%
|
43.7%
|
Third
Party Hardware Costs
|
0.0%
|
0.0%
|
0.0%
|
Gross
margin (non-GAAP)
|
43.8%
|
50.6%
|
43.7%
|
|
|
|
|
Reconciliation of Gross margin (non-GAAP) for
platform & maintenance services to GAAP Gross margin for
platform &
maintenance services
|
|
2012
Q1
|
2011
Q1
|
2011
Q4
|
Gross
margin (GAAP)
|
51.2%
|
62.7%
|
49.9%
|
Third
Party Hardware Costs
|
0.0%
|
0.0%
|
-0.6%
|
Gross
margin (non-GAAP)
|
51.2%
|
62.7%
|
49.2%
|
(3) Operating expenses (non-GAAP)
Operating expenses (non-GAAP) excludes stock-based compensation
and amortization of acquired intangible assets related to previous
acquisitions. We believe that this non-GAAP financial measure
provides meaningful supplemental information regarding our
performance by excluding certain expenses and income that may not
be indicative of our operating performance. Management uses the
operating expenses (non-GAAP) measure to gain a better
understanding of the Company's comparative operating performance
from period-to-period and as a basis of planning and forecasting
future periods. Management believes this non-GAAP measure, when
read in conjunction with the Company's GAAP operating expenses and
other GAAP financial metrics, provides useful information to
investors by offering: a) the ability to make more meaningful
period-to-period comparisons of the Company's on-going operating
results; b) the ability to better identify trends in the Company's
underlying business and perform related trend analysis; c) a better
understanding of how management plans and measures the Company's
underlying business; and d) an easier way to compare the Company's
most recent results of operations against investor and analyst
financial models.
Reconciliation of Operating expenses (non-GAAP) to
GAAP Operating expenses
|
|
2012
Q1
|
2011
Q1
|
2011
Q4
|
|
(in US
dollar thousands)
|
Operating expenses (GAAP)
|
7,031
|
5,645
|
9,279
|
Stock
based compensation
|
433
|
228
|
122
|
Amortization of acquired intangible
assets
|
218
|
44
|
408
|
Operating expenses (non-GAAP)
|
6,381
|
5,373
|
8,749
|
(4) Operating income (non-GAAP)
Operating income (non-GAAP) excludes stock-based compensation
and amortization of acquired intangible assets related to previous
acquisitions. We believe that this non-GAAP financial measure
provides meaningful supplemental information regarding our
performance by excluding certain expenses and income that may not
be indicative of our operating performance. Management uses the
operating income (non-GAAP) measure to gain a better understanding
of the Company's comparative operating performance from
period-to-period and as a basis of planning and forecasting future
periods. Management believes this non-GAAP measure, when read in
conjunction with the Company's GAAP operating income and other GAAP
financial metrics, provides useful information to investors by
offering: a) the ability to make more meaningful period-to-period
comparisons of the Company's on-going operating results; b) the
ability to better identify trends in the Company's underlying
business and perform related trend analysis; c) a better
understanding of how management plans and measures the Company's
underlying business; and d) an easier way to compare the Company's
most recent results of operations against investor and analyst
financial models.
Reconciliation of Operating income (non-GAAP) to
GAAP Operating income
|
|
2012
Q1
|
2011
Q1
|
2011
Q4
|
|
(in US
dollar thousands)
|
Operating income (GAAP)
|
205
|
179
|
3,905
|
Stock
based compensation
|
433
|
228
|
122
|
Amortization of acquired intangible
assets
|
218
|
44
|
408
|
Operating income (non-GAAP)
|
856
|
451
|
4,435
|
(5) Operating margin of net revenue (non-GAAP)
Operating margin of net revenue (non-GAAP) is calculated by
dividing operating income, excluding amortization of acquired
intangible assets and stock-based compensation expenses, divided by
net revenue (non-GAAP). We believe that this non-GAAP financial
measure provides meaningful supplemental information regarding our
performance by excluding certain expenses and income that may not
be indicative of our operating performance. Management uses the
operating margin of net revenue (non-GAAP) measure to gain a better
understanding of the Company's comparative operating performance
from period-to-period and as a basis of planning and forecasting
future periods. Management believes this non-GAAP measure, when
read in conjunction with the Company's GAAP operating margin and
other GAAP financial metrics, provides useful information to
investors by offering: a) the ability to make more meaningful
period-to-period comparisons of the Company's on-going operating
results; b) the ability to better identify trends in the Company's
underlying business and perform related trend analysis; c) a better
understanding of how management plans and measures the Company's
underlying business; and d) an easier way to compare the Company's
most recent results of operations against investor and analyst
financial models.
Reconciliation of Operating margin (non-GAAP) to
GAAP Operating margin
|
|
2012
Q1
|
2011
Q1
|
2011
Q4
|
Operating margin (GAAP)
|
1.2%
|
1.6%
|
13.0%
|
Stock
based compensation
|
2.6%
|
2.0%
|
0.4%
|
Amortization of acquired intangible
assets
|
1.3%
|
0.4%
|
1.4%
|
Third
Party Hardware Costs
|
0.0%
|
0.0%
|
0.0%
|
Operating margin (non-GAAP)
|
5.2%
|
3.9%
|
14.7%
|
(6) Net income (non-GAAP)
Net income (non-GAAP) excludes stock-based compensation and
amortization of acquired intangible assets related to the previous
acquisitions. We believe that this non-GAAP financial measure
provides meaningful supplemental information regarding our
performance by excluding certain expenses and income that may not
be indicative of our operating performance. Management uses the net
income (non-GAAP) measure to gain a better understanding of the
Company's comparative operating performance from period-to-period
and as a basis of planning and forecasting future periods.
Management believes the Company's net income (non-GAAP) measure,
when read in conjunction with the Company's GAAP net income measure
and other GAAP financial metrics, provides useful information to
investors by offering: a) the ability to make more meaningful
period-to-period comparisons of the Company's on-going operating
results; b) the ability to better identify trends in the Company's
underlying business and perform related trend analysis; c) a better
understanding of how management plans and measures the Company's
underlying business; and d) an easier way to compare the Company's
most recent results of operations against investor and analyst
financial models.
Reconciliation of net income attributable to
Yucheng (non-GAAP) to GAAP net income
|
|
2012
Q1
|
2011
Q1
|
2011
Q4
|
|
(in US
dollar thousands)
|
Net
Income (GAAP)
|
-548
|
28
|
2,989
|
-
Stock based compensation
|
433
|
228
|
122
|
-
Amortization of acquired intangible assets
|
218
|
44
|
408
|
Net
Income (non-GAAP)
|
102
|
300
|
3,520
|
(7) Net income (non-GAAP)per diluted share
Net income (non-GAAP) per diluted share is calculated by
dividing net income (non-GAAP) (which as discussed above excludes
stock-based compensation expenses and amortization of acquired
intangible assets) by the same number of weighted average shares
outstanding used in the computation of net income per diluted
share. Management believes that net income (non-GAAP) per diluted
share, when used in conjunction with the Company's GAAP net income
per diluted share, provides useful information to investors for the
same reasons discussed above regarding net income (non-GAAP). In
addition, net income (non-GAAP) per diluted share allows investors
to evaluate the Company's operating performance from period to
period on a per share basis, thus providing a useful basis for
assessing the Company's value on a per share basis.
Reconciliation of net income (non-GAAP) per
diluted share to GAAP net income per diluted share
|
|
2012
Q1
|
2011
Q1
|
2011
Q4
|
|
(in US
dollar)
|
GAAP
net income Per diluted Share
|
-0.03
|
0.00
|
0.16
|
-
Stock based compensation
|
0.02
|
0.01
|
0.01
|
-
Amortization of acquired intangible assets
|
0.01
|
0.00
|
0.02
|
Non-GAAP net income Per diluted
Share
|
0.01
|
0.02
|
0.18
|
Cautionary Note Regarding Forward-Looking Statements
The information contained in this document is as of May
15, 2012. Yucheng assumes no obligation to update any
forward-looking statements contained in this document as a result
of new information or future events or developments.
This press release includes forward-looking statements made
pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995 that involve risks and uncertainties.
Forward looking statements are statements that are not historical
facts. 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. Such forward-looking statements, based upon the
current beliefs and expectations of Yucheng's management, are
subject to risks and uncertainties, which could cause actual
results to differ from the forward looking statements. The
following factors, among others, could cause actual results to
differ from those set forth in the forward-looking statements:
current dependence on the PRC banking industry demand for the
products and services of Yucheng; competition from other service
providers in the PRC and international consulting firms; the
ability to update and expand product and service offerings;
retention and hiring of qualified employees; protection of
intellectual property; creating and maintaining quality product
offerings; and operating a business in the PRC with its changing
economic and regulatory environment. A further list and description
of these risks, uncertainties, and other matters can be found in
our Annual Report on Form 20-F for the fiscal year ended
December 31, 2011, and in our interim current reports on Form
6-K filed with the United States Securities and Exchange Commission
and available at www.sec.gov.
For more information about Yucheng, please visit
www.yuchengtech.com.
For
investor and media inquiries, please contact:
|
|
|
|
In
China:
|
|
|
|
Mr. Steve
Dai
|
|
Yucheng
Technologies Limited
|
|
Tel:
+86-10-5913-7889
|
|
Email:
investors@yuchengtech.com
|
|
|
|
(1) Net
revenue (non-GAAP) measures used in this press release represents
total revenue net of third-party hardware and software
costs.
(2) Gross
margin of net revenue (non-GAAP) is calculated by dividing gross
profit by net revenue (non-GAAP).
(3)
Operating expenses (non-GAAP) is calculated by excluding
stock-based compensation expenses and amortization of acquired
intangible assets.
(4) Income
from operations (non-GAAP) is calculated by subtract operating
expenses (non-GAAP) from gross profits.
(5)
Operating margin of net revenue (non-GAAP) is calculated by
dividing operating income, excluding amortization of acquired
intangibles and stock-based compensation expenses, divided by net
revenue (non-GAAP)
(6) Net
income (non-GAAP) measures exclude stock-based compensation
expenses, amortization of acquired intangible assets, impairment
loss on investment, after-tax dividend income and non-recurring
merger related expenses
|
|
SOURCE Yucheng Technologies Limited