Published: March 08, 2010
CDC Corporation Reports a 56 Percent Increase in the Fourth Quarter 2009 Adjusted EBITDA from the Third Quarter 2009 and a Full Year 2009 Net Income Attributable to Controlling Interest of $16.8 million
HONG KONG & ATLANTA - (BUSINESS WIRE) - CDC Corporation (NASDAQ: CHINA), a leading global enterprise software,
IT services and new media company, today announced financial results for
the fourth quarter and year ended December 31, 2009. For the fourth
quarter of 2009, CDC Corporation reported Adjusted EBITDA(a)
from continuing operations(b) or Adjusted EBITDA* of $14.0
million, a 56 percent increase from Adjusted EBITDA of $9.0 million for
the third quarter 2009, and compared to Adjusted EBITDA for the fourth
quarter of 2008 of $9.7 million. For the fourth quarter of 2009, revenue
was $83.0 million compared to $76.6 million in the third quarter of 2009
and $97.0 million for the fourth quarter of 2008.
For the year ended December 31, 2009, net income attributable to
controlling interest was $16.8 million, or $0.14 net income per share,
compared to net loss attributable to controlling interest of $114.2
million, or $1.07 net loss per share for 2008, which was primarily due
to goodwill impairment. For the full year 2009, CDC Corporation reported
revenue of $320.1 million and Adjusted EBITDA of $42.7 million, compared
to revenue of $409.1 million and Adjusted EBITDA of $35.9 million for
the full year 2008.
Fourth quarter 2009 revenue and Adjusted EBITDA exceeded First Call
consensus estimates of $81.9 million and $10.2 million, respectively. In
the fourth quarter of 2009, CDC Corporation also recorded operating cash
flow of $6.0 million, compared to $6.8 million in operating cash flow in
the fourth quarter of 2008, marking nine consecutive quarters of
positive operating cash flows. For the fourth quarter of 2009, net
income attributable to controlling interest was $0.3 million compared to
a net income attributable to controlling interest of $5.6 million in the
third quarter of 2009 and a net loss attributable to controlling
interest of $81.1 million in the fourth quarter of 2008.
"Overall, we are pleased to report net income for the fourth quarter and
full year 2009 compared to significant losses in the comparable periods
in prior year," said Peter Yip, CEO of CDC Corporation. "We believe we
have turned the corner on all our core businesses which have seen
improvements in their profit margins in the fourth quarter of 2009
compared to the third quarter of 2009, despite the global recession. Our
strategy is to execute a variety of strategic growth alternatives begun
last year and continuing in 2010, which we anticipate will help position
our businesses for growth. For example, CDC Global Services is executing
on strategies that we expect will help position it as a future leader in
the IT and R&D outsourcing areas in China, while planning for some
strategic initiatives that we believe will help unlock shareholder
value. We are also very excited about CDC Games' two new local games
scheduled for launch in the first half of this year. We have been
receiving excellent support from Turbine, the developer of The Lord of
the Rings Online, and are making progress on resolving the technical
issues related to this game. We now expect to launch this exciting and
long-awaited MMORPG later this year. We are focusing on the execution of
our business plan for each of our core businesses and we are cautiously
optimistic on our long-term growth and prospects."
CDC Corporation Consolidated
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Total revenue for CDC Corporation in the fourth quarter of 2009 was
$83.0 million, compared to $76.6 million in the third quarter of 2009.
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Adjusted EBITDA in the fourth quarter of 2009 was $14.0 million, an
increase of 56 percent from Adjusted EBITDA of $9.0 million in the
third quarter of 2009.
Balance Sheet
The company's balance sheet as of December 31, 2009 remained solid, with
Non-GAAP Cash and Cash Equivalents(a) of $130.8 million.
Subsidiary Revenue and Operating Metrics Summary
CDC Software
On a standalone basis, CDC Software had the following results for the
three months ended September 30, 2009 and December 31, 2009:
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Q3 2009
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Q4 2009
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Revenue:
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$48.6 million
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$54.3 million
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Adjusted EBITDA:
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$13.2 million
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$14.8 million
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Adjusted EBITDA Margin:
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27%
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27%
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Total revenue for CDC Software for the fourth quarter of 2009 was $54.3
million compared to $48.6 million in the third quarter 2009. For the
fourth quarter of 2009, Adjusted EBITDA(a) was $14.8 million,
compared to $13.2 million in the third quarter 2009. Non-GAAP earnings
per share(a) almost quadrupled to $0.40 compared to $0.11 in
the fourth quarter of 2008. Third quarter 2009 Non-GAAP earnings per
share was $0.33. For the year ended December 31, 2009, Non-GAAP earnings
per share was $1.31 compared to $0.66 per share for the year ended
December 31, 2008. Operating cash flow for the year ended December 31,
2009 increased by 56 percent to $53.0 million, compared to $33.9 million
for the full year ended December 31, 2008.
CDC Software is now trading as a separately listed public company on the
NASDAQ Global Market under the symbol: CDCS. For a more information
regarding the financial performance of CDC Software during the fourth
quarter and full year ended December 31, 2009, please see CDC Software's
fourth quarter 2009 press release located at the company's website: www.cdcsoftware.com.
"We are proud of our strong results for the fourth quarter and full year
2009 at CDC Software, especially in light of the global economic
downturn," said Bruce Cameron, president of CDC Software. "We are
pleased with our fourth quarter 2009 results, which again exceeded Wall
Street consensus estimates in many of our key financial metrics
including Non-GAAP earnings per share and license revenue. Our cash flow
from operations for 2009 of $53.0 million represents a record for CDC
Software. CDC Software's robust performance in the fourth quarter,
especially our improvements in Adjusted EBITDA margin and license
revenue, primarily resulted from our strategies executed last year,
which focused on disciplined cost controls while still pursuing growth.
We are especially pleased on our strong organic license revenue growth
in the fourth quarter and on our solid pipeline for the first half of
this year."
CDC Global Services
On a standalone basis, CDC Global Services had the following results for
the three months ended September 30, 2009 and December 31, 2009:
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Q3 2009
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Q4 2009
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Revenue:
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$19.2 million
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$17.6 million
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Adjusted EBITDA:
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$0.3 million
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$0.4 million
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Adjusted EBITDA Margin:
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1.6%
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2.3%
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Total revenue for CDC Global Services for the fourth quarter of 2009 was
$17.6 million compared to $19.2 million for the third quarter of 2009.
Fourth quarter 2009 Adjusted EBITDA was $0.4 million compared to $0.3
million in the third quarter of 2009. Gross margin improved to 20
percent in the fourth quarter compared to 17 percent in the third
quarter of 2009. For the full year, revenue decreased to $75.2 million
compared to $109.7 million for the full year 2008, due primarily to
decreased demand for contract labor as a result of the global recession.
Approximately 65 percent of revenue in 2009 was derived from the U.S.
market while 35 percent was from international sources. Staff
utilization for the fourth quarter was 84 percent, representing a
decrease from 90 percent in the third quarter of 2009.
CDC Global Services continued its plans to expand its offshore service
delivery capabilities in China which it expects to accomplish through
organic growth of its existing engineering centers and the strategic
acquisition of local IT outsourcing firms in several of China's key
cities. These centers are expected to be organized and developed into
practices specializing in various core skills that the company believes
are much sought after in today's IT outsourcing market. CDC Global
Services expects to operate clusters of these Offshore Development
Centers (ODC) and which are expected to provide a whole array of
services in software testing, Java software, .net software, embedded
software development as well as software implementation for products
that are from CDC Software and other international companies.
These local IT outsourcing firms can also provide CDC Global Services
with immediate access to the growing domestic ITO service market in
China. CDC Global Services' goals are to grow to 5,000 professional
staff in China over the next few years and derive 35 percent of its
revenue from the China domestic service markets.
Some of the recent outsourcing initiatives undertaken recently include
evaluating an ITO firm in Shenzhen that serves local government and
mobile operators in China. CDC Global Services currently is recruiting
several new sales professionals for its outsourcing business that
includes a recent hire for its Shanghai/Nanjing centers, as well as
engaging new Alliance Partners.
The company plans to leverage CDC Software's extensive customer base in
creating cross-selling opportunities of CDC Global Services' offshore IT
outsourcing services. In addition to the implementation services that
CDC Software traditionally sells together with its products, CDC Global
Services believes it can offer new value to these customers by providing
them competitively-priced, high-quality services in the design,
development and testing of their software systems, product R&D work,
maintenance and support of legacy software using CDC Global Services
offshore engineering resources.
Some additional highlights in the CDC Global Services business during
the fourth quarter of 2009 included several significant new engagements:
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A $44 billion global pharmaceutical products, prescription medicines,
consumer healthcare and generics company has contracted for CDC Global
Services to implement its SAP solutions at its main U.S. distribution
facility.
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A $31 billion diversified manufacturer of aerospace products, control
technologies for building, home and industry and other products
contracted with CDC Global Services to implement its solution at
multiple operating divisions and distribution facilities globally.
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A $14 billion leading human therapeutics company in the biotechnology
industry contracted with CDC Global Services to implement its SAP
solution at eight distributions facilities globally.
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A Sydney, Australia area city council serving 65,000 residents and
1,300 businesses contracted with Praxa to implement and refine its
business portal.
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An Australian self-funding charitable organization contracted with
Praxa to prepare a roadmap and analyze the business requirements for
the replacement of their existing application software system to a
single CRM platform.
"CDC Global Services is executing on a number of strategic initiatives
that we expect will help expand its IT outsourcing operations in China
which is a growing services market," said CK Wong, chairman of CDC
Global Services. "Through a combination of organic growth and
disciplined acquisitions in various cities in China, we plan to reach to
5,000 professional staff in our China-based offshore development centers
and IT outsourcing centers over next few years. We are also looking at
ways to penetrate the growing China domestic IT service market. The
centers that we plan to expand are also expected to serve both our
international and China clients. We believe these well-orchestrated
initiatives can help to unlock shareholder value of CDC Corporation
operating as a synergistic group of companies."
CDC Games
On a standalone basis, CDC Games had the following results for the three
months ended September 30, 2009 and December 31, 2009:
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Q3 2009
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Q4 2009
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Revenue:
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$6.2 million
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$7.0 million
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Adjusted EBITDA:
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($0.9) million
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$0.5 million
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Adjusted EBITDA Margin:
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(14%)
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7%
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Total revenue from continuing operations(b) for CDC Games
during the fourth quarter of 2009 was $7.0 million compared to $6.2
million in the third quarter of 2009. Adjusted EBITDA for the fourth
quarter of 2009 was $0.5 million compared to negative Adjusted EBITDA of
$0.9 million in the third quarter of 2009. Adjusted EBITDA margin was 7
percent compared to negative 14 percent in the third quarter of 2009.
Total peak concurrent users (PCU) in the fourth quarter increased 7
percent from the third quarter and total average concurrent users (ACU)
increased 9 percent from the third quarter of 2009. For the year ended
December 31, 2009, CDC Games reported revenue of $28.9 million compared
to $44.9 million in 2008, due primarily to fewer new games and new
updates for its current games provided in 2009. However, CDC Games
expects to launch major new versions of its current games, as well as
new local games for 2010.
CDC Games is planning to launch two new domestic games in China during
the first half of this year, East Fantasy Online and Richman Universe
Online. Developed by Chengdu, China-based BL Interactive Net Co., East
Fantasy is a cartoon type 3D massive multiplayer online action role
playing game (MMOARPG) featuring a humorous story line, six characters,
and voiceovers from prominent voiceover actors who also provide voices
for well known animated characters like Naruto, a popular Japanese manga
series. Richman Universe Online, a casual MMORPG, is developed by
Beijing-based Softstar Technology and is based on the theme of the
popular Monopoly game and battle chess.
Additionally, in mid-January 2010, CDC Games launched a new version of
Yulgang, version 4.0. Since its launch, the game has shown strong
increases in PCU. CDC Games also extended its exclusive distribution
rights for Yulgang in China until March 2011. Another new update for
Yulgang is planned for later this year. Updates are also planned for the
company's other games including a major update for Shaiya in the second
quarter.
CDC Games completed a successful closed beta test of The Lord of the
Rings Online (LOTRO) last year. The game's commercial launch has been
delayed due to technical issues related to the nature of China's IT
infrastructure. As a result, LOTRO is planned for commercial launch
later this year.
"We are very pleased with our Adjusted EBITDA improvement in the fourth
quarter, and our sequential quarter revenue improvement," said Simon
Wong, CEO of CDC Games. "While we are disappointed with the delays for
the commercial launch of LOTRO, we believe it is important that the game
be fully tested for optimal technical performance, so it is now
scheduled for later this year. We are also excited about our new
domestic games planned for each quarter of this year, with two planned
in the first half of this year. In addition, we have extended our
license for Yulgang until March 2011 and have recently launched a major
new update of the game which has been delivering increased metrics. We
also expect to launch new updates for all our games, including a major
update of Shaiya, in the coming quarters. With the planned new local
games in our pipeline and the new updates of our other games, we expect
continued improvement in our operating metrics for 2010."
China.com
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Q3 2009
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Q4 2009
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Revenue:
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$2.7 million
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$4.1 million
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Adjusted EBITDA:
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($0.4) million
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$0.8 million
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Adjusted EBITDA Margin:
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(14%)
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20%
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During 2009, China.com saw a negative impact to its portal's advertising
revenue as a result of the China government's tightened regulation of
online healthcare and medicine ads. China.com is addressing the impact
of that regulation through the expansion of content for its vertical
channels, including its popular automobile channel. Its portal business,
in conjunction with the China Auto Dealers Association, conducted the
third annual automobile consumer reputation survey, a popular program
that surveys brands and services in the automobile industry in various
cities in China that is covered extensively by the media. Additionally,
China.com's auto channel won a media award that is one of the oldest and
considered most reputable in the auto industry. Its games channel was
awarded "Outstanding anime/comic/game media award" by the General
Administration of Press and Publication's (GAPP) game committee and
China.com received the "Outstanding network innovation" award for the
60th anniversary of the People's Republic of China, which was jointly
given by the Beijing Municipality Internet Marketing Management Office
and Beijing Association of Online Media. Also in the fourth quarter,
TTG, China.com's publishing business, secured a management contract with
the Tourism Development Division of the Ministry of Industry and Primary
Resources, for the management Asian Tourism Forum (ATF) event.
Bbmf
CDC Corporation also holds a 20 percent equity interest in Bbmf. The
company launched its first 3G comics in the summer of 2006 and has since
grown organically to become one of the largest independent operators of
3G comics in Japan. Bbmf currently offers about 20,000 titles and four
million pages of comic content licensed from approximately 1,000 authors
and 100 publishers, which is considered to be one of the largest
libraries in Japan. Bbmf also has one of the world's largest comic print
to mobile production centers. The 3G comic operator is evaluating
various options in their domestic and international growth strategy. CDC
Corporation expects Bbmf to continue to grow rapidly in this exciting 3G
mobile content/Internet social networking space.
Concluding Remarks
Yip concluded, "Overall, we are pleased with the performance of our
businesses despite challenging market conditions. We remain cautiously
optimistic with regard to our long-term prospects since we believe we
now have an optimal business and technology platform in place for all of
our key businesses. Furthermore, management believes that CDC
Corporation has a sum-of-parts valuation and its price is not reflective
of the value contained in the company's underlying assets of its four
key businesses. As a result, we are considering possible strategic
alternatives that may include strategic transactions or the periodic
distribution of certain of these assets by CDC Corporation. As we have
previously stated, we are actively considering very carefully the most
tax efficient and orderly manner to distribute registered shares of our
underlying publicly listed subsidiaries to our shareholders. These
potential distributions would be managed, after consulting with our tax
advisor and capital market experts, to enhance the liquidity of these
subsidiaries.
As part of these strategies, the board of CDC Corporation plans to seek
shareholder approval for the execution of a reverse split of CDC
Corporation's common stock at a ratio of three to one. We believe this
will help reduce related administrative expenses and maximize
shareholder participation in any potential distributions we may make."
Guidance
CDC Corporation offers the following guidance for 2010, based upon
preliminary financial results, information and estimates:
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2010 Revenue: $352 million - $358 million, an increase of 10-12
percent from $320.1 million in 2009
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2010 Adjusted EBITDA: $48 million - $51 million, an increase of 12-19
percent from $42.7 million in 2009.
Conference Call
The company's senior management will host a conference call for
financial analysts and investors on Tuesday, March 09, at 8:30 AM EST.
USA-based Toll Free Number: +1-(888) 603-6873
International: +1 973 582 2706
Pass code: #: 58741443
Call Leader: Matthew Lavelle
This call is being webcast by CCBN and can be accessed at CDC
Corporation's corporate web site at www.cdccorporation.net.
The webcast is also being distributed over CCBN's Investor Distribution
Network to both institutional and individual investors. Individual
investors can listen to the call through CCBN's individual investor
center at www.fulldisclosure.com
or by visiting any of the investor sites in CCBN's Individual Investor
Network. Institutional investors can access the call via CCBN's
password-protected event management site, StreetEvents (www.streetevents.com).
Instant Replay
For those unable to call in, a digital instant replay will be available
after the call until Sept. 1, 2009. U.S. based Toll Free Number: +1 800
642 1687, U.S.-based Toll Number: +1 706 645 9291 Passcode or PIN #:
58741443
Footnotes:
All dollar amounts are in U.S. dollars
* CDC Corporation has recently changed the composition of its Adjusted
EBITDA measurement, as provided herein, to be consistent with the
presentation of Adjusted EBITDA for its subsidiary, CDC Software
Corporation. CDC Corporation believes this revised presentation is a
useful measure of operating performance. A reconciliation of this
revised Adjusted EBITDA measurement to our historical Adjusted EBITDA
measurement is provided below.
(a) Adjusted Financial Measures
This press release includes Adjusted EBITDA from continuing operations,
Adjusted EBITDA Margin, Non-GAAP Cash and Cash Equivalents and Non-GAAP
Earnings Per Share, which are not prepared in accordance with GAAP
(collectively, the "Non-GAAP Financial Measures"). Non-GAAP Financial
Measures are not alternatives for measures such as net income, earnings
per share and cash and cash equivalents prepared under generally
accepted accounting principles in the United States ("GAAP"). These
Non-GAAP Financial measures may also be different from non-GAAP measures
used by other companies. Non-GAAP Financial Measures should not be used
as a substitute for, or considered superior to, measures of financial
performance prepared in accordance with GAAP.
Investors should be aware that these Non-GAAP Financial Measures have
inherent limitations, including their variance from certain of the
financial measurement principals underlying GAAP, should not be
considered as a replacement for GAAP performance measures, and should be
read in conjunction with our consolidated financial statements prepared
in accordance with GAAP. These supplemental Non-GAAP Financial Measures
should not be construed as an inference that the Company's future
results will be unaffected by similar adjustments to net earnings
determined in accordance with GAAP. Reconciliations of Non-GAAP
Financial Measures to GAAP are provided herein immediately following the
financial statements included in this press release.
(b) Adjustment for Discontinued Businesses
During the second and fourth quarter of 2008, the mobile value added
business of China.com and operations of CDC Games International,
respectively, were discontinued. The operations of CDC Games
International, a subsidiary of CDC Games Corporation, included
operations in the U.S., Japan and Korea. All historical results related
to these two businesses have been included in discontinued operations.
(c) SFAS 160 Adoption
As of January 2009, the company adopted SFAS 160, Non-controlling
Interests in Consolidated Financial Statements. After the adoption of
SFAS 160, net income (loss) is now referred to as net income (loss)
attributable to controlling interest on the consolidated statement of
operations.
(d) 2008 Revised Quarterly Information
Results provided herein for certain quarters of 2008 may be different
than those previously reported in our press releases due to certain
year-end adjustments required to be made in connection with the audit of
our financial statements for the year ended December 31, 2008.
About CDC Corporation
The CDC family of companies includes CDC Software (NASDAQ: CDCS) focused
on enterprise software applications and services, CDC Global Services
focused on IT consulting services, and outsourced R&D and application
development, CDC Games focused on online games, and China.com, Inc.
(HKGEM:8006) focused on portals for the greater China markets. For more
information about CDC Corporation (NASDAQ: CHINA), please visit www.cdccorporation.net.
About CDC Software
CDC Software (NASDAQ: CDCS), The Customer-Driven Company , is a provider
of enterprise software applications and a full range of services
designed to help organizations deliver a superior customer experience,
while increasing efficiencies and profitability. Leveraging a
service-oriented architecture (SOA), CDC Software offers multiple
delivery options for their solutions including on-premise, hosted,
cloud-based SaaS or blended-hybrid deployment offerings. CDC Software's
solutions include enterprise requirements planning (ERP), manufacturing
operations management, enterprise manufacturing intelligence, supply
chain management (demand management, order management and warehouse and
transportation management), e-Commerce, human capital management,
customer relationship management (CRM), complaint management and aged
care solutions.
CDC Software's recent acquisitions are part of its "acquire, integrate,
innovate and grow" strategy. Fueling the success of this strategy is the
company's global scalable business and technology infrastructure
featuring multiple complementary applications and services, domain
expertise in vertical markets, cost effective product engineering
centers in India and China, a highly collaborative and fast product
development process utilizing Agile methodologies, and a worldwide
network of direct sales and channel operations. This strategy has helped
CDC Software deliver innovative and industry-specific solutions to more
than 6,000 customers worldwide within the manufacturing, distribution,
transportation, retail, government, real estate, financial services,
health care, and not-for-profit industries. For more information, please
visit www.cdcsoftware.com.
About CDC Global Services
CDC Global Services, a business unit of CDC Corporation, provides IT
consulting services, including platform-specific services for Microsoft
and SAP, as well as project management, IT staffing, managed help desk
solutions and a full range of outsourced service offerings. CDC Global
Services provides hardware for data collection and RFID, through
partnerships with some of the industry's most reputable vendors. CDC
Global Services customers benefit from streamlined vendor management and
the ability to control project costs, while being able to access the
right IT resources through a singular point of contact. For more
information on CDC Global Services, visit: www.cdcglobalservices.com.
About CDC Games
CDC Games is a market leader in online and mobile games in China with
more than 160 million registered users. The company pioneered the
"free-to-play, pay-for-merchandise" online games model in China with
Yulgang and launched the first free-to-play, pay for merchandise FPS
(first person shooter) game in China with Special Force. For more
information on CDC Games, visit: www.cdcgames.net
About China.com Inc.
China.com is a leading operator of Internet portals, serving a broad
range of audiences in China. In 2006, it was chosen as the second
company to host Google's Video Adsense which serves video ads targeted
at China's English-speaking audience. China.com also was appointed by
the Jilin government as the exclusive web sponsor of the 2007 Asian
Winter Games. China.com was listed on the GEM of the Stock Exchange of
Hong Kong Limited on March 9, 2000. In December 2000, China.com Inc. was
admitted as a constituent stock of the Hang Seng IT and IT Portfolio
Indices.
Cautionary Note Regarding Forward-Looking Statements
This press release includes "forward-looking statements" within the
meaning of the United States Private Securities Litigation Reform Act of
1995. These forward-looking statements include statements regarding our
beliefs and expectations about the performance of our core businesses,
our beliefs about strategic alternatives we are considering and the
potential benefits related thereto, including strategies related to CDC
Global Services, our beliefs about anticipated future growth and the
competitive position of our businesses, our beliefs about unlocking
shareholder value at our subsidiaries, our beliefs regarding our plans
for growth both organically and through acquisitions, our beliefs and
plans relating to our expansion in China for CDC Global Services and the
utilization of IT outsourcing firms, our plans to leverage CDC
Software's customer base for CDC Global Services, our beliefs regarding
value that can be provided to our customers and potential customers, our
expectations regarding future expansion in China and the potential
benefits to us, our customers and shareholders, our expectations
regarding the launch of new games at CDC Games, and the timing thereof,
our beliefs regarding the current performance of our games and the
continuation any increases we may have experienced, our plans with
respect to updates for our games and the timing thereof, our beliefs and
expectations regarding continued improvement in our operating metrics at
CDC Games during 2010, our beliefs regarding our business and technology
platform, our beliefs regarding our "sum-of-parts" valuation, our
expectations regarding any of our strategies to help unlock shareholder
value, our plans with respect to any matters to be put to our
shareholders, and the expected benefits thereof, our beliefs regarding
our competitive positioning in the event of a recovery in the global
economy, our beliefs regarding the utility of the pro forma financial
information provided herein, our beliefs regarding staff utilization
rates at CDC Global Services, our beliefs regarding factors that may
have negatively affected performance at our businesses, our expectations
and estimates regarding our financial performance for future periods
including those related to revenue and Adjusted EBITDA, and other
statements that are not historical fact, the achievement of which
involve risks, uncertainties and assumptions. These statements are based
on management's current expectations and are subject to risks and
uncertainties and changes in circumstances. There are important factors
that could cause actual results to differ materially from those
anticipated in the forward looking statements, including the following:
(a) the ability to realize strategic objectives by taking advantage of
market opportunities in targeted geographic markets; (b) the ability to
make changes in business strategy, development plans and product
offerings to respond to the needs of current, new and potential
customers, suppliers and strategic partners; (c) the effects of
restructurings and rationalization of operations in our companies; (d)
the ability to address technological changes and developments including
the development and enhancement of products; (e) the ability to develop
and market successful products and services; (f) the entry of new
competitors and their technological advances; (g) the need to develop,
integrate and deploy enterprise software applications to meet customer's
requirements; (h) the possibility of development or deployment
difficulties or delays; (i) the dependence on customer satisfaction with
the company's games, software products and services; (j) continued
commitment to the deployment of the products, including enterprise
software solutions; (k) risks involved in developing software solutions
and integrating them with third-party software and services; (l) the
continued ability of the company's products and services to address
client-specific requirements; (m) demand for and market acceptance of
new and existing enterprise software and services and the positioning of
the company's solutions; (n) risks associated with our convertible debt;
and (o) the ability of staff to operate the enterprise software and
extract and utilize information from the company's products and
services. If any such risks or uncertainties materialize or if any of
the assumptions proves incorrect, our results could differ materially
from the results expressed or implied by the forward-looking statements
we make. Also, the results and benefits experienced by customers and
users set forth in this press release may differ from those of other
users and customers. Further information on risks or other factors that
could cause results to differ is detailed in filings or submissions with
the United States Securities and Exchange Commission made by CDC
Corporation in its Annual Report for the year ended December 31, 2008 on
Form 20-F filed on June 30, 2009. All forward-looking statements
included in this press release are based upon information available to
management as of the date of the press release, and you are cautioned
not to place undue reliance on any forward looking statements which
speak only as of the date of this press release. The company assumes no
obligation to update or alter the forward looking statements whether as
a result of new information, future events or otherwise. Historical
results are not indicative of future performance.
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CDC Corporation
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Unaudited Consolidated Balance Sheets
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(Amounts in thousands of U.S. dollars except share and per share
data)
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December 31,
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December 31,
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2008
|
|
|
|
2009
|
|
|
ASSETS
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
Cash
|
|
$
|
165,693
|
|
|
$
|
115,290
|
|
|
Restricted cash
|
|
|
4,275
|
|
|
|
790
|
|
|
Accounts receivable (net of allowance of $8,304 and $7,675 at
December 31, 2008 and December 31, 2009, respectively)
|
|
|
|
|
|
|
|
72,834
|
|
|
|
60,047
|
|
|
Available-for-sale securities
|
|
|
33,454
|
|
|
|
2,131
|
|
|
Deferred tax assets
|
|
|
7,880
|
|
|
|
6,274
|
|
|
Prepayments and other current assets
|
|
|
11,944
|
|
|
|
13,219
|
|
|
Total current assets
|
|
|
296,080
|
|
|
|
197,751
|
|
|
|
|
|
|
|
|
Property and equipment, net
|
|
|
15,392
|
|
|
|
13,500
|
|
|
Goodwill
|
|
|
155,083
|
|
|
|
175,180
|
|
|
Intangible assets, net
|
|
|
107,287
|
|
|
|
95,803
|
|
|
Investments
|
|
|
12,767
|
|
|
|
13,150
|
|
|
Equity investments
|
|
|
10,261
|
|
|
|
11,798
|
|
|
Deferred tax assets
|
|
|
41,859
|
|
|
|
39,038
|
|
|
Other assets
|
|
|
5,166
|
|
|
|
4,603
|
|
|
Total assets
|
|
$
|
643,895
|
|
|
$
|
550,823
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
Accounts payable
|
|
$
|
23,297
|
|
|
$
|
22,513
|
|
|
Purchase consideration payables
|
|
|
628
|
|
|
|
2,457
|
|
|
Income tax payable
|
|
|
4,194
|
|
|
|
3,231
|
|
|
Accrued liabilities
|
|
|
43,270
|
|
|
|
37,957
|
|
|
Restructuring accruals, current portion
|
|
|
2,026
|
|
|
|
2,052
|
|
|
Short-term loans
|
|
|
8,265
|
|
|
|
11,964
|
|
|
Convertible notes
|
|
|
160,961
|
|
|
|
51,729
|
|
|
Derivatives of convertible notes
|
|
|
41,189
|
|
|
|
-
|
|
|
Deferred revenue
|
|
|
61,977
|
|
|
|
59,975
|
|
|
Deferred tax liabilities
|
|
|
438
|
|
|
|
1,828
|
|
|
Total current liabilities
|
|
|
346,245
|
|
|
|
193,706
|
|
|
|
|
|
|
|
|
Deferred tax liabilities
|
|
|
27,624
|
|
|
|
24,289
|
|
|
Restructuring accruals, net of current portion
|
|
|
239
|
|
|
|
9
|
|
|
Purchase consideration payables, net of current portion
|
|
|
-
|
|
|
|
810
|
|
|
Other liabilities
|
|
|
12,848
|
|
|
|
14,584
|
|
|
Total liabilities
|
|
|
386,956
|
|
|
|
233,398
|
|
|
|
|
|
|
|
|
Contingencies and commitments
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' equity:
|
|
|
|
|
|
Preferred shares, $0.001 par value; 5,000,000 shares authorized,
|
|
|
|
|
|
no shares issued
|
|
|
-
|
|
|
|
-
|
|
|
Class A common shares, $0.00025 par value; 800,000,000 shares
|
|
|
|
|
|
authorized; 118,103,289 and 118,478,970 shares issued as of December
31, 2008 and December 31, 2009, respectively; 106,999,640 and
105,761,946 shares outstanding as of December 31, 2008 and December
31, 2009, respectively
|
|
|
28
|
|
|
|
28
|
|
|
Additional paid-in capital
|
|
|
722,890
|
|
|
|
739,360
|
|
|
Common stock held in treasury; 11,103,649 and 12,717,024 shares
|
|
|
|
|
|
at December 31, 2008 and December 31, 2009, respectively
|
|
|
(56,118
|
)
|
|
|
(58,091
|
)
|
|
Accumulated deficit
|
|
|
(439,030
|
)
|
|
|
(422,234
|
)
|
|
Accumulated other comprehensive income
|
|
|
12,726
|
|
|
|
18,406
|
|
|
Total parent shareholders' equity
|
|
|
240,496
|
|
|
|
277,469
|
|
|
|
|
|
|
|
|
Noncontrolling interest
|
|
|
16,443
|
|
|
|
39,956
|
|
|
Total equity
|
|
|
256,939
|
|
|
|
317,425
|
|
|
Total liabilities and shareholders' equity
|
|
$
|
643,895
|
|
|
$
|
550,823
|
|
|
|
|
|
|
|
|
CDC Corporation
|
|
Unaudited Consolidated Statement of Operations
|
|
(Amounts in thousands of U.S. dollars except share and per share
data)
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
|
September 30,
|
|
December 31,
|
|
|
|
|
2009
|
|
|
|
2009
|
|
|
REVENUE:
|
|
|
|
|
|
Software
|
|
$
|
48,611
|
|
|
$
|
54,326
|
|
|
Global Services
|
|
|
19,223
|
|
|
|
17,573
|
|
|
CDC Games
|
|
|
6,163
|
|
|
|
7,011
|
|
|
China.com
|
|
|
2,652
|
|
|
|
4,068
|
|
|
Total revenue
|
|
|
76,649
|
|
|
|
82,978
|
|
|
|
|
|
|
|
|
COST OF REVENUE:
|
|
|
|
|
|
Software
|
|
|
21,445
|
|
|
|
23,856
|
|
|
Global Services
|
|
|
16,020
|
|
|
|
14,138
|
|
|
CDC Games
|
|
|
4,799
|
|
|
|
5,498
|
|
|
China.com
|
|
|
1,170
|
|
|
|
1,397
|
|
|
Total cost of revenue
|
|
|
43,434
|
|
|
|
44,889
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
33,215
|
|
|
|
38,089
|
|
|
Gross margin %
|
|
|
43
|
%
|
|
|
46
|
%
|
|
|
|
|
|
|
|
OPERATING EXPENSES:
|
|
|
|
|
|
Sales and marketing expenses
|
|
|
11,705
|
|
|
|
11,930
|
|
|
Research and development expenses
|
|
|
4,001
|
|
|
|
5,311
|
|
|
General and administrative expenses
|
|
|
17,147
|
|
|
|
15,311
|
|
|
Exchange (gain) loss on deferred tax assets
|
|
|
(848
|
)
|
|
|
(1,395
|
)
|
|
Amortization expenses
|
|
|
1,953
|
|
|
|
2,033
|
|
|
Restructuring and other charges
|
|
|
1,242
|
|
|
|
4,352
|
|
|
Total operating expenses
|
|
|
35,200
|
|
|
|
37,542
|
|
|
|
|
|
|
|
|
Operating income (loss) from continuing operations
|
|
|
(1,985
|
)
|
|
|
547
|
|
|
Operating margin %
|
|
|
-3
|
%
|
|
|
1
|
%
|
|
|
|
|
|
|
|
Other income, net
|
|
|
10,506
|
|
|
|
4,331
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
8,521
|
|
|
|
4,878
|
|
|
Income tax expense
|
|
|
(1,907
|
)
|
|
|
(3,755
|
)
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
|
6,614
|
|
|
|
1,123
|
|
|
Income (loss) from operations of discontinued subsidiaries, net of
tax
|
|
|
(139
|
)
|
|
|
409
|
|
|
|
|
|
|
|
|
Net income
|
|
|
6,475
|
|
|
|
1,532
|
|
|
Net income attributable to noncontrolling interest
|
|
|
(892
|
)
|
|
|
(1,274
|
)
|
|
|
|
|
|
|
|
Net income attributable to controlling interest
|
|
$
|
5,583
|
|
|
$
|
258
|
|
|
|
|
|
|
|
|
Basic and diluted earnings (loss) per share from continuing
operations attributable to controlling interest (1)
|
|
$
|
0.05
|
|
|
$
|
(0.00
|
)
|
|
|
|
|
|
|
|
Basic and diluted earnings (loss) per share attributable to
controlling interest (1)
|
|
$
|
0.05
|
|
|
$
|
0.00
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding - basic
|
|
|
106,000,395
|
|
|
|
106,051,269
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding - diluted
|
|
|
108,153,645
|
|
|
|
108,319,773
|
|
|
|
|
|
|
|
|
(1) Refer to "Unaudited Basic and Diluted Earnings (Loss) Per Share
Calculation" schedule for calculation of earnings per share amounts.
|
|
CDC Corporation
|
|
Unaudited Consolidated Statement of Operations
|
|
(Amounts in thousands of U.S. dollars except share and per share
data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
December 31,
|
|
|
|
2008 (d
|
)
|
|
|
2009
|
|
|
REVENUE:
|
|
|
|
|
|
Software
|
|
$
|
54,298
|
|
|
$
|
54,326
|
|
|
Global Services
|
|
|
24,487
|
|
|
|
17,573
|
|
|
CDC Games
|
|
|
13,560
|
|
|
|
7,011
|
|
|
China.com
|
|
|
4,697
|
|
|
|
4,068
|
|
|
Total revenue
|
|
|
97,042
|
|
|
|
82,978
|
|
|
|
|
|
|
|
|
COST OF REVENUE:
|
|
|
|
|
|
Software
|
|
|
27,263
|
|
|
|
23,856
|
|
|
Global Services
|
|
|
19,430
|
|
|
|
14,138
|
|
|
CDC Games
|
|
|
7,758
|
|
|
|
5,498
|
|
|
China.com
|
|
|
2,066
|
|
|
|
1,397
|
|
|
Total cost of revenue
|
|
|
56,517
|
|
|
|
44,889
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
40,525
|
|
|
|
38,089
|
|
|
Gross margin %
|
|
|
42
|
%
|
|
|
46
|
%
|
|
|
|
|
|
|
|
OPERATING EXPENSES:
|
|
|
|
|
|
Sales and marketing expenses
|
|
|
15,893
|
|
|
|
11,930
|
|
|
Research and development expenses
|
|
|
6,597
|
|
|
|
5,311
|
|
|
General and administrative expenses
|
|
|
20,018
|
|
|
|
15,311
|
|
|
Exchange (gain) loss on deferred tax assets
|
|
|
2,487
|
|
|
|
(1,395
|
)
|
|
Amortization expenses
|
|
|
2,411
|
|
|
|
2,033
|
|
|
Restructuring and other charges
|
|
|
3,383
|
|
|
|
4,352
|
|
|
Goodwill impairment
|
|
|
50,201
|
|
|
|
-
|
|
|
Total operating expenses
|
|
|
100,990
|
|
|
|
37,542
|
|
|
|
|
|
|
|
|
Operating income (loss) from continuing operations
|
|
|
(60,465
|
)
|
|
|
547
|
|
|
Operating margin %
|
|
|
-62
|
%
|
|
|
1
|
%
|
|
|
|
|
|
|
|
Other income (loss), net
|
|
|
(30,659
|
)
|
|
|
4,331
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes
|
|
|
(91,124
|
)
|
|
|
4,878
|
|
|
Income tax expense
|
|
|
2,044
|
|
|
|
(3,755
|
)
|
|
|
|
|
|
|
|
Income (loss) from continuing operations
|
|
|
(89,080
|
)
|
|
|
1,123
|
|
|
Loss from operations of discontinued subsidiaries, net of tax
|
|
|
5,904
|
|
|
|
409
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
|
(83,176
|
)
|
|
|
1,532
|
|
|
Net (income) loss attributable to noncontrolling interest
|
|
|
2,066
|
|
|
|
(1,274
|
)
|
|
|
|
|
|
|
|
Net income (loss) attributable to controlling interest
|
|
$
|
(81,110
|
)
|
|
$
|
258
|
|
|
|
|
|
|
|
|
Basic and diluted earnings (loss) per share from continuing
operations attributable to controlling interest (1)
|
$
|
(0.81
|
)
|
|
$
|
(0.00
|
)
|
|
|
|
|
|
|
|
Basic and diluted earnings (loss) per share attributable to
controlling interest (1)
|
|
$
|
(0.76
|
)
|
|
$
|
0.00
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding - basic
|
|
|
107,240,880
|
|
|
|
106,051,269
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding - diluted
|
|
|
107,240,880
|
|
|
|
108,319,773
|
|
|
|
|
|
|
|
|
(1) Refer to "Unaudited Basic and Diluted Earnings (Loss) Per Share
Calculation" schedule for calculation of earnings per share amounts.
|
|
CDC Corporation
|
|
Unaudited Consolidated Statement of Operations
|
|
(Amounts in thousands of U.S. dollars except share and per share
data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve months ended
December 31,
|
|
|
|
2008 (d
|
)
|
|
|
2009
|
|
|
REVENUE:
|
|
|
|
|
|
Software
|
|
$
|
240,787
|
|
|
$
|
203,899
|
|
|
Global Services
|
|
|
109,700
|
|
|
|
75,154
|
|
|
CDC Games
|
|
|
44,901
|
|
|
|
28,890
|
|
|
China.com
|
|
|
13,682
|
|
|
|
12,180
|
|
|
Total revenue
|
|
|
409,070
|
|
|
|
320,123
|
|
|
|
|
|
|
|
|
COST OF REVENUE:
|
|
|
|
|
|
Software
|
|
|
110,830
|
|
|
|
93,183
|
|
|
Global Services
|
|
|
84,012
|
|
|
|
62,294
|
|
|
CDC Games
|
|
|
26,453
|
|
|
|
20,990
|
|
|
China.com
|
|
|
6,531
|
|
|
|
5,077
|
|
|
Total cost of revenue
|
|
|
227,826
|
|
|
|
181,544
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
181,244
|
|
|
|
138,579
|
|
|
Gross margin %
|
|
|
44
|
%
|
|
|
43
|
%
|
|
|
|
|
|
|
|
OPERATING EXPENSES:
|
|
|
|
|
|
Sales and marketing expenses
|
|
|
73,830
|
|
|
|
46,089
|
|
|
Research and development expenses
|
|
|
25,909
|
|
|
|
18,019
|
|
|
General and administrative expenses
|
|
|
83,941
|
|
|
|
64,096
|
|
|
Exchange (gain) loss on deferred tax assets
|
|
|
3,271
|
|
|
|
(3,427
|
)
|
|
Amortization expenses
|
|
|
11,663
|
|
|
|
7,927
|
|
|
Restructuring and other charges
|
|
|
7,255
|
|
|
|
7,684
|
|
|
Goodwill impairment
|
|
|
50,201
|
|
|
|
-
|
|
|
Total operating expenses
|
|
|
256,070
|
|
|
|
140,388
|
|
|
|
|
|
|
|
|
Operating loss from continuing operations
|
|
|
(74,826
|
)
|
|
|
(1,809
|
)
|
|
Operating margin %
|
|
|
-18
|
%
|
|
|
-1
|
%
|
|
|
|
|
|
|
|
Other income (loss), net
|
|
|
(37,277
|
)
|
|
|
31,566
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes
|
|
|
(112,103
|
)
|
|
|
29,757
|
|
|
Income tax expense
|
|
|
(1,168
|
)
|
|
|
(10,862
|
)
|
|
|
|
|
|
|
|
Income (loss) from continuing operations
|
|
|
(113,271
|
)
|
|
|
18,895
|
|
|
Loss from operations of discontinued subsidiaries, net of tax
|
|
|
(2,295
|
)
|
|
|
-
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
|
(115,566
|
)
|
|
|
18,895
|
|
|
Net (income) loss attributable to noncontrolling interest
|
|
|
1,364
|
|
|
|
(2,099
|
)
|
|
|
|
|
|
|
|
Net income (loss) attributable to controlling interest
|
|
$
|
(114,202
|
)
|
|
$
|
16,796
|
|
|
|
|
|
|
|
|
Basic and diluted earnings (loss) per share from continuing
operations attributable to controlling interest (1)
|
$
|
(1.05
|
)
|
|
$
|
0.14
|
|
|
|
|
|
|
|
|
Basic and diluted earnings (loss) per share attributable to
controlling interest (1)
|
|
$
|
(1.07
|
)
|
|
$
|
0.14
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding - basic
|
|
|
107,221,587
|
|
|
|
106,208,492
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding - diluted
|
|
|
107,221,587
|
|
|
|
107,433,573
|
|
|
|
|
|
|
|
|
|
|
(1) Refer to "Unaudited Basic and Diluted Earnings (Loss) Per Share
Calculation" schedule for calculation of earnings per share amounts.
|
|
CDC Corporation
|
|
Unaudited Consolidated Statement of Cash Flows
|
|
(Amounts in thousands of U.S. dollars)
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
|
September 30,
|
|
December 31,
|
|
|
|
|
2009
|
|
|
|
|
2009
|
|
|
OPERATING ACTIVITIES:
|
|
|
|
|
|
|
Net income
|
|
$
|
6,475
|
|
|
|
$
|
1,532
|
|
|
Adjustments to reconcile net income to net cash provided by
operating activities
|
|
|
|
|
|
|
Loss on disposal/write-off of PPE net of Cash
|
|
|
147
|
|
|
|
|
65
|
|
|
Gain on disposal of available-for-sale securities
|
|
|
(416
|
)
|
|
|
|
(2,202
|
)
|
|
Bad debt expense
|
|
|
345
|
|
|
|
|
110
|
|
|
Amortization of intangible assets
|
|
|
6,500
|
|
|
|
|
6,775
|
|
|
Depreciation expense
|
|
|
1,725
|
|
|
|
|
1,710
|
|
|
Stock compensation expenses
|
|
|
2,382
|
|
|
|
|
1,213
|
|
|
Deferred income tax provision
|
|
|
1,752
|
|
|
|
|
879
|
|
|
Exchange gain on deferred tax assets
|
|
|
(848
|
)
|
|
|
|
(1,395
|
)
|
|
Intangible assets impairment
|
|
|
-
|
|
|
|
|
3,118
|
|
|
Cost investments impairment
|
|
|
-
|
|
|
|
|
185
|
|
|
Amortization of debt issuance costs and debt discount on convertible
notes
|
|
|
1,115
|
|
|
|
|
523
|
|
|
Fair market value adjustment on convertible notes
|
|
|
(11,507
|
)
|
|
|
|
(2,972
|
)
|
|
Interest income
|
|
|
(1
|
)
|
|
|
|
51
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
Accounts receivable
|
|
|
10,165
|
|
|
|
|
(9,040
|
)
|
|
Deposits, prepayments and other receivables
|
|
|
752
|
|
|
|
|
1,707
|
|
|
Other assets
|
|
|
58
|
|
|
|
|
(458
|
)
|
|
Accounts payable
|
|
|
(692
|
)
|
|
|
|
(414
|
)
|
|
Accrued liabilities
|
|
|
(1,437
|
)
|
|
|
|
663
|
|
|
Deferred revenue
|
|
|
(4,512
|
)
|
|
|
|
2,485
|
|
|
Income tax payable
|
|
|
445
|
|
|
|
|
2,164
|
|
|
Other liabilities
|
|
|
(328
|
)
|
|
|
|
(660
|
)
|
|
Net cash provided by operating activities
|
|
|
12,120
|
|
|
|
|
6,039
|
|
|
|
|
|
|
|
|
|
INVESTING ACTIVITIES:
|
|
|
|
|
|
|
Acquisition, net of cash acquired
|
|
|
(1,324
|
)
|
|
|
|
(25,532
|
)
|
|
Payments for prior year acquisitions
|
|
|
(944
|
)
|
|
|
|
-
|
|
|
Purchase of property, plant & equipment
|
|
|
(2,008
|
)
|
|
|
|
(349
|
)
|
|
Purchases of intangible assets
|
|
|
(253
|
)
|
|
|
|
202
|
|
|
Payment for capitalized software
|
|
|
(905
|
)
|
|
|
|
(556
|
)
|
|
Acquisition of cost method investments
|
|
|
(398
|
)
|
|
|
|
(1,100
|
)
|
|
Proceeds from disposal of available-for-sale securities
|
|
|
11,025
|
|
|
|
|
7,225
|
|
|
Change in restricted cash
|
|
|
8
|
|
|
|
|
(160
|
)
|
|
Net cash provided by investing activities
|
|
|
5,201
|
|
|
|
|
(20,270
|
)
|
|
|
|
|
|
|
|
|
FINANCING ACTIVITIES:
|
|
|
|
|
|
|
Issuance of share capital, net of offering costs
|
|
|
52,032
|
|
|
|
|
184
|
|
|
Short-term borrowings (repayments)
|
|
|
(2,698
|
)
|
|
|
|
(4,328
|
)
|
|
Repayment of convertible notes
|
|
|
(34,569
|
)
|
|
|
|
(475
|
)
|
|
Payment for capital lease obligations
|
|
|
(95
|
)
|
|
|
|
(109
|
)
|
|
Purchases of treasury stock
|
|
|
(241
|
)
|
|
|
|
(1,741
|
)
|
|
Dividend distribution by China.com
|
|
|
(2,863
|
)
|
|
|
|
(5,454
|
)
|
|
Net cash (used) provided in financing activities
|
|
|
11,566
|
|
|
|
|
(11,923
|
)
|
|
|
|
|
|
|
|
|
Effect of exchange differences on cash
|
|
|
805
|
|
|
|
|
(119
|
)
|
|
|
|
|
|
|
|
|
Net increase in cash and cash equivalents
|
|
|
29,692
|
|
|
|
|
(26,273
|
)
|
|
Cash at beginning of period
|
|
|
111,871
|
|
|
|
|
141,563
|
|
|
|
|
|
|
|
|
|
Cash at end of period
|
|
$
|
141,563
|
|
|
|
$
|
115,290
|
|
|
CDC Corporation
|
|
Unaudited Consolidated Statement of Cash Flows
|
|
(Amounts in thousands of U.S. dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
December 31,
|
Twelve months ended
December 31,
|
|
|
|
|
2008
|
|
|
|
2009
|
|
|
|
2008
|
|
|
|
2009
|
|
|
OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
(83,455
|
)
|
|
$
|
1,532
|
|
|
$
|
(115,845
|
)
|
|
$
|
18,895
|
|
|
Adjustments to reconcile net income (loss) to net cash provided by
operating activities
|
|
|
|
|
|
|
Loss on disposal/write-off of PPE net of Cash
|
|
|
270
|
|
|
|
65
|
|
|
|
498
|
|
|
|
291
|
|
|
Loss (gain) on disposal of available-for-sale securities
|
|
|
-
|
|
|
|
(2,202
|
)
|
|
|
(127
|
)
|
|
|
(2,173
|
)
|
|
Loss (gain) on equity investments
|
|
|
554
|
|
|
|
-
|
|
|
|
(406
|
)
|
|
|
-
|
|
|
Loss (gain) on disposal of cost investments
|
|
|
(767
|
)
|
|
|
-
|
|
|
|
(864
|
)
|
|
|
-
|
|
|
Bad debt expense
|
|
|
2,800
|
|
|
|
110
|
|
|
|
5,285
|
|
|
|
1,194
|
|
|
Amortization of intangible assets
|
|
|
9,634
|
|
|
|
6,775
|
|
|
|
34,110
|
|
|
|
27,190
|
|
|
Depreciation expense
|
|
|
2,184
|
|
|
|
1,710
|
|
|
|
8,711
|
|
|
|
6,985
|
|
|
Impairment of available for sale securities
|
|
|
8,518
|
|
|
|
-
|
|
|
|
8,501
|
|
|
|
-
|
|
|
Loss from deemed disposal
|
|
|
2
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Stock compensation expenses
|
|
|
2,444
|
|
|
|
1,213
|
|
|
|
7,902
|
|
|
|
5,428
|
|
|
Deferred income tax provision
|
|
|
(366
|
)
|
|
|
879
|
|
|
|
(3,597
|
)
|
|
|
7,788
|
|
|
Exchange loss (gain) on deferred tax assets
|
|
|
2,487
|
|
|
|
(1,395
|
)
|
|
|
3,271
|
|
|
|
(3,427
|
)
|
|
Release of cumulative translation adjustment related to discontinued
operations
|
|
|
(3,896
|
)
|
|
|
-
|
|
|
|
(3,896
|
)
|
|
|
-
|
|
|
Goodwill impairment
|
|
|
50,201
|
|
|
|
-
|
|
|
|
50,201
|
|
|
|
-
|
|
|
Intangible assets impairment
|
|
|
2,797
|
|
|
|
3,118
|
|
|
|
2,797
|
|
|
|
3,118
|
|
|
Cost investments impairment
|
|
|
-
|
|
|
|
185
|
|
|
|
-
|
|
|
|
185
|
|
|
Restructuring and other charges
|
|
|
5,382
|
|
|
|
-
|
|
|
|
5,382
|
|
|
|
-
|
|
|
Amortization of debt issuance costs and debt discount on convertible
notes
|
|
|
315
|
|
|
|
523
|
|
|
|
1,263
|
|
|
|
4,835
|
|
|
Fair market value adjustment on convertible notes
|
|
|
19,795
|
|
|
|
(2,972
|
)
|
|
|
29,202
|
|
|
|
(36,647
|
)
|
|
Interest income
|
|
|
362
|
|
|
|
51
|
|
|
|
362
|
|
|
|
-
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
(659
|
)
|
|
|
(9,040
|
)
|
|
|
4,753
|
|
|
|
16,710
|
|
|
Deposits, prepayments and other receivables
|
|
|
(1,774
|
)
|
|
|
1,707
|
|
|
|
6,436
|
|
|
|
465
|
|
|
Other assets
|
|
|
1,216
|
|
|
|
(458
|
)
|
|
|
1,023
|
|
|
|
(1,070
|
)
|
|
Accounts payable
|
|
|
(1,557
|
)
|
|
|
(414
|
)
|
|
|
(4,507
|
)
|
|
|
(1,831
|
)
|
|
Accrued liabilities
|
|
|
(9,800
|
)
|
|
|
663
|
|
|
|
(15,026
|
)
|
|
|
(8,796
|
)
|
|
Deferred revenue
|
|
|
4,314
|
|
|
|
2,485
|
|
|
|
(2,408
|
)
|
|
|
(5,960
|
)
|
|
Income tax payable
|
|
|
(442
|
)
|
|
|
2,164
|
|
|
|
2,090
|
|
|
|
(1,169
|
)
|
|
Other liabilities
|
|
|
(3,786
|
)
|
|
|
(660
|
)
|
|
|
486
|
|
|
|
(539
|
)
|
|
Net cash provided by operating activities
|
|
|
6,773
|
|
|
|
6,039
|
|
|
|
25,597
|
|
|
|
31,472
|
|
|
|
|
|
|
|
|
|
|
|
|
INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
Acquisition, net of cash acquired
|
|
|
37
|
|
|
|
(25,532
|
)
|
|
|
(872
|
)
|
|
|
(26,856
|
)
|
|
Payments for prior year acquisitions
|
|
|
2,827
|
|
|
|
-
|
|
|
|
(707
|
)
|
|
|
(944
|
)
|
|
Purchase of property, plant & equipment
|
|
|
(744
|
)
|
|
|
(349
|
)
|
|
|
(4,681
|
)
|
|
|
(3,371
|
)
|
|
Purchases of intangible assets
|
|
|
2,069
|
|
|
|
202
|
|
|
|
(2,505
|
)
|
|
|
(51
|
)
|
|
Payment for capitalized software
|
|
|
(756
|
)
|
|
|
(556
|
)
|
|
|
(7,269
|
)
|
|
|
(3,556
|
)
|
|
Acquisition of investments
|
|
|
(18,130
|
)
|
|
|
(1,100
|
)
|
|
|
(19,726
|
)
|
|
|
(2,326
|
)
|
|
Investment in cost method investees (franchise partners)
|
|
|
(27
|
)
|
|
|
-
|
|
|
|
(650
|
)
|
|
|
(38
|
)
|
|
Proceeds from disposal of available-for-sale securities
|
|
|
18,201
|
|
|
|
7,225
|
|
|
|
77,883
|
|
|
|
33,577
|
|
|
Proceeds from disposal of subsidiaries, net of tax
|
|
|
-
|
|
|
|
-
|
|
|
|
364
|
|
|
|
-
|
|
|
Change in restricted cash
|
|
|
(117
|
)
|
|
|
(160
|
)
|
|
|
4,723
|
|
|
|
3,502
|
|
|
Net cash (used) provided by investing activities
|
|
|
3,360
|
|
|
|
(20,270
|
)
|
|
|
46,560
|
|
|
|
(63
|
)
|
|
|
|
|
|
|
|
|
|
|
|
FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
Issuance of share capital, net of offering costs
|
|
|
-
|
|
|
|
184
|
|
|
|
892
|
|
|
|
52,728
|
|
|
Short-term borrowings (repayments)
|
|
|
(1,502
|
)
|
|
|
(4,328
|
)
|
|
|
(25,823
|
)
|
|
|
(12,196
|
)
|
|
Repayment of convertible notes
|
|
|
(3,175
|
)
|
|
|
(475
|
)
|
|
|
(3,175
|
)
|
|
|
(101,146
|
)
|
|
Payment for capital lease obligations
|
|
|
(98
|
)
|
|
|
(109
|
)
|
|
|
(98
|
)
|
|
|
(569
|
)
|
|
Purchase of China.com shares by CDC Corporation
|
|
|
(2,891
|
)
|
|
|
-
|
|
|
|
(3,083
|
)
|
|
|
-
|
|
|
Purchases of treasury stock
|
|
|
2,693
|
|
|
|
(1,741
|
)
|
|
|
(1,472
|
)
|
|
|
(3,091
|
)
|
|
Dividend distribution by China.com
|
|
|
-
|
|
|
|
(5,454
|
)
|
|
|
(16,450
|
)
|
|
|
(18,972
|
)
|
|
Net cash (used) provided in financing activities
|
|
|
(4,973
|
)
|
|
|
(11,923
|
)
|
|
|
(49,209
|
)
|
|
|
(83,246
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange differences on cash
|
|
|
(589
|
)
|
|
|
(119
|
)
|
|
|
527
|
|
|
|
1,434
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents
|
|
|
4,571
|
|
|
|
(26,273
|
)
|
|
|
23,475
|
|
|
|
(50,403
|
)
|
|
Cash at beginning of period
|
|
|
161,122
|
|
|
|
141,563
|
|
|
|
142,218
|
|
|
|
165,693
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash at end of period
|
|
$
|
165,693
|
|
|
$
|
115,290
|
|
|
$
|
165,693
|
|
|
$
|
115,290
|
|
|
CDC Corporation
|
|
Unaudited Reconciliation From GAAP Results to Adjusted EBITDA
|
|
(Amounts in thousands of U.S. dollars)
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
|
September 30,
|
|
|
December 31,
|
|
|
|
|
2009
|
|
|
|
|
2009
|
|
|
(a) Reconciliation from GAAP results to Adjusted EBITDA from
continuing operations
|
|
|
|
|
|
Operating income (loss) from continuing operations
|
|
$
|
(1,985
|
)
|
|
|
$
|
547
|
|
|
Add back restructuring and other charges
|
|
|
1,242
|
|
|
|
|
4,352
|
|
|
Add back depreciation expense
|
|
|
1,715
|
|
|
|
|
1,785
|
|
|
Add back amortization expense
|
|
|
1,953
|
|
|
|
|
2,033
|
|
|
Add back amortization expense included in cost of revenue
|
|
|
4,547
|
|
|
|
|
4,742
|
|
|
Add back stock compensation expenses
|
|
|
2,367
|
|
|
|
|
1,303
|
|
|
Add back exchange (gain) loss on deferred taxes
|
|
|
(848
|
)
|
|
|
|
(1,395
|
)
|
|
Add back deferred revenue grind
|
|
|
-
|
|
|
|
|
632
|
|
|
Adjusted EBITDA from continuing operations (1)
|
|
$
|
8,991
|
|
|
|
$
|
13,999
|
|
|
Adjusted EBITDA margin %
|
|
|
12
|
%
|
|
|
|
17
|
%
|
|
|
|
|
|
|
|
|
CDC Software
|
|
Unaudited Reconciliation From GAAP Results to Adjusted EBITDA
|
|
(Amounts in thousands of U.S. dollars)
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
|
September 30,
|
|
|
December 31,
|
|
|
|
|
2009
|
|
|
|
|
2009
|
|
|
(a) Reconciliation from GAAP results to Adjusted EBITDA from
continuing operations
|
|
|
|
|
|
Operating income from continuing operations
|
|
$
|
7,188
|
|
|
|
$
|
7,079
|
|
|
Add back restructuring and other charges
|
|
|
900
|
|
|
|
|
1,176
|
|
|
Add back depreciation expense
|
|
|
766
|
|
|
|
|
750
|
|
|
Add back amortization expense
|
|
|
1,094
|
|
|
|
|
1,151
|
|
|
Add back amortization expense included in cost of revenue
|
|
|
3,388
|
|
|
|
|
3,585
|
|
|
Add back stock compensation expenses
|
|
|
750
|
|
|
|
|
418
|
|
|
Add back exchange (gain) loss on deferred taxes
|
|
|
(865
|
)
|
|
|
|
(39
|
)
|
|
Add back deferred revenue grind
|
|
|
-
|
|
|
|
|
632
|
|
|
Adjusted EBITDA from continuing operations (1)
|
|
$
|
13,221
|
|
|
|
$
|
14,752
|
|
|
Adjusted EBITDA margin %
|
|
|
27
|
%
|
|
|
|
27
|
%
|
|
|
|
|
|
|
|
|
CDC Global Services
|
|
Unaudited Reconciliation From GAAP Results to Adjusted EBITDA
|
|
(Amounts in thousands of U.S. dollars)
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
|
September 30,
|
|
|
December 31,
|
|
|
|
|
2009
|
|
|
|
|
2009
|
|
|
(a) Reconciliation from GAAP results to Adjusted EBITDA from
continuing operations
|
|
|
|
|
|
Operating loss from continuing operations
|
|
$
|
(2,165
|
)
|
|
|
$
|
(1,979
|
)
|
|
Add back restructuring and other charges
|
|
|
1,460
|
|
|
|
|
1,522
|
|
|
Add back depreciation expense
|
|
|
84
|
|
|
|
|
99
|
|
|
Add back amortization expense
|
|
|
624
|
|
|
|
|
645
|
|
|
Add back amortization expense included in cost of revenue
|
|
|
1
|
|
|
|
|
2
|
|
|
Add back stock compensation expenses
|
|
|
286
|
|
|
|
|
92
|
|
|
Add back exchange loss on deferred taxes
|
|
|
1
|
|
|
|
|
-
|
|
|
Add back deferred revenue grind
|
|
|
-
|
|
|
|
|
-
|
|
|
Adjusted EBITDA from continuing operations
|
|
$
|
291
|
|
|
|
$
|
381
|
|
|
Adjusted EBITDA margin %
|
|
|
2
|
%
|
|
|
|
2
|
%
|
|
|
|
|
|
|
|
|
CDC Games Corporation
|
|
Unaudited Reconciliation From GAAP Results to Adjusted EBITDA
|
|
(Amounts in thousands of U.S. dollars)
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
|
September 30,
|
|
|
December 31,
|
|
|
|
|
2009
|
|
|
|
|
2009
|
|
|
(a) Reconciliation from GAAP results to Adjusted EBITDA from
continuing operations
|
|
|
|
|
|
Operating income (loss) from continuing operations
|
|
$
|
(3,593
|
)
|
|
|
$
|
(4,850
|
)
|
|
Add back restructuring and other charges
|
|
|
231
|
|
|
|
|
3,138
|
|
|
Add back depreciation expense
|
|
|
792
|
|
|
|
|
793
|
|
|
Add back amortization expense
|
|
|
-
|
|
|
|
|
-
|
|
|
Add back amortization expense included in cost of revenue
|
|
|
1,158
|
|
|
|
|
1,156
|
|
|
Add back stock compensation expenses
|
|
|
519
|
|
|
|
|
219
|
|
|
Add back exchange (gain) loss on deferred taxes
|
|
|
-
|
|
|
|
|
-
|
|
|
Add back deferred revenue grind
|
|
|
-
|
|
|
|
|
-
|
|
|
Adjusted EBITDA from continuing operations
|
|
$
|
(893
|
)
|
|
|
$
|
456
|
|
|
Adjusted EBITDA margin %
|
|
|
-14
|
%
|
|
|
|
7
|
%
|
|
|
|
|
|
|
|
|
CDC China.com
|
|
Unaudited Reconciliation From GAAP Results to Adjusted EBITDA
|
|
(Amounts in thousands of U.S. dollars)
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
|
September 30,
|
|
|
December 31,
|
|
|
|
|
2009
|
|
|
|
|
2009
|
|
|
(a) Reconciliation from GAAP results to Adjusted EBITDA from
continuing operations
|
|
|
|
|
|
Operating loss from continuing operations
|
|
$
|
(759
|
)
|
|
|
$
|
1,971
|
|
|
Add back restructuring and other charges
|
|
|
-
|
|
|
|
|
-
|
|
|
Add back depreciation expense
|
|
|
60
|
|
|
|
|
129
|
|
|
Add back amortization expense
|
|
|
-
|
|
|
|
|
-
|
|
|
Add back amortization expense included in cost of revenue
|
|
|
-
|
|
|
|
|
-
|
|
|
Add back stock compensation expenses
|
|
|
340
|
|
|
|
|
65
|
|
|
Add back exchange (gain) loss on deferred taxes
|
|
|
-
|
|
|
|
|
(1,356
|
)
|
|
Add back deferred revenue grind
|
|
|
-
|
|
|
|
|
-
|
|
|
Adjusted EBITDA from continuing operations
|
|
$
|
(359
|
)
|
|
|
$
|
809
|
|
|
Adjusted EBITDA margin %
|
|
|
-14
|
%
|
|
|
|
20
|
%
|
|
|
|
|
|
|
|
|
Corporate
|
|
Unaudited Reconciliation From GAAP Results to Adjusted EBITDA
|
|
(Amounts in thousands of U.S. dollars)
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
|
September 30,
|
|
|
December 31,
|
|
|
|
|
2009
|
|
|
|
|
2009
|
|
|
(a) Reconciliation from GAAP results to Adjusted EBITDA from
continuing operations
|
|
|
|
|
|
Operating loss from continuing operations
|
|
$
|
(2,656
|
)
|
|
|
$
|
(1,674
|
)
|
|
Add back restructuring and other charges
|
|
|
(1,349
|
)
|
|
|
|
(1,484
|
)
|
|
Add back depreciation expense
|
|
|
13
|
|
|
|
|
14
|
|
|
Add back amortization expense
|
|
|
235
|
|
|
|
|
237
|
|
|
Add back amortization expense included in cost of revenue
|
|
|
-
|
|
|
|
|
(1
|
)
|
|
Add back stock compensation expenses
|
|
|
472
|
|
|
|
|
509
|
|
|
Add back exchange (gain) loss on deferred taxes
|
|
|
16
|
|
|
|
|
-
|
|
|
Add back deferred revenue grind
|
|
|
-
|
|
|
|
|
-
|
|
|
Adjusted EBITDA from continuing operations
|
|
$
|
(3,269
|
)
|
|
|
$
|
(2,399
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Adjusted EBITDA does not include the adjustment related to
capitalized software costs which are credited against research and
development expenses in CDC Software statement of operations. Below
is a summary of capitalized software credits for the three months
ended:
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
|
September 30,
|
|
|
December 31,
|
|
|
|
|
2009
|
|
|
|
|
2009
|
|
|
|
|
|
|
|
|
|
Capitalized software credits
|
|
$
|
(905
|
)
|
|
|
$
|
(556
|
)
|
|
CDC Corporation
|
|
Unaudited Reconciliation From GAAP Results to Adjusted EBITDA
|
|
(Amounts in thousands of U.S. dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
December 31,
|
|
Twelve months ended
December 31,
|
|
|
|
|
2008
|
|
|
|
2009
|
|
|
|
2008
|
|
|
|
2009
|
|
|
(a) Reconciliation from GAAP results to Adjusted EBITDA from
continuing operations
|
|
|
|
|
|
|
Operating income (loss) from continuing operations
|
|
$
|
(60,465
|
)
|
|
$
|
547
|
|
|
$
|
(74,826
|
)
|
|
$
|
(1,809
|
)
|
|
Add back restructuring and other charges
|
|
|
53,584
|
|
|
|
4,352
|
|
|
|
57,456
|
|
|
|
7,684
|
|
|
Add back depreciation expense
|
|
|
2,088
|
|
|
|
1,785
|
|
|
|
8,311
|
|
|
|
6,985
|
|
|
Add back amortization expense
|
|
|
2,413
|
|
|
|
2,033
|
|
|
|
11,663
|
|
|
|
7,927
|
|
|
Add back amortization expense included in cost of revenue
|
|
|
7,206
|
|
|
|
4,742
|
|
|
|
22,280
|
|
|
|
19,263
|
|
|
Add back stock compensation expenses
|
|
|
2,424
|
|
|
|
1,303
|
|
|
|
7,781
|
|
|
|
5,428
|
|
|
Add back exchange (gain) loss on deferred taxes
|
|
|
2,487
|
|
|
|
(1,395
|
)
|
|
|
3,271
|
|
|
|
(3,427
|
)
|
|
Add back deferred revenue grind
|
|
|
-
|
|
|
|
632
|
|
|
|
-
|
|
|
|
632
|
|
|
Adjusted EBITDA from continuing operations (1)
|
|
$
|
9,737
|
|
|
$
|
13,999
|
|
|
$
|
35,936
|
|
|
$
|
42,683
|
|
|
Adjusted EBITDA margin %
|
|
|
10
|
%
|
|
|
17
|
%
|
|
|
9
|
%
|
|
|
13
|
%
|
|
|
|
|
|
|
|
|
|
|
|
CDC Software
|
|
Unaudited Reconciliation From GAAP Results to Adjusted EBITDA
|
|
(Amounts in thousands of U.S. dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
December 31,
|
|
Twelve months ended
December 31,
|
|
|
|
|
2008
|
|
|
|
2009
|
|
|
|
2008
|
|
|
|
2009
|
|
|
(a) Reconciliation from GAAP results to Adjusted EBITDA from
continuing operations
|
|
|
|
|
|
|
Operating income from continuing operations
|
|
$
|
(4,059
|
)
|
|
$
|
7,079
|
|
|
$
|
3,000
|
|
|
$
|
28,846
|
|
|
Add back restructuring and other charges
|
|
|
1,351
|
|
|
|
1,176
|
|
|
|
5,012
|
|
|
|
3,351
|
|
|
Add back depreciation expense
|
|
|
1,009
|
|
|
|
750
|
|
|
|
4,201
|
|
|
|
3,122
|
|
|
Add back amortization expense
|
|
|
1,737
|
|
|
|
1,151
|
|
|
|
6,843
|
|
|
|
4,532
|
|
|
Add back amortization expense included in cost of revenue
|
|
|
4,539
|
|
|
|
3,585
|
|
|
|
15,766
|
|
|
|
14,408
|
|
|
Add back stock compensation expenses
|
|
|
735
|
|
|
|
418
|
|
|
|
1,548
|
|
|
|
1,550
|
|
|
Add back exchange (gain) loss on deferred taxes
|
|
|
2,487
|
|
|
|
(39
|
)
|
|
|
3,271
|
|
|
|
(2,093
|
)
|
|
Add back deferred revenue grind
|
|
|
-
|
|
|
|
632
|
|
|
|
-
|
|
|
|
632
|
|
|
Adjusted EBITDA from continuing operations (1)
|
|
$
|
7,799
|
|
|
$
|
14,752
|
|
|
$
|
39,641
|
|
|
$
|
54,348
|
|
|
Adjusted EBITDA margin %
|
|
|
14
|
%
|
|
|
27
|
%
|
|
|
16
|
%
|
|
|
27
|
%
|
|
|
|
|
|
|
|
|
|
|
|
CDC Global Services
|
|
Unaudited Reconciliation From GAAP Results to Adjusted EBITDA
|
|
(Amounts in thousands of U.S. dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
December 31,
|
|
Twelve months ended
December 31,
|
|
|
|
|
2008
|
|
|
|
2009
|
|
|
|
2008
|
|
|
|
2009
|
|
|
(a) Reconciliation from GAAP results to Adjusted EBITDA from
continuing operations
|
|
|
|
|
|
|
Operating loss from continuing operations
|
|
$
|
(27,860
|
)
|
|
$
|
(1,979
|
)
|
|
$
|
(34,636
|
)
|
|
$
|
(8,926
|
)
|
|
Add back restructuring and other charges
|
|
|
28,719
|
|
|
|
1,522
|
|
|
|
35,160
|
|
|
|
6,775
|
|
|
Add back depreciation expense
|
|
|
119
|
|
|
|
99
|
|
|
|
541
|
|
|
|
319
|
|
|
Add back amortization expense
|
|
|
422
|
|
|
|
645
|
|
|
|
3,292
|
|
|
|
2,425
|
|
|
Add back amortization expense included in cost of revenue
|
|
|
34
|
|
|
|
2
|
|
|
|
35
|
|
|
|
14
|
|
|
Add back stock compensation expenses
|
|
|
16
|
|
|
|
92
|
|
|
|
272
|
|
|
|
682
|
|
|
Add back exchange loss on deferred taxes
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
6
|
|
|
Add back deferred revenue grind
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Adjusted EBITDA from continuing operations
|
|
$
|
1,450
|
|
|
$
|
381
|
|
|
$
|
4,664
|
|
|
$
|
1,295
|
|
|
Adjusted EBITDA margin %
|
|
|
6
|
%
|
|
|
2
|
%
|
|
|
4
|
%
|
|
|
2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
CDC Games Corporation
|
|
Unaudited Reconciliation From GAAP Results to Adjusted EBITDA
|
|
(Amounts in thousands of U.S. dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
December 31,
|
|
Twelve months ended
December 31,
|
|
|
|
|
2008
|
|
|
|
2009
|
|
|
|
2008
|
|
|
|
2009
|
|
|
(a) Reconciliation from GAAP results to Adjusted EBITDA from
continuing operations
|
|
|
|
|
|
|
Operating income (loss) from continuing operations
|
|
$
|
(20,973
|
)
|
|
$
|
(4,850
|
)
|
|
$
|
(20,462
|
)
|
|
$
|
(10,733
|
)
|
|
Add back restructuring and other charges
|
|
|
20,970
|
|
|
|
3,138
|
|
|
|
21,319
|
|
|
|
3,745
|
|
|
Add back depreciation expense
|
|
|
856
|
|
|
|
793
|
|
|
|
3,079
|
|
|
|
3,124
|
|
|
Add back amortization expense
|
|
|
49
|
|
|
|
-
|
|
|
|
590
|
|
|
|
23
|
|
|
Add back amortization expense included in cost of revenue
|
|
|
2,633
|
|
|
|
1,156
|
|
|
|
6,479
|
|
|
|
4,841
|
|
|
Add back stock compensation expenses
|
|
|
16
|
|
|
|
219
|
|
|
|
42
|
|
|
|
979
|
|
|
Add back exchange (gain) loss on deferred taxes
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Add back deferred revenue grind
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Adjusted EBITDA from continuing operations
|
|
$
|
3,551
|
|
|
$
|
456
|
|
|
$
|
11,047
|
|
|
$
|
1,979
|
|
|
Adjusted EBITDA margin %
|
|
|
26
|
%
|
|
|
7
|
%
|
|
|
25
|
%
|
|
|
7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
CDC China.com
|
|
Unaudited Reconciliation From GAAP Results to Adjusted EBITDA
|
|
(Amounts in thousands of U.S. dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
December 31,
|
|
Twelve months ended
December 31,
|
|
|
|
|
2008
|
|
|
|
2009
|
|
|
|
2008
|
|
|
|
2009
|
|
|
(a) Reconciliation from GAAP results to Adjusted EBITDA from
continuing operations
|
|
|
|
|
|
|
Operating loss from continuing operations
|
|
$
|
(4,621
|
)
|
|
$
|
1,971
|
|
|
$
|
(7,768
|
)
|
|
$
|
(93
|
)
|
|
Add back restructuring and other charges
|
|
|
5,096
|
|
|
|
-
|
|
|
|
5,096
|
|
|
|
-
|
|
|
Add back depreciation expense
|
|
|
(85
|
)
|
|
|
129
|
|
|
|
277
|
|
|
|
367
|
|
|
Add back amortization expense
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Add back amortization expense included in cost of revenue
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Add back stock compensation expenses
|
|
|
438
|
|
|
|
65
|
|
|
|
1,396
|
|
|
|
837
|
|
|
Add back exchange (gain) loss on deferred taxes
|
|
|
-
|
|
|
|
(1,356
|
)
|
|
|
-
|
|
|
|
(1,356
|
)
|
|
Add back deferred revenue grind
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Adjusted EBITDA from continuing operations
|
|
$
|
828
|
|
|
$
|
809
|
|
|
$
|
(999
|
)
|
|
$
|
(245
|
)
|
|
Adjusted EBITDA margin %
|
|
|
18
|
%
|
|
|
20
|
%
|
|
|
-7
|
%
|
|
|
-2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Corporate
|
|
Unaudited Reconciliation From GAAP Results to Adjusted EBITDA
|
|
(Amounts in thousands of U.S. dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
December 31,
|
|
Twelve months ended
December 31,
|
|
|
|
|
2008
|
|
|
|
2009
|
|
|
|
2008
|
|
|
|
2009
|
|
|
(a) Reconciliation from GAAP results to Adjusted EBITDA from
continuing operations
|
|
|
|
|
|
|
Operating loss from continuing operations
|
|
$
|
(2,952
|
)
|
|
$
|
(1,674
|
)
|
|
$
|
(14,960
|
)
|
|
$
|
(10,903
|
)
|
|
Add back restructuring and other charges
|
|
|
(2,552
|
)
|
|
|
(1,484
|
)
|
|
|
(9,131
|
)
|
|
|
(6,187
|
)
|
|
Add back depreciation expense
|
|
|
189
|
|
|
|
14
|
|
|
|
213
|
|
|
|
53
|
|
|
Add back amortization expense
|
|
|
205
|
|
|
|
237
|
|
|
|
938
|
|
|
|
947
|
|
|
Add back amortization expense included in cost of revenue
|
|
|
-
|
|
|
|
(1
|
)
|
|
|
-
|
|
|
|
-
|
|
|
Add back stock compensation expenses
|
|
|
1,219
|
|
|
|
509
|
|
|
|
4,523
|
|
|
|
1,380
|
|
|
Add back exchange loss on deferred taxes
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
16
|
|
|
Add back deferred revenue grind
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Adjusted EBITDA from continuing operations
|
|
$
|
(3,891
|
)
|
|
$
|
(2,399
|
)
|
|
$
|
(18,417
|
)
|
|
$
|
(14,694
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Adjusted EBITDA does not include the adjustment related to
capitalized software costs which are credited against research and
development expenses in CDC Software statement of operations. Below
is a summary of capitalized software credits for the three months
and twelve months:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
December 31,
|
|
Twelve months ended
December 31,
|
|
|
|
|
2008
|
|
|
|
2009
|
|
|
|
2008
|
|
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtract capitalized software credit
|
|
$
|
(757
|
)
|
|
$
|
(556
|
)
|
|
$
|
(7,269
|
)
|
|
$
|
(3,556
|
)
|
|
CDC Corporation
|
|
Unaudited Reconciliation From GAAP Cash to Non GAAP Cash
|
|
(Amounts in thousands of U.S. dollars)
|
|
|
|
|
|
|
|
|
December 31,
|
|
|
(a) Non GAAP Cash and Cash Equivalents Reconciliation
|
|
|
2009
|
|
|
Cash
|
|
$
|
115,290
|
|
|
Add restricted cash
|
|
|
790
|
|
|
Add available for sale securities - current
|
|
|
2,131
|
|
|
Investments (1)
|
|
|
12,546
|
|
|
Non GAAP cash and cash equivalents
|
|
$
|
130,757
|
|
|
|
|
|
|
|
(1) - Excludes investments in franchise partners of $604 at December
31, 2009.
|
|
|
|
|
|
|
|
|
|
CDC Corporation
|
|
Unaudited Revenue Details
|
|
(Amounts in thousands of U.S. dollars)
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
|
|
September 30,
|
|
December 31,
|
|
|
|
|
2009
|
|
|
|
2009
|
|
Segment revenue from external customers:
|
|
|
|
|
|
Software:
|
|
|
|
|
|
Licenses
|
|
$
|
7,618
|
|
|
$
|
10,511
|
|
Maintenance
|
|
|
25,414
|
|
|
|
25,343
|
|
Professional services
|
|
|
14,882
|
|
|
|
15,800
|
|
Hardware
|
|
|
697
|
|
|
|
2,056
|
|
SaaS Implementation and support
|
|
|
-
|
|
|
|
616
|
|
Total Software
|
|
|
48,611
|
|
|
|
54,326
|
|
|
|
|
|
|
|
Global Services:
|
|
|
|
|
|
Licenses
|
|
|
124
|
|
|
|
106
|
|
Consulting services
|
|
|
18,138
|
|
|
|
15,976
|
|
Hardware
|
|
|
961
|
|
|
|
1,491
|
|
Total Global Services
|
|
|
19,223
|
|
|
|
17,573
|
|
|
|
|
|
|
|
CDC Games
|
|
|
6,163
|
|
|
|
7,011
|
|
China.com
|
|
|
2,652
|
|
|
|
4,068
|
|
Total consolidated revenue
|
|
$
|
76,649
|
|
|
$
|
82,978
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
December 31,
|
|
|
|
2008 (d)
|
|
|
|
2009
|
|
Segment revenue from external customers:
|
|
|
|
|
|
Software:
|
|
|
|
|
|
Licenses
|
|
$
|
9,333
|
|
|
$
|
10,511
|
|
Maintenance
|
|
|
24,866
|
|
|
|
25,343
|
|
Professional services
|
|
|
19,030
|
|
|
|
15,800
|
|
Hardware
|
|
|
1,069
|
|
|
|
2,056
|
|
SaaS Implementation and support
|
|
|
-
|
|
|
|
616
|
|
Total Software
|
|
|
54,298
|
|
|
|
54,326
|
|
|
|
|
|
|
|
Global Services:
|
|
|
|
|
|
Licenses
|
|
|
749
|
|
|
|
106
|
|
Consulting services
|
|
|
21,879
|
|
|
|
15,976
|
|
Hardware
|
|
|
1,859
|
|
|
|
1,491
|
|
Total Global Services
|
|
|
24,487
|
|
|
|
17,573
|
|
|
|
|
|
|
|
CDC Games
|
|
|
13,560
|
|
|
|
7,011
|
|
China.com
|
|
|
4,697
|
|
|
|
4,068
|
|
Total consolidated revenue
|
|
$
|
97,042
|
|
|
$
|
82,978
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve months ended
December 31,
|
|
|
|
2008 (d)
|
|
|
|
2009
|
|
Segment revenue from external customers:
|
|
|
|
|
|
Software:
|
|
|
|
|
|
Licenses
|
|
$
|
45,340
|
|
|
$
|
33,085
|
|
Maintenance
|
|
|
103,606
|
|
|
|
99,775
|
|
Professional services
|
|
|
87,971
|
|
|
|
66,666
|
|
Hardware
|
|
|
3,870
|
|
|
|
3,757
|
|
SaaS Implementation and support
|
|
|
-
|
|
|
|
616
|
|
Total Software
|
|
|
240,787
|
|
|
|
203,899
|
|
|
|
|
|
|
|
Global Services:
|
|
|
|
|
|
Licenses
|
|
|
4,431
|
|
|
|
1,269
|
|
Consulting services
|
|
|
100,302
|
|
|
|
69,256
|
|
Hardware
|
|
|
4,967
|
|
|
|
4,629
|
|
Total Global Services
|
|
|
109,700
|
|
|
|
75,154
|
|
|
|
|
|
|
|
CDC Games
|
|
|
44,901
|
|
|
|
28,890
|
|
China.com
|
|
|
13,682
|
|
|
|
12,180
|
|
Total consolidated revenue
|
|
$
|
409,070
|
|
|
$
|
320,123
|
|
CDC Corporation
|
|
Unaudited Basic and Diluted Earnings (Loss) Per Share Computation
|
|
(Amounts in thousands of U.S. dollars except share and per share
data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
December 31,
|
Twelve months ended
December 31,
|
|
|
|
|
|
2008
|
|
|
|
2009
|
|
|
|
2008
|
|
|
|
2009
|
|
|
Numerator for earnings (loss) from continuing operations
attributable to controlling interest per common share:
|
|
|
|
|
Net (loss) income from continuing operations
|
|
$
|
(89,080
|
)
|
|
$
|
1,123
|
|
|
$
|
(113,271
|
)
|
|
$
|
18,895
|
|
|
|
Net adjustments for loss (income) attributable to noncontrolling
interest and
dilutive effect of subsidiary issued stock (1)
|
|
|
1,977
|
|
|
|
(1,300
|
)
|
|
|
1,180
|
|
|
|
(2,100
|
)
|
|
|
Adjusted (loss) income from continuing operations
|
|
|
(87,103
|
)
|
|
|
(177
|
)
|
|
|
(112,091
|
)
|
|
|
16,795
|
|
|
|
Amount allocated to convertible notes (2)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,711
|
)
|
|
|
Net (loss) income from continuing operations attributable to
controlling
interest
|
|
$
|
(87,103
|
)
|
|
$
|
(177
|
)
|
|
$
|
(112,091
|
)
|
|
$
|
15,084
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Numerator for earnings (loss) attributable to controlling
interest per common share:
|
|
|
|
|
|
|
|
|
Net (loss) income from continuing operations attributable to
controlling
interest
|
|
$
|
(87,103
|
)
|
|
$
|
(177
|
)
|
|
$
|
(112,091
|
)
|
|
$
|
15,084
|
|
|
|
(Loss) income from operations of discontinued subsidiaries, net of
tax
|
|
|
5,904
|
|
|
|
409
|
|
|
|
(2,295
|
)
|
|
|
-
|
|
|
|
(Loss) income from operations of discontinued subsidiaries allocated
to
convertible notes (2)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
Net (loss) income attributable to controlling interest
|
|
$
|
(81,199
|
)
|
|
$
|
232
|
|
|
$
|
(114,386
|
)
|
|
$
|
15,084
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator:
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding - basic
|
|
|
107,240,880
|
|
|
|
106,051,269
|
|
|
|
107,221,587
|
|
|
|
106,208,492
|
|
|
|
Employee compensation related to common shares including stock
options
|
|
|
-
|
|
|
|
2,268,504
|
|
|
|
-
|
|
|
|
1,225,081
|
|
|
|
Weighted average number of common shares outstanding - diluted
|
|
|
107,240,880
|
|
|
|
108,319,773
|
|
|
|
107,221,587
|
|
|
|
107,433,573
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per share amounts:
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) from continuing operations attributable to
controlling
interest per common share - basic
|
|
$
|
(0.81
|
)
|
|
$
|
(0.00
|
)
|
|
$
|
(1.05
|
)
|
|
$
|
0.14
|
|
|
|
Earnings (loss) from continuing operations attributable to
controlling
interest per common share - dilutive
|
|
$
|
(0.81
|
)
|
|
$
|
(0.00
|
)
|
|
$
|
(1.05
|
)
|
|
$
|
0.14
|
|
|
|
Earnings (loss) attributable to controlling interest per common
share -
basic
|
|
$
|
(0.76
|
)
|
|
$
|
0.00
|
|
|
$
|
(1.07
|
)
|
|
$
|
0.14
|
|
|
|
Earnings (loss) attributable to controlling interest per common
share -
dilutive
|
|
$
|
(0.76
|
)
|
|
$
|
0.00
|
|
|
$
|
(1.07
|
)
|
|
$
|
0.14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1
|
)
|
Includes the dilutive effects of subsidiary-issued stock-based
awards, if any, and adjustments for discontinued operations.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2
|
)
|
Income has been allocated to common stock and convertible notes
based on their respective rights to share in dividends. In
accordance with FASB Accounting Standards Codification 260, "Earnings
Per Share" the Company's convertible notes meet the definition
of participating securities and are included in the basic earnings
per share using the two-class stock method and in diluted earnings
per share using the more dilutive of the if-converted method or
two-class stock method.
|
CDC Corporation
Investor Relations
Monish
Bahl, 678-259-8510
mbahl@cdcsoftware.com
or
CDC
Software
Media Relations
Lorretta
Gasper, 678-259-8631
lgasper@cdcsoftware.com
Copyright © 2012, Business Wire, Inc., All rights reserved. Copyright © 2012, NewsBlaze, Daily News
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