"It was both a historic year and fourth quarter for AsiaInfo," remarked
AsiaInfo President and Chief Executive Officer
Mr. Zhang continued, "During the quarter, we announced a contract with
China Unicom to build a centralized 3G business management platform which will
enable the operator to efficiently coordinate and manage its 3G sales and
services nationwide. We also recently announced a contract win to develop a
cost-effective IT system for China Mobile's centralized IT center in
Fourth Quarter 2009 Financial Results
Total revenues for the fourth quarter of 2009 were
Gross margin for the quarter was 57.7%, compared to 53.5% in the year-ago period and 54.6% in the previous quarter. The year-over-year and sequential increases in gross margin were primarily due to a strong contribution from higher-margin software solutions and services. Gross profit as a percentage of net revenue (non-GAAP) was 60.9% in the fourth quarter of 2009, compared to 56.4% in the year-ago period and 57.0% in the previous quarter.
In the fourth quarter of 2009, the AsiaInfo Technologies business unit,
which focuses on telecommunications software and services, contributed 80.4%
and 80.0% to total revenue and net revenue (non-GAAP), respectively. Total
revenues for the AsiaInfo Technologies business unit increased 46.9%
year-over-year and 16.7% sequentially to
In the fourth quarter of 2009, the Lenovo-AsiaInfo business unit, which
focuses on IT security products and services, contributed 19.6% to total
revenues and 20.0% to net revenue (non-GAAP). Total revenues for the
Lenovo-AsiaInfo business unit increased 25.1% year-over-year and 35.9%
sequentially to
Total operating expenses for the fourth quarter of 2009 increased 41.5%
year-over-year and 21.1% sequentially to
Income from operations for the fourth quarter of 2009 was
Other income for the fourth quarter of 2009 was
In the fourth quarter of 2009, AsiaInfo recorded net income attributable
to AsiaInfo Holdings, Inc. of
In the fourth quarter of 2009, net income attributable to AsiaInfo
Holdings, Inc. (non-GAAP)(4) was
As of
Full-year 2009 Financial Results
Full-year 2009 total revenues increased 42.0% year-over-year to
Gross margin for full-year 2009 was 54.1%, compared to 50.6% in the year-ago period. The improvement in gross margin reflects a strong execution of the Company's long-term strategy of providing high-quality IT software and services to their customers, the improving operating results of the Company's Lenovo-AsiaInfo business unit and a decrease in revenue derived from the sale of third-party hardware. Gross profit as a percentage of net revenue (non-GAAP) for full-year 2009 was 57.7% compared to 55.9% in the year-ago period.
The AsiaInfo Technologies business unit contributed 85.7% and 86.1% to
full-year 2009 total revenues and net revenue (non-GAAP), respectively. Total
revenues and net revenue (non-GAAP) for the AsiaInfo Technologies business
unit increased 45.5% and 50.6% year-over-year to
The Lenovo-AsiaInfo business unit contributed 14.3% and 13.9% to full-year
2009 total revenues and net revenue (non-GAAP) respectively. Total revenues
and net revenue (non-GAAP) for the Lenovo-AsiaInfo business unit increased
24.1% and 30.2% year-over-year to
Total operating expenses for full-year 2009 increased 40.8% year-over-year
to
Operating margin of total revenues was 14.9% for full-year 2009, compared to 11.0% in the year-ago period. Operating margin of net revenue (non-GAAP) for full-year 2009 was 15.9%, compared to 12.1% in the year-ago period.
AsiaInfo recorded net income attributable to AsiaInfo Holdings, Inc. of
Operating cash flow for the full-year 2009 was a net inflow of
First Quarter 2010 Guidance
AsiaInfo expects first quarter 2010 net income from continuing operations
per basic share to be in the range of
(1) Net revenue (non-GAAP), a non-GAAP measure, represents total revenue net of third-party hardware costs. A reconciliation of net revenue (non-GAAP) to GAAP revenue is provided at the end of this press release. (2) Operating margin of total revenue is operating income divided by total revenue. (3) Operating margin of net revenue (non-GAAP) is operating income divided by net revenue (non-GAAP). (4) Net income attributable to AsiaInfo Holdings, Inc. (non-GAAP) and net income attributable to AsiaInfo Holdings, Inc. (non-GAAP) per share measures exclude share-based compensation expenses, amortization of acquired intangible assets, impairment loss on investment, dividend income, gain on discontinued operations and non-recurring merger related expenses. A reconciliation of these non-GAAP measures to the most directly comparable GAAP measures is provided at the end of the press release. ASIAINFO HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (Amounts in thousands of US$, except shares and per share amounts) Three Months Twelve Months Ended December 31, Ended December 31, 2009 2008 2009 2008 Revenues: Software products and solutions $66,675 $45,556 $211,145 $140,187 Service 5,385 5,169 22,163 17,473 Third party hardware 4,202 2,959 16,031 17,883 Total revenues 76,262 53,684 249,339 175,543 Cost of revenues: Software products and solutions 24,586 20,038 89,415 62,744 Service 3,683 2,200 9,741 7,285 Third party hardware 3,999 2,709 15,198 16,701 Total cost of revenues 32,268 24,947 114,354 86,730 Gross profit 43,994 28,737 134,985 88,813 Operating expenses: Sales and marketing 12,480 10,557 44,169 36,220 General and administrative 4,597 3,665 15,588 10,606 Research and development 12,597 6,755 39,446 22,695 Government grant -- -- (1,342) -- Total operating expenses 29,674 20,977 97,861 69,521 Income from operations 14,320 7,760 37,124 19,292 Other income: Interest income 517 1,237 2,215 4,670 Dividend income -- 12 178 545 Gain from sales of short-term investments -- 329 1,210 4,866 Impairment loss on short-term investments -- (4,634) -- (4,684) Impairment loss on long-term investments -- (2,042) -- (2,042) Other income (expenses), net (5) 14 (36) (559) Total other income, net 512 (5,084) 3,567 2,796 Income before provision for income taxes and discontinued operations 14,832 2,676 40,691 22,088 Provision for income taxes 1,468 476 5,261 4,293 Income from continuing operations 13,364 2,200 35,430 17,795 Income from discontinued operations -- -- -- 980 Net income 13,364 2,200 35,430 18,775 Net loss attributable to noncontrolling interest 435 11 429 15 Net income attributable to AsiaInfo Holdings, Inc. $13,799 $2,211 $35,859 $18,790 Earnings Per Share: Net income from continuing operations attributable to AsiaInfo Holdings, Inc. common stockholders: Basic $0.29 $0.05 $0.79 $0.40 Diluted $0.29 $0.05 $0.77 $0.38 Net income from discontinued operations attributable to AsiaInfo Holdings, Inc. common stockholders: Basic -- -- -- $0.02 Diluted -- -- -- $0.02 Net income attributable to AsiaInfo Holdings, Inc. common stockholders Basic $0.29 $0.05 $0.79 $0.42 Diluted $0.29 $0.05 $0.77 $0.40 Weighted average shares used in computation: Basic 46,825,099 43,698,583 45,182,831 44,828,915 Diluted 47,771,540 45,424,511 46,386,278 46,675,694 ASIAINFO HOLDINGS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Amounts in thousands of US$, except share and per share amounts) As of December 31, December 31, 2009 2008(1) ASSETS: Current Assets: Cash and cash equivalents $238,553 $172,119 Restricted cash 5,540 12,510 Short term investments-available for sale securities 27,674 28,633 Short term investments-held to maturity securities 13,716 -- Accounts receivable, net (net of allowances of $2,619 and $2,605 as of December 31, 2009 and December 31, 2008, respectively) 129,646 52,011 Inventories, net 9,535 12,322 Other receivable 2,841 2,813 Deferred income taxes - current 2,968 3,334 Prepaid expenses and other current assets 5,679 5,425 Total current assets $436,152 $289,167 Long term investments 4,696 4,696 Property and equipment, net 2,989 2,887 Other acquired intangible assets, net 3,818 3,008 Deferred income tax assets - non-current 2,161 2,671 Goodwill 22,262 20,725 Prepaid land use right 9,699 -- Total Assets $481,777 $323,154 LIABILITY AND EQUITY Current Liabilities: Accounts payable 76,019 13,835 Accrued expenses 21,793 14,235 Deferred revenue 45,547 44,414 Accrued employee benefits 39,403 27,570 Other payables 6,187 5,288 Income taxes payable 2,862 646 Other taxes payable 7,620 6,311 Deferred income tax liability 1,340 934 Total current liabilities $200,771 $113,233 Unrecognized tax benefits 3,080 1,326 Other long term liabilities 135 135 Total liabilities $203,986 $114,694 Redeemable noncontrolling interest 1,122 -- Equity: Common stock 501 464 Additional paid-in capital 244,838 215,948 Treasury stock, at cost (27,749) (27,749) Accumulated deficit 15,199 (15,566) Statutory reserve 22,306 17,212 Accumulated other comprehensive income 20,212 18,093 Total AsiaInfo Holdings stockholders' equity $275,307 $208,402 Noncontrolling interest(2) 1,362 58 Total equity 276,669 208,460 Total Liabilities and Equity $481,777 $323,154 (1) December 31, 2008 balances were derived from audited financial statements. (2) Amount in relation to noncontrolling interest (formerly minority interest), as of December 31, 2008 is reclassified in accordance with authoritative accounting guidance adopted by the Company on January 1, 2009. ASIAINFO HOLDINGS, INC. CONDENSED INFORMATION FOR OPERATING SEGMENTS (UNAUDITED) (Amounts in thousands of US$) December 31, 2009 AsiaInfo Lenovo Total Technologies -AsiaInfo Revenues: Software products and solutions $52,359 $14,316 $66,675 Service 5,271 114 5,385 Third party hardware 3,719 483 4,202 Total revenues 61,349 14,913 76,262 Cost of revenues: Software products and solutions 20,374 4,212 24,586 Service 3,625 58 3,683 Third party hardware 3,534 465 3,999 Total cost of revenues 27,533 4,735 32,268 Gross profit 33,816 10,178 43,994 Business unit expenses: Sales and marketing 8,352 4,128 12,480 General and administrative 781 (895) (114) Research and development 8,171 4,426 12,597 Government grant -- -- -- Total business unit expenses 17,304 7,659 24,963 Contribution profit $16,512 $2,519 $19,031 Corporate general and administration 4,711 Operating profit $14,320 December 31, 2008 AsiaInfo Lenovo Total Technologies -AsiaInfo Revenues: Software products and solutions $35,634 $9,922 $45,556 Service 4,864 305 5,169 Third party hardware 1,265 1,694 2,959 Total revenues 41,763 11,921 53,684 Cost of revenues: Software products and solutions 16,814 3,224 20,038 Service 2,073 127 2,200 Third party hardware 1,202 1,507 2,709 Total cost of revenues 20,089 4,858 24,947 Gross profit 21,674 7,063 28,737 Business unit expenses: Sales and marketing 6,641 3,916 10,557 General and administrative 684 353 1,037 Research and development 5,948 807 6,755 Government grant -- -- -- Total business unit expenses 13,273 5,076 18,349 Contribution profit $8,401 $1,987 $10,388 Corporate general and administration 2,628 Operating profit $7,760 September 30, 2009 AsiaInfo Lenovo Total Technologies -AsiaInfo Revenues: Software products and solutions $45,660 $9,222 $54,882 Service 5,703 145 5,848 Third party hardware 1,193 1,610 2,803 Total revenues 52,556 10,977 63,533 Cost of revenues: Software products and solutions 21,217 2,789 24,006 Service 2,074 87 2,161 Third party hardware 1,133 1,540 2,673 Total cost of revenues 24,424 4,416 28,840 Gross profit 28,132 6,561 34,693 Business unit expenses: Sales and marketing 8,531 2,692 11,223 General and administrative 614 (143) 471 Research and development 8,162 2,680 10,842 Government grant (1,342) -- (1,342) Total business unit expenses 15,965 5,229 21,194 Contribution profit $12,167 $1,332 $13,499 Corporate general and administration 3,302 Operating profit $10,197
Fourth Quarter and Full-Year 2009 Conference Call Details
AsiaInfo management will hold an earnings conference call at
The dial-in numbers for the conference call are as follows: U.S. Toll Free: +1-877-538-6619 China Local Number: 400-681-6949 Hong Kong and International: +852-3005-2050 The passcode for the call is 408313#.
A replay of the call will be available until
U.S. Toll Free: +1-866-753-0743 China Toll Free: 800-876-8594 Hong Kong and International: +852-3005-2020 The passcode for the replay is 134936#.
Additionally, a live and archived webcast of this call will be available on the Investor Relations section of the AsiaInfo website at http://www.asiainfo.com .
About AsiaInfo Holdings, Inc.
AsiaInfo Holdings, Inc. (Nasdaq: ASIA) is a leading provider of high-quality software and customer solutions to many of China's largest enterprises. In addition to providing software and customer solutions to China's telecom carriers, the Company also offers a wide range of security products and services to small, medium and large sized Chinese enterprises across multiple vertical industries.
Organized as a
For more information about AsiaInfo, please visit http://www.asiainfo.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)
AsiaInfo's net revenue (non-GAAP) represents total revenue net of hardware costs that are passed through to our customers. We believe total revenues net of hardware 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 2009 Q4 AsiaInfo Lenovo Technologies AsiaInfo Total (in thousands of US dollars) Net Revenue (Non-GAAP) 57,815 14,448 72,263 Third Party Hardware Costs 3,534 465 3,999 Total Revenues 61,349 14,913 76,262 2008 Q4 AsiaInfo Lenovo Technologies AsiaInfo Total (in thousands of US dollars) Net Revenue (Non-GAAP) 40,561 10,414 50,975 Third Party Hardware Costs 1,202 1,507 2,709 Total Revenues 41,763 11,921 53,684 2009 Q3 AsiaInfo Lenovo Technologies AsiaInfo Total (in thousands of US dollars) Net Revenue (Non-GAAP) 51,423 9,437 60,860 Third Party Hardware Costs 1,133 1,540 2,673 Total Revenues 52,556 10,977 63,533 2009 2008 AsiaInfo AsiaInfo Techno- Lenovo Techno- Lenovo logies AsiaInfo Total logies AsiaInfo Total (in thousands of US dollars) Net Revenue (Non-GAAP) 201,525 32,616 234,141 133,782 25,060 158,842 Third Party Hardware Costs 12,231 2,967 15,198 13,099 3,602 16,701 Total Revenues 213,756 35,583 249,339 146,881 28,662 175,543 (2) Net income attributable to AsiaInfo Holdings, Inc. (non-GAAP)
Net income attributable to AsiaInfo Holdings, Inc. (non-GAAP) excludes share-based compensation expenses, amortization of acquired intangible assets, impairment loss on investment, dividend income, gain on discontinued operations and non-recurring merger related expenses. 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 attributable to AsiaInfo Holdings, Inc. (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 attributable to AsiaInfo Holdings, Inc. (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 AsiaInfo Holdings, Inc. (non-GAAP) to GAAP net income attributable to AsiaInfo Holdings, Inc. Three Months Ended Twelve Months Ended Dec. 31 Dec. 31 2009 Q3 2009 2008 2009 2008 (in US dollar thousands) GAAP net income 13,799 2,211 35,859 18,790 9,065 Adjustments: - Share based compensation 2,033 919 10,665 3,562 3,593 - Amortization of acquired intangible assets 441 359 1,386 1,589 316 - Impairment loss of investment -- 6,676 -- 6,726 -- - Gain on discontinued operations -- -- -- (980) -- - Gain on settlement of escrow -- -- -- -- -- - Non-recurring merger related expenses 2,100 -- 2,100 -- -- - Dividend income -- (12) (178) (545) (4) Non-GAAP net income 18,373 10,153 49,832 29,142 12,970
(3) Net income attributable to AsiaInfo Holdings, Inc. (non-GAAP) per basic share
Net income attributable to AsiaInfo Holdings, Inc. (non-GAAP) per share is calculated by dividing net income attributable to AsiaInfo Holdings, Inc. (non-GAAP) by the same weighted average shares used in the computation of GAAP net income attributable to AsiaInfo Holdings, Inc. per share. Management believes that net income attributable to AsiaInfo Holdings, Inc. (non-GAAP) per share, when used in conjunction with the Company's GAAP net income attributable to AsiaInfo Holdings, Inc. per share, provides useful information to investors for the same reasons discussed above regarding net income attributable to AsiaInfo Holdings, Inc (non-GAAP). In addition, net income attributable to AsiaInfo Holdings, Inc. (non-GAAP) per 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 attributable to AsiaInfo Holdings, Inc. (non-GAAP) per share to GAAP net income attributable to AsiaInfo Holdings, Inc. per share Three Months Twelve Months Ended Dec. 31 Ended Dec. 31 2009 Q3 2009 2008 2009 2008 (in US dollar thousands) GAAP net income Per Basic Share 0.29 0.05 0.79 0.42 0.20 Adjustments: - Share based compensation 0.04 0.02 0.24 0.08 0.08 - Amortization of acquired intangible assets 0.01 0.01 0.03 0.04 0.01 - Impairment loss of investment -- 0.15 -- 0.15 -- - Gain on discontinued operations -- -- -- (0.02) -- - Gain on settlement of escrow -- -- -- -- -- - Non-recurring merger related expenses 0.04 -- 0.04 -- - Dividend income -- -- -- (0.01) -- Non-GAAP net income Per Basic Share 0.38 0.23 1.10 0.66 0.29
Cautionary Note Regarding Forward-Looking Statements
The information contained in this document is as of
This document contains forward-looking information about AsiaInfo's
operating results and business prospects that involve substantial risks and
uncertainties. You can identify these statements by the fact that they use
words such as "anticipate," "estimate," "expect," "project," "intend," "plan,"
"believe," and other words and terms of similar meaning in connection with any
discussion of future operating or financial performance. Among the factors
that could cause actual results to differ materially are the following:
government telecommunications infrastructure and budgetary policy in China;
our ability to maintain our concentrated customer base; our ability to
consummate a business combination with Linkage and successfully integrate its
business into ours; the long and variable billing cycles for our products and
services that can cause our revenues and operating results to vary
significantly from period to period; our ability to meet our working capital
requirements; our ability to retain our executive officers; our ability to
attract and retain skilled personnel; potential liabilities we are exposed to
because we extend warranties to our customers; risks associated with cost
overruns and delays; our ability to develop or acquire new products or
enhancements to our software products that are marketable on a timely and
cost-effective basis; our ability to adequately protect our proprietary rights;
the competitive nature of the markets we operate in; and political and
economic policies of the Chinese government. A further list and description of
these risks, uncertainties, and other matters can be found in our Annual
Report on Form 10-K for the fiscal year ended
For more information about AsiaInfo, please visit http://www.asiainfo.com .
For investor and media inquiries, please contact:
In China:
Sheryl Zhang
AsiaInfo Holdings, Inc.
Phone: +86-10-8216-6039
Email: ir@asiainfo.com
Justin Knapp
Ogilvy Financial, Beijing
Phone: +86-10-8520-6556
Email: asia@ogilvy.com
In the United States:
Ms. Jessica Barist Cohen
Ogilvy Financial, New York
Phone: +1-646-460-9989
Email: asia@ogilvy.com
SOURCE AsiaInfo Holdings, Inc.