YUCHENG TECHNOLOGIES LIMITED 
By BEIJING, Aug. 15, 2012 /PRNewswire-Asia/ -- Yucheng Technologies Limited (Nasdaq: YTEC) ("Yucheng," the "Company," "we," "us" and "our"), a leading provider of IT Solutions to the financial services industry in China, today announced unaudited financial results for the second quarter ended June 30, 2012.
-- Second quarter software & solutions revenues of US$20.4 million, an
increase of 48.7% year over year;
-- Second quarter total revenues of US$21.5 million, an increase of 35.7%
year over year, and second quarter net revenues (Non-GAAP)(6)(1) were
the same as total revenues;
-- Second quarter operating income of US$2.5 million, an increase of 25.5%
year over year, and second quarter operating income (Non-GAAP)(4)( )of
US$3.1 million, an increase of 40.0% year over year;
-- Second quarter operating margin of revenue of 11.5%, as compared to
12.4% in the prior year period, and second quarter operating margin of
net revenue (Non-GAAP)(5) of 14.5%, as compared to 14.1% in the prior
year period;
-- Second quarter net income of US$1.2 million, or US$0.06 per share, as
compared to net income of US$1.6 million, or US$0.08 per share in the
prior year period, and second quarter net income (Non-GAAP)(6) of US$1.9
million, or US$0.10 per share, as compared to US$1.9 million, or US$0.10
per share in the prior year period;
"We continued the strong revenue growth in software & solutions revenues while seeing continued declining revenues in platform & maintenance services businesses. On the other hand, the trend of rising wages continues to increase although the consumer price index (CPI) has dropped to a much more reasonable level, reflecting the intense competition for talent in our industry, which caused further declining gross margin compared with last year. We do not expect the trend of wage inflation to reverse before the end of the year," said Mr. Weidong Hong, CEO of Yucheng Technologies. "All though we are in a difficult period with increasing competition and rising costs, we are still optimistic about the longer term potential of the company with our leading position in the industry as evidenced by No. 1 ranking by the latest IDC industry research report."
Second Quarter 2012 Financial Results
Total revenues for the second quarter of 2012 were US$21.5 million, an increase of 35.7% year over year and a increase of 29.8% sequentially. Net revenues (non-GAAP) for the second quarter of 2012 were the same as total revenues, an increase of 35.7% year over year and an increase of 29.8% sequentially. The year over year increase in revenues was primarily due to the strong demand from our customers for our software solutions.
Gross margin for the second quarter of 2012 was 42.1%, compared to 49.1% in the prior year period and 43.8% in the previous quarter. Gross margin of net revenues (non-GAAP)(2) for the second quarter of 2012 was 42.1%, compared to 49.1% in the prior year period and 43.8% in the previous quarter. The decrease in gross margin year over year was due mainly to the increase in labor costs, the decrease of resale services and increased subcontracting to our strategic partner where our margin is significantly lower.
Software & solutions revenues for the second quarter of 2012 were US$20.4 million, an increase of 48.7% year over year and an increase of 36.1% sequentially. Gross margin of the software & solutions business for the second quarter of 2012 was 42.1%, compared to 46.1% in the prior year period and 43.0% in the previous quarter. The decrease in the gross margin was primarily due to the increase in labor costs and increased subcontracting to our strategic partner where our margin is significantly lower.
Platform & maintenance services revenues for the second quarter of 2012 were US$1.0 million, compared to US$2.1 million in the prior year period and US$1.5 million in the previous quarter. Net revenues of platform & maintenance services (non-GAAP) for the second quarter of 2012 were US$1.0 million, compared to US$2.1 million in the prior year period and US$1.5 million in the previous quarter, the decrease in platform & maintenance services (non-GAAP) was due mainly to the decrease of resale services.
Gross margin of platform & maintenance services business for the second quarter of 2012 was 43.0%, compared to 69.1% in the prior year period and 51.2% in the previous quarter. Gross margin of net revenues (non-GAAP) for platform maintenance services in second quarter of 2012 was 43.0%, compared to 69.1% in the prior year period and 51.2% in the previous quarter. The decrease in gross margin (non-GAAP) was due mainly to the decrease of resale services.
Total operating expenses for the second quarter of 2012 increased 13.2% year over year and decreased 6.5% sequentially to US$6.6 million. Total operating expenses (non-GAAP)(3) for the second quarter of 2012 increased 6.8% year over year and decreased 7.3% sequentially to US$5.9 million. The year-over-year increase was attributable mainly to the increase of sales bonus.
Income from continuing operations for the second quarter of 2012 was US$2.5 million, compared to US$2.0 million in the prior year period and US$0.2 million in the previous quarter. Income from continuing operations (non-GAAP) for the second quarter of 2012 was US$3.1 million, compared to US$2.2 million in the prior year period and US$0.9 million in the previous quarter.
Operating margin of total revenue was 11.5% for the second quarter of 2012, compared to 12.4% in the prior year period and 1.2% in the previous quarter. Operating margin of net revenues (non-GAAP) was 14.5% for the second quarter of 2012, compared to 14.1% in the prior year period and 5.2% in the previous quarter.
In the second quarter of 2012, the company recorded net income of US$1.2 million, or US$0.06 per diluted share, compared to US$1.6 million, or US$0.08 per diluted share in the prior year period and net loss of US$0.5 million, or loss of US$0.03 per diluted share in the previous quarter.
Net income (non-GAAP) was US$1.9 million in the second quarter of 2012 or US$0.10 per diluted share. Net income (non-GAAP) in the prior year period was US$1.9 million or US$0.10 per diluted share. Net income (non-GAAP) in the previous quarter was US$0.1 million or US$0.01 per diluted share.
As of June 30, 2012, Yucheng had cash and cash equivalents and restricted cash totaling US$14.7 million, compared to US$14.1 million as of March 31, 2012 and US$20.0 million as of June 30, 2011.Operating cash flow in the second quarter of 2012 was a net inflow of US$0.3 million.
Business Outlook
For the quarter ending September 30, 2012, Yucheng expects net revenue (non-GAAP) to be approximately US$22.0 million and net income (non-GAAP) per share of US$0.12.
YUCHENG TECHNOLOGIES LIMITED AND SUBSIDIARIES
Consolidated Balance Sheets(Unaudited)
June 30, 2012 and March 31, 2012
2012.06.30 2012.03.31
USD USD
Assets
Current assets:
Cash and cash equivalents 14,724,433 14,075,661
Trade accounts receivable, net 39,576,115 43,083,117
Costs and estimated earnings in excess of billings on 35,691,303 29,002,458
uncompleted contracts
Due from related parties 4,330,682 2,390,622
Inventories 2,310,246 3,389,124
Pre-contract costs 5,676,677 6,421,658
Other current assets 10,174,288 8,299,062
Deferred tax assets 210,113 211,134
Total current assets 112,693,857 106,872,836
Investments under equity method 4,346,771 4,972,177
Properties and equipment 9,182,214 8,825,907
Less: Accumulated depreciation (4,589,378) (4,456,969)
---------- ----------
Properties and equipment, net 4,592,836 4,368,938
Intangible assets, net 6,209,542 6,279,899
Goodwill 29,883,413 30,028,693
Deferred tax assets 96,740 94,231
------ ------
Total assets 157,823,159 152,616,774
=========== ===========
YUCHENG TECHNOLOGIES LIMITED AND SUBSIDIARIES
Consolidated Balance Sheets (unaudited continued)
June 30, 2012 and March 31, 2012
2012.06.30 2012.03.31
USD USD
Liabilities and stockholders' equity
Current liabilities:
Short term borrowings 15,810,527 12,709,912
Trade accounts payables 13,468,206 5,663,655
Billings in excess of costs and estimated earnings on 6,534,244 5,919,646
uncompleted contracts
Employee and payroll accruals 5,389,778 6,238,997
Dividends payable to ex-owners 12,172 12,231
Due to related parties 447,247 1,414,756
Income taxes payable 797,679 429,090
Other current liabilities 8,858,551 14,742,859
Deferred tax liabilities 342,710 361,587
------- -------
Total current liabilities 51,661,114 47,492,733
Deferred tax liabilities 273,258 235,303
------- -------
Total liabilities 51,934,372 47,728,036
Stockholders' equity
Preferred stock, no par value, authorized 3,163,410 3,178,789
2,000,000 shares and none issued;
Common stock, no par value, authorized
60,000,000 shares; 18,941,417 shares and
18,941,417 shares issued and outstanding as of March 31,
2012 and June 30, 2012
Additional paid-in capital 65,905,731 65,765,719
Reserves 9,068,721 9,109,916
Retained earnings 28,532,433 27,426,206
Accumulated other comprehensive loss (601,461) (574,552)
Total YTEC stockholders' equity 106,068,834 104,906,078
----------- -----------
Non-controlling interests (180,047) (17,340)
-------- -------
Total stockholders' equity 105,888,787 104,888,738
Liabilities and stockholders' equity 157,823,159 152,616,774
=========== ===========
YUCHENG TECHNOLOGIES LIMITED AND SUBSIDIARIES
Consolidated Statements of Income(Unaudited)
Three Months Ended June 30 2012 and 2011
2012 Q2 2011 Q2
USD USD
Revenues:
Software & solutions 20,442,216 13,749,357
Platform services 0 0
Maintenance services 1,011,513 2,064,656
Total revenues 21,453,729 15,814,013
Cost of revenues:
Software & solutions (11,846,058) (7,413,344)
Platform services 0 0
Maintenance services (576,706) (637,064)
Total cost of revenues (12,422,764) (8,050,408)
Gross profit 9,030,965 7,763,605
Operating expenses:
Research and development (301,739) (703,598)
Selling and marketing (1,756,247) (910,915)
General and administrative (4,515,304) (4,191,142)
Total operating expenses (6,573,290) (5,805,655)
---------- ----------
Income from continuing operations 2,457,675 1,957,950
YUCHENG TECHNOLOGIES LIMITED AND SUBSIDIARIES
Consolidated Statements of Income (unaudited continued)
Three Months Ended June 30 2012 and 2011
2012 Q2 2011 Q2
USD USD
Other income (expenses):
Interest income 9,079 12,858
Interest expense (241,799) (180,894)
Loss from equity method investees (601,351) (280,763)
Loss on disposal of intangible assets and fixed assets 8,190 2,047
Other income, net (48,012) (578)
-------- -----
Income (loss) before income tax and minority interests 1,583,782 1,510,620
Income tax expense (504,777) (152,472)
Net loss attributable to non-controlling interests 162,790 226,333
------- -------
Net(loss) income 1,241,795 1,584,481
========= =========
Weighted average common shares outstanding
Basic 19,898,358 18,943,217
Diluted 19,915,450 19,507,896
Earnings per share
Basic 0.06 0.08
Diluted 0.06 0.08
YUCHENG TECHNOLOGIES LIMITED AND SUBSIDIARIES
Consolidated Statements of Cash Flows(Unaudited)
Three Months Ended June 30 2012 and 2011
2012 Q2 2011 Q2
USD USD
Cash flows from operating activities:
Net income (loss) 1,241,795 1,584,481
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation 265,665 277,802
Amortization 558,397 391,690
Loss on disposal intangible assets and fixed assets (8,190) 1,327
Non-controlling interests (162,790) (226,333)
Loss from equity method investees 601,351 280,763
Increase in trade accounts receivable, net 3,297,063 1,946,515
(Increase) Decrease in costs and estimated earnings in excess of billing on uncompleted contracts (6,829,159) (5,004,891)
(Increase) Decrease in due from related parties (405,474) 23,491
Increase in inventories 1,062,481 148,552
Increase in pre-contract costs 713,913 (464,687)
Increase in other current assets (935,761) 5,545,435
Increase in deferred tax assets - Non-current (2,964) 132,968
Decrease in trade accounts payable 7,833,737 (204,459)
Decrease in billings in excess of costs and estimated earnings on uncompleted contracts 643,237 (105,259)
Increase in employee and payroll accruals (819,034) (1,298,548)
Increase in income taxes payable 370,664 (325,497)
Increase in due to related parties (943,005) 1,154,704
Increase in other current liabilities (6,602,084) (3,922,328)
Increase (Decrease) in deferred tax liabilities 21,966 (62,663)
Stock based compensation to employees 443,818 225,001
------- -------
Net cash provided by operating activities 345,626 98,064
------- ------
YUCHENG TECHNOLOGIES LIMITED AND SUBSIDIARIES
Consolidated Statements of Cash Flows (unaudited continued)
Three Months Ended June 30 2012 and 2011
2012 Q2 2011 Q2
USD USD
Cash flows from investing activities:
Capital expenditures (99,075) (182,025)
Advances to investments under equity method (2,758,191) 83,505
Proceeds from disposal of fixed assets 15,358 23,941
Proceeds from disposal of investments under equity method 0 (154,521)
Net cash used in investing activities (2,841,908) (229,100)
Cash flows from financing activities:
Repayment of capital leases 0 (18,527)
Proceeds from bank borrowings 3,162,105 7,394,422
Repayments of bank borrowings 0 (3,244,947)
--- ----------
Net cash provided by financing activities 3,162,105 4,130,948
Effect of exchange rate changes on cash and cash equivalent (17,051) 0
Net increase in cash and cash equivalents 648,772 3,999,912
Cash and cash equivalents at beginning of period 14,075,661 16,019,385
---------- ----------
Cash and cash equivalents at the end of period 14,724,433 20,019,297
========== ==========
Second quarter 2012 Conference Call Details
Yucheng Management will conduct a conference call to discuss the financial results of the three-month period ended June 30, 2012 on August 15, 2012 at 8:00AM EDT/ 8:00PM BJT.
To participate, please dial one of the local access numbers, listed below, ten minutes prior to the scheduled start of the call. The conference call identification number is 8800.
US +1 866 636 3243
China Toll Free Number: 800 888 0221
China Toll Number: 400 678 3355
Hong Kong Toll Number: +852 3005 1380
All Other Participants: +86 10 5851 2626
A recording of the call will be accessible within 48 hours on the Investor Relations section of Yucheng's website at http://www.yuchengtech.com/english/success.php?classid=41.
About Yucheng Technologies Limited
Yucheng Technologies Limited (NASDAQ: YTEC) is a leading IT service provider to the Chinese financial service providers. Headquartered in Beijing, China, Yucheng services clients from its nationwide network with approximately 2,800 employees. Yucheng provides a comprehensive suite of IT solutions to Chinese Banks including: (i) Channel Solutions, such as e-banking and call centers; (ii) Business Solutions, such as core banking systems and loan management; and (iii) Management Solutions, such as risk analytics and business intelligence. The independent research firm IDC named Yucheng the No. 1 market share leader in China's Banking IT solution market in 2010 and 2011. For more information about Yucheng Technologies Limited, please visit www.yuchengtech.com.
Reconciliation of non-GAAP Measures
This earnings release presents the following "non-GAAP financial measures" as defined by applicable U.S. securities regulations. The presentation of these non-GAAP financial measures is not meant to be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP. The non-GAAP financial measures are provided as additional information to help both management and investors compare business trends among different reporting periods on a consistent and more meaningful basis and enhance investors' overall understanding of the Company's current financial performance and prospects for the future. These non-GAAP measures have limitations, however, because they do not include all items of income and expenses that impact the Company's operations. Management compensates for these limitations by also considering the Company's GAAP results. The non-GAAP financial measures the Company uses are not prepared in accordance with, and should not be considered an alternative to measurements required by GAAP and should not be considered measures of the Company's liquidity. Pursuant to relevant regulatory requirements, we are providing the following reconciliations of the non-GAAP financial measures to the most directly comparable GAAP measures.
(1) Net revenue (non-GAAP)
Yucheng's net revenue (non-GAAP) represents total revenue net of third party hardware and software costs that are passed through to our customers. We believe total revenues net of third party hardware and software costs more accurately reflects our core business, which is the provision of software solutions and services, and provides transparency to our investors. It is also the same measure used by our management to evaluate the competitiveness and development of our business.
Reconciliation of net revenues (non-GAAP) to GAAP total revenues
----------------------------------------------------------------
2012 Q2 2011 Q2 2012 Q1
------- ------- -------
(in US dollar thousands)
------------------------
Total Revenues (GAAP) 21,454 15,814 16,531
-------------------- ------ ------ ------
Third Party Hardware
Costs 0 0 2
-------------------- --- --- ---
Net Revenue (non-
GAAP) 21,454 15,814 16,529
----------------- ------ ------ ------
Reconciliation of net revenues of platform & maintenance services (non-GAAP) to
GAAP total revenues of platform & maintenance services
-------------------------------------------------------------------------------
2012 Q2 2011 Q2 2012 Q1
------- ------- -------
(in US dollar thousands)
------------------------
Total Revenues of
platform &
maintenance
services(GAAP) 1,012 2,065 1,514
----------------- ----- ----- -----
Third Party Hardware
Costs 0 0 2
-------------------- --- --- ---
Net Revenue of
platform &
maintenance
services(non-GAAP) 1,012 2,065 1,512
------------------- ----- ----- -----
(2) Gross margin of net revenue (non-GAAP)
Gross margin of net revenues (non-GAAP) is calculated by dividing gross profit by net revenue (non-GAAP). We believe that this non-GAAP financial measure provides meaningful supplemental information regarding our performance. Management uses the gross margin of net revenue (non-GAAP) measure to gain a better understanding of the Company's comparative operating performance from period-to-period and as a basis of planning and forecasting future periods. Management believes this non-GAAP measure, when read in conjunction with the Company's GAAP gross margin and other GAAP financial metrics, provides useful information to investors by offering: a) the ability to make more meaningful period-to-period comparisons of the Company's on-going operating results; b) the ability to better identify trends in the Company's underlying business and perform related trend analysis; c) a better understanding of how management plans and measures the Company's underlying business; and d) an easier way to compare the Company's most recent results of operations against investor and analyst financial models.
Reconciliation of Gross margin (non-GAAP) to GAAP Gross margin
--------------------------------------------------------------
2012 Q2 2011 Q2 2012 Q1
------- ------- -------
Gross
margin
(GAAP) 42.1% 49.1% 43.8%
------- ---- ---- ----
Third
Party
Hardware
Costs 0.0% 0.0% 0.0%
--------- --- --- ---
Gross
margin
(non-
GAAP) 42.1% 49.1% 43.8%
------- ---- ---- ----
Reconciliation of Gross margin (non-GAAP) for platform &
maintenance services to GAAP Gross margin for platform &
maintenance services
---------------------------------------------------------
2012 Q2 2011 Q2 2012 Q1
------- ------- -------
Gross
margin
(GAAP) 43.0% 69.1% 51.2%
------- ---- ---- ----
Third
Party
Hardware
Costs 0.0% 0.0% 0.1%
--------- --- --- ---
Gross
margin
(non-
GAAP) 43.0% 69.1% 51.2%
------- ---- ---- ----
(3) Operating expenses (non-GAAP)
Operating expenses (non-GAAP) excludes stock-based compensation and amortization of acquired intangible assets related to previous acquisitions. We believe that this non-GAAP financial measure provides meaningful supplemental information regarding our performance by excluding certain expenses and income that may not be indicative of our operating performance. Management uses the operating expenses (non-GAAP) measure to gain a better understanding of the Company's comparative operating performance from period-to-period and as a basis of planning and forecasting future periods. Management believes this non-GAAP measure, when read in conjunction with the Company's GAAP operating expenses and other GAAP financial metrics, provides useful information to investors by offering: a) the ability to make more meaningful period-to-period comparisons of the Company's on-going operating results; b) the ability to better identify trends in the Company's underlying business and perform related trend analysis; c) a better understanding of how management plans and measures the Company's underlying business; and d) an easier way to compare the Company's most recent results of operations against investor and analyst financial models.
Reconciliation of Operating expenses (non-GAAP) to GAAP
Operating expenses
-------------------------------------------------------
2012 Q2 2011 Q2 2012 Q1
------- ------- -------
(in US dollar
thousands)
-------------
Operating
expenses
(GAAP) 6,573 5,806 7,031
--------- ----- ----- -----
Stock based
compensation 444 225 433
------------- --- --- ---
Amortization
of acquired
intangible
assets 216 45 218
------------ --- --- ---
Operating
expenses
(non-GAAP) 5,913 5,536 6,381
----------- ----- ----- -----
(4) Operating income (non-GAAP)
Operating income (non-GAAP) excludes stock-based compensation and amortization of acquired intangible assets related to previous acquisitions. We believe that this non-GAAP financial measure provides meaningful supplemental information regarding our performance by excluding certain expenses and income that may not be indicative of our operating performance. Management uses the operating income (non-GAAP) measure to gain a better understanding of the Company's comparative operating performance from period-to-period and as a basis of planning and forecasting future periods. Management believes this non-GAAP measure, when read in conjunction with the Company's GAAP operating income and other GAAP financial metrics, provides useful information to investors by offering: a) the ability to make more meaningful period-to-period comparisons of the Company's on-going operating results; b) the ability to better identify trends in the Company's underlying business and perform related trend analysis; c) a better understanding of how management plans and measures the Company's underlying business; and d) an easier way to compare the Company's most recent results of operations against investor and analyst financial models.
Reconciliation of Operating income (non-GAAP) to GAAP Operating
income
---------------------------------------------------------------
2012 Q2 2011 Q2 2012 Q1
------- ------- -------
(in US dollar
thousands)
-------------
Operating
income
(GAAP) 2,458 1,958 205
--------- ----- ----- ---
Stock based
compensation 444 225 433
------------- --- --- ---
Amortization
of acquired
intangible
assets 216 45 218
------------ --- --- ---
Operating
income (non-
GAAP) 3,118 2,228 856
------------- ----- ----- ---
(5) Operating margin of net revenue (non-GAAP)
Operating margin of net revenue (non-GAAP) is calculated by dividing operating income, excluding amortization of acquired intangible assets and stock-based compensation expenses, divided by net revenue (non-GAAP). We believe that this non-GAAP financial measure provides meaningful supplemental information regarding our performance by excluding certain expenses and income that may not be indicative of our operating performance. Management uses the operating margin of net revenue (non-GAAP) measure to gain a better understanding of the Company's comparative operating performance from period-to-period and as a basis of planning and forecasting future periods. Management believes this non-GAAP measure, when read in conjunction with the Company's GAAP operating margin and other GAAP financial metrics, provides useful information to investors by offering: a) the ability to make more meaningful period-to-period comparisons of the Company's on-going operating results; b) the ability to better identify trends in the Company's underlying business and perform related trend analysis; c) a better understanding of how management plans and measures the Company's underlying business; and d) an easier way to compare the Company's most recent results of operations against investor and analyst financial models.
Reconciliation of Operating margin (non-GAAP) to GAAP Operating
margin
---------------------------------------------------------------
2012 Q2 2011 Q2 2012 Q1
------- ------- -------
Operating
margin
(GAAP) 11.5% 12.4% 1.2%
--------- ---- ---- ---
Stock
based
compensation 2.1% 1.4% 2.6%
------------- --- --- ---
Amortization
of
acquired
intangible
assets 1.0% 0.3% 1.3%
------------ --- --- ---
Third
Party
Hardware
Costs 0.0% 0.0% 0.0%
--------- --- --- ---
Operating
margin
(non-
GAAP) 14.5% 14.1% 5.2%
--------- ---- ---- ---
(6) Net income (non-GAAP)
Net income(non-GAAP) excludes stock-based compensation and amortization of acquired intangible assets related to the previous acquisitions. We believe that this non-GAAP financial measure provides meaningful supplemental information regarding our performance by excluding certain expenses and income that may not be indicative of our operating performance. Management uses the net income (non-GAAP) measure to gain a better understanding of the Company's comparative operating performance from period-to-period and as a basis of planning and forecasting future periods. Management believes the Company's net income (non-GAAP) measure, when read in conjunction with the Company's GAAP net income measure and other GAAP financial metrics, provides useful information to investors by offering: a) the ability to make more meaningful period-to-period comparisons of the Company's on-going operating results; b) the ability to better identify trends in the Company's underlying business and perform related trend analysis; c) a better understanding of how management plans and measures the Company's underlying business; and d) an easier way to compare the Company's most recent results of operations against investor and analyst financial models.
Reconciliation of net income attributable to Yucheng (non-GAAP)
to GAAP net income
---------------------------------------------------------------
2012 Q2 2011 Q2 2012 Q1
------- ------- -------
(in US dollar
thousands)
-------------
Net Income
(GAAP) 1,242 1,584 -548
---------- ----- ----- ----
-Stock based
compensation 444 225 433
------------- --- --- ---
-
Amortization
of acquired
intangible
assets 216 45 218
------------- --- --- ---
Net Income
(non-GAAP) 1,902 1,854 102
----------- ----- ----- ---
(7) Net income (non-GAAP)per diluted share
Net income (non-GAAP) per diluted share is calculated by dividing net income (non-GAAP) (which as discussed above excludes stock-based compensation expenses and amortization of acquired intangible assets) by the same number of weighted average shares outstanding used in the computation of net income per diluted share. Management believes that net income (non-GAAP) per diluted share, when used in conjunction with the Company's GAAP net income per diluted share, provides useful information to investors for the same reasons discussed above regarding net income (non-GAAP). In addition, net income (non-GAAP) per diluted share allows investors to evaluate the Company's operating performance from period to period on a per share basis, thus providing a useful basis for assessing the Company's value on a per share basis.
Reconciliation of net income (non-GAAP) per diluted share to
GAAP net income per diluted share
------------------------------------------------------------
2012 Q2 2011 Q2 2012 Q1
------- ------- -------
(in US dollar)
-------------
GAAP net income
Per diluted
Share 0.06 0.08 -0.03
--------------- ---- ---- -----
-Stock based
compensation 0.02 0.01 0.02
------------- ---- ---- ----
-Amortization
of acquired
intangible
assets 0.01 0.00 0.01
------------- ---- ---- ----
Non-GAAP net
income Per
diluted Share 0.10 0.10 0.01
-------------- ---- ---- ----
Cautionary Note Regarding Forward-Looking Statements
The information contained in this document is as of August 15, 2012.Yucheng assumes no obligation to update any forward-looking statements contained in this document as a result of new information or future events or developments.
This press release includes forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties. Forward looking statements are statements that are not historical facts. Forward-looking statements generally can be identified by the use of forward looking terminology, such as ''may,'' ''will,'' ''expect,'' ''intend,'' ''estimate,'' ''anticipate,'' ''believe,'' ''project'' or ''continue'' or the negative thereof or other similar words. Such forward-looking statements, based upon the current beliefs and expectations of Yucheng's management, are subject to risks and uncertainties, which could cause actual results to differ from the forward looking statements. The following factors, among others, could cause actual results to differ from those set forth in the forward-looking statements: current dependence on the PRC banking industry demand for the products and services of Yucheng; competition from other service providers in the PRC and international consulting firms; the ability to update and expand product and service offerings; retention and hiring of qualified employees; protection of intellectual property; creating and maintaining quality product offerings; and operating a business in the PRC with its changing economic and regulatory environment. A further list and description of these risks, uncertainties, and other matters can be found in our Annual Report on Form 20-F for the fiscal year ended December 31, 2011, and in our interim current reports on Form 6-K filed with the United States Securities and Exchange Commission and available at www.sec.gov.
For more information about Yucheng, please visit www.yuchengtech.com.
For investor and media inquiries, please contact:
In China:
Mr. Steve Dai
Yucheng Technologies Limited
Tel: +86-10-5913-7889
Email: investors@yuchengtech.com
--------------------------------
(1) Net revenue (non-GAAP) measures used in this press release
represents total revenue net of third-party hardware and
software costs.
(2) Gross margin of net revenue (non-GAAP) is calculated by
dividing gross profit by net revenue (non-GAAP).
(3) Operating expenses (non-GAAP) is calculated by excluding
stock-based compensation expenses and amortization of acquired
intangible assets.
(4) Income from operations (non-GAAP) is calculated by subtract
operating expenses (non-GAAP) from gross profits.
(5) Operating margin of net revenue (non-GAAP) is calculated by
dividing operating income, excluding amortization of acquired
intangibles and stock-based compensation expenses, divided by
net revenue (non-GAAP)
(6) Net income (non-GAAP) measures exclude stock-based
compensation expenses, amortization of acquired intangible
assets, impairment loss on investment, after-tax dividend
income and non-recurring merger related expenses
SOURCE Yucheng Technologies Limited
