Camelot Information Systems Inc. Announces Fourth Quarter and Full Year 2010 Unaudited Financial Results

Net revenues and adjusted net income attributable to Camelot exceeded guidance

Net revenues increased 49% YoY in fourth quarter 2010 and 63% YoY in full year 2010

Adjusted net income attributable to Camelot increased 66% YoY in fourth quarter 2010 and 71% YoY in full year 2010

Mar 04, 2011, 05:12 ET from Camelot Information Systems Inc.

BEIJING, March 4, 2011 /PRNewswire-Asia-FirstCall/ -- Camelot Information Systems Inc. (NYSE: CIS, the "Company" or "Camelot"), a leading domestic provider of enterprise application services and financial industry information technology services in China, today announced its unaudited financial results for the fourth quarter and full year ended December 31, 2010.  

FOURTH QUARTER 2010 FINANCIAL AND OPERATING HIGHLIGHTS

  • Net revenues increased 49.3% year-over-year to US$60.0 million, compared to US$40.2 million in the fourth quarter 2009.
  • Adjusted operating income(1) increased 70.3% year-over-year to US$12.8 million from US$7.5 million in the fourth quarter 2009. U.S. GAAP operating income increased 67.0% year-over-year to US$8.9 million from US$5.3 million in the fourth quarter 2009.
  • Adjusted net income(1) attributable to Camelot increased 66.0% year-over-year to US$11.2 million from US$6.7 million in the fourth quarter 2009. U.S. GAAP net income attributable to Camelot increased 60.0% year-over-year to US$7.3 million from US$4.6 million in the fourth quarter 2009.
  • Adjusted diluted earnings per share(1) was US$0.06, as compared to diluted earnings per share of US$0.05 in the fourth quarter 2009. U.S. GAAP diluted earnings per share was US$0.04 in the fourth quarter 2010, compared to US$0.03 in the fourth quarter 2009. Adjusted diluted earnings per American Depositary Share ("ADS")(2) was US$0.24, as compared to diluted earnings per ADS(2) of US$0.20 in the fourth quarter 2009. U.S. GAAP diluted earnings per ADS(2) was US$0.15 in the fourth quarter 2010, as compared to US$0.13 in the fourth quarter 2009.
  • Employees totalled 3,718, including 3,162 information technology (IT) professionals, as of December 31, 2010, representing a 29.9% increase in total employees and a 28.9% increase in IT professionals compared to December 31, 2009.

FULL YEAR 2010 FINANCIAL HIGHLIGHTS

  • Net revenues increased 63.4% year-over-year to US$192.9 million, compared to US$118.0 million in 2009.
  • Adjusted operating income(1) increased 72.6% year-over-year to US$ 35.7 million from US$20.7 million in 2009. U.S. GAAP operating income increased 49.6% year-over-year to US$22.8 million from US$15.2 million in 2009.
  • Adjusted net income(1) attributable to Camelot increased 71.0% year-over-year to US$31.5 million from US$18.4 million in 2009. U.S. GAAP net income attributable to Camelot increased 43.4% year-over-year to US$18.6 million from US$13.0 million in 2009.
  • Adjusted diluted earnings per share(1) was US$0.19, as compared to adjusted diluted earnings per share of US$0.14 in 2009. U.S. GAAP diluted earnings per share was US$0.11 in 2010 compared to US$0.10 in 2009. Adjusted diluted earnings per ADS(2) was US$0.76, as compared to diluted earnings per ADS of US$0.55 in 2009. U.S. GAAP diluted earnings per ADS(2) was US$0.45 in 2010, as compared to US$0.39 in 2009.

Mr. Simon Ma, Camelot's Chairman and Chief Executive Officer ("CEO"), said, "We are pleased to report strong results exceeding our guidance across the board.  Our robust fourth quarter performance reflects the normal seasonal trend in our sector whereby the second half is typically stronger than the first half as the pace of project delivery tends to intensify in the latter part of the year.  2010 has been a transformative year for Camelot, driven by increasing domestic demand for IT services and our ability to leverage our leading position and publicly listed status in a fragmented market.  Looking ahead, we believe the demand for IT services in China will remain strong and we expect to continue gaining market share in each of our segments as we deepen our customer relationships and drive further organic growth."  

Mr. Gordon Lau, Chief Financial Officer, concluded, "The continued growth of our business and focus on higher value-added solutions and services allowed us to deliver healthy margin expansion in the fourth quarter and full year. Furthermore, we believe additional margin enhancement is attainable given the growing scalability of our business and increasing operational leverage. In light of our strong performance and the continuing demand for our IT services in China, we expect to achieve 2011 full-year net revenue of approximately US$250 million and adjusted net income attributable to Camelot of approximately US$42 million."        

FOURTH QUARTER FINANCIAL RESULTS

Net Revenues  

Net revenues for the fourth quarter 2010 increased 49.3% to US$60.0 million from US$40.2 million in the fourth quarter 2009.

Net Revenues by Service Line

Three Months Ended December 31, 2010

Three Months Ended December 31, 2009

(in thousands, except percentage)

Enterprise application services

37,756

62.9%

26,203

65.2%

Financial industry IT services

22,255

37.1%

13,987

34.8%

Total net revenue

60,011

100.0%

40,190

100.0%

Enterprise Application Services (EAS) revenues increased 44.1% year-over-year to US$37.8 million in the fourth quarter 2010, as Camelot extended its leadership within mainland China's rapidly growing EAS market. Within the Financial Industry IT Services (FIS) segment, demand for customized solutions and services resulted in revenue of US$22.3 million in the fourth quarter, equating to year-over-year revenue growth of 59.1%, due to organic growth combined with the contribution from Tansun, a customized solutions provider acquired during the fourth quarter 2009.. EAS and FIS accounted for 62.9% and 37.1% of total net revenues, respectively, in the fourth quarter 2010, as compared to 65.2% and 34.8%, respectively, in the same period of the previous year, in a continuation of the trend towards a more balanced contribution from the two service lines.

Gross Profit and Gross Margin

Adjusted gross profit(1) increased 76.0% to US$20.7 million, from US$11.8 million in the fourth quarter 2009, as revenue from both the EAS and FIS business lines rose during the quarter. U.S. GAAP gross profit was US$20.3 million, compared to US$11.5 million for same period in the previous year. The difference between adjusted and GAAP gross profit represents US$0.4 million in share-based compensation and the amortization of intangible assets relating to the customized solutions acquisitions of Agree and Tansun. Adjusted gross margin(1) in the fourth quarter 2010 improved to 34.5%, as compared to 29.3% in the fourth quarter 2009, reflecting the Company's increased focus on higher-margin products and services. U.S. GAAP gross margin for the fourth quarter 2010 was 33.9%, compared to 28.7% in the fourth quarter 2009.

Operating Expenses

Adjusted operating expenses(1) were US$8.1 million in the fourth quarter 2010, an 88.5% year-over-year increase compared to the same period of 2009. U.S. GAAP operating expenses increased 85.9% to US$11.6 million from US$6.2 million in the fourth quarter 2009. The increase was primarily attributable to the Company's continuing business expansion, greater investment in sales and marketing activities, consolidation of Tansun, the customized solutions acquisition, and expansion of its operational infrastructure to support its publicly listed status. The difference between adjusted and GAAP operating expenses reflected US$0.7 million in share based compensation, US$1.0 million in amortization expenses, and US$1.8 million changes in fair value of contingent consideration incurred from the customized solutions acquisitions in 2009.

Operating Income and Operating Margin

Adjusted operating income(1) in the fourth quarter 2010 increased 70.3% to US$12.8 million, from US$7.5 million in the fourth quarter 2009. U.S. GAAP operating income in the fourth quarter 2010 increased 67.0% to US$8.9 million as compared to US$5.3 million in the same period of the previous year. Adjusted operating margin(1) was 21.3%, compared to 18.6% in the fourth quarter 2009. U.S. GAAP operating margin for the fourth quarter 2010 was 14.8%, compared to 13.2% in the year-earlier period.  

Net Income Attributable to Camelot and Earnings Per Share

As a result of the foregoing, adjusted net income(1) attributable to Camelot for the fourth quarter increased 66.0% to US$11.2 million from US$6.7 million in the fourth quarter 2009. U.S. GAAP net income attributable to Camelot for the quarter increased 60.0% to US$7.3 million from US$4.6 million in the fourth quarter 2009. Adjusted net margin(1) was 18.6% in the fourth quarter 2010, compared to 16.7% in the same period of the previous year. U.S. GAAP net margin was 12.1% in the fourth quarter 2010, compared to 11.3% in the year-earlier period.

Fourth quarter 2010 adjusted diluted earnings per share(1) was US$0.06, compared to adjusted diluted earnings per share of US$0.05 in the fourth quarter 2009. U.S. GAAP diluted earnings per share in the fourth quarter 2010 was US$0.04, compared to diluted earnings per share of US$0.03 in the year-earlier period. Fourth quarter 2010 adjusted diluted earnings per ADS(2) was US$0.24, compared to adjusted diluted earnings per ADS(2) of US$0.20 in the same period of the previous year. U.S. GAAP diluted earnings per ADS(2) in the fourth quarter 2010 was US$0.15, and diluted earnings per ADS(2) in the fourth quarter 2009 was US$0.13.

Cash and Cash Flow

As of December 31, 2010, the Company had US$140.4 million in cash and cash equivalents, an increase of US$31.4 million from September 30, 2010, derived mainly from the approximately US$19.9 million in net proceeds from the follow-on offering in December and the collection of receivables. Operating cash flow in the fourth quarter 2010 was approximately US$15 million.

FULL YEAR 2010 FINANCIAL RESULTS

Net Revenues  

Net revenues for the full year 2010 increased 63.4% to US$192.9 million from US$118.0 million in 2009.

Net Revenues by Service Line

Year ended December 31, 2010

Year ended December 31, 2009

(in thousands, except percentage)

Enterprise application services

126,555

65.6%

79,423

67.3%

Financial industry IT services

66,308

34.4%

38,580

32.7%

Total net revenue

192,863

100.0%

118,003

100.0%

EAS revenues increased 59.3% year-over-year to US$126.6 million for the full year 2010, as Camelot's strong client engagement enabled it to gain market share amid rapid expansion of the overall market. FIS revenues increased 71.9% year-over-year in 2010 to US$66.3 million due to a combination of strong organic growth and contributions from customized solutions providers Tansun and Agree acquired in 2009 ("customized solutions acquisitions"). EAS and FIS accounted for 65.6% and 34.4% of total net revenues, respectively, in 2010, as compared to 67.3% and 32.7%, respectively, in 2009, reflecting the implementation of the Company's strategy to balance the contribution from the two service lines.

Gross Profit and Gross Margin

Adjusted gross profit(1) increased 74.6% to US$63.9 million for the full year 2010, from US$36.6 million in 2009, as a result of broad-based revenue growth. U.S. GAAP gross profit was US$62.0 million in 2010, compared to US$36.0 million in 2009. The difference between adjusted and GAAP gross profit represents US$1.9 million in share-based compensation and the amortization of intangible assets relating to the customized solutions acquisitions. Adjusted gross margin(1) in 2010 improved to 33.1%, as compared to 31.0% in 2009, reflecting the shift towards higher-margin products and services in the Company's business mix. U.S. GAAP gross margin for 2010 was 32.1%, compared to 30.5% in 2009.

Operating Expenses

Adjusted operating expenses(1) were US$28.4 million in 2010, a 77.3% year-over-year increase compared to 2009. U.S. GAAP operating expenses increased 88.6% to US$39.4 million from US$20.9 million in 2009. The increase was mainly due to sustained business expansion, enhanced sales and marketing activities, consolidation of the customized solutions acquisitions, and expansion of its operational infrastructure to support its publicly listed status. The difference between adjusted and GAAP operating expenses reflected US$2.8 million in share based compensation, US$4.3 million in amortization expenses, and US$3.9 million changes in fair value of contingent consideration incurred from the customized solutions acquisitions in 2009.

Operating Income and Operating Margin

Adjusted operating income(1) in 2010 increased 72.6% to US$35.7 million, from US$20.7 million in 2009. U.S. GAAP operating income increased 49.6% to US$22.8 million as compared to US$15.2 million in 2009. Adjusted operating margin(1) for 2010 was 18.5%, compared to 17.5% in the previous year. U.S. GAAP operating margin for 2010 was 11.8%, compared to 12.9% in 2009.  

Net Income Attributable to Camelot and Earnings Per Share

As a result of the foregoing, adjusted net income(1) attributable to Camelot for 2010 increased 71.0% to US$31.5 million from US$18.4 million in 2009. U.S. GAAP net income attributable to Camelot for the full year increased 43.4% to US$18.6 million from US$13.0 million in 2009. Adjusted net margin(1) was 16.3% in 2010, compared to 15.6% in 2009. U.S. GAAP net margin was 9.6%, compared to 11.0% in 2009.

Full year 2010 adjusted diluted earnings per share(1) was US$0.19, compared to adjusted diluted earnings per share of US$0.14 in 2009. U.S. GAAP diluted earnings per share in 2010 was US$0.11, compared to diluted earnings per share of US$0.10 in 2009. Full year 2010 adjusted diluted earnings per ADS(2) was US$0.76, compared to adjusted diluted earnings per ADS(2) of US$0.55 in the previous year. U.S. GAAP diluted earnings per ADS(2) in 2010 was US$0.45, compared to diluted earnings per ADS(2) of US$0.39 in 2009.

Cash and Cash Flow

As of December 31, 2010, the Company had US$140.4 million in cash and cash equivalents, an increase of US$106.5 million from December 31, 2009, derived from the proceeds of US$93.8 million (net of underwriting commission) from our initial public offering in July and from the approximately US$19.9 million in net proceeds from the follow-on offering in December and the collection of receivables.  Operating cash flow for the full year 2010 was approximately US$11 million.

Days sales outstanding(3) ("DSO") was 145 for the fourth quarter 2010, an improvement from 151 in the fourth quarter 2009.  

Employees

As of December 31, 2010, employee headcount totalled 3,718, including 3,162 information technology (IT) professionals, representing a 29.9% increase in total employees and a 28.9% increase in IT professionals as compared to December 31, 2009. In terms of IT professionals, EAS employee headcount was 1,801, and FIS employee headcount was 1,361, as of December 31, 2010.

BUSINESS AND OPERATIONAL HIGHLIGHTS

Follow-on public offering

Camelot sold a total of 8,234,236 American Depositary Shares ("ADSs") in its follow-on public offering, which was completed in December 2010 with the full exercise of the over-allotment option. The offering consisted of 7,160,206 ADSs offered by certain pre-IPO investors and 1,074,030 ADSs offered by Camelot pursuant to the fully exercised over-allotment option at the offering price of US$19.50 per ADS. Camelot received net proceeds of approximately US$19.9 million.

FIRST QUARTER AND FULL YEAR 2011 GUIDANCE

First Quarter 2011

Camelot expects net revenues for the first quarter 2011 to be approximately US$50 million, representing a 41.6% increase from the first quarter 2010.

Camelot expects first quarter 2011 adjusted net income(1) attributable to Camelot to be approximately US$4.5 million, representing a 31.1% increase from the first quarter 2010.

Camelot expects first quarter 2011 adjusted diluted earnings per share(1) to be approximately US$0.02, based on 195.2 million weighted average ordinary shares outstanding. First quarter 2011 adjusted diluted earnings per ADS(2) is expected to be approximately US$0.09 based on 48.8 million weighted average ADSs outstanding, compared to US$0.09 for the first quarter 2010.

Full Year 2011

The Company expects net revenues for the full year 2011 to be approximately US$250 million, representing a 29.6% increase from 2010.

The Company expects full-year 2011 adjusted net income(1)attributable to Camelot to be approximately US$42 million, representing a 33.3% increase from 2010.

The Company expects full-year 2011 adjusted diluted earnings per share(1) to be approximately US$0.21, based on 198.6 million weighted average ordinary shares outstanding. The Company expects full-year 2011 adjusted diluted earnings per ADS(2) to be approximately US$0.85 based on 49.7 million weighted average ADSs, compared to adjusted diluted earnings per ADS of US$0.76 in 2010.

CONFERENCE CALL INFORMATION

Camelot's management will host a conference call on Friday, March 4, 2011 at 7:00 am (US Eastern) / 4:00 am (US Pacific) / 8:00 pm (Beijing / Hong Kong) to discuss the Company's 2010 fourth quarter and full year financial results and recent business activities. The conference call may be accessed by calling:

US Toll / International

1 617 786 2901

US Toll free

800 299 7635

HK Toll

852 3002 1672

Hong Kong toll free

800 96 3844

South China toll free / China Telecom

10 800 130 0399

South China toll free / China Netcom

10 800 852 1490

North China toll free / China Telecom

10 800 152 1490

UK toll

44 207 365 8426

UK toll free

0808 234 7616

Passcode

Camelot

Please dial in approximately 10 minutes before the scheduled time of the call.

A replay of the conference call may be accessed by phone at the following numbers until Friday, March 11, 2011:

US Toll free

888 286 8010

US Toll / International

617 801 6888

Passcode

52405803

A live and archived webcast of the conference call will be available on the investor relations section of Camelot's website at www.camelotchina.com .

USE OF NON-GAAP FINANCIAL MEASURES

To supplement the unaudited consolidated financial statements presented in accordance with U.S. GAAP, Camelot uses the non-GAAP ("adjusted") financial measures of gross profit and margin, operating expenses, operating income and margin, net income attributable to Camelot Information Systems Inc. and margin, and diluted earnings per share and diluted earnings per ADS, which are adjusted from results based on U.S. GAAP to exclude share-based compensation, acquisition-related intangible amortization, gain from extinguishment of liability, postponed initial public offering costs, and changes in fair value of contingent consideration. The non-GAAP financial measure is provided as additional information to help our investors compare business trends among different reporting periods on a consistent basis and to enhance investors' overall understanding of our current financial performance and prospects for the future. The non-GAAP financial measure should be considered in addition to results prepared in accordance with U.S. GAAP, but should not be considered a substitute for or superior to U.S. GAAP results. In addition, our calculation of the non-GAAP financial measure may be different from the calculation used by other companies, and therefore comparability may be limited.

STATEMENT REGARDING UNAUDITED FINANCIAL INFORMATION

The unaudited financial information set forth above is subject to adjustments that may be identified when audit work is performed on the Company's year-end financial statements, which could result in significant differences from this unaudited financial information.

ABOUT CAMELOT INFORMATION SYSTEMS INC.

Camelot is a leading domestic provider of enterprise application services and financial industry IT services in China, focusing on the high end of the IT value chain. The Company is the largest domestic provider of SAP-based Enterprise Resource Planning services in China as measured by 2009 revenue and by number of SAP consultants as of December 31, 2009. Camelot also operates in other areas of the Asia Pacific region, including Taiwan and Japan. The Company provides services to a wide range of industries, including financial services, resources and energy, manufacturing and automobile, technology, as well as telecommunication, media and education. For more information about Camelot Information Systems Inc., please visit www.camelotchina.com.

SAFE HARBOR

This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. Among other things, 2011 financial outlook and quotations from management in this announcement, as well as strategic and operational plans, contain forward-looking statements. Camelot may also make written or oral forward-looking statements in periodic reports to the Securities and Exchange Commission (the "SEC"), in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to second parties. Statements that are not historical facts, including statements about the Company's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: Camelot's anticipated growth strategies; Camelot's future business development, results of operations and financial condition; expected changes in the Company's revenues and certain cost or expense items; Camelot's ability to attract customers and leverage its brand; trends and competition in the software industry; the Company's ability to control expenses and maintain profit margins; the Company's ability to hire, train and retain qualified managerial and other employees; the Company's ability to develop new software and pilot new business models at desirable locations in a timely and cost-effective manner; the performance of third parties under contracts with the Company; the expected growth of the Chinese economy software market in retail and consumer goods industries; and Chinese governmental policies relating to private managers and operators of software and applicable tax rates.

Further information regarding these and other risks is included in Camelot's filings with the SEC. All information provided in this press release and in the attachments is as of March 4, 2011, and the Company undertakes no duty to update such information or any other forward-looking information, except as required under applicable law.

(1) For more information about the adjusted (i.e. non-GAAP) financial measures contained in this press release, please see "Use of Non-GAAP Financial Measures" below.

(2) One American Depositary Share ("ADS") is equivalent to four ordinary shares.

(3) Calculated by dividing average accounts receivable, net of deferred revenue, by rolling gross revenue before business tax and related surcharges, and multiplying by 360 days. Rolling gross revenue is for the 12 months ended December 31, 2010.

Camelot Information Systems Inc.                                      

Gordon Lau, Chief Financial Officer

Tel: +86 10 8201 9008

Email: investors@camelotchina.com

Camelot Information Systems Inc.

Jojo Guo, Investor Relations Manager

Tel: +1 646 371 6533

Email: investors@camelotchina.com

Investor Relations (Hong Kong)                                            

Mahmoud Siddig

Taylor Rafferty

Tel: +852 3196 3712

Email: camelot@taylor-rafferty.com

Investor Relations (US)

Kelly Gawlik

Taylor Rafferty

Tel: +1 212 889 4350

Email: camelot@taylor-rafferty.com

CAMELOT INFORMATION SYSTEMS INC.

Condensed Consolidation Balance Sheets (Unaudited)

(US Dollars in thousands, except share data)

December 31,

December 31,

2010

2009

Assets

Current assets

Cash and cash equivalents

140,356

33,820

Restricted cash

6,932

2,372

Billed account receivable

43,072

21,026

Unbilled account receivable

62,624

47,188

Term deposits

160

299

Other current assets

14,073

9,052

Total current assets

267,217

113,757

Property and equipment, net

4,680

4,119

Goodwill and other intangible assets

67,860

71,718

Other long-term assets

1,708

1,673

Total assets

341,465

191,267

Liabilities and shareholders' equity

Current liabilities

Consideration payable in connection with business

Consideration payable in connection with business acquisitions

15,594

14,239

Other current liabilities

64,442

42,906

Total current liability

80,036

57,145

Contingent consideration in relation to acquisition

2,307

12,820

Other non-current liabilities

5,845

5,345

Total liabilities

88,188

75,310

Shareholders' equity (a)

253,277

115,957

Total liabilities and shareholders' equity

341,465

191,267

Notes:

(a) As of December 31, 2010, there were 179,610,128 ordinary shares issued and outstanding.

CAMELOT INFORMATION SYSTEMS INC.

Condensed Consolidated Statements of Operations (Unaudited)

(US dollars in thousands, except per share data)

Three months ended December 31

Year ended December 31

2010

2009

2010

2009

Net revenue

60,011

 

40,190

192,863

 

118,003

Cost of revenues(1)(2)

(39,688)

 

(28,657)

(130,862)

 

(81,976)

Gross profit

20,323

 

11,533

62,001

 

36,027

Selling and marketing(1)(2)

(2,790)

 

(1,960)

(11,138)

 

(6,199)

General and administrative(1)

(5,843)

 

(3,625)

(21,605)

 

(12,627)

Research  and development costs

(1,154)

 

(85)

(2,741)

 

(1,496)

Changes in fair value of contingent

 

 

 

 

 

 

  consideration for acquisition

(1,772)

 

(549)

(3,880)

 

(549)

Total operating expense

(11,559)

 

(6,219)

(39,364)

 

(20,871)

Government Subsidies

123

 

8

123

 

56

Income from operations

8,887

 

5,322

22,760

 

15,212

Interest expenses

(142)

 

(46)

(475)

 

(96)

Interest income

248

 

30

498

 

118

Gain on short-term investment

-

 

-

-

 

44

Income before provisions for income tax

8,993

 

5,306

22,783

 

15,278

Income tax expense

(1,645)

 

(778)

(4,100)

 

(2,241)

Net Income

7,348

 

4,528

18,683

 

13,037

Noncontrolling interest

(67)

 

23

(86)

 

(71)

Net Income attributable to Parent Co.

7,281

 

4,551

18,597

 

12,966

 

 

 

 

 

 

Earnings per shares

 

 

 

 

 

 

Basic-ordinary shares

0.04

 

0.03

0.12

 

0.10

Basic-Series A convertible preferred shares

-

 

0.03

0.12

 

0.10

Basic-Series B convertible preferred shares

-

 

0.03

0.12

 

0.10

Diluted-ordinary shares

0.04

 

0.03

0.11

 

0.10

 

 

 

 

 

 

Weighted average shares outstanding

 

 

 

 

 

 

Basic-ordinary shares

176,294,644

 

84,440,994

128,663,415

 

82,035,859

Basic-Series A convertible preferred shares

-

 

44,055,018

24,381,133

 

44,055,018

Basic-Series B convertible preferred shares

-

 

4,019,328

2,224,395

 

4,019,328

Diluted-ordinary shares

189,929,087

 

135,897,396

165,258,030

 

133,017,168

(1) Includes the following amounts of share-based compensation expenses for the periods indicated

Three months ended December 31

Year ended December 31

2010

2009

2010

2009

Cost of revenues

28

41

136

147

Selling and marketing

156

51

354

158

General and administrative

532

286

2,434

938

Total share-based compensation expenses                                                  

716

378

2,924

1,243

(2) Includes the following amounts of amortization expense related to intangible assets acquired for business combination for the periods indicated

Three months ended December 31

Year ended December 31

2010

2009

2010

2009

Cost of revenues

370

199

1,776

440

Selling and marketing

1,034

1,055

4,332

3,224

Total acquisition-related intangible amortization expenses                            

1,404

1,254

6,108

3,664

(3) The following table sets forth the reconciliation of our adjusted net income attributable to Camelot Information Systems Inc. to the U.S. GAAP net income attributable to Camelot Information Systems Inc.

Three months ended December 31

Year ended December 31

2010

2009

2010

2009

Net income attributable to Camelot Information Systems Inc. (U.S. GAAP)

7,281

4,551

18,597

12,966

Share-based compensation

716

378

2,924

1,243

Acquisition-related intangible amortization

1,404

1,254

6,108

3,664

Changes in fair value of contingent consideration

1,772

549

3,880

549

Total adjusted amounts

3,892

2,181

12,912

5,456

Adjusted net income attributable to Camelot Information Systems Inc.

11,173

6,732

31,509

18,422

CAMELOT INFORMATION SYSTEMS INC.

Reconciliations of Adjusted Financial Measures to Comparable GAAP Measures

(US dollars in thousands, except per share data and percentage)

Three months ended December 31, 2010

Three months ended December 31, 2009

GAAP

Adjustments

Adjusted

GAAP

Adjustments

Adjusted

Cost of revenues

39,688

 

(398)

(a)

39,290

28,657

 

(240)

(a)

28,417

Operating expenses

11,559

 

(3,494)

(a)

8,065

6,219

 

(1,941)

(a)

4,278

Operating income

8,887

 

3,892

(a)

12,779

5,322

 

2,181

(a)

7,503

Net income

(d)

7,281

 

3,892

(a)

11,173

4,551

 

2,181

(a)

6,732

Net gross margin

33.9%

 

0.6%

(b)

34.5%

28.7%

 

0.6%

(b)

29.3%

Net operating margin

14.8%

 

6.5%

(a)

21.3%

13.2%

 

5.4%

(a)

18.6%

Net margin

12.1%

 

6.5%

(a)

18.6%

11.3%

 

5.4%

(a)

16.7%

Diluted EPS

$0.04

 

$0.02

(c)

$0.06

$0.03

 

$0.02

(c)

$0.05

Year ended December 31, 2010

Year ended December 31, 2009

GAAP

Adjustments

Adjusted

GAAP

Adjustments

Adjusted

Cost of revenues

130,862

 

(1,912)

(a)

128,950

81,976

 

(587)

(a)

81,389

Operating expenses

39,364

 

(11,000)

(a)

28,364

20,871

 

(4,869)

(a)

16,002

Operating income

22,760

 

12,912

(a)

35,672

15,212

 

5,456

(a)

20,668

Net income

(d)

18,597

 

12,912

(a)

31,509

12,966

 

5,456

(d)

18,422

Net gross margin

32.1%

 

1.0%

(b)

33.1%

30.5%

 

0.5%

(b)

31.0%

Net operating margin

11.8%

 

6.7%

(a)

18.5%

12.9%

 

4.6%

(a)

17.5%

Net margin

9.6%

 

6.7%

(a)

16.3%

11.0%

 

4.6%

(a)

15.6%

Diluted EPS

$0.11

 

$0.08

(c)

$0.19

$0.10

 

$0.04

(c)

$0.14

Notes:

(a) The non-GAAP adjustments include share-based compensation expenses and amortization expense related to intangible assets acquired for business acquisition, where were presented in the notes (1) and (2) below Condensed Consolidated Statements of Operations (Unaudited) for the reconciliation process.

(b) Adjustment to exclude acquisition-related intangible assets amortization expense and share-based compensation recorded in cost of sales, $398, $240, $1,912 and $587 for three-months period ended December 31, 2010 and 2009, year ended December 31, 2010 and 2009.

(c) Adjusted diluted EPS is computed by dividing adjusted net income attributable to Camelot Information Systems Inc. by the weighted average number of diluted ordinary shares outstanding used in computing the GAAP diluted EPS for the respective periods.

(d) Net income refers to net income attributable to Camelot.

CAMELOT INFORMATION SYSTEMS INC.

Quarterly Data Sheet

Net Revenues by Service Line by Quarter

(US Dollars in Thousands)

10Q4

09Q4

FY10

FY09

FY08

Enterprise application services

37,756

26,203

126,555

79,423

65,266

Financial industry IT services

22,255

13,987

66,308

38,580

25,506

Total net revenues

60,011

40,190

192,863

118,003

90,772

(As % of Total Net Revenue)

Enterprise application services

62.9%

65.2%

65.6%

67.3%

71.9%

Financial industry IT services  

37.1%

34.8%

34.4%

32.7%

28.1%

Total net revenues

100.0%

100.0%

100.0%

100.0%

100.0%

Net Revenues by Service Line by latest 6 Quarter

(US Dollars in Thousands)

10Q4

10Q3

10Q2

10Q1

09Q4

09Q3

Enterprise application services

37,756

34,854

28,940

25,005

26,203

23,569

Financial industry IT services

22,255

18,616

15,130

10,307

13,987

10,574

Total net revenues

60,011

53,470

44,070

35,312

40,190

34,143

(As % of Total Net Revenue)

Enterprise application services

62.9%

65.2%

65.7%

70.8%

65.2%

69.0%

Financial industry IT services

37.1%

34.8%

34.3%

29.2%

34.8%

31.0%

Total net revenues

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

Net Revenues by Industry Verticals

(As % of Total Net Revenue)

10Q4

09Q4

FY10

FY09

FY08

Financial services

39.7%

37.4%

36.2%

35.0%

30.2%

Resources and energy

19.0%

27.1%

21.5%

23.9%

18.0%

Manufacturing and automobile

21.4%

22.2%

17.6%

17.1%

15.1%

Technology

7.3%

3.3%

10.8%

10.3%

14.7%

Others

12.6%

10.0%

13.8%

13.7%

22.0%

Total

100.0%

100.0%

100.0%

100.0%

100.0%

Net Revenues by Geographic Markets

(As % of Total Net Revenue)

10Q4

09Q4

FY10

FY09

FY08

PRC and Taiwan    

93.8%

90.3%

91.1%

89.4%

85.0%

Others

6.2%

9.7%

8.9%

10.6%

15.0%

Total

100.0%

100.0%

100.0%

100.0%

100.0%

Net Revenues by Customer Concentration

(As % of Total Net Revenue)

10Q4

09Q4

FY10

FY09

FY08

Single largest                                      

26.2%

29.4%

33.7%

31.6%

31.6%

Five largest

44.5%

48.3%

48.2%

49.0%

48.4%

Ten largest

56.6%

59.1%

59.9%

63.0%

64.6%

SOURCE Camelot Information Systems Inc.



RELATED LINKS

http://www.camelotchina.com