HONG KONG, Nov. 16 /PRNewswire-Asia/ -- - Second Quarter Total
Revenues of US$42.8 million, Up 52.0% Year-on-Year; - Second
Quarter Adjusted(1) Operating Income of US$20.8 million, an
Increase of 33.4% Year-on-Year; - Second Quarter Adjusted Net
Income of US$21.4 million, an Increase of 32.0% Year-on-Year; -
Second Quarter Adjusted Diluted Earnings Per Share of US$0.40, an
Increase of 29.0% Year-on-Year; - Full Year 2010 Revenue Guidance
Increased to US$158.0 million from Previous Guidance of US$145.0
million and Adjusted Diluted Earnings Per Share Guidance Increased
to US$1.29 Per Share from Previous Guidance of US$1.22 Per Share
Longtop Financial Technologies Limited ("Longtop") (NYSE: "LFT"), a
leading software developer and solutions provider targeting the
financial services industry in China, announced today unaudited
financial results for the quarter ended September 30, 2009, which
is the second quarter of its fiscal year ending March 31, 2010.
"I'm pleased to report that on the back of solid execution once
again our second quarter financial results exceeded our top and
bottom line guidance," commented Weizhou Lian, CEO of Longtop.
"This quarter we achieved a number of important operational
milestones including winning our first meaningful contract in the
securities industry and a Big Four Bank awarding us a BI consulting
project over our global competitors. We also continue to strengthen
our management and strive for efficiency and better execution to
manage our growth. I continue to be optimistic about our prospects,
as Longtop's competitive position is stronger than it has ever been
and we have good visibility for continued strong demand. (1)
Explanation of the Company's Adjusted (i.e. non-GAAP) financial
measures and the related reconciliations to GAAP financial measures
are included in the accompanying "Non-GAAP Disclosure" and the
"Consolidated Adjusted Statements of Operations." FISCAL SECOND
QUARTER DETAILED FINANCIAL RESULTS Revenue 2009 Q2 and 2010 Q2
Revenue - US$000s Three months ended Six months ended September
September % September September % 30, 2008 30, 2009 Change 30, 2008
30, 2009 Change Software Development $23,583 $36,995 56.9% $39,652
$61,712 55.6% Other Services $4,605 $5,839 26.8% $7,864 $9,615
22.3% Total Revenue $28,188 $42,834 52.0% $47,516 $71,327 50.1%
Total revenues for the quarter ended September 30, 2009, were
US$42.8 million, an increase of 52.0% year-on-year (YoY) from
US$28.2 million in the corresponding year ago period, and exceeded
company guidance of US$37.5 million. Software development revenues
of US$37.0 million increased YoY by 56.9% and exceeded Company
guidance of US$34.0 million. Total revenues for the six months
ended September 30, 2009, were US$71.3 million, an increase of
50.1% YoY from US$47.5 million in the corresponding year ago
period. Software development revenues, which were 86.5% of total
revenues for the six months ended September 30, 2009, amounted to
US$61.7 million, a YoY increase of 55.6%. Software Development
Revenues by Customer Type-US$000s Three months ended Six months
ended September September % September September % 30, 2008 30, 2009
Change 30, 2008 30, 2009 Change Big Four Banks 11,862 17,793 50.0%
21,028 28,808 37.0% Other Banks 8,672 12,477 43.9% 13,922 21,874
57.1% Insurance 2,283 5,181 126.9% 3,169 7,886 148.8% Enterprises
766 1,544 101.6% 1,533 3,144 105.1% Total 23,583 36,995 56.9%
39,652 61,712 55.6% Software development revenue from the Big Four
Banks was US$17.8 million in the second quarter, an increase of
50.0% YoY, and US$28.8 million for the six months ended September
30, 2009, an increase of 37.0% YoY. Big Four Banks accounted for
46.7% of software development revenues for the six months ended
September 30, 2009, as compared to 53.0% in the corresponding year
ago period. Software development revenue from Other Banks was
US$12.5 million in the second quarter, a YoY increase of 43.9%, and
US$21.9 million for the six months ended September 30, 2009, an
increase of 57.1% YoY. Other Banks accounted for 35.4% of software
development revenues for the six months ended September 30, 2009,
as compared to 35.1% in the corresponding year ago period. Software
development revenue from Insurance was US$5.2 million in the second
quarter, a YoY increase of 126.9% and US$7.9 million for the six
months ended September 30, 2009, an increase of 148.8% YoY.
Insurance accounted for 12.8% of software development revenues in
the six months ended September 30, 2009. Sysnet, a leading IT
insurance services provider acquired by Longtop in Q1 2010,
contributed US$1.9 million in software development revenue for the
six months ended September 30, 2009, of which $1.7 million was
recorded in Q2 2010. Software development revenue from Enterprises
was US$1.5 million and US$3.1 million for the three and six months
ended September 30, 2009, a YoY increase of 101.6% and 105.1%
respectively. Gross Margins Three months ended Six months ended
September September Change September September Change 30, 2008 30,
2009 (Decrease) 30, 2008 30, 2009 (Decrease) Adjusted Software
Development Gross Margin % 77.0% 73.3% (3.7%) 72.7% 71.6% (1.1%)
Adjusted Other Services Gross Margin % 53.2% 38.7% (14.5%) 61.2%
31.4% (29.8%) Adjusted Total Gross Margin % 73.1% 68.5% (4.6%)
70.8% 66.2% (4.6%) Adjusted Total Gross Margin was 68.5% and 66.2%
for the three and six months ended September 30, 2009, as compared
to 73.1% and 70.8% in the corresponding year-ago periods. The YoY
decline in Adjusted Total Gross Margin is mainly due to a decline
in Adjusted Other Services Gross Margin. Adjusted Software
Development Gross Margin of 71.6% for the six months ended
September 30, 2009, was similar to the previous year of 72.7% even
with the inclusion in fiscal 2010 of Sysnet's business, which has
lower gross margins than Longtop's. Adjusted Other Services Gross
Margin for the six months ended September 30, 2009, declined to
31.4% from 61.2% a year ago due to a YoY decline in system
integration revenues, which are recorded on a net basis, while
system integration department costs, consisting primarily of
headcount and allocated overhead, were stable; investment in
additional headcount; and a higher mix of lower gross margin ATM
revenues resulting from our acquisition during the 2009 fiscal year
of Huayuchang, a provider of ATM maintenance services. Adjusted
Other Services Gross Margin of 38.7% for three months ended
September 30, 2009 significantly improved from 20.2% in the quarter
ended June 30, 2009. Full year 2010 Adjusted Total Gross Margin,
including the impact of the Sysnet acquisition, which is dilutive
to margins but accretive to earnings, is expected to reach the
Company's previous guidance of 67.0%. Operating Expenses Three
months ended Six months ended September September % September
September % 30, 2008 30, 2009 Change 30, 2008 30, 2009 Change
Adjusted Operating Expenses - US$000s 5,038 8,600 70.7% 9,006
14,880 65.2% Adjusted Operating Expenses - % of revenue 17.9% 20.1%
-- 19.0% 20.8% -- Adjusted Operating Expenses, which were 20.1% and
20.8% of revenue for the three and six months ended September 30,
2009, are in line with full year Company guidance of 20.0%.
Adjusted Operating Expenses increased by 65.2% YoY in the six
months ended September 30, 2009, which was slightly higher than the
YoY software development revenue growth of 55.6% primarily due to
the inclusion of Sysnet, which has lower operating margins than
Longtop. Operating Income and Net Income Three months ended Six
months ended September September % September September % 30, 2008
30, 2009 Change 30, 2008 30, 2009 Change Adjusted Operating Income
- US$000s 15,567 20,760 33.4% 24,624 32,325 31.3% Adjusted
Operating Income - % of revenue 55.2% 48.5% -- 51.8% 45.3% --
Adjusted Operating Income was US$20.8 million for the second
quarter and US$32.3 million for the six months ended September 30,
2009, a YoY increase of 33.4% and 31.3%, respectively. Adjusted
Operating Margin for the six months ended September 30, 2009, of
45.3% was lower than the corresponding period in fiscal 2009 due to
the decline in Adjusted Other Services Gross Margin and the
inclusion of Sysnet in fiscal 2010. Three months ended Six months
ended September September % September September % 30, 2008 30, 2009
Change 30, 2008 30, 2009 Change Adjusted Net Income - US$000s
16,238 21,427 32.0% 24,065 32,118 33.5% Adjusted Net income per
Diluted Share 0.31 0.40 29.0% 0.46 0.60 30.4% Adjusted Net Income -
% of revenue 57.6% 50.0% -- 50.6% 45.0% -- US GAAP Net Income -
US$000s 14,197 18,909 33.2% 20,284 27,293 34.6% US GAAP Net income
per Diluted Share 0.27 0.35 29.6% 0.39 0.51 30.8% US GAAP Net
Income - % of revenue 50.4% 44.1% -- 42.7% 38.3% -- Reconciliation
between US GAAP Net Income and Adjusted Net Income Three months
ended Six months ended September September % September September %
Change Change 30, 2008 30, 2009 30, 2008 30, 2009 Adjusted Net
Income - US$000s $16,238 $21,427 32.0% $24,065 $32,118 33.5% Stock
compensation $1,428 $1,528 7.0% $2,742 $3,003 9.5% Amortization of
acquired intangible assets $556 $900 61.9% $982 $1,642 67.2%
Amortization of acquired deferred compensation $57 $90 57.9% $57
$180 215.8% Sub-total $2,041 $2,518 23.4% $3,781 $4,825 27.6% US
GAAP Net Income $14,197 $18,909 33.2% $20,284 $27,293 34.6%
Adjusted Net Income for the quarter ended September 30, 2009, of
US$21.4 million or US$0.40 per fully diluted share increased 32.0%
as compared to Adjusted Net Income of US$16.2 million in the
corresponding year ago period, and exceeded Company guidance of
US$19.5 million and US$0.37 per fully diluted share. US GAAP net
income for the quarter ended September 30, 2009, of US$18.9 million
or US$0.35 per fully diluted share increased 33.2% as compared to
US GAAP net income of US$14.2 million in the corresponding year ago
period. Adjusted Net Income in Q2 2010 included US$3.0 million (Q2
2009: US$1.9 million) for a refund of the 2008 calendar year income
taxes related to qualification as a Key Software Company. Adjusted
Net Income for the six months ended September 30, 2009, of US$32.1
million or US$0.60 per fully diluted share increased 33.5% as
compared to Adjusted Net Income of US$24.1 million in the
corresponding year ago period. US GAAP net income for the six
months ended September 30, 2009, of US$27.3 million or US$0.51 per
fully diluted share increased 34.6% as compared to US GAAP net
income of US$20.3 million in the corresponding year ago period.
Unrestricted cash balances at September 30, 2009, were US$226.4
million. Commenting on the results, Derek Palaschuk, CFO of
Longtop, said: "The outstanding results from the fiscal second
quarter further solidified Longtop's financial strength. The second
quarter's record revenues were supported by robust cash flow from
operations, which was US$18.8 million. And looking ahead, with
strong demand and US$46.5 million in software development revenue
backlog excluding Sysnet, we have increased our estimate for fiscal
2010 revenues from US$145.0 million to US$158.0 million and for
Adjusted Net Income of US$70.5 million as compared to our previous
guidance of US$65.0 million." BUSINESS OUTLOOK Longtop anticipates
for the quarter ending December 31, 2009: i) Total revenues of
US$48.5 million, representing an increase of 47.4% YoY from
revenues of US$32.9 million in the corresponding year ago period.
Software development revenues are expected to be US$42.7 million, a
YoY increase of 47.8% from US$28.9 million in the corresponding
year ago period; ii) Adjusted Operating Income of US$26.0 million,
representing an increase of 50.3% YoY from Adjusted Operating
Income of US$17.3 million in the corresponding year ago period.
iii) Adjusted Net Income of US$23.5 million or US$0.43 per diluted
share (based on an increased share count of approximately 55.3
million shares which assumes 4.0 million new shares issued in Q3
2010), representing an increase of 42.4% YoY from Adjusted Net
Income of US$16.5 million in the corresponding year ago period.
Longtop anticipates for its fiscal year ending March 31, 2010: i)
Total revenues of US$158.0 million, representing an increase of
48.6% YoY from revenues of US$106.3 million in fiscal 2009.
Software development revenues are expected to be US$137.0 million,
a YoY increase of 52.9% from US$89.6 million in fiscal 2009; ii)
Adjusted Operating Income of US$74.5 million, an increase of 41.9%
YoY from Adjusted Operating Income of US$52.5 million in fiscal
2009. iii) Adjusted Net Income of US$70.5 million or US$1.29 per
diluted share (based on an increased share count of approximately
54.8 million shares which assumes 4.0 million new shares issued in
Q3 2010), an increase of 36.6% YoY from Adjusted Net Income of
US$51.6 million in fiscal 2009. CONFERENCE CALL AND WEBCAST
Longtop's senior management team will host a conference call and
audio web cast at 16:15 PM Eastern Time on November 16, 2009 (or
13:15 PM U.S. Pacific Time on and 5:15 AM Beijing/Hong Kong time on
November 17, 2009). The conference call will last for approximately
one hour. The dial-in numbers for the conference call are as
follows: U.S. Toll Free: 1866 549 1292 China Toll Free: 400 681
6949 Hong Kong and International: +852 3005 2050 Passcode: 765115#
A live and archived web cast of this call will be available on
Longtop's website at http://www.longtop.com/en/index.asp NON-GAAP
DISCLOSURE ("ADJUSTED") To supplement the unaudited consolidated
financial statements presented in accordance with United States
Generally Accepted Accounting Principles ("GAAP"), Longtop's
management reports and uses non-GAAP ("Adjusted") measures of
revenues, cost of revenues, operating expenses, net income and net
income per share, which are adjusted from results based on GAAP. To
supplement our financial results presented on a GAAP basis, we use
the non-GAAP measures to exclude certain business combination
accounting entries and expenses related to acquisitions, as well as
other significant expenses including stock-based compensation that
we believe are helpful in understanding our past financial
performance and our future results. Our management regularly uses
our supplemental non-GAAP financial measures internally to
understand, manage and evaluate our business and make operating
decisions. These non-GAAP measures are among the primary factors
management uses in planning for and forecasting future periods.
Compensation of our executives is based in part on the performance
of our business based on these non-GAAP measures. Management
believes these non-GAAP financial measures enhance the user's
overall understanding of our current financial performance and our
prospects for the future. Specifically, we believe the non-GAAP
financial measures provide useful information to both management
and investors by excluding certain items that we believe are not
indicative of our core operating results. The presentation of this
additional information is not meant to be considered superior to,
in isolation from or as a substitute for results prepared in
accordance with US GAAP. We encourage investors to examine the
reconciling adjustments between the GAAP and non-GAAP measures
contained in this release and which we discuss below. Readers are
cautioned not to view non-GAAP results on a stand-alone basis or as
a substitute for results under GAAP, or as being comparable to
results reported or forecasted by other companies. Definitions of
Non-GAAP Measures Adjusted Cost of Revenue is defined as cost of
revenue excluding, if applicable: (1) non-cash compensation expense
and (2) amortization of acquired intangibles. Adjusted Gross Margin
is defined as Total Revenue less Adjusted Cost of Revenue. Adjusted
Operating Expenses is defined as operating expenses excluding, if
applicable: (1) non-cash compensation expense, (2) amortization of
acquired intangibles, deferred compensation arising on acquisition
and goodwill impairment, and (3) one-time items. Adjusted Operating
Income is defined as Adjusted Gross Margin less Adjusted Operating
Expenses. Adjusted Net Income is defined as Adjusted Operating
Income plus/minus other income/(expenses), less income taxes,
excluding if applicable: (1) one- time items and (2) discontinued
operations. Adjusted EPS is defined as Adjusted Net Income divided
by diluted shares. One-Time Items, if applicable, are excluded from
Adjusted Operating Income and Adjusted Net Income. These items are
one-time in nature and non-recurring, infrequent or unusual, and
have not occurred in the past two years or are not expected to
recur in the next two years. GAAP results include one-time items.
Expenses That Are Excluded From Our Non-GAAP Measures Non-cash
compensation expense consists principally of expense associated
with the grants, including unvested grants assumed in acquisitions,
of restricted stock, restricted stock units and stock options.
These expenses are not paid in cash, and we include the related
shares in our fully diluted shares outstanding, which, for
restricted stock units and stock options, are included on a
treasury method basis. Longtop's management believes excluding the
share-based compensation expense from its non-GAAP financial
measure is useful for itself and investors. Although share-based
compensation is a key incentive offered to our employees, and we
believe such compensation contributed to the revenues earned during
the periods presented and also believe it will contribute to the
generation of future period revenues, and as share-based
compensation expense does not involve any upfront or subsequent
cash outflow, Longtop does not factor this in when evaluating and
approving expenditures or when determining the allocation of its
resources to its business segments. As a result, the monthly
financial results for internal reporting and any performance
measure for commission and bonus are based on non-GAAP financial
measures that exclude share-based compensation expense.
Amortization of acquired intangibles is a non-cash expense relating
to acquisitions. At the time of an acquisition, the intangible
assets of the acquired company, such as backlog, customer
relationships, and intellectual property, are valued and amortized
over their estimated lives. While it is likely that we will have
significant intangible amortization expense as we continue to
acquire companies, we have excluded the effect of amortization of
intangible assets from our non-GAAP financial measures.
Amortization of intangible assets is inconsistent in amount and
frequency and is significantly affected by the timing and size of
our acquisitions. Investors should note that the use of intangible
assets contributed to revenues earned during the periods presented
and will contribute to future period revenues as well. Acquisition
proceeds allocated to deferred compensation arises where a portion
of the purchase price paid to shareholders is considered
compensation expense rather than purchase price under US GAAP.
Deferred compensation arising on acquisition is inconsistent in
amount and frequency and is significantly affected by the timing
and size of our acquisitions. Investors should note that the use of
deferred compensation arising on acquisition contributed to
revenues earned during the periods presented and will contribute to
future period revenues as well. Safe Harbor Statement Under the
Private Securities Litigation Reform Act of 1995 It is currently
expected that the Business Outlook will not be updated until the
release of Longtop's next quarterly earnings announcement; however,
Longtop reserves the right to update its Business Outlook at any
time for any reason. This announcement contains forward-looking
statements within the meaning of the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995, including those
with respect to our anticipated operating results for the quarter
ended December 31, 2009 and the fiscal year ended March 31, 2010,
efforts taken to improve efficiency, strengthen management, manage
the Company's growth and the Company's competitive position. In
some cases, you can identify forward-looking statements by such
terms as "believes," "expects," "anticipates," "intends,"
"estimates," the negative of these terms, or other comparable
terminology. Factors that could cause actual results to differ
include the growth of the financial services industry in China; the
amount and seasonality of IT spending by banks and other financial
services companies; competition and potential pricing pressures;
our revenue growth and solution and service mix; our ability to
successfully develop, introduce and market new solutions and
services; our ability to effectively manage our operating costs and
expenses; our reliance on a limited number of customers that
account for a high percentage of our revenues; a possible future
shortage or limited availability of employees; general economic and
business conditions; the volatility of our operating results and
financial condition; our ability to attract or retain qualified
senior management personnel and research and development staff; the
outbreak of health epidemics; the planned relocation of our
headquarters; People's Republic of China, or PRC, regulatory
changes and interpretations; and other risks detailed in the
Company's filings with the Securities and Exchange Commission.
These forward-looking statements involve known and unknown risks
and uncertainties and are based on current expectations,
assumptions, estimates and projections about the companies and the
industry. The Company undertakes no obligation to update
forward-looking statements to reflect subsequent occurring events
or circumstances, or to changes in its expectations, except as may
be required by law. Although the Company believes that the
expectations expressed in these forward looking statements are
reasonable, they cannot assure you that their expectations will
turn out to be correct, and investors are cautioned that actual
results may differ materially from the anticipated results. Our
actual results of operations for the quarter and year ended
September 30, 2009, are not necessarily indicative of our operating
results for any future periods. Any projections in this release are
based on limited information currently available to us, which is
subject to change. About Longtop Financial Technologies Limited
Longtop is a leading software development and solutions provider
targeting the financial services industry in China. Longtop
develops and delivers a comprehensive range of software
applications and solutions with a focus on meeting the rapidly
growing IT needs of the financial services institutions in China.
Headquartered in Beijing, Longtop has six solution delivery
centers, three research and development centers and 95 ATM service
centers located in 27 out of 31 provinces in China. For more
information, please visit: http://www.longtop.com/ . For more
information, please contact: For Investors: Longtop Financial
Technologies Limited Charles Zhang, CFA Email: Phone:
+86-10-8421-7758 For Media: IR Inside BV Caroline Straathof Email:
Phone: +31-6-5462-4301 CONSOLIDATED BALANCE SHEETS March 31,
September 30, 2009 2009 (In U.S. dollar thousands, except share and
per share data) Assets Current assets: Cash and cash equivalents
$238,295 $226,430 Restricted cash 463 536 Accounts receivable, net
29,861 56,384 Inventories 4,982 4,520 Amounts due from related
parties 682 1,268 Deferred tax assets 979 1,016 Other current
assets 4,712 12,041 Total current assets 279,974 302,195 Fixed
assets, net 14,858 26,169 Prepaid land use right 5,167 5,117
Intangible assets, net 11,526 27,193 Goodwill 24,837 38,531
Deferred tax assets 1,479 1,479 Other assets 632 450 Total assets
$338,473 $401,134 Liabilities and shareholders' equity Current
liabilities: Short-term borrowings $486 $4,709 Accounts payable
3,299 9,436 Deferred revenue 16,010 19,001 Amounts due to related
parties 17 77 Deferred tax liabilities 867 935 Accrued and other
current liabilities 23,810 31,808 Total current liabilities 44,489
65,966 Long-term liabilities: Obligations under capital leases, net
of current portion 98 -- Deferred tax liabilities 1,242 5,554 Other
non-current liabilities 286 3,620 Total liabilities 46,115 75,140
Shareholders' equity: Ordinary shares $0.01 par value
(1,500,000,000 shares authorized, 51,036,816 and 51,691,623 shares
issued and outstanding as of March 31, 2009 and September 30, 2009,
respectively) $510 $517 Additional paid-in capital 243,194 249,262
Retained earnings 29,451 56,744 Accumulated other comprehensive
income 19,203 19,471 Total shareholders' equity 292,358 325,994
Total liabilities and shareholders' equity $338,473 $401,134
CONSOLIDATED STATEMENTS OF OPERATIONS Three Months Ended Six Months
Ended September September September September 30, 2008 30, 2009 30,
2008 30, 2009 (In U.S. dollar thousands, except share and per share
data) Revenues: Software development $23,583 $36,995 $39,652
$61,712 Other services 4,605 5,839 7,864 9,615 Total revenues
28,188 42,834 47,516 71,327 Cost of revenues: Software development
5,962 10,825 11,770 19,144 Other services 2,541 3,767 3,746 7,141
Total cost of revenues 8,503 14,592 15,516 26,285 Gross profit
19,685 28,242 32,000 45,042 Operating expenses: Research and
development 1,204 1,962 2,313 3,479 Sales and marketing 2,616 5,304
4,408 8,563 General and administrative 2,339 2,734 4,436 5,500
Total operating expenses 6,159 10,000 11,157 17,542 Income from
operations 13,526 18,242 20,843 27,500 Other income (expenses):
Interest income 1,609 992 3,516 2,000 Interest expense (25) (178)
(292) (194) Other income (expense), net 717 220 (295) 305 Total
other income 2,301 1,034 2,929 2,111 Income before income tax
expense 15,827 19,276 23,772 29,611 Income tax expense (1,630)
(367) (3,488) (2,318) Net income 14,197 18,909 20,284 27,293 Net
income per share: Basic ordinary share $0.28 $0.37 $0.40 $0.53
Diluted $0.27 $0.35 $0.39 $0.51 Shares used in computation of net
income per share: Basic ordinary share 50,491,027 51,461,241
50,406,533 51,326,441 Diluted 52,398,944 53,375,287 52,455,885
53,306,623 Includes share-based compensation related to: Cost of
revenues software development $419 $485 $779 $923 Cost of revenues
other services 63 69 122 138 General and administrative expenses
473 419 945 859 Sales and marketing expenses 371 452 713 880
Research and development expenses 102 103 183 203 UNAUDITED
CONSOLIDATED ADJUSTED STATEMENTS OF OPERATIONS Three Months Ended
Six Months Ended September September September September 30, 2008
30, 2009 30, 2008 30, 2009 (In U.S. dollar thousands, except share
and per share data) Revenues: Software development 23,583 36,995
39,652 61,712 Other services 4,605 5,839 7,864 9,615 Total revenues
28,188 42,834 47,516 71,327 Cost of revenues: Software development
5,962 10,825 11,770 19,144 Other services 2,541 3,767 3,746 7,141
Total cost of revenues 8,503 14,592 15,516 26,285 Cost of revenue
adjustments: Share-based compensation software development (419)
(485) (779) (923) Share-based compensation other services (63) (69)
(122) (138) Amortization of acquired intangible assets other
services (283) (87) (532) (344) Amortization of acquired intangible
assets software development (98) (387) (140) (578) Amortization of
acquired deferred compensation other services (39) (33) (39) (66)
Amortization of acquired deferred compensation software development
(18) (57) (18) (114) Adjusted cost of revenues: Software
development 5,427 9,896 10,833 17,529 Other services 2,156 3,578
3,053 6,593 Total adjusted cost of revenues 7,583 13,474 13,886
24,122 Gross profit 19,685 28,242 32,000 45,042 Adjusted gross
profit 20,605 29,360 33,630 47,205 Operating expenses: Research and
development 1,204 1,962 2,313 3,479 Sales and marketing 2,616 5,304
4,408 8,563 General and administrative 2,339 2,734 4,436 5,500
Total operating expenses 6,159 10,000 11,157 17,542 Operating
expense adjustments: Share-based compensation research and
development (102) (103) (183) (203) Share-based compensation sales
and marketing (371) (452) (713) (880) Share-based compensation
general and administrative (473) (419) (945) (859) Amortization of
acquired intangible assets sales and marketing (136) (360) (243)
(590) Amortization of acquired intangible assets general and
administrative (39) (66) (67) (130) Adjusted operating expenses:
Research and development 1,102 1,859 2,130 3,276 Sales and
marketing 2,109 4,492 3,452 7,093 General and administrative 1,827
2,249 3,424 4,511 Total adjusted operating expenses 5,038 8,600
9,006 14,880 Income from operations 13,526 18,242 20,843 27,500
Adjusted income from operations 15,567 20,760 24,624 32,325 Other
income (expenses): Interest income 1,609 992 3,516 2,000 Interest
expense (25) (178) (292) (194) Other (expenses) income, net 717 220
(295) 305 Total other income 2,301 1,034 2,929 2,111 Income before
income tax expense 15,827 19,276 23,772 29,611 Adjusted income
before income tax expense 17,868 21,794 27,553 34,436 Income tax
expense (1,630) (367) (3,488) (2,318) Net income 14,197 18,909
20,284 27,293 Adjusted net income 16,238 21,427 24,065 32,118 Net
income per share: Basic ordinary share $0.28 $0.37 $0.40 $0.53
Diluted $0.27 $0.35 $0.39 $0.51 Adjusted net income per share:
Basic ordinary share $0.32 $0.42 $0.48 $0.63 Diluted $0.31 $0.40
$0.46 $0.60 Shares used in computation of net income and adjusted
net income per share: Basic ordinary share 50,491,027 51,461,241
50,406,533 51,326,441 Diluted 52,398,944 53,375,287 52,455,885
53,306,623 DATASOURCE: Longtop Financial Technologies Limited
CONTACT: For Investors: Longtop Financial Technologies Limited,
Charles Zhang, CFA, , or +86-10-8421-7758; For Media: IR Inside BV,
Caroline Straathof, , or +31-6-5462-4301 Web Site:
http://www.longtop.com/
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