Camelot Information Systems Inc.
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By
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:
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/s/ Yiming Ma
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Name
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:
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Yiming Ma
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Title
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:
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Chief Executive Officer
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Exhibit No.
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Description
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99.1
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a press release announcing unaudited 2012 third-quarter financial results of Camelot Information Systems Inc. (the “Registrant”), made by the Registrant on December 14, 2012
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Company Contacts:
Camelot Information Systems Inc.
Mr. Franklin King, Interim Chief Financial Officer
Tel: +86 (10) 8201 9008
E-mail: investors@camelotchina.com
Ms. Jojo Guo, Investor Relations Manager
Tel: +1 (646) 371-6533
E-mail: investors@camelotchina.com
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Investor Relations Contacts:
CCG Investor Relations
Mr. Crocker Coulson, President
Tel: +1 (646) 213-1915
E-mail: crocker.coulson@ccgir.com
Mr. John Harmon, CFA, Sr. Acct. Mgr.
Tel: +86 (10) 8573 1014 (Beijing)
E-mail: john.harmon@ccgir.com
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·
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Net revenues were $63.0 million in the third quarter of 2012, an increase of 15.7% from $54.5 million in the third quarter of 2011 and an increase of 1.5% from the second quarter
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·
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Net revenues from enterprise application services (EAS) grew 1.8% year-over year, with growth in other sectors offset by lower sales in the Resources and Energy sector
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·
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Net revenues from financial industry IT services (FIS) increased 58.6% year-over-year due to continuing solid execution
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·
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Gross profit was $17.2 million, an increase of 59.0% from $10.8 million in the year-ago quarter and as compared to $16.2 million in the second quarter
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·
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Loss from operations was $31.9 million, as compared to operating loss of $46.3 million in the year ago quarter; Adjusted operating income1 was $5.5 million, as compared to an adjusted operating loss of $0.3 million in the year-ago quarter and income of $4.5 million in the second quarter
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·
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Net loss attributable to Camelot was $31.5 million, as compared to net loss of $46.5 million in the year ago quarter; Adjusted net income1 attributable to Camelot was $5.8 million, as compared to an adjusted net loss of $0.5 million in the year-ago quarter and $3.5 million in the second quarter
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1
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For more information about the adjusted (i.e. non-GAAP) financial measures contained in this press release, please see “Use of Non-GAAP Financial Measures” below.
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Business Line
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Three Months Ended
September 30, 2012
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Three Months Ended
September 30, 2011
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Enterprise application services (EAS)
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$ | 41,887 | 66.5 | % | $ | 41,145 | 75.5 | % | ||||||||
Financial industry IT services(FIS)
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21,115 | 33.5 | % | 13,317 | 24.5 | % | ||||||||||
Total net revenues
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63,002 | 100.0 | % | 54,462 | 100.0 | % |
2
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Calculated by dividing average accounts receivable, net of deferred revenue, by rolling gross revenues before business tax and related surcharges, and multiplying by 360 days. Rolling gross revenues is for the 12 months ended September 30, 2012.
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US Toll free:
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(800) 901-5226
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US Toll / International:
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(617) 786-4513
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Hong Kong toll free:
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800.96.3844
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HK Toll:
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852.3002.1672
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UK toll free:
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08082347616
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UK toll:
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44.207.365.8426
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South China toll free / China Telecom:
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10 800 130 1713
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North China toll free / China Netcom:
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10 800 713 1756
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China toll:
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86 4008811630
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Taiwan toll free:
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00801148420
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US Toll free:
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(888) 286-8010
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US Toll / International:
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(617) 801-6888
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September 30,
2012
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December 31,
2011
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Assets
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Current assets
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Cash and cash equivalents
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$ | 40,399 | $ | 57,128 | ||||
Term deposits
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24,020 | 45,318 | ||||||
Restricted cash
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1,734 | 4,626 | ||||||
Short-term investments
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2,514 | – | ||||||
Billed accounts receivable
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46,401 | 47,834 | ||||||
Unbilled accounts receivable
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115,781 | 87,212 | ||||||
Other current assets
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20,888 | 19,659 | ||||||
Total current assets
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251,737 | 261,777 | ||||||
Property and equipment, net
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4,450 | 4,673 | ||||||
Goodwill and other intangible assets
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12,495 | 46,248 | ||||||
Other long-term assets
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2,427 | 2,698 | ||||||
Total assets
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271,109 | 315,396 | ||||||
Liabilities and equity
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||||||||
Current liabilities
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||||||||
Consideration payable in connection with business acquisition
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– | 5,132 | ||||||
Contingent consideration in relation to acquisition
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3,030 | – | ||||||
Other current liabilities
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58,486 | 71,099 | ||||||
Total current liabilities
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61,516 | 76,231 | ||||||
Contingent consideration in relation to acquisition
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– | 2,822 | ||||||
Other non-current liabilities
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2,997 | 4,255 | ||||||
Total liabilities
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64,513 | 83,308 | ||||||
Equity (a)
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206,596 | 232,088 | ||||||
Total liabilities and equity
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$ | 271,109 | $ | 315,396 |
Three Months Ended
September 30,
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Nine Months Ended
September 30,
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|||||||||||||||
2012
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2011
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2012
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2011
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Net revenues
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$ | 63,002 | $ | 54,462 | $ | 182,211 | $ | 167,430 | ||||||||
Cost of revenues(1)(2)
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(45,825 | ) | (43,662 | ) | (136,123 | ) | (123,733 | ) | ||||||||
Gross profit
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17,177 | 10,800 | 46,088 | 43,697 | ||||||||||||
Selling and marketing(1)(2)
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(3,032 | ) | (6,704 | ) | (11,134 | ) | (15,944 | ) | ||||||||
General and administrative(1)(2)
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(7,828 | ) | (18,718 | ) | (23,213 | ) | (32,853 | ) | ||||||||
Research and development costs
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(1,872 | ) | (1,461 | ) | (5,336 | ) | (3,608 | ) | ||||||||
Changes in fair value of contingent
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||||||||||||||||
consideration for acquisition
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(111 | ) | (317 | ) | (208 | ) | (1,227 | ) | ||||||||
Impairment of intangible assets
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(6,610 | ) | (8,552 | ) | (6,610 | ) | (8,552 | ) | ||||||||
Impairment of goodwill
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(29,597 | ) | (21,457 | ) | (29,597 | ) | (21,457 | ) | ||||||||
Total operating expense
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(49,050 | ) | (57,209 | ) | (76,098 | ) | (83,641 | ) | ||||||||
Government subsidies
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8 | 62 | 8 | 66 | ||||||||||||
Loss from operations
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(31,865 | ) | (46,347 | ) | (30,002 | ) | (39,878 | ) | ||||||||
Interest expenses
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(27 | ) | (251 | ) | (173 | ) | (746 | ) | ||||||||
Interest income
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174 | 257 | 733 | 718 | ||||||||||||
Loss before provisions for income tax
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(31,718 | ) | (46,341 | ) | (29,442 | ) | (39,906 | ) | ||||||||
Income tax benefit(expense)
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39 | (236 | ) | (426 | ) | (1,492 | ) | |||||||||
Net Loss
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(31,679 | ) | (46,577 | ) | (29,868 | ) | (41,398 | ) | ||||||||
Noncontrolling interest
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183 | 74 | (52 | ) | 113 | |||||||||||
Net Loss attributable to Camelot Information Systems Inc.(3)
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$ | (31,496 | ) | $ | (46,503 | ) | $ | (29,920 | ) | $ | (41,285 | ) | ||||
Earnings per share
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Basic-ordinary shares
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$ | (0.18 | ) | $ | (0.26 | ) | $ | (0.17 | ) | $ | (0.23 | ) | ||||
Diluted-ordinary shares
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$ | (0.18 | ) | $ | (0.26 | ) | $ | (0.17 | ) | $ | (0.23 | ) | ||||
Earnings per ADS
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Basic-ADSs
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$ | (0.71 | ) | $ | (1.05 | ) | $ | (0.67 | ) | $ | (0.92 | ) | ||||
Diluted-ADSs
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$ | (0.71 | ) | $ | (1.05 | ) | $ | (0.67 | ) | $ | (0.92 | ) | ||||
Weighted average shares outstanding
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Basic-ordinary shares
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177,621,367 | 177,600,079 | 177,621,367 | 180,272,281 | ||||||||||||
Diluted-ordinary shares
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177,621,367 | 177,600,079 | 177,621,367 | 180,272,281 | ||||||||||||
Weighted average ADSs outstanding
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Basic-ADSs
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44,405,342 | 44,400,020 | 44,405,342 | 45,068,070 | ||||||||||||
Diluted-ADSs
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44,405,342 | 44,400,020 | 44,405,342 | 45,068,070 |
Net Loss
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(31,679 | ) | (46,577 | ) | (29,868 | ) | (41,398 | ) | ||||||||
Other comprehensive income, net of tax:
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||||||||||||||||
Change in cumulative foreign currency translation adjustments
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2,342 | 1,874 | 693 | 5,696 | ||||||||||||
Comprehensive loss
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$ | (29,337 | ) | $ | (44,703 | ) | $ | (29,175 | ) | $ | (35,702 | ) | ||||
Less: comprehensive income(loss) attributable to the noncontrolling interest
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(165 | ) | (101 | ) | 65 | (135 | ) | |||||||||
Comprehensive loss attributable to Camelot Information Systems Inc.
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$ | (29,172 | ) | $ | (44,602 | ) | $ | (29,240 | ) | $ | (35,567 | ) |
Three Months Ended
September 30
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Nine Months Ended
September 30
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2012
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2011
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2012
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2011
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Cost of revenues
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$ | 19 | $ | 1,379 | $ | 62 | $ | 1,435 | ||||||||
Selling and marketing
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108 | 3,463 | 1,625 | 6,603 | ||||||||||||
General and administrative
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374 | 9,509 | 911 | 10,317 | ||||||||||||
Total share-based compensation expenses
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$ | 501 | $ | 14,351 | $ | 2,598 | $ | 18,355 |
Three Months Ended
September 30
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Nine Months Ended
September 30
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2012
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2011
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2012
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2011
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Cost of revenues
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$ | 31 | $ | 467 | $ | 95 | $ | 1,383 | ||||||||
Selling and marketing
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416 | 809 | 1,314 | 2,686 | ||||||||||||
General and administrative
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71 | 70 | 213 | 207 | ||||||||||||
Total acquisition-related intangible amortization expenses
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$ | 518 | $ | 1,346 | $ | 1,622 | $ | 4,276 |
Three Months Ended
September 30
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Nine Months Ended
September 30
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2012
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2011
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2012
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2011
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Net loss attributable to Camelot Information Systems Inc.
(U.S. GAAP)
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$ | (31,496 | ) | $ | (46,503 | ) | $ | (29,920 | ) | $ | (41,285 | ) | ||||
Share-based compensation
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501 | 14,351 | 2,598 | 18,355 |
Acquisition-related intangible amortization
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518 | 1,346 | 1,622 | 4,276 | ||||||||||||
Changes in fair value of contingent consideration
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111 | 317 | 208 | 1,227 | ||||||||||||
Impairment of intangible assets
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6,610 | 8,552 | 6,610 | 8,552 | ||||||||||||
Impairment of goodwill
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29,597 | 21,457 | 29,597 | 21,457 | ||||||||||||
Total adjusted amounts
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37,337 | 46,023 | 40,635 | 53,867 | ||||||||||||
Adjusted net income (loss) attributable to Camelot Information Systems Inc.
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$ | 5,841 | $ | (480 | ) | $ | 10,715 | $ | 12,582 |
Three-Month Periods
Ended September 30,
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Nine-Month Periods
Ended September 30,
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2012
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2011
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2012
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2011
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Cash flow from operating activities:
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Net loss
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$ | (31,679 | ) | $ | (46,577 | ) | $ | (29,868 | ) | $ | (41,398 | ) | ||||
Adjustments to reconcile net loss to net cash provided by(used in) operating activities:
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Depreciation of property and equipment
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236 | 266 | 758 | 818 | ||||||||||||
Amortization of intangible assets
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725 | 1,396 | 2,233 | 4,422 | ||||||||||||
Deferred income taxes
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(1,083 | ) | (1,718 | ) | (713 | ) | (2,126 | ) | ||||||||
Impairment of intangible assets
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6,610 | 8,552 | 6,610 | 8,552 | ||||||||||||
Impairment of goodwill
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29,597 | 21,457 | 29,597 | 21,457 | ||||||||||||
Provision for account receivable
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(270 | ) | 2,717 | (1,061 | ) | 2,717 | ||||||||||
Provision for other current assets
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- | - | 633 | 1,231 | ||||||||||||
Share-based compensation
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501 | 14,351 | 2,598 | 18,355 | ||||||||||||
Gains on disposal of property and equipment
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14 | 2 | 25 | 9 | ||||||||||||
Change in fair value of contingent consideration for acquisition
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111 | 317 | 208 | 1,227 | ||||||||||||
Changes in operating assets and liabilities:
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Accounts receivable
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1,282 | (12,022 | ) | (25,790 | ) | (32,236 | ) | |||||||||
Other assets
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(1,745 | ) | 1,140 | (2,197 | ) | (1,464 | ) | |||||||||
Accounts payable
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(3,415 | ) | (2,095 | ) | (1,671 | ) | (2,084 | ) | ||||||||
Other liabilities
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(1,150 | ) | 4,622 | (3,195 | ) | 2,079 | ||||||||||
Net cash used in operating activities
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(266 | ) | (7,592 | ) | (21,833 | ) | (18,441 | ) | ||||||||
Cash flow from investing activities:
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||||||||||||||||
Purchase of term deposits
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(23,197 | ) | - | (24,260 | ) | - | ||||||||||
Maturity of term deposits
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34,171 | (34,403 | ) | 45,255 | (34,443 | ) | ||||||||||
Restricted cash
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(804 | ) | 915 | 2,924 | (5,260 | ) | ||||||||||
Proceeds from disposal of property and equipment
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4 | - | 8 | 18 | ||||||||||||
Purchase of property and equipment
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(211 | ) | (146 | ) | (522 | ) | (664 | ) | ||||||||
Purchase of intangible assets and other asset
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(1,551 | ) | (78 | ) | (2,573 | ) | (78 | ) | ||||||||
Purchase of businesses, net of cash acquired
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- | - | (3,500 | ) | (11,430 | ) | ||||||||||
Net cash provided (used in) by investing activities
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8,412 | (33,712 | ) | 17,332 | (51,857 | ) | ||||||||||
Cash flow from financing activities:
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||||||||||||||||
Proceeds from bank borrowing
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- | 165 | 2,881 | 7,832 | ||||||||||||
Repayment of bank borrowing
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(2,434 | ) | (318 | ) | (10,561 | ) | (3,758 | ) | ||||||||
Repurchase of ordinary shares
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- | (11,434 | ) | - | (14,415 | ) | ||||||||||
Payment of professional fee related to initial public offering
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- | - | - | (964 | ) | |||||||||||
Payment of reimbursable issuance cost related to follow-on offering
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- | (223 | ) | - | 275 |
Payment of contingent consideration and
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deferred consideration for business acquisitions
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- | (2,048 | ) | (5,100 | ) | (6,773 | ) | |||||||||
Proceeds from stock option exercises
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- | 91 | - | 1,294 | ||||||||||||
Net cash used in financing activities
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(2,434 | ) | (13,767 | ) | (12,780 | ) | (16,509 | ) | ||||||||
Effect of foreign exchange rate changes
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532 | 126 | 552 | 738 | ||||||||||||
Net increase (decrease) in cash and cash equivalents
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6,244 | (54,945 | ) | (16,729 | ) | (86,069 | ) | |||||||||
Cash and cash equivalents, beginning of period
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34,155 | 109,232 | 57,128 | 140,356 | ||||||||||||
Cash and cash equivalents, end of period
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$ | 40,399 | $ | 54,287 | $ | 40,399 | $ | 54,287 |
Three Months Ended
September 30, 2012
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Three Months Ended
September 30, 2011
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GAAP
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Adjustments
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Adjusted
|
GAAP
|
Adjustments
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Adjusted
|
|||||||||||||||||||||
Cost of revenues
|
$ | 45,825 | $ | (50 | ) |
(a)
|
$ | 45,775 | $ | 43,662 | $ | (1,846 | ) |
(a)
|
$ | 41,816 | ||||||||||
Gross profit
|
17,177 | 50 |
(a)
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17,227 | 10,800 | 1,846 |
(a)
|
12,646 | ||||||||||||||||||
Operating expenses
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49,050 | (37,287 | ) |
(a)
|
11,763 | 57,209 | (44,177 | ) |
(a)
|
13,032 | ||||||||||||||||
Operating income(loss)
|
(31,865 | ) | 37,337 |
(a)
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5,472 | (46,347 | ) | 46,023 |
(a)
|
(324 | ) | |||||||||||||||
Net income(loss)
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(31,496 | ) | 37,337 |
(a)(d)
|
5,841 | (46,503 | ) | 46,023 |
(a)
|
(480 | ) | |||||||||||||||
Net gross margin
|
27.3 | % | 0.1 | % |
(b)
|
27.4 | % | 19.8 | % | 3.4 | % |
(b)
|
23.2 | % | ||||||||||||
Net operating margin
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(50.6 | %) | 59.3 | % |
(a)
|
8.7 | % | (85.1 | %) | 84.5 | % |
(a)
|
(0.6 | %) | ||||||||||||
Net margin
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(50.0 | %) | 59.3 | % |
(a)
|
9.3 | % | (85.4 | %) | 84.5 | % |
(a)
|
(0.9 | %) | ||||||||||||
Diluted EPS
|
$ | (0.18 | ) | $ | 0.21 |
(c)
|
$ | 0.03 | $ | (0.26 | ) | $ | 0.26 |
(c)
|
$ | (0.003 | ) | |||||||||
Diluted EPADS
|
$ | (0.71 | ) | $ | 0.84 |
(c)
|
$ | 0.13 | $ | (1.05 | ) | $ | 1.04 |
(c)
|
$ | (0.01 | ) |
Nine Months Ended
September 30, 2012
|
Nine Months Ended
September 30, 2011
|
|||||||||||||||||||||||||
GAAP
|
Adjustments
|
Adjusted
|
GAAP
|
Adjustments
|
Adjusted
|
|||||||||||||||||||||
Cost of revenues
|
$ | 136,123 | $ | (157 | ) |
(a)
|
$ | 135,966 | $ | 123,733 | $ | (2,818 | ) |
(a)
|
$ | 120,915 | ||||||||||
Gross profit
|
46,088 | 157 |
(a)
|
46,245 | 43,697 | 2,818 |
(a)
|
46,515 | ||||||||||||||||||
Operating expenses
|
76,098 | (40,478 | ) |
(a)
|
35,620 | 83,641 | (51,049 | ) |
(a)
|
32,592 | ||||||||||||||||
Operating income(loss)
|
(30,002 | ) | 40,635 |
(a)
|
10,633 | (39,878 | ) | 53,867 |
(a)
|
13,989 | ||||||||||||||||
Net income(loss)
|
(29,920 | ) | 40,635 |
(a)(d)
|
10,715 | (41,285 | ) | 53,867 |
(d)
|
12,582 | ||||||||||||||||
Net gross margin
|
25.3 | % | 0.1 | % |
(b)
|
25.4 | % | 26.1 | % | 1.7 | % |
(b)
|
27.8 | % | ||||||||||||
Net operating margin
|
(16.5 | %) | 22.3 | % |
(a)
|
5.8 | % | (23.8 | %) | 32.2 | % |
(a)
|
8.4 | % | ||||||||||||
Net margin
|
(16.4 | %) | 22.3 | % |
(a)
|
5.9 | % | (24.7 | %) | 32.2 | % |
(a)
|
7.5 | % | ||||||||||||
Diluted EPS
|
$ | (0.17 | ) | $ | 0.23 |
(c)
|
$ | 0.06 | $ | (0.23 | ) | $ | 0.29 |
(c)
|
$ | 0.06 | ||||||||||
Diluted EPADS
|
$ | (0.67 | ) | $ | 0.91 |
(c)
|
$ | 0.24 | $ | (0.92 | ) | $ | 1.16 |
(c)
|
$ | 0.24 |