2008-07-15 07:53:00
Revenue Estimated at an All-Time Record for a Second Quarter, With
Improved Profitability Anticipated
HONG KONG & ATLANTA–(EMWNews)–CDC Corporation (NASDAQ: CHINA), a leading global enterprise software
and new media company, today announced preliminary revenues for Q2 2008.
CDC Corporation, based upon preliminary financial information,
anticipates total revenue for Q2 2008 to be between approximately
(U.S.)$107.3 -108.5 million, which would represent an increase of 9-10
percent from (U.S.)$98.3 million in Q1 2008 and would be a record second
quarter for the company. This anticipated revenue range for Q2 2008
exceeds the Wall Street consensus estimate of $102.9 million. This
includes license revenues of approximately (U.S.) $14.2 – $14.7 million,
up from (U.S.)$12.3 million in Q1 2008, and higher than the consensus
estimate of approximately $13.0 million.
CDC Corporation also anticipates an improvement in its adjusted net
income and in its adjusted EBITDA (earnings before interest, taxes,
depreciation and amortization, including stock based compensation) for
Q2 2008 compared to Q1 2008. During the second quarter of 2008, CDC
Software implemented several cost reduction measures, in addition to
those previously completed, such as reducing facilities and related
administration expenses, eliminating redundant and non-essential
positions and accelerating integration of past acquisitions. These cost
reductions implemented toward the end of the second quarter of 2008 are
expected to yield additional annual savings of approximately (U.S.)$15
million. Total cost reductions undertaken over the last 12 months are
expected to yield approximately (U.S.)$31 million annually.
“We are very pleased that our expected Q2 2008
revenues and profitability will exceed Wall Street consensus estimates
for the second consecutive quarter,” said
Peter Yip, CEO of CDC Corporation. “Despite
the downturn that has been impacting the broad economy, we are pleased
to see total revenue growth from our first quarter of 2008 and achieve
an anticipated all-time record for total revenues in the second quarter.
We plan to continue to improve our operating metrics with consistent
execution quarter over quarter and we are very focused on cash
preservation and cash generation.
“The second quarter’s
results were led by strong performance at CDC Software and CDC Games,”
continued Yip. “Both divisions are anticipated
to post record quarterly revenues, and total revenues are expected to
exhibit at or near double digit sequential improvement relative to the
first quarter of 2008. CDC Software saw robust results from its CDC
Supply Chain and CDC Factory product lines. We anticipate the
continuation of these trends, given that, with rising transportation,
fuel and commodity costs, CDC Factory and CDC Supply Chain are
strategically positioned to provide new and existing customers with the
critical tools they need to better manage their own internal costs in
this highly inflationary and difficult environment. Despite our cost
reduction efforts, we expect to continue to maintain our healthy
research and development budget within CDC Software to ensure we
maintain our competitive advantage relative to enhanced product
functionality and our highly differentiated vertical expertise.
“In addition, in the second quarter, we saw
robust growth in our China-based businesses, with CDC Games expected to
deliver a double-digit increase in revenues. We also have an exciting
roll-out schedule of new game launches planned for the second half of
the year. Overall, we are confident that we have taken the steps
necessary to manage our cost base in anticipation of an on-going
difficult operating environment and look for improving operating metrics
and profitability going forward. As a result, we are cautiously
optimistic about the improving prospects for CDC Corporation.”
Q2 2008 Earnings Release
CDC intends to report full Q2 2008 results in the first half of August
2008.
About CDC Corporation
The CDC family of companies includes CDC Software focused on enterprise
software applications and services, CDC Games focused on online games,
and China.com focused on portals for the greater China markets. For more
information about CDC Corporation (NASDAQ: CHINA), please visit www.cdccorporation.net.
About CDC Software
CDC Software, The Customer-Driven Company™, is
a provider of enterprise software applications designed to help
organizations deliver a superior customer experience while increasing
efficiencies and profitability. CDC Software’s product suite includes:
CDC Factory (manufacturing operations management), Ross ERP (enterprise
resource planning) and SCM (supply chain management), CDC Supply Chain
(supply chain management, warehouse management and order management),
Pivotal CRM and Saratoga CRM (customer relationship management), CDC
MarketFirst (marketing automation and lead management), Respond
(customer complaint and feedback management), c360 CRM add-on products,
industry solutions and development tools for the Microsoft Dynamics CRM
platform, Platinum HRM (human resources) and business analytics
solutions.
These industry-specific solutions are used by more than 6,000 customers
worldwide within the manufacturing, financial services, health care,
home building, real estate, wholesale and retail distribution
industries. The company completes its offerings with a full continuum of
services that span the life cycle of technology and software
applications, including implementation, project consulting, outsourced
business services, application management and offshore development. CDC
Software is the enterprise software unit of CDC Corporation (NASDAQ:
CHINA) and is ranked number 12 on the MBT 2007 Global 100 List of
Enterprise and Supply Chain Management Application vendors. For more
information, please visit www.cdcsoftware.com.
About China.com Inc.
China.com is a leading operator of Internet portals, serving a broad
range of audiences in China. In 2006, it was chosen as the first company
to host Google’s Video Adsense which serves video ads targeted at
China’s English-speaking audience. China.com also was appointed by the
Jilin government as the exclusive web sponsor of the 2007 Asian Winter
Games. China.com was listed on the GEM of the Stock Exchange of Hong
Kong Limited on March 9, 2000. In December 2000, China.com Inc. was
admitted as a constituent stock of the Hang Seng IT and IT Portfolio
Indices.
About CDC Games
CDC Games is one of the market leaders of online and mobile games in
China with more than 140 million registered users. The company pioneered
the “free-to-play, pay-for-merchandise” online games model in China with
Yulgang and launched the first free-to-play, pay for merchandise FPS
(first person shooter) game in China with Special Force. Launched in
July 2007, Special Force has consistently ranked in the Top 10
downloaded games in China and becoming the top revenue producer for CDC
Games. Currently, CDC Games offers six popular MMO online games in China
that include: Special Force, Yulgang, Shaiya, Mir III, Shine and Eve
Online. In March 2007, the company announced the formation of CDC Games
Studio to establish strategic relationships with selected games
development partners to accelerate the development of new, original
online games for China and other targeted global geographies. Through
its CDC Games International (CGI) subsidiary, the company launched a
long-term strategy to be a global publisher of MMO games. As part of
this long term strategy, CDC Games launched the www.12FootTall.com
portal to showcase online games and related content in North America.
For more information on CDC Games, visit: www.cdcgames.net.
Cautionary Note Regarding Forward-Looking Statements
This press release includes “forward-looking statements” within the
meaning of the United States Private Securities Litigation Reform Act of
1995. These forward-looking statements include statements regarding our
range of anticipated revenue and license revenue for Q2 2008 as well as
our expected improvement in adjusted net income and adjusted EBITDA, our
expectations to post record quarterly revenues and exhibit double-digit
sequential improvements relative to the first quarter of 2008, our
expectations regarding the yields of our current, past and planned cost
savings measures, our plans to continue improving our operating metrics,
consistently execute our plans quarter over quarter and focus on cash
preservation and cash generation, our expectations regarding the
continuation of sales performance trends for CDC Factory and CDC Supply
Chain, our expectation to continue to maintain our research and
development budget within CDC Software to help ensure we maintain our
competitive technological advantage and our vertical expertise, our
beliefs regarding the components of our Q2 2008 performance and the
continuation of trends relating thereto, our beliefs regarding our
future prospects, our intentions regarding the timing of our Q2 2008
earnings release, our beliefs regarding the strength of our installed
base customers and sales, our beliefs regarding customer preferences,
our beliefs regarding our position and ability to continue our growth
strategy and continue to see improvements in operating margins, our
beliefs regarding our past and present cost savings initiatives,
including restructurings and headcount reductions, and the effects
thereof, including effects on out financial performance and profit
margins, and other statements that are not historical fact, the
achievement of which involve risks, uncertainties and assumptions. If
any such risks or uncertainties materialize or if any of the assumptions
proves incorrect, our results could differ materially from the results
expressed or implied by the forward-looking statements we make. These
statements are based on management’s current expectations and are
subject to risks and uncertainties and changes in circumstances. There
are important factors that could cause actual results to differ
materially from those anticipated in the forward looking statements,
including the following: (a) the ability to realize strategic objectives
by taking advantage of market opportunities in targeted geographic
markets; (b) the ability to make changes in business strategy,
development plans and product offerings to respond to the needs of
current, new and potential customers, suppliers and strategic partners;
(c) the effects of restructurings and rationalization of operations; (d)
the ability to address technological changes and developments including
the development and enhancement of products; (e) the entry of new
competitors and their technological advances; (f) the need to develop,
integrate and deploy enterprise software applications to meet customer’s
requirements; (g) the possibility of development or deployment
difficulties or delays; (h) the dependence on customer satisfaction with
the company’s software products and services; (i) continued commitment
to the deployment of the enterprise software solutions; (j) risks
involved in developing software solutions and integrating them with
third-party software and services; (k) the continued ability of the
company’s enterprise software solutions to address client-specific
requirements; (l) demand for and market acceptance of new and existing
enterprise software and services and the positioning of the company’s
solutions; (m) the ability of staff to operate the enterprise software
and extract and utilize information from the company’s enterprise
software solutions; (n) the continued cooperation of our strategic and
business partners; (o) risks relating to economic conditions and other
matters beyond our control; (p) the risk that the preliminary financial
results provided herein could differ from our actual results of
operations and financial condition; and (q) the continued strength of
revenues from our installed base customers.. Further information on
risks or other factors that could cause results to differ is detailed in
filings or submissions with the United States Securities and Exchange
Commission made by CDC Corporation in its Annual Report for the year
ended December 31, 2007 on Form 20-F filed on June 30, 2008. All
forward-looking statements included in this press release are based upon
information available to management as of the date of the press release,
and you are cautioned not to place undue reliance on any forward looking
statements which speak only as of the date of this press release. The
company assumes no obligation to update or alter the forward looking
statements whether as a result of new information, future events or
otherwise.
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CDC Corporation Bahl, 678-259-8510 Relations |
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