AsiaInfo Reports Fourth Quarter and Year End Results; Company Achieves Major Milestone of Positive EBITDA; Software Net Revenues Increase 192 Percent.Business Editors BEIJING Beijing (bā-jĭng) or Peking (pē-kĭng, pā–), city (1994 est. urban pop. 6,093,300; 1994 est. total pop. 7,240,700), capital of the People's Republic of China. It is in central Hebei prov. and SANTA CLARA Santa Clara, city, Cuba Santa Clara (sän`tä klä`rä), city (1994 est. pop. 217,000), capital of Villa Clara prov., central Cuba. , Calif.--(BUSINESS WIRE)--January 18, 2001 AsiaInfo Holdings, Inc. (Nasdaq:ASIA Asia (ā`zhə), the world's largest continent, 17,139,000 sq mi (44,390,000 sq km), with about 3.3 billion people, nearly three fifths of the world's total population. ), a leading provider of communications software (communications, software) communications software - Application programs, operating system components, and probably firmware, forming part of a communication system. These different software components might be classified according to the functions within the Open Systems products and infrastructure solutions in China, today announced its fourth quarter and year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. results for the period ended December December: see month. 31, 2000. The company reported fourth quarter 2000 revenue net revenue (total revenue net of hardware costs) of US$14.1 million, representing a 117 percent increase over net revenue of US$6.5 million in the comparable fourth quarter of 1999 and a 6 percent sequential increase over the third quarter of 2000. Net income was US$1.0 million, or basic earning per share Noun 1. earning per share - the portion of a company's profit allocated to each outstanding share of common stock net income, net profit, profit, profits, earnings, lucre, net - the excess of revenues over outlays in a given period of time (including depreciation $0.025, for the fourth quarter of 2000 compared to a net loss of US$3.8 million, or basic earning per share negative $0.23, for the fourth quarter of 1999. During the fourth quarter of 2000, AsiaInfo achieved a significant milestone with the generation of positive EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become of US$215,073. At the end of 2000, net revenue backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. was US$36 million, representing a 100 percent increase over net revenue backlog at the same time a year ago. Software revenue in the fourth quarter was a record US$5.4 million, a 192 percent increase over US$1.9 million in the same quarter of 1999 and a 10 percent sequential increase over US$4.9 million in the quarter ended September September: see month. 30, 2000. Software revenue represented 38 percent of total net revenue in the fourth quarter of 2000, compared to 29 percent of total net revenue in the fourth quarter of the year before. Gross revenue for the fourth quarter of 2000 was US$44.0 million, representing an increase of 268 percent over gross revenue of US$12.0 million in the same period in 1999. Gross profit for the fourth quarter of 2000 was US$10.9 million, representing an 11 percent sequential increase over last quarter's US$9.8 million profit. Compared to the previous quarter, the increase in gross profit, gross margin and positive EBITDA reflected growth in high margin software revenues, increased contribution from high-end high-end adj. Informal 1. Appealing to sophisticated and discerning customers: a high-end department store; high-end video equipment. 2. network solutions and continued cost control. During the fourth quarter, AsiaInfo made significant improvements in the collection of accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying , reducing Days Sales Outstanding In accountancy, Days Sales Outstanding is a company's average collection period. A low figure indicates that the company collects its outstanding receivables quickly. Typically it is looked at either quarterly or yearly (90 or 365 days). from 127 days in the third quarter of 2000 to 115 days in the fourth quarter, which resulted from the adoption of standard contracts and improved service delivery process. For the full year 2000, net revenue was US$44.6 million, a 77 percent increase over net revenue of US$25.2 million in 1999. Net loss was US$2.8 million, or $0.07 per share. Software revenue was US$16.6 million in 2000, representing 37 percent of total net revenue and a 155 percent increase over 1999 software revenue of US$6.5 million. Full year 2000 gross revenue was $176.1 million and gross profit was $31.4 million. "AsiaInfo continued its strong performance during the fourth quarter of 2000, capping a successful year in which net revenues grew by 77 percent," stated President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , James Ding. "During 2000, we implemented several key initiatives such as establishing two strategic business units -- Software Products and Network Solutions, which will enable us to develop a stronger focus and create greater operating efficiency." "During the year, we expanded our high margin software business, as revenues increased 155 percent," Ding continued. "Additionally, our customer base has been further diversified diversified (di·verˑ·s due to the deregulation Deregulation The reduction or elimination of government power in a particular industry, usually enacted to create more competition within the industry. Notes: Traditional areas that have been deregulated are the telephone and airline industries. of China's telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. industry and our focus on meeting the needs of new players in the industry." Fourth Quarter Highlights New Customer Wins AsiaInfo established a new partnership in October with an emerging telecom services provider -- JiTong Communications by winning a contract to provide system integration services for the client's IP infrastructure Phase II expansion project. Other new customer wins included a contract to provide Sichuan Broadcasting and Television Network Ltd., a provincial cable Internet Internet access via the cable companies. There are two kinds of service. One uses a cable modem to connect to a computer, and the other uses an enhanced cable box that provides Internet access directly at the TV. operator, with AsiaInfo's billing and messaging software products. This contract marks a breakthrough for AsiaInfo, as it enters the emerging Cable Internet market in China. AsiaInfo also signed a contract to provide a commercial subsidiary of the Ministry of Foreign Trade & Economic Cooperation (MOFTEC MOFTEC Ministry of Foreign Trade and Economic Cooperation (China) ) with network solutions and IP/VoIP billing software for its national backbone project. New Contracts from Existing Customers Reflecting the success of AsiaInfo's strategy of expanding existing customer relationships through the sale of high-end products and services, sales to existing telecommunication telecommunication Communication between parties at a distance from one another. Modern telecommunication systems—capable of transmitting telephone, fax, data, radio, or television signals—can transmit large volumes of information over long distances. providers continued to increase in the fourth quarter. Contracts signed with existing customers during the fourth quarter included: -- A US$14.9 million contract with Beijing Telecom to increase its Internet infrastructure capacity -- A US$5.2 million contract with Jiangsu Telecom for its Phase III expansion project -- A US$1.6 million contract with Liaoning Telecom for its Phase IV expansion project -- Two contracts totaling US$175,000 with Sichuan Telecom and Xizang Telecom for Marsec to provide network security services -- A contract with Jilin Mobile to provide messaging products and services -- A contract with China NetCom for the construction of its Beijing IP network. Ding commented, "We are proud of AsiaInfo's performance in the fourth quarter and the full year 2000. We begin 2001 in an excellent position to continue and expand our leadership role in the development of China's Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the infrastructure. The strength of our balance sheet and our fiscal discipline will enable us to deliver increasing value to our shareholders and customers. We are well on our way to achieving positive operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. in the second quarter of 2001 and remain confident about our outlook going forward." Business Outlook The following outlook statements are based on current expectations. These statements are forward looking, and actual results may differ materially. Full Year 2001 Guidance AsiaInfo expects 2001 net revenue to increase in the range of 60 - 65 percent over full year 2000, compared to the compound annual growth rate of net revenue of 54.4 percent between 1996 and 2000. Software revenue is expected to grow faster than net revenue at 70 - 80 percent year-over-year in 2001. Sales and marketing expenses are expected to increase approximately 15 - 20 percent year over year and research and development expenses are expected to increase 50 - 60 percent over 2000. General and administration expenses are expected to remain at the same level as in 2000. Operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. for 2001 are expected to grow approximately 14 - 18 percent over 2000. Operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. for the year is expected to be approximately $5 - 6 million. Net income for 2001 is expected to be in the range of $9 - 11 million, or $0.20 to 0.24 per share. First Quarter 2001 Guidance The company expects net revenue for the first quarter of 2001 to increase approximately 140 - 150 percent year-over-year. Software revenue will grow more rapidly at a year-over-year rate of approximately 170 - 180 percent. Gross revenue for the first quarter is expected to be 70 - 80 percent higher than that of the same period a year ago. Gross margin is expected to be in the range of 20 - 24 percent during the first quarter of 2001. Operating expenses are expected to decrease approximately 3 - 5 percent over the fourth quarter of 2000. Operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. is expected to continue to narrow to $0.7 - 0.8 million. EBITDA is expected to remain positive. AsiaInfo will continue to generate positive net income in the first quarter and expects earnings per share to be approximately $0.01 - 0.02 per share. Fourth Quarter and Year End 2000 Conference Call AsiaInfo will host a conference call to discuss fourth quarter and year-end earnings at 8:00am EST/5:00am PST PST Paroxysmal supraventricular tachycardia, see there today (Beijing Time: January 18, 2001 at 9:00pm). The management team will discuss quarterly results and highlights, and answer questions. The dial-in number for the call is 973-633-6740. A replay will be available by dialing 877-780-2262 for US callers or 402-220-3104 for international callers between 8:00am EST EST electroshock therapy. EST abbr. electroshock therapy on January 18, 2001 until 8:00am EST on January 25, 2001. Additionally, the conference call will be broadcast via the Internet and can be accessed from the investor relations Investor relations The process by which the corporation communicates with its investors. section of AsiaInfo's corporate Web site at the address shown below. About AsiaInfo Holdings, Inc. AsiaInfo Holdings, Inc. (Nasdaq:ASIA) is a leading provider of telecom and Internet software products and infrastructure solutions in China. The company offers telecommunications service providers A Telecommunications Service Provider or TSP is a type of Communications Service Provider that has traditionally provided telephone and similar services. This category includes ILECs, CLECs, and mobile wireless companies. total network solutions for their Internet infrastructure requirements and develops proprietary software for Internet service providers Internet service provider (ISP) Company that provides Internet connections and services to individuals and organizations. For a monthly fee, ISPs provide computer users with a connection to their site (see data transmission), as well as a log-in name and password. , Internet content providers See content provider. and telecommunications service providers. The company's customer management and billing software products meet the complex, mission-critical provisioning, accounting, reporting and marketing needs of Internet and telecommunications service providers. The company also offers carrier-scale messaging products to Internet service providers and Internet content providers. Since it moved its operations from the US to China in 1995, AsiaInfo has served as a chief architect of the country's Internet infrastructure, crafting the Internet backbones A group of communications networks managed by several commercial companies that provide the major high-speed links across the country. ISPs are either connected directly to these backbones or to a larger regional ISP that is connected to one. for all the major national carriers including China Telecom, China Unicom China Unicom, full name China United Telecommunications Corporation, 中国联通, HKSE: 0762 NYSE: CHU, is a telecommunication operator in the People's Republic of China. 52. , China Netcom China Netcom, full name China Netcom Group Corporation (Hong Kong) Limited, abbreviated CNC, was originally formed in August 1999 by the People's Republic of China government to enable inward investments to build high speed Internet communications in the country. and China Mobile. For more information about AsiaInfo, please visit www.asiainfo.com The statements in this news release contain forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that involve risks and uncertainties that could cause actual results to differ from anticipated results. Further information on risk factors that could affect AsiaInfo's results of operation are detailed in AsiaInfo's registration statement, as filed with the Securities and Exchange Commission. A copy of the registration statement, including exhibits, may be reviewed at the Commission's public reference room at Judiciary judiciary Branch of government in which judicial power is vested. The principal work of any judiciary is the adjudication of disputes or controversies. Regulations govern what parties are allowed before a judicial assembly, or court, what evidence will be admitted, what Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. The registration statement and other company filings can also be reviewed by accessing the Commission's Internet site at http://www.sec.gov, which contains reports, proxy and information statements and other information regarding registrants that file electronically with the Commission.
ASIAINFO HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands of US$)
Three Months Ended Year Ended
Dec 31, Dec 31,
2000 1999 2000 1999
Revenues
Network solutions 38,599 10,113 159,505 53,786
Software license 5,413 1,852 16,558 6,494
Total revenues 44,012 11,965 176,063 60,280
Cost of revenues
Network solutions 33,088 8,427 144,654 41,959
Software license 15 1 44 4
Total cost of
revenues 33,104 8,428 144,698 41,963
Gross profit 10,908 3,537 31,365 18,317
Gross margin 25% 30% 18% 30%
Operating expenses
Sales and
marketing 6,443 3,900 19,734 8,768
General and
administrative 3,368 1,780 12,642 8,167
Research and
development 1,541 845 5,974 2,838
Amortization
of deferred stock
compensation 458 698 2,209 3,507
Total operating
expenses 11,810 7,223 40,559 23,281
(Loss) income from
operations (902) (3,686) (9,194) (4,964)
Other income
(expenses)
Interest income 2,416 328 7,919 827
Interest expense (138) (166) (1,033) (617)
Other income, net (80) (181) (272) 143
Total other income,
net 2,198 (19) 6,614 352
Income before income
taxes and minority
interests 1,296 (3,705) (2,579) (4,612)
Income tax 286 86 218 383
Minority interests 13 32 84
Equity in loss of
affiliate (26) 0 (35)
Net (loss) income 1,024 (3,817) (2,766) (4,946)
Net (loss) income
per share
Basic 0.03 (0.23) (0.07) (0.34)
Diluted
0.02 (0.23) (0.07) (0.34)
Shares used in
computation
Basic 40,556,680 16,612,628 37,239,649 14,630,145
Diluted 44,190,092 16,612,628 37,239,649 14,630,145
Segment information
Network solutions net
of hardware cost 8,659 4,621 28,020 18,727
Software license 5,413 1,852 16,558 6,494
Consolidated revenues
net of hardware cost 14,072 6,473 44,578 25,221
Consolidated cost of
sales net of
hardware cost 3,164 2,936 13,214 6,904
Consolidated gross
margin 10,908 3,537 31,365 18,317
ASIAINFO HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In US$)
Dec 31, 2000 Dec 31, 1999
ASSETS
Current Assets
Cash and cash equivalents 48,833,956 25,403,884
Restricted cash 26,733,179 12,189,794
Short term investment 110,400,000
Accounts receivable, trade (net
of allowance for doubtful accounts
of $640,269 and $545,013 at Dec 31,
1999 and Dec 31, 2000 respectively) 55,597,496 21,928,036
Inventories 8,876,010 2,908,426
Other current assets 3,749,257 2,342,433
Total current assets 254,189,898 64,772,573
Property, plant, and equipment-net 6,339,751 2,183,545
Other assets 3,473,417 4,470,861
Total assets 264,003,066 71,426,979
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Short-term bank loans 20,644,834 9,698,882
Accounts payable 42,037,151 11,867,188
Accrued employee benefit 10,019,624 4,810,650
Taxes payable 2,216,823 2,475,505
Deferred Revenue 12,501,524 495,470
Other current liabilities 7,785,695 2,291,113
Total current liabilities 95,205,651 31,638,808
Minority interest 188,044
Stockholders' Equity:
Convertible preferred stock:
Series A: 3,000,000 shares 0 21,609
authorized; $0.01 par value;
2,160,864 shares issued and
outstanding at December 31,1999;
0 at December 31, 2000
Series B: 5,000,000 shares 0 26,304
authorized at Dec 31, 1999;
$0.01 par value; 2,630,425
shares issued and outstanding
at December 31,1999; 0
at December 31,2000
Common stock, 50,000,000 shares 408,229 255,321
authorized; $0.01 par value, shares
issued and outstanding: 1999,
25,532,144; December 31, 2000
40,822,940
Additional paid-in capital 175,370,544 46,118,424
Deferred stock compensation (1,655,821) (3,865,373)
Retained earnings (accumulated
deficit) (5,530,600) (2,764,854)
Accumulated other comprehensive
income (loss) 17,019 (3,260)
Total stockholders' equity 168,609,371 39,788,171
Total Liabilities and Stockholders'
Equity 264,003,066 71,426,979
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion