AsiaInfo Reports Strong Second Quarter Results; Software Revenue up 148% Sequentially; Net Income of $0.01 a Share; Accelerated Growth Further Solidifies Company's Leading Market Position.Business Editors SAN FRANCISCO--(BUSINESS WIRE)--July 25, 2000 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 total Internet infrastructure solutions and software products in China, today announced its second quarter results for the quarter ended June 30, 2000. The company reported second quarter 2000 revenues net of hardware costs of US$11.7 million, representing a 52% increase over net revenues of US$7.6 million in the comparable second quarter of 1999 and a 114% sequential increase over the first quarter of 2000. Net income was $0.01 per share for the second quarter of 2000, or US$0.4 million compared to net income of $0.03 per share on a pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma basis, or US$1.3 million in the same quarter of 1999. Net income increased 108% sequentially over last quarter's loss of US$4.6 million, largely driven by robust software revenue growth and an increase in interest income generated from AsiaInfo's solid cash position. The software revenue in the second quarter was US$4.4 million, a 172% increase over US$1.63 million in the same quarter of 1999 and a 148% sequential growth over US$1.8 million in the quarter ended March 31, 2000. Software revenue represented 38% of total net revenues after hardware cost, compared to 21% of total net revenue in the second quarter of 1999. Gross revenues for the second quarter of 2000 were US$51.1 million, representing an increase of 161% over gross revenues of US$19.5 million in the same period in 1999 and a sequential growth rate of 122% over the first quarter of 2000. As gross revenue includes the cost of hardware equipment for Internet backbone (communications, networking) Internet backbone - High-speed networks that carry Internet traffic. These communications networks are provided by companies such as AT&T, GTE, IBM, MCI, Netcom, Sprint, UUNET and consist of high-speed links in the T1, T3, OC1 and OC3 ranges. construction projects that is passed on to the customer, gross revenue will fluctuate with the timing of equipment delivery. Hence, the increase in gross revenue and the corresponding lower gross margins in network solutions during the second quarter are largely attributable to the high hardware pass through costs related to the 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. backbone construction project. "Our solid performance this quarter demonstrates our continued success in executing on our proven growth strategy in the very fast growing Chinese Internet infrastructure market," said James Ding, Chief Executive Officer of AsiaInfo Holdings Inc. "The strong results in our software business further validates our ability to leverage our network solutions projects, strategically positioning us to meet the future software needs of our customers." Ding continued, "While we delivered a strong quarter, we believe that there is tremendous opportunity to expand our business into new areas of strategic importance, such as an application service provider model. In order to capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. this growth opportunity, we will accelerate our investment in the ASP asp, popular name for several species of viper, one of which, the European asp (Vipera aspis), is native to S Europe. It is also a name for the Egyptian cobra (Naja haja). model in the third and fourth quarters of this year. As a result, we expect to incur To become subject to and liable for; to have liabilities imposed by act or operation of law. Expenses are incurred, for example, when the legal obligation to pay them arises. An individual incurs a liability when a money judgment is rendered against him or her by a court. losses for the latter half of 2000 due to this new investment. We remain confident that we will achieve profitability by the second half of 2001." Quarterly Highlights Software Contract Wins During the quarter, AsiaInfo had significant billing software (AIOBS) contract wins from Zhejiang Telecom and Shandong Telecom, two of the largest provincial telecom carriers in the China Telecom group. AsiaInfo also expanded its partnership with one of the largest Internet carriers, 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. (CNC (Computerized Numerical Control) See numerical control. CNC - Collaborative Networked Communication ), to include a user-license based contract for its voice over IP (VoIP) customer care and billing software. "Our continued success in capturing the business of major telecom carriers further demonstrates our undisputed leadership position in the Internet billing software market in China," commented Ding. "We have successfully established ourselves as the leading provider of IP billing software for all the largest telecom carriers in China, including China Telecom, China Unicom, China Mobile, China Netcom and others." Additional customer care and billing contract wins came from new market players such as Shenzhen Xiang Long Communication Co, Ltd. In total, AsiaInfo sold 1.125 million licenses for its customer care and billing software during the second quarter. During the second quarter, AsiaInfo announced three new contract wins for its messaging software, AIMC AIMC Associazione Italiana Maestri Cattolici (Italian Association of Catholic Teachers) AIMC Associate of the Inner Magic Circle AIMC Ancient Iron Motorcycle Club AIMC Army Information Management Committee . 8848.net, China's largest e-commerce portal, People's Daily The People's Daily (Chinese: 人民日报; Pinyin: Rénmín Rìbào), a daily newspaper, is the organ of the Central Committee of the Communist Party of China, published worldwide Online, one of China's biggest news web sites and Xin Hua News Agency, China's largest news and information gathering and distribution center have all signed on for installation of the software. AIMC licenses sold to these three parties will provide more than 2.5 million free mailboxes. Additionally, AsiaInfo sold one million software licenses In computing, software that is copyrighted and licensed under a software license is done under a variety of licensing schemes. For end-users there are proprietary licenses and there are free software licenses, and there are proprietary Within these schemes are further classifications. to FM365.com, a popular web portal See portal. operated by Legend Holdings. In total, AsiaInfo sold 5.5 million messaging software licenses during the second quarter. This tremendous momentum in AsiaInfo's software business helped drive software revenues for the quarter up 148% sequentially. Strategic Alliances AsiaInfo and Redback Networks Redback Networks is a telecommunications equipment company. History Redback Networks was founded in August, 1996. Redback is an ERICSSON subsidiary since the beginning of 2007 (was previously traded on NASDAQ under the symbol RBAK). (Nasdaq: RBAK RBAK Redback Networks Inc. (stock abbreviation, AMEX) rBAK Remote Backup ) announced a strategic alliance to speed and simplify the rollout of broadband services See broadband and broadband service provider. throughout China. Through this agreement, AsiaInfo will integrate its customer management and billing software with Redback's Subscriber Management System to provide a comprehensive broadband broadband Term describing the radiation from a source that produces a broad, continuous spectrum of frequencies (contrasted with a laser, which produces a single frequency or very narrow range of frequencies). solution to ISPs, carriers and cable operators in China. Additionally, AsiaInfo announced the successful integration of AsiaInfo's billing software for IP telephony The two-way transmission of voice over a packet-switched IP network, which is part of the TCP/IP protocol suite. The terms "IP telephony" and "voice over IP" (VoIP) are synonymous. with Huawei Technologies' network access gateway. The bundling of these two products will provide an end-to-end solution (jargon) end-to-end solution - (E2ES) A term that suggests that the supplier of an application program or system will provide all the hardware and/or software components and resouces to meet the customer's requirement and no other supplier need be involved. Compare: turn-key solution. for IP Telephony service providers as well as value added Value Added The enhancement a company gives its product or service before offering the product to customers. Notes: This can either increase the products price or value. VoIP services to the growing Internet market in China. Application Service Provider Model AsiaInfo will continue to expand its software business strategy in the third quarter by moving to an application service provider (ASP) model, where it would install its software on local Internet data centers to provide its service on a hosted basis. "Our ASP strategy fully leverages our existing software products without heavy up-front investment, limiting our downside risk Downside Risk An estimation of a security's potential to suffer a decline in price if the market conditions turn bad. Notes: You can think of this as an estimate of the amount that you could lose on a stock or other investment. while increasing the potential for higher recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. revenues with this highly scalable new business model," said James Ding. "We are currently completing our market study and entering the initial launch phase for the new services." James Ding summarized, "We are extremely excited to see the investment in Internet infrastructure rapidly increasing from both existing and new players in the China Internet market. We firmly believe that AsiaInfo will continue to be the primary beneficiary beneficiary Person or entity (e.g., a charity or estate) that receives a benefit from something (e.g., a trust, life-insurance policy, or contract). A primary beneficiary receives proceeds from a trust or insurance policy before any other. of China's Internet infrastructure build-out." About AsiaInfo Holdings, Inc. AsiaInfo Holdings, Inc. (Nasdaq: ASIA) is a leading provider of Internet infrastructure, total solutions and software in China, one of the world's fastest growing Internet markets. 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. in China 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. AsiaInfo develops, markets and supports real time, scalable and adaptable a·dapt·a·ble adj. Capable of adapting or of being adapted. a·dapt  a·bil proprietary Internet software
solutions tailored to meet the needs of clients in China. For more
information about AsiaInfo, please visit http://www.asiainfo.com.Second Quarter 2000 Conference Call AsiaInfo will host a conference call to discuss second quarter earnings at 8:00 a.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT on Tuesday, July 25, 2000. To participate on the call, please dial 973-628-6885. A replay of the call will be available until August 1st by dialing 877-318-5458. 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 above. 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.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands of US$)
Three Months Ended June 30,
2000 1999
Revenues:
Network solutions 46,649 17,921
Software license 4,442 1,625
Total revenues 51,091 19,546
Cost of revenues:
Network solutions 43,099 13,869
Software license 1 0
Total cost of revenues 43,100 13,869
Gross margin 7,991 5,677
GP Ratio 16% 29%
Operating expenses:
Sales and marketing 4,138 1,426
General and administrative 3,403 1,842
Research and development 1,594 679
Amortization of deferred
stock compensation 586 373
Total operating expenses 9,720 4,320
Income (loss) from operations (1,729) 1,357
Other income (expenses):
Interest income 2,687 138
Interest expense (341) (159)
Other income, net (288) (9)
Total other income, net 2,058 (30)
Income before income tax
and minority interests 329 1,327
Income tax (105) 106
Minority interests 0 31
Net (loss) income 434 1,252
Net (loss) income per share
Basic 0.01 0.09
Diluted 0.01 0.04
Shares used in computation
Basic 39,738,567 14,096,435
Diluted 47,020,308 33,446,190
Segment information
Network solutions net
of hardware cost 7,294 6,037
Software license 4,442 1,625
Consolidated revenues net
of hardware cost 11,736 7,663
Consolidated cost of sales
net of hardware cost 3,745 1,985
Consolidated gross margin 7,991 5,677
CONDENSED CONSOLIDATED BALANCE SHEETS
(In US$)
June 30, 2000 Dec 31, 1999
ASSETS
Current Assets:
Cash and cash equivalents 30,323,579 25,403,884
Restricted cash 26,169,421 12,189,794
Short term investment 98,691,500
Accounts receivable, trade
(net of allowance for doubtful
accounts of $640,269 and
$252,769 at Dec. 31, 1999 and
June 30, 2000 respectively) 60,342,488 21,928,036
Inventories 14,492,631 2,908,426
Other current assets 3,210,779 2,342,433
Total current assets 233,230,398 64,772,573
Property, plant, and equipment-net 4,030,959 2,183,545
Other assets 3,986,669 4,470,861
Total assets 241,248,026 71,426,979
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Short-term bank loans 17,625,030 9,698,882
Accounts payable 43,418,120 11,867,188
Accrued employee benefit 8,075,218 4,810,650
Taxes payable 1,861,654 2,475,505
Deferred Revenue 3,061,655 495,470
Other current liabilities 2,896,194 2,291,113
Total current liabilities 76,937,871 31,638,808
Stockholders' Equity:
Convertible preferred stock:
Series A: 3,000,000 shares
authorized; $0.01 par value;
2,160,864 shares issued and
outstanding at December 31, 1999;
0 at June 30, 2000 0 21,609
Series B: 5,000,000 shares
authorized at Dec. 31, 1999; $0.01
par value; 2,630,425 shares issued
and outstanding at December 31, 1999;
0 at June 30, 2000 0 26,304
Common stock, 50,000,000 shares
authorized; $0.01 par value,
shares issued and outstanding:
1999, 25,532,144; June 30, 2000
39,812,780 398,128 255,321
Additional paid-in capital 173,444,303 46,118,424
Deferred stock compensation (2,580,767) (3,865,373)
Retained earnings (accumulated deficit) (6,969,642) (2,764,854)
Accumulated other
comprehensive income (loss) 18,133 (3,260)
Total stockholders' equity 164,310,155 39,788,171
Total Liabilities
and Stockholders' Equity 241,248,026 71,426,979
|
|
||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion