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April 12, 2006
For quarter ending 12/31/05
Overview: Positive earnings and increased cash position offset by CDC Software component showing very slow growth revenue growth despite claiming 75 new customers in quarter. China.com component growing rapidly, but on small base. Reiterated plan to make CDC Software a stand-alone company.
Basic data: Net income (GAAP) of $1 million. Cash increased $5.2 million to $217.7 million.
Revenues of $62.3 million, up 13% from prior year and up slightly from $61.9 million in the prior quarter, but still under the 2nd quarter 2005 revenues of $64.6 million. Total 2005 revenues of $245 million.
Quarter software revenue was $50.6 million. This is up only 2% from year-earlier. China.com revenue was $11.7 million, up 112% from year-earlier.
EBITDA of 5.4 million.
It should be noted that CDC Software license and maintenance revenues were down, offset by increased consulting and services revenue (compared to year-earlier). 40% of license revenue was from new customers.
Guidance: 1st quarter CDC Software component revenues of $52.3 o $52.6 million. This is an historically slow quarter, so amount is still 12% from year-earlier. For the full year 2006 for CDC Corporation (CHINA) guidance is $283-$290 revenues and $30.9 to 32.1 net income (non-GAAP).
Q&A: Basis of aggressive outlook: agrees is aggressive. With lower costs believes can drive sales. Believes is now best-regarded industry-specific CRM vender. Homebuilding, manufacturing, and finance. Beat out Siebel and Onyx in for one contract recently and had customer up and running in only 3 months. Looking at discrete manufacturing (as oppose to current focus in process manufacturing) but many vendors in that space. Software-as-service (SOA) plan: JRJ acquisition going well as sales-force is trained to add this option. Believes will also be selling appliances.
Still plans to target growth in managing software outsourcing services. Recognizes importance of size in Enterprise software market.
Newly-achieved profitability is largely due to reduced expenses in CDC components.
Onyx: is in communication with Onyx's banker.
Disclaimer: Our analyst summaries may include both our condensations of statements made by company representatives and our own analysis. They are not covered by any warranty. We cannot guarantee anything said by company representatives is true. Before making or terminating an investment you should always verify any factual basis of your decision from multiple independent sources.