Acquity Group Limited Reports Results for Third Quarter and Nine Months Ended September 30, 2012
- Third Quarter Revenues Increased by 26.0% to $37.3 Million -
- Nine Months Revenues up 41.1% to $107.2 million -
- Third Quarter IFRS Operating Profit Increased by 15.1% to $6.4 Million -
- Nine Months IFRS Operating Profit up 51.5% to $17.7 million -
CHICAGO, Nov. 8, 2012 /PRNewswire/ -- Acquity Group Limited ("Acquity Group" or the "Company") (NYSE MKT: AQ) today reported the following unaudited financial results for the third quarter and nine months ended September 30, 2012.
Financial highlights for the three month period ended September 30, 2012, compared to the three month period ended September 30, 2011
- Revenues increased by $7.7 million, or 26.0%, to $37.3 million, compared to $29.6 million for the three month period ended September 30, 2011.
- IFRS operating profit increased by $0.8 million, or 15.1%, to $6.4 million, or 17.2% of revenues, compared to $5.6 million, or 18.8% of revenues, for the three month period ended September 30, 2011.
- IFRS operating profit, excluding costs associated with our recent initial public offering and amortization of purchased intangible assets, increased by $0.1 million, or 1.3%, to $7.1 million, or 18.9% of revenues, compared to $7.0 million, or 23.5% of revenues, for the three month period ended September 30, 2011. Refer to the "Reconciliation of Non-IFRS Financial Measures to IFRS Profit" in the tables that follow for additional details for all non-IFRS financial measures.
- IFRS profit attributable to equity holders of the Company increased by $0.1 million, or 1.0%, to $3.2 million, or $0.14 per American depositary share ("ADS"), compared to $3.1 million, or $0.17 per ADS for the three month period ended September 30, 2011.
- Non-IFRS adjusted profit attributable to equity holders of the Company decreased by $0.7 million, or 17.1%, to $3.6 million, or $0.15 per ADS, compared to $4.3 million, or $0.23 per ADS for the three month period ended September 30, 2011.
- Non-IFRS adjusted EBITDA increased by $0.1 million, or 2.4%, to $7.6 million for the three month period ended September 30, 2012, compared to $7.5 million for the three month period ended September 30, 2011.
- As of September 30, 2012, the Company had unrestricted cash and cash equivalents of $31.3 million.
Financial highlights for the nine month period ended September 30, 2012, compared to the nine month period ended September 30, 2011
- Revenues increased by $31.2 million, or 41.1%, to $107.2 million, compared to $76.0 million for the nine month period ended September 30, 2011.
- IFRS operating profit increased by $6.0 million, or 51.5%, to $17.7 million, or 16.5% of revenues, compared to $11.7 million, or 15.4% of revenues, for the nine month period ended September 30, 2011.
- IFRS operating profit, excluding costs associated with our recent initial public offering and amortization of purchased intangible assets, increased by $7.3 million, or 50.8%, to $21.7 million, or 20.3% of revenues, compared to $14.4 million, or 19.0% of revenues, for the nine month period ended September 30, 2011.
- IFRS profit attributable to equity holders of the Company increased by $1.4 million, or 20.2%, to $8.2 million, or $0.38 per ADS, compared to $6.8 million, or $0.36 per ADS for the nine month period ended September 30, 2011.
- Non-IFRS adjusted profit attributable to equity holders of the Company increased by $2.6 million, or 29.9%, to $11.4 million, or $0.53 per ADS, compared to $8.8 million, or $0.47 per ADS for the nine month period ended September 30, 2011.
- Non-IFRS adjusted EBITDA increased by $7.8 million, or 50.4%, to $23.4 million for the nine month period ended September 30, 2012, compared to $15.6 million for the nine month period ended September 30, 2011.
"It was yet another strong quarter for the Company in the face of challenging macro-economic conditions for our clients," said Christopher Dalton, President and Chief Executive Officer of Acquity Group. "Our deep, and strengthening, work with recognized global clients is a critical component of our success. We have been able to sustain our current level of growth with a diligent focus on executing our business strategy. We are capturing market share in both the business-to-consumer and business-to-business spaces and our clients continue to turn to Acquity Group to help them reinvent their digital Brand e-Commerce™ business models in the face of secular industry changes, changing demographics, and a new era of mobile, social, analytics and digital technologies. "
Paul Weinewuth, Chief Financial Officer of Acquity Group, said, "Our utilization remains strong, driven by deepened client relationships and robust interest in our expertise in Brand eCommerce™ and Digital Marketing services. Our performance strength continues to bump up against continued economic headwinds, and as a result we are maintaining a cautious outlook for the fourth quarter. We are also looking towards conversion to U.S. GAAP next year, which will also include implementation of a new enterprise resource planning (ERP) system. In addition, we are looking to simplify our corporate structure by exploring strategic options in relation to our joint ventures."
Recent Business Highlights
Following are some key third quarter highlights:
- Marked thirteenth consecutive quarter of positive sequential quarterly revenue growth
- Significant web site launches that included: Avery Dennison, Godiva, Epicurious, Exemplis, Kennametal, and Dun and Bradstreet
- Billable headcount increased 40% year-over- year
- Named the ninth largest digital agency for U.S. mobile revenue by Advertising Age
- Cited as an emerging example of a "business transformer" in the July 2012 Forrester Research, Inc. report, "The New Interactive Agency Landscape"
Third Quarter 2012 Financial Results
Three Month Period Ended September 30, 2012 Compared to Three Month Period Ended September 30, 2011
Revenues increased by $7.7 million, or 26.0%, to $37.3 million for the three month period ended September 30, 2012, from $29.6 million for the three month period ended September 30, 2011. Revenues continued to grow due to strong demand seen in the market place for the Company's expertise and focused approach to delivering customer value.
Cost of revenues increased by $5.3 million to $21.0 million for the three month period ended September 30, 2012, from $15.7 million for the three month period ended September 30, 2011, which was primarily driven by continued organic growth of our staff to accommodate the demand for our services. These costs increased as a percentage of revenues to 56.4% for the three month period ended September 30, 2012, from 53.2% for the three month period ended September 30, 2011.
Selling and marketing expenses increased by $0.3 million to $2.4 million for the three month period ended September 30, 2012, from $2.1 million for the three month period ended September 30, 2011. These costs decreased as a percentage of revenues to 6.3% for the three month period ended September 30, 2012, from 7.1% for the three month period ended September 30, 2011. This improvement was the result of leveraging our experienced sales force and entering into engagements that fit our growth model.
Administrative expenses increased by $2.1 million to $7.5 million for the three month period ended September 30, 2012, from $5.4 million for the three month period ended September 30, 2011. These costs increased as a percentage of revenues to 20.0% for the three month period ended September 30, 2012, from 18.3% for the three month period ended September 30, 2011. The increase was primarily due to an increase in operations headcount in order to support the growth of our business.
Equity in losses of joint ventures was $0.3 million for the three month period ended September 30, 2012, compared to $0.4 million for the three month period ended September 30, 2011.
Income tax expense was $2.9 million and $2.2 million for the three month periods ended September 30, 2012 and September 30, 2011, respectively. Our effective tax rate was 48.5% and 41.8% for the three month periods ended September 30, 2012 and September 30, 2011, respectively. The increase for the three month period ended September 30, 2012, compared to the three month period ended September 30, 2011 was primarily attributable to losses from non-U.S. operations for which no tax benefit was available and an increase in state taxes.
Nine Month Period Ended September 30, 2012 Compared to Nine Month Period Ended September 30, 2011
Revenues increased by $31.2 million, or 41.1%, to $107.2 million for the nine month period ended September 30, 2012, from $76.0 million for the nine month period ended September 30, 2011. Revenues increased as a result of our continued focus on being one of the best providers in Brand eCommerce™ and Digital Marketing service capabilities and our ability to continue to secure new accounts that are committed to the digital channel.
Cost of revenues increased by $16.3 million to $59.1 million for the nine month period ended September 30, 2012, from $42.8 million for the nine month period ended September 30, 2011, which was primarily driven by organic growth of our staff to accommodate the demand for our services. These costs decreased as a percentage of revenues to 55.1% for the nine month period ended September 30, 2012, from 56.3% for the nine month period ended September 30, 2011.
Selling and marketing expenses increased by $1.2 million to $6.8 million for the nine month period ended September 30, 2012, from $5.6 million for the nine month period ended September 30, 2011. These costs decreased as a percentage of revenues to 6.3% for the nine month period ended September 30, 2012, from 7.4% for the nine month period ended September 30, 2011. This improvement was the result of leveraging our experienced sales force and entering into engagements that fit our growth model.
Administrative expenses increased by $6.6 million to $21.6 million for the nine month period ended September 30, 2012, from $15.0 million for the nine month period ended September 30, 2011. These costs increased modestly as a percentage of revenues to 20.1% for the nine month period ended September 30, 2012, from 19.8% for the nine month period ended September 30, 2011. The increase was primarily due to an increase in operations headcount in order to support the growth of our business.
Equity in losses of joint ventures was $1.2 million for the nine month period ended September 30, 2012, compared to $0.5 million for the nine month period ended September 30, 2011.
Income tax expense was $8.5 million and $4.5 million for the nine month periods ended September 30, 2012 and September 30, 2011, respectively. Our effective tax rate was 51.3% and 40.6% for the nine month periods ended September 30, 2012 and September 30, 2011, respectively. The increase for the nine month period ended September 30, 2012, compared to the nine month period ended September 30, 2011 was primarily attributable to the impact of non-deductible costs related to our initial public offering (IPO), losses from non-U.S. operations for which no tax benefit was available and an increase in state taxes.
Fourth Quarter 2012 Outlook
The Company currently expects the following financial results for the fourth quarter of 2012:
- Revenues are expected to be in the range of $36 million to $40 million; and
- IFRS operating profit margin, excluding amortization of purchased intangible assets, is expected to range from 14% to 16%.
Webcast and Conference Call
A conference call and webcast have been scheduled for 8:30 a.m. EST today to discuss these results. Details of the conference call are as follows:
| Date: |
Thursday, November 8, 2012 |
| Time: |
8:30 a.m. EST (please dial in by 8:15 a.m.) |
| Dial-In #: |
(800)920-8624 U.S. & Canada |
| +1(617) 597-5430 International |
|
| Confirmation code: |
33160322 |
Alternatively, the conference call will be available via webcast at www.acquitygroup.com by clicking on the "Investors" tab.
Non-IFRS Financial Measures
Acquity Group provides non-IFRS financial measures to complement reported IFRS results. Management believes these measures help illustrate underlying trends in the Company's business and uses the measures to establish budgets and operational goals, communicated internally and externally, for managing the Company's business and evaluating its performance. The Company anticipates that it will continue to report both IFRS and certain non-IFRS financial measures in its financial results, including non-IFRS results that exclude interest, income tax provisions, depreciation and amortization, costs associated with its initial public offering, equity in losses of its joint ventures, acquisition costs and other related charges, among other costs. Consequently, Acquity Group's non-IFRS financial measures should not be evaluated in isolation or as a substitute for IFRS measures, but, rather, should be considered together with its consolidated financial statements, which are prepared according to IFRS.
Special Note Regarding Forward-Looking Statements
This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "aim," "anticipate," "believe," "confident," "continue," "estimate," "expect," "future," "intend," "is currently reviewing," "it is possible," "likely," "may," "plan," "potential," "will" or other similar expressions or the negative of these words or expressions. The Company has based these forward-looking statements largely on its current expectations and projections about future events and financial trends that it believes may affect its financial condition, results of operations, business strategy and financial needs. In particular, the section entitled "Fourth Quarter 2012 Outlook" in this announcement consists of forward-looking statements. Statements that are not historical facts, including statements about the Company's beliefs and expectations, are forward-looking statements and are subject to change, and such change may be material and may have a material adverse effect on the Company's financial condition and results of operations for one or more periods. Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained, either expressly or impliedly, in any of the forward-looking statements in this announcement. Potential risks and uncertainties include, but are not limited to, the risks outlined in the Company's Registration Statement on Form F-1 and other documents filed with the U.S. Securities and Exchange Commission. Unless otherwise specified, all information provided in this announcement and in the attachments is as of the date of this announcement, and the Company does not undertake any obligation to update any such information, except as required under applicable law.
About Acquity Group Limited
Acquity Group Limited is a leading Brand eCommerce™ and Digital Marketing company that leverages the Internet, mobile devices and social media to enhance its clients' brands and e-commerce performance. It is the digital agency of record for a number of well-known global brands in multiple industries. Acquity Group Limited has served more than 500 companies and their global brands through eleven offices in North America and three offices in Asia. For more information about Acquity Group Limited, visit www.acquitygroup.com.
| Acquity Group Limited |
|||||||||||||
| Consolidated Statements of Comprehensive Income - Unaudited |
|||||||||||||
| (Amounts in thousands, except per share data) |
|||||||||||||
| Three Month Periods Ended |
Nine Month Periods Ended |
||||||||||||
| September 30, 2012 |
September 30, 2011 |
September 30, 2012 |
September 30, 2011 |
||||||||||
| Revenues |
$ 37,268 |
100.0% |
$ 29,569 |
100.0% |
$ 107,223 |
100.0% |
$ 76,014 |
100.0% |
|||||
| Cost of revenues |
21,031 |
56.4% |
15,728 |
53.2% |
59,060 |
55.1% |
42,813 |
56.3% |
|||||
| Gross profit |
16,237 |
43.6% |
13,841 |
46.8% |
48,163 |
44.9% |
33,201 |
43.7% |
|||||
| Selling and marketing expenses |
2,361 |
6.3% |
2,107 |
7.1% |
6,800 |
6.3% |
5,625 |
7.4% |
|||||
| Administrative expenses |
7,470 |
20.0% |
5,410 |
18.3% |
21,550 |
20.1% |
15,044 |
19.8% |
|||||
| Costs associated with initial public offering |
5 |
0.0% |
765 |
2.6% |
2,120 |
2.0% |
853 |
1.1% |
|||||
| Operating profit |
6,401 |
17.2% |
5,559 |
18.8% |
17,693 |
16.5% |
11,679 |
15.4% |
|||||
| Finance income |
12 |
0.0% |
64 |
0.2% |
9 |
0.0% |
33 |
0.0% |
|||||
| Equity in losses of joint ventures |
(331) |
(0.9%) |
(441) |
(1.5%) |
(1,215) |
(1.1%) |
(530) |
(0.7%) |
|||||
| Profit before tax |
6,082 |
16.3% |
5,182 |
17.5% |
16,487 |
15.4% |
11,182 |
14.7% |
|||||
| Income tax expense |
2,947 |
7.9% |
2,166 |
7.3% |
8,457 |
7.9% |
4,540 |
6.0% |
|||||
| Profit |
3,135 |
8.4% |
3,016 |
10.2% |
8,030 |
7.5% |
6,642 |
8.7% |
|||||
| Profit/(loss) attributable to: |
|||||||||||||
| Equity holders of the Company |
$ 3,177 |
8.5% |
$ 3,145 |
10.6% |
$ 8,176 |
7.6% |
$ 6,803 |
8.9% |
|||||
| Non-controlling interests |
(42) |
(0.1%) |
(129) |
(0.4%) |
(146) |
(0.1%) |
(161) |
(0.2%) |
|||||
| Profit |
$ 3,135 |
8.4% |
$ 3,016 |
10.2% |
$ 8,030 |
7.5% |
$ 6,642 |
8.7% |
|||||
| Other comprehensive income: |
|||||||||||||
| Profit |
3,135 |
8.4% |
3,016 |
10.2% |
8,030 |
7.5% |
6,642 |
8.7% |
|||||
| Currency translation differences |
(44) |
(0.1%) |
35 |
0.1% |
(111) |
(0.1%) |
73 |
0.1% |
|||||
| Comprehensive profit |
$ 3,091 |
8.3% |
$ 3,051 |
10.3% |
$ 7,919 |
7.4% |
$ 6,715 |
8.8% |
|||||
| Total comprehensive profit attributable to: |
|||||||||||||
| Equity holders of the Company |
$ 3,133 |
8.4% |
$ 3,180 |
10.8% |
$ 8,065 |
7.5% |
$ 6,876 |
9.0% |
|||||
| Non-controlling interests |
(42) |
(0.1%) |
(129) |
(0.4%) |
(146) |
(0.1%) |
(161) |
(0.2%) |
|||||
| Comprehensive profit |
$ 3,091 |
8.3% |
$ 3,051 |
10.3% |
$ 7,919 |
7.4% |
$ 6,715 |
8.8% |
|||||
| Profit per share attributable to equity holders of the Company: |
|||||||||||||
| American depositary shares (1) |
$ 0.14 |
$ 0.17 |
$ 0.38 |
$ 0.36 |
|||||||||
| Ordinary shares |
$ 0.07 |
$ 0.08 |
$ 0.19 |
$ 0.18 |
|||||||||
| Shares used in computing profit per share: |
|||||||||||||
| American depositary shares (1) |
23,516.4 |
18,738.6 |
21,476.3 |
18,738.6 |
|||||||||
| Ordinary shares |
47,032.8 |
37,477.3 |
42,952.5 |
37,477.3 |
|||||||||
| (1) |
On May 2, 2012, the Company completed the initial public offering of its American depositary shares representing ordinary shares and is now listed on NYSE MKT under the stock symbol "AQ." Pursuant to our registration statement filed with the U.S. Securities and Exchange Commission, each American depositary share presented in the consolidated statement of comprehensive income represents two ordinary shares outstanding. |
||||||||||||
| Acquity Group Limited |
||||||
| Consolidated Statements of Financial Position - Unaudited |
||||||
| (Amounts in thousands) |
||||||
| September 30, 2012 |
December 31, 2011 |
|||||
| Assets |
||||||
| Non-current assets |
||||||
| Property and equipment, net |
$ 4,782 |
$ 3,648 |
||||
| Intangible assets |
24,493 |
26,428 |
||||
| Other non-current assets (1) |
4,844 |
74 |
||||
| Investment in joint ventures |
2,559 |
3,887 |
||||
| Deferred tax assets |
5,336 |
4,521 |
||||
| 42,014 |
38,558 |
|||||
| Current assets |
||||||
| Trade receivables |
27,901 |
19,906 |
||||
| Unbilled receivables |
11,514 |
8,056 |
||||
| Due from customers under fixed-price contracts |
371 |
456 |
||||
| Prepayments and other receivables |
1,842 |
3,096 |
||||
| Restricted cash |
- |
2,600 |
||||
| Cash and cash equivalents |
31,319 |
6,875 |
||||
| Total current assets |
72,947 |
40,989 |
||||
| Total assets |
$ 114,961 |
$ 79,547 |
||||
| Equity and liabilities |
||||||
| Equity |
||||||
| Issued capital |
$ 5 |
$ 4 |
||||
| Capital reserve |
96,577 |
71,030 |
||||
| Other comprehensive income/(losses) |
(43) |
68 |
||||
| Retained profit / (losses) |
763 |
(7,413) |
||||
| Equity attributable to equity holders of parent |
97,302 |
63,689 |
||||
| Non-controlling interests |
599 |
745 |
||||
| Total equity |
97,901 |
64,434 |
||||
| Non-current liabilities |
||||||
| Other non-current liabilities |
6,332 |
5,379 |
||||
| 6,332 |
5,379 |
|||||
| Current liabilities |
||||||
| Trade payables |
1,532 |
1,499 |
||||
| Other payables and accruals |
7,612 |
8,159 |
||||
| Due to customers under fixed-price contracts |
116 |
41 |
||||
| Accrued income taxes |
1,468 |
35 |
||||
| 10,728 |
9,734 |
|||||
| Total liabilities |
17,060 |
15,113 |
||||
| Total equity and liabilities |
$ 114,961 |
$ 79,547 |
||||
| (1) |
As of September 30, 2012, other non-current assets primarily consists of deposits for joint venture related to an additional investment in our Huaren Kudong Commercial Trading Co., Ltd. joint venture. We are awaiting approval from the Chinese government, at which time the funds will be reclassified to "Investment in joint ventures" on the consolidated statement of financial position. |
|||||
| Acquity Group Limited |
||||||||||
| Consolidated Statements of Changes in Equity - Unaudited |
||||||||||
| (Amounts in thousands) |
||||||||||
| Issued capital |
Capital reserve |
Other |
Retained profit/ |
Equity attributable |
Non-controlling |
Total equity |
||||
| As of 31 December 2010 |
$ 4 |
$ 71,030 |
$ - |
$ (16,020) |
$ 55,014 |
$ 983 |
$ 55,997 |
|||
| Profit/(loss) for the period |
1,420 |
1,420 |
(2) |
1,418 |
||||||
| Other comprehensive income |
5 |
5 |
2 |
7 |
||||||
| Total for the period |
- |
- |
5 |
1,420 |
1,425 |
- |
1,425 |
|||
| As of 31 March 2011 |
$ 4 |
$ 71,030 |
$ 5 |
$ (14,600) |
$ 56,439 |
$ 983 |
$ 57,422 |
|||
| Profit/(loss) for the period |
2,238 |
2,238 |
(30) |
2,208 |
||||||
| Other comprehensive income |
21 |
21 |
10 |
31 |
||||||
| Total for the period |
- |
- |
21 |
2,238 |
2,259 |
(20) |
2,239 |
|||
| As of 30 June 2011 |
$ 4 |
$ 71,030 |
$ 26 |
$ (12,362) |
$ 58,698 |
$ 963 |
$ 59,661 |
|||
| Profit/(loss) for the period |
3,145 |
3,145 |
(130) |
3,015 |
||||||
| Other comprehensive income |
23 |
23 |
12 |
35 |
||||||
| Total for the period |
- |
- |
23 |
3,145 |
3,168 |
(118) |
3,050 |
|||
| As of 30 September 2011 |
$ 4 |
$ 71,030 |
$ 49 |
$ (9,217) |
$ 61,866 |
$ 845 |
$ 62,711 |
|||
| Profit/(loss) for the period |
1,804 |
1,804 |
(111) |
1,693 |
||||||
| Other comprehensive income |
19 |
19 |
11 |
30 |
||||||
| Total for the period |
- |
- |
19 |
1,804 |
1,823 |
(100) |
1,723 |
|||
| As of 31 December 2011 |
$ 4 |
$ 71,030 |
$ 68 |
$ (7,413) |
$ 63,689 |
$ 745 |
$ 64,434 |
|||
| Profit/(loss) for the period |
3,845 |
3,845 |
(64) |
3,781 |
||||||
| Other comprehensive income |
2 |
2 |
2 |
|||||||
| Total for the period |
- |
- |
2 |
3,845 |
3,847 |
(64) |
3,783 |
|||
| As of 31 March 2012 |
$ 4 |
$ 71,030 |
$ 70 |
$ (3,568) |
$ 67,536 |
$ 681 |
$ 68,217 |
|||
| Profit/(loss) for the period |
1,154 |
1,154 |
(40) |
1,114 |
||||||
| Other comprehensive income |
(69) |
(69) |
(69) |
|||||||
| Issuance of American depositary shares, |
1 |
25,547 |
25,548 |
25,548 |
||||||
| Total for the period |
1 |
25,547 |
(69) |
1,154 |
26,633 |
(40) |
26,593 |
|||
| As of 30 June 2012 |
$ 5 |
$ 96,577 |
$ 1 |
$ (2,414) |
$ 94,169 |
$ 641 |
$ 94,810 |
|||
| Profit/(loss) for the period |
3,177 |
3,177 |
(42) |
3,135 |
||||||
| Other comprehensive income |
(44) |
(44) |
(44) |
|||||||
| Total for the period |
- |
- |
(44) |
3,177 |
3,133 |
(42) |
3,091 |
|||
| As of 30 September 2012 |
$ 5 |
$ 96,577 |
$ (43) |
$ 763 |
$ 97,302 |
$ 599 |
$ 97,901 |
|||
| (1) |
During the three month period ended June 30, 2012, the Company recorded an additional issued capital and capital reserve related to the issuance of the Company's IPO of American depositary shares, which began trading on NYSE MKT on April 27, 2012, and was offset by costs associated with the IPO in accordance with IFRS rules. |
|||||||||
| Acquity Group Limited |
|||||||||
| Consolidated Statements of Cash Flows - Unaudited |
|||||||||
| (Amounts in thousands) |
|||||||||
| Nine Month Periods Ended |
|||||||||
| September 30, 2012 |
September 30, 2011 |
||||||||
| Operating activities: |
|||||||||
| Profit before tax |
$ 16,487 |
$ 11,182 |
|||||||
| Adjustments to reconcile profit before tax to net cash flows from operating activities: |
|||||||||
| Non-cash: |
|||||||||
| Depreciation of property and equipment |
1,552 |
1,007 |
|||||||
| Amortization of intangible assets & straight-line rent |
2,033 |
1,983 |
|||||||
| Impairment loss of trade receivables |
180 |
- |
|||||||
| Finance costs |
(9) |
(33) |
|||||||
| Equity in losses of joint ventures |
1,215 |
530 |
|||||||
| Working capital adjustments: |
|||||||||
| Trade receivables and unbilled receivables |
(11,633) |
(9,028) |
|||||||
| Due from customers under fixed-price contracts |
85 |
(227) |
|||||||
| Prepayment and other receivables |
(432) |
(223) |
|||||||
| Trade payables |
33 |
(353) |
|||||||
| Other payables and accruals |
(538) |
237 |
|||||||
| Due to customers under fixed-price contracts |
75 |
8 |
|||||||
| Other non-current assets |
(8) |
(8) |
|||||||
| Income tax paid |
(5,675) |
(3,600) |
|||||||
| Net cash flows generated from operating activities |
3,365 |
1,475 |
|||||||
| Investing activities: |
|||||||||
| Purchase of property and equipment |
(2,686) |
(1,654) |
|||||||
| Purchase of intangible assets |
- |
(157) |
|||||||
| Decrease/(increase) in restricted cash |
2,600 |
- |
|||||||
| Investment in joint venture |
- |
(4,822) |
|||||||
| Loan receivable from officers of Acquity Group LLC |
- |
(4,193) |
|||||||
| Increase in deposits for joint venture (1) |
(4,762) |
- |
|||||||
| Loan to joint venture |
(270) |
(97) |
|||||||
| Net cash flows used in investing activities |
(5,118) |
(10,923) |
|||||||
| Financing activities: |
|||||||||
| Proceeds from issuance of American depositary shares |
28,667 |
- |
|||||||
| Payment of costs associated with initial public offering |
(2,470) |
(442) |
|||||||
| Net cash flows generated from/(used in) financing activities |
26,197 |
(442) |
|||||||
| Net increase/(decrease) in cash and cash equivalents |
24,444 |
(9,890) |
|||||||
| Cash and cash equivalents at the beginning of the period |
6,875 |
12,428 |
|||||||
| Cash and cash equivalents at the end of the period |
$ 31,319 |
$ 2,538 |
|||||||
| (1) |
For the nine month period ended September 30, 2012, the increase in deposits for joint venture relates to an additional investment in our Huaren Kudong Commercial Trading Co., Ltd. joint venture. We are awaiting approval from the Chinese government, at which time the funds will be reclassified to "Investment in joint ventures" on the consolidated statement of financial position. |
||||||||
| Acquity Group Limited |
|||||||||
| Reconciliation of Non-IFRS Financial Measures to IFRS Profit - Unaudited (1) |
|||||||||
| (Amounts in thousands, except per share data) |
|||||||||
| Three Month Periods Ended |
Nine Month Periods Ended |
||||||||
| September 30, 2012 |
September 30, 2011 |
September 30, 2012 |
September 30, 2011 |
||||||
| IFRS profit attributable to equity holders, as reported |
$ 3,177 |
$ 3,145 |
$ 8,176 |
$ 6,803 |
|||||
| Interest income net of interest expense |
(12) |
(64) |
(9) |
(33) |
|||||
| Income tax expense |
2,947 |
2,166 |
8,457 |
4,540 |
|||||
| Depreciation & amortization: |
|||||||||
| Property and equipment |
549 |
374 |
1,552 |
1,007 |
|||||
| Intangible assets |
645 |
638 |
1,935 |
1,888 |
|||||
| Costs associated with initial public offering (2) |
5 |
765 |
2,120 |
853 |
|||||
| Equity in losses of joint ventures |
331 |
441 |
1,215 |
530 |
|||||
| Non-IFRS adjusted EBITDA |
$ 7,642 |
$ 7,465 |
$ 23,446 |
$ 15,588 |
|||||
| Three Month Periods Ended |
Nine Month Periods Ended |
||||||||
| September 30, 2012 |
September 30, 2011 |
September 30, 2012 |
September 30, 2011 |
||||||
| IFRS operating profit, as reported |
$ 6,401 |
$ 5,559 |
$ 17,693 |
$ 11,679 |
|||||
| Costs associated with initial public offering, net (2) |
5 |
765 |
2,120 |
853 |
|||||
| Amortization of intangible assets related to acquisition |
645 |
638 |
1,935 |
1,888 |
|||||
| Non-IFRS operating profit |
$ 7,051 |
$ 6,962 |
$ 21,748 |
$ 14,420 |
|||||
| Three Month Periods Ended |
Nine Month Periods Ended |
||||||||
| September 30, 2012 |
September 30, 2011 |
September 30, 2012 |
September 30, 2011 |
||||||
| IFRS profit attributable to equity holders, as reported |
$ 3,177 |
$ 3,145 |
$ 8,176 |
$ 6,803 |
|||||
| Costs associated with initial public offering, net (2) |
5 |
765 |
2,120 |
853 |
|||||
| Amortization of intangible assets related to acquisition, net of tax |
381 |
389 |
1,142 |
1,152 |
|||||
| Non-IFRS adjusted profit |
$ 3,563 |
$ 4,299 |
$ 11,438 |
$ 8,808 |
|||||
| Adjusted profit per share attributable to equity holders of the Company: |
|||||||||
| American depositary shares (3) |
$ 0.15 |
$ 0.23 |
$ 0.53 |
$ 0.47 |
|||||
| Ordinary shares |
$ 0.08 |
$ 0.12 |
$ 0.27 |
$ 0.24 |
|||||
| Shares used in computing profit per share: |
|||||||||
| American depositary shares (3) |
23,516.4 |
18,738.6 |
21,476.3 |
18,738.6 |
|||||
| Ordinary shares |
47,032.8 |
37,477.3 |
42,952.5 |
37,477.3 |
|||||
| (1) |
The Company includes these adjusted calculations for the three and nine month periods ended September 30, 2012 and September 30, 2011 because management believes they are useful to investors in that they provide for greater transparency with respect to supplemental information used by management in its financial and operational decision making. |
||||||||
| Accordingly, the Company believes that the presentation of this analysis, when used in conjunction with IFRS financial measures, is a useful financial analysis tool that can assist investors in assessing the Company's operating performance and underlying prospects. This analysis should not be considered in isolation or as a substitute for profit/(loss) prepared in accordance with IFRS. This analysis, as well as the other information in this press release, should be read in conjunction with the Company's financial statements and related footnotes contained in the documents that the Company files with the U.S. Securities and Exchange Commission. |
|||||||||
| (2) |
The three and nine month periods ended September 30, 2012 and September 30, 2011 include costs associated with the Company's IPO of American depositary shares, which began trading on NYSE MKT on April 27, 2012. The Company recorded this charge in accordance with IFRS rules, which allow the Company to (1) fully capitalize costs directly attributable to the IPO and (2) capitalize a portion of costs indirectly attributable to the IPO, based on the size of the offering. |
||||||||
| (3) |
On May 2, 2012, the Company completed the initial public offering of its American depositary shares representing ordinary shares and is now listed on NYSE MKT under the stock symbol "AQ." Pursuant to our registration statement filed with the Securities and Exchange Commission, each American depositary share presented in the Reconciliation of Non-IFRS Financial Measures to IFRS Profit represents two ordinary shares outstanding. |
||||||||
SOURCE Acquity Group Limited
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