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BSS (inc. billing, revenue assurance)

AsiaInfo-Linkage Reports Q1 Profit of $14.1M

BEIJING -- AsiaInfo-Linkage, Inc. (ASIA) ("AsiaInfo-Linkage," the "Company," "we," "us" or "our"), a leading provider of telecommunication software solutions and services in China, today announced financial results for the first quarter ended March 31, 2013. "The first quarter, which is seasonally a slower quarter for AsiaInfo-Linkage, provided an opportunity for us to follow through on the large number of projects that entered the delivery and implementation stages in the fourth quarter of last year," said Steve Zhang, the Company's president and chief executive officer. "The focus of our newest projects for China's three telecommunications carriers continues to be monetization of their robust growth in data traffic, which continues to outpace their data traffic revenue growth. For China Mobile alone, we have signed agreements with nine provincial networks to implement our analytical solutions to study user characteristics in order to optimize the carrier's data traffic management and pricing strategies." AsiaInfo-Linkage Chief Financial Officer Michael Wu said, "Our revenue and non-GAAP operating margin for the first quarter were in line with our previous guidance. We also recognized a positive impact of approximately 12 cents of net income per basic share mainly as a result of the Key Software Enterprise status and preferential tax treatment retroactively granted for the years 2011 and 2012 to two of our China subsidiaries." First Quarter 2013 Financial Results
Total revenues for the first quarter of 2013 were US$143.0 million, an increase of 15.6% year-over-year and a decrease of 13.7% sequentially. Meeting guidance, net revenue (non-GAAP) for the first quarter of 2013 was US$135.7 million, an increase of 12.0% year-over-year and a decrease of 12.5% sequentially. The year-over-year increase was primarily the result of healthy demand from China's three telecom carriers while the sequential decrease was mainly due to the seasonality of the Company's business as the carriers determined their billing and CRM software requirements for the rest of the year, as well as to the overall slowdown associated with China's Lunar New Year celebrations. Gross margin for the quarter was 34.7%, compared to 39.2% in the year-ago period and 40.9% in the previous quarter. Gross margin of net revenue (non-GAAP)[3] was 40.9% in the first quarter of 2013, compared to 44.8% in the year-ago period and 47.4% in the previous quarter. The year-over-year decrease in gross margin was primarily attributable to an increase in headcount of approximately 1,070 professionals, including the reclassification of approximately 180 R&D engineers into delivery teams, as well as general wage inflation increasing compensation costs. The sequential decrease was primarily due to the seasonality of the Company's business with decreased project delivery costs, which was partially offset by the reclassification of approximately 180 R&D engineers into delivery teams. In the first quarter of 2013, the Company recorded net income attributable to AsiaInfo-Linkage, Inc. of US$14.1 million, or US$0.19 per basic share, compared to US$6.4 million, or US$0.09 per basic share, in the year-ago period and US$15.6 million, or US$0.21 per basic share, in the previous quarter. The sequential increase was primarily due to the recognition of Key Software Enterprise tax status for two of the Company's Chinese subsidiaries, retroactively granted for the years 2011 and 2012, which resulted in a positive impact of US$9.0 million, or US$0.12 per basic share, and led to a tax benefit of US$6.6 million, or US$0.09 per basic share, recognized in the first quarter of 2013. In the first quarter of 2013, net income attributable to AsiaInfo-Linkage, Inc. (non-GAAP) was US$26.6 million or US$0.37 per basic share. Net income attributable to AsiaInfo-Linkage, Inc. (non-GAAP) in the year-ago period was US$19.4 million or US$0.27 per basic share. Net income attributable to AsiaInfo-Linkage, Inc. (non-GAAP) in the previous quarter was US$30.1 million or US$0.41 per basic share. Net income attributable to AsiaInfo-Linkage, Inc. (non-GAAP) increased 37.3% year-over-year and decreased 11.7% sequentially. The year-over-year increase and sequential decrease was mainly due to the same factors impacting net income attributable to AsiaInfo-Linkage, Inc. AsiaInfo-Linkage Inc.
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