AutoNavi Holdings Limited Reports Third Quarter 2012 Results

AutoNavi Holdings Limited Reports Third Quarter 2012 Results

   Total Free Mobile Map App Users Grew More Than 200% Year-Over-Year to 85
                                   Million

      Monthly Active Free Mobile Map App Users Increased More Than 300%
                         Year-Over-Year to 45 Million

BEIJING, Nov. 15, 2012 (GLOBE NEWSWIRE) -- AutoNavi Holdings Limited
("AutoNavi" or the "Company") (Nasdaq:AMAP), a leading provider of digital map
content and navigation and location-based solutions in China, today announced
its unaudited financial results for the third quarter ended September 30,
2012.

Third Quarter 2012 Operational Highlights

  *AutoNavi's free mobile map application had a total of 85 million users and
    more than 45 million monthly active users as of the end of the third
    quarter of 2012. This compares to a total of 65 million users and more
    than 36 million monthly active users at the end of the second quarter of
    2012, and a total of 26 million users and over 10 million monthly active
    users at the end of the third quarter of 2011.

Third Quarter 2012Financial Highlights

  *Net revenues in the third quarter of 2012 were $40.2 million, an increase
    of 18.7% year-over-year.
    
  *Gross profit in the third quarter of 2012 was $28.8 million, an increase
    of 15.1% year-over-year.
    
  *Operating income in the third quarter of 2012 was $10.5 million, an
    increase of 5.2% year-over-year. Non-GAAP operating income in the third
    quarter of 2012 was $13.2 million, an increase of 16.5% year-over-year.
    
  *Net income attributable to AutoNavi shareholders was $10.1 million in the
    third quarter of 2012, an increase of 8.8% year-over-year. Non-GAAP net
    income attributable to AutoNavi shareholders was $12.8 million in the
    third quarter of 2012, an increase of 20.4% year-over-year.

First Nine Months of 2012 Financial Highlights

  *Net revenues in the first nine months of 2012 were $116.1 million, an
    increase of 25.8% year-over-year.
    
  *Gross profit in the first nine months of 2012 was $85.8 million, an
    increase of 28.8% year-over-year.
    
  *Operating income in the first nine months of 2012 was $30.1 million, an
    increase of 3.9% year-over-year. Non-GAAP operating income in the first
    nine months of 2012 was $40.3 million, an increase of 27.4%
    year-over-year.
    
  *Net income attributable to AutoNavi shareholders was $27.8 million in the
    first nine months of 2012, a decrease of 5.6% year-over-year. Non-GAAP net
    income attributable to AutoNavi shareholders was $38.0 million in the
    first nine months of 2012, an increase of 22.2% year-over-year.

"AutoNavi grew at a healthy pace during the third quarter, resulting in net
revenues for the first nine months of 2012 of $116.1 million, representing
year-over-year growth of approximately 26%," said Mr. Congwu Cheng, chief
executive officer of AutoNavi. "Our mobile and Internet location-based
solutions business continues to build momentum, growing approximately 80%
year-over-year and accounting for $32.1 million, or 27.6%, of our total net
revenues in the first nine months of 2012, compared to 19.4% of our total
revenues a year ago."

Mr. Cheng added, "We consider mobile maps to be the gateway to a fully
connected mobile Internet. In addition, we believe the ownership of map
content and its integration with dynamic lifestyle content and local services
from our vertical partners place us in a competitively advantageous position,
allowing us to utilize our cloud-based map service platform to provide an
enriching user experience not only to our map users but also to users of our
partners' applications."

Third Quarter 2012 Results

Revenues

Total net revenues in the third quarter of 2012 were $40.2 million, an
increase of 18.7% year-over-year from $33.9 million in the third quarter of
2011, and flat compared to the second quarter of 2012.

Automotive Navigation

Net revenues from the automotive navigation market in the third quarter of
2012 were $23.9 million, an increase of 9.2% year-over-year and a decrease of
4.0% over the previous quarter. These results are mainly due to changes in the
number of copies of digital map data licensed for use with in-dash navigation
systems, which is directly linked to the number of vehicles sold in China that
are equipped with these systems.

Mobile and Internet Location-based Solutions

The mobile and Internet location-based solutions business in the third quarter
of 2012 achieved $11.1 million in net revenues, representing an increase of
26.2% year-over-year and 0.8% over the previous quarter. The increases were
primarily due to the growth in revenues derived from the pre-installation of
the Company's navigation solutions on mobile phones.

Public Sector and Enterprise Applications

Net revenues from the public sector and enterprise applications market in the
third quarter of 2012 were $4.4 million, an increase of 51.4% year-over-year
and 12.9% over the previous quarter. The year-over-year increase was largely
attributable to certain new large aerial photogrammetry contracts entered this
year, and to a lesser degree, the completion of certain large aerial
photogrammetry contracts from a year ago. The sequential increase was a result
of better progress of certain aerial photogrammetry contracts and an increased
number of certain 3-D modeling application contracts during the quarter.

Cost of Revenues

Cost of revenues in the third quarter of 2012 was $11.4 million, representing
an increase of 28.8% year-over-year and 13.1% sequentially. The year-over-year
increase was mainly due to aerial photogrammetry-related costs in connection
with the new large aerial photogrammetry contracts entered this year,
outsourced data production and software development costs, and a general
annual increase in salary and welfare for employees directly involved in data
collection and processing. The sequential increase was largely attributable to
a rise in outsourced data production and software development costs.

Operating Expenses

Total operating expenses in the third quarter of 2012 were $20.0 million, an
increase of 33.2% year-over-year and a decrease of 2.7% over the previous
quarter. Non-GAAP operating expenses, which exclude share-based compensation
expenses, were $17.3 million, an increase of 25.5% year-over-year and 5.6%
sequentially.

Research and development ("R&D") expenses increased 42.3% year-over-year and
12.2% sequentially to $9.3 million. The increases were primarily due to higher
salary and benefit expenses, a result of an increase in the number of R&D
staff, higher share-based compensation expenses and outsourced development
costs. Non-GAAP R&D expenses, which exclude share-based compensation expenses,
increased 38.0% year-over-year and 12.2% sequentially to $8.2 million.

Selling and marketing expenses increased 32.7% year-over-year and decreased
11.2% sequentially to $5.9 million. The year-over-year increase was primarily
due to higher salary and benefit expenses resulting from increased sales
headcount, higher share-based compensation expenses, increased office facility
rent expenses and travel expenses. The sequential decrease was primarily due
to the decrease of marketing and promotion expenses as well as share-based
compensation expenses. Non-GAAP selling and marketing expenses, which exclude
share-based compensation expenses, increased 24.2% year-over-year and 2.1%
sequentially to $5.0 million.

General and administrative expenses increased 19.2% year-over-year and
decreased 14.5% sequentially to $4.8 million. The year-over-year increase was
primarily due to a general annual increase in salary and welfareand higher
share-based compensation expenses in the third quarter of 2012. The sequential
decrease was primarily due to the decrease of professional service expenses
and share-based compensation expenses. Non-GAAP general and administrative
expenses, which exclude share-based compensation expenses, increased 7.1%
year-over-year and decreased 1.8% sequentially to $4.1 million.

Net Income Attributable to AutoNavi Shareholders

Net income attributable to AutoNavi shareholders increased 8.8% year-over-year
and 14.5% sequentially to $10.1 million in the third quarter of 2012. Diluted
net income per American depositary share ("ADS") attributable to AutoNavi
shareholders for the third quarter of 2012 was $0.20, as compared to $0.18
from a year ago. One ADS represents four ordinary shares.

Non-GAAP net income attributable to AutoNavi shareholders, which excludes
share-based compensation expenses, was $12.8 million in the third quarter of
2012, an increase of 20.4% year-over-year and a decrease of 2.7% sequentially.
Diluted non-GAAP net income per ADS attributable to AutoNavi shareholders for
the third quarter of 2012 was $0.25, as compared to $0.21 from a year ago.

Cash and Term Deposits Balance

As of September 30, 2012, the Company had $202.8 million in cash and cash
equivalents and term deposits.

Business Outlook

The Company maintains its estimate for full year 2012 net revenues, which is
in the range of $152 million to $159 million, representing an increase of
approximately 20% to 25% over the fiscal year 2011.

Share Repurchase Program Update

AutoNavi announced a share repurchase plan on February 28, 2012, pursuant to
which the Company is authorized, but not obligated, by its board of directors
to repurchase up to $50 million worth of its ADSs until February 26, 2013. As
of November 14, 2012, the Company has repurchased a total of 1,730,172 ADSs,
representing 6,920,688 ordinary shares, with a total consideration of
approximately $20.1 million at a price range of $10.47 to $12.57 per ADS,
including brokerage commissions.

Conference Call Information

AutoNavi's management will hold an earnings conference call at 8:00 a.m.
Eastern Daylight Time (EDT) on November 15, 2012 (9:00 p.m. Beijing/Hong Kong
time on November 15, 2012).

The dial-in numbers and passcode for the conference call are as follows:

U.S. Toll Free: +1-866-519-4004
International:  +65-6723-9381
Hong Kong:      +852-2475-0994
United Kingdom: +44-20-3059-8139
Passcode:       AutoNavi

A replay of the conference call may be accessed by phone at the following
number until November 23, 2012:

U.S. Toll Free: +1-866-214-5335
International:  +61-2-8235-5000
Passcode:       54174983

Additionally, an archived web-cast of this call will be available on the
Investor Relations section of AutoNavi's website at http://ir.autonavi.com.

About AutoNavi Holdings Limited

AutoNavi Holdings Limited (Nasdaq:AMAP) is a leading provider of digital map
content and navigation and location-based solutions in China. At the core of
its business is a comprehensive nationwide digital map database that covers
approximately 3.6 million kilometers of roadway and over 20 million points of
interest across China. Through its digital map database and proprietary
technology platform, AutoNavi provides comprehensive, integrated navigation
and location-based solutions optimized for the Chinese market and users,
including automotive navigation solutions, mobile location-based solutions and
Internet location-based solutions, and public sector and enterprise
applications. For more information on AutoNavi, please visit
http://www.autonavi.com.

Forward Looking Statements

This press release contains forward-looking statements made under the "safe
harbor" provisions of Section 21E of the Securities Exchange Act of 1934, as
amended. These forward-looking statements can be identified by terminology
such as "will," "expects," "anticipates," "future," "intends," "plans,"
"believes," "estimates," "confident" and similar statements. Among other
things, the Business Outlook section and the quotations from management in
this press release, as well as AutoNavi's strategic and operational plans,
contain forward-looking statements. AutoNavi may also make written or oral
forward-looking statements in its reports filed with or furnished to the U.S.
Securities and Exchange Commission, in its annual report to shareholders, in
press releases and other written materials and in oral statements made by its
officers, directors or employees to third parties. Statements that are not
historical facts, including statements about AutoNavi's beliefs and
expectations, are forward-looking statements. Forward-looking statements
involve inherent risks and uncertainties. A number of factors could cause
actual results to differ materially from those contained in any
forward-looking statement, including but not limited to the following:
AutoNavi's ability to adequately maintain and update its digital map database
and minimize errors in its solutions; its current reliance on the automotive
navigation market and a small number of customers for a substantial portion of
its revenues; the project-based nature of its public sector and enterprise
applications business; its limited operating history in the mobile/Internet
location-based solutions markets; compliance with a complex set of laws, rules
and regulations governing its surveying and mapping and other businesses in
China; competition in the navigation and location-based solutions businesses
in China; and its ability to manage its growth effectively and efficiently.
Further information regarding these and other risks is included in AutoNavi's
annual report on Form 20-F as well as in its other filings with the Securities
and Exchange Commission. All information provided in this press release is
current as of the date of the press release, and AutoNavi undertakes no duty
to update such information, except as required under applicable law.

About Non-GAAP Financial Measures

To supplement AutoNavi's consolidated financial results presented in
accordance with United States Generally Accepted Accounting Principles
("GAAP"), AutoNavi uses in this press release the following non-GAAP financial
measures: (1) non-GAAP operating expenses, (2) non-GAAP R&D expenses, (3)
non-GAAP selling and marketing expenses, (4) non-GAAP general and
administrative expenses, (5) non-GAAP operating income, (6) non-GAAP net
income attributable to AutoNavi shareholders, and (7) non-GAAP diluted net
income per ADS attributable to AutoNavi shareholders, which are adjusted from
results based on GAAP to exclude the impact of share-based compensation
expenses. The presentation of these non-GAAP financial measures is not
intended to be considered in isolation or as a substitute for the financial
information prepared and presented in accordance with GAAP.

AutoNavi believes that these non-GAAP financial measures facilitate investors'
and management's comparisons to AutoNavi's historical performance and assist
management's financial and operational decision making. A limitation of using
these non-GAAP financial measures is that share-based compensation expenses
are recurring expenses that will continue to exist in AutoNavi's business for
the foreseeable future. Management compensates for these limitations by
providing specific information regarding the GAAP amounts excluded from each
non-GAAP measure. The accompanying table has more details on the
reconciliation between non-GAAP financial measures and their most directly
comparable GAAP financial measures to provide investors with context as to how
the adjustments impact the GAAP amounts.

AUTONAVI HOLDINGS LIMITED
Consolidated Balance Sheet (unaudited)
(In thousands of U.S. dollars)

                                                   September 30, December 31,
                                                    2012          2011
                                                                
Assets                                                           
Current assets                                                   
Cash and cash equivalents                           155,894       199,696
Restricted cash                                    827           --
Term deposits                                      46,939        --
Accounts receivable, net of allowance for doubtful
accounts of $1,123 and $823 as of September 30,     45,696        36,273
2012 and December 31, 2011, respectively
Due from related parties, trading                   3,846         1,056
Due from related parties, non-trading               3             221
Prepaid expense and other current assets           13,702        5,542
Deferred tax assets-current                        1,037         1,355
Total current assets                               267,944       244,143
                                                                
Properties and equipment, net                      47,578        49,245
Equity method investments                          4,373         4,442
Prepaid consideration in connection with equity     --          183
investment
Acquired intangible assets, net                    5,419         6,855
Goodwill                                           8,760         8,747
Deferred tax assets-non-current                    198           224
Other long term assets                             401           628
Prepayment for acquisition of property              8,602         --
                                                                
TOTAL ASSETS                                       343,275       314,467
                                                                
Liabilities                                                      
Current liabilities                                              
Accounts payable (including accounts payable of the
consolidated variable interest entities without
recourse to AutoNavi Holdings Limited $2,809 and    2,809         2,364
$2,358 as of September 30, 2012 and December 31,
2011, respectively)
Deferred revenue (including deferred revenue of the
consolidated variable interest entities without
recourse to AutoNavi Holdings Limited $9,289 and    10,248        7,328
$5,567 as of September 30, 2012 and December 31,
2011, respectively)
Accrued expenses and other current liabilities
(including accrued expenses and other current
liabilities of the consolidated variable interest   24,308        26,071
entities without recourse to AutoNavi Holdings
Limited $21,695 and $23,944 as of September 30,
2012 and December 31, 2011, respectively)
Income tax payable (including income tax payable of
the consolidated variable interest entities without
recourse to AutoNavi Holdings Limited $8,290 and    8,438         7,481
$7,394 as of September 30, 2012 and December 31,
2011, respectively)
                                                                
Total current liabilities                           45,803        43,244
                                                                
Non-current liabilities                                          
Deferred tax liability-non-current (including
deferred tax liability of the consolidated variable
interest entities without recourse to AutoNavi      1,052         1,345
Holdings Limited $937 and $1,191 as of September
30, 2012 and December 31, 2011, respectively)
                                                                
Total liabilities                                  46,855        44,589
                                                                
Equity                                                           
Ordinary shares                                     19            19
Additional paid-in capital                         186,909       175,726
Treasury stock                                      (13,425)      --
Statutory reserve                                  9,358         9,363
Retained earnings                                  89,335        61,517
Accumulated other comprehensive income             18,729        18,262
                                                                
Total AutoNavi Holdings Limited shareholders'       290,925       264,887
equity
Noncontrolling interest                            5,495         4,991
                                                                
Total equity                                        296,420       269,878
                                                                
TOTAL LIABILITIES AND EQUITY                       343,275       314,467

                                                              
AUTONAVI HOLDINGS LIMITED
Consolidated Statements of Comprehensive Income (unaudited)
(In thousands of U.S. dollars, except share and per share data)

                  For the three months ended          For the nine months
                                                       ended
                   September   September   June        September   September
                  30,         30,         30,         30,         30,
                   2012        2011        2012        2012        2011
                                                              
Revenue            40,903      34,609      41,232      118,714     94,202
Business tax       (683)       (718)       (1,033)     (2,629)     (1,938)
Net revenues       40,220      33,891      40,199      116,085     92,264
Cost of revenues   (11,406)    (8,857)     (10,085)    (30,248)    (25,599)
Gross profit       28,814      25,034      30,114      85,837      66,665
                                                              
Operating                                                      
expenses:
Research and       (9,251)     (6,503)     (8,245)     (25,504)    (16,239)
development
Selling and        (5,920)     (4,462)     (6,666)     (17,846)    (10,509)
marketing
General and        (4,842)     (4,061)     (5,663)     (14,874)    (10,939)
administrative
Total operating    (20,013)    (15,026)    (20,574)    (58,224)    (37,687)
expenses
Government         1,742      11         10         2,514      22
subsidies
Operating income   10,543      10,019      9,550       30,127      29,000
                                                              
Gain on
re-measurement of
fair value of the  --        --        --        --        995
equity method
investment
Interest income    1,570       1,228       1,563       4,749      3,843
Change in fair
value of forward   --        2,753       --        --        2,465
contract
Foreign exchange   545         (2,631)     (438)       77         (2,079)
gains/(loss)
Other Income       47          47          47          141        141
Income before
income taxes and
share of net       12,705      11,416      10,722      35,094      34,365
(loss)/income of
equity method
investments
Income tax expense (2,133)     (1,643)     (1,196)     (5,422)     (3,704)
Share of net
(loss)/income of   (29)        13          (263)       (530)       65
equity method
investments
Net income         10,543      9,786       9,263       29,142      30,726
Less: Net income
attributable to    463         523         458         1,324       1,267
noncontrolling
interest
Net income
attributable to
AutoNavi Holdings  10,080      9,263       8,805       27,818      29,459
Limited
shareholders
                                                              
Net income per ordinary share
attributable to AutoNavi                                        
Holdings Limited shareholders
Basic              0.05        0.05        0.05        0.15        0.16
Diluted            0.05        0.05        0.04        0.14        0.15
                                                              
Weighted average number of
shares used in calculating net                                  
income per ordinary share
Basic              191,292,003 190,404,199 192,206,265 191,765,831 189,760,381
Diluted            201,738,628 201,191,706 202,499,739 202,212,802 201,245,560
                                                              
Other
comprehensive                                                  
income/(loss), net
of tax
Foreign currency
translation        2,286       1,972       (1,676)     471         4,797
adjustment
                                                              
Comprehensive      12,829     11,758     7,587      29,613     35,523
income
Less:
comprehensive
income             522        580        406        1,328       1,402
attributable to
noncontrolling
interest
Comprehensive
income
attributable to    12,307     11,178     7,181      28,285     34,121
AutoNavi Holdings
Limited
shareholders

                                                              
AUTONAVI HOLDINGS LIMITED
Reconciliation of non-GAAP measures to most directly comparable GAAP measures
(unaudited)
(In thousands of U.S. dollars, except per ADS data)

                            For the three months ended
                            September 30,      September 30,    June 30,
                             2012               2011             2012
                                                              
Total operating expenses     20,013             15,026           20,574
Share-based compensation     (2,750)            (1,265)          (4,228)
Non-GAAP total operating     17,263             13,761           16,346
expenses
                                                              
R&D expenses                 9,251              6,503            8,245
Share-based compensation     (1,088)            (589)            (971)
Non-GAAP R&D expenses        8,163              5,914            7,274
                                                              
Selling and marketing        5,920              4,462            6,666
expenses
Share-based compensation     (877)              (402)            (1,725)
Non-GAAP selling and         5,043              4,060            4,941
marketing expenses
                                                              
General and administrative   4,842              4,061            5,663
expenses
Share-based compensation     (785)              (274)            (1,532)
Non-GAAP general and         4,057              3,787            4,131
administrative expenses
                                                              
Operating income             10,543             10,019           9,550
Share-based compensation     2,684              1,338            4,313
Non-GAAP operating income    13,227             11,357           13,863
                                                              
Net income attributable to
AutoNavi Holdings Limited    10,080             9,263            8,805
shareholders
Share-based compensation     2,684              1,338            4,313
Non-GAAP net income
attributable to AutoNavi     12,764             10,601           13,118
Holdings Limited
shareholders
                                                              
                            For the three months ended September 30, 2012
                            GAAP               Adjustments      Non-GAAP(a)
Diluted net income per ADS
attributable to AutoNavi     0.20               0.05             0.25
Holdings Limited
shareholders
                                                              
(a) Non-GAAP diluted net income per ADS attributable to AutoNavi Holdings
Limited shareholders is computed by dividing non-GAAP net income attributable
to AutoNavi Holdings Limited shareholders by the weighted average number of
diluted ordinary shares outstanding used in computing the GAAP diluted net
income per ordinary share attributable to AutoNavi Holdings Limited
shareholders (after adjusting for the ADS to ordinary share ratio).

CONTACT: For investor and media inquiries please contact:

         In China:

         Serena Shi
         AutoNavi Holdings Limited
         Tel: +86-10-8410-7883
         E-mail: serena.shi@autonavi.com

         Derek Mitchell
         Ogilvy Financial, Beijing
         Tel: +86-10-8520-6284
         E-mail: amap@ogilvy.com

         In the U.S.:

         Jessica Barist Cohen
         Ogilvy Financial, New York
         Tel: +1-646-460-9989
         E-mail: amap@ogilvy.com
 
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