Camelot Information Systems Inc. Announces Unaudited Fourth-Quarter and Full-Year 2012 Financial Results

   Camelot Information Systems Inc. Announces Unaudited Fourth-Quarter and                        Full-Year 2012 Financial Results  PR Newswire  BEIJING, April 26, 2013  BEIJING, April 26, 2013 /PRNewswire/-- Camelot Information Systems Inc. ("Camelot" or the "Company") (NYSE: CIS), a leading domestic provider of enterprise application services and financial industry IT services in China, today announced unaudited financial results for the fourth quarter and year ended December 31, 2012.  Fourth-Quarter Financial and Operating Highlights:    oNet revenues were $71.9 million in the fourth quarter of 2012, an increase     of 20.4% from $59.7 million in the fourth quarter of 2011 and an increase     of 14.0% from the third quarter   oNet revenues from enterprise application services (EAS) grew 7.0%     year-over year, with growth in other sectors offset by lower sales in the     Resources & Energy and Manufacturing & Automotive sectors   oNet revenues from financial industry IT services (FIS) increased 47.3%     year-over-year due to pent-up demand stemming from 2011 and from     continuing solid execution   oGross profit was $15.9 million, as compared to $15.9 million in the     year-ago quarter and $17.2 million in the third quarter   oLoss from operations was $9.0 million, as compared to a loss from     operations of $3.2 million in the year ago quarter and $31.9 million loss     from operations in the third quarter. Adjusted operating loss[1] was $2.8     million, as compared to an adjusted operating loss of $1.0 million in the     year-ago quarter and adjusted operating income of $5.5 million in the     third quarter   oNet loss attributable to Camelot was $10.6 million, as compared to net     income attributable to Camelot of $0.5 million in the year-ago quarter and     a net loss attributable to Camelot of $31.5 million in the third quarter.     Adjusted net loss^1 attributable to Camelot was $4.5 million, as compared     to adjusted net income of $2.7 million in the year-ago quarter and     adjusted net income attributable to Camelot of $5.8 million in the third     quarter   oOn October 16, 2012, the Company signed a share transfer agreement with     the original shareholders of Dimension regarding transferring 35% of     Dimension to the latter in exchange of 1,152,352 ordinary shares, which     was the share consideration issued to the original shareholders during     shareholders during acquisition of the entity as of January 1, 2011  [1] For more information about the adjusted (i.e. non-GAAP) financial measures contained in this press release, please see "Use of Non-GAAP Financial Measures" below.  Full-Year Financial and Operating Highlights:    oNet revenues increased 11.9% to $254.1 million in 2012, as compared to     $227.1 million in 2011   oAdjusted operating income^1 was $7.8 million, as compared to adjusted     operating income of $13.0 million in 2011   oOperating loss was $39.0 million, as compared to U.S. GAAP operating loss     of $43.1 million in 2011   oAdjusted net income^1 attributable to Camelot was $6.2 million, as     compared to adjusted net income attributable to Camelot of $15.3 million     in 2011. Adjusted diluted earnings per ADS^1 in 2012 were $0.14, as     compared to diluted earnings per ADS of $0.34 in 2011   oNet loss attributable to Camelot was $40.5 million, as compared to U.S.     GAAP net income attributable to Camelot of $40.8 million in 2011  "Camelot demonstrated satisfactory revenue growth in the fourth quarter of 2012, despite a continuing soft China macro economy. Revenues in our EAS segment grew at a reasonable rate, but the growth was offset by declines in the economically sensitive Resources & Energy and Manufacturing & Automotive sectors. Revenue growth in our FIS segment was healthy, also benefiting from an easy comparison with second half of 2011. Though our revenues were in line with our guidance, adjusted net-income fell short of our target due to certain one-time payments and charges in the quarter," commented Mr. Simon Ma, Camelot's Chairman and Chief Executive Officer. "We believe our business remains fundamentally solid though we continue to work within a continuing sluggish macroeconomic environment."  Fourth-Quarter 2012 Financial Results  Net revenues for the fourth quarter ended December 31, 2012 increased 20.4% to $71.9 million from $59.7 million in the year-ago quarter.  Net Revenues by Business Line (in thousands, except percentage) Business Line                         Three Months Ended Three Months Ended                                       December 31, 2012  December 31, 2011 Enterprise application services (EAS) $42,714   59.4%    $39,912   66.9% Financial industry IT services(FIS)   29,138    40.6%    19,778    33.1% Total net revenues                    $71,852   100.0%   $59,690   100.0%  EAS net revenues increased 7.0% year-over-year to $42.7 million in the quarter and also increased 2.0% from the prior quarter. The increase in quarterly EAS net revenues was primarily due to strength in most sectors, offset by lower revenues from the Resource & Energy and Manufacturing & Automotive sectors. EAS net revenues amounted to 59.4% of total net revenues in the quarter. FIS net revenues increased 47.3% year-over-year to $29.1 million and increased 38.0% from the prior quarter. FIS net revenues accounted for 40.6% of the quarter's total net revenues.  Cost of revenues increased 27.7% to $55.9 million from $43.8 million in the year-ago quarter. Adjusted cost of revenues increased 27.8% to $55.7 million from $43.5 million in the year-ago quarter. Adjusted cost of revenues excludes $216,000 of share-based compensation expense and $32,000 of acquisition-related intangible expense.  Gross profit increased 0.2% to $15.9 million from $15.9 million in the year-ago quarter. Adjusted gross profit increased 0.3% to $16.2 million from $16.1 million in the year-ago quarter. The gross margin was 22.2% in the quarter, as compared to 26.6% in the year-ago quarter. The adjusted gross margin was 22.5% in the quarter, as compared to 27.0% in the year-ago quarter.  Operating expenses were $25.6 million in the quarter, as compared to $19.3 million in the year-ago quarter. Adjusted operating expenses were $19.7 million, as compared to $17.3 million in the year-ago quarter. Operating expenses increased faster than revenues year-over-year due to compensation in exchange for shares in a subsidiary, bad debt expense, and other one-time expenses. Adjusted operating expenses exclude $1.6 million of share-based compensation expense and $403,000 of acquisition-related intangible expense.  Operating loss was $9.0 million, as compared to an operating loss of $3.2 million in the year-ago quarter. Adjusted operating loss was $2.8 million, as compared to an adjusted operating loss of $1.0 million in the year-ago quarter.  Net loss attributable to Camelot for the fourth quarter of 2012 was $10.6 million, as compared to net income of $0.5 million in the year-ago quarter. Adjusted net loss attributable to Camelot for the fourth quarter of 2012 was $4.5 million, as compared to adjusted net income of $2.7 million in the year-ago quarter. Adjusted net income includes $3.9 million in compensation received in exchange for shares in a subsidiary.  Full-Year 2012 Financial Results  In 2012, net revenues increased 11.9% to $254.1 million from $227.1 million in 2011. Revenues in the EAS business line in 2012 were $165.1 million, an increase of 3.7% from $159.2 million in the prior year. Revenues in the FIS business line in 2012 were $89.0 million, an increase of 30.9% from the prior year. Gross profit was $62.0 million in the year, as compared to $59.6 million in the prior year. The gross margin was 24.4% in the year, as compared to 26.2% in the prior year. Adjusted gross profit was $62.4 million in the year, as compared to $62.7 million in the prior year. The adjusted gross margin was 24.6% in the year, as compared to 27.5% in the prior year.  Operating loss was $39.0 million in the year, as compared to an operating loss of $43.1 million in the prior year. Adjusted operating income was $7.8 million in the year, as compared to $13.0 million in the prior year. The adjusted operating margin was 3.1% in the year, as compared to 5.7% in the prior year.  Net loss attributable to Camelot was $40.5 million in 2012, as compared to a net loss of $40.8 million in the prior year, or a loss of $0.91 per diluted ADS as compared to a loss of $0.91 per ADS in the prior year. Adjusted net income attributable to Camelot was $6.2 million, or $0.14 per ADS in 2012, as compared to $15.3 million, or $0.34 per ADS, in the prior year.  Balance Sheet and Cash Flow  As of December 31, 2012, the Company had $95.5 million in cash and cash equivalents, short-term investments, and term deposits, as compared to $102.4 million in cash, cash equivalents and term deposits as of December 31, 2011. The decrease was mainly due to a $40.4 million net loss, a $14.8 million increase in accounts receivable, $11.0 million in repayment of bank borrowing, offset by $35.3 million in maturity of time deposits, $6.6 million of impairment of goodwill, and $29.6 million of impairment of intangible assets in 2012.  In the fourth quarter of 2012, the Company did not repurchase any shares.  Days' sales outstanding[2] ("DSO") were 180 days in the fourth quarter of 2012, a decrease of 26 days from 206 days in the prior quarter.  [2] Calculated by dividing average accounts receivable, net of deferred revenue, by rolling gross revenues before business tax and related surcharges, and multiplying by 360 days. Rolling gross revenues are for the 12 months ended December 31, 2012.  Employees  The Company's headcount increased to 6,085 as of December 31, 2012, which included 5,343 information technology (IT) professionals, versus 5,966 total employees and 5,230 IT professionals at the end of the third quarter. Of the IT professionals, EAS employee headcount numbered 2,289, and FIS employee headcount numbered 3,054.  Conference-Call Information  Camelot senior management will host a conference call at 8:00 a.m. (U.S. Eastern Daylight Time) / 5:00 a.m. (U.S. Pacific Daylight Time) / 8:00 p.m. (Beijing / Hong Kong time) on Friday, April 26 to discuss the Company's fourth-quarter and full-year 2012 financial results.  The conference call may be accessed by calling:  US Toll free:                          (877) 474-9501 US Toll / International:               (857) 244-7554 Hong Kong toll free:                   800.96.3844 HK Toll:                               852.3002.1672 UK toll free:                          08082347616 UK toll:                               44.207.365.8426 South China toll free / China Telecom: 10 800 130 1713 North China toll free / China Netcom:  10 800 713 1756 China toll:                            86 4008811630 Taiwan toll free:                      00801148420  Passcode: 72459964  Please dial in approximately 10 minutes before the scheduled time of the call.  A replay of the conference call may be accessed by phone at the following numbers until 11:59 p.m. Central China Time on May 3, 2013:  US Toll free:            (888) 286-8010 US Toll / International: (617) 801-6888  Passcode: 98510217  A live webcast of the conference call and recording of the conference call will be available on the investor relations page of Camelot's website at www.camelotchina.com.  USE OF NON-GAAP FINANCIAL MEASURES  To supplement the unaudited consolidated financial statements presented in accordance with U.S. GAAP, Camelot uses the non-GAAP ("adjusted") financial measures of gross profit and margin, operating expenses, operating income and margin, net income attributable to Camelot Information Systems Inc. and margin, and diluted earnings per share and diluted earnings per ADS, which are adjusted from results based on U.S. GAAP to exclude impairment of intangible assets, impairment of goodwill, share-based compensation, acquisition-related intangible amortization, and changes in fair value of contingent consideration. The non-GAAP financial measures are provided as additional information to help our investors compare business trends among different reporting periods on a consistent basis and to enhance investors' overall understanding of our current financial performance and prospects for the future. The non-GAAP financial measures should be considered in addition to results prepared in accordance with U.S. GAAP, but should not be considered a substitute for or superior to U.S. GAAP results. In addition, our calculation of the non-GAAP financial measures may differ from the calculations used by other companies, and therefore comparability may be limited.  STATEMENT REGARDING UNAUDITED FINANCIAL INFORMATION  The unaudited financial information set forth above is subject to adjustments that may be identified when audit work is performed on the Company's year-end financial statements, which could result in significant differences from this unaudited financial information.  ABOUT CAMELOT INFORMATION SYSTEMS INC.  Camelot is a leading domestic provider of enterprise application services and financial industry information technology ("IT") services in China, focusing on the high end of the IT value chain. The Company is the largest domestic provider of SAP-based Enterprise Resource Planning services in China as measured by 2010 revenue and by the number of SAP consultants as of December 31, 2010. Camelot also ranked as number-one in the banking testing market in 2010, according to IDC. Camelot also operates in other areas of the Asia Pacific region, including Taiwan and Japan. The Company provides services to a wide range of industries, including financial services, resources and energy, manufacturing and automobile, technology, as well as telecommunication, media and education.  SAFE HARBOR  This press release contains statements that may constitute "forward-looking" statements within the meaning 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 U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements involve a number of risks and uncertainties that could cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. 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: the Company's growth strategies, the Company's ability to attract and retain skilled professionals, the market of IT services in China, the wages of IT professionals, the Company's ability to serve, retain, and attract customers. Further information regarding these and other risks is included in Camelot's filings with the U.S. Securities and Exchange Commission, including its annual report on Form 20-F. Camelot does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law.    Company Contacts:                                           Investor Relations Contacts: Camelot Information Systems Inc.                                           CCG Investor Relations Mr. Franklin King, Interim Chief Financial Officer                         Mr. Crocker Coulson, President  Tel: +86 (10) 8201 9008                   Tel: +1 (646) 213-1915  E-mail: investors@camelotchina.com        E-mail: crocker.coulson@ccgir.com   Ms. Jojo Guo, Investor Relations Manager  Mr. John Harmon, CFA, Sr. Acct. Mgr.  Tel: +1 (646) 371-6533                    Tel: +86 (10) 8573 1014 (Beijing)  E-mail: investors@camelotchina.com        E-mail: john.harmon@ccgir.com  – financial tables follow –  ------------------------------------------------------------------------------    CAMELOT INFORMATION SYSTEMS INC. Condensed Consolidated Balance Sheets (Unaudited) (U.S. Dollars in Thousands, Except per Share Data)                                    December 31,                December 31,                                    2012                        2011 Assets Current assets Cash and cash equivalents          $84,463                     $57,128 Term deposits                      9,726                       45,318 Restricted cash                    1,137                       4,626 Short-term investments             1,284                       – Billed accounts receivable         45,279                      47,834 Unbilled accounts receivable       105,240                     87,212 Other current assets               23,395                      19,659 Total current assets               270,524                     261,777 Property and equipment, net        4,393                       4,673 Goodwill and other intangible      11,949                      46,248 assets Other long-term assets             2,062                       2,698 Total assets                       $288,928                    $315,396 Liabilities and equity Current liabilities Consideration payable in connection with business           $2,992                      $5,132 acquisition Other current liabilities          79,877                      71,099 Total current liabilities          82,869                      76,231 Contingent consideration in        –                           2,822 relation to acquisition Other non-current liabilities      2,786                       4,255 Total liabilities                  85,655                      83,308 Equity ^(a)                        203,273                     232,088 Total liabilities and equity       $288,928                    $315,396 Note:  (a) As of December 31, 2012, there were 190,926,475 ordinary shares issued and 185,069,020 shares outstanding.        CAMELOT INFORMATION SYSTEMS INC. Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) (U.S. Dollars in Thousands, Except per Share Data)                       Three Months Ended                       Twelve Months Ended                       December 31,                             December 31,                       2012               2011                  2012         2011 Net revenues          $71,852            $59,690               $254,063     $227,120 Cost of               (55,911)           (43,787)              (192,034)    (167,520) revenues^(1)(2) Gross profit          15,941             15,903                62,029       59,600 Selling and           (4,275)            (4,319)               (15,409)     (20,263) marketing^(1)(2) General and           (18,695)           (12,212)              (41,908)     (45,065) administrative^(1)(2) Research and          (2,711)            (2,348)               (8,047)      (5,956) development costs Changes in fair value of contingent         38                 (442)                 (170)        (1,669) consideration for acquisition Impairment of         –                  –                     (6,610)      (8,552) intangible assets Impairment of         –                  –                     (29,597)     (21,457) goodwill Total operating       (25,643)           (19,321)              (101,741)    (102,962) expense Government subsidies  734                189                   742          255 Income (loss) from    (8,968)            (3,229)               (38,970)     (43,107) operations Interest expense      (15)               (189)                 (188)        (935) Interest income       167                476                   900          1,194 Income (loss) before provisions for income (8,816)            (2,942)               (38,258)     (42,848) tax Income tax            (1,718)            3,283                 (2,144)      1,791 benefit(expense) Net Income (Loss)     (10,534)           341                   (40,402)     (41,057) Noncontrolling        (92)               120                   (144)        233 interest Net Loss attributable to Camelot            ($10,626)          $461                  ($40,546)    ($40,824) Information Systems Inc.^(3) Earnings per share Basic-ordinary shares ($0.06)            $0.00                 ($0.23)      ($0.23) Diluted-ordinary      ($0.06)            $0.00                 ($0.23)      ($0.23) shares Earnings per ADS Basic-ADSs            ($0.24)            $0.01                 ($0.91)      ($0.91) Diluted-ADSs          ($0.24)            $0.01                 ($0.91)      ($0.91) Weighted average shares outstanding Basic-ordinary shares 177,979,046        177,212,430           177,711,280  179,954,056 Diluted-ordinary      177,979,046        185,938,452           177,711,280  179,954,056 shares Weighted average ADSs outstanding Basic-ADSs            44,494,762         44,303,108            44,427,820   44,998,514 Diluted-ADSs          44,494,762         46,484,613            44,427,820   44,998,514 Net Income (Loss)     (10,534)           341                   (40,402)     (41,057) Other comprehensive income, net of tax: Change in cumulative foreign currency      1,460              2,513                 2,153        8,229 translation adjustments Comprehensive loss    ($9,074)           $2,854                ($38,249)    ($32,828) Less: comprehensive income(loss) attributable to the   (108)              114                   (173)        252 noncontrolling interest Comprehensive loss attributable to       ($9,182)           $2,968                ($38,422)    ($32,576) Camelot Information Systems Inc. (1) Includes the following amounts of share-based compensation expenses for the periods indicated                       Three Months Ended Twelve Months Ended                       December 31,       December 31,                       2012        2011   2012        2011 Cost of revenues      $216        $28    $278        $1,463 Selling and marketing 418         825    2,043       7,427 General and           1,209       159    2,120       10,476 administrative Total share-based     $1,843      $1,012 $4,441      $19,366 compensation expenses (2) Includes the following amounts of amortization expense related to intangible assets acquired for business combination for the periods indicated                       Three Months Ended Twelve Months Ended                       December 31,       December 31,                       2012        2011   2012        2011 Cost of revenues      $32         $211   $127        $1,594 Selling and marketing 331         527    1,645       3,213 General and           72          71     285         278 administrative Total acquisition-related   $435        $809   $2,057      $5,085 intangible amortization expenses (3) The following table sets forth the reconciliation of our adjusted net loss attributable to Camelot Information Systems Inc. to the U.S. GAAP net loss attributable to Camelot Information Systems Inc.:                       Three Months Ended Twelve Months Ended                       December 31,       December 31,                       2012        2011   2012        2011 Net loss attributable to Camelot Information Systems   ($10,626)   $461   ($40,546)   ($40,824) Inc. (U.S. GAAP) Share-based           1,843       1,012  4,441       19,366 compensation Acquisition-related intangible            435         809    2,057       5,085 amortization Changes in fair value of contingent         (38)        442    170         1,669 consideration Impairment of         -           -      6,610       8,552 intangible assets Impairment of         -           -      29,597      21,457 goodwill Non-cash compensation 3,908       -      3,908       - expense Total adjusted        6,148       2,263  46,783      56,129 amounts Adjusted net income (loss) attributable to Camelot            ($4,478)    $2,724 $6,237      $15,305 Information Systems Inc.    CAMELOT INFORMATION SYSTEMS INC. Condensed Consolidated Statements of Cash Flows (Unaudited) (U.S. Dollars in Thousands)                                       Three-Month Periods Twelve-Month Periods                                       Ended December 31,  Ended December 31,                                       2012       2011     2012       2011 Cash flow from operating activities: Net loss                              ($10,534)  $341     ($40,402)  ($41,057) Adjustments to reconcile net loss to net cash provided by(used in) operating activities: Depreciation of property and          199        269      957        1,087 equipment One time gain from disposal 35%       3,908      -        3,908      - shares of dimension Amortization of intangible assets     581        863      2,814      5,285 Deferred income taxes                 (190)      (1,934)  (903)      (4,060) Impairment of intangible assets       -          -        6,610      8,552 Impairment of goodwill                -          -        29,597     21,457 Provision for account receivable      1,839      518      778        3,235 Provision for other current assets    -          (1,231)  633        - Share-based compensation              1,843      1,011    4,441      19,366 Gains on disposal of property and     27         11       52         20 equipment Change in fair value of contingent    (38)       442      170        1,669 consideration for acquisition Changes in operating assets and liabilities: Accounts receivable                   10,978     8,872    (14,812)   (23,364) Other assets                          (1,542)    (2,039)  (3,739)    (3,503) Accounts payable                      2,764      1,678    1,093      (406) Other liabilities                     17,622     4,839    14,427     6,918 Net cash used in operating activities 27,457     13,640   5,624      (4,801) Cash flow from investing activities: Purchase of term deposits             (4,664)    (10,342) (28,900)   (44,785) Maturity of term deposits             18,996     -        64,227     - Restricted cash                       594        8,003    3,518      2,743 Repayment of loan to unrelated        -          13       -          13 parties Proceeds from disposal of property    16         11       24         29 and equipment Purchase of property and equipment    (146)      (203)    (668)      (867) Purchase of intangible assets and     1,269      78       (1,304)    - other asset Purchase of businesses, net of cash   -          -        (3,500)    (11,430) acquired Net cash provided (used in) by        16,065     (2,440)  33,397     (54,297) investing activities Cash flow from financing activities: Proceeds from bank borrowing          331        1,373    3,212      9,205 Repayment of bank borrowing           (437)      (8,472)  (10,998)   (12,230) Repurchase of ordinary shares         -          -        -          (14,415) Payment of professional fee related   -          558      -          (406) to initial public offering Payment of reimbursable issuance cost -          (969)    -          (694) related to follow-on offering Payment of contingent consideration and deferred consideration for        -          (1,188)  (5,100)    (7,961) business acquisitions Proceeds from stock option exercises  -          41       -          1,335 Net cash used in financing activities (106)      (8,657)  (12,886)   (25,166) Effect of foreign exchange rate       648        298      1,200      1,036 changes Net increase (decrease) in cash and   44,064     2,841    27,335     (83,228) cash equivalents Cash and cash equivalents, beginning  40,399     54,287   57,128     140,356 of period Cash and cash equivalents, end of     $84,463    $57,128  $84,463    $57,128 period      CAMELOT INFORMATION SYSTEMS INC. Reconciliations of Adjusted Financial Measures to Comparable GAAP Measures (Unaudited) (US Dollars in Thousands, Except per Share Data and Percentage)              Three Months Ended                   Three Months Ended              December 31, 2012                    December 31, 2011              GAAP     Adjustments        Adjusted GAAP     Adjustments     Adjusted Cost of      $55,911  ($248)      (a)    $55,663  $43,787  (239)       (a) $43,548 revenues Gross profit 15,941   248         (a)    16,189   15,903   239         (a) 16,142 Operating    25,643   (5,900)     (a)    19,743   19,321   (2,024)     (a) 17,297 expenses Operating    (8,968)  6,148       (a)    (2,820)  (3,229)  2,263       (a) (966) income(loss) Net          (10,626) 6,148       (a)(d) (4,478)  461      2,263       (a) 2,724 income(loss) Net gross    22.2%    0.3%        (b)    22.5%    26.6%    0.4%        (b) 27.0% margin Net operating    (12.5%)  8.6%        (a)    (3.9%)   (5.4%)   3.8%        (a) (1.6%) margin Net margin   (14.8%)  8.6%        (a)    (6.2%)   0.8%     3.8%        (a) 4.6% Diluted EPS  ($0.06)  $0.03       (c)    ($0.03)  $0.00    $0.01       (c) $0.01 Diluted      ($0.24)  $0.14       (c)    ($0.10)  $0.01    $0.05       (c) $0.06 EPADS              Twelve Months Ended                  Twelve Months Ended              December 31, 2012                    December 31, 2011              GAAP     Adjustments        Adjusted GAAP     Adjustments     Adjusted Cost of      $192,034 ($405)      (a)    $191,629 $167,520 ($3,057)    (a) $164,463 revenues Gross profit 62,029   405         (a)    62,434   59,600   3,057       (a) 62,657 Operating    101,741  (46,378)    (a)    55,363   102,962  (53,072)    (a) 49,890 expenses Operating    (38,970) 46,783      (a)    7,813    (43,107) 56,129      (a) 13,022 income(loss) Net          (40,546) 46,783      (a)(d) 6,237    (40,824) 56,129      (d) 15,305 income(loss) Net gross    24.4%    0.2%        (b)    24.6%    26.2%    1.3%        (b) 27.5% margin Net operating    (15.3%)  18.4%       (a)    3.1%     (19.0%)  24.7%       (a) 5.7% margin Net margin   (16.0%)  18.4%       (a)    2.5%     (18.0%)  24.7%       (a) 6.7% Diluted EPS  ($0.23)  $0.26       (c)    $0.04    ($0.23)  $0,31       (c) $0.09 Diluted      ($0.91)  $1.05       (c)    $0.14    ($0.91)  $1.25       (c) $0.34 EPADS  Notes: (a) The non-GAAP adjustments include share-based compensation expenses, amortization expense related to intangible assets acquired for business acquisition, changes in fair value of contingent consideration and impairment of goodwill and intangible assets, where were presented in the notes (1) and (2) below Condensed Consolidated Statements of Operations (Unaudited) for the reconciliation process (b) Adjustments to exclude acquisition-related intangible asset amortization expense and share-based compensation recorded in cost of sales of $248, $239, $405 and $3,057 for the three-month periods ended December 31, 2012 and 2011, and the twelve-month periods ended December 31, 2012 and 2011, respectively. (c) Adjusted diluted EPS is computed by dividing adjusted net income attributable to Camelot Information Systems Inc. by the weighted average number of diluted ordinary shares outstanding used in computing the GAAP diluted EPS for the respective periods. (d) Net income refers to net income attributable to Camelot.              SOURCE Camelot Information Systems Inc.  Website: http://www.camelotchina.com  
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