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Pactera Announces First Quarter 2013 Financial Results



            Pactera Announces First Quarter 2013 Financial Results

PR Newswire

BEIJING, May 23, 2013

BEIJING, May 23, 2013 /PRNewswire/ -- Pactera Technology International Ltd.
(Nasdaq: PACT) ("Pactera" or the "Company"), a global consulting and
technology services provider strategically headquartered in China, today
reported its unaudited financial results for the first quarter of 2013 ended
March 31, 2013.

(Logo: http://photos.prnewswire.com/prnh/20130118/CN37843LOGO )

On November 9, 2012, HiSoft Technology International Limited ("HiSoft") and
VanceInfo Technologies Inc. ("VanceInfo") announced the completion of merger
of equals to form Pactera. HiSoft and VanceInfo's financial results were
consolidated into Pactera from the date of the completion of the merger.

First Quarter 2013 Financial and Operational Highlights

  o Net revenues for the first quarter of 2013 were $152.3 million,as compared
    to $65.5 million for the first quarter of 2012.
  o GAAP diluted net loss per ADS for the first quarter of 2013 was $0.02.
  o Non-GAAP diluted net income per ADS[1] for the first quarter of 2013 was
    $0.12.
  o Total full-time employees as of March 31, 2013 were 21,577 including
    19,445 billable professionals.

[1] Non-GAAP gross margin, non-GAAP operating income, non-GAAP net income,
non-GAAP basic and diluted net income per ADS and corresponding margins
presented in this press release exclude share-based compensation expense,
amortization of acquired intangible assets and land use right, merger-related
transaction and integration costs, and change in fair value of contingent
consideration payable for business acquisition and compensation expenses
related to acquisition. The non-GAAP measures and related reconciliations to
GAAP measures are described in the accompanying section of "About Non-GAAP
Financial Measures" and the accompanying tables of "Reconciliations of
Non-GAAP Financial Measures to Comparable GAAP Measures" and "Reconciliations
of Forward-Looking Guidance for Non-GAAP Financial Measures to Comparable GAAP
Measures" at the end of the news release.

"The first quarter of 2013 was a challenging yet accomplished quarter," said
Mr. Tiak Koon Loh, Chief Executive Officer of Pactera. "We experienced weaker
than expected revenues and margins mainly due to lower visibility amidst the
MOE integration and related business restructuring as well as a depreciating
Japanese currency. However, we are on track with business and back-office
integration, and we are achieving our six-month target of cost synergies ahead
of schedule."

First Quarter 2013 Financial Results

Net Revenues

Net revenues were $152.3 million for thefirst quarter of 2013 as compared to
$65.5 million for the first quarter of 2012, reflecting an increase of 0.5%
from $151.6 million of the pro forma net revenues[2] for the corresponding
period in 2012. Revenue headwinds continued from the Company's largest telecom
customer, Japan market as well as merger related integration and business
restructure.

[2] Pro forma net revenues of the Company for the first quarter 2012 assume
that the merger occurred at the beginning of such period. The pro forma
financial information is provided for information purpose only and does not
purport to present what the actual results of operations would have been had
the transaction actually occurred at the beginning of such period indicated
nor does it purport to present the actual results of operations for any future
period or financial position for any future date. Please refer to the
accompanying tables at the end of the earnings release.

Net Revenues by Service Line

Pactera has three service lines: Information Technology ("IT") services,
research and development ("R&D") services, and business process outsourcing
("BPO"). Pactera divides IT services into two categories: consulting and
packaged solution services ("CPS") and application development, testing and
maintenance services ("ADM").

Net revenues from IT services were $81.5 million for the first quarter of
2013, which increased 2.8% from $79.3 million of pro forma net revenues for
the corresponding period in 2012. The increase was primarily due to the
increasing demand and the expanded offerings of our CPS. Net revenues from IT
services were $39.3 million for the same period in 2012.

Net revenues from R&D services were $68.1 million for the first quarter of
2013, compared to $69.7 million of the pro forma net revenues and $26.2
million of net revenues for the corresponding period in 2012.

Net revenues from BPO were $2.7 million for the first quarter of 2013,
compared to $2.6 million of the pro forma net revenues for the first quarter
of 2012.

Net Revenues by Service Line

                   Three Months Ended Three Months Ended

                   March 31, 2013     March 31, 2012
                   ($ in thousands, except percentages)
IT Services        81,529    53.6%    39,284    60.0%
CPS                29,199    19.2%    13,613    20.8%
ADM                52,330    34.4%    25,671    39.2%
R&D Services       68,057    44.7%    26,204    40.0%
BPO                2,734     1.7%     -         -
Total Net Revenues 152,320   100.0%   65,488    100.0%

Pro forma Net Revenues by Service Line
(Please refer to the reconciliation table at the end of the earnings release.)

                                 Three Months Ended Three Months   Year-over-Year
                                 March 31, 2013     Ended          %
                                                    March 31, 2012 Change
                                 ($ in thousands, except percentages)
IT Services                      81,529    53.6%    79,306  52.3%  2.8%
CPS                              29,199    19.2%    23,373  15.4%  24.9%
ADM                              52,330    34.4%    55,933  36.9%  (6.4)%
R&D Services                     68,057    44.7%    69,683  46.0%  (2.3)%
BPO                              2,734     1.7%     2,609   1.7%   4.8%
Total Net Revenues               152,320   100.0%   151,598 100.0% 0.5%

Net Revenues by Geographic Markets

Based on the location of clients' headquarters, net revenues from clients
headquartered in the United States were $60.4 million or 39.6% of the net
revenues for the first quarter of 2013, followed by 37.5% from Greater China,
9.3% from Europe, 8.7% from Japan and 4.9% from Asia South.

Net Revenues based on Location of Clients' Headquarters

                   Three Months Ended Three Months Ended

                   March 31, 2013     March 31, 2012
                   ($ in thousands, except percentages)
United States      60,351    39.6%    29,862    45.6%
Greater China      57,117    37.5%    14,763    22.5%
Europe             14,217    9.3%     4,538     6.9%
Japan              13,282    8.7%     13,411    20.5%
Asia South         7,353     4.9%     2,914     4.5%
Total Net Revenues 152,320   100.0%   65,488    100.0%

Pro Forma Net Revenues based on Location of Clients' Headquarters
(Please refer to the reconciliation table at the end of the earnings release.)

                   Three Months Ended Three Months Ended Year-over-Year %
                   March 31, 2013     March 31, 2012     Change
                   ($ in thousands, except percentages)
United States      60,351    39.6%    60,173    39.7%    0.3%
Greater China      57,117    37.5%    54,963    36.3%    3.9%
Europe             14,217    9.3%     15,216    10.0%    (6.6)%
Japan              13,282    8.7%     16,769    11.1%    (20.8)%
Asia South         7,353     4.9%     4,477     2.9%     64.2%
Total Net Revenues 152,320   100.0%   151,598   100.0%   0.5%

Measuring Pactera's net revenues based on the location of contract signing
entity, Greater China accounted for 58.3% of net revenues in the first quarter
of 2013, while the United States accounted for 21.9%, Asia South accounted for
10.0%, Japan accounted for 8.6% and Europe accounted for 1.2%.

Net Revenues by Industry

Pactera classifies its clients into four industry segments: High Technology
("High Tech"), Banking, Financial Services and Insurance ("BFSI"),
Manufacturing, and Other Industry Segments including Retail, Distribution,
Travel and Transportation and Public Services ("Others").

Net Revenues by Industry

                   Three Months Ended Three Months Ended

                   March 31, 2013     March 31, 2012
                   ($ in thousands, except percentages)
High Tech          97,291    63.9%    35,014    53.5%
BFSI               34,211    22.5%    18,433    28.1%
Manufacturing      15,996    10.5%    5,570     8.5%
Others             4,822     3.1%     6,471     9.9%
Total Net Revenues 152,320   100.0%   65,488    100.0%

Pro Forma Net Revenues by Industry
(Please refer to the reconciliation table at the end of the earnings release.)

                   Three Months Ended Three Months Ended Year-over-Year 
                   March 31, 2013     March 31, 2012     %
                                                         Change
                   ($ in thousands, except percentages)
High Tech          97,291    63.9%    96,234    63.5%    1.1%
BFSI               34,211    22.5%    32,309    21.3%    5.9%
Manufacturing      15,996    10.5%    14,030    9.3%     14.0%
Others             4,822     3.1%     9,025     5.9%     (46.6)%
Total net revenues 152,320   100.0%   151,598   100.0%   0.5%

Largest Clients

Net revenues from Pactera's top five and top ten clients accounted for 34.2%
and 43.5% of net revenues, respectively, during the first quarter of 2013,
compared to 33.6% and 46.9%, respectively, for the corresponding period in
2012. In terms of pro forma net revenues, top five and top ten clients
accounted for 39.8% and 49.9% respectively for the first quarter of 2012.

Gross Profit and Gross Margin

Gross profit was $39.5 million for the first quarter of 2013, compared to
$22.9 millionfor the corresponding period in 2012. During the first quarter of
2013, gross margin was 25.9%, as compared to 34.9% for the first quarter of
2012.

Operating Expenses

Total operating expenses were $43.2 million for the first quarter of 2013
compared to $16.3 million for the corresponding period in 2012. Operating
expenses in the first quarter of 2013 reflect $2.4 million of merger related
expenses, including professional fees, severance costs, and facilities and
system integration expenses.

Operating Income (Loss) and Operating Margin

Operating loss for the first quarter of 2013 was $3.7 million, compared to an
operating income of $6.5 million for the corresponding period in 2012.
Non-GAAP operating income for the first quarter in 2013 was $8.3 million, as
compared to $9.2 million in the corresponding period in 2012.

Operating margin was negative 2.4% for the first quarter of 2013, comparedto
10.0% for the same period in 2012. Non-GAAP operating margin was 5.5% for the
first quarter of 2013, compared to 14.0% for the corresponding period in 2012.

Income Tax Benefit (Expense)

Income tax benefit was $2.4 million in the first quarter of 2013, compared to
income tax expenses of $0.9 million in the same period 2012. The tax benefit
was the result of obtaining the Key Software Enterprise status with a
preferential tax treatment retroactively granted for the years 2011 and 2012.

Net Income (Loss) and Net Income (Loss) per ADS

Net loss attributable to Pactera was $1.7 million for the first quarter of
2013, compared to a net income of $6.1 million for the corresponding period in
2012. Diluted net loss per ADS was $0.02 for the first quarter of 2013, as
compared to diluted net income per ADS of $0.14 in the corresponding period of
2012.

Non-GAAP net income was$10.1 million for the first quarter of 2013, compared
to $8.7 million for the same period in 2012. Non-GAAP diluted net income per
ADS was $0.12 in the first quarter of 2013, compared to $0.20 in the
corresponding period of 2012.

Cash Flow and DSO

As of March 31, 2013, Pactera had cash and cash equivalents, restricted cash,
term deposits and short-term investment totaling $144.9 million. Operating
cash flow for the first quarter of 2013 was a net outflow of approximately
$31.6 million. Days sales outstanding ("DSO") was 137 days for the quarter and
124 days for the last 12 months on a pro forma basis.

Recent Development

Share Repurchase Program

In December 2012, the Company announced that its Board of Directors has
approved a share repurchase program. Under the program, the Company has been
authorized, but is not obligated, to repurchase up to $30 million worth of
outstanding ADSs representing the common shares of the Company from time to
time over the next 12 months, depending on market conditions as well as
subject to the relevant rules under US securities regulations. As of April 8,
2013, 4,643,359 ADSs were repurchased for a total consideration of $30 million
from open market under this program.

Announced Receipt of "Going Private" Proposal

On May 20, 2013, the Company announced that its Board of Directors had
received a non-binding proposal letter, dated May 20, 2013, from an affiliate
of funds managed or advised by Blackstone, the Company's non-executive
Chairman, Chris Chen, its Chief Executive Officer, Tiak Koon Loh, and its
Executive Committee members, David Chen, Sidney Huang and Jun Su
(collectively, the "Buyer Consortium") to acquire all of the outstanding
shares of Pactera not currently owned by the Buyer Consortium in a going
private transaction (the "Transaction") for US$7.50 per American Depositary
Share ("ADS", each ADS representing one common share of the Company) in cash,
subject to certain conditions. According to the proposal letter, the Buyer
Consortium intends to form an acquisition vehicle for the purpose of
implementing the Transaction, and the Transaction is intended to be financed
with a combination of equity capital funded by the Buyer Consortium and
third-party debt.

The Company's Board of Directors has formed a committee of independent
directors (the "Independent Committee") to consider the proposed transaction.
No decisions have been made by the Independent Committee with respect to the
Company's response to the Transaction. There can be no assurance that any
definitive offer will be made, that any agreement will be executed or that
this or any other transaction will be approved or consummated. The Company
does not undertake any obligation to provide any updates with respect to this
or any other transaction, except as required under applicable law.

Outlook for Pactera's Second Quarter and Full Year 2013

For the second quarter of 2013, based on current market and operating
conditions and current book orders, Pactera expects:

  o Net revenues to be at least $163 million, compared to $166.5 million in
    the second quarter of 2012 on a pro-forma basis. Excluding the revenues
    from our large telecom customer in both periods, this represents an
    increase of at least 10% from the second quarter 2012.
  o Non-GAAP diluted net income per ADS to be at least $0.14, estimated based
    on 84.5 million weighted average equivalent ADSs outstanding.

For the full year 2013, based on current market and operating conditions,
Pactera expects:

  o Excluding the revenues from our large telecom customer for both 2012 and
    2013, net revenues to be between $635 million and $640 million,
    representing an increase between 10% and 11% from the 2012 pro forma
    revenues of $577 million. Based on our current visibility, we estimate net
    revenues from our large telecom customer to be approximately $40 million
    to $45 million, which would result in a total net revenue for the Company
    to be between $675 million and $685 million in 2013, compared to $673
    million in 2012 on a pro forma basis.
  o Non-GAAP diluted net income per ADS to be in the range of $0.68 to $0.73,
    estimated based on 85.5 million weighted average equivalent ADSs
    outstanding.

These estimates are based on current market and operating conditions, are
subject to change, and may be influenced positively or negatively by factors
outside the Company's control, including but not limited to macroeconomic
events in the markets in which the Company operates. See "Safe Harbor
Statement" below for additional information regarding forward-looking
statements.

Conference Call

The Company will host a corresponding conference call and live webcast to
discuss the results at 8:00 AM Eastern Standard Time (EST) on Thursday, May
23, 2013 (8:00 PM Beijing/Hong Kong time). Please dial-in five minutes prior
to the call to register and receive further instruction.

The dial-in details for the live conference call are as below:

U.S. Toll Free Dial-in Number: +1.866.519.4004
International Dial-in Number:  +65.6723.9381
Hong Kong Dial-in Number:      +852.2475.0994
Passcode:                      58995010

The conference call will be available live via webcast on the Investors
section of Pactera's website at http://ir.pactera.com . The archive replay
will be available on Pactera's website shortly after the call.

A dial-in replay of the conference call will be available until May 31, 2013:

U.S. Toll Free Dial-in Number: +1.855.452.5696
International Dial-in Number:  +61.2.8199.0299
Passcode:                      58995010

About Pactera

Pactera Technology International Ltd. (NASDAQ: PACT), formed by a merger of
equals between HiSoft Technology International Limited and VanceInfo
Technologies Inc., is a global consulting and technology services provider
strategically headquartered in China. Pactera provides world-class business /
IT consulting, solutions, and outsourcing services to a wide range of leading
multinational firms through a globally integrated network of onsite and
offsite delivery locations in China, the United States, Europe, Australia,
Japan, Singapore and Malaysia. Pactera's comprehensive services include
business and technology advisory, enterprise application services, business
intelligence, application development & maintenance, mobility, cloud
computing, infrastructure management, software product engineering &
globalization, and business process outsourcing.

For more information about Pactera, please visit www.pactera.com.

Safe Harbor Statement

This news release contains forward-looking statements. These statements
constitute "forward-looking" statements within the meaning of 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 can be identified by terminology such as "will," "expects,"
"anticipates," "future," "intends," "plans," "believes," "estimates,"
"target," "going forward," "outlook" and similar statements. Such statements
are based upon management's current expectations and current market and
operating conditions, and relate to events that involve known or unknown
risks, uncertainties and other factors, all of which are difficult to predict
and many of which are beyond Pactera's control, which may cause Pactera's
actual results, performance or achievements to differ materially from those in
the forward-looking statements. Potential risks and uncertainties include, but
are not limited to, the Company's dependence on a limited number of clients
for a significant portion of its revenues, uncertainty relating to its
clients' forming or plan to form joint venture with the Company's competitors,
the economic slowdown in its principal geographic markets, the quality and
portfolio of its service lines and industry expertise, and the availability of
a large talent pool in China and inflation of qualified professionals' wages,
as well as the PRC government's investment in infrastructure construction and
adoption of various incentives in the IT service industry. Further information
regarding these and other risks, uncertainties or factors is included in
Pactera's filings with the U.S. Securities and Exchange Commission. All
information provided in this news release is as of the date of this news
release, and Pactera 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.

About Non-GAAP Financial Measures

To supplement Pactera's consolidated financial results presented in accordance
with GAAP, Pactera uses the following measures defined as non-GAAP financial
measures by the SEC: non-GAAP income from operations, non-GAAP net income and
non-GAAP diluted EPS and related margins which exclude share-based
compensation expense, amortization of acquired intangible assets and land use
right, merger-related costs, change in fair value of contingent consideration
payable for business acquisition, and compensation expenses related to
acquisition. The non-GAAP income from operations, net income and diluted EPS
for prior periods have been reclassified so that the presentations are
consistent. The presentation of these non-GAAP financial measures is not
intended to be considered in isolation or as a substitute for or superior to
the financial information prepared and presented in accordance with GAAP or as
being comparable to results reported or forecasted by other companies. For
more information on these non-GAAP financial measures, please see the tables
captioned "Reconciliations of non-GAAP Financial Measures to Comparable GAAP
Measures" and "Reconciliations of Forward-Looking Guidance for non-GAAP
Financial Measures to Comparable GAAP Measures" set forth at the end of this
news release.

Pactera believes that these non-GAAP financial measures provide meaningful
supplemental information regarding its performance by excluding certain
expenses and expenditures that may not be indicative of its operating
performance. The Company believes that both management and investors benefit
from referring to these non-GAAP financial measures in assessing the Company's
performance and when planning and forecasting future periods. A limitation of
using non-GAAP net income and non-GAAP diluted EPS is that these non-GAAP
measures exclude the share-based compensation charges, amortization of
acquired intangible assets and land use right, merger-related transaction and
integration costs, and change in fair value of contingent consideration
payable for business acquisition that have been and will continue to be, for
the foreseeable future, a significant recurring expense in the business.
Management compensates for these limitations by providing specific information
regarding the GAAP amounts excluded from each non-GAAP measure. The
accompanying tables have more details on the reconciliations between GAAP
financial measures that are comparable to non-GAAP financial measures. The
reconciliations of the forward-looking guidance for non-GAAP financial
measures to the most directly comparable GAAP financial measures in the
accompanying table include all information reasonably available to Pactera at
the date of this news release.

 PACTERA TECHNOLOGY INTERNATIONAL LTD.
 Condensed Consolidated Balance Sheets (Unaudited)
 (US dollars in thousands, except share data)
                                    March 31, 2013         December 31,
                                                           2012
 ASSETS
 Current Assets
 Cash                               88,345                 143,714
 Restricted cash                    1,433                  6,112
 Term deposits                      36,077                 58,485
 Short-term investment              18,996                 1,765
 Accounts receivable, net           246,684                230,693
 Other current assets               39,813                 37,435
 Total current assets               431,348                478,204
 Property, plant and                68,804                 67,607
 equipment, net
 Goodwill and intangible            155,030                157,962
 assets, net
 Other long-term assets             35,361                 33,833
 Total assets                       690,543                737,606
 LIABILITIES AND EQUITY
 Current liabilities                133,338                163,152
 Other liabilities                  31,168                 32,130
 Total liabilities                  164,506                195,282
 Total shareholder's equity         526,037                542,324
 Total liabilities and equity       690,543                737,606
 Note:
 As of March 31,2013, there were 85,873,132 common shares (85,873,132 ADSs)
 issued and outstanding, excluding 2,374,252 treasury stocks in the form of
 ADS repurchased from the open market.
 As of December 31,2012, there were 88,312,068 common shares (88,312,068 ADSs)
 issued and outstanding.
 Effective on November 9, 2012, the Company adjusted the ratio of its ADSs to
 common shares that effectively resulted in a 1:1.3622 split for its ADSs. All
 number of shares and earnings per ADS figures in this announcement give
 effect to the forgoing ADS to share ratio change.

 PACTERA TECHNOLOGY INTERNATIONAL LTD.
 Condensed Consolidated Statements of Operations (Unaudited)
 (US dollars in thousands, except for share, per share data)
                                   Three months ended March 31,
                                   2013                    2012
 Net revenues                      152,320                 65,488
 Cost of revenues                  (112,850)               (42,611)
 Gross profit                      39,470                  22,877
 Operating expenses                (43,199)                (16,344)
 (Loss) Income from operations     (3,729)                 6,533
 Other income                      558                     1,045
 Exchange difference               (893)                   (480)
 Net (loss) income before income   (4,064)                 7,098
 tax expenses
  Income tax benefit (expenses)    2,383                   (887)
 (Loss) income before earning in   (1,681)                 6,211
 equity method investment
 Earning in equity method          9                       -
 investment
 (Loss) income after earning in    (1,672)                 6,211
 equity method investment
 Add: Net profit attributable to   -                       (135)
 noncontrolling interest
 Net (loss) income attributable to
 PacteraTechnology International   (1,672)                 6,076
 Ltd.
 Net (loss) income per share
 Basic                             (0.02)                  0.15
 Diluted                           (0.02)                  0.14
 Weighted average shares used in
 calculating net income per common
 share
 Basic                             84,158,726              41,163,746
 Diluted                           84,158,726              42,947,945
 Net (loss) income per ADS
 Basic                             (0.02)                  0.15
 Diluted                           (0.02)                  0.14
 Weighted average ADS used in
 calculating net income per ADS
 Basic                             84,158,726              41,163,746
 Diluted                           84,158,726              42,947,945
 Effective on November 9, 2012, the Company adjusted the ratio of its ADSs to
 common shares that effectively resulted in a 1:1.3622 split for its ADSs. All
 number of shares and earnings per ADS figures in this announcement give
 effect to the forgoing ADS to share ratio change.

 PACTERA TECHNOLOGY INTERNATIONAL LTD.
 Condensed Consolidated Statements of Comprehensive Income (Unaudited)
 (US dollars in thousands)
                                                 Three months ended March 31,
                                                 2013               2012
 Net (loss) income                               (1,672)            6,211
 Other comprehensive income, net of tax:
     Change in cumulative foreign exchange       74                 405
 translation adjustment
 Comprehensive (loss) income                     (1,598)            6,616
 Less: Comprehensive income attributable to
 noncontrolling interest                         -                  (140)
 Comprehensive income attributable to Pactera
 Technology International Ltd.                   (1,598)            6,476

 PACTERA TECHNOLOGY INTERNATIONAL LTD.
 Condensed Consolidated Statements of Cash flows (Unaudited)
 (In U.S. dollars in thousands)
                                                                           Three-Month
                                                                           Periods Ended
                                                                           March 31,
                                                                           2013       2012
 Cash flows from operating activities:
    Net (loss) income                                                    $ (1,672)  $ 6,211
    Adjustments to reconcile net (loss) income to net cash (used in) provided by operating
 activities:
        Provision for doubtful accounts                                    396        31
        Loss (gain) on disposal of property, plant and equipment           429        (44)
        Depreciation                                                       3,331      1,392
        Change in fair value of foreign-currency forward contract          13         9
        Amortization of intangible assets                                  2,704      1,043
        Non-cash interest income                                           -          -
        Share-based compensation expenses                                  6,983      1,957
      Changes in fair value of contingent consideration payable for M&A    (208)      (381)
       Earnings in investment                                              (9)        -
    Changes in operating assets and liabilities:
       Accounts receivable                                                 (16,380)   (8,401)
       Income tax receivable                                               -          -
       Other assets                                                        30         (65)
       Accounts payable                                                    1,606      (743)
 Net cash used in operating activities                                     (31,645)   (2,569)
 Cash flows from investing activities:
       Term deposits                                                       22,408     (1,270)
       Short-term investment                                               (17,231)   -
       Purchase of property, plant and equipment                           (2,041)    (1,036)
       Purchase of buliding and land use right                             (409)      -
      Cash received from merger with VanceInfo                             -
      Deferred and contingent consideration paid for business acquisitions (2,746)    (782)
 Net cash provided by (used in) investing activities                       4,669      (3,006)
      Repayment of bank loan                                               -          -
     Proceeds from issuance of common share under employee option plan     970        1,057
      Deferred and contingent consideration paid for business acquisitions (12,959)   (2,897)
 Net cash used in financing activities                                     (28,128)   (1,840)
 Effect of exchange rate changes                                           (265)      617
 Net decrease in cash                                                      (55,369)   (6,798)
 Cash at beginning of period                                               143,714    113,856
 Cash at end of period                                                   $ 88,345   $ 107,058

    PACTERA TECHNOLOGY INTERNATIONAL LTD.
    Reconciliations of Non-GAAP Financial Measures to Comparable
    GAAP Measures
    (US dollars in thousands, except per share data and
    percentages)
                             Three months ended March 31,
                             2013                   2012
    GAAP operating (loss)    (3,729)                6,533
    income
    GAAP operating (loss)    (2.4)%                 10.0%
    margin 
    Adjustments: 
     - Share-based           6,983                  1,957
    compensation
     - Amortization of
    acquired intangible      2,704                  1,043
    assets
     - Change in fair value
    of contingent            (208)                  (381)
    consideration payable
    for M&A
     - Compensation expenses 87                     -
    related to acquisition
     - Merger related costs  2,351                  -
     - Land use right        126                    -
    amortization expense
    Non-GAAP operating       8,314                  9,152
    income
    Non-GAAP operating       5.5%                   14.0%
    margin 
    GAAP net (loss) income   (1,672)                6,076
    GAAP net (loss) margin   (1.1)%                 9.3%
    Adjustments: 
     - Share-based           6,983                  1,957
    compensation
     - Amortization of
    acquired intangible      2,704                  1,043
    assets
     - Change in fair value
    of contingent            (208)                  (381)
    consideration payable
    for M&A
     - Compensation expenses 87                     -
     related to acquisition
     - Merger related costs, 2,066                  -
    net of tax effect
     - Land use right        126                    -
    amortization expense
    Non-GAAP net income      10,086                 8,695
    Non-GAAP net margin      6.6%                   13.3%
    Non-GAAP net income per
    ADS
    Basic                    0.12                   0.21
    Diluted                  0.12                   0.20
    Weighted average ADS
    used in calculating
    Non-GAAP net income per
    ADS
    Basic                    84,158,726             41,163,746
    Diluted                  87,027,298             42,947,945
    GAAP net (loss) income
    per ADS
    Basic                    (0.02)                 0.15
    Adjustments: 
     - Share-based           0.08                   0.05
    compensation
     - Amortization of
    acquired intangible      0.04                   0.02
    assets
     - Change in fair value
    of contingent            -                      (0.01)
    consideration payable
    for M&A
     - Merger related costs, 0.02                   -
    net of tax effect
    Non-GAAP net income per
    ADS
    Basic                    0.12                   0.21
    GAAP net (loss) income
    per ADS
    Diluted                  (0.02)                 0.14
    Adjustments: 
     - Share-based           0.08                   0.05
    compensation
     - Amortization of
    acquired intangible      0.04                   0.02
    assets
     - Change in fair value
    of contingent            -                      (0.01)
    consideration payable
    for M&A
     - Merger related costs, 0.02                   -
    net of tax effect
    Non-GAAP net income per
    ADS
    Diluted                  0.12                   0.20
Effective on November 9, 2012, the Company adjusted the ratio of its ADSs to
common shares that effectively resulted in a 1:1.3622 split for its ADSs. All
number of shares and earnings per ADS figures in this announcement give effect
to the forgoing ADS to share ratio change.

                Unaudited historical      Unaudited historical      Unaudited historical      Unaudited Pro forma
                consolidated net revenues consolidated net revenues consolidated net revenues consolidated net revenues
                of Pactera for the three  of Hisoft for the three   of VanceInfo for the      for the three months
                months ended March        months ended March        three months ended March  ended March 31, 2012
                31, 2013                  31, 2012                  31, 2012
 Proforma Net
 Revenue by
 Service Lines
 IT Services    81,529                    39,284                    40,022                    79,306
  - CPS         29,199                    13,613                    9,760                     23,373
  - ADM         52,330                    25,671                    30,262                    55,933
 R&D Services   68,057                    26,204                    43,479                    69,683
 BPO            2,734                     -                         2,609                     2,609
 Total          152,320                   65,488                    86,110                    151,598
 Proforma Net
 Revenue by
 Industry
 High Tech      97,291                    35,014                    61,220                    96,234
 BFSI           34,211                    18,433                    13,876                    32,309
 Manufacturing  15,996                    5,570                     8,460                     14,030
 Others         4,822                     6,471                     2,554                     9,025
 Total          152,320                   65,488                    86,110                    151,598
 Proforma Net
 Revenue by
 Location of
 Client's
 Headquarter
 United States  60,351                    29,862                    30,311                    60,173
 Greater China  57,117                    14,763                    40,200                    54,963
 Europe         14,217                    4,538                     10,678                    15,216
 Japan          13,282                    13,411                    3,358                     16,769
 Asia South     7,353                     2,914                     1,563                     4,477
 Total          152,320                   65,488                    86,110                    151,598
 Note: 
 The accompanying unaudited pro forma net revenues for the three months ended March 31, 2012  is prepared based on the
 assumption that the merger of HiSoft and VanceInfo was consummated on January 1, 2012.  No adjustment has been made to
 unaudited historical consolidated net revenues to give effect to such pro forma event.  The unaudited pro forma net
 revenues are being provided for information purposes only as Pactera believes that such data provide meaningful
 supplemental information for investors to compare the performance of Pactera with the pre-merger HiSoft and VanceInfo
 for the corresponding periods.  Such data do not purport to represent what the actual consolidated results of
 operations or the consolidated balance sheet of the combined company would have been had the merger occurred on the
 dates assumed, nor are they necessarily indicative of the combined company's future consolidated results of
 operations.
  
 For the pro forma net revenues for the three months ended March 31, 2012, it combined the unaudited historical
 consolidated net revenues of the former Hisoft and former VanceInfo for the three months ended March 31, 2012.

For further information, please contact:

Sheryl Zhang
Investor Relations
Pactera Technology International Ltd.
Tel: +86-10-8282-5330
E-mail: ir@pactera.com

 

 

 

SOURCE Pactera Technology International Ltd.

Website: http://www.pactera.com
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