Pactera Announces Second Quarter 2013 Financial Results

           Pactera Announces Second Quarter 2013 Financial Results

PR Newswire

BEIJING, Aug. 19, 2013

BEIJING, Aug. 19, 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 second quarter of 2013 ended
June 30, 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.

Second Quarter 2013 Financial and Operational Highlights

  oNet revenues for the second quarter of 2013 were $163.1 million,as
    compared to $71.8 million for the second quarter of 2012.
  oGAAP diluted net loss per ADS for the second quarter of 2013 was $0.01.
    Non-GAAP diluted net income per ADS[1] for the second quarter of 2013 was
    $0.14.
  oTotal full-time employees as of June 30, 2013 were 20,019, including
    17,945 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 earnings release.

"The second quarter of 2013 was a challenging but improving quarter for
Pactera," said Mr. Tiak Koon Loh, Chief Executive Officer of Pactera. "Our
topline momentum was impacted by continued headwinds from our major telecom
customer, the adverse effect of Japanese currency depreciation, and some
client specific business challenges.However, both gross margin and operating
efficiency improved towards our targeted direction.The MOE integration
remains on track and we expect our business to resume a more stable growth
trajectory in the coming quarters."

Second Quarter 2013 Financial Results

Net Revenues

Net revenues were $163.1 million for the second quarter of 2013 as compared to
$71.8 million for the second quarter of 2012, reflecting a decrease of 2.1%
from $166.5 million of the pro forma net revenues[2] for the corresponding
period in 2012. Excluding the company's major telecom customer, net revenues
for the second quarter of 2013 would have increased 6.6% from the pro forma
net revenues for the corresponding period in 2012.

[2] Pro forma net revenues of the Company for the second quarter of 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 ("CPS") services and application development, testing and
maintenance ("ADM") services.

Net revenues from IT services were $95.0 million for the second quarter of
2013, which increased 10.0% from $86.4 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 from both of our ADM and CPS
services.

Net revenues from R&D services were $65.2 million for the second quarter of
2013, compared to $76.6 million of the pro forma net revenues for the
corresponding period in 2012. The decline in net revenues from R&D services
was mainly due to a decrease in the revenue derived from our major telecom
customer. Excluding the company's major telecom customer, net revenues for the
second quarter of 2013 would have increased 7.4% from the pro forma net
revenues for the corresponding period in 2012.

Net Revenues by Service Line

                   Three Months Ended  Three Months Ended 
                   June 30, 2013             June 30, 2012
                   ($ in thousands, except percentages)
IT Services        94,990        58.2%       41,594      58.0%
CPS Services       31,166        19.1%       16,763      23.4%
ADM Services       63,824        39.1%       24,831      34.6%
R&D Services       65,165        40.0%       30,175      42.0%
BPO                2,895         1.8%        -           -
Total Net Revenues 163,050       100.0%      71,769      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 Ended Year-over-Year 
                   June 30,  2013     June 30, 2012      %
                                                         Change
                   ($ in thousands, except percentages)
IT Services        94,990    58.2%    86,362    51.9%    10.0%
CPS Services       31,166    19.1%    28,444    17.1%    9.6%
ADM Services       63,824    39.1%    57,918    34.8%    10.2%
R&D Services       65,165    40.0%    76,611    46.0%    (14.9)%
BPO                2,895     1.8%     3,539     2.1%     (18.2)%
Total Net Revenues 163,050   100.0%   166,512   100.0%   (2.1)%

Net Revenues by Geographic Markets

Based on the location of clients' headquarters, net revenues from clients
headquartered in the United States were $66.0 million or 40.5% of the net
revenues for the second quarter of 2013, followed by 37.7% from Greater China,
9.2% from Europe, 7.5% from Japan and 5.1% from Asia South.

Net Revenues based on Location of Clients' Headquarters

                   Three Months Ended  Three Months Ended 
                   June 30, 2013              June 30, 2012
                   ($ in thousands, except percentages)
United States      65,999        40.5%        33,387        46.5%
Greater China      61,513        37.7%        17,442        24.3%
Europe             15,066        9.2%         4,846         6.8%
Japan              12,209        7.5%         13,749        19.2%
Asia South         8,263         5.1%         2,345         3.2%
Total Net Revenues 163,050       100.0%       71,769        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 %
                   June 30, 2013      June 30, 2012      Change
                   ($ in thousands, except percentages)
United States      65,999    40.5%    66,013    39.6%    (0.0)%
Greater China      61,513    37.7%    63,042    37.9%    (2.4)%
Europe             15,066    9.2%     14,424    8.7%     4.5%
Japan              12,209    7.5%     18,167    10.9%    (32.8)%
Asia South         8,263     5.1%     4,866     2.9%     69.8%
Total Net Revenues 163,050   100.0%   166,512   100.0%   (2.1)%

Measuring Pactera's net revenues based on the location of contract signing
entity, Greater China accounted for 59.2% of net revenues in the second
quarter of 2013, while the United States accounted for 20.8%, Asia South
accounted for 10.5%, Japan accounted for 7.6% and Europe accounted for 1.9%.

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
                   June 30, 2013 June 30, 2012
                   ($ in thousands, except percentages)
High Tech          96,773     59.4%    36,407     50.7%
BFSI               40,934     25.1%    21,932     30.6%
Manufacturing      21,455     13.2%    10,887     15.2%
Others             3,888      2.3%     2,543      3.5%
Total Net Revenues 163,050    100.0%   71,769     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 
                   June 30, 2013      June 30, 2012      %
                                                         Change
                   ($ in thousands, except percentages)
High Tech          96,773    59.4%    103,878   62.4%    (6.8)%
BFSI               40,934    25.1%    37,345    22.4%    9.6%
Manufacturing      21,455    13.2%    20,598    12.4%    4.2%
Others             3,888     2.3%     4,691     2.8%     (17.1)%
Total net revenues 163,050   100.0%   166,512   100.0%   (2.1)%

Largest Clients

Net revenues from Pactera's top five and top ten clients accounted for 31.1%
and 40.6% of net revenues, respectively, during the second quarter of 2013,
compared to 38.7% and 48.1% respectively, on a pro forma basis for the
corresponding period in 2012.

Gross Profit and Gross Margin

Gross profit was $44.9 million for the second quarter of 2013, compared to
$25.6 million for the corresponding period in 2012. Gross margin was 27.5%
for the second quarter of 2013.

Operating Expenses

Total operating expenses were $46.5 million for the second quarter of 2013
compared to $18.9 million for the corresponding period in 2012. Operating
expenses in the second quarter of 2013 reflected $4.0 million of
merger-related transaction and integration costs, mainly including facilities
and system integration expenses.

Operating Income (Loss) and Operating Margin

Operating loss for the second quarter of 2013 was $1.6 million, compared to an
operating income of $6.7 million for the corresponding period in 2012.
Non-GAAP operating income for the second quarter in 2013 was $11.3 million, as
compared to $9.8 million in the corresponding period in 2012.

Operating margin was negative 1.0% for the second quarter of 2013, compared to
9.3% for the same period in 2012. Non-GAAP operating margin was 6.9% for the
second quarter of 2013.

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

Net loss attributable to Pactera was $1.0 million for the second quarter of
2013, compared to a net income of $6.4 million for the corresponding period in
2012. Non-GAAP net income was$11.5 million for the second quarter of 2013,
compared to $9.4 million for the same period in 2012. Non-GAAP diluted net
income per ADS was $0.14 in the second quarter of 2013, compared to $0.22 in
the corresponding period of 2012.

Cash Flow and DSO

As of June 30, 2013, Pactera had cash and cash equivalents, restricted cash,
term deposits and short-term investment totaling $126.3 million. Operating
cash flow for the second quarter of 2013 was a net inflow of approximately
$2.6 million. Days sales outstanding ("DSO") was 141 days for the quarter and
131 days for the last 12 months on a pro forma basis.

First Half 2013 Financial Results

Net Revenues

Net revenues were $315.4 million for the first half of 2013 as compared to
$137.3 million for the first half of 2012 and $318.1 million of the pro forma
net revenues for the corresponding period in 2012.

Net Revenues by Service Line

Net Revenues by Services Line

                   Six Months Ended   Six Months Ended
                   June 30, 2013      June 30, 2012
                   ($ in thousands, except percentages)
IT Services        176,519   55.9%    80,878    58.9%
CPS Services       60,365    19.1%    30,376    22.1%
ADM Services       116,154   36.8%    50,502    36.8%
R&D Services       133,222   42.3%    56,379    41.1%
BPO                5,629     1.8%     -         -
Total Net Revenues 315,370   100.0%   137,257   100.0%

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

                   Six Months Ended Six Months Ended  Year-over-Year 
                   June 30, 2013    June 30, 2012       %
                                                        Change
                   ($ in thousands, except percentages)
IT Services        176,519  55.9%   165,668    52.1%    6.5%
CPS Services       60,365   19.1%   51,817     16.3%    16.5%
ADM Services       116,154  36.8%   113,851    35.8%    2.0%
R&D Services       133,222  42.3%   146,294    46.0%    (8.9)%
BPO                5,629    1.8%    6,148      1.9%     (8.4)%
Total Net Revenues 315,370  100.0%  318,110    100.0%   (0.9)%

Net Revenues by Geographic Markets

Based on the location of clients' headquarters, net revenues from clients
headquartered in the United States were $126.3 million in the first half of
2013, followed by $118.6 million from Greater China, $29.3 million from
Europe, $25.5 million from Japan and $15.6 million from Asia South.

Net Revenues based on Location of Clients' Headquarters

                   Six Months Ended   Six Months Ended
                   June 30, 2013      June 30, 2012
                   ($ in thousands, except percentages)
United States      126,349   40.1%    63,249    46.1%
Greater China      118,630   37.6%    32,205    23.5%
Europe             29,283    9.3%     9,384     6.8%
Japan              25,492    8.1%     27,160    19.8%
Asia South         15,616    4.9%     5,259     3.8%
Total Net Revenues 315,370   100.0%   137,257   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)

                   Six Months Ended Six Months Ended  Year-over-Year %
                   June 30, 2013    June 30, 2012       Change
                   ($ in thousands, except percentages)
United States      126,349  40.1%   126,186    39.7%    0.1%
Greater China      118,630  37.6%   118,005    37.1%    0.5%
Europe             29,283   9.3%    29,640     9.3%     (1.2)%
Japan              25,492   8.1%    34,936     11.0%    (27.0)%
Asia South         15,616   4.9%    9,343      2.9%     67.1%
Total Net Revenues 315,370  100.0%  318,110    100.0%   (0.9)%

Measuring Pactera's net revenues based on the location of contract signing
entity, Greater China accounted for 58.8% of net revenues in the first half of
2013, while the United States accounted for 21.3%, Asia South accounted for
10.2%, Japan accounted for 8.1% and Europe accounted for 1.6%.

Net Revenues by Industry

Net Revenues by Industry

                   Six Months Ended   Six Months Ended
                   June 30, 2013      June 30, 2012
                   ($ in thousands, except percentages)
High Tech          194,064   61.5%    71,421    52.0%
BFSI               75,145    23.8%    40,365    29.4%
Manufacturing      37,451    11.9%    20,857    15.2%
Others             8,710     2.8%     4,614     3.4%
Total Net Revenues 315,370   100.0%   137,257   100.0%

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

                   Six Months Ended Six Months Ended  Year-over-Year 
                   June 30, 2013    June 30, 2012      %
                                                       Change
                   ($ in thousands, except percentages)
High Tech          194,064  61.5%   200,112   62.9%    (3.0)%
BFSI               75,145   23.8%   69,654    21.9%    7.9%
Manufacturing      37,451   11.9%   39,028    12.3%    (4.0)%
Others             8,710    2.8%    9,316     2.9%     (6.5)%
Total net revenues 315,370  100.0%  318,110   100.0%   (0.9)%

Largest Clients

Net revenues from Pactera's top five and top ten clients accounted for 32.6%
and 41.9% of net revenues, respectively, during the first half of 2013,
compared to 39.3% and 49.0% respectively, on a pro forma basis for the
corresponding period in 2012.

Gross Profit and Gross Margin

Gross profit was $84.3 million for the first half of 2013, compared to $48.5
million in the first half of 2012. Gross margin was 26.7% during the first
half of 2013.

Operating Expenses

Total operating expenses were $89.7 million for the first half of 2013
compared to $35.3 million for the corresponding period in 2012. Operating
expenses in the first half of 2013 reflected $6.4 million of merger-related
transaction and integration costs including professional fees, severance
costs, and facilities and system integration expenses.

Operating Income and Operating Margin

Operating loss for the first half of 2013 was $5.4 million, compared to an
operating income of $13.2 million for the corresponding period in 2012.
Non-GAAP operating income for the first half of 2013 was $19.6 million, as
compared to $18.9 million for the corresponding period in 2012.

Operating margin was negative 1.7% for the first half of 2013, and non-GAAP
operating margin was 6.2% for the first half of 2013.

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

Net loss attributable to Pactera was $2.7 million for the first year of 2013,
compared to net income $12.4 million for the corresponding period in 2012.
Non-GAAP net income was $21.6 million for the first half of 2013, compared to
$18.1 million for the corresponding period in 2012. Non-GAAP diluted net
income per ADS was $0.25 for the first half year of 2013, compared to $0.42
for the corresponding period in 2012.

Recent Development

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$7.50per 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 Third Quarter and Full Year 2013

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

  oNet revenues to be at least $173.0 million, compared to $175.8 million in
    the third quarter of 2012 on a pro-forma basis. Excluding the revenues
    from our major telecom customer in both periods, this represents an
    increase of at least approximately 7.8% from the third quarter 2012.
  oNon-GAAP diluted net income per ADS to be at least $0.17, 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:

  oExcluding the revenues from our major telecom customer for both 2012 and
    2013, net revenues to be between $620 million and $625 million,
    representing an increase between 7% and 8% from the 2012 pro forma
    revenues of $577 million. Based on our current visibility, we estimate net
    revenues from our major telecom customer to be approximately $45 million,
    which would result in a total net revenue for the Company to be between
    $665 million and $670 million in 2013, compared to $673 million in 2012 on
    a pro forma basis.
  oNon-GAAP diluted net income per ADS to be in the range of $0.63 to $0.68,
    estimated based on 85.0 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 Monday, August
19, 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:                      23897532

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 August 27,
2013:

U.S. Toll Free Dial-in Number: +1.855.452.5696
International Dial-in Number:  + 61.2.8199.0299
Passcode:                      23897532

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, as well as the
consideration of the going private proposal and the impact on the Company
resulting from the success or failure of that proposal. 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 transaction and integration costs, change in fair value
of contingent consideration payable for business acquisition, and compensation
expenses related to acquisition. 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 earnings release.

PACTERA TECHNOLOGY INTERNATIONAL LTD.
Condensed Consolidated Balance Sheets (Unaudited)
(US dollars in thousands, except share data)
                                   June 30, 2013          December 31, 2012
ASSETS
Current Assets
Cash                               95,100                 143,714
Restricted cash                    1,484                  6,112
Term deposits                      28,072                 58,485
Short-term investment              1,615                  1,765
Accounts receivable, net           267,121                230,693
Other current assets               40,393                 37,435
Total current assets               433,785                478,204
Property, plant and                69,364                 67,607
equipment, net
Goodwill and intangible            151,495                157,962
assets, net
Other long-term assets             35,121                 33,833
Total assets                       689,765                737,606
LIABILITIES AND EQUITY
Current liabilities                151,610                163,152
Other liabilities                  21,002                 32,130
Total liabilities                  172,612                195,282
Total shareholder's equity         517,153                542,324
Total liabilities and equity       689,765                737,606
Note:
As of June 30,2013, there were 85,649,706 common shares (85,649,706 ADSs)
issued and outstanding.
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 June 30,   Six months ended June 30,
                       2013             2012         2013          2012
Net revenues           163,050          71,769       315,370       137,257
Cost of revenues       (118,195)        (46,132)     (231,045)     (88,743)
Gross profit           44,855           25,637       84,325        48,514
Operating expenses     (46,482)         (18,929)     (89,681)      (35,273)
(Loss) income from     (1,627)          6,708        (5,356)       13,241
operations
Other income           687              1,010        1,245         2,055
Exchange difference    (308)            399          (1,201)       (81)
Net (loss) income
before income tax      (1,248)          8,117        (5,312)       15,215
expenses
Income tax benefit    218              (1,395)      2,601         (2,282)
(expenses)
(Loss) income before
earning in equity      (1,030)          6,722        (2,711)       12,933
method investment
Earning in equity      44               -            53            -
method investment
(Loss) income after
earning in equity      (986)            6,722        (2,658)       12,933
method investment
Add: Net profit
attributable to        -                (357)        -             (492)
noncontrolling
interest
Net (loss) income
attributable to
PacteraTechnology     (986)            6,365        (2,658)       12,441
International Ltd.
Net (loss) income per
share
Basic                  (0.01)           0.15         (0.03)        0.30
Diluted                (0.01)           0.15         (0.03)        0.29
Weighted average
shares used in
calculating net income
per
common share
Basic                  80,735,486       41,313,257   82,447,106    41,238,501
Diluted                80,735,486       43,274,913   82,447,106    43,111,429
Net (loss) income per
ADS
Basic                  (0.01)           0.15         (0.03)        0.30
Diluted                (0.01)           0.15         (0.03)        0.29
Weighted average ADS
used in calculating
net income per ADS
Basic                  80,735,486       41,313,257   82,447,106    41,238,501
Diluted                80,735,486       43,274,913   82,447,106    43,111,429
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 June  Six months ended June
                                30,                      30,
                                2013          2012       2013         2012
Net (loss) income               (986)         6,722      (2,658)      12,933
Other comprehensive income, net
of tax:
    Change in cumulative
    foreign exchange            (801)         (1,383)    (727)        (978)
    translation adjustment
Comprehensive (loss) income     (1,787)       5,339      (3,385)      11,955
Less: Comprehensive income
attributable to noncontrolling  -             (339)      -            (478)
interest
Comprehensive (loss) income
attributable to Pactera         (1,787)       5,000      (3,385)      11,477
Technology International Ltd.





PACTERA TECHNOLOGY INTERNATIONAL LTD.
Condensed Consolidated Statements of Cash flows(Unaudited)
(In U.S. dollars in thousands)
                                Three months ended June  Six months ended June
                                30,                      30,
                                2013          2012       2013        2012
Cash flows from operating
activities:
 Net (loss) income             (986)         6,722      (2,658)     12,933
 Adjustments to reconcile net (loss) income to net cash
 provided by (used in) operating activities:
   Provision for doubtful       (377)         58         19          89
   accounts
   Loss(gain) on disposal of
   property, plant and          3,128         -          3,557       (44)
   equipment
   Depreciation                 3,188         1,406      6,519       2,798
   Change in fair value of
   foreign-currency forward     (159)         36         (146)       45
   contract
   Amortization of intangible   2,653         1,165      5,357       2,208
   assets
   Amortization of land use     127           -          253         -
   right
   Share-based compensation     5,338         1,849      12,321      3,806
   expenses
   Changes in fair value of
   contingent consideration     734           35         526         (346)
   payable for M&A
   Earnings in equity method    (44)          -          (53)        -
   investment
 Changes in operating assets
 and liabilities:
   Accounts receivable          (20,864)      (11,331)   (37,244)    (19,732)
   Other current assets         (1,244)       (1,543)    (5,294)     (1,579)
   Other assets                 (724)         (173)      (694)       (238)
   Accounts payable             2,812         (533)      4,418       (1,276)
   Other liabilities            9,016         2,858      (15,928)    (684)
Net cash provided by (used in)  2,598         549        (29,047)    (2,020)
operating activities
Cash flows from investing
activities:
 Term deposits                  8,005         (13,442)   30,413      (14,712)
 Short-term investment          17,381        -          150         -
 Purchase of property, plant    (2,160)       (1,293)    (4,201)     (2,329)
 and equipment
 Purchase of buliding           (1,024)       -          (1,433)     -
 Restricted cash                (79)          (288)      4,609       (206)
 Deferred and contingent
 consideration paid for         -             (1,306)    (2,746)     (2,088)
 business acquisitions
Net cash provided by (used in)  22,123        (16,329)   26,792      (19,335)
investing activities
Cash flows from financing
activities:
 Repayment of bank loan         -             (183)      -           (183)
 Proceeds from issuance of
 common share                   1,622         213        2,592       1,270
 under employee option plan
 Deferred and contingent
 consideration paid for         (5,759)       -          (18,718)    (2,897)
 business acquisitions
 Repurchase of common share    (13,861)      -          (30,000)    -
Net cash (used in) provided by  (17,998)      30         (46,126)    (1,810)
financing activities
Effect of exchange rate         32            (883)      (233)       (266)
changes
Net increase (decrease) in      6,755         (16,633)   (48,614)    (23,431)
cash
Cash at beginning of period     88,345        107,058    143,714     113,856
Cash at end of period           95,100        90,425     95,100      90,425

 

 

 

 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 June  Six months ended June
                                                   30,                      30,
                                                   2013        2012         2013        2012
 GAAP operating (loss) income                      (1,627)     6,708        (5,356)     13,241
 GAAP operating (loss) margin                     (1.0)%      9.3%         (1.7)%      9.6%
 Adjustments:
 - Share-based compensation                       5,338       1,849        12,321      3,806
 - Amortization of acquired intangible assets     2,653       1,165        5,357       2,208
 -
 Changeinfairvalueofcontingentconsideration 734         35           526         (346)
 payableforM&A
 - Compensation expenses                          82          -            169         -
 related to acquisition
 - Merger-related transaction and integration     4,024       -            6,375       -
 costs
 - Land use right amortization expense            127         -            253         -
 Non-GAAP operating income                         11,331      9,757        19,645      18,909
 Non-GAAP operating margin                        6.9%        13.6%        6.2%        13.8%
 GAAP net (loss) income                            (986)       6,365        (2,658)     12,441
 GAAP net (loss) margin                            (0.6)%      8.9%         (0.8)%      9.1%
 Adjustments:
 - Share-based compensation                       5,338       1,849        12,321      3,806
 - Amortization of acquired intangible assets     2,653       1,165        5,357       2,208
 - Change in fair value of contingent
 consideration                                     734         35           526         (346)
 payable for M&A
 - Compensation expenses                          82          -            169         -
 related to acquisition
 - Merger-related transaction and integration     3,527       -            5,593       -
 costs, net of tax effect
 - Land use right amortization expense            127         -            253         -
 Non-GAAP net income                               11,475      9,414        21,561      18,109
 Non-GAAP net margin                               7.0%        13.1%        6.8%        13.2%
 Non-GAAP net income per ADS
 Basic                                             0.14        0.23         0.26        0.44
 Diluted                                           0.14        0.22         0.25        0.42
 Weighted average ADS used in calculating Non-GAAP
 net income per ADS
 Basic                                             80,735,486  41,313,257   82,447,106  41,238,501
 Diluted                                           83,195,404  43,274,913   85,111,351  43,111,429
 GAAP net (loss) income per ADS
 Basic                                             (0.01)      0.15         (0.03)      0.30
 Adjustments:
 - Share-based compensation                       0.06        0.05         0.15        0.09
 - Amortization of acquired intangible assets     0.04        0.03         0.06        0.06
 - Change in fair value of contingent             0.01        -            0.01        (0.01)
 consideration payable for M&A
 - Merger-related transaction and integration     0.04        -            0.07        -
 costs, net of tax effect
 Non-GAAP net income per ADS
 Basic                                             0.14        0.23         0.26        0.44
 GAAP net (loss) income per ADS
 Diluted                                           (0.01)      0.15         (0.03)      0.29
 Adjustments:
 - Share-based compensation                       0.06        0.04         0.14        0.09
 - Amortization of acquired intangible assets     0.04        0.03         0.06        0.05
 - Change in fair value of contingent             0.01        -            0.01        (0.01)
 consideration payable for M&A
 - Merger-related transaction and integration     0.04        -            0.07        -
 costs, net of tax effect
 Non-GAAP net income per ADS
 Diluted                                           0.14        0.22         0.25        0.42
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       Unaudited     Unaudited     Unaudited Pro
                     historical      historical    historical    forma
                     consolidated    consolidated  consolidated  consolidated
                     net revenues    net revenues  net revenues  net revenues
                     of Pactera for  of Hisoft for ofVanceInfo  for the three
                     the three       the three     for the three months
                     months ended    months ended  months ended  ended June
                     June            June          June          30,2012
                     30, 2013        30, 2012      30,2012
ProformaNet
Revenue by
Service Lines
IT Services          94,990          41,594        44,768        86,362
CPS Services         31,166          16,763        11,681        28,444
ADM Services         63,824          24,831        33,087        57,918
R&D Services         65,165          30,175        46,436        76,611
BPO                  2,895           -             3,539         3,539
Total                163,050         71,769        94,743        166,512
ProformaNet
Revenue by
Industry
High Tech            96,773          36,407        67,471        103,878
BFSI                 40,934          21,932        15,413        37,345
Manufacturing        21,455          10,887        9,711         20,598
Others               3,888           2,543         2,148         4,691
Total                163,050         71,769        94,743        166,512
ProformaNet Revenue by Location of
Client's Headquarter
United States        65,999          33,387        32,626        66,013
Greater China        61,513          17,442        45,600        63,042
Europe               15,066          4,846         9,578         14,424
Japan                12,209          13,749        4,418         18,167
Asia South           8,263           2,345         2,521         4,866
Total                163,050         71,769        94,743        166,512
Note:
The accompanying unaudited pro forma net revenues for the three months ended
June 30, 2013 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 June 30, 2012, it
combined the unaudited historical consolidated net revenues of the former
Hisoft and former VanceInfo for the three months ended June 30, 2012.
                     Unaudited       Unaudited     Unaudited
                     historical      historical    historical    Unaudited Pro
                     consolidated    consolidated  consolidated  forma
                     net revenues    net revenues  net revenues  consolidated
                     of Pactera for  of Hisoft for of VanceInfo net revenues
                     the six         the six       for the six   for the six
                     months ended    months ended  months ended  months ended
                     June            June          June          June 30,2012
                     30, 2013        30,2012      30,2012
Proforma Net
Revenue by
Service Lines
IT Services          176,519         80,878        84,790        165,668
CPS Services         60,365          30,376        21,441        51,817
ADM Services         116,154         50,502        63,349        113,851
R&D Services         133,222         56,379        89,915        146,294
BPO                  5,629           -             6,148         6,148
Total                315,370         137,257       180,853       318,110
Proforma Net
Revenue by
Industry
High Tech            194,064         71,421        128,691       200,112
BFSI                 75,145          40,365        29,289        69,654
Manufacturing        37,451          20,857        18,171        39,028
Others               8,710           4,614         4,702         9,316
Total                315,370         137,257       180,853       318,110
Proforma Net Revenue by Location of
Client's Headquarter
United States        126,349         63,249        62,937        126,186
Greater China        118,630         32,205        85,800        118,005
Europe               29,283          9,384         20,256        29,640
Japan                25,492          27,160        7,776         34,936
Asia South           15,616          5,259         4,084         9,343
Total                315,370         137,257       180,853       318,110
Note:
The accompanying unaudited pro forma net revenues for the six months ended
June 30, 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 six months ended June 30, 2012, it
combined the unaudited historical consolidated net revenues of the former
Hisoft and former VanceInfo for the six months ended June 30, 2012.

For further information, please contact:

Tracy Zhou
Investor Relations
Pactera Technology International Ltd.
Tel: +86-10-5987-5138
E-mail: ir@pactera.com

SOURCE Pactera Technology International Ltd.

Website: http://ir.pactera.com
Website: http://www.pactera.com