CDC Corporation Fourth Quarter 2010 Operating Cash Flow Up 65 Percent From Fourth Quarter 2009
CDC Corporation (NASDAQ: CHINA),a leading China-based value-added operator of, and growth investor in, hybrid (SaaS/On-Premise) enterprise software, IT Services, and New Media assets, today announced financial results for the quarter ended December 31, 2010. For the fourth quarter of 2010, operating cash flow increased 65 percent to $8.9 million, compared to $5.4 million in the fourth quarter of 2009. In addition, CDC Corporation ended fiscal year 2010 with Non-GAAP cash and cash equivalents (a) of approximately $111.8 million.
For the fourth quarter of 2010, CDC Corporation reported Non-GAAP revenue (a) of $83.9 million and Adjusted EBITDA (a) of $6.5 million, compared to Non-GAAP revenue of $83.6 million and Adjusted EBITDA of $12.8 million for the fourth quarter of 2009.
For the year ended December 31, 2010, Non-GAAP revenue was $322.5 million and Adjusted EBITDA was $31.0 million, compared to Non-GAAP revenue of $320.8 million and Adjusted EBITDA of $41.5 million for the full year in 2009. In the fourth quarter of 2010, the company recorded non-cash restructuring charges of approximately $17.5 million related to goodwill impairment, litigation and other restructuring related expenses. Excluding certain non-cash, restructuring and other charges of $51.3 million, as depicted herein, CDC Corp reported $31.0 million of adjusted EBITDA for the 2010.
“We are very pleased with our strong operating cash flow which increased 65 percent in the fourth quarter of 2010, compared to the prior year period,” said Peter Yip, CEO of CDC Corporation. “With the many forward-thinking strategies we have in place, we believe we are well positioned for long-term growth and improved shareholder returns. For instance, CDC Software’s cash flow from continuing operations rose 99 percent in the fourth quarter of 2010, compared to the fourth quarter of 2009. CDC Software also reported strong growth in its Cloud segment in the fourth quarter 2010. Also, our focus on profitability and growth at CDC Games has paid off. CDC Games reported a 40 percent Adjusted EBITDA margin in the fourth quarter of 2010 compared to a 7 percent Adjusted EBITDA margin in the fourth quarter of 2009, and an impressive 480 percent increase in Adjusted EBITDA in the fourth quarter of 2010, compared to the fourth quarter of 2009. Our strategy on controlling expenses in such a competitive games market has clearly been effective. CDC Global Services has also continued to invest significantly in its offshore development business in China which it believes is a market that will experience rapid growth in the next few years. Further validating our value-added investment approach, China.com has invested in a China-based private equity fund whose audited results as of December 31, 2010, indicates that it has achieved a return multiple of approximately 4 times (c). This investment is accounted for under the cost basis of accounting, therefore, the return is not reflected fully in our financial statements. As a result of this superior performance, we are planning more co-investments with this PE Fund and potential partnerships with its investees in China.”Below is a summary of the financial results of CDC Corporation’s core portfolio of assets.
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