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EFuture Announces First Quarter 2013 Unaudited Financial Results

Further information regarding these and other risks will be included in eFuture's annual report on Form 20-F and other documents filed with the SEC. All information provided in this press release and in the attachments is as of March 18, 2013, and the Company undertakes no duty to update such information or any other forward-looking information, except as required under applicable law.

 
EFUTURE INFORMATION TECHNOLOGY INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED INCOME STATEMENTS
     Exchange rate  6.2108
  Three months ended  
  Chinese Yuan (Renminbi)  U.S. Dollars 
  March 31, March 31, March 31,
  2012 2013 2013
  (Unaudited) (Unaudited) (Unaudited)
       
Revenues      
Software revenue 8,412,028 6,646,324 1,070,124
Hardware revenue 2,239,545 4,217,293 679,026
Service fee revenue 12,600,868 11,657,729 1,877,009
Total Revenues 23,252,441 22,521,346 3,626,159
       
Cost of revenues      
Cost of software revenue 1,814,991 387,062 62,321
Cost of hardware revenue 1,771,285 3,721,975 599,275
Cost of service fee revenue 8,370,311 8,611,539 1,386,543
Amortization of acquired technology 1,728,887 214,500 34,537
Amortization of software costs 617,728 864,806 139,242
Total Cost of Revenues 14,303,202 13,799,882 2,221,917
       
Gross Profit 8,949,239 8,721,464 1,404,242
       
Operating Expenses      
Research and development expenses 518,940 826,142 133,017
General and administrative expenses 6,543,862 6,029,308 970,778
Selling and distribution expenses 7,138,482 9,160,438 1,474,921
Total Operating Expenses 14,201,284 16,015,888 2,578,716
       
Loss from operations (5,252,045) (7,294,424) (1,174,474)
       
Other income (expenses)      
Interest income 193,036 158,917 25,587
Gains on derivative liabilities 3,168 -- --
Other income/(expenses) (14,584) 436 70
Foreign currency exchange loss (2,348) (12,334) (1,986)
Loss before income tax (5,072,773) (7,147,405) (1,150,803)
Less: Income tax benefit (178,178) (1,107,106) (178,255)
Net loss (4,894,595) (6,040,299) (972,548)
Loss per share      
Basic (1.19) (1.42) (0.23)
Diluted (1.19) (1.42) (0.23)
Basic Weighted-average Shares Outstanding 4,130,221 4,254,676 4,254,676
Fully-Diluted Weighted-average Shares Outstanding 4,130,221 4,254,676 4,254,676
 
EFUTURE INFORMATION TECHNOLOGY INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
    Exchange rate 6.2108
  Chinese Yuan (Renminbi)  U.S. Dollars 
  December 31, March 31, March 31,
  2012 2013 2013
  (Audited) (Unaudited) (Unaudited)
ASSETS      
Current assets      
Cash and cash equivalents 79,373,365 43,614,189 7,022,314
Trade receivables, net of allowance for doubtful accounts of ¥2,811,934 and ¥4,044,378($651,185), respectively 25,182,508 23,787,970 3,830,098
Refundable value added tax 5,000,709 2,643,445 425,621
Advances to employees 1,365,995 1,411,254 227,226
Advances to suppliers -- 19,214 3,094
Other receivables due from previously consolidated entities 405,000 305,000 49,108
Other receivables 2,174,556 2,279,056 366,950
Prepaid expenses 1,134,602 1,314,582 211,661
Inventory and work in process, net of inventory provision of ¥2,467,133 and ¥2,194,750 ($353,376), respectively 19,299,732 28,803,542 4,637,654
Total current assets 133,936,467 104,178,252 16,773,725
Non-current assets      
Long-term investments, net of impairment of ¥240,000 and ¥240,000($38,642), respectively -- -- --
Property and equipment, net of accumulated depreciation of ¥7,472,485 and ¥7,966,378 ($1,282,665), respectively 4,357,965 4,002,262 644,404
Intangible assets, net of accumulated amortization of ¥72,771,017 and ¥73,850,323 ($11,890,630), respectively 22,216,204 24,938,994 4,015,424
Goodwill 80,625,667 80,625,667 12,981,527
Deferred tax assets 7,899,110 8,974,040 1,444,909
Total non-current assets 115,098,946 118,540,963 19,086,263
Total assets 249,035,413 222,719,215 35,859,988
       
LIABILITIES AND EQUITY      
Current liabilities      
Trade payables 17,548,846 11,752,326 1,892,240
Other payables 16,920,421 12,156,431 1,957,305
Accrued expenses 25,196,276 11,590,854 1,866,242
Taxes payable 16,128,906 14,402,085 2,318,878
Advances from customers 47,519,612 52,700,644 8,485,323
Deferred tax liabilities, current portion 42,900 10,725 1,727
Total current liabilities 123,356,961 102,613,065 16,521,715
       
Equity      
Ordinary shares, $0.0756 U.S. dollars par value; 6,613,756 shares authorized; 3,977,221 shares and 3,978,721 shares issued and outstanding, respectively 2,353,068 2,353,773 378,981
Additional paid-in capital 231,195,613 231,662,905 37,300,010
Treasury stocks (1,602,451) (1,602,451) (258,010)
Statutory reserves 5,914,384 5,914,384 952,274
Accumulated deficits (112,182,162) (118,222,461) (19,034,981)
Total equity 125,678,452 120,106,150 19,338,274
Total liabilities and equity 249,035,413 222,719,215 35,859,988
       
EFUTURE INFORMATION TECHNOLOGY INC. AND SUBSIDIARIES      
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS      
    Exchange rate 6.2108
  Three months ended  
  Chinese Yuan (Renminbi)  U.S. Dollars 
  March 31, March 31, March 31,
  2012 2013 2013
  (Unaudited) (Unaudited) (Unaudited)
Cash flows from operating activities:      
       
Net loss (4,894,595) (6,040,299) (972,548)
Adjustments to reconcile net loss to net cash flows used in operating activities:      
Depreciation of property and equipment 486,900 493,893 79,522
Amortization of intangible assets 2,346,615 1,079,306 173,779
Gains on derivative liabilities (3,168) -- --
Allowance for doubtful accounts 581,272 1,595,283 256,856
Compensation expenses 1,133,044 467,997 75,352
Deferred income taxes (178,178) (1,107,105) (178,255)
Foreign exchange loss 2,330 10,265 1,653
Changes in assets and liabilities:      
Trade receivables 3,409,359 (179,990) (28,980)
Refundable value added tax (987,849) 2,357,264 379,543
Advances to employees (321,890) (66,014) (10,629)
Advances to suppliers (26,847) (19,214) (3,094)
Other receivables (5,890,955) (4,500) (725)
Prepaid expenses (45,887) (179,980) (28,979)
Inventory and work in process (4,803,565) (9,503,810) (1,530,207)
Trade payables (1,626,040) (5,796,520) (933,297)
Other payables (1,426,740) (4,763,990) (767,049)
Accrued expenses (5,396,759) (13,605,422) (2,190,607)
Taxes payable (2,382,585) (1,726,821) (278,035)
Advances from customers 504,897 5,181,032 834,197
Net cash used in operating activities (19,520,641) (31,808,625) (5,121,502)
       
Cash flows from investing activities:      
Purchases of property and equipment (1,330,362) (140,090) (22,556)
Payments for intangible assets (3,218,492) (3,802,096) (612,175)
Cash received from disposal of property and equipment -- 1,900 306
Net cash used in investing activities (4,548,854) (3,940,286) (634,425)
       
Cash flows from financing activities:      
Net cash used in financing activities -- -- --
       
Effect of exchange rate changes on cash and cash equivalents (2,330) (10,265) (1,653)
       
Net decrease in cash and cash equivalents (24,071,825) (35,759,176) (5,757,580)
       
Cash and cash equivalents at beginning of period 57,157,078 79,373,365 12,779,894
Cash and cash equivalents at end of period 33,085,253 43,614,189 7,022,314
       
Supplemental cash flow information      
Income tax paid 809,005 130,571 21,023
 
EFUTURE INFORMATION TECHNOLOGY INC. AND SUBSIDIARIES
NON-GAAP MEASURES OF PERFORMANCE
     Exchange rate 6.2108
       
  Three months ended  
  Chinese Yuan (Renminbi)  U.S. Dollars   
  March 31, March 31, March 31,
  2012 2013 2013
  (Unaudited) (Unaudited) (Unaudited)
NON-GAAP OPERATING LOSS AND ADJUSTED EBITDA      
       
Operating loss (GAAP Basis) (5,252,045) (7,294,424) (1,174,474)
       
Adjustments for non-GAAP measures of performance:      
Add back amortization of acquired software technology 1,728,887 214,500 34,537
Add back amortization of intangibles 617,728 864,806 139,242
Add back share-based compensation expenses 1,133,044 467,997 75,352
Adjusted non-GAAP operating loss (1,772,386) (5,747,121) (925,343)
Add back depreciation 486,900 493,893 79,522
Adjusted EBITDA (Earnings before interest, taxes, depreciation and amortization) (1,285,486) (5,253,228) (845,821)
       
NON-GAAP OPERATING LOSS AND ADJUSTED EBITDA, as a percentage of revenue      
Operating loss (GAAP BASIS) -23% -32% -32%
       
Adjustments for non-GAAP measures of performance:      
Amortization of acquired software technology 7% 1% 1%
Amortization of intangibles 3% 4% 4%
Share-based compensation expenses 5% 2% 2%
Adjusted non-GAAP operating loss -8% -26% -26%
Depreciation 2% 2% 2%
Adjusted EBITDA (Earnings before interest, taxes, depreciation and amortization) -6% -23% -23%
       
NON-GAAP EARNINGS PER SHARE      
       
Net loss  (4,894,595) (6,040,299) (972,548)
Amortization of acquired software technology 1,728,887 214,500 34,537
Amortization of intangibles 617,728 864,806 139,242
Share-based compensation expenses 1,133,044 467,997 75,352
Adjusted Net Loss (1,414,936) (4,492,996) (723,417)
Adjusted non-GAAP diluted loss per share (0.34) (1.06) (0.17)
Shares used to compute non-GAAP diluted earnings per share 4,130,221 4,254,676 4,254,676
CONTACT: Investor Contact:
         Troe Wen, Company Secretary
         eFuture Information Technology Inc.
         +86 10 52937699
         ir@e-future.com.cn

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