CDC Software Corp., a hybrid enterprise software provider of on-premise and cloud deployments, posted its financial results for the fourth quarter and year ended December 31, 2010, and noted the fourth-quarter introduction of several new products and version upgrades for its core on-premise ERP, supply chain management and complaint management applications.
Fourth quarter 2010 Non-GAAP net income was $5.7 million, or $0.20 in Non-GAAP earnings per share, compared to Non-GAAP net income of $10.8 million, or $0.37 in Non-GAAP earnings per share, in the fourth quarter of 2009.
The company reported fourth quarter 2010 Adjusted EBITDA at $9.0 million, compared to $14.1 million in the fourth quarter of 2009. Fourth quarter 2010 Adjusted EBITDA margin was 16 percent, compared to 26 percent in the fourth quarter of 2009. The company attributes the drop in profitability primarily to transition costs for the company’s cloud business and related investments needed to expand the business.
Fourth quarter of 2010, non-GAAP revenue improved to $57.6 million, compared to Non-GAAP revenue of $55.0 million in the fourth quarter of 2009.
As of December 31, 2010, the company had total cash and cash equivalents of $44.7 million as of December 31, 2010, compared to $40.3 million as of December 31, 2009.
CDC Software reported a 37 percent increase in its research and development expenses compared to fourth quarter of 2009 as it worked on developing numerous cloud integration projects, new cloud products, and the development of a “significant deliverable” expected to launch in the second quarter of 2011.
“Overall, we are pleased with meeting our Non-GAAP EPS guidance for 2010, as well as our double digit top line growth, 22 percent growth in application sales and 99 percent increase in cash flow from operations in the fourth quarter 2010 over the fourth quarter of 2009,” Bruce Cameron, president of CDC Software stated in the press release.
Cameron said the company is on track to grow its cloud business with increased investments in its research & development, justifiable with anticipations that the cloud market is positioned for strong growth in the next five years.
“We are very pleased with our financial results and meeting our Non-GAAP EPS guidance for 2010, as well as the progression of our cloud business in the fourth quarter of 2010, which was highlighted by a strong sales performance,” said Peter Yip, CEO of CDC Software. “Despite our increased spending to grow our cloud business, our EPS remained one of the highest compared to our select industry peer group. We plan to continue investing in our cloud business since we believe the cloud market presents significant revenue opportunities for us. Already these investments have been showing solid results since we have grown TCB from $104.4 million at the end of fourth quarter 2009 to $136.5 million at the end of fourth quarter 2010. With that goal, along with our steady growth in TCB, we have continued to make progress on our previously announced goal to develop recurring revenue streams reaching closer to 70 percent of total revenue over the next few years.”
For more information visit www.cdcsoftware.com