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BEIJING, China -- March 17, 2007 -- AsiaInfo Holdings, Inc.
(Nasdaq: ASIA), a provider of high-quality telecom software
solutions and information technology security products and
services in China, filed with its annual reports on Form 10-K
with the U.S. Securities and Exchange Commission.
For full-year 2006, the company reported net revenue of $86.7
million, representing a 16% increase over 2005 net revenue of
US$75.0 million. Gross revenue for the full year 2006 was
US$109.6 million, up by 21% from US$90.3 million in 2005. Gross
margin for 2006 was 40% compared to 41% for 2005.
AsiaInfo's operations are organized into two divisions --
AsiaInfo Technologies and Lenovo-AsiaInfo. For 2006,
approximately 92% of the company's total revenue was contributed
by AsiaInfo Technologies, while the remaining revenue was
contributed by Lenovo-AsiaInfo. AsiaInfo Technologies
encompasses the company's traditional telecommunications business
and provides software solutions to China's telecommunications
operators. Lenovo-AsiaInfo mainly provides IT security products
and services tailored for small to medium size companies.
Full year 2006 revenue from telecom software products and
solutions grew by 32% compared to 2005, leading to an 18%
increase in telecom net revenue for the year.
The Lenovo-AsiaInfo business unit's full year 2006 results
contributed 8% and 8% to the full year gross revenue and gross
profit, respectively, and 10% to 2006 net revenue.
Reflecting AsiaInfo's strategic focus on software products and
solutions, revenue from this area grew 28% for the year to
US$72.1 million from US$56.3 million in 2005. Service revenue
fell 25% to US$13.4 million from US$17.8 million in 2005, and
third party hardware revenue grew 49% to US$24.1 million from
US$16.1 million in 2005.
Net income from continued operations for 2006 was US$5.0 million,
or US$0.11 per basic share compared to a net loss of US$23.8
million, or US$0.53 per basic share, for 2005. Net income from
discontinued operations for 2006 was US$0.8 million, or US$0.02
per basic share while net loss from discontinued operations for
2005 was US$13.4 million, or US$0.30 per basic share in 2005.
AsiaInfo recorded a total net income of US$5.8 million for the
year, compared to a net loss of US$37.2 million in 2005.
Non-GAAP net income was US$8.1 million for the full year 2006 or
US$0.19 per basic share. Non-GAAP net loss in 2005 was US$14.4
million or US$0.32 per basic share.
AsiaInfo's full year net operating cash flow was US$35.8 million.
AsiaInfo expects first quarter 2007 net revenue to be US$23
million to US$24 million, representing 22% to 28% year-over-year
growth. Earnings per basic share from continuing operations for
the first quarter of 2007 is expected to be US$0.03 to US$0.04.
This is compared to earnings per basic share of US$0.01 in the
first quarter of 2006.
The company anticipates that the Lenovo-AsiaInfo business unit
will post a loss of US$0.6 million to US$0.8 million in the first
quarter due to seasonality in the business relating to the long
Chinese New Year holiday.
A full-text copy of AsiaInfo's annual report is available for
free at:
http://www.sec.gov/Archives/edgar/data/1100969/
000119312507053999/d10k.htm
AsiaInfo acquired the non-telecommunications-related IT services
division of Lenovo Group Limited in the fourth quarter of 2004,
in a transaction valued at approximately $36.8 million. In
connection with the acquisition, we formed a new division of our
company, named Lenovo-AsiaInfo, to focus on the non-
telecommunications IT services market in China. Subsequently,
AsiaInfo disposed of various non-core business lines from the
Lenovo-AsiaInfo division, which now focuses on the IT security
products and service market, targeting mainly small to medium
sized enterprises in China.
Shareholders' Meeting
AsiaInfo will hold its annual meeting of stockholders on April
24, 2007 at 3:00 p.m., local time, at 4th Floor, Zhongdian
Information Tower, 6 Zhongguancun South Street, Haidian District,
in Beijing, China for these purposes:
1. To elect three directors to serve for three-year terms to
expire at the 2010 Annual Meeting of stockholders and
until their successors are duly elected and qualified;
2. To ratify the selection of Deloitte Touche Tohmatsu as the
independent auditors of AsiaInfo for the fiscal year
ending Dec. 31, 2007; and
3. To transact such other business as may properly come
before the meeting or any adjournment thereof.
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