EX-99.1 2 a12-26460_1ex99d1.htm EX-99.1

Exhibit 99.1

 

 

Acquity Group Limited Reports Results for Third Quarter

 

and Nine Months Ended September 30, 2012

 

— Third Quarter Revenues Increased by 26.0% to $37.3 Million —

Nine Months Revenues up 41.1% to $107.2 million —

Third Quarter IFRS Operating Profit Increased by 15.1% to $6.4 Million

Nine Months IFRS Operating Profit up 51.5% to $17.7 million —

 

Chicago.  November 8, 2012 - Acquity Group Limited (“Acquity Group” or the “Company”) (NYSE MKT: AQ) today reported the following unaudited financial results for the third quarter and nine months ended September 30, 2012.

 

Financial highlights for the three month period ended September 30, 2012, compared to the three month period ended September 30, 2011

 

·                  Revenues increased by $7.7 million, or 26.0%, to $37.3 million, compared to $29.6 million for the three month period ended September 30, 2011.

 

·                  IFRS operating profit increased by $0.8 million, or 15.1%, to $6.4 million, or 17.2% of revenues, compared to $5.6 million, or 18.8% of revenues, for the three month period ended September 30, 2011.

 

·                  IFRS operating profit, excluding costs associated with our recent initial public offering and amortization of purchased intangible assets, increased by $0.1 million, or 1.3%, to $7.1 million, or 18.9% of revenues, compared to $7.0 million, or 23.5% of revenues, for the three month period ended September 30, 2011. Refer to the “Reconciliation of Non-IFRS Financial Measures to IFRS Profit” in the tables that follow for additional details for all non-IFRS financial measures.

 

·                  IFRS profit attributable to equity holders of the Company increased by $0.1 million, or 1.0%, to $3.2 million, or $0.14 per American depositary share (“ADS”), compared to $3.1 million, or $0.17 per ADS for the three month period ended September 30, 2011.

 

·                  Non-IFRS adjusted profit attributable to equity holders of the Company decreased by $0.7 million, or 17.1%, to $3.6 million, or $0.15 per ADS, compared to $4.3 million, or $0.23 per ADS for the three month period ended September 30, 2011.

 

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·                  Non-IFRS adjusted EBITDA increased by $0.1 million, or 2.4%, to $7.6 million for the three month period ended September 30, 2012, compared to $7.5 million for the three month period ended September 30, 2011.

 

·                  As of September 30, 2012, the Company had unrestricted cash and cash equivalents of $31.3 million.

 

Financial highlights for the nine month period ended September 30, 2012, compared to the nine month period ended September 30, 2011

 

·                  Revenues increased by $31.2 million, or 41.1%, to $107.2 million, compared to $76.0 million for the nine month period ended September 30, 2011.

 

·                  IFRS operating profit increased by $6.0 million, or 51.5%, to $17.7 million, or 16.5% of revenues, compared to $11.7 million, or 15.4% of revenues, for the nine month period ended September 30, 2011.

 

·                  IFRS operating profit, excluding costs associated with our recent initial public offering and amortization of purchased intangible assets, increased by $7.3 million, or 50.8%, to $21.7 million, or 20.3% of revenues, compared to $14.4 million, or 19.0% of revenues, for the nine month period ended September 30, 2011.

 

·                  IFRS profit attributable to equity holders of the Company increased by $1.4 million, or 20.2%, to $8.2 million, or $0.38 per ADS, compared to $6.8 million, or $0.36 per ADS for the nine month period ended September 30, 2011.

 

·                  Non-IFRS adjusted profit attributable to equity holders of the Company increased by $2.6 million, or 29.9%, to $11.4 million, or $0.53 per ADS, compared to $8.8 million, or $0.47 per ADS for the nine month period ended September 30, 2011.

 

·                  Non-IFRS adjusted EBITDA increased by $7.8 million, or 50.4%, to $23.4 million for the nine month period ended September 30, 2012, compared to $15.6 million for the nine month period ended September 30, 2011.

 

“It was yet another strong quarter for the Company in the face of challenging macro-economic conditions for our clients,” said Christopher Dalton, President and Chief Executive Officer of Acquity Group.  “Our deep, and strengthening, work with recognized global clients is a critical component of our success.  We have been able to sustain our current level of growth with a diligent focus on executing our business strategy.  We are capturing market share in both the business-to-consumer and business-to-business spaces and our clients continue to turn to Acquity Group to help them reinvent their digital Brand e-Commerce™ business models in the face of secular industry changes, changing demographics, and a new era of mobile, social, analytics and digital technologies. ”

 

Paul Weinewuth, Chief Financial Officer of Acquity Group, said, “Our utilization remains strong, driven by deepened client relationships and robust interest in our expertise in Brand eCommerce™ and Digital Marketing services.  Our performance strength continues to bump up against continued economic headwinds, and as a result we are maintaining a cautious outlook for the fourth quarter.  We are also looking towards conversion to U.S. GAAP next year, which will also include implementation of a new

 

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enterprise resource planning (ERP) system. In addition, we are looking to simplify our corporate structure by exploring strategic options in relation to our joint ventures.”

 

Recent Business Highlights

 

Following are some key third quarter highlights:

 

·                  Marked thirteenth consecutive quarter of positive sequential quarterly revenue growth

·                  Significant web site launches that included: Avery Dennison, Godiva, Epicurious, Exemplis, Kennametal, and Dun and Bradstreet

·                  Billable headcount increased 40% year-over- year

·                  Named the ninth largest digital agency for U.S. mobile revenue by Advertising Age

·                  Cited as an emerging example of a “business transformer” in the July 2012 Forrester Research, Inc. report, “The New Interactive Agency Landscape”

 

Third Quarter 2012 Financial Results

 

Three Month Period Ended September 30, 2012 Compared to Three Month Period Ended September 30, 2011

 

Revenues increased by $7.7 million, or 26.0%, to $37.3 million for the three month period ended September 30, 2012, from $29.6 million for the three month period ended September 30, 2011. Revenues continued to grow due to strong demand seen in the market place for the Company’s expertise and focused approach to delivering customer value.

 

Cost of revenues increased by $5.3 million to $21.0 million for the three month period ended September 30, 2012, from $15.7 million for the three month period ended September 30, 2011, which was primarily driven by continued organic growth of our staff to accommodate the demand for our services. These costs increased as a percentage of revenues to 56.4% for the three month period ended September 30, 2012, from 53.2% for the three month period ended September 30, 2011.

 

Selling and marketing expenses increased by $0.3 million to $2.4 million for the three month period ended September 30, 2012, from $2.1 million for the three month period ended September 30, 2011. These costs decreased as a percentage of revenues to 6.3% for the three month period ended September 30, 2012, from 7.1% for the three month period ended September 30, 2011. This improvement was the result of leveraging our experienced sales force and entering into engagements that fit our growth model.

 

Administrative expenses increased by $2.1 million to $7.5 million for the three month period ended September 30, 2012, from $5.4 million for the three month period ended September 30, 2011. These costs increased as a percentage of revenues to 20.0% for the three month period ended September 30, 2012, from 18.3% for the three month period ended September 30, 2011. The increase was primarily due to an increase in operations headcount in order to support the growth of our business.

 

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Equity in losses of joint ventures was $0.3 million for the three month period ended September 30, 2012, compared to $0.4 million for the three month period ended September 30, 2011.

 

Income tax expense was $2.9 million and $2.2 million for the three month periods ended September 30, 2012 and September 30, 2011, respectively.  Our effective tax rate was 48.5% and 41.8% for the three month periods ended September 30, 2012 and September 30, 2011, respectively. The increase for the three month period ended September 30, 2012, compared to the three month period ended September 30, 2011 was primarily attributable to losses from non-U.S. operations for which no tax benefit was available and an increase in state taxes.

 

Nine Month Period Ended September 30, 2012 Compared to Nine Month Period Ended September 30, 2011

 

Revenues increased by $31.2 million, or 41.1%, to $107.2 million for the nine month period ended September 30, 2012, from $76.0 million for the nine month period ended September 30, 2011. Revenues increased as a result of our continued focus on being one of the best providers in Brand eCommerce™ and Digital Marketing service capabilities and our ability to continue to secure new accounts that are committed to the digital channel.

 

Cost of revenues increased by $16.3 million to $59.1 million for the nine month period ended September 30, 2012, from $42.8 million for the nine month period ended September 30, 2011, which was primarily driven by organic growth of our staff to accommodate the demand for our services. These costs decreased as a percentage of revenues to 55.1% for the nine month period ended September 30, 2012, from 56.3% for the nine month period ended September 30, 2011.

 

Selling and marketing expenses increased by $1.2 million to $6.8 million for the nine month period ended September 30, 2012, from $5.6 million for the nine month period ended September 30, 2011. These costs decreased as a percentage of revenues to 6.3% for the nine month period ended September 30, 2012, from 7.4% for the nine month period ended September 30, 2011. This improvement was the result of leveraging our experienced sales force and entering into engagements that fit our growth model.

 

Administrative expenses increased by $6.6 million to $21.6 million for the nine month period ended September 30, 2012, from $15.0 million for the nine month period ended September 30, 2011. These costs increased modestly as a percentage of revenues to 20.1% for the nine month period ended September 30, 2012, from 19.8% for the nine month period ended September 30, 2011.  The increase was primarily due to an increase in operations headcount in order to support the growth of our business.

 

Equity in losses of joint ventures was $1.2 million for the nine month period ended September 30, 2012, compared to $0.5 million for the nine month period ended September 30, 2011.

 

Income tax expense was $8.5 million and $4.5 million for the nine month periods ended September 30, 2012 and September 30, 2011, respectively.  Our effective tax rate was 51.3% and 40.6% for the nine month periods ended September 30, 2012 and September 30, 2011, respectively. The increase for the nine month period ended September 30, 2012, compared to the nine month period ended September 30, 2011 was primarily attributable to the impact of non-deductible costs related to our initial public

 

4



 

offering (IPO), losses from non-U.S. operations for which no tax benefit was available and an increase in state taxes.

 

Fourth Quarter 2012 Outlook

 

The Company currently expects the following financial results for the fourth quarter of 2012:

 

·                  Revenues are expected to be in the range of $36 million to $40 million; and

 

·                  IFRS operating profit margin, excluding amortization of purchased intangible assets, is expected to range from 14% to 16%.

 

Webcast and Conference Call

 

A conference call and webcast have been scheduled for 8:30 a.m. EDT today to discuss these results. Details of the conference call are as follows:

 

Date:

Thursday, November 8, 2012

Time:

8:30 a.m. EDT (please dial in by 8:15 a.m.)

Dial-In #:

(800)920-8624 U.S. & Canada

 

+1(617) 597-5430 International

Confirmation code:

33160322

 

Alternatively, the conference call will be available via webcast at www.acquitygroup.com by clicking on the “Investors” tab.

 

Non-IFRS Financial Measures

 

Acquity Group provides non-IFRS financial measures to complement reported IFRS results. Management believes these measures help illustrate underlying trends in the Company’s business and uses the measures to establish budgets and operational goals, communicated internally and externally, for managing the Company’s business and evaluating its performance. The Company anticipates that it will continue to report both IFRS and certain non-IFRS financial measures in its financial results, including non-IFRS results that exclude interest, income tax provisions, depreciation and amortization, costs associated with its initial public offering, equity in losses of its joint ventures, acquisition costs and other related charges, among other costs. Consequently, Acquity Group’s non-IFRS financial measures should not be evaluated in isolation or as a substitute for IFRS measures, but, rather, should be considered together with its consolidated financial statements, which are prepared according to IFRS.

 

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Special Note Regarding Forward-Looking Statements

 

This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “aim,” “anticipate,” “believe,” “confident,” “continue,” “estimate,” “expect,” “future,” “intend,” “is currently reviewing,” “it is possible,” “likely,” “may,” “plan,” “potential,” “will” or other similar expressions or the negative of these words or expressions. The Company has based these forward-looking statements largely on its current expectations and projections about future events and financial trends that it believes may affect its financial condition, results of operations, business strategy and financial needs. In particular, the section entitled “Fourth Quarter 2012 Outlook” in this announcement consists of forward-looking statements. Statements that are not historical facts, including statements about the Company’s beliefs and expectations, are forward-looking statements and are subject to change, and such change may be material and may have a material adverse effect on the Company’s financial condition and results of operations for one or more periods. Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained, either expressly or impliedly, in any of the forward-looking statements in this announcement. Potential risks and uncertainties include, but are not limited to, the risks outlined in the Company’s Registration Statement on Form F-1 and other documents filed with the U.S. Securities and Exchange Commission. Unless otherwise specified, all information provided in this announcement and in the attachments is as of the date of this announcement, and the Company does not undertake any obligation to update any such information, except as required under applicable law.

 

About Acquity Group Limited

 

Acquity Group Limited is a leading Brand eCommerce™ and Digital Marketing company that leverages the Internet, mobile devices and social media to enhance its clients’ brands and e-commerce performance. It is the digital agency of record for a number of well-known global brands in multiple industries. Acquity Group Limited has served more than 500 companies and their global brands through eleven offices in North America and three offices in Asia. For more information about Acquity Group Limited, visit www.acquitygroup.com.

 

Investor Relations Contact:
Jessica Barist Cohen
Ogilvy Financial, New York
Phone: (646)460-9989
E-mail: aq@ogilvy.com

 

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Acquity Group Limited

Consolidated Statements of Comprehensive Income - Unaudited

(Amounts in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Month Periods Ended

 

Nine Month Periods Ended

 

 

 

September 30, 2012

 

September 30, 2011

 

September 30, 2012

 

September 30, 2011

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

37,268

 

100.0

%

$

29,569

 

100.0

%

$

107,223

 

100.0

%

$

76,014

 

100.0

%

Cost of revenues

 

21,031

 

56.4

%

15,728

 

53.2

%

59,060

 

55.1

%

42,813

 

56.3

%

Gross profit

 

16,237

 

43.6

%

13,841

 

46.8

%

48,163

 

44.9

%

33,201

 

43.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling and marketing expenses

 

2,361

 

6.3

%

2,107

 

7.1

%

6,800

 

6.3

%

5,625

 

7.4

%

Administrative expenses

 

7,470

 

20.0

%

5,410

 

18.3

%

21,550

 

20.1

%

15,044

 

19.8

%

Costs associated with initial public offering

 

5

 

0.0

%

765

 

2.6

%

2,120

 

2.0

%

853

 

1.1

%

Operating profit

 

6,401

 

17.2

%

5,559

 

18.8

%

17,693

 

16.5

%

11,679

 

15.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Finance income

 

12

 

0.0

%

64

 

0.2

%

9

 

0.0

%

33

 

0.0

%

Equity in losses of joint ventures

 

(331

)

(0.9

)%

(441

)

(1.5

)%

(1,215

)

(1.1

)%

(530

)

(0.7

)%

Profit before tax

 

6,082

 

16.3

%

5,182

 

17.5

%

16,487

 

15.4

%

11,182

 

14.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax expense

 

2,947

 

7.9

%

2,166

 

7.3

%

8,457

 

7.9

%

4,540

 

6.0

%

Profit

 

3,135

 

8.4

%

3,016

 

10.2

%

8,030

 

7.5

%

6,642

 

8.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Profit/(loss) attributable to:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity holders of the Company

 

$

3,177

 

8.5

%

$

3,145

 

10.6

%

$

8,176

 

7.6

%

$

6,803

 

8.9

%

Non-controlling interests

 

(42

)

(0.1

)%

(129

)

(0.4

)%

(146

)

(0.1

)%

(161

)

(0.2

)%

Profit

 

$

3,135

 

8.4

%

$

3,016

 

10.2

%

$

8,030

 

7.5

%

$

6,642

 

8.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Profit

 

3,135

 

8.4

%

3,016

 

10.2

%

8,030

 

7.5

%

6,642

 

8.7

%

Currency translation differences

 

(44

)

(0.1

)%

35

 

0.1

%

(111

)

(0.1

)%

73

 

0.1

%

Comprehensive profit

 

$

3,091

 

8.3

%

$

3,051

 

10.3

%

$

7,919

 

7.4

%

$

6,715

 

8.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total comprehensive profit attributable to:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity holders of the Company

 

$

3,133

 

8.4

%

$

3,180

 

10.8

%

$

8,065

 

7.5

%

$

6,876

 

9.0

%

Non-controlling interests

 

(42

)

(0.1

)%

(129

)

(0.4

)%

(146

)

(0.1

)%

(161

)

(0.2

)%

Comprehensive profit

 

$

3,091

 

8.3

%

$

3,051

 

10.3

%

$

7,919

 

7.4

%

$

6,715

 

8.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Profit per share attributable to equity holders of the Company:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

American depositary shares (1)

 

$

0.14

 

 

 

$

0.17

 

 

 

$

0.38

 

 

 

$

0.36

 

 

 

Ordinary shares

 

$

0.07

 

 

 

$

0.08

 

 

 

$

0.19

 

 

 

$

0.18

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used in computing profit per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

American depositary shares (1)

 

23,516.4

 

 

 

18,738.6

 

 

 

21,476.3

 

 

 

18,738.6

 

 

 

Ordinary shares

 

47,032.8

 

 

 

37,477.3

 

 

 

42,952.5

 

 

 

37,477.3

 

 

 

 


(1)

On May 2, 2012, the Company completed the initial public offering of its American depositary shares representing ordinary shares and is now listed on NYSE MKT under the stock symbol “AQ.” Pursuant to our registration statement filed with the U.S. Securities and Exchange Commission, each American depositary share presented in the consolidated statement of comprehensive income represents two ordinary shares outstanding.

 

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Acquity Group Limited

Consolidated Statements of Financial Position - Unaudited

(Amounts in thousands)

 

 

 

September 30, 2012

 

December 31, 2011

 

Assets

 

 

 

 

 

Non-current assets

 

 

 

 

 

Property and equipment, net

 

$

4,782

 

$

3,648

 

Intangible assets

 

24,493

 

26,428

 

Other non-current assets (1)

 

4,844

 

74

 

Investment in joint ventures

 

2,559

 

3,887

 

Deferred tax assets

 

5,336

 

4,521

 

 

 

42,014

 

38,558

 

Current assets

 

 

 

 

 

Trade receivables

 

27,901

 

19,906

 

Unbilled receivables

 

11,514

 

8,056

 

Due from customers under fixed-price contracts

 

371

 

456

 

Prepayments and other receivables

 

1,842

 

3,096

 

Restricted cash

 

 

2,600

 

Cash and cash equivalents

 

31,319

 

6,875

 

Total current assets

 

72,947

 

40,989

 

Total assets

 

$

114,961

 

$

79,547

 

 

 

 

 

 

 

Equity and liabilities

 

 

 

 

 

Equity

 

 

 

 

 

Issued capital

 

$

5

 

$

4

 

Capital reserve

 

96,577

 

71,030

 

Other comprehensive income/(losses)

 

(43

)

68

 

Retained profit / (losses)

 

763

 

(7,413

)

Equity attributable to equity holders of parent

 

97,302

 

63,689

 

Non-controlling interests

 

599

 

745

 

Total equity

 

97,901

 

64,434

 

 

 

 

 

 

 

Non-current liabilities

 

 

 

 

 

Other non-current liabilities

 

6,332

 

5,379

 

 

 

6,332

 

5,379

 

Current liabilities

 

 

 

 

 

Trade payables

 

1,532

 

1,499

 

Other payables and accruals

 

7,612

 

8,159

 

Due to customers under fixed-price contracts

 

116

 

41

 

Accrued income taxes

 

1,468

 

35

 

 

 

10,728

 

9,734

 

Total liabilities

 

17,060

 

15,113

 

Total equity and liabilities

 

$

114,961

 

$

79,547

 

 


(1)

As of September 30, 2012, other non-current assets primarily consists of deposits for joint venture related to an additional investment in our Huaren Kudong Commercial Trading Co., Ltd. joint venture. We are awaiting approval from the Chinese government, at which time the funds will be reclassified to “Investment in joint ventures” on the consolidated statement of financial position.

 

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Acquity Group Limited

Consolidated Statements of Changes in Equity - Unaudited

(Amounts in thousands)

 

 

 

Issued capital

 

Capital reserve

 

Other

comprehensive

income

 

Retained profit/

(losses)

 

Equity attributable

to equity holders of

parent

 

Non-controlling

interests

 

Total equity

 

As of 31 December 2010

 

$

4

 

$

71,030

 

$

 

$

(16,020

)

$

55,014

 

$

983

 

$

55,997

 

Profit/(loss) for the period

 

 

 

 

 

 

 

1,420

 

1,420

 

(2

)

1,418

 

Other comprehensive income

 

 

 

 

 

5

 

 

 

5

 

2

 

7

 

Total for the period

 

 

 

5

 

1,420

 

1,425

 

 

1,425

 

As of 31 March 2011

 

$

4

 

$

71,030

 

$

5

 

$

(14,600

)

$

56,439

 

$

983

 

$

57,422

 

Profit/(loss) for the period

 

 

 

 

 

 

 

2,238

 

2,238

 

(30

)

2,208

 

Other comprehensive income

 

 

 

 

 

21

 

 

 

21

 

10

 

31

 

Total for the period

 

 

 

21

 

2,238

 

2,259

 

(20

)

2,239

 

As of 30 June 2011

 

$

4

 

$

71,030

 

$

26

 

$

(12,362

)

$

58,698

 

$

963

 

$

59,661

 

Profit/(loss) for the period

 

 

 

 

 

 

 

3,145

 

3,145

 

(130

)

3,015

 

Other comprehensive income

 

 

 

 

 

23

 

 

 

23

 

12

 

35

 

Total for the period

 

 

 

23

 

3,145

 

3,168

 

(118

)

3,050

 

As of 30 September 2011

 

$

4

 

$

71,030

 

$

49

 

$

(9,217

)

$

61,866

 

$

845

 

$

62,711

 

Profit/(loss) for the period

 

 

 

 

 

 

 

1,804

 

1,804

 

(111

)

1,693

 

Other comprehensive income

 

 

 

 

 

19

 

 

 

19

 

11

 

30

 

Total for the period

 

 

 

19

 

1,804

 

1,823

 

(100

)

1,723

 

As of 31 December 2011

 

$

4

 

$

71,030

 

$

68

 

$

(7,413

)

$

63,689

 

$

745

 

$

64,434

 

Profit/(loss) for the period

 

 

 

 

 

 

 

3,845

 

3,845

 

(64

)

3,781

 

Other comprehensive income

 

 

 

 

 

2

 

 

 

2

 

 

 

2

 

Total for the period

 

 

 

2

 

3,845

 

3,847

 

(64

)

3,783

 

As of 31 March 2012

 

$

4

 

$

71,030

 

$

70

 

$

(3,568

)

$

67,536

 

$

681

 

$

68,217

 

Profit/(loss) for the period

 

 

 

 

 

 

 

1,154

 

1,154

 

(40

)

1,114

 

Other comprehensive income

 

 

 

 

 

(69

)

 

 

(69

)

 

 

(69

)

Issuance of American depositary shares, net of offering costs (1)

 

1

 

25,547

 

 

 

 

 

25,548

 

 

 

25,548

 

Total for the period

 

1

 

25,547

 

(69

)

1,154

 

26,633

 

(40

)

26,593

 

As of 30 June 2012

 

$

5

 

$

96,577

 

$

1

 

$

(2,414

)

$

94,169

 

$

641

 

$

94,810

 

Profit/(loss) for the period

 

 

 

 

 

 

 

3,177

 

3,177

 

(42

)

3,135

 

Other comprehensive income

 

 

 

 

 

(44

)

 

 

(44

)

 

 

(44

)

Total for the period

 

 

 

(44

)

3,177

 

3,133

 

(42

)

3,091

 

As of 30 September 2012

 

$

5

 

$

96,577

 

$

(43

)

$

763

 

$

97,302

 

$

599

 

$

97,901

 

 


(1)

During the three month period ended June 30, 2012, the Company recorded an additional issued capital and capital reserve related to the issuance of the Company’s IPO of American depositary shares, which began trading on NYSE MKT on April 27, 2012, and was offset by costs associated with the IPO in accordance with IFRS rules.

 

9



 

Acquity Group Limited

Consolidated Statements of Cash Flows - Unaudited

(Amounts in thousands)

 

 

 

Nine Month Periods Ended

 

 

 

September 30, 2012

 

September 30, 2011

 

 

 

 

 

 

 

Operating activities:

 

 

 

 

 

Profit before tax

 

$

16,487

 

$

11,182

 

Adjustments to reconcile profit before tax to net cash flows from operating activities:

 

 

 

 

 

Non-cash:

 

 

 

 

 

Depreciation of property and equipment

 

1,552

 

1,007

 

Amortization of intangible assets & straight-line rent

 

2,033

 

1,983

 

Impairment loss of trade receivables

 

180

 

 

Finance costs

 

(9

)

(33

)

Equity in losses of joint ventures

 

1,215

 

530

 

Working capital adjustments:

 

 

 

 

 

Trade receivables and unbilled receivables

 

(11,633

)

(9,028

)

Due from customers under fixed-price contracts

 

85

 

(227

)

Prepayment and other receivables

 

(432

)

(223

)

Trade payables

 

33

 

(353

)

Other payables and accruals

 

(538

)

237

 

Due to customers under fixed-price contracts

 

75

 

8

 

Other non-current assets

 

(8

)

(8

)

Income tax paid

 

(5,675

)

(3,600

)

Net cash flows generated from operating activities

 

3,365

 

1,475

 

 

 

 

 

 

 

Investing activities:

 

 

 

 

 

Purchase of property and equipment

 

(2,686

)

(1,654

)

Purchase of intangible assets

 

 

(157

)

Decrease/(increase) in restricted cash

 

2,600

 

 

Investment in joint venture

 

 

(4,822

)

Loan receivable from officers of Acquity Group LLC

 

 

(4,193

)

Increase in deposits for joint venture (1)

 

(4,762

)

 

Loan to joint venture

 

(270

)

(97

)

Net cash flows used in investing activities

 

(5,118

)

(10,923

)

 

 

 

 

 

 

Financing activities:

 

 

 

 

 

Proceeds from issuance of American depositary shares

 

28,667

 

 

Payment of costs associated with initial public offering

 

(2,470

)

(442

)

Net cash flows generated from/(used in) financing activities

 

26,197

 

(442

)

 

 

 

 

 

 

Net increase/(decrease) in cash and cash equivalents

 

24,444

 

(9,890

)

Cash and cash equivalents at the beginning of the period

 

6,875

 

12,428

 

Cash and cash equivalents at the end of the period

 

$

31,319

 

$

2,538

 

 


(1)

For the nine month period ended September 30, 2012, the increase in deposits for joint venture relates to an additional investment in our Huaren Kudong Commercial Trading Co., Ltd. joint venture. We are awaiting approval from the Chinese government, at which time the funds will be reclassified to “Investment in joint ventures” on the consolidated statement of financial position.

 

10



 

Acquity Group Limited

Reconciliation of Non-IFRS Financial Measures to IFRS Profit - Unaudited (1)

(Amounts in thousands, except per share data)

 

 

 

Three Month Periods Ended

 

Nine Month Periods Ended

 

 

 

September 30, 2012

 

September 30, 2011

 

September 30, 2012

 

September 30, 2011

 

 

 

 

 

 

 

 

 

 

 

IFRS profit attributable to equity holders, as reported

 

$

3,177

 

$

3,145

 

$

8,176

 

$

6,803

 

Interest income net of interest expense

 

(12

)

(64

)

(9

)

(33

)

Income tax expense

 

2,947

 

2,166

 

8,457

 

4,540

 

Depreciation & amortization:

 

 

 

 

 

 

 

 

 

Property and equipment

 

549

 

374

 

1,552

 

1,007

 

Intangible assets

 

645

 

638

 

1,935

 

1,888

 

Costs associated with initial public offering (2)

 

5

 

765

 

2,120

 

853

 

Equity in losses of joint ventures

 

331

 

441

 

1,215

 

530

 

Non-IFRS adjusted EBITDA

 

$

7,642

 

$

7,465

 

$

23,446

 

$

15,588

 

 

 

 

 

 

 

 

 

Three Month Periods Ended

 

Nine Month Periods Ended

 

 

 

September 30, 2012

 

September 30, 2011

 

September 30, 2012

 

September 30, 2011

 

 

 

 

 

 

 

 

 

 

 

IFRS operating profit, as reported

 

$

6,401

 

$

5,559

 

$

17,693

 

$

11,679

 

Costs associated with initial public offering, net (2)

 

5

 

765

 

2,120

 

853

 

Amortization of intangible assets related to acquisition

 

645

 

638

 

1,935

 

1,888

 

Non-IFRS operating profit

 

$

7,051

 

$

6,962

 

$

21,748

 

$

14,420

 

 

 

 

 

 

 

 

 

Three Month Periods Ended

 

Nine Month Periods Ended

 

 

 

September 30, 2012

 

September 30, 2011

 

September 30, 2012

 

September 30, 2011

 

 

 

 

 

 

 

 

 

 

 

IFRS profit attributable to equity holders, as reported

 

$

3,177

 

$

3,145

 

$

8,176

 

$

6,803

 

Costs associated with initial public offering, net (2)

 

5

 

765

 

2,120

 

853

 

Amortization of intangible assets related to acquisition, net of tax

 

381

 

389

 

1,142

 

1,152

 

Non-IFRS adjusted profit

 

$

3,563

 

$

4,299

 

$

11,438

 

$

8,808

 

 

 

 

 

 

 

 

 

 

 

Adjusted profit per share attributable to equity holders of the Company:

 

 

 

 

 

 

 

 

 

American depositary shares (3)

 

$

0.15

 

$

0.23

 

$

0.53

 

$

0.47

 

Ordinary shares

 

$

0.08

 

$

0.12

 

$

0.27

 

$

0.24

 

 

 

 

 

 

 

 

 

 

 

Shares used in computing profit per share:

 

 

 

 

 

 

 

 

 

American depositary shares (3)

 

23,516.4

 

18,738.6

 

21,476.3

 

18,738.6

 

Ordinary shares

 

47,032.8

 

37,477.3

 

42,952.5

 

37,477.3

 

 


(1)

The Company includes these adjusted calculations for the three and nine month periods ended September 30, 2012 and September 30, 2011 because management believes they are useful to investors in that they provide for greater transparency with respect to supplemental information used by management in its financial and operational decision making.

 

 

 

Accordingly, the Company believes that the presentation of this analysis, when used in conjunction with IFRS financial measures, is a useful financial analysis tool that can assist investors in assessing the Company’s operating performance and underlying prospects. This analysis should not be considered in isolation or as a substitute for profit/(loss) prepared in accordance with IFRS. This analysis, as well as the other information in this press release, should be read in conjunction with the Company’s financial statements and related footnotes contained in the documents that the Company files with the U.S. Securities and Exchange Commission.

 

 

(2)

The three and nine month periods ended September 30, 2012 and September 30, 2011 include costs associated with the Company’s IPO of American depositary shares, which began trading on NYSE MKT on April 27, 2012. The Company recorded this charge in accordance with IFRS rules, which allow the Company to (1) fully capitalize costs directly attributable to the IPO and (2) capitalize a portion of costs indirectly attributable to the IPO, based on the size of the offering.

 

 

(3)

On May 2, 2012, the Company completed the initial public offering of its American depositary shares representing ordinary shares and is now listed on NYSE MKT under the stock symbol “AQ.” Pursuant to our registration statement filed with the Securities and Exchange Commission, each American depositary share presented in the Reconciliation of Non-IFRS Financial Measures to IFRS Profit represents two ordinary shares outstanding.

 

11