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Pactera Announces Third Quarter 2012 Financial Results

BEIJING, Nov. 15, 2012 /PRNewswire-FirstCall/ -- Pactera Technology International Ltd. (Nasdaq: PACT) ("Pactera" or the "Company"), a global consulting and technology services provider strategically headquartered in China, today reported its unaudited financial results for the third quarter ended September 30, 2012, which are described below as the unaudited financial results of former HiSoft Technology International Limited (NASDAQ:HSFT). In addition, we included the unaudited financial results for the third quarter ended September 30,2012 of VanceInfo Technologies Inc. (NYSE: VIT) which was combined with HiSoft Technology International Limited to form Pactera on November 9, 2012 as a result of the previously announced merger.

Third Quarter 2012 Highlights of former HiSoft Technology International Limited ("HiSoft")

  • Net revenues were $79.6 million, up 35.2% from $58.9 million for the third quarter of 2011.
  • Non-GAAP(1) operating income was $11.2 million, up 41.9% from $7.9 million for the third quarter of 2011.
  • Diluted net income per American depositary share(2)("ADS") and non-GAAP(1) diluted net income per ADS were $0.15 and $0.33, respectively, for the third quarter of 2012.
  • Total employees as of September 30, 2012 was 8,652, including 7,636 billable professionals.

Third Quarter 2012 Highlights of former VanceInfo Technologies Inc. ("VanceInfo")

  • Net revenues for the third quarter of 2012 increased to $96.2 million, up 36.9% from $70.3 million for the third quarter of 2011.
  • Non-GAAP(1) operating income was $8.5 million, up 54.5% from $5.5 million for the third quarter of 2011.
  • Diluted earnings per share(3)("EPS") and non-GAAP(1) diluted EPS were $0.11 and $0.19, respectively, for the third quarter of 2012.
  • Total employees as of September 30, 2012 was 15,302, including 13,801 billable professionals.

Tiak Koon Loh, Pactera Chief Executive Officer, commented, "Both HiSoft and VanceInfo finished the quarter with strong, broad-based results executing on strategies to grow higher value-added solution services and further deepen wallet-share." He continued, "These results provide nice momentum from which to establish our combined operations. We have an immediate focus on post-merger integration and a clear vision to drive sustainable business growth. We are committed to capitalizing on the synergies that lay before us and delivering solid results to our customers and shareholders."

"We announced the official formation of Pactera on November 9, 2012, and through the merger of VanceInfo and HiSoft we bring together the skills of more than 23,000 employees to create a world-class China-based IT services company," said Pactera Non-Executive Chairman, Chris Chen. "By building on the two firms' complementary strengths, Pactera's 13 offices in China and 14 international sites create an integrated, global network of resources that offer clients an expanded breadth of solution services serving a variety of industries with world-wide reach. We are indeed excited about the capabilities that Pactera brings to the marketplace and a bright future ahead," he concluded.

HiSoft Third Quarter 2012 Financial Results

Net Revenues

Net revenues were $79.6 million for the third quarter of 2012, an increase of 35.2% from $58.9 million for the corresponding period in 2011. The strong year-over-year growth in net revenues was driven by strong demand across all service lines and key geographic markets.

Net Revenues by Service Line

HiSoft had two service lines:  Information Technology ("IT") services and research and development ("R&D") services. HiSoft divided IT services into two categories: consulting and packaged solution services ("CPS") and application development, testing and maintenance services ("ADM").


Three Months Ended September 30, 2012

Three Months Ended September 30, 2011

Year-over-Year % Change

($ in thousands, except percentages)

IT Services

46,242

58.1%

34,084

57.9%

35.7%

CPS

17,380

21.8%

11,823

20.1%

47.0%

ADM

28,862

36.3%

22,261

37.8%

29.7%

R&D Services

33,330

41.9%

24,790

42.1%

34.4%

Total Net Revenues

79,572

100.0%

58,874

100.0%

35.2%

Net revenues from IT services were $46.2 million for the third quarter of 2012, an increase of 35.7% from $34.1 million for the corresponding period in 2011. HiSoft's CPS services grew 47.0% compared to the same period in 2011 as a result of expanded solution offerings and an expanded client portfolio.

Net revenues from R&D services were $33.3 million for the third quarter of 2012, an increase of 34.4% from $24.8 million for the corresponding period in 2011.

Net Revenues by Geographic Markets

Net Revenues based on Location of Clients' Headquarters


Three Months Ended September 30, 2012

Three Months Ended September 30, 2011

Year-over-Year % Change

($ in thousands, except percentages)

United States

36,359

45.7%

29,847

50.7%

21.8%

Greater China

18,169

22.8%

10,251

17.4%

77.2%

Japan

14,235

17.9%

10,056

17.1%

41.6%

Asia South

6,081

7.7%

3,603

6.1%

68.8%

Europe

4,728

5.9%

5,117

8.7%

(7.6%)

Total Net Revenues

79,572

100.0%

58,874

100.0%

35.2%

Based on the location of clients' headquarters, HiSoft's largest geographic market, the United States accounted for $36.4 million or 45.7% of net revenues during the third quarter of 2012, followed by 22.8% for Greater China, 17.9% for Japan, 7.7% for Asia South and 5.9% for Europe.

In the third quarter, Greater China continued its strong growth momentum of 77.2% year-over-year. The United States and Japan also continued to demonstrate solid momentum recording year-over-year net revenue growth of 21.8% and 41.6%, respectively. Asia South recorded a 68.8% increase in revenue year-over-year primarily due to an acquisition in Australia in the third quarter 2012. Growth from Europe was negatively impacted by adverse macro-economic conditions resulting in a 7.6% year-over-year decrease.

Net Revenues based on Location of Contract Signing Entity


Three Months Ended September 30, 2012

Three Months Ended September 30, 2011

Year-over-Year % Change

($ in thousands, except percentages)

Greater China

33,970

42.7%

22,689

38.5%

49.7%

United States

15,764

19.8%

14,829

25.2%

6.3%

Japan

15,244

19.1%

11,530

19.6%

32.2%

Asia South

12,945

16.3%

8,455

14.4%

53.1%

Europe

1,649

2.1%

1,371

2.3%

20.3%

Total Net Revenues

79,572

100.0%

58,874

100.0%

35.2%

Measuring HiSoft's net revenues based on the location of contract signing entity, Greater China accounted for 42.7% of net revenues in the third quarter of 2012, while the United States accounted for 19.8%, Japan accounted for 19.1%, Asia South accounted for 16.3% and Europe accounted for 2.1%.

In the third quarter of 2012, HiSoft achieved strong year-over-year net revenue growth based on the location of contract signing entity across most of its key markets: the United States grew 6.3%, Japan grew 32.2%, Greater China grew 49.7%, Asia South grew 53.1% and Europe grew 20.3%.

Largest Clients

Revenues from HiSoft's top five and top ten clients accounted for 29.8% and 43.8% of net revenues, respectively, during the third quarter of 2012, compared to 34.5% and 49.5%, respectively, for the corresponding period in 2011.

Gross Profit and Gross Margin

Gross profit was $28.3 million for the third quarter of 2012, an increase of 35.1% from $20.9 million for the corresponding period in 2011. During the third quarter of 2012, gross margin was 35.6%, unchanged from the corresponding period in 2011.

Non-GAAP gross margin was 36.0% for the third quarter of 2012, compared to 35.9% in the corresponding period in 2011.

Operating Expenses

Total operating expenses were $23.0 million for the third quarter of 2012, an increase of 36.3% from $16.9 million for the corresponding period in 2011. Total operating expenses as percentage of total revenues was 28.9%, compared to 28.7% for the corresponding period in 2011.

Operating Income and Operating Margin

Operating income for the third quarter of 2012 was $5.3 million, an increase of 30.2% from $4.1 million for the corresponding period in 2011. Non-GAAP operating income for the third quarter in 2012 was $11.2 million, an increase of 41.9% from $7.9 million for the corresponding period in 2011.

Operating margin was 6.7% for the third quarter of 2012, compared to 6.9% for the same period in 2011. Non-GAAP operating margin was 14.1% for the third quarter of 2012, compared to 13.4% for the corresponding period in 2011.

Provision for Income Taxes

Provision for income taxes was $1.3 million for the third quarter of 2012, compared to $0.4 million in the third quarter of 2011.

The effective tax rate for the third quarter of 2012 was 21.0%. Excluding non-deductible merger related transaction costs for Cayman Island tax purposes, the effective tax rate would have been 15.0% for the quarter.

Net Income and Net Income per ADS

Net income attributable to HiSoft was $4.7 million for the third quarter of 2012, compared to $4.4 million for the corresponding period in 2011. Diluted net income per ADS was $0.15 for the third quarter of 2012, improved from $0.14 in the corresponding period of 2011.

Non-GAAP net income was $10.6 million for the third quarter of 2012, an increase of 28.3% from $8.2 million for the same period in 2011. Non-GAAP diluted net income per ADS was $0.33 in the third quarter of 2012, compared to $0.26 in the corresponding period of 2011.

Cash Flow and DSO

As of September 30, 2012, HiSoft had cash and cash equivalents, restricted cash, and term deposits totaling $120.7 million. Operating cash flow for third quarter of 2012 was a net inflow of approximately $5.1 million.

Days sales outstanding ("DSO") was 99 days for the third quarter of 2012, compared to 88 days in the corresponding period of 2011. The increase in DSO was primarily due to an increase in the number of fixed- price contracts signed with customers in China and Singapore.

First Nine Months 2012 Financial Results of HiSoft

Net Revenues

Net revenues were $216.8 million for the nine months ended September 30, 2012, an increase of 40.7% from $154.1 million for the corresponding period in 2011.

Net Revenues by Service Line


Nine Months Ended September 30, 2012

Nine Months Ended September 30, 2011

Year-over-Year % Change

($ in thousands, except percentages)

IT Services

127,120

58.6%

86,405

56.1%

47.1%

CPS

47,756

22.0%

23,927

15.5%

99.6%

ADM

79,364

36.6%

62,478

40.6%

27.0%

R&D Services

89,709

41.4%

67,648

43.9%

32.6%

Total Net Revenues

216,829

100.0%

154,053

100.0%

40.7%

Net revenues from IT services were $127.1 million for the nine months ended September 30, 2012, an increase of 47.1% from $86.4 million for the corresponding period in 2011. HiSoft's CPS services, comprising a portfolio of higher value-added solutions, recorded a 99.6% year-over-year increase.

Net revenues from R&D services were $89.7 million for the nine months ended September 30, 2012, an increase of 32.6% from $67.6 million for the corresponding period in 2011.

Net Revenues by Geographic Markets

Net Revenues based on Location of Clients' Headquarters


Nine Months Ended September 30, 2012

Nine Months Ended September 30, 2011

Year-over-Year % Change

($ in thousands, except percentages)

United States

99,608

45.9%

77,601

50.4%

28.4%

Greater China

50,374

23.2%

26,213

17.0%

92.2%

Japan

41,395

19.1%

27,401

17.8%

51.1%

Europe

14,112

6.5%

13,943

9.0%

1.2%

Asia South

11,340

5.3%

8,895

5.8%

27.5%

Total Net Revenues

216,829

100.0%

154,053

100.0%

40.7%

Based on the location of clients' headquarters, HiSoft's largest geographic market, the United States, accounted for $99.6 million or 45.9% of its net revenues, during the nine months ended September 30, 2012, followed by 23.2 % for Greater China, 19.1% for Japan, 6.5% for Europe and 5.3% for Asia South.

Net Revenues based on Location of Contract Signing Entity


Nine Months Ended September 30, 2012

Nine Months Ended September 30, 2011

Year-over-Year % Change

($ in thousands, except percentages)

Greater China

89,916

41.5%

60,408

39.2%

48.8%

United States

46,406

21.4%

34,435

22.4%

34.8%

Japan

44,294

20.4%

33,480

21.7%

32.3%

Asia South

32,402

14.9%

21,879

14.2%

48.1%

Europe

3,811

1.8%

3,851

2.5%

(1.0%)

Total Net Revenues

216,829

100.0%

154,053

100.0%

40.7%

Measuring HiSoft's net revenues based on the location of contract signing entities, Greater China accounted for 41.5% of its net revenues in the nine months ended September 30, 2012, while the United States accounted for 21.4%, Japan accounted for 20.4%, Asia South accounted for 14.9% and Europe accounted for 1.8%.

Largest Clients

Revenues from HiSoft's top five and top ten clients accounted for 31.2% and 44.3% of its net revenues, respectively, during the nine months ended September 30, 2012, compared to 36.8% and 52.5%, respectively, for the corresponding period in 2011.

Gross Profit and Gross Margin

Gross profit was $76.8 million for the nine months ended September 30, 2012, an increase of 44.9% from $53.0 million for the corresponding period in 2011. For the nine months ended September 30, 2012, gross margin was 35.4%, compared to 34.4% for the corresponding period in 2011.

Operating Income and Operating Margin

Operating income for the nine months ended September 30, 2012 was $18.5 million, an increase of 75.6% from $10.5 million for the corresponding period in 2011. Non-GAAP operating income for the nine months ended September 2012 was $30.0 million, an increase of 65.7% from $18.1 million for the corresponding period in 2011.

Operating margin was 8.5% for the nine months ended September 30, 2012, compared to 6.8% for the corresponding period in 2011. Non-GAAP operating margin was 13.9% for the third quarter of 2012, compared to 11.8% for the corresponding period in 2011.

Provision for Income Taxes

Provision for income taxes was $3.6 million for the nine months ended September 30, 2012, compared to a $1.3 million for the corresponding period in 2011. The increase in income tax rate was primarily a result of the phasing out of the preferential tax rates for some of HiSoft's operating entities.

Effective tax rate was 17% for the nine months ended September 30, 2012. Excluding certain non-deductible merger-related transaction costs for Cayman islands tax purposes, the effective tax rate would have been 15.0% for the nine months ended September 30, 2012.

Net Income and Net Income per ADS

Net income attributable to HiSoft was $17.1 million for the nine months ended September 30, 2012, an increase of 54.1%, compared to $11.1 million for the corresponding period in 2011. Diluted net income per ADS was $0.54 for the nine months ended September 30, 2012, compared to $0.35 for the corresponding period in 2011.

Non-GAAP net income was $28.7 million for the nine months ended September 30, 2012, an increase of 53.2% from $18.7 million for the corresponding period in 2011. Non-GAAP diluted net income per ADS was $0.90 for the nine months ended September 30, 2012 compared to $0.59 for the corresponding period in 2011.

Cash Flow and DSO

Operating cash flow for the nine months ended September 30, 2012 was a net inflow of approximately $3.0 million.

Days sales outstanding was 96 days for the nine-month period ending September 30, 2012.

Third Quarter 2012 Financial Results of VanceInfo

Net Revenues

Net revenues were $96.2 million in the third quarter of 2012, up 36.9% from $70.3 million for the third quarter of 2011. The increase in net revenues was attributable to the demand from most of the markets VanceInfo served, except the European market.

Net Revenues by Service Line

VanceInfo provided four service lines: R&D Outsourcing Services ("RDS"), Consulting and Solutions Services ("C&S"), Application Management Services ("AMS") and Other Solutions & Services ("Others").

Consistent with the VanceInfo's growth strategy, net revenues from C&S grew 107.8% over the same period in 2011 and contributed 13.2% of total net revenues in the third quarter of 2012. Net revenues from AMS increased 35.5% from the third quarter of 2011, accounting for 37.1% of total net revenues in the third quarter of 2012.


Three Months Ended September 30, 2012

Three Months Ended September 30, 2011

Year-over-Year % Change

($ in thousands, except percentages)

RDS

43,255

45.0%

34,601

49.2%

25.0%

C&S

12,748

13.2%

6,135

8.7%

107.8%

AMS

35,704

37.1%

26,343

37.5%

35.5%

Others

4,533

4.7%

3,215

4.6%

41.0%

Total net revenues

96,240

100.0%

70,294

100.0%

36.9%

Net Revenues by Geographic Markets

Net Revenues based on Location of Clients' Headquarters


Three Months Ended
September 30, 2012

Three Months Ended
September 30, 2011

Year-over-Year
% Change

($ in thousands, except percentages)

Greater China

49,318

51.2%

32,939

46.9%

49.7%

United States

31,261

32.5%

22,927

32.6%

36.4%

Europe

8,639

9.0%

11,097

15.8%

(22.2)%

Japan

4,268

4.4%

2,529

3.6%

68.8%

Others

2,754

2.9%

802

1.1%

243.4%

Total

96,240

100.0%

70,294

100.0%

36.9%

Based on the location of clients' headquarters, net revenues from Greater China were $49.3 million or 51.2% of total net revenues in the third quarter of 2012, followed by 32.5% from the United States, 9.0% from Europe and 4.4% from Japan.

Measuring the VanceInfo's revenues by geographic markets based on the location of the contract signing entities, Greater China accounted for 69.3% of total net revenues in the third quarter of 2012, while the United States accounted for 23.5% in the same period.

Net Revenues by Industry

VanceInfo classified its clients into four industry segments: Telecommunications ("Telecom"), High Technology ("High Tech"), Banking, Financial Services and Insurance ("BFSI"), and other industry segments including manufacturing, retail, distribution, travel and transportation and public services ("Others").


Three Months Ended September 30, 2012

Three Months Ended September 30, 2011

Year-over-Year % Change

($ in thousands, except percentages)

Telecom

33,725

35.0%

27,510

39.1%

22.6%

High Tech

30,713

31.9%

23,186

33.0%

32.5%

BFSI

18,434

19.2%

8,603

12.2%

114.3%

Others

13,368

13.9%

10,995

15.7%

21.6%

Total net revenues

96,240

100.0%

70,294

100.0%

36.9%

Largest Clients

Revenues from VanceInfo's top five clients totaled $46.7 million or 48.6% of total net revenues in the third quarter of 2012, compared to 50.2% in the third quarter of 2011.

Gross Profit and Gross Margin

Gross profit in the third quarter of 2012 was $30.2 million, an increase of 26.0% from $24.0 million in the third quarter of 2011. Gross margin was 31.4% in the third quarter of 2012, compared to 34.1% in the third quarter of 2011.

Operating Income and Operating Margin

Operating income in the third quarter of 2012 was $5.1 million, compared to $2.6 million in the third quarter of 2011. Non-GAAP operating income in the third quarter of 2012 was $8.5 million, up 54.5% from $5.5 million in the same period in 2011. Non-GAAP operating margin was 8.9% in the third quarter of 2012, compared to 7.9% in the third quarter of 2011. The year-over-year increase of Non-GAAP operating margin was primarily due to the higher pre-sale expenses associated with VanceInfo's strategic investment in BFSI consulting and solutions capabilities in September 2011.

Provision for Income Taxes

The effective income tax rate was 15.9%, compared to 4.8% in the same period of 2011. The higher effective income tax rate reflected the expiration of tax holiday in 2012 of a major China-based operating subsidiary.

Net Income and EPS

Net income in the third quarter of 2012 was $4.9 million, up 54.3% from $3.2 million in the third quarter of 2011. Non-GAAP net income was $8.3 million in the third quarter of 2012, up 35.8% from $6.1 million in the same period in 2011. Non-GAAP  net margin was 8.7% in the third quarter of 2012, which was the same as the third quarter 2011.

For the third quarter of 2012, diluted EPS and Non-GAAP diluted EPS were $0.11 and $0.19, respectively, compared with $0.07 and $0.14, respectively, for the third quarter of 2011.

Cash Flow and DSO

As of September 30, 2012, VanceInfo had cash and cash equivalents, restricted cash, term deposits and short-term investments totaling $80.2 million. Operating cash flow in the third quarter of 2012 was a net inflow of approximately $5.6 million.

Days sales outstanding ("DSO") was 143 days for the third quarter of 2012, compared to 132 for the second quarter of 2012. DSO was 130 days for the trailing twelve months ended September 30, 2012, compared with 128 days for the trailing twelve months ended June 30, 2012.

First Nine Months 2012 Financial Results of VanceInfo

Net Revenues

Net revenues for the first nine months of 2012 were $277.1 million, up 41.4% from $195.9 million in the first nine months of 2011.

Net Revenues by Service Line


Nine Months Ended September 30, 2012

Nine Months Ended September 30, 2011

Year-over-Year % Change

($ in thousands, except percentages)

RDS

133,169

48.1%

104,610

53.4%

27.3%

C&S

34,189

12.3%

16,310

8.3%

109.6%

AMS

97,492

35.2%

67,625

34.5%

44.2%

Others

12,243

4.4%

7,404

3.8%

65.4%

Total net revenues

277,093

100.0%

195,949

100.0%

41.4%

Net Revenues by Geographic Markets

Net Revenues based on Location of Clients' Headquarters


Nine Months Ended September 30, 2012

Nine Months Ended September 30, 2011

Year-over-Year % Change

($ in thousands, except percentages)

Greater China

135,167

48.8%

92,151

47.0%

46.7%

United States

94,268

34.0%

63,937

32.6%

47.4%

Europe

28,846

10.4%

31,439

16.0%

-8.2%

Japan

12,032

4.3%

6,606

3.4%

82.1%

Others

6,780

2.5%

1,816

1.0%

273.3%

Total Net Revenues

277,093

100.0%

195,949

100.0%

41.4%

Based on the location of its clients' headquarters, Greater China was VanceInfo's largest geographic market, accounting for $135.2 million or 48.8% of the net revenues in the first nine months of 2012, followed by 34.0% from clients headquartered in the United States, 10.4% in Europe and 4.3% in Japan.

Measuring VanceInfo's revenues by geographic markets based on the location of the contract signing entities, rather than the location of the clients' headquarters, Greater China accounted for 67.7% of net revenues in the first nine months of 2012, while the United States accounted for 25.3% in the same period.

Net Revenues by Industry


Nine Months Ended September 30, 2012

Nine Months Ended September 30, 2011

Year-over-Year % Change

($ in thousands, except percentages)

Telecom

99,314

35.8%

$80,852

41.3%

22.8%

High Tech

93,815

33.9%

64,800

33.1%

44.8%

BFSI

47,723

17.2%

22,619

11.5%

111.0%

Others

36,241

13.1%

27,678

14.1%

30.9%

Total net revenues

277,093

100.0%

195,949

100.0%

41.4%

Largest Clients

Revenues from the top five clients totaled 51.7% of VanceInfo's net revenues in the first nine months of 2012, compared to 53.1% in the same period in 2011.

Gross Profit and Gross Margin

Gross profit for the first nine months of 2012 was $88.2 million, an increase of 25.4% from $70.3 million in the first nine months of 2011. Gross margin was 31.8% in the first nine months of 2012, compared to 35.9% in the prior year period.

Operating Income and Operating Margin

Operating income in the first nine months of 2012 was $13.8 million, compared with $17.1 million in the same period last year. Non-GAAP operating income in the first nine months of 2012 was $24.3 million, compared with $24.5 million in the same period last year. Non-GAAP operating margin was 8.8% in the first nine months of 2012, compared to 12.5% in the year-ago period.

Net Income and EPS                  

Net income for the first nine months of 2012 was $12.9 million, compared to $17.3 million for the same period of 2011. Non-GAAP(1) net income was $23.4 million for the first nine months of 2012, compared with $24.7 million a year ago. Non-GAAP net margin(1) was 8.5%, compared with 12.6% in the first nine months of 2011. Diluted EPS for the first nine months of 2012 was $0.30, compared to $0.38 in the same period of 2011. Non-GAAP diluted EPS was $0.54 for the first nine months of 2012, which was the same as the first nine months of 2011.

Outlook for Pactera's Fourth Quarter 2012

For the fourth quarter of 2012, based on current market and operating conditions and current book orders, Pactera expects:

  • Net revenues to be at least US$136 million, including the former HiSoft's estimated results for the whole fourth quarter and VanceInfo's estimated results for the period from November 9, 2012 to December 31, 2012.
  • Non-GAAP diluted net income per ADS to be in the range of $0.22 to $0.24, estimated based on the whole fourth quarter results of the former HiSoft and the results of the former VanceInfo for the period from November 9, 2012 to December 31, 2012 and 68.9 million weighted average equivalent ADSs outstanding including common shares and ADSs issued in connection with the merger with former VanceInfo since November 9, 2012.

These estimates are based on current market and operating conditions, are subject to change, and may be influenced positively or negatively by factors outside the Company's control, including but not limited to macroeconomic events in the markets in which the Company operates. See "Safe Harbor Statement" below for additional information regarding forward-looking statements.

Conference Call

The Company will host a combined earnings conference call and live webcast at 7:00 AM Eastern Standard Time (EST) on Thursday, November 15, 2012 (8:00 PM Beijing/Hong Kong time). Management will discuss the quarter results and highlights of both companies respectively and answer questions from investors. Please dial-in five minutes prior to the call to register and receive further instruction.

This combined earnings conference call replaces the previously announced third quarter 2012 earnings conference calls for HiSoft and VanceInfo, respectively.

The dial-in details for the live conference call are as below:

-- U.S. Toll Free Dial-in Number: + 1.866.519.4004
-- International Dial-in Number: + 65.6723.9381
-- Hong Kong Dial-in Number: + 852.2475.0994
-- Passcode: 44087166

The conference call will be available live via webcast on the Investors section of Pactera's website at http://ir.pactera.com . The archive replay will be available on Pactera's website shortly after the call.

A dial-in replay of the conference call will be available until November 23, 2012:

-- U.S. Toll Free Dial-in Number: + 1.866.214.5335
-- International Dial-in Number: + 61.2.8235.5000
-- Passcode: 44087166

About Pactera

Pactera Technology International Ltd. (NASDAQ: PACT), formed by a merger of equals between HiSoft Technology International Limited and VanceInfo Technologies Inc., is a global consulting and technology services provider strategically headquartered in China. Pactera provides world-class business / IT consulting, solutions, and outsourcing services to a wide range of leading multinational firms through a globally integrated network of onsite and offsite delivery locations in China, the United States, Europe, Australia, Japan, Singapore and Malaysia. Pactera's comprehensive services include business and technology advisory, enterprise application services, business intelligence, application development & maintenance, mobility, cloud computing, infrastructure management, software product engineering & globalization, and business process outsourcing.

For more information about Pactera, please visit www.pactera.com.

Safe Harbor Statement

This news release contains forward-looking statements. These statements constitute "forward-looking" statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "target," "going forward," "outlook" and similar statements. Such statements are based upon management's current expectations and current market and operating conditions, and relate to events that involve known or unknown risks, uncertainties and other factors, all of which are difficult to predict and many of which are beyond Pactera's control, which may cause Pactera's actual results, performance or achievements to differ materially from those in the forward-looking statements. Potential risks and uncertainties include, but are not limited to, the Company's dependence on a limited number of clients for a significant portion of its revenues, uncertainty relating to its clients' forming or plan to form joint venture with the Company's clients, the economic slowdown in its principal geographic markets, the quality and portfolio of its service lines and industry expertise, and the availability of a large talent pool in China and inflation of qualified professionals' wages, as well as the PRC government's investment in infrastructure construction and adoption of various incentives in the IT service industry. Further information regarding these and other risks, uncertainties or factors is included in Pactera's filings with the U.S. Securities and Exchange Commission. All information provided in this news release is as of the date of this news release, and Pactera does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law. 

About Non-GAAP Financial Measures

To supplement Pactera's consolidated financial results presented in accordance with GAAP, Pactera uses the following measures defined as non-GAAP financial measures by the SEC: non-GAAP income from operations, non-GAAP net income and non-GAAP diluted EPS and related margins which exclude share-based compensation expense, amortization of acquired intangible assets and land use right, merger-related costs, change in fair value of contingent consideration payable for business acquisition, and compensation expenses related to acquisition. The non-GAAP income from operations, net income and diluted EPS for prior periods have been reclassified so that the presentations are consistent. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for or superior to the financial information prepared and presented in accordance with GAAP or as being comparable to results reported or forecasted by other companies. For more information on these non-GAAP financial measures, please see the tables captioned "Reconciliations of non-GAAP Financial Measures to Comparable GAAP Measures" and "Reconciliations of Forward-Looking Guidance for non-GAAP Financial Measures to Comparable GAAP Measures" set forth at the end of this news release.

Pactera believes that these non-GAAP financial measures provide meaningful supplemental information regarding its performance by excluding certain expenses and expenditures that may not be indicative of its operating performance. The Company believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing the Company's performance and when planning and forecasting future periods. A limitation of using non-GAAP net income and non-GAAP diluted EPS is that these non-GAAP measures exclude the share-based compensation charges, amortization of acquired intangible assets and land use right, merger-related transaction and integration costs, and change in fair value of contingent consideration payable for business acquisition that have been and will continue to be, for the foreseeable future, a significant recurring expense in the business. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from each non-GAAP measure. The accompanying tables have more details on the reconciliations between GAAP financial measures that are comparable to non-GAAP financial measures. The reconciliations of the forward-looking guidance for non-GAAP financial measures to the most directly comparable GAAP financial measures in the accompanying table include all information reasonably available to Pactera at the date of this news release.

(1) Non-GAAP gross profit, non-GAAP operating income, non-GAAP net income, non-GAAP basic and diluted net income per ADS and corresponding margins presented in this press release exclude share-based compensation expense, amortization of acquired intangible assets and land use right, merger-related transaction and integration costs, and change in fair value of contingent consideration payable for business acquisition and compensation expenses related to acquisition. The non-GAAP measures and related reconciliations to GAAP measures are described in the accompanying section of "About Non-GAAP Financial Measures" and the accompanying tables of "Reconciliations of Non-GAAP Financial Measures to Comparable GAAP Measures" and "Reconciliations of Forward-Looking Guidance for Non-GAAP Financial Measures to Comparable GAAP Measures" at the end of the news release.

(2) Based on equivalent weighted average ADSs outstanding of HiSoft for the three months ended September 30, 2012, each American depositary share representing 19 common shares.

(3) Based on weighted average ordinary shares outstanding of VanceInfo for the three months ended September 30, 2012.

 









HISOFT TECHNOLOGY INTERNATIONAL LIMITED



Condensed Consolidated Balance Sheets (Unaudited)



(US dollars in thousands, except share data)












September 30, 2012


December 31, 2011










ASSETS







Current Assets







Cash and cash equivalents


102,487


113,856



Restricted cash


2,030


1,222



Term deposits


16,186


21,681



Account receivable, net


90,140


61,413



Other current assets


17,007


7,135



Total current assets


227,850


205,307










Property, plant and equipment, net


13,329


13,774



Goodwill and intangible assets, net


67,327


52,546



Other long-term assets


4,561


1,552



Total assets


313,067


273,179










LIABILITIES AND EQUITY







Current liabilities


61,224


51,029



(including current liabilities of the consolidated variable interest entity without recourse to Hisoft Technology International Limited  of  $242 and $238 as of September 30, 2012 and December 31, 2011, respectively)







Other liabilities


17,196


12,260



Total liabilities


78,420


63,289



Total shareholder's equity


234,647


209,890



Total liabilities and equity


313,067


273,179

















Note:







As of September 30, 2012, there were 625,867,996 ordinary shares (32,940,421 ADSs) issued and outstanding.


As of December 31, 2011, there were 595,868,033 ordinary shares (31,361,475 ADSs) issued and outstanding.

 








 













HISOFT TECHNOLOGY INTERNATIONAL LIMITED




Condensed Consolidated Statements of Operations (Unaudited)




(US dollars in thousands, except for share, per share data)
















Three months ended September 30,


Nine months ended September 30,





2012


2011


2012


2011















Net revenues

79,572


58,874


216,829


154,053




Cost of revenues

(51,270)


(37,925)


(140,013)


(101,025)




Gross profit

28,302


20,949


76,816


53,028















Operating expenses

(23,008)


(16,882)


(58,362)


(42,519)




Income from operations

5,294


4,067


18,454


10,509















 Other income 

833


854


2,888


2,073




 Net income before income tax expenses                

6,127


4,921


21,342


12,582















 Income tax expenses 

(1,287)


(416)


(3,569)


(1,259)




Net income

4,840


4,505


17,773


11,323















Less: Net income attributable to noncontrolling interest

(174)


(92)


(666)


(219)




Net income attributable to Hisoft Technology International Limited











4,666


4,413


17,107


11,104















Net income per share











Basic

0.01


0.01


0.03


0.02




Diluted

0.01


0.01


0.03


0.02















Weighted average shares used in calculating net income per common share











Basic

578,534,651


595,251,268


576,313,461


586,484,199




Diluted

600,326,570


597,081,354


600,993,414


599,159,307















Net income per ADS











Basic

0.15


0.14


0.56


0.36




Diluted

0.15


0.14


0.54


0.35















Weighted average ADS used in calculating net income per ADS











Basic

30,449,192


31,329,014


30,332,287


30,867,589




Diluted

31,596,135


31,425,334


31,631,232


31,534,700

























 















HISOFT TECHNOLOGY INTERNATIONAL LIMITED





Condensed Consolidated Statements of Comprehensive Income (Unaudited)





(US dollars in thousands, except for share, per share data)


















Three months ended September 30,


Nine months ended September 30,






2012


2011


2012


2011
















Net income

4,840


4,505


17,773


11,323




Other comprehensive income, net of tax:       












Change in cumulative foreign exchange translation adjustment

2,491


739


1,513


3,876




Comprehensive income

7,331


5,244


19,286


15,199
















Less: Comprehensive income attributable to noncontrolling interest











(195)


(104)


(673)


(252)




Comprehensive income attributable to Hisoft Technology International Limited











7,136


5,140


18,613


14,947

















HISOFT TECHNOLOGY INTERNATIONAL LIMITED



CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS



(in U.S. dollars in thousands)
















Three months ended September 30,


Nine months ended September 30,




2012


2011


2012


2011

Cash flows from operating activities:























Net income                                                                                                             


$

4,840

$

4,505

$

17,773

$

11,323


Adjustments to reconcile net income to net cash provided by operating activities:









(Reversal) provision for doubtful accounts



(119)


(3)


(30)


205



(Gain) loss on disposal of property, plant and equipment



(8)


6


(52)


38



Depreciation



1,343


1,148


4,141


3,083



Change in fair value of foreign-currency forward contract



(68)


(14)


(23)


39



Success fee related to business acquisition



-


450


-


450



Amortization of intangible assets



1,555


787


3,763


1,633



Interest expense 



-


-


-


64



Share-based compensation expenses



1,417


1,806


5,223


4,097



Changes in fair value of contingent consideration



463


788


117


1,440


Changes in operating assets and liabilities:












Accounts receivable



(2,737)


(4,926)


(22,469)


(13,362)



Other current assets



(552)


(879)


(2,131)


1,242



Income tax receivable



-


1,727


-


2,565



Other assets



(696)


(262)


(934)


(329)



Accounts payable



(1,245)


(164)


(2,521)


(656)



Other liabilities



862


(3,449)


178


(3,490)













Net cash provided by operating activities



5,055


1,520


3,035


8,342













Cash flows from investing activities:











Term deposits



20,036


(32,356)


5,324


(32,356)


Purchase of property, plant and equipment



(1,052)


(2,066)


(3,381)


(5,906)


Prepayment of buliding purchase (1)



(6,507)


-


(6,507)


-


Restricted cash



(582)


(458)


(788)


(782)


Deferred and contingent consideration paid for business acquisition


(5,145)


(4,607)


(7,233)


(5,607)


Payment of success fee related to business acquisition



-


(450)


-


(450)













Net cash provided by (used in) investing activities



6,750


(39,937)


(12,585)


(45,101)













Cash flows from financing activities:











Repayment of bank loan



(293)


-


(476)


(40,064)


Cash received from non-controlling



-


-


-


908


Proceeds from issuance of common share under employee option plan

129


489


1,399


4,658


Deferred and contingent consideration paid for business acquisition


(150)


(4,260)


(3,047)


(9,560)













Net cash used in  financing activities



(314)


(3,771)


(2,124)


(44,058)













Effect of exchange rate changes 



571


658


305


2,597













Net increase (decrease) in cash and cash equivalents



12,062


(41,530)


(11,369)


(78,220)

Cash and cash equivalents at beginning of period



90,425


133,203


113,856


169,893













Cash and cash equivalents at end of period


$

102,487

$

91,673

$

102,487

$

91,673

























Note 1: We will purchase a campus facility in Wuxi. The facility consists of the building property, and the underlying leased payments for the land use right. The current amount of prepayment in the third quarter of 2012 is principally made for the building portion and accordingly included under investing activities. Any subsequent payments attributable to the leased payments for the land use right will be presented under operating activities.

 













HISOFT TECHNOLOGY INTERNATIONAL LIMITED



Reconciliations of Non-GAAP Financial Measures to Comparable GAAP Measures



(US dollars in thousands, except per share data and percentages)





































Three months ended September 30,


Nine months ended September 30,




2012


2011



2012


2011














GAAP operating income

5,294


4,067



18,454


10,509



GAAP operating income %                                                                   

6.7%


6.9%



8.5%


6.8%














Adjustments: 











 - Share-based compensation

1,417


1,806



5,223


4,097



 - Amortization of acquired intangible assets

1,555


787



3,763


1,633



 - Change in fair value of contingent consideration payable for M&A

463


788



117


1,440



 - Success fee related to business acquisition

-


450





450



 - Compensation expenses related to acquisition

87


-



87


-



 - Merger related costs

2,388


-



2,388


-














Non-GAAP operating income

11,204


7,898



30,032


18,129



Non-GAAP operating income%

14.1%


13.4%



13.9%


11.8%

























GAAP net income

4,666


4,413



17,107


11,104



GAAP net margin

5.9%


7.5%



7.9%


7.2%














Adjustments: 











 - Share-based compensation

1,417


1,806



5,223


4,097



 - Amortization of acquired intangible assets

1,555


787



3,763


1,633



 - Change in fair value of contingent consideration payable for M&A

463


788



117


1,440



 - Success fee related to business acquisition

-


450



-


450



 - Compensation expenses related to acquisition

87


-



87


-



 - Merger related costs

2,388


-



2,388


-














Non-GAAP net income

10,576


8,244



28,685


18,724



Non-GAAP net margin

13.3%


14.0%



13.2%


12.2%

























Non-GAAP net income per ADS











Basic

0.35


0.26



0.95


0.61



Diluted

0.33


0.26



0.90


0.59














Weighted average ADS used in calculating non-GAAP net income per ADS











Basic

30,449,192


31,329,014



30,332,287


30,867,589



Diluted

31,596,135


31,425,334



31,631,232


31,534,700














GAAP net income per ADS











Basic

0.15


0.14



0.56


0.36



Adjustments: 











 - Share-based compensation

0.05


0.05



0.17


0.14



 - Amortization of acquired intangible assets

0.05


0.03



0.13


0.05



 - Change in fair value of contingent consideration payable for M&A

0.02


0.03



0.01


0.05



 - Success fee related to business acquisition

-


0.01



-


0.01



 - Compensation expenses related to acquisition

-

-



-

-



 - Merger related costs

0.08


-



0.08


-



Non-GAAP net income per ADS











Basic

0.35


0.26



0.95


0.61

























GAAP net income per ADS











Diluted

0.15


0.14



0.54


0.35



Adjustments: 











 - Share-based compensation

0.04


0.05



0.16


0.13



 - Amortization of acquired intangible assets

0.05


0.03



0.12


0.05



 - Change in fair value of contingent consideration payable for M&A

0.01


0.03



-


0.05



 - Success fee related to business acquisition

-


0.01



-


0.01



 - Compensation expenses related to acquisition

-

-



-

-



 - Merger related costs

0.08


-



0.08


-



Non-GAAP net income per ADS











Diluted

0.33


0.26



0.90


0.59

























*  Less than 0.01















































 

VANCEINFO TECHNOLOGIES INC.

Condensed Consolidated Balance Sheets (Unaudited)

(US dollars in thousands, except share data)



September 30,


December 31,


2012


2011

Assets




Current assets




Cash and cash equivalents

78,431


96,170

Term deposits

-


5,000

Restricted cash

1,776


1,587

Held-to-maturity securities-current

-


9,401

Account receivable, net

164,055


126,389

Other current assets

14,929


16,042

Total current assets

259,191


254,589





Property and equipment, net

48,724


36,580

Goodwill and other intangible assets

74,665


67,807

Land use right

23,582


23,884

Other long-term assets

3,910


3,036

Total assets

410,072


385,896





Liabilities and equity




Current liabilities

70,387


66,438

Non-current liabilities

11,636


16,014

Total liabilities

82,023


82,452





Equity (a)

328,049


303,444





Total liabilities and equity

410,072


385,896









Note:




(a) As of September 30, 2012, there were 44,833,928 ordinary shares issued and 42,439,355 ordinary shares  outstanding, 

excluding 2,394,573 treasury stocks in the form of ADSs repurchased from the open market.



 



VANCEINFO TECHNOLOGIES INC.

Condensed Consolidated Statements of Comprehensive income (Unaudited)

(US dollars in thousands, except per share data)










Three months ended September 30,


Nine months ended September 30,


2012


2011


2012


2011









Net revenues

96,240


70,294


277,093


195,949

Cost of revenues (a)

(66,020)


(46,312)


(188,912)


(125,619)

Gross profit

30,220


23,982


88,181


70,330









Operating expenses (a)

(27,236)


(21,768)


(76,618)


(54,252)

Change in fair value of contingent consideration payable
     for business acquisition

2,152


372


2,236


974

Income from operations

5,136


2,586


13,799


17,052

Other income

709


764


1,543


2,083

Income before income taxes and earnings in equity method
     investment

5,845


3,350


15,342


19,135

Provision for income taxes

(927)


(160)


(2,441)


(1,848)

Income before earnings in equity method investment

4,918


3,190


12,901


17,287

Earnings(Loss)earnings in equity method investment

4


-


35


(34)

Net income

4,922


3,190


12,936


17,253

Income attributable to VanceInfo Technologies Inc. shareholders

4,922


3,190


12,936


17,253

Earnings per share








Basic - ordinary shares

0.12


0.07


0.31


0.40

Diluted - ordinary shares

0.11


0.07


0.30


0.38









Net income

4,922


3,190


12,936


17,253

Other comprehensive income, net of tax

2,397


2,765


853


6,275

Comprehensive income

7,319


5,955


13,789


23,528

Comprehensive income attributable to VanceInfo Technologies Inc.
  Shareholders

7,319


5,955


13,789


23,528









Weighted average shares outstanding (in thousands)








Basic - ordinary shares

42,418


43,090


42,211


43,530

Diluted - ordinary shares

43,698


44,996


43,623


45,736









Note:








(a)  Depreciation and amortization expenses included in cost of revenues and selling, general and administrative expenses totaled $3,480 and $2,839 for the three months ended September 30, 2012 and 2011, respectively and $10,072 and $7,451 for the nine months ended September 30,2012 and 2011,respectively. 

  Share-base compensation included in cost of revenues and selling, general and administrative expenses totaled $2,276 and $2,262 for the three months ended September 30, 2012 and 2011, respectively and $6,813 and $6,124 for the nine months ended September 30,2012 and 2011,respectively.

 

VANCEINFO TECHNOLOGIES INC.

Condensed Consolidated Statements of Cash Flow (Unaudited)

(US dollars in thousands)












 Three months ended September 30, 


 Nine months ended September 30, 



2012


2011


2012


2011

 Cash flows from operating activities: 









 Net income 

4,922


3,190


12,936


17,253

         Adjustments to reconcile net income to net cash  







  provided by operating activities:  









 Share-based compensation 

2,276


2,262


6,813


6,124


 Depreciation and amortization of property and equipment 

2,156


1,783


6,107


5,156


 Amortization of intangible assets 

1,205


1,056


3,605


2,295


 Amortization of land use right 

119


-


360


-


 Change in fair value of foreign-currency forward contracts 

(9)


32


(88)


270


 Loss on disposal of property and equipment 

29


14


43


21


 Allowance for doubtful accounts 

185


48


1,379


(247)


 Change in fair value of contingent consideration 

(2,152)


(372)


(2,236)


(974)


 (Earnings) loss in equity method investment 

(5)


-


(36)


35


 Gain on remeasurement of fair value
of noncontrolling equity investment 

-


(701)


-


(1,215)

         Changes in operating assets and liabilities 









 Accounts receivable 

(11,018)


(137)


(37,759)


(16,017)


 Other current assets 

40


(23)


732


(343)


 Other assets 

2


(64)


(247)


(45)


 Accounts payable 

389


127


(1,158)


(461)


 Other liabilities 

7,509


(2,681)


(1,685)


(3,886)


 Prepaid land use right 

-


(5,132)


-


(5,132)

 Net cash provided by (used in) operating activities 

5,648


(598)


(11,234)


2,834










 Cash flows from investing activities 









 Purchase of property and equipment 

(2,926)


(1,660)


(7,325)


(5,239)


 Payment for construction in progress 

(1,639)


-


(10,078)


-


 Consideration paid for business acquisitions 

-


(659)


(694)


(9,745)


 Term deposit 

-


-


5,000


-


 Restricted cash 

1,395


(1,104)


(189)


(873)


 Payment for settlement of foreign currency forward exchange contracts 

(42)


(339)


(42)


(339)


 Investments - held-to-maturity 

2,000


3,245


9,250


206

 Net cash used in investing activities 

(1,212)


(517)


(4,078)


(15,990)










 Cash flows from financing activities 









 Proceeds from exercise of options 

340


(223)


1,807


2,581


 Payment for issuance costs of ordinary shares upon share offering in 2010 

-


-


-


(52)


 Consideration paid for business acquisitions 

(1,072)


-


(4,076)


-


 Repurchase of ordinary shares 

-


(7,946)


-


(28,977)


 Short-term bank loan 

(1,578)


24


6


(1,518)

 Net cash used in financing activities 

(2,310)


(8,145)


(2,263)


(27,966)










 Effect of exchange rate changes on cash 

(127)


857


(164)


1,675

 Net increase (decrease) in cash and cash equivalents 

2,126


(9,260)


(17,575)


(41,122)

 Cash and cash equivalents, beginning of period 

76,432


130,221


96,170


161,265

 Cash and cash equivalents, end of period 

78,431


121,818


78,431


121,818


 

VANCEINFO TECHNOLOGIES INC.

Reconciliations of Non-GAAP Financial Measures to Comparable GAAP Measures

(US dollars in thousands, except per share data and percentages)














                Three months ended September 30, 2012            


            Three months ended September 30, 2011            

GAAP


Adjustments


 Non-GAAP 


GAAP


Adjustments


Non-GAAP













Income from operations

$5,136


$3,410

(a)

$8,546


$2,586


$2,946

(b)

$5,532

Operating margin

5.3%


3.6%

(a)

8.9%


3.7%


4.2%

(b)

7.9%

Net income

$4,922


$3,410

(a)

$8,332


$3,190


$2,946

(b)

$6,136

Net margin

5.1%


3.6%

(a)

8.7%


4.5%


4.2%

(b)

8.7%

Diluted EPS 

$0.11


$0.08

(e)

$0.19


$0.07


$0.07

(e)

$0.14



Nine months ended September 30, 2012


Nine months ended September 30, 2011

GAAP


Adjustments


Non-GAAP


GAAP


Adjustments


Non-GAAP

Income from operations

$13,799


$10,504

(c)

$24,303


$17,052


$7,445

(d)

$24,497

Operating margin

5.0%


3.8%

(c)

8.8%


8.7%


3.8%

(d)

12.5%

Net income

$12,936


$10,504

(c)

$23,440


$17,253


$7,445

(d)

$24,698

Net margin

4.7%


3.8%

(c)

8.5%


8.8%


3.8%

(d)

12.6%

Diluted EPS 

$0.30


$0.24

(e)

$0.54


$0.38


$0.16

(e)

$0.54













Notes:












(a) Adjustment to exclude acquisition related intangible assets amortization expense of $1,205, land use right amortization expense of $119, change in fair value of contingent consideration payable for business acquisition of $(2,152), merger-related costs of $1,962 and share-based compensation of $2,276 from the unaudited condensed consolidated statements of operations.

(b) Adjustment to exclude acquisition related intangible assets amortization expense of $1,056, change in fair value of contingent consideration payable for business acquisition of $(372) and share-based compensation of $2,262 from the unaudited condensed consolidated statements of operations.

(c) Adjustment to exclude acquisition related intangible assets amortization expense of $3,605, land use right amortization expense of $360, change in fair value of contingent consideration payable for business acquisition of $(2,236), merger-related costs of $1,962 and share-based compensation of $6,813 from the unaudited condensed consolidated statements of operations.

(d) Adjustment to exclude acquisition related intangible assets amortization expense of $2,295, change in fair value of contingent consideration payable for business acquisition of $(974),  and share-based compensation of $6,124 from the unaudited condensed consolidated statements of operations.  

(e) Non-GAAP diluted EPS is computed by dividing non-GAAP net income attributable to VanceInfo Technologies Inc. by the weighted average number of diluted ordinary shares outstanding used in computing the GAAP diluted EPS for the respective periods.

 

PACTERA TECHNOLOGY INTERNATIONAL LTD.

Reconciliations of Forward-Looking Guidance for

Non-GAAP Financial Measures to Comparable GAAP Measures

 (US dollars in thousands, except per share data)

 (Unaudited)










Three months ending December 31, 2012

GAAP


Adjustments


Non-GAAP


Range of Estimate




Range of Estimate









Diluted EPS (a)

0.10

0.12


0.12

(b)

0.22

0.24


Notes:








(a) Based on 68.9 million total ADS-equivalent average shares outstanding for the fourth quarter 2012.

(b) Reflects estimated adjustment for acquisition related intangible assets amortization expenses, land use right amortization expense, merger related transaction costs and share-based compensation expenses of approximately $8.3 million for the fourth quarter 2012. Additional merger integration costs have not been reflected in the adjustment, but will be a non-GAAP adjustment item when the amounts become available.

 


For further information, please contact:

Sheryl Zhang
Investor Relations
Pactera Technology International Ltd.
Tel: +86-10-8282-5330
E-mail: [email protected]

SOURCE Pactera Technology International Ltd

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