DUBLIN, Ireland, May 14, 2010 (GLOBE NEWSWIRE) -- Velti (LSE:VEL), a leading global provider of mobile marketing and advertising technology, today reported strong financial performance for 2009. The Company benefited from increasing demand for its technology and services from existing and new customers.
"In 2009 we continued to enhance our market position by focusing on execution of our growth opportunities and on our customers' success, resulting in 285% adjusted EBITDA year-on-year growth" said Alex Moukas, CEO of Velti.
Financial Highlights for the Year Ended December 31, 2009
| (in thousands USD) | ||||
|
2009 (unaudited) |
2008 (unaudited) |
% Change |
Organic** 2009 (unaudited) |
|
| Adjusted Revenue* | $ 89,965 | $ 49,521 | 82% | $ 88,950 |
| Adjusted EBITDA* | $ 26,855 | $ 6,969 | 285% | $ 30,174 |
* We present Adjusted Revenue and Adjusted EBITDA as a supplemental measure of our performance. Adjusted Revenue excludes $12.5 million in revenue and cost of revenue for 2008 which we recognized as gross rather than net revenues in connection with fees for media and other advertising production costs incurred on behalf of two customers for their mobile marketing and advertising campaigns. Adjusted EBITDA is defined as net income (loss) plus (i) income tax expense (benefit), (ii) interest expense, (iii) loss in equity investments, (iv) foreign exchange gains (losses), (v) depreciation and amortization, (vi) non-cash share-based compensation, and (vii) non-recurring general and administration charges of $0.5 million (accrued litigation settlement) and $2.8 million (redomiciliation exercise, and professional fees associated with our consideration of corporate opportunities) for 2008 and 2009, respectively. Set forth below is a reconciliation of Adjusted EBITDA to net income (loss) before non-controlling interest:
| 2009 | 2008 | |
| Net income (loss) before non-controlling interest | $6,264 | $(6,253) |
| Adjustments: | ||
| Income tax (benefit) expense | 410 | (26) |
| Interest expense | 2,370 | 1,155 |
| Loss from equity method investments | 2,223 | 2,456 |
| Foreign exchange (gains) losses | (14) | 1,665 |
| Depreciation and amortization | 11,522 | 5,446 |
| Non-cash share based compensation | 1,292 | 2,031 |
| Non-recurring G&A expenses | 2,788 | 495 |
| Adjusted EBITDA | $26,855 | $6,969 |
**Organic figures exclude Ad Infuse which we acquired in May 2009.
Adoption of U.S. GAAP
Our financial statements are prepared under generally accepted accounting principles in the United States (U.S. GAAP), which the Company has adopted beginning with the year ended December 31, 2009. The Company has elected to prepare its financial statements in accordance with U.S. GAAP in recognition of its increasingly global business and to provide results in a format more readily comparable to other companies in our industry.
The financial statements presented herein are not statutory financial statements. A reconciliation of the Company's results prepared in accordance with International Financial Reporting Standards (IFRS) to its results prepared under U.S. GAAP for the years ended December 31, 2007, 2008 and 2009 and for the six-month period ended June 30, 2009 are presented after the consolidated financial statement presentation below in order to show the impact on previously announced results prepared under IFRS.
In addition to the Company's transition to accounting under U.S. GAAP, the Company is restating its IFRS consolidated balance sheets as of December 31, 2008 and 2007, and the related consolidated statements of operations for the years ended December 31, 2008 and 2007.
These restatements reflect (a) adjustments to revenue as well as the deferral of government grant income in accordance with the income approach under IAS 20 — Accounting for Government Grants and Disclosure of Government Assistance, for the years ended December 31, 2008 and 2007; (b) adjustments to unbilled revenue; and (c) other adjustments, which primarily relate to share-based compensation.
An unqualified audit opinion was given on the financial statements by Baker Tilly Virchow Krause LLP, an independent registered public accounting firm in the United States of America.
Key Growth Drivers for 2009
Velti's 2009 growth reflects a combination of:
- Revenue growth and improving margins due to the adoption of Velti's performance-based solutions and our Software-as-a-Service (SaaS) model;
- continued investment in Velti's global footprint, which resulted in customer growth in China, India, U.S. and Europe through our local operations, joint ventures and equity investments in each geography; and
- the impact of our enhanced sales and marketing and business development operations, which has led to growth in our sales. During 2H 2009 we continued to gain new customer wins and create increased sales pipeline opportunities.
Statement of the Chairman and Chief Executive Officer
Introduction
During 2009, Velti benefited from demand for its technology and services from existing and new customers, who are increasingly turning to mobile advertising and marketing as a way to engage and retain consumers, and measure and optimize traditional media expenditure.
Financial Performance
For 2009, our total adjusted revenues were $90.0 million, an increase of $40.5 million (or 82%) as compared with $49.5 million for 2008 (adjusted to exclude the impact of $12.5 million of revenues recognized as gross, rather than net, revenues as described above).
Our revenue growth results from our continuing strong relationships with mobile operator and advertising agency customers as well as our ability to develop new relationships with brands and advertising agencies in developed and emerging markets. We have continued to invest in the infrastructure required to support our growth, expand our customer base globally and increase our presence in international markets, resulting in capital expenditures of $16.9 million and $20.0 million during 2008 and 2009, respectively.
Our adjusted EBITDA for 2009 improved to $26.9 million from $7.0 million for 2008 due to several reasons. First, on several contracts for which we commenced providing services and accordingly recognized costs in 2008, we did not complete negotiation of all terms of the contracts until 2009, and accordingly did not meet all of the criteria required to recognize the revenue generated under such contracts until 2009. Second, we continued to expand our business with existing customers, from whom we often generate higher margins because we have more experience with the customer and therefore can more easily and effectively optimize campaigns. Third, our contracts are increasing in scope and we are thereby achieving economies of scale on larger and longer-term contracts, particularly those with our mobile operator customers. Finally, we continue to standardize our technology platform, including increasing the number of templates we make available to our customers. This enables us to generate additional revenue through the provision of technology solutions that are less dependent on personnel-intensive managed services and as a result reduce our costs. In the second half of 2009, we incurred significantly higher sales and marketing and G&A expenses as a result of the acquisition of Ad Infuse, our increased global operations and the number of jurisdictions in which we provide services to customers, our recent redomiciliation to Jersey, and professional fees associated with various corporate opportunities and expansion of our internal infrastructure by hiring key personnel. See "Consolidated Financial Statements, Notes and Reconciliation of IFRS to U.S. GAAP" below for more details.
David Mann, Non-Executive Chairman commented:
"We are pleased that Velti delivered impressive growth in adjusted revenue and adjusted EBITDA despite the challenging economic climate during 2009. This reflects the strength of Velti's business model, together with the attractiveness of its solutions to brands, agencies, mobile operators and media companies around the world."
Alexandros Moukas, Chief Executive Officer added:
"We are positioned to benefit from the current spending shift from traditional solutions to more precisely targeted, interactive and measurable marketing and advertising campaigns. We have invested in new technologies, new geographies and a world-class team and, as evidenced by our strong results for 2009, our investment is delivering returns."
Operational Review
Introduction
We are a leading global provider of mobile marketing and advertising solutions that enable brands, advertising agencies, mobile operators and media to implement highly targeted, interactive and measurable campaigns by communicating with and engaging consumers via their mobile devices. Our platform allows our customers to use mobile and traditional media to contact targeted consumers, engage the consumer through the mobile internet and applications, convert them into customers and continue to actively manage the relationship between the brand and the consumer through the mobile channel. In 2009, over 450 brands, advertising agencies, mobile operators and media companies, including 11 of the 20 largest mobile operators worldwide, used our platform to conduct over 2,000 campaigns. We have the ability to conduct campaigns in over 35 countries and reach more than 2.5 billion global consumers.
We believe our integrated, easy to use, end-to-end platform is one of the most extensive mobile marketing and advertising campaign management platform in the industry. Whether the goal of the mobile campaign is to raise brand awareness, acquire new customers, increase loyalty or revenues, our platform enables brands, including mobile operators, and advertising agencies, to plan, execute, monitor and measure mobile marketing and advertising campaigns in real time throughout the campaign lifecycle. In addition, our platform enables the execution of campaigns that are not just driven by mobile media, but also seek to incorporate traditional media such as television, print, radio and outdoor advertising.
In January 2010, we released an enhanced version of our proprietary platform, Velti mGage™, which provides a one-stop-shop where our customers may plan marketing and advertising campaigns. They can also select advertising inventory, manage media buys, create mobile applications, websites and applications, build mobile CRM campaigns and track performance across their entire campaign in real-time.
We believe the mobile device is emerging as the principal interactive channel for brands to reach consumers since it is the only media platforms that has access to the consumer virtually anytime and anywhere. This is further driven by the continued growth of wireless data subscribers, the proliferation of mobile devices, smart phones and advanced wireless networks, and the increased provision of third party mobile content, applications and services. Increasingly, brands and advertising agencies are recognizing the unique benefits of the mobile channel and they are seeking to maximize its potential by integrating mobile media within their overall advertising and marketing campaigns. Our platform allows our customers to focus on campaign strategy, creativity and media efficiency without having to worry about the complexity of implementing mobile marketing and advertising campaigns globally.
As of the first quarter of 2010, we have 459 employees globally, with 128 in the critical area of sales and marketing and 242 engineers and software developers.
Our Strategy
Our objective is to be the leading global provider of mobile marketing and advertising solutions across multiple media. We intend to make it easier and more cost effective for brands, advertising agencies, mobile operators and media companies to take advantage of the unique benefits of mobile marketing and advertising campaigns, thereby further facilitating the growth in this market. The principal elements of our strategy are:
- Capitalize upon existing customer relationships and acquire new customers as our market expands. We intend to capitalize on our deep, trusted customer relationships to broaden the adoption of our solutions as their mobile marketing and advertising budgets and campaign requirements increase over time. We also intend to aggressively acquire new customers, educating them regarding the benefits of mobile marketing and advertising, the breadth and uniqueness of our solutions, and our ability to satisfy their global marketing and advertising campaign requirements.
- Deepen existing and add new advertising agency relationships. Advertising agencies provide important strategic advice to brands on the execution of marketing and advertising strategies while brands often delegate control to an advertising agency over a significant portion of the brand's marketing and advertising budget. We intend to continue to build and deepen our relationships with advertising agencies by continuing to increase our dedicated agency sales force, to enable us to accelerate the acquisition of new brands and deepen our relationships with existing brand and media customers.
- Grow revenue and enhance profitability by emphasizing the marketing portion of mobile campaigns. Mobile marketing enables brands and advertising agencies to engage and build long-term relationships with consumers, which we believe causes market opportunity for mobile marketing to be greater than the market for mobile advertising. Our fully integrated marketing and advertising platform allows our customers to use both mobile and traditional media to reach targeted consumers, engage consumers through the mobile internet and applications, convert consumers into customers by triggering a desired action and actively manage the relationship with the consumer through the mobile channel. By focusing on the entire campaign lifecycle, we are positioned to take advantage of the significant marketing budget dedicated to maintaining customer relationships and marketing additional goods and services to existing customers.
- Enable our platform by addressing technology shifts in mobile devices and computing. We believe the mobile device marketplace by its nature undergoes constant change as new technologies and products emerge. In particular, we believe that smartphone devices as well as tablet computers with mobile capabilities are growing and important components of mobile communications. We devote significant resources to address this evolving technology landscape with robust application interfaces for our platform that ensure we will be able to address the mobile marketplace as consumer device preferences evolve.
- Extend our leadership position by continuing to invest in our platform. We believe that the technical capabilities of our platform significantly surpass the ability of our competitors to provide brands, advertising agencies, mobile operators and media companies a comprehensive view of a consumer's interaction and engagement across a variety of media. Our recent research and development activities have been focused on enhancements to our platform, resulting in the release of our Velti mGage platform, an online, fully integrated end-to-end mobile marketing and advertising platform launched in January 2010. We intend to continue to invest in, and enhance the functionality of Velti mGage and develop new technology solutions to further strengthen and broaden our end-to-end platform. Generally, we target new releases of our software every eight weeks to meet the evolving needs of our customers and address potential new customers and markets.
- Encourage the adoption of our platform by third parties. Our Velti mGage platform provides a scalable, open architecture platform with application programming interfaces, or APIs, that allows third parties, including content delivery platform providers, application providers, campaign optimization specialists, mobile ad networks, and analytic and billing providers, to use the Velti mGage platform to execute marketing and advertising campaigns as well as to create new business opportunities and technology innovations. We have designed our platform to become central to the creation of a connected, global mobile marketing and advertising marketplace, and we believe that this platform will form the basis for a global mobile marketing and advertising ecosystem.
- Continue global expansion and strategically pursue partnerships and acquisitions. We intend to continue our geographic expansion into additional markets over time as needed in order to support our current and prospective customers and to expand our business. In addition, we will continue to evaluate and pursue strategic partnerships and acquisitions to further strengthen our platform, increase our geographic presence, expand relationships and enter into adjacent markets. Examples of what we have completed include our:
- Acquisition of Ad Infuse in 2009;
- Acquisition of M-Telecom in 2007;
- Joint venture with The Interpublic Group of Companies, Inc. to form Ansible Mobile, LLC;
- Joint venture with HT Media in India to form HT Mobile Solutions; and
- Minority investment and partnership with CASEE in China.
Global Expansion Continues
In greater China, we continued to expand through our investment in CASEE, and as a result, began penetrating the Chinese market. In addition, our joint venture with India's HT Media launched its first campaigns in June.
Acquisition of Ad Infuse
In May 2009, we completed the acquisition of Ad Infuse, a leading U.S. mobile ad network, with 31 employees based in San Francisco, New York and London and an experienced management team. Ad Infuse's mobile ad serving and routing technology platforms enable advertisers, publishers, brands and mobile operators to place ads on multiple networks and manage them in real time.
Launch of Velti mGage™
During 2009 we extended Velti's platform incorporating technology acquired from Ad Infuse to create the first online, fully integrated mobile marketing and advertising platform. Velti mGage™, launched at beginning of 2010, is built on a modular architecture designed to handle the full cycle of mobile marketing and advertising, including campaign and media planning, ad serving and routing, mobile websites, marketing, CRM, analytics and reporting requirements, in one end-to-end platform.
Changes to Velti Board of Directors
Today, we are making certain changes to our Board of Directors, and Menelaos Scouloudis, Chief Commercial Officer for Velti, has agreed to step down from the Board effective on May 12, 2010. He will remain an officer of the Company and a Board observer and continue to lead Velti's global sales organization.
Redomiciliation
In October 2009, the Company announced its redomiciliation in Jersey, through the creation of a new Jersey-incorporated, AIM-listed company named Velti plc as the holding company of Velti and its subsidiaries effective December 18, 2009. The change will allow Velti to act quickly and decisively with respect to market opportunities and pressures, while providing a more effective structure for our worldwide business.
Shareholders in Velti at the time of reorganization received shares in Velti plc in the same proportionate interest as they had in Velti immediately prior to the reorganization. The business, operations, assets and liabilities of the Velti Group under the new Jersey holding company immediately after the redomiciliation were no different from those immediately before the redomiciliation and the Directors have therefore treated this combination as a simple reorganization using the pooling of interests method of accounting.
Expansion of Management Team and Board of Advisors
Wilson W. Cheung joined us as CFO in 2009, to help guide the next stage of Velti's global growth. Wilson joined Velti from AXT, Inc., a NASDAQ-listed semiconductor firm, where he had been CFO since 2004. Prior to AXT, he held senior financial positions at NASDAQ-listed Yahoo! Inc. and interWAVE Communications (now Alvarion Ltd.). A California Certified Public Accountant, Mr. Cheung has worked in public accounting with Deloitte & Touche and KPMG and has brought to Velti significant compliance and operational skills.
Mike Walsh, VP, Business Development, will be based in London, leading Velti's sales efforts to brands and enterprises. He was previously at advertising agency group Ogilvy & Mather in various senior executive roles, including Director of the Worldwide Board, and Group CEO for UK, Europe, Middle East and Africa, a position he held for 13 years, where he managed 66 countries. He joined Ogilvy in 1983 after 11 years at Young & Rubicam and brings over 33 years of agency experience working with global brands such as Ford, Nestle, GSK, BAT, Air Canada, Spillers Petfoods, Polaroid, American Express, Heinz, Procter and Gamble and Cadbury. Mike is a trustee and former Vice-Chairman of the British Red Cross, was a World Trustee of WWF (World Wildlife Fund) and has served as Chairman of the UK Disasters Emergency Committee, representing 13 of the UK's largest international charities.
Dakota Sullivan, VP, Global Marketing, will be based in San Francisco and was previously Chief Marketing Officer for BlueLithium, the online advertising network that pioneered behavioral targeting until its 2008 acquisition by Yahoo. Prior to joining BlueLithium, he was Vice President, Marketing and Channel Sales at search engine technology leader LookSmart. Previously, he was VP, Creative Director at Foote, Cone & Belding, a global ad agency, where he managed campaigns for Lucent and AT&T. He also co-founded New York interactive advertising agency, Big Island, which was acquired by Marc USA, where he subsequently served as Managing Director of the New York office, responsible for clients including Bear Stearns, Verio and eSpeed. He holds a BA in business from the University of California, Berkeley.
David Rosenblatt joins Velti as a member of our Advisory Board. Since 2005 David served as the CEO of DoubleClick, the leading provider of digital marketing technology and service, until its acquisition by Google for $3.1 billion. He most recently served as President, Global Display Advertising, of Google, from October 2008 to May 2009. He joined DoubleClick in 1997 as part of the initial management team, and during his tenure he held several executive positions, including serving as CEO of DoubleClick from July 2005 through March 2008, and as President of DoubleClick from 2000 through July 2005. Prior to joining DoubleClick, Mr. Rosenblatt spent several years as an investment banker at S.G. Warburg & Co, in Hong Kong, London and New York. Mr. Rosenblatt graduated Magna Cum Laude from Yale University and the Stanford University Graduate School of Business.
Jack Plating joins Velti as a member of our Advisory Board. He most recently served as EVP and COO of Verizon Wireless, from which he retired at the end of 2009. Jack developed and managed the company's multi-channel distribution strategies and a comprehensive consumer marketing effort that includes more than 2,300 company-owned stores. He oversaw customer service and operations, advertising and marketing, product development and inventory and managed Verizon Wireless' $28 billion acquisition of Alltel. He was previously President of the South Area for Verizon Wireless, overseeing the integration of Bell Atlantic Mobile, AirTouch, GTE and Prime Co. into one operating unit. Jack began his career as a district sales manager for Motorola, then led the development of the wireless communications business for Metro Mobile, which was later acquired by Bell Atlantic Mobile. Jack is a graduate of the University of Arkansas.
2010 Equity Grant and Non-Executive Directors Compensation
In May 2010, the Company has issued and allotted 600,460 new ordinary shares of 5p each pursuant to the Company's Share Incentive Plan. Shares issued under the Share Incentive Plan to Directors of the Company were as follows:
| Director | Shares Vested | Total Shares Held | % of Issued Share Capital |
| Alexandros Moukas | 32,480 | 4,132,398 | 10.81% |
| Christos Kaskavelis | 26,880 | 4,632,901 | 12.12% |
The remuneration committee has also allotted 910,166 new restricted share units (RSUs) of 5p each pursuant to the Company's Share Incentive Plan and 2,491,482 stock options. Shares and stock options issued to Directors and Non-Executive Directors of the Company were as follows:
| Director | RSUs Granted | Stock Options Granted | IPO Options Granted |
| Alexandros Moukas | 81,301 | 571,429 | 65,000 |
| Christos Kaskavelis | 60,976 | 428,571 | 50,000 |
| Non-Exec Director | RSUs Granted | ||
| David Mann | 28,513 | ||
| David Hobley | 26,477 | ||
| Nicholas Negroponte | 24,440 | ||
| Jerry Goldstein | 24,440 |
Vesting of these deferred share awards will be subject to achievement of certain performance objectives. Should these performance objectives be met, and shares issued upon vesting of the deferred share awards, the Company's total issued and voting capital would be 38,335,807 ordinary shares. The Company does not hold any Ordinary Shares in Treasury.
Consolidated Financial Statements, Notes and Reconciliation of IFRS to U.S. GAAP
1. Restatement of IFRS Consolidated Financial Statements
In addition to our change to presenting our financial statements under U.S. GAAP, we are restating our consolidating balance sheets prepared under international financial reporting standards (IFRS) as of December 31, 2008 and 2007, and the related consolidated statements of operations for the years ended December 31, 2008 and 2007. These restatements reflect adjustments to revenue and the deferral of government grant income in accordance with the income approach under IAS 20 — Accounting for Government Grants and Disclosure of Government Assistance, unbilled revenue accruals and other items.
Adjustments to Revenue and Deferral of Government Grant Income
Previously under IFRS, we accounted for government grants in accordance with IAS 20 – Accounting for Government Grants Disclosure of Government Assistance. Government grants received by us are grants made under a European Union program administered by the Government of Greece in order to aid our technology development efforts. The grants are generally in the form of reimbursement of expenditures for past or future technology development efforts, conditioned upon our continued compliance with certain conditions imposed on the grants. We recognized income from government grants where there is reasonable assurance that the grant will be received and we are able to comply with all the attached conditions to the grant. We accounted for government grants using the income approach when grant revenue is recognized in the same period during which we recognized the associated costs that are reimbursed by the grants. Grants related to depreciable assets, including our capitalized software development efforts, are recognized as income over the periods, and in proportions, in which amortization of those assets were charged. Government grant income is presented as an offset to operating expenses in our consolidated income statements.
Adjustments made to restate grant revenue in previous years include the reclassification of grant revenue as a reduction to operating expenses and the deferral of grant income over the periods, and in proportions, in which amortization of our capitalized software development cost are charged. Previously, such grants had not been recognized in proportion to related costs. These adjustments had no impact on our cash flows.
Adjustments to Unbilled (accrued) revenue
Under IFRS, we previously recognized revenue by applying the percentage of completion method to each transaction at the end of the reporting period in accordance with IAS 18 – Revenue.
Under IFRS, our policy was to recognize revenue when the outcome of a transaction involving the rendering of services could be estimated reliably, revenue associated with the transaction was recognized by reference to the stage of completion of the transaction at the end of the reporting period. The outcome of a transaction could be estimated reliably when all of the following conditions were satisfied: (i) the amount of revenue could be measured reliably; (ii) it was probable that the economic benefits associated with the transaction would flow to the entity; (iii) the stage of completion of the transaction at the end of the reporting period could be measured reliably; and (iv) the costs incurred for the transaction and the costs to complete the transaction could be measured reliably.
Adjustments to unbilled revenue include the deferral of revenue to the periods in which all four of the conditions above were met. Previously, certain revenue had been recognized before all conditions were satisfied. As a result, $6.5 million of revenue was deferred from 2008 to 2009, and $5.9 million of revenue was deferred from 2007 to 2008.
In addition to the adjustments noted above, we recorded an allowance for doubtful accounts under IFRS of approximately $0.7 million for the six months ended June 30, 2009 related to certain revenue previously recognized under IFRS for which payment terms were subsequently extended resulting in the deferral of recognition under US GAAP.
Other Adjustments
An adjustment for share-based compensation that existed as of December 31, 2008 which resulted in an increase to selling and administrative expenses of approximately $0.7 million in 2008 and $0.8 million in 2007.
2. Change in Basis of Presentation
We have changed the preparation of our financial statements from IFRS as adopted by the European Union to U.S. GAAP commencing with our financial statements for the year ended December 31, 2009. Accordingly, all prior period consolidated financial statements have been retrospectively adjusted to reflect the changes and disclosures required under U.S. GAAP.
Summary of Key Changes to U.S. GAAP
(a) Proportionate Consolidation — Ansible Mobile LLC
Under IFRS, in accordance with IAS 31 – Interests in Joint Venture, entities in which all shareholders, by way of contractual arrangement, jointly control the significant operating policies thereof, were included in the consolidated financial statements by the proportionate consolidation method.
Under U.S. GAAP, investments in entities in which all shareholders, by way of contractual arrangement, jointly control the significant operating policies thereof, are accounted for by the equity method of accounting. Accordingly, the consolidated financial statements reflect our share of Ansible's operating loss as share of loss in associates in the consolidated income statements with the corresponding reduction to our investment account in the balance sheets for all periods presented.
(b) Accounting for Business Combination – M-Telecom Limited
Under IFRS, we have accounted for the acquisition of M-Telecom Limited in 2007 in accordance with IFRS 3 – Business Combinations, effective at the time of the acquisition. When a business combination agreement provides for an adjustment to the cost of the business combination contingent on future events, IFRS 3 (2007) requires the acquirer to include the amount of the adjustment in the cost of the business combination at the acquisition date if the adjustment is probable and can be reasonably measured.
Under U.S. GAAP and in accordance with Statement of Financial Accounting Standards 141 – Business Combinations (SFAS 141), effective at the time of the acquisition in 2007, contingent considerations are deferred until the contingencies are resolved. Accordingly, our consolidated balance sheets reflect the cost of acquisition of M-Telecom Limited excluding contingent considerations for all periods presented.
(c) Taxation
Under IFRS and in accordance with IAS 12, tax assets and liabilities should be measured at the amount expected to be paid.
Under U.S. GAAP, ASC 740 requires a two-step process, separating recognition from measurement. A benefit is recognized when it is "more likely than not" to be sustained based on the technical merits of the position. The amount of benefit to be recognized is based on the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate settlement. Detection risk is precluded from being considered in the analysis. Our tax provision calculation under ASC 740 was recorded retrospectively for the years ended December 31, 2007, 2008 and 2009.
(d) Revenue recognition on extended payment terms
Under IFRS, revenue was recognized when (i) the amount of revenue can be measured reliably; (ii) it is probable that the economic benefits associated with the transaction will flow to the entity; (iii) the stage of completion of the transaction at the end of the reporting period can be measured reliably; and (iv) the costs incurred for the transaction and the costs to complete the transaction can be measured reliably. We recognize revenue by applying the percentage of completion method for services rendered at the end of the reporting period in accordance with IAS 18 - Revenue.
Under U.S. GAAP, revenue is recognized when (i) there is persuasive evidence of an arrangement; (ii) service has been delivered; (iii) the fee is fixed and determinable; and (iv) collectability of the fee is reasonably assured. The timing of revenue recognition depends upon a number of factors, including the specific terms of each arrangement, the nature of our deliverables and obligations, and the existence of evidence to support recognition of our revenue as of the reporting date. If we determine that any one of the four criteria is not met, we will defer recognition of revenue until all the criteria are met. For contracts with extended payment terms, we recognize revenue when all of the criteria are met and when the fees under the contract are due and payable.
Foreign Currency Translation
Each entity within the Company has its own functional currency, and the results and financial position of each entity are translated into the Company's reporting currency that is used for the consolidated financial statements. We changed our reporting currency from Euros to U.S. dollars for the reporting period beginning January 1, 2009. Consequently, all data and comparative information for prior periods provided have been translated into U.S. dollars. In preparing our consolidated financial statements under U.S. GAAP, the financial statements of foreign subsidiaries whose functional currency is not U.S. dollars or the currency of a hyperinflationary economy are translated into U.S. dollars as follows:
- Assets and liabilities for each balance sheet presented are translated at the year-end rate;
- Income and expenses for each income statement presented are translated at the average rate for the year; and
- All resulting exchange differences are included as a component of shareholders' equity presented in our consolidated balance sheet as other comprehensive income (loss). Such translation differences are recognized as income or expense in the period in which the operation is disposed of.
| VELTI PLC | |||
| CONSOLIDATED STATEMENTS OF OPERATIONS | |||
| (in thousands, except per share amounts) | |||
|
Year Ended December 31, |
Six Months Ended June 30, |
||
| 2009 | 2008 | 2009 | |
| (unaudited) | (unaudited) | (unaudited) | |
| Revenue | $89,965 | $62,032 | $32,473 |
| Cost of revenue | 36,050 | 43,627 | 10,286 |
| Gross profit | 53,915 | 18,405 | 22,187 |
| Operating expenses: | |||
| Sales and marketing expenses | 14,508 | 10,768 | 5,999 |
| General and administrative expenses | 28,154 | 8,145 | 4,115 |
| Total operating expenses | 42,662 | 18,913 | 10,114 |
| Income (loss) from operations | 11,253 | (508) | 12,073 |
| Interest income | 50 | 149 | 43 |
| Interest expense | (2,420) | (1,304) | (788) |
| Gain (loss) from foreign currency transactions | 14 | (1,665) | (35) |
| Other expenses | -- | (495) | -- |
| Income (loss) before income taxes, equity method investments and non-controlling interest | 8,897 | (3,823) | 11,293 |
| Income tax (expense) benefit | (410) | 26 | (631) |
| Loss from equity method investments | (2,223) | (2,456) | (1,059) |
| Net income (loss) before non-controlling interest | 6,264 | (6,253) | 9,603 |
| Net loss attributable to non-controlling interest | (191) | (123) | (20) |
| Net income (loss) attributable to Velti | $6,455 | $ (6,130) | $9,623 |
| Net income (loss) per share attributable to Velti: | |||
| Basic | $0.18 | $ (0.18) | $0.28 |
| Diluted | $0.17 | $ (0.18) | $0.27 |
| Weighted average shares outstanding for use in computing: | |||
| Basic net income per share | 35,367 | 33,478 | 33,791 |
| Diluted net income per share | 37,167 | 33,478 | 35,480 |
|
VELTI PLC CONSOLIDATED BALANCE SHEETS (in thousands) |
||||
| December 31, | June 30, | |||
| 2009 | 2008 | 2007 | 2009 | |
| ASSETS | (unaudited) | (unaudited) | (unaudited) | (unaudited) |
| Current assets: | ||||
| Cash and cash equivalents | $19,655 | $14,321 | $16,616 | $15,799 |
| Trade and other receivables and other current assets | 55,853 | 26,473 | 16,755 | 45,136 |
| Total current assets | 75,508 | 40,974 | 33,371 | 60,935 |
| Non-current assets: | ||||
| Property and equipment, net | 3,342 | 3,390 | 2,347 | 3,630 |
| Intangible assets, net | 34,412 | 21,736 | 11,307 | 28,599 |
| Equity investments | 3,254 | 3,640 | 1,105 | 3,965 |
| Goodwill | 3,874 | 2,432 | 1,210 | 3,790 |
| Other assets | 1,668 | 482 | 446 | 459 |
| Total non-current assets | 46,550 | 31,680 | 16,415 | 40,443 |
| Total assets | $122,058 | $72,474 | $49,786 | $101,378 |
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||
| Current liabilities: | ||||
| Accounts payable and other accrued liabilities | 29,896 | 17,683 | 7,370 | 25,532 |
| Current portion of deferred government grant | 1,565 | 2,366 | 497 | 2,199 |
| Current portion of long-term debt and short-term financing | 21,200 | 13,870 | 2,220 | 13,953 |
| Total current liabilities | 52,661 | 33,919 | 10,087 | 41,684 |
| Long term debt, net of current portion | 17,661 | 3,550 | 285 | 10,641 |
| Deferred government grant – non-current | 2,651 | 4,095 | 4,804 | 3,118 |
| Retirement benefit obligations | 346 | 261 | 208 | 301 |
| Other non-current liabilities | 1,803 | 470 | 267 | 1,296 |
| Total liabilities | $75,122 | $42,295 | $15,651 | $57,040 |
| Commitments and contingencies | ||||
| Shareholders' equity: | ||||
| Share capital, nominal value £0.05, 100,000,000 ordinary shares authorized at December 31, 2009 and 50,000,000 ordinary shares authorized at December 31, 2008 and 2007 and at June 30, 2009; 37,530,261, 33,733,223 and 32,774,138 shares issued and outstanding at December 31, 2009, 2008 and 2007, respectively, and 35,104,848 shares issued and outstanding at June 30, 2009 (unaudited) | 3,339 | 3,043 | 2,948 | 3,084 |
| Additional paid-in capital | 42,885 | 34,194 | 31,641 | 38,085 |
| Accumulated deficit | (3,689) | (10,144) | (4,014) | (520) |
| Accumulated other comprehensive income | 4,315 | 2,747 | 3,186 | 3,371 |
| Total Velti shareholders' equity | 46,850 | 29,840 | 33,761 | 44,020 |
| Non-controlling interests | 86 | 339 | 374 | 318 |
| Total shareholders' equity | 46,936 | 30,179 | 34,135 | 44,338 |
| Total liabilities and shareholders' equity | $122,058 | $72,474 | $49,786 | $101,378 |
|
VELTI PLC CONSOLIDATED CASH FLOW STATEMENTS (in thousands) |
|||
|
Year Ended December 31, |
Six Months Ended June 30, |
||
| 2009 | 2008 | 2009 | |
| (unaudited) | (unaudited) | (unaudited) | |
| Cash flows from operating activities: | |||
| Net income (loss) | $6,264 | $ (6,253) | $9,603 |
| Adjustments to reconcile net income (loss) to net cash generated from (used in) operating activities: | |||
| Depreciation and amortization | 11,522 | 5,446 | 4,317 |
| Share-based compensation | 1,292 | 2,031 | 559 |
| Retirement benefit obligations | 85 | 53 | 40 |
| Deferred income taxes | 258 | (155) | 251 |
| Deferred government grant income | (2,245) | 1,160 | (1,144) |
| Undistributed loss from equity method investments | 274 | 569 | – |
| Change in operating assets and liabilities: | |||
| Trade receivables, other receivables and other current assets | (28,910) | (9,757) | (19,219) |
| Accounts payable and accrued liabilities | 9,369 | 10,669 | 5,206 |
| Other assets | (1,186) | (36) | 23 |
| Net cash generated from (used in) operating activities | (3,277) | 3,727 | (364) |
| Cash flow from investing activities: | |||
| Purchase of property and equipment | (601) | (1,809) | (464) |
| Investment in software development programs | (19,391) | (15,069) | (6,797) |
| Investment in subsidiaries and associates, net of cash acquired | (919) | (3,777) | (947) |
| Net cash used in investing activities | (20,911) | (20,655) | (8,208) |
| Cash flow from financing activities: | |||
| Net proceeds from issuance of ordinary shares | 4,322 | 68 | -- |
| Proceeds from borrowings and debt financing | 33,668 | 24,883 | 19,400 |
| Repayment of borrowings | (9,974) | (9,967) | (9,974) |
| Net cash generated from financing activities | 28,016 | 14,984 | 9,426 |
| Effect of change in foreign exchange rates | 1,506 | (351) | 624 |
| Net increase (decrease) in cash and cash equivalents | 5,334 | (2,295) | 1,478 |
| Cash and cash equivalents at beginning of year | 14,321 | 16,616 | 14,321 |
| Cash and cash equivalents at end of year | $19,655 | $14,321 | $15,799 |
Notes to Financial Statements
The financial information in this announcement does not constitute statutory financial statements as defined in Article 102 of the Companies (Jersey) Law 1991. Statutory accounts for the year ended December 31, 2008 for the previous parent company have been delivered to the Registrar of Companies in the United Kingdom. Copies of the Company's report and financial statements will be sent to shareholders shortly and will be available at the registered office of the Company: First Floor, 28-32 Pembroke Street Upper, Dublin 2, Republic of Ireland.
Principles of consolidation
The consolidated financial information includes the results of Velti plc and entities controlled by Velti plc (subsidiaries) forming the Group.
Subsidiaries are those entities in which the Company, directly or indirectly, controls more than one half of the voting power; or has the power to govern the financial and operating policies, to appoint or remove the majority of the members of the board of directors, or to cast a majority of votes at the meeting of directors. All transactions and balances among the Company and the Company's subsidiaries have been eliminated upon consolidation.
Non-controlling interests represent the portion of the net assets of subsidiaries attributable to interests that are not owned by the Group, whether directly or indirectly through subsidiaries. The non-controlling interests are presented in the consolidated balance sheets, separately from equity attributable to the shareholders of the Group. Non-controlling interests in the results of the Group are presented on the face of the consolidated statement of operations as an allocation of the total income or loss for the year between non-controlling shareholders and the shareholders of the Group.
Revenue Recognition
We recognize revenue when all of the following conditions are satisfied: (i) persuasive evidence of an arrangement exists, (ii) service has been delivered, (iii) fee is fixed or determinable, and (iv) collectability of the fee is reasonably assured. The timing of revenue recognition in each case depends upon a number of factors, including the specific terms of each arrangement, the nature of our deliverables and obligations, and the existence of evidence to support recognition of our revenue as of the reporting date. If we determine that any one of the four criteria is not met, we will defer recognition of revenue until all the criteria are met.
Segment and Geographic Information
Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (CODM), or decision making group, in deciding how to allocate resources and in assessing performance. Velti's CODM is our Chief Executive Officer. During the years ended December 31, 2009 and 2008, we operated in one operating segment.
We conduct our business in three geographical areas: Europe, Americas, and Asia/Africa. The following table provides revenue by geographical area. Revenue is allocated according to the location of the respective customer's operations.
| Year Ended December 31, | 6 Months Ended | ||
| 2009 | 2008 | June 30, 2009 | |
| Revenue: | (unaudited) | (unaudited) | (unaudited) |
| Europe | $ 65,945 | $ 50,096 | $ 29,471 |
| Americas | 4,049 | 1,586 | 1,048 |
| Asia/Africa | 19,971 | 10,350 | 1,954 |
| $ 89,965 | $ 62,032 | $ 32,473 | |
Two customers account for 29% of our total revenue in aggregate and one of such customers accounted for 10% or more of our total revenue in the year ended December 31, 2008. For the year ended December 31, 2009, no customer accounts for more than 10% of our total revenue.
Share‑Based Payments
Compensation expense related to shared‑based payment, including employee and director share‑based awards, is estimated using the Black‑Scholes option valuation model at the date of grant based on the share awards fair value and is recognized as expense over the requisite service period, using the "graded vesting attribution method" which allocates expense on a straight-line basis over the requisite service period for each separately vesting portion of the award as if the award was, in substance, multiple awards. We amortize the fair value of each vesting portion of an award on a straight-line basis over the requisite service period.
We account for share options issued to non-employees using the fair value method. The value of share options issued for consideration other than employee services is determined on the earlier of (i) the date on which there first exists a firm commitment for performance by the provider of goods or services, or (ii) on the date performance is complete, using the Black‑Scholes option valuation model. The compensation costs of these arrangements are subject to re-measurement over the vesting terms as earned.
Net Income (Loss) per Share
Basic net income (loss) per share is computed based on the weighted average number of ordinary shares outstanding. Diluted net income (loss) per share is computed based on the weighted average number of ordinary shares outstanding adjusted, to the extent dilutive, by the number of additional shares that would have been outstanding had the potentially dilutive ordinary shares been issued and reduced by the number of shares we could have repurchased with the proceeds from the potentially dilutive shares. Potentially dilutive shares include our deferred share awards and share options granted under share‑based payment plans.
| Year Ended December 31, | 6 Months Ended | ||
| 2009 | 2008 | June 30, 2009 | |
| (unaudited) | (unaudited) | (unaudited) | |
| Net income (loss) attributable to Velti | $ 6,455 | $ (6,130) | $ 9,623 |
| Basic net income (loss) per share | $ 0.18 | $ (0.18) | $ 0.28 |
| Diluted net income (loss) per share | $ 0.17 | $ (0.18) | $ 0.27 |
|
Weighted average number of shares outstanding for use in computing: |
|||
| Basic net income (loss) per share | 35,367 | 33,478 | 33,791 |
| Diluted net income (loss) per share | 37,167 | 33,478 | 35,480 |
|
Consolidated Income Statement For the twelve months ended December 31, 2007 |
||||||
|
IFRS as Reported |
IFRS as Reported |
Accounting for Government Grants (unaudited) |
Revenue & Cost of Revenue (unaudited) |
Share-based Payment (unaudited) |
IFRS Restated (unaudited) |
|
| (Euro in thousands) | (US dollars in thousands) | |||||
| Revenue | € 19,866 | $ 27,190 | $ (4,736) | $ (5,912) | $ -- | $ 16,542 |
| Cost of revenue | (7,535) | (10,320) | 850 | (422) | -- | (9,892) |
| Gross profit | 12,331 | 16,870 | (3,886) | (6,334) | -- | 6,650 |
| Selling expenses | (4,594) | (6,278) | 162 | -- | -- | (6,116) |
| Administrative expenses | (2,723) | (3,727) | 54 | -- | (688) | (4,361) |
| Operating profit (loss) | 5,014 | 6,865 | (3,670) | (6,334) | (688) | (3,827) |
| Net foreign exchange losses | (112) | (154) | -- | -- | -- | (154) |
| Finance costs | (383) | (524) | -- | -- | -- | (524) |
| Finance income | 136 | 186 | -- | -- | -- | 186 |
| Share of loss of associates | (178) | (245) | -- | -- | -- | (245) |
| Profit (loss) before tax | 4,477 | 6,128 | (3,670) | (6,334) | (688) | (4,564) |
| Taxation | (910) | (1,247) | 569 | 981 | 107 | 410 |
| Profit (loss) after tax | 3,567 | 4,881 | (3,101) | (5,353) | (581) | (4,154) |
| Attributable to: | ||||||
| Equity shareholders of the parent | 3,661 | 5,009 | (3,101) | (5,258) | (581) | (3,931) |
| Minority interest | (94) | (128) | -- | (95) | -- | (223) |
| Profit (loss) after minority interest | € 3,567 | $ 4,881 | $ (3,101) | $ (5,353) | $ (581) | $ (4,154) |
|
Consolidation Method (unaudited) |
Purchase Accounting (unaudited) |
Tax Positions Related (unaudited) |
Other Adjustments & Presentation (unaudited) |
US GAAP (unaudited) | |
| (US dollars in thousands) | |||||
| Revenue | $ (155) | $ -- | $ -- | $ 7 | $ 16,394 |
| Cost of revenue | 117 | -- | -- | (9,775) | |
| Gross profit | (38) | -- | -- | 7 | 6,619 |
| Selling expenses | 438 | -- | -- | -- | (5,678) |
| Administrative expenses | 29 | (78) | -- | 1 | (4,409) |
| Operating profit (loss) | 429 | (78) | -- | 8 | (3,468) |
| Net foreign exchange losses | -- | -- | -- | -- | (154) |
| Finance costs | -- | -- | -- | -- | (524) |
| Finance income | -- | -- | -- | -- | 186 |
| Share of loss of associates | (411) | -- | -- | -- | (656) |
| Profit (loss) before tax | 18 | (78) | -- | 8 | (4,616) |
| Taxation | (18) | -- | (212) | 18 | 198 |
| Profit (loss) after tax | -- | (78) | (212) | 26 | (4,418) |
| Attributable to: | |||||
| Equity shareholders of the parent | -- | (78) | (212) | 27 | (4,194) |
| Minority interest | -- | -- | -- | (1) | (224) |
| Profit (loss) after minority interest | -- | (78) | $ (212) | 26 | $ (4,418) |
|
Consolidated Balance Sheet As of December 31, 2007 |
||||||
|
IFRS as Reported |
IFRS as Reported |
Accounting for Government Grants (unaudited) |
Revenue & Cost of Revenue (unaudited) |
Share-based Payment (unaudited) |
IFRS Restated (unaudited) |
|
| ASSETS | (Euro in thousands) | (US dollars in thousands) | ||||
| Non-current assets | ||||||
| Property, plant and equipment | € 1,616 | $ 2,347 | $ -- | $ -- | $ -- | $ 2,347 |
| Intangible assets | 7,386 | 10,769 | -- | -- | -- | 10,769 |
| Investments in associates | 1,787 | 2,356 | -- | -- | -- | 2,356 |
| Goodwill | 2,899 | 4,234 | -- | -- | -- | 4,234 |
| Other assets | 625 | 913 | -- | -- | -- | 913 |
| 14,313 | 20,619 | -- | -- | -- | 20,619 | |
| Current assets | ||||||
| Receivables and prepayments | 15,861 | 23,086 | -- | (5,912) | -- | 17,174 |
| Available for sale investments | 27 | 39 | -- | -- | -- | 39 |
| Cash and cash equivalents | 11,616 | 16,957 | -- | -- | -- | 16,957 |
| 27,504 | 40,082 | -- | (5,912) | -- | 34,170 | |
| Total assets | € 41,817 | $ 60,701 | $ -- | $ (5,912) | $ -- | $ 54,789 |
| SHAREHOLDERS' EQUITY | ||||||
| Share capital | € 2,388 | $ 2,963 | $ -- | $ -- | $ -- | $ 2,963 |
| Share premium account | 21,788 | 29,391 | -- | -- | -- | 29,391 |
| Share-based payment reserve | 398 | 570 | -- | -- | 688 | 1,258 |
| Merger reserve | 1,071 | 1,268 | -- | -- | -- | 1,268 |
| Currency translation reserve | (251) | 4,086 | -- | -- | -- | 4,086 |
| Additional paid in capital (US GAAP only) | -- | -- | -- | -- | -- | -- |
| Retained earnings (deficit) | 4,402 | 5,326 | (4,301) | (5,258) | (581) | (4,814) |
| Total shareholders' equity | 29,796 | 43,604 | (4,301) | (5,258) | 107 | 34,152 |
| Minority Interest | 326 | 399 | -- | (95) | -- | 304 |
| Total equity | 30,122 | 44,003 | (4,301) | (5,353) | 107 | 34,456 |
|
Consolidation Method (unaudited) |
Purchase Accounting (unaudited) |
Tax Positions Related (unaudited) |
Other Adjustments & Presentation (unaudited) |
US GAAP (unaudited) | |
| ASSETS | (US dollars in thousands) | ||||
| Non-current assets | |||||
| Property, plant and equipment | $ -- | $ -- | $ -- | $ -- | $ 2,347 |
| Intangible assets | -- | 496 | -- | 42 | 11,307 |
| Investments in associates | (470) | -- | -- | (781) | 1,105 |
| Goodwill | -- | (2,275) | -- | (749) | 1,210 |
| Other assets | -- | -- | (467) | -- | 446 |
| (470) | (1,779) | (467) | (1,488) | 16,415 | |
| Current assets | |||||
| Receivables and prepayments | (80) | -- | -- | (339) | 16,755 |
| Available for sale investments | -- | -- | -- | (39) | -- |
| Cash and cash equivalents | (341) | -- | -- | -- | 16,616 |
| (421) | -- | -- | (378) | 33,371 | |
| Total assets | $ (891) | $ (1,779) | $ (467) | $ (1,866) | $ 49,786 |
| SHAREHOLDERS' EQUITY | |||||
| Share capital | $ -- | $ -- | $ -- | $ (15) | $ 2,948 |
| Share premium account | -- | -- | -- | (29,391) | -- |
| Share-based payment reserve | -- | -- | -- | (1,258) | -- |
| Merger reserve | -- | -- | -- | (1,268) | -- |
| Currency translation reserve | -- | -- | -- | (900) | 3,186 |
| Additional paid in capital (US GAAP only) | -- | -- | -- | 31,641 | 31,641 |
| Retained earnings (deficit) | -- | (78) | (212) | 1,090 | (4,014) |
| Total shareholders' equity | -- | (78) | (212) | (101) | 33,761 |
| Minority Interest | -- | -- | -- | 70 | 374 |
| Total equity | -- | (78) | (212) | (31) | 34,135 |
|
Consolidated Balance Sheet (Continued) As of December 31, 2007 |
||||||
|
IFRS as Reported |
IFRS as Reported |
Accounting for Government Grants (unaudited) |
Revenue & Cost of Revenue (unaudited) |
Share-based Payment (unaudited) |
IFRS Restated (unaudited) |
|
| (Euro in thousands) | (US dollars in thousands) | |||||
| LIABILITIES | ||||||
| Non-current liabilities | ||||||
| Long-term borrowings | 195 | 284 | -- | -- | -- | 284 |
| Retirement benefit obligations | 143 | 208 | -- | -- | -- | 208 |
| Deferred income-government grants | -- | -- | 4,804 | -- | -- | 4,804 |
| Other non-current liabilities | 1,702 | 2,490 | (569) | (981) | (107) | 833 |
| 2,040 | 2,982 | 4,235 | (981) | (107) | 6,129 | |
| Current liabilities | ||||||
| Accounts payable and other accrued liabilities | 8,034 | 11,347 | (431) | 422 | -- | 11,338 |
| Deferred income – government grants | -- | -- | 497 | -- | -- | 497 |
| Current income tax liabilities | 102 | 149 | -- | -- | -- | 149 |
| Borrowings | 1,519 | 2,220 | -- | -- | -- | 2,220 |
| 9,655 | 13,716 | 66 | 422 | -- | 14,204 | |
| Total liabilities | 11,695 | 16,698 | 4,301 | (559) | (107) | 20,333 |
| Total equity and liabilities | € 41,817 | $ 60,701 | $ -- | $ (5,912) | $ -- | $ 54,789 |
|
Consolidation Method (unaudited) |
Purchase Accounting (unaudited) |
Tax Positions Related (unaudited) |
Other Adjustments & Presentation (unaudited) |
US GAAP (unaudited) | |
| (US dollars in thousands) | |||||
| LIABILITIES | |||||
| Non-current liabilities | |||||
| Long-term borrowings | -- | -- | -- | 1 | 285 |
| Retirement benefit obligations | -- | -- | -- | -- | 208 |
| Deferred income-government grants | -- | -- | -- | -- | 4,804 |
| Other non-current liabilities | -- | -- | (555) | (11) | 267 |
| -- | -- | (555) | (10) | 5,564 | |
| Current liabilities | |||||
| Accounts payable and other accrued liabilities | (891) | (1,701) | 449 | (1,825) | 7,370 |
| Deferred income – government grants | -- | -- | -- | -- | 497 |
| Current income tax liabilities | -- | -- | (149) | -- | -- |
| Borrowings | -- | -- | -- | -- | 2,220 |
| (891) | (1,701) | 300 | (1,825) | 10,087 | |
| Total liabilities | (891) | (1,701) | (255) | (1,835) | 15,651 |
| Total equity and liabilities | $ (891) | $ (1,779) | $ (467) | $ (1,866) | $ 49,786 |
|
Consolidated Income Statement For the twelve months ended December 31, 2008 |
||||||||
|
IFRS as Reported |
IFRS as Reported |
Accounting for Government Grants (unaudited) |
Revenue & Cost of Revenue(unaudited) |
Share-based Payment (unaudited) |
IFRS Restated (unaudited) |
|||
| (Euro in thousands) | (US dollars in thousands) | |||||||
| Revenue | € 52,450 | $ 77,881 | $ (2,937) | $ (6,523) | $ -- | $ 68,421 | ||
| Cost of revenue | (30,466) | (45,459) | 961 | (1,037) | -- | (45,535) | ||
| Gross profit | 21,984 | 32,422 | (1,976) | (7,560) | -- | 22,886 | ||
| Other operating income | 133 | 196 | -- | -- | -- | 196 | ||
| Selling expenses | (7,812) | (11,504) | 364 | -- | -- | (11,140) | ||
| Administrative expenses | (6,824) | (10,073) | 121 | -- | (60) | (10,012) | ||
| Operating profit (loss) | 7,481 | 11,041 | (1,491) | (7,560) | (60) | 1,930 | ||
| Net foreign exchange loss | (1,130) | (1,675) | -- | -- | -- | (1,675) | ||
| Finance costs | (884) | (1,304) | -- | -- | -- | (1,304) | ||
| Finance income | 101 | 148 | -- | -- | -- | 148 | ||
| Other Expenses | -- | -- | -- | -- | -- | -- | ||
| Share of loss of associates | (61) | (88) | -- | -- | -- | (88) | ||
| Profit (loss) before tax | 5,507 | 8,122 | (1,491) | (7,560) | (60) | (989) | ||
| Taxation | (1,278) | (1,900) | 421 | 2,135 | 17 | 673 | ||
| Profit (loss) after tax | 4,229 | 6,222 | (1,070) | (5,425) | (43) | (316) | ||
| Attributable to: | ||||||||
| Equity shareholders of the parent | 4,263 | 6,273 | (1,070) | (5,458) | (43) | (298) | ||
| Minority interest | (34) | (51) | -- | 33 | -- | (18) | ||
| Profit (loss) after minority interest | € 4,229 | $ 6,222 | $ (1,070) | $ (5,425) | $ (43) | $ (316) | ||
|
Consolidation Method (unaudited) |
Purchase Accounting (unaudited) | Tax Positions Related (unaudited) | Revenue deferral (unaudited) |
Other Adjustments & Presentation (unaudited) |
US GAAP (unaudited) | |
| (US dollars in thousands) | ||||||
| Revenue | $ (1,766) | $ -- | $ -- | $ (4,622) | $ (1) | $ 62,032 |
| Cost of revenue | 2,037 | -- | -- | -- | (129) | (43,627) |
| Gross profit | 271 | -- | -- | (4,622) | (130) | 18,405 |
| Other operating income | -- | -- | -- | -- | (196) | -- |
| Selling expenses | 454 | -- | -- | -- | (82) | (10,768) |
| Administrative expenses | 1,640 | (125) | -- | 352 | (8,145) | |
| Operating profit (loss) | 2,365 | (125) | -- | (4,622) | (56) | (508) |
| Net foreign exchange loss | -- | -- | -- | -- | 10 | (1,665) |
| Finance costs | -- | -- | -- | -- | -- | (1,304) |
| Finance income | -- | -- | -- | -- | 1 | 149 |
| Other Expenses | -- | -- | -- | -- | (495) | (495) |
| Share of loss of associates | (2,182) | -- | -- | -- | (186) | (2,456) |
| Profit (loss) before tax | 183 | (125) | -- | (4,622) | (726) | (6,279) |
| Taxation | (183) | -- | (926) | 462 | -- | 26 |
| Profit (loss) after tax | -- | (125) | (926) | (4,160) | (726) | (6,253) |
| Attributable to: | ||||||
| Equity shareholders of the parent | -- | (125) | (926) | (4,160) | (621) | (6,130) |
| Minority interest | -- | -- | -- | -- | (105) | (123) |
| Profit (loss) after minority interest | $ -- | $ (125) | $ (926) | $ (4,160) | $ (726) | $ (6,253) |
|
Consolidated Balance Sheet As of December 31, 2008 |
||||||
|
IFRS as Reported |
IFRS as Reported |
Accounting for Government Grants (unaudited) |
Revenue & Cost of Revenue (unaudited) |
Share-based Payment (unaudited) |
IFRS Restated (unaudited) |
|
| ASSETS | (Euro in thousands) | (US dollars in thousands) | ||||
| Non-current assets | ||||||
| Property, plant and equipment | € 2,439 | $ 3,396 | $ -- | $ -- | $ -- | $ 3,396 |
| Intangible assets | 15,316 | 21,351 | -- | -- | -- | 21,351 |
| Investments in associates | 3,734 | 5,197 | -- | -- | -- | 5,197 |
| Goodwill | 2,704 | 3,764 | -- | -- | -- | 3,764 |
| Other assets | 1,080 | 1,514 | -- | -- | -- | 1,514 |
| 25,273 | 35,222 | -- | -- | -- | 35,222 | |
| Current assets | ||||||
| Receivables and prepayments | 31,145 | 43,613 | -- | (12,435) | -- | 31,178 |
| Cash and cash equivalents | 10,287 | 14,364 | -- | -- | -- | 14,364 |
| 41,432 | 57,977 | -- | (12,435) | -- | 45,542 | |
| Total assets | € 66,705 | $ 93,199 | $ -- | $ (12,435) | $ -- | $ 80,764 |
| SHAREHOLDERS' EQUITY | ||||||
| Share capital | 2,449 | $3,048 | $ -- | $ -- | $-- | $ 3,048 |
| Share premium account | 22,285 | 30,139 | -- | -- | -- | 30,139 |
| Share-based payment reserve | 1,564 | 2,193 | -- | -- | 748 | 2,941 |
| Merger reserve | 1,071 | 1,268 | -- | -- | -- | 1,268 |
| Currency translation reserve | 737 | 3,015 | -- | -- | -- | 3,015 |
| Additional paid in capital (US GAAP only) | -- | -- | -- | -- | -- | -- |
| Retained earnings (deficit) | 8,665 | 11,599 | (5,371) | (10,716) | (624) | (5,112) |
| Total shareholders' equity | 36,771 | 51,262 | (5,371) | (10,716) | 124 | 35,299 |
| Minority Interest | 292 | 348 | -- | (62) | -- | 286 |
| Total equity | 37,063 | 51,610 | (5,371) | (10,778) | 124 | 35,585 |
| Consolidation Method (unaudited) | Purchase Accounting (unaudited) | Tax Positions Related (unaudited) | Revenue deferral (unaudited) |
Other Adjustments & Presentation (unaudited) |
US GAAP (unaudited) | |
| ASSETS | (US dollars in thousands) | |||||
| Non-current assets | ||||||
| Property, plant and equipment | $ (7) | $ -- | $ -- | $ -- | $ 1 | $ 3,390 |
| Intangible assets | -- | 371 | -- | -- | 14 | 21,736 |
| Investments in associates | (2,826) | -- | -- | -- | 1,269 | 3,640 |
| Goodwill | -- | (1,394) | -- | -- | 62 | 2,432 |
| Other assets | (289) | -- | (1.024) | 281 | -- | 482 |
| (3,122) | (1,023) | (1,024) | 281 | 1,346 | 31,680 | |
| Current assets | ||||||
| Receivables and prepayments | (873) | -- | -- | (4,622) | 790 | 26,473 |
| Cash and cash equivalents | (43) | -- | -- | -- | -- | 14,321 |
| (916) | -- | -- | (4,622) | 790 | 40,794 | |
| Total assets | $ (4,038) | $ (1,023) | $ (1,024) | $ (4,341) | $ 2,136 | $ 72,474 |
| SHAREHOLDERS' EQUITY | ||||||
| Share capital | $ -- | $-- | $-- | $-- | $ (5) | $3,043 |
| Share premium account | -- | -- | -- | -- | (30,139) | -- |
| Share-based payment reserve | -- | -- | -- | -- | (2,941) | -- |
| Merger reserve | -- | -- | -- | -- | (1,268) | -- |
| Currency translation reserve | (45) | -- | -- | -- | (223) | 2,747 |
| Additional paid in capital (US GAAP only) | -- | -- | -- | -- | 34,194 | 34,194 |
| Retained earnings (deficit) | 45 | (203) | (1,138) | (4,160) | 424 | (10,144) |
| Total shareholders' equity | -- | (203) | (1,138) | (4,160) | 42 | 29,840 |
| Minority Interest | -- | -- | -- | -- | 53 | 339 |
| Total equity | -- | (203) | (1,138) | (4,160) | 95 | 30,179 |
|
Consolidated Balance Sheet (continued) As of December 31, 2008 |
||||||
|
IFRS as Reported |
IFRS as Reported |
Accounting for Government Grants (unaudited) |
Revenue & Cost of Revenue(unaudited) |
Share-based Payment (unaudited) |
IFRS Restated (unaudited) |
|
| (Euro in thousands) | (US dollars in thousands) | |||||
| LIABILITIES | ||||||
| Non-current liabilities | ||||||
| Long-term borrowings | 2,550 | 3,550 | -- | -- | -- | 3,550 |
| Retirement benefit obligations | 188 | 261 | -- | -- | -- | 261 |
| Deferred income-government grants | -- | -- | 4,095 | -- | -- | 4,095 |
| Other Non-current liabilities | 2,650 | 3,689 | (421) | (2,135) | (17) | 1,116 |
| 5,388 | 7,500 | 3,674 | (2,135) | (17) | 9,022 | |
| Current liabilities | ||||||
| Accounts payable and other accrued liabilities | 14,302 | 20,031 | (669) | 478 | (107) | 19,733 |
| Deferred income – government grants | -- | -- | 2,366 | -- | -- | 2,366 |
| Current income tax liabilities | 134 | 188 | -- | -- | -- | 188 |
| Borrowings | 9,818 | 13,870 | -- | -- | -- | 13,870 |
| 24,254 | 34,089 | 1,697 | 478 | (107) | 36,157 | |
| Total liabilities | 29,642 | 41,589 | 5,371 | (1,657) | (124) | 45,179 |
| Total equity and liabilities | € 66,705 | $ 93,199 | $ -- | $ (12,435) | $ -- | $ 80,764 |
|
Consolidation Method (unaudited) |
Purchase Accounting (unaudited) | Tax Positions Related (unaudited) | Revenue deferral (unaudited) |
Other Adjustments & Presentation (unaudited) |
US GAAP (unaudited) | |
| (US dollars in thousands) | ||||||
| LIABILITIES | ||||||
| Non-current liabilities | ||||||
| Long-term borrowings | -- | -- | -- | -- | -- | 3,550 |
| Retirement benefit obligations | -- | -- | -- | -- | -- | 261 |
| Deferred income-government grants | -- | -- | -- | -- | -- | 4,095 |
| Other Non-current liabilities | 378 | -- | (843) | (181) | -- | 470 |
| 378 | -- | (843) | (181) | -- | 8,376 | |
| Current liabilities | ||||||
| Accounts payable and other accrued liabilities | (4,515) | (820) | 1,244 | -- | 2,041 | 17,683 |
| Deferred income – government grants | -- | -- | -- | -- | -- | 2,366 |
| Current income tax liabilities | 99 | -- | (287) | -- | -- | -- |
| Borrowings | -- | -- | -- | -- | -- | 13,870 |
| (4,416) | (820) | 957 | -- | 2,041 | 33,919 | |
| Total liabilities | (4,038) | (820) | 114 | (181) | 2,041 | 42,295 |
| Total equity and liabilities | $ (4,038) | $ (1,023) | $ (1,024) | $ (4,341) | $ 2,136 | $ 72,474 |
|
Consolidated Income Statement For the six months ended June 30, 2009 |
||||||
|
IFRS as Reported (unaudited) |
IFRS as Reported (unaudited) |
Accounting for Government Grants (unaudited) |
Revenue & Cost of Revenue (unaudited) |
IFRS Restated (unaudited) |
Consolidation Method (unaudited) |
|
| (Euro in thousands) | (US dollars in thousands) | |||||
| Revenue | € 21,651 | $ 28,883 | $ 174 | $ 4,720 | $ 33,777 | $ (1,217) |
| Cost of revenue | (9,898) | (13,213) | 640 | 1,350 | (11,223) | 763 |
| Gross profit | 11,753 | 15,670 | 814 | 6,070 | 22,554 | (454) |
| Other operating income | -- | -- | -- | -- | -- | -- |
| Selling expenses | (4,652) | (6,207) | 239 | -- | (5,968) | 437 |
| Administrative expenses | (3,530) | (4,714) | 80 | -- | (4,634) | 634 |
| Operating profit | 3,571 | 4,749 | 1,133 | 6,070 | 11,952 | 617 |
| Net foreign exchange loss | (28) | (34) | -- | -- | (34) | -- |
| Finance costs | (591) | (788) | -- | -- | (788) | -- |
| Finance income | 32 | 43 | -- | -- | 43 | -- |
| Share of loss of associates | (268) | (357) | -- | -- | (357) | (429) |
| Profit before tax | 2,716 | 3,613 | 1,133 | 6,070 | 10,816 | 188 |
| Taxation | (475) | (637) | (283) | (1,518) | (2,438) | (188) |
| Profit after tax | 2,241 | 2,976 | 850 | 4,552 | 8,378 | -- |
| Attributed to: | ||||||
| Equity shareholders of the parent | 2,226 | 2,997 | 850 | 4,552 | 8,399 | -- |
| Minority interest | 15 | (21) | -- | -- | (21) | -- |
| Net profit after minorities | € 2,241 | $ 2,976 | $ 850 | $ 4,552 | $ 8,378 | $ -- |
| Purchase Accounting (unaudited) |
Provision for Doubtful Accounts (unaudited) |
Tax Positions Related (unaudited) |
Other Adjustments & Presentation (unaudited) |
US GAAP (unaudited) |
|
| (US dollars in thousands) | |||||
| Revenue | $ -- | $ -- | $ -- | $ (87) | $ 32,473 |
| Cost of revenue | -- | -- | -- | 174 | (10,286) |
| Gross profit | -- | -- | -- | 87 | 22,187 |
| Other operating income | -- | -- | -- | -- | -- |
| Selling expenses | -- | -- | -- | (468) | (5,999) |
| Administrative expenses | (57) | (667) | -- | 609 | (4,115) |
| Operating profit | (57) | (667) | -- | 228 | 12,073 |
| Net foreign exchange loss | -- | -- | -- | (1) | (35) |
| Finance costs | -- | -- | -- | -- | (788) |
| Finance income | -- | -- | -- | -- | 43 |
| Share of loss of associates | -- | -- | -- | (273) | (1,059) |
| Profit before tax | (57) | (667) | -- | (46) | 10,234 |
| Taxation | -- | 167 | 1,995 | (167) | (631) |
| Profit after tax | (57) | (500) | 1,995 | (213) | 9,603 |
| Attributed to: | |||||
| Equity shareholders of the parent | (57) | (500) | 1,995 | (214) | 9,623 |
| Minority interest | -- | -- | -- | 1 | (20) |
| Net profit after minorities | $ (57) | $ (500) | $ 1,995 | $ (213) | $ 9,603 |
|
Consolidated Balance Sheet As of June 30, 2009 |
|||||
|
IFRS as Reported |
IFRS as Reported |
Accounting for Government Grants (unaudited) |
Revenue & Cost of Revenue (unaudited) |
Share-based Payment (unaudited) |
|
| ASSETS | (Euro in thousands) | (US dollars in thousands) | |||
| Non-current assets | |||||
| Property, plant and equipment | € 2,597 | $ 3,641 | $ -- | $ -- | $ -- |
| Intangible assets | 17,164 | 24,064 | -- | -- | -- |
| Investments in associates | 3,588 | 5,030 | -- | -- | -- |
| Goodwill | 6,585 | 9,233 | -- | -- | -- |
| Other assets | 1,242 | 1,744 | -- | -- | -- |
| 31,176 | 43,712 | -- | -- | -- | |
| Current assets | |||||
| Receivables and prepayments | 41,188 | 57,810 | -- | (7,715) | -- |
| Cash and cash equivalents | 11,451 | 16,057 | -- | -- | -- |
| 52,639 | 73,867 | -- | (7,715) | -- | |
| Total assets | € 83,815 | $ 117,579 | $ -- | $ (7,715) | $-- |
| SHAREHOLDERS' EQUITY | |||||
| Share capital | € 2,477 | $ 3,478 | $ -- | $ -- | $ -- |
| Share premium account | 24,708 | 34,640 | -- | -- | -- |
| Share-based payment reserve | 1,984 | 2,753 | -- | -- | 748 |
| Merger reserve | 1,071 | 1,502 | -- | -- | -- |
| Currency translation reserve | 726 | 389 | -- | -- | -- |
| Additional paid in capital (US GAAP only) | -- | -- | -- | -- | -- |
| Retained earnings (deficit) | 10,906 | 15,723 | (4,521) | (6,164) | (624) |
| Total shareholders' equity | 41,872 | 58,485 | (4,521) | (6,164) | 124 |
| Minority Interest | 277 | 388 | -- | (62) | -- |
| Total equity | 42,149 | 58,873 | (4,521) | (6,226) | 124 |
|
IFRS Restated (unaudited) |
Consolidation Method (unaudited) |
Purchase accounting (unaudited) |
Provision for doubtful accounts (unaudited) |
Tax Positions Related (unaudited) |
|
| ASSETS | (US dollars in thousands) | ||||
| Non-current assets | |||||
| Property, plant and equipment | $ 3,641 | $ (11) | $ -- | $ -- | $ -- |
| Intangible assets | 24,064 | -- | 314 | -- | -- |
| Investments in associates | 5,030 | (2,917) | -- | -- | -- |
| Goodwill | 9,233 | -- | (272) | -- | -- |
| Other assets | 1,744 | (1,125) | -- | -- | (160) |
| 43,712 | (4,053) | 42 | -- | (160) | |
| Current assets | |||||
| Receivables and prepayments | 50,095 | (159) | -- | (667) | -- |
| Cash and cash equivalents | 16,057 | (259) | -- | -- | -- |
| 66,152 | (418) | -- | (667) | -- | |
| Total assets | $ 109,864 | $ (4,471) | $ 42 | $ (667) | $ (160) |
| SHAREHOLDERS' EQUITY | |||||
| Share capital | $ 3,478 | $ -- | $ -- | $ -- | $ -- |
| Share premium account | 34,640 | -- | -- | -- | -- |
| Share-based payment reserve | 3,501 | -- | -- | -- | -- |
| Merger reserve | 1,502 | -- | -- | -- | -- |
| Currency translation reserve | 389 | (112) | -- | -- | -- |
| Additional paid in capital (US GAAP only) | -- | -- | -- | -- | -- |
| Retained earnings (deficit) | 4,414 | 112 | (260) | (500) | 857 |
| Total shareholders' equity | 47,924 | -- | (260) | (500) | 857 |
| Minority Interest | 326 | -- | -- | -- | -- |
| Total equity | 48,250 | -- | (260) | (500) | 857 |
|
Consolidated Balance Sheet (continued) As of June 30, 2009 |
|||||
|
IFRS as Reported |
IFRS as Reported |
Accounting for Government Grants (unaudited) |
Revenue & Cost of Revenue (unaudited) |
Share-based Payment (unaudited) |
|
| (Euro in thousands) | (US dollars in thousands) | ||||
| LIABILITIES | |||||
| Non-current liabilities | |||||
| Long-term borrowings | 7,641 | 10,713 | -- | -- | -- |
| Retirement benefit obligations | 215 | 301 | -- | -- | -- |
| Deferred income-government grants | -- | -- | 3,118 | -- | -- |
| Other Non-current liabilities | 3,060 | 4,290 | 283 | 1,518 | -- |
| 10,916 | 15,304 | 3,401 | 1,518 | -- | |
| Current liabilities | |||||
| Accounts payable and other accrued liabilities | 20,832 | 29,319 | (1,079) | (3,007) | (124) |
| Deferred income – government grants | -- | -- | 2,199 | -- | -- |
| Current income tax liabilities | 158 | 225 | -- | -- | -- |
| Borrowings | 9,760 | 13,858 | -- | -- | -- |
| 30,750 | 43,402 | 1,120 | (3,007) | (124) | |
| Total liabilities | 41,666 | 58,706 | 4,521 | (1,489) | (124) |
| Total equity and liabilities | € 83,815 | $ 117,579 | $ -- | $ (7,715) | $ -- |
|
IFRS Restated (unaudited) |
Consolidation Method (unaudited) |
Purchase accounting (unaudited) |
Provision for doubtful accounts (unaudited) |
Tax Positions Related (unaudited) |
|
| (US dollars in thousands) | |||||
| LIABILITIES | |||||
| Non-current liabilities | |||||
| Long-term borrowings | 10,713 | -- | -- | -- | -- |
| Retirement benefit obligations | 301 | -- | -- | -- | -- |
| Deferred income-government grants | 3,118 | -- | -- | -- | -- |
| Other Non-current liabilities | 6,091 | 951 | -- | (167) | (5,749) |
| 20,223 | 951 | -- | (167) | (5,749) | |
| Current liabilities | |||||
| Accounts payable and other accrued liabilities | 25,109 | (5,539) | 302 | -- | 5,070 |
| Deferred income – government grants | 2,199 | -- | -- | -- | -- |
| Current income tax liabilities | 225 | 117 | -- | -- | (338) |
| Borrowings | 13,858 | -- | -- | -- | -- |
| 41,391 | (5,422) | 302 | -- | 4,732 | |
| Total liabilities | 61,614 | (4,471) | 302 | (167) | (1,017) |
| Total equity and liabilities | $ 109,864 | $ (4,471) | $ 42 | $ (667) | $ (160) |
|
Consolidated Balance Sheet (continued) As of June 30, 2009 |
|||
|
Revenue Deferral (unaudited) |
Other Adjustments & Presentation (unaudited) |
US GAAP (unaudited) |
|
| ASSETS | |||
| Non-current assets | |||
| Property, plant and equipment | $ -- | $ -- | $ 3,630 |
| Intangible assets | -- | 4,221 | 28,599 |
| Investments in associates | -- | 1,852 | 3,965 |
| Goodwill | -- | (5,171) | 3,790 |
| Other assets | -- | -- | 459 |
| -- | 902 | 40,443 | |
| Current assets | |||
| Receivables and prepayments | (4,622) | 489 | 45,136 |
| Cash and cash equivalents | -- | 1 | 15,799 |
| (4,622) | 490 | 60,935 | |
| Total assets | $ (4,622) | $1,392 | $101,378 |
| SHAREHOLDERS' EQUITY | |||
| Share capital | $ -- | $(394) | $ 3,084 |
| Share premium account | -- | (34,640) | -- |
| Share-based payment reserve | -- | (3,501) | -- |
| Merger reserve | -- | (1,502) | -- |
| Currency translation reserve | -- | 3,094 | 3,371 |
| Additional paid in capital (US GAAP only) | -- | 38,085 | 38,085 |
| Retained earnings (deficit) | (4,160) | (983) | (520) |
| Total shareholders' equity | (4,160) | 159 | 44,020 |
| Minority Interest | -- | (8) | 318 |
| Total equity | (4,160) | 151 | 44,338 |
|
Consolidated Balance Sheet (continued) As of June 30, 2009 |
|||
|
Revenue Deferral (unaudited) |
Other Adjustments & Presentation (unaudited) |
US GAAP (unaudited) |
|
| LIABILITIES | |||
| Non-current liabilities | |||
| Long-term borrowings | -- | (72) | 10,641 |
| Retirement benefit obligations | -- | -- | 301 |
| Deferred income-government grants | -- | -- | 3,118 |
| Other Non-current liabilities | -- | 170 | 1,296 |
| -- | 98 | 15,356 | |
| Current liabilities | |||
| Accounts payable and other accrued liabilities | (462) | 1,052 | 25,532 |
| Deferred income – government grants | -- | -- | 2,199 |
| Current income tax liabilities | -- | (4) | -- |
| Borrowings | -- | 95 | 13,953 |
| (462) | 1,143 | 41,684 | |
| Total liabilities | (462) | 1,241 | 57,040 |
| Total equity and liabilities | $ (4,622) | $ 1,392 | $ 101,378 |
|
Consolidated Income Statement For the twelve months ended December 31, 2009 |
||||||
|
IFRS (unaudited) |
Consolidation Method (unaudited) |
Purchase Accounting (unaudited) |
Tax Positions Related (unaudited) |
Recognition of Deferred Revenue (unaudited) |
US GAAP (unaudited) | |
| (US dollars in thousands) | ||||||
| Revenue | $ 87,411 | $ (1,819) | $ -- | $ -- | $ 4,373 | $ 89,965 |
| Cost of revenue | (37,968) | 1,918 | -- | -- | -- | (36,050) |
| Gross profit | 49,443 | 99 | -- | -- | 4,373 | 53,915 |
| Other operating income | -- | -- | -- | -- | -- | -- |
| Selling expenses | (15,467) | 959 | -- | -- | -- | (14,508) |
| Administrative expenses | (27,692) | 323 | (118) | (667) | (28,154) | |
| Operating profit | 6,284 | 1,381 | (118) | -- | 3,706 | 11,253 |
| Net foreign exchange income | 11 | 3 | -- | -- | -- | 14 |
| Finance costs | (2,420) | -- | -- | -- | -- | (2,420) |
| Finance income | 50 | -- | -- | -- | -- | 50 |
| Share of loss of associates | (898) | (1,325) | -- | -- | -- | (2,223) |
| Profit before tax | 3,027 | 59 | (118) | -- | 3,706 | 6,674 |
| Taxation | (257) | (59) | -- | 343 | (437) | (410) |
| Profit after tax | 2,770 | -- | (118) | 343 | 3,269 | 6,264 |
| Attributed to: | ||||||
| Equity shareholders of the parent | 2,961 | -- | (118) | 343 | 3,269 | 6,455 |
| Minority interest | (191) | -- | -- | -- | -- | (191) |
| Profit after minority interest | $ 2,770 | $ -- | $ (118) | $ 343 | $ 3,269 | $ 6,264 |
|
Consolidated Balance Sheet As of December 31, 2009 |
|||||||
|
IFRS (unaudited) |
Consolidation Method (unaudited) |
Purchase accounting (unaudited) |
Tax Positions Related (unaudited) |
Recognition of Deferred Revenue (unaudited) |
US GAAP (unaudited) | ||
| ASSETS | (US dollars in thousands) | ||||||
| Non-current assets | |||||||
| Property, plant and equipment | $ 3,351 | $ (9) | $ -- | $ -- | $ -- | $ 3,342 | |
| Intangible assets | 34,159 | -- | 253 | -- | -- | 34,412 | |
| Investments in associates | 6,445 | (3,191) | -- | -- | -- | 3,254 | |
| Goodwill | 4,121 | -- | (247) | -- | -- | 3,874 | |
| Other assets | 1,202 | -- | -- | -- | -- | 1,202 | |
| Deferred tax assets | 1,428 | (962) | -- | -- | -- | 466 | |
| 50,706 | (4,162) | 6 | -- | -- | 46,550 | ||
| Current assets | |||||||
| Receivables and prepayments | 52,404 | (257) | -- | -- | 3,706 | 55,853 | |
| Cash and cash equivalents | 19,759 | (104) | -- | -- | -- | 19,655 | |
| 72,163 | (361) | -- | -- | 3,706 | 75,508 | ||
| Total assets | $ 122,869 | $ (4,523) | $ 6 | $ -- | $ 3,706 | $ 122,058 | |
| SHAREHOLDERS' EQUITY | |||||||
| Share capital | $ 3,339 | $-- | $-- | $ -- | $ -- | 3,339 | |
| Share premium account | -- | -- | -- | -- | -- | -- | |
| Share-based payment reserve | -- | -- | -- | -- | -- | -- | |
| Merger reserve | -- | -- | -- | -- | -- | -- | |
| Currency translation reserve | 4,422 | (107) | -- | -- | -- | 4,315 | |
| Additional paid in capital (US GAAP only) | 42,885 | -- | -- | -- | -- | 42,885 | |
| Retained earnings/(deficit) | (7,087) | 107 | (321) | 343 | 3,269 | (3,689) | |
| Total shareholders' equity | 43,559 | -- | (321) | 343 | 3,269 | 46,850 | |
| Minority Interest | 86 | -- | -- | -- | -- | 86 | |
| Total equity | 43,645 | -- | (321) | 343 | 3,269 | 46,936 | |
| LIABILITIES | |||||||
| Non-current liabilities | |||||||
| Long-term borrowings | 17,661 | -- | -- | -- | -- | 17,661 | |
| Retirement benefit obligations | 2,651 | -- | -- | -- | -- | 2,651 | |
| Deferred income-government grants | 346 | -- | -- | -- | -- | 346 | |
| Other non-current liabilities | (122) | 1,831 | -- | (343) | 437 | 1,803 | |
| 20,536 | 1,831 | -- | (343) | 437 | 22,461 | ||
| Current liabilities | |||||||
| Accounts payable and other accrued liabilities | 35,923 | (6,354) | 327 | -- | -- | 29,896 | |
| Deferred income – government grants | 1,565 | -- | -- | -- | -- | 1,565 | |
| Current income tax liabilities | -- | -- | -- | -- | -- | -- | |
| Borrowings | 21,200 | -- | -- | -- | -- | 21,200 | |
| 58,688 | (6,354) | 327 | -- | -- | 52,661 | ||
| Total liabilities | 79,224 | (4,523) | 327 | (343) | 437 | 75,122 | |
| Total equity and liabilities | $ 122,869 | $ (4,523) | $ 6 | $ -- | $ 3,706 | $ 122,058 | |
About Velti
Velti is a leading global provider of mobile marketing and advertising solutions that enable brands, advertising agencies, mobile operators and media to implement highly targeted, interactive and measurable campaigns by communicating with and engaging consumers via their mobile devices. Our technology platform, called Velti mGage, allows customers to use mobile and traditional media to reach targeted consumers, engage the consumer through the mobile internet and applications, convert them into customers and continue to actively manage the relationship through the mobile channel. More than 450 leading brands, advertising agencies, mobile operators and media companies have used our platform to execute more than 2,000 mobile marketing and advertising campaigns globally in 2009, reaching consumers in more than 35 countries. Velti is a publicly-held corporation based in Jersey which trades on the London Stock Exchange's AIM under the symbol VEL. For more information, visit www.velti.com.
The Velti logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=7438