UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of March 2011
Commission File Number: 001-34168
PANSOFT COMPANY LIMITED
(Translation of registrant's name into English)
3/F Qilu Software Park Building
Jinan Hi-Tech Zone
Jinan, Shandong,
People's Republic of China 250101
86-531-88871166
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports
under cover of Form 20-F or Form 40-F.
Form 20-F [X] Form 40-F [ ]
Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(1): ___________
Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a
Form 6-K if submitted solely to provide an attached annual report to security
holders.
Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(7): ___________
Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a
Form 6-K if submitted to furnish a report or other document that the registrant
foreign private issuer must furnish and make public under the laws of the
jurisdiction in which the registrant is incorporated, domiciled or legally
organized (the registrant's "home country"), or under the rules of the home
country exchange on which the registrant's securities are traded, as long as the
report or other document is not a press release, is not required to be and has
not been distributed to the registrant's security holders, and, if discussing a
material event, has already been the subject of a Form 6-K submission or other
Commission filing on EDGAR.
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes [ ] No [X]
If "Yes" is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b): 82- ___________.
EXHIBIT INDEX
Number Description of Exhibit
______ ________________________________________________________________________
99.1 Press release, dated March 24, 2011, titled "PANSOFT ANNOUNCES UNAUDITED
FISCAL SECOND-QUARTER 2011 FINANCIAL RESULTS"
--------------------------------------------------------------------------------
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
PANSOFT COMPANY LIMITED
Date: March 24, 2011 By: /s/ Allen Zhang
_______________________________
Allen Zhang
Chief Financial Officer
EX 99.1
PANSOFT ANNOUNCES UNAUDITED FISCAL SECOND-QUARTER 2011 FINANCIAL RESULTS
REVENUES INCREASE 47.0% YEAR-OVER-YEAR
JINAN, CHINA, Mar 24, 2011 -- Pansoft Company Limited (NASDAQ: PSOF) ("Pansoft"
or the "Company"), a leading ERP software service provider for the oil and gas
industry in China, today announced unaudited financial results for the fiscal
second quarter ended December 31, 2010.
Highlights for the Fiscal Second Quarter of 2011:
-- Revenues were $7.2 million, an increase of 47.0% compared to $4.9 million
for the three months ended December 31, 2010
-- Gross profit was $3.1 million, an increase of 19.1% compared to $2.6
million in the year-ago period
-- Gross margin was 42.9%, compared to 53.0% in the year-ago period
-- Operating profit was $1.6 million, compared to $2.1 million in the
year-ago period
-- Net income was $1.4 million, compared to $1.9 million in the year-ago
period
-- Diluted earnings per share were $0.25, compared to $0.36 in the prior year
period
Highlights for the Fiscal First Half of 2011:
-- Revenues were $10.7 million, an increase of 50.7% compared to $7.1 million
for the six months ended December 31, 2010
-- Gross profit was $4.8 million, an increase of 27.3% compared to $3.8
million in the year-ago period
-- Gross margin was 44.9%, compared to 53.1% in the year-ago period
-- Operating profit was $2.7 million, compared to $2.8 million in the
year-ago period
-- Net income was $2.4 million, compared to $2.6 million in the year-ago
period
-- Diluted earnings per share were $0.45, compared to $0.48 in the year-ago
period
Financial Results Highlights for the Three Months Ended December 31, 2010
Revenues for the three months ended December 31, 2010 were $7.2 million,
compared to $4.9 million in the same period last year, an increase of 47.0%. The
increase was due to the contribution from newly acquired businesses.
Cost of sales was $4.1 million, an increase of 78.5% from $2.3 million in the
three months ended December 31, 2009. Cost of sales increased at a faster pace
than revenues, largely due to: 1) higher headcount (approximately 600 employees
at the end of calendar 2010 versus 200 at the end of calendar 2009) and
therefore, higher compensation expense and; 2) start-up costs at Pansoft-Japan,
the new outsourcing joint venture in Japan.
Gross profit was $3.1 million, an increase of 19.1% from $2.6 million in the
three months ended December 31, 2009. Gross margin was 42.9%, compared to 53.0%
in the three months ended December 31, 2009. The drop in the gross margin was
mainly attributable to higher expenses, as stated above. Additionally, some
newly acquired businesses' gross margins are lower than those of Pansoft's core
business, in particular due to startup costs at Pansoft-Japan and lower-margin
hardware sales at HongAo and ITLamp.
Operating expenses were $1.5 million, an increase of 181.8% from $0.5 million in
the three months ended December 31, 2009. The increase in operating expense was
mainly due to: 1) higher general and administrative expense related to
maintaining three additional subsidiary offices and their management teams; and
2) the amortization of intangible assets from the HongAo and ITLamp
acquisitions.
Operating profit was $1.6 million, compared to $2.1 million in the three months
ended December 31, 2009. The operating margin was 22.7% compared to 42.5% in the
three months ended December 31, 2009.
Net income was $1.4 million, compared to $1.9 million in the corresponding
period in 2009, and was lower than the prior period mainly because of higher tax
expense, start-up losses of approximately $538,000 at Pansoft-Japan, and higher
amortization charges related to recent acquisitions.
Diluted earnings per share were $0.25, compared to $0.36 in the corresponding
period in 2009.
-1-
Financial Results Highlights for the Six Months Ended December 31, 2010
Revenues for the six months ended December 31, 2010 were $10.7 million, compared
to $7.1 million in the same period last year, an increase of 50.7%. The increase
was due to the contribution from newly acquired businesses.
Cost of sales was $5.9 million, an increase of 77.2% from $3.3 million in the
six months ended December 31, 2009. Cost of sales increased at a faster pace
than revenues, largely due to higher compensation expense resulting from higher
headcount and start-up costs at Pansoft-Japan.
Gross profit was $4.8 million, an increase of 27.3% from $3.8 million in the six
months ended December 31, 2009. Gross margin was 44.9%, compared to 53.1% in the
six months ended December 31, 2009. The decline in the gross margin was mainly
attributable to higher expenses, and lower margins at some subsidiaries.
Operating expenses were $2.1 million, an increase of 108.9% from $1.0 million in
the six months ended December 31, 2009. The increase in operating expense was
mainly due to higher general and administrative expense and amortization of
intangible assets resulting from acquisitions.
Operating profit was $2.7 million, compared to $2.8 million in the six months
ended December 31, 2009. The operating margin was 25.2% compared to 38.9% in the
six months ended December 31, 2009.
Net income was $2.4 million, compared to $2.6 million in the corresponding
period in 2009 and was lower than the prior period mainly because of higher tax
expense, start-up losses at Pansoft-Japan and higher amortization charges
related to recent acquisitions.
Diluted earnings per share were $0.45, compared to $0.48 in the corresponding
period in 2009.
Update on Pansoft's Subsidiaries
Following the formation of the Pansoft-Japan joint venture, the Company is
organized as follows. Pansoft-BVI has two subsidiaries: Pansoft-China (which
includes the HongAo and ITLamp acquisitions) and Pansoft-Japan.
-- Pansoft-China represents the core business of the Company and contributed
63% of total revenue in the three months ended December 31, 2010. For
three months ended December 31, 2010, Pansoft-China's revenues declined by
3%, compared to the same period in 2009, due to a slower pace of revenue
recognition, owing to a slower pace of revenue recognized in the
traditional peak season. This represents an improvement in Pansoft's
seasonality pattern, in which the majority of revenue is typically
realized in the fiscal second quarter of the year. HongAo, of which
Pansoft acquired a 55.01% stake in October 2010, serves the thermal power
industry as a technical service provider in Shandong province, and
contributed 24% of total revenue in the three months ended December 31,
2010. ITLamp, which was acquired in June 2010, operates as an oilfield
software development and service provider, mainly serving the Tarim
Oilfield in Xinjiang province. For the three-month period ended December
31, 2011, ITLamp contributed 9% of total revenues.
-- Pansoft-Japan is a joint venture established in August 2010 to provide
outsourcing functions for Japanese clients, initially in the field of
cell-phone software testing. The new testing operation was set up in
Jinan, China with a front office in Osaka, Japan. Osaka is more than 600
km from the nuclear power plant damaged by the recent earthquake and was
unaffected by this disaster. Our team members, including trainees
dispatched from China, are all safe and are conducting business as usual.
We do not foresee any immediate impact on our business in Japan from the
earthquake and nuclear-plant catastrophe, however the longer-term impact
cannot be presently determined. To date, there has also been no disruption
of the order flow from the venture's key customer, though the impact on
future orders cannot be determined. During the three-month period ended at
December 31, 2011, Pansoft-Japan incurred start-up losses in line with
budget expectations. This business is expected to break even in the fiscal
fourth quarter of 2011 and to begin to generate a profit starting in the
fiscal first quarter of 2012.
-2-
Financial Condition
As of December 31, 2010, Pansoft had $12.0 million in cash and equivalents,
compared to $2.7 million as of June 30, 2010, increased mainly by strong cash
flow from operations, as well as from the maturation of certain short-term
investments. Cash and cash equivalents exclude $3.5 million in short-term
investments, versus $7.4 million as of June 30, 2010. Total current assets were
$25.8 million, as of December 31, 2010, versus $18.8 million as of June 30,
2010, owing to higher cash and equivalents and higher receivables, offset by $3
million in lower unbilled revenues. Current liabilities were $6.9 million as of
December 31, 2010, up from $3.8 million, owing to a $1.5 million acquisition
payable for the fair value of the shares expected to be issued as part of the
ITLamp acquisition and a $0.75 million short-term bank loan for temporary cash
needs, in addition to higher deferred revenues. Total stockholders' equity was
$25.5 million as of December 31, 2010 versus $19.6 million as of June 30, 2010.
Recent Development
On March 1, 2011, Pansoft's Board of Directors extended the stock repurchase
program announced in October 2010 for an additional indefinite period.
Business Outlook
In future quarters and the next fiscal year, Pansoft expects to maintain
sustainable organic growth, driven by strong demand for its services and
solutions from its existing customer base, mainly PetroChina and Sinopec, which
accounted for 73% of revenues during fiscal 2010. To expand its business, the
Company will focus on more than 450 oil and gas subsidiaries, which are
large-scale businesses that operate oilfields, refineries, oil and gas pipelines
and retail gas stations. In last fiscal year, the Company generated revenue from
just four subsidiaries, with over RMB 1 million per contract size. Therefore,
the subsidiaries represent a large market opportunity for Pansoft to expand its
client base, leveraging its branding and experience in developing software
systems which are already operating at most of these subsidiaries. The Company
is also entering into the coal mining industry to expand its client base.
The Company also expects to supplement its organic growth through acquisitions
of targeted developer or service providers with rich experience operating in the
oil/gas and coal mining industries to help achieve the objectives.
Additionally, with its rich industrial experience, and technical platforms and
software packages accumulated in the past, Pansoft is developing a broader
portfolio of solutions and, initially, expanding its solutions into the
production arena. These solutions will be offered to existing and new customers,
especially in focused industries.
For the fiscal year ending June 30, 2011, Pansoft expects to remain on track
with steady growth and reaffirms its guidance of achieving 60% revenue growth,
which excludes the impact from any future mergers or acquisitions. However,
Pansoft expects its net income to grow at a slower pace, with a growth rate of
less than 20%, versus 20% growth expected previously. The relatively slower pace
of expected net-income growth is primarily due to the non-cash charge for
intangible asset amortization from acquisitions in 2010, which we expect to
reduce net income by approximately $1 million. "We expect Pansoft-Japan to break
even in the fiscal fourth quarter of 2011 and to begin to generate a profit
starting in the fiscal first quarter of 2012," said Hugh Wang, Pansoft's
Chairman of the Board.
"We continue to look for potential acquisition targets on an opportunistic basis
to accelerate our expansion throughout the rest of the fiscal year as a part of
our total strategy to expand our business and market diversification. Our aim is
to become the provider of choice for a variety of software solutions and
services to a broad range of industries and clients, both domestic and
international, in different technologies and markets. With more profit
contributions from diversified business avenues in the future, we are expecting
our total profits to increase at a faster pace while our net margins may not be
as high as in the past because of a change in the mix of business," continued
Mr. Wang.
-3-
Conference Call Information
The Company will host a conference call at 8:00 a.m. ET on Thursday, March 24,
2011 (8:00 p.m. Beijing Time) to discuss its fiscal second-quarter 2011
financial results and answer investors' questions.
To participate in the conference call, please dial the following number five to
ten minutes prior to the scheduled conference call time: +1 (866) 759-2078.
International callers should dial +1 (706) 643-0585. The conference ID for the
call is 53628003.
If you are unable to participate in the call at this time, a replay will be
available for 14 days starting on Thursday, March 24, 2010 at 9:00 a.m. ET. To
access the replay, dial +1 (800) 642-1687. International callers should dial +1
(706) 645-9291 and enter the conference ID 53628003.
About Pansoft Company Limited
Pansoft is a leading enterprise resource planning ("ERP") software and
professional services provider for the oil and gas industry in China. Its ERP
software offers comprehensive solutions in various business operations including
accounting, order processing, delivery, invoicing, inventory control, and
customer relationship management. For more information visit
http://www.pansoft.com.
Forward-Looking Statements This press release contains forward-looking
statements concerning Pansoft Company Limited, including but are not limited to,
statements regarding Pansoft's acquisition strategies, projected revenue growth,
contracts with customers, timing of development projects, and efforts to achieve
business growth. The actual results may differ materially depending on a number
of risk factors including but not limited to, the following: general economic
and business conditions, development, shipment and market acceptance of
products, additional competition from existing and new competitors, purchase
cycle of major customers, changes in technology or product techniques, and
various other factors beyond its control. All forward-looking statements are
expressly qualified in their entirety by this Cautionary Statement and the risk
factors detailed in the Company's reports filed with the Securities and Exchange
Commission. Pansoft Company Limited undertakes no duty to revise or update any
forward-looking statements to reflect events or circumstances after the date of
this release.
- Financial Tables Follow -
-4-
Pansoft Company Limited
Consolidated Statements of Operations and Comprehensive Income
For the three-month periods ended December 31, 2010 and 2009
(in U.S. Dollars)
For the three months ended
December 31,
2010 2009
------------------- ---------------------
Sales $7,217,736 $4,910,177
Cost of sales 4,119,349 2,308,226
Gross profit 3,098,387 2,601,951
------------------- ---------------------
Expenses
General and administrative expense 616,681 119,431
Amortization expense 330,533
Selling expense 328,078 160,297
Professional fees 123,229 87,656
Stock based compensation 59,505 151,127
(Gain) on disposition of property and equipment 366 (955)
------------------- ---------------------
Total Operating Expenses 1,458,393 517,556
------------------- ---------------------
Income from operations 1,639,994 2,084,395
Other income (expenses), net (1,777) 17,950
Government grant 157,655 30
Finance costs (15,922) (1,952)
Interest income 68,508 48,502
------------------- ---------------------
Income before provision from income taxes 1,848,458 2,148,925
Provision for current income taxes 603,288 74,759
Provision for deferred income taxes (192,910) 139,356
Net income 1,438,080 1,934,810
Less: Net Income attributable to non-controlling interests 52,579 --
Net Income attributable to Pansoft common shareholders 1,385,501 --
------------------- ---------------------
Other comprehensive (loss) income 188,640 (720)
------------------- ---------------------
Other comprehensive income 1,574,140 1,934,090
------------------- ---------------------
Basic net income per share 0.25 0.36
------------------- ---------------------
Diluted net income per share 0.25 0.36
------------------- ---------------------
Basic weighted average number of
shares outstanding 5,438,232 5,438,232
=================== =====================
Diluted weighted average number of
shares outstanding 5,467,087 5,434,852
=================== =====================
-5-
Pansoft Company Limited
Consolidated Statements of Operations and Comprehensive Income
For the six-month periods ended December 31, 2010 and 2009
(in U.S. Dollars)
For the six months ended
December 31,
2010 2009
-------------------- -------------------
Sales $10,724,068 $7,115,646
Cost of sales 5,912,196 3,336,573
-------------------- -------------------
Gross profit 4,811,872 3,779,073
Expenses
General and administrative expense 1,002,880 236,399
Amortization expense 359,814 --
Selling expense 403,549 254,917
Professional fees 188,527 217,437
Stock based compensation 154,354 302,254
(Gain) on disposition of property and equipment 366 (964)
-------------------- -------------------
Total Operating Expenses 2,109,490 1,010,043
Income from operations 2,702,382 2,769,030
Other income (expenses), net (3,712) 17,035
Government Subsidy 201,755 47
Finance costs (22,710) (1,930)
Interest income 141,341 86,562
-------------------- -------------------
Income before provision from income taxes 3,019,056 2,870,744
Provision for current income taxes 603,288 74,759
Provision for deferred income taxes (15,409) 173,120
Net income 2,431,177 2,622,865
Less: Net Income attributable to non-controlling interests 52,579
Net Income attributable to Pansoft Common Shareholders 2,378,598 2,622,865
Other comprehensive (loss) income 389,533 9,749
-------------------- -------------------
Other comprehensive income 2,768,131 2,632,614
Basic net income per share 0.45 0.48
==================== ===================
DILUTED NET INCOME PER SHARE 0.45 0.48
==================== ===================
Basic weighted average number of
shares outstanding 5,438,232 5,438,232
==================== ===================
Diluted weighted average number of
shares outstanding 5,434,852 5,434,852
==================== ===================
-6-
Pansoft Company Limited
Consolidated Balance Sheets
(in U.S. Dollars)
Dec. 31, June 30,
2010 2010
--------------------- --------------------------
ASSETS
Current assets
Cash and cash equivalents $ 12,002,219 $ 2,705,957
Accounts receivable, net 5,128,387 1,391,960
Unbilled revenues, net 3,875,936 6,887,471
Prepayment, deposits and other
receivables 697,856 386,420
Deferred and prepaid expenses 118,901
Inventory 442,870 61,984
Short term investments - Available for
sale 3,510,653 7,399,608
--------------------- --------------------------
Total current assets 2,776,822 18,833,400
Non-current assets
Property and equipment, net 1,932,620 760,258
Deposit for acquisitions 29,273 1,340,029
Deferred software development cost 693,856
Intangible assets 2,798,185 1,729,553
Goodwill 1,156,552 719,617
--------------------- --------------------------
Total assets $ 32,387,308 $ 23,382,857
===================== ==========================
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities $ 802,675 $ 224,041
Accruals and other current liabilities 1,245,392 2,542,929
Acquisition payable 1,463,522 --
Short-term borrowing 754,979 --
Deferred revenue 1,563,105 244,110
Income tax payable 562,382 325,079
Deferred income taxes 464,059 486,925
--------------------- --------------------------
Total current liabilities 6,856,114 3,823,054
------------------------------------------------------
Total liabilities 6,856,114 3,823,054
======================================================
Shareholders' equity
Common stock (30,000,000 common
shares authorized; par value of $0.0059
per share; 5,438,232 shares issued and
outstanding as of June 30, 2009)
Share capital 32,080 32,080
Treasury stock, at cost (218,280)
Additional paid-in capital 9,165,514 9,011,160
Retained earnings 10,616,513 8,895,307
Statutory reserves 2,122,460 897,040
Non-controlling interests 2,699,159
Accumulated other comprehensive income 1,113,747 724,216
--------------------- --------------------------
Total stockholder's equity 25,531,193 19,559,803
--------------------- --------------------------
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY $ 32,387,308 $ 23,382,857
===================== ==========================
-7-
------------------
COMPANY CONTACT:
Pansoft Company Limited
Allen Zhang
Chief Financial Officer
Phone: +86-531-8887-1159
E-Mail: Allen.Zhang@pansoft.com
------------------
INVESTOR CONTACT:
CCG Investor Relations
Mr. John Harmon
Sr. Account Manager
Phone: +86-10-6561-6886 EXT. 807 (Beijing)
E-Mail: John.Harmon@ccgir.com
www.ccgirasia.com
------------------
SOURCE: Pansoft Company Limited
###
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