CDC Software Expects to Exceed Wall Street Consensus Estimates for Third Quarter GAAP Net Income by 33 percent and Adjusted EBITDA by 15 percent

http://www.businesswire.com/news/home/20091030005383/en

SHANGHAI & ATLANTA--(Business Wire)--
CDC Software Corporation (NASDAQ: CDCS), a global provider of enterprise
software applications and services, today announced that, based on preliminary
financial projections and estimates, the company expects third quarter 2009 GAAP
net income to be in the range of (U.S.)$5.8 million to (U.S.)$6.4 million and
Adjusted EBITDA (a) to be in the range of (U.S.)$12.9 million to (U.S.)$13.5
million, exceeding Wall Street estimates for the quarter.

First Call consensus estimates for CDC Software`s third quarter of 2009 are
(U.S.)$4.6 million for GAAP net income and (U.S.)$11.5 million for Adjusted
EBITDA. Third quarter non-GAAP net income per share (a) is expected to be in the
range of (U.S.)$0.32 to (U.S.)$0.34 cents per share. This exceeds the First Call
consensus estimate of (U.S.)$0.27 per share for non-GAAP net income per share.
CDC Software expects third quarter 2009 revenue to be in the range of
(U.S.)$48.3 million to (U.S.)$48.9 million, which is in line with First Call
consensus estimates.

"We are pleased that, according to our preliminary estimates, we expect to
exceed Wall Street consensus for Non-GAAP net income per share by 22 percent,"
said Peter Yip, CEO of CDC Software. "Third quarter GAAP net income and Adjusted
EBITDA are expected to exceed analyst consensus by 33 percent and 15 percent,
respectively. Third quarter EBITDA margin is expected to increase to 27 percent
compared to 22 percent in the same period last year. It is also important to
note that since CDC Software went public in August, this is the second
consecutive quarter we have beaten our internal quarterly expectations, which we
believe were the most appropriate measurements for us at the time since analyst
coverage of CDC Software did not start until the third quarter, which in itself
exceeded analyst expectations. As for the current quarter, our fourth quarter
sales pipeline has continued to increase and has shown steady growth over the
last four quarters. In addition, our cross-sell opportunities in the fourth
quarter have continued to increase along with the growth in our sales pipeline.
We also are seeing organic sales growth and expect license revenue from new logo
customers to double in the third quarter of 2009 compared to the second quarter
of 2009. We have already closed several significant deals in food and beverage
and the financial services industries in the fourth quarter."

Yip added, "Despite the global recession and subsequent slow recovery, we
believe we are well positioned to continue improving our business fundamentals
and key operational metrics. Finally, with improving operating metrics and
increasing net cash on hand estimated to be approximately $60 million at the end
of the third quarter, we are poised to continue our growth through organic and
cross-sell sales opportunities, as well as synergistic acquisitions in both the
on-premise as well as Software as a Service (SaaS) models."

CDC Software
Unaudited Reconciliation From GAAP Results to Adjusted EBITDA and Adjusted Net Income Based on the Mid Point of the Range
(Amounts in thousands of U.S. dollars except share and per share data)

Three months ended
September 30,
2009
(a) Reconciliation from GAAP results to Adjusted EBITDA from continuing operations
Operating income from continuing operations $ 7,189
Add back restructuring and other charges 900
Add back depreciation expense 766
Add back amortization expense 1,094
Add back amortization expense included in cost of revenue 3,388
Add back stock compensation expenses 750
Add back exchange gain on deferred taxes (865 )
Adjusted EBITDA $ 13,222
Adjusted EBITDA margin % 27 %

(1) Adjusted EBITDA does not include the adjustment related to capitalized software costs which are credited against research and development expenses in our consolidated statement of operations. Below is a summary of capitalized software credits for the three months ended September 30, 2009:

Three months ended
September 30,
2009

Capitalized software credits $ (905 )

Three months ended
September 30,
2009
(a) Reconciliation from GAAP Net Income to Adjusted Net Income and Adjusted Net Income per Share
Net income attributable to controlling interest $ 6,242
Add back amortization expense 1,094
Add back amortization expense included in cost of revenue 3,388
Subtract capitalized software credits (905 )
Add back stock based compensation 750
Add back restructuring 900
Add back exchange gain loss on deferred tax assets (865 )
Add back non cash tax expense 642
Tax affect on all reconciling items@31% (1,620 )
Adjusted net income $ 9,626
Adjusted net income as % of revenues 20 %
Weighted average shares outstanding (basic and dilutive) 28,999,740
Adjusted net income per share (basic and dilutive) $ 0.33

(a) Adjusted Financial Measures

This press release includes Adjusted EBITDA and non-GAAP net income per share,
which are not prepared in accordance with GAAP (collectively, the "Non-GAAP
Financial Measures"). Non-GAAP Financial Measures are not alternatives for
measures such as EBITDA, net income, and earnings per share prepared under
generally accepted accounting principles in the United States ("GAAP"). These
Non-GAAP Financial measures may also be different from non-GAAP measures used by
other companies. Non-GAAP Financial Measures should not be used as a substitute
for, or considered superior to, measures of financial performance prepared in
accordance with GAAP.

Investors should be aware that these Non-GAAP Financial Measures have inherent
limitations, including their variance from certain of the financial measurement
principals underlying GAAP, should not be considered as a replacement for GAAP
performance measures, and should be read in conjunction with our consolidated
financial statements prepared in accordance with GAAP. These supplemental
Non-GAAP Financial Measures should not be construed as an inference that the
Company's future results will be unaffected by similar adjustments to net
earnings determined in accordance with GAAP. Reconciliations of Non-GAAP
Financial Measures to GAAP are provided in this press release.

* Special Note Regarding CDC Software Preliminary Financial Results

The preliminary financial results provided herein apply only to CDC Software
Corporation, a subsidiary of CDC Corporation. These preliminary financial
results do not apply to, and are not indicative of, the consolidated financial
results of CDC Corporation, or the financial results of CDC Games Corporation,
China.com, Inc. or any of their respective subsidiaries. Investors are cautioned
not to place reliance on the preliminary financial results set forth herein for
purposes of any investment decision with respect to the shares of CDC
Corporation, and should read the foregoing in conjunction with the reports and
other materials filed with the United States Securities and Exchange Commission
by CDC Corporation and CDC Software Corporation, from time to time.

About CDC Software

CDC Software (NASDAQ: CDCS), The Customer-Driven Company, is a provider of
enterprise software applications and services designed to help organizations
deliver a superior customer experience while increasing efficiencies and
profitability. CDC Software's product suite includes: CDC Factory (manufacturing
operations management), CDC Ross ERP (enterprise resource planning), CDC Supply
Chain (supply chain management , warehouse management and order management),CDC
X-alert (real-time event management), e-M-POWER (discrete manufacturing), CDC
Pivotal CRM and Saratoga CRM (customer relationship management), CDC Respond
(customer complaint and feedback management), c360 CRM add-on products, industry
solutions and development tools for the Microsoft Dynamics CRM platform, CDC HRM
(human resources) and business analytics solutions.

These industry-specific solutions are used by more than 6,000 customers
worldwide within the manufacturing, financial services, health care, home
building, real estate, wholesale and retail distribution industries. The company
completes its offerings with a full continuum of services that span the life
cycle of technology and software applications, including implementation, project
consulting, technical support and IT consulting. For more information, please
visit www.cdcsoftware.com.

About CDC Corporation

The CDC family of companies includes CDC Software (NASDAQ: CDCS) focused on
enterprise software applications and services, CDC Global Services focused on IT
consulting services, outsourced application development and IT staffing, CDC
Games focused on online games, and China.com China.com, Inc. (HKGEM:8006)
focused on portals for the greater China markets. For more information about CDC
Corporation (NASDAQ: CHINA), please visit www.cdccorporation.net.

Cautionary Note Regarding Forward-Looking Statements

This press release includes "forward-looking statements" within the meaning of
the United States Private Securities Litigation Reform Act of 1995. These
forward-looking statements include statements regarding our expectations
relating to GAAP net income, Adjusted EBITDA, non-GAAP net income per share,
revenue and our performance in relation to Wall Street consensus amounts with
respect thereto, our expectations regarding third quarter 2009 EBITDA margin,
our beliefs regarding our internal quarterly expectations, our beliefs regarding
our sales pipeline and cross-selling opportunities, our expectations regarding
new logo license sales in the third quarter of 2009 and our sales pipeline, our
beliefs regarding our future performance, our beliefs regarding our ability to
continue improving our business fundamentals and key operational metrics, our
beliefs regarding our ability to continue our growth through organic and
cross-sell sales, as well as synergistic acquisitions in both the on-premises
model as well as Software as a Service (SaaS), and other statements that are not
historical fact, the achievement of which involve risks, uncertainties and
assumptions. If any such risks or uncertainties materialize or if any of the
assumptions proves incorrect, our results could differ materially from the
results expressed or implied by the forward-looking statements we make. These
statements are based on management's current expectations and are subject to
risks and uncertainties and changes in circumstances. There are important
factors that could cause actual results to differ materially from those
anticipated in the forward looking statements, including the following: (a) the
ability to realize strategic objectives by taking advantage of market
opportunities in targeted geographic markets; (b) the ability to make changes in
business strategy, development plans and product offerings to respond to the
needs of current, new and potential customers, suppliers and strategic partners;
(c) the effects of restructurings and rationalization of operations; (d) the
ability to address technological changes and developments including the
development and enhancement of products; (e) the entry of new competitors and
their technological advances; (f) the need to develop, integrate and deploy
enterprise software applications to meet customer's requirements; (g) the
possibility of development or deployment difficulties or delays; (h) the
dependence on customer satisfaction with the company's software products and
services; (i) continued commitment to the deployment of the enterprise software
solutions; (j) risks involved in developing software solutions and integrating
them with third-party software and services; (k) the continued ability of the
company's enterprise software solutions to address client-specific requirements;
(l) demand for and market acceptance of new and existing enterprise software and
services and the positioning of the company's solutions; (m) the ability of
staff to operate the enterprise software and extract and utilize information
from the company's enterprise software solutions; (n) the continued cooperation
of our strategic and business partners; (o) risks relating to economic
conditions and other matters beyond our control; and (p) the risk that the
preliminary financial results provided herein could differ from our actual
results.Further information on risks or other factors that could cause results
to differ is detailed in our filings or submissions with the United States
Securities and Exchange Commission, and those of our ultimate parent company,
CDC Corporation, located at www.sec.gov. All forward-looking statements included
in this press release are based upon information available to management as of
the date of the press release, and you are cautioned not to place undue reliance
on any forward looking statements which speak only as of the date of this press
release. The company assumes no obligation to update or alter the forward
looking statements whether as a result of new information, future events or
otherwise. Historical results are not indicative of future performance.

CDC Corporation
Investor Relations:
Monish Bahl, 678-259-8510
mbahl@cdcsoftware.com
or
Media Relations:
CDC Software
Lorretta Gasper, 678-259-8631
lgasper@cdcsoftware.com

Copyright Business Wire 2009