Software

Ninetowns Reports Decreased Q2 2006 Results

Ninetowns' (NINE) total net revenue dropped as it reported its financial results for the second quarter of 2006.

Total net revenue for the second quarter of 2006 was US$5 million, representing a 37.5% decrease, compared to US$7.8 million for the second quarter of 2005. Net revenue from sales of enterprise software for the second quarter of 2006 was US$4 million, representing 80.0% of total net revenue, as compared to 80.5% for the second quarter of 2005.

Net revenue from software development services for the second quarter of 2006 was US$1.0 million, representing 20.0% of total net revenue, as compared to 19.5% for the second quarter of 2005.

Gross profit for the second quarter of 2006 was US$4.6 million, or 92.4% of total net revenue, representing a decrease of 36.2% compared to US$7.0 million, or 90.5% of total net revenue for the second quarter of 2005.

Operating income for the second quarter of 2006 was US$1.8 million, representing a 63.7% decrease compared to US$4.7 million for the second quarter of 2005. Operating margin for the second quarter of 2006 was 35.2%, compared to 60.6% for the second quarter of 2005.

Net income for the second quarter of 2006 was US$2.3 million, representing a 56.8% decrease compared to net income of US$5.1 million for the second quarter of 2005.

Tommy Fork, Chief Financial Officer of Ninetowns, said, "In the second quarter, we were able to realize the benefits of some of our cost control efforts from the past, especially in the areas of sales and marketing. As a result, our financial position continued to improve with cash balance increased to US$119.8 million."

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