SHANGHAI, Aug. 22, 2011 /PRNewswire via COMTEX/ –
Focus Media Holding Limited
/quotes/zigman/97560/quotes/nls/fmcn FMCN
-0.30%
, China’s largest out-of-home lifestyle interactive targeted digital media group, today announced its unaudited financial results for the second quarter ended June 30, 2011.
Highlights for Second Quarter 2011:
Total net revenue for the second quarter of 2011 was $179.0 million, of which
Aggregate net revenue from the LCD display network (including the movie theater network), in-store network and poster frame network was $166.1 million, which exceeded by approximately 11% the mid-point of the Company’s guidance range of $149-151 million. This represented year-on-year growth of 48% from $112.2 million for the second quarter of 2010 and quarter-on-quarter growth of 22% from $136.1 million for the first quarter of 2011.
Net revenue from the traditional outdoor billboard network for the second quarter of 2011 was $12.9 million, which exceeded by approximately 8% the midpoint of the Company’s guidance of $11-13 million. This represented year-on-year growth of 25% from $10.3 million for the second quarter of 2010.
GAAP net income attributable to Focus Media for the second quarter of 2011 was $42.8 million, representing an increase of 109% from $20.5 million for the first quarter of 2011 and an increase of 69% from $25.3 million for the second quarter of 2010.
Non-GAAP net income attributable to Focus Media for the second quarter of 2011 was $62.9 million, exceeding the mid-point of the Company’s guidance range of $54-$56 million by 14%, representing year-on-year growth of 42% from non-GAAP net income attributable to Focus Media of $44.3 million for the second quarter of 2010 and quarter-on-quarter growth of 48% from non-GAAP net income attributable to Focus Media of $42.4 million for the first quarter of 2011. Please see the sections on “Use of Non-GAAP Financial Measures” and “Reconciliation of GAAP to non-GAAP” elsewhere in this announcement for more information about the non-GAAP measures referred to within this announcement.
GAAP net income attributable to Focus Media per fully diluted ADS for the second quarter of 2011 was $0.30, representing an increase of 100% from $0.15 per fully diluted ADS for the first quarter of 2011 and an increase of 76% from $0.17 per ADS in the second quarter of 2010.
Non-GAAP net income attributable to Focus Media per fully diluted ADS for the second quarter of 2011 was $0.44, representing year-on year growth of 47% from $0.30 per fully diluted ADS for the second quarter of 2010 and quarter-on-quarter growth of 47% from $0.30 for the first quarter of 2011.
Highlights for Balance Sheet and Cash Flow Results of Second Quarter 2011:
Cash, cash equivalents and short-term investments were $590.9 million as of June 30, 2011, increasing by 6% from $557.9 million as of March 31, 2011.
Net cash inflow from operating activities in the second quarter of 2011 was $50.6 million, increased by 249% from $14.5 million for the first quarter of 2011 and a 34% increase from $37.8 million for the second quarter of 2010.
Net accounts receivable for the LCD display network (including the movie theater network), in-store network and poster frame network was $184.8 million as of June 30, 2011, an increase of 15% from $161.2 million as of March 31, 2011 as a result of sequential increase of revenues. Days sales outstanding on a rolling basis was 87 days in the second quarter of 2011 versus 95 days for the first quarter of 2011 due to improving cash collection in the second quarter as the first quarter is usually the slow cash collection season of the year.
Capital expenditures were $11.5 million for the second quarter of 2011, mostly attributable to upgrading our LCD screens into interactive screens in seven major cities of China.
Cash used in investment in equity method investee amounted to $12.2 million in the second quarter of 2011, representing the remaining payment for 15% stake in VisionChina, compared to $48.8 million in the first quarter of 2011, which was attributable to the initial payment for our acquisition of a 15% stake in VisionChina.
Cash used in the purchase of subsidiaries in the second quarter of 2011 was $1.7 million, primarily attributable to acquisitions in the poster frame network business as part of our ongoing strategy in expanding into additional cities.
Jason Jiang, Chairman and Chief Executive Officer of Focus Media said, “We are on schedule to complete installation of Focus Media’s interactive screens in seven cities by October. We believe installation of these interactive screens is a vital revolutionary step that will transform our relationships with Chinese consumers by forming an intimate and interactive tie between the Focus media platform and Chinese consumers, providing advertisers with an interactive and measurable advertising media platform that can make a direct sales impact. We believe our offering of an interactive and measurable media platform will not only meaningfully expand our media resources, but it will also greatly enhance our value proposition and pricing power to advertisers.”
Kit Low, the Company Chief Financial Officer added, “In the second quarter of 2011, the Company achieved aggregate net revenue year on year growth in our LCD display (including the movie theater network), in-store and poster frame businesses of 48%. GAAP net income attributable to Focus Media and non-GAAP net income attributable to Focus Media for the second quarter of 2011 was $42.8 million and $62.9 million, respectively. We achieved a positive net cash inflow from operating activities after deducting the purchase of equipment and subsidiaries of $37.3 million in the second quarter of 2011 as compared to a net cash inflow of $5.0 million in the first quarter of 2011 and a net cash inflow of $26.6 million in the second quarter of 2010. We believe our investment in interactive capability afford us to build an online to offline media platform that offer tremendous value to advertisers. Our investment will pay off in the form of propelling us to sustain an above average revenue growth.”
Second Quarter 2011 financial results
Advertising net revenue from the LCD display network (including the movie theatre network) was $113.0 million for the second quarter of 2011, representing an increase of 48% from $76.1 million for the second quarter of 2010 and an increase of 25% from $90.5 million for the first quarter of 2011.
Advertising net revenue from the poster frame network was $38.2 million for the second quarter of 2011, representing an increase of 52% from $25.2 million for the second quarter of 2010 and an increase of 6% from $36.1 million for the first quarter of 2011.
Advertising net revenue from the in-store network was $14.9 million for the second quarter of 2011, representing an increase of 37% from $10.9 million for the second quarter of 2010 and an increase of 57% from $9.5 million for the first quarter of 2011.
As of June 30, 2011, the total installed base of LCD displays in our LCD display network was 169,798 nationwide, including 162,244 displays through our directly owned networks, and 7,554 displays through our regional distributors, as compared to total LCD displays of 170,104 as of March 31, 2011 due to optimization of the network. The total number of non-digital frames ready to use in our poster frame network was 354,945 as of June 30, 2011, as compared to 342,728 as of March 31, 2011. In addition, as of June 30, 2011, we had 35,217 digital frames installed in our poster frame network, a slight decrease from 35,685 as of March 31, 2011 due to optimization of the network. The total number of displays installed in our in-store network was 50,129 as of June 30, 2011, as compared to 48,826 as of March 31, 2011.
Advertising net revenue from the traditional outdoor billboard network was $12.9 million for the second quarter of 2011, representing an increase of 25% from $10.3 million for the second quarter of 2010 and an increase of 23% from $10.5 million for the first quarter of 2011.
Non-GAAP gross profit from the LCD display network (including the movie theatre network) for the second quarter of 2011 was $89.7 million, representing an increase of 49% from $60.2 million for the second quarter of 2010 and an increase of 36% from $66.0 million for the first quarter of 2011.
Non-GAAP gross profit from the poster frame network for the second quarter of 2011 was $12.2 million, representing an increase of 61% from $7.6 million for the second quarter of 2010 and an increase of 5% from $11.6 million for the first quarter of 2011.
Non-GAAP gross profit from the in-store network for the second quarter of 2011 was $9.2 million, an increase of 96% from $4.7 million for the second quarter of 2010 and an increase of 142% from $3.8 million for the first quarter of 2011.
Non-GAAP gross profit from the traditional outdoor billboard network for the second quarter of 2011 was $3.6 million, representing an increase of 38% from $2.6 million for the second quarter of 2010 and representing a 100% increase from $1.8 million for the first quarter of 2011.
Non-GAAP operating expense for the second quarter of 2011 was $45.9 million, represented an increase of 24% from $37.0 million for the first quarter of 2011, which was mainly attributable to: 1) an increase of bad debt expenses in the amount of $1.8 million in the second quarter of 2011 in line with the sequential growth of revenue; 2) an increase of sales and marketing expenses also resulted by the sequential revenue growth; and 3) a decrease of government subsidies in the amount of $2.1 million compared with the first quarter of 2011 due to the government subsidies are highly subject to the tax paid while the first quarter is traditionally the peak season for tax payment. It also represented an increase of 59% from $28.9 million for the second quarter of 2010 mainly due to a reversal of bad debt in the amount of $3.6 million in the second quarter of 2010 as well as sales and marketing expenses increase as a result of year-on-year revenue growth.
Net cash inflow from operating activities in the second quarter of 2011 was $50.6 million, increased by 249% from $14.5 million for the first quarter of 2011 and a 34% increase from $37.8 million for the second quarter of 2010.
Net cash used in investing activities for the second quarter of 2011 was $12.1 million. In the second quarter of 2011, the Company incurred capital expenditures of $11.5 million, mostly attributable to upgrading our LCD screens into interactive screens in seven major cities of China, a payment of $12.2 million representing the remaining 20% payment for the acquisition of 15% stake in VisionChina, as well as $1.7 million consideration paid for our poster frame related acquisitions, partially offset by the net proceeds of $13.2 million from the short-term investments.
Business Outlook for Third Quarter 2011
The Company provides the following guidance with respect to the third quarter ending September 30, 2011:
Net revenues for the core business (inclusive of the LCD display network and other, the in-store network and the poster frame network) are expected to be in the range of $175-$177million, the mid-point of which would represent year-on-year growth of 37% and quarter-on-quarter growth of 6%. Net revenues for the non-core business (the traditional outdoor billboard network) are expected to be in the range of $11-$13 million. The Company’s non-GAAP net income is expected to be in the range of $68-$70 million. Our non-GAAP net income guidance excludes any contribution from our 15% stake in VisionChina. The Company estimates the weighted average fully diluted ADS count for the quarter at 141.5 million, assuming no further share repurchases during the quarter.
In the second quarter of 2011, the Company obtained the “HNTE” (High and New Technology Enterprises) certification for one of the Company’s subsidiaries and thus, this subsidiary is eligible for a tax holiday (i.e. two-year tax exemption followed by a three-year 50% tax reduction) effective from January 1, 2010. With the application of a 0% tax rate to that particular subsidiary in this year, the effective tax rate for fiscal year 2011 for the Company is expected to be approximately 14%-15%.
Announced Share Repurchase Program
On June 22, 2011, Focus Media announced an increase in the size of its share repurchase program to US$450 million and to extend the termination date of the repurchase plan to December 31, 2013. As of August 22, 2011, the Company has cumulatively spent approximately $306 million in share repurchases.
2011 Annual General Meeting of Shareholders
The Company announced that it scheduled to hold its annual general meeting of shareholders of 2011 on November 1, 2011.
Management Changes
The Company announced that the Vice President of Finance, Mr. Ge Xu, is resigning from his current role, effective August 31, 2011. “I feel lucky for being able to work with Jason and other members of Focus Media’s management team. The good memory will accompany me all the time,” said Mr. Ge Xu.
“We greatly appreciate the contribution of Mr. Ge Xu and we wish him every success in his future endeavors,” said Mr. Kit Low, the Chief Financial Officer of Focus Media.
Foreign Currency Translation
Assets and liabilities are translated at the exchange rate as of June 30, 2011, which was $1 to RMB6.4716. Equity accounts are translated at historical exchange rates and revenues, expenses, gains and losses are translated using the average rate for the second quarter of 2011, which was $1 to RMB6.4999. Translation adjustments are reported as cumulative translation adjustments and are shown as a separate component of other comprehensive income in the statement of equity and comprehensive income (loss).
USE OF NON-GAAP FINANCIAL MEASURES
In addition to Focus Media’s consolidated financial results under GAAP, the Company also provides non-GAAP financial measures, including non-GAAP gross profit (cumulatively and by segment), non-GAAP operating expenses, non-GAAP operating profit (loss), non-GAAP net income and non-GAAP fully-diluted Earnings per ADR, all excluding share-based compensation expenses, amortization of acquired intangible assets, loss from disposal of previously acquired subsidiaries, gain or loss from equity method investee and impairment charges of goodwill. Management uses these non-GAAP financial measures to better assess operating performance of the Company. The Company believes that these non-GAAP financial measures provide investors with another method for assessing Focus Media’s operating results in a manner that is focused on the performance of its ongoing operations. Readers are cautioned not to view non-GAAP results on a stand-alone basis or as a substitute for results under GAAP, or as being comparable to results reported or forecasted by other companies, and should refer to the reconciliation of GAAP results with non-GAAP results in the attached financial information. The Company believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing the performance of Focus Media and when planning and forecasting future periods. The Company computes its non-GAAP financial measures using a consistent method from quarter to quarter and the reconciliation items mostly include share-based compensation expenses, amortization of acquired intangible assets, profit or loss from disposal of previously acquired subsidiaries, gain or loss from equity method investee and impairment charges. The accompanying tables have more details on the GAAP financial measures that are most directly comparable to non-GAAP financial measures and the related reconciliation between these financial measures.
Focus Media Holding Ltd.
Reconciliation of GAAP to non-GAAP
(U.S. Dollar in thousands, except share and per-share data)
(Unaudited)
Three months ended June 30, 2011
GAAP (1) (2) (3) Non-GAAP
———– ——— ——— ——— ———–
Gross Profit
LCD display and other: 88,382 198 1,130 — 89,710
–LCD display network 85,260 198 1,114 — 86,572
–Movie theater network 3,122 — 16 — 3,138
Poster frame network 11,080 — 1,118 — 12,198
In–store network 9,162 — — — 9,162
Traditional outdoor billboard network 3,129 — 449 — 3,578
———– ——— ——— ——— ———–
Total Gross Profit 111,753 198 2,697 — 114,648
———– ——— ——— ——— ———–
General and administrative 30,240 (14,274) — — 15,966
Selling and marketing 33,079 (924) (1,056) — 31,099
Other operating income, net (1,209) — — — (1,209)
———– ——— ——— ——— ———–
Total operating expense 62,110 (15,198) (1,056) — 45,856
———– ——— ——— ——— ———–
Operating profit from continuing operations 49,643 15,396 3,753 — 68,792
Profit before tax from continuing operations 52,790 15,396 3,753 — 71,939
Net profit from continuing operations 42,863 15,396 3,753 992 63,004
Net profit from discontinued operations — — — — –
Net income attributable to Focus Media 42,804 15,396 3,753 992 62,945
Basic net income from continuing operations per ADS 0.32 0.46
Diluted net income from continuing operations per ADS 0.30 0.45
Basic net income from discontinued operations per ADS — –
Diluted net income from discontinued operations per ADS — –
Basic net income attributable to Focus Media per ADS 0.32 0.46
Diluted net income attributable to Focus Media per ADS 0.30 0.44
ADS used in calculating basic income per ADS 135,624,717 135,624,717
———– ———–
ADS used in calculating diluted income per ADS 141,562,763 141,562,763
———– ———–
(1). Share-based compensation.
(2). Amortization of acquired intangible assets.
(3). Loss from equity method investee
Three months ended March 31, 2011
GAAP (1) (2) (3) Non-GAAP
----------- -------- -------- -------- -----------
Gross Profit
LCD display and other: 64,649 196 1,110 -- 65,955
--LCD display network 62,880 196 1,094 -- 64,170
--Movie theater network 1,769 -- 16 -- 1,785
Poster frame network 10,374 -- 1,178 -- 11,552
In--store network 3,811 -- -- -- 3,811
Traditional outdoor billboard network 1,387 -- 445 -- 1,832
----------- -------- -------- -------- -----------
Total Gross Profit 80,221 196 2,733 -- 83,150
----------- -------- -------- -------- -----------
General and administrative 26,624 (14,154) -- -- 12,470
Selling and marketing 31,201 (917) (1,058) -- 29,226
Other operating income, net (4,705) -- -- -- (4,705)
----------- -------- -------- -------- -----------
Total operating expense 53,120 (15,071) (1,058) -- 36,991
----------- -------- -------- -------- -----------
Operating profit from continuing operations 27,101 15,267 3,791 -- 46,159
Profit before tax from continuing operations 29,462 15,267 3,791 -- 48,520
Net profit from continuing operations 19,781 15,267 3,791 2,774 41,613
Net profit from discontinued operations -- -- -- -- --
Net income attributable to Focus Media 20,549 15,267 3,791 2,774 42,381
Basic net income from continuing operations per ADS 0.15 0.31
Diluted net income from continuing operations per ADS 0.14 0.30
Basic net income from discontinued operations per ADS -- --
Diluted net income from discontinued operations per ADS -- --
Basic net income attributable to Focus Media per ADS 0.15 0.31
Diluted net income attributable to Focus Media per ADS 0.15 0.30
ADS used in calculating basic income per ADS 135,594,008 135,594,008
----------- -----------
ADS used in calculating diluted income per ADS 140,394,354 140,394,354
----------- -----------
(1). Share-based compensation.
(2). Amortization of acquired intangible assets.
(3). Loss from equity method investee
Three months ended June 30, 2010
GAAP (1) (2) (3) Non-GAAP
----------------- ----------------- ----------------- ----------------- -----------------
Gross Profit
LCD display and other: 58,917 283 1,036 -- 60,236
--LCD display network 58,044 283 1,021 -- 59,348
--Movie theater network 873 -- 15 -- 888
Poster frame network 5,939 -- 1,634 -- 7,573
In--store network 4,745 -- -- -- 4,745
Traditional outdoor billboard network 2,167 -- 427 -- 2,594
----------------- ----------------- ----------------- ----------------- -----------------
Total Gross Profit 71,768 283 3,097 -- 75,148
----------------- ----------------- ----------------- ----------------- -----------------
General and administrative 16,737 (11,400) -- -- 5,337
Selling and marketing 28,729 (1,244) (1,018) -- 26,467
Other operating expenses (income), net (1,352) -- (1,524) (2,876)
----------------- ----------------- ----------------- -----------------
Total operating expense 44,114 (12,644) (1,018) (1,524) 28,928
----------------- ----------------- ----------------- ----------------- -----------------
Operating profit from continuing operations 27,654 12,927 4,115 1,524 46,220
Profit before tax from continuing operations 28,719 12,927 4,115 1,524 47,285
Net profit from continuing operations 23,869 12,927 4,115 1,524 42,435
Net profit from discontinued operations 2,932 -- 367 -- 3,299
Net income attributable to Focus Media 25,336 12,927 4,482 1,524 44,269
Basic net income from continuing operations per ADS 0.17 0.30
Diluted net income from continuing operations per ADS 0.16 0.29
Basic net income from discontinued operations per ADS 0.02 0.02
Diluted net income from discontinued operations per ADS 0.02 0.02
Basic net income attributable to Focus Media per ADS 0.18 0.31
Diluted net income attributable to Focus Media per ADS 0.17 0.30
Shares used in calculating basic income per ADS 143,787,178 143,787,178
----------------- -----------------
Shares used in calculating diluted income per ADS 148,162,497 148,162,497
----------------- -----------------
(1). Share-based compensation.
(2). Amortization of acquired intangible assets.
(3). Loss from disposal of previously acquired subsidiaries, all attributable to poster frame business.
Focus Media Holding Ltd.
Reconciliation of GAAP to non--GAAP
(U.S. Dollar in thousands, except share and per--share data)
(Unaudited)
Six months ended June 30, 2011
GAAP (1) (2) (3) Non-GAAP
----------- ---------- ---------- ---------- -----------
Gross Profit
LCD display and other: 153,031 394 2,240 -- 155,665
--LCD display network 148,140 394 2,208 -- 150,742
--Movie theater network 4,891 -- 32 -- 4,923
Poster frame network 21,454 -- 2,296 -- 23,750
In--store network 12,973 -- -- -- 12,973
Traditional outdoor billboard network 4,516 -- 894 -- 5,410
----------- ---------- ---------- ---------- -----------
Total Gross Profit 191,974 394 5,430 -- 197,798
----------- ---------- ---------- ---------- -----------
General and administrative 56,864 (28,428) -- -- 28,436
Selling and marketing 64,280 (1,841) (2,114) -- 60,325
Other operating income, net (5,914) -- -- -- (5,914)
----------- ---------- ---------- ---------- -----------
Total operating expense 115,230 (30,269) (2,114) -- 82,847
----------- ---------- ---------- ---------- -----------
Operating profit from continuing operations 76,744 30,663 7,544 -- 114,951
Profit before tax from continuing operations 82,252 30,663 7,544 -- 120,459
Net profit from continuing operations 62,644 30,663 7,544 3,766 104,617
Net profit from discontinued operations -- -- -- -- --
Net income attributable to Focus Media 63,353 30,663 7,544 3,766 105,326
Basic net income from continuing operations per ADS 0.46 0.77
Diluted net income from continuing operations per ADS 0.44 0.74
Basic net income from discontinued operations per ADS -- --
Diluted net income from discontinued operations per ADS -- --
Basic net income attributable to Focus Media per ADS 0.47 0.78
Diluted net income attributable to Focus Media per ADS 0.45 0.75
ADS used in calculating basic income per ADS 135,609,448 135,609,448
----------- -----------
ADS used in calculating diluted income per ADS 140,998,683 140,998,683
----------- -----------
(1). Share-based compensation.
(2). Amortization of acquired intangible assets.
(3). Loss from equity method investee.
Six months ended June 30, 2010
GAAP (1) (2) (3) (4) Non-GAAP
------------- ------------- ------------- ------------- ------------- -------------
Gross Profit
LCD display and other: 96,961 562 1,890 -- -- 99,413
--LCD display network 93,254 562 1,860 -- -- 95,676
--Movie theater network 3,707 -- 30 -- -- 3,737
Poster frame network 12,290 -- 3,273 15,563
In--store network 7,189 -- -- -- -- 7,189
Traditional outdoor billboard network 3,548 -- 855 -- -- 4,403
------------- ------------- ------------- ------------- ------------- -------------
Total Gross Profit 119,988 562 6,018 -- -- 126,568
------------- ------------- ------------- ------------- ------------- -------------
General and administrative 38,055 (22,691) -- -- -- 15,364
Selling and marketing 49,321 (2,475) (2,035) -- -- 44,811
Impairment loss 5,736 -- -- (5,736) -- --
Other operating (income), net (5,147) -- -- -- (1,524) (6,671)
------------- ------------- ------------- ------------- ------------- -------------
Total operating expense 87,965 (25,166) (2,035) (5,736) (1,524) 53,504
------------- ------------- ------------- ------------- ------------- -------------
Operating profit from continuing operations 32,023 25,728 8,053 5,736 1,524 73,064
Profit before tax from continuing operations 33,517 25,728 8,053 5,736 2,812 75,846
Net profit from continuing operations 22,472 25,728 8,053 5,736 2,812 64,801
Net profit from discontinued operations 3,736 -- 744 -- -- 4,480
Net income attributable to Focus Media 24,382 25,728 8,797 5,736 2,812 67,455
Basic net income from continuing operations per ADS 0.16 0.45
Diluted net income from continuing operations per ADS 0.15 0.43
Basic net income from discontinued operations per ADS 0.03 0.03
Diluted net income from discontinued operations per ADS 0.03 0.03
Basic net income attributable to Focus Media per ADS 0.17 0.47
Diluted net income attributable to Focus Media per ADS 0.16 0.45
Shares used in calculating basic income per ADS 144,705,951 144,705,951
------------- -------------
Shares used in calculating diluted income per ADS 149,081,270 149,081,270
------------- -------------
(1). Share-based compensation.
(2). Amortization of acquired intangible assets.
(3). Impairment charges of goodwill as a result of earn-out payments in poster frame business.
(4). Loss from disposal of previously acquired poster frame subsidiaries.
CONFERENCE CALL
The Company will host a conference call to discuss the second quarter 2011 results at 9:00 p.m. U.S. Eastern Time on August 22, 2011 (6:00 p.m. U.S. Pacific Time on August 22)(2011 and 9:00 a.m. Beijing/Hong Kong Time on August 23)(2011 and 9:2011). The dial-in details for the live conference call are set forth below: U.S. Toll Free Number 1.877.556.5921, Hong Kong dial-in number +852.3002.1672, International dial-in number 1.617.597.5474; Pass code: 77298094.
A replay of the call will be available from August 23, 2011 12:00 am until August 30, 2011 (US Eastern Time). The dial-in details for the replay are set forth below: U.S. Toll Free Number 1 888 286.8010, International dial-in number +1 617 801.6888; Pass code 13703580. Additionally, a live and archived web cast of this call will be available on the Focus Media web site at
http://ir.focusmedia.cn
SAFE HARBOR: FORWARD-LOOKING STATEMENTS
This press release includes statements that may constitute forward-looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. Focus Media may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission on forms 20-F and 6-K., in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about Focus Media's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Potential risks and uncertainties include, but are not limited to, risks outlined in Focus Media's filings with the U.S. Securities and Exchange Commission, including its registration statements on Form F-1, F-3 and 20-F, in each case as amended. Focus Media does not undertake any obligation to update any forward-looking statement, except as required under applicable law.
This release is not an offer of securities for sale in the United States. Securities may not be offered or sold in the United States absent registration or an exemption from registration. Any public offering of securities to be made in the United States will be made by means of a prospectus that may be obtained from the issuer or selling security holder and that will contain detailed information about the company and management, as well as financial statements.
ABOUT FOCUS MEDIA HOLDING LIMITED
Focus Media Holding Limited
/quotes/zigman/97560/quotes/nls/fmcn FMCN
-0.30%
operates China's largest lifestyle targeted interactive digital media network. The Company offers one of the most comprehensive targeted interactive digital media platforms aimed at Chinese consumers at various urban locations. The increasingly fragmented and mobile lifestyle of Chinese urban consumers has created the need for more efficient media means to capture consumer attention. Focus Media's mission is to build an increasingly comprehensive and measurable interactive urban media network that reaches consumers at various out-of-home locations. As of June 30, 2011, Focus Media's out-of-home lifestyle interactive digital media network had approximately 170,000 LCD displays in about 95,000 commercial buildings that covered more than 90 cities, 390,000 in-elevator poster and digital picture frames in residential buildings that covered more than 30 cities, approximately 50,000 LCD displays in more than 2,700 hypermarkets, supermarkets and convenience stores and approximately 1,900 movie screens in about 280 movie theaters throughout China.
Focus Media Holding Limited
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(U.S Dollars in Thousands)
2011-06-30 2011-03-31
ASSETS
Current assets
Cash and cash equivalents 404,704 361,061
Short-term investments 186,198 196,852
Accounts receivable, net 200,660 175,045
Prepaid expenses and other current assets 44,053 42,591
Deposit paid for acquisition of subsidiaries 618 1,174
Rental deposits 50,557 46,797
Other current assets 1,722 1,951
--------------- ---------------
Total current assets 888,512 825,471
Rental deposits, non-current 5,722 5,166
Equipment, net 65,807 67,699
Acquired intangible assets, net 17,553 20,918
Goodwill 429,525 427,252
Investment under equity method 58,209 58,474
Other long term assets 19,273 12,424
Total assets 1,484,601 1,417,404
LIABILITIES AND EQUITY
Current liabilities
Accounts payable 18,330 17,603
Accrued expenses and other current liabilities 117,155 119,560
Income taxes payable 314 292
Amount due to Related parties 1,842 2,336
Deferred tax liabilities 24,180 23,867
--------------- ---------------
Total current liabilities 161,821 163,658
Deferred tax liabilities, non-current 9,995 9,982
--------------- ---------------
Total liabilities 171,816 173,640
--------------- ---------------
Equity
Ordinary shares 34 34
Additional paid in capital 1,716,322 1,700,879
Subscription receivable -- (203)
Accumulated deficit (499,597) (542,403)
Accumulated other comprehensive income 95,815 85,307
--------------- ---------------
Total Focus Media equity 1,312,574 1,243,614
Noncontrolling interests 211 150
--------------- ---------------
Total equity 1,312,785 1,243,764
--------------- ---------------
Total liabilities and equity 1,484,601 1,417,404
Focus Media Holding Limited
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(U.S Dollar in thousands, except earnings per ADS and ADS data)
Three months ended Six months ended
2011-06-30 2011-03-31 2010-06-30 2011-06-30 2010-06-30
Revenues
LCD display network and other: 123,142 98,458 83,931 221,600 145,181
-LCD display network 113,518 90,024 80,056 203,542 135,484
-Movie theater network 9,624 8,434 3,875 18,058 9,697
In-store network 16,339 10,405 11,997 26,744 20,485
Poster frame network 41,648 39,282 27,623 80,930 55,036
Traditional outdoor billboard network 13,090 10,622 10,504 23,712 19,354
----------- ----------- ----------- ----------- -----------
Total gross revenues 194,219 158,767 134,055 352,986 240,056
Less: Sales taxes 15,257 12,192 11,547 27,449 20,795
----------- ----------- ----------- ----------- -----------
Total net revenue (note 1) 178,962 146,575 122,508 325,537 219,261
----------- ----------- ----------- ----------- -----------
Cost of revenues
LCD display network and other: 24,614 25,813 17,137 50,427 34,717
-LCD display network 18,630 19,624 14,486 38,254 29,431
-Movie theater network 5,984 6,189 2,651 12,173 5,286
In-store network 5,774 5,701 6,123 11,475 11,341
Poster frame network 27,098 25,705 19,298 52,803 37,746
Traditional outdoor billboard network 9,723 9,135 8,182 18,858 15,469
----------- ----------- ----------- ----------- -----------
Total cost of revenues 67,209 66,354 50,740 133,563 99,273
----------- ----------- ----------- ----------- -----------
Gross profit 111,753 80,221 71,768 191,974 119,988
----------- ----------- ----------- ----------- -----------
Operating expenses
General and administrative 30,240 26,624 16,737 56,864 38,055
Selling and marketing 33,079 31,201 28,729 64,280 49,321
Impairment loss -- -- -- -- 5,736
Other operating income, net (1,209) (4,705) (1,352) (5,914) (5,147)
----------- ----------- ----------- ----------- -----------
Total operating expenses 62,110 53,120 44,114 115,230 87,965
----------- ----------- ----------- ----------- -----------
Operating profit 49,643 27,101 27,654 76,744 32,023
Interest income 3,147 2,361 1,065 5,508 2,782
Investment loss -- -- -- -- 1,288
Income from continuing operations before income taxes 52,790 29,462 28,719 82,252 33,517
Provision for income taxes 8,935 6,907 4,850 15,842 11,045
Loss from equity method investee 992 2,774 -- 3,766 --
----------- ----------- ----------- ----------- -----------
Net income from continuing operations 42,863 19,781 23,869 62,644 22,472
Net income from discontinued operations, net of tax -- -- 2,932 -- 3,738
----------- ----------- ----------- ----------- -----------
Net income 42,863 19,781 26,801 62,644 26,210
Less: Net income (loss) attributable to noncontrolling interests 59 (768) 1,465 (709) 1,828
----------- ----------- ----------- ----------- -----------
Net income attributable to Focus Media 42,804 20,549 25,336 63,353 24,382
Net income from continuing operations per ADS
-basic 0.32 0.15 0.17 0.46 0.16
-diluted 0.30 0.14 0.16 0.44 0.15
Net income from discontinued operations per ADS
-basic -- -- 0.02 -- 0.03
-diluted -- -- 0.02 -- 0.03
Net income attributable to Focus Media per ADS
-basic 0.32 0.15 0.18 0.47 0.17
-diluted 0.30 0.15 0.17 0.45 0.16
ADS used in calculating basic income per ADS 135,624,717 135,594,008 143,787,178 135,609,448 144,705,951
ADS used in calculating diluted income per ADS 141,562,763 140,394,354 148,162,497 140,998,683 149,081,270
Note 1: Details of net revenues by segment are as follows (U.S. Dollars in thousands):
Three months ended Six months ended
2011-06-30 2011-03-31 2010-06-30 2011-06-30 2010-06-30
Gross revenues
LCD display network 113,518 90,024 80,056 203,542 135,484
Movie theater network 9,624 8,434 3,875 18,058 9,697
In-store network 16,339 10,405 11,997 26,744 20,485
Poster frame network 41,648 39,282 27,623 80,930 55,036
Traditional outdoor billboard network 13,090 10,622 10,504 23,712 19,354
Total gross revenues 194,219 158,767 134,055 352,986 240,056
---------- ---------- ---------- ---------- ----------
Less: Sales taxes
LCD display network 9,628 7,519 7,526 17,147 12,799
Movie theater network 519 477 351 996 704
In-store network 1,403 893 1,129 2,296 1,955
Poster frame network 3,470 3,203 2,386 6,673 5,000
Traditional outdoor billboard network 237 100 155 337 337
Total sales tax 15,257 12,192 11,547 27,449 20,795
---------- ---------- ---------- ---------- ----------
Net revenues
LCD display network 103,890 82,505 72,530 186,395 122,685
Movie theater network 9,105 7,957 3,524 17,062 8,993
In-store network 14,936 9,512 10,868 24,448 18,530
Poster frame network 38,178 36,079 25,237 74,257 50,036
Traditional outdoor billboard network 12,853 10,522 10,349 23,375 19,017
Total net revenues 178,962 146,575 122,508 325,537 219,261
Focus Media Holding Limited
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASHFLOWS
(U.S. Dollar in thousands)
Three months ended Six months ended
2011-06-30 2010-06-30 2011-06-30 2010-06-30
Operating activities:
Net income 42,863 26,801 62,644 26,210
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Bad debt expenses 3,792 (1,518) 5,792 337
Share-based compensation 15,396 12,927 30,663 25,728
Depreciation 7,030 7,428 14,107 15,071
Amortization of acquired intangible assets 3,753 4,482 7,544 8,796
Loss from disposal of previously acquired subsidiaries -- 1,524 -- 1,524
Loss on disposal of equity method investment -- -- -- 1,288
Loss from equity method investee 992 -- 3,766 --
Impairment charges for goodwill, acquired intangible assets and fixed assets -- -- -- 5,736
Write-off of long-term assets 990 990
Others 108 101 143 136
Net changes in current assets and current liabilities, net of effects of acquisitions (24,345) (13,953) (60,552) (41,845)
----------- ----------- ----------- -----------
Net cash provided by operating activities 50,579 37,792 65,097 42,981
----------- ----------- ----------- -----------
Investing activities:
Purchase of equipment and other long term assets (11,498) (3,849) (17,367) (4,925)
Payment paid to acquired subsidiaries (1,749) (7,325) (5,360) (22,538)
Investment in equity method investee (12,201) -- (61,003) --
Investment in short-term investments (318,777) -- (431,742) --
Proceeds from the sale of short-term investments 332,010 -- 387,065 29,290
Proceeds received from disposal of fixed assets 149 142 447 142
Disposal of subsidiaries -- (140) 7,296 2,789
Net cash (used in)/provided by investing activities (12,066) (11,172) (120,664) 4,758
----------- ----------- ----------- -----------
Financing activities:
Cash used for share repurchase -- (36,715) (3,000) (36,715)
Cash deposit for share repurchase -- (6,301) -- (6,301)
Capital injection from (repayment to) noncontrolling interests -- 1,924 (76) 10,968
Proceeds from issuance of ordinary shares, 251 1,819 568 1,819
Net cash provided by/(used in) financing activities 251 (39,273) (2,508) (30,229)
----------- ----------- ----------- -----------
Effect of exchange rate changes 4,879 2,344 8,303 2,583
----------- ----------- ----------- -----------
Net increase (decrease) in cash and cash equivalents 43,643 (10,309) (49,772) 20,093
Cash and cash equivalents, beginning of period 361,061 598,561 454,476 568,159
----------- ----------- ----------- -----------
Cash and cash equivalents, end of period 404,704 588,252 404,704 588,252
Supplemental disclosure of cash flow information:
Income taxes paid 6,525 9,367 21,291 23,940
Supplemental disclosure of non-cash investing activity:
Accrual for acquisition of subsidiaries 3,858 7,178 3,858 7,178
SOURCE Focus Media Holding Limited
Copyright (C) 2011 PR Newswire. All rights reserved
/quotes/zigman/97560/quotes/nls/fmcn
Add FMCN to portfolio
FMCN
Focus Media Holding Ltd. ADS
$
26.64
-0.08
-0.30%
Volume: 2.50M
Sept. 26, 2011 4:00p
/quotes/zigman/97560/quotes/nls/fmcn
Add FMCN to portfolio
FMCN
Focus Media Holding Ltd. ADS
$
26.64
-0.08
-0.30%
Volume: 2.50M
Sept. 26, 2011 4:00p
Tags: Media Reports
0