China Finance Online Reports 2014 First Quarter Unaudited Financial Results
- Net revenues increased 321% YoY to first quarter record of $23.2 million -
BEIJING, June 19, 2014 /PRNewswire/ -- China Finance Online Co. Limited ("China Finance Online", or the "Company", "we", "us" or "our") (NASDAQ GS: JRJC), a leading web-based financial services company that provides Chinese retail investors with online access to stocks, commodities, mutual funds and wealth management products, today announced its unaudited financial results for the first quarter ended on March 31, 2014.
2014 First Quarter Financial Summary
- Net revenues were $23.2 million, representing a year-over-year increase of 321% from $5.5 million in the first quarter of 2013;
- Gross profit was $17.8 million, representing a year-over-year increase of 389% from $3.6 million in the first quarter of 2013;
- Net loss attributable to China Finance Online was $2.0 million, compared with a net loss of $4.3 million in the first quarter of 2013.
2014 First Quarter Results
Net revenues for the first quarter of 2014 increased by 321% year-over-year to $23.2 million from $5.5 million in the first quarter of 2013, and compared with $26.5 million in the fourth quarter of 2013. The Company's net revenues are categorized under: (a) revenues from financial services, which include Hong Kong brokerage-related revenues and our precious metal trading service; (b) revenues from financial information and advisory business, which include subscription fees from individual customers and institutional customers; and (c) advertising revenues. During the first quarter of 2014, revenues from financial services, revenues from financial information and advisory business and advertising revenues each contributed 78%, 14% and 8% of the total revenues, respectively, compared with 17%, 53% and 26%, respectively, for the first quarter in 2013.
Revenues from financial services were $18.0 million, compared with $0.9 million in the first quarter of 2013 and $20.4 million in the fourth quarter of 2013. The year-over-year increase was mainly driven by better operating performances in the precious metal trading service. The quarter-over-quarter decrease reflected the impact of fewer trading days in the first quarter due to the long Chinese New Year holidays. Financial services continue to be a growth engine under the Company's new business model.
Revenues from financial information and advisory business were $3.2 million, compared with $2.9 million in the first quarter of 2013 and $2.9 million in the fourth quarter of 2013. Revenues from advertising were $1.8 million, compared with $1.5 million in the first quarter of 2013 and $2.5 million in the fourth quarter of 2013.
Gross profit increased by 389% year-over-year to $17.8 million from $3.6 million for the first quarter in 2013, and compared with $22.0 million in the fourth quarter of 2013. Gross margin for the first quarter of 2014 was 76.8%, compared with 66.1% for the first quarter of 2013 and 83.1% in the fourth quarter of 2013. The year-over-year increase in gross margin was mainly due to the increase in revenues related to financial services.
General and administrative ("G&A") expenses for the first quarter of 2014 were $4.0 million, or 17.4% of net revenues, compared with $2.9 million, or 52.7% of net revenues for the first quarter in 2013, and $5.3 million, or 19.9% of net revenues for the fourth quarter of 2013. The year-over-year increase in G&A expenses in absolute value was mainly due to higher rent and wage expenses.
Sales and marketing expenses for the first quarter of 2014 were $12.1 million, or 52.2% of net revenues, compared with $3.1 million, or 56.7% of net revenues in the first quarter of 2013 and $15.5 million, or 58.6% of net revenues in the fourth quarter of 2013. The year-over-year increase in sales and marketing expenses in absolute value was mainly due to higher headcount related expenses and marketing expenses.
Product development expenses for the first quarter of 2014 were $2.6 million, or 11.0% of net revenues, compared with $2.2 million, or 40.2% of net revenues for the first quarter in 2013, and $2.2 million, or 8.4% of net revenues in the fourth quarter of 2013. The Company expects to continue to invest in its data, product and technical capabilities to achieve the Company's long-term strategic plan.
Total operating expenses for the first quarter of 2014 were $18.7 million, compared with $8.2 million in the first quarter of 2013, and $23.0 million in the fourth quarter of 2013.
Net loss attributable to China Finance Online for the first quarter of 2014 was $2.0 million, compared with a net loss of $4.3 million in the first quarter of 2013, and a net income of $1.9 million in the fourth quarter of 2013. Basic and diluted weighted average number of ordinary shares in the first quarter of 2014 was 109 million. Each ADS represents five ordinary shares of the Company.
As of March 31, 2014, total cash and cash equivalents were $32.1 million. Accounts receivables from the non-margin related business were $14.3 million, while iSTAR Finance had margin-related accounts receivables of $4.3 million.
The total shareholders' equity of China Finance Online was $73.9 million as of March 31, 2014.
Mr. Zhiwei Zhao, Chairman and CEO of China Finance Online commented, "We are pleased that our strategic transition continues to take hold as evidenced by our record first quarter revenues. Precious metal trading and Yinglibao cash management are viable new businesses addressing the demand of Chinese investors for alternative investment opportunities. Leveraging on our massive user base and industry-leading customer specialist team, we have quickly gained customers and established China Finance Online as a premier provider of such services in China. We will continue to explore various opportunities to become a one-stop financial product and service provider."
Conference Call Information
The Company will host a conference call and a simultaneous webcast on June 19, 2014 at 8:00 p.m. Eastern Time / June 20, 2014 8:00 a.m. Beijing Time. Interested parties may participate in the conference call by dialing approximately five minutes before the call start time at U.S. 1-800-742-9301, Hong Kong 800-906-648, Singapore 800-616-2313, or China 800-870-0210 / 400-120-3170, and the Conference ID for all regions is 61349884.
A replay of the conference call will be available shortly after the conclusion of the event through 09:59 a.m. Eastern Time on June 26, 2014 (or 09:59 p.m. Beijing Time on June 26, 2014). The dial-in details for the replay: U.S. 1-855-452-5696, Hong Kong 800-963-117, Singapore 800-616-2305, China 800-870-0205 / 400-632-2162. Conference ID for all regions is 61349884.
The conference call will be available as a live webcast and replay at: http://www.media-server.com/m/p/ebj2ja9y
About China Finance Online
China Finance Online Co. Limited is a leading web-based financial services company that provides Chinese retail investors with access to stocks, commodities, mutual funds and wealth management products. The Company's two prominent flagship portal sites, www.jrj.com and www.stockstar.com, are ranked as top financial web sites in China and have enormous active user bases. In addition to the web-based stock trading platform, the Company offers basic financial software, information services and securities investment advisory services to retail investors in China. Through its subsidiary, Shenzhen Genius Information Technology Co., the Company provides financial database and analytics to institutional customers including domestic financial, research, academic and regulatory institutions. China Finance Online also provides brokerage services in Hong Kong.
Safe Harbor Statement
This press release contains forward-looking statements. These statements constitute "forward-looking" statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. 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. Among other things, this release contains the following forward-looking statements regarding:
- our product upgrade and strategic transformation initiative;
- our prospect on the cash management business of our financial platform "Yinglibao";
- our prospect on the continuous growth of our precious metals trading services;
- our prospect on stabilization in cash attrition and improvement of our financial position;
- our initiatives to address customers' demand for intuitive online investment platforms and alternative investment opportunities; and
- the market prospect of the business of securities investment advisory and wealth management.
Such statements involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements, which risks and uncertainties include, among others, the following:
- the changing customer needs, regulatory environment and market condition that we are subject to;
- the uneven condition of the world and Chinese economy that could lead to volatility in the equity markets and affect our operating results in the coming quarters;
- the impact of the changing conditions of the Chinese stock market, Hong Kong stock market and global financial market on our future performance;
- the unpredictability of our strategic transformation and growth of new businesses, including our precious metal trading service;
- the prospect of our margin-related business and the degree to which our implementation of margin account screening and ongoing monitoring will yield successful outcome;
- the degree to which our strategic collaborations with partners will yield successful outcome;
- the prospect for China's high-net-worth and middle-class households;
- the prospect of equipping our customer specialists with new technology, tools and financial knowledge;
- the competition we are facing in the new business of securities investment advisory and wealth management, including cash management solutions and mutual fund distribution, such as Yinglibao;
- wavering investor confidence that could impact our business; and
- possible non-cash goodwill, intangible assets and investment impairment may adversely affect our net income.
Further information regarding these and other risks is included in the Company's filings with the U.S. Securities and Exchange Commission, including its annual report on Form 20-F under "Forward-Looking Information" and "Risk Factors". The Company does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law.
Contact:
Julie Zhu
China Finance Online Co. Limited
+86-10-5832-5288
[email protected]
Shiwei Yin
Grayling
646-284-9474
[email protected]
| China Finance Online Co. Limited |
||
| UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS |
||
| (In thousands of U.S. dollars)
|
||
| Mar. 31, 2014 |
Dec. 31, 2013 |
|
| Assets |
||
| Current assets: |
||
| Cash and cash equivalents |
32,105 |
36,371 |
| Restricted cash |
6 |
4 |
| Trust bank balances held on behalf of customers |
14,671 |
9,999 |
| Accounts receivable, net - Others |
14,340 |
15,325 |
| Accounts receivable, net - Margin clients |
4,260 |
5,977 |
| Loan receivable |
10,240 |
10,333 |
| Consideration Receivable |
13,329 |
13,450 |
| Prepaid expenses and other current assets |
7,567 |
3,307 |
| Deferred tax assets, current |
632 |
1,114 |
| Total current assets |
97,150 |
95,880 |
| Long-term investments, net |
1,131 |
1,139 |
| Property and equipment, net |
4,400 |
3,868 |
| Acquired intangible assets, net |
7,390 |
7,545 |
| Rental deposits |
1,313 |
1,115 |
| Goodwill |
16,881 |
16,974 |
| Deferred tax assets, non-current |
83 |
94 |
| Other deposits |
7,257 |
6,877 |
| Total assets |
135,605 |
133,492 |
| Liabilities and equity |
||
| Current liabilities: |
||
| Deferred revenue, current (including deferred revenue, current of the consolidated variable interest entities without recourse to China Finance Online Co. Limited $2,819 and $3,808 as of March 31,2014 and December 31,2013, respectively) |
4,752 |
6,150 |
| Accrued expenses and other current liabilities (including accrued expenses and other current liabilities of the consolidated variable interest entities without recourse to China Finance Online Co. Limited $6,993 and $7,460 as of March 31,2014 and December 31,2013, respectively) |
9,100 |
9,696 |
| Amount due to customers for trust bank balances held on behalf of customers(including amount due to customers for trust bank balances held on behalf of customers of the consolidated variable interest entities without recourse to China Finance Online Co. Limited $372 and $648 as of March 31,2014 and December 31,2013, respectively) |
14,671 |
9,999 |
| Accounts payable (including accounts payable of the consolidated variable interest entities without recourse to China Finance Online Co. Limited $7,127 and $5,520 as of March 31,2014 and December 31,2013, respectively) |
12,948 |
12,573 |
| Deferred tax liability, current(including deferred tax liability, current of the consolidated variable interest entities without recourse to China Finance Online Co. Limited $283 and $325 as of March 31,2014 and December 31,2013, respectively) |
283 |
325 |
| Income taxes payable (including income taxes payable of the consolidated variable interest entities without recourse to China Finance Online Co. Limited $79 and $414 as of March 31,2014 and December 31,2013, respectively) |
111 |
459 |
| Total current liabilities |
41,865 |
39,202 |
| Deferred tax liability, non-current (including deferred tax liabilities, non-current of the consolidated variable interest entities without recourse to China Finance Online Co. Limited $1,827 and $1,886 as of March 31,2014 and December 31,2013, respectively) |
1,827 |
1,886 |
| Deferred revenue, non-current (including deferred revenue, non-current of the consolidated variable interest entities without recourse to China Finance Online Co. Limited $559 and $633 as of March 31,2014 and December 31,2013, respectively) |
1,776 |
1,986 |
| Total liabilities |
45,468 |
43,074 |
| Noncontrolling interests |
16,263 |
14,646 |
| Total China Finance Online Co. Limited Shareholders' equity |
73,874 |
75,772 |
| Total liabilities and equity |
135,605 |
133,492 |
| China Finance Online Co. Limited |
|||
| UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME |
|||
| (in thousands of U.S. dollars, except share and ADS related data)
|
|||
| Three months ended |
|||
| Mar. 31, 2014 |
Mar. 31, 2013 |
Dec. 31, 2013 |
|
| Net revenues |
23,179 |
5,504 |
26,481 |
| Cost of revenues |
(5,388) |
(1,867) |
(4,476) |
| Gross profit |
17,791 |
3,637 |
22,005 |
| Operating expenses |
|||
| General and administrative(includes share-based |
(4,039) |
(2,898) |
(5,259) |
| Sales and marketing (includes share-based |
(12,088) |
(3,121) |
(15,519) |
| Product development (includes share-based |
(2,556) |
(2,210) |
(2,228) |
| Total operating expenses |
(18,683) |
(8,229) |
(23,006) |
| Government subsidies |
248 |
- |
- |
| Loss from operations |
(644) |
(4,592) |
(1,001) |
| Interest income |
828 |
401 |
424 |
| Interest expense |
(2) |
(37) |
(1) |
| Investment gain (loss), net |
(35) |
119 |
2,855 |
| Other income (loss), net |
16 |
(129) |
337 |
| Exchange gain (loss), net |
(153) |
59 |
148 |
| Income (loss) before income tax benefits (expenses) |
10 |
(4,179) |
2,762 |
| Income tax benefits (expenses) |
(445) |
(468) |
377 |
| Net income (loss) |
(435) |
(4,647) |
3,139 |
| Less: Net income (loss) attributable to the |
1,551 |
(331) |
1,282 |
| Net income (loss) attributable to China Finance |
(1,986) |
(4,316) |
1,857 |
| Net income (loss) |
(435) |
(4,647) |
3,139 |
| Changes in foreign currency translation |
(453) |
57 |
385 |
| Net unrealized gain on available-for-sale |
- |
- |
(11) |
| Other comprehensive income (loss), net of tax |
(453) |
57 |
374 |
| Comprehensive income (loss) |
(888) |
(4,590) |
3,513 |
| Less: comprehensive income (loss) attributable |
1,551 |
(331) |
1,282 |
| Comprehensive income (loss) attributable to China |
(2,439) |
(4,259) |
2,231 |
| Net income (loss) per share attributable to China |
|||
| Basic |
(0.02) |
(0.04) |
0.02 |
| Diluted |
(0.02) |
(0.04) |
0.02 |
| Income (loss) per ADS |
|||
| Basic |
(0.09) |
(0.20) |
0.09 |
| Diluted |
(0.09) |
(0.20) |
0.08 |
| Weighted average ordinary shares |
|||
| Basic |
109,197,765 |
109,004,768 |
109,060,617 |
| Diluted |
109,197,765 |
109,004,768 |
118,921,336 |
| Weighted average ADSs |
|||
| Basic |
21,839,553 |
21,800,954 |
21,812,123 |
| Diluted |
21,839,553 |
21,800,954 |
23,784,267 |
SOURCE China Finance Online Co., Ltd.
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