Focus Media Reports Fourth Quarter and Full Year 2009 Results
SHANGHAI, March 16 /PRNewswire-Asia/ -- Focus Media Holding Limited (Nasdaq: FMCN), China's largest digital media group, today announced its unaudited financial results for the fourth quarter and full year ended December 31, 2009.
Basis of Presentation
The results of the internet business have been restated in this earning release to reflect the disposal of certain subsidiaries which have been classified as discontinued operations for all periods presented.
Highlights for Fourth Quarter 2009: -- Total net revenue for fourth quarter 2009 was $144.3 million, of which the aggregate net revenue for the LCD display network, in-store network and poster frame network was $98.3 million, surpassing the Company's previous guidance of $92 million and the aggregate net revenue for the movie theatre and outdoor traditional billboard network and Internet advertising services was $46.0 million, surpassing the Company's previous guidance of $39 million. -- GAAP net loss attributable to Focus Media was $52.5 million or a loss of $0.39 per fully diluted ADS, compared to net loss attributable to Focus Media of $127.6 million for the third quarter of 2009 or a loss of $0.99 per fully diluted ADS and net loss attributable to Focus Media of $802.5 million for the fourth quarter of 2008 or a loss of $6.24 per fully diluted ADS. -- Non-GAAP net income attributable to Focus Media for the fourth quarter of 2009 was $34.7 million or an income of $0.26 per ADS, compared to non-GAAP net income attributable to Focus Media of $7.9 million for the third quarter of 2009 or an income of $0.06 per ADS and non-GAAP net income of $50.0 million for the fourth quarter of 2008 or an income of $0.39 per ADS. -- Net cashflow from operations in the fourth quarter of 2009 was $72.3 million, an increase of 96% from $ 36.8 million in the third quarter of 2009. Highlights for Full Year 2009: -- Total net revenue for full year 2009 was $505.0 million, declining 21% from $642.3 million for full year 2008, substantially due to unfavorable macro-economic condition and strategic reorganization related to several lines of our businesses. The aggregate net revenue for the LCD display network, in-store network and poster frame network for full year 2009 was $338.1 million, declining 25% from $450.6 million for full year 2008. The aggregate net revenue for the movie theatre and outdoor traditional billboard network and Internet advertising services was $166.9 million, declining 13% from $191.7 million for full year 2008. -- GAAP net loss attributable to Focus Media was $208.8 million for full year 2009 or a loss of $1.61 per fully diluted ADS, compared to net loss attributable to Focus Media of $770.7 million for full year 2008, or a loss of $5.98 per fully diluted ADS. -- Non-GAAP net income attributable to Focus Media for full year 2009 was $89.4 million or an income of $0.69 per ADS, compared to non-GAAP net income attributable to Focus Media of $221.9 million for full year 2008 or an income of $1.72 per ADS.
Highlights for Balance Sheet and Cash Flow Results of Fourth Quarter and Full Year 2009:
-- Cash and cash equivalents was $568.2 million as of December 31, 2009, including the subscription price of $142.4 million received from Chairman and CEO Mr. Jason Jiang for purchase of 75,000,000 newly issued shares in our Company, and representing an increase of 48% from $383.1 million as of September 30, 2009. -- Net accounts receivable for the LCD display network, in-store network and poster frame network was $96.1 million as of December 31, 2009, a decline of 16% from $114.3 million as of September 30, 2009. Days sales outstanding on a rolling basis was 88 days in the fourth quarter of 2009 versus 118 days for the third quarter of 2009. -- Net accounts receivable for the movie theatre and outdoor traditional billboard network and Internet advertising services was $76.6 million as of December 31, 2009. -- Net cashflow from operations in full year 2009 was $160.7 million, as compared to $168.4 million in full year 2008. -- Capital expenditures were $1.0 million and $10.7 million for the fourth quarter of 2009 and full year 2009 respectively. -- Earn-out payments related to historical acquisitions paid in the fourth quarter of 2009 were $19.3 million, of which $10.7 million was attributable to the poster frame network and LCD display network and $8.6 million was attributable to the traditional outdoor billboard and internet businesses. For full year 2009, total earn-out payments related to historical acquisitions paid were $92.4 million, of which $62.3 million was attributable to the poster frame network and LCD display network and $30.1 million was attributable to traditional outdoor billboard and internet businesses.
Jason Jiang, Chairman and CEO of Focus Media said, "After going through a year of restructuring, Focus Media has substantially resolved its past problems and re-entered on to a path of sustainable growth. At the same time, the Chinese advertising market recovery has presented us with very attractive development opportunities. We believe we are well positioned to achieve meaningful cash flow and earnings growth in 2010. Starting in 2010, Focus Media will focus on dedicating our resources to developing networks in lower tier cities for our LCD, Poster frame as well as in-store networks. We believe the investment we are making in lower tier cities will help to lay the foundation of growth for Focus Media over the next three to five years. Separately, we will offer incentives to motivate internet and outdoor billboard management so as to promote sustainable long term development of the respective business segments."
Kit Low, CFO added, "Our fourth quarter 2009 results demonstrate the robust execution capability of the Focus Media team as well as the significant positive operating leverage of the Focus Media business model. In the fourth quarter 2009 the Company generated a free cash flow of $43.0 million on $34.7 million of non-GAAP net income with operating cashflow of $72.3 million, versus an investing cashflow of $29.3 million. We expect this trend of positive cashflow generation to continue as the Company leverages the 2010 uptrend of the Chinese advertising market."
Fourth Quarter 2009 financial results
Advertising net revenue from the LCD display network was $64.1 million for the fourth quarter of 2009, an increase of 14% from $56.0 million for the third quarter of 2009 and an increase of 8% from $59.3 million for the fourth quarter of 2008.
Advertising net revenue from the poster frame network was $26.8 million for the fourth quarter of 2009, an increase of 21% from $22.1 million for the third quarter of 2009 but a decline of 32% from $39.2 million for the fourth quarter of 2008.
Advertising net revenue from the in-store network was $7.4 million for the fourth quarter of 2009, slightly decreasing from $7.6 million for the third quarter of 2009 and decreasing by 22% from $9.5 million for the fourth quarter of 2008.
As of December 31, 2009, the total installed base of LCD displays in our LCD display network was 131,006 nationwide, including 125,595 displays through our directly owned networks, and 5,411 displays through our regional distributors, as compared to 130,890 as of September 30, 2009. The total number of non-digital frames available for sale in our poster frame network was 225,104 as of December 31, 2009, as compared to 225,762 as of September 30, 2009. In addition, as of December 31, 2009, we had 35,972 digital frames installed in our poster frame network, as compared to 36,539 as of September 30, 2009. The total number of displays installed in our in-store network was 44,517 as of December 31, 2009, as compared to 45,195 as of September 30, 2009.
Advertising net revenue from the movie theater and traditional outdoor billboard network was $12.6 million for the fourth quarter of 2009, relatively constant compared to $12.5 million for the third quarter of 2009 and a 42% decrease compared to $21.6 million for the fourth quarter of 2008 due to restructuring in traditional outdoor billboard network in the third quarter of 2009.
Internet advertising service net revenue was $33.4 million in the fourth quarter of 2009, increased by 18% as compared to $28.2 million for the third quarter of 2009, and 25% as compared to $26.7 million for the fourth quarter of 2008.
Non-GAAP gross profit for the LCD display network for the fourth quarter of 2009 was $50.6 million, representing an increase of 50% from $33.7 million for the third quarter of 2009 and an increase of 15% from $44.0 million for the fourth quarter of 2008.
Non-GAAP gross profit for the poster frame network for the fourth quarter of 2009 was $10.8 million, representing a significant increase over $1.7 million for the third quarter of 2009 but a decrease of 55% from $23.8 million for the fourth quarter of 2008.
Non-GAAP gross profit for the in-store network for the fourth quarter of 2009 was $5.0 million, compared to non-GAAP gross loss of $3.3 million for the third quarter of 2009 primarily due to the Company's settling of a rental dispute in the fourth quarter and releasing the corresponding rental liabilities accrued in the previous periods and compared to non-GAAP gross profit of $0.5 million for the fourth quarter of 2008 as the Company managed to lower rental costs in the business.
Non-GAAP gross profit for the movie theater and traditional outdoor billboard networks for the fourth quarter of 2009 was $2.5 million, representing a 32% decline from $3.7 million for the third quarter of 2009 and a 66% decline from $7.3 million for the fourth quarter of 2008, mainly due to the restructuring in the traditional outdoor billboard network as one subsidiary was disposed in late third quarter of 2009.
Non-GAAP gross profit from our Internet advertising services for the fourth quarter of 2009 was $6.0 million, a slight increase from $5.6 million for the third quarter of 2009 and from $5.3 million for the fourth quarter of 2008.
Non-GAAP operating expense for the fourth quarter of 2009 was $33.9 million, increasing by 14% from $29.8 million for the third quarter of 2009 and 7% from $31.8 million for the fourth quarter of 2008.
Business Outlook for First Quarter 2010
The Company provides the following guidance with respect to the first quarter ending March 31, 2010:
Net revenues for LCD display networks, in-store networks and poster frame networks are expected to be in the range of $78-80 million, the mid-point of which would represent year-on-year growth of 23%. Net revenues for the movie theatre and traditional outdoor billboard and internet advertising services are expected to be in the range of $37-39 million. Company non-GAAP net income is expected to be in the range of $20-23 million.
Based on the existing business outlook, the Company expects earn-out payment remaining in 2010 to be no more than $40 million.
Announced Share Repurchase Program
On Feb 2, 2010, Focus Media announced that its board of directors has approved a share repurchase program up to $200 million. The Company expects to implement this share repurchase program over the course of the next 12 months post announcement, in a manner consistent with market conditions and the interest of the shareholders and in compliance with the Company's securities trading policy. Focus Media's board of directors will review the share repurchase program periodically, and may authorize adjustment of its terms and size accordingly. Focus Media plans to fund repurchases made under this program from its available cash balance.
Management Buy-Out in Internet Division
Certain Allyes employees and management and directors and certain members of the Company's management and directors recently entered into a definitive agreement with the Company and Allyes in January 2010 to buy-out an aggregate 38% interest in Allyes from the Company. Pursuant to the terms of the agreements, the purchasing Allyes and Company management members paid an aggregate $13.3 million for a 38% interest of Allyes, when taking into account offshore and onshore transactions. The purchase price to management took into account various factors including the disposition of various smaller Internet divisions during the fourth quarter of 2009 and the results of an independent third-party valuation report, however the Company is currently assessing the accounting implications of the transaction. The transaction was approved by all independent directors on the board. This transaction was part of initiatives being taken by the Company to incentivize management to enhance the future business model of Allyes and thereby to seek long term sustainable growth for the company and investors.
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, non-GAAP operating expenses, non-GAAP operating profit (loss) and non-GAAP net income, all excluding share-based compensation expenses, amortization of acquired intangible assets, loss from disposal of previously acquired subsidiaries, impairment charges of certain assets, including acquired intangible assets, goodwill, impairment and termination charges related to ceasing expansion of digital poster frame networks and boat-based advertising platform, write-off of receivables from ex-shareholders of disposed business and one-off charges from expensing IPO expenditures as a result of termination of IPO process of Allyes. 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 the same consistent method from quarter to quarter. 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 percentages, share and per-share data) (Unaudited) Three months ended December 31, 2009 GAAP (1) (2) (3) Gross Profit LCD display network 49,498 285 839 -- Poster Frame network 9,148 -- 1,646 -- In-store network 5,001 -- -- -- Internet advertising 5,778 -- 207 -- Movie Theater & Outdoor Billboard network 2,046 -- 443 -- Total Gross Profit 71,471 285 3,135 -- Operating Expense 86,258 (34,779) (1,254) -- Operating (loss) profit (14,787) 35,064 4,389 -- Net income (loss) attributable to Focus Media (52,499) 35,064 4,672 31,103 (4) (5) (6) Non- GAAP Gross Profit LCD display network -- -- -- 50,622 Poster Frame network -- -- -- 10,794 In-store network -- -- -- 5,001 Internet advertising -- -- -- 5,985 Movie Theater & Outdoor Billboard network -- -- -- 2,489 Total Gross Profit -- -- -- 74,891 Operating Expense (14,027) (4,351) 2,067 33,914 Operating (loss) profit 14,027 4,351 (2,067) 40,977 Net income (loss) attributable to Focus Media 14,027 4,351 (2,067) 34,651 (1). Share-based compensation, of which $ 14.6 million was attributable to LCD display network, poster frame network and in-store network and $20.5 million was attributable to cancellation of stock options in internet business. (2). Amortization of acquired intangible assets. (3). Loss from impairment and disposal of previously acquired subsidiaries, all attributable to internet business. (4). Impairment charges of goodwill as a result of earn-out payments in poster frame business. (5). Write-off of receivables from ex-shareholders of disposed business. (6). Settlement of disputed liabilities in previously disposed wireless business. Three months ended September 30, 2009 GAAP (1) (2) Gross Profit LCD display network 17,177 306 3,607 Poster Frame network (30,420) -- 5,131 In-store network (3,844) -- -- Internet advertising (2,964) -- 393 Movie Theater & Outdoor Billboard network 3,001 -- 663 Total Gross Profit (17,050) 306 9,794 Operating Expense 105,234 (8,467) (2,969) Operating profit (loss) (122,284) 8,773 12,763 Net income (loss) attributable to Focus Media (127,598) 8,773 13,865 (3) (4) (5) Non- GAAP Gross Profit LCD display network -- 3,169 9,462 33,721 Poster Frame network -- -- 26,983 1,694 In-store network -- -- 516 (3,328) Internet advertising -- 8,185 -- 5,614 Movie Theater & Outdoor Billboard network -- -- -- 3,664 Total Gross Profit -- 11,354 36,961 41,365 Operating Expense (16,649) (45,456) (1,872) 29,821 Operating profit (loss) 16,649 56,810 38,833 11,544 Net income (loss) attributable to Focus Media 25,944 57,300 29,593 7,877 (1). Share-based compensation. (2). Amortization of acquired intangible assets. (3). Loss from disposal of previously acquired subsidiaries, of which loss from disposal of subsidiaries was $3.7 million, loss from partial disposal of equity interests in subsidiaries was $14.9 million and loss from impairment of certain other assets was $7.3 million. (4). Impairment charges of certain assets, including acquired intangible assets and goodwill. (5). Impairment and termination charges related to ceasing expansion of digital poster frame networks and boat-based advertising platform. Three months ended December 31, 2008 GAAP (1) (2) (3) Gross Profit LCD display network 27,217 314 865 -- Poster Frame network 21,572 -- 2,257 -- In-store network (3,397) -- 897 (248) Internet advertising 4,483 -- 814 -- Movie Theater & Outdoor Billboard network 6,339 -- 976 -- `Total Gross Profit 56,214 314 5,809 (248) Operating Expense 844,395 (12,330) (3,333) (193,822) Operating profit (loss) (788,181) 12,644 9,142 193,574 Net income (loss) attributable to Focus Media (802,490) 12,644 10,611 208,238 (4) (5) (6) Non-GAAP Gross Profit LCD display network -- 15,574 -- 43,970 Poster Frame network -- -- -- 23,829 In-store network -- 3,290 -- 542 Internet advertising -- -- -- 5,297 Movie Theater & Outdoor Billboard network -- -- -- 7,315 `Total Gross Profit -- 18,864 -- 80,953 Operating Expense (600,878) -- (2,200) 31,832 Operating profit (loss) 600,878 18,864 2,200 49,121 Net income (loss) attributable to Focus Media 599,965 18,864 2,200 50,032 (1). Share-based compensation. (2). Amortization of acquired intangible assets. (3). Loss from disposal of previously acquired subsidiaries. (4). Impairment charges of certain assets, including acquired intangible assets and goodwill. (5). Impairment charges of fixed assets. (6). Write-off of receivables from ex-shareholders of disposed business. Twelve months ended December 31, 2009 GAAP (1) (2) (3) (4) Gross Profit LCD display network 133,042 1,504 4,446 -- 3,168 Poster Frame network 3,561 -- 6,778 -- -- In-store network 6,176 -- 15 -- -- Internet advertising 9,150 -- 2,239 -- 8,746 Movie Theater & Outdoor Billboard network 13,972 -- 2,945 -- -- Total Gross Profit 165,901 1,504 16,423 -- 11,914 Operating Expense 320,551 (61,153) (6,563) (17,861) (94,775) Operating profit (loss) (154,650) 62,657 22,986 17,861 106,689 Net income (loss) attributable to Focus Media (208,762) 62,657 27,279 58,259 113,046 (5) (6) (7) (8) Non-GAAP Gross Profit LCD display network 9,462 -- -- -- 151,622 Poster Frame network 26,983 -- -- -- 37,322 In-store network 516 -- -- -- 6,707 Internet advertising -- -- -- -- 20,135 Movie Theater & Outdoor Billboard network -- -- -- -- 16,917 Total Gross Profit 36,961 -- -- -- 232,703 Operating Expense (1,872) (6,879) (2,466) 2,067 131,049 Operating profit (loss) 38,833 6,879 2,466 (2,067) 101,654 Net income (loss) attributable to Focus Media 29,593 6,879 2,466 (2,067) 89,350 (1). Share-based compensation, of which $34.7 million was attributable to LCD display network, poster frame network and in-store network and $28.0 million was attributable to internet division. (2). Amortization of acquired intangible assets. (3). Loss from disposal of previously acquired subsidiaries. (4). Impairment charges of certain assets, including acquired intangible assets and goodwill. (5). Impairment charges of fixed assets. (6). Write-off of receivables from ex-shareholders of disposed business. (7). One-off charges from expensing IPO expenditures as a result of termination of IPO process of Allyes. (8). Settlement of disputed liabilities in previously disposed wireless business Twelve months ended December 31, 2008 GAAP (1) (2) (3) Gross Profit LCD display network 163,537 1,476 3,711 -- Poster Frame network 86,935 -- 9,571 -- In-store network (1,115) -- 3,533 (248) Internet advertising 25,510 -- 3,482 -- Movie Theater & Outdoor Billboard network 20,235 -- 3,845 -- Total Gross Profit 295,102 1,476 24,142 (248) Operating Expense 964,185 (41,023) (11,053) (193,822) Operating profit (loss) (669,083) 42,499 35,195 193,574 Net income (loss) attributable to Focus Media (770,688) 42,499 40,980 288,121 (4) (5) (6) Non-GAAP Gross Profit LCD display network -- 15,574 -- 184,298 Poster Frame network -- -- -- 96,506 In-store network -- 3,290 -- 5,460 Internet advertising -- -- -- 28,992 Movie Theater & Outdoor Billboard network -- -- -- 24,080 Total Gross Profit -- 18,864 -- 339,336 Operating Expense (600,878) -- (2,200) 115,209 Operating profit (loss) 600,878 18,864 2,200 224,127 Net income (loss) attributable to Focus Media 599,965 18,864 2,200 221,941 (1). Share-based compensation. (2). Amortization of acquired intangible assets. (3). Loss from disposal of previously acquired subsidiaries. (4). Impairment charges of certain assets, including acquired intangible assets and goodwill. (5). Impairment charges of fixed assets. (6). Write-off of receivables from ex-shareholders of disposed business.
CONFERENCE CALL
The Company will host a conference call to discuss the fourth quarter and full year 2009 results at 9:00 p.m. U.S. Eastern Time on March 16, 2010 (6:00 p.m. U.S. Pacific Time on March 16, 2010 and 9:00 a.m. Beijing/Hong Kong Time on March 17, 2010). The dial-in details for the live conference call are set forth below: U.S. Toll Free Number +1.800.510.0219, Hong Kong dial-in number +852.3002.1672, International dial-in number +1.617.614.3451; Pass code: 27499071.
A replay of the call will be available from March 16, 2010 12:00 pm until March 24, 2010 (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 19117078. 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 (Nasdaq: FMCN) is China's leading multi- platform digital media company, operating the largest out-of-home advertising network in China using audiovisual digital displays, based on the number of locations and number of flat-panel television displays in our network. Through Focus Media's multi-platform digital advertising network, the company reaches urban consumers at strategic locations and point-of-interests over a number of media formats, including audiovisual television displays in buildings and stores, advertising poster frames and other new and innovative media, such as outdoor light-emitting diode or LED digital billboard and Internet advertising platforms. As of December 31, 2009, Focus Media's digital out-of-home advertising network had approximately 131,000 LCD displays in its LCD display network and approximately 261,000 advertising in-elevator poster and digital frames, installed in over 90 cities throughout China. For more information about Focus Media, please visit our website at http://ir.focusmedia.cn .
Focus Media Holding Limited UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (U.S. Dollars in Thousands) 2009-12-31 2008-12-31 ASSETS Current assets Cash and cash equivalents 568,159 142,434 Held-to-maturity investment 29,290 -- Accounts receivable, net 172,752 135,270 Prepaid expenses and other current assets 24,506 15,117 Deposit paid for acquisition of subsidiaries 4,860 29,676 Rental deposits 29,640 10,090 Other current assets 4,579 7,938 Assets held-for-sale, current -- 467,046 Total current assets 833,786 807,571 Rental deposits, non-current 1,570 133 Equipment, net 77,661 6,292 Acquired intangible assets, net 51,777 77,713 Goodwill 410,369 30,700 Other long term assets 18,279 10,736 Assets held-for-sale, non-current -- 599,149 Total assets 1,393,442 1,532,294 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Accounts payable 53,340 67,905 Accrued expenses and other current liabilities 101,870 61,911 Income taxes payable 27,017 12,622 Amount due to related parties 2,231 15,687 Liabilities held-for-sale, current -- 160,739 Deferred tax liabilities 12,077 -- Total current liabilities 196,535 318,864 Liabilities held-for-sale, non current -- 1,959 Deferred tax liabilities 5,435 11,581 Total liabilities 201,970 332,404 Shareholders' equity Ordinary shares 36 32 Additional paid in capital 1,868,172 1,659,833 Accumulated deficit (742,731) (533,969) Accumulated other comprehensive income 64,167 71,888 Total shareholders' equity 1,189,644 1,197,784 Noncontrolling interests 1,828 2,106 Total equity 1,191,472 1,199,890 Total liabilities and equity 1,393,442 1,532,294 Focus Media Holding Limited UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS (U.S. Dollar in thousands, except Earning per ADS and ADS data) Three months ended 2009-12-31 2009-09-30 2008-12-31 Revenues LCD display network 70,660 60,509 65,908 In-store network 8,173 8,450 10,503 Poster Frame network 29,310 24,155 43,021 Movie Theater & Outdoor Billboard network 12,866 12,802 22,380 Internet advertising 34,863 29,437 28,311 Total gross revenues 155,872 135,353 170,123 Less: Sales taxes 11,524 8,912 13,745 Total net revenue (note) 144,348 126,441 156,378 Cost of revenues LCD display network 14,623 38,830 32,036 In-store network 2,388 11,490 12,927 Poster Frame network 17,649 52,550 17,655 Movie Theater & Outdoor Billboard network 10,550 9,486 15,307 Internet advertising 27,667 31,135 22,239 Total cost of revenues 72,877 143,491 100,164 Gross profit (loss) 71,471 (17,050) 56,214 Operating expenses General and administrative 45,226 19,690 30,013 Selling and marketing 28,416 32,948 27,595 Impairment loss 14,027 37,232 596,069 Other operating expenses (income), net (1,411) 15,364 190,718 Total operating expenses 86,258 105,234 844,395 Operating loss (14,787) (122,284) (788,181) Interest income 1,382 1,012 2,303 Loss from continuing operations before income taxes (13,405) (121,272) (785,878) Provision for income taxes 5,336 (4,833) 7,066 Net loss from continuing operations (18,741) (116,439) (792,944) Net loss from discontinued operations, net of tax (33,434) (8,201) (11,792) Net loss (52,175) (124,640) (804,736) Less: Net income(loss) attributable to noncontrolling interests 324 2,958 (2,246) Net loss attributable to Focus Media (52,499) (127,598) (802,490) Loss per ADS from continuing operations -basic (0.14) (0.90) (6.17) -diluted (0.14) (0.90) (6.17) Loss per ADS from discontinuing operations -basic (0.25) (0.06) (0.09) -diluted (0.25) (0.06) (0.09) Loss per ADS -basic (0.39) (0.99) (6.24) -diluted (0.39) (0.99) (6.24) Shares used in calculating basic loss per ADS 134,562,342 129,308,337 128,607,842 Shares used in calculating diluted loss per ADS 134,562,342 129,308,337 128,607,842 Year ended 2009-12-31 2008-12-31 Revenues LCD display network 229,424 267,778 In-store network 33,538 67,038 Poster Frame network 108,526 160,613 Movie Theater & Outdoor Billboard network 60,544 80,023 Internet advertising 113,183 120,702 Total gross revenues 545,215 696,154 Less: Sales taxes 40,180 53,818 Total net revenue (note) 505,035 642,336 Cost of revenues LCD display network 75,757 79,589 In-store network 24,170 61,834 Poster Frame network 95,401 59,815 Movie Theater & Outdoor Billboard network 45,085 56,944 Internet advertising 98,721 89,052 Total cost of revenues 339,134 347,234 Gross profit (loss) 165,901 295,102 Operating expenses General and administrative 116,216 90,194 Selling and marketing 107,184 95,400 Impairment loss 86,304 596,069 Other operating expenses (income), net 10,847 182,522 Total operating expenses 320,551 964,185 Operating loss (154,650) (669,083) Interest income 5,261 7,528 Loss from continuing operations before income taxes (149,389) (661,555) Provision for income taxes 9,335 26,785 Net loss from continuing operations (158,724) (688,340) Net loss from discontinued operations, net of tax (46,513) (82,498) Net loss (205,237) (770,838) Less: Net income(loss) attributable to noncontrolling interests 3,525 (150) Net loss attributable to Focus Media (208,762) (770,688) Loss per ADS from continuing operations -basic (1.22) (5.34) -diluted (1.22) (5.34) Loss per ADS from discontinuing operations -basic (0.36) (0.64) -diluted (0.36) (0.64) Loss per ADS -basic (1.61) (5.98) -diluted (1.61) (5.98) Shares used in calculating basic loss per ADS 129,735,639 128,880,565 Shares used in calculating diluted loss per ADS 129,735,639 128,880,565 Note: Details of net revenues by segment are as follows (U.S. Dollars in thousands): Three months ended 2009-12-31 2009-09-30 2008-12-31 Gross revenues LCD display network 70,660 60,509 65,908 In-store network 8,173 8,450 10,503 Poster Frame network 29,310 24,155 43,021 Movie Theater & Outdoor Billboard network 12,866 12,802 22,380 Internet advertising 34,863 29,437 28,311 Total gross revenues 155,872 135,353 170,123 Less: Sales taxes LCD display network 6,539 4,502 6,655 In-store network 784 804 973 Poster Frame network 2,513 2,025 3,794 Movie Theater & Outdoor Billboard network 270 315 734 Internet advertising 1,418 1,266 1,589 Total sales tax 11,524 8,912 13,745 Net revenues LCD display network 64,121 56,007 59,253 In-store network 7,389 7,646 9,530 Poster Frame network 26,797 22,130 39,227 Movie Theater & Outdoor Billboard network 12,596 12,487 21,646 Internet advertising 33,445 28,171 26,722 Total net revenues 144,348 126,441 156,378 Year ended 2009-12-31 2008-12-31 Gross revenues LCD display network 229,424 267,778 In-store network 33,538 67,038 Poster Frame network 108,526 160,613 Movie Theater & Outdoor Billboard network 60,544 80,023 Internet advertising 113,183 120,702 Total gross revenues 545,215 696,154 Less: Sales taxes LCD display network 20,625 24,652 In-store network 3,192 6,319 Poster Frame network 9,564 13,863 Movie Theater & Outdoor Billboard network 1,487 2,844 Internet advertising 5,312 6,140 Total sales tax 40,180 53,818 Net revenues LCD display network 208,799 243,126 In-store network 30,346 60,719 Poster Frame network 98,962 146,750 Movie Theater & Outdoor Billboard network 59,057 77,179 Internet advertising 107,871 114,562 Total net revenues 505,035 642,336 FOCUS MEDIA HOLDING LIMITED UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASHFLOWS (U.S. Dollar in thousands) Three months ended Year ended 2009- 2008- 2009- 2008- 12-31 12-31 12-31 12-31 Operating activities: Net loss (52,175) (804,736) (205,237) (770,838) Adjustments to reconcile net loss to net cash provided by operating activities: Bad debt provision 5,140 8,597 31,262 15,767 Share-based compensation 35,064 12,768 62,528 42,615 Depreciation and amortization 7,933 9,623 35,450 31,337 Amortization of acquired intangible assets 4,672 10,611 27,279 40,516 Loss and impairment on disposal of equity interest of subsidiaries and certain other assets 39,110 189,879 64,931 282,407 Settlement of disputed liabilities (2,067) -- (2,067) -- Impairment charges for goodwill, acquired intangible assets and fixed assets 14,027 634,420 153,369 619,602 Loss on disposal of fixed assets 161 304 1,346 698 Net changes in current assets and current liabilities, net of effects of acquisitions 20,395 22,102 (8,138) (93,663) Net cash provided by operating activities 72,260 83,568 160,723 168,441 Investing activities: Purchase of equipment and other long term assets (987) (7,106) (10,655) (72,876) Earn-out payment paid to acquire subsidiaries (19,301) (14,775) (92,412) (133,348) Investment in a joint venture -- -- -- (2,970) Acquisition of an intangible assets -- -- -- (1,767) Deposits (paid)/refunded in connection with acquisition of subsidiaries 330 -- 330 (14,270) Disposal of subsidiaries (9,328) -- (27,316) (11,694) Sales of equity securities and bank notes -- 7,365 865 187,243 Purchase of equity securities and bank notes -- -- (29,257) (96,113) Proceeds received from disposal of fixed assets -- -- 196 -- Net cash used in investing activities (29,286) (14,516) (158,249) (145,795) Financing activities: Proceeds from short-term bank loans -- -- -- 370 Repayment of short term bank loans -- -- -- (370) Repayment of short term other loans -- -- -- (30,041) Capital injection from minority shareholders -- -- -- 214 Proceeds from issuance of ordinary shares, net of issuance costs 142,437 1,535 144,499 10,711 Repurchase of ordinary shares -- (17,502) -- (47,500) Net cash provided by/(used in) financing activities 142,437 (15,967) 144,499 (66,616) Effect of exchange rate changes (359) (3,342) (1,729) 16,469 Net increase (decrease) in cash and cash equivalents 185,052 49,743 145,244 (27,501) Cash and cash equivalents, beginning of period / year 383,107 373,172 422,915 450,416 Cash and cash equivalents, end of period / year 568,159 422,915 568,159 422,915 Supplemental disclosure of cash flow information: Income taxes paid 2,787 8,728 12,965 23,712 Supplemental disclosure of non-cash investing activity: Acquisition of subsidiaries: Accounts payable 20,326 60,501 20,326 60,501
SOURCE Focus Media Holding Limited
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