VisionChina Media Inc. Announces Second Quarter 2015 Results
Conference call scheduled for 8:00 p.m. Eastern today
BEIJING, Aug. 17, 2015 /PRNewswire/ -- VisionChina Media Inc. ("VisionChina Media" or the "Company") (Nasdaq: VISN), China's largest out-of-home digital television advertising network on mass transportation systems and the leading provider of urban mass transit Wi-Fi, today announced its unaudited financial results for the second quarter ended June 30, 2015.
Second Quarter 2015 Highlights
Total revenues increased 51.2% sequentially to $23.2 million.
Gross margin increased to 22.6%, compared with negative 11.9% in the first quarter of 2015.
Operating profit increased to $0.5 million, compared with an operating loss of $7.3 million in the first quarter of 2015.
Net loss attributable to VisionChina Media shareholders ("GAAP net loss") in the second quarter of 2015 was $0.2 million, compared with a GAAP net loss of $8.5 million in the first quarter of 2015.
Non-GAAP net loss attributable to VisionChina Media shareholders[1] was $0.1 million, compared with a non-GAAP net loss of $8.4 million in the first quarter of 2015.
Basic and diluted net loss per American depositary share ("ADS") attributable to VisionChina Media shareholders in the second quarter of 2015 were $0.03. Each ADS represents 20 ordinary shares.
The Company had cash and cash equivalents of $21.1 million as of June 30, 2015. Net cash provided by operating activities was $2.8 million in the second quarter of 2015.
As of June 30, 2015, the Company's network covered 19 cities secured either by exclusive agency agreements or joint venture contracts, and included 98,504 digital displays on mass transit systems.
Total broadcasting hours in the Company's network reached 31,988 in the second quarter of 2015.
The Company sold an average of 9.35 advertising minutes per broadcasting hour in its network, compared with 6.11 advertising minutes in the last quarter.
As of the date of this press release, VisionChina Media, through its consolidated affiliate Qianhai Mobie, has secured exclusive concession rights for bus Wi-Fi services in 20 cities across China, including Shanghai, Shenzhen, Guangzhou and Tianjin, covering approximately 46,000 buses. Currently, Qianhai Mobile provides free Wi-Fi Internet services on approximately 25,000 buses under the brand name "VIFI," spanning over 12.5 million commuters, while providing over 5.5 million Internet service sessions per day.
"We are delighted to see the rebound of our advertising business, while building strong growth momentum for gross and net margin improvement in the second half of the year," said Mr. Limin Li, VisionChina Media's chairman and chief executive officer. "Our mass transit Wi-Fi business has established a leading position in the market. As we continue to make progress with our Baidu collaboration, we look forward to seizing the many monetization opportunities we have identified."
Mr. Stanley Wang, VisionChina Media's chief financial officer, added, "Our subway business outperformed our expectation through the success of a series of strategic initiatives. For the second half of the year, our primary focus is to improve the Company's operating efficiency by adjusting the cost structure for our advertising business."
Second Quarter 2015 Results
VisionChina Media's total revenues were $23.2 million in the second quarter of 2015, a decrease of 24.0% from $30.5 million in the second quarter of 2014, and an increase of 51.2% from $15.3 million in the first quarter of 2015.
Total broadcasting hours in the second quarter of 2015 were 31,988 hours, compared with 38,039 hours in the second quarter of 2014 and 31,635 hours in the first quarter of 2015.
In the second quarter of 2015, the Company sold a total of 299,204 advertising minutes in its network, compared with 329,037 advertising minutes in the second quarter of 2014, and 193,380 advertising minutes in the first quarter of 2015.
The Company sold an average of 9.35 advertising minutes per broadcasting hour in the second quarter of 2015, compared with 8.65 advertising minutes per broadcasting hour in the second quarter of 2014 and 6.11 advertising minutes per broadcasting hour in the first quarter of 2015.
During the second quarter of 2015, 245 advertisers purchased advertising time on the Company's advertising network, either directly or through advertising agents, compared with 336 advertisers in the second quarter of 2014, and 218 advertisers in the first quarter of 2015.
Media cost, which is the most significant component of advertising service cost, was $13.3 million in the second quarter of 2015, a decrease of 26.1% from $18.0 million in the second quarter of 2014 and a decrease of 9.5% from $14.7 million in the first quarter of 2015.
Gross profit in the second quarter of 2015 was $5.2 million, compared with gross profit of $8.2 million in the second quarter of 2014 and gross loss of $1.8 million in the first quarter of 2015.
Advertising service gross margin was 23.7% in the second quarter of 2015, compared with 26.9% in the second quarter of 2014 and negative 8.7% in the first quarter of 2015.
Selling and marketing expenses were $3.4 million in the second quarter of 2015, a decrease of 9.8% from $3.7 million in the second quarter of 2014, and a decrease of 12.8% from $3.9 million in the first quarter of 2015. Selling and marketing expenses accounted for 15.2% of the Company's advertising service revenue in the second quarter of 2015, compared with 12.3% in the second quarter of 2014 and 25.4% in the first quarter of 2015.
General and administrative expenses were $1.4 million in the second quarter of 2015, a decrease of 57.0% from $3.2 million in the second quarter of 2014, and a decrease of 16.2% from $1.7 million in the first quarter of 2015.
Research and development expenses were $0.3 million in the second quarter of 2015, representing costs related to the Company's Wi-Fi development activities.
Operating profit was $0.5 million in the second quarter of 2015, compared with operating profit of $2.0 million in the second quarter of 2014, and an operating loss of $7.3 million in the first quarter of 2015.
The Company recorded net interest expense of $1.5 million in the second quarter of 2015, compared with $1.0 million in the second quarter of 2014 and $1.4 million in the first quarter of 2015.
Net loss attributable to VisionChina Media shareholders (GAAP) was $0.2 million in the second quarter of 2015, compared with net income attributable to VisionChina Media shareholders (GAAP) of $2.4 million in the second quarter of 2014, and a net loss attributable to VisionChina Media shareholders (GAAP) of $8.5 million in the first quarter of 2015.
Basic and diluted net loss per ADS (GAAP) were $0.03 in the second quarter of 2015.
The Company's non-GAAP financial measure, net loss attributable to VisionChina Media shareholders excluding share-based compensation expenses, was $0.1 million in the second quarter of 2015, compared with a non-GAAP net income of $2.5 million in the second quarter of 2014, and a non-GAAP net loss of $8.4 million in the first quarter of 2015.
As of June 30, 2015, the Company had cash and cash equivalents of $21.1 million, compared with $19.5 million as of December 31, 2014. Net cash provided by operating activities was $2.8 million in the second quarter of 2015, compared to net cash used in operating activities of $9.2 million in the first quarter of 2015.
Depreciation and amortization was $0.4 million and capital expenditures were $1.8 million in the second quarter of 2015.
Business Outlook
For the third quarter of 2015, the Company expects to generate advertising service revenue in the range of $22.6 million to $23.2 million, representing quarter-over-quarter growth of 1.8% to 4.5%.
The guidance is based on an exchange rate of RMB6.2500 per $1.00.
The Company notes that its guidance is based on its current network that, as of the date of this press release, has been secured by exclusive agency agreements or joint venture contracts. If the number of cities in the Company's network expands or contracts, management's forecast could be affected.
Conference Call
VisionChina Media's management will hold an earnings conference call at 8:00 p.m. U.S. Eastern Time on August 17, 2015 (8:00 a.m. Beijing/Hong Kong Time on August 18, 2015).
| U.S. Toll Free: |
+1-888-346-8982 |
| Hong Kong Toll: |
+852-3018-4992 |
| International Toll: |
+1-412-902-4272 |
Participants should call in at least 5 minutes before the scheduled start time and ask to be connected to the "VisionChina Media call."
A replay of the conference call may be accessed by phone at the following numbers until August 24, 2015.
| U.S. Toll Free: |
+1-877-344-7529 |
| International Toll: |
+1-412-317-0088 |
| Replay Access Code: |
10070912 |
Additionally, a live and archived webcast of this conference call will be available on the Investor Relations section of VisionChina Media's website at http://www.visionchina.cn.
About VisionChina Media Inc.
VisionChina Media Inc. (Nasdaq: VISN) operates an out-of-home advertising network on mass transportation systems, including buses and subways. As of June 30, 2015, VisionChina Media's advertising network included approximately 98,504 digital television displays on mass transportation systems in 19 of China's economically prosperous cities, including Beijing, Guangzhou and Shenzhen, as secured by exclusive agency agreements or joint venture contract. VisionChina Media has the ability to deliver real-time, location-specific broadcasting, including news, stock quotes, weather and traffic reports, and other entertainment programming. For more information, please visit http://www.visionchina.cn.
Use of Non-GAAP Financial Measures
In addition to VisionChina Media's consolidated financial results under GAAP, the Company also provides non-GAAP financial measures, including net income/(loss) excluding non-cash share-based compensation expenses and contingent loss in connection with a litigation. The Company believes that the non-GAAP financial measures provide investors with another method for assessing VisionChina 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. The Company believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing the performance of VisionChina Media's liquidity and when planning and forecasting future periods. The Company computes its non-GAAP financial measures using the same consistent method from quarter to quarter.
Safe Harbor Statement
This press release contains forward-looking statements. These statements constitute "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and 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, the quotations from management in this press release contain forward-looking statements. Such statements involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Further information regarding these and other risks is included in the Company's filings with the U.S. Securities and Exchange Commission, including its registration statement on Form F-1 and its annual report on Form 20-F. 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.
For investor and media inquiries, please contact:
In China:
Ms. Shuning Yi
Investor Relations Department
VisionChina Media Inc.
Tel: +86-134-2090-9426
E-mail: [email protected]
In the United States:
The Piacente Group, Inc.
Mr. Don Markley
Tel: +1-212-481-2050
E-mail: [email protected]
| [1] |
Non-GAAP net income attributable to VisionChina Media shareholders is a non-GAAP financial measure, which is defined as net income attributable to VisionChina Media shareholders excluding share-based compensation expenses and contingent loss in connection with a litigation. |
| VISIONCHINA MEDIA INC. |
|||
| CONDENSED CONSOLIDATED BALANCE SHEETS |
|||
| (Amounts in thousand U.S. dollars) |
|||
| June 30, 2015 |
December 31, 2014 |
||
| (Unaudited) |
(Note 1) |
||
| ASSETS |
|||
| Current Assets: |
|||
| Cash and cash equivalents |
21,067 |
19,485 |
|
| Restricted cash |
1,314 |
488 |
|
| Accounts receivable, net |
38,056 |
36,927 |
|
| Amounts due from related parties |
1,820 |
2,467 |
|
| Prepaid expenses and other current assets |
19,544 |
20,157 |
|
| Total current assets |
81,801 |
79,524 |
|
| Non-current Assets: |
|||
| Fixed assets, net |
10,414 |
6,471 |
|
| Intangible assets |
334 |
360 |
|
| Investments under equity method |
8,282 |
7,585 |
|
| Other investments |
3,151 |
3,126 |
|
| Long-term prepayments and deposits |
3,991 |
4,101 |
|
| Restricted cash |
328 |
1,140 |
|
| Total non-current assets |
26,500 |
22,783 |
|
| TOTAL ASSETS |
108,301 |
102,307 |
|
| LIABILITIES AND EQUITY |
|||
| Current Liabilities: |
|||
| Short-term bank loans |
14,781 |
13,847 |
|
| Accounts payable |
8,521 |
6,970 |
|
| Amounts due to related parties |
1,324 |
1,177 |
|
| Convertible note-maturity within one year |
9,000 |
4,000 |
|
| Derivative instrument-embedded conversion option |
3,278 |
3,399 |
|
| Accrued expenses and other current liabilities |
33,667 |
32,148 |
|
| Total current liabilities |
70,571 |
61,541 |
|
| Non-current Liabilities: |
|||
| Convertible promissory notes - maturity over one year |
46,448 |
51,019 |
|
| Total non-current liabilities |
46,448 |
51,019 |
|
| Total liabilities |
117,019 |
112,560 |
|
| Equity: |
|||
| Common shares |
10 |
10 |
|
| Additional paid-in capital |
350,693 |
344,083 |
|
| Accumulated deficit |
(403,809) |
(395,183) |
|
| Accumulated other comprehensive income |
39,898 |
39,580 |
|
| Total VisionChina Media Inc. shareholders' equity |
(13,208) |
(11,510) |
|
| Noncontrolling interest |
4,490 |
1,257 |
|
| Total deficit |
(8,718) |
(10,253) |
|
| TOTAL LIABILITIES AND EQUITY |
108,301 |
102,307 |
|
| Note 1: Information extracted from the audited consolidated financial statements included in the Company's |
|||
| VISIONCHINA MEDIA INC. |
|||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
|||||
| (Amounts in thousand U.S. Dollars, except number of shares and per share data) |
|||||
| For three months ended |
|||||
| June 30, 2015 |
March 31, 2015 |
June 30, 2014 |
|||
| (Unaudited) |
(Unaudited) |
(Unaudited) |
|||
| Revenues: |
|||||
| Advertising service revenue |
22,160 |
15,259 |
30,351 |
||
| Other revenue |
1,010 |
62 |
118 |
||
| Total revenues |
23,170 |
15,321 |
30,469 |
||
| Cost of revenues: |
|||||
| Advertising service cost |
(16,899) |
(16,586) |
(22,187) |
||
| Other cost |
(1,030) |
(553) |
(111) |
||
| Total cost of revenues |
(17,929) |
(17,139) |
(22,298) |
||
| Gross profit/(loss) |
5,241 |
(1,818) |
8,171 |
||
| Operating expenses: |
|||||
| Selling and marketing expenses |
(3,378) |
(3,873) |
(3,745) |
||
| General and administrative expenses |
(1,384) |
(1,652) |
(3,217) |
||
| Research and development expenses |
(292) |
(268) |
- |
||
| Total operating expenses |
(5,054) |
(5,793) |
(6,962) |
||
| Share of profit/(loss) from equity method investees |
308 |
325 |
(49) |
||
| Government grant |
45 |
22 |
608 |
||
| Dividend income from cost method investments |
- |
- |
255 |
||
| Operating profit/(loss) |
540 |
(7,264) |
2,023 |
||
| Interest income |
27 |
26 |
73 |
||
| Interest expense |
(1,490) |
(1,400) |
(1,167) |
||
| Other expenses |
454 |
(16) |
1,515 |
||
| Net (loss)/profit before income taxes |
(469) |
(8,654) |
2,444 |
||
| Income tax |
- |
- |
(47) |
||
| Net (loss)/profit |
(469) |
(8,654) |
2,397 |
||
| Net (loss)/profit attributable to noncontrolling interest |
315 |
182 |
24 |
||
| Net (loss)/profit attributable to VisionChina Media Inc. shareholders |
(154) |
(8,472) |
2,421 |
||
| Net (loss)/profit per share: |
|||||
| Basic |
(0.00) |
(0.08) |
0.02 |
||
| Diluted |
(0.00) |
(0.08) |
0.02 |
||
| Ne (loss)/profit per ADS (1): |
|||||
| Basic |
(0.03) |
(1.66) |
0.48 |
||
| Diluted |
(0.03) |
(1.66) |
0.42 |
||
| Weighted average number of shares used in computation of net (loss)/profit per share: |
|||||
| Basic |
102,121,144 |
102,121,144 |
101,572,004 |
||
| Diluted |
102,121,144 |
102,121,144 |
154,511,899 |
||
| Weighted average number of ADS used in computation of net (loss)/profit per ADS: |
|||||
| Basic |
5,106,057 |
5,106,057 |
5,078,600 |
||
| Diluted |
5,106,057 |
5,106,057 |
7,725,595 |
||
| Share-based compensation expenses during the related periods included in: |
|||||
| Cost of revenues |
(11) |
(15) |
(5) |
||
| Selling and marketing expenses |
(1) |
(2) |
(3) |
||
| General and administrative expenses |
(31) |
(47) |
(42) |
||
| Total |
(43) |
(64) |
(50) |
||
| Reconciliation from GAAP net (loss)/profit attributable to VisionChina Media |
|||||
| Net (loss)/profit attributable to VisionChina Media Inc. shareholders (GAAP) |
(154) |
(8,472) |
2,421 |
||
| Add back share-based compensation expenses |
43 |
64 |
50 |
||
| Add back contingent loss in connection with a litigation |
- |
- |
- |
||
| Net (loss)/profit attributable to VisionChina Media Inc. shareholders (Non-GAAP) |
(111) |
(8,408) |
2,471 |
||
| Note 1: ADS amounts adjusted for a change in the ratio of the Company's American Depositary Shares ("ADSs") to common shares ("Shares") from 1:1 |
|||||
SOURCE VisionChina Media Inc.
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