China Digital TV Announces Unaudited Financial Results for the First Six Months of 2018
BEIJING, Aug. 9, 2018 /PRNewswire/ -- China Digital TV Holding Co., Ltd. (OTC: STVVY) ("China Digital TV" or the "Company"), a leading provider of cloud platforms, with gaming and other applications embedded, to PRC digital television and telecommunication network operators, today announced its unaudited financial results for the first six months of ended June 30, 2018.
Mr. Jianhua Zhu, China Digital TV's chief executive officer commented, "We experienced solid progress in the first half of 2018 as both our registered and covered user counts maintained growth, primarily driven by our expansion of our geographic footprint to Hebei Telecom and Ningxia Telecom. In 2018, we focus on Cloud Virtual Reality ("VR") technology and in first half of 2018, we cooperated with Fujian Mobile in Fujian province to provide a full range of VR solutions in VR lives, games, education etc. We remain committed to driving further growth of our business and creating value for our shareholders going forward."
First Half 2018 Results[1]
China Digital TV's net revenues decreased by 22.9% to US$1.5 million for the six months ended June 30, 2018 from US$1.9 million for the same period of the prior year. The decrease in net revenues was primarily attributable to the decreased product revenues during the first half of 2018.
Cost of revenues decreased by 56.9% to US$0.4 million for the six months ended June 30, 2018 from US$0.9 million for the same period of the prior year. The decrease in cost of revenues was primarily due to the decreased product revenues in the first half of 2018.
During the six months ended June 30, 2018, gross profit increased by 4.4% to US$1.1 million from US$1.07 million for the same period of the prior year. Gross margin, which is equal to gross profit divided by net revenues, was 75.1% in the first half of 2018, compared to 55.5% for the same period of the prior year. The increase in gross margin was mainly due to a decreased proportion of revenue from products during the first half of 2018, which have a relative lower gross margin than services.
Operating expenses in the first half of 2018 decreased by 25.2% to US$3.4 million from US$4.6 million for the same period of the prior year.
- Research and development expenses in the first half of 2018 decreased by 23.1% to US$1.5 million from US$1.9 million for the same period of the prior year. The decline was mainly due to decreases in personnel related expenses and share-based compensation.
- Selling and marketing expenses in the first half of 2018 remained relatively stable at US$1 million as compared to the prior year period.
- General and administrative expenses in the first half of 2018 decreased by 43.8% to US$0.9 million from US$1.6 million for the same period of the prior year. The decline was mainly due to a decrease in professional fees.
Loss from continuing operations in the first half of 2018 decreased by 14.1% to US$2.3 million from US$2.7 million for the same period of the prior year.
Income tax expenses in the first half of 2018 was US$0.14 million, as compared with an income tax expenses of US$0.2 million for the same period of the prior year.
Net loss attributable to China Digital TV Holding Co., Ltd in the first half of 2018 decreased to US$1.64 million from US$0.7 million for the same period of the prior year. The decrease was primarily due to a combination of decreased interest income and other income.
Non-GAAP net loss[2] attributable to China Digital TV Holding Co., Ltd in the first half of 2018 was US$1.57 million, as compared to Non-GAAP net loss of US$0.1 million for the same period of the prior year[3].
Balance Sheet
As of June 30, 2018, China Digital TV had cash and cash equivalents of US$24.6 million.
About China Digital TV
Founded in 2004, China Digital TV is a leading provider of cloud platforms, with gaming and other applications embedded, to PRC digital television and telecommunication network operators, enabling them to bring these applications to household television sets and other mobile devices.
For more information please visit the Investor Relations section of China Digital TV's website at http://ir.chinadtv.cn.
Safe Harbor Statement
This announcement contains forward-looking statements within the meaning of Section 27A of the United States Securities Act of 1933, as amended, and Section 21E of the United States Securities Exchange Act of 1934, as amended. Such forward-looking statements are made under the "safe harbor" provisions 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," "may," "should" and similar expressions. Such forward-looking statements include, without limitation, statements regarding the outlook and comments by management in this announcement about trends in the cloud computing, cable television and related industries in the PRC and China Digital TV's strategic and operational plans and future market positions. China Digital TV may also make forward-looking statements in its periodic reports filed with the Securities and Exchange Commission, 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 China Digital TV's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from projections contained or implied in any forward-looking statement, including but not limited to the following: competition in the cloud computing, cable television and related industries in the PRC and the impact of such competition on prices, our ability to implement our business strategies, changes in technology, the progress of the television digitalization in the PRC, the structure of the cable television industry or television viewer preferences, changes in PRC laws, regulations or policies with respect to the cloud computing, cable television and related industries, including the extent of non-PRC companies' participation in such industries, and changes in political, economic, legal and social conditions in the PRC, including the government's policies with respect to economic growth, foreign exchange and foreign investment.
Further information regarding these and other risks and uncertainties is included in our annual report on Form 20-F and other documents filed with the Securities and Exchange Commission. China Digital TV does not assume any obligation to update any forward-looking statements, which apply only as of the date of this press release.
For investor and media inquiries, please contact:
China Digital TV Holding Co., Ltd.
Investor Relations
Tel: +86-10-6297-1199 x 9780
Email: [email protected]
| [1] Unless otherwise stated, all financial statement measures stated in this press release are based on generally accepted accounting principles in the United States ("U.S. GAAP"). |
| [2] Non-GAAP net loss is defined as net loss excluding share-based compensation expenses, and amortization of acquired intangible assets from business acquisitions. |
| [3] For more information on these non-GAAP financial measures, please see the tables captioned "Reconciliations of non-GAAP measures" set forth at the end of this release. |
| China Digital TV Holding Co., Ltd. |
|||||
| Unaudited Condensed Consolidated Balance Sheets |
|||||
| (in thousands of U.S. dollars) |
|||||
| ASSETS |
June 30, |
December 31, |
|||
| 2018 |
2017 |
||||
| Current assets: |
|||||
| Cash and cash equivalents |
$ |
24,605 |
$ |
24,425 |
|
| Term deposits |
- |
2,376 |
|||
| Short-term investments |
4,047 |
3,783 |
|||
| Accounts receivable, net |
1,443 |
1,931 |
|||
| Inventories |
69 |
145 |
|||
| Prepaid expenses and other current assets |
1,219 |
1,124 |
|||
| Total current assets |
31,383 |
33,784 |
|||
| Property and equipment, net |
89 |
- |
|||
| Deferred income tax assets |
139 |
- |
|||
| Total assets |
31,611 |
33,784 |
|||
| LIABILITIES AND EQUITY |
|||||
| Current liabilities: |
|||||
| Accounts payable |
418 |
350 |
|||
| Accrued expenses and other current liabilities |
1,846 |
2,347 |
|||
| Advance from customer, deferred revenue and deferred income- |
1,999 |
1,526 |
|||
| Government subsidies - current |
32 |
70 |
|||
| Total current liabilities |
4,295 |
4,293 |
|||
| Deferred revenue - non-current |
267 |
248 |
|||
| Government subsidies - non-current |
257 |
261 |
|||
| Total liabilities |
4,819 |
4,802 |
|||
| Ordinary shares |
32 |
32 |
|||
| Additional paid-in capital |
29,875 |
29,805 |
|||
| Statutory reserve |
96 |
96 |
|||
| Accumulated deficit |
(4,822) |
(3,226) |
|||
| Subscription receivable |
(990) |
(1,001) |
|||
| Accumulated other comprehensive income |
319 |
430 |
|||
| Total China Digital TV Holding Co., Ltd. shareholders' equity |
24,510 |
26,136 |
|||
| Noncontrolling interest |
2,282 |
2,846 |
|||
| Total equity |
26,792 |
28,982 |
|||
| TOTAL LIABILITIES AND EQUITY |
$ |
31,611 |
$ |
33,784 |
|
| China Digital TV Holding Co., Ltd. |
|||||||||
| Unaudited Condensed Consolidated Statements of Comprehensive Income |
|||||||||
| (in thousands of U.S. dollars, except share and per share data) |
|||||||||
| For the six months ended |
|||||||||
| June 30, |
June 30, |
||||||||
| 2018 |
2017 |
||||||||
| Total revenues |
$ |
1,498 |
$ |
1,945 |
|||||
| Taxes and surcharges |
(11) |
(16) |
|||||||
| Net revenues |
1,487 |
1,929 |
|||||||
| Total cost of revenues |
(370) |
(859) |
|||||||
| Gross profit |
1,117 |
1,070 |
|||||||
| Operating expenses: |
|||||||||
| Research and development expenses |
(1,495) |
(1,945) |
|||||||
| Selling and marketing expenses |
(1,047) |
(1,060) |
|||||||
| General and administrative expenses |
(891) |
(1,584) |
|||||||
| Gain from disposal of assets |
- |
822 |
|||||||
| Total operating expenses |
(3,433) |
(3,767) |
|||||||
| Operating loss from continuing operations |
(2,316) |
(2,697) |
|||||||
| Interest income |
15 |
1,118 |
|||||||
| Other income, net |
188 |
720 |
|||||||
| Loss from continuing operations before income |
(2,113) |
(859) |
|||||||
| Income tax expenses |
(141) |
(196) |
|||||||
| Net loss from continuing operations |
(2,254) |
(1,055) |
|||||||
| Discontinued operations |
|||||||||
| Loss from the operations of discontinued |
- |
(389) |
|||||||
| Net loss |
(2,254) |
(1,444) |
|||||||
| Less: Net loss attributable to noncontrolling interest |
(619) |
(724) |
|||||||
| Net loss attributable to ordinary shareholders of |
$ |
(1,635) |
$ |
(720) |
|||||
| Amounts attributable to ordinary shareholders of |
|||||||||
| Net loss from continuing operations |
(1,635) |
(331) |
|||||||
| Net loss from discontinued operations, net of |
- |
(389) |
|||||||
| Net loss attributable to ordinary shareholders of |
$ |
(1,635) |
$ |
(720) |
|||||
| Net loss |
$ |
(2,254) |
$ |
(1,444) |
|||||
| Other comprehensive (loss)/ income, net of income |
|||||||||
| Foreign currency translation adjustment |
(156) |
327 |
|||||||
| Unrealized holding gains on available-for-sale |
120 |
- |
|||||||
| Reclassification adjustment for gains on available- |
(101) |
- |
|||||||
| Total other comprehensive (loss)/ income, net of |
(137) |
327 |
|||||||
| Comprehensive loss |
(2,391) |
(1,117) |
|||||||
| Less: Comprehensive loss attributable to |
(645) |
(696) |
|||||||
| Comprehensive loss attributable to ordinary |
$ |
(1,746) |
$ |
(421) |
|||||
| Loss per share: Basic loss per share attributable to ordinary |
|||||||||
| Net loss from continuing operations |
(0.026) |
(0.005) |
|||||||
| Net loss from discontinued operations |
- |
(0.006) |
|||||||
| Net loss |
$ |
(0.026) |
$ |
(0.011) |
|||||
| Diluted loss per share attributable to ordinary |
|||||||||
| Net loss from continuing operations |
(0.026) |
(0.005) |
|||||||
| Net loss from discontinued operations |
- |
(0.006) |
|||||||
| Net loss |
$ |
(0.026) |
$ |
(0.011) |
|||||
| Weighted average shares used in calculating loss |
|||||||||
| Basic |
63,508,656 |
61,216,730 |
|||||||
| Diluted |
63,508,656 |
61,216,730 |
|||||||
Reconciliation of Non-GAAP Measures
Non-GAAP net income attributable to China Digital TV Holding Co., Ltd. shareholders excludes share-based compensation expenses, and amortization of intangible assets acquired from business acquisitions. The Company believes that the Non-GAAP net income provides meaningful supplemental information regarding the Company's performance by excluding certain non-cash expenses that may not be indicative of its operating performance from a cash flow perspective. The Company believes that both management and investors benefit from referring to this additional information in assessing the Company's performance and when planning and forecasting future periods.
However, the use of non-GAAP financial measures has material limitations as an analytical tool. One of the limitations of using non-GAAP financial measures is that they do not include all items that impact the Company's net (loss)/income for the period. In addition, because non-GAAP financial measures are not measured in the same manner by all companies, they may not be comparable to other similar titled measures used by other companies. In light of the foregoing limitations, you should not consider non-GAAP financial measure in isolation from or as an alternative to the financial measure prepared in accordance with U.S. GAAP.
| For the six months ended |
||||||
| June 30, |
June 30, |
|||||
| 2018 |
2017 |
|||||
| (in thousands of U.S. dollars) |
||||||
| Net loss attributable to China Digital TV Holding |
$ |
(1,635) |
$ |
(720) |
||
| Share-based compensation expenses |
70 |
593 |
||||
| Amortization of intangible assets from business |
- |
20 |
||||
| Net loss attributable to China Digital TV Holding |
$ |
(1,565) |
$ |
(107) |
||
SOURCE China Digital TV Holding Co., Ltd.
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