Glory Star Reports First Half Year 2022 Unaudited Financial Results

BEIJING, July 22, 2022 /PRNewswire/ -- Glory Star New Media Group Holdings Limited (NASDAQ: GSMG) ("Glory Star", the "Company" or "we"), a leading digital media platform and content-driven e-commerce company in China, today announced its unaudited financial results for the first half year of 2022 ended June 30, 2022.

First Half 2022 Operating Highlights

• Downloads of the CHEERS Video App increased to approximately 300.6 million as of June 30, 2022, compared to approximately 215.6 million as of June 30, 2021.
• Downloads of the CHEERS e-Mall App increased to approximately 20.4 million as of June 30, 2022, compared to approximately 3.8 million as of June 30, 2021.
• Monthly Active Users ("MAU") of the CHEERS Video App increased to approximately 45.8 million from 43.2 million in the same period of 2021.
• MAU of the CHEERS e-Mall App increased to approximately 3.0 million from 1.4 million in the same period of 2021.
• Repurchase Rate ("RPR") for CHEERS e-Mall was approximately 42.4%.
• Daily Time Spent ("DTS") on CHEERS Video was approximately 56 minutes.

First Half 2022 Key Operating Results

The Company monitors the following key metrics to evaluate the growth of its business, measure the effectiveness of its marketing efforts, identify trends affecting its business, and make strategic decisions.

Downloads. We view the number of downloads at the end of a given period as a key indicator of the attractiveness and usability of our Video platform and the increased traffic to our e-Mall platform. As of June 30, 2022, downloads of our CHEERS Video and e-Mall Apps were approximately 300.6 million and 20.4 million respectively, representing an increase of 39.4% and 436.8% respectively as compared to the same period in 2021.

MAU. MAU is defined as a user who has logged in or accessed the Company's CHEERS Video App and CHEERS e-Mall App. We calculate MAU using internal company data based on the activity of the user account and as adjusted to remove "duplicate" accounts. MAU is a tool that our management uses to manage their operations. In particular, our management sets targets of MAU and monitors the MAU to see whether to make adjustments as to the promotional activities, advertising campaign, and/or online video contents. For the six months ended June 30, 2022, the average MAU of our CHEERS Video and e-Mall Apps were 45.8 million and 3.0 million, growing 6.0% and 114.3% respectively as compared to the same period in 2021.

RPR. We track RPR to analyze the effectiveness of our marketing as well as customers retention, which is vital to our e-Mall. RPR is calculated as the percentage of our customers who have placed more than one order within a certain period of time. For the 180 days period during the first half of 2022, our CHEERS e-Mall RPR was 42.4%.  

DTS. We measure DTS as an additional metric to evaluate the attractiveness of our video content and stickiness of users. The average DTS using our CHEERS Video during first half 2022 was 56 minutes.

First Half 2022 Financial Results

Revenues in the first half year of 2022 were US$69.9 million compared to US$71.9 million in the same period of 2021, which approximately maintained at the same level.

Total operating expenses in the first half year of 2022 were US$59.4 million, compared to US$55.7 million in the same period of 2021.

• Cost of revenues were US$14.6 million and US$13.2 million for the first half year of 2022 and 2021, mainly due to the update of the Company's product portfolio to increase concentration on customized product, resulting high operating expenditure.  
• Sales and marketing expenses were US$42.5 million and US$39.8 million for the first half year of 2022 and 2021, mainly due to an increase in marketing and advertising fees to enhance the Company's brand recognition and user traffic generation.
• General and administrative expenses in the first half year of 2022 decreased by 21.6% to US$1.8 million from US$2.3 million in the same period of 2021, as a result of the uncertainty of the macro-economic environment and impact of the ongoing COVID-19 pandemic, and improvement by the Company's management of its human capital efficiency and bringing its lean operations strategy to the next level.
• Research and development expenses were US$0.5 million and US$0.3 million for the first half year of 2022 and 2021, respectively.

Income from operations in the first half year of 2022 was US$10.5 million, compared to US$16.2 million in the same period of 2021.

Net income attributable to ordinary shareholders were US$10.8 million and US$16.9 million for the first half year of 2022 and 2021, respectively. 

Basic and diluted earnings per share in the first half year of 2022 were US$0.16 and US$0.16, respectively, compared to US$0.27 and US$0.27, respectively, in the same period of 2021.

Net cash used in operating activities in the first half year of 2022 was US$30.6 million, compared to US$11.9 million in the same period of 2021.

As of June 30, 2022, the Company had cash and cash equivalents of US$44.8 million, compared to US$77.3 million as of December 31, 2021.

About Glory Star New Media Group Holdings Limited

Since its establishment in 2016, Glory Star has been laser focused on developing an ecosystem for its users that incorporates quality content, e-commerce, social networking, and gaming. The Company continues to integrate its cutting edge blockchain technologies, massive user base from its CHEERS ecosystem, quality content offerings, and its well-established e-commerce platform, and through the right application of 5G, AR, VR and NFT technologies to develop a metaverse boasting a wide range of "online + offline" and "virtual + reality" scenarios. Glory Star's CHEERS Video and e-Mall platforms provide a solid foundation for it to rapidly develop different entertainment and shopping applications for the metaverse. Glory Star also provides a suite of tools for its users to facilitate the development of new content by creators. The Company is remaining at the forefront of disrupting the way new media and e-commerce is operated. For more information, please visit http://ir.gsmg.co/. 

Use of Non-GAAP Financial Measures

In evaluating the business, the Company considers and uses non-GAAP measures, such as non-GAAP operating income/(loss) and non-GAAP net income/(loss) attributable to ordinary shareholders, as supplemental measures to review and assess operating performance. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). The Company defines non-GAAP operating income/ (loss) as operating income/ (loss) excluding share-based compensation expenses. The Company defines non-GAAP net income/ (loss) attributable to ordinary shareholders as net income/ (loss) attributable to ordinary shareholders excluding share-based compensation expenses.

The Company presents these non-GAAP financial measures because they are used by management to evaluate operating performance and formulate business plans. The Company believes that the non-GAAP financial measures help identify underlying trends in its business by excluding the impact of share-based compensation expenses, which is a non-cash charge. The Company also believes that the non-GAAP financial measures could provide further information about the Company's results of operations, and enhance the overall understanding of the Company's past performance and future prospects.

The non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. The non-GAAP financial measures have limitations as analytical tools. The Company's non-GAAP financial measures do not reflect all items of income and expense that affect the Company's operations and do not represent the residual cash flow available for discretionary expenditures. Further, these non-GAAP measures may differ from the non-GAAP information used by other companies, including peer companies, and therefore their comparability may be limited. The Company compensates for these limitations by reconciling the non-GAAP financial measures to the nearest U.S. GAAP performance measure, all of which should be considered when evaluating performance. The Company encourages you to review the Company's financial information in its entirety and not rely on a single financial measure.

For more information on the non-GAAP financial measures, please see the table captioned "Glory Star New Media Group Holdings Limited Reconciliation of GAAP and Non-GAAP results" set forth at the end of this press release.

Safe Harbor Statement

Certain statements made in this release are "forward looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. When used in this press release, the words "estimates," "projected," "expects," "anticipates," "forecasts," "plans," "intends," "believes," "seeks," "may," "will," "should," "future," "propose" and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements. These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside the Company's control, that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements.

Important factors, among others, are: the ability to manage growth; ability to identify and integrate other future acquisitions; ability to obtain additional financing in the future to fund capital expenditures; fluctuations in general economic and business conditions; costs or other factors adversely affecting the Company's profitability; litigation involving patents, intellectual property, and other matters; potential changes in the legislative and regulatory environment; a pandemic or epidemic; the occurrence of any event, change or other circumstances that could affect the Company's ability to continue successful development and launch of its metaverse; the possibility that the Company may not succeed in developing its new lines of businesses due to, among other things, changes in the business environment, competition, changes in regulation, or other economic and policy factors; the possibility that the Company's new lines of business may be adversely affected by other economic, business, and/or competitive factors; other factors, risks and uncertainties set forth in documents filed by the Company with the Securities and Exchange Commission (the "SEC") from time to time, including the Company's Annual Report on Form 20-F filed with the SEC on March 8, 2022. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. Such information speaks only as of the date of this release.

Contacts

Glory Star New Media Group Holdings Limited
Yida Ye
Email: [email protected]

SOURCE Glory Star New Media Group Holdings Limited