V Media Corp. Announces Fiscal 2012 Year End Financial Results

DALIAN, China, Sept. 28, 2012 /PRNewswire/ -- V Media Corp. (OTCBB: CMDI) (the "Company"), China's fast-growing advertising media company with current outdoor media network located in Dalian, Shenyang, Tianjin, Beijing, Shanghai and New York, today announced its financial results for the fiscal year ended June 30, 2012.

Financial Highlights for the Year Ended June 30, 2012

• Total revenue for fiscal year 2012 was $18.5 million, decreased 10% compared with fiscal year 2011
• Gross profit decreased 34% to $7.7 million with a corresponding gross margin of 41.8%
• Net income attributable to the Company was $50,853, decreased 99% compared with the prior year

Operational Highlights for the Fiscal Year Ended June 30, 2012

• Outdoor advertising billboards operated totaled 5 mega-screen LED billboards, 8 metal billboards, 1 indoor LED screen, and 5 outdoor billboards as of June 30, 2012.
• Continued the expansion in Shenyang. Launched a 500 square meter or 5,382 square foot LED billboard located atop the 22-story Shenyang Golden Hotel.  This LED screen represents the second LED screen owned and operated by the Company in Shenyang.
• The Company's trademark "Vastitude Media" has been recognized by the State Administration for Industry and Commerce (SAIC) as a "China Well-known Trademark". This is the first Well-known trademark that has ever been granted in outdoor media industry and entitles the Company to an additional RMB50 million credit line.

Mr. James Wang, Chairman and Chief Executive Officer of V Media, stated, "During our 2012 fiscal year we have been through an advertising market that was much affected by macroeconomic uncertainty. We have been focusing on client diversification and cross selling among different advertising platforms. Our overall revenue decreased 10% year-over-year and we haven't seen a return to normalization due to extended cut backs on branding budgets as a result of macroeconomic uncertainties. However, revenue generated from outdoor billboards platforms continued the growth trend, which increased 19% from the prior year. Outdoor billboards accounted for 43% of total revenue in our 2012 fiscal year and have presented great growth opportunities for the Company. Going forward we have several projects in pipeline that we expect will contribute to continued performance growth of this platform in the 2013 fiscal year."

Summary Financials for Year Ended June 30, 2012:  

Financial Results for the Year Ended June 30, 2012

Revenue for the year ended June 30, 2012 totaled $18.5 million, a decrease of 10% compared to $20.6 million for the same period in 2011. We saw a revenue increase of 19% in the outdoor billboard advertising platform which accounted for 43% of total revenue during the 2012 fiscal year. The billboard advertising platform has presented a significant growth opportunity with attractive profit margins which were 43% for the 2012 fiscal year. The outdoor billboard platform is established in Dalian, Shenyang, Tianjin, Beijing and Shanghai and going forward the Company will continue to establish their presence in these markets. Revenue in Dalian, which accounted for 77% of total revenue, decreased by 25% to $14.1 million for the 2012 fiscal year as compare to $18.8 million for the 2011 fiscal year.

Street fixture and display networks revenue (generated from Dalian and Shenyang market) decreased 18% year-over-year, city transit system display networks decreased 32% and city navigator decreased 24%, both of which are generated solely from the Dalian market. Geographically for the 2012 fiscal year, revenue in Dalian, Shanghai, Shenyang, Tianjin and Beijing accounted for 76.5%, 3.0%, 6.7%, 2.3% and 11.5% of total revenue. These results compare to 92.2%, 4.3%, 3%, 1% and less than 1% for the 2011 fiscal year.

As of June 30, 2012, V Media has installed 52 "City Navigator" units across the Dalian urban area, 3 mega-screen (126 square meters to 400 square meters or 1,356 square feet to 4,306 square feet) LED screens and 8 metal billboards in Dalian, 1 mega-screen (88 square meters or 947 square feet) LED screen in the business district in Shenyang, 1 indoor LED screen (22 square meters or 237 square feet) in Tianjin Railway Station and 5 outdoor billboards in Shanghai. For other platforms, the number of bus shelters and taxi stops increased to 790, the number of buses that carry mobile advertisements is 336 and specifically the number of mobile displays through Dalian metro-trains increased to 32.

Cost of sales for the year ended June 30, 2012 totaled $10.8 million or 58.2% of revenue, an increase of 19.8% compared to $9 million or 43.6% of revenue for the year ended June 30, 2011. The increase in cost of revenue was primarily attributable to increased depreciation of advertising equipment, labor and raw material cost.

Gross profit for the year ended June 30, 2012 totaled $7.7 million, a decrease of 33.5% compared to $11.6 million for the year ended June 30, 2011. The decrease in gross profit was partially attributable to the revenue decrease. Gross profit margin was 41.8% and 56.4% for the year ended June 30, 2012 and 2011, respectively.  The decrease in gross profit margin during the 2012 fiscal year as compared to the 2011 fiscal year was mainly due to the increased cost of securing new advertising platform, increased maintenance cost of advertising equipment, and the increase of labor and raw material cost during the fiscal year ended June 30, 2012. Specifically, the decrease in outdoor billboard margins was due to the increased amount of new constructions and the lead time needed to build advertising clients.

Selling, general and administrative expenses, which primarily consist of salaries of sales personnel, commissions for sales representatives, rent expenses and related administrative expenses, totaled $6.6 million and $4.1 million for the years ended June 30, 2012 and 2011, respectively, an increase of $2.5 million or 63%.  Among which, $1.1 million increased amortization expense was associated with a LED in Times Square newly rented for operation in current year; $665,000 was due to increased depreciation expense; $242,000 was due to higher maintenance and professional fees as being a public company.

Net income attributable to V Media Corp. for the year ended June 30, 2012 totaled $50,853, a decrease of 99% as compared to $4.9 million for the year ended June 30, 2011. Basic and diluted earnings per share for the year ended June 30, 2012 were $0 and $0 based on 27.6 million basic and 27.6 million diluted shares versus basic and diluted earnings per share of $0.18 and $0.17 for the year ended June 30, 2011 based on 27.6 million basic and 28.2 million diluted shares outstanding.

Liquidity and Capital Resources

As of June 30, 2012, V Media had approximately $1.5 million in cash and cash equivalents or $0.06 per share. As of June 30, 2012, total current assets and total assets were $9.5 million and $39.6 million, respectively. During the same period, total current liabilities and total liabilities were $19.6 million and $19.9 million, respectively. Shareholder's equity increased 10.9% to $39.6 million for the year ended June 30, 2012, compared to $35.7 million for the year ended June 30, 2011.

Conference Call Details:

It is recommended that participants dial in approximately 10 minutes prior to the start of the 9:30 a.m. Eastern call. A telephonic replay of the conference call may be accessed approximately two hours after the call through October 12, 2012. Please dial 877-870-5176 for U.S. and 858-384-5517 for international callers and entering the access code, 4567626.

There will also be a simultaneous live webcast of the conference call which can be accessed through the following audio feed link and archived recording of the conference call available by clicking on the following link, http://public.viavid.com/index.php?id=101929.

About V Media Corp.

Founded in September 2000, Dalian Vastitude Media Group Co., Ltd., now known as V Media Corp., is headquartered in Dalian, the commercial center of Northeastern China. The company owns and operates the city's largest outdoor media network encompassing over 600 bus shelters furnished with billboards and displays; 130 taxi stops with displays; and 18 large-size billboards, including 3 large-size LED displays at major traffic conjunctions. The company also furnishes more than 400 buses with advertising posters and 32 metro-trains throughout Dalian Metro Lines. V Media provides comprehensive adverting services from art design to ad publishing, from daily maintenance to technical upgrading. Launched in Dalian in 2009, V Media's proprietary LED multimedia display network, City Navigator®, is one of the country's first web-based outdoor advertising networks. For more information, please visit www.gywj.cn.

Forward-Looking Statements

This press release may contain certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact included herein are "forward-looking statements", including statements regarding the Company's ability to meet its obligations under its various contracts; the timeliness of payments and other economic benefits the Company expects to receive under such contracts; and the Company's ability to maintain its customer relationships and to maintain its ability to pursue its commercial objectives. In addition, the Company's operations are conducted in the PRC and, accordingly, are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe such as risks associated with, among others, the political, economic and legal environment and foreign currency exchange. The Company's results may be adversely affected by changes in the political and social conditions in the PRC and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation. These forward-looking statements are often identified by the use of forward-looking terminology such as "believes," "expects" or similar expressions, involve known and unknown risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company's periodic reports that are filed with the Securities and Exchange Commission and available on its website at http://www.sec.gov. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.

Company Contact:

Rita Jiang
Executive Vice President of Finance
646-691-5047
[email protected]
www.gywj.cn

SOURCE V Media Corp.

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