|
 |
 |
Comments
Did you read today's front page stories & breaking news?
SYS-CON.TV
|
From the Wires
XFMedia Announces Financial Results for the Third Quarter 2008
By: PR Newswire
Nov. 17, 2008 05:00 PM
Third Quarter 2008 Highlights
-- Steady revenue growth up 25% year over year in the midst of a
challenging operating environment.
-- Broadcast business continues to contribute the highest growth of 68%
year over year and 30% quarter over quarter.
-- Company provides fourth quarter guidance and revises full year guidance.
Ms. Ms. Bush added, "During the quarter, as the Beijing Olympics took place, it was especially challenging for most of the non-official Olympic media and non-Olympic sponsors. The recent global economic downturn poses further challenges, and we will not be immune to the impact of these circumstances. However, by leveraging our strong, fundamental platform, we continue to integrate ourselves to achieve streamlined cost savings across our various operating units." Third Quarter 2008 Financial Results The following is a summary of our financial results for the third quarter of 2008:
Chart 1: Summary of financial results
3 months 3 months 3 months 08Q3 vs 08Q3 vs
ended ended ended 07Q3 08Q2
Sep, 30 Sep, 30 Jun, 30 growth growth
2008 2007 2008 % %
In US millions
Net revenue 51.1 40.7 48.9 25% 4%
Adjusted EBITDA(1) 9.5 10.3 10.7 -8% -11%
Net income (loss) (15.9) 9.0 0.8 N/A N/A
Net income (loss) per ADS
- diluted(2) ($0.24) $0.13 -- N/A N/A
Adjusted net income(1) 7.4 12.3 7.6 -40% -3%
Adjusted net income per ADS
- diluted(2) $0.10 $0.17 $0.10 -41% 0%
1. Please refer to Chart 8 for a detailed calculation of adjusted EBITDA
and adjusted net income.
2. Please refer to Chart 9 for weighted average number of ADS on a
diluted basis.
Net Revenue Net revenue for the third quarter of 2008 was Net Revenue by business group The following is a summary of net revenue by business group for the third quarter of 2008.
Chart 2: Revenue breakdown by type and business group
In US millions Advertising Broadcast Print Total
Net revenue:
Advertising services 24.1 3.3 0.1 27.5
Content production -- 7.8 -- 7.8
Advertising sales 5.9 7.0 2.8 15.7
Publishing services -- -- 0.1 0.1
Total net revenue: 30.0 18.1 3.0 51.1
Advertising Group Net revenue for the Advertising Group for the third quarter of 2008 was
Chart 3: Revenue breakdown of the Advertising Group
3 months 3 months 3 months 3 months
ended ended Growth ended ended Growth
Sep 30, Sep 30, % Sep 30, Jun 30, %
2008 2007 2008 2008
In US millions
Advertising:
Television -- 3.8 -100% -- -- N/A
Print/Online 15.5 9.5 63% 15.5 12.2 27%
Outdoor/Other 7.4 5.7 29% 7.4 8.2 -10%
BTL Marketing 5.6 3.6 54% 5.6 7.9 -29%
Research 1.5 1.4 3% 1.5 1.6 -9%
Subtotal: 30.0 24.0 25% 30.0 29.9 0%
Broadcast Group Net revenue for the Broadcast Group for the third quarter of 2008 was
Chart 4: Revenue breakdown of the Broadcast Group
3 months 3 months 3 months 3 months
ended ended Growth ended ended Growth
Sep 30, Sep 30, % Sep 30, Jun 30, %
2008 2007 2008 2008
In US millions
Broadcast:
Television 6.1 3.5 76% 6.1 6.5 -5%
Radio 2.7 1.9 45% 2.7 2.7 0%
Mobile 3.3 3.3 -1% 3.3 2.5 32%
Production 6.0 2.1 187% 6.0 2.3 166%
Subtotal: 18.1 10.8 68% 18.1 14.0 30%
Print Group Net revenue for the Print Group for the third quarter of 2008 was
Chart 5: Revenue breakdown of the Print Group
3 months 3 months 3 months 3 months
ended ended Growth ended ended Growth
Sep 30, Sep 30, % Sep 30, Jun 30, %
2008 2007 2008 2008
In US millions
Print:
Newspaper 1.5 2.5 -42% 1.5 2.7 -46%
Magazines 1.5 3.4 -55% 1.5 2.3 -35%
Subtotal: 3.0 5.9 -50% 3.0 5.0 -41%
Gross Profit Gross profit for the third quarter of 2008 was
Chart 6: Reconciliation for adjusted gross profit by business group
In US millions Advertising Broadcast Print Total
Gross Profit 12.2 5.6 0.9 18.7
Amortization of intangible assets
from acquisitions(1) 0.3 1.3 0.2 1.8
Adjusted gross profit 12.5 6.9 1.1 20.5
1. Amortization of intangible assets from acquisitions includes assets
such as client database, brand names, and production inventory.
Operating Expenses Operating expenses for the third quarter of 2008 were Total operating expenses were composed of selling and marketing expenses
and general and administrative expenses. Selling and marketing expenses for
the third quarter of 2008 were General and administrative expenses for the third quarter of 2008 were
Adjusted EBITDA (non-GAAP) Adjusted EBITDA (non-GAAP), defined as earnings before one time items,
other income, interest income and expense, taxes, depreciation, amortization
of intangible assets from acquisitions and share-based compensation expenses,
for the third quarter of 2008 was
Chart 7: Adjusted EBITDA by business group
In US millions Advertising Broadcast Print Total
Adjusted EBITDA by business group 8.5 5.2 -- 13.7
Less: net head office expenses (4.2)
Adjusted EBITDA 9.5
Net Income and Adjusted Net Income (non-GAAP) Net loss for the third quarter of 2008 was Adjusted net income (non-GAAP), defined as net income before one-time
items, amortization of intangible assets from acquisitions, share-based
compensation expenses and imputed interest, for the third quarter of 2008 was
Outlook for fourth quarter and full year of 2008 XFMedia estimates its net revenue for the fourth quarter of 2008 will
range from Due to challenges in the current economic environment, XFMedia is revising
its estimate of net revenue for full year 2008 to range from This forecast reflects XFMedia's current and preliminary view, which is subject to change. Other Corporate Developments In In In light of the global and PRC economic developments and conditions, the Company has evaluated its goodwill and intangible assets for impairment and noted no impairment losses for the third quarter; however, any further significant deterioration of the business environment in the fourth quarter and after could affect the overall business outlook and may trigger potential material non-cash impairment charges on goodwill and intangible assets. Conference Call Information Following the earnings announcement, XFMedia's senior management will host
a conference call on
Interested parties may dial into the conference call at:
(US) +1 866 578 5771 or +1 617 213 8055
(UK) +44 207 365 8426
(Asia Pacific) +852 3002 1672
Passcode: XFML
A telephone replay will be available two hours after the call for one week at: (US Toll Free) +1 888 286 8010
(International) +1 617 801 6888
Passcode: 78412461
A real-time webcast and replay will be also available at:
http://www.xfmedia.cn/earnings-webcast
About XFMedia Xinhua Finance Media ("XFMedia"; NASDAQ: XFML) is a leading media group in
Headquartered in Safe Harbor This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of 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 outlook for fourth quarter and full year 2008 and quotations from management in this announcement, as well as XFMedia's strategic and operational plans, contain forward-looking statements. XFMedia may also make written or oral forward-looking statements in its periodic reports to the U.S. 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 XFMedia'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 those contained in any forward- looking statement, including but not limited to the following: our growth strategies; our future business development, results of operations and financial condition; our ability to attract and retain customers; competition in the Chinese advertising and media market; changes in our revenues and certain cost or expense items as a percentage of our revenues; the outcome of ongoing, or any future, litigation or arbitration, including those relating to copyright and other intellectual property rights; the expected growth of the Chinese advertising and media market; and Chinese governmental policies relating to advertising and media. Further information regarding these and other risks is included in our annual report on Form 20-F and other documents filed with the Securities and Exchange Commission. XFMedia does not undertake any obligation to update any forward-looking statement, except as required under applicable law. Non-GAAP Financial Measures To supplement XFMedia's consolidated financial results under U.S. GAAP, XFMedia also provides the following non-GAAP financial measures: adjusted gross profit, adjusted EBITDA and adjusted net income. XFMedia has adopted these measures "adjusted gross profit", defined as gross profit excluding amortization of intangible assets from acquisitions, "adjusted EBITDA", by defining adjusted EBITDA as earnings before one time items, other income, interest income and expense, taxes, depreciation, amortization of intangible assets from acquisitions and share-based compensation expenses, and "adjusted net income", by defining adjusted net income as net income before amortization of intangible assets from acquisitions, imputed interest, share-based compensation expenses and one-time items. XFMedia believes that these non-GAAP financial measures provide investors with another method for assessing XFMedia's underlying operational and financial performance. These non-GAAP financial measures are not intended to be considered in isolation or as a substitute for the financial results under U.S. GAAP. For more information on these non-GAAP financial measures, please refer to Chart 8 of this release. XFMedia believes these non-GAAP financial measures are useful to management and investors in assessing the performance of the Company and assist management in its financial and operational decision-making. A limitation of using non-GAAP measures which exclude share-based compensation expenses is that share-based compensation expenses have been and will continue to be a significant recurring expense in our business. A limitation of using non-GAAP adjusted gross profit, adjusted EBITDA and adjusted net income is that they do not include all items that impact our net income for the period. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from each non-GAAP measure. The accompanying tables have more details on the reconciliations between GAAP financial measures that are most directly comparable to non-GAAP financial measures.
The following is a reconciliation of our non-GAAP financial results:
Chart 8: Reconciliation of non-GAAP financial results
3 months 3 months 3 months
ended ended ended
Sep 30, Sep 30, Jun 30,
2008 2007 2008
In US millions
Income from operations 3.5 6.2 4.3
One time items(1) 0.5 -- 0.6
Depreciation 0.8 0.6 0.6
Amortization of intangible assets
from acquisitions 3.4 3.0 3.4
Share-based compensation expenses 1.3 0.5 1.8
Adjusted EBITDA 9.5 10.3 10.7
Net income (loss) (15.9) 9.0 0.8
One time items(2) 17.0 (1.3) 0.6
Amortization of intangible assets
from acquisitions 3.4 3.0 3.4
Share-based compensation expenses 1.3 0.5 1.8
Imputed interest 1.6 1.1 1.0
Adjusted net income 7.4 12.3 7.6
1. There is a one-time adjustment of $0.6 million and $0.5 million for
second and third quarter of 2008, representing legal fees for class
action lawsuit.
2. There is a one-time adjustment of $17.0 million for third quarter of
2008, representing $0.5 million legal fee for class action lawsuit and
$16.5 million provision for impairment of principal protected note;
$0.6 million for second quarter of 2008, representing legal fees for
class action lawsuit; $1.3 million for third quarter of 2007,
representing reversal of the imputed interest taken in the first half
of 2007 as a result of clarification of terms of one of our exclusive
radio advertising agreements.
Net income and adjusted net income per ADS and per share are as follows:
Chart 9: Net income and adjusted net income per ADS and per share(1)
3 months 3 months 3 months
ended ended ended
Sep 30, Sep 30, Jun 30,
2008 2007 2008
Net income (loss) per ADS
- basic (0.24) $0.14 --
Net income (loss) per ADS
- diluted (0.24) $0.13 --
Weighted average number of ADS
- basic 68.2 million 63.5 million 67.5 million
Weighted average number of ADS
- diluted 68.2 million 71.1 million 73.5 million
Adjusted net income per ADS
- basic $0.10 $0.19 $0.10
Adjusted net income per ADS
- diluted $0.10 $0.17 $0.10
Weighted average number of ADS
- basic 68.2 million 63.5 million 67.5 million
Weighted average number of ADS
- diluted 71.8 million 71.1 million 73.5 million
1. For computation of the net income (loss) per ADS and adjusted net
income per ADS and per share, dividends on convertible preference
shares of $0.6 million in both second and third quarter of 2008 were
taken into account.
Condensed Consolidated Balance Sheets
(In U.S. dollars) Sep 30,2008 Dec 31,2007
Unaudited (Note 1)
Assets
Current assets: 45,335,004 44,436,087
Cash
Restricted cash (Note 2) 34,310,002 47,252,191
Principal protected note (Note 3) 8,458,793 --
Accounts receivable (Note 4) 57,848,423 45,706,766
Prepaid program expenses 4,189,661 5,389,250
Other current assets 21,673,497 16,272,798
Total current assets 171,815,380 159,057,092
Content production deposit and
cost, net 3,876,164 8,855,896
Property and equipment, net 10,391,154 9,191,959
Intangible assets, net (Note 5) 243,990,560 233,505,913
Goodwill 285,210,951 180,125,488
Investment 2,500,000 500,000
Principal protected note (Note 3) -- 24,909,929
Deposits for acquisition of
subsidiaries 4,806,863 25,634,000
Other long-term asset 9,863,982 9,021,936
Total assets 732,455,054 650,802,213
Liabilities, mezzanine equity and
shareholders' equity
Current liabilities:
Bank borrowings (Note 3) 38,432,587 33,780,188
Bank overdrafts 667,899 960,157
Other current liabilities 97,560,471 44,473,366
Total current liabilities 136,660,957 79,213,711
Deferred tax liabilities 35,371,505 37,741,579
Long term payables, non-current portion 68,840,567 65,150,610
Total liabilities 240,873,029 182,105,900
Minority Interests 2,475,733 2,060,745
Mezzanine equity:
Series B convertible preferred shares
(par value $0.001; 308,000 shares
authorized, issued and outstanding
as of September 30, 2008) 30,250,000 --
Shareholders' equity:
Class A common shares and nonvested
shares (par value $0.001; 143,822,874
as of December 31, 2007 and
September 30, 2008 shares authorized;
90,061,269 as of December 31, 2007
and 92,860,049 as of September 30,
2008 shares issued and outstanding) 92,860 90,061
Class B common shares (par value
$0.001; 50,054,619 as of as of
December 31, 2007 and September 30,
2008 shares authorized; 50,054,618
as of December 31, 2007 and as of
September 30, 2008 shares issued and
outstanding) 7,442 7,442
Additional paid-in capital 450,145,276 439,516,974
(Deficits) Retained earnings (887,787) 23,903,560
Accumulated other comprehensive income 9,498,501 3,117,531
Total shareholders' equity 458,856,292 466,635,568
Total liabilities, mezzanine equity
and shareholders' equity 732,455,054 650,802,213
Condensed Consolidated Statements of Operations
3 months 3 months 3 months
ended ended ended
Sep 30, Sep 30, Jun 30,
2008 2007 2008
(in U.S. Dollars) Unaudited Unaudited Unaudited
Net revenue:
Advertising services 27,484,357 26,012,979 26,852,171
Content production 7,807,840 2,073,675 2,888,164
Advertising sales 15,696,762 12,346,672 19,006,987
Publishing services 61,757 291,072 108,924
Total net revenue 51,050,716 40,724,398 48,856,246
Cost of revenue:
Advertising services 19,349,359 16,509,981 18,781,998
Content production 4,192,846 1,504,931 1,060,419
Advertising sales 8,457,096 5,048,937 7,644,880
Publishing services 334,708 283,714 254,844
Total cost of revenue 32,334,009 23,347,563 27,742,141
Operating expenses:
Selling and distribution 3,587,917 4,337,558 5,560,512
General and administrative 12,186,200 6,791,370 11,301,796
Total operating expenses 15,774,117 11,128,928 16,862,308
Other operating income 550,797 -- 7,220
Income from operations 3,493,387 6,247,907 4,259,017
Other income (expenses) (Note 6) (18,578,516) 2,787,286 (1,136,041)
Income (loss) before provision for
income taxes and minority interest (15,085,129) 9,035,193 3,122,976
Provision for income taxes (Note 7) 571,824 (232,016) 1,989,097
Net income (loss) before minority
interest (15,656,953) 9,267,209 1,133,879
Minority interest 217,192 229,467 370,913
Net income (loss) (15,874,145) 9,037,742 762,966
Dividend on convertible preferred
shares 600,000 -- 600,000
Net income (loss) attributable to
holders of common shares (16,474,145) 9,037,742 162,966
Net income (loss) per share:
Basic - Common Shares (0.12) 0.07 --
Basic - American Depositary Shares (0.24) 0.14 --
Diluted - Common Shares (0.12) 0.06 --
Diluted - American Depositary Shares (0.24) 0.13 --
Condensed Consolidated Statements of Cash Flows
3 months 3 months 3 months
ended ended ended
Sep 30, Sep 30, Jun 30,
2008 2007 2008
(in U.S. Dollars) Unaudited Unaudited Unaudited
Net cash provided by operating
activities 3,196,632 1,550,989 7,603,264
Net cash used in investing
activities (10,874,537) (9,536,253) (19,234,247)
Net cash provided by/(used in)
financing activities¡ (4,217,299) 1,660,617 (1,506,267)
Effect of exchange rate changes 156,411 263,683 666,271
Net decrease in cash (11,738,793) (6,060,964) (12,470,979)
Cash, as at beginning of the period 57,073,797 81,411,707 69,544,776
Cash, as at end of the period 45,335,004 75,350,743 57,073,797
Notes to Financial Information
1) 2007 condensed consolidated balance sheets Information was extracted from the audited financial statements included
in Form 20-F of the Company filed with the Securities and Exchange Commission
on 2) Restricted cash Restricted cash is US dollar cash deposits pledged for the RMB loan facilities granted by banks for RMB working capital purposes. 3) Principal protected note In 4) Accounts receivables and debtors turnover Debtors turnover for the second quarter and third quarter of 2008 were 90 days and 97 days respectively. Our business groups generally granted 90 days to 180 days average credit period to major customers, which is in line with the industry practices in the PRC. 5) Intangible assets Net book value for intangible assets as of 6) Other income (expenses) Other income (expenses) includes net interest income (expenses) and net
other income (expenses). Other expenses for the third quarter of 2008 include
a provision of 7) Provision for income taxes Provision for income taxes includes deferred tax credits of
For more information, please contact:
Media Contact
Ms. Joy Tsang, XFMedia
Phone: +86-21-6113-5999
Email: joy.tsang@xfmedia.cn
Ms. Lindsay Koval, AGG International
Phone: +1-212-614-4170
Email: lindsay@aggintl.com
IR Contact
Mr. Edward Liu, XFMedia
Phone: +86-21-6113-5978
Email: edward.liu@xfmedia.cn
Mr. Howard Gostfrand, American Capital Ventures
Phone: +1-305-918-7000, toll free +1-877-918-0774
Email: info@amcapventures.com
SOURCE Xinhua Finance Media Limited
SOA World Latest Stories
Subscribe to the World's Most Powerful Newsletters
Subscribe to Our Rss Feeds & Get Your SYS-CON News Live!
|
SYS-CON Featured Whitepapers
Most Read This Week |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
| | | | | | | | |
|
|
|
|
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | |
|
|
| SYS-CON MEDIA: | | | | |
| SYS-CON EVENTS: | | | | | |
| INTERNATIONAL SITES: | | | | | | | | | | |
 |
Terms of Use & Our Privacy Statement  About Newsfeeds / Video Feeds |
| Copyright ©1994-2008 SYS-CON Publications, Inc. All Rights Reserved. All marks are trademarks of SYS-CON Media. |
| Reproduction in whole or in part in any form or medium without express written permission of SYS-CON Publications, Inc. is prohibited. |
.gif)
Oracle has announced the general availability of Oracle Service-Oriented Architecture (SOA) Suite 11g, which helps customers and partners to lower costs, improve efficiencies and increase visibility into their businesses and operations. This next-generation business application infrast...
With the spoils of the BEA acquisition now fully baked into the mix -- and with anticipation for what the pending Sun Microsystems buy brings -- Oracle is well on its way to obviating the middleware moniker. Perhaps we should call it "anyware."
Having used both sites for about two weeks, there is still a great deal I am learning to do with both Ulitzer and Ning, but a reader asked if I would do a quick comparison, so I will.
A robust ecosystem of solutions providers is emerging around cloud computing.Here, SYS-CON's Cloud Computing Journal expands its popular list of most active players in the fast-emerging Cloud Ecosystem, from the 'mere' 100 we identified back in January of this year, to half as many aga...
Want to know what gets my blood pressure up? It’s when there’s both a huge shift in thinking around how we should do computing, namely cloud computing, and at the same time, there’s a bunch of information out there that causes confusion. As cloud computing hype spikes to a frenzy, so d...
"What's fueling the interest in RIA?" asked Regev Yativ, President & CEO of Magic Software Enterprises in the Americas, at the beginning of his session at AJAX World RIA Conference & Expo in NYC last month. The answer is the growth of broadband, Yativ said, which has made the Internet ...
