FOCUS MEDIA HOLDING LIMITED 
By SHANGHAI, March 25, 2013 /PRNewswire/ -- Focus Media Holding Limited (Nasdaq: FMCN) today announced its unaudited financial results for the fourth quarter and full year ended December 31, 2012.
Highlights for Fourth Quarter 2012:
-- Total net revenue for the fourth quarter of 2012 was $250.2 million, of
which
-- aggregate net revenue from the LCD display network, in-store
network, poster frame network and movie theater network was $244.1
million, within the Company's guidance of between $237.0 million and
$246.0 million. This represented a slight decrease of 1% from
$247.7 million for the third quarter of 2012 and an increase of 2%
from $238.8 million for the fourth quarter of 2011; and
-- net revenue from the traditional outdoor billboard network for the
fourth quarter of 2012 was $6.1 million, within the Company's
guidance of between $6.0 million and $7.0 million.
-- GAAP net income attributable to Focus Media for the fourth quarter of
2012 was $76.7 million, representing an increase of 19% from $64.6
million for the third quarter of 2012 and an increase of 107% from $37.1
million for the fourth quarter of 2011, and was adversely affected by
the loss from equity method investee, VisionChina, of $38.9 million.
-- Non-GAAP net income attributable to Focus Media for the fourth quarter
of 2012 was $95.1 million, within the Company's guidance of between $93
million and $98 million, slightly increasing from $94.6 million for the
third quarter of 2012 and a slight decline of 1% from $96.0 million for
the fourth quarter of 2011. Please see the below sections on "Use of
Non-GAAP Financial Measures" and "Reconciliation of GAAP to non-GAAP"
for more information about the non-GAAP measures referred to within this
announcement.
-- GAAP net income attributable to Focus Media per fully diluted ADS was
$0.57, representing an increase of 19% from $0.48 per fully diluted ADS
for the third quarter of 2012 and an increase of 111% from $0.27 per
fully diluted ADS in the fourth quarter of 2011.
-- Non-GAAP net income attributable to Focus Media per fully diluted ADS
was $0.71, substantially unchanged from $0.71 per fully diluted ADS for
the third quarter of 2012 and an increase of 1% from $0.70 per fully
diluted ADS for the fourth quarter of 2011.
Highlights for Full Year 2012:
-- Total net revenue for full year 2012 was $927.5 million, an increase of
18% from $786.5 million for full year 2011, of which
-- aggregate net revenue from the LCD display network, in-store
network, poster frame network and movie theater network was $895.5
million, representing an increase of 22% from $737.0 million for
full year 2011 ; and
-- net revenue from the traditional outdoor billboard network was $32.0
million, representing a decrease of 35% from $49.5 million for full
year 2011.
-- GAAP net income attributable to Focus Media for full year 2012 was
$238.1 million, representing an increase of 46% from $162.7 million for
full year 2011.
-- Non-GAAP net income attributable to Focus Media for full year 2012 was
$333.1 million, representing an increase of 17% from $284.1 million for
full year 2011. Please see the below sections on "Use of Non-GAAP
Financial Measures" and "Reconciliation of GAAP to non-GAAP" for more
information about the non-GAAP measures referred to within this
announcement.
-- GAAP net income attributable to Focus Media per fully diluted ADS for
full year 2012 was $1.79, representing an increase of 52% from $1.18 per
fully diluted ADS for full year 2011.
-- Non-GAAP net income attributable to Focus Media per fully diluted ADS
for full year 2012 was $2.50, a 22% increase from $2.05 per fully
diluted ADS for full year 2011.
Highlights for Balance Sheet and Cash Flow Results of Fourth Quarter and Full Year 2012:
-- Cash, cash equivalents, short-term investments and restricted cash were
$1,029.8 million as of December 31, 2012, increasing by 14% from $901.1
million as of September 30, 2012. Our short-term investments consist of
longer term dated cash deposits that earn a higher interest rate as
compared to cash and cash equivalents.
-- Bank loans were $200.0 million which were all long-term bank loans as of
December 31, 2012 secured by onshore renminbi cash deposits, as compared
to bank loans of $200.0 million inclusive of short-term bank loans of
$100.0 million as of September 31, 2012, which was renewed and converted
into long-term bank loans in the fourth quarter of 2012. Long-term bank
loans of $100.0 million outstanding as of September 30, 2012, were also
extended to 2018 in the fourth quarter of 2012. The bank loan as of
December 31, 2012 consisted of a $200.0 million term loan facility
agreement entered into on November 21, 2012 with DBS Bank Ltd., Hong
Kong Branch ("DBS") and was used to repay all of the Company's
outstanding indebtedness under its previous credit facilities with DBS.
-- Net accounts receivable for the LCD display network, in-store network,
poster frame network and movie theater network was $275.6 million as of
December 31, 2012, a decrease of 3% from $284.1 million as of September
30, 2012. Days sales outstanding was 100 days in the fourth quarter of
2012 versus 92 days for the third quarter of 2012. Days sales
outstanding was 97 days for full year 2012 versus 85 days for full year
2011. As a supplementary cash collection metric, the actual cash
collection from accounts receivables and prepayments from the
advertisers was $281.7 million in the fourth quarter of 2012, as
compared to $239.8 million in the fourth quarter of 2011.
-- Net cash inflow from operating activities in the fourth quarter of 2012
and full year of 2012 were $142.4 million and $358.3 million,
respectively, representing an 11% increase from $128.8 million for the
fourth quarter of 2011 and a 28% increase from $280.2 million for full
year 2011, respectively.
-- Net cash inflow from operating activities for the fourth quarter of
2012, after deducting the purchase of equipment and subsidiaries was
$137.6 million, an increase of 22% from $112.7 million for the fourth
quarter of 2011. Net cash inflow from operating activities for full
year 2012, after deducting the purchase of equipment and subsidiaries
was $335.7 million, representing an increase of 47% from $228.0 million
for full year 2011.
-- Capital expenditures were $4.8 million and $19.6 million respectively
for the fourth quarter and full year of 2012, mostly attributable to
upgrading our LCD screens into interactive screens and network expansion
in and into lower tier cities in China.
Jason Jiang, Chairman and Chief Executive Officer of Focus Media said, "In the fourth quarter of 2012, our operation's performance was in-line with our previous expectations as we continue to be affected by a slower overall advertising spending in China."
Kit Low, the Company's Chief Financial Officer added, "In the fourth quarter of 2012, the Company's aggregate net revenue year-on-year growth in our LCD display, poster frame business, in-store and movie theater network was 2%. GAAP net income attributable to Focus Media and Non-GAAP net income attributable to Focus Media for the fourth quarter of 2012 was $76.7 million and $95.1 million, respectively. In the fourth quarter of 2012, the Company generated a net cash inflow from operating activities after deducting the purchases of equipment and subsidiaries of $137.6 million."
Fourth Quarter 2012 financial results
Advertising net revenue from the LCD display network was $127.5 million for the fourth quarter of 2012, representing a slight decrease of 1% from $128.4 million for the third quarter of 2012 and a decrease of 7% from $137.4 million for the fourth quarter of 2011. The decrease in net revenue was due to a weaker brand advertising environment.
Advertising net revenue from the poster frame network was $85.7 million for the fourth quarter of 2012, representing an increase of 5% from $81.6 million for the third quarter of 2012 and an increase of 33% from $64.5 million for the fourth quarter of 2011, which was driven by the strength of promotional budget spending in the market.
Advertising net revenue from the in-store network was $11.1 million for the fourth quarter of 2012, representing a decrease of 23% from $14.5 million for the third quarter of 2012 and a decrease of 31% from $16.1 million for the fourth quarter of 2011. The decrease was mostly attributable to less advertising spending from domestic dairy producers.
Advertising net revenue from the movie theater network was $19.8 million for the fourth quarter of 2012, representing a decrease of 15% from $23.2 million for the third quarter of 2012 due to seasonal factors and a decrease of 5% from $20.8 million for the fourth quarter of 2011. The decrease in net revenue was mainly due to a weaker brand advertising environment.
Advertising net revenue from the traditional outdoor billboard network was $6.1 million for the fourth quarter of 2012, representing a decrease of 21% from $7.7 million for the third quarter of 2012 and a decrease of 56% from $13.9 million for the fourth quarter of 2011 due to combination of downsizing of the division and a weaker advertising environment. Due to medium term advertising spending uncertainties and the continued view of the Company that the traditional outdoor billboard network is not a core business segment, the Company has decided to downsize this business segment by divesting four entities within the segment. Two of which have been divested prior to end of the third quarter of 2012 and the other two were divested in the fourth quarter of 2012. Consequently, $1.2 million of revenues of two divested entities for the fourth quarter of 2012, $4.8 million of revenues of four divested entities for the third quarter of 2012 and $3.8 million of revenues of four divested entities for the fourth quarter of 2011 have been reclassified into "Net loss from discontinued operations" in the consolidated statements of operations. Other relevant items in the consolidated statements of operations were also reclassified accordingly to reflect the reclassification arising from the discontinued operations of the 4 entities.
Non-GAAP gross profit from the LCD display network for the fourth quarter of 2012 was $98.3 million, representing a decrease of 2% from $99.8 million for the third quarter of 2012 and a decrease of 13% from $113.6 million for the fourth quarter of 2011. The decrease in non-GAAP gross profit was a result of quarter-on-quarter and year-on-year revenue declines while the cost of sales remained largely unchanged in the LCD display network
Non-GAAP gross profit from the poster frame network for the fourth quarter of 2012 was $56.9 million, representing an increase of 8% from $52.5 million for the third quarter of 2012, and an increase of 58% from $35.9 million for the fourth quarter of 2011.
Non-GAAP gross profit from the in-store network for the fourth quarter of 2012 was $5.8 million, representing a decrease of 36% from $9.1 million for the third quarter of 2012 and a decrease of 55% from $12.8 million in the fourth quarter of 2011 mainly due to the combination of a lower revenue and relatively unchanged cost of sales.
Non-GAAP gross profit from the movie theater network for the fourth quarter of 2012 was $10.9 million, representing a decrease of 25% from $14.5 million for the third quarter of 2012 and a decrease of 21% from $13.8 million for the fourth quarter of 2011 due to a lower revenue and a larger cost of sales as a result of network expansion.
Non-GAAP gross profit from the traditional outdoor billboard network for the fourth quarter of 2012 was $0.8 million, compared to $1.2 million loss for the third quarter of 2012 and a decrease of 62% from $2.1 million for the fourth quarter of 2011.
Non-GAAP operating expense for the fourth quarter of 2012 was $57.9 million, substantially unchanged from $57.5 million for the third quarter of 2012. It also represented a decrease of 7% from $62.2 million for the fourth quarter of 2011.
Net cash inflow from operating activities in the fourth quarter of 2012 and full year of 2012 were $142.4 million and $358.3 million, respectively, representing an 11% increase from $128.8 million for the fourth quarter of 2011 and a 28% increase from $280.2 million for full year 2011, respectively.
Net cash inflow from investing activities for the fourth quarter of 2012 was $53.3 million. In the fourth quarter of 2012, the Company incurred capital expenditures of $4.8 million. Meanwhile, the Company received net cash inflows from disposal of short-term investments after deducting the placement of restricted cash totaling $57.3 million during the quarter. Short-term investments are longer term dated cash deposits normally with maturities of between three and twelve months that earn higher interest rate as compared to cash and cash equivalents. Restricted cash is deposited in bank accounts as security for bank borrowings.
Net cash used for financing activities for the fourth quarter of 2012 was $17.8 million, which consisted of a dividend paid by the Company declared in the third quarter of 2012.
Operating Data Summary
The Company is providing a breakdown of operating data as follows:
1) The approximate number of displays in the LCD display network was as follows:
As of December 31, 2012 As of September 30, 2012
LCD screens (note) 136,711 136,870
LCD 2.0 digital picture screens 35,615 35,535
Total for LCD display network 172,326 172,405
Note: The decrease in the total number of LCD screens as of December 31, 2012 as compared to that as of September 30, 2012 was due to network optimization. Of the total LCD screens of 136,711 as of December 31, 2012, 10,534 screens were operated through our regional distributors as compared to 9,589 screens as of September 30, 2012.
2) The approximate number of devices in the poster frame network was as follows:
As of December 31, 2012 As of September 30, 2012
Frame 1.0 picture frames (note) 505,571 497,269
Frame 2.0 digital picture screens 36,341 35,892
Total 541,912 533,161
Note: The increase in the total number of Frame 1.0 picture frames as of December 31, 2012 as compared to that as of September 30, 2012 was due to organic network expansion.
3) The total number of displays installed in our in-store network was approximately 52,267 as of December 31, 2012, slightly decreasing from 53,239 as of September 30, 2012 due to network optimization.
4) The number of movie screens on which the Company had the right to lease advertising time as of December 31, 2012 was approximately 2,730, as compared to 2,470 as of September 30, 2012. The increase was due to organic network expansion
Arrangements Regarding Announced Recurring Shareholder Payments
On January 10, 2012, the Company announced a policy starting from 2012 to issue a recurring dividend with payments expected to equal approximately 25% of the Company's annual non-GAAP net income of the preceding fiscal year and to reserve up to an additional 30% of the Company's annual non-GAAP net income of the preceding fiscal year (starting from 2012 earnings) that can be used, at the discretion of the board of directors, to increase the dividend payment or the size of our share purchase program in effect at that time (the "dividend policy").
The Company announced on November 27, 2012 that its board of directors had resolved to postpone approval of future cash dividends through December 31, 2012 due to ongoing considerations relating to the going private proposal.
Due to the signing on December 19, 2012 of the going private merger agreement, which prohibits the Company from paying any dividends or repurchasing any of its ordinary shares or ADS pending consummation of the merger, the Company's board of directors has resolved to terminate the dividend policy effective December 31, 2012.
Announcement of the Extraordinary General Meeting of Shareholders to Vote on the Going Private Transaction
The Company announced today that it has called an extraordinary general meeting of the shareholders to be held on April 29, 2013 to consider and vote on, among other things, the proposal to authorize and approve the previously announced agreement and plan of merger, dated December 19, 2012, among Giovanna Parent Limited, Giovanna Acquisition Limited and the Company, the plan of merger and the transactions contemplated thereby (including the merger).
Foreign Currency Translation
Assets and liabilities are translated at the exchange rate as of December 31, 2012, which was $1 to RMB 6.2855. Equity accounts are translated at historical exchange rates and revenues, expenses, gains and losses are translated using the average rate for the fourth quarter of 2012, which was $1 to RMB 6.2926. Translation adjustments are reported as a component of comprehensive income.
USE OF NON-GAAP FINANCIAL MEASURES
In addition to Focus Media's consolidated financial results under GAAP, the Company also provides non-GAAP financial measures, including non-GAAP gross profit (cumulatively and by segment), non-GAAP operating expenses, non-GAAP operating profit (loss), non-GAAP net income and non-GAAP fully-diluted earnings per ADR, all excluding share-based compensation expenses, amortization of acquired intangible assets, loss from equity investment and goodwill impairment. Management uses these non-GAAP financial measures to better assess operating performance of the Company. The Company believes that these non-GAAP financial measures provide investors with another method for assessing Focus 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, and should refer to the reconciliation of GAAP results with non-GAAP results in the attached financial information. The Company believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing the performance of Focus Media and when planning and forecasting for future periods. The Company computes its non-GAAP financial measures using a consistent method from quarter to quarter, mostly excluding share-based compensation expenses, amortization of acquired intangible assets, loss from equity investment and goodwill impairment. The accompanying tables have more details on the GAAP financial measures that are most directly comparable to non-GAAP financial measures and the related reconciliation between these financial measures.
Focus Media Holding Ltd.
Reconciliation of GAAP to non-GAAP
(U.S. Dollars in thousands, except percentages, share and per-share data)
(Unaudited)
Three months ended December 31, 2012
------------------------------------
GAAP (1) (2) (3) (4) Non-GAAP
---- --- --- --- --- --------
Gross Profit (loss)
LCD display network 97,431 354 478 - 98,263
Poster frame network 56,776 - 74 - 56,850
In-store network 5,841 - - 5,841
Movie theater network 10,925 - - 10,925
Traditional outdoor billboard network 333 - 418 - 751
--- --- --- --- ---
Total Gross Profit 171,306 354 970 - 172,630
------- --- --- --- -------
General and administrative 32,968 (11,638) 21,330
Selling and marketing 51,973 (998) (521) 50,454
Other operating income, net (13,897) (13,897)
------- -------
Total operating expense 71,044 (12,636) (521) 57,887
------ ------- ---- ------
Operating profit from continuing 100,262 12,990 1,491 114,743
operations
Profit from continuing operations 103,506 12,990 1,491 1,526 119,513
before income taxes and loss
from equity method investee
Net profit from continuing 76,296 12,990 1,491 4,126 94,903
operations
Net loss from discontinued (232) 174 (375) (433)
operations
Net income attributable to Focus 76,672 12,990 1,665 4,126 (375) 95,078
Media
Basic net income from continuing 0.59 0.73
operations attributable to Focus
Media per ADS
Diluted net income from continuing 0.57 0.71
operations attributable to Focus
Media per ADS
Basic net income from discontinued 0.00 0.00
operations attributable to Focus
Media per ADS
Diluted net income from discontinued 0.00 0.00
operations attributable to Focus
Media per ADS
Basic net income attributable to Focus 0.59 0.73
Media per ADS
Diluted net income attributable to Focus 0.57 0.71
Media per ADS
ADS used in calculating basic income 130,265,271 130,265,271
per ADS
ADS used in calculating diluted income 134,529,688 134,529,688
per ADS
(1). Share-based compensation.
(2). Amortization of acquired intangible assets.
(3). loss from equity investment, including equity method investee (VisionChina) and cost method investment
(4). Gain from disposal of previously acquired subsidiaries
Three months ended September 30, 2012
GAAP (1) (2) (3) (4) Non-GAAP
---- --- --- --- --- --------
Gross Profit (loss)
LCD display network 98,443 495 813 - - 99,751
Poster frame network 52,341 - 129 - - 52,470
In-store network 9,082 - - - - 9,082
Movie theater network 14,471 - - - - 14,471
Traditional outdoor billboard network (1,708) - 462 - - (1,246)
------ --- --- --- --- ------
Total Gross Profit 172,629 495 1,404 - - 174,528
------- --- ----- --- --- -------
General and administrative 36,132 (14,884) - - - 21,248
Selling and marketing 53,123 (1,438) (552) - - 51,133
Other operating income, net (14,890) - - - - (14,890)
------- --- --- --- --- -------
Total operating expense 74,365 (16,322) (552) - - 57,491
------ ------- ---- --- --- ------
Operating profit from continuing 98,264 16,817 1,956 - - 117,037
operations
Profit from continuing operations 102,346 16,817 1,956 - - 121,119
before income taxes and loss
from equity method investee
Net profit from continuing 65,334 16,817 1,956 9,499 - 93,606
operations
Net profit/ (loss) from discontinued (1,008) - 806 - 908 706
operations
Net income attributable to Focus 64,590 16,817 2,762 9,499 908 94,576
Media
Basic net income from continuing 0.52 0.74
operations attributable to Focus
Media per ADS
Diluted net income from continuing 0.49 0.71
operations attributable to Focus
Media per ADS
Basic net income from discontinued (0.01) 0.00
operations attributable to Focus
Media per ADS
Diluted net income from discontinued (0.01) 0.00
operations attributable to Focus
Media per ADS
Basic net income attributable to Focus 0.51 0.74
Media per ADS
Diluted net income attributable to Focus 0.48 0.71
Media per ADS
ADS used in calculating basic income 127,777,021 127,777,021
per ADS
ADS used in calculating diluted income 133,518,344 133,518,344
per ADS
(1). Share-based compensation.
(2). Amortization of acquired intangible assets.
(3). Loss from equity method investee (VisionChina)
(4). Goodwill impairment
Three months ended December 31, 2011
GAAP (1) (2) (3) Non-GAAP
---- --- --- --- --------
Gross Profit
LCD display network 112,179 286 1,100 - 113,565
Poster frame network 35,036 - 890 - 35,926
In-store network 12,797 - - - 12,797
Movie theater network 13,803 - - - 13,803
Traditional outdoor billboard network 1,591 - 459 - 2,050
----- --- --- --- -----
Total Gross Profit 175,406 286 2,449 - 178,141
------- --- ----- --- -------
General and administrative 37,092 (14,267) - - 22,825
Selling and marketing 49,606 (1,029) (1,055) - 47,522
Other operating income, net (8,181) - - - (8,181)
------ --- --- --- ------
Total operating expense 78,517 (15,296) (1,055) - 62,166
------ ------- ------ --- ------
Operating profit from continuing 96,889 15,582 3,504 - 115,975
operations
Profit before tax from continuing 100,941 15,582 3,504 - 120,027
operations
Net profit from continuing 37,037 15,582 3,504 38,882 95,005
operations
Net loss from discontinued (1,538) 980 (558)
operations
Net income attributable to Focus 37,093 15,582 4,484 38,882 96,041
Media
Basic net income from continuing 0.29 0.73
operations attributable to Focus
Media per ADS
Diluted net income from continuing 0.28 0.70
operations attributable to Focus
Media per ADS
Basic net income from discontinued (0.01) 0.00
operations attributable to Focus
Media per ADS
Diluted net income from discontinued (0.01) 0.00
operations attributable to Focus
Media per ADS
Basic net income attributable to Focus 0.28 0.73
Media per ADS
Diluted net income attributable to Focus 0.27 0.70
Media per ADS
===
ADS used in calculating basic income 132,073,143 132,073,143
per ADS
---
ADS used in calculating diluted 136,912,952 136,912,952
income per ADS
---
(1). Share-based compensation.
(2). Amortization of acquired intangible assets.
(3). Loss from equity method investee (VisionChina)
Focus Media Holding Ltd.
Reconciliation of GAAP to non-GAAP
(U.S. Dollar in thousands, except share and per-share data)
(Unaudited)
Twelve months ended December 31, 2012
GAAP (1) (2) (3) (4) Non-GAAP
---- --- --- --- --- --------
Gross Profit (loss)
LCD display network 352,346 1,821 3,136 357,303
Poster frame network 183,873 596 184,469
In-store network 30,284 30,284
Movie theater network 43,994 43,994
Traditional outdoor billboard network (2,592) 1,805 (787)
------ ----- ----
Total Gross Profit 607,905 1,821 5,537 615,263
------- ----- ----- -------
General and administrative 136,704 (56,561) 80,143
Selling and marketing 194,095 (5,255) (2,260) 186,580
Other operating income, net (38,588) (38,588)
------- -------
Total operating expense 292,211 (61,816) (2,260) 228,135
------- ------- ------ -------
Operating profit from continuing 315,694 63,637 7,797 387,128
operations
Profit before tax from continuing 331,459 63,637 7,797 1,526 404,419
operations
Net profit from continuing 237,001 63,637 7,797 20,087 328,522
operations
Net profit/ (loss) from (1,065) 3,005 533 2, 473
discontinued operations
Net income attributable to Focus 238,078 63,637 10,802 20,087 533 333,137
Media
Basic net income from continuing 1.86 2.57
operations attributable to Focus
Media per ADS
Diluted net income from continuing 1.80 2.48
operations attributable to Focus
Media per ADS
Basic net income from discontinued (0.01) 0.02
operations attributable to Focus
Media per ADS
Diluted net income from discontinued (0.01) 0.02
operations attributable to Focus
Media per ADS
Basic net income attributable to 1.85 2.59
Focus Media per ADS
Diluted net income attributable to 1.79 2.50
Focus Media per ADS
ADS used in calculating basic 128,809,554 128,809,554
income per ADS
ADS used in calculating diluted 133,250,339 133,250,339
income per ADS
(1). Share-based compensation.
(2). Amortization of acquired intangible assets.
(3). loss from equity investment, including equity method investee (VisionChina) and cost method investment
(4). Loss from disposal of previously acquired subsidiaries, of which gain from disposal of subsidiaries was $0.4 million and loss from impairment of goodwill was $0.9 million.
Focus Media Holding Ltd.
Reconciliation of GAAP to non-GAAP
(U.S. Dollar in thousands, except percentages, share and per-share data)
(Unaudited)
Twelve months ended December 31, 2011
GAAP (1) (2) (3) Non- GAAP
---- --- --- --- ---------
Gross Profit
LCD display network 358,518 880 4,409 - 363,807
Poster frame network 75,079 - 4,175 - 79,254
In-store network 35,792 - - - 35,792
Movie theater network 25,082 - 43 - 25,125
Traditional outdoor billboard network 7,610 - 1,808 - 9,418
----- --- ----- --- -----
Total Gross Profit 502,081 880 10,435 - 513,396
------- --- ------ --- -------
General and administrative 126,518 (57,119) - - 69,399
Selling and marketing 146,392 (3,803) (4,220) - 138,369
Other operating (income), net (16,147) - - - (16,147)
------- --- --- --- -------
Total operating expense 256,763 (60,922) (4,220) - 191,621
------- ------- ------ --- -------
Operating profit from continuing 245,318 61,802 14,655 - 321,775
operations
Profit before tax from continuing 260,139 61,802 14,655 - 336,596
operations
Net profit from continuing 161,790 61,802 14,655 43,633 281,880
operations
Net profit from discontinued operations (978) - 1,343 - 365
Net income attributable to Focus 162,677 61,802 15,998 43,633 284,110
Media
Basic net income from continuing 1.21 2.11
operations per ADS
Diluted net income from continuing 1.18 2.04
operations per ADS
Basic net income from discontinued 0.00 0.01
operations per ADS
Diluted net income from discontinued 0.00 0.01
operations per ADS
Basic net income attributable to Focus 1.21 2.12
Media per ADS
Diluted net income attributable to 1.18 2.05
Focus Media per ADS
===
ADS used in calculating basic income 134,241,550 134,241,550
per ADS
---
ADS used in calculating diluted income 138,320,991 138,320,991
per ADS
---
(1). Share-based compensation.
(2). Amortization of acquired intangible assets.
(3). Loss from equity method investee (VisionChina)
CONFERENCE CALL
1) The Company will host a conference call to discuss the fourth quarter and full year 2012 results at 9:00 p.m. U.S. Eastern Time on March 25, 2013 (6:00 p.m. U.S. Pacific Time on March 25, 2013 and 9:00 a.m. Beijing/Hong Kong Time on March 26, 2013). The dial-in details for the live conference call are set forth below:
International Toll Dial-In Number: + 65.6723.9381
Local Dial-In Number(s):
China, Domestic Mobile: 400.620.8038
China, Domestic: 800.819.0121
Hong Kong: +852.2475.0994
United States: +1.718.354.1231
International Toll Free Dial-in Number(s):
Hong Kong: +852.800.930.346
United States: +1.866.519.4004
Conference ID # 23817537
2) A replay of the call will be available from 0:00 a.m. March 26 - 8:59 a.m. April 2, 2013 (US Eastern Time). The dial-in details for the replay are set forth below:
International Toll Dial-In Number: +61.2.8199.0299
Local Dial-In Number(s):
Hong Kong: +852.3051.2780
United States: +1.646.254.3697
International Toll Free Dial-in Number(s):
China 400: 400.120.0932
China 800: 800.870.0205
Hong Kong: +852.800.963.117
United States: +1.855.452.5696
Conference ID # 23817537
Additionally, a live and archived web cast of this call will be available on the Focus Media web site at http://ir.focusmedia.cn
SAFE HARBOR: FORWARD-LOOKING STATEMENTS
This press release includes statements that may constitute forward-looking statements made pursuant to the safe harbor provision 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" and similar statements. Focus Media may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission on forms 20-F and 6-K., 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 Focus Media's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Potential risks and uncertainties include, but are not limited to, risks outlined in Focus Media's filings with the U.S. Securities and Exchange Commission, including its registration statements on Form F-1, F-3 and 20-F, in each case as amended. Focus Media does not undertake any obligation to update any forward-looking statement, except as required under applicable law.
This release is not an offer of securities for sale in the United States. Securities may not be offered or sold in the United States absent registration or an exemption from registration. Any public offering of securities to be made in the United States will be made by means of a prospectus that may be obtained from the issuer or selling security holder and that will contain detailed information about the company and management, as well as financial statements.
ABOUT FOCUS MEDIA HOLDING LIMITED
Focus Media Holding Limited (Nasdaq: FMCN) operates China's largest lifestyle targeted interactive digital media network. The Company offers one of the most comprehensive targeted interactive digital media platforms aimed at Chinese consumers at various urban locations. The increasingly fragmented and mobile lifestyle of Chinese urban consumers has created the need for more efficient media means to capture consumer attention. Focus Media's mission is to build an increasingly comprehensive and measurable interactive urban media network that reaches consumers at various out-of-home locations.
Focus Media Holding Limited
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(U.S Dollars in Thousands)
2012-12-31 2012-09-30 2011-12-31
ASSETS
Current assets
Cash and cash
equivalents 674,133 491,729 331,218
Restricted cash - 99,043 99,673
Short-term investments 115,125 211,238 226,047
Accounts receivable, net 282,977 294,102 249,206
Prepaid expenses and
other current assets 83,048 71,616 62,604
Rental deposits 57,152 60,739 60,913
Held-for-sale assets-
current - 4,660 -
Other current assets 2,418 2,262 3,222
----- ----- -----
Total current assets 1,214,853 1,235,389 1,032,883
Restricted cash 240,554 99,043 99,673
Rental deposits, non-
current 3,447 3,252 4,047
Equipment, net 66,073 66,044 79,042
Acquired intangible
assets, net 3,326 4,776 35,025
Goodwill 439,384 439,201 459,113
Equity method investment 1,001 5,040
Held-for-sale assets-
non-current - 21,008 20,534
Other long term assets 7,248 14,642 11,120
Total assets 1,975,886 1,888,395 1,741,437
========= ========= =========
LIABILITIES AND EQUITY
Current liabilities
Short-term bank loan - 100,000 100,000
Accounts payable 14,810 16,828 19,448
Accrued expenses and
other current
liabilities 179,441 188,569 173,754
Income taxes payable 69,437 43,745 35,463
Amount due to related
parties 577 1,554 2,196
Held-for-sale
liabilities-current - 9,468 -
Deferred tax liabilities 31,464 29,339 33,550
------ ------ ------
Total current
liabilities 295,729 389,503 364,411
Long-term loan 200,000 100,000 71,000
Acquisition purchase
price payable - - 13,106
Held-for-sale
liabilities-non-
current - 6,159 -
Deferred tax
liabilities, non-
current 12,201 13,190 20,099
------ ------ ------
Total liabilities 507,930 508,852 468,616
------- ------- -------
Equity
Ordinary shares 33 32 32
Additional paid in
capital 1,561,435 1,548,446 1,533,617
Subscription receivable - - -
Accumulated deficit (214,554) (291,226) (400,276)
Accumulated other
comprehensive income 123,015 113,318 119,796
------- ------- -------
Total Focus Media equity 1,469,929 1,370,570 1,253,169
Noncontrolling interests (1,973) 8,973 19,652
------ ----- ------
Total equity 1,467,956 1,379,543 1,272,821
--------- --------- ---------
Total liabilities and
equity 1,975,886 1,888,395 1,741,437
========= ========= =========
Focus Media Holding Limited
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(U.S Dollars in thousands, except earnings per ADS and ADS data)
Three months ended Twelve Months ended
------------------ -------------------
2012-12-31 2012-9-30 2011-12-31 2012-12-31 2011-12-31
Revenues
LCD display network 134,372 135,777 150,452 491,290 486,550
In-store network 11,311 14,879 17,559 53,149 61,669
Poster frame network 89,679 86,056 70,595 319,522 202,548
Movie theater network 20,358 23,753 21,658 78,591 53,330
Traditional outdoor 6,141 7,751 14,242 32,490 50,358
billboard network
Total gross revenues 261,861 268,216 274,506 975,042 854,455
Less: Sales taxes 11,672 12,740 21,807 47,541 67,923
------ ------ ------ ------ ------
Total net revenue (note 1) 250,189 255,476 252,699 927,501 786,532
------- ------- ------- ------- -------
Cost of revenues
LCD display network 30,025 29,976 25,229 113,135 85,847
In-store network 5,254 5,384 3,258 21,504 20,582
Poster frame network 28,903 29,268 29,511 117,685 110,370
Movie theater network 8,924 8,762 6,980 32,661 25,753
Traditional outdoor 5,777 9,457 12,315 34,611 41,899
billboard network
Total cost of revenues 78,883 82,847 77,293 319,596 284,451
------ ------ ------ ------- -------
Gross profit 171,306 172,629 175,406 607,905 502,081
------- ------- ------- ------- -------
Operating expenses
General and administrative 32,968 36,132 37,092 136,704 126,518
Selling and marketing 51,973 53,123 49,606 194,095 146,392
Other operating (income) (13,897) (14,890) (8,181) (38,588) (16,147)
expenses, net
Total operating expenses 71,044 74,365 78,517 292,211 256,763
------ ------ ------ ------- -------
Operating profit 100,262 98,264 96,889 315,694 245,318
Interest income 6,181 5,366 4,636 22,358 15,538
Interest expense (1,411) (1,284) (584) (5,067) (717)
Loss from cost method (1,526) - - (1,526) -
equity investment
Income from continuing 103,506 102,346 100,941 331,459 260,139
operations before
income taxes
Provision for income taxes 24,610 27,513 25,022 75,897 54,716
Loss from equity method 2,600 9,499 38,882 18,561 43,633
investee
Net income from 76,296 65,334 37,037 237,001 161,790
continuing operations
Net loss from discontinued (232) (1,008) (1,538) (1,065) (978)
operations, net of tax
Net income 76,064 64,326 35,499 235,936 160,812
Less: Net loss attributable (608) (264) (1,594) (2,142) (1,865)
to noncontrolling
interests
Net income attributable 76,672 64,590 37,093 238,078 162,677
to Focus Media
Net income from continuing
operations per ADS
- basic 0.59 0.52 0.29 1.86 1.21
- diluted 0.57 0.49 0.28 1.80 1.18
Net income from discontinued
operations per ADS
- basic 0.00 (0.01) (0.01) (0.01) 0.00
- diluted 0.00 (0.01) (0.01) (0.01) 0.00
Net income attributable to
Focus Media per ADS
- basic 0.59 0.51 0.28 1.85 1.21
==== ==== ==== ==== ====
- diluted 0.57 0.48 0.27 1.79 1.18
==== ==== ==== ==== ====
ADS used in calculating 130,265,271 127,777,021 132,073,143 128,809,554 134,241,550
basic income per ADS
ADS used in calculating 134,529,688 133,518,344 136,912,952 133,250,339 138,320,991
diluted income per ADS
Focus Media Holding Limited
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(U.S Dollars in thousands, except earnings per ADS and ADS data)
Three months ended Twelve months ended
------------------ -------------------
2012-12-31 2012-09-30 2011-12-31 2012-12-31 2011-12-31
Net income 76,064 64,326 35,499 235,936 160,812
Other comprehensive
income, net of tax
Foreign currency 9,687 (2,964) 8,256 2,638 40,190
translation adjustments
Share of post-acquisition 76 (43) 256 552 1,639
movements in equity
investee's other
comprehensive income
Comprehensive income 85,827 61,319 44,011 239,126 202,641
Comprehensive loss (542) (286) (1,429) (2,171) (1,491)
attributable to
non-controlling interests
Comprehensive income 86,369 61,605 45,440 241,297 204,132
attributable to Focus
Media
Note 1: Details of net revenues by segment are as follows (U.S. Dollars in thousands):
Three months ended Twelve months ended
------------------ -------------------
2012-12-31 2012-9-30 2011-12-31 2012-12-31 2011-12-31
Gross revenues
LCD display network 134,372 135,777 150,452 491,290 486,550
In-store network 11,311 14,879 17,559 53,149 61,669
Poster frame network 89,679 86,056 70,595 319,522 202,548
Movie theater network 20,358 23,753 21,658 78,591 53,330
Traditional outdoor 6,141 7,751 14,242 32,490 50,358
billboard network
Total gross revenues 261,861 268,216 274,506 975,042 854,455
------- ------- ------- ------- -------
Less: Sales taxes
LCD display network 6,916 7,358 13,044 25,809 42,185
In-store network 216 413 1,504 1,361 5,295
Poster frame network 4,000 4,447 6,048 17,964 17,099
Movie theater network 509 520 875 1,936 2,495
Traditional outdoor 31 2 336 471 849
billboard network
Total sales tax 11,672 12,740 21,807 47,541 67,923
------ ------ ------ ------ ------
Net revenues
LCD display network 127,456 128,419 137,408 465,481 444,365
In-store network 11,095 14,466 16,055 51,788 56,374
Poster frame network 85,679 81,609 64,547 301,558 185,449
Movie theater network 19,849 23,233 20,783 76,655 50,835
Traditional outdoor 6,110 7,749 13,906 32,019 49,509
billboard network
Total net revenues 250,189 255,476 252,699 927,501 786,532
======= ======= ======= ======= =======
Focus Media Holding Limited
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASHFLOWS
(U.S. Dollars in thousands)
Three months ended Twelve months ended
------------------ -------------------
2012-12-31 2011-12-31 2012-12-31 2011-12-31
Operating activities:
Net income 76,064 35,499 235,936 160,812
Adjustments to reconcile net income to net cash
provided by operating activities:
Bad debt expenses 4,182 5,755 13,341 16,013
Share-based compensation 12,990 15,582 63,637 61,802
Depreciation 7,820 7,601 30,741 28,787
Amortization of acquired intangible assets 1,665 4,484 10,802 15,998
Loss from cost method investee 1,526 - 1,526 -
Loss from equity method investee 2,600 38,882 18,561 43,632
Change in fair value of contingent consideration - - 1,179 -
liabilities for acquisition of subsidiaries
Others (1,523) (199) 621 1,910
Net changes in current assets and current liabilities, 37,121 21,189 (18,094) (48,796)
net of effects of acquisitions
Net cash provided by operating activities 142,445 128,793 358,250 280,158
------- ------- ------- -------
Investing activities:
Purchase of equipment and other long term assets (4,807) (15,494) (19,645) (38,918)
Payment paid to acquire subsidiaries, net of cash - (606) (2,929) (13,228)
acquired
Investment in equity method investee - - - (61,003)
Cash deposited as restricted cash (40,719) (199,346) (67,232) (199,346)
Cash received from the release of restricted cash 26,366
Proceeds received from the sale of short-term 114,916 166,643 470,977 1,044,680
investments
Proceeds used in investment in short-term (16,937) (186,371) (359,595) (1,124,034)
investments
Proceeds received from disposal of fixed assets 69 100 409 672
Proceeds from disposal of subsidiaries 1,392 - 2,519 7,296
Cash of disposed entities (596) - (2,378) -
Net cash provided by/(used in) investing 53,318 (235,074) 48,492 (383,881)
activities
Financing activities:
Proceeds from short-term loan - 145,000 34,794 175,000
Repayment of short-term loan (100,000) (75,000) (134,017) (75,000)
Proceeds from long-term loan 200,000 71,000 229,000 71,000
Repayment from long-term loan (100,000) - (100,000) -
Cash used for share repurchase - (144,269) (41,445) (213,375)
Dividend payout (17,846) - (53,148) -
(Repayment to) capital injection from noncontrolling - (321) - (397)
interests
Proceeds from issuance of ordinary shares, net of - 1,236 34 3,063
issuance costs
Net cash provided by/(used in) financing activities (17,846) (2,354) (64,782) (39,709)
------- ------ ------- -------
Effect of exchange rate changes 3,504 4,531 955 20,174
----- ----- --- ------
Net increase in cash and cash equivalents 181,421 (104,104) 342,915 (123,258)
Cash and cash equivalents, beginning of period 491,729 435,322 331,218 454,476
------- ------- ------- -------
Add: Cash and cash equivalents in held-for-sale 983 - - -
assets, beginning of period
Cash and cash equivalents, end of period 674,133 331,218 674,133 331,218
======= ======= ======= =======
Supplemental disclosure of cash flow information:
Income taxes paid 2,684 2,970 39,791 27,582
Interest paid 1,487 560 4,885 665
===== === ===== ===
Supplemental disclosure of non-cash investing
activity:
Accrual for acquisition of subsidiaries 671 19,584 671 19,584
=== ====== === ======
SOURCE Focus Media Holding Limited
