FOCUS MEDIA HOLDING LIMITED 
By SHANGHAI, Nov. 17, 2011 /PRNewswire-Asia/ -- Focus Media Holding Limited (Nasdaq: FMCN), China's largest out-of-home lifestyle interactive targeted digital media group, today announced its unaudited financial results for the third quarter ended September 30, 2011.
Highlights for Third Quarter 2011:
-- Total net revenue for the third quarter of 2011 was $210.7 million, of
which
-- Aggregate net revenue from the LCD display network (including the movie
theater network), in-store network and poster frame network was $196.1
million, which exceeded by approximately 11% the mid-point of the
Company's guidance range of $175-177 million. This represented
year-on-year growth of 53% from $128.4 million for the third quarter of
2010 and quarter-on-quarter growth of 18% from $166.1 million for the
second quarter of 2011.
-- Net revenue from the traditional outdoor billboard network for the third
quarter of 2011 was $14.6 million, which exceeded by approximately 22%
the midpoint of the Company's guidance of $11-13 million. This
represented year-on-year growth of 64% from $8.9 million for the third
quarter of 2010 and quarter-on-quarter growth of 13% from $12.9 million
for the second quarter of 2011.
-- GAAP net income attributable to Focus Media for the third quarter of
2011 was $62.2 million, representing an increase of 45% from $42.8
million for the second quarter of 2011 and compared to $112.7 million
for the third quarter of 2010 (which included one-off income of $79.0
million resulting from the sale of our Internet business).
-- Non-GAAP net income attributable to Focus Media for the third quarter of
2011 was $82.7 million, exceeding the mid-point of the Company's
guidance range of $68-$70 million by 20%, representing year-on-year
growth of 60% from non-GAAP net income attributable to Focus Media of
$51.8 million for the third quarter of 2010 and quarter-on-quarter
growth of 31% from non-GAAP net income attributable to Focus Media of
$62.9 million for the second quarter of 2011. Please see the sections on
"Use of Non-GAAP Financial Measures" and "Reconciliation of GAAP to
non-GAAP" elsewhere in this announcement 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
the third quarter of 2011 was $0.44, comparing to $0.76 per fully
diluted ADS in the third quarter of 2010 which was boosted by one-off
income of $79.0 million resulting from the sale of our Internet business
and representing a growth of 47% from $0.30 per fully diluted ADS for
the second quarter of 2011.
-- Non-GAAP net income attributable to Focus Media per fully diluted ADS
for the third quarter of 2011 was $0.59, representing year-on year
growth of 69% from $0.35 per fully diluted ADS for the third quarter of
2010 and quarter-on-quarter growth of 34% from $0.44 for the second
quarter of 2011.
Highlights for Balance Sheet and Cash Flow Results of Third Quarter 2011:
-- Cash, cash equivalents and short-term investments were $639.9 million as
of September 30, 2011, increasing by 8% from $590.9 million as of June
30, 2011.
-- Short term bank loan was $30 million as of September 30 2011 which was
used to finance a portion of the Company's share repurchases during the
quarter. Operationally, the Company generates cash inflow in Renminbi
onshore and offshore bank loans are used to increase our offshore USD
base cash resources.
-- Net cash inflow from operating activities in the third quarter of 2011
was $86.3 million, an increase of 71% from $50.6 million for the second
quarter of 2011 and more than doubled the $34.2 million for the third
quarter of 2010.
-- Net accounts receivable for the LCD display network (including the movie
theater network), in-store network and poster frame network was $215.3
million as of September 30, 2011, an increase of 17% from $184.8 million
as of June 30, 2011 as a result of sequential increase of revenues. Days
sales outstanding were 85 days in the third quarter of 2011 versus 87
days for the second quarter of 2011.
-- Capital expenditures were $6.1 million for the third quarter of 2011,
mostly attributable to upgrading our LCD screens into interactive
screens in seven major cities in China.
-- Cash used in the purchase of subsidiaries in the third quarter of 2011
was $4.1 million, primarily attributable to acquisitions in the poster
frame network and the traditional outdoor billboard network as part of
our ongoing strategy to expand into additional cities for poster frame
network and increasing media resources in the traditional outdoor
billboard network.
-- Cash used for repurchasing shares in the third quarter of 2011 was $66.1
million.
Jason Jiang, Chairman and Chief Executive Officer of Focus Media said, "We reached two important historical milestones in the third quarter of 2011. Not only did we achieve record high total revenue in our core business, but we also opened up a new chapter in the history of the Company whereby we have taken our media into an interactive age. Driven by positive secular domestic consumption trend in the PRC, we believe for the rest of the year and 2012 advertising demand for our media will continue to be healthy and robust. Over the next several years, leveraging our media interactive capability, we will strive to retain our brand advertising leadership in the industry as well as endeavor to become one of the key default promotional media platforms in the PRC."
Kit Low, the Company Executive Director and Chief Financial Officer added, "In the third quarter of 2011, the Company achieved aggregate net revenue year on year growth in our LCD display (including the movie theater network), in-store and poster frame businesses of 53%. GAAP net income attributable to Focus Media and non-GAAP net income attributable to Focus Media for the third quarter of 2011 was $62.2 million and $82.7 million, respectively. We achieved a positive net cash inflow from operating activities after deducting the purchase of equipment and subsidiaries of $76.1 million in the third quarter of 2011 as compared to a net cash inflow of $37.3 million in the second quarter of 2011 and a net cash inflow of $23.8 million in the third quarter of 2010. In the first three quarters of 2011, the Company cumulatively generated net cash inflow from operating activities net of capital expenditure and acquisitions of subsidiaries of $118.5 million."
Third Quarter 2011 financial results
Advertising net revenue from the LCD display network (including the movie theatre network) was $133.6 million for the third quarter of 2011, representing an increase of 54% from $86.8 million for the third quarter of 2010 and an increase of 18% from $113.0 million for the second quarter of 2011.
Advertising net revenue from the poster frame network was $46.6 million for the third quarter of 2011, representing an increase of 45% from $32.2 million for the third quarter of 2010 and an increase of 22% from $38.2 million for the second quarter of 2011.
Advertising net revenue from the in-store network was $15.9 million for the third quarter of 2011, representing an increase of 69% from $9.4 million for the third quarter of 2010 and an increase of 7% from $14.9 million for the second quarter of 2011.
As of September 30, 2011, the total installed base of LCD displays in our LCD display network was 178,382 nationwide, including 169,810 displays through our directly owned networks, and 8,572 displays through our regional distributors, as compared to total LCD displays of 169,798 as of June 30, 2011. The total number of non-digital frames available for use in our poster frame network was 391,304 as of September 30, 2011, as compared to 354,945 as of June 30, 2011. In addition, as of September 30, 2011, we had 34,711 digital frames installed in our poster frame network, a slight decrease from 35,217 as of June 30, 2011 due to optimization of the network. The total number of displays installed in our in-store network was 50,696 as of September 30, 2011, as compared to 50,129 as of June 30, 2011.
Advertising net revenue from the traditional outdoor billboard network was $14.6 million for the third quarter of 2011, representing an increase of 64% from $8.9 million for the third quarter of 2010 and an increase of 13% from $12.9 million for the second quarter of 2011.
Non-GAAP gross profit from the LCD display network (including the movie theatre network) for the third quarter of 2011 was $105.9 million, representing an increase of 61% from $65.6 million for the third quarter of 2010 and an increase of 18% from $89.7 million for the second quarter of 2011.
Non-GAAP gross profit from the poster frame network for the third quarter of 2011 was $19.6 million, representing an increase of 61% from $12.2 million for the third quarter of 2010 and an increase of 61% from $12.2 million for the second quarter of 2011.
Non-GAAP gross profit from the in-store network for the third quarter of 2011 was $10.0 million, almost tripling the $3.4 million for the third quarter of 2010 and an increase of 9% from $9.2 million for the second quarter of 2011.
Non-GAAP gross profit from the traditional outdoor billboard network for the third quarter of 2011 was $3.2 million, representing an increase of 39% from $2.3 million for the third quarter of 2010 and representing a decrease of 11% from $3.6 million for the second quarter of 2011.
Non-GAAP operating expense for the third quarter of 2011 was $46.9 million, representing an increase of 46% from $32.2 million for the third quarter of 2010, which was mainly attributable to: 1) an increase of bad debt provision expenses in the amount of $3.6 million in the third quarter of 2011; 2) an increase of sales commission expenses resulted from revenue growth; and 3) an increase of employees' salary and welfare in the amount of $2.2 million in the third quarter of 2011; and 4) the Company incurred the disposal loss for fixed assets in the amount of $1.6 million in the third quarter of 2011 to prepare for upgrading most of the screens in seven major cities into the next generation interactive screens for the fourth quarter of 2011. It also represented a slight increase of 2% from $45.9 million for the second quarter of 2011.
Net cash inflow from operating activities in the third quarter of 2011 was $86.3 million, increasing by 71% from $50.6 million for the second quarter of 2011 and more than doubling the $34.2 million for the third quarter of 2010.
Net cash used in investing activities for the third quarter of 2011 was $28.1 million. In the third quarter of 2011, the Company incurred capital expenditures of $6.1 million, mostly attributable to upgrading our LCD screens into interactive screens in seven major cities in China, as well as consideration payments of $4.1 million for our poster frame and traditional outdoor billboard related acquisitions, and net investments of $14.9 million in short-term investments (as part of our ongoing effort to improve our interest income by depositing some cash into longer term dated deposits).
Business Outlook for Fourth Quarter 2011
The Company provides the following guidance with respect to the fourth quarter ending December 31, 2011:
Net revenues for the core business (inclusive of the LCD display network and other, the in-store network and the poster frame network) are expected to be in the range of $212-$214 million, the mid-point of which would represent year-on-year growth of 45% and quarter-on-quarter growth of 9%. Net revenues for the non-core business (the traditional outdoor billboard network) are expected to be in the range of $14-$16 million. The Company's non-GAAP net income is expected to be in the range of $88-$90 million. The Company estimates the weighted average ADS outstanding for the calculation of fully diluted earnings per ADS in the fourth quarter is 140 million, assuming no further share repurchases during the quarter.
Announced Share Repurchase Program
On October 3, 2011, Focus Media announced an increase in the size of its share repurchase program to US$650 million from $450 million. As of November 17, 2011, the Company has cumulatively spent approximately $355 million in share repurchases.
Foreign Currency Translation
The reporting currency of the Company is the US dollar. The financial records of the Company's subsidiaries are maintained in its local currency, the Renminbi ("RMB"), which is the functional currency. Assets and liabilities are translated at the exchange rate as of September 30, 2011, which was $1 to RMB6.3549. Equity accounts are translated at historical exchange rates and revenues, expenses, gains and losses are translated using the average rate for the third quarter of 2011, which was $1 to RMB6.4132. Translation adjustments are reported as cumulative translation adjustments and are shown as a separate component of other comprehensive income in the statement of equity and comprehensive income (loss).
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 ADS, all excluding share-based compensation expenses, amortization of acquired intangible assets, profit or loss from disposal of previously acquired subsidiaries, loss from equity method investee and impairment charges of goodwill. 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 future periods. The Company computes its non-GAAP financial measures using a consistent method from quarter to quarter and the reconciliation items mostly include share-based compensation expenses, amortization of acquired intangible assets, profit or loss from disposal of previously acquired subsidiaries, loss from equity method investee and goodwill impairment charges. 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 share and per-share data)
(Unaudited)
Three months ended September 30, 2011
GAAP (1) (2) (3) Non-GAAP
---- --- --- --- --------
Gross Profit
LCD display and other: 104,586 200 1,112 - 105,898
-LCD display network 98,196 200 1,101 - 99,497
-Movie theater network 6,390 - 11 - 6,401
Poster frame network 18,588 - 989 - 19,577
In-store network 10,022 - - - 10,022
Traditional outdoor
billboard network 2,364 - 818 - 3,182
----- --- --- --- -----
Total Gross Profit 135,560 200 2,919 - 138,679
------- --- ----- --- -------
General and
administrative 32,588 (14,424) - - 18,164
Selling and marketing 32,594 (933) (1,051) - 30,610
Other operating income,
net (1,919) - - - (1,919)
------ --- --- --- ------
Total operating expense 63,263 (15,357) (1,051) - 46,855
------ ------- ------ --- ------
Operating profit from
continuing operations 72,297 15,557 3,970 - 91,824
Profit before tax from
continuing operations 77,692 15,557 3,970 - 97,219
Net profit from
continuing operations 62,666 15,557 3,970 985 83,178
Net profit from
discontinued operations -- - - - -
Net income attributable
to Focus Media 62,229 15,557 3,970 985 82,741
====== ====== ===== === ======
Basic net income from
continuing operations
per ADS 0.47 0.62
Diluted net income from
continuing operations
per ADS 0.45 0.59
Basic net income from
discontinued operations
per ADS - -
Diluted net income from
discontinued operations
per ADS - -
Basic net income
attributable to Focus
Media per ADS 0.47 0.62
Diluted net income
attributable to Focus
Media per ADS 0.44 0.59
==== ====
ADS used in calculating
basic income per ADS 133,718,768 133,718,768
----------- -----------
ADS used in calculating
diluted income per ADS 139,866,888 139,866,888
----------- -----------
(1). Share-based compensation.
(2). Amortization of acquired intangible assets.
(3). Loss from equity method investee (VisionChina)
Three months ended June 30, 2011
GAAP (1) (2) (3) Non-GAAP
---- --- --- --- --------
Gross Profit
LCD display and other: 88,382 198 1,130 - 89,710
-LCD display network 85,260 198 1,114 - 86,572
-Movie theater network 3,122 - 16 - 3,138
Poster frame network 11,080 - 1,118 - 12,198
In-store network 9,162 - - - 9,162
Traditional outdoor
billboard network 3,129 - 449 - 3,578
----- --- --- --- -----
Total Gross Profit 111,753 198 2,697 - 114,648
------- --- ----- --- -------
General and
administrative 30,240 (14,274) - - 15,966
Selling and marketing 33,079 (924) (1,056) - 31,099
Other operating income,
net (1,209) - - - (1,209)
------ --- --- --- ------
Total operating expense 62,110 (15,198) (1,056) - 45,856
------ ------- ------ --- ------
Operating profit from
continuing operations 49,643 15,396 3,753 - 68,792
Profit before tax from
continuing operations 52,790 15,396 3,753 - 71,939
Net profit from
continuing operations 42,863 15,396 3,753 992 63,004
Net profit from
discontinued operations - - - - -
Net income attributable
to Focus Media 42,804 15,396 3,753 992 62,945
====== ====== ===== === ======
Basic net income from
continuing operations
per ADS 0.32 0.46
Diluted net income from
continuing operations
per ADS 0.30 0.45
Basic net income from
discontinued operations
per ADS - -
Diluted net income from
discontinued operations
per ADS - -
Basic net income
attributable to Focus
Media per ADS 0.32 0.46
Diluted net income
attributable to Focus
Media per ADS 0.30 0.44
==== ====
ADS used in calculating
basic income per ADS 135,624,717 135,624,717
----------- -----------
ADS used in calculating
diluted income per ADS 141,562,763 141,562,763
----------- -----------
(1). Share-based compensation.
(2). Amortization of acquired intangible assets.
(3). Loss from equity method investee (VisionChina)
Three months ended September 30, 2010
GAAP (1) (2)
---- --- ---
Gross Profit
LCD display and other: 64,225 286 1,105
-LCD display network 63,875 286 1,090
-Movie theater network 350 - 15
Poster frame network 10,557 - 1,668
In-store network 3,411 - -
Traditional outdoor
billboard network 1,872 - 431
----- --- ---
Total Gross Profit 80,065 286 3,204
------ --- -----
General and
administrative 24,942 (11,526) -
Selling and marketing 24,474 (1,257) (1,036)
Other operating expenses
(income), net (2,699) - -
------ --- ---
Total operating expense 46,717 (12,783) (1,036)
------ ------- ------
Operating profit from
continuing operations 33,348 13,069 4,240
Profit before tax from
continuing operations 36,015 13,069 4,240
Net profit from
continuing operations 33,454 13,069 4,240
Net profit from
discontinued operations 79,341 - 22
Net income attributable
to Focus Media 112,737 13,069 4,262
======= ====== =====
Basic net income from
continuing operations
per ADS 0.24
Diluted net income from
continuing operations
per ADS 0.23
Basic net income from
discontinued operations
per ADS 0.56
Diluted net income from
discontinued operations
per ADS 0.54
Basic net income
attributable to Focus
Media per ADS 0.79
Diluted net income
attributable to Focus
Media per ADS 0.76
====
ADS used in calculating
basic income per ADS
141,944,371
-----------
ADS used in calculating
diluted income per ADS 147,490,755
-----------
Three months ended September 30, 2010
(3) (4) Non- GAAP
--- --- ---------
Gross Profit
LCD display and other: - 65,616
-LCD display network - - 65,251
-Movie theater network - - 365
Poster frame network - 12,225
In-store network - 3,411
Traditional outdoor
billboard network - 2,303
--- -----
Total Gross Profit - 83,555
--- ------
General and
administrative - 13,416
Selling and marketing - 22,181
Other operating expenses
(income), net (733) (3,432)
---- ------
Total operating expense (733) 32,165
---- ------
Operating profit from
continuing operations 733 51,390
Profit before tax from
continuing operations 733 54,057
Net profit from
continuing operations - 733 51,496
Net profit from
discontinued operations (79,000) - 363
Net income attributable
to Focus Media (79,000) 733 51,801
======= === ======
Basic net income from
continuing operations
per ADS 0.36
Diluted net income from
continuing operations
per ADS 0.35
Basic net income from
discontinued operations
per ADS 0.00
Diluted net income from
discontinued operations
per ADS 0.00
Basic net income
attributable to Focus
Media per ADS 0.36
Diluted net income
attributable to Focus
Media per ADS 0.35
====
ADS used in calculating
basic income per ADS
141,944,371
-----------
ADS used in calculating
diluted income per ADS 147,490,755
-----------
(1). Share-based compensation.
(2). Amortization of acquired intangible assets.
(3). Profit from disposal of the internet business.
(4). Loss from disposal of previously acquired subsidiaries, all
attributable to poster frame business.
Focus Media Holding Ltd.
Reconciliation of GAAP to non-GAAP
(U.S. Dollars in thousands, except share and per-share data)
(Unaudited)
Nine months ended September 30, 2011
GAAP (1) (2)
---- --- ---
Gross Profit
LCD display and other: 257,618 593 3,352
-LCD display network 246,338 593 3,309
-Movie theater network 11,280 - 43
Poster frame network 40,043 - 3,285
In-store network 22,996 - -
Traditional outdoor
billboard network 6,880 - 1,712
----- --- -----
Total Gross Profit 327,537 593 8,349
------- --- -----
General and
administrative 89,452 (42,852) -
Selling and marketing 96,874 (2,775) (3,165)
Other operating
income, net (7,833) - -
------ --- ---
Total operating
expense 178,493 (45,627) (3,165)
------- ------- ------
Operating profit from
continuing operations 149,044 46,220 11,514
Profit before tax from
continuing operations 159,947 46,220 11,514
Net profit from
continuing operations 125,313 46,220 11,514
Net profit from
discontinued
operations - - -
Net income
attributable to Focus
Media 125,585 46,220 11,514
======= ====== ======
Basic net income from
continuing operations
per ADS 0.93
Diluted net income
from continuing
operations per ADS 0.89
Basic net income from
discontinued
operations per ADS -
Diluted net income
from discontinued
operations per ADS -
Basic net income
attributable to Focus
Media per ADS 0.93
Diluted net income
attributable to Focus
Media per ADS 0.89
====
ADS used in
calculating basic
income per ADS 134,972,295
-----------
ADS used in
calculating diluted
income per ADS 140,567,619
-----------
(3) Non- GAAP
--- ---------
Gross Profit
LCD display and other: - 261,563
-LCD display network - 250,240
-Movie theater network - 11,323
Poster frame network - 43,328
In-store network - 22,996
Traditional outdoor
billboard network - 8,592
--- -----
Total Gross Profit - 336,479
--- -------
General and
administrative - 46,600
Selling and marketing - 90,934
Other operating
income, net - (7,833)
--- ------
Total operating
expense - 129,701
--- -------
Operating profit from
continuing operations - 206,778
Profit before tax from
continuing operations - 217,681
Net profit from
continuing operations 4,750 187,797
Net profit from
discontinued
operations - -
Net income
attributable to Focus
Media 4,750 188,069
===== =======
Basic net income from
continuing operations
per ADS 1.39
Diluted net income
from continuing
operations per ADS 1.34
Basic net income from
discontinued
operations per ADS -
Diluted net income
from discontinued
operations per ADS -
Basic net income
attributable to Focus
Media per ADS 1.39
Diluted net income
attributable to Focus
Media per ADS 1.34
====
ADS used in
calculating basic
income per ADS 134,972,295
-----------
ADS used in
calculating diluted
income per ADS 140,567,619
-----------
(1). Share-based compensation.
(2). Amortization of acquired intangible assets.
(3). Loss from equity method investee (VisionChina)
Nine months ended September 30, 2010
GAAP (1) (2)
---- --- ---
Gross Profit
LCD display network
and other: 161,186 848 2,995
-LCD display network 157,129 848 2,949
-Movie theater
network 4,057 - 46
Poster frame network 22,847 - 4,941
In-store network 10,600 - -
Traditional outdoor
billboard network 5,420 - 1,286
----- --- -----
Total Gross Profit 200,053 848 9,222
------- --- -----
General and
administrative 62,997 (34,217) -
Selling and marketing 73,795 (3,732) (3,070)
Impairment loss 5,736 - -
Other operating
(income), net (7,848) - -
------ --- ---
Total operating
expense 134,680 (37,949) (3,070)
------- ------- ------
Operating profit from
continuing
operations 65,373 38,797 12,292
Profit before tax
from continuing
operations 69,533 38,797 12,292
Net profit from
continuing
operations 55,928 38,797 12,292
Net profit from
discontinued
operations 83,078 - 766
Net income
attributable to
Focus Media 137,119 38,797 13,058
======= ====== ======
Basic net income
(loss) from
continuing
operations per ADS 0.39
Diluted net income
(loss) from
continuing
operations per ADS 0.38
Basic net income
(loss) from
discontinued
operations per ADS 0.58
Diluted net income
(loss) from
discontinued
operations per ADS 0.56
Basic net income
(loss) attributable
to Focus Media per
ADS 0.95
Diluted net income
(loss) attributable
to Focus Media per
ADS 0.93
====
ADS used in
calculating basic
income per ADS 143,584,320
-----------
ADS used in
calculating diluted
income per ADS 148,090,998
-----------
Nine months ended September 30, 2010
(3) (4) Non- GAAP
--- --- ---------
Gross Profit
LCD display network
and other: - - 165,029
-LCD display network - - 160,926
-Movie theater
network - - 4,103
Poster frame network - - 27,788
In-store network - - 10,600
Traditional outdoor
billboard network - - 6,706
--- --- -----
Total Gross Profit - - 210,123
--- --- -------
General and
administrative - - 28,780
Selling and marketing - - 66,993
Impairment loss (5,736) - -
Other operating
(income), net - (2,257) (10,105)
--- ------ -------
Total operating
expense (5,736) (2,257) 85,668
------ ------ ------
Operating profit from
continuing
operations 5,736 2,257 124,455
Profit before tax
from continuing
operations 5,736 3,545 129,903
Net profit from
continuing
operations 5,736 3,545 116,298
Net profit from
discontinued
operations - (79,000) 4,844
Net income
attributable to
Focus Media 5,736 (75,455) 119,255
===== ======= =======
Basic net income
(loss) from
continuing
operations per ADS 0.81
Diluted net income
(loss) from
continuing
operations per ADS 0.78
Basic net income
(loss) from
discontinued
operations per ADS 0.03
Diluted net income
(loss) from
discontinued
operations per ADS 0.03
Basic net income
(loss) attributable
to Focus Media per
ADS 0.83
Diluted net income
(loss) attributable
to Focus Media per
ADS 0.81
====
ADS used in
calculating basic
income per ADS 143,584,320
-----------
ADS used in
calculating diluted
income per ADS 148,090,998
-----------
(1). Share-based compensation.
(2). Amortization of acquired intangible assets.
(3). Impairment charges of goodwill as a result of earn-out payments
in poster frame business.
(4). Net profit from disposal of previously acquired business,
including $79M profit from internet disposal and $3.5M loss from the
write-off of certain assets of previously acquired subsidiaries.
Conference Call
The Company will host a conference call to discuss the third quarter 2011 results at 8:00 p.m. U.S. Eastern Time on November 17, 2011 (5:00 p.m. U.S. Pacific Time on November 17, 2011 and 9:00 a.m. Beijing/Hong Kong Time on November 18, 2011). 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):
Hong Kong: +852.2475.0994
United States: +1.718.354.1231
International Toll Free Dial-in
Number(s):
China, Domestic Mobile: 400.620.8038
China, Domestic: 800.819.0121
Hong Kong: +852.800.930.346
United States: +1.866.519.4004
Conference ID #: 24920812
A replay of the call will be available from November 17, 2011 23:00 until November 26, 2011 10:59pm (US Eastern Time). The dial-in details for the replay are set forth below:
International Toll Dial-In Number: +61.2.8235.5000
Local Dial-In Number(s):
China: 400.692.0026
United States: +1.718.354.1232
International Toll Free Dial-in
Number(s):
China North: 10800.714.0386
China South: 10800.140.0386
Hong Kong: +852. 800.901.596
United States: +1.866.214.5335
Conference ID #: 24920812
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. As of September 30, 2011, Focus Media's out-of-home lifestyle interactive digital media network had approximately 178,000 LCD displays in about 100,000 commercial buildings that covered more than 100 cities, 426,000 in-elevator poster and digital picture frames in residential buildings that covered 35 cities, approximately 51,000 LCD displays in more than 2,800 hypermarkets, supermarkets and convenience stores and approximately 2,000 movie screens in about 300 movie theaters throughout China.
Focus Media Holding Limited
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(U.S Dollars in Thousands)
2011-09-30 2011-06-30
Note 1
ASSETS
Current assets
Cash and cash equivalents 435,322 404,704
Short-term investments 204,567 186,198
Accounts receivable, net 230,552 200,660
Prepaid expenses and other current
assets 39,060 44,053
Deposit paid for acquisition of
subsidiaries - 618
Rental deposits 56,143 50,557
Other current assets 8,098 1,722
----- -----
Total current assets 973,742 888,512
Rental deposits, non-current 4,770 5,722
Equipment, net 68,786 65,807
Acquired intangible assets, net 26,995 17,553
Goodwill 463,894 429,525
Investment under equity method 59,148 58,209
Other long term assets 17,354 19,273
Total assets 1,614,689 1,484,601
========= =========
LIABILITIES AND EQUITY
Current liabilities
Short-term bank loan 30,000 -
Accounts payable 22,146 18,330
Accrued expenses and other current
liabilities 132,625 117,155
Income taxes payable 10,943 314
Amount due to Related parties 4,175 1,842
Deferred tax liabilities 25,172 24,180
------ ------
Total current liabilities 225,061 161,821
Long-term payable 14,051 -
Deferred tax liabilities, non-
current 12,617 9,995
------ -----
Total liabilities 251,729 171,816
------- -------
Equity
Ordinary shares 33 34
Additional paid in capital 1,668,269 1,716,322
Subscription receivable (1,236) -
Accumulated deficit (437,368) (499,597)
Accumulated other comprehensive
income 111,447 95,815
------- ------
Total Focus Media equity 1,341,145 1,312,574
Noncontrolling interests 21,815 211
------ ---
Total equity 1,362,960 1,312,785
--------- ---------
Total liabilities and equity 1,614,689 1,484,601
Note 1: The Company acquired 51% interests in 4 subsidiaries engaged
in outdoor billboard business for an aggregate consideration of
approximately $21.4 million in the third quarter of 2011 as part of
the traditional outdoor billboard network strategy to expand its
media resources. The aggregate consideration is the maximum possible
consideration likely to be paid over a three year period base on
achieving certain operating targets. The Company has performed a
preliminary purchase price allocation to allocate the purchase
consideration to the estimated fair values of the assets and
liabilities of the subsidiaries acquired as of September 30, 2011.
The amounts may be subject to change when the Company finalizes the
purchase price allocation, with the assistance of a third-party
valuation expert.
Focus Media Holding Limited
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(U.S Dollar in thousands, except earnings per ADS and ADS data)
Three months ended
------------------
2011-09-30 2011-06-30 2010-9-30
Note 1
Revenues
LCD display network
and other: 146,169 123,142 96,182
-LCD display network 132,555 113,518 91,654
-Movie theater network 13,614 9,624 4,528
In-store network 17,367 16,339 10,389
Poster frame network 51,023 41,648 35,496
Traditional outdoor
billboard network 14,886 13,090 9,135
------ ------ -----
Total gross revenues 229,445 194,219 151,202
Less: Sales taxes 18,783 15,257 13,850
------ ------ ------
Total net revenue
(Note 2) 210,662 178,962 137,352
------- ------- -------
Cost of revenues
LCD display network
and other: 28,965 24,614 22,551
-LCD display network 22,364 18,630 19,023
-Movie theater network 6,601 5,984 3,528
In-store network 5,849 5,774 5,997
Poster frame network 28,056 27,098 21,670
Traditional outdoor
billboard network 12,232 9,723 7,069
------ ----- -----
Total cost of revenues 75,102 67,209 57,287
------ ------ ------
Gross profit 135,560 111,753 80,065
------- ------- ------
Operating expenses
General and
administrative 32,588 30,240 24,942
Selling and marketing 32,594 33,079 24,474
Impairment loss - - -
Other operating
income, net (1,919) (1,209) (2,699)
------ ------ ------
Total operating
expenses 63,263 62,110 46,717
------ ------ ------
Operating profit 72,297 49,643 33,348
Interest income 5,395 3,147 2,667
Investment loss - - -
Income from continuing
operations before
income taxes 77,692 52,790 36,015
Provision for income
taxes 14,041 8,935 2,561
Loss from equity
method investee 985 992 -
--- --- ---
Net income from
continuing operations 62,666 42,863 33,454
Net income from
discontinued
operations, net of
tax - - 79,341
--- --- ------
Net income 62,666 42,863 112,795
Less: Net income
(loss) attributable
to noncontrolling
interests 437 59 58
--- --- ---
Net income
attributable to Focus
Media 62,229 42,804 112,737
====== ====== =======
Net income from
continuing operations
per ADS
-basic 0.47 0.32 0.24
-diluted 0.45 0.30 0.23
Net income from
discontinued
operations per ADS
-basic - - 0.56
-diluted - - 0.54
Net income
attributable to Focus
Media per ADS
-basic 0.47 0.32 0.79
==== ==== ====
-diluted 0.44 0.30 0.76
==== ==== ====
ADS used in
calculating basic
income per ADS 133,718,768 135,624,717 141,944,371
=========== =========== ===========
ADS used in
calculating diluted
income per ADS 139,866,888 141,562,763 147,490,755
Nine months ended
-----------------
2011-09-30 2010-09-30
Note 1
Revenues
LCD display network
and other: 367,770 241,362
-LCD display network 336,098 227,137
-Movie theater network 31,672 14,225
In-store network 44,111 30,875
Poster frame network 131,953 90,532
Traditional outdoor
billboard network 38,598 28,489
------ ------
Total gross revenues 582,432 391,258
Less: Sales taxes 46,229 34,643
------ ------
Total net revenue
(Note 2) 536,203 356,615
------- -------
Cost of revenues
LCD display network
and other: 79,392 57,269
-LCD display network 60,619 48,455
-Movie theater network 18,773 8,814
In-store network 17,324 17,339
Poster frame network 80,859 59,416
Traditional outdoor
billboard network 31,091 22,538
------ ------
Total cost of revenues 208,666 156,562
------- -------
Gross profit 327,537 200,053
------- -------
Operating expenses
General and
administrative 89,452 62,997
Selling and marketing 96,874 73,795
Impairment loss - 5,736
Other operating
income, net (7,833) (7,848)
------ ------
Total operating
expenses 178,493 134,680
------- -------
Operating profit 149,044 65,373
Interest income 10,903 5,448
Investment loss - (1,288)
Income from continuing
operations before
income taxes 159,947 69,533
Provision for income
taxes 29,884 13,605
Loss from equity
method investee 4,750 -
----- ---
Net income from
continuing operations 125,313 55,928
Net income from
discontinued
operations, net of
tax - 83,078
--- ------
Net income 125,313 139,006
Less: Net income
(loss) attributable
to noncontrolling
interests (272) 1,887
---- -----
Net income
attributable to Focus
Media 125,585 137,119
======= =======
Net income from
continuing operations
per ADS
-basic 0.93 0.39
-diluted 0.89 0.38
Net income from
discontinued
operations per ADS
-basic - 0.58
-diluted - 0.56
Net income
attributable to Focus
Media per ADS
-basic 0.93 0.95
==== ====
-diluted 0.89 0.93
==== ====
ADS used in
calculating basic
income per ADS 134,972,295 143,584,320
=========== ===========
ADS used in
calculating diluted
income per ADS 140,567,619 148,090,998
Note 1: The Company acquired 51% interests in 4 subsidiaries engaged
in outdoor billboard business for an aggregate consideration of
approximately $21.4 million in the third quarter of 2011 as part of
the traditional outdoor billboard network strategy to expand its
media resources. The aggregate consideration is the maximum possible
consideration likely to be paid over a three year period base on
achieving certain operating targets. The Company has performed a
preliminary purchase price allocation to allocate the purchase
consideration to the estimated fair values of the assets and
liabilities of the subsidiaries acquired as of September 30, 2011.
The amounts may be subject to change when the Company finalizes the
purchase price allocation, with the assistance of a third-party
valuation expert.
Note 2: Details of net revenues by segment are as follows (U.S.
Dollars in thousands):
Three months ended Nine months ended
------------------ -----------------
2011-09-30 2011-06-30 2010-09-30 2011-09-30 2010-09-30
Gross revenues
LCD display
network 132,555 113,518 91,654 336,098 227,137
Movie theater
network 13,614 9,624 4,528 31,672 14,225
In-store
network 17,367 16,339 10,389 44,111 30,875
Poster frame
network 51,023 41,648 35,496 131,953 90,532
Traditional
outdoor
billboard
network 14,886 13,090 9,135 38,598 28,489
Total gross
revenues 229,445 194,219 151,202 582,432 391,258
------- ------- ------- ------- -------
Less: Sales
taxes
LCD display
network 11,995 9,628 8,755 29,141 21,553
Movie theater
network 623 519 651 1,619 1,354
In-store
network 1,496 1,403 981 3,791 2,936
Poster frame
network 4,379 3,470 3,269 11,051 8,269
Traditional
outdoor
billboard
network 290 237 194 627 531
Total sales tax 18,783 15,257 13,850 46,229 34,643
------ ------ ------ ------ ------
Net revenues
LCD display
network 120,560 103,890 82,899 306,957 205,584
Movie theater
network 12,991 9,105 3,877 30,053 12,871
In-store
network 15,871 14,936 9,408 40,320 27,939
Poster frame
network 46,644 38,178 32,227 120,902 82,263
Traditional
outdoor
billboard
network 14,596 12,853 8,941 37,971 27,958
Total net
revenues 210,662 178,962 137,352 536,203 356,615
Focus Media Holding Limited
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASHFLOWS
(U.S. Dollar in thousands)
Three months ended Nine months ended
------------------ -----------------
2011-09-30 2010-09-30 2011-09-30 2010-09-30
Operating activities:
Net income 62,666 112,795 125,313 139,006
Adjustments to
reconcile net income
to net cash provided
by operating
activities:
Bad debt expenses 4,466 867 10,258 1,205
Share-based
compensation 15,557 13,069 46,220 38,797
Depreciation 7,291 6,721 21,398 21,792
Amortization of
acquired intangible
assets 3,970 4,262 11,514 13,058
Profit on disposal of
previously acquired
subsidiaries - (79,000) - (79,000)
Loss on disposal of
equity method
investment - - - 2,833
Loss from equity
method investee 985 - 4,750
Impairment charges
for goodwill,
acquired intangible
assets and fixed
assets - - - 5,736
Write-off of long-
term assets - - 990 -
Others 1,798 129 1,940 242
Net changes in
current assets and
current liabilities,
net of effects of
acquisitions (10,465) (24,594) (71,018) (66,440)
------- ------- ------- -------
Net cash provided by
operating activities 86,268 34,249 151,365 77,229
------ ------ ------- ------
Investing activities:
Purchase of equipment
and other long term
assets (6,058) (6,675) (23,425) (11,600)
Payment paid to
acquired
subsidiaries (4,115) (3,767) (9,475) (26,306)
Investment in equity
method investee - - (61,003) -
Investment in short-
term investments (505,921) (116,100) (937,663) (116,100)
Proceeds from the
sale of short-term
investments 490,972 - 878,037 29,290
Proceeds received
from disposal of
fixed assets 125 166 572 309
Advances to a related
party (3,147) - (3,147) -
Disposal of
subsidiaries - 73,278 7,296 76,067
Net cash (used
in)/provided by
investing activities (28,144) (53,098) (148,808) (48,340)
------- ------- -------- -------
Financing activities:
Proceeds received
from short-term
bank loans 30,000 - 30,000 -
Cash used for share
repurchase (66,106) (200,000) (69,106) (236,715)
Cash collection from
(deposit for) share
repurchase - 6,265 - (36)
Capital injection
from (repayment to)
noncontrolling
interests - 11 (76) 10,980
Proceeds from
issuance of ordinary
shares, 1,260 568 1,828 2,387
Net cash provided by/
(used in) financing
activities (34,846) (193,156) (37,354) (223,384)
------- -------- ------- --------
Effect of exchange
rate changes 7,340 7,006 15,643 9,589
----- ----- ------ -----
Net increase
(decrease) in cash
and cash equivalents 30,618 (204,999) (19,154) (184,906)
Cash and cash
equivalents,
beginning of period 404,704 588,252 454,476 568,159
------- ------- ------- -------
Cash and cash
equivalents, end of
period 435,322 383,253 435,322 383,253
======= ======= ======= =======
Supplemental
disclosure of cash
flow information:
Income taxes paid 3,321 3,854 24,612 27,793
Interest paid 105 - 105 -
=== === === ===
Supplemental
disclosure of non-
cash investing
activity:
Accrual for
acquisition of
subsidiaries 22,092 7,284 22,092 7,284
====== ===== ====== =====
SOURCE Focus Media Holding Limited
