Charm Communications Inc. Announces Unaudited Fourth Quarter and Full Year 2012 Results Full year 2012 agency business revenues up 34.9% year over year, digital revenues up 80% year over year

Full year 2012 agency business revenue extraction rate up to 6.5% from 5.4% in 2011

BEIJING, March 18, 2013 /PRNewswire-FirstCall/ -- Charm Communications Inc. (NASDAQ: CHRM) ("Charm" or the "Company"), a leading advertising agency in China, today announced its unaudited financial results for the fourth quarter ended December 31, 2012.

Fourth Quarter 2012 Highlights

  • Turnover declined 20.9% year over year to $201.6 million in the fourth quarter of 2012
  • Revenues declined 41.3% year over year to $47.1 million in the fourth quarter of 2012
  • Revenues for Charm's advertising agency business grew 6.5% year over year to $12.5 million in the fourth quarter of 2012
  • Revenues for Charm's media investment management business declined 51.2% year over year to $32.0 million in the fourth quarter of 2012
  • Gross profit declined 54.4% year over year to $13.0 million in the fourth quarter of 2012
  • Net income declined 126.5% year over year to a net loss of $4.2 million in the fourth quarter of 2012
  • Non-GAAP net income, which excludes share-based compensation expenses, amortization of intangible assets and net change in fair value of consideration payable and call option, declined 122.0% year over year to a net loss of $3.8 million in the fourth quarter of 2012

Full Year 2012 Highlights

  • Turnover declined 5.8% year over year to $823.9 million in the full year 2012
  • Revenues declined 40.9% year over year to $165.5 million in the full year 2012
  • Revenues for Charm's advertising agency business grew 34.9% year over year to $46.2 million in the full year 2012
  • Revenues for Charm's media investment management business declined 52.8% year over year to $112.8 million in the full year 2012
  • Gross profit declined 42.8% year over year to $48.4 million in the full year 2012
  • Net income declined 105.2% year over year to a net loss of $2.5 million in the full year 2012
  • Non-GAAP net income, which excludes share-based compensation expenses, amortization of intangible assets and net change in fair value of consideration payable and call option, declined 99.1% year over year to a net loss of $0.5 million in the full year 2012

"2012 presented a more challenging operating environment than we encountered in previous years, particularly with respect to our principal media business, which was affected by regulatory changes in the satellite TV business as well as by soft overall demand in the marketplace," said Mr. He Dang, Charm's founder, chairman and chief executive officer. "At the same time, however, we made excellent progress with our agency business, which continued to outperform the market. Within that segment, our digital turnover grew 80% year over year and we expect our digital business to continue to grow rapidly as we consolidate Charm Interactive and Charm Click under the leadership of our vice president, Johnny Zhu. Although we do expect current market softness to continue in 2013, it will not hinder us in building Charm into a full-service, integrated advertising company."

Mr. Wei Zhou, Charm's chief financial officer, added, "We delivered on our revenue guidance due in large part to our strong agency business, and in terms of gross billings, we remain in a healthy market position. However, our media business margins did not ramp up as quickly as we had expected, primarily due to the satellite TV operating environment. Additionally, our net income was impacted by a bad debt provision. We will remain conservative with respect to our media business going forward but will continue to invest in key talent and assets to grow our overall business."

Fourth Quarter 2012 Results

Turnover (non-GAAP)

US$ mm

4Q12

4Q11

3Q12

Y-o-Y %

Q-o-Q%

Total turnover (non-GAAP)

$201.6

$254.8

$216.5

-20.9%

-6.9%

Advertising agency

$169.6

$189.2

$182.5

-10.4%

-7.1%

Media investment management

$32.0

$65.6

$34.1

-51.2%

-6.0%

Branding and identity services

N/A

N/A

N/A

N/A

N/A

The Company uses turnover (non-GAAP), defined as total customer advertising spending placed through or with Charm, to reflect the scale of its business.

The 20.9% year-over-year decrease in total turnover was mainly due to the decrease in the media investment business, which was a result of the Company dropping several media assets at the beginning of 2012 to modify its media inventory mix and to reduce risk following regulatory changes in the satellite TV market. The 6.9% quarter-over-quarter decrease in turnover was largely attributed to seasonal factors.

The 10.4% year-over-year and 7.1% quarter-over-quarter decrease in the advertising agency business ("agency business") turnover was mainly due to the decrease in advertising spending from existing agency clients who had reallocated portions of their advertising budgets to the third quarter because of the 2012 Summer Olympics.

The revenue extraction rate, which is defined as revenue divided by turnover, was 7.4% for the agency business, compared to 6.2% for the fourth quarter of 2011 and 7.5% for the third quarter of 2012. The year-over-year increase was mainly due to increased advertising spending on non-CCTV media platforms, such as the Internet and satellite channels, all of which exhibited higher extraction rates relative to those associated with CCTV. The slight quarter-over-quarter decrease was due to Olympics-related spending in the third quarter. The Company expects the revenue extraction rate to increase as the Company expands its full-service offerings across all media platforms under Charm Advertising and ramps up digital media offerings under Charm Interactive and Charm Click.

The 51.2% year-over-year decrease in turnover (equivalent to GAAP revenue) for the media investment management business ("principal media business"), which operates under the Shangxing Media brand, was mainly due to a slowdown in the broader economic environment and the dropping of several media assets at the beginning of 2012 following the aforementioned regulatory changes. The 6.0% quarter-over-quarter decrease in turnover in the principal media business was mainly because of weaker demand from advertisers in the fourth quarter.

Revenues

US$ mm

4Q12

4Q11

3Q12

Y-o-Y %

Q-o-Q%

Total revenues

$47.1

$80.3

$48.8

-41.3%

-3.5%

Advertising agency

$12.5

$11.7

$13.6

6.5%

-8.3%

Media investment management

$32.0

$65.6

$34.1

-51.2%

-6.0%

Branding and identity services

$2.6

$3.0

$1.1

-13.5%

129.2%

The changes in agency and principal media business revenues are consistent with the changes in turnover and the revenue extraction rate. The quarter-over-quarter increase in branding and identity services was primarily due to increased client demand for creative services in the fourth quarter of 2012, while the year-over-year decrease in branding and identity services was primarily due to an overall decrease in client demand for creative services.

Gross Profit

US$ mm

4Q12

4Q11

3Q12

Y-o-Y %

Q-o-Q%

Cost of revenues                       

$34.1

$51.8

$34.5

-34.1%

-1.0%

Gross profit

$13.0

$28.5

$14.4

-54.4%

-9.5%

Gross margin

27.6%

35.5%

29.4%



Charm mainly attributes the year-over-year decrease in cost of revenues to the dropping of several media assets in order to modify the Company's media inventory mix following the aforementioned regulatory changes. The year-over-year decline in gross profit was due to a lower contribution from the principal media business. Cost of revenues was relatively flat quarter over quarter, while the Company's gross profit decreased 9.5% quarter over quarter as a result of lower revenues from the agency and media businesses.

Operating Profit (Loss)

US$ mm

4Q12

4Q11

3Q12

Y-o-Y %

Q-o-Q%

Total operating expenses          

$17.2

$13.0

$14.8

32.2%

16.0%

Selling and marketing

$11.3

$9.6

$9.4

17.0%

19.9%

General and administrative

$5.9

$3.4

$5.4

75.9%

9.2%

Operating profit (loss)

-$3.5

$15.5

-$0.2

-122.8%

1,738.9%

The 17.0% year-over-year increase and 19.9% quarter-over-quarter increase in selling and marketing expenses were primarily due to increased headcount, including executive hires within the Company's agency business.

The 75.9% year-over-year increase in general and administrative expenses was mainly attributed to a bad debt provision of $2.7 million in the fourth quarter of 2012.

Net Income (Loss)

US$ mm

4Q12

4Q11

3Q12

Y-o-Y %

Q-o-Q%

Non-GAAP net income (loss)*

-$3.8

$17.1

$0.8

-122.0%

-555.3%

Net income (loss)

-$4.2

$15.7

$0.1

-126.5%

-4,900.0%

Basic net income (loss) per ADS (US$)

-$0.13

$0.38

-$0.01



Fully diluted net income (loss) per ADS (US$)

-$0.13

$0.36

-$0.01



*The Company's non-GAAP net income (loss) excludes share-based compensation expenses, amortization of intangible assets and net change in fair value of consideration payable and call option.

Each American depositary share ("ADS") represents two common shares. The weighted average number of shares used to compute basic net loss per ADS for the fourth quarter of 2012 was 38,269,369. As of December 31, 2012, 38,334,787 ADSs were issued and outstanding.

Cash Flows and Cash Position

Net cash flow from operations for the fourth quarter of 2012 was negative $1.1 million. As of December 31, 2012, the Company had cash and cash equivalents of $116.6 million, compared to $117.9 million at the end of the third quarter of 2012.

Customers

In the fourth quarter of 2012, Charm's agency business had 174 advertisers, compared to 167 advertisers in the third quarter of 2012 and 148 advertisers in the fourth quarter of 2011.

In the fourth quarter of 2012, Charm's principal media business had 203 advertisers, compared to 231 advertisers in the third quarter of 2012 and 297 advertisers in the fourth quarter of 2011.

Employee Headcount

As of December 31, 2012, the Company had 813 employees, compared to 842 employees as of September 30, 2012.

Full Year 2012 Results

Turnover

US$ mm

FY12

FY11

Y-o-Y %

Total turnover (non-GAAP)

$823.9

$874.5

-5.8%

Advertising agency

$711.1

$635.7

11.9%

Media investment management

$112.8

$238.8

-52.8%

Branding and identity services

NA

NA

NA

Revenues

US$ mm

FY12

FY11

Y-o-Y %

Total revenues

$165.5

$280.1

-40.9%

Advertising agency

$46.2

$34.3

34.9%

Media investment management

$112.8

$238.8

-52.8%

Branding and identity services

$6.5

$7.0

-7.7%

Gross Profit

US$ mm

FY12

FY11

Y-o-Y %

Cost of revenues                              

$117.1

$195.6

-40.1%

Gross profit

$48.4

$84.5

-42.8%

Gross margin

29.2%

30.2%


Operating Profit (Loss)

US$ mm

FY12

FY11

Y-o-Y %

Total operating expenses                     

$52.3

$36.8

41.9%

Selling and marketing

$36.0

$27.1

32.8%

General and administrative

$16.2

$9.7

67.3%

Operating profit (loss)

-$3.2

$47.7

-106.8%

Net Income (Loss)

US$ mm

FY12

FY11

Y-o-Y %

Non-GAAP Net income*

$0.5

$51.7

-99.1%

Net income (loss)

-$2.5

$48.0

-105.2%

Basic net income (loss) per ADS (US$)

-$0.12

$1.18


Fully diluted net income (loss) per ADS (US$)

-$0.12

$1.12


*The Company's non-GAAP net income (loss) excludes share-based compensation expenses, amortization of intangible assets and net change in fair value of consideration payable and call option.

Each ADS represents two common shares. The weighted average number of shares used to compute basic net loss per ADS for the full year 2012 was 38,749,125.

Recent Business Developments

In February 2013, Mr. Johnny Honggang Zhu, the general manager of Charm Click, was promoted to vice president of Charm to lead Charm Click and assume a new role as head of Charm Interactive's business in northern China.

In the fourth quarter of 2012, Charm Advertising won the TV business for Brilliance Auto, a large-scale automotive manufacturer in China, and Jian Nan Chun, a leading maker of traditional Chinese wines.

In the fourth quarter of 2012, Charm Advertising again secured the number one position in terms of successful bidding volume at the annual CCTV prime-time auction, which was held on November 18, 2012. The total value of auctioned and pre-sold advertising resources for CCTV hit an all time high of RMB15.88 billion, an increase of 11.4% compared to the previous year. Charm has held the position of top bidder for ten straight years.

Business Outlook

US$ mm

1Q13E

Non-GAAP net loss*

-$1.25 to -$0.75

*The Company's non-GAAP net income (loss) excludes share-based compensation expenses, amortization of intangible assets and net change in fair value of consideration payable and call option.

The Company bases these estimates on a foreign exchange rate of RMB6.30 to US$1.00. This forecast reflects the Company's current and preliminary view, which is subject to change.

Non-GAAP Financial Measures:

To supplement the unaudited condensed consolidated financial information presented in accordance with Accounting Principles Generally Accepted in the United States ("GAAP"), the Company also provides the following non-GAAP financial measures: "turnover," which is defined as total customer advertising spending placed through or with Charm, and "non-GAAP net income (loss)," which is defined as GAAP net income (loss) excluding stock-based compensation expenses, amortization of intangible assets and net change in fair value of consideration payable and call option.

The non-GAAP financial measures are provided to enhance investors' overall understanding of the Company's current and past financial performance in ongoing core operations as well as prospects for the future. These measures should be considered in addition to results prepared and presented in accordance with GAAP, but should not be considered a substitute for, or superior to, GAAP results. Management uses both GAAP and non-GAAP information in evaluating and operating the Company's business internally and therefore deems it important to provide all of this information to investors.

Cautions on Use of Non-GAAP Measures

In addition to Charm's consolidated financial results prepared under U.S. GAAP, the Company also provides non-GAAP financial measures, including "turnover" and "non-GAAP net income (loss)." The Company believes that the non-GAAP financial measures provide investors with another method for assessing its operating results in a manner that is focused on the performance of its ongoing operations.

Management believes investors will benefit from greater transparency in referring to these non-GAAP financial measures when assessing the Company's operating results, as well as when forecasting and analyzing future periods. However, management recognizes that:

  • these non-GAAP financial measures are limited in their usefulness and should be considered only as a supplement to the Company's GAAP financial measures;
  • these non-GAAP financial measures should not be considered in isolation from, or as a substitute for, the Company's GAAP financial measures;
  • these non-GAAP financial measures should not be considered to be superior to the Company's GAAP financial measures; and
  • these non-GAAP financial measures were not prepared in accordance with GAAP and investors should not assume that the non-GAAP financial measures presented in this earnings release were prepared under a comprehensive set of rules or principles.

Further, these non-GAAP financial measures may be unique to the Company, as they may be different from non-GAAP financial measures used by other companies. As such, this presentation of non-GAAP financial measures may not enhance the comparability of the Company's results to the results of other companies. 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.

A reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure or measures appears at the end of this press release.

Conference Call

Charm's management team will hold an earnings conference call at 8 a.m. U.S. Eastern Time (8 p.m. Beijing/Hong Kong Time) on Tuesday, March 19, 2013.

Dial-in details for the conference call are as follows:

U.S.:                   

+1-718-354-1231

International:        

+65-6723-9381

United Kingdom:  

+44-20-3059-8139

Hong Kong:         

+852-2475-0994

Passcode:           

22022244

A replay of the call will be available from 11 a.m. March 19, 2013 until March 26, 2013 U.S. Eastern Time. Dial-in details for the replay are as follows:

International:        

+61-2-8199-0299

Passcode:           

22022244

Additionally, an archived webcast of this call will be available on the Investor Relations section of the Charm web site at http:/ir.charmgroup.cn.

About Charm

Charm Communications Inc. (NASDAQ: CHRM) is a leading advertising agency group in China that offers integrated advertising services with particular focus on television and the internet. Charm's integrated advertising services include full media planning and buying, as well as creative and branding services. Charm has built a full service digital advertising platform, which offers digital campaign capabilities across all key digital media, including search engines, display portals, online video sites and social networking services. Charm also secures advertising inventory and other advertising rights, such as sponsorships and branded content, from premium media networks and resells to clients as part of its integrated media offerings. Charm's clients include China's top domestic brands, as well as some major international brands, across a wide range of industries. Since 2003 Charm has been the top agency every year for China's leading television network, China Central Television (CCTV). For more information, please go to http://ir.charmgroup.cn.

Safe Harbor Statement

This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in 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. All statements other than statements of historical fact in this press release are forward-looking statements and involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. These forward-looking statements are based on management's current expectations, assumptions, estimates and projections about the Company and the industry in which the Company operates, but involve a number of unknown risks and uncertainties. Further information regarding these and other risks is included in Charm's filings with the U.S. Securities and Exchange Commission, including its registration statement on Form F-1. The Company undertakes no obligation to update forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and actual results may differ materially from the anticipated results. You are urged to consider these factors carefully in evaluating the forward-looking statements contained herein and are cautioned not to place undue reliance on such forward-looking statements, which are qualified in their entirety by these cautionary statements.

For investor and media inquiries, please contact:

In China:

Ms. Jenny Wang
IR Department
Charm Communications Inc.
Phone: +86-10-8556-2527
Email: ir@charmgroup.cn

In the United States:

Ms. Jessica Barist Cohen
Ogilvy Financial, New York
Phone: +1-646-460-9989
Email: chrm@ogilvy.com  

 

 

Charm Communications Inc.
Unaudited Condensed Consolidated Balance Sheets

(Amounts in thousands of U.S. dollars)







31-Dec-12

30-Sep-12

31-Dec-11

ASSETS




Current Assets





Cash and cash equivalents

116,589

117,901

139,406


Notes receivable

6,993

13,084

28,880


Prepaid expenses

93,838

68,002

106,393


Deposits

24,723

24,085

25,730


Accounts receivable

89,964

115,314

103,920


Amount due from related parties

1,938

3,000

3,494


Deferred tax assets

191

125

125


Other current assets

4,021

4,838

2,139

Total current assets

338,257

346,349

410,087







Fixed assets, net

7,638

7,100

4,344


Intangible assets, net

2,375

2,616

3,397


Investments under equity method

2,133

1,491

1,445


Goodwill

4,379

4,341

4,335


Other investments

803




Other non-current assets

3,045

1,721

1,009






Total non-current assets

20,373

17,269

14,530






TOTAL ASSETS

358,630

363,618

424,617






LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND EQUITY



Current Liabilities





Accounts payable (of which 53, 648 and 687, as of December 31,
2012, September 30, 2012 and December 31,2011 of the
consolidated VIE without recourse to the Company, respectively)

38,855

46,061

63,141



Amounts due to related parties (of which 313, 310 and nil as of
December 31, 2012, September 30, 2012 and December 31,2011 of
the consolidated VIE without recourse to the Company, respectively)

13,310

14,356

4,460



Advances from customers (of which 1,408, 1,666 and 12,028 as of
December 31, 2012, September 30, 2012 and December 31,2011 of
the consolidated VIE without recourse to the Company, respectively)

56,343

53,833

85,720



Accrued expenses and other current liabilities (of which 3,246,
3,473 and 4,411 as of December 31, 2012, September 30, 2012 and
December 31,2011 of the consolidated VIE without recourse to the
Company, respectively)

18,912

14,548

22,876



Consideration payable (of which nil as of December 31, 2012,
September 30, 2012 and December 31,2011 of the consolidated VIE
without recourse to the Company, respectively)

2,507

2,817

2,813

Total current liabilities

129,927

131,615

179,010







Consideration payable (of which nil as of December 31, 2012,
September 30, 2012 and December 31, 2011 of the consolidated VIE
without recourse to the Company, respectively)

1,327

2,479

2,476

Total non-current liabilities

1,327

2,479

2,476






Total liabilities

131,254

134,094

181,486






Redeemable noncontrolling interest

5,434

5,137

4,723






Equity:




Charm Communications Inc.'s equity





Ordinary shares

8

8

8


Additional paid-in capital

100,850

100,782

116,637


Retained earnings

101,225

106,285

105,930


Accumulated other comprehensive income

15,652

13,695

13,384

Total Charm Communications Inc. shareholders' equity

217,735

220,770

235,959

Noncontrolling interest

4,207

3,617

2,449

Total equity

221,942

224,387

238,408





TOTAL LIABILITIES, REDEEMABLE NONCONTROLLING




INTEREST AND EQUITY

358,630

363,618

424,617

 

 

Charm Communications Inc.
Condensed Consolidated Statements of Operations
(Amounts in thousands of U.S. dollars, except for number of shares and per share data)










For the three months ended,




December 31
2012

December 31
2011

September 30
2012




(Unaudited)

(Unaudited)

(Unaudited)







Revenues:






Media investment management


32,042

65,618

34,073


Advertising agency


12,512

11,745

13,646


Branding and identity services


2,578

2,979

1,125

Total revenues


47,132

80,342

48,844







Cost of revenues:






Media investment management


31,159

48,861

32,301


Advertising agency


1,337

1,207

1,371


Branding and identity services


1,624

1,739

796

Total cost of revenues:


34,120

51,807

34,468

Gross profit


13,012

28,535

14,376







Operating expenses:






Selling and marketing expenses


11,286

9,643

9,413


General and administrative expenses


5,891

3,350

5,393

Total operating expenses


17,177

12,993

14,806


Gain(Loss) from equity method investees


307

(5)

237


Net change in fair value of consideration payable and call option


309

-

-

Operating profit (loss)


(3,549)

15,537

(193)








Interest income


568

663

472







Income before income tax expense


(2,981)

16,200

279


Income tax expense


1,195

465

192

Net income (loss)


(4,176)

15,735

87

Net income attributable to noncontrolling interest


884

944

597

Net income (loss) attributable to Charm Communications Inc.


(5,060)

14,791

(510)






Net income(loss) attributable to Charm Communications Inc. shareholders per ADS:





Basic


(0.13)

0.38

(0.01)

Diluted


(0.13)

0.36

(0.01)

Shares used in computation of net income(loss) per ADS:





Basic


38,269,369

39,075,906

38,765,702

Diluted


38,269,369

40,976,069

38,765,702







Notes:





Share-based compensation expenses during the period included in:





Cost of revenues


-

1

-

Selling and marketing expenses


318

571

323

General and administrative expenses


150

303

156

Total


468

875

479
















For the three months ended,




December 31
2012

December 31
2011

September 30
2012




(Unaudited)

(Unaudited)

(Unaudited)







Net income (loss)


(4,176)

15,735

87

Other comprehensive income (loss):





Change in cumulative foreign exchange translation adjustment


1,957

2,938

2,404

Comprehensive income (loss)


(2,219)

18,673

2,491







Less: Comprehensive income attributable to non-controlling interest


(590)

(754)

(688)

Less: Comprehensive income attributable to redeemable non-controlling interest

(297)

(190)

(146)







Comprehensive income (loss) attributable to Charm Communications Inc.


(3,106)

17,729

1,657

 

 

Charm Communications Inc.

Condensed Consolidated Statements of Operations

(Amounts in thousands of U.S. dollars, except for number of shares and per share data)









For the twelve months ended,




December 31, 2012

December 31, 2011




(Unaudited)

(Audited)






Revenues:





Media investment management


112,786

238,837


Advertising agency


46,234

34,285


Branding and identity services


6,478

7,016

Total revenues


165,498

280,138






Cost of revenues:





Media investment management


107,976

187,878


Advertising agency


4,864

3,737


Branding and identity services


4,303

4,015

Total cost of revenues:


117,143

195,630

Gross profit


48,355

84,508






Operating expenses:





Selling and marketing expenses


36,026

27,119


General and administrative expenses


16,234

9,704

Total operating expenses


52,260

36,823


Gain(Loss) from equity method investees


350

2


Net change in fair value of consideration payable and call option


309


Operating profit (loss)


(3,246)

47,687







Interest income


2,255

2,497


Other expense


13

-






Income (loss) before income tax expense


(1,004)

50,184


Income tax expense


1,472

2,158

Net income (loss)


(2,476)

48,026

Net income attributable to noncontrolling interest


2,229

1,879

Net income (loss) attributable to Charm Communications Inc.


(4,705)

46,147





Net income(loss) attributable to Charm Communications Inc. shareholders per ADS:




Basic


(0.12)

1.18

Diluted


(0.12)

1.12

Shares used in computation of net income(loss) per ADS:




Basic


38,749,125

39,133,419

Diluted


38,749,125

41,056,882






Notes:





(1) Share-based compensation expenses during the period included in:




Cost of revenues


1

4

Selling and marketing expenses


1,506

1,979

General and administrative expenses


707

1,086

Total



2,214

3,069



















For the twelve months ended,




December 31, 2012

December 31, 2011




(Unaudited)

(Audited)






Net income (loss)


(2,476)

48,026

Other comprehensive income (loss):




Change in cumulative foreign exchange translation adjustment


2,268

9,065

Comprehensive income (loss)


(208)

57,091






Less: Comprehensive income attributable to non-controlling interest


(1,758)

(1,572)

Less: Comprehensive income attributable to redeemable non-controlling interest

(711)

(4,723)






Comprehensive income (loss) attributable to Charm Communications Inc.

(2,677)

50,796

 

 

Reconciliation from Net income (loss) to Non-GAAP net income (loss):
(Amounts in thousands of U.S. dollars)


For the three months ended,


December 31
2012

December 31
2011

September 30
2012





Net income (loss)

(4,176)

15,735

87





Add back share-based compensation expenses




during the related periods

468

875

479





Add back amortization on intangible assets

261

443

259





Deduct net change in fair value of consideration payable and call option

(309)







Non-GAAP net income (loss)

(3,756)

17,053

825










For the twelve months ended,



December 31, 2012

December 31, 2011






Net income (loss)

(2,476)

48,026






Add back share-based compensation expenses




during the related periods

2,214

3,069






Add back amortization on intangible assets

1,041

650






Deduct net change in fair value of consideration payable and call option

(309)







Non-GAAP net income

470

51,745


 

Reconciliation from Turnover (non-GAAP) to USGAAP Revenues:
(Amounts in thousands of U.S. dollars)






For the three months ended,


December 31
2012

December 31
2011

September 30
2012

Turnover (non-GAAP):




Media investment management

32,042

65,618

34,073

Advertising agency

169,570

189,178

182,457

Branding and identity services

N/A

N/A

N/A

Total turnover

201,612

254,796

216,530





Extracted rate:




Media investment management

100.0%

100.0%

100.0%

Advertising agency

7.4%

6.2%

7.5%

Branding and identity services

N/A

N/A

N/A





USGAAP Revenue:




Media investment management

32,042

65,618

34,073

Advertising agency

12,512

11,745

13,646

Branding and identity services

2,578

2,979

1,125

Total revenue

47,132

80,342

48,844






For the twelve months ended,



December 31,
2012

December 31,
2011






Turnover (non-GAAP):




Media investment management

112,786

238,837


Advertising agency

711,093

635,654


Branding and identity services

N/A

N/A


Total turnover

823,879

874,491






Extracted rate:




Media investment management

100.0%

100.0%


Advertising agency

6.5%

5.4%


Branding and identity services

N/A

N/A






USGAAP Revenue:




Media investment management

112,786

238,837


Advertising agency

46,234

34,285


Branding and identity services

6,478

7,016


Total revenue

165,498

280,138


SOURCE Charm Communications Inc.



RELATED LINKS
http://ir.charmgroup.cn

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