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China Finance Online Reports Unaudited Third Quarter 2009 Results
Q3 2009 Highlights
Third Quarter
2009 2008
(in thousands of U.S. dollars,
except per ADS data)
1) Financial Data:
Net revenues $14,577 $15,228
GAAP net income (loss) (1,033) 4,772
Non-GAAP net income 600 6,383
GAAP net income (loss) per ADS
Basic $(0.05) $0.24
Diluted $(0.05) $0.21
Non-GAAP net income per ADS
Basic $0.03 $0.32
Diluted $0.03 $0.28
2) Operating Data:
Registered users 13,120,000 10,900,000
Active paid individual subscribers 112,000 115,000
* Non-GAAP net income, which is defined as net loss excluding stock-based
compensation expenses, was $600,000 for the third quarter of 2009,
compared to non-GAAP net loss of $761,000 for the second quarter of 2009.
* Net revenues were $14.58 million for Q3 2009, up 19%
quarter-over-quarter, exceeded the high end of the Company's prior
guidance of $12.0 to 13.0 million.
* Registered user accounts of jrj.com and stockstar.com grew to 13.12
million, an increase of 720,000 from the previous quarter. Active paid
individual subscribers, which refer to individual investors who
subscribe for a fee to our products through downloading, via web or by
mobile phones, were 112,000. As of September 30, 2009, our Hong Kong
brokerage operation Daily Growth had approximately 1,420 customer
accounts.
Explanation of the Company's non-GAAP financial measures and the related reconciliations to GAAP financial measures are included in the accompanying "Non-GAAP Measures" and "Reconciliations from net income to adjusted EBITDA".
Q3 2009 Financial Results
Net Revenues:
For the third quarter of 2009, China Finance Online reported net revenues
of
Revenues breakdown is summarized in the following table:
Three months ended
September June September
30, 2009 30, 2009 30, 2008
(In thousands of U.S. dollars)
1) Subscription service fees paid
by individual customers 11,389 78% 10,709 88% 13,377 88%
2) Revenues from mobile value
added services 250 2% 271 2% 170 1%
3) Subscription service fees paid
by institutional customers 423 3% 279 2% 407 3%
4) Revenues from advertising-
related business 1,116 8% 774 6% 764 5%
5) Revenues from brokerage-
related services 1,383 9% 206 2% 496 3%
6) Revenues from others 16 <1% 41 <1% 14 <1%
Total net revenues 14,577 100% 12,280 100% 15,228 100%
Gross Profit:
Gross profit for the quarter was
A large portion of costs of revenue are website maintenance expenses,
which consist of bandwidth costs, personnel-related expenses, server
depreciation expenses, and content expenses for our jrj.com and stockstar.com
websites. Website maintenance expenses for the third quarter of 2009 were
Operating Expenses:
Operating expenses for the third quarter of 2009 totalled
-- General and administrative expenses for the quarter were $5.0 million,
compared to $3.42 million for the same period of 2008 and $4.03 million
for the previous quarter. Excluding stock-based compensation of $1.60
million, general and administrative expenses were $3.40 million for the
third quarter, compared to $1.88 million in the third quarter of 2008
and $2.43 million in the previous quarter.
-- Sales and marketing expenses for the third quarter were $6.42 million,
compared to $3.64 million for the same period in 2008 and $6.56 million
for the previous quarter. Excluding stock-based compensation of $21,000,
sales and marketing expenses was $6.40 million for the third quarter,
compared to $3.58 million in the third quarter of 2008 and $6.54
million in the previous quarter.
-- Product development expenses for the third quarter were $2.87 million,
compared to $1.49 million for the same period in 2008 and $3.03 million
for the previous quarter. Excluding stock-based compensation of $13,000,
product development expenses were $2.86 million, compared to $1.48
million in the third quarter of 2008 and $3.02 million in the previous
quarter.
Income (Loss) from Operations:
Loss from operations for the third quarter of 2009 was
Net Income (Loss) and Non-GAAP Net Income (Loss):
Net loss for the third quarter was
Total income tax benefit for the quarter was
Non-GAAP net income, which is defined as net loss excluding stock-based
compensation expenses, was
As part of the net loss for the third quarter of 2009, the Company
recorded a foreign exchange gain of
Deferred Revenue:
Deferred revenue at the end of the third quarter of 2009, which represents
prepaid service fees made by customers for subscription services that have not
been rendered as of
Cash and Cash Equivalents:
Balance of cash and cash equivalents was approximately
Cash Flow:
Cash inflow from subscription services provided to individual customers
was
Adjusted EBITDA (Non-GAAP):
Adjusted EBITDA (non-GAAP), which is defined as earnings before interest,
taxes, depreciation, amortization, other non-operating income, and stock-based
compensation expenses, was
Other Operating Metrics
As of
Active paid individual subscribers were 112,000 at the end of the third quarter 2009.
As of
Outlook for Fourth Quarter 2009
The Company believes that the Chinese economy continues on a gradual rebound mode, and the path to a full recovery will be uneven, as such, the volatile domestic equity market will continue to influence the Company's operating results in the coming quarters.
The Company currently expects to generate net revenues in an amount
ranging from
For 2009, the Company will focus effort and invest resources to upgrade key areas of its operations, such as people, data, products, customers, technologies and execution, thus build a solid foundation to sustain healthy long-term growth. At the same time, management understands the challenges ahead and will be extremely prudent to manage the balance sheet while deploying necessary resources in core areas. The Company intends to achieve free cash flow positive in 2009 on a full year basis, excluding potential M&A activities.
The above forecast reflects the Company's current and preliminary view, which is subject to change. A number of important factors including, but not limited to, fluctuation in the Chinese stock market, could cause the actual results to differ materially from those contained in the above guidance.
Conference Call
China Finance Online's management team will host a conference call at
The conference call will be available on webcast live and replay at: http://tinyurl.com/yelv7cm . The call will be archived for 12 months at this website.
The dial-in details for the live conference call: U.S. Toll Free Number
+1-877-847-0047, Hong Kong Dial In Number +852-3006-8101, and
A replay of the conference call will be available from approximately
About China Finance Online Co. Limited
China Finance Online Co. Limited is the market leader in providing online
financial and listed company data, information and analytics in
Safe Harbor Statements
This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995.
Statements that are not historical facts, including statements about our
beliefs and expectations, are forward-looking statements. These statements are
based on current plans, estimates and projections, and therefore you should
not place undue reliance on them. Forward-looking statements involve inherent
risks and uncertainties. We caution you that 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 not
limited to, our historical and possible future losses, limited operating
history, uncertain regulatory landscape in
Non-GAAP Measures
To supplement the unaudited condensed consolidated financial information
presented in accordance with Accounting Principles Generally Accepted in
China Finance Online Co. Limited
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands of U.S. dollars)
Sep. 30, Dec. 31,
2009 2008
Assets
Current assets:
RMB account 89,447 80,308
Foreign currency account 14,962 17,236
Cash and cash equivalents 104,409 97,544
Trust bank balances held on behalf of
customers 5,485 2,010
Advance to employees -- 161
Accounts receivable, net 3,425 2,876
Advance to customers 4,008 --
Prepaid expenses and other current assets 6,332 8,582
Deferred tax assets, current 3,388 2,526
Total current assets 127,047 113,699
Cost method investment 1,480 1,480
Property and equipment, net 9,752 8,589
Acquired intangible assets, net 3,171 3,473
Rental deposits 759 592
Goodwill 12,568 12,019
Deferred tax assets, non-current 2,467 1,754
Other deposits 221 218
Total assets 157,465 141,824
Liabilities and shareholders' equity
Current liabilities:
Deferred revenue, current 28,247 28,202
Accrued expenses and other current liabilities 5,857 4,897
Bank loan 2,839 --
Amount due to customers for trust bank
balances held on behalf of customers 5,485 2,010
Accounts payable 223 222
Deferred tax liability, current 387 --
Income taxes payable 144 142
Total current liabilities 43,182 35,473
Deferred tax liability, non-current 695 623
Deferred revenue, non-current 15,130 8,786
Total liabilities 59,007 44,882
Total shareholders' equity 98,458 96,942
Total liabilities and shareholders' equity 157,465 141,824
China Finance Online Co. Limited
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands of U.S. dollars, except per share data)
Three months ended
Sep. 30, Sep. 30, Jun. 30,
2009 2008 2009
Net revenues 14,577 15,228 12,280
Cost of revenues (2,309) (2,768) (2,032)
Gross profit 12,268 12,460 10,248
Operating expenses
General and administrative (includes
share-based compensation expense of
$1,599, $1,539, and $1,600,
respectively) (5,004) (3,422) (4,032)
Sales and marketing (includes
share-based compensation expense of
$21, $61, and $22, respectively) (6,416) (3,641) (6,560)
Product development (includes
share-based compensation expense of
$13, $11, and $13, respectively) (2,873) (1,493) (3,030)
Total operating expenses (14,293) (8,556) (13,622)
Subsidy income 219 -- 150
Income (loss) from operations (1,806) 3,904 (3,224)
Interest income 379 515 302
Investment loss -- (76) --
Other income, net (70) (3) 4
Exchange gain (loss), net 8 184 (16)
Income (loss) before income tax
benefit (1,489) 4,524 (2,934)
Income tax benefit 456 248 538
Net income (loss) (1,033) 4,772 (2,396)
Income (loss) per share
Basic (0.01) 0.05 (0.02)
Diluted (0.01) 0.04 (0.02)
Income (loss) per ADS
Basic (0.05) 0.24 (0.11)
Diluted (0.05) 0.21 (0.11)
Weighted average ordinary shares
Basic 105,621,910 99,059,916 104,810,265
Diluted 105,621,910 113,911,176 104,810,265
Weighted average ADSs
Basic 21,124,382 19,811,983 20,962,053
Diluted 21,124,382 22,782,235 20,962,053
China Finance Online Co. Limited
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands of U.S. dollars)
Three months ended
Sep. 30, Sep. 30, Jun. 30,
2009 2008 2009
Cash flows from operating activities:
Net income (loss) (1,033) 4,772 (2,396)
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Stock-based compensation 1,633 1,611 1,635
Depreciation and amortization 751 580 690
Deferred taxes (596) (249) (684)
Loss on disposal of property and equipment -- 16 --
Loss from short term investments -- 76 --
Changes in assets and liabilities:
Accounts receivable (658) 56 (533)
Advance to customers (1,526) -- (2,482)
Prepaid expenses and other current assets 2,314 (4,446) 117
Advance to employees -- (500) --
Trust bank balances held on behalf of
customers (2,143) 2,567 (869)
Rental deposits -- (2) (179)
Deferred revenue 1,572 54 9,270
Accounts payable (152) 38 223
Amount due to customers for trust bank
balances held on behalf of customers 2,143 (2,567) 869
Accrued expenses and other current
liabilities 270 (1,312) 1,321
Income taxes payable (4) (6) 104
Net cash provided by operating activities 2,571 688 7,086
Cash flows from investing activities:
Acquisition of businesses -- (3,583) (293)
Purchase of property and equipment (1,696) (1,325) (2,116)
Net cash used in investing activities (1,696) (4,908) (2,409)
Cash flows from financing activities:
Proceeds from stock options exercised by
employees 40 194 24
Proceeds from exercise of options granted to
non-employee -- 42 --
Bank loan 2,839 -- --
Net cash provided by financing activities 2,879 236 24
Effect of exchange rate changes 27 451 28
Net increase (decrease) in cash and cash
equivalents 3,781 (3,533) 4,729
Cash and cash equivalents, beginning of
month/quarter 100,628 85,928 95,899
Cash and cash equivalents, end of
month/quarter 104,409 82,395 100,628
Non-GAAP Measures
Three months ended Sep. 30, 2009
(U.S. Dollar in thousands)
GAAP Result Adjustment Non-GAAP
(a) Results
Income (loss) from
operations (1,806) 1,633 (173)
Three months ended Sep. 30, 2008
(U.S. Dollar in thousands)
GAAP Result Adjustment Non-GAAP
(a) Results
Income (loss) from
operations 3,904 1,611 5,515
Three months ended Jun. 30, 2009
(U.S. Dollar in thousands)
GAAP Result Adjustment Non-GAAP
(a) Results
Income (loss) from
operations (3,224) 1,635 (1,589)
Three months ended Sep. 30, 2009
(U.S. Dollar in thousands)
GAAP Result Adjustment Non-GAAP
(a) Results
Net income (loss) (1,033) 1,633 600
Three months ended Sep. 30, 2008
(U.S. Dollar in thousands)
GAAP Result Adjustment Non-GAAP
(a) Results
Net income (loss) 4,772 1,611 6,383
Three months ended Jun. 30, 2009
(U.S. Dollar in thousands)
GAAP Result Adjustment Non-GAAP
(a) Results
Net income (loss) (2,396) 1,635 (761)
(a) The adjustment is for share-based compensation expenses.
Reconciliations from net income (loss) to adjusted EBITDA
Three months Three months Three months
ended Sep. ended Sep. ended Jun.
30, 2009 30, 2008 30, 2009
(U.S. Dollar in thousands)
Net income (loss) (1,033) 4,772 (2,396)
Adjustment
Interest income (379) (515) (302)
Income tax benefit (456) (248) (538)
Other income and expenses 62 (105) 12
Depreciation 640 498 579
Amortization of intangibles
and others 111 82 111
Share-based compensation 1,633 1,611 1,635
Adjusted EBITDA 578 6,095 (899)
SOURCE China Finance Online Co. Limited
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