Focus Media Reports First Quarter 2012 Results

SHANGHAI, May 28, 2012 /PRNewswire-Asia/ -- Focus Media Holding Limited (Nasdaq: FMCN) today announced its unaudited financial results for the first quarter ended March 31, 2012.

Highlights for first Quarter 2012:

  • Total net revenue for the first quarter of 2012 was $199.6 million, of which
    • aggregate net revenue from the LCD display network, in-store network, poster frame network and movie theater network was $184.3 million, which exceeded by approximately 4% the mid-point of the Company's guidance range of $177-179 million.  This represented an increase of 35% from $136.1 million for the first quarter of 2011 and;
    • net revenue from the traditional outdoor billboard network for the first quarter of 2012 was $15.3 million, which exceeded by approximately 9% the mid-point of the guidance range of $13-15 million. This represented an increase of 46% from $10.5 million for the first quarter of 2011.
  • GAAP net income attributable to Focus Media was $37.9 million, representing an increase of 85% from $20.5 million for the first quarter of 2011.
  • Non-GAAP net income attributable to Focus Media for the first quarter of 2012 was $61.6 million, exceeding the mid-point of the Company's guidance range of $58-$60 million by 4%, and representing an increase of 45% from non-GAAP net income attributable to Focus Media of $42.4 million for the first 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 $0.28, representing an increase of 87% from $0.15 per fully diluted ADS for the first quarter of 2011.
  • Non-GAAP net income attributable to Focus Media per fully diluted ADS was $0.46, representing an increase of 53% from $0.30 per fully diluted ADS for the first quarter of 2011.

Highlights for Balance Sheet and Cash Flow Results of First Quarter 2012:

  • Cash, cash equivalents, restricted cash and short-term investments were $816.8 million as of March 31, 2012, increasing by 8% from $756.6 million as of December 31, 2011. Restricted cash is deposited in bank accounts as security for bank borrowings. These deposits carry fixed interest rates and are released when the related bank borrowings are settled by the Company. Restricted cash was $226.1 million as of March 31, 2012, as compared to $199.3 million as of December 31, 2011, including current restricted cash of 126.3 million and non-current restricted cash of $99.8 million. The short-term investments, consisting of longer term dated cash deposits that earn higher interest rates as compared to cash and cash equivalent, was $228.5 million as of March 31, 2012 as compared to $226.0 million as of December 31, 2011.
  • Bank loans were $197.6 million inclusive of short-term bank loans of $126.6 million and long-term bank loans of $71.0 million as of March 31, 2012, as compared to bank loans of $171.0 million as of December 31, 2011, which were used to finance the Company's share repurchases. As of May 28, 2012, the Company has been extended a bank loan facility totaling $300.0 million, of which $100.0 million is long-term and $200.0 million is short-term. Out of the total $300.0 million bank loan facility, $200.0 million has been drawn down by the Company as of May 28, 2012, including short-term bank loan of $100.0 million and long-term bank loan of $100.0 million. Operationally, as the Company generates cash inflow in Renminbi onshore, offshore bank loans are used to increase our offshore USD base cash resources mainly for future dividend payouts or share repurchases. The entire bank loan facility was extended based on an equivalent Renminbi onshore cash deposit, which was deposited as restricted cash.
  • Net accounts receivable for the LCD display network, in-store network, poster frame network and movie theater network was $226.4 million as of March 31, 2012, a slight decrease of 3% from $232.6 million as of December 31, 2011. Days sales outstanding was 107 days in the first quarter of 2012 versus 78 days for the fourth quarter of 2011. The longer days sales outstanding ("DSO") in the first quarter of 2012 as compared to that for the fourth quarter of 2011 was attributable to: 1) a change to gross revenues, as a result of the value-added tax implemented in the advertising industry in Shanghai since January 1, 2012; and 2) seasonally slower cash collection at the beginning of the year
  • Net cash inflow from operating activities in the first quarter of 2012 was $44.8 million, more than tripling the $14.5 million for the first quarter of 2011.
  • Net cash inflow from operating activities for the first quarter of 2012, after deducting the purchases of equipment and subsidiaries was $38.5 million, a significant growth of over $5.0 million for the first quarter of 2011.
  • Capital expenditures were $4.9 million for the first quarter of 2012, mostly attributable to upgrading our LCD screens into interactive screens and to network expansion in lower tier cities in China.
  • Cash paid for the acquisition of subsidiaries in the first quarter of 2012 was $1.4 million, which was attributable to the expansion of the LCD display network in lower tier cities;
  • Cash used for repurchasing shares in the first quarter of 2012 was $6.0 million.

Jason Jiang, Chairman and Chief Executive Officer of Focus Media said, "In the first quarter of 2012, our year-on-year revenue growth was mainly driven by the strength of our poster frame and in-store networks due to their exposure to promotion spending budgets which tend to be less affected by macroeconomic uncertainty, mitigating slower growth of our LCD network which was affected by cut back on branding budgets, which tend to be impacted by macroeconomic uncertainties. We have since second quarter of 2012 seen some form of stabilization in the advertising environment including branding spending, despite we have yet to see return to normalization. We remain confident and will continue to strive to achieve our business objectives for the year."

Kit Low, the Company Chief Financial Officer added, "We continue to register gross margin expansion for the Company on a year-on-year basis, which was helped by diversification of our revenue sources from our various business lines. In the first quarter of 2012, the Company achieved aggregate net revenue year-on-year growth in our LCD display, poster frame business, in-store and movie theater network of 35%. GAAP net income attributable to Focus Media and Non-GAAP net income attributable to Focus Media for the first quarter of 2012 was $37.9 million and $61.6 million, respectively. In the first quarter of 2012, the Company generated a net cash inflow from operating activities after deducting the purchases of equipment and subsidiaries of $38.5 million."

First Quarter 2012 financial results

Advertising net revenue from the LCD display network was $87.6 million for the first quarter of 2012, representing an increase of 6% from $82.5 million for the first quarter of 2011. The slower year-on-year growth as compared to previous quarters was mainly driven by a combination of macro-economic uncertainty and an earlier Chinese Lunar New Year which we believe pulled some of the otherwise first quarter 2012 advertising budget into fourth quarter of 2011. It also represented a decrease of 36% from $137.4 million for the fourth quarter of 2011 due to seasonality and we believe also magnified by an earlier Chinese Lunar New Year.

Advertising net revenue from the poster frame network was $65.7 million for the first quarter of 2012, representing an increase of 82% from $36.1 million for the first quarter of 2011 which was driven by the strength of promotional budget spending in the market as well as a more stabilized competitive environment of the poster frame business. It also represented a slight increase of 2% from $64.5 million for the fourth quarter of 2011.

Advertising net revenue from the in-store network was $12.7 million for the first quarter of 2012, representing an increase of 34% from $9.5 million for the first quarter of 2011 and a decrease of 21% from $16.1 million for the fourth quarter of 2011 due to seasonality.

Advertising net revenue from the movie theater network was $18.4 million for the first quarter of 2012, more than doubling the $8.0 million for the first quarter of 2011 which was attributable to robust growth of Chinese box office as well as robust execution by the business division. It also represented a decrease of 11% from $20.8 million for the fourth quarter of 2011 due to seasonal factors.

Advertising net revenue from the traditional outdoor billboard network was $15.3 million for the first quarter of 2012, representing an increase of 46% from $10.5 million for the first quarter of 2011 which was primarily helped by the revenue consolidated from the four subsidiaries acquired in the second half of 2011. It also represented a decrease of 13% from $17.6 million for the fourth quarter of 2011 which was due to seasonality.

Non-GAAP gross profit from the LCD display network for the first quarter of 2012 was $62.6 million, a slight decrease of 2% from $64.2 million for the first quarter of 2011 which was attributable to an increase in the expenses associated with interactive screens including depreciation, and labor expenses as well as rental expenses due to footprint expansion. It also represented a decrease of 45% from $113.6 million for the fourth quarter of 2011 which was mainly due to quarter-on-quarter revenue decline.

Non-GAAP gross profit from the poster frame network for the first quarter of 2012 was $36.5 million, more than tripling the $11.6 million for the first quarter of 2011 due to significant year-on-year growth of revenues, and representing a slight increase of 2% from $35.9 million for the fourth quarter of 2011.

Non-GAAP gross profit from the in-store network for the first quarter of 2012 was $7.1 million, representing an increase of 87% from $3.8 million for the first quarter of 2011 and a decrease of 45% from $12.8 million in the fourth quarter of 2011 which was due to the seasonal revenue decline.

Non-GAAP gross profit from the movie theater network for the first quarter of 2012 was $12.0 million, a significant growth over $1.8 million for the first quarter of 2011, and a decrease of 13% from $13.8 million for the fourth quarter of 2011 which was due to seasonal revenue decline.

Non-GAAP gross profit from the traditional outdoor billboard network for the first quarter of 2012 was $3.2 million, an increase of 77% from $1.8 million for the first quarter of 2011 and an increase of 23% from $2.6 million for the fourth quarter of 2011.

Non-GAAP operating expenses for the first quarter of 2012 was $47.3 million, an increase of 28% from $37.0 million for the first quarter of 2011, which was mainly attributable to an increase in selling and marketing expenses resulting from revenue growth. It also represented a decrease of 24% from $64.0 million for the fourth quarter of 2011 which was also attributable to a decrease in selling and marketing expenses in line with the seasonal revenue decline.

In the first quarter of 2012, the provision for income taxes included withholding tax amounting to $2.3 million, which was accrued based on the expected amount of dividend to be distributed from the domestic operating arm to our offshore holding company, which is subject to PRC's withholding tax rate of 10%.

Net cash provided by operating activities for the first quarter of 2012 was $44.8 million, more than tripling the $14.5 million for the first quarter of 2011.

Net cash used in investing activities for the first quarter of 2012 was $34.9 million. In the first quarter of 2012, the Company incurred capital expenditures of $4.9 million and subsidiary acquisition payments of $1.4 million. Meanwhile, the Company incurred net cash outflows from investment in short-term investments and deposits in restricted cash of $28.7 million during the quarter. Short-term investments are longer term dated cash deposits normally with maturities 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 provided by financing activities for the first quarter of 2012 was $20.5 million. In the first quarter of 2012, the Company received net cash inflow from the proceeds of bank loans of $26.5 million and the Company used $6.0 million in share repurchases during the quarter.

Operating Data Summary

As a supplementary operating metric, the Company has historically provided investors with information regarding the number of displays in our networks. In order to help the investors gain a better understanding of our media platform and the differentiations between different types of devices and to align this operating metrics with our internal financial reporting, starting from the fourth quarter of 2011, the Company has decided to re-categorize the LCD 1.0 picture frame devices from the LCD display network division into the poster frame network division for screen count purposes. As such, 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 March 31, 2012

As of December 31, 2011

LCD screens

128,901

122,115

LCD 2.0 digital picture screens

34,375

33,636

Total for LCD display network (note)

163,276

155,751




Note: LCD screens have excluded LCD 1.0 picture frame devices since the fourth quarter of 2011.  The increase in the total number of LCD screens and LCD 2.0 digital picture screens as of March 31, 2012 as compared to that as of December 31, 2011 was due to organic network expansion. Of the total LCD screens of 128,901 as of March 31, 2012, 9,157 screens were operated through our regional distributors.

2) The approximate number of devices in the poster frame network was as follows:


As of March 31, 2012

As of December 31, 2011

Frame 1.0 picture frames (note)

473,360

445,126

Frame 2.0 digital picture screens

35,575

35,050

Total

508,935

480,176




Note: Frame 1.0 picture frames have included LCD 1.0 picture frame devices since the fourth quarter of 2011. The increase in the total number of Frame 1.0 picture frames as of March 31, 2012 as compared to that as of December 31, 2011 was due to organic network expansion.


3) The total number of displays installed in our in-store network was approximately 49,330 as of March 31, 2012, as compared to 50,076 as of December 31, 2011. The slight decrease was due to the optimization of the network in convenience stores.

4) The number of movie screens on which the Company had right to lease advertising time as of March 31, 2012 was approximately 2,190, unchanged from December 31, 2011.

Business Outlook for Second Quarter 2012

The Company provides the following guidance with respect to the quarter ending June 30, 2012:

Net revenues for the core business (inclusive of the LCD display network, the in-store network, the poster frame network and the movie theater network) are expected to be in the range of $211-$213 million, the mid-point of which would represent year-on-year growth of 28% and quarter on quarter growth of 15%. Net revenues for the non-core business (the traditional outdoor billboard network) are expected to be in the range of $13-$15 million. The Company's non-GAAP net income is expected to be in the range of $78-$80 million. The Company estimates the weighted average fully diluted ADS count for the quarter at 133.8 million, assuming no further share repurchases during the quarter.

Announced Share Repurchase Program

As of May 28, 2012, the Company has cumulatively spent $491 million in share repurchases out of the share repurchase program totaling $650 million. The Company spent an additional $35.4 million in share repurchases between April 1, 2012 and May 28, 2012.

Payment of announced recurring payout

Focus Media announced on January 10, 2012 that the Company is committed to a 55% annual payout based on prior year non-GAAP net income. Of which 25% of the payout is expected to be dividend payments to be paid on a quarterly basis, which will be paid out in the following calendar year to shareholders of record as of March 31, June 30, September 30 and December 31 respectively, while the remaining 30% payout is expected to be either dividend payments and/or share repurchases. The payout commences in 2012 in respect of Focus Media's non-GAAP net income for 2011.

Based on the Company 2011 non-GAAP net income of $284.1 million, a cash dividend of US$0.0274 per ordinary share (or US$0.137 per American Depositary Share) was already paid on April 16, 2012 to shareholders of record as of the close of business on March 30, 2012. Meanwhile, the board of directors has approved a cash dividend of US$0.0272 per ordinary share (or US$0.136 per American Depositary Share) to be payable on July 16, 2012 to shareholders of record as of the close of business on June 29, 2012.

Value-added tax reform in Shanghai

The government implemented a value-added tax reform pilot program, which replaced the business tax with value-added tax on selected sectors including the advertising sector, in Shanghai effective January 1, 2012. The value-added tax rate applicable to the subsidiaries of our group in Shanghai is 6% as compared to the 5% business tax rate which was applicable prior to the reform. 

Foreign Currency Translation

Assets and liabilities are translated at the exchange rate as of March 31, 2012, which was $1 to RMB 6.2943. Equity accounts are translated at historical exchange rates and revenues, expenses, gains and losses are translated using the average rate for the first quarter of 2012, which was $1 to RMB 6.3088. Translation adjustments are reported as cumulative translation adjustments and are a separate component of other 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 and loss from equity method investee. 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 and loss from equity method investee. 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 March 31, 2012


GAAP

(1)

(2)

(3)

Non-GAAP







Gross Profit






LCD display network

61,157

483

943

62,583

Poster frame network

36,303


212

36,515

In-store network

7,061

7,061

Movie theater network

12,036

12,036

Traditional outdoor billboard network

2,160

1,044

3,204

Total Gross Profit

118,717

483

2,199

121,399







General and administrative

30,104

(15,435)

14,669

Selling and marketing

38,642

(1,402)

(1,123)

36,117

Other operating  income, net

(3,523)

(3,523)

Total operating expense

65,223

(16,837)

(1,123)

47,263







Operating profit from continuing operations

53,494

17,320

3,322

74,136







Profit from continuing operations
    before income taxes and loss
    from equity method investee

56,853

17,320

3,322

77,495







Net profit from continuing operations

37,511

17,320

3,322

3,025

61,178







Net income attributable to Focus Media

37,911

17,320

3,322

3,025

61,578













Basic net income attributable to Focus
    Media per ADS

0.29




0.48

Diluted net income attributable to Focus
    Media per ADS

0.28




0.46







ADS used in calculating basic income per ADS

129,292,048




129, 292,048

ADS used in calculating diluted income per ADS

133,702,219




133, 702,219







(1). Share-based compensation.

(2). Amortization of acquired intangible assets.

(3). Loss from equity method investee (VisionChina)

 


Three months ended December 31, 2011


GAAP

(1)

(2)

(3)

Non-GAAP







Gross Profit






LCD display network

112,183

286

1,100

113,569

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

1,624

1,020

2,644

Total Gross Profit

175,443

286

3,010

178,739







General and administrative

37,561

(14,267)

23,294

Selling and marketing

50,843

(1,029)

(1,474)

48,340

Other operating  income, net

(8,172)

(8,172)

Total operating expense

80,232

(15,296)

(1,474)

63,462







Operating profit from continuing
operations

95,211

15,582

4,484

115,277







Profit from continuing operations
    before income taxes and loss
    from equity method investee

99,264

15,582

4,484

119,330







Net profit from continuing operations

35,505

15,582

4,484

38,883

94,454







Net income attributable to Focus Media

37,098

15,582

4,484

38,883

96,047













Basic net income attributable to Focus
    Media per ADS

0.28




0.73

Diluted net income attributable to Focus
    Media per ADS

0.27




0.70







ADS used in calculating basic income per ADS

132,238,128




132,238,128

ADS used in calculating diluted income per ADS

137,138,086




137,138,086







(1). Share-based compensation.

(2). Amortization of acquired intangible assets.

(3). Loss from equity method investee (VisionChina)

 


Three months ended March 31, 2011


GAAP

(1)

(2)

(3)

Non- GAAP







Gross Profit






LCD display network

62,880

196

1,094

-

64,170

Poster frame network

10,374

-

1,178

-

11,552

In-store network

3,811

-

-

-

3,811

Movie theater network

1,769

-

16

-

1,785

Traditional outdoor billboard network

1,387

-

445

-

1,832

Total Gross Profit

80,221

196

2,733

-

83,150







General and administrative

26,624

(14,154)

-

-

12,470

Selling and marketing

31,201

(917)

(1,058)

-

29,226

Other operating  income, net

(4,705)

-

-

-

(4,705)

Total operating expense

53,120

(15,071)

(1,058)

-

36,991







Operating profit from continuing operations

27,101

15,267

3,791

-

46,159







Profit from continuing operations before
income taxes and loss from equity method investee

29,462

15,267

3,791

-

48,520







Net profit from continuing operations

19,781

15,267

3,791

2,774

41,613







Net income attributable to Focus Media

20,549

15,267

3,791

2,774

42,381







Basic net income from continuing operations per ADS

0.15




0.31

Diluted net income from continuing operations per ADS

0.14




0.30







Basic net income attributable to Focus Media per ADS

0.15




0.31

Diluted net income attributable to Focus Media per ADS

0.15




0.30







ADS used in calculating basic income per ADS

135,594,008




135,594,008

ADS used in calculating diluted income per ADS

140,394,354




140,394,354







(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 first quarter 2012 results at 9:00 p.m. U.S. Eastern Time on May 28, 2012 (6:00 p.m. U.S. Pacific Time on May 28, 2012 and 9:00 a.m. Beijing/Hong Kong Time on May 29, 2012). 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

# 82274147

2) A replay of the call will be available from May 29, 2012 12:00am until June 5, 2012 9:59am (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

# 82274147

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)




2012-03-31

2011-12-31

2011-03-31





ASSETS




Current assets




Cash and cash equivalents

362,267

331,218

361,061

Restricted cash

126,291

99,673


Short-term investments

228,453

226,047

196,852

Accounts receivable, net

246,420

249,206

175,045

Prepaid expenses and other current assets

66,424

62,604

42,547

Deposit paid for acquisition of subsidiaries

1,174

Rental deposits

60,467

60,913

46,797

Other current assets

2,856

3,222

1,951

Total current assets

1,093,178

1,032,883

825,427

Restricted cash

99,778

99,673

Rental deposits, non-current

2,838

4,047

5,166

Equipment, net

76,090

79,042

67,699

Acquired intangible assets, net

31,732

35,025

20,918

Goodwill

459,720

459,113

427,252

Investment under equity method

17,788

20,534

58,474

Other long term assets

10,500

11,120

12,468

Total assets

1,791,624

1,741,437

1,417,404





LIABILITIES AND EQUITY




Current liabilities




Short-term bank loan

126,632

100,000

 Accounts payable

16,810

19,448

17,603

 Accrued expenses and other current liabilities

164,502

173,754

119,560

 Income taxes payable

33,807

35,463

292

Amount due to related parties

1,746

2,196

2,336

Deferred tax liabilities

33,585

33,550

23,867

Total current liabilities

377,082

364,411

163,658

Long-term loan

71,000

71,000

Long-term payable

13,703

13,106

Deferred tax liabilities, non-current

19,020

20,099

9,982

Total liabilities

480,805

468,616

173,640





Equity




Ordinary shares

32

32

34

Additional paid in capital

1,550,575

1,533,617

1,700,879

Subscription receivable

(203)

Accumulated deficit

(380,012)

(400,276)

(542,403)

Accumulated other comprehensive income

120,951

119,796

85,307

Total Focus Media equity

1,291,546

1,253,169

1,243,614

Non-controlling interests

19,273

19,652

150

 Total equity

1,310,819

1,272,821

1,243,764

Total liabilities and equity

1,791,624

1,741,437

1,417,404

 

Focus Media Holding Limited

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(U.S Dollars in thousands, except earnings per ADS and ADS data)



Three months ended


2012-03-31

2011-12-31

2011-03-31





Revenues




LCD display network

92,011

150,452

90,024

In-store network

13,005

17,559

10,405

Poster frame network

70,610

70,595

39,282

Movie theater network

18,902

21,658

8,434

Traditional outdoor billboard network

15,558

18,052

10,622

Total gross revenues

210,086

278,316

158,767

Less: Sales taxes

10,488

21,897

12,192

Total net revenue (note 1)

199,598

256,419

146,575





Cost of revenues




LCD display network

26,397

25,228

19,624

In-store network

5,607

3,258

5,701

Poster frame network

29,401

29,511

25,705

Movie theater network

6,377

6,980

6,189

Traditional outdoor billboard network

13,099

16,002

9,135

Total cost of revenues

80,881

80,979

66,354

Gross profit

118,717

175,440

80,221





Operating expenses




General and administrative

30,104

37,561

26,624

Selling and marketing

38,642

50,843

31,201

Other operating income, net

(3,523)

(8,171)

(4,705)

Total operating expenses

65,223

80,233

53,120





Operating profit

53,494

95,207

27,101

Interest income

4,478

4,637

2,361

Interest Expense

(1,119)

(584)

-

Income from continuing operations before income taxes and loss from equity method investee

56,853

99,260

29,462

Provision for income taxes

16,317

24,878

6,907

Loss from equity method investee

3,025

38,882

2,774

Net income from continuing operations

37,511

35,500

19,781





Net loss attributable to non-controlling interests

400

1,593

768

Net income attributable to Focus Media

37,911

37,093

20,549





Net income attributable to Focus Media per ADS




-basic

0.29

0.28

0.15

-diluted

0.28

0.27

0.15





ADS used in calculating basic income per ADS

129,292,048

132,238,128

135,594,008

ADS used in calculating diluted income per ADS

133,702,219

137,138,086

140,394,354









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


2012-03-31

2012-03-31

2012-03-31





Net income from continuing operations

37,511

35,500

19,781

Other comprehensive income, net of tax




Foreign currency translation adjustments

897

8,255

6,731

Share of post-acquisition movements in equity investee's other comprehensive income

277

256

245

Comprehensive income

38,685

44,011

26,757

Comprehensive loss attribute to non-controlling interests

(379)

(1,430)

(760)

Comprehensive income attribute to Focus Media

39,064

45,441

27,517

 

Note 1: Details of net revenues by segment are as follows (U.S. Dollars in thousands):



Three months ended


2012-03-31

2011-12-31

2011-03-31

Gross revenues




LCD display network

92,011

150,452

90,024

In-store network

13,005

17,559

10,405

Poster frame network

70,610

70,595

39,282

Movie theater network

18,902

21,658

8,434

Traditional outdoor billboard network

15,558

18,052

10,622

Total gross revenues

210,086

278,316

158,767

Less: Sales taxes




LCD display network

4,457

13,044

7,519

In-store network

337

1,504

893

Poster frame network

4,906

6,048

3,203

Movie theater network

489

875

477

Traditional outdoor billboard network

299

426

100

Total sales tax

10,488

21,897

12,192

Net revenues




LCD display network

87,554

137,408

82,505

In-store network

12,668

16,055

9,512

Poster frame network

65,704

64,547

36,079

Movie theater network

18,413

20,783

7,957

Traditional outdoor billboard network

15,259

17,626

10,522

Total net revenues

199,598

256,419

146,575

 

Focus Media Holding Limited

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASHFLOWS

(U.S. Dollars in thousands)



Three months ended


2012-03-31

2011-12-31

2011-03-31

Operating activities:




Net income

37,511

35,500

19,781

Adjustments to reconcile net income to net cash provided by operating activities:




Bad debt expenses 

(214)

5,755

2,000

Share-based compensation 

17,320

15,582

15,267

Depreciation

7,343

7,601

7,076

Amortization of acquired intangible assets

3,322

4,484

3,791

Loss from equity method investee

3,025

38,882

2,774

Change in fair value of contingent consideration liabilities for acquisition of subsidiaries

697

-

-

Others

416

(200)

35

Net changes in current assets and current liabilities, net of effects of acquisitions

(24,587)

21,189

(36,206)

Net cash provided by operating activities 

44,833

128,793

14,518





Investing activities:




Purchase of equipment and other long term assets 

(4,929)

(15,494)

(5,869)

Payment to acquire subsidiaries, net of cash acquired

(1,394)

(606)

(3,611)

Investment in equity method investee

(48,803)

Cash deposited as restricted cash

(26,514)

Proceeds received from the sale of short-term investments

179,845

166,643

55,054

Proceeds used in investment in short-term investments

(182,014)

(186,371)

(112,964)

Proceeds received from disposal of fixed assets

101

100

299

Disposal of subsidiaries

7,296

Net cash used in investing activities

(34,905)

(35,728)

(108,598)





Financing activities:




Proceeds received from bank loans

26,453

216,000

Cash used for repayment of short-term bank loans

(75,000)

Cash used for share repurchase

(5,966)

(144,269)

(3,000)

(Repayment to) capital injection  from non-controlling interests

(321)

(76)

Proceeds from issuance of ordinary shares, net of issuance costs

13

1,236

317

Net cash provided by/(used in) financing activities 

20,500

(2,354)

(2,759)

Effect of exchange rate changes 

621

4,532

3,424





Net increase (decrease) in cash and cash equivalents 

31,049

95,243

(93,415)

Cash and cash equivalents, beginning of period

331,218

435,322

454,476





Cash and cash equivalents, end of period

362,267

530,565

361,061





Supplemental disclosure of cash flow information:




Income taxes paid 

17,469

2,970

14,767

Interest paid

1,003

560





Supplemental disclosure of non-cash investing activity:




  Accrual for acquisition of subsidiaries

20,330

19,584

3,711

SOURCE Focus Media Holding Limited



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