2014

Focus Media Reports Fourth Quarter and Full Year 2012 Results

SHANGHAI, March 25, 2013 /PRNewswire/ -- Focus Media Holding Limited (Nasdaq: FMCN) today announced its unaudited financial results for the fourth quarter and full year ended December 31, 2012.

Highlights for Fourth Quarter 2012:

  • Total net revenue for the fourth quarter of 2012 was $250.2 million, of which
    • aggregate net revenue from the LCD display network, in-store network, poster frame network and movie theater network was $244.1 million, within the Company's guidance of between $237.0 million and $246.0 million.  This represented a slight decrease of 1% from $247.7 million for the third quarter of 2012 and an increase of 2% from $238.8 million for the fourth quarter of 2011; and
    • net revenue from the traditional outdoor billboard network for the fourth quarter of 2012 was $6.1 million, within the Company's guidance of between $6.0 million and $7.0 million
  • GAAP net income attributable to Focus Media for the fourth quarter of 2012 was $76.7 million, representing an increase of 19% from $64.6 million for the third quarter of 2012 and an increase of 107% from $37.1 million for the fourth quarter of 2011, and was adversely affected by the loss from equity method investee, VisionChina, of $38.9 million.
  • Non-GAAP net income attributable to Focus Media for the fourth quarter of 2012 was $95.1 million, within the Company's guidance of between $93 million and $98 million, slightly increasing from $94.6 million for the third quarter of 2012 and a slight decline of 1% from $96.0 million for the fourth quarter of 2011.  Please see the below sections on "Use of Non-GAAP Financial Measures" and "Reconciliation of GAAP to non-GAAP" for more information about the non-GAAP measures referred to within this announcement.
  • GAAP net income attributable to Focus Media per fully diluted ADS was $0.57, representing an increase of 19% from $0.48 per fully diluted ADS for the third quarter of 2012 and an increase of 111% from $0.27 per fully diluted ADS in the fourth quarter of 2011.
  • Non-GAAP net income attributable to Focus Media per fully diluted ADS was $0.71, substantially unchanged from $0.71 per fully diluted ADS for the third quarter of 2012 and an increase of 1% from $0.70 per fully diluted ADS for the fourth quarter of 2011. 

Highlights for Full Year 2012:

  • Total net revenue for full year 2012 was $927.5 million, an increase of 18% from $786.5 million for full year 2011, of which
    • aggregate net revenue from the LCD display network, in-store network, poster frame network and movie theater network was $895.5 million, representing an increase of 22% from $737.0 million for full year 2011 ; and
    • net revenue from the traditional outdoor billboard network was $32.0 million, representing a decrease of 35% from $49.5 million for full year 2011.
  • GAAP net income attributable to Focus Media for full year 2012 was $238.1 million, representing an increase of 46% from $162.7 million for full year 2011. 
  • Non-GAAP net income attributable to Focus Media for full year 2012 was $333.1 million, representing an increase of 17% from $284.1 million for full year 2011.  Please see the below sections on "Use of Non-GAAP Financial Measures" and "Reconciliation of GAAP to non-GAAP" for more information about the non-GAAP measures referred to within this announcement.
  • GAAP net income attributable to Focus Media per fully diluted ADS for full year 2012 was $1.79, representing an increase of 52% from $1.18 per fully diluted ADS for full year 2011.  
  • Non-GAAP net income attributable to Focus Media per fully diluted ADS for full year 2012 was $2.50, a 22% increase from $2.05 per fully diluted ADS for full year 2011.

Highlights for Balance Sheet and Cash Flow Results of Fourth Quarter and Full Year 2012:

  • Cash, cash equivalents, short-term investments and restricted cash were $1,029.8 million as of December 31, 2012, increasing by 14% from $901.1 million as of September 30, 2012.  Our short-term investments consist of longer term dated cash deposits that earn a higher interest rate as compared to cash and cash equivalents.
  • Bank loans were $200.0 million which were all long-term bank loans as of December 31, 2012 secured by onshore renminbi cash deposits, as compared to bank loans of $200.0 million inclusive of short-term bank loans of $100.0 million as of September 31, 2012, which was renewed and converted into long-term bank loans in the fourth quarter of 2012. Long-term bank loans of $100.0 million outstanding as of September 30, 2012, were also extended to 2018 in the fourth quarter of 2012.  The bank loan as of December 31, 2012 consisted of a $200.0 million term loan facility agreement entered into on November 21, 2012 with DBS Bank Ltd., Hong Kong Branch ("DBS") and was used to repay all of the Company's outstanding indebtedness under its previous credit facilities with DBS.
  • Net accounts receivable for the LCD display network, in-store network, poster frame network and movie theater network was $275.6 million as of December 31, 2012, a decrease of 3% from $284.1 million as of September 30, 2012.  Days sales outstanding was 100 days in the fourth quarter of 2012 versus 92 days for the third quarter of 2012.  Days sales outstanding was 97 days for full year 2012 versus 85 days for full year 2011.  As a supplementary cash collection metric, the actual cash collection from accounts receivables and prepayments from the advertisers was $281.7 million in the fourth quarter of 2012, as compared to $239.8 million in the fourth quarter of 2011.
  • Net cash inflow from operating activities in the fourth quarter of 2012 and full year of 2012 were $142.4 million and $358.3 million, respectively, representing an 11% increase from $128.8 million for the fourth quarter of 2011 and a 28% increase from $280.2 million for full year 2011, respectively.
  • Net cash inflow from operating activities for the fourth quarter of 2012, after deducting the purchase of equipment and subsidiaries was $137.6 million, an increase of 22% from $112.7 million for the fourth quarter of 2011.  Net cash inflow from operating activities for full year 2012, after deducting the purchase of equipment and subsidiaries was $335.7 million, representing an increase of 47% from $228.0 million for full year 2011.
  • Capital expenditures were $4.8 million and $19.6 million respectively for the fourth quarter and full year of 2012, mostly attributable to upgrading our LCD screens into interactive screens and network expansion in and into lower tier cities in China.

Jason Jiang, Chairman and Chief Executive Officer of Focus Media said, "In the fourth quarter of 2012, our operation's performance was in-line with our previous expectations as we continue to be affected by a slower overall advertising spending in China."

Kit Low, the Company's Chief Financial Officer added, "In the fourth quarter of 2012, the Company's aggregate net revenue year-on-year growth in our LCD display, poster frame business, in-store and movie theater network was 2%. GAAP net income attributable to Focus Media and Non-GAAP net income attributable to Focus Media for the fourth quarter of 2012 was $76.7 million and $95.1 million, respectively.  In the fourth quarter of 2012, the Company generated a net cash inflow from operating activities after deducting the purchases of equipment and subsidiaries of $137.6 million."

Fourth Quarter 2012 financial results

Advertising net revenue from the LCD display network was $127.5 million for the fourth quarter of 2012, representing a slight decrease of 1% from $128.4 million for the third quarter of 2012 and a decrease of 7% from $137.4 million for the fourth quarter of 2011.  The decrease in net revenue was due to a weaker brand advertising environment.

Advertising net revenue from the poster frame network was $85.7 million for the fourth quarter of 2012, representing an increase of 5% from $81.6 million for the third quarter of 2012 and an increase of 33% from $64.5 million for the fourth quarter of 2011, which was driven by the strength of promotional budget spending in the market.

Advertising net revenue from the in-store network was $11.1 million for the fourth quarter of 2012, representing a decrease of 23% from $14.5 million for the third quarter of 2012 and a decrease of 31% from $16.1 million for the fourth quarter of 2011.  The decrease was mostly attributable to less advertising spending from domestic dairy producers.

Advertising net revenue from the movie theater network was $19.8 million for the fourth quarter of 2012, representing a decrease of 15% from $23.2 million for the third quarter of 2012 due to seasonal factors and a decrease of 5% from $20.8 million for the fourth quarter of 2011.  The decrease in net revenue was mainly due to a weaker brand advertising environment.

Advertising net revenue from the traditional outdoor billboard network was $6.1 million for the fourth quarter of 2012, representing a decrease of 21% from $7.7 million for the third quarter of 2012 and a decrease of 56% from $13.9 million for the fourth quarter of 2011 due to combination of downsizing of the division and a weaker advertising environment.  Due to medium term advertising spending uncertainties and the continued view of the Company that the traditional outdoor billboard network is not a core business segment, the Company has decided to downsize this business segment by divesting four entities within the segment. Two of which have been divested prior to end of the third quarter of 2012 and the other two were divested in the fourth quarter of 2012. Consequently, $1.2 million of revenues of two divested entities for the fourth quarter of 2012, $4.8 million of revenues of four divested entities for the third quarter of 2012 and $3.8 million of revenues of four divested entities for the fourth quarter of 2011 have been reclassified into "Net loss from discontinued operations" in the consolidated statements of operations.  Other relevant items in the consolidated statements of operations were also reclassified accordingly to reflect the reclassification arising from the discontinued operations of the 4 entities.

Non-GAAP gross profit from the LCD display network for the fourth quarter of 2012 was $98.3 million, representing a decrease of 2% from $99.8 million for the third quarter of 2012 and a decrease of 13% from $113.6 million for the fourth quarter of 2011.  The decrease in non-GAAP gross profit was a result of quarter-on-quarter and year-on-year revenue declines while the cost of sales remained largely unchanged in the LCD display network

Non-GAAP gross profit from the poster frame network for the fourth quarter of 2012 was $56.9 million, representing an increase of 8% from $52.5 million for the third quarter of 2012, and an increase of 58% from $35.9 million for the fourth quarter of 2011.

Non-GAAP gross profit from the in-store network for the fourth quarter of 2012 was $5.8 million, representing a decrease of 36% from $9.1 million for the third quarter of 2012 and a decrease of 55% from $12.8 million in the fourth quarter of 2011 mainly due to the combination of a lower revenue and relatively unchanged cost of sales.

Non-GAAP gross profit from the movie theater network for the fourth quarter of 2012 was $10.9 million, representing a decrease of 25% from $14.5 million for the third quarter of 2012 and a decrease of 21% from $13.8 million for the fourth quarter of 2011 due to a lower revenue and a larger cost of sales as a result of network expansion.

Non-GAAP gross profit from the traditional outdoor billboard network for the fourth quarter of 2012 was $0.8 million, compared to $1.2 million loss for the third quarter of 2012 and a decrease of 62% from $2.1 million for the fourth quarter of 2011. 

Non-GAAP operating expense for the fourth quarter of 2012 was $57.9 million, substantially unchanged from $57.5 million for the third quarter of 2012.   It also represented a decrease of 7% from $62.2 million for the fourth quarter of 2011.

Net cash inflow from operating activities in the fourth quarter of 2012 and full year of 2012 were $142.4 million and $358.3 million, respectively, representing an 11% increase from $128.8 million for the fourth quarter of 2011 and a 28% increase from $280.2 million for full year 2011, respectively.

Net cash inflow from investing activities for the fourth quarter of 2012 was $53.3 million.  In the fourth quarter of 2012, the Company incurred capital expenditures of $4.8 million.  Meanwhile, the Company received net cash inflows from disposal of short-term investments after deducting the placement of restricted cash totaling $57.3 million during the quarter. Short-term investments are longer term dated cash deposits normally with maturities of between three and twelve months that earn higher interest rate as compared to cash and cash equivalents.  Restricted cash is deposited in bank accounts as security for bank borrowings.

Net cash used for financing activities for the fourth quarter of 2012 was $17.8 million, which consisted of a dividend paid by the Company declared in the third quarter of 2012.

Operating Data Summary

The Company is providing a breakdown of operating data as follows:

1) The approximate number of displays in the LCD display network was as follows:


As of December 31, 2012

As of September 30, 2012

LCD screens (note)

136,711

136,870

LCD 2.0 digital picture screens

35,615

35,535

Total for LCD display network

172,326

172,405

Note:  The decrease in the total number of LCD screens as of December 31, 2012 as compared to that as of September 30, 2012 was due to network optimization.  Of the total LCD screens of 136,711 as of December 31, 2012, 10,534 screens were operated through our regional distributors as compared to 9,589 screens as of September 30, 2012.

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


As of December 31, 2012

As of September 30, 2012

Frame 1.0 picture frames (note)

505,571

497,269

Frame 2.0 digital picture screens

36,341

35,892

Total

541,912

533,161

Note: The increase in the total number of Frame 1.0 picture frames as of December 31, 2012 as compared to that as of September 30, 2012 was due to organic network expansion.

3) The total number of displays installed in our in-store network was approximately 52,267 as of December 31, 2012, slightly decreasing from 53,239 as of September 30, 2012 due to network optimization.

4) The number of movie screens on which the Company had the right to lease advertising time as of December 31, 2012 was approximately 2,730, as compared to 2,470 as of September 30, 2012.  The increase was due to organic network expansion

Arrangements Regarding Announced Recurring Shareholder Payments

On January 10, 2012, the Company announced a policy starting from 2012 to issue a recurring dividend with payments expected to equal approximately 25% of the Company's annual non-GAAP net income of the preceding fiscal year and to reserve up to an additional 30% of the Company's annual non-GAAP net income of the preceding fiscal year (starting from 2012 earnings) that can be used, at the discretion of the board of directors, to increase the dividend payment or the size of our share purchase program in effect at that time (the "dividend policy").

The Company announced on November 27, 2012 that its board of directors had resolved to postpone approval of future cash dividends through December 31, 2012 due to ongoing considerations relating to the going private proposal.

Due to the signing on December 19, 2012 of the going private merger agreement, which prohibits the Company from paying any dividends or repurchasing any of its ordinary shares or ADS pending consummation of the merger, the Company's board of directors has resolved to terminate the dividend policy effective December 31, 2012.

Announcement of the Extraordinary General Meeting of Shareholders to Vote on the Going Private Transaction

The Company announced today that it has called an extraordinary general meeting of the shareholders to be held on April 29, 2013 to consider and vote on, among other things, the proposal to authorize and approve the previously announced agreement and plan of merger, dated December 19, 2012, among Giovanna Parent Limited, Giovanna Acquisition Limited and the Company, the plan of merger and the transactions contemplated thereby (including the merger). 

Foreign Currency Translation

Assets and liabilities are translated at the exchange rate as of December 31, 2012, which was $1 to RMB 6.2855.  Equity accounts are translated at historical exchange rates and revenues, expenses, gains and losses are translated using the average rate for the fourth quarter of 2012, which was $1 to RMB 6.2926.  Translation adjustments are reported as a component of comprehensive income.

USE OF NON-GAAP FINANCIAL MEASURES

In addition to Focus Media's consolidated financial results under GAAP, the Company also provides non-GAAP financial measures, including non-GAAP gross profit (cumulatively and by segment), non-GAAP operating expenses, non-GAAP operating profit (loss), non-GAAP net income and non-GAAP fully-diluted earnings per ADR, all excluding share-based compensation expenses, amortization of acquired intangible assets, loss from equity investment and goodwill impairment.  Management uses these non-GAAP financial measures to better assess operating performance of the Company.  The Company believes that these non-GAAP financial measures provide investors with another method for assessing Focus Media's operating results in a manner that is focused on the performance of its ongoing operations.  Readers are cautioned not to view non-GAAP results on a stand-alone basis or as a substitute for results under GAAP, or as being comparable to results reported or forecasted by other companies, and should refer to the reconciliation of GAAP results with non-GAAP results in the attached financial information.  The Company believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing the performance of Focus Media and when planning and forecasting for future periods.  The Company computes its non-GAAP financial measures using a consistent method from quarter to quarter, mostly excluding share-based compensation expenses, amortization of acquired intangible assets, loss from equity investment and goodwill impairment.  The accompanying tables have more details on the GAAP financial measures that are most directly comparable to non-GAAP financial measures and the related reconciliation between these financial measures.

 

Focus Media Holding Ltd.

Reconciliation of GAAP to non-GAAP

(U.S. Dollars in thousands, except percentages, share and per-share data)

(Unaudited)

 


Three months ended December 31, 2012


GAAP

(1)

(2)

(3)

(4)

Non-GAAP








Gross Profit (loss)







LCD display network

97,431

354

478


-

98,263

Poster frame network

56,776

-

74


-

56,850

In-store network

5,841

-



-

5,841

Movie theater network

10,925

-



-

10,925

Traditional outdoor billboard network

333

-

418


-

751

Total Gross Profit

171,306

354

970


-

172,630








General and administrative

32,968

(11,638)




21,330

Selling and marketing

51,973

(998)

(521)



50,454

Other operating  income, net

(13,897)





(13,897)

Total operating expense

71,044

(12,636)

(521)



57,887








Operating profit from continuing
   operations

100,262

12,990

1,491



114,743








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

103,506

12,990

1,491

1,526


119,513








Net profit from continuing
   operations

76,296

12,990

1,491

4,126


94,903

Net loss from discontinued
   operations

(232)


174


(375)

(433)








Net income attributable to Focus
   Media

76,672

12,990

1,665

4,126

(375)

95,078








Basic net income from continuing
   operations attributable to Focus
   Media per ADS

0.59





0.73

Diluted net income from continuing
   operations attributable to Focus
   Media per ADS

0.57





0.71








Basic net income from discontinued
   operations attributable to Focus
   Media per ADS

0.00





0.00

Diluted net income from discontinued
   operations attributable to Focus
   Media per ADS

0.00





0.00








Basic net income attributable to Focus
    Media per ADS

0.59





0.73

Diluted net income attributable to Focus
   Media per ADS

0.57





0.71

ADS used in calculating basic income
   per ADS

130,265,271





130,265,271

ADS used in calculating diluted income
   per ADS

134,529,688





134,529,688









(1). Share-based compensation.
(2). Amortization of acquired intangible assets.
(3). loss from equity investment, including equity method investee (VisionChina) and cost method investment
(4). Gain from disposal of previously acquired subsidiaries

 


Three months ended September 30, 2012


GAAP

(1)

(2)

(3)

(4)

Non-GAAP








Gross Profit (loss)







LCD display network

98,443

495

813

-

-

99,751

Poster frame network

52,341

-

129

-

-

52,470

In-store network

9,082

-

-

-

-

9,082

Movie theater network

14,471

-

-

-

-

14,471

Traditional outdoor billboard network

(1,708)

-

462

-

-

(1,246)

Total Gross Profit

172,629

495

1,404

-

-

174,528








General and administrative

36,132

(14,884)

-

-

-

21,248

Selling and marketing

53,123

(1,438)

(552)

-

-

51,133

Other operating  income, net

(14,890)

-

-

-

-

(14,890)

Total operating expense

74,365

(16,322)

(552)

-

-

57,491








Operating profit from continuing
   operations

98,264

16,817

1,956

-

-

117,037








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

102,346

16,817

1,956

-

-

121,119








Net profit from continuing
   operations

65,334

16,817

1,956

9,499

-

93,606

Net profit/ (loss) from discontinued
   operations

(1,008)

-

806

-

908

706








Net income attributable to Focus
   Media

64,590

16,817

2,762

9,499

908

94,576








Basic net income from continuing
   operations attributable to Focus
   Media per ADS

0.52





0.74

Diluted net income from continuing
   operations attributable to Focus
   Media per ADS

0.49





0.71








Basic net income from discontinued
   operations attributable to Focus
   Media per ADS

(0.01)





0.00

Diluted net income from discontinued
   operations attributable to Focus
   Media per ADS

(0.01)





0.00








Basic net income attributable to Focus
   Media per ADS

0.51





0.74

Diluted net income attributable to Focus
   Media per ADS

0.48





0.71

ADS used in calculating basic income
   per ADS

127,777,021





127,777,021

ADS used in calculating diluted income
   per ADS

133,518,344





133,518,344








 

(1). Share-based compensation.

(2). Amortization of acquired intangible assets.

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

(4). Goodwill impairment

 

                                                                                                                                                         


Three months ended December 31, 2011


GAAP

(1)

(2)

(3)

Non-GAAP







Gross Profit






LCD display network

112,179

286

1,100

-

113,565

Poster frame network

35,036

-

890

-

35,926

In-store network

12,797

-

-

-

12,797

Movie theater network

13,803

-

-

-

13,803

Traditional outdoor billboard network

1,591

-

459

-

2,050

Total Gross Profit

175,406

286

2,449

-

178,141







General and administrative

37,092

(14,267)

-

-

22,825

Selling and marketing

49,606

(1,029)

(1,055)

-

47,522

Other operating  income, net

(8,181)

-

-

-

(8,181)

Total operating expense

78,517

(15,296)

(1,055)

-

62,166







Operating profit from continuing
   operations

96,889

15,582

3,504

-

115,975







Profit before tax from continuing
   operations

100,941

15,582

3,504

-

120,027







Net profit from continuing
   operations

37,037

15,582

3,504

38,882

95,005

Net loss from discontinued
   operations

(1,538)


980


(558)







Net income attributable to Focus
   Media

37,093

15,582

4,484

38,882

96,041







Basic net income from continuing
   operations attributable to Focus
   Media per ADS

0.29




0.73

Diluted net income from continuing
   operations attributable to Focus
   Media per ADS

0.28




0.70







Basic net income from discontinued
   operations attributable to Focus
   Media per ADS

(0.01)




0.00

Diluted net income from discontinued
   operations attributable to Focus
   Media per ADS

(0.01)




0.00







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

132,073,143




132,073,143

ADS used in calculating diluted
   income per ADS

136,912,952




136,912,952







 

(1). Share-based compensation.

(2). Amortization of acquired intangible assets.

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

 

                                                                                                                                                         

 

Focus Media Holding Ltd.

Reconciliation of GAAP to non-GAAP

(U.S. Dollar in thousands, except share and per-share data)

(Unaudited)


Twelve months ended December 31, 2012


GAAP

(1)

(2)

(3)

(4)

Non-GAAP








Gross Profit (loss)







LCD display network

352,346

1,821

3,136



357,303

Poster frame network

183,873


596



184,469

In-store network

30,284





30,284

Movie theater network

43,994





43,994

Traditional outdoor billboard network

(2,592)


1,805



(787)

Total Gross Profit

607,905

1,821

5,537



615,263








General and administrative

136,704

(56,561)




80,143

Selling and marketing

194,095

(5,255)

(2,260)



186,580

Other operating  income, net

(38,588)





(38,588)

Total operating expense

292,211

(61,816)

(2,260)



228,135








Operating profit from continuing
   operations

315,694

63,637

7,797



387,128








Profit before tax from continuing
   operations

331,459

63,637

7,797

1,526


404,419

Net profit from continuing
   operations

237,001

63,637

7,797

20,087


328,522

Net profit/ (loss) from
   discontinued operations

(1,065)


3,005


533

2, 473

Net income attributable to Focus
   Media

238,078

63,637

10,802

20,087

533

333,137








Basic net income from continuing
   operations attributable to Focus
   Media per ADS

1.86





2.57

Diluted net income from continuing
   operations attributable to Focus
   Media per ADS

1.80





2.48








Basic net income from discontinued
   operations attributable to Focus
   Media per ADS                                                              

(0.01)





0.02

Diluted net income from discontinued
   operations attributable to Focus
   Media per ADS

(0.01)





0.02








Basic net income attributable to
   Focus Media per ADS

1.85





2.59

Diluted net income attributable to
   Focus Media per ADS

1.79





2.50








ADS used in calculating basic
   income per ADS

128,809,554





128,809,554

ADS used in calculating diluted
   income per ADS

133,250,339





133,250,339








 

(1). Share-based compensation.

(2). Amortization of acquired intangible assets.

(3). loss from equity investment, including equity method investee (VisionChina) and cost method investment

(4). Loss from disposal of previously acquired subsidiaries, of which gain from disposal of subsidiaries was $0.4 million and loss from impairment of goodwill was $0.9 million.

 

                                                                                                                                                         

 

Focus Media Holding Ltd.

Reconciliation of GAAP to non-GAAP

(U.S. Dollar in thousands, except percentages, share and per-share data)

(Unaudited)

 


Twelve months ended December 31, 2011


GAAP

(1)

(2)

(3)

Non- GAAP







Gross Profit






LCD display network

358,518

880

4,409

-

363,807

Poster frame network

75,079

-

4,175

-

79,254

In-store network

35,792

-

-

-

35,792

Movie theater network

25,082

-

43

-

25,125

Traditional outdoor billboard network

7,610

-

1,808

-

9,418

Total Gross Profit

502,081

880

10,435

-

513,396







General and administrative

126,518

(57,119)

-

-

69,399

Selling and marketing

146,392

(3,803)

(4,220)

-

138,369

Other operating (income), net

(16,147)

-

-

-

(16,147)

Total operating expense

256,763

(60,922)

(4,220)

-

191,621







Operating profit from continuing
   operations

245,318

61,802

14,655

-

321,775







Profit before tax from continuing
   operations

260,139

61,802

14,655

-

336,596







Net profit from continuing
   operations

161,790

61,802

14,655

43,633

281,880

Net profit from discontinued operations

(978)

-

1,343

-

365







Net income attributable to Focus
   Media

162,677

61,802

15,998

43,633

284,110







Basic net income from continuing
   operations per ADS

1.21




2.11

Diluted net income from continuing
   operations per ADS

1.18




2.04







Basic net income from discontinued
   operations per ADS

0.00




0.01

Diluted net income from discontinued
   operations per ADS

0.00




0.01







Basic net income attributable to Focus
   Media per ADS

1.21




2.12

Diluted net income attributable to
   Focus Media per ADS

1.18




2.05







ADS used in calculating basic income
   per ADS

134,241,550




134,241,550

ADS used in calculating diluted income
   per ADS

138,320,991




138,320,991







(1). Share-based compensation.

(2). Amortization of acquired intangible assets.

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

 

CONFERENCE CALL

1) The Company will host a conference call to discuss the fourth quarter and full year 2012 results at 9:00 p.m. U.S. Eastern Time on March 25, 2013 (6:00 p.m. U.S. Pacific Time on March 25, 2013 and 9:00 a.m. Beijing/Hong Kong Time on March 26, 2013). The dial-in details for the live conference call are set forth below:

International Toll Dial-In Number: + 65.6723.9381

Local Dial-In Number(s):
China, Domestic Mobile: 400.620.8038
China, Domestic: 800.819.0121
Hong Kong: +852.2475.0994
United States: +1.718.354.1231

International Toll Free Dial-in Number(s):
Hong Kong: +852.800.930.346
United States: +1.866.519.4004

Conference ID # 23817537

2) A replay of the call will be available from 0:00 a.m. March 26 - 8:59 a.m. April 2, 2013 (US Eastern Time). The dial-in details for the replay are set forth below:

International Toll Dial-In Number: +61.2.8199.0299

Local Dial-In Number(s):
Hong Kong: +852.3051.2780  
United States: +1.646.254.3697

International Toll Free Dial-in Number(s):
China 400: 400.120.0932
China 800: 800.870.0205
Hong Kong: +852.800.963.117
United States: +1.855.452.5696

Conference ID # 23817537

 Additionally, a live and archived web cast of this call will be available on the Focus Media web site at http://ir.focusmedia.cn

SAFE HARBOR: FORWARD-LOOKING STATEMENTS

This press release includes statements that may constitute forward-looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. Focus Media may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission on forms 20-F and 6-K., in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about Focus Media's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Potential risks and uncertainties include, but are not limited to, risks outlined in Focus Media's filings with the U.S. Securities and Exchange Commission, including its registration statements on Form F-1, F-3 and 20-F, in each case as amended. Focus Media does not undertake any obligation to update any forward-looking statement, except as required under applicable law. 

This release is not an offer of securities for sale in the United States.  Securities may not be offered or sold in the United States absent registration or an exemption from registration.  Any public offering of securities to be made in the United States will be made by means of a prospectus that may be obtained from the issuer or selling security holder and that will contain detailed information about the company and management, as well as financial statements.

ABOUT FOCUS MEDIA HOLDING LIMITED

Focus Media Holding Limited (Nasdaq: FMCN) operates China's largest lifestyle targeted interactive digital media network. The Company offers one of the most comprehensive targeted interactive digital media platforms aimed at Chinese consumers at various urban locations. The increasingly fragmented and mobile lifestyle of Chinese urban consumers has created the need for more efficient media means to capture consumer attention. Focus Media's mission is to build an increasingly comprehensive and measurable interactive urban media network that reaches consumers at various out-of-home locations. 

 


Focus Media Holding Limited

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(U.S Dollars in Thousands)




2012-12-31

2012-09-30

2011-12-31





ASSETS




Current assets




Cash and cash equivalents

674,133

491,729

331,218

Restricted cash

-

99,043

99,673

Short-term investments

115,125

211,238

226,047

Accounts receivable, net

282,977

294,102

249,206

Prepaid expenses and other current assets

83,048

71,616

62,604

Rental deposits

57,152

60,739

60,913

Held-for-sale assets-current

-

4,660

-

Other current assets

2,418

2,262

3,222

Total current assets

1,214,853

1,235,389

1,032,883

Restricted cash

240,554

99,043

99,673

Rental deposits, non-current

3,447

3,252

4,047

Equipment, net

66,073

66,044

79,042

Acquired intangible assets, net

3,326

4,776

35,025

Goodwill

439,384

439,201

459,113

Equity method investment

1,001

5,040


Held-for-sale assets-non-current

-

21,008

20,534

Other long term assets

7,248

14,642

11,120

Total assets

1,975,886

1,888,395

1,741,437





LIABILITIES AND EQUITY




Current liabilities




Short-term bank loan

-

100,000

100,000

 Accounts payable

14,810

16,828

19,448

 Accrued expenses and other current liabilities

179,441

188,569

173,754

 Income taxes payable

69,437

43,745

35,463

Amount due to related parties

577

1,554

2,196

Held-for-sale liabilities-current

-

9,468

-

Deferred tax liabilities

31,464

29,339

33,550

Total current liabilities

295,729

389,503

364,411

Long-term loan

200,000

100,000

71,000

Acquisition purchase price payable

-

-

13,106

Held-for-sale liabilities-non-current

-

6,159

-

Deferred tax liabilities, non-current

12,201

13,190

20,099

Total liabilities

507,930

508,852

468,616





Equity




Ordinary shares

33

32

32

Additional paid in capital

1,561,435

1,548,446

1,533,617

Subscription receivable

-

-

-

Accumulated deficit

(214,554)

(291,226)

(400,276)

Accumulated other comprehensive income

123,015

113,318

119,796

Total Focus Media equity

1,469,929

1,370,570

1,253,169

Noncontrolling interests

(1,973)

8,973

19,652

 Total equity

1,467,956

1,379,543

1,272,821

Total liabilities and equity

1,975,886

1,888,395

1,741,437

 

Focus Media Holding Limited

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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



Three months ended

Twelve Months ended


2012-12-31

2012-9-30

2011-12-31

2012-12-31

2011-12-31







Revenues






LCD display network

134,372

135,777

150,452

491,290

486,550

In-store network

11,311

14,879

17,559

53,149

61,669

Poster frame network

89,679

86,056

70,595

319,522

202,548

Movie theater network

20,358

23,753

21,658

78,591

53,330

Traditional outdoor
   billboard network

6,141

7,751

14,242

32,490

50,358

Total gross revenues

261,861

268,216

274,506

975,042

854,455

Less: Sales taxes

11,672

12,740

21,807

47,541

67,923

Total net revenue (note 1)

250,189

255,476

252,699

927,501

786,532







Cost of revenues






LCD display network

30,025

29,976

25,229

113,135

85,847

In-store network

5,254

5,384

3,258

21,504

20,582

Poster frame network

28,903

29,268

29,511

117,685

110,370

Movie theater network

8,924

8,762

6,980

32,661

25,753

Traditional outdoor
   billboard network

5,777

9,457

12,315

34,611

41,899

Total cost of revenues

78,883

82,847

77,293

319,596

284,451

Gross profit

171,306

172,629

175,406

607,905

502,081







Operating expenses






General and administrative

32,968

36,132

37,092

136,704

126,518

Selling and marketing

51,973

53,123

49,606

194,095

146,392

Other operating (income)
   expenses, net

(13,897)

(14,890)

(8,181)

(38,588)

(16,147)

Total operating expenses

71,044

74,365

78,517

292,211

256,763







Operating profit

100,262

98,264

96,889

315,694

245,318

Interest income

6,181

5,366

4,636

22,358

15,538

Interest expense

(1,411)

(1,284)

(584)

(5,067)

(717)

Loss from cost method
   equity investment

(1,526)

-

-

(1,526)

-

Income from continuing
   operations before
   income taxes

103,506

102,346

100,941

331,459

260,139

Provision for income taxes

24,610

27,513

25,022

75,897

54,716

Loss from equity method
   investee

2,600

9,499

38,882

18,561

43,633

Net income from
   continuing operations

76,296

65,334

37,037

237,001

161,790







Net loss from discontinued
   operations, net of tax

(232)

(1,008)

(1,538)

(1,065)

(978)

Net income

76,064

64,326

35,499

235,936

160,812







Less: Net loss attributable
   to noncontrolling
   interests

(608)

(264)

(1,594)

(2,142)

(1,865)

Net income attributable
   to Focus Media

76,672

64,590

37,093

238,078

162,677







Net income from continuing 
operations per ADS






- basic

0.59

0.52

0.29

1.86

1.21

- diluted

0.57

0.49

0.28

1.80

1.18







Net income from discontinued
operations per ADS






- basic

0.00

(0.01)

(0.01)

(0.01)

0.00

- diluted

0.00

(0.01)

(0.01)

(0.01)

0.00







Net income attributable to
Focus Media per ADS






- basic

0.59

0.51

0.28

1.85

1.21

- diluted

0.57

0.48

0.27

1.79

1.18







ADS used in calculating
   basic income per ADS

130,265,271

127,777,021

132,073,143

128,809,554

134,241,550

ADS used in calculating
   diluted income per ADS

134,529,688

133,518,344

136,912,952

133,250,339

138,320,991







 

Focus Media Holding Limited

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

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








Three months ended

Twelve months ended


2012-12-31

2012-09-30

2011-12-31

2012-12-31

2011-12-31

Net income

76,064

64,326

35,499

235,936

160,812

Other comprehensive
   income, net of tax






Foreign currency
   translation adjustments

9,687

(2,964)

8,256

2,638

40,190

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

76

(43)

256

552

1,639

Comprehensive income

85,827

61,319

44,011

239,126

202,641

Comprehensive loss
   attributable to
   non-controlling interests

(542)

(286)

(1,429)

(2,171)

(1,491)

Comprehensive income
   attributable to Focus
   Media

86,369

61,605

45,440

241,297

204,132

 

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


Three months ended

Twelve months ended


2012-12-31

2012-9-30

2011-12-31

2012-12-31

2011-12-31

Gross revenues






LCD display network

134,372

135,777

150,452

491,290

486,550

In-store network

11,311

14,879

17,559

53,149

61,669

Poster frame network

89,679

86,056

70,595

319,522

202,548

Movie theater network

20,358

23,753

21,658

78,591

53,330

Traditional outdoor
   billboard network

6,141

7,751

14,242

32,490

50,358

Total gross revenues

261,861

268,216

274,506

975,042

854,455

Less: Sales taxes






LCD display network

6,916

7,358

13,044

25,809

42,185

In-store network

216

413

1,504

1,361

5,295

Poster frame network

4,000

4,447

6,048

17,964

17,099

Movie theater network

509

520

875

1,936

2,495

Traditional outdoor
   billboard network

31

2

336

471

849

Total sales tax

11,672

12,740

21,807

47,541

67,923

Net revenues






LCD display network

127,456

128,419

137,408

465,481

444,365

In-store network

11,095

14,466

16,055

51,788

56,374

Poster frame network

85,679

81,609

64,547

301,558

185,449

Movie theater network

19,849

23,233

20,783

76,655

50,835

Traditional outdoor
   billboard network

6,110

7,749

13,906

32,019

49,509

Total net revenues

250,189

255,476

252,699

927,501

786,532

 

 

Focus Media Holding Limited

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASHFLOWS

(U.S. Dollars in thousands)


   Three months ended   

   Twelve months ended   


2012-12-31

2011-12-31

2012-12-31

2011-12-31

Operating activities:





Net income

76,064

35,499

235,936

160,812

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





Bad debt expenses 

4,182

5,755

13,341

16,013

Share-based compensation 

12,990

15,582

63,637

61,802

Depreciation

7,820

7,601

30,741

28,787

Amortization of acquired intangible assets

1,665

4,484

10,802

15,998

Loss from cost method investee

1,526

-

1,526

-

Loss from equity method investee

2,600

38,882

18,561

43,632

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

-

-

1,179

-

Others

(1,523)

(199)

621

1,910

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

37,121

21,189

(18,094)

(48,796)

Net cash provided by operating activities 

142,445

128,793

358,250

280,158






Investing activities:





Purchase of equipment and other long term assets 

(4,807)

(15,494)

(19,645)

(38,918)

Payment paid to acquire subsidiaries, net of cash
   acquired

-

(606)

(2,929)

(13,228)

Investment in equity method investee

-

-

-

(61,003)

Cash deposited as restricted cash

(40,719)

(199,346)

(67,232)

(199,346)

Cash received from the release of restricted cash                                                                                                   



26,366


Proceeds received from the sale of short-term
   investments

114,916

166,643

470,977

1,044,680

Proceeds used in investment in short-term
   investments

(16,937)

(186,371)

(359,595)

(1,124,034)

Proceeds received from disposal of fixed assets

69

100

409

672

Proceeds from disposal of subsidiaries

1,392

-

2,519

7,296

Cash of disposed entities

(596)

-

(2,378)

-

Net cash provided by/(used in) investing
   activities

53,318

(235,074)

48,492

(383,881)






Financing activities:





Proceeds from short-term loan

-

145,000

34,794

175,000

Repayment of short-term loan

(100,000)

(75,000)

(134,017)

(75,000)

Proceeds from long-term loan

200,000

71,000

229,000

71,000

Repayment from long-term loan

(100,000)

-

(100,000)

-

Cash used for share repurchase

-

(144,269)

(41,445)

(213,375)

Dividend payout

(17,846)

-

(53,148)

-

(Repayment to) capital injection  from noncontrolling
   interests

-

(321)

-

(397)

Proceeds from issuance of ordinary shares, net of
   issuance costs

-

1,236

34

3,063

Net cash provided by/(used in) financing activities 

(17,846)

(2,354)

(64,782)

(39,709)

Effect of exchange rate changes 

3,504

4,531

955

20,174






Net increase in cash and cash equivalents 

181,421

(104,104)

342,915

(123,258)

Cash and cash equivalents, beginning of period

491,729

435,322

331,218

454,476

Add: Cash and cash equivalents in held-for-sale
   assets, beginning of period

983

-

-

-






Cash and cash equivalents, end of period

674,133

331,218

674,133

331,218






Supplemental disclosure of cash flow information:





Income taxes paid 

2,684

2,970

39,791

27,582

Interest paid

1,487

560

4,885

665






Supplemental disclosure of non-cash investing
activity:





  Accrual for acquisition of subsidiaries

671

19,584

671

19,584







 

SOURCE Focus Media Holding Limited



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