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SINA Reports First Quarter 2013 Financial Results

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SHANGHAI, May 16, 2013 /PRNewswire/ -- SINA Corporation (NASDAQ GS: SINA), a leading online media company serving China and the global Chinese communities, today announced its unaudited financial results for the first quarter ended March 31, 2013.

First Quarter 2013 Highlights

  • Net revenues increased 19% year over year to $126.0 million.  Non-GAAP net revenues  increased 19% year over year to $121.3 million, exceeding the Company's guidance between $115.0 million and $119.0 million.
  • Advertising revenues grew 20% year over year to $94.3 million, within the Company's guidance between $94.0 million and $96.0 million.
  • Non-advertising revenues increased 14% year over year to $31.7 million.  Non-GAAP non-advertising revenues increased 17% year over year to $27.0 million, exceeding the Company's guidance between $21.0 million and $23.0 million
  • Non-GAAP net income attributable to SINA was $1.5 million, or $0.02 non-GAAP diluted net income per share attributable to SINA. 

"As we start 2013, we are making good progress in transitioning from a PC-centric to a mobile-centric Internet company with new product launches and improved monetization," said Charles Chao, Chairman and CEO of SINA.  "In April, we formed a strategic alliance with Alibaba Group to catapult us into social commerce.  By partnering with Alibaba, Weibo is well positioned to play a key role in the future of e-commerce, particularly in mobile commerce as we explore ways for our users to search, share and buy the goods and services of the millions of merchants on Taobao and Tmall."

First Quarter 2013 Financial Results

For the first quarter of 2013, SINA reported net revenues of $126.0 million, compared to $106.2 million for the same period last year.  Non-GAAP net revenues for the first quarter of 2013 totaled $121.3 million, compared to $101.5 million for the same period last year. 

Online advertising revenues for the first quarter of 2013 were $94.3 million, compared to $78.5 million for the same period last year.  Non-advertising revenues for the first quarter of 2013 totaled $31.7 million, compared to $27.7 million for the same period last year.  Mobile value-added services ("MVAS") revenues for the first quarter of 2013 decreased 17% year over year to $15.9 million, while the rest of non-GAAP non-advertising revenues grew 180% year over year to $11.1 million.  The year over year growth of non-advertising revenues came primarily from Weibo value added services ("Weibo VAS"), which included revenue share from web games and membership fees on Weibo.  

Gross margin for the first quarter of 2013 increased to 51% from 46% for the same period last year.  Advertising gross margin for the first quarter of 2013 increased to 49% from 44% for the same period last year, due to advertising revenues growing faster than advertising cost of revenues.  Non-advertising revenue gross margin for the first quarter of 2013 increased to 57% from 53% for the same period last year, primarily due to the increase in proportion of higher margin Weibo VAS.

Operating expenses for the first quarter of 2013 totaled $74.5 million, compared to $67.2 million for the same period last year.  Non-GAAP operating expenses for the first quarter of 2013 were $69.8 million, compared to $64.1 million for the same period last year. The increase in non-GAAP operating expenses was primarily due to higher personnel costs, professional services and bad debt expenses, which were partially offset by lower marketing expenditures.

Loss from operations for the first quarter of 2013 was $9.9 million, compared to $18.1 million for the same period last year.  Non-GAAP loss from operations for the first quarter of 2013 was $9.3 million, compared to $18.9 million for the same period last year. 

Non-operating loss for the first quarter of 2013 was $4.5 million, compared to $2.7 million income for the same period last year.  As a result of E-House's issuing new shares to its management at $3.52 per share on March 25, 2013, SINA incurred a non-cash $10.2 million loss on the dilution of equity interest in E-House from 25% to 22%.  Non-operating loss in the first quarter of 2013 also included $1.5 million, or $4.8 million on a non-GAAP basis, in earnings from equity investments, which were accounted for under the equity-method accounting and reported on a one-quarter lag basis.

Net loss attributable to SINA for the first quarter of 2013 was $13.2 million, compared to $13.7 million for the same period last year.  Diluted net loss per share attributable to SINA for the first quarter of 2013 was $0.20, compared to $ 0.21 for the same period last year.  Non-GAAP net income attributable to SINA for the first quarter of 2013 was $1.5 million, compared to net loss of $14.0 million for the same period last year.  Non-GAAP diluted net income per share attributable to SINA for the first quarter of 2013 was $0.02, compared to net loss per share of $0.21 for the same period last year.

As of March 31, 2013, SINA's cash, cash equivalents and short-term investments totaled $681.9 million, compared to $713.6 million as of December 31, 2012.  For the first quarter of 2013, cash used in operating activities was $5.9 million, capital expenditures totaled $25.4 million and depreciation expenses amounted to $8.1 million.

Business Outlook

SINA estimates that its non-GAAP net revenues for the second quarter of 2013 will be between $143 million and $147 million, including advertising revenues to be between $117 million and $119 million, and non-GAAP non-advertising revenues to be between $26 million and $28 million.  Non-GAAP net revenues and non-GAAP non-advertising revenues exclude the recognition of $4.7 million in deferred license revenues related to SINA's equity investment in E-House/CRIC.

Non-GAAP Measures

This release contains the following non-GAAP financial measures: non-GAAP net revenues, non-GAAP non-advertising revenues, non-GAAP advertising gross margin, non-GAAP gross profit, non-GAAP operating expenses, non-GAAP income/(loss) from operations, non-GAAP equity earning/(loss) from equity investments, non-GAAP net income/(loss) attributable to SINA and non-GAAP diluted net income/(loss) per share attributable to SINA.  These non-GAAP financial measures should be considered in addition to, not as a substitute for, measures of the Company's financial performance prepared in accordance with U.S. GAAP.  The Company's non-GAAP financial measures may be defined differently than similar terms used by other companies.  Accordingly, care should be exercised in understanding how the Company defines its non-GAAP financial measures.  Reconciliations of the Company's non-GAAP measures to the nearest GAAP measures are set forth in the section below titled "Unaudited Reconciliation of Non-GAAP to GAAP Results."

The Company's non-GAAP financial measures exclude certain items, including share-based compensation, amortization of intangible assets, recognition of deferred revenue in relation to the CRIC Transaction and gain/loss resulting from the disposal, purchase or impairment of a business, investment or non-controlling interest in a subsidiary.  The Company's management uses these non-GAAP financial measures in their financial and operating decision-making, because management believes these measures reflect the Company's ongoing business operations in a manner that allows more meaningful period-to-period comparisons.  The Company believes that these non-GAAP financial measures provide useful information to investors and others in the following ways: (i) in comparing the Company's current financial results with the Company's past financial results in a consistent manner, and (ii) in understanding and evaluating the Company's current operating performance and future prospects in the same manner as management does, if they so choose.  The Company further believes the non-GAAP financial measures provide useful information to both management and investors by excluding certain expenses, gains/losses and other items (i) that are not expected to result in future cash payments or (ii) that are non-recurring in nature or may not be indicative of the Company's core operating results and business outlook.

Use of non-GAAP financial measures has limitations.  The Company's non-GAAP financial measures do not include all income and expense items that affect the Company's operations.  They may not be comparable to non-GAAP financial measures used by other companies.  Management compensates for these limitations by also considering the Company's financial results prepared in accordance with U.S. GAAP.

Conference Call

SINA will host a conference call at 9 p.m. Eastern Daylight Time on May 16, 2013 (or 9 a.m. Beijing Time on May 17, 2013) to present an overview of the Company's financial performance and business operations.  A live webcast of the call will be available through the Company's corporate website at http://corp.sina.com.  The conference call can be accessed as follows:

US:

+1 845 507 1607

Hong Kong:

+852 2810 7648

Passcode for all regions:

64835151

A replay of the conference call will be available through midnight Eastern Daylight Time May 23, 2013.  The dial-in number is +61 2 8199 0299.  The passcode for the replay is 64835151.

About SINA

SINA is an online media company serving China and the global Chinese communities.  Our digital media network of SINA.com (portal), SINA.cn (mobile portal) and Weibo.com (social media) enable Internet users to access professional media and user generated content in multi-media formats from the web and mobile devices and share their interests with friends and acquaintances.

SINA.com offers distinct and targeted professional content on each of its region specific websites and a range of complementary offerings. SINA.cn provides information and entertainment content from SINA portal customized for mobile (WAP) users.  Based on an open platform architecture to host organically developed and third-party applications, Weibo.com is a form of social media, featuring microblogging services and social networking services that allow users to connect and share information anywhere, anytime and with anyone on the platform.

Through these properties and other product lines and businesses, SINA offers an array of online media and social networking services to its users to create a rich canvas for businesses and brand advertisers to connect and engage with their targeted audiences.  SINA generates the majority of its revenues from online advertising, MVAS and fee-based services.

Safe Harbor Statement

This press release contains forward-looking statements that relate to, among other things, SINA's expected financial performance and SINA's strategic and operational plans (as described, without limitation, in the "Business Outlook" section and in quotations from management in this press release).  SINA may also make forward-looking statements in the Company's periodic reports to the U.S. Securities and Exchange Commission, 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.  SINA assumes no obligation to update the forward-looking statements in this press release and elsewhere.  Statements that are not historical facts, including statements about the Company's beliefs and expectations, are forward-looking statements.  Forward-looking statements involve inherent risks and uncertainties.  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:  SINA's limited operating history in certain new businesses; the global financial and credit market crisis and its impact on the Chinese economy; the uncertain regulatory landscape in China; fluctuations in the Company's quarterly operating results; the Company's reliance on online advertising sales and MVAS for a majority of its revenues; failure to successfully develop, introduce, drive adoption of or monetize new features and products, including Weibo.com and MVAS products; the Company's reliance on mobile operators in China to provide MVAS and changes in mobile operators' policies for MVAS in China; failure to successfully integrate acquired businesses; risks associated with the Company's investments, including equity pick-up and impairment; and failure to compete successfully against new entrants and established industry competitors.  Further information regarding these and other risks is included in SINA's annual report on Form 20-F for the year ended December 31, 2012 and other filings with the Securities and Exchange Commission.

Contact:

Investor Relations
SINA Corporation
Phone: 8610-82628888 x 3112
Email: ir@staff.sina.com.cn

 

SINA CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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








Three months ended


March 31,


December 31,


2013


2012


2012

Net revenues:






    Advertising

$                 94,289


$                    78,542


$               110,666

    Non-advertising

31,684


27,678


28,460


125,973


106,220


139,126

Cost of revenues:






    Advertising  (a)

47,810


44,084


48,758

    Non-advertising

13,547


13,027


11,003


61,357


57,111


59,761

Gross profit

64,616


49,109


79,365







Operating expenses:






    Sales and marketing (a)

30,024


34,744


34,688

    Product development (a)

30,801


25,023


28,508

    General and administrative (a)

13,629


7,321


10,580

    Amortization of intangibles

12


108


12


74,466


67,196


73,788

Income/(loss) from operations

(9,850)


(18,087)


5,577







Non-operating income/(loss):






   Interest and other income, net

4,785


3,531


4,097

   Earning/(loss) from equity investments, net

1,526


(3,921)


(4,377)

   Gain/(loss) on sale of and impairment on investments, net

(10,852)


3,061


(1,770)


(4,541)


2,671


(2,050)







Income/(loss) before income taxes

(14,391)


(15,416)


3,527

Income tax credit/(provision)

(185)


1,274


(1,379)







Net income/(loss)

(14,576)


(14,142)


2,148

   Less: Net loss attributable to noncontrolling interest

(1,405)


(402)


(207)







Net income/(loss) attributable to SINA

$               (13,171)


$                  (13,740)


$                    2,355













Basic net income/(loss) per share attributable to SINA

$                    (0.20)


$                       (0.21)


$                      0.04

Diluted net income/(loss) per share attributable to SINA

$                    (0.20)


$                       (0.21)


$                      0.03







Shares used in computing basic






   net income/(loss) per share attributable to SINA

66,687


66,185


66,585

Shares used in computing diluted






   net income/(loss) per share attributable to SINA

66,687


66,185


66,930













(a) Stock-based compensation in each category:






Cost of revenues - advertising

$                      568


$                         807


$                       731

Sales and marketing

790


766


1,022

Product development

791


1,067


830

General and administrative

3,118


1,133


2,953

 

SINA CORPORATION

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(U.S. Dollars in thousands)











March 31,



December 31,




2013



2012


Assets


Current assets:














Cash and cash equivalents


$                174,599



$                199,826


Short-term investments


507,332



513,772


Accounts receivable, net


134,160



135,251


Prepaid expenses and other current assets


40,966



36,498


      Total current assets


857,057



885,347








Property and equipment, net


73,479



76,640

Goodwill and intangible assets, net


15,828



15,840

Equity investments, net


454,382



466,875

Other assets


51,351



38,204

Total assets


$             1,452,097



$             1,482,906









Liabilities and Shareholders' Equity


Current liabilities:







Accounts payable


$                     1,473



$                     7,994


Accrued liabilities


159,360



168,677


Deferred revenues


38,847



36,892


Income taxes payable


13,538



13,466


     Total current liabilities


213,218



227,029








Long-term deferred revenue


103,098



107,784

Other long-term liabilities


2,225



2,220


     Total liabilities


318,541



337,033








Shareholders' equity







SINA shareholders' equity


1,125,967



1,136,670


Non-controlling interest


7,589



9,203


     Total shareholders' equity 


1,133,556



1,145,873








Total liabilities and shareholders' equity


$             1,452,097



$             1,482,906

 

SINA CORPORATION

UNAUDITED ADDITIONAL INFORMATION

(U.S. Dollars in thousands)










Three months ended



March 31,


December 31,



2013


2012


2012








Net revenues







Advertising

$            94,289


$           78,542


$            110,666


MVAS

15,863


19,018


13,243


Others

15,821


8,660


15,217



$          125,973


$        106,220


$            139,126








Cost of revenues







Advertising

$            47,810


$           44,084


$              48,758


MVAS

11,026


11,677


7,218


Others

2,521


1,350


3,785



$            61,357


$           57,111


$              59,761

 

 

 

SINA CORPORATION

UNAUDITED RECONCILIATION OF NON-GAAP TO GAAP RESULTS

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






































Three months ended


March 31, 2013


March 31, 2012


December 31, 2012






Non-GAAP






Non-GAAP






Non-GAAP


Actual


Adjustments


Results


Actual


Adjustments


Results


Actual


Adjustments


Results



















Advertising revenues

$      94,289




$      94,289


$        78,542




$      78,542


$    110,666




$    110,666

Non-advertising revenues

31,684


(4,686)

 (c) 

26,998


27,678


(4,686)

 (c) 

22,992


28,460


(4,686)

 (c) 

23,774

Net revenues

$    125,973


$              (4,686)


$    121,287


$      106,220


$              (4,686)


$    101,534


$    139,126


$              (4,686)


$    134,440






















568

 (a) 





807

 (a) 





731

 (a) 





(4,686)

 (c) 





(4,686)

 (c) 





(4,686)

 (c) 


Gross profit

$      64,616


$              (4,118)


$      60,498


$        49,109


$              (3,879)


$      45,230


$      79,365


$              (3,955)


$      75,410








































(4,699)

 (a) 





(2,966)

 (a) 





(4,805)

 (a) 





(12)

 (b) 





(108)

 (b) 





(12)

 (b) 


Operating expenses

$      74,466


$              (4,711)


$      69,755


$        67,196


$              (3,074)


$      64,122


$      73,788


$              (4,817)


$      68,971








































5,267

 (a) 





3,773

 (a) 





5,536

 (a) 





12

 (b) 





108

 (b) 





12

 (b) 





(4,686)

 (c) 





(4,686)

 (c) 





(4,686)

 (c) 


Income/(loss) from operations

$       (9,850)


$                   593


$       (9,257)


$      (18,087)


$                 (805)


$    (18,892)


$        5,577


$                   862


$        6,439






















5,267

 (a) 





3,773

 (a) 





5,536

 (a) 





12

 (b) 





108

 (b) 





12

 (b) 





(4,686)

 (c) 





(4,686)

 (c) 





(4,686)

 (c) 





3,275

 (d) 





3,578

 (d) 





4,002

 (d) 





10,852

 (e) 





(3,061)

 (e) 





1,770

 (e) 


Net income/(loss) attributable to SINA

$    (13,171)


$             14,720


$        1,549


$      (13,740)


$                 (288)


$    (14,028)


$        2,355


$               6,634


$        8,989





































Diluted net income/(loss) per share attributable to SINA

$         (0.20)




$           0.02


$           (0.21)




$         (0.21)


$           0.03




$           0.13

Shares used in computing diluted


















   net income/(loss) per share attributable to SINA

66,687


268

 (f) 

66,955


66,185


-


66,185


66,930


-


66,930





































Gross margin - advertising

49%


1%


50%


44%


1%


45%


56%


1%


57%



















(a)  To adjust stock-based compensation related to employee incentives.
(b)  To adjust  amortization of intangible assets.
(c)  To adjust the recognition of deferred revenue mostly related to the license agreements resulting from the CRIC Transaction.
(d)  To adjust share of equity investments' GAAP to Non-GAAP reconciling items, net of share of amortization of intangibles not on their books.
(e)  To adjust gain/(loss) on sale of equity investment, (loss) on deemed disposal and (impairment) on investments, net
(f)  To adjust the number of shares used in computing diluted net income per share from diluted net loss per share.



















UNAUDITED RECONCILIATION OF SINA'S SHARE OF EQUITY INVESTMENTS' GAAP TO NON-GAAP RESULTS*




















Three months ended


March 31, 2013


March 31, 2012


December 31, 2012


Actual


Adjustments


Non-GAAP Results


Actual


Adjustments


Non-GAAP Results


Actual


Adjustments


Non-GAAP Results



















    To adjust stock-based compensation



$               1,632






$               1,154






$               2,274



    To adjust amortization expenses of intangible 


















       assets resulting from business acquisitions



1,202






1,688






1,287



    Earning/(loss) from equity investments, net

$        1,967


$               2,834


$        4,801


$         (3,185)


$               2,842


$          (343)


$       (3,936)


$               3,561


$          (375)

    Share of amortization of equity investments' 


















       intangibles not on their books

$          (441)


$                  441


$               -


$            (736)


$                  736


$                -


$          (441)


$                  441


$                -


$        1,526


$               3,275


$        4,801


$         (3,921)


$               3,578


$          (343)


$       (4,377)


$               4,002


$          (375)



















* Earning/(loss) from equity investments is recorded one quarter in arrears.

SOURCE SINA Corporation



RELATED LINKS
http://www.sina.com

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