SINA Reports Second Quarter 2013 Financial Results

SHANGHAI, Aug. 12, 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 second quarter ended June 30, 2013.

Second Quarter 2013 Highlights

  • Net revenues increased 20% year over year to $157.5 million.  Non-GAAP net revenues  increased 20% year over year to $152.8 million, exceeding the Company's guidance between $143.0 million and $147.0 million.
  • Advertising revenues grew 17% year over year to $120.6 million, exceeding the Company's guidance between $117.0 million and $119.0 million.
  • Non-advertising revenues increased 30% year over year to $36.9 million.  Non-GAAP non-advertising revenues increased 35% year over year to $32.2 million, exceeding the Company's guidance between $26.0 million and $28.0 million
  • Net loss attributable to SINA, which included a one-off charge of $27.1 million in connection with the investment from the Alibaba Group ("Alibaba") in Weibo Corporation ("Weibo"), was $11.5 million, or $0.17 diluted net loss per share attributable to SINA.  Non-GAAP net income attributable to SINA grew 281% year over year to $14.2 million, or $0.21 non-GAAP diluted net income per share attributable to SINA.

"I'm pleased with SINA's performance in the second quarter." said Charles Chao, Chairman and CEO of SINA.  "Although the macro-economic conditions in China remain uncertain, our strategy to diversify SINA's revenue stream to beyond big-brand advertisers and to leverage Weibo's continued traffic growth to develop social and mobile advertising as well as value-added services is placing SINA in a good position for more profitable revenue growth while making heavy investments for the future."

Second Quarter 2013 Financial Results

For the second quarter of 2013, SINA reported net revenues of $157.5 million, compared to $131.6 million for the same period last year.  Non-GAAP net revenues for the second quarter of 2013 totaled $152.8 million, compared to $126.9 million for the same period last year. 

Online advertising revenues for the second quarter of 2013 were $120.6 million, compared to $103.1 million for the same period last year.  Weibo advertising revenues for the second quarter of 2013 grew 209% year over year to $30.0 million.  Non-GAAP non-advertising revenues for the second quarter of 2013 totaled $32.2 million, compared to $23.8 million for the same period last year.  Mobile Value-Added Services ("MVAS") revenues for the second quarter of 2013 increased 13% year over year to $19.9 million, which included $4.3 million from one-off revenues. Weibo Value-Added Services ("Weibo VAS") revenues, which include revenue share from web games and Weibo membership fees, grew 186% to $7.7 million

Gross margin for the second quarter of 2013 was 54% compared to 53% for the same period last year.  Cost of sales included $3.9 million in stock-based compensation expense related to the Alibaba transaction (see Other section below for further information).  Non-GAAP advertising gross margin increased to 57% from 54% for the same period last year reflecting the Company's ability to scale its advertising business profitably.  Non-advertising revenue gross margin for the second quarter of 2013 was 55%, up from 54% for the same period last year.  Non-GAAP non-advertising revenue gross margin for the second quarter of 2013 increased to 49% from 45% for the same period last year, due to the increase in revenue contribution from higher margin Weibo VAS, partially offset by the decline in MVAS margin.

Operating expenses for the second quarter of 2013 totaled $102.5 million, compared to $69.8 million for the same period last year.  Excluding stock-based compensation, which included $23.2 million related to the Alibaba transaction (see Other section below for further information), non-GAAP operating expenses for the second quarter of 2013 totaled $75.4 million, compared to $66.8 million for the same period last year. The increase in non-GAAP operating expenses was primarily due to higher personnel costs and, to a lesser extent, increased bad debt expenses, partially offset by lower marketing expenditures.

Loss from operations for the second quarter of 2013 was $18.2 million, compared to income from operations of $0.2 million for the same period last year.  Non-GAAP income from operations for the second quarter of 2013 was $8.8 million, compared to loss from operations of $0.8 million for the same period last year. 

Non-operating income for the second quarter of 2013 was $8.2 million, compared to $34.2 million for the same period last year.  Non-operating income for the second quarter of 2013 included $1.3 million, or $4.2 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.  Non-operating income for the second quarter of 2012 included a net gain of $32.8 million, primarily related to the gain in investment from China Real Estate Corporation ("CRIC") resulting from its merger with E-House (China) Holdings Limited ("E-House"). 

Net loss attributable to SINA for the second quarter of 2013 was $11.5 million, compared to a net income of $33.2 million for the same period last year.  Diluted net loss per share attributable to SINA for the second quarter of 2013 was $0.17, compared to a diluted net income per share of $0.49 for the same period last year.  Non-GAAP net income attributable to SINA for the second quarter of 2013 was $14.2 million, compared to $3.7 million for the same period last year.  Non-GAAP diluted net income per share attributable to SINA for the second quarter of 2013 was $0.21, compared to $0.05 for the same period last year.

As of June 30 2013, SINA's cash, cash equivalents and short-term investments totaled $1,237.0 million, compared to $713.6 million as of December 31, 2012.  The increase in cash, cash equivalents and short-term investments was mainly due to the net cash received from Alibaba for the investment in Weibo.  For the second quarter of 2013, cash provided by operating activities was $43.6 million, capital expenditures totaled $10.9 million and depreciation expenses amounted to $8.7 million.

Other

On April 29, 2013, Alibaba, through a wholly owned subsidiary, invested $586 million to purchase preferred and ordinary shares representing approximately 18% of Weibo's outstanding share capital on a fully-diluted basis ("Transaction").  SINA also granted options to Alibaba to enable Alibaba to increase its ownership in Weibo to 30% on a fully-diluted basis at a mutually agreed valuation within a certain period of time in the future.  As part of the Transaction, $49.7 million was recorded as investor options liabilities to reflect the fair value of the options at June 30, 2013, as well as a one-off charge of $27.1 million in stock-based compensation.

Business Outlook

SINA estimates that its non-GAAP net revenues for the third quarter of 2013 will be between $176 million and $180 million, including advertising revenues to be between $151 million and $153 million and non-GAAP non-advertising revenues to be between $25 million and $27 million.  This assumes the low-margin MVAS revenues to decline approximately $6 million sequentially.  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 and non-advertising gross margin, non-GAAP gross profit, non-GAAP operating expenses, non-GAAP income/(loss) from operations, non-GAAP 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 and change in fair value of investor options liabilities.  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 August 12, 2013 (or 9 a.m. Beijing Time on August 13, 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:

+1 845 675 0438

Hong Kong:

+852 3051 2745

Passcode for all regions:

29900221

A replay of the conference call will be available through midnight Eastern Daylight Time August 19, 2013. The dial-in number is +61 2 8199 0299.  The passcode for the replay is 29900221.

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 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 portal, Weibo and MVAS products; failure to enter and develop the small and medium enterprise market by the Company or through cooperation with third parties, such a Alibaba; 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


Six months ended



June 30,


March 31,


June 30,



2013


2012


2013


2013


2012

Net revenues:










    Advertising

$120,579


$103,130


$94,289


$214,868


$181,672

    Non-advertising

36,906


28,475


31,684


68,590


56,153



157,485


131,605


125,973


283,458


237,825

Cost of revenues:










    Advertising  (a)

56,620


48,472


47,810


104,430


92,556

    Non-advertising

16,520


13,150


13,547


30,067


26,177



73,140


61,622


61,357


134,497


118,733

Gross profit

84,345


69,983


64,616


148,961


119,092












Operating expenses:










    Sales and marketing (a)

40,119


34,471


30,024


70,143


69,215

    Product development (a)

41,250


26,139


30,801


72,051


51,162

    General and administrative (a)

21,159


9,188


13,629


34,788


16,509

    Amortization of intangibles

12


12


12


24


120



102,540


69,810


74,466


177,006


137,006

Income/(loss) from operations

(18,195)


173


(9,850)


(28,045)


(17,914)












Non-operating income/(loss):










   Earning/(loss) from equity investments, net

1,289


(3,315)


1,526


2,815


(7,236)

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

1,850


32,770


(10,852)


(9,002)


35,831

   Interest and other income, net

5,058


4,782


4,785


9,843


8,313



8,197


34,237


(4,541)


3,656


36,908












Income/(loss) before income taxes

(9,998)


34,410


(14,391)


(24,389)


18,994

Income tax credit/(provision)

(3,025)


(1,033)


(185)


(3,210)


241












Net income/(loss)

(13,023)


33,377


(14,576)


(27,599)


19,235

   Less: Net income/(loss) attributable to noncontrolling interest

(1,490)


132


(1,405)


(2,895)


(270)












Net income/(loss) attributable to SINA

$(11,533)


$33,245


$(13,171)


$(24,704)


$19,505























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

$(0.17)


$0.50


$(0.20)


$(0.37)


$0.29

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

$(0.17)


$0.49


$(0.20)


$(0.37)


$0.29












Shares used in computing basic










   net income/(loss) per share attributable to SINA

66,814


66,337


66,687


66,751


66,261

Shares used in computing diluted










   net income/(loss) per share attributable to SINA

66,814


66,809


66,687


66,751


66,795























(a) Stock-based compensation in each category:











Cost of revenues - advertising

$4,460


$751


$568


$5,028


$1,558


Sales and marketing

6,223


754


790


7,013


1,520


Product development

8,794


868


791


9,585


1,935


General and administrative

12,155


1,346


3,118


15,273


2,479

 

SINA CORPORATION

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(U.S. Dollars in thousands)











June 30,



December 31,




2013



2012


Assets


Current assets:














Cash and cash equivalents


$929,368



$199,826


Short-term investments


307,628



513,772


Accounts receivable, net


159,226



135,251


Prepaid expenses and other current assets


30,099



36,498


      Total current assets


1,426,321



885,347








Property and equipment, net


71,620



76,640

Goodwill and intangible assets, net


26,911



15,840

Equity investments, net


457,118



466,875

Other assets


62,914



38,204

Total assets


$2,044,884



$1,482,906









Liabilities and Shareholders' Equity


Current liabilities:







Accounts payable


$4,603



$7,994


Accrued liabilities


213,417



168,677


Deferred revenues


43,455



36,892


Income taxes payable


12,008



13,466


Investor options liabilities


49,705





     Total current liabilities


323,188



227,029








Long-term deferred revenue


98,411



107,784

Other long-term liabilities


3,148



2,220


     Total liabilities


424,747



337,033








Shareholders' equity







SINA shareholders' equity


1,139,011



1,136,670


Non-controlling interest


481,126



9,203


     Total shareholders' equity 


1,620,137



1,145,873








Total liabilities and shareholders' equity


$2,044,884



$1,482,906

 

SINA CORPORATION

UNAUDITED ADDITIONAL INFORMATION

(U.S. Dollars in thousands)














Three months ended


Six months ended



June 30,


March 31,


June 30,



2013


2012


2013


2013


2012












Net revenues











Advertising

$120,579


$103,130


$94,289


$214,868


$181,672


MVAS

19,920


17,668


15,863


35,783


36,686


Others

16,986


10,807


15,821


32,807


19,467



$157,485


$131,605


$125,973


$283,458


$237,825












Cost of revenues











Advertising

$56,620


$48,472


$47,810


$104,430


$92,556


MVAS

13,816


10,778


11,026


24,842


22,455


Others

2,704


2,372


2,521


5,225


3,722



$73,140


$61,622


$61,357


$134,497


$118,733

 

SINA CORPORATION

UNAUDITED RECONCILIATION OF NON-GAAP TO GAAP RESULTS

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









































Three months ended



June 30, 2013


June 30, 2012


March 31, 2013







Non-GAAP






Non-GAAP






Non-GAAP



Actual


Adjustments


Results


Actual


Adjustments


Results


Actual


Adjustments


Results




















Advertising revenues

$120,579




$120,579


$103,130




$103,130


$94,289




$94,289

Non-advertising revenues

36,906


(4,686)

 (c) 

32,220


28,475


(4,686)

 (c) 

23,789


31,684


(4,686)

 (c) 

26,998

Net revenues

$157,485


$(4,686)


$152,799


$131,605


$(4,686)


$126,919


$125,973


$(4,686)


$121,287
























4,460

 (a) 





751

 (a) 





568

 (a) 






(4,686)

 (c) 





(4,686)

 (c) 





(4,686)

 (c) 


Gross profit

$84,345


$(226)


$84,119


$69,983


$(3,935)


$66,048


$64,616


$(4,118)


$60,498











































(27,172)

 (a) 





(2,968)

 (a) 





(4,699)

 (a) 






(12)

 (b) 





(12)

 (b) 





(12)

 (b) 


Operating expenses

$102,540


$(27,184)


$75,356


$69,810


$(2,980)


$66,830


$74,466


$(4,711)


$69,755











































31,632

 (a) 





3,719

 (a) 





5,267

 (a) 






12

 (b) 





12

 (b) 





12

 (b) 






(4,686)

 (c) 





(4,686)

 (c) 





(4,686)

 (c) 


Income/(loss) from operations

$(18,195)


$26,958


$8,763


$173


$(955)


$(782)


$(9,850)


$593


$(9,257)
























31,632

 (a) 


















12

 (b) 


















(4,686)

 (c) 





3,719

 (a) 





5,267

 (a) 






2,874

 (d) 





12

 (b) 





12

 (b) 






(1,850)

 (e) 





(4,686)

 (c) 





(4,686)

 (c) 






(864)

 (f) 





4,217

 (d) 





3,275

 (d) 






(1,361)

 (g) 





(32,770)

 (e) 





10,852

 (e) 


Net income/(loss) attributable to SINA

$(11,533)


$25,757


$14,224


$33,245


$(29,508)


$3,737


$(13,171)


$14,720


$1,549







































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

$(0.17)




$0.21


$0.49




$0.05


$(0.20)




$0.02

Shares used in computing diluted


















   net income/(loss) per share attributable to SINA

66,814


270

 (h) 

67,084


66,809


-


66,809


66,687


268

 (h) 

66,955







































Gross margin - advertising

53%


4%


57%


53%


1%


54%


49%


1%


50%




























































Six months ended









June 30, 2013


June 30, 2012













Non-GAAP






Non-GAAP









Actual


Adjustments


Results


Actual


Adjustments


Results


























Advertising revenues

$214,868




$214,868


$181,672




$181,672







Non-advertising revenues

68,590


(9,372)

 (c) 

59,218


56,153


(9,372)

 (c) 

46,781







Net revenues

$283,458


$(9,372)


$274,086


$237,825


$(9,372)


$228,453






























5,028

 (a) 





1,558

 (a) 












(9,372)

 (c) 





(9,372)

 (c) 








Gross profit

$148,961


$(4,344)


$144,617


$119,092


$(7,814)


$111,278






























(31,871)

 (a) 





(5,934)

 (a) 












(24)

 (b) 





(120)

 (b) 








Operating expenses

$177,006


$(31,895)


$145,111


$137,006


$(6,054)


$130,952






























36,899

 (a) 





7,492

 (a) 












24

 (b) 





120

 (b) 












(9,372)

 (c) 





(9,372)

 (c) 








Income/(loss) from operations

$(28,045)


$27,551


$(494)


$(17,914)


$(1,760)


$(19,674)






























36,899

 (a) 


















24

 (b) 


















(9,372)

 (c) 





7,492

 (a) 












6,149

 (d) 





120

 (b) 












9,002

 (e) 





(9,372)

 (c) 












(864)

 (f) 





7,795

 (d) 












(1,361)

 (g) 





(35,831)

 (e) 








Net income/(loss) attributable to SINA

$(24,704)


$40,477


$15,773


$19,505


$(29,796)


$(10,291)













































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

$(0.37)




$0.23


$0.29




$(0.16)







Shares used in computing diluted


















   net income/(loss) per share attributable to SINA

66,751


269

 (h) 

67,020


66,795


(534)

 (h) 

66,261













































Gross margin - advertising

51%


3%

*

54%


49%


1%


50%













































(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, gain/(loss) on deemed disposal and (impairment) on investments, net












(f)  To adjust the change in fair value of investor options liabilities

















(g)  To adjust gain/(loss) attributable to noncontrolling interest


















(h)  To adjust the number of shares used in computing diluted net income per share from diluted net loss per share.














* Rounding





































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

































Three months ended



June 30, 2013


June 30, 2012


March 31, 2013



Actual


Adjustments


Non-GAAP Results


Actual


Adjustments


Non-GAAP Results


Actual


Adjustments


Non-GAAP Results





















To adjust stock-based compensation



$1,408






$1,961






$1,632




To adjust amortization expenses of intangible 



















  assets resulting from business acquisitions



1,050






1,663






1,202




Earning/(loss) from equity investments, net

$1,705


$2,458


$4,163


$(2,722)


$3,624


$902


$1,967


$2,834


$4,801


Share of amortization of equity investments' 



















  intangibles not on their books

$(416)


$416


$-


$(593)


$593


$-


$(441)


$441


$-



$1,289


$2,874


$4,163


$(3,315)


$4,217


$902


$1,526


$3,275


$4,801









































Six months ended









June 30, 2013


June 30, 2012









Actual


Adjustments


Non-GAAP Results


Actual


Adjustments


Non-GAAP Results



























To adjust stock-based compensation



$3,040






$3,115










To adjust amortization expenses of intangible 



















  assets resulting from business acquisitions



2,252






3,351










Earning/(loss) from equity investments, net

$3,672


$5,292


$8,964


$(5,907)


$6,466


$559








Share of amortization of equity investments' 



















  intangibles not on their books

$(857)


$857


$-


$(1,329)


$1,329


$-









$2,815


$6,149


$8,964


$(7,236)


$7,795


$559

































































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















SOURCE SINA Corporation



RELATED LINKS
http://www.sina.com
http://corp.sina.com

More by this Source


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

 

PR Newswire Membership

Fill out a PR Newswire membership form or contact us at (888) 776-0942.

Learn about PR Newswire services

Request more information about PR Newswire products and services or call us at (888) 776-0942.