V Media Corp. Announces First Quarter Fiscal Year 2013 Financial Results

DALIAN, China, Nov. 15, 2012 /PRNewswire/ -- V Media Corp. (OTCBB: CMDI) (the "Company"), China's fast-growing advertising media company with current outdoor media network located in Dalian, Shenyang, Tianjin, Beijing, Shanghai and New York, today announced its financial results for the fiscal year 2013 first quarter ended September 30, 2012.

Financial Highlights for the First Quarter Ended September 30, 2012

  • Total revenue for the first quarter fiscal year 2013 was $5.5 million, increased 20.1% compared with the first quarter fiscal year 2012
  • Gross profit decreased 65.7% to $0.8 million with a corresponding gross margin of 15.2%
  • Net loss attributable to the Company was $1.4 million, decreased 262.8% compared with the same period prior year

Mr. James Wang, Chairman and Chief Executive Officer of V Media, stated, "During our first quarter fiscal year 2013, our overall revenue resumed the growth trend which increased 20.1% year-over-year, however, we still see an extended cut backs on branding budgets as a result of macroeconomic uncertainties. Affected by macroeconomic uncertainty, we have been focusing on client diversification and cross selling among different advertising platforms. Going forward we intend to increase our sales effort to improve the utilization rate of our platforms and cost cutting to improve our profit margin."

Summary Financials for 2013 fiscal Year first quarter Ended September 30, 2012:  

Fiscal First Quarter Financials (USD)

Three months ended September 30,

2012

2011

CHANGE

Revenue

$5.5 million

$4.6 million

20.1%

Gross Profit

$0.8 million

$2.4 million

-65.7%

Gross Profit Margin

15.2%

53.4%

-71.5%

Net Income

$-1.4 million

$0.9 million

-262.8%

EPS*

$-0.05

$0.03

-262.8%

* Based on 27.6 million shares outstanding

Financial Results for the 2013 Fiscal Year First Quarter Ended September 30, 2012

Revenue for the 2013 fiscal year first quarter ended September 30, 2012 totaled $5.5 million, an increase of 20.1% compared to $4.6 million for the same period in 2011. Revenue from outdoor billboard advertising platform which accounted for 36.1% of total revenue during the 2013 fiscal year first quarter, increased  16.2% compared with same period the prior year. Outdoor billboards accounted for 36.1% of total revenue in our first quarter fiscal year 2013 and have presented great growth opportunities for the Company. The outdoor billboard platform is established in Dalian, Shenyang, Tianjin, Beijing, Shanghai and New York and going forward the Company will continue to establish their presence in these markets. Revenue in Dalian, which accounted for 78.7% of total revenue, increased by 7.6% to $4.3 million for the 2013 fiscal year first quarter as compare to $4.0 million for the 2012 fiscal year first quarter.

Street fixture and display networks revenue (generated from Dalian and Shenyang market) increased 71.3% year-over-year, city transit system display networks increased 17.3% and city navigator decreased 80.2%, both of which are generated solely from Dalian market. Geographically for the 2013 fiscal year first quarter, revenue in Dalian, Shanghai, Shenyang, Tianjin and Beijing accounted for 78.7%, 3.8%, 2.3%, 2.2% and 12.9% of total revenue. These results compare to 87.9%, 3.8%, 5.8%, 2.4% and 0% for the 2012 fiscal year first quarter.

As of September 30, 2012, V Media has installed 52 "City Navigator" units across the Dalian urban area, 3 mega-screen (126 square meters to 400 square meters or 1,356 square feet to 4,306 square feet) LED screens and 8 metal billboards in Dalian, 1 mega-screen (88 square meters or 947 square feet) LED screen in the business district in Shenyang, 1 indoor LED screen (22 square meters or 237 square feet) in Tianjin Railway Station and 5 outdoor billboards in Shanghai. For other platforms, the number of bus shelters and taxi stops increased to 790, the number of buses that carry mobile advertisements is 336 and specifically the number of mobile displays through Dalian metro-trains increased to 32.

2013 Fiscal Year First Quarter Revenue Breakdown by Advertising Platform (USD)

Period ended September 30,

2012

2011

CHANGE

Street Fixture and Display Network

% of Sales

Gross Profit Margin %

$2.2 million

39.8%

35.5%

$1.3 million

27.9%

55.9%

71.3%

City Transit System Display Network

% of Sales

Gross Profit Margin %

$1.1 million

19.7%

22.9%

$0.9 million

20.2%

58.2%

17.3%

Outdoor Billboards

% of Sales

Gross Profit Margin %

$2.0 million

36.1%

28.8%

$1.7 million

37.4%

48.8%

16.2%

City Navigator

% of Sales

Gross Profit Margin %

$0.1 million

1.9%

-5.0%

$0.5 million

11.7%

69.9%

-80.2%

Other Services Income

% of Sales

Gross Profit Margin %

$0.1 million

2.5%

75.3%

$0.1 million

2.9%

-10.3%

-2.2%

Total Sales

$5.5 million

$4.6 million

20.1%

Cost of sales for the three months ended September 30, 2012 totaled $4.6 million or 84.8% of revenue, an increase of 118.7% compared to $2.1 million or 46.6% of revenue for the three months ended September 30, 2011. The increase in cost of revenue was primarily attributable to increased depreciation of advertising equipment, labor and raw material cost, and the cost of lease expense for approximately $1.7 million related to billboards.

Gross profit for the three months ended September 30, 2012 totaled $0.8 million, a decrease of 65.7% compared to $2.4 million for the three months ended September 30, 2011. The decrease in gross profit was primarily attributable to the cost increase. Gross profit margin was 15.2% and 53.4% for the three months ended September 30, 2012 and 2011, respectively. The decrease in gross profit margin during the first quarter 2013 fiscal year as compared to the 2012 fiscal year was mainly due to (1) the increased cost revenue which was mainly caused by increased depreciation expense of advertising equipment and increase in overhead due to the higher labor cost and raw material cost, (2) cost of Times Square LED of about $1.4 million in current quarter. As a result, our gross profit margin was lower than the level we normally would expect. We intend to increase our sales effort to improve the utilization rate of our platforms in the coming quarters to improve our gross profit margin, and we expect to have a margin recovery as the new market gains sales momentum.

Selling, general and administrative expenses, which primarily consist of salaries of sales personnel, commissions for sales representatives, rent expenses and related administrative expenses, totaled $1.8 million and $0.9 million for the three months ended September 30, 2012 and 2011, respectively, an increase of $0.9 million or 98.1%. Along with increase in our payroll and administrative costs, the increase in our operating expenses was mainly due to increased selling and promotional expenses so as to improve market awareness in both existing and new markets, and other costs related to supporting our sales force as the overall advertising market became more competitive.

Net loss attributable to V Media Corp. for the first quarter ended September 30, 2012 totaled $1.4 million, a decrease of 262.8% as compared to net income $0.9 million for the first quarter ended September 30, 2011. Basic and diluted earnings per share for the first quarter ended September 30, 2012 were -$0.05 based on 27.6 million basic and diluted shares versus basic and diluted earnings per share of $0.03 for the first quarter ended September 30, 2011 based on 27.6 million basic and diluted shares outstanding.

Liquidity and Capital Resources

As of September 30, 2012, V Media had approximately $0.9 million in cash and cash equivalents or $0.03 per share. As of September 30, 2012, total current assets and total assets were $14.6 million and $44.2 million, respectively. During the same period, total current liabilities and total liabilities were $25.3 million and $25.5 million, respectively. Shareholder's equity decreased 5% to $18.7 million for the first quarter ended September 30, 2012, compared to $19.7 million for the first quarter ended September 30, 2011.

About V Media Corp.

Founded in September 2000, Dalian Vastitude Media Group Co., Ltd., now known as V Media Corp., is headquartered in Dalian, the commercial center of Northeastern China. The company owns and operates the city's largest outdoor media network encompassing over 600 bus shelters furnished with billboards and displays; 130 taxi stops with displays; and 18 large-size billboards, including 3 large-size LED displays at major traffic conjunctions. The company also furnishes more than 400 buses with advertising posters and 32 metro-trains throughout Dalian Metro Lines. V Media provides comprehensive adverting services from art design to ad publishing, from daily maintenance to technical upgrading. Launched in Dalian in 2009, V Media's proprietary LED multimedia display network, City Navigator®, is one of the country's first web-based outdoor advertising networks. For more information, please visit www.gywj.cn.

Forward-Looking Statements

This press release may contain certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact included herein are "forward-looking statements", including statements regarding the Company's ability to meet its obligations under its various contracts; the timeliness of payments and other economic benefits the Company expects to receive under such contracts; and the Company's ability to maintain its customer relationships and to maintain its ability to pursue its commercial objectives. In addition, the Company's operations are conducted in the PRC and, accordingly, are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe such as risks associated with, among others, the political, economic and legal environment and foreign currency exchange. The Company's results may be adversely affected by changes in the political and social conditions in the PRC and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation. These forward-looking statements are often identified by the use of forward-looking terminology such as "believes," "expects" or similar expressions, involve known and unknown risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company's periodic reports that are filed with the Securities and Exchange Commission and available on its website at http://www.sec.gov. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.

Company Contact:

Rita Jiang
Executive Vice President of Finance
646-691-5047
Rita.jiang@gmail.com
www.gywj.cn

 

V MEDIA CORP. AND SUBSIDIARIES

(FORMERLY CHINA NEW MEDIA CORPORTATION)

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

 (IN US DOLLARS)




As of September 30,



As of June 30,



2012



2012







 ASSETS












 Current assets






 Cash and cash equivalents


$

880,338



$

1,526,604

 Restricted cash



2,980,302




-

   Accounts receivable, net of allowance $606,737 and $ 488,723



5,560,984




4,960,911

 Advance to suppliers



779,449




413,883

 Loans receivable



2,570,762




2,099,493

 Other current assets



1,173,000




113,129

 Deferred tax assets



645,344




396,961

 Total current assets



14,590,179




9,510,981









 Property, equipment and construction in progress, net



23,381,559




23,204,841









 Other assets








 Billboards use right, net



4,044,832




4,798,745

 Security deposits



2,091,643




2,043,750

 Equity investment



76,814




82,572

 Total other assets



6,213,289




6,925,067









 Total Assets


$

44,185,027



$

39,640,889









 LIABILITIES AND EQUITY
















 Current liabilities








 Short term loans


$

12,059,118



$

11,035,314

 Current portion of long term loan



606,689




590,370

 Accounts payable



1,936,356




2,274,736

 Notes payable



3,862,736




-

 Other payables



2,445,486




1,902,658

 Accrued expenses



21,533




21,533

 Deferred revenues



3,581,558




2,649,472

 Taxes payable



468,082




507,145

 Due to related parties



276,626




594,774

 Total current liabilities



25,258,184




19,576,002









 Long term loan-non current portion



211,497




363,060









 Total  Liabilities



25,469,681




19,939,062









 Commitments and contingencies
















 Equity








Series A Preferred Stock, $0.0001 par value, 20,000,000 shares authorized,

  1,000,000 shares issued and outstanding



100




100

Common stock, $0.0001 Par value; 80,000,000 shares authorized;





  27,590,701 shares issued and outstanding



2,759




2,759

 Additional paid-in-capital



6,820,820




6,820,820

 Accumulated other comprehensive income



913,441




786,806

 Retained earnings



9,370,267




10,774,956

 Total V Media Corp. equity



17,107,387




18,385,441

 Noncontrolling interest



1,607,959




1,316,386

 Total equity



18,715,346




19,701,827









 Total Liabilities and Equity


$

44,185,027



$

39,640,889

 

V MEDIA CORP. AND SUBSIDIARIES

(FORMERLY CHINA NEW MEDIA CORPORTATION)

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(IN US DOLLARS)




For the three months ended September 30,



2012



2011







 Revenues


$

5,480,963



$

4,562,159









 Cost of revenue



(4,645,696)




(2,124,066)









 Gross profit



835,267




2,438,093









 Selling, general and administrative expenses



(1,834,803)




(926,290)









 Income (loss)  from operations



(999,536)




1,511,803









 Other income (expenses):








 Interest income



718




1,693

 Interest expense



(281,353)




(232,866)

 Loss from equity investment



(6,575)




-

 Subsidy income



41,224




-

 Other expenses



(11,433)




(19,890)









 Total other income (expense)



(257,419)




(251,063)









 Income (loss) before income taxes



(1,256,955)




1,260,740









 Income tax provision (benefit)








 Current



180,058




372,436

 Deferred



(261,185)




(17,056)

 Total income tax provision (benefit)



(81,127)




355,380









             Net income (loss)



(1,175,828)




905,360









 Less: net income (loss) attribute to the noncontrolling interest



228,861




42,442









 Net income (loss)  attributable to V Media Corp.


$

(1,404,689)



$

862,918

















 Net income (loss)



(1,175,828)




905,360









 Other comprehensive income








 Foreign currency translation adjustments



143,695




188,181









 Comprehensive income (loss)



(1,032,133)




1,093,541









 Less: comprehensive income (loss) attributed to the noncontrolling interest



245,921




54,943









 Comprehensive income (loss) attributable to V Media Corp.


$

(1,278,054)



$

1,038,598









 Earnings (loss) per share








 Basic and diluted


$

(0.05)



$

0.03

 Weighted average number of common shares








 Basic and diluted



27,550,701




27,550,701

 

V MEDIA CORP. AND SUBSIDIARIES

(FORMERLY CHINA NEW MEDIA CORPORTATION)

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN US DOLLARS)




For the three months ended September 30,



2012



2011







 CASH FLOWS FROM OPERATING ACTIVITIES:






 Net income (loss)


$

(1,175,828)



$

905,360

Adjustments to reconcile net income (loss) to net cash





 provided by (used in) operating activities:








 Depreciation and amortization



1,940,606




914,524

 Amortization of stock based compensation expense



-




7,988

 Loss from equity investment



6,575




-

 Provision for doubful accounts



111,578




-

 Deferred tax benefit



(241,554)




(17,056)

 Changes in operating assets and liabilities








 Accounts receivable



(652,603)




(1,021,918)

 Other current assets



(1,047,536)




15,006

 Security deposit



(25,660)




38,763

 Advance to suppliers



(357,326)




127,050

 Accounts payable



(359,011)




152,503

 Other payables



463,552




389,234

 Accrued expenses



-




(365,904)

 Deferred revenues



894,127




524,133

 Taxes payable



(44,044)




116,100









             Net cash provided by (used in) operating activities



(487,124)




1,785,783









 CASH FLOWS FROM INVESTING ACTIVITIES:








 Loan to third party



(443,998)




-

 Repayment of loans from third party



-




59,687

 Acquisition of billboards use rights



(501,412)




(486,223)

 Purchase of property and equipment



(570,321)




(1,681,830)









             Net cash used in investing activities



(1,515,731)




(2,108,366)









 CASH FLOWS FROM FINANCING ACTIVITIES:








 Restricted cash



(2,949,001)




(46,752)

 Net proceeds from capital contributions



45,652




-

 Proceeds from short-term bank loans



3,589,185




280,514

 Repayment of short-term bank loans



(2,172,401)




(1,090,886)

 Net Proceeds from bank acceptance notes payable



3,822,167




-

 Proceeds (repayment) from related party loans



(322,004)




38,960

 Payment of loan to unrelated parties



(521,061)




-

 Repayment of long-term bank loans



(143,961)




-









             Net cash provided by (used in) financing activities



1,348,575




(818,164)









 EFFECT OF EXCHANGE RATE CHANGE ON








 CASH AND CASH EQUIVALENTS



8,014




16,500









 NET DECREASE IN CASH AND CASH EQUIVALENTS



(646,266)




(1,124,247)









 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD



1,526,604




1,808,880









 CASH AND CASH EQUIVALENTS, END OF PERIOD


$

880,338



$

684,633









 SUPPLEMENTAL CASH FLOW DISCLOSURES








    Income taxes paid


$

57,369



$

223,817

    Interest paid


$

262,402



$

232,820

SOURCE V Media Corp.



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