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V Media Corporation Announces Second Quarter Fiscal Year 2013 Financial Results

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DALIAN, China, Feb. 15, 2013 /PRNewswire/ -- V Media Corporation (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 second quarter of fiscal year 2013 ended December 31, 2012.

Financial Highlights for the Second Quarter Ended December 31, 2012

  • Total revenue for the six months of fiscal year 2013 was $11.5 million, increased 19.8% compared with the six months of fiscal year 2012
  • Gross profit decreased 1.8% to $2.0 million with a corresponding gross margin of 17.3%
  • Net loss attributable to the Company was $1.9 million, decreased 224.8% compared with the same period prior year

Mr. James Wang, Chairman and Chief Executive Officer of V Media, stated, "During our six months of fiscal year 2013, we still see a challenging market of cut backs on branding budgets as a result of macroeconomic uncertainties, however, our overall revenue resumed the growth trend which increased 19.8% year-over-year.  Our strategy of focusing on client diversification and cross selling among different advertising platforms starts to show its effect during the macroeconomic uncertainties. Going forward we will continue to increase our sales effort to improve the utilization rate of our platforms and cost cutting to improve our profit margin. Once our newly added platforms gain sales momentum, we expect to see an improved top-line and bottom-line growth.

Summary Financials for 2013 fiscal Year second quarter Ended December 31, 2012:  

Fiscal Second Quarter Financials (USD)

Three months ended December 31,

2012

2011

CHANGE

Revenue

$6.0 million

$5.0 million

19.4%

Gross Profit

$1.1 million

$2.8 million

-58.4%

Gross Profit Margin

19.1%

54.8%

-65.2%

Net Income

$-0.4 million

$0.6 million

-171.9%

EPS*

$-0.02

$0.02

-171.9%

* Based on 27.6 million shares outstanding

Financial Results for the 2013 Fiscal Year Second Quarter Ended December 31, 2012
Revenue for the 2013 fiscal year second quarter ended December 31, 2012 totaled $6.0 million, an increase of 19.4% compared to $5.0 million for the same period in 2011. Revenue from outdoor billboard advertising platform which accounted for 31.8% of total revenue during the 2013 fiscal year second quarter, decreased 24.8% compared with same period the prior year, the decreased revenue from outdoor billboard is mainly due to the revenue decrease in Beijing market. 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 84.4% of total revenue, increased by 42.1% to $5.1 million for the 2013 fiscal year second quarter as compare to $3.6 million for the 2012 fiscal year second quarter.

Street fixture and display networks revenue (generated from Dalian and Shenyang market) increased 27.7% year-over-year, city transit system display networks increased 50.5% and city navigator decreased 73.8%, both of which are generated solely from Dalian market. Geographically for the 2013 fiscal year second quarter, revenue in Dalian, Shanghai, Shenyang, Tianjin and Beijing accounted for 84.4%, 4.2%, 7.6%, 3.7% and 0.1% of total revenue. These results compare to 70.9%, 3.1%, 9.2%, 2.8% and 14% for the 2012 fiscal year second quarter.

As of December 31, 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, 5 outdoor billboards in Shanghai and 1 LED screen in Haikou. 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 Second Quarter Revenue Breakdown by Advertising Platform (USD)

Period ended December 31,

2012

2011

CHANGE

Street Fixture and Display Network

% of Sales

Gross Profit Margin %

$1.6 million

25.8%

25%

$1.2 million

24.1%

61.9%

27.7%

City Transit System Display Network

% of Sales

Gross Profit Margin %

$1.1 million

18.8%

41.4%

$0.8 million

14.9%

53%

50.5%

Outdoor Billboards

% of Sales

Gross Profit Margin %

$1.9 million

31.8%

39.6%

$2.5 million

50.5%

43.5%

-24.8%

City Navigator

% of Sales

Gross Profit Margin %

$0.1 million

1.7%

34.6%

$0.4 million

7.7%

65.5%

-73.8%

Other Services Income

% of Sales

Gross Profit Margin %

$1.3 million

21.9%

26.8%

$0.1 million

2.8%

45.8%

845.5%

Total Sales

$6.0 million

$5.0 million

19.4%

Cost of sales for the three months ended December 31, 2012 totaled $4.9 million or 80.9% of revenue, an increase of 113.6% compared to $2.3 million or 45.2% of revenue for the three months ended December 31, 2011. The increase in cost of revenue was primarily attributable to i) increased depreciation of advertising equipment, ii) increase in billboard right, iii) the cost of Times Square LED lease in the amount of $0.86 million compared with none in the same period ended December 31, 2011, iv) and the increase of labor and raw material cost.

Gross profit for the three months ended December 31, 2012 totaled $1.1 million, a decrease of 58.4% compared to $2.8 million for the three months ended December 31, 2011. The decrease in gross profit was primarily attributable to the cost increase. Gross profit margin was 19.1% and 54.8% for the three months ended December 31, 2012 and 2011, respectively.  The decrease in gross profit margin during the second 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 $0.9 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 $1.6 million and $1.5 million for the three months ended December 31, 2012 and 2011, respectively, an increase of $0.1 million or 7.3%.  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 second quarter ended December 31, 2012 totaled $0.4 million, a decrease of 171.9% as compared to net income $0.6 million for the second quarter ended December 31, 2011. Basic and diluted earnings per share for the second quarter ended December 31, 2012 were -$0.02 based on 27.6 million basic and diluted shares versus basic and diluted earnings per share of $0.02 for the second quarter ended December 31, 2011 based on 27.6 million basic and diluted shares outstanding.

Summary Financials for Six Months of Fiscal 2013 Ended December 31, 2012:  

Fiscal 2013 Six-Month Results (USD) (unaudited)

Six months ended December 31,

2012

2011

CHANGE

Revenue

$11.5 million

$9.6 million

+19.8%

Gross Profit

$2.0 million

$5.2 million

-61.8%

Gross Profit Margin

17.3%

54.1%

-68.1%

Net Income*

$-1.9 million

$1.5 million

-224.8%

EPS**

$-0.07

$0.05

-224.8%

* Attributable to V Media Corp.

** Based on 27.6 million shares outstanding

Financial Results for the Six Months FY 2013 Ended December 31, 2012
Revenue for the six months FY 2013 ended December 31, 2012 totaled $11.5 million, an increase of 19.8% compared to $9.6 million for the same period in fiscal 2011. Revenue from outdoor billboard advertising platform which accounted for 33.9% of total revenue during the six months fiscal year 2013, decreased 8.4% compared with same period the prior year. Outdoor billboards accounted for 33.9% of total revenue in the six months 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 81.7% of total revenue, increased by 23.8% to $9.4 million for the six months fiscal year 2013 as compare to $7.6 million for the six months fiscal year 2012.

Street fixture and display networks revenue (generated from Dalian and Shenyang market) increased 50.0% year-over-year, city transit system display networks increased 32.2% and city navigator decreased 77.5%, both of which are generated solely from Dalian market. Geographically for the six months fiscal year 2013, revenue in Dalian, Shanghai, Shenyang, Tianjin and Beijing accounted for 81.7%, 4.0%, 5.1%, 3.0% and 6.2% of total revenue. These results compare to 79.0%, 3.5%, 7.6%, 2.6% and 7.3% for the six months fiscal year 2012.

Fiscal 2013 Six Months Revenue Breakdown by Advertising Platform (USD)

Period ended December 31,

2012

2011

CHANGE

Street Fixture and Display Network

% of Sales

Gross Profit Margin %

$3.7million

32.5%

31.1%

$2.5 million

25.9%

58.9%

50.0%

City Transit System Display Network

% of Sales

Gross Profit Margin %

$2.2 million

19.2%

32.4%

$1.7 million

17.4%

55.9%

32.2%

Outdoor Billboards

% of Sales

Gross Profit Margin %

$3.9 million

33.9%

34.1%

$4.3 million

44.3%

50.0%

-8.4%

City Navigator

% of Sales

Gross Profit Margin %

$0.2 million

1.8%

14.4%

$0.9 million

9.6%

68.0%

-77.5%

Other Services Income

% of Sales

Gross Profit Margin %

$1.5 million

12.7%

31.3%

$0.3 million

2.8%

18.6%

436.0%

Total Sales

$11.5 million

$9.6 million

+19.8%

Cost of sales for the six months ended December 31, 2012 totaled $9.5 million or 82.7% of revenue, an increase of 116.1% compared to $4.4 million or 45.9% of revenue for the six months ended December 31, 2011. The increase in cost of sales was primarily attributable to increased depreciation of advertising equipment, increase in billboard rights amortization expense and billboard lease expense, and increase in labor and raw material cost.

Gross profit for the six months ended December 31, 2012 totaled $2.0 million, a decrease of 61.8% compared to $5.2 million for the same period the prior year. Gross profit margin was 17.3% and 54.1% for the six months ended December 31, 2012 and 2011, respectively.  The decrease in gross profit margin was mainly due to the increased maintenance cost of advertising equipment, and the increase of labor and raw material cost.

Selling, general and administrative expenses totaled $3.5 million for the six months of fiscal 2013 as compared to $2.5 million for the same period in fiscal 2012. 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 six months ended December 31, 2012 totaled $1.9 million, a decrease of 224.8% as compared to net income $1.5 million for the six months ended December 31, 2011. Basic and diluted earnings per share for the six months ended December 31, 2012 were -$0.07 based on 27.6 million basic and diluted shares versus basic and diluted earnings per share of $0.05 for the six months ended December 31, 2011 based on 27.6 million basic and diluted shares outstanding.

Liquidity and Capital Resources
As of December 31, 2012, V Media had approximately $1.0 million in cash and cash equivalents or $0.04 per share. As of December 31, 2012, total current assets and total assets were $15.0 million and $44.2 million, respectively. During the same period, total current liabilities and total liabilities were $25.8 million and $25.8 million, respectively. Shareholder's equity decreased 13.6% to $18.3 million for the second quarter ended December 31, 2012, compared to $21.2 million for the second quarter ended December 31, 2011.

About V Media Corporation
Founded in September 2000, Dalian Vastitude Media Group Co., Ltd., now known as V Media Corporation, 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 19 large-size billboards, including 4 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 CORPORATION)
 UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
 (IN US DOLLARS)
















For the six months ended

December 31,



For the three months ended

December 31,




2012


2011


2012


2011



























 Revenues                                                                     


$

11,503,181


$

9,605,933



6,022,218


$

5,043,775


















 Cost of revenue



(9,518,511)



(4,405,235)



(4,872,815)



(2,281,169)


















 Gross profit



1,984,670



5,200,698



1,149,403



2,762,606


















Selling, general and administrative expenses



(3,478,835)



(2,459,023)



(1,644,032)



(1,532,733)


















 Income (loss)  from operations



(1,494,165)



2,741,675



(494,629)



1,229,873


















 Other income (expenses):

















     Interest income



2,163



2,891



1,445



1,198

     Interest expense



(540,422)



(469,145)



(259,069)



(236,279)

     Loss from equity investment


(17,430)



(7,901)



(10,855)



(7,901)

     Subsidy income



443,597



-



402,373



-

     Other expenses



(14,169)



(21,248)



(2,736)



(1,358)


















     Total other Income (expenses)



(126,261)



(495,403)



131,158



(244,340)


















 Income (loss) before income taxes



(1,620,426)



2,246,272



(363,471)



985,533


















 Income tax provision (benefit)

















 Current



359,924



566,435



179,866



194,000

 Deferred



(280,322)



43,795



(19,137)



60,851

 Total income tax provision (benefit)



79,602



610,230



160,729



254,851


















 Net income (loss)



(1,700,028)



1,636,042



(524,200)



730,682


















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



150,313



152,947



(78,548)



110,505


















 Net income (loss)  attributable to V Media Corp.


$

(1,850,341)


$

1,483,095



(445,652)


$

620,177



































 Net income (loss)



(1,700,028)



1,636,042



(524,200)



730,682


















 Other comprehensive income

















 Foreign currency translation adjustments



286,853



390,948



143,158



202,767


















 Comprehensive income (loss)



(1,413,175)



2,026,990



(381,042)



933,449


















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



178,270



179,716



(67,651)



124,772


















 Comprehensive income (loss) attributable to V Media
    Corp.


$

(1,591,445)


$

1,847,274



(313,391)


$

808,677


















 Earnings (loss) per share

















    Basic and diluted


$

(0.07)


$

0.05



(0.02)


$

0.02

 Weighted average number of common shares

















    Basic and diluted



27,550,701



27,550,701



27,550,701



27,550,701

 V MEDIA CORP. AND SUBSIDIARIES
 (FORMERLY CHINA NEW MEDIA CORPORATION)
 UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
 (IN US DOLLARS)



As of

December 31



As of June 30




2012



2012


 ASSETS







 Current assets







 Cash and cash equivalents


$

986,047



$

1,526,604


 Restricted cash                                                                                 



3,006,325




-


 Accounts receivable, net of a allowance $893,818 and $ 488,723



6,214,691




4,960,911


 Advance to suppliers



575,494




413,883


 Loans receivable



2,616,800




2,099,493


 Other current assets



906,489




113,129


 Deferred tax assets



668,171




396,961


 Total current assets



14,974,017




9,510,981











 Property, equipment and construction in progress, net



23,503,765




23,204,841











 Other assets









 Billboards use rights, net



3,512,247




4,798,745


 Security deposits



2,109,706




2,043,750


 Equity investment



66,562




82,572


 Total other assets



5,688,515




6,925,067











 Total Assets


$

44,166,297



$

39,640,889











 LIABILITIES AND STOCKHOLDERS' EQUITY


















 Current liabilities









 Short term loans


$

11,594,710



$

11,035,314


 Current portion of long term loan



622,218




590,370


 Accounts payable



2,203,053




2,274,736


 Bank acceptance notes payable



3,896,464




-


 Other payables



3,413,721




1,902,658


 Accrued expenses



21,533




21,533


 Deferred revenues



3,012,285




2,649,472


 Taxes payable



776,096




507,145


 Due to related parties



237,641




594,774


 Total current liabilities



25,777,721




19,576,002











 Long term loan-non current portion



53,899




363,060











 Total  Liabilities



25,831,620




19,939,062











 Commitments and contingencies


















 Stockholders' 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



1,045,702




786,806


 Retained earnings



8,924,615




10,774,956


 Total V Media Corp. stockholders' equity



16,793,996




18,385,441


 Noncontrolling interest



1,540,681




1,316,386


 Total stockholders' equity



18,334,677




19,701,827











 Total Liabilities and Stockholders' Equity


$

44,166,297



$

39,640,889


V MEDIA CORP. AND SUBSIDIARIES
 (FORMERLY CHINA NEW MEDIA CORPORATION)
 UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (IN US DOLLARS)










For the six months ended

December 31,




2012


2011








 CASH FLOWS FROM OPERATING ACTIVITIES:







 Net income (loss)


$

(1,700,028)


$

1,636,042

 Adjustments to reconcile net income (loss) to net cash









 provided by (used in) operating activities:









 Depreciation and amortization



4,154,520



1,981,591

 Amortization of stock based compensation expense



-



15,975

 Loss from equity investment



17,430



7,901

 Provision for doubful accounts



391,160



69,091

 Deferred tax provision (benefit)



(260,531)



30,189

 Changes in operating assets and liabilities









 Accounts receivable



(1,535,071)



(1,403,172)

 Other current assets



(782,401)



(71,366)

 Security deposit



(25,672)



113,009

 Advance to suppliers



(151,815)



(546,925)

 Prepaid expenses



-



96,810

 Accounts payable



(114,916)



518,763

 Other payables



1,402,607



(9,808)

 Accrued expenses



-



(368,639)

 Deferred revenues



307,525



983,863

 Taxes payable



256,164



168,444










             Net cash provided by operating activities



1,958,972



3,221,768










 CASH FLOWS FROM INVESTING ACTIVITIES:









 Loan to third party



(470,957)



-

 Repayment of loans to third party



-



(494,790)

 Equity investment



-



(93,948)

 Acquisition of billboard use rights



(1,482,648)



(488,526)

 Purchase of property and equipment



(1,153,219)



(2,251,187)










             Net cash used in investing activities



(3,106,824)



(3,328,451)










 CASH FLOWS FROM FINANCING ACTIVITIES:









 Restricted cash



(2,973,107)



-

 Net proceeds from capital contributions



46,025



-

 Proceeds from short-term bank loans



2,332,996



751,580

 Repayment of short-term bank loans



(1,714,038)



(1,096,054)

 Net proceeds from bank acceptance notes payable



3,853,411



-

 Repayment of related party loans



(366,842)



138,813

 Payment of loan to unrelated parties



(279,325)



-

 Repayment of long-term bank loans



(292,703)



-










             Net cash provided by (used in) financing activities



606,417



(205,661)










 EFFECT OF EXCHANGE RATE CHANGE ON









 CASH AND CASH EQUIVALENTS



878



40,563










 NET DECREASE IN CASH AND CASH EQUIVALENTS



(540,557)



(271,781)










 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD



1,526,604



1,808,880










 CASH AND CASH EQUIVALENTS, END OF PERIOD


$

986,047


$

1,537,099










 SUPPLEMENTAL CASH FLOW DISCLOSURES









    Income taxes paid


$

57,838


$

378,193

    Interest paid


$

518,715


$

466,144

SOURCE V Media Corp.



RELATED LINKS
http://www.gywj.cn

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