VisionChina Media Inc. Announces Second Quarter 2015 Results

Conference call scheduled for 8:00 p.m. Eastern today

Aug 17, 2015, 17:30 ET from VisionChina Media Inc.

BEIJING, Aug. 17, 2015 /PRNewswire/ -- VisionChina Media Inc. ("VisionChina Media" or the "Company") (Nasdaq: VISN), China's largest out-of-home digital television advertising network on mass transportation systems and the leading provider of urban mass transit Wi-Fi, today announced its unaudited financial results for the second quarter ended June 30, 2015.

Second Quarter 2015 Highlights

Total revenues increased 51.2% sequentially to $23.2 million.

Gross margin increased to 22.6%, compared with negative 11.9% in the first quarter of 2015.

Operating profit increased to $0.5 million, compared with an operating loss of $7.3 million in the first quarter of 2015.

Net loss attributable to VisionChina Media shareholders ("GAAP net loss") in the second quarter of 2015 was $0.2 million, compared with a GAAP net loss of $8.5 million in the first quarter of 2015.

Non-GAAP net loss attributable to VisionChina Media shareholders[1] was $0.1 million, compared with a non-GAAP net loss of $8.4 million in the first quarter of 2015.

Basic and diluted net loss per American depositary share ("ADS") attributable to VisionChina Media shareholders in the second quarter of 2015 were $0.03. Each ADS represents 20 ordinary shares.

The Company had cash and cash equivalents of $21.1 million as of June 30, 2015. Net cash provided by operating activities was $2.8 million in the second quarter of 2015.

As of June 30, 2015, the Company's network covered 19 cities secured either by exclusive agency agreements or joint venture contracts, and included 98,504 digital displays on mass transit systems.

Total broadcasting hours in the Company's network reached 31,988 in the second quarter of 2015.

The Company sold an average of 9.35 advertising minutes per broadcasting hour in its network, compared with 6.11 advertising minutes in the last quarter.

As of the date of this press release, VisionChina Media, through its consolidated affiliate Qianhai Mobie, has secured exclusive concession rights for bus Wi-Fi services in 20 cities across China, including Shanghai, Shenzhen, Guangzhou and Tianjin, covering approximately 46,000 buses. Currently, Qianhai Mobile provides free Wi-Fi Internet services on approximately 25,000 buses under the brand name "VIFI," spanning over 12.5 million commuters, while providing over 5.5 million Internet service sessions per day.

"We are delighted to see the rebound of our advertising business, while building strong growth momentum for gross and net margin improvement in the second half of the year," said Mr. Limin Li, VisionChina Media's chairman and chief executive officer. "Our mass transit Wi-Fi business has established a leading position in the market. As we continue to make progress with our Baidu collaboration, we look forward to seizing the many monetization opportunities we have identified."

Mr. Stanley Wang, VisionChina Media's chief financial officer, added, "Our subway business outperformed our expectation through the success of a series of strategic initiatives. For the second half of the year, our primary focus is to improve the Company's operating efficiency by adjusting the cost structure for our advertising business."

Second Quarter 2015 Results

VisionChina Media's total revenues were $23.2 million in the second quarter of 2015, a decrease of 24.0% from $30.5 million in the second quarter of 2014, and an increase of 51.2% from $15.3 million in the first quarter of 2015.

Total broadcasting hours in the second quarter of 2015 were 31,988 hours, compared with 38,039 hours in the second quarter of 2014 and 31,635 hours in the first quarter of 2015.

In the second quarter of 2015, the Company sold a total of 299,204 advertising minutes in its network, compared with 329,037 advertising minutes in the second quarter of 2014, and 193,380 advertising minutes in the first quarter of 2015.

The Company sold an average of 9.35 advertising minutes per broadcasting hour in the second quarter of 2015, compared with 8.65 advertising minutes per broadcasting hour in the second quarter of 2014 and 6.11 advertising minutes per broadcasting hour in the first quarter of 2015.

During the second quarter of 2015, 245 advertisers purchased advertising time on the Company's advertising network, either directly or through advertising agents, compared with 336 advertisers in the second quarter of 2014, and 218 advertisers in the first quarter of 2015.

Media cost, which is the most significant component of advertising service cost, was $13.3 million in the second quarter of 2015, a decrease of 26.1% from $18.0 million in the second quarter of 2014 and a decrease of 9.5% from $14.7 million in the first quarter of 2015.

Gross profit in the second quarter of 2015 was $5.2 million, compared with gross profit of $8.2 million in the second quarter of 2014 and gross loss of $1.8 million in the first quarter of 2015.

Advertising service gross margin was 23.7% in the second quarter of 2015, compared with 26.9% in the second quarter of 2014 and negative 8.7% in the first quarter of 2015.

Selling and marketing expenses were $3.4 million in the second quarter of 2015, a decrease of 9.8% from $3.7 million in the second quarter of 2014, and a decrease of 12.8% from $3.9 million in the first quarter of 2015. Selling and marketing expenses accounted for 15.2% of the Company's advertising service revenue in the second quarter of 2015, compared with 12.3% in the second quarter of 2014 and 25.4% in the first quarter of 2015.

General and administrative expenses were $1.4 million in the second quarter of 2015, a decrease of 57.0% from $3.2 million in the second quarter of 2014, and a decrease of 16.2% from $1.7 million in the first quarter of 2015.

Research and development expenses were $0.3 million in the second quarter of 2015, representing costs related to the Company's Wi-Fi development activities.

Operating profit was $0.5 million in the second quarter of 2015, compared with operating profit of $2.0 million in the second quarter of 2014, and an operating loss of $7.3 million in the first quarter of 2015.

The Company recorded net interest expense of $1.5 million in the second quarter of 2015, compared with $1.0 million in the second quarter of 2014 and $1.4 million in the first quarter of 2015.

Net loss attributable to VisionChina Media shareholders (GAAP) was $0.2 million in the second quarter of 2015, compared with net income attributable to VisionChina Media shareholders (GAAP) of $2.4 million in the second quarter of 2014, and a net loss attributable to VisionChina Media shareholders (GAAP) of $8.5 million in the first quarter of 2015.

Basic and diluted net loss per ADS (GAAP) were $0.03 in the second quarter of 2015.

The Company's non-GAAP financial measure, net loss attributable to VisionChina Media shareholders excluding share-based compensation expenses, was $0.1 million in the second quarter of 2015, compared with a non-GAAP net income of $2.5 million in the second quarter of 2014, and a non-GAAP net loss of $8.4 million in the first quarter of 2015.

As of June 30, 2015, the Company had cash and cash equivalents of $21.1 million, compared with $19.5 million as of December 31, 2014. Net cash provided by operating activities was $2.8 million in the second quarter of 2015, compared to net cash used in operating activities of $9.2 million in the first quarter of 2015.

Depreciation and amortization was $0.4 million and capital expenditures were $1.8 million in the second quarter of 2015.

Business Outlook

For the third quarter of 2015, the Company expects to generate advertising service revenue in the range of $22.6 million to $23.2 million, representing quarter-over-quarter growth of 1.8% to 4.5%.

The guidance is based on an exchange rate of RMB6.2500 per $1.00.

The Company notes that its guidance is based on its current network that, as of the date of this press release, has been secured by exclusive agency agreements or joint venture contracts. If the number of cities in the Company's network expands or contracts, management's forecast could be affected.

Conference Call

VisionChina Media's management will hold an earnings conference call at 8:00 p.m. U.S. Eastern Time on August 17, 2015 (8:00 a.m. Beijing/Hong Kong Time on August 18, 2015).

U.S. Toll Free:

+1-888-346-8982

Hong Kong Toll:

+852-3018-4992

International Toll:

+1-412-902-4272

Participants should call in at least 5 minutes before the scheduled start time and ask to be connected to the "VisionChina Media call."

A replay of the conference call may be accessed by phone at the following numbers until August 24, 2015.

U.S. Toll Free:

+1-877-344-7529

International Toll:

+1-412-317-0088

Replay Access Code:

10070912

Additionally, a live and archived webcast of this conference call will be available on the Investor Relations section of VisionChina Media's website at http://www.visionchina.cn.

About VisionChina Media Inc.

VisionChina Media Inc. (Nasdaq: VISN) operates an out-of-home advertising network on mass transportation systems, including buses and subways. As of June 30, 2015, VisionChina Media's advertising network included approximately 98,504 digital television displays on mass transportation systems in 19 of China's economically prosperous cities, including Beijing, Guangzhou and Shenzhen, as secured by exclusive agency agreements or joint venture contract. VisionChina Media has the ability to deliver real-time, location-specific broadcasting, including news, stock quotes, weather and traffic reports, and other entertainment programming. For more information, please visit http://www.visionchina.cn.

Use of Non-GAAP Financial Measures

In addition to VisionChina Media's consolidated financial results under GAAP, the Company also provides non-GAAP financial measures, including net income/(loss) excluding non-cash share-based compensation expenses and contingent loss in connection with a litigation. The Company believes that the non-GAAP financial measures provide investors with another method for assessing VisionChina Media's operating results in a manner that is focused on the performance of its ongoing operations. Readers are cautioned not to view non-GAAP results on a stand-alone basis or as a substitute for results under GAAP, or as being comparable to results reported or forecasted by other companies. The Company believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing the performance of VisionChina Media's liquidity and when planning and forecasting future periods. The Company computes its non-GAAP financial measures using the same consistent method from quarter to quarter.

Safe Harbor Statement

This press release contains forward-looking statements. These statements constitute "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will", "expects", "anticipates", "future", "intends", "plans", "believes", "estimates" and similar statements. Among other things, the quotations from management in this press release contain forward-looking statements. Such statements involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Further information regarding these and other risks is included in the Company's filings with the U.S. Securities and Exchange Commission, including its registration statement on Form F-1 and its annual report on Form 20-F. The Company does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law.

For investor and media inquiries, please contact:

In China:

Ms. Shuning Yi Investor Relations Department VisionChina Media Inc. Tel: +86-134-2090-9426 E-mail: shuning.yi@visionchina.cn

In the United States:

The Piacente Group, Inc. Mr. Don Markley Tel: +1-212-481-2050 E-mail: visionchina@tpg-ir.com

[1]

Non-GAAP net income attributable to VisionChina Media shareholders is a non-GAAP financial measure, which is defined as net income attributable to VisionChina Media shareholders excluding share-based compensation expenses and contingent loss in connection with a litigation.

VISIONCHINA MEDIA INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousand U.S. dollars)

June 30, 2015

December 31, 2014

(Unaudited)

(Note 1)

ASSETS

Current Assets:

Cash and cash equivalents

21,067

19,485

Restricted cash

1,314

488

Accounts receivable, net

38,056

36,927

Amounts due from related parties

1,820

2,467

Prepaid expenses and other current assets

19,544

20,157

Total current assets

81,801

79,524

Non-current Assets:

Fixed assets, net

10,414

6,471

Intangible assets

334

360

Investments under equity method

8,282

7,585

Other investments

3,151

3,126

Long-term prepayments and deposits

3,991

4,101

Restricted cash

328

1,140

Total non-current assets

26,500

22,783

TOTAL ASSETS

108,301

102,307

LIABILITIES AND EQUITY

Current Liabilities:

Short-term bank loans

14,781

13,847

Accounts payable

8,521

6,970

Amounts due to related parties

1,324

1,177

Convertible note-maturity within one year

9,000

4,000

Derivative instrument-embedded conversion option

3,278

3,399

Accrued expenses and other current liabilities

33,667

32,148

Total current liabilities

70,571

61,541

Non-current Liabilities:

Convertible promissory notes - maturity over one year

46,448

51,019

Total non-current liabilities

46,448

51,019

Total liabilities

117,019

112,560

Equity:

Common shares

10

10

Additional paid-in capital

350,693

344,083

Accumulated deficit

(403,809)

(395,183)

Accumulated other comprehensive income

39,898

39,580

Total VisionChina Media Inc. shareholders' equity

(13,208)

(11,510)

Noncontrolling interest

4,490

1,257

Total deficit

(8,718)

(10,253)

TOTAL LIABILITIES AND EQUITY

108,301

102,307

Note 1: Information extracted from the audited consolidated financial statements included in the Company's 2014 annual report on Form 20-F filed with the Securities and Exchange Commission on April 30, 2015 and rounded to thousand of U.S. dollars.

VISIONCHINA MEDIA INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in thousand U.S. Dollars, except number of shares and per share data)

For three months ended

June 30, 2015

March 31, 2015

June 30, 2014

(Unaudited)

(Unaudited)

(Unaudited)

Revenues:

Advertising service revenue

22,160

15,259

30,351

Other revenue

1,010

62

118

Total revenues

23,170

15,321

30,469

Cost of revenues:

Advertising service cost

(16,899)

(16,586)

(22,187)

Other cost

(1,030)

(553)

(111)

Total cost of revenues

(17,929)

(17,139)

(22,298)

Gross profit/(loss)

5,241

(1,818)

8,171

Operating expenses:

Selling and marketing expenses

(3,378)

(3,873)

(3,745)

General and administrative expenses

(1,384)

(1,652)

(3,217)

Research and development expenses

(292)

(268)

-

Total operating expenses

(5,054)

(5,793)

(6,962)

Share of profit/(loss) from equity method investees

308

325

(49)

Government grant

45

22

608

Dividend income from cost method investments

-

-

255

Operating profit/(loss)

540

(7,264)

2,023

Interest income

27

26

73

Interest expense

(1,490)

(1,400)

(1,167)

Other expenses

454

(16)

1,515

Net (loss)/profit before income taxes

(469)

(8,654)

2,444

Income tax

-

-

(47)

Net (loss)/profit

(469)

(8,654)

2,397

Net (loss)/profit attributable to noncontrolling interest

315

182

24

Net (loss)/profit attributable to VisionChina Media Inc. shareholders

(154)

(8,472)

2,421

Net (loss)/profit per share:

Basic

(0.00)

(0.08)

0.02

Diluted

(0.00)

(0.08)

0.02

Ne (loss)/profit per ADS (1):

Basic

(0.03)

(1.66)

0.48

Diluted

(0.03)

(1.66)

0.42

Weighted average number of shares used in computation of net (loss)/profit per share:

Basic

102,121,144

102,121,144

101,572,004

Diluted

102,121,144

102,121,144

154,511,899

Weighted average number of ADS used in computation of net (loss)/profit per ADS:

Basic

5,106,057

5,106,057

5,078,600

Diluted

5,106,057

5,106,057

7,725,595

Share-based compensation expenses during the related periods included in:

Cost of revenues

(11)

(15)

(5)

Selling and marketing expenses

(1)

(2)

(3)

General and administrative expenses

(31)

(47)

(42)

Total

(43)

(64)

(50)

Reconciliation from GAAP net (loss)/profit attributable to VisionChina Media Inc. shareholders to Adjusted Non-GAAP net (loss)/profit attributable to VisionChina Media Inc. shareholders:

Net (loss)/profit attributable to VisionChina Media Inc. shareholders (GAAP)

(154)

(8,472)

2,421

Add back share-based compensation expenses

43

64

50

Add back contingent loss in connection with a litigation

-

-

-

Net (loss)/profit attributable to VisionChina Media Inc. shareholders (Non-GAAP)

(111)

(8,408)

2,471

Note 1: ADS amounts adjusted for a change in the ratio of the Company's American Depositary Shares ("ADSs") to common shares ("Shares") from 1:1 to 1:20 ("Ratio Change"), effective as of December 12, 2012.

SOURCE VisionChina Media Inc.



RELATED LINKS

http://www.visionchina.cn