VisionChina Media Inc. Announces Third Quarter 2015 Results

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

Nov 23, 2015, 16:15 ET from VisionChina Media Inc.

BEIJING, Nov. 23, 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 third quarter ended September 30, 2015.

Mr. Limin Li, VisionChina Media's Chairman and Chief Executive Officer, commented, "As the leading free Wi-Fi service provider of China's urban mass transportation system, we are pleased to see the number of registered users on our Wi-Fi network grow to nearly 10 million. Looking ahead, we remain committed to providing a high quality free Wi-Fi service for the commuters, with a focus on our in-depth Big Data initiatives for China's urban mass transit system.  In November, we announced our partnership with the Chinese Academy of Sciences (CAS) to develop an integrated Big Data management platform, which allows us to analyze the user behaviors and preferences of our large user base. By combining our strong research and development capabilities with the significant resources and experience from CAS, we remain focused on continually improving our service quality and user experience, while achieving the full value of our platform. "

Mr. Stanley Wang, VisionChina Media's Chief Financial Officer, added, "Under our recently implemented cost control initiatives, our subway business for the third quarter of 2015 achieved profitable levels, which gives us the confidence to extend these successful initiatives to additional business segments and improve the margins of our bus business. As the number of registered users for our Wi-Fi service continued to grow rapidly in the third quarter of 2015, we look forward to further growing our Wi-Fi business and capitalizing on future growth opportunities."

As of the date of this press release, VisionChina Media, through its consolidated affiliate Qianhai Mobile, has secured exclusive concession rights for bus Wi-Fi services in 30 cities across China, including Shanghai, Shenzhen, Guangzhou and Tianjin, covering approximately 80,000 buses. Currently, Qianhai Mobile provides free Wi-Fi Internet services on over 30,000 buses under the brand name "VIFI," with approximately 10 million registered users.

Third Quarter 2015 Results

VisionChina Media's total revenues were $23.2 million in the third quarter of 2015, representing a decrease of 21.6% from $29.7 million in the third quarter of 2014, and a slight increase of 0.3% from $23.2 million in the second quarter of 2015.

Total broadcasting hours in the third quarter of 2015 were 32,340 hours, compared to 37,978 hours in the third quarter of 2014 and 31,988 hours in the second quarter of 2015.

In the third quarter of 2015, the Company sold a total of 207,532 advertising minutes in its network, compared to 363,927 advertising minutes in the third quarter of 2014, and 299,204 advertising minutes in the second quarter of 2015.

The Company sold an average of 6.42 advertising minutes per broadcasting hour in the third quarter of 2015, compared to 9.58 advertising minutes per broadcasting hour in the third quarter of 2014 and 9.35 advertising minutes per broadcasting hour in the second quarter of 2015.

During the third quarter of 2015, 257 advertisers purchased advertising time on the Company's advertising network, either directly or through advertising agents, compared to 312 advertisers in the third quarter of 2014, and 245 advertisers in the second quarter of 2015.

Media cost, which is the most significant component of advertising service cost, was $15.5 million in the third quarter of 2015, a decrease of 18.1% from $18.9 million in the third quarter of 2014 and an increase of 16.1% from $13.3 million in the second quarter of 2015.The quarter-over-quarter increase was mainly due to the increased cost from non-exclusive operating contracts.

Gross profit in the third quarter of 2015 was $3.2 million, compared to $7.6 million in the third quarter of 2014 and $5.2 million in the second quarter of 2015.

Advertising service gross margin was 13.6% in the third quarter of 2015, compared to 25.4% in the third quarter of 2014 and 23.7% in the second quarter of 2015.

Selling and marketing expenses were $3.8 million in the third quarter of 2015, a decrease of 16.0% from $4.5 million in the third quarter of 2014, and an increase of 12.0% from $3.4 million in the second quarter of 2015. Selling and marketing expenses accounted for 16.6% of the Company's advertising service revenue in the third quarter of 2015, compared to 15.2% in the third quarter of 2014 and 15.2% in the second quarter of 2015.

General and administrative expenses were $2.6 million in the third quarter of 2015, a decrease of 22.3% from $3.3 million in the third quarter of 2014, and an increase of 86.6% from $1.4 million in the second quarter of 2015. The quarter-over-quarter increase was primarily due to higher bad debt allowance.

Research and development expenses were $0.4 million in the third quarter of 2015, representing costs related to the Company's Wi-Fi development activities.

Operating loss was $4.3 million in the third quarter of 2015, compared to an operating loss of $1.5 million in the third quarter of 2014, and an operating profit of $0.5 million in the second quarter of 2015.

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

Net loss attributable to VisionChina Media shareholders (GAAP) was $5.0 million in the third quarter of 2015, compared to a net loss attributable to VisionChina Media shareholders (GAAP) of $2.9 million in the third quarter of 2014, and a net loss attributable to VisionChina Media shareholders (GAAP) of $0.2 million in the second quarter of 2015.

Basic and diluted net loss per ADS (GAAP) were $0.98 in the third quarter of 2015.

The Company's non-GAAP financial measure, net loss attributable to VisionChina Media shareholders excluding share-based compensation expenses, was $5.0 million in the third quarter of 2015, compared to a non-GAAP net loss of $2.8 million in the third quarter of 2014, and a non-GAAP net loss of $0.1 million in the second quarter of 2015.

As of September 30, 2015, the Company had cash and cash equivalents of $10.5 million, compared to $19.5 million as of December 31, 2014. Net cash used in operating activities was $3.3 million in the third quarter of 2015, compared to net cash provided by operating activities of $2.8 million in the second quarter of 2015.

Depreciation and amortization was $0.3 million and capital expenditures were $1.8 million in the third quarter of 2015.

Business Outlook

For the fourth quarter of 2015, the Company expects to generate advertising service revenue in the range of $16.0 million to $16.5 million.

The guidance is based on an exchange rate of RMB6.3538 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 November 23, 2015 (9:00 a.m. Beijing/Hong Kong Time on November 24, 2015).

Dial-in details for the earnings conference call are as follows:

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 November 30, 2015.

U.S. Toll Free: +1-877-344-7529 International Toll: +1-412-317-0088 Replay Access Code: 10076341

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 September 30, 2015, VisionChina Media's advertising network included approximately 97,757 digital television displays on mass transportation systems in 18 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

 

VISIONCHINA MEDIA INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousand U.S. dollars)

September 30, 2015

June 30, 2015

December 31, 2014

(Unaudited)

(Unaudited)

(Note 1)

ASSETS 

Current Assets: 

Cash and cash equivalents

10,483

21,067

19,485

Restricted cash

3,735

1,314

488

Accounts receivable, net

36,819

38,056

36,927

Amounts due from related parties

1,872

1,820

2,467

Prepaid expenses and other current assets

19,487

19,544

20,157

Total current assets 

72,396

81,801

79,524

Non-current Assets:

Fixed assets, net 

13,924

10,414

6,471

Intangible assets 

307

334

360

Investments under equity method 

8,006

8,282

7,585

Other investments 

2,224

3,151

3,126

Long-term prepayments and deposits

4,291

3,991

4,101

Restricted cash

315

328

1,140

Total non-current assets 

29,067

26,500

22,783

TOTAL ASSETS 

101,463

108,301

102,307

LIABILITIES AND EQUITY  

Current Liabilities:

Short-term bank loans

11,804

14,781

13,847

Accounts payable

11,144

8,521

6,970

Amounts due to related parties

1,105

1,324

1,177

Convertible note-maturity within one year

55,668

9,000

4,000

Derivative instrument-embedded conversion option

3,215

3,278

3,399

Accrued expenses and other current liabilities

35,065

33,667

32,148

Total current liabilities

118,001

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 

118,001

117,019

112,560

Equity:

Common shares

10

10

10

Additional paid-in capital

350,735

350,693

344,083

Accumulated deficit

(408,815)

(403,809)

(395,183)

Accumulated other comprehensive income

37,740

39,898

39,580

Total VisionChina Media Inc. shareholders' equity

(20,330)

(13,208)

(11,510)

Noncontrolling interest

3,792

4,490

1,257

Total deficit

(16,538)

(8,718)

(10,253)

TOTAL LIABILITIES AND EQUITY

101,463

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

September 30, 2015

June 30, 2015

September 30, 2014

(Unaudited)

(Unaudited)

(Unaudited)

Revenues:

  Advertising service revenue 

23,016

22,160

29,569

  Other revenue

223

1,010

82

Total revenues

23,239

23,170

29,651

Cost of revenues:

  Advertising service cost 

(19,879)

(16,899)

(22,068)

  Other cost

(182)

(1,030)

(33)

Total cost of revenues

(20,061)

(17,929)

(22,101)

Gross profit

3,178

5,241

7,550

Operating expenses

  Selling and marketing expenses

(3,782)

(3,378)

(4,504)

  General and administrative expenses

(2,583)

(1,384)

(3,324)

  Research and development expenses

(405)

(292)

-

Total operating expenses 

(6,770)

(5,054)

(7,828)

Share of profit from equity method investees

70

308

163

Government grant

12

45

438

Impairment loss of a cost method investee

(808)

-

-

Other operating expense

-

-

(1,832)

Operating (loss)/profit

(4,318)

540

(1,509)

Interest income

44

27

100

Interest expense

(1,459)

(1,490)

(1,508)

Other expenses

(34)

454

57

Fair value change through profit and loss

63

-

-

Net loss before income taxes

(5,704)

(469)

(2,860)

Income tax

-

-

(43)

Net loss

(5,704)

(469)

(2,903)

Net loss attributable to noncontrolling interest

698

315

36

Net loss attributable to VisionChina Media Inc. shareholders

(5,006)

(154)

(2,867)

Net loss per share:

  Basic

(0.05)

(0.00)

(0.03)

  Diluted

(0.05)

(0.00)

(0.03)

Net loss per ADS (1):

  Basic

(0.98)

(0.03)

(0.56)

  Diluted

(0.98)

(0.03)

(0.56)

Weighted average number of shares used in computation of net loss per share:

  Basic

102,121,144

102,121,144

101,572,004

  Diluted

102,121,144

102,121,144

101,572,004

Weighted average number of ADS  used in computation of net loss per ADS:

  Basic

5,106,057

5,106,057

5,078,600

  Diluted

5,106,057

5,106,057

5,078,600

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

  Cost of revenues

(10)

(11)

(5)

  Selling and marketing expenses

(1)

(1)

(2)

  General and administrative expenses

(31)

(31)

(42)

Total

(42)

(43)

(49)

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

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

(5,006)

(154)

(2,867)

  Add back share-based compensation expenses

42

43

49

  Add back contingent loss in connection with a litigation

-

-

-

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

(4,964)

(111)

(2,818)

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