SHANGHAI, March 17 /PRNewswire-Asia/ -- Focus Media Holding Limited (Nasdaq: FMCN), China's largest digital media group, today announced its unaudited financial results for the fourth quarter and full year ended December 31, 2009.
Basis of Presentation
The results of the internet business have been restated in this earning release to reflect the disposal of certain subsidiaries which have been classified as discontinued operations for all periods presented.
Highlights for Fourth Quarter 2009:
-- Total net revenue for fourth quarter 2009 was $144.3 million, of which
the aggregate net revenue for the LCD display network, in-store network
and poster frame network was $98.3 million, surpassing the Company's
previous guidance of $92 million and the aggregate net revenue for the
movie theatre and outdoor traditional billboard network and Internet
advertising services was $46.0 million, surpassing the Company's
previous guidance of $39 million.
-- GAAP net loss attributable to Focus Media was $52.5 million or a loss
of $0.39 per fully diluted ADS, compared to net loss attributable to
Focus Media of $127.6 million for the third quarter of 2009 or a loss
of $0.99 per fully diluted ADS and net loss attributable to Focus Media
of $802.5 million for the fourth quarter of 2008 or a loss of $6.24 per
fully diluted ADS.
-- Non-GAAP net income attributable to Focus Media for the fourth quarter
of 2009 was $34.7 million or an income of $0.26 per ADS, compared to
non-GAAP net income attributable to Focus Media of $7.9 million for the
third quarter of 2009 or an income of $0.06 per ADS and non-GAAP net
income of $50.0 million for the fourth quarter of 2008 or an income of
$0.39 per ADS.
-- Net cashflow from operations in the fourth quarter of 2009 was
$72.3 million, an increase of 96% from $ 36.8 million in the third
quarter of 2009.
Highlights for Full Year 2009:
-- Total net revenue for full year 2009 was $505.0 million, declining 21%
from $642.3 million for full year 2008, substantially due to
unfavorable macro-economic condition and strategic reorganization
related to several lines of our businesses. The aggregate net revenue
for the LCD display network, in-store network and poster frame network
for full year 2009 was $338.1 million, declining 25% from
$450.6 million for full year 2008. The aggregate net revenue for the
movie theatre and outdoor traditional billboard network and Internet
advertising services was $166.9 million, declining 13% from
$191.7 million for full year 2008.
-- GAAP net loss attributable to Focus Media was $208.8 million for full
year 2009 or a loss of $1.61 per fully diluted ADS, compared to net
loss attributable to Focus Media of $770.7 million for full year 2008,
or a loss of $5.98 per fully diluted ADS.
-- Non-GAAP net income attributable to Focus Media for full year 2009 was
$89.4 million or an income of $0.69 per ADS, compared to non-GAAP net
income attributable to Focus Media of $221.9 million for full year 2008
or an income of $1.72 per ADS.
Highlights for Balance Sheet and Cash Flow Results of Fourth Quarter and Full Year 2009:
-- Cash and cash equivalents was $568.2 million as of December 31, 2009,
including the subscription price of $142.4 million received from
Chairman and CEO Mr. Jason Jiang for purchase of 75,000,000 newly
issued shares in our Company, and representing an increase of 48% from
$383.1 million as of September 30, 2009.
-- Net accounts receivable for the LCD display network, in-store network
and poster frame network was $96.1 million as of December 31, 2009, a
decline of 16% from $114.3 million as of September 30, 2009. Days sales
outstanding on a rolling basis was 88 days in the fourth quarter of
2009 versus 118 days for the third quarter of 2009.
-- Net accounts receivable for the movie theatre and outdoor traditional
billboard network and Internet advertising services was $76.6 million
as of December 31, 2009.
-- Net cashflow from operations in full year 2009 was $160.7 million, as
compared to $168.4 million in full year 2008.
-- Capital expenditures were $1.0 million and $10.7 million for the fourth
quarter of 2009 and full year 2009 respectively.
-- Earn-out payments related to historical acquisitions paid in the fourth
quarter of 2009 were $19.3 million, of which $10.7 million was
attributable to the poster frame network and LCD display network and
$8.6 million was attributable to the traditional outdoor billboard and
internet businesses. For full year 2009, total earn-out payments
related to historical acquisitions paid were $92.4 million, of which
$62.3 million was attributable to the poster frame network and LCD
display network and $30.1 million was attributable to traditional
outdoor billboard and internet businesses.
Jason Jiang, Chairman and CEO of Focus Media said, "After going through a year of restructuring, Focus Media has substantially resolved its past problems and re-entered on to a path of sustainable growth. At the same time, the Chinese advertising market recovery has presented us with very attractive development opportunities. We believe we are well positioned to achieve meaningful cash flow and earnings growth in 2010. Starting in 2010, Focus Media will focus on dedicating our resources to developing networks in lower tier cities for our LCD, Poster frame as well as in-store networks. We believe the investment we are making in lower tier cities will help to lay the foundation of growth for Focus Media over the next three to five years. Separately, we will offer incentives to motivate internet and outdoor billboard management so as to promote sustainable long term development of the respective business segments."
Kit Low, CFO added, "Our fourth quarter 2009 results demonstrate the robust execution capability of the Focus Media team as well as the significant positive operating leverage of the Focus Media business model. In the fourth quarter 2009 the Company generated a free cash flow of $43.0 million on $34.7 million of non-GAAP net income with operating cashflow of $72.3 million, versus an investing cashflow of $29.3 million. We expect this trend of positive cashflow generation to continue as the Company leverages the 2010 uptrend of the Chinese advertising market."
Fourth Quarter 2009 financial results
Advertising net revenue from the LCD display network was $64.1 million for the fourth quarter of 2009, an increase of 14% from $56.0 million for the third quarter of 2009 and an increase of 8% from $59.3 million for the fourth quarter of 2008.
Advertising net revenue from the poster frame network was $26.8 million for the fourth quarter of 2009, an increase of 21% from $22.1 million for the third quarter of 2009 but a decline of 32% from $39.2 million for the fourth quarter of 2008.
Advertising net revenue from the in-store network was $7.4 million for the fourth quarter of 2009, slightly decreasing from $7.6 million for the third quarter of 2009 and decreasing by 22% from $9.5 million for the fourth quarter of 2008.
As of December 31, 2009, the total installed base of LCD displays in our LCD display network was 131,006 nationwide, including 125,595 displays through our directly owned networks, and 5,411 displays through our regional distributors, as compared to 130,890 as of September 30, 2009. The total number of non-digital frames available for sale in our poster frame network was 225,104 as of December 31, 2009, as compared to 225,762 as of September 30, 2009. In addition, as of December 31, 2009, we had 35,972 digital frames installed in our poster frame network, as compared to 36,539 as of September 30, 2009. The total number of displays installed in our in-store network was 44,517 as of December 31, 2009, as compared to 45,195 as of September 30, 2009.
Advertising net revenue from the movie theater and traditional outdoor billboard network was $12.6 million for the fourth quarter of 2009, relatively constant compared to $12.5 million for the third quarter of 2009 and a 42% decrease compared to $21.6 million for the fourth quarter of 2008 due to restructuring in traditional outdoor billboard network in the third quarter of 2009.
Internet advertising service net revenue was $33.4 million in the fourth quarter of 2009, increased by 18% as compared to $28.2 million for the third quarter of 2009, and 25% as compared to $26.7 million for the fourth quarter of 2008.
Non-GAAP gross profit for the LCD display network for the fourth quarter of 2009 was $50.6 million, representing an increase of 50% from $33.7 million for the third quarter of 2009 and an increase of 15% from $44.0 million for the fourth quarter of 2008.
Non-GAAP gross profit for the poster frame network for the fourth quarter of 2009 was $10.8 million, representing a significant increase over $1.7 million for the third quarter of 2009 but a decrease of 55% from $23.8 million for the fourth quarter of 2008.
Non-GAAP gross profit for the in-store network for the fourth quarter of 2009 was $5.0 million, compared to non-GAAP gross loss of $3.3 million for the third quarter of 2009 primarily due to the Company's settling of a rental dispute in the fourth quarter and releasing the corresponding rental liabilities accrued in the previous periods and compared to non-GAAP gross profit of $0.5 million for the fourth quarter of 2008 as the Company managed to lower rental costs in the business.
Non-GAAP gross profit for the movie theater and traditional outdoor billboard networks for the fourth quarter of 2009 was $2.5 million, representing a 32% decline from $3.7 million for the third quarter of 2009 and a 66% decline from $7.3 million for the fourth quarter of 2008, mainly due to the restructuring in the traditional outdoor billboard network as one subsidiary was disposed in late third quarter of 2009.
Non-GAAP gross profit from our Internet advertising services for the fourth quarter of 2009 was $6.0 million, a slight increase from $5.6 million for the third quarter of 2009 and from $5.3 million for the fourth quarter of 2008.
Non-GAAP operating expense for the fourth quarter of 2009 was $33.9 million, increasing by 14% from $29.8 million for the third quarter of 2009 and 7% from $31.8 million for the fourth quarter of 2008.
Business Outlook for First Quarter 2010
The Company provides the following guidance with respect to the first quarter ending March 31, 2010:
Net revenues for LCD display networks, in-store networks and poster frame networks are expected to be in the range of $78-80 million, the mid-point of which would represent year-on-year growth of 23%. Net revenues for the movie theatre and traditional outdoor billboard and internet advertising services are expected to be in the range of $37-39 million. Company non-GAAP net income is expected to be in the range of $20-23 million.
Based on the existing business outlook, the Company expects earn-out payment remaining in 2010 to be no more than $40 million.
Announced Share Repurchase Program
On Feb 2, 2010, Focus Media announced that its board of directors has approved a share repurchase program up to $200 million. The Company expects to implement this share repurchase program over the course of the next 12 months post announcement, in a manner consistent with market conditions and the interest of the shareholders and in compliance with the Company's securities trading policy. Focus Media's board of directors will review the share repurchase program periodically, and may authorize adjustment of its terms and size accordingly. Focus Media plans to fund repurchases made under this program from its available cash balance.
Management Buy-Out in Internet Division
Certain Allyes employees and management and directors and certain members of the Company's management and directors recently entered into a definitive agreement with the Company and Allyes in January 2010 to buy-out an aggregate 38% interest in Allyes from the Company. Pursuant to the terms of the agreements, the purchasing Allyes and Company management members paid an aggregate $13.3 million for a 38% interest of Allyes, when taking into account offshore and onshore transactions. The purchase price to management took into account various factors including the disposition of various smaller Internet divisions during the fourth quarter of 2009 and the results of an independent third-party valuation report, however the Company is currently assessing the accounting implications of the transaction. The transaction was approved by all independent directors on the board. This transaction was part of initiatives being taken by the Company to incentivize management to enhance the future business model of Allyes and thereby to seek long term sustainable growth for the company and investors.
USE OF NON-GAAP FINANCIAL MEASURES
In addition to Focus Media's consolidated financial results under GAAP, the Company also provides non-GAAP financial measures, including non-GAAP gross profit, non-GAAP operating expenses, non-GAAP operating profit (loss) and non-GAAP net income, all excluding share-based compensation expenses, amortization of acquired intangible assets, loss from disposal of previously acquired subsidiaries, impairment charges of certain assets, including acquired intangible assets, goodwill, impairment and termination charges related to ceasing expansion of digital poster frame networks and boat-based advertising platform, write-off of receivables from ex-shareholders of disposed business and one-off charges from expensing IPO expenditures as a result of termination of IPO process of Allyes. The Company believes that these non-GAAP financial measures provide investors with another method for assessing Focus 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, and should refer to the reconciliation of GAAP results with non-GAAP results in the attached financial information. The Company believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing the performance of Focus Media and when planning and forecasting future periods. The Company computes its non-GAAP financial measures using the same consistent method from quarter to quarter. The accompanying tables have more details on the GAAP financial measures that are most directly comparable to non-GAAP financial measures and the related reconciliation between these financial measures.
Focus Media Holding Ltd.
Reconciliation of GAAP to non-GAAP
(U.S. Dollar in thousands, except percentages, share and per-share data)
(Unaudited)
Three months ended December 31, 2009
GAAP (1) (2) (3)
Gross Profit
LCD display network 49,498 285 839 --
Poster Frame network 9,148 -- 1,646 --
In-store network 5,001 -- -- --
Internet advertising 5,778 -- 207 --
Movie Theater & Outdoor Billboard
network 2,046 -- 443 --
Total Gross Profit 71,471 285 3,135 --
Operating Expense 86,258 (34,779) (1,254) --
Operating (loss) profit (14,787) 35,064 4,389 --
Net income (loss) attributable to
Focus Media
(52,499) 35,064 4,672 31,103
(4) (5) (6) Non-
GAAP
Gross Profit
LCD display network -- -- -- 50,622
Poster Frame network -- -- -- 10,794
In-store network -- -- -- 5,001
Internet advertising -- -- -- 5,985
Movie Theater & Outdoor Billboard
network -- -- -- 2,489
Total Gross Profit -- -- -- 74,891
Operating Expense (14,027) (4,351) 2,067 33,914
Operating (loss) profit 14,027 4,351 (2,067) 40,977
Net income (loss) attributable to
Focus Media
14,027 4,351 (2,067) 34,651
(1). Share-based compensation, of which $ 14.6 million was attributable to
LCD display network, poster frame network and in-store network and
$20.5 million was attributable to cancellation of stock options in
internet business.
(2). Amortization of acquired intangible assets.
(3). Loss from impairment and disposal of previously acquired subsidiaries,
all attributable to internet business.
(4). Impairment charges of goodwill as a result of earn-out payments in
poster frame business.
(5). Write-off of receivables from ex-shareholders of disposed business.
(6). Settlement of disputed liabilities in previously disposed wireless
business.
Three months ended September 30, 2009
GAAP (1) (2)
Gross Profit
LCD display network 17,177 306 3,607
Poster Frame network (30,420) -- 5,131
In-store network (3,844) -- --
Internet advertising (2,964) -- 393
Movie Theater & Outdoor Billboard
network 3,001 -- 663
Total Gross Profit (17,050) 306 9,794
Operating Expense 105,234 (8,467) (2,969)
Operating profit (loss) (122,284) 8,773 12,763
Net income (loss) attributable to Focus
Media (127,598) 8,773 13,865
(3) (4) (5) Non-
GAAP
Gross Profit
LCD display network -- 3,169 9,462 33,721
Poster Frame network -- -- 26,983 1,694
In-store network -- -- 516 (3,328)
Internet advertising -- 8,185 -- 5,614
Movie Theater & Outdoor Billboard
network -- -- -- 3,664
Total Gross Profit -- 11,354 36,961 41,365
Operating Expense (16,649) (45,456) (1,872) 29,821
Operating profit (loss) 16,649 56,810 38,833 11,544
Net income (loss) attributable to Focus
Media 25,944 57,300 29,593 7,877
(1). Share-based compensation.
(2). Amortization of acquired intangible assets.
(3). Loss from disposal of previously acquired subsidiaries, of which loss
from disposal of subsidiaries was $3.7 million, loss from partial
disposal of equity interests in subsidiaries was $14.9 million and
loss from impairment of certain other assets was $7.3 million.
(4). Impairment charges of certain assets, including acquired intangible
assets and goodwill.
(5). Impairment and termination charges related to ceasing expansion of
digital poster frame networks and boat-based advertising platform.
Three months ended December 31, 2008
GAAP (1) (2) (3)
Gross Profit
LCD display network 27,217 314 865 --
Poster Frame network 21,572 -- 2,257 --
In-store network (3,397) -- 897 (248)
Internet advertising 4,483 -- 814 --
Movie Theater & Outdoor Billboard
network 6,339 -- 976 --
`Total Gross Profit 56,214 314 5,809 (248)
Operating Expense 844,395 (12,330) (3,333) (193,822)
Operating profit (loss) (788,181) 12,644 9,142 193,574
Net income (loss) attributable to
Focus Media (802,490) 12,644 10,611 208,238
(4) (5) (6) Non-GAAP
Gross Profit
LCD display network -- 15,574 -- 43,970
Poster Frame network -- -- -- 23,829
In-store network -- 3,290 -- 542
Internet advertising -- -- -- 5,297
Movie Theater & Outdoor Billboard
network -- -- -- 7,315
`Total Gross Profit -- 18,864 -- 80,953
Operating Expense (600,878) -- (2,200) 31,832
Operating profit (loss) 600,878 18,864 2,200 49,121
Net income (loss) attributable to
Focus Media 599,965 18,864 2,200 50,032
(1). Share-based compensation.
(2). Amortization of acquired intangible assets.
(3). Loss from disposal of previously acquired subsidiaries.
(4). Impairment charges of certain assets, including acquired intangible
assets and goodwill.
(5). Impairment charges of fixed assets.
(6). Write-off of receivables from ex-shareholders of disposed business.
Twelve months ended
December 31, 2009
GAAP (1) (2) (3) (4)
Gross Profit
LCD display network 133,042 1,504 4,446 -- 3,168
Poster Frame network 3,561 -- 6,778 -- --
In-store network 6,176 -- 15 -- --
Internet advertising 9,150 -- 2,239 -- 8,746
Movie Theater & Outdoor
Billboard network 13,972 -- 2,945 -- --
Total Gross Profit 165,901 1,504 16,423 -- 11,914
Operating Expense 320,551 (61,153) (6,563) (17,861) (94,775)
Operating profit (loss) (154,650) 62,657 22,986 17,861 106,689
Net income (loss)
attributable to Focus Media (208,762) 62,657 27,279 58,259 113,046
(5) (6) (7) (8) Non-GAAP
Gross Profit
LCD display network 9,462 -- -- -- 151,622
Poster Frame network 26,983 -- -- -- 37,322
In-store network 516 -- -- -- 6,707
Internet advertising -- -- -- -- 20,135
Movie Theater & Outdoor
Billboard network -- -- -- -- 16,917
Total Gross Profit 36,961 -- -- -- 232,703
Operating Expense (1,872) (6,879) (2,466) 2,067 131,049
Operating profit (loss) 38,833 6,879 2,466 (2,067) 101,654
Net income (loss)
attributable to Focus Media 29,593 6,879 2,466 (2,067) 89,350
(1). Share-based compensation, of which $34.7 million was attributable to
LCD display network, poster frame network and in-store network and
$28.0 million was attributable to internet division.
(2). Amortization of acquired intangible assets.
(3). Loss from disposal of previously acquired subsidiaries.
(4). Impairment charges of certain assets, including acquired intangible
assets and goodwill.
(5). Impairment charges of fixed assets.
(6). Write-off of receivables from ex-shareholders of disposed business.
(7). One-off charges from expensing IPO expenditures as a result of
termination of IPO process of Allyes.
(8). Settlement of disputed liabilities in previously disposed wireless
business
Twelve months ended December 31, 2008
GAAP (1) (2) (3)
Gross Profit
LCD display network 163,537 1,476 3,711 --
Poster Frame network 86,935 -- 9,571 --
In-store network (1,115) -- 3,533 (248)
Internet advertising 25,510 -- 3,482 --
Movie Theater & Outdoor Billboard
network 20,235 -- 3,845 --
Total Gross Profit 295,102 1,476 24,142 (248)
Operating Expense 964,185 (41,023) (11,053) (193,822)
Operating profit (loss) (669,083) 42,499 35,195 193,574
Net income (loss) attributable to
Focus Media (770,688) 42,499 40,980 288,121
(4) (5) (6) Non-GAAP
Gross Profit
LCD display network -- 15,574 -- 184,298
Poster Frame network -- -- -- 96,506
In-store network -- 3,290 -- 5,460
Internet advertising -- -- -- 28,992
Movie Theater & Outdoor Billboard
network -- -- -- 24,080
Total Gross Profit -- 18,864 -- 339,336
Operating Expense (600,878) -- (2,200) 115,209
Operating profit (loss) 600,878 18,864 2,200 224,127
Net income (loss) attributable to
Focus Media 599,965 18,864 2,200 221,941
(1). Share-based compensation.
(2). Amortization of acquired intangible assets.
(3). Loss from disposal of previously acquired subsidiaries.
(4). Impairment charges of certain assets, including acquired intangible
assets and goodwill.
(5). Impairment charges of fixed assets.
(6). Write-off of receivables from ex-shareholders of disposed business.
CONFERENCE CALL
The Company will host a conference call to discuss the fourth quarter and full year 2009 results at 9:00 p.m. U.S. Eastern Time on March 16, 2010 (6:00 p.m. U.S. Pacific Time on March 16, 2010 and 9:00 a.m. Beijing/Hong Kong Time on March 17, 2010). The dial-in details for the live conference call are set forth below: U.S. Toll Free Number +1.800.510.0219, Hong Kong dial-in number +852.3002.1672, International dial-in number +1.617.614.3451; Pass code: 27499071.
A replay of the call will be available from March 16, 2010 12:00 pm until March 24, 2010 (US Eastern Time). The dial-in details for the replay are set forth below: U.S. Toll Free Number +1-888-286-8010, International dial-in number +1-617-801-6888; Pass code 19117078. Additionally, a live and archived web cast of this call will be available on the Focus Media web site at http://ir.focusmedia.cn .
SAFE HARBOR: FORWARD-LOOKING STATEMENTS
This press release includes statements that may constitute forward-looking statements made pursuant to the safe harbor provision of the 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. Focus Media may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission on forms 20-F and 6-K., 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. Statements that are not historical facts, including statements about Focus Media's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. 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, risks outlined in Focus Media's filings with the U.S. Securities and Exchange Commission, including its registration statements on Form F-1, F-3 and 20-F, in each case as amended. Focus Media does not undertake any obligation to update any forward-looking statement, except as required under applicable law.
This release is not an offer of securities for sale in the United States. Securities may not be offered or sold in the United States absent registration or an exemption from registration. Any public offering of securities to be made in the United States will be made by means of a prospectus that may be obtained from the issuer or selling security holder and that will contain detailed information about the company and management, as well as financial statements.
ABOUT FOCUS MEDIA HOLDING LIMITED
Focus Media Holding Limited (Nasdaq: FMCN) is China's leading multi- platform digital media company, operating the largest out-of-home advertising network in China using audiovisual digital displays, based on the number of locations and number of flat-panel television displays in our network. Through Focus Media's multi-platform digital advertising network, the company reaches urban consumers at strategic locations and point-of-interests over a number of media formats, including audiovisual television displays in buildings and stores, advertising poster frames and other new and innovative media, such as outdoor light-emitting diode or LED digital billboard and Internet advertising platforms. As of December 31, 2009, Focus Media's digital out-of-home advertising network had approximately 131,000 LCD displays in its LCD display network and approximately 261,000 advertising in-elevator poster and digital frames, installed in over 90 cities throughout China. For more information about Focus Media, please visit our website at http://ir.focusmedia.cn .
Focus Media Holding Limited
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(U.S. Dollars in Thousands)
2009-12-31 2008-12-31
ASSETS
Current assets
Cash and cash equivalents 568,159 142,434
Held-to-maturity investment 29,290 --
Accounts receivable, net 172,752 135,270
Prepaid expenses and other current
assets 24,506 15,117
Deposit paid for acquisition of
subsidiaries 4,860 29,676
Rental deposits 29,640 10,090
Other current assets 4,579 7,938
Assets held-for-sale, current -- 467,046
Total current assets 833,786 807,571
Rental deposits, non-current 1,570 133
Equipment, net 77,661 6,292
Acquired intangible assets, net 51,777 77,713
Goodwill 410,369 30,700
Other long term assets 18,279 10,736
Assets held-for-sale, non-current -- 599,149
Total assets 1,393,442 1,532,294
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable 53,340 67,905
Accrued expenses and other current
liabilities 101,870 61,911
Income taxes payable 27,017 12,622
Amount due to related parties 2,231 15,687
Liabilities held-for-sale, current -- 160,739
Deferred tax liabilities 12,077 --
Total current liabilities 196,535 318,864
Liabilities held-for-sale, non
current -- 1,959
Deferred tax liabilities 5,435 11,581
Total liabilities 201,970 332,404
Shareholders' equity
Ordinary shares 36 32
Additional paid in capital 1,868,172 1,659,833
Accumulated deficit (742,731) (533,969)
Accumulated other comprehensive
income 64,167 71,888
Total shareholders' equity 1,189,644 1,197,784
Noncontrolling interests 1,828 2,106
Total equity 1,191,472 1,199,890
Total liabilities and equity 1,393,442 1,532,294
Focus Media Holding Limited
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(U.S. Dollar in thousands, except Earning per ADS and ADS data)
Three months ended
2009-12-31 2009-09-30 2008-12-31
Revenues
LCD display network 70,660 60,509 65,908
In-store network 8,173 8,450 10,503
Poster Frame network 29,310 24,155 43,021
Movie Theater & Outdoor Billboard
network 12,866 12,802 22,380
Internet advertising 34,863 29,437 28,311
Total gross revenues 155,872 135,353 170,123
Less: Sales taxes 11,524 8,912 13,745
Total net revenue (note) 144,348 126,441 156,378
Cost of revenues
LCD display network 14,623 38,830 32,036
In-store network 2,388 11,490 12,927
Poster Frame network 17,649 52,550 17,655
Movie Theater & Outdoor Billboard
network 10,550 9,486 15,307
Internet advertising 27,667 31,135 22,239
Total cost of revenues 72,877 143,491 100,164
Gross profit (loss) 71,471 (17,050) 56,214
Operating expenses
General and administrative 45,226 19,690 30,013
Selling and marketing 28,416 32,948 27,595
Impairment loss 14,027 37,232 596,069
Other operating expenses (income),
net (1,411) 15,364 190,718
Total operating expenses 86,258 105,234 844,395
Operating loss (14,787) (122,284) (788,181)
Interest income 1,382 1,012 2,303
Loss from continuing operations
before income taxes (13,405) (121,272) (785,878)
Provision for income taxes 5,336 (4,833) 7,066
Net loss from continuing operations (18,741) (116,439) (792,944)
Net loss from discontinued
operations, net of tax (33,434) (8,201) (11,792)
Net loss (52,175) (124,640) (804,736)
Less: Net income(loss) attributable
to noncontrolling interests 324 2,958 (2,246)
Net loss attributable to Focus
Media (52,499) (127,598) (802,490)
Loss per ADS from continuing
operations
-basic (0.14) (0.90) (6.17)
-diluted (0.14) (0.90) (6.17)
Loss per ADS from discontinuing
operations
-basic (0.25) (0.06) (0.09)
-diluted (0.25) (0.06) (0.09)
Loss per ADS
-basic (0.39) (0.99) (6.24)
-diluted (0.39) (0.99) (6.24)
Shares used in calculating basic
loss per ADS 134,562,342 129,308,337 128,607,842
Shares used in calculating diluted
loss per ADS 134,562,342 129,308,337 128,607,842
Year ended
2009-12-31 2008-12-31
Revenues
LCD display network 229,424 267,778
In-store network 33,538 67,038
Poster Frame network 108,526 160,613
Movie Theater & Outdoor Billboard
network 60,544 80,023
Internet advertising 113,183 120,702
Total gross revenues 545,215 696,154
Less: Sales taxes 40,180 53,818
Total net revenue (note) 505,035 642,336
Cost of revenues
LCD display network 75,757 79,589
In-store network 24,170 61,834
Poster Frame network 95,401 59,815
Movie Theater & Outdoor Billboard
network 45,085 56,944
Internet advertising 98,721 89,052
Total cost of revenues 339,134 347,234
Gross profit (loss) 165,901 295,102
Operating expenses
General and administrative 116,216 90,194
Selling and marketing 107,184 95,400
Impairment loss 86,304 596,069
Other operating expenses (income),
net 10,847 182,522
Total operating expenses 320,551 964,185
Operating loss (154,650) (669,083)
Interest income 5,261 7,528
Loss from continuing operations
before income taxes (149,389) (661,555)
Provision for income taxes 9,335 26,785
Net loss from continuing operations (158,724) (688,340)
Net loss from discontinued
operations, net of tax (46,513) (82,498)
Net loss (205,237) (770,838)
Less: Net income(loss) attributable
to noncontrolling interests 3,525 (150)
Net loss attributable to Focus
Media (208,762) (770,688)
Loss per ADS from continuing
operations
-basic (1.22) (5.34)
-diluted (1.22) (5.34)
Loss per ADS from discontinuing
operations
-basic (0.36) (0.64)
-diluted (0.36) (0.64)
Loss per ADS
-basic (1.61) (5.98)
-diluted (1.61) (5.98)
Shares used in calculating basic
loss per ADS 129,735,639 128,880,565
Shares used in calculating diluted
loss per ADS 129,735,639 128,880,565
Note: Details of net revenues by segment are as follows (U.S. Dollars in
thousands):
Three months ended
2009-12-31 2009-09-30 2008-12-31
Gross revenues
LCD display network 70,660 60,509 65,908
In-store network 8,173 8,450 10,503
Poster Frame network 29,310 24,155 43,021
Movie Theater & Outdoor Billboard
network 12,866 12,802 22,380
Internet advertising 34,863 29,437 28,311
Total gross revenues 155,872 135,353 170,123
Less: Sales taxes
LCD display network 6,539 4,502 6,655
In-store network 784 804 973
Poster Frame network 2,513 2,025 3,794
Movie Theater & Outdoor Billboard
network 270 315 734
Internet advertising 1,418 1,266 1,589
Total sales tax 11,524 8,912 13,745
Net revenues
LCD display network 64,121 56,007 59,253
In-store network 7,389 7,646 9,530
Poster Frame network 26,797 22,130 39,227
Movie Theater & Outdoor Billboard
network 12,596 12,487 21,646
Internet advertising 33,445 28,171 26,722
Total net revenues 144,348 126,441 156,378
Year ended
2009-12-31 2008-12-31
Gross revenues
LCD display network 229,424 267,778
In-store network 33,538 67,038
Poster Frame network 108,526 160,613
Movie Theater & Outdoor Billboard
network 60,544 80,023
Internet advertising 113,183 120,702
Total gross revenues 545,215 696,154
Less: Sales taxes
LCD display network 20,625 24,652
In-store network 3,192 6,319
Poster Frame network 9,564 13,863
Movie Theater & Outdoor Billboard
network 1,487 2,844
Internet advertising 5,312 6,140
Total sales tax 40,180 53,818
Net revenues
LCD display network 208,799 243,126
In-store network 30,346 60,719
Poster Frame network 98,962 146,750
Movie Theater & Outdoor Billboard
network 59,057 77,179
Internet advertising 107,871 114,562
Total net revenues 505,035 642,336
FOCUS MEDIA HOLDING LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASHFLOWS
(U.S. Dollar in thousands)
Three months ended Year ended
2009- 2008- 2009- 2008-
12-31 12-31 12-31 12-31
Operating activities:
Net loss (52,175) (804,736) (205,237) (770,838)
Adjustments to reconcile net loss
to net cash provided by operating
activities:
Bad debt provision 5,140 8,597 31,262 15,767
Share-based compensation 35,064 12,768 62,528 42,615
Depreciation and amortization 7,933 9,623 35,450 31,337
Amortization of acquired intangible
assets 4,672 10,611 27,279 40,516
Loss and impairment on disposal of
equity interest of subsidiaries
and certain other assets 39,110 189,879 64,931 282,407
Settlement of disputed liabilities (2,067) -- (2,067) --
Impairment charges for goodwill,
acquired intangible assets and
fixed assets 14,027 634,420 153,369 619,602
Loss on disposal of fixed assets 161 304 1,346 698
Net changes in current assets and
current liabilities, net of
effects of acquisitions 20,395 22,102 (8,138) (93,663)
Net cash provided by operating
activities 72,260 83,568 160,723 168,441
Investing activities:
Purchase of equipment and other
long term assets (987) (7,106) (10,655) (72,876)
Earn-out payment paid to acquire
subsidiaries (19,301) (14,775) (92,412) (133,348)
Investment in a joint venture -- -- -- (2,970)
Acquisition of an intangible assets -- -- -- (1,767)
Deposits (paid)/refunded in
connection with acquisition of
subsidiaries 330 -- 330 (14,270)
Disposal of subsidiaries (9,328) -- (27,316) (11,694)
Sales of equity securities and bank
notes -- 7,365 865 187,243
Purchase of equity securities and
bank notes -- -- (29,257) (96,113)
Proceeds received from disposal of
fixed assets -- -- 196 --
Net cash used in investing
activities (29,286) (14,516) (158,249) (145,795)
Financing activities:
Proceeds from short-term bank loans -- -- -- 370
Repayment of short term bank loans -- -- -- (370)
Repayment of short term other loans -- -- -- (30,041)
Capital injection from minority
shareholders -- -- -- 214
Proceeds from issuance of ordinary
shares, net of issuance costs 142,437 1,535 144,499 10,711
Repurchase of ordinary shares -- (17,502) -- (47,500)
Net cash provided by/(used in)
financing activities 142,437 (15,967) 144,499 (66,616)
Effect of exchange rate changes (359) (3,342) (1,729) 16,469
Net increase (decrease) in cash and
cash equivalents 185,052 49,743 145,244 (27,501)
Cash and cash equivalents,
beginning of period / year 383,107 373,172 422,915 450,416
Cash and cash equivalents, end of
period / year 568,159 422,915 568,159 422,915
Supplemental disclosure of cash
flow information:
Income taxes paid 2,787 8,728 12,965 23,712
Supplemental disclosure of non-cash
investing activity:
Acquisition of subsidiaries:
Accounts payable 20,326 60,501 20,326 60,501
