BEIJING, April 4, 2014 /PRNewswire/ -- China Finance Online Co. Limited ("China Finance Online", or the "Company", "we", "us" or "our") (NASDAQ GS: JRJC), a technology-driven, and user-focused market leader in China providing vertically integrated financial information and services, today announced its unaudited financial results for the fourth quarter and fiscal year 2013 ended on December 31, 2013.
2013 Fourth Quarter Financial Summary
2013 Fiscal Year Financial Summary
"We are very excited that our strategic transition has finally taken shape as we not only significantly grew our top line but also returned to profitability in the fourth quarter. In the past three years, we focused on improving our business fundamentals and maintaining relationships with our online audience, while exploring viable new business opportunities to monetize our large user base. Now that our business model has evolved from providing financial information to providing financial services, we look forward to continuing to serve an increasingly large group of affluent Chinese investors."
"We have accumulated significant experience and an invaluable customer base through directly servicing Chinese investors for more than ten years. Our regional offices cover all major investment centers in China, and our sales and marketing team is one of the most effective in the industry. With our new business model, we are equipping our seasoned customer specialists with new technology, tools and financial knowledge to better serve our clients."
"Against an inflationary macro environment where the stock market remains weak and the real estate market is policy-influenced, investors are increasingly looking for more diversified investment categories to help preserve and grow their personal wealth. We strive to provide a full suite of investment products to help clients achieve their financial goals. Through Yinglibao, an internet-based financial platform, we provide cash management solutions which generate higher returns than the current one-year bank demand deposit rate, while also enabling users to purchase mutual fund products. Our precious metal trading service enables investors to tap into alternative investment areas. We will continuously expand the types of investment products available to our clients so as to perfect our one-stop solution to clients."
2013 Fourth Quarter Results
Net revenues for the fourth quarter of 2013 increased by 400% year-over-year to $25.8 million from $5.2 million in the fourth quarter of 2012, and up 96% quarter-over-quarter from $13.2 million in the third quarter of 2013. The Company has re-categorized the components of its net revenues to better reflect the evolving nature of its businesses since the second quarter of 2013. The Company's net revenues have been re-categorized under: (a) revenues from financial information and advisory business, which include subscription fees from individual customers and institutional customers; (b) revenues from financial services, which include Hong Kong brokerage-related revenues and our precious metal trading service; and (c) advertising revenues. During the fourth quarter of 2013, revenues from financial services, revenues from financial information and advisory business and advertising revenues each contributed 76%, 11% and 10% of the total revenues, respectively, compared with 11%, 67% and 22%, respectively, for the fourth quarter in 2012.
Revenues from financial services were $19.7 million compared with $0.6 million in the fourth quarter of 2012, and up from $8.9 million in the third quarter of 2013, mainly driven by better operating performances in precious metal trading service. Revenues from the financial information and advisory business were $2.9 million compared with $3.5 million in the fourth quarter of 2012, but up from $2.8 million in the third quarter of 2013. Revenues from advertising were $2.5 million compared with $1.1 million in the fourth quarter of 2012, and up from $1.2 million in the third quarter of 2013.
Gross profit increased by 531% year-over-year to $21.3 million from $3.4 million for the fourth quarter in 2012, and up 88% from $11.4 million in the third quarter of 2013. Gross margin for the fourth quarter of 2013 was 82.7% compared with 65.5% for the fourth quarter of 2012, and 86.4% in the third quarter of 2013. The decrease in gross margin on a sequential basis was mainly due to the increase in commission rebates paid to the sales agents of our precious metal trading business.
General and administrative ("G&A") expenses for the fourth quarter of 2013 were $5.3 million, or 20.4% of net revenues, compared with $3.1 million, or 59.8% of net revenues for the fourth quarter in 2012, and $3.9 million, or 29.6% of net revenues for the third quarter of 2013. The increase in G&A expenses in absolute value was mainly due to higher share based compensation expenses.
Sales and marketing expenses for the fourth quarter of 2013 were $15.5 million, or 60.1% of net revenues, compared with $3.2 million, or 61.6% in the fourth quarter of 2012 and $7.4 million, or 56.4% in the third quarter of 2013. The increase in sales and marketing expenses was mainly due to higher headcount related expenses and marketing expenses.
Product development expenses for the fourth quarter of 2013 were $2.2 million, or 8.6% of net revenues, compared with $2.2 million, or 42.7% of net revenues for the fourth quarter in 2012, and $2.4 million, or 18.1% of net revenues in the third quarter of 2013. The Company expects to continue to invest in its data, product and technical capabilities to achieve the Company's long term strategic plan.
Total operating expenses for the fourth quarter of 2013 were $23.0 million, compared with $8.5 million in the fourth quarter of 2012, and $13.7 million in the third quarter of 2013.
Net income attributable to China Finance Online for the fourth quarter of 2013 was $1.6 million, compared with a net loss of $4.9 million in the fourth quarter of 2012, and a net loss of $1.6 million in the third quarter of 2013. During the fourth quarter of 2013, the Company sold its investment in a real estate project at an investment gain of $2.8 million. Basic and diluted weighted average number of ordinary shares in the fourth quarter of 2013 were 109 million and 119 million, respectively. Each ADS represented five ordinary shares of the Company.
2013 Fiscal Year Financial Result
Total net revenues increased by 76% year-over-year to $52.1 million from $29.6 million in fiscal 2012. Gross profit increased by 93% year-over-year to $41.5 million from $21.5 million in fiscal 2012. Gross margin was 79.7% for the fiscal year of 2013. Net loss attributable to the Company for the fiscal year of 2013 was $8.8 million.
As of December 31, 2013, total cash and cash equivalents were $36.4 million. Accounts receivables from the non-margin related business were $15.4 million, while iSTAR Finance had margin-related accounts receivables of $6.0 million. iSTAR Finance continues to implement strict margin account screening and ongoing monitoring to ensure the safe return of capital.
The total shareholders' equity of China Finance Online was $75.6 million as of December 31, 2013.
Conference Call Information
The Company will host a conference call and a simultaneous webcast on April 3, 2014 at 8:00 p.m. Eastern Time/April 4, 2014 8:00 a.m. Beijing Time. Interested parties may participate in the conference call by dialing approximately five minutes before the call start time at U.S. +1-877-847-0047, Hong Kong +852-3006-8101, Singapore 8008-523-396, or China 800-876-5011, and the pass code for all regions is 705569.
A replay of the conference call will be available shortly after the conclusion of the event through 12:00 a.m. Eastern Time on April 11, 2014 (or 12:00 p.m. Beijing Time on April 11, 2014). The dial-in details for the replay: U.S. +1-866-572-7808, Hong Kong +852-3012-8000, Singapore 800-101-2157, China 800-876-5013. Access code: 705569.
The conference call will be available as a live webcast and replay at: http://www.media-server.com/m/p/7mpvivv5
About China Finance Online
China Finance Online Co. Limited is a technology-driven, user-focused market leader in China in providing vertically integrated financial information and services. The Company's two prominent flagship portal sites, www.jrj.com and www.stockstar.com, have attracted a large population of individual investors. The Company offers basic software, information services and securities investment advisory services to individual investors. Through its subsidiary, Genius, the Company provides financial database and analytics to institutional customers including domestic financial, research, academic and regulatory institutions. Leveraging on its robust internet capabilities and registered user base, China Finance Online is developing comprehensive financial services including securities and futures brokerage services in Hong Kong and precious metal trading services in China.
Safe Harbor Statement
This press release contains forward-looking statements. These statements constitute "forward-looking" statements within the meaning of 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, this release contains the following forward-looking statements regarding:
Such statements involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements, which risks and uncertainties include, among others, the following:
Further information regarding these and other risks is included in the Company's filings with the U.S. Securities and Exchange Commission, including its annual report on Form 20-F under "Forward-Looking Information" and "Risk Factors". 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.
Contact:
Julie Zhu
China Finance Online Co. Limited
+86-10-5832-5288
ir@jrj.com
Shiwei Yin
Grayling
646-284-9474
shiwei.yin@grayling.com
Tables follow
China Finance Online Co. Limited | ||
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS | ||
(In thousands of U.S. dollars) | ||
Dec. 31, 2013 | Dec. 31, 2012 | |
Assets | ||
Current assets: | ||
Cash and cash equivalents | 36,371 | 40,906 |
Restricted cash | 4 | 28,874 |
Trust bank balances held on behalf of customers | 9,999 | 8,812 |
Accounts receivable, net - Others | 15,398 | 4,971 |
Accounts receivable, net - Margin clients | 5,977 | 15,054 |
Loan receivable | - | 1,206 |
Short-term investments | - | 2,640 |
Prepaid expenses and other current assets | 27,090 | 2,780 |
Advances to employees | - | 1,056 |
Deferred tax assets, current | 1,284 | 392 |
Total current assets | 96,123 | 106,691 |
Cost method investment | 1,139 | 802 |
Property and equipment, net | 3,868 | 4,914 |
Acquired intangible assets, net | 7,545 | 4,676 |
Rental deposits | 1,115 | 752 |
Goodwill | 16,974 | 3,049 |
Deferred tax assets, non-current | 94 | 201 |
Guarantee fund deposits | 6,877 | 287 |
Total assets | 133,735 | 121,372 |
Liabilities and equity | ||
Current liabilities: | ||
Deferred revenue, current (including deferred revenue, current of the consolidated variable interest entities without recourse to China Finance Online Co. Limited $3,808 and $3,793 as of December 31,2013 and December 31,2012, respectively) | 6,150 | 7,551 |
Accrued expenses and other current liabilities (including accrued expenses and other current liabilities of the consolidated variable interest entities without recourse to China Finance Online Co. Limited $7,460 and $2,731 as of December 31,2013 and December 31, 2012, respectively) | 9,696 | 5,391 |
Short-term loan(including short-term loan of the consolidated variable interest entities without recourse to China Finance Online Co. Limited nil and nil as of December 31,2013 and December 31, 2012, respectively) | - | 13,546 |
Amount due to customers for trust bank balances held on behalf of customers (including amount due to customers for trust bank balances held on behalf of customers of the consolidated variable interest entities without recourse to China Finance Online Co. Limited $648 and nil as of December 31,2013 and December 31, 2012, respectively) | 9,999 | 8,812 |
Accounts payable (including accounts payable of the consolidated variable interest entities without recourse to China Finance Online Co. Limited $6,272 and $141 as of December 31,2013 and December 31, 2012, respectively) | 13,324 | 805 |
Deferred tax liability, current (including deferred tax liability, current of the consolidated variable interest entities without recourse to China Finance Online Co. Limited $325 and $140 as of December 31,2013 and December 31, 2012, respectively) | 325 | 140 |
Income taxes payable (including income taxes payable of the consolidated variable interest entities without recourse to China Finance Online Co. Limited $414 and $8 as of December 31,2013 and December 31,2012, respectively) | 459 | 88 |
Total current liabilities | 39,953 | 36,333 |
Deferred tax liability, non-current (including deferred tax liabilities, non-current of the consolidated variable interest entities without recourse to China Finance Online Co. Limited $1,886 and $1,169 as of December 31,2013 and December 31, 2012, respectively) | 1,886 | 1,169 |
Deferred revenue, non-current (including deferred revenue, non-current of the consolidated variable interest entities without recourse to China Finance Online Co. Limited $633 and $1,062 as of December 31,2013 and December 31,2012, respectively) | 1,986 | 3,155 |
Total liabilities | 43,825 | 40,657 |
Noncontrolling interests | 14,358 | 751 |
Total China Finance Online Co. Limited Shareholders' equity | 75,552 | 79,964 |
Total liabilities and equity | 133,735 | 121,372 |
China Finance Online Co. Limited UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (in thousands of U.S. dollars, except share and ADS related data) | |||||
Three months ended | The year ended | ||||
Dec. 31, | Dec. 31, | Sep. 30, | Dec. 31, | Dec. 31, | |
Net revenues | 25,807 | 5,162 | 13,162 | 52,064 | 29,599 |
Cost of revenues | (4,476) | (1,779) | (1,794) | (10,570) | (8,090) |
Gross profit | 21,331 | 3,383 | 11,368 | 41,494 | 21,509 |
Operating expenses | |||||
General and administrative(includes share-based compensation expenses of $2,120, $196,$535,$2,985 and $765, respectively) | (5,259) | (3,086) | (3,901) | (15,210) | (11,387) |
Sales and marketing (includes share-based compensation expenses of $6, $6, $4, $10 and $26, respectively) | (15,519) | (3,179) | (7,422) | (30,588) | (13,072) |
Product development (includes share-based compensation expenses of $22, $3, $18, $40 and $12, respectively) | (2,228) | (2,202) | (2,382) | (9,033) | (10,736) |
Total operating expenses | (23,006) | (8,467) | (13,705) | (54,831) | (35,195) |
Government subsidies | - | 2 | 11 | 11 | 75 |
Loss from operations | (1,675) | (5,082) | (2,326) | (13,326) | (13,611) |
Interest income | 424 | 516 | 335 | 1,341 | 3,176 |
Interest expense | (1) | (87) | (135) | (196) | (517) |
Investment gain, net | 2,855 | 25 | 89 | 2,906 | 434 |
Other income(loss), net | 337 | (651) | (209) | (29) | (634) |
Exchange gain, net | 148 | 248 | 85 | 557 | 73 |
Income (loss) before income tax (expenses) | 2,088 | (5,031) | (2,161) | (8,747) | (11,079) |
Income tax benefits (expenses) | 546 | 77 | 243 | 68 | (884) |
Net income (loss) | 2,634 | (4,954) | (1,918) | (8,679) | (11,963) |
Less: Net income (loss) attributable to the noncontrolling interest | 994 | (88) | (340) | 111 | (104) |
Net income (loss) attributable to China Finance Online Co. Limited | 1,640 | (4,866) | (1,578) | (8,790) | (11,859) |
Net income (loss) | 2,634 | (4,954) | (1,918) | (8,679) | (11,963) |
Changes in foreign currency translation adjustment | 382 | 534 | 468 | 1,193 | 131 |
Net unrealized gain (loss) on available-for-sale securities, net of tax effects of $(4), nil, nil, nil and $6, respectively | (11) | - | - | - | 32 |
Other comprehensive income, net of tax | 371 | 534 | 468 | 1,193 | 163 |
Comprehensive income (loss) | 3,005 | (4,420) | (1,450) | (7,486) | (11,800) |
Less: comprehensive income (loss) attributable to non-controlling interest | 994 | (88) | (340) | 111 | (104) |
Comprehensive income (loss) attributable to China Finance Online Co. Limited | 2,011 | (4,332) | (1,110) | (7,597) | (11,696) |
Net income (loss)per share attributable to China Finance Online Co. Limited | |||||
Basic | 0.02 | (0.04) | (0.01) | (0.08) | (0.11) |
Diluted | 0.01 | (0.04) | (0.01) | (0.08) | (0.11) |
Net income (loss) per ADS attributable to China Finance Online Co. Limited | |||||
Basic | 0.08 | (0.22) | (0.07) | (0.40) | (0.54) |
Diluted | 0.07 | (0.22) | (0.07) | (0.40) | (0.54) |
Weighted average ordinary shares | |||||
Basic | 109,060,617 | 108,986,666 | 109,006,101 | 109,019,513 | 108,983,249 |
Diluted | 118,921,336 | 108,986,666 | 109,006,101 | 109,019,513 | 108,983,249 |
Weighted average ADSs | |||||
Basic | 21,812,123 | 21,797,333 | 21,801,220 | 21,803,903 | 21,796,650 |
Diluted | 23,784,267 | 21,797,333 | 21,801,220 | 21,803,903 | 21,796,650 |
