BEIJING, May 8, 2014 /PRNewswire-FirstCall/ -- Charm Communications Inc. (NASDAQ: CHRM) ("Charm" or the "Company"), a leading advertising agency in China, today announced its unaudited financial results for the fourth quarter and full year ended December 31, 2013.
Fourth Quarter 2013 Highlights
Full Year 2013 Highlights
"In the fourth quarter, we continued to reposition our overall business in the wake of significant changes in the industry and the continued growth of online media, although television-related advertising remains a significant part of our business," said Mr. He Dang, Charm's founder, chairman and chief executive officer. "We remain cautiously optimistic regarding 2014, as our underlying business showed improvement at the end of last year, and we have already started to restructure and eliminate a number of loss-making projects and non-performing teams, which we expect will lead to better results this year despite television advertising spending experiencing an historically slow rate of growth in the first quarter of 2014, according to our own independent industry research."
Fourth Quarter 2013 Results
Turnover (non-GAAP)
US$ mm | 4Q13 | 4Q12 | 3Q13 | Y-o-Y % | Q-o-Q% |
Total turnover (non-GAAP) | $253.4 | $201.6 | $198.8 | 25.7% | 27.4% |
Advertising agency | $209.7 | $169.6 | $171.1 | 23.7% | 22.6% |
Media investment management | $43.7 | $32.0 | $27.7 | 36.3% | 57.5% |
Branding and identity services | N/A | N/A | N/A | N/A | N/A |
The Company uses turnover (non-GAAP), defined as total customer advertising spending placed through or with Charm, to reflect the scale of its business.
The 25.7% year-over-year increase in total turnover was mainly due to the increase in the number of advertising clients and the increase in advertising spending from existing clients. The 27.4% quarter-over-quarter increase in turnover was largely attributed to seasonal factors, as well as the increase in advertising spending on non-CCTV media platforms.
The 23.7% year-over-year and 22.6% quarter-over-quarter increase in the advertising agency business ("agency business") turnover was mainly due to the increase in the number of new agency clients and the increase in advertising spending from existing agency clients as a result of the increase in agency advertising spending on non-CCTV TV media platforms and the Internet.
The revenue extraction rate, which is defined as revenue divided by turnover, was 8.0% for the agency business, compared to 7.4% for the fourth quarter of 2012 and 6.6% for the third quarter of 2013. The year-over-year increase was mainly due to an increase in the CCTV rebate rate in year 2013 compared to year 2012. The quarter-over-quarter increase was largely due to higher media rebates as a result of successful negotiations by the Company and mainly for non-CCTV television media.
The 36.3% year-over-year increase in turnover (equivalent to GAAP revenue) for the media investment management business ("principal media business"), which operates under the Shangxing Media brand, was mainly due to increased selling prices paid by customers for media resources mainly from BTV Sports, Nanfang Satellite TV and Tianjin Satellite TV. The 57.5% quarter-over-quarter increase in turnover in the principal media business was mainly the result of strong demand from clients for such media resources due to seasonal factors.
Revenues
US$ mm | 4Q13 | 4Q12 | 3Q13 | Y-o-Y % | Q-o-Q% |
Total revenues | $62.2 | $47.1 | $40.7 | 31.9% | 52.9% |
Advertising agency | $16.8 | $12.5 | $11.3 | 34.1% | 48.7% |
Media investment management | $43.7 | $32.0 | $27.7 | 36.3% | 57.5% |
Branding and identity services | $1.7 | $2.6 | $1.6 | -33.6% | 4.4% |
The changes in agency and principal media business revenues are consistent with the changes in turnover, and with respect to the agency business revenues, consistent with the change in the extraction rate. The year-over-year decrease in branding and identity services was primarily due to an overall decrease in client demand for the Company's creative services.
Gross Profit
US$ mm | 4Q13 | 4Q12 | 3Q13 | Y-o-Y % | Q-o-Q% |
Cost of revenues | $42.0 | $34.1 | $27.3 | 23.1% | 53.8% |
Gross profit | $20.2 | $13.0 | $13.4 | 55.0% | 51.0% |
Gross margin | 32.4% | 27.6% | 32.8% |
The year-over-year increase in cost of revenues was in line with the increase in total revenues over the same period. The quarter-over-quarter increase in cost of revenues was partially attributed to the higher media costs in Q4 related to CCTV programming. The increase in gross profit also reflected the increase in total revenue. The quarter-over-quarter increase in gross margin was attributed to higher gross margin from some media resources as a result of higher revenue in the fourth quarter, mainly from Tianjin Satellite TV and Nanfang Satellite TV, due to seasonal factors.
Operating Profit (Loss)
US$ mm | 4Q13 | 4Q12 | 3Q13 | Y-o-Y % | Q-o-Q% |
Total operating expenses | $16.9 | $17.2 | $14.0 | -1.6% | 20.3% |
Selling and marketing | $10.8 | $11.3 | $9.7 | -4.5% | 11.4% |
General and administrative | $6.1 | $5.9 | $4.4 | 3.8% | 40.1% |
Operating profit (loss) | $3.5 | -$3.5 | -$0.5 |
The Company's selling and marketing expenses declined slightly compared to the year-ago period. The 11.4% quarter-over-quarter increase in selling and marketing expenses was primarily due to more marketing events and increased business travel related to selling activities in the fourth quarter. The Company's general and administrative expenses increased slightly compared to the year-ago period. The 40.1% quarter-over-quarter increase in general and administrative expenses was mainly attributed to an increase in bad debt provisions in the fourth quarter.
Net Income (Loss)
US$ mm | 4Q13 | 4Q12 | 3Q13 | Y-o-Y % | Q-o-Q% |
Non-GAAP net income (loss)* | $2.9 | -$3.8 | $0.5 | -176.0% | 500.8% |
Net income (loss) | $2.3 | -$4.2 | -$0.6 | -155.5% | -462.4% |
Basic net income (loss) per ADS (US$) | $0.06 | -$0.13 | -$0.03 | ||
Fully diluted net income (loss) per ADS (US$) | $0.06 | -$0.13 |
-$0.03 |
*The Company's non-GAAP net income (loss) excludes share-based compensation expenses, amortization of intangible assets and net change in fair value of consideration payable and call option.
Each American depositary share ("ADS") represents two common shares. The weighted average number of shares used to compute basic net loss per ADS for the fourth quarter of 2013 was 40,624,859. As of December 31, 2013, 40,700,564 ADSs were issued and outstanding.
Cash Flows and Cash Position
Net cash flow from operations for the fourth quarter of 2013was $27.6 million. As of December 31, 2013, the Company had cash and cash equivalents of $121.2 million, compared to 91.1 million at the end of the third quarter of 2013.
Customers
In the fourth quarter of 2013, Charm's agency business had 199 advertisers, compared to 195 advertisers in the third quarter of 2013 and 174 advertisers in the fourth quarter of 2012.
In the fourth quarter of 2013, Charm's principal media business had 229 advertisers, compared to 212 advertisers in the third quarter of 2013 and 203 advertisers in the fourth quarter of 2012.
Employee Headcount
As of December 31, 2013, the Company had 753 employees, compared to 749 employees as of September 30, 2013.
Full Year 2013 Results
Turnover
US$ mm | FY13 | FY12 | Y-o-Y % |
Total turnover (non-GAAP) | $886.7 | $823.9 | 7.6% |
Advertising agency | $758.3 | $711.1 | 6.6% |
Media investment management | $128.4 | $112.8 | 13.9% |
Branding and identity services | N/A | N/A | N/A |
Revenues
US$ mm | FY13 | FY12 | Y-o-Y % |
Total revenues | $183.8 | $165.5 | 11.1% |
Advertising agency | $50.4 | $46.2 | 8.9% |
Media investment management | $128.4 | $112.8 | 13.9% |
Branding and identity services | $5.0 | $6.5 | -22.6% |
Gross Profit
US$ mm | FY13 | FY12 | Y-o-Y % |
Cost of revenues | $125.6 | $117.1 | 7.2% |
Gross profit | $58.2 | $48.4 | 20.4% |
Gross margin | 31.7% | 29.2% |
Operating Profit (Loss)
US$ mm | FY13 | FY12 | Y-o-Y % |
Total operating expenses | $56.0 | $52.3 | 7.1% |
Selling and marketing | $38.2 | $36.0 | 6.0% |
General and administrative | $17.7 | $16.2 | 9.3% |
Operating profit (loss) | $2.6 | -$3.2 | -179.4% |
Net Income (Loss)
US$ mm | FY13 | FY12 | Y-o-Y % |
Non-GAAP Net income* | $5.1 | $0.5 | 979.8% |
Net income (loss) | $1.4 | -$2.5 | -156.6% |
Basic net income (loss) per ADS (US$) | $0.00 | -$0.12 | |
Fully diluted net income (loss) per ADS (US$) | $0.00 | -$0.12 |
*The Company's non-GAAP net income (loss) excludes share-based compensation expenses, amortization of intangible assets and net change in fair value of consideration payable and call option.
Each ADS represents two common shares. The weighted average number of shares used to compute basic net loss per ADS for the full year 2013 was 39,935,880.
Recent Business Developments
On May 6, 2014, Charm announced that its Audit Committee had approved its decision to provide financial results and earnings guidance on a biannual basis from financial year 2014 onwards. As a foreign private issuer, the Company is only required to submit its interim balance sheet and income statement as of the end of its second quarter each year, pursuant to Rule 5250(c)(2) of the NASDAQ Stock Market Rules.
On April 3, 2014, Charm announced that Mr. Andrew Rickards, one of the Company's independent directors and chair of its Audit Committee, had informed the Company that he would not renew his Independent Director Agreement at the conclusion of its term on April 9, 2014 due to other business commitments and resigned from the board of directors effective April 9, 2014. Upon his resignation, Mr. Rickards also ceased to be a member of each of the Company's Audit Committee, Compensation Committee, Corporate Governance and Nominating Committee, and the Special Committee that was established to evaluate the Company's proposed going-private transaction. The Company is in the process of identifying replacement candidates for Mr. Rickards' roles as an independent director and a member of the Audit Committee. Mr. Gang Chen, an independent director, has been appointed to serve as a member of the Compensation Committee and the Corporate Governance and Nominating Committee.
On September 30, 2013, the Company announced that its board of directors had received a preliminary non-binding proposal letter dated September 30, 2013 from Mr. Dang, the chairman of the board of directors (the "Founder"), Merry Circle Trading Limited, a British Virgin Islands company controlled by the Founder ("Merry Circle"), Honour Idea Limited, a British Virgin Islands company owned by the Founder ("Honour Idea" and, collectively with Merry Circle, the "Founder Shareholders"), and CMC Capital Partners HK Limited (collectively, the "Consortium") to acquire all of the outstanding shares of the Company not currently owned by the Founder Shareholders in a "going private" transaction.
Negotiations between the Special Committee and the Consortium with respect to the proposal are ongoing, and the Special Committee continues to rigorously evaluate, with assistance and guidance from its financial and legal advisors, the proposal, as well as other strategic alternatives that may be available to the Company, including without limitation pursuing a different transaction or remaining as an independent, listed company.
Business Outlook
US$ mm | 1H14E |
Non-GAAP net income* | 1.6 ~ 2.1 |
*The Company's non-GAAP net income (loss) excludes share-based compensation expenses, amortization of intangible assets and net change in fair value of consideration payable and call option.
The Company bases these estimates on a foreign exchange rate of RMB6.20 to US$1.00. This forecast reflects the Company's current and preliminary view, which is subject to change.
Non-GAAP Financial Measures:
To supplement the unaudited condensed consolidated financial information presented in accordance with Accounting Principles Generally Accepted in the United States ("GAAP"), the Company also provides the following non-GAAP financial measures: "turnover," which is defined as total customer advertising spending placed through or with Charm, and "non-GAAP net income(loss)," which is defined as GAAP net income(loss) excluding stock-based compensation expenses, amortization of intangible assets and net change in fair value of consideration payable and call option.
The non-GAAP financial measures are provided to enhance investors' overall understanding of the Company's current and past financial performance in ongoing core operations as well as prospects for the future. These measures should be considered in addition to results prepared and presented in accordance with GAAP, but should not be considered a substitute for, or superior to, GAAP results. Management uses both GAAP and non-GAAP information in evaluating and operating the Company's business internally and therefore deems it important to provide all of this information to investors.
Cautions on Use of Non-GAAP Measures
In addition to Charm's consolidated financial results prepared under U.S. GAAP, the Company also provides non-GAAP financial measures, including "turnover" and "non-GAAP net income (loss)." The Company believes that the non-GAAP financial measures provide investors with another method for assessing its operating results in a manner that is focused on the performance of its ongoing operations.
Management believes investors will benefit from greater transparency in referring to these non-GAAP financial measures when assessing the Company's operating results, as well as when forecasting and analyzing future periods. However, management recognizes that:
Further, these non-GAAP financial measures may be unique to the Company, as they may be different from non-GAAP financial measures used by other companies. As such, this presentation of non-GAAP financial measures may not enhance the comparability of the Company's results to the results of other companies. 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.
A reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure or measures appears at the end of this press release.
Conference Call
Charm's management team will hold an earnings conference call at 8 a.m. U.S. Eastern Time (8p.m. Beijing/Hong Kong Time) on Thursday, May 8, 2014.
Dial-in details for the conference call are as follows: | |
U.S.: | +1-845-675-0437 |
International: | +65-6723-9381 |
Hong Kong: | +852-2475-0994 |
Passcode: | 38893560 |
A replay of the call will be available from 11 a.m. May 8, 2014 until 11:59 p.m. May 15, 2014 U.S. Eastern Time. Dial-in details for the replay are as follows:
International: | +61-2-8199-0299 |
Passcode: | 38893560 |
Additionally, an archived webcast of this call will be available on the Investor Relations section of the Charm web site at http:/ir.charmgroup.cn.
About Charm
Charm Communications Inc. (NASDAQ: CHRM) is a leading advertising agency group in China that offers integrated advertising services with particular focus on television and the internet. Charm's integrated advertising services include full media planning and buying, as well as creative and branding services. Charm has built a full service digital advertising platform, which offers digital campaign capabilities across all key digital media, including search engines, display portals, online video sites and social networking services. Charm also secures advertising inventory and other advertising rights, such as sponsorships and branded content, from premium media networks and resells to clients as part of its integrated media offerings. Charm's clients include China's top domestic brands, as well as some major international brands, across a wide range of industries. Since 2003 Charm has been the top agency every year for China's leading television network, China Central Television (CCTV). For more information, please go to http://ir.charmgroup.cn.
Safe Harbor Statement
This press release contains "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. All statements other than statements of historical fact in this press release are forward-looking statements and involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. These forward-looking statements are based on management's current expectations, assumptions, estimates and projections about the Company and the industry in which the Company operates, but involve a number of unknown risks and uncertainties. Further information regarding these and other risks is included in Charm's filings with the U.S. Securities and Exchange Commission, including its registration statement on Form F-1. The Company undertakes no obligation to update forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and actual results may differ materially from the anticipated results. You are urged to consider these factors carefully in evaluating the forward-looking statements contained herein and are cautioned not to place undue reliance on such forward-looking statements, which are qualified in their entirety by these cautionary statements.
For investor and media inquiries, please contact:
In China:
Ms. Jenny Wang
IR Department
Charm Communications Inc.
Phone: +86-10-8556-2527
Email: ir@charmgroup.cn
In the United States:
Mr. Justin Knapp
Ogilvy Financial, U.S.
Phone: +1-616-551-9714
Email: chrm@ogilvy.com
Charm Communications Inc. | ||||
Unaudited Condensed Consolidated Balance Sheets | ||||
(Amounts in thousands of U.S. dollars) | ||||
December 31 | September 30 | December 31 | ||
ASSETS | ||||
Current Assets | ||||
Cash and cash equivalents | 121,228 | 91,146 | 116,589 | |
Notes receivable | 5,940 | 6,726 | 6,993 | |
Prepaid expenses | 57,168 | 64,737 | 93,838 | |
Deposits | 32,546 | 26,192 | 24,723 | |
Accounts receivable | 117,307 | 105,106 | 89,964 | |
Amount due from related parties | 3,480 | 783 | 1,938 | |
Deferred tax assets | 1,034 | 195 | 191 | |
Other current assets | 12,958 | 5,612 | 4,021 | |
Total current assets | 351,661 | 300,497 | 338,257 | |
Fixed assets, net | 7,841 | 9,297 | 7,638 | |
Intangible assets, net | 1,519 | 1,731 | 2,375 | |
Investments under equity method | 2,267 | 2,213 | 2,133 | |
Goodwill | 4,507 | 4,458 | 4,379 | |
Cost method investments | 826 | 817 | 803 | |
Other non-current assets | 2,608 | 2,657 | 3,045 | |
Total non-current assets | 19,568 | 21,173 | 20,373 | |
TOTAL ASSETS | 371,229 | 321,670 | 358,630 | |
LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND EQUITY | ||||
Current Liabilities | ||||
Accounts payable (of which 55, 41 and 53, as of December 31, | 28,516 | 25,792 | 38,855 | |
Amounts due to related parties (of which nil, nil and 313 as of | 9,144 | 8,044 | 13,310 | |
Advances from customers (of which 1,167, 1,154, and 1,408 as | 85,818 | 52,024 | 56,343 | |
Accrued expenses and other current liabilities (of which 3,178, | 22,634 | 15,825 | 18,912 | |
Consideration payable (of which nil as of December 31, 2013, | 950 | 1,600 | 2,507 | |
Divdend payable (of which nil as of December 31, 2013, | - | |||
Total current liabilities | 147,062 | 103,285 | 129,927 | |
Consideration payable (of which nil as of December 31, 2013, | 1,316 | 1,351 | 1,327 | |
Total non-current liabilities | 1,316 | 1,351 | 1,327 | |
Total liabilities | 148,378 | 104,636 | 131,254 | |
Redeemable noncontrolling interest | 5,733 | 6,004 | 5,434 | |
Equity: | ||||
Charm Communications Inc.'s equity | ||||
Ordinary shares | 8 | 8 | 8 | |
Additional paid-in capital | 87,597 | 87,014 | 100,850 | |
Retained earnings | 101,621 | 98,954 | 101,225 | |
Accumulated other comprehensive income | 22,611 | 19,862 | 15,652 | |
Total Charm Communications Inc. shareholders' equity | 211,837 | 205,838 | 217,735 | |
Noncontrolling interest | 5,281 | 5,192 | 4,207 | |
Total equity | 217,118 | 211,030 | 221,942 | |
TOTAL LIABILITIES, REDEEMABLE NONCONTROLLING | ||||
INTEREST AND EQUITY | 371,229 | 321,670 | 358,630 |
Charm Communications Inc. | |||||
Condensed Consolidated Statements of Operations | |||||
(Amounts in thousands of U.S. dollars, except for number of shares and per share data) | |||||
For the three months ended, | |||||
Dec 31 | Dec 31 | Sep 30 | |||
(Unaudited) | (Unaudited) | (Unaudited) | |||
Revenues: | |||||
Media investment management | 43,684 | 32,042 | 27,740 | ||
Advertising agency | 16,781 | 12,512 | 11,284 | ||
Branding and identity services | 1,712 | 2,578 | 1,640 | ||
Total revenues | 62,177 | 47,132 | 40,664 | ||
Cost of revenues: | |||||
Media investment management | 39,491 | 31,159 | 25,246 | ||
Advertising agency | 1,025 | 1,337 | 1,016 | ||
Branding and identity services | 1,498 | 1,624 | 1,049 | ||
Total cost of revenues: | 42,014 | 34,120 | 27,311 | ||
Gross profit | 20,163 | 13,012 | 13,353 | ||
Operating expenses: | |||||
Selling and marketing expenses | 10,781 | 11,286 | 9,681 | ||
General and administrative expenses | 6,117 | 5,891 | 4,365 | ||
Total operating expenses | 16,898 | 17,177 | 14,046 | ||
Gain(Loss) from equity method investees | 30 | 307 | 189 | ||
Net change in fair value of consideration payable and call option | 236 | 309 | - | ||
Operating profit (loss) | 3,531 | (3,549) | (504) | ||
Interest income | 206 | 568 | 299 | ||
Other income (loss) | (792) | ||||
Income before income tax expense | 2,945 | (2,981) | (205) | ||
Income tax expense | 629 | 1,195 | 434 | ||
Net income (loss) | 2,316 | (4,176) | (639) | ||
Net income attributable to noncontrolling interest | (351) | 884 | 598 | ||
Net income (loss) attributable to Charm Communications Inc. | 2,667 | (5,060) | (1,237) | ||
shareholders per ADS: | |||||
Basic | 0.07 | (0.13) | 0.03 | ||
Diluted | 0.07 | (0.13) | 0.03 | ||
Shares used in computation of net income(loss) per ADS: | |||||
Basic | 40,624,859 | 38,269,369 | 40,445,764 | ||
Diluted | 40,830,961 | 38,269,369 | 40,445,764 | ||
Notes: | |||||
Share-based compensation expenses during the period included in: | |||||
Cost of revenues | - | - | - | ||
Selling and marketing expenses | 389 | 318 | 436 | ||
General and administrative expenses | 155 | 150 | 451 | ||
Total | 544 | 468 | 887 | ||
For the three months ended, | |||||
December 31 | December 31 | September 30 | |||
(Unaudited) | (Unaudited) | (Unaudited) | |||
Net income (loss) | 2,316 | (4,176) | (639) | ||
Other comprehensive income (loss): | |||||
Change in cumulative foreign exchange translation adjustment | 3,002 | 1,957 | 936 | ||
Comprehensive income (loss) | 5,318 | (2,219) | 297 | ||
Less: Comprehensive income attributable to non-controlling interest | (171) | (590) | (605) | ||
Less: Comprehensive income attributable to redeemable non-controlling interest | 270 | (297) | (192) | ||
Comprehensive income (loss) attributable to Charm Communications Inc. | 5,417 | (3,106) | (500) |
Charm Communications Inc. | ||||
Condensed Consolidated Statements of Operations | ||||
(Amounts in thousands of U.S. dollars, except for number of shares and per share data) | ||||
For the twelve months ended, | ||||
December 31, 2013 | December 31, 2012 | |||
(Unaudited) | (Audited) | |||
Revenues: | ||||
Media investment management | 128,436 | 112,786 | ||
Advertising agency | 50,356 | 46,234 | ||
Branding and identity services | 5,011 | 6,478 | ||
Total revenues | 183,803 | 165,498 | ||
Cost of revenues: | ||||
Media investment management | 117,578 | 107,976 | ||
Advertising agency | 4,243 | 4,864 | ||
Branding and identity services | 3,765 | 4,303 | ||
Total cost of revenues: | 125,586 | 117,143 | ||
Gross profit | 58,217 | 48,355 | ||
Operating expenses: | ||||
Selling and marketing expenses | 38,204 | 36,026 | ||
General and administrative expenses | 17,748 | 16,234 | ||
Total operating expenses | 55,952 | 52,260 | ||
Gain(Loss) from equity method investees | 75 | 350 | ||
Gain from change in fair value of consideration payable | 236 | 309 | ||
Operating profit (loss) | 2,576 | (3,246) | ||
Interest income | 1,026 | 2,255 | ||
Other expense | 792 | 13 | ||
Income (loss) before income tax expense | 2,810 | (1,004) | ||
Income tax expense | 1,409 | 1,472 | ||
Net income (loss) | 1,401 | (2,476) | ||
Net income attributable to noncontrolling interest | 1,005 | 2,229 | ||
Net income (loss) attributable to Charm Communications Inc. | 396 | (4,705) | ||
Net income(loss) attributable to Charm Communications Inc. shareholders per ADS: | ||||
Basic | 0.01 | (0.12) | ||
Diluted | 0.01 | (0.12) | ||
Shares used in computation of net income(loss) per ADS: | ||||
Basic | 39,935,880 | 38,749,125 | ||
Diluted | 40,319,753 | 38,749,125 | ||
Notes: | ||||
(1) Share-based compensation expenses during the period included in: | ||||
Cost of revenues | - | 1 | ||
Selling and marketing expenses | 1,905 | 1,506 | ||
General and administrative expenses | 1,086 | 707 | ||
Total | 2,991 | 2,214 | ||
For the twelve months ended, | ||||
December 31, 2013 | December 31, 2012 | |||
(Unaudited) | (Audited) | |||
Net income (loss) | 1,401 | (2,476) | ||
Other comprehensive income (loss): | ||||
Change in cumulative foreign exchange translation adjustment | 7,212 | 2,268 | ||
Comprehensive income (loss) | 8,613 | (208) | ||
Less: Comprehensive income attributable to non-controlling interest | (959) | (1,758) | ||
Less: Comprehensive income attributable to redeemable non-controlling interest | (299) | (711) | ||
Comprehensive income (loss) attributable to Charm Communications Inc. | 7,355 | (2,677) |
Reconciliation from Net income (loss) to Non-GAAP net income (loss): | ||||
(Amounts in thousands of U.S. dollars) | ||||
For the three months ended, | ||||
December 31 | December 31 | September 30 | ||
Net income (loss) | 2,316 | (4,176) | (639) | |
Add back share-based compensation expenses during the related periods | 544 | 468 | 887 | |
Add back amortization on intangible assets | 230 | 261 | 227 | |
Deduct gain from change in fair value of consideration payable | (236) | (309) | 0 | |
Non-GAAP net income (loss) | 2,854 | (3,756) | 475 | |
For the twelve months ended, | ||||
December 31, | December 31, | |||
Net income (loss) | 1,401 | (2,476) | ||
Add back share-based compensation expenses during the related periods | 2,992 | 2,214 | ||
Add back amortization on intangible assets | 910 | 1,041 | ||
Deduct gain from change in fair value of consideration payable | (236) | (309) | ||
Non-GAAP net income | 5,067 | 470 |
Reconciliation from Turnover (non-GAAP) to USGAAP Revenues: | ||||||
(Amounts in thousands of U.S. dollars) | ||||||
For the three months ended, | ||||||
December 31 | December 31 | September 30 | ||||
Turnover (non-GAAP): | ||||||
Media investment management | 43,684 | 32,042 | 27,740 | |||
Advertising agency | 209,693 | 169,570 | 171,071 | |||
Branding and identity services | N/A | N/A | N/A | |||
Total turnover | 253,377 | 201,612 | 198,811 | |||
Extracted rate: | ||||||
Media investment management | 100.0% | 100.0% | 100.0% | |||
Advertising agency | 8.0% | 7.4% | 6.6% | |||
Branding and identity services | N/A | N/A | N/A | |||
USGAAP Revenue: | ||||||
Media investment management | 43,684 | 32,042 | 27,740 | |||
Advertising agency | 16,781 | 12,512 | 11,284 | |||
Branding and identity services | 1,712 | 2,578 | 1,640 | |||
Total revenue | 62,177 | 47,132 | 40,664 | |||
For the twelve months ended, | ||||||
December 31, | December 31, | |||||
Turnover (non-GAAP): | ||||||
Media investment management | 128,436 | 112,786 | ||||
Advertising agency | 758,246 | 711,093 | ||||
Branding and identity services | N/A | N/A | ||||
Total turnover | 886,682 | 823,879 | ||||
Extracted rate: | ||||||
Media investment management | 100.0% | 100.0% | ||||
Advertising agency | 6.6% | 6.5% | ||||
Branding and identity services | N/A | N/A | ||||
USGAAP Revenue: | ||||||
Media investment management | 128,436 | 112,786 | ||||
Advertising agency | 50,356 | 46,234 | ||||
Branding and identity services | 5,011 | 6,478 | ||||
Total revenue | 183,803 | 165,498 |
Charm Communications Inc. | |||||||
For the three months ended, | |||||||
Dec 31 | Sep 30 | June 30 | March 31 | Year | |||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||
Revenues: | |||||||
Media investment management | 43,684 | 27,740 | 29,556 | 27,456 | 128,436 | ||
Advertising agency | 16,781 | 11,284 | 12,178 | 10,113 | 50,356 | ||
Branding and identity services | 1,712 | 1,640 | 1,117 | 542 | 5,011 | ||
Total revenues | 62,177 | 40,664 | 42,851 | 38,111 | 183,803 | ||
Cost of revenues: | |||||||
Media investment management | 39,491 | 25,246 | 25,720 | 27,121 | 117,578 | ||
Advertising agency | 1,025 | 1,016 | 1,197 | 1,005 | 4,243 | ||
Branding and identity services | 1,498 | 1,049 | 845 | 373 | 3,765 | ||
Total cost of revenues: | 42,014 | 27,311 | 27,762 | 28,499 | 125,586 | ||
Gross profit | 20,163 | 13,353 | 15,089 | 9,612 | 58,217 | ||
Operating expenses: | |||||||
Selling and marketing expenses | 10,781 | 9,681 | 9,026 | 8,716 | 38,204 | ||
General and administrative expenses | 6,117 | 4,365 | 4,462 | 2,804 | 17,748 | ||
Total operating expenses | 16,898 | 14,046 | 13,488 | 11,520 | 55,952 | ||
Gain(Loss) from equity method investees | 30 | 189 | 101 | (245) | 75 | ||
Gain from change in consideration payable | 236 | - | 236 | ||||
Operating profit | 3,531 | (504) | 1,702 | (2,153) | 2,576 | ||
Interest income | 206 | 299 | 85 | 436 | 1,026 | ||
Other expense | (792) | 792 | |||||
Income before income tax expense | 2,945 | (205) | 1,787 | (1,717) | 2,810 | ||
Income tax expense | 629 | 434 | 604 | (258) | 1,409 | ||
Net income | 2,316 | (639) | 1,183 | (1,459) | 1,401 | ||
Net income attributable to noncontrolling interest | (351) | 598 | 468 | 290 | 1,005 | ||
Net income attributable to Charm Communications Inc. | 2,667 | (1,237) | 715 | (1,749) | 396 | ||
Net income(loss) attributable to Charm Communications Inc. shareholders per ADS: | |||||||
Basic | 0.07 | 0.03 | 0.02 | (0.05) | 0.01 | ||
Diluted | 0.07 | 0.03 | 0.02 | (0.05) | 0.01 | ||
Shares used in computation of net income(loss) per ADS: | |||||||
Basic | 40,624,859 | 40,445,764 | 40,211,181 | 38,479,967 | 39,935,880 | ||
Diluted | 40,830,961 | 40,445,764 | 40,329,981 | 38,479,967 | 40,319,753 | ||
Notes: | |||||||
Share-based compensation expenses during the period included in: | |||||||
Cost of revenues | - | - | - | - | - | ||
Selling and marketing expenses | 389 | 436 | 756 | 325 | 1,905 | ||
General and administrative expenses | 155 | 451 | 350 | 130 | 1,086 | ||
Total | 544 | 887 | 1,106 | 455 | 2,991 | ||
For the three months ended, | |||||||
Dec 31 | Sep 30 | Jun 30 | Mar 31 | Year | |||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||
Net income | 2,316 | (639) | 1,183 | (1,459) | 1,401 | ||
Other comprehensive income: | |||||||
Change in cumulative foreign exchange translation adjustment | 3,002 | 936 | 2,608 | 666 | 7,212 | ||
Comprehensive income | 5,318 | 297 | 3,791 | (793) | 8,613 | ||
Less: Comprehensive income attributable to non-controlling interest | (171) | (605) | (278) | (102) | (959) | ||
Less: Comprehensive income attributable to redeemable non-controlling interest | 270 | (192) | (190) | (188) | (299) | ||
Comprehensive income attributable to Charm Communications Inc. | 5,417 | (500) | 3,323 | (1,083) | 7,355 |