SHANGHAI, Dec. 7 /PRNewswire-Asia/ -- Focus Media Holding Limited , China's largest digital media group, today announced its unaudited financial results for the third quarter ended September 30, 2009.
Basis of Presentation
On December 22, 2008, the Company announced that it entered into a definitive agreement with SINA Corporation ("SINA") to sell substantially all of the assets of Focus Media's digital out-of-home advertising networks, including the LCD display network, poster frame network and certain in-store network. The assets to be sold to SINA were recorded as an asset group held-for-sale in accordance with US GAAP, and were not depreciated or amortized nor were they subject to the same impairment analysis as assets held and used in continuing operations. Therefore, the GAAP and Non-GAAP financial measures related to the asset group to be sold to SINA for the quarters ended on March 31, 2009 and June 30, 2009 did not include any amortization or depreciation expenses related to the intangible and fixed assets or impairment of fixed assets. On September 28, 2009, the Company and SINA jointly reached a decision not to extend the deadline of the agreement announced on December 22, 2008. As such, the assets proposed to be sold to SINA, were reclassified for financial reporting purpose, as assets to be held and used. In accordance with US GAAP, the Company recorded depreciation expense of $17.0 million on September 28, which represented the cumulative catch-up of depreciation expenses the Company would have recorded during the period from December 22, 2008 to June 30, 2009. During the first quarter of 2009, the Company also announced that it would cease expansion of its digital poster frame networks and, in response to a regulation promulgated by Shanghai Municipality Government in early 2009, the operation of its boat-based advertising platform on the Huangpu River. In accordance with US GAAP, the digital poster frame and the boat-based advertising platform, as part of the asset group to be sold to SINA, were not subject to the same impairment analysis as assets held and used in continuing operations. With the termination of the agreement with SINA in the third quarter of 2009, the assets were reevaluated for impairment, resulting in the Company impairing these assets and recording an impairment charge of $36.0 million in cost of sales for the third quarter of 2009.
The effect of the cumulative catch-up depreciation expenses amounted to $17.0 million, without considering tax effect, and was recorded as cost of sales in both our GAAP and Non-GAAP measures.
In August 2009, the Company started to negotiate with the ex-shareholders of various subsidiaries within the Internet division to sell back part of the equity interests held by the Company in those entities in exchange for the reduction of future earn-out payments. Some of these partial equity disposal transactions were closed towards the end of August. As a result, some of these entities no longer met the criteria for consolidation and were therefore deconsolidated and accounted for as cost or equity method investments from September 2009 onwards. The Company consolidated, in the third quarter of 2009, the results of operations from these entities up to the date of the partial equity disposal transactions. The total net revenues and gross profit for these entities included in the Company's consolidated statement of income for the third quarter of 2009 was $28.6million and $5.1 million, respectively, without considering tax effect. The net revenues and gross profit from these entities will no longer be consolidated by the Company after the dates of the partial equity disposal transactions.
Highlights for Third Quarter 2009: -- Total net revenue for third quarter 2009 was $166.6 million, declining 3% from $171.3 million for the second quarter of 2009 and declining 26% from $224.8 million for the third quarter of 2008. The aggregate net revenue for the LCD display network, in-store network and poster frame network (previous classified within discontinued operations) was $85.8 million, surpassing the high end of Company's previous guidance of $81.5 million; The aggregate net revenue for the movie theatre and outdoor traditional billboard network and Internet advertising services (previously classified within continuing operations) was $80.8 million. The Internet advertising services division had aggregate net revenue of $68.3 million, of which $28.6 million was attributable to subsidiaries that were deconsolidated by the Company in September 2009 and which will be accounted for as cost or equity method investments in future periods. The high end of the Company's previous guidance for the continuing operations was $47 million for the third quarter of 2009. -- Net loss attributable to shareholders was $127.6 million or a loss of $0.99 per fully diluted ADS, compared to net loss attributable to shareholders of $23 million for the second quarter of 2009, or a loss of $0.18 per fully diluted ADS and net income attributable to shareholders of $51.4 million for the third quarter of 2008 or an income of $0.38 per fully diluted ADS. -- Non-GAAP net income for the third quarter of 2009 was $7.9 million, compared to non-GAAP net income of $28.2 million for the second quarter of 2009 and non-GAAP net income of $71.4 million for the third quarter of 2008. The catch-up of depreciation expenses from LCD display network, poster frame network and in-store network reflected in the results of operation for the third quarter of 2009 was $16.9 million or $13.6 million, net of tax; Non-GAAP net income attributable to deconsolidated subsidiaries from Internet advertising services division was $0.9 million, net of tax and minority interests. -- Cash and cash equivalents was $383.1 million as of September 30, 2009, an increase of 4% from $367.9 million as of June 30, 2009. -- Gross accounts receivable for the LCD display network, in-store network and poster frame network (previous classified as discontinued operations) was $141.5 million as of September 30, 2009, a decline of 6.2% from $150.9 million as of June 30, 2009. Gross accounts receivable for the movie theatre and outdoor traditional billboard network and Internet advertising services (previously classified within continuing operations), was $113.2 million as of September 30, 2009, a decline of 11% from $127.0 million as of June 30, 2009. -- Capital expenditures were $0.9 million for the third quarter of 2009. -- Contingent earn-out payments related to historical acquisitions paid in the third quarter of 2009 were $5.3 million, mostly attributable to poster frame network.
Jason Jiang, chairman and CEO of Focus Media said, "During this quarter, we have been doing restructurings on multiple business divisions, which lined up as follows: Firstly, we partially disposed of our equity ownership in some acquired subsidiaries in the Internet advertising service division and outdoor traditional billboard division. As a result, we expect to significantly reduce the potential earn-out payments in these two business divisions in the future. Secondly, we terminated the acquisition contracts or renegotiated the earn-out payments with a few under-performing subsidiaries in our poster frame division and meanwhile, expedited the integration of those subsidiaries acquired in previous years. In this way, we enhanced the control over these subsidiaries and, on the other hand, significantly reduced the contingent earn-out payments as well. Though during the past few quarters our poster frame business has performed less satisfactorily due to multiple reasons, such as changes in senior management, the ongoing renegotiation over earn-out payments, fierce competition and over-investment in fixed assets in previous years, we believe that this business division will be back on track with the progress of our integration processes and we expect to see improvement for the fourth quarter and the following quarters. Thirdly, the termination of the agreement with SINA in this quarter enabled us to reevaluate some non-performing assets on our balance sheet, such as the idle digital frames due to ceasing expansion of our digital frame network and the boat-based advertising platform in response to certain new regulations. As a result of these reevaluations, we made impairment charges of $38.8 million on those assets. Through the above mentioned measures, we believe that the assets impairment and disposal losses, which have been negatively affecting our company since the last quarter of 2008 will come to the end by early 2010."
Jason continued, "Going forward, we will focus on our core business and primarily seek organic growth. At the same time, financial discipline will be rigorously followed in our decision-making processes."
Third Quarter 2009 financial results
Advertising net revenue from the LCD display network was $56.0 million for the third quarter of 2009, a slight increase of 4% from $54.3 million for the second quarter of 2009 but a 32% decline from $73.7 million for the third quarter of 2008.
Advertising net revenue from the poster frame network was $22.1 million for the third quarter of 2009, declining from $26.5 million for the second quarter of 2009 and from $44.0 million for the third quarter of 2008 by 17% and 50%, respectively.
Advertising net revenue from the in-store network was $7.6 million for the third quarter of 2009, a 16% decline from $9.0 million for the second quarter of 2009 and a slight increase of 7% from $7.1 million for the third quarter of 2008.
As of September 30, 2009, the total installed base of LCD displays in our commercial location network was 130,890 nationwide, including 125,467 displays through our directly owned networks, and 5,423 displays through our regional distributors, as compared to 133,514 as of June 30, 2009. The total number of non-digital frames available for sale in our poster frame network was 225,762 as of September 30, 2009, as compared to 246,095 as of June 30, 2009. In addition, as of September 30, 2009, we had 36,539 digital frames installed in our poster frame network, as compared to 38,893 as of June 30, 2009. The decline in the number of displays and frames was primarily attributable to continuing optimization of our network. The total number of displays installed in our in-store network was 45,195 as of September 30, 2009, as compared to 44,783 as of June 30, 2009.
Advertising net revenue from the movie theater and outdoor traditional billboard network was $12.5 million in the third quarter of 2009, representing a decrease of 15.4% from $14.8 million for the second quarter of 2009 and a 36.3% decrease from $19.6 million for the third quarter of 2008.
Internet advertising service net revenue was $68.3 million in the third quarter of 2009, compared to $66.7 million for the second quarter of 2009 and $70.8 million for the third quarter of 2008. The revenues from fully and partially disposed subsidiaries contributed $28.6 million and $30.9 million to the Internet advertising service revenue for the third quarter and the second quarter of 2009, respectively.
Non-GAAP gross profit for the LCD display network for the third quarter of 2009 was $33.7 million, compared to $44.3 million for the second quarter of 2009 and $58.0 million for the third quarter of 2008. The catch-up of depreciation expenses reflected in the results of operations from the LCD display network was $7.6 million for the third quarter of 2009.
Non-GAAP gross profit for the poster frame network for the third quarter of 2009 was $1.7 million, compared to $13.6 million for the second quarter of 2009 and $29.8 million for the third quarter of 2008. The catch-up of depreciation expenses reflected in the results of operations from the poster frame network was $5.2 million for the third quarter of 2009.
Non-GAAP gross loss for the in-store network for the third quarter of 2009 was $3.3 million, compared to Non-GAAP gross profit of $2.9 million for the second quarter of 2009 and Non-GAAP gross profit of $4.6 million for the third quarter of 2008. The catch-up of depreciation expenses reflected in the results of operations from the in-store network was $3.3 million for the third quarter of 2009.
Non-GAAP gross profit for the movie theater and outdoor billboard networks for the third quarter of 2009 was $3.7 million, representing a 21.2% decline from $4.7 million for the second quarter of 2009 and a 48% decline from $7.1 million for the third quarter of 2008.
Non-GAAP gross profit from our Internet advertising services for the third quarter of 2009 was $13.2 million, increasing by 23% from $10.7 million for the second quarter of 2009 but declining by 21% from $16.8 million for the third quarter of 2008. The gross profit from fully and partially disposed subsidiaries were $5.0 million and $5.0 million for the third quarter and the second quarter of 2009, respectively.
Non-GAAP operating expense for the third quarter of 2009 was $34.6 million, compared to $43.2 million for the second quarter of 2009 and $37.2 million for the third quarter of 2008. The catch-up of depreciation expenses contributed $0.9 million to the operating expense for the third quarter of 2009.
Business Outlook for Fourth Quarter 2009
The Company provides the following guidance with respect to the fourth quarter ending December 31, 2009:
Net revenues for LCD display networks, In-store networks and Poster frame networks are expected to be no less than $92.0 million. Net revenues for Movie theatre and traditional outdoor billboard and internet advertising services are expected to be no less than $39 million.
Announced termination of merger
On September 28, 2009, the Company and SINA jointly reached a decision not to extend the deadline of the agreement announced on December 22, 2008 to sell substantially all of the assets of Focus Media's digital out-of-home advertising networks, including the LCD display network, poster frame network and certain in-store network.
Continue disposal of equity ownerships in some subsidiaries of our internet advertising business
We plan to continue dispose the equity ownerships in some subsidiaries in our Internet division in the fourth quarter of 2009.
Announced subscription for ordinary shares by Executive Chairman
On September 23, 2009, the Company announced that the Executive Chairman and CEO, Jason Jiang, and the Company entered into a definitive agreement pursuant to which the Company issued and sold to Mr. Jiang, and Mr. Jiang will subscribe for and purchase, 75,000,000 ordinary shares of the Company at a subscription price of US$1.899 per share (equivalent to US$9.495 per ADR), representing the average closing sale price of the Company's shares (adjusted for the share-to-ADS ratio) during the twenty consecutive trading day period immediately preceding September 23, 2009. The aggregate subscription price was $142,425,000. On November 20, 2009, the Company announced the completion of this subscription.
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 September 30, 2009 GAAP (1) (2) (3) (4) (5) Non-GAAP Gross Profit LCD display network 17,177 306 3,607 -- 3,169 9,462 33,721 Poster Frame network (30,420) -- 5,131 -- -- 26,983 1,695 In-store network (3,844) -- -- -- -- 516 (3,329) Internet advertising 4,051 -- 962 -- 8,185 -- 13,198 Movie Theater & Outdoor Billboard network 3,001 -- 663 -- -- -- 3,663 Total Gross Profit (10,036) 306 10,363 -- 11,354 36,961 48,949 Operating Expense 120,320 (8,467) (3,501) (25,944) (45,946) (1,872) 34,589 Operating profit (loss) (130,355) 8,773 13,865 25,944 57,300 38,834 14,360 Net income (loss) (127,598) 8,773 13,865 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, goodwill. (5).Impairment and termination charges related to ceasing expansion of digital poster frame networks and boat-based advertising platform. Three months ended June 30, 2009 GAAP (1) (2) (3) (4) (5) Non-GAAP Gross Profit LCD display network 43,668 667 -- -- -- -- 44,335 Poster Frame network 13,641 -- -- -- -- -- 13,641 In-store network 2,942 -- 6 -- -- -- 2,948 Internet advertising 5,748 -- 1,565 -- 3,395 -- 10,708 Movie Theater & Outdoor Billboard network 3,877 -- 868 -- -- -- 4,745 Total Gross Profit 69,876 667 2,439 -- 3,395 -- 76,378 Operating Expense 87,863 (10,030) (1,841) (1,212) (29,053) (2,528) 43,200 Operating profit (loss) (17,986) 10,697 4,280 1,212 32,447 2,528 33,178 Net income (loss) (22,971) 10,697 4,280 1,212 32,447 2,528 28,193 (1). Share-based compensation. (2). Amortization of acquired intangible assets. (3). Loss from disposal of previously acquired subsidiaries. (4). Impairment charges of acquired intangible assets and goodwill. (5). Impairment charges of fixed assets. Three months ended September 30, 2008 GAAP (1) (2) Non-GAAP Gross Profit LCD display network 56,698 438 878 58,014 Poster Frame network 27,195 2,618 29,813 In-store network 3,667 897 4,564 Internet advertising 16,061 690 16,751 Movie Theater & Outdoor Billboard network 6,078 976 7,054 Total Gross Profit 109,699 438 6,060 116,197 Operating Expense 50,789 (10,372) (3,202) 37,214 Operating profit 58,910 10,810 9,262 78,982 Net income 51,350 10,810 9,262 71,422 (1). Share-based compensation. (2). Amortization of acquired intangible assets. Nine months ended September 30, 2009 GAAP (1) (2) (3) (4) Gross Profit LCD display network 83,543 1,219 3,607 -- 3,168 Poster Frame network (5,587) -- 5,131 -- -- In-store network 1,175 -- 15 -- -- Internet advertising 18,779 -- 4,097 -- 11,580 Movie Theater & Outdoor Billboard network 11,926 -- 2,503 -- -- Total Gross Profit 109,836 1,219 15,353 -- 14,748 Operating Expense 262,479 (26,373) (7,254) (27,156) (84,270) Operating profit (loss) (152,643) 27,593 22,607 27,156 99,018 Net income (loss) (156,264) 27,593 22,607 27,156 99,018 (5) (6) (7) Non-GAAP Gross Profit LCD display network 9,462 -- -- 101,001 Poster Frame network 26,983 -- -- 26,528 In-store network 516 -- -- 1,706 Internet advertising -- -- -- 34,456 Movie Theater & Outdoor Billboard network -- -- -- 14,429 Total Gross Profit 36,961 -- -- 178,118 Operating Expense (1,872) (2,528) (2,466) 110,560 Operating profit (loss) 38,834 2,528 2,466 67,558 Net income (loss) 29,593 2,528 2,466 54,697 (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 $4.9 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, goodwill. (5). Impairment and termination charges related to ceasing expansion of digital poster frame networks and boat-based advertising platform. (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. Nine months ended September 30, 2008 GAAP (1) (2) Non-GAAP Gross Profit LCD display network 136,597 1,162 2,846 140,605 Poster Frame network 66,375 -- 7,314 73,689 In-store network 2,287 -- 2,636 4,923 Internet advertising 45,399 -- 4,898 50,297 Movie Theater & Outdoor Billboard network 13,873 -- 2,869 16,742 Total Gross Profit 264,531 1,162 20,563 286,256 Operating Expense 133,806 (28,693) (9,806) 95,307 Operating profit 130,725 29,855 30,369 190,949 Net income from continuing operations 111,690 29,855 30,369 171,914 (1). Share-based compensation. (2). Amortization of acquired intangible assets. CONFERENCE CALL
The Company will host a conference call to discuss the third quarter 2009 results at 8:00 p.m. U.S. Eastern Time on December 7, 2009 (5:00 p.m. U.S. Pacific Time on December 7, 2009 and 9:00 a.m. Beijing/Hong Kong Time on December 8, 2009). The dial-in details for the live conference call are set forth below: U.S. Toll Free Number +1.800.299.0148, Hong Kong dial-in number +852.3002.1672, International dial-in number +1.617.801.9711; Pass code: 18781737.
A replay of the call will be available from December 7, 2009 11:00 pm until December 14, 2009 (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 43877318. 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 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 September 30, 2009, Focus Media's digital out-of-home advertising network had approximately 125,000 LCD display in its LCD display network and approximately 262,000 advertising in-elevator poster and digital frames, installed in over 90 cities throughout China, and approximately 130 outdoor LED billboard displays in Shanghai and Beijing. For more information about Focus Media, please visit our website athttp://ir.focusmedia.cn.
Focus Media Holding Limited UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (U.S. Dollars in Thousands) 2009-9-30 2009-6-30 ASSETS Current assets Cash and cash equivalents 383,107 96,186 Hold-to-maturity investment 29,287 -- Accounts receivable, net 222,070 121,544 Prepaid expenses and other current assets 19,800 13,537 Deposit paid for acquisition of subsidiaries 5,914 21,859 Amount due from related parties 8,717 7,638 Rental deposits 32,433 9,115 Other current assets 7,234 21,894 Available-for-sale assets, current -- 475,531 Total current assets 702,648 745,445 Rental deposits 5,657 114 Equipment, net 84,916 5,438 Acquired intangible assets, net 71,234 63,631 Goodwill 422,329 35,507 Other long term assets 14,468 7,080 Available-for-sale assets, non-current -- 615,751 Total assets 1,301,252 1,472,966 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Accounts payable 85,477 68,676 Accrued expenses and other current liabilities 102,305 71,242 Income taxes payable 24,703 12,939 Amount due to related parties 10,585 14,491 Available-for-sale liabilities, current -- 108,086 Deferred tax liabilities 447 -- Total current liabilities 223,517 275,434 Available-for-sale liabilities, non-current -- 1,853 Deferred tax liabilities 9,635 10,146 Total liabilities 233,152 287,433 Shareholders' equity Ordinary shares 32 32 Additional paid in capital 1,689,630 1,678,667 Accumulated deficit (690,232) (562,632) Accumulated other comprehensive income 65,434 67,751 Total shareholders' equity 1,064,864 1,183,818 Noncontrolling interests 3,236 1,715 Total equity 1,068,100 1,185,533 Total liabilities and shareholders' equity 1,301,252 1,472,966 Focus Media Holding Limited UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS (U.S. Dollar in thousands, except Earning per ADS and ADS data) Three months ended Nine months ended 2009-9-30 2009-6-30 2008-9-30 2009-9-30 2008-9-30 Revenues LCD display network 60,509 59,943 81,501 158,764 202,566 In-store network 8,450 9,900 18,513 25,365 56,387 Poster Frame network 24,155 29,254 48,187 79,216 120,791 Movie Theater & Outdoor Billboard network 12,802 15,030 20,289 47,678 57,726 Internet advertising 69,755 68,956 73,253 187,650 203,561 Total gross revenues 175,671 183,083 241,743 498,673 641,031 Less: Sales taxes 9,114 11,785 16,930 30,274 42,912 Net revenue 166,557 171,298 224,813 468,399 598,119 Cost of revenues LCD display network 38,830 10,678 17,014 61,135 47,939 In-store network 11,490 6,025 13,098 21,782 48,769 Poster Frame network 52,550 12,858 16,766 77,752 44,078 Movie Theater & Outdoor Billboard network 9,486 10,885 13,531 34,534 41,742 Internet advertising 64,237 60,976 54,705 163,360 151,060 Total cost of revenues 176,593 101,422 115,114 358,563 333,588 Gross profit (loss) (10,036) 69,876 109,699 109,836 264,531 Operating expenses General and administrative 22,257 29,249 26,436 77,898 65,706 Selling and marketing 36,209 31,340 28,353 89,571 78,157 Impairment loss 37,232 27,078 73,581 Other operating expenses (income), net 24,621 195 (4,000) 21,429 (10,057) Total operating expenses 120,319 87,862 50,789 262,479 133,806 Operating income (loss) (130,355) (17,986) 58,910 (152,643) 130,725 Interest income 1,049 1,342 1,747 3,980 5,267 Income (loss) from continuing operations before income taxes (129,307) (16,644) 60,654 (148,663) 135,992 Provision for income taxes (4,667) 6,104 8,404 4,400 22,205 Net income (loss) (124,639) (22,748) 52,250 (153,063) 113,787 Less: Net income(loss) attributable to noncontrolling interests 2,958 223 900 3,201 2,097 Net Income (loss) from continuing operations (127,598) (22,971) 51,350 (156,264) 111,690 Net Income from discontinued operations, net of tax (78,017) Net Income (loss) attributable to shareholders (127,598) (22,971) 51,350 (156,264) 33,673 Income (loss) per ADS from continuing operations -basic (0.99) (0.18) 0.39 (1.21) 0.86 -diluted (0.99) (0.18) 0.38 (1.21) 0.84 Income (loss) per ADS from discontinuing operations -basic (0.60) -diluted (0.59) Income (loss) per ADS -basic (0.99) (0.18) 0.39 (1.21) 0.26 -diluted (0.99) (0.18) 0.38 (1.21) 0.25 Shares used in calculating basic income/ (loss) per ADS 129,308,337 129,223,942 131,541,174 129,232,838 130,363,120 Shares used in calculating diluted income/(loss) per ADS 129,308,337 129,223,942 133,729,070 129,232,838 133,048,334 FOCUS MEDIA HOLDING LIMITED UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASHFLOWS (U.S. Dollar in thousands) Three months ended 2009-9-30 2009-6-30 2008-9-30 Operating activities: Net loss (124,639) (22,748) 52,250 Adjustments to reconcile net income/(loss) to net cash provided by operating activities: Bad debt provision 7,602 11,240 5,923 Share-based compensation 8,773 10,586 10,810 Depreciation and amortization 26,353 671 8,150 Amortization of acquired intangible assets 13,864 4,280 9,262 Loss and impairment on disposal of equity interest of subsidiaries and certain other assets 25,944 115 -- Loss from impairment of certain other assets 7,285 -- -- Gain on earn out payment renegotiation -- 1,052 -- Impairment charges for goodwill, acquired intangible assets and fixed assets 96,134 33,938 -- Loss on disposal of fixed assets 955 113 405 Changes in assets and liabilities, net of effects of acquisitions (18,199) (11,433) (51,381) Net cash provided by operating activities 36,786 27,814 35,418 Investing activities: Purchase of equipment and other long term assets (854) (2,787) (17,028) Purchase of subsidiaries, net of cash acquired (5,311) (61,446) (14,429) Investment in a joint venture -- -- (2,970) Deposits paid to acquire subsidiaries -- -- (901) Disposal of subsidiaries (17,403) -- -- Sales /(purchase) of equity securities and bank notes 324 (146) 39,025 Proceeds received from disposal of fixed assets -- 195 -- Net cash provided /(used) in investing activities (23,244) (64,184) 3,697 Financing activities: Proceeds from issuance of ordinary shares, net of issuance costs 1,919 -- 1,822 Repurchase of ordinary shares -- -- (29,998) Net cash provided by/(used in) financing activities 1,919 -- (28,176) Effect of exchange rate changes (238) 672 717 Net increase (decrease) in cash and cash equivalents 15,223 (35,698) 11,656 Cash and cash equivalents, beginning of period 367,884 403,582 361,516 Cash and cash equivalents, end of period 383,107 367,884 373,172 Supplemental disclosure of cash flow information: Income taxes paid 1,597 3,728 6,037 Supplemental disclosure of non-cash investing activity: Acquisition of subsidiaries: Accounts payable 16,967 1,842 14,777
Focus Media Holding Limited
CONTACT: Investor and Media contact - Jing Lu, +86-21-2216-4155, or
ir@focusmedia.cn
Web site: http://ir.focusmedia.cn/
