Tiger Media, Inc. Announces Unaudited Financial Results for the Third Quarter Ended September 30, 2014
Third Quarter 2014 Highlights
-
Net revenues in the third quarter increased 32%
quarter-on-quarter from the second quarter of 2014 to
$0.9 million , and increased 10% year-over-year from the third quarter of 2013; while the cost of revenues decreased slightly by 7% quarter-on-quarter and increased 73% year-over-year. - Gross profit margin in the third quarter turned positive to 14% from negative 22% in the second quarter of 2014, and decreased from 45% year-over-year.
-
Net loss decreased 9% quarter-on-quarter from the second
quarter of 2014 to
$0.8 million and increased 46% year-over-year; while Non-GAAP1 net loss was$0.6 million , decreased by 15% and 2% as compared to that in the second quarter of 2014 and the third quarter of 2013, respectively. -
Net cash provided by operating activities increased to positive
$0.2 million from negative$0.3 million and negative$1.3 million in the second quarter of 2014 and the third quarter of 2013, respectively. -
Average coverage of outdoor LCD screens (“iScreen”) network
during the third quarter of 2014 consisted of 21 luxury shopping malls
and 101 iScreens, including a new prime location of
Shui On Plaza , which remained stable quarter-on-quarter from the second quarter of 2014, and expanded significantly year-over-year from 18 shopping malls and 72 iScreens. - Total available broadcasting hours2 of our iScreen network were 21,559 hours in the third quarter of 2014, as compared to 22,790 and 15,321 hours during the second quarter of 2014 and the corresponding period in 2013, respectively. The utilization rate of our iScreen network was 27% in the third quarter of 2014, as compared to 21% and 34% in the second quarter of 2014 and the third quarter of 2013, respectively.
- The number of active advertisers in the third quarter was 18, a quarter-on-quarter increase by 13% and year-over-year increase by 260%, while the renewal rate of advertisers3 was 44% as compared to 31% in the second quarter of 2014 and 20% in the corresponding period of 2013.
1 |
Tiger Media’s Non-GAAP financial measures are its corresponding GAAP financial measures as adjusted by excluding the effects of all forms of share-based compensation and amortization of intangible assets. |
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2 |
Tiger Media currently sells advertising spaces by locations, that is, all the iScreens installed in the same shopping mall broadcast the same contents simultaneously. The total available broadcasting hours present the full advertising capacity, which are arrived by multiplying the average daily available broadcasting hours by number of shopping malls and by number of days during the period. |
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3 |
The renewal rate is calculated by dividing the number of recurring advertisers by total active advertisers during the period. |
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Third Quarter 2014 Financial Results
-
Net revenues, referring to advertising service revenues, for
the third quarter of 2014 were
$0.9 million , an increase by 32% and 10% as compared to the second quarter of 2014 and the corresponding period in 2013, respectively. The increases were mainly due to the combined effect of two drivers, the increase in active advertisers and average revenue contributed by advertiser. Management plans to further strengthen its sales force to increase the revenues by improving the utilization rate. -
Gross profit was
$0.1 million , as compared to negative$0.1 million in the second quarter of 2014, as a result of the increase in net revenues by 32% and slight decrease in cost of revenues, which resulted in the increase in the iScreen platform utilization rate from 21% to 27%. Gross profit decreased by$0.2 million year-over-year, which was mainly attributable to the significant increase in cost of revenues resulting from the expanded network coverage, despite the 10% increase in net revenues. -
Total operating expenses were
$0.9 million , an increase of 24% and 5% as compared to that in the second quarter of 2014 and the corresponding period in 2013, respectively, which was primarily related to business development, promotion of our iScreen LCD network market opportunities and professional fees. -
Net loss decreased 9% quarter-on-quarter from the second
quarter of 2014 to
$0.8 million as a result of better sales performance; while it increased 46% year-over-year, which was mainly due to the decrease in gross profit ratio to 14% from 45% and the inclusion of gain from extinguishment of acquisition consideration payable of$0.2 million in the third quarter of 2013. Non-GAAP net loss for the third quarter of 2014 was$0.6 million , which decreased by 15% and 2% as compared to the second quarter of 2014 and the corresponding period in 2013, respectively. -
Net loss per basic and diluted share were both
$0.02 for the third quarter of 2014, which was consistent with the second quarter of 2014 and corresponding period in 2013. -
Cash and cash equivalents as of
September 30, 2014 was$4.5 million and shareholders’ equity was$8 million . During the first nine months of 2014, net cash of$0.5 million was used in operating activities and$0.5 million was used to acquire property and equipment, as compared to$4.3 million and$0.6 million , respectively, used during the corresponding period in 2013. -
Net cash provided by operating activities during the third
quarter of 2014 increased to positive
$0.2 million from negative$0.3 million and negative$1.3 million in the second quarter of 2014 and the third quarter of 2013, respectively. This was mainly due to the improved cash collection following the increase in revenue and well-controlled payments.
We further implemented our strategy change for our current iScreen
advertising business, that is, to optimize and adjust our current
network locations in
“In addition, by utilizing various capabilities on our iScreen in
“For the current iScreen business, we continue to expand the advertiser base and increase the average contribution per advertiser. Our advertisers’ base continued to expand quarter-on-quarter, together with a renewal rate of 44% during the third quarter,” Mr. Wang added.
Updates on Alliance with DiningCity and Online Lottery Platform
The campaign executed in the second quarter of 2014 with DiningCity in two locations was one of Tiger Media’s initial attempts to utilize the iScreen network’s interactive capabilities to book tables from restaurants nearby, which was completed in the third quarter of 2014. This interactive campaign attracted customers’ attention and received positive feedback and the Company will continue to seek similar cooperation in the future.
Our lottery platform in alliance with 9188.com, a leading online lottery
platform in
“With the WiFi and 3G capabilities on our iScreen, there have been
approximately 140,000 connections to our hot-spots services to date.
Although at this stage, we mainly utilize these capabilities to deliver
our customers’ advertisements to the audience through our digital
distribution platform, there are opportunities for us to launch other
interactive projects,”
Termination of
Through the contractual arrangement reached with Home Inns in
ABOUT
DISCUSSION OF NON-GAAP FINANCIAL MEASURES
In addition to disclosing financial results prepared in accordance with U.S. GAAP, the Company’s earnings release contains non-GAAP financial measures that exclude the effects of all forms of share-based compensation and amortization of intangible assets. The reconciliation of these non-GAAP financial measures to the nearest GAAP measures is set forth in the table captioned “Reconciliation of GAAP to Non-GAAP Results” below.
The non-GAAP financial measures disclosed by the Company should not be considered a substitute for financial measures prepared in accordance with U.S. GAAP. The financial results reported in accordance with U.S. GAAP and reconciliation of GAAP to non-GAAP results should be carefully evaluated. The non-GAAP financial measure used by the Company may be prepared differently from and, therefore, may not be comparable to similarly titled measures used by other companies.
When evaluating the Company’s operating performance in the periods presented, management reviewed non-GAAP net income results reflecting adjustments to exclude the impacts of share-based compensation and amortization of intangible assets to supplement U.S. GAAP financial data. As such, the Company believes that the presentation of the non-GAAP financial measures provides important supplemental information to investors regarding financial and business trends relating to the Company’s financial condition and results of operations in a manner consistent with that used by management. Pursuant to U.S. GAAP, the Company recognized significant amounts of expenses for the restricted shares and share options and amortization of intangible assets in the periods presented. To make financial results comparable period by period, the Company utilized the non-GAAP financial results to better understand its historical business operations.
FORWARD-LOOKING STATEMENTS
Any statements contained in this press release that do not describe historical facts, including statements about Tiger Media’s beliefs and expectations, may constitute forward-looking statements as that term is defined by the United States Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expect,” “anticipate,” “future,” “intend,” “plan,” “believe,” “estimate,” “confident” and similar statements. Any forward-looking statements contained herein are based on current expectations, but are subject to a number of risks and uncertainties that may cause actual results to differ materially from expectations.
Potential risks and uncertainties include, but are not limited to:
whether management can strengthen its sales force to increase revenues
through an increased utilization rate; whether we will be able to secure
two additional prime locations for our iScreen network; whether we will
be able to explore related and complementary projects using our iScreen
capabilities; whether we will be able to achieve increased revenue from
the cosmetics and personal care markets, as well as the consumer
products and services industry; whether we will be able to pursue
strategic opportunities and acquisitions to expand our business,
including opportunities within
Tiger Media, Inc. | ||||||
Condensed Consolidated Balance Sheet | ||||||
(U.S. Dollars in thousands) | ||||||
(unaudited) | ||||||
As of | ||||||
September 30, 2014 | December 31, 2013 | |||||
ASSETS | ||||||
CURRENT ASSETS | ||||||
Cash and cash equivalents | 4,548 | 5,605 | ||||
Accounts receivable, net | 1,147 | 1,563 | ||||
Amount due from related parties | - | 40 | ||||
Prepaid expenses and other current assets | 513 | 799 | ||||
Deferred tax assets | 185 | 37 | ||||
Total current assets | 6,393 | 8,044 | ||||
NON-CURRENT ASSETS | ||||||
Property and equipment, net | 1,478 | 1,584 | ||||
Long-term deferred expenses | 697 | 917 | ||||
Intangible assets | 1,726 | 2,001 | ||||
Total non-current assets | 3,901 | 4,502 | ||||
Total assets | 10,294 | 12,546 | ||||
LIABILITIES & SHAREHOLDERS' EQUITY | ||||||
CURRENT LIABILITIES | ||||||
Accounts payable | 1,262 | 1,196 | ||||
Acquisition consideration payable | 460 | 464 | ||||
Amounts due to related parties | 167 | 73 | ||||
Deferred revenue | 163 | 9 | ||||
Accrued expenses and other payables | 220 | 235 | ||||
Income taxes payable | - | 4 | ||||
Total current liabilities | 2,272 | 1,981 | ||||
Total liabilities | 2,272 | 1,981 | ||||
Shareholders’ equity | 8,022 | 10,565 | ||||
Total liabilities and shareholders' equity | 10,294 | 12,546 | ||||
Tiger Media, Inc. | |||||||||||||||
Condensed Statements Of Operations | |||||||||||||||
(U.S. Dollars in thousands, except for share data, per share data and percentages) | |||||||||||||||
(unaudited) | |||||||||||||||
Three months ended | Nine months ended | ||||||||||||||
September | June 30, | September | September | September | |||||||||||
30, 2014 | 2014 | 30, 2013 | 30, 2014 | 30, 2013 | |||||||||||
Net revenues | 879 | 667 | 802 | 2,048 | 906 | ||||||||||
Cost of revenues | (756) | (816) | (438) | (2,430) | (774) | ||||||||||
Gross profit/(loss) | 123 | (149) | 364 | (382) | (132) | ||||||||||
Operating expenses: | |||||||||||||||
Sales and marketing expenses | (291) | (198) | (254) | (697) | (468) | ||||||||||
General and administrative expenses | (647) | (560) | (836) | (1,911) | (2,660) | ||||||||||
Gain from extinguishment of acquisition consideration payable | - | - | 198 | - | 198 | ||||||||||
Loss from operations | (815) | (907) | (528) | (2,990) | (2,798) | ||||||||||
Interest income | 33 | 19 | 4 | 52 | 10 | ||||||||||
Other income/(expense), net | (13) | (16) | - | (29) | 3 | ||||||||||
Foreign currency exchange loss, net | - | - | - | - | (3) | ||||||||||
Loss before tax | (795) | (904) | (524) | (2,967) | (2,788) | ||||||||||
Income tax expense | 10 | 42 | (12) | 153 | 187 | ||||||||||
Net loss | (785) | (862) | (536) | (2,814) | (2,601) | ||||||||||
Loss per share, basic | (0.02) | (0.02) | (0.02) | (0.08) | (0.08) | ||||||||||
Loss per share, diluted | (0.02) | (0.02) | (0.02) | (0.08) | (0.08) | ||||||||||
Basic | 36,405,997 | 35,600,736 | 32,232,760 | 36,395,255 | 30,958,634 | ||||||||||
Diluted | 36,405,997 | 35,600,736 | 32,232,760 | 36,395,255 | 30,958,634 | ||||||||||
Shares outstanding at end of period | 36,405,997 | 35,600,736 | 32,232,760 | 36,405,997 | 32,232,760 | ||||||||||
Tiger Media, Inc. | |||||||||||||||
Condensed Statements Of Cash Flows | |||||||||||||||
(U.S. Dollars in thousands) | |||||||||||||||
(unaudited) | |||||||||||||||
Three months ended | Nine months ended | ||||||||||||||
September | June 30, | September | September | September | |||||||||||
30, 2014 | 2014 | 30, 2013 | 30, 2014 | 30, 2013 | |||||||||||
Net cash provided by/ (used in) operating activities | 201 |
(250) |
(1,274) | (535) | (4,309) | ||||||||||
Net cash used in investing activities | (240) | (129) | (104) | (526) | (586) | ||||||||||
Foreign currency translation adjustment | (2) |
33 |
17 | 4 | 322 | ||||||||||
Net decrease in cash and cash equivalents | (41) | (346) | (1,361) | (1,057) | (4,573) | ||||||||||
Cash and cash equivalents at beginning of period | 4,589 | 4,935 | 3,997 | 5,605 | 7,209 | ||||||||||
Cash and cash equivalents at end of period | 4,548 | 4,589 | 2,636 | 4,548 | 2,636 | ||||||||||
Tiger Media, Inc. | |||||||||||||||
Reconciliation of GAAP to Non-GAAP Results | |||||||||||||||
(U.S. Dollars in thousands) | |||||||||||||||
(unaudited) | |||||||||||||||
Three months ended | Nine months ended | ||||||||||||||
September 30, 2014 | June 30, 2,014 | September 30, 2013 | September 30, 2014 | September 30, 2013 | |||||||||||
Net loss | (785) | (862) | (536) | (2,814) | (2,601) | ||||||||||
Adjustments related to: | |||||||||||||||
Share-based compensation | 95 | 71 | 34 | 293 | 245 | ||||||||||
Amortization of intangible assets | 92 | 91 | 92 | 275 | 107 | ||||||||||
Gain from extinguishment of acquisition consideration payable | - | - | (198) | - | (198) | ||||||||||
Gain on disposal of subsidiaries | - | - | - | - | (2) | ||||||||||
Adjusted net loss (non-GAAP)* | (598) | (700) | (608) | (2,246) | (2,449) | ||||||||||
* The non-GAAP adjustments do not take into consideration the impact of taxes on such adjustments. |
Source:
Tiger Media, Inc.
Peter Tan, 1-381-709-7881
ir@tigermedia.com