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Rediff.com Reports Fiscal 2013 Fourth Quarter and Year-End Results



  Rediff.com Reports Fiscal 2013 Fourth Quarter and Year-End Results

Business Wire

MUMBAI, India -- May 22, 2013

Rediff.com, one of the premier online providers of news, information,
communication, entertainment and shopping services to Indians worldwide, today
announced results for its fourth quarter and fiscal year ended March 31, 2013.

Fourth-quarter revenue in the Company’s core business, India Advertising, grew
9% compared to the third fiscal quarter. This is the third consecutive quarter
that this segment has registered revenue growth. Besides the growth in
quarterly India Advertising revenue, the Company’s other businesses, namely
Ecommerce, Subscriptions and Local TV, achieved fourth-quarter revenue growth
of 19%, 2% and 33%, respectively, compared to the third fiscal quarter.

However, overall revenues for the fourth fiscal quarter, of $4.18 million,
were 10% lower as compared to $4.64 million reported in the fourth fiscal
quarter of the prior fiscal year, ended March 31, 2012. This was primarily
driven by declines in the Company’s Newspaper Publishing business and India
Advertising, although the latter has shown sequential revenue growth over the
most recent three quarters.

The growth in India Advertising business was driven by an increase in spending
by clients in the Banking, Financial Services and Insurance industries, as
well as in the Telecom, Education, Tourism and Real Estate sectors. While the
economic recession has curtailed overall advertising budget dollars, the
Company has seen an increase in advertising spend over the past few quarters
in these industries and sectors.

“Despite challenging economic conditions in India and abroad, our India Online
business has exhibited sequential growth in the last three consecutive
quarters, mainly on account of our focused efforts to diversify our revenue
stream and lessen our dependence on advertising, and due to the improvements
we’ve made to our existing offerings. Over the past few quarters, our team has
worked hard to improve the functionality and look and feel of our site,
improve the news delivery mechanism and expand our ecommerce offering. We
believe this strategy will position us for future growth in the coming years,
especially with the expected improvements in broadband infrastructure in
India,” stated Ajit Balakrishnan, Chairman and Chief Executive Officer,
Rediff.com India Ltd.

Mr. Balakrishnan continued, “Over the past year, concurrent with our efforts
to enhance our offerings and market position, we have also implemented
stringent cost controls throughout the Company and realigned several areas,
resulting in over 15% lower annual operating expenses. As our business
continues to grow, we believe these efforts will result in improved
bottom-line performance. We are focused on building sustainable value for our
shareholders and ensuring we have the resources needed to implement an
aggressive marketing and revenue push, when the time is right.”

Further details of Rediff.com’s results for the fourth fiscal quarter and
fiscal year ended March 31, 2013 are appended in tabular form to this press
release. A script of the earnings result conference call held on May 22, 2013
will also be made available on Rediff’s Investor Information website at
investor.rediff.com.

About Rediff.com

Rediff.com (NASDAQ: REDF) is one of the premier worldwide online providers of
news, information, communication, entertainment and shopping services to
Indians worldwide. Founded in 1996, Rediff.com is headquartered in Mumbai,
India with offices in New Delhi, India and New York, USA.

Safe Harbor

Except for historical information and discussions contained herein, statements
included in this release may constitute "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 reflect
our current expectations. Forward-looking statements are identified by certain
words or phrases such as "may," "will," "aim," "will likely result,"
"believe," "expect," "will continue," "anticipate," "estimate," "intend,"
"plan," "contemplate," "seek to," "future," "objective," "goal," "project,"
"should," "will pursue" and similar expressions or variations of such
expressions. These statements involve a number of risks, uncertainties and
other factors that could cause actual results to differ materially from those
that may be projected by these forward-looking statements. These risks and
uncertainties include but are not limited to the slowdown in the economies
worldwide and in the sectors in which our clients are based, the slowdown in
the Internet and IT sectors worldwide, competition, success of our past and
future acquisitions, attracting, recruiting and retaining highly skilled
employees, technology, acceptance of new products and services, the
development of broadband Internet and 3G networks in India, legal and
regulatory policies, managing risks associated with customer products, the
wide spread acceptance of the Internet as well as other risks detailed in the
Form 20-F and other reports filed by Rediff.com India Limited with the U.S.
Securities and Exchange Commission. Rediff.com India Limited and its
subsidiaries may, from time to time, make additional written and oral
forward-looking statements, including statements contained in the Company's
filings with the Securities and Exchange Commission and our reports to
shareholders. Rediff.com India Limited does not undertake to update any
forward-looking statement that may be made from time to time by or on behalf
of the Company.

 
STATEMENT OF OPERATIONS
QUARTER AND YEAR ENDED MARCH 31, 2013
 
(All figures are in US$ million, unless otherwise indicated below)
 
                              Quarter ended March 31     Year ended March 31
                              2013          2012         2013         2012
Revenues                                                               
India Online                  3.54          3.73         12.53        16.22   
US Publishing                 0.64          0.91         3.13         3.72    
Total Revenues                4.18          4.64         15.66        19.94   
Cost of Revenues*             (2.47   )     (2.35  )     (9.92  )     (10.77 )
Gross Margin                  1.71          2.29         5.74         9.17    
Gross Margin %                41      %     49     %     37     %     46     %
Operating Expenses*           (3.63   )     (3.49  )     (13.80 )     (16.41 )
Operating EBITDA              (1.92   )     (1.20  )     (8.06  )     (7.24  )
Depreciation /                (0.93   )     (0.82  )     (3.67  )     (3.50  )
Amortization
Interest Income               0.43          0.48         1.95         2.58    
Other Income (see note        0.15          0.03         1.56         0.86    
below)
Goodwill impairment           -             -            (2.00  )     -       
Foreign Exchange gain         (0.06   )     0.04         (0.07  )     (0.09  )
(loss)
Equity in net loss of         (0.02   )     (0.01  )     (0.02  )     (0.22  )
equity method investee
Net loss before income        (2.35   )     (1.48  )     (10.31 )     (7.61  )
taxes
Tax                           0.03          0.06         0.03         0.06    
Net loss                      (2.32   )     (1.42  )     (10.28 )     (7.55  )
Net loss per ADS (in US       (0.084  )     (0.051 )     (0.373 )     (0.275 )
dollars)
Net loss per ADS (in US       (0.084  )     (0.051 )     (0.373 )     (0.275 )
dollars) diluted
Weighted average ADS          27.59         27.59        27.59        27.52   
Outstanding (in millions)
* Stock based                                                          
Compensation included in:
Cost of revenue               0.01          0.01         0.05         0.06    
Operating expenses            0.26          0.21         0.71         0.85    
                                                                              

Notes

  * Each ADS represents one half of an equity share.
  * The above numbers are subject to audit. An audit could result in
    adjustments which would result in the audited numbers varying from the
    numbers set forth above.
  * The company established an ESOP trust for the benefit of employees, which
    has acquired 1,015,000 shares (equivalent to 2,030,000 ADSs). These shares
    are treated as treasury stock and therefore are excluded from the EPS
    calculations.
  * During the quarter ended December 31, 2012 the company exited from one of
    its equity investments, which accounted for a one time gain from the sale
    of the investment of US$ 1.4 million included under the heading Other
    Income.

Non-GAAP Measures Note

Operating EBITDA, non-GAAP operating expenses, impairments related to
long-lived assets are the non-GAAP measures in this press release. These
measurements are not recognized under generally accepted accounting principles
(“GAAP”).

Operating EBITDA represents loss from operations prior to adjustments for
depreciation/amortization, non-recurring items and other income or expense and
tax. However, other companies may calculate operating EBITDA differently.
Operating EBITDA is not intended to represent cash flows as defined by
generally accepted accounting principles and should not be considered as an
indicator of cash flow from operations. We have included information
concerning operating EBITDA in this press release because management and our
board of directors use it as a measure of our performance. In addition, future
investment and capital allocation decisions are based on operating EBITDA.
Investors and industry analysts use operating EBITDA to measure the Company’s
performance to historic results and our peer group. The reconciliation between
operating EBITDA and net loss, the GAAP measure, is as follows:

RECONCILIATION FROM OPERATING EBITDA TO NET INCOME
QUARTER AND YEAR ENDED MARCH 31, 2013
 
(All figures are in US$ million)
 
                               Quarter ended March 31     Year ended March 31
                               2013           2012        2013         2012
Operating EBITDA               (1.92  )       (1.20 )     (8.06  )     (7.24 )
Depreciation /                 (0.93  )       (0.82 )     (3.67  )     (3.50 )
Amortization
Interest Income                0.43           0.48        1.95         2.58   
Other Income                   0.15           0.03        1.56         0.86   
Goodwill impairment            -              -           (2.00  )     -      
Foreign Exchange gain          (0.06  )       0.04        (0.07  )     (0.09 )
(loss)
Equity in net loss of          (0.02  )       (0.01 )     (0.02  )     (0.22 )
equity method investee
Net loss before income         (2.35  )       (1.48 )     (10.31 )     (7.61 )
taxes
Tax                            0.03           0.06        0.03         0.06   
Net loss                       (2.32  )       (1.42 )     (10.28 )     (7.55 )
                                                                              

Non-GAAP operating expenses represent our operating expenses comprised of
sales and marketing, product development and general and administrative
expenses excluding depreciation and amortization, impairment of Goodwill and
foreign exchange gain (loss). We have used the non-GAAP operating expense to
compute our operating EBITDA. A reconciliation of the GAAP operating expense
to non-GAAP operating expense is as follows:

RECONCILIATION FROM GAAP TO NON-GAAP OPERATING EXPENSES
QUARTER AND YEAR ENDED MARCH 31, 2013
 
(All figures are in US$ million)
                                                          
                                Quarter ended March 31     Year ended March 31
                                2013           2012        2013        2012
Operating Expenses (GAAP)       4.62           4.27        19.54       20.00  
Depreciation/Amortization       (0.93  )       (0.82 )     (3.67 )     (3.50 )
Goodwill impairment             -              -           (2.00 )     -      
Foreign Exchange gain           (0.06  )       0.04        (0.07 )     (0.09 )
(loss)
Operating Expense               3.63           3.49        13.80       16.41  
(Non-GAAP)

Contact:

Rediff.com India Ltd.
Mandar Narvekar
Investor Relations and Corporate Affairs Contact
+91-22-6182 0000
investor@rediff.co.in
or
GW Communications (U.S.A.)
Glenn Wiener and Jay Morakis
212-786-6011 / 212-786-6037
gwiener@GWCco.com / jmorakis@GWCco.com
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