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VisionChina Media Inc. Announces First Quarter 2013 Results

         VisionChina Media Inc. Announces First Quarter 2013 Results

PR Newswire

BEIJING, June 13, 2013

BEIJING, June 13, 2013 /PRNewswire/ -- VisionChina Media Inc. ("VisionChina
Media" or the "Company") (Nasdaq: VISN), one of China's largest out-of-home
digital television advertising networks on mass transportation systems, today
announced its unaudited financial results for the quarter ended March 31,
2013.

Key Quarterly Financial and Operating Data for the First Quarter of 2013

Total revenues in the first quarter of 2013 were $17.1 million.

Gross loss in the first quarter of 2013 was $5.1 million.

Operating loss in the first quarter of 2013 was $14.4 million.

Net loss attributable to VisionChina Media shareholders in the first quarter
of 2013 was $14.6 million.

In the first quarter of 2013, the Company's non-GAAP financial measure, net
loss attributable to VisionChina Media shareholders excluding share-based
compensation expenses and provision for contingent loss in connection with
litigation, was $12.8 million.

Basic and diluted net loss per American Depositary Share ("ADS[1]")
attributable to VisionChina Media shareholders in the first quarter of 2013
was $2.87 and $2.87, respectively (one ADS represents twenty ordinary shares).

The Company had cash and cash equivalents of $46.7 million as of March 31,
2013. Net cash used in operating activities was $5.6 million in the first
quarter of 2013.

Total broadcasting hours in the Company's network in the first quarter of 2013
were 39,060 hours.

As of March 31, 2013, the Company's network covered 19 cities secured either
by exclusive agency agreements or joint venture contracts, and included
107,838 digital displays on mass transit systems.

Average advertising revenue per broadcasting hour on the Company's network in
the first quarter of 2013 was $394.

The Company sold an average of 5.24 advertising minutes per broadcasting hour
on its network in the first quarter of 2013.

Mr. Limin Li, VisionChina Media's chairman and chief executive officer,
commented, "The first quarter of 2013 was the start of a transition year, and
a series of strategic adjustments surrounding promotional marketing events,
technological innovation and programming production have shown encouraging
initial results. While the first quarter of each year is typically marked by
seasonal weakness, we are confident that our integrated mobile TV network, now
enhanced with a wider range of product offerings, will provide advertisers
with a comprehensive all-in-one media solution and improve our operations
throughout the remainder of 2013. "

Stanley Wang, VisionChina Media's chief financial officer, added, "Sequential
decreases in various cost and expense items indicate that our cost control
measures have effectively built up a very healthy cost structure on which we
can implement our operating strategies for the rest of 2013. With an expected
rebound in our top line in the second quarter and further revenue improvement
in second half of the year, we believe we are on the right track to make
significant improvements in our performance as compared to that of 2012."

    ADS amounts adjusted for a change in the ratio of the Company's American
[1] Depositary Shares to ordinary shares from 1:1 to 1:20, effective as of
    December 12, 2012.

First Quarter 2013 Results

VisionChina Media's total revenues were $17.1 million in the first quarter of
2013, representing a decrease of 39.7% from $28.3 million in the first quarter
of 2012. The year-over-year decrease in revenue was mainly attributable to (1)
advertisers' cautious overall sentiment since the second half of 2012; (2)
advertising revenue in the first quarter of 2012 was tax inclusive of 5%
business tax but advertising revenue in the first quarter 2013 did not include
the 6% value added tax ("VAT") resulting from VAT pilot reform rolled out in
major PRC cities from September 2012;. Total revenues in the first quarter of
2013 decreased by 34.7% from $26.1 million in the fourth quarter of 2012 due
to seasonality. Advertising service revenue, which accounted for 99.7% of
total revenues in the first quarter of 2013, was $17.0 million, representing a
decrease of 39.8% compared to the first quarter of 2012 and a decrease of
33.1% compared to the fourth quarter of 2012.

Total broadcasting hours in the first quarter of 2013 were 39,060 hours,
compared to 41,012 hours in the first quarter of 2012 and 39,930 hours in the
fourth quarter of 2012.

Average advertising revenue per broadcasting hour was $394 in the first
quarter of 2013, compared to $679 in the first quarter of 2012 and $581 in the
fourth quarter of 2012.

In the first quarter of 2013, the Company sold a total of 204,829 advertising
minutes in its network, compared to 258,827 advertising minutes in the first
quarter of 2012 and 235,794 advertising minutes in the fourth quarter of 2012.

The Company sold an average of 5.24 advertising minutes per broadcasting hour
in the first quarter of 2013, compared to 6.31 advertising minutes per
broadcasting hour in the first quarter of 2012 and 5.91 advertising minutes
per broadcasting hour in the fourth quarter of 2012.

During the first quarter of 2013, 517 advertisers purchased advertising time
on the Company's advertising network, either directly or through advertising
agents, compared to 490 advertisers in the first quarter of 2012 and 533
advertisers in the fourth quarter of 2012.

Media cost, the most significant component of advertising service cost, was
$17.8 million in the first quarter of 2013, a decrease of 33.3% from $26.7
million of the first quarter of 2012 and a decrease of 11.1% from $20.0
million of the fourth quarter of 2012.

Gross loss in the first quarter of 2013 was $5.1 million, compared to gross
loss of $4.0 million in the first quarter of 2012 and gross loss of $40,898 in
the fourth quarter of 2012.

Advertising service gross margin was negative 30.2% in the first quarter of
2013, compared to negative 14.2% in the first quarter of 2012 and negative
1.8% in the fourth quarter of 2012.

Selling and marketing expenses were $7.2 million in the first quarter of 2013,
representing a decrease of 45.7% from $13.3 million in the first quarter of
2012 and a decrease of 19.5% from $9.0 million in the fourth quarter of 2012.
Selling and marketing expenses accounted for 42.4% of the Company's
advertising service revenue in the first quarter of 2013, compared to 47.0% in
the first quarter of 2012 and 35.2% in the fourth quarter of 2012.

General and administrative expenses were $2.3 million in the first quarter of
2013, representing a decrease of 41.9% from $3.9 million in the first quarter
of 2012 and a decrease of 58.5% from $5.5 million in the fourth quarter of
2012.

The Company recorded a contingent loss of $1.5 million in connection to the
pending litigation with the selling shareholders and former management of
Digital Media Group Company Limited ("Digital Media Group") in the first
quarter of 2013, compared to a contingent loss of $1.4 million and $2.0
million in the first quarter of 2012 and the fourth quarter of 2012.

Operating loss was $14.4 million in the first quarter of 2013, compared to
operating loss of $22.5 million in the first quarter of 2012 and operating
loss of $16.4 million in the fourth quarter of 2012.

The Company recorded net interest expense of $0.19 million in the first
quarter of 2013, compared to net interest expense of $0.2 million in the first
quarter of 2012 and net interest expense of $0.5 million in the fourth quarter
of 2012.

The Company recorded income tax expense of $0.03 million in the first quarter
of 2013, compared to income tax benefits of $1.4 million in the first quarter
of 2012 and income tax expenses of $1.1 million in the fourth quarter of 2012.

Net loss attributable to VisionChina Media shareholders (GAAP) was $14.6
million in the first quarter of 2013, compared to net loss attributable to
VisionChina Media shareholders of $21.1million in the first quarter of 2012
and net loss attributable to VisionChina Media shareholders of $17.5 million
in the fourth quarter of 2012.

Basic and diluted net loss per ADS (GAAP) was $2.87 and $2.87, respectively,
in the first quarter of 2013.

The Company's non-GAAP financial measure, net loss attributable to VisionChina
Media shareholders excluding share-based compensation expenses and provision
for contingent loss in connection with litigation, was $12.7 million in the
first quarter of 2013, compared to non-GAAP net loss of $18.0 millionin the
first quarter of 2012 and non-GAAP net loss of $15.3 million in the fourth
quarter of 2012.

As of March 31, 2013, the Company had 107,838 digital television displays in
its network, compared to 135,762 as of March 31, 2012, and 108,567 as of
December 31, 2012.

As of March 31, 2013, the Company had 715 employees, compared to 845 employees
as of March 31, 2012, and 715 employees as of December 31, 2012.

As of March 31, 2013, the Company had cash and cash equivalents of $46.7
million, compared to $29.0 million as of December 31, 2012. Net cash used in
operating activities was $5.6 million in the first quarter of 2013, compared
to net cash provided by operating activities of $5.2 million in the fourth
quarter of 2012.

The Company experienced a net loss of $14.6 million in the three months ended
March 31, 2013. As of March 31, 2013, the company had net current liabilities
of $14.1 million and cash and cash equivalents of $46.7 million. The Company
has developed and implemented a liquidity plan including obtaining new credit
facilities, utilizing available facilities to roll forward short-term
borrowings, negotiating with certain suppliers of concession rights for price
reductions, and adopting strict control of operating activities and investing
activities of the Company. Starting in the fourth quarter of 2012, the Company
started to cut down capital expenditures and operating expenditures to improve
operating cash flow, and will continue to implement such cost-cutting
initiatives in 2013. To improve its liquidity, the Company will continue to
obtain additional financing.

Depreciation and amortization was $1.1 million and capital expenditures were
$0.8 million in the first quarter of 2013.

Recent Developments

  oVisionChina Media regains compliance with NASDAQ

The Company received a letter from Nasdaq Stock Market LLC ("NASDAQ") on June
10, 2013 regarding its regaining compliance with The Nasdaq Stock Market under
Listing Rule 5250(c)(1) ("Rule 5250(c)(1)"). The letter notified the Company
that, based on the Company's filing of its annual report on Form 20-F for the
year ended December, 2012 on May 30, 2013, NASDAQ determined that the Company
complies with Rule 5250(c)(1)

  oRecent developments in the litigation with former Digital Media Group
    ("DMG") shareholders and management ("Selling Shareholders")

On June 11, 2013, the Appellate Division, First Department of the Supreme
Court of the State of New York (the "Appellate Court") entered a Decision and
Order determining the pending appeals and cross-appeals from rulings by Hon.
Charles E. Ramos of the Supreme Court, New York County (the "Trial Court").
The Appellate Court's ruling (a) affirms the Trial Court's orders of November
3, 2011 granting the motions of the Selling Shareholders to dismiss
VisionChina Media and Vision Best's claims and counter-claims for fraud,
unjust enrichment and declaratory judgment, (b) reverses that part of the
Trial Court's order of June 15, 2012 that denied the Selling Shareholders'
motion for partial summary judgment on the defense asserted by VisionChina
Media and Vision Best to the Selling Shareholders' claims for breach of
contract, including the defense based on allegations of intentional
destruction of certain electronic data that was to be conveyed as part of the
sale of DMG's assets, and (c) affirms the Trial Court's denial of the Selling
Shareholders' motion to dismiss the breach of contract and indemnity claim
asserted by VisionChina Media and Vision Best, seeking an amount not less than
US$2,785,633, based on alleged inaccuracies in the representations and
warranties within the Merger Agreement.

With respect to the orders entered by the Trial Court regarding the attachment
of VisionChina's assets, the Appellate Court's ruling (d) reverses the Trial
Court's order entered on November 4, 2011, granting the motion by the Selling
Shareholders for pre-judgment attachment of assets of VisionChina Media and
Vision Best, (e) reverses the Trial Court's order entered on June 15, 2012,
granting the motion by the Selling Shareholders to confirm the two ex parte
orders of attachment they previously obtained in the aggregate amount of US$60
million, and (f) reverses the Trial Court's order entered on August 13, 2012,
granting the motion of the Selling Shareholders' to compel VisionChina Media
and Vision Best to transfer US$60 million into New York pursuant to the two ex
parte orders of attachment.

As a result of the Appellate Court's Decision and Order, we will promptly seek
return of the approximately US$4.5 million currently held by the Sheriff of
the City of New York pursuant to the orders of attachment and the order
compelling transfer of assets.Among other alternatives, we are determining
whether to seek leave to appeal the portions of the Appellate Court's Order
that affirmed the dismissal of VisionChina's claims and counter-claims and
reversed the denial of the Selling Shareholders' motion for partial summary
judgment dismissing VisionChina's defenses, including those based on the
allegations of data destruction.

Business Outlook

The Company estimates its advertising service revenue in the second quarter of
2013 to be between $26.0 million and $27.0 million, excluding 6% VAT. Second
quarter 2013 net loss attributable to VisionChina Media shareholders excluding
share-based compensation expenses, contingent loss in connection with
litigation, with the impairment loss (non-GAAP) is estimated to be between
$6.0 million and $7.0 million.

These estimates are based on an exchange rate of RMB 6.2666 per $1.00.

The Company noted that its guidance is based on its current network that, as
of the date of this press release, has already been secured by exclusive
agency agreements or joint venture contract, and based on management's current
assessment of the possible outcome of pending litigation with the selling
shareholders and former management of Digital Media Group. If the number of
cities in the Company's network expands or contracts, or if there is any
progress in the pending litigation that affects management's assessment of the
possible outcome, management's forecast could be affected.

Conference Call

VisionChina Media's management will hold an earnings conference call at 8:00
p.m. U.S. Eastern Time on June 13, 2013 (8:00 a.m. Beijing/Hong Kong Time on
June 14, 2013).

Dial-in details for the earnings conference call are as follows:

U.S. Toll Free: +1-866-519-4004
U.S. Toll: +1-718-354-1231
Hong Kong Toll:+852-2475-0994
International Toll: +65-6723-9381
Passcode for all regions: VisionChina Earnings Call

A replay of the conference call may be accessed by phone at the following
numbers untilJune 21, 2013.

U.S. Toll Free: +1-855-452-5696
U.S. Toll: +1-646-254-3697
International Toll: +61-2-8199-0299
Conference ID: 90955357

Additionally, a live and archived webcast of this conference call will be
available on the Investor Relations section of VisionChina Media's website at
http://www.visionchina.cn.

About VisionChina Media Inc.

VisionChina Media Inc. (Nasdaq: VISN) operates an out-of-home advertising
network on mass transportation systems, including buses and subways. As of
March 31, 2013, VisionChina Media's advertising network included 107,838
digital television displays on mass transportation systems in 19 of China's
economically prosperous cities, including Beijing, Guangzhou and Shenzhen, as
secured by exclusive agency agreements or joint venture contract. VisionChina
Media has the ability to deliver real-time, location-specific broadcasting,
including news, stock quotes, weather and traffic reports, and other
entertainment programming. For more information, please visit
http://www.visionchina.cn.

Use of Non-GAAP Financial Measures

In addition to VisionChina Media's consolidated financial results under GAAP,
the Company also provides non-GAAP financial measures, including net
income/(loss) excluding non-cash share-based compensation expenses,
amortization of intangible assets, contingent loss in connection with a
litigation, impairment loss and income tax credit in connection with the
impairment loss. The Company believes that the non-GAAP financial measures
provide investors with another method for assessing VisionChina 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. The Company
believes that both management and investors benefit from referring to these
non-GAAP financial measures in assessing the performance of VisionChina
Media's liquidity and when planning and forecasting future periods. The
Company computes its non-GAAP financial measures using the same consistent
method from quarter to quarter.

Safe Harbor Statement

This press release contains forward-looking statements. These statements
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 as defined in the U.S. Private
Securities Litigation Reform Act of 1995. These forward-looking statements can
be identified by terminology such as "will", "expects", "anticipates",
"future", "intends", "plans", "believes", "estimates" and similar statements.
Among other things, the quotations from management in this press release
contain forward-looking statements. Such statements involve certain risks and
uncertainties that could cause actual results to differ materially from those
in the forward-looking statements. Further information regarding these and
other risks is included in the Company's filings with the U.S. Securities and
Exchange Commission, including its registration statement on Form F-1 and its
annual report on Form 20-F. The Company does not undertake any obligation to
update any forward-looking statement as a result of new information, future
events or otherwise, except as required under applicable law.

For investor and media inquiries, please contact:

In China:

Ms. Shuning Yi
Investor Relations Department
VisionChina Media Inc.
Tel: +86-134-2090-9426
E-mail:shuning.yi@visionchina.cn 

Mr. Colin Wang
Investor Relations Director
VisionChina Media Inc.
Tel: +86 135-1001-0107
Email: colin.wang@visionchina.cn

In the United States:

Ms. Jessica Barist Cohen
Ogilvy Financial, New York
Tel: +1-646-460-9989
E-mail: visn@ogilvy.com



VISIONCHINA MEDIA INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousand U.S. dollars)
                                      March 31, 2013      December 31,
                                                          2012
                                      (Unaudited)         (Note 1)
ASSETS
Current Assets:
Cash and cash equivalents             46,734              29,012
Restricted cash                       14,533              14,533
Accounts receivable, net              33,799              36,743
Amounts due from related parties      1,769               2,105
Prepaid expenses and other current    24,997              26,808
assets
Total current assets                  121,832             109,201
Non-current Assets:
Fixed assets, net                     10,369              10,782
Intangible assets                     358                 367
Investments under equity method       7,508               7,305
Other investments                     3,062               3,045
Long-term prepayments and deposits    18,357              17,536
Restricted cash                       1,121               1,115
Deferred tax assets                   406                 444
Total non-current assets              41,181              40,594
TOTAL ASSETS                          163,013             149,795
LIABILITIES AND EQUITY
Current Liabilities:
Short-term bank loans                 32,984              8,998
Accounts payable                      8,796               7,744
Amounts due to related parties        1,791               1,829
Consideration payable                 64,000              64,000
Income tax payable                    -                   24
Accrued expenses and other current    28,344              26,210
liabilities
Total current liabilities             135,915             108,805
Non-current Liabilities:
Deferred tax liabilities              -                   -
Other non-current liabilities         982                 977
Total non-current liabilities         982                 977
Total liabilities                     136,897             109,782
Equity:
Common shares                         10                  10
Additional paid-in capital            342,849             342,671
Accumulated deficit                   (354,692)           (340,138)
Accumulated other comprehensive       37,877              37,371
income
Total VisionChina Media Inc.          26,044              39,914
shareholders' equity
Noncontrolling interest               72                  99
Total equity                          26,116              40,013
TOTAL LIABILITIES AND EQUITY          163,013             149,795
Note 1: Information extracted from the audited consolidated financial
statements included in the Company's 2012 annual report on
Form 20-F filed with the Securities and Exchange Commission on
May 30, 2012 and rounded to thousand of U.S. dollars.



VISIONCHINA MEDIA INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousand U.S. Dollars, except number of shares and per share data)
                           For three months ended
                           March 31,          December 31,       March 31,
                           2013               2012               2012
                           (Unaudited)        (Unaudited)        (Unaudited)
Revenues:
 Advertising service      17,021             25,457             28,292
revenue
 Other revenue            45                 672                -
Total revenues             17,066             26,129             28,292
Cost of revenues:
 Advertising service cost (22,169)           (25,909)           (32,303)
 Other cost               (2)                (261)              -
Total cost of revenues     (22,171)           (26,170)           (32,303)
Gross loss                 (5,105)            (41)               (4,011)
Operating expenses:
 Selling and marketing    (7,223)            (8,968)            (13,309)
expenses
 General and              (2,261)            (5,454)            (3,894)
administrative expenses
 Contingent loss in
connection with a          (1,537)            (2,043)            (1,410)
litigation
Total operating expenses   (11,021)           (16,465)           (18,613)
Share of (loss) profits
from equity method         163                (61)               137
investees
Government grant           1,611              -                  -
Dividend income from cost  -                  162                -
method investments
Operating loss             (14,352)           (16,405)           (22,487)
Interest income            122                141                168
Interest expense           (311)              (642)              (399)
Other (expenses) income   (6)                455                173
Net loss before income     (14,547)           (16,451)           (22,545)
taxes
Income tax (expenses)     (33)               (1,057)            1,417
benefits
Net loss                   (14,580)           (17,508)           (21,128)
Net loss attributable to   26                 29                 32
noncontrolling interest
Net loss attributable to
VisionChina Media Inc.     (14,554)           (17,479)           (21,096)
shareholders
Net loss per share:
 Basic                    (0.14)             (0.17)             (0.21)
 Diluted                  (0.14)             (0.17)             (0.21)
Net loss per ADS ^(1):
 Basic                    (2.87)             (3.45)             (4.16)
 Diluted                  (2.87)             (3.45)             (4.16)
Weighted average number of
shares used in computation
of net loss per share:
 Basic                    101,367,567        101,373,145        101,362,345
 Diluted                  101,367,567        101,373,145        101,362,345
Weighted average number of
ADS used in computation
of net loss per ADS:
 Basic                    5,068,378          5,068,657          5,068,117
 Diluted                  5,068,378          5,068,657          5,068,117
Share-based compensation
expenses during the
related periods included
in:
 Cost of revenues         (13)               (13)               (13)
 Selling and marketing    (93)               (95)               (102)
expenses
 General and              (72)               (50)               (59)
administrative expenses
Total                      (178)              (158)              (174)
Reconciliation from GAAP
net loss income
attributable to
VisionChina Media
 Inc. shareholders to
Adjusted Non-GAAP net loss
attributable to
 VisionChina Media Inc.
shareholders:
Net loss attributable to
VisionChina Media Inc.     (14,554)           (17,479)           (21,096)
shareholders (GAAP)
 Add back share-based     178                158                174
compensation expenses
 Add back amortization of -                  -                  1,554
intangible assets
 Add back contingent loss
in connection with a       1,537              2,043              1,410
litigation
Net loss attributable to
VisionChina Media Inc.     (12,839)           (15,278)           (17,958)
shareholders (Non-GAAP)
Note 1:ADS amounts adjusted for a change in the ratio of the Company's
American Depositary Shares ("ADSs") to ordinary shares ("Shares") from 1:1 to
1:20 ("Ratio Change"), effective as of December 12, 2012.





SOURCE VisionChina Media

Website: http://www.visionchina.cn
 
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