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Bona Reports Second Quarter 2013 Financial Results

Bona Reports Second Quarter 2013 Financial Results

BEIJING, Aug. 29, 2013 (GLOBE NEWSWIRE) -- Bona Film Group Limited ("Bona" or
the "Company") (Nasdaq:BONA), a leading film distributor and vertically
integrated film company in China, today announced its unaudited financial
results for the second quarter ended June 30, 2013.

"The second quarter was another strong quarter for Bona, during which we
achieved robust top and the bottom line growth with non-GAAP net income nearly
35% above the high-end of our guided range," said Bona founder, Chairman and
CEO Mr. Yu Dong. "In the second quarter, we continued advancing our key
strategic initiatives of expanding our theater network and driving solid
overall box office performance through a diversified and balanced film slate.
I am particularly pleased with the performance of our theater business
segment, which once again exceeded expectations in the second quarter,
delivering year-over-year revenue and segment profit growth of 71% and 74%,
respectively. We are confident that we can build upon what we have achieved in
the first half and are encouraged by our outlook for the second half of 2013.
Our expanding theater network, our strong film production and distribution
capabilities, and our diverse, high-quality film pipeline position Bona well
for a successful second half of 2013 and for even greater achievement over the
longer-term."

Second Quarter 2013 Financial Summary

  *Second quarter 2013 net revenues were US$28.3 million, compared with
    US$20.7 million in the second quarter of 2012.
  *Second quarter 2013 gross profit was US$15.0 million, compared with
    US$11.7 million in the second quarter of 2012.
  *Second quarter 2013 gross margin was 53.2%, compared with 56.3% in the
    second quarter of 2012.
  *Second quarter 2013 net income attributable to Bona Film Group Limited was
    US$1.8 million, or US$0.03 per diluted ADS^1, compared with net income
    attributable to Bona Film Group Limited of US$0.5 million, or US$0.01 per
    diluted ADS, in the second quarter of 2012.
  *Second quarter 2013 non-GAAP net income^2 was US$2.0 million, or US$0.04
    per diluted ADS, compared to non-GAAP net income of US$1.8 million, or
    US$0.03 per diluted ADS in the second quarter of 2012.
  *Second quarter 2013 adjusted EBITDA, non-GAAP^2, was US$4.1 million,
    compared with US$2.8 million in the second quarter of 2012.
  *Cash and cash equivalents, term deposits and restricted cash totaled
    US$33.0 million as of June 30, 2013.
  *Cash outflow from operating activities totaled US$9.6 million, compared
    with cash outflow from operating activities of US$17.0 million in the
    second quarter of 2012.

Second Quarter 2013 Business Updates and Recent Highlights

  *Distributed and invested in a total of three films in the second quarter –
    Christmas Rose, Kuiba II and The Funeral Parlor.
  *Released action drama Unbeatable on August 16, 2013, directed by Dante Lam
    and starring Nick Cheung and Eddie Peng. This highly anticipated film,
    whose stars were named Best Actor and Best Actress at the 16^th Annual
    Shanghai International Film Festival, has generated over RMB 110 million
    in domestic ticket sales to-date.
  *Romantic comedy, My Lucky Star, a prequel to the hit 2009 film Sophie's
    Revenge, starring Ziyi Zhang and Leehom Wang, is scheduled for release on
    September 17, 2013.
  *Continued postproduction work on 3D disaster film Inferno 3D, directed by
    Oxide & Danny Pang and starring renowned Hong Kong actors Sean Lau, Louis
    Koo and Angelica Lee, scheduled for release on September 30, 2013.
  *Continued postproduction work on crime drama The White Storm (formerly The
    Cartel War), directed by Benny Chan and starring Louis Koo, Sean Lau and
    Nick Cheung, tentatively scheduled for release in the fourth quarter of
    2013.
  *Hollywood action comedy Red 2, directed by Dean Parisot and stars Bruce
    Willis, Helen Mirren, John Malkovich and Anthony Hopkins, received
    regulatory approvals and is scheduled for release in the fourth quarter of
    2013.
  *Completed filming and began postproduction work on corporate action film
    Overheard 3, produced by Derek Yee, co-directed by Alan Mak and Felix
    Chong and starring Sean Lau, Louis Koo, Daniel Wu and Xun Zhou, the 3D
    martial arts epic The White-Haired Witch, directed by Jacob Cheung,
    produced by Jianxin Huang and starring Xiaoming Huang and Bingbing Fan,
    and crime drama Sunspot, directed by well-known mainland Chinese director
    Baoping Cao and starring popular mainland Chinese actors Chao Deng, Yihong
    Duan, Tao Guo and Luodan Wang. All three films are tentatively slated for
    release in 2014.
  *Began production on action drama From Vegas to Macau, starring Chow
    Yun-Fat, Nicholas Tse and Tian Jing. The film, which has already received
    wide media coverage, is tentatively scheduled for release in 2014.
  *Announced the launch of an RMB 1 billion (approximately US$163.4 million)
    film fund through partnership with Sequoia Capital Management Ltd. and
    Noah Holdings Ltd. to finance the development and production of film and
    TV projects over the next two years.

Second Quarter 2013 Financial Results

Net Revenues


                     2Q13 2Q12 Y-o-Y%
Net Revenues (US$mm) 28.3 20.7 36.3%

Net revenues for the second quarter of 2013 increased 36.3% year-over-year to
US$28.3 million. The increase in net revenues was primarily attributable by an
increase in revenues from the Company's movie theater segment. The Company
distributed three films in both the second quarter of 2013 and 2012.

Net Revenues by Segment Operations

            Distribution Investment& Movie   Talent Intersegment Consolidated
                          Production   Theater Agency Elimination
Net Revenues
from
External     5.6          5.7          16.8    0.2    --           28.3
Customers
(US$mm)
Intersegment
Revenues     0.2          1.8          --      --     (2.0)        --
(US$mm)
Total Net
Revenues     5.8          7.5          16.8    0.2    (2.0)        28.3
(US$mm)

Net revenues from distribution totaled US$5.8 million. During the second
quarter of 2013, Bona distributed three new films, Christmas Rose, Kuiba II
and The Funeral Parlor.

Net revenues from film investment and production were US$7.5 million, mainly
derived from Bona's investments in films released in the second quarter of
2013, as well as sales of the Company's television series Flying Swords of
Dragon Gate.

Net revenues from the movie theater segment increased to US$16.8 million,
primarily as a result of growth in the number of Bona-owned theaters in
operation. The Company owned and operated 20 theaters as of June 30, 2013,
compared with 14 as of June 30, 2012.

Gross Profit and Gross Margin

                    2Q13  2Q12  Y-o-Y%
Gross Profit (US$mm) 15.0  11.7  28.7%
Gross Margin         53.2% 56.3% --

For the second quarter of 2013, gross profit increased to US$15.0 million from
US$11.7 million in the second quarter of 2012. The year-over-year increase in
gross profit was primarily attributable to the strong performance of the
Company's movie theater segment.

Segment Profit^3 and Segment Margin

                        Distribution Investment& Movie   Talent Consolidated
                                      Production   Theater Agency
Segment Profit (US$mm)   2.3          3.3          9.7     0.2    15.5
As % of Total Segment    15.4%        21.1%        62.5%   1.0%   100%
Profit
Segment Margin           40.8%        43.8%        57.8%   100.0% 54.9%

Segment margin for the distribution segment decreased to 40.8% in the second
quarter of 2013 from 61.3% in the second quarter of 2012, primarily as a
result of the imported film The Three Musketeers in 2012, which carried a
higher gross margin due to lower distribution costs.

Segment margin from the Company's investment and production business increased
to 43.8% in the second quarter of 2013, compared with a segment margin of 9.9%
in the second quarter of 2012. This increase in segment margin was mainly due
to sales of the Company's TV series Flying Swords of Dragon Gate.

Segment margin from the Company's movie theater business increased to 57.8% in
the second quarter of 2013, compared with 56.7% in the second quarter of 2012.
This increase was in-line with the Company's normal business based on current
theater operations.

Operating Income and Operating Margin

                          2Q13 2Q12 Y-o-Y%
Operating Expenses (US$mm) 14.7 11.6 27.1%
Operating Income (US$mm)   1.2  0.7  73.1%
Operating Margin           4.4% 3.5% --

Total operating expenses, including participation expenses, general and
administrative expenses, and sales and marketing expenses, increased 27.1% to
US$14.7 million from US$11.6 million in the second quarter of 2012. The
year-over-year increase in operating expenses was primarily due to increased
general and administrative expenses related to the expansion of the Company's
movie theater business.

Second quarter 2013 operating margin was 4.4% compared to 3.5% in the second
quarter of 2012. The year-over-year increase in operating margin was primarily
due to growth in the Company's film investment and movie theater businesses.

Net Income and Net Income Attributable to Bona Film Group Limited per ADS

                                                                2Q13 2Q12
Net Income Attributable to Bona Film Group Limited (US$mm)       1.8  0.5
Net Income Attributable to Bona Film Group Limited per ADS (US$) 0.03 0.01

                                                                        
                                                                    2Q13 2Q12
Non-GAAP Net Income (US$mm)                                          2.0  1.8
Non-GAAP Net Income Attributable to Bona Film Group Limited per ADS  0.04 0.03
(US$)

Excluding share-based compensation expense of US$0.8 million and US$1.2
million for the second quarters of 2013 and 2012, respectively, non-GAAP net
income for the second quarter of 2013 was US$2.0 million, compared with
non-GAAP net income of US$1.8 million in the second quarter of 2012.

                                 2Q13 2Q12
Adjusted EBITDA, non-GAAP (US$mm) 4.1  2.8

Adjusted EBITDA, non-GAAP, in the second quarter of 2013 was US$4.1 million,
compared with adjusted EBITDA, non-GAAP of US$2.8 million in the second
quarter of 2012.

Cash and Cash Flow

As of June 30, 2013, Bona had cash, cash equivalents and restricted cash
totaling US$33.0 million, compared with US$28.0 million as of December 31,
2012. Operating cash flow for the second quarter was a net outflow of
approximately US$9.6 million, compared with US$17.0 million for the second
quarter of 2012. The change in cash flow from operations was mainly
attributable to investment and production expenses associated with films that
the Company expects to release in 2013.

Business Outlook

Based on current market and operating conditions, the Company expects non-GAAP
net income for the third quarter of 2013 to be in the range of US$3.0 million
to US$3.5 million.

"Looking ahead to the remainder of 2013, we will continue to focus on growing
our complementary business segments through the ongoing expansion of our
theater network, while we build upon our leading position in China's film
distribution market by leveraging our diverse second-half release schedule,
which includes several films that we believe have strong box office potential.
In addition to our aggressive theater development strategy and compelling
second-half release slate, our international expansion initiatives remain on
track and are expected to create additional revenue opportunities for the
Company. We have built a strong foundation for future growth and remain
excited about what the future holds for Bona. We currently anticipate non-GAAP
net income of $3.0 million to $3.5 million for the third quarter of 2013,"
added Mr. Yu.

Second Quarter 2013 Conference Call Details

Bona management will hold the earnings conference call at 8:00 p.m. Eastern
Time on Thursday, August 29, 2013 (8:00 a.m. Beijing/Hong Kong Time on Friday,
August 30, 2013). Management will discuss results and highlights of the
quarter and answer questions from investors.

The dial-in numbers for the earnings conference call are as follows:

U.S. Toll Free: +1-855-500-8701
Hong Kong Toll Free: 800-903-737
China, Domestic: 400-120-0654
International: +65-6723-9385

The conference ID # is 33469546

A live and archived webcast of the earnings conference call will be available
on Bona's Investor Relations website at http://ir.bonafilm.cn/events.cfm.

About Bona Film Group Limited

Bona Film Group Limited (Nasdaq:BONA) is a leading film distributor in China,
with an integrated business model encompassing film distribution, film
production, film exhibition and talent representation. Bona distributes films
to Greater China, Korea, Southeast Asia, the United States and Europe, invests
and produces movies in a variety of genres, owns and operates twenty movie
theaters and manages a range of talented and popular Chinese artists.

For more information about Bona, please visit http://www.bonafilm.cn.

To be added to Bona's email list to receive Company news, please send your
request to bona@tpg-ir.com.

The Bona Film Group Limited logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=15750

Forward Looking Statements

This news release may contain certain "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 the Company's filings with the
U.S. Securities and Exchange Commission. 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.

Non-GAAP Financial Measures

To supplement Bona's consolidated financial results presented in accordance
with GAAP, Bona uses the following measures defined as non-GAAP financial
measures by the SEC: non-GAAP net income, non-GAAP net income attributable to
Bona Film Group Limited per ADS, which exclude share-based compensation
expenses, and adjusted EBITDA, non-GAAP, which excludes share-based
compensation expenses, interest, taxes, and non-cash depreciation and
amortization charges. The presentation of these non-GAAP financial measures is
not intended to be considered in isolation, as a substitute for, or to be
superior to the financial information prepared and presented in accordance
with GAAP. In addition, Bona's definition of non-GAAP net income may be
different from the definitions used by other companies, and therefore
comparability may be limited.

Bona believes that these non-GAAP financial measures provide meaningful
supplemental information regarding its performance by excluding certain
expenses and expenditures that may not be indicative of its operating
performance and a supplemental liquidity measure which is useful for
understanding and evaluating the Company's capacity for servicing its debt,
and otherwise meeting its cash needs. Adjusted EBITDA, non-GAAP, excludes
depreciation and amortization, so it does not reflect any cash requirements
for the replacement of the assets, which will often have to be replaced in the
future. The Company believes that both management and investors benefit from
referring to these non-GAAP financial measures in assessing the Company's
performance and liquidity, and when planning and forecasting future periods.
The table appears at the end of this press release has more details on the
reconciliations between GAAP financial measures that are comparable to
non-GAAP financial measures.

^1"ADS" is American depositary share. Each two ADSs represent one ordinary
share.

^2As used in this press release, non-GAAP net income and non-GAAP net income
attributable to Bona Film Group Limited per ADS exclude share-based
compensation expenses. Adjusted EBITDA, non-GAAP, excludes share-based
compensation expenses, interest, taxes and non-cash depreciation and
amortization charges. See "Non- GAAP Financial Measures" and "Reconciliation
of Non-GAAP Measures" at the end of this press release.

^3Segment profit is gross profit less film participation expense by segments
for the periods indicated.



Unaudited Condensed Consolidated Statement of Operations
(in U.S. dollars, except share data)
                                                               
                          Three-months ended June 30 Six-months ended June 30
                          2013          2012         2013         2012
                                                               
Net revenue                28,259,865    20,740,560   71,572,670   64,419,579
Cost of revenue            13,235,144    9,066,347    41,760,148   31,955,978
Gross profit               15,024,721    11,674,213   29,812,522   32,463,601
                                                               
Film participation expense (487,598)     96,491       (323,089)    694,853
Sales and marketing        3,206,413     2,168,475    5,814,691    10,236,429
expenses
General and administrative 11,988,812    9,310,355    23,957,287   18,244,484
expenses
Total operating expenses   14,707,627    11,575,321   29,448,889   29,175,766
                                                               
Government Subsidies       928,537       620,804      1,540,655    620,804
Operating income           1,245,631     719,696      1,904,288    3,908,639
                                                               
Interest income (reversal) 27,656        125,140      (4,370)      199,447
Interest expense           (417,174)     (29,942)     (820,667)    (195,692)
Exchange gain (loss)       564,015       (242,101)    511,226      (511,413)
Other income               71,429        71,429       142,858      145,299
Investment Loss (income)   --          (5,584)      --         (5,584)
                                                               
Income before income tax
provision, equity in       1,491,557     638,638      1,733,335    3,540,696
earnings of equity method
investment, net of tax
Provision for income taxes 298,311       127,728      346,667      708,140
Equity in earnings of
equity method investment,  --            --           --           5,604
net of tax

Net income                 1,193,246     510,910      1,386,668    2,838,160
                                                               
Less: Net income
attributable to the        (646,816)     (1,924)      (1,001,040)  56,181
noncontrolling interests
Net income attributable to 1,840,062     512,834      2,387,708    2,781,979
Bona Film Group Limited
                                                               
Net income attributable to
Bona Film Group Limited                                         
per ADS
Basic                      0.03          0.01         0.04         0.05
Diluted                    0.03          0.01         0.04         0.05
                                                               
Weighted average shares
used in calculating net                                         
income per ordinary share
Basic                      29,775,437    29,464,788   29,759,061   29,431,686
Diluted                    30,207,593    30,144,055   30,245,848   30,026,996


Unaudited Condensed Statement of Consolidated Comprehensive Income
(in U.S. dollars)
                                                              
                          Three-months ended June 30 Six-months ended June 30
                                                              
                          2013          2012         2013        2012
Net income                 1,193,246     510,910      1,386,668   2,838,160
Other comprehensive                                            
income, net of tax
Foreign currency           1,126,588    (828,771)   1,443,057   (877,981)
translation adjustments
                                                              
Comprehensive income       2,319,834     (317,861)    2,829,725   1,960,179
Less: comprehensive income
attribute to the           (639,994)     (14,074)     (991,329)   43,363
noncontrolling interests
Comprehensive income
attributable to Bona Film  2,959,828     (303,787)    3,821,054   1,916,816
Group Ltd.


Unaudited Condensed Consolidated Balance Sheets
(in U.S. dollars, except share data)
                                                                 
                                                      June 30     December 31
                                                       2013        2012
                                                                 
Cash and cash equivalents                              28,934,062  23,227,922
Restricted Cash                                        4,073,386   4,815,332
Accounts receivable, net of allowance for doubtful     43,302,149  40,307,672
accounts
Prepaid expenses and other current assets              22,583,756  23,329,262
Amount due from related parties                        334,117     343,817
Current deferred tax assets                            651,231     970,683
Inventories                                            307,804     276,436
Total current assets                                   100,186,505 93,271,124
                                                                 
Distribution rights                                    16,051,805  11,406,692
Production costs                                       99,964,069  90,345,409
Prepaid film costs                                     6,416,167   7,426,915
Property and equipment, net                            59,492,143  60,208,609
Acquired intangible assets, net                        2,826,608   3,189,481
Non-current deferred tax assets                        269,432     311,102
Cost method investments                                1,297,761   1,296,307
Goodwill                                               49,851,234  49,110,021

Total assets                                           336,355,724 316,565,660
                                                                 
Accounts payable                                       34,521,932 35,257,660
Accrued expenses and other current liabilities         29,336,998  28,145,099
Amounts due to related parties                         5,381,117   5,746,328
Income taxes payable                                   1,129,795   2,420,443
Bank borrowing                                         36,542,457  12,542,161
Other borrowing                                        6,259,177   8,671,050
Current film participation liabilities                 8,078,263   15,086,892
                                                                 
Total current liabilities                              121,249,739 107,869,633
Bank borrowing                                        20,000,000  18,025,553
Deferred income                                        814,032     813,681
Deferred tax liability                                 118,848     211,203

Total liabilities                                      142,182,619 126,920,070
                                                                 
Ordinary shares (par value of US$0.0005 per share,
85,000,000 shares authorized, 30,402,346 and
29,811,618 shares issued and outstanding as of June    14,906      14,869
30, 2013 and 30,402,346 and 29,737,257 shares issued
and outstanding as of Dec 31, 2012.)
Additional paid-in capital                             178,849,244 176,134,737
Statutory reserves                                     2,543,272   2,543,272
Accumulated profit                                     2,938,226   550,518
Accumulated other comprehensive income                 7,898,436   6,465,090

Total Bona Film Group Limited's equity                 192,244,084 185,708,486
                                                                 
Noncontrolling interests                               1,929,021   3,937,104

Total equity                                           194,173,105 189,645,590
                                                                 
Total liabilities and equity                           336,355,724 316,565,660


Unaudited Reconciliation of Non-GAAP Measures
(in U.S. dollars)
                                        
                           Three-months ended June 30
                           2013          2012
                                        
Net income                  1,193,246     510,910
                                        
Share-based compensation    830,457       1,239,116
                                        
Non-GAAP Net income         2,023,703     1,750,026
                                        
Interests                   389,518       (95,198)
Taxes                       298,311       127,728
Depreciation & Amortization 1,418,829     1,024,096
                                        
EBITDA, Non-GAAP            4,130,361     2,806,652
                                        
                           Six-months ended June 30
                           2013          2012
                                        
Net income                  1,386,668     2,838,160
                                        
Share-based compensation    1,867,172     2,164,291
Non-GAAP Net income         3,253,840     5,002,451
                                        
Interests                   825,037       (3,755)
Taxes                       346,667       708,140
Depreciation & Amortization 2,812,619     2,079,948
                                        
EBITDA, Non-GAAP            7,238,163     7,786,784

CONTACT: In China:
         Ms. Lingzi Gui
         Bona Film Group Limited
         Tel: +86-10-5631-0700*398
         Email: ir@bonafilm.cn
        
         In the U.S.:
         The Piacente Group, Inc.
         Investor Relations
         Lee Roth
         Tel: (212) 481-2050
         Email: bona@tpg-ir.com

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