VisionChina Media Inc. Announces Second Quarter 2013 Results

         VisionChina Media Inc. Announces Second Quarter 2013 Results

PR Newswire

BEIJING, Sept. 9, 2013

BEIJING, Sept. 9, 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 June 30, 2013.

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

Total revenues in the second quarter of 2013 were $26.7 million, representing
a 56.3% increase from $17.1 million in the first quarter of 2013, in line with
the Company's revenue guidance.

Gross profit in the second quarter of 2013 was $4.5 million compared to gross
loss of $5.1 million in the first quarter of 2013.

Operating loss in the second quarter of 2013 was $5.2 million, an improvement
of 63.7% from a loss of $14.4 million in the first quarter of 2013.

Net loss attributable to VisionChina Media shareholders ("GAAP net loss") in
the second quarter of 2013 was $5.8 million, an improvement of 59.9% from a
GAAP net loss of $14.6 million in the first quarter of 2013.

In the second quarter of 2013, the Company's non-GAAP financial measure, net
loss attributable to VisionChina Media shareholders, which excludes
share-based compensation expenses, amortization of intangible assets,
provision for contingent loss in connection with litigation, impairment loss
and income tax credit in connection with the impairment loss, was $5.1
million, better than the Company's guidance regarding non-GAAP net loss of
between $6.0 million to $7.0 million.

Basic and diluted net loss per American depositary share ("ADS^[1]")
attributable to VisionChina Media shareholders in the second quarter of 2013
was $1.15 and $1.15, respectively (one ADS represents 20 ordinary shares).

The Company had cash and cash equivalents of $39.6 million as of June 30,
2013. Net cash used in operating activities was $7.1 million in the second
quarter of 2013.

Total broadcasting hours in the Company's network in the second quarter of
2013 were 39,495 hours, compared to 39,060 hours in the first quarter of 2013.

As of June 30, 2013, the Company's network covered 19 cities secured either by
exclusive agency agreements or joint venture contracts, and included 111,063
digital displays on mass transit systems.

Average advertising revenue per broadcasting hour in the Company's network in
the second quarter of 2013 was $665, an increase of 68.7% compared to $394 in
the first quarter of 2013.

The Company sold an average of 7.13 advertising minutes per broadcasting hour
in its network in the second quarter of 2013, an increase of 36.1% compared to
5.24 minutes in the first quarter of 2013.

Mr. Limin Li, VisionChina Media's chairman and chief executive officer,
commented, "Despite uncertainty in the advertising market, our substantial
financial improvements in the second quarter reflect the Company's progress in
returning to profitability. Moreover, we are encouraged to see increased
demand for our advertising products, along with good execution by our sales
force, and we have great confidence as we look to finish 2013 with an even
better performance."

Stanley Wang, VisionChina Media's chief financial officer, added, "We will
continue to execute on our cost-control measures, especially with respect to
our subway business, to further improve our performance and liquidity."

Second Quarter 2013 Results

VisionChina Media's total revenues were $26.7 million in the second quarter of
2013, representing a decrease of 5.0% from $28.1 million in the second quarter
of 2012 and an increase of 56.3% from $17.1 million in the first quarter of
2013.

Total broadcasting hours in the second quarter of 2013 were 39,495 hours,
compared to 41,012 hours in the second quarter of 2012 and 39,060 hours in the
first quarter of 2013.

Average advertising revenue per broadcasting hour was $665 in the second
quarter of 2013, compared to $658 in the second quarter of 2012 and $394 in
the first quarter of 2013.

In the second quarter of 2013, the Company sold a total of 271,118 advertising
minutes across its network, compared to 269,234 advertising minutes in the
second quarter of 2012 and 204,829 advertising minutes in the first quarter of
2013.

The Company sold an average of 7.13 advertising minutes per broadcasting hour
in the second quarter of 2013, compared to 6.56 advertising minutes per
broadcasting hour in the second quarter of 2012 and 5.24 advertising minutes
per broadcasting hour in the first quarter of 2013.

During the second quarter of 2013, 416 advertisers purchased advertising time
on the Company's advertising network, either directly or through advertising
agents, compared to 558 advertisers in the second quarter of 2012 and 517
advertisers in the first quarter of 2013.

Media cost, the most significant component of advertising service cost, was
$17.9 million in the second quarter of 2013, representing 80.7% of total
advertising service cost,compared to $27.2 million, or 81.4% of total
advertising service cost, in the second quarter of 2012, and $17.8 million, or
80.3% of total advertising service cost, in the first quarter of 2013.

Gross profit in the second quarter of 2013 was $4.5 million, compared to gross
loss of $5.4 million in the second quarter of 2012 and gross loss of $5.1
million in the first quarter of 2013.

Advertising service gross margin was 16.8% in the second quarter of 2013,
compared to gross margin of negative 19.2% in the second quarter of 2012 and
gross margin of negative 30.2% in the first quarter of 2013.

Selling and marketing expenses were $7.5 million in the second quarter of
2013, representing a decrease of 30.2% from $10.8 million in the second
quarter of 2012 and an increase of 4.3% from $7.2 million in the first quarter
of 2013. Selling and marketing expenses accounted for 28.3% of the Company's
advertising service revenue in the second quarter of 2013, compared to 38.6%
in the second quarter of 2012 and 42.4% in the first quarter of 2013.

General and administrative expenses were $2.1 million in the second quarter of
2013, representing a decrease of 49.2% from $4.2 million in the second quarter
of 2012 and a decrease of 6.6% from $2.3 million in the first quarter of 2013.

The Company recorded a contingent loss of $0.6 million in connection to the
litigation with the selling shareholders and former management of Digital
Media Group Company Limited ("Digital Media Group") in the second quarter of
2013, compared to contingent losses of $1.4 million and $1.5 million in the
second quarter of 2012 and the first quarter of 2013, respectively.

Share of profits from equity method investments amounted to $0.3 millionin
the second quarter of 2013, compared to share of loss of$0.2 millionin the
second quarter of 2012 and share of profits of$0.2 millionin the first
quarter of 2013.

Operating loss was $5.2 million in the second quarter of 2013, compared to
operating loss of $200.8 million in the second quarter of 2012 and operating
loss of $14.4 million in the first quarter of 2013.

The Company recorded net interest expense of $0.4 million in the second
quarter of 2013, compared to net interest expense of $0.4 million in the
second quarter of 2012 and net interest expense of $0.19 million in the first
quarter of 2013.

The Company recorded income tax expense of $0.07 million in the second quarter
of 2013, compared to income tax benefits of $8.0 million in the second quarter
of 2012 and income tax expense of $0.03 million in the first quarter of 2013.


Net loss attributable to VisionChina Media shareholders (GAAP) was $5.8
million in the second quarter of 2013, compared to net loss attributable to
VisionChina Media shareholders of $193.5 million in the second quarter of 2012
and net loss attributable to VisionChina Media shareholders of $14.6 million
in the first quarter of 2013. 

Basic and diluted net loss per ADS (GAAP) was $1.15 and $1.15, respectively,
in the second quarter of 2013.

The Company's non-GAAP financial measure, net loss attributable to VisionChina
Media shareholders , which excludes share-based compensation expenses,
amortization of intangible assets, impairment loss of goodwill and intangible
assets, income tax credit in connection to impairment of intangible assets and
provision for contingent loss in connection with litigation, was $5.1 million
in the second quarter of 2013, compared to non-GAAP net loss of $20.7
millionin the second quarter of 2012 and non-GAAP net loss of $12.7 million
in the first quarter of 2013.

As of June 30, 2013, the Company had 111,063 digital television displays in
its network, compared to 136,075 as of June 30, 2012 and 107,838 as of March
31, 2013.

As of June 30, 2013, the Company had 700 employees, compared to 803 employees
as of June 30, 2012 and 715 employees as of March 31, 2013.

As of June 30, 2013, the Company had cash and cash equivalents of $39.6
million, compared to $46.7 million as of March 31, 2013. The Company's net
cash used in operating activities was $7.1 million in the second quarter of
2013, compared to net cash used in operating activities of $5.6 million in the
first quarter of 2013.

Depreciation and amortization was $1.0 million and capital expenditures were
$0.3 million in the second quarter of 2013.

Business Outlook

The Company estimates its advertising service revenue in the third quarter of
2013 to be between $27.0 million and $28.0 million, excluding 6% VAT. Third
quarter 2013 net loss attributable to VisionChina Media shareholders,
excluding share-based compensation expenses, is estimated to be less than $4.0
million.

These estimates are based on an exchange rate of RMB 6.2025 per $1.00.

The Company notes 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 is based on management's
current assessment of the possible outcome of settlement discussion 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 settlement discussion 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 September 9, 2013 (8:00 a.m. Beijing/Hong Kong Time
on September 10, 2013).

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

U.S. Toll Free: +1-866-519-4004
U.S. Toll: +1-845-675-0437
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 until September 17, 2013.

U.S. Toll Free: +1-855-452-5696
U.S. Toll: +1-646-254-3697
International Toll: +61-2-8199-0299
Conference ID: 37112978

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
June 30, 2013, VisionChina Media's advertising network included 111,063
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
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:

Mr. Justin Knapp
Ogilvy Financial, U.S.
Tel: +1-616-551-9714
E-mail: visn@ogilvy.com

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

    

VISIONCHINA MEDIA INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousand U.S. dollars)
                                                               June30,2013  March31,2013  December31,2012
                                                               (Unaudited)    (Unaudited)     (Note 1)
ASSETS
Current Assets:
Cash and cash equivalents                                      39,631         46,734          29,012
Restrictedcash 15,019         14,533          14,533
Accounts receivable, net                                       37,177         33,799          36,743
Amounts due from related parties                               1,412          1,769           2,105
Prepaid expenses and other current assets                      22,669         24,997          26,808
Total current assets                                          115,908        121,832         109,201
Non-current Assets:
Fixed assets, net                                             9,523          10,369          10,782
Intangible assets                                             351            358             367
Investments under equity method                               7,953          7,508           7,305
Other investments                                             3,108          3,062           3,045
Long-term prepayments and deposits                             18,637         18,357          17,536
Restricted cash                                               1,138          1,121           1,115
Deferred tax assets                                           374            406             444
Total non-current assets                                      41,084         41,181          40,594
TOTAL ASSETS                                                  156,992        163,013         149,795
LIABILITIES AND EQUITY
Current Liabilities:
Short-term bank loans                                          33,483         32,984          8,998
Accounts payable                                               4,817          8,796           7,744
Amounts due to related parties                                 1,892          1,791           1,829
Consideration payable                                          75,800         64,000          64,000
Income tax payable                                            21             -               24
Accrued expenses and other current liabilities                 18,313         28,344          26,210
Total current liabilities                                      134,326        135,915         108,805
Non-current Liabilities:
Other non-current liabilities                                  997            982             977
Total non-current liabilities                                  997            982             977
Total liabilities                                             135,323        136,897         109,782
Equity:
Common shares                                                  10             10              10
Additional paid-in capital                                     343,027        342,849         342,671
Accumulated deficit                                            (360,533)      (354,692)       (340,138)
Accumulated other comprehensive income                         39,114         37,877          37,371
Total VisionChina Media Inc. shareholders' equity              21,618         26,044          39,914
Noncontrolling interest                                        51             72              99
Total equity                                                   21,669         26,116          40,013
TOTAL LIABILITIES AND EQUITY                                   156,992        163,013         149,795
Note 1: Information extracted from the audited consolidated financial statements included in the Company's
2012 annual report onForm 20-F filed with the Securities and Exchange Commission on May 30, 2013 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
                                                                                                                                         June 30,     March 31,    June 30,
                                                                                                                                         2013         2013         2012
                                                                                                                                         (Unaudited)  (Unaudited)  (Unaudited)
Revenues:
 Advertising service revenue                                                                                                           26,627       17,021       28,069
 Other revenue                                                                                                                          49           45           -
Total revenues                                                                                                                           26,676       17,066       28,069
Cost of revenues:
 Advertising service cost                                                                                                              (22,154)     (22,169)     (33,462)
 Other cost                                                                                                                             (6)          (2)          -
Total cost of revenues                                                                                                                   (22,160)     (22,171)     (33,462)
Gross profit/(loss)                                                                                                                      4,516        (5,105)      (5,393)
Operating expenses:
 Selling and marketing expenses                                                                                                         (7,536)      (7,223)      (10,827)
 General and administrative expenses                                                                                                    (2,111)      (2,261)      (4,157)
 Impairment of goodwill and intangible assets                                                                                           -            -            (178,814)
 Contingent loss in connection with a litigation                                                                                        (612)        (1,537)      (1,410)
Total operating expenses                                                                                                                (10,259)     (11,021)     (195,208)
 Share of profits/(loss) from equity method investees                                                                                 329          163          (244)
 Government grant                                                                                                                       161          1,611        -
 Dividend income from cost method investments                                                                                           44           -            -
Operating loss                                                                                                                           (5,209)      (14,352)     (200,845)
 Interest income                                                                                                                        131          122          177
 Interest expense                                                                                                                       (529)        (311)        (545)
 Otherexpenses                                                                                                                         (186)        (6)          (385)
Net loss before income taxes                                                                                                            (5,793)      (14,547)     (201,598)
 Income tax expenses/(benefits)                                                                                                         (70)         (33)         8,048
Net loss                                                                                                                                 (5,863)      (14,580)     (193,550)
Net loss attributable to noncontrolling interest                                                                                         22           26           29
Net loss attributable to VisionChina Media Inc. shareholders                                                                             (5,841)      (14,554)     (193,521)
Net loss per share:
 Basic                                                                                                                                 (0.06)       (0.14)       (1.91)
 Diluted                                                                                                                                (0.06)       (0.14)       (1.91)
Net loss per ADS ^(1):
 Basic                                                                                                                                 (1.15)       (2.84)       (38.20)
 Diluted                                                                                                                                (1.15)       (2.84)       (38.20)
Weighted average number of shares used in computation of net loss per share:
Basic                                                                                                                                101,366,632  101,367,567  101,366,554
 Diluted                                                                                                                              101,366,632  101,367,567  101,366,554
Weighted average number of ADS used in computation of net loss per ADS:
 Basic                                                                                                                                5,068,332    5,068,378    5,068,328
 Diluted                                                                                                                              5,068,332    5,068,378    5,068,328
Share-based compensation expenses during the related periods included in:
 Cost of revenues                                                                                                                     (13)         (13)         (13)
 Selling and marketing expenses                                                                                                       (93)         (93)         (102)
 General and administrative expenses                                                                                                  (72)         (72)         (59)
Total (178)        (178)        (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. shareholders (GAAP)                                                                      (5,841)      (14,554)     (193,521)
 Add back share-based compensation expenses                                                                                             178          178          174
 Add back amortization of intangible assets                                                                                             -            -            1,554
 Add back Impairment loss of goodwill and intangible assets                                                                             -            -            178,814
 Subtract income tax credit in connection to impairment of intangible assets                                                            -            -            (9,101)
 Add back contingent loss in connection with a litigation                                                                               612          1,537        1,410
Net loss attributable to VisionChina Media Inc. shareholders (Non-GAAP)                                                                  (5,051)      (12,839)     (20,670)
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 Inc.

Website: http://www.visionchina.cn
 
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