Bona Reports Third Quarter 2013 Financial Results

Bona Reports Third Quarter 2013 Financial Results

BEIJING, Nov. 14, 2013 (GLOBE NEWSWIRE) -- Bona Film Group Limited
(Nasdaq:BONA) ("Bona" or the "Company"), a leading film distributor and
vertically integrated film company in China, today announced its unaudited
financial results for the third quarter ended September 30, 2013.

"Overall, I am very pleased with the results that we delivered in the third
quarter," said Bona founder, Chairman and CEO Mr. Yu Dong. "We distributed
three strong films – Unbeatable, My Lucky Star and Out of Inferno 3D, and
continued to generate robust top and bottom line growth. Additionally, we
executed on several strategic initiatives that will enable Bona to extend our
competitive advantages in film investment and production, expand our theater
network and enhance long-term shareholder value. We believe the investment in
our Company by Fosun Group at the end of the third quarter sends a strong
message to the market that Bona is committed to achieving its goal of becoming
China's largest non-state owned film producer, distributor and exhibitor, and
we have influential and committed investors and partners willing to support
our ambitions."

Third Quarter 2013 Financial Summary

  *Third quarter 2013 net revenues were US$35.0 million, compared with
    US$24.6 million in the third quarter of 2012.
  *Third quarter 2013 gross profit was US$19.8 million, compared with US$13.6
    million in the third quarter of 2012.
  *Third quarter 2013 gross margin was 56.6%, compared with 55.4% in the
    third quarter of 2012.
  *Third quarter 2013 net income attributable to Bona Film Group Limited was
    US$2.8 million, or US$0.05 per diluted ADS^1, compared with net income
    attributable to Bona Film Group Limited of US$1.3 million, or US$0.02 per
    diluted ADS, in the third quarter of 2012.
  *Third quarter 2013 non-GAAP net income^2 was US$3.7 million, or US$0.06
    per diluted ADS compared to non-GAAP net income of US$2.4 million, or
    US$0.04 per diluted ADS, in the third quarter of 2012.
  *Third quarter 2013 EBITDA, non-GAAP^2, was US$6.2 million, compared with
    US$3.7 million in the third quarter of 2012.
  *Cash and cash equivalents, term deposits and restricted cash totaled
    US$41.7 million as of September 30, 2013.
  *Cash outflow from operating activities totaled US$24.0 million, compared
    with cash outflow from operating activities of US$12.2 million in the
    third quarter of 2012.

Third Quarter 2013 Business Updates and Recent Highlights

  *Distributed and invested in a total of three films in the third quarter –
    Unbeatable, My Lucky Star and Out of Inferno 3D.
  *Released Unbeatable on August 16, 2013. The award-winning action drama
    directed by Dante Lam and starring Nick Cheung and Eddie Peng, has
    generated over RMB 117 million in domestic ticket sales and taken in HKD
    44.6 million in Hong Kong to date, making it the highest grossing Chinese
    language film in Hong Kong this year.
  *Released My Lucky Star, the romantic comedy prequel to the hit 2009 film
    Sophie's Revenge and starring Ziyi Zhang and Leehom Wang, on September 17,
    2013. The film has already generated RMB 136.5 million in domestic box
    office receipts.
  *Released Out of Inferno 3D, the first 3D Chinese language disaster film,
    on September 30, 2013. Directed by Oxide and Danny Pang and starring
    renowned Hong Kong actors, Sean Lau, Louis Koo and Angelica Lee, the film
    has generated RMB 132.1 million in box office receipts to date.
  *Completed post-production work on The White Storm (formerly The Cartel
    War). A crime thriller starring three of Hong Kong's most popular film
    stars – Sean Lau, Louis Koo and Nick Cheung, the film opened the recent
    Hong Kong Asian Film Festival and will be released in China on November
    29, 2013.
  *Received regulatory approvals to distribute the Hollywood action comedy
    Red 2, starring Bruce Willis, Helen Mirren, John Malkovich and Anthony
    Hopkins. The film is scheduled for release in China on November 15, 2013.
  *Wrapped up shooting on the crime action comedy, From Vegas to Macau,
    starring Chow Yun-Fat, Nicholas Tse and Tian Jing. Directed by Wong Jing,
    it is tentatively scheduled for release around the Chinese New Year in
    early 2014.
  *Completed filming and began post production work on Overheard 3, the
    latest installment in our popular Overheard franchise. This police action
    film, explores the inside story of Hong Kong's real estate business. The
    film is co-directed by Alan Mak and Felix Chong and stars Sean Lau, Louis
    Koo, Daniel Wu and Xun Zhou. It is tentatively scheduled for release in
    early 2014.
  *Put the finishing touches on filming of the psychological thriller,
    Insanity, a new film produced by Derek Yee, directed by Guangyao Li and
    starring Sean Lau and Xiaoming Huang. The film is tentatively scheduled
    for release in 2014.
  *Announced the launch of an RMB 1 billion (approximately US$163.4 million)
    film fund through a 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.
  *Further improved ownership structure with investment from Fosun Group to
    acquire 2,000,000 Bona ordinary shares, representing a 6.4% equity stake,
    at an average price of US$10.40 per ordinary share, or US$5.20 per ADS.
    Actively working with Fosun to identify how to best leverage each other's
    resources.
  *Eight new theater locations are currently undergoing or about to enter the
    construction stage, including Sanya, Liuzhou, Zibo, Taiyuan, Ningbo,
    Shenzhen Huangting, Shenzhen Xinghe and Wuhan, with the Zibo theater on
    track to officially start operations by the end of this year.

Third Quarter 2013 Financial Results

Net Revenues

                     3Q13 3Q12 Y-o-Y%
Net Revenues (US$mm) 35.0 24.6 42.1%

Net revenues for the third quarter of 2013 increased 42.1% year-over-year to
US$35.0 million. The increase in net revenues was primarily attributable to an
increase in revenues from the Company's movie theater and film distribution
segments. The Company distributed three films in the third quarter of 2013
compared to two films in the third quarter of 2012.

Net Revenues by Segment Operations

            Film         Investment& Movie   Talent Intersegment Consolidated
             Distribution Production   Theater Agency Elimination
Net Revenues
from
External     18.2         1.4          15.2    0.2    --           35.0
Customers
(US$mm)
Intersegment
Revenues     0.6          12.2         --      --     (12.8)       --
(US$mm)
Total Net
Revenues     18.8         13.6         15.2    0.2    (12.8)       35.0
(US$mm)

Net revenues from distribution totaled US$18.8 million. During the third
quarter of 2013, Bona distributed three new films – Unbeatable, My Lucky Star
and Out of Inferno 3D.

Net revenues from film investment and production were US$13.6 million, mainly
derived from Bona's investments in films released in the third quarter of
2013, in particular Unbeatable and My Lucky Star.

Net revenues from the movie theater segment increased to US$15.2 million,
primarily as a result of the increased number of Bona-owned theaters in
operation. The Company owned and operated 20 theaters as of September 30,
2013, compared with 15 as of September 30, 2012.

Gross Profit and Gross Margin

                    3Q13  3Q12  Y-o-Y%
Gross Profit (US$mm) 19.8  13.6  45.2%
Gross Margin         56.6% 55.4% --

For the third quarter of 2013, gross profit increased to US$19.8 million from
US$13.6 million in the third quarter of 2012. The year-over-year increase in
gross profit was primarily attributable to strong performance from the
Company's film distribution segment and the expansion of movie theaters.

Segment Profit^3 and                                          
Segment Margin
                                                             
                        Distribution Investment& Movie   Talent Consolidated
                                      Production   Theater Agency
Segment Profit (US$mm)   6.2          4.9          8.7     0.2    20.0
As % of Total Segment    30.9%        24.7%        43.5%   0.9%   100.0%
Profit
Segment Margin           32.9%        36.2%        57.4%   100.0% 57.2%

Segment margin for the distribution segment increased to 32.9% in the third
quarter of 2013 from 30.1% in the third quarter of 2012, which is in line with
our distribution margin range.

Segment margin from the Company's investment and production business decreased
to 36.2% in the third quarter of 2013, compared with a segment margin of 39.8%
in the third quarter of 2012. This decrease in segment margin in this business
was mainly due to the high margin achieved in the sale of the Company's
television series Bodyguards and Assassins in the third quarter of 2012.

Segment margin from the Company's movie theater business increased to 57.4% in
the third quarter of 2013, compared with 57.0% in the third quarter of 2012.

Operating Income and Operating Margin

                          3Q13 3Q12 Y-o-Y%
Operating Expenses (US$mm) 16.6 12.8 29.2%
Operating Income (US$mm)   3.4  1.1  219.7%
Operating Margin           9.6% 4.3% --

Total operating expenses, including participation expenses, general and
administrative expenses, and selling and marketing expenses, increased 29.2%
to US$16.6 million from US$12.8 million in the third quarter of 2012. The
year-over-year increase in operating expenses was primarily due to an increase
in selling and marketing expenses for the promotion and advertising of the
Company's distributed films, which in the third quarter included Unbeatable,
My Lucky Star and Out of Inferno 3D, as well as an increase in general and
administrative expenses due to the Company's expansion in the movie theater
segment.

Third quarter 2013 operating margin was 9.6% compared to 4.3% in the third
quarter of 2012. The year-over-year increase in operating margin was primarily
due to the strong performance of Unbeatable and My Lucky Star, and all
theaters maturing in 2013.

Net Income and Net Income Attributable to Bona Film Group Limited per ADS
                                                                        
                                                                    3Q13 3Q12
Net Income Attributable to Bona Film Group Limited (US$mm)           2.8  1.3
Net Income Attributable to Bona Film Group Limited per ADS (US$)     0.05 0.02
                                                                        
                                                                    3Q13 3Q12
Non-GAAP Net Income (US$mm)                                          3.7  2.4
Non-GAAP Net Income Attributable to Bona Film Group Limited per ADS  0.06 0.04
(US$)

Excluding share-based compensation expense of US$0.9 million and US$1.3
million for the third quarters of 2013 and 2012, respectively, non-GAAP net
income for the third quarter of 2013 was US$3.7 million, compared with
non-GAAP net income of US$2.4 million in the third quarter of 2012.

                        3Q13 3Q12
EBITDA, non-GAAP (US$mm) 6.2  3.7

EBITDA, non-GAAP, in the third quarter of 2013 was US$6.2 million, compared
with EBITDA, non-GAAP of US$3.7 million in the third quarter of 2012.

Cash and Cash Flow

As of September 30, 2013, Bona had cash, cash equivalents and restricted cash
totaling US$41.7 million, compared with US$28.0 million as of December 31,
2012. Net cash outflow from operating activities for the third quarter was
approximately US$24.0 million, compared with net cash outflow from operating
activities of US$12.2 million for the third quarter of 2012. The change in
cash flow from operations was mainly attributable to the increase in
investment in films scheduled for release in the fourth quarter of 2013 and in
2014.

Business Outlook

Based on current market and operating conditions, the Company expects non-GAAP
net income for the fourth quarter of 2013 to be in the range of US$2.0 million
to US$2.5million.

"We have made very good progress in 2013, releasing many quality films,
growing our theater network, developing a film investment fund to finance the
development and production of Bona films and TV projects over the next two
years, and diversifying our ownership structure through a meaningful
investment by Fosun Group. As we head into the fourth quarter, we have two
solid films scheduled for release – Red 2 and The White Storm, and one new
theater slated to open. The outlook for 2014 is even better, as we have many
strong film titles in our distribution and development pipelines, the
financial resources to bring more quality films to market and plans to further
expand our theater network. Additionally, we expect our international
cooperation initiatives to gain traction, creating further revenue
opportunities for us in the future. Bona has built a strong foundation on
which to grow and we are excited about the opportunities that lie ahead,"
concluded Mr. Yu.

Third Quarter 2013 Conference Call Details

Bona management will hold the earnings conference call at 8:00 p.m. Eastern
Time on Thursday, November 14, 2013 (9:00 a.m. Beijing/Hong Kong Time on
Friday, November 15, 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 94765154.

A live and archived webcast of the earnings conference call will be available
on the IR Calendar page of the Bona 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.

^2 As 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.

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

BONA FILM GROUP LIMITED
Unaudited Condensed Consolidated Statement of Operations
(in U.S. dollars, except share data)
                                                              
                        Three-months ended        Nine-months ended September
                         September 30,             30,
                        2013         2012         2013           2012
                                                              
Net revenue              35,000,622   24,637,167   106,573,292    89,056,746
Cost of revenue          15,195,260   10,998,168   56,955,408     42,954,146
Gross profit             19,805,362   13,638,999   49,617,884     46,102,600
                                                              
Film participation       (215,072)    180,673      (538,161)      875,526
expenses
Selling and marketing    4,417,436    2,079,887    10,232,127     12,316,316
expenses
General and              12,365,960   10,562,189   36,323,247     28,806,673
administrative expenses
Total operating expenses 16,568,324   12,822,749   46,017,213     41,998,515
                                                              
Government subsidies     121,099      234,211      1,661,754      855,015
                                                              
Operating income         3,358,137    1,050,461    5,262,425      4,959,100
                                                              
Interest income          102,380      56,992       98,010         256,439
Interest expenses        (513,499)    (25,396)     (1,334,166)    (221,088)
Exchange gain (loss)     471,802      249,597      983,028        (261,816)
Other income             71,429       71,429       214,287        216,728
Loss on disposal of an   --           --           --             (5,584)
equity method investment
Income before income tax
and equity in earnings   3,490,249    1,403,083    5,223,584      4,943,779
of equity method
investments, net of tax
                                                              
Provision for income     698,050      280,617      1,044,717      988,757
taxes
Equity in earnings of
equity method            (12,821)     --           (12,821)       5,604
investments, net of tax
Net income               2,779,378    1,122,466    4,166,046      3,960,626
                                                              
Less: Net (loss)
attributable to the      (70,440)     (175,182)    (1,071,480)    (119,001)
noncontrolling interests
Net income attributable
to Bona Film Group       2,849,818    1,297,648    5,237,526      4,079,627
Limited
                                                              
Net income attributable to Bona Film Group Limited               
per ADS
Basic                    0.05         0.02         0.09           0.07
Diluted                  0.05         0.02         0.09           0.07
                                                              
Weighted average shares
used in calculating net                                        
income per ordinary
share
Basic                    29,854,984   29,528,036   29,791,387     29,464,037
Diluted                  30,362,446   30,219,935   30,306,325     30,096,919


BONA FILM GROUP LIMITED
Unaudited Condensed Statement of Consolidated Comprehensive Income
(in U.S. dollars)
                                                              
                              Three-months ended  Nine-months ended September
                               September 30,       30,
                              2013      2012      2013           2012
                                                              
Net income                     2,779,378 1,122,466 4,166,046      3,960,626
Other comprehensive income,                                    
net of tax
Foreign currency translation   395,003   1,065,775 1,838,060      187,794
adjustments
Comprehensive income           3,174,381 2,188,241 6,004,106      4,148,420
Less: comprehensive income
attributable to the            (69,189)  (175,773) (1,060,518)    (132,410)
noncontrolling interests
Comprehensive income
attributable to Bona Film      3,243,570 2,364,014 7,064,624      4,280,830
Group


BONA FILM GROUP LIMITED
Unaudited Condensed Consolidated Balance Sheets
(in U.S. dollars)
                                                                
                                                   September 30, December 31,
                                                   2013          2012
                                                                
Cash and cash equivalents                           21,436,748    23,227,922
Restricted Cash                                     20,291,294    4,815,332
Accounts receivable, net of allowance for doubtful  49,377,394    40,307,672
accounts
Prepaid expenses and other current assets           23,878,697    23,329,262
Amounts due from related parties                    332,480       343,817
Current deferred tax assets                         653,071       970,683
Inventories                                         355,422       276,436
Total current assets                                116,325,106   93,271,124
                                                                
Distribution rights                                 19,749,238    11,406,692
Production costs                                    118,656,777   90,345,409
Prepaid film costs                                  6,416,911     7,426,915
Property and equipment, net                         60,447,391    60,208,609
Acquired intangible assets, net                     2,637,578     3,189,481
Non-current deferred tax assets                     248,231       311,102
Cost method investments                             1,298,039     1,296,307
Equity method investment                            25,068,868    --
Goodwill                                            49,992,873    49,110,021
Total assets                                        400,841,012   316,565,660
                                                                
Accounts payable                                    29,828,851    35,257,660
Accrued expenses and other current liabilities      31,906,774    28,145,099
Amounts due to related parties                      5,613,160     5,746,328
Income taxes payable                                1,741,194     2,420,443
Bank borrowing                                      50,590,625    12,542,161
Other borrowing                                     7,741,842     8,671,050
Current film participation financing liabilities    49,032,484    15,086,892
Total current liabilities                           176,454,930   107,869,633
                                                                
Bank borrowing                                      22,952,852    18,025,553
Deferred income                                     955,789       813,681
Deferred tax liability                              71,278        211,203
Total liabilities                                   200,434,849   126,920,070
                                                                
Bona Film Group Limited's ordinary shares (par
value of US$0.0005 per share, 85,000,000 shares
authorized, 31,402,346 and 30,086,404 shares issued 15,043        14,869
and outstanding as of September30, 2013 and
30,402,346 and 29,737,257 shares issued and
outstanding as of December 31, 2012.)
Additional paid-in capital                          181,107,823   176,134,737
Statutory reserves                                  2,543,272     2,543,272
Accumulated profit                                  5,788,044     550,518
Accumulated other comprehensive income              8,292,188     6,465,090
Total Bona Film Group Limited's equity              197,746,370   185,708,486
                                                                
Noncontrolling interests                            2,659,793     3,937,104
Total equity                                        200,406,163   189,645,590
                                                                
Total liabilities and equity                        400,841,012   316,565,660


BONA FILM GROUP LIMITED
Unaudited Reconciliation of Non-GAAP Measures
(in U.S. dollars)
                                                             
                     Three-months ended September Nine-months ended September
                      30,                          30,
                     2013           2012          2013          2012
                                                             
Net income           2,779,378      1,122,466     4,166,046     3,960,626
                                                             
Share-based           918,911        1,271,606     2,786,083     3,435,897
compensation
Net income, Non-GAAP  3,698,289      2,394,072     6,952,129     7,396,523
                                                             
Net interests expense 411,119        (31,596)      1,236,156     (35,351)
(income)
Taxes                 698,050        280,617       1,044,717     988,757
Depreciation and      1,428,575      1,077,981     4,241,194     3,157,929
Amortization
EBITDA, Non-GAAP      6,236,033      3,721,074     13,474,196    11,507,858

CONTACT: In China:
         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
         Kathy Price
         Tel: (212) 481-2050
         Email: bona@tpg-ir.com

Bona Film Group Limited Logo