BEIJING, May 21, 2014 /PRNewswire/ -- Renren Inc. (NYSE:
RENN) ("Renren" or the "Company"), a leading real-name social
networking internet platform in China, today announced its unaudited financial
results for the first quarter ended March
31, 2014.
First Quarter 2014 Highlights
- Total net revenues were US$24.9
million, a 39.9% decrease from the corresponding period in
2013.
- Renren net revenues were US$12.2
million, a 17.3% decrease from the corresponding period in
2013.
- Games net revenues were US$12.7
million, a 52.5% decrease from the corresponding period in
2013.
- Gross profit was US$8.7
million, a 65.2% decrease from the corresponding period in
2013.
- Operating loss was US$29.2
million, compared to an operating loss of US$20.4 million in the corresponding period in
2013.
- Net income attributable to the Company was US$32.3 million, compared to a net loss of
US$3.1 million in the corresponding
period in 2013.
- Adjusted net income (1) (non-GAAP)
was US$36.1 million, compared to an
adjusted net income of US$0.5 million
in the corresponding period in 2013.
"First quarter revenues, as expected, remained under pressure
from the challenges in advertising and gaming that we have faced
for some quarters. On the positive side, the portion of
advertising from mobile is growing and the interest from brand
advertisers for the young target demographic that Renren serves is
notably increasing. Meanwhile, we are pleased to see strong growth
in the amount of UGC videos uploaded to our on-line video site,
56.com, along with its increasing traffic", commented Joseph Chen, Chairman and Chief Executive
Officer. "We remain committed in building and realizing long-term
value for our shareholders."
(1) Adjusted net
income (loss) is a non-GAAP measure, which is defined as net income
(loss) excluding share-based compensation expenses, amortization of
intangible assets and impairment of intangible assets.
|
First Quarter 2014 Results
Total net revenues for the first quarter of 2014 were
US$24.9 million, representing a 39.9%
decrease from the corresponding period in 2013.
Renren net revenues were US$12.2
million, representing a 17.3% decrease from the
corresponding period of 2013. Within Renren net revenues, online
advertising revenues were US$7.8
million for the first quarter of 2014, a 19.2% decrease from
the corresponding period of 2013. The decrease was due to
increasing competition and traffic migration to mobile. Internet
Value-Added Services (IVAS) revenues were US$4.4 million, representing a 13.6% decrease
from the corresponding period in 2013. The number of accumulated
activated users on renren.com increased from approximately
184 million as of March 31, 2013 to approximately
210 million as of March 31, 2014. Monthly unique log-in
users in March 2014 was approximately
51 million, compared to approximately 57 million in
March 2013 and approximately 45
million in December 2013.
Games net revenues were US$12.7
million for the first quarter of 2014, a 52.5% decrease from
the corresponding period of 2013. The decrease was due to
previously launched games having reached mature stages and the
earlier disclosed delay of new games release.
Cost of revenues was US$16.2
million, a 1.0% decrease from the corresponding period of
2013.
Operating expenses were US$38.0
million, a 16.7% decrease from the corresponding period of
2013.
Selling and marketing expenses were US$10.8 million, a 16.0% decrease from the
corresponding period of 2013. The decrease was primarily due to the
decreased marketing related expenses and promotions for online
games.
Research and development expenses were US$15.7 million, a 30.5% decrease from the
corresponding period in 2013. The decrease was primarily due to
headcount reduction and decrease in personnel related expenses.
General and administrative expenses were US$11.4 million, a 12.1% increase from the
corresponding period in 2013. The increase was primarily due
to the increase in office rents and share-based-compensation
expenses.
Share-based compensation expenses, which were all
included in operating expenses, were US$3.4
million, compared to US$3.2
million in the corresponding period in 2013.
Operating loss was US$29.2
million, compared to an operating loss of US$20.4 million in the corresponding period in
2013.
Realized gain on short-term investments was US$27.1 million, compared to US$15.1 million in the corresponding period in
2013. The gain was primarily derived from the sale of marketable
securities.
Gain on disposal of equity method investment, net of income
taxes was US$57.1 million, due
solely to the one-time gain from the disposal of our remaining
equity interest in Nuomi.
Net income attributable to the Company was US$32.3 million, compared to a net loss of
US$3.1 million in the corresponding
period in 2013. This was primarily due to the US$57.1 million gain on the disposal of equity
method investment.
Adjusted net income (non-GAAP) was US$36.1 million, compared to an adjusted net
income of US$0.5 million in the
corresponding period in 2013. The increase was primarily due to the
US$57.1 million gain on the disposal
of equity method investment. Adjusted net income (loss) is defined
as net income (loss) excluding share-based compensation expenses,
amortization of intangible assets and impairment of intangible
assets.
Share Repurchase Program Update and Extension
As of May 20, 2014, Renren had
repurchased approximately 22.4 million ADSs under the current
repurchase program for a total consideration of US$68.4 million. The current share
repurchase program will expire on June
27, 2014. Our board has recently authorized another
share repurchase program of US$100
million for one year effective from June 28, 2014.
Business Outlook
The Company expects to generate revenues in an amount ranging
from US$21 million to US$23 million
in the second quarter of 2014, representing a 47.1% to 51.7%
year-over-year decline. This forecast reflects Renren's current and
preliminary view, which is subject to change.
Conference Call Information
Management will host an earnings conference call at 9:00 p.m. Eastern Time on Wednesday, May 21, 2014 (Beijing/Hong Kong Time: 9:00 a.m., Thursday, May
22, 2014).
Interested parties may participate in the conference call by
dialing the numbers below and entering passcode 10-15 minutes prior
to the initiation of the call.
Dial-in Information:
US: +1 845-675-0437
Hong Kong: +852-2475-0994
China: +86 800-819-0121
International: + 65-6723-9381
Passcode: Renren
A replay of the call will be available for one week and dial-in
information is as follows:
International: + 61 2-8199-0299
Passcode: 45186498
This call will be webcast live and the replay will be available
on Renren's corporate web site at http://ir.renren-inc.com for 12
months.
About Renren Inc.
Renren Inc. (NYSE: RENN) operates a leading real name social
networking internet platform in China. It enables users to connect and
communicate with each other, share information and user generated
content, play online games, watch videos and enjoy a wide range of
other features and services. Renren's businesses primarily include
the main social networking website renren.com, the game development
and operating platform Renren Games, and the user-generated content
focused video sharing website 56.com. Renren.com had approximately
210 million activated users as of March 31,
2014. Renren's American depositary shares, each of which
represents three Class A ordinary shares, trade on NYSE under the
symbol "RENN".
Safe Harbor Statement
This announcement contains forward-looking statements. These
statements are made under the "safe harbor" provisions of 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 business outlook for the second quarter of 2014 and quotations
from management in this announcement, as well as Renren's strategic
and operational plans, contain forward-looking statements. Renren
may also make written or oral forward-looking statements in its
filings with the U.S. Securities and Exchange Commission ("SEC"),
in its annual report to shareholders, in press releases and other
written materials and in oral statements made by its officers,
directors or employees to third parties. Statements that are not
historical facts, including statements about Renren's beliefs and
expectations, are forward-looking statements. Forward-looking
statements involve inherent risks and uncertainties. A number of
factors could cause actual results to differ materially from those
contained in any forward-looking statement, including but not
limited to the following: our goals and strategies; our future
business development, financial condition and results of
operations; the expected growth of the social networking site
market in China; our expectations
regarding demand for and market acceptance of our services; our
expectations regarding the retention and strengthening of our
relationships with key advertisers and customers; our plans to
enhance user experience, infrastructure and service offerings;
competition in our industry in China; and relevant government policies and
regulations relating to our industry. Further information regarding
these and other risks is included in our annual report on
Form 20-F and other documents filed with the SEC. All
information provided in this press release and in the
attachments is as of the date of this press release, and Renren
does not undertake any obligation to update
any forward-looking statement, except as required under
applicable law.
About Non-GAAP Financial Measures
To supplement Renren's consolidated financial results presented
in accordance with United States Generally Accepted Accounting
Principles ("GAAP"), Renren uses "adjusted net income (loss)" which
is defined as "a non-GAAP financial measure" by the SEC, in
evaluating its business. We define adjusted net income (loss) as
net income (loss) excluding share-based compensation expenses,
amortization of intangible assets and impairment of intangible
assets. We present adjusted net income (loss) because it is used by
our management to evaluate our operating performance. We also
believe that this non-GAAP financial measure provide useful
information to investors and others in understanding and evaluating
our consolidated results of operations in the same manner as our
management and in comparing financial results across accounting
periods and to those of our peer companies.
The presentation of this non-GAAP financial measure is not
intended to be considered in isolation from, or as a substitute
for, the financial information prepared and presented in accordance
with GAAP. For more information on these non-GAAP financial
measures, please see the table captioned "Reconciliation of
non-GAAP results of operations measures to the comparable GAAP
financial measures" at the end of this release.
For more information, please contact:
Cynthia Liu
Investor Relations
Renren Inc.
Tel: (86 10) 8448 1818 ext 1300
Email: ir@renren-inc.com
RENREN
INC.
|
CONSOLIDATED
BALANCE SHEETS (UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Amounts in US
dollars, in thousands, except shares,
|
|
|
|
|
|
December 31,
|
|
|
March 31,
|
per shares, ADS, and
per ADS data)
|
|
|
|
2013
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
|
|
$
|
154,308
|
|
$
|
242,619
|
Term
deposits
|
|
|
|
|
|
492,699
|
|
|
339,478
|
Short-term
investments
|
|
|
|
|
|
301,995
|
|
|
403,225
|
Accounts and
notes receivable, net
|
|
|
|
|
|
15,958
|
|
|
11,425
|
Prepaid
expenses and other current assets
|
|
|
|
|
|
34,080
|
|
|
35,489
|
Amounts due
from related parties
|
|
|
|
|
|
62,411
|
|
|
527
|
Deferred tax
assets-current
|
|
|
|
|
|
628
|
|
|
628
|
Equity method
investment-current
|
|
|
|
|
|
60,508
|
|
|
—
|
Total
current assets
|
|
|
|
|
|
1,122,587
|
|
|
1,033,391
|
|
|
|
|
|
|
|
|
|
|
Non-current
assets:
|
|
|
|
|
|
|
|
|
|
Property and
equipment, net
|
|
|
|
|
|
58,560
|
|
|
56,269
|
Intangible
assets, net
|
|
|
|
|
|
27,397
|
|
|
26,303
|
Goodwill
|
|
|
|
|
|
61,407
|
|
|
59,800
|
Long-term
investments
|
|
|
|
|
|
107,842
|
|
|
144,833
|
Deferred tax
assets-non-current
|
|
|
|
|
|
1,109
|
|
|
1,102
|
Other
non-current assets
|
|
|
|
|
|
6,784
|
|
|
24,261
|
Total
non-current assets
|
|
|
|
|
|
263,099
|
|
|
312,568
|
|
|
|
|
|
|
|
|
|
|
TOTAL
ASSETS
|
|
|
|
|
$
|
1,385,686
|
|
$
|
1,345,959
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
AND EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
|
|
|
$
|
10,170
|
|
$
|
9,232
|
Accrued
expenses and other payables
|
|
|
|
|
|
33,314
|
|
|
29,790
|
Amounts due to
related parties
|
|
|
|
|
|
61,062
|
|
|
198
|
Deferred
revenue and advance from customers
|
|
|
|
|
|
8,639
|
|
|
7,427
|
Derivative
contract liabilities
|
|
|
|
|
|
—
|
|
|
6,934
|
Income tax
payable
|
|
|
|
|
|
2,077
|
|
|
7,964
|
Total
current liabilities
|
|
|
|
|
|
115,262
|
|
|
61,545
|
|
|
|
|
|
|
|
|
|
|
Non-current
liabilities:
|
|
|
|
|
|
|
|
|
|
Other
non-current liabilities
|
|
|
|
|
|
156
|
|
|
266
|
Total
non-current liabilities
|
|
|
|
|
|
156
|
|
|
266
|
|
|
|
|
|
|
|
|
|
|
TOTAL
LIABILITIES
|
|
|
|
|
|
115,418
|
|
|
61,811
|
|
|
|
|
|
|
|
|
|
|
Shareholders' Equity:
|
|
|
|
|
|
|
|
|
|
Class A
ordinary shares
|
|
|
|
|
|
790
|
|
|
770
|
Class B
ordinary shares
|
|
|
|
|
|
305
|
|
|
305
|
Additional
paid-in capital
|
|
|
|
|
|
1,285,283
|
|
|
1,265,336
|
Statutory
reserves
|
|
|
|
|
|
6,712
|
|
|
6,712
|
Accumulated
deficit
|
|
|
|
|
|
(197,726)
|
|
|
(165,409)
|
Accumulated
other comprehensive income
|
|
|
|
|
|
174,781
|
|
|
176,312
|
|
|
|
|
|
|
|
|
|
|
Total Renren
Inc. shareholders' equity
|
|
|
|
|
|
1,270,145
|
|
|
1,284,026
|
|
|
|
|
|
|
|
|
|
|
Noncontrolling
Interests
|
|
|
|
|
|
123
|
|
|
122
|
|
|
|
|
|
|
|
|
|
|
TOTAL
EQUITY
|
|
|
|
|
|
1,270,268
|
|
|
1,284,148
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND
EQUITY
|
|
|
|
|
$
|
1,385,686
|
|
$
|
1,345,959
|
RENREN
INC.
|
CONSOLIDATED
STATEMENTS OF OPERATIONS (UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months Ended
|
(Amounts in US
dollars, in thousands, except shares,
|
|
March
31,
|
|
December 31,
|
|
|
March
31,
|
per shares, ADS, and
per ADS data)
|
2013
|
|
2013
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
Net
revenues
|
|
|
|
|
|
|
|
|
|
Renren
|
|
$
|
14,796
|
|
$
|
15,129
|
|
$
|
12,235
|
Games
|
|
|
26,658
|
|
|
15,557
|
|
|
12,660
|
Total net
revenues
|
|
|
41,454
|
|
|
30,686
|
|
|
24,895
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenues
|
|
|
(16,325)
|
|
|
(17,737)
|
|
|
(16,160)
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
|
25,129
|
|
|
12,949
|
|
|
8,735
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
Selling and
marketing
|
|
|
(12,840)
|
|
|
(19,610)
|
|
|
(10,791)
|
Research and
development
|
|
|
(22,533)
|
|
|
(17,843)
|
|
|
(15,669)
|
General and
administrative
|
|
|
(10,193)
|
|
|
(14,409)
|
|
|
(11,423)
|
Impairment of
intangible assets
|
|
|
—
|
|
|
(208)
|
|
|
(66)
|
Restructuring
cost
|
|
|
—
|
|
|
(3,475)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Total
operating expenses
|
|
|
(45,566)
|
|
|
(55,545)
|
|
|
(37,949)
|
|
|
|
|
|
|
|
|
|
|
Loss from
operations
|
|
|
(20,437)
|
|
|
(42,596)
|
|
|
(29,214)
|
|
|
|
|
|
|
|
|
|
|
Other
income
|
|
|
257
|
|
|
603
|
|
|
265
|
Exchange gain
(loss) on offshore bank accounts
|
|
|
(6)
|
|
|
1,036
|
|
|
(2,527)
|
Interest
income
|
|
|
3,733
|
|
|
2,888
|
|
|
2,733
|
Realized gain
on short-term investments
|
|
|
15,073
|
|
|
9,049
|
|
|
27,093
|
Impairment of
short-term investments
|
|
|
—
|
|
|
(2,098)
|
|
|
—
|
Impairment of
equity method investments
|
|
|
—
|
|
|
(23,025)
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Loss before
provision of income tax, earnings (loss) in
equity method investments and noncontrolling
interest, net of
income taxes
|
|
|
(1,380)
|
|
|
(54,143)
|
|
|
(1,650)
|
Income tax
benefit
|
|
|
80
|
|
|
7,054
|
|
|
19
|
|
|
|
|
|
|
|
|
|
|
Loss before
earnings (loss) in equity method
investments and noncontrolling interest, net of
income taxes
|
|
|
(1,300)
|
|
|
(47,089)
|
|
|
(1,631)
|
(Loss) earnings
in equity method investments, net of income taxes
|
|
|
5,143
|
|
|
17,974
|
|
|
(23,145)
|
Income
(loss) from continuing operations
|
|
|
3,843
|
|
|
(29,115)
|
|
|
(24,776)
|
|
|
|
|
|
|
|
|
|
|
Discontinued
operation
|
|
|
|
|
|
|
|
|
|
Loss from
operations of discontinued operations, net of income
taxes
|
|
|
(6,997)
|
|
|
(2,720)
|
|
|
—
|
Gain on
deconsolidation of the subsidiaries
|
|
|
—
|
|
|
132,665
|
|
|
—
|
Gain on
disposal of equity method investment, net of income
taxes
|
|
|
—
|
|
|
—
|
|
|
57,092
|
Gain (loss)
from discontinued operations, net of income
taxes
|
|
|
(6,997)
|
|
|
129,945
|
|
|
57,092
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
|
(3,154)
|
|
|
100,830
|
|
|
32,316
|
Net loss
attributable to noncontrolling interests
|
|
|
17
|
|
|
—
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss) attributable to Renren Inc.
|
|
$
|
(3,137)
|
|
$
|
100,830
|
|
$
|
32,317
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss) per share from continuing operations attributable to
Renren Inc.shareholders per share:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.00
|
|
$
|
(0.03)
|
|
$
|
(0.02)
|
Diluted
|
|
$
|
0.00
|
|
$
|
(0.03)
|
|
$
|
(0.02)
|
Net income
(loss) per share from discontinued operations attributable to
Renren Inc.shareholders per
share:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.01)
|
|
$
|
0.12
|
|
$
|
0.05
|
Diluted
|
|
$
|
(0.01)
|
|
$
|
0.12
|
|
$
|
0.05
|
Net income
(loss) per share attributable to Renren Inc. shareholders per
share:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.00)
|
|
$
|
0.09
|
|
$
|
0.03
|
Diluted
|
|
$
|
(0.00)
|
|
$
|
0.09
|
|
$
|
0.03
|
Net income
(loss) attributable to Renren Inc. shareholders per
ADS:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.01)
|
|
$
|
0.27
|
|
$
|
0.09
|
Diluted
|
|
$
|
(0.01)
|
|
$
|
0.27
|
|
$
|
0.09
|
|
|
|
|
|
|
|
|
|
|
Weighted
average number of shares used in calculating net income (loss)
per
ordinary share from continuing operations attributable
to Renren Inc.
shareholders:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
1,132,823,805
|
|
|
1,106,742,708
|
|
|
1,082,856,840
|
Diluted
|
|
|
1,160,711,624
|
|
|
1,106,742,708
|
|
|
1,082,856,840
|
Weighted
average number of shares used in calculating net income (loss)
per
ordinary share from discontinued operations
attributable to Renren Inc.
shareholders:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
1,132,823,805
|
|
|
1,106,742,708
|
|
|
1,082,856,840
|
Diluted
|
|
|
1,160,711,624
|
|
|
1,117,484,147
|
|
|
1,092,355,990
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Non-GAAP results of operations measures to the comparable GAAP
financial measures
|
|
|
|
|
|
|
|
|
|
|
Adjusted net
income
|
|
|
|
|
|
|
|
|
|
|
|
For the
Three Months Ended
|
(Amounts in US
dollars, in thousands)
|
|
March
31,
|
|
|
December
31,
|
|
|
March
31,
|
2013
|
|
|
2013
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
|
(3,154)
|
|
$
|
100,830
|
|
$
|
32,316
|
Add back: Shared-based compensation expenses
|
|
|
3,235
|
|
|
3,188
|
|
|
3,351
|
Add back: Amortization
of intangible assets
|
|
|
391
|
|
|
456
|
|
|
319
|
Add back: Impairment of intangible assets
|
|
|
—
|
|
|
208
|
|
|
66
|
Adjusted net
income
|
|
$
|
472
|
|
$
|
104,682
|
|
$
|
36,052
|
SOURCE Renren Inc.