BEIJING, Nov. 20, 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 third quarter ended September 30, 2014.
Third Quarter 2014 Highlights
- Total net revenues were US$21.6
million, a 47.4% decrease from the corresponding period in
2013.
- Renren net revenues were US$13.5
million, a 34.5% decrease from the corresponding period in
2013
- Games net revenues were US$8.1
million, a 60.5% decrease from the corresponding period in
2013.
- Gross profit was US$5.5
million, a 77.0% decrease from the corresponding period in
2013.
- Operating loss was US$95.7
million, compared to an operating loss of US$24.7 million in the corresponding period in
2013.
- Net loss attributable to the Company was US$38.1 million, compared to a net loss of
US$24.6 million in the corresponding
period in 2013.
- Adjusted net income
(1) (non-GAAP) was US$29.3 million, compared to an adjusted net loss
of US$19.7 million in the
corresponding period in 2013.
(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 and goodwill.
|
"In this quarter, we continued to execute our strategy of
focusing on our core business and core user base. We recently
divested the video business of 56.com and further streamlined our
gaming operations. Meanwhile, we launched Renren Fenqi, a new
service which provides credit financing to college students in
China, as a new effort to monetize
our user base," commented Joseph
Chen, Chairman and Chief Executive Officer. "The company is
undergoing a challenging transition. But we remain committed to
building the long term value for our shareholders through
continuous transformation."
Third Quarter 2014 Results
Total net revenues for the third quarter of 2014 were
US$21.6 million, representing a 47.4%
decrease from the corresponding period in 2013.
Renren net revenues were US$13.5
million, representing a 34.5% decrease from the
corresponding period of 2013. Within Renren net revenues, online
advertising revenues were US$8.8
million for the third quarter of 2014, a 40.3% decrease from
the corresponding period of 2013. The decrease was due to the
continuous migration of traffic to mobile and fierce competition.
Internet Value-Added Services (IVAS) revenues were
US$4.7 million, representing a 19.6%
decrease from the corresponding period in 2013. Monthly unique
log-in users in September 2014 was
approximately 44 million, compared to approximately 50 million
in September 2013.
Games net revenues were US$8.1
million for the third quarter of 2014, a 60.5% decrease from
the corresponding period of 2013. The decrease was mainly due
to the lack of new titles and our previously launched games having
reached their matured stages.
Cost of revenues was US$16.1
million, a 5.8% decrease from the corresponding period of
2013.
Operating expenses were US$101.2
million, a 107.7% increase from the corresponding period of
2013.
Selling and marketing expenses were US$12.0 million, a 22.5% decrease from the
corresponding period of 2013. The decrease was primarily due to the
decrease in advertising and promotions for online games plus
decreased headcount and personnel related expense for Renren.
Research and development expenses were US$12.7 million, a 36.3% 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$13.8 million, a 3.5% increase from the
corresponding period in 2013.
Impairment of intangible assets and goodwill were
US$13.7 million and US$46.9 million respectively. The fair
value of the intangible assets and goodwill of the Renren platform
reporting unit, which included 56.com, were estimated based on the
latest operating results and market conditions and the Company
determined that such impairments were required.
Restructuring costs were US$2.1
million, representing the gaming business restructuring cost
that occurred during the reporting quarter.
Share-based compensation expenses, which were all
included in operating expenses, were US$6.6
million, compared to US$4.5
million in the corresponding period in 2013.
Operating loss was US$95.7
million, compared to an operating loss of US$24.7 million in the corresponding period in
2013. The increase of operating loss was primarily due to one-time
impairment charges of intangible assets and goodwill.
Net loss attributable to the Company was US$38.1 million, compared to a net loss of
US$24.6 million in the corresponding
period in 2013.
Adjusted net income (non-GAAP) was US$29.3 million, compared to an adjusted net loss
of US$19.7 million in the
corresponding period in 2013. This was primarily due to the
US$47.2 million earnings in equity
method investments that were mainly derived from earnings in
Japan Macro Opportunities Offshore
Partners, LP. Adjusted net income (loss) is defined as net
income (loss) excluding share-based compensation expenses,
amortization of intangible assets and impairment of intangible
assets and goodwill.
Share Repurchase Program
On June 28, 2014, the Company
announced a new share repurchase program to repurchase up to
US$100 million of the Company's
ADSs. During the third quarter of 2014, Renren repurchased
approximately 4 million ADSs.
Subsequent Event
On October 28, 2014, the Company
and Sohu.com Inc. entered into a definitive agreement, pursuant to
which Sohu.com Inc. will acquire the Company's 56.com online video
business, excluding the online talent show Woxiu. Subject to
the satisfaction or waiver of the closing conditions provided in
the definitive agreement, the parties expect to close this
acquisition in the fourth quarter of 2014.
Business Outlook
The Company expects to generate revenues in an amount ranging
from US$15 million to US$17 million
in the fourth quarter of 2014, representing 44.6% to 51.1%
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 8:00 p.m. Eastern Time on Thursday, November 20, 2014 (Beijing/Hong Kong Time: 9:00 a.m., Friday,
November 21, 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:
|
+1-845-507-1610
|
Hong
Kong:
|
+852-3051-2792
|
China:
|
+86
800-870-0210
|
International:
|
+61
2-8373-3610
|
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:
|
33240668
|
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 and the game
development and operating platform Renren Games. Renren.com had
approximately 219 million activated users as of September 30, 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 fourth 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 and goodwill. 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, per
shares, ADS, and per ADS data)
|
|
|
|
|
December 31,
|
|
|
September
30,
|
|
|
|
2013
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
|
$
|
154,308
|
|
$
|
169,500
|
Term
deposits
|
|
|
|
|
492,699
|
|
|
570,680
|
Restricted
Cash
|
|
|
|
|
—
|
|
|
2,060
|
Short-term
investments
|
|
|
|
|
301,995
|
|
|
72,016
|
Accounts and
notes receivable, net
|
|
|
|
|
15,958
|
|
|
16,125
|
Prepaid
expenses and other current assets
|
|
|
|
|
34,080
|
|
|
25,433
|
Amounts due
from related parties
|
|
|
|
|
62,411
|
|
|
405
|
Deferred tax
assets-current
|
|
|
|
|
628
|
|
|
458
|
Equity method
investment-current
|
|
|
|
|
60,508
|
|
|
—
|
Total
current assets
|
|
|
|
|
1,122,587
|
|
|
856,677
|
|
|
|
|
|
|
|
|
|
Non-current
assets:
|
|
|
|
|
|
|
|
|
Property and
equipment, net
|
|
|
|
|
58,560
|
|
|
49,654
|
Intangible
assets, net
|
|
|
|
|
27,397
|
|
|
12,935
|
Goodwill
|
|
|
|
|
61,407
|
|
|
13,700
|
Long-term
investments
|
|
|
|
|
107,842
|
|
|
206,293
|
Deferred tax
assets-non-current
|
|
|
|
|
1,109
|
|
|
1,560
|
Other
non-current assets
|
|
|
|
|
6,784
|
|
|
23,707
|
Total
non-current assets
|
|
|
|
|
263,099
|
|
|
307,849
|
|
|
|
|
|
|
|
|
|
TOTAL
ASSETS
|
|
|
|
$
|
1,385,686
|
|
$
|
1,164,526
|
|
|
|
|
|
|
|
|
|
LIABILITIES
AND EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
|
|
$
|
10,170
|
|
$
|
8,355
|
Accrued
expenses and other payables
|
|
|
|
|
33,314
|
|
|
21,853
|
Amounts due to
related parties
|
|
|
|
|
61,062
|
|
|
87
|
Deferred
revenue and advance from customers
|
|
|
|
|
8,639
|
|
|
7,662
|
Derivative
contract liabilities
|
|
|
|
|
—
|
|
|
2,866
|
Income tax
payable
|
|
|
|
|
2,077
|
|
|
8,629
|
Total
current liabilities
|
|
|
|
|
115,262
|
|
|
49,452
|
|
|
|
|
|
|
|
|
|
Non-current
liabilities:
|
|
|
|
|
|
|
|
|
Other
non-current liabilities
|
|
|
|
|
156
|
|
|
154
|
Total
non-current liabilities
|
|
|
|
|
156
|
|
|
154
|
|
|
|
|
|
|
|
|
|
TOTAL
LIABILITES
|
|
|
|
|
115,418
|
|
|
49,606
|
|
|
|
|
|
|
|
|
|
Shareholders' Equity:
|
|
|
|
|
|
|
|
|
Class A
ordinary shares
|
|
|
|
|
790
|
|
|
744
|
Class B
ordinary shares
|
|
|
|
|
305
|
|
|
305
|
Additional
paid-in capital
|
|
|
|
|
1,285,283
|
|
|
1,244,690
|
Statutory
reserves
|
|
|
|
|
6,712
|
|
|
6,712
|
Accumulated
deficit
|
|
|
|
|
(197,726)
|
|
|
(172,225)
|
Accumulated
other comprehensive income
|
|
|
|
|
174,781
|
|
|
34,694
|
|
|
|
|
|
|
|
|
|
Total Renren
Inc. shareholders' equity
|
|
|
|
|
1,270,145
|
|
|
1,114,920
|
|
|
|
|
|
|
|
|
|
Noncontrolling
Interests
|
|
|
|
|
123
|
|
|
-
|
|
|
|
|
|
|
|
|
|
TOTAL
EQUITY
|
|
|
|
|
1,270,268
|
|
|
1,114,920
|
|
|
|
|
|
|
|
|
|
TOTAL
LIABILITIES AND EQUITY
|
|
|
|
$
|
1,385,686
|
|
$
|
1,164,526
|
RENREN
INC.
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED
STATEMENTS OF OPERATIONS (UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months Ended
|
(Amounts in US
dollars, in thousands, except shares,
|
|
|
September
30,
|
|
|
June
30,
|
|
|
September
30,
|
per shares, ADS, and
per ADS data)
|
|
2013
|
|
|
2014
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
Net
revenues
|
|
|
|
|
|
|
|
|
|
Renren
|
|
$
|
20,682
|
|
$
|
15,105
|
|
$
|
13,556
|
Games
|
|
|
20,423
|
|
|
9,904
|
|
|
8,071
|
Total net
revenues
|
|
|
41,105
|
|
|
25,009
|
|
|
21,627
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenues
|
|
|
(17,111)
|
|
|
(15,933)
|
|
|
(16,113)
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
|
23,994
|
|
|
9,076
|
|
|
5,514
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
Selling and
marketing
|
|
|
(15,441)
|
|
|
(11,641)
|
|
|
(11,974)
|
Research and
development
|
|
|
(19,922)
|
|
|
(13,379)
|
|
|
(12,689)
|
General and
administrative
|
|
|
(13,373)
|
|
|
(14,007)
|
|
|
(13,837)
|
Impairment of
intangible assets
|
|
|
—
|
|
|
(445)
|
|
|
(13,739)
|
Impairment of
goodwill
|
|
|
—
|
|
|
—
|
|
|
(46,864)
|
Restructuring
cost
|
|
|
—
|
|
|
—
|
|
|
(2,110)
|
|
|
|
|
|
|
|
|
|
|
Total
operating expenses
|
|
|
(48,736)
|
|
|
(39,472)
|
|
|
(101,213)
|
|
|
|
|
|
|
|
|
|
|
Loss from
operations
|
|
|
(24,742)
|
|
|
(30,396)
|
|
|
(95,699)
|
|
|
|
|
|
|
|
|
|
|
Other
income
|
|
|
172
|
|
|
272
|
|
|
1,214
|
Exchange gain
(loss) on offshore bank accounts
|
|
|
88
|
|
|
301
|
|
|
930
|
Interest
income
|
|
|
3,111
|
|
|
2,897
|
|
|
3,261
|
Realized gain
on short-term investments
|
|
|
31,756
|
|
|
85,994
|
|
|
4,602
|
|
|
|
|
|
|
|
|
|
|
Income
(loss) before provision of income tax, earnings (loss) in
equity method investments and noncontrolling
interest, net of
income taxes
|
|
|
10,385
|
|
|
59,068
|
|
|
(85,692)
|
Income tax
(expenses) benefit
|
|
|
12
|
|
|
(591)
|
|
|
230
|
|
|
|
|
|
|
|
|
|
|
Income
(loss) before earnings (loss) in equity method
investments and noncontrolling interest, net of
income taxes
|
|
|
10,397
|
|
|
58,477
|
|
|
(85,462)
|
(Loss) earnings
in equity method investments, net of income taxes
|
|
|
(24,251)
|
|
|
(27,170)
|
|
|
47,217
|
Income
(loss) from continuing operations
|
|
|
(13,854)
|
|
|
31,307
|
|
|
(38,245)
|
|
|
|
|
|
|
|
|
|
|
Discontinued
operation
|
|
|
|
|
|
|
|
|
|
Loss from
operations of discontinued operations, net of income
taxes
|
|
|
(10,797)
|
|
|
—
|
|
|
—
|
Gain (loss)
from discontinued operations, net of income
taxes
|
|
|
(10,797)
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
|
(24,651)
|
|
|
31,307
|
|
|
(38,245)
|
Net loss
attributable to noncontrolling interests
|
|
|
17
|
|
|
-
|
|
|
122
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss) attributable to Renren Inc.
|
|
$
|
(24,634)
|
|
$
|
31,307
|
|
$
|
(38,123)
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss) per share from continuing operations attributable to
Renren Inc.shareholders:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
(0.01)
|
|
$
|
0.03
|
|
$
|
(0.04)
|
Diluted
|
|
|
(0.01)
|
|
$
|
0.03
|
|
$
|
(0.04)
|
Net income
(loss) per share from discontinued operations attributable to
Renren Inc.shareholders:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
(0.01)
|
|
$
|
-
|
|
$
|
-
|
Diluted
|
|
|
(0.01)
|
|
$
|
-
|
|
$
|
-
|
Net income
(loss) per share attributable to Renren Inc.
shareholders:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
(0.02)
|
|
$
|
0.03
|
|
$
|
(0.04)
|
Diluted
|
|
|
(0.02)
|
|
$
|
0.03
|
|
$
|
(0.04)
|
Net income
(loss) attributable to Renren Inc. shareholders per
ADS:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
(0.07)
|
|
$
|
0.09
|
|
$
|
(0.11)
|
Diluted
|
|
|
(0.07)
|
|
$
|
0.09
|
|
$
|
(0.11)
|
|
|
|
|
|
|
|
|
|
|
Weighted
average number of shares used in calculating net income
(loss) per ordinary share from continuing
operations attributable to
Renren Inc. shareholders:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
1,107,127,544
|
|
|
1,062,632,013
|
|
|
1,057,907,133
|
Diluted
|
|
|
1,107,127,544
|
|
|
1,072,951,501
|
|
|
1,057,907,133
|
Weighted
average number of shares used in calculating net income
(loss) per ordinary share from discontinued
operations attributable to
Renren Inc. shareholders:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
1,107,127,544
|
|
|
1,062,632,013
|
|
|
1,057,907,133
|
Diluted
|
|
|
1,107,127,544
|
|
|
1,062,632,013
|
|
|
1,057,907,133
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Non-GAAP results of
operations measures to the comparable GAAP financial
measures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net
income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the
Three Months Ended
|
(Amounts in US
dollars, in thousands)
|
|
|
September
30,
|
|
June
30,
|
|
|
September
30,
|
|
2013
|
|
|
2014
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
|
(24,651)
|
|
$
|
31,307
|
|
$
|
(38,245)
|
Add back:
Shared-based compensation expenses
|
|
|
4,533
|
|
|
5,313
|
|
|
6,615
|
Add back:
Amortization of intangible assets
|
|
|
394
|
|
|
308
|
|
|
324
|
Add back:
Impairment of goodwill
|
|
|
—
|
|
|
—
|
|
|
46,864
|
Add back:
Impairment of intangible assets
|
|
|
—
|
|
|
445
|
|
|
13,739
|
Adjusted net
income (loss)
|
|
$
|
(19,724)
|
|
$
|
37,373
|
|
$
|
29,297
|
SOURCE Renren Inc.