UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 6-K

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 UNDER

THE SECURITIES EXCHANGE ACT OF 1934

 

For the month of November 2014

 


 

Commission File Number: 001-35147

 


 

RENREN INC.

 

1/F, North Wing

18 Jiuxianqiao Middle Road

Chaoyang District, Beijing, 100016

People’s Republic of China

+86 (10) 8448-1818

(Address of principal executive offices)

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

 

Form 20-F    x        Form 40-F    o

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):  o

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):  o

 

 

 



 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

Renren Inc.

 

 

 

 

 

/s/ Hui Huang

 

Name:

Hui Huang

 

Title:

Chief Financial Officer

 

 

Date: November 24, 2014

 

2



 

Exhibit Index

 

Exhibit 99.1—Press release

 

3




Exhibit 99.1

 

 Renren Announces Unaudited Third Quarter 2014 Financial Results

 

BEIJING, China, November 20, 2014 — 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.

 

“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.

 


(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.

 



 

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,

 

December 31,

 

September 30,

 

per shares, ADS, and per ADS data)

 

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

 

 

 

 

 

 

 

TOAL 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

 

 

 

September 30,

 

June 30,

 

September 30,

 

(Amounts in US dollars, in thousands) 

 

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

 

 


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