BEIJING, Nov. 15, 2016 /PRNewswire/ -- China Digital TV
Holding Co., Ltd. (NYSE: STV) ("China Digital TV" or the
"Company"), the leading provider of cloud-based application
platforms and conditional access ("CA") systems which enable
China's digital cable television
market to offer and secure diversified content services, today
announced its unaudited financial results for the third quarter
ended September 30, 2016.
"We are glad to report another quarter with solid growth of our
cloud business, primarily driven by the rapidly expanding customer
base and enriching content offerings," commented Mr. Jianhua Zhu, China Digital TV's chief executive
officer. "During the third quarter, revenues from our cloud
platform grew substantially year over year, and the total number of
registered users on our cloud platform increased to 4.3 million
from only 1.5 million a year ago. The strong performance boosts our
confidence to further increase our geographic diversification by
expanding the cloud platform into new cities and provinces in the
fourth quarter. On the other end, we continue to work diligently
with our own development team and partners to further enhance our
current cloud content portfolio, especially in the areas of online
education, shopping, as well as virtual reality ("VR") related
shows and programs. Although our traditional business in the cable
TV market still faces challenges, it will continue to stabilize. We
remain committed to transforming into a leading provider and
gateway for cloud-based entertainment content into the home
throughout China. We believe our
cloud business will continue to benefit from tremendous secular
growth as new market opportunities arise from cloud-based home
entertainment into Chinese homes."
Mr. Zhenwen Liang, China Digital
TV's chief financial officer, stated, "We witnessed solid business
performance during the third quarter of 2016. However, we
experienced continuous downward trend in average selling prices
("ASP") for smart cards, which was partially caused by the
deprecation of Renminbi ("RMB"). We remain cautiously optimistic on
the traditional cable TV market as it matures and stabilizes, which
will benefit our overall margin profile as we manage our cost
control carefully. For the cloud business, we are pleased that our
previous hard work paid off with a robust revenue growth during the
third quarter. We are now more confident in the potential of our
cloud business, as we continue to expand the coverage as well as
content of our cloud services to more Chinese homes going
forward."
Third Quarter 2016
Results[1]
In the third quarter of 2016, China Digital TV's smart card
shipments increased by 12.7% to 2.58 million from 2.29 million in
the prior year period, as a result of increased shipments to both
domestic and international markets.
China Digital TV's net revenues increased by 12.0% to
US$11.8 million from US$10.5 million in the prior year period. The
increase in net revenues was driven by other products and other
services, but partially offset by a decrease in smart card
revenues.
Revenues from the Company's top five customers accounted for
32.4% of total revenues, compared to 40.1% in the prior year
period.
Revenue Breakdown
|
|
For the three
months ended
|
|
|
September
30,
|
|
June 30,
|
|
September
30,
|
|
|
2016
|
|
2016
|
|
2015
|
|
|
(in thousands of
U.S. dollars)
|
Products:
|
|
|
|
|
|
|
|
|
|
Smart
cards
|
|
$
|
8,091
|
|
$
|
7,183
|
|
$
|
9,035
|
Other
products
|
|
|
2,420
|
|
|
1,608
|
|
|
318
|
Subtotal
|
|
|
10,511
|
|
|
8,791
|
|
|
9,353
|
Services:
|
|
|
|
|
|
|
|
|
|
Head-end system
integration
|
|
|
278
|
|
|
360
|
|
|
460
|
Head-end system
development
|
|
|
248
|
|
|
510
|
|
|
169
|
Licensing
income
|
|
|
117
|
|
|
92
|
|
|
282
|
Royalty
income
|
|
|
76
|
|
|
3
|
|
|
216
|
Other
services
|
|
|
851
|
|
|
725
|
|
|
195
|
Subtotal
|
|
|
1,570
|
|
|
1,690
|
|
|
1,322
|
Total
revenues
|
|
$
|
12,081
|
|
$
|
10,481
|
|
$
|
10,675
|
Revenues from smart cards decreased by 10.4% to
US$8.1 million in the third quarter
of 2016 from US$9.0 million in the
prior year period, primarily due to a decline in ASPs. Smart cards
accounted for 67.0% of total revenues in the third quarter of 2016,
compared to 84.6% in the prior year period.
Revenues from other products increased to US$2.4 million in the third quarter of 2016 from
US$0.3 million in the prior year
period. The increase was mainly attributable to an increase in
sales of set-top-boxes with pre-installed smart cards, IPQAM, as
well as an increase in surface mounted chips. Other products
accounted for 20.0% of total revenues in the third quarter of 2016,
compared to 3.0% in the prior year period.
Revenues from services increased by 18.8% to
US$1.6 million in the third quarter
of 2016 from US$1.3 million in the
prior year period. The increase was primarily attributable to an
increase in revenues from the Company's cloud platform, but
partially offset by a decrease in other revenues which are
smart-card related. Revenues from services accounted for 13.0% of
total revenues in the third quarter of 2016, compared to 12.4% in
the prior year period.
Cost of revenues from smart cards and other products
increased by 22.7% to US$2.6 million
in the third quarter of 2016 from US$2.1
million in the prior year period. The increase was mainly
due to an increase in cost of revenues from other products, and was
partially offset by a decline in cost of revenues from smart cards.
Cost of revenues from smart cards and other products accounted for
37.1% and 33.2%, respectively, of total cost of revenues in the
third quarter of 2016, compared to 58.7% and 6.9% in the prior year
period.
Cost of revenues from services decreased by 1.5% to
US$1.1 million in the third quarter
of 2016 from the prior year period. Cost of revenues from services
accounted for 29.7% of total cost of revenues in the third quarter
of 2016, compared to 34.5% in the prior year period.
Gross profit in the third quarter of 2016 increased by
11.0% to US$8.2 million from
US$7.4 million in the prior year
period. Gross margin, which is equal to gross profit
divided by net revenues, was 69.2% in the third quarter of 2016,
compared to 69.8% in the prior year period. The decline in gross
margin was primarily due to the decreased portion of total revenues
accounted for by revenues from smart cards, which have a higher
gross margin than other products and services.
In the third quarter of 2016, the ASP of smart cards decreased
by 20.5% year over year, which was partly due to the depreciation
of RMB. The unit cost of smart cards decreased by 35.9% year over
year.
Operating expenses in the third quarter of 2016 increased
by 5.5% to US$8.9 million from
US$8.4 million in the prior year
period.
- Research and development expenses in the third quarter
of 2016 decreased by 14.4% to US$3.3
million from US$3.9 million in
the prior year period. The decline was mainly due to a decrease in
personnel related expenses resulting from lower headcount, and
project development expenses.
- Selling and marketing expenses in the third quarter of
2016 decreased by 6.6% to US$2.4
million from US$2.6 million in
the prior year period. The decline was mainly due to a decrease in
marketing activities relating to the Company's CA business.
- General and administrative expenses in the third
quarter of 2016 increased by 63.0% to US$3.1
million from US$1.9 million in
the prior year period. The increase was mainly due to an increase
in professional service expenses.
Loss from operations in the third quarter of
2016 was US$0.7 million, as compared
to loss from operations of US$1.0
million in the prior year period.
Income tax expenses in the third quarter of
2016 decreased by 35.7% to US$0.4
million from US$0.7 million in
the prior year period. The decline was mainly due to a decrease in
taxable income.
Net loss attributable to holders of
ordinary shares in the third quarter of 2016 was US$0.5 million. It remained relatively stable as
compared to the prior year period.
Non-GAAP net
loss[2]
attributable to holders of ordinary shares in the third
quarter of 2016 was US$0.4 million.
It remained relatively stable as compared to the prior year
period[3].
Balance Sheet
As of September 30, 2016, China
Digital TV had cash and cash equivalents, restricted cash, and term
deposits totaling US$62.7
million.
Business Outlook
Based on information available as of November 15, 2016, China Digital TV expects smart
card shipment volumes in the fourth quarter of 2016 to be in the
range of 3.2 million to 3.5 million. Net revenues in the fourth
quarter of 2016 are expected to be in the range of US$11.0 million to US$12.6 million.
Conference Call Information
China Digital TV's management will host an earnings conference
call at 7:00 p.m. on Tuesday, November 15, 2016, U.S. Eastern Time
(8:00 a.m. on Wednesday, November 16, 2016, Beijing/Hong Kong Time).
Conference Call Dial-in Information:
United States Toll
Free:
|
+1-888-346-8982
|
International:
|
+1-412-902-4272
|
Hong Kong:
|
800-905945
|
China Toll
Free:
|
4001-201203
|
Conference
Name:
|
China Digital TV
Holding Co. Ltd. call.
|
A replay of the call will be available for one week between
10:00 p.m. on November 15, 2016 and November 22, 2016, U.S. Eastern Time.
Replay Dial-in Information:
United
States:
|
+1-877-344-7529
|
International:
|
+1-412-317-0088
|
Replay Access
Code:
|
10095298
|
Additionally, a live and archived webcast of this call will be
available on the Investor Relations section of China Digital TV's
corporate website at http://ir.chinadtv.cn.
About China Digital TV
Founded in 2004, China Digital TV enables television network
operators to manage, extend and diversify content services across
households and public areas in China. China Digital TV is the leading
provider of cloud-based application platforms and network
broadcasting platform ("NBP") services to Chinese cable operators,
helping them to effectively bring mobile gaming apps and other
entertainment options to household television sets, and extend
cable programming outside the home to any mobile device. China
Digital TV is also the leading provider of Conditional Access
("CA") systems in China's digital
television market. CA systems enable television network operators
to secure the delivery of content to their subscribers. The Company
has existing cooperation with nearly all of China's cable television operators.
For more information please visit the Investor Relations section
of China Digital TV's website at http://ir.chinadtv.cn.
Safe Harbor Statement
This announcement contains forward-looking statements within the
meaning of Section 27A of the United States Securities Act of 1933,
as amended, and Section 21E of the United States Securities
Exchange Act of 1934, as amended. Such forward-looking
statements are made under the "safe harbor" provisions of the
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," "may," "should" and
similar expressions. Such forward-looking statements include,
without limitation, statements regarding the outlook and comments
by management in this announcement about trends in the CA systems,
digital television, cable television and related industries in the
PRC and China Digital TV's strategic and operational plans and
future market positions. China Digital TV may also make
forward-looking statements in its periodic reports filed with the
Securities and Exchange Commission, 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 China Digital TV'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 projections contained or
implied in any forward-looking statement, including but not limited
to the following: competition in the CA systems, digital
television, cable television and related industries in the PRC and
the impact of such competition on prices, our ability to implement
our business strategies, changes in technology, the progress of the
television digitalization in the PRC, the structure of the cable
television industry or television viewer preferences, changes in
PRC laws, regulations or policies with respect to the CA systems,
digital television, cable television and related industries,
including the extent of non-PRC companies' participation in such
industries, and changes in political, economic, legal and social
conditions in the PRC, including the government's policies with
respect to economic growth, foreign exchange and foreign
investment.
Further information regarding these and other risks and
uncertainties is included in our annual report on Form 20-F and
other documents filed with the Securities and Exchange Commission.
China Digital TV does not assume any obligation to update any
forward-looking statements, which apply only as of the date of this
press release.
For investor and media inquiries, please contact:
China Digital TV Holding Co., Ltd.
Nan Hao
Investor Relations Manager
Tel: +86-10-6297-1199 x 9780
Email: ir@chinadtv.cn
ICR, Inc.
Violet Gu
Tel: +1 (646) 328-1950
Email: stv@icrinc.com
[1]Unless otherwise stated, all financial statement measures
stated in this press release are based on generally accepted
accounting principles in the United
States ("U.S. GAAP").
[2] Non-GAAP net loss is defined as net loss excluding certain
non-cash expenses, such as share-based compensation expenses,
amortization of acquired intangible assets from business
acquisitions and equity method investments.
[3] For more information on these non-GAAP financial measures,
please see the tables captioned "Reconciliations of non-GAAP
measures" set forth at the end of this release.
China Digital TV
Holding Co., Ltd.
|
Unaudited
Condensed Consolidated Statements of Comprehensive Income
(Loss)
|
(in thousands of
U.S. dollars, except share and per share data)
|
|
|
For the three months ended
|
|
|
September
30,
|
|
June 30,
|
|
September
30,
|
|
|
2016
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Products
|
|
$
|
10,511
|
|
$
|
8,791
|
|
$
|
9,353
|
Services
|
|
|
1,570
|
|
|
1,690
|
|
|
1,322
|
Total
revenues
|
|
|
12,081
|
|
|
10,481
|
|
|
10,675
|
Business and
related taxes
|
|
|
(266)
|
|
|
(70)
|
|
|
(128)
|
Net
revenues
|
|
|
11,815
|
|
|
10,411
|
|
|
10,547
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenues:
|
|
|
|
|
|
|
|
|
|
Products
|
|
|
(2,562)
|
|
|
(2,222)
|
|
|
(2,088)
|
Services
|
|
|
(1,081)
|
|
|
(1,250)
|
|
|
(1,098)
|
Total cost of
revenues
|
|
|
(3,643)
|
|
|
(3,472)
|
|
|
(3,186)
|
Gross
profit
|
|
|
8,172
|
|
|
6,939
|
|
|
7,361
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
Research and
development expenses
|
|
|
(3,341)
|
|
|
(4,106)
|
|
|
(3,904)
|
Selling and
marketing expenses
|
|
|
(2,436)
|
|
|
(3,301)
|
|
|
(2,609)
|
General and
administrative expenses
|
|
|
(3,093)
|
|
|
(4,100)
|
|
|
(1,897)
|
Total operating
expenses
|
|
|
(8,870)
|
|
|
(11,507)
|
|
|
(8,410)
|
|
|
|
|
|
|
|
|
|
|
Loss from
operations
|
|
|
(698)
|
|
|
(4,568)
|
|
|
(1,049)
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
|
203
|
|
|
295
|
|
|
287
|
Gain from
disposal of an equity
method
investment
|
|
|
-
|
|
|
95
|
|
|
-
|
Other income,
net
|
|
|
296
|
|
|
524
|
|
|
248
|
Loss before income
tax expenses
|
|
|
(199)
|
|
|
(3,654)
|
|
|
(514)
|
Income tax
(expenses)/benefits
|
|
|
(435)
|
|
|
1,865
|
|
|
(677)
|
Net loss before
share of income on equity
method
investments
|
|
|
(634)
|
|
|
(1,789)
|
|
|
(1,191)
|
Share of income on
equity method
investments, net of income taxes
|
|
|
151
|
|
|
30
|
|
|
337
|
Net
loss
|
|
|
(483)
|
|
|
(1,759)
|
|
|
(854)
|
Net loss
attributable to noncontrolling interest
|
|
|
25
|
|
|
140
|
|
|
378
|
Net loss
attributable to holders of ordinary
shares
|
|
$
|
(458)
|
|
$
|
(1,619)
|
|
$
|
(476)
|
|
|
|
|
|
|
|
|
|
|
Net loss per share
attributable to holders of
ordinary
shares
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.01)
|
|
$
|
(0.03)
|
|
$
|
(0.01)
|
Diluted
|
|
$
|
(0.01)
|
|
$
|
(0.03)
|
|
$
|
(0.01)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
$
|
(483)
|
|
$
|
(1,759)
|
|
$
|
(854)
|
Other comprehensive
loss, net of income taxes
Foreign currency translation adjustment
|
|
|
(453)
|
|
|
(3,085)
|
|
|
(2,212)
|
Comprehensive
loss
|
|
|
(936)
|
|
|
(4,844)
|
|
|
(3,066)
|
Comprehensive loss
attributable to
noncontrolling interest
|
|
|
50
|
|
|
230
|
|
|
395
|
|
|
|
|
|
|
|
|
|
|
Comprehensive loss
attributable to
holders of ordinary shares
|
|
$
|
(886)
|
|
$
|
(4,614)
|
|
$
|
(2,671)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares used in calculating
net income per ordinary share
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
60,194,546
|
|
|
60,190,497
|
|
|
60,137,813
|
Diluted
|
|
|
60,194,546
|
|
|
60,190,497
|
|
|
60,137,813
|
China Digital TV
Holding Co., Ltd.
|
Unaudited
Condensed Consolidated Balance Sheets
|
(in thousands of
U.S. dollars)
|
ASSETS
|
September
30,
|
|
December
31,
|
2016
|
|
2015
|
Current
assets:
|
|
|
|
|
|
Cash and
cash equivalents
|
$
|
60,331
|
|
$
|
70,138
|
Restricted
cash
|
|
23
|
|
|
34
|
Term
deposits
|
|
2,353
|
|
|
-
|
Notes
receivable
|
|
2,901
|
|
|
4,851
|
Accounts
receivable, net
|
|
35,082
|
|
|
38,211
|
Inventories
|
|
4,472
|
|
|
4,857
|
Prepaid
expenses and other current assets
|
|
3,856
|
|
|
3,782
|
Total current
assets
|
|
109,018
|
|
|
121,873
|
Property
and equipment, net
|
|
783
|
|
|
680
|
Intangible
assets, net
|
|
286
|
|
|
348
|
Goodwill
|
|
1,304
|
|
|
1,343
|
Equity
method investments
|
|
2,743
|
|
|
3,055
|
Deferred
income tax assets
|
|
3,204
|
|
|
3,451
|
Other
non-current assets
|
|
648
|
|
|
-
|
Total
assets
|
|
117,986
|
|
|
130,750
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts payable
|
|
2,049
|
|
|
1,665
|
Accrued expenses and other current liabilities
|
|
9,376
|
|
|
11,806
|
Dividend payable
|
|
27
|
|
|
-
|
Deferred revenue - current
|
|
4,664
|
|
|
3,635
|
Income tax payable
|
|
897
|
|
|
2,401
|
Government subsidies - current
|
|
595
|
|
|
819
|
Total current
liabilities
|
|
17,608
|
|
|
20,326
|
Deferred revenue - non-current
|
|
-
|
|
|
173
|
Government subsidies - non-current
|
|
2,497
|
|
|
3,024
|
Deferred income taxes liabilities
|
|
1,426
|
|
|
5,421
|
Total
liabilities
|
|
21,531
|
|
|
28,944
|
|
|
|
|
|
|
|
|
|
|
|
|
EQUITY
|
|
|
|
|
|
China Digital TV
Holding Co., Ltd. shareholders'
equity:
|
|
|
|
|
|
Ordinary
shares
|
|
30
|
|
|
30
|
Additional
paid-in capital
|
|
41,497
|
|
|
37,988
|
Statutory
reserve
|
|
18,361
|
|
|
18,361
|
Retained
earnings
|
|
10,495
|
|
|
23,451
|
Accumulated
other comprehensive income
|
|
18,781
|
|
|
21,650
|
Total China
Digital TV Holding Co., Ltd.
shareholders' equity
|
|
89,164
|
|
|
101,480
|
Noncontrolling
interest
|
|
7,291
|
|
|
326
|
Total
equity
|
|
96,455
|
|
|
101,806
|
TOTAL LIABILITIES
AND EQUITY
|
$
|
117,986
|
|
$
|
130,750
|
Reconciliation of Non-GAAP Measures
Non-GAAP net income attributable to holders of ordinary shares
excludes certain non-cash expenses, such as share-based
compensation expenses, amortization of intangible assets acquired
from business acquisitions and equity method investments. The
Company believes that the Non-GAAP net income provides meaningful
supplemental information regarding the Company's performance by
excluding certain non-cash expenses that may not be indicative of
its operating performance from a cash flow perspective. The Company
believes that both management and investors benefit from referring
to this additional information in assessing the Company's
performance and when planning and forecasting future periods.
However, the use of non-GAAP financial measures has material
limitations as an analytical tool. One of the limitations of using
non-GAAP financial measures is that they do not include all items
that impact the Company's net income for the period. In addition,
because non-GAAP financial measures are not measured in the same
manner by all companies, they may not be comparable to other
similar titled measures used by other companies. In light of the
foregoing limitations, you should not consider non-GAAP financial
measure in isolation from or as an alternative to the financial
measure prepared in accordance with U.S. GAAP.
|
|
For the three
months ended
|
|
|
September
30,
|
|
June 30,
|
|
September
30,
|
2016
|
2016
|
2015
|
|
|
(in U.S. dollars,
in thousands)
|
Net loss
attributable to China Digital TV Holding
Co.,
Ltd shareholders - GAAP
|
|
$
|
(458)
|
|
$
|
(1,619)
|
|
$
|
(476)
|
Share-based
compensation expenses
|
|
|
3
|
|
|
3,988
|
|
|
26
|
Amortization of
intangible assets from business
acquisitions and equity method investments
|
|
|
12
|
|
|
12
|
|
|
12
|
Net (loss)/income
attributable to China Digital TV
Holding Co., Ltd shareholders - Non-GAAP
|
|
$
|
(443)
|
|
$
|
2,381
|
|
$
|
(438)
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/china-digital-tv-announces-unaudited-third-quarter-2016-results-300363074.html
SOURCE China Digital TV Holding Co., Ltd.