BEIJING, Dec. 15, 2017 /PRNewswire/ -- Renren Inc. (NYSE:
RENN) ("Renren" or the "Company"), which operates a social
networking service and internet finance business in China, today announced its unaudited financial
results for the third quarter ended September 30, 2017.
Third Quarter 2017 Highlights
- Total net revenues were US$61.8
million, a 245.3% increase from the corresponding period in
2016.
-
- Advertising and Internet Value-Added Services (IVAS) net
revenues were US$12.9 million, a
34.6% increase from the corresponding period in 2016.
- Financing income was US$6.6
million, a 20.2% decrease from the corresponding period in
2016.
- Used car sales revenue was US$42.3 million.
- Gross profit was US$6.1
million, compared to US$3.5
million in the corresponding period of 2016.
- Operating loss was US$27.4
million, compared to an operating loss of US$18.6 million in the corresponding period in
2016.
- Net loss attributable to the Company was US$22.8 million, compared to a net loss of
US$22.8 million in the corresponding
period in 2016.
- Adjusted net loss (1) (non-GAAP) was US$10.5 million, compared to an adjusted net loss
of US$17.3 million in the
corresponding period in 2016.
(1) Adjusted net loss
is a non-GAAP measure, which is defined as net (loss) income
excluding share-based compensation expenses and amortization of
intangible assets. See "About Non-GAAP Financial Measures"
below.
|
Third Quarter 2017 Results
Total net revenues for the third quarter of 2017 were
US$61.8 million, representing a
245.3% increase from the corresponding period in 2016.
Advertising and IVAS net revenues were US$12.9 million, representing a 34.6% increase
from the corresponding period of 2016. Advertising revenues
were US$0.1 million for the third
quarter of 2017. IVAS revenues were US$12.8 million, representing a 34.5% increase
from the corresponding period in 2016. The increase was mainly due
to the revenue from our Renren mobile live streaming service.
Monthly unique log-in users of the Renren SNS platform decreased
from approximately 35 million in September 2016 to
approximately 34 million in September
2017.
Financing income was US$6.6
million for the third quarter of 2017, compared to
US$8.3 million in the corresponding
period of 2016. The decrease was in line with the decrease of
financing receivable from US$268.3
million as of September 30,
2016 to US$172.3 million as of
September 30, 2017.
Used car sales revenue of US$42.3
million was generated through one of our subsidiaries
conducting a used car retail business, which is a new business that
we initiated in the second quarter of 2017. As of September 30, 2017, we had a presence in 10
cities in China conducting a used
car retail business.
Cost of revenues was US$55.6
million, compared to US$14.4
million in the corresponding period of 2016. The increase
was primarily due to the increase in the cost of used car
sales.
Operating expenses were US$33.5
million, a 51.3% increase from the corresponding period of
2016.
Selling and marketing expenses were US$8.4 million, a 40.5% increase from the
corresponding period of 2016. The increase was primarily due to an
increase in advertising and promotion expenses.
Research and development expenses were US$6.3 million, a 14.8% increase from the
corresponding period in 2016. The increase was primarily due to
personnel related expense increases.
General and administrative expenses were US$18.8 million, a 76.0% increase from the
corresponding period in 2016. The increase was primarily due to the
increase in share-based compensation expenses and the related
professional fees for a proposed transaction.
Share-based compensation expenses, which were all
included in operating expenses, were US$12.2
million, compared to US$5.5
million in the corresponding period in 2016. The increase
was mainly due to a modification which repriced the exercise price
with respect to options.
Operating loss was US$27.4
million, compared to an operating loss of US$18.6 million in the corresponding period in
2016.
Non-operating loss was US$0.1
million, compared to a loss of US$2.3
million in the corresponding period in 2016. Non-operating
loss for the third quarter of 2017 was mainly comprised of a
US$35.0 million impairment on
long-term investments and a US$32.7
million gain on disposal of the shares of Mapbar Technology
Limited ("Mapbar"). The Company acquired a 35% equity interest in
Mapbar for total cash consideration of $26.6
million in 2011 and subsequently fully impaired the
investment in 2013 due to uncertainty in the investee's business
model. In the current period, the Company sold the investment to an
unrelated party and received
US$32.7 million.
Earnings in equity method investments were US$5.7 million, compared to loss of US$1.3 million in the corresponding period in
2016.
Net loss attributable to the Company was US$22.8 million, compared to a net loss of
US$22.8 million in the corresponding
period in 2016.
Adjusted net loss (non-GAAP) was US$10.5 million, compared to an adjusted net loss
of US$17.3 million in the
corresponding period in 2016. Adjusted net loss is defined as loss
excluding share-based compensation expenses and amortization of
intangible assets.
Business Outlook
The Company expects to generate revenues in an amount ranging
from US$95 million to US$100 million in the fourth quarter of 2017,
representing a 367% to 392% year-over-year increase. This forecast
reflects Renren's current and preliminary view, which is subject to
change.
Updates on Proposed Transactions
As described in the Company's most recent annual report on Form
20-F, filed on May 15, 2017, and as
further updated in the Company's most recent quarterly earnings
release, filed on Form 6-K on August 31,
2017, the Company is continuing to pursue its plan to
dispose of a newly formed subsidiary (the "Subsidiary") that would
hold its advertising agency business and most of its investments in
minority stakes in its investee companies. The plan is intended
primarily to address the risk that the Company could be deemed to
be an investment company as defined under the Investment Company
Act of 1940.
The Company is waiting for approval from the New York Department
of Financial Services for the transfer of the Company's shares of
Social Finance, Inc. from Renren Inc. to the Subsidiary. This
approval is required because Social Finance, Inc. holds a mortgage
banker license in New York State,
and approval by the state regulator is required whenever there is a
change in control of ownership. In addition, the plan remains
subject to the approval of the special committee of the Company's
board of directors, which will make the final determination as to
whether the Company will carry out the plan in the proposed form or
in any other form, or carry out a different transaction or no
transaction at all. The terms of the plan also remain subject to
the approval of SoftBank Group Corp.in accordance with the
Company's articles of association. The Company expects to carry out
the proposed transaction as soon as possible after all required
approvals are obtained.
On November 6, 2017, the Company
announced that it will hold its annual general meeting of
shareholders in Hong Kong on
December 22, 2017. The annual general
meeting will serve as an open forum for shareholders and beneficial
owners of the Company's ADSs to discuss the Company's affairs with
management. However, the proposed transaction will not be discussed
at the annual general meeting and the Company will not answer any
questions about it at the annual general meeting. The Company will
provide full and detailed information about the final terms of the
proposed transaction at the time when the transaction is
launched.
Conference Call Information
The Company will not host a conference call. Please contact our
Investor Relations Department if you have any questions.
About Renren Inc.
Renren Inc. (NYSE: RENN) operates a social networking service
(SNS) and an internet finance business in China. Our SNS enables users to connect and
communicate with each other, share photos and access mobile live
streaming. Our internet finance business includes primarily auto
financing. Renren.com and our Renren mobile application had
approximately 254 million activated users as of September 30, 2017. Renren's American
depositary shares, each of which represents fifteen Class A
ordinary shares, trade on the 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 2017 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 and
amortization 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 Department
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 share, ADS, and
per ADS data)
|
|
2016
|
|
|
2017
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
79,370
|
|
$
|
162,948
|
Restricted
Cash
|
|
30,390
|
|
|
77,968
|
Short-term
investments
|
|
410
|
|
|
-
|
Accounts
receivable, net
|
|
4,702
|
|
|
5,736
|
Financing
receivable, net
|
|
301,773
|
|
|
172,263
|
Prepaid
expenses and other current assets
|
|
20,749
|
|
|
32,596
|
Amounts due
from related parties
|
|
13,419
|
|
|
15,932
|
Inventory
|
|
-
|
|
|
75,137
|
Total current
assets
|
|
450,813
|
|
|
542,580
|
|
|
|
|
|
|
Non-current
assets:
|
|
|
|
|
|
Long-term
financing receivable, net
|
|
330
|
|
|
12
|
Property and
equipment, net
|
|
28,666
|
|
|
29,096
|
Goodwill and
intangible assets, net
|
|
-
|
|
|
5,531
|
Long-term
investments
|
|
695,348
|
|
|
592,944
|
Other
non-current assets
|
|
1,687
|
|
|
1,340
|
Total
non-current assets
|
|
726,031
|
|
|
628,923
|
TOTAL
ASSETS
|
$
|
1,176,844
|
|
$
|
1,171,503
|
|
|
|
|
|
|
LIABILITIES
AND EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts
payable
|
$
|
5,561
|
|
$
|
11,589
|
Short-term
debt
|
|
37,202
|
|
|
90,120
|
Accrued
expenses and other current liabilities
|
|
19,781
|
|
|
41,104
|
Payable to
investors
|
|
182,951
|
|
|
184,487
|
Amounts due to
related parties
|
|
10,914
|
|
|
10,868
|
Deferred
revenue and advance from customers
|
|
5,954
|
|
|
9,988
|
Income tax
payable
|
|
7,860
|
|
|
10,693
|
Total
current liabilities
|
|
270,223
|
|
|
358,849
|
|
|
|
|
|
|
Non-current
liabilities:
|
|
|
|
|
|
Long-term
debt
|
|
95,390
|
|
|
80,410
|
Long-term
payable to investors
|
|
59,916
|
|
|
-
|
Other
non-current liabilities
|
|
12,849
|
|
|
16,558
|
Total
non-current liabilities
|
|
168,155
|
|
|
96,968
|
TOTAL
LIABILITIES
|
|
438,378
|
|
|
455,817
|
|
|
|
|
|
|
Shareholders' Equity:
|
|
|
|
|
|
Class A
ordinary shares
|
|
720
|
|
|
725
|
Class B
ordinary shares
|
|
305
|
|
|
305
|
Additional
paid-in capital
|
|
1,266,592
|
|
|
1,289,343
|
Statutory
reserves
|
|
6,712
|
|
|
6,712
|
Accumulated
deficit
|
|
(542,746)
|
|
|
(598,884)
|
Accumulated
other comprehensive income
|
|
6,883
|
|
|
16,444
|
|
|
|
|
|
|
TOTAL
EQUITY
|
|
738,466
|
|
|
714,645
|
|
|
|
|
|
|
Non-controlling
interest
|
|
-
|
|
|
1,041
|
TOAL
LIABILITIES AND EQUITY
|
$
|
1,176,844
|
|
$
|
1,171,503
|
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)
|
|
2016
|
|
|
2017
|
|
|
2017
|
|
|
|
|
|
|
|
|
|
Net
revenues
|
|
|
|
|
|
|
|
|
Advertising and
IVAS
|
$
|
9,578
|
|
$
|
12,731
|
|
$
|
12,888
|
Financing
income
|
|
8,308
|
|
|
8,559
|
|
|
6,630
|
Used car
sales
|
|
-
|
|
|
1,042
|
|
|
42,245
|
Total net
revenues
|
|
17,886
|
|
|
22,332
|
|
|
61,763
|
Cost of
revenues
|
|
(14,352)
|
|
|
(17,376)
|
|
|
(55,645)
|
Gross
profit
|
|
3,534
|
|
|
4,956
|
|
|
6,118
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Selling and
marketing
|
|
(5,971)
|
|
|
(6,017)
|
|
|
(8,390)
|
Research and
development
|
|
(5,478)
|
|
|
(4,611)
|
|
|
(6,290)
|
General and
administrative
|
|
(10,693)
|
|
|
(9,784)
|
|
|
(18,820)
|
Total
operating expenses
|
|
(22,142)
|
|
|
(20,412)
|
|
|
(33,500)
|
Loss from
operations
|
|
(18,608)
|
|
|
(15,456)
|
|
|
(27,382)
|
Other
income
|
|
404
|
|
|
477
|
|
|
4,157
|
Interest
income
|
|
101
|
|
|
371
|
|
|
720
|
Interest
expenses
|
|
(2,686)
|
|
|
(2,379)
|
|
|
(2,741)
|
Realized (loss)
gain on short-term investments
|
|
(71)
|
|
|
(201)
|
|
|
1
|
Realized gain on disposal
of long-term investments
|
|
-
|
|
|
-
|
|
|
32,726
|
Impairment of
long term investments
|
|
-
|
|
|
(61,021)
|
|
|
(35,000)
|
Total
non-operating loss
|
|
(2,252)
|
|
|
(62,753)
|
|
|
(137)
|
Loss before
provision of income tax
and loss in equity method investments, net of
tax
|
|
(20,860)
|
|
|
(78,209)
|
|
|
(27,519)
|
Income tax
expenses
|
|
(626)
|
|
|
(688)
|
|
|
(1,075)
|
Loss before
income (loss) earnings in
equity method investments, net of tax
|
|
(21,486)
|
|
|
(78,897)
|
|
|
(28,594)
|
(Loss)
earnings in equity method investments,
net of tax
|
|
(1,324)
|
|
|
61,702
|
|
|
5,654
|
Loss from
continuing operations
|
|
(22,810)
|
|
|
(17,195)
|
|
|
(22,940)
|
Net loss
attributable to noncontrolling interests
|
|
-
|
|
|
-
|
|
|
175
|
Net loss
attributable to Renren Inc.
|
$
|
(22,810)
|
|
$
|
(17,195)
|
|
$
|
(22,765)
|
Net loss per
share attributable to Renren Inc.
shareholders:
|
|
|
|
|
|
|
|
|
Basic
|
$
|
(0.02)
|
|
$
|
(0.02)
|
|
$
|
(0.02)
|
Diluted
|
$
|
(0.02)
|
|
$
|
(0.02)
|
|
$
|
(0.02)
|
Net loss
attributable to Renren Inc. shareholders
per ADS*:
|
|
|
|
|
|
|
|
|
Basic
|
$
|
(0.33)
|
|
$
|
(0.25)
|
|
$
|
(0.33)
|
Diluted
|
$
|
(0.33)
|
|
$
|
(0.25)
|
|
$
|
(0.33)
|
|
|
|
|
|
|
|
|
|
Weighted
average number of shares used in
calculating net loss per ordinary share operations
attributable to Renren Inc.
shareholders:
|
|
|
|
|
|
|
|
|
Basic
|
|
1,023,339,278
|
|
|
1,027,812,327
|
|
|
1,029,120,470
|
Diluted
|
|
1,023,339,278
|
|
|
1,027,812,327
|
|
|
1,029,120,470
|
|
* Each ADS
represents 15 Class A ordinary shares.
|
|
|
|
Reconciliation of Non-GAAP results of
operations measures to the comparable GAAP financial
measures
|
|
Adjusted net
loss
|
|
|
|
|
|
|
|
|
|
|
For the
Three Months Ended
|
(Amounts in US
dollars, in thousands)
|
|
September
30,
|
|
|
June
30,
|
|
|
September
30,
|
|
2016
|
|
|
2017
|
|
|
2017
|
|
|
|
|
|
|
|
|
|
Net
loss
|
$
|
(22,810)
|
|
$
|
(17,195)
|
|
$
|
(22,765)
|
Add back:
Shared-based compensation expenses
|
|
5,511
|
|
|
5,169
|
|
|
12,210
|
Add back: Amortization of
intangible assets
|
|
-
|
|
|
-
|
|
|
20
|
Adjusted net
loss
|
$
|
(17,299)
|
|
$
|
(12,026)
|
|
$
|
(10,535)
|
View original
content:http://www.prnewswire.com/news-releases/renren-announces-unaudited-third-quarter-2017-financial-results-and-updates-on-proposed-transaction-300571932.html
SOURCE Renren Inc.