SHANGHAI, May 30, 2012 /PRNewswire-Asia/ -- Taomee
Holdings Limited (NYSE: TAOM) ("Taomee" or the "Company"), one of
the leading children's entertainment and media companies in
China, today reported its
unaudited financial results for the first quarter ended
March 31, 2012.
First Quarter 2012 Financial Highlights
- Total net revenues were US$10.4
million, an increase of 21.9% from US$8.6 million in the fourth quarter 2011 and a
decrease of 15.9% from US$12.4
million in the first quarter 2011.
- Gross margin was 79.6% compared to 81.3% in the fourth quarter
2011 and 84.2% in the first quarter 2011.
- Net income attributable to the holders of ordinary shares was
US$ 1.6 million, compared with
US$1.6 million in the fourth quarter
of 2011 and US$9.0 million in the
first quarter of 2011.
- Basic and diluted earnings per ADS(1) were US$0.04 and US$0.04, respectively, compared with US$0.04 and US$0.04, respectively, in the fourth quarter 2011
and US$0.31 and US$0.29 respectively, in the first quarter
2011.
- Non-GAAP net income attributable to holders of ordinary shares
was US$2.2 million, compared with
US$2.3 million in the fourth quarter
2011 and US $5.6 million in the first
quarter of 2011.
- Non-GAAP basic and diluted earnings per ADS were US$0.06 and US$0.06, respectively, compared with US$0.06 and US$0.06, respectively, in the fourth quarter 2011
and US$0.20 and US$0.18, respectively, in the first quarter
2011.
|
(1) Each American
Depositary Share ("ADS") represents twenty ordinary
shares
|
"We started 2012 with a quarter of solid financial and
operational results," said Mr. Benson
Wang, co-founder and CEO of Taomee. "In the first quarter of
2012, our virtual communities had more than 42 million active
accounts, a new quarterly high for the Company and reflected
year-over-year increases across all of our branded virtual
communities. Our achievements resulted from our tactical investment
in recent quarters to grow our user base and increase user
engagement.
"This quarter, we have also expanded our content offerings
across multiple media platforms, including the release of new
mobile applications and games for the wireless platform, an
increase in number of broadcasted TV animation series and channel
partners, and the launch of an online video portal for children. We
believe we have enhanced the influence of our brands and
franchises, and we are excited about the long term prospects of our
business."
Operational Results for First Quarter 2012
- For the first quarter of 2012, the number of active accounts
for the Company's games under operation in mainland China increased 57% to a record high of
approximately 42.3 million from 27.0 million in the fourth quarter
of 2011 and increased 55% from 27.3 million in the first quarter of
2011.
- Active paying accounts for the Company's virtual worlds under
operation in mainland China
increased to 1.9 million from 1.7 million in the fourth quarter of
2011 and down from 2.7 million in the first quarter of 2011.
- The sequential and year over year increases in active accounts
were due to the results of the strategy to temporarily decelerate
monetization in an effort to attract new users and enhance user
stickiness. The sequential increase of active paying accounts was
due to seasonality as the first quarter has more non-school
days.
Unaudited Financial Results for First Quarter 2012
Total Net Revenues
Total net revenues were US$10.4
million, compared with US$8.6
million in the fourth quarter 2011 and US$12.4 million in the first quarter 2011.
Net online business revenues were US$9.3
million, compared with US$7.5
million in the fourth quarter 2011 and US$11.8 million in the first quarter 2011. The
quarter-over-quarter increase was primarily due to seasonality as
the first quarter has more non-school days. The year-over-year
decrease was as a result of the Company's continued strategy to
temporarily decelerate monetization to attract new users and
increase user stickiness.
Net offline business revenues were US$1.1
million, compared with US$1.1
million in the fourth quarter 2011 and US$0.6 million in the first quarter 2011. The
year-over-year increase was mainly due to a rise in revenue from
merchandise and book licensing.
Total Cost of Services
Total cost of services was US$2.1
million, compared with US$1.6
million in the fourth quarter 2011 and US$2.0 million in the first quarter 2011.
Online business related costs were US$1.7
million, compared with US$1.3
million in the fourth quarter 2011 and US$1.7 million in the first quarter
2011. The sequential increase was primarily due to an increase
in hosting costs related to the wireless products and the
year-over-year increase was mainly due to an increase in both
headcount costs and hosting costs partially offset by the decrease
of bandwidth and prepaid card production costs.
Offline business related costs were US$0.4 million in the first quarter 2012,
compared with US$0.3 million in the
fourth quarter 2011 and US$0.3
million in the first quarter 2011. The sequential and
year-over-year increases were mainly due to an increase in
headcount and share-based compensation.
Gross Profit and Gross Margin
Gross profit was US$8.3 million,
compared with US$7.0 million in the
fourth quarter 2011 and US$10.4
million in the first quarter 2011.
Gross margin was 79.6%, compared with 81.3% in the fourth
quarter 2011 and 84.2% in the first quarter 2011.
Gross margin for the online business was 81.4%, compared with
82.1% in the fourth quarter of 2011and 85.8% in the first quarter
of 2011.
Gross margin for the offline business was 63.9%, compared with
75.3% in the fourth quarter of 2011 and 53.8% in the first quarter
2011.
Total Operating Expenses
Total Operating expenses were US$7.5
million, compared with US$6.4
million in the fourth quarter 2011 and US$4.6 million in the first quarter 2011.
- Product development expenses were US$3.3
million, compared with US$3.1
million in the fourth quarter 2011 and US$2.1 million in the first quarter 2011. The
sequential and year-over-year increases were primarily due to an
increase in headcount, share-based compensation and incremental
costs related to new social welfare regulations.
- Sales and marketing expenses were US$2.2
million, compared with US$1.6
million in the fourth quarter 2011 and US$1.0 million in the first quarter 2011. The
sequential increase was mainly due to an increase in advertising
expense and year-over-year increase was largely due to an increase
in both advertising expenses and animation related expenses.
- General and administrative expenses were US$2.7 million, compared with US$2.1 million in the fourth quarter 2011 and
US$1.6 million in the first quarter
2011. The sequential increase was largely related to an increase in
professional service fees and the year-over-year increase was
mainly due to an increase in headcount expenses and share-based
compensation.
Share of Profit in Equity Investment
Share of profit in equity investment was US$0.2 million, compared with a loss of
US$0.3 million in the fourth quarter
2011 and US$4.0 million in the first
quarter 2011. The year-over-year decrease was mainly due to a
US$3.7 million gain realized from the
sale of 10.5% equity method interest in Elyn Corporation in
February 2011.
Profit from Operations
Profit from operations was US$0.8
million, compared with US$0.6
million in the fourth quarter 2011 and US$5.8 million in the first quarter 2011.
Net Income
Net income attributable to holders of ordinary shares was
US$1.6 million, compared with
US$1.6 million in the fourth quarter
2011 and US$9.0 million in the first
quarter 2011.
Non-GAAP net income attributable to shareholders was
US$2.2 million, compared with
US$2.3 million in the fourth quarter
2011 and US$5.6 million in the first
quarter 2011.
Basic and diluted earnings per ADS were US$0.04 and US$0.04, respectively, compared with US$0.04 and US$0.04, respectively, in the fourth quarter
2011, and US$0.31 and US$0.29, respectively in the first quarter
2011.
Non-GAAP basic and diluted earnings per ADS were US$0.06 and US$0.06, respectively, compared with US$0.06 and US$0.06, respectively, in the fourth quarter
2011, and US$0.20 and US$0.18, respectively, in the first quarter
2011.
Cash and Cash Equivalents
As of March 31, 2012, the Company
had US$121.1million of cash and cash
equivalents, compared with US$120.7
million as of December 31,
2011.
Business Highlights
On January 6, 2012,
Taomee launched its online video website of v.61.com in cooperation
with iQiyi.com and Youku.com.
In March 2012,
Taomee started broadcasting Season 2 of Mole's World animation
series on over 100 channels throughout China.
In the first quarter 2012, Taomee released three
games and applications for Apple iOS, Mole Kart, Mole Baby and
Taomee Mum. As of the end of the first quarter 2012, the
accumulated downloads for Taomee wireless applications and games
reached over 4 million times.
In April 2012,
Taomee further released six e-books for Apple iOS featuring the
Mole's World franchise; all six books reached the top
download list in the first week of release.
In May 2012, Taomee
co-launched mobile phones and tablets designed for children
featuring Mole's World and Seer franchises, further expanding
electronic product offerings.
Outlook for Second Quarter 2012
For the second quarter of 2012, Taomee estimates that total net
revenues may decline by approximately 10% quarter over quarter due
to seasonality.
Non-GAAP Financial Measures
To supplement the financial measures prepared in accordance with
generally accepted accounting principles in the United States, or GAAP, this press release
presents non-GAAP net income attributable to the Company's
shareholders and non-GAAP earnings per ADS by excluding share-based
compensation charge from net income attributable to the Company's
shareholders and from the calculation of earnings per ADS. For the
three months ended March 31, 2011,
the Company also excluded its one time gain from selling its equity
investment in Elyn Corporation from net income attributable to the
Company's shareholders and earnings per ADS, respectively. The
Company believes these non-GAAP financial measures are important to
help investors understand the Company's operating and financial
performance, compare business trends among different reporting
periods on a consistent basis and assess the Company's core
operating results,. The use of the above non-GAAP financial
measures has certain limitations. Share-based compensation
charge has been and will continue to be incurred and is not
reflected in the presentation of the non-GAAP financial measures;
it should be considered in the overall evaluation of our
results. None of the non-GAAP measures is a measure of net
income attributable to the Company's shareholders, operating
profit, operating performance or liquidity presented in accordance
with GAAP. We compensate for these limitations by providing
the relevant disclosure of our share-based compensation charge in
our reconciliations to the most directly comparable GAAP financial
measures, which should be considered when evaluating our
performance. These non-GAAP financial measures should be considered
in addition to financial measures prepared in accordance with GAAP,
but should not be considered a substitute for, or superior to,
financial measures prepared in accordance with GAAP.
Reconciliation of each of these non-GAAP financial measures to the
most directly comparable GAAP financial measure are set forth at
the end of this release.
Conference Call
The Company will host a conference call and live webcast
at 8:00 p.m. Eastern Time (New
York) on Wednesday, May 30, 2012 (which
is 8:00 a.m. in China on Thursday, May 31, 2012).
The dial-in details for the live conference call are:
|
U.S. toll-free
number
|
+1-866-519-4004
|
|
Hong Kong toll-free
number
|
800-930-346
|
|
International dial-in
number
|
+65-6723-9381
|
|
China Mainland dial-in
number
|
400-620-8038
|
|
Passcode
|
Taomee
|
A live webcast and archive of the conference call will be
available on the Investor Relations section of Taomee's website
at:
http://ir.taomee.com/phoenix.zhtml?c=243417&p=irol-eventDetails&EventId=4728668
A telephone replay of the call will be available after the
conclusion of the conference call at 11:00
p.m. Eastern Time on May 30,
2012 through June 6, 2012 10:00
a.m. Eastern Time. The dial-in details for the
telephone replay are:
|
Conference ID
number
|
83540378
|
|
International dial-in number
|
+612-8235-5000
|
|
China dial-in number
|
+400-692-0026
|
About Taomee Holdings Limited
Taomee Holdings Limited is one of the leading children's
entertainment and media companies in China driven to deliver exceptional
entertainment to children and families. Founded in 2007,
Taomee is one the first companies in Greater China to develop animated franchises
for children through online virtual world that are both fun and
educational. The Company's virtual worlds are widely trusted by
millions of parents and caregivers across Asia. The Company's Mole's World and Seer
franchises and characters have reached millions of children and
families through virtual worlds, books, monthly print magazines,
mobile applications, animated television series and movies. For
more information, please visit:
http://www.taomee.com/en_taomee.html
- Visit online virtual world communities at www.61.com
- Watch animations and films at http://v.61.com/
- Download mobile games and applications at http://m.61.com/
- Share with other parents and caregivers at
http://mama.61.com/
Safe Harbor Statements
This press release contains statements that may constitute
"forward-looking" statements within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, and as defined in the
U.S. Private Securities Litigation Reform Act of 1995.
Forward-looking statements can be identified by words or phrases
such as "may," "will," "expect," "anticipate," "aim," "estimate,"
"intend," "plan," "believe," "potential," "continue," "is/are
likely to" or other similar expressions. Among other things, the
management's quotations and outlook information contain
forward-looking statements. These forward-looking statements
involve known and unknown risks, uncertainties and other factors
which may cause our actual results, performance or achievements to
be materially different from those expressed or implied by the
forward-looking statements. Potential risks and uncertainties
include, but are not limited to: the Company's business strategies
and initiatives as well as business plans; future business
development, results of operations and financial condition;
expected changes in revenues and certain cost or expense items;
expectations with respect to increased revenue growth and the
Company's ability to sustain profitability; the Company's services
and products under development or planning; the Company's ability
to attract users and further enhance the Company's brand
recognition; and trends and competition in the children's
entertainment and media market and industry, including those for
online entertainment. Further information regarding these and other
risks is included in Taomee's filings with the U.S. Securities and
Exchange Commission, including its registration statement on its
final prospectus dated June 10, 2011.
All information provided in this press release is as of the date of
the press release, and the Company undertakes no obligation to
update any forward-looking statements to reflect subsequent
occurring events or circumstances, or changes in its expectations,
except as required under applicable law. Although the Company
believes that the expectations expressed in these forward looking
statements are reasonable, the Company cannot assure you that their
expectations will turn out to be correct, and investors are
cautioned that actual results may differ materially from the
anticipated results.
For further information, please contact
Taomee Holdings Limited
Na You
Phone: +86-21-61280056-8578
Email: ir@taomee.com
|
Taomee Holdings
Limited - Unaudited Consolidated Balance Sheets
|
|
|
|
|
|
In
USD
|
|
In
USD
|
|
March
31,
|
|
December
31,
|
|
2012
|
|
2011
|
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
121,116,525
|
|
$
120,678,898
|
|
Accounts receivable
|
1,632,875
|
|
1,422,534
|
|
Due
from related parties
|
37,257
|
|
202,267
|
|
Prepayments and other current assets
|
1,383,307
|
|
1,514,565
|
|
Deferred tax assets, current
|
3,250,810
|
|
3,247,404
|
|
Total current
assets
|
127,420,774
|
|
127,065,668
|
|
|
|
|
|
Investments in equity
method investees
|
2,621,361
|
|
2,406,111
|
|
Property and equipment,
net
|
2,024,995
|
|
2,405,576
|
|
Acquired intangible
assets
|
1,380,600
|
|
1,379,154
|
|
Other assets
|
3,349,309
|
|
1,197,907
|
|
TOTAL
ASSETS
|
$
136,797,039
|
|
$
134,454,416
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts payable
|
$
120,860
|
|
$
221,820
|
|
Income tax payable
|
2,345,854
|
|
2,187,076
|
|
Advance from customers
|
10,150,886
|
|
10,223,309
|
|
Due
to related parties
|
116,127
|
|
66,104
|
|
Deferred revenue
|
13,251,808
|
|
12,912,939
|
|
Deferred tax liabilities, current
|
10,922
|
|
10,910
|
|
Accrued expenses and other current liabilities
|
5,433,793
|
|
5,680,706
|
|
Total current
liabilities
|
31,430,250
|
|
31,302,864
|
|
|
|
|
|
Equity
|
|
|
|
|
Ordinary shares ($0.00002 par
value; 875,000,000 shares authorized;
730,900,680 and 728,427,520
shares issued; 728,427,520 and 728,427,520
outstanding as of December 31,
2011 and March 31, 2012, respectively)
|
14,569
|
|
14,618
|
|
Treasury stock
|
-
|
|
(562,502)
|
|
Additional paid-in capital
|
70,786,836
|
|
70,782,370
|
|
Retained earnings
|
32,150,790
|
|
30,550,850
|
|
Accumulated other comprehensive income
|
2,414,594
|
|
2,366,216
|
|
Total equity
|
$
105,366,789
|
|
$
103,151,552
|
|
|
|
|
|
TOTAL LIABILITIESAND
EQUITY
|
136,797,039
|
|
134,454,416
|
|
Taomee Holdings
Limited - Unaudited Consolidated Statements of
Operations
|
|
In USD, except for
share data
|
|
|
For three months
ended
|
|
March
31,
|
|
December
31,
|
|
March
31,
|
|
2012
|
|
2011
|
|
2011
|
|
Revenues:
|
|
|
|
|
|
|
Online business, net
|
$
9,331,748
|
|
$
7,479,824
|
|
$
11,775,969
|
|
Offline business, net
|
1,098,999
|
|
1,077,778
|
|
622,806
|
|
Total net
revenues
|
10,430,747
|
|
8,557,602
|
|
12,398,775
|
|
|
|
|
|
|
|
Cost of
services
|
|
|
|
|
|
|
Online business
|
(1,735,379)
|
|
(1,335,365)
|
|
(1,667,624)
|
|
Offline business
|
(397,208)
|
|
(265,802)
|
|
(287,519)
|
|
Total cost of
services
|
(2,132,587)
|
|
(1,601,167)
|
|
(1,955,143)
|
|
|
|
|
|
|
|
Gross
profit
|
8,298,160
|
|
6,956,435
|
|
10,443,632
|
|
|
|
|
|
|
|
Operating income
(expenses):
|
|
|
|
|
|
|
Product development
|
(3,264,035)
|
|
(3,070,379)
|
|
(2,092,025)
|
|
Sales
and marketing
|
(2,205,483)
|
|
(1,639,118)
|
|
(1,034,939)
|
|
General and administrative
|
(2,732,887)
|
|
(2,141,589)
|
|
(1,648,904)
|
|
Other
operating income
|
664,014
|
|
492,671
|
|
174,196
|
|
Total operating
expenses
|
(7,538,391)
|
|
(6,358,415)
|
|
(4,601,672)
|
|
|
|
|
|
|
|
Profit from
operations
|
759,769
|
|
598,020
|
|
5,841,960
|
|
|
|
|
|
|
|
Interest income,
net
|
624,196
|
|
689,590
|
|
105,392
|
|
Other income
(expenses), net
|
253,076
|
|
733,409
|
|
4,633
|
|
Income before income
taxes and share of profit in equity method
investments
|
1,637,041
|
|
2,021,019
|
|
5,951,985
|
|
|
|
|
|
|
|
Income tax benefit
(expense)
|
(252,351)
|
|
(128,279)
|
|
(799,404)
|
|
|
|
|
|
|
|
Share of profit (loss)
in equity method investments
|
215,250
|
|
(274,039)
|
|
3,976,684
|
|
|
|
|
|
|
|
Net
income
|
1,599,940
|
|
1,618,701
|
|
9,129,265
|
|
|
|
|
|
|
|
Less: Deemed dividends
on Series A convertible redeemable preferred shares
|
-
|
|
-
|
|
(119,516)
|
|
|
|
|
|
|
|
Net income
attributable to holders of ordinary shares
|
$
1,599,940
|
|
$
1,618,701
|
|
$
9,009,749
|
|
Earnings per
ADS
|
|
|
|
|
|
|
-Basic
|
$
0.04
|
|
$0.04
|
|
$
0.31
|
|
-Diluted
|
$
0.04
|
|
$0.04
|
|
$
0.29
|
|
Weighted average
number of shares used in calculation
|
|
|
|
|
|
|
- Basic
|
728,427,520
|
|
728,876,950
|
|
450,000,000
|
|
- Diluted
|
756,386,776
|
|
758,032,650
|
|
482,579,336
|
|
Taomee Holdings
Limited - Unaudited Consolidated Statements of
Operations
|
|
In USD, except for
share data
|
|
|
|
|
|
For three months
ended
|
|
|
March
31,
|
|
December
31,
|
|
March
31,
|
|
|
2012
|
|
2011
|
|
2011
|
|
Reconciliation from
Non-GAAP measures to GAAP measures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net
income attributable to holders of ordinary shares
|
|
$
2,166,858
|
|
$
2,256,873
|
|
$
5,621,208
|
|
Share-based
compensation
|
|
(566,918)
|
|
(638,172)
|
|
(273,557)
|
|
Investment income from
sale of equity interest(2)
|
|
|
|
|
|
3,662,098
|
|
GAAP net income
attributable to holders of ordinary shares
|
|
$
1,599,940
|
|
$
1,618,701
|
|
$
9,009,749
|
|
|
|
|
|
|
|
|
Non-GAAP diluted
earnings per ADS
|
|
|
|
|
|
|
|
-Basic
|
|
$
0.06
|
|
$
0.06
|
|
$
0.20
|
|
-Diluted
|
|
$
0.06
|
|
$
0.06
|
|
$
0.18
|
|
|
|
|
|
|
|
|
(2) Reflects the
transaction in which the company sold 10.5% of the equity interest
in Elyn Corporation in February 2011
|
SOURCE Taomee Holdings Limited