SHANGHAI, Aug. 16, 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 second quarter ended
June 30, 2012.
Second Quarter 2012 Financial
Highlights
- Total net revenues were US$10.5
million, a slight increase of 0.4% from US$10.4 million in the first quarter 2012 and a
decrease of 10.9% from US$11.8
million in the second quarter 2011.
- Gross margin was 77.7% compared to 79.6% in the first quarter
2012 and 85.1% in the second quarter 2011.
- Net income attributable to the holders of ordinary shares was
US$3.2 million, compared with
US$1.6 million in the first quarter
of 2012 and US$4.3 million in the
second quarter of 2011.
- Basic and diluted earnings per ADS[1] were US$0.09 and US$0.08, respectively, compared with US$0.04 and US$0.04, respectively, in the first quarter 2012
and US$0.14 and US$0.13 respectively, in the second quarter
2011.
- Non-GAAP net income attributable to holders of ordinary shares
was US$3.8 million, compared with
US$2.2 million in the first quarter
2012 and US$4.7 million in the second
quarter of 2011.
- Non-GAAP basic and diluted earnings per ADS were US$0.10 and US$0.10, respectively, compared with US$0.06 and US$0.06, respectively, in the first quarter 2012
and US$0.15 and US$0.14, respectively, in the second quarter
2011.
[1] Each
American Depositary Share ("ADS") represents twenty ordinary
shares
|
"For the second quarter of 2012, we delivered revenue results
that exceeded our expectations, and achieved a new high of 43.7
million active users." said Mr. Benson
Wang, co-founder and chief executive officer of Taomee. "Our
strategy to drive user growth by decelerating monetization
activities and by introducing new online products is contributing
to our overall brand influence as well as offline growth. In fact,
offline revenues increased 78.2% year-on-year, due to strong
performance of our merchandise licensing, publishing and film
business."
Mr. Wang continued, "We continue to invest in our brands and
business lines to foster long term sustainable growth. In 2012, we
have committed significant resources towards mobile, online video
services and animation and we are encouraged by the early results.
As of today, total downloads of our mobile application have
exceeded 10 million and we are excited about the upcoming pipeline.
Meanwhile, we believe we successfully expanded our brand influence
though TV animations, which have been broadcasted on over 130
channels throughout Mainland China and Taiwan. Our Seer TV animation has been viewed
over 100 million times on our online video site v.61.com. Looking
ahead, we are extremely excited by the opportunities that lie ahead
as we continue to build Taomee into a leading entertainment company
in China."
Operational Results for Second Quarter 2012
- For the second quarter of 2012, the number of active accounts
for the Company's virtual worlds under operation in mainland
China increased 3.1% to
approximately 43.6 million from 42.3 million in the first quarter
of 2012 and increased 81.6% from 24.0 million in the second quarter
of 2011. Although the Company experienced typical downward
seasonality in older Mole's World and Seer virtual worlds, total
active accounts still increased sequentially due to strong growth
and contribution from other newer online products. The
year-over-year increases were mainly driven by the demonetization
strategy and the launch of new online products such as SeerII.
- Active paying accounts for the Company's virtual worlds under
operation in mainland China
slightly decreased to 1.8 million from 1.9 million in the first
quarter of 2012 and down from 2.2 million in the second quarter of
2011.
- The ARPU for the Company's virtual worlds under operation in
mainland China was RMB 30 (US$4.8)
compared with RMB 31 (US$4.9) in the first quarter of 2012 compared to
RMB 33 (US$5.1) for the second quarter 2011.
- The number of downloads for the mobile applications operated by
the Company was approximately 4.0 million in the second quarter of
2012 compared to approximately 3.0 million in the first quarter of
2012.
Unaudited Financial Results for Second Quarter 2012
Total Net Revenues
Total net revenues were US$10.5
million, compared with US$10.4
million in the first quarter 2012 and US$11.8 million in the second quarter
2011.
Net online business revenues were US$8.6
million, compared with US$9.3
million in the first quarter 2012 and US$10.7 million in the second quarter 2011. The
quarter-over-quarter decrease was primarily due to seasonality as
the second quarter has less non-school days compared to the first
quarter. 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$1.9
million, compared with US$1.1
million in the first quarter 2012 and US$1.1 million in the second quarter 2011. The
sequential and year-over-year increase was mainly due to film
revenues and expansion in interactive toys. The increases were also
due to the sequential and year over year rise in revenue from
merchandise and book licensing.
Total Cost of Services
Total cost of services was US$2.3
million, compared with US$2.1
million in the first quarter 2012 and US$1.8 million in the second quarter
2011.
Online business related costs were US$1.7
million, compared with US$1.7
million in the first quarter 2012 and US$1.5 million in the second quarter 2011.
The slight sequential decrease was primarily due to the decrease of
payroll expenses and hosting costs partially offset by the increase
in bandwidth cost, the year-over-year increase was mainly due to an
increase in both headcount costs and hosting costs partially offset
by the decrease of rental expenses and prepaid card production
costs.
Offline business related costs were US$0.6 million, compared with US$0.4 million in the first quarter 2012 and
US$0.2 million in the second quarter
2011. The sequential and year-over-year cost increases were mainly
due to expansion in interactive toys business.
Gross Profit and Gross Margin
Gross profit was US$8.1 million,
compared with US$8.3 million in the
first quarter 2012 and US$10.0
million in the second quarter 2011.
Gross margin was 77.7%, compared with 79.6% in the first quarter
2012 and 85.1% in the second quarter 2011.
Gross margin for the online business was 80.2%, compared with
81.4% in the first quarter 2012 and 85.9% in the second quarter of
2011.
Gross margin for the offline business was 66.4%, compared with
63.9% in the first quarter 2012 and 76.7% in the second quarter
2011.
Total Operating Expenses
Total operating expenses were US$7.5
million, compared with US$7.5
million in the first quarter 2012 and US$5.6 million in the second quarter
2011.
- Product development expenses were US$3.0
million, compared with US$3.3
million in the first quarter 2012 and US$2.2 million in the second quarter 2011. The
sequential decrease was mainly due to a decrease in payroll
expenses and the year-over-year increases were primarily due to an
increase in headcount in the mobile products, platform services and
online video departments, share-based compensation and incremental
costs related to new social welfare regulations.
- Sales and marketing expenses were US$2.8
million, compared with US$2.2
million in the first quarter 2012 and US$1.7 million in the second quarter 2011. The
sequential increase was mainly due to an increase in animation
related expenses and in film promotion expenses for the two films,
based on our franchises launched in late June and early July. The
year-over-year increase was largely due to an increase in
advertising expenses for both virtual worlds and mobile products,
film promotion expenses and animation related expenses.
- General and administrative expenses were US$2.7 million, compared with US$2.7 million in the first quarter 2012 and
US$1.9 million in the second quarter
2011. The slight sequential decrease was largely due to a decrease
in the professional service expenses and the year-over-year
increase was mainly due to an increase in headcount expenses and
share-based compensation.
Share of Profit / Loss in Equity Method
Investment
Share of profit in equity method investment was US$0.4 million, compared with US$0.2 million in the first quarter 2012 and
US$0.3 million in the second quarter
2011.
Profit from Operations
Profit from operations was US$0.7
million, compared with US$0.8
million in the first quarter 2012 and US$4.4 million in the second quarter
2011.
Income tax expenses / benefit
Income tax benefit was US$1.8
million in the second quarter of 2012, the sequential and
year over year increase was due to the recognition of a one-time
tax benefit of US$2.1 million as a
result of approval for tax reduction for a prior year.
Net Income
Net income attributable to holders of ordinary shares was
US$3.2 million, compared with
US$1.6 million in the first quarter
2012 and US$4.3 million in the second
quarter 2011.
Non-GAAP net income attributable to shareholders was
US$3.8 million, compared with
US$2.2 million in the first quarter
2012 and US$4.7 million in the second
quarter 2011.
Basic and diluted earnings per ADS were US$0.09 and US$0.08
each, compared with US$0.04 and
US$0.04, respectively, in the first
quarter 2012, and US$0.14 and
US$0.13, respectively in the second
quarter 2011.
Non-GAAP basic and diluted earnings per ADS were US$0.10 and US$0.10
each, compared with US$0.06 and
US$0.06 each, in the first quarter
2012, and US$0.15 and US$0.14, respectively in the second quarter
2011.
Cash and Cash Equivalents
As of June 30, 2012, the Company
had US$122.0 million of cash and cash
equivalents, compared with US$121.1
million as of March 31,
2012.
Share Repurchase Program
On November 22, 2011, Board of
Directors of the Company approved a share repurchase program to
repurchase up to US$10.0 million of
its ADSs. During the second quarter of 2012, Taomee had
repurchased approximately 56,756 ADSs. As of June 30, 2012 the Company has repurchased a total
of 180,414 ADSs under this program with an average price of
approximately $4.5 per ADS.
Business Highlights
In April 2012,
Taomee further released six e-books for Apple iOS featuring the
Mole's World franchise; all six e-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.
On June 28, 2012 and
July 5, 2012, Taomee
released two movies nationwide, Seer II and Legend of The Moles:
The Treasure of Scylla. The two movies have each been shown on over
2,000 major screens across China.
As of July 15 and July 22, 2012, Seer II and Legend of The Moles
has generated over RMB 32.1 million
(US$5.1 million) and RMB 24.1 million (US$3.8 million) in box office revenue[2]
respectively.
In June 2012,
Shanghai Taomee Network Technology Co., Ltd., ("Shanghai Taomee")
formed Guangdong Taomee Animation Technology Co., Ltd.("Guangdong
Taomee") and the entity will focus on interactive toy design and
trading. Shanghai Taomee obtained 95% of the equity. Guangdong
Taomee will be consolidated into the Company's financial statements
starting from June 1, 2012
In July & August
2012, Taomee commercially launched Mole's World, its
flagship online virtual world in South
Korea and Thailand with
local game operators, respectively.
In the second quarter of 2012, Taomee co-launched
four new licensed mobile games with overseas partners on the
Apple's iOS platform, Further in August, 2012, Taomee also launched
the Seer animation mobile application on Apple's iOS platform.
[2] Box
office figures of Seer II and Mole's World II are according to
www.EntGroup.cn
|
Outlook for Third Quarter 2012
For the third quarter of 2012, Taomee estimates total net
revenues to increase 10% quarter over quarter.
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. 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 is set forth at the
end of this release.
Conference Call
The Company will host a conference call and live webcast
at 8:00 a.m. Eastern Daylight Time (New York) on Thursday, August 16th,
2012 (which is 8:00 p.m. in China on
Thursday, Aug 16, 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-presentations
A telephone replay of the call will be available after the
conclusion of the conference call at 11:00
a.m. Eastern Daylight Time on August 16, 2012 through August 23, 2012
11:59p.m. Eastern Daylight
Time. The dial-in details for the telephone replay are:
Conference
ID
number:
|
14833941
|
International dial-in
number
|
+612-8235-5000
|
China dial-in
number
|
10-800-1400386
|
About Taomee Holdings Limited
Taomee Holdings Limited is one of the leading family
entertainment and media companies in Greater China. Its online user community is
one of the largest in the region, which was widely trusted by
millions of parents and caregivers across Asia.
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
Na You
Taomee Holdings Limited
Email: ir@taomee.com
Tel: +86-18717748570
Taomee
Holdings Limited - Unaudited Consolidated Balance
Sheets
|
|
In USD
|
In USD
|
|
|
June
30
|
March
31
|
|
|
2012
|
2012
|
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash equivalents
|
$ 122,006,731
|
$
121,116,525
|
|
Accounts receivable
|
526,524
|
1,632,875
|
|
Income tax recoverable
|
149,812
|
-
|
|
Due from related parties
|
239,383
|
37,257
|
|
Prepayments and other current
assets
|
2,198,656
|
1,383,307
|
|
Deferred tax assets,
current
|
3,235,082
|
3,250,810
|
|
Total
current assets
|
128,356,188
|
127,420,774
|
|
|
|
|
|
Investments in equity method investees
|
2,515,446
|
2,621,361
|
|
Property
and equipment, net
|
1,709,818
|
2,024,995
|
|
Acquired
intangible assets
|
1,373,921
|
1,380,600
|
|
Other
assets
|
2,738,741
|
3,349,309
|
|
TOTAL
ASSETS
|
$
136,694,114
|
$
136,797,039
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts payable
|
$
211,843
|
$
120,860
|
|
Income tax payable
|
-
|
2,345,854
|
|
Advance from customers
|
8,621,406
|
10,150,886
|
|
Due to related parties
|
107,365
|
116,127
|
|
Deferred revenue
|
13,119,482
|
13,251,808
|
|
Deferred tax liabilities,
current
|
10,869
|
10,922
|
|
Accrued expenses and other current
liabilities
|
5,704,377
|
5,433,793
|
|
Total
current liabilities
|
27,775,342
|
31,430,250
|
|
|
|
|
|
Equity
|
|
|
|
Ordinary shares ($0.00002 par value; 875,000,000
shares
authorized; 728,427,520 and 728,427,520 shares
issued;
728,427,520 and 733,786,372 outstanding as of
March 31,
2012 and June 30, 2012, respectively)
|
14,698
|
14,569
|
|
Treasury stock
|
(255,354)
|
-
|
|
Additional paid-in
capital
|
71,540,018
|
70,786,836
|
|
Retained earnings
|
35,359,414
|
32,150,790
|
|
Accumulated other comprehensive
income
|
2,181,017
|
2,414,594
|
|
Total
equity
|
$
108,839,793
|
$
105,366,789
|
|
|
|
|
|
Non-controlling interests
|
78,979
|
-
|
|
|
|
|
|
TOTAL
LIABILITIES AND EQUITY
|
$
136,694,114
|
$
136,797,039
|
|
Taomee
Holdings Limited - Unaudited Consolidated Statements of
Operations
|
|
|
In USD,
except for share data
For
three months ended
|
|
|
June
30,
|
|
March
31,
|
|
June
30,
|
|
|
2012
|
|
2012
|
|
2011
|
Revenues:
|
|
|
|
|
|
|
Online business, net
|
|
$
8,568,740
|
|
$
9,331,748
|
|
$
10,692,370
|
Offline business, net
|
|
1,904,624
|
|
1,098,999
|
|
1,068,729
|
Total
net revenues
|
|
10,473,364
|
|
10,430,747
|
|
11,761,099
|
|
|
|
|
|
|
|
Cost of
services
|
|
|
|
|
|
|
Online business
|
|
(1,695,167)
|
|
(1,735,379)
|
|
(1,502,720)
|
Offline business
|
|
(640,451)
|
|
(397,208)
|
|
(248,639)
|
Total
cost of services
|
|
(2,335,618)
|
|
(2,132,587)
|
|
(1,751,359)
|
|
|
|
|
|
|
|
Gross
profit
|
|
8,137,746
|
|
8,298,160
|
|
10,009,740
|
|
|
|
|
|
|
|
Operating income (expenses):
|
|
|
|
|
|
|
Product development
|
|
(2,983,713)
|
|
(3,264,035)
|
|
(2,212,485)
|
Sales and marketing
|
|
(2,835,240)
|
|
(2,205,483)
|
|
(1,678,841)
|
General and
administrative
|
|
(2,711,214)
|
|
(2,732,887)
|
|
(1,896,278)
|
Other operating income
|
|
1,063,284
|
|
664,014
|
|
158,926
|
Total
operating expenses
|
|
(7,466,883)
|
|
(7,538,391)
|
|
(5,628,678)
|
|
|
|
|
|
|
|
Profit from operations
|
|
670,863
|
|
759,769
|
|
4,381,062
|
|
|
|
|
|
|
|
Interest
income, net
|
|
666,848
|
|
624,196
|
|
131,699
|
Other income (expenses), net
|
|
(282,010)
|
|
253,076
|
|
(5,115)
|
Income
before income taxes and share of profit in equity method
investments
|
|
1,055,701
|
|
1,637,041
|
|
4,507,646
|
|
|
|
|
|
|
|
Income tax
benefit (expense)
|
|
1,778,930
|
|
(252,351)
|
|
(514,634)
|
|
|
|
|
|
|
|
Share of
profit (loss) in equity method investments
|
|
373,994
|
|
215,250
|
|
342,979
|
|
|
|
|
|
|
|
Net
income
|
|
3,208,625
|
|
1,599,940
|
|
4,335,991
|
|
|
|
|
|
|
|
Less:
Deemed dividends on Series A convertible redeemable preferred
shares
|
|
-
|
|
-
|
|
(81,085)
|
|
|
|
|
|
|
|
Net
income attributable to holders of ordinary shares
|
|
$
3,208,625
|
|
$
1,599,940
|
|
$
4,254,906
|
|
|
|
|
|
|
|
Earnings per ADS
|
|
|
|
|
|
|
-Basic
|
|
$
0.09
|
|
$
0.04
|
|
$
0.14
|
-Diluted
|
|
$
0.08
|
|
$
0.04
|
|
$
0.13
|
|
|
|
|
|
|
|
Weighted average number of shares used in
calculation
|
|
|
|
|
|
|
-
Basic
|
|
730,769,890
|
|
728,427,520
|
|
514,972,527
|
-
Diluted
|
|
756,963,311
|
|
756,386,776
|
|
537,289,764
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taomee
Holdings Limited - Reconciliation of Non-GAAP and GAAP
Results
|
|
|
In USD,
except for share data
For
three months ended
|
|
|
June
30,
|
|
March
31,
|
|
June
30,
|
|
|
2012
|
|
2012
|
|
2011
|
Reconciliation from Non-GAAP measures to GAAP
measures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
net income attributable to holders of ordinary
shares
|
|
$
3,776,689
|
|
$
2,166,858
|
|
$
4,709,962
|
Share-based compensation
|
|
(568,064)
|
|
(566,918)
|
|
(455,056)
|
GAAP net income attributable to holders of
ordinary shares
|
|
$
3,208,625
|
|
$
1,599,940
|
|
$
4,254,906
|
|
|
|
|
|
|
|
Non-GAAP
diluted earnings per ADS
|
|
|
|
|
|
|
-Basic
|
|
$
0.10
|
|
$
0.06
|
|
$
0.15
|
-Diluted
|
|
$
0.10
|
|
$
0.06
|
|
$
0.14
|
SOURCE Taomee Holdings Limited