SHANGHAI, Nov. 20, 2012 /PRNewswire/ -- Taomee Holdings
Limited (NYSE: TAOM) ("Taomee" or the "Company"), a leading
children's entertainment and media company in China, today reported its unaudited financial
results for the third quarter ended September 30, 2012.
Third Quarter of 2012 Financial
Highlights
- Total net revenues were US$11.8
million, an increase of 13.0% from US$10.5 million in the second quarter of 2012 and
a decrease of 6.7% from US$12.7
million in the third quarter of 2011.
- Gross margin was 70.2% compared to 77.7% in the second quarter
of 2012 and 81.2% in the third quarter of 2011.
- Net income attributable to the holders of ordinary shares was
US$1.8 million, compared with
US$3.2 million in the second quarter
of 2012 and US$4.4 million in the
third quarter of 2011.
- Basic and diluted earnings per ADS(1) were US$0.05 and US$0.05, respectively, compared with US$0.09 and US$0.08, respectively, in the second quarter of
2012 and US$0.12 and US$0.12 respectively, in the third quarter of
2011.
- Non-GAAP net income attributable to holders of ordinary shares
was US$2.4 million, compared with
US$3.8 million in the second quarter
of 2012 and US$5.0 million in the
third quarter of 2011.
- Non-GAAP basic and diluted earnings per ADS were US$0.07 and US$0.06, respectively, compared with US$0.10 and US$0.10, respectively, in the second quarter of
2012 and US$0.14 and US$0.13, respectively, in the third quarter of
2011.
(1) Each American Depositary Share ("ADS") represents twenty
ordinary shares
|
Mr. Benson Wang, co-founder and
chief executive officer of Taomee, stated, "We are encouraged by
our overall performance in the third quarter, which exceeded our
expectations and reflected stable operational results in our
core business. Our strategy to establish and grow our
cross-media, core character franchise base is continuing to gain
traction both online and offline. We grew our online web games
active user base by 32% quarter-over-quarter, and in mobile, we
recently surpassed 12 million total downloads. For our
offline business, we successfully released two films based on our
core franchises, Mole's World and Seer, which were broadcasted on
over 2,000 screens throughout Mainland China and Taiwan, and achieved over 50 million RMB in combined box office
receipts."
"Our strategy of increasing active user growth and engagement is
proving effective as evidenced by the 32% increase in sequential
user growth and stable ARPU during the quarter. We believe
our offline expansion provides us with a unique opportunity to
monetize our online virtual worlds, representing a significant
long-term growth opportunity. Going forward, we remain
committed to enhancing our high quality and unique content offering
across mobile, online and offline, in attempt to further solidify
our brand equity, diversify our revenue streams, and augment our
competitive position," concluded Mr. Wang.
Operational Results for Third Quarter of 2012
- For the third quarter of 2012, the number of active accounts
for the Company's virtual worlds under operation in mainland
China increased 32.3% to
approximately 57.7 million from 43.6 million in the second quarter
of 2012 and increased 55.5% from 37.1 million in the third quarter
of 2011.
- Active paying accounts for the Company's virtual worlds under
operation in mainland China
slightly decreased to 1.7 million from 1.8 million in the second
quarter of 2012 reflecting the Company's focus on growing its user
base and engagement time for new users and decreased from 2.1
million in the third quarter of 2011.
- The ARPU for the Company's virtual worlds under operation in
mainland China remained stable at
approximately RMB 30 (US$4.7) compared with RMB
30 (US$4.8) in the second
quarter of 2012, and RMB 33
(US$5.2) for the third quarter of
2011.
- The number of downloads for the mobile applications operated by
the Company in the third quarter of 2012 was approximately 4.3
million, compared to 4.0 million in the second quarter of 2012. The
increase was mainly due to the launch of several new mobile
applications: the Seer animation and Mole Kart 2. As of
September 30, 2012, the total
cumulative downloads for our mobile applications have reached 12.4
million.
Unaudited Financial Results for Third Quarter of 2012
Total Net Revenues
Total net revenues were US$11.8
million, compared with US$10.5
million in the second quarter of 2012 and US$12.7 million in the third quarter of
2011.
Net online business revenues were US$8.0
million, compared with US$8.6
million in the second quarter of 2012 and US$10.4 million in the third quarter of 2011.
Net offline business revenues were US$3.8
million, compared with US$1.9
million in the second quarter of 2012 and US$2.3 million in the third quarter of 2011. The
sequential and year-over-year increases were mainly driven by film
related revenues as well as merchandise licensing. During the
summer vacation, Taomee launched two sequel films of Mole's World
and Seer and recorded film box office revenues sharing of
approximately US$1.5 million in the
third quarter of 2012.
Total Cost of Services
Total cost of services was US$3.5
million, compared with US$2.3
million in the second quarter of 2012 and US$2.4 million in the third quarter of
2011.
Online business related costs were US$1.9
million, compared with US$1.7
million in the second quarter of 2012 and US$1.5 million in the third quarter of
2011. The slight sequential increase was primarily due to the
increase of payroll expense and amortization costs of upfront game
licensing fees, and to a lesser extent an increase in bandwidth and
hosting costs, all of which were partially offset by the decrease
in prepaid card production costs.
Offline business related costs were US$1.6 million, compared with US$0.6 million in the second quarter of 2012 and
US$0.9 million in the third quarter
of 2011. The sequential and year-over-year increases were mainly
due to the increase in film production costs associated with the
Company's successful launch of its two films during the
quarter.
Gross Profit and Gross Margin
Gross profit was US$8.3 million,
compared with US$8.1 million in the
second quarter of 2012 and US$10.3
million in the third quarter of 2011.
Gross margin was 70.2%, compared with 77.7% in the second
quarter of 2012 and 81.2% in the third quarter of 2011.
Gross margin for the online business was 76.4%, compared with
80.2% in the second quarter of 2012 and 85.3% in the third quarter
of 2011.
Gross margin for the offline business was 57.2%, compared with
66.4% in the second quarter of 2012 and 63.0% in the third quarter
of 2011.
Total Operating Expenses
Total operating expenses were US$7.6
million, compared with US$7.5
million in the second quarter of 2012 and US$6.2 million in the third quarter of 2011.
- Product development expenses were US$3.4
million, compared with US$3.0
million in the second quarter of 2012 and US$2.9 million in the third quarter of 2011. The
sequential and the year-over-year increases were primarily due to
an increase in payroll expenses partially offset by a decrease in
depreciation costs.
- Sales and marketing expenses were US$2.9
million, compared with US$2.8
million in the second quarter of 2012 and US$1.9 million in the third quarter of 2011. The
year-over-year increase was largely due to the increases in
advertising expenses for both online virtual worlds and mobile
products as well as the increase in film and animation related
promotion expenses.
- General and administrative expenses were US$2.4 million, compared with US$2.7 million in the second quarter of 2012 and
US$2.3 million in the third quarter
of 2011. The sequential decreases were largely due to decrease in
the professional service expenses and were partially offset by the
increase in payroll expenses, and the year-over-year increase was
mainly due to an increase in payroll expenses.
Share of Profit / Loss in Equity Method
Investment
Share of profit in equity methods investments was US$0.4 million, compared with US$0.4 million in the second quarter of 2012 and
US$0.2 million in the third quarter
of 2011.
Profit from Operations
Profit from operations was US$0.7
million, compared with US$0.7
million in the second quarter of 2012 and US$4.1 million in the third quarter of
2011.
Net Income
Net income attributable to holders of ordinary shares was
US$1.8 million, compared with
US$3.2 million in the second quarter
of 2012 and US$4.4 million in the
third quarter of 2011.
Non-GAAP net income attributable to shareholders was
US$2.4 million, compared with
US$3.8 million in the second quarter
of 2012 and US$5.0 million in the
third quarter of 2011.
Basic and diluted earnings per ADS were US$0.05 and US$0.05, respectively,, compared with
US$0.09 and US$0.08, respectively, in the second quarter of
2012, and US$0.12 and US$0.12, respectively in the third quarter of
2011.
Non-GAAP basic and diluted earnings per ADS were US$0.07 and US$0.06, respectively, compared with US$0.10 and US$0.10, respectively, in the second quarter of
2012, and US$0.14 and US$0.13, respectively in the third quarter of
2011.
Cash and Cash Equivalents
As of September 30, 2012, the
Company had US$119.3 million of cash
and cash equivalents, compared with US$122.0
million as of June 30,
2012.
Investment in equity investees
In July 2012,
Shanghai Taomee sold all its equity interest in Shenzhen Ruigao
Information Technology Co., Ltd., or Ruigao, to a senior manager at
Ruigao and other three third-party individuals for approximately
US$1.0 million and recorded profit in
equity investments of US$0.3
million
In September 2012,
Taomee entered into an investment agreement to acquire 8.59% of
Gamespedia Holdings Limited ("Gamespedia")'s shares for a
consideration of US$6,205,000 in
cash. Gamespedia operates the mini game portal website www.7k7k.com
in China. Taomee paid US$3.0 million in September and the remaining
consideration in October 2012.
Share Repurchase Program
During the third quarter of 2012, Taomee had repurchased
approximately 193,191 ADSs. As of September
30, 2012 the Company has repurchased a total of 373,605 ADSs
under the Company's share repurchase program at an average price of
approximately US$4.2 per ADS.
Business Highlights
On June 28, 2012 and
July 5, 2012, Taomee
released two films nationwide, Seer II and Legend of The Moles: The
Treasure of Scylla. The two films have each been shown on over
2,000 major screens across mainland China and Taiwan. As of the end of September 30, 2012, the two films had generated
over RMB 55 million (US$8.7 million) in box office
revenue.
In July and August
2012, Taomee commercially launched Mole's World, its
flagship online virtual world, in South
Korea and Thailand with
local game operators.
On August 13, 2012,
Taomee commercially launched Wizard 101, its first client server
game, licensed from KingsIsle Entertainment, Inc.
On November 20,
2012, partnering with Cartoon Network, Taomee
launched the official Chinese online portal, ben10.61.com for
Cartoon Network's Ben 10 franchise.
In the second half of 2012, Taomee launched three
new mobile applications: Seer animation, Mole Kart 2 Evolution and
Seer on Apple's iOS platform.
Outlook for Fourth Quarter of 2012
The Company expects revenues for the fourth quarter to be
between US$7.0~7.5 million. The sequential decline reflects
seasonality associated with the Chinese school calendar as well as
the lack of any films being released in the fourth quarter. These
forecasts also reflect the Company's current and preliminary view
on the market and operational conditions, which are subject to
change.
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 7:00 a.m. Eastern Standard Time (New York) on Tuesday,
November 20, 2012 (which is 8:00
p.m. in China on Tuesday,
November 20, 2012).
The dial-in details for the live conference call are:
U.S. toll-free:
|
+1-866-519-4004
|
Hong Kong toll-free:
|
800-930-346
|
International:
|
+65-6723-9381
|
China Mainland:
|
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?p=irol-eventDetails&c=243417&eventID=4866124
A telephone replay of the call will be available
through November 28, 2012 10:00p.m.Eastern Standard Time. The dial-in
details for the telephone replay
are:
Conference ID:
|
69005679
|
International:
|
+612-8199-0299
|
China:
|
400 1200 932
|
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 of 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
Na You
Taomee Holdings Limited
+86-21-61280056-8578
ir@taomee.com
Taomee Holdings
Limited - Unaudited Consolidated Balance Sheets
|
|
In
USD
|
In
USD
|
|
September
30
|
June
30
|
|
2012
|
2012
|
ASSETS
|
|
|
Current
assets:
|
|
|
Cash and cash
equivalents
|
$
119,334,986
|
$
122,006,731
|
Restricted cash
|
788,519
|
-
|
Accounts receivable
|
3,238,480
|
526,524
|
Inventories
|
54,350
|
44,430
|
Income tax
recoverable
|
-
|
149,812
|
Due from related
parties
|
265,787
|
239,383
|
Prepayments and other current assets
|
2,863,098
|
2,154,226
|
Deferred tax assets, current
|
3,226,868
|
3,235,082
|
Total current
assets
|
129,772,088
|
128,356,188
|
|
|
|
Investments in equity
investees
|
8,150,388
|
2,515,446
|
Property and equipment,
net
|
1,497,173
|
1,709,818
|
Acquired intangible
assets
|
1,302,776
|
1,373,921
|
Other assets
|
1,759,647
|
2,738,741
|
TOTAL
ASSETS
|
$
142,482,072
|
$
136,694,114
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
Current
liabilities:
|
|
|
Accounts payable
|
$
534,052
|
$
211,843
|
Income tax payable
|
140,222
|
-
|
Advance from customers
|
8,695,446
|
8,621,406
|
Due
to related parties
|
100,553
|
107,365
|
Deferred revenue
|
12,701,827
|
13,119,482
|
Deferred tax liabilities, current
|
10,841
|
10,869
|
Accrued expenses and other current liabilities
|
9,550,659
|
5,704,377
|
Total current
liabilities
|
31,733,600
|
27,775,342
|
|
|
|
Equity
|
|
|
Ordinary shares ($0.00002 par
value; 875,000,000 shares
authorized; 734,921,492 and 738,747,572 shares
issued;
733,786,372 and 734,883,752 outstanding as
of June 30,
2012 and Sep 30, 2012, respectively)
|
14,775
|
14,698
|
Treasury stock
|
(752,078)
|
(255,354)
|
Additional paid-in capital
|
72,161,487
|
71,540,018
|
Retained earnings
|
37,159,850
|
35,359,414
|
Accumulated other comprehensive income
|
2,085,459
|
2,181,017
|
Total
equity
|
$
110,669,493
|
$
108,839,793
|
|
|
|
Non-controlling
interests
|
78,979
|
78,979
|
|
|
|
TOTAL LIABILITIES AND
EQUITY
|
$
142,482,072
|
$
136,694,114
|
Taomee Holdings
Limited - Unaudited Consolidated Statements of
Operations
|
|
|
In USD, except for
share data
For three months
ended
|
|
|
September
30,
|
|
June
30,
|
|
September
30,
|
|
|
2012
|
|
2012
|
|
2011
|
Revenues:
|
|
|
|
|
|
|
Online business, net
|
|
$
8,000,663
|
|
$
8,568,740
|
|
$
10,382,615
|
Offline business, net
|
|
3,833,942
|
|
1,904,624
|
|
2,296,950
|
Total net
revenues
|
|
11,834,605
|
|
10,473,364
|
|
12,679,565
|
|
|
|
|
|
|
|
Cost of
services
|
|
|
|
|
|
|
Online business
|
|
(1,886,967)
|
|
(1,695,167)
|
|
(1,529,614)
|
Offline business
|
|
(1,640,020)
|
|
(640,451)
|
|
(850,275)
|
Total cost of
services
|
|
(3,526,987)
|
|
(2,335,618)
|
|
(2,379,889)
|
|
|
|
|
|
|
|
Gross
profit
|
|
8,307,618
|
|
8,137,746
|
|
10,299,676
|
|
|
|
|
|
|
|
Operating income
(expenses):
|
|
|
|
|
|
|
Product development
|
|
(3,374,238)
|
|
(2,983,713)
|
|
(2,929,040)
|
Sales
and marketing
|
|
(2,859,256)
|
|
(2,835,240)
|
|
(1,901,633)
|
General and administrative
|
|
(2,435,483)
|
|
(2,711,214)
|
|
(2,278,333)
|
Other
operating income
|
|
1,021,371
|
|
1,063,284
|
|
907,625
|
Total operating
expenses
|
|
(7,647,606)
|
|
(7,466,883)
|
|
(6,201,381)
|
|
|
|
|
|
|
|
Profit from
operations
|
|
660,012
|
|
670,863
|
|
4,098,295
|
|
|
|
|
|
|
|
Interest income,
net
|
|
683,697
|
|
666,848
|
|
482,981
|
Other income
(expenses), net
|
|
324,484
|
|
(282,010)
|
|
(65,966)
|
Income before income
taxes and
share of profit in equity method
investments
|
|
1,668,193
|
|
1,055,701
|
|
4,515,310
|
|
|
|
|
|
|
|
Income tax benefit
(expense)
|
|
(304,726)
|
|
1,778,930
|
|
(284,753)
|
|
|
|
|
|
|
|
Share of profit (loss)
in equity investments
|
|
436,969
|
|
373,994
|
|
178,657
|
|
|
|
|
|
|
|
Net
income
|
|
1,800,436
|
|
3,208,625
|
|
4,409,214
|
|
|
|
|
|
|
|
Net income
attributable to holders of
ordinary shares
|
|
$
1,800,436
|
|
$
3,208,625
|
|
$
4,409,214
|
Earnings per
ADS
|
|
|
|
|
|
|
-Basic
|
|
$
0.05
|
|
$
0.09
|
|
$
0.12
|
-Diluted
|
|
$
0.05
|
|
$
0.08
|
|
$
0.12
|
Weighted average
number of shares
used in calculation
|
|
|
|
|
|
|
- Basic
|
|
733,158,958
|
|
730,769,890
|
|
728,341,047
|
- Diluted
|
|
752,966,298
|
|
756,963,311
|
|
764,675,988
|
Taomee Holdings
Limited - Reconciliation of Non-GAAP and GAAP
Results
|
|
|
In USD, except for
share data
For three months
ended
|
|
|
September
30,
|
|
June
30,
|
|
September
30,
|
|
|
2012
|
|
2012
|
|
2011
|
Reconciliation from
Non-GAAP measures to GAAP measures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net
income attributable to holders
of ordinary shares
|
|
$
2,394,409
|
|
$
3,776,689
|
|
$
5,039,182
|
Share-based
compensation
|
|
(593,973)
|
|
(568,064)
|
|
(629,968)
|
GAAP net income
attributable to holders of
ordinary shares
|
|
$
1,800,436
|
|
$
3,208,625
|
|
$
4,409,214
|
|
|
|
|
|
|
|
Non-GAAP diluted
earnings per ADS
|
|
|
|
|
|
|
-Basic
|
|
$
0.07
|
|
$
0.10
|
|
$
0.14
|
-Diluted
|
|
$
0.06
|
|
$
0.10
|
|
$
0.13
|
SOURCE Taomee Holdings Limited