SHANGHAI, May 23, 2013 /PRNewswire/ -- 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, 2013.
First Quarter of 2013 Financial Highlights
- Total net revenues were US$9.6
million in the first quarter of 2013, as compared with
US$10.4 million in the first quarter
of 2012.
- Net income attributable to the holders of ordinary shares was
US$1.0 million in the first quarter
of 2013, as compared with US$1.6
million in the first quarter of 2012.
- Basic and diluted earnings per ADS[1] were US$0.03 and US$0.03, respectively in the first quarter of
2013 as compared with US$0.04 and
US$0.04, respectively, in the first
quarter of 2012.
- Non-GAAP net income attributable to holders of ordinary shares
was US$1.6 million in the first
quarter of 2013, as compared with US$2.2
million in the first quarter of 2012.
- Non-GAAP basic and diluted earnings per ADS were US$0.04 and US$0.04, respectively, in the first quarter of
2013, as compared with US$0.06 and
US$0.06, respectively, in the first
quarter of 2012.
[1]
|
Each American
Depositary Share ("ADS") represents twenty ordinary
shares
|
Mr. Benson Wang, co-founder and
chief executive officer of Taomee, stated, "This quarter
demonstrated solid progress in executing our multi-pronged growth
strategies to continue expanding our user base age range as well as
to improve the monetization capabilities of our robust cross-media
platform. Strong growth in our core games, Seer, Gong Fu
Pai and Flower Fairy, helped us significantly exceed our
own guidance and consensus estimates by 16% and 17%,
respectively.
"Going forward, we plan to continue our balanced focus on
increasing profitability and user growth over the coming quarters.
As the summertime approaches we expect our new games like Avatar
Star and Heroes Alliance, to continue to attract new
users as well as to further strengthen our brand equity that can
drive offline sales. This trend is exemplified by our self-produced
TV show, Taomee Dream School, which was recently rated as
one of the top three animation programs in China, according to our partnered TV stations'
rating. This success has strengthened our overall brand equity and
trust with children and families throughout China and we hope this will continue to drive
our online and offline business expansion over the coming years,"
concluded Mr. Wang.
Operational Results for First Quarter of 2013
- Active paying accounts for the Company's virtual worlds under
operation in mainland China
increased by 25% sequentially to 1.5 million in the first quarter
of 2013 from 1.2 million in the fourth quarter of 2012 due to
strong seasonality effect, but decreased from 1.9 million in the
first quarter of 2012, as the company did not commercially launch
any new online games in recent quarters.
- Average revenue per user ("ARPU") for the Company's virtual
worlds under operation in mainland China was approximately RMB 33, an increase of 11% and 6.5% from the
fourth quarter of 2012 and the first quarter of 2012,
respectively.
- The number of downloads for the mobile applications operated by
the Company increased by over 23% to approximately 3.7 million in
the first quarter of 2013 from 3.0 million in the first quarter of
2012, and increased by 35% from 2.7 million in the fourth quarter
of 2012. As of March 31, 2013, the
total cumulative downloads for Taomee's mobile applications reached
approximately 19.0 million.
Unaudited Financial Results for First Quarter of 2013
Total Net Revenues
Total net revenues were US$9.6
million in the first quarter of 2013, as compared with
US$10.4 million in the first quarter
of 2012.
Net online business revenues were US$8.2
million in the first quarter of 2013, as compared with
US$9.3 million in the first quarter
of 2012.
Net offline business revenues increased 28.5% to US$1.4 million in the first quarter of 2013, as
compared with US$1.1 million in the
first quarter of 2012. The increase was driven by the increase in
interactive toy sales.
Total Cost of Services
Total cost of services was US$2.3
million in the first quarter of 2013, as compared with
US$2.1 million in the first quarter
of 2012, primarily due to the increase in costs of service in both
online and offline business.
Online business related costs were US$1.8
million in the first quarter of 2013, as compared with
US$1.7 million in the first quarter
of 2012. The increase was primarily due to amortization costs
associated with the Company's upfront game licensing fees which
were partially offset by the decrease in bandwidth and hosting
costs.
Offline business related costs were US$0.5 million in the first quarter of 2013, as
compared with US$0.4 million in the
first quarter of 2012. The slight increase was mainly due to an
increase in costs related to interactive toys business.
Gross Profit and Gross Margin
Gross profit was US$7.3 million in
the first quarter of 2013, as compared with US$8.3 million in the first quarter of 2012.
Gross margin was 76.3% in the first quarter of 2013, as compared
with 79.6% in the first quarter of 2012, reflecting increased
growth in offline sales as a percentage of total net revenues.
Gross margin for the online business was 78.6% in the first
quarter of 2013, as compared with 81.4% in the first quarter of
2012.
Gross margin for the offline business was 62.7% in the first
quarter of 2013, as compared with 63.9% in the first quarter of
2012.
Total Operating Expenses
Total operating expenses decreased by 3.8% to US$7.3 million in the first quarter of 2013, as
compared with US$7.5 million in the
first quarter of 2012.
- Product development expenses were US$3.3
million in the first quarter of 2013, which remained stable
as compared with the first quarter of 2012.
- Sales and marketing expenses decreased 21.7% to US$1.7 million in the first quarter of 2013, as
compared with US$2.2 million in the
first quarter of 2012. The decrease was primarily due to lower
advertising expenses for both online virtual worlds and mobile
products.
- General and administrative expenses were US$3.0 million in the first quarter of 2013, as
compared with US$2.7 million in the
first quarter of 2012.The increase was mainly due to higher payroll
expenses including share based compensation expenses.
Share of Profit/ Loss in Equity Method
Investment
Share of profit in equity methods investments was US$0.3 million in the first quarter of 2013, as
compared with US$0.2 million in the
first quarter of 2012.
Profit from Operations
Profit from operations was US$66,847 in the first quarter of 2013, as
compared with US$0.8 million in the
first quarter of 2012.
Net Income
Net income attributable to holders of ordinary shares was
US$1.0 million, compared with
US$1.6 million in the first quarter
of 2012.
Basic and diluted earnings per ADS were US$0.03 and US$0.03, respectively, in the first quarter of
2013, as compared with US$0.04 and
US$0.04, respectively, in the first
quarter of 2012.
Non-GAAP net income attributable to holders of ordinary shares
was US$1.6 million in the first
quarter of 2013, as compared with US$2.2
million in the first quarter of 2012.
Non-GAAP basic and diluted earnings per ADS were US$0.04 and US$0.04, respectively, in the first quarter of
2013, as compared with US$0.06 and
US$0.06, respectively, in the first
quarter of 2012.
Cash and Cash Equivalents
As of March 31, 2013, the Company
had US$113.1 million of cash and cash
equivalents, compared with US$118.6million as of December 31, 2012.
Share Repurchase Program
During the first quarter of 2013, Taomee had repurchased 217,934
ADSs. As of March 31, 2013 the
Company had repurchased a total of 803,486 ADSs under the Company's
share repurchase program at an average price of approximately
US$3.95 per ADS.
Business Highlights
On February
1st, 2013,
Taomee began broadcasting its self-produced TV show Taomee Dream
School, and Seer animation Season 2 on leading cartoon channels
across China.
On March 14th,
2013, Taomee started closed beta testing for Avatar
Star, a cartoon style action game.
On March 15th,
2013, Taomee began broadcasting Mole's World Season
3 on leading cartoon channels throughout mainland China and Hong
Kong.
On April 2nd,
2013, Taomee started the second round of closed beta
testing for Speedy Hunter, a 3-D racing game.
On May 10th,,
2013, Taomee started closed beta testing for Heroes
Alliance, a new action game and major brand extension of
Seer franchise.
On May 14th,
2013, Taomee partnered with Shanghai Youhug Media Co., Ltd
to co-market a new family entertainment TV program called
"Bao Bei", or "Baby"
in English.
Outlook for Second Quarter of 2013
Net revenues for the second quarter of 2013 are expected to be
in the range of US$9.0 million to US$9.5
million. This forecast reflects the Company's current and
preliminary view, which is 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
8:00 a.m. Eastern Standard Time
(New York) on Thursday, May 23, 2013 (which is 8:00 p.m. in China on Thursday, May
23, 2013).
The dial-in details for the live conference call are:
Conference
ID:
|
71725351
|
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://www.media-server.com/m/p/q3whspod. A telephone replay of the
call will be available at 11:00am, Eastern
Standard Time on May 23, 2013
through 10:00am, May 30. The dial-in details for the telephone
replay are:
Conference
ID:
|
71725351
|
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 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, interactive toys, 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
|
|
March
31
|
|
December
31
|
|
2013
|
|
2012
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
113,098,428
|
|
$
118,570,672
|
Short term
investment
|
2,986,930
|
|
-
|
Accounts
receivable
|
2,862,442
|
|
2,371,060
|
Inventories
|
182,308
|
|
41,316
|
Income tax
recoverable
|
-
|
|
49,956
|
Due from related parties
|
303,268
|
|
893,020
|
Prepayments and other current assets
|
1,754,919
|
|
2,071,509
|
Deferred tax assets, current
|
2,977,761
|
|
2,969,896
|
Total current
assets
|
124,166,056
|
|
126,967,429
|
|
|
|
|
Investments in equity
investees
|
10,470,000
|
|
8,262,077
|
Property and
equipment, net
|
1,390,231
|
|
1,305,721
|
Acquired intangible
assets
|
1,539,503
|
|
1,664,763
|
Other
assets
|
2,589,003
|
|
1,557,532
|
TOTAL
ASSETS
|
$
140,154,793
|
|
$
139,757,522
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts payable
|
$ 553,891
|
|
$ 434,626
|
Income tax payable
|
33,993
|
|
-
|
Advance from customers
|
8,348,973
|
|
8,142,177
|
Due to related parties
|
179,910
|
|
89,728
|
Deferred revenue
|
12,269,666
|
|
12,061,510
|
Deferred tax liabilities, current
|
13,508
|
|
13,473
|
Accrued expenses and other current liabilities
|
3,996,112
|
|
5,265,461
|
Total current
liabilities
|
25,396,053
|
|
26,006,975
|
|
|
|
|
Equity
|
|
|
|
Taomee Holdings
Limited shareholders' equity
|
|
|
|
Ordinary shares
($0.00002 par value; 875,000,000
shares authorized; 736,648,732 and
735,277,726
shares issued; 732,409,792 and 730,919,046
outstanding as of December 31, 2012 and
March
31, 2013, respectively)
|
14,706
|
|
14,733
|
Treasury stock
|
(857,867)
|
|
(747,359)
|
Additional paid-in capital
|
72,449,882
|
|
72,437,283
|
Retained earnings
|
40,374,332
|
|
39,412,717
|
Accumulated other comprehensive income
|
2,701,748
|
|
2,555,570
|
Taomee Holdings
Limited shareholders' equity
|
114,682,801
|
|
113,672,944
|
Non-controlling
interests
|
75,939
|
|
77,603
|
Total
equity
|
$
114,758,740
|
|
$
113,750,547
|
|
|
|
|
TOTAL LIABILITIES
AND EQUITY
|
$
140,154,793
|
|
$
139,757,522
|
Taomee Holdings
Limited - Unaudited Consolidated Statements of
Operations
|
|
|
|
In USD, except for
share data
For three months
ended
|
|
|
March
31,
|
|
December
31,
|
|
March
31,
|
|
|
2013
|
|
2012
|
|
2012
|
Revenues:
|
|
|
|
|
|
|
Online
business, net
|
|
$
8,183,073
|
|
$
6,268,344
|
|
$
9,331,748
|
Offline
business, net
|
|
1,411,829
|
|
1,201,174
|
|
1,098,999
|
Total net
revenues
|
|
9,594,902
|
|
7,469,518
|
|
10,430,747
|
|
|
|
|
|
|
|
Cost of
services
|
|
|
|
|
|
|
Online
business
|
|
(1,748,437)
|
|
(1,632,259)
|
|
(1,735,379)
|
Offline
business
|
|
(526,726)
|
|
(370,939)
|
|
(397,208)
|
Total cost of
services
|
|
(2,275,163)
|
|
(2,003,198)
|
|
(2,132,587)
|
|
|
|
|
|
|
|
Gross
profit
|
|
7,319,739
|
|
5,466,320
|
|
8,298,160
|
|
|
|
|
|
|
|
Operating income
(expenses):
|
|
|
|
|
|
|
Product
development
|
|
(3,294,735)
|
|
(2,695,542)
|
|
(3,264,035)
|
Sales
and marketing
|
|
(1,727,418)
|
|
(2,066,303)
|
|
(2,205,483)
|
General
and administrative
|
|
(2,977,947)
|
|
(2,198,155)
|
|
(2,732,887)
|
Other
operating income
|
|
747,208
|
|
2,763,137
|
|
664,014
|
Total operating
expenses
|
|
(7,252,892)
|
|
(4,196,863)
|
|
(7,538,391)
|
|
|
|
|
|
|
|
Profit from
operations
|
|
66,847
|
|
1,269,457
|
|
759,769
|
|
|
|
|
|
|
|
Interest income,
net
|
|
760,734
|
|
672,226
|
|
624,196
|
Other income,
net
|
|
132,446
|
|
563,319
|
|
253,076
|
Income before
income taxes and share
of profit in equity method investments
|
|
960,027
|
|
2,505,002
|
|
1,637,041
|
|
|
|
|
|
|
|
Income tax
expense
|
|
(250,717)
|
|
(366,949)
|
|
(252,351)
|
|
|
|
|
|
|
|
Share of profit in
equity method investments
|
|
250,642
|
|
113,437
|
|
215,250
|
|
|
|
|
|
|
|
Net
income
|
|
959,952
|
|
2,251,490
|
|
1,599,940
|
|
|
|
|
|
|
|
Less: Net loss
attributable to noncontrolling
interest
|
|
(1,663)
|
|
(1,376)
|
|
-
|
|
|
|
|
|
|
|
Net income
attributable to holders of
ordinary shares
|
|
$ 961,615
|
|
$
2,252,866
|
|
$
1,599,940
|
Earnings per
ADS
|
|
|
|
|
|
|
-Basic
|
|
$ 0.03
|
|
$ 0.06
|
|
$ 0.04
|
-Diluted
|
|
$ 0.03
|
|
$ 0.06
|
|
$ 0.04
|
Weighted average
number of shares used
in calculation
|
|
|
|
|
|
|
- Basic
|
|
732,203,457
|
|
733,212,007
|
|
728,427,520
|
- Diluted
|
|
747,888,335
|
|
748,172,541
|
|
756,386,776
|
|
|
|
|
|
|
|
|
Taomee Holdings
Limited - Unaudited Consolidated Statements of Comprehensive
Income
|
|
|
In
USD,
For three months
ended
|
|
March
31,
2013
|
|
December
31,
2012
|
|
March
31,
2012
|
Net income
|
$ 959,952
|
|
$
2,251,490
|
|
$
1,599,940
|
Other comprehensive
income, net of tax
|
|
|
|
|
|
Foreign currency
translation adjustments
|
146,178
|
|
470,111
|
|
48,378
|
|
|
|
|
|
|
Comprehensive
income
|
1,106,130
|
|
2,721,601
|
|
1,648,318
|
Comprehensive loss
attributable to noncontrolling interest
|
(1,663)
|
|
(1,376)
|
|
-
|
|
|
|
|
|
|
Comprehensive income
attributable to Taomee Holdings Limited
|
1,107,793
|
|
2,722,977
|
|
1,648,318
|
Taomee Holdings
Limited - Reconciliation of Non-GAAP and GAAP
Results
|
|
|
|
In USD, except for
share data
For three months
ended
|
|
|
March
31,
|
|
December
31,
|
|
March
31,
|
|
|
2013
|
|
2012
|
|
2012
|
Reconciliation
from Non-GAAP measures to GAAP measures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net income
attributable to holders of ordinary shares
|
|
$
1,561,627
|
|
$
2,730,391
|
|
$
2,166,858
|
Share-based
compensation
|
|
(600,012)
|
|
(477,525)
|
|
(566,918)
|
GAAP net income
attributable to holders of ordinary shares
|
|
$
961,615
|
|
$
2,252,866
|
|
$
1,599,940
|
|
|
|
|
|
|
|
Non-GAAP diluted
earnings per ADS
|
|
|
|
|
|
|
-Basic
|
|
$ 0.04
|
|
$ 0.07
|
|
$ 0.06
|
-Diluted
|
|
$ 0.04
|
|
$ 0.07
|
|
$ 0.06
|
|
|
|
|
|
|
|
|
|
SOURCE Taomee Holdings Limited