SHANGHAI, Aug. 22, 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 second quarter ended
June 30, 2013.
Second Quarter of 2013 Financial
Highlights
- Total net revenues increased by 15% to US$12.0 million in the second quarter of 2013, as
compared with US$10.5 million in the
second quarter of 2012.
- Net income attributable to the holders of ordinary shares was
US$0.3 million in the second quarter
of 2013, as compared with US$3.2
million in the second quarter of 2012.
- Basic and diluted earnings per ADS(1) were US$0.01 and US$0.01, respectively in the second quarter of
2013 as compared with US$0.09 and
US$0.08, respectively, in the second
quarter of 2012.
- Non-GAAP net income attributable to holders of ordinary shares
was US$1.6 million in the second
quarter of 2013, as compared with US$3.8
million in the second quarter of 2012.
- Non-GAAP basic and diluted earnings per ADS were US$0.04 and US$0.04, respectively, in the second quarter of
2013, as compared with US$0.10 and
US$0.10, respectively, in the second
quarter of 2012.
Mr. Benson Wang, co-founder and chief executive officer
of Taomee, stated, "This quarter's results suggest improving
trends in our business, and positive results from our efforts to
expand our user base and strengthen our user monetization
capabilities. Stable growth of our core games and strong sales of
our newly launched interactive toys helped us beat our own guidance
and consensus estimates by approximately 30%.
"This quarter, we continued to execute a multi-pronged growth
strategy on our cross-media platform, and achieved our goal of both
online and offline business expansion. Our online division launched
games on web and mobile Apple iOS platforms based on the Seer
franchise, including Seer: Universal Force. Meanwhile, our
offline division co-launched a new 3D film, Seer III: Universal
Force, in partnership with Enlight Media(2). The film is one of
the most popular domestic animation films of 2013 with
box-office revenue of over RMB 75
million. It is also the first time in our Company's history
that we released a film in conjunction with offline merchandise,
online web and mobile games with the same franchise and characters.
We believe this strategy will contribute to our future success in
brand building and cross-marketing, which will lead to long-term
profitability," concluded Mr. Wang.
|
(1)
|
Each American
Depositary Share ("ADS") represents twenty ordinary
shares
|
|
(2)
|
Beijing Enlight
Pictures Co. Ltd.
|
Operational Results for Second Quarter of 2013
- Active paying accounts for the Company's virtual worlds under
operation in mainland China was
1.3 million in the second quarter of 2013, a decrease of 8% and 26%
from 1.5 million in the first quarter of 2013 and 1.8 million in
the second quarter of 2012, respectively, 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 37, an increase of 12% and 23% from the first
quarter of 2013 and the second quarter of 2012, respectively. The
quarter-over-quarter and year-over-year increase reflected
improving monetization trends and results of the Company's ongoing
strategy to focus on expanding and strengthening the user
base.
- The number of downloads for the mobile applications operated by
the Company increased approximately 2.3 million in the second
quarter of 2013, and totaled approximately 6.0 million for
the first half year of 2013.
Unaudited Financial Results for Second Quarter of
2013
Total Net Revenues
Total net revenues increased by 15% to US$12.0 million in the second quarter of 2013, as
compared with US$10.5 million in the
second quarter of 2012.
Net online business revenues remained stable as US$8.6 million in the second quarter of 2013, as
compared with US$8.6 million in the
second quarter of 2012.
Net offline business revenues increased by 79% to US$3.4 million in the second quarter of 2013, as
compared with US$1.9 million in the
second quarter of 2012. The increase was driven by the increase in
interactive toy sales as the Company launched new toy products with
characters from the simultaneously released game and film of
"Seer III: Universal Force".
Total Cost of Services
Total cost of services was US$3.5
million in the second quarter of 2013, as compared with
US$2.3 million in the second quarter
of 2012. The increase was primarily attributable to our expansion
of offline business.
Online business related costs were US$1.8
million in the second quarter of 2013, as compared with
US$1.7 million in the second quarter
of 2012. The slight increase was primarily due to amortization
costs associated with the Company's upfront game licensing fees
which has occurred since the third quarter of 2012.
Offline business related costs were US$1.7 million in the second quarter of 2013, as
compared with US$0.6 million in the
second quarter of 2012. The increase was mainly due to an increase
in costs related to interactive toys business, which is a
comparatively lower margin business and has contributed a larger
portion in the total offline sales mix.
Gross Profit and Gross Margin
Gross profit increased by 5% to US$8.5
million in the second quarter of 2013, as compared with
US$8.1 million in the second quarter
of 2012.
Gross margin was 70.8% in the second quarter of 2013, as
compared with 77.7% in the second quarter of 2012, partially due to
the increased growth in offline business, which is a comparatively
lower margin business as compared to online business, as a
percentage of total net revenues from 18.2% in the second quarter
of 2012 to 28.3% in the second quarter of 2013.
Gross margin for the online business was 79.5% in the second
quarter of 2013, as compared with 80.2% in the second quarter of
2012.
Gross margin for the offline business was 48.8% in the second
quarter of 2013, as compared with 66.4% in the second quarter of
2012, primarily attribute to the increased contribution by sale of
interactive toys which have a lower margin than other products.
Total Operating Expenses
Total operating expenses was US$9.1
million in the second quarter of 2013, as compared with
US$7.5 million in the second quarter
of 2012.
- Product development expenses were US$3.3
million in the second quarter of 2013, as compared with
US$3.0 million in the second quarter
of 2012, which was partially due to the expansion of
headcount.
- Sales and marketing expenses decreased 16% to US$2.4 million in the second quarter of 2013, as
compared with US$2.8 million in the
second quarter of 2012. The decrease was primarily due to the
timing of film release, only part of film promotion expenses were
recognized in this quarter, while the remaining part of the
promotion expenses will be recognized in next quarter.
- General and administrative expenses were US$3.0 million in the second quarter of 2013, as
compared with US$2.7 million in the
second quarter of 2012.The increase was due to higher payroll and
welfare expenses.
- Impairment of intangible assets was US$0.9 million in the second quarter of 2013,
related to the remaining term of Wizard 101, a game for which the
Company obtained a three-year exclusive license in 2011 and
commercially launched in the third quarter of 2012.
Share of Profit/ Loss in Equity Method
Investment
Share of profit/loss in equity method investments was a loss of
US$0.07 million in the second quarter
of 2013, as compared with a profit of US$0.4
million in the second quarter of 2012.
Profit/Loss from Operations
Loss from operations was US$0.5
million in the second quarter of 2013, as compared with a
profit of US$0.7 million in the
second quarter of 2012.
Net Income
Net income attributable to holders of ordinary shares was
US$0.3 million, compared with
US$3.2 million in the second quarter
of 2012.
Basic and diluted earnings per ADS were US$0.01 and US$0.01, respectively, in the second quarter of
2013, as compared with US$0.09 and
US$0.08, respectively, in the second
quarter of 2012.
Non-GAAP net income attributable to holders of ordinary shares
was US$1.6 million in the second
quarter of 2013, as compared with US$3.8
million in the second quarter of 2012.
Non-GAAP basic and diluted earnings per ADS were US$0.04 and US$0.04, respectively, in the second quarter of
2013, as compared with US$0.10 and
US$0.10, respectively, in the second
quarter of 2012.
Cash and Cash Equivalents
As of June 30, 2013, the Company
had US$114.3 million of cash and cash
equivalents, compared with US$113.1
million as of March 31,
2013.
Share Repurchase Program
During the second quarter of 2013, Taomee had repurchased 78,611
ADSs. As of June 30, 2013 the Company
had repurchased a total of 882,097 ADSs under the Company's share
repurchase program at an average price of approximately
US$3.97 per ADS.
Business Highlights
- In the second quarter, 2013, Taomee launched
interactive toy products, Spin Boom, based on the Seer franchise,
and Spin Boom: Universal Force, the collectibles edition based on
the film Seer III: Universal Force. The toys have features
that are interactive with the online games in the Seer
franchise.
- On July 12, 2013,
Taomee, in partnership with Enlight Media, released Seer III:
Universal Force, a domestically produced 3D film. It was the
Company's first feature film launched in conjunction with related
online web and mobile games, as well as consumer products,
interactive toys, books and trading cards. As of August 3, 2013, the film generated over
RMB 75 million (US$12.0 million) in box-office revenue, which has
exceeded the accumulated box-office revenue of the previous two
films in the series.
- On July 19,
2013, Taomee launched the mobile game Seer:
Universal Force on Apple's iOS platform, which was ranked
number 1 in paid apps in the China
territory within 2 days after launch. On August 2, 2013, Taomee open beta launched
the online web game of the same title.
- In July, 2013, Taomee hosted over 200
on-the-ground events and shows in over 40 cities, engaged and
interacted with over 500,000 children and Taomee fans across
China.
- On August 8, 2013,
Taomee open beta launched Avatar Star, a cartoon style action
game.
Outlook for Third Quarter of 2013
Net revenues for the third quarter of 2013 are expected to be in
the range of US$13.0 million to US$13.5
million. We expect both online and offline net revenues to
grow quarter-over-quarter and year-over-year. 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 and impairment charges 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 and impairment
charges 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 Time (New
York) on Thursday, August 22,
2013 (which is 8:00 p.m. Beijing Time on
Thursday, August 22, 2013).
The dial-in details for the live conference call are:
|
Conference
ID:
|
27038819
|
|
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://edge.media-server.com/m/p/2bekdgii/lan/en. A telephone
replay of the call will be available at 11:00am, Eastern Time on August 22, 2013 through 10:00am, August
30. The dial-in details for the telephone replay are:
|
Conference
ID:
|
27038819
|
|
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,
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 annual report on Form 20-F and other
documents filed with the U.S. Securities and Exchange Commission.
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
Angela Wang
Taomee Holdings Limited
+86-21-61280056-8651
ir@taomee.com
|
Taomee Holdings
Limited - Unaudited Consolidated Balance Sheets
|
|
In
USD
|
|
|
June
30,
|
|
March
31,
|
|
2013
|
|
2013
|
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
114,303,400
|
|
$
113,098,428
|
|
Short term
investment
|
2,988,787
|
|
2,986,930
|
|
Accounts
receivable
|
3,037,542
|
|
2,862,442
|
|
Inventories
|
323,889
|
|
182,308
|
|
Income tax recoverable
|
574,366
|
|
-
|
|
Due from related parties
|
247,532
|
|
303,268
|
|
Prepayments and other current
assets
|
2,644,669
|
|
1,754,919
|
|
Deferred tax assets, current
|
3,021,232
|
|
2,977,761
|
|
Total current
assets
|
127,141,417
|
|
124,166,056
|
|
|
|
|
|
Investments in equity
investees
|
10,141,566
|
|
10,470,000
|
|
Property and
equipment, net
|
1,647,495
|
|
1,390,231
|
|
Acquired intangible
assets
|
562,503
|
|
1,539,503
|
|
Other
assets
|
3,529,750
|
|
2,589,003
|
|
TOTAL
ASSETS
|
$
143,022,731
|
|
$
140,154,793
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts payable
|
$
1,535,364
|
|
$ 553,891
|
|
Income tax payable
|
-
|
|
33,993
|
|
Advance from customers
|
7,382,155
|
|
8,348,973
|
|
Due to related parties
|
237,904
|
|
179,910
|
|
Deferred revenue
|
11,927,360
|
|
12,269,666
|
|
Deferred tax liabilities, current
|
13,706
|
|
13,508
|
|
Accrued expenses and other current liabilities
|
5,755,154
|
|
3,996,112
|
|
Total current
liabilities
|
26,851,643
|
|
25,396,053
|
|
|
|
|
|
Equity
|
|
|
|
|
Taomee Holdings
Limited shareholders' equity
|
|
|
|
|
Ordinary shares
($0.00002 par value; 875,000,000 shares authorized;
735,277,726 and 735,820,028 shares issued;
730,919,046 and
734,247,808 outstanding as of March 31,
2013 and June 30, 2013,
respectively)
|
14,716
|
|
14,706
|
|
Treasury stock
|
(323,870)
|
|
(857,867)
|
|
Additional paid-in
capital
|
72,070,957
|
|
72,449,882
|
|
Retained earnings
|
40,718,694
|
|
40,374,332
|
|
Accumulated other
comprehensive income
|
3,523,776
|
|
2,701,748
|
|
Taomee Holdings
Limited shareholders' equity
|
116,004,273
|
|
114,682,801
|
|
Non-controlling
interests
|
166,815
|
|
75,939
|
|
Total
equity
|
$
116,171,088
|
|
$
114,758,740
|
|
|
|
|
|
TOTAL LIABILITIES
AND EQUITY
|
$
143,022,731
|
|
$
140,154,793
|
|
Taomee Holdings
Limited - Unaudited Consolidated Statements of
Operations
|
|
In USD, except for
share data
|
|
|
|
For three months
ended
|
|
|
June
30,
|
|
March
31,
|
|
June
30,
|
|
|
2013
|
|
2013
|
|
2012
|
|
Revenues:
|
|
|
|
|
|
|
|
Online business, net
|
|
$
8,635,407
|
|
$
8,183,073
|
|
$
8,568,740
|
|
Offline business, net
|
|
3,404,026
|
|
1,411,829
|
|
1,904,624
|
|
Total net
revenues
|
|
12,039,433
|
|
9,594,902
|
|
10,473,364
|
|
|
|
|
|
|
|
|
Cost of
services
|
|
|
|
|
|
|
|
Online business
|
|
(1,767,903)
|
|
(1,748,437)
|
|
(1,695,167)
|
|
Offline business
|
|
(1,742,080)
|
|
(526,726)
|
|
(640,451)
|
|
Total cost of
services
|
|
(3,509,983)
|
|
(2,275,163)
|
|
(2,335,618)
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
8,529,450
|
|
7,319,739
|
|
8,137,746
|
|
|
|
|
|
|
|
|
Operating income
(expenses):
|
|
|
|
|
|
|
|
Product development
|
|
(3,309,258)
|
|
(3,294,735)
|
|
(2,983,713)
|
|
Sales and marketing
|
|
(2,381,940)
|
|
(1,727,418)
|
|
(2,835,240)
|
|
General and
administrative
|
|
(2,950,988)
|
|
(2,977,947)
|
|
(2,711,214)
|
|
Impairment of intangible assets
|
|
(865,910)
|
|
-
|
|
-
|
|
Other operating income
|
|
448,631
|
|
747,208
|
|
1,063,284
|
|
Total operating
expenses
|
|
(9,059,465)
|
|
(7,252,892)
|
|
(7,466,883)
|
|
|
|
|
|
|
|
|
Profit (loss) from
operations
|
|
(530,015)
|
|
66,847
|
|
670,863
|
|
|
|
|
|
|
|
|
Interest
income
|
|
631,997
|
|
760,734
|
|
666,848
|
|
Other income
(expense), net
|
|
188,104
|
|
132,446
|
|
(282,010)
|
|
Income before
income taxes and
share of profit (loss) in equity
method investments
|
|
290,086
|
|
960,027
|
|
1,055,701
|
|
|
|
|
|
|
|
|
Income tax (expense)
benefit
|
|
141,211
|
|
(250,717)
|
|
1,778,930
|
|
|
|
|
|
|
|
|
Share of profit
(loss) in equity method
investments
|
|
(73,195)
|
|
250,642
|
|
373,994
|
|
|
|
|
|
|
|
|
Net
income
|
|
358,102
|
|
959,952
|
|
3,208,625
|
|
|
|
|
|
|
|
|
Less: Net income
(loss) attributable to
noncontrolling interest
|
|
13,740
|
|
(1,663)
|
|
-
|
|
|
|
|
|
|
|
|
Net income
attributable to holders of
ordinary shares
|
|
$ 344,362
|
|
$ 961,615
|
|
$
3,208,625
|
|
Earnings per
ADS
|
|
|
|
|
|
|
|
- Basic
|
|
$ 0.01
|
|
$ 0.03
|
|
$ 0.09
|
|
- Diluted
|
|
$ 0.01
|
|
$ 0.03
|
|
$ 0.08
|
|
Weighted average
number of
shares used in calculation
|
|
|
|
|
|
|
|
- Basic
|
|
731,446,938
|
|
732,203,457
|
|
730,769,890
|
|
- Diluted
|
|
744,821,217
|
|
747,888,335
|
|
756,963,311
|
|
Taomee Holdings
Limited - Unaudited Consolidated Statements of Comprehensive
Income
|
|
In
USD
|
|
|
For three months
ended
|
|
June
30,
|
|
March
31,
|
|
June
30,
|
|
2013
|
|
2013
|
|
2012
|
|
|
|
|
|
|
|
Net income
|
$ 358,102
|
|
$ 959,952
|
|
$
3,208,625
|
|
Other comprehensive
income, net of tax
|
|
|
|
|
|
|
Foreign currency
translation adjustments
|
822,028
|
|
146,178
|
|
(233,577)
|
|
|
|
|
|
|
|
Comprehensive
income
|
1,180,130
|
|
1,106,130
|
|
2,975,048
|
|
Comprehensive
income/(loss) attributable to noncontrolling interest
|
13,740
|
|
(1,663)
|
|
-
|
|
|
|
|
|
|
|
Comprehensive income
attributable to Taomee Holdings Limited
|
1,166,390
|
|
1,107,793
|
|
2,975,048
|
|
Reconciliation
from Non-GAAP measures to GAAP measures
|
|
In USD, except for
share data
|
|
|
|
For three months
ended
|
|
|
June
30,
|
|
March
31,
|
|
June
30,
|
|
|
2013
|
|
2013
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net
income attributable to
holders of ordinary shares
|
|
$
1,551,513
|
|
$
1,561,627
|
|
$
3,776,689
|
|
Share-based
compensation
|
|
(341,241)
|
|
(600,012)
|
|
(568,064)
|
|
Impairment of
intangible assets
|
|
(865,910)
|
|
-
|
|
-
|
|
GAAP net income
attributable to holders of
ordinary shares
|
|
$
344,362
|
|
$
961,615
|
|
$
3,208,625
|
|
|
|
|
|
|
|
|
Non-GAAP diluted
earnings per ADS
|
|
|
|
|
|
|
|
- Basic
|
|
$
0.04
|
|
$
0.04
|
|
$
0.10
|
|
- Diluted
|
|
$
0.04
|
|
$
0.04
|
|
$
0.10
|
SOURCE Taomee Holdings Limited