AutoNavi Holdings Limited ("AutoNavi" or the "Company")
(Nasdaq:AMAP), a leading provider of digital map content and
navigation and location-based solutions in China, today announced
its unaudited financial results for the first quarter ended March
31, 2014.
First Quarter 2014 Results
Revenues
Total net revenues in the first quarter of 2014 were $23.1
million, compared to $34.3 million in the first quarter of 2013,
and $31.5 million in the fourth quarter of 2013.
Automotive Navigation
Net revenues from the Company's automotive navigation business
in the first quarter of 2014 were $14.5 million, compared to $15.5
million in the first quarter of 2013, and $18.6 million in the
fourth quarter of 2013. The changes were partially attributable to
one of the Company's existing customers, BMW, which shifted some of
its latest car models to another map data provider and a decline in
blended average selling prices ("ASP"), as the Company's business
continues to include more mid-range automobiles with lower
ASPs.
Mobile and Internet Location-based Solutions
In the first quarter of 2014, net revenues from the Company's
mobile and Internet location-based solutions business were $6.5
million, compared to $13.9 million in the first quarter of 2013,
and $8.9 million in the fourth quarter of 2013. The changes were
primarily due to the Company's decision in August 2013 to make its
premium navigation app freely available to users.
Public Sector and Enterprise Applications
In the first quarter of 2014, net revenues from the Company's
public sector and enterprise applications business were $1.8
million, compared to $4.3 million in the first quarter of 2013 and
$3.1 million in the fourth quarter of 2013. The changes resulted
from the Company's strategic shift of internal resources to support
and develop its mobile offerings.
Cost of Revenues
Cost of revenues in the first quarter of 2014 was $12.6 million,
compared to $10.4 million in the first quarter of 2013, and $13.7
million in the fourth quarter of 2013. The year-over-year increase
in the Company's cost of revenues reflects its continued investment
in building its location-based database. The sequential decrease
was largely attributable to a decrease in outsourced data
production costs. Non-GAAP cost of revenues, which excludes
share-based compensation expenses, was $12.4 million, compared to
$10.2 million in the year ago period and $14.0 million in the
previous quarter.
Operating Expenses
Total operating expenses in the first quarter of 2014 were $55.1
million, compared to $20.8 million in the first quarter of 2013,
and $51.2 million in the fourth quarter of 2013. The increases in
total operating expenses mainly reflect the Company's investments
in the mobile Internet space. Non-GAAP operating expenses, which
exclude share-based compensation expenses, were $42.6 million in
the quarter, compared to $18.2 million in the year-ago quarter and
$44.9 million in the previous quarter.
Research and development ("R&D") expenses were $24.1 million
in the first quarter of 2014, compared to $10.6 million in the
first quarter of 2013, and $20.4 million in the fourth quarter of
2013. The increases were primarily due to an increase in the total
number of R&D personnel and share-based compensation expenses.
Non-GAAP R&D expenses, which exclude share-based compensation
expenses, were $20.8 million in the quarter, compared to $9.6
million in the year-ago quarter and $18.0 million in the previous
quarter.
Selling and marketing expenses were $17.1 million in the first
quarter of 2014, compared to $5.8 million in the first quarter of
2013, and $17.0 million in the fourth quarter of 2013. The
year-over-year increase was primarily due to an increase in
promotional spending for the Company's mobile products. Non-GAAP
selling and marketing expenses, which exclude share-based
compensation expenses, were $15.9 million in the quarter, compared
to $4.9 million in the year ago quarter and $16.6 million in the
previous quarter.
General and administrative expenses were $13.8 million in the
first quarter of 2014, compared to $4.4 million in the first
quarter of 2013, and $13.8 million in the fourth quarter of 2013.
The year-over-year increase was primarily due to higher share-based
compensation expenses and professional service fee. Non-GAAP
general and administrative expenses, which exclude share-based
compensation expenses, were $6.0 million in the quarter, compared
to $3.7 million in the year-ago quarter and $10.2 million in the
previous quarter.
Foreign Exchange losses
AutoNavi incurred foreign exchange loss of $6.2 million in the
quarter primarily due to the depreciation of its RMB bank deposits
against US dollars.
Net Loss Attributable to AutoNavi
Shareholders
Net loss attributable to AutoNavi shareholders was $46.0 million
in the first quarter of 2014, compared to a net income of $5.7
million in the first quarter of 2013, and a net loss of $28.2
million in the fourth quarter of 2013. Diluted net loss per
American depositary share ("ADS") attributable to AutoNavi
shareholders for the first quarter of 2014 was $0.84, as compared
to diluted net income per ADS attributable to AutoNavi shareholders
of $0.12 in the year-ago period and net loss per ADS attributable
to AutoNavi shareholders of $0.40 in the previous quarter. One ADS
represents four ordinary shares.
Non-GAAP net loss attributable to AutoNavi shareholders, which
excludes share-based compensation expenses, was $33.5 million in
the first quarter of 2014, compared to non-GAAP net income
attributable to AutoNavi shareholders of $8.4 million in the first
quarter of 2013, and non-GAAP net loss attributable to AutoNavi
shareholders of $22.1 million in the fourth quarter of 2013.
Diluted non-GAAP net loss per ADS attributable to AutoNavi
shareholders for the first quarter of 2014 was $0.61, compared to
diluted non-GAAP net income per ADS of $0.17 in the year-ago period
and diluted non-GAAP net loss per ADS of $0.31 in the previous
quarter.
Cash and Term Deposits Balance
As of March 31, 2014, the Company had $439.4 million in cash and
cash equivalents and term deposits.
Management Commentary
"In the first quarter, the number of online-to-offline service
orders processed through AutoNavi's free mobile map application
continued to grow," said Mr. Congwu Cheng, the Company's chairman
and chief executive officer. "The O2O space is developing in
exciting ways as users recognize the value and convenience of
dealing with local merchants via mobile devices. Our maps provide a
unique gateway to the mobile internet and help to bridge the
information gaps that previously existed between such buyers and
sellers, and in turn create monetization opportunities for our LBS
database and user traffic."
About AutoNavi Holdings Limited
AutoNavi Holdings Limited (Nasdaq:AMAP) is a leading provider of
digital map content and navigation and location-based solutions in
China. At the core of its business is a comprehensive nationwide
digital map database that covers approximately 3.6 million
kilometers of roadway and over 20 million points of interest across
China. Through its digital map database and proprietary technology
platform, AutoNavi provides comprehensive, integrated navigation
and location-based solutions optimized for the Chinese market and
users, including automotive navigation solutions, mobile
location-based solutions and Internet location-based solutions, and
public sector and enterprise applications. For more information on
AutoNavi, please visit http://www.autonavi.com.
Forward Looking Statements
This press release contains forward-looking statements made
under the "safe harbor" provisions of Section 21E of the Securities
Exchange Act of 1934, as amended. These forward-looking statements
can be identified by terminology such as "will," "expects,"
"anticipates," "future," "intends," "plans," "believes,"
"estimates," "confident" and similar statements. Among other
things, the quotations from management in this press release, as
well as AutoNavi's strategic and operational plans, contain
forward-looking statements. AutoNavi may also make written or oral
forward-looking statements in its reports filed with or furnished
to the U.S. Securities and Exchange Commission, in its annual
report to shareholders, in press releases and other written
materials and in oral statements made by its officers, directors or
employees to third parties. Statements that are not historical
facts, including statements about AutoNavi's beliefs and
expectations, are forward-looking statements. Forward-looking
statements involve inherent risks and uncertainties. A number of
factors could cause actual results to differ materially from those
contained in any forward-looking statement, including but not
limited to the following: AutoNavi's ability to adequately maintain
and update its digital map database and minimize errors in its
solutions; its current reliance on the automotive navigation market
and a small number of customers for a substantial portion of its
revenues; the project-based nature of its public sector and
enterprise applications business; its limited operating history in
the mobile/Internet location-based solutions markets; compliance
with a complex set of laws, rules and regulations governing its
surveying and mapping and other businesses in China; competition in
the navigation and location-based solutions businesses in China;
and its ability to manage its growth effectively and efficiently.
Further information regarding these and other risks is included in
AutoNavi's annual report on Form 20-F as well as in its other
filings with the Securities and Exchange Commission. All
information provided in this press release is current as of the
date of the press release, and AutoNavi undertakes no duty to
update such information, except as required under applicable
law.
About Non-GAAP Financial Measures
To supplement AutoNavi's consolidated financial results
presented in accordance with United States Generally Accepted
Accounting Principles ("GAAP"), AutoNavi uses in this press release
the following non-GAAP financial measures: (1) Non-GAAP cost of
revenues, (2) non-GAAP operating expenses, (3) non-GAAP R&D
expenses, (4) non-GAAP selling and marketing expenses, (5) non-GAAP
general and administrative expenses, (6) non-GAAP net income/loss
attributable to AutoNavi shareholders, and (7) non-GAAP diluted net
income/loss per ADS attributable to AutoNavi shareholders, which
are adjusted from results based on GAAP to exclude the impact of
share-based compensation expenses. The presentation of these
non-GAAP financial measures is not intended to be considered in
isolation or as a substitute for the financial information prepared
and presented in accordance with GAAP.
AutoNavi believes that these non-GAAP financial measures
facilitate investors' and management's comparisons to AutoNavi's
historical performance and assist management's financial and
operational decision making. A limitation of using these non-GAAP
financial measures is that share-based compensation expenses are
recurring expenses that will continue to exist in AutoNavi's
business for the foreseeable future. Management compensates for
these limitations by providing specific information regarding the
GAAP amounts excluded from each non-GAAP measure. The accompanying
table has more details on the reconciliation between non-GAAP
financial measures and their most directly comparable GAAP
financial measures to provide investors with context as to how the
adjustments impact the GAAP amounts.
AUTONAVI HOLDINGS
LIMITED |
Consolidated Balance
Sheet (unaudited) |
(In thousands of U.S.
dollars) |
|
|
|
|
March
31, |
December
31, |
|
2014 |
2013 |
|
|
|
|
|
|
Assets |
|
|
Current assets |
|
|
Cash and cash equivalents |
399,167 |
399,316 |
Restricted cash |
145 |
149 |
Term deposits |
40,216 |
80,942 |
Accounts receivable, net of allowance for
doubtful accounts of $3,780 and $3,882 as of March 31, 2014 and
December 31, 2013, respectively |
32,761 |
36,777 |
Due from related parties, trading |
215 |
7 |
Due from related parties, non-trading |
440 |
448 |
Prepaid expense and other current
assets |
19,273 |
16,200 |
Deferred tax assets-current |
13 |
554 |
Total current
assets |
492,230 |
534,393 |
|
|
|
Properties and equipment, net |
53,096 |
52,022 |
Prepayment for acquisition of property |
10,305 |
8,930 |
Equity method investments |
3,489 |
3,611 |
Acquired intangible assets, net |
7,555 |
8,637 |
Goodwill |
35,153 |
35,391 |
Deferred tax assets-non-current |
119 |
113 |
Other long term assets |
2,491 |
2,633 |
|
|
|
TOTAL ASSETS |
604,438 |
645,730 |
|
|
|
Liabilities |
|
|
Current liabilities |
|
|
Accounts payable (including accounts payable
of the consolidated variable interest entities without recourse to
AutoNavi Holdings Limited $4,756 and $3,488 as of March 31, 2014
and December 31, 2013, respectively) |
4,802 |
3,493 |
Deferred revenue (including deferred revenue
of the consolidated variable interest entities without recourse to
AutoNavi Holdings Limited $12,742 and $13,743 as of March 31, 2014
and December 31, 2013, respectively) |
13,677 |
14,440 |
Accrued expenses and other current
liabilities (including accrued expenses and other current
liabilities of the consolidated variable interest entities without
recourse to AutoNavi Holdings Limited $31,593 and $33,263 as of
March 31, 2014 and December 31, 2013, respectively) |
42,570 |
43,058 |
Income tax payable (including income tax
payable of the consolidated variable interest entities without
recourse to AutoNavi Holdings Limited $6,236 and $6,602 as of March
31, 2014 and December 31, 2013, respectively) |
6,236 |
6,438 |
Derivative (including derivative of the
consolidated variable interest entities without recourse to
AutoNavi Holdings Limited nil and nil as of March 31, 2014 and
December 31, 2013, respectively) |
-- |
776 |
|
|
|
Total current
liabilities |
67,285 |
68,205 |
|
|
|
Non-current liabilities |
|
|
Deferred tax liability-non-current (including
deferred tax liability of the consolidated variable interest
entities without recourse to AutoNavi Holdings Limited $506 and
$583 as of March 31, 2014 and December 31, 2013, respectively) |
2,408 |
2,745 |
|
|
|
Total liabilities |
69,693 |
70,950 |
|
|
|
Series A convertible redeemable preferred
shares |
188,453 |
188,453 |
|
|
|
Equity |
|
|
Ordinary shares |
23 |
23 |
Additional paid-in capital |
302,944 |
298,476 |
Treasury stock |
(20,825) |
(27,003) |
Statutory reserve |
13,229 |
13,229 |
Retained earnings |
22,753 |
68,784 |
Accumulated other comprehensive
income |
22,042 |
26,785 |
|
|
|
Total AutoNavi Holdings Limited shareholders'
equity |
340,166 |
380,294 |
Noncontrolling interest |
6,126 |
6,033 |
|
|
|
Total equity |
346,292 |
386,327 |
|
|
|
TOTAL LIABILITIES AND EQUITY |
604,438 |
645,730 |
|
|
AUTONAVI HOLDINGS
LIMITED |
Consolidated Statements
of Comprehensive Income/(Loss) (unaudited) |
(In thousands of U.S. dollars,
except share and per share data) |
|
|
|
|
|
For the three
months ended |
|
March 31, |
March 31, |
December 31, |
|
2014 |
2013 |
2013 |
|
|
|
|
Net revenues |
23,111 |
34,314 |
31,502 |
Cost of revenues |
(12,554) |
(10,372) |
(13,666) |
Gross profit |
10,557 |
23,942 |
17,836 |
|
|
|
|
Operating expenses: |
|
|
|
Research and development |
(24,116) |
(10,552) |
(20,401) |
Selling and marketing |
(17,145) |
(5,822) |
(17,035) |
General and administrative |
(13,797) |
(4,416) |
(13,811) |
Total operating
expenses |
(55,058) |
(20,790) |
(51,247) |
Government subsidies |
35 |
2 |
1,350 |
Operating (loss)/income |
(44,466) |
3,154 |
(32,061) |
|
|
|
|
Interest income |
4,148 |
1,883 |
4,552 |
Foreign exchange (loss)/gains |
(6,156) |
149 |
2,583 |
Other Income |
823 |
47 |
19 |
(Loss)/income before income taxes and
share of net loss of equity method investment |
(45,651) |
5,233 |
(24,907) |
Income tax (expense)/benefit |
(97) |
820 |
(2,942) |
Share of net loss of equity method
investment |
(27) |
(260) |
(160) |
Net (loss)/income |
(45,775) |
5,793 |
(28,009) |
Less: Net income attributable to
noncontrolling interest |
256 |
82 |
197 |
Net (loss)/income attributable to
AutoNavi Holdings Limited shareholders |
(46,031) |
5,711 |
(28,206) |
Less: Net loss attributable to AutoNavi
Holdings Limited Series A preferred shareholder |
-- |
-- |
-- |
Net (loss)/income attributable to
AutoNavi Holdings Limited ordinary shareholders |
(46,031) |
5,711 |
(28,206) |
|
|
|
|
Net (loss)/income per ordinary share |
|
|
|
|
|
|
Basic |
(0.21) |
0.03 |
(0.13) |
Diluted |
(0.21) |
0.03 |
(0.13) |
|
|
|
|
Weighted average number of shares used in
calculating net (loss)/income per ordinary share |
|
|
|
Basic |
218,228,694 |
186,115,424 |
216,857,856 |
Diluted |
218,228,694 |
196,523,224 |
216,857,856 |
|
|
|
|
Other comprehensive (loss)/income, net of
tax |
|
|
|
Foreign currency translation
adjustment |
(4,906) |
706 |
2,252 |
|
|
|
|
Comprehensive
(loss)/income |
(50,681) |
6,499 |
(25,757) |
Less: comprehensive income attributable
to noncontrolling interest |
93 |
100 |
262 |
Comprehensive (loss)/income
attributable to AutoNavi Holdings Limited
shareholders |
(50,774) |
6,399 |
(26,019) |
|
AUTONAVI HOLDINGS
LIMITED |
Reconciliation of
non-GAAP measures to most directly comparable GAAP measures
(unaudited) |
(In thousands of U.S. dollars,
except per ADS data) |
|
|
|
|
|
For the three
months ended |
|
March 31, |
March 31, |
December 31, |
|
2014 |
2013 |
2013 |
|
|
|
|
Total operating expenses |
55,058 |
20,790 |
51,247 |
Share-based compensation |
(12,418) |
(2,574) |
(6,382) |
Non-GAAP total operating expenses |
42,640 |
18,216 |
44,865 |
|
|
|
|
Research and development expenses |
24,116 |
10,552 |
20,401 |
Share-based compensation |
(3,345) |
(945) |
(2,373) |
Non-GAAP research and development
expenses |
20,771 |
9,607 |
18,028 |
|
|
|
|
Selling and marketing expenses |
17,145 |
5,822 |
17,035 |
Share-based compensation |
(1,253) |
(902) |
(389) |
Non-GAAP selling and marketing
expenses |
15,892 |
4,920 |
16,646 |
|
|
|
|
General and administrative expenses |
13,797 |
4,416 |
13,811 |
Share-based compensation |
(7,820) |
(727) |
(3,620) |
Non-GAAP general and administrative
expenses |
5,977 |
3,689 |
10,191 |
|
|
|
|
Operating (loss)/income |
(44,466) |
3,154 |
(32,061) |
Share-based compensation |
12,527 |
2,705 |
6,065 |
Non-GAAP operating (loss)/income |
(31,939) |
5,859 |
(25,996) |
|
|
|
|
Net (loss)/income attributable to AutoNavi
Holdings Limited shareholders |
(46,031) |
5,711 |
(28,206) |
Share-based compensation |
12,527 |
2,705 |
6,065 |
Non-GAAP net (loss)/income attributable to
AutoNavi Holdings Limited shareholders |
(33,504) |
8,416 |
(22,141) |
|
|
|
|
|
|
|
|
|
For the three
months ended March 31, 2014 |
|
GAAP |
Adjustments |
Non-GAAP(a) |
Diluted net loss per ADS attributable to
AutoNavi Holdings Limited shareholders |
(0.84) |
0.23 |
(0.61) |
|
|
|
|
(a) Non-GAAP diluted net loss per
ADS attributable to AutoNavi Holdings Limited shareholders is
computed by dividing non-GAAP net loss attributable to AutoNavi
Holdings Limited shareholders by the weighted average number of
diluted ordinary shares outstanding used in computing the GAAP
diluted net loss per ordinary share attributable to AutoNavi
Holdings Limited shareholders (after adjusting for the ADS to
ordinary share ratio). |
CONTACT: For investor and media inquiries please contact:
In China:
Investor Relations
AutoNavi Holdings Limited
Tel: +86-10-8410-7883
E-mail: ir@autonavi.com
Derek Mitchell
Ogilvy Financial, Beijing
Tel: +86-10-8520-3073
E-mail: amap@ogilvy.com
In the U.S.:
Justin Knapp
Ogilvy Financial, U.S.
Tel: +1-616-551-9714
E-mail: amap@ogilvy.com
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