Tudou Holdings Limited (Nasdaq:TUDO) ("Tudou" or the "Company"), a
leading Internet video company in China, today announced its
unaudited financial results for the first quarter ended March 31,
2012.
First Quarter 2012 Revenue Highlights
- Net revenues increased to RMB140.3 million (US$22.3 million),
up 76.7% year-over-year, exceeding management's prior guidance of
70% to 75% year-over-year growth.
- Online advertising service revenues increased to RMB114.6
million (US$18.2 million), up 63.3% year-over-year.
- Mobile video services revenues increased to RMB13.6 million
(US$2.2 million), up 53.4% year-over-year.
- Other (sub-licensing) revenues increased to RMB12.1 million
(US$1.9 million) compared to RMB0.3 million in the corresponding
period in 2011.
First Quarter 2012 Financial Results
Revenues: Net revenues for the first quarter of
2012 increased by 76.7% to RMB140.3 million (US$22.3 million) from
RMB79.4 million in the corresponding period in 2011.(1) Online
advertising service revenues for the first quarter of 2012
increased by 63.3% to RMB114.6 million (US$18.2 million) from
RMB70.2 million in the corresponding period in 2011. Mobile video
service revenues for the first quarter of 2012 increased by 53.4%
to RMB13.6 million (US$2.2 million) from RMB8.8 million in the
corresponding period in 2011. Other (sub-licensing) revenues
increased to RMB12.1 million (US$1.9 million) from RMB0.3 million
in the corresponding period in 2011.
Cost of Revenues: Cost of revenues
increased by 121.8% to RMB179.6 million (US$28.5 million) from
RMB81.0 million in the corresponding period in 2011. The increase
was primarily attributable to increased Internet bandwidth costs,
content costs and mobile video services costs, partially offset by
a decrease in share-based compensation expenses of RMB13.3
million. Internet bandwidth costs totaled RMB71.5 million
(US$11.4 million), or 51.0% of net revenues, compared to
RMB31.2 million, or 39.3% of net revenues, in the corresponding
period in 2011. The increase in Internet bandwidth costs was
primarily due to increased traffic on the Company's website and its
continued focus on enhancing users' experience. Content costs
totaled RMB90.5 million (US$14.4million), or 64.5% of net revenues,
compared to RMB23.9 million, or 30.2% of net revenues, in the
corresponding period in 2011. Content costs consist of
amortization of premium licensed content, salaries and benefits for
staff and production costs for content produced in-house. The
increase in content costs was primarily due to the increase in
amortization of premium licensed content and content produced
in-house as a result of an increase in the amount of content
purchased and produced. Mobile video services costs totaled RMB6.4
million (US$1.0 million), or 4.5% of net revenues, compared to
RMB5.4 million, or 6.8% of net revenues, in the corresponding
period in 2011. The increase in mobile video services costs was
primarily attributable to the increase in mobile video services
revenues.
Gross Loss: For the first quarter of
2012, gross loss totaled RMB39.4 million (US$6.2 million), compared
to a gross loss of RMB1.6 million in the corresponding period in
2011.
Operating Expenses: Operating expenses for the
first quarter of 2012 were RMB93.3 million (US$14.8 million),
compared to RMB160.3 million in the corresponding period in 2011.
The decrease was primarily due to a decrease in share-based
compensation expenses and allowance for doubtful debt, partially
offset by an increase in sales and marketing expenses.
Net Loss: Net loss for the first quarter of
2012 decreased to RMB134.5 million (US$21.4 million) from a net
loss of RMB336.0 million in the corresponding period in 2011.
Adjusted Net Loss: Adjusted net loss for the
first quarter of 2012, which excluded share-based compensation
expenses, was RMB124.2 million (US$19.7 million), compared to an
adjusted net loss of RMB59.0 million in the corresponding period in
2011, which excluded share-based compensation expenses and fair
value changes in warrant liabilities. See "Non-GAAP Financial
Measures" below.
Recent Developments
In April 2012, Tudou announced a joint collaboration with China
Central Television Sports & Entertainment Ltd. ("CCTV"),
China's state television broadcaster and the exclusive broadcaster
for the London 2012 Olympic Games (the "Olympics") in
China. Together, Tudou and CCTV will broadcast 361° London
Action ("London Action"), CCTV's first theme-based program focused
on the Olympics. In addition to providing exclusive access to
London Action, Tudou will enhance its users' experience by allowing
them to interact, comment and share content with other users.
In March 2012, Youku Inc. (NYSE:YOKU) ("Youku") and the Company
announced that they had signed a definitive agreement for Tudou to
combine with Youku in a 100% stock-for-stock transaction. Under the
agreement, each Class A ordinary share and each Class B ordinary
share of Tudou issued and outstanding immediately prior to the
effective time of the merger will be cancelled in exchange for the
right to receive 7.177 Class A ordinary shares of Youku, and each
American depositary share of Tudou ("Tudou ADSs"), each of which
represents four Tudou Class B ordinary shares, will be cancelled in
exchange for the right to receive 1.595 American depositary shares
of Youku ("Youku ADSs"), each of which represents 18 Youku Class A
ordinary shares. The combination will result in Youku and Tudou
shareholders and ADS holders owning approximately 71.5%
and 28.5% of the combined entity, respectively, immediately
upon completion of the transaction. Upon completion, the combined
entity will be named Youku Tudou Inc. Youku's ADSs will continue to
be listed on the NYSE under the symbol "YOKU".
The combination has been approved by both companies' boards of
directors and is subject to customary closing conditions, including
approvals by Youku and Tudou shareholders. Shareholders of
Youku and Tudou with representatives serving on the companies'
respective boards of directors have committed to vote in favor of
the combination. The combination is expected to close in the
third quarter of 2012.
Conference Call
Due to the pending merger with Youku, Tudou will not hold a
conference call to discuss its financial results.
About Tudou
Tudou Holdings Limited (Nasdaq:TUDO) is a leading Internet video
company in China providing premium licensed content, user generated
content ("UGC") and original in-house produced
content. Founded in 2005, Tudou was the first UGC video
sharing website launched in China. The "Tudou" brand is one of
the most recognized Internet brands in China, and the annual Tudou
Video Festival has become a signature event in the online video
industry. For more information, please visit
http://ir.tudou.com.
Safe Harbor Statement
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 "may," "will," "expects,"
"anticipates," "future," "intends," "plans," "believes," "aims,"
"estimates," "confident," "likely to" and similar 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: the
Company's ability to execute its business strategies, plans and
initiatives; the Company's future business development, results of
operations and financial condition; changes in the Company's
revenues and certain cost or expense items; the Company's
expectations with respect to increased revenue growth and its
ability to sustain profitability; the Company's ability to develop
new services; the Company's ability to attract users and
advertisers and enhance its brand recognition; and the ability of
the online video and advertising industry in China to grow at
rates projected by market data. Any of the foregoing risks may
have a material adverse effect on the Company's business and the
market price of its ADSs. Further information regarding these
and other risks is included in the Company's 20-F filed with the
Securities and Exchange Commission on March 30, 2012. All
information provided in this press release is current as of the
date of the press release, and the Company undertakes no duty to
update such information, except as required under applicable
law.
Non-GAAP Financial Measures
We define adjusted net income (loss), a non-GAAP financial
measure, as net income (loss) excluding share-based compensation
expenses and fair value changes in warrant liabilities. We review
adjusted net income (loss) together with net income (loss) to
obtain a better understanding of our operating performance. We also
believe it is useful supplemental information for investors and
other interested persons to assess our operating performance
without the effect of non-cash fair value changes in warrant
liabilities, which will not likely be recurring factors in our
business in the future, and share-based compensation expenses,
which have been and will continue to be a significant recurring
factor in our business.
We present this non-GAAP financial measure because this is used
by our management to evaluate our operating performance. We believe
this non-GAAP financial measure provides useful information to
investors and other interested persons because by having access to
such information they will have the same data we use to assess our
operating performance, and because such information allows them to
understand and evaluate our consolidated results of operations in
the same manner as our management and to make period-over-period
comparisons of our financial results. However, the use of adjusted
net income (loss) has material limitations as an analytical tool.
One of the limitations of using non-GAAP adjusted net income (loss)
is that it does not include all items that impact our net income
(loss) for the period. In addition, because adjusted net income
(loss) may not be calculated in the same manner by all companies,
it may not be comparable to similarly titled measures used by other
companies. In light of the foregoing limitations, you should not
consider adjusted net income (loss) in isolation from or as an
alternative to net income (loss) prepared in accordance with U.S.
GAAP. We encourage investors and other interested persons to review
our financial information in its entirety and not rely on a single
financial measure.
Exchange Rate
This press release contains translations of certain Renminbi
amounts into US dollars at specified rates solely for the
convenience of readers. Unless otherwise noted, all translations
from Renminbi to US dollars for the quarter ended March 31, 2012
were made at a rate of RMB6.2975 to US$1.00, the noon buying rate
in effect on March 30, 2012 as set forth in the weekly H.10
statistical release of the U.S. Federal Reserve Board. No
representation is made that any Renminbi or U.S. dollar amounts
could have been, or could be, converted into U.S. dollars or
Renminbi, as the case may be, at such rate.
(1) The Company records revenues on a net basis and
net revenues are presented net of third party ad agency fees and
sales tax as a reduction of revenues. For the first quarter of
2012, third party advertisement agency fees were RMB25.1 million
(US$4.0 million) and sales tax was RMB5.6 million (US$0.9million),
compared to third party advertisement agency fees of RMB15.3
million and sales tax of RMB12.0 million in the corresponding
period in 2011.
Tudou Holdings Limited |
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Consolidated Balance Sheet
Information |
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(Amounts expressed in RMB, unless
otherwise stated) |
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|
|
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|
|
|
Mar 31,
2011 |
Dec 31,
2011 |
Mar 31,
2012 |
Mar 31,
2012 |
|
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
|
RMB |
RMB |
RMB |
US$ |
|
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|
|
Assets |
|
|
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|
|
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Current assets: |
|
|
|
|
Cash and cash equivalents |
208,969,448 |
872,000,453 |
695,746,338 |
110,479,768 |
Restricted cash |
65,564,000 |
96,786,719 |
96,685,338 |
15,352,971 |
Accounts receivable, net |
254,135,465 |
239,804,186 |
256,602,540 |
40,746,731 |
Prepayments and other current assets |
25,174,620 |
17,888,737 |
15,347,958 |
2,437,151 |
Premium content licensed |
9,368,362 |
64,461,085 |
47,551,257 |
7,550,815 |
Content produced |
3,497,227 |
8,214,506 |
695,922 |
110,508 |
Total current assets |
566,709,122 |
1,299,155,686 |
1,112,629,353 |
176,677,944 |
Equipment |
46,711,980 |
88,787,903 |
93,393,641 |
14,830,272 |
Intangible assets |
4,282,842 |
6,183,164 |
5,973,504 |
948,552 |
Other assets |
4,318,269 |
4,211,498 |
4,175,908 |
663,106 |
Other long-term receivables |
-- |
10,000,000 |
10,000,000 |
1,587,932 |
Prepayment for premium content licensed |
-- |
142,750,301 |
166,091,005 |
26,374,118 |
Premium content licensed |
49,531,347 |
141,403,738 |
200,466,206 |
31,832,665 |
Total assets |
671,553,560 |
1,692,492,290 |
1,592,729,617 |
252,914,589 |
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Liabilities and shareholders'
equity |
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Current liabilities: |
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|
Accounts payable |
77,800,676 |
126,643,349 |
163,179,211 |
25,911,745 |
Taxes payable |
22,450,667 |
37,640,665 |
28,491,533 |
4,524,261 |
Accrued liabilities and other payables |
154,501,083 |
230,764,509 |
225,563,977 |
35,818,019 |
Short-term loan |
61,243,510 |
83,343,510 |
83,343,510 |
13,234,380 |
Share-based compensation liability |
240,769,592 |
-- |
-- |
-- |
Total current
liabilities |
556,765,528 |
478,392,033 |
500,578,231 |
79,488,405 |
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Warrant liabilities |
324,424,702 |
-- |
-- |
-- |
Total liabilities |
881,190,230 |
478,392,033 |
500,578,231 |
79,488,405 |
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Series A redeemable convertible preferred
shares |
7,512,241 |
-- |
-- |
-- |
Series B redeemable convertible preferred
shares |
55,729,302 |
-- |
-- |
-- |
Series C redeemable convertible preferred
shares |
124,571,600 |
-- |
-- |
-- |
Series D redeemable convertible preferred
shares |
372,403,520 |
-- |
-- |
-- |
Series E redeemable convertible preferred
shares |
361,558,129 |
-- |
-- |
-- |
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Shareholders' equity |
|
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|
|
Ordinary shares |
9,700 |
74,608 |
74,907 |
11,895 |
Additional paid-in capital |
11,054,330 |
2,541,869,642 |
2,554,379,616 |
405,618,041 |
Accumulated deficit |
(1,142,475,492) |
(1,327,843,993) |
(1,462,303,137) |
(232,203,752) |
Total shareholders'
equity |
(1,131,411,462) |
1,214,100,257 |
1,092,151,386 |
173,426,184 |
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|
Total liabilities and shareholders'
equity |
671,553,560 |
1,692,492,290 |
1,592,729,617 |
252,914,589 |
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Tudou Holdings Limited |
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Consolidated Statement of Operations
Information |
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(Amounts expressed in RMB, unless
otherwise stated) |
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For the Three
Months Ended |
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Mar 31, 2011 |
Dec
31, 2011 |
Mar
31, 2012 |
Mar
31, 2012 |
|
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
|
RMB |
RMB |
RMB |
US$ |
|
|
|
|
|
Revenues |
91,418,768 |
180,038,169 |
145,856,999 |
23,161,095 |
Less: Sales taxes |
(12,041,797) |
(13,549,101) |
(5,575,694) |
(885,382) |
Net revenues |
79,376,971 |
166,489,068 |
140,281,305 |
22,275,713 |
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Cost of revenues |
(80,995,830) |
(160,143,362) |
(179,632,865) |
(28,524,472) |
Gross profit / (loss) |
(1,618,859) |
6,345,706 |
(39,351,560) |
(6,248,759) |
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Operating expenses: |
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|
Sales and marketing expenses |
(76,383,930) |
(105,373,197) |
(68,808,006) |
(10,926,242) |
General and administrative expenses |
(83,887,554) |
(45,066,299) |
(24,527,517) |
(3,894,802) |
Total operating
expenses |
(160,271,484) |
(150,439,496) |
(93,335,523) |
(14,821,044) |
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Loss from operations |
(161,890,343) |
(144,093,790) |
(132,687,083) |
(21,069,803) |
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|
Finance income |
76,657 |
223,034 |
639,483 |
101,546 |
Finance expense |
(867,162) |
(1,459,818) |
(1,517,576) |
(240,981) |
Other expense, net |
-- |
(13,363) |
-- |
-- |
Foreign exchange loss |
(2,914,383) |
(3,513,029) |
(893,968) |
(141,956) |
Fair value change in warrant liabilities |
(170,385,091) |
-- |
-- |
-- |
Loss before income
taxes |
(335,980,322) |
(148,856,966) |
(134,459,144) |
(21,351,194) |
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Income taxes |
-- |
-- |
-- |
-- |
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Net loss |
(335,980,322) |
(148,856,966) |
(134,459,144) |
(21,351,194) |
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Accretion and effect of foreign exchange
movement on Series A Preferred Shares |
(130,985) |
-- |
-- |
-- |
Effect of foreign exchange movement on Series
B Preferred Shares |
563,549 |
-- |
-- |
-- |
Effect of foreign exchange movement on Series
C Preferred Shares |
1,259,700 |
-- |
-- |
-- |
Effect of foreign exchange movement on Series
D Preferred Shares |
3,765,840 |
-- |
-- |
-- |
Accretion and effect of foreign exchange
movement on Series E Preferred Shares |
(10,156,000) |
-- |
-- |
-- |
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Net loss attributable to ordinary
shareholders |
(340,678,218) |
(148,856,966) |
(134,459,144) |
(21,351,194) |
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Loss per ordinary share |
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- Basic and diluted |
(28.39) |
(1.31) |
(1.19) |
(0.19) |
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Loss per ADS |
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- Basic and diluted |
(113.56) |
(5.25) |
(4.74) |
(0.75) |
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Weighted
average number of ordinary shares used in computing loss per
share |
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- Basic and diluted |
12,000,000 |
113,425,562 |
113,431,544 |
113,431,544 |
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Share-based compensation
was allocated in operating expenses as follows: |
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|
|
Cost of revenues |
14,718,004 |
1,110,057 |
1,379,365 |
219,033 |
Sales and marketing
expenses |
35,048,658 |
4,531,878 |
5,404,764 |
858,240 |
General and administrative
expenses |
56,849,582 |
2,646,953 |
3,430,954 |
544,812 |
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Tudou Holdings
Limited |
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Adjusted Net Loss —
Non-GAAP Reconciliation |
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(Amounts expressed in
RMB, unless otherwise stated) |
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For the Three
Months Ended |
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Mar 31,
2011 |
Dec 31,
2011 |
Mar 31,
2012 |
Mar 31,
2012 |
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|
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
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RMB |
RMB |
RMB |
US$ |
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Net loss |
(335,980,322) |
(148,856,966) |
(134,459,144) |
(21,351,194) |
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Add back: |
Share-based compensation expenses |
106,616,244 |
8,288,888 |
10,215,083 |
1,622,085 |
|
Fair value changes in warrant
liabilities |
170,385,091 |
-- |
-- |
-- |
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Adjusted net loss |
|
(58,978,987) |
(140,568,079) |
(124,244,061) |
(19,729,109) |
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Tudou Holdings Limited |
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Consolidated Statement of Cash
Flows |
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(Amounts expressed in RMB, unless
otherwise stated) |
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For the Three
Months Ended |
|
Mar 31,
2011 |
Dec 31,
2011 |
Mar 31,
2012 |
Mar 31,
2012 |
|
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
|
RMB |
RMB |
RMB |
US$ |
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Cash flows from operating
activities: |
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|
Net loss |
(335,980,322) |
(148,856,966) |
(134,459,144) |
(21,351,194) |
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities: |
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|
Depreciation of equipment |
6,133,281 |
8,724,857 |
9,637,685 |
1,530,399 |
Amortization of intangible assets |
7,850 |
182,619 |
209,660 |
33,293 |
Amortization of other assets |
35,590 |
35,591 |
35,590 |
5,651 |
Provision for doubtful accounts |
12,283,075 |
17,390,053 |
2,643,383 |
419,751 |
Amortization of the premium content
licensed |
10,015,907 |
45,833,577 |
50,863,964 |
8,076,850 |
Amortization of the content produced |
3,065,273 |
750,000 |
12,728,947 |
2,021,270 |
Share-based compensation |
106,616,244 |
8,288,888 |
10,215,083 |
1,622,085 |
Fair value changes in warrant
liabilities |
170,385,091 |
-- |
-- |
-- |
Foreign exchange loss |
2,914,383 |
3,513,029 |
893,968 |
141,956 |
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Changes in operating assets and
liabilities: |
|
|
|
|
Accounts receivables |
(23,385,191) |
36,729,124 |
(19,441,737) |
(3,087,215) |
Prepayments and other current assets |
5,143,118 |
(6,003,888) |
4,835,969 |
767,919 |
Content produced |
-- |
(4,996,183) |
(5,210,362) |
(827,370) |
Accounts payable |
828,310 |
22,092,776 |
6,636,811 |
1,053,880 |
Tax payable |
1,291,995 |
5,799,140 |
(9,149,132) |
(1,452,820) |
Other payables and accruals |
18,005,320 |
43,924,185 |
(5,200,532) |
(825,809) |
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|
Net cash provided by/(used in)
operating activities |
(22,640,076) |
33,406,802 |
(74,759,847) |
(11,871,354) |
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|
Cash flows from investing
activities: |
|
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|
|
Purchase of equipment |
(3,379,407) |
(22,986,538) |
(12,263,333) |
(1,947,334) |
Purchase of intangible assets |
(2,364,278) |
(1,266,785) |
-- |
-- |
Advance payment for premium content
licensed |
-- |
(61,966,030) |
(23,340,704) |
(3,706,344) |
Cash paid for premium content licensed |
(28,570,237) |
(137,227,357) |
(65,097,644) |
(10,337,061) |
Cash received from maturity of short-term
investment |
5,837,246 |
-- |
-- |
-- |
Net decrease/(increase) in restricted
cash |
663,000 |
(2,347,968) |
101,381 |
16,099 |
Net cash used in investing
activities |
(27,813,676) |
(225,794,678) |
(100,600,300) |
(15,974,640) |
|
|
|
|
|
Cash flows from financing
activities: |
|
|
|
|
Cash received from short-term loan |
-- |
20,543,510 |
-- |
-- |
Cash paid for the repayment of short-term
loan |
-- |
(20,543,510) |
-- |
-- |
Cash paid for initial public offering
cost |
(813,192) |
(6,420,652) |
-- |
-- |
Net cash used in financing
activities |
(813,192) |
(6,420,652) |
-- |
-- |
|
|
|
|
|
Net decrease in cash and cash
equivalents |
(51,266,944) |
(198,808,528) |
(175,360,147) |
(27,845,994) |
|
|
|
|
|
Cash and cash equivalents at beginning of
period |
263,150,775 |
1,074,322,010 |
872,000,453 |
138,467,718 |
Effect of foreign exchange rate change on
cash |
(2,914,383) |
(3,513,029) |
(893,968) |
(141,956) |
Cash and cash equivalents at end of
period |
208,969,448 |
872,000,453 |
695,746,338 |
110,479,768 |
|
|
|
|
|
Supplementary Disclosure of Cash Flow
Information |
|
|
|
|
Cash paid for interest |
821,295 |
1,492,948 |
1,519,720 |
241,321 |
|
|
|
|
|
Supplementary Disclosure of Non-cash
Investing and Financial Activities |
|
|
|
|
Unpaid deferred expenses/Payables related to
the initial public offering |
11,027,546 |
-- |
-- |
-- |
Payables related to purchase of
equipment |
11,199,060 |
11,743,300 |
13,723,390 |
2,179,181 |
Payables related to premium content
licensed |
17,730,286 |
26,377,055 |
54,296,015 |
8,621,836 |
Payables related to purchase of PRC
advertising license qualification right |
300,124 |
-- |
-- |
|
CONTACT: Investor Relations Contact:
Michael S. Fu
Director, Investor Relations
Tudou Holdings Limited
Tel: (+86) 21-5170-2355
Email: mfu@tudou.com
Jeremy Peruski
ICR, Inc.
Tel: +1 (646) 405-4884
Email: IR@tudou.com
SOURCE: Tudou
Tudou Holdings Limited ADS (MM) (NASDAQ:TUDO)
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