BEIJING, May 23, 2011 /PRNewswire-Asia-FirstCall/ -- China
Mass Media Corp. ("China Mass Media" or the "Company") (NYSE: CMM),
a leading television advertising company in China, today announced its unaudited financial
results for the first quarter ended March
31, 2011.
First Quarter 2011 Highlights:
- Total net revenues were RMB50.9
million (US$7.8 million), a
decrease of 9.1% from the first quarter of 2010 and a decrease of
32.8% from the fourth quarter of 2010.
- Operating income was RMB13.1
million (US$2.0 million), a
decrease of 5.7% from the first quarter of 2010 and a decrease of
53.7% from the fourth quarter of 2010.
- Net income was RMB8.3 million
(US$1.3 million), a decrease of 17.9%
from the first quarter of 2010 and a decrease of 56.3% from the
fourth quarter of 2010.
- Net cash inflows from operating activities were RMB34.8 million (US$5.3
million), a decrease of 13.7% from net cash inflows from
operating activities of RMB40.3
million in the first quarter of 2010 and an increase of
34.2% from the fourth quarter of 2010.
Mr. Shengcheng Wang, Chairman and Chief Executive Officer of
China Mass Media, commented, "The first quarter of 2011 was a
challenging time as we entered the seasonally weak period of the
year. In our advertising agency service business, in order to
secure long-term commitments from our clients in the face of
intense price competition in the advertising market, we initiated a
presale promotional campaign last November to attract longer-term
contracts by offering sizable discounts. These contracts, which are
with both advertising agencies and direct advertisers and range in
term from three to six months, will serve as a solid foundation of
our revenues in 2011. Due to these promotional activities, there
was a significant decrease in the sales price of certain products
in the first quarter 2011 compared with the first and fourth
quarters of 2010. As a result, revenues from advertising agency
services declined despite the increase in our utilization rate. The
sequential decline was also primarily because the fourth quarter is
traditionally the peak season in our business."
"In an effort to diversify our business, towards the end of
2010, we entered into the outdoor advertising business by
partnering with the outdoor media company Goto Media. Goto Media
operates 80 large LED advertising screens and 1,000 advertising
light boxes in 17 high-speed railway stations in China, including Beijing South Station,
Shanghai Hongqiao Station, Guangzhou South Station and Tianjin
Station. We focus on the sale of advertisements on these LED
screens. We believe outdoor LED screens allow advertisements to
reach consumers with similar content at a much lower price than
traditional television ads. We also believe there are synergies
between the outdoor advertising business and television advertising
business and many of our existing clients find our services for
both appealing. We have formed a dedicated sales team to focus on
the sales and marketing of such outdoor services. In the first
quarter of 2011, revenues from the sales of outdoor media totaled
approximately RMB230,000."
"Our production and sponsorship services business continues to
show solid growth. During the first quarter of 2011, we produced a
number of commercial and print advertisements for clients such as
Suning Appliance, Ping An Insurance of China and Yunnan Baiyao."
"Our arrangement with CCTV for the 'Guang Er Gao Zhi' program, a
30-second daily public service announcement that is broadcast twice
a day on CCTV-1 and CCTV-2, will not be renewed once it expires on
June 30, 2011 due to programming
changes. This will have a negative impact on our top and bottom
line in subsequent periods."
"Looking forward, we believe content production will become an
important component of our strategy as we attempt to reorient our
business towards growth. In 2011, we plan to produce at least one
TV entertainment program and one TV drama series. We are also in
discussions with a satellite TV network for the production and
broadcast of a TV entertainment program in exchange for advertising
time slots. We believe that by providing television networks with
high quality content, we will be able to gain access to such
advertising resources. We will release further details in the
coming months."
First Quarter 2011 Financial Results
Revenues
Revenues from advertising agency services were
RMB46.7 million (US$7.1 million) in the first quarter of 2011, a
decrease of 15.8% from RMB55.5
million in the first quarter of 2010, and a decrease of
32.8% from RMB69.4 million in the
fourth quarter of 2010. Given the intense price competition in the
advertising market, in order to secure a full-year budget from
clients and remain competitive in the market, the Company offered
sizable discounts to certain clients. Due to these promotional
activities, there was a significant decrease in the Company's
average sales price in the first quarter 2011 compared with the
first and fourth quarters of 2010. As a result, revenues from
advertising agency services declined despite the increase in our
the Company's utilization rate. The sequential decline was also
primarily because the fourth quarter is the traditional peak season
for the Company's business.
Revenues from production and sponsorship services were
RMB7.2 million (US$1.1 million) in the first quarter of 2011, an
increase of 127.9% from RMB3.1
million in the first quarter of 2010, and a decrease of
37.5% from RMB11.4 million in the
fourth quarter of 2010. The Company's efforts to both improve
production capabilities and proactively source new clients helped
support momentum in the Company's production and sponsorship
services business, as compared with the first quarter of 2010.
During the first quarter of 2011, the Company successfully produced
a number of commercial and print advertisements for clients such as
Suning Appliance, Ping An Insurance of China and Yunnan Baiyao. The decrease in
revenues from the fourth quarter of 2010 was mainly because of the
general higher level of production activity and the payment of two
advertisements produced for CCTV in 2008.
Operating costs and expenses
Cost of revenues was RMB27.1
million (US$4.1 million) in
the first quarter of 2011, a decrease of 7.7% from RMB29.3 million in the first quarter of 2010 and
a decrease of 19.5% from RMB33.7
million in the fourth quarter of 2010. The decrease in cost
of revenues compared with the first and fourth quarters of 2010 was
mainly because time slots available for sale on CCTV-4 decreased
from 90 seconds to 60 seconds during the quarter.
Sales and marketing expenses were RMB4.4 million (US$0.7
million) in the first quarter of 2011, a decrease of 16.0%
from RMB5.3 million in the first
quarter of 2010 and an increase of 7.6% from RMB4.1 million in the fourth quarter of 2010. The
decrease from the first quarter of 2010 was due to lower sales
commissions paid to the sales team following the decline in sales
performance during the first quarter in 2011. The increase compared
with the fourth quarter of 2010 was mainly because management
increased the basic salaries of the sales team in order to attract
more talented people.
General and administrative expenses were RMB6.2 million (US$1.0
million) in the first quarter of 2011, a decrease of 16.0%
from RMB7.4 million in the first
quarter of 2010 and a decrease of 35.1% from RMB9.6 million in the fourth quarter of 2010. The
decrease was mainly due to lower professional service fees in the
first quarter of 2011.
Other expenses included an exchange loss of RMB2.5 million (US$0.4
million) in the first quarter of 2011, which compares with
an exchange loss of RMB2.8 million
(US$ 0.4 million) in the fourth
quarter of 2010 and RMB0.1 million
(US$0.01 million) in the first
quarter of 2010. The Company's functional currency, the Renminbi,
continued to appreciate against the U.S. Dollar (USD), while the
Company maintained significant USD deposits.
Income tax expense was RMB4.9
million (US$0.7 million) in
the first quarter of 2011, an increase of 4.1% from RMB4.7 million in the first quarter of 2010, and
a decrease of 43.5% from RMB8.6
million in the fourth quarter of 2010. The Company's
effective tax rate was 31.6%, 31.3% and 37.0% for the three months
ended March 31, 2010, December 31, 2010 and March 31, 2011, respectively. The effective tax
rate for the first quarter of 2011 was higher than the PRC
statutory tax rate mainly due to the exchange losses of
RMB2.5 million incurred by the
offshore companies that were not deductible from PRC tax.
Operating income, as a result of the foregoing factors,
was RMB13.1 million (US$2.0 million) in the first quarter of 2011, a
decrease of 5.7% from RMB13.9 million
in the first quarter of 2010 and a decrease of 53.7% from
RMB28.4 million in the fourth quarter
of 2010. The company's operating margin was 24.9%, 37.5% and 25.8%
for the three months ended March 31,
2010, December 31, 2010 and
March 31, 2011, respectively.
Net income was RMB8.3
million (US$1.3 million) in
the first quarter of 2011, a decrease of 17.9% from net income of
RMB10.1 million in the first quarter
of 2010 and a decrease of 56.3% from RMB19.0
million in net income in the fourth quarter of 2010. The
Company's net margin was 18.1%, 25.1% and 16.3% for the three
months ended March 31, 2010,
December 31, 2010 and March 31, 2011, respectively.
Basic and diluted earnings per ADS for the first quarter of 2011
were RMB0.32 (US$0.05), compared with basic earnings per ADS
of RMB0.38 for the first quarter of
2010 and RMB0.72 for the fourth
quarter of 2010.
Each ADS represents 30 ordinary shares.
Business Outlook
The Company currently expects to generate total net revenues of
between RMB48 million ($7.3 million) to RMB53 million ($8.1 million) for the second quarter of 2011,
which represents a potential decrease of 7.0% to 15.8% compared
with the second quarter of 2010 due to continued pricing
competition in the market. This forecast reflects the Company's
current and preliminary estimate, which is subject to change.
Conference Call
China Mass Media will host a conference call and live webcast at
8:00 a.m. Eastern Time (EDT) on
Monday, May 23, 2011(8:00 p.m. Beijing time on May 23,
2011).
The dial-in details for the live conference call are as
follows:
- U.S. Toll Number:
|
+1 617 597
5346
|
|
- U.S. Toll Free
Number:
|
+1 866 362
4829
|
|
- HK. Toll Free
Number:
|
800 96
3844
|
|
- South China Toll Free Number/
China Telecom:
|
10 800 130
0399
|
|
- North China Toll Free Number/
China Telecom:
|
10 800 152
1490
|
|
- South China Toll Free Number/
China Netcom:
|
10 800 852
1490
|
|
Passcode: CMM
|
|
|
|
|
A live webcast of the conference call will be available on the
investor relations section of the Company's website at:
http://www.chinammia.com.
A telephone replay of the call will be available after the
conclusion of the conference call. The dial-in details for the
replay are as follows:
- U.S. Toll Free
Number:
|
+1 888 286 8010
|
|
- International dial-in
number:
|
+1 617 801 6888
|
|
Passcode:
56565421
|
|
|
|
|
Non-GAAP Disclosure
In addition to the unaudited consolidated financial information
presented in accordance with US GAAP, management uses a non-GAAP
measure of net income excluding non-cash share-based compensation.
Company management believes excluding the share-based compensation
expenses from non-GAAP financial measures is useful for the
investors' understanding of overall current financial performance.
Nevertheless, the limitation of using non-GAAP financial measures
excluding share-based compensation expenses is that share-based
compensation expenses have been and will continue to be a
significant recurring expense in the Company's business.
The presentation of the 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 US
GAAP. For more information on these non-GAAP financial measures,
please see the tables captioned "Reconciliations of non-GAAP
results of operations measures to the nearest comparable GAAP
measures" set forth below, which shall be read in conjunction with
the preceding financial information presented in accordance with US
GAAP.
Safe Harbor Statement
This document contains forward-looking statements within the
meaning of Section 21E of the Securities Exchange Act of 1934, as
amended, and Section 27A of the Securities Act of 1933, as amended,
and the U.S. Private Securities Litigation Reform Act of 1995.
These statements include, but are not limited to, statements about
the Company's plans, objectives, expectations, strategies,
intentions, or other characterizations of future events or
circumstances and are generally identified by the words
anticipates, believes, could, estimates, expects, intends, may,
plans, seeks, would, and similar expressions.
A number of factors could cause the Company's actual results,
performance, achievements or industry results to be materially
different from any future results, performance or achievements
expressed or implied by these forward-looking statements.
Additional information concerning factors that could cause actual
results to materially differ from those in the forward-looking
statements is contained in the Securities and Exchange Commission
filings of the Company. China Mass Media does not undertake any
obligation to update any forward-looking statements, except as
required under applicable law.
About China Mass Media Corp.
As a leading television advertising company in China, the Company provides a full range of
advertising services, including advertising agency services,
creative production services, public service announcement
sponsorship services, and other value added services. The Company
currently offers approximately 474 minutes of advertising time
slots per day on CCTV Channels 1, 2, 4, E and F. CCTV is the
largest television network in China. The Company has produced over 500
advertisements and has won a number of prestigious awards in
China and across the world,
including the "Gold World Medal" at The New York Festivals®
International Television & Film Awards.
For more information, please visit http://www.chinammia.com.
For further
information, contact:
|
|
|
|
China Mass Media
Corp.
|
|
Julie Sun
|
|
CFO
|
|
6/F, Tower B, Corporate
Square,
|
|
35 Finance Street Xicheng
District
|
|
Beijing, 100033
|
|
P. R. China
|
|
Phone:
+86-10-8809-1050
|
|
Email: juliesun@chinammia.com
|
|
|
|
Christensen
|
|
Tip Fleming
|
|
Phone:
+852-2117-0861
|
|
Email: tfleming@christensenir.com
|
|
|
|
Teal Willingham
|
|
Phone:
+852-9827-3632
|
|
Email: twillingham@christensenir.com
|
|
|
CHINA MASS
MEDIA CORP.
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
|
|
|
THREE MONTHS ENDED,
|
|
|
Mar 31,
2010
|
|
Dec 31,
2010
|
|
Mar 31,
2011
|
|
Mar 31,
2011
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
Advertising agency
services
|
55,466,324
|
|
69,441,672
|
|
46,699,856
|
|
7,131,600
|
|
Advertisement production
and
sponsorship services
|
3,141,023
|
|
11,445,226
|
|
7,157,528
|
|
1,093,036
|
|
Total Revenue
|
58,607,347
|
|
80,886,898
|
|
53,857,384
|
|
8,224,636
|
|
Less: Business
tax
|
(2,626,585)
|
|
(5,102,111)
|
|
(2,955,722)
|
|
(451,372)
|
|
|
|
|
|
|
|
|
|
|
Total net
revenues
|
55,980,762
|
|
75,784,787
|
|
50,901,662
|
|
7,773,264
|
|
|
|
|
|
|
|
|
|
|
Operating costs and
expenses:
|
|
|
|
|
|
|
|
|
Cost of revenues
|
(29,340,334)
|
|
(33,652,251)
|
|
(27,085,297)
|
|
(4,136,233)
|
|
Sales and marketing
expenses
|
(5,293,944)
|
|
(4,131,716)
|
|
(4,446,447)
|
|
(679,023)
|
|
General and administrative
expense
|
(7,409,378)
|
|
(9,588,120)
|
|
(6,225,352)
|
|
(950,682)
|
|
Total operating costs and
expenses
|
(42,043,656)
|
|
(47,372,087)
|
|
(37,757,096)
|
|
(5,765,938)
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
13,937,106
|
|
28,412,700
|
|
13,144,566
|
|
2,007,326
|
|
|
|
|
|
|
|
|
|
|
Interest and investment
income
|
858,166
|
|
1,646,857
|
|
2,481,784
|
|
378,997
|
|
Other income/(expense),
net
|
6,246
|
|
(2,413,292)
|
|
(2,443,265)
|
|
(373,114)
|
|
|
|
|
|
|
|
|
|
|
Income before
tax
|
14,801,518
|
|
27,646,265
|
|
13,183,085
|
|
2,013,209
|
|
Income tax
expense
|
(4,690,509)
|
|
(8,641,741)
|
|
(4,883,735)
|
|
(745,802)
|
|
Net income
|
10,111,009
|
|
19,004,524
|
|
8,299,350
|
|
1,267,407
|
|
|
|
|
|
|
|
|
|
|
Net income available to
ordinary shareholders
|
10,111,009
|
|
19,004,524
|
|
8,299,350
|
|
1,267,407
|
|
|
|
|
|
|
|
|
|
|
Earnings per ordinary
shares, basic
|
0.013
|
|
0.024
|
|
0.0108
|
|
0.0016
|
|
Earnings per ordinary
share, diluted
|
0.013
|
|
0.024
|
|
0.0107
|
|
0.0016
|
|
Earnings per ADS,
basic
|
0.38
|
|
0.73
|
|
0.3234
|
|
0.0494
|
|
Earnings per ADS,
diluted
|
0.38
|
|
0.72
|
|
0.3220
|
|
0.0492
|
|
|
|
|
|
|
|
|
|
|
Shares used in
calculating
earnings per
ordinary share,
basic
|
788,012,500
|
|
784,690,106
|
|
769,992,300
|
|
769,992,300
|
|
Shares used in
calculating
earnings per
ordinary shares,
diluted
|
789,873,237
|
|
788,060,137
|
|
773,240,405
|
|
773,240,405
|
|
Shares used in
calculating
earnings per
ADS, basic
|
26,267,083
|
|
26,156,337
|
|
25,666,410
|
|
25,666,410
|
|
Shares used in
calculating
earnings per
ADS, diluted
|
26,329,108
|
|
26,268,671
|
|
25,774,680
|
|
25,774,680
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CHINA MASS
MEDIA CORP.
UNAUDITED
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
|
|
Dec 31,
2010
|
|
Mar 31,
2011
|
|
Mar 31,
2011
|
|
|
|
RMB
|
|
RMB
|
|
US$
|
|
Assets
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
544,427,828
|
|
321,951,677
|
|
49,165,688
|
|
Restricted
cash
|
|
10,000,000
|
|
10,000,000
|
|
1,527,114
|
|
Short-term
investments
|
|
150,000,000
|
|
400,000,000
|
|
61,084,556
|
|
Notes
receivable
|
|
5,892,690
|
|
8,626,094
|
|
1,317,303
|
|
Accounts
receivable, net
|
|
991,024
|
|
5,092,876
|
|
777,740
|
|
Prepaid expenses
and other current assets
|
|
41,794,343
|
|
54,330,775
|
|
8,296,928
|
|
Total
current assets
|
|
753,105,885
|
|
800,001,422
|
|
122,169,329
|
|
Non-current
assets
|
|
|
|
|
|
|
|
Property and
equipment, net
|
|
58,602,500
|
|
57,680,835
|
|
8,808,521
|
|
Total
non-current assets
|
|
58,602,500
|
|
57,680,835
|
|
8,808,521
|
|
Total
assets
|
|
811,708,385
|
|
857,682,257
|
|
130,977,850
|
|
|
|
|
|
|
|
|
|
Liabilities
and Shareholder's
Equity
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
Accounts
payable
|
|
156,494,604
|
|
200,646,464
|
|
30,641,001
|
|
Customer
advances
|
|
39,311,493
|
|
39,328,017
|
|
6,005,836
|
|
Accrued expenses
and other current liabilities
|
|
23,848,004
|
|
20,945,273
|
|
3,198,581
|
|
Taxes
payable
|
|
30,194,919
|
|
31,594,619
|
|
4,824,858
|
|
Amount due to
related parties
|
|
53,237,048
|
|
53,237,048
|
|
8,129,904
|
|
Total
current liabilities
|
|
303,086,068
|
|
345,751,421
|
|
52,800,180
|
|
Total
Liabilities
|
|
303,086,068
|
|
345,751,421
|
|
52,800,180
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders'
equity
|
|
|
|
|
|
|
|
Ordinary
shares ($0.001 par value;
3,000,000,000 shares authorized;
788,332,360
shares issued and outstanding as
of December
31, 2010; 775,388,020 shares
issued and
outstanding as of March 31,
2011)
|
|
5,381,321
|
|
5,296,452
|
|
808,829
|
|
Additional paid-in
capital
|
|
361,736,018
|
|
353,021,804
|
|
53,910,451
|
|
Statutory
reserves
|
|
25,000,000
|
|
25,000,000
|
|
3,817,785
|
|
Retained
earnings
|
|
126,034,102
|
|
134,333,452
|
|
20,514,248
|
|
Repurchased shares
to be cancelled, at cost
(13,860,000 ordinary shares as
of December
31, 2010 and 9,723,000 ordinary
shares as of
March 31, 2011)
|
|
(9,529,124)
|
|
(5,720,872)
|
|
(873,643)
|
|
Total
Shareholders' Equity
|
|
508,622,317
|
|
511,930,836
|
|
78,177,670
|
|
|
|
|
|
|
|
|
|
Total
Liabilities and Shareholder's Equity
|
|
811,708,385
|
|
857,682,257
|
|
130,977,850
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CHINA MASS
MEDIA CORP.
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
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THREE MONTHS ENDED
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Mar 31,
2010
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Dec 31,
2010
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Mar 31,
2011
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Mar 31,
2011
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RMB
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RMB
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RMB
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US$
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Cash flows
from operating activities:
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Net income
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10,111,009
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19,004,524
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8,299,351
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1,267,405
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Adjustments to reconcile
net income to net cash provided by operating activities
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Depreciation
expense
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809,997
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998,519
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1,000,185
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152,740
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Interest
income
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(426,230)
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(1,352,712)
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(2,102,411)
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(321,062)
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Exchange (gain)/
loss
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84,690
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2,828,718
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2,485,718
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379,597
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Share-based
compensation
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519,777
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185,129
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361,253
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55,167
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Disposal of
property and equipment
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12,263
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(294,175)
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(46,406)
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(7,087)
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Changes in assets and liabilities:
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Notes
receivable
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(2,327,289)
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(5,892,690)
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(2,733,405)
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(417,422)
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Accounts
receivable, net
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(9,421,011)
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3,616,518
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(4,101,852)
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(626,400)
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Prepaid expense and
other current assets
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6,978,143
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10,821,091
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(6,298,388)
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(961,836)
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Accounts
payable
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32,393,192
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30,821,414
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44,151,860
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6,742,492
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Customer
advances
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4,681,626
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1,820,668
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16,524
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2,523
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Accrued expenses and
other current liabilities
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(944,176)
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3,971,639
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(2,902,731)
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(443,277)
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Taxes
payable
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(2,085,359)
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6,490,390
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(3,379,180)
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(516,039)
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Amount due to
related parties
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(123,360)
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(47,129,920)
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-
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-
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Net cash
provided by operating activities
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40,263,272
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25,889,113
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34,750,518
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5,306,801
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Cash flows
from investing activities:
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Net proceeds from
redemption / (purchase) of short-term investments
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(120,000,000)
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140,000,000
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(250,000,000)
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(38,177,848)
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Increase in restricted
cash
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-
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(10,000,000)
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-
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-
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Purchase / (disposal) of
property and equipment
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(26,330,276)
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245,812
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(1,752,423)
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(267,615)
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Gain on sales of
investment
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233,162
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1,027,233
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2,218,027
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338,718
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Net cash
provided by / (used in) investing activities
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(146,097,114)
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131,273,045
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(249,534,396)
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(38,106,745)
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Cash flows
from financing activities:
Repurchase stocks on open
market
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(84,692)
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(9,529,124)
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(5,895,960)
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(900,380)
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Proceeds from exercise of
share options
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-
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-
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687,751
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105,027
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Net cash
used in financing activities
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(84,692)
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(9,529,124)
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(5,208,209)
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(795,353)
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Effect of
foreign currency exchange
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-
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(2,828,718)
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(2,484,064)
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(379,345)
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Net increase
/ (decrease) in cash and cash equivalents
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(105,918,534)
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144,804,316
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(222,476,151)
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(33,974,642)
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Cash and
cash equivalents at beginning of the period
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508,778,014
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399,623,512
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544,427,828
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83,140,330
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Cash and
cash equivalents at end of the period
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402,859,480
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544,427,828
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321,951,677
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49,165,688
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CHINA MASS
MEDIA CORP.
SELECTED
OPERATING DATA
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THREE MONTHS ENDED
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Mar 31,
2010
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Dec 31,
2010
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Mar 31,
2011
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Number of programs secured
during the period
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35
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35
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35
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Total advertising time
obtained (seconds)
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2,595,780
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2,676,240
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2,552,220(1)
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Total advertising time
sold (seconds)
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118,355
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212,040
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127,745(2)
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(1) Represents
the total amount of time during regular television programs secured
through our contracts with CCTV,
including 219,420
seconds from CCTV-1, CCTV-2 and
CCTV-4 and 2,332,800
seconds from CCTV-E and
CCTV-F.
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(2) During the
three-month periods ended March 31, 2010, December 31, 2010 and
March 31, 2011, the company
has sold 5,340
seconds and 39,120 seconds
and 11,880 seconds of
advertisements in CCTV-E and CCTV-F.
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RECONCILIATIONS OF UNAUDITED
NON-GAAP RESULTS OF OPERATIONS
MEASURES
TOTHE NEAREST COMPARABLE GAAP MEASURES (*)
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Three months ended March 31, 2010
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Three months ended March 31, 2011
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GAAP Results
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Adjustment
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NON-GAAP
Result
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GAAP Result
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Adjustment
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NON-GAAP
Result
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RMB
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RMB
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RMB
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RMB
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RMB
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RMB
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Operating income
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13,937,106
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519,777
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14,456,883
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13,144,566
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361,253
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13,505,819
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Net income
|
10,111,009
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519,777
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10,630,786
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8,299,350
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361,253
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8,660,603
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(*)The adjustment is for
share-based compensation expenses.
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Non-GAAP Disclosure
In addition to the unaudited consolidated financial information
presented in accordance with US GAAP, management uses a non-GAAP
measure of net income excluding non-cash share-based compensation.
Company management believes excluding the share-based compensation
expenses from non-GAAP financial measures is useful for the
investors' understanding of overall current financial performance.
Nevertheless, the limitation of using non-GAAP financial measures
excluding share-based compensation expenses is that share-based
compensation expenses have been and will continue to be a
significant recurring expense in the Company's business.
The presentation of the 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 US
GAAP. For more information on these non-GAAP financial measures,
please see the tables captioned "Reconciliations of non-GAAP
results of operations measures to the nearest comparable GAAP
measures" set forth above, which shall be read in conjunction with
the preceding financial information presented in accordance with US
GAAP.
SOURCE China Mass Media Corp.