SHANGHAI, Nov. 21, 2013 /PRNewswire/ -- Taomee
Holdings Limited (NYSE: TAOM) ("Taomee" or the "Company"),
China's leading children's
entertainment and media company, today reported its unaudited
financial results for the third quarter ended September 30, 2013.
Highlights of the Third Quarter of 2013
- Total net revenues were US$15.8
million in the third quarter of 2013, an increase of 33.3%
compared with US$11.8 million in the
third quarter of 2012.
- Revenues from online business were US$10.3 million in the third quarter of 2013, an
increase of 28.2% compared with US$8.0
million in the third quarter of 2012.
- Revenues from offline businesses were US$5.5 million in the third quarter of 2013, an
increase of 43.9% compared with US$3.8
million in the third quarter of 2012.
- Gross profit was US$11.2 million
in the third quarter of 2013, compared with US$8.3 million in the third quarter of 2012.
- Profit from operations was US$1.7
million in the third quarter of 2013, compared with
US$0.7 million in the third quarter
of 2012.
- Non-GAAP net income attributable to holders of ordinary shares
was US$2.9 million in the third
quarter of 2013, an increase of 20.4%, compared with US$2.4 million in the third quarter of 2012.
- Non-GAAP basic and diluted earnings per ADS[1] were
US$0.08 and US$0.08, respectively, in the third quarter of
2013, compared with US$0.07 and
US$0.06, respectively, in the third
quarter of 2012.
- Key Operating Metrics
- The number of active accounts ("ACA") for the Company's virtual
worlds under operation in mainland China was approximately 60.8 million in the
third quarter of 2013, an increase of 5.3% from 57.7 million in the
third quarter of 2012.
- Active paying accounts ("APA") for the Company's virtual worlds
under operation in mainland China
remained stable at 1.7 million in the third quarter of 2013,
compared with the third quarter of 2012.
- Average revenue per user ("ARPU") for the Company's virtual
worlds under operation in mainland China was approximately RMB36 in the third quarter of 2013, an increase
of 24% from RMB30 in the third
quarter of 2012. The increase reflected the Company's strategy to
continuously improve monetization trends.
- The number of downloads of the mobile applications operated by
the Company increased by approximately 3.7 million in the third
quarter of 2013, and the total number of downloads amounted to
approximately 9.7 million for the first three quarters of
2013.
|
[1] Each American
Depositary Share ("ADS") represents twenty ordinary
shares.
|
"Our results of this quarter demonstrate broad-base growth
across our online and offline business segments, and we achieved a
new record level of revenues and reached an all-time high of 60.8
million active accounts, " said Mr. Benson
Wang, co-founder and CEO of Taomee. "We are encouraged by
the early results of the building blocks for growth that we have
been putting in place -- most notably, our cross-platform
investments in mobile and online games, interactive toys,
television, feature films and education."
"By focusing on our core customers -- children, parents,
teachers and other caregivers – who are reachable through an
integrated multi-media network with diverse distribution channels,
we are building a highly solid platform with sustainable revenue
growth and attractive returns to shareholders. Today, our vision is
being demonstrated by the reacceleration of growth in our online
revenues, combined with the continuous growth in our offline
business, and we believe that we are well-positioned for strong
earnings growth heading into 2014 and beyond."
Unaudited Financial Results for Third Quarter of 2013
Total Net Revenues
Total net revenues were US$15.8
million in the third quarter of 2013, an increase of 33.3%
compared with US$11.8 million in the
third quarter of 2012.
Net online business revenues were US$10.3
million in the third quarter of 2013, an increase of 28.2%
compared with US$8.0 million in the
third quarter of 2012. The increase was mainly driven by the
continued revenue growth of our core virtual worlds, as well as
contribution from several newly launched franchises.
Net offline business revenues were US$5.5
million in the third quarter of 2013, an increase of 43.9%
compared with US$3.8 million in the
third quarter of 2012. The increase was driven by an increase in
interactive toy sales and merchandise licensing business, as well
as strong film box-office of our feature film Seer III:
Universal Force.
Total Cost of Services
Total cost of services was US$4.5
million in the third quarter of 2013, compared with
US$3.5 million in the third quarter
of 2012.
Online business related costs were US$2.1
million in the third quarter of 2013, compared with
US$1.9 million in the third quarter
of 2012. The increase was primarily due to an increase in bandwidth
and hosting costs.
Offline business related costs were US$2.4 million in the third quarter of 2013,
compared with US$1.6 million in the
third quarter of 2012. The increase was mainly due to an increase
in costs related to the expansion of the interactive toys
business.
Gross Profit and Gross Margin
Gross profit was US$11.2 million
in the third quarter of 2013, compared with US$8.3 million in the third quarter of
2012.
Gross margin was 71.2% in the third quarter of 2013, compared
with 70.2% in the third quarter of 2012.
Gross margin for the online business was 79.6% in the third
quarter of 2013, compared with 76.4% in the third quarter of
2012.
Gross margin for the offline business was 55.5% in the third
quarter of 2013, compared with 57.2% in the third quarter of
2012.
Total Operating Expenses
Total operating expenses were US$9.5
million in the third quarter of 2013, an increase of 24.7%
compared with US$7.6 million in the
third quarter of 2012.
- Product development expenses were US$3.6
million in the third quarter of 2013, compared with
US$3.4 million in the third quarter
of 2012. The increase was primarily due to an increase in payroll
expense.
- Sales and marketing expenses in the third quarter of 2013
remained stable at US$2.9 million
compared with the third quarter of 2012.
- General and administrative expenses were US$3.8 million in the third quarter of 2013,
compared with US$2.4 million in the
third quarter of 2012. The increase was mainly due to increased
indirect tax costs related to intercompany transactions and
professional fees paid to outside counsels with respect to equity
investment, partially offset by a decrease in share-based
compensation.
Profit from Operations
Profit from operations was US$1.7
million in the third quarter of 2013, compared with
US$0.7 million 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 third quarter
of 2013, compared with a profit of US$0.4
million in the third quarter of 2012. Profit in equity
method in the third quarter of 2012 was partially due to a gain
amounted to US$0.3 million from the
sale of our equity interests in Shenzhen Ruigao Information
Technology Co., Ltd.
Net Income
Net income attributable to holders of ordinary shares in the
third quarter of 2013 was US$2.4
million, compared with US$1.8
million in the third quarter of 2012.
Basic and diluted earnings per ADS were US$0.07 and US$0.06, respectively, in the third quarter of
2013, compared with US$0.05 and
US$0.05, respectively, in the third
quarter of 2012.
Non-GAAP net income attributable to holders of ordinary shares
was US$2.9 million in the third
quarter of 2013, compared with US$2.4
million in the third quarter of 2012.
Non-GAAP basic and diluted earnings per ADS were US$0.08 and US$0.08, respectively, in the third quarter of
2013, compared with US$0.07 and
US$0.06, respectively, in the third
quarter of 2012.
Cash and Cash Equivalents
As of September 30, 2013, the
Company had US$113.3 million of cash
and cash equivalents, compared with US$114.3
million as of June 30,
2013.
Investments in Equity Investees
In September 2013,
Taomee entered into an investment agreement to acquire a minority
stake of a Beijing-based
pre-school education service provider for a cash consideration of
US$2.0 million.
In September 2013,
Taomee entered into an investment agreement with two third-parties
to establish a joint venture, Jiangxi Haomi Network Technology Co.,
Ltd ("Jiangxi Haomi"). The business of Jiangxi Haomi is to develop
family entertainment and education applications on mobile and
multi-screen platforms in Mainland China. The total consideration
was RMB12.9 million (approximately
US$2.1 million) in cash for 43.0%
equity interests in Jiangxi Haomi.
Capital Expenditures
We had capital expenditures of US$0.4
million for the third quarter of 2013 compared with
US$0.3 million for the same quarter
of 2012. Total capital expenditures for the first three quarters of
2013 were US$2.3 million. Our capital
expenditures were used primarily for (i) purchase of computer
hardware and equipment, (ii) purchase of intangible assets, and
(iii) purchase of franchises and online game licensing rights for
our pipeline. Actual future capital expenditures may differ from
the amounts indicated above.
Share-based Compensation
Share-based compensation was US$0.5
million for the third quarter of 2013 as compared with
US$0.6 million for the same quarter
of 2012.
Share Repurchase Program
During the third quarter of 2013, Taomee repurchased 68,140
ADSs. As of September 30, 2013, the
Company had repurchased a total of 950,237 ADSs under the Company's
US$10 million share repurchase
program at an average price of approximately US$3.99 per ADS.
Business Highlights
On August 20, 2013
Taomee closed-beta tested Reverse World, an action
role-playing mobile game on Android and iOS platforms.
On October 21, 2013
Taomee closed-beta tested Elves Pie, a cartoon style
role-playing web game.
On October 31, 2013
Taomee closed-beta tested the mobile game Seer: Universal
Force on Android platform.
In October, 2013 Taomee launched two interactive
toys: second generation of Seer Spin Boom and Seer
Mok Pen.
By October 30, 2013
the box-office revenue of the film Seer III: Universal Force
accumulated over RMB76 million
(approximately US$12.3 million). In
November, 2013, the film was released on several China leading online video and internet TV
platforms including BestTV, Tencent
Video, Sohu Video, iQiyi and Youku Tudou.
Outlook for the Fourth Quarter of 2013
Net revenues for the fourth quarter of 2013 are expected to be
in the range of US$10.2 million to US$10.7
million, which represents year-on-year growth of
approximately 36.5% to 43.2%. We expect both online and offline
revenues to increase year-on-year, although there may be sequential
decline due to seasonality of the school year and absence of
offline film releases. This forecast reflects the Company's current
and preliminary view of the operating results, and is subject to
future changes.
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
7:00 a.m. Eastern Standard Time
(New York) on Thursday, November 21, 2013 (8:00 p.m. in China on Thursday,
November 21, 2013).
The dial-in details for the live conference call are:
|
Conference
ID:
|
87139588
|
|
U.S.
toll-free:
|
+1-866-519-4004
|
|
Hong Kong
toll-free:
|
800-930-346
|
|
International:
|
+65-6723-9381
|
|
China
Mainland:
|
400-620-8038
|
|
Passcode:
|
Taomee
|
A live webcast and archive of the conference call will be
available on the Investor Relations section of Taomee's website at
http://www.media-server.com/m/p/wkrrof9m. A telephone replay of the
call will be available at 10:00 a.m.,
Eastern Standard Time on November 21,
2013 through 08:00 a.m.,
November. The dial-in details for the telephone replay are:
|
Conference
ID:
|
87139588
|
|
International:
|
+612-8199-0299
|
|
China:
|
400 1200
932
|
About Taomee Holdings Limited
Taomee Holdings Limited ("Taomee" or "the Company") is
China's leader in children's
entertainment and media. Its award winning content offerings are
both engaging and educational, endearing it to children, as well as
to parents and teachers. The Company was founded in 2007 with the
mission to bring joy and inspiration to children. Its popular
character franchises, including SEER and MOLE'S WORLD, are
distributed online via virtual worlds, web games and mobile
applications, as well as through traditional media, including
animated box office films, TV series, books and consumer products,
most notably interactive toys and trading cards. Its online
community regularly achieves top search ranking in China, Hong
Kong and Taiwan. Taomee has
been consistently recognized for its leadership and innovative
contributions to the children's market, including accolades from
China's Ministry of Culture and
the China Animation Association.
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
|
|
In
USD
|
|
September
30
|
|
June
30
|
|
2013
|
|
2013
|
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
113,255,315
|
|
$
114,303,400
|
|
Short term
investment
|
2,990,621
|
|
2,988,787
|
|
Accounts
receivable
|
3,991,579
|
|
3,037,542
|
|
Inventories
|
531,600
|
|
323,889
|
|
Income tax
recoverable
|
589,288
|
|
574,366
|
|
Due from related parties
|
32,251
|
|
247,532
|
|
Prepayments and other current assets
|
2,845,731
|
|
2,644,669
|
|
Deferred tax assets, current
|
3,036,318
|
|
3,021,232
|
|
Total current
assets
|
127,272,703
|
|
127,141,417
|
|
|
|
|
|
Investments in equity
investees
|
14,168,180
|
|
10,141,566
|
|
Property and
equipment, net
|
1,774,312
|
|
1,647,495
|
|
Acquired intangible
assets
|
1,501,250
|
|
562,503
|
|
Other
assets
|
4,553,432
|
|
3,529,750
|
|
TOTAL
ASSETS
|
$
149,269,877
|
|
$
143,022,731
|
|
|
|
|
|
LIABILITIES
AND EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts payable
|
$
2,221,153
|
|
$
1,535,364
|
|
Advance from customers
|
8,493,412
|
|
7,382,155
|
|
Due to related parties
|
257,544
|
|
237,904
|
|
Deferred revenue
|
12,761,597
|
|
11,927,360
|
|
Deferred tax liabilities, current
|
13,774
|
|
13,706
|
|
Accrued expenses and other current liabilities
|
6,092,756
|
|
5,755,154
|
|
Total current
liabilities
|
29,840,236
|
|
26,851,643
|
|
|
|
|
|
Equity
|
|
|
|
|
Taomee Holdings
Limited shareholders' equity
|
|
|
|
|
Ordinary shares
($0.00002 par value; 875,000,000 shares authorized;
735,820,028 and 738,453,478 shares issued;
734,247,808 and
735,518,458 outstanding as of June 30, 2013 and
September 30,
2013, respectively)
|
14,769
|
|
14,716
|
|
Treasury stock
|
(618,551)
|
|
(323,870)
|
|
Additional paid-in capital
|
72,906,646
|
|
72,070,957
|
|
Retained earnings
|
43,121,803
|
|
40,718,694
|
|
Accumulated other comprehensive income
|
3,818,574
|
|
3,523,776
|
|
Taomee Holdings
Limited shareholders' equity
|
119,243,241
|
|
116,004,273
|
|
Non-controlling
interests
|
186,400
|
|
166,815
|
|
Total
equity
|
$
119,429,641
|
|
$
116,171,088
|
|
|
|
|
|
TOTAL LIABILITIES
AND EQUITY
|
$
149,269,877
|
|
$
143,022,731
|
|
Taomee Holdings
Limited - Unaudited Consolidated Statements of Operations
|
|
|
|
In USD, except for
share data
For three months
ended
|
|
|
September
30,
|
|
June
30,
|
|
September
30,
|
|
|
2013
|
|
2013
|
|
2012
|
|
Revenues:
|
|
|
|
|
|
|
|
Online business, net
|
|
$
10,260,703
|
|
$
8,635,407
|
|
$
8,000,663
|
|
Offline business, net
|
|
5,518,261
|
|
3,404,026
|
|
3,833,942
|
|
Total net
revenues
|
|
15,778,964
|
|
12,039,433
|
|
11,834,605
|
|
|
|
|
|
|
|
|
Cost of
services
|
|
|
|
|
|
|
|
Online business
|
|
(2,089,815)
|
|
(1,767,903)
|
|
(1,886,967)
|
|
Offline business
|
|
(2,457,707)
|
|
(1,742,080)
|
|
(1,640,020)
|
|
Total cost of
services
|
|
(4,547,522)
|
|
(3,509,983)
|
|
(3,526,987)
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
11,231,442
|
|
8,529,450
|
|
8,307,618
|
|
|
|
|
|
|
|
|
Operating income
(expenses):
|
|
|
|
|
|
|
|
Product development
|
|
(3,568,462)
|
|
(3,309,258)
|
|
(3,374,238)
|
|
Sales and marketing
|
|
(2,925,398)
|
|
(2,381,940)
|
|
(2,859,256)
|
|
General and administrative
|
|
(3,820,463)
|
|
(2,950,988)
|
|
(2,435,483)
|
|
Impairment of intangible assets
|
|
-
|
|
(865,910)
|
|
-
|
|
Other operating income
|
|
779,381
|
|
448,631
|
|
1,021,371
|
|
Total operating
expenses
|
|
(9,534,942)
|
|
(9,059,465)
|
|
(7,647,606)
|
|
|
|
|
|
|
|
|
Profit/(loss) from
operations
|
|
1,696,500
|
|
(530,015)
|
|
660,012
|
|
|
|
|
|
|
|
|
Interest income,
net
|
|
906,470
|
|
631,997
|
|
683,697
|
|
Other income,
net
|
|
204,232
|
|
188,104
|
|
324,484
|
|
Income before
income taxes and
share of profit in equity method
investments
|
|
2,807,202
|
|
290,086
|
|
1,668,193
|
|
|
|
|
|
|
|
|
Income tax
(expense)/benefit
|
|
(313,048)
|
|
141,211
|
|
(304,726)
|
|
|
|
|
|
|
|
|
Share of
(loss)/profit in equity method
investments
|
|
(71,459)
|
|
(73,195)
|
|
436,969
|
|
Net
income
|
|
2,422,695
|
|
358,102
|
|
1,800,436
|
|
|
|
|
|
|
|
|
Less: Net income
attributable to
noncontrolling interest
|
|
19,586
|
|
13,740
|
|
-
|
|
|
|
|
|
|
|
|
Net income
attributable to holders of
ordinary shares
|
|
$
2,403,109
|
|
$
344,362
|
|
$
1,800,436
|
|
Earnings per
ADS
|
|
|
|
|
|
|
|
-Basic
|
|
$
0.07
|
|
$
0.01
|
|
$
0.05
|
|
-Diluted
|
|
$
0.06
|
|
$
0.01
|
|
$
0.05
|
|
|
|
|
|
|
|
|
Weighted average
number of
shares used in calculation
|
|
|
|
|
|
|
|
- Basic
|
|
733,988,549
|
|
731,446,938
|
|
733,158,958
|
|
- Diluted
|
|
745,799,224
|
|
744,821,217
|
|
752,966,298
|
|
|
|
|
|
|
|
|
Weighted average
number of
ADS used in calculation
|
|
|
|
|
|
|
|
- Basic
|
|
36,699,427
|
|
36,572,347
|
|
36,657,948
|
|
- Diluted
|
|
37,289,961
|
|
37,241,061
|
|
37,648,315
|
|
Taomee Holdings
Limited - Unaudited Consolidated Statements of Comprehensive
Income
|
|
|
In
USD,
For three months
ended
|
|
|
September
30,
2013
|
|
June
30,
2013
|
|
September 30,
2012
|
|
Net income
|
|
$
2,422,695
|
|
$
358,102
|
|
$
1,800,436
|
|
Other comprehensive
income/(loss), net of tax
|
|
|
|
|
|
|
|
Foreign currency
translation adjustments
|
|
294,798
|
|
822,028
|
|
(95,558)
|
|
|
|
|
|
|
|
|
Comprehensive
income
|
|
2,717,493
|
|
1,180,130
|
|
1,704,878
|
|
Comprehensive
income/(loss) attributable to
noncontrolling interest
|
|
19,586
|
|
13,740
|
|
-
|
|
|
|
|
|
|
|
|
Comprehensive income
attributable to
Taomee Holdings Limited
|
|
2,697,907
|
|
1,166,390
|
|
1,704,878
|
|
Taomee Holdings
Limited - Reconciliation of Non-GAAP and GAAP Results
|
|
|
|
|
In USD, except for
share data
For three months
ended
|
|
|
September
30,
|
|
June
30,
|
|
September
30,
|
|
|
2013
|
|
2013
|
|
2012
|
|
Reconciliation
from Non-GAAP measures
to GAAP measures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net
income attributable to
holders of ordinary shares
|
|
$
2,883,239
|
|
$
1,551,513
|
|
$
2,394,409
|
|
Share-based
compensation
|
|
(480,130)
|
|
(341,241)
|
|
(593,973)
|
|
Impairment of
intangible assets
|
|
-
|
|
(865,910)
|
|
-
|
|
GAAP net income
attributable to holders of
ordinary shares
|
|
$
2,403,109
|
|
$
344,362
|
|
$
1,800,436
|
|
|
|
|
|
|
|
|
Non-GAAP diluted
earnings per ADS
|
|
|
|
|
|
|
|
-Basic
|
|
$
0.08
|
|
$
0.04
|
|
$
0.07
|
|
-Diluted
|
|
$
0.08
|
|
$
0.04
|
|
$
0.06
|
SOURCE Taomee Holdings Limited