2012 Third Quarter Financial Summary
- Net revenues were
$7.2 million compared with$13.5 million for the third quarter of 2011 due to the Company's strategic transition amid a challenging business environment; - Gross profit was
$5.5 million compared with$11.2 million for the third quarter of 2011; - Net loss attributable to
China Finance Online was$3.2 million .
Nine Months Ended
- Net revenues were
$24.4 million compared with$42.2 million for the first nine months of 2011; - Gross profit was
$18.1 million compared with$35.5 million for the first nine months of 2011; - Net loss attributable to
China Finance Online was$7.0 million .
Key Developments
- In
November 2012 , the Company changed its independent registered public accounting firm fromDeloitte Touche Tohmatsu CPA Ltd. to Grant Thornton China; - In
November 2012 , the Company entered into an agreement with Tsinghua University'sPBC School of Finance E-finance Lab for long-term strategic cooperation mainly on research and project incubation related to internet-based financial services.
2012 Third Quarter Results
Net revenues for the third quarter of 2012 were
For the third quarter of 2012, gross profit was
General and administrative ("G&A") expenses for the third quarter of 2012 were
Sales and marketing expenses for the third quarter of 2012 were
Product development expenses for the third quarter of 2012 were
Total operating expenses for the third quarter of 2012 were
Net loss attributable to
As of
Total
The combined current and non-current deferred revenues at the end of the third quarter of 2012, which represented prepaid service fees made by customers for subscription services that have not been rendered as of
Nine Months Ended
Total net revenues for the nine months ended
Change of Auditor
In November, the Company changed its independent registered public accounting firm
The Company believes that GT is one of the top-ranked independent accounting firms with the highest level of service, global expertise and impeccable track records in both China and the
In November, the Company entered into an agreement with Tsinghua University's
Established in 1981, the
"We are honored to be selected as a long-term strategic partner for Tsinghua's
"Business environment remains considerably challenging as the Chinese economy grows at its slowest pace in three years and the Chinese stock market continues its slide to new multi-year lows. Facing difficulties, we have streamlined our operations to become a leaner and more efficient Company. We also have plans to initiate additional cost-cutting measures going forward," commented Mr. Zhao. "We are starting to see early signs of stabilization in cash attrition and anticipate our financial position to improve further in 2013. With significant number of high net worth households and the rising middle-class, the market prospect for securities investment advisory and wealth management in
Conference Call Information
The Company will host a conference call and a simultaneous webcast, on
A replay of the conference call will be available shortly after the conclusion of the event through
The conference call will be available as a live webcast and replay at: http://www.media-server.com/m/p/mt8s64hm
About
Safe Harbor Statement
This press release contains forward-looking statements. These statements constitute "forward-looking" statements within the meaning of 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. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. Among other things, this release contains the following forward-looking statements regarding:
- our product upgrade and strategic transformation initiative;
- our plans to streamline our corporate structure;
- our strategic collaboration with Tsinghua University's
PBC School of Finance E-finance Lab ; - our prospect on stabilization in cash attrition and improvement of our financial position;
- our ability to timely file annual report on Form 20-F for the year ending
December 31, 2012 ; and - the market prospect of the business of securities investment advisory and wealth management.
Such statements involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements, which risks and uncertainties include, among others, the following:
- the changing customer needs, regulatory environment and market condition that we are subject to;
- the uneven condition of the world and Chinese economy that could lead to volatility in the equity markets and affect our operating results in the coming quarters;
- the impact of a poor performing Chinese stock market on our future performance;
- the unpredictability of our strategic transformation and upgrade;
- the degree to which our strategic collaborations with partners will yield successful outcome;
- the prospect for
China 's high-net-worth and middle-class households; - the competition we are facing in the new business of securities investment advisory and wealth management;
- global macroeconomic uncertainties;
- wavering investor confidence that could impact our business; and
- possible non-cash goodwill, intangible assets and investment impairment may adversely affect our net income.
Further information regarding these and other risks is included in the Company's filings with the
Contact:
+86-10-5832-5288
ir@jrj.com
Grayling
646-284-9474
shiwei.yin@grayling.com
|
China Finance Online Co. Limited |
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|
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS |
||
|
(In thousands of U.S. dollars) |
||
|
Sep. 30, 2012 |
Dec. 31, 2011 |
|
|
Assets |
||
|
Current assets: |
||
|
Cash and cash equivalents |
43,710 |
64,641 |
|
Restricted cash |
28,690 |
29,861 |
|
Trust bank balances held on behalf of customers |
8,490 |
18,664 |
|
Accounts receivable, net - others |
4,608 |
1,468 |
|
Accounts receivable, net - margin clients |
18,718 |
12,889 |
|
Loan receivable |
1,605 |
9,566 |
|
Short-term investments |
2,685 |
10,701 |
|
Prepaid expenses and other current assets |
3,399 |
3,577 |
|
Deferred tax assets, current |
492 |
634 |
|
Total current assets |
112,397 |
152,001 |
|
Property and equipment, net |
5,402 |
6,530 |
|
Acquired intangible assets, net |
4,718 |
- |
|
Rental deposits |
746 |
738 |
|
Goodwill |
3,023 |
- |
|
Deferred tax assets, non-current |
257 |
484 |
|
Other deposits |
230 |
224 |
|
Total assets |
126,773 |
159,977 |
|
Liabilities and equity |
||
|
Current liabilities: |
||
|
Deferred revenue, current (including deferred revenue, current of the consolidated variable interest entities without recourse to China Finance Online Co. Limited $3,799 and $7,037 as of September 30,2012 and December 31,2011, respectively) |
9,240 |
17,287 |
|
Accrued expenses and other current liabilities (including accrued expenses and other current liabilities of the consolidated variable interest entities without recourse to China Finance Online Co. Limited $1,891 and $3,127 as of September 30,2012 and December 31, 2011, respectively) |
4,299 |
6,458 |
|
Short-term loan(including short-term loan of the consolidated variable interest entities without recourse to China Finance Online Co. Limited nil and nil as of September 30,2012 and December 31, 2011, respectively) |
13,542 |
19,171 |
|
Amount due to customers for trust bank balances held on behalf of customers(including amount due to customers for trust bank balances held on behalf of customers of the consolidated variable interest entities without recourse to China Finance Online Co. Limited nil and nil as of September 30,2012 and December 31, 2011, respectively) |
8,490 |
18,664 |
|
Accounts payable (including accounts payable of the consolidated variable interest entities without recourse to China Finance Online Co. Limited $234 and $115 as of September 30, 2012 and December 31, 2011, respectively) |
489 |
144 |
|
Deferred tax liabilities, current(including deferred tax liability, current of the consolidated variable interest entities without recourse to China Finance Online Co. Limited $319 and $3 as of September 30, 2012 and December 31, 2011, respectively) |
320 |
45 |
|
Income taxes payable (including income taxes payable of the consolidated variable interest entities without recourse to China Finance Online Co. Limited nil and $25 as of September 30,2012 and December 31,2011, respectively) |
436 |
135 |
|
Total current liabilities |
36,816 |
61,904 |
|
Deferred tax liabilities, non-current (including deferred tax liabilities, non-current of the consolidated variable interest entities without recourse to China Finance Online Co. Limited $1,179 and nil as of September 30, 2012 and December 31, 2011, respectively) |
1,179 |
- |
|
Deferred revenue, non-current (including deferred revenue, non-current of the consolidated variable interest entities without recourse to China Finance Online Co. Limited $1,277 and $3,033 as of September 30,2012 and December 31,2011, respectively) |
3,850 |
7,237 |
|
Total liabilities |
41,845 |
69,141 |
|
Noncontrolling interests |
817 |
(105) |
|
Total China Finance Online Co. Limited Shareholders' equity |
84,111 |
90,941 |
|
Total liabilities and equity |
126,773 |
159,977 |
|
China Finance Online Co. Limited |
|||||
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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME |
|||||
|
(in thousands of U.S. dollars, except share and ADS related data) |
|||||
|
Three months ended |
Nine months ended |
||||
|
Sep. 30, 2012 |
Sep. 30, 2011 |
Jun. 30, 2012 |
Sep. 30, 2012 |
Sep. 30, 2011 |
|
|
Net revenues |
7,228 |
13,515 |
8,100 |
24,437 |
42,248 |
|
Cost of revenues |
(1,771) |
(2,303) |
(2,552) |
(6,311) |
(6,704) |
|
Gross profit |
5,457 |
11,212 |
5,548 |
18,126 |
35,544 |
|
Operating expenses |
|||||
|
General and administrative(includes share-based compensation expenses of $198, $347, $197, $569 and $1,110, respectively) |
(2,933) |
(3,137) |
(2,602) |
(8,301) |
(8,481) |
|
Sales and marketing (includes share-based compensation expenses of $6, $33, $6,$20 and $103, respectively) |
(3,063) |
(5,251) |
(3,281) |
(9,893) |
(16,884) |
|
Product development (includes share-based compensation expenses of $3, $23, $3, $9 and $73, respectively) |
(2,633) |
(3,415) |
(2,696) |
(8,534) |
(9,898) |
|
Loss from impairment of intangible assets |
- |
(641) |
- |
- |
(641) |
|
Loss from impairment of goodwill |
- |
(1,667) |
- |
- |
(1,667) |
|
Total operating expenses |
(8,629) |
(14,111) |
(8,579) |
(26,728) |
(37,571) |
|
Government subsidies |
54 |
14 |
- |
73 |
251 |
|
Loss from operations |
(3,118) |
(2,885) |
(3,031) |
(8,529) |
(1,776) |
|
Interest income |
687 |
565 |
885 |
2,660 |
2,005 |
|
Interest expense |
(100) |
(64) |
(206) |
(430) |
(190) |
|
Investment gain, net |
47 |
497 |
184 |
409 |
854 |
|
Other income (loss), net |
(41) |
15 |
(21) |
17 |
69 |
|
Exchange gain (loss), net |
(69) |
481 |
(131) |
(175) |
1,104 |
|
Loss from impairment of cost method investment |
- |
- |
- |
- |
(1,480) |
|
Income (loss) before income tax expenses |
(2,594) |
(1,391) |
(2,320) |
(6,048) |
586 |
|
Income tax expenses |
(629) |
(2,359) |
(276) |
(961) |
(4,646) |
|
Net loss |
(3,223) |
(3,750) |
(2,596) |
(7,009) |
(4,060) |
|
Less: Net loss attributable to the noncontrolling interest |
(65) |
(232) |
(14) |
(16) |
(139) |
|
Net loss attributable to China Finance Online Co. Limited |
(3,158) |
(3,518) |
(2,582) |
(6,993) |
(3,921) |
|
Net loss |
(3,223) |
(3,750) |
(2,596) |
(7,009) |
(4,060) |
|
Changes in foreign currency translation adjustment |
(263) |
1,109 |
(200) |
(403) |
2,520 |
|
Net unrealized gain loss on available-for-sale securities, net of tax effects of $9, nil, ($3), $6 and nil, respectively |
- |
- |
47 |
32 |
- |
|
Other comprehensive income, net of tax |
(263) |
1,109 |
(153) |
(371) |
2,520 |
|
Comprehensive loss |
(3,486) |
(2,641) |
(2,749) |
(7,380) |
(1,540) |
|
Less: comprehensive loss attributable to noncontrolling interest |
(65) |
(232) |
(14) |
(16) |
(139) |
|
Comprehensive loss attributable to China Finance Online Co. Limited |
(3,421) |
(2,409) |
(2,735) |
(7,364) |
(1,401) |
|
Net loss per share attributable to China Finance Online Co. Limited |
|||||
|
Basic |
(0.03) |
(0.03) |
(0.02) |
(0.06) |
(0.04) |
|
Diluted |
(0.03) |
(0.03) |
(0.02) |
(0.06) |
(0.04) |
|
Loss per ADS |
|||||
|
Basic |
(0.14) |
(0.16) |
(0.12) |
(0.32) |
(0.18) |
|
Diluted |
(0.14) |
(0.16) |
(0.12) |
(0.32) |
(0.18) |
|
Weighted average ordinary shares |
|||||
|
Basic |
108,982,101 |
108,967,101 |
108,982,101 |
108,982,101 |
108,956,762 |
|
Diluted |
108,982,101 |
108,967,101 |
108,982,101 |
108,982,101 |
108,956,762 |
|
Weighted average ADSs |
|||||
|
Basic |
21,796,420 |
21,793,420 |
21,796,420 |
21,796,420 |
21,791,352 |
|
Diluted |
21,796,420 |
21,793,420 |
21,796,420 |
21,796,420 |
21,791,352 |
SOURCE