Second Quarter 2014 Highlights
- Net revenues increased by 171.4% year over year to
$20.6 million , compared with$7.6 million in the second quarter of 2013. - Revenues from financial services increased by 399.8% year over year to
$16.4 million , compared with$3.3 million in the second quarter of 2013. - Gross profit increased by 193.5% to
$15.1 million , compared with$5.2 million in the second quarter of 2013.
First Half 2014 Highlights
- Net revenues increased by 234.3% year over year to
$43.8 million , compared with$13.1 million in the first half of 2013. - Revenues from financial services increased by 706.6% year over year to
$34.4 million , compared with$4.3 million in the first half of 2013. - Gross profit increased by 274.4% to
$32.9 million , compared with$8.8 million in the first half of 2013.
Mr.
Second Quarter 2014 Financial Results
Net revenues for the second quarter of 2014 increased by 171.4% year-over-year to
Revenues from financial information and advisory business were
Revenues from financial services increased by 399.8% year over year to
Revenues from advertising remained stable at
Gross profit increased by 193.5% year over year to
General and administrative ("G&A") expenses for the second quarter of 2014 were
Sales and marketing ("S&M") expenses for the second quarter of 2014 were
Research and development ("R&D") expenses for the second quarter of 2014 were
The Company recognized an impairment loss of intangible assets and goodwill of
Net loss attributable to
Non-GAAP net income attributable to
Basic and diluted weighted average number of ordinary shares in the second quarter of 2014 was 109 million. Each ADS represents five ordinary shares of the Company.
As of
The total shareholders' equity of
First Half 2014 Financial Results
Net revenues for the first half of 2014 increased by 234.3% year over year to
Gross profit for the first half of 2014 increased by 274.4% to
Net loss attributable to the Company for the first half of 2014 was
Recent Developments
In August, the Company launched Securities Master, or Zhengquantong, the first integrated web-based securities trading platform in
In further leveraging the Securities Master platform, in September the Company entered into another similar strategic partnership agreement with
Since the Company developed the concept of "Making Investment Easier", the Company has leveraged its long history and expertise in online financial services to launch the precious metal trading business and the web-based securities trading services, "Securities Master". The Company continued the transition from providing financial information products to financial services. As part of the transition, the Company restructured some of its business units and assets, which incurred a reduction in goodwill of
As previously disclosed by the Company, the Company's board of directors approved and authorized participation in a real estate investment project 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/ep4f8t3u
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, strategic transformation and restructuring initiatives;
- our prospect on the continuous growth of our precious metals trading services;
- our prospect on our strategic partnerships with
CITIC Securities andZhongshan Securities ; - our prospect on building a comprehensive wealth management ecosystem through providing a fully-integrated online securities-trading platform;
- our prospect on stabilization in cash attrition and improvement of our financial position;
- our prospect on timely collecting the loan extended to the Hebei Developer and the receivables resulting from our real estate development project in
Hebei ; and - our initiatives to address customers' demand for intuitive online investment platforms and alternative investment opportunities.
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 the changing conditions of the mainland Chinese stock market,
Hong Kong stock market and global financial market on our future performance; - the unpredictability of our strategic transformation and growth of new businesses, including our precious metal trading service;
- the prospect of our margin-related business and the degree to which our implementation of margin account screening and ongoing monitoring will yield successful outcome;
- 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 prospect of equipping our customer specialists with new technology, tools and financial knowledge;
- 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
Non-GAAP Measures
To supplement the unaudited condensed consolidated financial information presented in accordance with Accounting Principles Generally Accepted in the
China Finance Online Co. Limited UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands of U.S. dollars)
|
||
Jun. 30, 2014 |
Dec. 31, 2013 |
|
Assets |
||
Current assets: |
||
Cash and cash equivalents |
20,394 |
36,371 |
Restricted cash |
5 |
4 |
Trust bank balances held on behalf of customers |
11,325 |
9,999 |
Accounts receivable, net - Others |
15,559 |
15,325 |
Accounts receivable, net - Margin clients |
6,922 |
5,977 |
Loan receivable |
10,239 |
10,333 |
Consideration receivable |
13,327 |
13,450 |
Prepaid expenses and other current assets |
6,376 |
3,307 |
Deferred tax assets, current |
417 |
1,114 |
Total current assets |
84,564 |
95,880 |
Cost method investment |
1,131 |
1,139 |
Property and equipment, net |
4,536 |
3,868 |
Acquired intangible assets, net |
2,318 |
7,545 |
Rental deposits |
1,527 |
1,115 |
Goodwill |
7,051 |
16,974 |
Deferred tax assets, non-current |
72 |
94 |
Other deposits |
6,942 |
6,877 |
Total assets |
108,141 |
133,492 |
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 $2,374 and $3,808 as of June 30, 2014 and December 31, 2013, respectively) |
4,120 |
6,150 |
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 $7,597 and $7,460 as of June 30, 2014 and December 31, 2013, respectively) |
9,173 |
9,696 |
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 $110 and $648 as of June 30, 2014 and December 31, 2013, respectively) |
11,325 |
9,999 |
Accounts payable (including accounts payable of the consolidated variable interest entities without recourse to China Finance Online Co. Limited $3,686 and $5,520 as of June 30, 2014 and December 31, 2013, respectively) |
11,301 |
12,573 |
Deferred tax liabilities, current (including deferred tax liabilities, current of the consolidated variable interest entities without recourse to China Finance Online Co. Limited $385 and $325 as of June 30, 2014 and December 31, 2013, respectively) |
385 |
325 |
Income taxes payable (including income taxes payable of the consolidated variable interest entities without recourse to China Finance Online Co. Limited $93 and $414 as of June 30, 2014 and December 31, 2013, respectively) |
93 |
459 |
Total current liabilities |
36,397 |
39,202 |
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 $579 and $1,886 as of June 30, 2014 and December 31, 2013, respectively) |
579 |
1,886 |
Deferred revenue, non-current (including deferred revenue, non-current of the consolidated variable interest entities without recourse to China Finance Online Co. Limited $544 and $633 as of June 30, 2014 and December 31, 2013, respectively) |
1,638 |
1,986 |
Total liabilities |
38,614 |
43,074 |
Noncontrolling interests |
9,978 |
14,646 |
Total China Finance Online Co. Limited shareholders' equity |
59,549 |
75,772 |
Total liabilities and equity |
108,141 |
133,492 |
China Finance Online Co. Limited UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In thousands of U.S. dollars, except share and ADS related data)
|
|||||
Three months ended |
Six months ended |
||||
Jun. 30, 2014 |
Jun. 30, 2013 |
Mar. 31, 2014 |
Jun. 30, 2014 |
Jun. 30, 2013 |
|
Net revenues |
20,599 |
7,591 |
23,179 |
43,778 |
13,095 |
Cost of revenues |
(5,461) |
(2,433) |
(5,388) |
(10,849) |
(4,300) |
Gross profit |
15,138 |
5,158 |
17,791 |
32,929 |
8,795 |
Operating expenses |
|||||
General and administrative (includes share-based compensation expenses of $691, $153, $506, $1,197 and $330, respectively) |
(3,837) |
(3,152) |
(4,039) |
(7,876) |
(6,050) |
Sales and marketing (includes share-based compensation expenses of $7, nil, $6, $13 and nil, respectively) |
(12,880) |
(4,526) |
(12,088) |
(24,968) |
(7,647) |
Product development (includes share-based compensation expenses of $22, nil, $22, $44 and nil, respectively) |
(2,580) |
(2,213) |
(2,556) |
(5,136) |
(4,423) |
Loss from impairment of intangible assets |
(1,802) |
- |
- |
(1,802) |
- |
Loss from impairment of goodwill |
(8,150) |
- |
- |
(8,150) |
- |
Total operating expenses |
(29,249) |
(9,891) |
(18,683) |
(47,932) |
(18,120) |
Government subsidies |
36 |
- |
248 |
284 |
- |
Loss from operations |
(14,075) |
(4,733) |
(644) |
(14,719) |
(9,325) |
Interest income |
1,056 |
180 |
828 |
1,884 |
581 |
Interest expense |
(8) |
(24) |
(2) |
(10) |
(61) |
Investment gain (loss), net |
19 |
(158) |
(35) |
(16) |
(39) |
Other income, net |
564 |
(28) |
16 |
580 |
(157) |
Exchange gain (loss), net |
(37) |
265 |
(153) |
(190) |
324 |
Income (loss) before income tax benefits (expenses) |
(12,481) |
(4,498) |
10 |
(12,471) |
(8,677) |
Income tax benefits (expenses) |
57 |
(253) |
(445) |
(388) |
(721) |
Net loss |
(12,424) |
(4,751) |
(435) |
(12,859) |
(9,398) |
Less: Net income (loss) attributable to the noncontrolling interests |
(6,034) |
(213) |
1,551 |
(4,483) |
(544) |
Net loss attributable to China Finance Online Co. Limited |
(6,390) |
(4,538) |
(1,986) |
(8,376) |
(8,854) |
Net loss |
(12,424) |
(4,751) |
(435) |
(12,859) |
(9,398) |
Changes in foreign currency translation adjustment |
7 |
275 |
(453) |
(446) |
332 |
Net unrealized gain on available-for-sale securities, net of tax effects of nil, $4, nil, nil and $4, respectively |
- |
11 |
- |
- |
11 |
Other comprehensive income, net of tax |
7 |
286 |
(453) |
(446) |
343 |
Comprehensive loss |
(12,417) |
(4,465) |
(888) |
(13,305) |
(9,055) |
Less: comprehensive income (loss) attributable to non-controlling interest |
(6,034) |
(213) |
1,551 |
(4,483) |
(544) |
Comprehensive loss attributable to China Finance Online Co. Limited |
(6,383) |
(4,252) |
(2,439) |
(8,822) |
(8,511) |
Net loss per share attributable to China Finance Online Co. Limited |
|||||
Basic |
(0.06) |
(0.04) |
(0.02) |
(0.08) |
(0.08) |
Diluted |
(0.06) |
(0.04) |
(0.02) |
(0.08) |
(0.08) |
Net loss per ADS attributable to China Finance Online Co. Limited |
|||||
Basic |
(0.29) |
(0.21) |
(0.09) |
(0.38) |
(0.41) |
Diluted |
(0.29) |
(0.21) |
(0.09) |
(0.38) |
(0.41) |
Weighted average ordinary shares |
|||||
Basic |
109,216,351 |
109,006,101 |
109,197,765 |
109,215,334 |
109,005,438 |
Diluted |
109,216,351 |
109,006,101 |
109,197,765 |
109,215,334 |
109,005,438 |
Weighted average ADSs |
|||||
Basic |
21,843,270 |
21,801,220 |
21,839,553 |
21,843,067 |
21,801,088 |
Diluted |
21,843,270 |
21,801,220 |
21,839,553 |
21,843,067 |
21,801,088 |
Reconciliation of the Company's GAAP financial measures to Non-GAAP financial measures (In thousands of U.S. dollars)
|
|||||
Three months ended |
Six months ended |
||||
Jun. 30, 2014 |
Jun. 30, 2013 |
Mar. 30, 2014 |
Jun. 30, 2014 |
Jun. 30, 2013 |
|
Net income (loss) attributable to China Finance Online Co. Limited (GAAP) |
(6,390) |
(4,538) |
(1,986) |
(8,376) |
(8,854) |
Share-based compensation |
720 |
153 |
534 |
1,254 |
330 |
Loss from impairment of intangible assets attributable to the Company |
1,081 |
- |
- |
1,081 |
- |
Loss from impairment of goodwill attributable to the Company |
4,890 |
- |
- |
4,890 |
- |
Non-GAAP net income (loss) attributable to China Finance Online Co. Limited |
301 |
(4,385) |
(1,452) |
(1,151) |
(8,524) |
SOURCE
Julie Zhu, China Finance Online Co. Limited, +86-10-5832-5288, ir@jrj.com; Chenjiazi Zhong, ICR, Inc., +1 646-405-5180