SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 6-K

 

Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934

 

For the Month of March 2015

 

Commission File Number 001-33692

 

China Digital TV Holding Co., Ltd.
(Translation of registrant’s name into English)

 

Jingmeng High-Tech Building B, 4th Floor
No. 5 Shangdi East Road
Haidian District, Beijing 100085
People’s Republic of China
(Address of principal executive offices)

 

(Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.)

 

Form 20-F x       Form 40-F ¨

 

(Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):____)

 

(Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ___)

 

(Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.)

 

Yes ¨       No x

 

(If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):82-                .)

 

 
 

 

EXHIBITS

 

Exhibit Number Page
99.1

Press release, dated March 10, 2015

 4

 

 
 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

  CHINA DIGITAL TV HOLDING CO., LTD.
   
   
Date: March 10, 2015 By:        /s/ Zengxiang LU                      
  Name:   Zengxiang LU
  Title:    Chief Executive Officer

 

 

 

 



Exhibit 99.1

 

 

China Digital TV Announces Unaudited Fourth Quarter and Full Year 2014 Results

 

BEIJING, China, March 10, 2015 —China Digital TV Holding Co., Ltd. (NYSE: STV) (“China Digital TV” or the “Company”), the leading provider of conditional access (“CA”) systems and comprehensive services to China’s expanding digital television market, today announced its unaudited financial results for the fourth quarter and full year ended December 31, 2014.

 

Highlights for the Fourth Quarter 2014

 

lNet revenues in the fourth quarter of 2014 were US$29.2 million, representing a 12.8% increase from the same period in 2013 and a 72.3% increase from the third quarter of 2014.

 

lChina Digital TV shipped approximately 5.15 million smart cards in the fourth quarter of 2014, compared to 4.95 million in the same period in 2013 and 3.35 million in the third quarter of 2014.

 

lGross margin in the fourth quarter of 2014 was 80.9%, compared to 76.4% in the same period in 2013 and 75.5% in the third quarter of 2014.

 

lDiluted earnings per American depositary share (each representing one ordinary share), or ADS, in the fourth quarter of 2014 were US$0.18, compared to US$0.17 in the same period in 2013 and US$0.02 in the third quarter of 2014.

 

Highlights for Full Year 2014

 

lNet revenues in 2014 were US$81.5 million, representing a 6.5% decrease from 2013.

 

lChina Digital TV shipped approximately 15.60 million smart cards in 2014, compared to 17.00 million smart cards in 2013.

 

lGross margin was 77.6% in 2014, compared to 75.1% in 2013.

 

lDiluted earnings per ADS in 2014 were US$0.34 compared to US$0.41 in 2013.

 

“We are pleased to report a solid performance in the fourth quarter of 2014, with smart card shipments and net revenue both exceeding our guidance,” said Dr. Lu Zengxiang, China Digital TV's acting chief executive officer. “Our traditional smart card business continued to see steady demand from our major customers, including those in Sichuan, Jiangsu, Jiangxi, Guangdong and Shandong. In the fourth quarter, China Digital TV maintained a leading position in the Chinese smart card market with a 53% share.”

 

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Dr. Lu continued, “In addition to the traditional CA market, we continued to expand our value-added services business in this quarter. We saw further developments in our strategic cloud computing partnership with Beijing Gehua CATV Network Co., Ltd, which grew from 10,000 streams in testing in the third quarter of 2014 to 20,000 streams in the fourth quarter of 2014. We believe the partnership will demonstrate the value of such collaboration to cable operators across China. Our overseas business also saw steady growth. Besides Southeast Asia, where we have made good progress in recent quarters, we will continue to explore opportunities in other emerging markets with diversified businesses.”

 

Ms. Yue Qian, China Digital TV’s acting chief financial officer, commented, “In the fourth quarter, strong top-line growth allowed us to maintain a high gross margin, and effective execution helped us maintain stable operating expenses and increase operating margins compared with the same period in 2013. We will continue to evaluate the best ways to manage our operating expenses and improve overall efficiency.”

 

Fourth Quarter 2014 Results

 

(Note: Unless otherwise stated, all financial statement measures stated in this press release are based on generally accepted accounting principles in the United States (“U.S. GAAP”).)

 

In the fourth quarter of 2014, China Digital TV generated net revenues of US$29.2 million, an increase of 12.8% from the fourth quarter of 2013 and an increase of 72.3% from the third quarter of 2014. The year-over-year increase was primarily due to increases in revenues from (i) services such as head-end system integration, and licensing income and (ii) sales of other products, such as the network broadcasting platform. The quarter-over-quarter increase was principally due to increases in revenues from (i) sales of smart cards and other products, such as the network broadcasting platform, and (ii) services such as head-end system integration, and licensing income.

 

In the fourth quarter of 2014, revenues from the Company’s top five customers accounted for 26.5% of total revenues, compared to 20.8% in the third quarter of 2014.

 

Revenue Breakdown 

 

  

For the three months ended

 
   December 31,   September 30,   December 31, 
   2014   2014   2013 
   (in U.S. dollars, in thousands) 
Products:               
Smart cards  $22,145   $14,382   $23,360 
Other products   2,354    1,556    1,576 
Subtotal   24,499    15,938    24,936 
Services:               
Head-end system integration   3,210    713    531 
Head-end system development   737    208    484 
Licensing income   1,155    182    259 
Royalty income   152    126    46 
Other services   11    2    - 
Subtotal   5,265    1,231    1,320 
Total revenues  $29,764   $17,169   $26,256 

 

 

5
 

Revenues from smart cards and other products in the fourth quarter of 2014 were US$24.5 million, representing a decrease of 1.8% from the same period in 2013 and an increase of 53.7% from the third quarter of 2014. The year-over-year decrease was primarily due to a decrease in revenues from smart card sales caused by a decline in average selling price (“ASP”), and was partially offset by an increase in revenues from sales of other products, such as the network broadcasting platform. The quarter-over-quarter increase was mainly due to an increase in smart card shipments, as well as an increase in revenues from the network broadcasting platform. Revenues from sales of smart cards and other products accounted for 82.3% of total revenues in the fourth quarter of 2014, compared to 92.8% in the preceding quarter.

 

Revenues from services in the fourth quarter of 2014 were US$5.3 million, an increase of 298.9% from the same period in 2013 and an increase of 327.7% from the third quarter of 2014. The year-over-year and quarter-over-quarter increases were primarily due to increases in revenues from head-end system integration and licensing income. Revenues from services accounted for 17.7% of total revenues in the fourth quarter of 2014, compared to 7.2% in the preceding quarter.

 

Gross profit in the fourth quarter of 2014 was US$23.6 million, an increase of 19.3% from the same period in 2013 and an increase of 84.6% from the third quarter of 2014. Gross margin, which is equal to gross profit divided by net revenues, in the fourth quarter of 2014 was 80.9%, compared to 76.4% in the same period in 2013 and 75.5% in the third quarter of 2014. The year-over-year increase was primarily due to a decrease in cost of revenues in the fourth quarter of 2014, reflecting the higher inventory write-down the Company took in the fourth quarter in 2013. The quarter-over-quarter increase was mainly due to an increase in revenues from services, the gross margin on which also increased.

 

In the fourth quarter of 2014, the ASP of smart cards was relatively stable compared to the third quarter of 2014. In addition, the unit cost of smart cards decreased by 13.4% compared to the third quarter of 2014.

 

Operating expenses in the fourth quarter of 2014 were US$11.8 million, an increase of 16.1% from the same period in 2013 and an increase of 12.5% from the third quarter of 2014.

 

·Research and development expenses in the fourth quarter of 2014 were US$4.4 million, an increase of 7.3% from the same period in 2013 and a decrease of 5.3% from the third quarter of 2014. The year-over-year increase was primarily due to an increase in average compensation. The quarter-over-quarter decrease was mainly due to annual bonus adjustment, which was partially offset by an increase in project development expenses.

 

·Selling and marketing expenses in the fourth quarter of 2014 were US$3.2 million, a decrease of 18.7% from the same period in 2013 and a decrease of 5.3% from the third quarter of 2014. The year-over-year decrease was mainly due to a decrease in marketing expenses. The quarter-over-quarter decrease was mainly due to annual bonus adjustment.

 

·General and administrative expenses in the fourth quarter of 2014 were US$4.2 million, an increase of 98.1% from the same period in 2013 and an increase of 71.7% from the third quarter of 2014. The year-over-year and quarter-over-quarter increases were mainly due to increases in consulting expenses, as well as allowance for doubtful accounts.

 

6
 

 

Income from operations in the fourth quarter of 2014 was US$11.9 million, a 22.7% increase from the same period in 2013 and a 408.8% increase from the third quarter of 2014.

 

Operating margin, defined as income from operations divided by net revenues, in the fourth quarter of 2014 was 40.5%, compared to 37.3% in the same period in 2013 and 13.7% in the third quarter of 2014.

 

Interest income in the fourth quarter of 2014 was US$0.2 million, a 75.0% decrease from the same period in 2013 and a 13.5% increase from the third quarter of 2014.

 

Income tax expenses in the fourth quarter of 2014 were US$3.6 million, compared to US$1.1 million in the same period of 2013 and US$1.6 million in the third quarter of 2014. In the fourth quarter of 2013, the Company's PRC operating subsidiary, Beijing Super TV Co., Ltd., was designated as a "key software enterprise" for the tax years of 2013 and 2014 by the relevant PRC government authorities and, as a result, was entitled to a preferential income tax rate of 10% in each of those years. As the Company accrued income tax expenses at a rate of 15% in the first three quarters of 2013, the accrued income tax expenses were partially reversed in the fourth quarter of 2013. The year-over-year increase was mainly due to the above mentioned preferential income tax adjustment in the fourth quarter of 2013, as well as an increase in taxable income in the quarter of 2014. The quarter-over-quarter increase was primarily due to an increase in taxable income.

 

Net loss attributable to noncontrolling interest in the fourth quarter of 2014 was US$0.7 million, an increase of 145.5% from the same period in 2013 and an increase of 79.5% from the third quarter of 2014. The year-over-year and quarter-over-quarter increases were largely due to increases in net losses recorded by the Company’s majority-owned subsidiaries.

 

Net income attributable to holders of ordinary shares in the fourth quarter of 2014 was US$10.9 million, an increase of 8.9% from the same period in 2013 and an increase of 629.6% from the third quarter of 2014.

 

Non-GAAP net income attributable to holders of ordinary shares, defined as net income excluding certain non-cash expenses, such as share-based compensation expenses, amortization of acquired intangible assets from business acquisitions and equity method investments, in the fourth quarter of 2014 was US$11.1 million, an increase of 6.1% from the same period in 2013 and an increase of 541.9% from the third quarter of 2014. For more information on these non-GAAP financial measures, please see the tables captioned “Reconciliation of non-GAAP measures” set forth at the end of this release.

 

7
 

Balance Sheet and Cash Flow

 

As of December 31, 2014, China Digital TV had cash and cash equivalents and restricted cash totaling US$62.1 million. In the fourth quarter of 2014, cash flow generated from operations was approximately US$4.8 million.

 

Full Year 2014 Results

 

Revenue Breakdown

 

   For the twelve months ended 
   December 31,   December 31, 
   2014   2013 
   (in U.S. dollars, in thousands) 
Products:          
Smart cards  $67,108   $78,256 
Other products   6,412    4,670 
Subtotal   73,520    82,926 
Services:          
Head-end system integration   4,591    2,731 
Head-end system development   1,566    1,103 
Licensing income   2,516    1,098 
Royalty income   585    512 
Other services   165    77 
Subtotal   9,423    5,521 
Total revenues  $82,943   $88,447 

 

Net revenues in 2014 were US$81.5 million, a 6.5% decrease from US$87.2 million in 2013 primarily due to a decrease in revenues from sales of smart cards, which were partially offset by increases in revenues from head-end system integration, licensing income and other products, such as surface mounted chips and the network broadcasting platform.

 

Revenues from smart cards and other products in 2014 were US$73.5 million, a decrease of 11.3% from 2013, mainly due to a decline in revenues from sales of smart cards, which, in turn, was primarily attributable to decreases in both sales volume and ASP in 2014 compared to 2013. Revenues from smart cards and other products represented 88.6% of total revenues in 2014.

 

In 2014, revenues from the Company’s top five customers accounted for 26.9% of total revenues, compared to 20.6% in 2013.

 

8
 

 

Revenues from services in 2014 were US$9.4 million, an increase of 70.7% from 2013, primarily due to an increase in head-end system integration and licensing income. Revenues from services represented 11.4% of total revenues in 2014.

 

Gross profit in 2014 was US$63.3 million, a decrease of 3.4% from US$65.5 million in 2013. Gross margin was 77.6% in 2014, compared to 75.1% in 2013. The increase in gross margin was primarily due to a decrease in cost of revenues, reflecting higher inventory write-downs with respect to surface mounted chips, video-on-demand and multimedia home entertainment boxes in 2013.

 

In 2014, the ASP of smart cards decreased by 6.5% compared to 2013. In addition, the unit cost of smart cards increased by 1.3% compared to 2013.

 

Operating expenses in 2014 were US$42.1 million, a decrease of 4.7% from US$44.2 million in 2013.

 

·Research and development expenses in 2014 decreased by 10.3% to US$17.3 million from US$19.3 million in 2013, mainly due to a decrease in project development expenses, office rent expenses, and personnel related expenses resulting from lower research and development headcount, as well as a decrease in share-based compensation.

 

·Sales and marketing expenses in 2014 decreased by 7.2% to US$13.9 million from US$15.0 million in 2013. The decrease was primarily due to a decrease in share-based compensation and marketing expenditures.

 

·General and administrative expenses in 2014 increased by 9.8% to US$10.9 million from US$10.0 million in 2013. The increase was mainly due to an increase in consulting expenses.

 

Income from operations in 2014 was US$21.2 million, a decrease of 0.6% from 2013.

 

Operating margin, defined as income from operations divided by net revenues, was 26.0% in 2014, compared to 24.5% in 2013.

 

Net income attributable to China Digital TV Holding Co., Ltd. in 2014 was US$20.9 million, a decrease of 14.4% from US$24.4 million in 2013.

 

U.S. Federal Income Taxation

 

Based on the Company’s analysis of the value of the Company’s assets and income for the taxable year ended December 31, 2014, the Company believes it was not a passive foreign investment company ("PFIC") for the taxable year ended December 31, 2014. There can be no assurance that the Company will not be a PFIC for the taxable year ending December 31, 2015 or future taxable years, as PFIC status is tested each year and depends on the Company's assets and income in such year. In addition, based on an analysis of the value of the Company’s assets as of the end of prior years, the Company was a PFIC during the taxable years ended December 31, 2009 through 2013 for U.S. federal income tax purposes. Certain holders of the Company’s ADSs or ordinary shares that are subject to U.S. federal income tax and that held ADSs or ordinary shares during any year in which the Company was treated as a PFIC will be subject to special rules that may have materially adverse consequences. Further details about the PFIC rules are available in the Company’s annual reports on Form 20-F for the fiscal year ended December 31, 2013. U.S. holders (as defined in the Form 20-F) of the Company’s ADSs should generally be able to make a mark-to-market election under the PFIC rules. U.S. holders of the Company’s ADSs are advised to consult their own tax advisors regarding the application of the PFIC rules to their particular circumstances, including the consequences of making a mark-to-market election.

 

9
 

 

Business Outlook

 

Based on information available as of March 10, 2015, China Digital TV expects smart card shipments for the first quarter of 2015 to be in the range of 2.9 million to 3.2 million. Net revenues for the first quarter of 2015 are expected to be in the range of US$13.4 million to US$14.6 million.

 

Conference Call Information

 

The Company will hold an earnings conference call at 8:00 p.m. on Tuesday, March 10, 2015, U.S. Eastern Time (8:00 a.m. on Wednesday, March 11, 2015, Beijing/Hong Kong Time).

 

Conference Call Dial-in Information

 

United States Toll Free: +1-888-346-8982
International:             +1-412-902-4272
Hong Kong Toll Free:  800-905-945
China Toll Free:       400-120-1203

 

Passcode: China Digital TV Conference Call

 

Please dial-in 10 minutes before the call is scheduled to begin and provide the passcode to join the call.

 

A replay of the call will be available for one week between 9:00 p.m. on March 10, 2015 and 9:00 p.m. on March 17, 2015 U.S. Eastern Time.

 

Replay Dial-in Information

 

United States:  +1-877-344-7529
International: +1-412-317-0088
Conference ID: 10061048

 

In addition, a live and archived webcast of this conference call will be accessible through the Investor Relations section of China Digital TV’s website at http://ir.chinadtv.cn.

 

Safe Harbor Statements

 

This announcement contains 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. Such forward-looking statements are made under the “safe harbor” provisions of the 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,” “may,” “should” and similar expressions. Such forward-looking statements include, without limitation, statements regarding the outlook for the first quarter of 2015 and comments by management in this announcement about trends in the CA systems, digital television, cable television and related industries in the PRC and China Digital TV’s strategic and operational plans and future market positions. China Digital TV may also make forward-looking statements in its periodic reports filed with the Securities and Exchange Commission, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about China Digital TV’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from projections contained or implied in any forward-looking statement, including but not limited to the following: competition in the CA systems, digital television, cable television and related industries in the PRC and the impact of such competition on prices, our ability to implement our business strategies, changes in technology, the progress of the television digitalization in the PRC, the structure of the cable television industry or television viewer preferences, changes in PRC laws, regulations or policies with respect to the CA systems, digital television, cable television and related industries, including the extent of non-PRC companies’ participation in such industries, and changes in political, economic, legal and social conditions in the PRC, including the government’s policies with respect to economic growth, foreign exchange and foreign investment.

 

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Further information regarding these and other risks and uncertainties is included in our annual report on Form 20-F and other documents filed with the Securities and Exchange Commission. China Digital TV does not assume any obligation to update any forward-looking statements, which apply only as of the date of this press release.

 

 

About China Digital TV

 

Founded in 2004, China Digital TV is the leading provider of CA systems to China’s expanding digital television market. CA systems enable television network operators to manage the delivery of customized content and services to their subscribers. China Digital TV conducts substantially all of its business through its PRC subsidiary, Beijing Super TV Co., Ltd., and its affiliate, Beijing Novel-Super Digital TV Technology Co., Ltd., as well as subsidiaries of such affiliate.

 

For more information please visit the Investor Relations section of China Digital TV’s website at http://ir.chinadtv.cn. The information contained in that website is not a part of this announcement.

 

For investor and media inquiries, please contact:

 

In China:

 

Nan Hao

Investor Relations Manager

Tel: +86-10-6297-1199 x 9780

Email: ir@chinadtv.cn

 

Brunswick Group           

Tel: +86-10-5960-8600             

Email: chinadigital@brunswickgroup.com

 

In the United States:

 

Brunswick Group

Tel: +1-212-333 3810

E-mail: chinadigital@brunswickgroup.com

 

 

4
 

 

China Digital TV Holding Co., Ltd.

Unaudited Condensed Consolidated Statements of Comprehensive Income

(in thousands of U.S. dollars, except share and per share data )  

  

 

   For the three months ended 
   December 31,   September 30,   December 31 
   2014   2014   2013 
             
Revenues:               
Products  $24,499   $15,938   $24,936 
Services   5,265    1,231    1,320 
Total revenues   29,764    17,169    26,256 
Business and sales related taxes   (537)   (205)   (339)
Net revenues   29,227    16,964    25,917 
                
Cost of revenues:               
Products   (4,083)   (3,276)   (5,065)
Services   (1,507)   (886)   (1,040)
Total cost of revenues   (5,590)   (4,162)   (6,105)
Gross Profit   23,637    12,802    19,812 
                
Operating expenses:               
Research and development expenses   (4,430)   (4,677)   (4,127)
Selling and marketing expenses   (3,188)   (3,368)   (3,921)
General and administrative expenses   (4,169)   (2,428)   (2,105)
Total operating expenses   (11,787)   (10,473)   (10,153)
                
Income from operations   11,850    2,329    9,659 
                
Interest income   151    133    603 
Other income   1,930    158    609 
Income before income tax   13,931    2,620    10,871 
Income tax expenses               
Income tax-current   (1,545)   (539)   (468)
Income tax-deferred   (2,054)   (1,051)   (598)
Net income before net income from equity method investments   10,332    1,030    9,805 
Net (loss)/income from equity method investments   (70)   93    (39)
Net income   10,262    1,123    9,766 
Net loss attributable to noncontrolling interest   675    376    　           275 
Net income attributable to China Digital TV Holding Co., Ltd shareholders  $10,937   $1,499   $10,041 
                
Net income per share attributable to ordinary shareholders of China Digital TV Holding Co., Ltd               
Basic  $0.18   $0.03   $0.17 
Diluted  $0.18   $0.02   $0.17 
                
                
Net income  $10,262   $1,123   $9,766 
Other comprehensive (loss) / income, net of tax
Foreign currency translation adjustment		   (1,050)   778    1,164 
Comprehensive income   9,212    1,901    10,930 
Comprehensive loss attributable to noncontrolling interest   684    361    263 
                
Comprehensive income attributable to ordinary shareholders of
China Digital TV Holding Co., Ltd		  $9,896   $2,262   $11,193 
                
                
                
Weighted average shares used in calculating net income per ordinary share               
Basic   59,592,861    59,410,254    59,131,103 
Diluted   62,221,519    62,376,044    59,328,650 

 

 

 

5
 

 

China Digital TV Holding Co., Ltd.

Unaudited Condensed Consolidated Balance Sheets

(in thousands of U.S. dollars)

 

 

 

         
   December 31,   December 31, 
   2014   2013 
         
Current assets:          
Cash and cash equivalents  $62,042   $79,085 
Restricted cash   78    919 
Notes receivable   5,417    4,484 
Accounts receivable, net   47,977    45,905 
Inventories   4,966    5,027 
Prepaid expenses and other current assets   8,964    4,032 
Deferred costs-current   710    141 
Deferred income taxes-current   2,387    2,546 
Total current assets   132,541    142,139 
Long-term receivable   45    224 
Property and equipment, net   880    1,170 
Intangible assets, net   440    6 
Goodwill   1,402    563 
Equity method investments   2,502    3,551 
Deferred costs-non-current   516    214 
Deferred income taxes-non-current   785    939 
Total assets   139,111    148,806 
           
LIABILITIES AND EQUITY          
Current liabilities:          
Accounts payable   2,298    2,207 
Notes payable   86    884 
Accrued expenses and other current liabilities   17,652    13,134 
Dividend payable   -    57 
Deferred revenue-current   4,572    6,542 
Income tax payable   3,465    997 
Deferred tax liabilities-current   3,727    8,222 
Government subsidies-current   167    710 
Total current liabilities   31,967    32,753 
Deferred revenue-non-current   617    135 
Government subsidies-non-current   4,390    4,946 
Deferred income taxes-non-current   110    - 
Total liabilities   37,084    37,834 
           
EQUITY          
China Digital TV Holding Co., Ltd. shareholders’ equity:          
Ordinary shares   30    30 
Additional paid-in capital   35,639    32,037 
Statutory reserve   17,977    17,907 
Retained earnings   22,307    31,122 
Accumulated other comprehensive income   25,509    28,940 
Total China Digital TV Holding Co., Ltd shareholders’ equity   101,462    110,036 
Noncontrolling interest   565    936 
Total equity   102,027    110,972 
TOTAL LIABILITIES AND EQUITY  $139,111   $148,806 

 

6
 

 

    China Digital TV Holding Co., Ltd.

Unaudited Condensed Consolidated Statements of Comprehensive Income

(in thousands of U.S. dollars, except share and per share data )

 

 

   For the twelve months ended 
   December 31,   December 31, 
   2014   2013 
         
Revenues:          
  Products  $73,520   $82,926 
  Services   9,423    5,521 
Total revenues   82,943    88,447 
  Business and sales related taxes   (1,410)   (1,283)
Net revenues   81,533    87,164 
           
Cost of revenues:          
  Products   (13,845)   (17,009)
  Services   (4,384)   (4,652)
Total Cost of Revenues   (18,229)   (21,661)
Gross Profit   63,304    65,503 
           
Operating expenses:          
  Research and development expenses   (17,276)   (19,251)
  Selling and marketing expenses   (13,877)   (14,957)
  General and administrative expenses   (10,935)   (9,959)
Total operating expenses   (42,088)   (44,167)
    　    　 
Income from operations   21,216    21,336 
           
  Interest income   1,312    1,901 
  Other income   3,069    534 
Income before income taxes   25,597    23,771 
Income tax (expenses)/benefits          
  Income tax-current   (10,638)   1,587 
  Income tax-deferred   4,265    (2,314)
Net income before net income from equity method investments   19,224    23,044 
Net loss from equity method investments, net of income taxes   (59)   (468)
Net income   19,165    22,576 
Net loss attributable to noncontrolling interest   1,725    1,832 
Net income attributable to holders of ordinary shares  $20,890   $24,408 
           
Net income per share attributable to holders of ordinary shares          
Basic  $0.35   $0.41 
Diluted  $0.34   $0.41 
           
           
Net income  $19,165   $22,576 
Other comprehensive (loss) / income, net of tax Foreign currency
   translation adjustment		   (3,441)   2,904 
Comprehensive income   15,724    25,480 
Comprehensive loss attributable to   noncontrolling interest   1,735    1,785 
           
Comprehensive income attributable to holders of ordinary shares  $17,459   $27,265 
           
           
           
Weighted average shares used in calculating net income per ordinary share          
Basic   59,369,708    59,111,594 
Diluted   61,716,779    59,176,457 

 

 

 

 

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Reconciliation of Non-GAAP Measures

 

Non-GAAP net income attributable to holders of ordinary shares excludes certain non-cash expenses, such as share-based compensation expenses, amortization of intangible assets acquired from business acquisitions and equity method investments. The Company believes that the non-GAAP net income provides meaningful supplemental information regarding the Company’s performance and liquidity by excluding certain non-cash expenses that may not be indicative of its operating performance from a cash flow perspective. The Company believes that both management and investors benefit from referring to this additional information in assessing the Company’s performance and when planning and forecasting future periods.

 

　   For the three months ended  
　   December 31,    September 30,    December 31,  
    2014    2014    2013  
    (in U.S. dollars, in thousands)  
Net income attributable to China Digital TV
Holding Co., Ltd shareholders - GAAP		    10,937     1,499    $10,041  
Share-based compensation expenses    78     173     338  
Amortization of intangible assets from business acquisitions and
equity method investments		    52     52     55  
Net income attributable to China Digital TV
Holding Co., Ltd shareholders - Non-GAAP		    11,067     1,724    $10,434  

 

 

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