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 August 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.)
(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.)
(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 August 13, 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: August 13, 2015 |
By: |
/s/ Jianhua ZHU |
| |
Name: Jianhua ZHU |
| |
Title: Chief Executive Officer |
Exhibit 99.1
China Digital
TV Announces Unaudited Second Quarter 2015 Results
BEIJING, China,
August 13, 2015 — China Digital TV Holding Co., Ltd. (NYSE: STV) (“China Digital TV” or the “Company”),
the leading provider of cloud-based application platforms and conditional access ("CA") systems which enable China's
digital cable television market to offer and secure diversified content services, today announced its unaudited financial results
for the second quarter ended June 30, 2015.
“In the
second quarter, we remained steadfast in executing our expansion into new frontiers,” stated Mr. Jianhua Zhu, China Digital
TV's chief executive officer. “Our asset restructuring has progressed according to expectations and we hope to complete
it by the end of the year. However, regulatory uncertainties remain and there is no assurance that the deal will close according
to schedule or at all. China Digital TV, however, remains firmly committed to both its traditional business and its emerging cloud
platform business. On the cloud front, Beijing Gehua added approximately 200,000 new registered users in the second quarter bringing
our total to over 500,000, and we also recently signed an agreement with a cable operator in the Xinjiang autonomous region. Our
cloud platform is not only rapidly expanding but also beginning to serve as an ecosystem for content providers to channel their
creativity and mutually benefit with end users, cable operators and platform providers like ourselves.”
Mr. Zhu continued,
“Although the traditional domestic smart card market continued to decline in line with expectations, we saw positive developments
in the network broadcasting platform (NBP) business. We have built key partnerships with Hubei and Guangdong cable operators that
will support future demand for our NBP product. Furthermore, we are in the midst of engaging other provincial cable operators
to commence joint NBP projects in the quarters to come.”
Ms. Yue Qian,
China Digital TV's acting chief financial officer, commented, “Our business continues to evolve; our traditional business’s
performance was soft and we expect that the smart card business will continue to decline over the next couple of quarters. However,
we see great potential with our NBP business, and continue to be impressed by the development of our cloud platform. With a healthy
balance sheet and promising early stage progress in our investments in emerging frontiers, we remain confident regarding the prospects
of our business.”
Second
Quarter 2015 Results1
In the second
quarter of 2015, China Digital TV’s smart card shipments decreased by 40.6% to approximately 2.11 million from 3.55 million
in the prior year period.
China Digital
TV’s net revenues decreased by 39.3% to US$10.4 million from US$17.2 million in the prior year period. The decrease was
primarily due to a decrease in revenues from the sales of smart cards caused by the general market decline of the mature CAS business.
Revenues from
the Company’s top five customers accounted for 37.0% of total revenues, as compared to 23.7% in the prior year period.
1
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”).
Revenue Breakdown
| | |
For
the three months ended | |
| | |
June 30, | | |
March 31, | | |
June 30, | |
| | |
2015 | | |
2015 | | |
2014 | |
| | |
(in
thousands of U.S. dollars) | |
| Products: | |
| | | |
| | | |
| | |
| Smart cards | |
$ | 8,906 | | |
$ | 12,839 | | |
$ | 14,990 | |
| Other products | |
| 428 | | |
| 376 | | |
| 946 | |
| Subtotal | |
| 9,334 | | |
| 13,215 | | |
| 15,936 | |
| Services: | |
| | | |
| | | |
| | |
| Head-end system integration | |
| 504 | | |
| 596 | | |
| 255 | |
| Head-end system development | |
| 345 | | |
| 318 | | |
| 350 | |
| Licensing income | |
| 198 | | |
| 100 | | |
| 868 | |
| Royalty income | |
| 144 | | |
| 123 | | |
| 4 | |
| Other services | |
| 13 | | |
| 6 | | |
| 25 | |
| Subtotal | |
| 1,204 | | |
| 1,143 | | |
| 1,502 | |
| Total
revenues | |
$ | 10,538 | | |
$ | 14,358 | | |
$ | 17,438 | |
Revenues
from smart cards decreased by 40.6% to US$8.9 million in the second quarter of 2015 from US$15.0 million in the prior year
period. The decrease was mainly due to a decrease in shipment volumes of smart cards. Sales of smart cards accounted for 84.5%
of total revenues in the second quarter of 2015, as compared to 86.0% in the prior year period.
Revenues
from other products decreased by 54.8% to US$0.4 million in the second quarter of 2015 from US$0.9 million in the prior year
period. The decrease was mainly attributable to lower sales of surface mounted chips and multimedia home entertainment boxes.
Sales of other products accounted for 4.1% of total revenues in the second quarter of 2015, as compared to 5.4% in the prior year
period.
Revenues
from services decreased by 19.8% to US$1.2 million in the second quarter of 2015 from US$1.5 million in the prior year period.
The decrease was primarily due to the decline in licensing income, which was partially offset by an increase in head-end system
integration. Revenues from services accounted for 11.4% of total revenues in the second quarter of 2015, as compared to 8.6% in
the prior year period.
Cost of
revenues from smart cards and other products decreased by 46.6% to US$2.0 million in the second quarter of 2015 from US$3.7
million in the prior year period. The decrease was mainly due to a decline in cost of revenues from smart cards resulting from
decreased shipment volumes of smart cards, as well as a decline in cost of revenues from multimedia home entertainments and surface
mounted chips resulting from decreased shipment volumes of both products. Cost of revenues from smart cards and other products
accounted for 55.8% and 10.2%, respectively, of total cost of revenues in the second quarter of 2015, as compared to 55.9% and
23.9% in the prior year period.
Cost
of revenues from services increased by 9.0% to US$1.0 million in the second quarter of 2015 from US$0.9 million in the prior
year period. The increase was mainly due to an increase in cost of revenues from head-end
system integration. Cost of revenues from services accounted for 34.0% of total cost of revenues, as compared to 20.2% in the
prior year period.
Gross profit
in the second quarter of 2015 decreased by 40.7% to US$7.5 million from US$12.6 million in the prior year period. Gross
margin, which is equal to gross profit divided by net revenues, was 71.6% in the second quarter of 2015, as compared to 73.3%
in the prior year period. The decline in gross margin was primarily due to a decrease in gross margin of smart cards, attributable
to increased unit cost of smart cards, which accounts for a high proportion of total revenues.
In the second
quarter of 2015, the average selling price of smart cards remained relatively stable, as compared to the prior year period. In
addition, the unit cost of smart cards increased by 8.5%, as compared to the prior year period.
Operating
expenses in the second quarter of 2015 decreased by 11.9% to US$8.2 million from US$9.3 million in the prior year period.
| ● | Research
and development expenses in the second quarter of 2015 decreased by 7.4% to US$3.8
million from US$4.1 million in the prior year period. The decline was mainly due to a
decrease in personnel related expenses resulting from lower headcount. |
| ● | Selling
and marketing expenses in the second quarter of 2015 decreased by 21.3% to US$2.6
million from US$3.3 million in the prior year period. The decline was mainly due to a
decrease in marketing activities relating to the Company’s CA business. |
| ● | General
and administrative expenses in the second quarter of 2015 decreased by 5.6%
to US$1.8 million from US$2.0 million in the prior year period. The decline was mainly
due to a decrease in consulting expenses. |
Loss
from operations in the second quarter of 2015 was US$0.8 million, as compared to an income from operations of US$3.3 million
in the prior year period.
Income tax
expenses in the second quarter of 2015 increased by 242.4% to US$0.9 million from US$0.3 million in the prior year period.
In June 2014, the Company completed an internal reorganization. As a result of the reorganization, income tax expenses were reduced
due to deductible investment losses arising from the equity transfers under the reorganization. Additionally, there was a difference
in tax rate, with the Company's PRC operating subsidiary, Beijing Super TV Co., Ltd., accruing income tax expenses at a rate of
15% in the second quarter of 2015, as compared to 10% in the prior year period. The increase in income tax expenses in this quarter
was mainly due to these two reasons.
Net loss
attributable to holders of ordinary shares in the second quarter of 2015 was US$0.7 million, as compared to a net income attributable
to holders of ordinary shares of US$4.4 million in the prior year period.
Non-GAAP net loss attributable
to holders of ordinary shares2 in the second
quarter of 2015 was US$0.6 million, as compared to a non-GAAP net income attributable to holders of ordinary shares of US$4.7
million in the prior year period3.
Balance
Sheet and Cash Flow
As of June
30, 2015, China Digital TV had cash and cash equivalents and restricted cash totaling US$68.5 million. In the second quarter of
2015, cash flow generated from operations was approximately US$6.6 million.
2
Non-GAAP net income (loss) attributable to holders of ordinary shares
is defined as net income (loss) excluding certain non-cash expenses, such as share-based compensation expenses, amortization of
acquired intangible assets from business acquisitions and equity method investments.
3 For more
information on these non-GAAP financial measures, please see the tables captioned “Reconciliations of non-GAAP measures”
set forth at the end of this release.
Business
Outlook
Based on information
available as of August 13, 2015, China Digital TV expects smart card shipment volumes in the third quarter of 2015 to be in the
range of 2.4 million to 2.7 million. Net revenues in the third quarter of 2015 are expected to be in the range of US$11.1 million
to US$12.4 million.
Conference
Call Information
The Company
will hold an earnings conference call at 8:00 p.m. on Thursday, August 13, 2015, U.S. Eastern Time (8:00 a.m. on Friday, August
14, 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: |
800-905945 |
| China Toll Free: |
4001-201203 |
Passcode: China
Digital TV Holding Co. Ltd. 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 10:00 p.m. on August 13, 2015 and 10:00 a.m. on August 21, 2015 U.S. Eastern Time.
Replay Information
| United States: |
+1-877-344-7529 |
| International: |
+1-412-317-0088 |
| |
|
| Passcode: |
10070044 |
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.
About
China Digital TV
Founded
in 2004, China Digital TV enables television network operators to manage, extend and diversify content services across households
and public areas in China. China Digital TV is the leading provider of cloud-based application platforms and network broadcasting
platform ("NBP") services to Chinese cable operators, helping them to effectively bring mobile gaming apps and other
entertainment options to household television sets, and extend cable programming outside the home to any mobile device. China
Digital TV is also the leading provider of Conditional Access ("CA") systems in China's digital television market. CA
systems enable television network operators to secure the delivery of content to their subscribers. The Company has existing cooperation
with nearly all of China's cable television operators.
For more information
please visit the Investor Relations section of China Digital TV's website at http://ir.chinadtv.cn.
Safe Harbor
Statement
This announcement
contains forward-looking statements within the meaning of Section 27A of the United States Securities Act of 1933, as amended,
and Section 21E of the United States 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
third 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.
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.
For
investor and media inquiries, please contact:
China
Digital TV Holding Co., Ltd.
Nan
Hao
Investor
Relations Manager
Tel:
+86-10-6297-1199 x 9780
Email:
ir@chinadtv.cn
ICR,
Inc.
Charles
Eveslage
Tel:
+1 (646) 328-1950
Email:
stv@icrinc.com
China
Digital TV Holding Co., Ltd.
Unaudited
Condensed Consolidated Statements of Comprehensive Income/(Loss)
(in
thousands of U.S. dollars, except share and per share data )
| | |
For
the three months ended | |
| | |
June 30, | | |
March 31, | | |
June 30, | |
| | |
2015 | | |
2015 | | |
2014 | |
| | |
| | |
| | |
| |
| Revenues: | |
| | | |
| | | |
| | |
| Products | |
$ | 9,334 | | |
$ | 13,215 | | |
$ | 15,936 | |
| Services | |
| 1,204 | | |
| 1,143 | | |
| 1,502 | |
| Total
revenues | |
| 10,538 | | |
| 14,358 | | |
| 17,438 | |
| Business and sales related taxes | |
| (120 | ) | |
| (309 | ) | |
| (279 | ) |
| Net
revenues | |
| 10,418 | | |
| 14,049 | | |
| 17,159 | |
| | |
| | | |
| | | |
| | |
| Cost of revenues: | |
| | | |
| | | |
| | |
| Products | |
| (1,953 | ) | |
| (2,198 | ) | |
| (3,656 | ) |
| Services | |
| (1,007 | ) | |
| (1,013 | ) | |
| (924 | ) |
| Total
cost of revenues | |
| (2,960 | ) | |
| (3,211 | ) | |
| (4,580 | ) |
| Gross
profit | |
| 7,458 | | |
| 10,838 | | |
| 12,579 | |
| | |
| | | |
| | | |
| | |
| Operating expenses: | |
| | | |
| | | |
| | |
| Research and development expenses | |
| (3,816 | ) | |
| (3,893 | ) | |
| (4,121 | ) |
| Selling and marketing expenses | |
| (2,558 | ) | |
| (3,506 | ) | |
| (3,250 | ) |
| General and administrative expenses | |
| (1,844 | ) | |
| (2,218 | ) | |
| (1,953 | ) |
| Total
operating expenses | |
| (8,218 | ) | |
| (9,617 | ) | |
| (9,324 | ) |
| | |
| | | |
| | | |
| | |
| Income/(loss)
from operations | |
| (760 | ) | |
| 1,221 | | |
| 3,255 | |
| | |
| | | |
| | | |
| | |
| Interest income | |
| 282 | | |
| 251 | | |
| 322 | |
| Other income | |
| 486 | | |
| 64 | | |
| 713 | |
| Income
before income taxes | |
| 8 | | |
| 1,536 | | |
| 4,290 | |
| Income tax expenses | |
| | | |
| | | |
| | |
| Income tax-current | |
| (514 | ) | |
| (1,049 | ) | |
| (7,964 | ) |
| Income tax-deferred | |
| (390 | ) | |
| (393 | ) | |
| 7,700 | |
| Net
income/(loss) before net loss from equity method investments | |
| (896 | ) | |
| 94 | | |
| 4,026 | |
| Net loss from equity method investments, net of income taxes | |
| (42 | ) | |
| (18 | ) | |
| (60 | ) |
| Net
income/(loss) | |
| (938 | ) | |
| 76 | | |
| 3,966 | |
| Net loss attributable to noncontrolling interest | |
| 281 | | |
| 287 | | |
| 432 | |
| Net
income/(loss) attributable to holders of ordinary shares | |
$ | (657 | ) | |
$ | 363 | | |
$ | 4,398 | |
| | |
| | | |
| | | |
| | |
| Net income/(loss) per share attributable to holders of ordinary shares | |
| | | |
| | | |
| | |
| Basic | |
$ | (0.01 | ) | |
$ | 0.01 | | |
$ | 0.07 | |
| Diluted | |
$ | (0.01 | ) | |
$ | 0.01 | | |
$ | 0.07 | |
| | |
| | | |
| | | |
| | |
| Net income/(loss) | |
$ | (938 | ) | |
$ | 76 | | |
$ | 3,966 | |
| Other comprehensive (loss)/income, net of tax Foreign currency translation adjustment | |
| (46 | ) | |
| 258 | | |
| (116 | ) |
| Comprehensive
income/(loss) | |
| (984 | ) | |
| 334 | | |
| 3,850 | |
| Comprehensive loss attributable to noncontrolling interest | |
| 291 | | |
| 289 | | |
| 427 | |
| | |
| | | |
| | | |
| | |
| Comprehensive
income/(loss) attributable to holders of ordinary shares | |
$ | (693 | ) | |
$ | 623 | | |
$ | 4,277 | |
| | |
| | | |
| | | |
| | |
| Weighted average shares used in calculating net income per ordinary share | |
| | | |
| | | |
| | |
| Basic | |
| 59,847,896 | | |
| 59,724,925 | | |
| 59,291,789 | |
| Diluted | |
| 59,847,896 | | |
| 62,111,962 | | |
| 61,873,871 | |
China
Digital TV Holding Co., Ltd.
Unaudited
Condensed Consolidated Balance Sheets
(in
thousands of U.S. dollars)
| | |
June 30, | | |
December 31, | |
| ASSETS | |
2015 | | |
2014 | |
| Current assets: | |
| | | |
| | |
| Cash and cash equivalents | |
$ | 68,397 | | |
$ | 62,042 | |
| Restricted cash | |
| 67 | | |
| 78 | |
| Notes receivable | |
| 2,833 | | |
| 5,417 | |
| Accounts receivable, net | |
| 43,969 | | |
| 47,977 | |
| Inventories, net | |
| 5,672 | | |
| 4,966 | |
| Prepaid expenses and other current assets | |
| 4,102 | | |
| 8,964 | |
| Deferred costs-current | |
| 871 | | |
| 710 | |
| Deferred tax assets - current | |
| 2,854 | | |
| 2,387 | |
| Total
current assets | |
| 128,765 | | |
| 132,541 | |
| Long-term receivable | |
| - | | |
| 45 | |
| Property and equipment, net | |
| 668 | | |
| 880 | |
| Intangible assets, net | |
| 402 | | |
| 440 | |
| Goodwill | |
| 1,403 | | |
| 1,402 | |
| Equity method investments | |
| 2,444 | | |
| 2,502 | |
| Deferred costs - non-current | |
| 564 | | |
| 516 | |
| Deferred tax assets - non-current | |
| 525 | | |
| 785 | |
| Total
assets | |
| 134,771 | | |
| 139,111 | |
| | |
| | | |
| | |
| LIABILITIES AND EQUITY | |
| | | |
| | |
| Current liabilities: | |
| | | |
| | |
| Accounts payable | |
| 1,665 | | |
| 2,298 | |
| Notes payable | |
| 32 | | |
| 86 | |
| Accrued expenses and other current liabilities | |
| 11,169 | | |
| 17,652 | |
| Deferred revenue - current | |
| 6,029 | | |
| 4,572 | |
| Income tax payable | |
| 1,328 | | |
| 3,465 | |
| Deferred tax liabilities - current | |
| 4,723 | | |
| 3,727 | |
| Government subsidies - current | |
| 1,900 | | |
| 167 | |
| Total
current liabilities | |
| 26,846 | | |
| 31,967 | |
| Deferred revenue - non-current | |
| 883 | | |
| 617 | |
| Government subsidies - non-current | |
| 2,569 | | |
| 4,390 | |
| Deferred income taxes-non-current | |
| 101 | | |
| 110 | |
| Total
liabilities | |
| 30,399 | | |
| 37,084 | |
| | |
| | | |
| | |
| EQUITY | |
| | | |
| | |
China
Digital TV Holding Co., Ltd. shareholders’ equity: | |
| | | |
| | |
| Ordinary shares | |
| 30 | | |
| 30 | |
| Additional paid-in capital | |
| 37,888 | | |
| 35,639 | |
| Statutory reserve | |
| 17,977 | | |
| 17,977 | |
| Retained earnings | |
| 22,013 | | |
| 22,307 | |
| Accumulated other comprehensive income | |
| 25,733 | | |
| 25,509 | |
| Total
China Digital TV Holding Co., Ltd. shareholders’ equity | |
| 103,641 | | |
| 101,462 | |
| Noncontrolling
interest | |
| 731 | | |
| 565 | |
| Total
equity | |
| 104,372 | | |
| 102,027 | |
| TOTAL
LIABILITIES AND EQUITY | |
$ | 134,771 | | |
$ | 139,111 | |
Reconciliation of Non-GAAP Measures
Non-GAAP net
income (loss) 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 (loss) provides meaningful supplemental information regarding the Company’s performance 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 | |
| | |
June 30, | | |
March 31, | | |
June 30, | |
| | |
2015 | | |
2014 | | |
2014 | |
| | |
(in U.S. dollars, in thousands) | |
| Net
income/(loss) attributable to China Digital TV Holding Co., Ltd shareholders - GAAP | |
$ | (657 | ) | |
$ | 363 | | |
$ | 4,398 | |
| Share-based compensation expenses | |
| 30 | | |
| 34 | | |
| 218 | |
| Amortization of intangible assets from business acquisitions and equity method investments | |
| 51 | | |
| 52 | | |
| 37 | |
| Net
income/(loss) attributable to China Digital TV Holding Co., Ltd shareholders - Non-GAAP | |
$ | (576 | ) | |
$ | 449 | | |
$ | 4,653 | |