BEIJING, May 17, 2016 /PRNewswire/ -- 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 first quarter
ended March 31, 2016.
"We are off to a solid start in 2016, as evidenced by the
better-than-expected performance of our traditional business, and
the growth and early-stage monetization of our cloud offerings,"
stated Mr. Jianhua Zhu, China
Digital TV's chief executive officer. "In the first quarter, we
were able to expand the registered users on our cloud platform to
2.3 million from 1.7 million only a quarter ago. In addition, we
have already begun to monetize our cloud offerings in Beijing and Chongqing through subscription fees and
purchases of virtual currency. Furthermore, we solidified new
partnerships with telecom and cable operators to launch the
platform in Sichuan, Qingdao, Guizhou and Hebei. Taken together, we expect that these
developments will help us to further accelerate user growth and
develop our cloud offerings into meaningful revenue sources in
2016. Going forward, we will focus not only on driving the regional
expansion of the platform, but also on refining the content
offering, as we add more TV-based games and later expand into other
content, such as education and online shopping. Our progress on the
cloud front speaks to our innovative spirit and reaffirms our
commitment to establishing ourselves as the leading gateway for
interactive cloud-based content into the living room."
Ms. Yue Qian, China Digital TV's acting chief financial officer,
commented, "We expect smart card business to remain challenging and
average selling prices ("ASP") continue to be under pressure in
this quarter. The slight uptick in shipment volumes was supported
by growing demand from India.
These large and rapidly-digitizing markets, which also include
Southeast Asia and the
Middle East, represent a
substantial growth opportunity for us to promote not only smart
card solutions but also digital rights management ("DRM")
solutions. Lastly, we are excited about our plan to separately list
our conditional access and related businesses domestically on the
New Third Board, and we hope to complete this process by the end of
this year."
First Quarter 2016
Results[1]
In the first quarter of 2016, China Digital TV's smart card
shipments increased by 2.3% to 3.02 million from 2.95 million in
the prior year period, primarily driven by increased shipments to
international markets, but partially offset by a decline in
domestic shipments due to the overall maturity of the CA
business.
China Digital TV's net revenues decreased by 7.3% to
US$13.0 million from US$14.0 million in the prior year period. The
decrease was primarily due to a decrease in smart card revenues
caused by the decline in the ASP of smart cards. The decrease in
smart card revenues was partially offset by an increase in revenues
from other services.
Revenues from the Company's top five customers accounted for
36.0% of total revenues, compared to 28.4% in the prior year
period, primarily attributable to the consolidation of certain
cable operators in the market.
Revenue Breakdown
|
|
For the three
months ended
|
|
|
March 31,
|
|
December
31,
|
|
March 31,
|
|
|
2016
|
|
2015
|
|
2015
|
|
|
(in thousands of
U.S. dollars)
|
Products:
|
|
|
|
|
|
|
|
|
|
Smart
cards
|
|
$
|
10,071
|
|
$
|
12,753
|
|
$
|
12,839
|
Other
products
|
|
|
928
|
|
|
1,743
|
|
|
376
|
Subtotal
|
|
|
10,999
|
|
|
14,496
|
|
|
13,215
|
Services:
|
|
|
|
|
|
|
|
|
|
Head-end system
integration
|
|
|
882
|
|
|
1,675
|
|
|
596
|
Head-end system
development
|
|
|
701
|
|
|
1,587
|
|
|
318
|
Licensing
income
|
|
|
192
|
|
|
145
|
|
|
100
|
Royalty
income
|
|
|
14
|
|
|
35
|
|
|
123
|
Other
services
|
|
|
400
|
|
|
193
|
|
|
6
|
Subtotal
|
|
|
2,189
|
|
|
3,635
|
|
|
1,143
|
Total
revenues
|
|
$
|
13,188
|
|
$
|
18,131
|
|
$
|
14,358
|
Revenues from smart cards decreased by 21.6% to
US$10.1 million in the first quarter
of 2016 from US$12.8 million in the
prior year period, primarily due to a decline in ASPs. Sales of
smart cards accounted for 76.4% of total revenues in the first
quarter of 2016, compared to 89.4% in the prior year period.
Revenues from other products increased by 146.8% to
US$0.9 million in the first quarter
of 2016 from US$0.4 million in the
prior year period. The increase was mainly attributable to an
increase in sales of surface mounted chips. Sales of other products
accounted for 7.0% of total revenues in the first quarter of 2016,
compared to 2.6% in the prior year period.
Revenues from services increased by 91.5% to
US$2.2 million in the first quarter
of 2016 from US$1.1 million in the
prior year period. The increase was primarily due to head-end
system development and integration, as well as the expansion and
monetization of the Company's emerging cloud platform. Revenues
from services accounted for 16.6% of total revenues in the first
quarter of 2016, compared to 8.0% in the prior year period.
Cost of revenues from smart cards and other products
increased by 2.6% to US$2.3 million
in the first quarter of 2016 from US$2.2
million in the prior year period. The increase was mainly
due to an increase in cost of revenues from other products, and was
partially offset by a decline in cost of revenues from smart cards.
Cost of revenues from smart cards and other products accounted for
52.3% and 16.1%, respectively, of total cost of revenues in the
first quarter of 2016, compared to 65.0% and 3.4% in the prior year
period.
Cost of revenues from services in the first quarter of
2016 remained relatively stable at US$1.0
million compared to the prior year period. Cost of revenues
from services as a percentage of total cost of revenues also
remained relatively stable at 31.6% in the first quarter of 2016,
compared to the prior year period.
Gross profit in the first quarter of 2016 decreased by
10.3% to US$9.7 million from
US$10.8 million in the prior year
period. Gross margin, was 74.7% in the first quarter of
2016, compared to 77.1% in the prior year period. The decline in
gross margin was primarily due to the decreased portion of total
revenues accounted for by net revenues from smart cards, which have
a higher gross margin than other products and services.
In the first quarter of 2016, the ASP of smart cards decreased
by 23.0% year over year, while the unit cost of smart cards
decreased by 19.5% year over year.
Operating expenses in the first quarter of 2016 decreased
by 18.4% to US$7.8 million from
US$9.6 million in the prior year
period.
- Research and development expenses in the first quarter
of 2016 decreased by 11.5% to US$3.4
million from US$3.9 million in
the prior year period. The decline was mainly due to a decrease in
personnel-related expenses.
- Selling and marketing expenses in the first quarter of
2016 decreased by 31.3% to US$2.4
million from US$3.5 million in
the prior year period. The decline was mainly due to a decrease in
personnel-related expenses.
- General and administrative expenses in the
first quarter of 2016 decreased by 10.4% to US$2.0 million from US$2.2
million in the prior year period. The decline was mainly due
to a decrease in personnel-related expenses.
Income from operations in the first quarter
of 2016 increased by 53.8% to US$1.9
million from US$1.2 million in
the prior year period.
Income tax expenses in the first quarter of 2016
decreased by 11.1% to US$1.3 million
from US$1.4 million in the prior year
period, primarily attributable to a decrease in taxable income.
Net income attributable to holders
of ordinary shares in the first quarter of 2016 increased by
219.3% to US$1.2 million from
US$0.4 million in the prior year
period.
Non-GAAP net
income[2]
attributable to holders of ordinary shares in the first
quarter of 2016 increased by 163.1% to US$1.2 million from US$0.4
million in the prior year
period[3].
Balance Sheet
As of March 31, 2016, China
Digital TV had cash and cash equivalents and restricted cash
totaling US$70.9 million.
Business Outlook
Based on information available as of May
17, 2016, China Digital TV expects smart card shipment
volumes in the second quarter of 2016 to be in the range of 2.0
million to 2.3 million. Net revenues in the second quarter of 2016
are expected to be in the range of US$7.2
million to US$8.2 million.
Conference Call Information
China Digital TV's management will host an earnings conference
call at 8:00 p.m. on Tuesday, March 17, 2016, U.S. Eastern Time
(8:00 a.m. on Wednesday, May 18, 2016, 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
|
Conference
Name:
|
China Digital TV
Holding Co. Ltd. call.
|
A replay of the call will be available for one week between
10:00 p.m. on May 17, 2016 and 10:00
a.m. on May 24, 2016, U.S.
Eastern Time.
Replay Dial-in Information:
United
States:
|
+1-877-344-7529
|
International:
|
+1-412-317-0088
|
Replay Access
Code:
|
10085862
|
Additionally, a live and archived webcast of this call will be
available on the Investor Relations section of China Digital TV's
corporate 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 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.
Simic Chan
Tel: +1 (646) 328-1950
Email: stv@icrinc.com
[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").
|
[2] Non-GAAP net
income (loss) 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.
|
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
|
|
|
March 31,
|
|
December
31,
|
|
March 31,
|
|
2016
|
|
2015
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Products
|
|
$
|
10,999
|
|
$
|
14,496
|
|
$
|
13,215
|
Services
|
|
|
2,189
|
|
|
3,635
|
|
|
1,143
|
Total
revenues
|
|
|
13,188
|
|
|
18,131
|
|
|
14,358
|
Business and
related taxes
|
|
|
(167)
|
|
|
(281)
|
|
|
(309)
|
Net
revenues
|
|
|
13,021
|
|
|
17,850
|
|
|
14,049
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenues:
|
|
|
|
|
|
|
|
|
|
Products
|
|
|
(2,255)
|
|
|
(2,884)
|
|
|
(2,198)
|
Services
|
|
|
(1,043)
|
|
|
(2,906)
|
|
|
(1,013)
|
Total cost of
revenues
|
|
|
(3,298)
|
|
|
(5,790)
|
|
|
(3,211)
|
Gross
profit
|
|
|
9,723
|
|
|
12,060
|
|
|
10,838
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
Research and
development expenses
|
|
|
(3,447)
|
|
|
(3,691)
|
|
|
(3,893)
|
Selling and
marketing expenses
|
|
|
(2,410)
|
|
|
(2,954)
|
|
|
(3,506)
|
General and
administrative expenses
|
|
|
(1,988)
|
|
|
(2,694)
|
|
|
(2,218)
|
Total operating
expenses
|
|
|
(7,845)
|
|
|
(9,339)
|
|
|
(9,617)
|
|
|
|
|
|
|
|
|
|
|
Income from
operations
|
|
|
1,878
|
|
|
2,721
|
|
|
1,221
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
|
337
|
|
|
306
|
|
|
251
|
Other income,
net
|
|
|
167
|
|
|
1,012
|
|
|
64
|
Income before
income tax expenses
|
|
|
2,382
|
|
|
4,039
|
|
|
1,536
|
Income tax
expenses
|
|
|
(1,282)
|
|
|
(1,555)
|
|
|
(1,442)
|
Net income before
share of income /(loss) on
equity method investments
|
|
|
1,100
|
|
|
2,484
|
|
|
94
|
Share of income/(loss)
on equity method
investments, net of
income taxes
|
|
|
10
|
|
|
(140)
|
|
|
(18)
|
Net
income
|
|
|
1,110
|
|
|
2,344
|
|
|
76
|
Net loss/(income)
attributable to noncontrolling
interest
|
|
|
49
|
|
|
(46)
|
|
|
287
|
Net income
attributable to holders of
ordinary
shares
|
|
$
|
1,159
|
|
$
|
2,298
|
|
$
|
363
|
|
|
|
|
|
|
|
|
|
|
Net income per
share attributable to holders
of ordinary shares
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.02
|
|
$
|
0.04
|
|
$
|
0.01
|
Diluted
|
|
$
|
0.02
|
|
$
|
0.04
|
|
$
|
0.01
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
$
|
1,110
|
|
$
|
2,344
|
|
$
|
76
|
Other comprehensive
income/(loss), net of income taxes
Foreign
currency translation adjustment
|
|
|
566
|
|
|
(1,892)
|
|
|
258
|
Comprehensive
income
|
|
|
1,676
|
|
|
452
|
|
|
334
|
Comprehensive
loss/(income) attributable to
noncontrolling
interest
|
|
|
37
|
|
|
(42)
|
|
|
289
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
income attributable to
holders of ordinary shares
|
|
$
|
1,713
|
|
$
|
410
|
|
$
|
623
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares used in calculating
net income per ordinary share
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
60,177,208
|
|
|
60,156,157
|
|
|
59,724,925
|
Diluted
|
|
|
60,576,380
|
|
|
61,126,154
|
|
|
62,111,962
|
China Digital TV
Holding Co., Ltd.
|
Unaudited
Condensed Consolidated Balance Sheets
|
(in thousands of
U.S. dollars)
|
|
|
|
|
|
|
|
ASSETS
|
March
31,
|
|
December
31,
|
2016
|
2015
|
Current
assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
70,833
|
|
$
|
70,138
|
|
Restricted
cash
|
|
34
|
|
|
34
|
|
Notes
receivable
|
|
4,207
|
|
|
4,851
|
|
Accounts receivable,
net
|
|
38,368
|
|
|
38,211
|
|
Inventories
|
|
4,142
|
|
|
4,857
|
|
Prepaid expenses and
other current assets
|
|
4,628
|
|
|
3,782
|
Total current
assets
|
|
122,212
|
|
|
121,873
|
|
Property and
equipment, net
|
|
781
|
|
|
680
|
|
Intangible assets,
net
|
|
332
|
|
|
348
|
|
Goodwill
|
|
1,349
|
|
|
1,343
|
|
Equity method
investments
|
|
3,080
|
|
|
3,055
|
|
Deferred income tax
assets
|
|
3,383
|
|
|
3,451
|
Total
assets
|
|
131,137
|
|
|
130,750
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Accounts
payable
|
|
1,844
|
|
|
1,665
|
|
Accrued expenses and
other current liabilities
|
|
9,398
|
|
|
11,806
|
|
Deferred revenue -
current
|
|
3,476
|
|
|
3,635
|
|
Income tax
payable
|
|
2,480
|
|
|
2,401
|
|
Government subsidies
- current
|
|
823
|
|
|
819
|
Total current
liabilities
|
|
18,021
|
|
|
20,326
|
|
Deferred revenue -
non-current
|
|
115
|
|
|
173
|
|
Government subsidies
- non-current
|
|
2,832
|
|
|
3,024
|
|
Deferred income taxes
liabilities
|
|
5,902
|
|
|
5,421
|
Total
liabilities
|
|
26,870
|
|
|
28,944
|
|
|
|
|
|
|
|
|
|
|
|
|
EQUITY
|
|
|
|
|
|
China Digital TV
Holding Co., Ltd. shareholders'
equity:
|
|
Ordinary
shares
|
|
30
|
|
|
30
|
|
Additional paid-in
capital
|
|
38,007
|
|
|
37,988
|
|
Statutory
reserve
|
|
18,361
|
|
|
18,361
|
|
Retained
earnings
|
|
24,610
|
|
|
23,451
|
|
Accumulated other
comprehensive income
|
|
22,204
|
|
|
21,650
|
Total China
Digital TV Holding Co., Ltd.
shareholders'
equity
|
|
103,212
|
|
|
101,480
|
Noncontrolling
interest
|
|
1,055
|
|
|
326
|
Total
equity
|
|
104,267
|
|
|
101,806
|
TOTAL LIABILITIES
AND EQUITY
|
$
|
131,137
|
|
$
|
130,750
|
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 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.
However, the use of non-GAAP financial measures has material
limitations as an analytical tool. One of the limitations of using
non-GAAP financial measures is that they do not include all items
that impact the Company's net income for the period. In addition,
because non-GAAP financial measures are not measured in the same
manner by all companies, they may not be comparable to other
similar titled measures used by other companies. In light of the
foregoing limitations, you should not consider non-GAAP financial
measure in isolation from or as an alternative to the financial
measure prepared in accordance with U.S. GAAP.
|
|
For the three
months ended
|
|
|
March 31,
|
|
December
31,
|
|
March 31,
|
2016
|
2015
|
2015
|
|
|
(in U.S. dollars,
in thousands)
|
Net income
attributable to China Digital TV
Holding Co., Ltd shareholders -
GAAP
|
|
$
|
1,159
|
|
$
|
2,298
|
|
$
|
363
|
Share-based
compensation expenses
|
|
|
10
|
|
|
16
|
|
|
34
|
Amortization of
intangible assets from business
acquisitions and equity method
investments
|
|
|
12
|
|
|
12
|
|
|
52
|
Net income
attributable to China Digital TV
Holding Co., Ltd shareholders -
Non-GAAP
|
|
$
|
1,181
|
|
$
|
2,326
|
|
$
|
449
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/china-digital-tv-announces-unaudited-first-quarter-2016-results-300269924.html
SOURCE China Digital TV Holding Co., Ltd.