Ku6 Media Reports Unaudited Financial Results for the Third Quarter
of Fiscal Year 2012
BEIJING, Dec. 7, 2012 /PRNewswire/ -- Ku6 Media Co.,
Ltd. ("Ku6 Media" or the "Company," NASDAQ: KUTV), a leading
internet video company, focused on User Generated Content ("UGC")
in China, today announced
unaudited financial results for the third quarter of fiscal year
2012, ended September 30, 2012.
Third Quarter 2012 Highlights (1)
- Total revenues were US$3.06
million (RMB19.21 million) in
the third quarter of 2012, representing an increase of 0.9% from
US$3.03 million in the second quarter
of 2012 and a decrease of 27.7% from US$4.23
million in the third quarter of 2011.
- GAAP net loss was US$3.25 million
(RMB20.43 million), as compared to a
net loss of US$1.47 million in the
second quarter of 2012 and US$12.98
million in the third quarter of 2011. Non-GAAP net loss,
which the Company defines as net loss excluding share-based
compensation expenses, was US$3.26
million (RMB20.46 million) in
the third quarter of 2012, as compared to non-GAAP net loss of
US$1.53 million in the second quarter
of 2012 and US$12.52 million in the
third quarter of 2011.
- Basic and diluted loss per ADS was US$0.07 (RMB0.44)
in the third quarter of 2012, as compared to US$0.03 in the second quarter of 2012 and
US$0.26 in the third quarter of
2011.
- Cash and cash equivalents were US$12.55
million (RMB78.84 million) as
of September 30, 2012.
- Net cash used in operating activities was US$1.92 million (RMB12.07
million) in the third quarter of 2012, as compared to
US$1.41 million in the second quarter
of 2012 and US$8.81 million in the
third quarter of 2011.
- In July 2012, the Company paid
US$8.07 million (RMB50.73 million) to repurchase and immediately
retire an aggregate of 269,409,276 ordinary shares and 79,717
ADSs.
(1) The reporting
currency of the Company is the United States dollar ("U.S.
dollar"), but solely for the convenience of the reader, the amounts
of Renminbi ("RMB") presented throughout the release were
calculated at the rate of US$1.00=RMB6.2848, representing the noon
buying rate as of September 28, 2012 in the City of New York for
cable transfers of RMB as certified for customs purposes by the
Federal Reserve Bank of New York. This convenience translation is
not intended to imply that the U.S. dollar amounts could have been,
or could be, converted, realized or settled into RMB at that rate
on September 28, 2012, or at any other rate.
|
Mr. Jeff Shi, Chief Executive
Officer of Ku6 Media, commented, "I am pleased to announce our
third quarter's earnings release. We have been focused on creating
an interactive online video community based on our value generating
user base and devoted to improving our user experience by improving
our community. During the third quarter, we launched user growth
system, revamped our major website, optimized the search and
recommendation functions, and also enhanced our CDN system. Both
the quality and quantity of our value generating users have been
growing rapidly."
Third Quarter 2012 Financial Results
Total revenues were US$3.06
million (RMB19.21 million) in
the third quarter of 2012, representing an increase of 0.9% from
US$3.03 million in the second quarter
of 2012 and a decrease of 27.7% from US$4.23
million in the third quarter of 2011.
In the second quarter of 2011, the Company started to generate
advertising revenues primarily from performance advertising
services using a system called Application Advertisement ("AA").
The performance advertising revenue was realized through an
affiliated advertising agent which is under common control of
Shanda Interactive Entertainment Limited, the Company's majority
shareholder. The Company generated 94.6% of total revenues in the
third quarter of 2012 through this affiliated advertising agent, as
compared to 94.8% of total revenues in the second quarter of
2012.
Cost of revenues was US$3.66 million (RMB23.02
million) in the third quarter of 2012, remained flat
compared to the second quarter of 2012, decreased 33.2% from
US$5.48 million in the third quarter
of 2011. Gross loss was US$0.61
million (RMB3.81 million) in
the third quarter of 2012, as compared to a gross loss of
US$0.63 million in the second quarter
of 2012 and a gross loss of US$1.25
million in the third quarter of 2011. Non-GAAP gross
loss, which is herein defined as a gross loss excluding
share-based compensation expenses, was US$0.58 million (RMB3.63
million) in the third quarter of 2012, as compared to a
non-GAAP gross loss of US$0.66
million in the second quarter of 2012 and US$1.22 million in the third quarter of 2011.
Operating expenses were US$2.85 million (RMB17.91
million) in the third quarter of 2012, representing an
increase of 73.3% from US$1.64
million in the second quarter of 2012 and a decrease of
74.7% from US$11.28 million in the
third quarter of 2011. Non-GAAP operating expenses, which is
herein defined as operating expenses excluding share-based
compensation expenses, were US$2.88
million (RMB18.11 million) in
the third quarter of 2012, as compared to non-GAAP operating
expenses of US$1.67 million in the
second quarter of 2012 and US$10.85
million in the third quarter of 2011. The sequential
increase was mainly attributable to (1) a net increase of
US$0.61 million (RMB 3.82 million) in litigation expenses due to
the second quarter reversal of accrued liabilities related to
favorable settlements of copyright infringement and (2) a
US$0.47 million (RMB2.95 million) change in bad debt expense due
to the decreased collection of accounts receivable previously
written down.
Operating loss was US$3.46 million (RMB21.71
million) in the third quarter of 2012, representing an
increase of 51.9% from US$2.28
million in the second quarter of 2012 and a decrease of
72.4% from US$12.53 million in the
third quarter of 2011. Non-GAAP operating loss, which
reflects the exclusion of share-based compensation expenses, was
US$3.46 million (RMB21.75 million) in the third quarter of 2012,
as compared to the non-GAAP operating loss of US$2.34 million in the second quarter of 2012 and
US$12.07 million in the third quarter
of 2011.
Net loss was US$3.25
million (RMB20.43 million) in
the third quarter of 2012, representing an increase of 120.9% from
US$1.47 million in the second quarter
of 2012 and a decrease of 75.0% from US$12.98 million in the third quarter of 2011.
Non-GAAP net loss, which reflects the exclusion of
share-based compensation expenses, was US$3.26 million (RMB20.46
million) in the third quarter of 2012, as compared to
US$1.53 million in the second quarter
of 2012 and US$12.52 million in the
third quarter of 2011. The sequential increase in net loss was
primarily attributable to (1) a US$0.73
million (RMB4.59 million)
decrease in government subsidy benefits in the third quarter of
2012; (2) the US$0.61 million
(RMB3.82 million) net increase in
litigation expenses due to the second quarter reversal of accrued
liabilities related to favorable settlements of copyright
infringement and (3) the US$0.47
million (RMB2.95 million) of
changes in bad debt expense.
Net loss attributable to Ku6 Media was
US$3.25 million (RMB20.43 million) in the third quarter of 2012,
as compared to US$1.47 million in the
second quarter of 2012 and US$12.98
million in the third quarter of 2011. Non-GAAP net loss
attributable to Ku6 Media, reflecting the exclusion of share
based compensation expenses, was US$3.26
million (RMB20.46 million) in
the third quarter of 2012, as compared to the non-GAAP net loss
attributable to Ku6 Media of US$1.53
million in the second quarter of 2012 and US$12.52 million in the third quarter of
2011.
Net loss attributable to Ku6 Media per basic and diluted
ADS was US$0.07 (RMB0.44) in the third quarter of 2012, as
compared to US$0.03 in the second
quarter of 2012 and US$0.26 in the
third quarter of 2011. Weighted average ADSs used to calculate
basic and diluted net loss per ADS were 48.3 million in the third
quarter of 2012, 50.2 million in the second quarter of 2012 and
50.2 million in the third quarter of 2011.
Adjusted EBITDA loss, which is herein
defined as net loss attributable to Ku6 Media before interest
income, interest expenses, income taxes, depreciation and
amortization (excluding amortization and write-down of licensed
video copyrights), further adjusted for share-based compensation
expenses, equity in loss of affiliates and other non-operating
items, was US$2.58 million
(RMB16.23 million) in the third
quarter of 2012, as compared to adjusted EBITDA loss of
US$1.48 million in the second quarter
of 2012 and US$10.58 million in the
third quarter of 2011. The increase was primarily due to the
increase in operating expenses.
As of September 30, 2012, the
Company had US$12.55 million
(RMB78.84 million) in cash and cash
equivalents, compared to US$23.28
million as of June 30, 2012.
The decrease was primarily due to the cash payment for share
repurchase in the amount of US$8.08
million (RMB50.80 million) in
the third quarter of 2012.
Recent Business Developments
The Company's Repurchase and Immediate Retirement of Ordinary
Shares and ADSs
On July 12 2012, the Company's
shareholders approved, at the Annual General Meeting, a repurchase
(and retirement thereafter) of certain of the Company's outstanding
shares. This repurchase was settled with cash on July 30, 2012. In this transaction, the Company
repurchased and immediately retired in the aggregate 269,409,276
ordinary shares formerly held by Mr. Shanyou Li (the original founder and former
CEO), Mr. Zhizhong Hao (Former
Senior VP), Ms. Xingye Zeng (Former VP of Sales) and Kumella
Holdings Limited (an investment entity controlled by Mr.
Shanyou Li), at a price of
US$ 0.0291 per share, representing a
premium to the Company's current per share price (in total, such
repurchase amounting to approximately US$7.84 million). The Company also repurchased
and immediately retired 79,717 ADSs (each ADS representing 100
ordinary shares) held by Mr. Shanyou
Li at a price of US$2.91 per
ADS (in total, approximately US$0.23
million), which represented a premium to the then-current
share price.
Given the volatile nature of the Company's per-ADS price as an
appropriate measure of fair value and the susceptibility of the
per-share price to significant changes on small trading volumes,
the Company engaged with an independent financial advisor to assist
its management in determining the appropriate range indicative of
the fair value per ADS. The repurchase price paid fell within an
appropriate indicative range of fair value. The Company recorded
this transaction via a charge to additional paid in capital for the
repurchase amount.
Cooperation with NetEase
In September 2012, the Company
entered into an agreement with NetEase, Inc. ("NetEase," NASDAQ:
NTES), a well-known internet company in China. Pursuant to the agreement, Ku6 Media
will provide technology support for the video related activities on
NetEase's microblog platform, including video uploading and video
sharing. Meanwhile, NetEase's microblog users will be given access
to Ku6 Media video contents via embedded Ku6 Media video
players.
Share Repurchase Program of 2011
Pursuant to a share repurchase program announced December 30, 2011, the Company's Board of
Directors have authorized the Company to repurchase up to an
aggregate of US$3.2 million of its
outstanding ADSs from time to time following the date thereof,
based on market conditions. As of September
30, 2012, the Company has repurchased 11,100 ADSs from open
market under this program.
Conference Call Information
Ku6's management team will be hosting a corresponding conference
call at 8:00am EST on Friday, December 7, 2012 (9:00pm Beijing
time on the same day).
Dial-in
numbers:
|
|
International Dial-in
Number:
|
+65 67239381
|
United States Toll Free
Number:
|
18665194004
|
Mainland China Toll Free
Number:
|
4006208038 /
8008190121
|
Hong Kong Toll Free
Number:
|
800930346
|
Conference
ID:
|
74736454
|
A replay will be available from 1:00am December 8, 2012
EST for 7 days.
International Dial-in
Number:
|
+61 2 8199
0299
|
United States Toll Free
Number:
|
18554525696
|
Mainland China Toll Free
Number:
|
4001200932
|
Hong Kong Toll Free
Number:
|
800963117
|
Conference
ID:
|
74736454
|
A live and archived webcast of the conference call will also be
available at http://www.media-server.com/m/p/z2v9kooi
About Ku6 Media Co., Ltd.
Ku6 Media Co., Ltd. (NASDAQ: KUTV) is a leading internet video
company in China, focusing on User
Generated Content ("UGC"). Through its premier online brand and
online video website, www.ku6.com, Ku6 Media provides online
video uploading and sharing service, video reports, information and
entertainment in China. For more
information about Ku6 Media, please
visit http://ir.ku6.com.
Forward-looking Statements
This news release contains statements of a forward-looking
nature. These statements are made under the "safe harbor"
provisions of the U.S. Private Securities Litigation Reform Act of
1995. You can identify these forward-looking statements by
terminology such as "believes," "could," "expects," "may," "might,"
"should," "will," or "would," and by similar statements.
Forward-looking statements are not historical facts, but instead
represent only the Company's beliefs regarding future events, many
of which, by their nature, are inherently uncertain and outside of
its control. It is possible that the Company's actual results and
financial condition may differ, possibly materially, from the
anticipated results and financial condition indicated in these
forward-looking statements. Some of the risks and important factors
that could affect the Company's future results and financial
condition include: continued competitive pressures in China's internet video portal market; changes
in technology and consumer demand in this market; the risk that Ku6
Media may not be able to control its expenses in the future;
regulatory changes in China with
respect to the operations of internet video portal websites; the
success of Ku6 Media's ability to sell advertising and other
services on its websites; and other risks outlined in the Company's
filings with the Securities and Exchange Commission,including the
Company's annual report on Form 20-F. Ku6 Media does not
undertake any obligation to update this forward-looking
information, except as required under law.
About Non-GAAP Financial Measures
To supplement Ku6 Media's consolidated financial results
presented in accordance with United States Generally Accepted
Accounting Principles ("GAAP"), Ku6 Media uses the following
measures defined as non-GAAP financial measures by the SEC in
evaluating its business: non-GAAP gross profit or loss, non-GAAP
operating expenses, non-GAAP product development expenses, non-GAAP
sales and marketing expenses, non-GAAP general and administrative
expenses, non-GAAP operating loss, non-GAAP net loss, non-GAAP net
loss attributable to Ku6 Media and adjusted EBITDA loss. We
define non-GAAP gross profit or loss, non-GAAP operating expenses,
non-GAAP product development expenses, non-GAAP sales and marketing
expenses, non-GAAP general and administrative expenses, non-GAAP
operating loss, non-GAAP net loss and non-GAAP net loss
attributable to Ku6 Media as the respective nearest comparable GAAP
financial measure excluding share-based compensation expenses. We
define adjusted EBITDA loss as net loss attributable to Ku6 Media
before interest income, interest expenses, income taxes,
depreciation and amortization (excluding amortization and
write-down of licensed video copyrights), further adjusted for
share-based compensation expenses, equity in loss of affiliates and
other non-operating items. We present non-GAAP financial measures
because they are used by our management to evaluate our operating
performance. We also believe that these non-GAAP financial measures
provide useful information to investors and others in understanding
and evaluating our consolidated results of operations in the same
manner as our management and in comparing financial results across
accounting periods and to those of our peer companies. A
limitation of using non-GAAP financial measures is that non-GAAP
measures exclude share-based compensation charges that have been
and will continue to be significant recurring expenses in Ku6
Media's business for the foreseeable future.
The presentation of these non-GAAP financial measures is not
intended to be considered in isolation from, or as a substitute
for, the financial information prepared and presented in accordance
with GAAP. For more information on these non-GAAP financial
measures, please see the table captioned "Reconciliations of
non-GAAP results of operations measures to the nearest comparable
GAAP financial measures" at the end of this release.
Ku6 Media Co.,
Ltd.
Consolidated Balance
Sheets
|
(Amounts in
thousands,
except for number of
shares)
|
December 31, 2011
US$
|
September 30, 2012
US$
(Unaudited)
|
September 30,
2012
RMB
(Unaudited)
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
26,751
|
12,545
|
78,843
|
Restricted cash
|
3,600
|
-
|
-
|
Accounts receivable,
net
|
777
|
11
|
69
|
Accounts receivable due from
related parties
|
2,740
|
3,247
|
20,407
|
Prepaid expenses and other
current assets
|
884
|
738
|
4,638
|
Other receivables due from
related parties
|
19,539
|
10,404
|
65,387
|
Total current
assets
|
54,291
|
26,945
|
169,344
|
Non-current
assets:
|
|
|
|
Deposits
|
307
|
307
|
1,929
|
Property and equipment,
net
|
3,593
|
3,489
|
21,928
|
Acquired intangible assets,
net
|
24,111
|
22,942
|
144,186
|
Investment in equity
affiliate
|
255
|
-
|
-
|
Goodwill
|
6,233
|
6,233
|
39,173
|
Total non-current
assets
|
34,499
|
32,971
|
207,216
|
TOTAL
ASSETS
|
88,790
|
59,916
|
376,560
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Short-term
borrowings
|
3,178
|
-
|
-
|
Accounts payable
|
6,365
|
4,748
|
29,840
|
Accrued expenses and other
current liabilities
|
10,016
|
9,959
|
62,590
|
Other payables due to related
parties
|
13,552
|
3,695
|
23,222
|
Total current
liabilities
|
33,111
|
18,402
|
115,652
|
Non-current deferred tax
liabilities
|
4,826
|
4,826
|
30,330
|
Total
liabilities
|
37,937
|
23,228
|
145,982
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
Ordinary shares (US$0.00005
par value;
12,000,000,000 shares
authorized; 5,019,786,036
shares and 4,741,295,060
shares issued and
outstanding as of
December 31, 2011 and
September 30, 2012,
respectively)
|
251
|
237
|
1,489
|
Additional paid-in
capital
|
184,874
|
177,249
|
1,113,975
|
Accumulated deficit
|
(132,449)
|
(138,959)
|
(873,329)
|
Accumulated other
comprehensive loss
|
(1,823)
|
(1,839)
|
(11,557)
|
Total Ku6 Media Co.,
Ltd. shareholders' equity
|
50,853
|
36,688
|
230,578
|
Non-controlling
interests
|
-
|
-
|
-
|
Total shareholders'
equity
|
50,853
|
36,688
|
230,578
|
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY
|
88,790
|
59,916
|
376,560
|
Ku6 Media Co.,
Ltd.
Consolidated
Statements of Operations
|
|
For the Three Months
Ended
|
For the Nine Months
Ended
|
(Amounts in
thousands, except for
number of shares and ADS and
per share and per ADS data)
|
September 30,
2011
|
June
30,
2012
|
September 30,
2012
|
September 30,
2012
|
September 30,
2011
|
September 30,
2012
|
September 30,
2012
|
US$
|
US$
|
US$
|
RMB
|
US$
|
US$
|
RMB
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
Revenues:
|
|
|
|
|
|
|
|
Advertising
|
|
|
|
|
|
|
|
Third parties
|
1,100
|
158
|
161
|
1,012
|
10,169
|
1,214
|
7,630
|
Related parties
|
3,129
|
2,871
|
2,895
|
18,194
|
4,632
|
9,551
|
60,026
|
Total
revenues
|
4,229
|
3,029
|
3,056
|
19,206
|
14,801
|
10,765
|
67,656
|
|
|
|
|
|
|
|
|
Cost of
revenues:
|
|
|
|
|
|
|
|
Advertising
|
|
|
|
|
|
|
|
Third parties
|
5,482
|
3,660
|
3,662
|
23,015
|
26,268
|
10,853
|
68,209
|
Related parties
|
-
|
-
|
-
|
-
|
380
|
-
|
-
|
Total cost of
revenues
|
5,482
|
3,660
|
3,662
|
23,015
|
26,648
|
10,853
|
68,209
|
|
|
|
|
|
|
|
|
Gross
loss
|
(1,253)
|
(631)
|
(606)
|
(3,809)
|
(11,847)
|
(88)
|
(553)
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Product development
|
857
|
363
|
468
|
2,941
|
2,101
|
1,410
|
8,862
|
Sales and marketing
|
2,005
|
240
|
283
|
1,778
|
11,799
|
892
|
5,606
|
General and
administrative
|
8,413
|
1,041
|
2,098
|
13,186
|
19,637
|
5,015
|
31,518
|
Total operating
expenses
|
11,275
|
1,644
|
2,849
|
17,905
|
33,537
|
7,317
|
45,986
|
|
|
|
|
|
|
|
|
Operating
loss
|
(12,528)
|
(2,275)
|
(3,455)
|
(21,714)
|
(45,384)
|
(7,405)
|
(46,539)
|
|
|
|
|
|
|
|
|
Interest
income
|
49
|
162
|
129
|
810
|
89
|
462
|
2,904
|
Other income
|
32
|
993
|
256
|
1,609
|
730
|
1,249
|
7,850
|
Interest
expenses
|
(330)
|
(213)
|
(114)
|
(716)
|
(786)
|
(564)
|
(3,545)
|
Equity in loss of
affiliates
|
(201)
|
(138)
|
(66)
|
(415)
|
(201)
|
(252)
|
(1,584)
|
Loss before income
tax expense
|
(12,978)
|
(1,471)
|
(3,250)
|
(20,426)
|
(45,552)
|
(6,510)
|
(40,914)
|
|
|
|
|
|
|
|
|
Income tax
benefit
|
-
|
-
|
-
|
-
|
99
|
-
|
-
|
|
|
|
|
|
|
|
|
Net
loss
|
(12,978)
|
(1,471)
|
(3,250)
|
(20,426)
|
(45,453)
|
(6,510)
|
(40,914)
|
Less: Net loss
attributable to non-controlling interests
|
2
|
-
|
-
|
-
|
47
|
-
|
-
|
Net loss attributable
to Ku6 Media Co., Ltd.
|
(12,976)
|
(1,471)
|
(3,250)
|
(20,426)
|
(45,406)
|
(6,510)
|
(40,914)
|
|
|
|
|
|
|
|
|
Loss per share -
basic and diluted
|
|
|
|
|
|
|
|
Net loss attributable to
Ku6 Media Co., Ltd. ordinary
shareholders
|
(US$0.00)
|
(US$0.00)
|
(US$0.00)
|
(RMB0.00)
|
(US$0.01)
|
(US$0.00)
|
(RMB0.00)
|
|
|
|
|
|
|
|
|
Loss per ADS - basic
and diluted
|
|
|
|
|
|
|
|
Net loss attributable to
Ku6 Media Co., Ltd. ordinary
shareholders
|
(US$0.26)
|
(US$0.03)
|
(US$0.07)
|
(RMB0.44)
|
(US$1.13)
|
(US$0.13)
|
(RMB0.82)
|
|
|
|
|
|
|
|
|
Weighted average shares
used in per share
calculation - basic and diluted
|
5,019,786,036
|
5,019,786,036
|
4,832,763,530
|
4,832,763,530
|
4,011,011,072
|
4,956,990,158
|
4,956,990,158
|
Weighted average ADSs
used in per ADS calculation -
basic and diluted
|
50,197,860
|
50,197,860
|
48,327,635
|
48,327,635
|
40,110,111
|
49,569,902
|
49,569,902
|
|
|
|
|
|
|
|
|
|
|
|
Ku6 Media Co.,
Ltd.
Consolidated
Statements of Cash Flows
|
|
For the Three Months
Ended
|
For the Nine Months
Ended
|
(Amounts in
thousands)
|
September 30,
2011
|
June
30,
2012
|
September 30,
2012
|
September 30,
2012
|
September 30,
2011
|
September 30,
2012
|
September 30,
2012
|
US$
|
US$
|
US$
|
RMB
|
US$
|
US$
|
RMB
|
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
Net
loss
|
(12,978)
|
(1,471)
|
(3,250)
|
(20,426)
|
(45,453)
|
(6,510)
|
(40,914)
|
Adjustments to reconcile
net loss to net cash used in operating activities:
|
|
|
|
|
|
|
|
Share-based compensation
(reversal)
|
461
|
(60)
|
(5)
|
(31)
|
1,754
|
444
|
2,790
|
Share-based compensation cost
in relation to disposition of Yisheng
|
522
|
-
|
-
|
-
|
522
|
-
|
-
|
Depreciation and
amortization
|
1,482
|
851
|
877
|
5,512
|
4,347
|
2,553
|
16,045
|
Amortization and write-down of
licensed video copyrights
|
611
|
-
|
-
|
-
|
3,429
|
1
|
6
|
Impairment of intangible
assets
|
-
|
-
|
-
|
-
|
1,365
|
-
|
-
|
Bad debt provision
(reversal)
|
1,139
|
(656)
|
(187)
|
(1,175)
|
3,522
|
(2,202)
|
(13,839)
|
Reversal of legal provision
|
-
|
(565)
|
-
|
-
|
-
|
(565)
|
(3,551)
|
Exchange loss
(gain)
|
239
|
(3)
|
(93)
|
(584)
|
317
|
(101)
|
(635)
|
Equity in loss of
affiliates
|
201
|
138
|
66
|
415
|
201
|
252
|
1,584
|
Loss (gain) on disposal of
property and equipments
|
2,942
|
(22)
|
-
|
-
|
2,978
|
(21)
|
(132)
|
Changes in assets and
liabilities, net of acquisitions and dispositions:
|
|
|
|
|
|
|
|
Accounts receivable
|
1,980
|
733
|
188
|
1,182
|
2,217
|
2,969
|
18,660
|
Prepaid expenses and other
current assets
|
(3,520)
|
169
|
(290)
|
(1,823)
|
(1,200)
|
145
|
911
|
Amount due from related
parties
|
(2,723)
|
999
|
232
|
1,458
|
(3,738)
|
(603)
|
(3,790)
|
Deposits and other non-current
assets
|
33
|
-
|
-
|
-
|
(285)
|
-
|
-
|
Inventories
|
-
|
-
|
-
|
-
|
31
|
-
|
-
|
Accounts payable
|
(2,540)
|
(517)
|
658
|
4,135
|
862
|
(1,381)
|
(8,679)
|
Accrued expenses and other
current liabilities
|
3,491
|
(1,063)
|
(171)
|
(1,075)
|
3,237
|
508
|
3,193
|
Amount due to related
parties
|
(153)
|
53
|
54
|
339
|
385
|
107
|
673
|
Income tax payable
|
-
|
-
|
-
|
-
|
(99)
|
-
|
-
|
Net cash used in
operating activities
|
(8,813)
|
(1,414)
|
(1,921)
|
(12,073)
|
(25,608)
|
(4,404)
|
(27,678)
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
Purchases of property
and equipment
|
(289)
|
(28)
|
(1,092)
|
(6,863)
|
(1,220)
|
(1,272)
|
(7,994)
|
Proceeds from disposal
of property and equipments
|
-
|
23
|
-
|
-
|
-
|
23
|
145
|
Payments for
licensed video copyrights
|
(1,388)
|
(8)
|
(88)
|
(553)
|
(5,376)
|
(236)
|
(1,483)
|
Cash-out from disposal
of subsidiaries, net of cash disposed
|
(112)
|
-
|
-
|
-
|
(112)
|
-
|
-
|
Restricted cash for
pledge of bank loans
|
(5,666)
|
-
|
3,600
|
22,625
|
(5,666)
|
3,600
|
22,625
|
Loans to related parties
under common control by Shanda
|
(7,408)
|
-
|
-
|
-
|
(14,108)
|
(470)
|
(2,954)
|
Repayment of loans to
related parties under common control by Shanda
|
-
|
9,700
|
-
|
-
|
-
|
9,700
|
60,962
|
Net cash provided by
(used in) investing activities
|
(14,863)
|
9,687
|
2,420
|
15,209
|
(26,482)
|
11,345
|
71,301
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
Proceeds from exercise
of stock options
|
-
|
-
|
-
|
-
|
4
|
-
|
-
|
Proceeds from issuance
of common shares to Shanda
|
-
|
-
|
-
|
-
|
50,000
|
-
|
-
|
Proceeds from issuance
of convertible bonds to Shanda
|
-
|
-
|
-
|
-
|
50,000
|
-
|
-
|
Cash paid for redemption
of convertible bonds to Shanda
|
(50,000)
|
-
|
-
|
-
|
(50,000)
|
-
|
-
|
Repurchase of ordinary
shares
|
-
|
-
|
(8,083)
|
(50,800)
|
-
|
(8,083)
|
(50,800)
|
Borrowings from
bank
|
2,093
|
-
|
-
|
-
|
2,093
|
-
|
-
|
Repayment for loans from
bank
|
-
|
-
|
(3,148)
|
(19,785)
|
-
|
(3,148)
|
(19,785)
|
Borrowings from related
parties under common control by Shanda
|
575
|
-
|
-
|
-
|
13,336
|
-
|
-
|
Repayment of loans from
related parties under common control of Shanda
|
(12)
|
(6,768)
|
-
|
-
|
(12)
|
(9,904)
|
(62,244)
|
Net cash provided by
(used in) financing activities
|
(47,344)
|
(6,768)
|
(11,231)
|
(70,585)
|
65,421
|
(21,135)
|
(132,829)
|
Effect of exchange rate
changes on cash and cash equivalents
|
1,205
|
(9)
|
(5)
|
(31)
|
1,003
|
(12)
|
(76)
|
Net increase
(decrease) in cash and cash equivalents
|
(69,815)
|
1,496
|
(10,737)
|
(67,480)
|
14,334
|
(14,206)
|
(89,282)
|
Cash and cash
equivalents, beginning of period
|
111,444
|
21,786
|
23,282
|
146,323
|
27,295
|
26,751
|
168,125
|
Cash and cash
equivalents, end of period
|
41,629
|
23,282
|
12,545
|
78,843
|
41,629
|
12,545
|
78,843
|
|
|
|
|
|
|
|
|
|
Reconciliations of Non-GAAP results of operations measures to
the nearest comparable GAAP financial measures (*)
(Amounts in thousands of United
States dollars ("US$") and Renminbi ("RMB"), unaudited)
1. Non-GAAP Gross Profit
(Loss)
|
|
For the Three Months Ended
|
|
For the Nine Months Ended
|
|
|
|
September 30,
|
|
June 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
|
|
2011
|
|
2012
|
|
2012
|
|
2012
|
|
2011
|
|
2012
|
|
2012
|
|
|
|
US$
|
|
US$
|
|
US$
|
|
RMB
|
|
US$
|
|
US$
|
|
RMB
|
|
Gross loss
|
|
(1,253)
|
|
(631)
|
|
(606)
|
|
(3,809)
|
|
(11,847)
|
|
(88)
|
|
(553)
|
|
Add back: share-based
compensation
|
|
34
|
|
(31)
|
|
28
|
|
176
|
|
531
|
|
92
|
|
578
|
|
Non-GAAP gross profit
(loss)
|
|
(1,219)
|
|
(662)
|
|
(578)
|
|
(3,633)
|
|
(11,316)
|
|
4
|
|
25
|
|
2. Non-GAAP Operating
Expenses
|
|
For the Three Months Ended
|
|
For the Nine Months Ended
|
|
|
September 30,
|
|
June 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
|
2011
|
|
2012
|
|
2012
|
|
2012
|
|
2011
|
|
2012
|
|
2012
|
|
|
US$
|
|
US$
|
|
US$
|
|
RMB
|
|
US$
|
|
US$
|
|
RMB
|
Operating expenses
|
|
11,275
|
|
1,644
|
|
2,849
|
|
17,905
|
|
33,537
|
|
7,317
|
|
45,986
|
Deduct: share-based
compensation
|
|
427
|
|
(29)
|
|
(33)
|
|
(207)
|
|
1,223
|
|
352
|
|
2,212
|
Non-GAAP operating
expenses
|
|
10,848
|
|
1,673
|
|
2,882
|
|
18,112
|
|
32,314
|
|
6,965
|
|
43,774
|
3. Non-GAAP Product
Development Expenses
|
|
For the Three Months Ended
|
|
For the Nine Months Ended
|
|
|
September 30,
|
|
June 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
|
2011
|
|
2012
|
|
2012
|
|
2012
|
|
2011
|
|
2012
|
|
2012
|
|
|
US$
|
|
US$
|
|
US$
|
|
RMB
|
|
US$
|
|
US$
|
|
RMB
|
Product development expenses
|
|
857
|
|
363
|
|
468
|
|
2,941
|
|
2,101
|
|
1,410
|
|
8,862
|
Deduct: share-based
compensation
|
|
140
|
|
(40)
|
|
22
|
|
138
|
|
345
|
|
41
|
|
258
|
Non-GAAP product
development expenses
|
|
717
|
|
403
|
|
446
|
|
2,803
|
|
1,756
|
|
1,369
|
|
8,604
|
4. Non-GAAP Sales and
Marketing Expenses
|
|
For the Three Months Ended
|
|
For the Nine Months Ended
|
|
|
September 30,
|
|
June 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
|
2011
|
|
2012
|
|
2012
|
|
2012
|
|
2011
|
|
2012
|
|
2012
|
|
|
US$
|
|
US$
|
|
US$
|
|
RMB
|
|
US$
|
|
US$
|
|
RMB
|
Sales and marketing expenses
|
|
2,005
|
|
240
|
|
283
|
|
1,778
|
|
11,799
|
|
892
|
|
5,606
|
Deduct: share-based
compensation
|
|
(2)
|
|
(17)
|
|
8
|
|
50
|
|
444
|
|
20
|
|
126
|
Non-GAAP sales and
marketing expenses
|
|
2,007
|
|
257
|
|
275
|
|
1,728
|
|
11,355
|
|
872
|
|
5,480
|
5. Non-GAAP General and
Administrative Expenses
|
|
For the Three Months Ended
|
|
For the Nine Months Ended
|
|
|
September 30,
|
|
June 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
|
2011
|
|
2012
|
|
2012
|
|
2012
|
|
2011
|
|
2012
|
|
2012
|
|
|
US$
|
|
US$
|
|
US$
|
|
RMB
|
|
US$
|
|
US$
|
|
RMB
|
General and administrative expenses
|
|
8,413
|
|
1,041
|
|
2,098
|
|
13,186
|
|
19,637
|
|
5,015
|
|
31,518
|
Deduct: share-based
compensation
|
|
289
|
|
28
|
|
(63)
|
|
(395)
|
|
434
|
|
291
|
|
1,828
|
Non-GAAP general and
administrative expenses
|
|
8,124
|
|
1,013
|
|
2,161
|
|
13,581
|
|
19,203
|
|
4,724
|
|
29,690
|
6. Non-GAAP Operating
Loss
|
|
For the Three Months Ended
|
|
For the Nine Months Ended
|
|
|
September 30,
|
|
June 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
|
2011
|
|
2012
|
|
2012
|
|
2012
|
|
2011
|
|
2012
|
|
2012
|
|
|
US$
|
|
US$
|
|
US$
|
|
RMB
|
|
US$
|
|
US$
|
|
RMB
|
Operating loss
|
|
(12,528)
|
|
(2,275)
|
|
(3,455)
|
|
(21,714)
|
|
(45,384)
|
|
(7,405)
|
|
(46,539)
|
Add back: share-based
compensation
|
|
461
|
|
(60)
|
|
(5)
|
|
(31)
|
|
1,754
|
|
444
|
|
2,790
|
Non-GAAP operating
loss
|
|
(12,067)
|
|
(2,335)
|
|
(3,460)
|
|
(21,745)
|
|
(43,630)
|
|
(6,961)
|
|
(43,749)
|
7. Non-GAAP Net
Loss
|
|
For the Three Months Ended
|
|
For the Six Months Ended
|
|
|
September 30,
|
|
June 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
|
2011
|
|
2012
|
|
2012
|
|
2012
|
|
2011
|
|
2012
|
|
2012
|
|
|
US$
|
|
US$
|
|
US$
|
|
RMB
|
|
US$
|
|
US$
|
|
RMB
|
Net loss
|
|
(12,978)
|
|
(1,471)
|
|
(3,250)
|
|
(20,426)
|
|
(45,453)
|
|
(6,510)
|
|
(40,914)
|
Add back: share-based
compensation
|
|
461
|
|
(60)
|
|
(5)
|
|
(31)
|
|
1,754
|
|
444
|
|
2,790
|
Non-GAAP net
loss
|
|
(12,517)
|
|
(1,531)
|
|
(3,255)
|
|
(20,457)
|
|
(43,699)
|
|
(6,066)
|
|
(38,124)
|
8. Non-GAAP Net Loss
Attributable to Ku6 Media Co., Ltd.
|
|
For the Three Months Ended
|
|
For the Nine Months Ended
|
|
|
September 30,
|
|
June 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
|
2011
|
|
2012
|
|
2012
|
|
2012
|
|
2011
|
|
2012
|
|
2012
|
|
|
US$
|
|
US$
|
|
US$
|
|
RMB
|
|
US$
|
|
US$
|
|
RMB
|
Net loss attributable to Ku6 Media Co., Ltd.
|
|
(12,976)
|
|
(1,471)
|
|
(3,250)
|
|
(20,426)
|
|
(45,406)
|
|
(6,510)
|
|
(40,914)
|
Add back: share-based
compensation
|
|
461
|
|
(60)
|
|
(5)
|
|
(31)
|
|
1,754
|
|
444
|
|
2,790
|
Non-GAAP net loss
attributable to Ku6 Media Co., Ltd.
|
|
(12,515)
|
|
(1,531)
|
|
(3,255)
|
|
(20,457)
|
|
(43,652)
|
|
(6,066)
|
|
(38,124)
|
9. Adjusted EBITDA
Loss
|
|
For the Three Months Ended
|
|
For the Nine Months Ended
|
|
|
|
September 30,
|
|
June 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
|
|
2011
|
|
2012
|
|
2012
|
|
2012
|
|
2011
|
|
2012
|
|
2012
|
|
|
|
US$
|
|
US$
|
|
US$
|
|
RMB
|
|
US$
|
|
US$
|
|
RMB
|
|
Net loss attributable to
Ku6 Media Co., Ltd.
|
|
(12,976)
|
|
(1,471)
|
|
(3,250)
|
|
(20,426)
|
|
(45,406)
|
|
(6,510)
|
|
(40,914)
|
|
Add back
(deduct):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
(49)
|
|
(162)
|
|
(129)
|
|
(810)
|
|
(89)
|
|
(462)
|
|
(2,904)
|
|
Interest expenses
|
|
330
|
|
213
|
|
114
|
|
716
|
|
786
|
|
564
|
|
3,545
|
|
Income tax benefit
|
|
-
|
|
|
-
|
-
|
|
-
|
|
(99)
|
|
-
|
|
-
|
|
Depreciation and amortization
(excluding amortization and
ite-down of licensed video
copyrights)
|
|
1,482
|
|
851
|
|
877
|
|
5,512
|
|
4,347
|
|
2,553
|
|
16,045
|
|
EBITDA loss
|
|
(11,213)
|
|
(569)
|
|
(2,388)
|
|
(15,008)
|
|
(40,461)
|
|
(3,855)
|
|
(24,228)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based
compensation
|
|
461
|
|
(60)
|
|
(5)
|
|
(31)
|
|
1,754
|
|
444
|
|
2,790
|
|
Equity in loss of
affiliates
|
|
201
|
|
138
|
|
66
|
|
415
|
|
201
|
|
252
|
|
1,584
|
|
Other income
|
|
(32)
|
|
(993)
|
|
(256)
|
|
(1,609)
|
|
(730)
|
|
(1,249)
|
|
(7,850)
|
|
Adjusted EBITDA
loss
|
|
(10,583)
|
|
(1,484)
|
|
(2,583)
|
|
(16,233)
|
|
(39,236)
|
|
(4,408)
|
|
(27,704)
|
|
* For more information on the Non-GAAP financial measures,
please see the section captioned "About Non-GAAP Financial
Measures" in the earnings release.
SOURCE Ku6 Media Co., Ltd.