BEIJING, Aug. 13, 2015 /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 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
Results[1]
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.
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
shares[2] 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
period[3].
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.
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
[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) 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.
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)
|
|
ASSETS
|
June
30,
2015
|
|
December
31,
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
|
|
|
|
|
|
|
|
|
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/china-digital-tv-announces-unaudited-second-quarter-2015-results-300128082.html
SOURCE China Digital TV Holding Co., Ltd.