SINA com (NASDAQ:SINA)
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SINA Reports Third Quarter 2003 Financial Results -
Company Reports Revenue Growth of 208% to $31.9 million
SHANGHAI, China, Oct. 27 /PRNewswire-FirstCall/ -- SINA Corporation , a leading
online media company and value-added information service provider for China and
for global Chinese communities, today announced its financial results for the
third quarter ended September 30, 2003:
* Net revenues for the quarter grew by 208% year-over-year and by 23%
quarter-over-quarter to a record $31.9 million
* Advertising revenues for the quarter grew by 76% year-over-year and by
20% quarter-over-quarter to $11.4 million and accounted for 36% of
total revenues
* Non-advertising revenues for the quarter grew by 431% year-over-year
and by 24% quarter-over-quarter to $20.5 million and accounted for 64%
of total revenues
* Operating income for the quarter grew by 71% quarter-over-quarter to
$11.6 million and compared to an operation loss of $0.8 million for the
same period in 2002
* US GAAP net income for the quarter grew to $11.7 million, or $0.21
diluted net income per share, compared to a net loss of $0.6 million,
or $0.01 diluted net loss per share for the same period in 2002
"We're very pleased with our third quarter results," said Yan Wang, CEO of SINA.
"SINA maintained strong growth momentum in all its major business lines. Our
record financial performance in the third quarter further demonstrated our
team's ability to execute well under increasing competition."
Business Results
For the quarter ended September 30, 2003, SINA reported record net revenues of
$31.9 million, an increase of 23% over the previous quarter and an increase of
208% over the same period in 2002.
Advertising revenues totaled $11.4 million for the quarter, representing a 20%
increase over $9.5 million reported in the previous quarter and a 76% increase
over $6.5 million reported in the same period in 2002. The increase in
advertising revenues was primarily driven by an increase in the number of
advertisers.
Non-advertising revenues totaled $20.5 million for the quarter, a 24% increase
over $16.5 million reported in the previous quarter and a 431% increase over
$3.9 million reported in the same period in 2002. Non-advertising revenues
accounted for 64% of the total net revenues for the quarter, compared to 63% for
the previous quarter and 37% for the same period in 2002. The increase in
non-advertising revenues was primarily driven by the growth in mobile content
value added services.
The gross margin for the quarter was a record high of 70%, up from 69% reported
in the previous quarter and 61% reported in the same period in 2002.
"In addition to achieving record revenues, we continued to focus on our products
and branding," said Hurst Lin, Chief Operating Officer of SINA. "On the mobile
content value added service side, we have launched ring back tone service while
continuing to bolster our offerings in MMS and WAP services. On the content
side, we continued to invest significant resources in reporting on key news or
entertainment events such as the Women Soccer World Cup and Miss World Contest.
During China's recent historic man-space flight, SINA provided in-depth and
round-the-clock coverage that led to record daily page views of 150 million for
our news channel, further cementing SINA's position in the minds of the users as
the leading online media in China."
A recent survey conducted by the Chinese Academy of Social Science ranked SINA
as the number one website of choice for Chinese Internet users by a margin 59%
over the second ranked website in China.
Operating expenses for the quarter totaled $10.8 million, a decrease of 3% from
$11.1 million reported in the previous quarter and an increase of 53% over $7.1
million reported in the same period in 2002. The higher operating expenses for
the previous quarter were largely due to one-time charges relating to the
write-off of $0.9 million intangible assets and a $0.6 million severance
benefit.
Operating income for the quarter totaled $11.6 million, an increase of 71% from
$6.8 million reported in the previous quarter. For the same period in 2002, the
Company incurred a loss of $0.8 million from operations.
Net income for the quarter totaled $11.7 million, representing an improvement of
64% from a net income of $7.1 million for the previous quarter. For the same
period in 2002, the Company recorded a net loss of $0.6 million. Diluted net
income per share was $0.21 for the quarter, compared to diluted net income per
share of $0.14 for the previous quarter and diluted net loss per share of $0.01
for the same period in 2002. The Company has included 3.9 million of common
stock equivalents for our outstanding convertible bonds in the shares used in
calculating the diluted net income per share for the quarter ended September 30,
2003, as the bonds met the criteria for contingent conversion during the
quarter.
Excluding the amortization of intangible assets, non-cash charges for stock
based compensation, and one-time charges relating to intangible assets
write-offs and severance benefit, on a pro forma basis, net income for the
quarter totaled $12.3 million, compared to a net income of $9.2 million for the
previous quarter and a net loss of $0.1 million for the same period in 2002.
Diluted net income per share, on a pro forma basis, was $0.21 for the quarter,
compared to diluted net income per share of $0.18 for the previous quarter and
diluted net loss per share of $0.002 for the same period in 2002.
As of September 30, 2003, the Company has recorded an accumulated unrealized
loss of $4.7 million from its investment in Sun Media Group, a Hong Kong listed
company. The Company is closely monitoring the developments of Sun Media Group
and if the Company determines that the decline in value of the Sun Media Group
investment is other than temporary in the future periods, the Company will have
to record such loss as realized in the statements of operations. However, such
loss, if realized in the statements of operations, will not have any impact on
the Company's cash flow in future periods.
As of September 30, 2003, SINA's cash, cash equivalents and investments in
marketable securities totaled $208.2 million, an increase of $111.3 million from
three months ago. Cash flow from operating activities for the quarter was $13.7
million, compared to $9.0 million for the previous quarter. Capital equipment
expenditure for the quarter was about $1.3 million. The Company received $97.3
million net proceeds from its convertible bond offering and approximately $2.5
million in cash from the exercise of employee stock options during the quarter.
"We finished this quarter with record high numbers of advertisers and paid
users. With much improved financial metrics, we have built up a strong and
diverse foundation for our long-term growth," said Charles Chao, Chief Financial
Officer of SINA.
Business Outlook
The Company estimates that its total revenues for Q4 2003 to be between $35.2
million and $36.2 million, with advertising revenues between $12.2 million and
$12.7 million and non-advertising revenues between $23.0 million and $23.5
million. Excluding the effect of any potential realized loss from the
investment in Sun Media Group, US GAAP diluted net income per share is expected
to be $0.24 to $0.25 for Q4 2003. The Company expects that its effective income
tax rate will be approximately 5% for Q4 2003.
NON-GAAP Measures
To supplement our consolidated financial statements presented in accordance with
GAAP, SINA uses non-GAAP measures of gross profit, operating income, net income
and earnings per share, which are adjusted from results based on GAAP to exclude
certain expenses, gains and losses. These non-GAAP measures are provided to
enhance the user's overall understanding of our current financial performance
and our prospects for the future. Specifically, we believe the non-GAAP results
provide useful information to both management and investors by excluding certain
expenses that are not expected to result in future cash payments, gains and
losses that are non-recurring in nature or may not be indicative of our core
operating results. In addition, because we have historically reported certain
non-GAAP results to investors, we believe the inclusion of non-GAAP measures
provides consistency in our financial reporting. These measures should be
considered in addition to results prepared in accordance with generally accepted
accounting principles, but should not be considered a substitute for or superior
to GAAP results. Consistent with our historical practice, the non-GAAP measures
included in this press release have been reconciled to the nearest GAAP
measure.
Conference Call
SINA will host a conference call at 8:30 p.m. Eastern Time today to present an
overview of the Company's financial performance and business operations for the
third quarter. The dial-in number for the call is 617/847-8708. The pass code
is 40888952. A live Webcast of the call will be available from 8:30 p.m. - 9:30
p.m. ET on Monday, October 27, 2003 (9:30 a.m. - 10:30 a.m. Hong Kong Time on
October 28, 2003). The call can be accessed through the Company's corporate web
site at http://corp.sina.com/. The call will be archived for 12 months on SINA's
corporate website at http://corp.sina.com/. A replay of the conference call will
be available for forty-eight hours after the conclusion of the conference call.
The dial-in number is 617/801-6888. The pass code for the replay is 13891558.
About SINA
SINA Corporation (FKA: SINA.com) (NASDAQ:SINA) is a leading online media company
and value-added information service ("VAS") provider for China and for global
Chinese communities. With a branded network of localized web sites targeting
Greater China and overseas Chinese, SINA operates three major business lines
including SINA.com (online media and entertainment service), SINA Online
(consumer fee-based online and wireless VAS) and SINA.net (small and
medium-sized enterprises VAS), providing an array of services including online
portals, premium email, wireless short messaging, virtual ISP, search,
classified information, online games, e-commerce, e-learning and enterprise
e-solutions.
Safe Harbor Statement
This announcement contains forward-looking statements concerning SINA's expected
financial performance (as described without limitation in the Business Outlook
section and quotations from management in this press release regarding the
Company's foundation for long-term growth), as well as SINA's strategic and
operational plans. SINA may also make written or oral forward-looking
statements in our periodic reports to the Securities and Exchange commission on
forms 10-K, 10-Q, 8-K, etc., in its annual report to shareholders, in its proxy
statements, in its offering circulars and prospectuses, 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 our beliefs and expectations, are forward-looking
statements. Forward-looking statements involve inherent risks and
uncertainties. A number of important factors could cause actual results to
differ materially from those contained in any forward-looking statement.
Potential risks and uncertainties include, but are not limited to, SINA's
historical losses, its limited operating history, the uncertain regulatory
landscape in the People's Republic of China, fluctuations in quarterly operating
results, the Company's reliance on its mobile content value added services and
online advertising sales for a majority of its revenues, the Company's reliance
on mobile operators in China to provide wireless short messaging service, any
failure to successfully develop and introduce new products and any failure to
successfully integrate acquired businesses. Further information regarding these
and other risks is included in SINA's Annual Report on Form 10-K for the period
ended December 31, 2002 and its recent reports on Form 10-Q as well as in its
other filings with the Securities and Exchange Commission.
SINA CORPORATION
UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, except per share data)
Three months ended Nine months ended
September 30, June 30, September 30,
2003 2002 2003 2003 2002
Net revenues
Advertising $11,441 $6,491 $9,495 $28,234 $17,325
Non-Advertising 20,473 3,855 16,492 47,781 8,699
31,914 10,346 25,987 76,015 26,024
Cost of revenues
Advertising 3,767 2,977 3,239 9,832 8,420
Non-Advertising 5,790 1,076 4,855 13,912 2,540
Stock-based compensation 5 28 12 31 88
9,562 4,081 8,106 23,775 11,048
Gross profit 22,352 6,265 17,881 52,240 14,976
Operating expenses
Sales and marketing 5,613 3,076 5,086 15,153 9,038
Product development 1,733 1,437 1,407 4,561 4,598
General and administrative 2,923 2,091 3,091 8,130 6,507
Stock-based compensation 88 461 198 516 1,454
Amortization of intangibles 415 -- 414 1,334 1,687
Write-off of intangibles -- -- 903 903 --
10,772 7,065 11,099 30,597 23,284
Income (loss) from operations 11,580 (800) 6,782 21,643 (8,308)
Other income, net 675 552 655 1,731 2,337
Loss on equity investment (175) (311) (316) (797) (453)
Income (loss) before income
taxes 12,080 (559) 7,121 22,577 (6,424)
Provision for income taxes (423) -- -- (423) --
Net income (loss) $11,657 $(559) $7,121 $22,154 $(6,424)
Shares used in computing basic 48,279 45,671 47,661 47,571 45,579
net income (loss) per share
Basic net income (loss) per
share 0.24 (0.01) 0.15 0.47 (0.14)
Shares used in computing
diluted net income (loss)
per share 57,622 45,671 51,971 53,675 45,579
Diluted net income (loss) per
share * $0.21 $(0.01) $0.14 $0.42 $(0.14)
* Diluted net income (loss) per
share calculation
Net income (loss) $11,657 $(559) $7,121 $22,154 $(6,424)
Amortization of convertible
bond issuance cost 170 -- -- 170 --
Net income (loss) used for
diluted net income
(loss) per share calculation $11,827 $(559) $7,121 $22,324 $(6,424)
SINA CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, except per share data)
Three months ended Nine months ended
September 30, June 30, September 30,
2003 2002 2003 2003 2002
Net revenues
Advertising $11,441 $6,491 $9,495 $28,234 $17,325
Non-Advertising 20,473 3,855 16,492 47,781 8,699
31,914 10,346 25,987 76,015 26,024
Cost of revenues
Advertising 3,767 2,977 3,239 9,832 8,420
Non-Advertising 5,790 1,076 4,855 13,912 2,540
9,557 4,053 8,094 23,744 10,960
Gross profit 22,357 6,293 17,893 52,271 15,064
Operating expenses
Sales and marketing 5,613 3,076 5,086 15,153 9,038
Product development 1,733 1,437 1,407 4,561 4,598
General and administrative 2,923 2,091 2,516 7,555 6,507
10,269 6,604 9,009 27,269 20,143
Income (loss) from operations 12,088 (311) 8,884 25,002 (5,079)
Other income, net 845 552 655 1,901 2,337
Loss on equity investment (175) (311) (316) (797) (453)
Pro forma net income (loss)
before income taxes 12,758 (70) 9,223 26,106 (3,195)
Provision for income taxes (423) -- -- (423) --
Pro forma net income (loss) 12,335 (70) 9,223 25,683 (3,195)
Shares used in computing pro
forma basic net income (loss)
per share 48,279 45,671 47,661 47,571 45,579
Pro forma basic net income
(loss) per share 0.26 (0.00) 0.19 0.54 (0.07)
Shares used in computing pro
forma diluted
net income (loss) per share 57,622 45,671 51,971 53,675 45,579
Pro forma diluted net income
(loss) per share $0.21 $(0.00) $0.18 $0.48 $(0.07)
Reconciliation from GAAP
results to pro forma results:
GAAP net income (loss) $11,657 $(559) $7,121 $22,154 $(6,424)
Stock based compensation
Cost of revenues 5 28 12 31 88
Operating expenses 88 461 198 516 1,454
Amortization of intangibles 415 -- 414 1,334 1,687
Amortization of convertible bond
issuance cost 170 170
Write-off of intangibles -- -- 903 903 --
Severance benefit -- 575 575
Pro forma net income (loss) $12,335 $(70) $9,223 $25,683 $(3,195)
SINA CORPORATION
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET
(in thousands U.S. dollar)
September 30 December 31
2003 2002
Assets
Cash, cash equivalents and investments
in marketable securities $208,228 $96,736
Accounts receivable, net 16,610 5,847
Property and equipment, net 8,412 7,599
Long-term investment 10,327 16,637
Goodwill/intangible assets, net 19,075 993
Other assets 7,475 2,667
Total assets $270,127 $130,479
Liabilities and Shareholders' Equity
Liabilities $25,856 $13,092
Convertible Debt 100,000 --
Shareholders' equity 144,271 117,387
Total liabilities and
shareholders' equity $270,127 $130,479
SINA CORPORATION
UNAUDITED SEGMENT INFORMATION
(in thousands)
Three months ended Nine months ended
September 30, June 30, September 30,
2003 2002 2003 2003 2002
Net revenues
Advertising $11,441 $6,491 $9,495 $28,234 $17,325
Mobile related 18,144 2,574 14,177 41,518 5,606
Others 2,329 1,281 2,315 6,263 3,093
$31,914 $10,346 $25,987 $76,015 $26,024
Cost of revenues
Advertising $3,767 $2,977 $3,239 $9,832 $8,420
Mobile related 4,872 811 3,950 11,429 1,820
Others 918 265 905 2,483 720
$9,557 $4,053 $8,094 $23,744 $10,960
DATASOURCE: SINA Corporation
CONTACT: Chen Fu, Investor Relations of SINA Corporation,
+8621-62895678, ext. 6089, ; or Denise Roche of The Ruth
Group, +1-646-536-7008, , for SINA Corporation
Web site: http://www.sina.com/
http://corp.sina.com/