Company Reports Revenue Growth of 208% to $31.9 millionSHANGHAI, China, Oct 27, 2003 /PRNewswire-FirstCall via COMTEX/ -- SINA Corporation
(Nasdaq: SINA), 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
SOURCE SINA Corporation
CONTACT:
Chen Fu,
Investor Relations of SINA Corporation,
+8621-62895678, ext. 6089,
fuchen@staff.sina.com; or
Denise Roche of The Ruth
Group,
+1-646-536-7008,
droche@theruthgroup.com,
for SINA Corporation
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