The Company Reports Net Revenues of $41.4 Million and
U.S. GAAP Net Income of $16.0 Million
SHANGHAI, China, April 27 /Xinhua-PRNewswire/ -- 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 first quarter ended March 31, 2004:
- Net revenues for the quarter grew by 128.5% year-over-year to a
record $41.4 million
- Advertising revenues for the quarter grew by 79.8% year-over-year to
$13.1 million and accounted for 31.7% of total revenues
- Non-advertising revenues for the quarter grew by 161.4% year-over-year
and accounted for 68.3% of total revenues
- US GAAP net income for the quarter was $16.0 million; or $0.28 diluted
net income per share, compared to a net income of $3.4 million, or
$0.07 diluted net income per share for the same period in 2003.
- Pro forma net income for the quarter was $16.6 million, or
$0.29 diluted net income per share, compared to a pro forma net income
of $4.1 million, or $0.08 diluted net income per share for the same
period in 2003.
- Cash flow from operating activities for the quarter was $19.7 million,
compared to $3.8 million for the same period in 2003.
"In this past quarter, we have again performed above our expectation to
achieve new heights in both our revenues and profit," said Wang Yan, CEO of
SINA. "We are off to a good start in 2004. While we are seeing stronger
competition in all segments of our market, we continue to see growths in our
businesses. "
Financial Results
For the quarter ended March 31, 2004, SINA reported record net revenues of
$41.4 million, an increase of 128.5% from $18.1 million reported in the same
period in 2003 and an increase of 8.2% from $38.3 million reported in the
previous quarter.
Advertising revenues totaled $13.1 million for the quarter, representing a
79.8% increase from $7.3 million reported in the same period in 2003 and a
1.4% increase from $12.9 million reported in the previous quarter.
Non-advertising revenues totaled $28.3 million for the quarter, a 161.4%
increase from $10.8 million reported in the same period in 2003 and a 11.6%
increase from $25.3 million reported in the previous quarter. Non-advertising
revenues accounted for 68.3% of the total net revenues for the quarter,
compared to 59.7% for the same period in 2003 and 66.2% for the previous
quarter. The increase in non-advertising revenues was primarily driven by the
growth in mobile value-added service, which grew 180.4% year over year and
12.8% sequentially.
The gross margin for the quarter was 69.7%, down from 72.1% reported in
the previous quarter and up from 66.3% reported in the same period in 2003.
Operating expenses for the first quarter totaled $12.8 million, an
increase of 4.6% from $12.2 million reported in the previous quarter and an
increase of 46.4% over $8.7 million reported in the same period in 2003.
Net income for the first quarter was $16.0 million, representing an
increase of 375.2% from a net income of $3.4 million for the same period in
2003 and an increase of 73.1% from a net income of $9.3 million for the
previous quarter. Diluted net income per share was $0.28 for the first
quarter, compared to a diluted net income per share of $0.07 for the same
period of 2003 and a diluted net income per share of $0.16 for the previous
quarter.
On a pro forma basis, net income for the first quarter totaled
$16.6 million, compared to a pro forma net income of $4.1 million for the same
period in 2003 and of $15.9 million for the previous quarter. Diluted net
income per share, on a pro forma basis, was $0.29 for the quarter, compared to
a pro forma diluted net income per share of $0.08 for the same period of 2003
and of $0.28 for the previous quarter. Pro forma net income excludes non-cash
charges relating to amortization of intangible assets, stock based
compensation and convertible bond issuance cost, and impairment charge on Sun
Media Group investment. For the fourth quarter of 2003, the Company took an
impairment charge in the amount of $6.1 million for the investment in Sun
Media Group.
As of March 31, 2004, SINA's cash, cash equivalents and investments in
marketable securities totaled $238.1 million, an increase of $11.0 million
from three months ago. Cash flow from operating activities for the first
quarter was $19.7 million, compared to $19.5 million for the previous quarter
and $3.8 million for the same period in 2003. During the first quarter, SINA
paid a total of $15.7 million in net cash for acquisitions, deposit for
acquisition as well as investment in a joint venture.
New Businesses
In January 2004, SINA and Yahoo entered into a joint venture for online
auction in China. In April, both companies' top executives unveiled the
auction site "www.1pai.com.cn" through a charity event. The site is expected
to be fully operational by June and become a cornerstone of both companies'
e-commerce strategy in China.
In February 2004, SINA furthered its investment in online games and online
communities products through its strategic licensing agreement with a leading
Korean game portal company, NetMarble. This cooperation allowed SINA to
acquire capabilities to develop and provide series of casual games, avatars,
hompy and animated online chat rooms to our vast user base. SINA is expected
to launch its game portal in early second half of 2004.
In February 2004, SINA signed an agreement to acquire a leading mobile
value-added service provider Crillion Corp. The company, based in Shenzhen,
provides mobile community services as well as job information from career
centers nationwide via its short message service platform. The acquisition was
closed at the end of March. The up-front payment of the acquisition included
$9.9 million in cash and 195,593 newly issued SINA ordinary shares. In
addition to the up-front payment, SINA will make future contingent payments
based on Crillion's financial performance in 2004 and 2005. The future earn-
out payments will be paid out roughly on a 1.5 to 2.0 times 2004 and 2005
earnings basis respectively, provided that Crillion's pretax net income for
2004 and 2005 is over $6.7 million and $13.3 million, respectively. As a
result of the acquisition, the Company recorded certain intangible assets in
the amount of $4.5 million, which will be amortized over periods ranging from
1.3 to 3.0 years. In addition, the Company recorded goodwill in the amount of
$9.9 million for this acquisition. The future earn-out payments for this
acquisition, if any, will be recorded as additional goodwill. The goodwill
will not be amortized but will be assessed for impairment on an annual basis.
"We continue to focus on investment in potential high growth areas such as
online gaming and community and e-commerce," said Hurst Lin, COO of SINA.
"Additionally, we are also on the lookout for investment opportunities that
will consolidate our leadership position in wireless and online portal."
Business Outlook
The Company estimates that its total revenues for Q2 2004 to be between
$48.5 million and $49.5 million, with advertising revenues between
$14.5 million and $15.0 million and non-advertising revenues between
$34.0 million and $34.5 million. Pro forma EPS on a fully diluted basis is
expected to be $0.31 to $0.32 for Q2 2004.
NON-GAAP Measures
To supplement the 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,
the Company believes 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 the Company has historically reported certain non-GAAP results to
investors, the Company believes 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 the Company's 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 9:00 p.m. Eastern Time today to
present an overview of the Company's financial performance and business
operations for the first quarter 2004. The dial-in number for the call is
617-801-9713. The pass code is 25444851. A live Webcast of the call will be
available from 9:00 p.m. - 10:00 p.m. ET on Tuesday, April 27th, 2004
(9:00 a.m. - 10:00 a.m. Beijing Time on April 28th, 2004). 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 83860423.
About SINA
SINA Corporation (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 provides services through five major
business lines including SINA.com (online news and content), SINA Mobile
(mobile value-added services), SINA Online (community-based services and
games), SINA.net (search and enterprise services) and SINA E-Commerce (online
shopping and travel). Together these provide an array of services including
region-focused online portals, mobile value-added services, search and
directory, interest-based and community-building channels, free and premium
email, online games, virtual ISP, classified listings, fee-based services,
e-commerce 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), 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
wireless short messaging service 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, 2003 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
March 31, December 31,
2004 2003 2003
Net revenues
Advertising $13,118 $7,298 $12,939
Non-Advertising 28,270 10,816 25,331
41,388 18,114 38,270
Cost of revenues
Advertising 4,332 2,826 4,169
Non-Advertising 8,194 3,267 6,493
Stock-based compensation - 14 -
12,526 6,107 10,662
Gross profit 28,862 12,007 27,608
Operating expenses
Sales and marketing 7,098 4,454 6,588
Product development 1,974 1,421 1,779
General and administrative 3,215 2,116 3,421
Stock-based compensation - 230 7
Amortization of intangibles 484 505 415
12,771 8,726 12,210
Income from operations 16,091 3,281 15,398
Other income, net 1,049 401 523
Gain (loss) on Sun Media Investment 59 - (6,063)
Loss on equity investment (333) (306) (117)
Income before income taxes 16,866 3,376 9,741
Provision for income taxes (824) - (472)
Net income $16,042 $3,376 $9,269
Shares used in computing basic
net income per share 49,329 46,774 48,647
Basic net income per share 0.33 0.07 0.19
Shares used in computing diluted
net income per share 57,826 50,844 57,784
Diluted net income per share* $0.28 $0.07 $0.16
* Net income used for diluted net
income per share calculation
Net income $16,042 $3,376 $9,269
Amortization of convertible
bond issuance cost 171 - 171
Net income used for diluted
net income per share calculation $16,213 $3,376 $9,440
SINA CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, except per share data)
Three months ended
March 31, December 31,
2004 2003 2003
Net revenues
Advertising $13,118 $7,298 $12,939
Non-Advertising 28,270 10,816 25,331
41,388 18,114 38,270
Cost of revenues
Advertising 4,332 2,826 4,169
Non-Advertising 8,194 3,267 6,493
12,526 6,093 10,662
Gross profit 28,862 12,021 27,608
Operating expenses
Sales and marketing 7,098 4,454 6,588
Product development 1,974 1,421 1,779
General and administrative 3,215 2,116 3,421
12,287 7,991 11,788
Income from operations 16,575 4,030 15,820
Other income, net 1,220 401 694
Loss on equity investment (333) (306) (117)
Pro forma net income before income taxes 17,462 4,125 16,397
Provision for income taxes (824) - (472)
Pro forma net income 16,638 4,125 15,925
Shares used in computing pro forma
basic net income per share 49,329 46,774 48,647
Pro forma basic net income per share 0.34 0.09 0.33
Shares used in computing pro forma
diluted net income per share 57,826 50,844 57,784
Pro forma diluted net income per share $0.29 $0.08 $0.28
Reconciliation from GAAP results
to pro forma results:
GAAP net income $16,042 $3,376 $9,269
Stock based compensation
Cost of revenues - 14 -
Operating expenses - 230 7
Amortization of intangibles 484 505 415
Amortization of convertible
bond issuance cost 171 171
Loss (gain) on Sun Media Investment (59) 6,063
Pro forma net income $16,638 $4,125 $15,925
SINA CORPORATION
UNAUDITED SEGMENT INFORMATION
(in thousands)
Three months ended
March 31, December 31,
2004 2003 2003
Net revenues
Advertising $13,118 $7,298 $12,939
Mobile related 25,786 9,197 22,859
Others 2,484 1,619 2,472
$41,388 $18,114 $38,270
Cost of revenues
Advertising $4,332 $2,826 $4,169
Mobile related 7,977 3,032 6,299
Others 217 235 194
$12,526 $6,093 $10,662
SINA CORPORATION
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET
(in thousands U.S. dollar)
March 31 December 31
2004 2003
Assets
Cash, cash equivalents and
investments in marketable securities $238,142 $227,164
Accounts receivable, net 26,714 17,606
Property and equipment, net 9,573 8,646
Long-term investment 12,958 8,878
Goodwill/intangible assets, net 34,258 18,660
Other assets 16,125 8,943
Total assets $337,770 $289,897
Liabilities and Shareholders' Equity
Liabilities $43,171 $30,390
Convertible Debt 100,000 100,000
Shareholders' equity 194,599 159,507
Total liabilities and
shareholders' equity $337,770 $289,897
SOURCE SINA Corporation
CONTACT:
Chen Fu,
Investor Relations of SINA Corporation,
+8621-6289-5678 x6089,
fuchen@staff.sina.com; or
Denise Roche of The Ruth
Group,
+1-646-536-7008,
droche@theruthgroup.com,
for SINA Corporation
Chinese
