BEIJING, Nov. 20, 2015 /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 its unaudited financial
results for the third quarter ended September 30, 2015.
Management Comments
Mr. Feng Gao, Chief Executive
Officer of Ku6 Media, commented, "The third quarter represented a
period of advancement in our services, as well as positive trends
in our financials. We have consistently seen user expansion as
individuals are providing a wider variety of content on our
platform. Ku6 is focusing on the trend toward video social
communication with the creation of our 'Model Interactive
Community'. We are also expanding our share of the mobile market
through the launching of the mobile application 'Modo', which is
part of our cooperation agreement with Beijing Modo. Ultimately,
our goal is to continue to increase user traffic while
simultaneously enhancing our advertising partnerships. In the third
quarter, we have increased revenues and continued to progress
towards profitability, and have been pleased with our current
trends heading into 2016."
Third Quarter 2015 Highlights
(1)
- Total revenues were US$2.45
million (RMB15.46 million) in
the third quarter of 2015, as compared to total revenues of
US$2.38 million in the second quarter
of 2015 and US$1.62 million in the
third quarter of 2014.
- Net loss was US$0.64 million
(RMB4.03 million) in the third
quarter of 2015, as compared to a net loss of US$0.67 million in the second quarter of 2015 and
US$0.93 million in the third quarter
of 2014.
- Basic and diluted loss per ADS was US$0.01 (RMB0.09)
in the third quarter of 2015, as compared to US$0.01 in the second quarter of 2015 and
US$0.02 in the third quarter of
2014.
- Cash and cash equivalents were US$7.91
million (RMB50.25 million) as
of September 30, 2015.
- Net cash used in operating activities was US$0.32 million (RMB 1.97
million) in the third quarter of 2015, as compared to net
cash provided by operating activities of US$0.78 million in the second quarter of 2015 and
net cash used in operating activities of US$3.00 million in the third quarter of
2014.
(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=RMB6.3556, representing the noon
buying rate as of September 30, 2015 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 30, 2015 or at any other rate.
|
Recent Business Developments
Company Extends Advertising Agency Agreement with Partner
Huzhong
On August 29, 2015, the Company
entered into a supplemental advertising agency agreement with
Huzhong Advertising (Shanghai)
Ltd. ("Huzhong"), pursuant to which the service price charged to
Huzhong increased by a certain percentage in the following 12
months before the next price negotiation may occur. There were no
other changes to the existing advertising agency agreement, which
will expire on December 31, 2017.
Business Expansion Into Video Social Communication
In July 2015, the Company entered
into agreements with two third parties to set up a new media
company, Beijing Modo Media Co., Ltd. ("Beijing Modo"), in which
Ku6 Media holds a 30% equity interest. Beijing Modo operates a
social platform named "Modo" that allows users to engage in
real-time online group activities through voice, text and video.
Users on the Modo platform may consume virtual items during
real-time video broadcasting, including gifts and avatars, and
purchase other value-added services. The Company contributes
business skills and technical support to Beijing Modo.
Third quarter 2015 Financial Results
Total revenues were US$2.45
million (RMB15.46 million) in
the third quarter of 2015, representing an increase of 2.9% from
US$2.38 million in the second quarter
of 2015 and an increase of 51.8% from US$1.62 million in the third quarter of 2014. The
Company reported higher revenues due to increased rate and volume
from its advertising partner compared to the prior year.
Cost of revenues was US$2.05 million (RMB12.92
million) in the third quarter of 2015, representing a
decrease of 5.3% from US$2.17 million
in the second quarter of 2015 and a decrease of 17.4% from
US$2.48 million in the third quarter
of 2014.
The decrease in cost of revenues, as compared to the third
quarter of 2014, was primarily due to (a) a decrease in bandwidth
costs by US$0.18 million as we
optimized bandwidth efficiency in 2015; (b) a decrease of
depreciation costs by US$0.15 million
as certain fixed assets were fully depreciated in the third quarter
of 2015. These factors also contributed to the decrease from the
second quarter of 2015.
Gross profit was US$0.40 million (RMB2.54
million) in the third quarter of 2015, as compared to gross
profit of US$0.22 million in the
second quarter of 2015 and gross loss of US$0.87 million in the third quarter of 2014.
Operating expenses were US$1.01 million (RMB6.36
million) in the third quarter of 2015, as compared to
US$1.06 million in the second quarter
of 2015, representing a decrease of 4.4%. Operating expenses
reflected a decrease of 36.9% from US$1.60
million in the third quarter of 2014.
The decrease in operating expenses, as compared to the third
quarter of 2014, was mainly attribute to (a) a decrease of office
rental expenses by US$0.18 million as
we reduced office space in the second quarter of 2015, and (b) a
reversal of US$0.24 million of
accrued litigation expenses in the third quarter of 2015, as
compared to a reversal of US$0.04
million incurred in the third quarter of 2014. This reversal
contributed to the decrease in operating expenses from the second
quarter of 2015 as well.
Operating loss was US$0.61 million (RMB3.82
million) in the third quarter of 2015, as compared to
operating loss of US$0.84 million in
the second quarter of 2015 and US$2.47
million in the third quarter of 2014.
Net loss was US$0.64
million (RMB4.03 million) in
the third quarter of 2015, as compared to US$0.67 million in the second quarter of 2015 and
US$0.93 million in the third quarter
of 2014.
Net loss per basic and diluted ADS was
US$0.01 (RMB0.09) in the third quarter of 2015, as
compared to US$0.01 in the second
quarter of 2015 and US$0.02 in the
third quarter of 2014. Weighted average ADSs used to calculate
basic and diluted net loss per ADS were 47.7 million in the third
quarter of 2015, 47.6 million in the second quarter of 2015 and
47.6 million in the third quarter of 2014.
Balance Sheet Highlights
As of September 30, 2015, the
Company had US$7.91 million
(RMB50.25 million) in cash and cash
equivalents, as compared to US$4.38
million as of December 31,
2014. The increase was primarily attributable to a loan of
US$4.84 million extended from Mr.
Xudong Xu, our previous significant
shareholder in March 2015. On
May 12, 2015, following our change of
ownership, the US$4.84 million loan
was assumed by Shanda Computer (Shanghai) Co., Ltd ("Shanda Computer"), a
wholly-owned subsidiary of Shanda Interactive Entertainment
Limited.
About Ku6 Media Co., Ltd.
Ku6 Media Co., Ltd. (NASDAQ: KUTV) is a leading internet video
company in China focused 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 services, 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
ability of the Company to consistently derive revenues from its
renewed agreement with Huzhong; 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.
Contact:
For further information, please contact:
At the Company:
Ms. Wendy
Xuan
Investor Relations Manager
Telephone: +86 10 5758 6819
ir@ku6.com
Investor Relations:
The Equity Group Inc.
Ms. Katherine Yao,
Senior Associate
Telephone: +86 10 6587 6435
kyao@equityny.com
Ku6 Media Co.,
Ltd.
|
Consolidated
Balance Sheets
|
(Amounts in
thousands,
except for number
of shares)
|
December 31, 2014
US$
|
September 30, 2015
US$
(Unaudited)
|
September 30, 2015
RMB
(Unaudited)
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
4,380
|
7,906
|
50,250
|
Accounts receivable,
net
|
114
|
84
|
536
|
Accounts receivable
due from related parties
|
1
|
23
|
147
|
Prepaid expenses and
other current assets
|
490
|
570
|
3,623
|
Other receivables due
from related parties
|
3
|
3
|
18
|
Total current
assets
|
4,988
|
8,586
|
54,574
|
Non-current
assets:
|
|
|
|
Property and
equipment, net
|
294
|
32
|
206
|
Investment in equity
affiliate
|
-
|
177
|
1,127
|
Deposits and other
non-current assets
|
348
|
-
|
-
|
TOTAL
ASSETS
|
5,630
|
8,795
|
55,907
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' DEFICIT
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
3,076
|
3,165
|
20,116
|
Accounts payable due
to related parties
|
710
|
615
|
3,909
|
Accrued expenses and
other current liabilities
|
5,980
|
5,894
|
37,472
|
Related party loan
payable
|
-
|
4,720
|
30,000
|
Total
liabilities
|
9,766
|
14,394
|
91,497
|
|
|
|
|
Shareholders'
deficit:
|
|
|
|
Ordinary shares
(US$0.00005 par value; 12,000,000,000 shares authorized;
4,763,360,860 and 4,771,610,860 shares issued and outstanding as of
December 31, 2014 and September 30, 2015, respectively)
|
238
|
239
|
1,516
|
Additional paid-in
capital
|
184,538
|
185,025
|
1,175,944
|
Accumulated
deficit
|
(187,096)
|
(189,230)
|
(1,202,670)
|
Accumulated other
comprehensive loss
|
(1,816)
|
(1,633)
|
(10,380)
|
Total
shareholders' deficit
|
(4,136)
|
(5,599)
|
(35,590)
|
TOTAL LIABILITIES
AND SHAREHOLDERS' DEFICIT
|
5,630
|
8,795
|
55,907
|
Ku6 Media Co.,
Ltd.
|
Consolidated
Statements of Operations
|
|
For the Three
Months Ended
|
For the Nine
Months Ended
|
(Amounts in thousands, except for
number of shares and ADS and per share and per ADS
data)
|
September 30,
2014
|
June 30,
2015
|
September 30,
2015
|
September 30,
2015
|
September 30,
2014
|
September 30,
2015
|
September 30,
2015
|
US$
|
US$
|
US$
|
RMB
|
US$
|
US$
|
RMB
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
Revenues:
|
|
|
|
|
|
|
|
Third
parties
|
924
|
2,384
|
2,413
|
15,212
|
1,722
|
7,145
|
44,563
|
Related
parties
|
692
|
-
|
40
|
251
|
3,396
|
40
|
251
|
Total
revenues
|
1,616
|
2,384
|
2,453
|
15,463
|
5,118
|
7,185
|
44,814
|
|
|
|
|
|
|
|
|
Cost of
revenues:
|
|
|
|
|
|
|
|
Third
parties
|
2,245
|
1,937
|
1,835
|
11,564
|
9,057
|
5,607
|
34,959
|
Related
parties
|
238
|
228
|
215
|
1,358
|
698
|
657
|
4,101
|
Total cost of
revenues
|
2,483
|
2,165
|
2,050
|
12,922
|
9,755
|
6,264
|
39,060
|
|
|
|
|
|
|
|
|
Gross profit /
(loss)
|
(867)
|
219
|
403
|
2,541
|
(4,637)
|
921
|
5,754
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Product
development
|
18
|
-
|
-
|
-
|
1,377
|
-
|
-
|
Sales and
marketing
|
146
|
272
|
288
|
1,814
|
768
|
752
|
4,690
|
General and
administrative
|
1,436
|
784
|
722
|
4,550
|
6,068
|
2,441
|
15,214
|
Total operating
expenses
|
1,600
|
1,056
|
1,010
|
6,364
|
8,213
|
3,193
|
19,904
|
|
|
|
|
|
|
|
|
Operating
loss
|
(2,467)
|
(837)
|
(607)
|
(3,823)
|
(12,850)
|
(2,272)
|
(14,150)
|
|
|
|
|
|
|
|
|
Interest
income
|
6
|
61
|
52
|
329
|
35
|
127
|
798
|
Other
income
|
77
|
189
|
5
|
32
|
674
|
206
|
1,266
|
Interest expense -
related party loan
|
-
|
(78)
|
(79)
|
(498)
|
-
|
(183)
|
(1,142)
|
Gain from disposal of
equity interest in affiliates
|
1,452
|
-
|
-
|
-
|
1,452
|
-
|
-
|
Equity in loss of
affiliate
|
-
|
-
|
(12)
|
(73)
|
-
|
(12)
|
(73)
|
Loss before income
tax benefit
|
(932)
|
(665)
|
(641)
|
(4,033)
|
(10,689)
|
(2,134)
|
(13,301)
|
|
|
|
|
|
|
|
|
Income tax
benefit
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
|
|
|
|
|
|
|
Net
loss
|
(932)
|
(665)
|
(641)
|
(4,033)
|
(10,689)
|
(2,134)
|
(13,301)
|
|
|
|
|
|
|
|
|
Loss per share -
basic and diluted
|
|
|
|
|
|
|
|
Net loss
|
(US$0.00)
|
(US$0.00)
|
(US$0.00)
|
(RMB0.00)
|
(US$0.00)
|
(US$0.00)
|
(RMB0.00)
|
Weighted average
shares used in per share
calculation – basic/diluted
|
4,755,993,958
|
4,764,014,706
|
4,771,610,860
|
4,771,610,860
|
4,740,312,505
|
4,766,392,341
|
4,766,392,341
|
|
|
|
|
|
|
|
|
Loss per ADS -
basic and diluted
|
|
|
|
|
|
|
|
Net loss
|
(US$0.02)
|
(US$0.01)
|
(US$0.01)
|
(RMB0.09)
|
(US$0.23)
|
(US$0.05)
|
(RMB0.28)
|
Weighted average ADSs
used in per ADS calculation – basic/diluted
|
47,559,940
|
47,640,147
|
47,716,109
|
47,716,109
|
47,403,125
|
47,663,923
|
47,663,923
|
Ku6 Media Co.,
Ltd.
|
Consolidated
Statements of Cash Flows
|
|
For the Three
Months Ended
|
For the Nine
Months Ended
|
(Amounts in
thousands)
|
September 30,
2014
|
June 30,
2015
|
September 30,
2015
|
September 30,
2015
|
September 30,
2014
|
September 30,
2015
|
September 30,
2015
|
US$
|
US$
|
US$
|
RMB
|
US$
|
US$
|
RMB
|
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
Net
loss
|
(932)
|
(665)
|
(641)
|
(4,033)
|
(10,689)
|
(2,134)
|
(13,301)
|
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
|
|
|
|
|
|
|
|
Share-based
compensation expenses
|
169
|
59
|
78
|
494
|
457
|
213
|
1,333
|
Depreciation and
amortization
|
253
|
107
|
73
|
462
|
847
|
292
|
1,817
|
Equity in loss of
affiliated company
|
-
|
-
|
12
|
73
|
-
|
12
|
73
|
Bad debt
provision
|
58
|
-
|
-
|
-
|
989
|
-
|
-
|
Gain on derecognition
of aged operating liabilities
|
(9)
|
-
|
-
|
-
|
(207)
|
(14)
|
(86)
|
Exchange losses
(gains)
|
(77)
|
3
|
56
|
355
|
(34)
|
30
|
177
|
Gain on disposal of
property and equipment
|
-
|
(19)
|
(24)
|
(153)
|
-
|
(114)
|
(705)
|
Gain from disposal of
equity interest in affiliates
|
(1,452)
|
-
|
-
|
-
|
(1,452)
|
-
|
-
|
Changes in assets and
liabilities, net of acquisitions and dispositions:
|
|
|
|
|
|
|
|
Accounts
receivable
|
(98)
|
138
|
86
|
549
|
(994)
|
29
|
196
|
Prepaid expenses and
other current assets
|
(222)
|
9
|
(116)
|
(737)
|
(136)
|
(8)
|
(65)
|
Amount due from
related parties
|
(711)
|
-
|
(22)
|
(141)
|
5,623
|
(22)
|
(141)
|
Deposits and other
non-current assets
|
-
|
348
|
-
|
-
|
(18)
|
348
|
2,159
|
Accounts
payable
|
(277)
|
585
|
(351)
|
(2,228)
|
(572)
|
91
|
516
|
Accrued expenses and
other current liabilities
|
60
|
130
|
642
|
4,079
|
(1,191)
|
(49)
|
(204)
|
Amount due to related
parties
|
242
|
89
|
(108)
|
(689)
|
616
|
(120)
|
(767)
|
Net cash provided
by (used in) operating activities
|
(2,996)
|
784
|
(315)
|
(1,969)
|
(6,761)
|
(1,446)
|
(8,998)
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
Purchases of property
and equipment
|
-
|
(13)
|
(1)
|
(9)
|
(192)
|
(14)
|
(88)
|
Proceeds from
disposal of property and equipment
|
-
|
19
|
24
|
153
|
-
|
114
|
705
|
Repayment of loans
from related parties controlled by Shanda
|
-
|
-
|
-
|
-
|
484
|
-
|
-
|
Proceeds from
disposal of equity interest in affiliates
|
1,452
|
-
|
-
|
-
|
1,452
|
-
|
-
|
Net cash provided
by (used in) investing activities
|
1,452
|
6
|
23
|
144
|
1,744
|
100
|
617
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
Proceeds from
exercise of stock options
|
77
|
13
|
-
|
-
|
339
|
13
|
80
|
Borrowings from
related parties controlled by Shanda
|
-
|
-
|
-
|
-
|
5,797
|
4,839
|
30,000
|
Net cash provided
by financing activities
|
77
|
13
|
-
|
-
|
6,136
|
4,852
|
30,080
|
Effect of exchange
rate changes on cash and cash equivalents
|
-
|
(1)
|
20
|
1,374
|
(17)
|
20
|
1,371
|
Net increase
(decrease) in cash and cash equivalents
|
(1,467)
|
802
|
(272)
|
(451)
|
1,102
|
3,526
|
23,070
|
Cash and cash
equivalents, beginning of period
|
4,240
|
7,376
|
8,178
|
50,701
|
1,671
|
4,380
|
27,180
|
Cash and cash
equivalents, end of period
|
2,773
|
8,178
|
7,906
|
50,250
|
2,773
|
7,906
|
50,250
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/ku6-media-reports-unaudited-financial-results-for-the-third-quarter-of-fiscal-year-2015-300182465.html
SOURCE Ku6 Media Co., Ltd.