BEIJING, Jan. 21, 2016 /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 fourth quarter and year ended
December 31, 2015.
Fourth Quarter 2015 Highlights(1)
- Total revenues were US$3.72
million (RMB23.79 million) in
the fourth quarter of 2015, as compared to total revenues of
US$2.45 million in the third quarter
of 2015 and US$3.47 million in the
fourth quarter of 2014.
- Net profit was US$0.08 million
(RMB0.53 million) in the fourth
quarter of 2015, as compared to a net loss of US$0.64 million in the third quarter of 2015 and
US$0.04 million in the fourth quarter
of 2014.
- Basic and diluted profit per ADS was US$0.00 (RMB0.01)
in the fourth quarter of 2015, as compared to basic and diluted
loss per ADS of US$0.01 in the third
quarter of 2015 and US$0.00 in the
fourth quarter of 2014.
- Cash and cash equivalents were US$7.70
million as of December 31,
2015.
- Net cash used in operating activities was US$0.22 million (RMB1.42
million) in the fourth quarter of 2015, as compared to net
cash used in operating activities of US$0.32
million in the third quarter of 2015 and net cash provided
by operating activities of US$1.60
million in the fourth quarter of 2014.
Fiscal Year 2015 Highlights(1)
- Total revenues were US$10.91
million (RMB68.61 million) in
2015, as compared to total revenues of US$8.58 million in 2014.
- Net loss was US$2.05 million
(RMB12.77 million) in 2015, as
compared to a net loss of US$10.73
million in 2014.
- Basic and diluted loss per ADS was US$0.04 (RMB0.27)
in 2015, as compared to basic and diluted loss per ADS of
US$0.23 in 2014.
- Net cash used in operating activities was US$1.46 million (RMB8.92
million) in 2015, as compared to net cash used in operating
activities of US$5.21 million in
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=RMB6.4778, representing the noon
buying rate as of December 31, 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 December 31, 2015 or at any other rate.
|
Recent Business Developments
New strategy in virtual reality
In the fourth quarter of 2015, management included virtual
reality ("VR") as part of the Company's development strategies. In
this regard, the Company has established a VR community on its
website and its video social communities will serve as the core
platform for users to experience this state-of-the-art technology.
The Company is targeting a goal of becoming a leading VR content
provider in the internet video industry.
For development of its VR community, management has started to
look for investment opportunities in VR-related companies globally
and the Company is negotiating with VR entities world-wide for
potential M&A transactions and business cooperation
opportunities.
Management Comments
Mr. Feng Gao, Chief Executive
Officer of Ku6 Media, commented, "The fourth quarter of 2015 has
marked a milestone in Ku6's history, as we achieved our first
quarterly break-even and determined Ku6's new strategy for the
years ahead, which is to become a leading virtual reality internet
content provider. We have established a VR community during our
fourth quarter of 2015, and started to negotiate with international
VR entities for further cooperation. In addition, we also see great
potential to use VR technology in advertising and operating video
social communication businesses with an eye on improved user
experience. I believe Ku6 will have an exciting year in 2016."
Fourth Quarter 2015 Financial
Results
Total revenues were US$3.72
million in the fourth quarter of 2015, representing an
increase of 51.8% from US$2.45
million in the third quarter of 2015 and an increase of 7.2%
from US$3.47 million in the fourth
quarter of 2014. The Company reported higher revenues due to
increased volume from its advertising partners compared to the
third quarter of 2015.
Cost of revenues was US$1.78 million in the fourth quarter of 2015,
representing a decrease of 13.2% from US$2.05 million in the third quarter of 2015 and
a decrease of 25.6% from US$2.39
million in the fourth quarter of 2014.
The decrease of US$0.61 million,
or 25.6% in cost of revenues, as compared to the fourth quarter of
2014, was primarily due to (a) a decrease in bandwidth costs by
US$0.26 million as the Company
optimized bandwidth efficiency in 2015; (b) certain fixed assets
were fully depreciated and there were no related depreciation
expenses recorded in the fourth quarter of 2015, while depreciation
expenses of these assets were US$0.18
million in the fourth quarter of 2014. These factors also
contributed to the decrease from the third quarter of 2015.
Gross profit was US$1.94 million in the fourth quarter of 2015, as
compared to US$0.40 million in the
third quarter of 2015 and US$1.08
million in the fourth quarter of 2014.
Operating expenses were US$1.84 million in the fourth quarter of 2015, as
compared to US$1.01 million in the
third quarter of 2015, representing an increase of 82.2 %.
Operating expenses reflected an increase of 53.3% from US$1.20 million in the fourth quarter of
2014.
The increase of US$0.64 million or
53.3% in operating expenses, as compared to the fourth quarter of
2014, was mainly attributed to an increase of marketing expenses by
US$0.63 million as the Company added
resources to motivate the advertising revenues in the fourth
quarter of 2015. This also contributed to the increase in operating
expenses from the third quarter of 2015.
Operating profit was US$0.11 million in the fourth quarter of 2015, as
compared to operating loss of US$0.61
million in the third quarter of 2015 and operating loss of
US$0.12 million in the fourth quarter
of 2014.
Net profit was US$0.08
million in the fourth quarter of 2015, as compared to net
loss of US$0.64 million in the third
quarter of 2015 and net loss of US$0.04
million in the fourth quarter of 2014.
Net profit per basic and diluted ADS was
US$0.00 in the fourth quarter of
2015, as compared to net loss per basic and diluted ADS of
US$0.01 in the third quarter of 2015
and US$0.00 in the fourth quarter of
2014. Weighted average ADSs used to calculate basic and diluted net
loss per ADS were 47.7 million in the fourth quarter of 2015, 47.7
million in the third quarter of 2015 and 47.6 million in the fourth
quarter of 2014.
Fiscal Year 2015 Financial
Results
Total revenues were US$10.91 million in 2015, compared to
US$8.58 million in 2014. The Company
reported higher revenues in 2015 due to increased volume from its
advertising partners compared to the year 2014.
Cost of revenues was US$8.04 million in 2015, representing 73.7% of
total revenues, as compared to US$12.14
million, or 141.5% of revenues, in 2014.
The cost of revenues decreased by US$4.10
million or 33.8% in 2015 as a result of (1) a decrease in
bandwidth costs by US$1.49 million as
the Company optimized bandwidth efficiency in 2015; (b) a decrease
in content costs of US$0.53 million
as there being few content costs incurred in 2015; and (c) a
decrease in staff costs by US$1.32
million as a result of headcount reductions in 2014.
Gross profit was US$2.86
million in 2015, as compared to a gross loss of US$3.56 million in 2014.
Operating expenses were US$5.03 million in 2015 as compared to
US$9.42 million in 2014. The
operating expenses significantly decreased by US$4.39 million or 46.6% in 2015 as a result of
(a) a decrease of staff costs by US$2.62
million as a result of headcount reductions in mid 2014; (b)
a decrease of office rental expenses by US$0.49 million as the Company reduced office
space since the second quarter of 2015, and (c) a bad debt expenses
of US$0.99 million incurred in 2014 compared to no such costs in
2015.
Operating loss was US$2.16 million in 2015 as compared to
US$12.97 million in 2014.
Net loss was US$2.05
million in 2015 as compared to US$10.73 million in 2014.
Net loss per basic and diluted ADS was
US$0.04 in 2015 as compared to
US$0.23 in 2014. Weighted average
ADSs used to calculate basic and diluted net loss per ADS were 47.7
million in 2015 and 47.5 million in 2014.
Balance Sheet Highlights
As of December 31, 2015, the
Company had US$7.70 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
RMB30 million (equals to US$4.84 million at the transaction date) extended
from Mr. Xudong Xu, our previous
significant shareholder in March
2015. On May 12, 2015,
following our change of ownership, the RMB30
million loan was assumed by Shanda Computer (Shanghai) Co., Ltd ("Shanda Computer"), a
wholly-owned subsidiary of Shanda Interactive Entertainment
Limited.
Liquidity and Going Concern
Substantial doubt exists as to the Company's ability to continue
as a going concern, primarily due to (a) uncertainties associated
with the amount of and growth in revenues from (i) an advertising
agency agreement with Huzhong, the Company's new third party
advertising agent since late August
2014, (ii) other sources; and; (b) uncertainties as to the
availability and timing of additional financing with terms
acceptable to the Company.
The unaudited consolidated financial information included in
this news release do not include any adjustments that might result
from the outcome of these uncertainties and were prepared on the
basis of a going concern which contemplates that the Company will
be able to realize assets and discharge liabilities in the normal
course of business.
Subsequent events
On January 8, 2016, the Company
repaid RMB1.95 million to Shanda
Computer, regarding the loan agreement signed in 2015 with original
total principal of RMB30 million.
After the repayment, the principal payable balance to Shanda
Computer regarding the loan agreement decreased to RMB28.05 million.
In addition, on January 5, 2016,
the Company entered into a new loan agreement with Shanda
Technology Overseas Capital Company Limited ("Shanda Technology"),
pursuant to which Shanda Technology agreed to provide a loan of
US$0.3 million to the Company, which
the Company has received.
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$
|
December 31,
2015
US$
(Unaudited)
|
December 31,
2015
RMB
(Unaudited)
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
4,380
|
7,698
|
49,866
|
Accounts receivable,
net
|
114
|
91
|
592
|
Accounts receivable
due from related parties
|
1
|
12
|
78
|
Prepaid expenses and
other current assets
|
490
|
528
|
3,418
|
Other receivables due
from related parties
|
3
|
-
|
-
|
Total current
assets
|
4,988
|
8,329
|
53,954
|
Non-current
assets:
|
|
|
|
Property and
equipment, net
|
294
|
515
|
3,333
|
Investment in equity
affiliate
|
-
|
169
|
1,092
|
Deposits and other
non-current assets
|
348
|
-
|
|
TOTAL
ASSETS
|
5,630
|
9,013
|
58,379
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' DEFICIT
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
3,076
|
2,824
|
18,294
|
Accounts payable due
to related parties
|
710
|
913
|
5,911
|
Accrued expenses and
other current liabilities
|
5,980
|
5,690
|
36,856
|
Related party loan
payable
|
-
|
4,631
|
30,000
|
Other payables due to
related parties
|
-
|
253
|
1,641
|
Total
liabilities
|
9,766
|
14,311
|
92,702
|
|
|
|
|
Shareholders'
deficit:
|
|
|
|
Ordinary shares
(US$0.00005 par value;
12,000,000,000 shares authorized;
4,763,360,860 and 4,771,610,860 shares
issued and outstanding as of December 31,
2014 and 2015, respectively)
|
238
|
239
|
1,545
|
Additional paid-in
capital
|
184,538
|
185,094
|
1,199,000
|
Accumulated
deficit
|
(187,096)
|
(189,147)
|
(1,225,257)
|
Accumulated other
comprehensive loss
|
(1,816)
|
(1,484)
|
(9,611)
|
Total
shareholders' deficit
|
(4,136)
|
(5,298)
|
(34,323)
|
TOTAL LIABILITIES
AND SHAREHOLDERS'
DEFICIT
|
5,630
|
9,013
|
58,379
|
Ku6 Media Co.,
Ltd.
|
Consolidated
Statements of Operations
|
|
|
For the Three
Months Ended
|
For the Twelve
Months Ended
|
(Amounts in
thousands,
except for number of shares
and ADS and per share and
per ADS data)
|
December
31,
2014
|
September
30,
2015
|
December
31,
2015
|
December
31,
2015
|
December
31,
2014
|
December
31,
2015
|
December
31,
2015
|
US$
|
US$
|
US$
|
RMB
|
US$
|
US$
|
RMB
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
|
(Unaudited)
|
(Unaudited)
|
Revenues:
|
|
|
|
|
|
|
|
Third
parties
|
2,519
|
2,413
|
3,642
|
23,541
|
4,267
|
10,787
|
68,355
|
Related
parties
|
946
|
40
|
81
|
251
|
4,317
|
121
|
251
|
Total
revenues
|
3,465
|
2,453
|
3,723
|
23,792
|
8,584
|
10,908
|
68,606
|
|
|
|
|
|
|
|
|
Cost of
revenues:
|
|
|
|
|
|
|
|
Third
parties
|
2,147
|
1,835
|
1,780
|
11,374
|
11,231
|
7,387
|
46,333
|
Related
parties
|
239
|
215
|
-
|
-
|
910
|
657
|
4,101
|
Total cost of
revenues
|
2,386
|
2,050
|
1,780
|
11,374
|
12,141
|
8,044
|
50,434
|
|
|
|
|
|
|
|
|
Gross profit /
(loss)
|
1,079
|
403
|
1,943
|
12,418
|
(3,557)
|
2,864
|
18,172
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Product
development
|
8
|
-
|
-
|
-
|
1,385
|
-
|
-
|
Sales and
marketing
|
175
|
288
|
1,053
|
6,729
|
942
|
1,805
|
11,419
|
General and
administrative
|
1,020
|
722
|
782
|
4,999
|
7,088
|
3,223
|
20,213
|
Total operating
expenses
|
1,203
|
1,010
|
1,835
|
11,728
|
9,415
|
5,028
|
31,632
|
|
|
|
|
|
|
|
|
Operating
profit/(loss)
|
(124)
|
(607)
|
108
|
690
|
(12,972)
|
(2,164)
|
(13,460)
|
|
|
|
|
|
|
|
|
Interest
income
|
12
|
52
|
60
|
384
|
47
|
187
|
1,181
|
Other
income/expenses
|
73
|
5
|
(2)
|
(11)
|
745
|
204
|
1,257
|
Interest expense -
related
party loan
|
-
|
(79)
|
(78)
|
(498)
|
-
|
(261)
|
(1,640)
|
Gain from disposal of
equity
interest in affiliates
|
-
|
-
|
-
|
-
|
1,452
|
-
|
-
|
Equity in loss of
affiliate
|
-
|
(12)
|
(5)
|
(34)
|
-
|
(17)
|
(107)
|
Profit/(loss)
before income
tax benefit
|
(39)
|
(641)
|
83
|
531
|
(10,728)
|
(2,051)
|
(12,769)
|
|
|
|
|
|
|
|
|
Income tax
benefit
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
|
|
|
|
|
|
|
Net
profit/(loss)
|
(39)
|
(641)
|
83
|
531
|
(10,728)
|
(2,051)
|
(12,769)
|
|
|
|
|
|
|
|
|
Loss per share -
basic and diluted
|
|
|
|
|
|
|
Net
profit/(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
|
4,763,369,860
|
4,771,610,860
|
4,771,610,860
|
4,771,610,860
|
4,746,450,872
|
4,767,742,804
|
4,767,742,804
|
|
|
|
|
|
|
|
|
Loss per ADS -
basic and diluted
|
|
|
|
|
|
|
|
Net
profit/(loss)
|
(US$0.00)
|
(US$0.01)
|
US$0.00
|
RMB0.01
|
(US$0.23)
|
(US$0.04)
|
(RMB0.27)
|
Weighted average ADSs
used in
per ADS calculation --
basic/diluted
|
47,633,609
|
47,716,109
|
47,716,109
|
47,716,109
|
47,464,509
|
47,677,428
|
47,677,428
|
Ku6 Media Co.,
Ltd.
|
Consolidated
Statements of Cash Flows
|
|
|
For the Three
Months Ended
|
For the Twelve
Months Ended
|
(Amounts in
thousands)
|
December
31,
2014
|
September
30,
2015
|
December
31,
2015
|
December
31,
2015
|
December
31,
2014
|
December
31,
2015
|
December
31,
2015
|
US$
|
US$
|
US$
|
RMB
|
US$
|
US$
|
RMB
|
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
|
(Unaudited)
|
(Unaudited)
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
Net
profit/(loss)
|
(39)
|
(641)
|
83
|
531
|
(10,728)
|
(2,051)
|
(12,769)
|
|
|
|
|
Share-based
compensation expenses
|
144
|
78
|
69
|
445
|
601
|
282
|
1,827
|
Depreciation and
amortization
|
199
|
73
|
263
|
1,702
|
1,048
|
555
|
3,595
|
Equity in loss of
affiliated company
|
-
|
12
|
5
|
35
|
-
|
17
|
110
|
Bad debt
provision
|
-
|
-
|
-
|
-
|
988
|
-
|
-
|
Gain on derecognition
of aged
operating liabilities
|
-
|
-
|
-
|
-
|
(207)
|
(14)
|
(91)
|
Exchange
losses/(gains)
|
84
|
56
|
52
|
341
|
225
|
(367)
|
(2,377)
|
Gain on disposal of
property and
equipment
|
-
|
(24)
|
(1)
|
(7)
|
-
|
(115)
|
(745)
|
Gain from disposal of
equity interest
in affiliates
|
-
|
-
|
-
|
-
|
(1,452)
|
-
|
-
|
Changes in assets and
liabilities, net of
acquisitions and dispositions:
|
|
|
|
|
|
|
|
Accounts
receivable
|
20
|
86
|
(7)
|
(45)
|
(1,037)
|
23
|
149
|
Prepaid expenses and
other current
assets
|
32
|
(116)
|
42
|
274
|
(104)
|
(38)
|
(246)
|
Amount due from
related parties
|
816
|
(22)
|
14
|
90
|
6,564
|
(11)
|
(71)
|
Deposits and other
non-current
assets
|
|
-
|
-
|
-
|
(9)
|
348
|
2,254
|
Accounts
payable
|
(10)
|
(351)
|
(341)
|
(2,208)
|
(676)
|
(252)
|
(1,632)
|
Accrued expenses and
other current
liabilities
|
123
|
642
|
(26)
|
(171)
|
(1,207)
|
(290)
|
(1,879)
|
Amount due to related
parties
|
231
|
(108)
|
(372)
|
(2,410)
|
784
|
456
|
2,954
|
Net cash provided
by (used in)
operating activities
|
1,600
|
(315)
|
(219)
|
(1,423)
|
(5,210)
|
(1,457)
|
(8,921)
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
Purchases of property
and equipment
|
-
|
(1)
|
(2)
|
(12)
|
(210)
|
(16)
|
(104)
|
Proceeds from
disposal of property and
equipment
|
-
|
24
|
1
|
7
|
2
|
115
|
745
|
Repayment of loans
from related parties
controlled by Shanda
|
-
|
-
|
-
|
-
|
499
|
-
|
-
|
Proceeds from
disposal of equity
interest in affiliates
|
-
|
-
|
-
|
-
|
1,452
|
-
|
-
|
Net cash provided
by (used in)
investing activities
|
-
|
23
|
(1)
|
(5)
|
1,743
|
99
|
641
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
Proceeds from
exercise of stock options
|
-
|
-
|
-
|
-
|
339
|
13
|
84
|
Borrowings from
related parties
controlled by Shanda
|
-
|
-
|
-
|
-
|
5,847
|
4,631
|
30,000
|
Net cash provided
by financing
activities
|
-
|
-
|
-
|
-
|
6,186
|
4,644
|
30,084
|
Effect of exchange
rate changes on cash
and cash equivalents
|
7
|
20
|
12
|
1,044
|
(10)
|
32
|
882
|
Net increase
(decrease) in cash and
cash equivalents
|
1,607
|
(272)
|
(208)
|
(384)
|
2,709
|
3,318
|
22,686
|
Cash and cash
equivalents, beginning of
period
|
2,773
|
8,178
|
7,906
|
50,250
|
1,671
|
4,380
|
27,180
|
Cash and cash
equivalents, end of
period
|
4,380
|
7,906
|
7,698
|
49,866
|
4,380
|
7,698
|
49,866
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/ku6-media-reports-unaudited-financial-results-for-the-fourth-quarter-and-full-year-of-fiscal-year-2015-300207717.html
SOURCE Ku6 Media Co., Ltd.