SNMD just reported...as follows:
Sun New Media Reports Third Quarter Fiscal 2007 Financial Results and Continues With Its Major Restructuring Efforts
NEW YORK, Feb. 15 /PRNewswire-FirstCall/ -- Sun New Media, Inc. (OTC Bulletin Board: SNMD), a Chinese Internet-based business media and on-line merchant company today reported its third quarter fiscal 2007 financial results.
Three Months Ended December 31, 2006
Revenue for the third quarter of fiscal 2007 was $4.0 million, with gross profit in the same period of $1.9 million and a gross profit margin of 47.5%. Operating loss for the third quarter of fiscal 2007 was $26.7 million. Operating results include: general and administrative costs of $1.6 million; depreciation and amortization expense of $0.7 million, consulting and professional fee expenses of $0.3 million; a gain from repurchase of stock grant at no consideration of $0.5 million: and, a $26.6 million loss on the impairment of goodwill and intangible assets. The non-cash impairment charge was associated with the previously announced restructuring of our beverage business and the associated retirement of 14.9 million Company shares. Excluding the impact of the $0.5 million gain and $26.6 million on the impairment of goodwill and intangible assets, on a pro-forma basis, operating loss would have been $0.6 million.
Sun New Media reported third quarter fiscal 2007 net loss of $26.9 million, or $0.27 per diluted share outstanding. On a pro-forma basis, excluding the impact of the gain of $0.5 million recognized on the repurchase of stock grant at no consideration and $26.6 million on the impairment of goodwill and intangible assets, the company would have reported a loss of $0.8 million, or $0.01 per diluted share outstanding.
Nine Months Ended December 31, 2006
Revenue for the first nine months of fiscal 2007 was $18.9 million, with gross profit in the same period of $14.3 million and a gross profit margin of 75.7%. Operating loss for the first nine months of fiscal 2007 was $16.3 million. Operating results included: sales, general and administrative costs of $5.1 million, depreciation and amortization expense of $2.0 million; consulting and professional fee expenses of $1.3 million; stock-based compensation expense of $2.0 million and, a gain from repurchase of stock grants at no consideration of $6.3 million; and, a $26.6 million loss on the impairment of goodwill and intangible assets. Excluding the impact of the $6.3 million gain and $2.0 million stock-based compensation expense, and the $26.6 million on the impairment of goodwill and intangible assets, on a pro-forma basis, operating profit would have been $5.9 million.
Sun New Media recognized other income of $10.9 million in the first nine months of fiscal 2007. This includes approximately $10.7 million, or $0.10 per diluted share, for the sale of certain b2c, non-core assets to Sun 3C Media Plc (formerly know as Sun TV Shop Plc), an AIM-listed company operating in the b2c space. Among the assets sold to Sun TV Shop by SNMD were an interest in a DMOC (Digital Mail Order Catalogs) business partnership and online digital publishing rights to various offline b2c publications. The company also had a non-cash expense of $2.6 million associated with the amortization on the discount of a note issuance.
Sun New Media reported net loss for the nine months ended December 31, 2006 of $8.6 million, or $0.06 per diluted share outstanding. Excluding the $10.7 million gain on asset sale; the impact of the $6.3 million gain recognized on the repurchase of stock grant at no consideration and $2.0 million stock-based compensation expense; a $26.6 million loss on the impairment of goodwill and intangible assets; and, a non-cash expense of $2.6 million associated with the amortization on the discount of a note issuance, on a pro-forma basis, the Company would have reported earnings of $5.4 million and earnings per diluted share of $0.05.
Dr. Bruno Wu, Chairman and Chief Executive Officer of Sun New Media, said 'As we near the completion of our reorganization process, following an aggressive period of expansion and new business initiatives, we would like to extend our deepest appreciation to our shareholders who have supported us. The last six months have represented the inception of executing the company's vision of building China's leading internet based business media services company with capabilities of servicing on-line exhibition, a direct buyer's community, database marketing and loyalty programs. We remain optimistic about the market potential of our businesses in the Chinese economy and anticipate a strong year of growth in 2007.'
Highlights:
-- Restructured the beverage distribution business, resulting in the
reduction of outstanding share count by 14.9 million shares.
-- Completed the acquisition of our electronic components marketing and
distribution business.
-- Restructured corporate overhead activities to substantially reduce
future costs.
-- Continued discussions which may result in further share count reduction
and divestiture of non-core assets.
-- Restructured our warrant financing agreement with Barron Partners LLP,
thereby reducing the total number of outstanding warrants from
11.5 million to 3 million.
Dr. Wu continued, 'With the new-year comes a strengthened focus onto our core competency - to build the company into China's leading business media services company with exhibition & small business/direct buyer community, and to service this community with a suite of cutting-edge B2B and B2C exhibition, marketing and transactional services. Our vision for NextMart is a 365 day exhibition and small business/direct buyer community, where small business owners and direct buyers come together to review, rate, recommend and discover new products. This will allow businesses and consumers to purchase products and services online with ease and security, and enjoy direct order delivery any time, anywhere.'
Conference Call
Sun New Media Inc. management will hold a conference call on February 16, 2007 at 10:00 a.m. ET to discuss financial results. Listeners may access the call by dialing 1-888-802-8571 or 1-973-582-2794 for international callers. A live webcast will also be available through the Sun New Media Inc. company website at www.sunnewmedia.net. A replay of the call will be available after 1:00 p.m. ET through February 23, 2007. Listeners may access the replay by dialing 1-877-519-4471 or 1-973-341-3080 for international callers. The replay pass code is 8460434.
Non-GAAP Financial Measures
A reconciliation between GAAP and Non-GAAP results is shown immediately following the Unaudited Condensed Consolidated Statements of Cash Flows.
The Company believes that the presentation of the above Non-GAAP measures provides useful information to investors regarding certain additional financial and business trends relating to its financial condition and results of operations. The Company believes when U.S. GAAP results are viewed in conjunction with these Non-GAAP measures, investors are provided with a more meaningful understanding of the Company's ongoing operating performance. In addition, the Company's management uses these measures for reviewing the Company's financial results.
These measures should be considered in addition to results prepared in accordance with U.S. GAAP, but should not be considered a substitute for, or superior to, GAAP results. The Company has reconciled Non-GAAP financial measures included in this press release to the nearest GAAP measure. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these Non-GAAP financial measures to their most directly comparable GAAP financial measure.
About Sun New Media Inc.
Sun New Media is a Chinese Internet based business media company that builds direct-buyer communities and services them with digital media offerings, on-line exhibitions and customer loyalty programs. Sun New Media also builds e-enabled distribution systems, transaction platforms and business communities in fast growing Chinese vertical markets, connecting buyers and sellers with a suite of turnkey digital media, e-commerce, and information management solutions. Companies leverage Sun New Media's web-based business media communities to access vital industrial intelligence and forge trading relationships with suppliers and buyers that promote cost efficiencies and increased distribution reach. Learn more at www.sunnewmedia.net.
This press release includes statements that may constitute 'forward- looking' statements, usually containing the word 'believe,' 'estimate,' 'project,' 'expect,' 'plan,' 'anticipate' or similar expressions. Forward- looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Factors that would cause or contribute to such differences include, but are not limited to, continued acceptance of Sun New Media's product and services in the marketplace, competitive factors and changes in regulatory environments. These and other risks relating to Sun New Media's business are set forth in Sun New Media's Annual Report on Form 10-KSB, and other reports filed by the Company from time to time with the Securities and Exchange Commission. By making these forward-looking statements, Sun New Media disclaims any obligation to update these statements for revisions or changes after the date of this release.
CONTACT
Tom Schuler, CFO of Sun New Media, Inc.
(317) 379-8255
SUN NEW MEDIA INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
As of December 31, 2006 and March 31, 2006
(Unaudited) (Audited)
December March
31, 31,
2006 2006
US$'000 US$'000
ASSETS
Current Assets
Cash and bank balances 1,590 1,374
Accounts receivables, net of provision for
doubtful debts $69,281 (Mar 31, 2006: $72,046) 7,831 416
Other receivables, prepayments and deposits 1,938 466
Inventories 318 85
Marketable securities 15,765 8,140
Amounts due from stockholders 409 292
Amounts due from related parties 746 893
Total current assets 28,597 11,666
Investment in affiliate 241 25
Goodwill and intangible assets 35,597 61,795
Plant and equipment 5,516 2,205
Clearing broker deposit - 37
Total Assets 69,951 75,728
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable 1,009 987
Other payables and accruals 2,686 6,928
Amounts due to related parties - 489
Factoring loan 185 233
Income taxes payable 286 -
Total current liabilities 4,166 8,637
Minority interest 1,286 (102)
Convertible notes - 2,816
Discount on warrants - (2,570)
Commitments and Contingencies (Note 16)
STOCKHOLDERS' EQUITY
Common stock; authorized 750,000,000 shares, US$0.01 -
par value
Preference stock, authorized 250,000,000 shares, US$0.01 -
par value
90,153,628/ 84,055,510 shares of common stock issued 902 841
and outstanding, US$0.01 par value
1,321,859/ 14,537,253 shares of common stock reserved 13 145
to be issued, US$0.01 par value
Additional paid in capital 94,859 79,439
Accumulated other comprehensive (loss) income:
Unrealized loss on marketable securities (9,186) -
Foreign currency translation adjustments (2) 2
Deficit (22,087) (13,480)
Total stockholders' equity 64,499 66,947
Total liabilities and stockholder's equity 69,951 75,728
SUN NEW MEDIA INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
Three months ended Nine months ended
December 31 December 31
2006 2005 2006 2005 (1)
US$'000 US$'000 US$'000 US$'000
Revenues 3,951 182 18,937 209
Costs of revenue 2,058 92 4,669 111
Gross Profit 1,893 90 14,268 98
Operating Expenses
General and administrative 1,516 263 4,901 280
Marketing and sales 69 - 179 -
Depreciation and amortization 665 - 1,980 -
Stock-based compensation - - 1,965 -
Repurchase of stock grant (537) - (6,312) -
Consulting and professional fees 306 196 1,311 228
Finders' fee - - - 55
Impairment loss on
intangible assets 26,571 - 26,571 -
Total operating expenses 28,590 459 30,595 563
Operating loss from continuing
operations (26,697) (369) (16,327) (465)
Loss from discontinued operations - - (43) -
Interest expense (5) - (91) -
Amortization of discount on notes - - (2,570) -
Interest income 16 - 41 -
Other income 38 7 10,941 7
Share of (losses) profits
from affiliate (85) - 216 -
Loss before income tax expense
and minority interests (26,733) (362) (7,833) (458)
Income tax expenses (54) - (237) -
Loss after income tax expense
and before minority interests (26,787) (362) (8,070) (458)
Minority interests (67) - (513) -
Loss after income tax expense
and minority interests (26,854) (362) (8,583) (458)
Other comprehensive loss -
Currency translation adjustment (5) - (24) -
Net Loss (26,859) (362) (8,607) (458)
Basic loss per share (0.27) (0.01) (0.08) (0.01)
Shares used in computing
basic loss per share ('000) 99,630 64,516 101,820 41,397
Diluted net loss per share (0.27) (0.01) (0.06) (0.01)
Shares used in computing basic
(loss) per share ('000) 99,630 64,516 101,820 41,397
* During the three months ended December 31, 2006, there was a
repurchase of stock grant at no consideration which resulted in gain
of $537,000 relating to stock options granted to Independent
Directors. In addition, for the nine months ended December 31, 2006,
there was a repurchase of stock grant at no consideration which
resulted in gain of $5.8 million relating to 1.5 million performance
shares that were granted and accrued for during the fiscal period
ended March 31, 2006.
(1) Information is presented for the period from June 6, 2005 (date of
commencement of operations) to December 31, 2005. The Company changed
its financial year end from September 30 to March 31 on February 17,
2006.
SUN NEW MEDIA INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
Nine months ended
December 31
2006 2005 (1)
US$'000 US$'000
Cash flows from operating activities
Net loss for the period before income taxes
and minority interests (7,833) (458)
Adjustments to reconcile net income (loss) to
net cash used in operating activities;
Depreciation and amortization 1,980 -
Impairment loss on intangible assets 26,571 -
Share of profits from affiliate (216) -
Gain on disposal of assets (10,743) -
Gain on disposal of subsidiary companies (74) -
Consultancy services 150 -
Stock-based compensation 1,965 -
Repurchase of stock grant* (6,312) -
Finders' fee (1,600) 55
Amortization of discount on notes 2,570 -
Changes in operating assets and liabilities:
Accounts receivable (8,769) (51)
Other debtor, deposits and prepayments (477) (354)
Inventories 280 -
Amounts due from related parties 147 (3)
Amounts due from stockholders (117) 160
Accounts payable (892) 25
Other payables and accruals (35) 414
Amounts due to related parties (489) 1
Net cash used in operating activities (3,894) (211)
Cash flows from investing activities
Proceeds from sale of plant and equipment 467 -
Purchase of plant and equipment (2,300) (2)
Cash (used in)/ acquired in business
combination, net (2,224) 50
Disposal of subsidiary companies, net 23 -
Capitalization of intangible assets (384) -
Net cash used in investing activities (4,418) 48
Cash flows from financing activities
Issuance of common stock 9,431 373
Proceeds from convertible note - 918
Expenses incurred on issuance of common stocks (875) -
Repayment of factoring loans (48) -
Net cash provided by financing activities 8,508 1,291
Net effect of exchange rate changes on
consolidating subsidiaries 20 -
Net increase in cash and cash equivalents 216 1,128
Cash and cash equivalents, beginning of the period 1,374 -
Cash and cash equivalents, end of the period 1,590 1,128
* During the three months ended December 31, 2006, there was a
repurchase of stock grant at no consideration which resulted in gain
of $537,000 relating to stock options granted to Independent
Directors. In addition, for the nine months ended December 31, 2006,
there was a repurchase of stock grant at no consideration which
resulted in gain of $5.8 million relating to 1.5 million performance
shares that were granted and accrued for during the fiscal period
ended March 31, 2006.
(1) Information is presented for the period from June 6, 2005 (date of
commencement of operations) to December 31, 2005. The Company changed
its year end from September 30 to March 31 on February 17, 2006.
SUN NEW MEDIA INC.
PRO-FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
Three months ended Nine months ended
December 31, December 31,
2006 2005 2006 2005 (1)
US$'000 US$'000 US$'000 US$'000
Operating loss from
continuing operations (26,697) (369) (16,327) (465)
Add (less):
Stock-based compensation - - 1,965 -
Repurchase of stock grant (537) - (6,312) -
Impairment loss on
intangible assets 26,571 - 26,571 -
Pro-forma operating (loss)
income from continuing
operations (663) (369) 5,897 (465)
Net loss (26,859) (362) (8,607) (458)
Add (less):
Stock-based compensation - - 1,965 -
Repurchase of stock grant (537) - (6,312) -
Impairment loss on
intangible assets 26,571 - 26,571 -
Amortization of discount
on notes - - 2,574 -
Other income - - (10,743) -
Pro-forma net (loss) income (825) (362) 5,448 (458)
Basic net (loss) income
per share (0.01) (0.01) 0.03 (0.01)
Shares used in computing
basic income per
share ('000) 99,630 64,516 101,820 41,397
Diluted net (loss) income
per share (0.01) (0.01) 0.05 (0.01)
Shares used in computing
diluted income per
share ('000) 99,630 64,516 103,213 41,397
(1) Information is presented for the period from June 6, 2005 (date of
commencement of operations) to December 31, 2005. The Company changed
its year end from September 30 to March 31 on February 17, 2006.
SOURCE Sun New Media, Inc. |
