2007'04.28.Sat
TOM Online Reports 1Q 2007 Results
April 27, 2007
BEIJING, April 27 /Xinhua-PRNewswire/ -- TOM Online
Inc., (Nasdaq: TOMO; Hong Kong GEM: 8282) (the
"Company" or "TOM Online") a leading
wireless Internet company in China, announced today the
results of the Company and its controlled operating
entities including subsidiaries and variable interest
entities (collectively referred to as the
"Group") for the first quarter ended March 31,
2007.
Financial Highlights
For the first quarter of 2007:
-- Total revenues were US$35.14 million
("mn"), a decrease of 26.0% from
the same period last year but an increase of 4.5%
from last quarter.
-- Wireless Internet service revenues were US$31.82 mn,
representing a
28.4% decrease from the same period last year but a
7.5% increase from
the previous quarter. Wireless Internet service
revenues made up 90.6%
of our total quarterly revenues.
-- Online advertising revenues were US$2.66 mn,
representing a 1.7%
decrease from the same period last year and a 15.8%
decrease from the
previous quarter. Online advertising revenues made
up 7.6% of our
total quarterly revenues.
-- Net income for 1Q07 was US$0.15 mn compared to net
income of US$12.14
mn in 1Q06 and net loss of US$0.51 mn in 4Q06. 1Q07
net income
included our share of losses from our TOM EachNet
Joint Venture ("JV")
of US$2.92 mn.
-- Fully diluted earnings per American Depository Share
("ADS") were
US$0.3 cents or US$0.003 cents per common share.
-- Our balance of cash and cash equivalents and
short-term bank deposits
was approximately US$144.10 mn at the end of the
first quarter of 2007.
First Quarter 2007 - Financial Performance Review
The Company's unaudited consolidated revenues for the
three months ended March 31, 2007 were US$35.14 mn, a
decrease of 26.0% compared to the same period year on year
("YoY") but an increase of 4.5% quarter on
quarter ("QoQ").
Wireless Internet service revenues were US$31.82 mn,
representing a 28.4% decrease from the same period last
year but a 7.5% increase from the previous quarter.
Wireless Internet service revenues made up 90.6% of total
quarterly revenues compared to 88.0% in 4Q06.
Online advertising revenues were US$2.66 mn,
representing a 15.8% decrease QoQ and 1.7% decrease YoY.
Online advertising revenues made up 7.6% of our total
quarterly revenues compared to 9.4% in 4Q06.
Other revenues were US$0.66 mn in 1Q07 compared to
US$0.86 mn in 4Q06 and US$0.38 mn in 1Q06. Other revenues
made up 1.8% of total revenues in 1Q07. Other revenues
consist of revenues from online games, paid email and
others.
Gross profit was US$8.58 mn representing a decrease of
56.4% compared to the same period last year and a 24.6%
decline QoQ. Gross margins declined to 24.4% in 1Q07
compared to 33.8% in the 4Q06 and 41.4% in the 1Q06. The
sequential decline in gross margins was due to a number of
factors including (a) although IVR revenues benefited from
significantly increased capacity on China Mobile's
centralized IVR platform, IVR revenue share by China Mobile
increased from 15% to 30% (b) WVAS content and distribution
costs increased sequentially due to competition for those
resources (c) higher gross margin WAP revenues declined in
contribution to 20.4% of total wireless Internet service
revenues in 1Q07 from 24.7% in 4Q06 and (d) due to the
Chinese New Year period, online advertising revenues
declined relative to the fixed costs of running our portal,
thereby reducing margins in our online advertising business.
Total cost of revenues were US$26.56 mn in 1Q07 compared to
US$22.24 mn in 4Q06 and US$27.84 mn in 1Q06.
Total operating expenses were US$5.84 mn in 1Q07
compared to US$8.30 mn in 4Q06 and US$8.79 mn in 1Q06. The
sequential decline in operating expenses was mainly due to
reduced sales and marketing activities in 1Q07 compared to
4Q06, a US$0.41mn one-time refund of prior year's marketing
expenses from a mobile operator partner and the reversal of
US$0.58 mn previously accrued marketing expenses as it was
confirmed that the accrual would not be required to be
paid. Sales and marketing expenses in 1Q07 were US$0.56 mn
compared to US$2.23 mn in 4Q06.
Operating profit was US$2.74 mn, down 74.8% from the
same period last year and a decrease of 10.9% from the
previous quarter. Operating margins were 7.8% in 1Q07
compared to 9.2% in 4Q06 and 22.9% in 1Q06.
1Q07 EBITDA ("Earnings before Interest, Taxes,
Depreciation and Amortization") were US$4.74 mn, a
decrease of 63.3% YoY and a 13.7% decline QoQ. EBITDA
margins were 13.3% for the quarter compared to 15.8% in
4Q06 and 26.6% in 1Q06.
Beginning on February 1, 2007, we recognized our share
of losses from the TOM EachNet JV based on the equity
method of accounting. For the two months ended March 31,
2007, our 51% share of losses from the TOM EachNet JV were
US$2.92 mn and has been included in share of loss on equity
investment in a joint venture in the unaudited consolidated
statements of operations.
Net income was US$0.15 mn compared to net loss of
US$0.51 mn in 4Q06 and net income of US$12.14 mn in 1Q06.
1Q07 net income included US$0.38 mn in losses from
discontinued operations offset by exchange gain of US$0.59
mn due to the effect of the appreciation of RMB upon the
translation of our net non-RMB liabilities at the period
end as our functional currency is RMB.
US GAAP basic earnings per ADS were US$0.3 cents for
the quarter. US GAAP basic earnings per Hong Kong ordinary
share were US$0.003 cents for the quarter. Shares used in
computing US GAAP basic earnings per ADS were 53.25 mn and
shares used in computing US GAAP basic earnings per Hong
Kong ordinary share were 4,259.65 mn.
US GAAP diluted earnings per ADS were US$0.3 cents for
the quarter. US GAAP diluted earnings per Hong Kong
ordinary share were US$0.003 cents for the quarter. Shares
used in computing US GAAP diluted earnings per ADS were
53.26 mn shares and shares used in computing US GAAP
diluted earnings per Hong Kong ordinary share were 4,260.42
mn.
Our balance of cash and cash equivalents and short-term
bank deposits was approximately US$144.10 mn at the end of
1Q07.
Business Review
Wireless Internet Services
Total wireless Internet service revenues were US$31.82
mn for 1Q07, an increase of 7.5% QoQ but a decrease of
28.4% YoY. Wireless Internet service revenues accounted
for 90.6% of our total revenues in 1Q07 compared to 88.0%
in 4Q06.
2G Services - SMS
SMS ("Short Messaging Service") revenues in
1Q07 were US$8.70 mn, down 7.8% QoQ and a 50.1% decline
YoY. SMS revenues made up 27.3% of our total wireless
Internet service revenues for the quarter. The primary
factors for the continued QoQ decline in our SMS business
were ongoing implementation of operator policies and a
further reduction in contribution from Infomax's SMS
business due to a QoQ decline in interactive programming
opportunities.
2.5G services
MMS ("Multimedia Messaging Service") revenues
for 1Q07 were US$3.20 mn, up 34.3% QoQ but down 21.8% YoY.
MMS revenues made up 10.1% of our total wireless Internet
service revenues in the quarter. Although our MMS business
benefited from marketing activities related to the Chinese
New Year period, as discussed in our previous
quarterly/annual reports, we continue to believe that MMS
is a transitory product category and do not expect MMS to
be a key business driver to our overall business in coming
years.
WAP ("Wireless Application Protocol")
revenues for 1Q07 were US$6.48 mn, representing a 11.4%
decrease QoQ and 17.2% decrease YoY. WAP revenues made up
20.4% of our total wireless Internet service revenues in
the quarter. While our WAP portal partnership with China
Mobile continues to perform well, our WAP revenues declined
in 1Q07 as many of the services we provide on China Mobile's
Monternet portal are currently offered free of charge and
WAP revenues from Infomax declined due to a QoQ reduction
in interactive programming opportunities.
Voice services
IVR ("Interactive Voice Response") revenues
in 1Q07 were US$9.80 mn, up 23.7% QoQ but down 20.0% YoY.
IVR revenues made up 30.8% of our total wireless Internet
service revenues in the quarter. As of January 2007, our
IVR operations were transitioned to China Mobile's
centralized IVR platform which resulted in a significant
increase in capacity for our IVR business allowing us to
take better advantage of peak hour end-user demand for our
services compared to previous periods.
CRBT ("Colour Ringback Tones") revenues in
1Q07 were US$3.35 mn, up 45.6% QoQ and up 36.2% YoY. CRBT
revenues made up 10.5% of our total wireless Internet
service revenues in the quarter. Our CRBT business
continued to increase QoQ due to Chinese New Year related
and other event driven promotional activities with mobile
operator partners. While CRBT revenues increased YoY due
to our expanding relationship with China Mobile's
centralized music platform and continued declines in the
average unit price of CRBT, stimulating end-user demand.
Other Wireless Internet Services
Other wireless Internet service revenues were US$0.29
mn, representing a 24.4% increase QoQ. Other wireless
Internet service revenues made up 0.9% of our total
wireless Internet service revenues and consist primarily of
revenues from Java-based mobile game download services.
Historically, we included revenues from our Indiagames
subsidiary as part of other wireless Internet service
revenues. However, due to the re-classification of
Indiagames as "held-for-sale" at the end of 2006,
the associated (losses)/income of Indiagames have been
separately reported as (losses)/income from discontinued
operations below our (losses)/income from continuing
operations.
Online Advertising and Portal
Online advertising revenues were US$2.66 mn in 1Q07,
representing a decrease of 15.8% QoQ and decrease of 1.7%
YoY. Whilst our portal remains an important business area
for the Company, we continue to face competitive pressures
for share of advertiser budgets allocated towards our
target audience, the young and trendy demographic. In 1Q07
this was compounded by a traditional slowdown in the online
advertising market due to the Chinese New Year period.
New Business Opportunities
TOM-SKYPE JV and TOM EachNet JV
At the end of March 2007, we had over 35.5 mn
registered TOM-Skype users up from over 31.5 mn at the end
of January 2007.
Beginning on February 1, 2007, we recognized our share
of losses from the TOM EachNet JV based on the equity
method of accounting. For the two months ended March 31,
2007, our 51% share of losses from the TOM EachNet JV were
US$2.92 mn and has been included in share of loss on equity
investment in a joint venture in the unaudited consolidated
statements of operations .
Proposed conditional possible privatisation of TOM
Online
On March 9, 2007, the respective directors of the
Company and TOM Group Limited ("TOM") jointly
announced that on March 3, 2007, a letter was sent by TOM
to inform the Company that TOM was considering making a
proposal to take the Company private by way of a scheme of
arrangement ("Proposal") under Section 86 of the
Cayman Islands Companies Law. On March 9, 2007, TOM
requested the board of directors of TOM Online to put
forward the Proposal to TOM Online's shareholders. On
April 25, 2007, TOM announced that the Proposal and the
transactions contemplated thereunder were approved at its
extraordinary general meeting held on April 25, 2007. If
the Proposal is made, a scheme document (the "Scheme
Document") in relation to the Proposal and the related
offers to optionholders will be sent by the Company and TOM
to, among others, shareholders and optionholders of the
Company. As stated in the joint announcement of the
Company and TOM dated March 30, 2007, the time limit for
the despatch of the Scheme Document has been extended to
May 7, 2007. A joint announcement will be made by the
Company and TOM in relation to the despatch of the Scheme
Document. For further details of the Proposal, please see
the joint announcement of the Company and TOM dated March
9, 2007, the announcement of the Company dated March 28,
2007, the joint announcement of the Company and TOM dated
March 30, 2007 and the announcement of TOM dated April 11,
2007, which were posted on the website of the Growth
Enterprise Market of the Stock Exchange of Hong Kong on
March 12, 2007, March 28, 2007, April 2, 2007 and April 13,
2007, respectively, and filed with the U.S. Securities and
Exchange Commission under Form 6K on March 12, 2007, March
29, 2007, March 30, 2007 and April 12, 2007, respectively.
About TOM Online Inc.
TOM Online Inc. (Nasdaq: TOMO, Hong Kong GEM: 8282) is
a leading wireless Internet company in China providing
value-added multimedia products and services. A premier
online brand in China targeting the young and trendy
demographics, the Company's primary business activities
include wireless value-added services and online
advertising. The company offers an array of services such
as SMS, MMS, WAP, wireless IVR (interactive voice response)
services, content channels, search and classified
information, and free and fee-based advanced email. As at
March 31, 2007, TOM Online is the only portal in China that
enjoyed a top three ranking in every wireless Internet
segment.
FORWARD-LOOKING STATEMENTS
This announcement contains statements that may be
viewed as "forward-looking statements" within the
meaning of Section 27A of the United States Securities Act
of 1933, as amended, and Section 21E of the United States
Securities Exchange Act of 1934, as amended. Such
forward-looking statements are, by their nature, subject to
significant risks and uncertainties that may cause the
actual performance, financial condition or results of
operations of the Company to be materially different from
any future performance, financial condition or results of
operations implied by such forward-looking statements. Such
forward-looking statements include, without limitation,
statements that are not historical fact relating to the
financial performance and business operations of the
Company in mainland China and in other markets, the
continued growth of the telecommunications industry in
China and in other markets, the development of the
regulatory environment and the Company's latest product
offerings, and the Company's ability to successfully
execute its business strategies and plans.
Such forward-looking statements reflect the current
views of the Company with respect to future events and are
not a guarantee of future performance. Actual results may
differ materially from information contained in the
forward-looking statements as a result of a number of
factors, including, without limitation, any changes in our
relationships with telecommunication operators in China and
elsewhere, the effect of competition on the demand for the
price of our services, changes in customer demand and usage
preference for our products and services, changes in the
regulatory policies by relevant government authorities, any
changes in telecommunications and related technology and
applications based on such technology, and changes in
political, economic, legal and social conditions in China,
India and other countries where the Company conducts
business operations, including, without limitation, the
Chinese government's policies with respect to economic
growth, foreign exchange, foreign investment and entry by
foreign companies into China's telecommunications market.
Please also see "Item 3 - Key Information - Risk
Factors" section of the Company's annual report on
Form 20-F for the year ended December 31, 2005 as filed
with the United States Securities and Exchange Commission.
Non-GAAP financial measure
To supplement the financial measures prepared in
accordance with US GAAP, the Company uses Non-GAAP
financial measure of EBITDA ("Earnings before
Interest, Taxes, Depreciation and Amortization") which
is adjusted from results based on US GAAP in analyzing its
financial results. The use of Non-GAAP measure is provided
to enhance the reader's overall understanding of the
Company's current financial performance and its prospects
for the future. Specifically, the Company believes the
Non-GAAP results provide useful information to both
management and investors by excluding certain items that
are not expected to result in future cash payments.
In calculating the EBITDA, depreciation and
amortization expenses have been excluded from the Total
Operating Profit. Although the Company has historically
reported US GAAP results to investors, the Company believes
the inclusion of Non-GAAP financial measure provides further
information in its financial reporting. The Non-GAAP
financial measure may be different from Non-GAAP financial
measure used by other companies, and should be considered
in addition to results prepared in accordance with US GAAP,
but should not be considered a substitute for or superior to
US GAAP measure.
CONSOLIDATED BALANCE SHEETS
Audited Unaudited
December
31, March 31,
2006
2007
(in
thousands of U.S. dollars)
Assets
Current Assets:
Cash and cash equivalents
110,993 118,236
Short-term bank deposits
25,613 25,860
Accounts receivable, net
23,473 22,148
Restricted cash
300 300
Prepayments
4,754 4,138
Deposits and other receivables
2,616 3,552
Due from related parties
170 613
Inventories
65 68
Assets held for sale
12,192 12,118
Total current assets
180,176 187,033
Restricted securities
97,729 98,213
Investment under cost method
1,588 1,603
Long-term prepayments and deposits
333 336
Property and equipment, net
15,360 13,759
Deferred tax assets
673 680
Goodwill, net
214,791 216,859
Intangibles, net
2,949 2,612
Total assets
513,599 521,095
CONSOLIDATED BALANCE SHEETS (continued)
Audited Unaudited
December
31, March 31,
2006
2007
(in
thousands of U.S. dollars)
Liabilities and shareholders' equity
Current liabilities:
Accounts payable
9,365 7,602
Other payables and accruals
14,679 16,275
Income tax payable
432 679
Deferred revenues
328 584
Consideration payable
12,037 12,153
Short-term bank loan
35,340 35,340
Due to related parties
204 282
Equity investment in a joint venture
-- 2,670
Liabilities held for sale
1,131 1,317
Total current liabilities
73,516 76,902
Non-current liabilities:
Secured bank loan
55,271 55,271
Liabilities for unrecognized tax benefits
-- 1,386
Deferred tax liabilities
152 153
Total liabilities
128,939 133,712
Minority interests
878 864
Minority interests of a subsidiary held for
sale
2,324 2,150
132,141 136,726
Shareholders' equity:
Share capital
(ordinary share, US$0.001282 par value,
10,000,000,000 shares authorized,
4,259,654,528 and 4,259,654,528
shares issued and outstanding as at
December 31, 2006 and March 31, 2007
respectively)
5,461 5,461
Paid-in capital
322,459 323,068
Statutory reserves
11,535 11,535
Accumulated other comprehensive income
10,645 14,175
Retained earnings
31,358 30,130
Total shareholders' equity
381,458 384,369
Total liabilities, minority interests and
shareholders' equity
513,599 521,095
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
Three
months ended March 31,
2006 2007
(Restated)**
(in
thousands of U.S. dollars,
except
for number of shares
and per share data)
Revenues:
Wireless Internet services
44,413 31,818
Online advertising
2,702 2,657
Others
384 663
Total revenues
47,499 35,138
Cost of revenues:
Cost of services*
(27,840) (26,558)
Total cost of revenues
(27,840) (26,558)
Gross profit
19,659 8,580
Operating expenses:
Selling and marketing expenses*
(1,214) (555)
General and administrative expenses*
(7,009) (4,659)
Product development expenses*
(454) (260)
Amortization of intangibles
(113) (364)
Total operating expenses
(8,790) (5,838)
Operating profit
10,869 2,742
Other income/(loss):
Net interest income
443 399
Exchange gain
918 586
Share of loss on equity investment in a joint
venture
-- (2,923)
Income from continuing operations before tax
12,230 804
Income tax expenses
(6) (302)
Income from continuing operations after tax
12,224 502
Minority interests
6 23
Income from continuing operations
12,230 525
Loss from discontinued operations, net of
income tax
(95) (380)
Net income attributable to shareholders
12,135 145
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(continued)
Three
months ended March 31,
2006 2007
(Restated)**
(in
thousands of U.S. dollars,
except
for number of shares
and per share data)
Earnings/(Losses) per ordinary share - basic
(cents):
Continuing operations
0.290 0.012
Discontinued operations
-- (0.009)
Total earnings per ordinary share - basic
0.290 0.003
Earnings/(Losses) per ordinary share - diluted
(cents):
Continuing operations
0.280 0.012
Discontinued operations
-- (0.009)
Total earnings per ordinary share - diluted
0.280 0.003
Earnings/(Losses) per American Depositary
Share - basic (cents):
Continuing operations
23.1 1.0
Discontinued operations
(0.2) (0.7)
Total earnings per American Depositary Share -
basic
22.9 0.3
Earnings/(Losses) per American Depositary
Share - diluted (cents):
Continuing operations
22.8 1.0
Discontinued operations
(0.2) (0.7)
Total earnings per American Depositary Share -
diluted
22.6 0.3
Weighted average number of shares
used in computing Earnings/(Losses)
Per Share:
Ordinary share - basic
4,240,608,912 4,259,654,528
Ordinary share - diluted
4,291,046,914 4,260,424,095
American Depositary Share - basic
53,007,611 53,245,682
American Depositary Share - diluted
53,638,086 53,255,301
* Included share-based compensation
expense under SFAS 123R
Cost of services
24 19
Selling and marketing expenses
1 1
General and administrative expenses
745 411
Product development expenses
8 7
**Figures in 2006 were restated as the results of
Indiagames were
separately presented under "Discontinued
Operations".
UNAUDITED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
Number of Share
Paid-in Statutory
shares capital
capital reserves
(in thousands of
U.S. dollars except
for number
of shares)
Balance as of January 1, 2006 4,224,532,105 5,416
312,643 11,396
Issuance of shares on exercise
of employee share options 22,599,611 29
4,317 --
Share-based compensation -- --
778 --
Unrealized loss on securities -- --
-- --
Currency translation adjustments -- --
-- --
Net income for the period -- --
-- --
Balance as of March 31, 2006 4,247,131,716 5,445
317,738 11,396
Balance as of January 1, 2007 4,259,654,528 5,461
322,459 11,535
Effect of adoption of FIN 48 -- --
-- --
Balance as of January 1, 2007,
as restated 4,259,654,528 5,461
322,459 11,535
Share-based compensation -- --
609 --
Unrealized gain on securities -- --
-- --
Currency translation adjustments -- --
-- --
Net income for the period -- --
-- --
Balance as of March 31, 2007 4,259,654,528 5,461
323,068 11,535
UNAUDITED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
Accumulated other Retained
Total
comprehensive earnings
shareholders'
(losses)/income
equity
Balance as of January 1, 2006 (3,187) 2,842
329,110
Issuance of shares on exercise
of employee share options -- --
4,346
Share-based compensation -- --
778
Unrealized loss on securities (907) --
(907)
Currency translation adjustments 6,187 --
6,187
Net income for the period -- 12,135
12,135
Balance as of March 31, 2006 2,093 14,977
351,649
Balance as of January 1, 2007 10,645 31,358
381,458
Effect of adoption of FIN 48 --
(1,373) (1,373)
Balance as of January 1, 2007,
as restated 10,645 29,985
380,085
Share-based compensation -- --
609
Unrealized gain on securities 580 --
580
Currency translation adjustments 2,950 --
2,950
Net income for the period -- 145
145
Balance as of March 31, 2007 14,175 30,130
384,369
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
Three months ended
March 31,
2006 2007
(in thousands of
U.S. dollars)
Cash flow from operating activities:
Net income
12,135 145
Adjustments to reconcile net income to net cash
provided by operating activities:
Amortization of intangibles
181 364
Amortization of premium on debt securities
94 97
Allowance for doubtful accounts
159 155
Depreciation
2,092 2,286
Deferred income tax
-- 16
Minority interests
(21) (250)
Exchange gain, net
(918) (550)
Loss on disposal of property and equipment
2 --
Share-based compensation expense
778 438
Share of loss on equity investment in a joint venture
-- 2,923
Change in assets and liabilities, net of effects
from acquisitions:
Accounts receivable
(1,480) 1,940
Prepayments
456 470
Deposits and other receivables
(493) (766)
Due from related parties
(4) (443)
Inventories
(9) (3)
Accounts payable
172 (30)
Other payables and accruals
1,196 1,479
Income tax payable
(246) 133
Deferred revenues
12 252
Due to related parties
199 79
Net cash provided by operating activities
14,305 8,735
Cash flow from investing activities:
Payments for purchase of property and equipment
(1,740) (2,298)
Cash paid for short-term bank deposits
(736) --
Cash received from short-term bank deposits
-- 602
Net cash used in acquisitions of subsidiaries
(17,952) --
Contribution of services to joint venture
-- (87)
Net cash used in investing activities
(20,428) (1,783)
Cash flow from financing activities:
Issuance of ordinary shares including from the
exercise of shares options,
net of issuing expenses
4,346 --
Partial repayment of bank loan
(347) --
Net cash provided by financing activities
3,999 --
Net (decrease)/increase in cash and cash equivalents
(2,124) 6,952
Cash and cash equivalents, beginning of period
99,869 111,366
Foreign currency translation
544 795
Cash and cash equivalents, end of period
98,289 119,113
Representing:
Cash and cash equivalents in discontinued operations,
end of the period
1,096 877
Cash and cash equivalents in continuing operations,
end of the period
97,193 118,236
Supplemental disclosures of cash flow information
Cash (paid)/received during the period:
Cash paid for income taxes
(186) (110)
Interest received from bank deposit and debt
securities
1,049 1,045
Interest paid for loans due to parent company and
bank loans
(285) (1,290)
Non-cash activities:
Contribution of services to joint venture
-- (171)
The Non-GAAP financial measure has been reconciled to
the nearest US GAAP measure as follows:
Three
months ended March 31,
2006
2007
(in
thousands of U.S. dollars)
Operating profit/(loss):
Continuing operations
10,869 2,742
Discontinued operations
(221) (651)
Total operating profit
10,648 2,091
Add back: Depreciation
2,092 2,286
Amortization of intangibles and others
181 364
EBITDA
12,921 4,741
Appendix:
1. TOM EachNet Joint Venture
Pursuant to a joint venture deed signed between the
Company and eBay International AG ("eBay") on
December 20, 2006, a joint venture, TOM EachNet, has been
formed on February 1, 2007 to carry on the business of
owning and operating a mobile and Internet-based
marketplace in China. TOM EachNet is jointly controlled
and owned by the Company and eBay with each owing 51% and
49% interest respectively.
eBay provided an initial funding of US$40,000,000 cash
to TOM EachNet and the Company will provide a shareholder's
loan in the amount of US$20,000,000, bearing interest at
1.3% over London Inter-Bank Offered Rate, to TOM EachNet
when the remaining cash balance of TOM EachNet is only
enough to finance no more than six months of its operation.
If the funding from eBay and the shareholder's loan from
the Company have been fully utilized, additional funding in
the form of shareholders' loans of not exceeding
US$10,000,000 will be provided by the Company and eBay in
equal proportions if additional funding is required by TOM
EachNet and as mutually agreed by eBay and the Company. In
addition, eBay injected its subsidiary engaging in the
business of operating an online auction and marketplace
site in China to TOM EachNet while the Company contributes
its expertise in the Internet and mobile industries in
China and its leadership and management services to TOM
EachNet.
The Company accounts for this joint venture using the
equity method of accounting since February 1, 2007. As of
March 31, 2007, the Company had a negative investment in
TOM EachNet of US$2,670,000, representing its investment
cost of US$258,000, being contribution of services to TOM
EachNet by the Company and was capitalized upon provision
of the services to TOM EachNet, less the Company's share of
TOM EachNet's losses for the two months ended March 31, 2007
of US$2,923,000 and currency translation adjustment of
US$5,000. As the Company has a commitment to fund TOM
EachNet as disclosed above, such amount is classified as
current liability in the consolidated balance sheet.
2. Discontinued operations
In December 2006, the Company committed to a plan which
was approved by the Company's Board of Directors on December
29, 2006 to sell substantially all its equity interests in
Indiagames in order to focus on the China market and
initiated actions to locate a buyer. As a result, the
assets and liabilities of Indiagames were classified as
held for sale and presented separately in the asset and
liability sections, respectively, of the audited
consolidated balance sheet as at December 31, 2006 and the
unaudited consolidated balance sheet as at March 31, 2007.
The results of its operation were also separately presented
on the face of the unaudited consolidated statements of
operations under "Discontinued Operations" for
the three months ended March 31, 2006 and 2007. On March
5, 2007, the Company signed a binding term sheet with a
potential buyer of the disposal of Indiagames and the
definitive agreement was still under preparation as at
March 31, 2007.
The major classes of assets and liabilities classified
as held for sale were as follows:
Audited
Unaudited
December 31, 2006
March 31, 2007
(in thousands
of U.S. dollars)
Cash and cash equivalents 373
877
Short-term bank deposits 2,592
2,059
Account receivable, net 2,067
1,571
Other current assets 1,856
2,049
Goodwill, net 4,754
4,967
Other non-current assets 550
595
Assets held for sale 12,192
12,118
Accounts payable 104
214
Other payable and accruals 1,027
1,103
Liabilities held for sale 1,131
1,317
Minority shareholders' interest in Indiagames amounting
to US$2,324,000 and US$2,150,000 were reported separately in
the Group's audited/(unaudited) consolidated balance sheets
as at December 31, 2006 and March 31, 2007 respectively.
The unaudited results and cash flow information for
Indiagames during the three months ended March 31, 2006 and
2007 were as follows:
Three
months ended March 31,
2006
2007
(in
thousands of U.S. dollars)
Revenues
1,080 550
Operating expenses
(1,301) (1,201)
Operating loss
(221) (651)
Other income
45 --
Loss before tax
(176) (651)
Income tax credit
66 44
Loss after tax
(110) (607)
Minority interest
15 227
Loss from discontinued operations
(95) (380)
Three
months ended March 31,
2006 2007
(in
thousands of U.S. dollars)
Net cash provided by operating activities
708 38
Net cash (used)/provided in investing activities
(765) 555
Net cash provided in financing activities
-- --
Net (decrease)/increase in cash and cash
equivalents
(57) 593
Cash and cash equivalents, beginning of period
1,135 373
Foreign currency translation
18 (89)
Cash and cash equivalents, end of period
1,096 877
3. Earnings/(Losses) per share
(a) Basic earnings/(losses) per share
The calculation of basic earnings/(losses) per
share for the three
months ended March 31, 2007, is based on:
-- the unaudited consolidated income from
continuing operations, loss
from discontinued operations and net income
attributable to
shareholders of US$525,000, US$380,000 and
US$145,000 respectively
(2006: US$12,230,000 of unaudited consolidated
income from
continuing operations, US$95,000 of loss from
discontinued
operations, and US$12,135,000 of net income
attributable to
shareholders, respectively); and
-- the weighted average number of 4,259,654,528
(2006: 4,240,608,912)
ordinary shares outstanding during the period
and 53,245,682 (2006:
53,007,611) American Depositary Shares
("ADS") outstanding during
the period.
(b) Diluted earnings/(losses) per share
The calculation of diluted earnings/(losses) per
share for the three
months ended March 31, 2007, is based on:
-- the same data in Appendix 3(a); and
-- the weighted average number of 4,260,424,095
(2006: 4,291,046,914)
ordinary shares, after adjusting for the effects
of all dilutive
potential shares during the period and
53,255,301 (2006:
53,638,086) ADS outstanding during the period.
For the three months ended March 31, 2007, the weighted
average number of 181,145,569 stock options outstanding were
excluded from the computation of diluted losses per share
primarily because the exercise prices of the options were
greater than the average market price of the ordinary
shares making such options anti dilutive.
For more information, please contact:
Rico Ngai
Investor and Corporate Communications
TOM Online Inc.
Tel: +86-10-6528-3399 x6940
Mobile: +86-139-118-95354
Skype: ricoinrio
PR
Post your Comment
広告
ブログ内検索
アーカイブ
カウンター