China Digital TV Announces Unaudited Financial Results for the First Six Months of 2018
BEIJING, Aug. 9, 2018 /PRNewswire/ -- China Digital TV Holding Co., Ltd. (OTC: STVVY) ("China Digital TV" or the "Company"), a leading provider of cloud platforms, with gaming and other applications embedded, to PRC digital television and telecommunication network operators, today announced its unaudited financial results for the first six months of ended June 30, 2018.
Mr. Jianhua Zhu, China Digital TV's chief executive officer commented, "We experienced solid progress in the first half of 2018 as both our registered and covered user counts maintained growth, primarily driven by our expansion of our geographic footprint to Hebei Telecom and Ningxia Telecom. In 2018, we focus on Cloud Virtual Reality ("VR") technology and in first half of 2018, we cooperated with Fujian Mobile in Fujian province to provide a full range of VR solutions in VR lives, games, education etc. We remain committed to driving further growth of our business and creating value for our shareholders going forward."
First Half 2018 Results(([1]))
China Digital TV's net revenues decreased by 22.9% to US$1.5 million for the six months ended June 30, 2018 from US$1.9 million for the same period of the prior year. The decrease in net revenues was primarily attributable to the decreased product revenues during the first half of 2018.
Cost of revenues decreased by 56.9% to US$0.4 million for the six months ended June 30, 2018 from US$0.9 million for the same period of the prior year. The decrease in cost of revenues was primarily due to the decreased product revenues in the first half of 2018.
During the six months ended June 30, 2018, gross profit increased by 4.4% to US$1.1 million from US$1.07 million for the same period of the prior year. Gross margin, which is equal to gross profit divided by net revenues, was 75.1% in the first half of 2018, compared to 55.5% for the same period of the prior year. The increase in gross margin was mainly due to a decreased proportion of revenue from products during the first half of 2018, which have a relative lower gross margin than services.
Operating expenses in the first half of 2018 decreased by 25.2% to US$3.4 million from US$4.6 million for the same period of the prior year.
-- Research and development expenses in the first half of 2018 decreased by
23.1% to US$1.5 million from US$1.9 million for the same period of the
prior year. The decline was mainly due to decreases in personnel related
expenses and share-based compensation.
-- Selling and marketing expenses in the first half of 2018 remained
relatively stable at US$1 million as compared to the prior year period.
-- General and administrative expenses in the first half of 2018 decreased
by 43.8% to US$0.9 million from US$1.6 million for the same period of
the prior year. The decline was mainly due to a decrease in professional
fees.
Loss from continuing operations in the first half of 2018 decreased by 14.1% to US$2.3 million from US$2.7 million for the same period of the prior year.
Income tax expenses in the first half of 2018 was US$0.14 million, as compared with an income tax expenses of US$0.2 million for the same period of the prior year.
Net loss attributable to China Digital TV Holding Co., Ltd in the first half of 2018 decreased to US$1.64 million from US$0.7 million for the same period of the prior year. The decrease was primarily due to a combination of decreased interest income and other income.
Non-GAAP net loss(([2])) attributable to China Digital TV Holding Co., Ltd in the first half of 2018 was US$1.57 million, as compared to Non-GAAP net loss of US$0.1 million for the same period of the prior year(([3])).
Balance Sheet
As of June 30, 2018, China Digital TV had cash and cash equivalents of US$24.6 million.
About China Digital TV
Founded in 2004, China Digital TV is a leading provider of cloud platforms, with gaming and other applications embedded, to PRC digital television and telecommunication network operators, enabling them to bring these applications to household television sets and other mobile devices.
For more information please visit the Investor Relations section of China Digital TV's website at http://ir.chinadtv.cn.
Safe Harbor Statement
This announcement contains 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 made under the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "may," "should" and similar expressions. Such forward-looking statements include, without limitation, statements regarding the outlook and comments by management in this announcement about trends in the cloud computing, cable television and related industries in the PRC and China Digital TV's strategic and operational plans and future market positions. China Digital TV may also make forward-looking statements in its periodic reports filed with the Securities and Exchange Commission, in its annual report to shareholders, 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 China Digital TV's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from projections contained or implied in any forward-looking statement, including but not limited to the following: competition in the cloud computing, cable television and related industries in the PRC and the impact of such competition on prices, our ability to implement our business strategies, changes in technology, the progress of the television digitalization in the PRC, the structure of the cable television industry or television viewer preferences, changes in PRC laws, regulations or policies with respect to the cloud computing, cable television and related industries, including the extent of non-PRC companies' participation in such industries, and changes in political, economic, legal and social conditions in the PRC, including the government's policies with respect to economic growth, foreign exchange and foreign investment.
Further information regarding these and other risks and uncertainties is included in our annual report on Form 20-F and other documents filed with the Securities and Exchange Commission. China Digital TV does not assume any obligation to update any forward-looking statements, which apply only as of the date of this press release.
For investor and media inquiries, please contact:
China Digital TV Holding Co., Ltd.
Investor Relations
Tel: +86-10-6297-1199 x 9780
Email: ir@chinadtv.cn
[1] Unless otherwise stated, all
financial statement measures stated in
this press release are based on
generally accepted accounting
principles in the United States ("U.S.
GAAP").
[2] Non-GAAP net loss is defined as
net loss excluding share-based
compensation expenses, and
amortization of acquired intangible
assets from business acquisitions.
[3] For more information on these non-
GAAP financial measures, please see
the tables captioned "Reconciliations
of non-GAAP measures" set forth at
the end of this release.
China Digital TV Holding Co., Ltd.
Unaudited Condensed Consolidated Balance Sheets
(in thousands of U.S. dollars)
ASSETS June 30, December 31,
2018 2017
---- ----
Current assets:
Cash and cash equivalents $24,605 $24,425
Term deposits - 2,376
Short-term investments 4,047 3,783
Accounts receivable, net 1,443 1,931
Inventories 69 145
Prepaid expenses and other current assets 1,219 1,124
----- -----
Total current assets 31,383 33,784
Property and equipment, net 89 -
Deferred income tax assets 139 -
--- ---
Total assets 31,611 33,784
====== ======
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable 418 350
Accrued expenses and other current liabilities 1,846 2,347
Advance from customer, deferred revenue and deferred income- 1,999 1,526
current
Government subsidies - current 32 70
--- ---
Total current liabilities 4,295 4,293
Deferred revenue - non-current 267 248
Government subsidies - non-current 257 261
--- ---
Total liabilities 4,819 4,802
----- -----
Ordinary shares 32 32
Additional paid-in capital 29,875 29,805
Statutory reserve 96 96
Accumulated deficit (4,822) (3,226)
Subscription receivable (990) (1,001)
Accumulated other comprehensive income 319 430
--- ---
Total China Digital TV Holding Co., Ltd. shareholders' equity 24,510 26,136
Noncontrolling interest 2,282 2,846
----- -----
Total equity 26,792 28,982
------ ------
TOTAL LIABILITIES AND EQUITY $31,611 $33,784
======= =======
China Digital TV Holding Co., Ltd.
Unaudited Condensed Consolidated Statements of Comprehensive Income
(in thousands of U.S. dollars, except share and per share data)
For the six months ended
------------------------
June 30, June 30,
2018 2017
---- ----
Total revenues $1,498 $1,945
Taxes and surcharges (11) (16)
--- ---
Net revenues 1,487 1,929
Total cost of revenues (370) (859)
---- ----
Gross profit 1,117 1,070
----- -----
Operating expenses:
Research and development expenses (1,495) (1,945)
Selling and marketing expenses (1,047) (1,060)
General and administrative expenses (891) (1,584)
Gain from disposal of assets - 822
--- ---
Total operating expenses (3,433) (3,767)
Operating loss from continuing operations (2,316) (2,697)
Interest income 15 1,118
Other income, net 188 720
--- ---
Loss from continuing operations before income (2,113) (859)
tax expenses
Income tax expenses (141) (196)
Net loss from continuing operations (2,254) (1,055)
Discontinued operations
Loss from the operations of discontinued - (389)
operations, net of income taxes
Net loss (2,254) (1,444)
Less: Net loss attributable to noncontrolling interest (619) (724)
---- ----
Net loss attributable to ordinary shareholders of $(1,635) $(720)
China Digital TV Holding Co., Ltd.
Amounts attributable to ordinary shareholders of
China Digital TV Holding Co., Ltd:
Net loss from continuing operations (1,635) (331)
Net loss from discontinued operations, net of - (389)
income taxes
Net loss attributable to ordinary shareholders of $(1,635) $(720)
China Digital TV Holding Co., Ltd.
Net loss $(2,254) $(1,444)
Other comprehensive (loss)/ income, net of income
taxes
Foreign currency translation adjustment (156) 327
Unrealized holding gains on available-for-sale 120 -
securities, net of nil income taxes
Reclassification adjustment for gains on available- (101) -
for-sale securities realized in net income, net of nil
taxes
Total other comprehensive (loss)/ income, net of (137) 327
income taxes
Comprehensive loss (2,391) (1,117)
------ ------
Less: Comprehensive loss attributable to (645) (696)
noncontrolling interest
Comprehensive loss attributable to ordinary $(1,746) $(421)
shareholders of China Digital TV Holding Co., Ltd.
Loss per share:
Basic loss per share attributable to ordinary
shareholders of China Digital TV Holding Co., Ltd.:
Net loss from continuing operations (0.026) (0.005)
Net loss from discontinued operations - (0.006)
--- ------
Net loss $(0.026) $(0.011)
======= =======
Diluted loss per share attributable to ordinary
shareholders of China Digital TV Holding Co.,
Ltd.:
Net loss from continuing operations (0.026) (0.005)
Net loss from discontinued operations - (0.006)
Net loss $(0.026) $(0.011)
======= =======
Weighted average shares used in calculating loss
per ordinary share:
Basic 63,508,656 61,216,730
Diluted 63,508,656 61,216,730
Reconciliation of Non-GAAP Measures
Non-GAAP net income attributable to China Digital TV Holding Co., Ltd. shareholders excludes share-based compensation expenses, and amortization of intangible assets acquired from business acquisitions. The Company believes that the Non-GAAP net income provides meaningful supplemental information regarding the Company's performance by excluding certain non-cash expenses that may not be indicative of its operating performance from a cash flow perspective. The Company believes that both management and investors benefit from referring to this additional information in assessing the Company's performance and when planning and forecasting future periods.
However, the use of non-GAAP financial measures has material limitations as an analytical tool. One of the limitations of using non-GAAP financial measures is that they do not include all items that impact the Company's net (loss)/income for the period. In addition, because non-GAAP financial measures are not measured in the same manner by all companies, they may not be comparable to other similar titled measures used by other companies. In light of the foregoing limitations, you should not consider non-GAAP financial measure in isolation from or as an alternative to the financial measure prepared in accordance with U.S. GAAP.
For the six months ended
------------------------
June 30, June 30,
2018 2017
---- ----
(in thousands of U.S.
dollars)
Net loss attributable to China Digital TV Holding $(1,635) $(720)
Co., Ltd. shareholders - GAAP
Share-based compensation expenses 70 593
Amortization of intangible assets from business - 20
acquisitions
Net loss attributable to China Digital TV Holding $(1,565) $(107)
Co., Ltd. shareholders - Non-GAAP
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SOURCE China Digital TV Holding Co., Ltd.
