BEIJING, March 1, 2012 (GLOBE NEWSWIRE) -- Bona Film Group Limited, ("Bona" or the "Company") (Nasdaq:BONA), a leading film distributor and vertically integrated film company in China, today announced its unaudited financial results for the fourth quarter and full year ended December 31, 2011.
Fourth Quarter 2011 Financial Highlights
- Fourth quarter 2011 net revenues were US$52.6 million, an increase of 195.2% year over year from US$17.8 million in the fourth quarter 2010
- Fourth quarter 2011 gross margin was 39.7%, compared to 48.4% in the fourth quarter 2010
- Fourth quarter 2011 operating income was US$3.4 million, an increase of 5.5% year over year from US$3.2 million in the fourth quarter 2010
- Fourth quarter 2011 net income was US$5.7 million, an increase of 81.7% year over year compared to US$3.1 million in the fourth quarter 2010
- Fourth quarter 2011 non-GAAP net income1 was US$6.2 million, an increase of 82.9% year over year compared to US$3.4 million in the fourth quarter 2010
Full Year 2011 Financial Highlights
- Full year 2011 net revenues increased 138.9% year over year to US$126.2 million from US$52.8 million for the full year 2010
- Full year 2011 gross margin was 47.3%, compared to 49.8% for the full year 2010
- Full year 2011 operating income increased 38.4% year over year to US$12.7 million from US$9.2 million for the full year 2010
- Full year 2011 net income was US$14.6 million, compared to net loss of US$4.2 million for the full year 2010
- Full year 2011 non-GAAP net income increased 69.4% year over year to US$18.2 million from US$10.8 million for the full year 2010
"We finished the year on a strong note as we exceeded our 2011 bottom-line guidance, reporting a 69% year-over-year increase in our non-GAAP net income," said Bona Founder, Chairman and CEO Yu Dong. "Our highly successful blockbuster Flying Swords of Dragon Gate achieved domestic box office receipts of over RMB550 million to become the fourth most successful domestic film in the history of Chinese film. For the full year 2011, we distributed or invested in 15 films in total and attained the second largest share of the distribution market, based on domestic box office receipts. Additionally, we are happy with the progress of our movie theater expansion to date, as we strive toward our goal of operating 30 to 40 new theaters in prime locations across China by 2014. By the end of 2012, our target is to have 21 to 23 operational movie theaters. Our strategic network of movie theaters complements our distribution-centric business model and helps us differentiate ourselves from the competition."
Mr. Yu continued, "China's total box office grew a remarkable 30% in 2011, with a record RMB13 billion in total receipts for the year. Movie screens also continue to grow at an unprecedented rate, rising from 6,200 at the beginning of the year to over 9,100 by December 2011. Looking forward, we will continue to leverage our vertically integrated business model to capitalize on the numerous opportunities arising from China's rapidly growing film industry."
| 1As used in this press release, non-GAAP net income and non-GAAP net income attributable to Bona Film Group Limited per ADS exclude share-based compensation, changes in fair value of derivatives and changes in fair value of warrants. See "Non-GAAP Financial Measures" and "Reconciliation of Non-GAAP Measures" at the end of this press release. |
Fourth Quarter 2011 Financial Results
Net Revenues
| 4Q11 | 4Q10 | Y-o-Y% | |
| Net Revenues (US$mm) | 52.6 | 17.8 | 195.2% |
The year-over-year increase in fourth quarter 2011 net revenues was primarily due to the box office distribution revenue from the Company's year-end blockbuster Flying Swords of Dragon Gate.
Segment Net Revenues
| Distribution |
Investment & Production |
Movie Theater |
Talent Agency |
Intersegment Elimination |
Consolidated | |||||||
| Net Revenues from External Customers (US$mm) | 45.4 | (0.8) | 7.9 | 0.1 | -- | 52.6 | ||||||
| Intersegment Revenues (US$mm) | 1.4 | 21.9 | -- | -- | (23.3) | -- | ||||||
| Total Net Revenues (US$mm) | 46.8 | 21.1 | 7.9 | 0.1 | (23.3) | 52.6 | ||||||
| Note: Numbers may not add up due to rounding | ||||||||||||
Gross Profit and Gross Margin
| 4Q11 | 4Q10 | Y-o-Y% | |
| Gross Profit (US$mm) | 20.9 | 8.6 | 142.3% |
| Gross Margin | 39.7% | 48.4% | -- |
The year-over-year increase in fourth quarter 2011 gross profit was primarily due to stronger distribution revenues in the fourth quarter 2011 compared to the fourth quarter 2010. The year-over-year decrease in gross margin was mainly the result of the increase in film investment and production revenues as a percentage of Bona's total revenues, which typically has a lower gross margin than the distribution business.
The decrease in gross margin was also the result of a delay in the launch of three Bona movie theaters, two in Beijing and one in Dongguan. The Company booked cost of revenues related to the three theaters in the fourth quarter of 2011. The delay was the result of the timing of necessary government approvals; however the Company expects the three movie theaters to commence operations in the first quarter 2012.
Segment Profit2 and Segment Margin
| Distribution | Investment & Production | Movie Theater | Talent Agency | Consolidated | |
| Segment Profit (US$mm) | 15.1 | 1.7 | 3.7 | 0.1 | 20.6 |
| As % of Total Segment Profit | 73.1% | 8.1% | 18.1% | 0.7% | 100% |
| Segment Margin | 32.2% | 8.0% | 47.2% | 90.2% | 39.2% |
| 2Segment profit is gross profit less film participation expense by segments for the periods indicated. |
Segment margin for the Investment & Production business declined to 8.0% in the fourth quarter 2011 from 17.8% in the fourth quarter 2010 primarily due to the unpredictable nature of the film production and investment business.
Operating Income and Operating Margin
| 4Q11 | 4Q10 | Y-o-Y% | |
| Operating Expenses (US$mm) | 17.5 | 5.4 | 222.4% |
| Operating Income (US$mm) | 3.4 | 3.2 | 5.5% |
| Operating Margin | 6.4% | 17.9% | -- |
Fourth quarter 2011 operating expenses increased year over year mainly due to:
- An increase in sales and marketing expense for the promotion of the Company's newly released films
- An increase in general and administrative expense resulting from the expansion of Bona's business, especially due to the expansion of the movie theater business
- An increase in professional fees associated with being a U.S.-listed company
The year-over-year decrease in operating margin was mainly the result of increased operating expenses related to the delay regarding the three Bona movie theaters discussed above.
Net Income and Net Income Attributable to Bona Film Group Limited per ADS3
| 4Q11 | 4Q10 | |
| Net Income (US$mm) | 5.7 | 3.1 |
|
Net Income Attributable to Bona Film Group Limited per ADS (US$) |
0.10 | 0.06 |
| 4Q11 | 4Q10 | |
| Non-GAAP Net Income (US$mm) | 6.2 | 3.4 |
| Non-GAAP Net Income Attributable to Bona Film Group Limited per ADS (US$) | 0.10 | 0.06 |
Excluding share-based compensation, the Company's non-GAAP net income for the fourth quarter 2011 was US$6.2 million, an increase of 82.9% year over year.
Full Year 2011 Financial Results
Net Revenues
| FY11 | FY10 | Y-o-Y% | |
| Net Revenues (US$mm) | 126.2 | 52.8 | 138.9% |
| 3"ADS" is American depositary share. Two ADSs represent one ordinary share. |
Top Five Films in Terms of Revenue Contribution
| Film Title | Release Date |
| 1. Flying Swords of Dragon Gate | December 15, 2011 |
| 2. Overheard 2 | August 18, 2011 |
| 3. The Sorcerer and the White Snake | September 28, 2011 |
| 4. What Women Want | February 3, 2011 |
| 5. Treasure Inn | June 28, 2011 |
The top five films in 2011 contributed US$68.3 million or 54.1% of full year 2011 net revenues, whereas the contribution of the top five films in 2010 was 53.5%.
Segment Net Revenues
| Distribution |
Investment & Production |
Movie Theater |
Talent Agency |
Intersegment Elimination |
Consolidated | |
| Net Revenues from External Customers (US$mm) | 92.7 | 6.2 | 26.0 | 1.3 | -- | 126.2 |
| Intersegment Revenues (US$mm) | 2.2 | 44.3 | -- | -- | (46.5) | -- |
| Total Net Revenues (US$mm) | 94.9 | 50.5 | 26.0 | 1.3 | (46.5) | 126.2 |
| Note: Numbers may not add up due to rounding |
Gross Profit and Gross Margin
| FY11 | FY10 | Y-o-Y% | |
| Gross Profit (US$mm) | 59.7 | 26.3 | 126.9% |
| Gross Margin | 47.3% | 49.8% | -- |
The slight year-over-year decrease in gross margin was primarily due to the increase in film investment and production revenues as a percentage of Bona's total revenues, which typically has a lower gross margin than the distribution business.
Segment Profit and Segment Margin
| Distribution |
Investment & Production |
Movie Theater | Talent Agency | Consolidated | |
| Segment Profit (US$mm) | 36.9 | 6.7 | 14.6 | 1.2 | 59.4 |
| As % of Total Segment Profit | 62.1% | 11.2% | 24.6% | 2.1% | 100% |
| Segment Margin | 38.9% | 13.2% | 56.1% | 91.3% | 47.1% |
Segment margin for the Investment & Production business declined to 13.2% in 2011 from 20.8% in 2010 primarily due to the unpredictable nature of the film production and investment business.
Operating Income and Operating Margin
| FY11 | FY10 | Y-o-Y% | |
| Operating Expenses (US$mm) | 47.2 | 17.2 | 174.2% |
| Operating Income (US$mm) | 12.7 | 9.2 | 38.4% |
| Operating Margin | 10.1% | 17.4% | -- |
The year-over-year increase in full year 2011 operating expenses was primarily attributable to:
- An increase in sales and marketing expense for the promotion of the Company's newly released films
- An increase in general and administrative expense resulting from the expansion of Bona's business, especially to the expansion of the movie theater business
- An increase in professional fees associated with being a U.S.-listed company
The operating margin decrease in the full year 2011 was mainly due to the expansion of the movie theater business, which has a lower operating margin compared to the Company's other business segments.
Net Income and Net Income Attributable to Bona Film Group Limited per ADS
| FY11 | FY10 | |
| Net Income (Loss) (US$mm) | 14.6 | (4.2) |
| Net Income Attributable to Bona Film Group Limited per ADS (US$) |
0.25 |
(0.24) |
| FY11 | FY10 | |
| Non-GAAP Net Income (US$mm) | 18.2 | 10.8 |
| Non-GAAP Net Income Attributable to Bona Film Group Limited per ADS (US$) | 0.31 | 0.26 |
Excluding share-based compensation and changes in the fair value of derivatives, the Company's non-GAAP net income for full year 2011 was US$18.2 million, an increase of 69.4% year over year.
Cash and Cash Flow
As of December 31, 2011, Bona had cash and cash equivalents, term deposits and restricted cash totaling US$30.2 million. Operating cash flow for the fourth quarter 2011 was a net inflow of approximately US$21.1 million and for the full year 2011 was a net inflow of approximately US$2.4 million. The net inflow for full year 2011 was mainly attributable to the collections of gross box office receipts of the films in year 2011.
Business Outlook
Based on current market and operating conditions, the Company estimates non-GAAP net income for the first quarter 2012 to be in the range of US$2.8 million to US$3.2 million, and non-GAAP net income for the full year 2012 to be approximately US$22.0 million.
Full year 2011 non-GAAP net income guidance assumes an increase in the Company's effective tax rate from 3.1% in 2011 to approximately 20.0% in 2012. In addition, the Company's full year guidance considers the high upfront costs associated with 10 to 12 green field cinemas commencing operation in 2012.
Fourth Quarter and Full Year 2011 Conference Call Details
Bona management will hold the earnings conference call at 8:00 p.m. Eastern Time on Thursday, March 1, 2012 (9:00 a.m. Beijing/Hong Kong Time on Friday, March 2, 2012). Management will discuss results and highlights of the quarter and answer questions from investors.
The dial-in numbers for the earnings conference call are as follows:
| U.S. Toll Free: +1-855-500-8701 |
| Hong Kong Toll Free: 800-903-737 |
| China, Domestic: 400-120-0654 |
| International: +65-6723-9385 |
| The conference ID # is 53662366 |
A live and archived webcast of the earnings conference call will be available on Bona's IR website at http://ir.bonafilm.cn/events.cfm .
About Bona Film Group Limited
Bona Film Group Limited (Nasdaq:BONA) is a leading film distributor in China, with an integrated business model encompassing film distribution, film production, film exhibition and talent representation. Bona distributes films to Greater China, Korea, Southeast Asia, the United States and Europe, invests and produces movies in a variety of genres, owns and operates eleven movie theaters and manages a range of talented and popular Chinese artists.
The Bona Film Group Limited logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=8412
For more information about Bona, please visit http://www.bonafilm.cn.
Forward Looking Statements
This news release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. 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" and similar statements. All statements other than statements of historical fact in this press release are forward-looking statements and involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. These forward-looking statements are based on management's current expectations, assumptions, estimates and projections about the Company and the industry in which the Company operates, but involve a number of unknown risks and uncertainties, Further information regarding these and other risks is included in the Company's filings with the U.S. Securities and Exchange Commission, including its registration statement on Form F-1 and its annual report on Form 20-F. The Company undertakes no obligation to update forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and actual results may differ materially from the anticipated results. You are urged to consider these factors carefully in evaluating the forward-looking statements contained herein and are cautioned not to place undue reliance on such forward-looking statements, which are qualified in their entirety by these cautionary statements.
Non-GAAP Financial Measures
To supplement Bona's consolidated financial results presented in accordance with GAAP, Bona uses the following measures defined as non-GAAP financial measures by the SEC: non-GAAP net income and non-GAAP net income attributable to Bona Film Group Limited per ADS, which exclude share-based compensation expenses, and changes in fair value of derivatives. The presentation of these non-GAAP financial measures is not intended to be considered in isolation, as a substitute for, or to be superior to the financial information prepared and presented in accordance with GAAP. In addition, Bona's definition of non-GAAP net income may be different from the definitions used by other companies, and therefore comparability may be limited.
Bona believes that these non-GAAP financial measures provide meaningful supplemental information regarding its performance by excluding certain expenses and expenditures that may not be indicative of its operating performance. The Company believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing the Company's performance and when planning and forecasting future periods. The table appears at the end of this press release has more details on the reconciliations between GAAP financial measures that are comparable to non-GAAP financial measures.
|
Unaudited Condensed Consolidated Statement of Operations (in U.S. dollars, except share data) |
|||||
| Three-months ended Dec 31 | |||||
| 2011 | 2010 | 2011 | 2010 | ||
| Net revenue | 126,161,270 | 52,819,786 | 52,649,520 | 17,834,818 | |
| Cost of revenue | 66,458,217 | 26,501,853 | 31,734,002 | 9,201,171 | |
| Gross profit | 59,703,053 | 26,317,933 | 20,915,518 | 8,633,647 | |
| Film participation expense | 321,100 | 696,101 | 265,977 | (43,121) | |
| Sales and marketing | 18,506,262 | 7,213,519 | 8,469,567 | 2,295,135 | |
| General and administrative | 28,371,497 | 9,305,393 | 8,812,806 | 3,191,041 | |
| Total operating expenses | 47,198,859 | 17,215,013 | 17,548,350 | 5,443,055 | |
| Government Subsidy | 220,559 | 88,147 | -- | -- | |
| Operating income | 12,724,753 | 9,191,067 | 3,367,168 | 3,190,592 | |
| Interest income from bank deposits | 248,266 | 16,125 | 69,889 | 5,903 | |
| Interest expense | (589,833) | (409,599) | (295,436) | (87,699) | |
| Exchange gain | 1,748,044 | 16,464 | 1,149,898 | -- | |
|
Interest income from loan to producer of TV series |
141,545 | 856,788 | 141,545 | -- | |
| Gain on extinguishment of liability | -- | 488,799 | -- | -- | |
| Other income | 770,081 | 225,095 | 351,279 | 33,482 | |
| Changes in fair value of derivatives | -- | (14,528,000) | -- | -- | |
|
Income (loss) before income tax provision, and equity in earnings(loss) of affiliated companies, net of income taxes |
15,042,856 | (4,143,261) | 4,784,343 | 3,142,278 | |
| Provision(benefit) for income taxes | 473,542 | 91,053 | (939,055) | (984) | |
| Equity in earnings(loss) of affiliated companies, net of income taxes | 3,062 | 11,254 | (7,478) | 1,991 | |
| Net income (loss) | 14,572,376 | (4,223,060) | 5,715,920 | 3,145,253 | |
|
Less: Net income (loss) attributable to the noncontrolling interests |
140,295 | (131,686) | 79,843 | (24,031) | |
|
Net income (loss) attributable to Bona Film Group Limited |
14,432,081 | (4,091,374) | 5,636,077 | 3,169,284 | |
| Net income (loss) attributable to Bona Film Group Limited per ADS | |||||
| Basic | 0.25 | (0.24) | 0.10 | 0.06 | |
| Diluted | 0.24 | (0.24) | 0.09 | 0.06 | |
| Weighted average shares used in calculating net income per ordinary share | |||||
| Basic | 29,353,936 | 12,758,575 | 29,363,899 | 17,105,650 | |
| Diluted | 29,844,462 | 12,758,575 | 29,723,759 | 17,363,898 | |
|
Unaudited Condensed Consolidated Balance Sheets (in U.S. Dollars, except share data) |
||||
|
December 31, 2010 |
December 31, 2011 |
|||
| Cash and cash equivalents | 84,247,984 | 20,107,349 | ||
| Term deposits | -- | 6,038,107 | ||
| Restricted cash | -- | 4,066,162 | ||
| Accounts receivable, net of allowance for doubtful accounts | 15,225,792 | 41,642,787 | ||
| Prepaid expenses and other current assets | 15,659,415 | 27,335,348 | ||
| Amount due from related parties | 2,815,147 | 1,183,083 | ||
| Current deferred tax assets | 7,885 | 15,697 | ||
| Inventory | 96,639 | 228,412 | ||
| Total current assets | 118,052,862 | 100,616,945 | ||
| Distribution rights | 2,265,601 | 3,663,966 | ||
| Production costs | 64,815,878 | 69,844,822 | ||
| Prepaid film costs | 484,848 | 6,340,770 | ||
| Property and equipment, net | 14,498,304 | 40,208,447 | ||
| Acquired intangible assets | 2,293,744 | 3,993,152 | ||
| Non-current deferred tax assets | 6,732 | 320,670 | ||
| Cost method investment | 30,303 | 95,330 | ||
| Investment in equity affiliates | 231,854 | 55,340 | ||
| Goodwill | 28,536,410 | 48,612,487 | ||
| Total assets | 231,216,536 | 273,751,929 | ||
| Accounts payable | 9,533,672 | 27,807,118 | ||
| Accrued expenses and other current liabilities | 19,577,066 | 27,239,987 | ||
| Amounts due to related parties | 1,587,121 | 3,027,872 | ||
| Income taxes payable | 377,019 | 795,229 | ||
| Bank borrowing | 22,012,560 | 12,561,806 | ||
| Other borrowing | 1,445,150 | 1,831,658 | ||
| Current film participation liabilities | 10,209,351 | 16,224,219 | ||
| Total current liabilities | 64,741,939 | 89,487,889 | ||
| Deferred income | -- | 1,056,676 | ||
| Non-current film participation liabilities | 6,306,818 | -- | ||
| Deferred tax liability | 95,613 | 413,219 | ||
| Total liabilities | 71,144,370 | 90,957,784 | ||
| Ordinary shares (par value of US$0.0005 per share, 85,000,000 shares authorized, 29,349,481 and 30,402,346 shares issued and outstanding as at Dec 31, 2010 and December 31, 2011) | 14,675 | 14,695 | ||
| Additional paid-in capital | 165,975,336 | 169,519,847 | ||
| Statutory reserves | 1,975,715 | 2,044,870 | ||
| Accumulated deficit | (12,030,124) | 2,332,802 | ||
| Accumulated other comprehensive income | 2,034,154 | 5,436,305 | ||
| Total Bona Film Group Limited's equity | 157,969,756 | 179,348,519 | ||
| Noncontrolling interests | 2,102,410 | 3,445,626 | ||
| Total equity | 160,072,166 | 182,794,145 | ||
| Total liabilities and equity | 231,216,536 | 273,751,929 | ||
| Reconciliation of Non-GAAP Measures | ||||
| Three-months ended Dec 31 | ||||
| 2011 | 2010 | 2011 | 2010 | |
| Net income (loss) | 14,572,376 | (4,223,060) | 5,715,920 | 3,145,253 |
| Share-based compensation | 3,647,144 | 447,345 | 441,389 | 220,657 |
| Changes in fair value of derivatives | -- | 14,528,000 | -- | -- |
| Non-GAAP Net income (loss) | 18,219,520 | 10,752,285 | 6,157,309 | 3,365,910 |