SearchMedia Holdings Limited (“SearchMedia”) (NYSE MKT:IDI),(NYSE MKT:IDI.WS), one of China's leading nationwide multi-platform media companies, today reported unaudited financial results for the six months ended June 30, 2012
Financial Highlights for the Six Months ended June 30, 2012
- Revenue decreased 43% year-on-year from $28.3 million to $16.1 million.
- Operating profit increased from $1.8 million to $10.8 million year-on-year.
- Net profit increased from $0.7 million to $9.8 million year-on-year mainly attributable to one time gain on disposal of subsidiaries and gain from extinguishment of acquisition consideration.
- Acquisition consideration payable reduced from $23.2 million at year end 2011 to $10.1 million at June 30, 2012.
- Upon closing of the $6.1 million equity investment and conversion of the $3.1 million convertible notes including accrued interest announced separately today, shareholders’ equity will increase to $7.2 million.
Unaudited Financial Results for the Six Months ended June 30, 2012
Revenue decreased 43% to $16.1 million in the first six months of 2012 from $28.3 million for the same period last year primarily due to the divestiture of Zhejiang Continental and Shenyang Jingli, the streamlining of Ad-Icon Shanghai’s non-profitable elevator business and the termination of our VIE structure.Gross profit decreased year-on-year from $8.1 million in the same period last year to $2.6 million as a result of a decrease in revenue during the period, divestiture of Shenyang Jingli, Zhejiang Continental, and streamlining of the Ad Icon Shanghai elevator business while still incurring contracted advertising space lease costs. Gross margin decreased to 16% from 29% in the same period last year due to higher concession costs, higher network expansion cost, higher percentage of agency business in advertising revenue, and recent subsidiaries separation and elevator business streamlining. Total operating expenses for the first six months of 2012 were $4.8 million compared to $6.4 million for the prior year period as a result of business streamlining and management's continued efforts to control costs. Sales and marketing expenses decreased 49% to $1.3 million from $2.5 million in the prior year period, primarily reflecting a proportional decrease in sales commissions as a result of lower revenue. General and administrative expenses decreased 8% to $3.5 million from $3.9 million in the prior year period, reflecting a decrease in salary expense driven by business streamlining and management’s efforts in controlling costs.
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