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TheStreet Open House

Bona Film Group Reports Fourth Quarter And Full Year 2012 Financial Results

Stock quotes in this article: BONA

BEIJING, April 1, 2013 (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, 2012.

"We accomplished a great deal in 2012. We further developed two key growth areas for the Company, secured a significant strategic investment from one of the world's leading media conglomerates, News Corporation, and signed a letter of intent for film co-production with Fox International Productions, as well as a co-production term sheet with Universal Studios and Working Title Films," said Bona Founder, Chairman and CEO Mr. Yu Dong. "Despite these achievements, our financial results were impacted by a weak fourth quarter, which was largely attributable to the delayed release of The Grandmasters, lower-than-expected box office receipts for The Last Tycoon and increased start-up costs associated with new theater openings."

Fourth Quarter 2012 Financial Summary

  • Fourth quarter 2012 net revenues were US$53.2 million, compared with US$52.6 million in the fourth quarter of 2011.
  • Fourth quarter 2012 gross profit was US$10.1 million, compared with US$20.9 million in the fourth quarter of 2011.
  • Fourth quarter 2012 gross margin was 19.0 %, compared with 39.7% in the fourth quarter of 2011.
  • Fourth quarter 2012 net loss attributable to Bona Film Group Limited was US$(5.4) million, or US$(0.09) per diluted ADS 1, compared with net income attributable to Bona Film Group Limited of US$5.6 million, or US$0.09 per diluted ADS, in the fourth quarter of 2011.
  • Fourth quarter 2012 non-GAAP net loss 2 was US$(4.2) million, or US$(0.07) per diluted ADS, compared to non-GAAP net income of US$6.2 million, or US$0.10 per diluted ADS in the fourth quarter of 2011.
  • Fourth quarter 2012 EBITDA, non-GAAP 2, was US$(2.4) million, compared with US$6.4 million in the fourth quarter of 2011.
  • Cash and cash equivalents, term deposits and restricted cash totaled US$28.0 million as of December 31, 2012.
  • Cash used in operating activities totaled US$7.3 million, compared with cash generated from operating activities of US$21.1 million in the fourth quarter of 2011.

Full Year 2012 Financial Summary

  • Full year 2012 net revenues were US$142.3 million, compared with US$126.2 million for the full year 2011.
  • Full year 2012 gross profit was US$56.2 million, compared with US$59.7 million for the full year 2011.
  • Full year 2012 gross margin was 39.5%, compared with 47.3% for the full year 2011.
  • Full year 2012 net loss attributable to Bona Film Group Limited was US$(1.3) million, or US$(0.02) per diluted ADS, compared with net income attributable to Bona Film Group Limited of US$14.4 million, or US$0.24 per diluted ADS, for the full year 2011.
  • Full year 2012 non-GAAP net income was US$3.2 million, or US$0.06 per diluted ADS, compared to non-GAAP net income of US$18.2 million, or US$0.30 per diluted ADS for the full year 2011.
  • Full year 2012 EBITDA, non-GAAP, was US$9.1 million, compared with US$21.6 million in 2011.
  • Cash used in operating activities totaled US$10.0 million, compared with cash generated from operating activities US$2.2 million for the full year 2011.

Full Year 2012 Business Updates and Recent Highlights

  • Distributed a total of 15 films theatrically in 2012; including two imported titles for which the Company assisted in marketing. For the year, Bona's films accounted for approximately 7.5% of the total box office for domestic productions.
  • Secured a strategic investment from News Corporation in May 2012, through which an affiliate of News Corporation purchased a 19.9% equity stake in the Company from Bona's Founder, Chairman and Chief Executive Officer, Mr. Yu Dong.
  • Appointed Dr. Jack Q. Gao, Senior Vice President of News Corporation and Chief Executive Officer of News Corporation China Investments, to the Company's Board of Directors.
  • In October 2012, signed a letter of intent with Fox International Productions ("FIP") for the joint development, production and distribution of multiple Chinese language films.
  • In the fourth quarter of 2012, signed a term sheet for the joint production and distribution of a Chinese-language romantic drama with Universal Studios and Working Title Films.
  • Premiered the Company's first produced television series, The King's Battles, on multiple major satellite networks in China.
  • Opened five new movie theaters in the fourth quarter of 2012 and nine for the full year, increasing the Company's portfolio of owned and operated theaters to 20.
  • In November 2012, entered into a $20 million secured revolving credit line agreement with East West Bank and drew down $10 million of credit as of December 31, 2012. This additional capital will be used to fund upcoming productions and to acquire the distribution rights to international films, which the Company will assist in marketing in China.

Mr. Yu continued, "Our initiatives to grow our theater segment and advance our television production capabilities are part of our core strategy to diversify our revenue base. Film exhibition and TV provide more stable, predictable revenue streams than our film investment, production and distribution businesses. While investment, production and distribution will remain critical parts of our growth, we are committed to achieving greater balance between business segments and we made important progress in this regard throughout the year. We nearly doubled the size of our high-margin theater network in 2012 with 20 theaters in operation at year-end, putting us on track to meet our goal of 40 owned and operated theaters by the end of 2014. In late December, our first television series, The King's Battles premiered to strong ratings and positive audience reactions on several of China's largest satellite networks, giving us confidence in future TV projects, including series based on some of Bona's most popular films. I am pleased with the strategic progress we made during the past year and I am confident that these initiatives have further solidified our platform for steady, sustainable growth beginning in the first quarter, during which we expect to return to profitability and report non-GAAP net income of US$1.2 to US$1.5 million."

Fourth Quarter 2012 Financial Results

Net Revenues

  4Q12 4Q11 Y-o-Y%
Net Revenues (US$mm)  53.2 52.6 1.1%

Net revenues for the fourth quarter of 2012 increased 1.1% year-over-year to US$53.2 million. The increase in net revenues was primarily attributable to growth in the number of Bona-owned and operated movie theaters. The Company distributed three films in the fourth quarter of 2012, compared with three films in the fourth quarter of 2011.

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