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Bona Reports Second Quarter 2013 Financial Results

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, non-GAAP net income attributable to Bona Film Group Limited per ADS, which exclude share-based compensation expenses, and adjusted EBITDA, non-GAAP, which excludes share-based compensation expenses, interest, taxes, and non-cash depreciation and amortization charges. 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 and a supplemental liquidity measure which is useful for understanding and evaluating the Company's capacity for servicing its debt, and otherwise meeting its cash needs. Adjusted EBITDA, non-GAAP, excludes depreciation and amortization, so it does not reflect any cash requirements for the replacement of the assets, which will often have to be replaced in the future. The Company believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing the Company's performance and liquidity, 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.

1 "ADS" is American depositary share. Each two ADSs represent one ordinary share.

2 As 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 expenses. Adjusted EBITDA, non-GAAP, excludes share-based compensation expenses, interest, taxes and non-cash depreciation and amortization charges. See "Non- GAAP Financial Measures" and "Reconciliation of Non-GAAP Measures" at the end of this press release.

3 Segment profit is gross profit less film participation expense by segments for the periods indicated.  

Unaudited Condensed Consolidated Statement of Operations
(in U.S. dollars, except share data)
         
  Three-months ended June 30 Six-months ended June 30
  2013 2012 2013 2012
         
Net revenue 28,259,865 20,740,560 71,572,670 64,419,579
Cost of revenue 13,235,144 9,066,347 41,760,148 31,955,978
Gross profit 15,024,721 11,674,213 29,812,522 32,463,601
         
Film participation expense (487,598) 96,491 (323,089) 694,853
Sales and marketing expenses 3,206,413 2,168,475 5,814,691 10,236,429
General and administrative expenses 11,988,812 9,310,355 23,957,287 18,244,484
Total operating expenses 14,707,627 11,575,321 29,448,889 29,175,766
         
Government Subsidies 928,537 620,804 1,540,655 620,804
Operating income 1,245,631 719,696 1,904,288 3,908,639
         
Interest income (reversal) 27,656 125,140 (4,370) 199,447
Interest expense (417,174) (29,942) (820,667) (195,692)
Exchange gain (loss) 564,015 (242,101) 511,226 (511,413)
Other income 71,429 71,429 142,858 145,299
Investment Loss (income)  --  (5,584)  --  (5,584)
         
Income before income tax provision, equity in earnings of equity method investment, net of tax 1,491,557 638,638 1,733,335 3,540,696
Provision for income taxes 298,311 127,728 346,667 708,140
Equity in earnings of equity method investment, net of tax -- -- -- 5,604
 
Net income 1,193,246 510,910 1,386,668 2,838,160
         
Less: Net income attributable to the noncontrolling interests (646,816) (1,924) (1,001,040) 56,181
Net income attributable to Bona Film Group Limited 1,840,062 512,834 2,387,708 2,781,979
         
Net income attributable to Bona Film Group Limited per ADS        
Basic 0.03 0.01 0.04 0.05
Diluted 0.03 0.01 0.04 0.05
         
Weighted average shares used in calculating net income per ordinary share        
Basic 29,775,437 29,464,788 29,759,061 29,431,686
Diluted 30,207,593 30,144,055 30,245,848 30,026,996
 
Unaudited Condensed Statement of Consolidated Comprehensive Income
(in U.S. dollars)
         
  Three-months ended June 30 Six-months ended June 30
         
  2013 2012 2013 2012
Net income 1,193,246 510,910 1,386,668 2,838,160
Other comprehensive income, net of tax        
Foreign currency translation adjustments  1,126,588  (828,771) 1,443,057  (877,981)
         
Comprehensive income 2,319,834 (317,861) 2,829,725 1,960,179
Less: comprehensive income attribute to the noncontrolling interests (639,994) (14,074) (991,329) 43,363
Comprehensive income attributable to Bona Film Group Ltd.  2,959,828 (303,787) 3,821,054 1,916,816
 
Unaudited Condensed Consolidated Balance Sheets
(in U.S. dollars, except share data)
     
  June 30 2013 December 31 2012
     
Cash and cash equivalents 28,934,062 23,227,922
Restricted Cash 4,073,386 4,815,332
Accounts receivable, net of allowance for doubtful accounts 43,302,149 40,307,672
Prepaid expenses and other current assets 22,583,756 23,329,262
Amount due from related parties 334,117 343,817
Current deferred tax assets 651,231 970,683
Inventories 307,804 276,436
Total current assets 100,186,505 93,271,124
     
Distribution rights 16,051,805 11,406,692
Production costs 99,964,069 90,345,409
Prepaid film costs 6,416,167 7,426,915
Property and equipment, net 59,492,143 60,208,609
Acquired intangible assets, net 2,826,608 3,189,481
Non-current deferred tax assets 269,432 311,102
Cost method investments 1,297,761 1,296,307
Goodwill 49,851,234 49,110,021
 
Total assets 336,355,724 316,565,660
     
Accounts payable  34,521,932  35,257,660
Accrued expenses and other current liabilities 29,336,998 28,145,099
Amounts due to related parties 5,381,117 5,746,328
Income taxes payable 1,129,795 2,420,443
Bank borrowing 36,542,457 12,542,161
Other borrowing 6,259,177 8,671,050
Current film participation liabilities 8,078,263 15,086,892
     
Total current liabilities 121,249,739 107,869,633
Bank borrowing  20,000,000 18,025,553
Deferred income 814,032 813,681
Deferred tax liability 118,848 211,203
 
Total liabilities 142,182,619 126,920,070
     
Ordinary shares (par value of US$0.0005 per share, 85,000,000 shares authorized, 30,402,346 and 29,811,618 shares issued and outstanding as of June 30, 2013 and 30,402,346 and 29,737,257 shares issued and outstanding as of Dec 31, 2012.) 14,906 14,869
Additional paid-in capital 178,849,244 176,134,737
Statutory reserves 2,543,272 2,543,272
Accumulated profit 2,938,226 550,518
Accumulated other comprehensive income 7,898,436 6,465,090
 
Total Bona Film Group Limited's equity 192,244,084 185,708,486
     
Noncontrolling interests 1,929,021 3,937,104
 
Total equity 194,173,105 189,645,590
     
Total liabilities and equity 336,355,724 316,565,660
 
Unaudited Reconciliation of Non-GAAP Measures
(in U.S. dollars)
     
  Three-months ended June 30
  2013 2012
     
Net income 1,193,246 510,910
     
Share-based compensation 830,457 1,239,116
     
Non-GAAP Net income 2,023,703 1,750,026
     
Interests 389,518 (95,198)
Taxes 298,311 127,728
Depreciation & Amortization 1,418,829 1,024,096
     
EBITDA, Non-GAAP 4,130,361 2,806,652
     
  Six-months ended June 30
  2013 2012
     
Net income 1,386,668 2,838,160
     
Share-based compensation 1,867,172 2,164,291
Non-GAAP Net income 3,253,840 5,002,451
     
Interests 825,037 (3,755)
Taxes 346,667 708,140
Depreciation & Amortization 2,812,619 2,079,948
     
EBITDA, Non-GAAP 7,238,163 7,786,784
CONTACT: In China:
         Ms. Lingzi Gui
         Bona Film Group Limited
         Tel: +86-10-5631-0700*398
         Email: ir@bonafilm.cn
         
         In the U.S.:
         The Piacente Group, Inc.
         Investor Relations
         Lee Roth
         Tel: (212) 481-2050
         Email: bona@tpg-ir.com

Bona Film Group Limited Logo

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