VisionChina Media, Inc. ( VISN) Q3 Earnings Conference Call October 27, 2010 8 PM ET Executives Helen Plummer – IR Officer Limin Li – Chairman and CEO Stanley Wang – Senior Financial Controller Analysts Philip Wan – Morgan Stanley Dick Wei – JP Morgan Thomas Chong – Bank of America/Merrill Lynch Chenyi Lu – Cowen and Company James Lee – CLSA Steve Zhang – Macquarie Ming Zhao – SIG Sam Lon [ph] – Oppenheimer Presentation Operator
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As a reminder, this conference is being recorded. In addition, a webcast of this conference call will be available on VisionChina Media’s Investor Relations website at www.visionchina.cn.I will now turn the call over to our CEO Mr. Li. Limin Li [Interpreted] Hello everyone and thank you for joining us today. In the third quarter, we achieved total revenue of $37.9 million, a year-over-year increase of 23% and quarter-over-quarter increase of 19%. Our non-GAAP net income reached $1.1 million, beating our company guidance by 35.5%. The diligent efforts of our sales force has allowed the company to return to a more stable growth trajectory that began at the start of the second quarter. VisionChina is strong and committed to the market and we have set goals for profitability in the fourth quarter. As always, VisionChina Media participates in and promotes large social events in China. During the Shanghai World Expo, which drew a cumulative audience of 71 million, VisionChina Media’s exclusive subway mobile TV network provided real-time information to our subway passenger population as large as 7.5 million commuters on a single day. These mass audiences allowed our networks to be the product-promotional platform for many advertisers wishing to reach Expo visitors. Our Expo success raised advertiser’s awareness of the highly effective dissemination capability of our platform. Moreover revenue contribution from our subway network once again approached 50% of total revenues in the third quarter, becoming an even more stable revenue source for VisionChina Media. Another important upcoming event is the Guangzhou Asian Games next month and we recently confirmed that the sporting events will be played in real-time on our platforms in Guangzhou. While we take a conservative outlook on this event, we will be the only outdoor daytime television operator with access to this content and we hope to see a driving sales of the advertising minutes associated with those 25 days of broadcast beginning November 12.
In the third quarter, VisionChina Media took an important strategic step in successfully signing a memorandum of understanding for a strategic partnership with CCTV. The partnership is expected to provide CCTV’s clients with more expensive and comprehensive services by combining the advertising platform for CCTV and VisionChina Media to create a specialized media operation model. This partnership represents the first time CCTV has brought outside media resources into its annual advertising auction. Our ability to form this partnership is a sign of VisionChina Media’s a daytime outdoor expansion of traditional TV with significant network scale and influence has gained the recognition of CCTV, the leader of China’s TV industry.In the time since signing, we have participated in several joint roadshows with CCTV across the major cities in China. Through this event, we have gained access to many new high quality potential clients, establishing a base of revenue growth beginning 2011. In the third quarter, former CFO Scott Chen departed due to personal reasons. Upon his departure, our Senior Financial Controller long-term employee Stanley Wang assumed the responsibilities to lead our well-developed financial department and daily financial operations. He also began working with our Investor Relations department to continue effective communications with our investors and analysts. In addition, we were honored to have James Mark [ph], Former KPMG Audit Senior Manager join us as a VP in September. James brings over 10 years audit experience and is familiar with U.S. listed Chinese companies. Meanwhile the company continues in our effort to find qualified internal and external candidates for the CFO position. Read the rest of this transcript for free on seekingalpha.com