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Focus Media Reports Fourth Quarter and Full Year 2010 Results

SHANGHAI, March 8, 2011 /PRNewswire via COMTEX/ --

Focus Media Holding Limited (Nasdaq: FMCN), China's largest out-of-home lifestyle community digital media group, today announced its unaudited financial results for the fourth quarter and full year ended December 31, 2010.

Highlights for FourthQuarter 2010:

  • Total net revenue for the fourth quarter of 2010 was $159.7 million, of which
    • Aggregate net revenue from the LCD display network (including the movie theater network), in-store network and poster frame network was $146.7 million, which exceeded by approximately 12% the mid-point of the Company's guidance range of $130-132 million. This represented an increase of 14% from $128.4 million for the third quarter of 2010 and an increase of 45% from $100.9 million for the fourth quarter of 2009; and
    • Net revenue from the traditional outdoor billboard network for the fourth quarter of 2010 was $13.0 million, which exceeded by approximately 24% the mid-point of the guidance range of $10-11 million. This represented an increase of 46% from $8.9 million for the third quarter of 2010 and an increase of 30% from $10.0 million for the fourth quarter of 2009.
  • GAAP net income attributable to Focus Media was $47.2 million, compared to $112.7 million for the third quarter of 2010 (which included one-off income of $79.0 million resulting from the sale of our Internet business) and GAAP net loss of $57.0 million for the fourth quarter of 2009.
  • Non-GAAP net income attributable to Focus Media for the fourth quarter of 2010 was $58.5 million, also exceeding the mid-point of the Company's guidance range of $52-$53 million by 11%, representing an increase of 13% from non-GAAP net income attributable to Focus Media of $51.8 million for the third quarter of 2010 and an increase of 72% from $34.1 million for the fourth quarter of 2009. Please see the below sections on "Use of Non-GAAP Financial Measures" and "Reconciliation of GAAP to non-GAAP" for more information about the non-GAAP measures referred to within this announcement.
  • GAAP net income attributable to Focus Media per fully diluted ADS was $0.33, compared to $0.76 per fully diluted ADS for the third quarter of 2010 and a loss of $0.42 per ADS in the fourth quarter of 2009.
  • Non-GAAP net income attributable to Focus Media per fully diluted ADS was $0.41, representing an increase of 17% from $0.35 per fully diluted ADS for the third quarter of 2010 and an increase of 71% from $0.24 per fully diluted ADS for the fourth quarter of 2009.

Highlights for Full Year 2010:

  • Total net revenue for full year 2010 was $516.3 million, of which
    • Aggregate net revenue from the LCD display network (including the movie theater network), in-store network and poster frame network was $475.4 million, representing an increase of 37% from $347.5 million for full year 2009 ; and
    • Net revenue from the traditional outdoor billboard network for full year 2010 was $40.9 million.
  • GAAP net income attributable to Focus Media was $184.3 million, compared to GAAP net loss of $213.3 million for full year 2009.
  • Non-GAAP net income attributable to Focus Media for full year 2010 was $177.8 million, doubling from $88.7 million for full year 2009. Please see the below sections on "Use of Non-GAAP Financial Measures" and "Reconciliation of GAAP to non-GAAP" for more information about the non-GAAP measures referred to within this announcement.
  • GAAP net income attributable to Focus Media per fully diluted ADS for full year 2010 was $1.26, compared to a net loss of $1.64 per ADS for full year 2009.
  • Non-GAAP net income attributable to Focus Media per fully diluted ADS for full year 2010 was $1.21, an 81% increase from $0.67 per fully diluted ADS for full year 2009.

Highlights for Balance Sheetand Cash Flow Results of FourthQuarter and Full Year 2010:

  • Cash, cash equivalents and investments in held-to-maturity debt securities was $592.0 million as of December 31, 2010, increased by 19% from $499.4 million as of September 30, 2010.
  • Net accounts receivable for the LCD display network (including the movie theater network), in-store network and poster frame network was $144.6 million as of December 31, 2010, a decrease of 6% from $153.6 million as of September 30, 2010. Days sales outstanding on a rolling basis was 85 days in the fourth quarter of 2010 versus 92 days for the third quarter of 2010.
  • Net cash inflow from operating activities in the fourth quarter of 2010 and full year of 2010 were $108.0 million and $185.2 million, respectively, representing a 49% increase from $72.3 million for the fourth quarter of 2009, and a 15% increase from $160.7 million for full year 2009.
  • Net cash inflow from operating activities for the fourth quarter of 2010, after deducting the purchase of equipment and subsidiaries was $87.0 million, representing an increase of 67% from $52.0 million for the fourth quarter of 2009. Net cash inflow from operating activities for full year 2010, after deducting the purchase of equipment and subsidiaries was $126.3 million, representing an increase of 119% from $57.7 million for full year 2009.
  • Capital expenditures were $7.1 million and $18.7 million respectively for the fourth quarter and full year of 2010, mostly attributable to high-definition upgrade in tier-1 cities and expansion in lower tier cities.
  • Purchase of subsidiaries paid in the fourth quarter and full year of 2010 were $13.9 million and $40.2 million, respectively, primarily attributable to the poster frame network. Of the total $40.2 million payments for purchase of subsidiaries related to historical acquisitions for full year of 2010, the cumulative earn-out payments was $36.9 million.

Jason Jiang, Chairman and Chief Executive Officer of Focus Media said, "2010 was a year of strong and robust growth through refocusing on our core businesses. We continue to see exciting opportunities ahead of us in 2011. The operating momentum continued to be strong as we step into 2011. Our core business's value proposition to advertisers is gaining momentum as the strength and effectiveness of our core business is becoming increasingly recognized by advertisers. Meanwhile, we believe the aggressivead price hikes of traditional TV broadcasters have presented exciting growth opportunities to us.We have seen meaningful increases in spending on our network by existing customers as well as strong momentum in newcustomers additions. Our focus in2011 will continue to beaugmenting our core business and improving our value propositions to advertisers by: 1) Enabling interactivity of our core media resources; 2) Restructuring of our1stand 2ndtiercitiesnetworks A and B to create more network capacity resources;3)Expanding our 3rd and 4th tier cities network so as to increaseour utilization rates in those cities."

Kit Low, the Company Chief Financial Officer added, "We ended 2010 on a very strong note. Not only did we register strong revenue momentum in the fourth quarter of 2010, we also achieved very strong cashflow momentum. In the fourth quarter of 2010, the Company achieved aggregate net revenue year-on-year growth in our LCD display (including the movie theater network), in-store and poster frame business of 45%, and quarter-on-quarter growth of 14%. GAAP net income attributable to Focus Media and Non-GAAP net income attributable to Focus Media for the fourth quarter of 2010 was $47.2 million and $58.5 million, respectively. In the fourth quarter of 2010, the Company generated a net cash inflow from operating activities after deducting the purchase of equipment and subsidiaries (including earn-out payments) of $87.0 million. As a result, for the year 2010 the Company achieved: 1) Cumulative net cash inflow from operating activities, after deducting the purchase of equipment and subsidiaries, of $126.3 million versus $57.7 million in 2009; 2) A Non-GAAP Return on Tangible Equity of 24% versus 13% in 2009 (note); and 3) An increase of about 500 new customer accounts, bringing our total number of customer accounts to about 4,350. We will continue our operating and financial discipline in growing cash flow and improving our Return on Tangible Equity in 2011."

Note: Non-GAAP Return on Tangible Equity represents Non-GAAP net income attributable to Focus Media divided by total shareholders' equity minus goodwill and net acquired intangible assets.

FourthQuarter 2010Financial Results

Advertising net revenue from the LCD display network (including the movie theatre network) was $97.3 million for the fourth quarter of 2010, representing an increase of 12% from $86.8 million for the third quarter of 2010 and an increase of 46% from $66.7 million for the fourth quarter of 2009.

Advertising net revenue from the poster frame network was $39.6 million for the fourth quarter of 2010, representing an increase of 23% from $32.2 million for the third quarter of 2010 and an increase of 48% from $26.8 million for the fourth quarter of 2009.

Advertising net revenue from the in-store network was $9.8 million for the fourth quarter of 2010, representing an increase of 4% from $9.4 million for the third quarter of 2010 and an increase of 32% from $7.4 million for the fourth quarter of 2009.

As of December 31, 2010, the total installed base of LCD displays in our LCD display network was 164,575 nationwide, including 157,916 displays through our directly owned networks, and 6,659 displays through our regional distributors, as compared to total LCD displays of 149,913 as of September 30, 2010. The total number of non-digital frames available for sale in our poster frame network was 300,012 as of December 31, 2010, as compared to 276,504 as of September 30, 2010. In addition, as of December 31, 2010, we had 35,810 digital frames installed in our poster frame network, as compared to 35,983 as of September 30, 2010 due to optimization of our network. The total number of displays installed in our in-store network was 48,179 as of December 31, 2010, as compared to 45,613 as of September 30, 2010.

Advertising net revenue from the traditional outdoor billboard network was $13.0 million for the fourth quarter of 2010, representing an increase of 46% from $8.9 million for the third quarter of 2010 and an increase of 30% from $10.0 million for the fourth quarter of 2009.

Non-GAAP gross profit from the LCD display network (including the movie theatre network) for the fourth quarter of 2010 was $74.4 million, representing an increase of 13% from $65.6 million for the third quarter of 2010 and an increase of 46% from $51.1 million for the fourth quarter of 2009.

Non-GAAP gross profit from the poster frame network for the fourth quarter of 2010 was $16.5 million, representing an increase of 35% from $12.2 million for the third quarter of 2010, and an increase of 53% from $10.8 million for the fourth quarter of 2009.

Non-GAAP gross profit from the in-store network for the fourth quarter of 2010 was $3.7 million, representing an increase of 9% from $3.4 million for the third quarter of 2010 and a decrease of 26% from $5.0 million for the fourth quarter of 2009 due to the Company's settling of a rental dispute and releasing the corresponding rental liabilities accrued in the previous periods amounting to $3.1 million in the fourth quarter of 2009.

Non-GAAP gross profit from the traditional outdoor billboard network for the fourth quarter of 2010 was $3.5 million, representing a 52% increase from $2.3 million for the third quarter of 2010 and a 75% increase from $2.0 million for the fourth quarter of 2009, respectively.

Non-GAAP operating expense for the fourth quarter of 2010 was $32.7 million, an increase of 2% from $32.2 million for the third quarter of 2010 and an increase of 7% from $30.6 million for the fourth quarter of 2009.

Net cash provided by operating activities for the fourth quarter of 2010 was $108.0 million, more than tripled from $34.2 million for the third quarter of 2010.

Net cash used in investingactivities for the fourth quarter of 2010 was $42.3 million. In the fourth quarter of 2010, the Company incurred capital expenditures of $7.1 million, subsidiary acquisition payments of $13.9 million and invested $21.5 million in held-to-maturity debt securities.

Business Outlook for First Quarter 2011

The Company provides the following guidance with respect to the first quarter ending March 31, 2011:

Net revenues for the core business (inclusive of the LCD display network and other, the in-store network and the poster frame network) are expected to be in the range of $122-$124 million, the mid-point of which would represent year-on-year growth of 40% and quarter on quarter decline of 16% (due to seasonality). Net revenues for the non-core business (the traditional outdoor billboard network) are expected to be in the range of $10 - $11 million. The Company's non-GAAP net income is expected to be in the range of $36-$38 million. The Company estimates the weighted average fully diluted ADS count for the quarter at 143 million, assuming no further share repurchases during the quarter.

Based on the existing business outlook, the Company expects earn-out payments remaining in 2011, spilled over from the fourth quarter of 2010, to be no more than $1.6 million.

Announced Share Repurchase Program

On August 3, 2010, Focus Media announced its intention to increase the size of its previously announced share repurchase program from $200 million to $300 million and to extend the termination date of the repurchase plan to June 2011 from February 2011. As of March 8, 2011, the Company has cumulatively spent $240 million in share repurchases.

Disposal of 49% Interest in Traditional Outdoor Billboard Division

The Company has entered into a definitive equity transfer agreement (the "Agreement") with GBL III Limited, an entity controlled by Goldman Sachs and entities (the "Management Entities") controlled by certain employees, directors and management members of Focus Media and Shanghai Hua Guang Chuanzhi OOH Ltd. ("OOH"), the outdoor media subsidiary of Focus Media. Under the terms of the Agreement, Goldman Sachs will acquire a 30% equity interest in OOH from Focus Media for US$21 million, and the Management Entities will purchase an aggregate 19% equity interest in OOH from Focus Media for US$13.3 million. GBL III Limited will extend a loan to the Management Entities under certain loan documents to be entered into between GBL III Limited and the Management Entities. The board of directors of the Company has approved these transactions. Upon completion of these transactions, Focus Media will hold a 51% indirect equity interest in OOH. This is part of our continued effort to divest non-core business. We believe partial stake disposal affords Focus Media to recoup a majority of the investments in OOH while retaining upside potential in the business.

Focus Media, GBL III Limited and the Management Entities will also enter into an equity holders' agreement, pursuant to which GBL III Limited will be entitled to nominate one designee to OOH'sboard of directors following completion of the transaction. The closing of the transaction is subject to customary closing conditions, including receiving certain PRC government approvals.

Foreign Currency Translation

Assets and liabilities are translated at the exchange rate as of December 31, 2010, which was $1 to RMB 6.6227. Equity accounts are translated at historical exchange rates and revenues, expenses, gains and losses are translated using the average rate for the fourth of 2010, which was $1 to RMB 6.6474. Translation adjustments are reported as cumulative translation adjustments and are shown as a separate component of other comprehensive income in the statement of equity and comprehensive income (loss).

USE OF NON-GAAP FINANCIAL MEASURES

In addition to Focus Media's consolidated financial results under GAAP, the Company also provides non-GAAP financial measures, including non-GAAP gross profit (cumulatively and by segment), non-GAAP operating expenses, non-GAAP operating profit (loss), non-GAAP net income and non-GAAP fully-diluted Earnings per ADR, all excluding share-based compensation expenses, amortization of acquired intangible assets, loss from disposal of previously acquired subsidiaries and equity affiliates, impairment charges of long-lived assets and goodwill, write-off of receivables from ex-shareholders of disposed business, settlement of disputed liabilities in previously disposed wireless business, impairment and termination charges related to ceasing expansion of digital poster frame networks and boat-based advertising platform, charges from expensing IPO expenditures as a result of termination of the IPO process of Allyes and the profit from the disposal of the internet business. Management uses these non-GAAP financial measures to better assess operating performance of the Company. The Company believes that these non-GAAP financial measures provide investors with another method for assessing Focus Media's operating results in a manner that is focused on the performance of its ongoing operations. Readers are cautioned not to view non-GAAP results on a stand-alone basis or as a substitute for results under GAAP, or as being comparable to results reported or forecasted by other companies, and should refer to the reconciliation of GAAP results with non-GAAP results in the attached financial information. The Company believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing the performance of Focus Media and when planning and forecasting future periods. The Company computes its non-GAAP financial measures using a consistent method from quarter to quarter, mostly including Share-based compensation, amortization of acquired intangible assets, profit or loss from disposal of previously acquired subsidiaries and impairment charges. The accompanying tables have more details on the GAAP financial measures that are most directly comparable to non-GAAP financial measures and the related reconciliation between these financial measures.

Focus Media Holding Ltd.

Reconciliation of GAAP to non-GAAP

(U.S. Dollar in thousands, except percentages, share and per-share data)

(Unaudited)



Three months ended December 31, 2010


GAAP

(1)

(2)

Non- GAAP






Gross Profit





LCD display andother:

73,188

129

1,098

74,415

-LCD display network

73,000

129

1,082

74,211

-Movie theater network

188

-

16

204

Poster frame network

14,558

-

1,965

16,523

In-store network

3,745

-

-

3,745

Traditional outdoor billboard network

3,080

-

439

3,519

Total Gross Profit

94,571

129

3,502

98,202






Generaland administrative

16,763

(6,056)

-

10,707

Selling and marketing

29,927

(610)

(1,046)

28,271

Other operating expenses (income), net

(6,296)

-

-

(6,296)

Total operating expense

40,394

(6,666)

(1,046)

32,682






Operatingprofit from continuing operations

54,177

6,795

4,548

65,520






Profit before tax from continuing operations

55,989

6,795

4,548

67,332






Net profit from continuing operations

47,258

6,795

4,548

58,601

Net profit from discontinued operations

-

-

-

-






Net incomeattributable to Focus Media

47,154

6,795

4,548

58,497






Basic net income from continuing operations per ADS

0.35



0.43

Diluted net income from continuing operations per ADS

0.33



0.41






Basic net income from discontinued operations per ADS

-



-

Diluted net income from discontinued operations per ADS

-



-






Basic net income attributable to Focus Media per ADS

0.35



0.43

Diluted net income attributable to Focus Media per ADS

0.33



0.41






ADS used in calculating basic income per ADS

135,679,003



135,679,003

ADS used in calculating diluted income per ADS

141,661,330



141,661,330






(1). Share-based compensation.

(2). Amortization of acquired intangible assets.




Three months ended September 30, 2010


GAAP

(1)

(2)

(3)

(4)

Non- GAAP








Gross Profit







LCD display andother:

64,225

286

1,105


-

65,616

-LCD display network

63,875

286

1,090

-

-

65,251

-Movie theater network

350

-

15

-

-

365

Poster frame network

10,557

-

1,668


-

12,225

In-store network

3,411

-

-


-

3,411

Traditional outdoor billboard network

1,872

-

431


-

2,303

Total Gross Profit

80,065

286

3,204


-

83,555








Generaland administrative

24,942

(11,526)

-


-

13,416

Selling and marketing

24,474

(1,257)

(1,036)


-

22,181

Other operating expenses (income), net

(2,699)

-

-


(733)

(3,432)

Total operating expense

46,717

(12,783)

(1,036)


(733)

32,165








Operatingprofit from continuing operations

33,348

13,069

4,240


733

51,390








Profit before tax from continuing operations

36,015

13,069

4,240


733

54,057








Net profit from continuing operations

33,454

13,069

4,240

-

733

51,496

Net profit from discontinued operations

79,341

-

22

(79,000)

-

363








Net incomeattributable to Focus Media

112,737

13,069

4,262

(79,000)

733

51,801








Basic net income from continuing operations per ADS

0.24





0.36

Diluted net income from continuing operations per ADS

0.23





0.35








Basic net income from discontinued operations per ADS

0.56





0.00

Diluted net income from discontinued operations per ADS

0.54





0.00








Basic net income attributable to Focus Media per ADS

0.79





0.36

Diluted net income attributable to Focus Media per ADS

0.76





0.35








ADS used in calculating basic income per ADS


141,944,371






141,944,371

ADS used in calculating diluted income per ADS

147,490,755





147,490,755








(1). Share-based compensation.

(2). Amortization of acquired intangible assets.

(3). Profit from disposal of the internet business.

(4). Loss from disposal of previously acquired subsidiaries, all attributable to poster frame business.




Three months ended December 31, 2009


GAAP

(1)

(2)

(3)

(4)

(5)

(6)

Non- GAAP










Gross Profit









LCD display networkand other:

49,938

285

854

-

-

-

-

51,077

-LCD display network

49,498

285

839

-

-

-

-

50,622

-Movie theater network

440

-

15

-

-

-

-

455

Poster frame network

9,148

-

1,646

-

-

-

-

10,794

In-store network

5,001

-

-

-

-

-

-

5,001

Traditional outdoor billboard network

1,607

-

427

-

-

-

-

2,034

Total Gross Profit

65,694

285

2,927

-

-

-

-

68,906










Generaland administrative

32,362

(16,852)

-

-

-

-

-

15,510

Selling and marketing

19,138

(1,457)

(1,017)

-

-

-

-

16,664

Impairment loss

14,027

-

-

-

(14,027)

-

-

-

Other operating expenses (income), net

(1,410)

-

-

-

-

(2,194)

2,067

(1,537)

Total operating expense

64,117

(18,309)

(1,017)

-

(14,027)

(2,194)

2,067

30,637










Operatingprofit from continuing operations

1,577

18,594

3,944

-

14,027

2,194

(2,067)

38,269










Profit before tax from continuing operations

2,914

18,594

3,944

-

14,027

2,194

(2,067)

39,606










Net profit (loss) from continuing operations

(3,129)

18,594

3,944

-

14,027

2,194

(2,067)

33,563

Net profit (loss) from discontinued operations

(53,541)

20,446

728

31,103

-

2,158

-

894










Net incomeattributable to Focus Media

(56,994)

39,040

4,672

31,103

14,027

4,352

(2,067)

34,133










Basic net income (loss) from continuing operations per ADS

(0.02)







0.25

Diluted net income (loss) from continuing operations per ADS

(0.02)







0.24










Basic net income (loss) from discontinued operations per ADS

(0.40)







0.01

Diluted net income (loss) from discontinued operations per ADS

(0.40)







0.01










Basic net income (loss) attributable to Focus Media per ADS

(0.42)







0.25

Diluted net income (loss) attributable to Focus Media per ADS

(0.42)







0.24










ADS used in calculating basic income per ADS

134,562,342







134,562,342

ADS used in calculating diluted income per ADS

134,562,342







142,087,749


(1). Share-based compensation.

(2). Amortization of acquired intangible assets.

(3). Loss from impairment and disposal of previously acquired subsidiaries, all attributable to internet business.

(4). Impairment charges of goodwill.

(5). Write-off of receivables from ex-shareholders of disposed business.

(6).Settlement of disputed liabilities in previously disposed wireless business.


Focus Media Holding Ltd.

Reconciliation of GAAP to non-GAAP

(U.S. Dollar in thousands, except percentages, share and per-share data)

(Unaudited)


Twelve months ended December 31, 2010


GAAP

(1)

(2)

(3)

(4)

Non- GAAP








Gross Profit







LCD display networkand other:

234,375

977

4,094

-

-

239,446

-LCD display network

230,129

977

4,032

-

-

235,138

-Movie theater network

4,246

-

62

-

-

4,308

Poster frame network

37,406

-

6,905

-

-

44,311

In-store network

14,345

-

-

-

-

14,345

Traditional outdoor billboard network

8,499

-

1,725

-

-

10,224

Total Gross Profit

294,625

977

12,724

-

-

308,326








Generaland administrative

79,760

(40,272)

-

-

-

39,488

Selling and marketing

103,722

(4,343)

(4,116)

-

-

95,263

Impairment loss

5,736

-

-

(5,736)

-

-

Other operating (income), net

(14,144)

-

-

-

(2,257)

(16,401)

Total operating expense

175,074

(44,615)

(4,116)

(5,736)

(2,257)

118,350








Operatingprofit from continuing operations

119,551

45,592

16,840

5,736

2,257

189,976








Profit before tax from continuing operations

125,523

45,592

16,840

5,736

3,545

197,236








Net profit from continuing operations

103,093

45,592

16,840

5,736

3,545

174,806

Net profit from discontinued operations

83,172

-

766

-

(79,000)

4,938








Net incomeattributable to Focus Media

184,274

45,592

17,606

5,736

(75,455)

177,753








Basic net income (loss) from continuing operations per ADS

0.73





1.23

Diluted net income (loss)from continuing operations per ADS

0.70





1.19








Basic net income (loss) from discontinued operations per ADS

0.59





0.03

Diluted net income (loss)from discontinued operations per ADS

0.57





0.03








Basic net income (loss) attributable to Focus Media per ADS

1.30





1.26

Diluted net income (loss) attributable to Focus Media per ADS

1.26





1.21








ADS used in calculating basic income per ADS

141,569,314





141,569,314

ADS used in calculating diluted income per ADS

146,331,673





146,331,673









(1). Share-based compensation.

(2). Amortization of acquired intangible assets.

(3). Impairment charges of goodwill.

(4). Profit from disposal of previously acquired business, including $79M profit from internet disposal and $3.5M loss from the write-off of certain assets of previously acquired subsidiaries



Twelve months endedDecember 31, 2009


GAAP

(1)

(2)

(3)

(4)

(5)

(6)

(7)

(8)

Non- GAAP












Gross Profit











LCD display networkand other:

135,415

1,504

4,508

-

3,168

9,462

-

-

-

154,057

-LCD display network

133,042

1,504

4,447

-

3,168

9,462

-

-

-

151,623

-Movie theater network

2,373

-

61

-

-

-

-

-

-

2,434

Poster frame network

3,561

-

6,778

-

-

26,983

-

-

-

37,322

In-store network

6,176

-

15

-

-

516

-

-

-

6,707

Traditional outdoor billboard network

10,938

-

2,982

-

562

-

-

-

-

14,482

Total Gross Profit

156,090

1,504

14,283

-

3,730

36,961

-

-

-

212,568












Generaland administrative

88,833

(30,065)

-

-

-

-

-

-

-

58,768

Selling and marketing

79,787

(14,617)

(4,665)

-

(247)

-

-

-

-

60,258

Impairment loss

65,274

-

-

-

(65,274)

-

-

-

-

-

Other operating (income), net

13,641

-

-

(17,861)

-

(1,872)

(4,722)

-

2,067

(8,747)

Total operating Expense

247,535

(44,682)

(4,665)

(17,861)

(65,521)

(1,872)

(4,722)

-

2,067

110,279












Operating (loss)profit from continuing operations

(91,445)

46,186

18,948

17,861

69,251

38,833

4,722

-

(2,067)

102,289












Profit (loss) before tax from continuing operations

(86,499)

46,186

18,948

17,861

69,251

38,833

4,722

-

(2,067)

107,235












Net profit (loss) from continuing operations

(95,275)

46,186

18,948

17,861

69,251

29,593

4,722

-

(2,067)

89,219

Net profit (loss) from discontinued operations

(114,459)

20,317

8,331

40,398

43,794

-

2,158

2,466

-

3,005












Net income (loss) attributable to Focus Media

(213,258)

66,503

27,279

58,259

113,045

29,593

6,880

2,466

(2,067)

88,700























Basic net income (loss) from continuing operations per ADS

(0.73)









0.69

Diluted net income (loss) from continuing operations per ADS

(0.73)









0.68

Basic net income (loss) from discontinued operations per ADS

(0.88)









0.02

Diluted net income (loss) from discontinued operations per ADS

(0.88)









0.02

Basic net income (loss) attributable to Focus Media per ADS

(1.64)









0.68

Diluted net income (loss) attributable to Focus Media per ADS

(1.64)









0.67












ADS used in calculating basic income per ADS

129,735,639









129,735,639

ADS used in calculating diluted income per ADS

129,735,639









131,603,438













(1). Share-based compensation

(2). Amortization of acquired intangible assets.

(3). Loss from disposal of previously acquired subsidiaries, of which loss from disposal of subsidiaries was $4.9 million, loss from partial disposal of equity interests in subsidiaries was $14.9 million and loss from impairment of certain other assets was $7.3 million.

(4). Impairment charges of goodwill and other long-lived assets.

(5). Impairment and termination charges related to ceasing expansion of digital poster frame networks and boat-based advertising platform.

(6). Write-off of receivables from ex-shareholders of disposed business.

(7). One-off chargesfrom expensing IPO expendituresas a result of termination of IPO process of Allyes.

(8).Settlement of disputed liabilities in previously disposed wireless business.


CONFERENCE CALL

The Company will host a conference call to discuss the fourth quarter and full year 2010 results at 8:00 p.m. U.S. Eastern Time on March 8, 2011 (5:00 p.m. U.S. Pacific Time on March 8, 2011 and 9:00 a.m.Beijing/Hong Kong Time on March 9, 2011). The dial-in details for the live conference call are set forth below: U.S. Toll Free Number +1.800.510.0178, Hong Kong dial-in number +852.3002.1672, International dial-in number +1.617.614.3450; Pass code: 63154407.

A replay of the call will be available from March 8, 201111:00 pm until March 16, 2011 (US Eastern Time). The dial-in details for the replay are set forth below: U.S. Toll Free Number +1-888-286-8010, International dial-in number +1-617-801-6888; Pass code 32587143. Additionally, a live and archived web cast of this call will be available on the Focus Media web site at http://ir.focusmedia.cn

SAFE HARBOR: FORWARD-LOOKING STATEMENTS

This press release includes statements that may constitute forward-looking statements made pursuant to the safe harbor provision of the 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. Focus Media may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission on forms 20-F and 6-K., in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about Focus Media's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Potential risks and uncertainties include, but are not limited to, risks outlined in Focus Media's filings with the U.S. Securities and Exchange Commission, including its registration statements on Form F-1, F-3 and 20-F, in each case as amended. Focus Media does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

This release is not an offer of securities for sale in the United States. Securities may not be offered or sold in the United States absent registration or an exemption from registration. Any public offering of securities to be made in the United States will be made by means of a prospectus that may be obtained from the issuer or selling security holder and that will contain detailed information about the company and management, as well as financial statements.

ABOUT FOCUS MEDIA HOLDING LIMITED

Focus Media Holding Limited (Nasdaq: FMCN) operates China's largest lifestyle community media network, tracking the lifestyle of the consumers and using its media advertising platforms for residential communities, office buildings, shopping malls and movie theaters. Through its multi-platform digital media platforms, as of December 31, 2010, Focus Media's digital out-of-home advertising network had approximately 213,000 LCD displays (including the LCD display network and in-store network) and approximately 336,000 advertising in-elevator poster and digital frames, installed in 184 cities throughout China. For more information about Focus Media, please visit our website at http://ir.focusmedia.cn.


Focus Media Holding Limited

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(U.S Dollars in Thousands)



2010-12-31

2010-9-30




ASSETS



Current assets



Cash and cash equivalents

454,476

383,253

Held-to-maturity investments

137,551

116,100

Accounts receivable, net

157,329

165,235

Prepaid expenses and other current assets

53,352

31,632

Deposit paid for acquisition of subsidiaries

1,163

1,045

Rental deposits

46,614

45,543

Other current assets

1,820

1,984

Total current assets

852,305

744,792

Rental deposits, non-current

5,682

7,086

Equipment, net

68,887

68,302

Acquired intangible assets, net

24,162

27,895

Goodwill

425,335

415,014

Other long term assets

7,732

14,209

Total assets

1,384,103

1,277,298




LIABILITIES AND EQUITY



Current liabilities



Accounts payable

16,589

19,333

Accrued expenses and other current liabilities

121,764

90,413

Income taxes payable

8,890

8,774

Amount due to Related parties

1,791

-

Deferred tax liabilities

23,628

11,850

Total current liabilities

172,662

130,370

Deferred tax liabilities, non-current

9,998

4,560

Total liabilities

182,660

134,930




Equity



Ordinary shares

34

33

Additional paid in capital

1,685,073

1,680,616

Subscription receivable

(91)

(980)

Accumulated deficit

(562,953)

(610,107)

Accumulated other comprehensive income

78,416

71,642

Total Focus Media equity

1,200,479

1,141,204

Noncontrolling interests

964

1,164

Total equity

1,201,443

1,142,368

Total liabilities and equity

1,384,103

1,277,298


Focus Media Holding Limited

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(U.S Dollar in thousands, except earnings per ADS and ADS data)



Three months ended

Twelve months ended


2010-12-31

2010-9-30

2009-12-31

2010-12-31

2009-12-31







Revenues






LCD display networkand other:

107,258

96,182

73,372

348,620

239,171

-LCD display network

101,455

91,654

70,660

328,592

229,424

-Movie theater network

5,803

4,528

2,712

20,028

9,747

In-store network

10,865

10,389

8,173

41,740

33,538

Poster frame network

43,554

35,496

29,310

134,086

108,526

Traditional outdoor billboard network

13,261

9,135

10,155

41,750

50,797

Total gross revenues

174,938

151,202

121,010

566,196

432,032

Less: Sales taxes

15,238

13,850

10,106

49,881

34,869

Total net revenue (note 1)

159,700

137,352

110,904

516,315

397,163







Cost of revenues






LCD display networkand other:

24,094

22,551

16,805

81,362

82,820

-LCD display network

19,058

19,023

14,623

67,513

75,757

-Movie theater network

5,036

3,528

2,182

13,849

7,063

In-store network

6,094

5,997

2,388

23,432

24,170

Poster frame network

25,071

21,670

17,649

84,487

95,401

Traditional outdoor billboard network

9,870

7,069

8,368

32,409

38,682

Total cost of revenues

65,129

57,287

45,210

221,690

241,073

Gross profit

94,571

80,065

65,694

294,625

156,090







Operating expenses






General and administrative

16,763

24,942

32,362

79,760

88,833

Selling and marketing

29,927

24,474

19,138

103,722

79,787

Impairment loss

-

-

14,027

5,736

65,274

Other operating (income) expenses, net

(6,296)

(2,699)

(1,410)

(14,144)

13,641

Total operating expenses

40,394

46,717

64,117

175,074

247,535







Operating profit (loss)

54,177

33,348

1,577

119,551

(91,445)

Interest income

1,812

2,667

1,337

7,260

4,946

Other expense

-

-

-

1,288

-

Income (loss) from continuing operations before income taxes

55,989

36,015

2,914

125,523

(86,499)

Provision for income taxes

8,731

2,561

6,043

22,430

8,776

Net income (loss) from continuing operations

47,258

33,454

(3,129)

103,093

(95,275)







Net income (loss) from discontinued operations, net of tax

-

79,341

(53,541)

83,172

(114,459)

Net income (loss)

47,258

112,795

(56,670)

186,265

(209,734)







Less: Net income attributable to noncontrolling interests

104

58

324

1,991

3,524

Net income (loss) attributable to Focus Media

47,154

112,737

(56,994)

184,274

(213,258)







Net income(loss) from continuing operations per ADS






-basic

0.35

0.24

(0.02)

0.73

(0.73)

-diluted

0.33

0.23

(0.02)

0.70

(0.73)







Net income(loss) from discontinued operations per ADS






-basic

-

0.56

(0.40)

0.59

(0.88)

-diluted

-

0.54

(0.40)

0.57

(0.88)







Net income(loss) attributable to Focus Media per ADS






-basic

0.35

0.79

(0.42)

1.30

(1.64)

-diluted

0.33

0.76

(0.42)

1.26

(1.64)







ADS used in calculating basic income (loss) per ADS

135,679,003

141,944,371

134,562,342

141,569,314

129,735,639

ADS used in calculating diluted income (loss) per ADS

141,661,330

147,490,755

134,562,342

146,331,673

129,735,639


Note 1:Details of net revenues by segment are as follows (U.S. Dollars in thousands):




Three months ended

Twelve months ended


2010-12-31

2010-9-30

2009-12-31

2010-12-31

2009-12-31

Gross revenues






LCD display network

101,455

91,654

70,660

328,592

229,424

Movie theater network

5,803

4,528

2,712

20,028

9,747

In-store network

10,865

10,389

8,173

41,740

33,538

Poster frame network

43,554

35,496

29,310

134,086

108,526

Traditional outdoor billboard network

13,261

9,135

10,155

41,750

50,797

Total gross revenues

174,938

151,202

121,010

566,196

432,032

Less: Sales taxes






LCD display network

9,397

8,755

6,539

30,950

20,625

Movie theater network

579

651

91

1,933

311

In-store network

1,026

981

784

3,963

3,192

Poster frame network

3,925

3,269

2,513

12,193

9,564

Traditional outdoor billboard network

311

194

179

842

1,177

Total sales tax

15,238

13,850

10,106

49,881

34,869

Net revenues






LCD display network

92,058

82,899

64,121

297,642

208,799

Movie theater network

5,224

3,877

2,621

18,095

9,436

In-store network

9,839

9,408

7,389

37,777

30,346

Poster frame network

39,629

32,227

26,797

121,893

98,962

Traditional outdoor billboard network

12,950

8,941

9,976

40,908

49,620

Total net revenues

159,700

137,352

110,904

516,315

397,163

Focus Media Holding Limited

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASHFLOWS

(U.S. Dollar in thousands)


Three months ended

Twelve months ended


2010-12-31

2009-12-31

2010-12-31

2009-12-31

Operating activities:





Net income (loss)

47,258

(56,670)

186,265

(209,734)

Adjustments to reconcile net income(loss) to net cash provided by operating activities:





Bad debt expenses

(750)

5,140

455

29,076

Share-based compensation

6,795

39,040

45,592

66,503

Depreciation

6,478

7,933

28,270

35,450

Amortization of acquired intangible assets

4,548

4,672

17,606

27,279

Loss (profit) on disposal of subsidiaries and equity investmentand other long-lived assets

-

39,111

(76,167)

67,526

Impairment charges for goodwill, acquired intangible assets and fixed assets

-

14,027

5,736

113,045

Impairment charges for certain other assets

-



40,319

Others

77

(1,906)

318


Net changes in current assets and current liabilities, net of effects of acquisitions

43,586

20,914

(22,853)

(8,741)

Net cash provided by operating activities

107,992

72,261

185,222

160,723






Investing activities:





Purchase of equipment and other long term assets

(7,092)

(987)

(18,693)

(10,655)

Payment paid to acquired subsidiaries

(13,881)

(19,301)

(40,186)

(92,412)

Proceeds received from the saleof short term investments

-

-

29,290

-

Proceeds used in investment in held-to-maturity investment

(21,450)

-

(137,551)

(28,391)

Proceeds received from disposal of fixed assets

162


471

196

Others

-

329

-

329

Disposal of subsidiaries

-

(9,328)

76,067

(27,316)

Net cash used in investing activities

(42,261)

(29,287)

(90,602)

(158,249)






Financing activities:





Cash used for share repurchase

-

-

(236,716)

-

Collection (payment) of deposit for share repurchase

-

-

(36)

-

Capital injection from minority shareholders

-

-

10,980

-

Proceeds from issuance of ordinary shares, net of issuance costs

784

142,437

3,171

144,499

Net cash provided by/(used in) financing activities

784

142,437

(222,601)

144,499

Effect of exchange rate changes

4,708

(359)

14,298

(1,730)






Net increase (decrease)in cash and cash equivalents

71,223

185,052

(113,683)

145,243

Cash and cash equivalents, beginning of period

383,253

383,107

568,159

422,916






Cash and cash equivalents, end of period

454,476

568,159

454,476

568,159






Supplemental disclosure of cash flow information:





Income taxes paid

4,238

2,787

32,031

12,965






Supplemental disclosure of non-cash investing activity:





Accrual for acquisition of subsidiaries

4,920

20,326

4,920

20,326

SOURCE Focus Media Holding Limited

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