BEIJING, Aug. 12, 2010 (GLOBE NEWSWIRE) -- AutoNavi Holdings Limited ("AutoNavi" or the "Company") (Nasdaq:AMAP), a leading provider of digital map content and navigation and location-based solutions in China, today announced its unaudited financial results for the quarter ended June 30, 2010.
Second Quarter 2010 Highlights
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Net revenues in the second quarter of 2010 were $22.1 million, an increase of 63.1% year-over-year from $13.6 million in the second quarter of 2009.
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Gross profit in the second quarter of 2010 was $14.7 million, an increase of 63.0% year-over-year from $9.0 million in the second quarter of 2009.
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Operating income in the second quarter of 2010 was $7.2 million, an increase of 156.5% year-over-year from $2.8 million in the second quarter of 2009.
- Net income attributable to AutoNavi shareholders was $6.2 million, an increase of 180.5% year-over-year from $2.2 million in the second quarter of 2009.
"We are excited to report quarterly earnings for the first time as a public company," said Mr. Congwu Cheng, AutoNavi's chief executive officer. "We continued to achieve strong overall growth in the second quarter as we leveraged our leading market position and advanced technology platform to capitalize on growth opportunities in our key business lines. With the increased brand awareness following our successful IPO in July, we hope to further solidify our market position, expand our business and scale up our revenues to achieve better profitability."
Second Quarter 2010 Results
Revenues
Net revenues in the second quarter of 2010 were $22.1 million, representing an increase of 63.1% year-over-year from the second quarter of 2009 and 33.4% sequentially from the first quarter of 2010.
Automotive Navigation
Net revenues from the automotive navigation market in the second quarter of 2010 were $16.6 million, an increase of 125.7% year-over-year and 35.8% sequentially. The increases were mainly due to an increase in the number of copies of digital map data licensed for use in in-dash navigation systems, which is directly linked to the number of vehicles sold in China that are equipped with these systems.
Public Sector and Enterprise Applications
Net revenues from the public sector and enterprise applications market in the second quarter of 2010 were $2.0 million, a decrease of 55.9% year-over-year and 11.2% sequentially, mainly due to a decrease in revenues from the aerial photogrammetry business. The year-over-year decrease in revenues from the aerial photogrammetry business was primarily attributable to a relatively large portion of revenues in the second quarter of 2009 associated with the central government's second national land survey project and, to a lesser extent, the flight schedule delays caused by unfavorable weather conditions during the second quarter of 2010. The sequential decrease was mainly due to the flight schedule delays caused by unfavorable weather conditions during the second quarter of 2010.
Wireless and Internet Location-based Solutions
Net revenues from the wireless and Internet location-based solutions business in the second quarter of 2010 were $2.5 million, an increase of 137.1% year-over-year and 42.9% sequentially. The increases were mainly due to an increase in revenues derived from pre-installing the Company's navigation solutions on certain mobile phone models and an increase in revenues from the Company's Internet map application business.
Cost of Revenues
Cost of revenues in the second quarter of 2010 was $7.5 million, representing an increase of 63.5% year-over-year and 31.9% sequentially. The year-over-year and sequential increases were due to increased direct production costs as well as an increase in salary and benefit expenses as a result of the expansion of the Company's data collection and processing work force as the Company continues to enhance the quality, coverage and depth of its digital map database.
Gross Profit and Gross Margin
Gross profit in the second quarter of 2010 was $14.7 million, an increase of 63.0% year-over-year and 34.2% sequentially. Gross margin, or gross profit as a percentage of net revenues, was 66.2% in the second quarter of 2010, compared to 66.3% in the year-ago period and 65.9% in the previous quarter.
Operating Expenses
Total operating expenses in the second quarter of 2010 were $7.4 million, an increase of 20.4% year-over-year and a decrease of 19.7% sequentially. Non-GAAP operating expenses, which exclude share-based compensation expenses, were $6.5 million, an increase of 38.4% year-over-year and 20.9% sequentially.
Research and development ("R&D") expenses increased by 59.3% year-over-year and by 13.7% sequentially to $2.8 million. The year-over-year increase was primarily due to the increase in share-based compensation expenses and higher salary and benefit expenses as the Company hired additional R&D personnel to improve the efficiency of its technology platform and expand its technological capabilities. The sequential increase was mainly due to the increased salary and benefit expenses associated with increased R&D headcount. Non-GAAP R&D expenses, which exclude share-based compensation expenses, increased by 59.6% year-over-year and by 22.7% sequentially to $2.3 million.
Selling and marketing expenses increased by 64.9% year-over-year and decreased by 6.2% sequentially to $2.1 million. The year-over-year increase was primarily due to the higher share-based compensation expenses as compared with those in the second quarter of 2009 as well as the higher salary and benefit expenses as a result of an increased sales headcount. The sequential decrease was primarily due to the lower share-based compensation expenses as compared with those in the first quarter of 2010, partially offset by the increased salary and benefit expenses associated with additional sales headcount. Non-GAAP selling and marketing expenses, which exclude share-based compensation expenses, increased by 47.4% year-over-year and by 18.7% sequentially to $1.8 million.
General and administrative expenses decreased by 20.1% year-over-year and by 44.8% sequentially to $2.5 million. The year-over-year decrease was primarily due to the higher share-based compensation expenses in the second quarter of 2009, partially offset by the increase in professional service expenses in the second quarter of 2010. The sequential decrease was primarily due to the higher share-based compensation expenses in the first quarter of 2010, partially offset by the increase in professional service expenses in the second quarter of 2010. Non-GAAP general and administrative expenses, which exclude share-based compensation expenses, increased by 17.6% year-over-year and by 20.8% sequentially to $2.4 million.
Operating Income and Operating Margin
Operating income in the second quarter of 2010 was $7.2 million, an increase of 156.5% year-over-year and 320.3% sequentially. Operating margin, or operating income as a percentage of net revenues, was 32.6% in the second quarter of 2010, compared to 20.8% in the year-ago period and 10.4% in the previous quarter.
Non-GAAP operating income, which excludes share-based compensation expenses, in the second quarter of 2010 was $8.3 million, an increase of 88.8% year-over-year and 38.4% sequentially. Non-GAAP operating margin, or non-GAAP operating income as a percentage of net revenues, was 37.5% in the second quarter of 2010, compared to 32.4% in the year-ago period and 36.1% in the previous quarter.
Net Income Attributable to AutoNavi Shareholders
Net income attributable to AutoNavi shareholders in the second quarter of 2010 was $6.2 million, an increase of 180.5% year-over-year and 593.9% sequentially. Diluted net income per American depositary share ("ADS") attributable to AutoNavi shareholders for the second quarter of 2010 was $0.15. One ADS represents four ordinary shares.
Non-GAAP net income attributable to AutoNavi shareholders, which excludes share-based compensation expenses, in the second quarter of 2010 was $7.3 million, an increase of 73.1% year-over-year and 41.0% sequentially. Diluted non-GAAP net income per ADS attributable to AutoNavi shareholders for the second quarter of 2010 was $ $0.18.
Cash Flow
Net cash provided by operating activities was approximately $10 million for the second quarter of 2010. As of June 30, 2010, the Company had $64.2 million in cash.
Recent Business Updates
Initial Public Offering
On July 7, 2010, AutoNavi completed an initial public offering of a total of 9,918,750 ADSs at a public offering price of $12.50 per ADS. The Company sold 8,793,750 ADSs and the selling shareholders sold 1,125,000 ADSs. Net proceeds to the Company from the offering were approximately $98.6 million after deducting underwriting discounts and commissions as well as offering expenses payable by the Company.
Business Outlook
The Company estimates that its net revenues for the full year of 2010 will be in the range of $74 million to $77 million, an increase of 30% to 35% on a year-over-year basis.
Conference Call Information
AutoNavi management will hold an earnings conference call at 8:00 p.m. U.S. Eastern Time on August 12, 2010 (8:00 a.m. Beijing/Hong Kong Time on August 13, 2010) to discuss results and highlights from the quarter and answer questions.
The dial-in numbers and passcode for the conference call are as follows:
U.S. Toll Free: | +1-866-270-6057 |
U.S./International: | +1-617-213-8891 |
Hong Kong: | +852-3002-1672 |
United Kingdom: | +44-207-365-8426 |
Passcode: | AutoNavi |
A replay of the conference call may be accessed by phone at the following number until August 19, 2010:
International: | +1-617-801-6888 |
Passcode: | 50724532 |
Additionally, an archived web-cast of this call will be available on the Investor Relations section of AutoNavi's website at http://ir.autonavi.com.
About AutoNavi Holdings Limited
AutoNavi Holdings Limited (Nasdaq:AMAP) is a leading provider of digital map content and navigation and location-based solutions in China. At the core of its business is a comprehensive nationwide digital map database that covers approximately 2.8 million kilometers of roadway and over 12.5 million points of interest across China. Through its digital map database and proprietary technology platform, AutoNavi provides comprehensive, integrated navigation and location-based solutions optimized for the Chinese market and users, including automotive navigation solutions, public sector and enterprise applications, wireless location-based solutions and Internet location-based solutions. For more information on AutoNavi, please visit http://www.autonavi.com.
The AutoNavi Holdings Limited logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=7693
Forward Looking Statements
This press release contains forward-looking statements made under the "safe harbor" provisions of Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "confident" and similar statements. Among other things, the Business Outlook section and quotations from management in this press release, as well as AutoNavi's strategic and operational plans, contain forward-looking statements. AutoNavi may also make written or oral forward-looking statements in its reports filed with or furnished to the U.S. Securities and Exchange Commission, 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 AutoNavi's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: AutoNavi's ability to adequately maintain and update its digital map database and minimize errors in its solutions; its current reliance on the automotive navigation market and a small number of customers for a substantial portion of its revenues; the project-based nature of its public sector and enterprise applications business; its limited operating history in the wireless/Internet location-based solutions markets; compliance with a complex set of laws, rules and regulations governing its surveying and mapping and other businesses in China; competition in the navigation and location-based solutions businesses in China; and its ability to manage its growth effectively and efficiently. Further information regarding these and other risks is included in AutoNavi's registration statement on Form F-1 filed with the Securities and Exchange Commission. All information provided in this press release is current as of the date of the press release, and AutoNavi undertakes no duty to update such information, except as required under applicable law.
About Non-GAAP Financial Measures
To supplement AutoNavi's consolidated financial results presented in accordance with United States Generally Accepted Accounting Principles ("GAAP"), AutoNavi uses in this press release the following non-GAAP financial measures: (1) non-GAAP operating expenses, (2) non-GAAP R&D expenses, (3) non-GAAP selling and marketing expenses, (4) non-GAAP general and administrative expenses, (5) non-GAAP operating income, (6) non-GAAP operating margin, (7) non-GAAP net income attributable to AutoNavi shareholders, and (8) non-GAAP diluted net income per ADS attributable to AutoNavi shareholders, each of which excludes share-based compensation expenses. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP.
AutoNavi believes that these non-GAAP financial measures facilitate investors' and management's comparisons to AutoNavi's historical performance and assist management's financial and operational decision making. A limitation of using these non-GAAP financial measures is that share-based compensation expenses are recurring expenses that will continue to exist in AutoNavi's business for the foreseeable future. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from each non-GAAP measure. The accompanying table has more details on the reconciliation between non-GAAP financial measures and their most directly comparable GAAP financial measures.
For investor and media inquiries please contact: |
In China: |
Serena Shi |
AutoNavi Holdings Limited |
Tel: +86-10-5985-9538 |
E-mail: serena.shi@autonavi.com |
Derek Mitchell |
Ogilvy Financial, Beijing |
Tel: +86-10-8520-6284 |
E-mail: amap@ogilvy.com |
In the U.S.: |
Jessica Barist Cohen |
Ogilvy Financial, New York |
Phone: +1-646-460-9989 |
E-mail: amap@ogilvy.com |
AUTONAVI HOLDINGS LIMITED | ||
Unaudited Consolidated Balance Sheet | ||
(In thousands of U.S. dollars) | ||
June 30, | December 31, | |
2010 | 2009 | |
ASSETS | ||
Current assets: | ||
Cash | 64,157 | 34,716 |
Restricted cash | 472 | 469 |
Accounts receivables | 20,678 | 18,743 |
Amount due from related parties, non-trading | 1,770 | 16,663 |
Prepaid expenses and other current assets | 7,082 | 3,895 |
Deferred costs in connection with IPO | 1,921 | 1,054 |
Deferred tax assets, current | 475 | 469 |
Total current assets | 96,555 | 76,009 |
Property and equipment, net | 20,082 | 20,587 |
Equity method investment | 5,299 | 5,163 |
Acquired intangible assets, net | 1,165 | 1,326 |
Goodwill | 3,155 | 3,134 |
Deferred tax assets, non-current | 132 | 79 |
Other long term assets | 349 | 332 |
Total assets | 126,737 | 106,630 |
LIABILITIES AND STOCKHOLDERS' EQUITY | ||
Current liabilities: | ||
Accounts payable | 1,087 | 494 |
Deferred revenue | 4,647 | 3,073 |
Accrued expenses and other current liabilities | 13,524 | 10,651 |
Income taxes payable | 3,440 | 1,983 |
Total current liabilities | 22,698 | 16,201 |
Deferred tax liability, non-current | 498 | 532 |
Total liabilities | 23,196 | 16,733 |
Series A convertible redeemable preferred shares | 39,326 | 39,326 |
Stockholders' equity: | ||
Ordinary shares | 11 | 11 |
Additional paid-in capital | 30,517 | 25,178 |
Statutory reserve | 4,943 | 3,712 |
Retained earnings | 17,390 | 11,498 |
Accumulated other comprehensive income | 8,610 | 7,923 |
Total AutoNavi Holding Limited Shareholders' Equity | 61,471 | 48,322 |
Non-controlling interest | 2,744 | 2,249 |
Total equity | 64,215 | 50,571 |
Total liabilities, series A convertible redeemable preferred shares, and total equity |
126,737 | 106,630 |
AUTONAVI HOLDINGS LIMITED | |||
Unaudited Consolidated Statements of Operations | |||
(In thousands of U.S. dollars, except per share data) | |||
June 30, 2010 |
June 30, 2009 |
March 31, 2010 |
|
Revenues | 22,647 | 14,061 | 17,001 |
Business tax | (507) | (489) | (402) |
Net revenues | 22,140 | 13,572 | 16,599 |
Cost of revenues | (7,475) | (4,573) | (5,668) |
Gross profit | 14,665 | 8,999 | 10,931 |
Operating expenses | |||
Research and development | (2,811) | (1,764) | (2,471) |
Selling and marketing | (2,136) | (1,295) | (2,276) |
General and administrative | (2,496) | (3,123) | (4,522) |
Total operating expenses | (7,443) | (6,182) | (9,269) |
Government subsidies | 5 | -- | 57 |
Operating income | 7,227 | 2,817 | 1,719 |
Interest income | 126 | 52 | 72 |
Income before income taxes, share of net income of equity accounted investment and discontinued operations |
7,353 |
2,869 |
1,791 |
Income tax expense | (1,008) | (219) | (637) |
Share of net income of equity method accounted investment | 88 | 129 | 13 |
Income from continuing operations | 6,433 | 2,779 | 1,167 |
Discontinued operations | |||
Loss on discontinued operations before income tax | -- | (434) | -- |
Income tax benefit | -- | 15 | -- |
Loss on discontinued operations, net of tax | -- | (419) | -- |
Net income | 6,433 | 2,360 | 1,167 |
Less: Net income/(loss) attributable to noncontrolling interest | 207 | 141 | 270 |
Net income attributable to AutoNavi Holdings Limited shareholders | 6,226 | 2,219 | 897 |
Net income per share | |||
Net income from continuing operations attributable to | |||
AutoNavi Holdings Limited shareholders | |||
Basic | 0.04 | 0.02 | 0.01 |
Diluted | 0.04 | 0.02 | 0.01 |
Net Income per Series A preferred share-Basic | 0.04 | 0.02 | 0.01 |
Net loss on discontinued operations attributable to | |||
AutoNavi Holdings Limited shareholders | |||
Basic | -- | (0.01) | -- |
Diluted | -- | (0.01) | -- |
Net loss per Series A preferred share-Basic | -- | (0.01) | -- |
Net income attributable to AutoNavi Holdings Limited shareholders | |||
Basic | 0.04 | 0.01 | 0.01 |
Diluted | 0.04 | 0.01 | 0.01 |
Net income per Series A preferred share-Basic | 0.04 | 0.01 | 0.01 |
Weighted average number of shares used in calculating net income per ordinary share |
|||
Basic | 112,298,000 | 116,440,308 | 108,292,011 |
Diluted | 162,757,988 | 156,474,253 | 158,515,244 |
Weighted average number of shares used in calculating net income per Series A preferred share |
40,000,000 | 40,000,000 | 40,000,000 |
AUTONAVI HOLDINGS LIMITED | |||
Reconciliation of non-GAAP measures to most directly comparable GAAP measures | |||
(In thousands of U.S. dollars, except percentage and per ADS data) | |||
For the three months ended | |||
June 30, | June 30, | March 31, | |
2010 | 2009 | 2010 | |
Total operating expenses | 7,443 | 6,182 | 9,269 |
Share-based compensation | (940) | (1,484) | (3,888) |
Non-GAAP total operating expenses | 6,503 | 4,698 | 5,381 |
R&D expenses | 2,811 | 1,764 | 2,471 |
Share-based compensation | (508) | (321) | (595) |
Non-GAAP R&D expenses | 2,303 | 1,443 | 1,876 |
Selling and marketing expenses | 2,136 | 1,295 | 2,276 |
Share-based compensation | (290) | (43) | (720) |
Non-GAAP selling and marketing expenses | 1,846 | 1,252 | 1,556 |
General and administrative expenses | 2,496 | 3,123 | 4,522 |
Share-based compensation | (142) | (1,120) | (2,573) |
Non-GAAP general and administrative expenses | 2,354 | 2,003 | 1,949 |
Operating income | 7,227 | 2,817 | 1,719 |
Share-based compensation | 1,066 | 1,575 | 4,273 |
Non-GAAP operating income | 8,293 | 4,392 | 5,992 |
Operating margin | 32.60% | 20.80% | 10.40% |
Share-based compensation | 4.90% | 11.60% | 25.70% |
Non-GAAP operating margin | 37.50% | 32.40% | 36.10% |
Net income attributable to AutoNavi Holdings Limited shareholders | 6,226 | 2,219 | 897 |
Discontinued operation, net of tax | -- | 419 | -- |
Share-based compensation | 1,066 | 1,575 | 4,273 |
Non-GAAP net income attributable to AutoNavi Holdings Limited shareholders | 7,292 | 4,213 | 5,170 |
For the three months ended June 30, 2010 |
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GAAP | Adjustments | Non-GAAP(a) | |
Diluted net income per ADS attributable to AutoNavi Holdings Limited shareholders |
0.15 | 0.03 | 0.18 |
(a) Non-GAAP diluted net income per ADS attributable to AutoNavi Holdings Limited shareholders is computed by dividing non-GAAP net income attributable to AutoNavi Holdings Limited shareholders by the weighted average number of diluted ordinary shares outstanding used in computing the GAAP diluted net income per ordinary share attributable to AutoNavi Holdings Limited shareholders for the respective periods (after adjusting for the ADS to ordinary share ratio). |