BEIJING, Aug. 14, 2012 (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 second quarter ended June 30, 2012.
Second Quarter 2012 Operational Highlights
- AutoNavi's free mobile map application had a total of 65 million users and over 36 million monthly active users as of the end of the second quarter of 2012, compared to a total of 52 million users and over 29 million monthly active users as of the end of the first quarter of 2012, and a total of 17 million users and over 4 million monthly active users as the end of the second quarter of 2011.
Second Quarter 2012 Financial Highlights
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Net revenues in the second quarter of 2012 were $40.2 million, an increase of 22.0% year-over-year.
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Gross profit in the second quarter of 2012 was $30.1 million, an increase of 27.4% year-over-year.
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Operating income in the second quarter of 2012 was $9.6 million, a decrease of 8.7% year-over-year. Non-GAAP operating income in the second quarter of 2012 was $13.9 million, an increase of 21.2% year-over-year.
- Net income attributable to AutoNavi shareholders was $8.8 million in the second quarter of 2012, a decrease of 8.1% year-over-year. Non-GAAP net income attributable to AutoNavi shareholders was $13.1 million in the second quarter of 2012, an increase of 24.2% year-over-year.
First Six Months of 2012 Financial Highlights
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Net revenues in the first six months of 2012 were $75.9 million, an increase of 30.0% year-over-year.
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Gross profit in the first six months of 2012 was $57.0 million, an increase of 37.0% year-over-year.
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Operating income in the first six months of 2012 was $19.6 million, an increase of 3.2% year-over-year. Non-GAAP operating income in the first six months of 2012 was $27.1 million, an increase of 33.5% year-over-year.
- Net income attributable to AutoNavi shareholders was $17.7 million in the first six months of 2012, a decrease of 12.2% year-over-year. Non-GAAP net income attributable to AutoNavi shareholders was $25.3 million in the first six months of 2012, an increase of 23.1% year-over-year.
"Our overall business maintained a healthy growth trajectory during the first half of 2012, with net revenues growing 30% year-over-year to $75.9 million," said Mr. Congwu Cheng, chief executive officer of AutoNavi. "In the second quarter, our mobile and Internet location-based solutions business hit new record high with $11 million in net revenues, representing more than 100% year-over-year growth and accounting for nearly 28% of our total revenues. Our ability to integrate a mapping value chain of data collection, content production and application development differentiates AutoNavi in the mobile Internet space. This competitive advantage allows us to provide rich and authentic location-based content, while being recognized as a trusted resource for people on the go."
Mr. Cheng added, "As a professional mapping company, the nature of AutoNavi's map is content-neutral and independently-sourced, as well as compatible with a dynamic range of content, which makes it the ideal display platform for local merchants. We will continue to leverage our strategic distribution channels to enhance our partnerships with handset makers, automakers, mobile operators and API third-party developers, further broadening the reach of our map. This will provide AutoNavi with a strong foundation for capturing the tremendous growth opportunities in mobile internet advertising and e-commerce."
Second Quarter 2012 Results
Revenues
Total net revenues in the second quarter of 2012 were $40.2 million, an increase of 22.0% year-over-year from $32.9 million in the second quarter of 2011, and an increase of 12.7% from $35.7 million in the first quarter of 2012.
Automotive Navigation
Net revenues from the automotive navigation market in the second quarter of 2012 were $24.9 million, an increase of 9.0% year-over-year and 14.6% over the previous quarter. The increases were mainly due to an increase in the number of copies of digital map data licensed for use with in-dash navigation systems, which is directly linked to the number of vehicles equipped with these systems that are sold in China.
Mobile and Internet Location-based Solutions
The mobile and Internet location-based solutions business in the second quarter of 2012 again delivered record results with $11.0 million in net revenues, representing an increase of 104.5% year-over-year and 11.5% over the previous quarter. The increases were primarily due to the growth in revenues derived from the pre-installation of the Company's navigation solutions on mobile phones and our provision of location-based solutions to mobile operators.
Public Sector and Enterprise Applications
Net revenues from the public sector and enterprise applications market in the second quarter of 2012 were $3.9 million, a decrease of 7.5% year-over-year and an increase of 8.2% over the previous quarter. The year-over-year decrease was a result of better performance of certain large aerial photogrammetry contract in the second quarter of 2011. The sequential increase was mainly due to an increased number of new aerial photogrammetry and map data licensing contracts during the quarter.
Cost of Revenues
Cost of revenues in the second quarter of 2012 was $10.1 million, representing an increase of 8.3% year-over-year and 15.2% sequentially. The year-over-year increase was mainly due to a general annual increase in salary and welfare benefits for employees directly involved in data collection and processing. The sequential increase was largely attributable to a rise in direct data production costs.
Operating Expenses
Total operating expenses in the second quarter of 2012 were $20.6 million, an increase of 56.0% year-over-year and 16.7% over the previous quarter. Non-GAAP operating expenses, which exclude share-based compensation expenses, were $16.3 million, an increase of 33.3% year-over-year and 12.9% sequentially.
Research and development ("R&D") expenses increased 40.8% year-over-year and 3.0% sequentially to $8.2 million. The year-over-year increase was primarily due to higher salary and benefit expenses, a result of an increase in the number of R&D staff, higher share-based compensation expenses and outsourced development costs. Non-GAAP R&D expenses, which exclude share-based compensation expenses, increased 34.9% year-over-year and 5.0% sequentially to $7.3 million.
Selling and marketing expenses increased 95.8% year-over-year and 26.7% sequentially to $6.7 million. The year-over-year increase was primarily due to higher salary and benefit expenses resulting from increased sales headcount, higher share-based compensation expenses, increased marketing expenses associated with branding activities and traveling expenses. The sequential increase was primarily due to higher share-based compensation expenses, increased marketing expenses associated with branding activities and travel expenses. Non-GAAP selling and marketing expenses, which exclude share-based compensation expenses, increased 56.9% year-over-year and 22.3% sequentially to $4.9 million.
General and administrative expenses increased 44.1% year-over-year and 29.6% sequentially to $5.7 million. The year-over-year increase was primarily due to higher salary and benefit expenses resulting from an increase in the number of general and administrative personnel and higher share-based compensation expenses in the second quarter of 2012. The sequential increase was primarily due to higher share-based compensation expenses. Non-GAAP general and administrative expenses, which exclude share-based compensation expenses, increased 11.1% year-over-year and 17.5% sequentially to $4.1 million.
Net Income Attributable to AutoNavi Shareholders
Net income attributable to AutoNavi shareholders was $8.8 million in the second quarter of 2012, a decrease of 8.1% year-over-year from $9.6 million in the second quarter of 2011 and a decrease of 1.4% quarter-over-quarter from $8.9 million in the first quarter of 2012. Diluted net income per American depositary share ("ADS") attributable to AutoNavi shareholders for the second quarter of 2012 was $0.17, as compared to $0.19 from a year ago. One ADS represents four ordinary shares.
Non-GAAP net income attributable to AutoNavi shareholders, which excludes share-based compensation expenses, was $13.1 million in the second quarter of 2012, an increase of 24.2% year-over-year and 7.9% sequentially. Diluted non-GAAP net income per ADS attributable to AutoNavi shareholders for the second quarter of 2012 was $0.26, as compared to $0.21 from a year ago.
Cash Balance
As of June 30, 2012, the Company had $171.9 million in cash and cash equivalents.
Business Outlook
The Company maintains its estimate of full year 2012 net revenues, which is in the range of $152 million to $159 million, representing an increase of approximately 20% to 25% over fiscal year 2011.
Share Repurchase Program Update
AutoNavi announced a share repurchase plan on February 28, 2012, pursuant to which the Company is authorized, but not obligated, by its board of directors to repurchase up to US$50 million worth of its ADSs until February 26, 2013. As of August 13, 2012, the Company has repurchased a total of 809,140 ADSs, representing 3,236,560 ordinary shares, with a total consideration of approximately $9.4 million at a price range of $10.47 to $12.57 per ADS, including brokerage commissions.
Conference Call Information
AutoNavi's management will hold an earnings conference call at 8:00 a.m. Eastern Daylight Time (EDT) on August 14, 2012 (8:00 p.m. Beijing/Hong Kong time on August 14, 2012).
The dial-in numbers and passcode for the conference call are as follows:
| U.S. Toll Free: | +1-866-519-4004 |
| International: | +65-6723-9381 |
| Hong Kong: | +852-2475-0994 |
| United Kingdom: | +44-20-3059-8139 |
| Passcode: | AutoNavi |
A replay of the conference call may be accessed by phone at the following number until August 21, 2012:
| U.S. Toll Free: | +1-866-214-5335 |
| International: | +61-2-8235-5000 |
| Passcode: | 12958658 |
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 3.4 million kilometers of roadway and over 20 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, mobile location-based solutions and Internet location-based solutions, and public sector and enterprise applications. For more information on AutoNavi, please visit http://www.autonavi.com.
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 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 mobile/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 annual report on Form 20-F as well as in its other filings 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 net income attributable to AutoNavi shareholders, and (7) non-GAAP diluted net income per ADS attributable to AutoNavi shareholders, which are adjusted from results based on GAAP to exclude the impact of 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 to provide investors with context as to how the adjustments impact the GAAP amounts.
| AUTONAVI HOLDINGS LIMITED | ||
| Consolidated Balance Sheet (unaudited) | ||
| (In thousands of U.S. dollars) | ||
| June 30, | December 31, | |
| 2012 | 2011 | |
| Assets | ||
| Current assets | ||
| Cash and cash equivalents | 171,929 | 199,696 |
| Term deposit | 31,481 | -- |
|
Accounts receivable, net of allowance for doubtful accounts of $1,042 and $823 as of June 30, 2012 and December 31, 2011, respectively |
43,411 | 36,273 |
| Due from related parties, trading | 4,807 | 1,056 |
| Due from related parties, non-trading | 3 | 221 |
| Prepaid expense and other current assets | 13,484 | 5,542 |
| Deferred tax assets-current | 1,146 | 1,355 |
| Total current assets | 266,261 | 244,143 |
| Properties and equipment, net | 47,511 | 49,245 |
| Equity method investments | 4,374 | 4,442 |
| Prepaid consideration in connection with equity investment | -- | 183 |
| Acquired intangible assets, net | 5,814 | 6,855 |
| Goodwill | 8,666 | 8,747 |
| Deferred tax assets-non-current | 238 | 224 |
| Other long term assets | 420 | 628 |
| TOTAL ASSETS | 333,284 | 314,467 |
| Liabilities | ||
| Current liabilities | ||
|
Accounts payable (including accounts payable of the consolidated variable interest entities without recourse to AutoNavi Holdings Limited $2,630 and $2,358 as of June 30, 2012 and December 31, 2011, respectively) |
2,630 | 2,364 |
|
Deferred revenue (including deferred revenue of the consolidated variable interest entities without recourse to AutoNavi Holdings Limited $8,482 and $5,567 as of June 30, 2012 and December 31, 2011, respectively) |
9,617 | 7,328 |
|
Accrued expenses and other current liabilities (including accrued expenses and other current liabilities of the consolidated variable interest entities without recourse to AutoNavi Holdings Limited $23,208 and $23,944 as of June 30, 2012 and December 31, 2011, respectively) |
26,021 | 26,071 |
|
Income tax payable (including income tax payable of the consolidated variable interest entities without recourse to AutoNavi Holdings Limited $6,935 and $7,394 as of June 30, 2012 and December 31, 2011, respectively) |
7,082 | 7,481 |
| Total current liabilities | 45,350 | 43,244 |
| Non-current liabilities | ||
|
Deferred tax liability-non-current (including deferred tax liability of the consolidated variable interest entities without recourse to AutoNavi Holdings Limited $1,007 and $1,191 as of June 30, 2012 and December 31, 2011, respectively) |
1,135 | 1,345 |
| Total liabilities | 46,485 | 44,589 |
| Equity | ||
| Ordinary shares | 19 | 19 |
| Additional paid-in capital | 183,982 | 175,726 |
| Treasury stock | (8,119) | -- |
| Statutory reserve | 9,363 | 9,363 |
| Retained earnings | 79,255 | 61,517 |
| Accumulated other comprehensive income | 16,502 | 18,262 |
| Total AutoNavi Holdings Limited shareholders' equity | 281,002 | 264,887 |
| Noncontrolling interest | 5,797 | 4,991 |
| Total equity | 286,799 | 269,878 |
| TOTAL LIABILITIES AND EQUITY | 333,284 | 314,467 |
| AUTONAVI HOLDINGS LIMITED | |||||
| Consolidated Statements of Comprehensive Income (unaudited) | |||||
| (In thousands of U.S. dollars, except share and per share data) | |||||
| For the three months ended | For the six months ended | ||||
| June 30, | June 30, | March 31, | June 30, | June 30, | |
| 2012 | 2011 | 2012 | 2012 | 2011 | |
| Revenue | 41,232 | 33,628 | 36,579 | 77,811 | 59,593 |
| Business tax | (1,033) | (681) | (913) | (1,946) | (1,220) |
| Net revenues | 40,199 | 32,947 | 35,666 | 75,865 | 58,373 |
| Cost of revenues | (10,085) | (9,309) | (8,757) | (18,842) | (16,742) |
| Gross profit | 30,114 | 23,638 | 26,909 | 57,023 | 41,631 |
| Operating expenses: | |||||
| Research and development | (8,245) | (5,854) | (8,008) | (16,253) | (9,736) |
| Selling and marketing | (6,666) | (3,405) | (5,260) | (11,926) | (6,047) |
| General and administrative | (5,663) | (3,930) | (4,369) | (10,032) | (6,878) |
| Total operating expenses | (20,574) | (13,189) | (17,637) | (38,211) | (22,661) |
| Government subsidies | 10 | 11 | 762 | 772 | 11 |
| Operating income | 9,550 | 10,460 | 10,034 | 19,584 | 18,981 |
| Gain on re-measurement of fair value of the equity method investment | -- | -- | -- | -- | 995 |
| Interest income | 1,563 | 1,466 | 1,616 | 3,179 | 2,615 |
| Change in fair value of forward contract | -- | (1,298) | -- | -- | (288) |
| Foreign exchange (loss)/gains | (438) | 1,103 | (30) | (468) | 552 |
| Other Income | 47 | 47 | 47 | 94 | 94 |
| Income before income taxes and share of net (loss)/income of equity method investments | 10,722 | 11,778 | 11,667 | 22,389 | 22,949 |
| Income tax expense | (1,196) | (1,698) | (2,093) | (3,289) | (2,061) |
| Share of net (loss)/income of equity method investments | (263) | 40 | (238) | (501) | 52 |
| Net income | 9,263 | 10,120 | 9,336 | 18,599 | 20,940 |
| Less: Net income attributable to noncontrolling interest | 458 | 543 | 403 | 861 | 744 |
| Net income attributable to AutoNavi Holdings Limited shareholders | 8,805 | 9,577 | 8,933 | 17,738 | 20,196 |
| Net income per ordinary share attributable to AutoNavi Holdings Limited shareholders | |||||
| Basic | 0.05 | 0.05 | 0.05 | 0.09 | 0.11 |
| Diluted | 0.04 | 0.05 | 0.04 | 0.09 | 0.10 |
| Net income | 9,263 | 10,120 | 9,336 | 18,599 | 20,940 |
| Other comprehensive (loss)/income, net of tax | |||||
| Foreign currency translation adjustment | (1,676) | 1,848 | (139) | (1,815) | 2,825 |
| Comprehensive income | 7,587 | 11,968 | 9,197 | 16,784 | 23,765 |
| Less: comprehensive income attributable to noncontrolling interest | 406 | 592 | 400 | 806 | 822 |
| Comprehensive income attributable to AutoNavi Holdings Limited shareholders | 7,181 | 11,376 | 8,797 | 15,978 | 22,943 |
| Weighted average number of shares used in calculating net income per ordinary share | |||||
| Basic | 192,206,265 | 189,886,340 | 191,804,433 | 192,005,349 | 189,433,136 |
| Diluted | 202,499,739 | 201,317,855 | 202,405,245 | 202,452,492 | 201,256,323 |
| AUTONAVI HOLDINGS LIMITED | ||||
| Reconciliation of non-GAAP measures to most directly comparable GAAP measures (unaudited) | ||||
| (In thousands of U.S. dollars, except per ADS data) | ||||
| For the three months ended | ||||
| June 30, | June 30, | March 31, | ||
| 2012 | 2011 | 2012 | ||
| Total operating expenses | 20,574 | 13,189 | 17,637 | |
| Share-based compensation | (4,228) | (928) | (3,157) | |
| Non-GAAP total operating expenses | 16,346 | 12,261 | 14,480 | |
| R&D expenses | 8,245 | 5,854 | 8,008 | |
| Share-based compensation | (971) | (460) | (1,082) | |
| Non-GAAP R&D expenses | 7,274 | 5,394 | 6,926 | |
| Selling and marketing expenses | 6,666 | 3,405 | 5,260 | |
| Share-based compensation | (1,725) | (255) | (1,221) | |
| Non-GAAP selling and marketing expenses | 4,941 | 3,150 | 4,039 | |
| General and administrative expenses | 5,663 | 3,930 | 4,369 | |
| Share-based compensation | (1,532) | (213) | (854) | |
| Non-GAAP general and administrative expenses | 4,131 | 3,717 | 3,515 | |
| Operating income | 9,550 | 10,460 | 10,034 | |
| Share-based compensation | 4,313 | 981 | 3,223 | |
| Non-GAAP operating income | 13,863 | 11,441 | 13,257 | |
| Net income attributable to AutoNavi Holdings Limited shareholders | 8,805 | 9,577 | 8,933 | |
| Share-based compensation | 4,313 | 981 | 3,223 | |
| Non-GAAP net income attributable to AutoNavi Holdings Limited shareholders | 13,118 | 10,558 | 12,156 | |
| For the three months ended June 30, 2012 | ||||
| GAAP | Adjustments | Non-GAAP(a) | ||
| Diluted net income per ADS attributable to AutoNavi Holdings Limited shareholders | 0.17 | 0.09 | 0.26 | |
| (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 (after adjusting for the ADS to ordinary share ratio). | ||||