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
- 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.
- 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.
- 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 |
|
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). |
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