Linktone (NASDAQ:LTON)

FIRST QUARTER 2013 FINANCIAL Results

• Gross profit for the first quarter of 2013 was $3.7 million, 3% lower than fourth quarter 2012, while gross profit margin decreased to 32%.
• GAAP net loss increased to $3.8 million, or $0.09 per diluted ADS, in the first quarter of 2013, compared with GAAP net loss of $3.7 million, or $0.09 per diluted ADS, in the fourth quarter of 2012.

Discussing the results, Mr. Hary Tanoesoedibjo, Group Chief Executive Officer, said, "We are pleased to report first quarter revenue near the high end of our guidance range despite a mixed performance among our various service lines. While we continue to face long-term structural and regulatory challenges in our VAS products segment as a whole, we are encouraged by the positive performance in our VAS data-related services segment driven by JAVA-based product revenue generated through a new business partnership. Furthermore, we are pleased to see continued growth momentum in our mobile games unit Letang, resulting in a sequential increase in mobile game revenue. The development of our mobile games segment has been a key strategic focus over the past year, and we have made significant strides in the development and distribution of games through the Google Play^TM store."

"Growth in our data-related services and mobile games segments helped to partially mitigate the uneven performance from our media content, further justifying in our view the basis for our diversified, multi-platform and multi-territory media and entertainment strategy. With a healthy balance sheet, continued investment and development in our newer initiatives such as Fumubang.com, our online platform for parents, and in our e-commerce business in Singapore, Happybuys.com, we believe that we are well positioned to build a sustainable platform capable of delivering consistent growth in the year ahead."

SECOND QUARTER FISCAL 2013 OUTLOOK

For the second quarter ending June 30, 2013, Linktone anticipates gross revenues to be in the range of $10 million to $12 million. These forecasts reflect the Company's current and preliminary view, which is subject to change.

 

Fourth Quarter 2012 Results

• Gross revenues declined 3% from the third quarter of 2012 to $11.2 million in the fourth quarter of 2012. On a year-over-year basis, gross revenues decreased from $16.2 million in the fourth quarter of 2011.
• Gross profit for the fourth quarter of 2012 was $3.8 million, 12% lower than the previous quarter while gross profit margin decreased to 34%.
• GAAP net loss increased to $3.7 million, or negative $0.09 per diluted ADS, in the fourth quarter of 2012, compared with GAAP net income of $12.0 million, or $0.29 per diluted ADS, in the third quarter of 2012. This compared with a GAAP net income of$0.1 million, or $0.002 per diluted ADS, in the fourth quarter of 2011.
•  Non-GAAP Net Income per ADS (Diluted) was $0.00 vs. last years $0.15

Commenting on the results, Mr. Hary Tanoesoedibjo, Group Chief Executive Officer said, "Our revenue for the fourth quarter and full year was impacted by ongoing headwinds in certain of our end markets. Facing structural and regulatory hurdles in our VAS product segments, we focused our efforts throughout 2012 on executing our strategy of developing Linktone into a diversified, multi-platform and multi-territory media and entertainment business, while also investing our excess cash resources to maximize returns for our shareholders.

"We made significant progress in 2012 across our media and entertainment businesses. For example, we launched Fumubang.com, our online platform for parents, and the site is gaining good traction as we continue to expand our user base and fine tune our offering in order to enhance the joy of parenting for our users."

"At the same time, we launched our e-commerce business in Singapore, Happybuys.com, which, for a start, offers entertainment-related items such as books, CD's and videos. As is the case with Fumubang.com, we are working to collect and incorporate extensive customer feedback to create an optimal user experience."

"Additionally, our mobile games unit, Letang, gained increasing momentum in 2012, especially in its overseas business where we distribute self-developed and third party mobile games through the Google Play store."

"We have made significant progress toward our strategic goals to date, as demonstrated by the steady growth in our media content, mobile games, and social commerce revenue streams, which are augmented by our focused management of cash and investments. These areas constitute our long-term growth businesses, driven by ongoing investment, geographic diversification and product innovation."

FIRST QUARTER FISCAL 2013 OUTLOOK

For the first quarter ending March 31, 2013, Linktone anticipates gross revenues to be in the range of $10 million to $12 million. These forecasts reflect the Company's current and preliminary view, which is subject to change.

SINGAPORE, November 23, 2012 /PRNewsire/ -- Linktone Ltd. (NASDAQ: LTON), a provider of media and entertainment content and services in key strategic markets in Asia, today announced that its Board of Directors has authorized the repurchase of up to US$8 million worth of outstanding American Depositary Shares, or ADSs, over approximately the next 6 months, from time to time, in open-market purchases at prevailing market prices pursuant to a trading plan established under Rule 10b5-1 under the U.S. Securities Exchange Act of 1934, or the Exchange Act. The timing and extent of any purchases will be subject to the parameters specified in the Rule 10b5-1 trading plan and depend on a number of factors including the price and availability of the Company's ADSs. The trading plan may be suspended or discontinued at any time, without prior notice. In addition, repurchases will be made in accordance with Exchange Act Rule 10b-18, which sets certain restrictions on the method, timing, price and volume of open market stock repurchases. The Company will finance the repurchase with existing cash reserves and cash generated from operations.

Second Quarter 2012 Results

• On a year-over-year basis, revenue decreased from $14.0 million in the second quarter of 2011 to $12.1 million in the second quarter of 2012.
• GAAP net income more than doubled to $8.1 million, or $0.20 per diluted ADS, in the second quarter of 2012, compared with GAAP net income of $3.8 million, or $0.09 per diluted ADS, in the first quarter of 2012. This compared with a GAAP net loss of $0.3 million, or $0.01 per diluted ADS, in the second quarter of 2011.

"Linktone's second quarter performance underscores the importance of our ongoing efforts to diversify our business both geographically and through the strategic expansion of our service portfolio," said Hary Tanoesoedibjo, Group Chief Executive Officer. "Our second quarter gross revenues were in-line with guidance, despite soft sales in certain segments, and we reported strong bottom-line results supported by the continued execution of our multi-faceted growth strategy.

"Our acquisition of Okezone.com has provided an immediate and significant boost to our Indonesian operations. With approximately 25 million monthly unique visitors, Okezone.com is a popular source of news and general entertainment content and services for Indonesians in the country and residing abroad. The combination of our existing mobile value added content and service business and Okezone.com provides our Company with a solid platform for growth in the bourgeoning social commerce arena in Indonesia. We intend to continue developing these fundamental assets to support our pursuit of business opportunities in fast growing areas such as online and mobile social networking and E-retailing in this country of approximately 250 million.

Mr. Tanoesoedibjo concluded, "This recent acquisition has also enhanced our multi territory and multi-platform media distribution capabilities and enabled further development of our media content portfolio. The continued diversification of our service and content offering remains key to our long-term success as we work to build our business throughout the ASEAN region. With over $112 million in cash, cash equivalents and short-term available for sale investments, we believe that we are well positioned to carry out our growth strategy, meet our strategic and operational objectives and increase shareholder value."

THIRD QUARTER 2012 OUTLOOK

For the third quarter ending September 30, 2012, Linktone anticipates gross revenues to be in the range of $12 million to $14 million. These forecasts reflect the Company's current and preliminary view, which is subject to change.

SINGAPORE, July 5, 2012 /PRNewswire-Asia-FirstCall/ -- Linktone Ltd. (NASDAQ: LTON), a provider of media and entertainment content and services in key strategic markets in Asia, today announced the acquisition of Okezone.com (www.okezone.com), a Bahasa Indonesian online portal focused on delivering breaking news, as well as entertainment, information and video content. With a staff of over 100 reporters and editors, Okezone.com provides real-time coverage of major events. It has become Indonesia's third most popular news and entertainment website and is growing rapidly in markets such as Malaysia, Singapore, Saudi Arabia, Japan and the United States. Linktone acquired Okezone.com from PT Media Nusantara Citra Tbk ("MNC"), the Company's indirect majority shareholder.

In addition, Linktone completed the incorporation of PT InnoForm in Indonesia, which will focus on media content distribution services. PT Innoform, a variable interest entity ("VIE") controlled by a subsidiary of Linktone, will distribute a variety of media content throughout Indonesia, across all platforms including free and pay TV, online, home video and cinema. In addition, this VIE will facilitate distribution of MNC-owned content and pay TV channels to markets outside Indonesia.

First Quarter 2012 Results

• Revenues decreased 28.4% sequentially to $11.6 million in the first quarter of 2012, compared with $16.2 million in the fourth quarter of 2011.
• Net Income in the first quarter of 2012 was $3.8 million, or $0.092 per diluted ADS, compared with GAAP net income of $0.1 million, or $0.002 per diluted ADS, in the fourth quarter of 2011 and GAAP net income of $0.9 million, or $0.021 per diluted ADS, in the first quarter of 2011.

"We achieved first quarter gross revenues in line with our guidance, despite soft performance among our movie and children's edutainment titles in Singapore, and increasingly stringent restrictions on our data-related services business imposed by regulators in Indonesia," said Hary Tanoesoedibjo, Group Chief Executive Officer. "An improvement in our audio-related services business contributed to our gross revenues in the quarter, driven by an increase in interactive voice response revenue generated in China during the New Year holiday."

"Our underlying business is strong and the execution of our strategic growth initiatives remains on track. For our media content business, we continue to pursue partnerships with major international studios, and are also continuing to develop and expand relationships with independent studios in Asia, Europe and the Americas. We believe that this broader focus will accelerate the diversification of our content portfolio across platforms, genres and territories.

Moreover, our ongoing efforts to diversify beyond our traditional media and VAS businesses are expected to help broaden our revenue base throughout 2012. We believe our media content portfolio management strategy, coupled with the diversification of our distribution platforms, will help to make Linktone less susceptible to changing trends in consumers' media consumption habits and reduce the risk of quarter-to-quarter revenue volatility common among media businesses. As such, we believe we can achieve our second quarter revenue projections despite continued challenges on the regulatory front.

We remain steadfast in our efforts to transform Linktone from a VAS provider in China to a geographically diverse, social and multimedia entertainment content and service provider. We are capitalizing on the broad range of opportunities in new, high-growth sectors such as social media and networking, mobile gaming, online and mobile content distribution in fast-growing markets throughout the Southeast Asian region. We have a clear growth strategy and we believe that our strong balance sheet, with over $108 million in cash and cash equivalents and short-term available for sale investments, provides us with the resources needed to achieve our goals," concluded Mr. Tanoesoedibjo.

Fourth quarter and fiscal year

Gross Revenues decreased 2.4% sequentially to $16.2 million in the fourth quarter of 2011, compared with $16.6 million in the third quarter.

GAAP net income in the fourth quarter of 2011 was $0.1 million, or $0.002 per diluted ADS, compared with GAAP net income of$4.6 million, or $0.110 per diluted ADS, in the third quarter of 2011 and a GAAP net loss of ($1.4) million, or ($0.033) per diluted ADS, in the fourth quarter of 2010.Gross Profit $6 million GAAP Net Income/(Loss) per ADS (Diluted) $0.002

"Our focus through much of 2011 was on the continued expansion of our entertainment service portfolio and content distribution capabilities with the goal of positioning Linktone for sustainable, profitable growth in 2012 and over the longer-term. For the fourth quarter, revenue exceeded the high-end of our revenue projected in Q3 2011 by $1.2 million as we increased media content sales, continued to diversify our business geographically and reduced our dependence on wireless value-added services," said Hary Tanoesoedibjo, Group Chief Executive Officer. "In the fourth quarter, we grew media content revenue 56% over the third quarter and increased revenue contribution from this segment to 38% of total net revenues, from 23% in the third quarter. While our revenue base in 2012 will continue to be weighted toward WVAS, we are committed to diversifying Linktone's business and reducing revenue concentration over the longer-term through the pursuit of new growth opportunities and expansion of our presence in targeted, high growth businesses such as mobile gaming and media content distribution.

"Looking ahead, we will continue to focus on our strategic initiatives aimed at expanding Linktone's business, both in new territories and new areas of the broad multimedia marketplace. To this end, our InnoForm Group subsidiary was recently appointed as the exclusive video content distributor for our controlling shareholder PT Media Nusantara Citra Tbk ("MNC Group"), and will distribute MNC Group content including individual programs, series and television channels in targeted regions. We see great potential in this model, and are in the process of establishing an entity, which will distribute MNC-owned content and pay TV channels to markets outside Indonesia, and sell third-party content to both MNC Group and other media companies in Indonesia. MNC Group is, by far, Indonesia's largest media conglomerate, and this partnership will significantly reduce the barriers to entry for Linktone, while giving the Company a considerable competitive advantage as we establish this business in the Indonesian market. As we continue to diversify our traditional media capabilities, we are actively capturing growth opportunities within the online and mobile media segments, creating a comprehensive suite of multi-genre media distribution services for media platform owners, advertisers and potential corporate partners."

Mr. Tanoesoedibjo concluded, "Execution against our key growth initiatives remains on track, and we expect that 2012 will be a year of important progress for Linktone. We are continuing to expand our geographic reach, our content portfolio and our media distribution capabilities through organic growth and targeted investment opportunities. We are confident that through this strategy, we can further transform Linktone into a geographically diverse, multi-platform provider of multimedia content and services that span music, video, gaming and social media."

FIRST QUARTER 2012 OUTLOOK

For the first quarter ending March 31, 2012, Linktone anticipates gross revenues to be in the range of $11 million to $13 million.

Third Quarter 2011 Results

Gross Revenues increased 18% sequentially to $16.6 million for the third quarter of 2011.

Non-GAAP EPS for third quarter 2011 was $0.11 vs $0.02 in 2010

"Looking at our media content strategy, we remain keenly focused on our goal of bringing consumers the content they want, when, where, and how they want it. We continue to expand the type and genre of content we offer and to diversify our distribution capabilities, allowing us to reach consumers in the home, at the theater and on connected devices including computers, tablets and mobile handsets. In order to broaden our portfolio of media assets and distribution channels, we are exploring expansion in Vietnam and entry into additional geographies, including Indonesia."

Mr. Tanoesoedibjo concluded, "We expect further policy tightening among telecom network operators in the PRC and Indonesia. However, we are confident that our diversification strategy is sound and that we are taking the right steps to reduce our exposure to such carrier-imposed constraints. Linktone operates in a dynamic, fast-growing region with tremendous upside potential. We are well capitalized to achieve our near- and longer-term strategic objectives, and believe that we have the right combination of strategy, resources and most importantly, people, to reach the next level of growth."

SHARE REPURCHASE ACTIVITY

Linktone purchased shares on the open market under the Company's previously announced buyback program. During the third quarter, the Company purchased approximately 47,800 ADSs at an average price of $0.92 per ADS.

FOURTH QUARTER 2011 OUTLOOK

For the fourth quarter ending December 31, 2011, Linktone anticipates gross revenues to be in the range of $13 million to $15 million as a result of seasonality in the Company's VAS business in China, which typically sees a reduction in subscriber usage during the fourth quarter.

UNAUDITED RESULTS FOR THE SECOND QUARTER 2011

 

 

• Gross revenues for the second quarter 2011 were $14 million vs $16.9 in 2010
• Non GAAP Net Income/(loss) per ADS for the second quarter 2011 was ($0.01) vs $0.00 in 2010

"Our second quarter gross revenues were in line with our previous guidance, despite continued pressure in our data-related services business," said Hary Tanoesoedibjo, Group Chief Executive Officer. "Our overall business in China remains stable, and we are encouraged by the growth we are seeing in the data-related services business in our Indonesia operations. For these reasons, we believe that we are likely to achieve our third quarter outlook of stable revenues even though we expect the telecom network operators in the PRC to continue their policy tightening. To help offset the instability within the PRC mobile market, we remain focused on diversifying our revenue base, enhancing our product offering, and expanding our geographic footprint in strategically targeted locations throughout Asia."

Linktone also today announced that it plans to resume its American Depositary Share (ADS) repurchase program, approved by its Board of Directors in August 2006. Based on purchases made following the 2006 authorization, the Company has approximately $10 million remaining under this repurchase program. Linktone intends to purchase up to $5 million of ADSs over the next 180 days, with additional purchases to be considered after that time.

The Company plans to purchase ADSs from time to time on the open market. The share repurchase program does not obligate Linktone to purchase any specific amount of its ADSs and may be suspended or extended at any time at the Company's discretion. The share repurchase program will be implemented and executed in compliance with all relevant laws, rules and requirements relating to the repurchase by the Company of its own shares. This program will be funded from the Company's available cash and operating cash flow.

THIRD QUARTER 2011 OUTLOOK

• For the third quarter ending September 30, 2011, Linktone anticipates gross revenues to be in the range of $12 million to $14 million, including revenues from its VAS services, distribution of licensed products and other services.

We believe that current cash and cash equivalents will be sufficient to meet anticipated working capital (net cash used in operating activities) commitments and capital expenditures in the foreseeable future. We may, however, require additional cash resources due to changed business conditions or other future developments, including any investments or acquisitions we may decide to pursue

First Quarter Results:

• Gross Revenue: $13.9m vs. $19.0m the year prior
• Non GAAP Net Income: $0.9m vs. $0.2
• Non GAAP Earnings per ADS (diluted) $0.02 vs. $0.00

"We have effectively transitioned Linktone from being solely a mobile value-added content and service provider in the PRC, to a diversified media and entertainment company operating in multiple markets. While our first quarter revenue fell below expectations based largely on weaker than anticipated data-related services due to ongoing policy tightening and other changes at the telecom network operators in the PRC, we continued to shift our product mix beyond data and audio-related services, which accounted for 66% of revenue in the 2011 first quarter, compared with 98% of revenue in the same period in 2010," said Group Chief Executive Officer Hary Tanoesoedibjo. "To further offset the instability within the PRC's mobile market, we remain focused on our strategy to diversify our revenue base and enter new markets to expand our geographic reach. To this end, we continue to seek opportunities to broaden our portfolio of products and services and increase our presence in strategically targeted locations throughout Asia.

For the second quarter ending June 30, 2011, Linktone anticipates gross revenues to be in the range of $12 million to $14 million, including revenue from its VAS services, distribution of licensed products and other services.

Fourth Quarter Results:

Rev: $16.1 vs. $15.4 the year before.

Non-GAAP Net Income/Loss per ADS Diluted: $0.00 vs. ($0.05) the year before.

"2010 was a year of strategic transformation for our company. Through the acquisitions of controlling interests in Letang Game, Limited, InnoForm Media Pte Ltd and PT Linktone Indonesia, we have made significant progress in three key areas - diversifying our products, our customer base and our geographic reach," said Chief Executive Officer Hary Tanoesoedibjo. "Our product portfolio now includes considerably enhanced video and audio content with a focus on the entertainment and edutainment genres, enabling us to address a broader constituency among mobile gamers, wireless device consumers, Free To Air and Pay TV audiences, movie goers and netizens.

For the first quarter ending March 31, 2011, Linktone anticipates gross revenues to be in the range of $16.0 million to $17.0 million including revenue from its value added services, distribution of owned and licensed products and other services.