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VisionChina Media Inc. (VISN)
Q4 2010 Earnings Conference Call
March 3, 2011 8:00 PM EST
Colin Wang – IR Director
Limin Li – Chairman and CEO
Stanley Wang – VP of Finance
Philip Wan – Morgan Stanley
Dick Wei – JPMorgan
Chenyi Lu – Cowen & Company
Eddie Leung – Bank of America Merrill Lynch
Steve Zhang – Macquarie
Good day, ladies and gentlemen, and welcome to the fourth quarter 2010 VisionChina Media earnings conference call.
My name is Jonathan and I will be your operator for today.
Previous Statements by VISN
» VisionChina Media CEO Discusses Q3 2010 Results – Earnings Call Transcript
» VisionChina Media Inc. Q2 2010 Earnings Call Transcript
» VisionChina Media Inc. Q1 2010 Earnings Call Transcript
I’d now like to hand the call off to Mr. Colin Wang, Investor Relations Director. Please proceed, sir.
Hello everyone and welcome to VisionChina Media’s fourth quarter and full-year 2010 earnings conference call. The company’s fourth quarter earnings results were released earlier today and are available on the company’s IR website at www.visionchina.cn as well as on Newswire services.
Today you will hear from our Chairman and Chief Executive Officer, Mr. Limin Li, who will talk about our industry, our company’s strategy and business operations; and Mr. Stanley Wang, our Vice President of Finance, who will take you through our financials and key operating metrics. Mr. Li and Mr. Wang will answer questions after their prepared remarks.
Please note that today’s discussion will contain forward-looking statements made under the Safe Harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, our future results may be materially different from the views expressed today.
Further information regarding these and other risks and uncertainties is included in our Annual Report on Form 20-F and other documents filed with the U.S. Securities and Exchange Commission. VisionChina Media does not assume any obligation to update any forward-looking statements except as required under applicable law.
As a reminder, this conference is being recorded. In addition, a webcast of this conference call will be available on VisionChina Media’s Investor Relations website at www.visionchina.cn.
I will now turn the call over to our CEO, Mr. Li.
Hello everyone and thank you for joining us today.
I will first like to take a moment to express my gratitude to everyone on the call today for the continuous support of VisionChina Media.
2010 got us to a rough start for us. The first quarter was difficult and mainly due to the DMG acquisition and integration process, as well as the resulting cost increase. However, with determination, dedication and tremendous effort by our management team, we quickly overcame that difficult period and start significant increases in key operating and financial metrics for the next few quarters.
As you saw in our press release issued earlier today, I am pleased to announce that we saw record revenue in the fourth quarter of 2010 of $44.9 million, beating the high end of our guidance. In the fourth quarter of 2010, we also realized a sequential revenue increase of 18.4% over the third quarter of 2010 and a year-over-year increase of 41.4% over the fourth quarter of 2009. Non-GAAP net income reached $4.5 million, exceeding the top line of our guidance by 28.6%. Total revenue in 2010 reached $138.1 million, a 14.4% increase over last fiscal year.
According to recent independent research from Analysis International, VisionChina’s market share of China’s digital mobile wireless transmission broadcasting terminals is a remarkable 81.6% and our market share of Metro TV terminals is close to 100%.
In terms of media network expansion, we recently won the bid for Shenzhen's subway company's contract to exclusively operate on line 1, line 2, and line 5 of Shenzhen's subway system over the next five years, significantly improving our subway media network coverage in Shenzhen, one of China’s four Tier 1 cities, and demonstrating our leading position in the subway digital mobile TV network. As a result of a recent negotiations with the net new lines for Shenzhen, our average media cost per line was effectively lowered.
Towards the end of 2010, VisionChina began actively renegotiating with TV bureau and subway operating companies in different cities and provinces around our network, seeing reduction to our media costs. Due to our solid relations with these companies and our demonstrated dominance in the industry, we have made significant strides in cost control in several cities by restructuring our cooperation model. Our different local partners were largely very cooperative with these efforts. Going forward, we will continue to work with our local operating partners to further allow our media costs and have set a goal to reduce our full-year media costs in 2011 by no less $10 million compared to what we have previously expected to pay.
In 2010, the Shanghai WorldExpo and the Guangzhou Asian Games highlighted VisionChina’s advantage as the only outdoor extension of traditional TV. During the Shanghai WorldExpo and the Guangzhou Asian Games, utilization rate of the subway digital mobile TV platforms reached 70% and 100% respectively in those cities, demonstrating advertisers' and audiences’ recognition of the dissemination power and advertising value of our media platform.
Since the signing of a Memorandum of Understanding of strategic partnership with CCTV in the second half of 2010, we have begun to see the benefits of this partnership and our media platform has been highly recommended by CCTV at various locations. One important result is that we have come into full and direct contact with CCTV’s massive client base. Of the 40 winners of the several programs that were signed to us during the CCTV Annual Advertising Resources Public Bidding, 11 have already begun trial advertising placements with us. We are encouraged by these early results and believe this partnership will further expedite the expansion of our customer base.