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VisionChina Media Inc (VISN)
Q3 2011 Earnings Call
November 14, 2011 8:00 PM ET
Colin Wang – Director, IR
Limin Li – Chairman and CEO
Stanley Wang – VP, Finance
Wei Fang – CLSA
Steve Zhang – Macquarie Company
Ann Jie – Cowen & Co
Chunming Zhao – SIG
Dick Wei – JPMorgan
Previous Statements by VISN
» VisionChina Media CEO Discusses Q2 2011 Results - Earnings Call Transcript
» VisionChina Media's CEO Discusses Q1 2011 Results - Earnings Call Transcript
» VisionChina Media CEO Discusses Q4 2010 Results - Earnings Call Transcript
Hello everyone and welcome to VisionChina Media’s third quarter 2011 earnings conference call. The company’s third quarter earnings results were released earlier today and are available on company’s IR website at www.visionchina.cn as well as on newswire services. Today you’ll hear from our Chairman and Chief Executive Officer, Mr. Limin Li, who will talk about industry company’s strategy and business operations, and Mr. Stanley Wang, our Vice President of Finance who will take you through our financials and key operational metrics. After their prepared remarks, Mr. Li and Mr. Wang will be available for your questions.
Please note that today’s discussion will contain forward-looking statements made under 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 the 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.
[Interpreted] Thank you, Colin. Hello everyone, and thank for joining us today. We’re thrilled by the growth momentum of the successful second quarter. Within VisionChina Media once again delivered strong results in the third quarter of 2011 with revenues meeting company’s guidance and breaking our record for revenue generated in a single quarter.
Total revenues in the third quarter of 2011 were $50.2 million, a 32.4% increase year-over-year and an 11.6% increase quarter-over-quarter. Additionally in the third quarter, we realized non-GAAP profitability of $3.7 million. Moreover it is worth mentioning that without any major pricing fluctuations VisionChina Media’s utilization rate during the third quarter surpassed our historical peak of the same period in 2008 with a record high of 10.64 minutes per broadcast hour.
This 59% year-over-year increase and 23% quarter-over-quarter increase in utilization demonstrates that VisionChina Media’s nationwide out-of-home digital mobile television network with proven reach, recall and conversion rate is gaining more and more recognition and acceptance among advertisers in China.
In terms of media network development, we have begun to see the results of a strategic year on media platform restart optimization initiatives. Capital resource management and effective negotiations have resulted in the restructuring of contractors with several partners, radio and broadcasting bureaus, and subway and bus companies. The result has been the successful lowering of the media cost of our network. Optimization of our media network means that every minute of advertising sold now generates gross profit guaranteeing the achievements of pre-determined annual target.
In addition, our strong market position and nationwide sales network is driving deeper penetration into tier-three and tier-four cities to support clients’ product promotion and sales in those regions. Thus far, we have obtained digital mobile television concession rates in more than 15 tier-three and tier-four cities in regions allowing us to better serve our clients needs and solidify our market leading position across the country.
As an update on our strategic partnership with CCTV, in relation to the Annual Advertising Auctions for 2012. And these 10 new national brands have engaged with a company to discuss the VisionChina’s CCTV value proposition. Additionally, more satellite TV stations and third-party researches have increased interactions with VisionChina Media through content, partnership and research studies as a directed growth [ph] of our relationship with CCTV.
Our expanding cost ratio with these institutions has helped advertisers better understand the company nature of VisionChina Media’s real-time content driven platform to traditional television. According to 2010, China Market and Media Study, CMMS 2010 implemented effective reach of integrated advertising spending for clients advertising in a bundle that combines VisionChina Media and traditional TV platforms increased by a range of 11.3% to 36.7% compared to advertising only on traditional TV.
We believe this type of external communication incorporation will continue to give greater recognition of our platform in our traditional television sector furthering revenue growth opportunities. According to the published Framing Structure, Channel Coding and Modulation for Digital Television through registered broadcasting system issued by the China National Standing Committee on August 18, 2007.
VisionChina Media’s self-developed next generation set-top box includes new penetrative [ph] features such as auto-controlled volume that adjusts in accordance to external noise levels and will be letting to use in the overall national standard conversion, greatly enhancing audience experiences and effective reach of advertising.