TMI blowout earnings, float 650K:
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China MediaExpress Holdings, Inc. Announces 2009 Third Quarter Financial Results
Third Quarter Net Income Rose 83% on 65% Increase on Net Revenues
FUJIAN, China--(BUSINESS WIRE)--China MediaExpress Holdings, Inc. (NYSE Amex: TMI; TMI/U; TMI/WS), China’s largest television advertising operator on inter-city express buses, today announced the financial results of the Hong Kong Mandefu Holdings Limited (“CME” or “Company”) for the three and nine months period ended September 30, 2009.
Financial Highlights – Third Quarter 2009 vs. Third Quarter 2008
Net revenues increased 65% to $26.1 million in the 2009 period compared to $15.8 million;
Gross margin for the 2009 period was 67% of net revenues;
Operating income increased 83% to $15.5 million in 2009 compared to $8.5 million; and,
Net income increased 83% to $11.7 million compared to $6.4 million.
Financial Highlights – Nine Months 2009 vs. Nine Months 2008
Net revenues increased 38% to $64.0 million in the 2009 period compared to $46.2 million;
Gross margin for the 2009 period was 64% of net revenues;
Operating income increased 45% to $37.2 million in 2009 compared to $25.6 million;
Net income increased 43% to $27.4 million compared to $19.2 million; and,
As of September 30, 2009, the Company had $40.9 million in cash and cash equivalents with no debt.
Zheng Cheng, CME’s Founder and CEO, commented, “2009 has been a year of transformation as CME became a public company. We have taken several steps to further strengthen our position as the market leader in the express bus advertising industry in China and to take advantage of new opportunities ahead. We are well positioned to capitalize in the rapid increase of the advertising spending, as China is the second largest advertising market in Asia, and one of the largest and fastest growing markets in the world. We have placed our Company in several large Chinese markets, including the five municipalities of Beijing, Shanghai, Guangzhou, Tianjin and Chongqing. Third quarter and nine month results are an indication that our efforts have been successful. Our net revenue and net income for the first nine months of 2009 have already exceeded net revenues and net income for full year 2008.”
Mr. Cheng added, “We continue to expand our operations, both in the areas where we have a strong presence and in new areas as well. As of today, our network includes 46 bus operator partners, up from 40 in mid-September, with whom we have entered agreements for terms ranging from five to eight years. The total number of buses equipped with our television systems is now over 20,000, increasing approximately by 2,000 buses since mid-September. In the fourth quarter, we plan to further expand our geographic coverage through the signing of several new agreements with the new bus operators. Our network now covers the municipality of Guangzhou, China’s third largest city, after Beijing and Shanghai and also the province of Shanxi.”
Mr. Cheng continued, “Our platform has attracted numerous well-known international and national brands to our advertising network. More than 500 advertisers have purchased advertising time on our network either through advertising agents or directly from us. Our clientele includes local brand names as well as those well-known international and national brands such as Coca Cola, Pepsi, Siemens, Hitachi, China Telecom, China Mobile, China Post, Toyota, Bank of China and China Pacific Life Insurance.
“In addition to accelerating our top line growth, we are also working to improve of our profit margins. In that regard, we have increased our sales force to 65 people to focus on direct advertising clients, where we enjoy a better margin compared to clients signed through advertising agencies. At the end of 2008, direct clients accounted for only 2% of our net revenues. For the first nine months of 2009 direct clients represented 16% of our net revenues from those advertising timeslot. We expect this percentage to reach 20% by year-end and approximately 40% by the end of 2010.
“In the third quarter, we also started to broadcast the embedded advertisements which are displayed during the broadcasting of the content and this definitely brings a new source of revenue to our current platform.”
Jacky Lam, CME’s Chief Financial Officer stated, “CME generated $29.9 million of cash from operating activities in the first nine months of 2009. Our balance sheet remains very strong and as of September 30, 2009, we had $40.9 million of cash with no debt.”
Mr. Cheng concluded, “Historically, our fourth quarter is seasonally our best quarter. It appears that the 2009 fourth quarter will be no exception.”
Institutional Investor Meetings
The management CME will hold meetings with current and prospective institutional investors during the first week of December. Accredited investors may request a meeting with management by contacting: Lena Cati of The Equity Group at 212-836-9611 or lcati@equityny.com.
