SINA Reports Its First Profitable Quarter and Announces
Results for the Six-month Period Ended December 31, 2002
Reports
Record GAAP Net Income for the Quarter of $1.5 Million and Gross Margin of 65%
BEIJING
& SAN MATEO, Calif.--(BUSINESS WIRE)--Jan. 27, 2003-- SINA Corporation
(Nasdaq:SINA - News), a leading online media
company and value-added information service provider for China and for global
Chinese communities, today announced its financial results for the quarter and
six-month period ended December 31, 2002.
Financial Highlights:
Business Results
For the quarter ended December 31, 2002, SINA reported
record net revenues of $12.9 million, an increase of 24% from the previous
quarter and an increase of 90% from the same period of the previous year. Gross
margin improved to a record 65%, up from 61% for the previous quarter.
On a GAAP (Generally Accepted Accounting Principles) basis,
SINA recorded its first profitable quarter with net income totaling $1.5
million, representing an improvement of $2.1 million from a net loss of $0.6
million for the previous quarter and an increase of $6.4 million from a net
loss of $4.9 million for the same period of the previous year. Diluted net
income per share was $0.03 for the quarter, compared to diluted net loss per
share of $0.01 for the previous quarter and diluted net loss per share of $0.11
for the same period of the previous year.
On a pro forma basis, net income for the quarter totaled
$1.8 million, compared to net income of $0.2 million for the previous quarter
and a net loss of $2.3 million for the same period of the previous year.
Diluted net income per share, on a pro forma basis, was $0.04 for the quarter,
compared to diluted net income per share of $0.01 for the previous quarter and
diluted net loss per share of $0.05 for the same period of the previous year.
Pro forma net income or loss excludes non-cash charges for amortization of
intangibles, stock-based compensation and gains or losses from equity
investments.
For the six-month period ended December 31, 2002, SINA
reported record net revenues of $23.2 million, an increase of 81% from the same
period of the previous year. Non-advertising revenues reached $9.3 million for
the six-month period, an increase of 265% over the same period of the previous
year. Gross margin improved to 63% compared to 48% for the same period of the
previous year.
On a GAAP basis, SINA recorded net income of $0.9 million
for the six-month period ended December 31, 2002, an increase of $11.1 million
from a net loss of $10.2 million for the same period of the previous year.
Diluted net income per share for the six-month period ended December 31, 2002,
on a GAAP basis, was $0.02, compared to diluted net loss per share of $0.24 for
the same period of the previous year.
On a pro forma basis, net income for the six-month period
ended December 31, 2002 totaled $2.1 million, compared to a net loss of $5.1
million for the same period of the previous year. Diluted net income per share,
on a pro forma basis for the six-month period ended December 31, 2002, was
$0.05, compared to diluted net loss per share of $0.12 for the same period of
the previous year. Pro forma net income or loss excludes non-cash charges for
amortization of intangibles, stock-based compensation and gains or losses from
equity investments.
As of December 31, 2002, SINA's cash, cash equivalents and
investments in marketable securities totaled $96.5 million, an increase of $3.4
million from six months ago.
"In less than a year we have successfully executed our
strategy of expanding our business plan and moving SINA from a dominant portal
to a leading online/mobile media company with multiple inter-dependent business
lines," said Daniel Mao, CEO of SINA Corporation. "Throughout 2002,
we experienced accelerated growth in our media businesses and in our newest
business segments of short messaging and enterprise services. With our recent
strategic initiatives in online game and mobile services, we are in a strong
position to continue to deliver profitable, sustainable growth in 2003 and in
the upcoming years."
During the quarter, SINA's advertising revenues reached $7.4
million, representing a 44% growth year-over-year and a 14 % growth compared to
the September quarter.
"SINA continues to maintain its dominance in online
media with leading market share," said Wang Yan, President of SINA.
"During the quarter, we have seen an increase in advertising commitments
as well as new accounts in both our domestic and international client base.
Additionally, during the quarter, as a reflection of their confidence in SINA's
brand and industry leadership, two of our Global 500 clients, Nike and
Motorola, have upgraded their commercial relationships with SINA into a
multi-year partnership making SINA an anchor for their China online and mobile
business strategies."
During the quarter, SINA's non-advertising revenues reached
a record $5.5 million, representing a 234% growth year-over-year and a 42%
growth compared to the September quarter. This impressive result was primarily
driven by the growth of SINA's wireless short messaging service (SMS) and
SINA.net enterprise services, both of which are growing at much faster rates
relative to advertising.
"Our non-advertising revenue continued to surge during
the quarter, as more and more of our users adopted our fee based services such
as mobile and email services," said Charles Chao, CFO of SINA. "Our
non-advertising revenue now constitutes 43% of our total revenue, demonstrating
SINA's migration toward a business model that includes revenue streams from
multiple business lines."
Key Developments
In addition to reporting record profitability and revenue
for the quarter ended December 31, 2002, SINA also reported the completion of
several key achievements during and after the quarter including signing the
definitive agreement for acquisition of Memestar, a leading independent
value-added mobile service provider; signing the definitive agreement for a
joint venture with NCsoft to operate and market Lineage, Asia's most popular
online game; and forming strategic partnerships with two global 500 companies,
Nike and Motorola.
"We will continue to expand our businesses organically
and by leveraging our strong balance sheet and our brand and platform to seek
out new opportunities for growth," said Daniel Mao. "We believe that
the acquisition of Memestar and the formation of a joint venture with NCsoft
have set the foundation for our growth in the new year, and we will continue to
use investments and acquisitions as a part of our strategy to achieve higher
growth and to make entries into emerging businesses within our market."