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Press release from PR Newswire

Focus Media Reports Third Quarter 2012 Results

Tuesday, November 27, 2012

Focus Media Reports Third Quarter 2012 Results16:30 EST Tuesday, November 27, 2012SHANGHAI, Nov. 27, 2012 /PRNewswire/ -- Focus Media Holding Limited (Nasdaq: FMCN) today announced its unaudited financial results for the third quarter ended September 30, 2012. Highlights for Third Quarter 2012:Total net revenue for the third quarter of 2012 was $256.3 million, of which aggregate net revenues from the LCD display network, in-store network, poster frame network and movie theater network was $247.7 million, which exceeded by approximately 2% the mid-point of the Company's guidance range of $241-$243 million.  This represented a year-on-year increase of 26% from $196.1 million for the third quarter of 2011 and a quarter-on-quarter increase of 13% from $219.3 million for the second quarter of 2012; net revenue from the traditional outdoor billboard network for the third quarter of 2012 was $8.6 million, below the guidance of $13-$14 million which was primarily due to classification of the revenues of a number of subsidiaries into "Net income from discontinued operations".   Due to medium term advertising spending uncertainties and the continued view of the Company that the traditional outdoor billboard network is not a core business segment, the Company has decided to downsize this business segment by divesting of four entities within the segment. Two of which have been divested prior to end of this third quarter while the remaining two are expected to be completed before the end of 2012. Consequently, the revenues of these four entities are reclassified into "Net income from discontinued operations" in statements of income.GAAP net income attributable to Focus Media for the third quarter of 2012 was $64.6 million, representing a year-on-year increase of 4% from $62.2 million for the third quarter of 2011 and a quarter-on-quarter increase of 10% from $58.9 million for the second quarter of 2012.     Non-GAAP net income attributable to Focus Media was $94.6 million, exceeding the mid-point of the Company's guidance range of $92-$94 million by 2%, and representing a year-on-year increase of 14% from non-GAAP net income attributable to Focus Media of $82.7 million for the third quarter of 2011 and a quarter-on-quarter increase of 16% from non-GAAP net income attributable to Focus Media of $81.9 million for the second quarter of 2012.  Please see the below sections on "Use of Non-GAAP Financial Measures" and "Reconciliation of GAAP to non-GAAP" for more information about the non-GAAP measures referred to within this announcement. GAAP net income attributable to Focus Media per fully diluted ADS was $0.48, representing a year-on-year increase of 9% from $0.44 per fully diluted ADS for the third quarter of 2011 and a quarter-on-quarter increase of 9% from $0.44 per fully diluted ADS for the second quarter of 2012. Non-GAAP net income attributable to Focus Media per fully diluted ADS was $0.71, representing a year-on year increase of 20% from $0.59 per fully diluted ADS for the third quarter of 2011 and a quarter-on-quarter increase of 15% from $0.62 per fully diluted ADS for the second quarter of 2012.Highlights for Balance Sheet and Cash Flow Results of Third Quarter 2012:Cash, cash equivalents, restricted cash and short-term investments were $901.1 million as of September 30, 2012, as compared to $856.9 million as of June 30, 2012.  Restricted cash is deposited in bank accounts as security for bank borrowings. These deposits earn fixed interest rates and are released when the related bank borrowings are settled by the Company.  Restricted cash was $198.0 million as of September 30, 2012, as compared to $206.1 million as of June 30, 2012, and was comprised of current restricted cash of $99.0 million and non-current restricted cash of $99.0 million.   Short-term investments, consisting of longer term dated cash deposits that earn higher interest rates as compared to cash and cash equivalent, were $211.2 million as of September 30, 2012 as compared to $211.4 million as of June 30, 2012. Bank loans were $200.0 million inclusive of short-term bank loans of $100.0 million and long-term bank loans of $100.0 million as of September 30, 2012, as compared to bank loans of $207.5 million as of June 30, 2012, which were used to finance the Company's share repurchases and dividend payouts.  Operationally, as the Company generates cash inflow in Renminbi onshore, offshore bank loans are used to increase our offshore USD base cash resources mainly for future dividend payouts or share repurchases.   The entire bank loan facility was extended based on an equivalent Renminbi onshore cash deposit, which was deposited as restricted cash. Net accounts receivable for the LCD display network, in-store network, poster frame network and movie theater network was $284.1 million as of September 30, 2012, an increase of 19% from $238.4 million as of June 30, 2012 due to sequential growth of revenues.  Days sales outstanding was 92 days in the third quarter of 2012, similar to 91 days for the second quarter of 2012. Net cash inflow from operating activities in the third quarter of 2012 was $77.9 million, representing year-on-year decline of 10% from $86.3 million for the third quarter of 2011 and a quarter-on-quarter decline of 16% from $93.1 million for the second quarter of 2012.  The decline was mainly due to the slower cash collection particularly in the LCD display network in the third quarter of 2012 as compared to the third quarter of 2011 and the second quarter of 2012.  Despite slightly slower cash collection, the Company believes that overall accounts receivable remain healthy and has provided adequately for potential bad debt. Net cash inflow from operating activities for the third quarter of 2012, after deducting the purchase of equipment and subsidiaries as well as net cash outflows derived from disposition of subsidiaries was $71.7 million, slightly decreasing by 2% from the $72.9 million for the third quarter of 2011 and a quarter-on-quarter contraction of 18% from $87.2 million for the second quarter of 2012 which was mainly to the decline of net cash inflow from operating activities. Capital expenditures were $5.0 million for the third quarter of 2012, mostly attributable to the deployment of next generation interactive screens in a few of tier-2 cities in the LCD display network. Cash paid for the acquisition of subsidiaries in the third quarter of 2012 was $0.6 million, which was mainly attributable to the LCD display network.Jason Jiang, Chairman and Chief Executive Officer of Focus Media said, "In the third quarter of 2012, we continue to see macroeconomic uncertainties impact on overall advertising spending in China despite we exceeded the previous guidance of the company. We expect similar trend to continue through the fourth quarter. Particularly the recent pressure on Japanese automotive sales in China also resulted in advertising budget cut-backs from a number of Japanese automotive labels. Despite near and possibly medium term pressure, we believe that our media platform remain strong and robust to weather these challenges."Kit Low, the Company's Chief Financial Officer added, "In the third quarter of 2012, the Company achieved aggregate net revenue year-on-year growth in our LCD display, poster frame business, in-store and movie theater network of 26%. GAAP net income attributable to Focus Media and Non-GAAP net income attributable to Focus Media for the third quarter of 2012 was $64.6 million and $94.6 million, respectively.  In the third quarter of 2012, the Company generated a net cash inflow from operating activities after deducting the purchases of equipment and subsidiaries as well as net cash outflows derived from disposition of subsidiaries of $71.7 million." Third Quarter 2012 financial resultsAdvertising net revenue from the LCD display network was $128.4 million for the third quarter of 2012, representing an increase of 6% from $120.6 million for the third quarter of 2011 and an increase of 5% from $122.1 million for the second quarter of 2012.  Advertising net revenue from the poster frame network was $81.6 million for the third quarter of 2012, representing an increase of 75% from $46.6 million for the third quarter of 2011 and an increase of 19% from $68.6 million for the second quarter of 2012. Advertising net revenue from the in-store network was $14.5 million for the third quarter of 2012, representing a decrease of 9% from $15.9 million for the third quarter of 2011 and an increase of 7% from $13.6 million for the second quarter of 2012.Advertising net revenue from the movie theater network was $23.2 million for the third quarter of 2012, representing an increase of 78% from $13.0 million for the third quarter of 2011 and an increase of 53% from $15.2 million for the second quarter of 2012 Advertising net revenue from the traditional outdoor billboard network was $8.6 million for the third quarter of 2012, representing a decrease of 30% from $12.2 million for the third quarter of 2011 and a decrease of 11% from $9.7 million for the second quarter of 2012.  Due to medium term advertising spending uncertainties and the continued view of the Company that the traditional outdoor billboard network is not a core business segment, the Company has decided to downsize this business segment by divesting of four entities within the segment.  Two of which have been divested prior to end of this third quarter while the remaining two are expected to be completed before the end of 2012.  Consequently, the revenues of these four entities have been reclassified into "Net income from discontinued operations" in statements of income during the period.  Therefore, $4.6 million revenues of these four entities were reclassified into "Net income from discontinued operations" in statements of income in the third quarter of 2012 and as a comparison, $2.4 million and $4.0 million revenues of these four entities were also reclassified respectively in the third quarter of 2011 and in the second quarter of 2012 in this press release. Non-GAAP gross profit from the LCD display network for the third quarter of 2012 was $99.8 million, slightly increasing from $99.5 million for the third quarter of 2011 and an increase of 3% from $96.7 million for the second quarter of 2012.    Non-GAAP gross profit from the poster frame network for the third quarter of 2012 was $52.5 million, more than doubling the $19.6 million for the third quarter of 2011 due to significant year-on-year growth of revenues, and representing an increase of 36% from $38.6 million for the second quarter of 2012. Non-GAAP gross profit from the in-store network for the third quarter of 2012 was $9.1 million, representing a decrease of 9% from $10.0 million for the third quarter of 2011 due to year-on-year decline of revenues and an increase of 10% from $8.3 million for the second quarter of 2012.Non-GAAP gross profit from the movie theater network for the third quarter of 2012 was $14.5 million, more than doubling both the $6.4 million for the third quarter of 2011 and the $6.6 million for the second quarter of 2012 which was due to robust revenue growth in the third quarter of 2012Non-GAAP gross loss from the traditional outdoor billboard network for the third quarter of 2012 was $0.4 million, as compared to non-GAAP gross profit of $2.0 million for the third quarter of 2011 and non-GAAP gross profit of $0.6 million for the second quarter of 2012.  The decrease in non-GAAP gross profit was mainly due to higher fixed costs associated with the expansion of the traditional outdoor billboard network areas around intercity high-speed rail lines dragged down the overall gross profit margin of this segment during the quarter.Non-GAAP operating expenses for the third quarter of 2012 was $57.5 million, an increase of 23% from $46.6 million for the third quarter of 2011, which was attributable to an increase in selling and marketing expenses from year-on-year revenue growth and professional fee increase in general and administrative expenses. It also represented a decrease of 14% from $66.7 million for the second quarter of 2012 Net cash inflow from operating activities in the third quarter of 2012 was $77.9 million, representing year-on-year decline of 10% from $86.3 million for the third quarter of 2011 and a quarter-on-quarter decline of 16% from $93.1 million for the second quarter of 2012.  The decline was mainly due to the slower cash collection particularly in the LCD display network in the third quarter of 2012 as compared to the third quarter of 2011 and the second quarter of 2012.  Despite slightly slower collection, the Company continues to monitor account receivables very closely, and believes that overall accounts receivable remain healthy and has provided adequately for potential bad debt.Net cash provided by investing activities for the third quarter of 2012 was $0.9 million.  In the third quarter of 2012, the Company incurred capital expenditures of $5.0 million and subsidiary acquisition payments of $0.6 million.  Meanwhile, the Company incurred net cash inflows from net investment in short-term investments and deposits in restricted cash of $7.2 million during the quarter. Short-term investments are longer term dated cash deposits normally with maturities between three and twelve months that earn higher interest rates as compared to cash and cash equivalents.  Restricted cash is deposited in bank accounts as security for bank borrowings.Net cash used by financing activities for the third quarter of 2012 was $24.9 million.  In the third quarter of 2012, the Company repaid bank loans of $7.5 million.  Meanwhile, the Company paid $17.4 million for the dividend payout for the second quarter of 2012.Cash and cash equivalents in held-for-sale assets as of September 30, 2012 was $1.0 million.Operating Data SummaryThe Company is providing a breakdown of operating data as follows:1) The approximate number of displays in the LCD display network was as follows:As of September 30, 2012As of June 30, 2012LCD screens 136,870135,001LCD 2.0 digital picture screens 35,53535,112Total for LCD display network (note)172,405170,113Note:  LCD screens have excluded LCD 1.0 picture frame devices since the fourth quarter of 2011.  The increase in the total number of LCD screens and LCD 2.0 digital picture screens as of September 30, 2012 as compared to that as of June 30, 2012 was due to organic network expansion.  Of the total LCD screens of 136,870 as of September 30, 2012, 9,589 screens were operated through our regional distributors as compared to 9,734 screens as of June 30, 2012.2) The approximate number of devices in the poster frame network was as follows:As of September 30, 2012As of June 30, 2012Frame 1.0 picture frames (note)497,269484,145Frame 2.0 digital picture screens 35,89235,616Total 533,161519,761Note: Frame 1.0 picture frames have included LCD 1.0 picture frame devices since the fourth quarter of 2011. The increase in the total number of Frame 1.0 picture frames as of September 30, 2012 as compared to that as of June 30, 2012 was due to organic network expansion.3) The total number of displays installed in our in-store network was approximately 53,239 as of September 30, 2012, as compared to 51,995 as of June 30, 2012.  The increase was due to organic network expansion.4) The number of movie screens on which the Company had the right to lease advertising time as of September 30, 2012 was approximately 2,470, as compared to 2,320 as of June 30, 2012.  The increase was due to organic network expansion.Business Outlook for Fourth Quarter 2012The Company provides the following guidance with respect to the quarter ending December 31, 2012:Net revenues for the core business (inclusive of the LCD display network, the in-store network, the poster frame network and the movie theater network) are expected to be in the range of $237-$246 million, the mid-point of which would represent year-on-year growth of 1% and quarter on quarter decline of 3%.  Net revenues for the non-core business (the traditional outdoor billboard network) are expected to be in the range of $6-$7 million.  The Company's non-GAAP net income is expected to be in the range of $93-$98 million.  The Company estimates the weighted average fully diluted ADS count for the quarter at 133.2 million.Announced Receipt of "Going Private" ProposalAs previously announced on August 13, 2012, the Company's Board of Directors received a preliminary non-binding proposal letter, dated August 12, 2012, from affiliates of The Carlyle Group , FountainVest Partners, CITIC Capital Partners, CDH Investments, China Everbright Limited and Mr. Jason Nanchun Jiang, Chairman of the Board and Chief Executive Officer of Focus Media (together, the "Consortium Members"), that proposes a "going-private" transaction (the "Transaction") for $27.00 in cash per American depositary share, or $5.40 in cash per ordinary share. The committee of independent directors formed by the board to consider the proposal (the "Independent Committee") is continuing to consider the proposed transaction.  No decisions have been made by the Independent Committee with respect to the Company's response to the Transaction. There can be no assurance that any definitive offer will be made, that any agreement will be executed or that this or any other transaction will be approved or consummated. The Company does not undertake any obligation to provide any updates with respect to this or any other transaction, except as required under applicable law.Announced Share Repurchase ProgramAs of November 27, 2012, the Company has cumulatively spent $491 million in share repurchases out of the share repurchase program totaling $650 million.  Arrangements regarding announced recurring payout Focus Media announced on January 10, 2012 that the Company is committed to a 55% annual payout based on prior year non-GAAP net income. Of which 25% of the payout is expected to be dividend payments paid on a quarterly basis, which will be paid out in the following calendar year to shareholders of record as of March 31, June 30, September 30 and December 31 respectively, while the remaining 30% payout is expected to be either dividend payments and/or share repurchases. The payout commenced in 2012 in respect of Focus Media's non-GAAP net income for 2011.Based on the Company 2011 non-GAAP net income of $284.1 million, a cash dividend of US$0.0274 per ordinary share (or US$0.137 per American Depositary Share) was paid on April 16, 2012 to shareholders of record as of the close of business on March 30, 2012, a cash dividend of US$0.0272 per ordinary share (or US$0.136 per American Depositary Share) was paid on July 16, 2012 to shareholders of record as of the close of business on July 10, 2012 and a cash dividend of US$0.0272 per ordinary share (or US$0.136 per American Depositary Share) was paid on October 16, 2012 to shareholders of record as of the close of business on September 28, 2012.  The board has resolved to postpone approval of future cash dividends through December 31, 2012 due to ongoing considerations relating to the going private proposal. The board will make a determination regarding the remaining dividends in respect of 2011 non-GAAP net income at that time, depending on the status of the going private proposal.  Value-added tax reform in Shanghai and BeijingThe government implemented a value-added tax reform pilot program, which replaced the business tax with value-added tax on selected sectors including the advertising sector, in Shanghai effective January 1, 2012 and in Beijing effective September 1, 2012.  The value-added tax rate applicable to the subsidiaries of our group in Shanghai and Beijing is 6% as compared to the 5% business tax rate which was applicable prior to the reform.  Foreign Currency TranslationAssets and liabilities are translated at the exchange rate as of September 30, 2012, which was $1 to RMB 6.3410.  Equity accounts are translated at historical exchange rates and revenues, expenses, gains and losses are translated using the average rate for the third quarter of 2012, which was $1 to RMB 6.3257.  Translation adjustments are reported as cumulative translation adjustments and are a separate component of other comprehensive income. USE OF NON-GAAP FINANCIAL MEASURESIn addition to Focus Media's consolidated financial results under GAAP, the Company also provides non-GAAP financial measures, including non-GAAP gross profit (cumulatively and by segment), non-GAAP operating expenses, non-GAAP operating profit (loss), non-GAAP net income and non-GAAP fully-diluted earnings per ADR, all excluding share-based compensation expenses, amortization of acquired intangible assets, loss from equity method investee and goodwill impairment.  Management uses these non-GAAP financial measures to better assess operating performance of the Company.  The Company believes that these non-GAAP financial measures provide investors with another method for assessing Focus Media's operating results in a manner that is focused on the performance of its ongoing operations.  Readers are cautioned not to view non-GAAP results on a stand-alone basis or as a substitute for results under GAAP, or as being comparable to results reported or forecasted by other companies, and should refer to the reconciliation of GAAP results with non-GAAP results in the attached financial information.  The Company believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing the performance of Focus Media and when planning and forecasting for future periods.  The Company computes its non-GAAP financial measures using a consistent method from quarter to quarter, mostly excluding share-based compensation expenses, amortization of acquired intangible assets, loss from equity method investee and goodwill impairment.  The accompanying tables have more details on the GAAP financial measures that are most directly comparable to non-GAAP financial measures and the related reconciliation between these financial measures. Focus Media Holding Ltd.Reconciliation of GAAP to non-GAAP(U.S. Dollars in thousands, except percentages, share and per-share data)(Unaudited)Three months ended September 30, 2012GAAP(1)(2)(3)(4)Non-GAAPGross Profit (loss)LCD display network98,443495813??99,751Poster frame network52,341?129??52,470In-store network9,082????9,082Movie theater network14,470????14,470Traditional outdoor billboard network(906)?462??(444)Total Gross Profit173,4304951,404??175,329General and administrative36,132(14,884)???21,248Selling and marketing53,123(1,438)(552)??51,133Other operating  income, net(14,890)????(14,890)Total operating expense74,365(16,322)(552)??57,491Operating profit from continuing operations99,06516,8171,956??117,838Profit from continuing operations before income taxes and loss     from equity method investee103,14616,8171,956??121,919Net profit from continuing operations 66,13516,8171,9569,499?94,407Net loss from discontinued operations(1,809)?806?908(95)Net income attributable to Focus Media64,59016,8172,7629,49990894,576Basic net income from continuing operations attributable to Focus Media per ADS0.520.74Diluted net income from continuing attributable to Focus Media operations per ADS0.490.71Basic net income from discontinued operations attributable to Focus Media per ADS(0.01)0.00Diluted net income from discontinued operations attributable to Focus Media per ADS(0.01)0.00Basic net income attributable to Focus Media per ADS0.510.74Diluted net income attributable to Focus Media per ADS0.480.71ADS used in calculating basic income per ADS127,777,021127,777,021ADS used in calculating diluted income per ADS133,518,344133,518,344 (1). Share-based compensation. (2). Amortization of acquired intangible assets.(3). Loss from equity method investee (VisionChina)(4). Goodwill impairment Three months ended June 30, 2012GAAP(1)(2)(3)Non-GAAPGross Profit (loss)LCD display network95,315488903?96,706Poster frame network38,453?180?38,633In-store network8,300???8,300Movie theater network6,562???6,562Traditional outdoor billboard network164?462?626Total Gross Profit148,7944881,545?150,827General and administrative37,791(14,604)??23,187Selling and marketing51,110(1,418)(570)?49,122Other operating  income, net(5,587)???(5,587)Total operating expense83,314(16,022)(570)?66,722Operating profit from continuing operations65,48016,5102,115?84,105Profit from continuing operations before income taxes and loss     from equity method investee70,56416,5102,115?89,189Net profit from continuing operations 59,50516,5102,1153,43681,566Net loss from discontinued operations(1,469)?938?(531)Net income attributable to Focus Media58,90716,5103,0533,43681,906Basic net income from continuing operations attributable to Focus Media per ADS0.470.64Diluted net income from continuing attributable to Focus Media operations per ADS0.450.62Basic net income from discontinued operations attributable to Focus Media per ADS(0.01)0.00Diluted net income from discontinued operations attributable to Focus Media per ADS(0.01)0.00Basic net income attributable to Focus Media per ADS0.460.64Diluted net income attributable to Focus Media per ADS0.440.62ADS used in calculating basic income per ADS128,227,213128,227,213ADS used in calculating diluted income per ADS133,103,155133,103,155 (1). Share-based compensation. (2). Amortization of acquired intangible assets.(3). Loss from equity method investee (VisionChina)  Three months ended September 30, 2011GAAP(1)(2)(3)Non-GAAPGross Profit (loss)LCD display network98,1962001,101?99,497Poster frame network18,588?989?19,577In-store network10,022???10,022Movie theater network6,390?11?6,401Traditional outdoor billboard network1,501?456?1,957Total Gross Profit134,6972002,557?137,454General and administrative32,562(14,423)??18,139Selling and marketing32,506(934)(1,051)?30,521Other operating  income, net(2,052)???(2,052)Total operating expense63,016(15,357)(1,051)?46,608Operating profit from continuing operations71,68115,5573,608?90,846Profit before tax from continuing operations76,94315,5573,608?96,108Net profit from continuing operations 62,10615,5573,60898582,256Net profit from discontinued operations560?362?922Net income attributable to Focus Media62,22915,5573,97098582,741Basic net income from continuing operations attributable to Focus Media per ADS0.470.62Diluted net income from continuing attributable to Focus Media operations per ADS0.440.59Basic net income from discontinued operations attributable to Focus Media per ADS0.000.00Diluted net income from discontinued operations attributable to Focus Media per ADS0.000.00Basic net income attributable to Focus Media per ADS0.470.62Diluted net income attributable to Focus Media per ADS0.440.59ADS used in calculating basic income per ADS133,718,768133,718,768ADS used in calculating diluted income per ADS139,866,888139,866,888 (1). Share-based compensation. (2). Amortization of acquired intangible assets.(3). Loss from equity method investee (VisionChina)  Focus Media Holding Ltd.Reconciliation of GAAP to non-GAAP(U.S. Dollar in thousands, except share and per-share data)(Unaudited) Nine months ended September 30, 2012GAAP(1)(2)(3)(4)Non-GAAPGross Profit (loss)LCD display network254,9151,4672,659??259,041Poster frame network127,097?522??127,619In-store network24,443????24,443Movie theater network33,069????33,069Traditional outdoor billboard network(583)?1,387??804Total Gross Profit438,9411,4674,568??444,976General and administrative103,736(44,922)???58,814Selling and marketing142,123(4,258)(1,738)??136,127Other operating  income, net(24,691)????(24,691)Total operating expense221,168(49,180)(1,738)??170,250Operating profit from continuing operations217,77350,6476,306??274,726Profit before tax from continuing operations230,29650,6476,306??287,249Net profit from continuing operations 163,04850,6476,30615,961?235,962Net profit/ (loss) from discontinued operations(3,174)?2,831?908565Net income attributable to Focus Media161,40650,6479,137  15,961908238,059Basic net income from continuing operations attributable to Focus Media per ADS1.281.86Diluted net income from continuing attributable to Focus Media operations per ADS1.231.80Basic net income from discontinued operations attributable to Focus Media per ADS(0.02)(0.01)Diluted net income from discontinued operations attributable to Focus Media per ADS(0.02)(0.01)Basic net income attributable to Focus Media per ADS1.261.85Diluted net income attributable to Focus Media per ADS1.211.79ADS used in calculating basic income per ADS128,428,818128,428,818ADS used in calculating diluted income per ADS133,359,921133,359,921 (1). Share-based compensation. (2). Amortization of acquired intangible assets.(3). Loss from equity method investee (VisionChina).(4). Goodwill impairment Nine months ended September 30, 2011GAAP(1)(2)(3)Non-GAAPGross ProfitLCD display network246,3365933,309?250,238Poster frame network40,043?3,285?43,328In-store network22,995???22,995Movie theater network11,280?43?11,323Traditional outdoor billboard network6,017?1,349?7,366Total Gross Profit326,6715937,986?335,250General and administrative89,426(42,852)??46,574Selling and marketing96,786(2,775)(3,165)?90,846Other operating  income, net(7,967)???(7,967)Total operating expense178,245(45,627)(3,165)?129,453Operating profit from continuing operations148,42646,22011,151?205,797Profit before tax from continuing operations159,19546,22011,151?216,566Net profit from continuing operations 124,75346,22011,1514,750186,874Net profit from discontinued operations560?363?923Net income attributable to Focus Media125,58546,22011,5144,750188,069Basic net income from continuing operations attributable to Focus Media per ADS0.931.39Diluted net income from continuing attributable to Focus Media operations per ADS0.891.34Basic net income from discontinued operations attributable to Focus Media per ADS0.000.00Diluted net income from discontinued operations attributable to Focus Media per ADS0.000.00Basic net income attributable to Focus Media per ADS0.931.39Diluted net income attributable to Focus Media per ADS0.891.34ADS used in calculating basic income per ADS134,972,295134,972,295ADS used in calculating diluted income per ADS140,567,619140,567,619 (1). Share-based compensation. (2). Amortization of acquired intangible assets.(3). Loss from equity method investee (VisionChina) CONFERENCE CALL1) The Company will host a conference call to discuss the third quarter 2012 results at 8:00 p.m. U.S. Eastern Time on November 27, 2012 (5:00 p.m. U.S. Pacific Time on November 27, 2012 and 9:00 a.m. Beijing/Hong Kong Time on November 28, 2012). The dial-in details for the live conference call are set forth below: International Toll Dial-In Number: + 65.6723.9381Local Dial-In Number(s):China, Domestic Mobile: 400.620.8038 China, Domestic: 800.819.0121 Hong Kong: +852.2475.0994 United States: +1.718.354.1231 International Toll Free Dial-in Number(s): Hong Kong: +852.800.930.346 United States: +1.866.519.4004Conference ID # 714898602) A replay of the call will be available from November 27, 2012 11:00pm until December 5, 2012 7:59am (U.S. Eastern Time). The dial-in details for the replay are set forth below:International Toll Dial-In Number: +61.2.8199.0299Local Dial-In Number(s):Hong Kong: +852.3051.2780  United States: +1.646.254.3697 International Toll Free Dial-in Number(s): China 400: 400.120.0932China 800: 800.870.0205Hong Kong: +852.800.963.117United States: +1.855.452.5696Conference ID # 71489860Additionally, a live and archived web cast of this call will be available on the Focus Media web site at http://ir.focusmedia.cn. SAFE HARBOR: FORWARD-LOOKING STATEMENTSThis press release includes statements that may constitute forward-looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements, as well as the consideration of the going private proposal and the impact on the Company resulting from the success or failure of that proposal. Focus Media may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission on forms 20-F and 6-K, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about Focus Media's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Potential risks and uncertainties include, but are not limited to, risks outlined in Focus Media's filings with the U.S. Securities and Exchange Commission, including its registration statements on Form F-1, F-3 and 20-F, in each case as amended. Focus Media does not undertake any obligation to update any forward-looking statement, except as required under applicable law.  This release is not an offer of securities for sale in the United States.  Securities may not be offered or sold in the United States absent registration or an exemption from registration.  Any public offering of securities to be made in the United States will be made by means of a prospectus that may be obtained from the issuer or selling security holder and that will contain detailed information about the company and management, as well as financial statements.ABOUT FOCUS MEDIA HOLDING LIMITEDFocus Media Holding Limited (Nasdaq: FMCN) operates China's largest lifestyle targeted interactive digital media network. The Company offers one of the most comprehensive targeted interactive digital media platforms aimed at Chinese consumers at various urban locations. The increasingly fragmented and mobile lifestyle of Chinese urban consumers has created the need for more efficient media means to capture consumer attention. Focus Media's mission is to build an increasingly comprehensive and measurable interactive urban media network that reaches consumers at various out-of-home locations.   Focus Media Holding LimitedUNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS(U.S Dollars in Thousands)2012-09-302012-06-302011-09-30ASSETS Current assets Cash and cash equivalents 491,729439,383435,322Restricted cash99,043106,809?Short-term investments211,238211,444204,567Accounts receivable, net 294,102254,429230,552Prepaid expenses and other current assets 71,61673,29939,060Rental deposits60,73963,06456,143Available-for-sale assets-current4,660??Other current assets2,2622,3088,098Total current assets 1,235,3891,150,736973,742Restricted cash99,04399,295?Rental deposits, non-current 3,2524,0274,770Equipment, net 66,04471,38368,786Acquired intangible assets, net 4,77628,52939,242Goodwill439,201459,294452,201Investment under equity method5,04014,58659,148Available-for-sale assets-non-current21,008??Other long term assets14,64210,52717,354Total assets 1,888,3951,838,3771,615,243LIABILITIES AND EQUITY Current liabilities Short-term bank loan100,000107,51430,000 Accounts payable 16,82820,42822,146 Accrued expenses and other current liabilities 188,569173,947132,449 Income taxes payable 43,74529,94610,943Amount due to related parties1,5541,5814,175Available-for-sale liabilities-current9,468??Deferred tax liabilities29,33929,41424,532Total current liabilities 389,503362,830224,245Long-term loan100,000100,000?Long-term payable?11,82912,995Available-for-sale liabilities-non-current6,159??Deferred tax liabilities, non-current 13,19018,57316,102Total liabilities508,852493,232253,342Equity Ordinary shares 323233Additional paid in capital 1,548,4461,531,6281,668,269Subscription receivable?(21)(1,236)Accumulated deficit(291,226)(321,106)(437,368)Accumulated other comprehensive income113,318116,303111,572Total Focus Media equity1,370,5701,326,8361,341,270Non-controlling interests 8,97318,30920,631Total equity 1,379,5431,345,1451,361,901Total liabilities and equity 1,888,3951,838,3771,615,243  Focus Media Holding LimitedUNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME(U.S Dollars in thousands, except earnings per ADS and ADS data)Three months endedNine months ended2012-09-302012-06-302011-9-302012-09-302011-09-30RevenuesLCD display network135,777129,130132,555356,918336,097In-store network14,87913,95417,36741,83844,111Poster frame network86,05673,17751,023229,843131,953Movie theater network23,75315,57813,61458,23331,672Traditional outdoor billboard network8,55410,06912,40428,69236,116Total gross revenues269,019241,908226,963715,524579,949Less: Sales taxes12,74212,90018,67035,86946,119Total net revenue (note 1)256,277229,008208,293679,655533,830Cost of revenuesLCD display network29,97626,73722,36483,11060,619In-store network5,3845,2595,84916,25017,324Poster frame network29,26830,11328,05688,78280,858Movie theater network8,7628,5996,60123,73718,773Traditional outdoor billboard network9,4579,50610,72628,83529,585Total cost of revenues82,84780,21473,596240,714207,159Gross profit173,430148,794134,697438,941326,671Operating expensesGeneral and administrative36,13237,79132,562103,73689,426Selling and marketing53,12351,11032,506142,12396,786Other operating income, net(14,890)(5,587)(2,052)(24,691)(7,967)Total operating expenses74,36583,31463,016221,168178,245Operating profit99,06565,48071,681217,773148,426Interest income5,3666,3345,39516,17810,902Interest Expense (1,285)(1,250)(133)(3,655)(133)Income from continuing operations     before income taxes and loss     from equity method investee103,14670,56476,943230,296159,195Provision for income taxes27,5127,62313,85251,28729,692Loss from equity method investee9,4993,43698515,9614,750Net income from continuing operations 66,13559,50562,106163,048124,753Net income (loss) from discontinued     operations, net of tax(1,809)(1,469)560(3,174)560Net Income (loss)64,32658,03662,666159,874125,313Less: Net income attributable to     non-controlling interests(264)(871)437(1,532)(272)Net income attributable to Focus Media64,59058,90762,229161,406125,585Net income from continuing operations     attributable to Focus Media per ADS-basic0.520.470.471.280.93-diluted0.490.450.441.230.89Net income (loss) from discontinued operations     attributable to Focus Media per ADS-basic(0.01)(0.01)0.00(0.02)0.00-diluted(0.01)(0.01)0.00(0.02)0.00Net income attributable to Focus Media     per ADS-basic0.510.460.471.260.93-diluted0.480.440.441.210.89ADS used in calculating basic income     per ADS 127,777,021128,227,213133,718,768128,428,818134,972,295ADS used in calculating diluted income     per ADS133,518,344133,103,155139,866,888133,359,921140,567,619   Focus Media Holding LimitedUNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME(U.S Dollars in thousands, except earnings per ADS and ADS data)Three months endedNine months ended2012-09-302012-06-302011-09-302012-09-302011-09-30Net income64,32658,03662,666159,874125,313Other comprehensive income, net of taxForeign currency translation adjustments(2,964)(4,983)15,419(7,051)31,934Share of post-acquisition movements in equity     investee's other comprehensive income(43)2424134761,383Comprehensive income 61,31953,29578,498153,299158,630Comprehensive income (loss) attributable to     non-controlling interests(286)(963)638(1,629)(62)Comprehensive income attributable     to Focus Media61,60554,25877,860154,928158,692 Note 1: Details of net revenues by segment are as follows (U.S. Dollars in thousands):Three months endedNine months ended2012-09-302012-06-302011-09-302012-09-302011-09-30Gross revenuesLCD display network 135,777129,130132,555356,918336,097In-store network14,87913,95417,36741,83844,111Poster frame network86,05673,17751,023229,843131,953Movie theater network23,75315,57813,61458,23331,672Traditional outdoor billboard network8,55410,06912,40428,69236,116Total gross revenues269,019241,908226,963715,524579,949Less: Sales taxesLCD display network 7,3587,07811,99518,89329,142In-store network4133951,4961,1453,792Poster frame network4,4474,6114,37913,96411,052Movie theater network5214176231,4271,619Traditional outdoor billboard network3399177440514Total sales taxes12,74212,90018,67035,86946,119Net revenuesLCD display network 128,419122,052120,560338,025306,955In-store network14,46613,55915,87140,69340,319Poster frame network81,60968,56646,644215,879120,901Movie theater network23,23215,16112,99156,80630,053Traditional outdoor billboard network8,5519,67012,22728,25235,602Total net revenues256,277229,008208,293679,655533,830  Focus Media Holding LimitedUNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASHFLOWS(U.S. Dollars in thousands)Three months endedNine months ended                         2012-09-30                         2011-09-30                    2012-09-30                      2011-09-30Operating activities:Net income64,3262,666159,874125,313Adjustments to reconcile net income to net cash provided by operating activities:????Bad debt expenses  4,0024,4669,15910,258Share-based compensation  16,81715,55750,64746,220Depreciation 8,3667,29122,92021,398Amortization of acquired intangible assets 2,7623,9709,13711,514Loss from equity method investee9,49998515,9614,750Change in fair value of contingent consideration liabilities for acquisition of subsidiaries211?1,179?Write-off of long-term assets???990Others1,3461,7982,1431,940Net changes in current assets and current liabilities, net of effects of acquisitions(29,413)(10,465)(55,215)(71,018)Net cash provided by operating activities  77,91686,268215,805151,365Investing activities:Purchase of equipment and other long term assets  (5,010)(6,058)(14,838)(23,425)Payment to acquire subsidiaries, net of cash acquired(577)(7,262)(2,929)(12,622)Proceeds from disposal of subsidiaries               1,126?1,1267,296Cash of disposed entities(1,782)?(1,782)?Investment in equity method investee???(61,003)Cash deposited as restricted cash??(26,514)?Cash received from the release of restricted cash7,495?26,366?Proceeds received from the sale of short-term investments93,844490,972356,061878,037Proceeds used in investment in short-term investments(94,174)(505,921)(342,658)(937,663)Proceeds received from disposal of fixed assets?125340572Net cash provided by/ (used in) investing activities 922(28,144)(4,828)(148,808)Financing activities:Proceeds received from bank loans?30,00063,79430,000Repayment of short-term bank loans(7,514)?(34,017)?Share repurchase?(66,106)(41,445)(69,106)Dividend payout(17,365)?(35,302)?(Repayment to) capital injection  from non-controlling interests???(76)Proceeds from issuance of ordinary shares, net of issuance costs 211,260341,828Net cash used in financing activities  (24,858)(34,846)(46,936)(37,354)Effect of exchange rate changes  (651)7,340(2,548)15,643Net increase (decrease) in cash and cash equivalents  53,32930,618161,493(19,154)Cash and cash equivalents, beginning of period439,383404,704331,219454,476Less: Cash and cash equivalents in held-for-sale assets983?983?Cash and cash equivalents, end of period 491,729435,322491,729435,322Supplemental disclosure of cash flow information: Income taxes paid  9,2013,32137,10724,612Interest paid1,3061053,398105Supplemental disclosure of non-cash investing activity:  Accrual for acquisition of subsidiaries 66522,09266522,092  SOURCE Focus Media Holding LimitedFor further information: Jing Lu, +86 21 22164155, ir@focusmedia.cn