MUMBAI, India -- Rediff.com India Limited (Nasdaq:REDF), one of the premier worldwide online providers of news, information, communication, entertainment and shopping services for Indians, today announced its financial results for the second fiscal quarter ended September 30, 2004.
Highlights
--Total revenues from continuing operations for the quarter ended September 30, 2004 were US$2.9 million, an increase of 29% over the same quarter last year, driven by a 73% growth in India Online revenues to US$1.3 million compared to the same quarter last year.
--Gross Margins expanded to 62% for the quarter ended September 30, 2004, up from 46% for the corresponding 2003 quarter.
--Loss per ADS at the EBITDA level was 1.3 cents or US$327,000 compared to 3.4 cents or US$858,000 for the quarter ended September 30, 2003.
--Net Loss per ADS, for the quarter reduced to 1.5 cents or US$381,000 compared to 5.6 cents or US$1.4 million for the corresponding quarter ended September 30, 2003.
--Registered users grew 19% compared to the same quarter last year to 33.3 million.
--Rediff.com launched "Rediff Radar", using an automated crawling and content aggregation platform that helps publish at low cost a variety of special interest channels such as health, music, science and telecom.
--Rediff.com launched "Pay4Clicks", the first major portal in India to offer an advertising solution on the automated pay for performance platform which allows small merchants with little or no web presence to advertise on the Rediff.com website with the option to receive enquires from Internet users on emails or mobile phones as an SMS.
--In early April 2004, the Company sold the Valucom phone card business. Consequently, the Company has reported Valucom's results as discontinued operations.
"During the quarter we made significant progress in evolving the Rediff platform to make it state-of-the-art as demonstrated by the launch of new services like "Rediff Radar", a low cost automated publishing channel using our crawling and content aggregation platform, "Pay4Clicks", an advertising solution on the pay for performance platform and "Rediff Connexions", a business networking service using social networking technology," says Ajit Balakrishnan, Chairman and CEO, Rediff.com India Limited. "We will continue to invest in product and platform evolution while we wait for the inflection point in Internet users in India which we believe is round the corner. For this reason we expect our performance at the EBITDA level during the next few quarters to be at or around the current level. It is also important to note that it will take some time for Indian Internet users to adopt advanced services like online shopping and online subscriptions," concluded Mr. Balakrishnan.
Financial Results
Revenues
Revenues from continuing operations for the quarter ended September 30, 2004 were up by 29% to US$2.9 million, as compared to US$2.3 million in the same quarter last year.
India Online comprised of online advertising and fee-based services contributed US$1.3 million, an increase of 73% when compared to the same quarter last year driven by growth in online advertising services.
US Publishing for the quarter ended September 30, 2004, increased by 6% to US$1.6 million, compared to the same quarter in fiscal 2003. US Publishing which is comprised of India Abroad, a weekly news publication and Rediff USA online are considered as one of the most credible news providers to the Indian American community.
Gross Margin
Gross Margin from continuing operations for the quarter ended September 30, 2004 expanded to US$1.8 million or 62 percent compared to US$1.0 or 46 percent in the same quarter last year.
Operating Expenses
Total operating expenses were US$2.1 million for the quarter, compared to US$1.9 million for the same quarter last year.
Operating EBITDA
Loss per ADS at the EBITDA level from continuing operations for the quarter was 1.3 cents or US$327,000 compared to 3.4 cents or US$858,000 for the corresponding quarter last year.
Net Income (Loss)
Net loss per ADS from continuing operations for the quarter was 1.5 cents or US$381,000 compared to 5.6 cents or US$1.4 million for the same quarter last year.
Net Loss for the quarter included loss from discontinued operations of US$46,000. The Company sold the ValuCom phone card business in early April 2004.
Total cash and cash equivalents and short term deposits with banks approximated US$10.5 million at the end of September 30, 2004.
About Rediff.com
Rediff.com India Limited (Nasdaq REDF) is one of the premier worldwide online providers of news, information, communication, entertainment and shopping services for Indians.
Known for being one of the first with news and providing accurate and trustworthy information, Rediff.com provides an ideal platform for Indians worldwide to connect with one another online fast. Rediff.com is committed to offering a personalized and a secure surfing and shopping environment.
Rediff.com additionally offers the Indian American community in the United States and Canada, one of the oldest and largest Indian weekly newspaper, India Abroad.
Founded in 1996, Rediff.com is headquartered in Mumbai, India with offices in New Delhi and New York, USA.
Safe Harbor
Except for historical information and discussions contained herein, statements included in this release may constitute "forward-looking statements." These statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those that may be projected by these forward looking statements. These risks and uncertainties include but are not limited to the slowdown in the economies worldwide and in the sectors in which our clients are based, the slowdown in the internet and IT sectors world-wide, competition, success of our past and future acquisitions, attracting, recruiting and retaining highly skilled employees, technology, legal and regulatory policies, managing risks associated with customer products, the wide spread acceptance of the internet as well as other risks detailed in the reports filed by Rediff.com India Limited with the U.S. Securities and Exchange Commission. Rediff.com India Limited and its subsidiaries may, from time to time, make additional written and oral forward looking statements, including statements contained in the company's filings with the Securities and Exchange Commission and our reports to shareholders. Rediff.com India Limited does not undertake to update any forward-looking statement that may be made from time to time by or on behalf of the company.
Table to follow
CONSOLIDATED STATEMENT OF OPERATIONS Prepared In Accordance With US GAAP Quarter Ended September 30, 2004 All figures are in US$ million Quarter ended Sept 30 2004 2003 (Unaudited)(Unaudited) ---------------------------------------------------------------------- Revenues India Online 1.34 0.77 US Publishing 1.56 1.48 Total Revenues 2.90 2.25 Cost Of Revenues (1.10) (1.22) Gross Margin 1.80 1.03 Gross Margin % 62% 46% Operating Expenses (2.12) (1.89) Operating EBITDA (0.33) (0.86) Depreciation / Amortization (0.14) (0.36) Interest Income 0.14 0.03 Net foreign exchange loss (0.01) (0.15) Loss from continuing operations before income taxes (0.33) (1.34) Tax (0.00) - Loss from continuing operations (0.34) (1.34) Loss from discontinued operations (0.05) (0.10) Net loss (0.38) (1.44) EBITDA per ADS (cents) (1.27) (3.35) Net loss per ADS (cents) (1.48) (5.62) Weighted average ADS Outstanding (in millions) 25.66 25.59 ----------------------------------------------------------------------
Notes
--The above numbers are subject to an audit to be carried out at year-end and while no significant changes are anticipated, the audited numbers may vary from the above.
--Discontinued Operations: Disclosure of discontinued operations is on account of the sale of the ValuCom Phone Card business in April 2004.
Non-GAAP Measures Note
Operating EBITDA, Operating EBITDA per ADS and non-GAAP Operating Expenses are the non-GAAP measures in this press release. These measurements are not recognized under generally accepted accounting principles ("GAAP").
Operating EBITDA represents income (loss) from operations prior to adjustments for depreciation/ amortization, non-recurring items and other income or expense and tax. However, other companies may calculate operating EBITDA differently. Operating EBITDA is not intended to represent cash flows as defined by generally accepted accounting principles and should not be considered as an indicator of cash flow from operations. We have included information concerning operating EBITDA in this press release because management and our board of directors use it as a measure of our performance. In addition, future investment and capital allocation decisions are based on operating EBITDA. Investors and industry analysts use operating EBITDA to measure the Company's performance to historic results and our peer group. The reconciliation between operating EBITDA and net loss, the GAAP measure, can be directly derived from the above table.
Operating EBITDA per ADS represents the Operating EBITDA for the period per weighted average ADSs outstanding during the periods presented. The Company has 12.8M equity shares outstanding at September 30, 2004 of which 2.68 M shares are represented by ADSs listed on the NASDAQ. Two ADSs are equal to one equity share. We believe the disclosure of EBITDA per ADS provides a better measure to our ADS holders since our ADSs are listed only on the NASDAQ.
Non-GAAP operating expenses represent our operating expenses comprised of sales and marketing, product development and general and administrative expenses net of depreciation and amortization. We have used the non-GAAP operating expense to compute our operating EBITDA. A reconciliation of the GAAP operating expense to non-GAAP operating expense is as follows:
RECONCILIATION FROM GAAP TO NON-GAAP OPERATING EXPENSES (QUARTER ENDED SEPTEMBER 30, 2004) All figures are in US$ million Quarter Ended September September 2004 2003 (Unaudited) (Unaudited) Operating Expenses (GAAP) 2.26 2.25 Depreciation/Amortization (0.14) (0.36) Operating Expenses (Non-GAAP) 2.12 1.89
The Company has historically provided the above measures in previous press releases and believes it provides transparency and continuity to investors for comparable purposes.
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