Beijing : Charm Communications Inc. (NASDAQ: CHRM) (“Charm” or “the Company”), a leading advertising agency in China, today announced its unaudited financial results for the first quarter ended March 31, 2011.
Revenues in the first quarter of 2011 grew 48.4% year-over-year and 9.8% quarter-over-quarter to $62.3 million. Revenues for Charm’s advertising agency business grew 34.1% year-over-year and decreased 8.2% quarter-over-quarter to $7.1 million in the first quarter of 2011.Revenues for Charm’s media investment management business grew 51.0% year-over-year and 15.3% quarter-over-quarter to $54.0 million in the first quarter of 2011 .Revenues for Charm’s branding and identity services business grew 27.7% year-over-year and decreased 46.6% quarter-over-quarter to $1.1 million in the first quarter of 2011.
Gross profit for the first quarter of 2011 grew 19.3% year-over-year and decreased 32.9% quarter-over-quarter to $14.8 million .Net income for the first quarter of 2011 grew 19.6% year-over-year and decreased 32.7% quarter-over-quarter to $8.2 million .Non-GAAP net income, which excludes share-based compensation expenses and impairment on investments, grew 19.0% year-over-year and decreased 39.1% quarter-over-quarter to $8.9 million in the first quarter of 2011 .
Basic net income per ADS for the first quarter of 2011 was $0.20, compared to $0.19 for the first quarter of 2010 and $0.31 for the fourth quarter of 2010 .Cash flow from operations was positive for the first quarter of 2011, with cash and cash equivalents of $130.5 million as of March 31, 2011.In the first quarter of 2011, Charm added 5 new advertising client accounts to its agency business, bringing total agency accounts for 2011 to 140 .In the first quarter of 2011, Charm’s principal media business had 325 advertisers, compared to 206 advertisers in the first quarter of 2010 .Charm had 560 employees as of March 31, 2011, compared to 525 as of December 31, 2010.
“We made a solid start in 2011, as we continued to deliver stable growth in the first quarter,” said Mr. He Dang, founder, chairman and chief executive officer of Charm. “Our strong results demonstrate our ability to provide integrated and innovative solutions, which has allowed us to capture additional market share and to solidify our position as a leading advertising agency in China.”
“With rising media prices across the advertising industry, we continue to see clients moving away from a single media solution towards integrated media solutions. Although we have successfully diversified our media platform, with only 37% of total revenues attributed to CCTV-related media, we are keen to further strengthen our integrated media offerings through deepening cooperation with our strategic partner Aegis Media and with continued investments in our staff and infrastructure.”
“I am also happy to report key client wins, during an otherwise seasonally weak first quarter, which significantly enhanced our market position and brand value. Significant wins for Charm Advertising included Baidu and Huayi Brothers, and Charm Interactive won the digital marketing services account for Hisense, a multibillion dollar manufacturing conglomerate. We are particularly focused on expanding our digital marketing capabilities, especially with the development of the online video segment as we are seeing an influx of advertisers coming onto the Internet through this medium. We feel well positioned to leverage our leadership position in television advertising and our large blue-chip client base to capture the growth in this new segment,” said Mr. Dang.
Mr. Wei Zhou, Charm’s chief financial officer, added, “In the first quarter of 2011, we continued to outgrow the market, as measured by gross billings, and gained additional market share, as our total turnover reached $198 million, achieving 40% year-over-year growth. We also had solid growth in net income, exceeding guidance, and expect continued growth as Hubei Provincial Economic TV ramps up and its margins normalize through the course of the year. Going forward, we expect to continue making strategic investments that will result in positive returns for our shareholders, as well as expand our services and capabilities to remain at the forefront of the advertising industry in China.”