FOCUS MEDIA HOLDINGS (NASDAQ:FMCN)

NEW YORK, May 30, 2013 /PRNewswire/ -- China's largest display advertising company Focus Media Holdings (Nasdaq: FMCN) has successfully exited the NASDAQ Stock Market in a $3.8 billion acquisition advised by JP Morgan. The buyout is the largest Chinabased company in history that has abandoned the NASDAQ Stock Market. Focus Media Holdings is an investment portfolio company of global investment firm New York Global Group. The Carlyle Group led the financing.

Focus Media joins more than 30 China based companies that have left the NASDAQ Stock Market since 2011. The massive exodus from the NASDAQ followed CleanTech Innovations, Inc.'s bizarre delisting by the NASDAQ in 2011. NASDAQ delisted CleanTech for a vague and ambiguous reason:  "discretionary authority," even though NASDAQ recognized that CleanTech more than complied with all listing standards.  The New York Stock Exchange also has multiple listings of China based companies. In contrast to the NASDAQ, the NYSE however has never cited "discretionary authority" as the basis for delisting any Chinese companies.

During CleanTech's delisting appeal within the NASDAQ, the NASDAQ General Counsel's office allegedly rigged the appeal processand reversed an independent NASDAQ Hearing & Listing Review Council decision in favor of CleanTech. The General Counsel's office claimed that the submission of CleanTech's brief in accordance with instructions from the General Counsel's office constituted an "ex parte" communication.  CleanTech filed an appeal to the SEC about 1.5 years ago and the SEC has not made a decision. The SEC has no rule defining the time limit for making such decisions.

CleanTech's mainly American shareholders have lost more than $200 million. In June 2012, NASDAQ was also sued for massive investor losses in NASDAQ's disastrous listing of Facebook.  In May 2013, the SEC levied a record fine against the NADAQ for regulatory violations, as reported by Fox Business News.

CleanTech also sued the NASDAQ for discrimination. In 2011, Michael Emen, the Head of NASDAQ Listing Qualifications Department, was caught stating on the record that the NASDAQ had made it a policy to single out Chinese companies and delist them in order to "send a message to the world about the Chinese." Former U.S. Senator Arlen Specter, acting as legal counsel to CleanTech Innovations, Inc., accused the NASDAQ of "a miscarriage of justice" and sued the NASDAQ Stock Market and NASDAQ's Michael Emen for racism and discrimination.

James N. Baxter, Chairman of New York Global Group commented: "New York Global Group congratulates our portfolio company Focus Media and its CEO Jason Jiang for their determination and success in exiting the NASDAQ Stock Market. However, as a proud American and a long time participant in the U.S. capital markets, I am disappointed that the unregulated "short and distort" tactics of often anonymous market manipulators have created an atmosphere in which important international companies such as Focus Media prefer to abandon the U.S. capital market."

SHANGHAI, May 23, 2013 /PRNewswire/ -- Focus Media Holding Limited (the "Company" or "Focus Media") (Nasdaq: FMCN) announced today the completion of its merger (the "Merger") with Giovanna Acquisition Limited ("Merger Sub"), a wholly-owned subsidiary of Giovanna Parent Limited ("Parent"), pursuant to the agreement and plan of merger (the "Merger Agreement"), datedDecember 19, 2012, among the Company, Parent and Merger Sub.  As a result of the Merger, the Company became a direct wholly owned subsidiary of Parent.

Under the terms of the Merger Agreement, each of the Company's ordinary shares issued and outstanding immediately prior to the effective time of the Merger ("Shares") has been canceled in exchange for the right to receive $5.50 in cash without interest, and each of the Company's American depositary shares, each representing five Shares, issued and outstanding immediately prior to the effective time of the Merger ("ADSs"), has been canceled in exchange for the right to receive $27.50 in cash without interest, other than (a) a portion of the Shares beneficially owned by Mr. Jason Nanchun Jiang and by Fosun International Limited, (b) Shares owned by the Company or its subsidiaries, if any, (c) Shares owned by shareholders who have validly exercised and have not effectively withdrawn or lost their dissenter rights under the Cayman Companies Law, and (d) Shares held by Citibank, N.A., in its capacity as ADS depositary (the "ADS Depositary"), that underlie ADSs reserved (but not yet allocated) by the Company for settlement upon the exercise of any options or restricted share units of the Company issued under its share incentive plans.

Shareholders of record as of the effective time of the Merger who are entitled to the merger consideration will receive a letter of transmittal and instructions on how to surrender their share certificates in exchange for the merger consideration.  Shareholders should wait to receive the letter of transmittal before surrendering their share certificates.  As soon as practicable after the date of this announcement, the ADS Depositary will call for the surrender of all ADSs for delivery of the merger consideration.  Upon the surrender of ADSs, the ADS Depositary will pay to the surrendering holders $27.50 per ADS surrendered (less an ADS cancellation fee of $0.05 per ADS) in cash without interest.

The Company also announced today that it has requested that trading of its ADSs on the Nasdaq Global Select Market ("Nasdaq") be suspended.  The Company requested Nasdaq to file Form 25 with the Securities and Exchange Commission (the "SEC") to delist the Company's ADSs and deregister the Company's registered securities.  The deregistration will become effective in 90 days after the filing of Form 25 or such shorter period as may be determined by the SEC. The Company intends to suspend its reporting obligations under the Securities Exchange Act of 1934, as amended, by filing a Form 15 with the SEC in ten days.  The Company's obligations to file with the SEC certain reports and forms, including Form 20-F and Form 6-K, will be suspended immediately as of the filing date of the Form 15 and will terminate once the deregistration becomes effective.

SHANGHAI, April 29, 2013 /PRNewswire/ -- Focus Media Holding Limited (the "Company" or "Focus Media") (Nasdaq: FMCN) announced that, at an extraordinary general meeting held today, the Company's shareholders voted in favor of the proposal to authorize and approve the previously announced definitive agreement and plan of merger, dated as of December 19, 2012 (the "merger agreement"), by and among the Company, Giovanna Parent Limited ("Parent") and Giovanna Acquisition Limited ("Merger Sub"), pursuant to which Merger Sub will be merged with and into Focus Media with Focus Media surviving as a wholly owned subsidiary of Parent (the "merger"), and to authorize and approve any and all transactions contemplated by the merger agreement, including the merger. 

Immediately after completion of the merger, Parent will be beneficially owned by Jason Nanchun Jiang, the Chairman and Chief Executive Officer of the Company; affiliates of and funds managed by Giovanna Investment Holdings Limited, an entity owned and controlled by Carlyle Asia Partners III, L.P.; Gio2 Holdings Ltd., an entity owned and controlled by FountainVest China Growth Capital Fund, L.P., FountainVest China Growth Capital Fund II, L.P., and their respective parallel funds and affiliates; Power Star Holdings Limited, an entity owned and controlled by CITIC Capital China Partners II, L.P.; State Success Limited, an entity owned and controlled by affiliates of China Everbright Structured Investment Holdings Limited; and Fosun International Limited and/or its affiliates. 

Approximately 78.7% of the Company's total outstanding ordinary shares voted in person or by proxy at today's extraordinary general meeting. Of those ordinary shares, approximately 99.5% were voted in favor of the proposal to authorize and approve the merger agreement and any and all transactions contemplated by the merger agreement, including the merger.

The parties currently expect to complete the merger in May 2013, subject to the satisfaction or waiver of the conditions set forth in the merger agreement. Upon completion of the merger, Focus Media will become a privately held company and its American depositary shares will no longer be listed on the Nasdaq Stock Market.

SHANGHAI, April 22, 2013 /PRNewswire/ -- Focus Media Holding Limited (the "Company" or "Focus Media") (Nasdaq: FMCN) is pleased to announce that Institutional Shareholder Services Inc. ("ISS") and Glass Lewis & Co., LLC ("Glass Lewis") have recommended that Focus Media shareholders vote for approval of the Company's agreement and plan of merger (the "Merger Agreement") dated December 19, 2012 with Giovanna Parent Limited ("Parent") and Giovanna Acquisition Limited, pursuant to which Parent will acquire Focus Media (the "Transaction") for US$5.50 per ordinary share of the Company (a "Share") or US$27.50 per American depositary share, each representing five Shares (an "ADS").

ISS and Glass Lewis are leading independent international proxy advisory firms and their voting analyses and recommendations are relied upon by thousands of major institutional investment firms, mutual funds and fiduciaries throughout the world.

The Company's extraordinary general meeting of shareholders (the "Shareholder Meeting") to consider and vote on, among other things, the Merger Agreement and the Transaction will be held on Monday, April 29, 2013 at10:00 a.m. Hong Kong Time at 26th Floor, Gloucester Tower, The Landmark, 15 Queen's Road Central, Hong Kong. Record holders of Shares on the close of business in the Cayman Islands on April 17, 2013 or their proxy holders are entitled to vote at this meeting. ADS holders are reminded that the deadline to vote is 10:00 a.m. New York City Time on Friday, April 25, 2013.

SHANGHAI, March 25, 2013 /PRNewswire/ -- Focus Media Holding Limited (the "Company" or "Focus Media") (Nasdaq: FMCN) announced today that it has called an extraordinary general meeting of shareholders (the "EGM"), to be held on April 29, 2013 at10:00 a.m. (Hong Kong Time). The meeting will be held at 26th Floor, Gloucester Tower, The Landmark, 15 Queen's Road Central, Hong Kong, to consider and vote on, among other things, the proposal to authorize and approve the previously announced agreement and plan of merger (the "Merger Agreement") dated December 19, 2012 among Giovanna Parent Limited, Giovanna Acquisition Limited ("Merger Sub") and the Company, the plan of merger (the "Plan of Merger") and the transactions contemplated thereby (including the merger).

Pursuant to the Merger Agreement, Merger Sub will merge with and into the Company, with the Company continuing as the surviving company. If completed, the merger will result in the Company becoming a privately-held company and its American depositary shares ("ADSs") will no longer be listed on the NASDAQ Global Market and the American depositary shares program for the ADSs will terminate. The Company's board of directors, acting upon the unanimous recommendation of the independent committee of the board of directors, authorized and approved the Merger Agreement, the Plan of Merger and the transactions contemplated thereby (including the merger) and resolved to recommend that the Company's shareholders and ADS holders vote FOR, among other things, the proposal to authorize and approve the Merger Agreement, the Plan of Merger and the transactions contemplated thereby (including the merger).

Highlights for second Quarter 2012:

• Total net revenue for the second quarter of 2012 was $233.0 million, of which
  • aggregate net revenues from the LCD display network, in-store network, poster frame network and movie theater network was $219.3 million, which exceeded by approximately 3% the mid-point of the Company's guidance range of $211-213 million. This represented a year-on-year increase of 32% from $166.1 million for the second quarter of 2011 and a quarter-on-quarter increase of 19% from $184.3 million for the first quarter of 2012;
  • net revenue from the traditional outdoor billboard network for the second quarter of 2012 was $13.7 million, meeting the guidance of $13-15 million. This represented a year-on-year increase of 6% from $12.9 millionfor the second quarter of 2011.
• GAAP net income attributable to Focus Media for the second quarter of 2012 was $58.9 million, representing a year-on-year increase of 38% from $42.8 million for the second quarter of 2011 and a quarter-on-quarter increase of 55% from $37.9 million for the first quarter of 2012.
• Non-GAAP net income attributable to Focus Media was $81.9 million, exceeding the mid-point of the Company's guidance range of $78-$80 million by 4%, and representing a year-on-year increase of 30% from non-GAAP net income attributable to Focus Media of $62.9 million for the second quarter of 2011 and a quarter-on-quarter increase of 33% from non-GAAP net income attributable to Focus Media of $61.6 million for the first 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 $0.44, representing a year-on-year increase of 47% from $0.30 per fully diluted ADS for the second quarter of 2011 and a quarter-on-quarter increase of 57% from $0.28 per fully diluted ADS for the first quarter of 2012.
• Non-GAAP net income attributable to Focus Media per fully diluted ADS was $0.62, representing a year-on year increase of 41% from $0.44 per fully diluted ADS for the second quarter of 2011 and a quarter-on-quarter increase of 35% from $0.46 per fully diluted ADS for the first quarter of 2012.

Business Outlook for Third Quarter 2012

The Company provides the following guidance with respect to the quarter ending September 30, 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 $241-$243 million, the mid-point of which would represent year-on-year growth of 23% and quarter on quarter growth of 10%. Net revenues for the non-core business (the traditional outdoor billboard network) are expected to be in the range of $13-$14 million. The Company's non-GAAP net income is expected to be in the range of $92-$94 million. The Company estimates the weighted average fully diluted ADS count for the quarter at 133.8 million, assuming no further share repurchases during the quarter.

SHANGHAI, August 23, 2012 /PRNewswire-Asia/ -- Focus Media Holding Limited ("Focus Media" or the "Company") (Nasdaq: FMCN) today announced that a committee of independent directors of the Company's board of directors (the "Independent Committee") has selected J.P. Morgan Securities (Asia Pacific) Limited ("J.P. Morgan") as its financial advisor and Kirkland & Ellis International LLP ("Kirkland & Ellis") as its legal counsel.

As previously announced, the Company's board of directors formed the Independent Committee to consider a "going-private" transaction (the "Transaction") for $27.00 in cash per American depositary share, or $5.40 in cash per ordinary share, proposed by affiliates of FountainVest Partners, The Carlyle Group, CITIC Capital Partners, CDH Investments and China Everbright Limited and Mr. Jason Nanchun Jiang, Chairman of the board of directors and Chief Executive Officer of Focus Media, and his affiliates, in a preliminary non-binding proposal letter, dated August 12, 2012.

J.P. Morgan and Kirkland & Ellis will assist the Independent Committee in its work in connection with the 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.

SHANGHAI, Aug.13, 2012 /PRNewswire-Asia/ -- Focus Media Holding Limited ("Focus Media" or the "Company") (Nasdaq: FMCN) today announced that its Board of Directors has received a preliminary non-binding proposal letter, dated August 12, 2012, from affiliates of FountainVest Partners, The Carlyle Group, CITIC Capital Partners, CDH Investments and China Everbright Limited and Mr. Jason Nanchun Jiang, Chairman of the Board and Chief Executive Officer of Focus Media, and his affiliates (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.

According to the proposal letter, the Consortium Members will form an acquisition company for the purpose of implementing the Transaction, and the Transaction is intended to be financed with a combination of debt and equity capital. The proposal letter states that the Consortium Members have been in discussions with Citigroup Global Markets Asia Limited, Credit Suisse AG, Singapore Branch and DBS Bank Ltd. about financing the Transaction and that these banks have provided certain of the Consortium Members with a letter dated August 11, 2012 indicating that they are highly confident of their ability to fully underwrite the debt financing of the Transaction subject to the terms and conditions set out therein. A copy of the proposal letter is attached hereto as Exhibit A.

The Company's Board of Directors has formed a committee of independent directors (the "Independent Committee") to consider the proposed transaction. The Independent Committee is authorized to retain advisors, including an independent financial advisor and legal counsel, to assist it in its work. Simpson Thacher & Bartlett is acting as the Company's U.S. counsel in connection with the 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.

Highlights for first Quarter 2012:

• Total net revenue for the first quarter of 2012 was $199.6 million, of which
  
  • aggregate net revenue from the LCD display network, in-store network, poster frame network and movie theater network was $184.3 million, which exceeded by approximately 4% the mid-point of the Company's guidance range of $177-179 million. This represented an increase of 35% from $136.1 million for the first quarter of 2011 and;
  • net revenue from the traditional outdoor billboard network for the first quarter of 2012 was $15.3 million, which exceeded by approximately 9% the mid-point of the guidance range of $13-15 million. This represented an increase of 46% from $10.5 million for the first quarter of 2011.
• GAAP net income attributable to Focus Media was $37.9 million, representing an increase of 85% from$20.5 million for the first quarter of 2011.
• Non-GAAP net income attributable to Focus Media for the first quarter of 2012 was $61.6 million, exceeding the mid-point of the Company's guidance range of $58-$60 million by 4%, and representing an increase of 45% from non-GAAP net income attributable to Focus Media of $42.4 million for the first quarter of 2011. 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 $0.28, representing an increase of 87% from $0.15 per fully diluted ADS for the first quarter of 2011.
• Non-GAAP net income attributable to Focus Media per fully diluted ADS was $0.46, representing an increase of 53% from $0.30 per fully diluted ADS for the first quarter of 2011.

Jason Jiang, Chairman and Chief Executive Officer of Focus Media said, "In the first quarter of 2012, our year-on-year revenue growth was mainly driven by the strength of our poster frame and in-store networks due to their exposure to promotion spending budgets which tend to be less affected by macroeconomic uncertainty, mitigating slower growth of our LCD network which was affected by cut back on branding budgets, which tend to be impacted by macroeconomic uncertainties. We have since second quarter of 2012 seen some form of stabilization in the advertising environment including branding spending, despite we have yet to see return to normalization. We remain confident and will continue to strive to achieve our business objectives for the year."

Business Outlook for Second Quarter 2012

The Company provides the following guidance with respect to the quarter ending June 30, 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$211-$213 million, the mid-point of which would represent year-on-year growth of 28% and quarter on quarter growth of 15%. Net revenues for the non-core business (the traditional outdoor billboard network) are expected to be in the range of $13-$15 million. The Company's non-GAAP net income is expected to be in the range of $78-$80 million. The Company estimates the weighted average fully diluted ADS count for the quarter at 133.8 million, assuming no further share repurchases during the quarter.

Highlights for Fourth Quarter 2011:

• Total net revenue for the fourth quarter of 2011 was $256.4 million, of which
• aggregate net revenue from the LCD display network, in-store network, poster frame network and movie theater network was $238.8 million, which exceeded by approximately 12% the mid-point of the Company's guidance range of $212-214 million. This represented an increase of 22% from $196.1 million for the third quarter of 2011 and an increase of 63% from $146.8 million for the fourth quarter of 2010; and
• net revenue from the traditional outdoor billboard network for the fourth quarter of 2011 was $17.6 million, which exceeded by approximately 17% the mid-point of the guidance range of $14-16 million. This represented an increase of 21% from $14.6 million for the third quarter of 2011 and an increase of 35% from$13.0 million for the fourth quarter of 2010.
• GAAP net income attributable to Focus Media was $75.4 million, representing an increase of 21% from$62.2 million for the third quarter of 2011 and an increase of 60% from $47.2 million for the fourth quarter of 2010.
• Non-GAAP net income attributable to Focus Media for the fourth quarter of 2011 was $96.0 million, exceeding the mid-point of the Company's guidance range of $88-$90 million by 8%, and representing an increase of 16% from non-GAAP net income attributable to Focus Media of $82.7 million for the third quarter of 2011 and an increase of 64% from $58.5 million for the fourth quarter of 2010. 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 $0.55, representing an increase of 25% from $0.44 per fully diluted ADS for the third quarter of 2011 and an increase of 67% from $0.33 per fully diluted ADS in the fourth quarter of 2010.
• Non-GAAP net income attributable to Focus Media per fully diluted ADS was $0.70, representing an increase of 19% from $0.59 per fully diluted ADS for the third quarter of 2011 and an increase of 71% from $0.41 per fully diluted ADS for the fourth quarter of 2010.

Jason Jiang, Chairman and Chief Executive Officer of Focus Media said, "We are encouraged by our solid operating performance across all our core business lines as we ended 2011 on a strong note. Our strong fourth quarter performance was partially helped by some advertisers starting advertising campaigns in late 2011 due to an earlier Chinese lunar new year in 2012. Despite a weaker first quarter due to seasonality associated with an earlier Chinese new year, we remain confident over the continuous growth of advertising revenues for 2012. As we look forward to 2012, while we stay focused on improving our core businesses performance, we will continue to explore new business models for employing interactive screens."

Kit Low, Chief Financial Officer of the Company, added, "We registered very strong revenue momentum, while achieving encouraging cashflow momentum in 2011. We saw marked margin expansion across all our core business lines in 2011 as we continued to unlock the respective business line operating leverage. In the fourth quarter of 2011, the Company achieved aggregate net revenue year-on-year growth in our LCD display network, in-store network, poster frame network and movie theater network of 63%, and quarter-on-quarter growth of 22%. GAAP net income attributable to Focus Media and non-GAAP net income attributable to Focus Media for the fourth quarter of 2011 was $75.4 million and $96.0 million, respectively. In the fourth quarter of 2011, the Company generated a net cash inflow from operating activities after deducting amounts paid for the purchase of equipment and subsidiaries of $112.7 million. As a result, for the year 2011, the Company achieved: 1) cumulative net cash inflow from operating activities, after deducting the purchase of equipment and subsidiaries, of $228.0 million, an increase of 81% from $126.3 million for full year 2010; and 2) a non-GAAP Return on Tangible Equity of 36% versus 24% in 2010 (note). We will continue our operating and financial discipline in growing cash flow and further improving our Return on Tangible Equity in 2012."

Business Outlook for First Quarter 2012

The Company provides the following guidance with respect to the quarter ending March 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 $177-$179 million, the mid-point of which would represent year-on-year growth of 31% and quarter on quarter decline of 25% due to seasonality as a result of Chinese lunar new year holidays during the quarter. Net revenues for the non-core business (the traditional outdoor billboard network) are expected to be in the range of $13-$15 million. The Company's non-GAAP net income is expected to be in the range of $58-$60 million. The Company estimates the weighted average fully diluted ADS count for the quarter at 135 million, assuming no further share repurchases during the quarter.

SHANGHAI, Jan. 6, 2012 /PRNewswire-Asia/ -- Focus Media Holding Limited ("Focus Media") (Nasdaq: FMCN) today announced that its audit committee received the results of the third-party, independent full-count census of the number of displays in Focus Media's LCD display network.  The census was independently conducted by Ipsos Marketing Consulting Company ("Ipsos") in November and December 2011. Ipsos is the world's fifth largest market research company.(1)

The census results from Ipsos show that the total number of displays in Focus Media's LCD display network was 185,174 (excluding 103 displays in Lhasa) (see Appendix I). The table below sets forth a summary of the census results.

In the audit committee's opinion, the two independent surveys and this independent census demonstrate that the display count figures disclosed by Focus Media are substantially accurate

SHANGHAI , Dec. 22 , 2011/PRNewswire-Asia/ -- Focus Media Holding Limited ("Focus Media") (Nasdaq: FMCN - News) today announced that its audit committee received the results of the second of two third-party, independent surveys on the number of displays in Focus Media's LCD display network and its poster frame network. The survey was independently conducted by Synovate in December 2011 . Synovate is the world's sixth largest market research company (1). To conduct the survey, Synovate used a Stratified Random Sampling methodology. According to Synovate, based on the Sampling Distribution Theory, the actual audited display counts can be projected to reflect the total number of Focus Media's displays with a +/- 1% sampling error at a 99% confidence level.

Questions Remain for FMCN and the Handset Six

There were two rounds of allegations and rebuttals between Muddy Waters ("MW") vs. Focus Media (FMCN), respectively, so it is should be no surprise that we have followed this story closely. The one issue we feel needs added attention is MW's allegations that the acquisitions of six handset companies ("The Handset Six") had not been consummated, a point of contention discussed in both reports.

To see the rest of our commentary, please go here

Disclosure:  The GeoTeam holds no Positions in FMCN, long or short.

Muddy Waters rates Focus Media Holding Ltd. (NASDAQ: FMCN) shares a Strong Sell because of significant overstatement of the number of screens in its LCD network and its Olympus-style acquisition overpayments. The $1.1 billion1 in write-downs from its acquisitions exceed one-third of FMCN’s enterprise value, making FMCN’s acquisitive behavior more destructive than Olympus’s to shareholder value. FMCN insiders have sold at least $1.7 billion worth of stock (two-thirds of FMCN’s enterprise value) since FMCN’s IPO. 2 At the same time, the insiders and their business associates further enrich themselves by trading in FMCN assets, while costing FMCN shareholders substantial sums of money.

• FMCN has been fraudulently overstating the number of screens in its LCD network by approximately 50%. This is similar to China MediaExpress Holdings, Inc. (OTC: CCME), which we reported is a fraud on February 3, 2011.  We therefore question whether FMCN’s core LCD business is viable.

• Like Olympus, FMCN is significantly and deliberately overpaying for acquisitions, writing down $1.1 billion out of $1.6 billion in acquisitions since 2005. These write-downs are equivalent to one-third of FMCN’s present enterprise value.

• Our research shows that FMCN has claimed to acquire, write down, and dispose of companies that it never actually purchased.  Investors should be concerned about to where cash actually moved in these transactions, and about the integrity of reported results.

• FMCN has written at least 21 acquisitions down to zero and then given them away for no consideration.  We show that many of these write-downs are not justified. There are several possible nefarious reasons FMCN gives acquisitions away, including doing so may put FMCN’s problems beyond the reach of auditors.

• Insiders have used FMCN as their counterparty in trading in and out of FMCN subsidiary Allyes, with several individuals earning a total of at least $70.1 million, while shareholders lost $159.6 million.

• Sales of FMCN shares by insiders have netted them at least $1.7 billion since FMCN went public in 2005.

Third Quarter 2011 Results

• Total net revenue for the third quarter of 2011 was $210.7 million year-on-year growth of 53% from $128.4 million for the third quarter of 2010
• Non-GAAP net income attributable to Focus Media per fully diluted ADS for the third quarter of 2011 was $0.59, representing year-on year growth of 69% from $0.35 per fully diluted ADS for the third quarter of 2010 and quarter-on-quarter growth of 34% from $0.44 for the second quarter of 2011.

Highlights for Second Quarter 2011:

• Total net revenue for the second quarter of 2011 was $179.0 million.

• GAAP net income attributable to Focus Media for the second quarter of 2011 was $42.8 million, representing an increase of 109% from $20.5 million for the first quarter of 2011 and an increase of 69% from $25.3 million for the second quarter of 2010.

• Non-GAAP net income attributable to Focus Media for the second quarter of 2011 was $62.9 million, exceeding the mid-point of the Company's guidance range of $54-$56 million by 14%, representing year-on-year growth of 42% from non-GAAP net income attributable to Focus Media of $44.3 million for the second quarter of 2010 and quarter-on-quarter growth of 48% from non-GAAP net income attributable to Focus Media of $42.4 million for the first quarter of 2011. Please see the sections on "Use of Non-GAAP Financial Measures" and "Reconciliation of GAAP to non-GAAP" elsewhere in this announcement for more information about the non-GAAP measures referred to within this announcement.

• GAAP net income attributable to Focus Media per fully diluted ADS for the second quarter of 2011 was $0.30, representing an increase of 100% from $0.15 per fully diluted ADS for the first quarter of 2011 and an increase of 76% from $0.17 per ADS in the second quarter of 2010.

• Non-GAAP net income attributable to Focus Media per fully diluted ADS for the second quarter of 2011 was $0.44, representing year-on year growth of 47% from $0.30 per fully diluted ADS for the second quarter of 2010 and quarter-on-quarter growth of 47% from $0.30 for the first quarter of 2011.

Jason Jiang, Chairman and Chief Executive Officer of Focus Media said, "We are on schedule to complete installation of Focus Media's interactive screens in seven cities by October. We believe installation of these interactive screens is a vital revolutionary step that will transform our relationships with Chinese consumers by forming an intimate and interactive tie between the Focus media platform and Chinese consumers, providing advertisers with an interactive and measurable advertising media platform that can make a direct sales impact. We believe our offering of an interactive and measurable media platform will not only meaningfully expand our media resources, but it will also greatly enhance our value proposition and pricing power to advertisers."

Business Outlook for Third Quarter 2011

The Company provides the following guidance with respect to the third quarter ending September 30, 2011:

• Net revenues for the core business (inclusive of the LCD display network and other, the in-store network and the poster frame network) are expected to be in the range of $175-$177million, the mid-point of which would represent year-on-year growth of 37% and quarter-on-quarter growth of 6%.

• Net revenues for the non-core business (the traditional outdoor billboard network) are expected to be in the range of $11-$13 million.

• The Company's non-GAAP net income is expected to be in the range of $68-$70 million. Our non-GAAP net income guidance excludes any contribution from our 15% stake in VisionChina. The Company estimates the weighted average fully diluted ADS count for the quarter at 141.5 million, assuming no further share repurchases during the quarter. Works out to about $0.49 vs. $0.43 est.

SHANGHAI, July 6, 2011 /PRNewswire-Asia/ -- Focus Media Holding Limited (Nasdaq: FMCN), China's largest out-of-home digital media group, today announced that they have entered into a definitive agreement with Fosun International, one of Focus Media's shareholders, pursuant to which Focus Media will repurchase from Fosun International 1,956,310 ADSs, each representing five ordinary shares of Focus Media at a price ofUS$30.67 per ADS (or US$6.134 per ordinary share), totaling $60 million through a privately negotiated transaction.

Inclusive of this block repurchase, Focus Media has to date approximately spent $300 million of its previously announced share repurchase program. ADSs and ordinary shares will be cancelled, subject to customary cancellation procedures, upon repurchase.

We believe that our current cash and cash equivalents and cash flow from operations will be sufficient to meet our anticipated cash needs including for working capital and capital expenditures, for the foreseeable future. We may, however, require additional cash resources due to changed business conditions or other future developments. If these sources are insufficient to satisfy our cash requirements, we may seek to sell additional equity or debt securities or obtain a credit facility.

To date, we have financed our operations primarily through cash generated from operating activities and sales of equity in private and public transactions.

We believe that our current cash and cash equivalents, cash flow from operations and the proceeds from our most recent private offering to JJ Media Investment Holding Limited will be sufficient to meet our anticipated cash needs, including for working capital and capital expenditures, for the foreseeable future. These additional cash needs may include costs associated with the expansion of our network, such as the purchase of flat-panel displays and LED digital billboards, and increased location cost, share repurchase program, and payment of contingent considerations related to the acquisition of our poster frame business, as well as possible acquisitions of our regional distributors. We are also required under PRC law to set aside 10% of our after-tax profits into a general reserve fund. We expect that revenues from operation of our advertising network will be sufficient to cover any such obligations. We may, however, require additional cash resources due to changed business conditions or other future developments

SHANGHAI, June 23, 2011 /PRNewswire-Asia/ -- Focus Media Holding Limited (Nasdaq: FMCN), China's largest out-of-home lifestyle community digital media group, today announced its intention to increase the size of its previously announced share repurchase program from US$300 million to US$450 million and to extend the termination date of the repurchase program to December 31, 2013 from June 30, 2011. The other terms of the repurchase program will remain unchanged and Focus Media may repurchase its issued and outstanding American depositary shares ("ADSs") using the remaining portion of the program.

The repurchases will be made from time to time on the open market at prevailing market prices, in block trades, other privately negotiated transactions or otherwise in accordance with applicable laws and regulations. The purchases will be made subject to restrictions relating to volume, price and timing. The timing and extent of any purchases will depend upon market conditions, the trading price of its ADSs and other factors. Focus Media expects to continue to implement this share repurchase program in a manner consistent with market conditions and the interest of the shareholders and in compliance with the company's securities trading policy.

To date, the Company has cumulatively spent approximately $240 million in share repurchases on its previously announced share repurchase program.

First Quarter Results:

• Total net revenue for the first quarter of 2011 was $146.6 million
• Aggregate net revenue from the LCD display network (including the movie theater network), in-store network and poster frame network was $136.1 million, which exceeded by approximately 11% the mid-point of the Company's guidance range of $122-124 million. This represented year-on-year growth of 54% from $88.1 million for the first quarter of 2010; and
• Net revenue from the traditional outdoor billboard network for the first quarter of 2011 was $10.5 million, meeting the Company's guidance of $10-11 million. This represented year-on-year growth of 21% from $8.7 million for the first quarter of 2010.
• GAAP net income attributable to Focus Media for the first quarter of 2011 was $20.5 million, compared to $47.2 million for the fourth quarter of 2010 due to seasonality and GAAP net loss of $1.0 million for the first quarter of 2010.
• Non-GAAP net income attributable to Focus Media for the first quarter of 2011 was $42.4 million, also exceeding the mid-point of the Company's guidance range of $36-$38 million by 15%, representing year-on-year growth of 83% from non-GAAP net income attributable to Focus Media of $23.2 million for the first quarter of 2010. Please see the sections on "Use of Non-GAAP Financial Measures" and "Reconciliation of GAAP to non-GAAP" elsewhere in this announcement 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 $0.15, compared to $0.33 per fully diluted ADS for the fourth quarter of 2010 due to seasonality and a loss of $0.01 per ADS in the first quarter of 2010.
• Non-GAAP net income attributable to Focus Media per fully diluted ADS was $0.30, representing year-on year growth of 88% from $0.16 per fully diluted ADS for the first quarter of 2010.

Jason Jiang, Chairman and Chief Executive Officer of Focus Media said, "We are encouraged by the strong start for the year, and are confident of reaching our business objectives for the rest of the year. Nevertheless, there remains a bit of uncertainty over the PRC macro-economic environment as a result of the continued economic tightening measures. We will continue to work diligently to navigate through the challenges ahead to execute our business plan. We plan to launch Focus Media's next generation of screens in seven cities in the second half of this year. We believe these next generation screens will equip Focus Media with capabilities to provide interactive, measurable, location based search (LBS) services to advertisers, which we believe is of great importance for Focus Media's next era of growth. We also plan to embark upon a small minority investment in a company that will work hand in hand with Focus Media to provide online and mobile services support to enhance Focus Media's LBS capability."

• Net revenues for the core business (inclusive of the LCD display network and other, the in-store network and the poster frame network) are expected to be in the range of $149-$151 million, the mid-point of which would represent year-on-year growth of 34% and quarter on quarter growth of 10%.
• Net revenues for the non-core business (the traditional outdoor billboard network) are expected to be in the range of $11-$13 million. The Company's non-GAAP net income is expected to be in the range of $54-$56 million.
• Our non-GAAP net income guidance excludes any contribution from our 15% stake in VisionChina.

The Company estimates the weighted average fully diluted ADS count for the quarter at 143 million, assuming no further share repurchases during the quarter.

Highlights for Fourth Qquarter's 2010:

• Total net revenue for the fourth quarter of 2010 was $159.7 million, of which
  • Aggregate net revenue from the LCD display network (including the movie theater network), in-store network and poster frame network was $146.7 million, which exceeded by approximately 12% the mid-point of the Company's guidance range of $130-132 million.  This represented an increase of 14% from $128.4 million for the third quarter of 2010 and an increase of 45% from $100.9 million for the fourth quarter of 2009; and
  • Net revenue from the traditional outdoor billboard network for the fourth quarter of 2010 was $13.0 million, which exceeded by approximately 24% the mid-point of the guidance range of $10-11 million.  This represented an increase of 46% from $8.9 million for the third quarter of 2010 and an increase of 30% from $10.0 million for the fourth quarter of 2009.  
• GAAP net income attributable to Focus Media was $47.2 million, compared to $112.7 million for the third quarter of 2010 (which included one-off income of $79.0 million resulting from the sale of our Internet business) and GAAP net loss of $57.0 million for the fourth quarter of 2009.  
• Non-GAAP net income attributable to Focus Media for the fourth quarter of 2010 was $58.5 million, also exceeding the mid-point of the Company's guidance range of $52-$53 million by 11%, representing an increase of 13% from non-GAAP net income attributable to Focus Media of $51.8 million for the third quarter of 2010 and an increase of 72% from $34.1 million for the fourth quarter of 2009. 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 $0.33, compared to $0.76 per fully diluted ADS for the third quarter of 2010 and a loss of $0.42 per ADS in the fourth quarter of 2009.
• Non-GAAP net income attributable to Focus Media per fully diluted ADS was $0.41, representing an increase of 17% from $0.35 per fully diluted ADS for the third quarter of 2010 and an increase of 71% from $0.24 per fully diluted ADS for the fourth quarter of 2009.  

Highlights for Full Year 2010:

• Total net revenue for full year 2010 was $516.3 million, of which
  • Aggregate net revenue from the LCD display network (including the movie theater network), in-store network and poster frame network was $475.4 million, representing an increase of 37% from $347.5 million for full year 2009 ; and
  • Net revenue from the traditional outdoor billboard network for full year 2010 was $40.9 million.
• GAAP net income attributable to Focus Media was $184.3 million, compared to GAAP net loss of $213.3 million for full year 2009.  
• Non-GAAP net income attributable to Focus Media for full year 2010 was $177.8 million, doubling from $88.7 million for full year 2009. 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 for full year 2010 was $1.26, compared to a net loss of $1.64 per ADS for full year 2009.
• Non-GAAP net income attributable to Focus Media per fully diluted ADS for full year 2010 was $1.21, an 81% increase from $0.67 per fully diluted ADS for full year 2009.

Jason Jiang, Chairman and Chief Executive Officer of Focus Media said, "2010 was a year of strong and robust growth through refocusing on our core businesses. We continue to see exciting opportunities ahead of us in 2011. The operating momentum continued to be strong as we step into 2011.  Our core business's value proposition to advertisers is gaining momentum as the strength and effectiveness of our core business is becoming increasingly recognized by advertisers. Meanwhile, we believe the aggressive ad price hikes of traditional TV broadcasters have presented exciting growth opportunities to us. We have seen meaningful increases in spending on our network by existing customers as well as strong momentum in new customers additions. Our focus in 2011 will continue to be augmenting our core business and improving our value propositions to advertisers by: 1) Enabling interactivity of our core media resources; 2) Restructuring of our 1st and 2nd tier cities networks A and B to create more network capacity resources; 3) Expanding our 3rd and 4th tier cities network so as to increase our utilization rates in those cities."

Kit Low, the Company Chief Financial Officer added, "We ended 2010 on a very strong note. Not only did we register strong revenue momentum in the fourth quarter of 2010, we also achieved very strong cashflow momentum. In the fourth quarter of 2010, the Company achieved aggregate net revenue year-on-year growth in our LCD display (including the movie theater network), in-store and poster frame business of 45%, and quarter-on-quarter growth of 14%. GAAP net income attributable to Focus Media and Non-GAAP net income attributable to Focus Media for the fourth quarter of 2010 was $47.2 million and $58.5 million, respectively.  In the fourth quarter of 2010, the Company generated a net cash inflow from operating activities after deducting the purchase of equipment and subsidiaries (including earn-out payments) of $87.0 million.  As a result, for the year 2010 the Company achieved: 1) Cumulative net cash inflow from operating activities, after deducting the purchase of equipment and subsidiaries, of $126.3 million versus $57.7 million in 2009; 2) A Non-GAAP Return on Tangible Equity of 24% versus 13% in 2009 (note); and 3) An increase of about 500 new customer accounts, bringing our total number of customer accounts to about 4,350.  We will continue our operating and financial discipline in growing cash flow and improving our Return on Tangible Equity in 2011."

Business Outlook for First Quarter 2011

The Company provides the following guidance with respect to the first quarter ending March 31, 2011:

• Net revenues for the core business (inclusive of the LCD display network and other, the in-store network and the poster frame network) are expected to be in the range of $122-$124 million, the mid-point of which would represent year-on-year growth of 40% and quarter on quarter decline of 16% (due to seasonality).
• Net revenues for the non-core business (the traditional outdoor billboard network) are expected to be in the range of $10 - $11 million.
• The Company's non-GAAP net income is expected to be in the range of $36-$38 million. Works out to about $0.26 vs. $0.22 est.

The Company estimates the weighted average fully diluted ADS count for the quarter at 143 million, assuming no further share repurchases during the quarter.

Based on the existing business outlook, the Company expects earn-out payments remaining in 2011, spilled over from the fourth quarter of 2010, to be no more than $1.6 million.

Highlights for Third Quarter 2010:

• Total net revenue for the third quarter of 2010 was $137.4 million.

• GAAP net income attributable to Focus Media was$112.7 million, compared to $25.3 millionfor the second quarter of 2010, and net loss attributable to Focus Media of $127.6 millionfor the third quarter of 2009. The GAAP net income for the third quarter of 2010 includes a non-recurring income of $79.0 millionresulting from the sale of our Internet business.

• Non-GAAP net income attributable to Focus Media for the third quarter of 2010 was $51.8 million, also exceeding the mid-point of Company's guidance range of $48-$49 million by 7%, compared to non-GAAP net income attributable to Focus Media of $44.3 millionfor the second quarter of 2010 and non-GAAP net income attributable to Focus Media of $7.9 millionfor the third quarter of 2009.

• GAAP net income attributable to Focus Media per fully diluted ADS was $0.76, compared to $0.17 per fully diluted ADS for the second quarter of 2010 and a loss of $0.99 per ADS in the third quarter of 2009.

• Non-GAAP net income attributable to Focus Media per fully diluted ADS was $0.35, compared to$0.30per fully diluted ADS for the second quarter of 2010, and $0.06 per fully diluted ADS for the third quarter of 2009.

Jason Jiang, the Chairman and the Chief Executive Officer of the Company said, "In the third quarter of 2010, we managed to achieve record high combined LCD display network and in-store network revenue, exceeding the last best performing quarter in the history of the Company, the third quarter of 2008. If we were to exclude revenue contribution from the acquired in-store CGEN network in the third quarter of 2008, the total revenues of our core business in the third quarter of 2010 also achieved a historical high. We are thankful of the hard work and dedication of the Focus Media team, and the competitive underlying strength of our core business. We will continue striving to sustain and leverage our strategic and competitive operational strength to enhance the value of the Company."

Kit Low, the Chief Financial Officer of the Company added, "In the third quarter of 2010, the Company achieved aggregate net revenue year on year growth in our LCD display, in-store and poster frame business of 45%, and quarter on quarter growth of 14%. GAAP net income and Non-GAAP net income for the third quarter of 2010 are $112.7 million and $51.8 million, respectively. In the third quarter of 2010, the Company generated a net cash inflow from operating activities after deducting the purchase of equipment and subsidiaries (including earn-out payments) of $23.8 million. In the first three quarters of 2010, the Company cumulatively generated a net cash inflow from operating activities and purchase of equipment and subsidiaries of $39.3 million."

The Company provides the following guidance with respect to the fourth quarter ending December 31, 2010:

• Net revenues for the core business (inclusive of the LCD display network and other, the in-store network and the poster frame network) are expected to be in the range of $130 -$132 million, the mid-point of which would represent quarter-on-quarter growth of 2% and year-on-year growth of 30%.
• Net revenues for the non-core business (the traditional outdoor billboard network) are expected to be in the range of $10 - $11 million.
• The Company's non-GAAP net income is expected to be in the range of $52-$53 million. The Company estimates the weighted average fully diluted ADS count for the quarter at 142 million, assuming no further share repurchases during the quarter.

Guidance implies EPS of $0.37 compared to an estimate of $0.30.

Page 27 of 2009 20F

On or about November 27, 2007, Eastriver Partners, Inc. filed a purported class action lawsuit in the United States District Court for the Southern District of New York against us and the underwriters of our follow-on offering of November 2007. On or about December 21, 2007, Scott Bauer filed a purported class action lawsuit in the United States District Court for the Southern District of New York against us, certain of our officers and directors, and the underwriters of our follow-on offering of November 2007. Both complaints allege that our registration statement on Form F-1 on November 1, 2007, as amended, and the related prospectus contained inaccurate statements of material fact. On April 24, 2008, the court consolidated the Eastriver Partners, Inc. and Scott Bauer actions into an action captioned In re Focus Media Holding Limited Litigation and named Iron Workers Local No. 25 Pension Fund as lead plaintiff in the consolidated action. On June 23, 2008, Lead Plaintiff filed a consolidated amended complaint. Specifically, the complaints allege that we failed to disclose reduced gross margins in our Internet advertising business division due to acquisitions we made. The complaint filed by Scott Bauer also alleges that we issued a press release concerning our second quarter 2007 financial results that contained inaccurate statements of material fact. On September 5, 2008, we, certain of our officers and directors, and the underwriters filed a motion to dismiss the consolidated amended complaint. On November 5, 2008, the lead plaintiff filed its opposition to the motion to dismiss. A reply brief was filed on December 5, 2008. On March 29, 2010, the court issued an opinion granting our motion to dismiss. On March 30, 2010, the court entered a judgment dismissing the case. The plaintiffs filed a notice of appeal on April 29, 2010 appealing the judgment granting our motion to dismiss. We intend to continue to defend against these lawsuits vigorously as we believe we have meritorious defenses to the claims alleged. However, there can be no assurance that we will prevail in the suit on appeal and any adverse outcome of these cases could have a material adverse effect on our business or results of operations. 

On February 11, 2008, Ying Ping, a PRC citizen, filed an arbitration application in Beijing with China International Economic and Trade Arbitration Commission (“CIETAC”) against us, requesting us, (i) to continue to perform a Share Purchase Agreement, dated as of March 20, 2008, between Ying Ping and the Company; (ii) to pay an overdue share purchase price in the amount of $15.6 million and accrued interests thereof; and (iii) to bear their legal counsel fee in the amount of $0.3 million and other relevant arbitration costs. The CIETAC accepted Ying Ping’s application for arbitration on February 24, 2009. On March 10, 2010, the arbitration was settled. As a result, we agreed to pay $5.5 million to settle all the claims under the arbitration.

Highlights for Second Quarter 2010:

• Total net revenue for the second quarter of 2010 was $158.2 million, representing an increase of 27% from $124.9 million for the first quarter of 2010 and an increase of 22% from $129.5 million for the second quarter of 2009.
  
• Non-GAAP net income attributable to Focus Media for the second quarter of 2010 was $44.3 million, also exceeding the mid-point of Company's guidance range of $35.5-$37.5 million by 21%, compared to non-GAAP net income attributable to Focus Media of $23.2 million for the first quarter of 2010 and non-GAAP net income attributable to Focus Media of $28.2 million for the second quarter of 2009.
  
• Non-GAAP net income per fully diluted ADS was $0.30, compared to $0.16 per fully diluted ADS for the first quarter of 2010, and $0.22 per fully diluted ADS for the second quarter of 2009.

Jason Jiang, the Chairman and the Chief Executive Officer of the Company said, "The first half of 2010 has seen a broad based recovery of the advertising market from the first half of 2009. According to Nielsen Research, the Chinese advertising market grew 15% year on year during the first half of 2010. The Company managed to grow the core business 24% year over year during the same period, indicating that we continue to gain market share in the Chinese advertising market. We are confident that as we further stabilize and strengthen our core business, we can strive to continue our market share gain in the second half of 2010."

Third quarter ending September 30, 2010: 

Net revenues for the core business (inclusive of movie theater network of $5 million for the third quarter of 2010 as compared to the net revenues of $3.5 million for the second quarter of 2010) are expected to be in the range of $120-$123 million, the mid-point of which would represent quarter-on-quarter growth of 8% and year-on-year growth of 37%, or quarter-on-quarter growth of 7% and year-on-year growth of 36% excluding movie theater network's assumed contribution.

Net revenues for the non-core business (contribution through to the date of disposal of Internet advertising services of approximately $10 million) are expected to be in the range of $20-$22 million. 

Non-GAAP net income is expected to be in the range of $48-$49 million or $0.33 EPS. The Company estimates the weighted average fully diluted ADS count for the quarter at 147 million, assuming no further share repurchases during the quarter.

Non-GAAP EPS Figures exclude certain non-operating gains and losses as well as certain non-cash items. Non-GAAP information should not be viewed in isolation or as a substitute for reported, or GAAP information . For a more complete explanation of the company's definition of non-GAAP please refer to its financial press releases. The GeoTeam® non-GAAP figures may, from time to time, differ from company supplied figures. The GeoTeam® non-GAAP figures apply a 25% and 36% tax rate for Chinese and United States companies respectively.

Jason Jiang, the Chairman and the Chief Executive Officer of the Company said, "As we embark upon a new year, we are encouraged by the continued recovery of our operations as we stabilize our core businesses to take advantage of the recovery of the advertising market in China. We believe our core business continues to offer attractive opportunities for us to potentially double our revenue base over the medium term through steady execution of our business model. While our near term focus remain on monetizing our existing business opportunities in first and second tier cities, we have also started laying the foundation for our medium term growth, as we expand our capacities in third tier cities and beyond."

Kit Low, the Chief Financial Officer of the Company added, "In the first quarter of 2010, the Company achieved aggregate net revenue year on year growth in our LCD display, in-store and poster frame businesses of 29%. The Company continued to focus on cash flow generation during the quarter through improving collection of account receivables. We have seen the balance of account receivables decline sequentially from $172.8 million as of December 31, 2009 to $165.8 million as of March 31, 2010 while the bad debt expenses declined substantially as compared to the fourth quarter of 2009. We do however face some negative working capital cash outflows mainly related to prepayment of rental deposits in our in-store network in exchange for better rental terms, payment of accrued income tax in the fourth quarter of 2009, and settlement of liabilities related to an arbitration case on a disposed business which we accrued and disclosed since 2008. We continue to be confident that our operating cashflow will continue to improve as we progress through the year. Besides our focus on cash flow generation, we will also strive to improve our return on equity as we leverage our improving returns as well as our share repurchases."