Ku 6 Media Co (NASDAQ:KUTV)

First Quarter 2013 Financial Results

• Total revenues were US$3.07 million (RMB19.06 million) in the first quarter of 2013, representing a decrease of 8.4% fromUS$3.35 million in the fourth quarter of 2012 and a decrease of 34.4% from US$4.68 million in the first quarter of 2012
• Gross loss was US$0.07 million (RMB0.40 million) in the first quarter of 2013, as compared to a gross loss of US$0.40 million in the fourth quarter of 2012 and a gross profit of US$1.15 million in the first quarter of 2012.
• Net loss per basic and diluted ADS was US$0.04 (RMB0.22) in the first quarter of 2013, as compared to US$0.06 in the fourth quarter of 2012 and US$0.04 in the first quarter of 2012. Weighted average ADSs used to calculate basic and diluted net loss per ADS were 47.3 million in the first quarter of 2013, 47.4 million in the fourth quarter of 2012 and 50.2 million in the first quarter of 2012.

"I am pleased to announce our first quarter 2013 earnings release." Mr. Jeff Shi, Chief Executive Officer of Ku6 Media, commented, "In first quarter 2013, we enhanced our infrastructure and product design, improved our key technology and product index tremendously. The credit went to our entire technology and product team. As Mr. Kelvin Liu and Mr. Jian Lu joined Ku6 as the President and Chief Technology Officer respectively in April, with the strongly enhanced team, I believe our product design and user experience will get into another level in the near future.

First Quarter 2013 Results

Fourth Quarter 2012 Results

• Total revenues were US$3.35 million (RMB20.87 million) in the fourth quarter of 2012, representing an increase of 9.6% fromUS$3.06 million in the third quarter of 2012 and a decrease of 24.2% from US$4.42 million in the fourth quarter of 2011.
• GAAP net loss was US$2.98 million (RMB18.57 million), as compared to a net loss of US$3.25 million in the third quarter of 2012 and US$3.94 million in the fourth quarter of 2011. Non-GAAP net loss, which the Company defines as net loss excluding share-based compensation expenses, was US$2.96 million (RMB18.45 million) in the fourth quarter of 2012, as compared to non-GAAP net loss of US$3.26 million in the third quarter of 2012 and US$4.46 million in the fourth quarter of 2011.
• Basic and diluted loss per ADS was US$0.06 (RMB0.39) in the fourth quarter of 2012, as compared to US$0.07 in the third quarter of 2012 and US$0.08 in the fourth quarter of 2011.

"I am pleased to announce our fourth quarter and fiscal year 2012 earnings release," Mr. Jeff Shi, Chief Executive Officer of Ku6 Media, commented, "2012 was an essential year to Ku6 Media, was the first full year since we switched our strategy to UGC business model in the third quarter of 2011. In 2012, user experience continued to be the top priority for our business. Keeping that in mind, we upgraded the backend infrastructure for our video service, polished our products by introducing major new features and established a loyal content production team with over 20,000 users. We also expanded our mobile product portfolio as 3G became more and more popular. Furthermore, we managed to reduce our cost significantly through 2012 and kept our net loss at a relatively low level of our industry. We believe with the progress we achieved in 2012, 2013 will be an even faster growing year for Ku6 Media."

Third Quarter 2012 Financial Results

• Total revenues were US$3.06 million (RMB19.21 million) in the third quarter of 2012, representing an increase of 0.9% from US$3.03 million in the second quarter of 2012 and a decrease of 27.7% from US$4.23 million in the third quarter of 2011.
• GAAP net loss was US$3.25 million (RMB20.43 million), as compared to a net loss of US$1.47 million in the second quarter of 2012 and US$12.98 million in the third quarter of 2011. Non-GAAP net loss, which the Company defines as net loss excluding share-based compensation expenses, was US$3.26 million (RMB20.46 million) in the third quarter of 2012, as compared to non-GAAP net loss of US$1.53 million in the second quarter of 2012 and US$12.52 million in the third quarter of 2011.
• Basic and diluted loss per ADS was US$0.07 (RMB0.44) in the third quarter of 2012, as compared to US$0.03 in the second quarter of 2012 and US$0.26 in the third quarter of 2011.

Mr. Jeff Shi, Chief Executive Officer of Ku6 Media, commented, "I am pleased to announce our third quarter's earnings release. We have been focused on creating an interactive online video community based on our value generating user base and devoted to improving our user experience by improving our community. During the third quarter, we launched user growth system, revamped our major website, optimized the search and recommendation functions, and also enhanced our CDN system. Both the quality and quantity of our value generating users have been growing rapidly."

BEIJING, November 1, 2012 /PRNewswire/ -- Ku6 Media Co., Ltd. ("Ku6 Media" or the "Company", NASDAQ: KUTV), a leading internet video company in China, focusing on User Generated Content ("UGC"), today announced that it has entered into an agreement with famous Chinese Internet company NetEase, Inc. ("NetEase", NASDAQ: NTES) to be the video hosting provider for its microblog business.

Pursuant to the agreement, Ku6 will provide technology support to video related activities on NetEase microblog platform, including video uploading and sharing. Meanwhile, NetEase microblog users will be given access to Ku6 Media video contents via embedded Ku6 Media video players.

"We are very pleased with our cooperation with NetEase," commented by Mr. Jeff Shi, Chief Executive Officer of Ku6 Media. "NetEase microblog is a renowned SNS platform in China, which is a great complement to our video online platform. It helps present Ku6 Media's unique original video contents to more and more Internet users. Bringing better video experiences and more joy to all Internet users is always our goal."

Second Quarter 2012 Results

• Total revenues were US$3.03 million (RMB19.24 million) in the second quarter of 2012, representing a decrease of 35.3% from US$4.68 million in the first quarter of 2012 and a decrease of 24.4% from US$4.01 million in the second quarter of 2011.
• Basic and diluted loss per ADS was US$0.03 (RMB0.19) in the second quarter of 2012, as compared to US$0.04 in the first quarter of 2012 and US$0.61 in the second quarter of 2011.

Mr. Jeff Shi, Chief Executive Officer of Ku6 Media, commented, "I am pleased to announce our second quarter's earnings release. During the second quarter, both the quality and quantity of our value generating users have grown to a record high level. We started focusing on the UGC business model in the second quarter of 2011. Ever since, we have greatly reduced our costs and expenses and steadily expanded our user base and content inventory through this new business model. We believe our advanced cost control structure and operational model are the fundaments for our sustainable development and eventual profitability.

However, since we have been trying different new monetization strategies, our total revenue in second quarter has dropped from US$4.68 million of first quarter 2012 to US$3.03 million. Going forward, as we strongly believe UGC business model will be the main stream of online video ecosystem, we intend to further strengthen our leading position in this area by bringing our users smoother, faster and more interactive video experiences through our continuously upgraded products."

2012 Q1 Highlights

• Total revenues were US$4.68 million (RMB29.47 million), a 5.9% increase from the fourth quarter of 2011; performance advertising revenue increased continuously and accounted for 80.9% of total revenues in the quarter.
• Gross profit increased continuously and was US$1.15 million (RMB7.24 million) and the gross profit margin was 24.6%, as compared to the gross profit of US$0.19 million and the gross profit margin of 4.3% in the fourth quarter of 2011. The increase was due to the further optimization of cost structure under UGC business model.
• Net loss narrowed and was US$1.79 million (RMB11.27 million), the lowest since Ku6 Media became public in 2010, as compared to a net loss of US$3.94 million in the fourth quarter of 2011. Non-GAAP net loss, which herein defined as net loss excluding share-based compensation expenses, was US$1.28 million(RMB8.06 million) in the first quarter of 2012, as compared to the non-GAAP net loss of US$4.46 million in the fourth quarter of 2011. The decrease was primarily attributable to the decrease in cost and operating expenses, which the Company optimizes the cost structure and improves the operating efficiency and the collection of accounts receivable previously written down.
• Basic and diluted loss per ADS was US$0.04 (RMB0.22) in the first quarter of 2012, as compared to US$0.08 in the fourth quarter of 2011.
• Cash and cash equivalents were US$21.79 million (RMB137.20 million) as of March 31, 2012.
• Net cash used in operating activities was US$1.07 million (RMB6.73 million) in the first quarter of 2012, as compared to US$8.30 million in the fourth quarter of 2011.
• Partnership with YouTube announced in January 2012, to allow Ku6 Media's international users to view original videos from China.
• Partnership with Channel [V] announced in March 2012, to host its official online channel on Ku6 Media's platform for Channel [V]'s current and upcoming music entertainment programs in mainland China.
• Partnership with SNS website Kaixin001 announced in May 2012, to supply technology support to all video uploading activities on Kaixin001 as the video hosting provider.
• Launched my.ku6.com, a new product that focuses on promoting value creating users on May 15, 2012.

Mr. Jeff Shi, Chief Executive Officer of Ku6 Media, commented, "I am pleased to announce another steady growing quarter after our strategy switch since the second quarter of 2011. In first quarter of 2012, we grew our revenue by 5.9% quarter over quarter, enlarged our gross profit from US$0.19 million in the fourth quarter of 2011 to US$1.15 million, and narrowed our net loss to US$1.79 million, which was the lowest since Ku6 Media became public in 2010, as compared to a net loss of US$3.94 million in the fourth quarter of 2011."

"Since the beginning of 2012, Ku6 Media has brought in reputable partners including YouTube, Channel [V] and Kaixin001. We have seen great results from the partnerships in enlarging our user base and promoting our company brand. On May 15, 2012, we officially launched my.ku6.com, a new product that focuses on promoting value creating users, as an enhancement to our original website. Different from traditional online video websites that focus on promoting contents, my.ku6.com is offering a new platform to our value creating users to communicate and common users to follow their favorite value creating users. As we've always believed that UGC business model is healthy and promising, we are devoted to be the most popular UGC video website by continuously providing our users the best services."

BEIJING, May 24, 2012 /PRNewswire-Asia/ -- Ku6 Media Co., Ltd. ("Ku6 Media" or the "Company", Nasdaq: KUTV), a leading internet video company in China, focusing on User Generated Content (UGC), today announced that it has entered into an agreement with famous Chinese SNS website Kaixin001.com ("Kaixin001").

Pursuant to the agreement, Ku6 Media, as the video hosting provider, is assisting Kaixin001 to add a brand new video sharing function by supplying technology support to all video uploading activities on Kaixin001. Users on Kaixin001 will enjoy a one-stop service that enables them to upload, store and share their videos without leaving the website. Meanwhile, users on Ku6 Media's platform can share the videos with their friends on Kaixin001 by only one click.

Mr. Jeff Shi, Chief Executive Officer of Ku6 Media, commented, "We are very pleased with the cooperation with Kaixin001. We believe our cooperation can help enlarging Ku6's user base as well as richening our users' online experience. We also hope our videos and service can bring users on Kaixin001 more fulfilling experiences and more joy."

Mr. Binghao Cheng, Chief Executive Officer of Kaixin001, added, "We are very excited about partnering up with Ku6 Media. Our video sharing function is an important feature we have launched recently. We believe it will enhance our user experience by bringing them abundant video content and also by providing a great platform for them to share their original videos."

BEIJING, March 30, 2012 /PRNewswire-Asia/ -- Ku6 Media Co., Ltd. ("Ku6 Media" or the "Company", Nasdaq: KUTV), is a leading internet video company in China, focusing on User Generated Content (UGC), today announced that it has entered into an agreement with Star China to cooperate with its well-known international music television channel Channel[V].

Pursuant to the agreement, Channel[V] will lanuch its official online channel on Ku6 Media's platform for its current and upcoming music entertainment programs in mainland China. Ku6 Media will be responsible for all non-content operations including platform operation, online promotion and IT support etc.

Mr. Jeff Shi, Chief Executive Officer of Ku6 Media, commented, "We are very pleased with the cooperation with Channel[V]. We believe this will strengthen our position in the online music entertainment area. It will also enable both parties to play to their strengths and bring users easier access to richer entertainment content, which is part of Ku6 Media's long-term mission."

Mr. Ming Tian, Chief Executive Officer of Star China, added, "We are very excited about partnering up with Ku6 Media. Their popular online video portal is a great complement to our TV channels. Through the cooperation with Ku6 Media, we will be able to deliver our excellent entertainment content to a wider group of audiences. We look forward to the great result from our cooperation."

Fourth Quarter Results 2011

 Gross profit was $0.19 million in the fourth quarter of 2011, as compared to a gross loss of $1.25 million in the third quarter of 2011 and a gross loss of $5.70 million in the fourth quarter of 2010.

 Operating expenses were $4.38 million in the fourth quarter of 2011, representing a decrease of 61.2% from$11.28 million in the third quarter of 2011 and a decrease of 55.2% from $9.77 million in the fourth quarter of 2010.

 Operating loss was $4.19 million in the fourth quarter of 2011, representing a decrease of 66.6% from $12.53 million in the third quarter of 2011 and a decrease of 72.9% from $15.46 million in the fourth quarter of 2010. Net loss was $3.94 million in the fourth quarter of 2011, representing a decrease of 69.6% from the loss of$12.98 million in the third quarter of 2011 and a decrease of 74.5% from the loss of $15.45 million in the fourth quarter of 2010. Net loss attributable to Ku6 Media per basic and diluted ADS was $0.08 in the fourth quarter of 2011, compared to $0.26 in the third quarter of 2011 and $0.44 in the fourth quarter of 2010. Weighted average ADSs used to calculate diluted net loss per ADS were 50.2 million in the fourth quarter of 2011, 50.2 million in the third quarter of 2011 and 34.8 million in the fourth quarter of 2010. As of December 31, 2011, the Company had $26.75 million in cash and cash equivalents, compared to $41.63 million as of September 30, 2011. Accounts receivable decreased by $1.40 million, Accounts payable decreased by $8.64 million, and short term loans decreased by $1.97 million.

Mr. Jeff Shi, Chief Executive Officer of Ku6 Media, commented, "Through the successful strategic transition starting in the second quarter of 2011, Ku6 Media has firmly established itself as the leader in UGC in China, with nearly 200, 000 video clips being uploaded on daily basis in February of 2012. Our Value Creating User (VCU) program, started in August 2011, has now recruited more than 5, 000 contracted VCUs, who enjoy financial rewards according to video views their uploads attract. According to Ku6 Media's internal tracking data, monthly unique visitors (UV) have reached 220 million in February 2012. With continuous efforts in cost and expense reduction, in the fourth quarter of 2011 we have achieved our first quarterly gross profit and cut our quarterly net loss to its lowest level since Ku6 Media became public in 2010. We are confident that these improvements will build a solid foundation for steady and sustainable growth."

Third Quarter 2011 Results

Second Quarter 2011 Results

BEIJING, August 2, 2011 /PRNewswire-Asia/ -- Ku6 Media Co., Ltd., (Nasdaq: KUTV) ("Ku6" or the "Company"), a leading Internet television company in China, today announces the resignation of acting CEO Haifa Zhu and appointment of CEO Yu (Jeff) Shi, both effective on August 1, 2011. Mr. Zhu will remain a Board member of Ku6.

Bruno Wu, Chairman of the Board of Ku6, comments, "Haifa has provided valuable leadership and service to the Company. The Board would like to thank Haifa for his contributions to Ku6 and wish him well. We are also pleased to have Mr. Shi joining the Ku6 management team as CEO. We believe that Jeff's leadership will ensure a smooth transition while Ku6's continues to build ourselves into a company more focused on users' needs and driven by technology and product development."

As a professional consultant, Jeff Shi worked at Arthur Andersen and KPMG Consulting for over 6 years, then joined Juneyao Group as Deputy General Manager of strategy planning and capital markets. In 2009 Mr. Shi joined Shanda Interactive Entertainment ("Shanda") as Senior Director of Strategy and Integration. Mr. Shi holds a bachelor's degree from Shanghai Jiaotong University.

Red Flag:

Internal controls were effective in 2007, but have not been effective since then.

On April 1, 2011, we entered into agreements with Shanda Media Group Limited, or Shanda Media, a wholly owned subsidiary of Shanda Interactive, pursusnt to which we agreed to issue to Shanda Media 1,538,461,538 ordinary shares for an aggregate purchase price of $50,000,000 (or $0.0325 per share) and $50,000,000 aggregate principal amount of senior convertible bond. The bond will mature in three years after issuance and will bear an interest of 3% per annum. The issuance of the ordinary shares and the convertible bond has been approved by our independent directors and shareholders. Shanda Media has committed to make the investment and we anticipate to close these transactions in the early part of the third quarter of 2011. As a result, we believe we will have sufficient liquidity to finance our 2011 anticipated operations and capital expenditure requirements, as well as achieve projected cash collections from customers and contain expenses and cash used in operations.

We believe that our current cash and cash equivalents together with the new committed investment by Shanda Interactive in the aggregate amount of $100 million will be sufficient to meet our anticipated cash needs, including for working capital, capital expenditures and various contractual obligations, for at least the next 12 months. We may require additional cash resources due to the cost of running our online video business or due to changed business conditions or other future developments, including any investments or acquisitions we may decide to pursue.

From time to time, we evaluate possible investments, acquisitions or divestments and may, if a suitable opportunity arises, make an investment or acquisition or conduct a divestment, which may have a material effect upon our liquidity and capital resources.

First Quarter Results:

• Total revenues from continuing operations were $6.6 million, up 178.5% from $2.4 million in the first quarter of 2010, and slight down 3.0% from $6.8 million in the fourth quarter of 2010.
• Net loss from continuing operations was $10.9 million, an increase of 9.9% from a loss of $9.9 million in the first quarter of 2010, and a decrease of 29.6% from a loss of $15.4 million in the fourth quarter of 2010.
• Net loss attributable to Ku6 Media per basic and diluted ADS was $0.31 in the first quarter of 2011, compared to $0.44 in the fourth quarter of 2010 and $0.39 in the first quarter of 2010. Weighted average ADS used to calculate diluted net loss per ADS was 34.8 million ADS in the first quarter of 2011, 34.8 million ADS in the fourth quarter of 2010 and 27.9 million ADS in the first quarter of 2010.

Mr. Haifa Zhu, Acting Chief Executive Officer of Ku6 Media, commented, "Ku6 Media has continued to make progress in the first quarter of 2011. Facing the future opportunities and challenges, management will actively take various measures to solidify our leading positions in technology and content, to further improve user experience, to optimize cost structure, and to improve operation efficiency. After the completions of the cash infusion, the merger with Pipi and the restructuring of our sales department, we believe that we will be in a better competitive position in Chinese online video market, and will continuously improve our financial performance."

BEIJING, April 21, 2011 /PRNewswire-Asia/ -- Ku6 Media Co., Ltd., (Nasdaq: KUTV) ("Ku6" or the "Company"), a leading Internet television company in China, announced today that Ku6 and the shareholders of Hangzhou Soushi Networking Co., Ltd. ("Pipi"), a leading P2P based internet video platform in China, have agreed to the sale of Pipi to Ku6, in an all stock transaction under which all of the equity interests in Pipi will be sold to Ku6 in exchange for an aggregate of 2,212,114,257 Ku6 ordinary shares. After the completion of the merger, Pipi will become a wholly-owned subsidiary of Ku6.

Completion of the share purchase will be subject to the condition that the shareholders of Ku6 approve the issuance of ordinary shares of Ku6 to the shareholders of Pipi at a special shareholders meeting to be convened in the near future. The transaction is expected to close in the second quarter of 2011.

Shanghai Shanda Networking Co., Ltd. ("Shanda Networking"), a wholly-owned subsidiary of Shanda Interactive Entertainment Limited (which is a major shareholder of Ku6), is one of the early investors of Pipi and holds 32% of the equity interests in Pipi. Shanda Networking will sell its equity interests to Ku6 in this transaction. A special committee, comprised of three independent directors of Ku6, represented Ku6 in the negotiations of the transaction. Based upon and subject to the qualifications, limitations and assumptions set forth in its written opinion dated April 20, 2011, the same date as KPMG Advisory (China) Limited has rendered its oral opinion, to the effect that as of that date the consideration to be paid by Ku6 was fair to Ku6 from a financial point of view. The special committee approved the proposed transaction on April 20, 2011.

All selling shareholders of Pipi intend to enter into lock-up agreements for a period of 181 days to two years after closing with respect to the Ku6 shares that they will receive in the merger.

Commenting on this merger, Mr. Haifa Zhu, Acting Chief Executive Officer of Ku6, said, "We are very pleased to announce this merger with Pipi, which we believe is one of the best P2P based internet video platforms in China. After merger with Pipi, we believe we will become the first internet television company with large-scale operations in both browser and video player in China. We believe that we will have more opportunities to achieve synergies going forward and we will continue to expand our market share, our users number and our advertising clients number in the fast-growing online video market in China."

Mr. Lianghai Yang, Chief Executive Officer of Pipi, said, "We are excited to join forces with Ku6. In March 2011, Pipi Player has reached peaked concurrent users number of about 5.3 million. I am confident that the combined company will be better positioned to compete effectively in the continually expanding online video advertising market in China."

BEIJING, April 1, 2011 /PRNewswire-Asia/ -- Ku6 Media Co., Ltd., announced today that it agreed to issue to Shanda Interactive Entertainment Limited (NasdaqGS: SNDA) ("Shanda") ordinary shares and convertible bonds in an aggregate amount of US$100,000,000.  

Ku6 agreed to issue to Shanda US$50,000,000 of ordinary shares of Ku6 at a per share price ofUS$0.0325 (or US$3.25 per ADS), representing a 1.0% discount to the average closing price for the past 15 trading days, andUS$50,000,000 aggregate principal amount of 3% senior convertible notes at face value.  The bonds will mature in three years after issuance and will bear an interest of 3% per annum, payable semi-annually. The bonds will be convertible into ordinary shares of Ku6 at a price of US$0.03925 per ordinary share (or US$3.925 per ADS), representing a 19.6% premium to the average closing price for the past 15 trading days.  The conversion rights will start after 6 months following the closing date.  The transaction is subject to the approval by the shareholders of Ku6. Closing is expected in the second quarter of 2011. The Company intends to use the net proceeds from the sale of the convertible bonds and ordinary shares for business expansion, working capital and other general corporate purposes.