◆NOWNEWS DIGITAL MEDIA TECHNOLOGY REPORTS FY 2014 FINANCIAL RESULTS
Taipei City, Taiwan, April 1, 2015-- Nownews Digital Media Technology Co. Ltd. (“Nownews” or “the Company”) (OTCQB: NDMT), a new media company that provides news, information, e-commence and multimedia platform service, today released its financial results of the fiscal year ended December 31, 2014.
Fiscal Year 2014 Highlights
• Gross profit increased approximately $0.67 million, an increase of 154%.
• Gross margin was 38% for the year ended December 31, 2014 as compared to 14% for the prior year.
“We are glad to see the profitability of our advertising business is getting stronger, thanks to our strategic focus on the more profitable segments like internet advertising and marketing” said Alan Chen, Chairman of the Company, “This year we are keeping our focus on this part of our business, and looking for more cooperation with other media platforms to increase our international presence.”
Fiscal Year 2014 Results
For the fiscal year 2014, Nownews reported net revenue of $2.93 million, a decrease of 9% from $3.23 million for the year 2013. The decrease was primarily due to the decrease in licensing revenue and E-commerce revenue, partially offset by the increase in advertisement revenue.
During the fiscal year ended December 31, 2014, the revenue from advertising was $2.36 million, a 26% increase from $1.87 million for the year ended December 31, 2013. The increase was because the Company focuses on the more profitable internet advertising and marketing.
Revenue from content licensing was $0.30 million for the year ended December 31, 2014, a decrease of 47% from $0.57 million for the year ended December 31, 2013. In 2014, the Company did not license as much content to Yahoo Taiwan, Inc. (“Yahoo Taiwan”), the Company’s top customers for the past two years due to low profits. In addition, the Company terminated low-profit news editing services to Yahoo Taiwan, which services were supplementary to the licensing arrangements with Yahoo Taiwan.
Revenue from E-commerce was $0.25 million for the year ended December 31, 2014, a decrease of 65% from $0.71 million for the year ended December 31, 2013. The decrease was primarily attributable to suspension of the E-Commerce business in April 2014 due to continuous losses. The Company is currently in the process of evaluating and adjusting this line of business.
Other revenue includes revenue from film/video editing services and licensing copyright to Chunghwa Wideband Best Network Co., Ltd. Other revenue was $0.02 million for the year ended December 31, 2014, a decrease of 75% from $0.08 million for the year ended December 31, 2013. The decrease was primarily due to the termination of editing services and decrease in licensing copyrights charged to Chunghwa Wideband Best Network Co., Ltd.
Cost of Revenue
Cost of revenue was $1.82 million for the year ended December 31, 2014, compared to $2.79 million for the year ended December 31, 2013, a decrease of $0.97 million, or 35%. The decrease was mainly due to a decrease of $0.48 million in cost of goods sold in E-commerce, a decrease in labor costs of $0.42 million due to the decrease in the number of employees in the year 2014 as a result of the Company’s efforts to reduce operating costs and expenses.
Gross profit increased approximately $0.67 million, an increase of 154% as compared to last year due to the substantial decrease in cost of revenue. Gross margin was 38% for the year ended December 31, 2014 as compared to 14% for the prior year.
Selling expenses decreased by 39% from $1.0 million for the year ended December 31, 2013 to $0.61 million for the year ended December 31, 2014. The decrease in selling expenses was primarily due to the decrease in advertisement expenses related to E-commerce and the decrease in labor costs due to decrease in the number of salespersons.
General and Administrative Expenses
General and administrative expenses decreased by 29% from $1.96 million for the year ended December 31, 2013 to $1.38 million for the year ended December 31, 2014. The decrease in general and administration expenses was principally due to the decrease in payroll resulting from reduction in the number of employees.
Interest expense for the year ended December 31, 2014 was $25,103 compared to $25,267 for the year ended December 31, 2013, a decrease of 1%. The decrease in interest expense was primarily due to reduced bank loans incurred for the year ended December 31, 2014 as compared with the year ended December 31, 2013.
As a result of the above factors, the Company has net loss of approximately $0.70 million for the year ended December 31, 2014 as compared to net loss of approximately $1.71 million for the year ended December 31, 2013, representing a decrease of loss of approximately $1.01 million or approximately 59%.
Cash, Liquidity and Financial Position
As of December 31, 2014, cash and cash equivalents were $0.07 million, compared to $0.32 million at the end of 2013. The Company had a working capital deficit of $1.42 million at December 31, 2014, with $0.89 million of current assets and $2.31 million of current liabilities. The Company believes it can successfully secure financing to meet all working capital and capital expenditure needs for the next twelve months. However, there can be no guarantee that the Company will succeed in raising additional financing.
As of December 31, 2014, long-term debt was $0.81 million.
About Nownews Digital Media Technology Co. Ltd.
Nownews Digital Media Technology Co. Ltd. (OTCQB: NDMT) is a U.S.-listed holding company, through its subsidiaries, engaging in creating, collecting and distributing news and information through its website and applications on mobile phones or tablets. Nownews is also the largest online self-produced news content provider of Taiwan and the only Taiwanese online news website fully accessible in Mainland China. After launched Professional Category news brands, we launched Nownews Mobile Web and Apps. In July 2013, Nownews launched a new concept newspaper “NOWnews”, which is the first O2O case in Taiwan. Nownews owns a great amount of brands, such as the largest online self-produced news content provider「NOWnews」, the biggest Citizen Journalist platform「WEnews」, online video shopping website「NOWshopping」, etc. Its partners include CCTV, Yahoo, MSN, Hinet, Yam, Sina and some telecoms.
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