Investor Relations

◆Nownews Digital Media Technology Reports FY 2015 First Quarter Results

05/15/2015

Taipei City, Taiwan, May 15, 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 for the first quarter of 2015.

First Quarter 2015 Highlights

• Gross profit increased approximately $0.07 million, an increase of 83% from the corresponding period in 2014.
• Gross margin was 31% for the three months ended March 31, 2015 as compared to 14% in the same period in 2014.

“Advertising business is our main source of revenue at current stage. We also need to further reduce our cost to promote the profit,” said Alan Chen, Chairman of the Company, “This year we are going to deepen our cooperation with current companies and looking for more cooperation with other media platforms to increase our international presence.”

First Quarter 2015 Results

Net Revenue

For the three months ended March 31, 2015 NOWnews reported net revenue of $0.52 million, a decrease of $0.12 million or 20% from $0.64 million for the three months ended March 31, 2014. The decrease was primarily due to the decrease in licensing revenue and E-commerce revenue, partially offset by the increase in advertisement revenue.

--Advertising

During the three months ended March 31, 2015, the revenue from advertising was $0.47 million, an increase of $0.16 million, or 52%, from $0.31 million for the three months ended March 31, 2014. The increase was because the Company focuses on the more profitable internet advertising and marketing.

--Licensing

Revenue from content licensing was $0.04 million for the three months ended March 31, 2015, a decrease of $0.02 million, or 33%, from $0.06 million for the three months ended March 31, 2014. The decrease was primarily due to the Company terminated low-profit news editing services to Yahoo Taiwan, which services were supplementary to the licensing arrangements with Yahoo Taiwan.

--E-commerce

E-commerce revenue decrease by $0.23 million, or 100%, during the three months ended March 31, 2015, compared to $0.23 million for the same period in 2014. The decrease was primarily attributable to suspension of 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

Other revenue was $1,359 for the three months ended March 31, 2015, a decrease of $0.04 million, or 100%, from $0.04 million for the three months ended March 31, 2014. The decrease was primarily due to the termination of editing services and decrease in revenue from licensing copyrights.

Cost of Revenue

Cost of revenue was $0.36 million for the three months ended March 31, 2015, compared to $0.56 million for the three months ended March 31, 2014, a decrease of $0.20 million, or 36%. The decrease was mainly due to the decrease of $0.20 million in cost of goods sold in E-commerce.

Gross Profit

Gross profit increased approximately $0.07 million, or 83%, for the three months ended March 31, 2015, as compared to the same period in 2014, due to the substantial decrease in cost of revenue. Gross margin was 31% for the three months ended March 31, 2015 as compared to 14% for the same period in 2014.

Selling Expenses

Selling expense decreased by $0.07 million, or 37%, from $0.18 million for the three months ended March 31, 2014, to $0.11 million for the three months ended March 31, 2015. 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 approximately $0.10 million, or 29%, from $0.34 million for the three months ended March 31, 2014 to $0.24 million for the three months ended March 31, 2015. 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

Interest expense for the three months ended March 31, 2015 was $1,491 compared to $5,958 for the three months ended March 31, 2014, a decrease of $4,467, or 75%. The decrease in interest expense was primarily due to reduced bank loans incurred for the three months ended March 31, 2015 as compared with the three months ended March 31, 2014. The bank loans were paid off in full during the three months ended March 31, 2015.

Net Loss

As a result of the above factors, the Company has net loss of approximately $0.19 million for the three months ended March 31, 2015 as compared to net loss of approximately $0.44 million for the three months ended March 31, 2014, representing a decrease of loss of approximately $0.25 million, or approximately 57%.

Cash, Liquidity and Financial Position

As of March 31, 2015, cash and cash equivalents were $0.03 million, compared to $0.07 million for the three months ended March 31, 2014. The Company had a working capital deficit of $1.12 million for the three months ended March 31, 2015, with $0.57 million of current assets and $1.69 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.

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.

Forward-Looking Statements

This news release contains “forward-looking statements”, which may include, but is not limited to, statements that express the company’s intentions, beliefs, expectations, strategies, predictions or any other statements relating to its future activities or other future events or conditions. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or believes" or variations (including negative variations) of such words and phrases, or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Nownews Digital Media Technology Co. Ltd. to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Forward-looking statements contained herein are made as of the date of this press release and Nownews Digital Media Technology Co. Ltd. disclaim, other than as required by law, any obligation to update any forward-looking statements whether as a result of new information, results, future events, circumstances, or if management's estimates or opinions should change, or otherwise. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, the reader is cautioned not to place undue reliance on forward-looking statements.

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