Investor Relations

◆NowNews Digital Media Technology Reports FY 2015 Third Quarter Results

11/17/2015

Taipei City, Taiwan, Nov 17, 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 third quarter of 2015.

Third Quarter 2015 Highlights

• Gross profit increased approximately $0.01 million, an increase of 1% from the corresponding period in 2014.
• Gross margin was 44% in the third quarter of 2015 as compared to 39% in the same period in 2014.

“We have been experiencing the macro-economic headwinds which had hindered our total revenue growth thus far in 2015, but we continue seeing a steady growth on advertising revenue,” said Alan Chen, Chairman of the Company, “upon the completion of the acquisition of Beijing Xintongying Culture and Communications Co., Ltd, we are going to speed up the process of developing China market in the next year. ”

Third Quarter 2015 Results

Net Revenue

For the nine months ended September 30, 2015 NowNews reported net revenue of $1.66 million, a decrease of $0.32 million or 16% from $1.98 million for the nine months ended September 30, 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 nine months ended September 30, 2015, the revenue from advertising was $1.52 million, an increase of $0.04 million, or 3%, from $1.48 million for the nine months ended September 30, 2014. The slight increase was because the Company focuses on the more profitable internet advertising and marketing business.

--Licensing

Revenue from content licensing was $0.14 million for the nine months ended September 30, 2015, a decrease of $0.10 million, or 42%, from $0.24 million for the nine months ended September 30, 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 was $1,319 for the nine months ended September 30, in 2014, representing a $0.25 million decrease, or 99%, in the nine months ended September 30, 2015. The decrease was attributable to suspension of our 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.

Cost of Revenue

Cost of revenue was $1.04 million for the nine months ended September 30, 2015, compared to $1.42 million for the nine months ended September 30, 2014, a decrease of $0.38 million, or 27%. The decrease was mainly due to the decrease of $0.24 million in cost of goods sold in E-commerce, $0.08 million in website maintenance cost, and $0.06 million in labor costs.

Gross Profit

Gross profit increased approximately $0.06 million, or 10%, for the nine months ended September 30, 2015, as compared to the same period in 2014, due to the substantial decrease in cost of revenue. Gross margin was 37.39% for the nine months ended September 30, 2015 as compared to 28.41% for the same period in 2014.

Selling Expenses

Selling expense decreased by $0.14 million, or 29%, from $0.49 million for the nine months ended September 30, 2014, to $0.35 million for the nine months ended September 30, 2015. The decrease in selling expenses was primarily due to the decrease in labor costs resulting from the decrease in the number of salespersons.

General and Administrative Expenses

General and administrative expenses decreased by approximately $0.26 million, or 27%, from $0.98 million for the nine months ended September 30, 2014 to $0.72 million for the nine months ended September 30, 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 nine months ended September 30, 2015 was $3,117 compared to $19,549 for the nine months ended September 30, 2014, a decrease of $16,432, or 84%. The decrease in interest expense was primarily due to reduced bank loans incurred for the nine months ended September 30, 2015 as compared with the nine months ended September 30, 2014. The bank loans were paid off in full in February, 2015.

Net Loss

As a result of the above factors, the Company has net loss of approximately $0.50 million for the nine months ended September 30, 2015 as compared to net loss of approximately $0.93 million for the nine months ended September 30, 2014, representing a decrease of loss of approximately $0.43 million, or approximately 47%.

Cash, Liquidity and Financial Position

As of September 30, 2015, cash and cash equivalents were $455,804, an increase of $387,728, or 550% from $70,076 as of December 31, 2014. The Company had a working capital deficit of $419,180 for the nine months ended Septemnber 30, 2015, with $788,130 of current assets and $1,207,310 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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