◆NowNews Digital Media Technology Reports FY 2016 Third Quarter Results
Taipei City, Taiwan, November 15, 2016 -- NowNews Digital Media Technology Co. Ltd. (“NOWnews” or “the Company”) (OTCQB: NDMT), a media company that provides news and multimedia platform services, today released its financial results for the third quarter of 2016.
Third Quarter 2016 Highlights
• Net revenue increased $0.22 million, an increase of 36% from the corresponding period in 2015.
“For the third quarter of 2016, we remained focused on advertising and licensing businesses, and were able to achieve 35% and 40% year over year growth respectively,” Shuo-Wei Shih, CEO of NDMT said. “Once all our ongoing acquisition deals are closed, we would expect to see a breakthrough of the company in the coming year.”
Third Quarter 2016 Results
Net revenue for the three months ended September 30, 2016 was $0.84 million, an increase of $0.22 million or 36% from $0.62 million for the three months ended September 30, 2015. The increase was primarily due to the increase in advertisement revenue and licensing revenue.
For the three months ended September 30, 2016, the advertising avenue was $0.77 million, an increase of $0.20 million, or 35%, from $0.57 million for the three months ended September 30, 2015. The increase was because the Company focuses on the more profitable internet advertising and marketing business.
Revenue from content licensing and services was $0.07 million for the three months ended September 30, 2016, an increase of $0.02 million, or 40%, from $0.05 million for the three months ended September 30, 2015. The increase was primarily due to new customers acquired during the three months ended September 30, 2016.
Cost of Revenue
Cost of revenue was $0.60 million for the three months ended September 30, 2016, compared to $0.35 million for the three months ended September 30, 2015, an increase of $0.25 million, or 71%. The increase was mainly due to the increase of $0.20 million in advertisement and website maintenance costs, and $0.05 million in labor cost.
Gross profit for the three months ended September 30, 2016 decreased approximately $0.03 million, or 10%, as compared to the same period in 2015, due to the substantial increase in cost of revenue. Gross profit margin was 29% for the three months ended September 30, 2016 as compared to 44% for the same period in 2015.
The amount of selling expenses increased by $0.02 million, or 10%, from $0.15 million for the three months ended September 30, 2015, to $0.17 million for the three months ended September 30, 2016. The increase in selling expenses was primarily due to the increase in labor costs resulting from the increase in the number of salespersons.
General and Administrative Expenses
General and administrative expenses increased by approximately $0.05 million, or 22%, from $0.22 million for the three months ended September 30, 2015 to $0.27 million for the three months ended September 30, 2016. The increase in general and administration expenses was principally due to the increase in labor costs.
As a result of the above factors, the Company has net loss of approximately $0.19 million for the three months ended September 30, 2016 as compared to net loss of approximately $0.10 million for the three months ended September 30, 2015, representing an increase of loss of approximately $0.09 million, or approximately 95%.
Cash, Liquidity and Financial Position
As of September 30, 2016, cash and cash equivalents were $62,932, compared to $301,205 at the end of 2015. The Company had a working capital deficit of $3.93 million at September 30, 2016, with $0.67 million of current assets and $4.60 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. is a U.S.-listed media holding company focusing on the global Chinese market. The Company's holdings in the media space include digital media, movie production and distribution, and music copyright. The digital media business engages in creating, collecting and distributing news and information through its website and applications on mobile phones or tablets. The Company’s subsidiary NOWnews is the largest online self-produced news content provider of Taiwan and the only Taiwanese online news website fully accessible in Mainland China. The movie production and distribution business engages in Internet movie, Internet drama and Internet show production, foreign movie import and production, movie marketing and advertising, and Internet personality business. The Company’s music copyright business owns copyright to more than 3000 hit pop songs and provides a full range of Karaoke products. In addition, the Company has investments in the banking industry in Southeast Asia.
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