Glory Star Reports First Half Year 2023 Unaudited Financial Results
BEIJING,Aug. 10,2023 --Glory Star New Media Group Holdings Limited (NASDAQ:GSMG) ("Glory Star",the "Company"or "we"),a leading digital media platform and content-driven e-commerce company inChina,today announced its unaudited financial results for the first half year of 2023 endedJune 30,2023.
First Half 2023 Operating Highlights
Downloads of the CHEERS Apps increased to approximately 395 million as of June 30,2023,representing an increase of 23% compared to approximately 320 million as of June 30,2022.
CHEERS Video
Monthly Active Users ("MAU") of the CHEERS Video app increased to approximately 49.8 million from 45.8 million in the same period of 2022,representing an increase of 9%.
Daily Time Spent ("DTS") on CHEERS Video was approximately 51 minutes.
CHEERS e-Mall
MAU of the CHEERS e-Mall app increased to approximately 4.6 million from 3.0 million in the same period of 2022,representing an increase of 53%.
Repurchase Rate ("RPR") for CHEERS e-Mall was approximately 39%.
CheerReal
MAU of the CheerReal app was approximately 1.2 million.
Number of Digital Art Collections listed on CheerReal platform was 350 units.
First Half 2023 Key Operating Results
The Company monitors the following key metrics to evaluate the growth of its business,measure the effectiveness of its marketing efforts,identify trends affecting its business,and make strategic decisions.
Downloads. We view the number of downloads at the end of a given period as a key indicator of the attractiveness and usability of ourCHEERS Apps.As ofJune 30,downloads of our CHEERS Video,e-Mall and CheerReal apps in total were approximately 395 million,representing an increase of 23% compared to approximately 320 million as ofJune 30,2022.
MAU. MAU is defined as a user who has logged in or accessed the Company's CHEERS Apps. We calculate MAU using internal company data based on the activity of the user account and as adjusted to remove "duplicate" accounts. MAU is a tool that our management uses to manage their operations. In particular,our management setstargets of MAU and monitors the MAU to see whether to make adjustments as to the promotional activities,advertising campaign,and/or online video contents. For the six months endedJune 30,the average MAU of our CHEERS Video and e-Mall apps were approximately 49.8 million and 4.6 million,growing 9% and 53% respectively as compared to the same period in 2022. The average MAU of the CheerReal app was approximately 1.2 million.
RPR. We track RPR to analyze the effectiveness of our marketing as well as customers retention,which is vital to our e-Mall. RPR is calculated as the percentage of our customers who have placed more than one order within a certain period of time. For the 180 days period during the first half of 2023,our CHEERS e-Mall RPR was approximately 39%.
DTS.We measure DTS as an additional metric to evaluate the attractiveness of our video content and stickiness of users. The average DTS using our CHEERS Video during first half 2023 was approximately 51 minutes.
First Half 2023 Financial Results
Revenuesin the first half year of 2023 wereUS$67.4 millioncompared toUS$69.9 millionin the same period of 2022,representing a decrease of US$2.5 million,or 3.57% from US$69.9 million for the six months ended June 30,2022.
Total operating expensesin the first half year of 2023 wereUS$58.7 million,compared toUS$59.4 millionin the same period of 2022.
Cost of revenues were US$16.9 million and US$14.6 million for the first half year of 2023 and 2022. The increase in cost of revenues was primarily driven by the increase in production cost. The Company believes higher production cost would improve product contents with higher quality,which would in turn contribute to our reputation in the industry and attract more customers.
Sales and marketing expenses were US$38.9 million and US$42.5 million for the first half year of 2023 and 2022,mainly due to a decrease in other miscellaneous expenses incurred by sales persons because the Company emphasized cost savings.
General and administrative expenses in the first half year of 2023 increased by 24.9% to US$2.3 million from US$1.8 million in the same period of 2022,which is mainly attributable to an increase in salary and welfare expenses because of an increase in headcount in our administrative department.
Research and development expenses were US$0.6 million and US$0.5 million for the first half year of 2023 and 2022,respectively.
Income from operationsin the first half year of 2023 wasUS$8.7 million,compared toUS$10.5 millionin the same period of 2022.
Net income were US$8.8 million and US$10.6 million,respectively,for the six months ended June 30,2023 and 2022.
Basic and diluted earnings per sharein the first half year of 2023 wereUS$0.12andUS$0.12,compared toUS$0.16andUS$0.16,in the same period of 2022.
Net cash provided by operating activitiesin the first half year of 2023 wasUS$27.2 million,compared tonet cash used in operating activities of US$30.6 millionin the same period of 2022.
As ofJune 30,the Company had cash and cash equivalents ofUS$152.4 million,compared toUS$70.5 millionas ofDecember 31,2022.
About Glory Star
As a preeminent provider of next-generation mobile internet infrastructure services in China,Glory Star is dedicated to building a digital ecosystem that integrates "platforms,applications,technology,and industry" into a cohesive system,thereby creating a new,open business environment for web3.0 that leverages AI technology. The Company is developing a 5G+VR+AR+AI shared universe space that builds on cutting-edge technologies including blockchain,cloud computing,extended reality,and digital twin.
Glory Star's portfolio includes a wide range of products and services,such as Polaris Intelligent Cloud,CHEERS Telepathy,CHEERS Open Platform,CHEERS Video,CHEERS e-Mall,CheerReal,CheerCar,CheerChat,CHEERS Fresh Group-Buying E-commerce Platform,Digital Innovation Research Institute,CHEERS Livestreaming,variety show series,IP short video matrix,and more. These offerings provide diverse application scenarios that seamlessly blend "online/offline" and "virtual/reality" elements.
With "CHEERS+" at the core of Glory Star's ecosystem,the Company is committed to consolidating and strengthening its core competitiveness,and achieving long-term sustainable and scalable growth.
For more information,please visit http://ir.gsmg.co/.
Safe Harbor Statement
Certain statements made in this release are "forward looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. When used in this press release,the words "estimates," "projected," "expects," "anticipates," "forecasts," "plans," "intends," "believes," "seeks," "may," "will," "should," "future," "propose" and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements. These forward-looking statements are not guarantees of future performance,conditions or results,and involve a number of known and unknown risks,uncertainties,assumptions and other important factors,many of which are outside the Company's control,that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements. Important factors,among others,are: the ability to manage growth; ability to identify and integrate other future acquisitions; ability to obtain additional financing in the future to fund capital expenditures; fluctuations in general economic and business conditions; costs or other factors adversely affecting our profitability; litigation involving patents,intellectual property,and other matters; potential changes in the legislative and regulatory environment; a pandemic or epidemic; the occurrence of any event,change or other circumstances that could affect the Company's ability to continue successful development and launch of its metaverse experience centers; the possibility that the Company may not succeed in developing its new lines of businesses due to,among other things,changes in the business environment and technological developments,competition,changes in regulation,or other economic and policy factors; disruptions or other business interruptions that may affect the operations of our products and services,the possibility that the Company's new lines of business may be adversely affected by other economic,business,and/or competitive factors; other factors,risks and uncertainties set forth in documents filed by the Company with the Securities and Exchange Commission from time to time,including the Company's latest Annual Report on Form 20-F filed with the SEC on March 22,as amended. The Company undertakes no obligation to update or revise any forward-looking statements,whether as a result of new information,future events or otherwise,except as required by applicable law. Such information speaks only as of the date of this release.
For investor and media inquiries,please contact:
Wealth Financial Services LLC
Connie Kang,Partner
Email: ckang@wealthfsllc.com
Tel: +86 1381 185 7742 (CN)
GLORY STAR NEW MEDIA GROUP HOLDINGS LIMITED
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In U.S. dollars in thousands,except share and per share data)
June 30,
2023
December31,
2022
Assets
Current assets:
Cash and cash equivalents
$
152,441
$
70,482
Accounts receivable,net
67,159
98,034
Prepayment and other current assets
27,378
15,329
Total current assets
246,978
183,845
Non-current assets:
Property,plant and equipment,net
115
160
Intangible assets,net
18,026
20,297
Deferred tax assets
64
103
Unamortized produced content,net
528
807
Right-of-use assets
593
750
Prepayment and other non-current assets,net
-
1
Total non-current assets
19,326
22,118
TOTAL ASSETS
$
266,304
$
205,963
Liabilities and Equity
Current liabilities:
Short-term bank loans
$
2,856
$
4,421
Accounts payable
4,992
6,405
Advances from customers
126
147
Due to a related party
1,000
-
Accrued liabilities and other payables
2,203
2,632
Other taxes payable
21,703
19,090
Lease liabilities current
368
208
Total current liabilities
33,248
32,903
Lease liabilities non-current
191
471
Warrant liability
7
86
Total non-current liabilities
198
557
TOTAL LIABILITIES
$
33,446
$
33,460
Equity
Preferred shares (par value of $0.0001 per share; 2,000,000 authorized;
none issued and outstanding)
$
-
$
-
Ordinary shares (par value of $0.0001 per share; 200,000 shares
authorized as of June 30,2023 and December 31,2022; 92,317,950
shares and 68,124,402 shares issued and outstanding as of June 30,
2023 and December 31,2022,respectively)
$
9
$
7
Additional paid-in capital
87,470
27,009
Statutory reserve
1,411
1,411
Retained earnings
159,432
150,685
Accumulated other comprehensive loss
(15,539)
(6,684)
TOTAL GLORY STAR NEW MEDIA GROUP HOLDINGS LIMITED
SHAREHOLDERS' EQUITY
232,783
172,428
Non-controlling interest
75
75
TOTAL EQUITY
232,858
172,503
TOTAL LIABILITIES AND EQUITY
$
266,963
GLORY STAR NEW MEDIA GROUP HOLDINGS LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND
COMPREHENSIVE (LOSS) INCOME
(In U.S. dollars in thousands,except share and per share data)
For the Six Months
Ended
June 30,
2023
2022
Revenues
$
67,435
$
69,933
Operating expenses:
Cost of revenues
(16,946)
(14,580)
Selling and marketing
(38,870)
(42,502)
General and administrative
(2,266)
(1,814)
Research and development
(641)
(532)
Total operating expenses
(58,723)
(59,428)
Income from operations
8,712
10,505
Other (expenses) income:
Interest income (expense),net
32
(60)
Change in fair value of warrant liability
79
2
Other income,net
13
144
Total other income
124
86
Income before income tax
8,836
10,591
Income tax (expenses) benefits
(37)
46
Net income
8,799
10,637
Less: net gain (loss) attributable to non-controlling interest
52
(170)
Net income attributable to Glory Star New Media Group Holdings
Limited's shareholders
$
8,747
$
10,807
Other comprehensive loss
Unrealized foreign currency translation loss
(8,907)
(7,620)
Comprehensive (loss) income
(108)
3,017
Less: comprehensive loss attributable to non-controlling interests
-
(360)
Comprehensive (loss) income attributable to Glory Star New Media
Group Holdings Limited's shareholders
$
(108)
$
3,337
Earnings per ordinary share
Basic and Diluted
$
0.12
$
0.16
Weighted average shares used in calculating earnings per ordinary share
Basic and Diluted
75,075,035
68,123,330
GLORY STAR NEW MEDIA GROUP HOLDINGS LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In U.S. dollars in thousands)
For the Six Months
Ended
June 30,
2023
2022
Net cash provided by (used in) operating activities
27,179
(30,627)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property,plant and equipment
(4)
(28)
Loans made to a third party
(58)
-
Prepayments for acquisition of intangible assets
-
(355)
Net cash used in investing activities
(62)
(383)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of ordinary shares in connection with a private placement
60,000
-
Proceeds from bank loans
2,598
5,398
Repayments of bank loans
(4,041)
(4,473)
Payment of loan origination fees
(11)
(83)
Borrowings from a related party
1,000
-
Contribution from shareholders
463
-
Net cash provided by financing activities
60,009
842
Effect of exchange rate changes
(5,167)
(2,357)
Netincrease (decrease) in cash and cash equivalents
81,959
(32,525)
Cash and cash equivalents,at beginning of period
70,482
77,302
Cash and cash equivalents,at end of period
$
152,441
44,777
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interests paid
$
77
$
136
Amortization of right of use assets
$
133
$
209
Accretion of lease liabilities
$
69
$
24
Change in fair value of warrant liabilities
$
(79)
$
(2)
