BEIJING, Oct. 29, 2009 (PRNewswire-Asia) -- VisionChina Media Inc. ("VisionChina Media" or the "Company") (Nasdaq: VISN), one of China's largest out-of-home digital television advertising networks on mass transportation systems, today announced its financial results for the third quarter ended September 30, 2009.

    Third Quarter 2009 Highlights
-- Total revenues in the third quarter of 2009 remained stable at
$30.8 million, unchanged from the second quarter of 2009.
-- Gross profit in the third quarter of 2009 was $15.4 million,
representing a decrease of 6.3% from $16.4 million in the second
quarter of 2009.
-- Operating profit in the third quarter of 2009 was $7.3 million,
representing a slight decrease of 0.7% from $7.4 million in the second
quarter of 2009.
-- Net income attributable to VisionChina Media's shareholders in the
third quarter of 2009 was $7.2 million, representing a slight increase
of 1.6% from $7.1 million in the second quarter of 2009.
-- The Company's third quarter 2009 net income attributable to VisionChina
Media's shareholders, excluding share-based compensation expenses and
amortization of intangible assets (non-GAAP), was $9.1 million,
exceeding Company guidance.
-- Basic and diluted net income per share (each ADS represents one common
share) in the third quarter of 2009 were both $0.10, unchanged from
$0.10 for both in the second quarter of 2009.
-- Net cash generated from operating activities totaled $8.1 million in
the third quarter of 2009. The Company had cash and cash equivalents of
$112.7 million as of September 30, 2009.
-- The Company's advertising network covered 18 cities as of September 30,
2009 and 19 cities as of October 1, 2009.
-- Network capacity, as measured by total broadcasting hours, reached
34,778 hours in the third quarter of 2009, compared to 31,834 hours in
the third quarter of 2008 and 34,399 hours in the second quarter of
2009.
-- As of September 30, 2009, the Company's advertising network included
84,560 digital displays on buses, subway trains and platforms as well
as other platforms, compared to 82,349 digital displays at the end of
the second quarter of 2009.
-- In the third quarter of 2009, the Company sold a total of 238,484
advertising minutes in its advertising network compared to 220,063
minutes in the second quarter of 2009.
-- The Company sold an average of 6.86 advertising minutes per
broadcasting hour in the third quarter of 2009, compared to 9.33
minutes per broadcasting hour in the third quarter of 2008 and 6.40
minutes per broadcasting hour in the second quarter of 2009.
-- Average advertising service revenues per broadcasting hour were $845 in
the third quarter of 2009 compared to $1,116 per broadcasting hour in
the third quarter of 2008, and $865 per broadcasting hour in the second
quarter of 2009.

Mr. Limin Li, VisionChina Media's chairman and chief executive officer said, "In what remained a challenging sales environment in the third quarter, we were pleased to see our net revenues remain strong at $30.8 million and net income increase to $7.2 million. While the advertising market remains uncertain in the near term, we are starting to see promising signs of recovery and remain optimistic about the future. Our third quarter results show that we have been able to mitigate the negative effects of a competitive sales environment and have been able to stabilize our performance relative to competition."

Mr. Li continued, "Recently, we have taken great strides in execution of our corporate strategy with the announcement of our impending acquisition of Digital Media Group (DMG), the addition of Xiamen to our bus network, the three-year renewal of our bus and ferry network in Hangzhou as well as the addition of Metro Line No. 5 to our existing subway network in Guangzhou. These steps firmly establish VisionChina as the market share leader in the outdoor mobile television and advertising industry in China and position us well to benefit as the industry and the overall advertising market gain strength and momentum in the coming quarters and years."

Mr. Scott Chen, VisionChina Media's chief financial officer, added, "While advertising spending remained cautious in the third quarter, we believe the recent acceleration in GDP growth in China is a strong positive for our industry. According to our sales force, preliminary discussions with clients regarding 2010 are progressing well and have provided indication of increased demand for next year. To meet this demand effectively, we have proactively taken steps to strengthen our position versus our competitors. Although industry competition will continue to make 2009 a challenging year, we believe that our recent strategic initiatives greatly enhance the value of our bus and subway networks for our advertisers. We are confident that VisionChina Media is well positioned in our competitive landscape to capitalize on future industry growth and from upcoming events such as the 2010 Shanghai World Expo and the 16th Asian Games to be held in Guangzhou at the end of 2010."

Third Quarter 2009 Results

VisionChina Media's total revenues were $30.8 million in the third quarter of 2009, a decrease of 14.3% compared to $35.9 million in the third quarter of 2008 and unchanged from $30.8 million in the second quarter of 2009. The year-over-year decrease was primarily due to the relatively stronger performance of the Company during the Beijing Olympics in the third quarter of 2008 compared with a markedly different sales environment in 2009.

Total broadcasting hours reached 34,778 in the third quarter of 2009 compared to 31,834 in the third quarter of 2008 and 34,399 in the second quarter of 2009. Average advertising revenues per broadcasting hour were $845 in the third quarter of 2009 compared to $1,116 in the third quarter of 2008 and $865 in the second quarter of 2009. The Company sold an average of 6.86 advertising minutes per broadcasting hour in the third quarter of 2009 compared to 9.33 minutes per broadcasting hour in the third quarter of 2008 and 6.40 minutes per broadcasting hour in the second quarter of 2009. In the third quarter of 2009, the Company sold a total of 238,484 advertising minutes in its advertising network compared to 297,135 minutes in the third quarter of 2008 and 220,063 minutes in the second quarter of 2009. During the third quarter of 2009, 334 advertisers purchased advertising time on the Company's advertising network either directly or through advertising agents compared to 274 advertisers in the second quarter of 2009.

Media cost, the most significant component of the Company's advertising service cost of revenues, was $12.6 million in the third quarter of 2009, representing 81.8% of total advertising service costs, compared to $8.5 million, representing 72.9% of total advertising service costs in the third quarter of 2008, and $11.7 million, representing 81.4% of total advertising service costs in the second quarter of 2009. The increase in media cost from the second quarter of 2009 was due to an anticipated increase in certain concession contract costs and an increase in purchasing advertising time on behalf of our advertisers in certain non-exclusive cities during the quarter.

Gross profit in the third quarter of 2009 was $15.4 million, representing a decrease of 36.4% from $24.2 million in the third quarter of 2008, and a decrease of 6.3% from $16.4 million in the second quarter of 2009. Advertising service gross margin was 49.9% in the third quarter of 2009, compared to 67.4% in the third quarter of 2008 and 53.3% in the second quarter of 2009. The year-over-year decrease in gross margin was primarily due to an increase in fixed media costs from the Company's expansion of its network across new cities and media platforms over the year as well as a comparison to the Company's relatively stronger performance during the Beijing Olympics in the third quarter of 2008. The slight quarter-over-quarter decrease in gross margin was a result of an increase in media costs.

Selling and marketing expenses were $6.4 million in the third quarter of 2009, representing an increase of 18.9% compared to $5.3 million in the third quarter of 2008, and a decrease of 5% compared to $6.7 million in the second quarter of 2009. Selling and marketing expenses represented 20.6% of the Company's advertising service revenues in the third quarter of 2009 compared to 21.7% in the second quarter of 2009. We attribute the slight decrease in sales and marketing expenses compared to the second quarter of 2009 to the implementation of cost control measures.

General and administrative expenses were $1.6 million in the third quarter of 2009, representing an increase of 8.5% compared to $1.5 million in the third quarter of 2008, and a decrease of 22.8% compared to $2.1 million in the second quarter of 2009.