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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 6-K

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the month of August 2014

 

Commission File Number: 000-30698

 

SINA Corporation

(Registrant’s Name)

 

37F, Jin Mao Tower

88 Century Boulevard, Pudong

Shanghai 200121, China

(Address of Principal Executive Offices)

 

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

 

Form 20-F x   Form 40-F o

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): o

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): o

 

 

Table of Contents

 

TABLE OF CONTENTS

 

Signatures

 

Press Release regarding Results of Operations and Financial Condition for the Second Quarter ended June 30, 2014, issued by SINA Corporation on August 14, 2014

 

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Table of Contents

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

	SINA CORPORATION
Date: August 18, 2014	By:	/s/ Herman Yu
		Herman Yu
		Chief Financial Officer

 

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Exhibit 99.1

 

SINA Reports Second Quarter 2014 Financial Results

 

SHANGHAI, China—August 14, 2014—SINA Corporation (the “Company” or “SINA”) (NASDAQ GS: SINA), a leading online media company serving China and the global Chinese communities, today announced its unaudited financial results for the second quarter ended June 30, 2014.

 

Second Quarter 2014 Highlights

 

·          Net revenues increased 19% year over year to $187.0 million.  Non-GAAP net revenues increased 21% year over year to $184.4 million, exceeding the Company’s guidance between $177 million and $182 million.

·          Advertising revenues grew 29% year over year to $155.8 million, exceeding the Company’s guidance between $152 million and $155 million.

·          Non-advertising revenues were $31.2 million.  Non-GAAP non-advertising revenues were $28.6 million, exceeding the Company’s guidance between $25 million and $27 million.

·          Net income attributable to SINA was $16.6 million, or $0.25 diluted net income per share attributable to SINA.  Non-GAAP net income attributable to SINA was $12.1 million, or $0.17 non-GAAP diluted net income per share attributable to SINA.

 

“We are pleased with SINA’s second quarter results.” said Charles Chao, Chairman and CEO of SINA.  “Weibo is executing well with strong financial performance, solid traffic growth and measurable progress toward building out a social commerce platform and offering native ads to large brand customers.  On the portal side, we are making progress in building new businesses and leveraging SINA’s brand and media influence to capture mobile and vertical opportunities.”

 

Second Quarter 2014 Financial Results

 

For the second quarter of 2014, SINA reported net revenues of $187.0 million, compared to $157.5 million for the same period last year.  Non-GAAP net revenues for the second quarter of 2014 totaled $184.4 million, compared to $152.8 million for the same period last year.  Online advertising revenues for the second quarter of 2014 were $155.8 million, compared to $120.6 million for the same period last year.  Non-advertising revenues for the second quarter of 2014 were $31.2 million, compared to $36.9 million for the same period last year.  Non-GAAP non-advertising revenues for the second quarter of 2014 were $28.6 million, compared to $32.2 million for the same period last year.  The year over year decline in non-advertising revenues was mainly due to a decrease of $13.6 million in mobile value added services (“MVAS”) revenues, partially offset by the $10.0 million increase in Weibo Value Added Services (“VAS”) revenues.

 

Gross margin for the second quarter of 2014 was 61%, compared to 54% for the same period last year.  Advertising gross margin for the second quarter of 2014 was 59%, compared to 53% for the same period last year.  Non-GAAP advertising gross margin for the

 

 

second quarter of 2014 was 60%, compared to 57% for the same period last year, as the proportion of advertising from higher margin Weibo advertising increased from the same period last year, partially offset by the purchase of World Cup related content in the second quarter.  Non-advertising revenues gross margin for the second quarter of 2014 increased to 67% from 55% for the same period last year.  Non-GAAP non-advertising revenues gross margin for the second quarter of 2014 increased to 64% from 49% for the same period last year, primarily due to a shift in revenue mix from low-margin MVAS to higher margin Weibo VAS.

 

Operating expenses for the second quarter of 2014 totaled $138.6 million, which included a goodwill impairment of $14.5 million related to online reading business, compared to $102.5 million for the same period last year.  Non-GAAP operating expenses for the second quarter of 2014 totaled $116.9 million, compared to $75.4 million for the same period last year, primarily due to higher labor-related costs, marketing expenditures and infrastructure spending.

 

Loss from operations for the second quarter of 2014 was $25.2 million, compared to $18.2 million for the same period last year.  Non-GAAP loss from operations for the second quarter of 2014 was $5.4 million, compared to a non-GAAP income from operations of $8.8 million for the same period last year.

 

Non-operating income for the second quarter of 2014 was $31.2 million, compared to $8.2 million for the same period last year.  Non-operating income for the second quarter included:  1) a gain of $29.1 million from Tencent’s acquisition of a 15% equity interest in Leju, a subsidiary of E-House, on a fully diluted basis from E-House; 2) a $6.8 million loss from the change in fair value of investor option liability in connection with Alibaba’s investment in Weibo; and 3) $2.9 million, or $5.2 million on a non-GAAP basis, in earnings from equity-method investments, which are accounted for under the equity-method and reported one quarter in arrears.  Non-operating income for the second quarter of 2013 included a $1.3 million, or $4.2 million on a non-GAAP basis, in earnings from equity-method investments and a $0.9 million gain from the change in fair value of investor option liability.

 

Net income attributable to SINA for the second quarter of 2014 was $16.6 million, compared to a net loss of $11.5 million for the same period last year.  Diluted net income per share attributable to SINA for the second quarter of 2014 was $0.25, compared to a diluted net loss per share of $0.17 for the same period last year.  Non-GAAP net income attributable to SINA for the second quarter of 2014 was $12.1 million, compared to $14.2 million for the same period last year.  Non-GAAP diluted net income per share attributable to SINA for the second quarter of 2014 was $0.17, compared to $0.21 for the same period last year.

 

As of June 30, 2014, SINA’s cash, cash equivalents and short-term investments totaled $2.3 billion, compared to $1.9 billion as of December 31, 2013.  The increase in cash, cash equivalents, and short term investments was mainly due to the cash received from Alibaba in connection with the option exercise of approximately $347 million and the net proceeds from Weibo’s IPO of

 

 

approximately $301 million in the second quarter of 2014, partially offset by investments and repurchases made during the first half of 2014.  For the second quarter of 2014, net cash used by operating activities was $9.0 million, capital expenditures totaled $17.5 million, and depreciation and amortization expenses amounted to $11.0 million.

 

Other Developments

 

On August 8, 2014, the Company held its annual general meeting of shareholders, where the shareholders re-elected Mr. Pehong Chen and Mr. Lip-Bu Tan as directors of SINA.  The shareholders also approved and ratified the appointment of PricewaterhouseCoopers Zhong Tian LLP as the Company’s independent auditors for the fiscal year ending December 31, 2014.

 

As of August 13, 2014, the Company has purchased approximately 1.3 million shares in the open market for a total consideration of approximately $58 million under the $500 million share repurchase program approved by the Company’s Board of Directors in April 2014.  The Company expects to continue to execute the repurchase program when appropriate.

 

Business Outlook

 

SINA estimates that its non-GAAP net revenues for the third quarter of 2014 will be between $193 million and $199 million, which excludes the recognition of $2.6 million in deferred license revenues from E-House.  The foregoing forecast reflects SINA’s current and preliminary view, which is subject to change.

 

Non-GAAP Measures

 

This release contains the following non-GAAP financial measures:  non-GAAP net revenues, non-GAAP non-advertising revenues, non-GAAP advertising and non-advertising gross margin, non-GAAP gross profit, non-GAAP operating expenses, non-GAAP income (loss) from operations, non-GAAP net income (loss) attributable to SINA and non-GAAP diluted net income (loss) per share attributable to SINA.  These non-GAAP financial measures should be considered in addition to, not as a substitute for, measures of the Company’s financial performance prepared in accordance with U.S. GAAP.  The Company’s non-GAAP financial measures may be defined differently than similar terms used by other companies.  Accordingly, care should be exercised in understanding how the Company defines its non-GAAP financial measures.

 

The Company’s non-GAAP financial measures exclude recognition of deferred revenues in relation to the equity investment in E-House, stock-based compensation, amortization of intangible assets net of tax, adjustment for GAAP to non-GAAP reconciling items on the share of equity method investments, gain (loss) on the sale, deemed disposal and impairment on business, investment and

 

 

non-controlling interest in a subsidiary, change in fair value of investor option liability, adjustment for GAAP to non-GAAP reconciling items for the gain (loss) attributable to non-controlling interests, convertible debt issuance cost and impairment of goodwill.  The Company’s management uses these non-GAAP financial measures in their financial and operating decision-making, because management believes these measures reflect the Company’s ongoing business operations in a manner that allows more meaningful period-to-period comparisons.  The Company believes that these non-GAAP financial measures provide useful information to investors and others in the following ways: (i) in comparing the Company’s current financial results with the Company’s past financial results in a consistent manner, and (ii) in understanding and evaluating the Company’s current operating performance and future prospects in the same manner as management does, if they so choose.  The Company also believes that the non-GAAP financial measures provide useful information to both management and investors by excluding certain expenses, gains/losses and other items (i) that are not expected to result in future cash payments or (ii) that are non-recurring in nature or may not be indicative of the Company’s core operating results and business outlook.

 

Use of non-GAAP financial measures has limitations. The Company’s non-GAAP financial measures do not include all income and expense items that affect the Company’s operations.  They may not be comparable to non-GAAP financial measures used by other companies. Management compensates for these limitations by also considering the Company’s financial results prepared in accordance with U.S. GAAP.  Reconciliations of the Company’s non-GAAP measures to the nearest GAAP measures are set forth in the section below titled “Unaudited Reconciliation of Non-GAAP to GAAP Results.”

 

Conference Call

 

SINA will host a conference call at 10:10 p.m. – 10:50 p.m. Eastern Time on August 14, 2014 (or 10:10 a.m. – 10:50 a.m. Beijing Time on August 15, 2014) to present an overview of the Company’s financial performance and business operations.  A live webcast of the call will be available through the Company’s corporate website at http://corp.sina.com.  The conference call can be accessed as follows:

 

US:		+1 845 675 0438
Hong Kong:		+852 3051 2745
Passcode for all regions:		84192495

 

A replay of the conference call will be available through morning Eastern Time August 22, 2014.  The dial-in number is +61 2 9003 4211.  The passcode for the replay is 84192495.

 

About SINA

 

We are an online media company serving China and the global Chinese communities. Our digital media network of SINA.com (portal), SINA mobile (mobile portal and mobile apps) and Weibo (social media) enables Internet users to access professional media and user generated content in multi-media formats from desktop personal computers and mobile devices and share their interests with friends and acquaintances.

 

 

SINA.com offers distinct and targeted professional content on each of its region-specific websites and a full range of complementary offerings.  Our mobile portal, SINA.cn, provides news information and entertainment content from SINA.com customized for mobile users in WAP (mobile browser) and mobile application format.  Weibo is a leading social media platform for people to create, distribute and discover Chinese-language content.  Based on an open platform architecture, Weibo allows users to create and post feeds up to 140 Chinese characters and attach multi-media content, as well as access a wide range of organically and third-party developed applications, such as online games.

 

Through these properties and other product lines, we offer an array of online media and social media services to our users to create a rich canvas for businesses and advertisers to effectively connect and engage with their targeted audiences.

 

Safe Harbor Statement

 

This press release contains forward-looking statements that relate to, among other things, SINA’s expected financial performance and SINA’s strategic and operational plans (as described, without limitation, in the “Business Outlook” section and in quotations from management in this press release).  SINA may also make forward-looking statements in the Company’s periodic reports to the U.S. Securities and Exchange Commission, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties.  Statements that are not historical facts, including statements about the Company’s beliefs and expectations, are forward-looking statements.  These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “confidence,” “estimates” and similar statements.  SINA assumes no obligation to update the forward-looking statements in this press release and elsewhere.  Forward-looking statements involve inherent risks and uncertainties.  A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement.  Potential risks and uncertainties include, but are not limited to SINA’s limited operating history in certain new businesses; condition of the global financial and credit market; the uncertain regulatory landscape in China; fluctuations in the Company’s quarterly operating results; the Company’s reliance on online advertising sales and value-added services for a majority of its revenues; failure to successfully develop, introduce, drive adoption of or monetize new features and products, including portal, Weibo and MVAS products; failure to enter and develop the small and medium enterprise market by the Company or through cooperation with other parties, such a Alibaba; the Company’s reliance on mobile operators in China to provide MVAS and changes in mobile operators’ policies for MVAS in China; failure to successfully integrate acquired businesses; risks associated with the Company’s investments, including equity pick-up and impairment; and failure to compete successfully against new entrants and established industry competitors.  Further information regarding these and other risks is included in SINA’s annual report on Form 20-F for the year ended December 31, 2013 and other filings with the Securities and Exchange Commission.

 

Contact:

Investor Relations

SINA Corporation

Phone: 8610-82628888 x 3112

Email: ir@staff.sina.com.cn

 

 

SINA CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(U.S. dollars in thousands, except per share data)

 

		Three months ended									Six months ended
		June 30,						March 31,			June 30,
		2014			2013			2014			2014			2013
Net revenues:
Advertising		$	155,835		$	120,579		$	135,726		$	291,561		$	214,868
Non-advertising		31,178			36,906			35,752			66,930			68,590
		187,013			157,485			171,478			358,491			283,458
Cost of revenues:
Advertising *		63,384			56,620			54,856			118,240			104,430
Non-advertising		10,258			16,520			13,675			23,933			30,067
		73,642			73,140			68,531			142,173			134,497
Gross profit		113,371			84,345			102,947			216,318			148,961
Operating expenses:
Sales and marketing *		56,944			40,119			49,960			106,904			70,143
Product development *		47,696			41,262			44,535			92,231			72,075
General and administrative *		19,406			21,159			17,176			36,582			34,788
Impairment on goodwill		14,526			—			—			14,526			—
		138,572			102,540			111,671			250,243			177,006
Loss from operations		(25,201		)	(18,195		)	(8,724		)	(33,925		)	(28,045		)
Non-operating income (loss):
Earning from equity method investments, net		2,912			1,289			8,722			11,634			2,815
Gain (loss) on sale of and impairment on investments, net		26,932			1,850			(381		)	26,551			(9,002		)
Change in fair value of investor option liability		(6,784		)	864			(40,188		)	(46,972		)	864
Interest and other income, net		8,116			4,194			1,955			10,071			8,979
		31,176			8,197			(29,892		)	1,284			3,656
Income (loss) before income taxes		5,975			(9,998		)	(38,616		)	(32,641		)	(24,389		)
Income tax benefits (expenses)		1,474			(3,025		)	1,216			2,690			(3,210		)
Net income (loss)		7,449			(13,023		)	(37,400		)	(29,951		)	(27,599		)
Less: Net loss attributable to non-controlling interests		(9,173		)	(1,490		)	(4,234		)	(13,407		)	(2,895		)
Net income (loss) attributable to SINA		$	16,622		$	(11,533	)	$	(33,166	)	$	(16,544	)	$	(24,704	)
Basic net income (loss) per share attributable to SINA		$	0.25		$	(0.17	)	$	(0.50	)	$	(0.25	)	$	(0.37	)
Diluted net income (loss) per share attributable to SINA **		$	0.25		$	(0.17	)	$	(0.52	)	$	(0.27	)	$	(0.37	)
Shares used in computing basic net income (loss) per share attributable to SINA		65,806			66,814			66,034			65,920			66,751
Shares used in computing diluted net income (loss) per share attributable to SINA		65,918			66,814			66,034			65,920			66,751
* Stock-based compensation in each category:
Cost of revenues - advertising		$	724		$	4,460		$	775		$	1,499		$	5,028
Sales and marketing		1,103			6,223			1,147			2,250			7,013
Product development		1,530			8,794			1,355			2,885			9,585
General and administrative		4,072			12,155			3,610			7,682			15,273

 

** Net income (loss) attributable to SINA is adjusted for diluted shares issued by our subsidiary and equity method investments.

 

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SINA CORPORATION

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(U.S. dollars in thousands)

 

		June 30,			December 31,
		2014			2013
Assets
Current assets:
Cash and cash equivalents		$	1,340,564		$	916,276
Short-term investments		960,413			951,963
Accounts receivable, net		249,652			193,381
Prepaid expenses and other current assets		82,132			57,182
Subtotal		2,632,761			2,118,802
Property and equipment, net		76,249			80,920
Goodwill and intangible assets, net		60,460			58,189
Long-term investments, net		592,427			526,587
Other assets		137,693			113,345
Total assets		$	3,499,590		$	2,897,843
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable		$	3,846		$	6,988
Accrued liabilities		251,377			220,837
Deferred revenues		43,495			49,200
Income taxes payable		9,465			21,577
Investor option liability		—			29,504
Subtotal		308,183			328,106
Convertible debt		800,000			800,000
Long-term deferred revenue		90,608			89,039
Other long-term liabilities		4,105			5,080
Total liabilities		1,202,896			1,222,225
Shareholders’ equity
SINA shareholders’ equity		2,030,080			1,191,210
Non-controlling interests		266,614			484,408
Total shareholders’ equity		2,296,694			1,675,618
Total liabilities and shareholders’ equity		$	3,499,590		$	2,897,843

 

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SINA CORPORATION

UNAUDITED ADDITIONAL INFORMATION

(U.S. dollars in thousands)

 

		Three months ended									Six months ended
		June 30,						March 31,			June 30,
		2014			2013			2014			2014			2013
Net revenues
Portal:
Portal Advertising		$	96,252		$	90,623		$	83,873		$	180,125		$	166,149
Other		13,441			29,223			20,095			33,536			53,786
Subtotal		109,693			119,846			103,968			213,661			219,935
Weibo		77,320			37,639			67,510			144,830			63,523
		$	187,013		$	157,485		$	171,478		$	358,491		$	283,458
Cost of revenues
Portal:
Portal Advertising		$	46,512		$	39,976		$	39,456		$	85,968		$	76,541
Other		7,430			15,726			11,632			19,062			28,831
Subtotal		53,942			55,702			51,088			105,030			105,372
Weibo		19,700			17,438			17,443			37,143			29,125
		$	73,642		$	73,140		$	68,531		$	142,173		$	134,497

 

 

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SINA CORPORATION

UNAUDITED RECONCILIATION OF NON-GAAP TO GAAP RESULTS

(U.S. dollars in thousands, except per share data)

 

		Three months ended
		June 30, 2014									June 30, 2013									March 31, 2014
								Non-GAAP									Non-GAAP									Non-GAAP
		Actual			Adjustments			Results			Actual			Adjustments			Results			Actual			Adjustments			Results
Advertising revenues		$	155,835					$	155,835		$	120,579					$	120,579		$	135,726					$	135,726
Non-advertising revenues		31,178			(2,609		)(a)	28,569			36,906			(4,686		)(a)	32,220			35,752			(4,132		)(a)	31,620
Net revenues		$	187,013		$	(2,609	)	$	184,404		$	157,485		$	(4,686	)	$	152,799		$	171,478		$	(4,132	)	$	167,346
					(2,609		)(a)							(4,686		)(a)							(4,132		)(a)
					724		(b)							4,460		(b)							775		(b)
Gross profit		$	113,371		$	(1,885	)	$	111,486		$	84,345		$	(226	)	$	84,119		$	102,947		$	(3,357	)	$	99,590
					(6,705		)(b)
					(474		)(c)							(27,172		)(b)							(6,112		)(b)
					(14,526		)(i)							(12		)(c)							(1,171		)(c)
Operating expenses		$	138,572		$	(21,705	)	$	116,867		$	102,540		$	(27,184	)	$	75,356		$	111,671		$	(7,283	)	$	104,388
					(2,609		)(a)
					7,429		(b)							(4,686		)(a)							(4,132		)(a)
					474		(c)							31,632		(b)							6,887		(b)
					14,526		(i)							12		(c)							1,171		(c)
Income (loss) from operations		$	(25,201	)	$	19,820		$	(5,381	)	$	(18,195	)	$	26,958		$	8,763		$	(8,724	)	$	3,926		$	(4,798	)
					(2,609		)(a)
					7,429		(b)																(4,132		)(a)
					369		(c)							(4,686		)(a)							6,887		(b)
					2,279		(d)							31,632		(b)							899		(c)
					(26,932		)(e)							12		(c)							1,942		(d)
					6,784		(f)							2,874		(d)							381		(e)
					(7,791		)(g)							(1,850		)(e)							40,188		(f)
					1,398		(h)							(864		)(f)							(3,289		)(g)
					14,526		(i)							(1,361		)(g)							1,398		(h)
Net income (loss) attributable to SINA		$	16,622		$	(4,547	)	$	12,075		$	(11,533	)	$	25,757		$	14,224		$	(33,166	)	$	44,274		$	11,108
Diluted net income (loss) per share attributable to SINA *		$	0.25					$	0.17		$	(0.17	)				$	0.21		$	(0.52	)				$	0.15
Shares used in computing diluted net income (loss) per share attributable to SINA		65,918			—			65,918			66,814			270		(j)	67,084			66,034			289		(j)	66,323
Gross margin - advertising		59		%	1		%	60		%	53		%	4		%	57		%	60		%	0		%	60		%
Gross margin - non-advertising		67		%	-3		%	64		%	55		%	-6		%	49		%	62		%	-5		%	57		%

 

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