| At | At | |||||||
| December 31 | December 31 | |||||||
| 2006 | 2005 | |||||||
ASSETS | ||||||||
Current Assets: | ||||||||
| Cash and cash equivalents | $ | 25,192 | $ | 94,321 | ||||
| Available-for-sale securities (Note 1) | 130,603 | 23,982 | ||||||
| Accounts receivable, net | 6,468 | 5,545 | ||||||
| Receivables from sales representatives | 13,238 | 5,659 | ||||||
| Inventory of paper | 889 | 866 | ||||||
| Prepaid expenses and other current assets | 14,174 | 10,585 | ||||||
Total Current Assets | 190,564 | 140,958 | ||||||
| Property and equipment, net | 28,374 | 28,178 | ||||||
| Long term investments | 100 | 100 | ||||||
| Bonds held to maturity, at amortized cost | 289 | 463 | ||||||
| Other assets | 1,562 | 1,981 | ||||||
Total Assets | $ | 220,889 | $ | 171,680 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Current Liabilities: | ||||||||
| Accounts payable | $ | 6,804 | $ | 5,484 | ||||
| Deferred income and customer prepayments | 62,036 | 52,624 | ||||||
| Accrued liabilities | 12,427 | 6,644 | ||||||
| Income taxes payable | 751 | 405 | ||||||
Total Current Liabilities | 82,018 | 65,157 | ||||||
| Liabilities for incentive and bonus plans | 102 | 307 | ||||||
| Deferred income and customer prepayments – long term | 1,802 | 348 | ||||||
| Deferred tax liability | 403 | 436 | ||||||
Total Liabilities | 84,325 | 66,248 | ||||||
| Minority interest | 2,913 | 6,191 | ||||||
Shareholders’ equity: | ||||||||
| Common shares, US$0.01 par value; 75,000,000 shares authorized; 42,271,144 (2005: 42,174,344) shares issued and outstanding | 423 | 422 | ||||||
| Additional paid in capital (Note 2) | 125,832 | 127,708 | ||||||
| Retained earnings (deficit) | 4,830 | (21,199 | ) | |||||
| Less: Unearned compensation (Note 2) | - | (7,900 | ) | |||||
| Accumulated other comprehensive income (Note 1) | 2,566 | 210 | ||||||
Total Shareholders’ Equity | 133,651 | 99,241 | ||||||
Total Liabilities and Shareholders’ Equity | $ | 220,889 | $ | 171,680 | ||||
| Note: 1. | The Company recorded $14.5 million, being approximately 13.09% equity interest in HC International at fair value based on the closing share price of HCI, as at December 31, 2006, as available-for-sale securities in the financial statements as at December 31, 2006. The unrealized market gain of $2.3 million has been credited to accumulated other comprehensive income, shown under shareholders’ equity. | |
| Note: 2. | The Company adopted SFAS No. 123(R), “Share Based Payment” with effect from January 1, 2006. The unearned compensation costs associated with the Employee Compensation Plans at the beginning of the year 2006 were reversed as per SFAS No. 123(R). |
| Three months ended December 31 | Year ended December 31 | |||||||||||||||
| 2006 | 2005 | 2006 | 2005 | |||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||||
Revenue: | ||||||||||||||||
| Online and other media services (Note 3) | $ | 30,335 | $ | 25,558 | $ | 113,097 | $ | 97,062 | ||||||||
| Exhibitions | 21,608 | 6,339 | 42,122 | 14,300 | ||||||||||||
| Miscellaneous | 361 | 434 | 1,262 | 832 | ||||||||||||
| 52,304 | 32,331 | 156,481 | 112,194 | |||||||||||||
Operating Expenses: | ||||||||||||||||
| Sales (Note 4) | 15,451 | 9,173 | 50,380 | 34,415 | ||||||||||||
| Event production | 9,169 | 1,987 | 18,414 | 3,920 | ||||||||||||
| Community (Note 4) | 8,231 | 6,756 | 24,885 | 20,726 | ||||||||||||
| General and administrative (Note 4) | 10,605 | 9,262 | 38,945 | 34,666 | ||||||||||||
| Online services development (Note 4) | 1,145 | 960 | 4,499 | 4,235 | ||||||||||||
| Amortization of software cost | 328 | 329 | 1,250 | 1,335 | ||||||||||||
Total Operating Expenses | 44,929 | 28,467 | 138,373 | 99,297 | ||||||||||||
Income from Operations | 7,375 | 3,864 | 18,108 | 12,897 | ||||||||||||
| Interest and dividend income | 1,797 | 830 | 5,571 | 1,624 | ||||||||||||
| Gain on sale of available-for-sale securities | - | 420 | 309 | 977 | ||||||||||||
| Gain on sale of shares to minority shareholder and interest income thereon (Note 5) | 7,906 | - | 7,906 | - | ||||||||||||
| Loss on investment, net | (743 | ) | - | (743 | ) | - | ||||||||||
| Foreign exchange losses, net | (258 | ) | (2 | ) | (714 | ) | (80 | ) | ||||||||
Income before Income Taxes | 16,077 | 5,112 | 30,437 | 15,418 | ||||||||||||
Income Tax Provision | (323 | ) | (284 | ) | (899 | ) | (759 | ) | ||||||||
Net Income before Minority Interest | $ | 15,754 | $ | 4,828 | $ | 29,538 | $ | 14,659 | ||||||||
| Minority interest | $ | (444 | ) | $ | (294 | ) | $ | (1,909 | ) | $ | (1,281 | ) | ||||
Net Income before cumulative effect of change in accounting principle | $ | 15,310 | $ | 4,534 | $ | 27,629 | $ | 13,378 | ||||||||
| Cumulative effect of change in accounting principle (Note 6) | - | - | 251 | - | ||||||||||||
Net Income | $ | 15,310 | $ | 4,534 | $ | 27,880 | $ | 13,378 | ||||||||
Basic net income per common share before cumulative effect of change in accounting principle | $ | 0.36 | $ | 0.11 | $ | 0.65 | $ | 0.32 | ||||||||
Cumulative effect of change in accounting principle | - | - | $ | 0.01 | $ | - | ||||||||||
Basic net income per common share | $ | 0.36 | $ | 0.11 | $ | 0.66 | $ | 0.32 | ||||||||
Diluted net income per common share before cumulative effect of change in accounting principle | $ | 0.36 | $ | 0.11 | $ | 0.65 | $ | 0.32 | ||||||||
Cumulative effect of change in accounting principle | - | - | $ | 0.01 | $ | - | ||||||||||
Diluted net income per common share | $ | 0.36 | $ | 0.11 | $ | 0.66 | $ | 0.32 | ||||||||
Common shares used in basic net income per common share calculations | 40,630,678 | 40,613,024 | 40,628,354 | 39,735,854 | ||||||||||||
Common shares used in diluted net income per common share calculations | 40,735,447 | 40,661,968 | 40,698,957 | 39,802,129 | ||||||||||||
Basic net income per non-vested restricted share before cumulative effect of change in accounting principle | $ | 0.36 | $ | 0.11 | $ | 0.65 | $ | 0.32 | ||||||||
Cumulative effect of change in accounting principle | - | - | $ | 0.01 | $ | - | ||||||||||
Basic net income per non-vested restricted share | $ | 0.36 | $ | 0.11 | $ | 0.66 | $ | 0.32 | ||||||||
| �� | ||||||||||||||||
Diluted net income per non-vested restricted share before cumulative effect of change in accounting principle | $ | 0.36 | $ | 0.11 | $ | 0.65 | $ | 0.32 | ||||||||
Cumulative effect of change in accounting principle | - | - | $ | 0.01 | - | |||||||||||
Diluted net income per non-vested restricted share | $ | 0.36 | $ | 0.11 | $ | 0.66 | $ | 0.32 | ||||||||
| Three months ended December 31 | Year ended December 31 | |||||||||||||||
| 2006 | 2005 | 2006 | 2005 | |||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||||
Non-vested restricted shares used in basic net income per non-vested restricted share calculations | 1,640,466 | 1,561,320 | 1,627,408 | 1,621,926 | ||||||||||||
Non-vested restricted shares used in diluted net income per non-vested restricted share calculations | 1,640,466 | 1,561,320 | 1,627,408 | 1,621,926 | ||||||||||||
| Note : 3. | Online and other media services consists of: | |||||
| Three months ended December 31 | Year ended December 31 | |||||||||||||||
| 2006 | 2005 | 2006 | 2005 | |||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||||
| Online services | $ | 16,927 | $ | 13,446 | $ | 64,396 | $ | 53,829 | ||||||||
| Print services | 13,408 | 12,112 | 48,701 | 43,233 | ||||||||||||
| $ | 30,335 | $ | 25,558 | $ | 113,097 | $ | 97,062 | |||||||||
| Note : 4. | Non-cash compensation expenses associated with the several employee equity compensation plans and Directors Purchase Plan included under various categories of expenses are as follows: | |||||
| Three months ended December 31 | Year ended December 31 | |||||||||||||||
| 2006 | 2005 | 2006 | 2005 | |||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||||
| Sales | $ | 707 | $ | 195 | $ | 1,790 | $ | 505 | ||||||||
| Community | 66 | 27 | 145 | 103 | ||||||||||||
| General and administrative | 381 | 351 | 1,950 | 1,025 | ||||||||||||
| Online services development | 39 | 52 | 181 | 315 | ||||||||||||
| $ | 1,193 | $ | 625 | $ | 4,066 | $ | 1,948 | |||||||||
| Note : 5. | The sale of 199 shares of our subsidiary eMedia Asia Ltd. increased our net income and diluted net income per common share by $7,906 and $0.19 respectively for both the quarter and the year ended December 31, 2006. | |||||
| Note : 6. | Represents the cumulative effect of change in accounting principle, resulting from the adoption of SFAS123(R) with effect from January 1, 2006. | |||||
| Year ended December 31 | ||||||||
| 2006 | 2005 | |||||||
Cash flows from operating activities: | ||||||||
| Net income | $ | 27,880 | $ | 13,378 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities | ||||||||
| Depreciation and amortization | 4,678 | 3,975 | ||||||
| Accretion of U.S. Treasury strips zero % coupons | (26 | ) | (37 | ) | ||||
| Profit on sale of equipment | (30 | ) | (12 | ) | ||||
| Equipment written off | 2 | 86 | ||||||
| Unrealised dividend income on available-for-sale securities | - | (134 | ) | |||||
| Unrealised interest income on available-for-sale securities | (1,036 | ) | - | |||||
| Bad debt expense | 216 | 18 | ||||||
| Non-cash compensation expense | 4,066 | 1,948 | ||||||
| Gain on sale of shares to minority shareholder and interest income thereon | (7,906 | ) | - | |||||
| Cumulative effect of change in accounting principle | (251 | ) | - | |||||
| Income attributable to minority shareholder | 1,909 | 1,281 | ||||||
| 29,502 | 20,503 | |||||||
Changes in assets and liabilities: | ||||||||
| Accounts receivables | (1,139 | ) | (416 | ) | ||||
| Receivables from sales representatives | (7,579 | ) | (2,252 | ) | ||||
| Inventory of paper | (23 | ) | (116 | ) | ||||
| Prepaid expenses and other current assets | (3,589 | ) | (7,525 | ) | ||||
| Long term assets | 419 | 1,279 | ||||||
| Accounts payable | 1,320 | 686 | ||||||
| Accrued liabilities and liabilities for incentive and bonus plans | 5,578 | 563 | ||||||
| Deferred income and customer prepayments | 10,866 | 22,777 | ||||||
| Tax liability | 313 | 130 | ||||||
Net cash provided by operating activities | 35,668 | 35,629 | ||||||
Cash flows from investing activities: | ||||||||
| Purchase of property and equipment | (4,876 | ) | (7,338 | ) | ||||
| Proceeds from sale of equipment | 30 | 13 | ||||||
| Proceeds from matured bonds | 200 | 240 | ||||||
| Purchase of available-for-sale securities | (531,979 | ) | (363,544 | ) | ||||
| Proceeds from sale of available-for-sale securities | 428,750 | 349,705 | ||||||
| Net proceeds from sale of shares to minority shareholder, interest received thereon and repurchase of share dividends from minority shareholder | 2,719 | - | ||||||
Net cash used in investing activities | (105,156 | ) | (20,924 | ) | ||||
Cash flows from financing activities: | ||||||||
| Proceeds from the issue of common shares, net of share issue expenses | - | 38,303 | ||||||
| Amount received towards directors purchase plan | 359 | 118 | ||||||
Net cash generated from financing activities | 359 | 38,421 | ||||||
| Net (decrease) increase in cash and cash equivalents | (69,129 | ) | 53,126 | |||||
| Cash and cash equivalents, beginning of the year | 94,321 | 41,195 | ||||||
Cash and cash equivalents, end of the year | $ | 25,192 | $ | 94,321 | ||||
Supplemental cash flow disclosures: | ||||||||
| Income tax paid | $ | 586 | $ | 629 | ||||
