Form 6-K

 

 

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 UNDER

THE SECURITIES EXCHANGE ACT OF 1934

For the month of August 2014

Commission File Number: 001-35147

 

 

RENREN INC.

 

 

1/F, North Wing

18 Jiuxianqiao Middle Road

Chaoyang District, Beijing, 100016

People’s Republic of China

+86 (10) 8448-1818

(Address of principal executive offices)

 

 

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

Form 20-F  x            Form 40-F  ¨

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):  ¨

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):  ¨

 

 

 


SIGNATURE

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.

 

Renren Inc.
 

/s/ Hui Huang

Name:   Hui Huang
Title:   Chief Financial Officer

Date: August 26, 2014


Exhibit Index

Exhibit 99.1—Press release

EX-99.1

Exhibit 99.1

 

LOGO

Renren Announces Unaudited Second Quarter 2014 Financial Results

BEIJING, China, August 25, 2014 — Renren Inc. (NYSE: RENN) (“Renren” or the “Company”), a leading real-name social networking internet platform in China, today announced its unaudited financial results for the second quarter ended June 30, 2014.

Second Quarter 2014 Highlights

 

  Total net revenues were US$25.0 million, a 42.4% decrease from the corresponding period in 2013.

- Renren net revenues were US$15.1 million, a 26.7% decrease from the corresponding period in 2013.

- Games net revenues were US$9.9 million, a 56.6% decrease from the corresponding period in 2013.

 

  Gross profit was US$9.1 million, a 65.0% decrease from the corresponding period in 2013.

 

  Operating loss was US$30.4 million, compared to an operating loss of US$25.9 million in the corresponding period in 2013.

 

  Net income attributable to the Company was US$31.3 million, compared to a net loss of US$9.3 million in the corresponding period in 2013.

 

  Adjusted net income (1) (non-GAAP) was US$37.4 million, compared to an adjusted net loss of US$3.8 million in the corresponding period in 2013.

“In the beginning of this year, Renren made a strategic shift to focus on college students and young generations in China. We are encouraged to see the progress we have made in this direction, as Renren has increasingly become the go-to brand for reaching and influencing this important demographic in China. Meanwhile, our on-line video business, 56.com, has also seen strong growth in daily video viewership and UGC video uploads, which both reached record highs,” commented Joseph Chen, Chairman and Chief Executive Officer, “On the other hand, we continue to face challenges in monetization of most of our assets. As a result, we have taken further steps to streamline the organization and enhanced our efforts to explore new monetization approaches. We will do our best to reduce the gap between our user base size and the monetization level, and unlock the value of our assets.”

Second Quarter 2014 Results

Total net revenues for the second quarter of 2014 were US$25.0 million, representing a 42.4% decrease from the corresponding period in 2013.

 

(1) Adjusted net income (loss) is a non-GAAP measure, which is defined as net income (loss) excluding share-based compensation expenses amortization of intangtible assets and impairment of intangible assets.


Renren net revenues were US$15.1 million, representing a 26.7% decrease from the corresponding period of 2013. Within Renren net revenues, online advertising revenues were US$11.7 million for the second quarter of 2014, a 23.9% decrease from the corresponding period of 2013. The decrease was due to increased competition and to the Company’s being still in the early stages of monetizing its mobile traffic. Internet Value-Added Services (IVAS) revenues were US$3.4 million, representing a 35.0% decrease from the corresponding period in 2013. Monthly unique log-in users decreased from approximately 54 million in June 2013 to approximately 44 million in June 2014.

Games net revenues were US$9.9 million for the second quarter of 2014, a 56.6% decrease from the corresponding period of 2013. The decrease was mainly due to previously launched games having entered into mature stages and to the fact that the restructuring of our gaming business since late 2013 has yet to result in the launch of successful new titles.

Cost of revenues was US$15.9 million, a 9.1% decrease from the corresponding period of 2013.

Operating expenses were US$39.5 million, a 23.8% decrease from the corresponding period of 2013.

Selling and marketing expenses were US$11.6 million, a 37.3% decrease from the corresponding period of 2013. The decrease was primarily due to the decrease in advertising and promotions for online games plus decreased headcount and personnel related expense for Renren.

Research and development expenses were US$13.4 million, a 33.9% decrease from the corresponding period in 2013. The decrease was primarily due to headcount reduction and decrease in personnel related expenses.

General and administrative expenses were US$14.0 million, a 7.6% increase from the corresponding period in 2013. The increase was primarily due to the increase in bad debt expenses related to our SME advertising customers.

Share-based compensation expenses, which were all included in operating expenses, were US$5.3 million, compared to US$5.2 million in the corresponding period in 2013.

Operating loss was US$30.4 million, compared to an operating loss of US$25.9 million in the corresponding period in 2013.

Realized gain on short-term investments was US$86.0 million, compared to US$0.1 million in the corresponding period in 2013. The gain was primarily derived from sales of marketable securities.

Net income attributable to the Company was US$31.3 million, compared to a net loss of US$9.3 million in the corresponding period in 2013. This was primarily due to the US$86.0 million gain on the sales of short-term investments.

Adjusted net income (non-GAAP) was US$37.4 million, compared to an adjusted net loss of US$3.8 million in the corresponding period in 2013. This was primarily due to the US$86.0 million gain on the sales of short-term investments. Adjusted net income (loss) is defined as net income (loss) excluding share-based compensation expenses, amortization of intangible assets and impairment of intangible assets.


Share Repurchase Program

Our previous share repurchase program expired on June 27, 2014, with approximately 22.4 million ADSs repurchased with a total consideration of US$69.4 million. Our board of directors has authorized a new share repurchase program to repurchase up to US$100 million of the Company’s ADSs within one year from June 28, 2014.

Business Outlook

The Company expects to generate revenues in an amount ranging from US$19 million to US$21 million in the third quarter of 2014, representing a 48.9% to 53.8% year-over-year decline. This forecast reflects Renren’s current and preliminary view, which is subject to change.

Conference Call Information

Management will host an earnings conference call at 9:00 p.m. Eastern Time on Monday, August 25, 2014 (Beijing/Hong Kong Time: 9:00 a.m., Tuesday, August 26, 2014).

Interested parties may participate in the conference call by dialing the numbers below and entering the passcode 10-15 minutes prior to the initiation of the call.

Dial-in Information:

US: +1 845-675-0437

Hong Kong: +852-2475-0994

China: +86 800-819-0121

International: + 65-6723-9381

Passcode: Renren

A replay of the call will be available for one week and dial-in information is as follows:

International: + 61 2-8199-0299

Passcode: 88543599

This call will be webcast live and the replay will be available on Renren’s corporate web site at http://ir.renren-inc.com for 12 months.

About Renren Inc.

Renren Inc. (NYSE: RENN) operates a leading real name social networking internet platform in China. It enables users to connect and communicate with each other, share information and user generated content, play online games, watch videos and enjoy a wide range of other features and services. Renren’s businesses primarily include the main social networking website renren.com, the game development and operating platform Renren Games, and the user-generated content focused video sharing website 56.com. Renren.com had approximately 214 million activated users as of June 30, 2014. Renren’s American depositary shares, each of which represents three Class A ordinary shares, trade on NYSE under the symbol “RENN”.


Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates” and similar statements. Among other things, the business outlook for the third quarter of 2014 and quotations from management in this announcement, as well as Renren’s strategic and operational plans, contain forward-looking statements. Renren may also make written or oral forward-looking statements in its filings with the U.S. Securities and Exchange Commission (“SEC”), 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 Renren’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: our goals and strategies; our future business development, financial condition and results of operations; the expected growth of the social networking site market in China; our expectations regarding demand for and market acceptance of our services; our expectations regarding the retention and strengthening of our relationships with key advertisers and customers; our plans to enhance user experience, infrastructure and service offerings; competition in our industry in China; and relevant government policies and regulations relating to our industry. Further information regarding these and other risks is included in our annual report on Form 20-F and other documents filed with the SEC. All information provided in this press release and in the attachments is as of the date of this press release, and Renren does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

About Non-GAAP Financial Measures

To supplement Renren’s consolidated financial results presented in accordance with United States Generally Accepted Accounting Principles (“GAAP”), Renren uses “adjusted net income (loss)” which is defined as “a non-GAAP financial measure” by the SEC, in evaluating its business. We define adjusted net income (loss) as net income (loss) excluding share-based compensation expenses, amortization of intangible assets and impairment of intangible assets. We present adjusted net income (loss) because it is used by our management to evaluate our operating performance. We also believe that this non-GAAP financial measure provide useful information to investors and others in understanding and evaluating our consolidated results of operations in the same manner as our management and in comparing financial results across accounting periods and to those of our peer companies.

The presentation of this non-GAAP financial measure is not intended to be considered in isolation from, or as a substitute for, the financial information prepared and presented in accordance with GAAP. For more information on these non-GAAP financial measures, please see the table captioned “Reconciliation of non-GAAP results of operations measures to the comparable GAAP financial measures” at the end of this release.

For more information, please contact:

Cynthia Liu

Investor Relations

Renren Inc.

Tel: (86 10) 8448 1818 ext 1300

Email: ir@renren-inc.com


RENREN INC.

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

 

(Amounts in US dollars, in thousands, except shares,    December 31,     June 30,  
per shares, ADS, and per ADS data)    2013     2014  

ASSETS

    

Current assets:

    

Cash and cash equivalents

   $ 154,308      $ 238,898   

Term deposits

     492,699        574,215   

Short-term investments

     301,995        73,589   

Accounts and notes receivable, net

     15,958        15,399   

Prepaid expenses and other current assets

     34,080        29,318   

Amounts due from related parties

     62,411        508   

Deferred tax assets-current

     628        628   

Equity method investment-current

     60,508         
  

 

 

   

 

 

 

Total current assets

     1,122,587        932,555   

Non-current assets:

    

Property and equipment, net

     58,560        52,984   

Intangible assets, net

     27,397        26,050   

Goodwill

     61,407        59,924   

Long-term investments

     107,842        140,923   

Deferred tax assets-non-current

     1,109        1,144   

Other non-current assets

     6,784        24,117   
  

 

 

   

 

 

 

Total non-current assets

     263,099        305,142   
  

 

 

   

 

 

 

TOTAL ASSETS

   $ 1,385,686      $ 1,237,697   
  

 

 

   

 

 

 

LIABILITIES AND EQUITY

    

Current liabilities:

    

Accounts payable

   $ 10,170      $ 8,319   

Accrued expenses and other payables

     33,314        27,446   

Amounts due to related parties

     61,062        187   

Deferred revenue and advance from customers

     8,639        7,603   

Derivative contract liabilities

           13,644   

Income tax payable

     2,077        8,597   
  

 

 

   

 

 

 

Total current liabilities

     115,262        65,796   

Non-current liabilities:

    

Other non-current liabilities

     156        209   
  

 

 

   

 

 

 

Total non-current liabilities

     156        209   
  

 

 

   

 

 

 

TOTAL LIABILITES

     115,418        66,005   

Shareholders’ Equity:

    

Class A ordinary shares

     790        753   

Class B ordinary shares

     305        305   

Additional paid-in capital

     1,285,283        1,250,899   

Statutory reserves

     6,712        6,712   

Accumulated deficit

     (197,726     (134,102

Accumulated other comprehensive income

     174,781        47,003   
  

 

 

   

 

 

 

Total Renren Inc. shareholders’ equity

     1,270,145        1,171,570   
  

 

 

   

 

 

 

Noncontrolling Interests

     123        122   
  

 

 

   

 

 

 

TOTAL EQUITY

     1,270,268        1,171,692   
  

 

 

   

 

 

 

TOAL LIABILITIES AND EQUITY

   $ 1,385,686      $ 1,237,697   
  

 

 

   

 

 

 


RENREN INC.

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

 

     For the Three Months Ended  

(Amounts in US dollars, in thousands, except shares,

per shares, ADS, and per ADS data)

   June 30,
2013
    March 31,
2014
    June 30,
2014
 

Net revenues

      

Renren

   $ 20,611      $ 12,235      $ 15,105   

Games

     22,835        12,660        9,904   
  

 

 

   

 

 

   

 

 

 

Total net revenues

     43,446        24,895        25,009   

Cost of revenues

     (17,523     (16,160     (15,933
  

 

 

   

 

 

   

 

 

 

Gross profit

     25,923        8,735        9,076   

Operating expenses:

      

Selling and marketing

     (18,552     (10,791     (11,641

Research and development

     (20,232     (15,669     (13,379

General and administrative

     (13,024     (11,423     (14,007

Impairment of intangible assets

           (66     (445
  

 

 

   

 

 

   

 

 

 

Total operating expenses

     (51,808     (37,949     (39,472
  

 

 

   

 

 

   

 

 

 

Loss from operations

     (25,885     (29,214     (30,396

Other income

     7        265        272   

Exchange gain (loss) on offshore bank accounts

     358        (2,527     301   

Interest income

     3,057        2,733        2,897   

Realized gain on short-term investments

     144        27,093        85,994   
  

 

 

   

 

 

   

 

 

 

Income (loss) before provision of income tax, earnings (loss) in equity method investments and noncontrolling interest, net of income taxes

     (22,319     (1,650     59,068   

Income tax (expenses) benefit

     307        19        (591
  

 

 

   

 

 

   

 

 

 

Income (loss) before earnings (loss) in equity method investments and noncontrolling interest, net of income taxes

     (22,012     (1,631     58,477   

(Loss) earnings in equity method investments, net of income taxes

     21,451        (23,145     (27,170
  

 

 

   

 

 

   

 

 

 

Income (loss) from continuing operations

     (561     (24,776     31,307   
  

 

 

   

 

 

   

 

 

 

Discontinued operation

      

Loss from operations of discontinued operations, net of income taxes

     (8,823            

Gain on disposal of equity method investment, net of income tax

           57,092         
  

 

 

   

 

 

   

 

 

 

Gain (loss) from discontinued operations, net of income taxes

     (8,823     57,092        —     
  

 

 

   

 

 

   

 

 

 

Net income (loss)

     (9,384     32,316        31,307   

Net loss attributable to noncontrolling interests

     58        1        —     
  

 

 

   

 

 

   

 

 

 

Net income (loss) attributable to Renren Inc.

   $ (9,326   $ 32,317      $ 31,307   
  

 

 

   

 

 

   

 

 

 

Net income (loss) per share from continuing operations attributable to Renren Inc.shareholders:

      

Basic

     (0.00   $ (0.02   $ 0.03   

Diluted

     (0.00   $ (0.02   $ 0.03   

Net income (loss) per share from discontinued operations attributable to Renren Inc.shareholders:

      

Basic

     (0.01   $ 0.05      $ —     

Diluted

     (0.01   $ 0.05      $ —     

Net income (loss) per share attributable to Renren Inc. shareholders:

      

Basic

     (0.01   $ 0.03      $ 0.03   

Diluted

     (0.01   $ 0.03      $ 0.03   

Net income (loss) attributable to Renren Inc. shareholders per ADS:

      

Basic

     (0.03   $ 0.09      $ 0.09   

Diluted

     (0.03   $ 0.09      $ 0.09   


     For the Three Months Ended  

(Amounts in US dollars, in thousands, except shares,

per shares, ADS, and per ADS data)

   June 30,
2013
     March 31,
2014
     June 30,
2014
 

Weighted average number of shares used in calculating net income (loss) per ordinary share from continuing operations attributable to Renren Inc. shareholders:

        

Basic

     1,126,080,546         1,082,856,840         1,062,632,013   

Diluted

     1,126,080,546         1,082,856,840         1,072,951,501   

Weighted average number of shares used in calculating net income (loss) per ordinary share from discontinued operations attributable to Renren Inc. shareholders:

        

Basic

     1,126,080,546         1,082,856,840         1,062,632,013   

Diluted

     1,126,080,546         1,092,355,990         1,062,632,013   

Reconciliation of Non-GAAP results of operations measures to the comparable GAAP financial measures

Adjusted net income (loss)

 

     For the Three Months Ended  
(Amounts in US dollars, in thousands)    June 30,
2013
    March 31,
2014
     June 30,
2014
 

Net income (loss)

   $ (9,384   $ 32,316       $ 31,307   

Add back: Shared-based compensation expenses

     5,182        3,351         5,313   

Add back: Amortization of intangible assets

     377        319         308   

Add back: Impairment of intangible assets

       66         445   
  

 

 

   

 

 

    

 

 

 

Adjusted net income (loss)

   $ (3,825   $ 36,052       $ 37,373