Anyone complaining about "earn-out-payments" information not being available needs to have read some of the 2008 6-k's at sec.gov. James Lee from Sterne Agee apparently needs to do some basic research reading VISN's filings. If James Lee from Sterne Agee did read the filings he would not be sooo confused. Dina answered his questions consistently from what has been documented ALREADY in the sec filings. No wonder why these analysts always seem to be wrong at the top and bottom of an issue.
And all the folks on this board spewing the earn-out payements were not known and they never disclosed this should be totally discredited in anything they say as they apparently have an agenda to bring the VISN price down. But all you have to do is read a few filings and you will see that VISN has disclosed everything mentioned at the latest conf call. I carefully went back and verified the info. Which compels me to be even more bullish on VISN's prospects.
The 6 ad agencies obviosuly exceeded their AR collections and net-income targets. Folks should understand if these ad agencies make more money then VISN benefits and should pay more in the "earn-out".... a win-win, IMHO.
"As of September 30, 2008, the Company held cash of US$141.0 million. While the Company expects that its need for cash may further increase to support its strong growth in the near future, the Company intends to continue its efforts to collect accounts receivable to enhance its cash position. In addition to its working capital needs, the Company expects its primary cash liquidity requirements in the near future to include: (i) payments pursuant to agreements under its exclusive agency model to purchase advertising time from local mobile digital television companies; and (ii) the net cash outflow (“Earn-out Payment Cash Outflow”) resulting from the Company’s payment obligations (“Earn-out Payment Obligations”) to sellers of the six advertising agency businesses (the “Acquired Businesses”) it acquired in April, May and August 2008, based on the performance of the Acquired Businesses. With respect to each of the Acquired Businesses, the Company entered into a share subscription agreement with the sellers of such Acquired Business, under which the Company and the sellers will determine the net profit generated by such Acquired Business in the period from the completion of the acquisition through December 31, 2008 and in the years ending December 31, 2009 and 2010 after the end of the relevant periods. If there is a net profit for any of these relevant periods, the Company will make payments to the sellers, the amount of which will be determined in reference to cash actually received in respect of such profit. The Company estimates that for the three months ending December 31, 2008, payments under exclusive agency agreements the Company currently has entered into with local mobile digital television companies will total US$8 million. The Company further estimates that for the year ending December 31, 2009, payments under exclusive agency agreements the Company currently has entered into with local digital television companies will total US$32 million and its Earn-out Payment Cash Outflow will be in the range of US$12 million to US$13 million. The estimated amount of the Earn-out Payment Cash Outflow in 2009 reflects the result of the estimated Earn-out Payment Obligations of the Company in 2009 minus the estimated amount of cash to be collected in respect of revenues that are generated by the Acquired Businesses in the period from the completion of acquisition to December 31, 2008.
From what I am reading the rest of the 2008 earn out payements will get payed when the 6 ad agencies collect the rest of the revenue AND if there is a net-income AND if they collected revenues under 180 days.
So the more they collect the more cash VISN generates, it really is a win-win.
James Lee should understand it is accretive to shareholders. They are using the free cash flow generated from the businesses they acquired for the earn out payments. Pretty shrewd. They are saying, "We no pay you for da business now but will pay you a year after you generate cash and net-income and need to collect AR under 180 days." Seems like a very nice deal for VisionChina Media. Any comments?