Editorial Summary

Mass transit digital advertiser VisionChina Media Inc. (Nasdaq: VISN) recorded net income of $8.5 million, up 56.7 percent from $5.4 million in the previous quarter and over thirty-fold from $0.3 million a year ago, for the second quarter of 2008. Total revenue was $20.3 million, up 48.8 percent quarter-on-quarter and 332.4 percent year-on-year. As a result of the May 12 earthquake, VisionChina lost $2.6 million in revenue, approximately 540 advertising hours, to broadcast cancellations and disruptions. Average advertising service revenue per broadcasting hour grew to $661 per broadcasting hour from $493 in the first quarter of 2008, a 34 percent increase, and $240 in the year-ago period mainly due to a rate card increase instituted on May 1. VisionChina sold an average of 8.14 advertising minutes per broadcast hour, compared to 6.59 minutes in the second quarter of 2007.

Network capacity, measured by total broadcasting duration, rose from 15,536 hours in the year-ago period to 29,523 hours. By June 30, 2008, VisionChina's bus and subway networks covered a total of 17 cities with 60,160 displays. The company and its 437 employees, 276 in sales and marketing, had sold advertising time to 594 advertisers by the end of the quarter.

VisionChina is projecting third quarter 2008 revenue between $34 million and $36 million, with non-GAAP net income of between $15 million and $17 million. For the full year, VisionChina is raising estimates to total revenue between $101 million and $105 million with non-GAAP net income between $44 million and $48 million. On July 1, VisionChina significantly increased the rate card for advertising time on all Shenzhen subway platform screens and on the five large screens in Guangzhou subway platforms.

VisionChina Media has received "Class B" status from the Beijing Olympic Organizing Committee allowing the company to display advertisements from both Olympic sponsors and non-Olympic sponsors not in direct competition with Olympic sponsors in Olympic cities during the 2008 games. "Class A" advertisers can only display ads from official Olympic sponsors.