BEIJING, Aug. 29, 2016 /PRNewswire/ -- KongZhong Corporation
(NASDAQ: KZ), a leading online game publisher and developer in the PRC, today announced its unaudited financial results for the
second quarter of 2016.
Second Quarter 2016 Financial Highlights
- Total revenues for the second quarter of 2016 were US$ 46.35 mn, a 9.90% decrease from the
first quarter of 2016 and a 2.52% decrease from the same period last year.
- Total gross profit was US$ 22.67 mn, a 2.60% increase from the first quarter of 2016.
- Net income was US$3.39 mn, with diluted net income per American Depositary Shares ("ADS") was
US$ 0.07.
- Non-GAAP net income was US$ 8.21 mn, a 22.11% increase from the first quarter of 2016 and a
46.16% increase from the same period last year, with Non-GAAP diluted net income per ADS of US$
0.17(Non-GAAP Financial Measures are described and reconciled to the corresponding GAAP measures in the section titled
"Non-GAAP Financial Measures).
- As of June 30th 2016, the Company had US$ 158.82 mn in cash and
cash equivalents, term deposits, held-to-maturity securities, available-for-sale securities and restricted cash or US$ 3.37 per ADS in cash and cash equivalents, term deposits, held-to-maturity securities, available-for-sale
securities and restricted cash, net of a US$ 65.04 mn short-term bank loan. The mark to fair
value of the Company's investments in Ourgame and Forgame were priced at HK$ 3.47 and
HK$ 10.10 per ordinary share, respectively (or US$ 9.27mn and
US$ 15.70mn, respectively) as of June 30th 2016, compared to the
mark to fair value of the Company's investments in Ourgame and Forgame which were priced at HK$
4.35 and HK$ 11.44 per ordinary share, respectively (or US$
11.63mn and US$ 17.78mn, respectively) as of March 31st
2016.
Business Highlights
- The Company will continue to concentrate its efforts in Internet Games and Mobile games around its War Saga game platform,
China's leading military genre online game platform. The Company plans to test and release
additional mobile and PC games around the War Saga theme in 2016.
|
Three Months Ended
|
|
June 30,
|
|
March 31,
|
|
June 30,
|
|
2015
|
|
2016
|
|
2016
|
|
US$ in thousands
|
|
US$ in thousands
|
|
US$ in thousands
|
|
|
|
|
|
|
Revenues
|
47,547
|
|
51,442
|
|
46,348
|
Internet Games
|
24,461
|
|
37,014
|
|
32,929
|
Mobile Games
|
9,429
|
|
4,499
|
|
5,430
|
WVAS
|
13,657
|
|
9,929
|
|
7,989
|
Cost of Revenues before
impairment loss on
intangible assets
|
27,623
|
|
29,344
|
|
23,445
|
Internet Games
|
12,640
|
|
17,813
|
|
13,823
|
Mobile Games
|
4,946
|
|
4,089
|
|
3,133
|
WVAS
|
10,037
|
|
7,442
|
|
6,489
|
Impairment loss on
intangible
assets
|
35,210
|
|
-
|
|
230
|
Gross Profit (Loss)
|
(15,286)
|
|
22,098
|
|
22,673
|
Gross Margin
|
(32%)
|
|
43%
|
|
49%
|
Non-GAAP Gross Profit
|
19,924
|
|
22,098
|
|
22,903
|
Internet Games
|
11,821
|
|
19,201
|
|
19,106
|
Mobile Games
|
4,483
|
|
410
|
|
2,297
|
WVAS
|
3,620
|
|
2,487
|
|
1,500
|
|
|
|
|
|
|
Non-GAAP Gross Margin
|
42%
|
|
43%
|
|
49%
|
Internet Games
|
48%
|
|
52%
|
|
58%
|
Mobile Games
|
48%
|
|
9%
|
|
42%
|
WVAS
|
27%
|
|
25%
|
|
19%
|
Revenues
Total revenues for the second quarter of 2016 were US$ 46.35 mn, a 9.90% decrease from the first
quarter of 2016 and a 2.52% decrease from the same period last year.
Internet Games Revenues
Internet Game ("Net Game") revenues were US$ 32.93 mn in the second quarter of 2016, an 11.04%
decrease from the first quarter of 2016 but a 34.62% increase from the same period last year.
For the second quarter of 2016, mainland China online game operations achieved average
monthly active users ("MAUs") of 2.41 mn and aggregated monthly paying accounts ("APAs") of 389k with monthly average revenue per
user ("ARPU") of RMB 181.
|
Three Months Ended
|
June 30,
2015
|
March 31,
2016
|
June 30,
2016
|
MAU
|
1, 832k
|
2,743k
|
2,410k
|
APA
|
327k
|
455k
|
389k
|
ARPU
|
152
|
170
|
181
|
Internet game revenues made up 71.1% of total revenues in the second quarter of 2016.
Mobile Games Revenues
Total mobile game revenues were US$ 5.43 mn, a 20.69% increase from the first quarter of 2016
but a 42.41% decrease from the same period last year. The increase in mobile game revenues was due to the newly launched mobile
games in the Chinese domestic market and overseas.
Total mobile game revenues made up 11.7% of total revenues in the second quarter of 2016.
WVAS Revenues
WVAS revenues were US$ 7.99mn, a 19.54% decrease from the first quarter of 2016 and a 41.50%
decrease from the same period of last year.
WVAS made up 17.2% of total revenues in the second quarter of 2016.
Gross Profit
Total gross profit for the second quarter of 2016 was US$22.67 mn, but if excluding the effect
of an US$0.23mn impairment loss on intangible assets, Non-GAAP gross profit was US$22.90 mn, a 3.64% increase from gross profit in the first quarter of 2016 and a 14.95% increase from
Non-GAAP gross profit in the same period last year.
Total Non-GAAP gross margin was 49.4% in the second quarter of 2016 compared to Non-GAAP gross margins of 43.0% in the first
quarter of 2016.
Internet Game Gross Profit
Internet game gross profit was US$ 18.88 mn, other than the effect of impairment loss on
intangible assets, internet game Non-GAAP gross profit was US$ 19.11 mn, a 0.49% decrease from
gross profits in the first quarter of 2016 but a 61.63% increase from Non-GAAP gross profit in the same period last year.
Internet game gross margin, other than the effect of impairment loss on intangible assets, was 58.0% compared to 51.9% in the
first quarter of 2016.
Mobile Game Gross Profit
Mobile games gross profit was US$ 2.30 mn, a 460.24% increase from the first quarter of 2016 but
a 48.76% decrease from the same period last year. 2Q16 gross profit returned to normal operating levels compared to 1Q16 due to
recognition of prepaid license fees for offline mobile games in 1Q16. Mobile games gross margin was 42.3% compared to 9.1% in the
first quarter of 2016.
WVAS Gross Profit
WVAS gross profit was US$1.50 mn, a 39.69% decrease from the first quarter of 2016 and a 58.56%
decrease from the same period last year. WVAS gross margin was 18.8% compared to 25.0% in the first quarter of 2016.
Operating Expenses
Total operating expenses in the second quarter of 2016 were US$18.68 mn compared to US$17.48 mn in the first quarter of 2016. The operating expenses in the second quarter of 2016 included the
impairment amount of US$1.72 mn related to prepaid license fees for games that will not be
launched.
Product development expenses in the second quarter of 2016 were US$ 5.61 mn compared to
US$ 6.16 mn in the first quarter of 2016.
Sales and marketing expenses in the second quarter of 2016 were US$ 9.12 mn compared to
US$9.07 mn in the first quarter of 2016.
General and administrative expenses in the second quarter of 2016 were US$2.23 mn compared to
US$2.25 mn in the first quarter of 2016.
The Company's total headcount in the second quarter of 2016 was 822 staff compared to 789 staff at the end of the first
quarter of 2016.
Earnings
US GAAP net income and diluted income per ADS were US$ 3.39 mn and US$
0.07, respectively. Non-GAAP net income and diluted income per ADS were US$ 8.21 mn and
US$ 0.17, respectively.
Total ADS on a diluted basis outstanding during the second quarter of 2016 were 47.32mn, compared to 47.50mn outstanding
during the first quarter of 2016.
For the purpose of earnings
per share calculation
|
Number during three
months ended
March 31, 2016
|
Number during three
months ended
June 30, 2016
|
ADS (in mns)
|
47.10
|
47.10
|
Add: Dilution impact from
options and nonvested shares
|
0.23
|
0.18
|
Warrants issued to business
partners
|
0.17
|
0.04
|
ADS on diluted basis
|
47.50
|
47.32
|
Balance Sheet
As of June 30th 2016, the Company had US$ 158.82 mn in cash and
cash equivalents, term deposits, held-to-maturity securities, available-for-sale securities and restricted cash or US$ 3.37 per ADS in cash and cash equivalents, term deposits, held-to-maturity securities, available-for-sale
securities and restricted cash, net of a US$ 65.04 mn short-term bank loan. The mark to fair value
of the Company's investments in Ourgame and Forgame were priced at HK$ 3.47 and HK$ 10.10 per ordinary share, respectively (or US$ 9.27mn and US$ 15.70mn, respectively) as of June 30th 2016, compared to the mark to fair
value of the Company's investments in Ourgame and Forgame which were priced at HK$ 4.35 and
HK$ 11.44 per ordinary share, respectively (or US$ 11.63mn and
US$ 17.78mn, respectively) as of March 31st 2016.
Recent Developments
On June 29, 2015, the Company announced that its board of directors (the "Board") had received a
preliminary non-binding proposal letter from Leilei Wang, chairman and chief executive officer of
the Company, and IDG-Accel China Growth Fund II L.P. to acquire all of the outstanding ordinary shares of the Company not owned
by them or their affiliates for US$8.56 in cash per American depositary share (the "ADS", each
representing forty ordinary shares) (the "Going Private Proposal").
On July 8, 2015, the Company announced that the Board has formed a special committee (the
"Special Committee") consisting of two independent directors, Hope Ni and Xiaolong Li, and delegated to the Special Committee the exclusive power and authority of the Board to, among
other things, evaluate and respond to the Going Private Proposal. Ms. Ni is serving as the chair of the Special Committee.
On November 3, 2015, the Company announced that the Special Committee has retained Duff &
Phelps, LLC and Duff & Phelps Securities LLC as its financial advisors and Skadden, Arps, Slate, Meagher & Flom as its
legal counsel in connection with its review and evaluation of the Going Private Proposal.
On August 25, 2016, the Company announced the Board received a revised non-binding proposal letter, dated August 25, 2016, from Mr. Leilei Wang, chairman and chief executive officer of
the Company, and IDG-Accel China Growth Fund II L.P., who, together with certain other parties, formed a buyer group (the "Buyer
Group") to acquire all of the outstanding ordinary shares of the Company not owned by them or their affiliates (the
"Transaction") for US$7.18 in cash per American depositary share ("ADS", each representing forty
ordinary shares), or approximately US$0.1795 per ordinary share.
The special committee of the Board (the "Special Committee"), formed to consider the original proposal by the Buyer Group, is
evaluating this revised proposal with the assistance of its financial and legal advisors. The Special Committee cautions the
Company's shareholders and others considering trading in the Company's securities that no decision has been made by the Special
Committee or the Board with respect to the revised proposal. There can be no assurance that any definitive offer will be made,
any agreement will be executed or that this or any other transaction will be approved or consummated.
The Board cautions the Company's shareholders and others considering trading in the Company's securities that no decisions
have been made by the Special Committee or the Company with respect to the Company's response to the Going Private Proposal.
There can be no assurance that any definitive offer will be made, that any agreement will be executed or that this or any other
proposed transaction involving the Company, its securities and/or its assets will be approved or consummated. The Company does
not undertake any obligation to provide any updates with respect to this or any other proposed transaction, except as required
under applicable law.
Conference Call
KongZhong's management will hold a conference call and live webcast to discuss the results at 7:30 PM
Eastern Standard Time (EST) on Monday, August 29, 2016 (7:30
AM Beijing/Hong Kong time, Tuesday, August 30, 2016)
The Company welcomes all interested parties to participate in the live conference call. An Operator will greet you and ask for
the Conference ID shown as following.
Conference ID: 67090787
The dial-in details are as below:
U.S. Toll Free Dial-in Number:
|
+1 866 519 4004
|
U.S. Dial-in Number:
|
+1 845 675 0437
|
Hong Kong Toll Free Dial-in Number:
|
800 906 601
|
Hong Kong Dial-in Number:
|
+852 3018 6771
|
Mainland China Dial-in Number:
|
800 819 0121, 400 620 8038
|
International Dial-in Number:
|
+65 6713 5090
|
The live conference call via webcast and archive replay will be available on the Investor Relations section of KongZhong's
website athttp://ir.kongzhong.com. The archive replay will
be available on the website shortly after the call.
A dial-in replay of the conference call will be available until September 6, 2016(EST):
U.S. Toll Free Dial-in Number:
|
+1 855 452 5696
|
U.S. Dial-in Number:
|
+1 646 254 3697
|
Hong Kong Toll Free Dial-in Number:
|
800 963 117
|
Hong Kong Dial-in Number:
|
+852 3051 2780
|
Mainland China Toll Free Dial-in Number:
|
800 870 0205, 400 602 2065
|
International Dial-in Number:
|
+61 2 8199 0299
|
About KongZhong
KongZhong Corporation (NASDAQ: KZ), listed on Nasdaq in 2004, is a leading online game developer and operator in China. KongZhong operates three main business units, namely Internet Games, Mobile Games and WVAS. Under
Internet Games, KongZhong operates the largest Chinese military gaming platform under the "WAR SAGA" brand, which includes games
such as World of Tanks, World of Warplanes and World of Warships. KongZhong has the exclusive publishing rights for World of
Tanks, World of Warplanes, World of Warships, Guild Wars 2, Blitzkrieg 3 and other titles in Mainland China.
KongZhong entered the smartphone game industry in 2011 through an acquisition of smartphone game engine and has expanded its
mobile game development team across 4 cities across Mainland China. KongZhong offers popular mobile games in China and overseas with over 10 smartphone games across various genres being under development, including
RPG, RTS, military, fantasy and etc. For more information, please visit http://ir.kongzhong.com.
Safe Harbor Statements
This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements include, without limitation,
statements regarding trends in the wireless value-added services, wireless media, mobile games and online games industries and
our future results of operations, financial condition and business prospects. Although such statements are based on our own
information and information from other sources we believe to be reliable, you should not place undue reliance on them.
These statements involve risks and uncertainties, and actual market trends and our results may differ materially from those
expressed or implied in these forward looking statements for a variety of reasons. Potential risks and uncertainties
include, but are not limited to, continued competitive pressure in China's wireless value-added
services, wireless media, mobile games and online games industries and the effect of such pressure on revenues; our ability to
develop new products that are commercially successful; unpredictable changes in technology, consumer demand and usage preferences
in the markets we operate; our ability to protect our intellectual property rights; the short operating history of certain of our
business segments, in particular the online games segment; the state of and any change in our relationship with
China's telecommunications operators; our dependence on the billing systems of
telecommunications operators for our performance; the outcome of our investment of operating income generated from the WVAS
segment into the development of our wireless Internet, mobile games and online games segments; changes in the regulations or
policies of the Ministry of Industry and Information Technology and other government authorities relevant to our businesses; and
changes in political, economic, legal and social conditions in China, including the Chinese
government's policies with respect to economic growth, foreign exchange, foreign investment and entry by foreign companies into
China's telecommunications and online games markets. For additional discussion of these
risks and uncertainties and other factors, please see the documents we file from time to time with the Securities and Exchange
Commission. We assume no obligation to update any forward-looking statements, which apply only as of the date of this press
release.
KongZhong Corporation
|
Condensed Consolidated Statements of Comprehensive Income
|
(Unaudited, US$ in thousands, except per share and share data)
|
|
|
Three Months Ended
|
|
|
June 30,
|
|
March 31,
|
|
June 30
|
|
|
2015
|
|
2016
|
|
2016
|
|
|
|
|
|
|
|
Revenues
|
|
47,547
|
|
51,442
|
|
46,348
|
Cost of revenues
|
|
|
|
|
|
|
Cost of revenues before impairment loss on
intangible assets
|
|
27,623
|
|
29,344
|
|
23,445
|
Impairment loss on intangible assets
|
|
35,210
|
|
-
|
|
230
|
Total cost of revenues
|
|
62,833
|
|
29,344
|
|
23,675
|
Gross profit(loss)
|
|
(15,286)
|
|
22,098
|
|
22,673
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
|
|
|
|
Product development
|
|
6,123
|
|
6,158
|
|
5,605
|
Sales and marketing
|
|
8,106
|
|
9,075
|
|
9,121
|
General and administrative
|
|
3,178
|
|
2,250
|
|
2,230
|
Recognition of prepaid license fees of
games
|
|
-
|
|
-
|
|
1,716
|
Total operating expenses
|
|
17,407
|
|
17,483
|
|
18,672
|
|
|
|
|
|
|
|
Government subsidy
|
|
326
|
|
71
|
|
121
|
|
|
|
|
|
|
|
Income(Loss) from operations
|
|
(32,367)
|
|
4,686
|
|
4,122
|
|
|
|
|
|
|
|
Interest income
|
|
1,298
|
|
2,245
|
|
2,337
|
Interest expense
|
|
(192)
|
|
(207)
|
|
(397)
|
Impairment loss on long-term investments
|
|
-
|
|
-
|
|
(1,972)
|
Exchange loss
|
|
(32)
|
|
(147)
|
|
(81)
|
Gain on sale of available-for-sale securities
|
|
1,164
|
|
19,781
|
|
-
|
Income(loss) before income tax expense,
loss on equity method investments
|
|
(30,129)
|
|
26,358
|
|
4,009
|
Income tax expense
|
|
(174)
|
|
(208)
|
|
(201)
|
Loss on equity method investments, net of
income tax
|
|
(121)
|
|
(547)
|
|
(414)
|
Net income(loss)
|
|
(30,424)
|
|
25,603
|
|
3,394
|
|
|
|
|
|
|
|
Earnings per ADS, basic
|
|
(0.65)
|
|
0.54
|
|
0.07
|
Earnings per ADS, diluted
|
|
(0.65)
|
|
0.54
|
|
0.07
|
Weighted average ADS outstanding (million)
|
|
46.65
|
|
47.10
|
|
47.10
|
Weighted average ADS used in diluted EPS
calculation (million)
|
|
46.65
|
|
47.50
|
|
47.32
|
Net income(loss)
|
|
(30,424)
|
|
25,603
|
|
3,394
|
Other comprehensive income (loss)
|
|
32,402
|
|
(23,202)
|
|
(10,614)
|
Total comprehensive income (loss)
|
|
1,978
|
|
2,401
|
|
(7,220)
|
Less: Comprehensive loss attributable to
non-controlling interest
|
|
-
|
|
-
|
|
(21)
|
Total comprehensive income (loss)
attributable to KongZhong Corporation
|
|
1,978
|
|
2,401
|
|
(7,199)
|
KongZhong Corporation
|
Condensed Consolidated Balance Sheets
|
(Unaudited, US$ in thousands)
|
|
|
|
|
|
|
|
|
|
As of June 30,
|
|
As of March 31,
|
|
As of June 30,
|
2015
|
|
2016
|
2016
|
Assets
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
61,618
|
|
66,751
|
|
64,972
|
Term deposits
|
|
26,094
|
|
124
|
|
124
|
Available-for-sale securities
|
|
84,792
|
|
29,414
|
|
24,970
|
Held-to-maturity securities
|
|
15,023
|
|
47,361
|
|
50,706
|
Accounts receivable (net)
|
|
30,898
|
|
29,146
|
|
27,357
|
Restricted cash
|
|
62,510
|
|
67,015
|
|
65,297
|
Other current assets
|
|
43,950
|
|
84,511
|
|
76,169
|
Total current assets
|
|
324,885
|
|
324,322
|
|
309,595
|
|
|
|
|
|
|
|
Non-current assets
|
|
|
|
|
|
|
Rental deposits
|
|
1,447
|
|
1,464
|
|
1,430
|
Intangible assets (net)
|
|
14,263
|
|
11,499
|
|
10,310
|
Property and equipment (net)
|
|
6,018
|
|
4,130
|
|
3,651
|
Long-term investments
|
|
2,042
|
|
5,940
|
|
4,611
|
Goodwill
|
|
90,099
|
|
85,200
|
|
82,991
|
Restricted cash
|
|
-
|
|
18,263
|
|
17,795
|
Total non-current assets
|
|
113,869
|
|
126,496
|
|
120,788
|
Total assets
|
|
438,754
|
|
450,818
|
|
430,383
|
|
|
|
|
|
|
|
Liabilities and Shareholders' Equity
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
Accounts payable
(including accounts payable of the
consolidated variable interest entities
("VIE") without recourse to KongZhong
Corporation of $29,153, $31,099 and
$21,659 as of June 30, 2015, March 31,
2016 and June 30, 2016, respectively)
|
|
29,202
|
|
31,611
|
|
21,677
|
Short-term bank loan
(including short-term bank loan of the
consolidated VIE without recourse to
KongZhong Corporation of $nil, $15,474
and $15,078 as of June 30, 2015, March 31,
2016 and June 30, 2016, respectively)
|
|
49,963
|
|
65,437
|
|
65,040
|
Deferred revenue
(including deferred revenue of the
consolidated VIE without recourse to
KongZhong Corporation of $3,233,
$17,188 and $12,181 as of June 30, 2015,
March 31, 2016 and June 30, 2016,
respectively)
|
|
3,262
|
|
17,218
|
|
12,210
|
Other current liabilities
(including other current liabilities of the
consolidated VIE without recourse to
KongZhong Corporation of $11,466,
$16,400 and $19,426 as of June 30, 2015,
March 31, 2016 and June 30, 2016,
respectively)
|
|
19,300
|
|
22,134
|
|
24,691
|
|
|
|
|
|
|
|
Total liabilities
|
|
101,727
|
|
136,400
|
|
123,618
|
|
|
|
|
|
|
|
Total KongZhong Corporation
shareholders' equity
|
|
337,027
|
|
314,418
|
|
306,597
|
Non-controlling interest
|
|
-
|
|
-
|
|
168
|
Shareholders' equity
|
|
337,027
|
|
314,418
|
|
306,765
|
Total liabilities and shareholders' equity
|
|
438,754
|
|
450,818
|
|
430,383
|
KongZhong Corporation
|
Condensed Consolidated Statements of Cash Flows
|
(Unaudited, US$ in thousands)
|
|
|
Six Months Ended
|
|
|
June 30,
|
|
June 30,
|
|
|
2015
|
|
2016
|
Cash Flows From Operating Activities
|
|
|
|
|
Net income (loss)
|
|
(26,227)
|
|
28,997
|
Adjustments to reconcile net income to net cash
provided by operating activities
|
|
|
|
|
Depreciation and amortization
|
|
7,539
|
|
3,062
|
Gain on sale of available-for-sale securities
|
|
-
|
|
(19,781)
|
Imputed interest on long-term liabilities
|
|
140
|
|
-
|
Loss on equity method investments
|
|
146
|
|
961
|
Share-based compensation
|
|
468
|
|
245
|
Impairment loss on intangible assets
|
|
35,210
|
|
230
|
Impairment loss on long-term investments
|
|
-
|
|
1,972
|
Changes in operating assets and liabilities
|
|
(15,032)
|
|
5,990
|
Net Cash Provided by Operating Activities
|
|
2,244
|
|
21,676
|
|
|
|
|
|
Cash Flows From Investing Activities
|
|
|
|
|
Purchase of term deposits
|
|
(9,989)
|
|
-
|
Proceeds from disposal of term deposits
|
|
815
|
|
24,881
|
Acquisition of equity method investment
|
|
(1,369)
|
|
-
|
Acquisition of cost method investment
|
|
-
|
|
(920)
|
Temporary advances
|
|
(3,264)
|
|
-
|
Purchase of held-to-maturity securities
|
|
(34,158)
|
|
(62,056)
|
Purchase of available-for-sale securities
|
|
(25,512)
|
|
(970)
|
Proceeds from disposal of available-for-sale securities
|
|
1,500
|
|
25,139
|
Proceeds from disposal of held-to-maturity
securities
|
|
43,495
|
|
37,144
|
Purchase of property and equipment
|
|
(1,811)
|
|
(238)
|
Addition of restricted cash
|
|
(8,145)
|
|
(26,260)
|
Release of restricted cash
|
|
9,989
|
|
-
|
Loans to equity method investee
|
|
(13,500)
|
|
(15,537)
|
Loan repayment from third party
|
|
-
|
|
13,300
|
Loan repayment from equity method investee
|
|
-
|
|
6,434
|
Loan to related party
|
|
-
|
|
(475)
|
Net Cash Provided by (Used in) Investing Activities
|
|
(41,949)
|
|
442
|
|
|
|
|
|
Cash Flows From Financing Activities
|
|
|
|
|
Proceeds from exercise of employee stock
options
|
|
433
|
|
21
|
Deferred payments for intangible assets
|
|
(10,396)
|
|
(10,158)
|
Proceeds from bank borrowing
|
|
7,534
|
|
15,324
|
Net Cash Provided by (Used in) Financing Activities
|
|
(2,429)
|
|
5,187
|
|
|
|
|
|
Effect of foreign exchange rate changes
|
|
(1,341)
|
|
(637)
|
|
|
|
|
|
Net increase (decrease) in Cash and Cash Equivalents
|
|
(43,475)
|
|
26,668
|
Cash and Cash Equivalents, Beginning of Period
|
|
105,093
|
|
38,304
|
Cash and Cash Equivalents, End of Period
|
|
61,618
|
|
64,972
|
Non-GAAP Financial Measures
|
To supplement the unaudited condensed statements of comprehensive income
presented in accordance with US GAAP, the Company uses non-GAAP financial measures (Non-GAAP Financial Measures) of gross
profit, net income and net income per diluted ADS, which are adjusted from results based on GAAP to exclude certain
infrequent or unusual or non-cash based expenses, gains and losses. The Non-GAAP Financial Measures are provided as
additional information to help both management and investors compare business trends among different reporting periods on
a consistent and more meaningful basis and enhance investors' overall understanding of the Company's current financial
performance and prospects for the future.
The Non-GAAP Financial Measures should be considered in addition to results prepared in accordance with GAAP, but should
not be considered a substitute for or superior to GAAP results. In addition, the Company's calculation of the Non-GAAP
Financial Measures may be different from the calculation used by other companies, and therefore comparability may be
limited.
For the periods presented, the Company's non-GAAP gross profit excludes, as applicable, impairment loss on intangible
assets. In addition, the Company's non-GAAP net income and non-GAAP net income per diluted ADS exclude, as
applicable, the amortization of intangibles, share-based compensation expense, gain on sale of available-for-sale
securities, impairment of intangible assets, investment impairment loss, as well as recognition of prepaid license fees
for games are adjusted for the dilution impact on ADS numbers from stock options, non-vested shares and
warrants.
Reconciliation of the Company's Non-GAAP financial measures to the GAAP financial measures is set forth below.
|
(US$ in thousands, except per share and share data)
|
|
|
Three Months Ended
|
June 30,
|
|
March 31,
|
|
June 30,
|
|
2015
|
|
2016
|
|
2016
|
|
|
|
|
|
|
GAAP gross profit (loss)
|
(15,286)
|
|
22,098
|
|
22,673
|
Impairment loss on intangible assets
|
35,210
|
|
-
|
|
230
|
Non-GAAP gross profit
|
19,924
|
|
22,098
|
|
22,903
|
|
|
|
|
|
|
GAAP net income
|
(30,424)
|
|
25,603
|
|
3,394
|
Share-based compensation
|
234
|
|
122
|
|
122
|
Gain on sale of available-for-sale securities
|
-
|
|
(19,781)
|
|
-
|
Amortization of intangibles
|
599
|
|
782
|
|
779
|
Impairment loss on intangible assets
|
35,210
|
|
-
|
|
230
|
Investment impairment loss
|
-
|
|
-
|
|
1,972
|
Recognition of prepaid license fees for games
|
-
|
|
-
|
|
1,716
|
Non-GAAP net income
|
5,619
|
|
6,726
|
|
8,213
|
|
|
|
|
|
|
Weighted average ADS used in diluted EPS calculation (million)
|
47.10
|
|
47.50
|
|
47.32
|
Non-GAAP diluted net income per ADS
|
0.12
|
|
0.14
|
|
0.17
|
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/kongzhong-corporation-reports-second-quarter-2016-unaudited-financial-results-300319166.html
SOURCE KongZhong Corporation