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