BEIJING, March 24, 2016 /PRNewswire/ -- KongZhong
Corporation (NASDAQ: KZ), a leading online games publisher and
developer in the PRC, today announced its unaudited financial
results for the fourth quarter of 2015 and full year 2015.
Fourth Quarter 2015 Financial
Highlights
- Total revenues for the fourth quarter of 2015 were US$ 42.48mn, exceeding the guidance range of
US$ 41mn to US$ 42mn.
- Total gross profit was US$
19.02mn, within the guidance range of US$ 19mn to US$ 20mn.
- Net income was US$ 6.10mn, with
diluted net income per American Depositary Shares ("ADS") of
US$ 0.13, exceeding the guidance
range of US$ 3mn to US$ 4mn.
- Non-GAAP net income was US$
6.99mn, with Non-GAAP diluted net income per ADS of
US$ 0.15(Non-GAAP Financial Measures
are described and reconciled to the corresponding GAAP measures in
the section titled "Non-GAAP Financial Measures"), exceeding the
guidance range of US$ 4mn to US$
5mn.
- As of December 31, 2015, the
Company had US$ 163.43mn in cash and
cash equivalents, term deposits, held-to-maturity securities,
available-for-sale securities and restricted cash or US$ 3.49 per ADS in cash and cash equivalents,
term deposits, held-to-maturity securities, available-for-sale
securities and restricted cash, net of a US$
49.96mn short-term bank loan. The mark to fair value of the
Company's investments in Ourgame and Forgame were priced at
HK$ 5.75 and HK$ 13.04 per ordinary share, respectively (or
US$ 44.47mn and US$ 20.29mn, respectively) as of December 31,2015, compared to the mark to fair
value of the Company's investments in Ourgame and Forgame which
were priced at HK$ 3.94 and
HK$ 14.20 per ordinary share,
respectively (or US$ 30.47mn and
US$ 22.09mn, respectively) as of
September 30, 2015.
Full Year 2015 Financial Highlights
- Total revenues were US$ 179.11mn
for the full year of 2015 compared to US$
227.60mn in 2014, of which, Internet games revenues were
US$ 105.04mn in 2015 compared to
US$ 118.10mn in 2014, Mobile games
revenues were US$ 24.65mn in 2015
compared to US$ 45.04mn in 2014 and
WVAS revenues were US$ 49.42mn in
2015 compared to US$ 64.46mn in
2014.
- Full year gross margin was 41.9% compared to 43.2% in
2014 if excluding the effect of impairment on intangible assets
related to the underperformance of Guild Wars 2,of which Internet
games gross margin was 50.1%, Mobile games gross margin was 40.0%
and WVAS gross margin was 25.1%.
- Net loss in 2015 was US$16.23mn
compared to US$ 22.59mn net income in
2014. Net loss in 2015 included a $35.21mn impairment loss on intangible
assets.
- Non-GAAP net income was US$22.31mn compared to 2014 full year Non-GAAP
net income of US$ 29.90mn.
(Non-GAAP Financial Measures are described and reconciled to
the corresponding GAAP measures in the section titled "Non-GAAP
Financial Measures").
Business Highlights
- Moving forward, the Company intends 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 released World of Warships on November 27, 2015.
- The Company released Heart of Thorns, the first expansion pack
for Guild Wars 2 to the mainland China market on November 20, 2015.
- The Company released mobile game, Rush Three Kingdoms, in
Japan to Open Beta Test on
March 10, 2016.
- The Company released mobile game, Battle of Warship, on
March 16, 2016 in China on the IOS platform.
|
Three Months
Ended
|
|
December
31,
|
|
September
30,
|
|
December
31,
|
|
2014
|
|
2015
|
|
2015
|
|
US$ in
thousands
|
|
US$ in
thousands
|
|
US$ in
thousands
|
|
|
|
|
|
|
Revenues
|
61,637
|
|
38,579
|
|
42,475
|
Internet Games
|
29,446
|
|
23,745
|
|
30,476
|
Mobile Games
|
15,178
|
|
2,679
|
|
1,983
|
WVAS
|
17,013
|
|
12,155
|
|
10,016
|
|
|
|
|
|
|
Cost of
Revenues
|
34,962
|
|
21,676
|
|
23,454
|
Internet Games
|
15,892
|
|
11,038
|
|
14,366
|
Mobile Games
|
7,148
|
|
1,607
|
|
1,556
|
WVAS
|
11,922
|
|
9,031
|
|
7,532
|
|
|
|
|
|
|
Gross
Profit
|
26,675
|
|
16,903
|
|
19,021
|
Internet Games
|
13,554
|
|
12,707
|
|
16,110
|
Mobile Games
|
8,030
|
|
1,072
|
|
427
|
WVAS
|
5,091
|
|
3,124
|
|
2,484
|
|
|
|
|
|
|
Gross
Margin
|
43%
|
|
44%
|
|
45%
|
Internet Games
|
46%
|
|
54%
|
|
53%
|
Mobile Games
|
53%
|
|
40%
|
|
22%
|
WVAS
|
30%
|
|
26%
|
|
25%
|
Revenues
Total revenues for the fourth quarter of 2015 were US$ 42.48mn, a 10.1% increase from the third
quarter of 2015 and a 31.1% decline from the same period last
year.
Internet Games Revenues
Internet Game ("Net Game") revenues were US$ 30.48mn in the fourth quarter of 2015, an
increase of 28.3% from the third quarter of 2015 due to the release
of World of Warships on November 27,
2015.
For the fourth quarter of 2015, mainland China online game operations achieved average
monthly active users ("MAUs") of 2.7mn and aggregated monthly
paying accounts ("APAs") of 448k with monthly average revenue per
user ("ARPU") of RMB 144.
|
Three Months
Ended
|
December
31,
2014
|
September
30,
2015
|
December
31,
2015
|
MAU
|
1,840k
|
1, 813k
|
2,690k
|
APA
|
327k
|
307k
|
448k
|
ARPU
|
185
|
160
|
144
|
Internet game revenues made up 71.8% of total revenues in the
fourth quarter of 2015.
Mobile Games Revenues
Total mobile game revenues were US$
1.98mn, a 26.0% decrease from the third quarter of 2015 and
an 86.9% decrease from the same period last year. The continued
reduction in mobile game revenues was due to the shorter life cycle
and high churn of recently launched smartphone games and the
Company's pivot to concentrate mobile game development and
licensing towards primarily military genre mobile games to bolster
the War Saga brand. We expect this transition to influence mobile
game revenues for the foreseeable future.
Total mobile game revenues made up 4.7% of total revenues in the
fourth quarter of 2015.
WVAS Revenues
WVAS revenues were US$ 10.02mn, a
17.6% decrease from the third quarter of 2015 and a 41.1% decrease
from the same period of last year. WVAS revenues continue to be
impacted by the shift of traditional WVAS service towards
smartphone applications and mobile operator policies.
WVAS made up 23.5% of total revenues in the fourth quarter of
2015.
Gross Profit
Total gross profit for the fourth quarter of 2015 was
US$19.02mn, a 12.5% increase from
gross profit in the third quarter of 2015 and a 28.7% decrease from
the same period last year.
Total gross margin was 44.8% in the fourth quarter of 2015
compared to gross margins of 43.8% in the third quarter of
2015.
Internet Game Gross Profit
Internet game gross profit was US$
16.11mn, a 26.8% increase from gross profits in the third
quarter of 2015 and an 18.9% increase from the same period last
year. Internet game gross margin was 52.9% compared to 53.5% in the
third quarter of 2015.
Mobile Game Gross Profit
Mobile games gross profit was US$
0.43mn, a 60.2% decrease from the third quarter of 2015 and
a 94.7% decrease from the same period last year. Mobile games gross
margin was 21.5% compared to 40.0% in the third quarter of
2015.
WVAS Gross Profit
WVAS gross profit was US$2.48mn, a
20.5% decrease from the third quarter of 2015 and a 51.2% decrease
from the same period last year. WVAS gross margin was 24.8%
compared to 25.7% in the third quarter of 2015.
Operating Expenses
Total operating expenses in the fourth quarter of 2015 were
US$16.80mn compared to US$13.17mn in the third quarter of 2015.
Product development expenses in the fourth quarter of 2015 were
US$ 6.18mn compared to US$ 5.77mn in the third quarter of 2015.The
product development expenses increased primarily due to the
Company's pivot to concentrate mobile game development and
licensing towards primarily military genre mobile games to bolster
the War Saga brand.
Sales and marketing expenses in the fourth quarter of 2015 were
US$ 6.35mn compared to US$5.20mn in the third quarter of 2015.Sales and
marketing expenses increased primarily due to the increased
promotion activities of World of Warships in 2015Q4.
General and administrative expenses in the fourth quarter of
2015 were US$4.27mn compared to
US$2.20mn in the third quarter of
2015. General and administrative expenses increased primarily due
to the increased consulting and travel related expenses relating to
our corporate investment activities, and additions to bad debt
provision relating to our WVAS business.
The Company's total headcount in the fourth quarter of 2015 was
793 staff compared to 913 staff at the end of the third quarter of
2015 as the Company has begun to optimize our cost structure for
the lower amount of business in mobile games and WVAS.
Earnings
US GAAP net income and diluted income per ADS were US$ 6.10mn and US$
0.13, respectively. Non-GAAP net income and diluted income
per ADS were US$ 6.99mn and
US$ 0.15, respectively.
Total ADS on a diluted basis outstanding during the fourth
quarter of 2015 were 47.30mn, compared to 47.21mn outstanding
during the third quarter of 2015.
For the purpose of
earnings
per share calculation
|
Number during
three
months ended
September 30,
2015
|
Number during
three
months ended
December 31,
2015
|
ADS (in
mns)
|
46.78
|
46.87
|
Add: Dilution impact
from
options and nonvested shares
|
0.30
|
0.27
|
Warrants issued to
business
partners
|
0.13
|
0.16
|
ADS on diluted
basis
|
47.21
|
47.30
|
Balance Sheet
As of December 31, 2015, the
Company had US$ 163.43mn in cash and
cash equivalents, term deposits, held-to-maturity securities,
available-for-sale securities and restricted cash or US$ 3.49 per ADS in cash and cash equivalents,
term deposits, held-to-maturity securities, available-for-sale
securities and restricted cash, net of a US$
49.96mn short-term bank loan. The mark to fair value of the
Company's investments in Ourgame and Forgame were priced at
HK$ 5.75 and HK$ 13.04 per ordinary share, respectively (or
US$ 44.47mn and US$ 20.29mn, respectively) as of December 31,2015, compared to the mark to fair
value of the Company's investments in Ourgame and Forgame which
were priced at HK$ 3.94 and
HK$ 14.20 per ordinary share,
respectively (or US$ 30.47mn and
US$ 22.09mn, respectively) as of
September 30, 2015.
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.
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 Thursday, March 24, 2016 (7:30 AM Beijing/Hong
Kong time, Friday, March 25,
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: 69631432
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
at http://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
April 1, 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. On
May 15, 2014, KongZhong officially
launched the most-anticipated 3D fantasy MMORPG Guild Wars 2 in
China. KongZhong has the exclusive
publishing rights for World of Tanks, World of Warplanes and World
of Warships, Guild Wars 2, Auto Club Revolution, 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
|
|
|
|
December
31,
|
|
September
30,
|
|
December
31,
|
|
|
|
2014
|
|
2015
|
|
2015
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
61,637
|
|
38,579
|
|
42,475
|
|
Cost of
revenues
|
|
34,962
|
|
21,676
|
|
23,454
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
26,675
|
|
16,903
|
|
19,021
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
Product development
|
|
6,083
|
|
5,772
|
|
6,176
|
|
Sales and marketing
|
|
9,076
|
|
5,198
|
|
6,353
|
|
General and administrative
|
|
4,236
|
|
2,202
|
|
4,267
|
|
Total operating
expenses
|
|
19,395
|
|
13,172
|
|
16,796
|
|
|
|
|
|
|
|
|
|
Government
subsidy
|
|
480
|
|
265
|
|
769
|
|
|
|
|
|
|
|
|
|
Income from
operations
|
|
7,760
|
|
3,996
|
|
2,994
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
1,891
|
|
1,158
|
|
3,879
|
|
Interest
expense
|
|
(176)
|
|
(281)
|
|
(88)
|
|
Imputed interest on
long-term liabilities
|
|
(150)
|
|
-
|
|
-
|
|
Exchange gain
(loss)
|
|
385
|
|
(557)
|
|
(141)
|
|
Income before
income tax expense, loss on equity
method investments
|
|
9,710
|
|
4,316
|
|
6,644
|
|
Income tax
expense
|
|
(641)
|
|
(142)
|
|
(321)
|
|
Loss on equity method
investments
|
|
-
|
|
(273)
|
|
(223)
|
|
Net
income
|
|
9,069
|
|
3,901
|
|
6,100
|
|
|
|
|
|
|
|
|
|
Earnings per ADS,
basic
|
|
0.20
|
|
0.08
|
|
0.13
|
|
Earnings per ADS,
diluted
|
|
0.19
|
|
0.08
|
|
0.13
|
|
Weighted average ADS
outstanding (million)
|
|
46.34
|
|
46.78
|
|
46.87
|
|
Weighted average ADS
used in diluted EPS
calculation (million)
|
|
46.59
|
|
47.21
|
|
47.30
|
|
Net income
|
|
9,069
|
|
3,901
|
|
6,100
|
|
Other comprehensive
income
|
|
(7,873)
|
|
(40,333)
|
|
4,759
|
|
Total comprehensive
income
|
|
1,196
|
|
(36,432)
|
|
10,859
|
|
|
|
|
|
|
|
|
|
KongZhong
Corporation
|
Condensed
Consolidated Statements of Comprehensive Income
|
(Unaudited, US$ in
thousands, except per share and share data)
|
|
|
|
|
|
Twelve Months
Ended
|
|
|
December
31,
|
|
|
December
31,
|
|
|
2014
|
|
|
2015
|
|
|
|
|
|
|
Revenues
|
|
227,596
|
|
|
179,113
|
Cost of
revenues(including impairment on
|
|
|
|
|
|
intangible assets of $nil
and $35,210 for 2014
|
|
|
|
|
|
and 2015,
respectively)
|
|
129,279
|
|
|
139,363
|
|
|
|
|
|
|
Gross
profit
|
|
98,317
|
|
|
39,750
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
Product development
|
|
25,107
|
|
|
24,190
|
Sales and marketing
|
|
42,523
|
|
|
25,890
|
General and administrative
|
|
12,565
|
|
|
13,484
|
Impairment loss on intangible assets
|
|
1,323
|
|
|
-
|
Total operating
expenses
|
|
81,518
|
|
|
63,564
|
|
|
|
|
|
|
Government
subsidy
|
|
1,139
|
|
|
1,574
|
|
|
|
|
|
|
Income from
operations
|
|
17,938
|
|
|
(22,240)
|
|
|
|
|
|
|
Interest
income
|
|
8,865
|
|
|
7,975
|
Interest
expense
|
|
(295)
|
|
|
(744)
|
Impairment loss on
cost method investment
|
|
(2,000)
|
|
|
-
|
Imputed interest on
long-term liabilities
|
|
(600)
|
|
|
(140)
|
Exchange
loss
|
|
(272)
|
|
|
(803)
|
Investment
income
from
available-for-sale securities
|
|
-
|
|
|
1,164
|
Net income (loss)
before income tax
expense and loss in
equity method investments
|
|
23,636
|
|
|
(14,788)
|
Income tax
expense
|
|
(1,048)
|
|
|
(797)
|
Loss in equity method
investments
|
|
-
|
|
|
(642)
|
Net
income(loss)
|
|
22,588
|
|
|
(16,227)
|
|
|
|
|
|
|
Earnings(loss) per
ADS, basic
|
|
0.49
|
|
|
(0.35)
|
Earnings(loss) per
ADS, diluted
|
|
0.48
|
|
|
(0.35)
|
Weighted average ADS
outstanding (million)
|
|
45.70
|
|
|
46.73
|
Weighted average ADS
used in diluted EPS
calculation (million)
|
|
46.89
|
|
|
46.73
|
Net income
|
|
22,588
|
|
|
(16,227)
|
Other comprehensive
income
|
|
1,968
|
|
|
4,072
|
Total comprehensive
income
|
|
24,556
|
|
|
(12,155)
|
|
|
|
|
|
|
|
KongZhong
Corporation
|
Condensed
Consolidated Balance Sheets
|
(Unaudited, US$ in
thousands)
|
|
|
|
|
|
|
|
|
|
As
of
|
|
As
of
|
|
As
of
|
|
December
31,
|
September
30,
|
December
31,
|
|
2014
|
|
2015
|
2015
|
Assets
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
105,093
|
|
33,139
|
|
38,304
|
Term deposits
|
|
16,907
|
|
26,047
|
|
25,121
|
Available-for-sale securities
|
|
20,014
|
|
52,563
|
|
64,756
|
Held-to-maturity securities
|
|
24,359
|
|
17,083
|
|
26,747
|
Accounts receivable (net)
|
|
30,244
|
|
24,235
|
|
24,485
|
Restricted cash
|
|
53,376
|
|
18,230
|
|
58,467
|
Other current assets
|
|
19,070
|
|
71,209
|
|
72,717
|
Total current
assets
|
|
269,063
|
|
242,506
|
|
310,597
|
|
|
|
|
|
|
|
Non-current
assets
|
|
|
|
|
|
|
Rental deposits
|
|
1,445
|
|
1,385
|
|
1,397
|
Intangible assets (net)
|
55,510
|
|
13,392
|
|
12,516
|
Property and equipment (net)
|
|
5,659
|
|
5,078
|
|
4,654
|
Long-term investments
|
|
-
|
|
3,844
|
|
4,773
|
Goodwill
|
|
90,019
|
|
86,553
|
|
84,770
|
Restricted cash
|
|
10,885
|
|
40,872
|
|
-
|
Total non-current
assets
|
|
163,518
|
|
151,124
|
|
108,110
|
Total
assets
|
|
432,581
|
|
393,630
|
|
418,707
|
|
|
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
|
|
Current
Liabilities
|
|
|
|
|
|
|
Accounts
payable
|
|
31,600
|
|
23,590
|
|
28,075
|
(including accounts
payable of the
consolidated variable interest entities
("VIE") without recourse to KongZhong
Corporation of $31,546,$23,579 and
$28,063 as of
December 31, 2014,
September 30, 2015 and December 31,
2015, respectively)
|
Short-term bank
loan
|
|
42,429
|
|
7,534
|
|
49,963
|
(including short-term
bank loan of the
consolidated VIE without recourse to
KongZhong Corporation of $nil, $nil and
$nil as of December 31, 2014, September
30, 2015 and December 31, 2015,
respectively)
|
Deferred
revenue
|
|
4,652
|
|
2,860
|
|
7,917
|
(including deferred
revenue of the
consolidated VIE without recourse to
KongZhong Corporation of $4,622, $2,831
and $7,888 as of December 31, 2014,
September 30, 2015 and December 31,
2015, respectively)
|
Other current
liabilities
|
|
22,110
|
|
16,673
|
|
20,991
|
(including other
current liabilities of the
consolidated VIE without recourse to
KongZhong Corporation of $14,693,$8,636
and $15,142 as of December 31, 2014,
September 30, 2015 and December 31,
2015, respectively)
|
Total current
liabilities
|
|
100,791
|
|
50,657
|
|
106,946
|
|
|
|
|
|
|
|
Non-current
Liabilities
|
|
|
|
|
|
|
Other long-term
liabilities
|
|
9,860
|
|
-
|
|
-
|
(including other
long-term liabilities of the
consolidated VIE without recourse to
KongZhong Corporation of $9,860, $nil
and $nil as of December 31, 2014,
September 30, 2015 and December 31,
2015, respectively)
|
|
|
-
|
|
42,429
|
|
-
|
Long-term bank
loan
|
(including long-term
bank loan of the
consolidated VIE without recourse to
KongZhong Corporation of $nil, $nil and
$nil as of December 31, 2014, September
30, 2015 and December 31, 2015,
respectively)
|
Total non-current
liabilities
|
|
9,860
|
|
42,429
|
|
-
|
|
|
321,930
|
|
300,544
|
|
311,761
|
Shareholders'
equity
|
Total liabilities
and shareholders' equity
|
|
432,581
|
|
393,630
|
|
418,707
|
|
|
|
|
|
|
|
|
|
|
KongZhong
Corporation
|
Condensed
Consolidated Statements of Cash Flows
|
(Unaudited, US$ in
thousands)
|
|
Twelve Months
Ended
|
|
December
31,
|
|
December
31,
|
|
2014
|
|
2015
|
Cash Flows From
Operating Activities
|
|
|
|
Net
income (loss)
|
22,588
|
|
(16,227)
|
Adjustments to reconcile net income to net cash
|
|
|
|
provided
by operating activities
|
Depreciation and amortization
|
21,523
|
|
10,143
|
Loss(gain) on disposal of property and equipment
|
(7)
|
|
138
|
Investment income from available-for-sale securities
|
-
|
|
(1,164)
|
Dividend
received
|
-
|
|
628
|
Provision for bad debt
|
317
|
|
685
|
Imputed
interest on long-term liabilities
|
600
|
|
140
|
Impairment loss on cost method investment
|
2,000
|
|
-
|
Loss on
equity method investments
|
-
|
|
642
|
Share-based compensation
|
1,548
|
|
1,045
|
Impairment loss on intangible assets
|
1,323
|
|
35,210
|
Changes
in operating assets and liabilities
|
(18,823)
|
|
552
|
Net Cash Provided by
Operating Activities
|
31,069
|
|
31,792
|
|
|
|
|
Cash Flows From
Investing Activities
|
|
|
|
Purchase
of intangible assets
|
(98)
|
|
-
|
Purchase
of term deposits
|
(18,521)
|
|
(9,989)
|
Proceeds
from disposal of term deposits
|
6,078
|
|
1,736
|
Investments
|
(16,380)
|
|
(8,277)
|
Purchase
of held-to-maturity securities
|
(191,038)
|
|
(61,703)
|
Purchase
of available-for-sale securities
|
-
|
|
(24,695)
|
Proceeds
from disposal of available-for-sale securities
|
-
|
|
1,501
|
Proceeds
from disposal of held-to-maturity securities
|
218,358
|
|
58,174
|
Proceeds
from disposal of property and equipment
|
7
|
|
34
|
Purchase
of property and equipment
|
(3,122)
|
|
(2,273)
|
Addition
of restricted cash
|
(42,402)
|
|
(9,241)
|
Release
of restricted cash
|
15,000
|
|
9,989
|
Loans to
equity method investee
|
-
|
|
(34,352)
|
Loans to
third parties
|
-
|
|
(26,443)
|
Loan
repayment from third parties
|
-
|
|
11,595
|
Net Cash Used in
Investing Activities
|
(32,118)
|
|
(93,944)
|
|
|
|
|
Cash Flows From
Financing Activities
|
Proceeds
from exercise of employee stock options
|
437
|
|
940
|
Deferred
payments for acquisition of business
|
(2,881)
|
|
-
|
Deferred
payments for intangible assets
|
(21,828)
|
|
(10,396)
|
Repurchase of ordinary shares
|
(12)
|
|
-
|
Proceeds
from bank borrowing
|
42,429
|
|
7,534
|
Dividends paid to shareholders
|
(40,999)
|
|
-
|
Proceeds
from exercise of warrants
|
5,940
|
|
-
|
Net Cash Used in
Financing Activities
|
(16,914)
|
|
(1,922)
|
|
|
|
|
Effect of foreign
exchange rate changes
|
(372)
|
|
(2,715)
|
|
|
|
|
Net decrease in Cash
and Cash Equivalents
|
(18,335)
|
|
(66,789)
|
Cash and Cash
Equivalents, Beginning of Period
|
123,428
|
|
105,093
|
Cash and Cash
Equivalents, End of Period
|
105,093
|
|
38,304
|
|
|
|
|
|
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 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,
imputed interest on long-term liabilities, impairment loss on
intangible assets, as well as impairment loss on cost method
investment and 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
|
December
31,
|
|
September
30,
|
|
December
31,
|
|
2014
|
|
2015
|
|
2015
|
|
|
|
|
|
|
GAAP net
income
|
9,069
|
|
3,901
|
|
6,100
|
Share-based
compensation
|
230
|
|
234
|
|
344
|
Imputed interest on
long-term liabilities
|
150
|
|
-
|
|
-
|
Amortization of
intangibles
|
600
|
|
403
|
|
541
|
Non-GAAP net
income
|
10,049
|
|
4,538
|
|
6,985
|
|
|
|
|
|
|
Weighted average ADS
used in diluted EPS
calculation (million)
|
46.59
|
|
47.21
|
|
47.30
|
|
|
|
|
|
|
Non-GAAP diluted net
income per ADS
|
0.22
|
|
0.10
|
|
0.15
|
|
Twelve Months
Ended
|
December
31,
|
|
December
31,
|
|
2014
|
|
2015
|
GAAP net
income(loss)
|
22,588
|
|
(16,227)
|
Share-based
compensation
|
1,548
|
|
1,045
|
Impairment loss on
cost method investment
|
2,000
|
|
-
|
Impairment loss on
intangible assets
|
1,323
|
|
35,210
|
Imputed interest on
long-term liabilities
|
600
|
|
140
|
Amortization of
intangibles
|
1,841
|
|
2,143
|
Non-GAAP net
income
|
29,900
|
|
22,311
|
|
|
|
|
Weighted average ADS
used in diluted EPS
calculation (million) (Note)
|
46.89
|
|
47.11
|
Non-GAAP diluted net
income per ADS
|
0.64
|
|
0.47
|
|
|
|
|
Note: There is no
diluted effect for the US GAAP loss per ADS. There is a diluted
effect on Non-GAAP earnings per share as it was net income on
Non-GAAP measures.
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/kongzhong-corporation-reports-fourth-quarter-2015-unaudited-financial-results-300241002.html
SOURCE KongZhong Corporation