Jamdat Mobile (NASDAQ:JMDT)
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JAMDAT Mobile Inc. (NASDAQ:JMDT)
-- First quarter 2005 revenue of $15.1 million, a 31% sequential
increase and a 115% increase over the first quarter a year
ago.
-- First quarter 2005 GAAP net income of $2.7 million, or $0.13
per diluted share, compared to GAAP net income of $0.7 million
in the first quarter a year ago.
-- First quarter 2005 adjusted net income of $3.6 million, or
$0.17 per diluted share, compared to adjusted net income of
$1.5 million in the first quarter a year ago.
JAMDAT Mobile Inc. (NASDAQ:JMDT), a global wireless entertainment
publisher, today reported financial results for the three months ended
March 31, 2005.
First quarter 2005 revenues were $15.1 million, a 31% sequential
increase over the $11.6 million reported in the fourth quarter of
2004, and a 115% increase over the $7.0 million reported in the first
quarter of 2004. GAAP net income for the first quarter of 2005 was
$2.7 million, or $0.13 per diluted share, compared to approximately
$0.7 million in the prior year period. Adjusted net income, which
excludes amortization of stock compensation and other intangibles, was
$3.6 million for the first quarter of 2005, or $0.17 per diluted
share, compared to $1.5 million in the prior year period.
"We are very pleased with our strong first quarter results, which
continued to exceed our expectations. Our success is being driven by
our strong execution and continued focus on mobile gaming," said Chief
Executive Officer, Mitch Lasky. "Our recent acquisitions of Blue Lava
Wireless and Downtown Wireless further position us as the global
leader, by revenue and profitability, in the rapidly growing wireless
entertainment industry."
Cash, cash equivalents and short-term investments at March 31,
2005, totaled $56.4 million. Subsequently, JAMDAT utilized $55 million
in cash in the acquisition of Blue Lava Wireless LLC. Following the
transaction, JAMDAT has approximately $16 million in cash and cash
equivalents and accounts receivable of approximately $20 million.
JAMDAT also has access to up to $10 million of additional borrowings
under a $25 million credit facility which has been put into place. In
addition, JAMDAT generated approximately $2.3 million in cash from
operations during the first quarter, compared to approximately $0.8
million in cash used in operations during the prior year period.
JAMDAT believes that its cash balances, available cash under its
credit facility and cash generated from its operations are sufficient
for its strategic and operational needs.
First Quarter Highlights and Recent Developments
-- In April 2005, JAMDAT acquired Blue Lava and a 15 year,
exclusive license to the wireless rights for Tetris. JAMDAT
immediately received the rights to publish Tetris in North
America, Latin America and India. Additionally, JAMDAT will
acquire the Tetris wireless rights for Europe, China, Japan,
Korea, Australia and New Zealand, as the current licensees'
rights expire throughout 2005.
-- JAMDAT announced an exclusive multiyear license agreement with
Major League Baseball Advanced Media, the interactive media
and Internet arm of Major League Baseball. The agreement gives
JAMDAT the exclusive rights to publish MLB-branded wireless
simulation games. Additionally, JAMDAT signed 2004 American
League MVP, Vladimir Guerrero of the Anaheim Angels, to be the
cover athlete for its JAMDAT SPORTS MLB 2005 game.
-- JAMDAT launched 3D versions of its popular JAMDAT Bowling
title and Tony Hawk's Pro Skater on Verizon's V CAST in April.
-- JAMDAT announced an agreement to distribute its wireless
content through Radio Shack Corporation (NYSE:RSH) stores
using JAMDAT's proprietary wireless content retail
distribution platform, JAMDAT Games-to-Go(TM).
-- In January 2005, JAMDAT acquired Downtown Wireless, the
developer of the top selling "Downtown Texas Hold 'Em" and
other casino titles.
Second Quarter, Revised 2005 and Preliminary 2006 Outlook
JAMDAT today also provided guidance for the three months ending
June 30, 2005, and updated its previous guidance for the full year
ending December 31, 2005. Additionally, because 2006 will be the first
full year in which JAMDAT has access to the worldwide Tetris rights it
acquired from Blue Lava, JAMDAT also provided a preliminary view of
2006.
Second Quarter 2005 Outlook
For the three months ending June 30, 2005, JAMDAT expects revenue
of approximately $19 million, GAAP net income of approximately $0.12
per diluted share (subject to finalization of the purchase price
allocation for Blue Lava) and adjusted net income of approximately
$0.18 per diluted share. Net income per share calculations for the
three months ending June 30, 2005 are based on an estimated 24.9
million average shares outstanding, including the shares issued in
conjunction with the Blue Lava transaction.
JAMDAT's guidance for the three months ending June 30, 2005
incorporates its preliminary estimates of the cost of integrating and
accounting for the Blue Lava acquisition. JAMDAT expects that its
integration of Blue Lava will be largely complete by the end of Q2
2005.
The reconciling items between GAAP net income and adjusted net
income on a tax affected basis for the period are amortization of
intangible assets and acquired in-process research and development of
approximately $1.2 million and employee stock based compensation of
approximately $0.3 million.
Full Year 2005 Outlook
For the full year ending December 31, 2005, JAMDAT expects revenue
of approximately $80 million, GAAP net income of approximately $0.55
per diluted share (subject to finalization of the purchase price
allocation for Blue Lava) and adjusted net income of approximately
$0.76 per diluted share. JAMDAT expects that its Q4 2005 earnings will
be burdened by income taxes. Net income per share calculations for the
full year 2005 are based on an estimated 25.6 million average shares
outstanding, including the shares issued in conjunction with the Blue
Lava transaction.
The reconciling items between GAAP net income and adjusted net
income on a tax affected basis for the period are amortization of
intangible assets and acquired in-process research and development of
approximately $4.5 million and employee stock based compensation of
approximately $1.0 million.
Full Year 2006 Outlook
For the full year ending December 31, 2006, JAMDAT expects revenue
of approximately $120 million, GAAP net income of approximately $0.75
per diluted share (subject to finalization of the purchase price
allocation for Blue Lava) and adjusted net income of approximately
$1.05 per diluted share. JAMDAT expects that its 2006 earnings will be
fully burdened by income taxes. Net income per share calculations for
the full year 2006 are based on an estimated 26.5 million average
shares outstanding. Full year 2006 GAAP net income does not take into
account the impact of Statement of Accounting Standards ("SFAS") 123R
related to the expensing of stock awards which JAMDAT anticipates
adopting in the first quarter of 2006.
The reconciling items between GAAP net income and adjusted net
income on a tax affected basis for the period are amortization of
intangible assets and acquired in-process research and development of
approximately $7.0 million and employee stock based compensation of
approximately $1.0 million.
Investor Conference Call
JAMDAT's quarterly earnings conference call is scheduled to begin
later today (Thursday, May 5, 2005) at 1:45 p.m., Pacific Daylight
Time (USA). The conference call will be broadcast live over the
Internet. Investors may listen to the live webcast at www.jamdat.com.
For those who are not available for the live broadcast, the call will
be archived on JAMDAT's investor website.
Non-GAAP Measures
To supplement JAMDAT's consolidated financial statements presented
in accordance with generally accepted accounting principles, or GAAP,
JAMDAT uses non-GAAP measures of certain components of financial
performance, including net income, gross profit and earnings per
share, which are adjusted from results based on GAAP to exclude
certain expenses. These non-GAAP results provide useful information to
both management and investors by excluding certain expenses that may
not be indicative of core operating results. These measures should be
considered in addition to results prepared in accordance with
generally accepted accounting principles, but should not be considered
a substitute for, or superior to, GAAP results. The non-GAAP measures
included in this press release have been reconciled to the nearest
GAAP measure.
These non-GAAP measures exclude the following items from the
Company's statement of operations:
-- Amortization of intangibles
-- Acquired in-process research and development
-- Employee stock-based compensation
About JAMDAT Mobile Inc.
JAMDAT Mobile Inc. is a global publisher of wireless entertainment
applications, including games, ring tones, images and other content.
JAMDAT's application portfolio is based on original and licensed
intellectual properties and includes JAMDAT Bowling, Tetris(R),
Downtown Texas Hold 'Em, Lemonade Tycoon(R), Bejeweled, The Lord of
the Rings(R), Tony Hawk's(R) Underground and Scrabble(R). JAMDAT
distributes its applications through wireless carriers, including
Boost Mobile, Cingular Wireless, 02 (UK), Nextel, NTT DoCoMo, Orange,
Sprint, Telefonica Moviles, T-Mobile, Verizon Wireless, Virgin Mobile,
Vivo and Vodafone. For more information, please visit www.jamdat.com.
Safe Harbor Statement
This press release may include forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995,
including statements related to anticipated revenues, expenses,
earnings, operating cash flows, the outlook for JAMDAT's markets and
the demand for its products. Factors that could cause JAMDAT's actual
results to differ materially from these forward-looking statements
include its ability to integrate the acquisition of Blue Lava
Wireless, anticipated growth in the handset market, its ability to
market and sell products in diverse market segments, its reliance on a
limited number of products and third-party vendors and distributors,
its ability to expand studio operations, increases in fulfillment
costs, disruptions to information technology systems, unpredictable
events and circumstances relating to international suppliers,
increased competition, government regulatory action and general
economic conditions. Please refer to JAMDAT's reports and filings with
the Securities and Exchange Commission for a further discussion of
these risks and uncertainties. Readers are cautioned not to place
undue reliance on forward-looking statements, which speak only as of
the date they are made. JAMDAT undertakes no obligation to update
publicly any forward-looking statements to reflect new information,
events or circumstances after the date they were made or to reflect
the occurrence of unanticipated events.
(C) 2005 JAMDAT Mobile Inc. JAMDAT, JAMDAT Mobile and the bubbles
logo are trademarks of JAMDAT Mobile Inc. All other trademarks are the
property of their respective owners and are used with permission.
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JAMDAT Mobile Inc.
Condensed Consolidated Balance Sheets
(in thousands)
As of As of
December 31, March 31,
2004 2005
------------ -----------
Assets (Unaudited)
Current assets:
Cash and cash equivalents $31,395 $37,903
Restricted cash 11 11
Short-term investments 33,523 18,500
Accounts receivable, net of allowance for
doubtful accounts of $75 and
$193 (unaudited), respectively 12,927 15,516
Prepaid expenses and other current assets 1,849 2,293
Prepaid royalties 2,114 3,070
------------ -----------
Total current assets 81,819 77,293
Property and equipment, net 1,998 2,019
Goodwill 4,081 4,856
Intangible assets, net 226 4,181
Other non-current assets 2,490 7,202
------------ -----------
Total assets $90,614 $95,551
------------ -----------
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $1,185 $1,589
Accrued expenses and other liabilities 2,929 3,753
Deferred revenue 97 28
Current portion of notes payable 64 41
------------ -----------
Total current liabilities 4,275 5,411
Other non-current liabilities - 56
Notes payable, net of current portion 2 -
------------ -----------
Total liabilities 4,277 5,467
------------ -----------
Commitments and contingencies
Total stockholders' equity 86,337 90,084
------------ -----------
Total liabilities and stockholders'
equity $90,614 $95,551
------------ -----------
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JAMDAT Mobile Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
Three Months Ended
March 31,
----------------------
2004 2005
---------- -----------
(Unaudited)
Revenues $7,033 $15,132
Cost of Revenues 965 3,456
---------- -----------
Gross profit 6,068 11,676
---------- -----------
Operating Expenses:
Research and development 2,355 4,162
Selling and marketing 896 1,686
General and administrative 1,315 2,667
Acquired in-process research and development - 250
Stock-based compensation 711 357
---------- -----------
Total operating expenses 5,277 9,122
---------- -----------
Income from operations 791 2,554
Interest and other income (expense), net (53) 253
---------- -----------
Income before income tax provision 738 2,807
---------- -----------
Income tax provision - 78
---------- -----------
Net income $738 $2,729
========== ===========
Net income per common share:
Basic $0.23 $0.14
========== ===========
Diluted $0.17 $0.13
========== ===========
Weighted average shares used in computing
net income per common share:
Basic 3,242,476 19,973,734
========== ===========
Diluted 4,458,550 21,114,443
========== ===========
Non-GAAP Results (in thousands, except per share data)
The following table shows the Company's non-GAAP results reconciled to
the Generally Accepted Accounting Principles ("GAAP")
Condensed Consolidated Statements of Operations. The Company's non-
GAAP results do not include amortization of intangibles and
employee stock-based compensation and charges for acquired in-process
research and development.
Three Months Ended March
31,
-------------------------
2004 2005
------------ ------------
Net income $738 $2,729
Amortization of intangibles 68 290
Acquired in-process research and development - 250
Stock based compensation 711 357
------------ ------------
Adjusted net income $1,517 $3,626
============ ============
Adjusted net income per diluted share $0.34 $0.17
Weighted average shares used in computing
adjusted net income per common share: 4,458,550 21,114,443
Gross profit $6,068 $11,676
Amortization of intangibles 68 290
------------ ------------
Adjusted gross profit $6,136 $11,966
============ ============
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JAMDAT Mobile Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
Three Months Ended
March 31,
-------------------
2004 2005
-------------------
(Unaudited)
Cash flows from operating activities:
Net income $738 $2,729
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 190 527
Acquired in-process research and development - 250
Stock-based compensation and warrant
amortization 711 357
Non cash interest income, net 1 -
Provision for bad debts, net - 118
Changes in operating assets and liabilities,
net of effect of acquisition:
Accounts receivable (1,407) (1,535)
Prepaid expenses and other assets (307) (444)
Prepaid royalties 118 (688)
Accounts payable and accrued expenses (595) 1,046
Deferred revenue (245) (77)
Other non-current liabilities - 56
-------------------
Net cash provided by (used in) operating
activities (796) 2,339
-------------------
Cash flows from investing activities:
Purchases of property and equipment (405) (238)
Purchases of short-term investments - (18,102)
Sales of short-term investments - 33,125
Business acquisitions and investments - (10,710)
-------------------
Net cash provided by (used in) investing
activities (405) 4,075
-------------------
Cash flows from financing activities:
Net bank facilities repayments (128) (25)
Proceeds from issuance of restricted common stock 26 32
-------------------
Net cash provided by (used in) financing
activities (102) 7
-------------------
Effect of exchange rate changes on cash 18 87
Net increase (decrease) in cash and cash
equivalents (1,285) 6,508
Cash and cash equivalents, beginning of period 11,133 31,395
-------------------
Cash and cash equivalents, end of period $9,848 $37,903
-------------------
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