Jamdat Mobile (NASDAQ:JMDT)
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JAMDAT Mobile Inc. (NASDAQ:JMDT):
-- Third quarter 2005 revenue of $20.2 million, a 113% increase
over the third quarter 2004
-- Third quarter 2005 GAAP net income of $1.4 million, or $0.06
per diluted share, compared to GAAP net income of $8,000 in
the third quarter 2004.
-- Third quarter 2005 adjusted net income of $3.7 million, or
$0.15 per diluted share, compared to adjusted net income of
$1.1 million in the third quarter a year ago.
Global wireless entertainment publisher JAMDAT Mobile Inc.
(NASDAQ:JMDT) today reported financial results for the three months
ended September 30, 2005.
Third quarter 2005 revenues were $20.2 million, a 113% increase
over the $9.5 million reported in the third quarter of 2004. GAAP net
income for the third quarter of 2005 was $1.4 million, or $0.06 per
diluted share, compared to approximately $8,000 in the prior year
period. Adjusted net income, which excludes amortization of
stock-based compensation and other intangibles, was $3.7 million for
the third quarter of 2005, or $0.15 per diluted share, compared to
$1.1 million in the prior year period. The per share calculations
include imputed interest expense of approximately $196,000 related to
a promissory note payable by the Company in cash or stock which was
added back to both GAAP and adjusted net income for the purpose of the
calculations.
"We are pleased with our third quarter results, as we continued to
experience very strong year-over-year growth. As we enter the
important holiday selling season, we look forward to expanding the
distribution of our most popular brands and bringing many new and
exciting titles to wireless gamers around the world for the first
time," said Chief Executive Officer, Mitch Lasky. "Initial customer
response to our newest releases, `DOOM RPG' and `SOCOM: US Navy SEALS
Mobile Recon' has been extremely positive. With our current and
upcoming product offerings, we are very optimistic about the business
as we move into 2006."
For the nine months ended September 30, 2005, revenues increased
119% to $54.6 million from $25.0 million for the same period in 2004.
For the nine months ended September 30, 2005, GAAP net income was $6.7
million, or $0.29 per diluted share, compared to $1.2 million for the
same period in 2004. Adjusted net income, which excludes amortization
of stock-based compensation and other intangibles, for the period was
$14.6 million or $0.62 per diluted share, compared to an adjusted net
income of $3.9 million in the prior year period. The GAAP and adjusted
per share calculations include imputed interest expense of
approximately $351,000 related the promissory note referenced above
which was added back to both GAAP and adjusted net income for the
purpose of the calculations.
Cash, cash equivalents and short-term investments at September 30,
2005, totaled $25.0 million, accounts receivable totaled $20.8 million
and bank debt totaled $14.5 million. During the nine months ended
September 30, 2005, JAMDAT generated approximately $15.3 million in
cash from operations, compared to approximately $3.0 million of cash
used in operations during the prior year period.
"We continue to generate cash from operations, and believe that,
combined with our cash balance and availability under our credit
facility, we have sufficient cash for our current operational needs,"
said Chief Financial Officer, Michael Marchetti.
Third Quarter Highlights and Recent Developments
-- Control of all worldwide wireless rights to "Tetris" has now
reverted to JAMDAT. During the third quarter, or subsequent to
the quarter end, JAMDAT launched "Tetris" in Europe, Korea,
South America and Japan.
-- In August, JAMDAT launched "Downtown Texas Hold 'Em" in
Europe, and the title quickly became a best seller in the
United Kingdom.
-- "JAMDAT SPORTS NFL 2006" was launched in conjunction with the
2005-2006 NFL season, and was hailed by numerous game reviews
as the best mobile NFL game to hit the market this year.
-- JAMDAT has broadly launched two of its most important holiday
titles, "DOOM RPG," based on the legendary id Software video
game, and "SOCOM: U.S. Navy SEALs Mobile Recon," in the United
States and selected markets around the world.
-- Michael Lynton, Chairman and CEO of Sony Pictures
Entertainment, was named to the Board of Directors on
September 1, 2005.
Business Outlook
JAMDAT today also provided guidance for the three months ending
December 31, 2005, and commented on its outlook for 2006.
Fourth Quarter and 2005 Outlook
For the three months ending December 31, 2005, JAMDAT expects
revenue in the range of $23.5 to $25 million, GAAP net income in the
range of $0.09 to $0.13 per diluted share and adjusted net income in
the range of $0.18 to $0.22 per diluted share. JAMDAT currently does
not expect its fourth quarter earnings to be materially impacted by
taxes. Net income per share calculations for the three months ending
December 31, 2005 are based on an estimated 26.1 million weighted
average shares outstanding. The reconciling items between GAAP net
income and adjusted net income for the period are amortization of
acquired intangible assets of approximately $2.0 million and employee
stock-based compensation of approximately $0.3 million.
For the full year ending December 31, 2005, JAMDAT expects
revenues of approximately $78 to $80 million. JAMDAT expects GAAP
earnings per diluted share of approximately $0.38 to $0.42, and
adjusted net income of approximately $0.80 to $0.84 per diluted share.
The full year earnings per share include a $0.07 per share income tax
benefit realized in Q2. Net income per share calculations for the full
year 2005 are based on an estimated 24.6 million weighted average
shares outstanding. The reconciling items between GAAP net income and
adjusted net income for the period are amortization of acquired
intangible assets and acquired in-process research and development of
approximately $8.9 million and amortization of stock- based
compensation of approximately $1.3 million.
2006 Outlook
For the full year ending December 31, 2006, JAMDAT expects annual
revenues of approximately $120 million and an adjusted net income
margin in the range of 20% to 25%. JAMDAT expects that 2006 earnings
will be fully taxed.
Investor Conference Call
JAMDAT's quarterly earnings conference call is scheduled to begin
later today (Tuesday, November 8, 2005) at 1:45 p.m., Pacific Standard
Time (USA). The conference call will be broadcast live over the
Internet. Investors may listen to the live audio 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 acquired intangibles
-- Acquired in-process research and development
-- Amortization of 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(R), The Lord of
the Rings(R), Tony Hawk's(R) Underground and Scrabble(R). JAMDAT
distributes its applications through wireless carriers around the
world. 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
effectively 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 September
31, 30,
2004 2005
-------- -----------
Assets (Unaudited)
Current assets:
Cash and cash equivalents $31,395 $25,011
Restricted cash 11 11
Short-term investments 33,523 -
Accounts receivable, net of allowance for
doubtful accounts of $75 and
$409 (unaudited), respectively 12,927 20,821
Prepaid expenses and other current assets 1,849 2,188
Prepaid royalties 2,114 2,920
Deferred tax asset - 3,684
-------- -----------
Total current assets 81,819 54,635
Property and equipment, net 1,998 2,342
Goodwill 4,081 27,578
Intangible assets, net 226 96,443
Non-current deferred tax asset - 857
Other non-current assets 2,490 1,465
-------- -----------
Total assets $90,614 $183,320
-------- -----------
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $1,185 $2,739
Accrued expenses and other liabilities 2,929 9,068
Deferred revenue 97 93
Current portion of notes payable 64 17,767
-------- -----------
Total current liabilities 4,275 29,667
Other non-current liabilities - 47
Notes payable, net of current portion 2 10,000
-------- -----------
Total liabilities 4,277 39,714
-------- -----------
Commitments and contingencies
Total stockholders' equity 86,337 143,606
-------- -----------
Total liabilities and
stockholders' equity $90,614 $183,320
-------- -----------
JAMDAT Mobile Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------------------------------------
2004 2005 2004 2005
---------- ----------- ---------- -----------
(Unaudited) (Unaudited)
Revenues $9,503 $20,240 $24,982 $54,631
Cost of Revenues 1,918 6,419 4,278 14,976
---------- ----------- ---------- -----------
Gross profit 7,585 13,821 20,704 39,655
---------- ----------- ---------- -----------
Operating Expenses:
Research and
development 3,480 5,719 8,534 14,662
Selling and
marketing 1,293 1,815 3,605 5,505
General and
administrative 1,904 4,287 4,958 10,282
Acquired in-
process research
and development - - - 2,890
Stock-based
compensation 985 311 2,483 990
---------- ----------- ---------- -----------
Total operating
expenses 7,662 12,132 19,580 34,329
---------- ----------- ---------- -----------
Income from
operations (77) 1,689 1,124 5,326
Interest and other
income (expense),
net 85 (305) 45 (330)
---------- ----------- ---------- -----------
Income before
income tax
benefit 8 1,384 1,169 4,996
---------- ----------- ---------- -----------
Income tax
benefit - - - 1,668
---------- ----------- ---------- -----------
Net income $8 $1,384 $1,169 $6,664
========== =========== ========== ===========
Net income per
common share:
Basic $0.00 $0.06 $0.34 $0.30
========== =========== ========== ===========
Diluted $0.00 $0.06 (1) $0.24 $0.29 (1)
========== =========== ========== ===========
Weighted average shares used
in computing net income per
common share:
Basic 3,695,112 23,462,629 3,450,322 22,036,318
========== =========== ========== ===========
Diluted 5,133,059 26,088,957 4,893,277 24,079,534
========== =========== ========== ===========
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 acquired intangibles and
employee stock-based compensation and charges for acquired in-process
research and development.
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------------------------------------
2004 2005 2004 2005
---------- ----------- ---------- -----------
Net income $8 $1,384 $1,169 $6,664
Amortization of
acquired intangibles 69 2,028 203 4,026
Acquired in-process
research and
development - - - 2,890
Stock-based
compensation 985 311 2,483 990
---------- ----------- ---------- -----------
Adjusted net income $1,062 $3,723 $3,855 $14,570
========== =========== ========== ===========
Adjusted net income
per diluted share $0.21 $0.15 (1) $0.79 $0.62 (1)
========== =========== ========== ===========
Weighted average
shares used in
computing adjusted
net income per
common share: 5,133,059 26,088,957 4,893,277 24,079,534
Gross profit $7,585 $13,821 $20,704 $39,655
Amortization
of acquired
intangibles 69 2,028 203 4,026
---------- ----------- ---------- -----------
Adjusted
gross profit $7,654 $15,849 $20,907 $43,681
========== =========== ========== ===========
(1) Imputed interest expense of $196 and $351 for the three and
nine months ended September 30, 2005, respectively, related to a
promissory note payable by the Company in cash or shares of common
stock was added back to net income in calculating the numerator for
the diluted earnings per share calculation in accordance with GAAP.
The weighted average shares related to the promissory note payable,
which were included in calculating diluted earnings per share, are
652,381 and 391,907 shares for the three and nine months ended
September 30, 2005, respectively.
JAMDAT Mobile Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
Nine Months Ended
September 30,
-------------------
2004 2005
-------------------
(Unaudited)
Cash flows from operating activities:
Net income $1,169 $6,664
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 697 4,786
Acquired in-process research and development - 2,890
Stock-based compensation and warrant
amortization 2,483 990
Non-cash interest (income) expense, net (18) 351
Net tax benefit from release of valuation
allowance - (4,026)
Provision for bad debts, net 4 358
Changes in operating assets and liabilities,
net of effect of acquisitions:
Accounts receivable (5,315) (1,805)
Prepaid expenses and other assets (2,714) (104)
Prepaid royalties (567) 300
Accounts payable and accrued expenses 2,016 4,815
Deferred revenue (795) (9)
Other non-current liabilities - 46
-------------------
Net cash provided by (used in) operating
activities (3,040) 15,256
-------------------
Cash flows from investing activities:
Purchases of property and equipment (1,628) (987)
Purchases of short-term investments - (18,102)
Sales of short-term investments - 51,625
Restricted cash 819 -
Business acquisitions and investments - (68,716)
-------------------
Net cash used in investing activities (809)(36,180)
-------------------
Cash flows from financing activities:
Borrowing under term loan and credit facility - 15,000
Bank facilities repayments (502) (565)
Proceeds from issuance of restricted common stock 751 91
Proceeds from issuance of common stock upon
exercise of warrants 270 -
Payment of note payable (1,866) -
-------------------
Net cash provided by (used in) financing
activities (1,347) 14,526
-------------------
Effect of exchange rate changes on cash (67) 14
Net decrease in cash and cash equivalents (5,263) (6,384)
Cash and cash equivalents, beginning of period 11,133 31,395
-------------------
Cash and cash equivalents, end of period $5,870 $25,011
-------------------
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