See more news releases in: Internet Technology, Computer Electronics, Multimedia & Internet, Entertainment, Earnings
The9 Limited Reports Third Quarter 2009 Unaudited Financial Results
Third Quarter 2009 Highlights:
-- Net revenues for the third quarter of 2009 decreased by 91%
quarter-over-quarter and decreased by 94% year-over-year to RMB25.5
million (US$3.7 million), mainly due to a decrease in revenue from
World of Warcraft ("WoW"), for which our license agreement expired on
June 7, 2009.
-- Net loss attributable to ordinary shareholders for the third quarter of
2009 of RMB73.6 million (US$10.8 million), representing a 7% decrease
from a net loss of RMB79.2 million (US$11.6 million) in the previous
quarter and compared with net income of RMB80.5 million (US$11.8
million) in the same period last year.
Management Comments:
Commenting on the third quarter 2009 results,
Discussion of The9's Unaudited Third Quarter 2009 Results
Revenues
For the third quarter of 2009, The9 reported total net revenues of
In the third quarter of 2009, net revenues attributable to the operations
of non-WoW games increased by 55% quarter-over-quarter. The sequential
increase was mainly due to an increase of revenue from Soul of The Ultimate
Nation(TM) ("SUN") after the launch of new content upgrade and a theft-proof
security system, and revenue contribution for a complete quarter from EA
SPORTS(TM) FIFA Online 2, Atlantica and our first web-based game,
Aggregate active users increased by 6% to 3.4 million quarter-over-quarter
in the third quarter, which was mainly due to
Gross (Loss) Profit
Gross loss for the third quarter of 2009 was
Operating Expenses
For the third quarter of 2009, operating expenses were
The year-over-year increase in operating expenses was mainly due to an increase in product development costs caused by the expansion of our research and development team and an increase in general and administrative expenses caused by increased share-based compensation.
For the third quarter of 2009, share-based compensation was
Interest Income
Interest income for the third quarter of 2009 was
Other Income (Expenses), net
Other income for the third quarter of 2009 was
Income Tax Expense
Income tax expense for the third quarter of 2009 was
Impairment Loss on Investment
In the third quarter of 2009, we recognized an impairment loss on
investment of
Net (Loss) Income attributable to ordinary shareholders
For the third quarter of 2009, net loss attributable to ordinary
shareholders was
Fully diluted loss per share and per ADS for the third quarter of 2009 was
For the third quarter of 2009, non-GAAP adjusted net loss was
Update on Stock Repurchase Program
On
Currency Convenience Translation
The conversion of Renminbi (RMB) into US dollars (US$) in this press
release is based on the noon buying rate in the
Use of Non-GAAP Measure
To supplement the consolidated financial statements presented in
accordance with accounting principles generally accepted in
Non-GAAP adjusted net income is defined as earnings before depreciation of property, equipment and software, amortization of land use right and intangibles, share-based compensation, foreign exchange loss and income tax expenses/benefits, as applicable. The use of non-GAAP adjusted net income has certain limitations. Depreciation of property, equipment and software, amortization of land use rights and intangibles and income tax expenses/benefits have been and will be incurred and are not reflected in the presentation of non-GAAP adjusted net income. Each of these items should also be considered in the overall evaluation of our results. Non-GAAP adjusted net income should not be considered as a measure of our liquidity. We compensate for these limitations by providing the relevant disclosure of our depreciation and amortization, and income tax expenses/benefits in our reconciliations to the GAAP financial measure, share-based compensation and income tax expenses/benefits in our reconciliations to the GAAP financial measure, which should be considered when evaluating our performance. Non-GAAP adjusted net income is not defined under GAAP, and our non-GAAP adjusted net income is not a measure of net income, operating income, or any operating performance measure that is calculated in accordance with GAAP. In addition, our non-GAAP adjusted net income may not be comparable to similarly titled measures utilized by other companies since such other companies may not calculate non- GAAP adjusted net income in the same manner as we do. For more information on this non-GAAP financial measure, please see the tables captioned "Reconciliation of GAAP to non-GAAP results" set forth at the end of this release.
Conference Call / Webcast Information
The9's management team will host a conference call on
Investors, analysts and other interested parties will be able to access
the live conference by calling +1-800-884-5695, password "33466153." In the
U.S., members of the financial community may also participate in the call by
dialing toll-free number +1-617-786-2960, password "33466153." A replay of the
call will be available through
The9 will also provide a live webcast of the earnings call. Participants in the webcast should log onto the Company's Investor Relations website http://www.corp.the9.com 15 minutes prior to the call, then click on the icon for "The9 Limited 3Q 2009 Earnings Conference Call" and follow the instructions.
About The9 Limited
The9 Limited is an online game operator and developer in
Safe Harbor Statement
This announcement contains forward-looking statements. These statements
are made under the "safe harbor" provisions of the U.S. Private Securities
Litigation Reform Act of 1995. These forward-looking statements can be
identified by terminology such as "will," "expects," "anticipates," "future,"
"intends," "plans," "believes," "estimates" and similar statements. Among
other things, the business outlook and quotations from management in this
press release contain forward-looking statements. The9 may also make written
or oral forward-looking statements in its periodic reports to the U.S.
Securities and Exchange Commission on Forms 20-F and 6-K, etc., in its annual
report to shareholders, in press releases and other written materials and in
oral statements made by its officers, directors or employees to third parties.
Statements that are not historical facts, including statements about The9's
beliefs and expectations, are forward-looking statements. Forward-looking
statements involve inherent risks and uncertainties. A number of important
factors could cause actual results to differ materially from those contained
in any forward-looking statement. Potential risks and uncertainties include,
but are not limited to, The9's limited operating history as an online game
operator, political and economic policies of the Chinese government, the laws
and regulations governing the online game industry, information disseminated
over the Internet and Internet content providers in
For further information, please contact:
Ms. Phyllis Sai
Manager, Investor Relations
The9 Limited
Tel: +86-21-5172-9990
Email: IR@corp.the9.com
Web: http://www.corp.the9.com/
-- Tables follow --
THE9 LIMITED
CONSOLIDATED STATEMENTS OF INCOME INFORMATION
(Expressed in Renminbi - RMB and US Dollars - US$, except share data)
Quarter Ended
September 30, June 30, September 30, September 30,
2008 2009 2009 2009
RMB RMB RMB US$
(unaudited) (unaudited) (unaudited) (unaudited)
Revenues:
Online game
services 429,341,753 301,491,378 25,744,962 3,771,492
Game operating
support,
website
solutions and
advertisement 93,288 247,267 79,208 11,604
Other revenues 1,621,709 2,135,763 1,077,513 157,850
431,056,750 303,874,408 26,901,683 3,940,946
Sales Taxes (22,613,391) (15,946,899) (1,410,747) (206,667)
Net Revenues 408,443,359 287,927,509 25,490,936 3,734,279
Cost of Services (245,465,001) (223,644,279) (33,606,420) (4,923,152)
Gross Profit
(loss) 162,978,358 64,283,230 (8,115,484) (1,188,873)
Operating
Expenses:
Product
development (21,209,361) (31,125,521) (26,291,516) (3,851,560)
Sales and
marketing (24,828,740) (37,883,112) (20,709,170) (3,033,777)
General and
administrative (56,939,318) (53,257,372) (62,174,821) (9,108,262)
Impairment of
equipment,
intangible
assets and
goodwill -- (30,199,751) -- --
Total operating
expenses: (102,977,419) (152,465,756) (109,175,507) (15,993,599)
Profit (loss) from
operations 60,000,939 (88,182,526) (117,290,991) (17,182,472)
Interest income 15,423,866 6,905,505 7,188,006 1,053,003
Other income, net 11,211,080 112,605 55,967,903 8,198,984
Income (loss)
before income tax
expense,
impairment loss
on investment
and share of
(loss) in equity
investments 86,635,885 (81,164,416) (54,135,082) (7,930,485)
Income tax expense (6,357,157) -- (4,858,272) (711,710)
Income (loss)
before impairment
loss on
investment and
share of (loss)
in equity
investments 80,278,728 (81,164,416) (58,993,354) (8,642,195)
Impairment loss on
investment -- -- (12,160,769) (1,781,484)
Share of (loss) in
equity
investments,
net of taxes (250,417) (589,547) (677,625) (99,268)
Net income (loss) 80,028,311 (81,753,963) (71,831,748) (10,522,947)
Less: Net income
(loss)
attributable to
non-controlling
interest (475,663) (2,560,155) 1,805,658 264,519
Net income (loss)
attributable to
The9 Limited 80,503,974 (79,193,808) (73,637,406) (10,787,466)
Earnings (loss)
per share
attributable to
The9 Limited's
ordinary
shareholders
- Basic 2.92 (3.15) (2.93) (0.43)
- Diluted 2.91 (3.15) (2.93) (0.43)
Weighted average
shares
outstanding
- Basic 27,609,689 25,125,385 25,094,283 25,094,283
- Diluted 27,657,378 25,125,385 25,094,283 25,094,283
Amount
attributable to
The9 Limited's
ordinary
shareholders 80,503,974 (79,193,808) (73,637,406) (10,787,466)
THE9 LIMITED
CONSOLIDATED BALANCE SHEETS INFORMATION
(Expressed in Renminbi - RMB and US Dollars - US$)
As at
December 31, September 30, September 30,
2008 2009 2009
RMB RMB US$
(audited) (unaudited) (unaudited)
Assets
Current Assets
Cash and cash equivalents 2,152,585,574 1,770,646,481 259,389,775
Short term investments 68,039,221 169,620 24,848
Accounts receivable 8,323,084 865,494 126,790
Due from related parties 637,708 1,050,251 153,856
Advances to suppliers 1,435,781 1,753,933 256,941
Prepayments and other
current assets 68,371,912 55,954,939 8,197,085
Prepaid royalties 138,843,227 63,568,330 9,312,404
Deferred costs 55,748,737 1,762,936 258,260
Total current assets 2,493,985,244 1,895,771,984 277,719,959
Investments in equity
investees 291,642,529 310,522,462 45,489,798
Available-for-sale
investments 29,218,400 10,243,500 1,500,615
Property, equipment and
software 200,034,094 102,937,783 15,079,808
Goodwill 30,199,751 -- --
Intangible assets 136,129,801 117,125,552 17,158,236
Land use right 81,798,755 80,358,074 11,772,007
Prepayment for equipment -- -- --
Long-term deposits -- 795,547 116,543
Total Assets 3,263,008,574 2,517,754,902 368,836,966
Liabilities
Current Liabilities
Accounts payable 29,758,563 34,851,439 5,105,540
Due to related parties -- -- --
Income tax payable 56,680 5,372,685 787,068
Other taxes payable 99,416,815 4,656,110 682,094
Advances from customers 143,464,990 13,187,442 1,931,886
Deferred revenue 201,645,952 9,464,273 1,386,463
Liability for refund of
prepaid WOW game cards -- 196,984,217 28,857,083
Other payables and
accruals 69,423,536 47,020,336 6,888,215
Total current liabilities 543,766,536 311,536,502 45,638,349
Equity
The9 Limited shareholders'
equity
Common shares (US$0.01 par
value; 26,817,688 shares
issues and outstanding as
of December 31, 2008,
25,111,645 shares issued
and outstanding as of
September 30, 2009) 2,190,645 2,051,029 300,464
Additional paid-in capital 2,128,607,581 2,058,116,293 301,502,489
Statutory reserves 24,836,354 28,071,982 4,112,388
Accumulated other
comprehensive income 13,643,131 -- --
Retained earnings 549,964,327 117,158,479 17,163,060
Total The9 Limited
shareholders' equity 2,719,242,038 2,205,397,783 - 323,078,401
Non-controlling interest -- 820,617 120,216
Total equity 2,719,242,038 2,206,218,400 323,198,617
Total liabilities and equity 3,263,008,574 2,517,754,902 368,836,966
THE9 LIMITED
RECONCILIATION OF GAAP TO NON-GAAP RESULTS
(Expressed in Renminbi - RMB and US Dollars - US$, except share data)
Quarter Ended
September 30, June 30, September 30, September 30,
2008 2009 2009 2009
RMB RMB RMB US$
(unaudited) (unaudited) (unaudited) (unaudited)
GAAP net income (loss) 80,503,974 (79,193,808) (73,637,406) (10,787,467)
Depreciation of
property, equipment 53,181,549 48,379,270 8,621,153 1,262,951
Amortization of land
use right and
intangible assets 24,227,801 19,046,925 5,678,641 831,889
Share based
compensation 12,220,320 15,016,684 26,695,613 3,910,758
Foreign exchange loss
(gain) 810,325 (114,679) (1,781,498) (260,979)
Income tax expense 6,357,157 -- 4,858,272 711,710
Non-GAAP net income
(loss) 177,301,126 3,134,392 (29,565,225) (4,331,138)
GAAP earnings (loss)
per share
- Basic 2.92 (3.15) (2.93) (0.43)
- Diluted 2.91 (3.15) (2.93) (0.43)
Non-GAAP net income
(loss) per share
- Basic 6.42 0.12 (1.18) (0.17)
- Diluted 6.41 0.12 (1.18) (0.17)
Weighted average
shares outstanding
- Basic 27,609,689 25,125,385 25,094,283 25,094,283
- Diluted 27,657,378 25,125,385 25,094,283 25,094,283
SOURCE The9 Limited
Back to top
RELATED LINKS
http://www.corp.the9.com/
http://the9.com/
Custom Packages
Browse our custom packages or build your own to meet your unique communications needs.
PR Newswire Membership
Fill out a PR Newswire membership form or contact us at (888) 776-0942.
Learn about PR Newswire services
Request more information about PR Newswire products and services or call us at (888) 776-0942.
- Site Preview
-
Close Site Preview
-
View FullScreen
