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.
-0- *T 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 ------------
----------- *T -0- *T 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 ============ ============ *T
-0- *T 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 ------------------- *T
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