BEIJING, September 7, 2011 /PRNewswire-Asia/ -- KongZhong Corporation (NASDAQ: KONG), a leading provider of digital entertainment services for consumers in the PRC, today announced its unaudited financial results for the second quarter ended June 30, 2011.
Second quarter 2011 Financial Highlights:
* Revenues inline with guidance - Total revenues for the second quarter of 2011 increased 4% from the first quarter of 2011 to US$ 41.6 million, inline with the Company's 2Q11 revenue guidance range of US$ 41.5 mn to US$ 42.5 mn.
* Gross profit exceeds guidance - Total gross profit was US$ 17.03 mn for 2Q11, slightly exceeding the Company's 2Q11 guidance range of US$ 16 mn to US$ 17 mn.
* Net income inline with guidance - Net income in 2Q11 was US$4.39 mn, inline with the Company's guidance range of US$ 4.0 mn to US$ 5.0 mn. The net loss in 1Q11 was US$0.5 mn, which included a loss on change in fair value of contingent consideration of US$3.7 mn. Basic net income per American Depositary Shares ("ADS") was US$ 0.11.
* Non-GAAP net income inline with guidance - Non-GAAP net income was US$ 6.18 mn, inline with the Company's guidance range of US$ 6.0 mn to US$ 7.0 mn, while Non-GAAP diluted net income per ADS was US$ 0.14 (Non-GAAP Financial Measures are described and reconciled to the corresponding GAAP measures in the section titled "Non-GAAP Financial Measures.")
* Cash and cash equivalents - As of June 30, 2011, the Company had US$ 134.2 mn in cash and cash equivalents or US$ 3.3 per ADS in cash and cash equivalents, compared to US$ 118.3 mn at the end of 1Q11. Cash and cash equivalents exclude US$ 21.64 mn loans to a third party.
Commenting on the results, the Company's Chairman and Chief Executive Officer, Leilei Wang said, "The Company generated stable Non-GAAP net profit and increased our cash balance while continuing to build future growth opportunities in our Internet game business.
"More importantly, our Internet game business achieved over US$ 10.0 mn in quarterly revenues for the first time after only entering the online game market in early 2010, making KONG one of the fastest growing new entrants in the Chinese online game market.
"This performance was driven by our successful commercial launch of World of Tanks ("WoT"), in partnership with Wargaming.net ("Wargaming"). Over the next few quarters, in addition to further game enhancements developed by Wargaming, we plan to introduce WoT's Clan War add-on to the China market which will bring another level of user engagement to the already strong Chinese WoT community. In the coming months, KONG will introduce our self-developed online competition or "arena" platform to further enhance the quality of online events that users of WoT and eventually Paperman can participate in.
"For Paperman, the Anime-based first person shooter developed by Gamepot from Japan, we expect to launch the game commercially in China by the end of 2011.
"In addition, we continue to have confidence in our self-developed Internet game pipeline. For Kung Fu Hero, based on internal testing and user feedback, we now expect to begin small scale open beta testing by the end of 2011 with large scale testing and commercialization slated for early 2012. We continue to believe that Kung Fu Hero has the potential to become KONG's flagship online game for 2012 and 2013.
"Lastly, to better align our overall Internet game marketing resources, we are now planning to begin open beta testing for Emofaze 3 in early 2012 with commercialization now slated for mid-2012."
Source:21cbh