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Glu Reports Second Quarter 2012 Financial Results

In the financial tables below, Glu has provided a reconciliation of the most comparable GAAP financial measure to each of the historical non-GAAP financial measures used in this press release.

       
Glu Mobile Inc.
Consolidated Balance Sheets
(in thousands)
(unaudited)
June 30, December 31,
2012 2011
 
ASSETS
Cash and cash equivalents $ 24,532 $ 32,212
Accounts receivable, net 14,009 11,821
Prepaid royalties 176 483
Prepaid expenses and other current assets   2,107     1,881  
Total current assets 40,824 46,397
 
Property and equipment, net 3,920 3,934
Other long-term assets 612 404
Intangible assets, net 12,427 10,078
Goodwill   22,030     21,991  
Total assets $ 79,813   $ 82,804  
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $ 6,165 $ 6,894
Accrued liabilities 2,174 939
Accrued compensation 9,639 5,404
Accrued royalties 3,285 3,865
Accrued restructuring 541 887
Deferred revenues   7,740     7,139  
Total current liabilities 29,544 25,128
Other long-term liabilities   7,736     8,503  
Total liabilities   37,280     33,631  
 
Common stock 6 6
Additional paid-in capital 264,229 260,744
Accumulated other comprehensive income (30 ) 266
Accumulated deficit   (221,672 )   (211,843 )
Stockholders' equity   42,533     49,173  
Total liabilities and stockholders' equity $ 79,813   $ 82,804  
 

               
Glu Mobile Inc.
Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
  Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
2012 2011 2012 2011
 
Revenues $ 23,621 $ 17,680 $ 45,165 $ 34,106
 
Cost of revenues:
Royalties and other cost of revenues 2,137 3,121 4,694 6,961
Amortization of intangible assets   932     703     1,685     1,520  
Total cost of revenues   3,069     3,824     6,379     8,481  
Gross profit   20,552     13,856     38,786     25,625  
 
Operating expenses:
Research and development 15,697 8,439 30,730 15,605
Sales and marketing 4,701 3,344 9,076 7,101
General and administrative 4,556 3,506 8,922 6,440
Amortization of intangible assets 495 - 990 -
Restructuring charge   320     147     320     637  
Total operating expenses   25,769     15,436     50,038     29,783  
 
Loss from operations (5,217 ) (1,580 ) (11,252 ) (4,158 )
 
Interest and other income/(expense), net:
Interest income 10 7 21 29
Interest expense (5 ) (32 ) (9 ) (72 )
Other income/(expense), net   205     354     (168 )   552  
Interest and other income/(expense), net   210     329     (156 )   509  
 
Loss before income taxes (5,007 ) (1,251 ) (11,408 ) (3,649 )
Income tax benefit/(provision)   2,019     (501 )   1,579     (1,275 )
Net loss $ (2,988 ) $ (1,752 ) $ (9,829 ) $ (4,924 )
 
Net loss per share - basic and diluted $ (0.05 ) $ (0.03 ) $ (0.15 ) $ (0.09 )
 
Weighted average common shares outstanding - basic and diluted 63,802 54,587 63,516 53,318
 
Stock-based compensation expense included in:
Research and development $ 2,396 $ 131 $ 5,656 $ 231
Sales and marketing 155 94 270 160
General and administrative   487     280     948     511  
Total stock-based compensation expense $ 3,038   $ 505   $ 6,874   $ 902  
 

                       
Glu Mobile Inc.
GAAP to Non-GAAP Reconciliation
(in thousands, except per share data)
(unaudited)

For the Three Months Ended

March 31, June 30, September 30, December 31, March 31, June 30,
2011     2011     2011     2011     2012     2012
 
GAAP revenues
Featurephone $ 10,478 $ 8,253 $ 7,248 $ 5,112 $ 4,165 $ 3,710
Smartphone   5,948         9,427         9,657         10,062         17,379         19,911  
Total GAAP revenues   16,426         17,680         16,905         15,174         21,544         23,621  
 
Change in deferred revenues and amortization of in-process development contracts
Featurephone change in deferred revenue (63 ) (6 ) 5 (20 ) (7 ) 17
Smartphone change in deferred revenue and amortization of in-process development contracts   798         240         875         4,897         57         534  
Total change in deferred revenues and amortization of in-process development contracts   735         234         880         4,877         50         551  
 
Non-GAAP Revenues
Featurephone 10,415 8,247 7,253 5,092 4,158 3,727
Smartphone   6,746         9,667         10,532         14,959         17,436         20,445  
Total non-GAAP Revenues   17,161         17,914         17,785         20,051         21,594         24,172  
 
GAAP gross profit 11,769 13,856 11,147 11,046 18,234 20,552
Change in deferred revenues and amortization of in-process development contracts 735 234 880 4,877 50 551
Amortization of intangible assets 817 703 2,375 1,552 753 932
Change in deferred royalty expense   33         20         1         (99 )       60         67  
Non-GAAP gross profit   13,354         14,813         14,403         17,376         19,097         22,102  
 
GAAP operating expense 14,347 15,436 18,462 20,807 24,269 25,769
Stock-based compensation (397 ) (505 ) (838 ) (1,370 ) (3,836 ) (3,038 )
Amortization of intangible assets - - (330 ) (495 ) (495 ) (495 )
Transitional costs - - (981 ) (326 ) (173 ) (30 )
Change in fair value of Blammo earnout - - 178 (117 ) (645 ) (386 )
Restructuring charge   (490 )       (147 )       -         92         -         (320 )
Non-GAAP operating expense   13,460         14,784         16,491         18,591         19,120         21,500  
 
GAAP operating loss (2,578 ) (1,580 ) (7,315 ) (9,761 ) (6,035 ) (5,217 )
Change in deferred revenues and amortization of in-process development contracts 735 234 880 4,877 50 551
Non-GAAP cost of revenues adjustment 850 723 2,376 1,453 813 999
Stock-based compensation 397 505 838 1,370 3,836 3,038
Amortization of intangible assets - - 330 495 495 495
Transitional costs - - 981 326 173 30
Change in fair value of Blammo earnout - - (178 ) 117 645 386
Restructuring charge   490         147         -         (92 )       -         320  
Non-GAAP operating income/(loss)   (106 )       29         (2,088 )       (1,215 )       (23 )       602  
 
 
GAAP net loss (3,172 ) (1,752 ) (6,158 ) (10,019 ) (6,841 ) (2,988 )
Change in deferred revenues and amortization of in-process development contracts 735 234 880 4,877 50 551
Non-GAAP cost of revenues adjustment 850 723 2,376 1,453 813 999
Non-GAAP operating expense adjustment 887 652 1,971 2,216 5,149 4,269
Foreign currency exchange loss/(gain) (198 ) (363 ) (344 ) 116 373 (205 )
Release of tax liabilities   -         -         -         -         -         (2,427 )

Non-GAAP net income/(loss)

$ (898 )     $ (506 )     $ (1,275 )     $ (1,357 )     $ (456 )     $ 199  
 
 
Reconciliation of net loss and net loss per share:
GAAP net loss per share - basic and diluted $ (0.06 ) $ (0.03 ) $ (0.10 ) $ (0.16 ) $ (0.11 ) $ (0.05 )
Non-GAAP net income/(loss) per share - basic and diluted $ (0.02 ) $ (0.01 ) $ (0.02 ) $ (0.02 ) $ (0.01 ) $ 0.00
Shares used in computing Non-GAAP basic net income/(loss) per share 52,048 54,587 60,461 62,973 63,229 63,802
Shares used in computing Non-GAAP diluted net income/(loss) per share 52,048 54,587 60,461 62,973 63,229 69,490
 
Non-GAAP operating expense break-out:
GAAP research and development expense $ 7,166 $ 8,439 $ 10,808 $ 12,660 $ 15,033 $ 15,697
Transitional costs - - (219 ) (23 ) (68 ) (1 )
Stock-based compensation   (100 )       (131 )       (356 )       (800 )       (3,260 )       (2,396 )
Non-GAAP research and development expense   7,066         8,308         10,233         11,837         11,705         13,300  
 
GAAP sales and marketing expense 3,757 3,344 3,576 3,930 4,375 4,701
Transitional costs - - (2 ) (5 ) - -
Stock-based compensation   (66 )       (94 )       (96 )       (95 )       (115 )       (155 )
Non-GAAP sales and marketing expense   3,691         3,250         3,478         3,830         4,260         4,546  
 
GAAP general & administrative expense 2,934 3,506 3,748 3,814 4,366 4,556
Transitional costs - - (760 ) (298 ) (105 ) (29 )
Change in fair value of Blammo earnout - - 178 (117 ) (645 ) (386 )
Stock-based compensation   (231 )       (280 )       (386 )       (475 )       (461 )       (487 )
Non-GAAP general and administrative expense $ 2,703       $ 3,226       $ 2,780       $ 2,924       $ 3,155       $ 3,654  
 

                       
Glu Mobile Inc.
Non-GAAP Adjusted EBITDA
(in thousands, except per share data)
(unaudited)
For the Three Months Ended
March 31, June 30, September 30, December 31, March 31, June 30,
2011 2011 2011 2011 2012 2012
 
GAAP net loss $ (3,172 ) $ (1,752 ) $ (6,158 ) $ (10,019 ) $ (6,841 ) $ (2,988 )
Change in deferred revenues and amortization of in-process development contracts 735 234 880 4,877 50 551
Change in deferred royalty expense 33 20 1 (99 ) 60 67
Amortization of intangible assets 817 703 2,705 2,047 1,248 1,427
Depreciation 427 406 470 543 562 556
Stock-based compensation 397 505 838 1,370 3,836 3,038
Change in fair value of Blammo earnout - - (178 ) 117 645 386
Transitional costs - - 981 326 173 30
Restructuring charge 490 147 - (92 ) - 320
Foreign currency exchange loss/(gain) (198 ) (363 ) (344 ) 116 373 (205 )
Interest (income)/expense, net 18 25 (4 ) (10 ) (7 ) (5 )
Other non operating expense - 9 4 - - -
Income tax provision/(benefit)   774         501         (813 )       152         440         (2,019 )
Total Non-GAAP Adjusted EBITDA $ 321       $ 435       $ (1,618 )     $ (672 )     $ 539       $ 1,158  
 




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