“We had a solid fourth quarter performance with non-GAAP smartphone revenue growing primarily due to the strength of two of our new sequels Contract Killer 2 and Eternity Warriors 2,” stated Eric R. Ludwig, Glu’s Chief Financial Officer. “While we expect first quarter results to be impacted by a combination of seasonality and further delays in title launches, we remain in position to benefit from increasing monetization trends as we implement our new strategy. Given our on-going commitment to control costs, we are confident in our ability to end 2013 with approximately $14 million in cash and without the need to raise additional capital or incur debt.”
Business Outlook as of February 5, 2013:
The following forward-looking statements reflect expectations as of February 5, 2013. Results may be materially different and are affected by many factors, such as: consumer demand for mobile entertainment and specifically Glu’s products; consumer demand for smartphones, tablets and next-generation platforms; development delays on Glu's products; continued uncertainty in the global economic environment; competition in the industry; storefront featuring; smartphone storefronts, carriers and other distributors maintaining their networks and provisioning systems to enable consumer purchases; changes in foreign exchange rates; Glu's effective tax rate and other factors detailed in this release and in Glu's SEC filings.
First Quarter Expectations – Quarter Ending March 31, 2013:
2013 Expectations – Full Year Ending December 31, 2013:
- Non-GAAP revenue is expected to be between $17.0 million and $18.5 million and non-GAAP smartphone revenue is expected to be between $16.0 million and $17.0 million.
- Non-GAAP gross margin is expected to be between 89% and 90%.
- Non-GAAP operating expenses are expected to be between $20.5 million and $20.7 million.
- Adjusted EBITDA, defined as non-GAAP operating loss excluding depreciation of approximately $800,000, is expected to range from $(3.3) million to $(4.6) million.
- Income tax expense is expected to be $(0.2) million.
- Non-GAAP net loss is expected to be between $(4.3) million and $(5.6) million, or a net loss of $(0.06) to $(0.08) per weighted-average basic shares outstanding.
- Weighted-average common shares outstanding are expected to be approximately 66.2 million basic and 70.8 million diluted.
Quarterly Conference Call
- Non-GAAP revenue is expected to be between $84.0 million and $92.0 million and non-GAAP smartphone revenue is expected to be between $80.0 million and $88.0 million.
- Non-GAAP gross margin is expected to be approximately 91.5%.
- Adjusted EBITDA is expected to range from $(1.8) million to $(7.5) million.
- Non-GAAP net loss is expected to be between $(5.9) million and $(11.6) million, or a net loss of $(0.09) to $(0.17) per weighted-average basic shares outstanding.
- Weighted-average common shares outstanding are expected to be approximately 67.3 million basic and 73.0 million diluted.
- We expect to have a cash balance on December 31, 2013 of approximately $14.0 million with no debt.
Glu will discuss its quarterly results via teleconference today at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time). Please dial (877) 593-1988, or if outside the U.S., (678) 905-9423, with conference ID # 87391968 to access the conference call at least five minutes prior to the 1:30 p.m. Pacific Time start time. A live webcast and replay of the call will also be available on the investor relations portion of the company's website at
. An audio replay will be available between 4:30 p.m. Pacific Time, February 5, 2013, and 8:59 p.m. Pacific Time, February 12, 2013, by calling (855) 859-2056, or (404) 537-3406, with conference ID # 87391968.
Use of Non-GAAP Financial Measures
To supplement Glu's unaudited condensed consolidated financial data presented in accordance with GAAP, Glu uses certain non-GAAP measures of financial performance. The presentation of these non-GAAP financial measures is not intended to be considered in isolation from, as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP, and may be different from non-GAAP financial measures used by other companies. In addition, these non-GAAP measures have limitations in that they do not reflect all of the amounts associated with Glu's results of operations as determined in accordance with GAAP. The non-GAAP financial measures used by Glu include historical and estimated non-GAAP revenues, non-GAAP smartphone revenues, non-GAAP operating expenses, non-GAAP gross margins, non-GAAP operating income/(loss), non-GAAP net loss and non-GAAP basic and diluted net loss per share. These non-GAAP financial measures exclude the following items from Glu's unaudited consolidated statements of operations:
- Change in deferred revenues and royalties;
- Amortization of in-process development contracts;
- Amortization of intangible assets;
- Stock-based compensation expense;
- Restructuring charges;
- Change in fair value of Blammo earnout;
- Transitional costs;
- Impairment of goodwill;
- Release of tax liabilities; and
- Foreign currency exchange gains and losses primarily related to the revaluation of assets and liabilities.
In addition, Glu has included in this release “Adjusted EBITDA” figures which are used to evaluate Glu’s operating performance and is defined as non-GAAP operating income/(loss) excluding depreciation.