“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:
- 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.
- 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.
- 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.
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