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Glu Reports Second Quarter 2013 Financial Results; Changes To Gross Accounting For Revenues And Cost Of Revenues

Glu Mobile Inc. (NASDAQ:GLUU), a leading global developer and publisher of free-to-play games for smartphone and tablet devices, today announced financial results for its second quarter ended June 30, 2013. The company also announced that as a result of discussions between management and its independent registered public accounting firm, Glu has concluded that smartphone revenues and cost of revenues for sales to end customers through digital storefronts need to be restated to a gross accounting basis, rather than the net basis previously applied.

The company is revising its financial statements for the year ended December 31, 2010 and restating its financial statements for the years ended December 31, 2011 to 2012 and the first quarter of 2013. The revision and restatements increase GAAP and non-GAAP revenues with a corresponding identical increase to GAAP and non-GAAP cost of revenues. As a result, gross profit, operating income/(loss), net income/(loss), per share amounts, Adjusted EBITDA and cash flows during the affected periods were unchanged. Below is a summary of the impact of the revision and restatements on a GAAP and non-GAAP basis:

 
(in thousands, except percentage and per share data) (unaudited)
  GAAP Revised   GAAP Restated   GAAP Restated   GAAP Restated   Non-GAAP Revised   Non-GAAP Restated   Non-GAAP Restated   Non-GAAP Restated
  2010       2011       2012     Q113   2010       2011       2012     Q113
           
As Reported:
Featurephone $ 54,475 $ 31,091 $ 13,135 $ 1,856 $ 54,052 $ 31,007 $ 13,141 $ 1,885
Smartphone   9,870       35,094       74,358       17,275     10,221       41,904       74,615       17,138  
Total Revenues 64,345 66,185 87,493 19,131 64,273 72,911 87,756 19,023
Cost of Revenues 21,532 18,367 12,723 3,062 17,142 12,965 8,964 1,907
Gross Profit 42,813 47,818 74,770 16,069 47,131 59,946 78,792 17,116
Gross Margin 67 % 72 % 85 % 84 % 73 % 82 % 90 % 90 %
 
Net Loss $ (13,423 ) $ (21,101 ) $ (20,459 ) $ (5,497 ) $ (3,004 ) $ (4,036 ) $ (5,057 ) $ (2,299 )
Net Loss Per Share (0.38 ) (0.37 ) (0.32 ) (0.08 ) (0.08 ) (0.07 ) (0.08 ) (0.03 )
Adjusted EBITDA - - - - 255 (1,534 ) (2,274 ) (1,436 )
 
Adjustments:
Featurephone $ - $ - $ - $ - $ - $ - $ - $ -
Smartphone   2,459       7,840       20,690       5,474     2,610       9,745       21,166       5,693  
Total Revenues 2,459 7,840 20,690 5,474 2,610 9,745 21,166 5,693
Cost of Revenues 2,459 7,840 20,690 5,474 2,610 9,745 21,166 5,693
Gross Profit - - - - - - - -
 
Revised/Restated:
Featurephone $ 54,475 $ 31,091 $ 13,135 $ 1,856 $ 54,052 $ 31,007 $ 13,141 $ 1,885
Smartphone   12,329       42,934       95,048       22,749     12,831       51,649       95,781       22,831  
Total Revenues 66,804 74,025 108,183 24,605 66,883 82,656 108,922 24,716
Cost of Revenues 23,991 26,207 33,413 8,536 19,752 22,710 30,130 7,600
Gross Profit 42,813 47,818 74,770 16,069 47,131 59,946 78,792 17,116
Gross Margin 64 % 65 % 69 % 65 % 70 % 73 % 72 % 69 %
 
Net Loss $ (13,423 ) $ (21,101 ) $ (20,459 ) $ (5,497 ) $ (3,004 ) $ (4,036 ) $ (5,057 ) $ (2,299 )
Net Loss Per Share (0.38 ) (0.37 ) (0.32 ) (0.08 ) (0.08 ) (0.07 ) (0.08 ) (0.03 )
Adjusted EBITDA     -       -       -       -       255       (1,534 )     (2,274 )     (1,436 )




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