13:00 | 16.03.2010
DGAP-News: Artificial Life Announces Fiscal Year 2009 Results
Artificial Life, Inc. /
16.03.2010 13:00
Dissemination of a Corporate News, transmitted by
DGAP – a company of EquityStory AG.
The issuer / publisher is solely responsible for the content of this announcement.
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22% Growth in Revenues, 28% Net Profit Margin
LOS ANGELES, BERLIN, HONG KONG, March 16, 2010 (GLOBE NEWSWIRE) — Artificial
Life, Inc., (OTCBB:ALIF) (http://www.artificial-life.com) today announced solid
growth in revenues and profits for fiscal year 2009. Revenues grew 22% to
$27,454,474 and net income was $7,568,719, representing a net profit margin
after taxes of 28%.
Business Highlights
During the course of 2009, Artificial Life Inc. strengthened its global
position as a leading, full-service mobile software provider by
offering a wide variety of mobile products, including mobile games,
mobile TV, mobile business applications, and mobile productivity tools
and technology.
For the year 2009, Artificial Life sold over 12 million licenses for
its mobile Java games worldwide. 2009 also saw significant growth in
the market for iPhone games and applications, and though a relative
newcomer to the iPhone market, Artificial Life became one of the
leading iPhone publishers. The Company had over 10 million game
downloads globally and 70% of its games achieved a top-10 ranking, 46%
a top-5 ranking, and 33% of the games even reached a #1 ranking on
Apple’s download charts in many countries around the globe.
In 2009, the Company had 73 corporate clients, 22 of which were new
customers, generating approximately 45% of the Company’s total revenue.
Approximately 51% of Artificial Life’s revenues were derived from
mobile games, while approximately 22% were derived from sales of
non-game-related mobile products such as Mobil Diab(TM), a mobile
healthcare application for business; 21% from sales of
MobileBooster(R), a productivity tool that has now become an integrated
part of the newly released m-commerce platform, OPUS-M(TM); and 6% from
sales of Mobile Property, a mobile application for the real estate
industry.
Financial Results
Results of Operations –Year Ended December 31, 2009 compared to Year
Ended December 31, 2008
Revenues. Revenues for the year ended December 31, 2009 were
$27,454,474 as compared to $22,454,414 for the year ended December 31,
2008. The increase of $5,000,060, or 22%, was primarily due to
increased licensing revenue generated from the sales of our 3G mobile
Java and iPhone/iPod touch products and our m-commerce platform as well
as license income from the sales of our Mobil Diab(TM) and Mobile
Property applications.
Cost of Revenues. Cost of revenues mainly consisted of amortization of
intangible assets (license rights). Cost of revenues for the year ended
December 31, 2009 was $5,309,072 as compared to $3,204,590 for the year
ended December 31, 2008. The increase of $2,104,482, or 66%, was
primarily due to the increased amortization of license rights.
Gross Margin. Gross margin for the year ended December 31, 2009 was
$22,145,402 as compared to $19,249,824 for the year ended December 31,
2008. The increase of $2,895,578, or 15%, was mainly due to increased
product license income from mobile games, one-time downloads, and
monthly subscription revenues for 3G games derived from mobile
operators, bulk resellers, and handset distributors and a number of
license deals for the sale of our Mobil Diab(TM) and Mobile Property
applications offset by amortization of license rights acquired.
General and Administrative Expenses. General and administrative
expenses consisted of salary and payroll tax expenses of administrative
personnel, rent, professional fees and costs associated with employee
benefits, supplies, communications, and travel. Total general and
administrative expenses for the year ended December 31, 2009 were
$6,426,674 as compared to $3,268,260 for the year ended December 31,
2008. The increase of $3,158,414, or 97%, was primarily due to the
stock-based compensation expense of approximately $0.6 million,
depreciation of computer software of approximately $1.4 million, and
bad debt expense of approximately $2 million partially offset by
reduced legal and professional fees.
Research and Development Expenses. Research and development expenses
consisted of salary, training, consulting, subcontracting, and other
expenses incurred to develop and fulfill the design specifications and
production of the products and services from which we derive our
revenues. Total research and development expenses for the year ended
December 31, 2009 were $4,930,495 as compared to $3,250,289 in the year
ended December 31, 2008. The increase of $1,680,206, or 52%, was
primarily due to the stock-based compensation expense of approximately
$0.5 million and an increase of approximately $0.8 million in staff
bonus and approximately $0.5 million in Internet expenses partially
offset by reduced consulting fees.
Sales and Marketing Expenses. Sales and marketing expenses consisted of
salary and payroll tax expenses of marketing personnel and costs
relating to marketing materials, promotional videos, advertising,
tradeshow-related expense and public relation activities. Total
marketing expenses for the year ended December 31, 2009 were $4,663,183
as compared to $2,272,516 for the year ended December 31, 2008. The
increase of $2,390,667, or 105%, was primarily due to the stock-based
compensation expense of approximately $1.2 million and an increase of
approximately $0.3 million in staff bonus and salaries and
approximately of $0.9 million in consulting expenses.
Other Income/Expenses. Other income for the year ended December 31,
2009 totaled $383,669 as compared to $9,656 for the year ended December
31, 2008. The other income of $383,669 was mainly due to net late
payment charge income of approximately $189,000 and foreign currency
transaction gains of $332,251 in this year compared to gains of
$161,574 in 2008.
Net Income. Net income for the year ended December 31, 2009 was
$7,568,719 as compared to $10,575,285 for the year ended December 31,
2008. The decrease of $3,006,566 was primarily due to stock-based
compensation expense of $2,385,500, bad debt expense of $2,636,979, and
income tax benefit of $1,060,000 in this year compared to income tax
benefit of $106,870 in 2008. The basic and diluted net income per share
for the year ended December 31, 2009 was $0.15 compared to the basic
and diluted net income per share for the year ended December 31, 2008
of $0.23 and $0.22, respectively.
Income from Operations and Net Income Excluding Stock-Based
Compensation Expense and Debt Discounts on DetachedWarrants Issued with
Convertible Promissory Note. For the years ended December 31, 2009 and
2008, our income from operations was $6,125,050 and $10,458,759
respectively, and our net income was $7,568,719 and $10,575,285,
respectively, which includes the effects of stock-based compensation
expense for stock options, and the effects of interest expense arising
from the accretion of discount on convertible notes. Excluding the
income statement effects of stock-based compensation expense and
interest expense arising from the accretion of discount on convertible
notes, our non-GAAP income from operations would have been $8,510,550
in 2009 and $10,458,759 in 2008 and our non-GAAP net income would have
been $9,954,219 in 2009 and $10,626,158 in 2008.
Eberhard Schoneburg, CEO of Artificial Life, Inc., said:
‘2009 was again a very positive year for Artificial Life despite the
global financial crisis that has hit many of our clients and affected
most of our key competitors negatively. We managed to remain profitable
with a solid 28% net profit margin and grew 22% in terms of revenues
even though we deferred an additional $4.8 million in revenues and
respective potential profits to 2010. We improved our accounts
receivables situation by collecting substantial amount of cash in Q4
2009 and Q1 2010, and by utilizing working capital strategies to offset
receivables and payables with certain customers and licensors and to
acquire licenses while minimizing cash outflow and cash usage. We have
benefited from a liquidity perspective and reduced our credit risk and
exposure.
We also invested heavily in new products and technologies in 2009 to
further strengthen our technological advantage and leading position in
the mobile content space for the years to come. We more than doubled
our investments in new technologies and products with over $22 million
in 2009, as compared to $10 million invested in 2008. Most of these
investments were dedicated to our new OPUS-M(TM) platform, our
tele-medicine platform and mobile diabetes application Mobil Diab(R),
and our new and very powerful augmented reality technology. We expect
to see substantial growth and new business in all these areas in the
coming months and years.’
(iPod is a trademark of Apple Inc., registered in the US and other
countries. iPhone is a trademark of Apple Inc. App Store is a service
mark of Apple Inc.)
About Artificial Life, Inc.
Artificial Life, Inc. has been a pioneer in artificial intelligence and
mobile technology since its inception in Boston in 1994. We are a
public US corporation (OTCBB:ALIF) with headquarters in Los Angeles.
Our production center is in Hong Kong and we have additional offices in
Berlin, Germany (EMEA headquarters) and Tokyo, Japan. As a leading
provider of broadband mobile content and technology solutions in the
world, we develop and sell a wide range of mobile applications for 3G,
3.5G and 4G network-enabled mobile (smart) phones. Currently our main
business areas are: high quality 3D interactive multi- and single-
player mobile games, mobile participation television (MoPA-TV(TM)),
mobile business applications (Mobil Diab(R) and Mobile Property) and
our mobile commerce technology platform (OPUS-M(TM)). We are supporting
all major mobile phone operating systems and platforms such as J2ME,
iPhone and iPod touch OS, Android, Brew and DoJa. Recognized
internationally for outstanding content quality and technology we have
received many international awards and have been ranked one of the
fastest growing companies in Asia Pacific by Deloitte. For more
information about Artificial Life, Inc., please visit our websites
www.artificial-life.com or www.botme.com
The Artificial Life logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=1669
Facebook: http://www.botme.com/ref/alife-fb
Twitter:http://twitter.com/alifegames
MySpace:http://www.myspace.com/artificial_life_inc
Youtube:http://www.youtube.com/user/alifegames
Artificial Life, Inc.
Consolidated Statements of Income and Comprehensive Income
(Audited)
For the Years Ended December 31, 2009 and 2008
2009 2008
————- ————-
Revenues:
Software license agreements $ 27,427,016 $ 21,659,786
Reseller license agreement — 778,800
Application services and other 27,458 15,828
————- ————-
27,454,474 22,454,414
————- ————-
Cost of revenues:
Cost of software license
agreements 5,177,417 3,076,181
Cost of application services and
other 131,655 128,409
————- ————-
5,309,072 3,204,590
————- ————-
Gross profit 22,145,402 19,249,824
————- ————-
Operating expenses:
General and administrative 6,426,674 3,268,260
Research and development 4,930,495 3,250,289
Sales and marketing 4,663,183 2,272,516
————- ————-
Total operating expenses 16,020,352 8,791,065
————- ————-
Income from operations 6,125,050 10,458,759
————- ————-
Other income (expenses):
Interest income and other 189,832 25,152
Interest expense (138,414) (225,197)
Gain on extinguishment of
liabilities — 48,127
Foreign currency transaction
gains 332,251 161,574
————- ————-
383,669 9,656
————- ————-
Income before income tax 6,508,719 10,468,415
Income tax benefit 1,060,000 106,870
————- ————-
Net income 7,568,719 10,575,285
Foreign currency translation
adjustment 194,832 (95,974)
————- ————-
Comprehensive income $ 7,763,551 $ 10,479,311
============= =============
Net income per share:
Basic $ 0.15 $ 0.23
============= =============
Diluted $ 0.15 $ 0.22
============= =============
Weighted average shares
outstanding:
Basic 50,554,592 46,420,825
============= =============
Diluted 50,745,210 47,879,856
============= =============
Artificial Life, Inc.
Consolidated Balance Sheets (Audited)
December 31, 2009 and 2008
December 31, December 31,
2009 2008
————- ————-
ASSETS
Current assets:
Cash $ 2,356,336 $ 1,430,578
Trade accounts receivable, net 9,498,896 13,859,315
Trade installment receivable, net 8,473,270 —
Prepaid expenses and other 473,166 914,372
Deferred tax asset 1,000,000 500,000
————- ————-
Total current assets 21,801,668 16,704,265
————- ————-
Fixed assets, net 1,575,531 3,140,067
————- ————-
License rights, net 26,421,105 9,617,198
Prepaid expenses, deposits and
other assets 1,325,702 828,943
Deferred tax asset 710,000 —
————- ————-
28,456,807 10,446,141
————- ————-
TOTAL ASSETS $ 51,834,006 $ 30,290,473
============= =============
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable $ 2,297,854 $ 669,745
Accrued expenses and other 737,128 472,813
Income tax payable 17,394 60,000
Note payable —
officer/stockholder 1,606,328 737,771
Notes payable — stockholders 666,667 1,000,000
————- ————-
Total liabilities (all current) 5,325,371 2,940,329
————- ————-
Stockholders’ equity:
Preferred stock, $.01 par value;
5,000,000 shares authorized, no
shares issued and outstanding — —
Common stock, $.01 par value;
130,000,000 shares authorized,
57,411,203 (2009) and 47,724,132
(2008) shares issued and
outstanding 574,111 477,241
Additional paid-in capital 63,006,782 51,708,712
Notes receivable from
stockholders (19,577) (19,577)
Accumulated deficit (17,117,425) (24,686,144)
Accumulated other comprehensive
income (loss) 64,744 (130,088)
————- ————-
Total stockholders’ equity 46,508,635 27,350,144
————- ————-
TOTAL LIABILITIES AND
STOCKHOLDERS’ EQUITY $ 51,834,006 $ 30,290,473
============= =============
Artificial Life, Inc.
Consolidated Statements of Cash Flows (Audited)
For the Years Ended December 31, 2009 and 2008
2009 2008
————- ————-
Cash flows from operating
activities:
Net income $ 7,568,719 $ 10,575,285
Adjustments to reconcile net
income to net cash (used in)
provided by operating activities:
Depreciation and amortization 6,016,049 2,182,652
Write down of fixed assets and
license rights 826,053 263,566
Amortization of discount on notes
payable — 99,000
Bad and doubtful debt expenses 2,636,979 731,500
Foreign currency exchange gains (332,251) (161,574)
Deferred income tax expense
(benefit) (1,210,000) (166,870)
Interest expense accrued on
advances from officer /
stockholder 3,185 7,727
Stock-based compensation expense 2,385,500 —
Gain on extinguishment of
liabilities — (48,127)
Salary / bonus accrued to officer
/ stockholder 837,257 320,361
Discount on trade receivable 347,961 —
Changes in operating assets and
liabilities:
Increase in trade accounts and
installment receivables (21,834,921) (9,245,652)
Increase in prepaid expenses,
deposits and other assets (53,228) (649,420)
Increase (decrease) in accounts
payable 375,470 (57,245)
Increase (decrease) in accrued
expenses and other 262,504 (639,604)
(Decrease) increase in income
tax payable (42,606) 60,000
————- ————-
Net cash (used in) provided by
operating activities (2,213,329) 3,271,599
————- ————-
Cash flows from investing
activities:
Purchase of fixed assets (30,127) (3,060,783)
Purchase of license rights (4,994,029) (10,012,608)
————- ————-
Net cash used in investing
activities (5,024,156) (13,073,391)
————- ————-
Cash flows from financing
activities:
Net proceeds from issuance of
common stock and warrants 8,600,590 5,278,502
Advances under note payable to
officer/stockholder 202,257 —
Repayment of note payable to
officer/stockholder (174,142) (342,176)
Repayment of note payable to
stockholders (333,333) —
————- ————-
Net cash provided by financing
activities 8,295,372 4,936,326
————- ————-
Net increase (decrease) in cash 1,057,887 (4,865,466)
Cash at beginning of period 1,430,578 6,210,435
Effect of exchange rate changes on
cash (132,129) 85,609
————- ————-
Cash at end of period $ 2,356,336 $ 1,430,578
============= =============
Forward-Looking Statements:
This press release contains ‘forward-looking statements’ within the
meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. Such
forward-looking statements include, without limitation, statements
regarding our future results of operations, financial condition and
business prospects. In some cases, you can identify forward-looking
statements by terminology such as ‘may,’ ‘will,’ ’should,’ ‘expect,’
‘intend,’ ‘plan,’ ‘anticipate,’ ‘believe,’ ‘estimate,’ ‘predict,’
‘potential,’ ‘continue’ or the negative of these terms or other
comparable terminology. Although such statements are based on our own
information and information from other sources we believe to be
reliable, you should not place undue reliance on them. These statements
involve risks and uncertainties, and actual market trends or our actual
results of operations, financial condition or business prospects may
differ materially from those expressed or implied in these
forward-looking statements for a variety of reasons. Potential risks
and uncertainties include, but are not limited to, our ability to
obtain additional funding to operate and grow our business; the
unproven potential of our mobile gaming business model; changing
consumer preferences and uncertainty of market acceptance of our
products; timely adoption and availability of 3G mobile technology;
market acceptance for use of mobile handheld devices to play the
interactive games; unpredictable mobile game development schedules; our
reliance on a relatively small number of brands; our ability to license
brands from others; our dependence upon resellers and telecommunication
carriers and operators to distribute our products; our ability to
successfully develop, introduce, and sell new or enhanced products in a
timely manner; and the timing of new product announcements or
introductions by us or by our competitors. For additional discussion of
these risks and uncertainties and other factors, please see the
documents we file from time to time with the Securities and Exchange
Commission, including our Annual Report on Form 10-KSB filed on March
16, 2010. We assume no obligation to update any forward-looking
statements, which apply only as of the date of this press release.
CONTACT: Artificial Life, Inc.
IR Contact:
Celine Hadaya
(+852) 3102 2800
ir@artificial-life.com
PR Contact:
Annie Lau
(+852) 3102 2800
pr@artificial-life.com
News Source: NASDAQ OMX
16.03.2010 13:00 Ad hoc announcement, Financial News and Media Release distributed by DGAP. Medienarchiv at
www.dgap-medientreff.de
and
www.dgap.de
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Language: English
Company: Artificial Life, Inc.
United States
Phone:
Fax:
E-mail:
Internet:
ISIN: US04314Q1058
WKN:
End of News DGAP News-Service
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