XI’AN, China, Aug. 15 /Xinhua-PRNewswire-FirstCall/ -- Along Mobile Technologies Inc. (OTC Bulletin Board: AGMB) ("Along", "the Company"), a leading mobile value-added services ("MVAS") provider in The People’s Republic of China ("PRC"), today reported record financial results for the second quarter ended on June 30, 2007.
Second quarter 2007 Highlights
-- Revenue reached $2.65 million, up 132% from the second quarter of 2006
-- Gross profits doubled to $1.94 million from the second quarter of 2006
-- Operating income totalled $1.21 million, up 179% from the second quarter
of 2006
-- Net income was up 200% to $1.38 million, or $0.02 per share, from the
second quarter of 2006
"We saw strong growth in our wireless application sales as we benefited from the strong economic momentum and increasing demand for mobile entertainment in China," said Mr. Jianwei Lee, CEO of the Company, "In addition we made an important progress in the execution of our strategy as we expanded our distribution channels and reached agreements with key OEMs to pre-load our games to new mobile devices."
Second quarter 2007 Results
Net revenue for the second quarter was $2.65 million, an increase of 132% year-over-year, driven by the expansion of our proprietary distribution channels and the increasing acceptance of our wireless applications. All of our sales for the quarter were derived from our wireless applications segment, as we divested the hardware business. Gross profit for the second quarter was $1.94 million, up 100% from the comparable period in 2006. Gross margin for the second quarter of 2007 was 73.1%, compared to 84.1% in the second quarter of 2006.
Operating expenses came in at $723,538 for the second quarter of 2007, a 37.3% increase from the $526,920 recorded in the second quarter of 2006. The increase was primarily due to higher selling and distribution fees, as well as general and administrative expenses to support the growth of the business.
Operating profits were up 179.2% to $1,215,884 with operating margin registering 45.8% for the second quarter of 2007 compared with approximately $435,423 and 38.1% in the second quarter of 2006, respectively. Operating margin expansion resulted from improving economies of scale as well as strong cost controls.
Other income reached $278,038, which is mainly due to the sale of our property in Xi’an software garden.
Along recorded tax expenses of $111,231 in the second quarter of 2007 compared to zero in the comparable period of 2006, as its tax exemption period ended.
Net income for the second quarter of 2007 was $1,383,691 or $0.02 per basic and diluted share, an increase of 211% and 233% from $445,425 and $0.006 per share respectively for the comparable period of 2006.
First Half 2007 Results
Revenue for the six months ended June 30, 2007 increased 121.2% over the comparable period in 2006 to $5.40 million. Gross profits were up 95.9% in the same period to $4.0 million, with gross margin coming in at 74.4%. Operating expenses in the first half of 2007 increased 42.6% to $1.3 million as a result of our overall growth as well as our expansion related administrative expenses. Operating profits in the first half of 2007 were up 139.7% over the comparable period in 2006 to $2.7 million, with operating margins coming in at 50%. Net income for the six months ended June 30, 2007 were $2.8 million or $0.04 per basic and diluted shares, an increase of 140% and 138% respectively. Cash flow from operations for the six months ended June 30, 2007 totalled $2,254,812, compared to $1,415,116 in the comparable period in 2006. Capital expenditures in the first half of 2007 totalled $3.95 million, most of which was incurred to purchase more downloading terminals to expand our distribution network in eastern part of China.
Financial Condition
At June 30, 2007, Along had $5.0 million in total cash and short-term investments, approximately $6.5 million in working capital. Shareholder’s equity and the end of the second quarter stood at $16.7 million, a 23% increase over the $13.6 million recorded at the end of 2006.
Business Outlook
The outlook for the mobile entertainment service demand in China remains very positive as a large part of China’s 420 million mobile users need affordable and convenient entertainment. The company continues to invest in research and development to strengthen its product portfolio, including Mobile Phone Online Game and multifunction downloading terminals. Along is also planning to further expand its market in eastern part of China. Analysts forecast the number of mobile subscribers in China to reach 600 million by 2010, an annual growth rate of 10% over 420 million in June of 2007. As a result the Company expects to see sustained and rapid growth in demand for mobile entertainment service in China over the next several years. Near term, revenues are expected to benefit from the summer holidays in July and August, when students generally spend more in entertainment.
"We expect the second half of 2007 to be better than the first half, as we improve and expand our terminal network, gain economies of scale and continue to launch new applications and to expand our business in Eastern China," said Mr. Jianwei Lee, CEO of the Company. "As a result we estimate our revenues will reach approximately $12 million and net income $6.5 million to $7.2 million for the full fiscal year 2007."
Conference Call
Along will hold its second quarter conference call for all interested persons at 10:00 a.m. Eastern Time on August 16, 2007 to discuss its results. To participate in the live conference call, please dial 1-888-481-7939 five to ten minutes prior to the scheduled conference call time. International callers should dial 1-617-847-8707. When prompted by the operator, mention Conference Passcode 54281171. If you are unable to participate in the call at this time, a replay will be available for seven days starting on Thursday, August 16 at 12:00 p.m. Eastern Time. To access the replay, dial 1-888-286-8010, international callers dial 1-617-801-6888, and enter the passcode 69340492.
About Along Mobile Technologies:
Incorporated in the State of Nevada, Along Mobile Technologies Inc. is a Chinese based mobile value-added services ("MVAS") provider of wireless interactive entertainment products and services in the People’s Republic of China (the "PRC" or "China"). Along has two subsidiaries, Shaanxi Jialong Hi-Tech Industries Co. Ltd was founded in the People’s Republic of China (PRC) in 2002 and is currently headquartered in Shaanxi Province, PRC and Main Glory Holdings Limited was incorporated in Hong Kong on July 13, 2005 and is headquartered there. Ring-tones, games, images, videos and e-books are amongst the Wireless Applications which Along designs, produces, publishes, manufacturers, provides and distributes. Additionally, Along designs, produces and distributes portable digital communication products such as MP3, MP4 and PMP’s ("Communication Products"). These products together with mobile communication devices manufactured and/or distributed by unaffiliated third party manufacturers and distributors, may also be used in conjunction with the Company’s proprietary Wireless Applications.
Safe Harbor Statement
This announcement contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact in this announcement are forward-looking statements, including but not limited to, the Company’s ability to raise additional capital to finance the Company’s activities; the effectiveness, profitability, and the marketability of its products; legal and regulatory risks associated with the share exchange; the future trading of the common stock of the Company; the ability of the Company to operate as a public company; the period of time for which its current liquidity will enable the Company to fund its operations; the Company’s ability to protect its proprietary information; general economic and business conditions; the volatility of the Company’s operating results and financial condition; the Company’s ability to attract or retain qualified senior management personnel and research and development staff; and other risks detailed in the Company’s filings with the Securities and Exchange Commission. These forward-looking statements involve known and unknown risks and uncertainties and are based on current expectations, assumptions, estimates and projections about the Company and the industry. The Company undertakes no obligation to update forward-looking statements to reflect subsequent occurring events or circumstances, or to changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward looking statements are reasonable, they cannot assure you that their expectations will turn out to be correct, and investors are cautioned that actual results may differ materially from the anticipated results.
Along Mobile Technologies, Inc. and Subsidiaries
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(US$ - Unaudited)
Three months ended June 30, Six months ended June 30,
(Unaudited) (Unaudited)
2007 2006 2007 2006
Revenues $2,652,506 $1,144,327 $5,397,186 $2,440,486
Cost of revenues (713,084) (181,984) (1,383,225) (391,747)
Gross profit 1,939,422 962,343 4,013,961 2,048,739
Operating expenses
Selling and
distribution 284,052 193,362 534,883 377,181
General and
administrative 406,206 284,875 718,460 466,678
Professional fees 5,000 23,000 10,000 30,000
Depreciation 28,280 25,683 52,989 49,533
Total expenses 723,538 526,920 1,316,332 923,392
Operating income 1,215,884 435,423 2,697,629 1,125,347
Interest income 1,000 1,002 2,258 21,921
Other income 278,038 9,000 300,557 9,000
Income before
income taxes 1,494,922 445,425 3,000,444 1,156,268
Income taxes
(Note 4) (111,231) -- (224,520) --
Net income $1,383,691 $445,425 $2,775,924 $1,156,268
Earnings per share
- Basic and
diluted (Note 5) $0.020 $0.006 $0.039 $0.017
Weighted
average
number of
common
stock
outstanding 70,600,000 70,000,000 70,600,000 70,000,000
Along Mobile Technologies, Inc. and Subsidiaries
CONSOLIDATED CONDENSED BALANCE SHEET
(US$)
June 30, December 31,
2007 2006
(Unaudited) (Audited)
ASSETS
Current Assets
Cash and cash equivalents $5,008,581 $6,561,239
Accounts receivable (net of allowance
for doubtful accounts
of $386 in 2007, $382 in 2006) 58,954 64,076
Inventories (Note 7) 54,677 32,421
Deposits paid (Note 8) 3,606,652 2,750,240
Prepayment 25,574 --
Other receivables 57,281 35,319
Total Current Assets 8,811,719 9,443,295
Property and equipment, net (Note 9) 8,172,977 4,186,065
Intangible assets, net (Note 10) 2,073,932 2,119,030
TOTAL ASSETS $19,058,628 $15,748,390
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Accounts payable $10,997 $10,726
Receipt in advance -- 31,903
Deposits received 459,028 447,713
Other payables and accrued
liabilities (Note 11) 717,574 752,729
Value added tax payable 721,336 788,602
Other taxes payable 210,114 163,546
Income tax payable 227,617 --
TOTAL LIABILITIES 2,346,666 2,195,219
COMMITMENTS AND CONTINGENCIES (NOTE
12)
STOCKHOLDERS’ EQUITY
Common stock: par value of $0.001 per
share 70,600 70,600
Authorized 200,000,000 shares in 2007
and 2006; issued and
outstanding 70,600,000 shares in 2007
and 2006
Additional paid-in capital 8,045,085 8,045,085
Retained earnings 6,365,157 3,949,214
Statutory and other reserves 1,405,155 1,045,174
Accumulated other comprehensive
income 825,965 443,098
TOTAL STOCKHOLDERS’ EQUITY 16,711,962 13,553,171
TOTAL LIABILITIES AND STOCKHOLDERS’
EQUITY $19,058,628 $15,748,390
Along Mobile Technologies, Inc. and Subsidiaries
CASH FLOW STATEMENT
(US$ - Unaudited)
Six months ended June 30,
(Unaudited)
2007 2006
Cash flows from operating activities
Net income $2,775,924 $1,156,268
Adjustments to reconcile net income
to net cash provided by operating
activities:
Allowance for doubtful accounts -- 62,614
In-kind contribution -- 8,438
Amortization on intangible assets 97,309 62,500
Depreciation on property and
equipment 376,882 49,533
Gain on disposal of property and
equipment (255,278) --
Changes in operating assets and
liabilities
Accounts receivable 6,649 85,285
Inventories (21,145) 18,864
Deposits paid (776,198) --
Prepayment (25,226) --
Other receivables (20,782) (348,891)
Accounts payable -- 104
Receipt in advance (32,261) --
Other payables and accrued
liabilities (51,430) 406,740
Value added tax payable (86,010) (97,243)
Other taxes payable 41,858 10,904
Income tax payable 224,520 --
Net cash flows provided by operating
activities 2,254,812 1,415,116
Cash flows from investing activities
Decrease in note receivable -- 1,237,624
Purchase of property and equipment (6,019,768) (137,500)
Proceeds from disposal of property
and equipment 2,069,860 --
Net cash flows (used in) provided by
investing activities (3,949,908) 1,100,124
Effect of foreign currency
translation on cash and cash
equivalents 142,438 67,922
Net (decrease) increase in cash and
cash equivalents (1,552,658) 2,583,162
Cash and cash equivalents, beginning
of period 6,561,239 6,476,651
Cash and cash equivalents, end of
period $5,008,581 $9,059,813
Supplemental cash flow information
Interest paid $-- $--
Income taxes paid $-- $--
For more information, please contact:
Along Mobile Technologies Inc.
Michael Wang
CFO
Tel: +86-29-8836-0097
Fax: +86-29-8836-0090
Email: michaelwang@alonggame.com
Web: http://www.alongmobile.com
CCG Elite Investor Relations
Crocker Coulson
President
Tel: +1-646-213-1915
Email: crocker.coulson@ccgir.com
Ed Job
CFA
Tel: +1-646-213-1914
