BEIJING, March 8 /Xinhua-PRNewswire/ -- Hurray! Holding Co., Ltd.
(Nasdaq: HRAY), a leader in wireless music distribution and other wireless
value-added services, artist development and music production, and wireless
value-added services management software in China, today announced its
unaudited financial results for the fourth quarter and fiscal year ended
December 31, 2006.
FINANCIAL HIGHLIGHTS:
Highlights for Fourth Quarter 2006
* Total revenues: $17.0 million, decline of 5.6% quarter-over-quarter and
growth of 6.3% year-over-year, meeting previous guidance of $17.0
million to $18.0 million
* Wireless value-added services revenues: $15.1 million, decline of 7.8%
quarter-over-quarter and growth of 11.5% year-over-year
* Software and system integration services revenues: $0.1 million, decline
of 11.9% quarter-over-quarter and decline of 93.1% year-over-year
* Recorded music revenues, which are from our record label businesses:
$1.8 million, growth of 18.7% quarter-over-quarter
* Net income: $1.6 million, decline of 2.7% quarter-over-quarter and
decline of 47.8% year-over-year
* Adjusted EBITDA (a non-GAAP measure which is defined as earnings before
interest, tax, depreciation, amortization and stock-based compensation):
$1.4 million, decline of 32.1% quarter-over-quarter and decline of 48.1%
year-over-year
* Diluted earnings per ADS: $0.07
Highlights for Fiscal Year 2006
* Total revenues: $70.1 million, growth of 10.7% as compared with $63.4
million for 2005
* 2.5G services revenues: $29.9 million, decline of 16.7% as compared with
$35.9 million for 2005
* 2G services revenues: $32.6 million, growth of 61.8% as compared with
$20.1 million for 2005
* Software and system integration services revenues: $1.4 million, decline
of 80.7% as compared with $7.3 million for 2005
* Recorded music revenues, which represent the full year contribution from
our new record label businesses we entered this year: $6.2 million
* Net income: $5.8 million, decline of 68.8% as compared with $18.6
million for 2005
* Adjusted EBITDA (a non-GAAP measure which is defined as earnings before
interest, tax, depreciation, amortization and stock-based compensation):
$7.4 million, decline of 62.1% as compared with $19.6 million for 2005
* Diluted earnings per ADS: $0.26
Commenting on the fourth quarter results, QD Wang, Chairman and CEO of
Hurray! stated: "We are pleased to report a solid quarter which meets our
previous estimate despite renewed deterioration in our operating environment
during December. Going forward, we will continue our strategy of developing
proprietary contents and diversifying distribution channels, while
transforming ourselves into a leading entertainment content production and
distribution house in China."
BUSINESS RESULTS
Total revenues for the fourth quarter ended December 31, 2006 were $17.0
million, representing a 5.6% decrease from $18.0 million for the preceding
quarter, and a 6.3% increase from $16.0 million for the fourth quarter in
2005.
Total revenues for fiscal year 2006 were $70.1 million, representing a
10.7% increase from $63.4 million for fiscal year 2005.
Total wireless value-added services revenues were $15.1 million for the
fourth quarter of 2006, a decline of 7.8% as compared with $16.4 million in
the previous quarter and growth of 3.7% as compared with $14.6 million in the
fourth quarter of 2005.
2.5G services revenues were $6.5 million for the fourth quarter of 2006,
representing a decline of 11.8% as compared with $7.4 million for the previous
quarter and a decline of 23.5% as compared with $8.5 million for the fourth
quarter of 2005.
Of 2.5G services, WAP revenues were $5.1 million, a decline of 2.0% as
compared with $5.2 million in the previous quarter and a decline of 31.1% as
compared with $7.4 million in the fourth quarter 2005. The decline of WAP
revenues in the quarter was a result of new regulations implemented in the
quarter mandating free trial periods and double reminders for subscription
based services.
MMS revenues were $0.6 million, a decline of 24.0% as compared with $0.8
million in previous quarter and 45.5% as compared with $1.1 million in the
fourth quarter of 2005. The decline of MMS revenues in the quarter was a
result of the same regulations that impacted our WAP revenues.
Java(TM) revenues were $0.7 million for the fourth quarter 2006,
representing a decline of 51.0% as compared with $1.4 million in the previous
quarter. We acquired Shanghai Magma at the beginning of the year and have
consolidated its operations since first quarter 2006.
2G services revenues were $8.6 million for the fourth quarter of 2006,
representing decline of 4.5% as compared to $9.0 million for the previous
quarter and a growth of 41.6% as compared to $6.1 million for the fourth
quarter of 2005.
Of 2G services, SMS revenues were $5.3 million for the fourth quarter of
2006, representing a decline of 2.7% as compared with $5.5 million in the
previous quarter and an increase of 89.3% as compared with $2.8 million in the
fourth quarter of 2005. The annual increase in SMS revenues was due to our
increased direct media advertising efforts commenced earlier.
IVR revenues were $2.3 million for the fourth quarter of 2006, a decline
of 12.6% as compared with $2.6 million for the previous quarter and a decline
of 12.6% as compared with $2.6 million for the fourth quarter of 2005.
RBT revenues were $1.0 million for the fourth quarter 2006, representing
growth of 6.2% as compared with $0.9 million in the previous quarter, and
growth of 42.9% as compared with $0.7 million for the fourth quarter of 2005.
Total wireless value-added services revenues for fiscal year 2006 were
$62.5 million, an increase of 11.5% as compared with $56.1 million in fiscal
year 2005.
2.5G services revenues were $29.9 million for fiscal year 2006,
representing a decline of 16.7% as compared with $35.9 million for fiscal year
2005.
Of 2.5G services, WAP revenues were $21.4 million, a decline of 37.4% as
compared with $34.2 million in fiscal year 2005.
MMS revenues were $4.0 million, an increase of 135.3% as compared with
$1.7 million for fiscal year 2005.
Java(TM) revenues were $4.2 million, predominantly from our acquisition of
Shanghai Magma at the beginning of the year, as compared with nil 2005.
2G services revenues were $32.6 million for fiscal year 2006, representing
growth of 61.8% as compared to $20.1 million for the previous year.
Of 2G services, SMS revenues were $18.4 million for fiscal year 2006,
representing an increase of 72.7% as compared with $10.6 million for fiscal
year 2005.
IVR revenues were $10.8 million for fiscal year 2006, as compared with
$8.5 million for the previous year.
RBT revenues were $3.4 million for fiscal year 2006, as compared with $1.0
million in fiscal year 2005.
Software and system integration services revenues were $0.1 million for
the fourth quarter of 2006, representing a decline of 11.9% as compared with
$0.1 million for the previous quarter and a decrease of 93.1% as compared with
$1.4 million for the fourth quarter of 2005.
For fiscal year 2006, software and system integration services revenues
were $1.4 million, a decline of 80.7% from $7.3 million for fiscal year 2005.
Recorded music revenues, which represent revenues of our controlled music
companies Hurray! Freeland Music and Huayi Brothers Music, were $1.8 million,
an increase of 18.7% as compared with $1.5 million in the previous quarter.
The growth of recorded music revenues in the fourth quarter is due to new
releases by our two music label companies in the quarter.
Total recorded music revenues for fiscal year 2006 were $6.2 million, as
compared with nil in 2005.
Total gross margin was 31.2% for the fourth quarter of 2006 as compared
with 37.6% for the previous quarter and 41.5% for the fourth quarter of 2005.
For fiscal year 2006, total gross margin was 35.6% as compared with 52.7%
for fiscal year 2005.
Gross margin for wireless value-added services was 31.9% for the fourth
quarter of 2006, as compared with 36.9% in the previous quarter and 36.8% for
the fourth quarter of 2005.
Gross margin for 2.5G services was 41.8% for the fourth quarter of 2006,
as compared to 48.2% for the previous quarter and 56.3% for the fourth quarter
of 2005. The decrease in 2.5G gross margin was due to an increase in content
and promotion costs.
Gross margin for 2G services was 24.4% for the fourth quarter of 2006, as
compared to 27.7% for the previous quarter and 9.6% for the fourth quarter of
2005. The quarterly decrease in 2G gross margin was due to an increase in
direct media advertising cost.
Gross margin for wireless value-added services was 34.9% for fiscal year
2006 as compared with 48.9% for fiscal year 2005.
Gross margin for 2.5G services was 46.4% for fiscal year 2006 as compared
with 58.5% for fiscal year 2005 due to the decrease of revenue and increase in
higher cost associated with marketing promotions.
Gross margin for 2G services was 24.4% for fiscal year 2006 as compared
with 31.9% for the fiscal year 2005 due to the increased direct media
advertising cost.
Software and system integration services gross margin was -109.9% for the
fourth quarter of 2006, as compared to 39.5% for the previous quarter and
88.9% for the fourth quarter of 2005.
Gross margin for software and system integration services was 32.8% for
fiscal year 2006 as compared with 82.1% for the fiscal year 2005.
Recorded music gross margin was 33.6% for the fourth quarter of 2006 as
compared to 45.1% in the previous quarter, reflecting increased costs
associated with new releases.
Recorded music gross margin was 42.7% for fiscal year 2006.
Total gross profit was $5.3 million for the fourth quarter of 2006,
representing a decline of 21.6% as compared with $6.8 million for the previous
quarter and a decline of 19.9% as compared with $6.6 million for the fourth
quarter of 2005.
For fiscal year 2006, total gross profit was $25.0 million, a decline of
25.3% as compared with $33.4 million for fiscal 2005.
Total operating expenses were $4.7 million for the fourth quarter of 2006,
representing a decline of 14.8% as compared to $5.6 million for the previous
quarter and an increase of 8.5% as compared to $4.4 million for the fourth
quarter of 2005. The decrease in operating expenses quarter-to-quarter is
mostly due to our cost optimization program implemented in the second and
third quarters of 2006; the increase year over year is mainly due to the
expenses of the newly acquired music companies.
For fiscal year 2006, total operating expenses were $21.0 million, an
increase of 32.8% as compared with $15.8 million for the fiscal 2005.
Interest income for the fourth quarter of 2006 was $0.6 million as
compared to $0.7 million in the previous quarter. Income tax was a credit of
$0.6 million in the fourth quarter 2006 compared to $0.2 million in the fourth
quarter of 2005 mainly as result of the reversal of previously accrued tax as
one of our companies qualified for preferential tax rates.
For fiscal 2006, interest income was $2.6 million as compared with $1.4
million in 2005, principally resulting from higher interest rates, and income
tax expense was $0.1 million compared to $0.4 million in 2005.
Net income was $1.6 million for the fourth quarter of 2006, representing a
decrease of 2.7% as compared to $1.6 million for the previous quarter, and a
decrease of 47.8% as compared to $3.0 million for the fourth quarter of 2005.
Net margin was 9.2% for the fourth quarter of 2006 as compared to 8.9% for the
previous quarter and 18.7% for the fourth quarter of 2005.
For the fiscal 2006, net income was $5.8 million, a decline of 68.8% as
compared with $18.6 million for the fiscal 2005. Net margin was 8.3% for the
year, as compared with 29.4% for the fiscal 2005.
Adjusted earnings before interest, tax, depreciation, amortization and
stock-based compensation (adjusted EBITDA), was $1.4 million for the quarter,
a decline of 32.1% as compared with $2.1 million in the previous quarter and a
decline of 48.1% as compared with $2.8 million in the fourth quarter of 2005.
Reconciliations of net income under U.S. generally accepted accounting
principles (GAAP) and adjusted EBITDA are included at the end of this release.
Adjusted earnings before interest, tax, depreciation, amortization and
stock-based compensation (adjusted EBITDA), was $7.4 million for fiscal year
2006, a decline of 62.1% as compared with $19.6 million in the previous year.
Fully diluted earnings per ADS were $0.07 based on a weighted average of
21.7 million diluted ADSs for the fourth quarter of 2006. This figure compares
to $0.07 based on a weighted average of 21.7 million diluted ADSs for the
previous quarter and $0.13 based on a weighted average of 22.4 million diluted
ADSs for the fourth quarter of 2005.
Fully diluted earnings per ADS were $0.26 based on a weighted average of
22.1 million diluted ADSs for fiscal year 2006. This figure compares with
$0.87 based on a weighted average of 21.2 million diluted ADSs for fiscal
2005.
As of December 31, 2006, the company had outstanding 21.5 million basic
ADSs and 21.7 million fully diluted ADSs, excluding share options granted
above the average market value of Hurray! stock for the quarter as their
effect would have been anti-dilutive.
As of December 31, 2006, the company had $74.6 million in cash and cash
equivalents.
The following tables compare key operating data for the company's wireless
value added services business for the fourth quarter 2006 and fourth quarter
2005:
Fourth quarter 2006 revenue breakdown by operator and by service platform:
China China China China
Unit: $ million Mobile Unicom Telecom Netcom Total
SMS $3.9 $1.4 $- $- $5.3
IVR 1.3 0.4 0.5 0.1 2.3
RBT 0.5 0.4 0.1 - 1.0
2G Revenues 5.7 2.2 0.6 0.1 8.6
WAP 2.7 2.4 - - 5.1
MMS 0.3 0.3 - - 0.6
Java 0.8 - - - 0.8
2.5G revenues 3.8 2.7 - - 6.5
Total $9.5 $4.9 $0.6 $0.1 $15.1
Fourth quarter 2005 revenue breakdown by operator and by service platform:
China China China China
Unit: $ million Mobile Unicom Telecom Netcom Total
SMS $0.9 $1.9 $- $- $2.8
IVR 1.1 0.8 0.5 0.2 2.6
RBT 0.5 0.2 - - 0.7
2G Revenues 2.5 2.9 0.5 0.2 6.1
WAP 2.9 4.5 - - 7.4
MMS 1.1 - - - 1.1
Java - - - - -
2.5G revenues 4.0 4.5 - - 8.5
Total $6.5 $7.4 $0.5 $0.2 $14.6
Fourth quarter 2006 revenue contribution % by operator and by service
platform:
China China China China
Mobile Unicom Telecom Netcom Total
SMS 73.1% 25.6% 0.4% 0.9% 100.0%
IVR 54.9 18.3 22.4 4.4 100.0
RBT 54.3 39.1 6.2 0.4 100.0
2G Revenues 66.1 25.2 6.9 1.8 100.0
WAP 52.4 47.6 - - 100.0
MMS 49.4 50.6 - - 100.0
Java 99.6 0.4 - - 100.0
2.5G revenues 58.2 41.8 - - 100.0
Total 62.7% 32.3% 4.0% 1.0% 100.0%
Fourth quarter 2005 revenue contribution % by operator and by service
platform:
China China China China
Mobile Unicom Telecom Netcom Total
SMS 32.1% 67.9% -% -% 100.0%
IVR 42.3 30.8 19.2 7.7 100.0
RBT 71.4 28.6 - - 100.0
2GRevenues 41.0 47.5 8.2 3.3 100.0
WAP 39.2 60.8 - - 100.0
MMS 100.0 - - - 100.0
Java 100.0 - - - 100.0
2.5Grevenues 47.1 52.9 - - 100.0
Total 44.5% 50.7% 3.4% 1.4% 100.0%
BUSINESS HIGHLIGHTS
Hurray! continued executing its strategy of developing proprietary
contents and diversifying distribution channels, with the following
highlights:
* Hurray! released a series of new songs, including:
- "Love and Respect" (Wan Zhong Ai Dai) by Edell of Hurray! Freeland
Music
- "Mai Dou" by Shao Yuhan of Hurray! Freeland Music
- "What I mean in Your Eyes" (Wo Dao Di Suan Shen Me) by Pan Xiaofeng
of Hurray! Freeland Music
- "The One" by Jane Zhang of Huayi Brothers Music
- "Hard to be friends" (Peng You Nan Dang) by Yu Quan of Huayi
Brothers Music
- "Shinning Shinning" by Zhou Xun of Huayi Brothers Music
* Hurray! signed up a number of new and top tier artists, including:
- Yang Kun, a famous singer in China, which produced hit songs "Never
Mind" (Wu Suo Wei) and "Moon Represent My Heart" (Yue Liang Dai Biao
Wo De Xin) by Huayi Brothers Music.
- Lin Xinru, a famous TV star and singer in Taiwan, by Huayi Brothers
Music
- Su Youpeng, a famous singer and TV star in Taiwan, by Huayi Brothers
Music
* Hurray! launched 20 new titles on China Mobile's game portal, including:
- "Sword of Fairy"
- "Visional Hubble-bubble"
- "Magma Millionaire in Shanghai"
- "Legend of Seal"
- "Ru Lai Shen Zhang"
* Hurray! launched successful marketing programs to promote the new
releases simultaneously over Internet and wireless platforms.
Consequently, "QQ Love", "What I Mean in Your Eyes", "Keep Loving" and
"Wings" became popular hits in the fourth quarter and ranked top 10 for
many consecutive weeks in the second quarter on both China Mobile's
music portal and Baidu's music search platform.
* Music and game related revenues, representing revenues from our recorded
music and our wireless value-added services with music and game content,
were about 44% or $7.5 million of total revenues for the quarter. This
compares to 40% or $6.5 million in the fourth quarter of 2005.
* Wireless value-added services revenues generated from operator-
independent marketing, promotion and distribution such as direct media
advertising, interactive media programs, Internet marketing alliances,
and handset vendor partnerships reached approximately 33%, or $5
million, of total wireless value-added services revenues. This compares
to 22% or $3.2 million in the year ago quarter.
"Despite the challenging wireless services operating environment, we
remain committed to our transformation strategies and confident about our long
term prospect," commented Mr. Wang.
Business Outlook
For first quarter 2007, Hurray! expects its total consolidated revenues to
be between $15.0 and $16.0 million, reflecting impact of tightened enforcement
of policy and regulation changes previously announced by MII and mobile
operators.
Note to the Financial Information
The financial information in this press release has been extracted from
the financial information prepared using the recognition and the measurement
basis of accounting principles generally accepted in the United States of
America.
Conference Call
The company will host a conference call to discuss the third quarter
results at
Time: 9:00 pm Eastern Standard Time on March 7, 2007
or 10:00 am Beijing/Hong Kong Time on March 8, 2007
The dial-in number: 800-884-5695 (US)
617-786-2960 (international)
Password: 86492786
A replay of the call will be available from March 7, 2007 until March 14,
2007 as follows:
888-286-8010 (US)
617-801-6888 (international)
PIN number: 32801076
Additionally, a live and archived web cast of this call will be available
at: http://phx.corporate-ir.net/playerlink.zhtml?c=187793&s=wm&e=1464167
or http://www.hurray.com/english/home.htm
About Hurray! Holding Co., Ltd.
Hurray! is a leading provider of music and music-related products such as
ringtones, ringbacktones, and truetones to mobile users in China through SMS,
IVR, RBT, WAP, MMS and Java wireless value-added services platforms over
mobile networks and through the Internet. The company also provides a wide
range of other wireless value-added services to mobile users in China,
including games, pictures and animation, community, and other media and
entertainment services.
In addition, Hurray! is a leader in artist development, music production
and offline and online distribution in China through its majority-controlled
record labels Huayi Brothers Music and Hurray! Freeland Music.
Hurray! also designs, develops, sells and supports a service provisioning
and management software for mobile operators in China to manage wireless
value-added services.
Forward-looking Statements
This press release contains statements of a forward-looking nature. These
statements are made under the "safe harbor" provisions of the U.S. Private
Securities Litigation Reform Act of 1995. You can identify these forward-
looking statements by terminology such as "will," "expects," "believes" and
similar statements. The accuracy of these statements may be impacted by a
number of business risks and uncertainties that could cause actual results to
differ materially from those projected or anticipated, including risks related
to: continued competitive pressures in China's wireless value-added services
market; changes in technology and consumer demand in this market; the risk
that Hurray! may not be able to control its expenses in future periods;
Hurray!'s ability to succeed in the music development, production and
distribution business, with which it has only limited experience; changes in
the policies of the mobile operators in China or the laws governing wireless
value-added services; the state of Hurray!'s relationships with China's mobile
operators and the risk that Hurray! may be subject to further sanctions and
penalties from them in future periods; and other risks outlined in Hurray!'s
filings with the Securities and Exchange Commission, including its
registration statement on Form F-1, as amended. Hurray! does not undertake any
obligation to update this forward-looking information, except as required
under applicable law.
Hurray! Holding Co., Ltd.
Unaudited Condensed Consolidated Balance Sheets
As of December As of December
31, 2006 31, 2005(1)
(Unaudited)
(in thousands of U.S. dollars)
Assets
Current assets:
Cash and cash equivalents $74,597 $75,959
Accounts receivable 13,178 18,089
Note receivable 272 -
Prepaid expenses and other current assets 2,701 1,859
Amount due from related parties 167 -
Inventories 178 437
Total current assets 91,093 96,344
Deposits and other non-current assets 632 1,502
Property and equipment, net 1,954 2,536
Acquired intangible assets, net 6,023 3,312
Goodwill 39,622 23,026
Non-current deferred tax assets - 140
Total assets $139,324 $126,860
Liabilities and shareholders' equity
Current liabilities:
Accounts payable $3,681 $3,731
Acquisition payable 5,832 154
Accrued expenses and other
current liabilities 2,613 3,210
Amount due to a related party - 202
Income tax payable 489 90
Deferred tax liability 530 248
Total current liabilities 13,145 7,635
Minority interests 3,359 605
Shareholders' equity:
Ordinary shares 108 111
Additional paid-in capital 73,608 77,336
Retained earnings 45,705 39,899
Accumulated other comprehensive income 3,399 1,274
Total shareholders' equity 122,820 118,620
Total liabilities and shareholders' equity $139,324 $126,860
(1) December 31, 2005 balances were extracted from audited financial
statements.
Hurray! Holding Co., Ltd.
Unaudited Condensed Consolidated Statements of Operations
For the three months ended For the twelve months ended
December 31, December 31, December 31, December 31,
2006 2005 2006 2005(1)
(in thousands of U.S. (in thousands of U.S.
dollars, except share dollars, except share
and per share data) and per share data)
Revenues:
2G services $8,608 $6,078 $32,570 $20,131
2.5G services 6,498 8,496 29,941 35,932
Software and system
integration services 98 1,424 1,407 7,293
Recorded music 1,805 - 6,204 -
Total revenues 17,009 15,998 70,122 63,356
Cost of revenues:
2G services 6,508 5,492 24,615 13,714
2.5G services 3,784 3,715 16,057 14,921
Software and system
integration services 206 158 946 1,302
Recorded music 1,199 - 3,553 -
Total cost of
revenues 11,697 9,365 45,171 29,937
Gross profit 5,312 6,633 24,951 33,419
Operating expenses:
Product development 698 697 2,602 2,537
Selling and
marketing 2,751 2,791 11,921 9,797
General and
administrative 1,286 875 6,472 3,474
Total operating
expenses 4,735 4,363 20,995 15,808
Income from
operations 577 2,270 3,956 17,611
Interest expense 45 - 45 27
Interest income 587 553 2,576 1,428
Income tax expense (564) (174) 121 393
Minority interests (117) - (562) -
Net income $1,566 $2,997 $5,804 $18,619
Earnings per
share, basic $0.0007 $0.0014 $0.0027 $0.0089
Earnings per
ADS, basic $0.07 $0.14 $0.27 $0.89
Earnings per
share, diluted $0.0007 $0.0013 $0.0026 $0.0087
Earnings per
ADS, diluted $0.07 $0.13 $0.26 $0.87
Shares used in
calculating
basic
earnings
per share 2,152,282,170 2,219,045,975 2,189,748,563 2,092,089,848
ADSs used in
calculating
basic
earnings
per ADS 21,522,822 22,190,460 21,897,486 20,920,898
Shares used in
calculating
diluted
earnings
per share 2,171,571,924 2,243,429,037 2,208,758,636 2,129,228,961
ADSs used in
calculating
diluted
earnings
per ADS 21,715,719 22,434,290 22,087,586 21,292,290
(1) December 31, 2005 balances were extracted from the audited financial
statements.
The use of non-GAAP financial measures:
To supplement its consolidated financial statements presented in
accordance with generally accepted accounting principles ("GAAP") in the
United States, Hurray! uses non-GAAP measures of operating results and net
income, including in this press release earnings before interest, taxes,
depreciation and amortization, and before stock-based compensation expense
("adjusted EBITDA"), which are adjusted from results based on GAAP to exclude
certain expenses. Hurray!'s management believes the use of these non-GAAP
financial measures provide useful information to both management and investors
by excluding certain expenses that are not related to the Company's
operations. These non-GAAP financial measures also facilitate management's
internal comparisons to Hurray!'s historical performance and our competitors'
operating results. Hurray! believes these non-GAAP financial measures are
useful to investors in allowing for greater transparency with respect to
supplemental information used by management in its financial and operational
decision making. The presentation of this additional financial information is
not intended to be considered in isolation or as a substitute for the
financial information prepared and presented in accordance with GAAP. Please
see below financial table for a reconciliation of adjusted EBITDA.
Reconciliation of net income under GAAP to adjusted EBITDA for the
following periods:
For the three months ended For the twelve months ended
December 31, December 31, December 31, December 31,
2006 2005 2006 2005(1)
(in thousands of U.S. (in thousands of U.S.
dollars, except share dollars, except share
and per share data) and per share data)
Net income $1,566 $ 2,997 $5,804 $18,619
Add:
Interest expense 45 - 45 27
Income tax expense (564) (174) 121 393
Depreciation and
amortization 825 493 3,481 1,939
Non-cash stock
compensation
expense 158 17 545 38
Less:
Interest income 587 553 2,576 1,428
Adjusted EBITDA $1,443 $2,780 $7,420 $19,588
(1) December 31, 2005 balances were extracted from the audited financial
statements.
For more information, please contact:
Phoebe Meng
Investor Relations Manager
Tel: 8610-84555566 x5532
yfmeng@hurray.com.cn
