Webzen Inc. Non-consolidated Balance Sheet
SEOUL, South Korea, Dec. 21 /Xinhua-PRNewswire-FirstCall/ --
Webzen Inc.
Non-consolidated Balance Sheet
(* The FY 2006 Interim financials have been prepared on an unaudited
basis, and may be subject to change during the independent auditing
process
* The FY 2006 Interim financial statements are non-consolidated, and
have been prepared under the Korean General Accepted Accounting
Principles)
As of
31-Dec-05 31-Mar-06 30-Jun-06
KRW KRW KRW
Assets
I. Current
Assets 134,032,699,865 123,250,603,960 113,313,978,464
(1) Quick Assets 134,032,699,865 123,250,603,960 113,313,978,464
Cash and cash
equivalents 118,107,261,444 105,363,808,336 77,604,345,858
Short-term
financial
instruments 2,270,052,194 1,309,060,525 21,949,376,458
Accounts
receivable,
net. 4,364,944,214 4,466,009,611 4,720,401,212
Short-term loans 1,188,773,620 1,071,528,740 1,013,968,080
Accrued income
receivable 123,611,466 150,949,677 86,659,730
Non-trade receivable 48,180,328 743,888,984 20,920,717
Marketable
securities 4,812,410,603 6,447,830,088 2,372,063,336
Advance payments 236,773,361 1,068,608,839 1,223,618,070
Prepaid income taxes 706,861,305 142,483,720 314,947,780
Value added taxes -- -- 329,559,206
Prepaid expenses 270,442,755 514,203,679 526,109,706
Other current assets -- -- --
Deferred income
tax debits 1,903,388,575 1,972,231,761 3,152,008,311
(2) Inventory -- -- --
1. Goods -- -- --
II. Fixed Assets 57,645,050,070 61,994,079,523 65,334,557,328
(1) Investments 34,296,263,543 38,407,472,371 40,891,582,266
Long-term financial
instruments -- -- --
Long-term loans 1,059,131,500 1,034,250,800 2,399,925,490
Investments in
securities
according to
equity method 6,046,614,750 4,856,720,305 3,190,383,925
Available-for-
sale securities 535,665,682 535,665,682 535,665,682
Long-term prepaid
expenses 7,247,951,381 10,873,578,930 12,311,572,050
Guarantee deposits 17,523,707,705 17,613,467,705 17,703,467,705
Long-term Deferred
Income Tax debits 1,883,192,525 3,493,788,949 4,750,567,414
(2) PP&E 11,806,355,288 12,159,980,245 12,572,286,502
Land 2,611,544,500 2,611,544,500 2,611,544,500
Buildings and
auxiliary
facilities 5,756,150,904 5,717,753,907 5,679,356,910
Equipment 3,017,003,089 3,331,438,040 3,721,058,846
Facilities 421,656,795 499,243,798 560,326,246
(3) Intangible assets 11,542,431,239 11,426,626,907 11,870,688,560
Organization expenses -- -- --
Software 4,323,065,415 4,172,336,319 3,961,803,910
Goodwill -- -- --
Capitalized R&D
costs 7,219,365,824 7,254,290,588 7,908,884,650
Other intangible
assets -- -- --
Total assets 191,677,749,935 185,244,683,483 178,648,535,792
I. Current
Liabilities 8,610,099,605 8,909,970,200 11,700,824,161
Accounts Payable 2,037,638,581 2,025,869,895 4,898,973,470
Accrued expenses 849,909,423 813,260,349 1,348,127,915
Accrued income taxes -- -- --
Withholdings 242,146,687 472,464,095 248,276,905
Deposits received 871,875,000 871,875,000 871,875,000
Withhold Value
added tax 1,507,437 8,571,666 --
Advances received 95,018,396 106,250,696 100,953,176
Unearned revenues 4,172,407,865 4,167,136,621 3,776,344,528
Provision for
sales promotion 251,796,216 258,783,068 253,233,996
Provision for
other estimated
liabilities 87,800,000 185,758,810 203,039,171
II. Fixed Liabilities 4,115,591,495 4,421,751,813 4,840,683,043
Accrued severance
benefits 3,912,843,444 4,255,331,707 4,758,488,528
Long-term
unearned income 192,748,051 156,420,106 72,194,515
Long Term
Deferred Income
Tax Credits -- -- --
Long-term accounts
payable 10,000,000 10,000,000 10,000,000
Total Liabilities 12,725,691,100 13,331,722,013 16,541,507,204
I. Capital Stock 6,485,000,000 6,485,000,000 6,485,500,000
Common stock 6,485,000,000 6,485,000,000 6,485,500,000
II. Capital
Surplus 135,405,721,645 135,436,087,227 135,436,087,227
Additional
paid-in capital 135,405,721,645 135,436,087,227 135,436,087,227
III. Retained
Earnings 54,045,173,788 47,959,620,351 39,161,687,531
Legal appropriated
retained earnings 322,500,000 322,500,000 322,500,000
Appropriated-
Reserve for
business
rationalization 117,904,363 117,904,363 117,904,363
Appropriated-
Reserve for
future investments 442,699,142 442,699,142 442,699,142
Unappropriated
retained
earnings to be
carried forward 53,162,070,283 47,076,516,846 38,278,584,026
IV. Capital
adjustments (16,983,836,598) (17,968,246,108) (18,976,246,170)
Capital
Adjustment-
Unrealized
gains on AFS 287,070,348 216,635,418 130,673,638
Capital
Adjustment-
Unrealized
losses on AFS -- (2,415,660) --
Treasury Stock (16,865,799,640) (17,634,086,540) (18,307,830,040)
Stock option 474,087,134 513,924,979 639,786,799
Loss on
investments in
equity method
securities (879,194,440) (1,049,630,205) (1,426,202,467)
Gains on sale of
treasury stock -- (12,674,100) (12,674,100)
Total shareholders'
equity 178,952,058,835 171,912,961,470 162,107,028,588
Total liabilities
and SE 191,677,749,935 185,244,683,483 178,648,535,792
Webzen Inc.
Non-consolidated Income Statement
(* The FY 2006 Interim financials have been prepared on an unaudited
basis, and may be subject to change during the independent auditing
process
* The FY 2006 Interim financial statements are non-consolidated, and
have been prepared under the Korean General Accepted Accounting
Principles)
Six months
Three months ended ended
31-Mar-06 30-Jun-06 30-Jun-06
KRW KRW KRW
I. Sales 5,182,005,433 6,367,970,478 11,549,975,911
Online game 4,353,300,999 4,591,389,994 8,944,690,993
Royalty 828,704,434 1,776,580,484 2,605,284,918
Merchandise -- -- --
II. Cost of goods sold 2,539,453,906 2,835,791,830 5,375,245,736
Online game 2,539,453,906 2,835,791,830 5,375,245,736
Merchandise -- -- --
III. Gross profit 2,642,551,527 3,532,178,648 6,174,730,175
IV. Selling, general and
administrative 9,009,645,183 14,471,086,443 23,480,731,626
Salaries expenses 1,974,607,644 1,886,818,021 3,861,425,665
Severance benefits 167,519,555 220,113,075 387,632,630
Welfare benefits 220,703,863 256,325,586 477,029,449
Travel expenses 154,366,215 177,666,868 332,033,083
Entertainment expenses 77,760,371 131,271,921 209,032,292
Communication expense 74,480,368 40,579,949 115,060,317
Utility expenses 28,194,651 19,557,027 47,751,678
Taxes and dues 101,232,661 81,290,869 182,523,530
Depreciation 129,223,788 148,866,959 278,090,747
Rental expense 72,550,233 59,500,542 132,050,775
Repairs expenses -- 3,900,000 3,900,000
Insurance premium 47,005,520 51,611,780 98,617,300
Vehicle maintenance expenses 18,958,856 16,379,090 35,337,946
rdinary research and
development expenses 3,904,121,855 4,490,717,823 8,394,839,678
Freight expenses 9,228,409 4,877,214 14,105,623
Training expenses 32,930,007 23,040,054 55,970,061
Publication expenses 7,960,141 9,388,631 17,348,772
Office supplies expenses 3,316,768 1,839,568 5,156,336
Supplies expenses 21,983,163 22,122,625 44,105,788
Commissions paid 863,343,197 982,212,908 1,845,556,105
Advertising expenses 772,279,783 5,285,174,867 6,057,454,650
Bad debt expenses 45,168,867 240,353,578 285,522,443
Sales commissions 194,350,392 187,348,165 381,698,557
Amortization cost of
intangible assets 41,192,998 38,878,256 80,071,254
Sample expenses -- -- --
Compensation expenses assoc.
W/ stock options 47,165,878 91,251,069 138,416,947
V. Operating profit (6,367,093,656) (10,938,907,795) (17,306,001,451)
VI. Non-operating income 1,101,782,478 1,432,002,269 2,320,411,437
Interest income 1,011,347,645 1,033,311,304 2,044,658,949
Gains on foreign currency
transaction 747,582 9,874,585 10,622,167
Income from commission 19,500,000 17,000,000 36,500,000
Gains on foreign currency
translation 619,675 42,956,912 4,458,781
Gains on valuation of forward
currency contracts -- -- --
Gains on disposition of PPE 276,648 298,000 574,648
Equity income on investments -- 174,255,504 --
Gains on available for sale
securities 68,355,679 142,760,802 211,116,481
Gains on forward currency
transactions -- -- --
Reversal of Compensation Exp.
associated with SO -- -- --
Miscellaneous income 935,249 11,545,162 12,480,411
VII. Non-operating
expenses 2,107,787,301 1,884,546,566 3,778,960,557
Losses on foreign currency
transaction 173,086,868 74,747,986 247,834,854
Donations -- -- --
Losses on foreign currency
translation 85,117,086 29,556,032 75,555,312
Loss on disposal of tangible
assets -- 7,284,087 7,284,087
Losses on forward currency
transactions -- -- --
Losses on disposal of
available-for-sale securities -- 390,000 390,000
Losses on valuation of
intangible assets -- -- --
Miscellaneous losses 36,012,275 4,563,052 40,575,327
Losses on valuation of
forward currency contracts -- -- --
Additional Payment of Income
Taxes -- -- --
Losses on disposition of PPE -- -- --
Equity losses on
investments 1,813,571,072 1,768,005,409 3,407,320,977
VIII. Profit before
extraordinary
items (7,373,098,479) (11,391,452,092)(18,764,550,571)
IX. Extraordinary gains -- -- --
X. Extraordinary losses -- -- --
XI. Income before
income tax expenses (7,373,098,479) (11,391,452,092)(18,764,550,571)
XII. Income tax expenses (1,515,812,111) (2,593,519,272) (4,109,331,383)
XIII. Net income (loss) (5,857,286,368) (8,797,932,820)(14,655,219,188)
2006 Second Quarter Results Summary
Revenues
Revenue for second quarter ended June 30, 2006 was KRW 6.4 billion,
representing a 23% increase from first quarter of 2006. This increase was
primarily due to the stabilization of our game MU in Korea and the increase
of overseas royalty revenue related to the commercialization of MU in
Vietnam and US. Overseas revenue increased more than the domestic revenue.
Domestic revenue increased 6% to 4.6 billion KRW. And this resulted from
the stabilization of MU since 4th quarter of 2005. Overseas revenue
increased 115% to 1.8 billion KRW, due to the revenue from the
commercialization of MU in Vietnam and the US. Other revenue which is
related with mobile revenue decreased 36% from 1st quarter. Currently,
domestic and overseas revenue consist of 72% and 28% respectively of the
total revenue. Among the domestic revenue, individual subscription revenue
increased 8% to 3.4 billion KRW, and internet cafe revenue was 1.1billion
KRW, which was similar to last quarter. Overseas revenue increased 115%
QoQ. Regionally, Philippines increased by a large percentage, recording 120
million KRW. China and Japan showed a 4% decrease and recorded 59 million
KRW and 487 million KRW respectively. Revenue from Vietnam and the US was
generated from the commercial launch of MU during April. We recognized 345
million and 511 million KRW respectively. Overseas revenue has shown a sign
of stabilization and the commercial launch of MU in Vietnam and US are
expected to contribute to the stabilization.
Operating Expenses
Total operating expenses increased 50% to KRW 17.3 billion due to the E3
game show expense and SUN open beta marketing expense. Labor costs was KRW
6.7 billion which increased 3.7% from previous quarter. Labor costs account
for 38% of total operating costs. Depreciation increased 30% to KRW 755
million related to the addition of new servers for the new service of games.
Commission paid increased 77% from previous quarter due to the increase of
agency business fee and outsourcing fee, and was KRW 1.9 billion. Marketing
expenses increased 584% to 5.2 billion KRW. The increase was due to the E3
Game Expo and marketing related to our new game SUN. Sales Commission
decreased 3% due to the decrease of internet cafe revenue to 187 million
KRW. Other costs were KRW 2.5 billion and was similar to previous quarter.
We recognized a negative KRW 453 million non-operating income during 2nd
quarter. Interest income increased 2%.As of end of 2nd quarter, cash and
cash equivalents, including marketable securities was KRW 101.9 billion. KRW
9.9 billion decreased from previous quarter. (end of Q1: KRW 111.8 billion)
We experienced a KRW 1.6 billion loss in equity method. We recognized an
equity gain in Webzen China due to the profit related to a service contract
for Kingdom of Warriors. Webzen America's equity loss increased due to the
adjustment (write-off) of deferred income tax.
Private Securities Litigation Reform Act Safe Harbor Statement
Except for the historical and present factual information contained
herein, the matters set forth in this press release, including statements as
to the expected benefits of the commercialization, and other statements
identified by words such as "expects," "projects," "plans," and similar
expressions are forward-looking statements within the meaning of the "safe
harbor" provisions of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements are subject to risks and uncertainties that
may cause actual results to differ materially, including the possibility
that the anticipated benefits from the commercial launch may be fully
realized, the impact of competition and other risk factors relating to our
industry as detailed from time to time in each of Webzen Inc.'s reports
filed with the SEC. Webzen Inc. disclaims any responsibility to update
these forward-looking statements.
Contacts:
Sung Ho Lee
Webzen Inc.
Investor Relations
Tel: +82-2-3498-6818
Daelim Acrotel Building, 6th Floor
467-6 Dogok-dong, Kangnam-Ku,
Seoul, Korea 135-971
