Revenues Increased 137% Year-over-year to $3.44 Million
XI’AN CITY, China, Nov. 12 /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 third quarter ended on September 30, 2007.
Third Quarter 2007 Highlights
-- Revenues increased 137% year-over-year to a record $3.44 million
-- Gross profits increased 89.8% to $2.43 million over the third quarter
of 2006
-- Operating income totaled $1.57 million, up 111% over the third quarter
of 2006
-- Net income was up 91.8% year-over-year to $1.48 million, or $0.02 per
share
“During the quarter we continued to see strong demand for our wireless applications driven by continued growth in mobile subscribers in China as well as rising penetration of mobile data services within the existing mobile subscriber base,” said Mr. Jianwei Li, CEO of ALONG, “In addition, we have taken advantage of the favorable industry environment to launch new applications and to expand our distribution network, with the recently installed downloading terminals in Anhui Province already contributing to our revenue growth for the quarter.”
Third Quarter 2007 Results
Net revenue for the third quarter was $3.44 million, an increase of 137% year-over-year, driven by the expansion of the Company’s Mobile Information & Entertainment Service Platform ("MIESP") proprietary distribution network and the increasing acceptance of its wireless applications.
Gross profit for the third quarter was $2.43 million, up 89.8% from the comparable period in 2006. Gross margin for the third quarter of 2007 was 70.6%, compared to 88.1% in the third quarter of 2006. The decrease of gross margin was mainly due to the increased depreciation of network downloading terminals and rental expenses for information stations.
Operating expenses came in at $857,739 for the third quarter of 2007, a 60.8% increase from the $533,256 recorded in the third 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 111% to $1.57 million with operating margin registering 45.7% for the third quarter of 2007 compared with approximately $746,332 and 51.4% in the third quarter of 2006, respectively.
ALONG recorded tax expenses of $121,020 in the third quarter of 2007 compared to zero in the comparable period of 2006, as its tax exemption period ended.
Net income for the third quarter of 2007 was $1,475,184 or $0.02 per basic and diluted share, an increase of 91.8% and 90.8% from $768,984 and $0.01 per share respectively for the comparable period of 2006.
Nine Months Results
Revenue for the first nine months of 2007 increased 127% over the comparable period in 2006 to $8.84 million. Gross profits were up 93.6% in the same period to $6.44 million, with gross margin coming in at 72.9%. Operating expenses in the first nine months of 2007 increased 49.3% to $2.17 million as a result of our overall growth as well as our expansion related administrative expenses. Operating profits in the first nine months of 2007 were up 128% over the comparable period in 2006 to $4.27 million, with operating margins coming in at 48.3%. Net income for the nine months ended September 30, 2007 were $4.25 million or $0.06 per basic and diluted shares, with both increase of 120%. Cash flow from operations for the nine months ended September 30, 2007 totaled $3,122,277, compared to $308,260 in the comparable period in 2006. Capital expenditures in the first nine months of 2007 totaled $6.31 million, most of which was incurred to purchase downloading terminals to expand our distribution network in the eastern part of China.
Financial Condition
As of September 30, 2007, ALONG had $5.69 million in total cash and short-term investments, approximately $8.19 million in working capital. Shareholder’s equity at the end of the third quarter stood at $18.44 million, a 36% increase over the $13.55 million recorded at the end of 2006.
Business Outlook
The outlook for the mobile value added service industry in China remains very positive, driven by the large and growing subscriber base, the imminent roll-out of advanced high-speed mobile data networks and the increasing availability of data enabled handsets at affordable price points. China is currently the world’s largest mobile phone market, with 523 million subscribers as of September 2007, which is expected to grow to 600 million subscribers by 2010. To better meet the increasing demand mobile value added services in China ALONG intends to continue its internal research and development efforts to strengthen its product portfolio, including its Mobile Phone Online Game offering. The Company is also committed to developing partnerships with content developers to complement its in-house efforts and to expanding its multifunctional downloading terminal network eastward. In addition, the Company will also evaluate opportunities to accelerate its profitable growth through acquisitions that can broaden its geographic footprint and enhance its product portfolio.
For 2007, ALONG expects to generate net revenue of $12.0 million with income from operations expected to be in the range of $6.0 to $6.5 million. Net revenue for 2008 is expected to reach $25.0 million and income from operations is expected to be in the range of $11.0 to $12.0 million. Revenue and profit growth will be driven by the continued expansion of the Mobile Information & Entertainment Service Platform in eastern parts of China as well as the continued expansion of its product portfolio.
"We are very pleased with our progress in expanding our terminal network in Eastern China as well as with the increasing acceptance and recognition of our applications and our brand,” said Mr. Jianwei Li, CEO of ALONG. "During the quarter we were also pleased and honored to win the Golden Feather Award and we hold this recognition as a testament to ALONG’s strong competitive position in the emerging and very promising 3G mobile games space."
Conference Call
ALONG will hold its third quarter conference call for all interested persons at 9:00 a.m. Eastern Time on November 13, 2007 to discuss its results. To participate in the live conference call, please dial 1-888-339-2688 five to ten minutes prior to the scheduled conference call time. International callers should dial 1-617-847-3007. When prompted by the operator, mention Conference Passcode 91227141. If you are unable to participate in the call at this time, a replay will be available for seven days starting on Tuesday, November 13 at 11:00 a.m. Eastern Time. To access the replay, dial 1-888-286-8010, international callers dial 1-617-801-6888, and enter the passcode 44304660.
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.
--FINANCIAL TABLES FOLLOW--
ALONG Mobile Technologies, Inc. and Subsidiaries
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(US$ - Unaudited)
Three months ended Nine months ended
September 30 September 30
2007 2006 2007 2006
Revenues $3,440,583 $1,453,036 $8,837,769 $3,893,522
Cost of revenues 1,011,578 173,448 2,394,803 565,195
Gross profit 2,429,005 1,279,588 6,442,966 3,328,327
Operating expenses
Selling and
distribution 492,867 260,019 1,027,750 637,200
General and
administrative 331,311 193,515 1,049,771 660,193
Professional fees 5,000 48,997 15,000 78,997
Depreciation 28,561 30,725 81,550 80,258
Total expenses 857,739 533,256 2,174,071 1,456,648
Operating income 1,571,266 746,332 4,268,895 1,871,679
Interest income 16 777 2,274 22,698
Other income 24,922 21,875 325,479 30,875
Income before income
taxes 1,596,204 768,984 4,596,648 1,925,252
Income taxes 121,020 -- 345,540 --
Net income $1,475,184 $768,984 $4,251,108 $1,925,252
Earnings per share
- Basic and diluted $0.02 $0.01 $0.06 $0.03
Weighted average number
of common stock
outstanding 70,600,000 70,221,739 70,600,000 70,074,725
ALONG Mobile Technologies, Inc. and Subsidiaries
CONSOLIDATED CONDENSED BALANCE SHEET
(US$)
September 30, December 31,
2007 2006
(Unaudited) (Audited)
ASSETS
Current Assets
Cash and cash equivalents $5,692,395 $6,561,239
Accounts receivable (net of allowance for doubtful
accounts of $386 in 2007, $382 in 2006) 59,795 64,076
Inventories 63,371 32,421
Deposits paid 3,658,082 2,750,240
Prepayments and other receivables 139,351 35,319
Total Current Assets 9,612,994 9,443,295
Property and equipment, net 8,192,286 4,186,065
Intangible assets, net 2,053,477 2,119,030
TOTAL ASSETS
$19,858,757 $15,748,390
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Accounts payable $11,153 $10,726
Receipt in advance 3 31,903
Deposits received 465,574 447,713
Other payables and accrued liabilities 700,945 752,729
Value added tax payable -- 788,602
Other taxes payable 121,072 163,546
Income tax payable 121,946 --
TOTAL LIABILITIES 1,420,693 2,195,219
COMMITMENTS AND CONTINGENCIES
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 7,690,496 3,949,214
Statutory and other reserves 1,555,000 1,045,174
Accumulated other comprehensive income 1,076,883 443,098
TOTAL STOCKHOLDERS’ EQUITY 18,438,064 13,553,171
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $19,858,757 $15,748,390
ALONG Mobile Technologies, Inc. and Subsidiaries
CASH FLOW STATEMENT
(US$ - Unaudited)
Nine months ended
September 30
(Unaudited)
2007 2006
Cash flows from operating activities
Net income $4,251,108 $1,925,252
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 146,995 101,631
Depreciation on property and equipment 724,916 80,258
Gain on disposal of property and equipment (257,082) --
Changes in operating assets and liabilities
Accounts receivable 6,696 47,211
Inventories (29,046) 22,719
Deposits paid (781,682) --
Prepayment and other receivables (90,792)(2,362,774)
Accounts payable -- 104
Receipt in advance (32,489) --
Other payables and accrued liabilities (74,912) 418,305
Value added tax payable (812,881) 4,502
Other taxes payable (47,988) --
Income tax payable 119,434 --
Net cash flows provided by operating activities 3,122,277 308,260
Cash flows from investing activities
Decrease in note receivable -- 1,237,624
Purchase of property and equipment (6,312,435)(1,987,500)
Proceeds from disposal of property and
equipment 2,084,484 (625,000)
Net cash flows used in investing activities (4,227,951)(1,374,876)
Financing activities
Dividend paid -- (309,406)
Net cash used in financing activities -- (309,406)
Effect of foreign currency translation on cash and
cash equivalents 236,830 64,828
Net decrease in cash and cash equivalents (868,844)(1,311,194)
Cash and cash equivalents, beginning of period 6,561,239 6,476,651
Cash and cash equivalents, end of period $5,692,395 $5,165,457
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
