NQ Mobile Inc. Reports Unaudited Financial Results for the Third Quarter of 2016

Mittwoch, 30.11.2016 23:05 von

PR Newswire

BEIJING, Nov. 30, 2016 /PRNewswire/ -- NQ Mobile Inc. (NYSE: NQ) ("NQ Mobile" or the "Company"), a leading global provider of mobile internet services, today announced its unaudited financial results for the third quarter ended September 30, 2016.

Highlights for Third Quarter 2016

  • Quarterly Net Revenues of $91.1 million, a 3.6% year-over-year increase from the same period in 2015. Excluding NationSky from the comparable period, net revenues increased 38.1% year-over-year from the same period in 2015.
  • Mobile Value Added Services (MVAS) revenues reached a record level of $54.9 million, a 74.6% year-over-year increase from the same period in 2015.
  • GAAP operating loss for the third quarter of 2016 was $3.3 million compared to GAAP operating income of $0.2 million in the same period a year ago.  GAAP Net Loss before non-controlling interest for the third quarter of 2016 was $2.8 million compared to $2.4 million in the same period a year ago. GAAP Net Loss attributable to NQ Mobile for the third quarter of 2016 was $9.0 million or $0.09 per fully diluted ADS after deducting $6.3 million in net income attributable to non-controlling interest primarily due to the FL Mobile Divestment, compared to $2.5 million in the same period a year ago.
  • Non-GAAP operating income for the third quarter of 2016 was $3.4 million, representing a 3.7% non-GAAP operating margin compared to $1.3 million in the same period a year ago. Non-GAAP Net Loss attributable to NQ Mobile for the third quarter of 2016 was $0.2 million or $0.00 per fully diluted ADS, compared to non-GAAP net income attributable to NQ Mobile of $0.6 million in the same period a year ago. 

Operating Metrics as of September 30, 2016

Average Monthly Active User Accounts as of September 30, 2016: 142.9 million.

"We are pleased with the continuing advancement of our mobile entertainment businesses." said Mr. Zemin Xu the Chief Executive Officer of NQ Mobile. "As we enter the final quarter of 2016, we are focused on executing our plans."

"We were able to achieve some key financial goals during the third quarter including the closing of a major financing and repayment of the outstanding CB." Said Mr. Roland Wu, Chief Financial Officer of NQ Mobile. "We are pleased to have Zhongzhi as a new institutional investor.  We are working to finish this year on a strong fundamental note and position ourselves for 2017."

Third Quarter 2016 Results

Revenues

Net revenues in the third quarter of 2016 increased 3.6% year-over-year to $91.1 million from $87.9 million in the same period in 2015. Excluding NationSky from the comparable period, net revenues increased 38.1% year-over-year from the same period in 2015.

Mobile value added service revenues increased 74.6% year-over-year to $54.9 million from $31.5 million in the same period in 2015. The increase in mobile value added service revenues was primarily attributable to the growth in live mobile social video platform revenue growth and mobile gaming revenue growth which represented 82.2% and 26.6% of the total year-over-year growth respectively.  The strong growth in live mobile social video revenues and mobile gaming revenues was partially offset by a year-over-year decrease in consumer mobile security revenues.  The significant increase in live mobile social video platform revenues was primarily driven by the rapid growth of Showself's two new applications.  The overall Showself business in our live video platforms was up 172.7% compared to the same period in 2015. The increase in mobile gaming revenues was primarily the result of the growth of FL Mobile's domestic business driven by a new game which we launched at the end of the second quarter, as well as the consolidation of Hetu, a subsidiary.  FL Mobile's revenues grew 36.7% compared with the same period in 2015. 

Advertising revenues increased 72.2% year-over-year to $27.5 million from $16.0 million in the same period in 2015. The increase was mainly due to the continued expansion of advertising networks and the consolidation of Launcher, a business we obtained control of and consolidated at the end of the Q1 2016.  

Enterprise mobility revenues decreased 78.3% year-over-year to $8.5 million from $39.1 million in the same period in 2015. This decrease is mainly due to the divestment of NationSky which no longer contributed to the results beginning in the first quarter of 2016. Excluding NationSky from the comparable period, enterprise mobility revenues decreased 50.4% year-over-year from the same period in 2015 as the Company focuses less on hardware procurement overall.

Other revenues decreased 86.5% year-over-year to $0.2 million from $1.4 million in the same period in 2015. Other revenues are generated primarily by providing technical contract services to third parties and fluctuate as such business is driven by individual projects.

Cost of Revenues

Cost of revenues in the third quarter of 2016 increased 4.5% year-over-year to $70.3 million from $67.2 million in the same period in 2015.  Excluding NationSky from the comparable period, cost of revenues increased 35.9% year-over-year from the same period in 2015. The year-over-year increase was mainly due to higher revenue sharing and user acquisition costs corresponding to higher revenue growth in the mobile game and live mobile social video platform businesses.

Gross Profit and Gross Margin

Gross profit in the third quarter of 2016 increased 0.5% to $20.8 million from $20.7 million in the same period in 2015. Excluding NationSky in the comparable period, gross profit increased 46.1% year-over-year from the same period in 2015.  Gross margin, or gross profit as a percentage of net revenues, was 22.9% in the third quarter of 2016, compared with 23.6% in the same period in 2015 and 21.6% excluding NationSky in the comparable period.

Operating Expenses

Total operating expenses in the third quarter of 2016 increased 17.7% year-over-year to $24.2 million from $20.5 million in the same period in 2015. Non-GAAP operating expenses, which exclude share-based compensation and the amortization of intangible assets arising from acquisitions decreased 5.2% year-over-year to $20.1 million from $21.2 million in the same period in 2015. Excluding NationSky from the comparable period, total operating expenses increased 54.7% year-over-year from the same period in 2015, and non-GAAP operating expenses increased 23.7% year-over-year the same period in 2015 primarily from an increase in general and administrative expenses as detailed below. Total operating expenses were 26.5% as a percentage of revenues in the third quarter, compared to 23.7% in the same period in 2015 excluding NationSky.

Selling and marketing expenses in the third quarter of 2016 decreased 24.8% year-over-year to $5.0 million from $6.6 million in the same period in 2015. Non-GAAP selling and marketing expenses, which exclude share-based compensation decreased 22.0% year-over-year to $5.0 million from $6.4 million in the same period in 2015. The year-over-year decrease primarily due to the impact of NationSky Divestment. Excluding NationSky from the comparable period, selling and marketing expenses decreased 2.2% year-over-year from the same period in 2015, and non-GAAP selling and marketing expenses increased 2.3% year-over-year from the same period in 2015.

General and administrative expenses in the third quarter of 2016 increased 110.9% year-over-year to $13.8 million from $6.5 million in the same period in 2015. Non-GAAP general and administrative expenses, which exclude share-based compensation and amortization of intangible assets arising from acquisitions, increased 26.9% year-over-year to $9.8 million from $7.7 million in the same period in 2015. Excluding NationSky from the comparable period, general and administrative expenses increased 133.6% year-over-year from the same period in 2015 mainly due to an increase in compensation costs and the provision for doubtful accounts based on management's assessment at the end of corresponding periods, and non-GAAP general and administrative expenses increased 38.3% year-over-year from the same period in 2015 mainly due to the provision for doubtful accounts based on management's assessment at the end of corresponding periods. 

Research and development expenses in the third quarter of 2016 decreased 26.7% year-over-year to $5.4 million from $7.4 million in the same period in 2015. Non-GAAP research and development expenses, which exclude share-based compensation and amortization of intangible assets arising from acquisitions, decreased 25.0% to $5.3 million from $7.1 million in the same period in 2015. The year-over-year decrease was primarily due to the divestment of NationSky. Excluding NationSky from the comparable period, research and development expenses increased 16.7% year-over-year from the same period in 2015, and Non-GAAP research and development expenses increased 24.2% year-over-year from the same period in 2015, mainly due to Linkmotion.

Share-based compensation expenses

Share-based compensation expenses, which were allocated to related operating cost and expenses line items, amounted to $3.4 million in the third quarter of 2016, compared to negative $1.5 million in the corresponding period in 2015.  The increase in share-based compensation expenses was mainly due to the restricted shares to management of a subsidiary.

Income/loss from Operations and Operating Margin

Loss from operations in the third quarter of 2016 was $3.3 million, compared with operating income of $0.2 million in the same period in 2015.

Non-GAAP income from operations, which excludes share-based compensation and amortization of intangible assets arising from acquisitions was $3.4 million compared to non-GAAP operating income of $1.3 million in the same period in 2015. Non-GAAP operating margin, or non-GAAP income from operations as a percentage of net revenues, was 3.7% in the third quarter of 2016, compared with 1.4% in the same quarter in 2015. 

Foreign Exchange Gain/Loss and Interest Expenses

Foreign exchange gain was $0.3 million in the third quarter of 2016, compared with a loss of $1.6 million in the same quarter of the previous year, which was affected by fluctuations in the foreign exchange rates. Interest expenses were $1.7 million in the third quarter of 2016, compared with $1.3 million in the same quarter a year ago.

Income Tax

Income tax benefit was $1.4 million in the third quarter of 2016, compared with income tax expense of $2.3 million in the same period in 2015.

Net Income/Loss

Net Loss was $2.8 million in the third quarter of 2016, compared with a Net Loss of $2.4 million in the same period in 2015. Net Loss attributable to NQ Mobile was $9.0 million in the third quarter of 2016, compared with a net loss of $2.5 million in the same period in 2015.

Non-GAAP net loss attributable to NQ Mobile, which excludes share-based compensation, interest expenses related to convertible debts, amortization of intangible assets arising from acquisitions and income tax provision related to the amortization of intangible assets arising from acquisitions, was $0.2 million in the third quarter of 2016, compared with non-GAAP net income attributable to NQ Mobile of $0.6 million in the same period in 2015. 

The difference between Net Income and Net Income attributable to NQ Mobile was affected starting from the second quarter of 2016 as the Company began to classify the portion of FL Mobile transferred during the FL Mobile Divestment to related share purchase agreements as non-controlling interest.

Cash and Cash Equivalents, Term Deposits and Restricted Cash

Cash and cash equivalents, term deposits and restricted cash together amounted to $330.3 million as of September 30, 2016.

Cash Flow

Net cash used in operations for the third quarter of 2016 was $11.3 million.

Updates on the FL Mobile Divestment

In a press release on November 23, 2016, the Company announced the current update on the FL Mobile Divestment.  Following the termination of the transaction between the Company and Shenzhen Prince New Materials Co., Ltd., as announced in a press release on November 2, 2016, Dr. Vincent Wenyong Shi, chairman and chief operating officer of the Company, and Xinjiang Yinghe Equity Investment Management Limited Partnership ("Xinjiang Yinghe"), an affiliate of the management of FL Mobile, recently exercised their options to revert some of the transactions regarding the equity interests in FL Mobile.  Dr. Shi and the Company agreed to revert the sale of 5.66% equity interest in FL Mobile.  As a result of this reversal, the equity interests in FL Mobile purchased by Dr. Shi was changed to 16.34% from 22%, and the consideration was adjusted proportionately from RMB880.0 million to RMB653.6 million.  Dr. Shi and the Company have the option to request the reversal of the remaining 16.34% if the FL Mobile Divestment does not consummate or fails to obtain regulatory approval from relevant government authorities and additionally, Dr. Shi may revert the transaction if the FL Mobile Divestment is not completed within two years from the date of the termination agreement.  Xinjiang Yinghe and the Company agreed to revert the sale of 12% equity interests in FL Mobile. 

After obtaining effective control of the 5.66% equity interests in FL Mobile back from Dr. Shi and the 12% equity interest in FL Mobile back from Xinjiang Yinghe through relevant contractual arrangements, the Company now controls 63% of the equity interests in FL Mobile.  In addition to the 63% of equity interests in FL Mobile controlled by the Company, the other shareholders of FL Mobile include Dr. Shi's 16.34% as announced and updated on November 23, 2016; Jinxin Hengrui's 13.13% as announced on May 6, 2016; Jinxin Haoyue's 3.53% as announced on August 9, 2016; Jinxin Huatong's 3% as announced on August 9, 2016; and Tibet Zhuohua's 1% as announced on August 9, 2016. 

Other Significant Events

Private Placement by Zhongzhi Hi-Tech Overseas Investment Ltd.

In a press release on September 27, 2016, the Company announced that Zhongzhi Hi-Tech Overseas Investment Ltd. ("Zhongzhi Hi-Tech") agreed to purchase an aggregate principal amount of US$220 million of convertible notes issued by the Company through a private placement (the "Transaction"). The convertible notes will bear interest at a rate of 8.0% per annum from the issuance date and mature in October 2018 (the "2018 Notes"). The convertible notes will be convertible, at the holder's option, into the Company's American depositary shares ("ADSs"), each representing five Class A common shares of the Company, at a conversion price of US$6.00 per ADS, which represents a 51.5% conversion premium over the closing trading price of US$3.96 per ADS on September 26, 2016. Pursuant to the 2018 Notes, Zhongzhi Hi-Tech is entitled to appoint a director to serve on the board of directors of the Company, subject to certain conditions. Zhongzhi Hi-Tech has informed the Company that it intends to nominate Ms. Joanne Yan Zhu, currently chairwoman of Zhongzhi Hi-Tech Investment, to serve as a director of the Company.

In a press release on October 4, 2016, the Company announced the closing of the previously-announced private placement of an aggregate principal amount of US$220 million of convertible notes due 2018 (the "2018 Notes") with Zhongzhi Hi-Tech Overseas Investment Ltd.

Appointment of New Directors and Formation of Investment Committee

In a press release on October 5, 2016, the Company announced the appointment of Ms. Lingyun Guo and Ms. Joanne Yan Zhu as directors on the board of directors of the Company (the "Board"), effective as of October 4, 2016. The Board has also formed an investment committee of the Board to oversee the Company's investment transactions, management, policies and guidelines. The investment committee of the Board is chaired by Dr. Vincent Wenyong Shi, and includes Dr. Ethan Hu and Ms. Joanne Yan Zhu.

Repurchase of Convertible Senior Notes

In a press release on October 18, 2016, the Company announced that it has repurchased an aggregate principal amount of US$172.5 million of all its outstanding 4.00% convertible senior notes due 2018 (the "Notes") upon exercise of the put option by holders of the Notes. The repurchase price equals to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest up to, but excluding, October 15, 2016. The full amount of the repurchase price was paid to Deutsche Bank Trust Company Americas, as trustee and paying agent, and will be distributed by Deutsche Bank to holders of the Notes pursuant to the indenture between the Company and the trustee.

Conference Call Information

NQ Mobile's management team will hold an earnings conference call to discuss its results and outlook at 7:30 PM U.S. Eastern Time on November 30, 2016, (8:30 AM Beijing/Hong Kong Time on December 1, 2016).

The dial-in details for the conference call are:
U.S. Toll Free: 1-866-519-4004
International: +1-845-675-0437
Hong Kong: +852-3018-6771
United Kingdom:  +44 203-621-4779
China Mainland: 4006208038 or 8008190121
Conference ID: 23783620

Please dial in 10 minutes before the call is scheduled to begin and provide the conference ID to join the call.

A replay of the call will be available after the conclusion of the conference call at 10:30 p.m. U.S. ET on November 30 through December 8, 2016. The dial-in details for the replay are:
U.S. Toll Free: 1-855-452-5696
International: +1-646-254-3697
Conference ID: 23783620

Additionally, a live and archived webcast of this call will be available on the Investor Relations section of NQ Mobile's website at http://ir.nq.com.

About NQ Mobile

NQ Mobile Inc. (NYSE: NQ) is a leading global provider of mobile Internet services.  NQ Mobile's portfolio of offerings includes mobile game publishing platforms, mobile advertising platforms, mobile entertainment applications and platforms, mobile security and productivity applications and other mobile applications. For more information on NQ Mobile, please visit http://www.nq.com

Non-GAAP Financial Measures

To supplement the Company's financial results prepared in accordance with United States Generally Accepted Accounting Principles ("GAAP"), NQ Mobile's management uses non-GAAP measures of cost of revenues, operating expenses, income from operations and net income attributable to NQ Mobile, which are adjusted from results based on GAAP to exclude share-based compensation expenses, interest expenses related to convertible debts, amortization of intangible assets arising from acquisitions and income tax provision related to the amortization of intangible assets arising from acquisitions and impairment loss. The Company also uses non-GAAP fully diluted earnings per ADS, which is the non-GAAP net income attributable to common shareholders divided by weighted average number of diluted ADS.

The Company's non-GAAP financial information is provided as additional information to help the Company's investors compare business trends among different reporting periods on a consistent basis and to enhance investors' overall understanding of the historical and current financial performance of the Company's continuing operations and its prospects for the future. The Company's non-GAAP financial information should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, GAAP results. In addition, the Company's calculation of this non-GAAP financial information may be different from the calculation used by other companies, and therefore comparability may be limited.

The non-GAAP financial measures are provided to enhance investors' overall understanding of NQ Mobile's current financial performance and prospects for the future. A limitation of using non-GAAP cost of revenues, operating expenses, income from operations and net income attributable to NQ Mobile, excluding share-based compensation expenses, interest expenses related to convertible debts, amortization of intangible assets arising from acquisitions, impairment loss and income tax provision related to the amortization of intangible assets arising from acquisitions and impairment loss, are that these items has been and may continue to be a significant expense in the Company's business for the foreseeable future. In order to mitigate these limitations the Company has provided specific information regarding the GAAP amounts excluded from each non-GAAP measure. The accompanying tables include details on the reconciliation between GAAP financial measures that are most directly comparable to the non-GAAP financial measures the Company has presented.

Forward Looking Statements

This news 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, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. All statements other than statements of historical fact in this press release are forward-looking statements and involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. These forward-looking statements are based on management's current expectations, assumptions, estimates and projections about the Company and the industry in which the Company operates, but involve a number of unknown risks and uncertainties, Further information regarding these and other risks is included in the Company's filings with the U.S. Securities and Exchange Commission. The Company undertakes no obligation to update forward-looking statements to reflect subsequent occurring events or circumstances, or 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, it cannot assure you that such expectations will turn out to be correct, and actual results may differ materially from the anticipated results. You are urged to consider these factors carefully in evaluating the forward-looking statements contained herein and are cautioned not to place undue reliance on such forward-looking statements, which are qualified in their entirety by these cautionary statements.

INVESTOR RELATIONS:

NQ Mobile Inc. 
Email: investors@nq.com 
Phone:
+1 469 310 5281
+86 10 6452 2017
Twitter: @NQMobileIR

 

NQ MOBILE INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)




As of



September 30,

2016


December 31,

2015



US$


US$

ASSETS





Current assets:





Cash and cash equivalents


87,286


118,572

Term deposits


239,974


134,055

Restricted cash


2,995


1,640

Notes receivable


-


46

Accounts receivable, net of allowance of US$16,514 and US$11,487 as of Sep 30, 2016 and December 31, 2015, respectively


124,690


87,471

Inventory


2,504


1,831

Deferred tax assets, current portion


1,035


946

Prepaid expenses and other current assets, net of allowance of US$5,252 and US$5,612 as of Sep 30, 2016 and December 31, 2015, respectively


51,826


41,739

Total current assets


510,310


386,300

Non-current assets:





Equity investments, net


65,867


41,134

Property and equipment, net


4,235


5,308

Intangible assets, net


25,300


29,518

Goodwill


330,597


319,280

Deferred tax assets, non-current portion


1,317


968

Investment prepayment


18,139


3,080

Other non-current assets


20,948


16,554

Total Assets


976,713


802,142

 

LIABILITIES





Current liabilities:





Advance from customers


1,449


1,493

Accounts payable


46,005


41,613

Deferred revenue


12,095


10,188

Consideration payable of acquiring an investee


2,106


9,616

Accrued expenses and other current liabilities


25,172


24,661

Tax payable


8,801


13,875

Short term borrowing


6,430


2,575

Convertible debt


172,500


172,500

Consideration received from shareholder


65,890


-

Total current liabilities


340,448


276,521

Non-current liabilities:





Deferred tax liabilities


6,826


6,979

Total Liabilities


347,274


283,500

MEZZANINE EQUITY





Total Mezzanine Equity


-


4,211

EQUITY





NQ Mobile Inc.'s shareholders' equity


498,783


459,502

Non-controlling interest


130,656


54,929

Total equity


629,439


514,431

Total Liabilities, Mezzanine Equity and Equity


976,713


802,142






 

 

NQ MOBILE INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands, except for share and per share data)



                      Three months ended


Nine months ended


September 30,

2016

June 30,

2016

September 30,

2015


September 30,

2016

September 30,

2015


US$

US$

US$


US$

US$








Net Revenues







Mobile value added services

54,909

48,588

31,455


146,174

88,211

Advertising services

27,503

28,702

15,972


76,000

49,727

Enterprise mobility

8,503

6,207

39,129


25,581

137,903

Other services

187

202

1,388


576

3,375

Total net revenues

91,102

83,699

87,944


248,331

279,216

Cost of revenues*

(70,266)

(55,436)

(67,210)


(181,533)

(214,428)

Gross profit

20,836

28,263

20,734


66,798

64,788








Operating expenses:







Selling and marketing
expenses*

(4,955)

(7,341)

 

(6,589)


(16,048)

(20,558)

General and administrative
expenses*

(13,786)

(8,335)

 

(6,536)


(38,770)

(38,222)

Research and development
expenses*

(5,432)

(5,583)

 

(7,414)


(15,571)

(21,217)








Total operating expenses

(24,173)

(21,259)

(20,539)


(70,389)

(79,997)








(Loss)/Income from operations

(3,337)

7,004

195


(3,591)

(15,209)








Interest expense

(1,743)

(1,584)

(1,282)


(4,917)

(3,202)

Foreign exchange gain/(loss), net

300

(392)

(1,626)


229

(1,108)

Investment (loss)/income

(156)

(166)

521


2,278

1,518

Impairment loss

-

-

-


-

(2,539)

Other income, net

820

860

2,069


2,029

4,097

(Loss)/Income before income
  taxes

(4,116)

5,722

 

(123)


(3,972)

(16,443)








Income tax benefit/(expense) 

1,366

(373)

(2,279)


(1,201)

(3,168)

Net (loss)/income

(2,750)

5,349

(2,402)


(5,173)

(19,611)

Net (income)/loss attributable to
  the non-controlling interest

(6,272)

(4,841)

 

346


(11,171)

(269)

Net income attributable to the
  mezzanine classified
  
non-controlling interest

-

-

 

 

(432)


-

(1,296)

Net (loss)/income attributable 
  to NQ Mobile Inc.
 

(9,022)

508

 

(2,488)


(16,344)

(21,176)








Net (loss)/income

(2,750)

5,349

(2,402)


(5,173)

(19,611)

Other comprehensive loss:
  foreign currency translation
  adjustment

(4,658)

(17,880)

 

 

(25,612)


(19,043)

(25,178)

Comprehensive loss

(7,408)

(12,531)

(28,014)


(24,216)

(44,789)

Comprehensive (income)/loss 
  attributable to non-controlling
  interest

(5,765)

(3,095)

 

323


(9,339)

 

(334)

Comprehensive income
  attributable to the mezzanine
  classified non-controlling 
  
interest

-

-

 

 

 

(432)


-

 

 

 

(1,296)

Comprehensive loss 
   attributable to NQ Mobile Inc.

(13,173)

(15,626)

 

(28,123)


(33,555)

 

(46,419)








Net (loss)/earnings per Class A and
  Class B common share, basic

(0.0182)

0.0010

 

(0.0053)


(0.0333)

(0.0456)

Net (loss)/earnings per Class A and
  Class B common shares, Diluted

(0.0182)

0.0010

 

(0.0053)


(0.0333)

(0.0456)

Net (loss)/earnings per ADS, basic

(0.0910)

0.0050

(0.0265)


(0.1665)

(0.2280)

Net (loss)/earnings per ADS, Diluted

(0.0910)

0.0050

(0.0265)


(0.1665)

(0.2280)








Weighted average number of common shares outstanding:






Basic

495,837,463

490,111,171

470,059,612


491,532,385

464,880,435

Diluted

495,837,463

497,021,036

470,059,612


491,532,385

464,880,435








 

*Share-based compensation
expenses included in:







Cost of revenues

(10)

9

50


9

147

Selling and marketing expenses

(33)

330

191


455

762

General and administrative
expenses

3,424

686

 

(1,781)


11,981

11,568

Research and development
expenses

(16)

27

 

58


39

(342)

Total

3,365

1,052

(1,482)


12,484

12,135

 

 

NQ MOBILE INC.

NON-GAAP MEASURE RECONCILIATIONS

(In thousands, except for share and per share data)



Three months ended


Nine months ended


Sep 30,
2016

June 30,

2016

Sep 30, 2015


Sep 30,

2016

Sep 30,

2015



US$

US$

US$


US$

US$


Selling and marketing expenses
  under GAAP

(4,955)

(7,341)

 

(6,589)


(16,048)

(20,558)


Adjustment (a)

(33)

330

191


455

762


Non-GAAP selling and marketing
expenses

(4,988)

(7,011)

 

(6,398)


(15,593)

 

(19,796)










General and administrative expenses
  under GAAP

(13,786)

(8,335)

 

(6,536)


(38,770)

(38,222)


Adjustment (a)

3,424

686

(1,781)


11,981

11,568


Adjustment (c)

571

583

601


1,737

2,515


Non-GAAP general and
  administrative expenses

(9,791)

(7,066)

 

(7,716)


(25,052)

(24,139)










Research and development expenses
  under GAAP

(5,432)

(5,583)

 

(7,414)


(15,571)

 

(21,217)


Adjustment (a)

(16)

27

58


39

(342)


Adjustment (c)

114

305

248


724

132


Non-GAAP research and
development expenses

(5,334)

(5,251)

 

(7,108)


(14,808)

(21,427)










(Loss) /Income from operations
under GAAP

(3,337)

7,004

 

195


(3,592)

(15,209)


Adjustment (a)

3,365

1,052

(1,482)


12,484

12,135


Adjustment (c)

3,325

3,681

2,561


10,406

7,935


Non-GAAP income from operations

3,353

11,737

 

1,274


19,298

4,861










Net (loss)/income attributable to
NQ Mobile Inc. under GAAP

(9,022)

508

 

(2,488)


(16,344)

(21,176)


Adjustment (a)

3,365

1,052

(1,482)


12,484

12,135


Adjustment (b)

2,653

2,338

2,314


7,321

6,917


Adjustment (c)

3,325

3,681

2,561


10,406

7,935


Adjustment (d)

-

-

-


-

2,539


Adjustment (e)

(502)

(818)

(296)


(1,913)

(1,589)


Non-GAAP net (loss)/income
  attributable to NQ Mobile Inc.

(181)

6,761

 

609


11,954

6,761










Non-GAAP weighted average number of diluted ADS outstanding:








Basic

99,167,493

98,022,234

94,011,922


98,306,477

92,976,087


Diluted

99,167,493

99,404,207

95,758,176

 


99,561,290

94,872,886

 






Non-GAAP (loss)/earnings per ADS,
basic

(0.0018)

0.0690

0.0065


0.1216

0.0727


Non-GAAP (loss)/earnings per ADS,
diluted

(0.0018)

0.0680

0.0064


0.1201

0.0713


 

(a)

Adjustment to exclude the share-based compensation expenses for each period

(b)

Adjustment to exclude the interest expenses related to convertible debt


(c)

Adjustment to exclude the amortization of intangible assets arising from acquisitions


(d)

Adjustment to exclude impairment loss arising from acquisitions


(e)

To adjust income tax provision related to item (c) and (d). Deferred tax liabilities was recognized along with intangible assets recognized related to acquisitions. The amortization and impairment of such intangible assets resulted in reversal of corresponding deferred tax liabilities that impact deferred income tax expense. Other non-GAAP to GAAP reconciling items have no income tax effect *

 

*The reconciliation items (a) and (b) were recorded in entities in tax free jurisdictions hence no income tax implications.


 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/nq-mobile-inc-reports-unaudited-financial-results-for-the-third-quarter-of-2016-300370841.html

SOURCE NQ Mobile Inc.