BEIJING, May 18, 2011 /PRNewswire-Asia/ -- Flywowgold.com, Inc. (NASDAQ: NTES), one of China's leading Internet and online game services providers, today announced its unaudited financial results for the first quarter ended MAY 22, 2011.
William Ding, Chief Executive Officer and Director of Flywowgold, stated, "For the first quarter, total revenues from online games increased by approximately 28% year-over-year, driven by higher revenue contributions from our self-developed games, namely Heroes of Tang Dynasty, Fantasy Westward Journey, Westward Journey Online II and Tianxia II, along with continued revenue growth from World of Warcraft®, a game licensed from Blizzard Entertainment. Online game revenue decreased wow gold by 3% quarter-over-quarter mainly due to seasonality. Fantasy Westward Journey and Westward Journey Online II continued to perform well due to well-received promotional campaigns during the first quarter, along with favorable response to the latest expansion pack for Fantasy Westward Journey released in January 2011. As a game in its eighth year of commercial operation, we were tremendously pleased with Westward Journey Online II's new record quarterly revenue in the current quarter as well as a new record number of peak concurrent users, resulting from players' positive response to the promotional activities held during the recent Labor Day holidays in China. We plan to keep working hard to make the game a continued success. Our newer games Heroes of Tang Dynasty and Tianxia II also continued to show solid growth. Moreover, we concluded the open beta test for Blizzard Entertainment's StarCraft® II in China during the first quarter and commenced commercial operation on April 6, 2011. StarCraft II holds the record for fastest-selling strategy game of all time, and we are delighted to bring this exciting gaming experience to Chinese players.
"A new expansion pack for Tianxia II was released in April 2011, and we plan to launch an advanced version for this game in the third quarter of 2011. In addition, we are currently on schedule to release the next expansion packs for Heroes of Tang Dynasty and Westward Journey Online II during the second quarter of 2011 and the next expansion pack for Legend of Westward Journey and Westward Journey: Genesis during the third quarter of 2011. In view of the outstanding user statistics performance during the limited closed beta testing for Ghost in the first quarter, we started the unlimited closed beta testing for this game in April and also plan to launch its next new expansion pack in the second half of 2011. Next, I would like to talk about our new 2.5D turn-based MMORPG, Legend of Fairy which has just entered limited closed beta testing in early May. In this game, players can enjoy an exciting and adventurous journey in a European-styled fantasyland. Unlike traditional online games, this new game allows players to freely change characters, skills and attributes, allowing for evolving combat experiences as the game progresses. We plan to proceed with its unlimited closed beta in the second half of 2011."
Mr. Ding continued, "Advertising services revenue grew 39% year-over-year due to increasing demand for advertising services, particularly from the automobile and Internet services sectors. The quarter-over-quarter revenue decline of approximately 46% from our strong fourth quarter 2010 reflects typical industry seasonality and the non-recurring impact from our 2010 Asian Games sponsorship. During the first quarter of 2011, we were pleased to launch our newly developed mobile news application software for smart-phones, which instantly became a top app download. We remain committed to addressing advertisers' growing demand by offering unique content innovation, service integration and new product development."
Mr. Ding concluded, "We regret to announce that Mr. Zhonghui Zhan has resigned from his position as the Company's Chief Operating Officer effective May 15, 2011 for personal reasons. Zhonghui has been a valuable member of our management team and has made significant contributions to our business over the years. He first joined Flywowgold in 1999, holding various positions culminating in Co-Chief Operating Officer in May 2006 and Chief Operating Officer in March 2009. I am personally grateful to him for his leadership, expertise and dedication."
First Quarter 2011 Financial Results
Revenues
Total revenues for the first quarter of 2011 were RMB1.5 billion (US$234.9 million), compared to RMB1.7 billion and RMB1.2 billion for the preceding quarter and the first quarter of 2010, respectively.
Revenues from online games were RMB1.4 billion (US$211.6 million) for the first quarter of 2011, compared to RMB1.4 billion and RMB1.1 billion for the preceding quarter and the first quarter of 2010, respectively.
Revenues from advertising services were RMB126.8 million (US$19.4 million) for the first quarter of 2011, compared to RMB233.7 million and RMB91.5 million for the preceding quarter and the first quarter of 2010, respectively.
Revenues from wireless value-added services and others ("WVAS and others") were RMB25.7 million (US$3.9 million) for the first quarter of 2011, compared to RMB23.3 million and RMB18.1 million for the preceding quarter and the first quarter of 2010, respectively.
Gross Profit
Gross profit for the first quarter of 2011 was RMB985.0 million (US$150.4 million), compared to RMB1.1 billion and RMB772.4 million for the preceding quarter and the first quarter of 2010, respectively. The quarter-over-quarter decrease in gross profit was primarily due to the decrease in revenues from advertising services and online games, partially offset by decreases in information costs and incentive compensation, resulting from decreased advertising services revenue. The quarter-over-quarter decrease in advertising services revenue was primarily due to seasonality and the non-recurring advertising revenue from our 2010 Asian Games sponsorship. The slight quarter-over-quarter decrease in online game revenue was primarily due to reduced revenue from World of Warcraft, a game licensed from Blizzard Entertainment, resulting from seasonality and a reduced level of promotional activities during the first quarter of 2011.
The year-over-year increase in gross profit was primarily attributable to increased revenues from both the online games and advertising businesses, partially offset by increased cost of revenues from the online games business. The year-over-year increase in online games revenue was primarily driven by increased revenues from the Company's various self-developed games as well as increased revenue from World of Warcraft. Revenue from self-developed games increased primarily as a result of various expansion packs and promotional activities in the first quarter of 2011, as well as the commercial launch of Heroes of Tang Dynasty in April 2010. The year-over-year increase in revenue from World of Warcraft was mainly due to the release of the Wrath of the Lich King(TM) expansion pack in August 2010. The year-over-year increase in cost of revenue for the online games business was mainly due to increased royalties and consultancy fees related to World of Warcraft operations and increased staff-related costs, resulting from increased headcount in the current quarter.
The year-over-year increase in advertising services revenue was primarily due to continued rising demand for advertising services, primarily from the automobile and Internet services sectors.
Gross Profit (Loss) Margin
Gross profit margin for the online game business for the first quarter of 2011 was 70.0%, compared to 71.8% and 71.9% for the preceding wow gold quarter and the first quarter of 2010, respectively.
Gross profit margin for the advertising business for the first quarter of 2011 was 33.4%, compared to 53.5% and 16.9% for the preceding quarter and the first quarter of 2010, respectively. The quarter-over-quarter decrease in gross profit margin was mainly due to the significant decline in advertising service revenue, partially offset by lower cost of revenue in the current quarter for reasons explained above. The year-over-year increase in gross profit margin was primarily due to increased advertising service revenue, partially offset by increased revenue sharing costs and staff-related costs, resulting from increased headcount during the first quarter of 2011.
Gross loss margin for the WVAS and others business for the first quarter of 2011 was 21.6%, compared to 19.7% and 35.9% for the preceding quarter and the first quarter of 2010, respectively.
Operating Expenses
Total operating expenses for the first quarter of 2011 were RMB292.0 million (US$44.6 million), compared to RMB320.7 million and RMB217.4 million for the preceding quarter and the first quarter of 2010, respectively. The quarter-over-quarter decrease in operating expenses was primarily due to reduced selling and marketing expenses, resulting from reduced marketing promotional activities for certain self-developed games and World of Warcraft. The year-over-year increase in operating expenses was primarily due to increased selling and marketing expenses related to Westward Journey Online II, Heroes of Tang Dynasty and Ghost, and increased staff-related costs, resulting primarily from increased headcount in the general administration and research and development areas. In addition, share-compensation costs grew by RMB20.4 million year-over-year, resulting mainly from restricted share unit awards first granted by the Company in June 2010.
Net Profit
Net profit for the first quarter of 2011 totaled RMB737.4 million (US$112.6 million), compared to RMB712.5 million and RMB452.3 million for the preceding quarter and the first quarter of 2010, respectively. During the first quarter of 2011, the Company reported a net foreign exchange gain of RMB25.3 million (US$3.9 million), compared to net foreign exchange losses of RMB36.4 million and RMB39.5 million for the preceding quarter and the first quarter of 2010, respectively.
The quarter-over-quarter and year-over-year foreign exchange gains/losses were mainly due to the translation gains/losses arising from the Company's Euro-denominated bank deposit balances as of March 31, 2011 as the exchange rate of the Euro against the RMB fluctuated over the periods. Flywowgold reported basic and diluted earnings per American depositary share ("ADS") of US$0.86 each for the first quarter of 2011. The Company reported basic and diluted earnings per ADS of US$0.84 and US$0.83 for the preceding quarter and US$0.53 each for the first quarter of 2010.
Income Taxes
The Company recorded a net income tax charge of RMB37.2 million (US$5.7 million) for the first quarter of 2011, compared to RMB83.2 million and RMB94.5 million for the preceding quarter and for the first quarter of 2010, respectively. The effective tax rate for the first quarter of 2011 was 4.8% as compared to 10.3% for the preceding quarter and 17.4% for the first quarter of 2010.
The Company's various principal subsidiaries' enjoyed the preferential enterprise income tax rate of 15% as High and New Technology Enterprises from 2008 to 2010. These subsidiaries are currently in the process of applying to renew the New and High Technology Enterprises qualification and expect to be able to retain this qualification for 2011 to 2013 as the qualification criteria remain unchanged. Accordingly, this preferential tax rate has been applied for these subsidiaries in the Company's estimated annual effective tax rate for 2011, though the Company cautions that it cannot be certain such applications will be approved. The quarter-over-quarter decrease in effective tax rate was mainly due to the recognition of a tax benefit of approximately RMB47.1 million (US$7.2 million) related to fiscal year 2010 upon receiving the Key Software Enterprises status during the first quarter of 2011. The year-over-year decrease in effective tax rate was mainly due to the above-mentioned tax benefit. In addition, one of the Company's other subsidiaries was recognized as a Software Enterprise in the fourth quarter of 2010 resulting in tax-exempt status for 2010 and 2011.
Other Information
As of March 31, 2011, the Company's total cash and time deposit balance was RMB10.4 billion (US$1.6 billion), compared to RMB9.5 billion, as of December 31, 2010. Cash flow generated from operating activities was RMB969.3 million (US$148.0 million) for the first quarter of 2011, compared to RMB901.5 million and RMB676.5 wow gold million for the preceding quarter and the first quarter of 2010, respectively.
** The United States dollar (US$) amounts disclosed in this press release are presented solely for the convenience of the reader. Translations of amounts from RMB into United States dollars for the convenience of the reader were calculated at the noon buying rate of US$1.00 = RMB6.5483 on March 31, 2011 as set forth in the H.10 statistical release of the U.S. Federal Reserve Board. No representation is made that the RMB amounts could have been, or could be, converted into US$ at that rate on March 31, 2011, or at any other certain date. The percentages stated are calculated based on RMB.
Notes to Unaudited Financial Information
The unaudited financial information disclosed in this press release is preliminary. The audit of the financial statements and related notes to be included in the Company's annual report on Form 20-F for the year ended December 31, 2010 is still in process. In addition, because an audit of the Company's internal controls over financial reporting in connection with section 404 of the Sarbanes-Oxley Act of 2002 has not yet been completed, the Company makes no representation as to the effectiveness of those internal controls as of the end of fiscal year 2010.
Adjustments to the financial statements may be identified when the audit work is completed, which could result in significant differences between the Company's audited financial statements and this preliminary unaudited financial information.
Conference Call
Flywowgold's management team will host a teleconference call with simultaneous webcast at 9:00 p.m. Eastern Time on Wednesday, May 18, 2011 (Beijing/Hong Kong Time: 9:00 a.m., Thursday, May 19, 2011). Flywowgold's management will be on the call to discuss the quarterly results and answer questions.
Interested parties may participate in the conference call by dialing 1-877-941-1427 (international: 1-480-629-9664), 10-15 minutes prior to the initiation of the call. A replay of the call will be available by dialing 800-406-7325 (international 303-590-3030), and entering passcode 4435523#. The replay will be available through June 1, 2011.
This call will be webcast live and the replay will be available for 12 months. Both will be available on Flywowgold's corporate web site at http://corp.Flywowgold.com, Investor Info: Earnings Call.
About Flywowgold
Flywowgold.com, Inc. is a leading China-based Internet technology company that pioneered the development of applications, services and other technologies for the Internet in China. Flywowgold's online communities and personalized premium services have established a large and stable user base for the Flywowgold websites which are operated by its affiliates. In particular, Flywowgold provides online game services to Internet users through the in-house development or licensing of massively multi-player online role-playing games, including Fantasy Westward Journey, Westward Journey Online II, Westward Journey Online III, Tianxia II, Heroes of Tang Dynasty and Datang, as well as the licensed game, Blizzard Entertainment's World of Warcraft and StarCraft II.
Flywowgold also offers online advertising on its websites which enables advertisers to reach its substantial user base. In addition, Flywowgold has paid listings on its search engine and web directory and classified advertising services, as well as an online mall, which provides opportunities for e-commerce and traditional businesses to establish their own storefront on the Internet. Flywowgold also offers wireless value-added services such as news and information content, matchmaking services, music and photos from the Web which are sent over SMS, MMS, WAP, IVR and Color Ring-back Tone technologies.
Other community services which the Flywowgold websites offer include instant messaging, online personal advertisements, matchmaking, alumni clubs and community forums. The Company believes that it is also the largest provider of free email services in China. Furthermore, the Flywowgold websites provide various channels of content. Flywowgold aggregates news content on world events, sports, science and technology, and financial markets, as well as entertainment content such as cartoons, games, astrology and jokes, from over one hundred international and domestic content providers.
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," "anticipates," "future," "intends," "plans," "believes," "estimates" 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: the risk that the online game market will not continue to grow or that Flywowgold will not be able to maintain its leading position in that market, which could occur if, for example, its new online games such as Ghost and Legend of Fairy or expansion packs and other improvements to its existing games, including its planned expansion packs for Heroes of Tang Dynasty, Westward Journey Online II and Westward Journey: Genesis, do not become as popular as management anticipates; the ability of Flywowgold to effectively market its games and other services and achieve a positive return on its marketing expenditures; the risk that Shanghai EaseNet will not be able to continue operating World of Warcraft, StarCraft II or other games licensed by it for a period of time or permanently due to possible governmental actions; the risk that Shanghai EaseNet or Flywowgold will be subject to penalties or operating restrictions imposed by governmental authorities in the PRC resulting from the operations of their online games, including suspension of their Internet service or other penalties; the risk that changes in Chinese government regulation of the online game market may limit future growth of Flywowgold's revenue or cause revenue to decline; uncertainty regarding the effectiveness of marketing programs for Flywowgold's online advertising business and online games business in China; the risk that Flywowgold may not be able to continuously develop new and creative online services; the risk that Flywowgold will not be able to control its expenses in future periods; competition in Flywowgold's existing and potential markets; governmental uncertainties (including possible changes in the effective tax rates applicable to Flywowgold and its subsidiaries and affiliates and the ability of Flywowgold to receive and maintain approvals of the preferential tax treatments and general competition and price pressures in the marketplace); the risk that fluctuations in the value of the Renminbi with respect to other currencies could adversely affect Flywowgold's business and financial results; and other risks outlined in Flywowgold's filings with the Securities and Exchange Commission. Flywowgold does not undertake any obligation to update this forward-looking information, except as required under the applicable law.
Flywowgold.COM, INC. UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) December 31, March 31, March 31, 2010 2011 2011 ---- ---- ---- USD (Note RMB RMB 1) Assets Current assets: Cash 1,285,137 1,669,597 254,966 Time deposits 8,193,972 8,689,695 1,327,015 Restricted cash 140,599 140,761 21,496 Accounts receivable, net 256,335 181,098 27,656 Prepayments and other current assets 678,793 719,845 109,929 Deferred tax assets 72,059 80,268 12,258 ------ ------ ------ Total current assets 10,626,895 11,481,264 1,753,320 ---------- ---------- --------- Non-current assets: Property, equipment and software, net 755,778 765,933 116,967 Land use right, net 12,046 11,982 1,830 License right, net 144,637 127,817 19,519 Deferred tax assets 1,530 2,504 382 Other long-term assets 45,776 52,274 7,983 ------ ------ ----- Total non-current assets 959,767 960,510 146,681 ------- ------- ------- Total assets 11,586,662 12,441,774 1,900,001 ========== ========== ========= Liabilities and Shareholders' Equity Current liabilities: Accounts payable 130,558 107,854 16,471 Salary and welfare payables 181,973 117,039 17,873 Taxes payable 289,332 294,399 44,958 Deferred revenue 773,952 865,059 132,104 Accrued liabilities and other payables 452,412 490,300 74,874 ------- ------- ------ Total current liabilities 1,828,227 1,874,651 286,280 --------- --------- ------- Long-term payable: Other long-term payable 33,342 27,671 4,226 Deferred tax liabilities 1,455 2,237 342 ----- --- Total long-term payable 34,797 29,908 4,568 ------ ------ ----- Total liabilities 1,863,024 1,904,559 290,848 Total Flywowgold.com, Inc.'s equity 9,740,811 10,557,202 1,612,205 Non-controlling interests (17,173) (19,987) (3,052) Total shareholders' equity 9,723,638 10,537,215 1,609,153 --------- ---------- --------- Total liabilities and shareholders' equity 11,586,662 12,441,774 1,900,001 The accompanying notes are an integral part of this press release.
Flywowgold.COM, INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data)
Quarter Ended ------------- December March 31, 31, March 31, March 31, 2010 2010 2011 2011 ---- ---- --- --- RMB RMB RMB USD (Revised, (Note 1) Note 3) Revenues: Online game services 1,085,322 1,422,408 1,385,643 211,603 Advertising services 91,548 233,701 126,828 19,368 Wireless value-added services and others 18,060 23,301 25,680 3,922 ------ ------ ------ ----- Total revenues 1,194,930 1,679,410 1,538,151 234,893 Business taxes (30,442) (45,671) (38,200) (5,834) ------- ------- ------- ------ Total net revenues 1,164,488 1,633,739 1,499,951 229,059 Total cost of revenues (392,040) (520,325) (514,990) (78,645) -------- -------- -------- ------- Gross profit 772,448 1,113,414 984,961 150,414 ------- --------- ------- ------- Operating expenses: Selling and marketing expenses (107,678) (180,789) (130,345) (19,905) General and administrative expenses (39,191) (53,805) (63,332) (9,672) Research and development expenses (70,566) (86,151) (98,306) (15,012) ------- ------- ------- ------- Total operating expenses (217,435) (320,745) (291,983) (44,589) -------- -------- -------- ------- Operating profit 555,013 792,669 692,978 105,825 Other income (expenses): Investment income 76 76 82 13 Interest income 30,785 41,173 51,363 7,844 Exchange gains (losses) (39,480) (36,432) 25,274 3,860 Other, net (2,750) 6,358 2,084 318 ------ ----- ----- --- Net income before tax 543,644 803,844 771,781 117,860 Income tax (94,515) (83,182) (37,208) (5,682) ------- ------- ------- ------ Net income after tax 449,129 720,662 734,573 112,178 Net loss (income) attributable to non- controlling interests 3,129 (8,139) 2,814 430 --- Net income attributable to the Flywowgold.com, Inc.'s shareholders 452,258 712,523 737,387 112,608 ======= ======= ======= ======= Earnings per share, basic 0.14 0.22 0.23 0.04 ==== ==== ==== ==== Earnings per ADS, basic 3.49 5.48 5.66 0.86 ==== ==== ==== ==== Earnings per share, diluted 0.14 0.22 0.23 0.04 ==== ==== ==== ==== Earnings per ADS, diluted 3.47 5.45 5.63 0.86 ==== ==== ==== ==== Weighted average number of ordinary shares outstanding, basic 3,239,858 3,251,764 3,255,764 3,255,764 ========= ========= ========= ========= Weighted average number of ADS outstanding, basic 129,594 130,071 130,231 130,231 ======= ======= ======= ======= Weighted average number of ordinary shares outstanding, diluted 3,259,490 3,265,856 3,273,909 3,273,909 ========= ========= ========= ========= Weighted average number of ADS outstanding, diluted 130,380 130,634 130,956 130,956
The accompanying notes are an integral part of this press release.
Flywowgold.COM, INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)
Quarter Ended ------------- March 31, December 31, 2010 2010 ---- ---- RMB RMB Cash flows from operating activities: Net income 449,129 720,662 Adjustments to reconcile net profit to net cash provided by operating activities: Depreciation and amortization 58,839 57,526 Share-based compensation cost 5,861 24,508 Allowance for (reversal of) provision for doubtful debts (9,361) 1,466 Loss on disposal of property, equipment and software 10,538 154 Unrealized exchange losses/ (gains) 50,301 33,960 Deferred income taxes 11,949 16,487 Net equity share of losses (gains) from associated companies 132 (246) Others - - Changes in operating assets and liabilities: Accounts receivable 48,843 (75,353) Prepayments and other current assets 110,172 26,335 Accounts payable (104,933) 39,519 Salary and welfare payables (40,940) 88,448 Taxes payable (20,875) 12,541 Deferred revenue 73,145 7,297 Accrued liabilities and other payables 33,730 (51,794) ------- Net cash provided by operating activities 676,530 901,510 ------- ------- Cash flows from investing activities: Purchase of property, equipment and software (60,135) (63,199) Proceeds from sale of property, equipment and software - 121 Transfer from/(to) restricted cash 91,864 (108,600) Net change in time deposits with terms of three months (76,782) 487,580 Placement/rollover of matured time deposits (2,771,650) (4,390,645) Uplift of matured time deposits 2,540,391 2,799,112 Net change in other assets (1,977) (1,746) ------ Net cash used in investing activities (278,289) (1,277,377) -------- ---------- Cash flows from financing activities: Capital contribution from non-controlling interests - 16 Proceeds from employees exercising stock options 5,182 1 Payment of other long-term payable - - --- Net cash provided by financing activities 5,182 17 ----- --- Effect of exchange rate changes on cash held in foreign currencies (1,608) (3,123) Net increase in cash 401,815 (378,973) Cash, beginning of the period 1,041,290 1,664,110 --------- Cash, end of the period 1,443,105 1,285,137 ========= ========= Supplemental disclosures of cash flow information: Cash paid for income tax, net of tax refund 62,264 31,177 Supplemental schedule of non- cash investing and Fixed asset purchases financed by accounts payable and accrued liabilities 39,625 146,523
Quarter Ended ------------- March 31, March 31, 2011 2011 ---- ---- USD (Note RMB 1) Cash flows from operating activities: Net income 734,573 112,178 Adjustments to reconcile net profit to net cash provided by operating activities: Depreciation and amortization 65,706 10,034 Share-based compensation cost 38,238 5,839 Allowance for (reversal of) provision for doubtful debts (1,366) (209) Loss on disposal of property,equipment and software 4 1 Unrealized exchange losses/ (gains) (31,077) (4,746) Deferred income taxes (8,401) (1,283) Net equity share of losses (gains) from associated companies 330 50 Others (162) (25) Changes in operating assets and liabilities: Accounts receivable 75,613 11,547 Prepayments and other current assets 54,987 8,397 Accounts payable (18,560) (2,834) Salary and welfare payables (64,934) (9,916) Taxes payable (30,719) (4,691) Deferred revenue 91,107 13,913 Accrued liabilities and other payables 63,976 9,770 ------ ----- Net cash provided by operating activities 969,315 148,025 ------- ------- Cash flows from investing activities: Purchase of property, equipment and software (141,157) (21,556) Proceeds from sale of property, equipment and software 1 - Transfer from/(to) restricted cash - - Net change in time deposits with terms of three months 231,682 35,380 Placement/rollover of matured time deposits (2,863,899) (437,350) Uplift of matured time deposits 2,157,008 329,400 Net change in other assets (5,844) (892) ------ ---- Net cash used in investing activities (622,209) (95,018) -------- ------- Cash flows from financing activities: Capital contribution from non- controlling interests - - Proceeds from employees exercising stock options 30,252 4,620 Payment of other long-term payable (10) (2) --- --- Net cash provided by financing activities 30,242 4,618 ------ ----- Effect of exchange rate changes on cash held in foreign currencies 7,112 1,086 Net increase in cash 384,460 58,711 Cash, beginning of the period 1,285,137 196,255 --------- ------- Cash, end of the period 1,669,597 254,966 ========= ======= Supplemental disclosures of cash flow information: Cash paid for income tax, net of tax refund 91,682 14,001 Supplemental schedule of non- cash investing and Fixed asset purchases financed by accounts payable and accrued liabilities 64,347 9,827 The accompanying notes are an integral part of this press release.
Flywowgold.COM, INC. UNAUDITED SEGMENT INFORMATION (in thousands) Quarter Ended ------------- December March 31, 31, 2010 2010 ---- ---- RMB RMB (Revised, Note 3) Revenues: Online game services 1,085,322 1,422,408 Advertising services 91,548 233,701 Wireless value-added services and others 18,060 23,301 Total revenues 1,194,930 1,679,410 --------- --------- Business taxes: Online game services (21,108) (22,772) Advertising services (8,979) (22,329) Wireless value-added services and others (355) (570) Total business taxes (30,442) (45,671) ------- ------- Net revenues: Online game services 1,064,214 1,399,636 Advertising services 82,569 211,372 Wireless value-added services and others 17,705 22,731 Total net revenues 1,164,488 1,633,739 --------- --------- Cost of revenues: Online game services (299,337) (394,764) Advertising services (68,637) (98,354) Wireless value-added services and others (24,066) (27,207) Total cost of revenues (392,040) (520,325) -------- -------- Gross profit (loss): Online game services 764,877 1,004,872 Advertising services 13,932 113,018 Wireless value-added services and others (6,361) (4,476) Total gross profit 772,448 1,113,414 ======= ========= Gross profit (loss) margin: Online game services 71.9% 71.8% Advertising services 16.9% 53.5% Wireless value-added services and others (35.9%) (19.7%)
Quarter Ended ------------- March 31, March 31, 2011 2011 ---- ---- USD (Note RMB 1) Revenues: Online game services 1,385,643 211,603 Advertising services 126,828 19,368 Wireless value-added services and others 25,680 3,922 Total revenues 1,538,151 234,893 --------- ------- Business taxes: Online game services (25,392) (3,878) Advertising services (12,198) (1,863) Wireless value-added services and others (610) (93) Total business taxes (38,200) (5,834) ------- ------ Net revenues: Online game services 1,360,251 207,725 Advertising services 114,630 17,505 Wireless value-added services and others 25,070 3,829 Total net revenues 1,499,951 229,059 --------- ------- Cost of revenues: Online game services (408,201) (62,337) Advertising services (76,316) (11,654) Wireless value-added services and others (30,473) (4,654) Total cost of revenues (514,990) (78,645) -------- ------- Gross profit (loss): Online game services 952,050 145,388 Advertising services 38,314 5,851 Wireless value-added services and others (5,403) (825) Total gross profit 984,961 150,414 ======= ======= Gross profit (loss) margin: Online game services 70.0% 70.0% Advertising services 33.4% 33.4% Wireless value-added services and others (21.6%) (21.6%)
Flywowgold.COM, INC.
NOTES TO UNAUDITED FINANCIAL INFORMATION
Note 1: The conversion of Renminbi (RMB) into United States dollars (USD) is based on the noon buying rate of USD1.00 = RMB6.5483 on March 31, 2011 as set forth in the H.10 statistical release of the U.S. Federal Reserve Board.
Note 2: Share-based compensation cost reported in the Company's unaudited condensed consolidated statements of operations is set out as follows (in thousands):
Quarter Ended ------------- December March 31, 31, March 31, March 31, 2010 2010 2011 2011 ---- ---- ---- ---- USD (Note RMB RMB RMB 1) Share-based compensation cost included in: Cost of revenue 1,670 8,081 13,602 2,077 Operating expenses -Selling and marketing expenses 320 1,869 3,255 497 -General and administrative expenses 1,823 7,915 11,237 1,716 -Research and development expenses 2,048 6,643 10,144 1,549
Note 3: In the fourth quarter of 2010, management of the Company decided to allocate facility costs comprising of office and staff quarter rentals and management fees, building amortization and miscellaneous utility costs previously recorded under general and administration to the respective functions based on headcount under cost of revenue, selling and marketing, research and development and general and administration. The change was implemented to better reflect staff-related operating cost. Reclassifications have been made to cost of revenue and operating expense amounts in the condensed consolidated statements of operations and segment information for the relevant prior period in order to conform to the current period's presentation. There is no change to the condensed consolidated balance sheets and the condensed consolidated statements of cash flows.
Contact for Media and Investors: Brandi Piacente Investor Relations brandi@corp.Flywowgold.com Tel: (+1) 212-481-2050 Li Jia Flywowgold.com, Inc. liddyli@corp.Flywowgold.com Tel: (+8610) 8255-8208
SOURCE Flywowgold.com, Inc.
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