LOS ANGELES and HONG KONG, Aug. 13 /PRNewswire-Asia/ -- Artificial Life, Inc. (OTC BB: ALIF), ( http://www.artificial-li... ) today announced its second quarter 2009 with the highest quarterly revenues in the Company's history and revenue growth of over 38% compared to Q2 2008.
As for the financial results:
REVENUES: Revenues for the quarter ended June 30, 2009 were $7,577,969 as compared to $5,481,470 for the quarter ended June 30, 2008. The increase in revenues of $2,096,499 or 38% was mainly due to increased (a) product license revenue from mobile games, one-time downloads, (b) monthly subscription revenues for 3G games derived from mobile operators, bulk resellers and hand set distributors and (c) license revenues from the sale of our technology platform Mobile Booster(TM).
COST OF REVENUES: Cost of revenues mainly consisted of amortization of intangible assets. Cost of revenues for the quarter ended June 30, 2009 was $1,097,607 as compared to $669,046 for the quarter ended June 30, 2008. The increase of $428,561, or 64%, was primarily due to the amortization of license rights.
GROSS MARGIN: Gross margin for the quarter ended June 30, 2009 was $6,480,362 as compared to $4,812,424 for the quarter ended June 30, 2008. The increase of $1,667,938, or 35%, was mainly due to increased product license income from mobile games, one-time downloads and monthly subscription revenues for 3G games derived from mobile operators, bulk resellers and hand set distributors and a global license deal for the sale of our technology platform offset by amortization of license rights acquired in earlier periods.
GENERAL AND ADMINISTRATIVE: General and administrative expenses consisted of salaries of administrative personnel, rent, professional fees and costs associated with employee benefits, supplies, communications, travel and the provision for doubtful accounts receivable. General and administrative expenses for the quarter ended June 30, 2009 were $1,391,040 as compared to $581,860 for the quarter ended June 30, 2008. The increase of $809,180 was mainly due to a 2009 provision for doubtful accounts receivable, off-set by a decrease in expenses related to public relations and professional services. Due to the global financial crisis and tight cash liquidity for most companies, the Company also has experienced a slow down of payments from clients since the third quarter of 2008. As a cautionary step the company has hence increased its allowance for potential doubtful accounts.
SALES AND MARKETING: Sales and marketing expenses consisted of salaries of sales and marketing personnel and costs relating to marketing materials, advertising, trade shows, traveling and public relations activities. Sales and marketing expenses for the quarter ended June 30, 2009 were $1,040,908 as compared to $513,621 for the quarter ended June 30, 2008. The increase of $527,287 was primarily due to an increased allowance for doubtful accounts, partially offset by a decrease in expenses related to marketing and sub- contracting expenses.
RESEARCH & DEVELOPMENT: Research and development expenses consisted of salary, training, consulting, subcontracting and other expenses incurred to develop and fulfill the design specifications and production of the products and services from which we derive our revenues. Research and development expenses for the quarter ended June 30, 2009 were $924,311 as compared to $826,756 for the quarter ended June 30, 2008. The increase of $97,555 was mainly due to the increase in consulting expenses.
OTHER EXPENSE/INCOME: Other expenses for the quarter ended June 30, 2009 totaled $209,899, as compared to other income of $175,882 for the quarter ended June 30, 2008. The other expenses of $209,899 were mainly due to income of $109,483, interest expense of $36,228 and foreign currency transaction losses of approximately $283,154 in this quarter compared to a gain of approximately $190,000 (primarily resulting from foreign currency transaction gains) in the second quarter of 2008.
INCOME FROM OPERATIONS AND NET INCOME: Income from operations for the quarter ended June 30, 2009 was $3,124,103 as compared to income from operations of $2,890,187 for the quarter ended June 30, 2008. Income from operations was mainly due to revenue of $7,577,969 from the sale of product licenses for our mobile games and technology licenses, which was offset by costs of revenue of $1,097,607 and operational costs of $3,356,259. Net income for the quarter ended June 30, 2009 was $2,771,204, compared to net income of $2,690,314 for the quarter ended June 30, 2008. Basic and diluted net income per share for the second quarter of 2009 was $0.06, as compared to $0.06 and $0.05, respectively, for the quarter ended June 30, 2008.
'Until end of July 2009, we sold over 8 million mobile 3G and Java games globally and generated over 3 million downloads for the iPhone/iPod Touch. Many of our games have reached TOP 10 rankings globally and we have had TOP 10 positions in about 90% of all countries in which the iPhone is officially sold. Hence, the second quarter and the first half of 2009 were strong despite the global financial crisis. We were able to keep our expansion and profitability. For the remainder of the year we expect to continue to grow and release several strong new branded game titles and soon also our first iPhone business applications' said Eberhard Schoneburg, CEO of Artificial Life, Inc.
(iPhone and iPod are trademarks of Apple Inc. iPod is registered in the US and other countries.)
About Artificial Life, Inc.
Artificial Life, Inc. (OTC BB: ALIF) is a public U.S. corporation headquartered in Los Angeles, with its production center in Hong Kong and additional offices in Berlin (EMEA headquarters) and Tokyo. As a leading, full-service provider of mobile broadband 3G technology, mobile participation TV, mobile gaming, content and business applications, Artificial Life provides 2D and 3D multi- and single-player rich-media applications for 3G, 3.5G and 4G network-enabled mobile phones. Recognized internationally for outstanding content quality and technology, Artificial Life transcends traditional modes of mobile communications and interactive gaming. For more information, please visit http://www.artificial-li... or the company's m-commerce portal at http://www.botme.com .
Forward-Looking Statements:
This press 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. Such forward-looking statements include, without limitation, statements regarding our future results of operations, financial condition and business prospects. In some cases, you can identify forward-looking statements by terminology such as 'may', 'will', 'should', 'expect', 'intend', 'plan', 'anticipate', 'believe', 'estimate', 'predict', 'potential', 'continue' or the negative of these terms or other comparable terminology. Although such statements are based on our own information and information from other sources we believe to be reliable, you should not place undue reliance on them. These statements involve risks and uncertainties, and actual market trends or our actual results of operations, financial condition or business prospects may differ materially from those expressed or implied in these forward looking statements for a variety of reasons. Potential risks and uncertainties include, but are not limited to, our ability to obtain additional funding to operate and grow our business; the unproven potential of our mobile gaming business model; changing consumer preferences and uncertainty of market acceptance of our products; timely adoption and availability of 3G mobile technology; market acceptance for use of mobile handheld devices to play the interactive games; unpredictable mobile game development schedules; our reliance on a relatively small number of brands; our ability to license brands from others; our dependence upon resellers and telecommunication carriers and operators to distribute our products; our ability to successfully develop, introduce, and sell new or enhanced products in a timely manner; and the timing of new product announcements or introductions by us or by our competitors. For additional discussion of these risks and uncertainties and other factors, please see the documents we file from time to time with the Securities and Exchange Commission, including our Annual Report on Form 10-K filed on February 9, 2009. We assume no obligation to update any forward-looking statements, which apply only as of the date of this press release.
Artificial Life IR Contact:
Annie Lau
Tel: +852-3102-2800
Email: ir@artificial-life.com
SOURCE Artificial Life, Inc.
Source: PR Newswire (August 13, 2009 - 7:00 AM EDT)
