BEIJING, Dec. 14, 2017 /PRNewswire/ -- NQ Mobile Inc.
("NQ Mobile" or the "Company") (NYSE: NQ), a leading global
provider of mobile internet services, today announced its unaudited
financial results for the first, second, and third quarters ended
March 31, 2017, June 30, 2017, and September 30, 2017 respectively.
Beginning with this period for the reported results for the
first, second, and third quarters of 2017, FL Mobile Jiutian
Technology Co., Ltd ("FL Mobile") and the live social mobile video
business of Showself (Beijing)
Technology Co., Ltd ("Showself") have been classified as
discontinued operations. Therefore, given the significance of FL
Mobile and Showself's live social mobile video business in previous
periods, to enhance the comparability of these results going
forward, the figures reported in this earning release have
reflected these changes and the comparable periods presented have
also been adjusted retrospectively. However, given the significant
effect on operating results and reported financial information
related to the divestments of FL Mobile and Showself's businesses,
and the classification as discontinued operations, the key
financial data is quantified in the discontinued section of each
quarter below.
In addition, beginning with these reported results for the
first, second, and third quarters of 2017 and going forward, the
Company will report its revenue streams in the following two
categories: Consumer and Enterprise. Revenues from consumers will
consist of revenues from advertising services and revenues from
other services (including mobile security revenues, excluding
mobile gaming and mobile social network revenues which are part of
the FL Mobile and Showself group which has been classified as
discontinued operations). Revenues from enterprises will be broken
down into product and service revenues. Revenues from products will
come from hardware sales to enterprise users. Revenues from
services will come from technology and software development
services to enterprise users.
Highlights For The Nine Months Period From January 1, 2017 to September 30, 2017
- Net Revenues of $44.2 million
for the nine months ended September 30,
2017, up slightly from $43.2
million in the same period a year ago. GAAP Net Loss
attributable to NQ Mobile for the nine months ended September 30, 2017 was $116.7 million or $1.16 per fully diluted ADS. This included the
one-time, non-cash impairment of goodwill and intangible assets of
$97.9 million during the
period.
- Non-GAAP Net Income attributable to NQ Mobile for the nine
months ended September 30, 2017 was
$15.1 million or $0.15 per fully diluted ADS.
"We look forward to moving forward with our future plans in the
smart car businesses," said Mr. Zemin
Xu, CEO of NQ Mobile Inc. "The Company is financially
positioned and strategically positioned to participate in this
enormous market."
"With the Divestments closed, we can now move ahead focused on
the future business opportunities and growth," said Mr.
Roland Wu, CFO of NQ Mobile Inc. "We
have taken great strides in readying our organization around these
future opportunities and we look forward to sharing our progress in
the coming year."
First Quarter 2017 Results
Revenues
Net revenues in the first quarter of 2017 decreased 26.3%
year-over-year to $12.0 million from
$16.3 million in the same period in
2016.
Consumer Services revenues consist of advertising and other
consumer services. Advertising revenues decreased 34.1%
year-over-year to $2.3 million from
$3.5 million in the same period in
2016. The decrease in advertising revenues was mainly due to lower
overall activity within many of the traffic-related businesses as
the Company prepares to optimize its operations and focus to the
smart car businesses in the future. Other services revenues
decreased 48.0% year-over-year to $1.0
million from $1.9 million in
the same period in 2016. The decrease in other services
revenues was mainly due to lower premium consumer security revenues
as a result of the Company moving away from premium subscription
services to an advertising-based model.
Enterprise Product revenues decreased 15.9% year-over-year to
$8.5 million from $10.1 million in the same period in 2016. The
decrease in enterprise product revenues was mainly due to weakness
in customer demand in the first quarter of the year compared to the
same period of last year.
Cost of Revenues
Cost of revenues in the first quarter of 2017 decreased 26.1%
year-over-year to $12.9 million from
$17.5 million in the same period in
2016. The year-over-year decrease was mainly due to lower hardware
sales within the enterprise business and lower preload costs within
the consumer services segment.
Gross Loss and Gross Margin
Gross loss in the first quarter of 2017 narrowed 23.0% to
$0.9 million from $1.2 million in the same period in 2016. Negative
gross margin, or gross loss as a percentage of net revenues, was
7.5% for the first quarter of 2017 and 7.2% for the first quarter
of 2016.
Operating Expenses
Selling and marketing expenses in the first quarter of 2017
decreased 25.7% year-over-year to $1.1
million from $1.5 million in
the same period in 2016. Non-GAAP selling and marketing expenses,
which exclude share-based compensation decreased 18.5%
year-over-year to $1.1 million from
$1.4 million in the same period in
2016. The year-over-year decrease is primarily driven by a
reduction in overall staff costs and lower overall marketing and
advertising expenses.
General and administrative expenses in the first quarter of 2017
decreased 48.2% year-over-year to $8.7
million from $16.8 million in
the same period in 2016. Non-GAAP general and administrative
expenses, which exclude share-based compensation and amortization
of intangible assets arising from acquisitions, increased 3.9%
year-over-year to $8.7 million from
$8.4 million in the same period in
2016.
Research and development expenses in the first quarter of 2017
increased 34.3% year-over-year to $3.5
million from $2.6 million in
the same period in 2016. Non-GAAP research and development
expenses, which exclude share-based compensation and amortization
of intangible assets arising from acquisitions, increased 49.0% to
$3.4 million from $2.3 million in the same period in 2016. The
increase is mainly due to the Linkmotion business and some pilot
projects.
Impairment of goodwill and intangible assets in the first
quarter of 2017 was $80.6 million as
the result of a one-time, non-cash impairment of goodwill and
intangible assets in the remaining portion of the Security and
Others reporting unit upon the disposal of Showself which qualifies
as held for sale as of March 31, 2017
and triggers to impairment test for the remaining portion of this
reporting unit as of March 31, 2017.
The goodwill impairment loss for the remaining portion of this
reporting unit was $77.8 million.
Total operating expenses in the first quarter of 2017 increased
348.3% year-over-year to $93.9
million from $21.0 million in
the same period in 2016 driven mostly from the one-time, non-cash
impairment of goodwill and intangible assets recorded in the first
quarter of 2017 of $80.6 million.
Excluding the impairment of goodwill and intangible assets in the
first quarter, total operating expenses decreased 36.4%
year-over-year to $13.3 million from
$21.0 million in the same period in
2016.
Non-GAAP operating expenses, which exclude share-based
compensation, the amortization of intangible assets arising from
acquisitions, and impairment of goodwill and intangible assets in
the first quarter of 2017 increased 9.8% year-over-year to
$13.2 million from $12.0 million in the same period in
2016 due to the reasons detailed above in each respective operating
expense category.
Share-based compensation expenses
Share-based compensation expenses, which were allocated to
related operating cost and expenses line items, amounted to
$0.1 million in the first quarter of
2017, compared to $8.1 million in the
corresponding period in 2016, mainly due to a one-time immediately
vested awards granted in the first quarter of 2016 and no new
grants during the period.
Loss from Operations
Loss from operations in the first quarter of 2017 was
$94.8 million, compared with
$22.1 million in the same period in
2016, which was greatly impacted by the one-time, non-cash
impairment of goodwill and intangible assets of $80.6 million in the first quarter of 2017.
Excluding the impact of the impairment of goodwill and intangible
assets in the first quarter of 2017, loss from operations was
$14.2 million, compared with
$22.1 million in the same period in
2016.
Non-GAAP loss from operations, which excludes share-based
compensation, amortization of intangible assets arising from
acquisitions, and impairment of goodwill and intangible assets, was
$13.6 million compared to
$12.4 million in the same period in
2016.
Foreign Exchange gain/ (loss), and Interest Expenses
Foreign exchange gain was $0.2
million in the first quarter of 2017, compared with a loss
of $0.02 million in the same quarter
of the previous year, which was affected by fluctuations in the
foreign exchange rates. Interest expenses were $6.4 million in the first quarter of 2017,
compared with $1.8 million in the
same quarter a year ago. Interest expenses were primarily derived
from interest expense related to convertible debts, offset by the
interest income from certain term deposits.
Realized gain on Disposal of a Subsidiary
In the first quarter of 2017, we recorded a gain from the
disposal of a subsidiary of $1.0
million, which was primarily driven by one-time non-cash
gain related to the disposal of one of our enterprise
businesses.
Income Tax
Income tax benefit was $0.5
million in the first quarter of 2017, compared with income
tax benefit of $0.4 million in the
same period in 2016.
Discontinued Operations
The Company presents FL Mobile and Showself's live social mobile
video business as assets/liabilities held for sale on the balance
sheets and as discontinued operation on the statements of
operations for the quarter ended March 31,
2017 and also applied to all comparative periods presented.
The total net revenues, net income attributable to us, and net
income attributable to our non-controlling interests from FL Mobile
for the three months ended March 31,
2017 was $35.9 million,
$3.9 million, and $2.3 million, respectively. The total net
revenues, net income attributable to us, and net income
attributable to our non-controlling interests from Showself for the
three months ended March 31, 2017 was
$27.7 million, $3.0 million, and $1.5
million, respectively. Income from discontinued operations,
net of income tax, was $10.7 million
in the first quarter of 2017 compared to $14.5 million in the same period in 2016, the
decrease in income from discontinued operations was due to the
increase of customer acquisition cost.
Net Loss
Net loss attributable to NQ Mobile was $71.4 million in the first quarter of 2017,
compared with net loss of $7.8
million in the same period in 2016. Non-GAAP net income
attributable to NQ Mobile, which excludes share-based compensation,
interest expenses related to convertible debts and fair value
change of derivative liability, amortization of intangible assets
arising from acquisitions, impairment losses from goodwill,
intangible assets and investment, and income tax provision related
to the amortization of intangible assets arising from acquisitions
and impairment loss from goodwill, intangible assets and
investment, was $15.7 million in the
first quarter of 2017, compared with non-GAAP net income
attributable to NQ Mobile of $5.4
million in the same period in 2016.
Cash and Cash Equivalents and Term Deposits
Cash and cash equivalents and term deposits amounted to
$270.4 million as of March 31, 2017.
Cash Flow
Net cash flow used in operations for the first quarter of 2017
was $13.8 million.
Second Quarter 2017 Results
Revenues
Net revenues in the second quarter of 2017 increased 15.3%
year-over-year to $14.7 million from
$12.7 million in the same period in
2016.
Consumer Services revenues consist of advertising and other
consumer services. Advertising revenues decreased 48.6%
year-over-year to $2.6 million from
$5.0 million in the same period in
2016. The decrease in advertising revenues was mainly due to lower
overall activity within many of the traffic-related businesses as
the Company prepares to optimize its operations and focus to the
smart car businesses in the future. Other services revenues
decreased 38.8% year-over-year to $0.9
million from $1.5 million in
the same period in 2016. The decrease in other services revenues
was mainly due to lower premium consumer security revenues as a
result of the Company moving away from premium subscription
services to an advertising based model.
Enterprise Product revenues increased 96.4% year-over-year to
$11.1 million from $5.6 million in the same period in 2016. The
increase in enterprise product revenues was mainly due to stronger
overall hardware sales at Trustek.
Cost of Revenues
Cost of revenues in the second quarter of 2017 increased 31.6%
year-over-year to $15.4 million from
$11.7 million in the same period in
2016. The year-over-year increase was mainly due to higher hardware
sales within the enterprise business and higher customer
acquisition costs within the consumer services segment.
Gross Loss and Gross Margin
Gross loss in the second quarter of 2017 was $0.7 million compared with a gross profit of
$1.1 million in the same period in
2016. Negative gross margin, or gross loss as a percentage of net
revenues, was 4.5% for the second quarter of 2017.
Operating Expenses
Selling and marketing expenses in the second quarter of 2017
decreased 45.2% year-over-year to $1.3
million from $2.3 million in
the same period in 2016. Non-GAAP selling and marketing expenses,
which exclude share-based compensation decreased 33.3%
year-over-year to $1.3 million from
$2.0 million in the same period in
2016. The year-over-year decrease is primarily driven by a
reduction in overall staff costs and lower overall marketing and
advertising expenses.
General and administrative expenses in the second quarter of
2017 increased 90.8% year-over-year to $13.6
million from $7.1 million in
the same period in 2016. The increase in G&A expenses came
mostly from the increase in share-based compensation expenses in
the period. Non-GAAP general and administrative expenses, which
exclude share-based compensation and amortization of intangible
assets arising from acquisitions, increased 42.5% year-over-year to
$8.3 million from $5.9 million in the same period in 2016. The
increase in Non-GAAP G&A expenses mainly due to increase in
legal, professional and consulting fees in the period.
Research and development expenses in the second quarter of 2017
increased 3.1% year-over-year to $3.5
million from $3.4 million in
the same period in 2016. Non-GAAP research and development
expenses, which exclude share-based compensation and amortization
of intangible assets arising from acquisitions, increased 12.7% to
$3.5 million from $3.1 million in the same period in 2016. The
increase is mainly due to the Linkmotion business and some pilot
projects.
Total operating expenses in the second quarter of 2017 increased
43.1% year-over-year to $18.3 million
from $12.8 million in the same period
in 2016.
Non-GAAP operating expenses, which exclude share-based
compensation, the amortization of intangible assets arising from
acquisitions, and impairment of goodwill and intangible assets in
the second quarter of 2017 increased 20.4% year-over-year to
$13.1 million from $10.9 million in the same period in 2016.
Share-based compensation expenses
Share-based compensation expenses, which were allocated to
related operating cost and expenses line items, amounted to
$5.1 million in the second quarter of
2017, compared to $1.1 million in the
corresponding period in 2016. The increase was mainly due to the
issuance of new restricted shares pursuant to incentives and
employment contracts.
Loss from Operations
Loss from operations in the second quarter of 2017 was
$19.0 million, compared with
$11.7 million in the same period in
2016.
Non-GAAP loss from operations, which excludes share-based
compensation, amortization of intangible assets arising from
acquisitions, and impairment of goodwill and intangible assets, was
$13.5 million compared to
$8.7 million in the same period in
2016.
Foreign Exchange gain/ (loss), and Interest Expenses
Foreign exchange gain was $0.2
million in the second quarter of 2017, compared with a loss
of $0.3 million in the same quarter
of the previous year, which was affected by fluctuations in the
foreign exchange rates. Interest expenses were $6.4 million in the second quarter of 2017,
compared with $1.8 million in the
same quarter a year ago. Interest expenses were primarily derived
from interest expense related to convertible debts, offset by the
interest income from certain term deposits.
Income Tax
Income tax benefit was $0.2
million in the second quarter of 2017, compared with income
tax benefit of $0.3 million in the
same period in 2016.
Discontinued Operations
The Company presents FL Mobile and Showself's live social mobile
video business as assets/liabilities held for sale on the balance
sheets and as discontinued operation on the statements of
operations for the quarter ended June 30,
2017 and also applied to all comparative periods presented.
The total net revenues, net income attributable to us, and net
income attributable to our non-controlling interests from FL Mobile
for the three months ended June 30,
2017 was $42.2 million,
$2.3 million, and $1.3 million, respectively. The total net
revenues, net income attributable to us, and net income
attributable to our non-controlling interests from Showself for the
three months ended June 30, 2017 was
$29.3 million, $3.3 million, and $1.7
million, respectively. Income from discontinued operations,
net of income tax, was $8.6 million
in the second quarter of 2017 compared to $18.4 million in the same period in 2016, mainly
due to the increase of customer acquisition cost.
Net (Loss)/Income
Net Loss attributable to NQ Mobile was $20.9 million in the second quarter of 2017,
compared with a net income of $0.5
million in the same period in 2016. Non-GAAP net loss
attributable to NQ Mobile, which excludes share-based compensation,
interest expenses related to convertible debts and fair value
change of derivative liability, amortization of intangible assets
arising from acquisitions, impairment losses from goodwill,
intangible assets and investment, and income tax provision related
to the amortization of intangible assets arising from acquisitions
and impairment loss from goodwill, intangible assets and
investment, was $4.9 million in the
second quarter of 2017, compared with non-GAAP net income
attributable to NQ Mobile of $6.8
million in the same period in 2016.
Cash and Cash Equivalents and Term Deposits
Cash and cash equivalents and term deposits amounted to
$243.6 million as of June 30, 2017.
Cash Flow
Net cash used in operations for the second quarter of 2017 was
27.1million.
Third Quarter 2017 Results
Revenues
Net revenues in the third quarter of 2017 increased 23.7%
year-over-year to $17.5 million from
$14.1 million in the same period in
2016.
Consumer Services revenues consist of advertising and other
consumer services. Advertising revenues decreased 45.2%
year-over-year to $2.3 million from
$4.2 million in the same period in
2016. The decrease in advertising revenues was mainly due to
lower overall activity within many of the traffic-related
businesses as the Company prepares to optimize its operations and
focus to the smart car businesses in the future. Other
services revenues decreased 15.5% year-over-year to $1.2 million from $1.4
million in the same period in 2016. The decrease in
other services revenues was mainly due to lower premium consumer
security revenues as a result of the Company moving away from
premium subscription services to an advertising based model.
Enterprise Product revenues increased 71.4% year-over-year to
$13.8 million from $8.0 million in the same period in 2016. The
increase in enterprise product revenues was mainly due to stronger
overall hardware sales at Trustek.
Cost of Revenues
Cost of revenues in the third quarter of 2017 increased 17.5%
year-over-year to $16.9 million from
$14.4 million in the same period in
2016. The year-over-year increase was mainly due to higher hardware
sales within the enterprise business and higher customer
acquisition costs within the consumer services segment.
Gross Profit/Loss and Gross Margin
Gross Profit in the third quarter of 2017 was $0.6 million compared with a gross loss of
$0.3 million in the same period in
2016. Gross margin, or gross profit as a percentage of net
revenues, was 3.3% for the third quarter of 2017.
Operating Expenses
Selling and marketing expenses in the third quarter of 2017
decreased 32.7% year-over-year to $1.2
million from $1.8 million in
the same period in 2016. Non-GAAP selling and marketing expenses,
which exclude share-based compensation decreased 34.3%
year-over-year to $1.2 million from
$1.8 million in the same period in
2016. The year-over-year decrease is primarily driven by a
reduction in overall staff costs and lower overall marketing and
advertising expenses.
General and administrative expenses in the third quarter of 2017
decreased 46.6% year-over-year to $6.7
million from $12.6 million in
the same period in 2016. Non-GAAP general and administrative
expenses, which exclude share-based compensation and amortization
of intangible assets arising from acquisitions, decreased 23.7%
year-over-year to $6.6 million from
$8.6 million in the same period in
2016.
Research and development expenses in the third quarter of 2017
decreased 19.4% year-over-year to $2.6
million from $3.2 million in
the same period in 2016. Non-GAAP research and development
expenses, which exclude share-based compensation and amortization
of intangible assets arising from acquisitions, decreased 20.6%
year-over-year to $2.5 million from
$3.1 million in the same period in
2016. The decrease is mainly due to lower overall spend associated
with consumer and traffic related businesses as the Company shifts
its focus to the smart car businesses in the future.
Impairment of goodwill and intangible assets in the third
quarter of 2017 was $17.3 million as
the result of a one-time, non-cash impairment of goodwill and
intangible assets in the remaining portion of the Security and
Others reporting unit.
Total operating expenses in the third quarter of 2017 increased
58.1% year-over-year to $27.7 million
from $17.5 million in the same period
in 2016. The increase was due to the impairment of goodwill and
intangible assets from the remaining portion of the Security and
Others reporting unit.
Non-GAAP operating expenses, which exclude share-based
compensation, the amortization of intangible assets arising from
acquisitions, and impairment of goodwill and intangible assets in
the third quarter of 2017 decreased 24.4% year-over-year to
$10.2 million from $13.5 million in the same period in 2016.
Share-based Compensation Expenses
Share-based compensation expenses, which were allocated to
related operating cost and expense line times, amounted to
$0.2 million in the third quarter of
2017, compared to $3.4 million in the
corresponding period in 2016.
Loss from Operations
Loss from operations in the third quarter of 2017 was
$27.2 million, compared to
$17.8 million in the same period in
2016.
Non-GAAP loss from operations, which excludes share-based
compensation, amortization of intangible assets arising from
acquisitions, and impairment of goodwill and intangible assets, was
$9.4 million compared to $12.8 million in the same period in 2016.
Foreign Exchange gain/(loss), and Interest Expenses
Foreign exchange gain was $0.3
million in the third quarter of 2017, compared with a loss
of $0.3 million in the same quarter
of the previous year, which was affected by fluctuations in the
foreign exchange rates. Interest expenses were $6.4 million in the third quarter of 2017,
compared to $1.9 million in the same
quarter a year ago. Interest expenses were primarily derived
from interest expenses related to convertible debts, offset by the
interest income from certain term deposits.
Income Tax
Income tax benefit was $0.6
million in the third quarter of 2017, compared with income
tax benefit of $1.0 million in the
same period in 2016.
Discontinued Operations
The Company presents FL Mobile and Showself's live social mobile
video business as assets/liabilities held for sale on the balance
sheets and as discontinued operation on the statements of
operations for the quarter ended September
30, 2017 and also applied to all comparative periods
presented. The total net revenues, net income attributable to us,
and net income attributable to our non-controlling interests from
FL Mobile for the three months ended September 30, 2017 was $43.5 million, $2.0
million, and $1.8 million,
respectively. The total net revenues, net income attributable to
us, and net income attributable to our non-controlling interests
from Showself for the three months ended September 30, 2017 was $32.8 million, $4.6
million, and $2.2 million,
respectively. Income from discontinued operations, net of income
tax, was $10.6 million in the third
quarter of 2017 compared to $14.7
million in the same period in 2016, mainly due to the
increase of customer acquisition cost.
Net (Loss)/Income
Net Loss attributable to NQ Mobile was $24.4 million in the third quarter of 2017,
compared with $9.0 million in the
same period in 2016. Non-GAAP net income attributable to NQ Mobile,
which excludes share-based compensation, interest expenses related
to convertible debts and fair value change of derivative liability,
amortization of intangible assets arising from acquisitions,
impairment losses from goodwill, intangible assets and investment,
and income tax provision related to the amortization of intangible
assets arising from acquisitions and impairment loss from goodwill,
intangible assets and investment, was $4.3
million in the third quarter of 2017, compared with non-GAAP
net loss attributable to NQ Mobile of $0.2
million in the same period in 2016.
Cash, Cash Equivalents, Term Deposits and Restricted
Cash
Cash, cash equivalents, term deposits, and restricted cash
amounted to $248.8 million as of
September 30, 2017.
Cash Flow
Net cash used in operations for the third quarter of 2017 was
$11.7 million.
Other Significant Events
Completion of the FL Mobile Divestment and the Sale of
Showself's Live Social Video Business
The Company announced in a press release on December 14, 2017 that it had completed the
divestment of FL Mobile and sale of Showself's Live Social Video
Business. The Company received in aggregate a total of
approximately RMB3,320 million,
consisting of approximately RMB1,550
million in cash and RMB1,770
million in a senior note, which together totals 100% of the
agreed upon price pursuant to the definitive agreements with
Tongfang Investment Fund Series SPC (the "Investor"), an affiliate
of Tongfang Securities Limited, a part of Tsinghua Tongfang. The
key terms of the senior note include an interest payment of 8% per
annum for 12 months, and may be extended for another 12 months at
the Company's option, and can be redeemed early by the Investor for
principle plus accrued interest in cash payments to the Company at
any time.
Buyback Program
The Company announced on November 13,
2017 that its board of directors has authorized a buyback
program under which the Company may repurchase up to $150 million of its shares or early partial
redemption of the convertible notes over the next 12 months. The
repurchases may be made from time to time on the open market, in
privately negotiated transactions, in block trades and/or through
other legally permissible means, depending on market conditions and
in accordance with all applicable rules and regulations. The
Company plans to fund the repurchases made under this plan from
existing cash on hand.
Subsequent to the announcement on November 13, 2017, the Company provided an update
to its buyback program. On November 20,
2017, the Company announced it had negotiated with Zhongzhi
Hi-Tech Overseas Investment Limited ("Zhongzhi") for an early
partial redemption of the convertible note and reached an agreement
to redeem $88 million of the
principal amount of the convertible notes issued to Zhongzhi in
October 2016. In addition, the
Company and Zhongzhi agreed that if Zhongzhi converts the remaining
$132 million of convertible notes to
the Company's American Depository Shares ("ADS") on or before
March 31, 2018, the conversion price
will be revised to $5.00 per
ADS. If Zhongzhi converts the remaining $132 million of convertible notes after
March 31, 2018 to the note's maturity
the conversion price will remain $6.00 per ADS.
NQ Mobile Files Form 20-F for the year 2016
As announced on April 26, 2017,
the Company filed its annual report for the year ended December 31, 2016 on Form 20-F with the
Securities and Exchange Commission. The annual report, which
contains the unqualified audited financial statements for the three
years ended December 31, 2016, can be
accessed and downloaded through the investor relations section of
the Company's website at http://ir.nq.com.
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 Thursday, December 14, 2017 (8:30 AM Beijing/Hong Kong Time on Friday,
December 15, 2017).
The dial-in details for the conference call are:
U.S. Toll Free: 1-866-519-4004
International: 1-845-675-0437
United Kingdom: +44 203-621-4779
China Mainland: 4006208038 or
8008190121
Conference ID: 5391237
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 11:00 p.m. U.S. Eastern Time on
Thursday, December 14, 2017 through
December 21, 2017. The dial-in
details for the replay are:
U.S. Toll Free: +1-855-452-5696
International: +1-646-254-3697
Conference ID: 32786286
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.
Follow us on Twitter @NQMobileIR.
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 loss attributable to NQ Mobile, which are adjusted from results
based on GAAP to exclude share-based compensation expenses,
interest expenses related to convertible debts and fair value
change of derivative liability, amortization of intangible assets
arising from acquisitions, and impairment losses and taxes impact.
The Company also uses non-GAAP fully diluted earnings per ADS,
which is the non-GAAP net (loss)/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 loss attributable to NQ Mobile, excluding
share-based compensation expenses, interest expenses related to
convertible debts and fair value change of derivative liability,
amortization of intangible assets arising from acquisitions, and
impairment losses and taxes impact 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,
2017
|
|
June
30,
2017
|
|
March
31,
2017
|
|
December
31,
2016
|
|
|
US$
|
|
US$
|
|
US$
|
|
US$
|
ASSETS
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
9,896
|
|
13,661
|
|
44,616
|
|
43,220
|
Term
deposits
|
|
228,065
|
|
229,978
|
|
225,830
|
|
223,728
|
Restricted
cash
|
|
10,848
|
|
-
|
|
-
|
|
-
|
Accounts
receivable, net of allowance of US$21,790,
US$20,481, US$18,544 and US$16,423 as of September 30,
June 30, March 31, 2017 and December 31, 2016
respectively
|
|
11,086
|
|
12,721
|
|
12,324
|
|
16,148
|
Inventory
|
|
3,878
|
|
1,707
|
|
3,784
|
|
1,922
|
Deferred tax assets,
current portion
|
|
-
|
|
-
|
|
-
|
|
188
|
Prepaid expenses and
other current assets, net of allowance of
US$7,257, US$7,160, US$7,076 and US$7,144 as of
September 30, June 30, March 31, 2017 and December 31,
2016, respectively
|
|
31,264
|
|
35,561
|
|
35,710
|
|
33,907
|
Assets held for sale
classified as current assets
|
|
365,299
|
|
361,423
|
|
356,260
|
|
176,585
|
Total current
assets
|
|
660,336
|
|
655,051
|
|
678,524
|
|
495,698
|
Non-current
assets:
|
|
|
|
|
|
|
|
|
Equity investments,
net
|
|
86,018
|
|
85,792
|
|
75,733
|
|
67,911
|
Property and
equipment, net
|
|
2,548
|
|
2,650
|
|
2,689
|
|
2,798
|
Intangible assets,
net
|
|
1,872
|
|
5,089
|
|
5,549
|
|
9,067
|
Goodwill
|
|
6,512
|
|
20,639
|
|
20,279
|
|
118,851
|
Deferred tax assets,
non-current portion
|
|
1,865
|
|
1,582
|
|
1,461
|
|
1,427
|
Consideration prepaid
for acquiring an investee
|
|
1,354
|
|
1,354
|
|
990
|
|
4,081
|
Other non-current
assets
|
|
3,591
|
|
3,303
|
|
232
|
|
1,003
|
Assets held for sale
classified as non-current assets
|
|
-
|
|
-
|
|
-
|
|
152,792
|
Total
Assets
|
|
764,096
|
|
775,460
|
|
785,457
|
|
853,628
|
LIABILITIES
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
Advance from
customers
|
|
3,012
|
|
1,202
|
|
993
|
|
852
|
Accounts
payable
|
|
6,827
|
|
7,877
|
|
8,672
|
|
8,537
|
Deferred
revenue
|
|
4,528
|
|
4,413
|
|
4,358
|
|
4,626
|
Consideration
received from shareholder
|
|
48,625
|
|
47,638
|
|
46,776
|
|
46,521
|
Consideration
received from investors
|
|
28,355
|
|
28,587
|
|
28,182
|
|
-
|
Accrued expenses and
other current liabilities
|
|
8,375
|
|
15,414
|
|
20,700
|
|
20,039
|
Tax
payable
|
|
2,797
|
|
2,980
|
|
2,965
|
|
2,946
|
Short term
borrowing
|
|
5,850
|
|
2,850
|
|
2,850
|
|
2,850
|
Liabilities held for
sale classified as current liabilities
|
|
55,133
|
|
55,232
|
|
62,362
|
|
73,272
|
Total current
liabilities
|
|
163,502
|
|
166,193
|
|
177,858
|
|
159,643
|
Non-current
liabilities:
|
|
|
|
|
|
|
|
|
Derivative liability
of contingent interest
|
|
9,716
|
|
8,336
|
|
5,419
|
|
7,205
|
Convertible debt, net
of unamortized debt issuance costs and
derivative liability of contingent interest
|
|
212,403
|
|
210,553
|
|
208,766
|
|
207,040
|
Deferred tax
liabilities
|
|
1,721
|
|
2,136
|
|
2,446
|
|
3,247
|
Liabilities held for
sale classified as non-current liabilities
|
|
-
|
|
-
|
|
-
|
|
729
|
Total
Liabilities
|
|
387,342
|
|
387,218
|
|
394,489
|
|
377,864
|
|
|
|
|
|
|
|
|
|
EQUITY
|
|
|
|
|
|
|
|
|
NQ Mobile Inc.'s
shareholders' equity
|
|
299,777
|
|
312,065
|
|
317,292
|
|
385,843
|
Non-controlling
interest
|
|
76,977
|
|
76,177
|
|
73,676
|
|
89,921
|
Total
equity
|
|
376,754
|
|
388,242
|
|
390,968
|
|
475,764
|
Total Liabilities
and Equity
|
|
764,096
|
|
775,460
|
|
785,457
|
|
853,628
|
NQ MOBILE INC.
UNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF COMPREHENSIVE LOSS
(In thousands, except for share and per share data)
|
|
|
|
|
|
|
|
Three months
ended
|
|
|
September
30,
2017
|
June
30,
2017
|
|
March
31,
2017
|
|
September
30, 2016
|
|
June
30,
2016
|
|
March
31,
2016
|
|
|
|
US$
|
|
US$
|
|
US$
|
|
US$
|
|
US$
|
|
US$
|
|
Net
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-Advertising
|
|
2,317
|
|
2,594
|
|
2,308
|
|
4,225
|
|
5,043
|
|
3,501
|
|
-Other
services
|
|
1,191
|
|
919
|
|
998
|
|
1,410
|
|
1,501
|
|
1,920
|
|
Enterprise
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-Sales of
product
|
|
13,790
|
|
11,092
|
|
8,481
|
|
8,047
|
|
5,649
|
|
10,083
|
|
-Service
|
|
186
|
|
86
|
|
217
|
|
456
|
|
554
|
|
788
|
|
Total net
revenues
|
|
17,484
|
|
14,691
|
|
12,004
|
|
14,138
|
|
12,747
|
|
16,292
|
|
Cost of
revenues*
|
|
(16,906)
|
|
(15,358)
|
|
(12,910)
|
|
(14,393)
|
|
(11,667)
|
|
(17,469)
|
|
Gross
profit/ (loss)
|
|
578
|
|
(667)
|
|
(906)
|
|
(255)
|
|
1,080
|
|
(1,177)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling and marketing
expenses*
|
|
(1,194)
|
|
(1,258)
|
|
(1,126)
|
|
(1,773)
|
|
(2,296)
|
|
(1,515)
|
|
General and
administrative expenses*
|
(6,715)
|
|
(13,570)
|
|
(8,720)
|
|
(12,579)
|
|
(7,113)
|
|
(16,844)
|
|
Research and
development expenses*
|
(2,573)
|
|
(3,505)
|
|
(3,482)
|
|
(3,194)
|
|
(3,399)
|
|
(2,592)
|
|
Impairment of goodwill
and intangible assets
|
(17,254)
|
|
-
|
|
(80,604)
|
|
-
|
|
-
|
|
-
|
|
Total operating
expenses
|
|
(27,736)
|
|
(18,333)
|
|
(93,932)
|
|
(17,546)
|
|
(12,808)
|
|
(20,951)
|
|
Loss from
operations
|
|
(27,158)
|
|
(19,000)
|
|
(94,838)
|
|
(17,801)
|
|
(11,728)
|
|
(22,128)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
(6,428)
|
|
(6,393)
|
|
(6,385)
|
|
(1,947)
|
|
(1,794)
|
|
(1,800)
|
|
Foreign exchange gain
/(loss), net
|
|
266
|
|
217
|
|
159
|
|
(291)
|
|
(283)
|
|
(22)
|
|
Realized gain on
disposal of a subsidiary
|
-
|
|
-
|
|
1,038
|
|
-
|
|
-
|
|
-
|
|
Investment (loss)
/income , net
|
|
(17)
|
|
47
|
|
5
|
|
770
|
|
(352)
|
|
936
|
|
Investment impairment
loss
|
|
(2,091)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Fair value change of
derivative liability
|
(1,381)
|
|
(2,917)
|
|
1,786
|
|
-
|
|
-
|
|
-
|
|
Other income,
net
|
|
542
|
|
521
|
|
631
|
|
824
|
|
859
|
|
352
|
|
Loss before income
taxes
|
|
(36,267)
|
|
(27,525)
|
|
(97,604)
|
|
(18,445)
|
|
(13,298)
|
|
(22,662)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
benefit
|
|
572
|
|
201
|
|
481
|
|
999
|
|
292
|
|
423
|
|
Net loss from
continuing operation
|
|
(35,695)
|
|
(27,324)
|
|
(97,123)
|
|
(17,446)
|
|
(13,006)
|
|
(22,239)
|
|
Discontinued
operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
discontinued operations
(net of income tax benefit/(expense) of
US$ 1,211, US$197, US$(24), US$ 367,
US$(665) and US$(2,617) for three
months ended September 30, 2017, June
30, 2017, March 31, 2017, September
30, 2, 016June 30, 2016 and March 31,
2016 respectively)
|
10,567
|
|
8,572
|
|
10,702
|
|
14,696
|
|
18,355
|
|
14,467
|
|
Net
(loss)/income
|
|
(25,128)
|
|
(18,752)
|
|
(86,421)
|
|
(2,750)
|
|
5,349
|
|
(7,772)
|
|
Net loss/(income)
attributable to the
non-controlling interest
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable
to the non-
controlling interest from continuing
operation
|
4,670
|
|
852
|
|
18,843
|
|
700
|
|
671
|
|
994
|
|
Net income
attributable to the non-
controlling interest from discontinued
operation
|
(3,969)
|
|
(2,976)
|
|
(3,774)
|
|
(6,972)
|
|
(5,512)
|
|
(1,052)
|
|
Net (loss)/income
attributable to
NQ Mobile Inc.
|
|
(24,427)
|
|
(20,876)
|
|
(71,352)
|
|
(9,022)
|
|
508
|
|
(7,830)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
(loss)/income
|
|
(25,128)
|
|
(18,752)
|
|
(86,421)
|
|
(2,750)
|
|
5,349
|
|
(7,772)
|
|
Other comprehensive
income/(loss):
foreign currency translation adjustment
|
11,402
|
|
9,503
|
|
5,326
|
|
(4,658)
|
|
(17,880)
|
|
3,495
|
|
Comprehensive
loss
|
|
(13,726)
|
|
(9,249)
|
|
(81,095)
|
|
(7,408)
|
|
(12,531)
|
|
(4,277)
|
|
Comprehensive
(income)/loss
attributable to non-controlling interest
|
(800)
|
|
(2,501)
|
|
14,115
|
|
(5,765)
|
|
(3,095)
|
|
(479)
|
|
Comprehensive loss
attributable
to NQ Mobile Inc.
|
|
(14,526)
|
|
(11,750)
|
|
(66,980)
|
|
(13,173)
|
|
(15,626)
|
|
(4,756)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss)/earnings
per Class A and
Class B common share, basic & diluted
|
(0.0481)
|
|
(0.0414)
|
|
(0.1429)
|
|
(0.0182)
|
|
0.0010
|
|
(0.0160)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per Class A
and Class B
common share from continuing
operations, basic & diluted
|
|
(0.0611)
|
|
(0.0525)
|
|
(0.1567)
|
|
(0.0338)
|
|
(0.0252)
|
|
(0.0435)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per Class
A and Class
B common share from discontinued
operations, basic & diluted
|
|
0.0130
|
|
0.0111
|
|
0.0138
|
|
0.0156
|
|
0.0262
|
|
0.0275
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss)/earnings
per ADS, basic &
diluted
|
(0.2405)
|
|
(0.2070)
|
|
(0.7145)
|
|
(0.0910)
|
|
0.0050
|
|
(0.0800)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per ADS from
continuing
operations, basic & diluted
|
|
(0.3055)
|
|
(0.2625)
|
|
(0.7835)
|
|
(0.1690)
|
|
(0.1260)
|
|
(0.2175)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
per ADS from
discontinued operations, basic & diluted
|
0.0650
|
|
0.0555
|
|
0.0690
|
|
0.0780
|
|
0.1310
|
|
0.1375
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares
outstanding:
|
|
|
|
|
|
|
|
|
|
Basic &
Diluted
|
507,475,590
|
504,407,621
|
499,461,680
|
495,837,463
|
490,111,171
|
488,601,213
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*Share-based
compensation expenses included in:
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenues
|
|
7
|
|
8
|
|
103
|
|
(10)
|
|
9
|
|
10
|
Selling and marketing
expenses
|
|
7
|
|
(54)
|
|
20
|
|
(33)
|
|
330
|
|
158
|
General and
administrative expenses
|
163
|
|
5,233
|
|
-
|
|
3,424
|
|
686
|
|
7,871
|
Research and
development expenses
|
|
-
|
|
(66)
|
|
3
|
|
(16)
|
|
27
|
|
28
|
Total
|
|
177
|
|
5,121
|
|
126
|
|
3,365
|
|
1,052
|
|
8,067
|
NQ MOBILE
INC.
UNAUDITED CONDENSED
CONSOLIDATED
STATEMENTS OF COMPREHENSIVE
LOSS
(In thousands, except for share
and per share data)
|
|
|
Nine months
ended
|
|
Six months
ended
|
|
|
September
30,
2017
|
|
September
30,
2016
|
|
June
30,
2017
|
|
June
30,
2016
|
|
|
US$
|
|
US$
|
|
US$
|
US$
|
Net
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer
|
|
|
|
|
|
|
|
|
-Advertising
services
|
|
7,219
|
|
12,769
|
|
4,902
|
|
8,544
|
-Other
services
|
|
3,108
|
|
4,831
|
|
1,917
|
|
3,421
|
Enterprise
|
|
|
|
|
|
|
|
|
-Sales of
product
|
|
33,363
|
|
23,779
|
|
19,573
|
|
15,732
|
-Service
|
|
489
|
|
1,798
|
|
303
|
|
1,342
|
Total net
revenues
|
|
44,179
|
|
43,177
|
|
26,695
|
29,039
|
Cost of
revenues*
|
|
(45,174)
|
|
(43,529)
|
|
(28,268)
|
|
(29,136)
|
Gross
loss
|
|
(995)
|
|
(352)
|
|
(1,573)
|
(97)
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Selling and marketing
expenses*
|
|
(3,578)
|
|
(5,584)
|
|
(2,384)
|
|
(3,811)
|
General and
administrative expenses*
|
|
(29,005)
|
|
(36,536)
|
|
(22,290)
|
|
(23,957)
|
Research and
development expenses*
|
|
(9,560)
|
|
(9,185)
|
|
(6,987)
|
|
(5,991)
|
Impairment of
goodwill and intangible assets
|
|
(97,858)
|
|
-
|
|
(80,604)
|
|
-
|
Total operating
expenses
|
|
(140,001)
|
|
(51,305)
|
|
(112,265)
|
(33,759)
|
Loss from
operations
|
|
(140,996)
|
|
(51,657)
|
|
(113,838)
|
(33,856)
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
(19,206)
|
|
(5,541)
|
|
(12,778)
|
|
(3,594)
|
Foreign exchange gain
/(loss), net
|
|
642
|
|
(596)
|
|
376
|
|
(305)
|
Realized gain on
disposal of a subsidiary
|
|
1,038
|
|
-
|
|
1,038
|
|
-
|
Investment
income
|
|
35
|
|
1,354
|
|
52
|
|
584
|
Investment impairment
loss
|
|
(2,091)
|
|
-
|
|
-
|
|
-
|
Fair value change of
derivative liability
|
|
(2,512)
|
|
-
|
|
(1,131)
|
|
-
|
Other income,
net
|
|
1,694
|
|
2,035
|
|
1,152
|
|
1,211
|
Loss before income
taxes
|
|
(161,396)
|
|
(54,405)
|
|
(125,129)
|
(35,960)
|
|
|
|
|
|
|
|
|
Income tax
benefit
|
|
1,254
|
|
1,714
|
|
682
|
|
715
|
Net loss from
continuing operation
|
|
(160,142)
|
|
(52,691)
|
|
(124,447)
|
(35,245)
|
Discontinued
operations:
|
|
|
|
|
|
|
|
Income from
discontinued operations (net of income tax
benefit/(expense) of US$ 1,384, US$ (2,915) ,US$173,
US$(3,282) for nine months ended September 30, 2017, and
September 30, 2016 and six months ended June 30, 2017, and
June 30, 2016respectively)
|
29,841
|
|
47,518
|
|
19,274
|
|
32,822
|
Net
loss
|
|
(130,301)
|
|
(5,173)
|
|
(105,173)
|
|
(2,423)
|
Net loss/(income)
attributable to the non-controlling interest
|
|
|
|
|
|
|
|
Net loss attributable
to the non-controlling interest
from continuing operation
|
|
24,365
|
|
2,365
|
|
19,695
|
|
1,665
|
Net income
attributable to the non-controlling
interest from discontinued operation
|
|
(10,719)
|
|
(13,536)
|
|
(6,750)
|
|
(6,564)
|
Net loss
attributable to NQ Mobile Inc.
|
|
(116,655)
|
|
(16,344)
|
|
(92,228)
|
(7,322)
|
|
|
|
|
|
|
|
|
Net
loss
|
|
(130,301)
|
|
(5,173)
|
|
(105,173)
|
(2,423)
|
Other comprehensive
income/(loss): foreign
currency translation adjustment
|
|
26,231
|
|
(19,043)
|
|
14,829
|
(14,385)
|
Comprehensive
loss
|
|
(104,070)
|
|
(24,216)
|
|
(90,344)
|
(16,808)
|
Comprehensive
loss/(income) attributable to non-
controlling interest
|
10,814
|
|
(9,339)
|
|
11,614
|
(3,574)
|
Comprehensive loss attributable
to NQ Mobile Inc.
|
|
(93,256)
|
|
(33,555)
|
|
(78,730)
|
(20,382)
|
Net loss per Class A and Class
B common share, basic
& diluted
|
(0.2315)
|
|
(0.0333)
|
|
(0.1837)
|
|
(0.0150)
|
|
|
|
|
|
|
|
|
|
Net loss per Class A
and Class B common share
from continuing operations, basic & diluted
|
|
(0.2695)
|
|
(0.1024)
|
|
(0.2087)
|
|
(0.0686)
|
|
|
|
|
|
|
|
|
|
Net earnings per Class
A and Class B common
share from discontinued operations, basic & diluted
|
|
0.0380
|
|
0.0691
|
|
0.0250
|
|
0.0536
|
|
|
|
|
|
|
|
|
|
Net loss per ADS, basic
& diluted
|
|
(1.1575)
|
|
(0.1665)
|
|
(0.9185)
|
|
(0.0750)
|
|
|
|
|
|
|
|
|
|
Net loss per ADS from
continuing operations, basic &
diluted
|
(1.3475)
|
|
(0.5120)
|
|
(1.0435)
|
|
(0.3430)
|
|
|
|
|
|
|
|
|
|
Net earnings
per ADS from discontinued operations, basic &
diluted
|
0.1900
|
|
0.3455
|
|
0.1250
|
|
0.2680
|
|
|
|
|
|
|
|
Weighted average
number of common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-Basic &
Diluted
|
|
503,810,985
|
|
491,532,385
|
|
501,948,313
|
|
489,356,192
|
|
|
|
|
|
|
|
|
|
*Share-based
compensation expenses included in:
|
|
|
|
|
|
|
|
|
Cost of
revenues
|
|
118
|
|
9
|
|
111
|
|
19
|
Selling and marketing
expenses
|
|
(27)
|
|
455
|
|
(34)
|
|
488
|
General and
administrative expenses
|
|
5,396
|
|
11,981
|
|
5,233
|
|
8,557
|
Research and
development expenses
|
|
(63)
|
|
39
|
|
(63)
|
|
55
|
Total
|
|
5,424
|
|
12,484
|
|
5,247
|
|
9,119
|
NQ MOBILE INC.
NON-GAAP MEASURE RECONCILIATIONS
(In thousands, except for share and per share data)
|
|
|
|
Three months
ended
|
|
September
30,
2017
|
June
30,
2017
|
|
March
31,
2017
|
|
September
30,
2016
|
|
June
30,
2016
|
|
March
31
2016
|
|
|
US$
|
|
US$
|
|
US$
|
|
US$
|
|
US$
|
|
US$
|
Selling and
marketing expenses under GAAP
|
|
(1,194)
|
|
(1,258)
|
|
(1,126)
|
|
(1,773)
|
|
(2,296)
|
|
(1,515)
|
Adjustment
(a)
|
|
7
|
|
(54)
|
|
20
|
|
(33)
|
|
330
|
|
158
|
Non-GAAP selling
and marketing expenses
|
|
(1,187)
|
|
(1,312)
|
|
(1,106)
|
|
(1,806)
|
|
(1,966)
|
|
(1,357)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and
administrative expenses under GAAP
|
(6,715)
|
|
(13,570)
|
|
(8,720)
|
(12,579)
|
|
(7,113)
|
(16,844)
|
Adjustment
(a)
|
|
163
|
|
5,233
|
|
-
|
|
3,424
|
|
686
|
|
7,871
|
Adjustment
(c)
|
|
-
|
|
-
|
|
-
|
|
565
|
|
577
|
|
577
|
Non-GAAP general
and administrative expenses
|
|
(6,552)
|
|
(8,337)
|
|
(8,720)
|
|
(8,590)
|
|
(5,850)
|
|
(8,396)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and
development expenses under GAAP
|
(2,573)
|
|
(3,505)
|
|
(3,482)
|
|
(3,194)
|
|
(3,399)
|
|
(2,592)
|
Adjustment
(a)
|
|
-
|
|
(66)
|
|
3
|
|
(16)
|
|
27
|
|
28
|
Adjustment
(c)
|
|
114
|
|
114
|
|
114
|
|
114
|
|
305
|
|
305
|
Non-GAAP research
and development expenses
|
|
(2,459)
|
|
(3,457)
|
|
(3,365)
|
|
(3,096)
|
|
(3,067)
|
|
(2,259)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from
operations under GAAP
|
|
(27,158)
|
|
(19,000)
|
|
(94,838)
|
(17,801)
|
(11,728)
|
(22,128)
|
Adjustment
(a)
|
|
177
|
|
5,121
|
|
126
|
|
3,365
|
|
1,052
|
|
8,067
|
Adjustment
(c)
|
|
358
|
|
351
|
|
556
|
|
1,626
|
|
1,954
|
|
1,674
|
Adjustment
(d)
|
|
17,254
|
|
-
|
|
80,604
|
|
-
|
|
-
|
|
-
|
Non-GAAP loss from
operations
|
|
(9,369)
|
|
(13,528)
|
|
(13,552)
|
|
(12,810)
|
(8,722)
|
(12,387)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss)/
income attributable to NQ Mobile Inc. under
GAAP
|
(24,427)
|
|
(20,876)
|
|
(71,352)
|
|
(9,022)
|
|
508
|
|
(7,830)
|
Adjustment
(a)
|
|
177
|
|
5,121
|
|
126
|
|
3,365
|
|
1,052
|
|
8,067
|
Adjustment
(b)
|
|
8,730
|
|
10,204
|
|
5,440
|
|
2,653
|
|
2,338
|
|
2,330
|
Adjustment
(c)
|
|
1,067
|
|
1,063
|
|
1,853
|
|
3,325
|
|
3,681
|
|
3,400
|
Adjustment
(d)
|
|
19,345
|
|
-
|
|
80,604
|
|
-
|
|
-
|
|
-
|
Adjustment
(e)
|
|
(570)
|
|
(454)
|
|
(924)
|
|
(502)
|
|
(818)
|
|
(593)
|
Non-GAAP net
income/(loss) attributable to NQ Mobile Inc.
|
4,322
|
|
(4,942)
|
|
15,747
|
|
(181)
|
|
6,761
|
|
5,374
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non- GAAP weighted
average number of diluted ADS
outstanding:
|
|
|
|
|
|
|
|
|
-Basic
|
101,495,118
|
100,881,524
|
99,892,336
|
99,167,493
|
98,022,234
|
97,720,243
|
-Diluted
|
101,896,886
|
100,881,524
|
100,506,191
|
99,167,493
|
99,404,207
|
98,910,564
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
earnings/(loss) per ADS, basic
|
|
0.0426
|
|
(0.0490)
|
|
0.1576
|
(0.0018)
|
0.0690
|
|
0.0550
|
Non-GAAP
earnings/(loss) per ADS, diluted
|
|
0.0424
|
|
(0.0490)
|
|
0.1567
|
(0.0018)
|
0.0680
|
|
0.0543
|
|
|
|
|
|
|
(a)
|
|
|
Adjustment to exclude
the share-based compensation expenses for each period
|
(b)
|
|
|
Adjustment to exclude
the interest expenses related to convertible debt and fair value
change of derivative liability
|
(c)
|
|
|
Adjustment to exclude
the amortization of intangible assets arising from
acquisitions
|
(d)
|
|
|
Adjustment to exclude
impairment loss from goodwill, intangible assets arising from
acquisitions and investment
|
(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.
|
NQ MOBILE INC.
NON-GAAP MEASURE RECONCILIATIONS
(In thousands, except for share and per share data)
|
|
|
|
|
|
|
|
|
|
Nine months
ended
|
|
Six months
ended
|
|
|
|
September
30,
2017
|
|
September
30,
2016
|
|
June
30,
2017
|
|
June
30,
2016
|
|
|
|
US$
|
|
US$
|
|
US$
|
|
US$
|
|
Selling and
marketing expenses under GAAP
|
|
(3,578)
|
|
(5,584)
|
|
(2,384)
|
|
(3,811)
|
|
Adjustment
(a)
|
|
(27)
|
|
455
|
|
(34)
|
|
488
|
|
Non-GAAP selling
and marketing expenses
|
|
(3,605)
|
|
(5,129)
|
|
(2,418)
|
(3,323)
|
|
|
|
|
|
|
|
|
|
|
General and
administrative expenses under GAAP
|
|
(29,005)
|
|
(36,536)
|
|
(22,290)
|
|
(23,957)
|
|
Adjustment
(a)
|
|
5,396
|
|
11,981
|
|
5,233
|
|
8,557
|
|
Adjustment
(c)
|
|
-
|
|
1,719
|
|
-
|
|
1,154
|
|
Non-GAAP general
and administrative expenses
|
|
(23,609)
|
|
(22,836)
|
|
(17,057)
|
(14,246)
|
|
|
|
|
|
|
|
|
|
|
Research and
development expenses under GAAP
|
|
(9,560)
|
|
(9,185)
|
|
(6,987)
|
|
(5,991)
|
|
Adjustment
(a)
|
|
(63)
|
|
39
|
|
(63)
|
|
55
|
|
Adjustment
(c)
|
|
342
|
|
724
|
|
228
|
|
610
|
|
Non-GAAP research
and development expenses
|
|
(9,281)
|
|
(8,422)
|
|
(6,822)
|
(5,326)
|
|
|
|
|
|
|
|
|
|
|
Loss from
operations under GAAP
|
|
(140,996)
|
|
(51,657)
|
|
(113,838)
|
|
(33,856)
|
|
Adjustment
(a)
|
|
5,424
|
|
12,484
|
|
5,247
|
|
9,119
|
|
Adjustment
(c)
|
|
1,265
|
|
5,254
|
|
907
|
|
3,628
|
|
Adjustment
(d)
|
|
97,858
|
|
-
|
|
80,604
|
|
-
|
|
Non-GAAP loss from
operations
|
|
(36,449)
|
|
(33,919)
|
|
(27,080)
|
(21,109)
|
|
|
|
|
|
|
|
|
|
|
Net loss
attributable to NQ Mobile Inc. under GAAP
|
|
(116,655)
|
|
(16,344)
|
|
(92,228)
|
|
(7,322)
|
|
Adjustment
(a)
|
|
5,424
|
|
12,484
|
|
5,247
|
|
9,119
|
|
Adjustment
(b)
|
|
24,374
|
|
7,321
|
|
15,644
|
|
4,668
|
|
Adjustment
(c)
|
|
3,983
|
|
10,406
|
|
2,916
|
|
7,081
|
|
Adjustment
(d)
|
|
99,949
|
|
-
|
|
80,604
|
|
-
|
|
Adjustment
(e)
|
|
(1,948)
|
|
(1,913)
|
|
(1,378)
|
|
(1,411)
|
|
Non-GAAP net
income attributable to NQ Mobile Inc.
|
|
15,127
|
|
11,954
|
|
10,805
|
12,135
|
|
|
|
|
|
|
|
|
|
|
Non- GAAP weighted
average number of diluted ADS outstanding:
|
|
|
|
|
|
|
|
|
-Basic
|
|
100,762,197
|
98,306,477
|
|
100,389,663
|
|
97,871,238
|
|
-Diluted
|
|
101,305,512
|
99,561,290
|
|
100,980,038
|
|
99,157,386
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP earnings per
ADS, basic
|
|
0.1501
|
|
0.1216
|
|
0.1076
|
|
0.1240
|
|
Non-GAAP earnings per
ADS, diluted
|
|
0.1493
|
|
0.1201
|
|
0.1070
|
|
0.1224
|
|
|
|
|
|
|
(a)
|
|
|
Adjustment to exclude
the share-based compensation expenses for each period
|
(b)
|
|
|
Adjustment to exclude
the interest expenses related to convertible debt and fair value
change of derivative liability
|
(c)
|
|
|
Adjustment to exclude
the amortization of intangible assets arising from
acquisitions
|
(d)
|
|
|
Adjustment to exclude
impairment loss from goodwill, intangible assets arising from
acquisitions and investment
|
(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.
|
View original
content:http://www.prnewswire.com/news-releases/nq-mobile-inc-reports-unaudited-financial-results-for-the-first-second-and-third-quarters-of-fy-2017-300571716.html
SOURCE NQ Mobile Inc.