Artificial Life, Inc. Press release Artificial Life Announces Fiscal Year 2009 Results
22% Growth in Revenues, 28% Net Profit Margin
LOS ANGELES, BERLIN, HONG KONG, March 16, 2010 (GLOBE NEWSWIRE) -- Artificial Life, Inc., (OTCBB:ALIF) (http://www.artificial-life.com) today announced solid growth in revenues and profits for fiscal year 2009. Revenues grew 22% to $27,454,474 and net income was $7,568,719, representing a net profit margin after taxes of 28%.
Business Highlights
During the course of 2009, Artificial Life Inc. strengthened its global position as a leading, full-service mobile software provider by offering a wide variety of mobile products, including mobile games, mobile TV, mobile business applications, and mobile productivity tools and technology.
For the year 2009, Artificial Life sold over 12 million licenses for its mobile Java games worldwide. 2009 also saw significant growth in the market for iPhone games and applications, and though a relative newcomer to the iPhone market, Artificial Life became one of the leading iPhone publishers. The Company had over 10 million game downloads globally and 70% of its games achieved a top-10 ranking, 46% a top-5 ranking, and 33% of the games even reached a #1 ranking on Apple's download charts in many countries around the globe.
In 2009, the Company had 73 corporate clients, 22 of which were new customers, generating approximately 45% of the Company's total revenue.
Approximately 51% of Artificial Life's revenues were derived from mobile games, while approximately 22% were derived from sales of non-game-related mobile products such as Mobil Diab(TM), a mobile healthcare application for business; 21% from sales of MobileBooster(R), a productivity tool that has now become an integrated part of the newly released m-commerce platform, OPUS-M(TM); and 6% from sales of Mobile Property, a mobile application for the real estate industry.
Financial Results
Results of Operations --Year Ended December 31, 2009 compared to Year Ended December 31, 2008
Revenues. Revenues for the year ended December 31, 2009 were $27,454,474 as compared to $22,454,414 for the year ended December 31, 2008. The increase of $5,000,060, or 22%, was primarily due to increased licensing revenue generated from the sales of our 3G mobile Java and iPhone/iPod touch products and our m-commerce platform as well as license income from the sales of our Mobil Diab(TM) and Mobile Property applications.
Cost of Revenues. Cost of revenues mainly consisted of amortization of intangible assets (license rights). Cost of revenues for the year ended December 31, 2009 was $5,309,072 as compared to $3,204,590 for the year ended December 31, 2008. The increase of $2,104,482, or 66%, was primarily due to the increased amortization of license rights.
Gross Margin. Gross margin for the year ended December 31, 2009 was $22,145,402 as compared to $19,249,824 for the year ended December 31, 2008. The increase of $2,895,578, or 15%, 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 handset distributors and a number of license deals for the sale of our Mobil Diab(TM) and Mobile Property applications offset by amortization of license rights acquired.
General and Administrative Expenses. General and administrative expenses consisted of salary and payroll tax expenses of administrative personnel, rent, professional fees and costs associated with employee benefits, supplies, communications, and travel. Total general and administrative expenses for the year ended December 31, 2009 were $6,426,674 as compared to $3,268,260 for the year ended December 31, 2008. The increase of $3,158,414, or 97%, was primarily due to the stock-based compensation expense of approximately $0.6 million, depreciation of computer software of approximately $1.4 million, and bad debt expense of approximately $2 million partially offset by reduced legal and professional fees.
Research and Development Expenses. 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. Total research and development expenses for the year ended December 31, 2009 were $4,930,495 as compared to $3,250,289 in the year ended December 31, 2008. The increase of $1,680,206, or 52%, was primarily due to the stock-based compensation expense of approximately $0.5 million and an increase of approximately $0.8 million in staff bonus and approximately $0.5 million in Internet expenses partially offset by reduced consulting fees.
Sales and Marketing Expenses. Sales and marketing expenses consisted of salary and payroll tax expenses of marketing personnel and costs relating to marketing materials, promotional videos, advertising, tradeshow-related expense and public relation activities. Total marketing expenses for the year ended December 31, 2009 were $4,663,183 as compared to $2,272,516 for the year ended December 31, 2008. The increase of $2,390,667, or 105%, was primarily due to the stock-based compensation expense of approximately $1.2 million and an increase of approximately $0.3 million in staff bonus and salaries and approximately of $0.9 million in consulting expenses.
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