Embattled Chinese wireless value-added services firm Hurray Holding Company Ltd. says its total revenues plummeted 18.5% quarter-over-quarter to USD11.8 million as it announced its unaudited financial results for the first quarter ended March 31, 2009, and stated it would not continue to provide quarterly guidance.
The company's USD11.8 million in total revenues was also a decrease of 11.2% year-over-year. Revenues were pushed lower partly because wireless value-added services revenues were USD7.9 million, a decrease of 31.4% quarter-over-quarter and a decrease of 28.6% year-over-year. Good news came from recorded music revenues, which were USD3.9 million, representing an increase of 31.4% quarter-over-quarter and an increase of 73.9% year-over-year.
Dr. Songzuo Xiang, CEO of Hurray, stated: "The company is involved in a review of all business lines and departments in a focused effort to position the company so that it can achieve sustainable profitability in the current environment. In light of our current initiatives, the company, for the time being, will no longer provide quarterly revenue guidance."
Total gross margin was 16.4% for the first quarter of 2009 as compared to 5.0% for the previous quarter and 36.5% for the same period of 2008. Gross margin for wireless value-added services was 17.5% for the first quarter of 2009, as compared to 2.9% in the previous quarter, in part because of the impact in the previous quarter of the reversal of revenue, and 35.0% for the same period of 2008. Recorded music gross margin was 14.0% for the first quarter of 2009 as compared to 13.0% in the previous quarter and 43.8% for the same period of 2008.
Total gross profit was USD1.9 million for the first quarter of 2009, representing a significant increase of 166% compared to USD0.7 million for the previous quarter, and a decline of 60.2% as compared to USD4.8 million for the same period of 2008. Net loss attributable to Hurray! Holding was USD2.1 million for the first quarter of 2009.
Hurray has been mired in recent weeks in a controversy over its desire to find an acceptable acquirer. Local Chinese media has reported private talks between online game developer Shanda and Hurray, but potential acquirer Best Prospect Overseas Limited has sent at least two open letters to Hurray over the last month pleading for the WVAS firm to engage in more dialogue.
In a letter this week, Best Prospect's Jacky Tung addressed the open letter to Qindai Wang, and stated, "You never discussed any of the issues raised in the May 14 press release with us. In fact, you ignored our good faith attempts to discuss our withdrawn offer with you. Had you been willing to engage in a meaningful discussion with us, all of your concerns would have been addressed."
For the last quarter of 2008, Hurray's total revenues hit USD14.4 million, representing an increase of 6.7% quarter-over-quarter and a decrease of 9.2% year-over-year. Of that total, WVAS revenues were USD11.5 million, representing an increase of 3.8% quarter-over-quarter and an increase of 4.2% year-over-year. With Hurray's first quarter unaudited financial position now known, Hurray may be in a weaker position to fend off the aptly-named Best Prospect and Hurray may face a lower valuation of its business prospects.
