BEIJING, June 10, 2013 /PRNewswire/ -- SGOCO Group, Ltd.
(Nasdaq: SGOC) ("SGOCO" or the "Company"), a company focused on
product design, distribution and brand development in flat-panel
display products, today announced its unaudited operating results
for the three months ended March 31,
2013.
2013 First Quarter Overview
SGOCO started the year 2013 with a solid year-over-year growth
of both its revenues and profits. Compared with the first quarter
of 2012, SGOCO achieved top line increase of 58.0% and bottom line
increase of 87.5% for the first quarter of 2013.
The solid operational results demonstrated that the light-asset
business model provided SGOCO with greater scalability in growing
its sales.
Financial Highlights First Quarter 2013 vs. First Quarter
2012
- Quarterly revenues increased 58.0% to $54.5 million, as compared to $34.5 million year-over-year
- Gross profit increased by 39.6% to $3.7
million, as compared to $2.7
million year-over-year
- Net income increased 87.5% to $1.7
million, as compared to $0.9
million year-over-year
- Basic and diluted earnings per share were $0.10, as compared to $0.05.
Revenue
In the first quarter of 2013, SGOCO's total revenues were
$54.5 million, which increased by
58.0% from $34.5 million from the
first quarter of 2012. The year-over-year revenue increase was
mainly due to the sign-ups with a few large local distributor
clients and increased sales of other application products as well
as larger-sized monitors with higher prices, offset by a decrease
in sales of smaller-sized monitors in the quarter.
Of the total revenues in the quarter, $36.6 million or 67.1% of total revenues were
from SGOCO's own brands; $6.5 million
or 12.0% of total revenues were from OEM customers; and
$11.4 million or 20.9% of total
revenues were from sales of other application products. Starting in
the fourth quarter of 2012, the Company started to source orders
for higher margin application products in order to diversify its
revenue streams.
Gross Margin
Gross profit for the first quarter of 2013 increased 39.6% to
$3.7 million from $2.7 million for the first quarter of 2012.
The overall gross margin for the first quarter of 2013 was 6.9%,
as compared with 7.8% for the first quarter of 2012. Gross margin
continued to be negatively impacted by the increased fees charged
by Chinese authorities for recycling imported monitors and price
decreases in monitors. During the first quarter of 2013, SGOCO
brand sales had a gross margin of 6.6%, which decreased from 9.8%
in the first quarter of 2012. During the first quarters of 2013 and
2012, OEM businesses had a gross margin of 6.9% and 5.5%,
respectively. Sales of other application products in the first
quarter of 2013 recorded a gross margin of 7.8%.
Operating Income and Expenses
Operating income totaled $2.7
million for the first quarter of 2013, or 4.9% of total
revenues, as compared to $1.7
million, or 4.8% of total revenues for the first quarter of
2012.
SG&A expenses for the first quarter of 2013 were
$1.1 million, roughly the same level
as the first quarter of 2012 of $1.0
million. The year-over-year increase of $0.1 million was attributed to increase in both
transportation cost and staff salaries and welfare, offset by a
decrease in share-based compensation expenses.
Net Income and EPS
Net income for the first quarter of 2013 was $1.7 million, which grew 87.5% from $0.9 million for the first quarter of 2012. The
net income margins were 3.2% and 2.7% for the three months ended
March 31, 2013 and 2012,
respectively.
Basic and diluted earnings per share were reported at
$0.10 for the first quarter of 2013,
compared to $0.05 in the first
quarter of 2012. Basic and diluted EPS for the first quarter of
2013 was calculated based on 17,086,826 weighted average number of
common shares as compared to 17,053,036 weighted average number of
common shares for the first quarter of 2012.
Cash and Working Capital
As of March 31, 2013, the Company
held $5.7 million in cash and cash
equivalents compared to $11.5 million
as of December 31, 2012. Working
capital increased to $79.9 million
from $78.1 million at the end of
2012. The current ratio was 3.01 on March
31, 2013, compared to 3.86 on December 31, 2012.
The decrease in the cash position was largely due to the
Company's significant inventory build-up and advances made to
suppliers as of March 31, 2013 in
order to meet customers' delivery schedules in the following
quarter.
Annual General Meeting
The Company is scheduled to
hold its Annual General Meeting on June 24,
2013 with Proxy Statement filed with the SEC.
Conference Call
SGOCO's management will host a
conference call at 9 a.m. Eastern
Time/9 p.m. Beijing Time on
Monday, June 17, 2013.
Interested parties may access the call by dialing 1-877-941-1427
(US Toll-free) or 1-480-629-9664 (International) or 400-120-0612
(China Toll-free). The Conference
call identification number is 4620997#.
A webcast will also be available via
http://public.viavid.com/index.php?id=104868
A recording of the conference call will be accessible within 48
hours via SGOCO's website at:
http://www.sgocogroup.com/us/SGOC/irwebsite/index.php?mod=recent&id=14
About SGOCO Group, Ltd.
SGOCO Group, Ltd. is focused on product design, brand
development and distribution of flat panel display products,
including computer monitors, TVs, computers and application
specific products. SGOCO sells its products and services in the
Chinese market and abroad. For more information about SGOCO, please
visit our investor relations website http://www.sgocogroup.com.
For investor and media inquiries, please contact:
SGOCO Group, Ltd.
Serena Wu
Investor Relations Manager
Tel: +86 (10) - 85870173 (China)
US: +1(646) - 5831616 (Voice mail)
Email:ir@sgoco.com
Safe Harbor and Informational Statement
This announcement contains "forward-looking" statements within
the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. These
statements are made under the "safe harbor" provisions of the U.S.
Private Securities Litigation Reform Act of 1995. All statements,
other than statements of historical fact, including, without
limitation, those with respect to the objectives, plans and
strategies of the Company set forth herein and those preceded by or
that include the words "believe," "expect," "anticipate," "future,"
"will," "intend," "plan," "estimate" or similar expressions, are
"forward-looking statements". Forward-looking statements in this
release include, without limitation, the effectiveness of the
Company's multiple-brand, multiple channel strategy and the
transitioning of its product development and sales focus and to a
"light-asset" model. Although the Company's management believes
that such forward-looking statements are reasonable, it cannot
guarantee that such expectations are, or will be, correct. These
forward-looking statements involve a number of risks and
uncertainties, which could cause the Company's future results to
differ materially from those anticipated. These forward-looking
statements can change as a result of many possible events or
factors not all of which are known to the Company, which may
include, without limitation, requirements or changes adversely
affecting the LCD and LED market in China; fluctuations in customer demand for LCD
and LED products generally; our success in promoting our brand of
LCD and LED products in China and
elsewhere; our ability to have effective internal control over
financial reporting; our success in designing and distributing
products under brands licensed from others; management of sales
trend and client mix; possibility of securing loans and other
financing without efficient fixed assets as collaterals; changes in
government policy in China; the
fluctuations and competition in sales and sale prices of LCD and
LED products in China; China's
overall economic conditions and local market economic conditions;
our ability to expand through strategic acquisitions and
establishment of new locations; changing principles of generally
accepted accounting principles; compliance with government
regulations; legislation or regulatory environments; geopolitical
events, and other events and/or risks outlined in SGOCO's filings
with the U.S. Securities and Exchange Commission, including its
annual report on Form 20-F and other filings. All information
provided in this press release and in the attachments is as of the
date of the issuance, and SGOCO does not undertake any obligation
to update any forward-looking statement, except as required under
applicable law.
SGOCO GROUP, LTD.
AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS
OF COMPREHENSIVE INCOME FOR THE THREE MONTHS
ENDED MARCH 31, 2013 AND
2012 (Unaudited) (In thousands of
U.S.dollars except share and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
|
|
REVENUES:
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
54,544
|
|
|
|
34,522
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COST OF GOODS
SOLD:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods
sold
|
|
|
50,801
|
|
|
|
31,840
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GROSS
PROFIT
|
|
|
3,743
|
|
|
|
2,682
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling
expenses
|
|
|
244
|
|
|
|
118
|
|
|
|
|
|
General and
administrative expenses
|
|
|
832
|
|
|
|
912
|
|
|
|
|
|
Total operating
expenses
|
|
|
1,076
|
|
|
|
1,030
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME FROM
OPERATIONS
|
|
|
2,667
|
|
|
|
1,652
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER INCOME
(EXPENSES):
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
|
1
|
|
|
|
-
|
|
|
|
|
|
Interest
expense
|
|
|
(35)
|
|
|
|
(15)
|
|
|
|
|
|
Other income
(expense), net
|
|
|
(74)
|
|
|
|
(14)
|
|
|
|
|
|
Change in fair value
of warrant derivative liability
|
|
|
5
|
|
|
|
1
|
|
|
|
|
|
Total other expenses,
net
|
|
|
(103)
|
|
|
|
(28)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME BEFORE
PROVISION FOR INCOME TAXES
|
|
|
2,564
|
|
|
|
1,624
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PROVISION FOR INCOME
TAXES
|
|
|
843
|
|
|
|
706
|
|
|
|
|
|
NET INCOME
|
|
|
1,721
|
|
|
|
918
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER COMPREHENSIVE
INCOME (LOSS):
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency
translation adjustment
|
|
|
14
|
|
|
|
(72)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COMPREHENSIVE
INCOME
|
|
|
1,735
|
|
|
|
846
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EARNINGS PER
SHARE:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
0.10
|
|
|
|
0.05
|
|
|
|
|
|
Diluted
|
|
|
0.10
|
|
|
|
0.05
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE
NUMBER OF COMMON SHARES OUTSTANDING:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
17,086,826
|
|
|
|
17,053,036
|
|
|
|
|
|
Diluted
|
|
|
17,086,826
|
|
|
|
17,053,036
|
|
|
|
|
|
SGOCO GROUP, LTD.
AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE
SHEETS AS OF MARCH 31, 2013
AND DECEMBER 31, 2012 (In
thousands of U.S.dollars except share and per share
data)
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
2013
|
|
|
|
December 31,
2012
|
|
ASSETS
|
|
|
(Unaudited)
|
|
|
|
|
|
CURRENT
ASSETS
|
|
|
|
|
|
|
|
|
Cash
|
|
|
5,663
|
|
|
|
11,548
|
|
Accounts
receivable, net
|
|
|
64,966
|
|
|
|
59,355
|
|
Other
receivables and prepayments
|
|
|
1,440
|
|
|
|
169
|
|
Inventories
|
|
|
12,288
|
|
|
|
5,725
|
|
Advances to
suppliers
|
|
|
35,313
|
|
|
|
28,511
|
|
Other current
assets
|
|
|
27
|
|
|
|
78
|
|
Total current
assets
|
|
|
119,697
|
|
|
|
105,386
|
|
|
|
|
|
|
|
|
|
|
PLANT AND EQUIPMENT,
NET
|
|
|
257
|
|
|
|
261
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
|
119,954
|
|
|
|
105,647
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
|
|
|
|
|
Short-term
loan
|
|
|
11,800
|
|
|
|
6,230
|
|
Accounts payable,
trade
|
|
|
17,197
|
|
|
|
12,038
|
|
Accrued
liabilities
|
|
|
104
|
|
|
|
156
|
|
Short-term loan –
shareholder
|
|
|
209
|
|
|
|
209
|
|
Other
payables
|
|
|
325
|
|
|
|
379
|
|
Customer
deposits
|
|
|
2,563
|
|
|
|
1,155
|
|
Taxes
payable
|
|
|
7,594
|
|
|
|
7,147
|
|
Total current
liabilities
|
|
|
39,792
|
|
|
|
27,314
|
|
|
|
|
|
|
|
|
|
|
OTHER
LIABILITIES
|
|
|
|
|
|
|
|
|
Warrant derivative
liability
|
|
|
13
|
|
|
|
18
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities
|
|
|
39,805
|
|
|
|
27,332
|
|
|
|
|
|
|
|
|
|
|
Commitment and
contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SHAREHOLDERS'
EQUITY
|
|
|
|
|
|
|
|
|
Preferred stock,
$0.001 par value, 1,000,000 shares authorized, nil issued and
outstanding as of
March 31, 2013 and December 31, 2012
|
|
|
-
|
|
|
|
-
|
|
Common stock, $0.001
par value, 50,000,000 shares authorized, 17,545,356 and 17,465,356
shares
issued and outstanding as of March 31, 2013 and December 31, 2012,
respectively
|
|
|
18
|
|
|
|
17
|
|
Paid-in-capital
|
|
|
24,926
|
|
|
|
24,828
|
|
Statutory
reserves
|
|
|
401
|
|
|
|
401
|
|
Retained
earnings
|
|
|
54,765
|
|
|
|
53,044
|
|
Accumulated other
comprehensive income
|
|
|
39
|
|
|
|
25
|
|
Total shareholders'
equity
|
|
|
80,149
|
|
|
|
78,315
|
|
Total
liabilities and shareholder's equity
|
|
|
119,954
|
|
|
|
105,647
|
|
SGOCO GROUP, LTD.
AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS FOR THE
THREE MONTHS ENDED MARCH 31, 2013 AND
2012 (Unaudited) (In thousands
of U.S.dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
2012
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
|
|
|
Net income
|
|
|
|
1,721
|
|
918
|
|
|
Adjustments to
reconcile net income to net cash used in operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
18
|
|
15
|
|
|
|
|
Change in fair value
of warrant derivative liability
|
|
(5)
|
|
(1)
|
|
|
|
|
Share-based
compensation expenses
|
|
98
|
|
273
|
|
|
Change in operating
assets and liabilities
|
|
|
|
|
|
|
|
|
Accounts receivable,
trade
|
|
(5,657)
|
|
(9,511)
|
|
|
|
|
Other receivables and
prepayments
|
|
(1,268)
|
|
392
|
|
|
|
|
Inventories
|
|
(6,538)
|
|
11,373
|
|
|
|
|
Advances to
suppliers
|
|
(6,716)
|
|
(8,313)
|
|
|
|
|
Other current
assets
|
|
54
|
|
42
|
|
|
|
|
Accounts payables,
trade
|
|
5,119
|
|
270
|
|
|
|
|
Accrued
liabilities
|
|
(52)
|
|
(18)
|
|
|
|
|
Other
payables
|
|
(81)
|
|
788
|
|
|
|
|
Customer
deposits
|
|
1,403
|
|
(40)
|
|
|
|
|
Taxes
payable
|
|
427
|
|
517
|
|
|
|
|
|
Net cash used in
operating activities
|
|
(11,477)
|
|
(3,295)
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
|
|
|
Settlement of
consideration received from disposal of subsidiaries
|
|
-
|
|
9,703
|
|
|
Purchase of
equipment
|
|
(14)
|
|
(67)
|
|
|
|
|
|
|
Net cash (used in)
provided by investing activities
|
|
(14)
|
|
9,636
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
|
|
|
Increase in
restricted cash
|
|
-
|
|
(65)
|
|
|
Notes
payable
|
|
|
-
|
|
65
|
|
|
Proceeds from
short-term loan
|
|
5,570
|
|
-
|
|
|
|
|
|
Net cash provided
by financing activities
|
|
5,570
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
EFFECT OF EXCHANGE
RATE ON CASH
|
|
36
|
|
(93)
|
|
|
|
|
|
|
|
|
|
|
|
(DECREASE)
INCREASE IN CASH
|
|
(5,885)
|
|
6,248
|
|
|
|
|
|
|
|
|
|
|
|
CASH, beginning of
period
|
|
|
11,548
|
|
535
|
|
|
|
|
|
|
|
|
|
|
|
CASH, end of
period
|
|
|
|
5,663
|
|
6,783
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW INFORMATION
|
|
|
|
|
|
|
Interest expenses
paid (net of amount capitalized)
|
|
35
|
|
15
|
|
|
Income taxes
paid
|
|
|
399
|
|
189
|
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL
DISCLOSURE OF NON-CASH INVESTING AND FINANCING
ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
Settlement of
consideration receivable – received in finished goods
|
|
|
-
|
|
13,901
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SOURCE SGOCO Group, Ltd.