SHENZHEN, China, Dec. 24,
2015 /PRNewswire/ -- SGOCO Group, Ltd. (Nasdaq: SGOC) ("SGOCO" or the "Company"), a
company focused on product design, distribution and brand
development in the Chinese display and computer product market,
today announced its unaudited operating results for the six months
ended June 30, 2015.
2015 Interim Results Overview
The interim results of SGOCO were continually impacted by
significant increases in competition and the overall weak
industrial growth in the Chinese display industry.
Interim revenues decreased 98.5% to $0.5
million for the first six months of this year ("1H"), as
compared to $34.1 million for the
first six months of 2014.
Gross profit dropped 98.6% to $0.02
million in the 1H 2015, from $1.7
million for the same period in 2014.
Net loss for the 1H 2015 was $0.9
million, compared to net loss of $1.6
million during the same period in 2014.
Basic and diluted loss per share was $0.05 for the 1H 2015, as compared to
$0.09 loss per share in the 1H
2014.
Revenue
Due to the increasing popularity of mobile devices, the
contraction of the personal computer market demand continued and it
adversely impacted the market demand of our major product, flat
panel LCD and LED monitors. The drop in market demand also led to
intense competition with our peers which has further affected our
revenue and gross margins. Our total revenues decreased by 98.5% to
$0.5 million, as compared with
$34.1 million for the first six
months of 2014.
Gross margin
In 1H 2015, the gross profit of the Company decreased 98.6% to
$0.02 million from $1.7 million for the same period in 2014.
The overall gross margin for the 1H 2015 was 4.8%, as compared with
5.1% during the same period of 2014.
Operating loss and expenses
The Company recorded a $0.8
million operating loss in the 1H 2015, as compared to an
operating loss of $1.9 million in the
1H 2014. Operating expenses in 1H 2015 decreased by 77.2% to
$0.8 million, compared to operating
expenses of $3.7 million in the first
six months of 2014. The decrease of G&A expenses was mainly due
to tightened controls over expenses and decreased staff costs due
to the number of employees reduced in our Hong Kong,
Shenzhen and Beijing offices.
Net loss and loss per share
Net loss for the 1H 2015 was $0.9
million, compared to a net loss of $1.6 million for the same period in 2014. The net
margin experienced a loss of 169.4% in the 1H of 2015, as compared
to 4.8% during the same period of 2014. Basic and diluted loss per
share was $0.05 in the 1H of 2015
based on 17,531,861 weighted average number of common shares, as
compared to basic and diluted loss per share of $0.09 based on 17,397,082 weighted average number
of common shares for the 1H 2014.
Cash and working capital
SGOCO held $91.6 million cash and
cash equivalents at the end of June 30,
2015, compared to $0.1 million
as of December 31, 2014. Working
capital decreased to $84.5 million
from $85.2 million at the end of
December 31, 2014. The receipt of
Sales Price and Receivables from disposal of our subsidiary, SGOCO
(Fujian), were the major causes
for the increase of cash flow.
About SGOCO Group, Ltd.
SGOCO Group, Ltd. is focused on product design, brand
development and distribution in the Chinese display market,
including computer monitors, All-In-One ("AIO") and Parts-In-One
("PIO") computers and application specific products. SGOCO sells
its products and services in the China 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.
Tony Zhong
Vice President of Finance
Tel: +86-0755-26978199 ext: 7500
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; 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 SIX MONTHS
ENDED JUNE 30, 2015 AND 2014
|
(Unaudited)
|
(In thousands of U.S.
dollars except share and per share data)
|
|
|
|
|
|
2015
|
|
2014
|
REVENUES:
|
|
|
|
Revenues
|
504
|
|
34,141
|
|
|
|
|
COST OF GOODS
SOLD:
|
|
|
|
Cost of goods
sold
|
480
|
|
32,396
|
|
|
|
|
GROSS
PROFIT
|
24
|
|
1,745
|
|
|
|
|
OPERATING
EXPENSES:
|
|
|
|
Selling
expenses
|
42
|
|
240
|
General and
administrative expenses
|
798
|
|
3,441
|
Total operating
expenses
|
840
|
|
3,681
|
|
|
|
|
LOSS FROM
OPERATIONS
|
(816)
|
|
(1,936)
|
|
|
|
|
OTHER INCOME
(EXPENSES):
|
|
|
|
Interest
income
|
46
|
|
338
|
Interest
expense
|
-
|
|
(171)
|
Other expense,
net
|
(86)
|
|
(8)
|
Change in fair value
of warrant derivative liability
|
2
|
|
15
|
Total other income
(expenses), net
|
(38)
|
|
174
|
|
|
|
|
LOSS BEFORE PROVISION
FOR INCOME TAXES
|
(854)
|
|
(1,762)
|
|
|
|
|
PROVISION FOR INCOME
TAXES
|
-
|
|
(113)
|
NET LOSS
|
(854)
|
|
(1,649)
|
|
|
|
|
OTHER COMPREHENSIVE
LOSS:
|
|
|
|
Foreign currency
translation adjustment
|
(1)
|
|
(592)
|
|
|
|
|
COMPREHENSIVE
LOSS
|
(855)
|
|
(2,241)
|
|
|
|
|
LOSS PER
SHARE:
|
|
|
|
Basic
|
(0.05)
|
|
(0.09)
|
Diluted
|
(0.05)
|
|
(0.09)
|
|
|
|
|
WEIGHTED AVERAGE
NUMBER OF COMMON SHARES
OUTSTANDING:
|
|
|
|
Basic
|
17,531,861
|
|
17,397,082
|
Diluted
|
17,531,861
|
|
17,397,082
|
SGOCO GROUP, LTD.
AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
AS OF JUNE 30,
2015 AND DECEMBER 31, 2014
|
(Unaudited)
|
(In thousands
of U.S. dollars except share and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June
30,
|
|
December
31,
|
|
|
|
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT
ASSETS
|
|
|
|
|
|
Cash
|
|
91,642
|
|
92
|
|
Accounts receivable,
trade
|
|
134
|
|
910
|
|
Other
receivables
|
|
34
|
|
51
|
|
Other
Receivable-shareholder
|
|
135
|
|
-
|
|
Receivable from sale
of a subsidiary
|
|
-
|
|
91,379
|
|
Inventories
|
|
174
|
|
1
|
|
Advances to
suppliers
|
|
-
|
|
33
|
|
Prepaid income
tax
|
|
17
|
|
17
|
|
Other current
assets
|
|
55
|
|
56
|
|
|
Total current
assets
|
|
92,191
|
|
92,539
|
|
|
|
|
|
|
|
|
|
PLANT AND
EQUIPMENT, NET
|
|
13
|
|
14
|
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
92,204
|
|
92,553
|
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
|
|
Accounts payable,
trade
|
|
851
|
|
606
|
|
Short-term loan -
shareholder
|
|
-
|
|
100
|
|
Other payables and
Accrued liabilities
|
|
355
|
|
209
|
|
Customer
deposits
|
|
85
|
|
198
|
|
Taxes
payable
|
|
6,241
|
|
6,241
|
|
Convertible
debt
|
|
204
|
|
-
|
|
Warrant derivative
liability
|
|
-
|
|
2
|
|
|
|
Total
liabilities
|
|
7,736
|
|
7,356
|
|
|
|
|
|
|
|
|
COMMITMENT AND
CONTINGENCIES
|
|
|
|
|
|
|
|
|
|
|
|
|
SHAREHOLDERS'
EQUITY
|
|
|
|
|
|
Preferred stock,
$0.001 par value, 1,000,000 shares authorized,
nil
issued and outstanding as of June 30, 2015 and December 31,
2014
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock, $0.001
par value, 50,000,000 shares authorized,
17,594,861 and 17,414,861 issued and outstanding as
of
June 30, 2015 and December 31, 2014, respectively
|
|
18
|
|
18
|
|
Additonal
paid-in-capital
|
|
25,715
|
|
25,589
|
|
Statutory
reserves
|
|
-
|
|
-
|
|
Retained
earnings
|
|
58,747
|
|
59,601
|
|
Accumulated other
comprehensive income
|
|
(12)
|
|
(11)
|
|
|
Total shareholders'
equity
|
|
84,468
|
|
85,197
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
and shareholders' equity
|
|
92,204
|
|
92,553
|
SGOCO GROUP, LTD.
AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
FOR THE SIX MONTHS
ENDED JUNE 30, 2015 AND 2014
|
(Unaudited)
|
(In thousands of U.S.
dollars)
|
|
|
|
|
|
|
|
June
30
|
|
|
|
|
|
|
2015
|
|
2014
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
|
|
Net (loss)
income
|
|
(855)
|
|
(1,649)
|
|
Adjustments to
reconcile net (loss) income to cash provided by (used in) operating
activities:
|
|
|
|
Depreciation and
amortization
|
|
-
|
|
41
|
|
|
|
Bad debt
provision
|
|
-
|
|
1,339
|
|
|
|
Change in fair value
of warrant derivative liability
|
|
(2)
|
|
(15)
|
|
|
|
Share-based
compensation expenses
|
|
126
|
|
538
|
|
Change in operating
assets – (increase) decrease
|
|
|
|
|
|
|
|
Accounts receivable,
trade
|
|
775
|
|
(3,969)
|
|
|
|
Deferred tax
assets
|
|
-
|
|
(353)
|
|
|
|
Other receivables and
prepayments
|
|
17
|
|
385
|
|
|
|
Notes
Receivable
|
|
-
|
|
1,316
|
|
|
|
Inventories
|
|
(173)
|
|
928
|
|
|
|
Advances to
suppliers
|
|
32
|
|
(12,782)
|
|
|
|
Prepaid income
tax
|
|
-
|
|
-
|
|
|
|
Other current
assets
|
|
(9)
|
|
(53)
|
|
Change in operating
liabilities – increase (decrease)
|
|
|
|
|
|
|
|
Accounts payables,
trade
|
|
244
|
|
4,457
|
|
|
|
Other payables and
accrued liabilities
|
|
149
|
|
138
|
|
|
|
Customer
deposits
|
|
(113)
|
|
(354)
|
|
|
|
Taxes
payable
|
|
(1)
|
|
247
|
|
|
|
|
Net cash provided
by (used in) operating
activities
|
|
190
|
|
(9,785)
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
|
|
Proceeds from disposal of subsidiaries, net of cash disposed of $25
|
91,241
|
|
-
|
|
|
|
|
Net cash provided
by investing activities
|
|
91,241
|
|
-
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
|
|
Payments on
short-term loan
|
|
-
|
|
(2,617)
|
|
Proceeds from
shareholder loan
|
|
270
|
|
100
|
|
Payments on
shareholder loan
|
|
(505)
|
|
-
|
|
Proceeds from
convertible debt
|
|
204
|
|
-
|
|
|
|
|
Net cash used in
financing activities
|
|
(31)
|
|
(2,517)
|
|
|
|
|
|
|
|
|
|
EFFECT OF EXCHANGE
RATE ON CASH
|
|
150
|
|
(87)
|
|
|
|
|
|
|
|
|
|
(DECREASE)
INCREASE IN CASH
|
|
91,550
|
|
(12,389)
|
|
|
|
|
|
|
|
|
|
CASH, beginning of
year
|
|
92
|
|
13,497
|
|
|
|
|
|
|
|
|
|
CASH, end of
year
|
|
|
91,642
|
|
1,108
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW
INFORMATION
|
|
|
|
|
|
Cash paid for
interest
|
|
-
|
|
171
|
|
Cash paid for income
taxes
|
|
-
|
|
43
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/sgoco-group-ltd-announces-2015-unaudited-interim-financial-results-300197103.html
SOURCE SGOCO Group, Ltd.