SHANGHAI, Dec. 19, 2016 /PRNewswire/ -- Acorn
International, Inc. (NYSE: ATV) ("Acorn" or the "Company"), today
announced its unaudited financial results for the third quarter
ended September 30, 2016.
In the third quarter of 2016, Acorn's management continued to
execute its business turnaround strategy. Revenues declined
year-over-year, reflecting the ongoing transition of the Company's
business model. However, significantly higher gross margin and
lower operating expenses led to a dramatic improvement in the net
loss during the quarter to $1.8
million compared to a net loss of $9.8 million a year ago. The Company closed
the quarter with a solid cash position of $27.7 million, up from $12.3 million at the end of 2015.
In the remainder of 2016, Acorn will seek to increase revenue,
maintain healthy margins, manage expenses and generate additional
cash flow. Management will focus on growing sales of
its proprietary-branded products as well as
third-party products and brands through e-commerce, its other
direct sales platforms as well as its nationwide distribution
network. As part of its ongoing policy to liquidate non-core
assets, Acorn plans to sell certain non-core assets with a carrying
amount of approximately $17.2 million
and may sell shares of Yimeng Software Technology Co., Ltd, a
publicly traded company in China,
as appropriate.
Financial Results for the Third Quarter of 2016:
Total net revenues were $7.5
million in the third quarter of 2016, down from $14.0 million in the third quarter of
2015.
Cost of sales in the third quarter of 2016 was $3.4 million, down from $14.0 million in the third quarter of 2015.
Gross profit in the third quarter of 2016 was $4.1 million, as compared to $35,876 in the third quarter of 2015. Gross
margin was 54.5% in the third quarter of 2016, up from 0.3% in the
third quarter of 2015.
Total operating expenses in the third quarter of 2016 were of
$5.6 million, compared to total
operating expenses of $10.0 million
in the third quarter of 2015.
Loss from operations was $1.5
million in the third quarter of 2016, as compared to a loss
from operations of $9.9 million in
the third quarter of 2015.
Share-based compensation was $79,538 in the third quarter of 2016, as compared
to nil in the third quarter of 2015.
Other income was $0.5 million in
the third quarter of 2016, as compared to other income of
$0.1 million in the third quarter of
2015.
Net loss was $1.8 million in the
third quarter of 2016 as compared to a net loss of $9.8 million in the third quarter of 2015.
As of September 30, 2016, Acorn's
cash and cash equivalents, with restricted cash, totaled
$27.7 million, as compared to
$12.3 million as of December 31, 2015.
As of September 30, 2016, the
Company had repurchased 140,563 ADSs at an average price
$7.60 per ADS under its share
repurchase program.
Conference Call
The Company will host a conference call at 8:30 a.m.
ET (5:30 a.m. PT), December
19, 2016 to discuss financial results. Dial-in details for the
earnings conference call are as follows:
US/Canada:
|
+1-888-220-8474
|
Northern
China:
|
+86-10-800-714-1504
|
Southern
China:
|
+86-10-800-140-1379
|
Hong Kong:
|
+1-800-903-658
|
International:
|
+1-913-312-0384
|
Please dial in 10 minutes before the call is scheduled to begin
and provide the passcode 4169655 to join the call. A replay will be
available approximately two hours following the conclusion of the
conference call through December 26,
2016 and can be accessed by dialing (888) 203-1112, or (719)
457-0820, passcode 4169655. An archived audio file of the
call will be available on the Company's website
http://www.acorninternationalir.com/home/news-and-events/webcasts-and-presentations/.
About Acorn International, Inc.
Acorn is a marketing and branding company in China with a proven track record of
developing, promoting and selling a diverse portfolio of
proprietary-branded products, as well as well-established and
promising new products from third parties. Its business is
currently comprised of two main divisions, its direct sales
platforms and its nationwide distribution network. For more
information visit www.acorninternationalir.com.
Safe Harbor Statement under the Private Securities
Litigation Reform Act of 1995
This press release contains forward-looking statements. These
statements constitute "forward-looking" statements within the
meaning of 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 "anticipates," "believes,"
"estimates," "expects," "future," "going forward," "intends,"
"outlook," "plans," "target," "will," and similar statements and
include statements with respect to the Company's ability to
increase revenue, maintain margins, manage expenses and generate
additional cash flow; the Company's ability to grow sales of
its proprietary-branded products as well as
third-party products and brands through e-commerce, its other
direct sales platforms as well as its nationwide distribution
network; and the Company ability to sell its non-core assets as
planned. The Company's efforts to implement its proposed
business plans, reduction of operating expenses or sale of its
assets may not succeed as anticipated or at all. Such statements
are based on management's current expectations and current market
and operating conditions, and relate to events that involve known
or unknown risks, uncertainties, and other factors, all of which
are difficult to predict and many of which are beyond the Company's
control, which may cause the Company's actual results, performance,
or achievements to differ materially from those in these
preliminary financial results and the forward-looking statements.
Further information regarding these and other risks, uncertainties,
or factors is included in the Company's filings with the U.S.
Securities and Exchange Commission. The Company does not undertake
any obligation to update any forward-looking statement as a result
of new information, future events, or otherwise, except as required
by law.
Other factors that could cause forward-looking statements to
differ materially from actual future events or results include
risks and uncertainties related to: the Company's ability to
successfully improve or introduce new products and services,
including to offset declines in sales of existing products and
services; the Company's ability to stay abreast of consumer market
trends and maintain the Company's reputation and consumer
confidence; the Company's ability to execute and maintain a
successful market strategy; potential unauthorized use of the
Company's intellectual property; potential disruption of the
Company's manufacturing processes; increasing competition in
China's consumer market; the
Company's U.S. tax status as a passive foreign investment company;
and general economic and business conditions in China. The
financial information contained in this release should be read in
conjunction with the consolidated financial statements and notes
thereto included in the Company's 2015 annual report on Form 20-F
filed with SEC on May 16, 2016. For a discussion of other
important factors that could adversely affect the Company's
business, financial condition, results of operations and prospects,
see "Risk Factors" beginning on page 8 of the Company's Form 20-F
for the fiscal year ended December 31, 2015. The Company's
actual results of operations for the third quarter of 2016 are not
necessarily indicative of its operating results for any future
periods. Any projections in this release are based on limited
information currently available to the Company, which is subject to
change. Although such projections and the factors influencing them
will likely change, the Company will not necessarily update the
information. Such information speaks only as of the date of this
release.
Statement Regarding Unaudited Financial Information
The unaudited financial information set forth above is
preliminary and subject to potential adjustments. Adjustments to
the consolidated financial statements may be identified when audit
work has been performed for the Company's year-end audit, which
could result in significant differences from this preliminary
unaudited condensed financial information.
Contact:
|
|
Acorn International,
Inc.
|
Compass Investor
Relations
|
Ms. Naomi
Deng
|
Ms. Elaine Ketchmere,
CFA
|
Phone
+86-21-5151-2944
|
Phone:
+1-310-528-3031
|
Email:
dengqi@chinadrtv.com
|
Email:
Eketchmere@compass-ir.com
|
www.chinadrtv.com
|
www.compassinvestorrelations.com
|
ACORN
INTERNATIONAL, INC.
|
UNAUDITED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(In US
dollars)
|
|
|
|
|
|
|
|
|
|
3 Months Ended
September 30
|
|
9 Months Ended
September 30
|
|
2015
(unaudited)
|
|
2016
(unaudited)
|
|
2015
(unaudited)
|
|
2016
(unaudited)
|
|
|
|
|
|
|
|
|
Net
revenues
|
14,040,566
|
|
7,540,146
|
|
38,484,634
|
|
18,456,112
|
Cost of
revenues
|
(14,004,690)
|
|
(3,428,467)
|
|
(30,386,300)
|
|
(9,003,461)
|
Gross
profit
|
35,876
|
|
4,111,679
|
|
8,098,334
|
|
9,452,651
|
Operating
(expenses) income
|
|
|
|
|
|
|
|
Advertising
expenses
|
(51,432)
|
|
-
|
|
(2,143,498)
|
|
(23,701)
|
Other selling
and marketing expenses
|
(4,959,365)
|
|
(3,285,211)
|
|
(20,409,392)
|
|
(8,866,963)
|
General and
administrative expenses
|
(4,691,563)
|
|
(2,783,853)
|
|
(18,826,786)
|
|
(9,540,267)
|
Other operating
income, net
|
(277,065)
|
|
468,099
|
|
(472,998)
|
|
7,260,739
|
Total operating
(expenses) income
|
(9,979,425)
|
|
(5,600,965)
|
|
(41,852,674)
|
|
(11,170,192)
|
Loss from
operations
|
(9,943,549)
|
|
(1,489,286)
|
|
(33,754,340)
|
|
(1,717,541)
|
Other income,
net
|
109,729
|
|
459,428
|
|
817,726
|
|
18,550,007
|
Income
(loss) before income taxes and equity in losses of
affiliates
|
(9,833,820)
|
|
(1,029,858)
|
|
(32,936,614)
|
|
16,832,466
|
Income tax
expenses
|
(30,471)
|
|
(26,232)
|
|
17,791
|
|
(4,785,523)
|
Equity in
losses of affiliates
|
-
|
|
(718,121)
|
|
-
|
|
(718,121)
|
Net income
(loss)
|
(9,864,291)
|
|
(1,774,211)
|
|
(32,918,823)
|
|
11,328,822
|
Net (loss)
attributable to noncontrolling interests
|
(14,879)
|
|
(1,740)
|
|
(54,157)
|
|
(24,578)
|
Net income
(loss) attributable to Acorn International, Inc.
|
(9,849,412)
|
|
(1,772,471)
|
|
(32,864,666)
|
|
11,353,400
|
ACORN
INTERNATIONAL, INC.
|
CONSOLIDATED
BALANCE SHEETS
(In US
dollars)
|
|
|
|
|
|
December
31,
2015
|
|
September
30,
2016
|
|
|
|
(Unaudited)
|
Assets
|
|
|
|
Cash and cash
equivalents
|
12,146,854
|
|
27,638,816
|
Restricted
cash
|
126,278
|
|
104,825
|
Accounts
receivable, net
|
1,905,499
|
|
2,546,766
|
Notes
receivable
|
276,062
|
|
130,084
|
Inventory
|
4,135,624
|
|
3,818,539
|
Held-for-sale
assets
|
3,808,471
|
|
-
|
Prepaid
advertising expenses
|
474,761
|
|
439,456
|
Other prepaid
expenses and current assets, net
|
6,314,872
|
|
4,010,408
|
Deferred tax
assets, net
|
1,076,154
|
|
1,046,470
|
Current
assets
|
30,264,575
|
|
39,735,364
|
|
|
|
|
Prepaid land use
rights
|
7,195,292
|
|
6,874,795
|
Property and
equipment, net
|
16,615,300
|
|
15,259,496
|
Acquired intangible
assets, net
|
876,970
|
|
650,698
|
Investments in
affiliates
|
718,121
|
|
110,000
|
Available-for-sale
securities
|
181,164,778
|
|
75,891,006
|
Convertible
loan
|
3,257,622
|
|
3,361,316
|
Other long-term
assets
|
626,108
|
|
372,893
|
Total
assets
|
240,718,766
|
|
142,255,568
|
|
|
|
|
Liabilities and
equity
|
|
|
|
Accounts
payable
|
3,061,519
|
|
1,905,825
|
Accrued
expenses and other current liabilities
|
11,855,695
|
|
5,042,478
|
Income taxes
payable
|
2,091,559
|
|
6,285,496
|
Deferred
revenue
|
548,066
|
|
422,254
|
Current
liabilities
|
17,556,839
|
|
13,656,053
|
|
|
|
|
Deferred tax
liability
|
44,449,212
|
|
18,298,450
|
Total
liabilities
|
62,006,051
|
|
31,954,503
|
|
|
|
|
Equity
|
|
|
|
Ordinary
shares
|
890,185
|
|
890,185
|
Additional
paid-in capital
|
161,308,330
|
|
161,796,406
|
Accumulated
deficits
|
(126,349,246)
|
|
(114,995,846)
|
Accumulated
other comprehensive income
|
162,580,400
|
|
83,428,999
|
Treasury stock,
at cost
|
(20,109,451)
|
|
(21,176,247)
|
Total Acorn
International, Inc. shareholders' equity
|
178,320,218
|
|
109,943,497
|
|
|
|
|
Noncontrolling
interests
|
392,497
|
|
357,568
|
Total
equity
|
178,712,715
|
|
110,301,065
|
Total liabilities
and equity
|
240,718,766
|
|
142,255,568
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/acorn-international-reports-financial-results-for-the-third-quarter-of-2016-300380658.html
SOURCE Acorn International, Inc.