NEW YORK, May 15, 2017 /PRNewswire/ -- Wecast Network,
Inc. (NASDAQ: WCST) ("Wecast" or the "Company" or "WCST"),
announced today its Q1 2017 operating results for the period ending
March 31, 2017 (a full copy of the
Company's quarterly report on Form 10-Q will also be posted at
www.sec.gov).
Conference Call: CEO Bing Yang, Chairman Bruno Wu and CFO Simon
Wang will host a conference call at 4:15 p.m. ET
today (the conference call time was moved from 8:00 a.m ET
based solely on last-minute internal scheduling conflicts).
To join the webcast, please visit the 'Webcasts and Events'
section of the WCST corporate website,
(http://corporate.wecastnetworkinc.com),
or call the toll-free dial-in number: 877-407-3107;
International callers should dial: 201-493-6796.
WCST Q1 2017 OPERATING RESULTS
Revenue for the three months ending March
31, 2017 was $33.2 million as
compared to $1.3 million for the same
period in 2016, an increase of approximately $31.9 million, or 2512%. The increase was
primarily due to our new business lines acquired in January 2017 and one time consulting services
that we provided to several customers. This was partially
offset by a decrease of our legacy YOD business in the amount of
$0.5 million, as the legacy YOD
business shifts to the new exclusive distribution agreement with
Zhejiang Yanhua Culture Media Co., Ltd. ("Yanhua ") which was
announced in Q4 2016.
Cost of revenues was approximately $29.3
million for the three months ending March 31, 2017, as compared to $0.9 million for the three months ending
March 31, 2016. Our cost of revenues
increased by $28.4 million which is
in line with the increase of revenues. Our cost of revenues is
primarily comprised of electronic products purchasing costs from
Wecast Services.
Gross profit margin for the three months ending March 31, 2017 decreased from 27.88% in the same
period 2016 to 11.52%, mainly due to the shift to the Wecast
Services business from the legacy YOD business.
Selling, general and administrative ("SG&A") expenses for
the three months ending March 31,
2017 was $1.3 million as
compared to $2.2 million for the same
period in 2016, a decrease of approximately $0.9 million or 42%. Salaries and
compensation (a component of SG&A) for the three months ending
March 31, 2017 was $0.8 million, a decrease of $0.6 million. Rent expenses for the three months
ending March 31, 2017 was
$0.1 million, a decrease of
$0.1 million. The decreases were
mainly attributable to certain existing employees and offices that
had been used to provide consulting services, whose cost was
recorded and shifted to cost of sales in the three months ending
March 31, 2017.
Travel and entertainment expenses for the three months ending
March 31, 2017 was $0.4 million, a decrease of $0.3 million while advertising and promotion
expenses for the three months ending March
31, 2017 was $0.02 million, a
decrease of $0.03 million. This was
due to the legacy YOD business transition to the Yanhua Partnership
(announced Q4 2016), which reduced sales expenses related to that
part of our business.
Professional fees for the three months ending March 31, 2017 was $0.3
million as compared to $0.4
million in the same period in 2016, a decrease of
approximately $0.1 million. This was
mainly due to a decrease in audit and valuation
fees.
Basic and diluted earnings per share for Q1 2017 was
$0.04 as compared to a $0.09 loss per share in the same period
2016.
Chairman Bruno Wu stated, "As the
Company was able to recognize revenues from new businesses from the
very beginning of the quarter, revenues for Q1 2017 were
approximately $33 million dollars, or
26 times more than revenues for the same period Q1 2016 and 7 times
more than revenues for ALL of 2016. Revenues in Q1 2017 were
mostly attributable to the new business model or the Wecast
Services Group, a business vertical that resides under the Product
Sales Cloud, and was formed with the recent acquisitions of M.Y.
Products, Sun Video Group and Wide Angle Group announced in early
January. More specifically, revenues were generated from our first
product vertical, consumer electronics, as well as our supply chain
management services. We intend to add more product verticals beyond
consumer electronic and as these categories grow and scale, and new
product verticals and services are offered, we expect gross margins
to expand as well as the year continues. We are also working
diligently on launching and expanding our other 2 cloud services,
the Brand Intellectual Property Cloud and the Financial Product
Transactional Cloud, which have been described on our prior
earnings call as well as in our recently published investor
presentation."
"While we will not be providing any guidance into Q2 revenues
today, based on the progression we have seen thus far and the ramp
up that we anticipate, we are reiterating our full year top line
revenue guidance of $300 million
USD."
"Finally, I am extremely proud of the hard work and
determination of our team led by Mr. Bing Yang. While there
is still a tremendous amount of work to be done, the progression
that has been made thus far on building an efficient and valuable
platform and tool for our business customers has been extremely
exciting to witness. We have a strong leadership group and
employee pool in place, all of whom consider themselves fully
aligned with our external stakeholders and are determined to create
a total business, technology and financial services platform that
will ultimately drive shareholder value to new heights."
About Wecast Network, Inc.
(http://corporate.wecastnetworkinc.com)
Wecast Network (NASDAQ: WCST) is aiming to be the leading
provider of total B2B business solutions for today's constantly
evolving business landscape. With a focus on "BASE" or
Blockchain, Artificial Intelligence, Supply Chain & Exchanges,
Wecast is organized into three cloud-based categories and business
units: Brand Intellectual Property Cloud, Product Sales Cloud
and the Transactional Cloud. With the three clouds
functioning both independently and interdependently, Wecast is
creating a vertical, transactional and flexible platform for
today's global enterprises..
The Company's mission and vision is to be the world's leading
cloud-based, total B2B enterprise solution & platform provider
that empowers businesses to grow with Big Data technology.
Safe Harbor Statement
This press release contains certain statements that may
include "forward looking statements." All statements other than
statements of historical fact included herein are "forward-looking
statements." These forward looking statements are often identified
by the use of forward-looking terminology such as "believes,"
"expects" or similar expressions, involve known and unknown risks
and uncertainties. Although the Company believes that the
expectations reflected in such forward-looking statements are
reasonable, they do involve assumptions, risks and uncertainties,
and these expectations may prove to be incorrect. You should not
place undue reliance on these forward-looking statements, which
speak only as of the date of this press release. The Company's
actual results could differ materially from those anticipated in
these forward-looking statements as a result of a variety of
factors, including those discussed in the Company's periodic
reports that are filed with the Securities and Exchange Commission
and available on its website (http://www.sec.gov). All
forward-looking statements attributable to the Company or persons
acting on its behalf are expressly qualified in their entirety by
these factors. Other than as required under the securities laws,
the Company does not assume a duty to update these forward-looking
statements.
CONTACT:
Jason Finkelstein
VP, Strategy & Investor
Relations
Wecast Network,
Inc.
212-206-1216
Financial Tables Follow
Wecast Network,
Inc., Its Subsidiaries and Variable Interest Entity
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
March 31,
2017
|
|
|
March 31,
2016
|
|
Revenue
|
$
|
33,164,351
|
|
$
|
1,269,726
|
|
Cost of
revenue
|
|
29,342,379
|
|
|
915,780
|
|
Gross
profit
|
|
3,821,972
|
|
|
353,946
|
|
Operating
expenses:
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
|
1,265,172
|
|
|
2,165,053
|
|
Professional
fees
|
|
267,133
|
|
|
367,446
|
|
Depreciation and
amortization
|
|
196,211
|
|
|
97,463
|
|
Total operating
expenses
|
|
1,728,516
|
|
|
2,629,962
|
|
Income (loss) from
operations
|
|
2,093,456
|
|
|
(2,276,016)
|
|
Interest and other
income/(expense):
|
|
|
|
|
|
|
Interest expense, net
|
|
(41,557)
|
|
|
(33,473)
|
|
Change in fair value of warrant
liabilities
|
|
(270,116)
|
|
|
37,023
|
|
Equity in loss of equity method
investees
|
|
(43,746)
|
|
|
(10,348)
|
|
Others
|
|
(99,570)
|
|
|
162
|
|
Income (loss)
before income taxes
|
|
1,638,467
|
|
|
(2,282,652)
|
|
Income tax
benefit
|
|
-
|
|
|
8,612
|
|
Net income
(loss)
|
|
1,638,467
|
|
|
(2,274,040)
|
|
|
|
|
|
|
|
|
Net loss attributable
to non-controlling interest
|
|
(574,412)
|
|
|
(137,569)
|
|
Net income (loss)
attributable to Wecast Network, Inc. shareholders
|
$
|
2,212,879
|
|
$
|
(2,136,471
)
|
|
|
|
|
|
|
|
|
Basic and
diluted earnings (loss) per share
|
$
|
0.04
|
|
$
|
(0.09)
|
|
Weighted average
shares outstanding:
|
|
|
|
|
|
|
Diluted
|
|
60,715,721
|
|
|
24,484,562
|
|
Basic
|
|
55,382,002
|
|
|
24,484,562
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/wecast-network-reports-q1-2017-results-300457261.html
SOURCE Wecast Network, Inc.