ChinaNet Online Holdings, Inc. (Nasdaq:CNET) ("ChinaNet" or the
"Company"), an integrated online advertising, precision marketing
and data-analysis and management services platform, today announced
its unaudited financial results for the first quarter of 2019.
First Quarter 2019
Highlights
- Net revenues increased by 3.8% to $8.6 million from $8.3
million in the corresponding period of 2018.
- Revenues from internet advertising service increased by 7.0% to
$1.8 million from $1.7 million in the corresponding period of
2018.
- Revenues from search engine marketing service increased by 4.4%
to $6.7 million from $6.4 million in the corresponding period of
2018.
Mr. Handong Cheng, Chairman, President, and
Chief Executive Officer of CNET, stated, “In the first quarter of
2019, we enhanced our relationships with customers through our core
online marketing businesses and improved their sales lead
conversion rates. As a result, revenue contribution from our
internet advertising service and distribution of the searching
engine marketing service increased by 7.0% and 4.4% year over year,
respectively. Our effective execution of cost control strategy has
also yielded positive results. Accordingly, we narrowed our
operating expenses as a percentage of total revenues to 13.8% from
26.0% in the prior year period. Moving forward, we will maintain
revenue growth, refine our cost structure, and capitalize on
emergent business opportunities in the market to continuously
improve our ability to generate profits and create shareholder
value.”
First Quarter 2019 Financial
Results
NET REVENUES Net revenues
increased by 3.8% to $8.6 million in the first quarter of 2019 from
$8.3 million in the corresponding period of 2018, primarily driven
by an increase in revenues from distribution of search engine
marketing and data services.
Revenues from internet advertising service for
the first quarter of 2019 increased by 7.0% to $1.8 million from
$1.7 million in the corresponding period of 2018. The increase was
mainly attributable to the Company’s continuous efforts to improve
the effectiveness of ad placements for its customers.
Revenues from distribution of the search engine
marketing service for the first quarter of 2019 increased by 4.4%
to $6.7 million from $6.4 million in the corresponding period of
2018. The growth was primarily attributable to the increasing
recognition of search engine marketing service among clients that
wanted to achieve additional direct marketing results and a higher
return on investment.
COST OF REVENUES AND GROSS
PROFIT Cost of revenues was $8.1 million in the first
quarter of 2019 compared to $7.7 million in the corresponding
period of 2018. The growth was primarily attributable to an
increase in revenue contributions from search engine marketing
service in the first quarter of 2019, which resulted in higher
resource costs as the Company continued to obtain marketing access
to well-known search engines in China and optimize customers’ ad
placements on the Company’s ad portals.
Gross profit in the first quarter of 2019 was
$0.4 million compared to $0.6 million in the corresponding period
of 2018.
OPERATING LOSSOperating
expenses in the first quarter of 2019 were $1.2 million compared to
$2.1 million in the corresponding period of 2018. As a percentage
of total revenues, operating expenses decreased to 13.8% from 26.0%
in the corresponding period of 2018.
Sales and marketing expenses in the first
quarter of 2019 decreased by 70.0% to $0.2 million from $0.6
million in the corresponding period of 2018. As a percentage of
total revenues, sales and marketing expenses decreased to 2.0% from
6.8% in the corresponding period of 2018. The lower expenses were
primarily attributable to the Company’s enhanced relationships with
its customers and subsequently reduced advertising expenses for the
promotion of the Company’s services.
General and administrative expenses in the first
quarter of 2019 decreased by 40.6% to $0.8 million from $1.4
million in the corresponding period of 2018. As a percentage of
total revenues, general and administrative expenses decreased to
9.5% from 16.5% in the corresponding period of 2018. The decrease
in general and administrative expenses was primarily due to the
Company’s effective execution of its cost reduction plan and a
decrease in allowance for doubtful accounts.
Research and development expenses in the first
quarter of 2019 remained at $0.2 million, which was in line with
the prior year period.
Operating loss in the first quarter of 2019, as
a result of decreased operating expenses, narrowed to $0.7 million
compared to $1.5 million in the corresponding period of 2018.
Change in fair value of warrant liabilities in
the first quarter of 2019 was recorded as a loss of $0.4 million
compared to a gain of $1.47 million in the corresponding period of
2018. The change mainly reflected the effect of the fair value
changes of warrant liabilities during the first quarter of
2019.
NET LOSSNet loss attributable
to ChinaNet Online Holdings, Inc. was $1.1 million in the first
quarter of 2019 compared to $0.6 million in the corresponding
period of 2018.
BALANCE SHEETAs of March 31,
2019, the Company had cash and cash equivalents of $1.5 million
compared to $3.7 million as of December 31, 2018.
About ChinaNet Online Holdings,
Inc.ChinaNet Online Holdings, Inc., a parent company of
ChinaNet Online Media Group Ltd., incorporated in the BVI
(ChinaNet), is an integrated online advertising, precision
marketing and data-analysis and management services platform.
ChinaNet provides prescriptive analysis for its clients to improve
business outcomes and to create more efficient enterprises. The
Company leverages an optimization framework, provided by its
comprehensive data-analysis infrastructure, to blend data,
mathematical, and computational sciences into an outcome management
platform for which it monetizes on a per client basis. ChinaNet
uniquely optimizes and prescribes its clients decision making
processes based on its proprietary ecosystem. For more information,
visit www.chinanet-online.com.
Safe Harbor StatementThis
release contains certain "forward-looking statements" relating to
the business of ChinaNet Online Holdings, Inc., which can be
identified by the use of forward-looking terminology such as
"believes," "expects," "anticipates," "estimates" or similar
expressions. Such forward-looking statements involve known and
unknown risks and uncertainties, including business uncertainties
relating to government regulation of our industry, market demand,
reliance on key personnel, future capital requirements, competition
in general and other factors that may cause actual results to be
materially different from those described herein as anticipated,
believed, estimated or expected. Certain of these risks and
uncertainties are or will be described in greater detail in our
filings with the Securities and Exchange Commission. These
forward-looking statements are based on ChinaNet's current
expectations and beliefs concerning future developments and their
potential effects on the Company. There can be no assurance that
future developments affecting ChinaNet will be those anticipated by
ChinaNet. These forward-looking statements involve a number of
risks, uncertainties (some of which are beyond the control of the
Company) or other assumptions that may cause actual results or
performance to be materially different from those expressed or
implied by such forward-looking statements. ChinaNet undertakes no
obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise, except as may be required under applicable securities
laws.
Investor Relations ContactICR,
Inc.Jack WangTel: +1-646-308-1635Email: CNET@icrinc.com
CHINANET ONLINE HOLDINGS, INC. |
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
LOSS |
(In thousands, except for number of shares and per share data) |
|
|
|
Three Months Ended March 31, |
|
|
2019 |
|
|
|
2018 |
|
|
(US $) |
|
(US $) |
|
(Unaudited) |
|
(Unaudited) |
|
|
|
|
Revenues |
|
|
|
From unrelated parties |
$ |
8,560 |
|
|
$ |
8,260 |
|
From related parities |
|
7 |
|
|
|
- |
|
Total revenues |
|
8,567 |
|
|
|
8,260 |
|
Cost of
revenues |
|
8,125 |
|
|
|
7,659 |
|
Gross
profit |
|
442 |
|
|
|
601 |
|
|
|
|
|
Operating
expenses |
|
|
|
Sales and marketing expenses |
|
169 |
|
|
|
564 |
|
General and administrative expenses |
|
810 |
|
|
|
1,364 |
|
Research and development expenses |
|
201 |
|
|
|
218 |
|
Total operating expenses |
|
1,180 |
|
|
|
2,146 |
|
|
|
|
|
Loss from
operations |
|
(738 |
) |
|
|
(1,545 |
) |
|
|
|
|
Other
income/(expenses) |
|
|
|
Impairment on long-term investments |
|
- |
|
|
|
(471 |
) |
Interest expense, net |
|
(11 |
) |
|
|
(10 |
) |
Other expenses |
|
(2 |
) |
|
|
(22 |
) |
Change in fair value of warrant liabilities |
|
(350 |
) |
|
|
1,474 |
|
Total other
(expenses)/income |
|
(363 |
) |
|
|
971 |
|
|
|
|
|
Loss before income tax
(expense)/benefit and noncontrolling interests |
|
(1,101 |
) |
|
|
(574 |
) |
Income tax (expense)/benefit |
|
(39 |
) |
|
|
4 |
|
Net loss |
|
(1,140 |
) |
|
|
(570 |
) |
Net loss attributable to noncontrolling interests |
|
2 |
|
|
|
5 |
|
Net loss attributable
to ChinaNet Online Holdings, Inc. |
$ |
(1,138 |
) |
|
$ |
(565 |
) |
|
|
|
|
Net loss |
$ |
(1,140 |
) |
|
$ |
(570 |
) |
Foreign currency translation
(loss)/gain |
|
(36 |
) |
|
|
474 |
|
Comprehensive
loss |
|
(1,176 |
) |
|
|
(96 |
) |
Comprehensive loss/(income)
attributable to noncontrolling interests |
|
3 |
|
|
|
(3 |
) |
Comprehensive loss
attributable to ChinaNet Online Holdings, Inc. |
$ |
(1,173 |
) |
|
$ |
(99 |
) |
|
|
|
|
Loss per
share |
|
|
|
Loss per common share |
|
|
|
Basic and diluted |
$ |
(0.07 |
) |
|
$ |
(0.04 |
) |
|
|
|
|
Weighted average
number of common shares outstanding: |
|
|
|
|
|
|
|
Basic and diluted |
|
16,410,543 |
|
|
|
15,484,082 |
|
|
CHINANET ONLINE HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS (In thousands, except for number of
shares and per share data)
|
|
|
March 31, 2019 |
|
December 31, 2018 |
|
|
|
(US $) |
|
(US $) |
|
|
|
(Unaudited) |
|
|
Assets |
|
|
|
|
|
Current assets: |
|
|
|
|
|
Cash and cash equivalents |
|
|
$ |
1,483 |
|
|
$ |
3,742 |
|
Accounts receivable, net of allowance for doubtful accounts of
$3,651 and $3,393, respectively |
|
|
|
6,830 |
|
|
|
6,359 |
|
Prepayment and deposit to suppliers |
|
|
|
2,079 |
|
|
|
2,154 |
|
Due from related parties, net |
|
|
|
207 |
|
|
|
226 |
|
Other current assets, net |
|
|
|
9 |
|
|
|
19 |
|
Total current assets |
|
|
|
10,608 |
|
|
|
12,500 |
|
|
|
|
|
|
|
Long-term investments |
|
|
|
36 |
|
|
|
- |
|
Property and equipment, net |
|
|
|
112 |
|
|
|
142 |
|
Intangible assets, net |
|
|
|
41 |
|
|
|
45 |
|
Operating lease right-of-use
assets |
|
|
|
20 |
|
|
|
- |
|
Blockchain application platform
development costs |
|
|
|
3,731 |
|
|
|
3,725 |
|
Deferred tax assets, net |
|
|
|
527 |
|
|
|
556 |
|
Total Assets |
|
|
$ |
15,075 |
|
|
$ |
16,968 |
|
|
|
|
|
|
|
Liabilities and
Equity |
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
Short-term bank loan |
|
|
$ |
891 |
|
|
$ |
874 |
|
Accounts payable |
|
|
|
1,165 |
|
|
|
2,869 |
|
Advances from customers |
|
|
|
1,644 |
|
|
|
1,061 |
|
Accrued payroll and other accruals |
|
|
|
411 |
|
|
|
521 |
|
Taxes payable |
|
|
|
3,120 |
|
|
|
2,997 |
|
Other current liabilities |
|
|
|
127 |
|
|
|
118 |
|
Total current liabilities |
|
|
|
7,358 |
|
|
|
8,440 |
|
Long-term liabilities: |
|
|
|
|
|
Long-term borrowing from a director |
|
|
|
130 |
|
|
|
128 |
|
Warrant liabilities |
|
|
|
956 |
|
|
|
606 |
|
Total Liabilities |
|
|
|
8,444 |
|
|
|
9,174 |
|
|
|
|
|
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
|
|
|
Equity: |
|
|
|
|
|
ChinaNet Online Holdings, Inc.’s stockholders’ equity |
|
|
|
|
|
Common stock (US$0.001 par value; authorized 50,000,000 shares;
issued and outstanding 16,412,543 shares and 16,382,543 shares at
March 31, 2019 and December 31, 2018, respectively) |
|
|
|
16 |
|
|
|
16 |
|
Additional paid-in capital |
|
|
|
38,288 |
|
|
|
38,275 |
|
Statutory reserves |
|
|
|
2,607 |
|
|
|
2,607 |
|
Accumulated deficit |
|
|
|
(35,650 |
) |
|
|
(34,512 |
) |
Accumulated other comprehensive income |
|
|
|
1,422 |
|
|
|
1,457 |
|
Total ChinaNet Online Holdings, Inc.’s stockholders’ equity |
|
|
|
6,683 |
|
|
|
7,843 |
|
|
|
|
|
|
|
Noncontrolling interests |
|
|
|
(52 |
) |
|
|
(49 |
) |
Total equity |
|
|
|
6,631 |
|
|
|
7,794 |
|
|
|
|
|
|
|
Total Liabilities and Equity |
|
|
$ |
15,075 |
|
|
$ |
16,968 |
|
CHINANET ONLINE HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands)
|
Three Months Ended March 31, |
|
|
2019 |
|
|
|
2018 |
|
|
(US $) |
|
(US $) |
|
(Unaudited) |
|
(Unaudited) |
Cash flows from operating activities |
|
|
|
Net loss |
$ |
(1,140 |
) |
|
$ |
(570 |
) |
Adjustments to reconcile
net loss to net cash used
in operating activities |
|
|
|
Depreciation and amortization |
|
38 |
|
|
|
216 |
|
Amortization of operating lease right-of-use assets |
|
84 |
|
|
|
- |
|
Share-based compensation expenses |
|
101 |
|
|
|
75 |
|
Provision for allowances for doubtful accounts |
|
192 |
|
|
|
481 |
|
Impairment on long-term investments |
|
- |
|
|
|
471 |
|
Deferred taxes |
|
39 |
|
|
|
(4 |
) |
Change in fair value of warrant liabilities |
|
350 |
|
|
|
(1,474 |
) |
Changes in operating
assets and liabilities |
|
|
|
Accounts receivable |
|
(547 |
) |
|
|
3,413 |
|
Prepayment and deposit to suppliers |
|
22 |
|
|
|
(1,178 |
) |
Due from related parties |
|
27 |
|
|
|
3 |
|
Other current assets |
|
10 |
|
|
|
(47 |
) |
Accounts payable |
|
(1,833 |
) |
|
|
(2,105 |
) |
Advances from customers |
|
562 |
|
|
|
(1,668 |
) |
Accrued payroll and other accruals |
|
(114 |
) |
|
|
(147 |
) |
Other current liabilities |
|
(115 |
) |
|
|
(553 |
) |
Taxes payable |
|
65 |
|
|
|
(92 |
) |
Prepaid lease payment |
|
(11 |
) |
|
|
- |
|
Net cash used in
operating activities |
|
(2,270 |
) |
|
|
(3,179 |
) |
|
|
|
|
Cash flows from investing activities |
|
|
|
Payment for purchase of office equipment |
|
- |
|
|
|
(1 |
) |
Investment to an ownership investee company |
|
(36 |
) |
|
|
- |
|
Short-term loan to an unrelated party |
|
- |
|
|
|
(2,000 |
) |
Collection of short-term loan from an unrelated party |
|
- |
|
|
|
2,672 |
|
Payment for acquisition of noncontrolling interest |
|
- |
|
|
|
(1,179 |
) |
Payment for blockchain application platform development costs |
|
- |
|
|
|
(1,200 |
) |
Purchase of software technology |
|
- |
|
|
|
(448 |
) |
Net cash used in
investing activities |
|
(36 |
) |
|
|
(2,156 |
) |
Cash flows from financing activities |
|
|
|
|
Proceeds from issuance of common stock and warrant (net of cash
offering cost of US$809) |
|
|
- |
|
|
|
10,263 |
|
Repayment to investors related to
terminated security purchase agreements |
|
|
- |
|
|
|
(493 |
) |
Proceeds from short-term bank loan |
|
|
445 |
|
|
|
- |
|
Repayment of short-term bank loan |
|
|
(445 |
) |
|
|
- |
|
Net cash provided by
financing activities |
|
|
- |
|
|
|
9,770 |
|
|
|
|
|
|
Effect of exchange rate fluctuation on cash and cash
equivalents |
|
|
47 |
|
|
|
116 |
|
|
|
|
|
|
Net /(decrease)/increase in cash, cash equivalents, and
restricted cash |
|
|
(2,259 |
) |
|
|
4,551 |
|
|
|
|
|
|
Cash, cash equivalents, and restricted cash at beginning of the
period |
|
|
3,742 |
|
|
|
2,952 |
|
Cash, cash equivalents, and restricted cash at end of the
period |
|
$ |
1,483 |
|
|
$ |
7,503 |
|
ZW Data Action Technolog... (NASDAQ:CNET)
Historical Stock Chart
From Sep 2024 to Oct 2024
ZW Data Action Technolog... (NASDAQ:CNET)
Historical Stock Chart
From Oct 2023 to Oct 2024