Quarterly Revenue jumped
87% over the same period in
2017Overall Gross Margin
ImprovementConference Call on Wednesday May 16,
2018 at 9am ET
Borqs Technologies, Inc. (Nasdaq:BRQS) (the “Company”), a global
leader in embedded software and products for the Internet of Things
(IoT), today reported financial results for the quarter ended March
31, 2018.
Revenues
The Company reported net revenue of $58.3
million for the first quarter of 2018, including $50.4 million from
the Connected Solutions Business Unit which engaged in the design
and manufacturing of IoT products, and $7.9 million from the MVNO
Business Unit which included mobile virtual operator and some
traditional telephony services. This represented an 87%
increase in total net revenue from last year. The increased sales
in IoT products was primarily due to orders from a customer from
the emerging markets in Asia.
We expect a similar strong trend in the
Connected Solutions sales and anticipate moderate growth in the
MVNO mobile services for the rest of the year 2018.
Gross Margins
For the quarter ended March 31, 2018, gross
margin for the Connected Solutions Business Unit was 12.3% compared
with 12.9% from 2017. Despite significant volume increases in our
Connected Solutions BU activities in the first quarter of 2018, its
gross margin decreased due to the competitive nature of the
business.
For the quarter ended March 31, 2018, our MVNO
Business Unit which included some traditional telephony businesses
returned a 33.6% gross margin versus 14.9% from 2017. The
healthy gross margin attained was attributed to our activities in
this business unit that has achieved economies of scale and also
that our incumbent operator, China Unicom, has removed a minimum
charge since October 2016.
The resulting combined gross margin for Q1 of
2018 was 15.2% versus 13.3% from a year ago.
Net Income
The Company achieved net income of $1.4 million
for the first quarter in 2018, as compared to $18,000 of net income
for the same period a year ago.
EBITDA and Adjusted EBITDA
EBITDA was $5.0 million for the first quarter in
2018, as compared to $2.5 million for the same period in 2017.
Adjusted EBITDA, which includes other non-operational (income)
expense, was $5.0 million for the first quarter in 2018, as
compared to $2.3 million for the same period in 2017.
EBITDA Non-US-GAAP
Reconciliation
To present the Company’s operating results of the first quarter
in 2018, the following non-US-GAAP measures excluded certain items
to isolate the results without the effects of interest, taxes,
depreciation and amortization, and other non-operational items.
|
|
|
3 months ended |
|
March 31, |
|
2017 |
|
2018 |
|
(US$ in thousands) |
|
|
|
|
Net income |
18 |
|
1,387 |
|
|
|
|
Interest expense -
net |
617 |
|
239 |
Income tax
expenses |
444 |
|
1,183 |
Depreciation and
amortization |
1,225 |
|
1,798 |
Foreign exchange
loss |
177 |
|
374 |
EBITDA |
2,481 |
|
4,981 |
|
|
|
|
Other non-operational
(income) expense |
(185) |
|
6 |
|
|
|
|
Adjusted
EBITDA |
2,296 |
|
4,987 |
|
|
|
|
Other Details
The Company’s quarterly report on Form 10-Q for
the quarter ended March 31, 2018 has been filed with the U.S.
Securities and Exchange Commission, and is accessible on the SEC
website at www.sec.gov.
Conference Call Schedule
Borqs will review the first quarter 2018 results
and highlights for the remainder of the year on Wednesday, May 16,
2018 at 9:00 am ET (6:00 am Pacific). The dial-in numbers are
+1-845-675-0437 or +1-866-519-4004 in the US and +86-400-620-8038
or +86-800-819-0121 in China; and then enter the Conference ID of
4086956. A replay of the conference call will be available
through May 24, 2018. The replay dial-in numbers are
+1-855-452-5696 in the US and +86-800-870-0206 in China; and then
enter the same Conference ID.
About Borqs Technologies,
Inc.
Borqs Technologies is a leading provider of
software and products for the IoT, providing customizable,
differentiated and scalable Android-based smart connected devices
and cloud service solutions. Borqs has achieved leadership and
customer recognition as an innovative end-to-end IoT solutions
provider leveraging its strategic chipset partner relationships as
well as its broad software and IP portfolio. The Company designs,
develops and provides turnkey solutions across device form factors
such as smartphones, tablets, smartwatches, trackers, automotive
IVI, and vertical application devices (for restaurants, payments
etc.). For more information, please visit the Company’s
website (www.borqs.com).
Forward-Looking Statements, Non-GAAP
Information and Additional Information
This press release includes “forward-looking statements” that
involve risks and uncertainties that could cause actual results to
differ materially from what is expected. Words such as “expects”,
“anticipates” and variations and similar words and expressions are
intended to identify such forward-looking statements, but the
absence of these words does not mean that a statement is not
forward-looking. Such forward-looking statements may include,
without limitation, statements regarding the plans and objectives
of management for future operations, projections of income or loss
or other financial items, or our future financial performance,
based on currently available information and reflect our
management’s current beliefs. Many factors could cause actual
events or results to differ materially from the events and results
discussed in the forward-looking statements, including, without
limitation, market acceptance of our products and services,
competition from existing products or new products that may emerge,
the implementation of our business model and strategic plans for
our business and our products, estimates of our future revenue,
expenses, capital requirements and our need for financing, our
financial performance, and current and future government
regulations, developments relating to our competitors, so the
reader is advised to refer to the Risk Factors sections of the
Company’s filings with the Securities and Exchange Commission for
additional information identifying important factors that could
cause actual results to differ materially from those anticipated in
the forward-looking statements. Except as expressly required by
applicable securities law, the Company disclaims any obligation to
update any forward-looking statements, whether as a result of new
information, future events or otherwise.
This release includes the non-GAAP presentation
of EBITDA and adjusted EBITDA. These non-GAAP measures are
not in accordance with, or an alternative for, measures prepared in
accordance with generally accepted accounting principles and may be
different from non-GAAP measures used by other companies. In
addition, these non-GAAP measures are not based on any
comprehensive set of accounting rules or principles. The Company
believes that non-GAAP measures have limitations in that they do
not reflect all of the amounts associated with the Company’s
results of operations as determined in accordance with GAAP and
that these measures should only be used to evaluate the Company’s
results of operations in conjunction with the corresponding GAAP
measures. The Company believes that the presentation of
non-GAAP measures when shown in conjunction with the corresponding
GAAP measures, provides useful information to investors and
management regarding financial and business trends relating to its
financial condition and its historical and projected results of
operations.
For its internal budgeting process, the
Company’s management uses financial statements that do not include,
when applicable, share-based compensation expense, amortization of
acquisition-related intangible assets,
acquisition-related/divestiture costs, significant asset
impairments and restructurings, significant litigation settlements
and other contingencies, significant gains and losses on
investments, the income tax effects of the foregoing and
significant tax matters. The Company’s management also uses the
foregoing non-GAAP measures, in addition to the corresponding GAAP
measures, in reviewing the financial results of the Company. In
prior periods, the Company has excluded other items that it no
longer excludes for purposes of its non-GAAP financial measures.
From time to time in the future there may be other items that the
Company may exclude for purposes of its internal budgeting process
and in reviewing its financial results.
Investor Contact:
Sandra DouInvestor Relations Sr. ManagerBorqs
Technologies, Inc.sandra.dou@borqs.net
www.borqs.com
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