LAS VEGAS, March 31, 2021 /PRNewswire/ -- Remark
Holdings, Inc. (NASDAQ: MARK), a diversified global technology
company with leading artificial intelligence ("AI") solutions and
digital media properties, today announced financial results for its
fiscal year ended December 31,
2020.
Annual Revenue More Than Doubles to $10.1
Million
Management Commentary
"After a challenging start to 2020 with COVID-19 lockdowns in
both China and the United States, we saw significant positive
momentum in our second half, and in particular, the fourth quarter.
For the fourth quarter we reported nearly $5.0 million in revenue, representing more than
ten times the $0.4 million recorded
in the fourth quarter of 2019," noted Kai-Shing Tao, Chairman and Chief Executive
Officer of Remark Holdings. "Demand for our AI solutions came from
schools, retail outlets, bank branches, and corporate facilities
and we expect demand momentum, particularly in the United States, to carry forward into 2021.
Additionally, during the quarter we expanded channel partnerships
which provide additional opportunities for a further acceleration
of growth in 2021."
Fiscal Year 2020 Business Highlights
- China Mobile continues to implement Remark's KanKan AI Platform
across all 17,800 of their retail stores despite delays caused by
COVID-19 lockdowns. As previously noted, Remark's KanKan AI
business also won Phase 2 which will increase the total spend per
store, and we expect this to be the first of many additional
software services added to the initial scope that will
significantly grow the addressable opportunity.
- Smart retail bank branch solutions and new products including
the recently launched Digital Marketing Platform were delivered to
approximately 150 Bank of China branches in the Szechuan province.
Currently servicing 1.8 million customers, the DMP quantifies
customer behavior and measures against benchmark performance
metrics, allowing for better customized service. Our first
installations reflect the initial capture of the $2 billion annual upgrade budget market
opportunity as 20,000 branches are scheduled to be upgraded each
year.
- Smart school solutions were delivered to over 150 campuses
during the year. Software upgrades were implemented to improve
computer vision, time attendance system, epidemic prevention system
and smart energy saving systems. Discussions are underway to expand
our sales channel to additional regions to compete for the 160,000
schools in major cities, and we expect to triple the number of
school installations in 2021.
- KanKan worked with China Mobile to begin installations of
KanKan AI's smart community offerings, delivering Phase 1
applications which include access control for vehicles, residents,
and delivery personnel. Phase 2 is expected to begin later this
year with additional applications including elderly and child
safety, elevator access control, restricted area access control,
behavioral analysis, and messaging via communication screens. We
are targeting 200 new smart communities this year.
- Remark AI's heath security solutions were chosen by several
large medical centers including the UMC group in Las Vegas and Morton Comprehensive Health
Services in Tulsa, Oklahoma. One
of the world's largest gaming companies based in Las Vegas, chose Remark AI's health security
platform for access point temperature monitoring at all of their
domestic and international facilities.
- Remark's research and development team released its edge
computing systems, the S and T series Smart Boxes, AI-based edge
computing boxes equipped with NVIDIA's new generation of
high-performance edge computing modules, with a smaller size and
lower power requirements. The Remark AI team also won three out of
five championships in the Visual Object Tracking category at the
16th European Conference on Computer Vision.
- New channel partnership programs were signed, including a
recently-announced relationship with Hewlett Packard Enterprises
whereby Remark and HP Enterprises will jointly market AI solutions
addressing retail management, security, surveillance, and health
security. Additional partnerships and the expansion of existing
partnerships are expected throughout 2021.
Fiscal Year 2020 Financial Results
- Revenue for fiscal year 2020 totaled $10.1 million, up from $5.0 million during fiscal year 2019.
-
- Revenue in China grew by
$4.3 million in 2020 to $7.9 million due to ramped up execution of larger
projects such as China Mobile, the initial roll out of bank branch
conversions, and the recognition of revenue from ongoing projects
with school districts.
- Revenue from the US-based biosafety business contributed
$1.7 million as the company launched
thermal imaging products that were delivered to casinos, a school,
hotels, medical centers, office buildings, and customers in
industries throughout the United
States.
- The increases in revenue from project acceleration in
China and our new health safety
business was offset by decreases in revenue of $0.6 million in the Remark Entertainment business
due to contracts that ended in 2019 that were not renewed, and a
decrease in e-commerce revenue of $0.3
million due to our decision to liquidate certain inventory
at lower cost.
- Gross Profit improved to $3.7
million in fiscal 2020 from $1.5
million in fiscal 2019 commensurate with increased revenue
and improved efficiency experienced by our China business. The overall gross profit
margin improved to 37% in 2020 from 30% in 2019.
- The company incurred an operating loss of $14.2 million in 2020, an improvement from the
operating loss of $22.8 million in
2019. Headcount reductions and lower rent expense contributed to
the improvement, offsetting slight increases in sales and
marketing, and technology and development costs.
- Net Loss from continuing operations totaled $13.7 million, or $0.16 per diluted share in the fiscal year ended
December 31, 2020, compared to a net
loss from continuing operations of $23.0
million, or $0.52 per diluted
share in the fiscal year ended December 31,
2019. The company recorded a $3.6
million gain on the termination of a lease which was
partially offset by a $1.6 million
non-cash loss from the change in the fair value of warrant
liability as a result of the increase in the share price of
Remark's common stock and the expiration of a substantial number of
warrants during the year.
- At December 31, 2020, the cash
and cash equivalents balance totaled $0.9
million, compared to a cash position of $0.3 million at December
31, 2019. Cash increased primarily due to $32.1 million in proceeds from common stock
issuances, whose increase was partially offset by use of the
proceeds to make debt principal repayments of $13.8 million, to make other liability payments,
and to generally operate the business.
"After doubling revenue in 2020, we are forecasting that we can
further accelerate growth in 2021 by continuing to execute projects
and bringing in new AI-driven opportunities. Our pipeline of
domestic business opportunities is growing dramatically, and we
plan to add additional channel partnerships in order to leverage
our award winning software. Finally, we plan to fortify our balance
sheet through a partial monetization of our stake in Sharecare in
our second quarter to fund the many opportunities we are currently
pursuing," concluded Mr. Tao.
Conference Call Information
Management will hold a conference call this afternoon at
4:30 p.m. Eastern Time (1:30 p.m. Pacific Time) to discuss the Company's
financial results and provide an update on recent business
developments. A question and answer session will follow
management's presentation.
The live conference may be accessed via telephone or online
webcast.
Date: Wednesday, March 31,
2021
Time: 4:30 p.m. Eastern time
(1:30 p.m. Pacific time)
Toll-Free Number: 800.289.0438
International Number: 323.794.2423
Conference ID: 9487880
Online Webcast:
http://public.viavid.com/index.php?id=144033.
Participants are advised to login for the live webcast 10
minutes prior to the scheduled start time.
A replay of the call will be available after 7:30 p.m. Eastern time on the same day through
April 5, 2021.
Toll-Free Replay Number: 844.512.2921
International Replay Number: 412.317.6671
Replay ID: 9487880
About Remark Holdings, Inc.
Remark Holdings, Inc. (NASDAQ: MARK) delivers an integrated
suite of AI solutions that enable businesses and organizations to
solve problems, reduce risk and deliver positive outcomes. The
company's easy-to-install AI products are being rolled out in a
wide range of applications within the retail, public safety and
workplace arenas. The company also owns and operates an e-commerce
digital media property focused on a luxury beach lifestyle. The
company is headquartered in Las Vegas,
Nevada, with additional operations in Los Angeles, California and in Beijing, Shanghai, Chengdu and Hangzhou, China. For more information, please
visit the company's website at http://www.remarkholdings.com/.
Forward-Looking Statements
This press release may contain forward-looking statements,
including information relating to future events, future financial
performance, strategies, expectations, competitive environment and
regulation. Words such as "may," "should," "could," "would,"
"predicts," "potential," "continue," "expects," "anticipates,"
"future," "intends," "plans," "believes," "estimates," and similar
expressions, as well as statements in future tense, identify
forward-looking statements. These statements involve known and
unknown risks, uncertainties and other factors, including those
discussed in Part I, Item 1A. Risk Factors in Remark Holdings'
Annual Report on Form 10-K and Remark Holdings' other filings with
the SEC. Any forward-looking statements reflect Remark Holdings'
current views with respect to future events, are based on
assumptions and are subject to risks and uncertainties. Given such
uncertainties, you should not place undue reliance on any
forward-looking statements, which represent Remark Holdings'
estimates and assumptions only as of the date hereof. Except as
required by law, Remark Holdings undertakes no obligation to update
or revise publicly any forward-looking statements after the date
hereof, whether as a result of new information, future events or
otherwise.
Company Contacts
E. Brian Harvey
Senior Vice President of Capital Markets and Investor Relations
Remark Holdings, Inc.
ebharvey@remarkholdings.com
702.701.9514
Fay Tian
Vice President of Investor Relations
F.Tian@remarkholdings.com
(+1) 626.623.2000
(+86) 13702108000
REMARK HOLDINGS,
INC. AND SUBSIDIARIES
|
Consolidated Balance
Sheets
|
(dollars in
thousands, except share and per share amounts)
|
|
|
December
31,
|
|
2020
|
|
2019
|
Assets
|
|
|
|
Cash and cash
equivalents (includes VIE of $278 and $49, respectively)
|
$
|
854
|
|
|
$
|
272
|
|
Trade accounts
receivable, net (includes VIE of $4,850 and $1,862,
respectively)
|
5,027
|
|
|
1,964
|
|
Inventory (includes
VIE of $112)
|
874
|
|
|
—
|
|
Prepaid expense and
other current assets (includes VIE of $248 and $4,159,
respectively)
|
2,043
|
|
|
4,623
|
|
Total current
assets
|
8,798
|
|
|
6,859
|
|
Property and
equipment, net (includes VIE of $43 and $222,
respectively)
|
321
|
|
|
341
|
|
Operating lease assets
(includes VIE of $281 and $189, respectively)
|
492
|
|
|
4,359
|
|
Investments in
unconsolidated affiliates
|
1,030
|
|
|
1,935
|
|
Intangibles, net
(includes VIE of $27, respectively)
|
—
|
|
|
509
|
|
Other long-term assets
(includes VIE of $68 and $29, respectively)
|
670
|
|
|
824
|
|
Total
assets
|
$
|
11,311
|
|
|
$
|
14,827
|
|
Liabilities
|
|
|
|
Accounts payable
(includes VIE of $3,655 and $2,187, respectively)
|
$
|
8,589
|
|
|
$
|
8,126
|
|
Accrued expense and
other current liabilities (includes VIE of $3,782 and $8,821,
respectively)
|
6,660
|
|
|
14,326
|
|
Contract liability
(includes VIE of $147 and $201, respectively)
|
310
|
|
|
313
|
|
Note
payable
|
1,500
|
|
|
3,000
|
|
Current maturities of
long-term debt, net of unamortized discount and debt issuance
cost
|
—
|
|
|
12,025
|
|
Total current
liabilities
|
17,059
|
|
|
37,790
|
|
Operating lease
liabilities, long-term (includes VIE of $79 and $75,
respectively)
|
194
|
|
|
4,650
|
|
Warrant
liability
|
1,725
|
|
|
115
|
|
Long - term debt,
net
|
1,425
|
|
|
—
|
|
Total
liabilities
|
20,403
|
|
|
42,555
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
Stockholders'
Deficit
|
|
|
|
Preferred stock,
$0.001 par value; 1,000,000 shares authorized; zero
issued
|
—
|
|
|
—
|
|
Common stock, $0.001
par value; 100,000,000 shares authorized: 99,505,041 and 51,055,159
shares issued and outstanding; each at December 31, 2020 and
2019, respectively
|
100
|
|
|
51
|
|
Additional
paid-in-capital
|
351,546
|
|
|
319,275
|
|
Accumulated other
comprehensive loss
|
(226)
|
|
|
(227)
|
|
Accumulated
deficit
|
(360,512)
|
|
|
(346,827)
|
|
Total stockholders'
deficit
|
(9,092)
|
|
|
(27,728)
|
|
Total liabilities and
stockholders' deficit
|
$
|
11,311
|
|
|
$
|
14,827
|
|
REMARK HOLDINGS,
INC. AND SUBSIDIARIES
|
Consolidated
Statements of Operations and Comprehensive Loss
|
(dollars in
thousands, except per share amounts)
|
|
|
Year Ended
December 31,
|
|
2020
|
|
2019
|
Revenue, net
|
$
|
10,145
|
|
|
$
|
5,020
|
|
Cost and
Expense
|
|
|
|
Cost of revenue
(excluding depreciation and amortization)
|
6,422
|
|
|
3,514
|
|
Sales and
marketing
|
3,378
|
|
|
3,003
|
|
Technology and
development
|
4,142
|
|
|
3,573
|
|
General and
administrative
|
9,368
|
|
|
14,174
|
|
Depreciation and
amortization
|
308
|
|
|
982
|
|
Impairments
|
772
|
|
|
2,522
|
|
Other operating
expense
|
—
|
|
|
6
|
|
Total
expense
|
24,390
|
|
|
27,774
|
|
Operating loss from
continuing operations
|
(14,245)
|
|
|
(22,754)
|
|
Other income
(expense)
|
|
|
|
Interest
expense
|
(1,342)
|
|
|
(1,876)
|
|
Other income,
net
|
—
|
|
|
530
|
|
Gain on lease
termination
|
3,582
|
|
|
—
|
|
Change in fair value
of warrant liability
|
(1,610)
|
|
|
1,268
|
|
Other loss
|
(70)
|
|
|
(172)
|
|
Total other income
(expense), net
|
560
|
|
|
(250)
|
|
Loss from continuing
operations
|
(13,685)
|
|
|
(23,004)
|
|
Loss from
discontinued operations, net of tax
|
—
|
|
|
(2,610)
|
|
Net loss
|
$
|
(13,685)
|
|
|
$
|
(25,614)
|
|
Other comprehensive
income (loss)
|
|
|
|
Foreign currency
translation adjustments
|
1
|
|
|
(259)
|
|
Comprehensive
loss
|
$
|
(13,684)
|
|
|
$
|
(25,873)
|
|
|
|
|
|
Weighted-average shares
outstanding, basic and diluted
|
85,578
|
|
|
44,432
|
|
|
|
|
|
Net loss per share,
basic and diluted
|
|
|
|
Continuing
operations
|
$
|
(0.16)
|
|
|
$
|
(0.52)
|
|
Discontinued
operations
|
—
|
|
|
(0.06)
|
|
Consolidated
|
$
|
(0.16)
|
|
|
$
|
(0.58)
|
|
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SOURCE Remark Holdings, Inc.