SHANGHAI, July 8, 2016 /PRNewswire/ -- Acorn International,
Inc. (NYSE: ATV) ("Acorn" or the "Company"), today announced its
unaudited financial results for the first quarter ended
March 31, 2016.
In the first quarter of 2016, Acorn effectively concluded its
efforts to reorganize and turn around the business, reducing the
cash burn from prior years substantially. Although revenue
declined relative to the year ago period, higher gross margin,
across the board reductions in operating expenses and gains from
the sale of non-core assets resulted in a net profit of
$7.4 million and a corresponding
increase in cash and equivalents from the end of 2015. During
the quarter, the Company recorded a $6.0
million pretax gain from the sale of non-core real estate
and a $5.6 million pretax gain on the
sale of shares of Yimeng Software Technology Co., Ltd. ("Yimeng"),
a publicly-traded company in China.
In the remainder of 2016, Acorn will continue its efforts to
stabilize its core business, reduce 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 real estate
assets with a carrying amount of approximately $18.1 million and may sell additional shares of
Yimeng, as appropriate.
Financial Results for the First Quarter of 2016:
Total net revenues were $7.1
million in the first quarter of 2016, down from $16.3 million in the first quarter of
2015.
Cost of sales in the first quarter of 2016 was $3.9 million, down from $10.7 million in the first quarter of 2015.
Gross profit in the first quarter of 2016 was $3.1 million, as compared to $5.6 million in the first quarter of 2015. Gross
margin was 44% in the first quarter of 2016, up from 34% in the
first quarter of 2015.
Other operating income, net was $6.4
million in the first quarter of 2016, primarily related to
gains from the sale of non-core real estate assets. This
compares to other operating income, net of $0.6 million in the first quarter of 2015.
Total operating income in the first quarter of 2016 was of
$0.3 million, compared to total
operating expenses of $15.7 million
in the first quarter of 2015.
Income from operations was $3.5
million in the first quarter of 2016, as compared to a loss
from operations of $10.1 million in
the first quarter of 2015.
Share-based compensation was nil in the first quarter of 2016,
as compared to $71,333 in the first
quarter of 2015.
Other income was $5.7 million in
the first quarter of 2016, primarily attributable to gains from
sales of Yimeng shares, as compared to other income of $0.3 million in the first quarter of
2015.
Net income was $7.4 million in the
first quarter of 2016 as compared to a net loss of $9.8 million in the first quarter of 2015.
As of March 31, 2016, Acorn's cash
and cash equivalents, with restricted cash, totaled $19.6 million, as compared to $12.3 million as of December 31, 2015.
Conference Call
The Company will host a conference call at 8:30 a.m.
ET (5:30 a.m. PT), July 8,
2016 to discuss financial results. The dial-in number to
participate on this call is (888) 417-8465, passcode 5044778.
International callers should dial (719) 325-2464, passcode 5044778.
A replay will be available approximately two hours following the
conclusion of the conference call through July 15,
2016 and can be accessed by dialing (888) 203-1112 or
(719) 457-0820, passcode 5044778.
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
stabilize its core business, to reduce expenses and to 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 first 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.
- Financial tables follow -
ACORN
INTERNATIONAL, INC.
|
UNAUDITED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(In US dollars,
except share data)
|
|
|
|
|
|
3 Months Ended
March 31
|
|
2015
|
|
2016
|
|
|
|
|
Net
revenues
|
16,297,200
|
|
7,058,240
|
Cost of
revenues
|
(10,704,402)
|
|
(3,924,412)
|
Gross
profit
|
5,592,798
|
|
3,133,828
|
Operating
(expenses) income
|
|
|
|
Advertising
expenses
|
(2,047,658)
|
|
(23,701)
|
Other selling
and marketing expenses
|
(6,634,566)
|
|
(2,687,256)
|
General and
administrative expenses
|
(7,538,030)
|
|
(3,324,574)
|
Other operating
income, net
|
553,019
|
|
6,374,264
|
Total operating
(expenses) income
|
(15,667,235)
|
|
338,733
|
Income
(loss) from operations
|
(10,074,437)
|
|
3,472,561
|
Other
income,
net
|
271,965
|
|
5,687,796
|
Income
(loss) before income taxes, and equity in losses of
affiliates
|
(9,802,472)
|
|
9,160,357
|
Income tax
expenses
|
(6,363)
|
|
(1,770,013)
|
Equity in
losses of affiliates
|
-
|
|
-
|
Net income
(loss)
|
(9,808,835)
|
|
7,390,344
|
Net (loss)
attributable to noncontrolling interests
|
(19,272)
|
|
(10,463)
|
Net
income (loss)
attributable to Acorn International, Inc.
|
(9,789,563)
|
|
7,400,807
|
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
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/acorn-international-reports-financial-results-for-the-first-quarter-of-2016-300295758.html
SOURCE Acorn International, Inc.