Remark Holdings Reports Fourth Quarter and Full Year 2017 Results
Management Commentary
"We are pleased to announce our increased guidance today as our businesses continue to outperform our initial expectations," said
"Here in
Three-Month and Twelve-Month 2017 Financial Results
Net revenue for the quarter was $18.6 million, a 24% increase year-over-year. Net revenue for 2017 was $70.6 million, a 19% increase year-over-year. The company's quarterly and full year financial results include Fanstang, which the company acquired in September 2016 and which was only a nominal part of the company's financial results for the same periods of 2016.
Three Months Ended December 31st: 2017 Compared to 2016
- Net revenue was
$18.6 million , compared to$15.0 million . - Total cost and expense was
$40.0 million , compared to$24.7 million . - Operating loss was
$21.4 million , compared to$9.7 million . - Net loss was
$89.2 million , or$3.47 per diluted share, compared to$8.6 million , or$0.40 per diluted share. Net loss for the fourth quarter of 2017 included a$66.5 million non-cash charge related to a change in the fair value of the company's warrant liability, which occurred as a result of the significant increase in the company's stock price during the period. For the fourth quarter of 2016, the company recorded a$3.1 million gain related to the change in the fair value of the company's warrant liability during the period. - At
December 31, 2017 , the cash and cash equivalents balance was$22.6 million , and total restricted cash was$11.7 million , bringing the total combined cash position to$34.3 million , compared to a total combined cash position of$18.5 million atDecember 31, 2016 .
Twelve Months Ended December 31st: 2017 Compared to 2016
- Net revenue was
$70.6 million , compared to$59.3 million . - Total cost and expense was
$108.0 million , compared to$81.9 million . - Operating loss was
$37.4 million , compared to$22.6 million . Operating loss for 2017 included a$14.6 million non-cash charge related to the impairment of goodwill and other intangible assets purchased fromChina Branding Group Limited (including Fanstang) inSeptember 2016 . - Net loss was
$106.7 million , or$4.49 per diluted share, compared to$31.7 million , or$1.54 per diluted share. Net loss for 2017 included a$64.1 million non-cash charge related to the change in the fair value of the company's warrant liability, compared to a$5.8 million gain recorded for 2016.
2018 Financial Outlook
The company increased its limited guidance regarding certain revenue and EBITDA expectations.
For 2018, company management expects to generate consolidated net revenue in excess of $120 million. KanKan's Artificial Intelligence Platform will be the primary driver of the growth as its revenue rapidly increases. For the year ending December 31, 2018, management expects KanKan to generate more than $50 million in net revenue.
Conference Call Information
Mr.
Toll-Free Number: 888-882-4478
International Number: 323-701-0225
Conference ID: 5682880
Please call the conference telephone number 10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact the
The conference call will be broadcast simultaneously and available for replay via the investor section of the company's website here.
A replay of the call will be available after
Toll-Free Replay Number: 844-512-2921
International Replay Number: 412-317-6671
Replay ID: 5682880
About
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
Company Contact:
dosrow@remarkholdings.com
702-701-9514 ext. 3025
Investor Relations Contact:
Liolios Group, Inc.
MARK@liolios.com
949-574-3860
[Tables to follow]
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REMARK HOLDINGS, INC. AND SUBSIDIARIES
Consolidated Balance Sheets (dollars in thousands, except per share amounts)
|
||||||
|
December 31, |
||||||
|
2017 |
2016 |
|||||
|
Assets |
||||||
|
Cash and cash equivalents |
$ |
22,632 |
$ |
6,893 |
||
|
Restricted cash |
11,670 |
9,405 |
||||
|
Trade accounts receivable |
3,673 |
1,372 |
||||
|
Prepaid expense and other current assets |
5,518 |
3,323 |
||||
|
Notes receivable, current |
290 |
181 |
||||
|
Assets held for sale |
— |
— |
||||
|
Total current assets |
43,783 |
21,174 |
||||
|
Restricted cash |
— |
2,250 |
||||
|
Notes receivable |
100 |
190 |
||||
|
Property and equipment, net |
13,387 |
15,531 |
||||
|
Investment in unconsolidated affiliate |
1,030 |
1,030 |
||||
|
Intangibles, net |
23,946 |
37,406 |
||||
|
Goodwill |
20,099 |
26,763 |
||||
|
Other long-term assets |
1,192 |
1,355 |
||||
|
Total assets |
$ |
103,537 |
$ |
105,699 |
||
|
Liabilities and Stockholders' Equity |
||||||
|
Accounts payable |
$ |
17,857 |
$ |
16,546 |
||
|
Accrued expense and other current liabilities |
16,679 |
13,965 |
||||
|
Deferred merchant booking |
9,027 |
6,991 |
||||
|
Deferred revenue |
5,807 |
4,072 |
||||
|
Note payable |
3,000 |
— |
||||
|
Current maturities of long-term debt, net of debt issuance cost |
38,085 |
100 |
||||
|
Capital lease obligations |
— |
179 |
||||
|
Total current liabilities |
90,455 |
41,853 |
||||
|
Long-term debt, less current portion and net of debt issuance cost |
— |
37,825 |
||||
|
Warrant liability |
89,169 |
25,030 |
||||
|
Other liabilities |
3,501 |
3,591 |
||||
|
Total liabilities |
183,125 |
108,299 |
||||
|
Commitments and contingencies |
||||||
|
Stockholders' equity |
||||||
|
Preferred stock, $0.001 par value; 1,000,000 shares authorized; none issued |
— |
— |
||||
|
Common stock, $0.001 par value; 100,000,000 shares authorized; 28,406,026 |
28 |
22 |
||||
|
Additional paid-in-capital |
220,117 |
190,507 |
||||
|
Accumulated other comprehensive income (loss) |
115 |
(16) |
||||
|
Accumulated deficit |
(299,848) |
(193,113) |
||||
|
Total stockholders' equity (deficit) |
(79,588) |
(2,600) |
||||
|
Total liabilities and stockholders' equity |
$ |
103,537 |
$ |
105,699 |
||
|
REMARK HOLDINGS, INC. AND SUBSIDIARIES Consolidated Statements of Operations (dollars in thousands, except per share amounts) |
|||||
|
Year Ended December 31, |
|||||
|
2017 |
2016 |
||||
|
Revenue, net |
70,601 |
59,328 |
|||
|
Cost and expense |
|||||
|
Cost of revenue (excluding depreciation and amortization) |
16,909 |
11,155 |
|||
|
Sales and marketing |
23,600 |
19,541 |
|||
|
Technology and development |
3,551 |
2,796 |
|||
|
General and administrative |
37,689 |
36,460 |
|||
|
Depreciation and amortization |
11,070 |
10,299 |
|||
|
Impairments |
14,646 |
1,159 |
|||
|
Other operating expense |
515 |
515 |
|||
|
Total cost and expense |
107,980 |
81,925 |
|||
|
Operating loss |
(37,379) |
(22,597) |
|||
|
Other income (expense) |
|||||
|
Interest expense |
(4,645) |
(4,685) |
|||
|
Other income, net |
23 |
29 |
|||
|
Loss on extinguishment of debt |
— |
(9,157) |
|||
|
Change in fair value of warrant liability |
(64,139) |
5,790 |
|||
|
Other loss |
(317) |
(313) |
|||
|
Total other income, net |
(69,078) |
(8,336) |
|||
|
Income (loss) before income taxes |
(106,457) |
(30,933) |
|||
|
Provision for income taxes |
(278) |
(746) |
|||
|
Net loss |
(106,735) |
(31,679) |
|||
|
Other comprehensive income (loss) |
|||||
|
Foreign currency translation adjustments |
131 |
— |
|||
|
Comprehensive loss |
(106,604) |
(31,679) |
|||
|
Weighted-average shares outstanding, basic and diluted |
23,763 |
20,529 |
|||
|
Net loss per share, basic and diluted |
(4.49) |
(1.54) |
|||
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