Remark Holdings

Newsroom

Remark Media Reports Third Quarter 2016 Results

November 14, 2016 at 12:00 AM EST

Increased quarterly net revenue to $15.1 million, up $14.3 million over Q3 2015, reflecting Vegas.com acquisition and improvements implemented since

 

LAS VEGAS, Nov. 14, 2016 /PRNewswire/ -- Remark Media (NASDAQ: MARK), a global digital media technology company, reported its financial results for the third quarter of 2016.

Kai-Shing Tao, Remark Media's Chairman and CEO, stated: "During the third quarter of 2016, we drove meaningful year-over-year growth in net revenue, which reflects the addition of Vegas.com to our digital media portfolio as well as the enhancements we have made to the asset over the last year. Further enhancing our portfolio, in September of this year we acquired FansTang, which adds significant synergies to our entire asset base as well as an additional revenue stream.  

We have also continued our focus on growing and developing KanKan into a unique and powerful source of consumer data with near-term monetization opportunities. In fact, we are preparing to launch our first KanKan business-to-business product with a financial services customer in the fourth quarter of this year, with first revenues expected in early 2017. While this is a significant milestone for us, we are pursuing many additional opportunities to leverage this unique and powerful data intelligence platform with customers in multiple industries including finance, travel, retail and entertainment. As we look ahead, we are more excited than ever about our ability to expand our leadership position in global consumer data intelligence and monetize our offerings in that arena."

Financial Results for the Three Months Ended September 30th:  2016 Compared to 2015

The financial results for the third quarter of 2016 reflect the operating results of Vegas.com, which was acquired in September 2015.

  • Net revenue was $15.1 million, compared to $0.8 million.
  • Total cost and expense was $19.3 million, compared to $10.1 million.
  • Operating loss was $4.2 million, compared to $9.3 million.
  • Net loss was $15.3 million, or $0.75 per diluted share, and included a loss on extinguishment of debt of $9.2 million. This compares to $11.1 million, or $0.75 per diluted share.
  • At September 30, 2016, the cash and cash equivalents balance was $5.3 million, and total restricted cash was $11.7 million, bringing the total combined cash position to $17.0 million.

Financial Results for the Nine Months Ended September 30th:  2016 Compared to 2015

The financial results for the 2016 nine-month period reflect the operating results of Vegas.com, which was acquired in September 2015.

  • Net revenue was $44.4 million, compared to $2.4 million.
  • Total cost and expense was $57.2 million, compared to $17.8 million.
  • Operating loss was $12.9 million, compared to $15.4 million.
  • Net loss was $23.1 million, or $1.15 per diluted share, and included the aforementioned $9.2 million loss on extinguishment of debt. This compares to $17.4 million, or $1.25 per diluted share.

Conference Call Information

Remark Media's management team will hold a conference call today at 4:30 p.m. ET / 1:30 p.m. PT to discuss its third quarter 2016 earnings results, review recent activity and answer questions. To access the call in the U.S. please dial 1-888-329-7568 and for international calls dial 1-719-325-2228 approximately 10 minutes prior to the start of the conference. The conference ID is 4087761. The conference call will also be broadcast live over the Internet and available for replay for one year at www.remarkmedia.com. In addition, a replay of the call will be available via telephone for two business days, beginning two hours after the call. To listen to the replay, in the U.S., please dial 1-877-870-5176 and internationally, 1-858-384-5517. Enter access code 4087761.

About Remark Media, Inc.

Remark Media, Inc. (NASDAQ: MARK) owns, operates and acquires innovative digital media properties across multiple verticals that deliver culturally relevant, dynamic content that attracts and engages users on a global scale.  The company leverages its unique digital media assets to target the Millennial demographic, which provides it with access to fast-growing, lucrative markets.  The company is headquartered in Las Vegas, Nevada, with additional operations in Los Angeles, California and in Beijing, Shanghai, Hangzhou and Chengdu, China. For more information, please visit the company's website at www.remarkmedia.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 Media's Annual Report on Form 10-K and Remark Media's other filings with the SEC. Any forward-looking statements reflect Remark Media's 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 Media's estimates and assumptions only as of the date hereof.  Except as required by law, Remark Media 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.

Investor Contact:
Douglas Osrow
Remark Media, Inc.
dosrow@remarkmedia.com
702-701-9514 ext. 3025

Investor Relations Contact:
Becky Herrick/ Kirsten Chapman
LHA Investor Relations
remarkmedia@lhai.com
415-433-3777

[Tables to follow]

 

REMARK MEDIA, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

September 30, 2016

 
 

September 30,

 

December 31,

 

2016

 

2015

Assets

     

Cash and cash equivalents

$5,307

 

$5,422

Restricted cash

9,406

 

9,416

Trade accounts receivable

1,167

 

746

Prepaid expense and other current assets

3,218

 

2,637

Notes receivable, current

181

 

172

Total current assets

19,279

 

18,393

Restricted cash

2,250

 

2,250

Notes receivable

190

 

371

Property and equipment, net

16,305

 

17,338

Investment in unconsolidated affiliate

1,030

 

1,030

Intangibles, net

40,170

 

34,867

Goodwill

26,607

 

20,337

Other long-term assets

1,323

 

--

Total assets

$107,154

 

$94,586

       

Liabilities and Stockholders' Equity

     

Accounts payable

$12,602

 

$14,422

Accrued expense and other current liabilities

16,186

 

11,827

Deferred merchant booking

9,178

 

6,997

Deferred revenue

4,725

 

3,262

Current maturities of long-term debt

100

 

100

Capital lease obligations

180

 

205

Total current liabilities

42,971

 

36,813

       

Long-term debt, less current portion and net of unamortized discount and debt issuance cost

37,839

 

23,616

Warrant liability

28,129

 

19,195

Other liabilities

1,845

 

2,904

Total liabilities

110,284

 

82,528

       

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 and 50,000,000 shares authorized; 20,711,078 and 19,659,362 shares issued and outstanding; each at September 30, 2016 and December 31, 2015, respectively

21

 

20

Additional paid-in-capital

180,856

 

173,477

Accumulated other comprehensive loss

(6)

 

(5)

Accumulated deficit

(184,501)

 

(161,434)

Total stockholders' equity (deficit)

(3,630)

 

12,058

Total liabilities and stockholders' equity

$107,154

 

$94,586

       

 

REMARK MEDIA, INC. AND SUBSIDIARIES

Consolidated Statements of Operations

Period Ended September 30, 2016

 
   

 Three Months Ended September 30,

 

 Nine Months Ended September 30,

   

2016

 

2015

 

2016

 

2015

Revenue, net

 

15,142

 

816

 

44,371

 

2,440

                 

Cost and expense

               

Cost of revenue (excluding depreciation and amortization)

 

2,864

 

136

 

7,837

 

256

Sales and marketing

 

4,887

 

469

 

15,349

 

845

Technology and development

 

1,066

 

61

 

1,904

 

233

General and administrative

 

7,921

 

8,859

 

24,251

 

15,364

Depreciation and amortization

 

2,525

 

459

 

7,401

 

909

Other operating expense

 

77

 

142

 

506

 

189

Total cost and expense

 

19,340

 

10,126

 

57,248

 

17,796

                 

Operating loss

 

(4,198)

 

(9,310)

 

(12,877)

 

(15,356)

Other income (expense)

               

Debt conversion expense

 

--

 

(1,469)

 

--

 

(1,469)

Interest expense

 

(1,224)

 

(303)

 

(3,649)

 

(708)

Other income (loss), net

 

(1)

 

(80)

 

29

 

(79)

Change in fair value of warrant liability

 

(647)

 

20

 

2,691

 

241

Loss on extinguishment of debt

 

(9,157)

 

--

 

(9,157)

 

--

Other gain (loss)

 

(33)

 

6

 

(104)

 

6

Total other income (expense), net

 

(11,062)

 

(1,826)

 

(10,190)

 

(2,009)

Loss before income taxes

 

(15,260)

 

(11,136)

 

(23,067)

 

(17,365)

Provision for income taxes

 

--

 

--

 

--

 

--

Net loss

 

(15,260)

 

(11,136)

 

(23,067)

 

(17,365)

Foreign currency translation adjustments

 

--

 

25

 

--

 

--

Comprehensive loss

 

(15,260)

 

(11,111)

 

(23,067)

 

(17,365)

                 

Net loss per share

               

Weighted-average shares outstanding, basic and diluted

 

20,359

 

14,830

 

20,104

 

13,884

Net loss per share, basic and diluted

 

(0.75)

 

(0.75)

 

(1.15)

 

(1.25)