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ChinaNet Online Holdings Reports Third Quarter 2016 Financial Results
- Revenues of
$11.9 million in the third fiscal quarter of 2016, up 40.1% from prior year's quarter of$8.5 million - Gross profit of
$2.0 million generated in the third fiscal quarter of 2016, a 39.8% increase from$1.5 million generated in the same period a year ago - Operating results showed a 46.7% improvement with an operating loss of
$1.4 million for the third quarter of 2016, compared to the prior year's quarter loss of$2.6 million - Overall gross margin increased to 24% for the nine months ended
September 30, 2016 , compared to 19% for the same period last year - Nine months and three months' internet advertising and data service gross margin improved to 43% and 42%, respectively, compared to 31% in the same periods a year ago
Third Quarter 2016 Financial Results
Chairman and CEO of
"We also remain committed to our shareholders and investors, reflected in our commitment to remain listed on the
Revenues for the three months ended
During the third
quarter, revenues from internet advertisement and data services was
Gross profit for the three months ended
The Company incurred an operating loss of
Net loss attributable to
First Nine Months 2016 Financial Results
Revenues for the nine months ended
Gross profit was
Net loss attributable to
Balance Sheet and Cash Flow
The Company had
The Company had a
Business Updates
In August,
The reverse stock split reduced the number of shares of the Company's common stock outstanding from approximately 30.4 million shares of common stock pre-reverse split to approximately 12.2 million shares of common stock post-reverse split. The number of authorized shares of common stock and the par value per share remained unchanged. As a result of the reverse stock split, every 2.5 shares of the Company's pre-reverse split common stock was combined and reclassified into 1 share of common stock. The number of outstanding options was adjusted accordingly, with outstanding options being reduced from approximately 2.1 million to approximately 835,000.
Conference Call
Management will host a conference call with investors on
Date:
Time:
Conference Line (
International Dial-In: 1-719-325-2289
Webcast:
http://public.viavid.com/index.php?id=121881
A replay of the call will be available from
About
The Company, a parent company of
Safe Harbor
This release contains certain "forward-looking statements" relating to the business of
| CONSOLIDATED BALANCE SHEETS | ||||||||
| (In thousands, except for number of shares and per share data) | ||||||||
| 2016 | 2015 | |||||||
| (US $) | (US $) | |||||||
| (Unaudited) | ||||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 1,246 | $ | 5,503 | ||||
| Term deposit | 3,175 | 3,265 | ||||||
| Accounts receivable, net | 3,484 | 2,549 | ||||||
| Other receivables, net | 355 | 1,910 | ||||||
| Prepayment and deposit to suppliers | 6,844 | 5,843 | ||||||
| Due from related parties | 368 | 41 | ||||||
| Other current assets | 28 | 45 | ||||||
| Assets classified as held for sale | 1,764 | 1,882 | ||||||
| Total current assets | 17,264 | 21,038 | ||||||
| Long-term investments | 1,550 | 1,133 | ||||||
| Property and equipment, net | 511 | 681 | ||||||
| Intangible assets, net | 6,467 | 5,638 | ||||||
| Deposit and prepayment for purchasing of software technology | 996 | 1,024 | ||||||
| 4,275 | 4,396 | |||||||
| Deferred tax assets-non current | 1,365 | 1,550 | ||||||
| Total Assets | $ | 32,428 | $ | 35,460 | ||||
| Liabilities and Equity | ||||||||
| Current liabilities: | ||||||||
| Short-term bank loan | $ | 449 | $ | - | ||||
| Accounts payable | 115 | 95 | ||||||
| Advances from customers | 1,177 | 1,313 | ||||||
| Accrued payroll and other accruals | 537 | 685 | ||||||
| Guarantee payment and prepayment from new investors | 918 | 944 | ||||||
| Taxes payable | 3,068 | 3,186 | ||||||
| Other payables | 517 | 234 | ||||||
| Liabilities classified as held for sale | 710 | 913 | ||||||
| Total current liabilities | 7,491 | 7,370 | ||||||
| Long-term liabilities: | ||||||||
| Deferred tax liability-non current | 29 | 118 | ||||||
| Long-term borrowing from a director | 131 | 135 | ||||||
| Total Liabilities | 7,651 | 7,623 | ||||||
| Commitments and contingencies | - | 129 | ||||||
| Equity: | ||||||||
| Common stock ( | 12 | 12 | ||||||
| Additional paid-in capital | 28,246 | 26,528 | ||||||
| Statutory reserves | 2,607 | 2,607 | ||||||
| Retained deficit | (8,033 | ) | (3,870 | ) | ||||
| Accumulated other comprehensive income | 1,457 | 2,056 | ||||||
| Total | 24,289 | 27,333 | ||||||
| Noncontrolling interests | 488 | 375 | ||||||
| Total equity | 24,777 | 27,708 | ||||||
| Total Liabilities and Equity | $ | 32,428 | $ | 35,460 | ||||
| CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS | ||||||||||||||||
| (In thousands, except for number of shares and per share data) | ||||||||||||||||
| Nine Months Ended | Three
Months Ended | |||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| (US $) | (US $) | (US $) | (US $) | |||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||
| Revenues | ||||||||||||||||
| From unrelated parties | $ | 25,017 | $ | 23,114 | $ | 11,741 | $ | 8,279 | ||||||||
| From related parties | 381 | 687 | 161 | 219 | ||||||||||||
| Total revenues | 25,398 | 23,801 | 11,902 | 8,498 | ||||||||||||
| Cost of revenues | 19,269 | 19,234 | 9,874 | 7,047 | ||||||||||||
| Gross profit | 6,129 | 4,567 | 2,028 | 1,451 | ||||||||||||
| Operating expenses | ||||||||||||||||
| Sales and marketing expenses | 3,069 | 3,437 | 1,126 | 1,207 | ||||||||||||
| General and administrative expenses | 5,290 | 5,346 | 1,752 | 2,207 | ||||||||||||
| Research and development expenses | 1,530 | 1,658 | 514 | 595 | ||||||||||||
| Total operating expenses | 9,889 | 10,441 | 3,392 | 4,009 | ||||||||||||
| Loss from operations | (3,760 | ) | (5,874 | ) | (1,364 | ) | (2,558 | ) | ||||||||
| Other income (expenses) | ||||||||||||||||
| Interest income | 72 | 91 | 19 | 28 | ||||||||||||
| Interest expense | (4 | ) | (46 | ) | (4 | ) | (12 | ) | ||||||||
| Other (expenses)/income | (112 | ) | 26 | (99 | ) | (5 | ) | |||||||||
| Total other (expenses)/income | (44 | ) | 71 | (84 | ) | 11 | ||||||||||
| Loss before income tax expense, equity method investments, noncontrolling interests and discontinued operation | (3,804 | ) | (5,803 | ) | (1,448 | ) | (2,547 | ) | ||||||||
| Income tax (expense)/benefit | (155 | ) | 699 | (3 | ) | 391 | ||||||||||
| Loss before equity method investments, noncontrolling interests and discontinued operation | (3,959 | ) | (5,104 | ) | (1,451 | ) | (2,156 | ) | ||||||||
| Share of losses in equity investment affiliates | - | (2 | ) | - | (4 | ) | ||||||||||
| Loss from continuing operations | (3,959 | ) | (5,106 | ) | (1,451 | ) | (2,160 | ) | ||||||||
| Loss from and on disposal of discontinued operation, net of income tax | (60 | ) | (204 | ) | - | (95 | ) | |||||||||
| Net loss | (4,019 | ) | (5,310 | ) | (1,451 | ) | (2,255 | ) | ||||||||
| Net (income)/loss attributable to noncontrolling interests from continuing operations | (144 | ) | 232 | (21 | ) | 174 | ||||||||||
| Net loss attributable to | $ | (4,163 | ) | $ | (5,078 | ) | $ | (1,472 | ) | $ | (2,081 | ) | ||||
| Net loss | $ | (4,019 | ) | $ | (5,310 | ) | $ | (1,451 | ) | $ | (2,255 | ) | ||||
| Foreign currency translation loss | (630 | ) | (1,127 | ) | (152 | ) | (1,150 | ) | ||||||||
| Comprehensive loss | $ | (4,649 | ) | $ | (6,437 | ) | $ | (1,603 | ) | $ | (3,405 | ) | ||||
| Comprehensive (income)/loss attributable to noncontrolling interests | (113 | ) | 226 | (19 | ) | 168 | ||||||||||
| Comprehensive loss attributable to | $ | (4,762 | ) | $ | (6,211 | ) | $ | (1,622 | ) | $ | (3,237 | ) | ||||
| Loss per share | ||||||||||||||||
| Loss from continuing operations per common share | ||||||||||||||||
| Basic and diluted | $ | (0.36 | ) | $ | (0.46 | ) | $ | (0.13 | ) | $ | (0.18 | ) | ||||
| Loss from discontinued operations per common share | ||||||||||||||||
| Basic and diluted | $ | (0.01 | ) | $ | (0.02 | ) | $ | - | $ | (0.01 | ) | |||||
| Weighted average number of common shares outstanding: | ||||||||||||||||
| Basic and diluted | 11,353,657 | 10,675,308 | 11,358,971 | 10,765,637 | ||||||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
| (In thousands) | ||||||||
| Nine Months Ended | ||||||||
| 2016 | 2015 | |||||||
| (US $) | (US $) | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Cash flows from operating activities | ||||||||
| Net loss | $ | (4,019 | ) | $ | (5,310 | ) | ||
| Adjustments to reconcile net loss to net cash (used in)/provided by operating activities | ||||||||
| Depreciation and amortization | 1,170 | 1,321 | ||||||
| Share-based compensation expenses | 1,718 | 1,637 | ||||||
| Loss on disposal of fixed assets/other long-term assets | 117 | 63 | ||||||
| Provision for allowances for doubtful accounts | - | 106 | ||||||
| Share of losses in equity investment affiliates | - | 2 | ||||||
| Loss on deconsolidation of VIEs | 9 | - | ||||||
| Deferred taxes | 155 | (723 | ) | |||||
| Changes in operating assets and liabilities | ||||||||
| Accounts receivable | (1,196 | ) | (1,766 | ) | ||||
| Other receivables | 1,416 | 1,908 | ||||||
| Prepayment and deposit to suppliers | (1,172 | ) | 2,099 | |||||
| Due from related parties | (24 | ) | (33 | ) | ||||
| Other current assets | 16 | (32 | ) | |||||
| Accounts payable | (129 | ) | (53 | ) | ||||
| Advances from customers | (109 | ) | 1,439 | |||||
| Accrued payroll and other accruals | (146 | ) | 81 | |||||
| Other payables | 403 | 140 | ||||||
| Taxes payable | 66 | (25 | ) | |||||
| Commitment and contingencies | (128 | ) | 419 | |||||
| Net cash (used in)/provided by operating activities | (1,853 | ) | 1,273 | |||||
| Cash flows from investing activities | ||||||||
| Payment for office equipment and leasehold improvement | (150 | ) | (310 | ) | ||||
| Long-term investment in and advance to cost/equity method investees | (787 | ) | (185 | ) | ||||
| Payment for purchasing of software technology | (1,977 | ) | (3,878 | ) | ||||
| Proceeds from disposal of VIEs | 28 | - | ||||||
| Cash effect on deconsolidation of VIEs | (18 | ) | - | |||||
| Net cash used in investing activities | (2,904 | ) | (4,373 | ) | ||||
| Cash flows from financing activities | ||||||||
| Proceeds from short-term bank loan | 456 | - | ||||||
| Repayment of short-term bank loan | - | (810 | ) | |||||
| Repayment of short-term loan to noncontrolling interest of VIE | - | (81 | ) | |||||
| Guarantee payment and prepayment from new investors | - | 993 | ||||||
| Net cash provided by financing activities | 456 | 102 | ||||||
| Changes in cash and cash equivalents included in assets held for sale | 132 | - | ||||||
| Effect of exchange rate fluctuation on cash and cash equivalents | (88 | ) | (98 | ) | ||||
| Net decrease in cash and cash equivalents | (4,257 | ) | (3,096 | ) | ||||
| Cash and cash equivalents at beginning of the period | 5,503 | 5,037 | ||||||
| Cash and cash equivalents at end of the period | $ | 1,246 | $ | 1,941 | ||||
Contact:Source:MZ North America Ted Haberfield , President Direct: +1-760-755-2716 Email: thaberfield@mzgroup.us Web: www.mzgroup.us
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