Remark Holdings Reports Fourth Quarter and Full Year 2017 Results
Remark Holdings Reports Fourth Quarter and Full Year 2017 Results
LAS VEGAS, March 29, 2018 /PRNewswire/ -- Remark Holdings, Inc. (NASDAQ: MARK), a diversified global technology company with leading artificial intelligence (AI) solutions and digital media properties, including Vegas.com, reported its financial results for the fourth quarter and full year ended December 31, 2017.
Management Commentary
"We are pleased to announce our increased guidance today as our businesses continue to outperform our initial expectations," said Kai-Shing Tao, the company's Chairman and Chief Executive Officer. "In 2017, our FinTech business generated our first significant revenue amounts from our KanKan operations, and we have quickly been able to monetize KanKan's other AI technologies as evidenced by our recent successes in securing significant contracts."
"Here in Las Vegas, our Vegas.com operations continue to do well, primarily driven by increases in show ticket sales, and we look forward to what 2018 will bring with new product enhancements to our offerings," concluded Mr. Tao.
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 at December 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 from China
Branding Group Limited (including Fanstang) in September 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.
Remark Holdings management also indicated it expects its travel & entertainment segment to generate gross revenue of more than $375 million and net revenue between approximately $70 million to $80 million, with an EBITDA margin approximating 12% to 15% of net revenue, during 2018.
Conference Call Information
Mr. Tao and Remark Holdings' CFO Douglas Osrow will hold a conference call today (March 29, 2018) at 8:30 a.m. Eastern Time (5:30 a.m. Pacific Time) to discuss these financial results. A question and answer session will follow management's presentation.
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 Liolios Group at 949-574-3860.
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 11:30 a.m. Eastern time on the same day through April 2, 2018.
Toll-Free Replay Number: 844-512-2921
International Replay Number: 412-317-6671
Replay ID: 5682880
About Remark Holdings, Inc.
Remark Holdings, Inc. (NASDAQ: MARK) primarily focuses on the development and deployment of artificial-intelligence-based solutions for businesses in many industries. Additionally, the company owns and operates digital media properties that deliver relevant, dynamic content. The company's U.S. operations are headquartered in Las Vegas, Nevada, with additional operations in Los Angeles, California, and its China operations are headquartered in Chengdu, China with additional operations in Beijing, Shanghai, and Hangzhou. For more information, please visit the company's website at 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 Contact:
Douglas Osrow
Remark Holdings, Inc.
dosrow@remarkholdings.com
702-701-9514 ext. 3025
Investor Relations Contact:
Matt Glover or Tom Colton
Liolios Group, Inc.
MARK@liolios.com
949-574-3860
[Tables to follow]
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
and 22,232,004 shares issued
and outstanding; each at
December 31, 2017
and 2016, respectively
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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SOURCE Remark Holdings, Inc.
