Remark Holdings Reports First Quarter 2017 Results

LAS VEGAS, May 15, 2017 /PRNewswire/ — Remark Holdings, Inc. (NASDAQ: MARK), a global digital media technology company, reported its financial results for the first quarter of 2017.

Kai-Shing Tao, Remark Holdings’ Chairman and CEO, stated, “This year is off to strong start with year-over-year first quarter revenue growth of 7%, including revenue contribution from our KanKan Data Intelligence Platform for the first time.  More importantly, Remark Holdings is poised for significant revenue growth this year, as each of our assets is gaining traction. 


“Regarding KanKan, we anticipate revenue related to our Social Credit Score product to increase throughout the year, we expect to begin recording incremental sales from our data partnerships with Alibaba Cloud and TenCent, and we will be finalizing market development and testing of our new deep-learning-based service to filter out pornography and violent content.  Vegas.com continues to make strong contributions to our operating performance and demonstrates the value we have added since the 2015 acquisition.  Conversion rates increased year-over-year in the first quarter in all product categories and, already in 2017, Vegas.com achieved 14 of the top 20 show ticket sale days in its history, which is particularly significant as the second half of the year is typically seasonally stronger.  Also, FansTang, a leading provider of Western digital video content in the Chinese market, has a social media community of more than 145 million followers in China and positions us favorably with the Chinese Millennial audience.  Finally, given strong website traffic related to our US Tax Center at IRS.com, which increased by almost 40% year over year, we are exploring the sale of our non-core, tax-related business.

“We are excited by the significant opportunities our unique and diverse set of digital lifestyle brands provide us to drive innovation and scalability within the industries we serve.  We expect 2017 to be a transformative year for us as we realize monetization opportunities with KanKan and take advantage of the great opportunities provided by our asset base,” concluded Mr. Tao.

Financial Results for the Three Months Ended March 31st:  2017 Compared to 2016

The company’s financial results for the first quarter of 2017 include FansTang, which the company acquired in September 2016 and which was not part of the company’s financial results for the first quarter of 2016.

  • Net revenue was $15.3 million, compared to $14.3 million.
  • Total cost and expense was $20.7 million, compared to $19.4 million.
  • Operating loss was $5.4 million, compared to $5.2 million.
  • Net loss was $25,000, or $0.00 per diluted share, compared to $2.4 million, or $0.12 per diluted share.
  • At March 31, 2017, the cash and cash equivalents balance was $8.6 million, and total restricted cash was $11.7 million, bringing the total combined cash position to $20.3 million.  This compared to $6.9 million in cash and cash equivalents at December 31, 2016, demonstrating cash from operations contributed by Vegas.com.

Conference Call Information

Remark Holdings’ management team will hold a conference call today at 8:00 a.m. PDT/11:00 a.m. EDT to discuss its first quarter 2017 earnings results, review recent activity and answer questions.  To access the call in the U.S. please dial 1-888-503-8163 and for international calls dial 1-719-325-2106 approximately 10 minutes prior to the start of the conference.  The conference ID is 5006167.  The conference call will also be broadcast live over the Internet and available for replay for one year at www.remarkholdings.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, U.S. callers may dial 1-844-512-2921, and international callers may dial 1-412-317-6671.  Enter access code 5006167.

About Remark Holdings, Inc.

Remark Holdings, 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, Chengdu and Hangzhou, China. 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.

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

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

REMARK HOLDINGS, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(dollars in thousands, except per share amounts)

March 31, 2017

December 31, 2016

(Unaudited)

Assets

Cash and cash equivalents

$

8,603

$

6,893

Restricted cash

9,406

9,405

Trade accounts receivable

951

1,372

Prepaid expense and other current assets

3,913

3,323

Notes receivable, current

190

181

Total current assets

23,063

21,174

Restricted cash

2,250

2,250

Notes receivable

190

Property and equipment, net

15,020

15,531

Investment in unconsolidated affiliate

1,030

1,030

Intangibles, net

35,858

37,406

Goodwill

26,768

26,763

Other long-term assets

1,392

1,355

Total assets

$

105,381

$

105,699

Liabilities and Stockholders’ Equity

Accounts payable

$

10,934

$

16,546

Accrued expense and other current liabilities

14,130

13,965

Deferred merchant booking

13,592

6,991

Deferred revenue

7,109

4,072

Current maturities of long-term debt

100

100

Capital lease obligations

179

179

Total current liabilities

46,044

41,853

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

37,848

37,825

Warrant liability

18,461

25,030

Other liabilities

4,087

3,591

Total liabilities

106,440

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; 22,614,312 and 22,232,004 shares issued and outstanding; each at March 31, 2017 and December 31, 2016, respectively

23

22

Additional paid-in-capital

192,096

190,507

Accumulated other comprehensive loss

(40)

(16)

Accumulated deficit

(193,138)

(193,113)

Total stockholders’ equity (deficit)

(1,059)

(2,600)

Total liabilities and stockholders’ equity

$

105,381

$

105,699

REMARK HOLDINGS, INC. AND SUBSIDIARIES

Consolidated Statements of Operations

(dollars in thousands, except per share amounts)

Three Months Ended March 31,

2017

2016

Revenue, net

15,299

14,254

Cost and expense

Cost of revenue (excluding depreciation and amortization)

2,664

2,349

Sales and marketing

5,875

5,528

Technology and development

908

404

General and administrative

8,326

8,420

Depreciation and amortization

2,861

2,397

Other operating expense

45

332

Total cost and expense

20,679

19,430

Operating loss

(5,380)

(5,176)

Other income (expense)

Interest expense

(1,018)

(1,210)

Other income, net

19

29

Change in fair value of warrant liability

6,569

3,985

Other loss

(31)

(3)

Total other income, net

5,539

2,801

Income (loss) before income taxes

159

(2,375)

Provision for income taxes

(184)

Net loss

(25)

(2,375)

Weighted-average shares outstanding, basic and diluted

22,468

19,736

Net loss per share, basic and diluted

(0.12)

 

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SOURCE Remark Holdings, Inc.