LAS VEGAS, Aug. 14, 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 second quarter ended June 30, 2018.
Management Commentary
"We continue to make solid progress in signing new AI agreements, and in working with our clients to begin deploying our AI technology across multiple sectors in China and Southeast Asia, while driving revenue growth at our largest digital media property, Vegas.com," said Kai-Shing Tao, Chairman and Chief Executive Officer of Remark Holdings. "Given the size and breadth of the AI contracts we've secured and our deployment efforts underway, we remain well positioned to accelerate our revenue growth in the months ahead. Our unique market position is supported by our ability to leverage our advanced AI technologies to deliver accessible and practical solutions across the financial, workplace and public safety sectors. Defined by rapid deployment, low maintenance costs and highly-accurate and actionable results, our platform applies the power of AI to deliver simple solutions to complex problems."
KanKan Artificial Intelligence Platform Recent Operational Highlights
Travel & Entertainment Segment Three-Month Operational Highlights
Three Months Ended June 30: 2018 compared to 2017
2018 Financial Outlook
The Company provided guidance regarding certain revenue and Adjusted EBITDA expectations. For the year ending December 31, 2018, management is fine tuning its outlook to reflect the impact of the lending industry regulatory audit on its revenue for its FinTech business. The Company now expects consolidated revenue of approximately $100 million in 2018.
Overall, the Company is pleased with the progress it's making in deploying its KanKan Artificial Intelligence Platform. After taking into account the impact of the lending industry regulatory audit, management now expects KanKan to generate approximately $25-to-$30 million in gross revenue in 2018. The Company's forecast is directly supported by the agreements it has signed in the retail and workplace & public safety sectors and the actual deployment steps it's currently taking in conjunction with its clients.
The Company is monitoring the China lending industry to determine any potential impact on its 2018 revenue forecast. The Company is working directly with its large banking clients to adjust and scale its proven AI solution, as well as launch a third product covering loans for parking spots. As the Company's AI contracts move to the deployment stage, the Company will begin to record revenue from both upfront fees and ongoing licensing fees, with each contract having differing fee arrangements based on the product deployed.
Remark's Board of Directors continues to look for a new Chief Financial Officer (CFO). While the search for a permanent candidate continues, Alison Davidson, Vice President of Finance, has been appointed to serve as Interim CFO.
Conference Call Information
Mr. Tao will hold a conference call today August 14, 2018 at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time) to discuss these financial results. A question and answer session will follow management's presentation.
Toll-Free Number: 888-599-8686
International Number: 323-994-2093
Conference ID: 2295678
Please call the conference telephone number 10 minutes prior to the start time. An operator will register your name and organization.
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 7:30 p.m. Eastern time on the same day through August 18, 2018.
Toll-Free Replay Number: 844-512-2921
International Replay Number: 412-317-6671
Replay ID: 2295678
About Remark Holdings, Inc.
Remark Holdings, Inc. (NASDAQ: MARK) delivers an integrated suite of AI solutions that enable businesses and organizations to solve problems, reduce risk and deliver positive outcomes. The company's easy-to-install AI products are being rolled out in a wide range of applications within the retail, financial, public safety and workplace arenas. The company also owns and operates digital media properties that deliver relevant, dynamic content and ecommerce solutions. 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.
Company Contact:
Alison Davidson
Remark Holdings, Inc.
[email protected]
702-701-9514
Investor Relations Contact:
Colton Krueger
The Plunkett Group, Inc.
[email protected]
210-602-4078
[Tables to follow]
REMARK HOLDINGS, INC. AND SUBSIDIARIES | |||||||
June 30, 2018 |
December 31, 2017 | ||||||
(unaudited) |
|||||||
Assets |
|||||||
Cash and cash equivalents |
$ |
7,008 |
$ |
22,632 |
|||
Restricted cash |
9,406 |
11,670 |
|||||
Trade accounts receivable, net |
6,559 |
3,673 |
|||||
Prepaid expense and other current assets |
7,330 |
5,518 |
|||||
Notes receivable, current |
100 |
290 |
|||||
Total current assets |
30,403 |
43,783 |
|||||
Restricted cash |
2,250 |
? |
|||||
Notes receivable |
? |
100 |
|||||
Property and equipment, net |
12,740 |
13,387 |
|||||
Investment in unconsolidated affiliates |
2,030 |
1,030 |
|||||
Intangibles, net |
21,237 |
23,946 |
|||||
Goodwill |
20,099 |
20,099 |
|||||
Other long-term assets |
1,195 |
1,192 |
|||||
Total assets |
$ |
89,954 |
$ |
103,537 |
|||
Liabilities and Stockholders' Equity |
|||||||
Accounts payable |
$ |
23,433 |
$ |
17,857 |
|||
Accrued expense and other current liabilities |
14,688 |
18,795 |
|||||
Deferred merchant booking |
8,989 |
9,027 |
|||||
Contract liability |
4,623 |
3,691 |
|||||
Note payable |
3,000 |
3,000 |
|||||
Current maturities of long-term debt, net of unamortized discount and |
11,500 |
38,085 |
|||||
Total current liabilities |
66,233 |
90,455 |
|||||
Long-term debt, less current portion and net of unamortized discount and debt |
26,578 |
? |
|||||
Warrant liability |
10,597 |
89,169 |
|||||
Other liabilities |
3,548 |
3,501 |
|||||
Total liabilities |
106,956 |
183,125 |
|||||
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; 33,145,199 |
33 |
28 |
|||||
Additional paid-in-capital |
293,164 |
220,117 |
|||||
Accumulated other comprehensive income |
130 |
115 |
|||||
Accumulated deficit |
(310,329) |
(299,848) |
|||||
Total stockholders' equity (deficit) |
(17,002) |
(79,588) |
|||||
Total liabilities and stockholders' equity |
$ |
89,954 |
$ |
103,537 |
REMARK HOLDINGS, INC. AND SUBSIDIARIES | |||||||||||
Three Months Ended June 30, |
Six Months Ended June 30, |
||||||||||
2018 |
2017 |
2018 |
2017 |
||||||||
Revenue |
20,713 |
17,256 |
37,437 |
32,555 |
|||||||
Cost and expense |
|||||||||||
Cost of revenue (excluding depreciation and |
6,132 |
3,965 |
10,164 |
6,629 |
|||||||
Sales and marketing |
6,776 |
5,774 |
13,671 |
11,649 |
|||||||
Technology and development |
843 |
884 |
1,745 |
1,792 |
|||||||
General and administrative |
11,180 |
8,359 |
34,497 |
16,685 |
|||||||
Depreciation and amortization |
2,746 |
2,894 |
5,464 |
5,755 |
|||||||
Other operating expense |
81 |
57 |
147 |
102 |
|||||||
Total cost and expense |
27,758 |
21,933 |
65,688 |
42,612 |
|||||||
Operating loss |
(7,045) |
(4,677) |
(28,251) |
(10,057) |
|||||||
Other income (expense) |
|||||||||||
Interest expense |
(1,255) |
(1,181) |
(2,661) |
(2,199) |
|||||||
Other income, net |
44 |
1 |
55 |
20 |
|||||||
Change in fair value of warrant liability |
10,055 |
1,760 |
18,665 |
8,329 |
|||||||
Other gain (loss) |
554 |
(21) |
523 |
(52) |
|||||||
Total other income, net |
9,398 |
559 |
16,582 |
6,098 |
|||||||
Income (loss) before income taxes |
2,353 |
(4,118) |
(11,669) |
(3,959) |
|||||||
Benefit from (provision for) income taxes |
1,026 |
(190) |
995 |
(374) |
|||||||
Net income (loss) |
3,379 |
(4,308) |
(10,674) |
(4,333) |
|||||||
Other comprehensive income (loss) |
|||||||||||
Foreign currency translation adjustments |
(183) |
(4) |
15 |
(28) |
|||||||
Comprehensive income (loss) |
3,196 |
(4,312) |
(10,659) |
(4,361) |
|||||||
Weighted-average shares outstanding, basic and |
32,933 |
22,637 |
32,666 |
22,553 |
|||||||
Net loss per share, basic and diluted |
0.10 |
(0.19) |
(0.33) |
(0.19) |
SOURCE Remark Holdings, Inc.
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