Third Quarter of 2020 Financial Highlights
For the Three Months Ended | |||||||||
($ millions, except per share data) | 2020 | 2019 | % Change | ||||||
Revenues | -20.7% | ||||||||
Gross profit (loss) | ( | -171.9% | |||||||
Gross margin | -5.2% | 5.8% | -11pp* | ||||||
Loss from operations | ( | ( | -410.5% | ||||||
Operating loss margin | -11.4% | -1.8% | -9.6pp | ||||||
Net loss attributable to CNET | ( | ( | -243.6% | ||||||
Loss per share | ( | ( | -200.0% | ||||||
*pp: percent points |
- Revenues decreased by 20.7% to
$12.30 million for the third quarter of 2020, primarily due to the decrease in revenues from our Internet advertising and distribution of the right to use search engine marketing service business categories, as a result of the slow recovery after the COVID-19 outbreak. - Gross loss was
$0.64 million with a gross loss margin of 5.2% for the third quarter of 2020. - Loss from operations was
$1.40 million for the third quarter of 2020, compared to$0.28 million for the same period of last year, primarily attributable to the decrease in gross profit, which was partially offset by the decrease in operating expenses. - Net loss attributable to CNET was
$1.33 million , or loss per share of$0.06 , for the third quarter of 2020, compared to net loss of$0.39 million , or loss per share of$0.02 , for the same period of last year.
“Despite continued decrease on a year-over-year basis, our third quarter revenues increased 18% sequentially and almost tripled from the trough level in the first quarter, highlighting the continuing post-pandemic recovery trend. Looking ahead, with restoring growth and profitability remaining a challenge for us in the near-term, we are actively pursuing new initiatives, opportunities, and strategic alternatives to right the ship,” said Mr.
Third Quarter 2020 Financial Results
Revenues
For the Three Months Ended | |||||||
2020 | 2019 | % Change | |||||
- Internet advertising and related data service | 2,429 | 3,949 | -38.5% | ||||
- Distribution of the right to use search engine marketing service | 8,706 | 11,554 | -24.6% | ||||
- Data and technical services | 300 | 5 | NM | ||||
Internet advertising and related services | 11,435 | 15,508 | -26.3% | ||||
Ecommerce O2O advertisement and marketing services | 269 | 0 | NM | ||||
Technical solution services | 600 | 0 | NM | ||||
Total revenues | 12,304 | 15,508 | -20.7% | ||||
For the third quarter of 2020, revenues decreased by
Cost of revenues
For the Three Months Ended | ||||||
2020 | 2019 | % Change | ||||
- Internet advertising and related data service | 1,998 | 3,669 | -45.5% | |||
- Distribution of the right to use search engine marketing service | 9,731 | 10,947 | -11.1% | |||
- Data and technical services | 265 | 0 | NM | |||
Internet advertising and related services | 11,994 | 14,616 | -17.9% | |||
Ecommerce O2O advertisement and marketing services | 375 | 0 | NM | |||
Technical solution services | 576 | 0 | NM | |||
Total cost of revenues | 12,945 | 14,616 | -11.4% |
Total cost of revenues decreased by
Gross profit (loss) and gross profit (loss) margin
Gross loss was
Operating expenses
Sales and marketing expenses decreased by
General and administrative expenses decreased by
Research and development expenses decreased by
Operating loss
Loss from operations was
Other income (expense), net
Total other expenses decreased to
Net loss attributable to CNET and loss per share
Net loss attributable to CNET was
First Nine Months 2020 Financial Results
For the Nine Months Ended | |||||||||||
($ millions, except per share data) | 2020 | 2019 | % Change | ||||||||
Revenues | -31.4% | ||||||||||
Gross profit | -67.3% | ||||||||||
Gross margin | 2.1% | 4.3% | -2.2 pp* | ||||||||
Loss from operations | ( | ( | -110.3% | ||||||||
Operating loss margin | -17.3% | -5.7% | -11.7 pp | ||||||||
Net loss attributable to CNET | ( | ( | -142.0% | ||||||||
Loss per share | ( | ( | -83.3% | ||||||||
*pp: percent points |
Revenues
For the Nine Months Ended | |||||||
2020 | 2019 | % Change | |||||
- Internet advertising and related data service | 5,679 | 9,384 | -39.5 | % | |||
- Distribution of the right to use search engine marketing service | 18,004 | 30,134 | -40.3 | % | |||
- Data and technical services | 900 | 10 | NM | ||||
Internet advertising and related services | 24,583 | 39,528 | -37.8 | % | |||
Ecommerce O2O advertisement and marketing services | 1,276 | 0 | NM | ||||
Technical solution services | 1,245 | 0 | NM | ||||
Total revenues | 27,104 | 39,528 | -31.4 | % | |||
For the first nine months of 2020, revenues decreased by
Cost of revenues
For the Nine Months Ended | |||||||
2020 | 2019 | % Change | |||||
- Internet advertising and related data service | 4,904 | 8,887 | -44.8 | % | |||
- Distribution of the right to use search engine marketing service | 19,147 | 28,936 | -33.8 | % | |||
- Data and technical services | 796 | 5 | NM | ||||
Internet advertising and related services | 24,847 | 37,828 | -34.3 | % | |||
Ecommerce O2O advertisement and marketing services | 1,125 | 0 | NM | ||||
Technical solution services | 576 | 0 | NM | ||||
Total cost of revenues | 26,548 | 37,828 | -29.8 | % |
For the first nine months of 2020, cost of revenues decreased by
Gross profit and gross margin
Gross profit decreased by
Overall gross margin was 2.1% for first nine months of 2020, compared to 4.3% for the same period of last year.
Operating expenses
Sales and marketing expenses decreased by
General and administrative expenses increased by
Research and development expenses decreased by
Operating loss
Loss from operations increased by
Other income (expense), net
Total other income was $nil for the first nine months of 2020, compared to
Net loss attributable to CNET and loss per share
As a result of the foregoing, net loss attributable to CNET was
Financial Condition
As of
Net cash provided by operating activities was
Recent Developments
Effective
On
About
Established in 2003 and headquartered in
Safe Harbor Statement
This release contains certain "forward-looking statements" relating to the business of
For more information, please contact:
Sherry Zheng
Email: shunyu.zheng@weitian-ir.com
Phone: +1 718-213-7386
CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except for number of shares and per share data) | ||||||
2020 | 2019 | |||||
(US $) | (US $) | |||||
(Unaudited) | ||||||
Assets | ||||||
Current assets: | ||||||
Cash and cash equivalents | $ | 500 | $ | 1,603 | ||
Accounts receivable, net of allowance for doubtful accounts of | ||||||
$3,148, respectively | 2,282 | 3,260 | ||||
Prepayment and deposit to suppliers | 6,301 | 6,980 | ||||
Due from related parties, net | 58 | 81 | ||||
Other current assets, net | 961 | 11 | ||||
Total current assets | 10,102 | 11,935 | ||||
Long-term investments | 64 | 35 | ||||
Operating lease right-of-use assets | 4 | 12 | ||||
Property and equipment, net | 74 | 78 | ||||
Intangible assets, net | 1,288 | 1,899 | ||||
Blockchain platform applications development costs | 4,189 | 3,879 | ||||
Long-term prepayments | 474 | - | ||||
Deferred tax assets, net | 815 | 713 | ||||
Total Assets | $ | 17,010 | $ | 18,551 | ||
Liabilities and Equity | ||||||
Current liabilities: | ||||||
Short-term bank loan | $ | - | $ | 430 | ||
Accounts payable | 552 | 408 | ||||
Advance from customers | 2,822 | 2,006 | ||||
Accrued payroll and other accruals | 442 | 491 | ||||
Taxes payable | 3,290 | 3,214 | ||||
Lease payment liability related to short-term leases | 222 | 136 | ||||
Other current liabilities | 325 | 221 | ||||
Warrant liabilities | 103 | 107 | ||||
Total current liabilities | 7,756 | 7,013 |
Long-term liabilities: | ||||||||
Long-term borrowing from a director | 129 | 125 | ||||||
Total Liabilities | 7,885 | 7,138 | ||||||
Commitments and contingencies | ||||||||
Equity: | ||||||||
ZW Data Action Technologies Inc.’s stockholders’ equity | ||||||||
Common stock ( | ||||||||
outstanding 21,741,926 shares and 19,629,403 shares at and | 22 | 20 | ||||||
Additional paid-in capital | 45,569 | 43,111 | ||||||
Statutory reserves | 2,607 | 2,607 | ||||||
Accumulated deficit | (40,384 | ) | (35,773 | ) | ||||
Accumulated other comprehensive income | 1,371 | 1,505 | ||||||
Total ZW Data Action Technologies Inc.’s stockholders’ equity | 9,185 | 11,470 | ||||||
Noncontrolling interests | (60 | ) | (57 | ) | ||||
Total equity | 9,125 | 11,413 | ||||||
Total Liabilities and Equity | $ | 17,010 | $ | 18,551 | ||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (In thousands, except for number of shares and per share data) | ||||||||||||||||
Nine Months Ended | Three Months Ended | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
(US $) | (US $) | (US $) | (US $) | |||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||
Revenues | ||||||||||||||||
From unrelated parties | $ | 27,086 | $ | 39,025 | $ | 12,300 | $ | 15,113 | ||||||||
From a related party | 18 | 503 | 4 | 395 | ||||||||||||
Total revenues | 27,104 | 39,528 | 12,304 | 15,508 | ||||||||||||
Cost of revenues | 26,548 | 37,828 | 12,945 | 14,616 | ||||||||||||
Gross profit/(loss) | 556 | 1,700 | (641 | ) | 892 | |||||||||||
Operating expenses | ||||||||||||||||
Sales and marketing expenses | 293 | 461 | 58 | 111 | ||||||||||||
General and administrative expenses | 4,520 | 2,875 | 592 | 817 | ||||||||||||
Research and development expenses | 443 | 599 | 113 | 239 | ||||||||||||
Total operating expenses | 5,256 | 3,935 | 763 | 1,167 | ||||||||||||
Loss from operations | (4,700 | ) | (2,235 | ) | (1,404 | ) | (275 | ) | ||||||||
Other income (expenses) | ||||||||||||||||
Interest expense, net | - | (33 | ) | 1 | (10 | ) | ||||||||||
Other expenses | (4 | ) | (6 | ) | (21 | ) | (2 | ) | ||||||||
Change in fair value of warrant liabilities | 4 | 351 | (64 | ) | (120 | ) | ||||||||||
Total other income | - | 312 | (84 | ) | (132 | ) | ||||||||||
Loss before income tax benefit and noncontrolling interests | (4,700 | ) | (1,923 | ) | (1,488 | ) | (407 | ) | ||||||||
Income tax benefit | 87 | 10 | 155 | 16 | ||||||||||||
Net loss | (4,613 | ) | (1,913 | ) | (1,333 | ) | (391 | ) | ||||||||
Net loss attributable to noncontrolling interests | 2 | 8 | - | 3 | ||||||||||||
Net loss attributable to | $ | (4,611 | ) | $ | (1,905 | ) | $ | (1,333 | ) | $ | (388 | ) |
Net loss | $ | (4,613 | ) | $ | (1,913 | ) | $ | (1,333 | ) | $ | (391 | ) | ||||
Foreign currency translation (loss)/gain | (135 | ) | 97 | (203 | ) | 73 | ||||||||||
Comprehensive loss | $ | (4,748 | ) | $ | (1,816 | ) | $ | (1,536 | ) | $ | (318 | ) | ||||
Comprehensive loss attributable to noncontrolling interests | 3 | 6 | 2 | 1 | ||||||||||||
Comprehensive loss attributable to | $ | (4,745 | ) | $ | (1,810 | ) | $ | (1,534 | ) | $ | (317 | ) | ||||
Loss per share | ||||||||||||||||
Loss per common share | ||||||||||||||||
Basic and diluted | $ | (0.22 | ) | $ | (0.12 | ) | $ | (0.06 | ) | $ | (0.02 | ) | ||||
Weighted average number of common shares outstanding: | ||||||||||||||||
Basic and diluted | 21,271,301 | 16,447,233 | 21,720,259 | 16,517,440 | ||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) | |||||||||
Nine Months Ended | |||||||||
2020 | 2019 | ||||||||
(US $) | (US $) | ||||||||
(Unaudited) | (Unaudited) | ||||||||
Cash flows from operating activities | |||||||||
Net loss | $ | (4,613 | ) | $ | (1,913 | ) | |||
Adjustments to reconcile net loss to net cash provided by/(used in) operating activities | |||||||||
Depreciation and amortization | 622 | 66 | |||||||
Amortization of operating lease right-of-use assets | 7 | - | 88 | ||||||
Share-based compensation expenses | 2,066 | 307 | |||||||
Provision for allowances for doubtful accounts | 751 | 445 | |||||||
Deferred taxes | (87 | ) | (10 | ) | |||||
Change in fair value of warrant liabilities | (4 | ) | (351 | ) | |||||
Changes in operating assets and liabilities | |||||||||
Accounts receivable | 254 | (289 | ) | ||||||
Prepayment and deposit to suppliers | 1,077 | (5,191 | ) | ||||||
Due from related parties | 24 | 226 | |||||||
Other current assets | (5 | ) | 11 | ||||||
Long-term prepayments | (375 | ) | - | ||||||
Accounts payable | 137 | (1,946 | ) | ||||||
Advance from customers | 754 | 4,151 | |||||||
Advance from a customer, related | - | 9 | |||||||
Accrued payroll and other accruals | (55 | ) | (242 | ) | |||||
Lease payment liability related to short-term leases | 81 | 180 | |||||||
Other current liabilities | (38 | ) | 291 | ||||||
Taxes payable | 8 | 123 | |||||||
Prepaid lease payment | (9 | ) | (10 | ) | |||||
Net cash provided by/(used in) operating activities | 595 | (4,055 | ) | ||||||
Cash flows from investing activities | |||||||||
Investment to investee entities | (27 | ) | (36 | ) | |||||
Short-term loan to an unrelated party | (944 | ) | - | ||||||
Payment for blockchain platform applications development costs | (302 | ) | - | ||||||
Prepayment for software system development | - | (760 | ) | ||||||
Net cash used in investing activities | (1,273 | ) | (796 | ) | |||||
Cash flows from financing activities | |||||||||
Proceeds from issuance of common stock (net of cash offering cost of | - | 2,393 | |||||||
Proceeds from short-term bank loan | - | 438 | |||||||
Repayment of short-term bank loan | (429 | ) | (875 | ) | |||||
Net cash (used in)/provided by financing activities | (429 | ) | 1,956 | ||||||
Effect of exchange rate fluctuation | 4 | (10 | ) | ||||||
Net decrease in cash and cash equivalents | (1,103 | ) | (2,905 | ) | |||||
Cash and cash equivalents at beginning of the period | 1,603 | 3,742 | |||||||
Cash and cash equivalents at end of the period | $ | 500 | $ | 837 | |||||
Supplemental disclosure of cash flow information | |||||||||
Income taxes paid | $ | - | $ | - | |||||
Interest expense paid | $ | 2 | $ | 36 | |||||
Source:
2020 GlobeNewswire, Inc., source