ZW Data Action Technologies Inc. (Nasdaq: CNET) (the "Company"), an
integrated online advertising, precision marketing, data analytics
and other value-added services provider serving enterprise clients,
today announced its unaudited financial results for the three and
nine months ended September 30, 2022.
Third Quarter 2022 Financial
Results
Revenues
For the third quarter of 2022, revenues
decreased by $4.68 million, or 39.4%, to $7.22 million from $11.90
million for the same period last year. The decrease in revenues was
primarily attributable to the decrease in our main stream service
revenues from the distribution of the right to use search engine
marketing services business segment, as a result of the repeated
regional COVID-19 rebound in many provinces in China during the
first nine months of fiscal 2022, which adversely affected business
of most of our small medium enterprises (“SMEs”) clients.
Cost of revenues
Total cost of revenues decreased by $4.59
million, or 38.7%, to $7.27 million for the third quarter of 2022
from $11.86 million for the same period last year. The decrease in
cost of revenues was primarily attributable to the decrease in
costs associated with the distribution of the right to use search
engine marketing service we purchased from key search engines,
which was in line with the decrease in revenues from the related
business category.
Gross profit (loss) and gross profit (loss)
margin
Gross loss was $0.05 million for the third
quarter of 2022, compared to a gross profit of $0.04 million for
the same period last year. Overall gross loss margin rate was 0.7%
for the third quarter of 2022, compared to a gross profit margin of
0.4% for the same period last year.
Operating expenses
Sales and marketing expenses were $0.07 million
for the third quarter of 2022, compared to $0.06 million for the
same period last year. The increase in sales and marketing expenses
was mainly attributable to the increase in staff salaries, staff
benefits and other general office expenses of our sales department
in Guangzhou, as a result of the increase in business development
activities of our Guangzhou office since the fourth fiscal quarter
of 2021.
General and administrative expenses increased by
$0.18 million, or 12.2%, to $1.65 million for the third quarter of
2022 from $1.47 million for the same period last year. The increase
in general and administrative expenses was mainly attributable to
the increase in amortization of administrative assets of $0.38
million, which was partially offset by the decrease in share-based
compensation expenses of $0.04 million and other general
administrative expenses of $0.16 million.
Research and development expenses decreased by
$0.03 million, or 35.2%, to $0.06 million for the third quarter of
2022 from $0.09 million for the same period last year. The decrease
in research and development expenses was primarily due to a
reduction in headcount in the research and development
department.
Operating loss
Loss from operations was $1.83 million for the
third quarter of 2022, compared to $1.57 million for the same
period last year. Operating loss margin was 25.4% for the third
quarter of 2022, compared to 13.2% for the same period last
year.
Other income (expenses), net
Net other expenses were $1.01 million for the
third quarter of 2022, compared to a net other income of $2.82
million for the same period last year. The decrease was primarily
attributable to the decrease in change in fair value of warrant
liabilities of $3.88 million. Net income (loss)
attributable to CNET and earnings (loss) per share
Net loss attributable to CNET was $2.84 million,
or loss per share of $0.08, for the third quarter of 2022. This was
compared to a net income attributable to CNET of $1.38 million, or
earnings per share of $0.04, for the same period last year.
First Nine Months 2022 Financial
Results
Revenues
For the first nine months of 2022, revenues
decreased by $13.03 million, or 37.4%, to $21.81 million from
$34.85 million for the same period last year. The decrease in
revenues was primarily attributable to the decrease in revenues
from our distribution of the right to use search engine marketing
services business segment, as a result of the repeated regional
COVID-19 rebound in many provinces in China during the first nine
months of fiscal 2022, which adversely affected business of most of
our small medium enterprises (“SMEs”) clients.
Cost of revenues
Total cost of revenues decreased by $13.93
million, or 39.0%, to $21.81 million for the first nine months of
2022 from $35.74 million for the same period last year. The
decrease in cost of revenues was primary attributable to the
decrease in costs associated with the distribution of the right to
use search engine marketing service we purchased from key search
engines, which was in line with the decrease in revenues from the
related business category.
Gross profit (loss) and gross profit (loss)
margin
Gross profit was $0.002 million for the first
nine months of 2022, compared to a gross loss of $0.89 million for
the same period last year. Overall gross profit margin rate was
0.01% for the first nine months of 2022, compared to a gross loss
margin of 2.6% for the same period last year. The generation of
gross profit and improvement of our overall gross margin rate for
the first nine months year of 2022 was mainly attributable to the
improvement of gross margin rate of our main stream of service
revenues, i.e., distribution of the right to use search engine
marketing services, and the termination of the outdoor billboards
advertising business in the four quarter of 2021, which suffered
from a significant loss in fiscal 2021.
Operating expenses
Sales and marketing expenses increased by $0.06
million, or 37.7%, to $0.22 million for the first nine months of
2022, compared to $0.16 million for the same period last year. The
increase in sales and marketing expenses was mainly attributable to
the increase in staff salaries, staff benefits and other general
office expenses of our sales department in Guangzhou, as a result
of the increase in business development activities of our Guangzhou
office since the fourth fiscal quarter of 2021.
General and administrative expenses decreased by
$4.67 million, or 45.0%, to $5.70 million for the first nine months
of 2022 from $10.37 million for the same period last year. The
decrease in general and administrative expenses was mainly
attributable to the decrease in share-based compensation expenses
of $6.81 million, which was partially offset by the increase in
allowance for doubtful accounts of $0.95 million, amortization of
administrative assets of $1.16 million, and other administrative
expenses of $0.03 million, respectively.
Research and development expenses decreased by
$0.07 million, or 27.9%, to $0.18 million for the first nine months
of 2022 from $0.25 million for the same period last year. The
decrease in research and development expenses was primarily due to
a reduction in headcount in the research and development
department.
Operating loss
Loss from operations was $6.10 million for the
first nine months of 2022, compared to $11.67 million for the same
period last year. Operating loss margin was 27.9% for the third
quarter of 2022, compared to 33.5% for the same period last
year.
Other income (expenses), net
Net other income decreased to $0.82 million for
the first nine months of 2022 from $9.91 million for the same
period last year. The decrease was primarily attributable to the
decrease in gain from change in fair value of warrant liabilities
of $8.92 million. Net loss attributable to CNET
and loss per share
Net loss attributable to CNET was $5.27 million,
or loss per share of $0.15, for the first nine months of 2022. This
was compared to a net loss attributable to CNET of $1.59 million,
or loss per share of $0.05, for the same period last year.
Financial Condition
As of September 30, 2022, the Company had cash
and cash equivalents of $2.15 million, compared to $7.17 million as
of December 31, 2021. Accounts receivable, net was $3.00 million as
of September 30, 2022, compared to $3.44 million as of December 31,
2021. Working capital was $7.82 million as of September 30, 2022,
compared to $11.10 million as of December 31, 2021.
Net cash used in operating activities was $4.41
million for the third quarter of 2022, compared to $6.60 million
for the same period last year. Net cash used in investing
activities was $0.48 million for the third quarter of 2022,
compared to $6.10 million for the same period last year.
About ZW Data Action Technologies
Inc.
Established in 2003 and headquartered in
Beijing, China, ZW Data Action Technologies Inc. (the “Company”)
offers online advertising, precision marketing, data analytics and
other value-added services for enterprise clients. Leveraging its
fully integrated services platform, proprietary database, and
cutting-edge algorithms, the Company delivers customized,
result-driven business solutions for small and medium-sized
enterprise clients in China. The Company also develops blockchain
and artificial intelligence enabled web/mobile applications and
software solutions for clients. More information about the Company
can be found at: http://www.zdat.com/.
Safe Harbor Statement
This release contains certain "forward-looking statements"
relating to the business of ZW Data Action Technologies Inc., which
can be identified by the use of forward-looking terminology such as
"believes," "expects," "anticipates," "estimates" or similar
expressions. Such forward-looking statements involve known and
unknown risks and uncertainties, including business uncertainties
relating to government regulation of our industry, market demand,
reliance on key personnel, future capital requirements, competition
in general and other factors that may cause actual results to be
materially different from those described herein as anticipated,
believed, estimated or expected. Certain of these risks and
uncertainties are or will be described in greater detail in our
filings with the Securities and Exchange Commission. These
forward-looking statements are based on ZW Data Action Technologies
Inc.’s current expectations and beliefs concerning future
developments and their potential effects on the Company. There can
be no assurance that future developments affecting ZW Data Action
Technologies Inc. will be those anticipated by ZW Data Action
Technologies Inc. These forward-looking statements involve a number
of risks, uncertainties (some of which are beyond the control of
the Company) or other assumptions that may cause actual results or
performance to be materially different from those expressed or
implied by such forward-looking statements. ZW Data Action
Technologies Inc. undertakes no obligation to publicly update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise, except as may be required
under applicable securities laws.
For more information, please contact:
Sherry
Zheng Weitian Group
LLCEmail: shunyu.zheng@weitian-ir.comPhone: +1 718-213-7386
ZW DATA ACTION TECHNOLOGIES
INC.CONSOLIDATED BALANCE SHEETS(In
thousands, except for number of shares and per share data)
|
|
|
September 30,2022 |
|
December 31,2021 |
|
|
|
(US $) |
|
(US $) |
|
|
|
(Unaudited) |
|
|
Assets |
|
|
|
|
|
Current assets: |
|
|
|
|
|
Cash and cash equivalents |
|
|
$ |
2,154 |
|
|
$ |
7,173 |
|
Accounts receivable, net of allowance for doubtful accounts of
$2,337 and $2,236, respectively |
|
|
|
2,999 |
|
|
|
3,439 |
|
Prepayment and deposit to suppliers |
|
|
|
7,593 |
|
|
|
7,559 |
|
Due from related parties |
|
|
|
15 |
|
|
|
90 |
|
Other current assets, net |
|
|
|
1,623 |
|
|
|
1,657 |
|
Total current assets |
|
|
|
14,384 |
|
|
|
19,918 |
|
|
|
|
|
|
|
Long-term investments |
|
|
|
2,149 |
|
|
|
2,280 |
|
Operating lease right-of-use assets |
|
|
|
1,838 |
|
|
|
2,019 |
|
Property
and equipment, net |
|
|
|
267 |
|
|
|
375 |
|
Intangible assets, net |
|
|
|
5,896 |
|
|
|
7,523 |
|
Long-term deposits and prepayments |
|
|
|
68 |
|
|
|
75 |
|
Deferred
tax assets, net |
|
|
|
398 |
|
|
|
441 |
|
Total Assets |
|
|
$ |
25,000 |
|
|
$ |
32,631 |
|
|
|
|
|
|
|
Liabilities and Equity |
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
Accounts payable * |
|
|
$ |
276 |
|
|
$ |
1,119 |
|
Advance from customers * |
|
|
|
951 |
|
|
|
1,245 |
|
Accrued payroll and other accruals * |
|
|
|
170 |
|
|
|
389 |
|
Taxes payable * |
|
|
|
3,199 |
|
|
|
3,534 |
|
Operating lease liabilities * |
|
|
|
389 |
|
|
|
202 |
|
Lease payment liability related to short-term leases * |
|
|
|
99 |
|
|
|
152 |
|
Other current liabilities * |
|
|
|
197 |
|
|
|
141 |
|
Warrant liabilities |
|
|
|
1,280 |
|
|
|
2,039 |
|
Total current liabilities |
|
|
|
6,561 |
|
|
|
8,821 |
|
Long-term liabilities: |
|
|
|
|
|
|
Operating lease liabilities-Non current * |
|
|
|
1,557 |
|
|
|
1,907 |
|
|
Long-term borrowing from a related party |
|
|
|
123 |
|
|
|
137 |
|
|
Total Liabilities |
|
|
|
8,241 |
|
|
|
10,856 |
|
|
|
|
|
|
|
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity: |
|
|
|
|
|
|
ZW Data Action Technologies Inc.’s stockholders’ equity |
|
|
|
|
|
|
Common stock (US$0.001 par value; authorized 100,000,000; issued
and outstanding 35,827,677 shares and 35,332,677 shares at
September 30, 2022 and December 31, 2021, respectively) |
|
|
|
36 |
|
|
|
35 |
|
|
Additional paid-in capital |
|
|
|
61,972 |
|
|
|
61,785 |
|
|
Statutory reserves |
|
|
|
2,598 |
|
|
|
2,598 |
|
|
Accumulated deficit |
|
|
|
(49,005 |
) |
|
|
(43,734 |
) |
|
Accumulated other comprehensive income |
|
|
|
1,158 |
|
|
|
1,082 |
|
|
Total ZW Data Action Technologies Inc.’s stockholders’ equity |
|
|
|
16,759 |
|
|
|
21,766 |
|
|
|
|
|
|
|
|
|
Total equity |
|
|
|
16,759 |
|
|
|
21,766 |
|
|
|
|
|
|
|
|
|
Total Liabilities and Equity |
|
|
$ |
25,000 |
|
|
$ |
32,631 |
|
|
* Liabilities recognized as a result of consolidating these VIEs
do not represent additional claims on the Company’s general
assets.
ZW DATA ACTION TECHNOLOGIES
INC.CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS AND COMPREHENSIVE (LOSS)/INCOME (In thousands,
except for number of shares and per share data)
|
|
Nine Months Ended September 30, |
|
Three Months Ended September 30, |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
(US $) |
|
(US $) |
|
(US $) |
|
(US $) |
|
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
Revenues |
|
|
|
|
|
|
|
|
From unrelated parties |
|
$ |
21,813 |
|
|
$ |
34,843 |
|
|
$ |
7,216 |
|
|
$ |
11,896 |
|
From a related party |
|
|
- |
|
|
|
4 |
|
|
|
- |
|
|
|
4 |
|
Total
revenues |
|
|
21,813 |
|
|
|
34,847 |
|
|
|
7,216 |
|
|
|
11,900 |
|
Cost of revenues |
|
|
21,811 |
|
|
|
35,739 |
|
|
|
7,267 |
|
|
|
11,857 |
|
Gross profit/(loss) |
|
|
2 |
|
|
|
(892 |
) |
|
|
(51 |
) |
|
|
43 |
|
|
|
|
|
|
|
|
|
|
Operating expenses |
|
|
|
|
|
|
|
|
Sales and marketing expenses |
|
|
219 |
|
|
|
159 |
|
|
|
72 |
|
|
|
58 |
|
General and administrative expenses |
|
|
5,697 |
|
|
|
10,366 |
|
|
|
1,651 |
|
|
|
1,471 |
|
Research and development expenses |
|
|
181 |
|
|
|
251 |
|
|
|
57 |
|
|
|
88 |
|
Total operating expenses |
|
|
6,097 |
|
|
|
10,776 |
|
|
|
1,780 |
|
|
|
1,617 |
|
|
|
|
|
|
|
|
|
|
Loss from
operations |
|
|
(6,095 |
) |
|
|
(11,668 |
) |
|
|
(1,831 |
) |
|
|
(1,574 |
) |
|
|
|
|
|
|
|
|
|
Other income/(expenses) |
|
|
|
|
|
|
|
|
Interest income |
|
|
96 |
|
|
|
3 |
|
|
|
21 |
|
|
|
1 |
|
Other (expenses)/income, net |
|
|
(33 |
) |
|
|
265 |
|
|
|
(5 |
) |
|
|
(37 |
) |
Loss on disposal of long-term investments |
|
|
- |
|
|
|
(38 |
) |
|
|
- |
|
|
|
- |
|
Change in fair value of warrant liabilities |
|
|
759 |
|
|
|
9,682 |
|
|
|
(1,023 |
) |
|
|
2,853 |
|
Total other income/(expenses) |
|
|
822 |
|
|
|
9,912 |
|
|
|
(1,007 |
) |
|
|
2,817 |
|
|
|
|
|
|
|
|
|
|
(Loss)/income before
income tax benefit/(expense) and noncontrolling
interests |
|
|
(5,273 |
) |
|
|
(1,756 |
) |
|
|
(2,838 |
) |
|
|
1,243 |
|
Income tax benefit/(expenses) |
|
|
2 |
|
|
|
171 |
|
|
|
(2 |
) |
|
|
131 |
|
Net
(loss)/income |
|
|
(5,271 |
) |
|
|
(1,585 |
) |
|
|
(2,840 |
) |
|
|
1,374 |
|
Net (income)/loss attributable to noncontrolling interests |
|
|
- |
|
|
|
(1 |
) |
|
|
- |
|
|
|
1 |
|
Net (loss)/income attributable to ZW Data Action
Technologies Inc. |
|
$ |
(5,271 |
) |
|
$ |
(1,586 |
) |
|
$ |
(2,840 |
) |
|
$ |
1,375 |
|
Net (loss)/income |
|
$ |
(5,271 |
) |
|
$ |
(1,585 |
) |
|
$ |
(2,840 |
) |
|
$ |
1,374 |
|
Foreign
currency translation income/(loss) |
|
|
76 |
|
|
|
(25 |
) |
|
|
93 |
|
|
|
(2 |
) |
Comprehensive (loss)/income |
|
$ |
(5,195 |
) |
|
$ |
(1,610 |
) |
|
$ |
(2,747 |
) |
|
$ |
1,372 |
|
Comprehensive income attributable to noncontrolling interests |
|
|
- |
|
|
|
(1 |
) |
|
|
- |
|
|
|
- |
|
Comprehensive (loss)/income attributable to ZW Data Action
Technologies Inc. |
|
$ |
(5,195 |
) |
|
$ |
(1,611 |
) |
|
$ |
(2,747 |
) |
|
$ |
1,372 |
|
|
|
|
|
|
|
|
|
|
(Loss)/earnings per share |
|
|
|
|
|
|
|
|
(Loss)/earnings per common share |
|
|
|
|
|
|
|
|
Basic and diluted |
|
$ |
(0.15 |
) |
|
$ |
(0.05 |
) |
|
$ |
( 0.08 |
) |
|
$ |
0.04 |
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares
outstanding: |
|
|
|
|
|
|
|
|
Basic and diluted |
|
|
35,572,200 |
|
|
|
32,279,304 |
|
|
|
35,827,677 |
|
|
|
35,332,220 |
|
ZW DATA ACTION TECHNOLOGIES
INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS(In thousands)
|
|
Nine Months Ended September 30, |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
(US $) |
|
(US $) |
|
|
(Unaudited) |
|
(Unaudited) |
Cash flows from operating activities |
|
|
|
|
Net loss |
|
$ |
(5,271 |
) |
|
$ |
(1,585 |
) |
Adjustments to reconcile net loss to net cash used in
operating activities |
|
|
|
|
Depreciation and amortization |
|
|
1,660 |
|
|
|
450 |
|
Amortization of operating lease right-of-use assets |
|
|
239 |
|
|
|
149 |
|
Share-based compensation expenses |
|
|
135 |
|
|
|
6,945 |
|
Provision for allowances for doubtful accounts |
|
|
947 |
|
|
|
- |
|
Loss on disposal of long-term investments |
|
|
- |
|
|
|
38 |
|
Deferred taxes |
|
|
(2 |
) |
|
|
(171 |
) |
Change in fair value of warrant liabilities |
|
|
(759 |
) |
|
|
(9,682 |
) |
Other non-operating income/(losses) |
|
|
(93 |
) |
|
|
24 |
|
Changes in
operating assets and liabilities |
|
|
|
|
Accounts receivable |
|
|
(211 |
) |
|
|
(257 |
) |
Prepayment and deposit to suppliers |
|
|
(459 |
) |
|
|
(1,698 |
) |
Due from related parties |
|
|
59 |
|
|
|
- |
|
Other current assets |
|
|
25 |
|
|
|
6 |
|
Long-term deposits and prepayments |
|
|
- |
|
|
|
(314 |
) |
Accounts payable |
|
|
(784 |
) |
|
|
142 |
|
Advance from customers |
|
|
(179 |
) |
|
|
(133 |
) |
Accrued payroll and other accruals |
|
|
(205 |
) |
|
|
(126 |
) |
Other current liabilities |
|
|
735 |
|
|
|
(230 |
) |
Taxes payable |
|
|
4 |
|
|
|
(31 |
) |
Lease payment liability related to short-term leases |
|
|
(40 |
) |
|
|
(54 |
) |
Operating lease liabilities |
|
|
(210 |
) |
|
|
(73 |
) |
Net cash used in operating activities |
|
|
(4,409 |
) |
|
|
(6,600 |
) |
|
|
|
|
|
Cash flows from investing activities |
|
|
|
|
Payment for leasehold improvements and purchase of vehicles,
furniture and office equipment |
|
|
- |
|
|
|
(306 |
) |
Cash effect of deconsolidation of VIEs’ subsidiaries |
|
|
- |
|
|
|
(8 |
) |
Investments and advances to ownership investee entities |
|
|
- |
|
|
|
(1,919 |
) |
Repayment from ownership investee entities |
|
|
12 |
|
|
|
- |
|
Short-term loans to unrelated parties |
|
|
(2,600 |
) |
|
|
(1,507 |
) |
Repayment of short-term loans and interest income from unrelated
parties |
|
|
2,109 |
|
|
|
1,303 |
|
Payment for purchase of software technologies |
|
|
- |
|
|
|
(1,160 |
) |
Deposit and prepayment paid for contracts of other investing
activities |
|
|
- |
|
|
|
(2,500 |
) |
Net cash used in investing activities |
|
|
(479 |
) |
|
|
(6,097 |
) |
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
Proceeds from issuance of common stock and warrant (net of cash
offering cost of US$1,600) |
|
|
- |
|
|
|
17,111 |
|
Net cash provided by financing activities |
|
|
- |
|
|
|
17,111 |
|
|
|
|
|
|
Effect of exchange rate fluctuation on cash and cash
equivalents |
|
|
(131 |
) |
|
|
20 |
|
|
|
|
|
|
Net (decrease)/increase in cash and cash
equivalents |
|
|
(5,019 |
) |
|
|
4,434 |
|
|
|
|
|
|
Cash and cash equivalents at beginning of the period |
|
|
7,173 |
|
|
|
4,297 |
|
Cash and cash equivalents at end of the period |
|
$ |
2,154 |
|
|
$ |
8,731 |
|
ZW Data Action Technolog... (NASDAQ:CNET)
Graphique Historique de l'Action
De Avr 2024 à Mai 2024
ZW Data Action Technolog... (NASDAQ:CNET)
Graphique Historique de l'Action
De Mai 2023 à Mai 2024