SGOCO Group, Ltd. Announces 2015 Unaudited Interim Financial Results

SHENZHEN, China, Dec. 24, 2015 /PRNewswire/ -- SGOCO Group, Ltd. (Nasdaq: SGOC) ("SGOCO" or the "Company"), a company focused on product design, distribution and brand development in the Chinese display and computer product market, today announced its unaudited operating results for the six months ended June 30, 2015.

2015 Interim Results Overview

The interim results of SGOCO were continually impacted by significant increases in competition and the overall weak industrial growth in the Chinese display industry.

Interim revenues decreased 98.5% to $0.5 million for the first six months of this year ("1H"), as compared to $34.1 million for the first six months of 2014. 

Gross profit dropped 98.6% to $0.02 million in the 1H 2015, from $1.7 million for the same period in 2014.

Net loss for the 1H 2015 was $0.9 million, compared to net loss of $1.6 million during the same period in 2014.

Basic and diluted loss per share was $0.05 for the 1H 2015, as compared to $0.09 loss per share in the 1H 2014.

Revenue

Due to the increasing popularity of mobile devices, the contraction of the personal computer market demand continued and it adversely impacted the market demand of our major product, flat panel LCD and LED monitors. The drop in market demand also led to intense competition with our peers which has further affected our revenue and gross margins. Our total revenues decreased by 98.5% to $0.5 million, as compared with $34.1 million for the first six months of 2014.

Gross margin

In 1H 2015, the gross profit of the Company decreased 98.6% to $0.02 million from $1.7 million for the same period in 2014.  The overall gross margin for the 1H 2015 was 4.8%, as compared with 5.1% during the same period of 2014.

Operating loss and expenses

The Company recorded a $0.8 million operating loss in the 1H 2015, as compared to an operating loss of $1.9 million in the 1H 2014. Operating expenses in 1H 2015 decreased by 77.2% to $0.8 million, compared to operating expenses of $3.7 million in the first six months of 2014. The decrease of G&A expenses was mainly due to tightened controls over expenses and decreased staff costs due to the number of employees reduced in our Hong Kong, Shenzhen and Beijing offices.

Net loss and loss per share

Net loss for the 1H 2015 was $0.9 million, compared to a net loss of $1.6 million for the same period in 2014. The net margin experienced a loss of 169.4% in the 1H of 2015, as compared to 4.8% during the same period of 2014. Basic and diluted loss per share was $0.05 in the 1H of 2015 based on 17,531,861 weighted average number of common shares, as compared to basic and diluted loss per share of $0.09 based on 17,397,082 weighted average number of common shares for the 1H 2014.

Cash and working capital

SGOCO held $91.6 million cash and cash equivalents at the end of June 30, 2015, compared to $0.1 million as of December 31, 2014. Working capital decreased to $84.5 million from $85.2 million at the end of December 31, 2014. The receipt of Sales Price and Receivables from disposal of our subsidiary, SGOCO (Fujian), were the major causes for the increase of cash flow.

About SGOCO Group, Ltd.

SGOCO Group, Ltd. is focused on product design, brand development and distribution in the Chinese display market, including computer monitors, All-In-One ("AIO") and Parts-In-One ("PIO") computers and application specific products. SGOCO sells its products and services in the China market and abroad. For more information about SGOCO, please visit our investor relations website:
http://www.sgocogroup.com

For investor and media inquiries, please contact:

SGOCO Group, Ltd.
Tony Zhong
Vice President of Finance
Tel: +86-0755-26978199 ext: 7500
Email: [email protected] 

Safe Harbor and Informational Statement

This announcement contains "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact, including, without limitation, those with respect to the objectives, plans and strategies of the Company set forth herein and those preceded by or that include the words "believe," "expect," "anticipate," "future," "will," "intend," "plan," "estimate" or similar expressions, are "forward-looking statements". Forward-looking statements in this release include, without limitation, the effectiveness of the Company's multiple-brand, multiple channel strategy and the transitioning of its product development and sales focus and to a "light-asset" model, Although the Company's management believes that such forward-looking statements are reasonable, it cannot guarantee that such expectations are, or will be, correct. These forward-looking statements involve a number of risks and uncertainties, which could cause the Company's future results to differ materially from those anticipated. These forward-looking statements can change as a result of many possible events or factors not all of which are known to the Company, which may include, without limitation, requirements or changes adversely affecting the LCD and LED market in China; fluctuations in customer demand for LCD and LED products generally; our success in promoting our brand of LCD and LED products in China and elsewhere; our ability to have effective internal control over financial reporting; our success in designing and distributing products under brands licensed from others; management of sales trend and client mix; possibility of securing loans and other financing without efficient fixed assets as collaterals; changes in government policy in China; the fluctuations and competition in sales and sale prices of LCD and LED products in China; China's overall economic conditions and local market economic conditions; our ability to expand through strategic acquisitions and establishment of new locations; compliance with government regulations; legislation or regulatory environments; geopolitical events, and other events and/or risks outlined in SGOCO's filings with the U.S. Securities and Exchange Commission, including its annual report on Form 20-F and other filings. All information provided in this press release and in the attachments is as of the date of the issuance, and SGOCO does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

SOURCE SGOCO Group, Ltd.

Related Links

http://www.sgoco.com