Blue Hat Announces Fiscal Year 2020 Financial Results, Highlighted by 27% Increase in Revenues to $30.2 Million
Fourth Quarter and Fiscal Year 2020 Financial Highlights
- Total revenues of
US$30.2 million , up 26.7% fromUS$23.8 million in 2019, driven by increased sales from its information services andInternet Data Center ("IDC") business in late 2020. As such, the majority of revenues was recorded in the fourth quarter of 2020, which increased more than 70% to approximatelyUS$20 million , fromUS$11.8 million in the prior-year period, primarily driven by the Company's previously mentioned new business lines, which saw significant growth following the strategic acquisition ofXunpusen Technology Co., Ltd. ("Xunpusen") in the second half of 2020. - Gross profit of
US$14.0 million , compared toUS$16.3 million in 2019 - Income from operations of
US$9.6 million , compared toUS$9.5 million in 2019 - Adjusted earnings before interest, taxes, and depreciation and amortization ("Adjusted EBITDA")[1], which excludes amortization of intangible assets and depreciation of property and equipment, of
US$10.3 million in 2020 - Net income of
US$8.3 million , compared toUS$9.1 million in 2019 - Non-GAAP net income, which excludes bond-related interest, warrant costs, and depreciation and amortization, of
US$9.2 million in 2020 US$15.8 million in cash and cash equivalents atDecember 31, 2020
[1] We supply non-GAAP information including Adjusted EBITDA and non-GAAP net income because we believe it allows our investors to obtain a clearer understanding of our operations. Any non-GAAP measures should not be considered as a substitute for, and should only be read in conjunction with, measures of financial performance prepared in accordance with GAAP. |
Management Commentary
Recent Operating Highlights
- In
January 2021 , Blue Hat signed a three-year licensing agreement with Cup ofCosmo Studio (Beijing) Culture Co., Ltd. for the use of its WUHUANGWANSHUI intellectual property on social media, toys and marketing materials, effectiveJanuary 1, 2021 . WUHUANGWANSHUI is an original Chinese cartoon image brand of a cat (Wu Huang ) and a dog (Ba Zahey), which has become an influential brand easily recognized in Chinese pop culture. - In
January 2021 , Blue Hat announced the closing of the acquisition of 51% of Csfctech and its two subsidiaries. Csfctech is a developer and distributor of mobile games inChina , boasting a portfolio of more than 100 games available on various platforms, with an international user base across Mainland China,Japan ,Taiwan , theUnited Arab Emirates andAfrica . - In
February 2021 , Blue Hat announced the signing of a three-year agreement withZhong Ya (Shenzhen) International Education Investment Co., Ltd. ("Zhong Ya") whereby Blue Hat will provide ARIC to Zhong Ya's 680 kindergartens located inGuangdong Province . - In
March 2021 , Blue Hat announced the signing of a three-year framework agreement withKingsoft Cloud Holdings Limited ("Kingsoft Cloud ") (NASDAQ: KC), a leading cloud service provider inChina , effectiveAugust 14, 2020 . Since August, the Company has been providing mainframe hosting, system maintenance, troubleshooting and other services toKingsoft Cloud's platform in an initial assessment period. This agreement strengthens Blue Hat's growing IDC business following the Company's acquisition of Xunpusen in late 2020.
Fiscal Year 2020 Results
Total revenues were
Revenues from sales of interactive toys (game series) were
Revenues from sales of interactive toys (animation series) were
Revenues from mobile games remained steady at
Revenues from information services were
Revenues from communication services were
Gross profit was
- Interactive toys (game series): 65.5%, or
US$10.4 million - Interactive toys (animation series): 31.5%, or
US$0.6 million - Mobile games: 99.6%, or
US$2.5 million - Information services: (0.1)%, or negative
US$0.06 million - Communication services: 8.9%, or
US$0.5 million
Gross profit margin was 46.3% for fiscal year 2020, compared to 68.4% for the prior fiscal year, due to the adverse impact the COVID-19 pandemic had on Blue Hat's sales and higher initial costs associated with establishing the new IDC business.
Total operating expenses were
Income from operations was
Adjusted EBITDA, which excludes amortization of intangible assets and depreciation of property and equipment, was
Net income was
Non-GAAP net income, which excludes bond-related interest, warrant costs, and depreciation and amortization, was
Basic and diluted earnings per share were
Balance Sheet Highlights
As of
Conference Call
Blue Hat management will host an earnings conference call on
Dial-in details are as follows:
|
|
|
+1 (877) 407-9046 |
International (Toll): |
+1 (201) 689-8733 |
Local Access |
|
Mainland |
(400) 120 2840 |
|
(800) 965561 |
Additionally, a live and archived webcast will be available at http://ir.bluehatgroup.com.
About Blue Hat
Forward-Looking Statements
This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. All forward-looking statements are inherently uncertain as they are based on current expectations and assumptions concerning future events or future performance of the Company. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. In evaluating such statements, prospective investors should review carefully various risks and uncertainties identified in this release and matters set in the Company's
Contacts:
Phone: +86 (592) 228-0010
Email: ir@bluehatgroup.net
Investor Relations:
The Equity Group Inc. In
(212) 836-9606 +86 10 5661 7012
aprior@equityny.com lma@equityny.com
BLUE HAT INTERACTIVE ENTERTAINMENT TECHNOLOGY AND SUBSIDIARIES |
||||||
AUDITED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME |
||||||
For the Years Ended |
||||||
2020 |
2019 |
|||||
Revenues |
$ |
30,191,069 |
$ |
23,834,129 |
||
Cost of revenue |
(16,206,823) |
(7,531,800) |
||||
Gross profit |
13,984,246 |
16,302,329 |
||||
Operating expenses: |
||||||
Selling |
(522,168) |
(928,680) |
||||
Research and development |
(281,618) |
(1,031,204) |
||||
General and administrative |
(3,613,361) |
(4,860,189) |
||||
Total operating expenses |
(4,417,147) |
(6,820,073) |
||||
Income from operations |
9,567,099 |
9,482,256 |
||||
Other income (expense) |
||||||
Interest income |
147,840 |
629 |
||||
Interest expense |
(439,607) |
(171,938) |
||||
Other finance expenses |
(82,338) |
(4,415) |
||||
Other income, net |
864,198 |
221,146 |
||||
Total other income, net |
490,093 |
45,422 |
||||
Income before income taxes |
10,057,192 |
9,527,678 |
||||
Provision for income taxes |
1,776,175 |
453,724 |
||||
Net income |
8,281,017 |
9,073,954 |
||||
Other comprehensive income (loss) |
||||||
Foreign currency translation adjustment |
(3,220,363) |
(521,738) |
||||
Comprehensive income |
$ |
5,060,654 |
$ |
8,552,216 |
||
Less: Comprehensive income attributable to non-controlling |
||||||
interests |
(111,404) |
- |
||||
Comprehensive income attributable to Blue Hat Interactive |
||||||
Entertainment shareholders |
4,949,250 |
8,552,216 |
||||
Weighted average number of ordinary shares |
||||||
Basic |
38,553,694 |
35,141,114 |
||||
Diluted |
39,859,074 |
35,141,114 |
||||
Earnings per share |
||||||
Basic |
|
|
||||
Diluted |
|
|
BLUE HAT INTERACTIVE ENTERTAINMENT TECHNOLOGY AND SUBSIDIARIES |
||||||||
AUDITED CONSOLIDATED BALANCE SHEETS |
||||||||
|
|
|||||||
ASSETS |
2020 |
2019 |
||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ |
15,800,563 |
$ |
10,478,587 |
||||
Inventories |
117,075 |
125,264 |
||||||
Accounts receivable, net |
16,594,533 |
13,631,359 |
||||||
Accounts receivables - related party |
1,906,101 |
- |
||||||
Other receivables, net |
14,350,223 |
13,182,529 |
||||||
Prepayments, net |
1,917,780 |
299,577 |
||||||
Restricted cash |
- |
5,000,000 |
||||||
Total current assets |
50,686,275 |
42,717,316 |
||||||
Non-current assets: |
||||||||
Operating lease, right-of-use asset |
290,410 |
679,850 |
||||||
Prepayments |
4,164,274 |
4,425,849 |
||||||
Property, plant and equipment, net |
4,258,121 |
2,324,823 |
||||||
Intangible assets, net |
14,252,575 |
6,758,316 |
||||||
Long-term investments |
1,914,668 |
1,727,301 |
||||||
Deferred tax assets |
119,127 |
182,234 |
||||||
Total non-current assets |
24,999,175 |
16,098,373 |
||||||
Total assets |
$ |
75,685,450 |
$ |
58,815,689 |
||||
LIABILITIES AND EQUITY |
||||||||
Current liabilities: |
||||||||
Short-term loans - banks |
$ |
5,129,295 |
$ |
5,819,787 |
||||
Current maturities of long-term loans - third party |
14,117 |
77,493 |
||||||
Taxes payable |
6,802,454 |
3,525,153 |
||||||
Accounts payable |
935,588 |
293,985 |
||||||
Other payables and accrued liabilities |
1,846,917 |
3,628,809 |
||||||
Other payables - related party |
25,837 |
21,341 |
||||||
Operating lease liabilities - current |
300,468 |
313,460 |
||||||
Customer deposits |
941,877 |
- |
||||||
Convertible bonds payable |
739,189 |
- |
||||||
Total current liabilities |
16,735,742 |
13,680,028 |
||||||
Non-current liabilities: |
||||||||
Operating lease liability |
- |
372,051 |
||||||
Long-term loans - third party |
- |
13,328 |
||||||
Total other liabilities |
- |
385,379 |
||||||
Total liabilities |
16,735,742 |
14,065,407 |
||||||
Shareholders' equity |
||||||||
Ordinary shares, |
38,554 |
35,141 |
||||||
Additional paid-in capital |
23,466,482 |
20,771,849 |
||||||
Statutory reserves |
2,204,174 |
1,289,765 |
||||||
Retained earnings |
31,387,398 |
24,132,194 |
||||||
Accumulated other comprehensive income (loss) |
1,741,696 |
(1,478,667) |
||||||
Total |
58,838,304 |
44,750,282 |
||||||
Non-controlling interests |
111,404 |
- |
||||||
Total equity |
58,949,708 |
44,750,282 |
||||||
Total liabilities and shareholders' equity |
$ |
75,685,450 |
$ |
58,815,689 |
BLUE HAT INTERACTIVE ENTERTAINMENT TECHNOLOGY AND SUBSIDIARIES |
||
RECONCILIATIONS OF NON-GAAP MEASURES TO THE MOST COMPARABLE GAAP MEASURES |
||
For the Year Ended 2020 |
||
Income from operations |
|
|
Add: Depreciation and amortization |
|
|
Adjusted EBITDA |
|
|
Net income |
|
|
Add: Bond-related interest and warrant costs |
|
|
Add: Depreciation and amortization |
|
|
Non-GAAP net income |
|
|
Earnings per weighted average ordinary share outstanding Basic and diluted |
|
|
Add: Non-GAAP adjustments to net income per share |
|
|
Non-GAAP basic and diluted earnings per share |
|
About Non-GAAP Financial Measures
This press release contains the non-GAAP financial measures including Adjusted EBITDA and non-GAAP net income, of which the most directly comparable financial measure presented in accordance with
The Company believes the presentation of these non-GAAP financial measures provide investors with relevant and useful information, as it allows investors to evaluate the operating performance of the business activities without having to account for differences recognized because of non-core or non-recurring financial information. When GAAP financial measures are viewed in conjunction with non-GAAP financial measures, investors are provided with a more meaningful understanding of the Company's ongoing operating performance. In addition, non-GAAP financial measures are among those indicators the Company uses as a basis for evaluating operational performance, allocating resources, and planning and forecasting future periods. Non-GAAP financial measures are not intended to be considered in isolation, or as a substitute for, GAAP financial measures. To the extent this release contains historical or future non-GAAP financial measures, the Company has provided corresponding GAAP financial measures for comparative purposes. The reconciliation between certain GAAP and non-GAAP measures is provided above.
View original content:http://www.prnewswire.com/news-releases/blue-hat-announces-fiscal-year-2020-financial-results-highlighted-by-27-increase-in-revenues-to-30-2-million-301264247.html
SOURCE