Acorn International (ATV) Reports Q2 Revenues of $8.7M

Acorn International (NYSE: ATV) reported Q2 revenue for the quarter came in at $8.7 million.

Second Quarter Estimated Results Highlights

• Net revenues increased 3.6% year-over-year in Q2 2020 to US$8.7 million.
• Gross profit decreased 0.8% year-over-year in Q2 2020 to US$6.0 million.
• Gross margin was 69.4% in Q2 2020, compared to 72.4% in Q2 2019.
• Loss from continuing operations was US$0.7 million in Q2 2020, compared to a loss from continuing operations of US$0.4 million in Q2 2019.
• Net income was US$2.0 million in Q2 2020 as compared to net income of US$0.1 million in Q2 2019. In Q2 2020, the Company recorded a $2.5 million gain from the sale of shares of E-Money Holding Co., Ltd. ("E-Money") (formerly known as Shanghai Yimeng Software Technology Co., Ltd.).

Preliminary Financial Results for the Second Quarter of 2020:

Total net revenues were US$8.7 million in the second quarter of 2020, up 3.6% from US$8.4 million in the second quarter of 2019, primarily due to the growth in sales of Acorn Fresh products and the inclusion of Acorn Digital Services in revenues (in the year ago period, this business segment was included in other operating income). These increases were partially offset by lower sales of Babaka branded products and lower revenues from oxygen-generating products related primarily to the sale of the Company's subsidiary Zhuhai Acorn Electronic Technology Co., Ltd ("Zhuhai Acorn").

Cost of sales in the second quarter of 2020 was US$2.7 million, up 15% from US$2.3 million in the second quarter of 2019. The increase was primarily attributable to the inclusion of Acorn Digital Services in cost of sales in the second quarter of 2020 (in the year ago period, this business segment was included in other operating income), and a higher proportion of Acorn Fresh products, which have a slightly lower margin than Babaka branded products, in the product mix.

Gross profit in the second quarter of 2020 was US$6.0 million, down 0.8% from US$6.1 million in the second quarter of 2019. Gross margin was 69.4% in the second quarter of 2020, compared with 72.4% in the second quarter of 2019.

Total operating expenses in the second quarter of 2020 were US$6.8 million, up 5.3% from US$6.4 million in the second quarter of 2019. The increase was primarily due to a slight increase in media spending which was partially offset by lower general and administrative expenses.

Loss from continuing operations was US$0.7 million in the second quarter of 2020, as compared to a loss from continuing operations of US$0.4 million in the second quarter of 2019.

Other income was US$2.6 million in the second quarter of 2020, primarily due to a US$2.5 million gain from the sale of shares of E-Money.

Net income from continuing operations was US$2.0 million in the second quarter of 2020. This compares to net income from continuing operations of US$0.3 million in the second quarter of 2019. Net loss from discontinued operations, which reflects the sale of a majority stake in the Company's HJX electronic learning products business to a third-party investor and operator in 2017 as well as the Company's call center operations which were discontinued in the third quarter of 2019 (refer to "Discontinued Operations" discussion below), was US$26 thousand in the second quarter of 2020, compared to net loss from discontinued operations of US$0.1 million in the second quarter of 2019.

Net income attributable to Acorn was US$2.0 million in the second quarter of 2020. This compares to net income attributable to Acorn of US$0.1 million in the second quarter of 2019.

For earnings history and earnings-related data on Acorn International (ATV) click here.

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