One Horizon Group Announces First Quarter 2015 Financial Results
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LIMERICK, IRELAND -- (Marketwired) -- 05/20/15 -- One Horizon Group, Inc. (NASDAQ: OHGI) ("One Horizon", "We" or the "Company"), which develops and licenses bandwidth efficient mobile voice over Internet Protocol ("VoIP") platform for smart phones, announced financial and operational results for the first quarter ending March 31, 2015.
First Quarter and Subsequent Highlights
- Successful rollout of Aishuo App:
- Commenced penetration into Latin American market by signing a Horizon license contract with a premier regional operator
- Smart Communications, Inc. in the Philippines continued its rollout of the Horizon App branded LinkPlus with installations in over 125 vessels to date and observed significant growth on the data consumption and voice over IP call revenues from its solution.
- Singapore Telecommunications continued its rollout of the Horizon App branded AIO Mobile and has commenced the first phase of its marketing activities.
- Smartfren Telekom Tbk in Indonesia continued its rollout of the Horizon App branded SmartCall and has commenced the first phase of its marketing activities.
"The most exciting progress since launching our Aishuo App in the first quarter is that we continue to see quantities of downloads that are exceeding our internal projections," stated Founder and CEO Brian Collins. "Together the Aishuo App, our validated technology and success with Tier-1 carriers such as SingTel, Smart Communications and Smartfren and with the signing of our first license contract in Latin America, we believe that we are well positioned for growth through the remainder of 2015 and beyond," concluded Mr. Collins.
First Quarter 2015 Financial Results
Our revenue for the three months ended March 31, 2015 was approximately $0.7 million as compared to approximately $1.2 million in the same period in 2014. The decrease was primarily due to the fact that $0.5 million recognized during the first quarter of 2014 on a Global Exchange installment was recognized in the fourth quarter of 2014 instead of the first quarter of 2015 because the invoice was received in December 2014, a month earlier than the previous year. Going forward, the Company expects the percent of total sales from software licenses and revenue share which inherently incorporates higher margins to increase. The Company expects revenue to increase in 2015 as more customers launch their services using the Horizon products and Aishuo platform gains further traction.
Gross profit and gross profit margins amounted $0.2 million and 23.1% respectively for the three months ended March 31, 2015.
Operating expenses for the three months ended March 31, 2015 declined to $1.1 million from $1.2 million during the same period in 2014. In an effort to shift the Company's business model from being purely a B2B business, the Company has allocated its resources to developing the B2C network and system in China where they have a greater influence on customer product development. One Horizon undertook considerable work in 2014 and launched its App on B2C network in February 2015.
Net loss and net loss per share attributable to common stockholders for the three months ended March 31, 2015 were $1.0 million and $0.03 per share, respectively, compared to a net loss of $0.4 million and a net loss per share of $0.01 during the same period in 2013. The weighted average shares outstanding remained 33.3 million for the three months ended March 31, 2015.
Financial Condition
The company had $1.9 million in cash as of March 31, 2015. The Company has $23.0 million of assets and $16.6 million shareholders' equity as of March 31, 2015. Cash outflows from operations were $0.6 million for the three months ended March 31, 2015.
About One Horizon Group, Inc.
One Horizon Group Inc.'s business is to optimize communications over the Internet through its wholly owned subsidiary, Horizon Globex GmbH, which develops and markets one of the world's most bandwidth-efficient mobile voice over Internet Protocol (VoIP) platforms for smartphones, and also offers a range of other optimized data Applications including messaging and mobile advertising. The company owns and operates the Aishuo mobile VoIP service in China. Horizon Globex GmbH is an ISO 9001 and ISO 20000-1 certified company. The Company has operations in Switzerland, the United Kingdom, China, India, Singapore, Hong Kong and Ireland. For more information on the Company, its products and services, please visit http://www.onehorizongroup.com.
Safe Harbor Statement This news release may contain "forward-looking" statements. These forward-looking statements are only predictions and are subject to certain risks, uncertainties and assumptions that could cause actual results to differ from those in the forward looking-statements. Potential risks and uncertainties include such factors as uncertainty of consumer demand for the Company's products, as well as additional risks and uncertainties that are identified and described in Company's SEC reports. Actual results may differ materially from the forward-looking statements in this press release. Statements made herein are as of the date of this press release and should not be relied upon as of any subsequent date. The Company does not undertake, and it specifically disclaims, any obligation to update any forward-looking statements to reflect occurrences, developments, events or circumstances after the date of such statement.
ONE HORIZON GROUP, INC.
Condensed Consolidated Balance Sheets
March 31, 2015 and December 31, 2014
(in thousands, except share data)
(unaudited)
March 31, December 31,
2015 2014
------------- -------------
Assets
Current assets:
Cash $ 1,923 $ 3,172
Accounts receivable (net), current portion 5,879 9,072
Other assets 584 576
------------- -------------
Total current assets 8,386 12,820
Accounts receivable (net), net of current
portion 3,116 -
Property and equipment, net 138 212
Intangible assets, net 11,004 10,960
Investment 18 19
Debt issue costs 362 395
------------- -------------
Total assets $ 23,024 $ 24,406
============= =============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 113 $ 556
Accrued expenses 323 360
Accrued compensation 14 15
Income taxes 94 93
Amounts due to related parties 350 600
Current portion of long-term debt 12 73
------------- -------------
Total current liabilities 906 1,697
Long-term liabilities - 108
Long term debt, net of current portion
Amount due to related parties 2,578 2,598
Convertible debenture 2,624 2,598
Deferred income taxes 235 235
Mandatorily redeemable preferred shares 90 90
------------- -------------
Total liabilities 6,433 7,326
Equity
Preferred stock:
$0.0001 par value, authorized 50,000,000;
issued and outstanding 170,940 shares
(December 2014 - 170,940) 1 1
Common stock:
$0.0001 par value, authorized 200,000,000
shares
issued and outstanding 33,281,069 shares
(December 2014 - 33,281,069) 3 3
Additional paid-in capital 32,292 32,163
Deferred compensation (161) (214)
Retained Earnings (Deficit) (16,185) (15,227)
Accumulated other comprehensive income 355 63
------------- -------------
Total One Horizon Group, Inc., stockholders'
equity 16,305 16,789
Non-controlling interest 286 291
------------- -------------
Total Equity 16,591 17,080
------------- -------------
Total liabilities and equity $ 23,024 $ 24,406
============= =============
ONE HORIZON GROUP, INC.
Condensed Consolidated Statements of Operations
For the three months ended March 31, 2015 and 2014
(in thousands, except per share data)
(unaudited)
2015 2014
------------- -------------
Revenue $ 745 $ 1,185
Cost of revenue:
Hardware 61 62
Amortization of software development costs 512 486
------------- -------------
573 548
------------- -------------
Gross margin 172 637
Expenses:
General and administrative 1,085 1,128
Depreciation 20 48
------------- -------------
1,105 1,176
------------- -------------
Loss from operations (933) (539)
Other income and expense:
Interest expense (90) (40)
Foreign exchange 85 (9)
Interest income 1
------------- -------------
(5) (48)
------------- -------------
Loss before income taxes (938) (587)
Income taxes (recovery) - deferred - (156)
------------- -------------
Net Loss for the period (938) (431)
Loss attributable to non-controlling interest (5) (43)
Net Loss for the period atrributable to One
Horizon Group, Inc. (933) (388)
Less: Preferred Dividends (25) -
------------- -------------
Net loss attributable to One Horizon Group,
Inc. Common stockholders $ (958) $ (388)
============= =============
Loss per share
Basic net loss per share $ (0.03) $ (0.01)
Diluted net loss per share $ (0.03) $ (0.01)
============= =============
Weighted average number of shares outstanding
Basic and diluted 33,281 32,934
============= =============
ONE HORIZON GROUP, INC.
Condensed Consolidated Statements of Comprehensive Loss
For the three months ended March 31, 2015 and 2014
(in thousands)
(unaudited)
2015 2014
------------- -------------
Net loss $ (933) $ (388)
Other comprehensive income:
Foreign currency translation adjustment gain 292 19
------------- -------------
(641) (369)
Comprehensive loss attributable to the non
controlling interest (5) (43)
------------- -------------
Total comprehensive loss $ (646) $ (412)
============= =============
ONE HORIZON GROUP, INC.
Consolidated Statement of Equity
For the three months ended March 31, 2015
(in thousands)
(unaudited)
Preferred Stock Common Stock
---------------------- -----------------------
Additional
Number of Number of Paid-in
Shares Amount Shares Amount Capital
---------- ---------- ----------- ----------- -----------
Balance December
31, 2014 171 $ 1 33,282 $ 3 $ 32,163
Net loss
Foreign currency
translations
Preferred
dividends
Amortization of
deferred
compensation
Options issued
for services 129
----------- ----------- ----------- ----------- -----------
Balance March
31, 2015 171 $ 1 33,282 $ 3 $ 32,292
========== ========== =========== =========== ===========
Accumulated
Retained Other Non-
Deferred Earnings Comprehensive controlling Total
Compensation (Deficit) Income (Loss) Interest Equity
------------- ---------- ------------- ----------- --------
Balance December
31, 2014 $ (214) $ (15,227) $ 63 $ 291 $17,080
Net loss (933) (5) (938)
Foreign currency
translations 292 292
Preferred
dividends (25) (25)
Amortization of
deferred
compensation 53 53
Options issued
for services 129
------------- ---------- ------------- ----------- --------
Balance March
31, 2015 $ (161) $ (16,185) $ 355 $ 286 $16,591
============= ========== ============= =========== ========
ONE HORIZON GROUP, INC.
Condensed Consolidated Statements of Cash Flows
For the three months ended March 31, 2015 and 2014
(in thousands)
(unaudited)
2015 2014
-------- --------
Cash provided by (used in) operating activities:
Operating activities:
Net income for the period $ (933) $ (388)
Adjustment to reconcile net income for the period to
net cash provided by (used in) operating activities:
Depreciation of property and equipment 20 48
Amortization of intangible assets 512 486
Increase in allowance for doubtful debts 100 -
Amortization of debt issue costs 33 -
Amortization of beneficial conversion feature 26 -
Amortization of deferred compensation 53 -
Common shares issued for services received - 65
Options issued for services 129 129
Net income (loss) attributable to non-controlling
interest (5) (43)
Changes in operating assets and liabilities:
Accounts receivable (23) 50
Other assets (8) (612)
Accounts payable and accrued expenses (481) (400)
Deferred income taxes - (156)
------- -------
Net cash provided by (used in) operating activities (577) (821)
------- -------
Cash used in investing activities:
Acquisition of intangible assets (289) (350)
Acquisition of property and equipment - (48)
Proceeds from disposition of property and equipment 32 -
------- -------
Net cash (used in) investing activities (257) (398)
------- -------
Cash flow from financing activities:
Increase (decrease) in long-term borrowing, net (169) (15)
Advances from (repayments to) related parties, net (270) -
------- -------
Net cash provided by (used in) financing activities (439) (15)
------- -------
Increase (decrease) in cash during the period (1,273) (1,234)
Foreign exchange effect on cash 24 (47)
Cash at beginning of the period 3,172 2,070
------- -------
Cash at end of the period $ 1,923 $ 789
======= =======
ONE HORIZON GROUP, INC.
Condensed Consolidated Statements of Cash Flows (continued)
For the three months ended March 31, 2015 and 2014
(in thousands)
(unaudited)
Supplementary Information:
2015 2014
----- -----
Interest paid $ - $ -
Income taxes paid - -
Non-cash transactions:
Contact: MZ North America Ted Haberfield President Tel: +1-760-755-2716 Email: Email Contact www.mzgroup.us
Source: One Horizon Group, Inc.
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