Cyren Announces Second Quarter 2017 Financial Results

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Cyren Announces Second Quarter 2017 Financial Results

Ransomware outbreaks drive demand for Cyren’s internet security services and fast time-to-protection

PR Newswire

MCLEAN, Va., Aug. 16, 2017 /PRNewswire/ — Cyren (NASDAQ: CYRN) today announced its second quarter 2017 financial results for the period ending June 30, 2017.

The second quarter was highlighted by continued expansion of Cyren’s enterprise SaaS platform strategy. During the quarter, Cyren increased the number of new enterprise customers using the Cyren Cloud Security (CCS) platform for email, web, or DNS security. In the first half of 2017, the company added approximately 125 new enterprise SaaS customers, with over 500% growth in North America compared to the same period a year ago. In addition, Cyren’s EMEA partner program is expanding rapidly and the company has certified over 10 channel partners to sell Cyren’s internet security services.

Cyren also won significant new and renewal contracts in the Threat Intelligence Services business which will have a positive impact on revenues beginning in the third and fourth quarter. Due to timing of expiring contracts and ramp-up of revenue recognition for new customer contracts, the second quarter shows a small decline in revenue compared to the first quarter.

“Over the past quarter we saw unprecedented ransomware attacks, most notably with the WannaCry and Petya outbreaks that affected hundreds of thousands of computers globally. Fortunately Cyren’s customers were unaffected by these outbreaks, as our systems detected and blocked all of the variants of these viruses without a single customer infection reported,” said Lior Samuelson, CEO and Chairman of the Board at Cyren. “This is significant because it shows the ability of our cloud platform to detect and block attacks before they impact the endpoint. I believe that this fast time-to-protection provides us with a significant advantage over our competitors and will lead to increasing revenues in future quarters.”


Second Quarter 2017 Financial Highlights:

  • Revenues for the second quarter of 2017 were $7.8 million, up from $7.6 million for the second quarter of 2016. Revenues for the first half of 2017 were $15.7 million compared to $15.0 million for the same period in 2016, an increase of 5%.
  • GAAP net loss for the second quarter of 2017 was $2.7 million, compared to a net loss of $0.8 million in the second quarter of 2016 and $2.5 million last quarter.
  • GAAP loss per basic and diluted share for the second quarter of 2017 was $0.07, compared to a loss of $0.02 per basic and diluted share for the second quarter of 2016 and $0.06 per share last quarter.
  • Non-GAAP net loss for the second quarter of 2017 was $2.5 million, compared to a Non-GAAP net loss of $0.2 million for the second quarter of 2016 and $2.4 million last quarter.
  • Non-GAAP loss per basic and diluted share was $0.07 for the second quarter of 2017, compared to a Non-GAAP loss of $0.00 per share in second quarter of 2016.
  • Operating cash usage during the second quarter was $1.8 million, compared to operating cash usage of $0.2 million in the second quarter of 2016.
  • Net cash usage during the second quarter was $2.0 million, compared to net cash usage of $1.1 million during the second quarter of 2016.
  • Cash balance as of June 30, 2017 was $11.6 million, compared to $13.5 million as of March 31, 2017. The company carries convertible notes with a principal balance of $6.3 million which were issued at the end of Q1 2017.

For information regarding the non-GAAP financial measures discussed in this release, please see “Use of Non-GAAP Financial Measures” and “Reconciliation of Selected GAAP Measures to Non-GAAP Measures.”


Recent Business Highlights:

  • Cyren signed a number of new customers who deployed multiple services using Cyren’s newly released CCS 4.0 platform, which delivers email security, web security, DNS security and cloud sandboxing all from the same integrated multi-tenant cloud platform. Cyren’s install base of over 1,000 enterprise accounts represents a large upsell opportunity for Cyren customers to deploy multiple cloud security services over the coming quarters.
  • During the quarter, Cyren renewed and expanded several customers using its Threat Intelligence Services, including more than doubling the contract value of one of its largest customers to total more than $6 million over the next three years. The well-known marquee customer recently added Cyren’s Phishing Intelligence solution to protect millions of enterprise users from advanced malware and phishing attacks.
  • In June, Cyren was awarded a cybersecurity grant from the Israeli Innovation Authority (IIA) at Israel’s Ministry of Economy and Industry. The grant follows similar awards in 2015 and 2016, and will offset R&D expenses by approximately $930 thousand during 2017. The grant reduced R&D expenses by approximately $487 thousand during the quarter, though there was no cash impact during the quarter.


Financial Results Conference Call:

The company will host a conference call at 10 a.m. Eastern Time (5 p.m. Israel Time) on Wednesday, August 16, 2017.

U.S. Dial-in Number:

1-888-296-4215

Israel Dial-in Number:

1-80-924-5905

International Dial-in Number:

1-719-785-9446

The call will be simultaneously webcast live on the investor relations section of Cyren’s website at www.cyren.com/ir.html, or by using the following link: http://public.viavid.com/index.php?id=125720.

For those unable to participate in the live conference call, a replay will be available until August 30, 2017. To access the replay, the U.S. dial in number is 1-844-512-2921 and the non-U.S. dial in number is 1-412-317-6671. Callers will be prompted for replay conference ID number 3387763. An archived version of the webcast will also be available on the investor relations section of the company’s website.


About Cyren:

More than 1.3 billion users around the world rely on Cyren’s 100% cloud internet security solutions to protect them against cyber attacks and data loss every day. Powered by the world’s largest security cloud, Cyren (NASDAQ and TASE: CYRN) delivers fast time to protection from cyber threats with award-winning security as a service for web, email, sandboxing, and DNS for enterprises, and embedded threat intelligence solutions for security vendors and service providers. Customers like Google, Microsoft and Check Point are just a few of the businesses that depend on Cyren every day to power their security. Learn more at www.Cyren.com.

Blog: http://blog.cyren.com
Facebook: www.facebook.com/CyrenWeb
LinkedIn: www.linkedin.com/company/cyren
Twitter: www.twitter.com/CyrenInc or www.twitter.com/cyren_ir


Use of Non-GAAP Financial Measures:

Non-GAAP financial measures consist of GAAP financial measures adjusted to exclude: stock-based compensation expenses, amortization of acquired intangible assets, executive termination costs, deferred taxes and deferred revenues related to acquisitions, one-time gain from sale of investment in affiliate, adjustments to earn-out obligations, capitalization of technology, accretion of discount on convertible note and change in fair value of the embedded conversion feature. The purpose of such adjustments is to give an indication of the company’s performance exclusive of non-cash charges and other items that are considered by management to be outside of the company’s core operating results. The company’s non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with the company’s consolidated financial statements prepared in accordance with GAAP.

Company management regularly uses supplemental non-GAAP financial measures internally to understand, manage and evaluate the business and make operating decisions.

These non-GAAP measures are among the primary factors management uses in planning for and forecasting future periods. The company believes this adjustment is useful to investors as a measure of the ongoing performance of the business. The company believes these non-GAAP financial measures provide consistent and comparable measures to help investors understand the company’s current and future operating cash flow performance. These non-GAAP financial measures may differ materially from the non-GAAP financial measures used by other companies. Reconciliation between results on a GAAP and non-GAAP basis is provided in a table immediately following the Consolidated Statements of Income. The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. Management uses both GAAP and non-GAAP measures when evaluating the business internally and therefore felt it important to make these non-GAAP adjustments available to investors.

This press release contains forward-looking statements, including projections about the company’s business, within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. For example, statements in the future tense, and statements including words such as “expect,” “plan,” “estimate,” “anticipate,” or “believe” are forward-looking statements. These statements are based on information available at the time of the press release and the company assumes no obligation to update any of them. The statements in this press release are not guarantees of future performance and actual results could differ materially from current expectations as a result of numerous factors, including business conditions and growth or deterioration in the internet security market, technological developments, products offered by competitors, availability of qualified staff, and technological difficulties and resource constraints encountered in developing new products, as well as those risks described in the company’s Annual Reports on Form 20-F and reports on Form 6-K, which are available through

www.sec.gov

.


Company Contact



Mike Myshrall

, CFO
Cyren

+1.703.760.3320


mike.myshrall@cyren.com

Israel Investor Contact
Iris Lubitch
SmarTeam
+972.54.2528007
iris@smartteam.co.il 

Media Contact
Matthew Zintel
Zintel Public Relations
+1.281.444.1590
matthew.zintel@zintelpr.com 


CYREN LTD.


 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands of U.S. dollars, except per share amounts)


Three months ended 


Six months ended 


June 30


June 30


2017


2016


2017


2016

Unaudited

Unaudited

Unaudited

Unaudited

 Revenues 

$    7,757

$    7,559

$  15,716

$  14,970

 Cost of revenues 

2,997

2,562

6,029

4,613

Gross profit 

4,760

4,997

9,687

10,357

Operating expenses:

 Research and development, net

2,353

2,103

4,643

4,381

 Sales and marketing 

3,751

2,027

7,324

4,770

 General and administrative 

1,679

1,691

3,242

3,388

 Total operating expenses 

7,783

5,821

15,209

12,539

Operating loss

(3,023)

(824)

(5,522)

(2,182)

Other income

450

451

7

Financial expense, net 

(130)

(40)

(205)

(133)

Loss before taxes

(2,703)

(864)

(5,276)

(2,308)

Tax benefit (expense)

42

25

97

(26)


Net loss


$   (2,661)


$      (839)


$   (5,179)


$   (2,334)

Loss per share – basic

$     (0.07)

$     (0.02)

$     (0.13)

$     (0.06)

Loss per share – diluted 

$     (0.07)

$     (0.02)

$     (0.13)

$     (0.06)

Weighted average number of shares outstanding: 

Basic 

39,231

39,121

39,193

39,121

Diluted  

39,231

39,121

39,193

39,121

      


CYREN LTD.


RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES

(in thousands of U.S.dollars, except per share amounts)


Three months ended 


Six months ended 


June 30


June 30


2017


2016


2017


2016

Unaudited

Unaudited

Unaudited

Unaudited

GAAP operating loss

$  (3,023)

$      (824)

$  (5,522)

$  (2,182)

Stock-based compensation (1)

281

250

561

497

Amortization of intangible assets (2)

1,117

855

2,157

1,249

Executive terminations (5)

57

57

Adjustment to deferred revenues (6)

24

66

Capitalization of technology (8)

(595)

(459)

(1,721)

(1,406)

Non-GAAP operating loss

$  (2,220)

$        (97)

$  (4,525)

$  (1,719)

GAAP net loss

$  (2,661)

$      (839)

$  (5,179)

$  (2,334)

Stock-based compensation (1)

281

250

561

497

Amortization of intangible assets (2)

1,117

855

2,157

1,249

Adjustment to earn-out liabilities and related expenses (3)

32

63

Amortization of deferred tax assets (4)

(61)

(73)

(121)

(150)

Executive terminations (5)

57

57

Adjustment to deferred revenues (6)

24

66

Gain from sale of investment in affiliate (7)

(450)

(450)

Capitalization of technology (8)

(613)

(459)

(1,739)

(1,437)

Accretion of discount on convertible note (9)

171

171

Change in fair value of embedded conversion feature on convertible note (10)

(267)

(267)

Non-GAAP net loss

$  (2,451)

$      (185)

$  (4,804)

$  (2,052)

GAAP loss per share (diluted)

$     (0.07)

$     (0.02)

$     (0.13)

$     (0.06)

Stock-based compensation (1)

0.00

0.01

0.01

0.02

Amortization of intangible assets (2)

0.03

0.02

0.06

0.03

Adjustment to earn-out liabilities and related expenses (3)

0.00

0.00

0.00

0.00

Amortization of deferred tax assets (4)

(0.00)

(0.00)

(0.00)

0.00

Executive terminations (5)

0.00

0.00

0.00

0.00

Adjustment to deferred revenues (6)

0.00

0.00

0.00

0.00

Gain from sale of investment in affiliate (7)

(0.01)

0.00

(0.01)

0.00

Capitalization of technology (8)

(0.02)

(0.01)

(0.05)

(0.04)

Accretion of discount on convertible note (9)

0.00

0.00

0.00

0.00

Change in fair value of embedded conversion feature on convertible note (10)

(0.00)

0.00

(0.00)

0.00

Non-GAAP loss per share (diluted)

$     (0.06)

$     (0.00)

$     (0.12)

$     (0.05)

Numbers of shares used in computing non-GAAP loss per share (diluted)

39,231

39,121

39,193

39,121



(1) Stock-based compensation 

Cost of revenues 

$         29

$         15

$         59

$         27

Research and development 

85

83

167

166

Sales and marketing 

58

54

113

106

General and administrative 

109

98

222

198

$       281

$       250

$       561

$       497



(2) Amortization of intangible assets 

Cost of revenues 

$       949

$       665

$    1,823

$       871

Sales and marketing 

168

190

334

378

$    1,117

$       855

$    2,157

$    1,249



(3) Adjustment to earn-out liabilities and related expenses

Financial expenses, net 

$         32

$             –

$         63

$             –



(4) Amortization of deferred tax assets

Tax benefit (expense)

$        (61)

$        (73)

$      (121)

$      (150)



(5) Executive terminations 

Sales and marketing 

$             –

$         57

$             –

$         57



(6) Adjustment to deferred revenues 

Revenues

$             –

$         24

$             –

$         66



(7) Gain from sale of investment in affiliate

Other Income

$      (450)

$             –

$      (450)

$             –



(8) Capitalization of technology

Research and development

$      (595)

$      (459)

$  (1,721)

$  (1,406)

Financial expenses, net 

(18)

(18)

(31)

$      (613)

$      (459)

$  (1,739)

$  (1,437)



(9) Accretion of discount on convertible note

Financial expenses, net 

$       171

$             –

$       171

$             –



(10) Change in fair value of embedded conversion feature on convertible note

Financial expenses, net 

$      (267)

$             –

$      (267)

$             –

 


CYREN LTD.


CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands of U.S. dollars)


June 30


December 31


2017


2016

Unaudited

Audited


                 Assets

    Current Assets:

Cash and cash equivalents 

$  11,568

$           10,621

Trade receivables, net

3,364

3,061

Prepaid expenses and other receivables

1,797

918

 Total current assets 

16,729

14,600

Property and equipment, net 

2,027

2,081

Goodwill and intangible assets, net

30,792

29,867

Severance pay fund 

606

604

Lease deposits 

410

380

 Total long-term assets 

33,835

32,932

Total assets

$  50,564

$           47,532


                 Liabilities and Shareholders’ Equity

    Current Liabilities:

Trade payables

$        791

$                764

Employees and payroll accruals 

2,773

2,528

Accrued expenses and other liabilities 

1,015

755

Earn-out consideration

3,364

3,041

Deferred revenues

4,605

4,609

 Total current liabilities 

12,548

11,697

Long term Convertible Note

4,340

Embedded conversion feature on Convertible Note

1,864

Deferred revenues

1,246

1,788

Deferred tax liability

1,378

1,374

Accrued severance pay 

871

816

Other liabilities

128

119

Total long-term liabilities

9,827

4,097

Shareholders’ equity 

28,189

31,738

Total liabilities and shareholders’ equity

$  50,564

$           47,532

 


CYREN LTD.


 CONDENSED CONSOLIDATED CASH FLOW DATA

(in thousands of U.S. dollars)


Three months ended 


Six months ended 


June 30


June 30


2017


2016


2017


2016


Cash flows from operating activities:

Unaudited

Unaudited

Unaudited

Unaudited

Net loss

$  (2,661)

$     (839)

$  (5,179)

$  (2,334)


Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Loss on disposal of property and equipment

1

1

1

3

Depreciation 

280

320

555

643

Stock-based compensation

281

250

561

497

Amortization of intangible assets

1,117

855

2,157

1,249

Accrued interest and accretion of discount on credit line

(19)

Accrued interest and accretion of discount on convertible note

171

171

Change in fair value of embedded conversion feature on convertible note

(267)

(267)

Other income related to investment in affiliate

(450)

(450)

Other expenses related to the earn-out consideration

33

64

Deferred taxes

(42)

(47)

(95)

(120)


Changes in assets and liabilities:

Trade receivables

(414)

(31)

(389)

98

Prepaid expenses and other receivables

(453)

(171)

(849)

(363)

Change in long-term lease deposits

(5)

(214)

(27)

(228)

Trade payables

(81)

155

9

(54)

Employees and payroll accruals, accrued expenses and other liabilities

703

154

485

114

Deferred revenues

(57)

(580)

(546)

3,247

Accrued severance pay, net

23

(18)

53

42

Other long-term liabilities

(2)

(3)


Net cash provided by (used in) operating activities

(1,821)

(167)

(3,746)

2,772


Cash flows from investing activities:

Proceeds from sale of investment in affiiate

450

450

Capitalization of technology, net of grants received

(613)

(459)

(1,739)

(1,437)

Purchase of property and equipment

(119)

(386)

(473)

(649)


Net cash used in investing activities

(282)

(845)

(1,762)

(2,086)


Cash flows from financing activities:

Proceeds from convertible note

6,300

Payment of credit line

(4,150)

Proceeds from options exercised

61

67


Net cash provided by (used in) financing activities

61

6,367

(4,150)


Effect of exchange rate changes on cash

72

(46)

88

53


Increase (decrease) in cash and cash equivalents


(1,970)


(1,058)


947


(3,411)


Cash and cash equivalents at the beginning of the period


13,538


14,026


10,621


16,379


Cash and cash equivalents at the end of the period


$ 11,568


$ 12,968


$ 11,568


$ 12,968

 

CYREN Logo.

 

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SOURCE Cyren

Pointer Telocation Reports Second Quarter 2017 Financial Results

Logo

Pointer Telocation Reports Second Quarter 2017 Financial Results

Record Results

PR Newswire

ROSH HAAYIN, Israel, Aug. 16, 2017 /PRNewswire/ —


Financial Highlights of the Quarter

  • Record revenues of $20.0 million, up 24% year-over-year;
  • Recurring Service revenues of $12.9 million, up 27% year-over-year;
  • Record EBITDA of $3.4 million, up 54% year-over-year;
  • Net income doubled year-over-year to $2.0 million;
  • Total subscribers reached 239,000, an increase of 24% year-over-year;

Pointer Telocation Ltd. (Nasdaq: PNTR) (TASE: PNTR),  a leading provider of telematic services and technology solutions for Fleet Management, Mobile Asset Management and Internet of Vehicles, announced today its financial results for the second quarter of 2017. [1]

Pointer Telocation Logo


Financial summary for the second quarter of 2017

Revenues for the second quarter of 2017 increased 24% to $20.0 million as compared to $16.2 million in the second quarter of 2016.

Revenues from products in the second quarter of 2017 increased 18% to $7.1 million (36% of revenues) compared to $6.0 million (37% of revenues) in the comparable period of 2016.

Revenues from recurring services in the second quarter of 2017 increased 27% to $12.9 million (64% of revenues) compared to $10.2 million (63% of revenues), in the comparable period of 2016. The growth in service revenue was primarily due to the growth in the subscriber base which grew by 47,000 subscribers since June 30, 2016 and 8,000 subscribers since March 31, 2017.

Gross profit was $10.3 million (51.4% of revenues) compared to $7.7 million (47.7% of revenues) in the second quarter of 2016.

Operating income on a GAAPbasis was $2.8 million (14.1% of revenues), an increase of 72%, compared with $1.6 million (10.1% of revenues) in the second quarter of 2016.

Non-GAAP operating income was $3.1 million (15.2% of revenues), an increase of 71% compared to $1.8 million (11% of revenues) in the second quarter of 2016.

GAAP net income (from continuing operations) was $2.0 million, double the net income of $1.0 million reported in the second quarter of 2016.

Non-GAAP net income (from continuing operations) was $2.6 million (12.9% of revenues), an increase of 78%, compared with $1.5 million (9% of revenues) in the second quarter of 2016.

EBITDA (from continuing operations) was $3.4 million (17.1% of revenues), an increase of 54% compared with $2.2 million (13.8% of revenues) in the second quarter of 2016.

Cash and Cash Equivalents totaled $5.7 million and Total Debt was $12.7 million. 


Management Comment

David Mahlab, Pointer’s Chief Executive Officer, commented: “We are extremely pleased with our record results for the quarter.  We achieved strong revenue growth and increased margins with nearly 2/3 of our total revenues comprised of recurring service revenues.  In addition to these financial achievements, we continued to execute our long term strategic objectives to strengthen our position as a leading provider of technology solutions in Fleet Management, Mobile Asset Management and the Internet of Vehicles.  Our results demonstrate the success of our long-term strategy for growing our business, increasing profitability and building shareholder value.”

Mr. Mahlab continued, “In the past months, we have made great progress on two strategically important deployments.  We have successfully completed most of the installations with Femsa, the Coca-Cola bottling company in Mexico, and we have fully deployed our driving behavior solution integrated with Mobileye devices in a 5,000-car fleet in New York City.  In addition, we recently announced a new long-term product supply agreement with a leading US-based telematics provider. This contract is the first substantial win for our new Nano CelloTrack technology.  We believe this is the first of many other opportunities that we expect to capitalize on in the coming quarters.”

Conference Call Information Pointer Telocation’s management will host a conference call today, at 7:00am Pacific Time, 10:00 Eastern Time, 17:00 Israel time. On the call, management will review and discuss the results.  To listen to the call, please dial in to one of the following teleconferencing numbers. Please begin placing your call a few minutes before the conference call commences.

Dial in numbers are as follows:

From the USA: +1 866 744 5399; From Israel: 03-918-0691; From the UK 0-800-917-5108

A replay will be available a few hours following the call on the company’s website.


Reconciliation between results on a GAAP and Non-GAAP basis

Reconciliation between results on a GAAP and Non-GAAP basis is provided in a table immediately following the Condensed Interim Consolidated Statements of Cash Flows.

Pointer uses EBITDA and Non-GAAP net income as Non-GAAP financial performance measurements.

Pointer calculates EBITDA by adding back to net income financial expenses, taxes, depreciation and amortization and impairment of goodwill and intangible assets.

Pointer calculates Non-GAAP net income by adding back to net income the effects of non-cash stock based compensation expenses, amortization and impairment of long lived assets, non-cash tax expenses, other expenses of retirement costs, spin-off related expenses and losses and acquisition related one-time costs.

The purpose of such adjustments is to give an indication of the Company’s performance exclusive of Non-GAAP charges that are considered by management to be outside of the Company’s core operating results.

EBITDA and non-GAAP net income are provided to investors to complement results provided in accordance with GAAP, as management believes the measure helps illustrate underlying operating trends in the Company’s business and uses the measure to establish internal budgets and goals, manage the business and evaluate performance. Management believes that these non-GAAP measures help investors to understand the Company’s current and future operating cash flow and performance, especially as the Company’s acquisitions have resulted in amortization and non-cash items that have had a material impact on the Company’s GAAP profits. EBITDA and non GAAP net income should not be considered in isolation or as a substitute for comparable measures calculated and should be read in conjunction with the Company’s consolidated financial statements prepared in accordance with GAAP. These non-GAAP financial measures may differ materially from the non-GAAP financial measures used by other companies.

[1] On June 8, 2016 Pointer spun off its Israeli subsidiary, Shagrir Group Vehicle Services Ltd., through which Pointer carried out its road side assistance (RSA) activities and listed Shagrir’s shares for trade on the Tel Aviv Stock Exchange. The results of Shagrir until that date are included in Pointer’s results as discontinued operation.


About Pointer Telocation

For over 20 years, Pointer has rewritten the rules for the Mobile Resource Management (MRM) market and is a pioneer in the Connected Car segment. Pointer has in-depth knowledge of the needs of this market and has developed a full suite of tools, technology and services to respond to them. The vehicles of the future will be intimately networked with the outside world, enhancing and optimizing the in-car experience.

Pointer’s innovative and reliable cloud-based software-as-a-service (SAAS) platform extracts and captures an organization’s critical mobility data points – from office, drivers, routes, points-of-interest, logistic-network, vehicles, trailers, containers and cargo. The SAAS platform analyzes the raw data converting it into valuable information for Pointer’s customers providing them with actionable insights and thus enabling the customers to improve their bottom line and increase their profitably.

For more information, please visit http://www.pointer.com


Forward Looking Statements

This press release contains historical information and forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995 with respect to the business, financial condition and results of operations of the Company. The words “believe,” “expect,” “anticipate,” “intend,” “seems,” “plan,” “aim,” “should” and similar expressions are intended to identify forward-looking statements. Such statements reflect the current views, assumptions and expectations of the Company with respect to future events and are subject to risks and uncertainties. Many factors could cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including, among others, changes in the markets in which the Company operates and in general economic and business conditions, loss or gain of key customers and unpredictable sales cycles, competitive pressures, market acceptance of new products, inability to meet efficiency and cost reduction objectives, changes in business strategy and various other factors, both referenced and not referenced in this press release. Various risks and uncertainties may affect the Company and its results of operations, as described in reports filed by the Company with the Securities and Exchange Commission from time to time. The Company does not assume any obligation to update these forward-looking statements.

 

 


INTERIM CONSOLIDATED BALANCE SHEETS


U.S. dollars in thousands


June 30,
2017


December 31,
2016


Unaudited


ASSETS

CURRENT ASSETS:

Cash and cash equivalents

$      5,700

$        6,066

Trade receivables

14,273

11,464

Other accounts receivable and prepaid expenses

3,008

2,504

Inventories

5,915

5,242

Total current assets

28,896

25,276

LONG-TERM ASSETS:

Long-term loan to related party

940

831

Long-term accounts receivable

588

564

Severance pay fund

3,340

2,878

Property and equipment, net

5,752

5,614

Other intangible assets, net

1,939

2,178

Goodwill

40,759

38,107

Deferred tax asset

478

1,433

Total long-term assets

53,796

51,605

Total assets

$   82,692

$     76,881

 

 


INTERIM CONSOLIDATED BALANCE SHEETS


U.S. dollars in thousands


June 30,


December 31,


2017


2016


Unaudited


LIABILITIES AND SHAREHOLDERS’ EQUITY

CURRENT LIABILITIES:

Short-term bank credit and current maturities of long-term loans

$    5,211

$        4,836

Trade payables

6,539

7,116

Deferred revenues and customer advances

1,079

1,037

Other accounts payable and accrued expenses

7,671

6,839

Total current liabilities

20,500

19,828

LONG-TERM LIABILITIES:

Long-term loans from banks

7,525

10,182

Deferred taxes and other long-term liabilities

988

976

Accrued severance pay

3,808

3,206

Total long term liabilities

12,321

14,364

COMMITMENTS AND CONTINGENT LIABILITIES

EQUITY:

Pointer Telocation Ltd’s shareholders’ equity:

Share capital 

5,970

5,837

Additional paid-in capital

128,798

128,438

Accumulated other comprehensive income

(2,477)

(5,633)

Accumulated deficit

(82,588)

(86,115)

Total Pointer Telocation Ltd’s shareholders’ equity

49,703

42,527

Non-controlling interest

168

162

Total equity

49,871

42,689

Total liabilities and equity

$     82,692

$      76,881

 

 


INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS


U.S. dollars in thousands


Six months ended


June 30,


Three months ended


June 30,


Year ended


December 31,


2017


2016


2017


2016


2016


Unaudited


Unaudited

Revenues:

Products

$     13,829

$     11,555

$     7,147

$      6,048

$          22,784

Services

25,243

19,485

12,894

10,166

41,569

Total revenues

39,072

31,040

20,041

16,214

64,353

Cost of revenues:

Products

8,753

7,178

4,477

3,782

13,904

Services

10,621

8,774

5,258

4,702

18,672

Total cost of revenues

19,374

15,952

9,735

8,484

32,576

Gross profit

19,698

15,088

10,306

7,730

31,777

Operating expenses:

Research and development

1,987

1,824

1,017

919

3,669

Selling and marketing

6,761

5,615

3,456

2,968

11,774

General and administrative

5,634

4,227

2,886

2,093

9,004

Amortization of intangible assets

226

195

113

105

473

One-time acquisition related costs

609

Total operating expenses

14,608

11,861

7,472

6,085

25,529

Operating income

5,090

3,227

2,834

1,645

6,248

Financial expenses, net

419

243

259

323

1,046

Other expenses (income)

(4)

2

9

Income before taxes on income

4,671

2,988

2,575

1,320

5,193

Taxes on income

1,138

854

609

276

1,845

Income from continuing operations

3,533

2,134

1,966

1,044

3,348

Income (loss) from discontinued operation, net

154

(168)

154

Net income

$     3,533

$      2,288

$      1,966

$         876

$   3,502

Earnings per share from continuing
   operations attributable to Pointer
   Telocation Ltd’s shareholders:

Basic net earnings per share

$     0.44

$       0.27

$     0.24

$       0.13

$   0.43

Diluted net earnings per share

$     0.44

$       0.27

$     0.24

$       0.13

$  0.42

Weighted average -Basic number of shares

7,942,957

7,787,009

7,978,102

7,789,365

7,820,767

Weighted average – fully diluted number of shares

8,070,953

7,924,421

8,111,119

7,934,321

7,938,290

 

 


INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS


U.S. dollars in thousands


Six months ended


June 30,


Three months ended


June 30,


Year ended


December 31,


2017


2016


2017


2016


2016


Unaudited


Unaudited


Cash flows from operating activities:

Net income

$     3,533

$    2,288

$     1,966

$    876

$         3,502

Adjustments required to reconcile net income
  to net cash provided by operating activities:

Depreciation and amortization

1,451

1,775

601

877

3,258

Accrued interest and exchange rate changes of debenture and long-term loans

74

 

290

29

Accrued severance pay, net

112

121

54

74

20

Gain from sale of property and equipment, net

(67)

(179)

(49)

(53)

(232)

 Stock-based compensation

217

94

106

36

320

Increase in trade receivables, net

(2,127)

(4,284)

(1,202)

(585)

(3,489)

Decrease (increase)  in other accounts receivable and prepaid expenses

(480)

(906)

131

 

(249)

(942)

Decrease (increase) in inventories

(567)

443

(418)

207

(1,063)

Decrease in deferred income taxes

822

1,038

452

248

1,774

Decrease (increase) in long-term accounts receivable

52

(9)

123

 

126

99

Increase (decrease) in trade payables

(1,211)

2,042

(732)

296

3,346

Increase in other accounts payable and accrued expenses

994

2,460

192

 

1,293

2,455

Net cash provided by operating activities

2,729

4,957

1,224

3,436

9,077

Cash flows from investing activities:

Purchase of property and equipment

(1,112)

(2,861)

(344)

(1,284)

(4,129)

Purchase of other intangible assets

(115)

(115)

(115)

Proceeds from sale of property and equipment

55

594

37

118

648

Acquisition of subsidiary (a)

(8,531)

Net cash used in investing activities

(1,057)

(2,382)

(307)

(1,281)

(12,127)

 

 


INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS


U.S. dollars in thousands


Six months ended


June 30,


Three months ended


June 30,


Year ended


December 31,


2017


2016


2017


2016


2016


Unaudited


Unaudited


Cash flows from financing activities:

Receipt of long-term loans from banks

95

6,263

Repayment of long-term loans from banks

(2,013)

(2,250)

(1,063)

(1,123)

(4,976)

Proceeds from issuance of shares and exercise
  of options, net of issuance costs

276

197

98

Distribution as a dividend in kind of previously

 consolidated subsidiary (b)

(1,870)

(1,870)

(1,870)

Short-term bank credit, net

(302)

128

(21)

83

716

Net cash provided (used) in financing activities

(2,039)

(3,897)

(887)

(2,910)

231

Effect of exchange rate on cash and cash equivalents

1

(280)

(84)

(155)

(462)

Decrease in cash and cash equivalents

(366)

(1,602)

(54)

(910)

(3,281)

Cash and cash equivalents at the beginning of the period

6,066

9,347

5,754

8,655

9,347

Cash and cash equivalents at the end of the period

$      5,700

$      7,745

 

$      5,700

$      7,745

$      6,066

(a)


Acquisition of subsidiary:

Working capital (Cash and cash equivalent excluded)

$                  -

$                  -

$                  -

$                  -

$           (334)

Property and equipment

(1,239)

Intangible assets

(2,098)

Goodwill

(6,070)

Deferred taxes

714

Payables for acquisition of investments in subsidiaries

496

$                   –

$                   –

$                   –

$                   –

$       (8,531)

 

 


INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS


U.S. dollars in thousands


Six months ended


June 30,


Three months ended


June 30,


Year ended


December 31,


2017


2016


2017


2016


2016


Unaudited


Unaudited

(b)


Distribution as a dividend in kind of previously



consolidated subsidiary:

The subsidiaries’ assets and liabilities at date of distribution:

Working capital

(excluding cash and cash equivalents)

$                  -

(5,443)

$                  -

(5,443)

(5,443)

Property and equipment

7,048

7,048

7,048

Goodwill and other intangible assets

15,883

15,883

15,883

Other long term liabilities

(1,781)

(1,781)

(1,781)

Non-controlling interest

373

373

373

Accumulated other comprehensive loss

(213)

(213)

(213)

Dividend in kind

(17,737)

(17,737)

(17,737)

$                   –

$     (1,870)

$                   –

$     (1,870)

$     (1,870)

(c)

Non-cash investing activity:

Purchase of property and equipment

$            156

$           39

$            54

$            (12)

$            48

 

 


ADDITIONAL INFORMATION


U.S. dollars in thousands (except share and per share data)

The following table reconciles the GAAP to non-GAAP operating results:


Six months ended


June 30,


Three months ended


June 30,


Year ended


December 31,


2017


2016


2017


2016


2016


GAAP gross profit


$    19,698


$    15,088


$    10,306


$    7,730


$    31,777

Stock-based compensation expenses

2

4

1

1

6


Non-GAAP gross profit


$    19,700


15,092


$    10,307


7,731


31,783


GAAP operating expenses


$    14,608


$    11,861


$    7,472


$    6,085


$    25,529

Stock-based compensation expenses

215

90

105

35

314

Amortization and impairment of long lived assets

226

195

113

105

473

Other expenses of retirement costs

125

Acquisition related one-time costs

609


Non-GAAP operating expenses


$    14,042


$    11,576


$    7,254


$    5,945


$    24,133


GAAP operating income


$    5,090


$    3,227


$    2,834


$    1,645


$     6,248


Non-GAAP operating income


$    5,658


$    3,516


$    3,053


$    1,786


$     7,650


GAAP net income from continuing operations


$    3,533


$    2,134


$    1,966


$    1,044


$     3,348

Stock-based compensation expenses

217

94

106

36

320

Amortization and impairment of long lived assets

226

195

113

105

473

Other expenses of retirement costs

125

Non cash tax expenses

801

854

415

276

1,723

Acquisition related one-time costs

609


Non-GAAP net income from continuing operations


$    4,902


$    3,277


$    2,600


$    1,461


$     6,473


Income (loss) from discontinued operation




154




(168)


154

Non cash tax expenses

249

91

249

Spin-off related expenses and losses

349

349

349

Amortization and impairment of long lived assets

67

28

67


Non-GAAP net income


$    4,902


$    4,096


$    2,600


$    1,761


$     7,292

Non-GAAP net income per share from continuing
  operations – Diluted

 

$      0.61

 

$      0.41

 

$      0.32

 

$      0.18

 

$      0.82

Non-GAAP weighted average number of shares
  – Diluted*

 

8,070,953

 

7,924,421

 

8,111,119

 

7,934,321

7,938,290

 

* In calculating diluted non-GAAP net income per share, the diluted weighted average number of shares outstanding excludes the effects of stock-based compensation expenses in accordance with FASB ASC 718.

 

 


EBITDA


U.S. dollars in thousands


Six months ended



June 30,


Three months ended



June 30,


Year ended



December 31,


2017


2016


2017


2016


2016

GAAP Net income from continuing operations
  as reported:


$   3,533


$   2,134

 


$   1,966

 


$   1,044


$   3,348

Financial expenses, net

419

243

259

323

1,046

Tax on income

1,138

854

609

276

1,845

Depreciation, amortization and impairment of
goodwill and  intangible assets

1,451

1,109

 

601

 

591

2,590


EBITDA from continuing operations


$  6,541


$   4,340


$  3,435


$   2,234


$   8,829


Income (loss) from  discontinued operation




154




(168)


154

Financial expenses , net

47

28

47

Tax on income

249

91

249

Depreciation, amortization and impairment of goodwill and  intangible assets

668

 

288

668


EBITDA


$  6,541


$  5,458


$  3,435


$  2,473


$  9,947

 

 

Contact:
Yaniv Dorani, CFO
Tel.: +972-3-572 3111
E-mail: yanivd@pointer.com

Gavriel Frohwein/Ehud Helft, GK Investor Relations
Tel: +1-646-688-3559
E-mail: pointer@gkir.com

View original content:http://www.prnewswire.com/news-releases/pointer-telocation-reports-second-quarter-2017-financial-results-300505162.html

SOURCE Pointer Telocation Ltd

Jupai Reports Second Quarter 2017 Results

Jupai Reports Second Quarter 2017 Results

PR Newswire

SHANGHAI, Aug. 16, 2017 /PRNewswire/ — Jupai Holdings Limited (“Jupai” or the “Company”) (NYSE: JP), a leading third-party wealth management service provider, focusing on distributing wealth management products and providing quality product advisory services to high-net-worth individuals in China, today announced its unaudited financial results for the second quarter and six months ended June 30, 2017.

Effective July 1, 2016, Jupai changed its reporting currency from the U.S. dollars to Renminbi. The aligning of the reporting currency with the underlying operations better reflects the Company’s results of operations for each period, and reduces the impact that the increased volatility of the Renminbi to U.S. dollars exchange rate will have on the Company’s reported operating results. In this announcement, the unaudited financial results for the second quarter and six months ended June 30, 2017, respectively, are stated in Renminbi. This release contains translations of certain Renminbi amounts into U.S. dollars for convenience. Prior period financial results have been recast into the new reporting currency.

SECOND QUARTER AND FIRST HALF 2017 FINANCIAL HIGHLIGHTS

  • Net revenues in the second quarter of 2017 were RMB436.6 million (US$[1]64.4 million), a 78.4% increase from RMB244.7 million for the corresponding period in 2016. For the first half of 2017, net revenues were RMB805.4 million (US$118.8 million), an increase of 71.8% from RMB468.7 million for the same period in 2016.


[1] The U.S. dollars (US$) amounts disclosed in this press release, except for those transaction amounts that were actually settled in U.S. dollars, are presented solely for the convenience of the reader. The conversion of Renminbi (RMB) into U.S. dollars (US$) in this press release is based on the noon buying rate on June 30, 2017, as set forth in the H.10 statistical release of the Board of Governors of the Federal Reserve System, which was RMB6.7793 to US$1.00. The percentages stated in this press release are calculated based on the Renminbi amounts.

 


(RMB ‘000, except percentages)


Q2 2016


Q2 2016 %


Q2 2017


Q2 2017 %


YoY Change %

One-time commissions

148,894

60.7%

230,010

52.7%

54.5%

Recurring management fees

62,030

25.5%

93,906

21.5%

51.4%

Recurring service fees

33,807

13.8%

33,317

7.6%

-1.4%

Other service fees

79,387

18.2%

100.0%


Total net revenues

244,731

100.0%

436,620

100.0%

78.4%

 


(RMB ‘000, except percentages)


H1 2016


H1 2016 %


H1 2017


H1 2017 %


YoY Change %

One-time commissions

303,867

64.9%

464,768

57.7%

53.0%

Recurring management fees

98,662

21.0%

161,524

20.1%

63.7%

Recurring service fees

66,211

14.1%

59,542

7.4%

-10.1%

Other service fees

119,527

14.8%

100.0%


Total net revenues

468,740

100.0%

805,361

100.0%

71.8%

  • Income from operations in the second quarter of 2017 was RMB166.1 million (US$24.5 million), a 205.8% increase from RMB54.3 million for the corresponding period in 2016. For the first half of 2017, income from operations was RMB291.3 million (US$43.0 million), an increase of 240.1% from RMB85.7 million for the same period in 2016.
  • Net income attributable to ordinary shareholders in the second quarter of 2017 was RMB112.5 million (US$16.6 million), a 181.4% increase from RMB40.0 million for the corresponding period in 2016. For the first half of 2017, net income attributable to ordinary shareholders was RMB203.2 million (US$30.0 million), an increase of 205.7% from RMB66.5 million for the same period in 2016.
  • Non-GAAP[2] net income attributable to ordinary shareholders in the second quarter of 2017 was RMB125.5 million (US$18.5 million), a 158.4% increase from RMB48.6 million for the corresponding period in 2016. For the first half of 2017, non-GAAP net income attributable to ordinary shareholders was RMB226.7 million (US$33.4 million), an increase of 171.7% from RMB83.4 million for the same period in 2016.


[2] Jupai’s non-GAAP financial measures are derived from adjusting the corresponding GAAP financial measures by excluding the effects of share-based compensation and amortization of intangible assets resulted from business acquisitions.

SECOND QUARTER AND FIRST HALF 2017 OPERATIONAL UPDATES 

  • Total number of active clients[3] during the second quarter of 2017 was 3,698.
  • The aggregate value of wealth management products distributedby the Company during the second quarter of 2017 was RMB12.3 billion (US$1.8 billion), a 50.9% increase from the corresponding period in 2016. For the first half of 2017, the aggregate value of wealth management products distributed by the Company was RMB26.5 billion (US$3.9 billion), a 39.6% increase from the corresponding period in 2016.


[3] “Active clients” for a given period refers to clients who purchase wealth management products distributed by Jupai at least once during that given period.

 


Wealth management products distributed by the Company – breakdown by product type


Three months ended


Six months ended


June 30, 2016


June 30, 2017


June 30, 2016


June 30, 2017


Product type


(RMB in millions, except percentages)


(RMB in millions, except percentages)

Fixed income products

4,778

59%

10,278

83%

9,981

53%

21,495

81%

Private equity products

2,201

27%

1,601

13%

6,260

33%

3,934

15%

Secondary market equity fund products

841

10%

72

1%

2,103

11%

92

0%

Other products

338

4%

362

3%

646

3%

990

4%


All products

8,158

100%

12,313

100%

18,990

100%

26,511

100%

  • Jupai’s coverage network as of June 30, 2017 included 76 client centers covering 47 cities, up from 61 client centers covering 36 cities, as of June 30, 2016.
  • Total assets under management[4] as of June 30, 2017 were RMB48.0 billion (US$7.1 billion), a 11.3% increase from March 31, 2017 and a 85.6% increase from June 30, 2016.


[4] “Assets under management” by Jupai refers to the amount of capital contributions made by the investors to the fund without adjustment for any gain or loss from investment.

 


Assets under management – breakdown by product type


As of


June 30, 2016


June 30, 2017


Product type


(RMB in millions, except percentages)

Fixed income products

10,943

42%

26,573

56%

Private equity products

12,818

50%

18,432

38%

Secondary market equity fund products

1,366

5%

2,483

5%

Other products

711

3%

473

1%


All products

25,838

100%

47,961

100%

 

“We concluded the first half of 2017 with impressive growth on both our top and bottom lines,” said Mr. Jianda Ni, Jupai’s chairman of the board and chief executive officer. “Jupai’s net revenues for the first half of 2017 totaled RMB805.4 million, up 71.8% year-on-year, and our net income attributable to ordinary shareholders rose significantly by 205.7% year-on-year to RMB203.2 million, reaching almost the same level as our net income attributable to ordinary shareholders for the full year 2016.”

“As investors’ appetite for risk remained conservative in the first half of 2017, we further enhanced Jupai’s competitive advantages within the fixed-income product category. Jupai continues to provide our customers with superior fixed-income products with underlying assets in real estate, leveraging our core competence in products related to the real estate industry. We have also steadily expanded our offerings into non-real-estate fixed-income products to fulfill a wider range of client needs. In the first half of 2017, the aggregate value of products distributed by Jupai grew to RMB26.5 billion, a 39.6% increase year-on-year, and total assets under management increased to RMB48.0 billion as of June 30, 2017, an 85.6% increase year-on-year.”

“Looking forward, Jupai expects to continue to develop new products and services, expand and strengthen our sales network, and increase our operating efficiency. While we believe the size of the market in China is large enough to support Jupai’s growth, we will carefully evaluate potential overseas expansion opportunities. As we build Jupai into the leading wealth and asset management brand in China, the management will continue to explore ways to further enhance long-term value for our shareholders.”

Ms. Min Liu, Jupai’s chief financial officer, said, “Jupai continued to deliver strong results in the second quarter of 2017, with our net revenues substantially surpassing management guidance to achieve another record high. Our operating margin for the quarter rose substantially to 38.0%, up from 22.3% in the same period last year, thanks to the cost control measures which we initiated in the beginning of 2016 and the optimization of our product mix. As we further expand our business scale and enhance our operating efficiency, we remain confident in our ability to grow the bottom line while maintaining healthy margins in the long-term.”

SECOND QUARTER AND FIRST HALF 2017 FINANCIAL RESULTS

Net Revenues

Net revenues for the second quarter of 2017 were RMB436.6 million (US$64.4 million), a 78.4% increase from RMB244.7 million for the corresponding period in 2016, primarily due to increases in one-time commissions, recurring management fees and other service fees. Net revenues were RMB805.4 million (US$118.8 million) for the first half of 2017, an increase of 71.8% from RMB468.7 million for the same period in 2016.

  • Net revenues from one-time commissions for the second quarter of 2017 were RMB230.0 million (US$33.9 million), a 54.5% increase from RMB148.9 million for the corresponding period in 2016, primarily as a result of an increase in the aggregate value of wealth management products distributed by the Company. For the first half of 2017, net revenues from one-time commissions were RMB464.8 million (US$68.6 million), an increase of 53.0% from RMB303.9 million for the same period in 2016.
  • Net revenues from recurring management fees for the second quarter of 2017 were RMB93.9 million (US$13.9 million), a 51.4% increase from RMB62.0 million for the corresponding period in 2016, primarily attributable to an increase in the value of assets under management. The Company recognized RMB21.8 million (US$3.2 million) and RMB1.6 million carried interest in the second quarter of 2017 and 2016, respectively. For the first half of 2017, net revenues from recurring management fees were RMB161.5 million (US$23.8 million), a 63.7% increase from RMB98.7 million for the same period in 2016. RMB23.5 million (US$3.5 million) and RMB5.1 million carried interest was recognized as part of Jupai’s recurring management fees for the first half of 2017 and the same period in 2016, respectively.
  • Net revenues from recurring service fees for the second quarter of 2017 were RMB33.3 million (US$4.9 million), a 1.4% decrease from RMB33.8 million for the corresponding period in 2016. The Company recognized RMB11.4 million (US$1.7 million) and RMB3.8 million variable performance fees in the second quarter of 2017 and 2016, respectively. For the first half of 2017, net revenues from recurring service fees were RMB59.5 million (US$8.8 million), a 10.1% decrease from RMB66.2 million for the same period in 2016, primarily because the Company provided ongoing services to fewer product suppliers. The Company recognized RMB12.8 million (US$1.9 million) and RMB7.7 million variable performance fees for the first half of 2017 and the same period in 2016, respectively.
  • Net revenues from other service fees were RMB79.4 million (US$11.7 million) for the second quarter of 2017 and RMB119.5 million (US$17.6 million) for the first half of 2017, which mainly included sub-advisory fees collected from other companies.

Operating Costs and Expenses

Operating costs and expenses for the second quarter of 2017 were RMB270.5 million (US$39.9 million), an increase of 42.1% from RMB190.4 million for the corresponding period in 2016. For the first half of 2017, operating costs and expenses were RMB514.0 million (US$75.8 million), an increase of 34.2% from RMB383.1 million for the same period in 2016.

  • Cost of revenues for the second quarter of 2017 was RMB162.0 million (US$23.9 million), a 63.0% increase from RMB99.4 million for the corresponding period in 2016, primarily due to increases in the number of wealth management advisors and client managers and their average compensation. For the first half of 2017, cost of revenues was RMB296.7 million (US$43.8 million), an increase of 40.7% from RMB210.9 million for the same period in 2016.
  • Selling expenses for the second quarter of 2017 were RMB65.4 million (US$9.6 million), a 25.9% increase from RMB51.9 million for the corresponding period in 2016, primarily due to increases in marketing, advertising and brand promotion expenses. For the first half of 2017, selling expenses were RMB124.9 million (US$18.4 million), an increase of 19.7% from RMB104.3 million for the same period in 2016.
  • G&A expenses for the second quarter of 2017 were RMB45.1 million (US$6.7 million), a 15.0% increase from RMB39.2 million for the corresponding period in 2016, mainly due to increases in both the numbers of managerial and administrative personnel and their average compensation as well as increases in rental and office supply expenses. For the first half of 2017, G&A expenses were RMB97.7 million (US$14.4 million), an increase of 37.4% from RMB71.1 million for the same period in 2016.
  • Other operating income (government subsidies) received by the Company in the second quarter of 2017 was RMB1.9 million (US$0.3 million), a 1722.8% increase from RMB0.1 million for the corresponding period in 2016. For the first half of 2017, other operating income was RMB5.3 million (US$0.8 million), an increase of 64.0% from RMB3.3 million for the same period in 2016. Government subsidies were recorded when received and their availability and amount depend on government administrative policies.

Operating margin for the second quarter of 2017 was 38.0%, compared to 22.3% for the corresponding period in 2016. For the first half of 2017, operating margin was 36.2%, compared to 18.3% for the same period in 2016.

Income tax expenses for the second quarter of 2017 were RMB44.7 million (US$6.6 million), a 188.8% increase from RMB15.5 million for the corresponding period in 2016. For the first half of 2017, income tax expenses were RMB74.3 million (US$11.0 million), an increase of 206.4% from RMB24.3 million for the same period in 2016. The increase was primarily due to an increase in taxable income.

Net Income


Net Income

  • Net income attributable to ordinary shareholders for the second quarter of 2017 was RMB112.5 million (US$16.6 million), a 181.4% increase from RMB40.0 million for the corresponding period in 2016. For the first half of 2017, net income attributable to ordinary shareholders was RMB203.2 million (US$30.0 million), an increase of 205.7% from RMB66.5 million for the same period in 2016.
  • Net margin attributable to ordinary shareholders for the second quarter of 2017 was 25.8%, as compared to 16.4% for the corresponding period in 2016. For the first half of 2017, net margin attributable to ordinary shareholders was 25.2%, compared to 14.2% for the same period in 2016.
  • Net income attributable to ordinary shareholders per basic and diluted American depositary share (“ADS”) for the second quarter of 2017 was RMB3.47(US$0.51) and RMB3.33 (US$0.49), respectively, as compared to RMB1.25 and RMB1.19, respectively, for the corresponding period in 2016. For the first half of 2017, net income attributable to ordinary shareholders per basic and diluted ADS was RMB6.28 (US$0.93) and RMB6.02 (US$0.89), respectively, as compared to RMB2.08 and RMB1.99, respectively, for the same period in 2016.


Non-GAAP Net Income

  • Non-GAAP net income attributable to ordinary shareholders for the second quarter of 2017 was RMB125.5 million (US$18.5 million), a 158.4% increase from RMB48.6 million for the corresponding period in 2016. For the first half of 2017, non-GAAP net income attributable to ordinary shareholders was RMB226.7 million (US$33.4 million), a 171.7% increase from RMB83.4 million for the same period in 2016.
  • Non-GAAP net margin attributable to ordinary shareholders for the second quarter of 2017 was 28.7%, as compared to 19.9% for the corresponding period in 2016. For the first half of 2017, non-GAAP net margin attributable to ordinary shareholders was 28.1%, as compared to 17.8% for the same period in 2016.
  • Non-GAAP net income attributable to ordinary shareholders per diluted ADS for the second quarter of 2017 was RMB3.72(US$0.55), as compared to RMB1.45 for the corresponding period in 2016. For the first half of 2017, non-GAAP net income attributable to ordinary shareholders per diluted ADS was RMB6.72 (US$0.99), as compared to RMB2.50 for the same period in 2016.


Balance Sheet and Cash Flow

As of June 30, 2017, the Company had RMB1,169.1 million (US$172.4 million) in cash and cash equivalents, compared to RMB1,123.2 million as of December 31, 2016.

Net cash provided by operating activities during the second quarter of 2017 was RMB61.0 million (US$9.0 million). For the first half of 2017, net cash provided by operating activities was RMB281.4 million (US$41.5 million).

Net cash used in investing activities during the second quarter of 2017 was RMB95.8 million (US$14.1 million). For the first half of 2017, net cash used in investing activities was RMB110.4 million (US$16.3 million).

Net cash used in financing activities during the second quarter of 2017 was RMB5.1 million (US$0.7 million). For the first half of 2017, net cash used in financing activities was RMB125.1 million (US$18.4 million).

BUSINESS OUTLOOK

The Company estimates that its net revenues for the third quarter of 2017 will be in the range of RMB420 million to RMB440 million, an increase of 31.1% to 37.3% compared to the same period in 2016. This forecast reflects the Company’s current and preliminary view, which is subject to change.

CONFERENCE CALL

Jupai’s management will host an earnings conference call on August 16, 2017 at 8:00 a.m. U.S. Eastern Time (8:00 p.m. Beijing/Hong Kong time).

Dial-in details for the earnings conference call are as follows:

U.S./International:

 +1-866-564-2842 or +1-323-794-2094

Hong Kong:

 800-961-105 or +852-3008-1527

Mainland China:

 400-120-9221 or 800-820-6061

Singapore

800-186-5085 or +65-6320-9075

Passcode:

8747228

Please dial in 10 minutes before the call is scheduled to begin and provide the passcode to join the call.

A replay of the conference call may be accessed by phone at the following numbers until August 23, 2017:

U.S./International:

+1-719-457-0820

Hong Kong:

800-901-108

Mainland China:

400-120-1651

Singapore

800-101-2009

Passcode:

8747228

Additionally, a live and archived webcast will be available at http://jupai.investorroom.com.

DISCUSSION OF NON-GAAP FINANCIAL MEASURES

In addition to disclosing financial results prepared in accordance with U.S. GAAP, the Company’s earnings release contains non-GAAP financial measures that exclude the effects of all forms of share-based compensation and amortization of intangible assets related to acquisition. The reconciliation of these non-GAAP financial measures to the nearest GAAP measures as set forth in the table captioned “Reconciliation of GAAP to Non-GAAP Results” below.

The non-GAAP financial measures disclosed by the Company should not be considered a substitute for financial measures prepared in accordance with U.S. GAAP. The financial results reported in accordance with U.S. GAAP and reconciliation of GAAP to non-GAAP results should be carefully evaluated. The non-GAAP financial measure used by the Company may be prepared differently from, and therefore may not be comparable to, similarly titled measures used by other companies.

When evaluating the Company’s operating performance in the periods presented, management reviewed non-GAAP net income results reflecting adjustments to exclude the impacts of share-based compensation and amortization of intangible assets related to acquisition to supplement U.S. GAAP financial data. As such, the Company believes that the presentation of the non-GAAP net income attributable to ordinary shareholders, non-GAAP net income attributable to ordinary shares per diluted ADS and non-GAAP net margin attributable to ordinary shareholders provides important supplemental information to investors regarding financial and business trends relating to the Company’s financial condition and results of operations in a manner consistent with that used by management. Pursuant to U.S. GAAP, the Company recognized significant amounts of expenses for the restricted shares and share options, and amortization of intangible assets related to acquisition in the periods presented. The Company utilized the non-GAAP financial results to make financial results comparable period to period and to better understand its historical business operations.

ABOUT JUPAI HOLDINGS LIMITED

Jupai Holdings Limited (“Jupai”) (NYSE: JP) is a leading third-party wealth management service provider focusing on distributing wealth management products and providing quality product advisory services to high-net-worth individuals in China. Jupai’s comprehensive and personalized client service and broad range of carefully selected third-party and self-developed products have made it a trusted brand among its clients. Jupai maintains extensive and targeted coverage of China’s high-net-worth population. 

For more information, please visit http://jupai.investorroom.com.

SAFE HARBOR STATEMENT

This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” “confident” and similar statements. Among other things, the business outlook and quotations from management in this announcement, as well as Jupai’s strategic and operational plans, contain forward-looking statements. Jupai may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about Jupai’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: the goals and strategies of the Company and the Company’s ability to manage its growth and implement its business strategies; future business development, financial condition and results of operations of the Company; condition of the wealth management market in China and internationally; the demand for and market acceptance of the products the Company distributes; the Company’s ability to maintain and further grow its active high-net-worth client base and maintain or increase the amount of investment by clients; developments in relevant government policies and regulations relating to the Company’s industry and the Company’s ability to comply with those policies and regulations; the Company’s ability to attract and retain quality employees; the Company’s ability to adapt to potential uncertainties in China’s real estate industry and stay abreast of market trends and technological advances; the results of the Company’s investments in research and development to enhance its product choices and service offerings; general economic and business conditions in China; the Company’s ability to protect its reputation and enhance its brand recognition. Further information regarding these and other risks is included in Jupai’s filings with the U.S. Securities and Exchange Commission. All information provided in this press release and in the attachments is as of the date of this press release, and Jupai does not undertake any obligation to update any such information, including forward-looking statements, as a result of new information, future events or otherwise, except as required under applicable law.

Contacts:
Jupai Holdings Limited
Harry He
Director of Investor Relations
Jupai Holdings Limited
Phone: +86 (21) 6026 9129
Email: ir@jpinvestment.cn

Philip Lisio
The Foote Group
Phone: +86 (10) 8429 9544
Email: Jupai-IR@thefootegroup.com

 

— FINANCIAL AND OPERATIONAL TABLES FOLLOW —

 


Jupai Holdings Limited


Unaudited Condensed Consolidated Balance Sheets


(In RMB)

As of

December 31,

June 30,

June 30,

2016

2017

2017

RMB

RMB

USD


Assets

Current assets:

Cash and cash equivalents

1,123,166,156

1,169,068,657

172,446,810

Short-term investments

25,210,000

72,451,600

10,687,180

Accounts receivable

52,111,944

96,490,039

14,233,039

Other receivables

71,064,287

30,337,591

4,475,033

Amounts due from related parties

133,560,483

181,515,727

26,774,995

Deferred tax assets — current[5]

55,791,373

Investments at cost method — current

10,000,000

1,475,078

Other current assets

12,551,186

14,940,628

2,203,860

Total current assets

1,473,455,429

1,574,804,242

232,295,995

Investments at cost method — non-current

70,450,000

63,450,000

9,359,373

Investment in affiliates

85,830,444

86,271,147

12,725,672

Advanced payment for acquisition

77,560,000

77,691,490

11,460,105

Property and equipment, net

37,199,812

41,086,418

6,060,569

Intangible assets

83,072,545

81,236,772

11,983,062

Goodwill

277,752,765

271,239,455

40,009,950

Long-term prepayment

6,261,152

10,157,753

1,498,349

Other non-current assets

7,977,534

23,506,741

3,467,429

Deferred tax assets — non-current

8,494,738

64,286,111

9,482,707


Total Assets

2,128,054,419

2,293,730,129

338,343,211


Liabilities and Equity

Current liabilities:

Accrued payroll and welfare expenses

101,864,007

90,708,260

13,380,181

Income tax payable

138,131,812

176,758,644

26,073,288

Other tax payable

58,189,283

63,089,454

9,306,190

Dividend payable

10,160,503

Amounts due to related parties-current

6,118,678

5,765,307

850,428

Deferred revenue from related parties

121,644,250

162,096,649

23,910,529

Deferred revenues

36,432,195

28,349,494

4,181,773

Other current liabilities

10,397,008

11,936,250

1,760,691

Total current liabilities

482,937,736

538,704,058

79,463,080

Deferred revenue — non-current from related parties

75,413,617

84,094,477

12,404,596

Deferred revenue — non-current

5,677,905

5,357,869

790,328

Non-current uncertain tax position liabilities

5,938,816

Deferred tax liabilities— non-current

9,815,595

7,238,047

1,067,669


Total Liabilities

579,783,669

635,394,451

93,725,673


Equity

1,548,270,750

1,658,335,678

244,617,538


Total Liabilities and Total Shareholders’ Equity

2,128,054,419

2,293,730,129

338,343,211


[5] Jupai adopted ASU 2015-17 and therefore, deferred tax assets and liabilities are classified as non-current assets and liabilities starting 2017. Prior balances were not retrospectively adjusted.

 

 





Jupai Holdings Limited



Unaudited Condensed Consolidated Income Statements



(In RMB, except for ADS data and percentages)

Three months ended

June 30,

June 30,

June 30,

YoY

2016

2017

2017

Change %

RMB

RMB

USD


Revenues

Third party revenues

69,913,612

181,615,717

26,789,745

159.8%

Related party revenues

172,039,634

256,327,796

37,810,363

49.0%

Total revenues

241,953,246

437,943,513

64,600,108

81.0%

Business taxes and related surcharges

2,777,431

(1,323,349)

(195,204)

-147.6%


Net revenues

244,730,677

436,620,164

64,404,904

78.4%

Operating costs and expenses:

Cost of revenues

(99,371,220)

(161,980,682)

(23,893,423)

63.0%

Selling expenses

(51,917,514)

(65,363,762)

(9,641,668)

25.9%

General and administrative expenses

(39,243,812)

(45,122,521)

(6,655,926)

15.0%

Other operating income — government subsidies

106,027

1,932,631

285,078

1722.8%

Total operating cost and expenses

(190,426,519)

(270,534,334)

(39,905,939)

42.1%


Income from operations

54,304,158

166,085,830

24,498,965

205.8%

Interest income

2,062,097

1,005,019

148,248

-51.3%

Investment income

3,386,143

2,886,193

425,736

-14.8%

Net other loss

(98,076)

(1,761,304)

(259,806)

1695.9%

Total other income

5,350,164

2,129,908

314,178

-60.2%

Income before taxes and income from equity in affiliates

59,654,322

168,215,738

24,813,143

182.0%

Income tax expense

(15,479,756)

(44,703,075)

(6,594,055)

188.8%

Income from equity in affiliates

321,060

1,829,772

269,906

469.9%


Net income

44,495,626

125,342,435

18,488,994

181.7%

Less: Net income attributable to non-controlling interests

(4,526,215)

(12,880,046)

(1,899,908)

184.6%


Net income attributable to ordinary shareholders

39,969,411

112,462,389

16,589,086

181.4%

Net income per ADS:

Basic

1.25

3.47

0.51

177.6%

Diluted

1.19

3.33

0.49

179.8%

Weighted average number of ADSs used in computation:

Basic

32,055,180

32,366,756

32,366,756

1.0%

Diluted

33,480,400

33,754,351

33,754,351

0.8%

 

 




Jupai Holdings Limited


Unaudited Condensed Consolidated Income Statements


(In RMB, except for ADS data and percentages)

Six months ended

June 30,

June 30,

June 30,

YoY

2016

2017

2017

Change %

RMB

RMB

USD


Revenues

Third party revenues

155,831,925

283,489,110

41,816,870

81.9%

Related party revenues

312,759,083

525,169,327

77,466,601

67.9%

Total revenues

468,591,008

808,658,437

119,283,471

72.6%

Business taxes and related surcharges

149,174

(3,297,893)

(486,465)

-2310.8%


Net revenues

468,740,182

805,360,544

118,797,006

71.8%

Operating costs and expenses:

Cost of revenues

(210,864,251)

(296,733,214)

(43,770,480)

40.7%

Selling expenses

(104,332,330)

(124,882,852)

(18,421,201)

19.7%

General and administrative expenses

(71,127,291)

(97,744,401)

(14,418,067)

37.4%

Other operating income — government subsidies

3,257,489

5,340,843

787,816

64.0%

Total operating cost and expenses

(383,066,383)

(514,019,624)

(75,821,932)

34.2%


Income from operations

85,673,799

291,340,920

42,975,074

240.1%

Interest income

2,770,252

8,508,428

1,255,060

207.1%

Investment income

6,545,935

4,927,992

726,918

-24.7%

Net other income (loss)

200,377

(1,738,081)

(256,381)

-967.4%

Total other income

9,516,564

11,698,339

1,725,597

22.9%

Income before taxes and income from equity in affiliates

95,190,363

303,039,259

44,700,671

218.4%

Income tax expense

(24,262,042)

(74,338,103)

(10,965,454)

206.4%

Income (loss) from equity in affiliates

67,599

(3,887,071)

(573,374)

-5850.2%


Net income

70,995,920

224,814,085

33,161,843

216.7%

Less: Net income attributable to non-controlling interests

(4,533,625)

(21,658,803)

(3,194,843)

377.7%


Net income attributable to ordinary shareholders

66,462,295

203,155,282

29,967,000

205.7%

Net income per ADS:

Basic

2.08

6.28

0.93

201.9%

Diluted

1.99

6.02

0.89

202.5%

Weighted average number of ADSs used in computation:

Basic

31,998,559

32,335,540

32,335,540

1.1%

Diluted

33,422,940

33,746,769

33,746,769

1.0%

 

 


Jupai Holdings Limited


Unaudited Condensed Comprehensive Income Statements


(In RMB)

Three months ended

June 30,

June 30,

June 30,

Change

2016

2017

2017

RMB

RMB

USD


Net income

44,495,626

125,342,435

18,488,994

181.7%

Other comprehensive income, net of tax:

Change in cumulative foreign currency translation adjustment

15,960,956

(10,039,828)

(1,480,954)

-162.9%

Other comprehensive income

15,960,956

(10,039,828)

(1,480,954)

-162.9%

Comprehensive income

60,456,582

115,302,607

17,008,040

90.7%

Less: Comprehensive income attributable to non-controlling interests

4,526,215

12,880,046

1,899,908

184.6%


Comprehensive income attributable to ordinary shareholders

55,930,367

102,422,561

15,108,132

83.1%

 

 


Jupai Holdings Limited


Unaudited Condensed Comprehensive Income Statements


(In RMB)

Six months ended

June 30,

June 30,

June 30,

Change

2016

2017

2017

RMB

RMB

USD


Net income

70,995,920

224,814,085

33,161,843

216.7%

Other comprehensive income, net of tax:

Change in cumulative foreign currency translation adjustment

12,053,493

(16,226,292)

(2,393,506)

-234.6%

Other comprehensive income

12,053,493

(16,226,292)

(2,393,506)

-234.6%

Comprehensive income

83,049,413

208,587,793

30,768,337

151.2%

Less: Comprehensive income attributable to non-controlling interests

4,533,625

21,658,803

3,194,843

377.7%


Comprehensive income attributable to ordinary shareholders

78,515,788

186,928,990

27,573,494

138.1%

 

 


Jupai Holdings Limited


Reconciliation of GAAP to Non-GAAP Results


(In RMB, except for ADS data and percentages)

Three months ended

June 30,

June 30,

Change

2016

2017

RMB

RMB


Net margin
attributable to ordinary shareholders

16.4%

25.8%

Adjusted net margin attributable to ordinary shareholders (non-GAAP)

19.9%

28.7%

Net income attributable to ordinary shareholders

39,969,411

112,462,389

181.4%

Adjustment for share-based compensation

5,133,761

9,500,023

85.0%

Adjustment for amortization of intangible assets related to acquisition

3,455,205

3,530,985

2.2%

Adjusted net income attributable to ordinary shares(non-GAAP)

48,558,377

125,493,397

158.4%

Net income attributable to ordinary shares per ADS, diluted

1.19

3.33

179.8%


Adjusted net income attributable to ordinary shares per ADS, diluted (non-GAAP)

1.45

3.72

156.6%

Weighted average number of ADSs used in computation:

Diluted

33,480,400

33,754,351

0.8%

 

 


Jupai Holdings Limited


Reconciliation of GAAP to Non-GAAP Results


(In RMB, except for ADS data and percentages)

Six months ended

June 30,

June 30,

Change

2016

2017

RMB

RMB


Net margin
attributable to ordinary shareholders

14.2%

25.2%

Adjusted net margin attributable to ordinary shareholders (non-GAAP)

17.8%

28.1%

Net income attributable to ordinary shareholders

66,462,295

203,155,282

205.7%

Adjustment for share-based compensation

10,136,257

16,386,904

61.7%

Adjustment for amortization of intangible assets related to acquisition

6,822,041

7,126,943

4.5%

Adjusted net income attributable to ordinary shares(non-GAAP)

83,420,593

226,669,129

171.7%

Net income attributable to ordinary shares per ADS, diluted

1.99

6.02

202.5%


Adjusted net income attributable to ordinary shares per ADS, diluted (non-GAAP)

2.50

6.72

168.8%

Weighted average number of ADSs used in computation:

Diluted

33,422,940

33,746,769

1.0%

 

View original content:http://www.prnewswire.com/news-releases/jupai-reports-second-quarter-2017-results-300505146.html

SOURCE Jupai Holdings Limited