SGOCO Group, Ltd. Announces 2017 Unaudited Interim Financial Results

HONG KONG, Dec. 2, 2017 /PRNewswire/ -- SGOCO Group, Ltd. (Nasdaq: SGOC) ("SGOCO" or the "Company"), a company focused on product design, distribution and brand development in the Chinese display, computer and virtual reality ("VR") product markets, as well as energy saving products and services, today announced its unaudited operating results for the six months ended June 30, 2017.

2017 Interim Results Overview

Interim revenues decreased 99.6% to $0.02 million for the first six months of this year (the "1H 2017"), as compared to $4.7 million for the first six months of 2016.

Gross profit decreased by 98.9% to $0.01 million in the 1H 2017, from $0.2 million for the same period in 2016.

Net loss for the 1H 2017 was $2.4 million, compared to net loss of $2.7 million during the same period in 2016.

Basic and diluted loss per share was $0.24 for the 1H 2017, as compared to $0.42 loss per share in the same period in 2016.

Revenue

Our total revenues decreased by 99.6% to $0.02 million for the 1H 2017, as compared to $4.7 million for the first six months of 2016.

Cost of Goods Sold

Cost of goods sold decreased by 99.7% to $0.02 million in the 1H of 2017 from $4.5 million in the same period of 2016. The decrease was consistent with the decrease in revenue.

Gross margin

In 1H 2017, the gross profit of the Company decreased by 98.9% to $0.01 million from $0.2 million in the same period of 2016. The overall gross margin for the 1H 2017 was 11.8%, as compared with 4.0% during the same period of 2016.

Operating loss and expenses

The Company recorded a $2.9 million operating loss in the 1H 2017, as compared to an operating loss of $1.3 million in the first six months of 2016. Operating expenses in the 1H 2017 increased by 99.5% to $2.9 million, compared to operating expenses of $1.5 million in the first six months of 2016. The increase in general and administrative expenses was mainly due to an increase in employee share-based compensation and amortization of intangible assets of our recently acquired subsidiaries.

Net loss and loss per share

Net loss for the 1H 2017 was $2.4 million, compared to a net loss of $2.7 million for the same period in 2016. Basic and diluted loss per share was $0.24 in the 1H 2017 based on a weighted average number of outstanding ordinary shares of 10,312,893, as compared to basic and diluted loss per share of $0.42 based on a weighted average number of outstanding ordinary shares of 6,476,467 for the first half of 2016.

Cash and working capital

SGOCO held $0.1 million cash and cash equivalents as of June 30, 2017, compared to $0.03 million as of December 31, 2016. Working capital decreased to a negative of $0.8 million as of June 30, 2017 from a negative of $0.7 million as of December 31, 2016.

About SGOCO Group, Ltd.

SGOCO Group, Ltd. is focused on product design, brand development and distribution in the Chinese display, computer and visual reality ("VR") product markets as well as energy saving products and services. SGOCO sells its products and services in the Chinese market and abroad. For more information about SGOCO, please visit our investor relations website:

http://www.sgocogroup.com

For investor and media inquiries, please contact:

SGOCO Group, Ltd.
Tony Zhong
Vice President of Finance
Tel: +852 2386 3328
Email: ir@sgoco.com  

Safe Harbor and Informational Statement

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

View original content:http://www.prnewswire.com/news-releases/sgoco-group-ltd-announces-2017-unaudited-interim-financial-results-300565046.html