|SEVEN STARS CLOUD GROUP, INC. filed this Form 8-K on 08/15/2017|
Seven Stars Cloud Reports Q2 2017 Results
· Top line Q2 2017 revenue of $43 Million USD (28x Q2 2016)
· YTD 2017 revenue of $76 Million (27x YTD 2016)
· Company reiterates FY revenue guidance of $300 Million USD
· Company announces 2 new Joint Ventures
· Investor Update Call Today at 4:15 p.m. ET
New York, NY, August 14, 2017 – Seven Stars Cloud Group, Inc. (NASDAQ: SSC) (“SSC” or the “Company”), announced today its Q2 2017 operating results for the period ending June 30, 2017 (a full copy of the Company’s quarterly report on Form 10-Q will also be posted at www.sec.gov).
Conference Call: CEO Bing Yang, Chairman Bruno Wu and CFO Simon Wang will host a conference call at 4:15 p.m. ET today.
To join the webcast, please visit the ‘Webcasts and Events’ section of the SSC corporate website (http://corporate.sevenstarscloud.com/), or call the toll-free dial-in number: 877-407-3107; International callers should dial: 201-493-6796.
SSC Q2 2017 OPERATING RESULTS
Revenue for Q2 was $43.3 million as compared to $1.5 million for the same period in 2016, an increase of approximately $41.8 million, or 28x over the same period last year and up 31% over Q1 2017. The increase was mainly due to SSC’s new business line acquired in January 2017. This was partially offset by a decrease of SSC’s legacy YOD business in the amount of $1.5 million, as the legacy YOD business shifts to a new exclusive distribution agreement with Zhejiang Yanhua, which was announced in Q4 2016. As revenue generated by Yanhua was not yet over the revenue sharing threshold, no additional revenue was recorded in Q2.
Cost of revenue was approximately $43.3 million in Q2, as compared to $0.8 million for the same period in 2016, which is in line with revenue growth. The Wecast Services business, which currently is engaged mostly in lower margin electronics e-commerce and supply chain management, is still in its relative infancy and its business service offerings, as well as profit-sharing arrangements with a growing range of suppliers, are currently in transition and/or being renegotiated.
Selling, general and administrative expense or SG&A for Q2, was $2.9 million as compared to $1.8 million for the same period in 2016, an increase of approximately $1.1 million or 59%. The increase was primarily attributed to the recent business transformation and headcount expansion during the first and second quarter as well as an increase in share-based compensation due to recently vested restricted share units granted to SSC’s management team.
In Q2 2017, the Company terminated one of its office leases in Shanghai, which resulted in an approximate $0.5 million impairment of leasehold improvements. In addition, there was an approximate $0.2 million increase in D&O insurance expenses.