Borqs Announces Financial Results for the First Half of 2022; Revenues in 6 Months 2022 Higher than Full Year 2021
- Revenues for the first half 2022 reached $30.1 million, 141% Year-Over-Year (YOY) growth.
- Revenue forecast for 2022 is $50-55 million, YOY growth of over 69%
- Backlog currently stands at $50 million for Holu Hou Energy, LLC (HHE), a majority-owned solar & energy storage system subsidiary.
SANTA CLARA, Calif., Oct. 21, 2022 (GLOBE NEWSWIRE) -- Borqs Technologies, Inc. (NASDAQ:BRQS, "Borqs", or the "Company"))), a global provider of 5G wireless, Internet of Things (IoT) solutions, and innovative clean energy, today announced its financial results for the six months ended June 30, 2022.
Key Financial Results:
- Revenue for the 6 months ended June 30, 2022 increased by 141% to $30.1 million compared to $12.5 million for the 6 months ended June 30, 2021, driven by increased IoT sales globally and revenues of $3.9 million from Holu Hou Energy (HHE), our majority-owned solar & energy storage system subsidiary.
- Gross profit for the 6 months ended June 30, 2022 increased to $4.3 million compared to a gross profit of $1.8 million for the 6 months ended June 30, 2021. Gross margin was 14.2% for the 6 months ended June 30, 2022, flat as compared to the prior year.
- U.S.-headquartered customers contributed 71.1% of total revenue, while Europe represented 14.3%, India represented 13.8% and the balance of the world represented 0.9%.
- Cash balance of $18.4 million
"We are very pleased with the results of the first half and proud of the entire Borqs team who are executing on our business plans, while addressing customers' needs in a challenging macro environment. We forecast the 2022 yearly revenue to be $50-55 million, year-over-year growth of over 69%, compared to revenue of $29.6 million for 2021," stated Pat Chan, CEO of Borqs Technologies. "It has also been exciting to see our Holu Hou Energy subsidiary's progress as it has been completing solar plus energy storage projects during the first half of year in the state of Hawaii. While we continue to grow our IoT business segment, we are also very excited about the outlook of our solar and energy storage business, given the fact that only 4% of the 77 million addressable homes in the U.S. have solar in the wake of higher demand for cleaner energy. By the first half of 2022, we have achieved more than $50M backlog of orders. We anticipate the backlog will continue to grow in the second half of this year."
Chan concluded, "Finally, we applaud the passing of the Inflation Reduction Act which will significantly stimulate the growth within the entire clean energy sector and beyond. Borqs plans to capitalize by providing sustainable and affordable energy to our customers in the U.S. and remains excited about the projects in the pipeline for the second half of the year in both States of Hawaii and California. We are very optimistic about the growth potential both in the U.S. and across world in the years to come."
About Borqs Technologies, Inc.
Borqs Technologies is a global leader in software and products for the IoT, providing customizable, differentiated and scalable Android-based smart connected devices and cloud service solutions. Borqs has achieved leadership and customer recognition as an innovative end-to-end IoT solutions provider leveraging its strategic chipset partner relationships as well as its broad software and IP portfolio. Borqs' unique strengths include its Android and Android Wear Licenses which enabled the Company to develop a software IP library covering chipset software, Android enhancements, domain specific usage and system performance optimization, suitable for large and low volume customized products, and is also currently in development of 5G products for phones and hotspots. The Company acquired controlling shares of the solar energy storage system entity, Holu Hou Energy LLC, in October 2021.
About Holu Hou Energy, LLC
Holu Hou Energy, LLC, a Delaware Corporation, brings state-of-the-art renewable energy and energy storage systems to the Single-Family Residential, Multi-Dwelling Unit Residential and Commercial building markets. With operations in California, Hawaii, Wisconsin and Shanghai, HHE engineers proprietary storage system and control platform solutions, including a breakthrough "HHE Energy Share" technology that is key to development of the Multi-Dwelling Unit Residential housing market. HHE is a vital partner for investors and asset owners that are seeking ESG solutions. For more information, visit www.holuhou.com.
To view a video clip of a recently completed HHE Multi-Unit Residential project go to: https://www.youtube.com/watch?v=kakbynGM-fQ
Forward-Looking Statements and Additional Information
This press release includes "forward-looking statements" that involve risks and uncertainties that could cause actual results to differ materially from what is expected. Words such as "forecasts", "expects", "believes", "anticipates", "intends", "estimates", "predicts", "seeks", "may", "might", "plan", "possible", "should", "estimates" and variations and similar words and expressions are intended to identify such forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Such forward-looking statements relate to future events or future results, based on currently available information and reflect our management's current beliefs. Many factors could cause actual events or results to differ materially from the events and results discussed in the forward-looking statements, including the possibility that the positive financial results from business activities as described herein may not be reached or at all, and the negative impact of the COVID-19 pandemic on the Company's supply chain, revenues and overall results of operations, so the reader is advised to refer to the Risk Factors sections of the Company's filings with the Securities and Exchange Commission for additional information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements. Except as expressly required by applicable securities law, the Company disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.
Investor Contact:
Borqs Technologies, Inc.
[email protected]
www.borqs.com
BORQS TECHNOLOGIES, INC.
UNAUDITED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands of US dollar ("US$"), unless otherwise stated)
| December 31, 2021 | June 30, 2022 | |||||||
| US$ | US$ | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | 7,925 | 18,445 | ||||||
| Accounts receivable | 2,262 | 3,338 | ||||||
| Inventories - net | 7,190 | 6,583 | ||||||
| Prepaid expenses and other current assets, net | 13,833 | 12,052 | ||||||
| Total current assets | 31,210 | 40,418 | ||||||
| Non-current assets: | ||||||||
| Property and equipment, net | 827 | 2,962 | ||||||
| Intangible assets, net | 5,377 | 4,916 | ||||||
| Right of Use Asset | 1,674 | 2,045 | ||||||
| Goodwill | 12,208 | 12,207 | ||||||
| Deferred tax assets | 471 | 440 | ||||||
| Non-current assets | 1,485 | 614 | ||||||
| Total non-current assets | 22,042 | 23,184 | ||||||
| Total assets | 53,252 | 63,602 | ||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | 10,203 | 9,052 | ||||||
| Accrued expenses and other payables | 27,221 | 28,398 | ||||||
| Advances from customers | 8,403 | 8,472 | ||||||
| Lease Liabilities- current | 1,032 | 1,590 | ||||||
| Amount due to related parties-current | 2,512 | 1,552 | ||||||
| Income tax payable | 399 | 150 | ||||||
| Long-term institution borrowings - current portion | 1,250 | - | ||||||
| Short-term borrowings | 1,275 | 1,106 | ||||||
| Other liabilities | 714 | - | ||||||
| Contingent consideration | 1,392 | 1,391 | ||||||
| Convertible notes | 9,990 | 8,423 | ||||||
| Total current liabilities | 64,391 | 60,134 | ||||||
| Non-current liabilities: | ||||||||
| Deferred tax liability | 2,154 | 2,086 | ||||||
| Long-term payable | 661 | 1,283 | ||||||
| Non-current liabilities | 3,332 | 2,549 | ||||||
| Total non-current liabilities | 6,147 | 5,918 | ||||||
| Total liabilities | 70,538 | 66,052 | ||||||
| Commitments and contingencies | ||||||||
| Shareholders' equity | ||||||||
| Ordinary shares | - | - | ||||||
| Additional paid-in capital | 262,271 | 286,056 | ||||||
| Subscription receivables | (15,287 | ) | (18,970 | ) | ||||
| Statutory reserve | 1,901 | 1,901 | ||||||
| Accumulated deficit | (272,131 | ) | (277,397 | ) | ||||
| Total Borqs Technologies, Inc. shareholders' equity | (23,246 | ) | (8,410 | ) | ||||
| Non-controlling interest | 5,960 | 5,960 | ||||||
| Total shareholders' equity | (17,286 | ) | (2,450 | ) | ||||
| Total liabilities and shareholders' equity | 53,252 | 63,602 | ||||||
BORQS TECHNOLOGIES, INC.
UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS
(Amounts in thousands of US dollar ("US$"), unless otherwise stated)
| For the six months ended June 30, | ||||||||
| 2021 | 2022 | |||||||
| US$ | US$ | |||||||
| Net revenues: | ||||||||
| IoT | 12,497 | 26,261 | ||||||
| Software | 5,490 | 5,065 | ||||||
| Hardware | 7,007 | 21,196 | ||||||
| Solar & ESS | - | 3,886 | ||||||
| Total net revenues | 12,497 | 30,147 | ||||||
| Cost of revenues | ||||||||
| IoT | (10,717 | ) | (23,983 | ) | ||||
| Software | (4,216 | ) | (4,453 | ) | ||||
| Hardware | (6,501 | ) | (19,530 | ) | ||||
| Solar & ESS | - | (1,883 | ) | |||||
| Total cost of revenues | (10,717 | ) | (25,866 | ) | ||||
| Total gross (loss) profit | 1,780 | 4,281 | ||||||
| Operating expenses: | ||||||||
| Sales and marketing expenses | (218 | ) | (233 | ) | ||||
| General and administrative expenses | (24,743 | ) | (5,351 | ) | ||||
| Research and development expenses | (3,285 | ) | (2,002 | ) | ||||
| Total operating expenses | (28,246 | ) | (7,586 | ) | ||||
| Operating income (loss) | (26,466 | ) | (3,305 | ) | ||||
| Interest income | 3 | 4 | ||||||
| Interest expense | (2,694 | ) | (927 | ) | ||||
| Other income | 31 | 369 | ||||||
| Other expense | (219 | ) | (1,415 | ) | ||||
| Foreign exchange income (loss) | (222 | ) | 8 | |||||
| Income (loss) from continuing operations, before income taxes | (29,567 | ) | (5,266 | ) | ||||
| Less: Net income (loss) attributable to non-controlling interest | 1 | - | ||||||
| Net income (loss) attributable to Borqs Technologies, Inc. | (29,568 | ) | (5,266 | ) | ||||
| Net income (loss) attributable to ordinary shareholders | (29,568 | ) | (5,266 | ) | ||||
BORQS TECHNOLOGIES, INC.
EBITDA & ADJUSTED EBITDA RECONCILIATION
(Amounts in thousands of US dollar ("US$"), unless otherwise stated)
| For the six months ended June 30, | ||||||||
| 2021 | 2022 | |||||||
| Net income (loss) from continuing operations | (29,567 | ) | (5,266 | ) | ||||
| Interest | (2,691 | ) | (151 | ) | ||||
| Depreciation | (66 | ) | (248 | ) | ||||
| Amortization | (639 | ) | (401 | ) | ||||
| EBITDA | (26,171 | ) | (4,466 | ) | ||||
| Litigation expenses | (76 | ) | (999 | ) | ||||
| Gains or losses on foreign exchange | (222 | ) | 8 | |||||
| Non-operating income or expense | (188 | ) | (930 | ) | ||||
| Share-based compensation or expense | (22,883 | ) | (970 | ) | ||||
| Adjusted EBITDA | (2,802 | ) | (1,575 | ) | ||||
