Blue Hat Announces First Quarter 2021 Financial Results, Highlighted by 343% Increase in Revenues to $9.9 Million and 62% Increase in Net Income to $1.2 Million
XIAMEN, China, May 5, 2021 /PRNewswire/ -- Blue Hat Interactive Entertainment Technology ("Blue Hat" or the "Company") (NASDAQ: BHAT), a leading producer, developer and operator of augmented reality ("AR") interactive entertainment games, toys and educational materials in China, today announced its unaudited financial results for the quarter ended March 31, 2021.
First Quarter 2021 Financial Highlights
Mr. Xiaodong Chen, CEO of Blue Hat, stated, "We were pleased with the strong performance across all of our business segments, which resulted in phenomenal top line growth driven by US$5.3 million in contributions from our new IDC business and by a US$2.4 million increase in contributions from mobile games following our acquisition of 51% of Csfctech and its two subsidiaries in January 2021. We achieved 62.0% growth on the bottom line to US$1.2 million during the period and anticipate margins will improve over the course of 2021 as our businesses continue to grow and the expenses normalize from initial highs. We recently announced the official launch of our new AR+ series curriculum, which is an upgrade from our original Augmented Reality Immersive Classes ("ARIC") and has been developed and tested over the past six months. We expect the five urban partnerships that we have signed for the AR+ series curriculum will accelerate the future growth of our AR education business. We are beginning to see tangible results from this development that has strengthened the foundation of our business over the course of the past year, and we anticipate it will provide us with significant long-term growth potential for our product and service offerings."
Recent Operating Highlights
First Quarter 2021 Results
Total revenues were US$9.9 million for the quarter ended March 31, 2021, an increase of US$7.7 million, or 343.1%, compared to US$2.2 million in the first quarter of 2020. The significant revenue growth was primarily attributable to increased contributions from Blue Hat's two recently acquired subsidiaries, Xunpusen in late 2020 and Csfctech in early 2021.
Revenues from sales of interactive toys (game series) were US$1.9 million for the quarter ended March 31, 2021, compared to US$1.7 million in the first quarter of 2020.
Revenues from sales of interactive toys (animation series) were US$0.09 million for the quarter ended March 31, 2021, a significant increase from zero in the first quarer of 2020.
Revenues from mobile games were US$2.4 million for the quarter ended March 31, 2021, an increase of US$1.9 million, or 315.2%, following the closing of the Csfctech acquisition during the period.
Revenues from AR education, previously included under interactive toys (animation series), were US$0.2 million for the quarter ended March 31, 2021. Growth in the AR education business has been primarily driven by the roll-out and implementation of Blue Hat's ARIC system to various schools through 2020 and into 2021.
Revenues from communication services were US$5.37 million for the quarter ended March 31, 2021. The gain was due to the acquisition of Xunpusen in the second half of 2020.
Gross profit was US$4.1 million for the quarter ended March 31, 2021, an increase of 143.8% from US$1.7 million in the first quarter of 2020. Gross margin for the five different business lines were as follows:
Total gross margin was 41.1% for the quarter ended March 31, 2021, compared to 74.6% in the same period last year. The decrease was due to higher initial costs associated with establishing new business lines, such as licensing costs and copyright costs, among others.
Total operating expenses were US$2.3 million for the quarter ended March 31, 2021, which includes expenses from Csfctech and its two subsidiaries, compared to US$0.8 million in the first quarter of 2020.
Income from operations was US$1.7 million for the quarter ended March 31, 2021, compared to US$0.9 million in the first quarter of 2020.
Net income was US$1.2 million, up US$0.57 million, or 62.0%, from US$0.85 million in the first quarter of 2020. The increase was primarily driven by strong revenue growth, which more than offset an increase in operating expenses.
Diluted earnings per share were US$0.024 for the quarter ended March 31, 2021, compared to US$0.022 for the first quarter of 2020. During the first quarter of 2021, the Company completed a registered direct offering with two institutional investors for the purchase and sale of 7.16 million ordinary shares at a price of $1.06 per share, resulting in total gross proceeds of approximately $7.59 million before deducting the placement agent's fees and other offering expenses. The net proceeds is approximately $6.8 million.
Balance Sheet Highlights
As of March 31 2021, Blue Hat had cash and cash equivalents of US$14.7 million, working capital of US$34.6 million and total shareholders' equity of US$75.5 million, compared to cash and cash equivalents of US$15.8 million, working capital of US$34.0 million, and total shareholders' equity of US$58.9 million, respectively, at December 31, 2020.
About Blue Hat
Blue Hat Interactive Entertainment Technology is a producer, developer and operator of AR interactive entertainment games and toys in China, including interactive educational materials, mobile games, and toys with mobile game features. Distinguished by its own proprietary technology, Blue Hat aims to create an engaging, interactive and immersive community for its users. For more information, please visit the Company's investor relations website at http://ir.bluehatgroup.com. The Company routinely provides important information on its website.
This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. All forward-looking statements are inherently uncertain as they are based on current expectations and assumptions concerning future events or future performance of the Company. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. In evaluating such statements, prospective investors should review carefully various risks and uncertainties identified in this release and matters set in the Company's SEC filings. These risks and uncertainties could cause the Company's actual results to differ materially from those indicated in the forward-looking statements.
Blue Hat Interactive Entertainment Technology
The Equity Group Inc.
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