Q4 2021 Remark Holdings Inc Earnings Call

Good day, ladies and gentlemen, and welcome to remark Holdings' fiscal year 2021 financial results conference call.

My name is Kyle a repeatable well brito for today and will handle the Q&A.

As a reminder, this conference is being recorded now I'd like to turn the call over to Brian Harvey. Please go ahead Sir.

Thank you Kyle and good afternoon, and welcome to remark Holdings' fiscal year 2021 financial results Conference call I'm, Brian Harvey Senior Vice President of capital markets and Investor Relations for remark.

On the call with me. This afternoon is Kai Shing, Tao remarks, Chairman and Chief Executive Officer.

And just a moment Mr. Todd will provide an update on our business and I will recap our fiscal year financial results.

Following those remarks, we will open the call to questions.

But before I turn the call over to Mr. Tao I would like to take this opportunity to remind you that some of the statements made today maybe forward looking statements. These statements involve risks uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by these forward.

Forward looking statements.

Any forward looking statements reflect remark holdings' current views and remark holdings expressly disclaims any obligation to update or revise any forward looking statements. After the date hereof.

This disclaimer is only a summary of remark holdings' statutory forward looking statements disclaimer, which is included in full in its filings with the SEC.

I'd now like to.

Turning the call over to remarks, Chairman and Chief Executive Officer, Mr. Tom. So he can provide additional color all remarks business and recent developments.

Thank you Brian .

Fourth quarter 2021 that was another transformative quarter for us in many different ways first we were able to make significant progress with the upcoming launch of our meta versus an S. T platform.

Second despite the zero Covid policy in China, we.

We are not just catching up on the business that's businesses that have reopened but have now expanded deeper into each industry.

Currently involved in and expand horizontally into new ones.

Three off the success of winning our business with bright line by building their AI security platform.

We have not only expanded our efforts into new states and major cities selling the same security platform, but also into the United Kingdom and more specifically into London.

In the fourth quarter, we began putting together a deal to bring the world's most popular music group to Las Vegas and to partner with them and one of the world's largest hospitality conglomerates.

The deal was consummated in February of 2022.

And our take was to have the rights to build the med averse.

And all the experiences surrounding the event.

The response to this event has been overwhelmingly successful.

Any way you look at it it has presented itself to be a great launch point for our remark AI meta versus called Vegas versus.

As we are the first company in the World.

Truly provides both online and offline integrated experience and not just talk about it.

We're very excited for what lies ahead.

To go further into detail on what exactly Vegas versus.

[laughter].

It helps Vegas for subsea connect the offline and online world as we know it and creates a seamless experience for the two to build engagement.

And in particular for Vegas versus plans that we'll be attending the concerts or other live events in the future will be given incentive is to engage the physical properties through augmented reality games.

The players then obtain N F T coupons, which can link together them with offline businesses.

Blocking special coupons for special prices discounts and more.

The Vegas first game checking uses both augmented reality landmark recognition.

And a variety of game methods to bridge the gap between the members and the World Real World.

This will allow the fed to track all the important and popular events that matters to you.

And being able to participate in their favorite stars med diverse stories and be their biggest fan of supporting them in a matter of us.

They will be able to obtain and collect where N. S teams of the stars that they love and.

And even share it on their favorite social platforms.

And finally also be able to jump into the Starz world.

Becoming an important figure in their life and then in one of our many gameplay storylines.

Vegas first puts the power in the fans hands.

And we believe this will be the ultimate technological experience.

Really the biggest fans.

We welcome our investors to enter Vegas first on April 4th this upcoming Monday, and welcome to the future of offender.

This once in a lifetime opportunity to build with one of the world's largest hospitality conglomerates and one of the world's most popular music companies was made possible by the foundation we have built.

Over the last five years with our AI platform.

This foundation will continue to keep.

We'll continue to drive benefits as we will continue to expand this metaverse opportunity too.

Two other live events and global celebrities.

Because of what we have done we are building the meta versus lifestyle shopping opportunity for one of the worlds most popular movie stars.

One of the world's most popular sports stars.

Despite a very strict zero COVID-19 policy in China.

We were able to resume our business in the fourth quarter.

With additional deployments and additional wins.

This strength is growing very well into the first quarter.

While it is not without its difficulties, we are able to adapt and continue to deploy while winning new businesses.

We continue to build and grow our businesses and industries and.

And customers that you have heard in the past.

These industries include Smart campus with schools smart communities and construction companies.

The growth in these industries continue to be strong.

And while the timing continues to be tricky due to the zero Covid policy.

We are adapting and moving fast.

In addition, we have now expanded.

Our remark AD platform into new verticals.

One is creating the first aviation AI focused platform for one of the world's largest airline companies.

This is exciting as you can imagine because based upon the success of our launch we can market. This to other airline companies, especially because the AI platform focuses on safety and power efficiency.

For example, our remark AI aviation platform.

The foundation that all AI applications will be built off of in the future.

These will include engine maintenance fire and smoke detection.

Autonomous driving as it relates to passenger cars and baggage vehicles and bird and drone detection.

Other areas of extension include in the areas of retailing.

Most specifically in food retailer.

We commenced a POC or proof of concept with 30 stores to improve service quality kitchen cleanliness.

<unk> processing safety and customer experiences.

The next step after this 30 store POC is to extend into the first phase of 1500 stores.

The strategy is working well.

As we are seeing a lot of progress of taking these live tests and real contracts in China and bring into the U S.

Having these successes and a multiple of industries industries have allowed us to take these proven platform to other parts of the world.

We have been able to make significant headway into the U S.

Our first success is winning the AI security partnership with bright line.

High speed train going from Miami up to Orlando.

With that we have now increased our efforts to major cities like New York City and Chicago.

In States, like Texas, Nevada, California, Florida, and New Jersey.

A big part of this increased effort is due to the demand we are seeing from both government and private business.

<unk> infrastructure Bill.

The 1.7, Chilean infrastructure Bill that passed.

Once in a lifetime opportunity.

Many of the Rfps and RFID are in.

Ears, where we possess significant expertise.

Know how in real life experience.

This has to do with in the areas of intrusion detection.

And fire and smoke detection.

Our smart city and smart traffic.

We will continue to update you on our progress over the next quarter.

And we're very excited about the things to come.

We will update you as we are close to very promising milestones that we'd be hitting over the course of.

Over the year right.

Thank you Shang.

I'll just go over a few of the highlights from the financials.

Your 'twenty, one revenue grew 58% to $16 million from pinpoint 1 billion in fiscal year 'twenty.

Revenue from trying to grew by 4.3 billion during 2021 to $12 2 million, primarily due to large increases in revenue generated from AI projects in schools.

Certain construction projects.

Revenue increased by $1 5 million in fiscal 2021 the $3 8 million primarily from the completion of an AI data intelligence project project.

Our gross profit improved to $4 5 million from $3 7 million in fiscal 'twenty 'twenty commensurate with the increase in revenue.

We incurred an operating loss of $13 9 million in fiscal 2021 compared to an operating loss of $14 2 million in fiscal 2020.

The primary drivers of the improvement were low where lower sales and marketing expenses.

Costs associated with the bio safety business did not repeat.

However, technology and development expenses increased in conjunction with new product development, but the smart centric product that is expected to be utilized by railway customers.

G&A increases were driven by $3 5 million of share based compensation.

Remark reported net income of 27 5 million or 27 cents per.

Basic and diluted share in fiscal 'twenty, 'twenty, one, which compared favorably to a net loss of $13 7 million or 16 cents per basic and diluted share in fiscal 2020.

The increase primarily resulted from the revaluation of the company's investment in share care.

At December 31, 2021, our cash balance totaled $14 2 million compared to a cash balance of 900000 at December 31 2020.

Proceeds from debt issuances stock issuances stock option exercises and $2 3 billion of proceeds from the share care transaction were offset by cash used in operations and the repayment of certain debts.

With that I will turn the call back to the operator, and we will now open the conference call to questions. We encourage callers with questions to queue up with the operator as soon as possible. So that there will be minimal lag time between each caller.

Could you please instruct the callers how to queue up with their questions.

Certainly, Brian ladies and gentlemen, if you would like to ask a question casino by pressing star one on your telephone keypad.

We are using a speaker phone. Please make sure. Your mute function is turned off to allow you'll seen that to reach our equipment again press star one to ask a question you pause for just a moment to allow everyone an opportunity to signal for questions.

We think our first client.

First question, our first question from.

From.

And our S. Your line is open. Please go ahead.

Hi, Shanghai, Brian I was wondering if you could answer a couple of questions with your revenue breakout for a bright line.

Just looking through the release that you had and I'm not sure if I missed it but I don't necessarily see them a break out.

Our record revenue was that's going to be realized score a bright line.

And how that partnership is and then also I'm just going back to my notes from some previous calls that we've had and I was wondering if there's any update on that laughs construction project that had been highlighted in some of the previous quarters.

No mention of that in the press release and I was wondering if that's still active or if there's any new developments there.

One is high.

Yeah, Yeah, I'll answer that yeah, I'll answer that.

As far as it goes with the construction I'm not sure.

Which one you were referring to but just in general with the construction, we started with the deployment of our safety and security platform for the construction sites.

Which covers.

The workers check in and checkout system.

Worker PV monitoring system, the smart helmets.

Following prevention system. So by the end of 2021, we have successfully completed 32 construction projects.

And over the course of the next six months, we expect another 37 to be completed.

I'm not sure if that was the one that you're referring to.

And then as it relates to bright line I think we have the latest progress is that we're still working on the full scale deployment right. Now originally the plan was to go from Miami to Palm Beach.

And because they now are almost done on finishing the expansion from Palm Beach to Orlando, we're trying to finalize the total scope of handling the entire track.

And doing it all at once.

Okay.

How old are the construction collab.

Collaboration.

From.

Third quarter last year was Oklahoma $5 million in bags.

But I can't find my notes that has all the details so I can always follow up offline afterwards.

Oh sure Yeah yeah.

Okay.

So again, just a reminder press star one to ask a question.

It appears there are no further question at this time.

I'd like to turn the call gets it back to you Brian for any additional closing remarks.

Great. Thank you and thank you all for participating our remark holdings' fiscal year 2021 financial results conference call a replay will be available in approximately four hours through the same link issued in our March 22nd press release. Thank you have a good afternoon.

This concludes today's conference. Thank you for your participation you may now disconnect.

Yeah.

Yes.

Okay.

[music].

Okay.

[music].

Yeah.

Yeah.

[music].