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VALUE EXCHANGE INTERNATIONAL, INC. REPORTS RECORD REVENUE FOR FIRST QUARTER OF FISCAL YEAR 2018

Hong Kong SAR, May 17, 2018, Value Exchange International, Inc. (OTCQB: VEII), a  provider of IT  and e-pay retail solutions,  reported its financial results for the fiscal quarter ended March 31, 2018.  The Company filed its Form 10-Q quarterly report for fiscal quarter ended March 31, 2018 with the Securities and Exchange Commission or “SEC” on May 9, 2018.  All numbers are in U.S. Dollars.

Summary of 2018 Financial Results and Other Business Highlights

*          Record Quarterly Revenues of $2.166 million, up 30.9% compared to same period from last year, mainly attributable to increased systems maintenance and product sales.

*          Net income of $251,778, down 18.9% compared to same period from last year, mainly attributable to the increase in our cost of technical staff, contracting fees to suppliers and overhead.

*          Net cash from operations increased 172.9%, compared to same period from last year.

*          Company increased support business from largest personal health care and beauty retailer in China.

*          As part of our effort to expand our product line, the Company started to sell smart luggage tags in a major Chinese airport.

Company CEO, Kenneth Tan said, "Value Exchange continues to grow its core IT business.  The expansion of business with the largest personal health care and cosmetic retailer in China and the acquisition of the Manilla, Philippines IT business are two recent examples of our ongoing efforts to expand our IT business. Increased costs for staff and overhead for the core IT business dampened net income in the quarter.  Our challenge is increase profit and profit margins with increased revenues. We understand that this challenge requires better profit margins from core IT business as well as finding newer, higher profit margin IT products and services.  Compared to the financial condition of the Company prior to 2016, we believe we have made significant strides in establishing a sustainable IT business, but we also understand and seek to address the challenges of our company to achieve and sustain better net income in the highly competitive IT business in our markets, especially with many larger competitors.”

Business Outlook

Mr. Tan said, “We are encouraged by revenue growth in 1st quarter of 2018.  Key to continued revenue growth and improving net profit in fiscal year 2018 will be increasing net profit margins in existing IT business and new business from the Chinese personal health care and cosmetic retailer as well as any other new IT business.”

Financial Summary

Net revenues. Net revenues were $2,166,441 for the three months ended March 31, 2018, as compared to $1,654,562 for the same period in 2017, an increase of 30.9%. This increase was primarily attributable to the increase in our revenue from i) systems maintenance with revenue increasing and ii) sales of hardware and consumables with revenue increasing; offset systems development and integration revenue decreasing from $117,944 to $98,839 for the three months ended March 31, 2018.

Cost of services. Our cost of services increased to $1,605,218 or 74.1% of net revenues, for the three months ended March 31, 2018, as compared to $962,305 or 58.2% of net revenues, for the same period in 2017, an increase of $642,913 or 66.8%. The increase in cost of services was mainly attributable to the increase in our cost of technical staff, contracting fees to suppliers and overhead.

Gross profit. Gross profit for the three months ended March 31, 2018 was $561,223 or 25.9% of net revenues, as compared to $692,257 or 41.8% of net revenues, for the same period in 2017, a decrease of $131,034 or 18.9%. The decrease of gross profit was largely due to the increase in cost of services, offset by the increase in net revenues compare to the same period of 2017.

Profit from operations. As a result of the above, our profit from operations totaled $218,168 for the three months ended March 31, 2018, as compared to $396,256 for the same period in 2017, a decrease of $178,088 or 44.9%.

General and administrative expenses. General and administrative expenses increased 16.7% from comparable period last year. The primary reason for the increase was attributable to an increase in office rent and professional fee expenses.

Net income. As a result of the foregoing, we had a net income of $251,778 for the three months ended March 31, 2018, compared to $435,617 for the same period in 2017, a decrease of $177,507 or 40.7%, as a result of the factors described above.

The financial summary above is qualified in its entirety by reference to the Form 10-Q Quarterly Report for the fiscal quarter ended March 31, 2018, which was filed with the SEC on May 9, 2018.

About Value Exchange International, Inc. Value Exchange International, Inc. Profile. Our company is a provider of customer-centric technology solutions for the retail industry in China, Hong Kong SAR and Philippines. By integrating market-leading Point-of-Sale/Point-of-Interaction (“POS/POI”), Merchandising, Customer Relations Management or “CRM” and related rewards, Locational Based (GPS & Indoor Positioning System (“IPS”)) Marketing, Customer Analytics, Business Intelligence solutions, our company provides retailers with the capability to offer a consistent shopping experience across all channels, enabling them to easily and effectively manage the customer lifecycle on a one-to-one basis. VEII is promoted as a single IT source for retailers who wanted to extend existing traditional transaction processing to multiple points of interaction, including the Internet, kiosks and wireless devices.

Forward-looking Statements. This press release may contain forward-looking statements regarding Value Exchange International, Inc.  (the "Company"). All statements, other than statements of historical fact included herein are "forward-looking statements" including statements regarding: the likelihood that the Company will continue to grow its core IT business; the likelihood that the Company can increase its profits and profit margins from its IT business, which is critical to Company’s success; the ability of the Company to finance its operations and any growth on affordable terms;  the ability of the Company, as a smaller company, to compete in the highly competitive IT industry in China and Manila against larger competitors with greater business, financial, and technical resources and larger market share and brand recognition;  the financial outlook of the Company; the general ability of the Company to achieve its commercial objectives; the business strategy, plans and objectives of the Company and its subsidiaries, including its strategy to diversify and extend its product line into new product lines and new markets; and any other statements of non-historical information. These forward-looking statements are often identified by the use of forward-looking terminology such as "believes," "expects," "anticipates," "seeks," "should," "could," "intends," or "projects" or similar expressions, and involve known and unknown risks and uncertainties. These statements are based upon the Company's current expectations and speak only as of the date hereof. Any indication of the merits of a claim does not necessarily mean the claim will prevail at trial or otherwise. Financial performance in one period does not necessarily mean continued or better performance in the future. The Company's actual results in any endeavor may differ materially and adversely from those expressed in any forward-looking statements as a result of various factors and uncertainties, which factors or uncertainties may be beyond our ability to foresee or control. Other risk factors include the status of the Company's common stock as a "penny stock" and those listed in other reports filed with the U.S. Securities and Exchange Commission.

Investor Contact

ir@value-exch.com

VALUE EXCHANGE INTERNATIONAL, INC.

CONSOLIDATED BALANCE SHEETS




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