Acorn International — Investor Presentation (June 2019)
25 slides from Acorn International's investor presentation, Jun 5, 2019
Slide 1: Investor Presentation June 2019
NYSE: ATV INVESTOR PRESENTATION June 2019
Slide 2: Safe Harbor Statement
2 SAFE HARBOR STATEMENT This presentation contains forward - looking statements. These statements constitute “forward - looking” statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 199
Slide 3: Overview
3 OVERVIEW • Acorn International builds consumer brands and sells products direct to consumers in China • Principal focus on e - commerce channel • 20+ year history as a leading direct to consumer, marketing and branding company in China • Harnesses the convergence of social media, content consumpti
Slide 4: Investment Highlights
4 INVESTMENT HIGHLIGHTS NYSE: ATV • Asset - light e - commerce business model spurring high - margin , profitable revenue growth • Achieved operating profitability for FY 2018, first time in recent history • Targeting key consumer trends in China to drive revenue growth • Strong balance sheet and st
Slide 5: Experienced Management Team
5 EXPERIENCED MANAGEMENT TEAM NYSE: ATV Robert W. Roche Co - Founder and Executive Chairman • Co - founder and Executive Chairman of Acorn ; Chairman of Board of Directors . • Founder and President of Roche Enterprises, a dynamic, global company with over 40 businesses in its portfolio that have gen
Slide 6: Blue Chip Board of Directors
6 BLUE CHIP BOARD OF DIRECTORS NYSE: ATV Robert W. Roche Chairman, Board of Directors • Co - founder and Executive Chairman of Acorn ; Chairman of Board of Directors . • Founder and President of Roche Enterprises, a dynamic, global company with over 40 businesses in its portfolio that have generated
Slide 7: Historical Corporate Timeline
7 HISTORICAL CORPORATE TIMELINE NYSE: ATV 1998 Acorn co - founded by Robert Roche, Executive Chairman 2007 NYSE IPO 2006 - 2014 TV Infomercial Leader 2014 2018 Achieved operating profitability for the first time in recent history Regulation changes in China drive a shift away from Acorn’s historical
Slide 8: Strategic Shift to Asset-Light Business
8 STRATEGIC SHIFT TO ASSET - LIGHT BUSINESS NYSE: ATV • Turnaround and strategic shift in corporate priorities began in mid - 2015 • Strategic shift to asset - light business model • Emphasis on achieving profitable growth • Reigned in operating expenses and consolidated operations • Consolidated on
Slide 9: Mission Statement
NYSE: ATV MISSION STATEMENT Building Brands that bring the best of the world directly to the Chinese consumer 9
Slide 10: Acorn International Today
NYSE: ATV 10 ACORN INTERNATIONAL TODAY • 20+ year history of delivering to millions of customers throughout China • ~20 million customers in database • Core competencies • Top tier and highly seasoned, local/foreign management team + blue chip board • Track record of building brands into household n
Slide 11: Growing Market Opportunity
NYSE: ATV 11 GROWING MARKET OPPORTUNITY • China is expected to remain one the world’s greatest opportunities for consumer products and services • GDP/capita expected to increase ~40% to $14,000 by 2023* • Consumer upgrade • Growing dominance of e - commerce has changed the way that consumers shop •
Slide 12: Digital Media Business Model
NYSE: ATV Acorn Entertainment and Acorn Streaming work closely together internally to support Acorn Product Division 12 DIGITAL MEDIA BUSINESS MODEL
Slide 13: Proprietary Brands: Babaka
NYSE: ATV 13 PROPRIETARY BRANDS: BABAKA • Rapidly growing household brand name in China • Introduced to market in 1997, acquired by Acorn in 2005 • Products include: • Classic posture correction products • New product launches • “Smart” version with mobile app • Massage products • Posture seat • Add
Slide 14: Proprietary Brands: Acorn Fresh
NYSE: ATV 14 PROPRIETARY BRANDS: ACORN FRESH • Importer of highest quality food from around the world, launched 2018 • With our partners, management of the supply chain from the sea/farm directly to the customer’s table • Core customer base of Chinese mothers, ages 25 – 35, driven to source safe ing
Slide 15: Proprietary Brands: Acorn Fresh
NYSE: ATV 15 PROPRIETARY BRANDS: ACORN FRESH Winner of Top E - commerce Store for Retail Excellence on China e - commerce Powerhouse, JD.com in May 2019 Acorn Fresh Products:
Slide 16: Acorn Entertainment
NYSE: ATV 16 • Works closely with Acorn Streaming internally to support Product Division through social media management and the creation of digital content • Brings U.S. celebrity & sports talent and brands to China • Helps Western sports and entertainment talent and organizations develop a deep an
Slide 17: Acorn Streaming
NYSE: ATV 17 ACORN STREAMING • Works closely with Acorn Entertainment internally to support Product Division through social media management and the creation of digital content + independent revenue stream through “pay - to - view” model • Primarily focused on live streaming and pre - recorded video
Slide 18: End-to-End Merchandising Across China
NYSE: ATV 8 NYSE: ATV END - TO - END MERCHANDISING ACROSS CHINA
Slide 19: 20+ Years of Managing Value Chain
NYSE: ATV 19 20+ YEARS OF MANAGING VALUE CHAIN PRODUCT SOURCING CUSTOMER SERVICE DELIVERY WAREHOUSE • LOCAL SUPPLIERS • DECADE LONG RELATIONSHIPS • OPTIMIZED WAREHOUSING INFRASTRUCTURE • ONSITE QUALITY CONTROL • SPECIALISTS AND HANDLING SUPERVISORS • PARTNERSHIPS WITH TOP CHINESE LOGISTICS COMPANIES
Slide 20: Growth Strategy
NYSE: ATV 20 GROWTH STRATEGY • Sharp focus on building brands and growing e - commerce including: • Selling and expanding proprietary - branded products • Incubating potential new brands through service model • Generating incremental revenue from Acorn Streaming and Acorn Entertainment • Ongoing emp
Slide 21: Improving Financial Results
NYSE: ATV 21 IMPROVING FINANCIAL RESULTS • Achieved operating profitability for the first time in recent history in 2018 • Positive trajectory continuing in 2019 • Q1 2019 revenue growth of 68.5% year - over - year to $9.2 million • Income from continuing operations of $0.5 million vs loss of $(39 t
Slide 22: Strong Balance Sheet to Support Growth
NYSE: ATV 22 STRONG BALANCE SHEET TO SUPPORT GROWTH $000s March 31, 2019* Cash and Equivalents $ 17,482 Other Current Assets 20,306 Total Current Assets 37,788 Available - for - sale Securities 39,607 Other Assets 16,871 Total Assets $ 94,266 Total Current Liabilities 15,724 Other Liabilities 643 To
Slide 23: Key Takeaways
23 KEY TAKEAWAYS NYSE: ATV • Asset - light e - commerce business model spurring high - margin , profitable revenue growth • Achieved operating profitability for FY 2018, first time in recent history • Targeting key consumer trends in China to drive revenue growth • Strong balance sheet and streamlin
Slide 24: Thank You
THANK YOU 24 NYSE: ATV For Additional Information contact: Jacob Fisch, CEO jake@chinadrtv.com
Slide 25: 25
25
Acorn International — Investor Presentation (June 2019) on 6ix