3rd Quarter 2019 Revenues Were Up 345% Over the Same Period in 2018.
Adjusted Net Profits Were Generated for the First Time in the Company’s History.
Las Vegas, NV & Hong Kong, Nov. 19, 2019 (GLOBE NEWSWIRE) -- 12 ReTech Corporation (OTC: RETC), released its 3rd Quarter, 2019 financial results yesterday and showed further progress in improving the operations of their business with increased revenues and decreased operational expenses which resulted in reduced operational losses.
The Company has improved its year over year operational results by integrating its three USA acquired consumer micro-brands so that they can work together as a cohesive business unit. This effort has resulted in reduced overhead expenses. With the newly acquired Bluwire Group retail stores, the Company plans to take advantage of additional synergies. Also, Bluwire stores will soon begin to sell some of the clothes produced by our Rune NYC subsidiary that are aimed at the airline traveler.
For the third quarter (“Q3:FY2019”) ended September 30, 2019, the Company posted revenues of $165,798 which represents a 344.7% improvement over the comparable 2018 period when revenues were only $48,102.
For the 9 months ended September 30, 2019 the Company posted revenues of $625,078 versus the comparable period ended June 30, 2018 when the Company reported revenue of $73,726. That represented a year to date increase of 847.8%
Operational results improved due to significant reduction and recapture of overhead expenses. The Company shuttered its 12 Europe A.G. operations during the 3rd quarter, 2019. The resultant reduction of overhead expenses will become evident in our fiscal year 2020. That we closed 12 Europe A.G. does not mean that we have given up on Europe. We will continue to court retailer customers in Europe and operate our 12 Sconti network. These efforts will just be managed by our corporate personnel. The shuttering of 12 Europe A.G. plus additional recapture of accounts payable and other operational expenses taken during the 3rd quarter resulted in a one-time gain of $1,136,586. This was reported as an Other Income (Expense) item even though the ongoing cost savings will have a positive impact on future Operational Expenses.
This resulted in the Company experiencing an Adjusted Net Profit of $463,330 for the 3-month period ended September 30, 2019 versus an Adjusted Net Loss of $916,981 for the comparable 2018 period. This represents a $1,425,311 improvement over the Adjusted Net Loss, over the comparable 3-month period of 2018.
Using the same analysis, for the 9 months ended September 30, 2019 as compared to that same period in 2018 the Company reported an Adjusted Net Loss of $691,301 in 2019 vs $2,633,047 in 2018 which represents an improvement of $1,941,761.
The GAAP results reported include; a) Impairment of Software Development Costs, b) General Reserve Expense, c) Non-Operational Interest Expense (includes changes in Derivative Liability and potential default liabilities) and d) Derivative Liability Expenses which are all non-cash expenses derived from our prior use of convertible note financing. These reserves, impairments and derivative liabilities represent the most conservative estimates and accounting treatments required under GAAP but the actual expenses realized may be greater or less than that which is reported below and may result in wide swings in expenses, profits and /or losses as the final results are determined. Events that could if realized dramatically affect these estimates and reserves would be a settlement with one or more convertible debt holders or a major sale of our technology. It is for those reasons that Management discusses the non-GAAP, operating and non-cash results so that readers can follow our operational results more closely.
Therefore, when looking at the full 3rd quarter 2019 GAAP results including these non-cash asset impairments, reserves expense, interest expense and derivative liabilities expense, the Company posted a larger GAAP Net Loss of $5,076,173 versus a GAAP Net Loss of $1,768,823 in the comparable 2018 period.
The larger GAAP Net Loss is mainly due to accounting treatments for the financing expenses of how the Company has raised working capital over the past two years.
CEO Ponzetta commented, “We started this business as a technology company whose purpose was to help retailers compete in this modern world. One thing that will really change the way that retailers and the investment community view our Company, is for us to get some traction in our technology business. Our recent Bluwire Group acquisition gives us the opportunity to achieve that traction and we plan to take advantage of this opportunity.”
“The recent acquisition of Bluwire Group is already proving to be a game changer for us. Through 2019, Bluwire stores have been generating just over $1 million per quarter in revenues. We think that trend will hold through the end of the year. Because of their locations, Bluwire stores gross margins on sales average greater than 50%. Our opportunity is to improve the operational results in 2020. We plan to produce growth by introducing several pieces of our 12 Technology Suite into the Bluwire stores with a goal of raising shopper traffic at our stores. By showing a lift in shopper traffic and the resultant sales lift, we think we will have a compelling value proposition for other retailers who want to survive in the current retail environment” concluded CEO Ponzetta.
The figures referenced above are not audited, readers are advised to consider these figures along with footnotes and any other accompanying information that is contained in the Company’s Form 10-Q as well as all of the filings that the Company has previously filed with the U.S. Securities and Exchange Commission.
About 12 ReTech Corporation:
“RETAIL REINVENTED”
12 ReTech Corporation has REINVENTED RETAIL for both our own retail outlets and other merchants who would want to license our cutting-edge retail software to experientially engage with consumers, increase revenues, reduce expenses and provide superior service to their customers. In addition to our software licensing business, the company operates twelve retail outlets that sell electronics and travel related products at premium U.S.A. airport and casino locations under our Bluwire brand. We create and sell fashionable apparel under our Rune NYC, Emotion Fashion & Lexi-Lu brands. We make clothing and travel accessories at our Red Wire Group factory.
As a vertically integrated omni channel retailer 12 ReTech’s technology team is able to truly understand and develop what merchants need in order to thrive in today’s difficult retail environment. We give our retailer clients the abilities and tools that enable them to compete effectively with the likes of Amazon, Walmart and others.
For more information about our Company visit us at www.12ReTech.com. To have your products carried in our stores visit www.shopbluwire.com. To learn about our apparel manufacturing capabilities, contact us at sales@redwiregroup.com or visit www.redwiregroup.com. To shop our brands please visit www.runenyc.com, www.emotionapparelinc.com, www.lexiludancewear.com. For retailers who would like to learn more about our cutting-edge software, contact us in the U.S.A at 530 539 4329 or at solutions@12Retech.com.
12 Retech Corporation is publicly listed on the OTC Markets under the symbol RETC.
Safe Harbor: This document contains certain 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, which are intended to be covered by the safe harbors created thereby. Investors are cautioned that all forward-looking statements involve risks and uncertainty, including without limitation, the ability of the Company to successfully implement its turnaround strategy, changes in costs of raw materials, labor, and employee benefits, as well as general market conditions, competition and pricing. Although the Company believes that the assumptions underlying the forward-looking statements contained herein are reasonable, any of the assumptions could be inaccurate, and therefore, there can be no assurance that the forward-looking statements included in this letter will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as representation by the Company or any other person that the objectives and plans of the Company will be achieved. In assessing forward-looking statements included herein, readers are urged to carefully read those statements. When used in the Annual Report on Form 10-K, the words "estimate," "anticipate," "expect," "believe," and similar expressions are intended to be forward-looking statements.
Investors Relations Contacts:
Mark Gilbert
Magellan FIN, LLC
mgilbert@magellanfin.com
317-361-2392 (USA)
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