Acorn Announces 49% Revenue Growth, Sets Quarterly Dividend
Despite the strong sales, shares in Acorn shifted lower by midday amid the ongoing Sino-U.S trade war uncertainty.
The stock in Acorn International Inc. (NYSE: ATV) was trading down 2 cents on Wednesday afternoon, at $18.04 per American depositary share, after the company announced its results for the third quarter.
The Shanghai-based company provides marketing and branding services, as well as sells Babaka posture correction products on two of China's biggest online marketplaces, Alibaba Group Holding Ltd.'s (NYSE: BABA) Tmall and JD.com Inc. (Nasdaq: JD).
Acorn said in a statement today that in the three months through September it had revenue of $11.3 million, up 49% year-over-year, thanks to the increased sales of Babaka products.
"Our Babaka branded posture correction products posted another solid quarter and sales of Acorn Fresh continued to ramp up as it continued to expand its product portfolio by adding beef to its core seafood offerings," Jacob A. Fisch, president and chief executive officer of Acorn, said in a statement today.
He added, "In keeping with our core focus on direct-to-consumer e-commerce and digital media marketing in China, we recently reached an agreement to sell our oxygen-generating products business, which sold products via an offline network of distributors in China."
Net income in the third quarter slipped to $1.2 million from $3.8 million a year ago, according to the report. Acorn said the results last year reflected the gains from the sale of its subsidiary, Bright Rainbow Investments Ltd., which took place in the second quarter of 2018.
Last month, Acorn said it has struck a deal to sell its oxygen-generating products business, Zhuhai Acorn Electronic Technology Co. Ltd., for $1.45 million. The deal is expected to close by early 2020, according to the statement.
Also on Wednesday, Acorn has declared a quarterly cash dividend of 25 cents. The dividend will be payable to shareholders of record as of Dec. 13 on or around Dec. 20, the company said.
Acorn is considering a going-private proposal from its chairman, Robert Roche. He has placed a bid to buy all outstanding shares in Acorn at $19.50 per ADS.