Thu, 27 Jun 2019

Name Change Related to Sale of uSell.com Domain and Continued Focus on Wholesale B2B Platform

NEW YORK, NY / ACCESSWIRE / May 17, 2019 / PhoneX Holdings, Inc (OTC: PXHI) formerly known as uSell.com, Inc. (OTC: USEL), today reported results for the first quarter of 2019.

Key Financial Highlights:

  • Revenues increased by $3,555,000, or 25.1%, to $17,729,000 for the quarter ended March 31, 2019, from $14,174,000 for the quarter ended March 31, 2018.
  • Gross profit was $1,546,000 for the quarter ended March 31, 2019, compared to negative gross profit of ($619,000) for the quarter ended March 31, 2018.
  • Operating income improved by $2,486,000 to $486,000 for the quarter ended March 31, 2019, from an operating loss of $2,000,000 for the quarter ended March 31, 2018.
  • Net income for the quarter ended March 31, 2019 was $371,000, compared to a net loss of ($2,374,000) for the quarter ended March 31, 2018.
  • Adjusted EBITDA, a non-GAAP financial measure, was $846,000 for the quarter ended March 31, 2019, compared to a loss of ($1,580,000) for the quarter ended March 31, 2018. See 'Non-GAAP Financial Measure - Adjusted EBITDA' below
  • The Company had working capital of $3,557,000 at March 31, 2019 vs. a working capital deficit of ($1,327,000) at March 31, 2018.

The following table presents Adjusted EBITDA, a non-GAAP financial measure, and provides a reconciliation of Adjusted EBITDA to the directly comparable GAAP measure reported in the Company's consolidated financial statements:

Quarter Ended March 31,

2019

2018

Net income (loss)

$

371,000

$

($2,374,000

)

Stock-based compensation expense

17,000

67,000

Depreciation and amortization

343,000

353,000

Interest expense

115,000

374,000

Adjusted EBITDA

$

846,000

$

($1,580,000)

The Company posted strong results for the first quarter of 2019, partly as a result of favorable market conditions, but also as a result of its substantially lower cost structure, its strategy to purchase more opportunistically, and increased activity on its online platform located at www.WeSellCellular.com. The Company's Adjusted EBITDA for Q1 does not include a substantial amount of accumulated payments from Brightstar, which are currently recorded as Deferred Revenue on the Company's balance sheet. As of March 31, 2019, $833,335 of Brightstar payments had been recorded as Deferred Revenue. The Company expects to complete the Brightstar integration on time and recognize this Deferred Revenue on its income statement in Q2, which will positively impact Q2 results.

On May 4th, 2019, the Company completed the sale of its uSell.com website, brand, and related technology assets for $325,000. This sum will also be recognized on the Company's income statement in Q2. Due to the sale of these assets and the Company's focus on scaling its PhoneX Inc. Platform, the Company changed its name to PhoneX Holdings, Inc.

Nik Raman, Chief Executive Officer, commented, 'Our results in the first quarter of 2019 validated the shifts in strategy that we made last year to scale down our Proprietary Trading business, purchase more opportunistically, reduce costs, and focus on our Platform Partnership business. The sale of uSell.com was in line with this strategy and will enable an even deeper focus on scaling our platform. We look forward to a successful launch with Brightstar in the near future.'

Non-GAAP Financial Measure - Adjusted EBITDA

We make reference to 'Adjusted EBITDA', which is a measure of financial performance not calculated in accordance with accounting principles generally accepted in the United States ('GAAP'). Generally, a non-GAAP financial measure is a numerical measure of a company's performance, financial position or cash flows that either excludes or includes amounts that are not normally included or excluded in the most directly comparable measure calculated and presented in accordance with GAAP.

This non-GAAP measure is not in accordance with, or an alternative to, measures prepared in accordance with GAAP and may be different from non-GAAP measures used by other companies. In addition, this non-GAAP measure is not based on any comprehensive set of accounting rules or principles. Non-GAAP measures have limitations in that they do not reflect all of the amounts associated with our results of operations as determined in accordance with GAAP. This measure should only be used to evaluate our results of operations in conjunction with the corresponding GAAP measures.

Reconciliations of Adjusted EBITDA to the most directly comparable GAAP financial measure, net loss, to the extent available without unreasonable effort, are set forth below. The Company defines Adjusted EBITDA as loss from operations before the items noted in the table below.

Management believes Adjusted EBITDA provides a meaningful representation of our operating performance that provides useful information to investors regarding our financial condition and results of operations. Adjusted EBITDA is commonly used by financial analysts and others to measure operating performance. Furthermore, management believes that this non-GAAP financial measure may provide investors with additional meaningful comparisons between current results and results of prior periods as they are expected to be reflective of our core ongoing business. However, while we consider Adjusted EBITDA to be an important measure of operating performance, Adjusted EBITDA and other non-GAAP financial measures have limitations, and investors should not consider them in isolation or as a substitute for analysis of our results as reported under GAAP. Further, Adjusted EBITDA, as we define it, may not be comparable to EBITDA, or similarly titled measures, as defined by other companies.

About PhoneX Holdings, Inc.

PhoneX Holdings, Inc. is building the dominant online platform for the wholesale exchange of used smartphones. PhoneX Holdings acquires devices from major carriers, big box retailers, manufacturers, and distributors and then moves these devices throughout the world to those who need them most. The Company operates two distinct models: 1) a Proprietary Trading Model, through which it purchases devices utilizing its own balance sheet via its subsidiary We Sell Cellular LLC, and 2) a Platform Partnership Model, through which it enables suppliers to integrate directly into its online platform via licensing agreements with its subsidiary PhoneX, Inc. In either case, the Company maximizes the value of these devices by listing them on its online platform, located at www.WeSellCellular.com, where small retailers and distributors can purchase high volumes of inventory in a cost effective manner, while minimizing risk.

Contact Information
Nik Raman
Chief Executive Officer
p212-213-6805
nik@phonexinc.com

SOURCE: PhoneX Holdings, Inc



View source version on accesswire.com:
https://www.accesswire.com/545758/uSellcom-Changes-Name-to-PhoneX-Holdings-Inc-and-Posts-Strong-First-Quarter-Results

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