Acorn International Suspends Quarterly Dividend Policy Indefinitely; Takes Defensive Measures Given Potential for Coronavirus Outbreak to Materially Impact its E-Commerce Business
SHANGHAI, March 2, 2020 — Acorn International, Inc. (NYSE: ATV) (“Acorn” or the “Company”), announced that at its regularly scheduled meeting in February, 2020, the Company’s board of directors voted to indefinitely suspend its quarterly dividend of US$0.0125 per ordinary share, or US$0.25 per ADS, due to current business impact and uncertainties concerning the potential longer-term impact of the 2019 novel coronavirus (COVID-19) outbreak on the Company’s e-commerce business.
Discovered in Wuhan, China in December 2019, COVID-19 causes severe respiratory illness in humans. While it has begun to spread throughout the world, the vast majority of coronavirus cases are in mainland China, with over 78,000 diagnosed cases and over 2,700 deaths, based on the latest statistics from the World Health Organization as of the date of this release. Actions by the Chinese government to curtail the spread of the virus include limiting the transportation of people and goods within and outside of China. Many countries around the world have imposed travel bans to China and are quarantining travelers arriving from China.
“The outbreak of the coronavirus could have a material impact on our business in 2020. There has been disruption to our production capacity and our ability to deliver to customers in parts of China. There is also uncertainty about whether our ability to import raw material for our Acorn Fresh business will be affected materially. Finally, while we are adapting to work-from-home and flexible working arrangements, we have historically operated within a traditional office environment in Shanghai,” said Mr. Jacob A. Fisch, CEO and President of Acorn International.
“Some of our online businesses appear to be experiencing increased demand, as customers prefer to shop from home. But we are concerned that the combination of supply-side disruption, delivery challenges and potential, long-term waning consumer demand caused by COVID-19, potentially exacerbated by other factors, could negatively impact our business. While we continue to monitor the situation, at this point it is difficult to assess the probable significance or duration of any disruption. As a result, we are taking a number of defensive measures to cut costs and conserve our cash resources, including salary reductions and the indefinite suspension of the quarterly dividend until we have more confidence concerning the current situation.”
About Acorn International, Inc.
Acorn International is a leading marketing and branding company in China, leveraging a twenty-year direct marketing history to monetize brand IP, content creation and distribution, and product sales, through digital media in China. For more information visit www.acorninternationalgroup.com.
Safe Harbor Statement
This news release 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 1995. These forward-looking statements can be identified by terminology such as “anticipates,” “believes,” “estimates,” “expects,” “future,” “going forward,” “intends,” “outlook,” “plans,” “target,” “will,” “potential,” and similar statements. Such statements are based on current expectations and current market and operating conditions, and relate to events that involve known or unknown risks, uncertainties, and other factors, all of which are difficult to predict and many of which are beyond Acorn’s control, including the extent and duration of the adverse impact of COVID-19, which may cause actual results, performance, actions, or achievements to differ materially from those in the forward-looking statements. Further information regarding these and other risks, uncertainties, or factors is included in the Company’s filings with the U.S. Securities and Exchange Commission. The Company does not undertake any obligation to update any forward-looking statement as a result of new information, future events, or otherwise, except as required by law.
|Compass Investor Relations|
|Ms. Elaine Ketchmere, CFA|