SILVER SPRING, Md., Nov. 16, 2015 /PRNewswire/ -- RLJ Entertainment Inc., (NASDAQ: RLJE), today announced financial results for the third quarter ended September 30, 2015.
Third Quarter Highlights
"With management's steadfast discipline in making strategic investments in content while containing operational costs, we are increasingly poised to provide consumers with quality programming and position RLJ Entertainment as a leader in the media distribution and digital industry," stated Robert L. Johnson, Chairman of RLJ Entertainment.
Miguel Penella, Chief Executive Officer of RLJ Entertainment, added, "We are pleased to see continued growth in our proprietary digital channels Acorn TV, which showcases high-quality British mysteries and dramas and UMC, our newest digital channel that features the best current and exclusive urban content. Acorn TV has reached 180,000 paid subscribers, an increase of over 60,000, so far this year. UMC is starting to increase its subscriber base early in its development as we expand its programming line-up and OTT foot-print. Also, we remain focused on improving operational cash-flows and strengthening our balance sheet to position RLJ Entertainment for growth in the coming year."
About RLJ Entertainment, Inc.: RLJ Entertainment, Inc. (NASDAQ: RLJE) is a premier independent owner, developer, licensee, and distributor of entertainment content and programming in primarily North America, the United Kingdom, and Australia. RLJE is a leader in numerous genres including feature films and urban with distinct content via its owned and distributed brands such as Acorn (British TV), Acacia (fitness), and Athena (documentaries). These titles are distributed in multiple formats including broadcast television (including satellite and cable), theatrical and non-theatrical, DVD, Blu-Ray, digital download, and digital streaming.
Through Acorn Media Enterprises, its UK development arm, RLJE owns all rights to the hit UK mystery series Foyle's War and is developing new programs. RLJE owns 64% of Agatha Christie Limited, which manages the intellectual property and publishing rights to some of the greatest works of mystery fiction, including stories of the iconic sleuths Miss Marple and Poirot.
RLJE leverages its management experience to acquire, distribute and monetize existing and original content for its many distribution channels, including its branded digital subscription channels, Acorn TV, AcaciaTV, and UMC – Urban Movie Channel, and engages distinct audiences with programming that appeals directly to their unique viewing interests. Through its proprietary e-commerce web sites and print catalogs for the Acorn and Acacia brands, RLJE has direct contacts and billing relationships with millions of consumers. For more information, please visit www.RLJEntertainment.com
Forward Looking Statements
This press release may include "forward looking statements" within the meaning of the "safe harbor" provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Other than statements of historical fact, all statements made in this press release are forward-looking, including, but not limited to, statements regarding industry prospects, future results of operations or financial position, and statements of our intent, belief and current expectations about our strategic direction, prospective and future results and condition. In some cases, forward-looking statements may be identified by words such as "will," "should," "could," "may," "might," "expect," "plan," "possible," "potential," "predict," "anticipate," "believe," "estimate," "continue," "future," "intend," "project" or similar words.
Forward-looking statements involve risks and uncertainties that are inherently difficult to predict, which could cause actual outcomes and results to differ materially from our expectations, forecasts and assumptions. Factors that might cause such differences include, but are not limited to:
You should carefully consider and evaluate all of the information in this press release, including the risk factors listed above and in our Form 10-K filed with the Securities Exchange Commission (or SEC), including "Item 1A. Risk Factors." If any of these risks occur, our business, results of operations, and financial condition could be harmed, the price of our common stock could decline and you may lose all or part of your investment, and future events and circumstances could differ significantly from those anticipated in the forward-looking statements contained in this press release. Unless otherwise required by law, we undertake no obligation to release publicly any updates or revisions to any such forward-looking statements that may reflect events or circumstances occurring after the date of this press release.
Readers are referred to the most recent reports filed with the SEC by RLJ Entertainment. Readers are cautioned not to place undue reliance upon any forward-looking statements, which speak only as of the date made, and we undertake no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.
Contact:
Traci Otey Blunt, 301-830-6204
RLJ Entertainment, Inc.
[email protected]
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RLJ ENTERTAINMENT, INC. Consolidated Balance Sheets September 30, 2015 (unaudited) and December 31, 2014
|
|||
| (In thousands, except share data) |
September 30, |
December 31, |
|
| 2015 |
2014 |
||
| ASSETS |
|||
| Cash |
$ 1,807 |
$ 6,662 |
|
| Accounts receivable, net |
14,254 |
17,389 |
|
| Inventories, net |
11,625 |
13,029 |
|
| Investments in content, net |
67,422 |
67,525 |
|
| Prepaid expenses and other assets |
2,727 |
2,633 |
|
| Property, equipment and improvements, net |
2,214 |
2,372 |
|
| Equity investment in affiliate |
20,758 |
22,281 |
|
| Other intangible assets, net |
12,601 |
15,272 |
|
| Goodwill |
44,891 |
44,891 |
|
| Total assets |
$ 178,299 |
$ 192,054 |
|
| LIABILITIES AND EQUITY |
|||
| Accounts payable and accrued liabilities |
$ 18,037 |
$ 24,582 |
|
| Accrued royalties and distribution fees |
49,539 |
42,493 |
|
| Deferred revenue |
2,393 |
5,006 |
|
| Debt, net of discount |
62,304 |
80,913 |
|
| Deferred tax liability |
2,002 |
2,002 |
|
| Stock warrant and other derivative liabilities |
6,920 |
601 |
|
| Total liabilities |
141,195 |
155,597 |
|
| Mandatorily redeemable convertible preferred stock, $0.001 par value, 1,000,000 shares authorized; 31,046 shares issued and outstanding at September 30, 2015; and no shares issued and outstanding at December 31, 2014 |
20,245 |
— |
|
| Equity: |
|||
| Common stock, $0.001 par value, 250,000,000 shares authorized, 13,724,756 shares issued at September 30, 2015 and December 31, 2014; 12,877,064 shares outstanding at September 30, 2015 and 13,335,258 shares outstanding at December 31, 2014 |
13 |
14 |
|
| Additional paid-in capital |
86,395 |
87,706 |
|
| Accumulated deficit |
(68,856) |
(50,534) |
|
| Accumulated other comprehensive loss |
(693) |
(729) |
|
| Treasury shares, at cost, 847,692 shares at September 30, 2015 and |
— |
— |
|
| Total equity |
16,859 |
36,457 |
|
| Total liabilities and equity |
$ 178,299 |
$ 192,054 |
|
|
RLJ ENTERTAINMENT, INC. Consolidated Statements of Operations (Unaudited) Three and Nine Months Ended September 30, 2015 and 2014
|
|||||||
| (In thousands, except share data) |
Three Months Ended |
Nine Months Ended |
|||||
| 2015 |
2014 |
2015 |
2014 |
||||
| Revenues |
$ 32,549 |
$ 37,123 |
$ 82,778 |
$ 99,478 |
|||
| Cost of sales |
|||||||
| Content amortization and royalties |
12,676 |
18,911 |
36,355 |
44,979 |
|||
| Manufacturing and fulfillment |
9,423 |
9,238 |
24,734 |
29,542 |
|||
| Total cost of sales |
22,099 |
28,149 |
61,089 |
74,521 |
|||
| Gross profit |
10,450 |
8,974 |
21,689 |
24,957 |
|||
| Selling expenses |
5,989 |
5,411 |
17,628 |
17,448 |
|||
| General and administrative expenses |
4,791 |
4,661 |
14,796 |
14,466 |
|||
| Depreciation and amortization |
1,444 |
1,301 |
3,819 |
4,258 |
|||
| Total operating expenses |
12,224 |
11,373 |
36,243 |
36,172 |
|||
| LOSS FROM OPERATIONS |
(1,774) |
(2,399) |
(14,554) |
(11,215) |
|||
| Equity earnings of affiliate |
188 |
1,190 |
876 |
2,540 |
|||
| Interest expense, net |
(2,223) |
(2,557) |
(7,747) |
(6,560) |
|||
| Change in fair value of stock warrants and other derivatives |
(2,506) |
(1,599) |
5,131 |
(2,277) |
|||
| Loss on extinguishment of debt |
— |
(1,457) |
— |
(1,457) |
|||
| Other expense |
(782) |
(1,141) |
(1,397) |
(655) |
|||
| LOSS BEFORE (PROVISION) BENEFIT FOR INCOME TAXES |
(7,097) |
(7,963) |
(17,691) |
(19,624) |
|||
| (Provision) Benefit for income taxes |
(49) |
164 |
(631) |
(524) |
|||
| NET LOSS |
(7,146) |
(7,799) |
(18,322) |
(20,148) |
|||
| Accretion on preferred stock |
(1,066) |
— |
(1,525) |
— |
|||
| NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS |
$ (8,212) |
$ (7,799) |
$ (19,847) |
$ (20,148) |
|||
| Net loss per common share: |
|||||||
| Basic and diluted |
$ (0.64) |
$ (0.62) |
$ (1.56) |
$ (1.61) |
|||
| Weighted average shares outstanding: |
|||||||
| Basic and diluted |
12,799 |
12,557 |
12,728 |
12,502 |
|||
RLJ ENTERTAINMENT, INC.
UNAUDITED Adjusted EBITDA
For the Three and Nine Months Ended September 30, 2015 and 2014
We define "Adjusted EBITDA" as adjusted earnings before income tax, depreciation, amortization, non-cash investments in content, interest expense, transaction and severance costs, warrants and stock-based compensation. Management believes Adjusted EBITDA to be a meaningful indicator of our performance that provides useful information to investors regarding our financial condition and results of operations because it removes material noncash items that allows investors to analyze the operating performance of the business using the same metric management uses. The exclusion of noncash items better reflects our ability to make investments in the business and meet obligations. Presentation of Adjusted EBITDA is a non-GAAP financial measure commonly used in the entertainment industry and by financial analysts and others who follow the industry to measure operating performance. We use this measure to assess operating results and performance of its business, perform analytical comparisons, identify strategies to improve performance and allocate resources to its business segments. While management considers Adjusted EBITDA to be important measures of comparative operating performance, it should be considered in addition to, but not as a substitute for, net income and other measures of financial performance reported in accordance with U.S. GAAP. Not all companies calculate Adjusted EBITDA in the same manner and the measure as presented may not be comparable to similarly-titled measures presented by other companies.
The following table includes the reconciliation of our consolidated U.S. GAAP net loss to our consolidated Adjusted EBITDA:
| (In thousands) |
Three Months Ended |
Nine Months Ended |
|||||
| 2015 |
2014 |
2015 |
2014 |
||||
| Net loss |
$ (7,146) |
$ (7,799) |
$ (18,322) |
$ (20,148) |
|||
| Amortization of content |
12,676 |
18,911 |
36,355 |
44,979 |
|||
| Cash investment in content |
(11,545) |
(11,467) |
(29,597) |
(37,618) |
|||
| Depreciation and amortization |
1,444 |
1,301 |
3,819 |
4,258 |
|||
| Interest expense |
2,223 |
2,557 |
7,747 |
6,560 |
|||
| Loss on extinguishment of debt |
— |
1,457 |
— |
1,457 |
|||
| Provision for income taxes |
49 |
(164) |
631 |
524 |
|||
| Transaction costs and restructuring |
244 |
— |
751 |
— |
|||
| Warrant and other derivative liability fair value adjustment |
2,506 |
1,599 |
(5,131) |
2,277 |
|||
| Stock-based compensation |
59 |
227 |
213 |
683 |
|||
| Adjusted EBITDA |
$ 510 |
$ 6,622 |
$ (3,534) |
$ 2,972 |
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SOURCE RLJ Entertainment, Inc.
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