Core Streaming and Content Business Adjusted
EBITDA Increased by $2.3 million or 103% versus Prior Year,
Positive for Second Consecutive Quarter
Ad Supported Streaming Revenues Increased by
48% Versus Prior Quarter and 28% Versus Prior Year Quarter with
Linear Ad-Supported Viewership up 93% Versus Quarter Ending March
31, 2020 to 29 Million Viewers
Cinedigm Corp. (NASDAQ: CIDM) today announced its financial
results for the three-month period ended June 30, 2020.
Key Financial Results:
- Continued margin improvements in core business drove a $1.0
million or 19% improvement in Operating Net Income /(Loss).
Operating Net Loss was $4.1 million versus $5.1 million in the same
period of the prior year, an improvement of $1.0 million or
19%.
- Consolidated revenues were $6.0 million
- Digital Licensing/Transactional Content Sales Billings
increased by 35%; highest Digital sales quarter in over five
years
- Ad-supported streaming revenues increased 48% over last quarter
ended March 31, 2020 and 28% over first quarter of last fiscal
year, despite COVID-19 impacts on the overall advertising
market
- Core Business (Streaming and Entertainment Content
Distribution) Adjusted EBITDA increased by 103% or $2.3 million to
$0.07 million in the quarter compared to prior year, continuing the
positive profitability results trend from the fourth quarter of
fiscal year 2020
- Total Debt reduced by $13.1 million or 22% versus prior
year
Key Business Highlights During Q1 FY2021 (Quarter ended June
30, 2020):
- Linear streaming minutes viewed increased 43% and on-demand
plays increased 103% in the quarter over the fourth quarter of
fiscal 2020
- Linear active viewers in the quarter increased 93% to 29
million, up from 14.8 million in the fourth quarter of fiscal
2020
- Launched The Bob Ross Channel on more than 68 million
connected devices and Smart TVs in the quarter
- Strengthened balance sheet with common stock issuance on May
22, 2020 for gross proceeds of $8.0 million
- Key partners Amazon, Apple, Vudu, Google, InDemand EST,
Hoopla, Microsoft, Sony and Fandango generated their
strongest digital content performance levels with Cinedigm in five
years with over 60% year-over-year quarterly growth, driving 35%
increase in digital content sales billings
- Next day air releases such as Hallmark’s When Calls the
Heart and ITV’s Good Witch series achieved strong
consumer sales
- Announced six additional streaming network deals in the last
three months, bringing portfolio total to 16 streaming channels
under management. These include launches or channel partnership
announcements with:
- The Bob Ross Channel, in partnership with American
Public Media, featuring the series created by the iconic
painter and television celebrity Bob Ross. In just a few months,
the channel has become one of the top performing channels in the
Cinedigm portfolio and recently launched on Samsung TV Plus
and Tubi
- ConTV Anime, a new 24/7 linear and AVOD streaming
network dedicated to streaming Japanese Anime films and series,
which launched on June 8, 2020.
- SPI International, a global provider of premium
streaming networks to more than 42 million subscribers, to launch
and operate e-sports channel Gametoon and fashion lifestyle
network FashionBox in North America
- Team Whistle, a leading sports and lifestyle media
company, to distribute a FAST linear and AVOD network Whistle
TV
- LiveXLive, the leader in live music streaming, to
develop a global LiveXLive branded music streaming channel
and form advertising and content partnership
- MyTime Film Network, a female-focused streaming movie
network targeted for launch in late third quarter of fiscal
2021
- Announced that Amazon’s IMDb TV is offering Cinedigm’s
free ad-supported linear channels CONtv, Dove Channel, Comedy
Dynamics and Docurama
- Significantly expanded international smart TV carriage and
distribution by closing deals with platform providers Vewd,
Foxxum and Zeasn, extending the Company’s reach to the
majority of smart TV manufacturers
- Expanded our base of signed advertising partners to 26
companies with six additional in negotiation
Key Business Highlights Subsequent to Quarter End:
- Further strengthened balance sheet with common stock issuance
on July 20, 2020 for gross proceeds of $10.8 million
- Launched hundreds of movies, TV episodes and three streaming
channels on NBCUniversal’s Peacock’s digital streaming
platform
- Announced a partnership with Fantawild, China’s largest
theme park operator and the top producer of children’s animation in
Asia, to launch a new global streaming service featuring thousands
of hours of the Company’s widely acclaimed animated series and
feature films and to distribute Fantawild’s animated content
outside of China
- Announced a partnership with Bloody Disgusting, the most
popular media brand in horror, to launch a new horror streaming
network set to premiere just in time for the Halloween season
- Announced a partnership with Quincy Newell and his company,
TwentyOne14 Media, to launch a new, urban multi-cultural
entertainment and lifestyle network
- Partnered with Littlstar, one of the fastest-growing and
most popular streaming services, to distribute Cinedigm's portfolio
of linear and video-on-demand channels. Littlstar is the
leading provider of premium streaming film & television content
to the gaming ecosystem, where it reaches over 110 million Sony
PlayStation consoles, and also reaches hundreds of millions of
additional streaming devices including Android TVs, mobile
devices, and many more. Cinedigm’s device streaming footprint is
now at over 800 million global devices
- Announced a partnership with Rightsline, a leading
Rights Management platform serving the needs of a broad range of
entertainment companies and rights owners, to provide
Matchpoint™, the Company’s proprietary digital content
distribution platform, with real-time rights management and
enforcement.
“Continuing the trend from last quarter, our core streaming and
content distribution business generated positive Adjusted EBITDA,
with a $2.3 million or 103% increase versus the prior year
quarter,” said Chris McGurk, Cinedigm’s Chairman and CEO. “This
strong performance reflects the expansion of our streaming
business, particularly AVOD, where revenues were up 48% versus the
prior quarter despite COVID-19 impacts on the overall advertising
market, strong digital content sales from our highest revenue
quarter in over five years and the continued positive impacts of
our aggressive cost streamlining efforts. We have several
additional new channels teed up for launch over the coming quarters
that we expect will add significant revenue and profits as we move
through the year and beyond. Importantly, with our streaming
infrastructure in place and now broadly recognized in the industry
as top notch, as each additional channel reaches full carriage, we
gain an incremental stream of recurring revenue that accelerates
the monetization of our investment. Clearly, we are now uniquely
well positioned to continue to capture a meaningful share of the
rapidly expanding global streaming business.”
“The consumer shift towards on-demand, premium entertainment and
the adoption of cord-cutting alternatives continues at a dramatic
and accelerating pace,” said Erick Opeka, President of Digital
Networks. “We took advantage of this with the launch or signing of
six new streaming channels during the quarter, which will be
available on a number of key streaming platforms including Roku,
Xumo, Peacock and Plex among many others. Our streaming
device platform reach has now expanded to over 800 million global
devices and will only continue to grow.”
Gary Loffredo, Chief Operating Officer and General Counsel,
added, “Due to COVID-19, advertisers ‘pressed pause’ industry-wide
in late March through mid-May and we were impacted like everyone
else. Despite this, we generated strong streaming results in the
quarter with 48% AVOD growth over the prior three months and our
ad-fill rates are now exceeding pre-COVID-19 levels with CPMs also
back to 90% of pre-COVID-19 rates. We remain very bullish as TV ad
dollars continue to migrate to OTT due to the superior targeting
and addressability OTT offers and as our streaming channel
portfolio and distribution footprint continue to rapidly expand. We
are also very pleased that we strengthened our balance sheet
through two equity raises for $18.8 million in gross proceeds, with
one of them occurring shortly after the quarter closed. We also
reduced total debt by $13.1 million or 22% versus the prior
year.”
Fiscal First Quarter Financial Summary (comparing the three
months ended June 30, 2020 to the three months ended June 30,
2019)
Income Statement
Revenue was $6.0 million, a decrease of 39% compared to $9.8
million in the prior year period, due to the expected decline in
the legacy Cinema Equipment business and the negative impact of
COVID-19 on theatrical revenues. This was partially offset by
growth in OTT / streaming revenues. Overall OTT/streaming revenues,
including digital content licensing, were up 22% and with sales
billings up 30%. OTT AVOD Channel revenues increased 28% versus
last year and 48% versus the prior 3-month period.
Total operating expenses were $8.6 million, compared to $12.5
million the prior year period, a decrease of $3.9 million, or 31%,
which was primarily driven by lower selling, general and
administrative expenses and lower depreciation and amortization
expense. Selling, general and administrative expenses for the first
quarter of fiscal year 2021 were $3.8 million compared to $5.8
million in the prior year period, a decrease of $2 million, or 34%,
due largely to the Company’s cost streamlining efforts and shift to
streaming. Amortization of intangible assets was $0.6 million for
the first quarter of fiscal year 2021 compared to $1 million in the
prior year period, a decrease of $0.4 million, or 41%.
The Company reported a consolidated net loss of $19.9 million
for the first quarter of fiscal year 2021. Excluding the unrealized
change in fair value of our equity investment in Starrise Media,
the operating net loss was $4.1 million compared to a net loss of
$5.1 million in first quarter of fiscal year 2020, an improvement
of $1 million or 19%. The equity investment in Starrise Media at
fair value included in our balance sheet is $35 million.
For the first quarter of fiscal year 2021, Consolidated Adjusted
EBITDA was negative $182 thousand, compared to $539 thousand in the
year-ago period. The decrease was primarily due to the expected
decline of our legacy Cinema Equipment business and the negative
impact of COVID-19 on theatrical revenues.
Balance Sheet
As of June 30, 2020, the Company had cash and cash equivalents
of $16.3 million compared to $14.3 million for the fourth quarter
of fiscal year 2020 March 31, 2020. We completed an equity raise
with common stock for gross proceeds of $8.0 million during the
quarter.
Total debt was reduced by $13.1 million, or 22%, versus June 30,
2019.
Conference Call
Cinedigm will host a conference call to discuss its financial
results at 7:00 am. PDT / 10:00 am. EDT on August 14, 2020.
To participate in the conference call, please dial 877-407-0782
or for international callers 201-689-8567 at least five minutes
prior to the start of the call. No passcode is required. An audio
webcast is available directly at the following link
https://www.webcaster4.com/Webcast/Page/2478/36632 and will also be
accessible at http://investor.cinedigm.com/events.cfm. To listen to
the live webcast, please visit the site prior to the start of the
call-in order to register, download and install any necessary audio
software.
For those unable to participate during the live broadcast, a
replay will be available by dialing 877-481-4010 (U.S.) or
919-882-2331 (International) and use passcode: 36632
Adjusted EBITDA is defined by the Company for the periods
presented to be earnings before interest, taxes, depreciation and
amortization, other income, net, goodwill impairment, litigation
related expenses and recoveries, stock-based compensation,
expenses, restructuring, transition and acquisitions expenses, net,
and certain other items. Pursuant to the requirements of Regulation
G, the Company has provided a reconciliation in the tables attached
to this release of loss from continuing operations calculated in
accordance with accounting principles generally accepted in the
United States of America (“GAAP”) to Adjusted EBITDA. Adjusted
EBITDA is not a measurement of financial performance under GAAP and
may not be comparable to other similarly titled measures of other
companies. The Company calculated and communicated Adjusted EBITDA
in the tables because the Company's management believes it is of
importance to investors and lenders by providing additional
information with respect to the performance of its fundamental
business activities. Management presents Adjusted EBITDA because it
believes that Adjusted EBITDA is a useful supplement to net loss as
an indicator of operating performance. Management also believes
that Adjusted EBITDA is an industry-wide financial measure that is
useful both to management and investors when evaluating the
Company's performance and comparing our performance with the
performance of our competitors. Management also uses adjusted
EBITDA for planning purposes, as well as to evaluate the Company's
performance because it believes that adjusted EBITDA more
accurately reflects the Company's results, as it excludes certain
items, such as stock-based compensation charges, that management
believes are not indicative of the Company's operating performance.
The Company believes that Adjusted EBITDA is a performance measure
and not a liquidity measure. Adjusted EBITDA should not be
considered as an alternative to operating or net loss as an
indicator of performance or as an alternative to cash flows from
operating activities as an indicator of cash flows, in each case as
determined in accordance with GAAP, or as a measure of liquidity.
In addition, adjusted EBITDA does not take into account changes in
certain assets and liabilities as well as interest and Adjusted
EBITDA is defined by the Company for the periods presented to be
earnings before interest, taxes, depreciation and amortization,
other income, net, goodwill impairment, litigation related expenses
and recoveries, stock-based compensation, expenses, restructuring,
transition and acquisitions expenses, net, and certain other items.
Pursuant to the requirements of Regulation G, the Company has
provided a reconciliation in the tables attached to this release of
loss from continuing operations calculated in accordance with
accounting principles generally accepted in the United States of
America (“GAAP”) to Adjusted EBITDA. Adjusted EBITDA is not a
measurement of financial performance under GAAP and may not be
comparable to other similarly titled measures of other companies.
The Company calculated and communicated Adjusted EBITDA in the
tables because the Company's management believes it is of
importance to investors and lenders by providing additional
information with respect to the performance of its fundamental
business activities. Management presents Adjusted EBITDA because it
believes that Adjusted EBITDA is a useful supplement to net loss as
an indicator of operating performance. Management also believes
that Adjusted EBITDA is an industry-wide financial measure that is
useful both to management and investors when evaluating the
Company's performance and comparing our performance with the
performance of our competitors. Management also uses adjusted
EBITDA for planning purposes, as well as to evaluate the Company's
performance because it believes that adjusted EBITDA more
accurately reflects the Company's results, as it excludes certain
items, such as stock-based compensation charges, that management
believes are not indicative of the Company's operating performance.
The Company believes that Adjusted EBITDA is a performance measure
and not a liquidity measure. Adjusted EBITDA should not be
considered as an alternative to operating or net loss as an
indicator of performance or as an alternative to cash flows from
operating activities as an indicator of cash flows, in each case as
determined in accordance with GAAP, or as a measure of liquidity.
In addition, adjusted EBITDA does not take into account changes in
certain assets and liabilities as well as interest and income taxes
that can affect cash flows. The Company's calculation of Adjusted
EBITDA may or may not be consistent with the calculation of this
measure by other companies in the same industry. Investors should
not view Adjusted EBITDA as an alternative to the GAAP operating
measure of net income (loss). In addition, Adjusted EBITDA does not
take into account changes in certain assets and liabilities as well
as interest and income taxes that can affect cash flows. Management
does not intend the presentation of these non-GAAP measures to be
considered in isolation or as a substitute for results prepared in
accordance with GAAP. These non-GAAP measures should be read only
in conjunction with the Company's consolidated financial statements
prepared in accordance with GAAP income taxes that can affect cash
flows. The Company's calculation of Adjusted EBITDA may or may not
be consistent with the calculation of this measure by other
companies in the same industry. Investors should not view Adjusted
EBITDA as an alternative to the GAAP operating measure of net
income (loss). In addition, Adjusted EBITDA does not take into
account changes in certain assets and liabilities as well as
interest and income taxes that can affect cash flows. Management
does not intend the presentation of these non-GAAP measures to be
considered in isolation or as a substitute for results prepared in
accordance with GAAP. These non-GAAP measures should be read only
in conjunction with the Company's consolidated financial statements
prepared in accordance with GAAP.
About Cinedigm
Since inception, Cinedigm (NASDAQ: CIDM) has been a leader at
the forefront of the digital transformation of content
distribution. Adapting to the rapidly transforming business needs
of today’s entertainment landscape, Cinedigm remains a
change-centric player focused on providing content, channels and
services to the world’s largest media, technology and retail
companies. Cinedigm’s Content and Networks groups provide original
and aggregated programming, channels and services that entertain
consumers globally across hundreds of millions of devices. For more
information, visit www.cinedigm.com.
[CIDM-E]
Safe Harbor Statement
Investors and readers are cautioned that certain statements
contained in this document, as well as some statements in periodic
press releases and some oral statements of Cinedigm officials
during presentations about Cinedigm, along with Cinedigm's filings
with the Securities and Exchange Commission, including Cinedigm's
registration statements, quarterly reports on Form 10-Q and annual
report on Form 10-K, are "forward-looking'' statements within the
meaning of the Private Securities Litigation Reform Act of 1995
(the "Act''). Forward-looking statements include statements that
are predictive in nature, which depend upon or refer to future
events or conditions, which include words such as "expects,"
"anticipates,'' "intends,'' "plans,'' "could," "might,"
"believes,'' "seeks," "estimates'' or similar expressions. In
addition, any statements concerning future financial performance
(including future revenues, earnings or growth rates), ongoing
business strategies or prospects, and possible future actions,
which may be provided by Cinedigm's management, are also
forward-looking statements as defined by the Act. Forward-looking
statements are based on current expectations and projections about
future events and are subject to various risks, uncertainties and
assumptions about Cinedigm, its technology, economic and market
factors and the industries in which Cinedigm does business, among
other things. These statements are not guarantees of future
performance and Cinedigm undertakes no specific obligation or
intention to update these statements after the date of this
release.
CINEDIGM CORP.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands, except for share
and per share data)
June 30, 2020
March 31, 2020
ASSETS
(Unaudited)
Current assets
Cash and cash equivalents
$
16,301
$
14,294
Accounts receivable, net
26,549
34,785
Inventory, net
437
582
Unbilled revenue
1,801
1,992
Prepaid and other current assets
8,345
9,409
Total current assets
53,433
61,062
Restricted cash
1,000
1,000
Equity investment in Starrise, a related
party, at fair value
34,963
23,433
Property and equipment, net
6,457
7,967
Right-of-use assets
204
1,210
Intangible assets, net
6,333
6,924
Goodwill
8,701
8,701
Other long-term assets
5
143
Total assets
$
111,096
$
110,440
LIABILITIES AND DEFICIT
Current liabilities
Accounts payable and accrued expenses
$
65,382
$
77,085
Current portion of notes payable,
including unamortized debt discount of $347 and $460
respectively
32,364
37,249
Current portion of notes payable,
non-recourse including unamortized debt discount of $564 and $763,
respectively
11,544
11,442
Operating lease liabilities
137
593
Current portion of deferred revenue
1,661
1,645
Total current liabilities
111,088
128,014
Notes payable
2,152
—
Operating lease liabilities,
noncurrent
67
684
Deferred revenue, net of current
portion
400
919
Other long-term liabilities
8
110
Total liabilities
113,715
129,727
Commitments and contingencies
Stockholders’ deficit
Preferred stock, 15,000,000 shares
authorized; Series A 10% - $0.001 par value per share; 20 shares
authorized; and 7 shares issued and outstanding at June 30, 2020
and March 31, 2020. Liquidation preference of $3,648
3,559
3,559
Common stock, $0.001 par value; Class A
stock 150,000,000 shares authorized at June 30, 2020 and March 31,
2020; 104,606,655 and 63,251,429 shares issued and 103,292,819 and
61,937,593 shares outstanding at June 30, 2020 and March 31, 2020,
respectively
103
62
Additional paid-in capital
437,450
400,784
Treasury stock, at cost; 1,313,836 Class A
common shares at June 30, 2020 and March 31, 2020
(11,603
)
(11,603
)
Accumulated deficit
(430,849
)
(410,904
)
Accumulated other comprehensive income
12
92
Total stockholders’ deficit of Cinedigm
Corp.
(1,328
)
(18,010
)
Deficit attributable to noncontrolling
interest
(1,291
)
(1,277
)
Total deficit
(2,619
)
(19,287
)
Total liabilities and deficit
$
111,096
$
110,440
CINEDIGM CORP.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except for share
and per share data)
Three Months Ended June
30,
2020
2019
Revenues
$
6,018
$
9,803
Costs and expenses:
Direct operating (excludes depreciation
and amortization shown below)
2,679
3,612
Selling, general and administrative
3,840
5,849
Provision for doubtful accounts
—
270
Depreciation and amortization of property
and equipment
1,524
1,774
Amortization of intangible assets
590
995
Total operating expenses
8,633
12,500
Loss from operations
(2,615
)
(2,697
)
Interest expense, net
(1,290
)
(2,282
)
Gain on extinguishment of notes
payable
23
—
Changes in fair value of equity investment
in Starrise, a related party
(15,794
)
—
Other expense, net
(194
)
(13
)
Loss from operations before income
taxes
(19,870
)
(4,992
)
Income tax expense
—
(47
)
Net loss
(19,870
)
(5,039
)
Net loss attributable to noncontrolling
interest
14
6
Net loss attributable to controlling
interests
(19,856
)
(5,033
)
Preferred stock dividends
(89
)
(89
)
Net loss attributable to common
stockholders
(19,945
)
(5,122
)
Net loss per Class A common stock
attributable to common stockholders - basic and diluted:
Net loss attributable to common
stockholders
$
(0.21
)
$
(0.13
)
Weighted average number of Class A common
stock outstanding: basic and diluted
94,416,684
38,351,161
Adjusted EBITDA
Following is the reconciliation of our consolidated net loss to
Adjusted EBITDA:
Three Months Ended June
30,
($ in thousands)
2020
2019
Net loss
$
(19,870
)
$
(5,039
)
Add Back:
Income tax expense
—
47
Depreciation and amortization of property
and equipment
1,524
1,774
Amortization of intangible assets
590
995
Interest expense, net
1,290
2,282
Changes in fair value on equity investment
in Starrise
15,794
—
Other expense, net
299
463
Stock-based compensation and expenses
177
11
Net income attributable to noncontrolling
interest
14
6
Adjusted EBITDA
$
(182
)
$
539
Adjustments related
to the Cinema Equipment Business
Depreciation and amortization of property
and equipment
$
(1,403
)
$
(1,646
)
Amortization of intangible assets
(8
)
(11
)
Stock-based compensation and expenses
—
1
Loss (income) from operations
1,661
(1,133
)
Adjusted EBITDA from Content &
Entertainment business and corporate segment
$
68
$
(2,250
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200814005086/en/
Jill Newhouse Calcaterra Cinedigm
jcalcaterra@cinedigm.com 310-466-5135
Cinedigm (NASDAQ:CIDM)
Historical Stock Chart
From Apr 2024 to May 2024
Cinedigm (NASDAQ:CIDM)
Historical Stock Chart
From May 2023 to May 2024