via NewMediaWire -- Troika Media Group, Inc. (Nasdaq: TRKA) ("TMG"
or "Company"), a brand consultancy and marketing innovations
company that provides integrated branding and marketing solutions
for global brands, today announced financial results for its fiscal
year ended June 30, 2021.
Robert Machinist, Troika’s Chairman and CEO, said, “As
expected, our fiscal 2021 results bear the imprint of the very
challenging environment created by the global pandemic. Client
activity was severely reduced, and many projects were put on hold.
In light of these circumstances, TMG stayed focused on maintaining
the high quality of services and relationships with our clients to
position us for growth as the recovery unfolded. During the fiscal
year, we implemented a program of structural operating cost
reduction to lower our expense base, and raise our margin potential
going forward. Our balance sheet and liquidity were significantly
strengthened as a result of our IPO in April 2021.
“We begin fiscal 2022 as a stronger company thanks to our
employees, whose compassion, creativity, and resolve have been
extraordinary during the pandemic. Our success in navigating the
past year gives us confidence for the new year, as volatility and
variability from COVID-19 are likely to persist for some time to
come. For fiscal 2022, we expect improved revenue growth as our
clients resume advertising, ad budgets are growing, and significant
new client mandates are won. Our client teams in LA, NY and the UK
have done an extraordinary job in responding to the new level of
business activity underway and in the pipeline for fiscal 2022. We
are particularly excited about the re-opening of the global economy
which has led to the return of live events, an important part of
our business. These positive trends have been supportive of a
return to growth in most of our business lines and markets.
“Amid the challenges of the pandemic, we invested in near- and
long-term growth opportunities and managed costs elsewhere with
discipline, while making important progress on developing new
growth engines. We believe we can further scale our globally
integrated platform by selectively acquiring other businesses,
specifically, those firms in the growth markets of media/creative,
experiential, and technology. Two good examples of the execution of
this strategy are reflected in our formation of Troika Labs,
followed by our acquisition of Redeeem, since renamed Troika IO.
Troika Labs is a new division with the primary mission to leverage
its expansive data and content creation capabilities to provide a
fully integrated digital and creative offering to clients on a
global scale. Troika IO is anticipated to increase our ability to
significantly grow revenue and strategic opportunities and enhance
the core businesses of TMG by immediately positioning the Company
as a go-to expert in the NFT and crypto space, particularly with
our sports, gaming, and entertainment clients.”
Machinist emphasized, “We are very excited about the
significantly increased business activity underway in the beginning
of fiscal 2022 as clients reinvest in marketing, particularly in
digital media, marketing technology, and in the resumption of live
promotional events. Our teams are winning new business and
our clients are expanding their creative mandates and believe we
are returning to fiscal 2019 levels with good momentum into fiscal
2022. We look forward to returning to our strong trajectory of
organic revenue and profit growth as the macro recovery proceeds
while simultaneously entertaining new data and technology
acquisition opportunities.”
COVID-19 Business Update The COVID-19 pandemic
continued to disrupt the Company’s operating environment during
fiscal 2021, impacting client activities, particularly live events
traffic. The resurgence of COVID-19 cases and the rapid spread of
the Delta variant in most parts of the world, led to government
restrictions to prevent further spread of the virus. These
restrictions included the temporary closure of businesses deemed
non-essential, curtailment of travel, social distancing and
quarantines. In response to the ongoing impacts from the COVID-19
pandemic, the Company implemented cost control actions in certain
areas of the business to effectively manage the changing business
environment.
Fiscal 2021 Results
Revenues were $16.2 million for the fiscal year ended June
30, 2021, a decrease of 34% from $24.6 million in the
prior-year period. The Company believes that the decrease in
revenue is substantially due to the pandemic as mandatory stay at
home orders, a prohibition of live-events, and social distancing
negatively impacted its promotional and experiential business.
However, towards the end of the fourth quarter the Company started
to see client activities significantly improve, with sports,
entertainment and pharma clients contracting for services across
all the Company’s entities at rates similar to 2019.
The Company reported net loss of ($16.0) million, compared
with net loss of ($14.4) million last year. Net loss per
common share was ($1.03), compared
with ($0.94) reported in the prior-year
period. Adjusted net loss of ($8.1 million), or ($0.52) per
share, compared to ($10.2) million, or ($0.66) per share, compared
to the prior fiscal year. Adjusted EBITDA of $(8.8) million
decreased 13% from the prior fiscal year.
Fourth Quarter Results
For the three months ended June 30, 2021, the Company recognized
revenues of $3.8 million, a 3% decrease compared
with $3.9 million in the prior-year period. For the
three months ended June 30, 2021, the Company recognized gross
profits of $2.6 million, a 21% decrease compared
with $3.3 million in the prior-year period.
Results in the fourth quarter reflect the comparisons with the
prior-year period due to impact of COVID-19 macroeconomic
disruption.
Net loss was ($6.8) million, and loss per share
was ($0.44). In the prior-year quarter, the Company reported a
net gain of $0.7 million and gain per share
of ($0.05). Adjusted net loss of ($3.4) million, or
($0.22) per share, compared to a gain of $0.7 million, or $.05 per
share, in the fourth quarter of the prior fiscal year. Adjusted
EBITDA of ($3.6) million decreased 103% from the prior year
quarter.
Liquidity remains strong with cash and cash equivalents totaling
$12.1 million, compared to $1.1 million as of December 31,
2020. The increase compared to December 31, 2020, mainly
reflects proceeds received from the Company’s IPO on April 22,
2021, less cash used in operations during the twelve months ended
June 30, 2021.
Outlook for Fiscal 2022 First Quarter
With multiple engines of growth across regions, brands, and
channels, the Company is confident it is well-positioned to
continue to drive a gradual recovery as macro-conditions and market
dynamics support it. The Company expects to invest in areas to
support the recovery, including branding, data analytics, digital
technology, experiential marketing, communications and acquisition
of additional strategic data and technology platforms to both drive
growth in areas of opportunity and help nurture emerging trends in
the rest of the business. While doing so, the Company recognizes
that the COVID pandemic continues to pose a risk to the macro
environment in many parts of the world.
First Quarter Fiscal 2022 Sales
Outlook
Reported sales are forecasted to increase approximately 60%
versus the prior-year period.
About Troika Media Group
Troika Media Group is an end-to-end brand solutions company that
creates both near-term and long-term value for global brands in
entertainment, sports and consumer products. Applying emerging
technology, data science, and world-class creative, TMG helps
brands deepen engagement with audiences and fans throughout the
consumer journey and builds brand equity. Clients include Apple,
Hulu, Riot Games, Belvedere Vodka, Unilever, UFC, Peloton, CNN,
HBO, ESPN, Wynn Resorts and Casinos, Tiffany & Co., IMAX,
Netflix, Sony, Yahoo and Coca-Cola. For more information, visit
www.thetmgrp.com
Forward-Looking StatementsCertain statements in
this press release that are not historical facts are
forward-looking statements that reflect management's current
expectations, assumptions, and estimates of future performance and
economic conditions, and involve risks and uncertainties that could
cause actual results to differ materially from those anticipated by
the statements made herein. Forward-looking statements are
generally identifiable by the use of forward-looking terminology
such as "believe," "expects," "may," "looks to," "will," "should,"
"plan," "intend," "on condition," "target," "see," "potential,"
"estimates," "preliminary," or "anticipates" or the negative
thereof or comparable terminology, or by discussion of strategy or
goals or other future events, circumstances, or effects. Moreover,
forward-looking statements in this release include, but are not
limited to, the impact of the current COVID-19 pandemic, which may
limit access to the Company's facilities, customers, management,
support staff, and professional advisors, and to develop and
deliver advanced voice and data communications systems, demand for
the Company's products and services, economic conditions in the
U.S. and worldwide, and the Company's ability to recruit and retain
management, technical, and sales personnel. Further information
relating to factors that may impact the Company's results and
forward-looking statements are disclosed in the Company's filings
with the SEC. The forward-looking statements contained in this
press release are made as of the date of this press release, and
the Company disclaims any intention or obligation, other than
imposed by law, to update or revise any forward-looking statements,
whether as a result of new information, future events, or
otherwise.
Troika Media Group, Inc. and Subsidiaries |
|
Consolidated Statements of Operations and Comprehensive
Loss |
|
For the Year Ended June 30, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2021 |
|
2020 |
|
|
|
|
|
|
|
|
|
|
|
Project revenues, net |
$ |
16,192,000 |
$ |
24,613,000 |
|
|
Cost
of revenues |
|
7,504,000 |
|
11,636,000 |
|
|
|
Gross
profit |
|
8,688,000 |
|
12,977,000 |
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
Selling, general and administrative expenses |
|
24,040,000 |
|
24,034,000 |
|
|
|
Professional fees |
|
1,332,000 |
|
1,028,000 |
|
|
|
Depreciation expense |
|
131,000 |
|
344,000 |
|
|
|
Amortization expense of intangibles |
|
2,168,000 |
|
4,002,000 |
|
|
|
Goodwill impairment expense |
|
- |
|
1,985,000 |
|
|
|
Intangibles impairment expense |
|
- |
|
1,867,000 |
|
|
|
Total
operating expenses |
|
27,671,000 |
|
33,260,000 |
|
|
|
|
Loss
from operations |
|
|
(18,983,000) |
|
(20,283,000) |
|
|
|
|
|
|
|
|
|
|
|
Other
income (expense): |
|
|
|
|
|
|
|
Income
from government grants |
|
3,140,000 |
|
- |
|
|
|
Amortization expense of note payable discount |
|
(409,000) |
|
(1,092,000) |
|
|
|
Interest expense |
|
(7,000) |
|
(239,000) |
|
|
|
Foreign exchange gain (loss) |
|
(48,000) |
|
11,000 |
|
|
|
Gain
on early termination of operating lease |
|
2,000 |
|
164,000 |
|
|
|
Gain
on change in fair value of derivative liabilities |
|
72,000 |
|
- |
|
|
|
Other
income |
|
452,000 |
|
691,000 |
|
|
|
Other
expenses |
|
- |
|
(18,000) |
|
|
|
|
Total
other income (expense) |
|
|
3,202,000 |
|
(483,000) |
|
|
|
|
|
|
|
|
|
|
|
Net
loss from continuing operations before income tax |
|
(15,781,000) |
|
(20,766,000) |
|
|
Income
tax expense |
|
(216,000) |
|
- |
|
|
Net
loss from continuing operations after income tax |
|
(15,997,000) |
|
(20,766,000) |
|
|
|
|
|
|
|
|
|
|
|
Net
income from discontinued operations |
|
- |
|
6,319,000 |
|
|
Net
loss |
$ |
(15,997,000) |
$ |
(14,447,000) |
|
|
Foreign currency translation adjustment |
|
(671,000) |
|
203,000 |
|
|
Comprehensive loss |
$ |
(16,668,000) |
$ |
(14,244,000) |
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per share |
|
|
|
|
|
|
|
Continuing operations - basic and diluted |
$ |
(1.03) |
$ |
(1.35) |
|
|
|
Discontinued operations - basic |
$ |
- |
$ |
0.41 |
|
|
|
Net
loss attributable to common stockholders - basic and diluted |
$ |
(1.03) |
$ |
(0.94) |
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share |
|
|
|
|
|
|
|
Discontinued operations |
$ |
- |
$ |
0.16 |
|
|
|
|
|
|
|
|
|
|
|
Weighted average basic shares |
|
15,544,032 |
|
15,423,655 |
|
|
Weighted average diluted shares |
|
15,544,032 |
|
38,736,615 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Troika Media Group, Inc. and
Subsidiaries
Consolidated Balance Sheets
As of June 30,
|
|
|
|
2021 |
|
2020 |
|
ASSETS |
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash
and cash equivalents |
$ |
12,066,000 |
$ |
1,706,000 |
|
|
Accounts receivable, net |
|
1,327,000 |
|
841,000 |
|
|
Prepaid expenses |
|
670,000 |
|
143,000 |
|
|
Other
assets - short term portion |
|
1,000 |
|
1,000 |
|
|
|
Total current
assets |
|
14,064,000 |
|
2,691,000 |
|
|
|
|
|
|
|
|
|
|
Other
assets - long term portion |
|
626,000 |
|
615,000 |
|
|
Property and equipment, net |
|
343,000 |
|
344,000 |
|
|
Operating lease right-of-use assets, net |
|
6,887,000 |
|
8,297,000 |
|
|
Intangible assets, net |
|
2,603,000 |
|
4,191,000 |
|
|
Goodwill |
|
19,368,000 |
|
17,362,000 |
|
Total
assets |
$ |
43,891,000 |
$ |
33,500,000 |
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Accounts payable and accrued expenses |
$ |
8,363,000 |
$ |
8,137,000 |
|
|
Convertible notes payable |
|
50,000 |
|
1,435,000 |
|
|
Note
payable - related party - short term portion |
|
200,000 |
|
452,000 |
|
|
Due
to related parties |
|
41,000 |
|
- |
|
|
Contract liabilities |
|
5,973,000 |
|
5,031,000 |
|
|
Operating lease liability - short term portion |
|
3,344,000 |
|
2,255,000 |
|
|
Derivative liabilities |
|
13,000 |
|
- |
|
|
Taxes
payable |
|
62,000 |
|
- |
|
|
Stimulus loan program - short term portion |
|
22,000 |
|
- |
|
|
|
Total current
liabilities |
|
18,068,000 |
|
17,310,000 |
|
|
|
|
|
|
|
|
|
Long
term liabilities: |
|
|
|
|
|
|
Operating lease liability - long term portion |
|
5,835,000 |
|
7,003,000 |
|
|
Note
payable - related party – long term portion |
|
- |
|
1,975,000 |
|
|
Stimulus loan program – long term portion |
|
547,000 |
|
- |
|
|
Rental deposits |
|
119,000 |
|
105,000 |
|
|
Other
long-term liabilities |
|
477,000 |
|
- |
|
|
Liabilities of discontinued operations - long term portion |
|
107,000 |
|
107,000 |
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities |
|
25,153,000 |
|
26,500,000 |
|
|
|
|
|
|
|
|
|
Commitment and contingencies (Note 10 &11) |
|
- |
|
- |
|
|
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
|
|
Preferred stock, $0.01 par value: 15,000,000 shares authorized |
|
|
|
|
|
|
Series A Preferred Stock ($0.01 par value: 5,000,000 shares
authorized, 720,000 shares issued and outstanding as of June 30,
2021 and 2020) |
|
7,000 |
|
7,000 |
|
|
Series B Convertible Preferred Stock ($0.01 par value: 3,000,000
shares authorized, 0 and 2,495,000 shares issued and outstanding as
of June 30, 2021 and 2020, respectively) |
|
- |
|
25,000 |
|
|
Series C Convertible Preferred Stock ($0.01 par value: 1,200,000
shares authorized, 0 and 911,149 shares issued and outstanding as
of June 30, 2021 and 2020, respectively) |
|
- |
|
9,000 |
|
|
Series D Convertible Preferred Stock ($0.01 par value: 2,500,000
shares authorized, 0 and 1,979,000 shares issued and outstanding as
of June 30, 2021 and 2020, respectively) |
|
- |
|
20,000 |
|
|
Common stock, ($0.001 par value: 300,000,000 shares authorized,
39,496,588 and 15,454,623 shares issued and outstanding as of June
30, 2021 and 2020, respectively) |
|
40,000 |
|
16,000 |
|
|
Additional paid-in-capital |
|
204,788,000 |
|
176,262,000 |
|
|
Stock
payable |
|
1,210,000 |
|
1,300,000 |
|
|
Accumulated deficit |
|
(186,889,000) |
|
(170,892,000) |
|
|
Accumulated Other
comprehensive (loss) income |
|
(418,000) |
|
253,000 |
|
|
|
Total
stockholders’ equity |
|
18,738,000 |
|
7,000,000 |
|
Total
liabilities and stockholders’ equity |
$ |
43,891,000 |
$ |
33,500,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Contact:
For Troika Media GroupKevin Aratari
kevin@troikamedia.com
Investor RelationsTraDigital IRKevin
McGrath+1-646-418-7002kevin@tradigitalir.com
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