Chicken Soup for the Soul Entertainment Reports Q1 2020 Results
First Quarter 2020 Financial Highlights
- Gross revenue of
$14.1 million , compared to$2.5 million in the year-ago period - Net loss of
$11.4 million compared to net loss of$3.4 million in the year-ago period;$10.5 million net loss before preferred dividends, compared to$2.8 million net loss before preferred dividends in the year-ago period - Adjusted EBITDA was
$2.0 million , compared to$(0.8) million in the year-ago period - Online networks, which include Crackle and Popcornflix generated
$9.0 million in revenue compared to$0.7 million in the year-ago period - Distribution & Production revenue increased 184% to
$5.1 million compared to$1.8 million in the year-ago period
Recent Business Highlights
- Viewership and registered user strength in the first quarter drove Crackle Plus networks
- Original and exclusive content rose to more than 14% of total viewing on Crackle Plus
- Distribution & Production growth driven by revenue share from Crackle Plus and an increased pace of new releases
“We delivered solid year-over-year growth across our Online Networks and Distribution & Production businesses in the first quarter, continuing the momentum we began building late last year. While early second quarter trends reflect the initial impacts of the COVID-19 pandemic on advertisers, we believe our performance over the past six months demonstrates the potential of our differentiated business model,” said
Gross profit for the quarter ended
Operating loss for the quarter ended
Net loss was
Adjusted EBITDA for the quarter ended
As of
For a discussion of the financial measures presented herein which are not calculated or presented in accordance with
The company presents non-GAAP measures such as Adjusted EBITDA to assist in an analysis of its business. These non-GAAP measures should not be considered an alternative to GAAP measures as an indicator of the company's operating performance.
Conference Call Information
- Date, Time:
Thursday, May 14, 2020 ,4:30 p.m. ET . - Toll-free: (833) 832-5128
- International: (484) 747-6583
- Conference ID: 7998306
- A live webcast and replay will be available at http://ir.cssentertainment.com/ under the “News & Events” tab
Conference Call Replay Information
- Toll-free: (855) 859-2056
- International: (404) 537-3406
- Conference ID: 7998306
ABOUT
Note Regarding Use of Non-GAAP Financial Measures
The company’s consolidated financial statements are prepared in accordance with generally accepted accounting principles in
“Adjusted EBITDA” means earnings before interest, taxes, depreciation, amortization and non-cash share-based compensation expense, and also includes the gain on bargain purchase of subsidiary and adjustments for other identified charges such as costs incurred to form the company and to prepare for the offering of its Class A common stock to the public, prior to its IPO. Identified charges also include the cost of maintaining a board of directors prior to being a publicly traded company. As the IPO has been completed, director fees will be deducted from Adjusted EBITDA going forward. Adjusted EBITDA is not an earnings measure recognized by GAAP and does not have a standardized meaning prescribed by GAAP; accordingly, Adjusted EBITDA may not be comparable to similar measures presented by other companies. Management believes Adjusted EBITDA to be a meaningful indicator of the company’s performance that provides useful information to investors regarding its financial condition and results of operations. The most comparable GAAP measure is operating income.
A reconciliation of net loss to Adjusted EBITDA is provided in the company’s Annual Report on Form 10-K for the year ended
FORWARD-LOOKING STATEMENTS
This press release includes forward-looking statements that involve risks and uncertainties. Forward-looking statements are statements that are not historical facts. Such forward-looking statements are subject to risks (including those set forth in the Annual Report on Form 10-K, filed with the
INVESTOR RELATIONS | MEDIA CONTACT |
Ellipsis | |
CSSE@ellipsisir.com | kbarrette@rooneyco.com |
646-776-0886 | (212) 223-0561 |
Tables Follow
Chicken Soup for the |
|||||||
Condensed Consolidated Balance Sheets | |||||||
2020 |
2019 |
||||||
(unaudited) | |||||||
ASSETS | |||||||
Cash and cash equivalents | $ | 7,121,339 | $ | 6,447,402 | |||
Accounts receivable, net | 25,017,923 | 34,661,119 | |||||
Prepaid expenses | 862,153 | 861,190 | |||||
Inventory, net | 338,932 | 312,033 | |||||
21,448,106 | 21,448,106 | ||||||
Indefinite lived intangible assets | 12,163,943 | 12,163,943 | |||||
Intangible assets, net | 30,272,504 | 35,451,951 | |||||
Film library, net | 37,362,602 | 33,250,149 | |||||
Due from affiliated companies | 6,790,980 | 7,642,432 | |||||
Programming costs, net | 15,546,857 | 14,459,271 | |||||
Program rights, net | 600,551 | 654,303 | |||||
Other assets, net | 649,911 | 313,585 | |||||
Total assets | $ | 158,175,801 | $ | 167,665,484 | |||
LIABILITIES AND EQUITY | |||||||
Current maturities of commercial loan | $ | 3,200,000 | $ | 3,200,000 | |||
Commercial loan and revolving line of credit, net of unamortized deferred finance cost of |
11,020,627 | 11,810,475 | |||||
Notes payable under revolving credit facility | 5,000,000 | 5,000,000 | |||||
Accounts payable and accrued expenses | 27,315,709 | 26,646,390 | |||||
Ad representation fees payable | 11,552,967 | 12,429,838 | |||||
Film library acquisition obligations | 6,909,100 | 5,020,600 | |||||
Programming obligations | 7,300,861 | 7,300,861 | |||||
Accrued participation costs | 5,861,388 | 5,066,512 | |||||
Other liabilities | 229,846 | 170,106 | |||||
Total liabilities | 78,390,498 | 76,644,782 | |||||
Equity | |||||||
Stockholders' Equity: | |||||||
Series A cumulative redeemable perpetual preferred stock, |
160 | 160 | |||||
Class A common stock, |
426 | 425 | |||||
Class B common stock, |
782 | 782 | |||||
Additional paid-in capital | 87,854,864 | 87,610,030 | |||||
Retained deficit | (44,123,009 | ) | (32,695,629 | ) | |||
Class A common stock held in treasury, at cost (74,235 shares) | (632,729 | ) | (632,729 | ) | |||
Total stockholders’ equity | 43,100,494 | 54,283,039 | |||||
Subsidiary convertible preferred stock | 36,350,000 | 36,350,000 | |||||
Noncontrolling interests | 334,809 | 387,663 | |||||
Total equity | 79,785,303 | 91,020,702 | |||||
Total liabilities and equity | $ | 158,175,801 | $ | 167,665,484 | |||
Chicken Soup for the |
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Condensed Consolidated Statements of Operations | |||||||
(unaudited) | |||||||
Three Months Ended |
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2020 |
2019 |
||||||
Revenue: | |||||||
Online networks | $ | 9,025,710 | $ | 735,264 | |||
Distribution and Production | 5,092,789 | 1,790,234 | |||||
Total revenue | 14,118,499 | 2,525,498 | |||||
Less: returns and allowances | (874,426 | ) | (332,344 | ) | |||
Net revenue | 13,244,073 | 2,193,154 | |||||
Cost of revenue | 9,910,390 | 1,632,101 | |||||
Gross profit | 3,333,683 | 561,053 | |||||
Operating expenses: | |||||||
Selling, general and administrative | 6,839,897 | 2,822,057 | |||||
Amortization and depreciation | 5,204,728 | 205,623 | |||||
Management and license fees | 1,324,407 | 219,270 | |||||
Total operating expenses | 13,369,032 | 3,246,950 | |||||
Operating loss | (10,035,349 | ) | (2,685,897 | ) | |||
Interest income | (6,438 | ) | (13,525 | ) | |||
Interest expense | 329,125 | 141,123 | |||||
Acquisition-related costs | 98,926 | 397,935 | |||||
Loss before income taxes and preferred dividends | (10,456,962 | ) | (3,211,430 | ) | |||
Provision for (benefit from) income taxes | 49,000 | (438,000 | ) | ||||
Net loss before noncontrolling interests and preferred dividends | (10,505,962 | ) | (2,773,430 | ) | |||
Net loss attributable to noncontrolling interests | (52,854 | ) | — | ||||
Net loss attributable to Chicken Soup for the |
(10,453,108 | ) | (2,773,430 | ) | |||
Less: Preferred dividends | 974,272 | 603,307 | |||||
Net loss available to common stockholders | $ | (11,427,380 | ) | $ | (3,376,737 | ) | |
Net loss per common share: | |||||||
Basic and diluted | $ | (0.95 | ) | $ | (0.28 | ) | |
Chicken Soup for the |
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Adjusted EBITDA | |||||||
Three Months Ended |
|||||||
2020 | 2019 | ||||||
Net loss available to common stockholders | $ | (11,427,380 | ) | $ | (3,376,737 | ) | |
Preferred dividends | 974,272 | 603,307 | |||||
Provision for income taxes | 49,000 | (438,000 | ) | ||||
Other Taxes | 53,411 | 281,210 | |||||
Interest expense, net of interest income | 322,687 | 127,598 | |||||
Film library and program rights amortization | 2,494,832 | 871,126 | |||||
Share-based compensation expense | 244,835 | 215,847 | |||||
Acquisition-related costs | 98,926 | 397,935 | |||||
Reserve for bad debt and video returns | 1,721,595 | 300,403 | |||||
Amortization and depreciation | 5,204,728 | 205,623 | |||||
Transitional Expenses | 2,113,469 | — | |||||
All other nonrecurring costs | 186,948 | 24,155 | |||||
Adjusted EBITDA | $ | 2,037,323 | $ | (787,533 | ) | ||
Source: Chicken Soup for the Soul Entertainment, Inc.