Chicken Soup for the Soul Entertainment Reports Q1 2022 Results
Strong growth driven by increased distribution, expanded offerings of original, exclusive offerings and overall library of content, new technology platforms
Announced transaction to acquire Redbox Entertainment Inc., creating leading independent, integrated direct-to-consumer media platform delivering premium entertainment for value conscious consumers
Management to host a conference call and live webcast on
“We are off to a great start to the year, with strong financial results and continued momentum in viewership growth driven by delivery of compelling original content across our streaming services,” said
“All of these factors position us well to execute on our efforts to meaningfully scale the business and today we announced separately a major transaction that will accelerate those efforts, our proposed acquisition of Redbox.”
First Quarter 2022 Financial Summary
- Net revenue of
$29.2 million , compared to$36.0 million in the seasonally high fourth quarter of 2021, and$23.2 million in the year-ago period, an increase of 26% year over year. - Net loss of
$14.1 million compared with a net loss of$22.4 million in the fourth quarter of 2021, and a net loss of$9.2 million in the year-ago period;$11.8 million net loss before dividends, compared with$20.2 million net loss in the fourth quarter 2021, and$6.9 million net loss in the year-ago period. - Adjusted EBITDA of
$3.7 million , compared with$9.3 million in the fourth quarter 2021, and$4.6 million in the year-ago period.
Recent Business Highlights
- Announced planned acquisition of Redbox Entertainment Inc., creating leading independent, integrated direct-to-consumer media platform delivering premium entertainment for value conscious consumers
- Grew Crackle Plus viewership by 11.5% quarter over quarter driven by distribution touchpoint rollout strategy
- Original and exclusive content viewership grew to 27% of total viewership in the first quarter
- Rolled out new technology platform for Crackle on Samsung TVs, improving the user experience and increasing time spent on the platform
- Launched the Chicken Soup for the Soul AVOD on VIZIO, bringing thousands of hours of lifestyle programming,
Hollywood blockbusters and classic scripted TV series to viewers - Expanded Crackle Plus AVOD to 70 touchpoints, remaining on track for 90-touchpoint goal in 2022
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 that 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.
The results included herein will be filed in our Quarterly Report on Form 10-Q for the three-months ended
Conference Call Information
- Date, Time: Wednesday, May 11, 2022, 8:30 a.m. ET
- Toll-free: (888) 428-7458
- International: (862) 298-0702
- A live webcast is available at http://ir.cssentertainment.com/ under the “News & Events” tab
Conference Call Replay Information
- A webcast replay will be made available at http://ir.cssentertainment.com/ under the “News & Events” tab following the completion of the call
About Chicken Soup for the
Chicken Soup for the
Note Regarding Use of Non-GAAP Financial Measures
Our consolidated financial statements are prepared in accordance with generally accepted accounting principles in
The presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual, infrequent or non-recurring items or by non-cash items. This non-GAAP financial measure should be considered in addition to, rather than as a substitute for, our actual operating results included in our condensed consolidated financial statements.
We define Adjusted EBITDA as consolidated operating income (loss) adjusted to exclude interest, taxes, depreciation, amortization (including tangible and intangible assets), amortization and certain costs related to our film library, acquisition-related costs, consulting fees related to acquisitions, dividend payments, non-cash share-based compensation expense, and adjustments for other unusual and infrequent in nature identified charges, including transition related expenses. Adjusted EBITDA is not an earnings measure recognized by
A reconciliation of net loss to Adjusted EBITDA will be provided in our Quarterly Report on Form 10-Q for the quarter ended
Forward-Looking Statements
This press release includes forward-looking statements within the meaning of the federal securities laws. Forward-looking statements are statements that are not historical facts. These statements are based on various assumptions, whether or not identified in this press release, and on the current expectations of management and are not predictions of actual performance. Such assumptions involve a number of known and unknown risks and uncertainties, including but not limited to our core strategy, operating income and margin, seasonality, liquidity, including cash flows from operations, available funds, and access to financing sources, free cash flows, revenues, net income, profitability, stock price volatility, future regulatory changes, price changes, the ability of the Company’s content offerings to achieve market acceptance, the Company’s success in retaining or recruiting officers, key employees, or directors, the ability to protect intellectual property, the ability to complete strategic acquisitions, the ability to manage growth and integrate acquired operations, the ability to pay dividends, regulatory or operational risks, and general market conditions impacting demand for the Company’s services. For a more complete description of these and other risks and uncertainties, please refer the Company’s Annual Report on Form 10-K for the year ended
Investor Relations
Ellipsis
CSSE@ellipsisir.com
(646) 776-0886
Media Contact
kbarrette@rooneyco.com
(212) 223-0561
Tables Follow
Chicken Soup for the |
|||||||||
Condensed Consolidated Balance Sheets | |||||||||
2022 | 2021 | ||||||||
(unaudited) | |||||||||
ASSETS | |||||||||
Cash, cash equivalents and restricted cash | $ | 21,499,311 | $ | 44,286,105 | |||||
Accounts receivable, net of allowance for doubtful accounts of |
66,224,566 | 60,213,807 | |||||||
Prepaid expenses and other current assets | 3,043,049 | 1,904,273 | |||||||
Due from affiliated companies | 684,946 | — | |||||||
Operating lease right-of-use assets | 8,385,948 | — | |||||||
Content assets, net | 86,816,164 | 63,645,396 | |||||||
Intangible assets, net | 21,649,516 | 18,035,091 | |||||||
Indefinite lived intangible assets | 12,163,943 | 12,163,943 | |||||||
44,906,055 | 39,986,530 | ||||||||
Other assets, net | 5,570,677 | 5,190,954 | |||||||
Total assets | $ | 270,944,175 | $ | 245,426,099 | |||||
LIABILITIES AND EQUITY | |||||||||
Accounts payable and accrued other expenses | $ | 43,836,814 | $ | 34,984,226 | |||||
Due to affiliated companies | — | 489,959 | |||||||
Programming obligations | 15,570,000 | 1,641,250 | |||||||
Film library acquisition obligations | 19,139,499 | 24,673,866 | |||||||
Accrued participation costs | 18,118,463 | 12,323,329 | |||||||
Film acquisition advances | 12,970,779 | 6,196,909 | |||||||
Revolving loan | 22,035,713 | 17,585,699 | |||||||
9.50% Notes due 2025, net of deferred issuance costs of |
31,591,909 | 31,493,020 | |||||||
Contingent consideration | 6,639,061 | 9,764,256 | |||||||
Put option obligation | 11,400,000 | 11,400,000 | |||||||
Operating lease liabilities | 9,799,043 | — | |||||||
Other liabilities | 5,481,387 | 3,274,432 | |||||||
Total liabilities | 196,582,668 | 153,826,946 | |||||||
Equity | |||||||||
Stockholders' Equity: | |||||||||
Series A cumulative redeemable perpetual preferred stock, |
383 | 370 | |||||||
Class A common stock, |
945 | 899 | |||||||
Class B common stock, |
766 | 766 | |||||||
Additional paid-in capital | 245,978,573 | 240,609,345 | |||||||
Deficit | (150,589,204 | ) | (136,462,244 | ) | |||||
Accumulated other comprehensive loss | (18 | ) | 571 | ||||||
Class A common stock held in treasury, at cost (1,721,608 and 944,502 shares, respectively) | (21,786,509 | ) | (13,202,407 | ) | |||||
Total stockholders’ equity | 73,604,936 | 90,947,300 | |||||||
Noncontrolling interests | 756,571 | 651,853 | |||||||
Total equity | 74,361,507 | 91,599,153 | |||||||
Total liabilities and equity | $ | 270,944,175 | $ | 245,426,099 | |||||
Chicken Soup for the |
|||||||||
Condensed Consolidated Statements of Operations | |||||||||
(unaudited) | |||||||||
Three Months Ended |
|||||||||
2022 | 2021 | ||||||||
Net revenue | $ | 29,206,197 | $ | 23,196,842 | |||||
Cost of revenue | 22,575,408 | 16,242,934 | |||||||
Gross profit | 6,630,789 | 6,953,908 | |||||||
Operating expenses: | |||||||||
Selling, general and administrative | 12,816,520 | 9,234,819 | |||||||
Amortization and depreciation | 1,648,258 | 1,238,027 | |||||||
Management and license fees | 2,920,620 | 2,319,684 | |||||||
Total operating expenses | 17,385,398 | 12,792,530 | |||||||
Operating loss | (10,754,609 | ) | (5,838,622 | ) | |||||
Interest expense | 1,310,459 | 1,087,944 | |||||||
Other non-operating income, net | (201,792 | ) | (570 | ) | |||||
Loss before income taxes and preferred dividends | (11,863,276 | ) | (6,925,996 | ) | |||||
Provision for income taxes | 20,000 | 14,000 | |||||||
Net loss before noncontrolling interests and preferred dividends | (11,883,276 | ) | (6,939,996 | ) | |||||
Net loss attributable to noncontrolling interests | (38,385 | ) | — | ||||||
Net loss attributable to Chicken Soup for the |
(11,844,891 | ) | (6,939,996 | ) | |||||
Less: preferred dividends | 2,282,069 | 2,253,385 | |||||||
Net loss available to common stockholders | $ | (14,126,960 | ) | $ | (9,193,381 | ) | |||
Net loss per common share: | |||||||||
Basic and diluted | $ | (0.92 | ) | $ | (0.67 | ) | |||
Weighted-average common shares outstanding: | |||||||||
Basic and diluted | 15,331,743 | 13,635,759 | |||||||
Chicken Soup for the |
||||||||
Adjusted EBITDA | ||||||||
(unaudited) | ||||||||
Three Months Ended |
||||||||
2022 | 2021 | |||||||
Net loss available to common stockholders | $ | (14,126,960 | ) | $ | (9,193,381 | ) | ||
Preferred dividends | 2,282,069 | 2,253,385 | ||||||
Provision for income taxes | 20,000 | 14,000 | ||||||
Other taxes | 80,372 | 84,493 | ||||||
Interest expense | 1,310,459 | 1,087,944 | ||||||
Film library amortization and related costs | 9,687,024 | 6,928,667 | ||||||
Share-based compensation expense | 996,797 | 231,844 | ||||||
Expense for bad debt and video returns | 581,834 | 694,212 | ||||||
Amortization and depreciation | 2,004,073 | 1,621,360 | ||||||
Other non-operating income, net | (201,792 | ) | (570 | ) | ||||
Transitional expenses | 107,785 | — | ||||||
All other nonrecurring costs | 920,432 | 840,050 | ||||||
Adjusted EBITDA | $ | 3,662,093 | $ | 4,562,004 | ||||
Chicken Soup for the |
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Adjusted Earnings Per Share | |||||||||
(unaudited) | |||||||||
Three Months Ended |
|||||||||
2022 | 2021 | ||||||||
Basic and diluted loss per share | $ | (0.92 | ) | $ | (0.67 | ) | |||
Amortization related to acquired intangible assets | 0.09 | 0.09 | |||||||
Adjusted basic and diluted loss per share | $ | (0.83 | ) | $ | (0.58 | ) | |||
Source: Chicken Soup for the Soul Entertainment, Inc.