Chicken Soup for the Soul Entertainment Reports Q3 2020 Results
Third Quarter 2020 Financial Summary
- Gross revenue of
$20.0 million , compared to$13.9 million in the second quarter of 2020, and$17.0 million in the year-ago period. - Net loss of
$13.0 million compared to a net loss of$10.0 million in the second quarter of 2020, and a net loss of$13.3 million in the year-ago period;$12.0 million net loss before preferred dividends, compared to$9.0 million net loss in the second quarter 2020, and$12.4 million net loss before preferred dividends in the year-ago period. - Adjusted EBITDA of
$4.2 million , compared to$2.7 million in the second quarter 2020, and a loss of$0.4 million in the year-ago period. - Online Networks, which include Crackle and Popcornflix, revenue of
$6.7 million compared to$5.4 million in the second quarter of 2020, and$14.4 million in the year-ago period. The year-over-year decline reflects approximately$6.2 million in advertising revenue in the year ago period from the since-shuttered Playstation Vue, and intercompany revenue share payments in the 2020 period of$1.3 million to our Distribution & Production business for the licensing of content from our sister company, Screen Media. - Distribution & Production revenue of
$13.3 million compared to$8.5 million in the second quarter of 2020, and$2.7 million in the year-ago period due to strength in content licensing and TVOD revenue.
Recent Business Highlights
- Continued to expand pipeline of Original & Exclusive content which represented 16% of average monthly streaming hours in the quarter, compared to just 2% a year ago.
- Online Networks delivered steady viewership throughout the quarter and sequential growth in ad impressions. The latest Crackle original series, Spides, premiered on
September 17 th, and drove over one million streams in its first two weeks. - Distribution and Production generated strong performance driven by the #1 TVOD hit The Outpost as well as the company’s growing library of film and television content.
- Today the company agreed to a 30-day extension of a key decision deadline, to
December 14, 2020 , as the Crackle Plus joint venture partners assess the possibility of closer collaboration.
“Our strong third quarter results demonstrate that we are continuing our momentum, despite the pandemic, and we are poised for a terrific end to 2020,” 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 and Pro Forma 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, November 12, 2020 ,4:30 p.m. ET . - Toll-free: (833) 832-5128
- International: (484) 747-6583
- Conference ID: 2772449
- 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: 2772449
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 (including tangible and intangible assets), 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 is provided in the company’s interim report on Form 10-Q for the three and nine months 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
Ellipsis
CSSE@ellipsisir.com
646-776-0886
MEDIA CONTACT
kbarrette@rooneyco.com
(212) 223-0561
Tables Follow
Chicken Soup for the |
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Condensed Consolidated Balance Sheets |
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2020 | 2019 |
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(unaudited) | |||||||
ASSETS | |||||||
Cash and cash equivalents | $ | 9,243,315 | $ | 6,447,402 | |||
Accounts receivable, net of allowance for doubtful accounts of |
24,772,024 | 34,661,119 | |||||
Prepaid expenses and other current assets | 2,985,503 | 1,173,223 | |||||
21,448,106 | 21,448,106 | ||||||
Indefinite lived intangible assets | 12,163,943 | 12,163,943 | |||||
Intangible assets, net | 20,575,942 | 35,451,951 | |||||
Film library, net | 36,878,196 | 33,250,149 | |||||
Due from affiliated companies | 6,081,324 | 7,642,432 | |||||
Programming costs and rights, net | 20,702,405 | 15,113,574 | |||||
Other assets, net | 4,794,239 | 313,585 | |||||
Total assets | $ | 159,644,997 | $ | 167,665,484 | |||
LIABILITIES AND EQUITY | |||||||
Current maturities of commercial loan | $ | — | $ | 3,200,000 | |||
Commercial loan, net of unamortized deferred finance costs of |
— | 11,810,475 | |||||
9.50% Notes due 2025, net of unamortized deferred finance costs of |
21,040,599 | — | |||||
Notes payable under revolving credit facility | 2,500,000 | 5,000,000 | |||||
Film acquisition advance | 10,210,000 | — | |||||
Accounts payable and accrued expenses | 25,923,748 | 26,646,390 | |||||
Ad representation fees payable | 3,021,520 | 12,429,838 | |||||
Film library acquisition obligations | 10,609,186 | 5,020,600 | |||||
Programming obligations | 6,416,012 | 7,300,861 | |||||
Accrued participation costs | 12,894,099 | 5,066,512 | |||||
Other liabilities | 1,777,548 | 170,106 | |||||
Total liabilities | 94,392,712 | 76,644,782 | |||||
Commitments and contingencies | |||||||
Equity | |||||||
Stockholders' Equity: | |||||||
Series A cumulative redeemable perpetual preferred stock, |
173 | 160 | |||||
Class A common stock, |
492 | 425 | |||||
Class B common stock, |
782 | 782 | |||||
Additional paid-in capital | 96,498,618 | 87,610,030 | |||||
Deficit | (67,182,836 | ) | (32,695,629 | ) | |||
Class A common stock held in treasury, at cost (74,235 shares) | (632,729 | ) | (632,729 | ) | |||
Total stockholders’ equity | 28,684,500 | 54,283,039 | |||||
Subsidiary convertible preferred stock | 36,350,000 | 36,350,000 | |||||
Noncontrolling interests | 217,785 | 387,663 | |||||
Total equity | 65,252,285 | 91,020,702 | |||||
Total liabilities and equity | $ | 159,644,997 | $ | 167,665,484 | |||
Chicken Soup for the |
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Condensed Consolidated Statements of Operations |
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(unaudited) |
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Three Months Ended |
Nine Months Ended |
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2020 | 2019 | 2020 | 2019 | ||||||||||||
Revenue: | |||||||||||||||
Online networks | $ | 6,652,562 | $ | 14,383,659 | $ | 21,038,965 | $ | 25,128,001 | |||||||
Distribution and Production | 13,318,050 | 2,662,429 | 26,948,795 | 6,655,114 | |||||||||||
Total revenue | 19,970,612 | 17,046,088 | 47,987,760 | 31,783,115 | |||||||||||
Less: returns and allowances | (608,861 | ) | (255,394 | ) | (1,861,396 | ) | (828,785 | ) | |||||||
Net revenue | 19,361,751 | 16,790,694 | 46,126,364 | 30,954,330 | |||||||||||
Cost of revenue | 14,840,851 | 13,614,648 | 37,684,786 | 23,568,743 | |||||||||||
Gross profit | 4,520,900 | 3,176,046 | 8,441,578 | 7,385,587 | |||||||||||
Operating expenses: | |||||||||||||||
Selling, general and administrative | 9,301,550 | 6,371,870 | 23,194,223 | 13,894,351 | |||||||||||
Amortization and depreciation | 4,576,742 | 4,695,522 | 15,022,885 | 5,631,136 | |||||||||||
Management and license fees | 1,936,175 | 1,676,303 | 4,612,636 | 3,091,093 | |||||||||||
Total operating expenses | 15,814,467 | 12,743,695 | 42,829,744 | 22,616,580 | |||||||||||
Operating loss | (11,293,567 | ) | (9,567,649 | ) | (34,388,166 | ) | (15,230,993 | ) | |||||||
Interest expense | 659,803 | 195,881 | 1,322,831 | 483,363 | |||||||||||
Loss on extinguishment of debt | 169,219 | 350,691 | 169,219 | 350,691 | |||||||||||
Acquisition-related costs | — | 1,078,637 | 98,926 | 3,735,373 | |||||||||||
Other non-operating income, net | (43,445 | ) | (8,997 | ) | (4,381,292 | ) | (34,546 | ) | |||||||
Loss before income taxes and preferred dividends | (12,079,144 | ) | (11,183,861 | ) | (31,597,850 | ) | (19,765,874 | ) | |||||||
Provision for income taxes | 26,000 | 1,248,000 | 93,000 | 557,000 | |||||||||||
Net loss before noncontrolling interests and preferred dividends | (12,105,144 | ) | (12,431,861 | ) | (31,690,850 | ) | (20,322,874 | ) | |||||||
Net loss attributable to noncontrolling interests | (73,135 | ) | (37,473 | ) | (169,878 | ) | (36,960 | ) | |||||||
Net loss attributable to Chicken Soup for the |
(12,032,009 | ) | (12,394,388 | ) | (31,520,972 | ) | (20,285,914 | ) | |||||||
Less: preferred dividends | 1,017,691 | 929,387 | 2,966,235 | 2,330,675 | |||||||||||
Net loss available to common stockholders | $ | (13,049,700 | ) | $ | (13,323,775 | ) | $ | (34,487,207 | ) | $ | (22,616,589 | ) | |||
Net loss per common share: | |||||||||||||||
Basic and diluted | $ | (1.04 | ) | $ | (1.11 | ) | $ | (2.83 | ) | $ | (1.89 | ) | |||
Chicken Soup for the |
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Adjusted EBITDA |
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Three Months Ended |
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2020 | 2019 | ||||||
Net loss available to common stockholders | $ | (13,049,700 | ) | $ | (13,323,775 | ) | |
Preferred dividends | 1,017,691 | 929,387 | |||||
Provision for income taxes | 26,000 | 1,248,000 | |||||
Other taxes | 97,466 | 54,590 | |||||
Interest expense | 659,803 | 195,881 | |||||
Film library and program rights amortization | 8,020,638 | 1,369,874 | |||||
Share-based compensation expense | 346,773 | 303,205 | |||||
Acquisition-related costs | — | 1,078,637 | |||||
Reserve for bad debt and video returns | 1,538,449 | 722,729 | |||||
Amortization and depreciation | 4,960,074 | 4,695,522 | |||||
Other non-operating income, net | (43,445 | ) | (8,997 | ) | |||
Loss on extinguishment on debt | 169,219 | 350,691 | |||||
Transitional expenses | — | 1,634,771 | |||||
All other nonrecurring costs | 472,322 | 377,184 | |||||
Adjusted EBITDA | $ | 4,215,290 | $ | (372,301 | ) | ||
Nine Months Ended |
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2020 | 2019 | ||||||
Net loss available to common stockholders | $ | (34,487,207 | ) | $ | (22,616,589 | ) | |
Preferred dividends | 2,966,235 | 2,330,675 | |||||
Provision for income taxes | 93,000 | 557,000 | |||||
Other Taxes | 202,117 | 386,265 | |||||
Interest expense | 1,322,831 | 483,363 | |||||
Film library and program rights amortization | 16,922,753 | 3,804,268 | |||||
Share-based compensation expense | 820,881 | 794,149 | |||||
Acquisition-related costs | 98,926 | 3,735,373 | |||||
Reserve for bad debt & video returns | 4,072,785 | 1,241,243 | |||||
Amortization and depreciation | 15,661,774 | 5,631,136 | |||||
Other non-operating income, net | (4,381,292 | ) | (34,546 | ) | |||
Loss on extinguishment on debt | 169,219 | 350,691 | |||||
Transitional expenses | 4,353,345 | 2,876,124 | |||||
All other nonrecurring costs | 1,128,662 | 564,240 | |||||
Adjusted EBITDA | $ | 8,944,029 | $ | 103,392 | |||
Source: Chicken Soup for the Soul Entertainment, Inc.