Chicken Soup for the Soul Entertainment Reports Q4 and Full Year 2020 Results
“The fourth quarter capped off a very successful 2020 as we continued to deliver growth in original and exclusive content on Crackle Plus and expanded our distribution to drive viewership growth into the future,” said
“We are positioning Chicken Soup for the
Fourth Quarter 2020 Financial Summary
- Gross revenue of
$20.2 million , compared to$20.0 million in the third quarter of 2020, and$24.8 million in the year-ago period. - Online Networks, which include Crackle and Popcornflix, gross revenue of
$10.8 million , up 35% from$8.0 million in the third quarter of 2020, and compared to$15.9 million in the year-ago period. Gross revenue included intercompany revenue share payments of$1.7 million ,$1.3 million , and$1.0 million , respectively. On a comparable basis, after the deduction of$5.6 million of revenue from the since-shuttered Playstation Vue, the year-over-year gross revenue grew from$10.1 million to$10.8 million , an increase of 7%. - Distribution and Production revenue of
$11.1 million compared to$13.3 million in the third quarter of 2020, and$9.9 million in the year-ago period. - Net loss of
$10.1 million compared to a net loss of$13.0 million in the third quarter of 2020, and a net loss of$12.4 million in the year-ago period;$8.9 million net loss before preferred dividends, compared to$12.1 million net loss in the third quarter 2020, and$11.4 million net loss before preferred dividends in the year-ago period. - Adjusted EBITDA of
$2.8 million , compared to$4.2 million in the third quarter 2020, and$5.9 million in the year-ago period.
Full Year 2020 Financial Summary
- Record gross revenue of
$68.2 million , compared to$56.6 million in 2019. - Online networks generated
$35.3 million in gross revenue compared to$41.7 million in 2019. Gross revenue included intercompany revenue share payments of$5.2 million and$1.7 million , respectively. On a comparable basis, after the deduction of$0.3 million and$15.9 million of revenue from the since-shuttered Playstation Vue, the year-over-year gross revenue grew from$25.8 million to$35.0 million , an increase of 36%. - Distribution & Production gross revenue was
$38.0 million in revenue compared to$16.6 million in 2019. - Net loss of
$44.6 million compared to$35.0 million in 2019;$40.4 million net loss before preferred dividends, compared to$31.7 million net loss before preferred dividends in 2019. - Adjusted EBITDA was
$11.8 million , compared to$6.0 million in 2019.
Recent Business Highlights
- Continued to expand pipeline of Original & Exclusive content which represented nearly 20.0% of ad impressions for the fourth quarter and 18.5% for full year 2020.
- Increased distribution of Crackle Plus AVOD networks to 41 touchpoints and expanding this initiative with plans to reach a total of 64 consumer touchpoints.
- Signed agreement for Crackle-branded button to be included on approximately 2.5 million VIZIO SmartCast TV remotes in 2021.
- Obtained 100% ownership of Crackle Plus from Sony Pictures Television, strengthening relationship and positioning company for further growth.
- Strengthened balance sheet and enhanced liquidity with additional equity and long-term debt without covenants.
Gross profit for the year ended
Operating loss for the year ended
Net loss for the year ended
Adjusted EBITDA for the year 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:
Wednesday, March 31, 2021 ,4:30 p.m. ET . - Toll-free: (833) 832-5128
- International: (484) 747-6583
- Conference ID: 2587209
- 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: 2587209
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
Ellipsis
CSSE@ellipsisir.com
646-776-0886
MEDIA CONTACT
kbarrette@rooneyco.com
(212) 223-0561
Chicken Soup for the |
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Condensed Consolidated Balance Sheets | |||||||||
2020 | 2019 | ||||||||
ASSETS | |||||||||
Cash and cash equivalents | $ | 14,732,726 | $ | 6,447,402 | |||||
Accounts receivable, net of allowance for doubtful accounts of |
25,996,947 | 34,661,119 | |||||||
Prepaid expenses and other current assets | 1,382,502 | 1,173,223 | |||||||
21,448,106 | 21,448,106 | ||||||||
Indefinite lived intangible assets | 12,163,943 | 12,163,943 | |||||||
Intangible assets, net | 19,370,490 | 35,451,951 | |||||||
Film library, net | 35,239,135 | 33,250,149 | |||||||
Due from affiliated companies | 5,648,652 | 7,642,432 | |||||||
Programming costs and rights, net | 15,781,183 | 15,113,574 | |||||||
Other assets, net | 4,517,102 | 313,585 | |||||||
Total assets | $ | 156,280,786 | $ | 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 issuance costs of |
31,097,467 | — | |||||||
Notes payable under revolving credit facility | 2,500,000 | 5,000,000 | |||||||
Film acquisition advance | 8,659,136 | — | |||||||
Accounts payable and accrued expenses | 18,445,925 | 26,646,390 | |||||||
Ad representation fees payable | 2,949,032 | 12,429,838 | |||||||
Film library acquisition obligations | 8,616,562 | 5,020,600 | |||||||
Programming obligations | 4,697,316 | 7,300,861 | |||||||
Accrued participation costs | 12,535,651 | 5,066,512 | |||||||
Other liabilities | 1,677,906 | 170,106 | |||||||
Total liabilities | 91,178,995 | 76,644,782 | |||||||
Equity | |||||||||
Stockholders' Equity: | |||||||||
Series A cumulative redeemable perpetual preferred stock, |
210 | 160 | |||||||
Class A common stock, |
516 | 425 | |||||||
Class B common stock, |
766 | 782 | |||||||
Additional paid-in capital | 106,425,548 | 87,610,030 | |||||||
Deficit | (77,247,982 | ) | (32,695,629 | ) | |||||
Class A common stock held in treasury, at cost (74,235 shares) | (632,729 | ) | (632,729 | ) | |||||
Total stockholders’ equity | 28,546,329 | 54,283,039 | |||||||
Subsidiary convertible preferred stock | 36,350,000 | 36,350,000 | |||||||
Noncontrolling interests | 205,462 | 387,663 | |||||||
Total equity | 65,101,791 | 91,020,702 | |||||||
Total liabilities and equity | $ | 156,280,786 | $ | 167,665,484 | |||||
Chicken Soup for the |
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Condensed Consolidated Statements of Operations | ||||||||||||||||
Three Months Ended |
Year Ended |
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2020 | 2019 | 2020 | 2019 | |||||||||||||
Revenue: | ||||||||||||||||
Online networks | $ | 9,106,260 | $ | 14,899,288 | $ | 30,145,225 | $ | 40,027,289 | ||||||||
Distribution and Production | 11,076,002 | 9,922,749 | 38,024,797 | 16,577,863 | ||||||||||||
Total revenue | 20,182,262 | 24,822,037 | 68,170,022 | 56,605,152 | ||||||||||||
Less: returns and allowances | 48,330 | (412,461 | ) | (1,813,066 | ) | (1,241,246 | ) | |||||||||
Net revenue | 20,230,592 | 24,409,576 | 66,356,956 | 55,363,906 | ||||||||||||
Cost of revenue | 14,455,033 | 16,854,807 | 52,139,819 | 40,423,550 | ||||||||||||
Gross profit | 5,775,559 | 7,554,769 | 14,217,137 | 14,940,356 | ||||||||||||
Operating expenses: | ||||||||||||||||
Selling, general and administrative | 8,379,145 | 8,347,681 | 31,573,368 | 22,242,032 | ||||||||||||
Amortization and depreciation | 1,268,442 | 7,662,143 | 16,291,327 | 13,293,279 | ||||||||||||
Impairment of content assets | 3,973,878 | — | 3,973,878 | — | ||||||||||||
Management and license fees | 2,023,060 | 2,445,297 | 6,635,696 | 5,536,390 | ||||||||||||
Total operating expenses | 15,644,525 | 18,455,121 | 58,474,269 | 41,071,701 | ||||||||||||
Operating loss | (9,868,966 | ) | (10,900,352 | ) | (44,257,132 | ) | (26,131,345 | ) | ||||||||
Interest expense | 899,275 | 327,654 | 2,222,106 | 811,017 | ||||||||||||
Loss on extinguishment of debt | — | — | 169,219 | 350,691 | ||||||||||||
Acquisition-related costs | — | 232,916 | 98,926 | 3,968,289 | ||||||||||||
Other non-operating income, net | (1,872,913 | ) | (5,645 | ) | (6,254,205 | ) | (40,191 | ) | ||||||||
Loss before income taxes and preferred dividends | (8,895,328 | ) | (11,455,277 | ) | (40,493,178 | ) | (31,221,151 | ) | ||||||||
Provision for income taxes | 6,000 | 28,000 | 99,000 | 585,000 | ||||||||||||
Net loss before noncontrolling interests and preferred dividends | (8,901,328 | ) | (11,483,277 | ) | (40,592,178 | ) | (31,806,151 | ) | ||||||||
Net loss attributable to noncontrolling interests | (12,323 | ) | (97,322 | ) | (182,201 | ) | (134,282 | ) | ||||||||
Net loss attributable to Chicken Soup for the |
(8,889,005 | ) | (11,385,955 | ) | (40,409,977 | ) | (31,671,869 | ) | ||||||||
Less: preferred dividends | 1,176,141 | 974,272 | 4,142,376 | 3,304,947 | ||||||||||||
Net loss available to common stockholders | $ | (10,065,146 | ) | $ | (12,360,227 | ) | $ | (44,552,353 | ) | $ | (34,976,816 | ) | ||||
Net loss per common share: | ||||||||||||||||
Basic and diluted | $ | (0.79 | ) | $ | (1.03 | ) | $ | (3.62 | ) | $ | (2.92 | ) | ||||
Chicken Soup for the |
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Adjusted EBITDA | |||||||||||||||
Three Months Ended |
Year Ended |
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2020 | 2019 | 2020 | 2019 | ||||||||||||
Net loss available to common stockholders | $ | (10,065,146 | ) | $ | (12,360,227 | ) | $ | (44,552,353 | ) | $ | (34,976,816 | ) | |||
Preferred dividends | 1,176,141 | 974,272 | 4,142,376 | 3,304,947 | |||||||||||
Provision for income taxes | 6,000 | 28,000 | 99,000 | 585,000 | |||||||||||
Other taxes | 110,483 | 73,940 | 312,600 | 460,205 | |||||||||||
Interest expense | 899,275 | 327,654 | 2,222,106 | 811,017 | |||||||||||
Film library and program rights amortization | 6,641,019 | 6,878,959 | 23,563,772 | 10,683,227 | |||||||||||
Share-based compensation expense | 310,634 | 267,777 | 1,131,515 | 1,061,926 | |||||||||||
Acquisition-related costs | — | 232,916 | 98,926 | 3,968,289 | |||||||||||
Expense for bad debt and video returns | (688,201 | ) | 1,428,456 | 3,384,584 | 2,669,699 | ||||||||||
Amortization and depreciation | 1,655,473 | 7,662,143 | 17,317,247 | 13,293,279 | |||||||||||
Other non-operating income, net | (1,872,913 | ) | (5,645 | ) | (6,254,205 | ) | (40,191 | ) | |||||||
Loss on extinguishment of debt | — | — | 169,219 | 350,691 | |||||||||||
Impairment of content assets | 3,973,878 | — | 3,973,878 | — | |||||||||||
Transitional expenses | — | 629,731 | 4,353,345 | 3,505,855 | |||||||||||
All other nonrecurring costs | 660,907 | (287,840 | ) | 1,789,569 | 276,400 | ||||||||||
Adjusted EBITDA | $ | 2,807,550 | $ | 5,850,136 | $ | 11,751,579 | $ | 5,953,528 | |||||||
Source: Chicken Soup for the Soul Entertainment, Inc.