Chicken Soup for the Soul Entertainment Reports Record Q3 2021 Results
Growth driven by increased distribution, expanded offerings of original, exclusive, and overall library of content and new user platforms
Affirms 2021 revenue outlook
Board sets
“We delivered a strong quarter that increases our confidence that we can meet our 2021 goals, with record all-time revenue and the second-best Adjusted EBITDA performance in our history,” said
Third Quarter 2021 Financial Summary
- Net revenue of
$29.1 million , compared to$22.1 million in the second quarter of 2021, and$19.4 million in the year-ago period. The 50% year-over-year growth was driven by an increase in ad sales and licensing. Gross revenue for the third quarter was$29.6 million . - Net loss of
$16.7 million compared to a net loss of$11.1 million in the second quarter of 2021, and a net loss of$13.0 million in the year-ago period;$14.5 million net loss before preferred dividends, compared to an$8.8 million net loss in the second quarter 2021 and a$12.0 million net loss in the year-ago period. - Adjusted EBITDA of
$4.9 million compared to$3.2 million in the second quarter 2021, and$4.2 million in the year-ago period. Adjusted EBITDA growth was partially offset by investments in the Company’s recently launched technology platforms, marketing and employee compensation.
Recent Business Highlights
- Launched new free ad-supported streaming service, Chicken Soup for the Soul, which will use the beloved and internationally recognizable megabrand to bring its original mission of “Changing Your World One Story at a Time” to platforms around the world.
- Announced the formation of the Chicken Soup for the
Soul Television Group led by industry leaderDavid Ellender , which consolidates TV production activities and will help capitalize on the global appeal of the brand. - Made significant progress on international growth strategy with the acquisition of a majority stake in
Locomotive Global Inc. , a production company based inIndia , and the signing of an international VOD agreement withKeshet Broadcasting , the largest broadcaster inIsrael . - Increased Popcornflix’s viewership by 50% following the re-launch of its AVOD technology platform with a new user experience.
- Grew original and exclusive content to a record 22% of total ad impressions, including the recently integrated Sonar content.
- Sold out of ad inventory for the fourth quarter in a row and continued to drive advertising innovation by integrating ads with high-quality advertising partners.
Common Stock Repurchase Authorization
The Company’s Board of Directors today approved a two-year authorization for the repurchase of up to
Third Quarter Financial Highlights
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: Monday, November 8, 2021, 4:30 p.m. ET.
- Toll-free: (833) 832-5128
- International: (484) 747-6583
- Conference ID: 4036566
- A live webcast and replay will be available at https://ir.cssentertainment.com/ under the “News & Events” tab
Conference Call Replay Information
- Toll-free: (855) 859-2056
- International: (404) 537-3406
- Reference ID: 4036566
About Chicken Soup for the Soul
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), 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 Annual Report on Form 10-K for the year 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@rooneypartners.com
(212) 223-0561
Tables Follow
Chicken Soup for the |
||||||||
Condensed Consolidated Balance Sheets | ||||||||
2021 | 2020 | |||||||
(unaudited) | ||||||||
ASSETS | ||||||||
Cash and cash equivalents | $ | 66,947,955 | $ | 14,732,726 | ||||
Accounts receivable, net | 48,265,450 | 25,996,947 | ||||||
Prepaid expenses and other current assets | 2,113,322 | 1,382,502 | ||||||
41,286,849 | 21,448,106 | |||||||
Indefinite lived intangible assets | 12,163,943 | 12,163,943 | ||||||
Intangible assets, net | 18,976,226 | 19,370,490 | ||||||
Film library, net | 72,850,313 | 35,239,135 | ||||||
Due from affiliated companies | — | 5,648,652 | ||||||
Programming costs and rights, net | 15,440,246 | 15,781,183 | ||||||
Other assets, net | 4,876,056 | 4,517,102 | ||||||
Total assets | $ | 282,920,360 | $ | 156,280,786 | ||||
LIABILITIES AND EQUITY | ||||||||
9.50% Notes due 2025, net of deferred issuance costs of |
$ | 31,394,132 | $ | 31,097,467 | ||||
Notes payable under revolving credit facility | — | 2,500,000 | ||||||
Revolving loan | 17,585,699 | — | ||||||
Film acquisition advance | 6,241,534 | 8,659,136 | ||||||
Accounts payable and accrued other expenses | 39,431,948 | 21,394,957 | ||||||
Film library acquisition obligations | 24,752,229 | 8,616,562 | ||||||
Programming obligations | 1,641,250 | 4,697,316 | ||||||
Accrued participation costs | 22,864,494 | 12,535,651 | ||||||
Due to affiliated companies | 590,383 | — | ||||||
Put option obligation | 11,400,000 | — | ||||||
Other liabilities | 2,888,964 | 1,677,906 | ||||||
Total liabilities | 158,790,633 | 91,178,995 | ||||||
Equity | ||||||||
Stockholders' Equity: | ||||||||
Series A cumulative redeemable perpetual preferred stock, |
370 | 210 | ||||||
Class A common stock, |
881 | 516 | ||||||
Class B common stock, |
766 | 766 | ||||||
Additional paid-in capital | 238,708,111 | 106,425,548 | ||||||
Deficit | (114,056,757 | ) | (77,247,982 | ) | ||||
Class A common stock held in treasury, at cost (74,235 shares) | (632,729 | ) | (632,729 | ) | ||||
Total stockholders’ equity | 124,020,642 | 28,546,329 | ||||||
Subsidiary convertible preferred stock | — | 36,350,000 | ||||||
Noncontrolling interests | 109,085 | 205,462 | ||||||
Total equity | 124,129,727 | 65,101,791 | ||||||
Total liabilities and equity | $ | 282,920,360 | $ | 156,280,786 |
Chicken Soup for the |
||||||||||||||||
Condensed Consolidated Statements of Operations | ||||||||||||||||
(unaudited) | ||||||||||||||||
Three Months Ended |
Nine Months Ended |
|||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Net revenue | $ | 29,096,855 | $ | 19,361,751 | $ | 74,428,631 | $ | 46,126,364 | ||||||||
Cost of revenue | 22,856,374 | 14,840,851 | 54,533,027 | 37,684,786 | ||||||||||||
Gross profit | 6,240,481 | 4,520,900 | 19,895,604 | 8,441,578 | ||||||||||||
Operating expenses: | ||||||||||||||||
Selling, general and administrative | 15,038,299 | 9,301,550 | 35,237,480 | 23,194,223 | ||||||||||||
Amortization and depreciation | 1,538,650 | 4,576,742 | 4,114,355 | 15,022,885 | ||||||||||||
Management and license fees | 2,909,686 | 1,936,175 | 7,442,863 | 4,612,636 | ||||||||||||
Total operating expenses | 19,486,635 | 15,814,467 | 46,794,698 | 42,829,744 | ||||||||||||
Operating loss | (13,246,154 | ) | (11,293,567 | ) | (26,899,094 | ) | (34,388,166 | ) | ||||||||
Interest expense | 1,304,952 | 659,803 | 3,533,940 | 1,322,831 | ||||||||||||
Loss on extinguishment of debt | — | 169,219 | — | 169,219 | ||||||||||||
Acquisition-related costs | — | — | — | 98,926 | ||||||||||||
Other non-operating income, net | (101,898 | ) | (43,445 | ) | (247,037 | ) | (4,381,292 | ) | ||||||||
Loss before income taxes and preferred dividends | (14,449,208 | ) | (12,079,144 | ) | (30,185,997 | ) | (31,597,850 | ) | ||||||||
Provision for income taxes | 30,000 | 26,000 | 59,000 | 93,000 | ||||||||||||
Net loss before noncontrolling interests and preferred dividends | (14,479,208 | ) | (12,105,144 | ) | (30,244,997 | ) | (31,690,850 | ) | ||||||||
Net income (loss) attributable to noncontrolling interests | 9,085 | (73,135 | ) | 9,085 | (169,878 | ) | ||||||||||
Net loss attributable to Chicken Soup for the |
(14,488,293 | ) | (12,032,009 | ) | (30,254,082 | ) | (31,520,972 | ) | ||||||||
Less: preferred dividends | 2,253,385 | 1,017,691 | 6,760,155 | 2,966,235 | ||||||||||||
Net loss available to common stockholders | $ | (16,741,678 | ) | $ | (13,049,700 | ) | $ | (37,014,237 | ) | $ | (34,487,207 | ) | ||||
Net loss per common share: | ||||||||||||||||
Basic and diluted | $ | (1.04 | ) | $ | (1.04 | ) | $ | (2.53 | ) | $ | (2.83 | ) | ||||
Weighted-average common shares outstanding: | ||||||||||||||||
Basic and diluted | 16,145,808 | 12,508,643 | 14,622,787 | 12,174,779 |
Chicken Soup for the |
||||||||
Adjusted EBITDA | ||||||||
Three Months Ended |
||||||||
2021 | 2020 | |||||||
Net loss available to common stockholders | $ | (16,741,678 | ) | $ | (13,049,700 | ) | ||
Preferred dividends | 2,253,385 | 1,017,691 | ||||||
Provision for income taxes | 30,000 | 26,000 | ||||||
Other taxes | 62,279 | 97,466 | ||||||
Interest expense | 1,304,952 | 659,803 | ||||||
Film library and program rights amortization | 10,111,885 | 8,020,638 | ||||||
Share-based compensation expense | 3,474,231 | 346,773 | ||||||
Acquisition-related costs | 554,259 | 1,538,449 | ||||||
Reserve for bad debt and video returns | 1,921,982 | 4,960,074 | ||||||
Amortization and depreciation | (101,898 | ) | (43,445 | ) | ||||
Other non-operating income, net | — | 169,219 | ||||||
Transitional expenses | 213,813 | — | ||||||
All other nonrecurring costs | 1,775,232 | 472,322 | ||||||
Adjusted EBITDA | $ | 4,858,442 | $ | 4,215,290 | ||||
Nine Months Ended |
||||||||
2021 | 2020 | |||||||
Net loss available to common stockholders | $ | (37,014,237 | ) | $ | (34,487,207 | ) | ||
Preferred dividends | 6,760,155 | 2,966,235 | ||||||
Provision for income taxes | 59,000 | 93,000 | ||||||
Other Taxes | 250,626 | 202,117 | ||||||
Interest expense | 3,533,940 | 1,322,831 | ||||||
Film library and program rights amortization | 23,881,901 | 16,922,753 | ||||||
Share-based compensation expense | 3,937,919 | 820,881 | ||||||
Acquisition-related costs | — | 98,926 | ||||||
Reserve for bad debt & video returns | 2,156,308 | 4,072,785 | ||||||
Amortization and depreciation | 5,264,353 | 15,661,774 | ||||||
Other non-operating income, net | (247,037 | ) | (4,381,292 | ) | ||||
Loss on extinguishment of debt | — | 169,219 | ||||||
Transitional expenses | 405,867 | 4,353,345 | ||||||
All other nonrecurring costs | 3,583,130 | 1,128,662 | ||||||
Adjusted EBITDA | $ | 12,571,925 | $ | 8,944,029 |
Source: Chicken Soup for the Soul Entertainment, Inc.