February 12, 2015Cinedigm Announces Third Quarter Fiscal 2015 Financial Results Multi-platform OTT Digital Network CONtv to Launch March 3
LOS ANGELES--(BUSINESS WIRE)-- Cinedigm Corp. (NASDAQ: CIDM) today announced financial results for the third quarter of fiscal 2015, which ended December 31, 2014.
Consolidated revenues were $31.3 million compared to $23.7 million in the second quarter and $34.9 million in the prior year quarter
Consolidated adjusted EBITDA was $15.7 million compared to $12.4 million in the second quarter and $17.7 million in the prior year quarter
Non-deployment revenues (Entertainment and Services) were $19.2 million compared to $11.9 million in the second quarter and $22.2 million in the prior year quarter.
Non-deployment adjusted EBITDA was $3.7 million compared to $1.2 million in the second quarter and $5.6 million in the prior year quarter
We are pleased with this quarters results, said Chris McGurk, Chairman and CEO. Our release pipeline continues to fill with original, cast-driven films that can be leveraged across all our platforms, from theatrical to digital to the emerging OTT channels. Our OTT business is accelerating with CONtv launching March 3 and our faith and family Dove Entertainment Channel scheduled for launch in summer 2015. Our recent announcements regarding an OTT partnership with TV4 Entertainment and the planned launch of the new BRIGHT Edutainment OTT channel further solidify our strategy to create a diversified portfolio of digital networks. All-in-all, we are seeing success both financially and operationally and are excited about the future.
Operational Highlights
In last 12 months, signed new distribution deals for 74 original, cast-driven films, rapidly filling the release pipeline and providing an increased flow of new content to all platforms. New partners include The Asylum, American International Pictures, Great Point Media, Brand Entertainment, Moguldom and more;
Physical net product sales were strong in the holiday season, as Cinedigm secured solid retailer placements and implemented successful marketing tactics;
Cinedigms OTT digital network, CONtv, in partnership with Wizard World Comic Con, is scheduled to launch on March 3rd with nearly 1,500 hours of premium content, original series and Comic Con footage secured for the program lineup; and
Subsequent to quarter end, announced an OTT partnership with TV4 Entertainment and the planned launch of the BRIGHT Edutainment OTT channel, adding to Cinedigms diversified portfolio of digital networks.
Third Quarter Fiscal 2015 Detailed Results
Consolidated revenues were $31.3 million compared to $23.7 million in the second quarter and $34.9 million in the prior year quarter. Phase 1 and Phase 2 Deployment revenues decreased by 5% for the three months ended December 31, 2014 as virtual print fees were impacted by a reduced releasing calendar in the current fiscal quarter as compared to the prior year fiscal quarter.
Cinedigms entertainment business continued to generate solid progress over the last 2 quarters although net sales did decline by $2.6 million, or 14%, for the three months ended December 31, 2014 as compared to the prior year period. The Company has signed a significant volume of new co-production business this year that we expect will contribute to growth in fiscal year 2016 but did not fully offset certain underperforming customer contracts, which are now terminated. In addition, industry wide changes in consumer behavior continue to impact physical sales of entertainment content.
The Company reported consolidated adjusted EBITDA of $15.7 million compared to $12.4 million in the second quarter and $17.7 million in the prior year quarter. Adjusted EBITDA from non-deployment business (Entertainment and Services) was $3.7 million compared to $1.2 million in the second quarter and $5.6 million in the prior year quarter.
The Company paid down $14.5 million of non-recourse and corporate debt in the quarter, with $43.6 million of total debt paid down in the first nine months of the fiscal year.
The solid rebound in Cinedigms performance continued in our fiscal third quarter as we have rebuilt the release pipeline since last years GVE acquisition, commented Adam Mizel, Chief Operating Officer. In addition, CONtv will launch March 3rd as one of the largest OTT channels in terms of hours of content available. Enthusiasm within the Comic Con audience is growing and we will be aggressively pursuing customers at the busy spring and summer Wizard World Comic Cons.
Third quarter is a seasonally strong quarter, and we are pleased that net retail sales of physical products performed very well for us. Clearly, the transition challenges earlier this fiscal year are behind us, said Jeffrey Edell, Chief Financial Officer. Now, as we enter our seasonally slowest quarter, our focus is on maintaining sell in and managing returns, all while continuing to invest in OTT.
Adjusted EBITDA is defined by the Company for the periods presented to be earnings before interest, taxes, depreciation and amortization, other income, net, stock-based compensation and expenses, restructuring, transition and acquisitions expenses, net, and certain other items. Pursuant to the requirements of Regulation G, the Company has provided a reconciliation in the tables attached to this release of adjusted EBITDA to U.S. GAAP net income (loss). Adjusted EBITDA is not a measurement of financial performance under accounting principles generally accepted in the United States of America and may not be comparable to other similarly titled measures of other companies. The Company calculated and communicated adjusted EBITDA in the tables because the Companys management believes it is of importance to investors and lenders by providing additional information with respect to the performance of its
