Net Loss Reduced by $4.0 million or 53%; OTT Channel Revenues Up 23%; Strategic Transition to OTT Business Model Continues
LOS ANGELES, Nov. 14, 2018 (GLOBE NEWSWIRE) -- Cinedigm Corp. (NASDAQ: CIDM) today announced financial results for the second quarter fiscal 2019, which ended September 30, 2018.
Key Second Quarter Financial Results:
Consolidated revenues were $13.7 million, down 16% due to the expected decline in the legacy cinema equipment business (down 31%)
OTT channel revenues were up 23% year-over-year
Net loss to common stockholders was reduced by $4.0 million, a 53% improvement versus the prior year quarter
Total Content and Entertainment EBITDA improved 12% versus the prior year quarter and 11% over the first quarter of this year
Key Business Highlights:
Forged partnership with leading Chinese streaming channel Youku to exclusively distribute 30 original feature films to all platforms in North America
Expanded OTT ad-supported footprint by launching Cinedigm's portfolio of streaming networks on Xumo, a free linear and on-demand service integrated with key smart TV OEM brands including LG, Hisense, Sharp, Marnavox and Phillips, among others.
Launched Cinedigm subscription OTT Networks on Dish Network's Subscription on Demand' offering available to nearly 10 million subscribers, as well as their virtual MVPD offering SlingTV, with more than 2.37 million subscribers.
Announced a partnership to bring Cinedigm's portfolio of streaming channels to Tubi, one of the fastest growing and largest free streaming services in the OTT landscape.
Expanded content library with several premium acquisitions including 10 Seasons of the popular family drama Heartland, the worldwide distribution rights to THE AURORA GAMES and North American distribution rights to the military film drama, SGT. WILL GARDNER, to be released in select theatres, on demand and digital, in January 2019
Announced partnership with Mark Yellen Productions and Rosenbloom Entertainment to produce a multi-season television series about literary adventurer Emily Mickey Hahn, set in Shanghai and targeted as a China/U.S.co-production
Announced planned early 2019 launch of BAMBU, a new Chinese streaming channel targeting English-speaking Millennial and Gen-Z viewers with digital and theatrical films, series, animation and reality programming.
We expanded our footprint during the quarter through a number of new OTT streaming platform deals and further enriched our content library with the acquisition of new premium programming, said Chris McGurk, Chairman and CEO. By investing in a breadth of quality programming and making it available across a variety of platforms, we continue to position Cinedigm as a key player in reaching OTT streaming viewers and advertisers. Our unique approach to bilateral distribution of content and streaming channels through strategic U.S. and China partnerships gives us a clear advantage over other players in the industry in the two biggest entertainment markets in the world that also have the largest and fastest growing OTT footprints.
Mr. McGurk added, Our interactions in the China market reinforce our view of the massive opportunity for the flow of movies, TV and other digital programming into and out of China. The partnerships we are establishing with high-quality entertainment partners are opening a number of gateways for the creation and acquisition of additional revenue sources. Our recently announced partnership with Youku to distribute 30 original Chinese feature films in North America on all key platforms, as well as the planned launch of Chinese-content channel Bambu, are key examples of the progress we are making with our China strategy.
Jeffrey Edell, Chief Financial Officer, added, The run-off of our legacy cinema equipment business, while contracted and expected, provides us with a predictable financial profile as we continue to invest in the strategic transition of our business to higher growth, higher margin OTT revenue streams with a focus on the highly disruptive and fast-growing ad-supported sector, which is projected to be a $50 billion worldwide business by 2022. We also have invested significantly in our new content rights management and OTT technology solutions, which we believe will significantly transform the process in which we and our streaming partners will ingest and distribute content, thereby reducing the time and cost of cataloging the content we acquire, materially reducing the delivery time to a growing number of platforms and generating substantial SAAS revenues for Cinedigm.
Financial Summary
Revenue
Revenue for the three months ended September 30, 2018 was $13.7 million, compared to $16.3 million for the year ago period. This decrease was driven by lower cinema equipment deployment and services revenue derived from virtual print fees ( VPF ) in our legacy business, which are earned when movies distributed by studios are displayed on screens utilizing the Company's systems that are installed in movie theatres. The Company continues to shift its strategy toward building a portfolio of revenue streams in the OTT business as the cinema equipment business winds down.
Direct Operating Expenses
Direct operating expenses for the second quarter of fiscal 2019 decreased by 11% to $3.6 million compared to $4.0 million for the year ago period. The decrease was primarily due to a reduction in content advance amortization in the company's Content & Entertainment business segment.
Selling, general and administrative expenses
Selling, general and administrative expenses increased by $240,000, or 4%, to $6.5 million for the three months ended September 30, 2018 compared to $6.2 million for the three months ended September 30, 2017.
Interest expense, net
Net interest expense decreased by $1.4 million, or 35%, to $2.6 millio
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Net Loss Reduced by $4.0 million or 53%; OTT Channel Revenues Up 23%; Strategic Transition to OTT Business Model Continues
