COS COB, Conn., March 30, 2020 (GLOBE NEWSWIRE) — Chicken Soup for the Soul Entertainment, Inc. (Nasdaq: CSSE), one of the largest operators of streaming advertising-supported video-on-demand (AVOD) networks, today announced its financial results for the fourth quarter and full year ended December 31, 2019.
Fourth Quarter 2019 Financial HighlightsRecord net revenue of $24.4 million, compared to $11.6 million in the year-ago periodNet loss of $12.4 million compared to net income of $0.8 million in the year-ago period; $11.4 million net loss before preferred dividends, compared to $1.5 million in net income before preferred dividends in the year-ago periodAdjusted EBITDA was $5.8 million, compared to $5.2 million in the year-ago periodOnline networks, which include Crackle, Popcornflix and Pivotshare generated $14.9 million in revenue compared to $1.1 million in the year-ago periodFull Year 2019 Financial HighlightsRecord net revenue of $55.4 million, compared to $26.9 million in the year-ago periodNet loss of $35.0 million compared to $2.0 million in the year-ago period; $31.7 million net loss before preferred dividends, compared to $0.8 million net loss before preferred dividends in the year-ago periodAdjusted EBITDA was $6.0 million, compared to $10.0 million in the year-ago periodOnline networks generated $40.0 million in revenue compared to $4.4 million in the year-ago period“We delivered results well ahead of expectations, including record fourth quarter and full year 2019 revenue and improved fourth quarter Adjusted EBITDA, as compared to fourth quarter 2018, in what was a transformative year for the company,” said William J. Rouhana Jr., chairman and chief executive officer of Chicken Soup for the Soul Entertainment. “Our growth was driven by continued outperformance from our Crackle Plus networks, including contributions from our original content library, as well as strong early results from our new Distribution and Production business model. While the near-term environment is uncertain amid the global pandemic, we’ve seen continued momentum in the business to date and we are supported by a solid and flexible balance sheet.”2019 Business HighlightsCompleted the Sony/Crackle transaction, and put Crackle Plus on track for sustained profitable growth while growing viewers over 55% from May to December;Launched Landmark Studio Group with industry veteran David Ozer, an example of the new distribution and production model;Continued to build the valuable Screen Media library with the acquisition of the Foresight Media film library and a new international partnership with Mark Damon;Produced and distributed the most successful piece of original content in the company’s history with Going From Broke; andSigned new ad sales partnerships in Q4 with Crunchyroll, Xumo, and Jukin Media.Total net revenue for the 12 months ended December 31, 2019 was $55.4 million compared to $26.9 million in the year-ago period. The increase was primarily driven by the results in our Online Networks operations area. Revenue in 2019 was generated as follows:Online networks (Crackle Plus) generated $40.0 million in revenue compared to $4.4 million in the year-ago periodTelevision and film distribution generated $16.0 million, compared to $13.2 million in the year-ago periodTelevision and short-form video production generated $0.6 million, compared to $10.2 million in the year-ago period, reflecting the short-term impact of the transition to the company’s new distribution and production business modelGross profit for the 12 months ended December 31, 2019 was $14.9 million, or 27% of net revenue, compared to $14.5 million, or 54% of net revenue for the year-ago period. The change in the percentage of gross profit resulted in part from $10.2 million of non-cash amortization of the film library in the company’s traditional distribution business, which is required by GAAP to be included in cost of revenue. Without this non-cash film library amortization expense, the gross profit would have been $25.1 million or 45% of total net revenue, which is well in excess of last year.Operating loss for the 12 months ended December 31, 2019 was $26.1 million compared to an operating income of $0.8 million for the year-ago period. Without this film library amortization expense, the operating loss would have been $15.4 million.Adjusted EBITDA for the 12 months ended December 31, 2019 was $6.0 million compared to $10.0 million in 2018.As of December 31, 2019, the company had $6.4 million of cash and cash equivalents, compared to $6.2 million as of September 30, 2019, and $7.2 million as of December 31, 2018. Outstanding debt was $20.0 million as of December 31, 2019 compared to $7.6 million outstanding as of December 31, 2018.The company will file an annual report on Form 10-K with the SEC with respect to its annual financial results.For a discussion of the financial measures presented herein which are not calculated or presented in accordance with U.S. generally accepted accounting principles (“GAAP”), see “Note Regarding Use of Non-GAAP Financial Measures” below and the schedules to this press release for additional information and reconciliations of non-GAAP financial measures.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 InformationDate, Time: Monday, March 30, 2020, 4:30 p.m. E.T.Toll-free: (833) 832-5128International: (484) 747-6583Conference ID: 9597934A live webcast and replay will be available at http://ir.cssentertainment.com/ under the “News & Events” tabConference Call Replay InformationToll-free: (855) 859-2056International: (404) 537-3406Reference ID: 9597934ABOUT CHICKEN SOUP FOR THE SOUL ENTERTAINMENTChicken Soup for the Soul Entertainment, Inc. (Nasdaq: CSSE) operates streaming video-on-demand networks (VOD). The company owns a majority stake in Crackle Plus, a company formed with Sony Pictures Television, which owns and operates a variety of ad-supported and subscription-based VOD networks including Crackle, Popcornflix, Popcornflix Kids, Truli, Pivotshare, Españolflix and FrightPix. The company also acquires and distributes video content through its Screen Media subsidiary and produces original long and short-form content through Landmark Studio Group, its Chicken Soup for the Soul Originals division and APlus.com. Chicken Soup for the Soul Entertainment is a subsidiary of Chicken Soup for the Soul, LLC, which publishes the famous book series and produces super-premium pet food under the Chicken Soup for the Soul brand name.Note Regarding Use of Non-GAAP Financial MeasuresThe company’s consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). It uses a non-GAAP financial measure to evaluate its results of operations and as a supplemental indicator of operating performance. The non-GAAP financial measure that is used is Adjusted EBITDA. Adjusted EBITDA (as defined below) is considered a non-GAAP financial measure as defined by Regulation G promulgated by the SEC under the Securities Act of 1933, as amended. Management believes this non-GAAP financial measure enhances the understanding of the company’s historical and current financial results and enables the board of directors and management to analyze and evaluate financial and strategic planning decisions that will directly affect operating decisions and investments. The presentation of Adjusted EBITDA should not be construed as an inference that future results will be unaffected by unusual 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, the company’s actual operating results included in its condensed consolidated financial statements.“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 December 31, 2019 under “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Reconciliation of Unaudited Historical Results to Adjusted EBITDA.”FORWARD-LOOKING STATEMENTSThis 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 Securities and Exchange Commission on March 30, 2020) and uncertainties which could cause actual results to differ from the forward-looking statements. The company expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the company’s expectations with respect thereto or any change in events, conditions or circumstances on which any statement is based. Investors should realize that if our underlying assumptions for the projections contained herein prove inaccurate or that known or unknown risks or uncertainties materialize, actual results could vary materially from our expectations and projections.INVESTOR RELATIONS
Taylor Krafchik
Ellipsis
[email protected]
646-776-0886MEDIA CONTACT
Kate Barrette
RooneyPartners LLC
[email protected]
(212) 223-0561Tables Follow


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