Cinedigm
Digital Cinema Corp. Announces Best Financial Performance in Company's History
for Second Quarter and First Half of Fiscal 2012
November 11, 2011
Source: Cinedigm Revenues
and Adjusted EBITDA for the Second Quarter Increase 56% and 62% Respectively,
and for the First Half of Fiscal 2012 Increase 44% and 47%, Respectively Cinedigm
Digital Cinema Corp. reported record financial performance for the second quarter and first half
of fiscal 2012, ended September 30, 2011.
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The Company also announced outstanding
operational progress, highlighted by the largest quarter of digital cinema installations
in its history with 1,427 screen deployments recorded, a 122% increase over the
previous record which occurred in the first quarter of this fiscal year.
Revenues
from continuing operations for the second quarter were a record $23.5 million,
representing a 55.6% increase from the comparable prior year second quarter revenues
of $15.1 million. The strong quarter reflected outstanding growth across all divisions.
The Company posted record Adjusted EBITDA(1) (defined below) from continuing
operations of $16.7 million in the second quarter, a comparable increase of 62.3%
from the prior year.
The net loss from continuing operations in the quarter
was ($1.0) million, or ($0.03) per share, which compares to the net loss from
continuing operations of ($8.8) million, or ($0.29) per share, in the second quarter
one year ago, and is a significant improvement over the comparable net loss of
($4.9) million or ($0.14) per share in the first quarter of fiscal 2012. The consolidated
net loss of ($0.2) million, or ($0.01) per share, in the quarter compares to a
consolidated net loss of ($10.8) million, or ($.36) per share, in the comparable
prior year period.
For the first six months of fiscal 2012, revenues from
continuing operations increased 43.9% to $43.9 million, as compared to $30.5 million
for the same period one year earlier. Adjusted EBITDA(1) (defined below) from
continuing operations for the year to date was $30.0 million, which is 47.3% ahead
of the $20.4 million in the first half of the prior year. The net loss from continuing
operations for the first six months of the fiscal year was ($5.9) million or ($.17)
per share, which favorably compares to a net loss from continuing operations of
($15.4) million or ($.52) per share one year earlier.
The consolidated
net loss of ($6.6) million or ($.19) per share for the first six months of the
fiscal year compares to a consolidated net loss of ($17.9) million or ($.60) per
share in the comparable prior year period.
Cinedigm also reported a record
level of Adjusted EBITDA from its continuing non-deployment businesses of $3.0
million in the second quarter, as compared to ($0.3) million in the prior year
period. For the first six months of fiscal 2012, adjusted EBITDA from continuing
non-deployment businesses was $3.5 million, representing a $4.7 million increase
over the ($1.2) million recorded in the first half of the prior year.
Results
for the current quarter and the previous quarters have been restated to reflect
the sale of Unique Screen Media to Screenvision, LLC on September 1, 2011 and
its resulting reclassification under GAAP as a discontinued operation.
"The
first six months of fiscal 2012 was by far the most successful financial and operational
performance period in the history of Cinedigm," commented Chris McGurk, Chairman
and Chief Executive Officer. "Besides setting financial records for the Company
on all of our key performance measures, we made significant strides from an operational
standpoint by achieving a record level of digital cinema deployments, signing
several major software clients and expanding our content distribution pipeline.
These achievements reflect our commitment to transform Cinedigm to aggressively
leverage the growing worldwide digital cinema platform. In that regard, during
the quarter we divested our non-core pre-show advertising unit and signed an agreement
to sell our non-core digital content delivery unit. As part of these transactions,
we created strategic software licensing and content distribution partnerships
with the buyers, Screenvision and Technicolor, respectively. These partnerships
should help strengthen growth prospects for our core software and content distribution
businesses."
"Going forward, we will continue to strongly support
our deployment program while we focus our energies on our software and content
distribution businesses, both of which are high growth, high multiple businesses
where we can be the clear market leader," Mr. McGurk explained. "We
are optimistic that the business momentum generated by our strong results reported
in the first half of this year -- indeed for the past four fiscal quarters --
will build for the foreseeable future as we continue to transform the company
and evaluate additional accretive strategic growth opportunities."
Adam
M. Mizel, recently named Chief Operating Officer of Cinedigm in addition to his
position as Chief Financial Officer, added, "The first half of fiscal 2012
was extremely gratifying operationally and financially. The rapid expansion of
our digital screen conversions in the year to date exceeded our expectations as
exhibitors rushed to embrace the benefits of digital cinema and complete installations
ahead of the September 2012 studio imposed installation deadline. We now have
deployed 2,069 digital systems to date in fiscal 2012 through our Phase II program,
bringing our total number of deployed Phase II systems to 4,265 as of September
30, 2011. In total from Phase 1 and Phase 2, we have 9,667 screens under license
agreement and 7,988 installed as of September 30, 2011."
"Cinedigm's
financial performance was equally strong," Mr. Mizel continued. "Revenues
and Adjusted EBITDA, both including and excluding the contributions of our Phase
I and Phase II programs, were at record levels. Highlighting our rapid turnaround,
the Adjusted EBITDA from our non-deployment businesses for the trailing twelve
months was $4.6 million, an $8.2 million increase as compared to ($3.6) million
in the previous twelve months. The record second quarter and first half adjusted
EBITDA registered for our non-deployment businesses signals the success of our
efforts to transform the company and aggressively build momentum in our core growth
businesses."
"Finally, we further enhanced our balance sheet
and financial capacity to support our continued growth, through a $6.9 million
private placement of common stock in July, and the recent closing of a $100.5
million non-recourse financing facility to support our exhibitors in the digital
conversion process. Our strong operating results and improved balance sheet position
us well for continued strong results in the quarters ahead," Mr. Mizel concluded.
(1) Adjusted EBITDA is defined by the Company to be earnings before interest,
taxes, depreciation and amortization, other income (expense), net, stock-based
compensation, allocated costs attributable to discontinued operations and non-recurring
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).
The Company calculated and communicated Adjusted
EBITDA in the tables because the Company's management believes it is of importance
to investors and lenders by providing additional information with respect to the
performance of its fundamental business activities. The Company's calculation
of Adjusted EBITDA may or may not be consistent with the calculation of this measure
by other companies in the same industry.
Investors should not view Adjusted
EBITDA as an alternative to the U.S. GAAP operating measure of net income (loss).
In addition, Adjusted EBITDA does not take into account changes in certain assets
and liabilities as well as interest and income taxes that can affect cash flows.
Management does not intend the presentation of these non-GAAP measures
to be considered in isolation or as a substitute for results prepared in accordance
with U.S. GAAP. These non-GAAP measures should be read only in conjunction with
the Company's consolidated financial statements prepared in accordance with U.S.
GAAP.
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