10-Q
RLJ ENTERTAINMENT, INC. filed this Form 10-Q on 11/09/2017
Entire Document
 << Previous Page | Next Page >>

 

 

Distribution segment, which had a few higher than normal-margin licensing deals and lower content impairment charges during the second quarter of 2017.

 

Net loss was $9.9 million compared to $17.6 million during the nine months ended September 30, 2016. The variance is primarily improved gross profit of $5.8 million and the elimination of the $3.2 million loss from discontinued operations in 2016.

 

Adjusted EBITDA improved by $4.9 million to positive $6.9 million from the nine months ended September 30, 2016. This improvement is primarily attributable to the continued growth of the Digital Channels segment, which delivers a higher profit margin, stronger Wholesale Distribution segment performance and higher equity earnings from ACL.

 

On June 20, 2017, we broadened our strategic partnership with AMC Networks, Inc. (or AMC) to accelerate our content investments and other strategic initiatives, expanded the AMC Tranche A Loan from $13.0 million to $23.0 million and converting the form of interest payments entirely into common stock at a fixed conversion price of $3.00 per share on both the Tranche A Loan and Tranche B Loan. AMC also exercised $5.0 million of its Tranche A Warrants into RLJE common stock at $3.00 per common share. Additionally, dividend payments on the preferred stock, held by the chairman of the board of directors, were eliminated through 100% conversion of his preferred stock to common stock at $3.00 per share.

The highlights above and the discussion below are intended to identify some of our more significant results and transactions during the three and nine months ended September 30, 2017 and should be read in conjunction with our consolidated financial statements and related discussions within this Quarterly Report. Adjusted EBITDA is defined below in this Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations, Adjusted EBITDA.

RESULTS OF OPERATIONS

A summary of our results of operations for the three and nine months ended September 30, 2017 and 2016, as disclosed in our consolidated financial statements in Item 1, Financial Statements, is as follows:

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

(In thousands)

 

2017

 

 

2016

 

 

2017

 

 

2016

 

Revenues

 

$

20,900

 

 

$

18,351

 

 

$

53,620

 

 

$

51,882

 

Costs of sales

 

 

12,712

 

 

 

11,312

 

 

 

30,922

 

 

 

34,988

 

Gross profit

 

 

8,188

 

 

 

7,039

 

 

 

22,698

 

 

 

16,894

 

Operating expenses

 

 

9,872

 

 

 

7,435

 

 

 

26,047

 

 

 

22,545

 

Loss from continuing operations

 

 

(1,684

)

 

 

(396

)

 

 

(3,349

)

 

 

(5,651

)

Equity in earnings of affiliate

 

 

1,723

 

 

 

990

 

 

 

3,143

 

 

 

2,198

 

Interest expense, net

 

 

(2,288

)

 

 

(2,222

)

 

 

(6,326

)

 

 

(6,617

)

Change in fair value of stock warrants and other derivatives

 

 

(264

)

 

 

(1,222

)

 

 

(3,647

)

 

 

(3,406

)

Gain on extinguishment of debt

 

 

 

 

 

 

 

 

470

 

 

 

 

Other income (expense), net

 

 

169

 

 

 

(42

)

 

 

614

 

 

 

(772

)

Provision for income taxes

 

 

(372

)

 

 

(151

)

 

 

(848

)

 

 

(192

)

Loss from continuing operations, net of income taxes

 

 

(2,716

)

 

 

(3,043

)

 

 

(9,943

)

 

 

(14,440

)

Loss from discontinued operations, net of income taxes

 

 

 

 

 

(917

)

 

 

 

 

 

(3,169

)

Net loss

 

$

(2,716

)

 

$

(3,960

)

 

$

(9,943

)

 

$

(17,609

)

 

29


 << Previous Page | Next Page >>