8-K
RLJ ENTERTAINMENT, INC. filed this Form 8-K on 11/09/2017
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RLJ ENTERTAINMENT, INC.

UNAUDITED Adjusted EBITDA

Three and Nine Months Ended September 30, 2017 and 2016

 

 

We define “Adjusted EBITDA” as earnings before income tax, depreciation, amortization, non-cash royalty expense, interest expense, non-cash exchange gains and losses on intercompany accounts, goodwill impairments, severance costs, change in fair value of stock warrants and other derivatives, stock-based compensation, basis-difference amortization in equity earnings of affiliate and dividends received from affiliate in excess of equity earnings of affiliate.  Management believes Adjusted EBITDA to be a meaningful indicator of our performance that provides useful information to investors regarding our financial condition and results of operations because it removes material non-cash items that allows investors to analyze the operating performance of the business using the same metric management uses.  The exclusion of non-cash items better reflects our ability to make investments in the business and meet obligations.  Presentation of Adjusted EBITDA is a non-GAAP financial measure commonly used in the entertainment industry and by financial analysts and others who follow the industry to measure operating performance.  Management uses this measure to assess operating results and performance of our business, perform analytical comparisons, identify strategies to improve performance and allocate resources to our business segments. While management considers Adjusted EBITDA to be an important measure of comparative operating performance, it should be considered in addition to, but not as a substitute for, net income and other measures of financial performance reported in accordance with U.S. GAAP. Not all companies calculate Adjusted EBITDA in the same manner and the measure, as presented, may not be comparable to similarly-titled measures presented by other companies.

The following table includes the reconciliation of our consolidated U.S. GAAP net loss to our consolidated Adjusted EBITDA:

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

(In thousands)

 

2017

 

 

2016

 

 

2017

 

 

2016

 

Net loss

 

$

(2,716

)

 

$

(3,960

)

 

$

(9,943

)

 

$

(17,609

)

Interest expense

 

 

2,288

 

 

 

2,222

 

 

 

6,326

 

 

 

6,617

 

Provision for income tax

 

 

372

 

 

 

151

 

 

 

848

 

 

 

192

 

Depreciation and amortization

 

 

974

 

 

 

831

 

 

 

2,751

 

 

 

2,100

 

Basis-difference amortization in equity earnings of

   affiliate

 

 

117

 

 

 

117

 

 

 

342

 

 

 

373

 

Change in fair value of stock warrants and other

   derivatives

 

 

264

 

 

 

1,222

 

 

 

3,647

 

 

 

3,406

 

Stock-based compensation

 

 

696

 

 

 

277

 

 

 

1,208

 

 

 

887

 

Restructuring

 

 

200

 

 

 

 

 

 

8

 

 

 

 

Loss from discontinued operations

 

 

 

 

 

917

 

 

 

 

 

 

3,169

 

Foreign currency exchange gain on intercompany

   accounts

 

 

(165

)

 

 

76

 

 

 

(640

)

 

 

900

 

Non-cash royalty expense

 

 

881

 

 

 

963

 

 

 

2,397

 

 

 

2,001

 

Adjusted EBITDA

 

$

2,911

 

 

$

2,816

 

 

$

6,944

 

 

$

2,036

 

 

 

 

6

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