YOU On Demand Reports 2013 Results; Provides Update On Ongoing Operational Progress
- Management to Host Call at 4:30 p.m. ET -
NEW YORK, March 31, 2014 /PRNewswire/ -- YOU On Demand Holdings, Inc. (NASDAQ: YOD) ("YOU On Demand" or the "Company" or "YOD"), a leading multi-platform entertainment and Video On Demand ("VOD") company in China, announced today its year-end operating results for the period ended December 31, 2013 (a full copy of the Company's annual report on Form 10-K is also being posted at www.sec.gov).
Conference Call: Chairman Shane McMahon and Chief Financial Officer & President Marc Urbach will host a conference call at 4:30 p.m. ET (1:30 p.m. PT) today. The dial-in numbers are 800.734.4208 or (+1) 212.231.2900 (international callers).
Recent Highlights
- In early February 2014, C Media Limited, a leading China-based mobile video service provider, led an investment into YOU On Demand of $19 million USD cash, raising the total C Media-led investment stake to $25.0 million USD.
- In conjunction with C Media's recent investment, three new directors (Mr. Jin Shi, Mr. Clifford Higgerson and Mr. Arthur Wong) were appointed to YOD's board of directors, replacing two departing directors.
- The Company forged arrangements with leading movie studios to include feature films – new releases and library titles – via YOU On Demand's newly launched mobile application (App), YOU Cinema. The App will offer both Transactional (TVOD) and Subscription-based (SVOD) options as YOD does on other platforms.
- Kevin Lin was appointed Chief Technology Officer, bringing more than two decades of relevant industry experience and will be responsible for all facets of technology development, including product management and marketing, content production and operations. Prior to joining YOU On Demand, Kevin served as a principal architect at Huawei's Silicon Valley Research Labs, advising internally on key technology disruptions and major shifts.
- YOD announced partnerships with Sesame Workshop, HiT Enterprises and Nelvana, three of the world's leading producers of family-friendly entertainment, to offer Chinese consumers subscription-based content on its YOU Kids On Demand service ("YOU Kids"), slated to launch later this year.
Weicheng Liu, CEO, commented, "Backed by C Media's support, we continue to make progress on a number of fronts, including our successful recent expansion onto the mobile entertainment distribution platform. Our YOU Cinema App is now being prominently displayed on Huawei's Mate Smartphones, generating increasing levels of consumer interest for new and library movie titles from two of our leading Hollywood studio partners, Paramount and Disney.
"We are also delighted that three new partners are providing us with some of the most popular and compelling children's television programming. We are presently working out the logistics of this subscription-based offering with Sesame Workshop, HiT Enterprises and Nelvana and will have further details when YOU Kids is ready for its official debut. With a growing array of available premium programming, YOD is building incremental brand awareness and is fast becoming synonymous with high quality entertainment offerings throughout China on an increasing number of digital platforms."
YOD 2013 Operating Results
Marc Urbach, YOU On Demand's President & CFO, commented, "Our 2013 results demonstrate YOD's ability to grow our VOD revenue as well as our ability to expand our business across new sources of revenue, including mobile. We are pleased to see our digital cable, OTT and IPTV VOD platforms continue to grow in popularity among consumers and excited about the promising start of YOU On Demand's mobile launch with our prominent Chinese partners. C Media's increased capital investment affords us a much stronger balance sheet and overall improved financial health that we believe will serve us well as we target achieving cash flow positive status in the near future given our comparatively lean and efficient operations."
It is important to note that YOU On Demand's financial results for the 2012 full-year period mainly reflect the operations of its now legacy business, Shandong Media. Those results were deconsolidated as of July 1, 2012 and are being accounted for under the equity method. In order to provide a more meaningful comparison of our financial results, our discussion of the Company's Consolidated Results of Operations in the Management's Discussion and Analysis of Financial Condition and Results of Operations section of the 10-K, utilizes Pro Forma 2012 financial information that excludes the impact of Shandong Media. Excluding the contribution from Shandong Media, revenues for the period ending December 31, 2012 totaled $5,000. That compares to revenues for the period ending December 31, 2013 of $0.3 million.
Total operating expenses declined 22% on a Pro Forma basis and the Company's reduced cost base along with a one-time net gain from discontinued operations, helped lead to an approximate 49% reduction in the annual net loss.
YOD's cash and cash equivalents balance at December 31, 2013 rose to $3.8 million, up from $3.3 million a year earlier, and this figure does not yet reflect the additional gross $19.0 million infusion from C Media and other investors, which was received during Q1 2014.
About YOU On Demand Holdings, Inc. (http://corporate.yod.com)
YOU On Demand (NASDAQ: YOD), is a leading multi-platform entertainment company delivering premium content, including leading Hollywood and China-produced movie titles, to customers across China via Subscription Video On Demand and Transactional Video On Demand. The Company has secured alliances with leading global media operators and content developers. YOU On Demand has content distribution agreements in place with many of Hollywood's top studios including Disney Media Distribution, Paramount Pictures, NBC Universal, Warner Bros., Miramax Films, Lionsgate and Magnolia Pictures, as well as a broad selection of the best content from Chinese filmmakers. The Company has a comprehensive end-to-end secure delivery system, governmental partnerships and approvals and offers additional value-added services. YOU On Demand has strategic partnerships with the largest media entities in China, a highly experienced management team with international background and expertise in Cable, Television, Film, Digital Media, Internet and Telecom. YOU On Demand is headquartered in New York, NY with its China headquarters in Beijing.
Safe Harbor Statement
This press release contains certain statements that may include "forward looking statements." All statements other than statements of historical fact included herein are "forward-looking statements." These forward looking statements are often identified by the use of forward-looking terminology such as "believes," "expects" or similar expressions, involve known and unknown risks and uncertainties. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company's periodic reports that are filed with the Securities and Exchange Commission and available on its website (http://www.sec.gov). All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.
| CONTACT: |
|
| Jason Finkelstein |
Robert Rinderman or Norberto Aja |
| YOU On Demand |
|
| 212-206-1216 |
212-835-8500 |
| The following table sets forth key components of our results of operations. |
Year Ended |
|||||
| December 31, |
December 31, |
|||||
| 2013 |
2012 |
|||||
| (Pro Forma) |
||||||
| Revenue |
$309,000 |
$5,000 |
||||
| Cost of revenue |
3,126,000 |
2,232,000 |
||||
| Gross loss |
(2,817,000) |
(2,227,000) |
||||
| Operating expense: |
||||||
| Selling, general and administrative expenses |
7,609,000 |
8,973,000 |
||||
| Professional fees |
706,000 |
1,046,000 |
||||
| Depreciation and amortization |
774,000 |
2,101,000 |
||||
| Impairments of long-lived assets |
311,000 |
- |
||||
| Total operating expense |
9,400,000 |
12,120,000 |
||||
| Loss from operations |
(12,217,000) |
(14,347,000) |
||||
| Interest & other income / (expense) |
||||||
| Interest income |
3,000 |
3,000 |
||||
| Interest expense |
(374,000) |
(78,000) |
||||
| Stock purchase right |
- |
(44,000) |
||||
| Cost of reset provision |
- |
(659,000) |
||||
| Change in fair value of warrant liabilities |
(466,000) |
647,000 |
||||
| Change in fair value of contingent consideration |
(252,000) |
1,313,000 |
||||
| Loss (gain) on investment in unconsolidated entities |
(3,000) |
68,000 |
||||
| Loss on investment write-off |
- |
(95,000) |
||||
| Loss on write-off of uncollectible loans |
- |
(40,000) |
||||
| Gain on deconsolidation of Shandong Media |
- |
142,000 |
||||
| Other |
56,000 |
(139,000) |
||||
| Loss from continuing operations |
||||||
| before income taxes and noncontrolling interests |
(13,253,000) |
(13,229,000) |
||||
| Income tax benefit |
111,000 |
344,000 |
||||
| Net loss from continuing operations |
(13,142,000) |
(12,885,000) |
||||
| Net gain (loss) from discontinued operations |
||||||
| (including gain on disposal of $5,616,269) |
5,255,000 |
(2,631,000) |
||||
| Net loss |
(7,887,000) |
(15,516,000) |
||||
| Net loss attributable to noncontrolling interests |
1,055,000 |
1,688,000 |
||||
| Net loss attributable to YOU On Demand shareholders |
(6,832,000) |
(13,828,000) |
||||
| Dividends on preferred stock |
(1,358,000) |
(924,000) |
||||
| Net loss attributable to YOU on Demand common shareholders |
$(8,190,000) |
$(14,752,000) |
||||
| Pro Forma Comparisons |
||||||
| Twelve Months Ended |
||||||
| December 31, |
Shandong Media |
Pro Forma |
||||
| 2012 |
6 months |
December 31. |
||||
| 2012 |
||||||
| (excluding |
||||||
| Revenue |
$1,701,000 |
$1,696,000 |
$5,000 |
|||
| Cost of revenue |
3,461,000 |
1,229,000 |
2,232,000 |
|||
| Gross (loss) profit |
(1,760,000) |
467,000 |
(2,227,000) |
|||
| Operating expense: |
||||||
| Selling, general and administrative expenses |
9,690,000 |
717,000 |
8,973,000 |
|||
| Professional fees |
1,046,000 |
- |
1,046,000 |
|||
| Depreciation and amortization |
2,159,000 |
58,000 |
2,101,000 |
|||
| Total operating expense |
12,895,000 |
775,000 |
12,120,000 |
|||
| Loss from operations |
(14,655,000) |
(308,000) |
(14,347,000) |
|||
| Interest & other income / (expense) |
||||||
| Interest income |
3,000 |
- |
3,000 |
|||
| Interest expense |
(78,000) |
- |
(78,000) |
|||
| Stock purchase right |
(44,000) |
- |
(44,000) |
|||
| Cost of reset provision |
(659,000) |
- |
(659,000) |
|||
| Change in fair value of warrant liabilities |
647,000 |
- |
647,000 |
|||
| Change in fair value of contingent consideration |
1,313,000 |
- |
1,313,000 |
|||
| Loss on investment in unconsolidated entities |
68,000 |
- |
68,000 |
|||
| Loss on investment write-off |
(95,000) |
- |
(95,000) |
|||
| Loss on write-off of uncollectible loans |
(513,000) |
(473,000) |
(40,000) |
|||
| Gain on deconsolidation of Shandong Media |
142,000 |
- |
142,000 |
|||
| Other |
(139,000) |
- |
(139,000) |
|||
| Loss before income taxes and noncontrolling interests |
(14,010,000) |
(781,000) |
(13,229,000) |
|||
| Income tax benefit |
353,000 |
9,000 |
344,000 |
|||
| Net loss from continuing operations |
(13,657,000) |
(772,000) |
(12,885,000) |
|||
| Net loss from discontinued operations |
(2,631,000) |
- |
(2,631,000) |
|||
| Net loss |
(16,288,000) |
(772,000) |
(15,516,000) |
|||
| Net loss attributable to noncontrolling interests |
2,074,000 |
386,000 |
1,688,000 |
|||
| Net loss attributable to YOU On Demand shareholders |
(14,214,000) |
(386,000) |
(13,828,000) |
|||
| Deemed dividends on preferred stock |
(924,000) |
- |
(924,000) |
|||
| Net loss attributable to YOU On Demand common shareholders |
$(15,138,000) |
$(386,000) |
$(14,752,000) |
|||
| - Financial Tables Follow - |
||||
| YOU On Demand Holdings, Inc. and Its Subsidiaries |
||||
| CONSOLIDATED STATEMENTS OF OPERATIONS |
||||
| 2013 |
2012(1) |
|||
| Revenue |
$ 308,695 |
$ 1,700,799 |
||
| Cost of revenue |
3,126,089 |
3,460,772 |
||
| Gross loss |
(2,817,394) |
(1,759,973) |
||
| Operating expense: |
||||
| Selling, general and administrative expenses |
7,608,742 |
9,689,763 |
||
| Professional fees |
705,692 |
1,046,095 |
||
| Depreciation and amortization |
774,480 |
2,159,149 |
||
| Impairments of long-lived assets |
311,249 |
- |
||
| Total operating expense |
9,400,163 |
12,895,007 |
||
| Loss from operations |
(12,217,557) |
(14,654,980) |
||
| Interest & other income / (expense) |
||||
| Interest income |
3,426 |
2,974 |
||
| Interest expense |
(374,178) |
(77,965) |
||
| Stock purchase right |
- |
(43,748) |
||
| Cost of reset provision |
- |
(658,719) |
||
| Change in fair value of warrant liabilities |
(466,060) |
647,302 |
||
| Change in fair value of contingent consideration |
(251,963) |
1,313,443 |
||
| Loss (gain) on investment in unconsolidated entities |
(2,741) |
67,675 |
||
| Loss on investment write-off |
- |
(95,350) |
||
| Loss on write-off of uncollectible loans |
- |
(513,427) |
||
| Gain on deconsolidation of Shandong Media |
- |
141,814 |
||
| Other |
55,831 |
(139,739) |
||
| Net loss from continuing operations |
||||
| before income taxes and noncontrolling interest |
(13,253,242) |
(14,010,720) |
||
| Income tax benefit |
111,266 |
354,294 |
||
| Net loss from continuing operations |
(13,141,976) |
(13,656,426) |
||
| Net gain (loss) from discontinued operations |
||||
| (including gain on disposal of $5,616,269 in 2013) |
5,255,474 |
(2,630,979) |
||
| Net loss |
(7,886,502) |
(16,287,405) |
||
| Plus: Net loss attributable to noncontrolling interests |
1,054,970 |
2,074,098 |
||
| Net loss attributable to YOU On Demand shareholders |
(6,831,532) |
(14,213,307) |
||
| Dividends on preferred stock |
(1,358,364) |
(924,132) |
||
| Net loss attributable to YOU on Demand common shareholders |
$ (8,189,896) |
$ (15,137,439) |
||
| Basic earnings (loss) per share |
||||
| Loss from continuing operations |
$ (0.89) |
$ (1.12) |
||
| Gain (loss) from discontinued operations |
0.35 |
(0.24) |
||
| Basic loss per shares |
$ (0.54) |
$ (1.36) |
||
| Diluted earnings (loss) per share |
||||
| Loss from continuing operations |
$ (0.89) |
$ (1.12) |
||
| Gain (loss) from discontinued operations |
0.35 |
(0.24) |
||
| Diluted loss per shares |
$ (0.54) |
$ (1.36) |
||
| Weighted average shares outstanding |
||||
| Basic |
15,226,216 |
11,099,746 |
||
| Diluted |
15,226,216 |
11,099,746 |
||
| 1) |
Financial results for the 2012 full-year period mainly reflect the operations of its legacy business, Shandong Media. Those results were deconsolidated as of July 1, 2012 and are being accounted for under the equity method. Excluding the contribution from Shandong Media, revenues for the period ending December 31, 2012 totaled $5,000. That compares to revenues for the period ending December 31, 2013 of $308,695. |
||||
| YOU On Demand Holdings, Inc. and Its Subsidiaries |
||||
| CONSOLIDATED BALANCE SHEETS |
||||
| 2013 |
2012 |
|||
| ASSETS |
||||
| Current assets: |
||||
| Cash and cash equivalents |
$3,822,889 |
$3,277,891 |
||
| Marketable equity securities, available for sale |
1,371 |
2,229 |
||
| Accounts receivable, net |
175,211 |
- |
||
| Licensed content, current |
428,322 |
681,457 |
||
| Prepaid expenses |
330,013 |
412,669 |
||
| Debt issuance costs, net |
128,879 |
- |
||
| Other current assets |
47,557 |
135,486 |
||
| Current assets of discontinued operations |
- |
1,498,852 |
||
| Total current assets |
4,934,242 |
6,008,584 |
||
| Property and equipment, net |
499,858 |
729,763 |
||
| Licensed content, noncurrent |
162,646 |
530,367 |
||
| Intangible assets, net |
2,621,527 |
3,416,858 |
||
| Goodwill |
6,105,478 |
6,105,478 |
||
| Investment in unconsolidated entities |
673,567 |
655,834 |
||
| Non-current assets of discontinued operations |
- |
5,011,161 |
||
| Total assets |
$14,997,318 |
$22,458,045 |
||
| LIABILITIES AND EQUITY |
||||
| Current liabilities: |
||||
| Accounts payable |
$656,545 |
$885,366 |
||
| Accrued expenses and liabilities |
1,046,920 |
953,134 |
||
| Deferred revenue |
68,969 |
- |
||
| Deferred license fees, current |
1,200,764 |
- |
||
| Other current liabilities |
29,024 |
708,367 |
||
| Contingent purchase price consideration liability, current |
578,744 |
368,628 |
||
| Convertible promissory note |
3,000,000 |
3,000,000 |
||
| Warrant liabilities |
1,344,440 |
878,380 |
||
| Current liabilities of discontinued operations |
- |
5,197,450 |
||
| Total current liabilities |
7,925,406 |
11,991,325 |
||
| Deferred license fees, noncurrent |
- |
460,547 |
||
| Contingent purchase price consideration liability |
- |
368,628 |
||
| Deferred tax liability |
125,809 |
237,075 |
||
| Convertible promissory note |
2,000,000 |
- |
||
| Non-current liabilities of discontinued operations |
- |
68,774 |
||
| Total liabilities |
10,051,215 |
13,126,349 |
||
| Commitments and Contingencies |
||||
| Convertible redeemable preferred stock, $.001 par value; 50,000,000 |
||||
| shares authorized |
||||
| Series A - 7,000,000 shares issued and outstanding, liquidation preference |
||||
| of $3,500,000 at December 31, 2013 and 2012, respectively |
1,261,995 |
1,261,995 |
||
| Series B - 0 and 7,866,800 shares issued and outstanding, liquidation preference |
||||
| of $0 and $3,933,400 at December 31, 2013 and 2012, respectively |
- |
3,223,575 |
||
| Series C - 87,500 and 250,000 shares issued and outstanding, liquidation preference |
||||
| of $350,000 and $1,000,000 at December 31, 2013 and 2012, respectively |
219,754 |
627,868 |
||
| Series D 4% - 2,285,714 and 0 shares issued and outstanding, liquidation preference |
||||
| of $4,000,000 and $0 at December 31, 2013 and 2012, respectively |
4,000,000 |
- |
||
| Equity: |
||||
| Common stock, $.001 par value; 1,500,000,000 shares authorized, 15,794,762 and |
15,794 |
13,742 |
||
| Additional paid-in capital |
67,417,025 |
62,388,502 |
||
| Accumulated deficit |
(65,856,053) |
(58,841,664) |
||
| Accumulated other comprehensive (loss) income |
(715,090) |
604,632 |
||
| Total YOU On Demand equity |
861,676 |
4,165,212 |
||
| Noncontrolling interests |
(1,397,322) |
53,046 |
||
| Total equity |
(535,646) |
4,218,258 |
||
| Total liabilities and equity |
$14,997,318 |
$22,458,045 |
||
SOURCE YOU On Demand Holdings, Inc.
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