YOU On Demand Reports 2014 Q2 Results
Investor Update Call Scheduled Today at 4:30 p.m. ET
NEW YORK, Aug. 14, 2014 /PRNewswire/ -- YOU On Demand Holdings, Inc. (NASDAQ: YOD) ("YOU On Demand" or the "Company"), a leading Video On Demand service provider in China delivering Hollywood movies to mobile and TV screens, today announced its operating results for the three- and six-month periods ended June 30, 2014 (a full copy of its quarterly report on Form 10-Q will be posted at www.sec.gov). Chairman Shane McMahon, CEO Weicheng Liu and President and CFO Marc Urbach are hosting an investor update conference call today at 4:30 p.m. ET to discuss the Company's recent results. To join the webcast, please visit the 'Webcasts and Events' section of the YOD corporate website, http://corporate.yod.com. Otherwise, the toll-free dial-in is: 877/407-3107; international callers should dial: 201/493-6796.
Shane McMahon, Chairman of YOU On Demand, commented, "During the first half of 2014 we successfully pivoted the Company's strategy and its resources to prioritize our IPTV, OTT and Mobile platforms. Given the exciting potential of these fast-growing distribution modes, which are increasingly popular amongst China's tech-savvy and most active consumers of entertainment, YOU On Demand expects to continue generating positive momentum from this strategic shift. As a result, we expect to generate both improved operating efficiencies and enhanced financial results during the second half of this year."
YOU On Demand CEO Weicheng Liu, stated, "Building on the growing popularity of our YOU Hollywood App with Huawei device users, Xiaomi OTT Box owners and other early adopters, we recently softly launched our Hollywood App independently via popular app stores and online channels. We believe select advertising, marketing and social media outreach, combined with word-of-mouth recommendations and endorsements from satisfied App users, will help promote our unique, differentiated service to an appreciative audience of China's most ardent movie fans."
YOU On Demand President & CFO Marc Urbach commented, "During this critical phase in our organization's corporate development, the senior financial and operations teams will continue striving to combine our strong, unlevered balance sheet, with conservative expense management and moderate levels of fixed overhead costs. There are many opportunities that lie ahead and we expect to best leverage these by maintaining our fiscally prudent strategy for the long-term benefit of the Company's shareholders."
2014 Q2 Operating Results
Revenue for the quarter ended June 30, 2014 increased to $183,000, up from $51,000 in the year-ago Q2 and up 33% over Q1 2014. Gross loss for the quarter declined to $674,000, down from $739,000 in the comparable 2013 period. Total operating expenses for the quarter fell 10.6% to $2.5 million, reflecting a combination of content revenue-sharing agreements and disciplined corporate overhead levels. The loss from operations of $3.2 million for the quarter was down from a $3.5 million loss from operations in the comparable 2013 period. The net loss from continuing operations for the quarter was $1.1 million – which included a $1.5 million change in the fair value of warrant liabilities – versus $3.5 million net loss from continuing operations in the comparable 2013 period. The net loss attributable to YOU on Demand shareholders amounted to $793,000, down from approximately $3.3 million net loss in Q2 2013. The basic and diluted per share loss was $0.05, compared to a $0.22 basic and diluted per share loss in the year-ago Q2.
Cash and cash equivalents increased from $3.8 million at December 31, 2013, to $15.6 million at June 30, 2014.
YOU On Demand is maintaining full-year 2014 revenue guidance of $3 million.
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.
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.
| CONTACT: |
|
| Jason Finkelstein |
Robert Rinderman or Norberto Aja |
| YOU On Demand |
|
| 212-206-1216 |
212-835-8500 |
– Financial Tables Follow –
| YOU On Demand Holdings, Inc., Its Subsidiaries and Variable Interest Entity |
||||||||
| UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS |
||||||||
| Three Months Ended |
Six Months Ended |
|||||||
| June 30, |
June 30, |
June 30, |
June 30, |
|||||
| 2014 |
2013 |
2014 |
2013 |
|||||
| Revenue |
$ 182,696 |
$ 50,619 |
$ 320,377 |
$ 51,557 |
||||
| Cost of revenue |
857,179 |
790,019 |
1,733,117 |
1,638,604 |
||||
| Gross loss |
(674,483) |
(739,400) |
(1,412,740) |
(1,587,047) |
||||
| Operating expense: |
||||||||
| Selling, general and administrative expenses |
2,270,657 |
2,073,537 |
3,911,297 |
4,050,767 |
||||
| Professional fees |
76,231 |
223,051 |
261,715 |
474,485 |
||||
| Depreciation and amortization |
139,590 |
173,394 |
289,550 |
466,227 |
||||
| Impairments of long-lived assets |
- |
311,249 |
- |
311,249 |
||||
| Total operating expense |
2,486,478 |
2,781,231 |
4,462,562 |
5,302,728 |
||||
| Loss from operations |
(3,160,961) |
(3,520,631) |
(5,875,302) |
(6,889,775) |
||||
| Interest & other income (expense): |
||||||||
| Interest expense, net |
(28,321) |
(29,704) |
(2,317,059) |
(59,064) |
||||
| Change in fair value of warrant liabilities |
1,501,632 |
(4,885) |
(937,386) |
(30,290) |
||||
| Change in fair value of contingent consideration |
589,994 |
(42,046) |
(113,132) |
(83,694) |
||||
| Gain (loss) on investment in unconsolidated entities |
(5,349) |
2,275 |
(10,257) |
(719) |
||||
| Gain (loss) on sale of subsidiary |
- |
- |
755,426 |
- |
||||
| Loss on dissolution of variable interest entity |
- |
- |
(27,463) |
- |
||||
| Other |
(15,015) |
71,777 |
(67,681) |
70,596 |
||||
| Net loss from continuing operations |
||||||||
| before income taxes and noncontrolling interest |
(1,118,020) |
(3,523,214) |
(8,592,854) |
(6,992,946) |
||||
| Income tax benefit |
32,495 |
29,821 |
55,437 |
60,961 |
||||
| Net loss from continuing operations |
(1,085,525) |
(3,493,393) |
(8,537,417) |
(6,931,985) |
||||
| Net loss from discontinued operations |
- |
(97,823) |
- |
(334,398) |
||||
| Net loss |
(1,085,525) |
(3,591,216) |
(8,537,417) |
(7,266,383) |
||||
| Plus: Net loss attributable to noncontrolling interests |
292,560 |
310,771 |
527,344 |
641,173 |
||||
| Net loss attributable to YOU On Demand shareholders |
(792,965) |
(3,280,445) |
(8,010,073) |
(6,625,210) |
||||
| Dividends on preferred stock |
- |
- |
(16,402,161) |
- |
||||
| Net loss attributable to YOU on Demand common shareholders |
$ (792,965) |
$ (3,280,445) |
$ (24,412,234) |
$ (6,625,210) |
||||
| Basic and diluted loss per share: |
||||||||
| Loss from continuing operations |
$ (0.05) |
$ (0.22) |
$ (1.50) |
$ (0.44) |
||||
| Loss from discontinued operations |
- |
nil |
- |
(0.01) |
||||
| Basic and diluted loss per share |
$ (0.05) |
$ (0.22) |
$ (1.50) |
$ (0.45) |
||||
| Weighted average shares outstanding: |
||||||||
| Basic and diluted |
16,598,990 |
14,938,780 |
16,267,036 |
14,771,261 |
||||
| YOU On Demand Holdings, Inc., Its Subsidiaries and Variable Interest Entity |
||||
| UNAUDITED CONSOLIDATED BALANCE SHEETS |
||||
| June 30, |
December 31, |
|||
| 2014 |
2013 |
|||
| ASSETS |
||||
| Current assets: |
||||
| Cash and cash equivalents |
$ 15,671,408 |
$ 3,822,889 |
||
| Accounts receivable, net |
182,601 |
175,211 |
||
| Licensed content, current |
725,450 |
428,322 |
||
| Prepaid expenses |
316,249 |
330,013 |
||
| Debt issuance costs, net |
- |
128,879 |
||
| Other current assets |
58,994 |
48,928 |
||
| Total current assets |
16,954,702 |
4,934,242 |
||
| Property and equipment, net |
428,812 |
499,858 |
||
| Licensed content, noncurrent |
79,868 |
162,646 |
||
| Intangible assets, net |
2,456,201 |
2,621,527 |
||
| Goodwill |
6,105,478 |
6,105,478 |
||
| Investment in unconsolidated entities |
658,436 |
673,567 |
||
| Other noncurrent assets |
224,876 |
- |
||
| Total assets |
$ 26,908,373 |
$ 14,997,318 |
||
| LIABILITIES, CONVERTIBLE REDEEMABLE PREFERRED STOCK AND EQUITY |
||||
| Current liabilities: |
||||
| Accounts payable |
$ 354,532 |
$ 656,545 |
||
| Deferred revenue |
26,941 |
68,969 |
||
| Accrued expenses and liabilities |
1,301,692 |
1,075,944 |
||
| Deferred license fees |
1,364,716 |
1,200,764 |
||
| Contingent purchase price consideration liability |
691,876 |
578,744 |
||
| Convertible promissory note |
3,000,000 |
3,000,000 |
||
| Warrant liabilities |
901,197 |
1,344,440 |
||
| Total current liabilities |
7,640,954 |
7,925,406 |
||
| Deferred income tax liability |
70,372 |
125,809 |
||
| Convertible promissory note |
- |
2,000,000 |
||
| Total liabilities |
7,711,326 |
10,051,215 |
||
| 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 June 30, 2014 and December 31, 2013, respectively |
1,261,995 |
1,261,995 |
||
| Series C - 0 and 87,500 shares issued and outstanding, liquidation preference |
||||
| of $0 and $350,000 at June 30, 2014 and December 31, 2013, respectively |
- |
219,754 |
||
| Series D 4% - 0 and 2,285,714 shares issued and outstanding, liquidation preference |
||||
| of $0 and $4,000,000 at June 30, 2014 and December 31, 2013, respectively |
- |
4,000,000 |
||
| Equity: |
||||
| Preferred Series E stock, $.001 par value; 16,500,000 shares authorized, 13,428,571 and 0 shares issued |
13,429 |
- |
||
| Common stock, $.001 par value; 1,500,000,000 shares authorized, 17,410,220 and 15,794,762 shares |
17,410 |
15,794 |
||
| Additional paid-in capital |
111,566,478 |
67,417,025 |
||
| Accumulated deficit |
(90,346,752) |
(65,856,053) |
||
| Accumulated other comprehensive loss |
(1,402,245) |
(715,090) |
||
| Total YOU On Demand equity |
19,848,320 |
861,676 |
||
| Noncontrolling interests |
(1,913,268) |
(1,397,322) |
||
| Total equity |
17,935,052 |
(535,646) |
||
| Total liabilities, convertible redeemable preferred stock and equity |
$ 26,908,373 |
$ 14,997,318 |
||
SOURCE YOU On Demand Holdings, Inc.
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