LOS ANGELES, CA / ACCESSWIRE / August 14, 2023 / Dolphin Entertainment, Inc. (NASDAQ:DLPN), a leading entertainment marketing and premium content production company, announces its financial results for the second quarter ended June 30, 2023.
"We're thrilled to announce record Q2 revenue of $11.0 million," states Dolphin Entertainment CEO Bill O'Dowd. "Additionally, it is worth noting that Q2 was our second highest revenue performance in any quarter in company history. It came just $100,000 short of our best ever quarter of $11.1 million in Q4 last year, without the benefit of the holiday seasonality that strengthens our business every year."
"On the operating line, when you back out non-cash charges, we improved over Q1 2023 by $1.3 million, to an operating loss, less non-cash charges, of approximately $370,000. This momentum of greater than $1 million improvement in operating results quarter over quarter sets us up nicely as we enter into the historically stronger second half of the year."
"Furthermore, we are very pleased with the strength of our balance sheet. We have over $7 million of unrestricted cash on hand, and we have paid out the last of our acquisition earn-outs, thereby removing the final contingent consideration liabilities."
"With respect to the non-cash charges, in addition to the normal depreciation and amortization we take every quarter (primarily as we amortize over several years the intangible assets we received via our acquisitions), we also took a one-time, $6.5 million non-cash impairment against our goodwill this quarter. In recognition of our stock price drop during the fourth quarter of last year, and the lack of market recovery in our stock price during the first half of this year, this one-time, non-cash impairment allows us to reset and realign our market capitalization with our book value prior to moving into our strongest quarters of the year, and before we announce the exciting catalysts we expect to share in the coming weeks."
" Looking ahead we expect a strong second half to the year, delivering strong, double-digit annual revenue growth. We also expect to report positive Operating Income in the back half of the year, and going forward, once non-cash items are excluded, as the strong improvement in operating results from Q1 to Q2 would indicate."
"We believe that our second half of the year will also benefit from the fact that none of Q2's Dolphin Films' sale of feature documentary "The Blue Angels" to Amazon Studios, via our multi-year co-production partnership with IMAX, was recognized in Q2, but is expected to start being recognized in 2H 2023. Revenue from that transaction between 2H 2023 and 1H 2024, is expected to bring Dolphin over $3.5 million and better than a 75% ROI, and this result does not include any of Dolphin's share of revenues from ticket sales in IMAX theatres. Moreover, virtually all of our subsidiaries, and especially our influencer marketing agencies Be Social and Socialyte, traditionally thrive in the latter part of the year due to seasonality."
"Thus, with the strong operating momentum created from Q1 to Q2, along with a strong cash position and the removal of all Contingent Considerations from our balance sheet, and with the one-time, non-cash goodwill impairment behind us, we feel we are best positioned for a very strong second half of the year."
Q2 2023 and Recent Highlights
- Total revenue for the second quarter ended June 30 2023 increased 11% to $11.0 million, compared to the first quarter ended March 31, 2023.
- Operating loss and net loss for the second quarter ended June 30, 2023 of $7.4 million and $8.0 million, respectively, include non-cash items of over $7.1 million. These include a non-recurring $6.5 million impairment of goodwill and $543,939 of depreciation and amortization. This compares to an operating loss and net loss for the quarter ended March 31, 2023 of $2.6 million and $3.0 million, respectively, which include non-cash items from depreciation and amortization of $533,096 and a loss from the change in the fair value of contingent consideration of $15,485, along with one-time and non-recurring audit fees of $300,000.
- Loss per share was $0.60 per share based on 13,212,311 weighted average shares outstanding for both basic loss per share and fully diluted loss per share for the three months ended June 30, 2023. Loss per share was $0.23 per share based on 12,640,285 weighted average shares outstanding for both basic and fully diluted loss per share for the three months ended March 31, 2023.
- Cash and cash equivalents of $7.0 million as of June 30, 2023, as compared to $6.1 million as of December 31, 2022.
- Amazon Studios acquired worldwide rights to the IMAX Original Documentary, "The Blue Angels." Bad Robot, Glen Powell's Barnstorm Productions, Zipper Bros Films, and Dolphin Entertainment produced the project that chronicles a year in the cockpit with one of the most exclusive aviator teams in the world, filmed with awe-inspiring IMAX cameras.
- James Beard Award Winning chef and owner of Compère Lapin and Bywater American Bistro in New Orleans, Nina Compton, announced the public sale of memberships to ShaSha Lounge: Social Aid and Pleasure Club, a new cocktail lounge coming to the Crescent City, in collaboration with new charity partner, United Way Southeast Louisiana (UWSELA), the award-winning consumer, lifestyle and hospitality marketing communications agency The Door | idea house, and esteemed celebrity chefs, Stephanie Izard, Marc Forgione, Michelle Bernstein, Rodney Scott, and Tiffani Faison.
- 42West led publicity for the world premiere of Martin Scorsese's "Killers of the Flower Moon" at the 2023 Cannes Film Festival, promoted multiple clients at the Tribeca Film Festival and represented an all-time high of 13 clients at San Diego Comic-Con. Additionally, client Tyler "Ninja" Blevins was named GameSquare's, Chief Innovation Officer, and 42West clients received four nominations for the 76th Tony Awards.
- The Door welcomed new clients Carbone Fine Food, City Pickle, Emeril Lagasse as well as his son and chef patron, EJ Lagasse. The Door also won two projects with world renowned chef, Jean-Georges Vongerichten, adding Tin Building by Jean-Georges and his forthcoming restaurant at 425 Park Avenue to their expansive list of culinary clients and destinations.
- Shore Fire client Rhiannon Giddens was awarded the Pulitzer Prize in Music for the opera "Omar," which she co-wrote with Michael Abels ("Get Out," "Nope").
- Be Social hosted a two-day Summer Showroom in Beverly Hills, running from July 11th - July 12th. Brands including Blue Mercury, Collective Voice, Crocs, Lulus, Perfect Snacks, and Tanologist, participated in the two-day event with the hopes of introducing their brand to key creators in the fashion, beauty, lifestyle, and wellness space.
Conference Call Information
To participate in this event, dial approximately 5 to 10 minutes before the beginning of the call.
Date: August 14, 2023
Time: 4:30pm ET
Toll Free: 877-545-0320; International: 973-528-00028
Participant Access Code: 380730
Webcast: https://www.webcaster4.com/Webcast/Page/2225/48868
Replay:
Toll Free: 877-481-4010; International: 919-882-2331
Replay Passcode: 48868
Webcast Replay https://www.webcaster4.com/Webcast/Page/2225/48868
About Dolphin Entertainment, Inc.
Dolphin Entertainment is a leading independent entertainment marketing and production company. Through our subsidiaries 42West, The Door, Shore Fire Media and B/HI (a division of 42West), we provide expert strategic marketing and publicity services to many of the top brands, both individual and corporate, in the film, television, music, gaming and hospitality industries. All three PR firms have been ranked among the most recent Observer's "Power 50" PR Firms in the United States. Viewpoint Creative, Be Social and Socialyte complement their efforts with full-service creative branding and production capabilities as well as social media and influencer marketing services. Dolphin's legacy content production business, founded by Emmy-nominated CEO Bill O'Dowd, has produced multiple feature films and award-winning digital series, and has recently entered into a multi-year agreement with IMAX to co-produce feature documentaries. To learn more, visit: https://www.dolphinentertainment.com
This press release contains 'forward-looking statements' within the meaning of the Private Securities Litigation Reform Act. These forward-looking statements may address, among other things, Dolphin Entertainment Inc.'s offering of common stock as well as expected financial and operational results and the related assumptions underlying its expected results. These forward-looking statements are distinguished by the use of words such as "will," "would," "anticipate," "expect," "believe," "designed," "plan," or "intend," the negative of these terms, and similar references to future periods. These views involve risks and uncertainties that are difficult to predict and, accordingly, Dolphin Entertainment's actual results may differ materially from the results discussed in its forward-looking statements. Dolphin Entertainment's forward-looking statements contained herein speak only as of the date of this press release. Factors or events Dolphin Entertainment cannot predict, including those described in the risk factors contained in its filings with the Securities and Exchange Commission, may cause its actual results to differ from those expressed in forward-looking statements. Although Dolphin Entertainment believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be achieved, and Dolphin Entertainment undertakes no obligation to update publicly any forward-looking statements as a result of new information, future events, or otherwise, except as required by applicable law.
Contact:
James Carbonara/Hayden IR
(646)-755-7412
[email protected]
DOLPHIN ENTERTAINMENT, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
ASSETS | As of March 31, 2023 | As of December 31, 2022 | ||||||
Current | ||||||||
Cash and cash equivalents | $ | 7,001,403 | $ | 6,069,889 | ||||
Restricted cash | 1,127,960 | 1,127,960 | ||||||
Accounts receivable | ||||||||
Trade, net of allowance of $1,003,898 and $736,820, respectively | 5,614,202 | 6,162,472 | ||||||
Other receivable | 3,312,398 | 5,552,993 | ||||||
Notes receivable | 4,630,416 | 4,426,700 | ||||||
Other current assets | 838,602 | 523,812 | ||||||
Total current assets | 22,524,981 | 23,863,826 | ||||||
Capitalized production costs, net | 2,064,775 | 1,598,412 | ||||||
Employee receivable | 700,085 | 604,085 | ||||||
Right-of-use asset | 6,401,715 | 7,341,045 | ||||||
Goodwill | 22,796,683 | 29,314,083 | ||||||
Intangible assets, net | 8,875,139 | 9,884,336 | ||||||
Property, equipment and leasehold improvements, net | 234,818 | 293,206 | ||||||
Other long term assets | 2,221,421 | 2,477,839 | ||||||
Total Assets | $ | 65,819,617 | $ | 75,376,832 | ||||
LIABILITIES | ||||||||
Current | ||||||||
Accounts payable | $ | 3,602,074 | $ | 4,798,221 | ||||
Term loan, current portion | 409,232 | 408,905 | ||||||
Notes payable, current portion | 3,410,960 | 3,868,960 | ||||||
Contingent consideration | - | 500,000 | ||||||
Accrued interest - related party | 1,529,832 | 1,744,723 | ||||||
Accrued compensation - related party | 2,625,000 | 2,625,000 | ||||||
Lease liability, current portion | 2,040,918 | 2,073,547 | ||||||
Deferred revenue | 2,143,778 | 1,641,459 | ||||||
Other current liabilities | 6,597,678 | 7,626,836 | ||||||
Total current liabilities | 22,359,472 | 25,287,651 | ||||||
Noncurrent | ||||||||
Term loan, noncurrent portion | 2,248,908 | 2,458,687 | ||||||
Notes payable, noncurrent portion | 3,115,000 | 500,000 | ||||||
Convertible notes payable | 5,150,000 | 5,050,000 | ||||||
Convertible notes payable at fair value | 350,000 | 343,556 | ||||||
Loan from related party | 1,107,873 | 1,107,873 | ||||||
Contingent consideration | - | 238,821 | ||||||
Lease liability | 5,041,589 | 6,012,049 | ||||||
Deferred tax liability | 313,372 | 253,188 | ||||||
Warrant liability | 10,000 | 15,000 | ||||||
Other noncurrent liabilities | 18,915 | 18,915 | ||||||
Total Liabilities | 39,715,129 | 41,285,740 | ||||||
STOCKHOLDERS' EQUITY | ||||||||
Preferred Stock, Series C, $0.001 par value, 50,000 authorized, issued and outstanding at June 30, 2023 and December 31, 2022. | 1,000 | 1,000 | ||||||
Common stock, $0.015 par value, 200,000,000 shares authorized, 13,868,003 and 12,340,664 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively. | 208,020 | 185,110 | ||||||
Additional paid in capital | 146,038,511 | 143,119,461 | ||||||
Accumulated deficit | (120,143,043 | ) | (109,214,479 | ) | ||||
Total Stockholders' Equity | $ | 26,104,488 | $ | 34,091,092 | ||||
Total Liabilities and Stockholders' Equity | $ | 65,819,617 | $ | 75,376,832 | ||||
DOLPHIN ENTERTAINMENT, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
| Three months ended June 30 | Six months ended June 30 | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
Revenues | $ | 11,024,935 | $ | 10,290,626 | $ | 20,916,356 | $ | 19,467,735 | ||||||||
Expenses: | ||||||||||||||||
Direct costs | 217,245 | 939,389 | 436,141 | 2,022,279 | ||||||||||||
Payroll and benefits | 8,677,493 | 6,983,804 | 17,732,223 | 13,930,426 | ||||||||||||
Selling, general and administrative | 2,005,286 | 1,519,835 | 3,877,223 | 3,039,605 | ||||||||||||
Depreciation and amortization | 543,939 | 415,547 | 1,077,035 | 832,785 | ||||||||||||
Impairment of goodwill | 6,517,400 | - | 6,517,400 | - | ||||||||||||
Change in fair value of contingent consideration | 17,741 | (237,557 | ) | 33,226 | (76,106 | ) | ||||||||||
Legal and professional | 496,570 | 613,971 | 1,259,847 | 1,552,186 | ||||||||||||
Total expenses | 18,475,674 | 10,234,989 | 30,933,095 | 21,301,175 | ||||||||||||
(Loss) income from operations | (7,450,739 | ) | 55,637 | (10,016,739 | ) | (1,833,440 | ) | |||||||||
Other (expenses) income: | ||||||||||||||||
Change in fair value of convertible notes | 4,000 | 244,022 | (6,444 | ) | 531,880 | |||||||||||
Change in fair value of warrants | 5,000 | 35,000 | 5,000 | 95,000 | ||||||||||||
Interest income | 103,104 | 68,454 | 205,121 | 113,221 | ||||||||||||
Interest expense | (452,637 | ) | (193,802 | ) | (808,507 | ) | (387,958 | ) | ||||||||
Total other (expenses) income, net | (340,533 | ) | 153,674 | (604,830 | ) | 352,143 | ||||||||||
(Loss) income before income taxes and equity in losses of unconsolidated affiliates | (7,791,272 | ) | 209,311 | (10,621,569 | ) | (1,481,297 | ) | |||||||||
Income tax expense | (33,086 | ) | (7,224 | ) | (60,184 | ) | (14,448 | ) | ||||||||
Net (loss) income before equity in losses of unconsolidated affilates | (7,824,358 | ) | 202,087 | (10,681,753 | ) | (1,495,745 | ) | |||||||||
Equty in losses of unconsolidated affiliates | (134,886 | ) | (23,400 | ) | (246,811 | ) | (43,400 | ) | ||||||||
Net (loss) income | $ | (7,959,244 | ) | $ | 178,687 | $ | (10,928,564 | ) | $ | (1,539,145 | ) | |||||
(Loss) earnings per share: | ||||||||||||||||
Basic | $ | (0.60 | ) | $ | 0.02 | $ | (0.85 | ) | $ | (0.17 | ) | |||||
Diluted | $ | (0.60 | ) | $ | (0.01 | ) | $ | (0.85 | ) | $ | (0.23 | ) | ||||
Weighted average number of shares used in per share calculation | ||||||||||||||||
Basic | 13,212,311 | 9,498,266 | 12,926,273 | 9,113,252 | ||||||||||||
Diluted | 13,212,311 | 9,626,143 | 12,926,273 | 9,243,684 | ||||||||||||
SOURCE: Dolphin Entertainment