Integration Activities Positively Impacted Operating Cost Structure
On Track to Achieve Annualized Cost Savings in the Range of $8 to $10
Million by Year-End 2014 Driven by Efficiency Program Synergies
TORONTO, Aug. 14, 2014 /CNW/ - Mood Media Corporation ("Mood Media" or
"the Company") (ISIN: CA61534J1057) (TSX:MM) (LSE AIM:MM), the world's
largest integrated provider of in-store customer experience solutions,
today reported results for the second quarter of 2014 and updated its
strategic and operational plans.
Recent Highlights
-
Achieved second quarter revenues of $120 million and EBITDA of $24.0
million;
-
Continued to successfully implement global integration and consolidation
activities; based upon strong results to date, finalizing synergy
target to range of $8 to $10 million in annualized cost savings by
year-end 2014;
-
Expanded Local Sales organization and delivered new products;
-
Reiterated 2014 financial outlook.
"In the second quarter, we continued to relentlessly focus on executing
our strategic plan and further strengthened our platform for long-term
sustainable growth," said Steve Richards, President and CEO of Mood
Media. "Over the past 10 months we have worked steadfastly to engender
a culture of accountability, and the entire Mood Media team is focused
on improving the efficiency and consistency of our business. Notably,
we are making significant progress on our strategies surrounding Local
Sales, product and solutions development, and partnership expansion.
During the second quarter, we continued to build out our Local Sales
teams in North America and the international markets, launched new
compelling services called Mood Mix and Mood Social Wifi and advanced
our mobile solutions, all of which we expect will contribute to our
future growth. Our cost savings initiatives are also beginning to
deliver tangible returns and, based upon our strong execution to date,
we are finalizing our annualized cost savings expectations to a range
of $8 to $10 million by year-end 2014.
"We are gaining important traction with our visuals and mobile
services," continued Mr. Richards. "In the first half of 2014 we signed
our largest U.S. contracts to date and launched our first large-scale
mobile promotion in conjunction with a major Premier brand. This
positive momentum underscores the strength of our strategy and the
results our focused efforts are producing. We believe we have taken
consequential steps forward that will allow Mood Media to deliver on
its full potential for both our clients and stakeholders. While the
complete transformation of Mood Media will be an ongoing effort, we are
energized as we take solid strides toward achieving these goals and
targets. We look forward to continued success as we focus on building a
great Company and realizing the potential we have before us."
Second Quarter Financial Results
The Company reported Q2 revenues of $120 million and EBITDA of $24
million. Net loss per share from continuing operations was ($0.18)
compared with net loss of ($0.05) in the prior-year period. The
Company's second quarter revenue and EBITDA performance was impacted by
the sale of its Latin American residential operation, the revised terms
of its affiliate agreement, lower equipment and recurring sales, and
lower performance at Technomedia and BIS. These factors were partially
offset by the benefits of integration and synergy programs that
produced a reduction of $3.5 million in operating expenses in its North
American and International operations for the quarter; however, these
operating expense reductions were partially offset by increases due to
the foreign exchange impact and expenses in the Company's BIS
subsidiary.
Other expense totaled $10 million in the quarter compared with $8
million in the prior year. Other expense in the quarter related to
restructuring, transaction and settlement expenses and was partially
offset by gains on sale of non-core assets. Restructuring expense
pertains to the Company's integration and synergy program. Transaction
and settlement expenses relate to the cost of resolving amounts in
connection with past acquisitions.
Key Performance Indicators
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2012
|
Q1.13
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Q2.13
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Q3.13
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Q4.13
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2013
|
Q1.14
|
Q2.14
|
|
|
|
|
|
|
|
|
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Audio sites
|
427,714
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428,835
|
427,038
|
428,085
|
428,095
|
428,095
|
423,796
|
418,513
|
Visual sites
|
10,929
|
11,552
|
12,115
|
12,479
|
12,666
|
12,666
|
12,997
|
13,821
|
Total sites
|
438,643
|
440,387
|
439,153
|
440,564
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440,761
|
440,761
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436,793
|
432,334
|
|
|
|
|
|
|
|
|
|
Audio ARPU
|
$ 49.20
|
$ 47.19
|
$ 46.25
|
$ 45.65
|
$ 45.62
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$ 46.17
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$ 45.35
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$ 45.17
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Visual ARPU
|
$115.39
|
$ 89.78
|
$ 83.42
|
$ 89.21
|
$ 81.27
|
$ 84.30
|
$ 84.59
|
$ 85.08
|
Blended ARPU
|
$ 50.45
|
$ 48.28
|
$ 47.25
|
$ 46.87
|
$ 46.64
|
$ 47.23
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$ 46.50
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$ 46.40
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|
|
|
|
|
|
|
|
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Audio gross additions
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47,488
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11,599
|
9,960
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9,208
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9,765
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40,532
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10,112
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6,981
|
Visual gross additions
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5,180
|
1,092
|
699
|
497
|
1,219
|
3,507
|
478
|
996
|
Total gross additions
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52,668
|
12,691
|
10,659
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9,705
|
10,984
|
44,039
|
10,590
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7,977
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|
|
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|
|
|
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Audio monthly churn
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0.8%
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0.8%
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0.9%
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0.6%
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0.8%
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0.8%
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1.1%
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1.0%
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Visual monthly churn
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0.8%
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1.4%
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0.4%
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0.4%
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2.8%
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1.3%
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0.4%
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0.4%
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Total monthly churn
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0.8%
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0.8%
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0.9%
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0.6%
|
0.8%
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0.8%
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1.1%
|
0.9%
|
In the second quarter, the number of total Company-owned sites declined
by 1.6% year-over-year driven by a 2.0% decline in the number of audio
sites and a 14.1% increase in the number of visual sites. The number of
audio sites decreased moderately in North America and in its
International operation. The number of visual sites increased in both
operations.
Blended ARPU declined by 1.8% year-over-year in the second quarter to
$46.40 per month and remained stable compared with the first quarter
ARPU of $46.50. Audio ARPU decreased by 2.3% relative to the prior year
to $45.17 while visual ARPU rose by 2.0% year-over-year to $85.08.
Audio ARPU declined in North America and remained stable in its
International operations. Visual ARPU increased in both North America
and in its International operations.
Total monthly churn in the second quarter was 0.9% per month reflecting
an improvement over first quarter churn of 1.1%. Audio churn of 1.0%
per month improved relative to the first quarter in International
operations while churn in North America remained stable. Visual churn
remained stable at 0.4%.
Conference Call
As previously announced, the Company will hold a conference call on
August 15 at 8:00 a.m. Eastern Time to discuss its results and respond
to questions from the investment community. The call can be accessed by
telephone by dialing 416-764-8658, or 1 888-886-7786 for international
callers. Listeners are advised to dial in at least five minutes prior
to the call.
This earnings release, which is current as of August 14, 2014, is a
summary of our second quarter results, and should be read in
conjunction with our second quarter 2014 MD&A and Consolidated
Financial Statements and Notes thereto and our other recent filings
with securities regulatory authorities in Canada and the United
Kingdom.
The financial information presented herein has been prepared on the
basis of IFRS for interim financial statements and is expressed in
United States dollars unless otherwise stated.
This news release includes certain non-IFRS financial measures. Mood
Media uses these non-IFRS financial measures as supplemental indicators
of its operating performance and financial position. These measures do
not have any standardized meanings prescribed by IFRS and therefore may
not be comparable to the calculation of similar measures used by other
companies, and should not be viewed as alternatives to measures of
financial performance calculated in accordance with IFRS.
In this earnings release, the terms "we", "us", "our", "Mood Media" and
"the Company" refer to Mood Media Corporation and our subsidiaries.
Mood Media Corporation
INTERIM CONSOLIDATED STATEMENTS OF LOSS
Unaudited
For the three and six months ended June 30, 2014
In thousands of US dollars, unless otherwise stated
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Three months ended
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Six months ended
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Notes
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June 30, 2014
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June 30, 2013
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June 30, 2014
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June 30, 2013
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Continuing operations
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Revenue
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5
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$119,881
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$126,268
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$242,871
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$255,355
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|
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Expenses
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|
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Cost of sales (excludes depreciation and amortization)
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53,346
|
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54,476
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110,770
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|
113,163
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Operating expenses
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|
42,510
|
|
44,134
|
|
84,726
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|
88,572
|
|
Depreciation and amortization
|
|
17,526
|
|
16,496
|
|
36,040
|
|
34,220
|
|
Share-based compensation
|
13
|
(204)
|
|
325
|
|
612
|
|
688
|
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Other expenses
|
6
|
9,974
|
|
7,916
|
|
9,339
|
|
13,810
|
|
Foreign exchange loss (gain) on financing transactions
|
|
1,766
|
|
(4,178)
|
|
760
|
|
1,857
|
|
Finance costs, net
|
7
|
27,794
|
|
15,970
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|
41,520
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|
10,494
|
Loss for the period before taxes
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(32,831)
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(8,871)
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(40,896)
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(7,449)
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Income tax charge (credit)
|
8
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(197)
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|
499
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|
(766)
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|
6,891
|
Loss for the period from continuing operations
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|
(32,634)
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|
(9,370)
|
|
(40,130)
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(14,340)
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Discontinued operations
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Loss after tax from discontinued operations
|
15
|
-
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|
(10,984)
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|
-
|
|
(14,736)
|
Loss for the period
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|
(32,634)
|
|
(20,354)
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(40,130)
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(29,076)
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Attributable to:
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|
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Owners of the parent
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(32,670)
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(20,476)
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(40,173)
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(29,314)
|
Non-controlling interests
|
|
36
|
|
122
|
|
43
|
|
238
|
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|
$(32,634)
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|
$(20,354)
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$(40,130)
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$(29,076)
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Net loss per share
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|
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Basic and diluted
|
9
|
$(0.18)
|
|
$(0.12)
|
|
$(0.23)
|
|
$(0.17)
|
Basic and diluted from continuing operations
|
9
|
(0.18)
|
|
(0.05)
|
|
(0.23)
|
|
(0.08)
|
Basic and diluted from discontinued operations
|
9
|
0.00
|
|
(0.07)
|
|
0.00
|
|
(0.09)
|
About Mood Media Corporation
Mood Media Corporation (TSX:MM / LSE AIM:MM), is one of the world's
largest designers of in-store consumer experiences, including audio,
visual, interactive, scent, voice and advertising solutions. Mood
Media's solutions reach over 150 million consumers each day through
more than half a million subscriber locations in over 40 countries
throughout North America, Europe, Asia and Australia.
Mood Media Corporation's client base includes more than 850 U.S. and
international brands in diverse market sectors that include: retail,
from fashion to financial services; hospitality, from hotels to health
spas; and food retail, including restaurants, bars, quick-serve and
fast casual dining. Our marketing platforms include 77% of the top 100
retailers in the United States and 97% of the top 50 quick-serve and
fast-casual restaurant companies.
For further information about Mood Media, please visit www.moodmedia.com.
Cautionary Statement Regarding Forward-Looking Statements
This press release contains forward-looking statements. The words
"believe", "expect", "anticipate", "estimate", "intend", "may", "will",
"would" and similar expressions and the negative of such expressions
are intended to identify forward-looking statements, although not all
forward-looking statements contain these identifying words. These
forward-looking statements are subject to important assumptions,
including without limitation, expected growth, results of operations,
performance, financial condition, strategy and business prospects and
opportunities. While Mood Media considers these factors and assumptions
to be reasonable based on information currently available, they are
inherently subject to significant uncertainties and contingencies and
may prove to be incorrect.
Known and unknown factors could cause actual results to differ
materially from those projected in the forward-looking statements. Such
factors include, but are not limited to: the impact of general market,
industry, credit and economic conditions, currency fluctuations as well
as the risk factors identified in Mood Media's management discussion
and analysis dated Aug. 14, 2014 and Mood Media's annual information
form dated March 28, 2014, both of which are available on www.sedar.com.
Given these uncertainties, readers are cautioned not to place undue
reliance on such forward-looking statements. All of the forward-looking
statements made in this press release are qualified by these cautionary
statements and other cautionary statements or factors contained herein,
and there can be no assurance that the actual results or developments
will be realized or, even if substantially realized, that they will
have the expected consequences to, or effects on, Mood Media.
Forward-looking statements are given only as at the date hereof and Mood
Media disclaims any obligation to update or revise the forward-looking
statements, whether as a result of new information, future events or
otherwise, except as required by applicable laws.
Mood Media Corporation presents EBITDA information as a supplemental
figure because management believes it provides useful information
regarding operating performance. EBITDA is not a recognized measure
under International Financial Reporting Standards ("IFRS"), does not
have standardized meaning, and is unlikely to be comparable to similar
measures used by other companies. Accordingly, investors are cautioned
that EBITDA should not be construed as an alternative to net earnings
or (loss) determined in accordance with IFRS as an indicator of the
financial performance of Mood Media or as a measure of Mood Media's
liquidity and cash flows. For a reconciliation of EBITDA to the
Consolidated Statements of Income (Loss), please see Footnote 18 to the
Interim Consolidated Financial Statements which provides Segment
Information.
SOURCE Mood Media Corporation