Dreams, Inc. (NYSE Amex: DRJ) announced its financial
results for the fourth quarter and twelve months ended December 31,
2010.
Fourth Quarter 2010
Revenues - For the quarter ended
December 31, 2010, revenues were up 40% to $60.7 million, compared
to $43.3 million generated in the same quarter last year.
EBITDA* – For the quarter ended
December 31, 2010, earnings before interest, taxes, depreciation
and amortization were $7.9 million, up 21.5% from $6.5 million in
EBITDA profits for the same quarter in 2009.
Pre-Tax – For the quarter ended
December 31, 2010, income from continuing operations before taxes
was $7.3 million, up 30.3% from a pre-tax operating profit of $5.6
million for the same quarter in 2009.
Net Income – For the quarter ended
December 31, 2010, net income was $4.1 million, up 36.7% from $3.0
million for the same quarter in 2009.
Full Year 2010
Revenues - For the year ended
December 31, 2010, revenues increased 30.2% to $111.4 million,
compared to $85.5 million for the twelve months ended December 31,
2009.
EBITDA* - For the year ended
December 31, 2010, earnings before interest, taxes, depreciation
and amortization were $5.7 million, up 42.5%, versus an EBITDA
profit of $4.0 million for the twelve months ended December 31,
2009. Adjusted, On-going EBITDA** was $6.9 million for the twelve
months ended December 31, 2010, a 50.0% increase, versus an
Adjusted, On-going EBITDA** of $4.6 million for the same period in
2009.
“We incurred some one-time, non core operating expenses during
the year of approximately $1.2 million that mitigated our reported
results. If you add-back these certain one-time charges of $1.2
million dollars, our on-going operations would have yielded a $6.9
million Adjusted, On-going EBITDA**.
“Specifically, in 2010, these one-time charges included $590,000
of fees associated with financings and M & A activity, $294,000
for certain legal fees, $156,000 due to margin erosion, write-offs
and expenses associated with the closing of several Field of Dreams
stores, $134,000 in impairment charges associated with some
pre-paid royalties, $40,000 in non cash, compensation expense
related to the issuance of warrants, and $10,000 in severance
expenses to released employees from the closed Field of Dreams
stores. For 2009, we incurred $220,000 in non-cash write-offs of
lease hold improvements due to the early closing of (3) Field of
Dreams stores, $260,000 in non-cash stock compensation expense
associated with the issuance of stock options to numerous
employees, and $120,000 for certain legal fees outside our on-going
core operations."
Pre-Tax – For the year ended
December 31, 2010, income from continuing operations before taxes
was $2.7 million, up 200%, compared to a pre-tax operating profit
of $.9 million for the twelve months ended December 31, 2009.
Net Income - For the year ended
December 31, 2010, net income was $1.3 million, up 766%, versus net
income of $.15 million for the twelve months ended December 31,
2009.
Ross Tannenbaum, Dreams’ President & CEO commented, “These
record results were defined by our E-Commerce successes which were
led by our flagship brand, www.FansEdge.com and the dramatic growth
of our web syndication business.
“For the quarter, the Internet division revenues were up 45.7%
to $51.0 million, versus $35.0 million in revenues for the fourth
quarter of 2009. For the quarter, the Internet division delivered
an $8.4 million EBITDA*, up 23.5%, versus a $6.8 million EBITDA*
for 2009.
“For the year, the Internet division revenues were up 41.8% to
$84.7 million, versus $59.7 million for 2009. For the year, the
Internet division was up 26.9%, to $9.9 million EBITDA*, versus a
$7.8 million EBITDA* for 2009. We are continuing to re-invest in
infrastructure, personnel and technology to support our growth.
That is the main reason our revenue growth outpaced our EBITDA*
growth in 2010.
“E-Commerce will remain our primary area of focus as we continue
in our transformation to a technology driven company, operating in
the sports licensed products space and generating a majority of our
revenues via the E-Commerce channel.
“Our talented management team, on-going operational enhancements
and our proprietary sports e-commerce platform were the catalysts
for these record fourth quarter and annual results. We will
continue to invest in our future growth, leverage our purchasing
power to reduce costs, expand our web syndication portfolio, sell
more of our manufactured items through our retail channels and
focus on E-Commerce. Therefore, we believe we are well positioned
to continue this trend throughout 2011 and beyond,” concluded
Tannenbaum.
Q4 2010 Financial
Recap & Highlights:
2010 Financial Recap
& Highlights:
$60.7M in revenues, up 40% $111.4M in revenues, up 30.2% $7.9M in
EBITDA profits, up 21.5% $5.7M in EBITDA profits, up 42.5% $7.3M in
Pre-tax profits, up 30.3% $2.7M in Pre-tax profits, up 200% $4.1M
in Net income, up 36.7% $1.3M in Net income, up 766% $51M in
E-Commerce sales, up 45.7% $84.7M in E-Commerce sales, up 41.8%
16.5% Internet EBITDA profits 11.7% Internet EBITDA profits Web
syndication – signed Sears $10M increase in working capital
Dreams, Inc. and Subsidiaries
Consolidated Statements of Operations -
Unaudited
For the Quarter Ended December 31,
2010 and the Quarter Ended December 31, 2009
(Dollars in Thousands, except share and
earnings per share amounts)
Quarter endedDecember
31,2010
Quarter endedDecember 31,2009 Revenues:
Manufacturing/Distribution $ 3,644 $ 3,428 Retail 56,967 39,732
Other - fees 52 112 Total
revenues $ 60,663 $ 43,272 Expenses:
Cost of sales—manufacturing/distribution $ 2,162 $ 1,588 Cost of
sales—retail 30,332 21,363 Operating expenses 20,248 13,795
Depreciation and amortization 463 456
Total expenses $ 53,205 $ 37,202 Income
from operations $ 7,458 $ 6,070 Interest (expense), net (201
) (483 ) Income before income taxes $ 7,257 $ 5,587
Provision for Income tax (expense)/benefit: Current (3,156 ) (1,885
) Deferred ---- (702 ) Net income $
4,101 $ 3,000 Net income attributable to non controlling interest
19 ---- Net income attributable to Dreams, Inc. $ 4,120 $
3,000 Basic and diluted income per share $ 0.10
$ 0.08 Basic weighted average common shares
outstanding 40,715,535 37,559,698
Dreams, Inc. and Subsidiaries
Consolidated Statements of
Operations
For the Year Ended December 31,
2010 and the Year Ended December 31, 2009
(Dollars in Thousands, except share and
earnings per share amounts)
Year endedDecember
31,2010 Year endedDecember 31,2009
Revenues: Manufacturing/Distribution $ 11,107 $ 11,470 Retail
99,798 73,711 Other - fees 458 354
Total revenues $ 111,363 $ 85,535
Expenses: Cost of sales—manufacturing/distribution $ 6,543 $
5,497 Cost of sales—retail 53,172 39,626 Operating expenses 45,939
36,226 Depreciation and amortization 1,820
1,819 Total expenses $ 107,474 $ 83,168
Income from operations $ 3,889 $ 2,367 Interest (expense),
net (1,185 ) (1,268 ) Other (expense) / income ----
(238 ) Income before income taxes $ 2,704 $ 861
Provision for Income tax (expense)/benefit: Current (295 ) (9 )
Deferred (1,068 ) (702 ) Net income $ 1,341 $
150 Net income attributable to non controlling interest 2 --- Net
income attributable to Dreams, Inc. $ 1,343 $ 150
`
Basic income per share $ 0.03 $ 0.00 Basic
weighted average common shares outstanding 40,715,535
37,559,698 Dilutive income per share $ 0.03
$ 0.00 Potentially dilutive weighted average
common shares outstanding 41,636,411 37,624,552
*EBITDA is a non-GAAP financial measurement that is defined as
earnings before interest, tax, depreciation and amortization. We
use this non-GAAP financial measure for financial and operational
decision making and as a means to evaluate our performance. In our
opinion, this non-GAAP measure provides meaningful supplemental
information regarding our performance. We believe that both
management and investors benefit from referring to this non-GAAP
financial measure in assessing our performance and analyzing future
periods. This non-GAAP financial measure also facilitates
management’s internal comparisons to our historical performance. We
believe this non-GAAP financial measures is useful to investors
both because (1) they allow for greater transparency with respect
to key metrics used by management in its financial and operational
decision making and (2) they are used by institutional investors
and the analyst community to help them analyze the health of our
business.
**Adjusted On-going EBITDA, also a non-GAAP financial measure is
defined as adjusted EBITDA (adjusted to exclude the impact of
stock-based compensation expense) plus excluding the impact of
expenses or income from discontinued operations, certain legal
expenses, settlements and related costs outside our normal course
of business, restructuring and severance costs, impairment charges,
and certain other one-time charges and credits. These non-GAAP
measures are provided to enhance the reader’s overall understanding
of the Company’s current financial performance. Management believes
that these non-GAAP measures provide useful information to the
Company and to investors by excluding certain items that may not be
indicative of the Company’s core operating results.
The following table presents a reconciliation of EBITDA*, as
adjusted, to net income as reported.
(in thousands)
YEDecember 31,
YEDecember 31,
QEDecember 31,
QEDecember 31,
2010 2009 2010 2009 Total
revenue $ 111,363 $ 85,535 $
60,663 $ 43,272 Total expense
105,654 81,587 52,742
36,747 Pre-tax 5,709
3,948 7,921
6,525 Net income 1,343
150 4,120 3,000
EBITDA, as adjusted 5,709
3,948 7,921 6,525
Less
Interest expense (1,185 ) (1,268 )
(201 ) (483 ) Tax expense
(1,991 ) (711 ) (3,156 )
(2,586 ) Deprec. & Amort (1,820 )
(1,819 ) (463 ) (450 ) Plus:
Net income from
non controlling 2 -
19 - Net income, as
reported 1,343 150
4,120 3,000
The following table presents a reconciliation of Adjusted
On-going EBITDA**, as adjusted, to net income as reported.
(in thousands)
YEDecember 31,
YEDecember 31,
2010 2009 Total revenue $ 111,363
$ 85,535 Total expense 104,430
80,987 Pre-tax 6,933
4,548 Net income 2,005
278 Adjusted On-going EBITDA, as
adjusted 6,933 4,548 Less
Interest expense (1,185 )
(1,268 ) Tax expense (1,925 )
(1,183 ) Deprec. & Amort (1,820 )
(1,819 ) Plus: Net income from
non controlling 2 - Net
income, as reported 2,005 278
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