Deployment Debt Reduced by $53 Million in
Last 12 Months
Cinedigm Corp. (NASDAQ: CIDM) today announced significant
progress in operations, financing and real estate expense
reductions.
“We are now a leader in the rapidly growing digital streaming
channel business, where we already have three successful channels
and a fourth on its way. Also, we continue to grow as an important
provider of independent content and digital services to key players
in the third party SVOD business, soon to be a $20 billion market,”
said Chris McGurk, Cinedigm’s Chairman and CEO. “Our recent
operational results, combined with our progress on key financings,
real estate transactions, reduction of debt and more than $10
million in annual operating cost savings, position the Company for
more success.”
OPERATIONS:
Cinedigm’s three digital streaming channels have increased gross
subscriber additions more than 88% since October, 2016, with
November being the best month ever for Cinedigm’s OTT subscriber
additions. Combined, the channels provide more than 5,500 hours of
content to viewers across 3.2 million app downloads. In addition,
following the successful launch in November, 2016 of Dove NOW, a
24/7 preprogrammed viewing option, Dove Channel launched on the
Apple TV platform, making the service available to millions of
additional users.
Cinedigm also continues to explore additional partnership
opportunities for channels and content with leading global company
LeEco, both domestically and overseas, after adding two more
streaming channels to LeEco’s North American product line launch.
In addition to the two streaming channels currently available on
LeEco’s mobile phones and TV’s -- Dove Channel and ConTV --
Docurama, Cinedigm’s already successful documentary OTT channel,
and a yet-to-be named channel currently in development, will launch
on LeEco’s platforms in early 2017.
Cinedigm’s OTT channels are also available to Amazon Prime
members as part of Amazon’s Streaming Partners Program. Launched a
year ago, this program has delivered significant additional channel
subscribers to Cinedigm with no incremental costs. Cinedigm’s
channels are also available across a wide and growing variety of
connected devices including most Android and iOS mobile phones and
tablets, Roku streaming media players, Samsung Smart TVs, Apple TV
and the Web.
“Given the progress of the existing OTT offerings across a wide
variety of platforms, we expect meaningful financial impacts from
these partnerships in the next 12 months,” continued McGurk.
In the entertainment distribution business, Cinedigm also
continues to see strong progress, where recent competitive
developments have solidified the Company’s position as the leading
independent studio in North America. In digital distribution,
Cinedigm continues to expand relationships with key accounts such
as Hulu and Netflix, closing significant new licensing deals with
both companies. In addition, our recent film releases,
particularly in the Western/Action genre, have been performing
strongly in television VOD and DVD sales.
FINANCING:
In a continuing initiative to strengthen and simplify its
balance sheet, the Company recently consummated an accretive
exchange agreement with an institutional holder of $3,429,000 of
the Company’s Convertible Notes. This transaction exchanged the
holder's debt into 450,000 shares of its Class A Common Stock and
warrants to purchase 200,000 shares of stock exercisable six months
after issuance, with a 5-year term, an exercise price of $1.60 per
share and customary anti-dilution provisions. This transaction
saves the Company nearly $190,000 per year in interest expense.
In December, 2016, the Company also completed an accretive
exchange agreement with another institutional holder, where the
holder agreed to terminate its outstanding warrants to purchase
1,773,412 shares of Common Stock at an exercise price of $12.36 per
share in exchange for minimal consideration.
In Digital Cinema, the outstanding balance of the Societe
Generale Phase 1 term loan facility was fully prepaid in November,
2016. The total payoff amount was $9,081,110. This loan related to
the 3,724 Digital Cinema projection systems that were installed in
theaters as part of the Phase 1 Deployment. This move continues the
aggressive reduction of non-recourse debt related to the Digital
Cinema business. In calendar year 2016, Cinedigm's Digital
Cinema-related debt was reduced by over $53,000,000.
The Company continues to make progress on the convertible and
mezzanine debt exchange that began with the aforementioned
retirement of $3,429,000 in Convertible Notes. The Company believes
this exchange will reduce interest costs, and, combined with our
efforts to further enhance liquidity, such as our significant cost
reduction initiative, provide more flexibility in ongoing
negotiations for a new revolving asset based loan.
REAL ESTATE:
As part of the initiative to finalize more than
$10 million in annual operating cost savings, most of that
already achieved last calendar year, Cinedigm entered into an
agreement to terminate its lease for its corporate space in
Century City California and entered into a lease for office
space in Sherman Oaks, California. This change will provide
Cinedigm with savings of over $700,000 on an annualized basis. The
new space is also better situated to support Cinedigm’s
expanding streaming digital channel and content
services businesses.
ABOUT CINEDIGM
Cinedigm is a leading independent content distributor in the
United States, with direct relationships with thousands of physical
retail storefronts and digital platforms, including Wal-Mart,
Target, iTunes, Netflix, and Amazon, as well as the national Video
on Demand platform on cable television.
Additionally, given Cinedigm’s infrastructure, technology,
content and distribution expertise, the Company has rapidly become
a leader in the quickly evolving over-the-top digital network
business. Cinedigm’s first channel, DOCURAMA, launched in May 2014,
and is currently available on iOS, Roku, Xbox and Samsung, with
additional platforms currently being rolled out. Cinedigm launched
CONtv, a Comic Con branded channel, on March 3, 2015. The Company’s
third OTT channel, DOVE CHANNEL, launched on September 15, 2015 and
is a digital streaming subscription service targeted to families
and kids seeking high quality and family friendly content approved
by Dove Foundation.
Cinedigm™ and Cinedigm Digital Cinema Corp™ are trademarks of
Cinedigm Corp. www.cinedigm.com. [CIDM-F]
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version on businesswire.com: http://www.businesswire.com/news/home/20170109005474/en/
CinedigmJill Newhouse Calcaterra,
310-466-5135jcalcaterra@cinedigm.com
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