Cinedigm (NASDAQ: CIDM) today released comments by Chris McGurk,
Cinedigm Chairman and CEO, to be delivered at Company’s Annual
Stockholder Meeting, to be held at 5 pm ET, Friday, October 23,
2020.
Comments:
“The last twelve months have been an important period for
Cinedigm, and we have taken many key steps during that timeframe to
position the company for success in the streaming landscape. I
would like to briefly comment on the proposals that shareholders
are voting on today, and then underscore some key recent business
highlights to emphasize our growing momentum.
First, on the proposals, I want to strongly stress that we have
no plans to conduct a reverse stock split for the foreseeable
future. The motion is up for vote because it is good corporate
governance to provide the Board with flexibility and optionality
down the road. However, we expect our current business momentum
will have a favorable effect on our stock as it has in the past.
Additionally, the recent coverage initiated by two independent
analysts set price targets for the Company in the $2-3.50 per share
range, further supporting this view. Because of this, we believe
there will be no need for a reverse split.
Second, I want to congratulate and thank our Board members for
their continuing support during a period where we faced
industry-changing COVID-19 impacts on the business and came through
stronger and better positioned for growth than ever before.
Now for some business highlights:
In FY 2020, we dramatically expanded our streaming business,
which is by far the biggest and fastest growing global
entertainment business segment. We established a key strategic
advantage in connected TV streaming through our deals with Samsung,
Roku, and Vizio among others, by launching and scaling our free,
ad-supported linear and on-demand channel portfolio. In this
quarter last year, we had 6 channels live and 3 under contract. As
of today, we have 25 channels launched or under contract, and will
likely beat our goal of a 30- channel portfolio a year ahead of
schedule.
Our broad portfolio gives us a significant market share on every
key streaming device and platform. When we achieve full
distribution on every platform in every territory, we expect each
of these channels will generate between $1 to $2 million in high
margin annual revenues to Cinedigm.
As our channel portfolio has grown, our viewership and
subscription numbers have skyrocketed. At this time last year, our
channels were delivering 4.5 million monthly viewers. Today, that
number is over 15.2 million viewers, an increase of 238%. As we
have reported, we are generating exponential increases in our ad
revenues as a result. This growth is also being driven by the huge
acceleration in our device and platform reach, which is approaching
nearly 900 million consumer devices. This number is scaling through
deals with large OEMs, cable companies, and technology platforms
such as Sinclair Broadcast Group, Samsung, Comcast Xfinity, Roku,
Amazon, Vewd and Vizio, among many others.
The current stay-at-home environment has accelerated the shift
to streaming, leading to a world where cord cutting is permanent.
This once-in-a-lifetime shift has had a significant impact on our
digital sales business, where we license film and TV content to
every key player in the entire OTT streaming ecosystem including
Amazon, Apple, Netflix and Google among many others. In the last
two quarters, we recorded the highest digital content sales in the
Company's history. Combined with our aggressive cost streamlining
efforts, which have resulted in significant annual overhead savings
of over $5 million, our growth in streaming will help drive the
Company to sustained profitability going forward.
We also made substantial progress in strengthening our balance
sheet. In the current quarter, we converted $15 million in debt to
equity at $1.50 per share. We also reduced our Second Lien debt to
$7.5 million over time. These actions materially reduced annual
interest expense and we are exploring alternatives to either reduce
or eliminate the remaining Second Lien debt within this fiscal
year.
On the heels of our very successful and accretive acquisition of
Viewster last year, this week we announced a deal to acquire The
Film Detective, a streaming content company that brings almost
10,000 films and TV episodes and two streaming channels into the
Company. With both of these acquisitions, we followed a simple
formula: identify sub-scale OTT companies that have a defensible
market niche and are EBITDA positive, and then leverage our
proprietary technical and distribution infrastructure to increase
monetization and viewership while cutting operating expenses.
Under this model, our goal is to double the target acquisition’s
EBITDA in the first six months and revenue in the first twelve.
With potentially hundreds of streaming services around the globe
that fit this approach to choose from, the time is now for Cinedigm
to grow via a roll-up strategy leveraging our extensive expertise
and proprietary technology capabilities to rapidly build a scale
and profitable streaming holding company.
Finally, our narrative as a key player in the streaming industry
has broken through in the industry with the growth in our channel
portfolio and distribution reach. Given that, our M&A and
strategic investment activity has expanded through incoming
interest in our Company from both potential financial and strategic
investors. In addition, the high-profile acquisition of
advertising-centric streaming companies such as Xumo, Pluto and
Tubi leaves Cinedigm as one of the last independent players in the
space and one of the rare public plays in an incredible, high
growth sector. We intend to leverage that unique position to
attract quality, long-term investors to the Company.
Again, I want to thank our Board of Directors for their
continued support and guidance. I also want to thank our
stockholders for their continued support and focus on our Company
as we navigate into a prosperous future.”
ABOUT CINEDIGM
For more than twenty years, Cinedigm (NASDAQ: CIDM) has led the
digital transformation of the entertainment industry. Today,
Cinedigm entertains hundreds of millions of consumers around the
globe by providing premium content, streaming channels and
technology services to the world’s largest media, technology and
retail companies. For more information, visit
http://www.cinedigm.com/.
Cinedigm uses, and will continue to use, its website, press
releases, SEC filings, and various social media channels, including
Twitter (https://twitter.com/cinedigm), LinkedIn
(https://www.linkedin.com/company/cinedigm/), Facebook
(facebook.com/Cinedigm), StockTwits
(https://stocktwits.com/CinedigmCorp) and the Company website
(www.cinedigm.com) as additional means of disclosing public
information to investors, the media and others interested in the
Company. It is possible that certain information that the Company
posts on its website, disseminated in press releases, SEC filings,
and on social media could be deemed to be material information, and
the Company encourages investors, the media and others interested
in the Company to review the business and financial information
that the Company posts on its website, disseminates in press
releases, SEC filings and on the social media channels identified
above, as such information could be deemed to be material
information.
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version on businesswire.com: https://www.businesswire.com/news/home/20201023005094/en/
Jill Calcaterra 310-466-5135 jcalcaterra@cinedigm.com
Cinedigm (NASDAQ:CIDM)
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