LONG ISLAND CITY, N.Y.,
May 15, 2018 /CNW/
-- Frankly Inc. (TSX VENTURE: TLK)
(Frankly), a leader in transforming local TV broadcasters and
media companies by enabling them to publish and monetize their
digital content across multiple platforms, reported financial
results for the first quarter ended March
31, 2018. All financial statements have been prepared in
accordance with U.S. GAAP.
First Quarter 2018 Financial Results (All amounts in U.S.
dollars)
- Revenue decreased 8% to $5.8
million from $6.3 million in
the prior quarter, and decreased 9% from $6.4 million in the first quarter of 2017. The
year over year decrease was primarily due to decreases in local
advertising fees as well as professional services fees due to less
ad hoc professional services engagements in the 2018 period.
- Net loss totaled $(3.8) million
compared to $(10.2) million in the
prior quarter and $(1.5) million in
the first quarter of 2017. The year over year increase in net loss
was primarily due to a $597,000
decrease in revenue discussed above, a $583,000 increase in general and administrative
expense due to a bad debt reserve in the amount of $688,000 relating to one advertising customer, a
$588,000 increase in retention
expense relating to our employee retention plan which was rolled
out in connection with the strategic investor search in the fourth
quarter of 2017 and a $461,000
increase in restructuring expense related to a company-wide
reduction-in-force.
- Adjusted EBITDA loss was $(756,000) compared to adjusted EBITDA loss of
$(207,000) in the prior quarter, and
adjusted EBITDA of $428,000 in the
first quarter of 2017 (see discussion about the presentation of
adjusted EBITDA below). The year over year decrease in adjusted
EBITDA was primarily due to an increase in net loss of $2.3 million explained above, partially offset by
add-backs to net income for the $588,000 increase in retention expense and
$461,000 increase in restructuring
expense explained above.
- At March 31, 2018, the company
had $1.4 million in cash and
restricted cash. Subsequent to the quarter end, the company entered
into an amendment of its existing credit facility with Raycom.
Under the terms of the amendment, Raycom would provide Frankly with
an additional $7.5 million of
funding, to be paid in installments over a six-month period,
subject to Frankly's achievement of certain operational
milestones.
Management Commentary
"The first quarter marked the
beginning of our revitalized efforts to put Frankly back on the
path toward long-term profitability," said company CEO Lou Schwartz. "This plan to reduce expenses in
non-strategic areas will take a bit of time to be fully realized,
but we've now made the necessary first moves to ensure that we can
evolve into an organization built to last. In the meantime,
our recently amended credit agreement will provide us with the
necessary capital to continue focusing our business on areas of
high growth that will provide greater returns in the long run.
"Operationally, both Frankly Local and Frankly Data continue to
present our most significant monetization opportunities, which is
why we've continued to dedicate our time and resources to these
initiatives. Additionally, we are looking forward to the
successful migration of our legacy CMS customers to our innovative,
next-gen platform and the scheduled transition of Frankly video
customers onto our new cloud-based platform, as these processes
will enable us to begin generating additional recurring
revenues. Moving forward, our pipeline continues to grow at a
healthy pace, and we remain on track to achieve our near-term goal
of operating cash flow profitability by the end of this year as
well as our long-term goal in becoming truly
self-sustaining."
About Frankly
Frankly (TSX VENTURE: TLK) builds an
integrated software platform for media companies to create,
distribute, analyze and monetize their content across all of their
digital properties on web, mobile and TV. Its customers
include NBC, ABC, CBS and FOX affiliates. The company is
headquartered in in New York. To
learn more, visit www.franklyinc.com.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release.
Non-GAAP Measures
The Company reports earnings before
interest, taxes, depreciation and amortization ("EBITDA") and
Adjusted EBITDA, which are not financial measures calculated and
presented in accordance with Generally Accepted Accounting
Principles ("GAAP") and therefore may not be comparable to similar
measures presented by other issuers. EBITDA and Adjusted EBITDA
should not be considered in isolation or as a substitute to net
income (loss) or any other financial measures of performance or
liquidity calculated and presented in accordance with GAAP. The
Company defines Adjusted EBITDA as EBITDA, adjusted to exclude
certain non-cash charges and other items that we do not believe are
reflective of our ongoing operating results. The Company utilizes
Adjusted EBITDA internally for purposes of forecasting, determining
compensation, and assessing the performance of our business,
therefore, we believe this measure provides useful supplemental
information that may assist investors in assessing an investment in
the Company.
The following unaudited table presents the reconciliation of net
loss to Adjusted EBITDA for the three months ended March 31, 2018 and 2017, respectively.
|
|
Three Months
Ended March 31,
|
|
|
2018
|
|
2017
|
|
|
|
|
|
Net Loss
|
|
$
(3,809,493)
|
|
$
(1,503,819)
|
Interest expense,
net
|
|
597,096
|
|
610,205
|
Income tax
expense
|
|
-
|
|
-
|
Depreciation and
amortization
|
|
1,147,245
|
|
1,066,731
|
Stock-based
compensation
|
|
235,040
|
|
228,166
|
Transaction
costs
|
|
24,673
|
|
-
|
Restructuring
expense
|
|
460,960
|
|
-
|
Retention
expense
|
|
588,099
|
|
-
|
Other
expense
|
|
-
|
|
27,017
|
Adjusted
EBITDA
|
|
$
(756,380)
|
|
$
428,300
|
|
|
|
|
|
Notice Regarding Forward-Looking
Statements
This release includes forward-looking
statements regarding Frankly and its respective businesses.
Forward-looking events and circumstances discussed in this release,
including statements with respect to the amendment to the Credit
Agreement and the Company's achievement of operational milestones,
may not occur by certain specified dates or at all and could differ
materially as a result of known and unknown risk factors and
uncertainties affecting the parties. Forward looking
statements depend on certain assumptions that management deems to
be reasonable in the circumstances, but such assumptions may prove
to be incorrect and the outcome of the subject of any
forward-looking statement cannot be guaranteed. Except as
required by applicable securities laws, forward-looking statements
speak only as of the date on which they are made and Frankly
undertakes no obligation to publicly update or revise any
forward-looking statement, whether as a result of new information,
future events, or otherwise.
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content:http://www.prnewswire.com/news-releases/frankly-reports-first-quarter-2018-financial-results-300648933.html
SOURCE Frankly Inc.