Year-to-Date 2021 Revenue Up 34 Percent
Year-Over-Year to $165 Million
Consumer Business Accelerates Revenue
Growth, Margin Expansion
Management to Host Investor Call November
30, 2021 at 9:00am ET
Forbes Global Media Holdings Inc., the iconic business
information brand that convenes and curates the most influential
leaders driving change, which is pursuing a business combination
with Magnum Opus Acquisition Limited (NYSE: OPA), a publicly traded
special purpose acquisition company focusing on the global
consumer, technology and media sector, today announced its
financial results for the nine months ended September 30, 2021.
Forbes’ financial results, discussed below, may be found in the
Preliminary Proxy Statement filed with the U.S. Securities and
Exchange Commission on November 22,, 2021, and accessible at the
SEC’s website (www.sec.gov) or by clicking here.
The Company’s year-to-date 2021 revenue increased 34 percent to
$165 million, driven by contributions from the Company’s Consumer
business, which was up 83 percent year-over-year, and illustrating
progress in its direct-to-consumer conversion strategy.
Consumer revenue includes triple-digit growth year-over-year
from Marketplace revenue, the consumer finance platform, as well as
double-digit growth from Forbes Vetted, the Company’s affiliate
shopping site, evidencing Forbes’ ability to actively engage
consumers in new ways and convert into new, diversified forms of
revenue.
The Company had net income of $19.5 million for year-to-date
2021, compared to net loss of $2.8 million for the same period in
2020. Year-to-date 2021 Adjusted EBITDA increased 133 percent to
$33 million, demonstrating the inherent operating leverage in the
Forbes business, and reflecting additional contributions from
Forbes’ Consumer initiatives, including Marketplace, which, for the
first time, turned profitable on an Adjusted EBITDA basis with
industry-leading margins versus prior periods.
The Company also saw record levels of cash generation, with free
cash flow of $28 million (i.e., net cash provided by operating
activities of $32.7 million less net cash used in investing
activities of $4.8 million) through September 30, 2021, equal to 83
percent of Adjusted EBITDA.
“Our year-to-date 2021 results reflect outstanding work from the
entire Forbes team, who constantly elevates our iconic brand equity
around the world, executing our customer conversion plan atop the
trusted and ever-relevant Forbes platform,” said Mike Federle,
Chief Executive Officer of Forbes. “Our financial results for the
first nine months of 2021 illustrate that our consumer conversion
strategy is working. Revenue of $165 million reflects accelerated
contributions from the direct-to-consumer business, and Adjusted
EBITDA of $33 million demonstrates our operating leverage, as well
as contributions from newer initiatives like Forbes Vetted, and
Marketplace, where our consumer finance platform business turned
profitable in the period.”
Mr. Federle continued, “I am confident in our team’s ability to
close the gap between our enterprise value and our brand value in
the coming years, as we convert even a small percentage of our
audience of 150 million into paying customers through
direct-to-consumer, differentiated product offerings, engaging
across a broad suite of consumer products deeply associated with
success and validation in culture today.”
“Looking at the remainder of the year, the fourth quarter has
historically been our largest quarter from a revenue and
profitability standpoint, with the fourth quarter of 2020
representing approximately 34 percent of 2020 revenues and more
than 70 percent of 2020 Adjusted EBITDA,” said Mike York, Chief
Financial Officer of Forbes. “As of August, our initial full-year
financial targets were $211 million in pro forma revenue and $44
million in pro forma Adjusted EBITDA. We intend to update investors
again regarding the full-year 2021 financial performance when we
hold our Analyst Day in January 2022.”
Investor Call
Management will host an investor call at 9:00am ET on November
30, 2021 to further discuss the results. Listeners may access the
call by clicking here. To learn more, please visit the Investor
Relations page of the Forbes or Magnum Opus website at
https://www.forbes.com/connect/investor-relations/ or
https://www.opusacquisition.com.
Business Combination
On August 26, 2021, Forbes entered into a definitive agreement
with Magnum Opus, enabling the Company to further capitalize on its
successful digital transformation, using technology and data-driven
insights to create more deeply engaged audiences, and associated
high-quality and recurring revenue streams.
The business combination is subject to customary closing
conditions and is expected to be consummated in the first quarter
of 2022. Upon the closing of the business combination, the Company
will operate under the Forbes name and is expected to be listed on
the New York Stock Exchange trading under the new symbol
“FRBS.”
About Forbes
Forbes champions success by celebrating those who have made it,
and those who aspire to make it. Forbes convenes and curates the
most influential leaders and entrepreneurs who are driving change,
transforming business and making a significant impact on the world.
The Forbes brand today reaches more than 150 million people
worldwide through its trusted journalism, signature LIVE and Forbes
Virtual events, custom marketing programs and 46 licensed local
editions in 77 countries. Forbes Media’s brand extensions include
real estate, education and financial services license
agreements.
Forbes recently announced plans to go public through a business
combination with Magnum Opus (NYSE: OPA), a special purpose
acquisition company (SPAC), which is expected to close in the first
quarter of 2022.
About Magnum Opus
Magnum Opus Acquisition Limited is a special purpose acquisition
company sponsored by L2 Capital, a private investment firm. Magnum
Opus is a partnership of enterprise builders and public and private
market investment specialists with extensive experience operating
and investing throughout the business life cycle from founding,
scaling operations through public listing. Magnum Opus aims to
partner with public ready enterprises at the forefront of
convergence of consumption and technology. Magnum Opus’ mission is
to support companies to realize their vision as they embark on
their journey into the public markets and face new opportunities,
challenges and stakeholders.
For more information, please visit Investor Relations: Magnum
Opus Acquisition Limited (OPA).
Cautionary Statement Regarding Forward-Looking
Statements
This communication contains forward-looking statements within
the meaning of section 27A of the Securities Act and section 21E of
the Exchange Act that are based on beliefs and assumptions and on
information currently available to Magnum Opus and Forbes. In some
cases, you can identify forward-looking statements by the following
words: “may,” “will,” “could,” “would,” “should,” “expect,”
“intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,”
“project,” “potential,” “continue,” “ongoing,” “target,” “seek” or
the negative or plural of these words, or other similar expressions
that are predictions or indicate future events or prospects,
although not all forward-looking statements contain these words.
Any statements that refer to expectations, projections or other
characterizations of future events or circumstances, including
strategies or plans as they relate to the proposed transaction, are
also forward-looking statements. These statements involve risks,
uncertainties and other factors, including the risk factors related
to Forbes described in the Preliminary Proxy Statement filed by
Magnum Opus with the SEC, that may cause actual results, levels of
activity, performance or achievements to be materially different
from those expressed or implied by these forward-looking
statements. Although each of Magnum Opus and Forbes believes that
it has a reasonable basis for each forward-looking statement
contained in this communication, each of Magnum Opus and Forbes
cautions you that these statements are based on a combination of
facts and factors currently known and projections of the future,
which are inherently uncertain. In addition, there are risks and
uncertainties relating to the proposed transaction that have been
described in the Preliminary Proxy Statement filed by Magnum Opus
with the SEC and other risks and uncertainties that will be
described in other documents to be filed by Forbes or Magnum Opus
from time to time with the SEC. These filings may identify and
address other important risks and uncertainties that could cause
actual events and results to differ materially from those expressed
or implied in the forward-looking statements. Forward-looking
statements in this communication include statements regarding the
proposed transaction, including the timing and structure of the
transaction, the proceeds of the transaction and the benefits of
the transaction, and Forbes’ growth projections. Neither Magnum
Opus nor Forbes can assure you that the forward-looking statements
in this communication will prove to be accurate. These
forward-looking statements are subject to a number of risks and
uncertainties, including the ability to complete the Business
Combination due to the failure to obtain approval from Magnum
Opus’s shareholders or satisfy other closing conditions in the
Business Combination agreement, the occurrence of any event that
could give rise to the termination of the Business Combination
agreement, the ability to recognize the anticipated benefits of the
Business Combination, the amount of redemption requests made by
Magnum Opus’s public shareholders, costs related to the
transaction, the impact of the global COVID-19 pandemic, the risk
that the transaction disrupts current plans and operations as a
result of the announcement and consummation of the transaction, the
outcome of any potential litigation, government or regulatory
proceedings and other risks and uncertainties, including those
included under the heading “Risk Factors” in the proxy statement
filed by Magnum Opus with the SEC and those included under the
heading “Risk Factors” in the Magnum Opus’s final prospectus
relating to its initial public offering dated March 23, 2021 and
other filings with the SEC. In light of the significant
uncertainties in these forward-looking statements, you should not
regard these statements as a representation or warranty by Magnum
Opus, Forbes, their respective directors, officers or employees or
any other person that Magnum Opus and Forbes will achieve their
objectives and plans in any specified time frame, or at all. The
forward-looking statements in this communication represent the
views of Magnum Opus and Forbes as of the date of this
communication. Subsequent events and developments may cause those
views to change. However, while Magnum Opus and Forbes may update
these forward-looking statements in the future, there is no current
intention to do so, except to the extent required by applicable
law. You should, therefore, not rely on these forward-looking
statements as representing the views of Magnum Opus or Forbes as of
any date subsequent to the date of this communication.
Important Information and Where to Find It
In connection with the proposed transaction, Magnum Opus has
filed a Preliminary Proxy Statement and plans to file a Definitive
Proxy Statement with respect to the shareholders meeting of Magnum
Opus to vote on the proposed transaction. Shareholders of Magnum
Opus and other interested persons are encouraged to read the
Preliminary Proxy Statement and, when available, any amendments
thereto and the Definitive Proxy Statement as well as other
documents to be filed with the SEC because these documents contain,
or will contain, important information about Magnum Opus, Forbes
and the proposed transaction. The Definitive Proxy Statement will
be mailed to shareholders of Magnum Opus as of a record date to be
established for voting on the proposed transaction. Once available,
shareholders of Magnum Opus will also be able to obtain a copy of
the proxy statements and other documents filed with the SEC without
charge, by directing a request to: Unit 1009, ICBC Tower, Three
Garden Road, Central, Hong Kong. The Preliminary Proxy Statement
and, once available, the Definitive Proxy Statement can also be
obtained, without charge, at the SEC’s website (www.sec.gov).
Participants in the Solicitation
Magnum Opus and Forbes and their respective directors and
executive officers may be considered participants in the
solicitation of proxies with respect to the potential transaction
described in this communication under the rules of the SEC.
Information about the directors and executive officers of Magnum
Opus and their ownership is set forth in Magnum Opus’s filings with
the SEC, including its final prospectus relating to its initial
public offering dated March 23, 2021. Additional information
regarding the persons who may, under the rules of the SEC, be
deemed participants in the solicitation of the Magnum Opus
shareholders in connection with the potential transaction is set
forth in the Preliminary Proxy Statement filed with the SEC and
will be set forth in the Definitive Proxy Statement to be filed
with the SEC. These documents are available free of charge at the
SEC’s website at www.sec.gov or by directing a request to: Unit
1009, ICBC Tower, Three Garden Road, Central, Hong Kong.
No Offer or Solicitation
This communication is not a proxy statement or solicitation of a
proxy, consent or authorization with respect to any securities or
in respect of the potential transaction and does not constitute an
offer to sell or a solicitation of an offer to buy any securities
of Magnum Opus or Forbes, nor shall there be any sale of any such
securities in any state or jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of such state or
jurisdiction. No offer of securities shall be made except by means
of a prospectus meeting the requirements of the Securities Act.
Adjusted EBITDA
Adjusted EBITDA is a non-GAAP financial measure and represents a
key metric used by Forbes’ management and board of directors to
measure the operational strength and performance of its business,
to establish budgets, and to develop operational goals for managing
its business. Adjusted EBITDA is defined as net income before
interest expense, income taxes, depreciation and amortization
expense, deferred compensation, management fees, minority interest
expense, restructuring charges, impairment and certain discrete
items impacting a particular segment’s results in a particular
period.
Forbes believes Adjusted EBITDA is relevant and useful
information for investors because it allows investors to view
performance in a manner similar to the method used by management.
There are limitations on the use of Adjusted EBITDA and it may not
be comparable to similarly titled measures of other companies.
Other companies, including companies in Forbes’ industry, may
calculate non-GAAP financial measures differently than Forbes does,
limiting the usefulness of those measures for comparative
purposes.
Adjusted EBITDA should not be considered a substitute for income
(loss) from operations, net income (loss), or net income (loss)
attributable to Forbes on a consolidated basis that Forbes has
reported in accordance with GAAP. Although Forbes uses Adjusted
EBITDA as a financial measure to assess the performance of its
business, such use is limited because it does not include certain
costs necessary to operate Forbes’ business. Forbes’ presentation
of Adjusted EBITDA should not be construed as indications that its
future results will be unaffected by unusual or nonrecurring
items.
The following table reconciles consolidated net income (loss) to
Adjusted EBITDA for the periods presented:
Nine Months Ended September
30,
2021
2020
(in thousands)
Net income (loss)
$
19,508
$
(2,772)
Interest expense
605
752
Interest income
(18)
(18)
Income taxes
3,922
517
Depreciation and amortization
11,113
10,038
Stock-based compensation
3,050
(2,409)
Management fees
750
730
Gain/loss on sale
(1,384)
(12)
Restructuring charges(1)
2,336
6,736
Goodwill impairment
-
-
Gain on loan forgiveness
(8,036)
-
Gain on sale of Forbes Media Hong Kong
Limited
(1,556)
-
Other(2)
3,154
793
Adjusted EBITDA
$
33,444
$
14,355
(1)
The restructuring charges consist of
severance related expenses and costs incurred in businesses that
are no longer operational.
(2)
Relates to the amortization of
deferred revenue that was initially recognized at fair value during
the 2014 business combination pursuant to a Membership Interest
Purchase Agreement executed on July 16, 2014. This amount also
includes losses in equity method investments.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211129005711/en/
Investors: ICR Ashley DeSimone Ashley.DeSimone@icrinc.com
(646) 677-1827 ICR Brett Milotte Brett.Milotte@icrinc.com (332)
242-4344 Media: Bill Hankes (U.S.) bhankes@forbes.com
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