LONG ISLAND CITY, N.Y.,
April 2, 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 fourth quarter and fiscal year ended December 31, 2017. All financial statements have
been prepared in accordance with U.S. GAAP.
Full Year 2017 Financial Results (All amounts in U.S.
dollars)
- Revenue increased 13% to $25.7
million from $22.8 million in
2016. The increase in revenue was primarily due to contractual
changes to the company's advertising program requiring it to
recognize gross revenues beyond commissions, as well as increases
in usage and professional services fees.
- Net loss totaled $(17.2) million
compared to $(10.7) million in 2016.
The increase in net loss was due to $2.4
million increase in non-cash goodwill impairment expense,
$1.0 million increase in non-cash
depreciation and amortization expense, $0.9
million increase in other expense comprised primarily of
expense associated with our strategic transaction retention plan
initiated in the fourth quarter of 2017, $1.2 million increase in interest expense, net
due to the August 2016 refinancing
with Raycom and $0.5 million increase
in professional fees.
- Adjusted EBITDA loss totaled $(339,000) compared to adjusted EBITDA of
$335,000 in 2016 (see discussion
about the presentation of adjusted EBITDA below).
Fourth Quarter 2017 Financial Results (All amounts in U.S.
dollars)
- Revenue decreased 4% to $6.3
million from $6.5 million in
the prior quarter, and increased 2% from $6.1 million in the fourth quarter of 2016. The
year over year increase was primarily due to increases in license
fees for the launch of our native mobile and OTT applications.
- Net loss totaled $(10.2) million
compared to $(3.1) million in the
prior quarter and $(6.3) million in
the fourth quarter of 2016. Net loss for the fourth quarter of 2017
included a non-cash impairment expense of $6.5 million against the goodwill recognized on
the Worldnow acquisition (completed in 2015), compared to a
goodwill impairment expense of $4.2
million in the same year-ago quarter.
- Adjusted EBITDA loss was $(207,000) compared to adjusted EBITDA loss of
$(180,000) in the prior quarter, and
adjusted EBITDA of $104,000 in the
fourth quarter of 2016 (see discussion about the presentation of
adjusted EBITDA below). The higher adjusted EBITDA loss in the
fourth quarter of 2017 was primarily due to higher research and
development expenses to accelerate the company's product roadmap,
which are intended to take advantage of increased customer
opportunities in the company's pipeline in 2018, as well as an
increase in professional fees concerning legal matters of the
company.
- At December 31, 2017, the company
had $1.9 million in cash and
restricted cash. As part of our announced process to explore
strategic alternatives, we are currently in negotiations concerning
an additional credit facility that, if successfully completed,
would provide funding needed to sustain operations through
2018.
Management Commentary
"2017 will be remembered as a
pivotal year in Frankly's long-term evolution into a stronger, more
innovative and, ultimately, profitable organization," said company
COO and CFO Lou Schwartz. "Despite
some of the hurdles we faced during the year, we still successfully
managed to grow our topline, which is a further endorsement of the
strength in our business model. Moving forward, we anticipate that
the continued growth of Frankly Local and Frankly Data, two of our
major growth and innovation-focused initiatives, will provide us
with even greater monetization capabilities. We also believe the
successful migration of our legacy CMS customers to our next-gen
platform as well as the scheduled transition of Frankly video
customers onto our new cloud-based platform, which features a more
modernized workflow, will allow us to start generating additional
incremental and recurring revenues beginning in 2018.
"In all, we entered the new year with a strengthened product
portfolio and a growing pipeline of new business, elements we
believe will drive our expansion moving forward. In conjunction
with our long-term growth focus, we also recently implemented an
aggressive optimization plan during the first quarter of 2018 to
reduce expenses in non-strategic areas. Our ultimate goal is to
achieve growth and profitability which will turn Frankly
into a self-sustaining organization for the many years
ahead."
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 fiscal years ended December 31, 2017 and 2016, respectively.
|
|
Year Ended
December 31,
|
|
|
2017
|
|
2016
|
|
|
|
|
|
Net Loss
|
|
$
(17,193,639)
|
|
$
(10,710,942)
|
Interest expense,
net
|
|
2,459,514
|
|
1,266,096
|
Income tax
expense
|
|
-
|
|
-
|
Depreciation and
amortization
|
|
4,381,888
|
|
3,398,491
|
Stock-based
compensation
|
|
1,141,117
|
|
1,190,960
|
Impairment
expense
|
|
6,630,936
|
|
4,209,000
|
Loss on disposal of
assets
|
|
-
|
|
1,093
|
Loss on
extinguishment of debt
|
|
38,287
|
|
-
|
Transaction
costs
|
|
139,710
|
|
-
|
Nasdaq listing
fees
|
|
913,690
|
|
774,152
|
Retention
plan
|
|
740,523
|
|
-
|
Litigation
expense
|
|
381,562
|
|
-
|
Other
expense
|
|
27,017
|
|
205,681
|
Adjusted
EBITDA
|
|
$
(339,395)
|
|
$
334,531
|
|
|
|
|
|
Notice Regarding Forward-Looking
Statements
This release includes forward-looking
statements regarding Frankly and their respective businesses.
Forward-looking events and circumstances discussed in this release,
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. No forward-looking statement
can 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.
View original
content:http://www.prnewswire.com/news-releases/frankly-reports-results-for-the-fourth-quarter-and-full-year-2017-300623009.html
SOURCE Frankly Inc.