-- Integration Activities Positively Impacted Operating
Cost Structure
-- On Track to Achieve Annualized Cost Savings in the
Range of $8 to $10 Million by
Year-End 2014 Driven by Efficiency Program Synergies
TORONTO, Aug. 15, 2014 /PRNewswire/ -- Mood Media
Corporation ("Mood Media" or "the Company") (ISIN: CA61534J1057)
(TSX:MM) (LSE AIM:MM), the world's largest integrated provider of
in-store customer experience solutions, today reported results for
the second quarter of 2014 and updated its strategic and
operational plans.
Recent Highlights
- Achieved second quarter revenues of $120
million and EBITDA of $24.0
million;
- Continued to successfully implement global integration and
consolidation activities; based upon strong results to date,
finalizing synergy target to range of $8 to
$10 million in annualized cost savings by year-end
2014;
- Expanded Local Sales organization and delivered new
products;
- Reiterated 2014 financial outlook.
"In the second quarter, we continued to relentlessly focus on
executing our strategic plan and further strengthened our platform
for long-term sustainable growth," said Steve Richards, President and CEO of Mood Media.
"Over the past 10 months we have worked steadfastly to engender a
culture of accountability, and the entire Mood Media team is
focused on improving the efficiency and consistency of our
business. Notably, we are making significant progress on our
strategies surrounding Local Sales, product and solutions
development, and partnership expansion. During the second quarter,
we continued to build out our Local Sales teams in North America and the international markets,
launched new compelling services called Mood Mix and Mood Social
Wifi and advanced our mobile solutions, all of which we expect will
contribute to our future growth. Our cost savings initiatives are
also beginning to deliver tangible returns and, based upon our
strong execution to date, we are finalizing our annualized cost
savings expectations to a range of $8 to $10
million by year-end 2014.
"We are gaining important traction with our visuals and mobile
services," continued Mr. Richards. "In the first half of 2014 we
signed our largest U.S. contracts to date and launched our first
large-scale mobile promotion in conjunction with a major Premier
brand. This positive momentum underscores the strength of our
strategy and the results our focused efforts are producing. We
believe we have taken consequential steps forward that will allow
Mood Media to deliver on its full potential for both our clients
and stakeholders. While the complete transformation of Mood Media
will be an ongoing effort, we are energized as we take solid
strides toward achieving these goals and targets. We look forward
to continued success as we focus on building a great Company and
realizing the potential we have before us."
Second Quarter Financial Results
The Company reported Q2 revenues of $120
million and EBITDA of $24
million. Net loss per share from continuing operations was
($0.18) compared with net loss of
($0.05) in the prior-year period. The
Company's second quarter revenue and EBITDA performance was
impacted by the sale of its Latin American residential operation,
the revised terms of its affiliate agreement, lower equipment and
recurring sales, and lower performance at Technomedia and BIS.
These factors were partially offset by the benefits of integration
and synergy programs that produced a reduction of $3.5 million in operating expenses in its North
American and International operations for the quarter; however,
these operating expense reductions were partially offset by
increases due to the foreign exchange impact and expenses in the
Company's BIS subsidiary.
Other expense totaled $10 million
in the quarter compared with $8
million in the prior year. Other expense in the quarter
related to restructuring, transaction and settlement expenses and
was partially offset by gains on sale of non-core assets.
Restructuring expense pertains to the Company's integration and
synergy program. Transaction and settlement expenses relate to the
cost of resolving amounts in connection with past acquisitions.
Key Performance Indicators
|
|
|
|
|
|
|
|
|
|
2012
|
Q1.13
|
Q2.13
|
Q3.13
|
Q4.13
|
2013
|
Q1.14
|
Q2.14
|
|
|
|
|
|
|
|
|
|
Audio
sites
|
427,714
|
428,835
|
427,038
|
428,085
|
428,095
|
428,095
|
423,796
|
418,513
|
Visual
sites
|
10,929
|
11,552
|
12,115
|
12,479
|
12,666
|
12,666
|
12,997
|
13,821
|
Total
sites
|
438,643
|
440,387
|
439,153
|
440,564
|
440,761
|
440,761
|
436,793
|
432,334
|
|
|
|
|
|
|
|
|
|
Audio ARPU
|
$ 49.20
|
$ 47.19
|
$ 46.25
|
$ 45.65
|
$ 45.62
|
$ 46.17
|
$ 45.35
|
$ 45.17
|
Visual
ARPU
|
$115.39
|
$ 89.78
|
$ 83.42
|
$ 89.21
|
$ 81.27
|
$ 84.30
|
$ 84.59
|
$ 85.08
|
Blended
ARPU
|
$ 50.45
|
$ 48.28
|
$ 47.25
|
$ 46.87
|
$ 46.64
|
$ 47.23
|
$ 46.50
|
$ 46.40
|
|
|
|
|
|
|
|
|
|
Audio gross
additions
|
47,488
|
11,599
|
9,960
|
9,208
|
9,765
|
40,532
|
10,112
|
6,981
|
Visual gross
additions
|
5,180
|
1,092
|
699
|
497
|
1,219
|
3,507
|
478
|
996
|
Total gross
additions
|
52,668
|
12,691
|
10,659
|
9,705
|
10,984
|
44,039
|
10,590
|
7,977
|
|
|
|
|
|
|
|
|
|
Audio monthly
churn
|
0.8%
|
0.8%
|
0.9%
|
0.6%
|
0.8%
|
0.8%
|
1.1%
|
1.0%
|
Visual monthly
churn
|
0.8%
|
1.4%
|
0.4%
|
0.4%
|
2.8%
|
1.3%
|
0.4%
|
0.4%
|
Total monthly
churn
|
0.8%
|
0.8%
|
0.9%
|
0.6%
|
0.8%
|
0.8%
|
1.1%
|
0.9%
|
In the second quarter, the number of total Company-owned sites
declined by 1.6% year-over-year driven by a 2.0% decline in the
number of audio sites and a 14.1% increase in the number of visual
sites. The number of audio sites decreased moderately in
North America and in its
International operation. The number of visual sites increased in
both operations.
Blended ARPU declined by 1.8% year-over-year in the second
quarter to $46.40 per month and
remained stable compared with the first quarter ARPU of
$46.50. Audio ARPU decreased by 2.3%
relative to the prior year to $45.17
while visual ARPU rose by 2.0% year-over-year to $85.08. Audio ARPU declined in North America and remained stable in its
International operations. Visual ARPU increased in both
North America and in its
International operations.
Total monthly churn in the second quarter was 0.9% per month
reflecting an improvement over first quarter churn of 1.1%. Audio
churn of 1.0% per month improved relative to the first quarter in
International operations while churn in North America remained stable. Visual churn
remained stable at 0.4%.
Conference Call
As previously announced, the Company will hold a conference call on
August 15 at 8:00 a.m. Eastern Time to discuss its results and
respond to questions from the investment community. The call can be
accessed by telephone by dialing 416-764-8658, or 1 888-886-7786
for international callers. Listeners are advised to dial in at
least five minutes prior to the call.
This earnings release, which is current as of August 14, 2014, is a summary of our second
quarter results, and should be read in conjunction with our second
quarter 2014 MD&A and Consolidated Financial Statements and
Notes thereto and our other recent filings with securities
regulatory authorities in Canada
and the United Kingdom.
The financial information presented herein has been prepared on
the basis of IFRS for interim financial statements and is expressed
in United States dollars unless
otherwise stated.
This news release includes certain non-IFRS financial measures.
Mood Media uses these non-IFRS financial measures as supplemental
indicators of its operating performance and financial position.
These measures do not have any standardized meanings prescribed by
IFRS and therefore may not be comparable to the calculation of
similar measures used by other companies, and should not be viewed
as alternatives to measures of financial performance calculated in
accordance with IFRS.
In this earnings release, the terms "we", "us", "our", "Mood
Media" and "the Company" refer to Mood Media Corporation and our
subsidiaries.
Mood Media Corporation
INTERIM CONSOLIDATED STATEMENTS OF LOSS
Unaudited
For the three and six months ended June
30, 2014
In thousands of US dollars, unless otherwise stated
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Six months
ended
|
|
Notes
|
June 30,
2014
|
|
June 30,
2013
|
|
June 30,
2014
|
|
June 30,
2013
|
Continuing
operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
5
|
$119,881
|
|
$126,268
|
|
$242,871
|
|
$255,355
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
Cost of sales
(excludes depreciation and amortization)
|
|
53,346
|
|
54,476
|
|
110,770
|
|
113,163
|
|
Operating
expenses
|
|
42,510
|
|
44,134
|
|
84,726
|
|
88,572
|
|
Depreciation and
amortization
|
|
17,526
|
|
16,496
|
|
36,040
|
|
34,220
|
|
Share-based
compensation
|
13
|
(204)
|
|
325
|
|
612
|
|
688
|
|
Other
expenses
|
6
|
9,974
|
|
7,916
|
|
9,339
|
|
13,810
|
|
Foreign exchange loss
(gain) on financing transactions
|
|
1,766
|
|
(4,178)
|
|
760
|
|
1,857
|
|
Finance costs,
net
|
7
|
27,794
|
|
15,970
|
|
41,520
|
|
10,494
|
Loss for the
period before taxes
|
|
(32,831)
|
|
(8,871)
|
|
(40,896)
|
|
(7,449)
|
|
|
|
|
|
|
|
|
|
Income tax charge
(credit)
|
8
|
(197)
|
|
499
|
|
(766)
|
|
6,891
|
Loss for the
period from continuing operations
|
|
(32,634)
|
|
(9,370)
|
|
(40,130)
|
|
(14,340)
|
|
|
|
|
|
|
|
|
|
Discontinued
operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss after tax from
discontinued operations
|
15
|
-
|
|
(10,984)
|
|
-
|
|
(14,736)
|
Loss for the
period
|
|
(32,634)
|
|
(20,354)
|
|
(40,130)
|
|
(29,076)
|
|
|
|
|
|
|
|
|
|
Attributable
to:
|
|
|
|
|
|
|
|
|
Owners of the
parent
|
|
(32,670)
|
|
(20,476)
|
|
(40,173)
|
|
(29,314)
|
Non-controlling
interests
|
|
36
|
|
122
|
|
43
|
|
238
|
|
|
$(32,634)
|
|
$(20,354)
|
|
$(40,130)
|
|
$(29,076)
|
|
|
|
|
|
|
|
|
|
Net loss per
share
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
9
|
$(0.18)
|
|
$(0.12)
|
|
$(0.23)
|
|
$(0.17)
|
Basic and diluted
from continuing operations
|
9
|
(0.18)
|
|
(0.05)
|
|
(0.23)
|
|
(0.08)
|
Basic and diluted
from discontinued operations
|
9
|
0.00
|
|
(0.07)
|
|
0.00
|
|
(0.09)
|
About Mood Media Corporation
Mood Media Corporation (TSX:MM / LSE AIM:MM), is one of the world's
largest designers of in-store consumer experiences, including
audio, visual, interactive, scent, voice and advertising solutions.
Mood Media's solutions reach over 150 million consumers each day
through more than half a million subscriber locations in over 40
countries throughout North
America, Europe,
Asia and Australia.
Mood Media Corporation's client base includes more than 850 U.S.
and international brands in diverse market sectors that include:
retail, from fashion to financial services; hospitality, from
hotels to health spas; and food retail, including restaurants,
bars, quick-serve and fast casual dining. Our marketing platforms
include 77% of the top 100 retailers in the United States and 97% of the top 50
quick-serve and fast-casual restaurant companies.
For further information about Mood Media, please visit
www.moodmedia.com.
Cautionary Statement Regarding Forward-Looking
Statements
This press release contains forward-looking statements. The words
"believe", "expect", "anticipate", "estimate", "intend", "may",
"will", "would" and similar expressions and the negative of such
expressions are intended to identify forward-looking statements,
although not all forward-looking statements contain these
identifying words. These forward-looking statements are subject to
important assumptions, including without limitation, expected
growth, results of operations, performance, financial condition,
strategy and business prospects and opportunities. While Mood Media
considers these factors and assumptions to be reasonable based on
information currently available, they are inherently subject to
significant uncertainties and contingencies and may prove to be
incorrect.
Known and unknown factors could cause actual results to differ
materially from those projected in the forward-looking statements.
Such factors include, but are not limited to: the impact of general
market, industry, credit and economic conditions, currency
fluctuations as well as the risk factors identified in Mood Media's
management discussion and analysis dated Aug. 14, 2014 and Mood Media's annual information
form dated March 28, 2014, both of
which are available on www.sedar.com.
Given these uncertainties, readers are cautioned not to place
undue reliance on such forward-looking statements. All of the
forward-looking statements made in this press release are qualified
by these cautionary statements and other cautionary statements or
factors contained herein, and there can be no assurance that the
actual results or developments will be realized or, even if
substantially realized, that they will have the expected
consequences to, or effects on, Mood Media.
Forward-looking statements are given only as at the date hereof
and Mood Media disclaims any obligation to update or revise the
forward-looking statements, whether as a result of new information,
future events or otherwise, except as required by applicable
laws.
Mood Media Corporation presents EBITDA information as a
supplemental figure because management believes it provides useful
information regarding operating performance. EBITDA is not a
recognized measure under International Financial Reporting
Standards ("IFRS"), does not have standardized meaning, and is
unlikely to be comparable to similar measures used by other
companies. Accordingly, investors are cautioned that EBITDA should
not be construed as an alternative to net earnings or (loss)
determined in accordance with IFRS as an indicator of the financial
performance of Mood Media or as a measure of Mood Media's liquidity
and cash flows. For a reconciliation of EBITDA to the Consolidated
Statements of Income (Loss), please see Footnote 18 to the Interim
Consolidated Financial Statements which provides Segment
Information.
For further information:
Investor Inquiries
Randal Rudniski
Mood Media Corporation
Tel: +1-512-592-2438
Email: randal.rudniski@moodmedia.com
Dominic Morley
Panmure Gordon (UK) Limited
+44-020-7886-2500
North America Media Inquiries
Sumter Cox
Mood Media Corporation
Senior Director of Marketing and Communications
Tel: +1-803-242-9147
(MM.)