RLJ Entertainment Reports Fourth Quarter And Full Year 2017 Financial Results

SILVER SPRING, Md., March 15, 2018 /PRNewswire/ -- RLJ Entertainment, Inc. ("RLJ Entertainment," "RLJE" or "the Company") (NASDAQ: RLJE), today announced financial results for the quarter and year ended December 31, 2017. 

Fourth Quarter 2017 Highlights

• Digital Channels paying subscribers increased over 50% from the fourth quarter of 2016 to over 680,000. Digital Channels segment revenues increased 50.4% to $7.8 million from $5.2 million in fourth quarter 2016.

• Total net revenue increased 15.3% year-over-year to $32.7 million, primarily driven by the increase in Digital Channels revenue. Wholesale Distribution segment revenue increased 7.9% year-over-year.

• Gross profit increased 52.0% year-over-year to $14.4 million and Gross margin of 44.2% expanded over 10 percentage points from 33.5% last year. These profit improvements were driven by growth in our Digital Channels revenue.

• Equity Earnings from Agatha Christie Limited (ACL) increased 219.5% year-over-year to $2.8 million; ACL film and publishing business segments grew year-over-year, primarily driven by Murder on the Orient Express theatrical release.

• Net income was $3.8 million, an improvement of $8.1 million from net loss of $4.3 million in fourth quarter of 2016.

Full Year 2017 Highlights

• Digital Channels segment revenue increased 67.2% to $27.2 million on over 50% paying subscriber growth and was 31.5% of 2017 total net revenue compared to 20.3% of 2016 total net revenue.

• Total net revenue increased 7.6% to $86.3 million, primarily driven by the increase in Digital Channels revenue.

• Gross profit increased 40.7% to $37.1 million and gross margin increased over ten percentage points to 43.0% in 2017 from last year. Continued growth in Digital Channels, representing a larger portion of total revenue, drove the improvements in in gross profit and gross margin.

• Net loss improved by $15.7 million and was $6.1 million for the year compared to a net loss of $21.9 million last year. Net income adjusted for non-cash warrant expense and 2012 fair value step up amortization would have been positive $1.0 million for 2017 compared to loss of $10.6 million in 2016.

• Adjusted EBITDA improved 26.5% to $16.6 million from $13.1 million last year.

Robert L. Johnson, Chairman of RLJ Entertainment, stated, "2017 was a year of dynamic development for RLJ Entertainment in every sense as the Company wins its share of premium audiences demanding a la carte channels that offer targeted, compelling programming backed by direct marketing and expanding distribution. Given the success of this strategy as demonstrated by these strong results, the tremendous opportunity that the quickly expanding OTT landscape affords and the appeal of Acorn TV and UMC, we expect the Company's timely strategy of increasing investments to drive accelerating value creation for subscribers and investors."

Miguel Penella, Chief Executive Officer of RLJ Entertainment, stated, "2017 was an instrumental year of strategic, financial and operating achievement, benchmarking well against our long-term strategic growth plan. We delivered excellent results for the year, driving rapid Digital Channels subscriber and high-margin revenue growth, leveraging our IP licensing capability and benefiting from Agatha Christie's robust performance, and transforming our media distribution and wholesale business toward digital media distribution. Our 2018 plan is to further intensify our Digital Channels' investments in selective, compelling and original programming, supported by increasingly strong marketing with the objective of achieving our 1 million subscriber target within 12 months."

Nazir Rostom, Chief Financial Officer of RLJ Entertainment, commented, "Fourth quarter 2017 results demonstrate the power of our strategy and the skill of our execution, driving our third consecutive quarter of total top-line growth. Our gross margin and EBITDA margin is expected to continue to expand as Digital Channels revenue continues to grow. With a solid balance sheet and clear 2018 priorities, we enter 2018 with strong momentum to deliver another year of growth in revenue, gross margin and bottom-line profitability."

Conference Call Information
RLJE will hold a conference call today at 11:30 a.m. ET to discuss these results.  To participate in the live conference call, +1.844.348.1685 (+1.213.358.0890 outside the U.S. and Canada) and providing the conference ID number 2593968, or listen via webcast at www.RLJEntertainment.com/events/.  The webcast will be archived in the investors section of RLJE's website.

About RLJ Entertainment, Inc.

RLJ Entertainment, Inc. (NASDAQ: RLJE) is a premium digital channel company serving distinct audiences primarily through its popular OTT branded channels, Acorn TV (British TV) and UMC (Urban Movie Channel), which have rapidly grown through development, acquisition, and distribution of its exclusive rights to a large library of international and British dramas, independent feature films and urban content. RLJE's titles are also distributed in multiple formats including broadcast and pay television, theatrical and non-theatrical, DVD, Blu-ray, and a variety of digital distribution models (including EST, VOD, SVOD and AVOD) in North America, the United Kingdom, and Australia. Additionally, through Acorn Media Enterprises, its UK development arm, RLJE co-produces and develops new programs and owns 64% of Agatha Christie Limited. For more information, please visit RLJEntertainment.com, Acorn.tv, and UMC.tv.

Forward Looking Statements

This press release may include "forward looking statements" within the meaning of the "safe harbor" provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Other than statements of historical fact, all statements made in this press release are forward-looking, including, but not limited to, statements regarding goals, industry prospects, future results of operations or financial position, and statements of our intent, belief and current expectations about our strategic direction, prospective and future results and condition.  In some cases, forward-looking statements may be identified by words such as "will," "should," "could," "may," "might," "expect," "plan," "possible," "potential," "predict," "anticipate," "believe," "estimate," "continue," "future," "intend," "project" or similar words. 

Forward-looking statements involve risks and uncertainties that are inherently difficult to predict, which could cause actual outcomes and results to differ materially from our expectations, forecasts and assumptions.  Factors that might cause such differences include, but are not limited to:

• Our financial performance, including our ability to achieve improved results from operations and improved earnings before income tax, depreciation and amortization, non-cash royalty expense, interest expense, non-cash exchange gains and losses on intercompany accounts, goodwill impairments, restructuring costs, change in fair value of stock warrants and other derivatives, stock-based compensation, basis-difference amortization in equity earnings of affiliate and dividends received from affiliate in excess of equity earnings of affiliate (or Adjusted EBITDA);

• Our expectation that subscribers, revenues and financial performance of our digital channels will continue to grow and have a positive effect on our liquidity, cash flows and operating results; The effects of limited cash liquidity on operational performance;

• Our obligations under the credit agreement;

• Our ability to satisfy financial ratios;

• Our ability to generate sufficient cash flows from operating activities;

• Our ability to fund planned capital expenditures and development efforts;

• Our inability to gauge and predict the commercial success of our programming;

• Our ability to maintain relationships with customers, employees and suppliers, including our ability to enter into revised payment plans, when necessary, with our vendors that are acceptable to all parties;

• Our ability to realize anticipated synergies and other efficiencies in connection with the AMC transaction;

• Delays in the release of new titles or other content;

• The effects of disruptions in our supply chain;

• The loss of key personnel; or

• Our public securities' limited liquidity and trading.

You should carefully consider and evaluate all of the information in this press release, including the risk factors listed above and in our Form 10-K filed with the Securities Exchange Commission (or SEC), including "Item 1A.  Risk Factors."  If any of these risks occur, our business, results of operations, and financial condition could be harmed, the price of our common stock could decline and you may lose all or part of your investment, and future events and circumstances could differ significantly from those anticipated in the forward-looking statements contained in this press release.  Unless otherwise required by law, we undertake no obligation to release publicly any updates or revisions to any such forward-looking statements that may reflect events or circumstances occurring after the date of this press release.

Readers are referred to the most recent reports filed with the SEC by RLJ Entertainment. Readers are cautioned not to place undue reliance upon any forward-looking statements, which speak only as of the date made, and we undertake no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.

Media Contact: 
Traci Otey Blunt, 301-830-6204
RLJ Entertainment, Inc. 
[email protected]

Investor Contact: 
Jody Burfening/Carolyn Capaccio, 212-838-3777
LHA
[email protected]

SOURCE RLJ Entertainment, Inc.