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ErosSTX Announces Preliminary Headline Results for Nine Months Ended December 31, 2020; Update on STX Film Strategy and Global Debt Refinancing
DOUGLAS, Isle of Man &
Preliminary Headline Financial Results for Nine Months Ended
The following summarizes preliminary financials from
Operating Profit was
$7 millionand Adjusted Operating Profit, excluding merger related costs, was $22 millioncompared to an operating loss of $(99) millionin the first nine months of fiscal 2020.
$219 millioncompared to $315 millionin the prior year period. This decline was driven by a significant reduction in global film releases resulting from the negative effects of COVID, partially offset by revenue growth from the STX film library.
Operating Expenses were
$212 millionand Adjusted Operating Expenses, excluding merger related costs, were $197 millioncompared to $414 millionin the prior year period. This decline was driven by significantly lower film release marketing and distribution costs due to COVID.
Net Cashprovided by Operating Activities was $25 millionand Adjusted Net Cashprovided by Operating Activities, excluding merger related cash costs, was $40 million.
Net debt as of
December 31, 2020was $284 million, with total cash on hand of $62 million.
Recent STX Film Performance & Fiscal 2022 Film Strategy
Since the start of the pandemic, the Company has modified its film distribution strategy to capitalize on the increased demand for premium film content in the home, utilizing a mix of Premium Video on Demand (PVOD) and agreements with five different US streaming platforms on the five most recent STX film releases. The five film releases are: My Spy, Songbird,
This strategy has resulted in profitability on all five of these films, including
Global Debt Refinancing
The Company has engaged J.P. Morgan to lead a refinancing of its global debt. The Company’s expectation is to refinance all current debt, extend maturities and strengthen the balance sheet. The Company expects to provide a debt refinancing update shortly. Fiscal 2021 ending net debt is currently trending below the
USE OF NON-GAAP FINANCIAL MEASURES
In addition to the results prepared in accordance with generally accepted accounting principles (“GAAP”), the Company has presented other financial measures that are not defined by GAAP. The Company uses non-GAAP financial measures, among other measures, to evaluate the operating performance of our business. These non-GAAP financial measures are in addition to, not a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. These measures should not be considered in isolation and may not be comparable to similarly titled measures employed by other companies.
SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS:
Information provided in this communication includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, and such statements are subject to the safe harbors created thereby. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as “approximately,” “anticipate,” “believe,” “estimate,” “continue,” “could,” “expect,” “future,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “will” and similar expressions. Those statements include, among other things, the discussions of the Company’s business strategy and expectations concerning its and the Company’s market position, future operations, margins, profitability, liquidity and capital resources, tax assessment orders and future capital expenditures. All such forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those that we are expecting, including, without limitation: our ability to successfully and cost-effectively source film content; the Company’s ability to achieve the desired growth rate of Eros Now, its digital over-the-top (“OTT”) entertainment service; our ability to maintain or raise sufficient capital; delays, cost overruns, cancellation or abandonment of the completion or release of the Company’s films; our ability to predict the popularity of its films, or changing consumer tastes; our ability to maintain existing rights, and to acquire new rights, to film content; our ability to successfully defend any future class action lawsuits we are a party to in the
The forward-looking statements contained in this communication are based on historical performance and management’s current plans, estimates and expectations in light of information currently available and are subject to uncertainty and changes in circumstances. There can be no assurance that future developments affecting the Company will be those that it has anticipated. Actual results may differ materially from these expectations due to changes in global, regional or local political, economic, business, competitive, market, regulatory and other factors, many of which are beyond the Company’s control. Should one or more of these risks or uncertainties materialize or should any of the Company’s assumptions prove to be incorrect, the Company’s actual results may vary in material respects from what the Company may have expressed or implied by these forward-looking statements. The Company cautions that you should not place undue reliance on any of its forward-looking statements. Any forward-looking statement made by the Company in this communication speaks only as of the date on which the Company makes it. Factors or events that could cause the Company’s actual results to differ may emerge from time to time, and it is not possible for the Company to predict all of them. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by applicable securities laws.
EVP, Investor Relations & Business Development