EX-99.1 2 exhibit991erq2-15.htm EXHIBIT 99.1 Exhibit 99.1 ER Q2-15


Exhibit 99.1
REALNETWORKS ANNOUNCES SECOND QUARTER 2015 RESULTS
•
Launched major new product RealTimesTM, and signed up over 2 million users in first 2 months;
•
Achieved continued growth at Rhapsody, which now has over 3 million paying subscribers;
•
Announced sale of Slingo and social casino games for $18 million;
•
Reducing operating expenses and cash burn; and
•
Cash and short-term investments of $111.0 million

SEATTLE - August 5, 2015 - RealNetworks, Inc. (Nasdaq: RNWK), a leader in personal digital entertainment, today announced results for the second quarter ended June 30, 2015.
For the second quarter of 2015, revenue was $34.0 million, compared to $30.6 million in the previous quarter and $40.8 million in the second quarter of 2014.
"During the quarter, we launched RealTimesTM, a breakthrough product which provides the fastest and easiest way for consumers to get the most out of their personal photos and videos," said Rob Glaser, Chairman and CEO of RealNetworks. “RealTimes, which automatically creates personalized stories that can be easily customized and shared, is off to a great start with over 2 million users in the first 2 months.
“We are also pleased to report continued strong growth at the Rhapsody music service, in which we play a significant role and have a large ownership stake, which recently announced that it has surpassed 3 million paying subscribers.
"At the same time that we're investing in the roll out of RealTimes, we are also taking steps to focus RealNetworks on its best opportunities, generating cash from non-core assets and reducing operating expenses. Our announced sale of our Slingo and social casino games business for $18 million is a significant step in support of these objectives."
GAAP net loss for the second quarter of 2015 was $(27.8) million or $(0.77) per diluted share, compared to $(21.0) million or $(0.59) per diluted share in the second quarter of 2014. GAAP results for the second quarter of 2015 include $2.0 million severance and restructuring related to the Company's ongoing cost reduction efforts. Adjusted EBITDA for the second quarter of 2015 was a loss of $(15.2) million, compared to $(13.1) million for the second quarter of 2014. A reconciliation of GAAP operating income (loss) to adjusted EBITDA is provided in the financial tables that accompany this release.
As of June 30, 2015, the company had $111.0 million in unrestricted cash, cash equivalents and short-term investments, compared to $134.4 million as of March 31, 2015.

Business Outlook

For the third quarter of 2015, RealNetworks expects total revenue in the range of $29.0 million to $32.0 million and an adjusted EBITDA loss for the third quarter in the range of $(15.0) million to $(18.0) million, excluding the impact of the pending divestiture of the Slingo and social casino games business. Including the impact of the pending sale, we expect total revenue in the range of $27.0 million to $30.0 million and an adjusted EBITDA loss in the range of $(14.0) million to $(17.0) million.

Webcast and Conference Call Information

The company will host a conference call today to review results and discuss the company’s performance at 5 p.m. ET/2 p.m. PT. You may join the conference call by calling 888-790-3440 or +1-517-308-9350 (Passcode: Second Quarter Earnings). A live webcast of the call will be available at http://investor.realnetworks.com/ and




an on-demand webcast will be available approximately one hour following the conclusion of the conference call. A telephonic replay will be available until 11:59 p.m. PT, August 26, 2015 by calling 866-431-7918 or +1-203-369-0978 (Passcode: 852015).








For More Information

Michael Newman, StreetConnect
Investor Relations for RealNetworks
+1-206-729-3625
IR@realnetworks.com

RNWK-F


About RealNetworks

RealNetworks creates innovative applications and services that make it easy to connect with and enjoy digital media. RealNetworks invented the streaming media category in 1995 and continues to connect consumers with their digital media both directly and through partners, aiming to support every network, device, media type and social network. RealNetworks’ corporate information is located at www.realnetworks.com/about-us.

RealNetworks, RealPlayer, RealTimes and Slingo are trademarks or registered trademarks of RealNetworks, Inc. or its subsidiaries. All other companies or products listed herein are trademarks or registered trademarks of their respective owners.


About Non-GAAP Financial Measures
To supplement RealNetworks' consolidated financial information presented in accordance with GAAP in this press release, the company also discloses certain non-GAAP financial measures, including adjusted EBITDA and adjusted EBITDA by reportable segment, which management believes provide investors with useful information.
In the financial tables of our earnings press release, RealNetworks has included reconciliations of GAAP operating income (loss) to adjusted EBITDA and to adjusted EBITDA by reportable segment.
The rationale for management's use of non-GAAP measures is included in the supplementary materials presented with the quarterly earnings materials. Please refer to Exhibit 99.2 (“Information Regarding Non-GAAP Financial Measures”) to the company's report on Form 8-K, which is being submitted today to the SEC.

Forward-Looking Statements

This press release contains forward-looking statements that involve risks and uncertainties, including statements relating to RealNetworks' current expectations regarding future revenue and adjusted EBITDA (both with and without the impact of the pending games sale), our future growth, profitability, and market position, our




strategic focus and initiatives, and the growth and future prospects relating to our Rhapsody affiliate. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements. These statements reflect RealNetworks’ expectations as of today, and actual results may differ materially from the results predicted. Factors that could cause actual results to differ from the results predicted include: RealNetworks' ability to realize operating efficiencies, growth and other benefits from the implementation of its growth plan, strategic initiatives, and restructuring efforts; the emergence of new entrants and competition in the market for digital media products and services; other competitive risks, including the growth of competing technologies, products and services; the potential outcomes and effects of claims and legal proceedings on RealNetworks' business, prospects, financial condition or results of operations; risks associated with key customer or strategic relationships, business acquisitions and the introduction of new products and services; changes in consumer and advertising spending in response to disruptions in the global financial markets; fluctuations in foreign currencies; and changes in RealNetworks' effective tax rate. More information about potential risk factors that could affect RealNetworks' business and financial results is included in RealNetworks' annual report on Form 10-K for the most recent year ended December 31, its quarterly reports on Form 10-Q and in other reports and documents filed by RealNetworks from time to time with the Securities and Exchange Commission. The preparation of RealNetworks' financial statements and forward-looking financial guidance requires the company to make estimates and assumptions that affect the reported amount of assets and liabilities, and revenues and expenses during the reported period.  Actual results may differ materially from these estimates under different assumptions or conditions. The company assumes no obligation to update any forward-looking statements or information, which are in effect as of their respective dates.









RealNetworks, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)

 
 
Quarters Ended
June 30,
 
Six Months Ended
June 30,
 
 
 

 
2015
 
2014
 
2015
 
2014
 
 
 (in thousands, except per share data)
 
 
 
 
 
 
 
 
 
 Net revenue
 
$
33,954

 
$
40,825

 
$
64,551

 
$
86,549

 Cost of revenue
 
19,832

 
20,786

 
36,379

 
39,572

 Extinguishment of liability
 
—

 
—

 
—

 
(10,580
)
           Gross profit
 
14,122

 
20,039

 
28,172

 
57,557

 
 
 
 
 
 
 
 
 
 Operating expenses:
 
 
 


 

 

       Research and development
 
11,801

 
13,267

 
24,180

 
27,326

       Sales and marketing
 
14,047

 
16,016

 
26,884

 
37,739

       General and administrative
 
7,008

 
8,577

 
14,291

 
17,894

       Restructuring and other charges
 
1,964

 
541

 
2,449

 
1,757

       Lease exit and related charges
 
9

 
470

 
87

 
549

 
 
 
 
 
 
 
 
 
           Total operating expenses
 
34,829

 
38,871

 
67,891

 
85,265

 
 
 
 
 
 
 
 
 
 Operating income (loss)
 
(20,707
)
 
(18,832
)
 
(39,719
)
 
(27,708
)
 
 
 
 
 
 
 
 
 
 Other income (expenses):
 
 
 
 
 
 
 
 
       Interest income, net
 
250

 
180

 
450

 
316

       Gain (loss) on sale of available for sale securities, net
 
94

 
—

 
393

 
2,371

       Equity in net loss of Rhapsody
 
(6,916
)
 
(1,802
)
 
(13,096
)
 
(2,640
)
       Other income (expense), net
 
(112
)
 
(95
)
 
331

 
(172
)
 
 
 
 
 
 
 
 
 
           Total other income (expense), net
 
(6,684
)
 
(1,717
)
 
(11,922
)
 
(125
)
 
 
 
 
 
 
 
 
 
 Income (loss) before income taxes
 
(27,391
)
 
(20,549
)
 
(51,641
)
 
(27,833
)
 Income tax expense (benefit)
 
390

 
480

 
609

 
966

 
 
 
 
 
 
 
 
 
 Net income (loss)
 
$
(27,781
)
 
$
(21,029
)
 
$
(52,250
)
 
$
(28,799
)
 
 
 
 
 
 
 
 
 
 Basic net income (loss) per share
 
$
(0.77
)
 
$
(0.59
)
 
$
(1.45
)
 
$
(0.80
)
 Diluted net income (loss) per share
 
$
(0.77
)
 
$
(0.59
)
 
$
(1.45
)
 
$
(0.80
)
 
 
 
 
 
 
 
 
 
 Shares used to compute basic net income (loss) per share
 
36,106

 
35,890

 
36,105

 
35,865

 Shares used to compute diluted net income (loss) per share
 
36,106

 
35,890

 
36,105

 
35,865

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 





RealNetworks, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(Unaudited)
 
June 30,
2015
 
December 31,
2014
 
 (in thousands)
ASSETS
 Current assets:
 
 
 
 Cash and cash equivalents
$
92,663

 
$
103,253

 Short-term investments
18,337

 
58,453

 Trade accounts receivable, net
21,922

 
15,257

 Deferred costs, current portion
305

 
702

 Deferred tax assets, current
645

 
652

 Prepaid expenses and other current assets
9,108

 
8,980

 Total current assets
142,980

 
187,297

 
 
 
 
Equipment, software, and leasehold improvements, at cost:
 
 
 
 Equipment and software
71,552

 
74,100

 Leasehold improvements
3,737

 
3,590

 Total equipment, software, and leasehold improvements
75,289

 
77,690

 Less accumulated depreciation and amortization
61,886

 
61,442

 Net equipment, software, and leasehold improvements
13,403

 
16,248

 
 
 
 
 Restricted cash equivalents and investments
3,000

 
3,000

 Investment in and advances to Rhapsody
5,121

 
10,000

 Available for sale securities
2,394

 
2,676

 Other assets
3,187

 
2,299

 Deferred costs, non-current portion
204

 
316

 Deferred tax assets, net, non-current portion
916

 
999

 Other intangible assets, net
9,181

 
10,109

 Goodwill
17,001

 
17,355

 
 
 
 
 Total assets
$
197,387

 
$
250,299

 
 
 
 
 LIABILITIES AND SHAREHOLDERS' EQUITY
 
 
 
 
 Current liabilities:
 
 
 
 Accounts payable
$
18,241

 
$
18,653

 Accrued and other current liabilities
22,803

 
25,286

 Deferred tax liabilities, net, current portion
1,580

 
1,628

 Deferred revenue, current portion
3,637

 
5,301

 Total current liabilities
46,261

 
50,868

 
 
 
 
 Deferred revenue, non-current portion
124

 
235

 Deferred rent
1,240

 
1,215

 Deferred tax liabilities, net, non-current portion
693

 
702

 Other long-term liabilities
458

 
81

 
 
 
 
 Total liabilities
48,776

 
53,101

 
 
 
 
 
 
 
 
 Shareholders' equity
148,611

 
197,198

 
 
 
 
 Total liabilities and shareholders' equity
$
197,387

 
$
250,299







RealNetworks, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
 
Six Months Ended
June 30,
 
2015
 
2014
 
 (in thousands)
 
 Cash flows from operating activities:
 
 
 
 Net income (loss)
$
(52,250
)
 
$
(28,799
)
 Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization
4,894

 
6,145

Stock-based compensation
2,583

 
3,010

Extinguishment of liability
—

 
(10,580
)
Equity in net loss of Rhapsody
13,096

 
2,640

Deferred income taxes, net
(23
)
 
10

Gain on sale of available for sale securities
(393
)
 
(2,371
)
Realized translation gain
—

 
(48
)
Fair value of warrants, net of mark to market adjustments
(1,128
)
 
—

Interest receivable on advance to Rhapsody
(121
)
 
—

 Net change in certain operating assets and liabilities
(10,230
)
 
(785
)
  Net cash provided by (used in) operating activities
(43,572
)
 
(30,778
)
 Cash flows from investing activities:
 
 
 
Purchases of equipment, software, and leasehold improvements
(859
)
 
(1,689
)
Proceeds from sale of available for sale securities
459

 
2,754

Purchases of short-term investments
(8,514
)
 
(48,326
)
Proceeds from sales and maturities of short-term investments
48,630

 
52,663

Acquisitions, net of cash acquired
(161
)
 
(733
)
Advance to Rhapsody
(5,000
)
 
—

Other
—

 
(467
)
 Net cash provided by (used in) investing activities
34,555

 
4,202

 Cash flows from financing activities:
 
 
 
Proceeds from issuance of common stock (stock options and stock purchase plan)
276

 
580

Tax payments from shares withheld upon vesting of restricted stock
(10
)
 
(307
)
Payment of contingent consideration
—

 
(696
)
 Net cash provided by (used in) financing activities
266

 
(423
)
 Effect of exchange rate changes on cash and cash equivalents
(1,839
)
 
214

 Net increase (decrease) in cash and cash equivalents
(10,590
)
 
(26,785
)
 Cash and cash equivalents, beginning of period
103,253

 
151,235

 Cash and cash equivalents, end of period
$
92,663

 
$
124,450










RealNetworks, Inc. and Subsidiaries
Supplemental Financial Information
(Unaudited)
 
 
2015
 
2014
 
 
 Q2
 
Q1
 
 Q4
 
 Q3
 
 Q2
 
 Q1
 
 
 (in thousands)
Net Revenue by Line of Business
 
 
 
 
 
 
 
 
 
 
 
RealPlayer Group (A)
 
$
7,344

 
$
8,013

 
$
8,865

 
$
6,565

 
$
8,556

 
$
15,215

Mobile Entertainment (B)
 
18,515

 
14,480

 
17,616

 
19,190

 
23,182

 
19,913

Games (C)
 
8,095

 
8,104

 
9,025

 
8,402

 
9,087

 
10,596

     Total net revenue
 
$
33,954

 
$
30,597

 
$
35,506

 
$
34,157

 
$
40,825

 
$
45,724

 
 
 
 
 
 
 
 
 
 
 
 
 
Net Revenue by Product
 
 
 
 
 
 
 
 
 
 
 
 
RealPlayer Group
 
 
 
 
 
 
 
 
 
 
 
 
- License (D)
 
$
4,208

 
$
4,672

 
$
4,496

 
$
3,255

 
$
3,273

 
$
5,018

- Subscriptions (E)
 
2,435

 
2,408

 
2,691

 
2,680

 
2,569

 
2,777

- Media Properties (F)
 
701

 
933

 
1,678

 
630

 
2,714

 
7,420

 
 
 
 
 
 
 
 
 
 
 
 
 
Mobile Entertainment
 
 
 
 
 
 
 
 
 
 
 
 
- SaaS (G)
 
18,155

 
13,298

 
16,727

 
17,919

 
20,175

 
18,463

- Technology License & Other (H)
 
360

 
1,182

 
889

 
1,271

 
3,007

 
1,450

 
 
 
 
 
 
 
 
 
 
 
 
 
Games
 
 
 
 
 
 
 
 
 
 
 
 
- License (I)
 
3,943

 
3,835

 
3,854

 
2,988

 
3,399

 
3,849

- Subscriptions (J)
 
3,373

 
3,570

 
3,947

 
4,320

 
4,440

 
5,241

- Media Properties (K)
 
779

 
699

 
1,224

 
1,094

 
1,248

 
1,506

 
 
 
 
 
 
 
 
 
 
 
 
 
     Total net revenue
 
$
33,954

 
$
30,597

 
$
35,506

 
$
34,157

 
$
40,825

 
$
45,724

 
 
 
 
 
 
 
 
 
 
 
 
 
Net Revenue by Geography
 
 
 
 
 
 
 
 
 
 
 
 
United States
 
$
12,303

 
$
12,349

 
$
13,860

 
$
12,280

 
$
15,092

 
$
20,428

Rest of world
 
21,651

 
18,248

 
21,646

 
21,877

 
25,733

 
25,296

     Total net revenue
 
$
33,954

 
$
30,597

 
$
35,506

 
$
34,157

 
$
40,825

 
$
45,724

 
 
 
 
 
 
 
 
 
 
 
 
 
Net Revenue by Line of Business
 
 
 
 
 
 
 
 
 
 
 
(A) The RealPlayer Group primarily includes revenue from RealPlayer and related products, such as the distribution of third-party software products, advertising on RealPlayer websites, and sales of RealPlayer Plus software licenses to consumers, sales of intellectual property licenses, and consumer subscriptions such as RealPlayer Cloud, RealTimesTM, and SuperPass.
(B) The Mobile Entertainment division primarily includes revenue from SaaS services and sales of professional services provided to mobile carriers.
(C) The Games division primarily includes revenue from sales of games licenses, online games subscription services, advertising on games sites and social network sites, microtransactions from online and social games, and sales of mobile games.
Net Revenue by Product
 
 
 
 
 
 
 
 
 
 
 
 
(D) Licensing revenue within the RealPlayer Group includes sales of intellectual property licenses and RealPlayer Plus software licenses to consumers.
(E) Subscriptions revenue within the RealPlayer Group includes revenue from subscriptions such as our RealPlayer Cloud, RealTimes and SuperPass offerings.
(F) Media Properties revenue within the RealPlayer Group includes distribution of third-party software products and advertising on RealPlayer websites.
(G) SaaS revenue within Mobile Entertainment includes revenue from music on demand, ringback tones, intercarrier messaging services provided to network services providers who are largely mobile phone networks.
(H) Technology licensing and other revenue within Mobile Entertainment includes revenue from professional services provided to mobile carriers.
(I) Licensing revenue within Games includes retail games-related revenue and sales of mobile games.
(J) Subscriptions revenue within Games includes revenue from online games subscriptions as well as microtransactions from mobile and social games.
(K) Media Properties revenue within Games includes distribution of third-party software products and advertising on games sites and social network sites.




RealNetworks, Inc. and Subsidiaries
Segment Results of Operations
(Unaudited)
 
 
2015
 
2014
 
2015
 
2014
 
 
Q2
 
Q1
 
Q2
 
YTD
 
YTD
 
 
 (in thousands)
RealPlayer Group
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net revenue
 
$
7,344

 
$
8,013

 
$
8,556

 
$
15,357

 
$
23,771

Cost of revenue
 
4,317

 
4,112

 
3,620

 
8,429

 
7,138

Gross profit
 
3,027

 
3,901

 
4,936

 
6,928

 
16,633

 
 
 
 
 
 
 
 
 
 
 
   Gross margin
 
41
%
 
49
%
 
58
%
 
45
%
 
70
%
 
 
 
 
 
 
 
 
 
 
 
Operating expenses
 
13,001

 
12,375

 
12,489

 
25,376

 
30,276

Operating income (loss)
 
$
(9,974
)
 
$
(8,474
)
 
$
(7,553
)
 
$
(18,448
)
 
$
(13,643
)
 
 
 
 
 
 
 
 
 
 
 
  Adjusted EBITDA
 
$
(9,411
)
 
$
(7,875
)
 
$
(6,893
)
 
$
(17,286
)
 
$
(12,384
)
 
 
 
 
 
 
 
 
 
 
 
Mobile Entertainment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net revenue
 
$
18,515

 
$
14,480

 
$
23,182

 
$
32,995

 
$
43,095

Cost of revenue
 
13,079

 
9,506

 
14,298

 
22,585

 
26,248

Gross profit
 
5,436

 
4,974

 
8,884

 
10,410

 
16,847

 
 
 
 
 
 
 
 
 
 
 
   Gross margin
 
29
%
 
34
%
 
38
%
 
32
%
 
39
%
 
 
 
 
 
 
 
 
 
 
 
Operating expenses
 
5,301

 
5,633

 
9,424

 
10,934

 
19,040

Operating income (loss)
 
$
135

 
$
(659
)
 
$
(540
)
 
$
(524
)
 
$
(2,193
)
 
 
 
 
 
 
 
 
 
 
 
  Adjusted EBITDA
 
$
1,013

 
$
225

 
$
808

 
$
1,238

 
$
469

 
 
 
 
 
 
 
 
 
 
 
Games
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net revenue
 
$
8,095

 
$
8,104

 
$
9,087

 
$
16,199

 
$
19,683

Cost of revenue
 
2,286

 
2,794

 
2,717

 
5,080

 
5,846

Gross profit
 
5,809

 
5,310

 
6,370

 
11,119

 
13,837

 
 
 
 
 
 
 
 
 
 
 
   Gross margin
 
72
%
 
66
%
 
70
%
 
69
%
 
70
%
 
 
 
 
 
 
 
 
 
 
 
Operating expenses
 
8,719

 
8,683

 
8,769

 
17,402

 
18,535

Operating income (loss)
 
$
(2,910
)
 
$
(3,373
)
 
$
(2,399
)
 
$
(6,283
)
 
$
(4,698
)
 
 
 
 
 
 
 
 
 
 
 
   Adjusted EBITDA
 
$
(2,354
)
 
$
(2,783
)
 
$
(1,798
)
 
$
(5,137
)
 
$
(3,472
)
 
 
 
 
 
 
 
 
 
 
 
Corporate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net revenue
 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

Cost of revenue
 
150

 
135

 
151

 
285

 
340

Extinguishment of liability
 
—

 
—

 
—

 
—

 
(10,580
)
Gross profit
 
(150
)
 
(135
)
 
(151
)
 
(285
)
 
(10,240
)
 
 
 
 
 
 
 
 
 
 
 
   Gross margin
 
N/A

 
N/A

 
 N/A

 
N/A

 
N/A

 
 
 
 
 
 
 
 
 
 
 
Operating expenses
 
7,808

 
6,371

 
8,189

 
14,179

 
17,414

Operating income (loss)
 
$
(7,958
)
 
$
(6,506
)
 
$
(8,340
)
 
$
(14,464
)
 
$
7,174

 
 
 
 
 
 
 
 
 
 
 
   Adjusted EBITDA
 
$
(4,449
)
 
$
(3,741
)
 
$
(5,198
)
 
$
(8,190
)
 
$
(11,612
)
 
 
 
 
 
 
 
 
 
 
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net revenue
 
$
33,954

 
$
30,597

 
$
40,825

 
$
64,551

 
$
86,549

Cost of revenue
 
19,832

 
16,547

 
20,786

 
36,379

 
39,572

Extinguishment of liability
 
—

 
—

 
—

 
—

 
(10,580
)
Gross profit
 
14,122

 
14,050

 
20,039

 
28,172

 
57,557

 
 
 
 
 
 
 
 
 
 
 
   Gross margin
 
42
%
 
46
%
 
49
%
 
44
%
 
67
%
 
 
 
 
 
 
 
 
 
 
 
Operating expenses
 
34,829

 
33,062

 
38,871

 
67,891

 
85,265

Operating income (loss)
 
$
(20,707
)
 
$
(19,012
)
 
$
(18,832
)
 
$
(39,719
)
 
$
(27,708
)
 
 
 
 
 
 
 
 
 
 
 
   Adjusted EBITDA
 
$
(15,201
)
 
$
(14,174
)
 
$
(13,081
)
 
$
(29,375
)
 
$
(26,999
)











RealNetworks, Inc. and Subsidiaries
Reconciliation of segment GAAP operating income (loss) to adjusted EBITDA by segment
(Unaudited)
 
 
2015
 
2014
2015
 
2014
 
 
 Q2
 
 Q1
 
 Q2
 
 YTD
 
 YTD
 
 
 (in thousands)
RealPlayer Group
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reconciliation of segment GAAP operating income (loss) to adjusted EBITDA by segment:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating income (loss)
 
$
(9,974
)
 
$
(8,474
)
 
$
(7,553
)
 
$
(18,448
)
 
$
(13,643
)
Acquisitions related intangible asset amortization
 
85

 
88

 
125

 
173

 
185

Depreciation and amortization
 
478

 
511

 
535

 
989

 
1,074

   Adjusted EBITDA
 
$
(9,411
)

$
(7,875
)
 
$
(6,893
)
 
$
(17,286
)
 
$
(12,384
)
 
 
 
 
 
 
 
 
 
 
 
Mobile Entertainment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reconciliation of segment GAAP operating income (loss) to adjusted EBITDA by segment:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating income (loss)
 
$
135

 
$
(659
)
 
$
(540
)
 
$
(524
)
 
$
(2,193
)
Acquisitions related intangible asset amortization
 
299

 
304

 
628

 
603

 
1,235

Depreciation and amortization
 
579

 
580

 
720

 
1,159

 
1,427

   Adjusted EBITDA
 
$
1,013


$
225

 
$
808

 
$
1,238

 
$
469

 
 
 
 
 
 
 
 
 
 
 
Games
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reconciliation of segment GAAP operating income (loss) to adjusted EBITDA by segment:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating income (loss)
 
$
(2,910
)
 
$
(3,373
)
 
$
(2,399
)
 
$
(6,283
)
 
$
(4,698
)
Acquisitions related intangible asset amortization
 
312

 
293

 
314

 
605

 
628

Depreciation and amortization
 
244

 
297

 
287

 
541

 
598

   Adjusted EBITDA
 
$
(2,354
)

$
(2,783
)
 
$
(1,798
)
 
$
(5,137
)
 
$
(3,472
)
 
 
 
 
 
 
 
 
 
 
 
Corporate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reconciliation of segment GAAP operating income (loss) to adjusted EBITDA by segment:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating income (loss)
 
$
(7,958
)
 
$
(6,506
)
 
$
(8,340
)
 
$
(14,464
)
 
$
(7,174
)
Other income (expense), net
 
(112
)
 
443

 
(95
)
 
331

 
(172
)
Depreciation and amortization
 
394

 
430

 
553

 
824

 
998

Lease exit and related charges
 
9

 
78

 
470

 
87

 
549

Restructuring and other charges
 
1,964

 
485

 
541

 
2,449

 
1,757

Stock-based compensation
 
1,254

 
1,329

 
1,673

 
2,583

 
3,010

Extinguishment of liability
 
—

 
—

 
—

 
—

 
(10,580
)
   Adjusted EBITDA
 
$
(4,449
)

$
(3,741
)
 
$
(5,198
)
 
$
(8,190
)
 
$
(11,612
)
 
 
 
 
 
 
 
 
 
 
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reconciliation of GAAP operating income (loss) to adjusted EBITDA:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating income (loss)
 
$
(20,707
)
 
$
(19,012
)
 
$
(18,832
)
 
$
(39,719
)
 
$
(27,708
)
Other income (expense), net
 
(112
)
 
443

 
(95
)
 
331

 
(172
)
Acquisitions related intangible asset amortization
 
696

 
685

 
1,067

 
1,381

 
2,048

Depreciation and amortization
 
1,695

 
1,818

 
2,095

 
3,513

 
4,097

Lease exit and related charges
 
9

 
78

 
470

 
87

 
549

Restructuring and other charges
 
1,964

 
485

 
541

 
2,449

 
1,757

Stock-based compensation
 
1,254

 
1,329

 
1,673

 
2,583

 
3,010

Extinguishment of liability
 
—

 
—

 
—

 
—

 
(10,580
)
   Adjusted EBITDA
 
$
(15,201
)

$
(14,174
)
 
$
(13,081
)
 
$
(29,375
)
 
$
(26,999
)