001-35675
(Commission File Number)
|
45-4950432
(IRS Employer Identification Number)
|
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. | Results of Operations and Financial Condition. |
Item 9.01. | Financial Statements and Exhibits. |
(d) | Exhibits. |
99.1 | Press Release issued by RLJ Entertainment, Inc. on November 7, 2013. |
|
RLJ ENTERTAINMENT, INC.
|
|
|
|
|
|
|
Date: November 7, 2013
|
By:
|
/s/ ANDREW S. WILSON
|
|
|
Name: Andrew S. Wilson
|
|
|
|
Title: Chief Financial Officer
|
|
Exhibit No.
|
|
Document Description
|
|
Press Release issued by RLJ Entertainment, Inc. on November 7, 2013.
|
|
Successor
|
|||||||
(In thousands, except share data)
|
September 30,
|
December 31,
|
||||||
|
2013
|
2012
|
||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
2,630
|
$
|
4,739
|
||||
Accounts receivable, net
|
12,148
|
20,484
|
||||||
Inventories, net
|
16,718
|
23,029
|
||||||
Investments in content, net
|
36,600
|
30,981
|
||||||
Prepaid expenses and other assets
|
3,097
|
1,938
|
||||||
Total current assets
|
71,193
|
81,171
|
||||||
Noncurrent portion of accounts receivable
|
3,250
|
4,127
|
||||||
Noncurrent portion of investments in content
|
46,441
|
58,816
|
||||||
Property, equipment and improvements, net
|
1,576
|
1,800
|
||||||
Equity investment in affiliates
|
24,269
|
25,449
|
||||||
Other intangible assets
|
20,144
|
23,883
|
||||||
Goodwill
|
47,066
|
47,382
|
||||||
Total assets
|
$
|
213,939
|
$
|
242,628
|
||||
LIABILITIES AND EQUITY
|
||||||||
Current liabilities:
|
||||||||
Accounts payable and accrued liabilities
|
$
|
23,322
|
$
|
30,590
|
||||
Accrued royalties and distribution fees
|
38,491
|
32,658
|
||||||
Deferred revenue
|
5,747
|
4,339
|
||||||
Current portion of long term debt
|
15,040
|
4,000
|
||||||
Total current liabilities
|
82,600
|
71,587
|
||||||
Long term portion of debt, less debt discount
|
63,858
|
78,323
|
||||||
Deferred tax liability
|
350
|
350
|
||||||
Stock warrant liability
|
7,406
|
4,324
|
||||||
Total liabilities
|
154,214
|
154,584
|
||||||
Equity:
|
||||||||
Common stock, $0.001 par value, 250 million shares authorized, 13,700,862 and 13,377,546 shares issued and outstanding at September 30, 2013 and December 31, 2012, respectively
|
13
|
13
|
||||||
Additional paid-in capital
|
86,596
|
86,133
|
||||||
Retained earnings (deficit)
|
(27,267
|
)
|
1,743
|
|||||
Accumulated other comprehensive gain
|
383
|
155
|
||||||
Total equity
|
59,725
|
88,044
|
||||||
Total liabilities and equity
|
$
|
213,939
|
$
|
242,628
|
|
Successor
|
Predecessor
|
||||||||||||||
(In thousands, except per share data)
|
Three Months
Ended
|
Nine Months
Ended
|
Three Months
Ended
|
Nine Months
Ended
|
||||||||||||
|
September 30,
|
September 30,
|
September 30,
|
September 30,
|
||||||||||||
|
2013
|
2013
|
2012
|
2012
|
||||||||||||
|
||||||||||||||||
Revenue
|
$
|
32,741
|
$
|
107,333
|
$
|
20,568
|
$
|
57,447
|
||||||||
Cost of sales
|
24,747
|
88,627
|
12,149
|
31,633
|
||||||||||||
Gross profit
|
7,994
|
18,706
|
8,419
|
25,814
|
||||||||||||
|
||||||||||||||||
Selling expenses
|
6,397
|
18,046
|
4,388
|
11,063
|
||||||||||||
General and administrative expenses
|
4,560
|
16,827
|
4,955
|
14,607
|
||||||||||||
Depreciation and amortization
|
1,388
|
4,308
|
137
|
398
|
||||||||||||
Total selling, general and administrative expenses
|
12,345
|
39,181
|
9,480
|
26,068
|
||||||||||||
LOSS FROM OPERATIONS
|
(4,351
|
)
|
(20,475
|
)
|
(1,061
|
)
|
(254
|
)
|
||||||||
|
||||||||||||||||
Equity earnings of affiliates
|
1,364
|
2,924
|
462
|
983
|
||||||||||||
Interest expense, net
|
(2,019
|
)
|
(6,027
|
)
|
(261
|
)
|
(838
|
)
|
||||||||
Other income (expense)
|
(2,832
|
)
|
(3,751
|
)
|
501
|
118
|
||||||||||
Total other income (expense)
|
(3,487
|
)
|
(6,854
|
)
|
702
|
263
|
||||||||||
INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES
|
(7,838
|
)
|
(27,329
|
)
|
(359
|
)
|
9
|
|||||||||
Provision for income taxes
|
670
|
1,681
|
123
|
203
|
||||||||||||
NET LOSS
|
(8,508
|
)
|
(29,010
|
)
|
(482
|
)
|
(194
|
)
|
||||||||
Less (net income) loss attributable to noncontrolling interests
|
—
|
—
|
13
|
(43
|
)
|
|||||||||||
NET LOSS APPLICABLE TO COMMON SHAREHOLDERS
|
$
|
(8,508
|
)
|
$
|
(29,010
|
)
|
$
|
(469
|
)
|
$
|
(237
|
)
|
||||
Net loss per common share:
|
||||||||||||||||
|
||||||||||||||||
Unrestricted common stock:
|
||||||||||||||||
Basic and diluted
|
$
|
(0.62
|
)
|
$
|
(2.15
|
)
|
$
|
(0.46
|
)
|
$
|
(0.23
|
)
|
||||
Restricted common stock:
|
||||||||||||||||
Basic and diluted
|
$
|
(0.62
|
)
|
$
|
(2.15
|
)
|
$
|
—
|
$
|
—
|
||||||
|
||||||||||||||||
Unrestricted weighted average shares outstanding:
|
||||||||||||||||
Basic and diluted
|
13,340
|
13,340
|
1,023
|
1,023
|
||||||||||||
Restricted weighted average shares outstanding:
|
||||||||||||||||
Basic and diluted
|
292
|
127
|
—
|
—
|
|
Successor
|
Predecessor
|
||||||||||||||
(In thousands)
|
Three Months
Ended
|
Nine Months
Ended
|
Three Months
Ended
|
Nine Months
Ended
|
||||||||||||
|
September 30,
|
September 30,
|
September 30,
|
September 30,
|
||||||||||||
|
2013
|
2013
|
2012
|
2012
|
||||||||||||
|
||||||||||||||||
NET LOSS:
|
||||||||||||||||
Net loss
|
$
|
(8,508
|
)
|
$
|
(29,010
|
)
|
$
|
(482
|
)
|
$
|
(194
|
)
|
||||
Other comprehensive income (loss):
|
||||||||||||||||
Foreign currency translation gain
|
803
|
228
|
151
|
295
|
||||||||||||
Total comprehensive income (loss)
|
(7,705
|
)
|
(28,782
|
)
|
(331
|
)
|
101
|
|||||||||
Less: comprehensive income (loss) attributable to noncontrolling interests:
|
||||||||||||||||
Share of net income (loss)
|
—
|
—
|
(13
|
)
|
43
|
|||||||||||
Share of foreign currency translation gain
|
—
|
—
|
42
|
37
|
||||||||||||
Comprehensive income attributable to noncontrolling interest
|
—
|
—
|
29
|
80
|
||||||||||||
Comprehensive income (loss) attributable to common shareholders
|
$
|
(7,705
|
)
|
$
|
(28,782
|
)
|
$
|
(360
|
)
|
$
|
21
|
|
Common Stock
|
|||||||||||||||||||||||||||||||||||
(In thousands)
|
Shares
|
Par Value
|
Additional Paid-in Capital
|
Stockholder Notes Receivable
|
Retained Earnings (Deficit)
|
Accumulated Other Comprehensive Gain
|
Treasury Stock
|
Non-controlling Interests
|
Total Equity
|
|||||||||||||||||||||||||||
Balance at January 1, 2013
|
13,378
|
$
|
13
|
$
|
86,133
|
$
|
—
|
$
|
1,743
|
$
|
155
|
$
|
—
|
$
|
—
|
$
|
88,044
|
|||||||||||||||||||
Issuance of restricted common stock for services
|
323
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||||||||||||||||
Stock-based compensation
|
—
|
—
|
463
|
—
|
—
|
—
|
—
|
—
|
463
|
|||||||||||||||||||||||||||
Foreign currency translation
|
—
|
—
|
—
|
—
|
—
|
228
|
—
|
—
|
228
|
|||||||||||||||||||||||||||
Net loss
|
—
|
—
|
—
|
—
|
(29,010
|
)
|
—
|
—
|
—
|
(29,010
|
)
|
|||||||||||||||||||||||||
Balance at September 30, 2013
|
13,701
|
$
|
13
|
$
|
86,596
|
$
|
—
|
$
|
(27,267
|
)
|
$
|
383
|
$
|
—
|
$
|
—
|
$
|
59,725
|
|
Common Stock
|
|||||||||||||||||||||||||||||||||||
(In thousands)
|
Shares
|
Par Value
|
Additional Paid-in Capital
|
Stockholder Notes Receivable
|
Retained Earnings
|
Accumulated Other Comprehensive Loss
|
Treasury Stock
|
Non-controlling Interests
|
Total Equity
|
|||||||||||||||||||||||||||
Balance at January 1, 2012
|
1,023
|
$
|
10
|
$
|
4,451
|
$
|
(684
|
)
|
$
|
26,295
|
$
|
(421
|
)
|
$
|
(583
|
)
|
$
|
759
|
$
|
29,827
|
||||||||||||||||
Stock-based compensation
|
—
|
—
|
373
|
—
|
—
|
—
|
—
|
—
|
373
|
|||||||||||||||||||||||||||
Foreign currency translation
|
—
|
—
|
—
|
—
|
—
|
258
|
—
|
37
|
295
|
|||||||||||||||||||||||||||
Net income
|
—
|
—
|
—
|
—
|
(237
|
)
|
—
|
—
|
43
|
(194
|
)
|
|||||||||||||||||||||||||
Stockholders’ Distributions
|
—
|
—
|
—
|
—
|
(4,879
|
)
|
—
|
—
|
(265
|
)
|
(5,144
|
)
|
||||||||||||||||||||||||
Balance at September 30, 2012
|
1,023
|
$
|
10
|
$
|
4,834
|
$
|
(684
|
)
|
$
|
21,179
|
$
|
(163
|
)
|
$
|
(583
|
)
|
$
|
574
|
$
|
25,157
|
(In thousands)
|
Successor
|
Predecessor
|
||||||
|
2013
|
2012
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net loss
|
$
|
(29,010
|
)
|
$
|
(194
|
)
|
||
Adjustments to reconcile net loss to net cash:
|
||||||||
Equity earnings in affiliates
|
(2,924
|
)
|
(983
|
)
|
||||
Amortization of content, including impairments
|
50,535
|
11,412
|
||||||
Depreciation and amortization
|
510
|
339
|
||||||
Amortization of intangible assets
|
3,798
|
59
|
||||||
Foreign currency exchange loss/(gain)
|
706
|
(310
|
)
|
|||||
Fair value adjustment of stock warrant liability
|
3,082
|
—
|
||||||
Noncash interest expense
|
750
|
—
|
||||||
Stock-based compensation expense
|
463
|
373
|
||||||
Changes in assets and liabilities:
|
||||||||
Accounts receivable, net
|
9,151
|
3,487
|
||||||
Inventories, net
|
6,308
|
(244
|
)
|
|||||
Investment in content, net
|
(38,276
|
)
|
(18,935
|
)
|
||||
Prepaid expenses and other assets
|
(361
|
)
|
(1,137
|
)
|
||||
Accounts payable and accrued liabilities
|
(7,617
|
)
|
877
|
|||||
Deferred revenue
|
1,403
|
—
|
||||||
Net cash used in operating activities
|
(1,482
|
)
|
(5,256
|
)
|
||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Capital expenditures
|
(350
|
)
|
(505
|
)
|
||||
Acquisition of affiliate
|
—
|
(21,871
|
)
|
|||||
Dividends received from affiliate
|
4,005
|
2,682
|
||||||
Net cash provided by (used in) investing activities
|
3,655
|
(19,694
|
)
|
|||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Borrowings under revolving credit facility
|
10,398
|
6,167
|
||||||
Repayments of borrowings under revolving credit facility
|
(3,000
|
)
|
—
|
|||||
Proceeds from debt
|
191
|
27,511
|
||||||
Repayment of debt
|
(11,452
|
)
|
(3,502
|
)
|
||||
Distributions to stockholders
|
—
|
(5,144
|
)
|
|||||
Net cash provided by (used in) financing activities
|
(3,863
|
)
|
25,032
|
|||||
Effect of exchange rate changes on cash
|
(419
|
)
|
(198
|
)
|
||||
NET DECREASE IN CASH:
|
(2,109
|
)
|
(116
|
)
|
||||
Cash at beginning of period
|
4,739
|
1,625
|
||||||
Cash at end of period
|
$
|
2,630
|
$
|
1,509
|
||||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
|
||||||||
Cash paid during the period for:
|
||||||||
Interest
|
$
|
4,183
|
$
|
659
|
||||
Income taxes
|
$
|
539
|
$
|
727
|
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
||||||||||||||
(In thousands)
|
2013
|
2012
|
2013
|
2012
|
||||||||||||
|
Actual
|
Proforma (1)
|
Actual
|
Proforma (1)
|
||||||||||||
Revenues
|
$
|
32,741
|
$
|
39,152
|
$
|
107,333
|
$
|
121,161
|
||||||||
Costs of sales
|
24,747
|
27,007
|
88,627
|
85,206
|
||||||||||||
Gross profit
|
7,994
|
12,145
|
18,706
|
35,955
|
||||||||||||
Selling, general and administrative expenses
|
12,345
|
16,202
|
39,181
|
45,961
|
||||||||||||
Loss from operations
|
(4,351
|
)
|
(4,057
|
)
|
(20,475
|
)
|
(10,006
|
)
|
||||||||
Equity earnings of affiliates
|
1,364
|
294
|
2,924
|
1,318
|
||||||||||||
Interest expense, net
|
(2,019
|
)
|
(1,938
|
)
|
(6,027
|
)
|
(5,814
|
)
|
||||||||
Other income (expense)
|
(2,832
|
)
|
675
|
(3,751
|
)
|
2,450
|
||||||||||
Provision for income taxes
|
(670
|
)
|
(123
|
)
|
(1,681
|
)
|
(46
|
)
|
||||||||
Net loss
|
$
|
(8,508
|
)
|
$
|
(5,149
|
)
|
$
|
(29,010
|
)
|
$
|
(12,098
|
)
|
||||
|
||||||||||||||||
Adjusted EBITDA
|
$
|
3,717
|
$
|
(4,547
|
)
|
$
|
1,179
|
$
|
6,503
|
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
||||||||||||||
(In thousands)
|
2013
|
2012
|
2013
|
2012
|
||||||||||||
|
Actual
|
Proforma
|
Actual
|
Proforma
|
||||||||||||
|
||||||||||||||||
Net loss
|
$
|
(8,508
|
)
|
$
|
(5,149
|
)
|
$
|
(29,010
|
)
|
$
|
(12,098
|
)
|
||||
|
||||||||||||||||
Amortization of content
|
13,947
|
15,513
|
50,535
|
49,508
|
||||||||||||
Cash investment in content
|
(10,346
|
)
|
(21,756
|
)
|
(38,276
|
)
|
(50,163
|
)
|
||||||||
Depreciation and amortization
|
1,388
|
1,413
|
4,308
|
4,246
|
||||||||||||
Interest expense
|
2,019
|
1,938
|
6,027
|
5,814
|
||||||||||||
Provision for income tax
|
670
|
123
|
1,681
|
46
|
||||||||||||
Transactions costs and severance
|
351
|
2,901
|
2,369
|
7,786
|
||||||||||||
Warrant liability fair value adjustment
|
3,884
|
—
|
3,082
|
—
|
||||||||||||
Stock-based compensation
|
312
|
470
|
463
|
1,364
|
||||||||||||
Adjusted EBITDA
|
$
|
3,717
|
$
|
(4,547
|
)
|
$
|
1,179
|
$
|
6,503
|