Blooming Acorn SVOD swells RLJ Q3
| 10 November 2014
Creator, owner and distributor of media content across digital, broadcast and physical platforms, RLJ Entertainment has maintained its strong 2014 momentum in its third quarter.
For the three-month period ended 30 September 2014, the company posted revenue of $7.123 million, a 13.4% year-on-year increase, driven by increased revenue related to the release of the current season of the Foyle's War franchise, offset by a decrease in revenue in the wholesale segment. Excluding the impact of the terminated output deal, revenue increased by $7.9 million or 26.9%.
The company's wholesale segment's revenue decreased by $3 million for the quarter when comparing it to the same quarter last year, and was primarily attributable to the feature film output deal that was terminated during 2013. Excluding the impact of the terminated output deal, the revenues increased $469,000 or 2.2% for the wholesale segment during the third quarter of 2014 compared to the same period in 2013. This increase is primarily attributed to the release of two feature films, Rage and Cabin Fever, and three key British TV dramas including the Miss Marple, Midsummer Murder and Case Histories franchises.
Revenue for the three months ended 30 September 2014 from the company's direct-to-consumer segment decreased $1.3 million when compared with the three months ended 30 September 2013.
This decrease was due to lower catalogue sales of $2.3 million resulting from increased backorders that did not ship during the quarter due to limited availability of cash to replenish inventory levels. This was offset by revenue growth from the company's proprietary subscription-based video-on-demand (SVOD) channels, primarily AcornTV, which generated increased revenue of $1.1 million.
Revenue for the nine months ended 30 September 2014 decreased $7.9 million to $99,478 when compared with the same period in 2013. This decrease in revenue was also primarily due to the aforementioned decrease in the wholesale revenue, $9.0 million for the three-quarterly period.
Despite success with trimming costs over the third quarter and nine months, loss from operation in Q3 were nearly halved year-on-year to $2,448 million, and $11.302 million for the first three quarters of the 2014 financial year, a fall of more than $9 million.
Commenting on the results, Miguel Penella, chief executive officer of RLJ Entertainment, said: "The business delivered a strong performance in the third quarter ... our cost containment initiatives continue to work by delivering reductions in SG&A year over year. Additionally, our future cash flow is expected to improve by approximately $15 million through December 2015 as a result of our completed debt refinancing. The expected cash flow improvement will assist the company in addressing legacy past due payables and other operating investments that have been deferred."