RLJ Entertainment, Inc. (NASDAQ: RLJE), today announced financial results for the quarter ended March 31, 2018.
First Quarter 2018 Highlights
- Digital Channels paying subscribers increased 44.2% from the first quarter of 2017 to over 750,000. Digital Channels segment revenues increased 45.4% to $8.7 million from $6.0 million in first quarter 2017.
- Total net revenue increased 33.8% year-over-year to $18.6 million, primarily driven by the increase in Digital Channels revenue. Wholesale Distribution segment revenue also increased 24.9% year-over-year.
- Gross profit increased 84.6% year-over-year to $8.8 million and gross margin of 47.4% expanded 13 percentage points from 34.3% last year. These profit improvements were driven by growth in Digital Channels revenue as well as revenue growth and gross margin expansion in Wholesale Distribution.
- Equity earnings from Agatha Christie Limited (ACL) increased 42.3% year-over-year to $0.8 million driven by ACL's film and publishing business segments.
- Net loss was $6.5 million compared to $6.1 million in first quarter 2017, of which $3.0 million and $2.9 million, respectively, was attributable to non-cash warrant expense driven by the appreciation of the RLJE stock price.
- Adjusted EBITDA increased substantially to $1.5 million from $0.1 million in the first quarter of 2017 primarily due to growth of (i) higher-margin Digital Channels revenue and (ii) Wholesale Distribution segment revenue and gross margin.
Robert L. Johnson, Chairman of RLJ Entertainment, stated, "As viewership continues to grow across the OTT landscape, brand differentiation becomes increasingly important. Our uniquely positioned channels offer compelling and exclusive programming that are driving sustained subscriber growth, enhancing our brand in the market and ultimately delivering incremental value to all stakeholders."
Miguel Penella, Chief Executive Officer of RLJ Entertainment, stated, "2018 is off to a terrific start. Our increased investments in unique and original content, expanded consumer awareness and broader distribution resulted in a strong first quarter. Our Digital Channel subscribers surpassed three quarters of a million. In our Wholesale Distribution segment, digital sales led the growth as we continue to transform the business from physical to digital. Our IP licensing segment continued to benefit from Agatha Christie's film and publishing performance. With continued investments in Digital Channels' compelling programming, powerful marketing, and distribution expansion, every quarter brings us closer to our 1 million subscriber target. As announced previously, Nazir Rostom, our CFO, is leaving on May 11, 2018. The Board joins me in thanking him for his tremendous accomplishments and contributions to RLJE over the past two years. We wish him the very best in his career."
Nazir Rostom, Chief Financial Officer of RLJ Entertainment, commented, "We delivered another solid quarter of growth and margin expansion across all our segments. We are executing our strategy of growing our Digital Channel subscriptions and expanding our gross profit, which is positioning us for another great year."
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.
