RLJ Entertainment Cuts Q1 Loss More Than 50%11 May, 2017 By: Erik Gruenwedel
RLJ Entertainment May 11 announced a first-quarter (ended March 31) loss of $6 million, compared with a loss of more than $13 million during the previous-year period. Revenue declined 22% to $13.8 million, from $17.7 million a year ago.
The home entertainment distributor, which was formed in 2012 through the merger of Acorn Media Group and Image Entertainment, attributed the improvement to operational efficiencies and changes in the fair value of stock warrants and reduced interest expenses.
More importantly, RLJ upped digital revenue more than 103% to $6 million, from $2.95 million during the previous-year period. Paid subscribers for subscription streaming video services Acorn TV and Urban Movie Channel topped 520,000, up 90% from 274,000 paid subs a year earlier.
“This year, we are increasing our investment in original, exclusive and high-quality content to expand our digital channels programming, growing the content pipeline of our IP licensing and wholesale business units … to expand the platform’s geographical footprint,” CEO Miguel Penella said in a statement.
RLJE plans to reach 1 million paid subs in the next two years through original and licensed content — a tall order with less $4 million in cash on the balance sheet.
In February, the distributor amended a credit agreement with AMC Networks to expand a bond provision (“tranche”) from $3 million to $15 million. Last October, AMC gave RLJE a $65 million loan with options to secure majority interest in the distributor.
“We are very excited about achieving positive adjusted pre-tax earnings in our seasonally slowest quarter. We expect continued adjusted pre-tax earnings momentum throughout the rest of the year,” said CFO Nazir Rostom.