EX-99.1 2 dlpn_ex99z1.htm PRESS RELEASE Press Release

 


EXHIBIT 99.1


Dolphin Entertainment Reports Third Quarter Financial Results


NEW YORK and LOS ANGELES, Nov. 19, 2018 /PRNewswire/ -- Dolphin Entertainment, Inc. (NASDAQ: DLPN), a leading independent entertainment marketing and premium content production company, announces its financial results for the quarter ended September 30, 2018.


Quarterly and Recent Highlights   


·

Revenue for the three months ended September 30, 2018 was $5.7 million, compared to $6.8 million for the three months ended September 30, 2017.  The decrease in revenue in Q3 2018 is primarily attributable to the life cycle of a feature film that was released in October 2016 and the majority of the revenues from that film being recognized during 2016 and 2017.


·

Entertainment publicity revenue of $5.7 million, compared to $5.4 million in the same period in the prior year.


·

Operating loss of $(0.5) million for the three months ended September 30, 2018 as compared to operating revenue of $1.4 million in the same period in the prior year. The decrease is directly related to a decrease in production and distribution revenues of $1.4 million and an increase in (i) depreciation and amortization expense of $0.3 million related to the intangible assets of The Door; (ii) bad debt reserve of $0.2 million related to receivables from Open Road which filed for bankruptcy and (iii) increase in professional fees related to audit fees for the consolidated companies and tax advisors.


·

Net income of $0.2 million for the three months ended September 30, 2018 compared to net income of $6.2 million for the same period in the prior year. Net income for the three months ended September 30, 2017 includes a gain in the change in fair value of derivative liabilities of $1.4 and gain on extinguishment of debt $3.9 million as compared to only $0.4 million of gain in change in fair value of derivative liabilities in the net income for the three months ended September 30, 2018.


·

Stockholders' equity of $14.4 million as of September 30, 2018 compared to a stockholders' equity of $2.7 million on September 30, 2017.


·

Acquired top lifestyle and hospitality PR agency, The Door, for aggregate consideration of up to $11 million, which includes performance-based contingent consideration of up to $7 million.


·

Closed a $6.8 million public offering, including the underwriter’s overallotment. 2,265,000 shares of common stock were issued at a purchase price to the public of $3.00 per share, with no warrants attached.  


·

Closed a $750,000 registered direct offering of our stock and sold 250,000 shares of common stock at $3.00 per share.




 


·

42West’s talent team added 4 veteran publicists, following the previously reported departures of three senior publicist in June 2018.


·

The Door added New York icon, the Times Square Alliance, to its formidable client list and announced a significant expansion of its West Coast operations with the signing of five new California-based culinary brands as clients and the addition of a senior executive to its Los Angeles office.


·

42West launched its ability to create original content for client marketing campaigns.


·

On October 31, 2018, Dolphin acquired Viewpoint Creative, a full-service creative branding and production house, in an immediately accretive transaction.


Dolphin's CEO, Bill O'Dowd, commented: "We remain focused on assembling our ‘Super Group’ of previously privately-held, already profitable, best-in-class entertainment marketing companies, as evidenced by our acquisitions of The Door during the third quarter and Viewpoint in the current quarter, recognized as the third most powerful PR firm in the country and a leading full-service creative branding and production boutique, respectively. Coupled with four new hires to 42West’s Talent PR team in the third quarter, we believe that we are well positioned for continued revenue growth in 2019.”


Conference Call Information


To participate in this event, dial-in approximately 5 to 10 minutes before the beginning of the call.
Date, Time:  November 19, 2018, at 9:00 a.m. ET
Toll-free: 877-407-0782


International: 201-689-8567
Live Webcast: http://www.investorcalendar.com/event/41072


Conference Call Replay Information


The replay will be available beginning approximately 1 hour after the completion of the live event.
Toll-free: 877-481-4010
International: 919-882-2331
Reference ID: 41072





 


About Dolphin Entertainment, Inc.


Dolphin Entertainment is a leading independent entertainment marketing and premium content development company. Through our subsidiaries 42West and The Door, we provide expert strategic marketing and publicity services to many of the top brands, both individual and corporate, in the entertainment and hospitality industries. The Door and 42West are both recognized global leaders in PR services for their respective industries and, in December 2017, the New York Observer listed them, respectively, as the third and fourth most powerful PR firms of any kind in the United States. Dolphin's recent acquisition of Viewpoint Creative adds full-service creative branding and production capabilities to our marketing group. Dolphin's legacy content production business, founded by Emmy-nominated CEO Bill O'Dowd, has produced multiple feature films and award-winning digital series.


Special Note Regarding Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act. These forward-looking statements may address, among other things, Dolphin Entertainment's expected financial and operational results and the related assumptions underlying its expected results. These forward-looking statements are distinguished by the use of words such as "will," "would," "anticipate," "expect," "believe," "designed," "plan," or "intend," the negative of these terms, and similar references to future periods. These views involve risks and uncertainties that are difficult to predict and, accordingly, Dolphin Entertainment's actual results may differ materially from the results discussed in its forward-looking statements. Dolphin Entertainment's forward-looking statements contained herein speak only as of the date of this press release. Factors or events Dolphin Entertainment cannot predict, including those described in the risk factors contained in its filings with the Securities and Exchange Commission, may cause its actual results to differ from those expressed in forward-looking statements. Although Dolphin Entertainment believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be achieved, and Dolphin Entertainment undertakes no obligation to update publicly any forward-looking statements as a result of new information, future events, or otherwise.


Investor Contact:


James Carbonara
Partner, Hayden IR
james@haydenir.com 
+ 1 646 755 7412




 


DOLPHIN ENTERTAINMENT, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)


 

 

As of
September 30,
2018

 

 

As of
December 31,
2017

 

ASSETS

  

                      

  

  

                      

  

Current

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

7,112,256

 

 

$

5,296,873

 

Restricted cash

 

 

677,354

 

 

 

—

 

Accounts receivable, net of allowance for doubtful accounts of $531,409 and $366,280, respectively.

 

 

3,412,585

 

 

 

3,700,618

 

Other current assets

 

 

367,563

 

 

 

422,118

 

Total current assets

 

 

11,569,758

 

 

 

9,419,609

 

Capitalized production costs, net

 

 

884,585

 

 

 

1,075,645

 

Intangible assets, net of accumulated amortization of $2,169,782 and $1,043,255, respectively.

 

 

9,490,218

 

 

 

8,506,745

 

Goodwill

 

 

16,614,335

 

 

 

12,778,860

 

Property, equipment and leasehold improvements, net

 

 

1,067,874

 

 

 

1,110,776

 

Investments

 

 

220,000

 

 

 

220,000

 

Deposits

 

 

475,958

 

 

 

485,508

 

Total Assets

 

$

40,322,728

 

 

$

33,597,143

 


(Continued)




 


DOLPHIN ENTERTAINMENT, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)

(unaudited)


 

 

As of
September 30,
2018

 

 

As of
December 31,
2017

 

LIABILITIES

 

 

 

 

 

 

 

 

Current

 

 

 

 

 

 

 

 

Accounts payable

 

$

877,240

 

 

$

1,097,006

 

Other current liabilities

 

 

5,585,920

 

 

 

6,487,819

 

Merger consideration payable

 

 

1,000,000

 

 

 

—

 

Line of credit

 

 

1,700,390

 

 

 

750,000

 

Put rights

 

 

3,273,448

 

 

 

2,446,216

 

Accrued compensation

 

 

2,625,000

 

 

 

2,500,000

 

Debt

 

 

2,756,392

 

 

 

3,987,220

 

Loan from related party

 

 

1,107,873

 

 

 

1,708,874

 

Deferred revenue

 

 

60,074

 

 

 

48,449

 

Convertible notes payable

 

 

625,000

 

 

 

800,000

 

Notes payable

 

 

900,000

 

 

 

300,000

 

Total current liabilities

 

 

20,511,337

 

 

 

20,125,584

 

Noncurrent

 

 

 

 

 

 

 

 

Warrant liability

 

 

—

 

 

 

1,441,831

 

Put rights

 

 

1,909,265

 

 

 

3,779,794

 

Convertible notes payable, net of debt discount

 

 

1,346,155

 

 

 

75,000

 

Notes payable

 

 

—

 

 

 

600,000

 

Contingent consideration

 

 

1,150,000

 

 

 

—

 

Deferred tax

 

 

201,740

 

 

 

187,537

 

Other noncurrent liabilities

 

 

804,143

 

 

 

1,311,040

 

Total noncurrent liabilities

 

 

5,411,303

 

 

 

7,395,202

 

Total Liabilities

 

 

25,922,640

 

 

 

27,520,786

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies (Note 17)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

Common stock, $0.015 par value, 200,000,000 shares authorized, 13,933,540 and 10,565,789, respectively, issued and outstanding at September 30, 2018 and December 31, 2017

 

 

209,003

 

 

 

158,487

 

Preferred Stock, Series C, $0.001 par value, 50,000 shares authorized, issued and outstanding at September 30, 2018 and December 31, 2017

 

 

1,000

 

 

 

1,000

 

Additional paid in capital

 

 

105,003,434

 

 

 

98,816,550

 

Accumulated deficit

 

 

(90,813,349

)

 

 

(92,899,680

)

Total Stockholders' Equity

 

 

14,400,088

 

 

 

6,076,357

 

Total Liabilities and Stockholders' Equity

 

$

40,322,728

 

 

$

33,597,143

 


The notes to the financial statement not included here, are an integral part of the consolidated financial statements



 


DOLPHIN ENTERTAINMENT, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(unaudited)


 

 

For the three months ended

 

 

For the nine months ended

 

 

 

September 30

 

 

September 30

 

 

 

2018

 

 

2017

 

 

2018

 

 

2017

 

Revenues:

  

                      

  

  

                      

  

  

                      

  

  

                      

  

Entertainment publicity

 

$

5,720,264

 

 

$

5,409,175

 

 

$

16,297,466

 

 

$

10,546,716

 

Production and distribution

 

 

—

 

 

 

1,398,839

 

 

 

427,153

 

 

 

4,625,801

 

Total revenues

 

 

5,720,264

 

 

 

6,808,014

 

 

 

16,724,619

 

 

 

15,172,517

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Direct costs

 

 

333,041

 

 

 

427,926

 

 

 

1,199,165

 

 

 

2,927,817

 

Distribution and marketing

 

 

—

 

 

 

320,439

 

 

 

—

 

 

 

950,812

 

Selling, general and administrative

 

 

1,111,516

 

 

 

698,001

 

 

 

2,547,621

 

 

 

1,956,695

 

Depreciation and amortization

 

 

599,078

 

 

 

321,538

 

 

 

1,345,421

 

 

 

648,848

 

Legal and professional

 

 

601,330

 

 

 

208,637

 

 

 

1,445,818

 

 

 

1,098,728

 

Payroll

 

 

3,614,139

 

 

 

3,482,246

 

 

 

10,755,111

 

 

 

7,284,734

 

Total expenses

 

 

6,259,104

 

 

 

5,458,787

 

 

 

17,293,136

 

 

 

14,867,634

 

Income (loss) before other income (expenses)

 

 

(538,840

)

 

 

1,349,227

 

 

 

(568,517

)

 

 

304,883

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expenses):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain (loss) on extinguishment of debt

 

 

—

 

 

 

3,881,444

 

 

 

(53,271

)

 

 

3,877,277

 

Loss on disposal of furniture, office equipment and leasehold improvements

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(28,025

)

Acquisition costs

 

 

(182,504

)

 

 

—

 

 

 

(217,174

)

 

 

(745,272

)

Change in fair value of warrant liability

 

 

—

 

 

 

1,396,094

 

 

 

—

 

 

 

7,685,607

 

Change in fair value of put rights

 

 

(110,840

)

 

 

200,000

 

 

 

1,305,797

 

 

 

100,000

 

Change in fair value of contingent consideration

 

 

470,000

 

 

 

(230,000

)

 

 

470,000

 

 

 

(346,000

)

Interest expense

 

 

(277,122

)

 

 

(424,187

)

 

 

(810,521

)

 

 

(1,273,166

)

Total other income (expenses)

 

 

(100,466

)

 

 

4,823,351

 

 

 

694,831

 

 

 

9,270,421

 

Income (loss) before income taxes

 

$

(639,306

)

 

$

6,172,578

 

 

$

126,314

 

 

$

9,575,304

 

Income taxes

 

 

819,451

 

 

 

—

 

 

 

538,831

 

 

 

—

 

Net income

 

$

180,145

 

 

$

6,172,578

 

 

$

665,145

 

 

$

9,575,304

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (Loss) per Share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.01

)

 

$

0.66

 

 

$

0.05

 

 

$

1.11

 

Diluted

 

$

(0.01

)

 

$

0.44

 

 

$

(0.04

)

 

$

0.20

 

Weighted average number of shares used in per share calculation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

14,565,766

 

 

 

9,336,826

 

 

 

13,151,649

 

 

 

8,640,543

 

Diluted

 

 

14,565,766

 

 

 

10,382,818

 

 

 

15,255,445

 

 

 

9,479,840

 

 

The notes to the financial statement not included here, are an integral part of the consolidated financial statements