TORONTO, March 12, 2015 /PRNewswire/ --
Successfully Implemented Wave 2
and 3 of Efficiency Gains of More Than $8M annualized, Achieving Targets as
Established
Expects to Achieve Annualized
Cost Savings of $4 to $5 Million from
Incremental Synergy Activities in 2015 While Supporting Growth
Initiatives
Establishes 2015 EBITDA and
Free Cash Flow Expectations
Mood Media Corporation ("Mood Media," "Mood" or "the Company")
(ISIN: CA61534J1057) (TSX:MM), the world's largest integrated
provider of in-store customer experience solutions, today reported
results for the fourth quarter and full year of 2014, provided an
update on the Company's progress executing against its strategic
and operational plans and established 2015 EBITDA and free cash
flow guidance.
Recent Highlights
- Mood achieved Q4 revenues of $127.1
million and EBITDA of $28.9
million.
- Strong EBITDA performance in Q4 with growth of 10% sequentially
and 21% relative to the prior year; Mood's best performance in the
past eight quarters.
- All four Mood business units -North
America, International, Technomedia and BIS -posted EBITDA
gains in Q4 relative to the prior quarter, and three of four
relative to last year.
- The Company successfully implemented Waves 2 and 3 of its
global transformation, integration and consolidation activities,
with expected benefits of nearly $9
million in annualized savings; Wave 4 annualized savings
expected to reach at least $4 to $5
million in 2015.
- Mood forecasts positive free cash flow generation in 2015 and
for EBITDA to rise moderately relative to 2014.
- Mood is on track to finalize a resolution for the refinancing
of its convertible debentures in advance of their maturity, in
October 2015.
"The enhancements to profitability from our comprehensive
operational and efficiency program clearly showed through in our
financial results in the fourth quarter and second half of the year
as we expected and outlined earlier in 2014," said Steve Richards, President and CEO of Mood Media.
"We concluded our Wave 2 and 3 initiatives and are embarking upon
Wave 4 with an expectation of a further $4
to $5 million in annualized savings to be produced in 2015.
Beyond the numbers, the operational and efficiency program is
fundamentally re-shaping the foundation of our operations and
providing streamlined systems to enable growth. We are pleased with
the revenue development initiatives we have implemented, including
the launch of new solutions, more active cross-selling activities,
local sales channel development and progress with new partners for
distribution and solutions."
"The accumulation of our combined efforts to date is expected to
enable positive free cash generation in 2015 through continued
EBITDA growth, reduced transaction/restructuring disbursements,
stable capital expenditures and cash taxes," Richards continued."
We expect our positive free cash flow will reflect a reduction in
our net debt balances in 2015 and will represent a significant
positive milestone for Mood, which is derived from the efforts and
achievements of our Team. Free Cash Flow (increase in net debt) for
2014 was negative $11.3m while we
expect 2015 to be positive."
"EBITDA is expected to grow moderately in 2015 from the
$102.6 million we generated in 2014,
even after including the negative effects of foreign exchange and
asset disposals on reported EBITDA," said Richards. "These effects
represent $4 million of headwinds in
2015 via $3 million owing to lower
Euro exchange rate relative to the U.S. dollar and an additional
$1 million resulting from the sale of
our DMX Canada accounts in mid-2014. Excluding the above-mentioned
items, underlying EBITDA is expected to grow by mid-single digits.
We expect our 2015 EBITDA results will show a similar quarterly
seasonal pattern as 2014 with Q4 being the strongest quarter and
the second half performance being stronger than the first
half."
"Our 2015 cash flow generation is expected to benefit from the
significant efforts delivered in 2014 in terms of implementing our
operational and efficiency program, retooling our management team
and eliminating legacy items and their associated disbursements,"
Richards stated. "Accordingly, we expect transaction and
restructuring expenses will fall to the range of $5-$10 million in 2015, versus the $28 million recorded in 2014. Current efforts
should cause cash disbursements associated with current and past
accruals to decline from $18 million
in 2014 to approximately $12 million
in 2015."
Fourth Quarter Financial Results
The Company reported Q4 revenues of $127.1 million and EBITDA of $28.9 million, both of which rose sequentially
compared with Q3. Net loss per share from continuing operations was
($0.12) compared with a net loss per
share of ($0.07) in the prior-year
period and net loss per share of ($0.11) in Q3. The Company's fourth quarter
revenue and EBITDA performance was impacted by the sale of its
Latin American and Canadian accounts as well as foreign exchange
translation. Before adjusting for these disposals, the Company's
revenues were down 3.9% and EBITDA grew by 20.8% relative to the
prior year. Adjusting for these items, the Company's revenues would
have increased by 1% and EBITDA would have improved by 27% on an
underlying basis relative to the prior year. EBITDA performance was
also aided by a $5.7 million
reduction in operating expenses relative to the prior year, which
was attributable primarily to the positive impact of its
integration and synergy programs in its North American,
International and head office operations.
Other expenses totaled $11.6
million in the quarter compared with $5.5 million in the prior year. Other expenses in
the quarter was comprised primarily of transaction expenses and
related to the amended Technomedia share purchase agreement and
recognition of the earnout. Restructuring and integration expense
related primarily to severance and integration expenses in Mood
International.
Key Performance Indicators
Q1.13 Q2.13 Q3.13 Q4.13 2013
Audio sites 428,835 427,038 428,085 428,095 428,095
Visual sites 11,552 12,115 12,479 12,666 12,666
Total sites 440,387 439,153 440,564 440,761 440,761
Audio ARPU $ 47.19 $ 46.25 $ 45.65 $ 45.62 $ 46.17
Visual ARPU $ 89.78 $ 83.42 $ 89.21 $ 81.27 $ 84.30
Blended ARPU $ 48.28 $ 47.25 $ 46.87 $ 46.64 $ 47.23
Audio gross additions 11,599 9,960 9,208 9,765 40,532
Visual gross additions 1,092 699 497 1,219 3,507
Total gross additions 12,691 10,659 9,705 10,984 44,039
Audio monthly churn 0.8% 0.9% 0.6% 0.8% 0.8%
Visual monthly churn 1.4% 0.4% 0.4% 2.8% 1.3%
Total monthly churn 0.8% 0.9% 0.6% 0.8% 0.8%
Table continues...
Q1.14 Q2.14 Q3.14 Q4.14 2014
Audio sites 423,796 418,513 406,139 408,457 408,457
Visual sites 12,997 13,821 13,558 14,061 14,061
Total sites 436,793 432,334 419,697 422,518 422,518
Audio ARPU $ 45.35 $ 45.17 $ 44.83 $ 43.09 $ 44.57
Visual ARPU $ 84.59 $ 85.08 $ 83.60 $ 82.12 $ 83.72
Blended ARPU $ 46.50 $ 46.40 $ 46.09 $ 44.37 $ 45.79
Audio gross additions 10,112 6,981 9,279 12,394 38,766
Visual gross additions 478 996 761 685 2,920
Total gross additions 10,590 7,977 10,040 13,079 41,686
Audio monthly churn 1.1% 1.0% 0.9% 0.8% 0.9%
Visual monthly churn 0.4% 0.4% 1.3% 0.4% 0.7%
Total monthly churn 1.1% 0.9% 0.9% 0.8% 0.9%
In the fourth quarter, the number of total Company-owned sites
increased by 2,821 relative to the prior quarter. The Company grew
its site base in the quarter in both its North American and
International business units. Similarly, its audio and visual sites
also rose in both business units.
For the full year, the Company's site base decreased by 18,243
sites. The decrease in sites was primarily attributable to the sale
of its Canadian commercial accounts and to a lesser degree to a
one-time adjustment to its site base reflecting the settlement of
the Muzak IA agreement in 2013 in connection with its acquisition
and integration of DMX. These factors represented a decrease of
11,653 sites in the third quarter of 2014.
Monthly churn was 0.8% in the fourth quarter compared with 0.9%
in the prior quarter, with Audio churn of 0.8% and Visual churn of
0.4%. The Company grew its Visual site base by 503 sites relative
to the third quarter.
On a constant currency basis, blended ARPU declined by 2.1%
year-over-year in the fourth quarter while on a reported basis
blended ARPU declined by 4.8% year-over-year in the fourth quarter
to $44.37 per month. Blended ARPU was
negatively affected by the decline in the translation rate for the
Euro relative to the U.S. dollar and to the true up of IA revenues
following the ERP conversion in Mood Media North America. Audio
ARPU decreased by 5.5% relative to the prior year to $43.09 while Visual ARPU rose by 1.0%
year-over-year to $82.12. Audio ARPU
decreased in both the North American and International business
units. Visual ARPU rose by 15% year-over-year in North America and decreased in its
International operations, although increased on a constant currency
basis.
Conference Call
As previously announced, the Company will hold a conference call
on March 13, 2015, at 8:00 a.m. Eastern Time to discuss its results and
respond to questions from the investment community. The call can be
accessed by telephone by dialing 416-764-8658, or 1 888-886-7786
for international callers. Listeners are advised to dial in at
least five minutes prior to the call.
This earnings release, which is current as of March 12, 2015, is a summary of the Company's
fourth quarter and full year 2014 results, and should be read in
conjunction with the Company's fourth quarter 2014 MD&A and
Consolidated Financial Statements and Notes thereto and our other
recent regulatory filings.
The financial information presented herein has been prepared on
the basis of IFRS for consolidated financial statements and is
expressed in United States dollars
unless otherwise stated.
This news release includes certain non-IFRS financial measures.
Mood Media uses these non-IFRS financial measures as supplemental
indicators of its operating performance and financial position.
These measures do not have any standardized meanings prescribed by
IFRS and therefore may not be comparable to the calculation of
similar measures used by other companies, and should not be viewed
as alternatives to measures of financial performance calculated in
accordance with IFRS.
In this earnings release, the terms "we," "us," "our," "Mood
Media," "Mood" and "the Company" refer to Mood Media Corporation
and our subsidiaries.
Mood Media Corporation
CONSOLIDATED STATEMENTS OF LOSS
For the three months and the year ended December 31, 2014
In thousands of US dollars, unless otherwise stated
Three months ended Year ended
December 31, December 31, December 31, December 31, December 31,
2014 2013 2014 2013 2012
Continuing operations
Revenue $127,052 $132,253 $494,060 $513,270 $443,823
Expenses:
Cost of sales 58,781 63,243 227,888 233,877 183,759
Operating
expenses 39,329 45,047 163,575 175,891 148,404
Depreciation
and
amortization 18,725 18,037 72,263 69,182 57,856
Impairment of
goodwill - - - 75,000 -
Share-based
compensation 401 415 1,392 2,275 3,758
Other expenses 11,588 5,521 28,229 30,791 39,812
Foreign
exchange loss
(gain) on
financing
transactions 6,679 (2,202) 17,097 (6,979) (1,428)
Finance costs,
net 14,687 13,919 70,057 38,279 51,045
Loss for the period
before taxes (23,138) (11,727) (86,441) (105,046) (39,383)
Income tax charge
(credit) (892) 898 (4,067) 7,773 (14,219)
Loss for the period
from continuing
operations (22,246) (12,625) (82,374) (112,819) (25,164)
Discontinued
operations
Loss after tax from
discontinued
operations - 68 - (16,419) (54,067)
Loss for the period (22,246) (12,557) (82,374) (129,238) (79,231)
Attributable to:
Owners of the
parent (22,265) (12,540) (82,442) (129,549) (79,502)
Non-controlling
interests 19 (17) 68 311 271
$(22,246) $(12,557) $(82,374) $(129,238) $(79,231)
Net loss per share:
Basic and
diluted $(0.12) $(0.07) $(0.46) $(0.76) $(0.50)
Basic and
diluted from
continuing
operations (0.12) (0.07) (0.46) (0.66) (0.16)
Basic and
diluted from
discontinued
operations - - - (0.10) (0.34)
About Mood Media Corporation
Mood Media Corporation (TSX:MM), is one of the world's largest
designers of in-store consumer experiences, including audio,
visual, interactive, scent, voice and advertising solutions. Mood
Media's solutions reach over 150 million consumers each day through
more than half a million subscriber locations in over 40 countries
throughout North America,
Europe, Asia and Australia.
Mood Media Corporation's client base includes more than 850 U.S.
and international brands in diverse market sectors that include:
retail, from fashion to financial services; hospitality, from
hotels to health spas; and food retail, including restaurants,
bars, quick-serve and fast casual dining. Our marketing platforms
include 77% of the top 100 retailers in the United States and all of the top 50
quick-serve and fast-casual restaurant companies.
For further information about Mood Media, please
visit http://www.moodmedia.com.
Cautionary Statement Regarding Forward-Looking Statements
This press release contains forward-looking statements. The
words "believe," "expect," "anticipate," "estimate," "intend,"
"may," "will," "would" and similar expressions and the negative of
such expressions are intended to identify forward-looking
statements, although not all forward-looking statements contain
these identifying words. These forward-looking statements are
subject to important assumptions, including without limitation,
expected growth, results of operations, performance, financial
condition, strategy and business prospects and opportunities. While
Mood Media considers these factors and assumptions to be reasonable
based on information currently available, they are inherently
subject to significant uncertainties and contingencies and may
prove to be incorrect.
Known and unknown factors could cause actual results to differ
materially from those projected in the forward-looking statements.
Such factors include, but are not limited to: the impact of general
market, industry, credit and economic conditions, currency
fluctuations as well as the risk factors identified in Mood Media's
management discussion and analysis dated March 12, 2015 and Mood Media's annual
information form dated March 28,
2014, both of which are available
on http://www.sedar.com.
Given these uncertainties, readers are cautioned not to place
undue reliance on such forward-looking statements. All of the
forward-looking statements made in this press release are qualified
by these cautionary statements and other cautionary statements or
factors contained herein, and there can be no assurance that the
actual results or developments will be realized or, even if
substantially realized, that they will have the expected
consequences to, or effects on, Mood Media.
Forward-looking statements are given only as at the date hereof
and Mood Media disclaims any obligation to update or revise the
forward-looking statements, whether as a result of new information,
future events or otherwise, except as required by applicable
laws.
Mood Media Corporation presents EBITDA/Adjusted EBITDA
information as a supplemental figure because management believes it
provides useful information regarding operating performance. The
Company uses the terms EBITDA and Adjusted EBITDA interchangeably
and recognizes that neither is a recognized measure under
International Financial Reporting Standards ("IFRS"), does not have
standardized meaning, and may not be comparable to similar measures
used by other companies. Accordingly, investors are cautioned that
Adjusted EBITDA should not be construed as an alternative to net
earnings or (loss) determined in accordance with IFRS as an
indicator of the financial performance of Mood Media or as a
measure of Mood Media's liquidity and cash flows.
Reconciliation of segment profit to Consolidated Group loss
for the year before taxes from continuing operations
2014 2013
Segment profit (i) $102,597 $103,502
Depreciation and amortization 72,263 69,182
Impairment of goodwill - 75,000
Share-based compensation 1,392 2,275
Other expenses 28,229 30,791
Foreign exchange loss (gain) on financing transactions 17,097 (6,979)
Finance costs, net 70,057 38,279
Loss for the year before taxes from continuing operations $(86,441) $(105,046)
(i) Segment profit is management's additional GAAP metric
internally referred to as Adjusted EBITDA and is prepared on a
consistent basis. Adjusted EBITDA is considered by executive
management as one of the key drivers for the purpose of making
decisions about performance assessment and resource allocation of
each operating segment.
Free Cash Flow (FCF) is another non-IFRS measure that Mood Media
uses to explain positive or negative net cash flows. The company
defines FCF as the change in net debt from the end of the prior
period to the end of the current period being reported. Contractual
debt less unrestricted cash is used to calculate net debt at the
respective balance sheet dates. The Company uses the contractual
principal amount of its debt instruments and financing leases as
set forth in footnote 18 to the consolidated financial statements.
Following is a table which sets forth the calculation of net debt
and FCF from December 31, 2013 to
December 31, 2014. The Company
cautions that net debt and free cash flow do not have
standardized meanings and may not be comparable to similar measures
used by other companies. Accordingly, investors are cautioned that
FCF and net debt should not be construed as an alternative to net
earnings or (loss) determined in accordance with IFRS as an
indicator of the financial performance of Mood Media or as a
measure of Mood Media's liquidity and cash flows.
Increase or
Contractual obligations - Decrease in
Financial Statements December 31, 2014 December 31, 2013 Debt and Cash
Description
First lien credit facility $233,238 $217,897 $15,341
Senior unsecured notes 350,000 350,000 $0
Convertible debentures 50,266 50,266 $0
Finance leases 761 1,663 ($902)
Total Contractual Principal
of Debt $634,265 $619,826 $14,439
Less: Unrestricted Cash 25,573 22,410 $3,163
Net Debt $608,692 $597,416 $11,276
Free Cash Flow/(Increase)
or Decrease in Net Debt ($11,276)
Investor Inquiries, Randal
Rudniski, Mood Media Corporation, Tel: +1(512)592-2438,
Email: randal.rudniski@moodmedia.com; North America Media
Inquiries, Sumter Cox, Mood Media
Corporation, Senior Director of Marketing and Communications, Tel:
+1(803)-242-9147, Email: sumter.cox@moodmedia.com