via NewMediaWire -- Troika Media Group, Inc. (Nasdaq: TRKA)
("TMG" or "Company"), a transformational business solutions
partner providing brand building and activation, technology and
innovation, and performance marketing growth for global businesses,
today announced financial results for its third quarter of fiscal
year 2022 ended March 31, 2022. Management will host a conference
call to discuss these results and other reorganization updates
after the Company soon files with the Securities and Exchange
Commission (SEC) the audited financial results of Converge Direct,
LLC (“Converge”) and its affiliates for fiscal years ended December
31, 2021, 2020 and 2019.
Third Quarter and Year-to-Date Financial
and Operational Highlights
- Revenue increase of 307% to $15.7 million in Q3 2022,
compared to the prior year quarter.
- Acquisition of Converge, which closed on March 22, 2022,
contributed $10.0 million to total Q3 2022 revenue (a 10-day period
of revenues included in the Company’s Third Quarter).
- At March 31, 2022, the Company had $42.4
million of cash available on its balance sheet and expects
strong revenue growth to continue in FY 2022.
- New business demand across all Solutions Groups continues
momentum in Q4 2022, with a growing number of new clients and
diverse sectors.
Management Commentary
“We are pleased with the 307% revenue increase in
Q3 2022 as compared with the prior year quarter. The performance is
indicative of the continued recovery of the core brand and
activation business post-Covid, and a very small example of the
impact that the acquisition of Converge is anticipated to have on
the Company’s revenue once we are able to include a full quarter of
Converge’s performance,” said Sid Toama, who was appointed as CEO
of TMG on May 19, 2022. “Demand for Troika’s performance-driven
solutions in brand building, activation, and marketing innovations
is growing. Converge’s business intelligence and customer
acquisition capabilities will be an exciting complement to TMG’s
new integrated business strategy and ultimately, its revenue
opportunities.”
Mr. Toama added, "TMG is at an important juncture
in its transformation following the Converge acquisition; we are
optimizing the organization structure and functions designed to
deliver a scalable and more profitable business model. The plan is
to leverage the Company’s historical acquisitions to create an
integrated group of attractive and lucrative performance-driven
business solutions, powered by globally-integrated business
functions. The changes that we have made, and are continuing to
make, are expected to save significant costs in the long term and
accelerate the unified TMG business, while continuing to build on
Converge’s proven operational and business model.”
Q3 Fiscal 2022 Summary Results
(GAAP)
Revenues for the three months ended March 31, 2022
and 2021 were $15.7 million and $3.9 million, respectively, an
increase of approximately $11.8 million or 307%. This increase is
primarily due to the acquisition of Converge, which closed on March
22, 2022, and recognized revenue of approximately $10.0 million.
The remaining balance of approximately $1.8 million in revenue is
attributable to TMG’s integrated branding and engagement solutions,
which benefited from the generation of new business from the UK and
U.S based subsidiaries post-COVID.
Operating costs for the three months ended March
31, 2022 and 2021 were $17.6 million and $7.5 million,
respectively, an increase of $10.1 million or 134.1%. The
increase of $10.1 million of operating costs related primarily to
one-time charges concerning stock incentive plans of $8.1 million
and non-recurring expenses in the form of professional fees
associated with the Converge acquisition of $2.4 million.
Operating loss for the three months ended March
31, 2022, was $13.7 million, an increase of $8.1 million compared
to the prior year period. The increase is primarily attributable to
the increase in operating costs of $10.1 million and the increase
in cost of revenues of $9.8 million partially offset by the
increase in revenues of $11.8 million.
Q3 Fiscal 2022 Summary Results
(Non-GAAP)*
|
|
Three Months Ended March 31 |
|
|
2022 |
|
2021 |
Non-GAAP Measures (Unaudited): |
|
|
|
|
|
|
|
|
|
Net
loss |
|
$ |
(14,388,000) |
|
$ |
(4,679,000) |
|
|
|
|
|
|
|
Acquisition & related professional costs |
|
|
2,658,000 |
|
|
- |
Depreciation and amortization |
|
|
429,000 |
|
|
574,000 |
Interest expense, net |
|
|
100,000 |
|
|
- |
Bad
debt expense |
|
|
85,000 |
|
|
- |
Stock-based compensation expense |
|
|
9,901,000 |
|
|
2,698,000 |
Legal
settlement |
|
|
59,000 |
|
|
47,000 |
Adjusted EBITDA |
|
$ |
(1,156,000) |
|
$ |
(1,360,000) |
* Please refer to "Non-GAAP
Financial Measures" below for a description of these measures
Definitions
Adjusted EBITDA is defined as net income (loss),
excluding interest income; interest expense; other income (expense)
net; income tax benefit (expense); depreciation and amortization;
stock-based compensation expense and other payroll related tax
expense; and certain other non-cash or non-recurring items
impacting net income (loss) from time to time.
Note: For adjustments and additional information
regarding the non-GAAP financial measures and other items
discussed, please see “Non-GAAP Financial Measures,”
“Reconciliation of GAAP to Non-GAAP Financial Measures.”
About Troika Media Group
TMG is a transformational business solutions
partner based in New York, Los Angeles and London. We deliver
resilient brand equity, amplifying brands through emerging
technology and transcending them into culture to deliver
performance driven business growth. Troika’s expertise is in
Consumer Products and Services, Entertainment and Media, Sports and
Sports Betting, Financial and Professional, Education and eSports
and Gaming sectors. Our clients include Apple, Hulu, Riot
Games, Belvedere Vodka, Unilever, UFC, Leaf Home, AT&T,
Andersen Windows, Peloton, CNN, HBO, ESPN, Wynn Resorts and
Casinos, Tiffany & Co., IMAX, Netflix, Sony, Yahoo and
Coca-Cola. For more information, visit www.thetmgrp.com.
Forward-Looking Statements
Certain statements in this press release that
are not historical facts are forward-looking statements that
reflect management's current expectations, assumptions, and
estimates of future performance and economic conditions, and
involve risks and uncertainties that could cause actual results to
differ materially from those anticipated by the statements made
herein. Forward-looking statements are generally identifiable by
the use of forward-looking terminology such as "believe,"
"expects," "may," "looks to," "will," "should," "plan," "intend,"
"on condition," "target," "see," "potential," "estimates,"
"preliminary," or "anticipates" or the negative thereof or
comparable terminology, or by discussion of strategy or goals or
other future events, circumstances, or effects. Moreover,
forward-looking statements in this release include, but are not
limited to, the impact of the current COVID-19 pandemic, which may
limit access to the Company's facilities, customers, management,
support staff, and professional advisors, and to develop and
deliver advanced voice and data communications systems, demand for
the Company's products and services, economic conditions in the
U.S. and worldwide, including the effects of the war in Ukraine,
and the Company's ability to recruit and retain management,
technical, and sales personnel or fully integrate the Converge
business. Further information relating to factors that may impact
the Company's results and forward-looking statements are disclosed
in the Company's filings with the SEC. The forward-looking
statements contained in this press release are made as of the date
of this press release, and the Company disclaims any intention or
obligation, other than imposed by law, to update or revise any
forward-looking statements, whether as a result of new information,
future events, or otherwise
Investor Relations Contact:
TraDigital IR
Kevin McGrath
+1-646-418-7002
kevin@tradigitalir.com
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