VANCOUVER, British Columbia, Nov. 14, 2022 (GLOBE NEWSWIRE) — Amcomri Entertainment Inc. (“Amcomri” or the “Company”) (NEO: AMEN) (OTC: AMNNF) (Frankfurt: 25YO), a global producer and distributor of independent movies, TV series and documentaries, announced today financial results for the three and nine months ended September 30, 2022. All dollar amounts are in Canadian dollars unless otherwise stated.
Q3 2022 Highlights
- Revenues increased 18.9% to $4,360,217 compared to Q3 2021;
- Gross margin was 80.1%, consistent with high-margin, low-overhead business model;
- Adjusted EBITDA of $1,376,849;
- Net loss of $316,789 after one-off non-cash charges of $1,297,231;
- Abacus Media Rights (TV and documentary) continued to benefit from strong demand from broadcasters and streaming services; and
- Acquired the UK and Irish distribution rights of Screen Media in perpetuity comprising more than 750 hours of films and TV for total cash consideration of $4,800,000.
“Our TV and documentary distribution business, Abacus, continued to perform brilliantly during the quarter on the back of strong demand from broadcasters and streaming services for their growing content offering,” said Robert Price, Chief Executive Officer of Amcomri. “During the quarter, we acquired the UK and Irish distribution rights of Screen Media in perpetuity, further demonstrating our commitment and ability to execute our diversified growth strategy. We now have nearly 5,000 hours of TV programming and about 3,500 movies in our highly sought-after content libraries. Consumer demand for content remains very high. Our content is very effective at driving audience and super-efficient from a cost point of view, and that puts us in a great place.”
“Importantly, we’re just getting started. We are highly focused on expanding our presence in North America, the United Kingdom, and around the globe. We are ten months into our five-year growth plan, and we’ve already completed and integrated three acquisitions. Our plan is for more acquisitions while further strengthening our production, co-production, and distribution capabilities. Looking ahead to 2023, we have several scripted TV dramas planned for release and on the film side we have the highly anticipated release of Left Behind: Rise of the Antichrist on January 26th in USA cinemas starring Kevin Sorbo & Neal McDonough. The franchise and its stars have strong social media followings and previous films in the series have generated over $200 million in sales.”
Selected Financial Information
The following table sets out selected historical financial information for Amcomri for the third quarter ended September 30, 2022. Such information is derived from and should be read in conjunction with the consolidated financial statements of Amcomri for the third quarter of 2022, which have been filed under the Company’s profile on SEDAR at www.sedar.com.
|For the three months ended Sept. 30(2)||For the nine months ended Sept. 30(2)|
|Gross Margin Percentage||80.1||%||100.0||%||83.8||%||87.3||%|
|Other Expenses (Income)||$837,962||$(1,563,561||)||$1,226,898||$90,683|
|Net Income (Loss)||$(316,789||)||$4,224,622||$1,724,660||$6,219,623|
(1) EBITDA is a non-IFRS measure. See the “Non-IFRS Measures” section for reconciliation to net income.
(2) Amounts in this news release have been converted from British Pounds Sterling at a rate of £1.00 to C$1.612.
Third Quarter Overview
Revenue for the quarter increased 18.9% to $4,360,217 compared to $3,668,146 for the same period in 2021. On a sequential basis, revenue was higher compared to $3,564,563 for the second quarter and $4,165,183 for the first quarter.
Five movies originally expected to be delivered to the Company in the third quarter were delayed. Three of the five movies were delivered subsequent to quarter end and the other two are expected to be delivered before the end of the fourth quarter.
Gross margin for the quarter was $3,491,474, or 80.1% of revenue. Gross margin in the third quarter of last year was $3,668,146, or 100% of revenue, as there was no cost of goods sold in that period.
Operating expenses for the quarter increased 194.9% to $2,970,301 compared to $1,007,085 for the same quarter last year. Contributing to the rise were the cost of director and officer insurance (acquired as a pre-requisite of listing on the NEO Exchange), a $535,637 increase in salaries and benefits (primarily due to a higher headcount), a $339,352 increase in professional fees, and other increases attributable to the growth of the Company. Additionally, as part of the reverse takeover certain directors were each awarded 256,000 common shares of the Company in respect of their service. The issuance of such shares resulted in a one-off non-cash charge of $410,805 being recognized in the quarter.
As a result of the acquisition of the UK and Irish distribution rights of Screen Media in perpetuity, the Company recorded a one-off non-cash impairment charge of $886,426 as a result of unwinding the original acquisition of the distribution rights to the library for what was then, a period of seven years.
Excluding the one-off non-cash charges above, Adjusted EBITDA for the quarter amounted to $1,376,849, or 31.6% of revenue, compared to $2,961,979, or 80.7% of revenue in the third quarter of last year.
The Company reported a net loss of $316,789, or $0.01 per diluted share, for the quarter compared to net income of $4,224,622, or $0.09 per diluted share, for the same period a year ago.
This news release refers to certain financial performance measures that are not defined by and do not have a standardized meaning under International Financial Reporting Standards (termed “non-IFRS measures“). Non-IFRS measures are used by management to assess the financial and operational performance of Amcomri. The Company believes that these non-IFRS measures, in addition to conventional measures prepared in accordance with International Financial Reporting Standards, enable investors to evaluate Amcomri’s operating results, underlying performance and prospects in a similar manner to the Company’s management. As there are no standardized methods of calculating these non-IFRS measures, Amcomri’s approach may differ from those used by others, and accordingly, the use of these measures may not be directly comparable. Accordingly, these non-IFRS measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with International Financial Reporting Standards.
Amcomri defines EBITDA as net income before interest, taxes, depreciation and amortization. EBITDA is intended to provide a proxy for Amcomri’s operating cash flow and is widely used by industry analysts to compare companies.
Reconciliation of Adjusted EBITDA to Net Income
|Three months ended||Nine months ended|
|September 30, 2022||September 30, 2021||September 30, 2022||September 30, 2021|
|Amortization and depreciation||$327,173||$142,450||$1,046,999||$824,138|
|Share based payments||$410,805||–||$415,545||–|
|Impairment – film distribution rights||$886,426||–||$886,426||$819,652|
This press release contains statements which constitute “forward-looking statements” and “forward-looking information” within the meaning of applicable securities laws (collectively, “forward-looking statements”), including statements regarding the Company’s intention to complete additional acquisitions, the future performance of Abacus Media Rights, the cinematic release of Left Behind: Rise of the Antichrist, the timing of release of the Company’s films and the plans, intentions, beliefs and current expectations of the Company with respect to future business activities and operating performance. Forward-looking statements are often identified by the words “may”, “would”, “could”, “should”, “will”, “intend”, “plan”, “anticipate”, “believe”, “estimate”, “expect” or similar expressions.
Investors are cautioned that forward-looking statements are not based on historical facts but instead reflect the Company’s expectations, estimates or projections concerning future results or events based on the opinions, assumptions and estimates of management considered reasonable at the date the statements are made. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, such statements involve risks and uncertainties, and undue reliance should not be placed thereon, as unknown or unpredictable factors could have material adverse effects on future results, performance or achievements of the Company. Among the key factors that could cause actual results to differ materially from those projected in the forward-looking statements are the following: changes in general economic, business and political conditions, including changes in the financial markets; changes in applicable laws and regulations both locally and in foreign jurisdictions; compliance with extensive government regulation; the risks and uncertainties associated with foreign markets; and those risks and uncertainties that are described in the section entitled “Risk Factors” in the Company’s annual information form dated March 23, 2022, and available under the Company’s profile on SEDAR at www.sedar.com. These forward-looking statements may be affected by risks and uncertainties in the business of the Company and general market conditions, including COVID-19.
Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. Although the Company has attempted to identify important risks, uncertainties and factors which could cause actual results to differ materially, there may be others that cause results not to be as anticipated, estimated or intended and such changes could be material. All of the forward-looking statement contained in this press release are qualified by the foregoing cautionary statements, and there can be no guarantee that the results or developments that we anticipate will be realized or, even if substantially realized, that they will have the expected consequences or effects on our business, financial condition or results of operation. Unless otherwise noted or the context otherwise indicates, the forward-looking statements contained herein are provided as of the date hereof, and the Company does not intend, and does not assume any obligation, to update the forward-looking statements except as otherwise required by applicable law.
Investors are cautioned that, trading in the securities of the Company should be considered highly speculative. For a more detailed discussion such risks and uncertainties, please see the section entitled “Risk Factors” in the Company’s annual information form dated March 23, 2022, and available under the Company’s profile on SEDAR at www.sedar.com.
About Amcomri Entertainment Inc.
Amcomri Entertainment Inc. (NEO: AMEN) (Frankfurt: 25Y0) provides global distribution capabilities for independent movie, documentary and TV series producers as well as for its own in-house productions. With decades of experience across all key media platforms, Amcomri is rapidly becoming the go-to team for independent producers seeking the broadest possible audience for their productions. The Amcomri Entertainment Inc. group of companies includes 101 Films, 101 Films International, Hollywood Classics International, Amcomri Productions, Appreciated Media Global, Amcomri Productions and Abacus Media Rights.