Quarterly Revenue Increased 27% Over Previous Record in Q4 2023.
Adjusted Operating Income increased 236%. From Q4 2023
MIAMI, FL / ACCESSWIRE / May 14, 2024 / Dolphin Entertainment, Inc. (NASDAQ:DLPN), a leading entertainment marketing and premium content production company, announces its financial results for the first quarter ended March 31, 2024.
Bill O'Dowd, CEO of Dolphin Entertainment commented:
"In Q1 2024 Dolphin achieved record revenue of $15.2 million, an increase of 54% year over year, and a significant increase of 27% over our previous record of $12 million in Q4 2023. We also achieved positive Adjusted Operating Income of $1.0 million, an increase of 236% from Q4, 2023.
By concentrating on organic expansion among our top-tier marketing entities and launching complementary Ventures at a steady pace, we believe we are strategically positioned for sustained growth in both revenue generation and Adjusted Operating Income, the crucial financial metric against which we gauge our performance.
Our Ventures will provide us ownership stakes in assets wherein our form of marketing can provide the greatest influence on the likelihood of success --- content creation, consumer products, and live experiences. Notably, we anticipate Dolphin securing ownership stakes in the majority of these endeavors without the necessity of a cash outlay.
Now that our full group of marketing companies has been assembled with the acquisition of Special Projects last October, and we are developing Ventures opportunities in earnest, we expect the amplifying impact will grow significantly as the Dolphin Ventures portfolio expands. We believe this strategy will unlock compounding returns and continuous value creation by sustainably getting paid for services while accumulating equity stakes - again, many times without any capital required from Dolphin.
This is a big week at Dolphin. In addition to posting our first quarterly results as a fully formed group, we have significant Ventures milestones occurring:
- May 15: We launched the first product developed by Dolphin in partnership with one of the A-list celebrities on our talent rosters: Staple Gin, a recipe-driven spirit created by Rachael Ray and crafted in New York's Catskills region. Pre-orders are now available at www.staplegin.com, with shipments starting May 15, 2024, to 43 states and retail rollout underway in New York.
- May 17/23: Our "Blue Angels" documentary, produced under our multi-year partnership with IMAX, will debut in IMAX theaters on May 17 and on Amazon Prime on May 23, just in time for Memorial Day Weekend.
- We are in the final stages of selecting an operating partner for Mastercard Midnight Theatre and anticipate we can make an announcement within the month of May.
- Later in the year, we expect to make the announcement of the first of Dolphin's owned or co-owned live events, to occur in late 2024 or in 2025.
Q1 2024 and Recent Highlights
- Total revenue for the fourth quarter ended March 31 2024 was $15.2 million, an increase of 54% over the same period in 2023.
- Adjusted operating income(1) of $1.0 million for the three months ended March 31, 2024 as compared to adjusted operating loss(1) of $1.9 million for the same period in 2023.
- Operating expenses for the first quarter of 2024 were $15.1 million, including depreciation and amortization of $0.6 million. Operating expense for the first quarter of 2023 were $12.5 million, including depreciation and amortization of $0.5 million.
- Net loss for the quarter was $0.3 million including depreciation and amortization of $0.5 million and interest expense of $0.5 million. Net loss for the same period in prior year was $3.0 million including depreciation and amortization of $0.5 million, interest expense of $0.4 million and equity losses in unconsolidated affiliates of $0.1 million.
- Loss per share was $0.02 per share based on 18,477,825 weighted average shares outstanding for basic loss per share and 18,605,702 weighted average shares for fully diluted loss per share, for the three months ended March 31, 2024. Loss per share was $0.23 per share based on 12,640,285 weighted average shares outstanding for both basic loss per share and fully diluted loss per share for the three months ended March 31, 2023.
- Cash and cash equivalents of $7.5 million as of March 31, 2024, as compared to $7.6 million as of December 31, 31, 2023.
(1)The Company has provided adjusted operating income information that has not been prepared in accordance with GAAP. This measure is defined below in the section "Use of non-GAAP measures."
- 42West
- Rebranded its operating division formerly known as award-winning independent PR agency Bender/Helper Impact (BHI) to Fandoms & Franchises (F&F)
- Helped clients secure four wins at the 96th Academy Awards, and receive two dozen nominations
- Drove performance and global interest for critical, commercial and Awards-season successes 'The Boy and the Heron' and 'Godzilla Minus One'
- 42West and Shore Fire Media
- Conducted more than half a dozen PR campaigns for clients at the 2024 SXSW Film Festival
- Scored big at the 81st Golden Globes, supporting clients in the attainment of multiple awards and more than a dozen nominations
- Shore Fire Media
- Announced the promotion of five of its staff to key leadership positions - reflecting the company's growth and expanding roster of artists, brands, businesses, talent, creators, events and more since its acquisition by Dolphin Entertainment
- Represented clients who received a collective nine Grammy Awards, and over two dozen nominations, in a broad range of categories - including Pop, R&B, Folk, Jazz, Gospel, Roots, Arrangement, Instruments and Vocals, and Best Boxed or Special Limited Edition Package - highlighting the diversity of its roster across a multitude of genres and disciplines.
- The Door
- Dolphin Entertainment partnered with Rachael Ray, long-time client of The Door, as creative marketing partner for her new Staple Gin. Staple Gin launched in May 2024 with Do Good Spirits, leveraging The Door's expertise in marketing wines, spirits, and culinary brands.
- The Digital Dept.
- Partnered with Glowlab to introduce a specialized talent management division catering to skincare experts and dermatologists, led by Glowlab's Founder, Susan Yara, who also founded Naturium, which was acquired by E.L.F. Beauty for $355 million in September 2023.
- Established a Young Adult (YA) division in partnership with The Osbrink Agency, focusing on nurturing the creativity of young creators from Gen Z and Gen Alpha in the digital space.
- Special Projects
- Made its mark on New York Fashion Week collaborating with CHANEL, Gucci and Valentino on their respective boutique openings and events
Conference Call Information
To participate in this event, dial in approximately 5 to 10 minutes before the beginning of the call.
Date: May 14, 2024
Time: 4:30pm ET.
Toll Free: 888-506-0062 International: 973-528-0011 Participant Access Code: 128621
Webcast: https://www.webcaster4.com/Webcast/Page/2225/50546
Replay
Toll Free: 877-481-4010 International: 919-882-2331 Replay Passcode: 50546
Webcast Replay: https://www.webcaster4.com/Webcast/Page/2225/50546
About Dolphin Entertainment, Inc.
Dolphin Entertainment is a prominent independent entertainment marketing and production company. Through its subsidiaries, 42West, The Door, and Shore Fire Media, the company offers expert strategic marketing and publicity services to top brands in the film, television, music, gaming, and hospitality industries. All three PR firms have consistently ranked among the top 50 PR firms in the United States. Viewpoint Creative and The Digital Dept. complement these efforts with complete creative branding and production capabilities, as well as social media and influencer marketing services. Dolphin's most recent acquisition, Special Projects, provides talent booking services and event production for high-end clients in the media, entertainment, and fashion industries. Dolphin's legacy content production business, founded by Emmy-nominated CEO Bill O'Dowd, has produced multiple feature films and award-winning digital series. Dolphin has also entered into a multi-year agreement with IMAX to co-produce feature documentaries. To learn more, visit: https://www.dolphinentertainment.com.
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 Inc.'s offering of common stock as well as 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. Dolphin Entertainment undertakes no obligation to update publicly any forward-looking statements as a result of new information, future events, or otherwise, except as required by applicable law.
Contact:
James Carbonara/Hayden IR
(646)-755-7412
james@haydenir.com
DOLPHIN ENTERTAINMENT, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited)
| As of March 31, 2024 | As of December 31, 2023 | |||||||
ASSETS |
||||||||
Current |
||||||||
Cash and cash equivalents |
$ | 6,384,459 | $ | 6,432,731 | ||||
Restricted cash |
1,127,960 | 1,127,960 | ||||||
Accounts receivable: |
||||||||
Trade, net of allowance of $1,679,972 and $1,456,752, respectively |
8,954,785 | 5,817,615 | ||||||
Other receivables |
5,045,671 | 6,643,960 | ||||||
Other current assets |
737,646 | 701,335 | ||||||
Total current assets |
22,250,521 | 20,723,601 | ||||||
Capitalized production costs, net |
529,215 | 2,295,275 | ||||||
Employee receivable |
844,085 | 796,085 | ||||||
Right-of-use assets |
5,149,182 | 5,599,736 | ||||||
Goodwill |
25,220,085 | 25,220,085 | ||||||
Intangible assets, net |
10,678,817 | 11,209,664 | ||||||
Property, equipment and leasehold improvements, net |
171,968 | 194,223 | ||||||
Other long-term assets |
216,305 | 216,305 | ||||||
Total Assets |
$ | 65,060,178 | $ | 66,254,974 | ||||
LIABILITIES |
||||||||
|
Current
Accounts payable
|
$ | 2,215,312 | $ | 6,892,349 | ||||
Term loan, current portion |
1,022,228 | 980,651 | ||||||
Revolving line of credit |
400,000 | 400,000 | ||||||
Notes payable, current portion |
3,500,000 | 3,500,000 | ||||||
Accrued interest - related party |
1,629,574 | 1,718,009 | ||||||
Accrued compensation - related party |
2,625,000 | 2,625,000 | ||||||
Lease liability, current portion |
2,085,331 | 2,192,213 | ||||||
Deferred revenue |
988,056 | 1,451,709 | ||||||
Other current liabilities |
11,270,739 | 7,694,114 | ||||||
Total current liabilities |
25,736,240 | 27,454,045 | ||||||
Noncurrent |
||||||||
Term loan, noncurrent portion |
4,222,270 | 4,501,963 | ||||||
Notes payable, noncurrent portion |
3,380,000 | 3,380,000 | ||||||
Convertible notes payable |
5,100,000 | 5,100,000 | ||||||
Convertible notes payable at fair value |
330,000 | 355,000 | ||||||
Loan from related party |
2,007,873 | 1,107,873 | ||||||
Lease liability |
3,666,840 | 4,068,642 | ||||||
Deferred tax liability |
330,232 | 306,691 | ||||||
Warrant liability |
- | 5,000 | ||||||
Other noncurrent liabilities |
18,915 | 18,915 | ||||||
Total Liabilities |
44,792,370 | 46,298,129 | ||||||
STOCKHOLDERS' EQUITY |
||||||||
Preferred Stock, Series C, $0.001 par value, 50,000 shares authorized, 50,000 shares issued and outstanding at March 31, 2024 and December 31, 2023 |
1,000 | 1,000 | ||||||
Common stock, $0.015 par value, 200,000,000 shares authorized, 18,664,453 and 18,219,531 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively |
279,967 | 273,293 | ||||||
Additional paid in capital |
153,924,812 | 153,293,756 | ||||||
Accumulated deficit |
(133,937,971 | ) | (133,611,204 | ) | ||||
Total Stockholders' Equity |
20,267,808 | 19,956,845 | ||||||
Total Liabilities and Stockholders' Equity |
$ | 65,060,178 | $ | 66,254,974 | ||||
DOLPHIN ENTERTAINMENT, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
|
Three Months Ended
March 31,
|
||||||||
| 2024 | 2023 | |||||||
Revenues |
$ | 15,235,892 | $ | 9,891,421 | ||||
Expenses: |
||||||||
Direct costs |
2,319,227 | 218,896 | ||||||
Payroll and benefits |
9,574,251 | 9,054,730 | ||||||
Selling, general and administrative |
1,976,990 | 1,871,937 | ||||||
Depreciation and amortization |
553,103 | 533,096 | ||||||
Change in fair value of contingent consideration |
- | 15,485 | ||||||
Legal and professional |
647,781 | 763,277 | ||||||
Total expenses |
15,071,352 | 12,457,421 | ||||||
Income (loss) from operations |
164,540 | (2,566,000 | ) | |||||
Other (expenses) income: |
||||||||
Change in fair value of convertible note |
25,000 | (10,444 | ) | |||||
Change in fair value of warrants |
5,000 | - | ||||||
Interest income |
5,869 | 102,017 | ||||||
Interest expense |
(503,637 | ) | (355,870 | ) | ||||
Total other (expenses) income, net |
(467,768 | ) | (264,297 | ) | ||||
Loss before income taxes and equity in losses of unconsolidated affiliates |
(303,228 | ) | (2,830,297 | ) | ||||
Income tax expense |
(23,539 | ) | (27,098 | ) | ||||
Net loss before equity in losses of unconsolidated affiliates |
(326,767 | ) | (2,857,395 | ) | ||||
Equity in losses of unconsolidated affiliates |
- | (111,925 | ) | |||||
Net loss |
$ | (326,767 | ) | $ | (2,969,320 | ) | ||
Loss per share: |
||||||||
Basic |
$ | (0.02 | ) | $ | (0.23 | ) | ||
Diluted |
$ | (0.02 | ) | $ | (0.23 | ) | ||
Weighted average number of shares outstanding: |
||||||||
Basic |
18,477,825 | 12,640,285 | ||||||
Diluted |
18,605,702 | 12,640,285 | ||||||
Use of Non-GAAP Financial Measures
In order to provide greater transparency regarding our operating performance, the financial results in this press release refer to a non-GAAP financial measure that involves adjustments to GAAP results. Non-GAAP financial measures exclude certain income and/or expense items that management deems are not directly attributable to the Company's core operating results and/or certain items that are inconsistent in amounts and frequency, making it difficult to perform a meaningful evaluation of our current or past operating performance.
Adjusted operating income or loss is defined by Dolphin as (loss) income from operations before: (i) depreciation and amortization, (ii) write-off of assets, (iii) impairment of goodwill or intangible assets, (iv) acquisition costs, (v) employee stock compensation, (vi) change in fair value of contingent consideration, (vii) bad debt expense and (viii) and impairment of capitalized production costs.
Management believes that the presentation of operating results using this non-GAAP financial measure provides useful supplemental information for investors by providing them with the non-GAAP financial measure used by management for financial and operational decision making, planning and forecasting and in managing the business. This non-GAAP financial measure does not replace the presentation of financial information in accordance with U.S. GAAP financial results, should not be considered a measure of liquidity and is unlikely to be comparable to non-GAAP financial measures provided by other companies.
Reconciliation of GAAP loss from operations to non-GAAP income from operations
| For the three months ended March 31, | ||||||||
| 2024 | 2023 | |||||||
Revenues (GAAP) |
$ | 15,235,892 | $ | 9,891,421 | ||||
Expenses: |
||||||||
Direct costs |
2,319,227 | 218,896 | ||||||
Payroll and benefits |
9,574,251 | 9,054,730 | ||||||
Selling, general and administrative |
1,976,990 | 1,871,937 | ||||||
Change in fair value of contingent consideration |
15,485 | |||||||
Depreciation and amortization |
553,103 | 533,096 | ||||||
Legal and professional |
647,781 | 763,277 | ||||||
Total expenses (GAAP) |
15,071,352 | 12,457,421 | ||||||
Income (loss) from operations (GAAP) |
$ | 164,540 | $ | (2,566,000 | ) | |||
Adjustments to GAAP measure: |
||||||||
Depreciation and amortization |
553,103 | 533,096 | ||||||
Bad debt expense |
204,021 | 75,779 | ||||||
Change in fair value of contingent consideration |
15,485 | |||||||
Stock compensation |
105,761 | 74,641 | ||||||
Income (loss) from operations (non-GAAP) |
$ | 1,027,425 | $ | (1,866,999 | ) | |||
SOURCE: Dolphin Entertainment, Inc.
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