Dolphin Entertainment Announces Record Quarterly Revenue of $12.0 Million and Adjusted Operating Income of $0.3 Million in Q4
- Record revenue of $12.0 million in Q4 2023, an 8% increase year over year.
- Positive Adjusted Operating Income of $0.3 million despite industry-wide strikes.
- Acquisition of Special Projects to enhance talent booking, creative content, and event production.
- Launch of new divisions in Skin Care & Beauty and Young Adult categories.
- Upcoming milestones include product launches with A-list celebrities and live events announcement.
- Focus on sustained growth through synergy between companies and marketing ventures.
- Operating expenses of $20.0 million in Q4 2023, including nonrecurring expenses and impairments.
- Net loss of $9.6 million in Q4 2023, with various nonrecurring expenses impacting the bottom line.
- Loss per share of $0.54 in Q4 2023, based on weighted average shares outstanding.
- Cash and cash equivalents of $6.4 million as of December 31, 2023.
Insights
The expansion into new verticals by Dolphin Entertainment suggests strategic diversification, which could potentially hedge against volatility in their core markets. The acquisition of Special Projects and the introduction of new divisions within The Digital Dept. indicate an attempt to capture additional market share and create new revenue streams. This is consistent with industry trends where companies seek to leverage synergies between different segments of their business.
However, the reported net loss of $9.6 million for Q4 2023, despite an increase in revenue, raises concerns about the company's cost management and profitability. The substantial nonrecurring expenses, including write-offs and impairments, suggest that Dolphin may be in a transitional phase, cleaning up its balance sheet to set the stage for future growth. While these one-time costs can explain the net loss, it's important for investors to monitor whether such expenses are truly nonrecurring or indicative of deeper issues.
Dolphin Entertainment's reported 8% year-over-year revenue growth is modest and reflects some resilience in the face of industry strikes. However, the Adjusted Operating Income of $0.3 million, while positive, is relatively small compared to the total revenue, indicating slim operating margins. Investors should be cautious about the company's ability to scale its profitability, especially given the significant operating expenses of $20.0 million for the quarter.
The company's strategy of not requiring cash investment for ownership stakes in various ventures could be a double-edged sword. It minimizes cash outlays but could also result in diluted returns or increased risk exposure if these ventures do not perform as expected. The mention of sustained growth in revenue and Adjusted Operating Income is promising, but investors will need concrete evidence of this trajectory in future financial statements.
The strategic moves by Dolphin Entertainment to diversify into skin care and beauty within influencer marketing, as well as establishing a young adult division, reflect an understanding of current market trends where cross-industry collaboration and targeted demographics are key. The entertainment industry increasingly relies on such cross-sector initiatives to drive growth and engagement, particularly with younger audiences who gravitate towards digital content and influencers.
The success of their PR firms at major award events like the Academy Awards and Golden Globes, along with the Grammy-winning clients of Shore Fire Media, demonstrates Dolphin's strong position in the entertainment PR space. This reputation could bolster their ability to successfully market new ventures. However, the true test will be their ability to translate these successes into profitable ventures without incurring additional financial strain.
Expands TAM by entering multiple new verticals in Q4 2023, and 2024, highlighted by:
October 2023 Acquisition of Premiere Talent Booking, Creative Content, and Event Agency, SPECIAL PROJECTS
January 2024 Introduction of Skin Care & Beauty Division within Influencer Marketing and Talent Management subsidiary The Digital Dept.
February 2024 Launch of Young Adult Division within The Digital Dept.
MIAMI, FL / ACCESSWIRE / March 28, 2024 / Dolphin Entertainment, Inc. (NASDAQ:DLPN), a leading entertainment marketing and premium content production company, announces its financial results for the fourth quarter ended December 31, 2023.
Bill O'Dowd, CEO of Dolphin Entertainment commented:
"In Q4 2023 Dolphin achieved record revenue of
Now we turn our attention to delivering synergy and organic growth between our companies, and to marketing the Ventures in which we have ownership stakes. This work has already started, and some big milestones will be achieved in the next few weeks.
- 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.
- Q2 will also see the launch of the first product ideated by Dolphin that is in partnership with one of the A-list celebrities on our talent rosters.
- 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.
Content, consumer products and live events will be the cornerstones of our Ventures, and with Special Projects' expertise in curated, celebrity-inclusive live events, we now have the capability to launch Ventures across all 3 categories of focus. Importantly, we expect Dolphin will receive ownership stakes in the majority of these Ventures without the requirement of a cash investment.
Thus, with a focus on organic growth amongst our best-in-class marketing companies, and the launch of exciting Ventures in a steady cadence, we believe we're poised for sustained growth in both revenue and Adjusted Operating Income (the financial metric by which we measure ourselves)."
Q4 2023 and Recent Highlights
- Total revenue for the fourth quarter ended December 31 2023 was
$12.0 million , an increase of8% over the same period in 2022. - Adjusted operating income(1) of
$0.3 million for the three months ended December 31, 2023 as compared to$0.1 million of adjusted operating income(1) for the same period in 2022. - Operating expenses for the fourth quarter of 2023 were
$20.0 million , including depreciation and amortization of$0.6 million and nonrecurring expenses of (i)$4.1 million to write off notes receivable, (ii)$3.0 million impairment of goodwill, (iii)$0.1 million of acquisition related costs and (iv)$0.1 million impairment of capitalized production costs. Operating expense for the fourth quarter of 2022 were$14.1 million , including depreciation and amortization of$0.5 million and nonrecurring expenses of (i) 0.9 million impairment of goodwill (ii)$0.2 million of acquisition related costs and (iii)$1.4 million of changes in fair value of contingent consideration. - Net loss for the quarter was
$9.6 including depreciation and amortization of$0.6 million , interest expense of$1.0 million ,$0.7 million of equity losses in unconsolidated affiliates, and nonrecurring expenses of (i)$4.1 million to write off notes receivable, (ii)$3.0 million impairment of goodwill, (iii)$0.1 million of acquisition related costs and (iv)$0.1 million impairment of capitalized production costs. Net loss for the same period in prior year was$3.3 million including depreciation and amortization of$0.5 million , interest expense of$0.2 million , equity losses in unconsolidated affiliates of$0.1 million and nonrecurring expenses of (i) 0.9 million impairment of goodwill, (ii)$0.2 million of acquisition related costs and (iii)$1.4 million of changes in fair value of contingent consideration. - Loss per share was
$0.54 per share based on 17,632,822 weighted average shares outstanding for both basic loss per share and fully diluted loss per share for the three months ended December 31, 2023. Loss per share was$0.29 per share based on 11,256,578 weighted average shares outstanding for both basic loss per share and fully diluted loss per share for the three months ended December 31, 2022. - Cash and cash equivalents of
$6.4 million as of December 31, 2023, as compared to$6.1 million as of December 31, 2022.
(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.
- Dolphin acquired Special Projects, the leading agency in talent booking, creative content, and event production. With a client roster of world-class brands in the media, entertainment, fashion, and luxury sectors, Special Projects joins preeminent PR firms 42West, Shore Fire Media and The Door, influencer marketing agency The Digital Department, and content studio Viewpoint Creative in the Dolphin Entertainment collection of specialty agencies.
- 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
- 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
- Marked eight consecutive years representing the Food Network New York City Wine & Food Festival presented by Capital One
- Added new client Giadzy from Giada De Laurentiis the Emmy-award winning television personality, New York Times bestselling cookbook author, restaurateur and entrepreneur, to its growing roster of elite culinary clients and lifestyle 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.
- Hosted BRANDEdit Holiday Showroom in Hollywood, featuring 150+ creators testing and sharing beauty, wellness, and lifestyle essentials with their audience.
- 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
- Special Projects
- Partnered once more with The Academy Museum of Motion Pictures, as the talent relations partner for its third annual gala
- Continued its ongoing collaboration as the Talent Booking Partner and Entertainment Consultant for Town & Country's Annual Philanthropy Summit
- Celebrated its continued partnership as the Talent Booking Partner and Entertainment Consultant for WSJ. Magazine's Innovator Awards
- In February, made its mark on New York Fashion Week collaborating with CHANEL, Gucci and Valentino on their respective boutique openings and events
- Viewpoint Creative
- Announced its extensive partnership with the Massachusetts State Lottery, specializing in digital graphic design and animation services.
- Received Four Muse Awards for extraordinary craft that shapes compelling narratives and leaves a lasting impact on audiences.
Conference Call Information
To participate in this event, dial in approximately 5 to 10 minutes before the beginning of the call.
Date: March 28, 2024
Time: 4:30pm ET
Toll Free: 888-506-0062 International: 973-528-0011 Participant Access Code: 744698
Webcast: https://www.webcaster4.com/Webcast/Page/2225/50241
Replay
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About Dolphin Entertainment, Inc.
Dolphin Entertainment is a leading independent entertainment marketing and production company. Through our subsidiaries 42West, The Door and Shore Fire Media, we provide expert strategic marketing and publicity services to many of the top brands, both individual and corporate, in the film, television, music, gaming and hospitality industries. All three PR firms have been ranked among the most recent Observer's "Power 50" PR Firms in the United States. Viewpoint Creative, The Digital Dept. complement their efforts with full-service creative branding and production capabilities as well as social media and influencer marketing services. Special Projects, Dolphin's most recent acquisition, provides talent booking services and event production for high-end clients across 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, and has recently 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
Consolidated Balance Sheets
As of December 31, 2023 and 2022
(unaudited)
| 2023 | 2022 | |||||||
ASSETS | ||||||||
Current | ||||||||
Cash and cash equivalents | $ | 6,432,731 | $ | 6,069,889 | ||||
Restricted cash | 1,127,960 | 1,127,960 | ||||||
Accounts receivable: | ||||||||
Trade, net of allowance of | 5,817,615 | 6,162,472 | ||||||
Other receivables | 6,643,960 | 5,552,993 | ||||||
Notes receivable | - | 4,426,700 | ||||||
Other current assets | 701,335 | 523,812 | ||||||
Total current assets | 20,723,601 | 23,863,826 | ||||||
Capitalized production costs, net | 2,295,275 | 1,598,412 | ||||||
Employee receivable | 796,085 | 604,085 | ||||||
Right-of-use assets | 5,599,736 | 7,341,045 | ||||||
Goodwill | 25,220,085 | 29,314,083 | ||||||
Intangible assets, net | 11,209,664 | 9,884,336 | ||||||
Property, equipment and leasehold improvements, net | 194,223 | 293,206 | ||||||
Other long-term assets | 216,305 | 2,477,839 | ||||||
Total Assets | $ | 66,254,974 | $ | 75,376,832 | ||||
LIABILITIES | ||||||||
Current Accounts payable | $ | 6,892,349 | $ | 4,798,221 | ||||
Term loan, current portion | 980,651 | 408,905 | ||||||
Revolving line of credit | 400,000 | - | ||||||
Notes payable, current portion | 3,500,000 | 3,868,960 | ||||||
Contingent consideration | - | 500,000 | ||||||
Accrued interest - related party | 1,718,009 | 1,744,723 | ||||||
Accrued compensation - related party | 2,625,000 | 2,625,000 | ||||||
Lease liability, current portion | 2,192,213 | 2,073,547 | ||||||
Deferred revenue | 1,451,709 | 1,641,459 | ||||||
Other current liabilities | 7,694,114 | 7,626,836 | ||||||
Total current liabilities | 27,454,045 | 25,287,651 | ||||||
Noncurrent | ||||||||
Term loan, noncurrent portion | 4,501,963 | 2,458,687 | ||||||
Notes payable, noncurrent portion | 3,380,000 | 500,000 | ||||||
Convertible notes payable | 5,100,000 | 5,050,000 | ||||||
Convertible notes payable at fair value | 355,000 | 343,556 | ||||||
Loan from related party | 1,107,873 | 1,107,873 | ||||||
Contingent consideration | - | 238,821 | ||||||
Lease liability | 4,068,642 | 6,012,049 | ||||||
Deferred tax liability | 306,691 | 253,188 | ||||||
Warrant liability | 5,000 | 15,000 | ||||||
Other noncurrent liabilities | 18,915 | 18,915 | ||||||
Total Liabilities | 46,298,129 | 41,285,740 | ||||||
STOCKHOLDERS' EQUITY | ||||||||
Preferred Stock, Series C, | 1,000 | 1,000 | ||||||
Common stock, | 273,293 | 185,110 | ||||||
Additional paid in capital | 153,293,756 | 143,119,461 | ||||||
Accumulated deficit | (133,611,204 | ) | (109,214,479 | ) | ||||
Total Stockholders' Equity | 19,956,845 | 34,091,092 | ||||||
Total Liabilities and Stockholders' Equity | $ | 66,254,974 | $ | 75,376,832 | ||||
DOLPHIN ENTERTAINMENT, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
For the years ended December 31, 2023 and 2022
(unaudited)
| 2023 | 2022 | |||||||
Revenues | $ | 43,123,075 | $ | 40,505,558 | ||||
Expenses: | ||||||||
Direct costs | 946,962 | 3,566,336 | ||||||
Payroll and benefits | 35,030,257 | 28,947,730 | ||||||
Selling, general and administrative | 8,434,549 | 6,572,020 | ||||||
Acquisition costs | 116,151 | 480,939 | ||||||
Impairment of goodwill | 9,484,215 | 906,337 | ||||||
Impairment of intangible assets | 341,417 | - | ||||||
Write-off of notes receivables | 4,108,080 | - | ||||||
Change in fair value of contingent consideration | 33,226 | (47,285 | ) | |||||
Depreciation and amortization | 2,253,619 | 1,751,211 | ||||||
Legal and professional | 2,485,096 | 2,903,412 | ||||||
Total expenses | 63,233,572 | 45,080,700 | ||||||
Loss from operations | (20,110,497 | ) | (4,575,142 | ) | ||||
Other (expenses) income: | ||||||||
Change in fair value of convertible notes | (11,444 | ) | 654,579 | |||||
Change in fair value of warrants | 10,000 | 120,000 | ||||||
Interest income | 2,877 | 309,012 | ||||||
Interest expense | (2,085,107 | ) | (864,814 | ) | ||||
Total other income (expense), net | (2,083,674 | ) | 218,777 | |||||
Loss before income taxes and equity in losses of unconsolidated affiliates | $ | (22,194,171 | ) | $ | (4,356,365 | ) | ||
Income tax expense | (53,504 | ) | (176,981 | ) | ||||
Net loss before equity in losses of unconsolidated affiliates | (22,247,675 | ) | (4,533,346 | ) | ||||
Equity in losses of unconsolidated affiliates | (2,149,050 | ) | (246,789 | ) | ||||
Net loss | $ | (24,396,725 | ) | $ | (4,780,135 | ) | ||
Loss per share: | ||||||||
Basic | $ | (1.69 | ) | $ | (0.49 | ) | ||
Diluted | $ | (1.69 | ) | $ | (0.56 | ) | ||
Weighted average number of shares used in per share calculation | ||||||||
Basic | 14,413,154 | 9,799,021 | ||||||
Diluted | 14,413,154 | 9,926,926 | ||||||
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
(unaudited)
| For the three months ended December 31, | ||||||||
| 2023 | 2022 | |||||||
Revenues (GAAP) | $ | 12,022,208 | $ | 11,138,810 | ||||
Expenses: | ||||||||
Direct costs | 325,513 | 625,292 | ||||||
Payroll and benefits | 8,915,376 | 8,000,199 | ||||||
Selling, general and administrative | 2,410,595 | 1,927,756 | ||||||
Acquisition costs | 107,328 | 165,139 | ||||||
Impairment of goodwill | 2,966,815 | 906,337 | ||||||
Write-off of notes receivables | 4,108,080 | - | ||||||
Change in fair value of contingent consideration | - | 1,392,493 | ||||||
Depreciation and amortization | 640,843 | 502,590 | ||||||
Legal and professional | 530,059 | 585,612 | ||||||
Total expenses (GAAP) | 20,004,609 | 14,105,418 | ||||||
Loss from operations (GAAP) | $ | (7,982,401 | ) | $ | (2,966,608 | ) | ||
Adjustments to GAAP measure: | ||||||||
Acquisition costs | 107,328 | 165,139 | ||||||
Impairment of goodwill | 2,966,815 | 906,337 | ||||||
Write-off of notes receivables | 4,108,080 | - | ||||||
Change in fair value of contingent consideration | - | 1,392,493 | ||||||
Depreciation and amortization | 640,843 | 502,590 | ||||||
Bad debt expense | 353,062 | 64,840 | ||||||
Impairment of capitalized production costs | 25,000 | - | ||||||
Stock compensation | 86,788 | 48,946 | ||||||
| Income from operations (non-GAAP) | $ | 305,515 | $ | 113,737 | ||||
SOURCE: Dolphin Entertainment, Inc.
View the original press release on accesswire.com
FAQ
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