LiveOne Implementing Further Consolidation and Updates Financial Guidance
LiveOne (Nasdaq: LVO) announced a major consolidation plan aiming for over $14 million in annual cost savings. They plan to spin out their PPV business, PPVOne, with an equity distribution to stockholders expected by March 31, 2022. However, the company cancelled the Spring Awakening Excursions: Cancun Awakening festival and postponed another event due to COVID-19 concerns. Updated revenue guidance for Fiscal 2022 is set between $110 million - $112 million, while Fiscal 2023 is projected between $120 million - $140 million.
- Implemented cost and expense reductions totaling over $14 million annually.
- Increase in paid subscribers to over 1,337,000, a net increase of 81,000 since September 2021.
- Anticipates reporting positive adjusted EBITDA in Q1 Fiscal 2023.
- Cancellation of the Spring Awakening Excursions festival due to COVID-19.
- Expected $3 million charge from the Spring Awakening Music Festival due to adverse weather and COVID impacts.
- Updated revenue guidance reflecting potential revenue decrease due to event cancellations.
LOS ANGELES, Dec. 20, 2021 /PRNewswire/ -- LiveOne (Nasdaq: LVO), a global platform for livestream and on-demand audio, video, and podcast/vodcast content in music, comedy, and pop culture, and owner of LiveXLive, PodcastOne, Slacker Radio, React Presents, Gramophone Media, Palm Beach Records and Custom Personalization Solutions, announced today that it is implementing further consolidation amounting to more than
- LiveOne is implementing further cost and expense reductions from both operations and corporate overhead which will increase the previously implemented
$5.6 million of annual cost savings to a total of over$14 million annually. - LiveOne plans to spin-out its existing PPV business, PPVOne, as a separate public company and its plan to distribute a minority portion of the new company's equity to LiveOne's stockholders, anticipated to take place by March 31, 2022.
- Due to the heightened concern of the COVID variants, LiveOne has elected to cancel the planned live music festival "Spring Awakening Excursions: Cancun Awakening" previously scheduled for January 13-17, 2022 and has moved its planned second iteration of the Social Gloves franchise, Self-Made Knockout, from Q4 Fiscal 2022 to Q1 Fiscal 2023.
- LiveOne's recent live EDM music event, Spring Awakening Music Festival: Autumn Equinox held in Chicago in October 2021 ("SAMF"), was seriously impacted by the Delta COVID variant as well as adverse weather which caused the audience to be evacuated due to lightning. LiveOne expects to take a charge of approximately
$3 million in the current Q3 Fiscal 2022. LiveOne is actively pursuing an insurance claim for costs incurred in connection with such festival and expects a material recovery of its costs. - Given the cancellation and rescheduling of planned live events as well as the challenges incurred at the Chicago SAMF, LiveOne is updating its guidance for FY 2022 of revenue between
$110 million -$112 million with ($8 Million ) in Adjusted EBITDA* and for FY 2023 of revenue between$120 -$140 Million with$2 Million -$8 Million in Adjusted EBITDA.* - LiveOne expects to report positive adjusted EBITDA* in Q1 Fiscal 2023 ending June 30, 2022.
- Paid subscribers as of December 15, 2021 increased to over 1,337,000, a net increase of approximately 81,000 as compared to 1,256,000 on September 30, 2021. Included in the total number of subscribers for the reported periods are certain subscribers which are the subject of a contractual dispute. LiveOne is currently not recognizing revenue related to these subscribers.
- As previously announced in January 2021, with the assistance of J.P. Morgan, LiveOne is continuing a process to explore strategic alternatives in order to enhance shareholder value. Potential alternatives may include, among others, a strategic acquisition, divestiture, merger, sale or other form of business combination. There can be no assurance that LiveOne's efforts will result in a specific transaction or any particular outcome or its timing.
LiveOne's CEO and Chairman, Robert Ellin, commented, "Throughout calendar 2021 we have invested over
About LiveOne, Inc.
Headquartered in Los Angeles, California, LiveOne, Inc. (NASDAQ: LVO) (the "Company") is a global talent-first, interactive music, sports, and entertainment subscription platform delivering premium content and livestreams from the world's top artists. The Company has streamed over 1,800 artists since January 2020, a library featuring close to 30 million songs, 500 expertly curated radio stations, 235 podcasts/vodcasts, hundreds of pay-per-views, personalized merchandise, and NFTs business, and has created a valuable connection between brands, fans, and bands. The Company's other major wholly-owned subsidiaries are LiveXLive, PPVOne, Slacker Radio, React Presents, Gramophone Media, Palm Beach Records, Custom Personalization Solutions, and PodcastOne, which generates more than 2.48 billion downloads per year and 300+ episodes distributed per week across a stable of hundreds of top podcasts. The combination of acquisitions and the expansion of products and franchises have secured LiveOne as a top-rated music, entertainment, and media services company. LiveXLive is available on iOS, Android, Roku, Apple TV, and Amazon Fire, and through OTT, STIRR, Sling, and XUMO, in addition to its app, online website, and social channels. For more information, visit www.livexlive.com and follow us on Facebook, Instagram, TikTok, and Twitter at @livexlive.
* About Non-GAAP Financial Measures
To supplement our consolidated financial statements, which are prepared and presented in accordance with the accounting principles generally accepted in the United States of America ("GAAP"), we present Contribution Margin (Loss) and Adjusted Earnings Before Interest Tax Depreciation and Amortization ("Adjusted EBITDA"), which are non-GAAP financial measures, as measures of our performance. The presentation of these non-GAAP financial measures is not intended to be considered in isolation from, or as a substitute for, or superior to, operating loss and or net income (loss) or any other performance measures derived in accordance with GAAP or as an alternative to net cash provided by operating activities or any other measures of our cash flows or liquidity.
We use Contribution Margin (Loss) and Adjusted EBITDA to evaluate the performance of our operating segment. We believe that information about these non-GAAP financial measures assists investors by allowing them to evaluate changes in the operating results of our business separate from non-operational factors that affect operating income (loss) and net income (loss), thus providing insights into both operations and the other factors that affect reported results. Adjusted EBITDA is not calculated or presented in accordance with GAAP. A limitation of the use of Adjusted EBITDA as a performance measure is that it does not reflect the periodic costs of certain amortizing assets used in generating revenue in our business. Accordingly, Adjusted EBITDA should be considered in addition to, and not as a substitute for, operating income (loss), net income (loss), and other measures of financial performance reported in accordance with GAAP. Furthermore, this measure may vary among other companies; thus, Adjusted EBITDA as presented herein may not be comparable to similarly titled measures of other companies.
Contribution Margin (Loss) is defined as Revenue less Cost of Sales. Adjusted EBITDA is defined as earnings before interest, other (income) expense, income tax expense, depreciation and amortization and before (a) non-cash GAAP purchase accounting adjustments for certain deferred revenue and costs, (b) legal, accounting and other professional fees directly attributable to acquisition activity, (c) employee severance payments and third party professional fees directly attributable to acquisition or corporate realignment activities, (d) certain non-recurring expenses associated with legal settlements or reserves for legal settlements in the period that pertain to historical matters that existed at acquired companies prior to their purchase date and a one-time minimum guarantee to effectively terminate a live events distribution agreement post COVID-19, (e) depreciation and amortization (including goodwill impairment, if any), and (f) certain stock-based compensation expense. Management does not consider these costs to be indicative of our core operating results.
With respect to projected full year 2022 and 2023 Adjusted EBITDA, a quantitative reconciliation is not available without unreasonable efforts due to the high variability, complexity and low visibility with respect to purchase accounting adjustments, acquisition-related charges and legal settlement reserves excluded from Adjusted EBITDA. We expect that the variability of these items to have a potentially unpredictable, and potentially significant, impact on our future GAAP financial results.
Forward-Looking Statements
All statements other than statements of historical facts contained in this press release are "forward-looking statements," which may often, but not always, be identified by the use of such words as "may," "might," "will," "will likely result," "would," "should," "estimate," "plan," "project," "forecast," "intend," "expect," "anticipate," "believe," "seek," "continue," "no target" or the negative of such terms or other similar expressions. These statements involve known and unknown risks, uncertainties and other factors, which may cause actual results, performance or achievements to differ materially from those expressed or implied by such statements, including: the Company's reliance on one key customer for a substantial percentage of its revenue; the Company's ability to consummate any proposed financing, acquisition, spin-out, distribution or transaction, the timing of the closing of such proposed event, including the risks that a condition to closing would not be satisfied within the expected timeframe or at all, or that the closing of any proposed financing, acquisition, spin-out, distribution or transaction will not occur or whether any such event will enhance shareholder value; the Company's ability to continue as a going concern; the Company's ability to attract, maintain and increase the number of its users and paid subscribers; the Company identifying, acquiring, securing and developing content; the Company's intent to repurchase shares of its common stock from time to time under its announced stock repurchase program and the timing, price, and quantity of repurchases, if any, under the program; the Company's ability to maintain compliance with certain financial and other covenants; the Company successfully implementing its growth strategy, including relating to its technology platforms and applications; management's relationships with industry stakeholders; the effects of the global Covid-19 pandemic; changes in economic conditions; competition; risks and uncertainties applicable to the businesses of the Company's subsidiaries; and other risks, uncertainties and factors including, but not limited to, those described in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2021, filed with the U.S. Securities and Exchange Commission (the "SEC") on July 14, 2021, the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2021, filed with the SEC on August 16, 2021, the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2021, filed with the SEC on October 29, 2021, and in the Company's other filings and submissions with the SEC. These forward-looking statements speak only as of the date hereof, and the Company disclaims any obligations to update these statements, except as may be required by law. The Company intends that all forward-looking statements be subject to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995.
LiveOne IR Contact:
310.601.2505
ir@liveone.com
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SOURCE LiveOne, Inc.
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