|By Business Wire||
|March 27, 2014 07:02 AM EDT||
SFX Entertainment, Inc. (NASDAQ:SFXE) today reported financial results for the twelve and three months ended December 31, 2013.
Revenue for the twelve and three months ended December 31, 2013 totaled $170.5 million and $84.2 million, respectively. Direct costs for the twelve and three months ended December 31, 2013 totaled $140.1 million and $65.1 million, respectively. Net loss for the twelve and three month periods was $111.9 million and $39.2 million, or $(1.73) and $(0.48) per share, respectively. Per share results for the twelve and three month periods are based on 64.7 million and 81.2 million diluted weighted average shares outstanding, respectively.
SFX completed a series of acquisitions in the fourth quarter of 2014, following its initial public offering. Pro Forma Revenue (a non-GAAP measure, see definition and reconciliation below) for the twelve and three months ended December 31, 2013 was $313.6 million and $92.6 million, respectively, while Pro Forma Adjusted EBITDA (a non-GAAP measure, see definition and reconciliation below) was $23.6 million and $3.6 million, respectively.
“Our operating and financial accomplishments in 2013 and 2014 to date are a gratifying testimonial to our people and our vision,” commented Robert FX Sillerman, Chairman and CEO of SFX. “The number of major festivals already scheduled for 2014 is in excess of 65, representing a 20% increase from the 2013 schedule. The majority of these festivals are new editions of known, successful events. We're also looking forward to completely new festival experiences, including the five Corona Sunset events and the ‘Don’t Let Daddy Know’ event created by ID&T and our partners.
“At the same time, we’re making important progress with our marketing and sponsorship initiatives having already booked over $40.0 million of 2014 partnership EBITDA in just the first three months of this year. This represents the approximate financial analyst forecasts for EBITDA from this source for 2014. In addition to the previously announced Clear Channel and AB InBev marketing partnerships, we will shortly introduce a global access and invitation program powered by a financial services firm as well as an expanded relationship with an existing partner. This transformative program, which will be launched in time for this year's heavy festival season, will be introduced at a major event featuring two superstar DJs, hosted by SFX’s Beatport, and distributed worldwide through multiple media outlets. Clearly the decision we made to defer short term deals for these multi-year partnerships will create sustainable long-term value for shareholders.”
For 2013, Pro Forma Group attendance at festivals rose to nearly 2.5 million, an increase of nearly 35% over the prior year, at our 54 festivals. Total 2013 attendance at festivals and events rose to nearly 4.0 million for the year. In the 2013 fourth quarter, Pro Forma Group festival attendance grew to more than 570,000, an increase of approximately 20% over the same period in 2012, despite a decline from 20 festivals to 15 due to our strategic decision to hold fewer smaller licensed festivals.
SFX achieved several financial and commercial milestones since its last quarterly conference call on November 22, 2013 including:
- Entered into a global marketing partnership arrangement with Anheuser Busch
- Entered into a marketing and content partnership arrangement with Clear Channel
- Completed design and partnership program focused on increased engagement powered by a major financial institution and an existing partner
- Closed acquisitions of Paylogic and B2S and strategic investments in Rock in Rio and elevateDigital
- Announced acquisitions of React Presents and Flavorus which are expected to close in early April 2014
- Closed high yield note offering, raising $220.0 million in gross proceeds
- Closed a new $30.0 million revolver
- Tomorrowland 2014 festival was increased from 1 to 2 weekends with full capacity attendance of 360,000, up from 180,000 in 2013, sold in under 60 minutes
- TomorrowWorld USA went on sale, returning to Chattahoochee, GA in Fall 2014
- Launched new festivals – Mysteryland USA at Bethel (May 24–25) and The Hudson Project at Saugerties (July 11–13)
- Identified and implemented approximately $7.0 million in annual cost savings
The company will host a conference call on Thursday, March 27 at 10:00 a.m. Eastern Time to review the results for the quarter and discuss developments with existing and new partnerships. A slide presentation offering further details about the partnerships will be accessible on March 27, 2014 at 9:50 a.m. Eastern Time through the “Presentations” section of SFX’s website at http://investor.sfxii.com/presentations.
Participants from SFX will include Chief Executive Officer and Chairman of the Board of Directors, Robert FX Sillerman, and Executive Vice President and Chief Financial Officer, Richard Rosenstein. To access the conference call, interested parties may dial 212/231-2907 (domestic and international callers.) Participants can also listen to a live webcast of the call through the “Events” section of SFX’s website at http://investor.sfxii.com/events-calendar. A webcast replay will be available for 90 days following the live event at http://investor.sfxii.com/events-calendar.
Please call five minutes in advance to ensure that you are connected. Questions and answers will be taken only from participants on the conference call. For the webcast, please allow 15 minutes to register, download and install any necessary software.
The following definitions apply to these terms as used throughout this press release:
- Adjusted EBITDA – represents net income (loss) before other income (loss), interest expense, income taxes, depreciation and amortization, non-cash equity-based compensation expense, and non-recurring items, including financing and other transaction costs.
- Pro Forma Group – means (i) SFX, (ii) Beatport, LLC, which was acquired by SFX in March 2013, (iii) the four companies that were included as pending acquisitions in the SFX initial public offering prospectus and which were subsequently acquired by SFX in the fourth quarter of 2013 (including (a) ID&T Holding B.V., (b) i-Motion GmbH Events & Communication, (c) Totem Onelove Group Pty Ltd and Totem Industries Pty Ltd, and (d) Made Event, LLC and EZ Festivals, LLC), (iv) the 75% equity interest of Paylogic acquired by SFX in December 2013, and (v) the 50% equity interest of B2S acquired by SFX in February 2014.
- Pro Forma Adjusted EBITDA – represents Adjusted EBITDA (as defined above) of the Pro Forma Group.
- Pro Forma Revenue – represents all revenue of the Pro Forma Group.
Non-GAAP Financial Measures
We prepare our financial statements in accordance with Generally Accepted Accounting Principles (“GAAP”). Within this press release, we make reference to Adjusted EBITDA, Pro Forma Adjusted EBITDA, and Pro Forma Revenue which are non-GAAP financial measures. The Company includes these non-GAAP financial measures because management believes they are useful to investors in that they provide for greater transparency with respect to supplemental information used by management in its financial and operational decision making.
Management uses Adjusted EBITDA to convey supplemental information to investors regarding the Company’s performance excluding the impact of certain non-cash charges, costs associated with our initial public offering and other special items that can affect the comparability of results from quarter to quarter. In particular, Adjusted EBITDA is a key measure used by our management and board of directors to understand and evaluate our core operating performance and trends, to prepare and approve our annual budget, and to develop short- and long-term operational plans. Of note, the elimination of certain expenses in calculating Adjusted EBITDA can provide a useful measure for period-to-period comparisons of our core business. In addition, the Company believes that Pro Forma Adjusted EBITDA and Pro Forma Revenue present important information to investors regarding the current business, prospects and financial condition of the Company that would not otherwise be available.
Accordingly, the Company believes the presentation of these non-GAAP financial measures, when used in conjunction with GAAP financial measures, is a useful financial analysis tool that can assist investors in assessing the Company’s operating performance and underlying prospects. This analysis should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. This analysis, as well as the other information in this press release, should be read in conjunction with the Company’s financial statements and footnotes contained in the documents that the Company files with the U.S. Securities and Exchange Commission. The non-GAAP financial measures used by the Company in this press release may be different from the methods used by other companies. For more information on the Non-GAAP financial measures, please see the Reconciliation of GAAP financial measures to Non-GAAP financial measures table in the press release.
About SFX Entertainment
SFX Entertainment, Inc. is the largest global producer of live events and digital entertainment content focused exclusively on electronic music culture (EMC) and other world-class festivals. SFX's mission is to provide electronic music fans with the best possible live experiences, music discovery, media and digital connectivity. SFX was borne out of the technology revolution and produces and promotes a growing portfolio of live events that includes leading brands such as Tomorrowland, TomorrowWorld, Mysteryland, Sensation, Stereosonic, Electric Zoo, Disco Donnie Presents, Life in Color, Rock in Rio, Nature One, Mayday, Decibel, Q-Dance and has an agreement to acquire React Presents and Flavorus. SFX also operates Beatport, the principal online resource for EMC DJs and a trusted destination for the growing EMC community to discover and stream music, follow DJs and keep abreast of news, information and events, in addition to offering year-round entertainment to EMC fans around the globe through other digital assets.
Forward Looking Statements
This press release contains forward-looking statements regarding our business strategy and plans, which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are only predictions and may differ materially from actual results due to a variety of factors including: our ability to close the acquisition of our planned acquisition targets; our ability to integrate the companies we have acquired and plan to acquire in the future; our belief that the EMC community will grow; our ability to increase the number of festivals and events we produce and their attendance; our ability to pay our debts and meet our liquidity needs; competition; our ability to manage growth and geographically-dispersed operations; and our ability to grow our online properties. We refer you to the documents we file from time to time with the U.S. Securities and Exchange Commission, specifically the section titled “Item 1A. Risk Factors” of our most recent Annual Report filed on Form 10-K and Quarterly Reports on Form 10-Q and our Current Reports on Form 8-K, which contain and identify other important factors that could cause actual results to differ materially from those contained in our projections or forward-looking statements. In addition, any forward-looking statements contained herein are based on assumptions that we believe to be reasonable as of this date. We undertake no obligation to update these statements as a result of new information or future events, except as required by law.
|Summarized Statement of Operations of SFX Entertainment, Inc.|
|($ in thousands, except per share data)|
Three months ended
Twelve months ended
|Selling, general and administrative expenses||38,380||100,382|
|Depreciation and amortization||11,717||24,717|
|Loss before income taxes||(41,725||)||(119,506||)|
|Income tax benefit||1,182||684|
|Consolidated net loss||(40,543||)||(118,822||)|
|Less: Net loss attributable to non-controlling interest||(1,357||)||(6,929||)|
|Net loss attributable to the Company||$||(39,186||)||$||(111,893||)|
|Loss per share - basic & diluted||$||(0.48||)||$||(1.73||)|
|Weighted average shares outstanding - basic & diluted (in thousands)||81,209||64,691|
In accordance with U.S. GAAP the above figures include stock based compensation of $10,119 and $32,806 as well as non-cash interest expense of $3,929 and $14,388 for the three months and year ended December 31, 2013, respectively.
|SFX Entertainment, Inc.|
|Reconciliation of GAAP financial measures to Non-GAAP financial measures|
|(unaudited, $ in thousands)|
|Three Months Ended||Twelve Months Ended|
|December 31,||December 31,|
|Revenue, as reported by SFX||$||84,162||$||170,457|
|Revenue of Pro Forma Group (1)||8,417||143,110|
|Total Pro Forma Revenue||$||92,579||$||313,567|
|Pro Forma Adjusted EBITDA|
|Consolidated net loss||$||(40,543||)||$||(118,822||)|
|Income tax (benefit)||(1,182||)||(684||)|
|Depreciation & amortization||11,717||24,717|
|Other (income) / expense||4,909||5,541|
|Equity based compensation expense||10,119||32,806|
|EBITDA of SFX||(8,750||)||(36,744||)|
|EBITDA of Pro Forma Group (1)||(1,584||)||8,070|
|Other Adjustments (2)||13,925||52,263|
|Total Pro Forma Adjusted EBITDA||$||3,591||$||23,589|
(1) Includes all companies other than SFX (see definition of "Pro Forma Group" in above press release) for the periods prior to SFX ownership. The figures presented were prepared by such Pro Forma Group companies and such companies were not under SFX control for 100% of the time periods presented.
(2) Adjustments include non-recurring expenses, deal costs, recoupable advances, elimination of costs associated with cancellation of third day of Electric Zoo Festival, change to the timing of the recognition of audit fees, legacy losses of platform companies acquired in Q4 and identified/completed cost cuts. In addition, full year includes adjusted EBITDA from 40% ownership of Rock in Rio, which closed February 12, 2014.
Today air travel is a minefield of delays, hassles and customer disappointment. Airlines struggle to revitalize the experience. GE and M2Mi will demonstrate practical examples of how IoT solutions are helping airlines bring back personalization, reduce trip time and improve reliability. In their session at @ThingsExpo, Shyam Varan Nath, Principal Architect with GE, and Dr. Sarah Cooper, M2Mi’s VP Business Development and Engineering, will explore the IoT cloud-based platform technologies drivi...
Jul. 2, 2015 02:00 PM EDT Reads: 984
Containers have changed the mind of IT in DevOps. They enable developers to work with dev, test, stage and production environments identically. Containers provide the right abstraction for microservices and many cloud platforms have integrated them into deployment pipelines. DevOps and Containers together help companies to achieve their business goals faster and more effectively. In his session at DevOps Summit, Ruslan Synytsky, CEO and Co-founder of Jelastic, reviewed the current landscape of...
Jul. 2, 2015 01:45 PM EDT Reads: 2,264
Live Webinar with 451 Research Analyst Peter Christy. Join us on Wednesday July 22, 2015, at 10 am PT / 1 pm ET In a world where users are on the Internet and the applications are in the cloud, how do you maintain your historic SLA with your users? Peter Christy, Research Director, Networks at 451 Research, will discuss this new network paradigm, one in which there is no LAN and no WAN, and discuss what users and network administrators gain and give up when migrating to the agile world of clo...
Jul. 2, 2015 01:36 PM EDT Reads: 213
Manufacturing has widely adopted standardized and automated processes to create designs, build them, and maintain them through their life cycle. However, many modern manufacturing systems go beyond mechanized workflows to introduce empowered workers, flexible collaboration, and rapid iteration. Such behaviors also characterize open source software development and are at the heart of DevOps culture, processes, and tooling.
Jul. 2, 2015 01:15 PM EDT Reads: 667
SYS-CON Events announced today that JFrog, maker of Artifactory, the popular Binary Repository Manager, will exhibit at SYS-CON's @DevOpsSummit Silicon Valley, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Based in California, Israel and France, founded by longtime field-experts, JFrog, creator of Artifactory and Bintray, has provided the market with the first Binary Repository solution and a software distribution social platform.
Jul. 2, 2015 01:00 PM EDT Reads: 1,194
"We got started as search consultants. On the services side of the business we have help organizations save time and save money when they hit issues that everyone more or less hits when their data grows," noted Otis Gospodnetić, Founder of Sematext, in this SYS-CON.tv interview at @DevOpsSummit, held June 9-11, 2015, at the Javits Center in New York City.
Jul. 2, 2015 01:00 PM EDT Reads: 1,023
Internet of Things (IoT) will be a hybrid ecosystem of diverse devices and sensors collaborating with operational and enterprise systems to create the next big application. In their session at @ThingsExpo, Bramh Gupta, founder and CEO of robomq.io, and Fred Yatzeck, principal architect leading product development at robomq.io, discussed how choosing the right middleware and integration strategy from the get-go will enable IoT solution developers to adapt and grow with the industry, while at th...
Jul. 2, 2015 12:00 PM EDT Reads: 2,000
Containers are revolutionizing the way we deploy and maintain our infrastructures, but monitoring and troubleshooting in a containerized environment can still be painful and impractical. Understanding even basic resource usage is difficult – let alone tracking network connections or malicious activity. In his session at DevOps Summit, Gianluca Borello, Sr. Software Engineer at Sysdig, will cover the current state of the art for container monitoring and visibility, including pros / cons and liv...
Jul. 2, 2015 11:50 AM EDT Reads: 362
The last decade was about virtual machines, but the next one is about containers. Containers enable a service to run on any host at any time. Traditional tools are starting to show cracks because they were not designed for this level of application portability. Now is the time to look at new ways to deploy and manage applications at scale. In his session at @DevOpsSummit, Brian “Redbeard” Harrington, a principal architect at CoreOS, will examine how CoreOS helps teams run in production. Attende...
Jul. 2, 2015 11:17 AM EDT Reads: 379
"We have a tagline - "Power in the API Economy." What that means is everything that is built in applications and connected applications is done through APIs," explained Roberto Medrano, Executive Vice President at Akana, in this SYS-CON.tv interview at 16th Cloud Expo, held June 9-11, 2015, at the Javits Center in New York City.
Jul. 2, 2015 11:15 AM EDT Reads: 1,024
The cloud has transformed how we think about software quality. Instead of preventing failures, we must focus on automatic recovery from failure. In other words, resilience trumps traditional quality measures. Continuous delivery models further squeeze traditional notions of quality. Remember the venerable project management Iron Triangle? Among time, scope, and cost, you can only fix two or quality will suffer. Only in today's DevOps world, continuous testing, integration, and deployment upend...
Jul. 2, 2015 11:00 AM EDT Reads: 2,102
Malicious agents are moving faster than the speed of business. Even more worrisome, most companies are relying on legacy approaches to security that are no longer capable of meeting current threats. In the modern cloud, threat diversity is rapidly expanding, necessitating more sophisticated security protocols than those used in the past or in desktop environments. Yet companies are falling for cloud security myths that were truths at one time but have evolved out of existence.
Jul. 2, 2015 11:00 AM EDT Reads: 2,185
IT data is typically silo'd by the various tools in place. Unifying all the log, metric and event data in one analytics platform stops finger pointing and provides the end-to-end correlation. Logs, metrics and custom event data can be joined to tell the holistic story of your software and operations. For example, users can correlate code deploys to system performance to application error codes. In his session at DevOps Summit, Michael Demmer, VP of Engineering at Jut, will discuss how this can...
Jul. 2, 2015 10:46 AM EDT Reads: 342
"A lot of the enterprises that have been using our systems for many years are reaching out to the cloud - the public cloud, the private cloud and hybrid," stated Reuven Harrison, CTO and Co-Founder of Tufin, in this SYS-CON.tv interview at 16th Cloud Expo, held June 9-11, 2015, at the Javits Center in New York City.
Jul. 2, 2015 10:45 AM EDT Reads: 716
The most often asked question post-DevOps introduction is: “How do I get started?” There’s plenty of information on why DevOps is valid and important, but many managers still struggle with simple basics for how to initiate a DevOps program in their business. They struggle with issues related to current organizational inertia, the lack of experience on Continuous Integration/Delivery, understanding where DevOps will affect revenue and budget, etc. In their session at DevOps Summit, JP Morgenthal...
Jul. 2, 2015 10:00 AM EDT Reads: 770