Grows EBITDA Sequentially and Year-Over-Year
Reiterates 2014 EBITDA Guidance
Expects to Achieve Annualized Cost Savings of at Least $9 to $10 Million from Integration and Synergy Activities
TORONTO, November 12, 2014 – Mood Media Corporation (“Mood Media,” “Mood” or “the Company”) (ISIN: CA61534J1057) (TSX:MM / LSE AIM:MM), the world’s largest integrated provider of in-store customer experience solutions, today reported results for the third quarter of 2014 and provided an update on the Company’s progress executing against its strategic and operational plans.
- Mood achieved Q3 revenues of $124.1 million and EBITDA of $26.3 million
- Strong EBITDA performance in Q3:
– EBITDA was up year-over-year and grew nearly 10% sequentially
– Mood’s Q3 EBITDA performance is the best in seven quarters on a pro-forma basis excluding the impact of the sale of the Mood Latin America and Canadian accounts and the impact of Muzak Independent Affiliate settlements
- All four Mood business units, North America, International, Technomedia and BIS, posted sequential gains in EBITDA compared to Q2, and all but BIS achieved revenue increases
- The Company continued to successfully implement its global transformation, integration and consolidation activities; Mood now expects to deliver at least $9 to $10 million in annualized cost savings by year-end 2014, excluding several unrealized opportunities still in the early stages.
- Mood signed a Premier U.S. Visual deal that is 5 times larger than its previous largest U.S. QSR Visual win and 3 times larger than its previous largest U.S. Visual deal
- Mood further expanded its Local Sales team, broadened its sales channels and introduced new and innovative solutions
- The Company reached several significant deals in Mood International and Technomedia resulting from cross-selling initiatives, most notably including an agreement for more than $5 million in equipment and labor sales
- Mood reiterated its 2014 financial outlook to deliver EBITDA that is flat to slightly up compared with 2013 performance
“We are pleased to see that our efforts to improve efficiencies and reduce our cost structure are beginning to bear fruit as indicated by the nearly 10% sequential improvement in EBITDA, as well as the growth we achieved relative to the prior year,” said Steve Richards, President and CEO of Mood Media. “The improvement in our EBITDA is consistent with the expectation for accelerating growth in the back half of 2014 that we outlined earlier in the year and shows that we are on track to achieve our full year EBITDA guidance of flat to slightly up relative to 2013.
“In the third quarter, we made significant progress executing on our transformation initiatives, which are driving expense reductions, enhancing revenues and improving profitability,” continued Mr. Richards. “We generated momentum across our key solution platforms, developed and launched innovative products, such as Mood Social WiFi, and leveraged Mood technology to build new capabilities for our clients and their customers. We continued to make progress building out our Local Sales teams and establishing partnerships that not only broaden our sales distribution channels, but expand our suite of solutions. Notably, we signed several exciting new clients and projects in Visual, Premier and International, and further developed our solid pipeline of opportunities in North America, International and Technomedia. We also advanced our efforts to cross-sell our solutions between Mood entities, which resulted in Mood International and Technomedia landing several significant and exciting deals in the quarter.
“In addition, we made significant progress executing on Waves 2 and 3 of our cost saving program, which we now expect to deliver at least $9 to $10 million in annualized cost savings by the end of 2014, excluding several unrealized opportunities still in their early stages,” continued Mr. Richards. “Looking ahead, we remain focused on investing in opportunities to drive top-line growth and executing on our programs to improve operating margins. Our efforts are delivering results and beginning to demonstrate the power of our operating model and strategy to generate enhanced Mood value and returns. As we head into the fourth quarter and 2015, we believe we are well positioned to drive growth and enhance shareholder value.”
Third Quarter Financial Results
The Company reported Q3 revenues of $124.1 million and EBITDA of $26.3 million, both up sequentially compared with Q2. Net loss per share from continuing operations was ($0.11) compared with net loss per share of ($0.51) in the prior-year period and net loss per share of ($0.18) in Q2. The Company’s third quarter revenue and EBITDA performance was impacted by the sale of its Latin American and Canadian accounts. Before adjusting for these disposals, the Company’s revenues were down 1% and EBITDA grew by $360,000 relative to the prior year. Adjusting for these disposals, the Company’s revenues would have been up 1% and EBITDA would have improved by 5% on an underlying basis relative to the prior year. EBITDA performance was also aided by a $2.8 million reduction in operating expenses relative to the prior year, which was attributable primarily to the positive impact of its integration and synergy programs in its North American, International and head office operations.
Other expense totaled $7.3 million in the quarter compared with $11.5 million in the prior year. Other expense in the quarter was comprised primarily of restructuring expenses pertaining to severance expense in Mood International and BIS related to the Company’s integration and synergy program as well as onerous lease charges.