Integration Activities Positively Impacted Operating Cost Structure; On Track to Achieve Annualized Cost Savings in the Range of $8 to $10 Million by Year-End 2014 Driven by Efficiency Program Synergies.
TORONTO, August 14, 2014 – Mood Media Corporation (“Mood Media” 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 second quarter of 2014 and updated its strategic and operational plans.
- Achieved second quarter revenues of $120 million and EBITDA of $24.0 million;
- Continued to successfully implement global integration and consolidation activities; based upon strong results to date, finalizing synergy target to range of $8 to $10 million in annualized cost savings by year-end 2014;
- Expanded Local Sales organization and delivered new products;
- Reiterated 2014 financial outlook.
“In the second quarter, we continued to relentlessly focus on executing our strategic plan and further strengthened our platform for long-term sustainable growth,” said Steve Richards, President and CEO of Mood Media. “Over the past 10 months we have worked steadfastly to engender a culture of accountability, and the entire Mood Media team is focused on improving the efficiency and consistency of our business. Notably, we are making significant progress on our strategies surrounding Local Sales, product and solutions development, and partnership expansion. During the second quarter, we continued to build out our Local Sales teams in North America and the international markets, launched new compelling services called Mood Mix and Mood Social Wifi and advanced our mobile solutions, all of which we expect will contribute to our future growth. Our cost savings initiatives are also beginning to deliver tangible returns and, based upon our strong execution to date, we are finalizing our annualized cost savings expectations to a range of $8 to $10 million by year-end 2014.
“We are gaining important traction with our visuals and mobile services,” continued Mr. Richards. “In the first half of 2014 we signed our largest U.S. contracts to date and launched our first large-scale mobile promotion in conjunction with a major Premier brand. This positive momentum underscores the strength of our strategy and the results our focused efforts are producing. We believe we have taken consequential steps forward that will allow Mood Media to deliver on its full potential for both our clients and stakeholders. While the complete transformation of Mood Media will be an ongoing effort, we are energized as we take solid strides toward achieving these goals and targets. We look forward to continued success as we focus on building a great Company and realizing the potential we have before us.”
Second Quarter Financial Results
The Company reported Q2 revenues of $120 million and EBITDA of $24 million. Net loss per share from continuing operations was ($0.18) compared with net loss of ($0.05) in the prior-year period. The Company’s second quarter revenue and EBITDA performance was impacted by the sale of its Latin American residential operation, the revised terms of its affiliate agreement, lower equipment and recurring sales, and lower performance at Technomedia and BIS. These factors were partially offset by the benefits of integration and synergy programs that produced a reduction of $3.5 million in operating expenses in its North American and International operations for the quarter; however, these operating expense reductions were partially offset by increases due to the foreign exchange impact and expenses in the Company’s BIS subsidiary.
Other expense totaled $10 million in the quarter compared with $8 million in the prior year. Other expense in the quarter related to restructuring, transaction and settlement expenses and was partially offset by gains on sale of non-core assets. Restructuring expense pertains to the Company’s integration and synergy program. Transaction and settlement expenses relate to the cost of resolving amounts in connection with past acquisitions.