Integration Activities Make Positive Impact on Operating Cost Structure; On Target to Deliver $8 to 12m in Incremental Annualized Synergies Through Consolidation Efficiencies.
TORONTO, May 8, 2014 – Mood Media Corporation (ISIN: CA61534J1057) (TSX:MM / LSE AIM:MM), the world’s largest integrated provider of in-store customer experience solutions, today reported results for the first quarter of 2014, and updated its strategic and operational plans.
- Achieved first quarter revenues of $123 million and EBITDA of $23.4 million, in-line with Company expectations and previous guidance for full year 2014;
- Continued successfully implementing initiatives focused on integrating and consolidating all Mood operating businesses. Expect to deliver new synergies and generate $8 to $12 million in annualized rate of cost savings by year end 2014;
- Significantly reduced other non-operating expenses;
- Successfully refinanced the Company’s term loan early in the second quarter of 2014, establishing a new facility that provides increased flexibility for its operating strategy, asset dispositions and convertible debenture deleveraging efforts.
“During the first quarter of 2014, we continued to relentlessly pursue our goal of improving operational efficiencies; I am proud that we are successfully laying a strong foundation for long-term growth,” said Steve Richards, President and CEO of Mood Media. “With the completion of our late 2013 Wave 1 cost reductions, we are committed to executing Waves 2 and 3 in 2014. We have made great progress in Q1 and now firmly believe we will deliver annualized cost reductions of $8 to $12 million through incremental synergies via process and consolidation, while also focusing growth efforts via new product delivery, new sales and cross unit selling efforts. Looking ahead, we are in the process of finalizing a set of Wave 4 initiatives slated for implementation in 2015, which we believe will further enhance our operating efficiency and generate additional long-term gains and benefits.”
Mr. Richards continued, “In Q1, we finalized Mood’s leadership structure and implemented executive accountability scorecards to ensure responsibility for effective process management across our global organization. Our enhanced culture of accountability will be an effective tool to drive Mood’s success. Our North American and International teams are ramping their efforts to increase new sales, cross unit sales, and upsell compelling audio, visual and mobile solutions to existing customers, new prospects and new verticals. We believe Mood is well positioned to gain and build upon momentum we are seeing in the marketplace. With the signing of our largest visuals sales contracts to date in Banking and Quick Service Restaurants in North America and the successful launch of Mood:Mix, we are confident that Mood continues to offer the leading products that customers expect from us. The Mood team is more focused than ever on execution and we are confident in our ability to create enhanced value for all stakeholders.”
First Quarter Financial Results
The Company reported Q1 revenues of $123 million and EBITDA of $23.4 million. Net loss per share from continuing operations was ($0.04) compared with net loss of ($0.03) in the prior-year period. The Company’s first quarter revenue and EBITDA performance was impacted by the sale of its Latin American residential operation, the revised terms of its affiliate agreement, and lower equipment and recurring sales, which were partially offset by the benefits of integration and synergy programs, that produced a reduction of $2.2 million in operating expenses for the first quarter.
Other income totaled $0.6 million in the quarter related to restructuring, integration and transaction expenses and compared with other expense of $5.9 million a year earlier. Restructuring and integration expense in the current period included a gain on sale of its Latin American operations of $3.5 million. Excluding this gain, restructuring and transaction expense comprised largely the cost of implementing its integration and synergy efforts, along with legacy expenses related to past acquisitions.