Dolphin Entertainment Reports Third Quarter Financial Results

MIAMI, FL / ACCESSWIRE / November 14, 2019 / Dolphin Entertainment, Inc. (NASDAQ:DLPN), a leading independent entertainment marketing and premium content development company, announces its financial results for the period ended September 30, 2019.

Bill O'Dowd, CEO of Dolphin Entertainment, commented: "We are pleased to share that Dolphin exceeded consensus expectations in both revenue and earnings per share in the third quarter, which we attribute to the increased cross-selling of services between members of our Entertainment Marketing "Super Group." Our investments in these companies have led to our double-digit revenue growth through the first nine months of 2019, and we anticipate positive net income on a going-forward basis. Also, we took important steps on the M&A front, and we expect that we will have our fourth acquisition finished shortly, and that we are on target to complete the acquisition of all 6 "core competency" members of our Entertainment Marketing "Super Group" on schedule within 2020, which we believe will increase our cross-selling opportunities and accelerate growth of both revenues and profits."

Highlights

Total quarterly revenue increased 4% year-over-year to $5,948,056 and nine-month revenue increased 11% to $18,550,936.

Entertainment Publicity and Marketing revenue increased 13% year over year to $18,464,330 for the nine months ended September 30, 2019.

Operating loss for the three months ended September 30, 2019 of $(1,412,171), which included impairments to deferred production costs of Max Steel under the caption "direct costs" of $629,585 and non-cash items from depreciation and amortization of $485,965, compared to operating losses of $(538,840), which included non-cash items from depreciation and amortization of $599,078, for the same period in the prior year.

Net loss before income taxes for the three months ended September 30, 2019 of $(350,831), compared to net loss before income taxes of $(639,306) for the same period in the prior year. The Company does not have an income tax expense or benefit in the current quarter but had an income tax benefit of $819,451 for the three months ended September 30, 2018.

42West and The Door were selected to lead marketing efforts for the 45th annual Saturn Awards.

Veteran PR Professional Jodie Magid Oriol joined 42west As Vice President – New York Entertainment Marketing Division

The Door expanded its national footprint with the launch of Miami office

Closed a $2.1 Million offering of common stock at market, with no warrants issued

Conference Call Information

To participate in this event, dial approximately 5 to 10 minutes before the beginning of the call.
Date, Time: Thursday, November 14, 2019, at 4:30 p.m. ET
Toll-free: 844-369-8770
International: 862-298-0840
Live Webcast: https://www.investornetwork.com/event/presentation/56833

Conference Call Replay Information

The replay will be available beginning approximately 1 hour after the completion of the live event.
Toll-free: 877-481-4010
Reference ID: 56833

About Dolphin Entertainment, Inc.

Dolphin Entertainment, Inc. is a leading independent entertainment marketing and premium content development company. Through our subsidiaries 42West and The Door, we provide expert strategic marketing and publicity services to many of the top brands, both individual and corporate, in the entertainment and hospitality industries. The Door and 42West are both recognized global leaders in PR services for their respective industries and, in December 2017, the New York Observer listed them, respectively, as the third and fourth most powerful PR firms of any kind in the United States. Dolphin's recent acquisition of Viewpoint Creative adds full-service creative branding and production capabilities to our marketing group. Dolphin's legacy content production business, founded by Emmy-nominated CEO Bill O'Dowd, has produced multiple feature films and award-winning digital series.

Contact:

James Carbonara
Hayden IR
(646)-755-7412
james@haydenir.com

This press release contains 'forward-looking statements' within the meaning of the Private Securities Litigation Reform Act. These forward-looking statements may address, among other things, Dolphin Entertainment Inc.'s offering of common stock as well as expected financial and operational results and the related assumptions underlying its expected results. These forward-looking statements are distinguished by the use of words such as "will," "would," "anticipate," "expect," "believe," "designed," "plan," or "intend," the negative of these terms, and similar references to future periods. These views involve risks and uncertainties that are difficult to predict and, accordingly, Dolphin Entertainment's actual results may differ materially from the results discussed in its forward-looking statements. Dolphin Entertainment's forward-looking statements contained herein speak only as of the date of this press release. Factors or events Dolphin Entertainment cannot predict, including those described in the risk factors contained in its filings with the Securities and Exchange Commission, may cause its actual results to differ from those expressed in forward-looking statements. Although Dolphin Entertainment believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be achieved, and Dolphin Entertainment undertakes no obligation to update publicly any forward-looking statements as a result of new information, future events, or otherwise, except as required by applicable law.

DOLPHIN ENTERTAINMENT, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(unaudited)

ASSETS

 
As of September 30, 2019
 
 
As of December 31, 2018
 

Current

Cash and cash equivalents

 
$
1,550,799
 
 
$
5,542,272
 

Restricted cash

 
 
714,016
 
 
 
732,368
 

Accounts receivable, net of allowance for doubtful accounts of $311,649 and $283,022, respectively.

 
 
3,023,870
 
 
 
3,173,107
 

Other current assets

 
 
576,799
 
 
 
620,970
 

Total current assets

 
 
5,865,484
 
 
 
10,068,717
 

Capitalized production costs

 
 
224,024
 
 
 
724,585
 

Intangible assets, net of accumulated amortization of $3,884,448 and $2,689,704, respectively.

 
 
7,696,885
 
 
 
9,395,215
 

Goodwill

 
 
15,996,977
 
 
 
15,922,601
 

Right-of-use asset

 
 
6,139,776
 
 
 
–
 

Property, equipment and leasehold improvements, net

 
 
962,085
 
 
 
1,182,520
 

Investments

 
 
220,000
 
 
 
220,000
 

Deposits and other assets

 
 
502,399
 
 
 
475,956
 

Total Assets

 
$
37,607,630
 
 
$
37,989,594
 

LIABILITIES

Current

Accounts payable

 
$
769,608
 
 
$
944,232
 

Other current liabilities

 
 
4,427,469
 
 
 
7,238,507
 

Line of credit

 
 
1,700,390
 
 
 
1,700,390
 

Put rights

 
 
2,912,246
 
 
 
4,281,595
 

Accrued compensation

 
 
2,637,500
 
 
 
2,625,000
 

Debt

 
 
3,311,199
 
 
 
2,411,828
 

Loan from related party

 
 
1,107,873
 
 
 
1,107,873
 

Contract liability

 
 
311,484
 
 
 
522,620
 

Lease liability

 
 
1,404,938
 
 
 
–
 

Convertible notes payable, net of debt discount

 
 
2,721,731
 
 
 
625,000
 

Notes payable

 
 
286,068
 
 
 
479,874
 

Total current liabilities

 
 
21,590,506
 
 
 
21,936,919
 

Noncurrent

Put rights

 
 
365,646
 
 
 
1,702,472
 

Convertible notes payable

 
 
1,477,597
 
 
 
1,376,924
 

Notes payable

 
 
747,012
 
 
 
612,359
 

Contingent consideration

 
 
440,000
 
 
 
550,000
 

Lease liability

 
 
5,269,239
 
 
 
–
 

Other noncurrent liabilities

 
 
–
 
 
 
1,034,393
 

Total noncurrent liabilities

 
 
8,299,494
 
 
 
5,276,148
 

Total Liabilities

 
 
29,890,000
 
 
 
27,213,067
 

Commitments and contingencies (Note 19)

STOCKHOLDERS' EQUITY

Common stock, $0.015 par value, 200,000,000 shares authorized,14,641,466and 14,123,157, respectively, issued and outstanding at September 30, 2019 and December 31, 2018.

 
 
219,624
 
 
 
211,849
 

Preferred Stock, Series C, $0.001 par value, 50,000 authorized, issued and outstanding at September 30, 2019 and December 31, 2018.

 
 
1,000
 
 
 
1,000
 

Additional paid in capital

 
 
103,146,270
 
 
 
105,092,852
 

Accumulated deficit

 
 
(95,649,264
)
 
 
(94,529,174
)

Total Stockholders' Equity

 
 
7,717,630
 
 
 
10,776,527
 

Total Liabilities and Stockholders' Equity

 
$
37,607,630
 
 
$
37,989,594
 

DOLPHIN ENTERTAINMENT, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
For the three and nine months ended September 30, 2019 and 2018

 
For the three months ended
 
 
For the nine months ended
 

 
September 30,
 
 
September 30,
 

 
2019
 
 
2018
 
 
2019
 
 
2018
 

Revenues:

Entertainment publicity and marketing

 
$
5,940,440
 
 
$
5,720,264
 
 
$
18,464,330
 
 
$
16,297,466
 

Content production

 
 
7,616
 
 
 
–
 
 
 
86,606
 
 
 
427,153
 

Total revenues

 
 
5,948,056
 
 
 
5,720,264
 
 
 
18,550,936
 
 
 
16,724,619
 

Expenses:

Direct costs

 
 
1,540,711
 
 
 
333,041
 
 
 
4,006,806
 
 
 
1,199,165
 

Selling, general and administrative

 
 
1,023,757
 
 
 
1,111,516
 
 
 
2,875,348
 
 
 
2,547,621
 

Depreciation and amortization

 
 
485,965
 
 
 
599,078
 
 
 
1,446,168
 
 
 
1,345,421
 

Legal and professional

 
 
353,699
 
 
 
601,330
 
 
 
1,158,497
 
 
 
1,445,818
 

Payroll

 
 
3,956,095
 
 
 
3,614,139
 
 
 
12,503,528
 
 
 
10,755,111
 

Total expenses

 
 
7,360,227
 
 
 
6,259,104
 
 
 
21,990,347
 
 
 
17,293,136
 

Loss before other income (expenses)

 
 
(1,412,171
)
 
 
(538,840
)
 
 
(3,439,411
)
 
 
(568,517
)

Other Income (expenses):

Gain (loss) on extinguishment of debt, net

 
 
709,097
 
 
 
–
 
 
 
687,811
 
 
 
(53,271
)

Acquisition costs

 
 
–
 
 
 
(182,504
)
 
 
–
 
 
 
(217,174
)

Change in fair value of put rights

 
 
627,799
 
 
 
(110,840
)
 
 
2,406,175
 
 
 
1,305,797
 

Change in fair value of contingent consideration

 
 
20,000
 
 
 
470,000
 
 
 
110,000
 
 
 
470,000
 

Interest expense

 
 
(295,556
)
 
 
(277,122
)
 
 
(884,665
)
 
 
(810,521
)

Total other income (expenses)

 
 
1,061,340
 
 
 
(100,466
)
 
 
2,319,321
 
 
 
694,831
 

(Loss) Income before income taxes

 
$
(350,831
)
 
$
(639,306
)
 
$
(1,120,090
)
 
$
126,314
 

Income taxes

 
 
–
 
 
 
819,451
 
 
 
–
 
 
 
538,831
 

Net (loss) income

 
$
(350,831
)
 
$
180,145
 
 
$
(1,120,090
)
 
$
665,145
 

(Loss) income per Share:

Basic

 
$
(0.02
)
 
$
0.01
 
 
$
(0.07
)
 
$
0.05
 

Diluted

 
$
(0.05
)
 
$
0.01
 
 
$
(0.17
)
 
$
(0.04
)

Weighted average number of shares used in per share calculation

Basic

 
 
16,071,891
 
 
 
14,565,766
 
 
 
15,995,774
 
 
 
13,151,649
 

Diluted

 
 
19,847,935
 
 
 
14,565,766
 
 
 
20,225,129
 
 
 
15,255,445
 

 SOURCE: Dolphin Entertainment, Inc.

ReleaseID: 566628