RLJ Entertainment Reports Financial Results for the Third Quarter Ended September 30, 2013

RLJ Entertainment Reports Financial Results for the Third Quarter Ended
September 30, 2013

SILVER SPRING, Md., Nov. 7, 2013 (GLOBE NEWSWIRE) -- RLJ Entertainment Inc.,
("RLJ Entertainment" or "the Company") (Nasdaq:RLJE), today reported results
for the third quarter ended September 30, 2013. Full detail of the financial
results as well as Management Discussion and Analysis, or MD&A, can be found
in the Company's Form 10-Q filed with the SEC.

RLJ Entertainment is a leading creator, owner and distributor of media content
across digital, broadcast and physical platforms. The Company leverages its
branding expertise, access to content and direct to consumer skills to
optimize the value of its programs for distinct audiences. RLJ Entertainment
was formed in October 2012 through the business combination of RLJ
Acquisition, Inc., Image Entertainment, Inc. and Acorn Media Group, Inc.

RLJ Entertainment is focused on driving growth through the development of
interest-based entertainment services for targeted audiences in niche genres
including British drama and mystery, urban, action/thriller, and fitness, by
using new technologies to deliver that content to consumers.

Robert L. Johnson, Chairman of RLJ Entertainment stated, "The business
continued to perform on plan this quarter and I am pleased to see the results
of management's focus on driving greater efficiencies across all areas of the
business. With a capital reallocation strategy that will more effectively
maximize the Company's cash flow combined with strategic cost savings, the
business is well positioned to execute on its strategic growth plan and to
build shareholder value."

GAAP Financial Results

The financial results for the three and nine months ended September 30, 2013
reflect the operating activities of RLJ Entertainment and its subsidiaries
(referred to as the "successor" period). The results for the three and nine
months ended September 30, 2012 reflect the operations of only the Acorn Media
and its subsidiaries (referred to as the "predecessor" period). The
comparative discussion below for these periods is based on Generally Accepted
Accounting Principles in the United States (or U.S. GAAP) and the results for
the 2012 predecessor periods are not indicative of, or comparable to, results
for the 2013 successor periods.

The Company has included in this release an extensive discussion and
presentation of pro forma information in order to assist investors'
understanding of the Company's ability to generate cash and grow and meet its
financial commitments. The Company will not necessarily present this same
level of disclosure on an ongoing basis.

GAAP Financial Results

Based on the consolidated financial statements as presented in the Company's
Form 10-Q for the three months ended September 30, 2013, net revenue increased
$12.2 million to $32.7 million. Net revenue for the nine months ended
September 30, 2013 increased $49.9 million to $107.3 million.

Net loss for the three months ended September 30, 2013 totaled $8.5 million,
compared to net loss of $482,000 for the three months ended September 30,
2012. For the nine months ended September 30, 2013, net loss totaled $29.0
million, compared to net loss of $194,000 for the nine months ended September
30, 2012.

Miguel Penella, Chief Executive Officer of RLJ Entertainment, commented:

"I am pleased with the direction of the business in the third quarter as we
continued to strengthen our content investment strategy through capital
reallocation and securing additional cost savings. These initiatives led to
year over year EBITDA growth, even on a lower base of revenue, underscoring
the efficiencies that we are driving in the business. Going forward, I am
confident that we are making the right decisions to establish a solid video
entertainment platform and distribution strategy that positions the business
for long term growth."

Proforma Financial Results

The Company is presenting financial information for the three and nine month's
ended September 30, 2013 and pro forma financial information for three and
nine months ended September 30, 2012 due to the closing of the business
combination among RLJ Entertainment, Image Entertainment and Acorn Media on
October 3, 2012. Unaudited pro forma financial information reflects the 2012
operating results of RLJ Entertainment as if Image Entertainment and Acorn
Media were acquired as of the beginning of 2012. These combined results are
not necessarily indicative of the results that may have been achieved had the
combined companies been combined as of such date or period, or of RLJ
Entertainment's future operating results.

For the three months ended September 30, 2013, RLJ Entertainment net revenue
declined $6.4 million to $32.7 million compared to pro forma net revenue of
$39.1 million for the three months ended September 30, 2012. The decrease in
revenue was primarily driven by a decrease in the Company's wholesale
distribution segment as follows: (i) the timing release of one high-profile
title ("The Tall Man") released in 2012 with no equivalent release in 2013
(the Company has three high-profile titles releasing in the fourth quarter of
2013 consisting of "The Colony," "Paradise" and "Doc Martin 6"), (ii) a
significant reduction in rebates and sales return reserves in 2012 that did
not repeat in the same quarter of the current year, and (iii) higher than
expected returns from a former U.S. distribution partner, which was terminated
in the second quarter of 2013, and from the Company's Canadian distributor.

Partially offsetting the declines in revenue for the three months ended
September 30, 2013 was growth in both the Company's direct-to-consumer
segment, which increased 7.7% or $549,000 for the quarter, and the Company's
UK wholesale distribution business, which increased 12.6% or $283,000. The
Company experienced growth in its proprietary network, Acorn TV. As of October
31, 2013, the pay subscribers for Acorn TV have grown by 100% to over 40,000
compared to December 2012.

For the nine months ended September 30, 2013, RLJ Entertainment net revenue
declined $13.8 million to $107.3 million compared to pro forma net revenue of
$121.2 million for the nine months ended September 30, 2012. The decline was
driven by a decrease in the Company's wholesale distribution segment,
primarily within the US market, due to: (i) the full release of five
high-profile releases in 2012 ("The Double," "All Things Fall Apart," "Beneath
the Darkness," "The Tall Man," and "Doc Martin 5") versus only two
high-profile releases in 2013 year-to-date ("The Numbers Station" and "Day of
the "Falcon"), (ii) a significant reduction in rebates and sales return
reserves in 2012 that did not repeat in the current year, and (iii) higher
than expected sales returns from a former distributor and from the Company's
Canadian distributor. These declines were partially offset by solid growth in
both our direct-to-consumer segment, which increased 9.6% or $2.1 million for
the nine months ended, and our UK wholesale distribution business, which grew
$7.3 or $546,000 year-to-date versus the same period for the prior year. The
Company experienced growth in its proprietary network, Acorn TV. Acorn TV
contributed $485,000 in increased revenues for the nine months ended September
2013.

Adjusted EBITDA increased $8.3 million to $3.7 million for the three months
ended September 30, 2013, compared to the same period in 2012. The increase
in Adjusted EBITDA for the three months ended September 30, 2013, is primarily
attributable to reduced expenditures for investments in content.In 2012, the
Company made significant expenditures related to its production of Foyle's War
8, which was released in the first quarter of 2013.The Company is now just
starting preproduction for Foyle's War 9.

Adjusted EBITDA decreased $5.3 million to $1.2 million for the nine months
ended September 30, 2013, as compared to the prior year period. The decline in
Adjusted EBITDA for the nine months ended September 30, 2013 primarily relates
to significant charges recorded by the Company in COGS related to the early
termination of a multi-year content output arrangement with a content supplier
in the second quarter of 2013. The impact of this management decision
contributed to the total inventory impairment of $6.2 million recognized
during the nine months ended September 2013.

Adjusted EBITDA is a non-GAAP financial measure.See below for a
reconciliation to U.S. GAAP.

RLJ Entertainment, Inc. (Nasdaq:RLJE) is a premier independent licensee and
distributor of entertainment content and programming in North America, the
United Kingdom and Australia with over 5,300 exclusive titles. RLJE is a
leader in numerous genres via its owned and distributed brands such as Acorn
(British TV), Image (stand-up comedy, feature films), One Village (urban),
Acacia (fitness), Slingshot (faith), Athena (educational), Criterion (art
films) and Madacy (gift sets). These titles are distributed in multiple
formats including DVD, Blu-Ray, digital download, digital streaming, broadcast
television (including satellite and cable), theatrical and non-theatrical.

Via its relationship with Agatha Christie Limited, a company that RLJE owns
64% of, RLJE manages the intellectual property and publishing rights to some
of the greatest works of mystery fiction, including stories of the iconic
sleuths Miss Marple and Poirot. And through its direct-to-consumer business,
RLJE has direct contacts and billing relationships with millions of
consumers.

RLJE leverages its management experience to acquire, distribute, and monetize
existing and original content for its many distribution channels, including
its nascent branded digital subscription channels, and engages distinct
audiences with programming that appeals directly to their unique viewing
interests. RLJE has proprietary e-commerce web sites for the Acorn and Acacia
brands, and owns the recently launched Acorn TV digital subscription service.

Forward Looking Statements

This press release may include "forward looking statements" within the meaning
of the "safe harbor" provisions of the United Stated Private Securities
Litigation Reform Act of 1995. Forward-looking statements may be identified by
the use of words such as "anticipate", "believe", "expect", "estimate",
"plan", "outlook", and "project" and other similar expressions that predict or
indicate future events or trends or that are not statements of historical
matters. Investors are cautioned that such forward looking statements with
respect to revenues, earnings, EBITDA, performance, strategies, prospects and
other aspects of the business of RLJ Entertainment is based on current
expectations that are subject to risks and uncertainties.

A number of factors could cause actual results or outcomes to differ
materially from those indicated by such forward looking statements. These
factors include, but are not limited to: (1) RLJ Entertainment's ability to
integrate the businesses of Image Entertainment, Inc. and Acorn Media Group,
Inc.; (2) the inability of RLJ Entertainment to fully realize the anticipated
benefits of the business combination with Image Entertainment, Inc. and Acorn
Media Group, Inc. or such benefits taking longer to realize than expected; (3)
the ability of RLJ Entertainment's officers and directors to generate a number
of potential investment opportunities; (4) RLJ Entertainment's ability to
maintain relationships with customers, employees, suppliers and lessors; (5)
the loss of key personnel; (6) delays in the release of new titles or other
content; (7) the effects of disruptions in RLJ Entertainment's supply chain;
(8) the limited liquidity and trading of RLJ Entertainment's public
securities; (9) RLJ Entertainment's financial performance, including the
ability of RLJ Entertainment to achieve revenue growth and EBITDA margins or
realize synergies; (10) the possibility that RLJ Entertainmentmay be
adversely affected by other economic, business, and/or competitive factors;
(11) the need for additional capital and the availability of financing; (12)
technological changes; (13) pricing and availability of products and services;
(14) demand for RLJ Entertainment's products and services; (15) the ability to
leverage and monetize content; and (16) other risks and uncertainties
indicated from time to time in filings with the SEC by RLJ Entertainment.

Readers are referred to the most recent reports filed with the SEC by RLJ
Entertainment. Readers are cautioned not to place undue reliance upon any
forward-looking statements, which speak only as of the date made, and we
undertake no obligation to update or revise the forward-looking statements,
whether as a result of new information, future events or otherwise.

RLJ ENTERTAINMENT, INC.
CONDENSED Consolidated Balance Sheets
(unaudited)
September 30, 2013 and December 31, 2012
                                                                
                                                   Successor
(In thousands, except share data)                   September 30, December 31,
                                                   2013          2012
ASSETS                                                           
Current assets:                                                  
Cash and cash equivalents                           $2,630      $4,739
Accounts receivable, net                            12,148       20,484
Inventories, net                                    16,718       23,029
Investments in content, net                         36,600       30,981
Prepaid expenses and other assets                   3,097        1,938
Total current assets                                71,193       81,171
Noncurrent portion of accounts receivable           3,250        4,127
Noncurrent portion of investments in content        46,441       58,816
Property, equipment and improvements, net           1,576        1,800
Equity investment in affiliates                     24,269       25,449
Other intangible assets                             20,144       23,883
Goodwill                                            47,066       47,382
Total assets                                        $213,939    $242,628
LIABILITIES AND EQUITY                                           
Current liabilities:                                             
Accounts payable and accrued liabilities            $23,322     $30,590
Accrued royalties and distribution fees             38,491       32,658
Deferred revenue                                    5,747        4,339
Current portion of long term debt                   15,040       4,000
Total current liabilities                           82,600       71,587
Long term portion of debt, less debt discount       63,858       78,323
Deferred tax liability                              350          350
Stock warrant liability                             7,406        4,324
Total liabilities                                   154,214      154,584
Equity:                                                          
Common stock, $0.001 par value, 250 million shares               
authorized,
13,700,862 and 13,377,546 shares issued and
outstanding at September 30, 2013 and December 31,  13           13
2012, respectively
Additional paid-in capital                          86,596       86,133
Retained earnings (deficit)                         (27,267)     1,743
Accumulated other comprehensive gain                383          155
Total equity                                        59,725       88,044
Total liabilities and equity                        $213,939    $242,628


RLJ ENTERTAINMENT, INC.
Consolidated Statements of Operations
(unaudited)
For the Three and Nine Months Ended September 30, 2013 and 2012
                                                               
                         Successor                   Predecessor
(In thousands, except per Three Months  Nine Months   Three Months Nine Months
share data)               Ended         Ended         Ended        Ended
                         September 30, September 30, September    September
                                                      30,          30,
                         2013          2013          2012         2012
Revenue                   $32,741     $107,333    $20,568    $57,447
Cost of sales             24,747       88,627       12,149      31,633
Gross profit              7,994        18,706       8,419       25,814
                                                               
Selling expenses          6,397        18,046       4,388       11,063
General and               4,560        16,827       4,955       14,607
administrative expenses
Depreciation and          1,388        4,308        137         398
amortization
Total selling, general
andadministrative        12,345       39,181       9,480       26,068
expenses
LOSS FROM OPERATIONS      (4,351)      (20,475)     (1,061)     (254)
                                                               
Equity earnings of        1,364        2,924        462         983
affiliates
Interest expense, net     (2,019)      (6,027)      (261)       (838)
Other income (expense)    (2,832)      (3,751)      501         118
Total other income        (3,487)      (6,854)      702         263
(expense)
INCOME (LOSS)
BEFOREPROVISION FOR      (7,838)      (27,329)     (359)       9
INCOME TAXES
Provision for income      670          1,681        123         203
taxes
NET LOSS                  (8,508)      (29,010)     (482)       (194)
Less (net income) loss
attributable to           —             —             13           (43)
noncontrolling interests
NET LOSS APPLICABLE       $(8,508)    $(29,010)   $(469)     $(237)
TOCOMMON SHAREHOLDERS
Net loss per common                                             
share:
                                                               
Unrestricted common                                             
stock:
Basic and diluted         $(0.62)     $(2.15)     $(0.46)    $(0.23)
Restricted common stock:                                        
Basic and diluted         $(0.62)     $(2.15)     $—         $—
                                                               
Unrestricted weighted
averageshares                                                  
outstanding:
Basic and diluted         13,340        13,340        1,023        1,023
Restricted weighted
averageshares                                                  
outstanding:
Basic and diluted         292           127           —           —


RLJ ENTERTAINMENT, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(unaudited)
For the Three and Nine Months Ended September 30, 2013 and 2012
                                                               
                         Successor                   Predecessor
(In thousands)            Three Months  Nine Months   Three Months Nine Months
                          Ended         Ended         Ended        Ended
                         September 30, September 30, September    September
                                                      30,          30,
                         2013          2013          2012         2012
                                                               
NET LOSS:                                                       
Net loss                  $(8,508)    $(29,010)  $(482)     $(194)
Other comprehensive                                             
income (loss):
Foreign currency          803          228          151         295
translation gain
Total comprehensive       (7,705)      (28,782)     (331)       101
income (loss)
Less: comprehensive
income (loss)
attributable                                                    
tononcontrolling
interests:
Share of net income       —           —            (13)        43
(loss)
Share of foreign currency —            —            42          37
translation gain
Comprehensive income
attributable              —            —            29          80
tononcontrolling
interest
Comprehensive income
(loss) attributable       $(7,705)    $(28,782)   $(360)     $21
tocommon shareholders


RLJ ENTERTAINMENT, INC.
CONSOLIDATED STATEMENTS OF EQUITY
(unaudited)

For the Nine Months Ended September 30, 2013 (Successor)
            Common Stock                               Accumulated                      
(In                       Additional Stockholder Retained  Other                  Non-
thousands)          Par   Paid-      Notes       Earnings  Comprehensive Treasury controlling Total
             Shares Value in Capital Receivable  (Deficit) Gain          Stock    Interests   Equity
Balance at
January 1,   13,378 $13  $86,133  $—        $1,743   $155        $—      $—        $88,044
2013
Issuance of
restricted   323    —     —          —           —         —             —        —           —
common stock
for services
Stock-based  —      —     463        —           —         —             —        —           463
compensation
Foreign
currency     —      —     —          —           —         228           —        —           228
translation
Net loss     —      —     —          —           (29,010)  —             —        —           (29,010)
Balance at                                       $
September    13,701 $13  $86,596  $—        (27,267)  $383        $—      $—        $59,725
30, 2013


For the Nine Months Ended September 30, 2012 (Predecessor)
             Common Stock                               Accumulated                      
(In                         Additional Stockholder          Other                  Non-
thousands)           Par    Paid-      Notes       Retained Comprehensive Treasury controlling Total
              Shares Value in Capital Receivable  Earnings Loss          Stock    Interests   Equity
Balance at
January 1,    1,023  $10   $4,451   $(684)    $ 26,295 $(421)      $(583)  $759      $29,827
2012
Stock-based   —      —      373        —           —        —             —        —           373
compensation
Foreign
currency      —      —      —          —           —        258           —        37          295
translation
Net income    —      —      —          —           (237)    —             —        43          (194)
Stockholders' —      —      —          —           (4,879)  —             —        (265)       (5,144)
Distributions
Balance at
September 30, 1,023  $10   $4,834   $(684)    $ 21,179 $(163)     $(583)  $574      $25,157
2012


RLJ ENTERTAINMENT, INC.
Consolidated Statements of Cash Flows
(unaudited)
For the Nine Months Ended September 30, 2013 and 2012
                                                                 
(In thousands)                                         Successor   Predecessor
                                                      2013        2012
CASH FLOWS FROM OPERATING ACTIVITIES:                             
Net loss                                               $(29,010) $(194)
Adjustments to reconcile net loss to net cash:                    
Equity earnings in affiliates                          (2,924)    (983)
Amortization of content, including impairments         50,535    11,412
Depreciation and amortization                          510        339
Amortization of intangible assets                      3,798      59
Foreign currency exchange loss/(gain)                  706        (310)
Fair value adjustment of stock warrant liability       3,082      —
Noncash interest expense                               750        —
Stock-based compensation expense                       463        373
Changes in assets and liabilities:                                
Accounts receivable, net                               9,151      3,487
Inventories, net                                       6,308      (244)
Investment in content, net                             (38,276)   (18,935)
Prepaid expenses and other assets                      (361)      (1,137)
Accounts payable and accrued liabilities               (7,617)    877
Deferred revenue                                       1,403      —
Net cash used in operating activities                  (1,482)    (5,256)
CASH FLOWS FROM INVESTING ACTIVITIES:                             
Capital expenditures                                   (350)      (505)
Acquisition of affiliate                               —          (21,871)
Dividends received from affiliate                      4,005      2,682
Net cash provided by (used in) investing activities    3,655      (19,694)
CASH FLOWS FROM FINANCING ACTIVITIES:                             
Borrowings under revolving credit facility             10,398     6,167
Repayments of borrowings under revolving credit        (3,000)    —
facility
Proceeds from debt                                     191        27,511
Repayment of debt                                      (11,452)   (3,502)
Distributions to stockholders                          —          (5,144)
Net cash provided by (used in) financing activities    (3,863)    25,032
Effect of exchange rate changes on cash                (419)      (198)
NET DECREASE IN CASH:                                  (2,109)    (116)
Cash at beginning of period                            4,739      1,625
Cash at end of period                                  $2,630    $1,509
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:                
Cash paid during the period for:                                  
Interest                                               $4,183     $659
Income taxes                                           $539       $727

                           RLJ ENTERTAINMENT, INC.

Unaudited pro forma financial information reflects the operating results of
RLJE as if Image and Acorn Media were acquired as of the periods indicated.
These combined results are not necessarily indicative of the results that may
have been achieved had the combined companies been combined as of such dates
or periods, or of our future operating results.

Management believes Adjusted EBITDA to be a meaningful indicator of our
performance that provides useful information to investors regarding our
financial condition and results of operations because it removes material
noncash items that allows investors to analyze the operating performance of
the business using the same metric management uses. The exclusion of noncash
items better reflects our ability to make investments in the business and meet
obligations.Presentation of Adjusted EBITDA is a non-GAAP financial measure
commonly used in the entertainment industry and by financial analysts and
others who follow the industry to measure operating performance. The Company
uses this measure to assess operating results and performance of its business,
perform analytical comparisons, identify strategies to improve performance and
allocate resources to its business segments. While management considers
Adjusted EBITDA to be important measures of comparative operating performance,
it should be considered in addition to, but not as a substitute for, net
income and other measures of financial performance reported in accordance with
GAAP. Not all companies calculate Adjusted EBITDA in the same manner and the
measure as presented may not be comparable to similarly-titled measures
presented by other companies.

The following unaudited pro forma financial information for the three and nine
months ended September 30, 2013 and 2012 reflects the operating results of
RLJE as if Image and Acorn Media were acquired as of January 1, 2012.The
unaudited pro forma financial information does not include adjustments for
Business Combination transaction costs and severance incurred and other
one-time expenses, nor does it include adjustments for synergies.These
combined results are not necessarily indicative of the results that may have
been achieved had the companies been combined as of such historical dates or
periods, or of RLJE's future operating results.

Proforma Income Statement
(unaudited)

For the Three and Nine Months Ended September 30, 2013 and 2012

                      Three Months Ended          Nine Months Ended
                      September 30,               September 30,
(In thousands)         2013         2012           2013          2012
                      Actual       Proforma (1)   Actual        Proforma (1)
Revenues               $32,741    $39,152      $107,333    $121,161
Costs of sales         24,747      27,007        88,627       85,206
Gross profit           7,994       12,145       18,706       35,955
Selling, general and
administrative         12,345      16,202        39,181       45,961
expenses
Loss from operations   (4,351)     (4,057)       (20,475)     (10,006)
Equity earnings of     1,364       294           2,924        1,318
affiliates
Interest expense, net  (2,019)     (1,938)       (6,027)      (5,814)
Other income (expense) (2,832)     675           (3,751)      2,450
Provision for income   (670)       (123)         (1,681)      (46)
taxes
Net loss               $(8,508)   $(5,149)    $(29,010)   $(12,098)
                                                             
Adjusted EBITDA        $3,717     $(4,547)     $1,179      $6,503
                                                             
Notes to the Proforma Income Statement Table:
(1)An adjustment for interest expense has been made to the prior year three
and nine month ended September 30, 2012 as if the existing debt was in place
throughout the period.

The following table includes the reconciliation of our consolidated Adjusted
EBITDA to consolidated U.S. GAAP net loss:

                                Three Months Ended    Nine Months Ended
                                 September 30,         September 30,
(In thousands)                   2013       2012       2013        2012
                                Actual     Proforma   Actual      Proforma
                                $(8,508) $(5,149) $(29,010) $(12,098)
Net loss
                                                               
Amortization of content          13,947    15,513    50,535     49,508
Cash investment in content       (10,346)  (21,756)  (38,276)   (50,163)
Depreciation and amortization    1,388     1,413     4,308      4,246
Interest expense                 2,019     1,938     6,027      5,814
Provision for income tax         670       123       1,681     46
Transactions costs and severance 351       2,901     2,369      7,786
Warrant liability fair           3,884     —         3,082     —
valueadjustment
Stock-based compensation         312       470       463        1,364
Adjusted EBITDA                  $3,717   $(4,547) $1,179    $6,503

CONTACT: Sloane & Company
         Erica Bartsch, 212-446-1875
         ebartsch@sloanepr.com

         Traci Otey Blunt, 240-744-7858
         The RLJ Companies
         press@rljcompanies.com

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