Function(x) Inc. (NASDAQ:FNCX) (the "Company") yesterday reported
financial results for the three and six months ended December 31, 2016.
This Smart News Release features multimedia. View the full release here:
Function(X), Inc. - Key Performance Indicators (Publishing Segment)
Revenue for the three months ended December 31, 2016 was $1,215,000,
down from $1,782,000 for the three months ended December 31, 2015. For
the three months ended December 31, 2016, revenue for the Company's
Publishing Segment, which we consider our core operating business, was
$834,000, up 57.4% from $530,000 for the three months ended December 31,
2015. Additionally, this represents a 125% increase above the $371,000
in Publishing Segment revenue posted last quarter.
Net loss and diluted loss per share for the three-month period ended
December 31, 2016 were $(2,771,000) and $(1.13), respectively. The same
metrics for the six-month period ended December 31, 2016 were
$(10,324,000) and $(3.64), respectively.
EBITDA for the Company for the three months ended December 31, 2016 was
a loss of $(1,621,000), which is an improvement from a loss of
$(37,748,000) for the same period in 2015. The three months ended
December 31, 2015 includes significant non-cash impairment charge of
$30,402,000 that is included in the EBITDA calculation. EBITDA for the
Publishing Segment was a loss of $(1,105,000) for the three months ended
December 31, 2016, which represents an improvement from the loss of
$(28,493,000) for such segment for the three months ended December 31,
2015. The three months ended December 31, 2015 EBITDA figures for the
Publishing Segment include $26,977,000 of non-cash impairment expense.
This quarter's EBITDA in the publishing segment represents a $1,824,000
improvement over the prior quarter's results.
For full details on the above and other pertinent figures, please see
exhibit A and B, attached hereto.
"The continued dramatic improvement in operating results, fueled by
impressive growth in user engagement metrics, confirms that the plan we
instituted at the beginning of this fiscal year is hitting on all
cylinders," said Robert FX Sillerman, Executive Chairman and Chief
Executive Officer. "This growth is continuing, and we expect to magnify
these results when we shift our focus to the Rant brand. Over the past
six months, we have focused our efforts on growing Wetpaint user
engagement and monetization; focus which has proven successful at
Wetpaint. Applying this same methodology to Rant, and in the future to
additional sites, should continue to grow and strengthen our publishing
"I am confident that the recent successes of the business are just the
beginning of what will be a very exciting period. I look forward to
building upon this strong performance and coming up with new and
innovative ways to make this the business all that we know it can be, a
creative and innovative digital platform that is rivaled by none," said
Brian Rosin, COO.
Our Q2 Fiscal 2017 accomplishments listed below continue to be guided by
our overall strategy and vision, in which Function (x) is building a
highly scalable publishing platform that is designed to efficiently
create, share and monetize content across a wide range of topics and
audiences. Our property, Wetpaint, has begun to take full advantage of
our publishing infrastructure to deliver compelling content around pop
culture and entertainment, as demonstrated by the increase in engagement
and revenue. We plan on duplicating this success by focusing on the Rant
properties, applying our effective monetization strategy to further
Fiscal 2017 Second Quarter Highlights and Recent Developments
About Function(x) Inc.
Function(x) operates Wetpaint.com
and Rant. Wetpaint is the leading online destination for entertainment
news for millennial women, covering the latest in television, music, and
pop culture. Rant is a leading digital publisher with original content
in multiple different verticals, most notably in sports, entertainment,
and pets. Function(x) Inc. is also the largest shareholder
of DraftDay Gaming Group, which is well-positioned to become a
significant participant in the expanding fantasy sports market, offering
a high-quality daily fantasy sports experience both directly to
consumers and to businesses desiring turnkey solutions to new revenue
streams. Function(x) Inc. also owns Choose Digital, a digital
marketplace platform that allows companies to incorporate digital
content into existing rewards and loyalty programs in support of
marketing and sales initiatives. For more information, visit www.functionxinc.com.
This press release may contain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended, and as
defined in the U.S. Private Securities Litigation Reform Act of 1995.
These forward-looking statements involve inherent risks and
uncertainties that could cause actual results to differ materially from
those projected or anticipated. All information provided in this press
release is as of the date of this release. Except as required by
law, Function(x), Inc. undertakes no obligation to update or revise
publicly any forward-looking statements, whether as a result of new
information, future events or otherwise, after the date on which the
statements are made or to reflect the occurrence of unanticipated events.
The following definitions apply to these terms as used throughout this
press release and the exhibits:
Publishing Segments - represents Wetpaint and Rant and any corporate
expenses allocated to this segment.
EBITDA - represents net income (loss) before other income (loss),
interest expense, income taxes, depreciation and amortization.
Non-GAAP Financial Measures
We prepare our financial statements in accordance with generally
accepted accounting principles ("GAAP") in the United States of America.
Within this press release, we make reference to EBITDA, which is a
non-GAAP financial measure. We include these non-GAAP financial measures
because management believes they are useful to investors in that they
provide for greater transparency with respect to supplemental
information used by management in its financial and operational decision
Management uses EBITDA to convey supplemental information to investors
regarding our performance excluding the impact of certain non-cash
charges, costs associated with our borrowings and other special items
that can affect the comparability of results from quarter to quarter. In
particular, EBITDA is a key measure used by our management and board of
directors to understand and evaluate our core operating performance and
trends, to prepare and approve our annual budget, and to develop short-
and long-term operational plans. Of note, the elimination of certain
expenses in calculating EBITDA can provide a useful measure for
period-to-period comparisons of our core business.
Accordingly, we believe the presentation of these non-GAAP financial
measures, when used in conjunction with GAAP financial measures, is a
useful financial analysis tool that can assist investors in assessing
our operating performance and underlying prospects. This analysis should
not be considered in isolation or as a substitute for analysis of our
results as reported under GAAP. This analysis, as well as the other
information in this press release, should be read in conjunction with
our consolidated financial statements and footnotes contained in the
Form 10-Q that we filed with the U.S. Securities and Exchange
Commission. The non-GAAP financial measures used in this press release
may be different from the methods used by other companies. For more
information on the Non-GAAP financial measures, please see the
Reconciliation of GAAP financial measures to Non-GAAP financial measures
table in the press release.
- Corporate Net Loss
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