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Dolphin Entertainment Q2 Revenue Increases 20% Year-Over-Year to $6.3 Million

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Entertainment Publicity and Marketing revenue increases 23% year-over-year to a record $6.3 million

NEW YORK, NY, LOS ANGELES, CA and MIAMI, FL / ACCESSWIRE / August 13, 2019 / Dolphin Entertainment, Inc. (DLPN), a leading independent entertainment marketing and premium content development company, announces its financial results for the quarter ended June 30, 2019.

Q2 2019 and Recent Highlights

  • Total revenue increased 20% year-over-year to $6,273,983.

  • Entertainment Publicity and Marketing revenue increased 23% year over year to a record $6,273,983.

  • Operating loss of $(1,202,078), which included direct costs of $1,279,657 and non-cash items from depreciation and amortization of $478,560, compared to operating income of $69,267, which included direct costs of $295,765 and non-cash items from depreciation and amortization of $375,163, in the prior year.

  • Net loss was $(891,867), compared to net income of $170,474 in the prior year.

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

  • The Door celebrated clients Patrick O'Connell, Kevin Boehm and Rob Katz, who won 2019 James Beard Foundation Awards.

  • Award-Winning creatives John Murnane and James Coulson joined Viewpoint.

  • Viewpoint Creative developed a new brand campaign for Investigation Discovery, America's #1 true crime network.

Bill O'Dowd, CEO of Dolphin Entertainment, commented: "Our Q2 witnessed another historic quarter from our core Entertainment Publicity and Marketing segment, up 23% year over year and reaching a record $6.3 million of revenue."

Mr. O'Dowd continued, " As a reminder, there is seasonality in our movie marketing business, with Q2 representing the low point in any given year, as it is the only quarter without any awards business. Thus, for Q2 revenue to be better than Q1, and to improve by 23% from the prior year for the EPM segment, shows the power of the revenue diversification we are achieving with the creation of our Entertainment Marketing ‘Super Group.’”

Mr. O’Dowd added, “As stated in our Q1 Earnings Release and on our Q1 Earnings Call, we are managing toward revenue growth in 2019. On the bottom line, our Q2 operating loss, excluding depreciation and amortization expenses, was entirely the result of the seasonality of revenues in our movie marketing division. With the return of awards season in Q3, we expect continued revenue growth and a much stronger bottom line for the rest of the year, even as we invest in additional personnel, such as the Consumer Products PR team at The Door.”

Mr. O'Dowd concluded, "On the M&A front, we are confident we’ll have another acquisition done before the end of the year. Our goal is to have all 6 “core competency” companies of the ‘Super Group’ acquired within 2020. We believe reaching that goal will accelerate revenue growth even further as the cross-selling of services will amplify exponentially as the number of “sister” companies increase."

Conference Call Information

To participate in this event, dial approximately 5 to 10 minutes before the beginning of the call.
Date, Time: Tuesday, August 13, 2019, at 4:30 p.m. ET
Toll-free: 866-682-6100
International: 862-298-0702
Live Webcast: https://www.investornetwork.com/event/presentation/53248

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: 53248

About Dolphin Entertainment, Inc.

Dolphin Entertainment 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.

Special Note Regarding Forward-Looking Statements

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's 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.

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

ITEM 1. FINANCIAL STATEMENTS

DOLPHIN ENTERTAINMENT, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)

As of
June 30,
2019

As of
December 31,
2018

ASSETS

Current

Cash and cash equivalents

$

2,559,367

$

5,542,272

Restricted cash

732,920

732,368

Accounts receivable, net of allowance for doubtful accounts of $274,861 and $283,022, respectively.

2,479,299

3,173,107

Other current assets

614,301

620,970

Total current assets

6,385,887

10,068,717

Capitalized production costs, net

785,039

724,585

Intangible assets, net of accumulated amortization of $3,494,560 and $2,714,785, respectively.

8,086,773

9,395,215

Goodwill

15,996,977

15,922,601

Right-of-use asset

6,529,077

-

Property, equipment and leasehold improvements, net

1,040,021

1,182,520

Investments

220,000

220,000

Deposits and other assets

534,735

475,956

Total Assets

$

39,578,509

$

37,989,594

DOLPHIN ENTERTAINMENT, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)
(unaudited)

As of
June 30,
2019

As of
December 31,
2018

LIABILITIES

Current

Accounts payable

$

769,974

$

944,232

Other current liabilities

6,110,389

7,238,507

Line of credit

1,700,390

1,700,390

Put rights

4,030,280

4,281,595

Accrued compensation

2,625,000

2,625,000

Debt

2,312,461

2,411,828

Loan from related party

1,107,873

1,107,873

Contract liabilities

192,471

522,620

Lease liability

1,408,120

-

Convertible notes payable, net of debt discount

1,988,462

625,000

Notes payable

283,952

479,874

Total current liabilities

22,529,372

21,936,919

Noncurrent

Put rights

677,911

1,702,472

Convertible notes payable

1,044,232

1,376,924

Notes payable

769,338

612,359

Contingent consideration

460,000

550,000

Lease liability

5,608,045

-

Other noncurrent liabilities

-

1,034,393

Total noncurrent liabilities

8,559,526

5,276,148

Total Liabilities

31,088,898

27,213,067

Commitments and contingencies (Note 19)

STOCKHOLDERS' EQUITY

Common stock, $0.015 par value, 200,000,000 shares authorized, 14,394,562 and 14,123,157, respectively, issued and outstanding at June 30, 2019 and December 31, 2018

215,918

211,849

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

1,000

1,000

Additional paid in capital

103,571,126

105,092,852

Accumulated deficit

(95,298,433

)

(94,529,174

)

Total Stockholders' Equity

8,489,611

10,776,527

Total Liabilities and Stockholders' Equity

$

39,578,509

$

37,989,594

DOLPHIN ENTERTAINMENT, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)

For the three months ended

For the six months ended

June 30,

June 30,

2019

2018

2019

2018

Revenues:

Entertainment publicity and marketing

$

6,273,983

$

5,121,487

$

12,523,890

$

10,577,220

Content production

=

97,961

78,990

427,153

Total revenues

6,273,983

5,219,448

12,602,880

11,004,373

Expenses:

Direct costs

1,279,657

295,765

2,467,076

865,199

Selling, general and administrative

1,071,460

585,214

1,859,623

1,381,958

Depreciation and amortization

478,560

375,163

960,203

746,343

Legal and professional

449,060

356,002

832,732

844,488

Payroll

4,197,324

3,538,037

8,510,486

7,196,042

Total expenses

7,476,061

5,150,181

14,630,120

11,034,030

Income (loss) before other income (expenses)

(1,202,078

)

69,267

(2,027,240

)

(29,657

)

Other income (expenses):

Loss on extinguishment of debt

-

(53,271

)

(21,287

)

(53,271

)

Acquisition costs

-

(34,672

)

-

(34,672

)

Change in fair value of warrant liability

-

350,115

-

518,432

Change in fair value of put rights

251,350

333,043

1,778,376

1,416,639

Change in fair value of contingent consideration

360,000

-

90,000

-

Interest expense

(301,139

)

(265,992

)

(589,108

)

(533,419

)

Total other income (expenses)

310,211

329,223

1,257,981

1,313,709

(Loss) income before income taxes

$

(891,867

)

$

398,490

$

(769,259

)

$

1,284,052

Income taxes

-

(228,016

)

-

(280,620

)

Net (loss) income

$

(891,867

)

$

170,474

$

(769,259

)

$

1,003,432

(Loss) income per Share:

Basic

$

(0.06

)

$

0.01

$

(0.05

)

$

0.08

Diluted

$

(0.06

)

$

(0.01

)

$

(0.13

)

$

(0.03

)

Weighted average number of shares used in per share calculation

Basic

15,969,926

12,349,014

15,957,085

12,432,872

Diluted

19,172,087

14,032,001

19,671,124

14,533,224

DOLPHIN ENTERTAINMENT, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited)

For the six months ended

June 30,

2019

2018

CASH FLOWS FROM OPERATING ACTIVITIES:

Net (loss) income

$

(769,259

)

$

1,003,432

Adjustments to reconcile net (loss) income to net cash (used in) operating activities:

Depreciation and amortization

960,203

746,343

Amortization of capitalized production costs

-

203,560

Amortization of beneficial conversion on debt

72,657

-

Loss on extinguishment of debt

21,287

53,271

Bad debt and recovery of account receivable written off, net

(115,784

)

(7,421

)

Change in fair value of warrant liability

-

(518,432

)

Change in fair value of put rights

(1,778,376

)

(1,416,639

)

Change in fair value of contingent consideration

(90,000

)

-

Change in deferred tax

-

249,276

Change in deferred rent

-

40,172

Changes in operating assets and liabilities:

Accounts receivable

809,592

866,534

Other current assets

6,669

(90,211

)

Capitalized production costs

(60,454

)

(12,500

)

Deposits and other assets

(58,779

)

40,219

Contract liability

(330,149

)

-

Accrued compensation

-

125,000

Accounts payable

(174,258

)

(363,066

)

Lease liability, net

100,574

-

Other current liabilities

346,511

(441,992

)

Other noncurrent liabilities

(217,713

)

(491,352

)

Net Cash (Used in) Operating Activities

(1,277,279

)

(13,806

)

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchase of fixed assets

(37,929

)

(49,813

)

Net Cash (Used in) Investing Activities

(37,929

)

(49,813

)

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from line of credit

-

1,700,390

Repayment of the line of credit

-

(750,000

)

Proceeds from note payable

1,110,457

-

Proceeds from issuance of detachable warrants

89,543

-

Repayment of notes payable

(38,942

)

-

Repayment of debt

(99,367

)

(1,038,728

)

Sale of common stock and warrants (unit) in Offering

-

81,044

Employee shares withheld for taxes

-

(56,091

)

Exercise of put rights

(1,365,500

)

-

Repayment to related party

-

(601,001

)

Advances from related party

-

(2,515,000

)

Acquisition of Viewpoint

(230,076

)

-

Acquisition of The Door

(771,500

)

-

42West settlement of change of control provision

(361,760

)

(20,000

)

Net Cash (Used in) Financing Activities

(1,667,145

)

(3,199,386

)

NET DECREASE IN CASH AND CASH EQUIVALENTS

(2,982,353

)

(3,263,005

)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD

6,274,640

5,296,873

CASH, CASH EQUIVALENTS AND RESTRICTED CASH END OF PERIOD

$

3,292,287

$

2,033,868

DOLPHIN ENTERTAINMENT, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows (Continued)
(Unaudited)

For the six months ended

June 30,

2019

2018

SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION:

Interest paid

$

151,100

$

88,047

SUPPLEMENTAL DISCLOSURES OF NON CASH FLOW INFORMATION:

Conversion of note payable into shares of common stock

$

75,000

$

276,425

Issuance of shares of Common Stock related to the acquisitions

$

1,000,000

$

-

Liability for contingent consideration for the acquisitions

$

460,000

$

-

Liability for put rights to the Sellers of 42West

$

4,708,191

$

4,809,371

Reconciliation of cash, cash equivalents and restricted cash. The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the statement of cash flows that sum to the total of the same such amounts shown in the statement of cash flows:

For the six months ended

June 30,

2019

2018

Cash and cash equivalents

$

2,559,367

$

2,033,868

Restricted cash

732,920

-

Total cash, cash equivalents and restricted cash shown in the condensed consolidated statement of cash flows

$

3,292,287

$

2,033,868

SOURCE: Dolphin Entertainment



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