Digital Domain Media Group (NYSE: DDMG) today reported revenue
of $33.0 million for the second quarter ended June 30, 2012, an
increase of 48 percent over revenues of $22.3 million reported for
the second quarter of 2011.
For the second quarter of 2012, the company reported a net loss
excluding non-cash charges of $13.8 million, versus a net loss
excluding non-cash charges for the second quarter of 2011 of $7.0
million. For the same period, the company reported a GAAP net loss
attributable to common shareholders of $35.9 million, or $0.86 per
basic share, versus a GAAP net loss attributable to common
shareholders for the second quarter of 2011 of $71.9 million, or
$4.52 per basic share. The GAAP net loss for the second quarter of
2012 includes $22.1 million of non-cash accounting adjustments,
reserves and stock-based compensation.
Non-GAAP Adjusted Earnings before Interest, Taxes and
Depreciation and Amortization (“Non-GAAP Adjusted EBITDA”) for the
three months ended June 30, 2012, is reported as a loss of $9.3
million, compared to a loss of $9.2 million for the first quarter
of 2012. As expected, the Non-GAAP Adjusted EBITDA loss includes
$4.4 million of unutilized labor principally associated with launch
costs and training expenses of our new production facilities in
Florida, London and Mumbai. As recently announced, extraordinary
levels of unutilized labor have been effectively eliminated as our
employees, system-wide, are fully trained and substantially
committed to revenue-producing projects. In the financial tables
presented below is a reconciliation of net loss before
non-controlling interests, the most comparable GAAP financial
measure, to Non-GAAP Adjusted EBITDA.
As of July 17, 2012, the company’s revenue backlog was $90.3
million, an increase of 48 percent from $61.2 million at the
comparable time of the prior year. This growth reflects an increase
in projected future revenue reflected by feature film contracts
that we are either currently working on or have been awarded by
customers. We do not disclose backlog for television commercials
work, as that business operates with less forward visibility than
our feature film business. However, our revenues in the commercials
division, which now includes our virtual performer business, grew
by over 175 percent from the first quarter of 2012 to the second
quarter of 2012.
“On the revenue side, we are extremely pleased with continuing
growth in our visual effects business, a growing backlog of
traditional feature film business and a quickly expanding list of
clients for our new virtual performance business,” said John
Textor, chairman and CEO of Digital Domain Media Group. “In the
second quarter, we also saw the early impact of our initiative to
monetize our comprehensive 3D conversion patent portfolio, which is
fundamental to the vast majority of 3D films in the marketplace. We
were pleased to report two significant licenses in the second
quarter as we recognized licensing revenue of $3.4 million.
“On the expense side, we achieved a major milestone as we closed
the second quarter by announcing the elimination of extraordinary
unutilized labor in connection with our new studio launches,”
continued Textor. “This means that we have delivered on our
promises to both communities and shareholders by converting
start-up economic development grants into highly productive human
resources that are now actively engaged in the production of
revenue-producing, high-end animation and visual effects
projects.”
Business achievements during an active second quarter
include:
- Virtual Tupac /
Virtual Performer Business Launch: The company launched its
Virtual Performer business on April 14, when a virtual Tupac Shakur
joined rap music legends Dr. Dre and Snoop Dogg onstage at the
Coachella Music Festival and together they performed two songs. As
a result of the overwhelming response to this technological
achievement, we have received a large number of requests for
similar projects. We are carefully reviewing those to determine
which best fit our business model of partnering with holders of
intellectual property, such as music rights, and owners of venues.
This model is consistent with our objective of moving our business
away from a work-for-hire model and into a co-production model in
which we have an equity participation in performance and product
revenues that result from our work.
- Elvis Presley as
Virtual Performer: Elvis Presley was announced as the first
project for the company’s new Virtual Performer business. DDMG
announced an exclusive agreement with The Apollo Group’s Core Media
to jointly develop, produce and own a series of “virtual” Elvis
Presley likenesses for a range of entertainment projects – from
shows and appearances to film, TV and multi-platform productions
throughout the world.
- $100 Million
Grant from Abu Dhabi: Digital Domain Media Group was awarded
an approximately $100 million grant package from twofour54, the Abu
Dhabi government-backed media initiative. The company will
establish an animation, visual effects and motion capture studio
and Digital Domain Institute media school in Abu Dhabi. With a
combination of professionals and students from the Emirates, India
and the West, this studio has the potential to be one of the
lowest-cost high-end animation studios in the world and is expected
to be the first to offer high-quality digital film production and
content to a worldwide Arab audience estimated at more than 1.7
billion people.
- 3D Patent
Portfolio Licensing: The company announced a program to more
aggressively monetize the company’s six patents that provide
fundamental coverage of any modern 2D-to-3D computerized process
for converting 2D filmed imagery into 3D stereoscopic imagery. This
conversion process is used in virtually every 3D feature film
delivered in the theatrical marketplace, with the exception of the
small number of films that are filmed entirely with 3D cameras. The
company recently negotiated licensing agreements with Prime Focus
World, which settled the patent infringement claim brought by DDMG,
Beijing Galloping Horse Films in China, and Reliance MediaWorks in
India. These licenses follow the company’s initial licensing
arrangement with Samsung Electronics consummated in late 2011.
- Reduction of
Unutilized Labor: DDMG has substantially eliminated
extraordinary unutilized labor from its operations going forward,
as a result of the 48-percent growth in its backlog, its recent
agreement with Reliance MediaWorks, which shifted the
responsibility for unutilized labor in the Mumbai and London-based
studios away from the company, and its agreement with Prime Focus
regarding 3D stereoscopic conversion work that will be performed in
its Florida studio. As a point of reference, unutilized labor
expense was $9.1 million, or approximately 14 percent of revenues,
in the first six months of 2012. Normalized levels of unutilized
labor are now expected to be less than two percent of revenues
going forward.
- China Visual
Effects Partnership and Film Distribution Agreement: Digital
Domain Media Group expanded its relationship with Beijing Galloping
Horse Film Co., Ltd., a major participant in the high-growth China
film market and our 50/50 partner in The Digital Domain Galloping
Horse Studio. The company executed a license for the new joint
venture to use Digital Domain Media Group's patented technology for
converting 2D images into 3D. This will enable the joint venture to
participate in the rapidly growing market for 3D films. In
addition, Beijing Galloping Horse Film Co. signed the company’s
first third-party co-production, investment and distribution
agreement for The Legend of Tembo, DDMG’s first animation feature
film production. Beijing Galloping Horse will provide DDMG with
direct production investment as well as a distribution partner in
the greater territories of the People’s Republic of China.
Previously, the companies announced that Beijing Galloping Horse
Film Co. will provide the land for the joint venture’s Studio and
will be responsible for the construction and basic build-out costs
for the new facility, expected to require approximately $50 million
in total investment from Galloping Horse.
- Ender’s
Game: The company’s co-production with Oddlot Entertainment
and Summit/Lionsgate completed principal photography during the
second quarter and identified a release date of November 2013.
Digital Domain’s investment in the film is substantially complete
and the production has now transitioned into a significant
revenue-generating project as a visual effects engagement.
- Pursuit of
Strategic Alternatives: DDMG believes the value of its
existing and developing businesses exceed, by a substantial amount,
the total of the company’s current market capitalization. The
company also believes it is advisable to align capital and
strategic partnerships with specific business segments to validate
a ‘sum of the parts’ valuation that is both attractive to
shareholders and efficient in supporting the growth of the
respective businesses. DDMG announced that it is evaluating a broad
range of strategic and financial alternatives to support the
company’s growth initiatives and its efforts to maximize
shareholder value. These alternatives include, but are not limited
to, a strategic minority investment in the company or in a specific
business segment, joint ventures and/or business combinations with
strategic partners and industry participants, the sale or spin-off
of certain of the company’s assets or operating subsidiaries into
publicly-traded or privately-held corporations, the outright sale
of certain of the company’s assets or operating subsidiaries, or
the outright sale of the company. The company has hired Wells Fargo
Securities to be its exclusive advisor in support of this
process.
Cash Flow from Operations
We used net cash from operating activities aggregating $34.3
million in the first six months of 2012. Included in this amount
are several one-time items or items that are not expected to
continue through the second half of 2012. Included in the
first half were $15.0 million related to our investment in Ender’s
Game, which completed our capital investment in that film, an
additional $7.4 million related to our investments in two animated
feature films, and $9.1 million related to unutilized labor which
has been substantially reduced going forward. Accordingly, as
it relates to only operations, we used net cash from operating
activities of $2.8 million in the first six months of 2012 after
adjusting for these items.
Update on Grant Funding of Expansion Operations
“It is important to recognize that the costs we incur in
training new employees at our new animation feature film studio,
Tradition Studios, are funded by grants we secured to fund our
Florida expansion,” added Textor. “While we have received
substantial grant proceeds, grant revenue is recognized over time
while we recognize launch costs and operating costs currently.
Thus, even with extremely favorable grant packages in hand, there
is a negative impact on our results of operations in the short
term. However, we will continue to recognize grant inflows long
after these employees have become productive employees, resulting
in long-term profitability improvements associated with the
recognition of grant revenue.”
At June 30, 2012, we had in excess of $32 million in grants
recorded on our balance sheet as deferred grant revenue which will
be recognized into income, as pure profit flow-through, over the
coming years. In addition to grants of land aggregating $20.3
million, we have received cash grants of $29.9 million from
inception to date. These proceeds have been used to fund our
Florida operations in both animation feature films and in
education.
To gain perspective on the high reported operating costs of our
business, it may also be helpful to compare the cumulative
new-business launch expenses in Florida to the grant awards, and
actual grant receipts, that helped to fund such expenses. The
following table demonstrates that job creation grants received to
date are still in excess of total cumulative payroll costs in
Florida since inception. Such grants are also in excess of total
launch costs in Florida, with approximately $30 million in Florida
grant value yet to be received, as shown below (in millions):
Total Florida Grants Awarded (excl bonds) $79.7 Total Grants
Received to Date $49.8 Cumulative Florida Payroll (excl Sr Mgmt)
$32.1 Excess Funded to other DDMG Expansion Costs $17.7
Notwithstanding the benefits of our grant-funded expansion
approach, we remain focused on a path to profitability that is
clearly defined by the reduction of unutilized labor to normalized
levels in our core business and the conversion of unutilized
training labor in our international and Florida initiatives into
productive visual effects and animation resources. This unutilized
labor transformation is now complete. We are now seeing
high-quality animation and visual effects productivity, and the
beginnings of revenue-generating projects supported by this newly
trained labor. The continuation of this trend is key to achieving
operating cash flow levels in 2012. Additional drivers of
profitability are expected to come from our developing virtual
performance business and the continued, successful implementation
of our content ownership strategies in live-action co-productions
and original-content, family-focused feature animation. Anticipated
new grant incentives associated with our $100 million Abu Dhabi
project and reduced cost environments related to the international
expansion of our core visual effects business and our education
business are also expected to have a profound and positive impact
on our profitability in the immediate years.
Second Quarter Results
For the three months ended June 30, 2012, total revenues were
$33.0 million, compared to revenues of $22.3 million for the same
period of 2011.
Feature film revenues increased $6.1 million in the second
quarter of 2012 compared to the same period in 2011 as the company
worked on eight features in the 2012 quarter compared to five in
the 2011 period. Commercials revenue increased $1.1 million in the
second quarter of this year as we worked on 11 significant projects
in the 2012 quarter, including one project that accounted for
almost half of the total, compared to nine projects in the 2011
quarter. Furthermore, the revenues from our Commercials business
grew over 175 percent in the second quarter of 2012 from the first
quarter of 2012, representing a very substantial recovery from a
slower-than-normal first quarter.
Our technology licensing program also accelerated significantly,
with the company recognizing $3.4 million of licensing fees related
to our proprietary technology for 2D to 3D in the 2012 quarter, of
which $3.2 million was a one-time agreement from one company. We
recognized no licensing fees in the second quarter of 2011, and we
recognized only $0.2 million in the first quarter of 2012.
Total cost of revenue increased to $34.1 million in the second
quarter from $18.7 million in the second quarter of 2011. Our
direct cost of revenues was $22.2 million or 67.2 percent of
revenues for the three months ended June 30, 2012, compared to
$15.1 million or 67.8 percent of revenues for the second quarter of
2011. However, after eliminating the impact of the one-time
licensing fee of $3.2 million recognized during the three months
ended June 30, 2012, our direct costs of revenues increased to 74.5
percent of revenues for that period. Of this increase of 6.7
percent, 3.5 percent is due to the inclusion of the co-production
revenues from Ender’s Game of $3.6 million at 100-percent direct
costs of revenues. We are investing the gross margin on our work as
part of our equity in the film. Competitive pressures, product mix
changes and other factors contributed to the remaining increase in
the direct cost as a percentage of revenues.
Our unutilized labor increased $2.2 million to $4.4 million
during the three months ended June 30, 2012, as compared to the
same period of the prior year, but it declined from $4.7 million in
the first quarter of 2012. These costs relate both to digital
artists that we retain in anticipation of future projects,
including those projects in which we are an equity investor, and
artists we are training at our studio in Florida. The cost
increased versus the same period of the prior year as we added
artists in our new Tradition Studios, but decreased from the first
quarter as more of those artists achieved a level where they are
engaged on revenue-producing projects. Looking forward, we expect
that co-production projects, like Ender’s Game, The Legend of Tembo
and our virtual performer projects, will account for an increasing
percentage of our revenue. Because of the ramp-up of work on our
animated feature film, our work on the virtual Elvis Presley
performer project, and our ramp-up of work in our Florida studio,
we anticipate that unutilized labor charges will decline
significantly in the second six months of 2012. In addition,
unutilized labor during the second quarter includes charges under a
contract with Reliance MediaWorks for certain minimum levels of
work that we have not utilized in the past. This contract has been
renegotiated and unutilized labor costs under that contract have
been eliminated going forward.
The operating loss for the second quarter of 2012 was $22.9
million, compared to an operating loss of $20.8 million for the
same period of the prior year. The increases in the cost of
revenues coupled with the one-time recognition of a litigation
settlement of $4.6 million in the 2012 quarter were partially
offset by a decrease in share-based compensation expense of $5.6
million in that quarter compared with the same quarter of the prior
year.
The company reported a net loss attributable to common
shareholders for the three-month period ending June 30, 2012, of
$35.9 million, compared to a net loss attributable to common
shareholders of $71.9 million for the same period of 2011. This
improvement of $36.0 million is attributable to a $42.7 million
reduction in the mark-to-market adjustment of certain convertible
debt and warrants in the 2012 quarter, partially offset by the
increase in the operating loss and increase in the losses on debt
extinguishments of $4.8 million in the 2012 quarter. In the second
quarter of 2011, the mark-to-market adjustment resulted in a
non-cash accounting charge of $46.3 million, while the charge was
only $3.6 million in the second quarter of 2012.
Conference Call
Management of Digital Domain Media Group will host a conference
call to discuss second quarter financial results and recent
developments beginning at 11:00 am EDT on Wednesday, August 15,
2012. The conference call will be broadcast live over the Internet,
hosted at the Investor Relations section of the Company’s website
at http://www.ddmg.co. The call can
also be accessed via telephone by calling 866-362-4666 (U.S.) or
617-597-5313 (International) and using the passcode 36507014.
An archived replay of the call will be available via webcast at
www.ddmg.co or for seven days by dialing 888-286-8010, or
617-801-6888 for international callers. The passcode for the
telephone replay is 37157076.
About Digital Domain Media Group
Digital Domain Media Group (DDMG: NYSE) leverages its expertise
in digital visual effects (VFX) and computer-generated (CG)
animation across a group of interrelated businesses. At its
foundation is Digital Domain Productions (DDPI), an award-winning
digital production company founded in 1993. This leading provider
of visuals has contributed to more than 90 major motion pictures,
including Titanic, the Transformers series, Pirates of the
Caribbean: At World’s End and TRON: Legacy, hundreds of
commercials, and recently created the virtual likeness of rapper
Tupac Shakur for Dr. Dre’s show at the Coachella Valley Music
Festival. Mothership, a DDPI subsidiary, focuses on creating
advertising, entertainment and branded content from concept to
completion, across multiple media platforms. DDMG, its work and its
employees have been recognized with numerous awards, including
seven from the Academy of Motion Picture Arts and Sciences. The
company is building on its success in VFX to participate as a
co-producer in major productions and is currently co-producing the
upcoming live-action sci-fi feature film Ender’s Game, as well as
virtual likenesses for Elvis Presley that will be jointly owned by
CORE Media Group and DDMG. DDMG also converts two-dimensional (2D)
imagery to three-dimensional (3D) imagery and holds key patents in
this area. The company is also applying its CG expertise to produce
original, family-friendly animated feature films at its subsidiary
Tradition Studios. The first movie, The Legend of Tembo, is in
pre-production and two more features are in development. The
company’s education subsidiary, the Digital Domain Institute, sets
a new standard in digital media education through a pioneering
public-private partnership with The Florida State University
College of Motion Picture Arts. DDMG is expanding its worldwide
footprint of the highest quality visual effects and animation at
the lowest possible cost through global partnerships in India and
China. The company has studios in Los Angeles, San Francisco,
Florida and Vancouver and is currently establishing studios in
Beijing and Abu Dhabi. http://www.ddmg.co
Safe Harbor Statement
Certain statements in this press release constitute
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995. These statements include
comments about the company's plans, prospects, strategies and
future performance. They are made on the basis of our management’s
current expectations and beliefs, as well as a number of
assumptions regarding future events and business performance as of
the time the statements are made. Such forward-looking statements
are subject to known and unknown risks, uncertainties, assumptions
and other important factors, many of which are outside the
company’s control. These could cause actual results to differ
materially from the results expressed or implied in the
forward-looking statements.
Such differences may result from actions taken by the company,
as well as from developments beyond the company’s control,
including, but not limited to:
- price volatility of the company’s
common stock;
- changes in domestic and global economic
conditions, competitive conditions and consumer preferences;
- our dependence on a limited number of
large projects each year, and the timing of revenue flows from
those projects;
- developments in the status of strategic
initiatives taken by the company;
- audience acceptance of feature films we
may co-produce; and
- rapid technological developments,
including new forms of entertainment.
Further information on these and other factors and risks that
could affect our business is included in filings we make with the
Securities and Exchange Commission from time to time, including
under the heading “Risk Factors” in our Form 10-K filed on March
30, 2012. These documents are available on the SEC Filings
subsection of the Investors section of the Company’s website at
http://www.ddmg.co/. Information on our website is not part of this
press release.
All information provided in this press release is as of August
15, 2012, and the Company undertakes no obligation to update
publicly the information contained in this press release, or any
forward-looking statements, to reflect new information, events or
circumstances, or to reflect the occurrence of unanticipated
events.
About the Presentation of Non-GAAP Adjusted EBITDA
Non-GAAP Adjusted EBITDA represents net income (loss) adjusted
for (1) interest expense, net of interest income, (2) income tax
provision (benefit), (3) depreciation and amortization, (4)
amortization of intangible assets, (5) stock-based compensation
expense, (6) amortization of debt and equity issuance costs, (7)
other (income) expense and (8) our grant receipts from government
agencies that were received in a given period so that these
receipts are reflected on a cash basis. Items (1) through (7) are
excluded from net income (loss) internally when evaluating our
operating performance. Item (8) is included as we believe this
adjustment for grant receipts is indicative of our core operating
performance both because it reflects our ability to secure and
receive grant receipts in a given period and such receipts are
matched with the expenses associated with initiating the business
operations that those grant receipts were designed, in part, to
offset. Management believes Non-GAAP Adjusted EBITDA allows
investors to make a more meaningful comparison between our
operating results over different periods of time, as well as with
those of other companies in our industry, because it both includes
grant receipts from government agencies and excludes items such as
interest expense and other adjustments related to financing
activities that we believe are not representative of our operating
performance.
We believe that Non-GAAP Adjusted EBITDA, which is a non-GAAP
financial measure, when viewed with our results under U.S. GAAP and
the accompanying reconciliations, provides useful information about
our operating performance and period-over-period growth, and
provides additional information that is useful for evaluating our
operating performance. Additionally, we believe that Non-GAAP
Adjusted EBITDA provides a more meaningful comparison of our
operating results against those of other companies in our industry,
as well as on a period-to-period basis, because this measure both
includes grant receipts from government agencies and matches such
receipts with the expenses that those grant receipts were designed,
in part, to offset and excludes items that are not representative
of our operating performance, such as the fair value adjustments
associated with our historical financings as a private company. We
believe that including these costs and excluding cash grant
receipts in our results of operations results in a lack of
comparability between our operating results and those of our peers
in the industry, the majority of which do not have comparable
start-up costs or amortization costs related to intangible assets.
However, Non-GAAP Adjusted EBITDA is not a measure of financial
performance under U.S. GAAP and, accordingly, should not be
considered as an alternative to GAAP net income (loss) as an
indicator of operating performance.
DIGITAL DOMAIN MEDIA GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (In Thousands)
June 30, December
31, 2012 2011 (Unaudited)
Assets: Current
assets: Cash and cash equivalents $6,584 $29,413 Other current
assets 23,720 13,259 Total current assets 30,304 42,672 Property
and equipment, net 78,483 80,141 Goodwill and intangible assets,
net 58,976 60,702 Film inventory 29,358 6,925 Other assets 7,904
7,401
Total assets $205,025 $197,841
Liabilities, Preferred Stock and Stockholders' Equity
(Deficit): Current liabilities: Short-term debt, net $8,091
$17,612 Government bond obligations, short-term 4,774 3,399
Accounts payable and accrued liabilities 33,773 21,474 Other
current liabilities 26,515 19,941 Total current liabilities 73,153
62,426 Warrant and other debt-related liabilities, long-term 57,018
20,930 Long-term debt, net 6,302 455 Deferred revenue land grant,
long-term 19,513 19,775 Government bond obligations, long-term
35,002 36,155 Other long-term liabilities 23,868 22,212 Total
liabilities 214,856 161,953 Convertible preferred stock - -
Stockholders' equity (deficit): Total stockholders' equity
(deficit) before non- controlling interests (11,416) 29,450
Non-controlling interests 1,585 6,438 Net stockholders' equity
(deficit) (9,831) 35,888
Total liabilities, preferred stock and
stockholders' equity (deficit) $205,025 $197,841
DIGITAL DOMAIN MEDIA GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE LOSS (In Thousands, except Share and Per Share
Data) Three Months Ended
Six Months Ended June 30, June 30, 2012
2011 2012 2011 (Unaudited) (Unaudited)
Revenues: Revenues $28,707 $21,496 $58,865 $59,400 Grant revenues
from governmental agencies 879 808 1,757 1,461 Licensing revenues
3,290 - 3,380 - Tuition revenues 89 - 104 - Total revenues 32,965
22,304 64,106 60,861 Costs and expenses: Cost of revenues,
excluding depreciation and amortization 34,136 18,660 67,058 49,582
Depreciation expense 4,128 2,806 7,759 5,676 Selling, general and
administrative expenses 16,767 20,768 27,746 31,617 Amortization of
intangible assets 862 862 1,725 1,725 Total costs and expenses
55,893 43,096 104,288 88,600 Operating loss (22,928) (20,792)
(40,182) (27,739) Other income (expenses): Interest and finance
(expense) credit: Issuance of and changes in fair value of warrant
and other debt-related liabilities (3,584) (46,295) 700 (75,260)
Amortization of discount and issuance costs on notes payable
(1,987) (3,545) (3,586) (6,558) Losses on debt extinguishments
(7,016) (2,226) (7,016) (2,226) Interest expense on notes payable
(925) (708) (1,595) (1,210) Interest expense on capital and
governmental lease obligations (658) 6 (1,328) (312) Other income
(expense), net 375 437 728 1,504 Loss before income taxes (36,723)
(73,123) (52,279) (111,801) Income tax expense - - 9 250 Net loss
before non-controlling interests (36,723) (73,123) (52,288)
(112,051) Net loss attributable to non-controlling interests 825
1,264 1,558 1,067 Net loss attributable to common stockholders
$(35,898) $(71,859) $(50,730) $(110,984) Statements of
Comprehensive Loss: Net loss attributable to common stockholders
$(35,898) $(71,859) $(50,730) $(110,984) Unrealized gain from
foreign currency translation (22) 7 15 70 Comprehensive loss
$(35,920) $(71,852) $(50,715) $(110,914)
Weighted average
number of common shares outstanding: Basic 41,907,598
15,885,271 40,942,009 15,052,696 Diluted 45,129,012 15,885,271
44,163,423 15,052,696
Basic loss per share: Loss
before non-controlling interests $(0.88) $(4.60) $(1.28) $(7.44)
Net loss attributable to non-controlling interests 0.02 0.08 0.04
0.07 Basic loss per share attributable to Common Stockholders
$(0.86) $(4.52) $(1.24) $(7.37)
Diluted loss per
share: Loss before non-controlling interests $(0.97) $(4.60)
$(1.34) $(7.44) Net loss attributable to non-controlling interests
0.02 0.08 0.04 0.07 Diluted loss per share attributable to Common
Stockholders $(0.95) $(4.52) $(1.30) $(7.37)
DIGITAL DOMAIN
MEDIA GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS (In Thousands)
Six Months Ended June 30, 2012
2011 (Unaudited) Net cash used in operating
activities $(34,342) $(16,337) Net cash used in investing
activities (5,879) (9,154) Net cash provided by financing
activities 17,211 14,781 Effect of exchange rates on cash and cash
equivalents 181 33 Net decrease in cash and cash equivalents
(22,829) (10,677) Cash and cash equivalents at beginning of period
29,413 11,986 Cash and cash equivalents at end of period $6,584
$1,309
DIGITAL DOMAIN MEDIA GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF ADJUSTED EBITDA (In
Thousands) Three Months
Ended Six Months Ended June 30, June 30,
2012 2011 2012 2011 (Unaudited)
(Unaudited) Net loss before non-controlling interests
$(36,723) $(73,123) $(52,288) $(112,051) Add back (reverse) charges
(income) pertaining to: Losses on debt extinguishments 7,016 2,226
7,016 2,226 Share-based compensation expense 4,550 10,195 6,428
14,604 Income tax expense - - 9 250 Interest expense, net 3,570
4,247 6,509 8,080 Depreciation expense 4,128 2,806 7,759 5,676
Amortization of intangible assets 862 862 1,725 1,725 Changes
related to fair value of warrant and other debt-related liabilities
3,584 46,295 (700) 75,260 Other EBITDA adjustments: Grant cash
receipts in excess of (less than) grant revenue recognized (879)
3,942 493 3,289 Settlement of litigation 4,600 - 4,600 - Write-off
of deferred offering costs - - - 434 Adjusted EBITDA $(9,292)
$(2,550) $(18,449) $(507)
Digital Domain Media Group Com USD0.01 (NYSE:DDMG)
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Digital Domain Media Group Com USD0.01 (NYSE:DDMG)
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