Glory Star Reports Full Year 2022 Financial Results

BEIJINGMarch 22, 2023 /PRNewswire/ -- Glory Star New Media Group Holdings Limited, ("Glory Star" or the "Company") (Nasdaq: GSMG), a leading digital media platform and content-driven e-commerce company in China, today announced its financial results for the full year ended December 31, 2022.

Full Year 2022 Operating Highlights

  • Downloads of the CHEERS App[1] was approximately 377 million as of December 31, 2022, compared to approximately 271 million as of December 31, 2021.

  • Monthly active users ("MAUs") [2] of the CHEERS App increased to approximately 51.5 million from 47.6 million for the full year of 2022.

  • Repurchase Rate ("RPR") for CHEERS e-Mall was approximately 34.5%.

  • Daily Time Spent ("DTS") on CHEERS Video was approximately 56 minutes.

Full Year 2022 Financial Highlights

  • Total revenues reached $157.1 million for the full year of 2022.

  • Net Income reached $26.4 million for the full year of 2022.

[1] Glory Star defines this metric as the total number of downloads of the CHEERS App (video+e-Mall) as of the end of the period.

[2] Glory Star defines monthly active users, or MAUs, as a user who has logged in or accessed the Company's online video content and/or the Company's e-commerce platform using the CHEERS App, whether on a mobile phone or tablet. The Company calculates MAUs using internal company data based on the activity of the user account and as adjusted to remove "duplicate" accounts.

Mr. Bing Zhang, Chairman and Chief Executive Officer of Glory Star, commented, "2022 was a challenging year in light of significant COVID and macro headwinds, while our content production capacity and e-commerce logistics business were dampened throughout the year, we still manage to show great resilience in our business along with large increase in downloads of our CHEERS App from approximately 271 million to 377 million, in monthly active users of the CHEERS App to approximately 51.5 million from 47.6 million for the full year of 2022."

"As an internet Company, we generate most revenue from online business and were able to quickly adapt and maintain our revenue at $157 million for the full year of 2022, compared to $153 million for 2021, mainly benefited from advertising business. The Company also posted net income of $26.4 million amid great uncertainties posed by the macro-environment for the past year. Looking ahead, we remain confident in the long-term growth of our business with an emphasis on opportunities to deploy solutions across multiple business strings at scale. We will further expand our mobile and online business by creating a CHEERS ecosystem to add further value as our business looks to rebound in the new year."

Full Year 2022 Selected Financial Results

Revenues

Our revenues in the year of 2022 were $157 million compared to $153 million in the same period of 2021, which approximately maintained at the same level. Despite the uncertain external environment, the Company was able to enhance brand recognition and user traffic generation, leading to more exposure and high popularity of our apps, consequently, gaining a competitive edge during the fiscal year of 2022.

Our biggest source of revenue is Advertising revenue, $152 million for the year ended December 31, 2022, which is a 14.4% increase as compared with that of the year ended December 31, 2021.

Operating expenses

Operating expenses consists of cost of revenues, selling and marketing, general and administrative and research and development expense.

-  Cost of revenues increased to $40.6 million, for the year ended December 31, 2022 from $34.9 million for year ended December 31, 2021, mainly attributed by the production cost, as a result of our continued investment in quality content. That helps to gain and secure our competitive edge in the industry.

-  Sales and marketing expenses increased by $5 million, to $82.5 million for the year ended December 31, 2022 from $77.5 million for the year ended December 31, 2021, mainly due to an increase in marketing and advertising fees to enhance the Company's brand recognition and user traffic generation.

-  General and administrative expenses increased by $2.6 million, or 76.8%, to $6.0 million for the year ended December 31, 2022 from $3.3 million for the year ended December 31, 2021 mainly attributed by recording more allowance for credit loss for the year ended December 31, 2022.

-  Research and development expenses for the years ended December 31, 2021 and 2022 were $0.9 million and $1.3 million, respectively. Such increase was primarily due to the continued investment in the IT infrastructure, user-friendliness upgrades, and continual implementation on content driven strategies.

Net income

As a result of the foregoing, we had a net income of $26.4 million (including the revaluation gain of warrant liability related to private warrants) in 2022, as compared to a net income of $35.4 million (including the revaluation gain of warrant liability related to private warrants) in 2021.

Cash and cash equivalents

As of December 31, 2022, the Company had cash and cash equivalents of $70.5 million, compared to US$77.3 million as of December 31, 2021.

GLORY STAR NEW MEDIA GROUP HOLDINGS LIMITED

CONSOLIDATED BALANCE SHEETS

(In U.S. dollars in thousands, except share and per share data)




December 31,

2021



December 31,

2022









Assets







Current assets:







      Cash and cash equivalents


$

77,302



$

70,482


      Short-term investments



-




-


      Accounts receivable, net



63,135




98,034


      Prepayment and other current assets



13,103




15,329


Total current assets



153,540




183,845


      Property, plant and equipment, net



242




160


      Intangible assets, net



16,718




20,297


      Deferred tax assets



56




103


      Unamortized produced content, net



1,874




807


      Right-of-use assets



1,298




750


      Prepayment and other non-current assets, net



21,445




1


Total non-current assets



41,633




22,118


TOTAL ASSETS


$

195,173



$

205,963











Liabilities and Equity









Current liabilities:









      Short-term bank loans


$

4,998



$

4,421


      Accounts payable



12,878




6,405


      Advances from customers



536




147


      Accrued liabilities and other payables



2,251




2,632


      Other taxes payable



13,104




19,090


      Lease liabilities current



291




208


      Due to related parties



500




-


      Convertible promissory note - related party



-




-


Total current liabilities



34,558




32,903


      Long-term bank loan



-






      Lease liabilities non-current



1,127




471


      Warrant liability



24




86


Total non-current liabilities



1,151




557


TOTAL LIABILITIES


$

35,709



$

33,460











Equity









      Preferred shares (par value of $0.0001 per share; 2,000,000
      authorized; none issued and outstanding)


$

-



$

-


      Ordinary shares (par value of $0.0001 per share; 200,000,000
      shares authorized as of December 31, 2021 and December
      31,2022; 68,122,402 and 68,124,402 shares issued and
      outstanding as of December 31, 2021 and 2022, respectively)


$

7



$

7


      Additional paid-in capital



25,629




27,009


      Statutory reserve



1,224




1,411


      Retained earnings



123,982




150,685


      Accumulated other comprehensive income(loss)



8,069




(6,684)


TOTAL GLORY STAR NEW MEDIA GROUP HOLDINGS LIMITED
SHAREHOLDERS' EQUITY



158,911




172,428


      Non-controlling interest



553




75


TOTAL EQUITY



159,464




172,503











TOTAL LIABILITIES AND EQUITY


$

195,173



$

205,963


GLORY STAR NEW MEDIA GROUP HOLDINGS LIMITED

CONSOLIDATED STATEMENTS OF OPERATIONS AND

COMPREHENSIVE INCOME (LOSS)

(In U.S. dollars in thousands, except share and per share data)



For the Years Ended December 31,




2020



2021



2022




 (Restated)








Revenues


$

123,763



$

153,012



$

157,079















Operating expenses:













      Cost of revenues



(38,481)




(34,944)




(40,580)


      Selling and marketing



(43,827)




(77,520)




(82,534)


      General and administrative



(10,095)




(3,341)




(5,908)


      Research and development



(691)




(920)




(1,331)


Total operating expenses



(93,094)




(116,725)




(130,353)















Income from operations



30,669




36,287




26,726















Other (expenses) income:













      Interest expense, net



(282)




(513)




(93)


      Change in fair value of warrant liability



19,714




809




(62)


      Other income(expense), net



531




(255)




282


Total other (expenses) income



19,963




41




127















Income before income tax



50,632




36,328




26,853


Income tax expense



(1,673)




(976)




(413)


Net income



48,959




35,352




26,440


Less: net gain (loss) attributable to non-controlling interest



(31)




65




(450)


Net income attributable to Glory Star New Media
Group Holdings
Limited's shareholders


$

48,990



$

35,287



$

26,890















Other comprehensive (loss) income













Unrealized foreign currency translation (loss) gain



6,495




2,945




(13,357)


Comprehensive income



55,454




38,297




13,083


Less: comprehensive gain (loss) attributable to non-controlling interests



(4)




119




(478)


Comprehensive income attributable to Glory Star

New Media Group Holdings Limited's shareholders


$

55,458



$

38,178



$

13,561















Earnings per ordinary share













      Basic


$

0.91



$

0.54



$

0.39















Weighted average shares used in calculating
earnings per ordinary share













      Basic



53,844,237




65,381,186




68,123,870















Earnings per ordinary share













      Dilutive


$

0.83



$

0.54



$

0.39















Weighted average shares used in calculating
earnings per ordinary share













      Dilutive



59,126,237




65,381,186




68,123,870


GLORY STAR NEW MEDIA GROUP HOLDINGS LIMITED

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In U.S. dollars in thousands)





For the Years Ended December 31,




2020



2021



2022




(Restated)








CASH FLOWS FROM OPERATING ACTIVITIES:













          Net income


$

48,959



$

35,352



$

26,440















Adjustments to reconcile net income to net cash
 provided by operating activities:













Allowance (Reversal of allowance) for doubtful
accounts



(1,136)




(268)




440


Depreciation and amortization



2,910




2,090




2,884


Amortization of right-of-use assets



447




426




454


Deferred income tax (benefit) expense



(181)




713




(53)


Share based compensation for employees



5,381




4




-


Share based compensation for non-employees



1,779




181




391


Gains on disposal of a subsidiary



-




(26)




-


Amortization of loan origination fees



93




104




76


Change in fair value of warrant liability



(19,714)




(809)




63


Changes in assets and liabilities













Accounts receivable



(24,043)




19,904




(42,105)


Prepayment and other assets



(19,340)




(10,681)




16,872


Unamortized produced content



442




(537)




940


Accounts payable



2,827




4,750




(5,576)


Advances from customers



(39)




(87)




(356)


Accrued liabilities and other payables



5,177




(9,236)




564


Other taxes payable



5,555




4,964




7,346


Lease liabilities



(376)




(389)




(641)


Net cash provided by operating activities



8,741




46,455




7,739















CASH FLOWS FROM INVESTING ACTIVITIES:













Purchase of property, plant and equipment



(59)




(72)




(25)


Prepayments for acquisition of intangible assets



(2,722)




(2,718)




(7,964)


Cash disposed for sales of subsidiaries



-




(12)




-


(Payments) Return for short term investment



(1,637)




1,751




-


Net cash used in investing activities



(4,418)




(1,051)




(7,989)















CASH FLOWS FROM FINANCING ACTIVITIES:













Proceeds from bank loans



6,228




5,114




6,096


Repayments of bank loans



(724)




(6,818)




(6,244)


Payment of loan origination fees



(146)




(68)




(87)


Contribution from shareholders



-




-




743


Repayments to related Parties



-




(232)




-


Cash acquired from the acquisition of TKK



23




-




-


Proceeds from equity finance



-




15,290




-


Net cash provided by financing activities



5,381




13,286




508















Effect of exchange rate changes



1,108




881




(7,078)















Net increase (decrease) in cash and cash equivalents



10,812




59,571




(6,820)


Cash and cash equivalents, at beginning of year



6,919




17,731




77,302


Cash and cash equivalents, at end of year


$

17,731



$

77,302




70,482















SUPPLEMENTAL DISCLOSURE OF CASH FLOW
 INFORMATION:













Interests paid


$

239



$

336




247