Glory Star Reports Full Year 2022 Financial Results
BEIJING, March 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 | $ | - | $ | - | ||||
Ordinary shares (par value of $0.0001 per share; 200,000,000 | $ | 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 | 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 | $ | 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 | ||||||||||||
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 | ||||||||||||
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 | ||||||||||||
Allowance (Reversal of allowance) for doubtful | (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 | ||||||||||||
Interests paid | $ | 239 | $ | 336 | 247 | |||||||
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