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Glory Star Reports Full Year 2021 Financial Results

Glory Star Reports Full Year 2021 Financial Results

BEIJING, March 8, 2022 /PRNewswire/ -- Glory Star New Media Group Holdings Limited (NASDAQ: GSMG) ("Glory Star" or the "Company"), 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, 2021.

Full Year 2021 Operating Highlights

  • Downloads of the CHEERS App[1] was approximately 271 million as of December 31, 2021, compared to approximately 169 million as of December 31, 2020. 
  • Monthly active users ("MAUs")[2] of the CHEERS App increased to approximately 47.6 million from 37.7 million for the full year of 2020. 
  • Gross Merchandise Value (GMV)[3] of the Company's CHEERS App was approximately US$409 million, compared to US$132 million for the full year of 2020.

Full Year 2021 Financial Highlights

  • Total revenues increased by 23.6% to US$153.0 million for the full year of 2021 from US$123.8 million for the full year of 2020. 
  • Income from operations increased by 18.3% to US$36.3 million for the full year of 2021 from US$30.7 million for the full year of 2020. 
  • Net cash provided by operating activities increased by 431.5% to US$46.5 million for the full year of 2021 from US$8.7 million for the full year of 2020. 

[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.

[3] Glory Star defines gross merchandise value, or GMV, as the total value of all orders for products and services placed in the Company's online direct sales business and on the Company's online marketplaces, regardless of whether the goods are sold or delivered or whether the goods are returned.

Mr. Bing Zhang, Chairman and Chief Executive Officer of Glory Star, commented, "We are excited to close out a successful year with robust financial results that reflect the significant momentum in our business. Our total revenues increased by 23.6% to US$153.0 million for the full year of 2021, and the total downloads of our CHEERS App increased 60% to 271 million as of December 31, 2021. We have sustained our financial and operational performance and continued our growth as we continue to advance towards our business strategy through optimizing our content ecosystem, improving our users' experiences, expanding our partnership base, and enhancing brand awareness. We made considerable progress in enriching the product offerings on our CHEERS e-Mall platform and growing customer base despite the challenging environment in 2021, which reflects our team's effective execution of our business strategy. For 2022, we will continue expanding our CHEERS ecosystem, implementing our new metaverse retail strategy, and developing our CheerChat application, our overseas social audio application, which is anticipated to launch in 2022. We also plan to build and launch metaverse experience centers and are in the process of identifying locations in Beijing, China, for our first Metaverse Experience Center. Moving forward, we will continue focusing on long term growth opportunities and value generation, while investing in growth initiatives, optimizing our content offerings, deepening user engagement, and scaling up our business modules."

Mr. Zhang continued, "Our innovative business in the live streaming segment of our operations continues to see further growth due to market demand and the evolution of technology in China. Live e-commerce continues to evolve and boom in China, and its growth has been intensified as a result of the COVID-19 pandemic. We are emerging from the sprint of past years even stronger and more ambitious, since being a pioneer of live e-commerce in China enables us to go farther faster for merchants and buyers alike. In 2022, we will be steadfast on making e-commerce easier for users by continuing to build high-performing infrastructure and innovative features on CHEERS App and increasing the number of SKUs carried on our CHEERS e-Mall platform, which combined will yield a powerful and trusted e-commerce chain that future-proofs our users in the years to come and benefits Glory Star over time. We are striving to become an e-commerce engine for brands who want to build a direct connection with customers and have a widespread market reach."

Mr. Perry Lu, Chief Financial Officer of Glory Star, added, "The year of 2021 was a year of rapid growth for the Company, which is in-line with our expectations. The increase of our total revenue was due to enhanced brand recognition, improved user traffic generation, and growth of advertisements on the Company's CHEERS platform. We upgraded our business ecosystem and refined our business strategy, which met our users' demand and expectation. We believe that the efforts we put in place and the strategic development we are taking will bring us great improvements in profitability continuously and create long-term value for our shareholders."

Full Year 2021 Selected Financial Results

Revenues increased by 23.6% to US$153.0 million for the full year of 2021, from US$123.8 million for the full year of 2020, which was mainly due to (1) the Company's effort to enhance brand recognition and user traffic generation, the Company succeeded to increase its user base and, in turn, expanding its attractiveness to CHEERS e-Mall customers, consequently, leading to the high volume of business orders; and (2) advertisements on the Company's CHEERS platform achieved much more exposure because of the numerously increasing active users, which led to an increased price of each piece of advertising. In addition, the Company has seen a rapid growth in advertising demand and advertising volume for advertisements on its CHEERS platform, online short videos and live streaming shows, which led to the increase in advertising service orders. Advertising revenues increased by 27.0% to US$132.9 million for the full year of 2021, from $104.7 million for the full year of 2020. CHEERS e-Mall marketplace service revenues increased by 348.7% to US$6.8 million for the full year of 2021, from $1.5 million for the full year of 2020.

Total operating expenses increased by 25.4% to US$116.7 million for the full year of 2021, from US$93.1 million for the full year of 2020.

  • Cost of revenues decreased by 9.2% to US$34.9 million for the full year of 2021, from US$38.5 million for the full year of 2020, mainly due to the decrease of content production costs and channel cost of the Company's traditional media business. The decrease was partially offset by the increase of production cost of advertisements on the Company's CHEERS platform, online short videos and live streaming shows in line with its increased advertising revenue on them. 
  • Selling and marketing expenses increased by 76.9% to US$77.5 million for the full year of 2021, from US$43.8 million for the full year of 2020. As a percentage of revenues, selling and marketing expenses for the full year of 2021 were 50.7% as compared to 35.4% for the full year of 2020. The increase was 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 decreased by 66.9% to US$3.3 million for the full year of 2021, from US$10.1 million for the full year of 2020. As a percentage of revenues, general and administrative expenses for the full year of 2021 were 2.2% compared to 8.2% for the full year of 2020. In 2020, the Company issued stock options to certain employees for their contribution to the business as well as to professional service providers for their efforts related to the SPAC business combination. The Company did not issue any options for the year ended 2021.

Income from operations increased by 18.3% to US$36.3 million for the full year of 2021, from US$30.7 million for the full year of 2020. Operating margin was 23.7% for the full year of 2021, compared to 24.8% for full year of 2020.

As of December 31, 2021, the Company had cash and cash equivalents of US$77.3 million, compared to US$17.7 million as of December 31, 2020.

About Glory Star

Since its establishment in 2016, Glory Star has been laser focused on developing an ecosystem for its users that incorporates quality content, e-commerce, social networking, and gaming. The Company continues to integrate its cutting edge blockchain technologies, massive user base from its CHEERS ecosystem, quality content offerings, and its well-established e-commerce platform, and through the right application of 5G, AR, VR and NFT technologies to develop a metaverse boasting a wide range of "online + offline" and "virtual + reality" scenarios. Glory Star's CHEERS Video and e-Mall platforms provide a solid foundation for it to rapidly develop different entertainment and shopping applications for the metaverse. Glory Star also provides a suite of tools for its users to facilitate the development of new content by creators. The Company is remaining at the forefront of disrupting the way new media and e-commerce is operated. For more information, please visit https://ir.gsmg.co/.

Safe Harbor Statement

Certain statements made in this release are "forward looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. When used in this press release, the words "estimates," "projected," "expects," "anticipates," "forecasts," "plans," "intends," "believes," "seeks," "may," "will," "should," "future," "propose" and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements. These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside the Company's control, that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements. Important factors, among others, are: the ability to manage growth; ability to identify and integrate other future acquisitions; ability to obtain additional financing in the future to fund capital expenditures; fluctuations in general economic and business conditions; costs or other factors adversely affecting our profitability; litigation involving patents, intellectual property, and other matters; potential changes in the legislative and regulatory environment; a pandemic or epidemic; the occurrence of any event, change or other circumstances that could affect the Company's ability to continue successful development and launch of its metaverse experience centers; the possibility that the Company may not succeed in developing its new lines of businesses due to, among other things, changes in the business environment, competition, changes in regulation, or other economic and policy factors;, the possibility that the Company's new lines of business may be adversely affected by other economic, business, and/or competitive factors; other factors, risks and uncertainties set forth in documents filed by the Company with the Securities and Exchange Commission from time to time, including the Company's latest Annual Report on Form 20-F filed with the SEC on March 8, 2022. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. Such information speaks only as of the date of this release.

For investor and media inquiries, please contact:

Investor Relations
Glory Star New Media Group Holdings Limited
Yida Ye
Email: yeyida@gsmg.co 

Ascent Investor Relations LLC
Tina Xiao
Tel: +1 (917) 609-0333
Email: tina.xiao@ascent-ir.com

GLORY STAR NEW MEDIA GROUP HOLDINGS LIMITED


CONSOLIDATED BALANCE SHEETS


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






December 31,

2020



December 31,

2021




(Restated)












Assets







Current assets:







Cash and cash equivalents


$

17,731



$

77,302


Short-term investments



1,732




-


Accounts receivable, net



81,110




63,135


Prepayment and other current assets



2,544




13,103


Total current assets



103,117




153,540


Property, plant and equipment, net



251




242


Intangible assets, net



15,632




16,718


Deferred tax assets



760




56


Unamortized produced content, net



1,300




1,874


Right-of-use assets



1,689




1,298


Prepayment and other non-current assets, net



20,647




21,445


Total non-current assets



40,279




41,633


TOTAL ASSETS


$

143,396



$

195,173











Liabilities and Equity









Current liabilities:









Short-term bank loans


$

5,160



$

4,998


Accounts payable



7,887




12,878


Advances from customers



609




536


Accrued liabilities and other payables



11,291




2,251


Other taxes payable



7,894




13,104


Lease liabilities current



385




291


Due to related parties



730




500


Convertible promissory note - related party



1,400




-


Total current liabilities



35,356




34,558


Long-term bank loan



1,374




-


Lease liabilities non-current



1,386




1,127


Warrant liability



833




24


Total non-current liabilities



3,593




1,151


TOTAL LIABILITIES


$

38,949



$

35,709











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, 2020 and December 31,2021; 57,886,352 and 68,122,402
     shares issued and outstanding as of December 31, 2020 and December 31,
     2021, respectively)


$

6



$

7


Additional paid-in capital



9,159




25,629


Statutory reserve



648




1,224


Retained earnings



89,271




123,982


Accumulated other comprehensive income



4,892




8,069


TOTAL GLORY STAR NEW MEDIA GROUP HOLDINGS LIMITED
  SHAREHOLDERS' EQUITY



103,976




158,911


Non-controlling interest



471




553


TOTAL EQUITY



104,447




159,464











TOTAL LIABILITIES AND EQUITY


$

143,396



$

195,173


 

 

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,




2019



2020



2021







(Restated)





Revenues


$

65,777



$

123,763



$

153,012















Operating expenses:













Cost of revenues



(31,901)




(38,481)




(34,944)


Selling and marketing



(3,154)




(43,827)




(77,520)


General and administrative



(3,134)




(10,095)




(3,341)


Research and development



(749)




(691)




(920)


Total operating expenses



(38,938)




(93,094)




(116,725)















Income from operations



26,839




30,669




36,287















Other (expenses) income:













Interest expense, net



(295)




(282)




(513)


Change in fair value of warrant liability



-




19,714




809


Other income(expense), net



50




531




(255)


Total other (expenses) income



(245)




19,963




41















Income before income tax



26,594




50,632




36,328


Income tax expense



(191)




(1,673)




(976)


Net income



26,403




48,959




35,352


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



80




(31)




65


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


$

26,323



$

48,990



$

35,287















Other comprehensive (loss) income













Unrealized foreign currency translation (loss) gain



(974)




6,495




2,945


Comprehensive income



25,429




55,454




38,297


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



74




(4)




119


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


$

25,355



$

55,458



$

38,178















Earnings per ordinary share













Basic


$

0.64



$

0.91



$

0.54















Weighted average shares used in calculating earnings per ordinary share













Basic



41,204,025




53,844,237




65,381,186















Earnings per ordinary share













Dilutive


$

0.57



$

0.83



$

0.54















Weighted average shares used in calculating earnings per ordinary share













Dilutive



46,484,025




59,126,237




65,381,186


 

 

GLORY STAR NEW MEDIA GROUP HOLDINGS LIMITED


CONSOLIDATED STATEMENTS OF CASH FLOWS


(In U.S. dollars in thousands)






For the Years Ended

December 31,




2019



2020



2021







(Restated)





CASH FLOWS FROM OPERATING ACTIVITIES:










Net income


$

26,403



$

48,959



$

35,352















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













Allowance (Reversal of allowance) for doubtful accounts



188




(1,136)




(268)


Depreciation and amortization



739




2,910




2,090


Amortization of right-of-use assets



314




447




426


Deferred income tax (benefit) expense



190




(181)




713


Share based compensation for employees



-




5,381




4


Share based compensation for non-employees



-




1,779




181


Gains on disposal of a subsidiary



-




-




(26)


Amortization of loan origination fees



-




93




104


Change in fair value of warrant liability



-




(19,714)




(809)


Changes in assets and liabilities













Accounts receivable



(12,705)




(24,043)




19,904


Prepayment and other assets



4,549




(19,340)




(10,681)


Unamortized produced content



1,261




442




(537)


Accounts payable



3,925




2,827




4,750


Advances from customers



372




(39)




(87)


Accrued liabilities and other payables



449




5,177




(9,236)


Other taxes payable



717




5,555




4,964


Lease liabilities



(310)




(376)




(389)


Net cash provided by operating activities



26,092




8,741




46,455















CASH FLOWS FROM INVESTING ACTIVITIES:













Purchase of property, plant and equipment



(7)




(59)




(72)


Prepayments for acquisition of intangible assets



(15,311)




(2,722)




(2,718)


Cash disposed for sales of subsidiaries



-




-




(12)


(Payments) Return for short term investment



-




(1,637)




1,751


Net cash used in investing activities



(15,318)




(4,418)




(1,051)















CASH FLOWS FROM FINANCING ACTIVITIES:













Proceeds from bank loans



(9,409)




6,228




5,114


Repayments of bank loans



-




(724)




(6,818)


Payment of loan origination fees



-




(146)




(68)


Contribution from shareholders



3,185




-




-


Repayments to related Parties



-




-




(232)


Cash acquired from the acquisition of TKK



-




23




-


Proceeds from equity finance



-




-




15,290


Net cash (used in) provided by financing activities



(6,224)




5,381




13,286















Effect of exchange rate changes



(68)




1,108




881















Net increase in cash and cash equivalents



4,482




10,812




59,571


Cash and cash equivalents, at beginning of year



2,437




6,919




17,731


Cash and cash equivalents, at end of year


$

6,919



$

17,731



$

77,302















SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:













Interests paid


$

287



$

239



$

336


Right of use assets obtained in exchange for operating lease obligations


$

2,339




-




-


 

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