Allied Esports Entertainment (AESE) Reports Q4 Revenues Miss

Allied Esports Entertainment (NASDAQ: AESE) reported Q4 revenues for the quarter came in at $900 thousand versus the consensus estimate of $6.23 million.

Fourth Quarter 2020 Financial Results

• Revenues: Total revenues of $0.9 million decreased 52% in the fourth quarter of 2020 versus the fourth quarter one year prior. This was due to decreased In-person revenue, partially offset by revenue growth in Multiplatform Content.
• Costs and expenses: Total costs and expenses for the fourth quarter of 2020 were $16.6 million, an increase of 135% compared to the fourth quarter of 2019. Costs and expenses increased due to increases in impairment of investments and property and equipment expenses that were not incurred in the prior year period. The increase was partially offset by lower expenses in In-person, selling and marketing, and online operating areas of the business.
• Loss from continuing operations for the quarter was $19.7 million, compared to a loss of $5.8 million in the prior year period. Loss from continuing operations for the fourth quarter of 2020 included a non-cash extinguishment loss on acceleration of debt redemption of $1.7 million that was not incurred in the prior year period as well as a $1.8 million increase in interest expense compared to the fourth quarter of 2019.
• Adjusted EBITDA loss was $3.5 million for the 2020 fourth quarter, as compared to $3.7 million in the fourth quarter of 2019. A reconciliation of the GAAP-basis net loss to adjusted EBITDA is provided in the table at the end of this press release.

Commenting on the preliminary fourth quarter and full year 2020 results, the Company’s CEO, Frank Ng, said, “Despite the unprecedented operating challenges and macro-economic uncertainty encountered throughout most of 2020 resulting from the COVID-19 pandemic, Allied Esports finished the year with a solid performance in the fourth quarter. The In-person pillar of our business model remains the primary near-term growth driver of our Esports business, and this activity was significantly curtailed globally during the pandemic due to operational restrictions, including limitations on social gatherings and other health and safety protocols. However, we made good progress throughout the year conceptualizing and building-out the Multiplatform Content pillar of our business. I believe the work and progress we made will serve us well in the quarters and years ahead.”

Mr. Ng continued, “Total revenues for the fourth quarter of $0.9 million declined from $2.0 million in the fourth quarter last year. During the fourth quarter, Esports generated its first meaningful revenue from Multiplatform Content, which totaled $0.2 million and comprised nearly one-quarter of our fourth quarter Esports revenue. At the bottom line, our adjusted EBITDA loss of $3.5 million for the fourth quarter improved over 3% from an adjusted EBITDA loss of $3.7 million a year ago. I am also pleased with our ability to reduce operating expenses to better align our cost structure with the lower revenues generated during the year. Additionally, we made tremendous progress in 2020 improving our capital structure, as evidenced by a 71% reduction in total bridge and convertible debt during the year and significantly enhanced financial flexibility.”

Mr. Ng concluded, “As we look ahead in 2021, our expectation is that global distribution of COVID-19 vaccines will bring the return of a normalized world—and with it—the recovery of in-person events. We are optimistic that we will soon be operating in an environment where the Company's foundational strides made on the Multiplatform Content pillar of our business in 2020 will come together alongside the resurgence of live events and the return of maximum capacity at our various Esports venues.”

For earnings history and earnings-related data on Allied Esports Entertainment (AESE) click here.

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