EFTA00602500.pdf

REGAN ARTS 2015 Year End Review January 7, 2016 Judith Regan, CEO EFTA00602500 Executive Summary • Preliminary Revenue of $6.3M, +7.5% or $0.4M versus plan, a reserve of $1.2M for returns is included • Through November 38 titles have been shipped via Simon & Schuster (revenue booked in the financials) • 11 Titles have revenue greater than $100k, represents 79% of total revenue • 8% or $0.5M of revenue comes from eBooks • Royalty Advances $3.2M have been paid, $1.75M for books in print and $1.5M not yet printed • Through November $1.0M has been earned against the $1.75M • A reserve of $0.8M is in the accounts to cover any unearned advance • As of October inventory is $0.3M, a reserve of $0.1M is currently held against this balance • During the year $5.1M in funding was received against a plan of $5.1M • Ended the year with $1.1M in the bank • Ended the year with a Gross Margin of 43% versus 37%, positive variance driven by lower PPB and plant expense • Other expenses $0.8M or 17% lower than plan driven by savings in M&P ($0.6M) and lower salaries ($0.2M) • EBIT loss of $1.6M better than plan by $1.1M or 41% EFTA00602501 Revenue (Core) Revenue (Other) Reserve for Returns Direct Expenses PPB Freight Plant Expense Royalties Provision/Direct Charges Gross Margin GM% Other Expenses Third Party - Sales & Distribution (S&S) M&P Salaries Other Overheads EMT Actuals Actuals Actuals Estimate Q12015 Q22015 03 2015 Q42015 FY 2015 874,782 2,366,194 1,326,331 2,707,572 7,274,879 48,600 18,987 115,241 54,137 236,965 0 0 0 (1,223,861) (1,223,861) 923,382 2,385,181 1,441,572 1,537,848 6,287,983 206,825 159,043 318,050 41,043 724,961 5,256 5,102 7,454 4,306 22,118 139,176 86,595 109,357 55,929 391,057 142,050 562,791 306,909 651,199 1,662,949 62,902 170,563 86,245 454,763 774,473 556,209 984,094 828,015 1,207,241 3,575,559 367,173 1,401,087 613,557 330,607 2,712,424 39.8% 58.7% 42.6% 21.5% 43.1% 106,360 296,602 226,763 366,021 995,746 44,120 118,894 84,542 50,325 297,881 516,930 513,963 542,497 577,440 2,150,830 142,783 156,822 360,989 162,096 822,690 810,193 1,086,281 1,214,791 1,155,883 4,267,148 (443,020) 314,806 (601,234) (825,275) (1,554,724) • December results not yet posted, final data to be received end of January from SS'S Plan 412015 Plan 02 2015 Plan 03 2015 Plan Plan Q4 201.5 FY 2015 431,842 2,106,173 1,506,538 1,902,188 5,946,742 0 0 0 (94,742) (94,742) 0 0 0 0 0 431,842 2,106,173 1,506,538 1,807,446 5,852,000 57,293 283,222 220,429 364,625 925,569 6,574 29,091 21,040 28,450 85,155 76,398 274,333 186,449 286,683 823,863 103,642 505,482 361,569 433,787 1,404,480 34,547 168,494 120,523 144,596 468,160 278,455 1,260,622 910,010 1,258,141 3,707,227 153,388 845,552 596,528 549,306 2,144,773 35.5% 40.1% 39.6% 30.4% 36.7% 51,821 252,741 180,785 216,894 702,240 335,000 193,500 278,500 153,000 960,000 579,420 579,420 579,420 579,420 2,317,680 201,900 201,900 201,900 212,900 818,600 1,168,141 1,227,561 1,240,605 1,162,214 4,798,520 (1,014,753) (382,009) (644,077) (612,908) (2,653,747) Variance $ % 1,328,137 22.3% 331,707 N/A (1,223,861) N/A 435,983 7.5% (200,607) -21.7% (63,037) -74.0% (432,806) -52.5% 258,469 18.4% 306,313 65.4% (131,668) -3.6% 567,651 26.5% 293,506 41.8% (662,119) -69.0% (166,850) -7.2% 4,090 0.5% (824,878) -17.2% 1,099,023 41.4% 2 EFTA00602502 Financial Notes & Assumptions • December results not yet available from S&S, revenue currently estimated at $0.7M • December includes a reserve for returns of $1.2M (Brings titles with a return % lower than 30% up to 30%, titles with returns above 30% are excluded) • December PPB and Plant expense based on YTD November Monthly average • December Royalty expense includes a placeholder of $450k to cover profit sharing titles (ISIS, Strong Looks Better & Restless Books) • December Provision for Inventory & Unearned advances includes a placeholder of $250k, will cover any unearned advance exposure of books in print • Other Expenses: • M&P based on 11 month average • Other Overheads based on 11 month average • Third Party Distribution 12% of estimated revenue EFTA00602503 Titles with Revenue above $100k My Fight Strong Looks Better ISIS Out Came the Sun The Road To Happiness How Dante can save the World Bien Cuit Strong Looks Better Ingredients Sporting Guide Empire Units Shipped Revenue Total Sales Units Returned Return $ Net Revenue $ ebook Units ebook Revenue Total Revenue 150,641 2,100,644 15,606 (218,725) 1,881,919 22,952 236,848 2,118,767 84,979 1,162,707 23 (317) 1,162,390 0 0 1,162,390 54,920 400,062 2,767 (20,814) 379,248 12,580 92,752 472,0W 21,455 297,140 7,827 (109,355) 187,785 4,725 39,906 227,691 12,856 177,721 263 (3,583) 174,138 34 222 174,360 12,664 194,709 2,709 (41,863) 152,846 2,001 16,983 169,829 6,637 169,500 0 0 169,500 2 28 169,528 10,016 139,217 0 0 139,217 799 7,265 146,482 7,439 131,691 22 (398) 131,293 236 2,411 133,704 7,359 114,949 4 (61) 114,889 132 1,409 116,297 11,849 117,577 1,088 (10,858) 106,719 15 132 106,851 380,815 5,005,917 30,309 (405,973) 4,599,943 43,476 397,956 4,997,899 • Does not include December 2015 Revenue, data not yet available % Returns -10.4% 0.0% -5.2% -36.8% -2.0% -2L5% 0.0% 0.0% -0.3% -0.1% -9.2% -8.1% 4 EFTA00602504 Royalty Advances above $50k Books in Print Rousey Novels/Memoir 458,334 578,695 (120,361) Bien Cuit 270,000 25,743 244,257 Out Came the Sun 215,000 77,959 137,041 Strong Looks Better Naked 215,000 0 215,000 * How Dante Can Save your Life 150,000 43,838 106,162 Road to Hapiness (Linda Gray) 120,000 48,758 71,242 Why 70,000 0 70,000 * The Art of the Pimp 56,334 14,265 42,069 Sporting Guide 55,000 13,511 41,489 1,609,668 802,769 806,899 * Books Printed in December and/or on Profit Share, expense to be calculated at year end Books Not Yet in Print Drone Warrior 300,000 0 300,000 Gospel of War 100,000 0 100,000 Macklemore 87,500 0 87,500 Rodger Memoir 70,000 0 70,000 Found 68,750 0 68,750 Toback 62,500 0 62,500 KooKooLand 56,667 0 56,667 745,417 0 745,417 EFTA00602505 Inventory as at October 2015 Regan Arts Title Virtual Reality Strong Looks Better Naked Bien Cuit Sporting Guide Mega Weird Empire Jimmie Lee My Fight Art of the Pimp How Dante Can Save your Life Out Came the Sun Allegiance Invisible Girl Wall Street Wars Gluten Ue Uttle Book of Lunch Road To Happiness Badge of Evil Dillie The Deer Lolito Dirty Uttle Secrets of College At Night She Cries Out Came the Sun Depth The Nakeds Immunity The Ue of Do What You Love Invaders Ingredients Journey of the Heroic Parent ISIS Oct-15 Closing Units Oct-15 Stock Value Oct-1S Closing Units Oct-15 Stock Value Restless Books 16,946 70,134 Letters to Yeyito 1,677 2,598 37,143 62,141 A Legend of the Future 1,465 1,931 8,034 42,677 A Planet for Rent 1,007 1,417 6,815 20,883 Where the Bird Sings 383 369 5,575 17,025 Captivity 4 20 11,751 16,300 Between Clay &Dust 3 6 5,060 10,711 4,539 6,342 6,010 10,568 3,737 9,241 4,291 7,806 1,910 5,010 2,248 4,904 4,091 4,206 2,441 4,117 2,439 3,785 1,630 3,522 2,217 3,376 1,912 3,116 2,028 2,852 1,710 2,841 1,544 2,493 1,338 2,170 973 1,923 996 1,572 844 1,274 352 719 397 596 319 511 154 461 52 84 22 10 134,979 317,027 EFTA00602506 Appendix EFTA00602507 Regan Ads My Fight Strong Looks Better ISIS Out Came the Sun The Road To Happiness Bien Cuit How Dante can save the World Strong Looks Better Ingredients Sporting Guide Empire Allegiance DillieThe Deer Dirty Secrets College My Fight signed Edition Do What You Love Gluten Lie Invisible Girl Wall Street Wars Badge of Evil The Invaders At Night She Cries Art of the Pimp Journey of the Heroic Parent The Nakeds Immunity Jimme Lee Little Book of Lunch Depth Lol ito Road To Happiness Mega Weird Mega Weird Virtual Reality Units Shipped Revenue Units Returned Total Sales Return $ Net Revenue $ e Book Units ebook Revenue 150,641 2,100,644 15,606 (218,725) 1,881,919 22,952 236,848 84,979 1,162,707 23 (317) 1,162,3% 0 0 54,920 400,062 2,767 (20,814) 379,248 12,580 92,752 21,455 297,140 7,827 (109,355) 187,785 4,725 39,906 12,856 177,721 263 (3,583) 174,138 34 222 6,637 169,500 0 0 169,503 2 28 12,664 194,709 2,709 (41,863) 152,846 2,001 16,983 10,016 139,217 0 0 139,217 799 7,265 7,439 131,691 22 (398) 131,293 236 2,411 7,359 114,949 4 (61) 114,889 132 1,409 11,849 117,577 1,088 (10,858) 106,719 15 132 8,170 117,529 1,399 (20,051) 97,478 778 6,197 5,891 76,664 0 0 76,664 11 87 6,727 80,385 985 (11,686) 68,699 233 1,731 5,172 68,926 26 (375) 68,551 0 0 7,976 73,370 737 (7,533) 65,838 188 1,495 6,952 87,334 2,149 (27,439) 59,895 969 7,929 9,208 95,170 3,570 (37,144) 58,026 395 2,811 6,337 92,532 2,495 (36,1%) 56,335 178 1,700 6,029 84,017 2,147 (29,791) 54,226 264 2,071 4,773 64,402 851 (11,704) 52,698 2,619 20,430 6,513 84,995 2,594 (34,004) 50,991 295 2,093 9,206 128,681 5,720 (79,242) 49,439 1,923 18,227 4,920 65,708 1,557 (20,953) 44,756 948 3,502 6,806 87,086 3,331 (43,270) 43,816 581 4,680 5,162 69,392 2,134 (28,983) 40,409 1,026 8,028 7,207 108,467 4,935 (74,001) 34,466 108 1,008 3,993 48,948 1,150 (14,766) 34,181 76 621 5,336 69,495 2,881 (37,752) 31,744 742 5,883 4,031 31,438 305 (2,357) 29,080 64 426 2,110 27,200 155 (2,218) 24,982 631 5,104 5,562 64,522 3,894 (45,152) 19,370 0 0 1,907 27,111 996 (14,815) 12,295 98 700 6,799 21,493 8,994 (122,907) (101,414) 0 0 517,602 6,680,780 83,314 (1,108,312) 5,572,468 55,603 492,680 -16.1% -16.6% %Returns -10.4% 0.0% -5.2% -36.8% -2.0% 0.0% -21.5% 0.0% -0.3% -0.1% -9.2% -17.1% 0.0% -14.5% -0.5% -10.3% -31.4% -39.0% -39.1% -35.5% -18.2% -400% -61.6% -31.9% -49.7% -41.8% -68.2% -30.2% -54.3% -7.5% -8.2% -70.0% -54.6% N/A -16.6% • Sales based on 565 for the US, Canada and Australia. Does not include IMF sales distributed outside of 5&S. 8 EFTA00602508 November YTD Revenue - Restless Books All Titles Restless Books A Legend of the Future A Planet for Rent Between Clay and Captivity Don Quixote Letters to Yeyito The Underground Where the Bird Sing Units Shipped Revenue Units Returned Total Sales Return $ Net Revenue $ eBook Units ebook Revenue 2,699 22,044 969 (8,045) 13,999 12 66 3,252 26,894 914 (7,674) 19,220 0 0 1,170 9,045 33 (249) 8,795 0 0 2,174 32,905 1 (16) 32,888 0 0 1,850 21,344 31 (371) 20,973 0 0 1,370 11,323 0 0 11,323 0 0 1,302 10,382 6 (53) 10,329 0 0 3,730 52,520 1,044 (15,280) 37,240 0 0 17,547 186,458 2,998 (31,690) 154,768 12 66 -17.1% -17.0% • Sales based on S&S for the US, Canada and Australia. Does not include any sales distributed outside of S&S. % Returns -36.5% -28.5% -2.8% 0.0% -1.7% 0.0% -0.5% -29.1% -17.0% 9 EFTA00602509 Royalty Advances —All Titles Books in Print Advances Nov YTD Advance Title 2014 2015 Accumulated Earnings Remaining Rousey Novels/Memoir 208,334 250,000 458,334 578,695 (120,361) Bien Cuit 90,000 180,000 270,000 25,743 244,257 Out Came the Sun 160,000 55,000 215,000 77,959 137,041 Strong Looks Better Naked 215,000 215,000 215,000 How Dante Can Save your Life 100,000 50,000 150,000 43,838 106,162 Road to Hapiness (Linda Gray) 120,000 120,000 48,758 71,242 The Art of the Pimp 42,500 13,834 56,334 14,265 42,069 Sporting Guide 45,000 10,000 55,000 13,511 41,489 The Journey of the Heroic Parent 20,000 10,000 30,000 9,288 20,712 Compass of Sympathy (Kermit Roosevelt Allegian 25,000 25,000 20,777 4,223 Dillie the Deer 22,500 22,500 14,545 7,955 Age-Free (Linda Gray) 20,000 20,000 0 20,000 The Lie of Doing What you Love 10,000 10,000 20,000 15,522 4,478 Ingredients 15,000 15,000 20,764 (5,764) The Gluten Lie 10,000 3,834 13,834 13,275 559 The Dirty Little Secret of Getting Into Top College 5,000 8,518 13,518 13,852 (334) Megalis 12,000 12,000 11,280 720 Invaders 10,000 10,000 12,784 (2,784) Immunity 10,000 10,000 9,646 354 Depth 10,000 10,000 7,353 2,647 Jimmie Lee and James 2,500 2,500 5,000 6,798 (1,798) The Nakeds 2,500 2,500 9,406 (6,906) Lolito 1,250 1,250 5,692 (4,442) The Little Book of Lunch 1,250 1,250 4,328 (3,078) 774,084 977,435 1,751,519 978,079 773,441 EFTA00602510 Royalty Advances — Books Not Yet in Print I Advances Nov YTD Advance Title 2014 2015 Accumulated Earnings Remaining Drone Warrior 150,000 150,000 300,000 0 300,000 Gospel of War 100,000 100,000 0 100,000 Macklemore 87,50O 87,500 0 87,500 Rodger Memoir 70,000 70,000 0 70,000 Why 70,000 70,000 0 70,000 Found 68,750 68,750 0 68,750 Toback 62,500 62,500 0 62,500 KooKooLand 28,333 28,333 56,667 0 56,667 Ford Memoir 36,667 36,667 0 36,667 Doll Parts 36,000 36,000 0 36,000 This is the Truth 33,332 33,332 0 33,332 Rewilding 31,250 31,250 0 31,250 Inherited Disorders 30,000 30,000 0 30,000 Parenting Book/Who Are You/Fashion Book 30,000 30,000 0 30,000 Book on Pakistan 25,000 25,000 0 25,000 Kendall & Kylie Jenner for Lex and Livia Series of 24,000 24,000 0 24,000 Deceptive Desserts 20,000 20,000 0 20,000 Fat-Burning Machine 20,000 20,000 0 20,000 Mad at Something 20,000 20,000 0 20,000 Man of La Salsa 20,000 20,000 0 20,000 McConnell 20,000 20,000 0 20,000 The Curse of Beauty 20,000 20,000 0 20,000 The Limits of Bad Behaviour 20,000 20,000 0 20,000 The Malibu Biodynamic Diet 10,000 10,000 20,000 0 20,000 Mark Oldman Book 18,750 18,750 0 18,750 Food Stuff 15,000 15,000 0 15,000 Tea with Dutches 15,000 15,000 0 15,000 The 5-6-7-8 Diet 15,000 15,000 0 15,000 Untitled: Dance Fitness Book 15,000 15,000 0 15,000 Work by Peter Arno 15,000 15,000 0 15,000 EFTA00602511 Royalty Advances — Books Not Yet in Print (continued) Advances Nov YTD Advance Title 2014 2015 Accumulated Earnings Remaining Mrs Ravenbach's Way 10,000 4,500 14,500 0 14,500 Police Brutality 12,500 12,500 0 12,500 American Fat 10,000 10,000 0 10,000 Founders & Failures 10,000 10,000 0 10,000 My Enemy/My brother 10,000 10,000 0 10,000 Trousdale Estates 10,000 10,000 0 10,000 We Tortures some folks 10,000 10,000 0 10,000 Woman on the Front Lines 10,000 10,000 0 10,000 The Hollywood Backdrop 9,250 9,250 0 9,250 The Art of Hollywood Backdroping 8,500 8,500 0 8,500 The tam Principle 7,500 7,500 0 7,500 Carefrontation 7,083 7,083 0 7,083 Books that changed my life 7,000 7,000 0 7,000 The Books That Changed my Life 7,000 7,000 0 7,000 Stand Up and Fight 6,000 6,000 0 6,000 Why Bernie Sanders Matters 6,000 6,000 0 6,000 Frosen Place 5,000 5,000 0 5,000 The Casual Sex Project 5,000 5,000 0 5,000 The Unfinished Palazzo 5,000 5,000 0 5,000 Work 2/ Waclawiak 5,000 5,000 0 5,000 The Singing Bone 4,688 4,688 0 4,688 Dirty Little Secrets: Dream Job 4,423 4,423 0 4,423 Upstate Girls 2,000 2,000 0 2,000 Califrontation 1,250 1,250 0 1,250 597,250 895,859 1,493,109 0 1,493,109 1 EFTA00602512