Genius Brands International Inc. narrowed its net loss and significantly increased revenue last year.
The Beverly Hills-based children’s content creator and distributor reported this month a net loss of $46 million (-$1.45 a share) for the full year ending on Dec. 31, compared with a net loss of $126 million (-$4.24) in the same period a year earlier. Revenue increased by 691% from the prior year to $63 million.
“As a result of the company’s anticipated growth, synergies of the recent acquisitions, expansion of the distribution network, new content production underway and slated to begin, as well expense reductions that are already underway, the company believes it is making significant progress towards its goal of positive cash flow from operations,” the company said.
Chief Executive Andy Heyward in a letter to shareholders outlining the business, said he believed that Genius Brands maintained adequate levels of cash to conduct its business model for the foreseeable future.
“Unfortunately, at the same time we have seen our stock price decline,” Heyward added. “While we have no direct control over the stock price, this is not acceptable to us, and we are taking steps to maximize shareholder value.”
Shares in Genius Brands have lost about 43% of their value between the beginning of the year and April 18 when they closed at $2.86.
Heyward attributed the decrease in share price to “illegal naked short selling” compounded by a reverse stock split done by the company to keep its stock price above the Nasdaq-required $1 a share.
To address both those issues, the company has taken steps including working with a firm to let compliance officers of all the major trading desks know about the illegality of naked short selling; reducing expenses and headcount; eliminating office space overhead leased prior to the pandemic as employees continue to work remotely; and maximizing opportunities to cut production cost, among others.
“Having personally overseen the implementation of these steps, I can report to our shareholders that every single person in the Genius Brands group is focused not just on revenue growth, but also on bringing the company to positive earnings,” Heyward said in the letter.
Among the company’s shows are the artificial intelligence-created “Warren Buffet’s Secret Millionaires Club” and “Shaq’s Garage,” an animated series featuring four-time NBA champion Shaquille O’Neal. Inspired by Shaq’s real-life love of cars, “Shaq’s Garage” is a modern-day action series where Shaq brings his “family” of cars, known as the Shaq PA, to life.
Genius Brands also signed a deal with The Walt Disney Co. and Marvel Entertainment to license the likeness of comic book icon Stan Lee for Marvel movies and Disney theme parks, with the Burbank entertainment giant paying ongoing royalties to the company.
“We are working tirelessly to unlock the timeless and global value in the children’s assets we are aggregating, so hopefully it will be reflected in our stock price,” Heyward wrote in the letter. “I believe we are on our way to achieving that goal.”
