Boca Raton, Florida, Nov. 20, 2019 (GLOBE NEWSWIRE) -- via NEWMEDIAWIRE -- Grom Social Enterprises (OTCQB: GRMM) (the “Company”), developer of Grom Social, a leading social media platform for kids and original children’s entertainment content provider, reported results for the third quarter ended September 30, 2019.
Financial Summary
| ($ in millions) | Q3 2019 | Q3 2018 | Change (%) |
| Sales | $2.2 | $2.1 | 8.8% |
| Gross Profit | $1.2 | $1.2 | (2.8)% |
| Gross Profit Margin | 53.9% | 60.0% | (6.1)% |
| Operating Expenses | $1.7 | $2.0 | (18.6)% |
| Income (Loss) from Operations | $(0.5) | $(0.8) | (43.0)% |
| Net Income (Loss) Attributable to Common Shareholders | $(0.9) | $(1.1) | (22.7)% |
Recent Operational Highlights
- The third quarter of 2019 was highlighted by continued adoption of our Grom Social COPPA compliant platform.
- Increased Grom Social’s original short-form content library to over 1200 hours of exclusive live streaming content.
- Q3 2019 Losses from Operations reduced by 43%.
Management Commentary
"With our COPPA-compliant Grom Social mobile app launched earlier this year and the large content library we have put in place, we are now in a strong position to accelerate our user growth, while efficiently monetizing the platform in the near-term,” said Darren Marks, Chairman and Chief Executive Officer of Grom Social Enterprises, Inc.
Third Quarter 2019 Financial Results
Revenue for the third quarter of 2019 increased 8.8% to $2.2 million, as compared to $2.1 million in the third quarter of 2018. The increase is primarily attributable to an increase of approximately $290,000 in revenues from our TDA animation business, offset in part by a decrease in revenues from our NetSpective web filtering business of approximately $106,000.
Gross profit in the third quarter of 2019 was $1.2 million, or 53.9% of revenues, as compared to $1.2 million, or 60% of revenues, in the third quarter of 2018. The decrease in gross margin is primarily attributable to more compressed margins in our animation business; offset in part by improved margins in our web filtering division.
Total operating expenses decreased 18.6% to $1.7 million in the third quarter of 2019, as compared to $2.0 million in the third quarter of 2018. The decrease in operating expenses was primary attributable to a decrease in general and administrative expenses, which was a result of general cost cutting efforts undertaken by the Company.
Net loss attributable to common shareholders in the third quarter of 2019 totaled $0.9 million, or $(0.01) per share, compared to a net loss of $1.1 million, or $(0.01) per share, in the third quarter of 2018.
Cash totaled $0.6 million at September 30, 2019, as compared to $0.9 million at June 30, 2019 and $0.6 million at December 31, 2018.
About Grom Social Enterprises, Inc.
Grom Social Enterprises, Inc. (OTCQB: GRMM) is a leading social media platform and original content provider of entertainment for children 13 years and under; providing safe and secure digital environments for kids that can be monitored by their parents or guardians. The Company has several operating subsidiaries, including Grom Social, which delivers its content through mobile and desktop environments (web portal and apps) that entertain children, let them interact with friends, access relevant news, and play proprietary games, while teaching them about being a good digital citizen. The Company owns and operates Top Draw Animation, Inc., which produces award-winning animation content for some of the largest international media companies in the world. Grom Social Enterprises also includes Grom Educational Services, which has provided web filtering services for K-12 schools, government and private business. For more information, please visit gromsocial.com.
Safe Harbor Statement
This press release may contain forward-looking statements about Grom Social Enterprises activities that are based on current expectations, forecasts, and assumptions that involve risks and uncertainties that could cause actual outcomes and results to differ materially from those anticipated or expected, including statements related to the amount and timing of expected revenues and any payment of dividends on our common stock, statements related to our financial performance, expected income, distributions, and future growth for upcoming quarterly and annual periods. Actual results and the timing of certain events could differ materially from those projected in or contemplated by the forward-looking statements due to a number of factors. Among other matters, the Company may not be able to sustain growth or achieve profitability based upon many factors including, but not limited to general stock market conditions. We have incurred and will continue to incur significant expenses in the expansion of our existing and new service lines, noting there is no assurance that we will generate enough revenues to offset those costs in both the near and long-term. Additional service offerings may expose us to additional legal and regulatory costs and unknown exposure(s) based upon the various geopolitical locations where we will be providing services, the impact of which cannot be predicted at this time. All forward-looking statements speak only as of the date of this press release. We undertake no obligation to update any forward-looking statements or other information contained herein. Stockholders and potential investors should not place undue reliance on these forward-looking statements. Although we believe that our plans, intentions, and expectations reflected in or suggested by the forward-looking statements in this report are reasonable, we cannot assure stockholders and potential investors that these plans, intentions or expectations will be achieved. Except to the extent required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, a change in events, conditions, circumstances or assumptions underlying such statements, or otherwise.