BEIJING, March 22, 2023 /PRNewswire/ -- Glory Star New Media Group Holdings Limited, ("Glory Star" or the "Company") (NASDAQ:GSMG), 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, 2022.

Full Year 2022 Operating Highlights

Downloads of the CHEERS App^[1] was approximately 377 million as of December 31, 2022, compared to approximately 271 million as of December 31, 2021.
Monthly active users ("MAUs") ^[2] of the CHEERS App increased to approximately 51.5 million from 47.6 million for the full year of 2022.
Repurchase Rate ("RPR") for CHEERS e-Mall was approximately 34.5%.
Daily Time Spent ("DTS") on CHEERS Video was approximately 56 minutes.

Full Year 2022 Financial Highlights

Total revenues reached $157.1 million for the full year of 2022.
Net Income reached $26.4 million for the full year of 2022.

^[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.

Mr. Bing Zhang, Chairman and Chief Executive Officer of Glory Star, commented, "2022 was a challenging year in light of significant COVID and macro headwinds, while our content production capacity and e-commerce logistics business were dampened throughout the year, we still manage to show great resilience in our business along with large increase in downloads of our CHEERS App from approximately 271 million to 377 million, in monthly active users of the CHEERS App to approximately 51.5 million from 47.6 million for the full year of 2022."

"As an internet Company, we generate most revenue from online business and were able to quickly adapt and maintain our revenue at $157 million for the full year of 2022, compared to $153 million for 2021, mainly benefited from advertising business. The Company also posted net income of $26.4 million amid great uncertainties posed by the macro-environment for the past year. Looking ahead, we remain confident in the long-term growth of our business with an emphasis on opportunities to deploy solutions across multiple business strings at scale. We will further expand our mobile and online business by creating a CHEERS ecosystem to add further value as our business looks to rebound in the new year."

Full Year 2022 Selected Financial Results

Revenues

Our revenues in the year of 2022 were $157 million compared to $153 million in the same period of 2021, which approximately maintained at the same level. Despite the uncertain external environment, the Company was able to enhance brand recognition and user traffic generation, leading to more exposure and high popularity of our apps, consequently, gaining a competitive edge during the fiscal year of 2022.

Our biggest source of revenue is Advertising revenue, $152 million for the year ended December 31, 2022, which is a 14.4% increase as compared with that of the year ended December 31, 2021.

Operating expenses

Operating expenses consists of cost of revenues, selling and marketing, general and administrative and research and development expense.

- Cost of revenues increased to $40.6 million, for the year ended December 31, 2022 from $34.9 million for year ended December 31, 2021, mainly attributed by the production cost, as a result of our continued investment in quality content. That helps to gain and secure our competitive edge in the industry.

- Sales and marketing expenses increased by $5 million, to $82.5 million for the year ended December 31, 2022 from $77.5 million for the year ended December 31, 2021, 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 increased by $2.6 million, or 76.8%, to $6.0 million for the year ended December 31, 2022 from $3.3 million for the year ended December 31, 2021 mainly attributed by recording more allowance for credit loss for the year ended December 31, 2022.

- Research and development expenses for the years ended December 31, 2021 and 2022 were $0.9 million and $1.3 million, respectively. Such increase was primarily due to the continued investment in the IT infrastructure, user-friendliness upgrades, and continual implementation on content driven strategies.

Net income

As a result of the foregoing, we had a net income of $26.4 million (including the revaluation gain of warrant liability related to private warrants) in 2022, as compared to a net income of $35.4 million (including the revaluation gain of warrant liability related to private warrants) in 2021.

Cash and cash equivalents

As of December 31, 2022, the Company had cash and cash equivalents of $70.5 million, compared to US$77.3 million as of December 31, 2021.

About Glory Star

Since its establishment in 2016, Glory Star has been 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 http://ir.gsmg.co/.

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. Forward-looking statements involve inherent risks and uncertainties and assumptions. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement. All information provided in this press release is as of the date of this press release, and Glory Star does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

For more information, please contact:

Wealth Financial Services LLC

Connie Kang

Partner

Email: ckang@wealthfsllc.com

Tel: +86 1381 185 7742 (CN)

GLORY STAR NEW MEDIA GROUP HOLDINGS LIMITED
CONSOLIDATED BALANCE SHEETS
(In U.S. dollars in thousands, except share and per share data)

	December 31, 2021		December 31, 2022

Assets
Current assets:
Cash and cash equivalents	$	77,302	$	70,482
Short-term investments		-		-
Accounts receivable, net		63,135		98,034
Prepayment and other current assets		13,103		15,329
Total current assets		153,540		183,845
Property, plant and equipment, net		242		160
Intangible assets, net		16,718		20,297
Deferred tax assets		56		103
Unamortized produced content, net		1,874		807
Right-of-use assets		1,298		750
Prepayment and other non-current assets, net		21,445		1
Total non-current assets		41,633		22,118
TOTAL ASSETS	$	195,173	$	205,963

Liabilities and Equity
Current liabilities:
Short-term bank loans	$	4,998	$	4,421
Accounts payable		12,878		6,405
Advances from customers		536		147
Accrued liabilities and other payables		2,251		2,632
Other taxes payable		13,104		19,090
Lease liabilities current		291		208
Due to related parties		500		-
Convertible promissory note - related party		-		-
Total current liabilities		34,558		32,903
Long-term bank loan		-
Lease liabilities non-current		1,127		471
Warrant liability		24		86
Total non-current liabilities		1,151		557
TOTAL LIABILITIES	$	35,709	$	33,460

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, 2021 and December 31,2022; 68,122,402 and 68,124,402 shares issued and outstanding as of December 31, 2021 and 2022, respectively)	$	7	$	7
Additional paid-in capital		25,629		27,009
Statutory reserve		1,224		1,411
Retained earnings		123,982		150,685
Accumulated other comprehensive income(loss)		8,069		(6,684)
TOTAL GLORY STAR NEW MEDIA GROUP HOLDINGS LIMITED SHAREHOLDERS' EQUITY		158,911		172,428
Non-controlling interest		553		75
TOTAL EQUITY		159,464		172,503

TOTAL LIABILITIES AND EQUITY	$	195,173	$	205,963

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,
	2020		2021		2022
	(Restated)
Revenues	$	123,763	$	153,012	$	157,079

Operating expenses:
Cost of revenues		(38,481)		(34,944)		(40,580)
Selling and marketing		(43,827)		(77,520)		(82,534)
General and administrative		(10,095)		(3,341)		(5,908)
Research and development		(691)		(920)		(1,331)
Total operating expenses		(93,094)		(116,725)		(130,353)

Income from operations		30,669		36,287		26,726

Other (expenses) income:
Interest expense, net		(282)		(513)		(93)
Change in fair value of warrant liability		19,714		809		(62)
Other income(expense), net		531		(255)		282
Total other (expenses) income		19,963		41		127

Income before income tax		50,632		36,328		26,853
Income tax expense		(1,673)		(976)		(413)
Net income		48,959		35,352		26,440
Less: net gain (loss) attributable to non-controlling interest		(31)		65		(450)
Net income attributable to Glory Star New Media Group Holdings Limited's shareholders	$	48,990	$	35,287	$	26,890

Other comprehensive (loss) income
Unrealized foreign currency translation (loss) gain		6,495		2,945		(13,357)
Comprehensive income		55,454		38,297		13,083
Less: comprehensive gain (loss) attributable to non-controlling interests		(4)		119		(478)
Comprehensive income attributable to Glory Star New Media Group Holdings Limited's shareholders	$	55,458	$	38,178	$	13,561

Earnings per ordinary share
Basic	$	0.91	$	0.54	$	0.39

Weighted average shares used in calculating earnings per ordinary share
Basic		53,844,237		65,381,186		68,123,870

Earnings per ordinary share
Dilutive	$	0.83	$	0.54	$	0.39

Weighted average shares used in calculating earnings per ordinary share
Dilutive		59,126,237		65,381,186		68,123,870

GLORY STAR NEW MEDIA GROUP HOLDINGS LIMITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In U.S. dollars in thousands)


	For the Years Ended December 31,
	2020		2021		2022
	(Restated)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	48,959	$	35,352	$	26,440

Adjustments to reconcile net income to net cash provided by operating activities:
Allowance (Reversal of allowance) for doubtful accounts		(1,136)		(268)		440
Depreciation and amortization		2,910		2,090		2,884
Amortization of right-of-use assets		447		426		454
Deferred income tax (benefit) expense		(181)		713		(53)
Share based compensation for employees		5,381		4		-
Share based compensation for non-employees		1,779		181		391
Gains on disposal of a subsidiary		-		(26)		-
Amortization of loan origination fees		93		104		76
Change in fair value of warrant liability		(19,714)		(809)		63
Changes in assets and liabilities
Accounts receivable		(24,043)		19,904		(42,105)
Prepayment and other assets		(19,340)		(10,681)		16,872
Unamortized produced content		442		(537)		940
Accounts payable		2,827		4,750		(5,576)
Advances from customers		(39)		(87)		(356)
Accrued liabilities and other payables		5,177		(9,236)		564
Other taxes payable		5,555		4,964		7,346
Lease liabilities		(376)		(389)		(641)
Net cash provided by operating activities		8,741		46,455		7,739

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and equipment		(59)		(72)		(25)
Prepayments for acquisition of intangible assets		(2,722)		(2,718)		(7,964)
Cash disposed for sales of subsidiaries		-		(12)		-
(Payments) Return for short term investment		(1,637)		1,751		-
Net cash used in investing activities		(4,418)		(1,051)		(7,989)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from bank loans		6,228		5,114		6,096
Repayments of bank loans		(724)		(6,818)		(6,244)
Payment of loan origination fees		(146)		(68)		(87)
Contribution from shareholders		-		-		743
Repayments to related Parties		-		(232)		-
Cash acquired from the acquisition of TKK		23		-		-
Proceeds from equity finance		-		15,290		-
Net cash provided by financing activities		5,381		13,286		508

Effect of exchange rate changes		1,108		881		(7,078)

Net increase (decrease) in cash and cash equivalents		10,812		59,571		(6,820)
Cash and cash equivalents, at beginning of year		6,919		17,731		77,302
Cash and cash equivalents, at end of year	$	17,731	$	77,302		70,482

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interests paid	$	239	$	336		247

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SOURCE Glory Star New Media Group Holdings Limited

Glory Star Reports Full Year 2022 Financial Results