Cinedigm Corp. (NASDAQ:CIDM) announced today that over the past twelve months, the Company has reduced its total outstanding debt balance by $44.2 million or 89% to a current balance of $5.7 million from $49.9 million at March 31, 2020.
The Company achieved this significant debt reduction milestone by converting $15.0 million in convertible notes to equity, retiring $8.2 million of second lien debt, repaying $8.7 million of Digital Cinema non-recourse debt and $14.4 million in revolver debt. These actions have significantly reduced the Company's annual interest expense.
The Company continues to improve its balance sheet with a current total debt balance of $5.7 million which includes a PPP loan of $2.1 million, for which the Company has submitted its application for forgiveness, $3.5 million in non-recourse debt in the legacy Digital Cinema business and a revolving credit facility with East West Bank, that currently has a balance of $0.1 million.
In addition, a portion of Cinedigm's recent $10.8 million sale of digital cinema projection systems to American Multicinema Inc. (AMC) announced on March 26, 2021, will be utilized to eliminate the remaining $3.5 million equipment debt balance in non-recourse Digital Cinema debt. Under the terms of the AMC deal, the equipment will be sold over time and the consideration will be payable in portions upon each separate sale which will occur at various dates through January 2023.
Following the equipment sale to AMC, Cinedigm continues to own an additional 1,000 projection systems that the company is exploring opportunities to lease or sell to theatrical exhibitors.
"Cinedigm is at a pivotal moment as we invest in high growth digital streaming assets while also monetizing our digital cinema assets," said Gary Loffredo, President and COO of Cinedigm. "We have been successful at completely changing the complexion of our balance sheet, adding significant cash and eliminating over $44 million of debt since March 31, 2020. We intend to continue to reduce the relatively small remaining debt balances in this fiscal year."
He continued, "This progress is important because it shows we are executing against our strategy including our goal to significantly delever and reduce interest expense. With our balance sheet strengthened, we have positioned the Company to acquire additional high potential streaming growth assets beyond the five acquisitions we have made since October 2020, where we picked up four new streaming channels, approximately 15,000 films and TV episodes, a streaming technology Company and a base of future operations in South Asia. By becoming a leader in the streaming content business, we are enabling the Company to earn a significantly higher multiple of revenue in the capital markets."