Hen Soup for the Soul Leisure, whose $375 million acquisition of Redbox closed a few yr in the past, delivered second-quarter monetary outcomes reflecting the corporate’s battle to totally digest the deal.

Citing a bunch of business headwinds which have intensified because the transaction was accomplished, the corporate reported whole income of $79.9 million within the quarter ending June 30. Whereas that was greater than twice the year-earlier determine of $37.6 million because of the addition of Redbox and its 1000’s of movie-rental kiosks, it fell nicely in need of Wall Avenue analysts’ consensus expectation for $120.1 million.

Internet losses got here in a little bit forward of the Avenue’s outlook, widening to $1.50 per share from $1.39 within the year-ago quarter however topping analysts’ -$1.72 outlook.

In a convention name with analysts to debate the quarterly numbers, CEO Invoice Rouhana and CFO Jason Meier stated the corporate has ramped up efforts to chop prices and generate extra near-term free money stream. Plans are in place to generate about $15 million of incremental money stream financial savings from “streamlining of our digital and distribution businesses,” Meier stated, and making a centralized group. About $30 million in licensing offers, in the meantime, have been turned away in the course of the quarter as a result of they’d have generated income in the long run however not money stream within the close to time period, Rouhana stated.

In after-hours buying and selling, already-battered shares of Hen Soup took one other drubbing, falling 18% to 88 cents. They started the yr buying and selling at $5.26 and peaked above $41 in mid-2021.

Together with the brand new approaches to licensing and streaming, the corporate stated it has eradicated the Seattle headquarters of Redbox, initiating totally distant work for workers primarily based there, at the very least in the meanwhile. The corporate entered 2023 with 1,329 whole workers, in keeping with an SEC submitting.

As the hassle continues to get the post-merger firm on a surer monetary footing, Rouhana stated a committee consisting of unbiased members of the board of administrators has been shaped to judge varied particular choices. In current months, the corporate has obtained “incoming requests from financial and strategic partners,” the CEO stated, with out elaborating. The committee will “pursue all transactions that check all the boxes in creating value for our shareholders. This is clearly not reflected in our stock price.”

Regardless of the general turbulence, the quarter additionally noticed the discharge of Tremendous Mario Bros. on Redbox, with the Common/Illumination smash claiming the crown of the yr’s prime residence leisure title. The Might arrival of the animated movie, which has collected $1.36 billion on the international field workplace, was declared by the corporate to be the most important revenue-generating week in Redbox historical past.

One other improvement within the spring quarter units Hen Soup other than lots of its streaming friends: the onset of the primary twin strikes to hit Hollywood in many years. The WGA and SAG-AFTRA walkouts are rising demand for library titles, Rouhana stated, and giving the assorted elements of the general enterprise an opportunity to show their mettle as rivals lack key programming. “The longer the strike continues, the more valuable the library becomes,” Rouhana stated. The corporate’s 1091 distribution unit, acquired for $15.6 million final yr, releases between 25 and 35 titles per thirty days and offers “attractive cash flows, and we’re focused on making sure that continues to grow.”

A months-long continuation of each strikes, in fact, would threaten the studio theatrical pipeline. That grim state of affairs would pose a menace to Redbox and lots of different companies that rely upon Hollywood film output.