NEW YORK (TheStreet) -- SFX Entertainment's (SFXE) first quarter of earnings as a public company show steep losses and non-GAAP earnings adjustments, which seek to minimize sales the electronic music culture, or EMC, giant lost after shuttering its Electric Zoo festival in New York City for a day after multiple attendees died from reported drug overdoses.
Nine months into the year, SFX Entertainment has reported over $211 million in revenue and a net loss of over $77 million. However, when excluding items such as interest expense, depreciation, equity-based compensation and some other items, those losses narrow to just $28 million.
On a pro-forma basis that includes acquisitions, which were contemplated in SFX's IPO documents, the company even can report total pro-forma adjusted earnings before interest, taxes, depreciation and amortization of $7.5 million.
SFX's total pro-forma adjusted EBITDA, however, hinges on downplaying $28.5 billion in so-called "other adjustments" beyond the company's reconciliation between its GAAP loss and its adjusted EBITDA.
Those adjustments include non-recurring expenses, transaction costs from its October IPO, recoupable advances and the "elimination of costs associated with cancellation of third day of Electric Zoo Festival (subject to insurance recovery)."
It is the latter that is most curious.
SFX is trying to show investors a reconciliation of its earnings that assume an insurance recovery for lost sales when Electric Zoo was shuttered for a day as a result of multiple drug overdoses at the Labor Day EMC bash in New York City. Madeevent, the Electric Zoo promoter SFX acquired, gave full rebates for the closure.