IDW Media Reports Second Quarter Fiscal Year 2019 Results

STAMFORD, CT / ACCESSWIRE / June 13, 2019 / IDW Media Holdings, Inc. (OTC PINK: IDWM), an integrated media company, today reported a net loss per share of ($0.61) on revenue of $7.8 million for the second quarter of its 2019 fiscal year, the three months ended April 30, 2019.

Highlights

  • Following quarter close, IDW Media successfully completed an offering raising $23 million in new capital and reduced long-term debt from $21 million to $9 million. The remaining debt is due to IDW Media’s Chairman and CEO;
  • IDW Entertainment (IDWE) has three series scheduled for delivery to Netflix within the next twelve months. During 2Q19, IDWE:
    • Completed principal photography on October Faction and V-Wars. Both shows are currently in post-production with deliveries scheduled for Q4 CY2019;
    • Began principal photography of Locke & Key, which is scheduled to complete post-production in Q1 CY2020;
  • IDWE has prioritized fifteen projects for early stage development based on IP developed at IDW Publishing (IDWP);
  • During 2Q19, IDWP added twenty titles to its IP portfolio of over 400 creator-owned or IDWP-owned originals;
  • Media veteran Allan Grafman, who previously held senior positions at Archie Comics, and Hallmark Entertainment, among others, has joined IDW Media’s Board of Directors;
  • Management is reviewing strategic alternatives with the assistance of advisor, JP Morgan.

IDW Media Management Comments – Chairman and CEO, Howard Jonas

“The successful completion of our private placement has put IDW Media on a strong financial footing. We are working together to restore the company to profitability in fiscal 2020 and to realize the full potential of IDW Publishing’s extensive IP portfolio.

“IDW Entertainment’s October Faction and V-Wars are both in post-production and scheduled for delivery to Netflix in the fourth quarter of this year. With the initial seasons of those series concluded, we will pivot to production models that require less capital and minimize downside risk. Locke & Key, which is now in principal photography for delivery to Netflix early in fiscal 2020, is being developed under a production services agreement, for which IDW will receive a percentage of the production budget with limited risk.

“IDW Entertainment has also identified a robust pipeline of fifteen potential projects from IDW Publishing’s portfolio and is developing pitches and scripts for streaming and traditional broadcast TV networks as well as for feature film platforms. The pipeline represents a targeted array of genres. Looking further ahead, we intend to develop at least two new projects or feature films from our pipeline per year.”

Consolidated P&L Highlights

(in thousands, unaudited)
2Q19 1Q19 2Q18
Revenue
$ 7,809 $ 9,349 $ 8,720
Direct cost of revenue
$ 4,075 $ 5,103 $ 4,678
SG&A
$ 6,977 $ 7,280 $ 6,597
Depreciation & amortization
$ 365 $ 403 $ 398
Loss from operations
$ (3,633 ) $ (3,993 ) $ (2,983 )
Net loss
$ (3,747 ) $ (4,093 ) $ (2,226 )
Loss per share
$ (0.61 ) $ (0.67 ) $ (0.36 )

Segment P&L Highlights

(in thousands, unaudited)
2Q19 1Q19 2Q18
Revenue
IDW Publishing
$ 3,740 $ 5,212 $ 4,409
IDW Entertainment
$ 43 $ 87 $ 353
CTM Media
$ 4,025 $ 4,050 $ 3,958

Loss from operations
IDW Publishing
$ (1,631 ) $ (1,470 ) $ (1,394 )
IDW Entertainment
$ (744 ) $ (1,229 ) $ (622 )
CTM Media
$ (1,258 ) $ (1,294 ) $ (967 )

Key Financial & Operational Take-Aways

  • IDWP expects to counter soft secular comic and graphic book demand with release of strong titles in 2H 2019;
  • In 4Q19, IDWE expects to deliver October Faction and V-Wars to Netflix;
  • In 1H 2020, IDWE expects to generate approximately $2.5 million in income from operations upon delivery of Locke & Key to Netflix Worldwide;
  • CTM’s brochure and tourism-driven sales were seasonally soft during winter months. Revenue and profitability are expected to rebound during 2H 2019;
  • IDW Media’s cash balance at April 30th was $9 million.

Earnings Conference Call

IDW Media’s management will host an earnings conference call beginning at 5:00 PM Eastern today to present results, outlook and strategy followed by Q&A with investors.

To listen to the call and participate in the Q&A, dial toll-free 1-877-705-6003 (toll free – U.S.) or 1-201-493-6725 (toll – international) and request the ‘IDW Media call’.

A replay of the conference call can be accessed approximately three hours after the call concludes through June 20, 2019 by dialing 1-844-512-2921 (toll free – U.S.) or 1-412-317-6671 (toll – international) and providing this replay number: 13690994. A replay will also be available via streaming audio through the IDW Media investor relations website.

About IDW Media Holdings

IDW Media Holdings, Inc. (OTC: IDWM) is an integrated media company. IDWM’s businesses include IDW Publishing – a leading American publisher of comic books and graphic novels, IDW Games, IDW Entertainment – a producer and distributor of franchise content through television and other animated media, Top Shelf Productions, the San Diego Comic Art Gallery, and CTM Media Group Inc, one of North America’s largest distributors of information for tourists and travelers.

Investor Contact

IDW Media Holdings
Ezra Rosensaft, Chief Financial Officer
[email protected]

IDW MEDIA HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share data) (unaudited)
April 30, 2019 (unaudited) October 31, 2018
Assets
Current assets
Cash and cash equivalents
$ 9,109 $ 13,445
Trade accounts receivable, net
6,623 15,998
Shareholder receivable
4,000
Inventory – print and production costs
58,173 41,525
Prepaid expenses
2,429 1,757
Total current assets
80,334 72,725
Property and equipment, net
2,973 3,167
Non-current assets
Trade accounts receivable – non-current portion
408
Taxes receivable – non-current
513 513
Intangible assets, net
595 766
Goodwill
2,309 2,297
Other assets
359 463
Total non-current assets
3,776 4,447
Total assets
$ 87,083 $ 80,339
Liabilities and stockholders’ equity
Current liabilities
Trade accounts payable
$ 1,626 $ 2,150
Accrued expenses
3,959 10,116
Deferred revenue
2,973 1,540
Bank loans payable – current portion
19,432 19,238
Related party loans payable – current portion
500 14,500
Income taxes payable
77 79
Capital lease obligations – current portion
366 402
Other current liabilities
38 95
Total current liabilities
28,971 48,120
Non-current liabilities
Capital lease obligations – long term portion
565 727
Bank loans payable – long term portion
19,538 10,500
Related party loans payable – long term portion
8,500 4,500
Total non-current liabilities
28,603 15,727
Total liabilities
57,574 63,847
Commitments and contingencies (see note 10)
Stockholders’ equity (see note 4):
Preferred stock, $0.01 par value; authorized shares – 500; no shares issued at April 30, 2019 and October 31, 2018
Class B common stock, $0.01 par value; authorized shares – 12,000; 7,199 and 6,072 shares issued and 6,679 and 5,553 shares outstanding at April 30, 2019 and October 31, 2018, respectively
72 61
Class C common stock, $0.01 par value; authorized shares – 2,500; 545 shares issued and outstanding at April 30, 2019 and October 31, 2018
5 5
Stock subscriptions receivable
(118)
Additional paid-in capital
90,624 69,780
Accumulated other comprehensive loss
(109) (228 )
Accumulated deficit
(59,769) (51,930 )
Treasury stock, at cost, consisting of 519 shares of Class B common stock at April 30, 2019 and October 31, 2018
(1,196) (1,196 )
Total stockholders’ equity
29,509 16,492
Total liabilities and stockholders’ equity
$ 87,083 $ 80,339

IDW MEDIA HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

Three Months Ended
April 30,
Six Months Ended
April 30,
(in thousands, except per share data)
2019 2018 2019 2018

Revenues
$ 7,809 $ 8,720 $ 17,158 $ 24,361
Costs and expenses:
Direct cost of revenues
4,075 4,678 8,934 13,557
Selling, general and administrative (i)
6,977 6,597 15,040 13,227
Depreciation and amortization
365 398 768 801
Bad debt expense
25 30 41 54
Total costs and expenses
11,442 11,703 24,783 27,639
(Loss) Income from operations
(3,633) (2,983 ) (7,625) (3,278 )
Interest expense, net
(78) (95 ) (183) (235 )
Other income (expense), net
(18) (13) 4
Loss before income taxes
(3,729) (3,078 ) (7,821) (3,509 )
(Provision for) benefit from income taxes
(18) 852 (18) (3,204 )
Net (loss) income
$ (3,747) $ (2,226 ) $ (7,839) $ (6,713 )

Basic and diluted loss per share:

Net loss per share
$ (0.61) $ (0.36 ) $ (1.28) $ (1.10 )

Weighted-average number of shares used in the calculation of basic and diluted loss per share:
6,172 6,110 6,135 6,110

Dividend declared per common share:
$ 0.00 $ 0.00 $ 0.00 $ 0.00

Interest Expense
$ 92 $ 100 $ 207 $ 242

(i) Stock-based compensation included in selling, general and administrative expenses
$ 734 $ 808 $ 1,732 $ 1,589

IDW MEDIA HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

Six months ended April 30,
(in thousands)
2019 2018
Operating activities:
Net loss
$ (7,839) (6,713 )
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation and amortization
768 801
Bad debt expense
41 54
Stock based compensation
1,732 1,589
Changes in assets and liabilities:
Trade accounts receivable
9,742 2,943
Related party receivable
(4,000)
Inventory
(16,648) (3,502 )
Prepaid expenses
(568) (84
Deferred taxes
3,237
Trade accounts payable, accrued expenses and other current liabilities
(6,740) (18
Deferred revenue
1,433 (1.972 )
Net cash used in operating activities
(22,079) (3,665 )
Investing activities:
Business acquisitions
(12)
Capital expenditures
(403) (380 )
Net cash used in investing activities
(415) (380 )
Financing activities:
Proceeds from issuance of common stock
19,005
Financing under capital leases
8
Repayments of capital lease obligations
(206) (210 )
Proceeds of related party loans
9,000
Proceeds of bank loans
17,463 9,451
Repayments of related party loans
(19,000)
Repayments of bank loans
(8,231) (7,094 )
Net cash provided by financing activities
18,039 2,147
Effect of exchange rate changes
119 (107 )
Net decrease in cash and cash equivalents
(4,336) (2,005 )
Cash and cash equivalents at beginning of period
13,445 9,154

Cash and cash equivalents at end of period
$ 9,109 7,149

Supplemental schedule of investing and financing activities
Cash paid for interest
$ 207 242
Cash paid for income taxes
$ 18 26


SOURCE:
IDW Media Holdings Inc.

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