Hollywood Media Corp. Reports 2012 Third Quarter Results

Marketwired

BOCA RATON, FL--(Marketwire - Nov 19, 2012) - Hollywood Media Corp. (NASDAQ: HOLL) today reported financial results for the third quarter ended September 30, 2012.

On a continuing operations basis, which includes the contribution from Tekno Books, the Company's 100% owned subsidiary under the Intellectual Property division, net revenues for the 2012 third quarter were $0.1 million compared to $0.2 million in the prior-year period. Tekno Books is currently focused on the development of various original book series created by best-selling authors for anticipated launch in mid-2013 in digital format.

Loss from continuing operations for the 2012 third quarter was $2.3 million, or $0.10 per share, which includes a non-cash goodwill impairment charge of $3.6 million relating to the Company's Ad Sales division, which compared to a loss from continuing operations for the 2011 third quarter of $5.6 million, or $0.24 per share, which includes a non-cash goodwill impairment charge of $4.8 million relating to the Company's Ad Sales division. 

Net loss, which includes discontinued operations, was $0.5 million, or $0.02 per share, in the 2012 third quarter, compared to net loss of $5.4 million, or $0.23 per share, in the prior-year period. 

At September 30, 2012, the Company had cash and cash equivalents of $6.0 million and no debt as compared to cash and cash equivalents of $3.7 million and no debt at December 31, 2011. 

Following the close of the 2012 third quarter and not included in the Company's financial statements for the recent period, Hollywood Media Corp. announced on October 1, 2012 that it received the first $7 million earnout payment in cash from Key Brand Entertainment Inc. ("Key Brand") pursuant to the amended purchase agreement related to the completed sale of its Broadway Ticketing Business ("Theatre Direct") to Key Brand. In addition, on October 5, 2012, Key Brand notified Hollywood Media Corp. that it achieved the revenue target for the second $7 million earnout under the purchase agreement in Key Brand's fiscal year ended June 30, 2012. Accordingly, this $7 million amount was added to the principal amount of the $8.5 million loan due Hollywood Media by Key Brand under its credit agreement. Pursuant to the credit agreement, interest at a rate of 12% per annum and principal on such second $7 million earnout amount will be amortized in equal quarterly installments over the period commencing October 1, 2012 and ending on December 15, 2015 which is the maturity date of the loan. As a result of this second $7 million earnout being added to the loan, the principal amount of the loan due Hollywood Media by Key Brand was $15.5 million as of October 1, 2012.

About Hollywood Media Corp.

Hollywood Media Corp. is comprised primarily of an Ad Sales division, an Intellectual Property division, and various financial assets.

Note on Forward-Looking Statements
Statements in this press release may be "forward-looking statements" within the meaning of federal securities laws. The matters discussed herein that are forward-looking statements are based on current management expectations that involve risks and uncertainties that may result in such expectations not being realized. Actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements due to numerous potential risks and uncertainties, including, but not limited to, the need to manage our growth, our ability to realize anticipated revenues and cost efficiencies, the impact of potential future dispositions or other strategic transactions by Hollywood Media Corp., our ability to develop and maintain strategic relationships, technology risks, the volatility of our stock price, and other risks and factors described in Hollywood Media Corp.'s filings with the Securities and Exchange Commission including our Form 10-K for 2011. Such forward-looking statements speak only as of the date on which they are made.

   
HOLLYWOOD MEDIA CORP. AND SUBSIDIARIES  
CONDENSED CONSOLIDATED BALANCE SHEETS  
             
    September 30,     December 31,  
    2012     2011  
    (unaudited)        
ASSETS            
                 
CURRENT ASSETS:                
  Cash and cash equivalents   $ 5,959,801     $ 3,683,063  
  Prepaid expenses     278,632       316,430  
  Other receivables     32,810       -  
  Related party receivable     35,735       521,497  
  Current portion of deferred compensation     430,000       430,000  
  Current assets of discontinued operations     -       566,691  
    Total current assets     6,736,978       5,517,681  
                 
PROPERTY AND EQUIPMENT, net     214,211       283,574  
INVESTMENTS IN AND ADVANCES TO UNCONSOLIDATED INVESTEES     138,537       1,573,325  
INTANGIBLE ASSETS, net     10,791       17,116  
GOODWILL     6,200,000       9,800,000  
OTHER ASSETS     803,993       58,628  
DEFERRED COMPENSATION, less current portion     626,151       948,651  
LONG TERM ASSETS OF DISCONTINUED OPERATIONS     -       23,814  
    TOTAL ASSETS   $ 14,730,661     $ 18,222,789  
                 
LIABILITIES AND SHAREHOLDERS' EQUITY                
                 
CURRENT LIABILITIES:                
  Accounts payable   $ 394,531     $ 387,070  
  Accrued expenses and other     919,733       646,821  
  Deferred revenue     120,194       264,228  
  Current portion of capital lease obligations     17,345       21,829  
  Current liabilities of discontinued operations     -       1,130,268  
    Total current liabilities     1,451,803       2,450,216  
                 
CAPITAL LEASE OBLIGATIONS, less current portion     6,341       16,203  
OTHER DEFERRED LIABILITY     26,145       42,514  
DEFERRED REVENUE     35,975       46,200  
DERIVATIVE LIABILITIES     60,000       1,090,000  
LONG TERM LIABILITIES OF DISCONTINUED OPERATIONS     -       2,158  
                 
COMMITMENTS AND CONTINGENCIES                
                 
SHAREHOLDERS' EQUITY:                
  Preferred Stock, $.01 par value, 1,000,000 shares authorized; none outstanding     -       -  
  Common stock, $.01 par value, 100,000,000 shares authorized; 23,179,066 shares issued and outstanding at September 30, 2012 and December 31, 2011, respectively     231,791       231,791  
  Additional paid-in capital     293,616,319       293,616,319  
  Accumulated deficit     (280,697,713 )     (279,272,612 )
    Total shareholders' equity     13,150,397       14,575,498  
    TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY   $ 14,730,661     $ 18,222,789  
                 
                 
                 
HOLLYWOOD MEDIA CORP. AND SUBSIDIARIES  
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS  
(unaudited)  
   
                         
    NINE MONTHS ENDED
September 30,
    THREE MONTHS ENDED
September 30,
 
    2012     2011     2012     2011  
                 
                                 
NET REVENUES   $ 429,082     $ 841,546     $ 96,035     $ 152,424  
                                 
OPERATING COSTS AND EXPENSES                                
  Editorial, production, development and technology     391,503       562,042       108,727       105,140  
  Selling, general and administrative     1,839,990       2,270,799       639,012       543,350  
  Payroll and benefits     1,619,487       2,843,556       368,904       1,232,765  
  Depreciation and amortization     113,032       162,653       37,868       50,014  
                                 
    Total operating costs and expenses     3,964,012       5,839,050       1,154,511       1,931,269  
                                 
    Loss from operations     (3,534,930 )     (4,997,504 )     (1,058,476 )     (1,778,845 )
                                 
                                 
(LOSSES) EARNINGS OF UNCONSOLIDATED INVESTEES                                
  Equity in (losses) earnings of unconsolidated investees     (141,851 )     409,591       (159,665 )     230,008  
  Impairment loss     (3,600,000 )     (4,795,783 )     (3,600,000 )     (4,795,783 )
    Total equity in losses of unconsolidated investees     (3,741,851 )     (4,386,192 )     (3,759,665 )     (4,565,775 )
                                 
OTHER INCOME (EXPENSE)                                
  Interest, net     777,411       789,660       264,400       260,381  
  Other, net     1,108,312       1,630,952       1,109,986       501,845  
                                 
    Loss from continuing operations before income taxes     (5,391,058 )     (6,963,084 )     (3,443,755 )     (5,582,394 )
    Income tax benefit     1,498,482       -       1,127,612       -  
      Loss from continuting operations     (3,892,576 )     (6,963,084 )     (2,316,143 )     (5,582,394 )
                                 
    Gain on sale of discontinued operations, net of income taxes     2,444,891       254,842       1,839,788       155,539  
    Income (loss) from discontinued operations     22,584       (162,871 )     -       2,519  
                                 
    Income from discontinued operations     2,467,475       91,971       1,839,788       158,058  
                                 
    Net loss     (1,425,101 )     (6,871,113 )     (476,355 )     (5,424,336 )
                                 
NET INCOME (LOSS) ATTRIBUTABLE TO NON-CONTROLLING INTEREST   $ -       (30,027 )             5,312  
                                 
Net loss attributable to Hollywood Media Corp   $ (1,425,101 )   $ (6,901,140 )   $ (476,355 )   $ (5,419,024 )
                                 
Basic and diluted (loss) income per common share                                
    Continuing operations   $ (0.17 )   $ (0.28 )   $ (0.10 )   $ (0.24 )
    Discontinued operations     0.11       -       0.08       0.01  
    Total basic and diluted net loss per share   $ (0.06 )   $ (0.28 )   $ (0.02 )   $ (0.23 )
                                 
Weighted average common and common equivalent sharesoutstanding - basic and diluted     23,179,066       24,790,790       23,179,066       23,179,066  
                                 
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