Hollywood Media Corp. Reports 2012 Fourth Quarter and Year End Results

Marketwired

BOCA RATON, FL--(Marketwire - Apr 1, 2013) - Hollywood Media Corp. (NASDAQ: HOLL) today reported financial results for the fourth quarter and year ended December 31, 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 fourth quarter were unchanged at $0.2 million compared to $0.2 million in the prior-year period. For the full year 2012, net revenues were $0.6 million versus $1.1 million in 2011.

Income from continuing operations for the 2012 fourth quarter, was $4.8 million, or $0.21 per share, compared to a loss from continuing operations for the 2011 fourth quarter of $0.1 million, or $0.01 per share. The income tax benefit of $3.8 million was fully offset by the income tax expense recognized in the Gain on sale of discontinued operations, net of income taxes. Income from continuing operations for the full year 2012 was $0.9 million, or $0.04 per share, which included a non-cash goodwill impairment charge of $3.6 million in the third quarter of 2012 related to the Company's Ad Sales Division, $0.4 million of non-cash amortization expense of deferred compensation costs and $0.1 million depreciation and amortization. This compared to a loss from continuing operations for the full year 2011 of $7.1 million, or $0.29 per share, which included a non-cash goodwill impairment charge of $4.8 million in the third quarter of 2011 related to the Company's Ad Sales Division. The income tax benefit of $5.3 million was fully offset by the income tax expense recognized in the Gain on sale of discontinued operations, net of income taxes.

Net income, which includes discontinued operations, was $11.8 million, or $0.51 per share, in the 2012 fourth quarter, compared to net income of $0.04 million, or $0.00 per share, in the prior-year period. For the full year 2012, net income, which includes discontinued operations, was $10.4 million, or $0.45 per share, compared to a net loss in 2011 of $6.9 million, or $0.28 per share.

At December 31, 2012, the Company had cash and cash equivalents of $11.4 million and no debt as compared to cash and cash equivalents of $3.7 million and no debt at December 31, 2011.

The increased cash position reflects a $7 million earnout payment in cash received in the 2012 fourth quarter from Key Brand Entertainment Inc. ("Key Brand") pursuant to the amended purchase agreement related to the completed sale of Hollywood Media's Broadway Ticketing Business ("Theatre Direct") to Key Brand. In addition, during the 2012 fourth quarter Key Brand notified Hollywood Media 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. Pursuant to this loan, interest will be payable to Hollywood Media at an increased rate of 13% per annum and principal on such second $7 million earnout amount will be amortized in equal quarterly installments over the period commencing October 5, 2012 and ending on June 30, 2015 which is the new shortened maturity date of the loan. As a result of this second $7 million earnout being added to the loan and a subsequent payment received in the amount of $1.0 million (which included a principal payment of $0.5 million), the principal amount of the loan due Hollywood Media by Key Brand was $15.0 million as of December 31, 2012. A $1.1 million payment was received during the first quarter of 2013 in accordance with the terms of the loan.

The Company purchased 16,600 shares of Hollywood Media's common stock for $0.1 million during the fourth quarter of 2012 and 510,700 shares of Hollywood Media's common stock for $0.7 million during the first quarter of 2013. 

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 2012. Such forward-looking statements speak only as of the date on which they are made.

             
HOLLYWOOD MEDIA CORP. AND SUBSIDIARIES  
CONSOLIDATED BALANCE SHEETS  
             
    December 31,     December 31,  
    2012     2011  
                 
ASSETS                
                 
CURRENT ASSETS:                
  Cash and cash equivalents   $ 11,378,519     $ 3,683,063  
  Prepaid expenses     329,915       316,430  
  Other receivables     75,105       -  
  Note receivable, current     1,375,545       -  
  Related party receivable     37,287       521,497  
  Current portion of deferred compensation     430,000       430,000  
  Current assets of discontinued operations     -       566,691  
    Total current assets     13,626,371       5,517,681  
                 
PROPERTY AND EQUIPMENT, net     240,645       283,574  
INVESTMENTS IN AND ADVANCES TO UNCONSOLIDATED INVESTEES     138,384       1,573,325  
INTANGIBLE ASSETS, net     8,683       17,116  
GOODWILL     6,200,000       9,800,000  
OTHER ASSETS     727,982       58,628  
NOTE RECEIVABLE, less current portion     4,455,106       -  
WARRANT     700,000       -  
DEFERRED COMPENSATION, less current portion     518,651       948,651  
LONG TERM ASSETS OF DISCONTINUED OPERATIONS     -       23,814  
    TOTAL ASSETS   $ 26,615,822     $ 18,222,789  
                 
LIABILITIES AND SHAREHOLDERS' EQUITY                
                 
CURRENT LIABILITIES:                
  Accounts payable   $ 414,123     $ 387,070  
  Accrued expenses and other     1,036,788       646,821  
  Deferred revenue     111,669       264,228  
  Current portion of capital lease obligations     16,255       21,829  
  Current liabilities of discontinued operations     -       1,130,268  
    Total current liabilities     1,578,835       2,450,216  
                 
CAPITAL LEASE OBLIGATIONS, less current portion     2,152       16,203  
OTHER DEFERRED LIABILITY     355       42,514  
DEFERRED REVENUE     14,000       46,200  
DERIVATIVE LIABILITIES     60,000       1,090,000  
LONG TERM LIABILITIES OF DISCONTINUED OPERATIONS     -       2,158  
    TOTAL LIABILITIES     1,655,342       3,647,291  
                 
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; 23,162,466 and 23,179,066 shares issued and outstanding at December 31, 2012 and December 31, 2011, respectively    
231,625
     
231,791
 
  Additional paid-in capital     293,591,903       293,616,319  
  Accumulated deficit     (268,863,048 )     (279,272,612 )
    Total shareholders' equity     24,960,480       14,575,498  
    TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY   $ 26,615,822     $ 18,222,789  
                     
                     
   
HOLLYWOOD MEDIA CORP. AND SUBSIDIARIES  
CONSOLIDATED STATEMENTS OF OPERATIONS  
               
    TWELVE MONTHS ENDED
December 31,
    THREE MONTHS ENDED
December 31,
 
    2012     2011     2012     2011  
                 
                                 
NET REVENUES   $ 616,338     $ 1,067,708     $ 187,256     $ 226,162  
                                 
OPERATING COSTS AND EXPENSES                                
    Editorial, production, development and technology     639,865       651,614       248,362       89,572  
    Selling, general and administrative     2,854,440       2,782,020       1,014,450       511,221  
    Payroll and benefits     2,688,017       3,242,209       1,068,530       398,653  
    Depreciation and amortization     136,443       203,231       23,411       40,578  
                                 
      Total operating costs and expenses     6,318,765       6,879,074       2,354,753       1,040,024  
                                 
      Loss from operations     (5,702,427 )     (5,811,366 )     (2,167,497 )     (813,862 )
                                 
                                 
LOSSES OF UNCONSOLIDATED INVESTEES                                
  Equity in earnings of unconsolidated investees     (142,003 )     593,767       (152 )     184,176  
  Impairment loss     (3,600,000 )     (4,795,783 )     -       -  
    Total losses in earnings of unconsolidated investees     (3,742,003 )     (4,202,016 )     (152 )     184,176  
                                 
OTHER INCOME (EXPENSE):                                
  Interest, net     1,249,868       1,049,843       472,457       260,183  
  Accretion of discount, net of allowance for uncollectability     1,717,900       -       1,717,900       -  
  Other, net     2,068,665       2,025,160       960,353       394,208  
                                 
    Loss from continuing operations before income taxes     (4,407,997 )     (6,938,379 )     983,061       24,705  
    Income tax benefit (expense), net of refund     5,326,300       (130,571 )     3,827,818       (130,571 )
      Income (loss) from continuing operations     918,303       (7,068,950 )     4,810,879       (105,866 )
                                 
    Gain on sale of discontinued operations, net of income taxes     9,468,677       524,156       7,023,786       269,314  
    Income (loss) of discontinued operations     22,584       (232,444 )     -       (69,573 )
                                 
    Income from discontinued operations     9,491,261       291,712       7,023,786       199,741  
                                 
    Net income (loss)     10,409,564       (6,777,238 )     11,834,665       93,875  
                                 
NET INCOME (LOSS) ATTRIBUTABLE TO NON-CONTROLLING INTEREST   $ -       (85,093 )   $ -       (55,066 )
                                 
Net income (loss) attributable to Hollywood Media Corp.   $ 10,409,564     $ (6,862,331 )   $ 11,834,665     $ 38,809  
                                 
Basic and diluted income (loss) per common share                                
    Continuing operations   $ 0.04     $ (0.29 )   $ 0.21     $ (0.01 )
    Discontinued operations     0.41       0.01       0.30       0.01  
    Total basic and diluted net income (loss) per share   $ 0.45     $ (0.28 )   $ 0.51     $ -  
                                 
Weighted average common and common equivalent shares outstanding - basic and diluted    
23,178,814
     
24,384,547
     
23,178,064
     
23,179,066
 
                                 
                                 
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