IDW Reports Fourth Quarter and Full Fiscal Year 2020 Results
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IDW Reports Fourth Quarter and Full Fiscal Year 2020 Results

Monday, January 25, 2021 4:15 PM
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Earnings

IDW Publishing Achieves Operating Profitability in Fourth Quarter
Locke & Key Renewed for Third Season

NEWARK, NJ and LOS ANGELES, CA / ACCESSWIRE / January 25, 2021 / IDW Media Holdings, Inc. (OTC PINK:IDWM), an integrated media company, today reported a fourth quarter net loss per share of $0.20 on revenue of $10.1 million for the three months ended October 31, 2020. For the full fiscal year 2020, the net loss per share totaled $1.54 on revenue of $38.2 million.

Fourth Quarter FY 2020 (4Q20) Highlights

  • IDW's publishing business (IDWP) increased revenue to $7.7 million in 4Q20 from $5.8 million in 4Q19 led by strong sales of the late Congressman John Lewis's March graphic novels.
  • IDWP generated positive income from operations of $491 thousand in 4Q20 compared to a loss from operations of $843 thousand in 4Q19.
  • Netflix has renewed Locke & Key for a third season. Production of S3 is scheduled to follow immediately after completion of production of S2.
  • On a consolidated basis, IDW narrowed its loss from continuing operations to $1.7 million in 4Q20 from $18.0 million in 4Q19.
  • The closing of the sale of CTM, IDW's tourism-focused brochure distribution and marketing company, has been delayed due to conditions pertaining to CTM's PPP loans.
  • CTM's results were reported as discontinued operations for all periods presented.
  • IDW's net loss per share narrowed to $0.20 in 4Q20 from a loss per share of $2.29 in 4Q19.

Comments from Ezra Rosensaft, Chief Executive Officer

"IDW generated significantly improved financial results in the fourth quarter. IDW Publishing had an outstanding quarter increasing revenue to its highest level in four years and generating positive income from operations. IDW Entertainment's results continue to improve as we work through the impacts of legacy production financing deals.

"Netflix announced that it will renew Locke & Key for a third season. The first season's compelling storyline, cast, and production values established an outstanding foundation for the continued success of the show. Congratulations to comic book creators Joe Hill and Gabe Rodríguez and Co-Showrunners Meredith Averill and (Executive Producer) Carlton Cuse.

"Looking ahead, IDW is positioned for a strong fiscal 2021. As we deepen our relationships with leading creators, further integrate our operations, and holistically develop our IP, we expect further improvements in our operational and financial results.

"We are in the process of re-registering IDW's Class B common stock with the Securities and Exchange Commission and are working to get that done in the first half of this calendar year, and then will work to get the stock listed on a national exchange."

Consolidated P&L Highlights

(In millions, except net loss per share, unaudited)
(Numbers may not foot due to rounding)
    4Q20       3Q20       4Q19     FY 2020     FY 2019  
Revenue
  $ 10.1     $ 8.5     $ 28.4     $ 38.2     $ 42.8  
Direct cost of revenue
  $ 6.5     $ 8.1     $ 40.2     $ 29.5     $ 49.2  
SG&A including non-cash compensation
  $ 4.5     $ 3.7     $ 6.1     $ 17.3     $ 18.4  
Non-cash compensation included in SG&A
  $ 0.2     $ 0.5     $ 0.0     $ 1.1     $ 2.5  
Depreciation & amortization
  $ 0.1     $ 0.1     $ 0.1     $ 0.3     $ 0.3  
Bad debt reserve
  $ 0.4     $ 0.0     $ 0.0     $ 0.4     $ 0.0  
Interest and other expense, net
  $ 0.3     $ 0.0     $ 0.0     $ 0.4     $ 0.2  
Loss from continuing operations
  $ (1.7 )   $ (3.4 )   $ (18.0 )   $ (9.7 )   $ (25.2 )
(Loss) income from discontinued operations
  $ (0.3 )   $ (1.1 )   $ 0.8     $ (4.1 )   $ (1.3 )
Net loss attributable to IDW Media
  $ (2.2 )   $ (4.5 )   $ (17.1 )   $ (13.8 )   $ (26.4 )
Net loss per share
  $ (0.20 )   $ (0.47 )   $ (2.29 )   $ (1.54 )   $ (3.90 )

Segment P&L Highlights
(Does not include corporate overhead.)

(in millions, unaudited)
    4Q20       3Q20       4Q19     FY 2020     FY 2019  
Revenue
                                   
IDW Publishing
  $ 7.7     $ 5.2     $ 5.8     $ 23.9     $ 20.1  
IDW Entertainment
  $ 2.4     $ 3.3     $ 22.6     $ 14.3     $ 22.7  
CTM*
  NA     NA     NA     NA     NA  
 
                                       
Income (loss) from operations*
                                       
IDW Publishing
  $ 0.5     $ 0.0     $ (0.8 )   $ (0.1 )   $ (5.2 )
IDW Entertainment
  $ (2.0 )   $ (3.2 )   $ (17.2 )   $ (8.6 )   $ (19.8 )
CTM - ((Loss) income from discontinued operations)*
  $ (0.3 )   $ (1.1 )   $ 0.8     $ (4.1 )   $ (1.3 )

*CTM's bottom line results are reported as ‘Net (loss) income from discontinued operations' in all prior periods presented.

Financial Take-Aways

  • Revenue:
    • IDWP reported robust increases in quarterly revenue year over year attributable in part to robust sales of the late Congressman John Lewis's March trilogy and George Takei's They Called Us Enemy. Book market revenue increased substantially augmented by sales of digital comic offerings and license and royalty revenues.
    • IDW Entertainment (IDWE) revenue in 4Q20 was generated primarily by the delivery of certain episodes of Wynonna Earp, Season 4. Revenue decreased significantly from the year ago quarter when IDWE delivered V Wars and certain October Faction episodes.
  • Income (loss) from Operations:
    • IDWP generated positive income from operations in 4Q20 despite the challenges of the COVID-19 environment. The improvement reflected the impact of increased revenue including sales of higher margin backlist titles.
    • IDWE substantially narrowed its loss from operations in 4Q20. The loss reflected Wynonna Earp related expenses and the write down of a Dirk Gently related asset. The loss in the year ago quarter reflected the delivery of V Wars and October Faction episodes and an earlier asset write-down.
  • CTM Media: CTM Media's results were reported as discontinued operations reflecting the pending sale of the business. Pandemic related market changes also drove the quarterly and full year increases in the loss from operations.
  • Balance Sheet Highlights: At October 31, 2020, IDW's cash balance increased to $10.5 million from $7.5 million at October 31, 2019. Working capital (current assets less current liabilities) increased to $17.8 million from $15.4 million over the same period.

Earnings Conference Call

IDW'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 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 February 1, 2021 by dialing 1-844-512-2921 (toll free - U.S.) or 1-412-317-6671 (toll - international) and providing this replay PIN number: 13715320. A replay will also be available via streaming audio through the IDW investor relations website.

About IDW

IDW (OTCPINK:IDWM) is an integrated media company providing compelling stories and characters for global audiences. Our IDW Publishing and IDW Entertainment businesses acquire IP for holistic franchise development across comics and graphic novels, television, games, merchandise and other entertainment platforms and leverage established stories from our creative partners.

Investor Contact

IDW Media Investor Relations
[email protected]

IDW MEDIA HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS

(in thousands, except per share data)
  October 31,
2020
    October 31,
2019
 
Assets
           
Current assets:
           
Cash and cash equivalents
  $ 10,541     $ 7,543  
Trade accounts receivable, net
    22,921       43,462  
Inventory
    3,754       3,313  
Prepaid expenses
    1,361       1,319  
Current assets held for sale from discontinued operations
    11,171       5,186  
Total current assets
    49,748       60,823  
Property and equipment, net
    410       562  
Right-of-use assets, net
    771       -  
Non-current assets
               
Taxes receivable
    -       513  
Investments
    25       -  
Intangible assets, net
    52       115  
Goodwill
    199       199  
Television costs, net
    2,926       9,388  
Other assets
    527       372  
Non-current assets held for sale from discontinued operations
    -       5,165  
Total assets
  $ 54,658     $ 77,137  
Liabilities and stockholders equity
               
Current liabilities:
               
Trade accounts payable
  $ 1,406     $ 2,145  
Accrued expenses
    3,953       3,036  
Deferred revenue
    2,385       1,058  
Bank loans payable - current portion
    14,204       29,242  
Related party loans payable - current portion
    -       4,550  
Government loans- current portion
    793       -  
Operating lease obligations - current portion
    562       -  
Other current liabilities
    69       2,007  
Current liabilities held for sale from discontinued operations
    8,540       3,344  
Total current liabilities
    31,912       45,382  
Non-current liabilities
               
Operating lease obligations - long term portion
    368       -  
Bank loans payable - long term portion
    -       10,500  
Government loans - long term portion
    403       -  
Related party loans payable - long term portion
    3,750       4,500  
Non-current liabilities held for sale from discontinued operations
    -       683  
Total non-current liabilities
    4,521       15,683  
Total liabilities
  $ 36,433     $ 61,065  
Stockholders equity (see note 4):
               
Preferred stock, $.01 par value; authorized shares - 500; no shares issued at October 31, 2020 and October 31, 2019
    -       -  
Class B common stock, $0.01 par value; authorized shares - 12,000; 9,987 and 7,419 shares issued and 9,467 and 6,899 shares outstanding at October 31, 2020 and October 31, 2019, respectively
    93       74  
Class C common stock, $0.01 par value; authorized shares - 2,500; 545 shares issued and outstanding at October 31, 2020 and October 31, 2019
    5       5  
Stock subscription receivable
    -       (1,000)  
Additional paid-in capital
    111,379       96,671  
Accumulated other comprehensive loss
    (60)       (60)  
Accumulated deficit
    (91,996)       (78,457)  
Treasury stock, at cost, consisting of 519 shares of Class B common stock at October 31, 2020 and October 31, 2019
    (1,196)       (1,196)  
Total IDW Media Holdings Inc. stockholders equity
    18,225       16,037  
Non-controlling interest
    -       35  
Total stockholders equity
    18,225       16,072  
Total liabilities and stockholders equity
  $ 54,658     $ 77,137  

IDW MEDIA HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS

 
  Fiscal Years Ended
October 31,
 
(in thousands, except per share data)
  2020     2019  
 
           
Revenues
  $ 38,162     $ 42,835  
 
               
Costs and expenses:
               
Direct cost of revenues
    29,530       49,153  
Selling, general and administrative
    17,270       18,415  
Depreciation and amortization
    252       286  
Bad debt expense
    434       33  
Total costs and expenses
    47,486       67,887  
Loss from operations
    (9,324)       (25,052)  
 
               
Interest expense, net
    (46)       (173  
Other income (expense), net
    (318)       (15)  
Loss before income taxes
    (9,688)       (25,240)  
(Provision for) benefit from income taxes
    -       42  
Net loss from continuing operations
    (9,688)       (25,198)  
 
               
(Loss) income from discontinued operations, net
    (4,110)       (1,294)  
 
               
Net loss
    (13,798)       (26,492)  
 
               
Net income attributable to non-controlling interests
    -       63  
 
               
Net loss attributable to IDW Media Holdings, Inc
  $ (13,798)     $ (26,429)  
 
               
Basic and diluted income (loss) per share (note 3):
               
Continuing operations
  $ (1.08)     $ (3.71)  
Discontinued operations, net
    (.46)       (0.19)  
Net loss
  $ (1.54)     $ (3.90)  
 
               
Weighted-average number of shares used in the calculation of basic and diluted loss per share:
    8,982       6,768  
 
               
Dividend declared per common share:
  $ 0.00     $ 0.00  
 
IDW MEDIA HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
 
Fiscal years ended October 31,
(in thousands)
  2020     2019  
Operating activities:
           
Net loss
  (13,798)     (26,492 )
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
               
Depreciation and amortization
    1,017       1,513  
Amortization of finance leases
    411       -  
Bad debt expense
    680       113  
Stock based compensation
    722       3,123  
Stock options
    409       -  
Warrants issued
    -       118  
Amortization of right-of-use asset
    1,557       -  
Loss on deconsolidation of subsidiary
    35       -  
Changes in assets and liabilities:
               
Trade accounts receivable
    20,807       (28,960 )
Inventory
    (442)       297  
Prepaid expenses and other assets
    760       (443 )
Investment
    (25)       -  
Television costs
    6,462       28,527  
Operating lease liability
    (1,597)       -  
Trade accounts payable, accrued expenses and other liabilities
    (2,108)       (3,501 )
Deferred revenue
    795       715  
Deconsolidation of subsidiary
    304       -  
Net cash provided by (used in) operating activities
    15,989       (24,990 )
Investing activities:
               
Business acquisitions
    -       (12 )
Proceeds on disposition of long lived assets
    185       -  
Disposition of subsidiary, net of cash received
    (115)       -  
Capital expenditures
    (420)       (1,113 )
Net cash used in investing activities
    (350)       (1,125 )
Financing activities:
               
Proceeds from issuance of common stock
    14,596       22,663  
Financing under capital leases
    -       360  
Repayments of capital lease obligations
    -       (410 )
Repayments of finance lease obligation
    (404)       -  
Proceeds of related party loans
    -       9,050  
Proceeds of government loans
    3,004       -  
Proceeds of bank loans
    1,021       19,382  
Repayments of related party loans
    (5,300)       (19,000 )
Repayments of bank loans
    (26,559)       (9,378 )
Net cash (used in) provided by financing activities
    (13,642)       22,667  
Effect of exchange rate changes on cash and cash equivalents
    -       168  
Net increase (decrease) in cash and cash equivalents
  1,997     (3,280 )
Cash and cash equivalents at beginning of period
    10,165       13,445  
Cash and cash equivalents at end of period
  12,162     10,165  
 
               
Supplemental schedule of investing and financing activities
               
Cash paid for interest
  200     228  
Cash paid for income taxes
  98     25  
Purchases of property and equipment through capital lease obligations
  -     360  
Received from sale of long lived assets
  154     -  
                 

SOURCE: IDW Media Holdings Inc.

IDW Media Holdings Inc.
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