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IDW Reports First Quarter Fiscal 2021 Results

Monday, 15 March 2021 04:15 PM

IDW Media Holdings Inc.

Topic:
Earnings

IDW Publishing Delivers Solid Quarter Despite COVID-19 Challenges

NEWARK, NJ and LOS ANGELES, CA / ACCESSWIRE / March 15, 2021 / IDW Media Holdings, Inc. (OTC PINK:IDWM), an integrated media company, today reported a net loss per share of $0.62 on revenue of $8.4 million for the three months ended January 31, 2021.

First Quarter Fiscal 2021 (1Q21) Highlights

  • Consolidated revenue decreased to $8.4 from $10.3 million in 1Q20.
  • COVID-19 Update: At IDWP, direct market sales recovering with year over year growth. Digital publishing revenue increased 68% year over year. IDWE impacted by industry-wide production / greenlight delays.
  • Consolidated loss from operations improved to $5.1 million from $5.8 million in 1Q20.
  • Loss per share narrowed to $0.62 from $0.92 in 1Q20
  • TMNT: The Last Ronin became the most successful comic in IDWP history, has sold over 200,000 copies including third printing in February.
  • Locke & Key, the Netflix series based on the IDW Comic and produced by IDWE was nominated by the Academy of Science Fiction, Fantasy & Horror Films for Best Fantasy Television Series.
  • Following the quarter close, IDW completed the planned sale of its CTM subsidiary.

Comments from Ezra Rosensaft, Chief Executive Officer

"IDW again reported strong bottom-line improvement compared to the year ago quarter despite the remaining COVID-19 challenges. We are swiftly moving toward profitable operations as IDW Entertainment closes in on additional deals and we work through the last impacts of legacy production financing agreements.

"Our outlook for 2021 continues to improve with an exciting line-up of titles at IDWP. The streaming services are getting production schedules back on track now that some COVID-19 restrictions have been relaxed, and the IDWE team has done a terrific job of developing properties to take full advantage of the thaw. We have also picked up the pace of investment in new IP based on our capacity to develop and holistically monetize properties across publishing and entertainment.

"Following the quarter close, we updated our Form S-1 Statement to register our common stock with the SEC as we move closer to uplisting on a national exchange. The previously announced sale of our CTM subsidiary closed in February, greatly simplifying our story and strengthening our balance sheet."

Consolidated P&L Highlights

(In millions, except net loss per share, unaudited)
(Numbers may not foot due to rounding)
 
1Q20
 
4Q20
 
1Q20
 
Revenue
 
$8.4
 
$10.1
 
$10.3
 
Direct cost of revenue
 
$9.2
 
$6.5
 
$11.6
 
SG&A including non-cash compensation
 
$4.2
 
$4.5
 
$4.4
 
Non-cash compensation included in SG&A
 
$0.1
 
$0.2
 
$0.6
 
Depreciation & amortization
 
$0.1
 
$0.1
 
$0.1
 
Bad debt expense
 
$0.0
 
$0.4
 
$0.0
 
Interest and other expense, net
 
$0.0
 
$0.3
 
$0.0
 
Loss from continuing operations
 
$(5.1)
 
$(1.7)
 
$(5.8)
 
Loss from discontinued operations
 
$(1.1)
 
$(0.3)
 
$(1.1)
 
Net loss attributable to IDW Media
 
$(6.3)
 
$(2.2)
 
$(6.8)
 
Loss per share - continuing operations
 
$(0.51)
 
$(0.17)
 
$(0.78)
 
Loss per share - discontinued operations, net
 
$(0.11)
 
$(0.03)
 
$(0.14)
 
Net loss per share
 
$(0.62)
 
$(0.20)
 
$(0.92)
 

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

(in millions, unaudited)
 
1Q21
 
4Q20
 
1Q20
 
Revenue
 
 
 
 
 
 
 
IDW Publishing
 
$5.6
 
$7.7
 
$6.3
 
IDW Entertainment
 
$2.8
 
$2.4
 
$4.0
 
 
 
 
 
 
 
 
 
(Loss) income from operations*
 
 
 
 
 
 
 
IDW Publishing
 
$(0.4)
 
$0.5
 
$0.1
 
IDW Entertainment
 
$(4.6)
 
$(2.0)
 
$(5.6)
 
CTM*
 
$(1.1)
 
$(0.3)
 
$(1.1)
 
Corporate (unallocated overhead)
 
$(0.2)
 
$(0.3)
 
$(0.3)
 

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

Financial Take-Aways

  • Revenue:
    • IDWP direct market recovering. Driven by strong sales of Star Wars: High Republic Adventures #1 and Teenage Mutant Ninja Turtles: The Last Ronin. Increases in digital and publishing revenues offset by decline in games sales.
    • IDW Entertainment (IDWE) revenue generated entirely by the delivery of certain episodes of Wynonna Earp, Season 4. Revenue decreased from the year ago quarter when IDWE delivered certain October Faction episodes.
  • Income (loss) from Operations:
    • IDWP generated positive EBITDA with strong publishing and digital sales partially offset by increases in personnel expenses and royalties.
    • IDWE costs principally are related to WE production. In addition, they include an impairment of $2.1 million as a result of a recently adopted accounting standard.
  • CTM Media: CTM Media's results were reported as discontinued operations reflecting the pending sale of the business. Following the quarter close, the sale closed.
  • Balance Sheet Highlights: At January 31, 2021, IDW's cash balance was $8.7 million. Working capital (current assets less current liabilities) totaled $13.3 million.

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 March 22, 2021 by dialing 1-844-512-2921 (toll free - U.S.) or 1-412-317-6671 (toll - international) and providing this replay PIN number: 13717453. A replay will also be available via streaming audio through the IDW investor relations website.

About IDW

IDW (OTC PINK: 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.
CONDENSED CONSOLIDATED BALANCE SHEETS

             
(in thousands, except per share data)
  January 31,
2021 (unaudited)
    October 31,
2020
 
Assets
           
Current assets:
           
Cash and cash equivalents
  8,733     10,541  
Trade accounts receivable, net
    19,429       22,921  
Inventory
    3,596       3,754  
Prepaid expenses
    1,646       1,361  
Current assets held for sale from discontinued operations
    9,976       11,171  
Total current assets
    43,380       49,748  
Property and equipment, net
    396       410  
Right-of-use assets, net
    656       771  
Non-current assets
               
Investments
    -       25  
Intangible assets, net
    41       52  
Goodwill
    199       199  
Television costs, net
    1,087       2,926  
Other assets
    541       527  
Total assets
  46,300     54,658  
Liabilities and stockholders' equity
               
Current liabilities:
               
Trade accounts payable
  912     1,406  
Accrued expenses
    6,288       3,953  
Deferred revenue
    1,850       2,385  
Bank loans payable - current portion
    11,127       14,204  
Government loans- current portion
    994       793  
Operating lease obligations - current portion
    584       562  
Other current liabilities
    110       69  
Current liabilities held for sale from discontinued operations
    8,223       8,540  
Total current liabilities
    30,088       31,912  
Non-current liabilities
               
Operating lease obligations - long term portion
    214       368  
Government loans - long term portion
    201       403  
Related party loans payable - long term portion
    3,750       3,750  
Total non-current liabilities
    4,165       4,521  
Total liabilities$
    34,253     36,433  
Stockholders' equity (see note 3):
               
Preferred stock, $.01 par value; authorized shares - 500; no shares issued at January 31, 2021 and October 31, 2020
            -  
Class B common stock, $0.01 par value; authorized shares - 12,000; 10,008 and 9,987 shares issued and 9,489 and 9,467 shares outstanding at January 31, 2021 and October 31, 2020, respectively
    94       93  
Class C common stock, $0.01 par value; authorized shares - 2,500; 545 shares issued and outstanding at January 31, 2021 and October 31, 2020
    5       5  
Additional paid-in capital
    111,467       111,379  
Accumulated other comprehensive loss
    (72)       (60 )
Accumulated deficit
    (98,251)       (91,996 )
Treasury stock, at cost, consisting of 519 shares of Class B common stock at January 31, 2021 and October 31, 2020
    (1,196)       (1,196 )
Total stockholders' equity
    12,047       18,225  
Total liabilities and stockholders' equity
  46,300     54,658  
                 

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

       
 
  Three months ended
January 31,
 
(in thousands, except per share data)
  2021     2020  
 
           
Revenues
  8,413     10,336  
 
               
Costs and expenses:
               
Direct cost of revenues
    9,233       11,616  
Selling, general and administrative
    4,242       4,436  
Depreciation and amortization
    59       68  
Bad debt expense
    -       -  
Total costs and expenses
    13,534       16,120  
Loss from operations
    (5,121)       (5,784 )
 
               
Interest expense, net
    (13)       (9 )
Other expense, net
    -       (25 )
Loss before income taxes
    (5,134)       (5,818 )
(Provision for) benefit from income taxes
    -       -  
Net loss from continuing operations
    (5,134)       (5,818 )
 
               
Loss from discontinued operations, net
    (1,121)       (1,054 )
 
               
Net loss
    (6,255)       (6,872 )
 
               
Net income attributable to non-controlling interests
    -       84  
 
               
Net loss attributable to IDW Media Holdings, Inc
  (6,255)     (6,788 )
 
               
Basic and diluted loss per share (note 2):
               
Continuing operations
  (0.51)     (0.78 )
Discontinued operations, net
    (0.11)       (0.14 )
Net loss
  (0.62)     (0.92 )
 
               
Weighted-average number of shares used in the calculation of basic and diluted loss per share:
    9,992       7,455  
 
               
Dividend declared per common share:
  0.00     0.00  
                 

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

             
Three months ended January 31,
(in thousands)
  2021     2020  
Operating activities:
           
Net loss
  (6,255)     (6,872 )
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
               
Depreciation and amortization
    218       316  
Amortization of finance lease
    92       104  
Bad debt expense
    (109)       51  
Stock based compensation
    26       341  
Stock options
    38       304  
Amortization of right-of-use asset
    358       434  
Changes in assets and liabilities:
               
Trade accounts receivable
    3,786       (1,107 )
Inventory
    159       (269 )
Prepaid expenses and other assets
    (229)       (193 )
Television costs
    1,839       6,359  
Trade accounts payable, accrued expenses and other current liabilities
    2,091       (1,660 )
Deferred revenue
    (693)       (172 )
Gain on extinguishment of PPP loan
    (68)       -  
Gain on sale of long lived assets
            (8 )
Operating lease liability
    (367)       (408 )
Net cash provided by (used in) operating activities
    886       (2,780 )
Investing activities:
               
Capital expenditures
    (55)       (307 )
Proceeds on disposition of long lived assets
            8  
Net cash used in investing activities
    (55)       (299 )
Financing activities:
               
Proceeds from issuance of common stock
    25       783  
Non-controlling interest investment in subsidiary
    -       201  
Repayments of finance lease obligations
    (92)       (105 )
Proceeds of bank loans
    17       1,195  
Repayments of bank loans
    (3,076)       (4,507 )
Net cash used in financing activities
    (3,126)       (2,433 )
Effect of exchange rate changes on cash and cash equivalents
    (12)       (49 )
Net decrease in cash and cash equivalents
    (2,307)       (5,561 )
Cash and cash equivalents at beginning of period
    12,162       10,165  
 
               
Cash and cash equivalents at end of period
  9,855     4,604  
 
               
Supplemental schedule of investing and financing activities
               
Cash paid for interest
  11     19  
                 

SOURCE: IDW Media Holdings Inc.

Topic:
Earnings
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