IDW Reports Second Quarter Fiscal 2021 Results
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IDW Reports Second Quarter Fiscal 2021 Results

Monday, June 14, 2021 4:15 PM
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Earnings
IDW Media Holdings Inc.

Net Income Increased to $2.5 million

Publishing Revenue Increased 28% Led by Resurgent Direct Market Sales

Sale of CTM Media Completed

NEWARK, NJ and LOS ANGELES, CA / ACCESSWIRE / June 14, 2021 / IDW Media Holdings, Inc. (OTC PINK:IDWM), an integrated media company, today reported net income per share of $0.25 on revenue of $10.1 million for the three months ended April 30, 2021.

Second Quarter Fiscal 2021 (2Q21) Highlights

  • Consolidated revenue increased to $10.1 from $9.3 million in 2Q20.
  • COVID-19 Update: At IDW Publishing, direct market sales continued to recover. IDW Entertainment continued to be impacted by industry-wide production / greenlight delays.
  • Consolidated income from operations decreased to $0.4 million compared to $1.3 million in 2Q20.
  • Net income per share increased to $0.25 from a loss per share of $(0.04) in 2Q20 boosted by a gain on the sale of CTM Media of $0.21 per share.
  • IDW Publishing, long a leader in industry critical acclaim, was nominated for eleven (including one shared nomination) 2021 Will Eisner Comic Industry Awards. The prestigious awards honor exemplary work in comics publishing.

. Comments from Ezra Rosensaft, Chief Executive Officer 
"IDW continued to progress financially and operationally during the second quarter highlighted by a return to profitability even as we ramped up our investment in exciting long-term growth opportunities.

"IDW Publishing achieved solid year over year revenue growth reflecting sustained execution on its strategic priorities including continuing genre expansion, leveraging high yield opportunities in the ecommerce space, as well as the resurgence of direct market sales, leading with chart-topping comic releases and increased in-person foot traffic in local comic shops.

"At IDW Entertainment Locke & Key seasons 2 and 3, greenlit by Netflix, are making progress on their respective production paths as COVID pandemic restrictions ease. Netflix plans to premiere season 2 in October. We are also excited about other projects that we are working to bring to market.

"Finally, we are working toward registering our securities with the SEC in preparation for our planned uplist to a national exchange. Our uplist is on track for completion this summer."

Consolidated P&L Highlights

(In millions, except income (loss) per share, unaudited)
  2Q21   1Q21   2Q20 
Revenue
 $10.1  $8.4  $9.3 
Direct cost of revenue
 $4.7  $9.2  $3.3 
SG&A including non-cash compensation
 $4.9  $4.2  $4.6 
Non-cash compensation included in SG&A
 $0.1  $0.1  $0.2 
Depreciation & amortization
 $0.1  $0.1  $0.1 
Income (loss) from operations
 $0.4  $(5.1)  $1.3 
Net income (loss) from continuing operations
 $0.6  $(5.1)  $1.3 
(Loss) from discontinued operations, net
 $(0.2)  $(1.1)  $(1.6) 
Gain on sale of discontinued operations
 $2.1   -   - 
Net income (loss)
 $2.5  $(6.3)  $(0.4) 
Income (loss) per share - continuing operations
 $0.27*  $(0.51)  $0.15 
Loss per share - discontinued operations
 $(0.02)  $(0.11)  $(0.19) 
Net income (loss) per share
 $0.25  $(0.62)  $(0.04) 

* Sale of discontinued operations included

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

(in millions, unaudited)
  2Q21   1Q21   2Q20 
Revenue
            
IDW Publishing
 6.0  5.6  4.7 
IDW Entertainment
 4.2  2.8  4.6 

 
            
(Loss) income from operations*
            
IDW Publishing
 (0.5)  (0.4)  (0.6) 
IDW Entertainment
 1.2  (4.6)  2.2 
CTM*
 (0.2)  (1.1)  (1.6) 
Corporate (unallocated overhead)
 (0.3)  (0.2)  (0.2) 

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

Financial Take-Aways

  • Revenue:
    • IIDW Publishing ("IDWP"): Direct market recovery drove publishing revenue growth, led by titles from high profile properties - both original and licensed - including Locke & Key/The Sandman Universe crossover, Sonic the Hedgehog, X-Men, and TMNT. Sales to major retailers contributed nearly half of IDWP revenue. Sales through other brick-and-mortar retailers contributed a smaller but growing share of IDWP sales.
    • IDW Entertainment (IDWE): Revenue was generated by the finalization of credits for production of V-Wars and October Faction from the Canadian Revenue Agency (CRA) and the delivery of final episodes of Wynonna Earp, Season 4.
  • (Loss) Income from Operations:
    • IDWP: The quarter's loss was primarily attributable to non-routine factors including a write-down of capitalized expenses related to tabletops games, a line of business from which IDWP has exited, and severance expense as well as increased personnel expense.
    • IDWE: Income from operations decreased due to the amortization of production expenses for episodes of Wynonna Earp Season 4 episodes delivered during the quarter.
  • CTM Media: CTM Media's results were reported as discontinued operations for all periods presented. The CTM sale was consummated on February 15, 2021, which was reflected this quarter as a gain on the sale of discontinued operations.
  • Balance Sheet Highlights: At April 30, 2021, IDW's cash balance was $7.6 million. Working capital (current assets less current liabilities) totaled $13.1 million.

Earnings Conference Call 
IDW's management will host an earnings conference call beginning at 5:00 PM Eastern 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 June 21, 2021 by dialing 1-844-512-2921 (toll free - U.S.) or 1-412-317-6671 (toll - international) and providing this replay PIN number: 13720075. 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 and leverage established stories across multiple entertainment platforms including comics and graphic novels, television and merchandise.

Investor Contact 
IDW Media Investor Relations
[email protected]

IDW MEDIA HOLDINGS, INC. 
CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except per share data)
 April 30, 
2021 
(unaudited)
  October 31, 
2020
 
Assets
 
 
  
 
 
Current assets:
 
 
  
 
 
Cash and cash equivalents
 $7,607  $10,541 
Trade accounts receivable, net
  22,063   22,921 
Inventory
  3,667   3,754 
Prepaid expenses
  2,178   1,361 
Current assets held for sale from discontinued operations
  -   11,171 
Total current assets
  35,515   49,748 
Property and equipment, net
  364   410 
Right-of-use assets, net
  539   771 
Non-current assets
        
Investments
  -   25 
Intangible assets, net
  30   52 
Goodwill
  199   199 
Television costs, net
  1,270   2,926 
Other assets
  325   527 
Total assets
 $38,242  $54,658 
Liabilities and stockholders' equity
        
Current liabilities:
        
Trade accounts payable
 $1,163  $1,406 
Accrued expenses
  5,424   3,953 
Deferred revenue
  2,125   2,385 
Bank loans payable - current portion
  11,664   14,204 
Government loans- current portion
  1,320   793 
Operating lease obligations - current portion
  603   562 
Other current liabilities
  80   69 
Current liabilities held for sale from discontinued operations
  -   8,540 
Total current liabilities
  22,379   31,912 
Non-current liabilities
        
Operating lease obligations - long term portion
  59   368 
Government loans - long term portion
  1,071   403 
Related party loans payable - long term portion
  -   3,750 
Total non-current liabilities
  1,130   4,521 
Total liabilities
 $23,509  $36,433 
Stockholders' equity (see note 3):
        
Preferred stock, $.01 par value; authorized shares - 500; no shares issued at April 30, 2021 and October 31, 2020
  -   - 
Class B common stock, $0.01 par value; authorized shares - 12,000; 10,024 and 9,987 shares issued and 9,505 and 9,467 shares outstanding at April 30, 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 April 30, 2021 and October 31, 2020
  5   5 
Additional paid-in capital
  94,267   111,379 
Accumulated other comprehensive loss
  -   (60) 
Accumulated deficit
  (78,437)   (91,996) 
Treasury stock, at cost, consisting of 519 shares of Class B common stock at April 30, 2021 and October 31, 2020
  (1,196)   (1,196) 
Total stockholders' equity
  14,733   18,225 
Total liabilities and stockholders' equity
 $38,242  $54,658 
         

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)
 2021  2020  2021  2020 
Revenues
 $10,140  $9,268  $18,552  $19,605 
Costs and expenses:
                
Direct cost of revenues
  4,726   3,295   13,959   14,912 
Selling, general and administrative
  4,910   4,583   9,149   9,019 
Depreciation and amortization
  60   61   120   128 
Bad debt expense
  11   -   11   - 
Total costs and expenses
  9,707   7,939   23,239   24,059 
Income (loss) from operations
  433   1,329   (4,687)   (4,454) 

 
                
Interest income (expense), net
  156   (10)   142   (20) 
Other expense, net
  (12)   (35)   (13)   (61) 
Income (loss) before income taxes
  577   1,284   (4,558)   (4,535) 
Provision for income taxes
  -   -   -   - 
Net income (loss) from continuing operations
  577   1,284   (4,558)   (4,535) 

 
                
Loss from discontinued operations, net
  (159)   (1,638)   (1,280)   (2,692) 
Gain on sale of discontinued operations
  2,123   -   2,123   - 
Net income (loss)
 $2,541  $(354)  $(3,715)  $(7,227) 

 
                
Basic and diluted income (loss) per share (note 2):
                
Continuing operations
 $0.27  $0.15  $(0.24)  $(0.56) 
Discontinued operations
  (0.02)   (0.19)   (0.13)   (0.33) 
Net income (loss)
 $0.25  $(0.04)  $(0.37)  $(0.89) 

 
                
Weighted-average number of shares used in the calculation of basic and diluted income (loss) per share:
  9,972   8,845   9,962   8,143 
                 

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


 
 Six months ended 
April 30,
 
(in thousands)
 2021  2020 
Operating activities:
 
 
  
 
 
Net loss
 $(3,715)  $(7,227) 
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
        
Depreciation and amortization
  307   527 
Amortization of finance leases
  108   165 
Bad debt expense
  (97)   482 
Stock based compensation
  82   520 
Stock options
  77   333 
Amortization of right-of-use asset
  513   995 
Gain on sale of discontinued operations
  (2,123)   - 
Loss on deconsolidation of subsidiary
  -   35 
Changes in assets and liabilities:
        
Trade accounts receivable
  847   8,591 
Inventory
  88   (820) 
Prepaid expenses and other assets
  (589)   115 
Television costs
  1,656   6,872 
Right-of-use assets
  (269)   (814) 
Trade accounts payable, accrued expenses and other current liabilities
  1,239   (2,702) 
Deferred revenue
  (260)   1,254 
Gain on extinguishment of PPP loan
  (68)   - 
Gain on disposal of ROU assets
  (97)   - 
Deconsolidation of subsidiary
  -   339 
Net cash (used in) provided by operating activities
  (2,301)   8,665 
Investing activities:
        
Disposition of subsidiary, net of cash received
  -   (115) 
Disposal of discontinued operations
  (902)   - 
Capital expenditures
  (72)   (299) 
Net cash used in investing activities
  (974)   (414) 
Financing activities:
        
Proceeds from issuance of common stock
  25   13,268 
Repayments of finance lease obligations
  -   (207) 
Proceeds of bank loans
  -   2,217 
Proceeds from government loans
  1,196   - 
Repayments of related party loans
  -   (4,050) 
Repayments of bank loans
  (2,540)   (13,732) 
Net cash used in financing activities
  (1,319)   (2,504) 
Effect of exchange rate changes on cash and cash equivalents
  39   (45) 
Net (decrease) increase in cash and cash equivalents
  (4,555)   5,702 
Cash and cash equivalents at beginning of period
  12,162   10,165 
Cash and cash equivalents at end of period
 $7,607  $15,867 

 
        
Supplemental schedule of investing and financing activities
        
Cash paid for interest
 $-  $18 
Cash paid for income taxes
 $-  $- 
         

SOURCE: IDW Media Holdings Inc.

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