HOLLYWOOD MEDIA CORP. REPORTS THIRD QUARTER 2007 RESULTS
Friday, November 09, 2007
Third Quarter Revenues Increase 16% to $28 Million
Third Quarter Broadway Ticketing Net Income Up 65%
(Boca Raton, FL – November 9, 2007) – Hollywood Media Corp. (NasdaqGM: HOLL), a leading provider of news, information and ticketing covering the entertainment and media industries, today reported financial results for the third quarter ended September 30, 2007.
THIRD QUARTER 2007 FINANCIAL RESULTS
As previously reported, in August 2007 Hollywood Media sold its Source business unit to West World Media, LLC, and in August 2006 Hollywood Media sold its Baseline StudioSystems business unit to The New York Times Company. For purposes of the financial results presented in this press release in accordance with GAAP, the operating results and the gain on sale of these sold businesses are reported as discontinued operations and excluded from Hollywood Media’s net revenues and results of continuing operations for all periods presented.
Hollywood Media’s net revenues (which exclude the sale and operating results of the discontinued operations noted above) for the three months ended September 30, 2007 increased 15.6% to $28.2 million compared to $24.4 million for the third quarter of 2006.
The loss from continuing operations for the third quarter of 2007 was $2.2 million, an improvement of 15.3%, compared to a $2.5 million loss from continuing operations in the third quarter of 2006. The net loss per share from continuing operations was $0.06 on a per share basis for the third quarter of 2007, as compared to $0.08 on a per share basis for the third quarter of 2006.
EBITDA (Modified)* (which excludes the sale and operating results of the discontinued operations noted above) for the third quarter of 2007 was a loss of $1.9 million, an increase of 19.3%, compared to a loss of $1.6 million for the third quarter of 2006. For comparison purposes, note that EBITDA (Modified) for the third quarter of 2006 includes a non-cash gain of $240,000 due to a derivative liability which no longer exists as a result of its elimination to additional paid-in capital in accordance with a change in accounting pronouncements effective January 1, 2007. EBITDA (Modified) results for the third quarter of 2007 were also impacted by several factors discussed in the business review section below.
Net income (which includes discontinued operations) for the third quarter of 2007 was $8.1 million, or $0.24 per basic and diluted share, compared to a net income of $15.0 million for the third quarter of 2006, or $0.45 on a per share basis.
The Company’s cash and cash equivalents on hand were $34.5 million at September 30, 2007, as compared to cash and cash equivalents of $12.6 million at June 30, 2007. This increase was due in large part to Hollywood Media’s receipt of cash proceeds of $23.0 million from the sale of its Source business on August 24, 2007 (with net cash proceeds from such sale of approximately $20.5 million after deducting estimated taxes and certain other related expenses), and receipt of a cash payment of approximately $2.9 million in September 2007 as a release of the escrowed portion of the purchase price for last year's sale of the Baseline StudioSystems business. The balance also reflects the full repayment in May 2007 of $7.0 million principal amount of the Company’s senior unsecured notes.
“Our overall revenue increase was driven by continued double digit growth in our Broadway Ticketing business during the traditionally seasonally slow third quarter,” commented Mitchell Rubenstein, Hollywood Media’s Chief Executive Officer. “We also began to witness the positive impact on our Broadway Ticketing operating income and margins during the quarter, as we implemented increased pricing flexibility permitted under recent law changes in New York. Demand for Broadway tickets through Broadway.com remains solid and we are experiencing considerable sales momentum in the current fourth quarter holiday period.”
“We are also taking steps to reduce costs at the corporate level following the sale of the Source business,” Mr. Rubenstein continued. “At the same time, we are continuing to invest in our advertising sales resources and development of Hollywood.com, with the goal of strengthening our online product and more effectively monetizing our audience. As we focus on executing our strategy, we continue to explore opportunities for generating returns for the Company’s shareholders.”
THIRD Quarter 2007 Business Review
During the third quarter of 2007, Broadway Ticketing revenues were $25.1 million, a 16.0% increase as compared to $21.5 million in the third quarter of 2006.
EBITDA* for the Broadway Ticketing division in the third quarter of 2007 was $1.1 million, a 59.1% increase as compared to $701,498 in the third quarter of 2006. EBITDA for the segment increased in large part due to an increase in gross margins to approximately 19% during the quarter, as compared to approximately 16% during the third quarter of 2006, which was partially offset by temporary redundant lease expense of $183,235 as the Company consolidates its New York offices.
Revenues for the Ad Sales segment were $2.7 million in the third quarter of 2007, an increase of 7.0% from the prior-year period. The Ad Sales segment includes Hollywood.com’s revenues from selling advertising on Hollywood.com, commissions received from advertising sold on MovieTickets.com by Hollywood.com, and CinemasOnline’s revenues from selling advertising in the U.K. on theatre Web sites and plasma screens.
EBITDA* for the Ad Sales segment was a loss of $434,175 in the third quarter of 2007, compared to a gain of $73,174 in the third quarter of 2006. EBITDA for the recent period was impacted by the continued investment in Hollywood.com.
INVESTMENT IN MOVIETICKETS.COM
MovieTickets.com (in which Hollywood Media owns a 26.2% interest), recently reported record ticket sales for Summer 2007 (May 2007- August 2007) with movie tickets sold via MovieTickets.com beating May 2006-August 2006 movie tickets sold by over 40%. Moreover, MovieTickets.com now tickets exclusively for over 100 movie theater chains. Note that MovieTickets.com’s earnings are not included in Hollywood Media’s financials for any of the periods presented.
SELECT SEGMENT HIGHLIGHTS
The following tables provide revenue, EBITDA* and net income data for our two highest revenue generating segments. The tables below should be reviewed in conjunction with (i) the “Note on EBITDA” in this press release below and (ii) the attached financial tables which include EBITDA results for all of our reportable segments, with reconciliations to the GAAP results reflected in Hollywood Media’s condensed consolidated income statements. The segment results for our operating divisions do not include expenses in our “Other” segment comprised mainly of specified corporate and public company expenses.
Quarter Ended September 30th (“Q3”)
Net Income (Loss)
If you are unable to listen to the live teleconference at its scheduled time, there will be a replay available through November 16, 2007 and can be accessed by dialing 877-519-4471 (U.S.), 973-341-3080 (Int’l), passcode 9425472. An archived version of the webcast will also be available on the investor relations portion of Hollywood Media’s Web site.
About Hollywood Media Corp.
Hollywood Media Corp. is a leading provider of news, information and ticketing covering the entertainment and media industries. Hollywood Media’s businesses include: its Broadway Ticketing division including Broadway.com, 1-800-Broadway, Theatre Direct International, and London-based Theatre.com; and its Ad Sales division including Hollywood.com and the U.K.-based CinemasOnline. Other Hollywood Media businesses include Hollywood.com Television, a free VOD cable TV network, and Hollywood Media’s minority interest in MovieTickets.com.
*Note on EBITDA
Note on Forward-Looking Statements
Attached are the following financial tables: