HOLLYWOOD MEDIA CORP. ANNOUNCES 2006 FOURTH QUARTER AND YEAR-END RESULTS
Tuesday, March 13, 2007
(Boca Raton, FL – March 13, 2007) – Hollywood Media Corp. (NasdaqGM: HOLL), a leading provider of news, information and ticketing covering the entertainment and media industries, today announced financial results for the fourth quarter and year ended December 31, 2006.
FOURTH QUARTER AND FULL-YEAR 2006 FINANCIAL RESULTS
As previously reported, Hollywood Media’s Baseline StudioSystems business unit was sold to The New York Times Company in August 2006. For purposes of the financial results presented in this press release in accordance with GAAP, the gain on the sale and the operating results of Baseline StudioSystems are reported as discontinued operations and excluded from Hollywood Media’s net revenues and results of continuing operations for all periods presented. This presentation provides more meaningful year-to-year comparisons of Hollywood Media’s continuing operations.
Hollywood Media’s net revenues for the three months ended December 31, 2006 increased 31.7 percent to $35.7 million compared to $27.1 million for the fourth quarter of 2005. For the year ended December 31, 2006 net revenues increased 28.3 percent to $115.9 million compared to $90.4 million in 2005.
The loss from continuing operations for the fourth quarter of 2006 decreased by 28.3 percent to $1.2 million, compared to a $1.6 million loss from continuing operations in the fourth quarter of 2005. For the full year 2006, the loss from continuing operations decreased by 22.5 percent to $7.4 million, compared to the $9.6 million loss from continuing operations in 2005.
EBITDA (Modified)* (which excludes the gain on sale and operating results of Baseline StudioSystems) for the fourth quarter of 2006 was a loss of $716,883 compared to a loss of $894,499 in EBITDA (Modified) for the fourth quarter of 2005. The Company notes that the EBITDA (Modified) for the fourth quarter of 2006 includes, among other things, the following items: a gain of $56,536 due to a change in the fair value of a derivative liability associated with certain warrants; and aggregate non-cash charges of $351,502 in stock-based compensation expense.
EBITDA (Modified)* for the full year 2006 was a loss of $3.8 million compared to a loss of $7.6 million in EBITDA (Modified) for the full year 2005.
Net loss for the fourth quarter of 2006 was $1.7 million, or $0.05 per basic and diluted share. Net loss for the fourth quarter of 2006 included $0.5 million of income tax charges relating to the Baseline StudioSystems disposition. Net loss for the fourth quarter of 2005 was $1.4 million, or $0.04 per basic and diluted share. Net loss for the fourth quarter of 2005 included $0.2 million of income from Baseline StudioSystems, which represents the reclassified activities for the period from continuing operations to discontinued operations. Net income for the full year 2006 (which includes the gain on sale of Baseline StudioSystems) was $9.5 million, or $0.29 per basic and diluted share, compared to a net loss of $8.9 million for the full year 2005, or a net loss of $0.28 per basic and diluted share.
The Company ended 2006 with $27.4 million in cash and cash equivalents on hand, compared to cash and cash equivalents of $6.9 million at December 31, 2005. The cash and cash equivalents balance at December 31, 2006 does not include a $2.8 million cash portion of the purchase price for Baseline StudioSystems currently held in escrow and expected to be released to Hollywood Media during 2007 under the terms of the sale.
“In the fourth quarter, we generated strong top-line growth in our three major segments, with a record performance from our Broadway Ticketing business,” commented Mitchell Rubenstein, Hollywood Media’s Chief Executive Officer. “We expect the momentum in Broadway Ticketing to continue as highlighted by our record deferred revenue for Broadway Ticketing of $20.7 million at December 31, 2006, which represents sales for future Broadway performances.”
Mr. Rubenstein continued, “We believe the Company’s prospects remain strong and that we are making the necessary investments and strategic add-ons to position Hollywood Media for profitability and success. While we continue developing our businesses, we are also working with JPMorgan as our financial advisor to actively consider opportunities for our businesses, including potential dispositions. As a result of this ongoing process, the Company currently is precluded from implementing certain alternatives for returning cash to shareholders which had been under consideration by our Board of Directors. When this process is concluded, the Board intends to resume consideration of alternatives for returning cash to shareholders. We cannot make assurances as to the timing or occurrence of any such events.”
Fourth Quarter 2006 Business Review
During the fourth quarter of 2006, Broadway Ticketing revenue was $31.1 million, a 31.9 percent increase as compared to the fourth quarter of 2005. EBITDA* for the Broadway Ticketing division in the fourth quarter of 2006 was $1.7 million, a 57.6 percent increase as compared to the fourth quarter of 2005. These increases relate to Broadway.com’s growing position as a premier destination site for purchasing tickets to Broadway shows and viewing editorial and multimedia coverage of Broadway. Increased average Broadway ticket prices and strong holiday tourism also contributed to the segment’s performance.
Deferred revenue related to Broadway Ticketing, a leading indicator of future Broadway Ticketing revenues, increased to $20.7 million as of December 31, 2006, up 26.4 percent compared to $16.4 million of deferred revenue as of December 31, 2005.
Subsequent to the close of the quarter and as previously reported, the Broadway Ticketing division acquired the Broadway ticketing business of Showtix LLC which focuses on group ticket sales. This acquisition strengthens the Company’s position as one of the leading sellers of Broadway tickets and the Company expects meaningful EBITDA contribution from this transaction beginning in the third quarter of 2007 as it integrates operations and eliminates redundancies.
The Company’s Theatre.com operations in the U.K., which commenced selling West End tickets in February 2006, had revenues of $926,762 and operating expenses of $951,545 for the fourth quarter of 2006.
The Company’s Data Business segment (excluding Baseline StudioSystems for all periods) contributed revenue of $1.7 million during the fourth quarter of 2006, an increase of 28.4 percent from the prior-year period. Segment EBITDA* improved 42.4 percent to $715,793, as compared to the prior-year period, on the strength of high-margin incremental revenues from new customers.
Revenues for the Ad Sales segment increased 28.7 percent from the prior-year period to $2.3 million in the fourth quarter of 2006 primarily as a result of the full quarter contribution from CinemasOnline acquired in November 2005. The Ad Sales segment includes Internet advertising sales on Hollywood.com and Broadway.com as well as Internet and other advertising sales by CinemasOnline. During the period, Hollywood.com continued to generate increased traffic with approximately 35 percent of site traffic in the fourth quarter coming from Hollywood.com’s popular fan sites which were acquired in January 2006.
EBITDA* for the Ad Sales segment was a loss of $264,452 in the fourth quarter of 2006. EBITDA for the quarter was impacted by a higher level of costs in the period for website development projects. These projects realized improvements to the fan sites as well as other enhancements to the Hollywood.com site expected to further drive traffic. Recently the Company significantly increased its ad sales force to capitalize on strong user trends and higher advertising inventory availability resulting from the growth in page views on Hollywood.com.
Hollywood.com Television (“HTV”), our free Video-on-Demand cable TV network, generated $58,299 in revenue for the fourth quarter of 2006 and $174,899 for the year. HTV’s capacity for additional advertising slots and corresponding revenue are anticipated to grow in 2007 as ad sell-through and viewer usage increases. Distribution of HTV through cable operators has grown to approximately 19 million VOD-capable homes as of December 31, 2006, from approximately 15 million homes as of December 31, 2005.
SELECT SEGMENT HIGHLIGHTS
The following tables provide revenue, EBITDA* and net income data for our three highest revenue generating segments: Broadway Ticketing, Data Business and Ad Sales. 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 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 December 31 (“Q4”)
Net Income (Loss)
Year Ended December 31
Net Income (Loss)
Management will host a teleconference to discuss Hollywood Media’s 2006 fourth quarter financial results on Tuesday, March 13, 2007 at 4:30 p.m. Eastern Time. To access the teleconference, please dial 888-200-4690 (U.S.) or 973-935-8767 (international) approximately five minutes prior to the start of the call. The reference passcode for the call is 8545932. The teleconference will also be available via live webcast on the investor relations portion of Hollywood Media’s Web site, located at http://www.hollywood.com/about_us/. Following prepared remarks, management will take questions from the audience via phone and e-mail. To ask a question via e-mail, please send your questions to firstname.lastname@example.org in advance of, or during, the live call.
If you are unable to listen to the live teleconference at its scheduled time, there will be a replay available through March 20, 2007 and can be accessed by dialing 877-519-4471 (U.S.), 973-341-3080 (Int’l), passcode 8545932. An archived version of the webcast will also be available for a longer period 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 Data Business division including CinemaSource, EventSource, and ExhibitorAds; 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: