HOLLYWOOD MEDIA CORP. REPORTS SECOND QUARTER 2007 RESULTS
Thursday, August 09, 2007
Second Quarter Revenues Increase 25.3% to $39.6 Million
Second Quarter Broadway Ticketing Revenues Up 28.8% to $34.8 Million
(Boca Raton, FL – August 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 second quarter ended June 30, 2007.
SECOND QUARTER 2007 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 operating results of Baseline StudioSystems for the second quarter of 2006 are reported as discontinued operations and excluded from Hollywood Media’s net revenues and results of continuing operations for that period. 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 June 30, 2007 increased 25.3 percent to $39.6 million compared to $31.6 million for the second quarter of 2006.
EBITDA (Modified)* for the second quarter of 2007 was a loss of $847,108 compared to a loss of $139,015 for the second quarter of 2006. For comparison purposes, note that EBITDA (Modified) for the second quarter of 2006 includes a non-cash gain of $584,000 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 second quarter of 2007 were also impacted by several factors discussed in the business review section below.
The loss from continuing operations for the second quarter of 2007 was $1.4 million, compared to a $1.2 million loss from continuing operations in the second quarter of 2006.
Net loss for the second quarter of 2007 was $1.4 million, or a loss of $0.04 per basic and diluted share. Net loss for the second quarter of 2006 was $1.0 million, or $0.03 per basic and diluted share. Net loss for the second quarter of 2006 includes $191,599 of income from Baseline StudioSystems, which represents the re-classified activities for the period reported as discontinued operations.
The Company’s cash and cash equivalents on hand were $12.6 million at June 30, 2007, as compared to cash and cash equivalents of $20.7 million at March 31, 2007. This decrease was due in part to the Company’s full repayment in May 2007 of $7.0 million principal amount of senior unsecured notes. The cash and cash equivalents balance at June 30, 2007 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 in August 2007 under the terms of the sale.
“Our second quarter revenue performance benefited from the contribution of our Broadway Ticketing business, which represented nearly 88% of revenues in the period,” commented Mitchell Rubenstein, Hollywood Media’s Chief Executive Officer. “In addition to realizing strong revenue from this business during the period, we also positioned it for future gains as we look toward the important fourth quarter holiday season after the traditionally seasonally slow third quarter. We also expect to leverage pricing against increasing demand in a more favorable regulatory environment while maintaining our business model of offering quality Broadway tickets at reasonable prices.”
Mr. Rubenstein continued, “While our day-to-day emphasis remains on improving operating performance for our Company as a whole, we also remain very active in exploring a number of opportunities as part of our ongoing strategic review process.”
SECOND QUARTER 2007 BUSINESS REVIEW
During the second quarter of 2007, Broadway Ticketing revenues were $34.8 million, a 28.8 percent increase as compared to the second quarter of 2006.
EBITDA* for the Broadway Ticketing division in the second quarter of 2007 was $990,198, a 6.8 percent increase as compared to the second quarter of 2006. EBITDA for the segment was impacted by temporary redundant lease expense of $181,243 during the second quarter of 2007 as the Company consolidates its New York offices and $175,000 for a new outdoor advertising initiative launched in June 2007 targeting the New York tri-state area, the revenue impact of which is expected in the fourth quarter of this year.
Deferred revenue related to Broadway Ticketing was $20.2 million as of June 30, 2007, up 12.0 percent compared to $18.0 million of deferred revenue as of June 30, 2006.
The net loss for the Company’s U.K.-based Theatre.com operations was $46,659 in the second quarter of 2007 compared to a loss of $324,278 in the first quarter of 2007. The reduced loss was a result of management’s emphasis on containing costs as it refines its operating model in this emerging business.
The Company’s Data Business segment (excluding the discontinued operations of Baseline StudioSystems) contributed revenue of $1.6 million during the second quarter of 2007, an increase of 3.2 percent from the prior-year period. The Data Business EBITDA* increased by $77,758 or 14.9 percent from $520,412 in the second quarter of 2006 to $598,170 in the second quarter of 2007.
Revenues for the Ad Sales segment increased 3.3 percent from the prior-year period to $2.8 million in the second quarter of 2007. 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 $53,213 in the second quarter of 2007, compared to a gain of $276,023 in the second quarter of 2006. EBITDA for the recent period was impacted by the continued investment in the expansion of the segment’s ad sales force. The Company has also recently hired a new President of Hollywood.com to oversee sales and editorial for Hollywood.com.
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 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 June 30th (“Q2”)
Net Income (Loss)
(a) The Broadway Ticketing segment’s EBITDA and Net Income in the second quarter of 2007 as compared to the second quarter of 2006 was negatively impacted by temporary redundant lease expense of $181,243 during the second quarter of 2007 as the Company consolidates its New York offices and $175,000 for a new outdoor advertising initiative launched in June 2007, the revenue impact of which is expected in the fourth quarter of this year.
(b) Net Income (Loss) for the Data Business segment represents Net Income from continuing operations.
If you are unable to listen to the live teleconference at its scheduled time, there will be a replay available through August 16, 2007 and can be accessed by dialing 877-519-4471 (U.S.), 973-341-3080 (Int’l), passcode 9061372. 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 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: