SOURCE: Hollywood Media Corp.

Hollywood Media Corp.

October 29, 2013 16:15 ET

Hollywood Media Corp. Reports 2013 Third Quarter Results

BOCA RATON, FL--(Marketwired - Oct 29, 2013) - Hollywood Media Corp. ("Company") (NASDAQ: HOLL) today reported financial results for the third quarter ended September 30, 2013.

On a continuing operations basis, which includes the contribution from Tekno Books, the Company's 100% owned subsidiary under the Intellectual Property division, net revenues for the 2013 third quarter were $0.1 million compared to $0.1 million in the prior-year period.

Income from continuing operations for the 2013 third quarter was $8.2 million, or $0.36 per share, compared to a loss from continuing operations for the 2012 third quarter of $2.3 million, or $0.10 per share, which includes a non-cash goodwill impairment charge of $3.6 million relating to the Company's Ad Sales division. Income from continuing operations for the 2013 third quarter was primarily attributable to a $9.2 million gain from the Transaction Agreement (as defined below). Net income was $8.2 million, or $0.36 per share, in the 2013 third quarter, compared to net loss, which includes discontinued operations, of $0.5 million, or $0.02 per share, in the prior-year period. 

At September 30, 2013, the Company had cash and cash equivalents of $24.9 million and no debt as compared to cash and cash equivalents of $11.4 million and no debt at December 31, 2012.

The Company repurchased 521,500 shares of Hollywood Media's common stock for $0.8 million during the first three quarters of 2013, comprised of 510,700 shares in first quarter 2013 and 10,800 shares in second quarter 2013.

On August 8, 2013, the Company entered into the Transaction Agreement (the "Agreement") among Key Brand Entertainment Inc. ("Key Brand"), Theatre Direct NY, Inc. ("Theatre Direct"), and the Company for the prepayment by Key Brand in full of the amount owed to the Company pursuant to the loan (the "Loan") under the Second Lien Credit, Security and Pledge Agreement, dated as of December 15, 2010, among Key Brand, Theatre Direct, and the Company, as amended. Pursuant to the Agreement, Key Brand paid to the Company on August 8, 2013 in cash the amount of $13,861,738, which constituted the outstanding principal plus accrued interest through August 8, 2013 of the Loan. The Loan was scheduled to mature on June 30, 2015. 

In addition, pursuant to the Agreement, Theatre Direct redeemed a warrant ("Warrant") to purchase shares of common stock of Theatre Direct held by the Company. The redemption price for the Warrant was $2,750,000 and was paid on August 8, 2013 to the Company. The Warrant provided, among other things, that the Company could sell the Warrant to Theatre Direct for a floor amount of $3,000,000 beginning on June 30, 2015. 

Accordingly, the Company received on August 8, 2013 a total of $16,611,738 consisting of $13,861,738 from the prepayment of the Loan and $2,750,000 from the redemption of the Warrant.

About Hollywood Media Corp.

Hollywood Media Corp. is comprised primarily of an Ad Sales division and an Intellectual Property division.

Note on Forward-Looking Statements
Statements in this press release may be "forward-looking statements" within the meaning of federal securities laws. The matters discussed herein that are forward-looking statements are based on current management expectations that involve risks and uncertainties that may result in such expectations not being realized. Actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements due to numerous potential risks and uncertainties, including, but not limited to, the need to manage our growth, our ability to realize anticipated revenues and cost efficiencies, the impact of potential future dispositions or other strategic transactions by Hollywood Media Corp., our ability to develop and maintain strategic relationships, technology risks, the volatility of our stock price, and other risks and factors described in Hollywood Media Corp.'s filings with the Securities and Exchange Commission including our Form 10-K for 2012. Such forward-looking statements speak only as of the date on which they are made.

Attached are the following financial tables:
CONDENSED CONSOLIDATED BALANCE SHEETS
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

 
 
HOLLYWOOD MEDIA CORP. AND SUBSIDIARIES      
CONDENSED CONSOLIDATED BALANCE SHEETS      
 
    September 30,     December 31,  
    2013     2012  
    (unaudited)        
ASSETS            
             
CURRENT ASSETS:                
  Cash and cash equivalents   $ 24,867,007     $ 11,378,519  
  Prepaid expenses     1,102,064       329,915  
  Other receivables     74,893       75,105  
  Notes receivable, current     33,603       1,375,545  
  Related party receivable     21,883       37,287  
  Current portion of deferred compensation     430,000       430,000  
    Total current assets     26,529,450       13,626,371  
                 
PROPERTY AND EQUIPMENT, net     360,574       240,645  
INVESTMENTS IN AND ADVANCES TO UNCONSOLIDATED INVESTEES     139,145       138,384  
INTANGIBLE ASSETS, net     2,358       8,683  
GOODWILL     6,200,000       6,200,000  
OTHER ASSETS     195,928       727,982  
NOTES RECEIVABLE, less current portion     84,007       4,455,106  
WARRANT     -       700,000  
DEFERRED COMPENSATION, less current portion     196,151       518,651  
    TOTAL ASSETS   $ 33,707,613     $ 26,615,822  
                 
LIABILITIES AND SHAREHOLDERS' EQUITY                
                 
CURRENT LIABILITIES:                
  Accounts payable   $ 478,144     $ 414,123  
  Accrued expenses and other     964,164       1,036,788  
  Deferred revenue     82,451       111,669  
  Current portion of capital lease obligations     11,318       16,255  
    Total current liabilities     1,536,077       1,578,835  
                 
CAPITAL LEASE OBLIGATIONS, less current portion     28,640       2,152  
OTHER DEFERRED LIABILITY     65       355  
DEFERRED REVENUE     9,000       14,000  
DERIVATIVE LIABILITIES     60,000       60,000  
    TOTAL LIABILITIES     1,633,782       1,655,342  
                 
COMMITMENTS AND CONTINGENCIES                
                 
SHAREHOLDERS' EQUITY:                
  Preferred Stock, $.01 par value, 1,000,000 shares authorized; none outstanding     -       -  
  Common stock, $.01 par value, 100,000,000 shares authorized; 22,640,966 and 23,162,466 shares issued and outstanding at September 30, 2013 and December 31, 2012, respectively     226,410       231,625  
  Additional paid-in capital     292,831,089       293,591,903  
  Accumulated deficit     (260,983,668 )     (268,863,048 )
    Total shareholders' equity     32,073,831       24,960,480  
    TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY   $ 33,707,613     $ 26,615,822  
   
   
   
HOLLYWOOD MEDIA CORP. AND SUBSIDIARIES  
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS  
(unaudited)  
   
   
    NINE MONTHS ENDED SEPTEMBER 30,     THREE MONTHS ENDED SEPTEMBER 30,  
    2013     2012     2013     2012  
                         
                                 
NET REVENUES   $ 323,445     $ 429,082     $ 139,984     $ 96,035  
                                 
OPERATING COSTS AND EXPENSES                                
  Editorial, production, development and technology     181,734       391,503       68,412       108,727  
  Selling, general and administrative     2,579,142       1,839,990       882,951       639,012  
  Payroll and benefits     1,338,777       1,619,487       439,990       368,904  
  Depreciation and amortization     58,899       113,032       16,811       37,868  
                                   
    Total operating costs and expenses     4,158,552       3,964,012       1,408,164       1,154,511  
                                   
    Loss from operations     (3,835,107 )     (3,534,930 )     (1,268,180 )     (1,058,476 )
                                 
                                 
EARNINGS (LOSSES) OF UNCONSOLIDATED INVESTEES                                
  Equity in earnings (losses) of unconsolidated investees     108       (141,851 )     400       (159,665 )
  Impairment loss     -       (3,600,000 )     -       (3,600,000 )
  Total equity in earnings (losses) of unconsolidated investees     108       (3,741,851 )     400       (3,759,665 )
                                 
OTHER INCOME                                
  Interest, net     1,175,044       777,411       201,197       264,400  
  Accretion of discount, net of allowance for uncollectability     1,468,757       -       218,384       -  
  Other, net     9,297,426       1,108,312       9,245,302       1,109,986  
    Total other income     11,941,227       1,885,723       9,664,883       1,374,386  
                                 
    Income (loss) from continuing operations before income taxes     8,106,228       (5,391,058 )     8,397,103       (3,443,755 )
    Income tax (expense) benefit     (226,848 )     1,498,482       (186,011 )     1,127,612  
      Income (loss) from continuing operations     7,879,380       (3,892,576 )     8,211,092       (2,316,143 )
                                     
    Gain on sale of discontinued operations, net of income taxes     -       2,444,891       -       1,839,788  
    Income from discontinued operations     -       22,584       -       -  
                                     
    Income from discontinued operations     -       2,467,475       -       1,839,788  
                                     
    Net income (loss)   $ 7,879,380     $ (1,425,101 )   $ 8,211,092     $ (476,355 )
                                 
                                 
Basic and diluted income (loss) per common share                                
  Continuing operations   $ 0.35     $ (0.17 )   $ 0.36     $ (0.10 )
  Discontinued operations     -       0.11       -       0.08  
  Total basic and diluted net income (loss) per share   $ 0.35     $ (0.06 )   $ 0.36     $ (0.02 )
                                   
Weighted average common and common equivalent shares outstanding - basic and diluted    
22,688,135
     
23,179,066
     
22,640,966
     
23,179,066