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8-K - CURRENT REPORT - HOLLYWOOD MEDIA CORPv340002_8k.htm

 

 

HOLLYWOOD MEDIA CORP. REPORTS 2012 FOURTH QUARTER AND YEAR END RESULTS

 

BOCA RATON, Fla., April 1, 2013 – Hollywood Media Corp. (Nasdaq: HOLL) today reported financial results for the fourth quarter and year ended December 31, 2012.

 

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 2012 fourth quarter were unchanged at $0.2 million compared to $0.2 million in the prior-year period. For the full year 2012, net revenues were $0.6 million versus $1.1 million in 2011.

 

Income from continuing operations for the 2012 fourth quarter, was $4.8 million, or $0.21 per share, compared to a loss from continuing operations for the 2011 fourth quarter of $0.1 million, or $0.01 per share. The income tax benefit of $3.8 million was fully offset by the income tax expense recognized in the Gain on sale of discontinued operations, net of income taxes. Income from continuing operations for the full year 2012 was $0.9 million, or $0.04 per share, which included a non-cash goodwill impairment charge of $3.6 million in the third quarter of 2012 related to the Company’s Ad Sales Division, $0.4 million of non-cash amortization expense of deferred compensation costs, and $0.1 million depreciation and amortization. This compared to a loss from continuing operations for the full year 2011 of $7.1 million, or $0.29 per share, which included a non-cash goodwill impairment charge of $4.8 million in the third quarter of 2011 related to the Company’s Ad Sales Division. The income tax benefit of $5.3 million was fully offset by the income tax expense recognized in the Gain on sale of discontinued operations, net of income taxes.

 

Net income, which includes discontinued operations, was $11.8 million, or $0.51 per share, in the 2012 fourth quarter, compared to net income of $0.04 million, or $0.00 per share, in the prior-year period. For the full year 2012, net income, which includes discontinued operations, was $10.4 million, or $0.45 per share, compared to a net loss in 2011 of $6.9 million, or $0.28 per share.

 

At December 31, 2012, the Company had cash and cash equivalents of $11.4 million and no debt as compared to cash and cash equivalents of $3.7 million and no debt at December 31, 2011. 

 

The increased cash position reflects a $7 million earnout payment in cash received in the 2012 fourth quarter from Key Brand Entertainment Inc. (“Key Brand”) pursuant to the amended purchase agreement related to the completed sale of Hollywood Media’s Broadway Ticketing Business (“Theatre Direct”) to Key Brand. In addition, during the 2012 fourth quarter Key Brand notified Hollywood Media that it achieved the revenue target for the second $7 million earnout under the purchase agreement in Key Brand's fiscal year ended June 30, 2012. Accordingly, this $7 million amount was added to the principal amount of the $8.5 million loan due Hollywood Media by Key Brand. Pursuant to this loan, interest will be payable to Hollywood Media at an increased rate of 13% per annum and principal on such second $7 million earnout amount will be amortized in equal quarterly installments over the period commencing October 5, 2012 and ending on June 30, 2015 which is the new shortened maturity date of the loan. As a result of this second $7 million earnout being added to the loan and a subsequent payment received in the amount of $1.0 million (which included a principal payment of $0.5 million), the principal amount of the loan due Hollywood Media by Key Brand was $15.0 million as of December 31, 2012. A $1.1 million payment was received during the first quarter of 2013 in accordance with the terms of the loan.

 

The Company purchased 16,600 shares of Hollywood Media’s common stock for $0.1 million during the fourth quarter of 2012 and 510,700 shares of Hollywood Media’s common stock for $0.7 million during the first quarter of 2013.

 

About Hollywood Media Corp.

 

Hollywood Media Corp. is comprised primarily of an Ad Sales division, an Intellectual Property division, and various financial assets.

 

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

 

Contact:

Investor Relations Department

Hollywood Media Corp.

L. Melheim

ir@hollywoodmedia.com

561-998-8000

 

 
 

 

HOLLYWOOD MEDIA CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

 

   December 31,   December 31, 
   2012   2011 
         
ASSETS        
         
CURRENT ASSETS:          
Cash and cash equivalents  $11,378,519   $3,683,063 
Prepaid expenses   329,915    316,430 
Other receivables   75,105    - 
Note receivable, current   1,375,545    - 
Related party receivable   37,287    521,497 
Current portion of deferred compensation   430,000    430,000 
Current assets of discontinued operations   -    566,691 
Total current assets   13,626,371    5,517,681 
           
PROPERTY AND EQUIPMENT, net   240,645    283,574 
INVESTMENTS IN AND ADVANCES TO UNCONSOLIDATED INVESTEES   138,384    1,573,325 
INTANGIBLE ASSETS, net   8,683    17,116 
GOODWILL   6,200,000    9,800,000 
OTHER ASSETS   727,982    58,628 
NOTE RECEIVABLE, less current portion   4,455,106    - 
WARRANT   700,000    - 
DEFERRED COMPENSATION, less current portion   518,651    948,651 
LONG TERM ASSETS OF DISCONTINUED OPERATIONS   -    23,814 
TOTAL ASSETS  $26,615,822   $18,222,789 
           
LIABILITIES AND SHAREHOLDERS' EQUITY          
           
CURRENT LIABILITIES:          
Accounts payable  $414,123   $387,070 
Accrued expenses and other   1,036,788    646,821 
Deferred revenue   111,669    264,228 
Current portion of capital lease obligations   16,255    21,829 
Current liabilities of discontinued operations   -    1,130,268 
Total current liabilities   1,578,835    2,450,216 
           
CAPITAL LEASE OBLIGATIONS, less current portion   2,152    16,203 
OTHER DEFERRED LIABILITY   355    42,514 
DEFERRED REVENUE   14,000    46,200 
DERIVATIVE LIABILITIES   60,000    1,090,000 
LONG TERM LIABILITIES OF DISCONTINUED OPERATIONS   -    2,158 
  TOTAL LIABILITIES   1,655,342    3,647,291 
           
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; 23,162,466 and 23,179,066          
    shares issued and outstanding at December 31, 2012 and December 31, 2011, respectively   231,625    231,791 
Additional paid-in capital   293,591,903    293,616,319 
Accumulated deficit   (268,863,048)   (279,272,612)
Total shareholders' equity   24,960,480    14,575,498 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY  $26,615,822   $18,222,789 

 

 
 

 

HOLLYWOOD MEDIA CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

 

   TWELVE MONTHS ENDED
December 31,
   THREE MONTHS ENDED
December 31,
 
   2012   2011   2012   2011 
         
                 
NET REVENUES  $616,338   $1,067,708   $187,256   $226,162 
                     
OPERATING COSTS AND EXPENSES                    
Editorial, production, development and technology   639,865    651,614    248,362    89,572 
Selling, general and administrative   2,854,440    2,782,020    1,014,450    511,221 
Payroll and benefits   2,688,017    3,242,209    1,068,530    398,653 
Depreciation and amortization   136,443    203,231    23,411    40,578 
                     
Total operating costs and expenses   6,318,765    6,879,074    2,354,753    1,040,024 
                     
Loss from operations   (5,702,427)   (5,811,366)   (2,167,497)   (813,862)
                     
                     
LOSSES OF UNCONSOLIDATED INVESTEES                    
Equity in earnings of unconsolidated investees   (142,003)   593,767    (152)   184,176 
Impairment loss   (3,600,000)   (4,795,783)   -    - 
Total losses in earnings of unconsolidated investees   (3,742,003)   (4,202,016)   (152)   184,176 
                     
OTHER INCOME (EXPENSE):                    
Interest, net   1,249,868    1,049,843    472,457    260,183 
Accretion of discount, net of allowance for uncollectability   1,717,900    -    1,717,900    - 
Other, net   2,068,665    2,025,160    960,353    394,208 
                     
Loss from continuing operations before income taxes   (4,407,997)   (6,938,379)   983,061    24,705 
Income tax benefit (expense), net of refund   5,326,300    (130,571)   3,827,818    (130,571)
Income (loss) from continuing operations   918,303    (7,068,950)   4,810,879    (105,866)
                     
Gain on sale of discontinued operations, net of income taxes   9,468,677    524,156    7,023,786    269,314 
Income (loss) of discontinued operations   22,584    (232,444)   -    (69,573)
                     
Income from discontinued operations   9,491,261    291,712    7,023,786    199,741 
                     
Net income (loss)   10,409,564    (6,777,238)   11,834,665    93,875 
                     
NET INCOME (LOSS) ATTRIBUTABLE TO NON-CONTROLLING INTEREST  $-    (85,093)  $-    (55,066)
                     
Net income (loss) attributable to Hollywood Media Corp.  $10,409,564   $(6,862,331)  $11,834,665   $38,809 
                     
Basic and diluted income (loss) per common share                    
Continuing operations  $0.04   $(0.29)  $0.21   $(0.01)
Discontinued operations   0.41    0.01    0.30    0.01 
Total basic and diluted net income (loss) per share  $0.45   $(0.28)  $0.51   $- 
                     
Weighted average common and common equivalent shares                    
outstanding - basic and diluted   23,178,814    24,384,547    23,178,064    23,179,066