STAMFORD, Conn. and SAN DIEGO, Jan. 29, 2018 (GLOBE NEWSWIRE) -- IDW Media Holdings, Inc. “IDWM” (OTCQX:IDWM) (the “Company”), an integrated media company, announced today its results for the fourth quarter and fiscal year ended October 31, 2017.
FY-17 was a transformational year for the Company in executing its strategy of monetizing IDW Publishing’s extensive library of creative content through the production of television programming. The Company owns or co-owns the rights to over 150 brands and has been investing in IDW Entertainment to produce television programs based primarily on the Company’s proprietary content, as well as third party content. With the success of the Company’s initial programs, which have received critical and consumer acclaim, and the media industry recognition of the broad audience and attractive target demographics of the Company’s proprietary library, the momentum for IDW Entertainment has increased significantly. The Company expects to produce multiple additional programs to significantly accelerate the growth of IDW Entertainment in FY-18 and beyond. At the same time, the Company has invested in strengthening its IDW Publishing division, including transitioning its distribution to a new partnership with Random House. While this transition, coupled with industry dynamics, led to a decline in IDW Publishing revenue in FY-17, the IDW Publishing division is well-positioned to return to growth in FY-18, while continuing to feed more proprietary content to fuel the accelerating growth of IDW Entertainment.
Fiscal Fourth Quarter and Fiscal Year End 2017 Financial Highlights:
Significant Highlights and Milestones:
Management: Commenting on the results, Ted Adams, CEO stated: “2017 was truly a transformational year for IDWM as we position the company for major growth at IDW Entertainment, while developing products that can cut across our various platforms. We have successfully proven out our model of creating high-quality television programming based on IDW Publishing’s proprietary content, as well as third party content. We have been investing in this program over the past few years, and we are now well-positioned to capitalize on that investment as the media industry is recognizing the quality of our content and our capabilities to produce outstanding programming. We believe this positions us well for accelerating growth in IDW Entertainment in the years ahead.
IDW Publishing is poised both to return to growth in FY-18 and to feed more high quality, proprietary content for IDW Entertainment. Our new publishing distribution agreement with Random House, brings a plethora of opportunity as well as operational efficiencies, which should be realized in FY-18. While IDW Publishing experienced a decline in revenue in FY-17, primarily due to market weakness throughout the industry, our publishing business is much stronger now with both the Random House partnership and a more robust line-up of upcoming titles, including a new licensing agreement with Disney on a new line of Star Wars comic books developed for young readers. This was validated with the release of our first title, produced in collaboration with Lucasfilm, Star Wars Adventures Volume I: Heroes of the Galaxy, and is expected to support new growth of publishing revenue throughout 2018. We also welcome the addition of the iconic Sonic the Hedgehog to our publishing portfolio and look forward to acquiring other established properties and creating new intellectual properties, all of which should contribute to growth in FY-18 and beyond.”
Forward Looking Statements:
All statements above that are not purely about historical facts, including, but not limited to, those in which we use the words “believe,” “anticipate,” “expect,” “plan,” “intend,” “estimate,” “target” and similar expressions, are forward-looking statements. While these forward-looking statements represent our current judgment of what may happen in the future, actual results may differ materially from the results expressed or implied by these statements due to numerous important factors. Our public disclosures provide information on certain of such statements and risks, and should be consulted along with this release. To the extent permitted under applicable law, we assume no obligation to update any forward-looking statements.
About IDW Media Holdings
IDW Media Holdings, Inc. (OTCQX:IDWM) is an integrated media company, with three divisions, the award-winning IDW Publishing, which includes IDW Games and Top Shelf Productions, IDW Entertainment, and CTM Media Group.
The financial statements below have been derived from the Company’s financial statements at the dates shown, but do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. For further information, please refer to the Company’s annual report for the fiscal years ended October 31, 2017 and 2016 which we anticipate filing with the OTC Markets Group within a week of this release.
IDW MEDIA HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
|(in thousands)||October 31,|
|Cash and cash equivalents||$||9,154||$||6,203|
|Trade accounts receivable, net||14,630||11,592|
|Inventory – print and production costs||29,354||13,652|
|Note receivable – current portion||-||310|
|Total current assets||55,430||33,495|
|Property and equipment, net||3,479||3,394|
|Trade accounts receivable – non-current portion||3,078||2,478|
|Intangible Assets, net||1,164||1,539|
|Total non-current assets||17,321||17,049|
|Liabilities and stockholders’ equity|
|Trade accounts payable||2,809||$||2,412|
|Bank loans payable – current portion||5,409||426|
|Income taxes payable||249||1,037|
|Capital lease obligations – current portion||397||365|
|Other current liabilities||162||421|
|Total current liabilities||23,583||15,200|
|Accrued liabilities – non-current||1,602||470|
|Capital lease obligations – long term portion||923||807|
|Bank loans payable – long term portion||649||749|
|Total non-current liabilities||3,174||2,026|
|Commitments and contingencies||-||-|
|Preferred stock, $.01 par value; authorized shares – 500; no shares issued at October 31,|
2017 and October 31, 2016
|Class B common stock, $0.01 par value; authorized shares – 12,000; 6,085 shares and|
5,553 shares issued and outstanding at October 31, 2017 and October 31, 2016,
|Class C common stock, $0.01 par value; authorized shares – 2,500; 545 shares issued and outstanding at October 31,|
2017 and October 31, 2016
|Additional paid-in capital||66,694||53,208|
|Accumulated other comprehensive loss||(183||)||(250||)|
|Treasury stock, at cost, consisting of 519 shares of Class B common stock at October 31, 2017 and October 31, 2016||(1,196||)||(1,196||)|
|Total stockholders' equity||49,473||36,712|
|Total liabilities and stockholders’ equity||$||76,230||$||53,938|
IDW MEDIA HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
|Three Months Ended|
October 31, (unaudited)
|Fiscal Years Ended|
|(in thousands, except per share data)||2017||2016||2017||2016|
|Costs and expenses:|
|Direct cost of revenues||11,835||13,691||33,250||34,444|
|Selling, general and administrative (i)||6,520||6,116||26,501||22,727|
|Depreciation and amortization||426||401||1,585||1,538|
|Bad debt expense||-||196||22||318|
|Total costs and expenses||18,781||20,404||61,358||59,027|
|Income (loss) from operations||1,201||3,228||(998||)||6,240|
|Interest expense, net||(52||)||(18||)||(155||)||(75||)|
|Other (expense) income, net||72||(1||)||74||(23||)|
|Income (loss) before income taxes||1,221||3,209||(1,079||)||6,142|
|(Provision for) benefit from income taxes||(477||)||(1,244||)||282||(2,473||)|
|Net income (loss)||$||744||$||1,965||$||(797||)||$||3,669|
|Basic and diluted income (loss) per share (see notes 1 and 3):|
|Net income (loss) per share||$||.12||$||0.35||$||(.14||)||$||0.74|
|Weighted-average number of shares used in the calculation of|
basic and diluted income per share:
|Dividend declared per common share:||$||0.00||$||0.00||$||0.00||$||0.163|
| (i) Stock-based compensation included in selling, general and|
IDW Media Holdings, Inc. EBITDA and Adjusted EBITDA
In addition to disclosing financial results that are determined in accordance with generally accepted accounting principles in the United States of America (GAAP), the Company is also disclosing for the three months and fiscal year ended October 31, 2017 and 2016, the Company’s consolidated [EBITDA and Adjusted EBITDA, which are non-GAAP measures. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP.
The Company’s measure of EBITDA consists of net income before depreciation, amortization, provision for or benefit from income taxes, and net interest expense or interest income. Adjusted EBITDA makes further adjustments to EBITDA to reflect the elimination of certain income statement items including non-cash compensation, and expenses that we consider to be not indicative of the performance of ongoing operations.
These additions and subtractions are non-cash and/or non-routine items in the relevant fiscal 2017 and fiscal 2016 periods.
Management believes that the Company’s EBITDA and Adjusted EBITDA measures provide useful information to both management and investors by excluding certain expenses and non-routine gains and losses that may not be indicative of the Company’s core operating results. Management uses EBITDA and Adjusted EBITDA, among other measures, as a relevant indicator of core operational strengths in its financial and operational decision making. In addition, management uses EBITDA and Adjusted EBITDA to evaluate operating performance in relation to its competitors. Disclosure of these financial measures may be useful to investors in evaluating performance and allows for greater transparency to the underlying supplemental information used by management in its financial and operational decision-making. In addition, management believes such measures are commonly used by readers of financial information in assessing performance, therefore the inclusion of comparative numbers provides consistency in financial reporting at this time.
Management refers to EBITDA and Adjusted EBITDA to facilitate internal and external comparisons to historical operating results, in making operating decisions, for budget and planning purposes, and to form the basis upon which management is compensated for the Company’s business segments.
While depreciation and amortization are considered operating costs under GAAP, these expenses primarily represent the non-cash current period allocation of costs associated with long-lived assets acquired or constructed in prior periods. The Company’s operating results exclusive of depreciation and amortization charges are useful indicators of its current performance.
Interest is excluded from operating income to arrive at EBITDA as this expense reflects the cost of debt financing and its exclusion may provide users of the financial information with a useful indication of the Company’s operations. Income taxes are excluded in arriving at EBITDA as they reflect costs based on taxable income where computations and rates vary by the jurisdictions in which the Company does business and provides a different measure to evaluate operations and may be useful in evaluating operational performance.
Non-cash compensation is also considered an operating expense under GAAP and represents expenses that do not utilize the Company’s cash resources and are useful in evaluating the Company’s current performance.
EBITDA and Adjusted EBITDA should be considered in addition to, not as a substitute for, or superior to, income (loss) from operations, cash flow from operating activities, net income, and other liquidity and financial performance prepared in accordance with GAAP. In addition, the Company’s measurements of EBITDA and Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies.
Following are reconciliations of EBITDA and Adjusted EBITDA to Net Income (Loss), which is the most directly comparable GAAP measure.
Reconciliation of Consolidated Net Income (Loss) to
Consolidated EBITDA and Consolidated Adjusted EBITDA
|Three Months Ended|
|Fiscal Year Ended|
|Net income (loss)||744||1,965||(797||)||3,669|
|Depreciation and amortization||426||401||1,585||1,538|
|Provision for (benefit from) income taxes||477||1,244||(282||)||2,473|
|Interest expense, net||52||18||155||75|
|Adjusted EBITDA|| |