- First Quarter Revenue Grew 40% to $11.8 Million; Net Income of $2 Million or $0.15 Per Share
LOS ANGELES, CA and NEWARK, NJ / March 14, 2022 / IDW Media Holdings, Inc., (“IDW”) (NYSE American:IDW), an integrated media company, today reported results for its first fiscal quarter, the three months ended January 31, 2022.
First Quarter Fiscal 2022 (1Q22) Developments
- Consolidated revenue increased 40% to $11.8 million from $8.4 million in 1Q21, reflecting increased revenue at both IDW Publishing (IDWP) and at IDW Entertainment (IDWE). Consolidated revenue increased 66% sequentially from $7.1 million in 4Q21.
- IDW Publishing (IDWP) revenue increased 34% to $7.5 million from $5.6 million in 1Q21 and by 9% sequentially from $6.9 million in 4Q21.
- IDW Entertainment (IDWE) revenue increased 54% to $4.3 million from $2.8 million in 1Q21, primarily related to the recognition of revenue for Locke & Key season 2 during 1Q22.
- Consolidated income from operations was $2.0 million compared to consolidated loss from operations of $5.1 million in 1Q21.
- Net income was $2.0 million, or $0.15 per share, compared to a net loss of $6.3 million, or ($0.62) per share, in 1Q21.
Comments from Ezra Rosensaft, Chief Executive Officer
“We’re pleased to have delivered strong first quarter results. Both the publishing and entertainment segments contributed to the significant revenue growth and profitability. Our revitalized strategy and business model showed demonstrated success, generating significantly higher margins and profitability on incremental revenue.
“IDW is a very different company than it was just a short time ago. The executive management team has been strengthened and the balance sheet has been transformed. We have embarked on a focused strategy to accelerate the quantity of original titles to grow the value of our library and feed the entertainment division with amazing content. Our library has over 100 original titles and we have more than 40 original titles at various stages in the development pipeline.
“Importantly, as we invest in building the library, we are maintaining our focus on profitability; IDW Publishing generated operating income from of $0.5 million in the first quarter 2022, compared to an operating loss of $0.4 million in the same quarter last year. The quarter also represented the earnings power in the model as we delivered the second season of Locke and Key which added $4.2 million in high margin revenue in the quarter. IDW Entertainment revenue will fluctuate with the delivery of product as we scale the enhanced business model, but over time we expect our entertainment division to deliver a more consistent cadence of high margin revenues as we sign on more deals related to our original titles. The backlog of publishing and entertainment opportunities is robust, and we look forward to continuing to drive our improved business model to achieve sustained growth and value.”
Consolidated P&L Highlights*
| 1Q22 | 4Q21 | 1Q21 | ||||||||||
|
Revenue
|
$ | 11.8 | $ | 7.1 | $ | 8.4 | ||||||
|
Direct cost of revenue
|
$ | 4.8 | $ | 4.0 | $ | 9.2 | ||||||
|
SG&A, including non-cash compensation
|
$ | 5.0 | $ | 4.9 | $ | 4.2 | ||||||
|
Non-cash compensation included in SG&A
|
$ | 0.1 | $ | 0.1 | $ | 0.1 | ||||||
|
Depreciation & amortization
|
$ | 0.1 | $ | 0.1 | $ | 0.1 | ||||||
|
Income (loss) from operations
|
$ | 2.0 | $ | (1.9 | ) | $ | (5.1 | ) | ||||
|
Net income (loss) from continuing operations
|
$ | 2.0 | $ | (0.7 | ) | $ | (5.1 | ) | ||||
|
Loss from discontinued operations, net
|
$ | – | $ | – | $ | (1.1 | ) | |||||
|
Net income (loss)
|
$ | 2.0 | $ | (0.7 | ) | $ | (6.3 | ) | ||||
|
Gain (loss) per share from- continuing operations
|
$ | 0.15 | $ | (0.06 | ) | $ | (0.51 | ) | ||||
|
Loss per share – discontinued operations
|
$ | – | $ | – | $ | (0.11 | ) | |||||
|
Net income (loss) per share
|
$ | 0.15 | $ | (0.06 | ) | $ | (0.62 | ) | ||||
Segment P&L Highlights*
|
|
1Q22 | 4Q21 | 1Q21 | |||||||||
|
Revenue
|
||||||||||||
|
IDW Publishing
|
$ | 7.5 | $ | 6.9 | $ | 5.6 | ||||||
|
IDW Entertainment
|
$ | 4.3 | $ | 0.2 | $ | 2.8 | ||||||
|
|
||||||||||||
|
Income (loss) from operations
|
||||||||||||
|
IDW Publishing
|
$ | 0.5 | $ | – | $ | (0.4 | ) | |||||
|
IDW Entertainment
|
$ | 2.0 | $ | (1.5 | ) | $ | (4.6 | ) | ||||
|
Corporate
|
$ | (0.5 | ) | $ | (0.4 | ) | $ | (0.2 | ) | |||
Financial Take-Aways
(1Q22 compared to 1Q21)
- Revenue:
- IDWP: In 1Q22, revenue growth was primarily due to increased games revenue of $2.1 million, slightly offset by lower book and digital sales. The Company has significantly increased its investment in original titles and expects increased revenue from new original titles throughout 2022 and beyond.
- IDWE: In 1Q22, IDWE revenue increased $1.5 million due to full delivery from Locke & Key season two which contributed $4.2 million, and a Canadian license for V Wars of $0.1 million. In the first quarter of 2021, revenue included delivered episodes from Wynonna Earp of $2.8 million.
- Income (loss) from Operations:
- IDWP: In 1Q22, income from operations was $0.5 million, an increase of $0.9 million, compared to a loss from operations of $0.4 million in 1Q21. The increase was primarily related to higher sales and gross margins related to sales of the Batman Adventure game, slightly offset by higher printing and creative costs. SG&A as a percentage of IDWP’s revenue decreased to 42.9% from 49.6%.
- IDWE: In 1Q22, income from operations was $2.0 million, an increase of $6.6 million, compared to a loss from operations of $4.6 million in 1Q21. This growth was due to strong revenue growth in 1Q22 coupled with the company incurring $2.1 million in impairment charges in the first quarter of last year.
- Balance Sheet Highlights: At January 31, 2022, IDW’s cash balance was $17.0 million. Working capital (current assets less current liabilities) totaled $21.6 million.
Earnings Conference Call
IDW’s management will host an earnings conference call beginning at 5:00 PM Eastern time today to present results, outlook, and strategy followed by Q&A with investors. To listen to the call and participate in the Q&A, dial (877) 705-6003 (domestic) or (201) 493-6725 (international) and request the ‘IDW Media call.’
A replay of the conference call can be accessed approximately three hours after the call concludes through Monday, March 21, 2022, by dialing (844) 512-2921 (domestic) or (412) 317-6671 (international) and providing the replay pin: 13727282. A recording of the conference call will also be available via streaming audio through the IDW investor relations website.
About IDW Media Holdings:
IDW (NYSE American:IDW) is an integrated media company providing compelling stories and characters for global audiences. Our IDW Publishing and IDW Entertainment businesses acquire IP for holistic franchise development across comics and graphic novels, television and other entertainment platforms and leverage established stories from our creative partners.
Forward-Looking Statements:
In this press release, all statements 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 within the meaning of the Private Securities Litigation Reform Act of 1995. 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, including, but not limited to, those described in our Annual Report on Form 10-K (under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”), which may be revised or supplemented in subsequent reports on SEC Forms 10-K, 10-Q and 8-K. We are under no obligation, and expressly disclaim any obligation, to update the forward-looking statements in this press release, whether as a result of new information, future events or otherwise.
Contact:
John Nesbett/Jennifer Belodeau
IMS Investor Relations
idw@imsinvestorrelations.com
IDW MEDIA HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(in thousands, except per share data)
|
January 31,
2022 (unaudited)
|
October 31, 2021 |
||||||
|
Assets
|
||||||||
|
Current assets:
|
||||||||
|
Cash and cash equivalents
|
$ | 16,997 | $ | 17,532 | ||||
|
Trade accounts receivable, net
|
3,989 | 5,431 | ||||||
|
Inventory
|
2,922 | 3,090 | ||||||
|
Prepaid expenses
|
1,777 | 2,270 | ||||||
|
Total current assets
|
25,685 | 28,323 | ||||||
|
Non-current assets
|
||||||||
|
Property and equipment, net
|
356 | 347 | ||||||
|
Right-of-use assets, net
|
181 | 302 | ||||||
|
Intangible assets, net
|
791 | 679 | ||||||
|
Goodwill
|
199 | 199 | ||||||
|
Television costs, net
|
1,589 | 1,487 | ||||||
|
Other assets
|
62 | 61 | ||||||
|
Total assets
|
$ | 28,863 | $ | 31,398 | ||||
|
Liabilities and Stockholders’ Equity
|
||||||||
|
Current liabilities:
|
||||||||
|
Trade accounts payable
|
$ | 1,346 | $ | 1,141 | ||||
|
Accrued expenses
|
2,318 | 3,197 | ||||||
|
Production costs payable
|
150 | 2,010 | ||||||
|
Deferred revenue
|
65 | 2,045 | ||||||
|
Operating lease obligations – current portion
|
198 | 348 | ||||||
|
Total current liabilities
|
4,077 | 8,741 | ||||||
|
Non-current liabilities
|
||||||||
|
Operating lease obligations – long term portion
|
16 | 20 | ||||||
|
Total liabilities
|
$ | 4,093 | $ | 8,761 | ||||
|
Stockholders’ equity (see note 3):
|
||||||||
|
Preferred stock, $.01 par value; authorized shares – 500; no shares issued at January 31, 2022 and October 31, 2021
|
– | – | ||||||
|
Class B common stock, $0.01 par value; authorized shares – 20,000; 12,950 and 12,938 shares issued and 12,431 and 12,419 shares outstanding at January 31, 2022 and October 31, 2021, respectively
|
123 | 123 | ||||||
|
Class C common stock, $0.01 par value; authorized shares – 2,500; 545 shares issued and outstanding at January 31, 2022 and October 31, 2021
|
5 | 5 | ||||||
|
Additional paid-in capital
|
103,963 | 103,819 | ||||||
|
Accumulated deficit
|
(78,125 | ) | (80,114 | ) | ||||
|
Treasury stock, at cost, consisting of 519 shares of Class B common stock at January 31, 2022 and October 31, 2021
|
(1,196 | ) | (1,196 | ) | ||||
|
Total stockholders’ equity
|
24,770 | 22,637 | ||||||
|
Total liabilities and stockholders’ equity
|
$ | 28,863 | $ | 31,398 | ||||
IDW MEDIA HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| Three Months Ended | ||||||||
|
(in thousands, except per share data)
|
January 31,
2022
|
January 31,
2021
|
||||||
|
Revenues
|
$ | 11,849 | $ | 8,413 | ||||
|
|
||||||||
|
Costs and expenses:
|
||||||||
|
Direct cost of revenues
|
4,790 | 9,233 | ||||||
|
Selling, general and administrative
|
4,992 | 4,242 | ||||||
|
Depreciation and amortization
|
83 | 59 | ||||||
|
Total costs and expenses
|
9,865 | 13,534 | ||||||
|
Income (loss) from operations
|
1,984 | (5,121 | ||||||
|
|
||||||||
|
Interest expense, net
|
(10 | ) | (13 | |||||
|
Other income, net
|
15 | – | ||||||
|
Net income (loss) from continuing operations
|
1,989 | (5,134 | ||||||
|
|
||||||||
|
Net loss from discontinued operations
|
– | (1,121 | ||||||
|
Net income (loss)
|
$ | 1,989 | $ | (6,255 | ||||
|
Basic and diluted income (loss) per share (note 2):
|
||||||||
|
Continuing operations
|
$ | 0.15 | $ | (0.51 | ||||
|
Discontinued operations, net
|
(0.11 | |||||||
|
Basic and diluted net income (loss) per share
|
$ | 0.15 | $ | (0.62 | ||||
|
|
||||||||
|
Weighted-average number of shares used in the calculation of basic and diluted income (loss) per share:
|
12,858 | 9,992 | ||||||
IDW MEDIA HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
|
|
Three Months Ended | |||||||
|
(in thousands)
|
January 31, 2022 | January 31, 2021 | ||||||
|
Operating activities:
|
||||||||
|
Net income (loss)
|
$ | 1,989 | $ | (6,255 | ) | |||
|
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:
|
||||||||
|
Depreciation and amortization
|
83 | 218 | ||||||
|
Amortization of finance leases
|
– | 92 | ||||||
|
Bad debt expense
|
– | (109 | ) | |||||
|
Stock based compensation
|
144 | 64 | ||||||
|
Amortization of right-of-use asset
|
121 | 358 | ||||||
|
Gain on extinguishment of PPP Loans
|
– | (68 | ) | |||||
|
Changes in operating assets and liabilities:
|
||||||||
|
Trade accounts receivable
|
1,442 | 3,786 | ||||||
|
Inventory
|
168 | 159 | ||||||
|
Prepaid expenses and other assets
|
492 | (229 | ) | |||||
|
Television costs
|
(102 | ) | 1,839 | |||||
|
Operating lease liability
|
(154 | ) | (367 | ) | ||||
|
Trade accounts payable, accrued expenses, production costs payable and other current liabilities
|
(2,534 | ) | 2,091 | |||||
|
Deferred revenue
|
(1,980 | ) | (693 | ) | ||||
|
Net cash (used in) provided by operating activities
|
(331 | ) | 886 | |||||
|
Investing activities:
|
||||||||
|
Capital expenditures
|
(204 | ) | (55 | ) | ||||
|
Net cash used in investing activities
|
(204 | ) | (55 | ) | ||||
|
Financing activities:
|
||||||||
|
Proceeds from issuance of common stock
|
– | 25 | ||||||
|
Repayments of finance lease obligations
|
– | (92 | ) | |||||
|
Proceeds from CTM bank loans
|
– | 17 | ||||||
|
Repayments of bank loans
|
– | (3,076 | ) | |||||
|
Net cash used in financing activities
|
– | (3,126 | ) | |||||
|
Effect of exchange rate changes on cash and cash equivalents
|
– | (12 | ) | |||||
|
Net decrease in cash and cash equivalents
|
(535 | ) | (2,307 | ) | ||||
|
Cash and cash equivalents at beginning of period
|
17,532 | 12,162 | ||||||
|
Cash and cash equivalents at end of period
|
$ | 16,997 | $ | 9,855 | ||||
|
|
||||||||
|
Supplemental schedule of investing and financing activities
|
||||||||
|
Cash paid for interest
|
$ | – | $ | 11 | ||||
SOURCE: IDW Media Holdings Inc.
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