EX-99.1 2 ea171909ex99-1_idwmedia.htm EARNINGS RELEASE, DATED JANUARY 19, 2023, REPORTING THE RESULTS OF OPERATIONS FOR THE FISCAL QUARTER AND FISCAL YEAR ENDED OCTOBER 31, 2022

Exhibit 99.1

 

IDW Announces Results for Fourth Quarter and Full Fiscal Year 2022

 

LOS ANGELES, CA and NEWARK, NJ –January 19, 2023:  IDW Media Holdings, Inc., (“IDW”) (NYSE American: IDW), an integrated media company, today reported results for the three and twelve-months ended October 31, 2022.

 

Fourth Quarter Fiscal 2022 (4Q22) Developments

 

●Consolidated revenue increased 48% to $10.5 million from $7.1 million in 4Q21 primarily reflecting increased revenue at IDW Entertainment (“IDWE”). Revenue increased 36% sequentially from $7.7 million in 3Q22.
   
●IDW Publishing (“IDWP”) revenue decreased to $5.7 million from $6.9 million in 4Q21 primarily due to fewer titles being released during the quarter. Digital sales were flat as compared to 4Q21.
   
●IDWE revenue increased to $4.8 million compared to $0.2 million in 4Q21, driven by the recognition of revenue from Locke & Key season three.
   
●Consolidated income from operations was $0.3 million compared to a consolidated operating loss of $1.9 million in 4Q21.
   
●Net income was $0.4 million, or $0.03 per share, compared to a net loss of $0.7 million, or $0.06 per share, in 4Q21.

 

Full Fiscal Year 2022 Developments

 

●Consolidated revenue increased 11% to $36.1 million in FY 2022 from $32.4 million in FY 2021.
   
●IDWP revenue increased slightly to $25.8 million compared to $25.3 million in FY 2021. The increase was driven primarily by increased non-direct market revenue driven by strong sales of TMNT The Last Ronin and They Called Us Enemy, an increase in games revenue from the direct-to-consumer games campaign for Batman Adventures and an increase in retailer exclusive revenue related to Sonic the Hedgehog and Transformers, offset by a decrease in direct market revenue due to fewer titles being published and a decrease in digital sales as compared to the previous year.
   
●IDWE revenue increased to $10.3 million from $7.1 million in FY 2021. FY 2022 results include revenue from the delivery of seasons two and three of Locke & Key and season one of Surfside Girls.
   
●IDW’s net loss improved to $0.7 million, or $0.06 per share, from a net loss of $5.4 million, or $0.51 per share, in FY 2021.

 

Howard Jonas, Chairman of IDW Media Holdings, commented, “As we move through fiscal 2023, IDW remains focused on leveraging the combined strengths of its Publishing and Entertainment groups to produce inventive content for a variety of media platforms. The Board is pleased with the direction that Allan has brought to the Company since being appointed CEO in the fall, and we remain focused on driving long-term, sustained shareholder value.”

 

Allan Grafman, Chief Executive Officer of IDW Media Holdings, commented, “We’re pleased to have closed out fiscal 2022 with strong fourth quarter performance, as reflected in increased revenue, enhanced operating results and improved profitability year over year. As expected, our delivery of season three of Locke & Key drove significant revenue growth in the quarter. IDW continued to make solid progress throughout fiscal 2022 and we entered fiscal 2023 with a heightened focus on leveraging our creative partnerships to maximize our library of original titles for the continued development of print as well as entertainment projects.

 

 

“As we’ve previously discussed, our entertainment development pipeline is very strong and we’re excited about the strength of our slate of opportunities to bring new content to market. We currently have seven development agreements in place and many more that are in the works, and to provide some context, last year at this time we had no meaningful development deals in place, reflecting our team’s tremendous progress. That said, the development of premier entertainment content from idea to green light to delivery takes time. While we cannot predict the timing, we’re optimistic about our potential entertainment projects and the partners we’re working with, and we’re confident that IDW has some of the most compelling characters and stories available. We look forward to bringing innovative new series, feature films and podcasts to market.”

 

Consolidated P&L Highlights*

 

(*In millions, except loss per share. Quarterly results are unaudited. Numbers may not foot due to rounding)

  4Q22  3Q22   4Q21   FY22   FY21 
Revenue  $10.5   $7.7   $7.1   $36.1   $32.4 
Direct cost of revenue  $4.4   $3.7   $4.0   $16.5   $21.8 
SG&A including non-cash compensation  $5.7   $4.7   $4.9   $19.9   $19.1 
Non-cash compensation included in SG&A  $0.2   $0.2   $0.1   $0.7   $0.3 
Depreciation & amortization  $0.1   $0.1   $0.1   $0.3   $0.2 
Income (loss) from operations  $0.3   $(0.8)  $(1.9)  $(0.7)  $(8.7)
Net income (loss)  $0.4   $(0.8)  $(0.7)  $(0.7)  $(5.4)
Income (loss) per share – continuing operations  $0.03   $(0.06)  $(0.06)  $(0.06)  $(0.59)
Net income (loss) per share  $0.03   $(0.06)  $(0.06)  $(0.06)  $(0.51)

 

Segment P&L Highlights*

 

   4Q22   3Q22   4Q21   FY22   FY21 
Revenue                    
IDW Publishing  $5.7   $6.6   $6.9   $25.8   $25.3 
IDW Entertainment  $4.8   $1.2   $0.2   $10.3   $7.1 
                          
(Loss) income from operations                         
IDW Publishing   $(1.6)  $(0.6)  $-   $(1.9)  $(0.8)
IDW Entertainment  $2.8   $-   $(1.5)  $3.1   $(6.7)
Corporate  $(0.9)  $(0.2)  $(0.4)  $(1.9)  $(1.2)

 

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Financial Take-Aways

 

(4Q22 compared to 4Q21; Full year fiscal 2022 results are compared to full year fiscal 2021)

 

●Revenue:

 

oIDWP: In 4Q22, revenue decreased primarily due to a decrease in the number of titles released and related to the strong comic release of TMNT The Last Ronin #4 in the prior year period. In FY 2022, revenue increased slightly primarily due to increased non-direct market revenue, games revenue, and retailer exclusive revenue, offset by a decrease in direct market revenue due to fewer titles being published and a decrease in digital sales.

 

oIDWE: In 4Q22, IDWE reported revenue of $4.8 million mainly related to the recognition of revenue for the delivery of season 3 of Locke & Key. In FY 2022, IDWE reported revenue of $10.3 million driven by the delivery of seasons two and three of Locke & Key and season one of Surfside Girls.

 

●(Loss) Income from Operations:

 

oIDWP: In 4Q22, loss from operations was $1.6 million, compared to income from operations of $0.04 million 4Q21. SG&A as a percentage of revenue was 65.2% compared to 45.3% in 4Q21. In FY 2022, loss from operations was $1.9 million compared to a loss from operations of $0.8 million in FY 2021. SG&A as a percentage of revenue was 52.1% in FY 2022 compared to 48.1% in FY 2021.

  

oIDWE: In 4Q22, income from operations was $2.8 million, compared to a loss from operations of $1.5 million in 4Q21. SG&A decreased to $1.0 million compared to $1.4 million in 4Q21. In FY 2022, income from operations was $3.1 million compared to a loss of $6.7 million in FY 2021. SG&A as a percentage of revenue was 44.5% in FY 2022 compared to 79.7% in FY 2021.

  

●Balance Sheet Highlights: At October 31, 2022, IDW’s cash balance was $10.0 million. Working capital (current assets less current liabilities) totaled $18.5 million.

 

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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) 704-4453 (domestic) or (201) 389-0920 (international) and request the ‘IDW Media call’ or use this link for instant telephone access to the call via your web browser.

 

A replay of the conference call can be accessed approximately three hours after the call concludes through Wednesday, January 26, 2023, by dialing (844) 512-2921 (domestic) or (412) 317-6671 (international) and providing the replay pin: 13735183. 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 for the fiscal year ended October 30, 2021 (under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”), and subsequent quarterly reports on Form 10-Q. 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

 

 

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IDW MEDIA HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS

 

(in thousands, except per share data)  October 31,
2022		   October 31,
2021		 
Assets        
Current assets:        
Cash and cash equivalents  $10,014   $17,532 
Trade accounts receivable, net   6,448    5,431 
Inventory   4,285    3,090 
Prepaid expenses and other current assets   2,714    2,270 
Total current assets   23,461    28,323 
Non-current assets          
Property and equipment, net   725    347 
Right-of-use assets, net   1,157    302 
Intangible assets, net   859    679 
Goodwill   199    199 
Television costs, net   1,486    1,487 
Other assets   54    61 
Total assets  $27,941   $31,398 
Liabilities and Stockholders’ Equity          
Current liabilities:          
Trade accounts payable  $1,321   $1,141 
Accrued expenses   3,353    3,786 
Production costs payable   33    2,010 
Deferred revenue   -    2,045 
Operating lease obligations – current portion   278    348 
Total current liabilities   4,985    9,330 
Non-current liabilities          
Operating lease obligations – long term portion   911    20 
Total liabilities  $5,896   $9,350 
Stockholders’ equity (see Note 3):          
Preferred stock, $.01 par value; authorized shares – 500; no shares issued at October 31, 2022 and October 31, 2021   -    - 
Class B common stock, $0.01 par value; authorized shares – 20,000; 14,053 and 12,938 shares issued and 13,534 and 12,419 shares outstanding at October 31, 2022 and October 31, 2021, respectively   134    123 
Class C common stock, $0.01 par value; authorized shares – 2,500; 545 shares issued and outstanding at October 31, 2022 and October 31, 2021   5    5 
Additional paid-in capital   104,553    103,819 
Accumulated deficit   (81,451)   (80,703)
Treasury stock, at cost, consisting of 519 shares of Class B common stock at October 31, 2022 and October 31, 2021   (1,196)   (1,196)
Total stockholders’ equity   22,045    22,048 
Total liabilities and stockholders’ equity  $27,941   $31,398 

 

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IDW MEDIA HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS

 
   Fiscal Years Ended 
(in thousands, except per share data) 

October 31,

2022

  

October 31,

2021

 
         
Revenues  $36,094   $32,425 
           
Costs and expenses:          
Direct cost of revenues   16,504    21,783 
Selling, general and administrative   19,933    19,082 
Depreciation and amortization   342    245 
Total costs and expenses   36,779    41,110 
Loss from operations   (685)   (8,685)
           
Interest (expense) income, net   (10)   118 
Other (expense) income, net   (53)   2,333 
Net loss from continuing operations   (748)   (6,234)
           
Loss from discontinued operations, net   -    (1,281)
Gain on sale of discontinued operations   -    2,123 
Net gain on discontinued operations   -    842 
Net loss  $(748)  $(5,392)
           
Basic and diluted net (loss) income per share (see Note 2):          
Continuing operations  $(0.06)  $(0.59)
Discontinued operations, net   -    0.08 
Net loss  $(0.06)  $(0.51)
           
Weighted-average number of shares used in the calculation of basic and diluted (loss) income per share:   12,906    10,655 

 

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IDW MEDIA HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS

 

   Fiscal Years Ended 
(in thousands)  October 31,
2022		   October 31,
2021		 
Operating activities:          
Net loss  $(748)  $(5,392)
Adjustments to reconcile net loss to net cash provided by operating activities:          
Amortization of television costs   1,348    5,414 
Impairment of television costs   277    2,216 
Depreciation and amortization   342    433 
Amortization of finance leases   -    108 
Bad debt recovery   -    (79)
Stock based compensation   745    329 
Amortization of right-of-use asset   396    475 
Gain on extinguishment of PPP Loans   -    (2,460)
Gain on sale of discontinued operations   -    (2,123)
Changes in operating assets and liabilities:          
Trade accounts receivable   (1,017)   17,460 
Inventory   (1,195)   664 
Prepaid expenses and other assets   (437)   (414)
Television costs   (1,624)   (6,191)
Operating lease liability   (430)   (287)
Trade accounts payable, accrued expenses, production costs payable  and other current liabilities   (2,230)   921 
Deferred revenue   (2,045)   (340)
Gain on disposal of ROU assets   -    (97)
Net cash (used in) provided by operating activities   (6,618)   10,637 
Investing activities:          
Disposal of discontinued operations   -    (902)
Capital expenditures   (900)   (832)
Net cash used in investing activities   (900)   (1,734)
Financing activities:          
Proceeds from issuance of common stock   -    9,436 
Proceeds of government loans   -    1,196 
Repayments of bank loans   -    (14,204)
Net cash used in financing activities   -    (3,572)
Effect of exchange rate changes on cash and cash equivalents   -    39 
Net (decrease) increase in cash and cash equivalents   (7,518)   5,370 
Cash and cash equivalents at beginning of period   17,532    12,162 
Cash and cash equivalents at end of period  $10,014   $17,532 
           
Supplemental schedule of investing and financing activities          
Cash paid for interest  $-   $1,277 
           
Non-cash investing and financing activities          
Extinguishment of related party loan in exchange for sale of CTM  $-   $3,750 

 

 

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