EXHIBIT 99.2
Hollywood Media Corp.
Pro Forma Financial Information
(Unaudited)
Pro Forma Financial Information
(Unaudited)
Introduction
On August 24, 2007, Hollywood Media Corp. (the “Company”) entered into and simultaneously closed on a definitive asset purchase agreement with West World Media LLC (“WWM”), pursuant to which Hollywood Media sold to WWM substantially all of the assets of its wholly-owned subsidiary, Showtimes.com, Inc. (“Source”), for a cash purchase price of $23,000,000, subject to a potential post-closing adjustment. The following Unaudited Pro Forma Condensed Consolidated Financial Statements have been prepared to illustrate the effect of the sale of substantially all of the assets of Source, as a discontinued operation, on the historical financial position and results of operations of the Company.
The Unaudited Pro Forma Condensed Consolidated Statements of Operations for the six months ended June 30, 2006 and 2007, and for the years ended December 31, 2004, 2005 and 2006, reflect the sale of assets of Source that occurred on August 24, 2007, as if the sale had occurred as of as of January 1 of each such year. The Unaudited Pro Forma Condensed Consolidated Balance Sheet as of June 30, 2007 reflects the sale of assets of Source as if the sale occurred on June 30, 2007.
The Unaudited Pro Forma Condensed Consolidated Financial Statements are based upon available information and assumptions that the Company believes are reasonable under the circumstances. The Unaudited Pro Forma Condensed Consolidated Financial Statements have been provided for information purposes and are not necessarily indicative of the financial condition or results of operations that would have been achieved had the sale of assets of Source occurred on the date indicated. Assumptions underlying the pro forma adjustments are described in the accompanying notes, which should be read in conjunction with the Unaudited Pro Forma Condensed Consolidated Financial Statements. The Unaudited Pro Forma Condensed Consolidated Financial Statements, including the notes thereto, should be read in conjunction with the historical financial statements of the Company included in its Quarterly Report on Form 10-Q for the period ended June 30, 2007, and its Annual Report on Form 10-K for the year ended December 31, 2006.
HOLLYWOOD MEDIA CORP. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Six Months ended June 30, 2007
(Unaudited)
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Six Months ended June 30, 2007
(Unaudited)
Historical | Sale of | Pro Forma | ||||||||||
Hollywood Media Corp.(9) | Source(6) | Hollywood Media Corp. | ||||||||||
NET REVENUES | ||||||||||||
Ticketing | $ | 58,784,512 | $ | — | $ | 58,784,512 | ||||||
Other | 9,141,780 | (3,288,016 | ) | 5,853,764 | ||||||||
67,926,292 | (3,288,016 | ) | 64,638,276 | |||||||||
OPERATING COSTS AND EXPENSES: | ||||||||||||
Cost of revenues — ticketing | 50,176,228 | — | 50,176,228 | |||||||||
Editorial, production, development and technology (exclusive of depreciation and amortization shown separately below) | 3,993,379 | (986,415 | ) | 3,006,964 | ||||||||
Selling, general and administrative | 8,168,931 | (374,620 | ) | 7,794,311 | ||||||||
Payroll and benefits | 8,823,247 | (748,722 | ) | 8,074,525 | ||||||||
Depreciation and amortization | 945,314 | (87,868 | ) | 857,446 | ||||||||
Total operating costs and expenses | 72,107,099 | (2,197,625 | ) | 69,909,474 | ||||||||
Income (loss) from operations | (4,180,807 | ) | 1,090,391 | (5,271,198 | ) | |||||||
EQUITY IN EARNINGS OF UNCONSOLIDATED INVESTEES | 875 | — | 875 | |||||||||
OTHER INCOME (EXPENSE) | ||||||||||||
Interest, net | (320,286 | ) | 665 | (319,621 | ) | |||||||
Other, net | (1,526 | ) | 40,788 | 39,262 | ||||||||
Income (loss) before minority interest | (4,501,744 | ) | 1,048,938 | (5,550,682 | ) | |||||||
MINORITY INTEREST IN (INCOME) OF SUBSIDIARIES | (382 | ) | — | (382 | ) | |||||||
Net income (loss) | $ | (4,502,126 | ) | $ | 1,048,938 | $ | (5,551,064 | ) | ||||
Basic and diluted income (loss) per common share | $ | (0.13 | ) | $ | (0.17 | ) | ||||||
Weighted average common and common equivalent shares outstanding — basic and diluted | 33,351,780 | 33,351,780 | ||||||||||
See accompanying notes to unaudited pro forma condensed consolidated financial statements.
2
HOLLYWOOD MEDIA CORP. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Six Months ended June 30, 2006
(Unaudited)
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Six Months ended June 30, 2006
(Unaudited)
Historical | Sale of | Pro Forma | ||||||||||
Hollywood Media Corp.(9) | Source(6) | Hollywood Media Corp. | ||||||||||
NET REVENUES | ||||||||||||
Ticketing | $ | 45,436,255 | $ | — | $ | 45,436,255 | ||||||
Other | 8,673,661 | (3,113,598 | ) | 5,560,063 | ||||||||
54,109,916 | (3,113,598 | ) | 50,996,318 | |||||||||
OPERATING COSTS AND EXPENSES: | ||||||||||||
Cost of revenues — ticketing | 37,924,753 | — | 37,924,753 | |||||||||
Editorial, production, development and technology (exclusive of depreciation and amortization shown separately below) | 3,360,059 | (899,083 | ) | 2,460,976 | ||||||||
Selling, general and administrative | 7,278,119 | (350,263 | ) | 6,927,856 | ||||||||
Payroll and benefits | 7,856,577 | (693,043 | ) | 7,163,534 | ||||||||
Depreciation and amortization | 1,011,488 | (87,246 | ) | 924,242 | ||||||||
Total operating costs and expenses | 57,430,996 | (2,029,635 | ) | 55,401,361 | ||||||||
Income (loss) from operations | (3,321,080 | ) | 1,083,963 | (4,405,043 | ) | |||||||
EQUITY IN EARNINGS OF UNCONSOLIDATED INVESTEES | (1,768 | ) | — | (1,768 | ) | |||||||
OTHER INCOME (EXPENSE) | ||||||||||||
Interest, net | (1,183,962 | ) | 168 | (1,183,794 | ) | |||||||
Change in derivative liability | 344,000 | — | 344,000 | |||||||||
Other, net | (82,734 | ) | 250 | (82,484 | ) | |||||||
Income (loss) before minority interest and discontinued operations | (4,245,544 | ) | 1,083,545 | (5,329,089 | ) | |||||||
MINORITY INTEREST IN (INCOME) OF SUBSIDIARIES | 30,256 | — | 30,256 | |||||||||
Income (loss) from continuing operations | (4,215,288 | ) | 1,083,545 | (5,298,833 | ) | |||||||
Income from discontinued operations | 474,870 | — | 474,870 | |||||||||
Net income (loss) | $ | (3,740,418 | ) | $ | 1,083,545 | $ | (4,823,963 | ) | ||||
Basic and diluted income (loss) per common share | ||||||||||||
Continuing operations | $ | (0.13 | ) | $ | (0.16 | ) | ||||||
Discontinued operations | 0.01 | 0.01 | ||||||||||
Total basic and diluted net income (loss) per share | $ | (0.12 | ) | $ | (0.15 | ) | ||||||
Weighted average common and common equivalent shares outstanding — basic and diluted | 32,480,256 | 32,480,256 | ||||||||||
See accompanying notes to unaudited pro forma condensed consolidated financial statements.
3
HOLLYWOOD MEDIA CORP. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Year ended December 31, 2006
(Unaudited)
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Year ended December 31, 2006
(Unaudited)
Historical | Sale of | Pro Forma | ||||||||||
Hollywood Media Corp.(5) | Source(6) | Hollywood Media Corp. | ||||||||||
NET REVENUES | ||||||||||||
Ticketing | $ | 98,102,961 | $ | — | $ | 98,102,961 | ||||||
Data | 6,478,478 | (6,478,478 | ) | — | ||||||||
Other | 11,314,021 | — | 11,314,021 | |||||||||
115,895,460 | (6,478,478 | ) | 109,416,982 | |||||||||
OPERATING COSTS AND EXPENSES: | ||||||||||||
Cost of revenues — ticketing | 81,928,952 | — | 81,928,952 | |||||||||
Editorial, production, development and technology (exclusive of depreciation and amortization shown separately below) | 7,204,546 | (1,873,048 | ) | 5,331,498 | ||||||||
Selling, general and administrative | 15,589,131 | (704,863 | ) | 14,884,268 | ||||||||
Payroll and benefits | 15,600,177 | (1,482,798 | ) | 14,117,379 | ||||||||
Depreciation and amortization | 1,879,405 | (176,978 | ) | 1,702,427 | ||||||||
Total operating costs and expenses | 122,202,211 | (4,237,687 | ) | 117,964,524 | ||||||||
Income (loss) from operations | (6,306,751 | ) | 2,240,791 | (8,547,542 | ) | |||||||
EQUITY IN EARNINGS OF UNCONSOLIDATED INVESTEES | 12,227 | — | 12,227 | |||||||||
OTHER INCOME (EXPENSE) | ||||||||||||
Interest, net | (1,788,241 | ) | 506 | (1,787,735 | ) | |||||||
Change in derivative liability | 640,536 | — | 640,536 | |||||||||
Other, net | 1,025 | 2,885 | 3,910 | |||||||||
Income (loss) before minority interest and discontinued operations | (7,441,204 | ) | 2,237,400 | (9,678,604 | ) | |||||||
MINORITY INTEREST IN LOSSES OF SUBSIDIARIES | 4,910 | — | 4,910 | |||||||||
Income (loss) from continuing operations | (7,436,294 | ) | 2,237,400 | (9,673,694 | ) | |||||||
Gain on sale of discontinued operations, net of income taxes of $524,265 | 16,328,241 | — | 16,328,241 | |||||||||
Income from discontinued operations | 630,566 | — | 630,566 | |||||||||
Income from discontinued operations | 16,958,807 | — | 16,958,807 | |||||||||
Net income | $ | 9,522,513 | $ | 2,237,400 | $ | 7,285,113 | ||||||
Basic and diluted income (loss) per common share | ||||||||||||
Continuing operations | $ | (0.23 | ) | $ | (0.30 | ) | ||||||
Discontinued operations | 0.52 | 0.52 | ||||||||||
Total basic and diluted net income (loss) per share | $ | 0.29 | $ | 0.22 | ||||||||
Weighted average common and common equivalent shares outstanding — basic and diluted | 32,761,848 | 32,761,848 | ||||||||||
See accompanying notes to unaudited pro forma condensed consolidated financial statements.
4
HOLLYWOOD MEDIA CORP. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Year ended December 31, 2005
(Unaudited)
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Year ended December 31, 2005
(Unaudited)
Historical | Sale of | Pro Forma | ||||||||||
Hollywood Media Corp.(5) | Source(6) | Hollywood Media Corp. | ||||||||||
NET REVENUES | ||||||||||||
Ticketing | $ | 78,890,718 | $ | — | $ | 78,890,718 | ||||||
Data | 5,359,222 | (5,359,222 | ) | — | ||||||||
Other | 6,105,090 | — | 6,105,090 | |||||||||
90,355,030 | (5,359,222 | ) | 84,995,808 | |||||||||
OPERATING COSTS AND EXPENSES: | ||||||||||||
Cost of revenues — ticketing | 67,515,534 | — | 67,515,534 | |||||||||
Editorial, production, development and technology (exclusive of depreciation and amortization shown separately below) | 4,779,185 | (1,788,094 | ) | 2,991,091 | ||||||||
Selling, general and administrative | 11,452,679 | (634,591 | ) | 10,818,088 | ||||||||
Payroll and benefits | 14,688,004 | (1,101,018 | ) | 13,586,986 | ||||||||
Depreciation and amortization | 1,468,334 | (199,188 | ) | 1,269,146 | ||||||||
Total operating costs and expenses | 99,903,736 | (3,722,891 | ) | 96,180,845 | ||||||||
Income (loss) from operations | (9,548,706 | ) | 1,636,331 | (11,185,037 | ) | |||||||
EQUITY IN EARNINGS OF UNCONSOLIDATED INVESTEES | 533,228 | — | 533,228 | |||||||||
OTHER INCOME (EXPENSE) | ||||||||||||
Interest, net | (546,171 | ) | 574 | (545,597 | ) | |||||||
Change in derivative liability | 87,037 | — | 87,037 | |||||||||
Other, net | 44,523 | 339 | 44,862 | |||||||||
Income (loss) before minority interest and discontinued operations | (9,430,089 | ) | 1,635,418 | (11,065,507 | ) | |||||||
MINORITY INTEREST IN (INCOME) OF SUBSIDIARIES | (168,107 | ) | — | (168,107 | ) | |||||||
Income (loss) from continuing operations | (9,598,196 | ) | 1,635,418 | (11,233,614 | ) | |||||||
Income from discontinued operations | 685,014 | — | 685,014 | |||||||||
Net income (loss) | $ | (8,913,182 | ) | $ | 1,635,418 | $ | (10,548,600 | ) | ||||
Basic and diluted income (loss) per common share | ||||||||||||
Continuing operations | $ | (0.30 | ) | $ | (0.36 | ) | ||||||
Discontinued operations | 0.02 | 0.02 | ||||||||||
Total basic and diluted net income (loss) per share | $ | (0.28 | ) | $ | (0.34 | ) | ||||||
Weighted average common and common equivalent shares outstanding — basic and diluted | 31,470,307 | 31,470,307 | ||||||||||
See accompanying notes to unaudited pro forma condensed consolidated financial statements.
5
HOLLYWOOD MEDIA CORP. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Year ended December 31, 2004
(Unaudited)
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Year ended December 31, 2004
(Unaudited)
Historical | Sale of | Pro Forma | ||||||||||
Hollywood Media Corp.(5) | Source(6) | Hollywood Media Corp. | ||||||||||
NET REVENUES | ||||||||||||
Ticketing | $ | 59,689,971 | $ | — | $ | 59,689,971 | ||||||
Data | 4,601,047 | (4,601,047 | ) | — | ||||||||
Other | 5,298,223 | — | 5,298,223 | |||||||||
69,589,241 | (4,601,047 | ) | 64,988,194 | |||||||||
OPERATING COSTS AND EXPENSES: | ||||||||||||
Cost of revenues — ticketing | 51,781,133 | — | 51,781,133 | |||||||||
Editorial, production, development and technology (exclusive of depreciation and amortization shown separately below) | 4,057,680 | (1,691,954 | ) | 2,365,726 | ||||||||
Selling, general and administrative | 10,237,259 | (559,887 | ) | 9,677,372 | ||||||||
Payroll and benefits | 11,021,138 | (891,119 | ) | 10,130,019 | ||||||||
Amortization of CBS advertising | 38,807 | — | 38,807 | |||||||||
Depreciation and amortization | 1,579,201 | (102,766 | ) | 1,476,435 | ||||||||
Total operating costs and expenses | 78,715,218 | (3,245,726 | ) | 75,469,492 | ||||||||
Income (loss) from operations | (9,125,977 | ) | 1,355,321 | (10,481,298 | ) | |||||||
EQUITY IN EARNINGS OF UNCONSOLIDATED INVESTEES | 576,317 | — | 576,317 | |||||||||
OTHER INCOME (EXPENSE) | ||||||||||||
Interest, net | (2,608,776 | ) | 28,166 | (2,580,610 | ) | |||||||
Other, net | 3,334 | 333 | 3,667 | |||||||||
Income (loss) before minority interest and discontinued operations | (11,155,102 | ) | 1,326,822 | (12,481,924 | ) | |||||||
MINORITY INTEREST IN (INCOME) OF SUBSIDIARIES | (388,383 | ) | — | (388,383 | ) | |||||||
Income (loss) from continuing operations | (11,543,485 | ) | 1,326,822 | (12,870,307 | ) | |||||||
Loss from discontinued operations | (54,314 | ) | — | (54,314 | ) | |||||||
Net income (loss) | $ | (11,597,799 | ) | $ | 1,326,822 | $ | (12,924,621 | ) | ||||
Basic and diluted income (loss) per common share | ||||||||||||
Continuing operations | $ | (0.42 | ) | $ | (0.46 | ) | ||||||
Discontinued operations | (0.00 | ) | (0.00 | ) | ||||||||
Total basic and diluted net income (loss) per share | $ | (0.42 | ) | $ | (0.46 | ) | ||||||
Weighted average common and common equivalent shares outstanding — basic and diluted | 27,784,850 | 27,784,850 | ||||||||||
See accompanying notes to unaudited pro forma condensed consolidated financial statements.
6
HOLLYWOOD MEDIA CORP. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEETS
As of June 30, 2007
(Unaudited)
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEETS
As of June 30, 2007
(Unaudited)
Historical | Sale of | Pro Forma | ||||||||||
Hollywood Media Corp.(5) | Source | Hollywood Media Corp. | ||||||||||
ASSETS | ||||||||||||
CURRENT ASSETS: | ||||||||||||
Cash and cash equivalents | $ | 12,616,083 | $ | 23,000,000 | (1) | $ | 35,616,083 | |||||
Receivables, net | 3,930,807 | (673,181 | )(2) | 3,257,626 | ||||||||
Inventories held for sale | 5,848,721 | — | 5,848,721 | |||||||||
Deferred ticket costs | 15,160,113 | — | 15,160,113 | |||||||||
Prepaid expenses | 2,839,284 | (773,621 | )(2),(8) | 2,065,663 | ||||||||
Other receivables | 2,603,772 | (13,015 | )(2) | 2,590,757 | ||||||||
Other current assets | 3,236,004 | (959 | )(2) | 3,235,045 | ||||||||
Total current assets | 46,234,784 | 21,539,224 | 67,774,008 | |||||||||
PROPERTY AND EQUIPMENT, net | 2,235,507 | (119,354 | )(2) | 2,116,153 | ||||||||
INVESTMENTS IN AND ADVANCES TO UNCONSOLIDATED INVESTEES | 283,113 | — | 283,113 | |||||||||
INTANGIBLE ASSETS, net | 1,646,957 | — | 1,646,957 | |||||||||
GOODWILL | 39,595,612 | (9,376,256 | )(2) | 30,219,356 | ||||||||
OTHER ASSETS | 126,045 | (1,170 | )(2) | 124,875 | ||||||||
TOTAL ASSETS | $ | 90,122,018 | $ | 12,042,444 | $ | 102,164,462 | ||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||
CURRENT LIABILITIES: | ||||||||||||
Accounts payable | 4,791,074 | (197,962 | )(2) | $ | 4,593,112 | |||||||
Accrued expenses and other | 5,540,145 | 2,562,341 | (2),(3),(7),(8) | 8,102,486 | ||||||||
Deferred revenue | 23,352,105 | (86,824 | )(2) | 23,265,281 | ||||||||
Customer deposits | 1,807,346 | — | 1,807,346 | |||||||||
Current portion of capital lease obligations | 51,913 | (9,492 | )(2) | 42,421 | ||||||||
Total current liabilities | 35,542,583 | 2,268,063 | 37,810,646 | |||||||||
DEFERRED REVENUE | 551,663 | (67,200 | )(2) | 484,463 | ||||||||
CAPITAL LEASE OBLIGATIONS, less current portion | 114,991 | (13,449 | )(2) | 101,542 | ||||||||
MINORITY INTEREST | 2,789 | — | 2,789 | |||||||||
OTHER DEFERRED LIABILITY | 304,196 | (59,270 | )(2) | 244,926 | ||||||||
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; 33,769,673 and 33,476,530 shares issued and outstanding at June 30, 2007 and December 31, 2006, respectively | 337,697 | — | 337,697 | |||||||||
Additional paid-in capital | 314,343,942 | — | 314,343,942 | |||||||||
Accumulated deficit | (261,075,843 | ) | 9,914,300 | (4) | (251,161,543 | ) | ||||||
Total shareholders’ equity | 53,605,796 | 9,914,300 | 63,520,096 | |||||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 90,122,018 | $ | 12,042,444 | $ | 102,164,462 | ||||||
See accompanying notes to unaudited pro forma condensed consolidated financial statements.
7
HOLLYWOOD MEDIA CORP. AND SUBSIDIARIES
Notes to the Pro Forma Condensed Consolidated Financial Statements
(Unaudited)
Notes to the Pro Forma Condensed Consolidated Financial Statements
(Unaudited)
(1) | To record the cash proceeds of $23,000,000. | |
(2) | Represents adjustments to eliminate assets and liabilities of the Source business. | |
(3) | The amount includes an accrual for estimated transaction expenses, costs and fees associated with sale of $2,448,946. | |
(4) | To record the gain on sale of the assets of the Source business based on cash consideration: |
Proceeds received | $ | 23,000,000 | ||
Net assets sold | (9,636,754 | ) | ||
Accrued transaction expense | (2,448,946 | ) | ||
Gain on sale before taxes | $ | 10,914,300 | ||
Income taxes | (1,000,000 | ) | ||
Net gain | $ | 9,914,300 | ||
(5) | Represents the Consolidated Balance Sheet included in the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2007 and the Consolidated Statements of Operations included in the Company’s Annual Report on Form 10-K for the years ended December 31, 2006, 2005 and 2004, as applicable. | |
(6) | Represents adjustments to eliminate the results of operations of Source that the Company believes are directly attributable to the sale and are factually supportable and will not continue after sale. | |
(7) | The line item includes an accrual for estimated state and federal income tax liabilities as a result of the sale of $1,000,000. | |
(8) | The amount includes $690,627 in items accrued for and capitalized prior to filing of the Form 10-Q for the period ended June 30, 2007. | |
(9) | Represents the Consolidated Statements of Operations included in the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2007 and 2006, as applicable. |
8