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HOLLYWOOD MEDIA CORP. REPORTS FINANCIAL RESULTS
FOR THE THIRD QUARTER OF 2004
- GROWTH IN DATA BUSINESS DRIVES INCREASE IN TOTAL REVENUES -
(Boca Raton, FL - November 15, 2004) - Hollywood Media Corp. (Nasdaq: HOLL), a
leading provider of news, information and ticketing covering the entertainment
and media industries, today announced financial results for the third quarter
and nine-month period ended September 30, 2004.
FINANCIAL RESULTS
Net revenues for the quarter ended September 30, 2004 increased 8.5 percent, to
$15.1 million from $13.9 million for the same period of 2003. Total operating
expenses increased 13.6 percent to $18.1 million, compared to expenses of $15.9
million for the third quarter of 2003. This increase included operating expenses
related to Studio Systems (which the Company acquired on July 1, 2004), a
significant portion of which are expected to be eliminated by the end of the
fourth quarter of 2004, as well as hiring costs of additional personnel for
Broadway Tickets in preparation for the holiday season. The net loss for the
third quarter was $4.8 million, or $0.17 per share, compared with a net loss of
$2.3 million, or $0.11 per share, for the third quarter of 2003. The net loss
for the third quarter of 2004 was adversely impacted by $2.7 million in charges,
which consisted of $1.8 million of non-cash charges which related both to the
early conversion of $4.7 million of $5.7 million of our outstanding debentures
into common stock of the Company during the third quarter of 2004 and other
non-cash expenses relating to all of the debentures, approximately $0.6 million
in accounting and consulting fees relating to compliance under Sarbanes-Oxley,
and approximately $0.3 million related to the settlement of previously disclosed
litigation involving a lease. We note that approximately $1.3 million of the
$1.8 million debenture-related charges taken during the third quarter would have
been amortized over the remaining life of the debentures (through May 22, 2005),
had the holders of the debentures not converted early. The weighted average
number of shares outstanding for the three months ended September 30, 2004 was
28,336,820 shares as compared to 20,798,722 shares in the comparable 2003
period.
For the nine-month period ended September 30, 2004, total revenues increased to
$49.3 million, an 8.0 percent increase from the $45.6 million reported for the
first nine months of 2003. Operating expenses increased to $55.5 million versus
$51.7 million for the first nine months of last year, including an 8.6 percent
increase in ticketing-related expenses, and a 12.5 percent increase in selling,
general and administrative expenses. The Company reported a net loss of $7.7
million, or $0.28 per share, which net loss included the $2.7 million in third
quarter charges described above, compared to a net loss for the corresponding
period in 2003 of $6.6 million, or $0.32 per share. The weighted average number
of shares outstanding for the nine months ended September 30, 2004 was
26,989,284 shares as compared to 20,607,249 shares in the comparable 2003
period.
"Traditionally the third quarter is a seasonally slow quarter, with the fourth
quarter being a traditionally strong quarter. We are anticipating a stronger
than usual fourth quarter based on momentum in ticket sales and the sales
pipeline in our Data Business," commented Mitchell Rubenstein, Chief Executive
Officer of Hollywood Media Corp. "Our ticketing business through the first six
weeks of the fourth quarter is running at a record pace, with current results
being impacted by favorable trends in not only ticketing, but also by gift
certificates and hotel room sales, all of which have benefited from the recent
redesign of the Broadway.com website. We are already finding efficiencies from
our acquisition of Studio Systems and we anticipate signing a number of new
contracts with customers of our Data Business during the fourth quarter. We
anticipate cost efficiencies, including the elimination of approximately $2
million in annualized costs, from the integration of Studio Systems into our
Baseline unit beginning in the first quarter of 2005."
HOLLYWOOD MEDIA CORP. REPORTS 2004 THIRD QUARTER RESULTS
Page 2
SEGMENT RESULTS
BROADWAY TICKETING:
Broadway Ticketing revenue during the third quarter of 2004 was $11.7
million, a 5.9 percent increase from the $11.0 million reported in the third
quarter of 2003. Sales were negatively impacted by the GOP Convention in New
York during that period, which affected two weekends, as higher security
hampered local residents from attending the Theater and convention visitors did
not attend Broadway productions as much as anticipated. Despite the impact of
the GOP convention, sales still increased for the quarter due to strong sales on
Broadway.com during the period of the quarter excluding the GOP convention
period.
Mr. Rubenstein continued: "The unique impact of the GOP Convention
interrupted an otherwise strong quarter. As we move from a traditionally slower
quarter into a traditionally stronger quarter, we are well positioned for
ongoing growth. We reported significant increases in the number of hotel rooms
sold year over year, validating our packaging strategy, and we expect the
revenue from hotel bookings to provide a meaningful contribution to
profitability."
DATA BUSINESS
The Data Business segment contributed revenue of $2.4 million during the
three-month period ended September 30, 2004, a 37.4 percent increase from the
$1.7 million reported during the same period last year, primarily attributable
to the acquisition of Studio Systems, which occurred in the third quarter of
2004.
"The integration of Studio Systems is proceeding on track and is expected to be
completed in the current quarter. The increased size and scale of our Data
Business division has contributed to the overall sales pipeline of potential
customers for that division," Mr. Rubenstein commented. "We are pursuing several
significant opportunities which have the potential to substantially increase
revenue. This division operates at relatively low levels of fixed expenses, and
further growth should substantially boost the profit margins, validating the
strategy behind the acquisition and demonstrating the operating leverage this
division now possesses as it can provide a larger array of information and
services to a broader customer base."
INTELLECTUAL PROPERTY
The Company's Intellectual Property division reported revenues of $0.6 million
during the third quarter of 2004, an increase of 11.7 percent from the $0.5
million reported for the third quarter of 2003. The increase in revenues was
attributable to the timing of the delivery of manuscripts resulting in more
manuscripts delivered in the three months ended September 30, 2004 versus the
same period in 2003.
INTERNET ADVERTISING SALES
The Internet Advertising Sales division reported $0.5 million in sales during
the third quarter of 2004, a 25.9 percent decrease from the $0.7 million
reported for the third quarter of last year. The decrease is attributable in
part to a soft movie box office in the third quarter of 2004 as compared to the
third quarter of 2003, and the related reduction in movie studio advertising. In
an effort to increase revenue from this division, the Company has completed
phase one of a redesign of the Hollywood.com website and hired a new Vice
President of advertising sales from Cox Interactive. The Company has also hired
several new experienced sales personnel and created a pipeline of new ad sales
accounts, providing increased optimism for the fourth quarter and beyond.
HOLLYWOOD.COM TV
"Our MSO network expanded the reach of Hollywood.com Television to several new
geographic areas," Mr. Rubenstein commented. "We continue to anticipate reaching
the 10 million subscriber threshold, a significant milestone, by the middle of
2005. In preparation, we are planning the initial stages of our national
advertising sales program during the first quarter of 2005, with a focus on the
New York Metro market during the first half of 2005 and ramping up to other
geographic areas during the balance of the year."
HOLLYWOOD MEDIA CORP. REPORTS 2004 THIRD QUARTER RESULTS
Page 3
TELECONFERENCE INFORMATION
As previously announced, management will host a teleconference to discuss the
Company's third quarter 2004 financial results. The conference call is scheduled
for Monday, November 15, 2004 at 4:30 p.m. Eastern Time. To access the
teleconference, please dial 800-231-5571 if calling within the United States or
973-582-2703 if calling internationally, approximately five minutes prior to the
start of the call. The teleconference will also be available via live webcast on
the investor relations portion of the Company's website, located at
http://www.hollywood.com/about_us/. Following prepared remarks, management will
take questions from the audience via phone and e-mail. To ask a question via
e-mail, please send your questions to questions@exec.hollywood.com in advance
of, or during, the live call.
If you are unable to listen to the live teleconference at its scheduled time,
there will be a replay available through November 22, 2004 and can be accessed
by dialing 877-519-4471 (U.S.), 973-341-3080 (Int'l), passcode 5384717. A replay
of the teleconference and a copy of this press release will also be archived for
a longer period on the investor relations portion of the Company's web site.
ABOUT HOLLYWOOD MEDIA CORP.
Hollywood Media Corp. is a leading provider of news, information and ticketing
covering the entertainment and media industries. On the strength of its history
in developing comprehensive entertainment industry databases, as well as its
major strategic partners and unique content, the Company has launched a network
of media businesses. The Company's Data Business includes CinemaSource,
EventSource, ExhibitorAds and Baseline/StudioSystems. The Company's Broadway
Tickets business includes Broadway.com, 1-800-Broadway and Theatre Direct
International. These services supply thousands of media outlets with specific
information on entertainment events, such as movies, live theater and concerts,
and sell tickets for Broadway. The Company's businesses also include an
intellectual property business, as well as Hollywood.com and a minority interest
in MovieTickets.com. In addition, the Company owns and operates the cable
television network, Hollywood.com Television.
[FINANCIAL TABLES ATTACHED]
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 and integrate new businesses, our ability to realize
anticipated revenues and cost efficiencies, our ability to develop strategic
relationships, our ability to compete with other media, data and Internet
companies, 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 2003. Such forward-looking
statements speak only as of the date on which they are made.
Contact:
Matthew Hayden
Hayden Communications, Inc.
matt@haydenir.com
858-456-4533
HOLLYWOOD MEDIA CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
September 30, December 31,
2004 2003
------------- -------------
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 3,796,668 $ 1,867,999
Receivables, net 1,313,950 1,496,934
Inventories, net 7,822,598 5,770,289
Prepaid expenses 1,279,282 941,966
Other receivables 1,114,564 654,141
Other current assets 152,854 10,296
Deferred advertising - CBS -- 38,807
------------- -------------
Total current assets 15,479,916 10,780,432
RESTRICTED CASH 782,500 850,000
ACQUISITION ESCROW 920,000 --
PROPERTY AND EQUIPMENT, net 2,348,095 2,236,906
INVESTMENTS IN AND ADVANCES TO EQUITY METHOD INVESTEES 423,249 164,205
IDENTIFIABLE INTANGIBLE ASSETS, net 1,379,798 1,603,985
GOODWILL 45,081,539 40,813,682
OTHER ASSETS 284,851 431,811
------------- -------------
TOTAL ASSETS $ 66,699,948 $ 56,881,021
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 1,988,600 $ 2,201,431
Accrued expenses and other 3,868,554 5,178,467
Loan from shareholder/officer 200,000 600,000
Deferred revenue 9,436,149 9,063,317
Current portion of capital lease obligations 198,971 227,538
------------- -------------
Total current liabilities 15,692,274 17,270,753
CAPITAL LEASE OBLIGATIONS, less current portion 147,043 178,790
DEFERRED REVENUE, less current portion 251,687 193,063
MINORITY INTEREST 40,131 21,895
OTHER DEFERRED LIABILITY 103,694 903,192
CONVERTIBLE DEBENTURES, NET 763,708 4,027,629
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Preferred Stock at par value -- --
Common stock at par value 306,988 218,103
Additional paid-in capital 304,534,594 279,087,772
Deferred compensation (2,600,000) (162,500)
Accumulated deficit (252,540,171) (244,857,676)
------------- -------------
Total shareholders' equity 49,701,411 34,285,699
------------- -------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 66,699,948 $ 56,881,021
============= =============
HOLLYWOOD MEDIA CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Nine Months Ended September 30, Three Months Ended September 30,
------------------------------- --------------------------------
2004 2003 2004 2003
------------ ------------ ------------ ------------
(As Restated, (As Restated,
See Note 2) See Note 2)
NET REVENUES:
Ticketing $ 39,604,332 $ 36,525,556 $ 11,654,166 $ 11,002,268
Other 9,667,525 9,084,221 3,448,661 2,923,642
------------ ------------ ------------ ------------
Total revenues 49,271,857 45,609,777 15,102,827 13,925,910
OPERATING EXPENSES:
Cost of revenues - ticketing 34,350,187 31,629,607 10,197,864 9,133,834
Editorial, production, development and
technology (exclusive of depreciation and
amortization shown separately below) 3,868,219 3,758,000 1,363,292 1,320,286
Selling, general and administrative 15,593,379 13,861,932 5,977,937 4,794,737
Amortization of CBS advertising 38,807 609,193 -- 102,464
Depreciation and amortization 1,604,614 1,839,801 562,263 585,408
------------ ------------ ------------ ------------
Total operating expenses 55,455,206 51,698,533 18,101,356 15,936,729
Operating loss (6,183,349) (6,088,756) (2,998,529) (2,010,819)
EQUITY IN EARNINGS (LOSSES) OF INVESTEES 557,713 1,035,605 (30,373) 229,479
OTHER INCOME (EXPENSE):
Interest, net (2,548,460) (1,037,003) (1,762,959) (372,963)
Other, net 786,851 (108,165) 59,178 (117,059)
------------ ------------ ------------ ------------
Loss before minority interest (7,387,245) (6,198,319) (4,732,683) (2,271,362)
MINORITY INTEREST IN EARNINGS OF SUBSIDIARIES (295,250) (449,689) (59,258) (50,101)
------------ ------------ ------------ ------------
Net loss $ (7,682,495) $ (6,648,008) $ (4,791,941) $ (2,321,463)
============ ============ ============ ============
Basic and diluted loss per common share $ (0.28) $ (0.32) $ (0.17) $ (0.11)
============ ============ ============ ============
Weighted average common and common equivalent shares
outstanding - basic and diluted 26,989,284 20,607,249 28,336,820 20,798,722
============ ============ ============ ============