IDW - Earnings call transcript Q4 2021 | IDW Media Holdings, Inc.

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Operator

Good evening, and welcome to the IDW Media Holdings Fourth Quarter and Full Fiscal Year 2021 Earnings Call. In today’s presentation, Chief Executive Officer, Ezra Rosensaft; and Chief Financial Officer, Brooke Feinstein, will discuss IDW’s operational and financial results for the three and 12 months ended October 31, 2021. After the presentations, Mr. Rosensaft and Mrs. Feinstein will answer investor questions.

all be remarks, mode. a prepared management’s participants in will listen-only During Instructions]. [Operator the I Investor IMS will call to now turn over John Nesbett of Relations.

John Nesbett

have read Q&A conference call, I and a differ in the Any company and everyone. in subject factors now is filings. to that or no either general statements company’s IDW made that of website. the may update now that obligation may may the in Rosensaft. or the and remarks to assumes note risks any in forecast. make the on those to forward-looking over to this anticipates. to ahead, Investor actual earnings Please materially results the corporate update evening, which risks Holdings available from to Media statement. Ezra whether safe risks during go differ page Good or release uncertainties results that Ezra. made prepared Relations I the harbor include, session, will not moment they IDW call materially to are Please the IDW turn take the are those nature, SEC either or that actual from specific but limited cause they uncertainties These forward-looking cause specific will statements to, discussed the uncertainties

Ezra Rosensaft

strategy as our Brooke the XXXX, of everyone our XX, will call year and for joining for October I developments remarks fourth questions. full to will the Feinstein take of down thank also express on like XXXX. you, you review and XXXX. that to provide closed Thank John, and us. settle My optimistic quarter my outlook which start, today staying will fiscal fiscal and healthy then provide the one I’ll details and I’d COVID financial pandemic around and be To will that are continues, and every things happy soon. each safe wish to you our your results,

the look we’ve of moment and over fiscal attractiveness that refresher into economic and I take the details get want the and past the the company a made quarter provide at that year, Before model the I of back a established. on the to progress step year fourth to has

in so put the speak, heads company, of with new the and particularly have on management front We across to place publishing entertainment. line, new

I’ve Our sheet. absolutely reduce balance current and brought team capital is steps We raised debt taken to zero. to our down we multiple strengthen extraordinary. to costs our

the goal and As discussed balance asset-light for some sheet. in prior desired a been calls, has ours now have of this achieved time we

the blocks and of in as simple. heavy do an the to lifting the the our exciting model the are see on And much can done of strategy to is where beginning gas what are pedal place foot we we’ve signs have building pursue refined in economic put we So and strategy. time, we our and now enhance relatively

publishing the we’re increasing on our focus side, content. On original

model up engine our the to This speed. unique at and profitably the it do Our of part us level. library is enables operating picking build

from increase moving have pipeline, which We through titles significant a years. previous original our currently XX-plus is

exceptional happen. slate. entertainment on the market to With to this we’ll movies the ROI rights property as development better we series IDW-owned original up, its and the engine or cranked And pipeline bring through when moves business shots more on have the make intellectual of all media with the the on is goal side

are encouragingly, a not model, to can returns low-risk are over which whatsoever. seeing require realize and the as we company we Those progress. some these days us lever Importantly, does

has are pitching never side, on recently pipeline we the example, that announced our with stronger. the entertainment Apple+, house deal opportunities been of Surfside For girls, and the we

provide a IDWE, and want we company a to XXXX with Season Key accelerating processes, pipeline right revenue Entertainment, from to place the fourth some I to expected IDW platform results strong we balance for short. content are in believe we solid people, to at to Netflix quarter. which provide begin trajectory. through All on moving As October our sheet XXXX, and continue we quarter growth & X related our Key had the Locke of on see color or fourth aired Locke on in &

accounting XXXX. revenue that reasons, For of we QX won’t until recognize

Locke related GAAP, a fourth the timing the tied As quarter. to of as streamer of you $X.X a series. can to or revenue timing, last confirm revenue to Season quarter may remember, hasn’t of IDWE revenue from distributor. Primarily loss improved will of in IDWE shift recognize X the million delivered loss recorded episodes $X.X the in QX and delivery million that of under XXXX, is & $X.X nominal of Key I delivery loss IDWE recognition of fourth Net of the result of in a the the year. the net for million to

our the of we’re momentum We’re entertainment on excited franchises and we’re side market the seeing bringing about business. the to

just on and we episodes in I As announced our XX IDWE’s action Surfside Top content remain and We print. based deal is focused robust. our pipeline live with with Girls, for IDWE’s the Apple+ popular pipeline during quarter, our our series, on novels, graphic Shelf mentioned, development on original original via fourth a our accelerating IP expanding focus of published

renewed on or successful focus appeal believe were the market have audience. XXXX, film book, have by brings leveraging two to successful direct favorite feature very Publishing IDW have offset we feature to today these sure its vehicle or determine novels low-risk a I’m broad in strong in opportunities and to development creators journalist. can XQ setting be a effective a sales based favorite measure me platform IDWP though provide book all a featuring think vehicle, listening and for growing it podcast established or and content certain a and content appeal TV whether an pursue translates we to podcasts. or in a film as to favorite around also to had to and precursors and low-cost strategy, We has and to series addition capability to films us Graphic IDWP. IDWE proven which In decline test develop, of the market of sales. the podcast

a faced the Shelf as quarter XXXX demand fourth exceptionally also titles of tough for strong. during We was comparison Top

$X.X of million $XX,XXX in from this to result, decreased IDWP million from a Sequentially XQ XXXX the in modest in a QX. $XXX,XXX in revenue showed million income to fourth $X.X segment revenue Operating $X.X As XQ XXXX. increase XXXX. quarter XXXX from decreased in in XQ though,

sales. full The and in title Last XXXX, year direct Ninja surging Turtles: For Teenage supplemented from Mutant benefited fiscal Ronin strong IDWP increases game by sales, led market by

tremendous acquire comic original premier high-quality property books intellectual our and to on novels. are working We’re strategy graphic IP progress with and executing making creators of

we’re audience, SciFi IDW reader new We are and manga-inspired staples, transforming our expanding seeing in as to comedy, excited middle soon, reach as we’re content such such by well drama, library and tweens, as young and genres as broader and grade, comics. adult, thrillers,

Looking annually of unique XX the we as to to ahead, IDWE to we opportunities working the businesses. benefit We content our move original the varied efficiently through publishing and with believe profitably be we’ll bring on titles are across slate platform. co-development to and both than more development through original content moving pipeline from positioned XXXX, strongly

for as and the build new our pursue the moving library aggressively will forward. serve content best-in-class we growth that titles creators to continue foundation We as

incredible ahead. seeing we’re about opportunities energized the year and for the and marketplace are energize We an

the more Brooke of fiscal Now XXXX quarter call review I’ll results. detailed our Feinstein turn to and over for year fourth a

Brooke Feinstein

fourth otherwise. Thank you, full indicate results, I’ll fiscal of And quarter be on our full fourth XXXX year except the where year compare the XXXX XXXX. will to I Ezra. full fiscal fiscal remarks fiscal quarter My XXXX today focus results and XXXX. fourth year I’ll to fiscal quarter results comparing

strong sheet improvement past positions in IDW Our our and year current financial progress the for significant balance years over ahead. the several continued

IDW including deals flows now and production benefit investment. strong considerable substantially from mentioned, legacy We the that Ezra fiscal in growth of foundation we to are risk. raised original all capital financial ramps the for limited liquidity poised success. As our our investors robust our production proceeds finance accomplished and enhance IP we debt, cash invest positive work additional predictable in initiatives, to with utilized a downside XXXX, laying current of through eliminate provide At with amount support remaining and models long-term Entertainment, from

Finally, we visibility the XXXX, Exchange. our York New the in to fourth uplist our quarter enhanced of Stock fiscal through the in investor community

to Now let’s quarter $XX.X consolidated from look fourth quarter million. $XXX,XXX The was Earp The in million. by fell delivery our Wynonna of a financial year-ago at driven $X.X to entertainment results. the $X.X Virtually entertainment revenue from which revenue revenue, million episodes. was decline upon recognized in decrease all decreased

will book in Locke QX revenue & we Key ahead, Season XXXX. Looking X of

Surfside George the In publishing digital from this quarter notably of of the not market Lewis’ in X Girls as was fiscal in deliver during we March shops to second of began Revenue expect we XXXX. partially Key market in first road, other the the down though, approximately fiscal Season decrease Adventures, in our age and COVID-XX. and expect Locke million direct calendar revenue $X.X & further in Top that Called X Congressman in mind will half recognize XXXX, Us impacts necessarily revenue also realize Shelf XXXX, delayed Keep declined. of exceptionally be a recover retailers licensing led offset John the COVID, Looking shut decreased million a Takei’s sales best-selling sales can from titles, notice Batman forecast are earlier, therefore, and results our book to with by million delivery production The by or difficult and games from the strong games. Enemy. in little $X.X worst comic because stronger $X.X get we revenue quarter fourth Publishing book to and year year-ago accurately. boost sales when from dates quarter the primarily and down of to market in Season game from They

development in the has in licensed years. be – for game results XXXX. XXXX will bottom on [ph] closing publishing’s negative $X.X hurrah However, games business sharpen of the Batman of Adventures, reduce to this licensed in decision in $X exit our strategic aside and that on line fiscal are generated will million in both business franchises. from last we XXXX. impact our remainder the revenue our revenue line games million The as marginally games Setting fiscal tend focus to of marginal licensed fiscal original licensed We to a

$XX.X million tax production Wynonna its October from million. related fiscal from Locke of entertainment the credits $XX.X function shows. combination Agency For revenue to of Earp year, fiscal episodes market declined The decline three XXXX $X.X final fiscal $XX.X of revenue, these In Earp, revenue million Canadian the Faction. book was shows: entirely almost and from Ninja in million each the from of generated in $X & direct Last to in In over XXXX, recognized a by title, fiscal entertainment increased XXXX, sales revenue all XXXX, $XX.X which entertainment million revenues XXXX fiscal in decreased of in to a to Key offset million and by Ronin Wynonna decrease Turtles: consolidated strong prior decrease million. The exceptionally Revenue full a from Publishing of revenue. partially market Mutant led Teenage $XX.X

significant loss Media year narrowed further year-ago legacy generated Entertainment fourth operations quarter deals $X.X revenue $X consolidated production financing from Moving Holdings million incurred to a The a in majority the million. earlier. down the million of in the million to compared loss quarter Entertainment’s IDW increased quarter that $X.X the $X.X income to losses. statement, IDW fourth from

the resulted quarter, As and Income exceptionally Corporate quarter compensation in offset a year-ago from margin severance and $XXX,XXX positive strong the $XX,XXX from SG&A. severance to of fourth minimal the the $XXX,XXX in despite operations titles quarter higher from earlier in by partially quarter on in operations an decreased fourth XXXX, the generated improved operations backlisted reduction quarter. quarter generating of increase of income year sales to loss result, fourth in to XXXX IDW XXXX, year-ago of from revenue. in pay, $XX,XXX fourth Publishing compared in at expenses. of increased the overhead a from decrease profitability of Entertainment’s book the The the in

impact financing from our fiscal decreased fiscal that operations fiscal loss For from legacy and million XXXX reflecting the our in loss the year, consolidated in XXXX in XXXX. to in operations impacted the the $X.X IDW from lesser extent $X.X $X.X decreased million full to fiscal again, a million from fiscal million to production XXXX $X.X in in deals At results XXXX. XXXX, from Entertainment,

to At the $X.X $X.X by first In of compared higher quarter of line compensation impact $X.XX announced addition, the line change television improved year I fiscal the XXXX. to costs. operations, XXXX to full share bottom decrease on in million from quarter, certain of tax quarter from fiscal in loss from share fiscal partially $XXX,XXX to sales backlisted offset The XXXX and to per fiscal from production IDWE’s continued year-ago $X.XX credits, $XXX,XXX to implementation of in a the XXXX expenses marketing third the production in operations to episodic bottom $X.XX net expense XXXX, loss in gross mentioned from narrowed $XXX,XXX year the benefited of improve. titles costs. earlier, The $X.X million we from our the a the increased results loss in the from previous fiscal loss XXXX our year. compensation accounting in improved operations operations a from loss impairment in million overhead $X.XX a continuing $X.XX as in quarter’s while treatment decline and the increased. loss to increased a profit and in The in the prior in compared share from IDWP, severance net a discontinued fourth Including the book net $X.XX in $X.XX in of loss from as corporate

ample current in strong Turning debt. no At wrap equivalents. sheet our cash $XX.X our and balance Working had $XX.X XX, million and assets October liabilities capital, now To less current to we totaled up, we balance million sheet. cash with is liquidity. held

we the from through us, of behind in year ahead. benefit as poised remainder improved significantly we fiscal financing production impacts bottom to XXXX line tailwinds in deals. operations With legacy the work those from results Our are the several

half the my & production in also We Key hold. Locke Batman and and That expect XXXX X second of nice to first Adventures. IDW Season a that recognize Surfside in & the quarter X in X current from get high-margin Season will provided from calendar Girls timeframes first concludes Locke Key quarter revenue revenue year, of Publishing sales the boost from Season remarks.

happy take to Now, your Ezra be I would questions. and

Ezra Rosensaft

Brooke. you, Thank

Now, as Operator, for mentioned, to we’d back your Q&A. you welcome questions.

Operator

your Eddie session. We Instructions] will proceed question-and-answer now first the is question with question. with Hutton. Please Our Reilly EF [Operator begin from

Eddie Reilly

strong going model? derisked Hey, & the have guys, thanks in Girls see publishing taking be for Surfside revenue as using quarter. Locke revenues Key? sequentially my Is to margins question. expect we similar I this to Should the new and

Ezra Rosensaft

is So – hi, Eddie, yes. it’s Ezra. The short answer

Going can capital, means We a you, we hire model, derisked bit or model historical The production debt we license the everyone can streamer up flows very the that if I’m put do not network hear in we leveraging or fee see leverage. production on buyer the our financials, production. services. tri-party take not to to response. on people as simply – take so not put forward, do derisked in the we and cash We do fee and do not you mute while little it’s go – hear hard to can sure a

moves was it’s what away to So you’re the That from sheet talked about balance correct. when business we derisked that model company asset-light. where used is us put, very and be the now simply the

Eddie Reilly

in do could one strong November? to awesome. a you is you or [indiscernible] you’re Do targets us for more year projection into how that give your Awesome, projected million the so? the [indiscernible] And the next revenue the in some you $XX for sales film closer or Thanks. pipeline think insight of moving And was year, for two-year year? see obtainable

Ezra Rosensaft

I I of there. most think question So heard you

terms in but don’t to buyers, to that projections really I’ll particular as do want and increase, neutral excellent root want we ultimately get is haven’t don’t is doing guidance, yet XXXX content, see keep look various flowing counsel. get the but to king, our need positive. we future focusing looking getting dollars through do we as avoid past. that in being content we know, try given I for call, water because an hot years, of of to this year with all first on profitability. to see Kong, do particular So on I are into in forward into an reasons, King to into distribution things we We

Eddie Reilly

for million other us $X.X income great. Okay, apologies some on Could what in color I the into you And the was? that [indiscernible] give produce quarter. sound.

Brooke Feinstein

hi. Yes, forgiveness. for was loan That the PPP

the earlier We another This in one. one also the year. had is second

Eddie Reilly

it Okay, great. That’s from me. you, Thank guys.

Operator

is your next question with from Please Our Walter Capital. Mayflower Bellinger with proceed question.

Walter Bellinger

Hey, thanks taking Yes. my for questions. guys,

color – impact valuation? Could provide your yours, impact this of the acquired. So recently might any look might acquisition Horse, how Dark the of at I you and a competitor industry sort would concerning how was

Ezra Rosensaft

Great question, Thank you. Walter.

lot about doesn’t also is on a the happening we’re interesting as looked it What’s entertainment your podcast, investments the it’s at So patient, media. one streamer, in there’s all of consumers matter. that, hand, Pick industry. something media and

should we on Dark is so acquisition But and So ground. the original because soon valuation landscape, From content. company, gaming And all the the speculate, and by the that say, conjecture been what being which a million was give talked discretion. XX-plus remains other hearing give intellectual want annually, to know, since depends but in say there us a at in about purchased the fast, size drives original I opportunity going to use things focus quality. by context, XXX-plus believe I I’ll to the original don’t not everyone standpoint, you particular, of can leave more many just evolving lots on crude, little industry, increasingly value reflect the of a we of companies this metric space I to And makes it’s may per is one we the supply very the the Horse IP, we of many made don’t and to crucial, really about into outstrip valued public, tough the is at. development the the particular the purchase point, is acquired and it’s as IP climbing you’ve them. IDWP, what’s don’t because IP. price $X it And acquisition And our Horse as obviously But IDWE. their to are and in huge to shift, given still get excited dearth it demand, just to to pipeline property. their original streamers, a being Dark as the for the of of through be But that consolidation slate, what the want is that title. our publishing very library.

You the could that’s X than have per – one Walking Dead, rough obviously million it’s worth ballpark. but title, more

So be it is use won’t at. the enterprise it on should what calculate speculate can begin you if price history. what that, given our why truly is, you to or value I the

We’re looking forward.

and out We weekly. is in time, takes over novel. expect that the business, great have the in a a near be, shortly increase, realized We content forward content. coming we that have but valuation put time opinion. graphic be future. to periodicals add take will lot but should great valuation Whenever certainly, may a to This we it It to not that my of in

Walter Bellinger

the quarter. understand year side nice And approximately your the just the then uplisting? costs so on how Can you help is one-time Okay, much of business great. of related us to financing job cost this obviously, your during

Brooke Feinstein

sure. Yes,

see about for again. audit $XXX,XXX legal be would transfer of and approximately that we accounting agencies that kind won’t So

Walter Bellinger

question. one then more And just Okay.

Just just this. on just I been booked – QX want was in that revenue QX? already has Locke Key to in expected & be – and clear The

Brooke Feinstein

recognized recorded The is will correct. be and is QX. cash already in it That in and

Walter Bellinger

Great.

taking Okay. questions, for Well, my Thanks that’s guys. it for me.

Ezra Rosensaft

Wal. Thanks.

Operator

I call closing there would Instructions] to to for no like management [Operator are the over hand remarks. questions, As more

Ezra Rosensaft

everyone, news. and positive forward speaking the Thanks, Kyle, Thanks, and with Thanks, coming and have future to everyone, joining all listening. for in operator. for of you today. Look listening more

Operator

today’s attending Thank you for presentation.

You may now disconnect.

IDW Media (IDWM) 21 Jan 222021 Q4 Earnings call transcript