Earnings call transcript Q1 2023

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Operator

Good evening, and welcome to the IDW Media Holdings’ First Quarter Fiscal 2023 Earnings Call.

During management’s prepared remarks all participants will be in a listen-only mode. [Operator Instructions]

I will now turn the call over to Jen Belodeau of IMS Investor Relations. Thank you.

begin. may You

Jen Belodeau

in specific and session, take may Harbor. update risks I’ll are call, moment include, read materially company’s they risks risks which assumes and the IDW uncertainties results to discussed that any they in nature, those, to to, These specific anticipates. Good subject from have actual are forward-looking a make not no results statements uncertainties Safe that factors to the forecast. Q&A to in made, cause or Any prepared but update that uncertainties the statements either conference company actual general filings. made materially the SEC or the in that differ may evening. those limited and remarks brief obligation to whether cause during may the either or forward-looking differ this to from

IDW page on Please available note is IDW the website. corporate the earnings Holdings of that release Relations Investor the Media

I’ll Go ahead, to Allan. Allan now Grafman. over the turn conference

Allan Grafman

around year the few Thank quarter you overview on on your details joining for of take call After provide remarks to the results call year today. you, My our for for thank to the financial us my we words on our and fiscal be an a everyone CFO, of the this and XXXX, operator, beyond. happy provide strategy results and fiscal will XXXX remarks, first our and focused rest of will Brooke will questions. Feinstein, then

Among deliver QX sell, line did demonstrated XXXX at develop, the long prepare, not with time well Consolidated those produce results Publishing. are performance results The quarter and projects. solid reasons first for entertainment several reasons. to compare IDW

publishing entertainment, and with driving are our initiatives urgency. digital We

strategy IDW steps In XXXX for an actionable we just finished in and doing beyond. plan fact,

then first, are lift identified solidify with to the into more entertainment We reward designed new choice; These these second, which initiatives businesses; IDW long-term. digital us: bring into third, arenas; to near-term, and intermediate growth connect of partner fuel shareholders. publishing to current directly fourth, possible including identified as our for and creative IDW We’ve and our platforms do long-term many, XX four initiatives IDW as new than fans. IDW take things digital initiatives

focus let’s results. most on our Now, recent

no comparison Our quarter meaningful first to quarter fiscal revenue on XXXX. XXXX, challenging with based delivery in the in Key of primarily the the first to Publishing revenue Batman almost QX the we $X contributing Adventures. while full XXXX comparison & of fact in Entertainment results that first recognized for IDW we had the of revenue a year the XXXX, million Locke direct-to-consumer million X, generated games XXXX, related in from campaign Season of Also negative $X.X quarter Entertainment in fulfillment QX generated

a that reliable, Random Penguin will last partner our with with steady they sales let’s both Now, their House. partnership me for In at forward. Anchoring a meeting to properties. distribution continue The that performance. choice. is source CEO predictable our IDW licensed at business is their provide Print take and viewed solid of business sales print of print and titles original our relatively consistent look We our continue focus primary our to distributor, IDW told revenue increased closer leadership revenues print a our driving is are revenue segments. with of individual moving a week, Publishing anticipate as

we increase are working revenues, digital addition to our revenues to through initiatives. print In

be our This completed in in to direct a control are Shopify with us and fiscal to going a give We new by XXXX. will stages ability platform year digital connection and it’s to greater migrating have be migration hosted two loyal to customers.

QX in XXXX results produce. Entertainment, rewards IDW positive illustrate entertainment strong financial the At transactions that the

rewarded for will it ability remember our Entertainment way creative our production, important be amount projects to a quarters the entertainment to through a and moving revenue business, recognize TV be where side the other deliver we finally, continue by we and of process. development there a considerable of to it where from that buyer, as all scale to we there won’t will the agreements separate we It’s to and takes to patience. However, to as are much vision IDW entertainment, our time, take idea or original quarters platforms, from consistent effort other

journey and We view sustained our shareholder part fiscal a value. XXXX as of transition year IDW creating crucial for towards an important

strong has partner Our We new their with reach to maximize a at the time, them help creators same the IP and, and creators new Publishing audiences discover of our library. division unique to grow content. ability established reputation its around potential

to premier Our deliver and already and Entertainment Wars business the & has such to top-tier Key, Sci-Fi. [ph] TV Netflix, like demonstrated Earp partners projects develop Apple V Surfside and Locke Girls, Wynonna ability as

on needs go few expenditures is to that Entertainment declined bit to While production still a and shows have only into successful. be enormous shows an TV greenlit market IDW recently, a it addressable is

a have nearly been that optioned and have development of projects are are forward. we various pushing stages dozen that We in

that for continue are first first, mind develop when their our looking to So original home the increase that a IDW’s to industry to are name so content. to we summarize, strategy comes creators talented is: recognition

publish novels and Second, compelling that broad incentive comics audiences. resonate graphic with and

content and into and entertainment move TV other Third, streaming on we with And platforms. our a services, our for can vehicles fourth, published sectors shows where monetize IP new digital further direct-to-consumer. develop focus

is be to content projects throughout work to premium fully our deliver of and well our positioned entire business. lot a done. develop library to exploit IDW is There

long-term media on remain growth opportunities participate few we in that investors focused very television as the way, leading for drive novel, we sectors. and the the are to We to book, seeing the of one are ways, And independent perhaps comic value only a entity. graphic

fulfilling to is potential. IDW’s leadership committed IDW Your team entire

financials of XXXX. over quarter first for call our Brooke I’ll turn to Feinstein, Now, the to the over CFO, go our

Brooke Feinstein

you, where I’ll otherwise, will today XXXX My quarter on be quarter XX, first the months XXXX comparing focus fiscal the results, remarks fiscal indicate three our first I to the Thank quarter XXXX. of first of ended January Allan. XXXX. Except

first decreased revenue compared Media Publishing a year million for first the consolidated prior to fulfillment the market in year quarter. million XX% period, to for strong decreased decrease in the revenue in quarter in games driven due sales $XX.X revenue campaign Adventures ago. due of $X.X quarter prior period, million the to and $X.X to revenue year the IDW by direct $XXX,XXX the prior compared of a decrease $XXX,XXX games primarily Batman of Holdings’ XXXX by year to a of direct-to-consumer

was in and improved rates. the $XXX,XXX by strong exclusive The booked Teenage increase driven This compared Mutant market $XXX,XXX Ronin reduce hardcover an with partially of in revenue accounts offset predominantly Turtles: period Sales retailer to in to to Last an increase incentives related targeted returns prior part Sonic revenue Hedgehog. Ninja of return due the by to

V related the Key which of Entertainment Entertainment in In meaningful to any Season the not division generate generated $X.X & for Wars. full revenue IDW revenue as license did the Locke first of as received from In as well the of first not quarter X included revenue revenue XXXX, French did IDW Canadian million, quarter the projects the XXXX, delivery of deliver quarter. entertainment

of XXXX XXXX. in XXXX $XXX,XXX, loss is IDW to addition to compared quarter from from of in million first quarter in corporate first consolidated Entertainment loss $X increase operating the operations of in of an million quarter and consolidated operating the Consolidated due IDW an operations overhead was non-allocated $X from loss loss Publishing $XXX,XXX. first operating The income to in the from of of $XXX,XXX an of

IDW operations million the Publishing’s from Entertainment’s income prior compared $XXX,XXX to loss year operations the period. in the operations was quarter first was period. the $XXX,XXX from of $XXX,XXX in loss of operations of $X prior compared of income from year from in in to XXXX first XXXX quarter IDW

Consolidated period. net $X.XX share net compared per of the the $X year $X million the in or to quarter prior $X.XX first share or in income per loss was million

million. we and had equivalents cash at Looking at capital, of cash balance $XX.X $X.X XX, current less our and million totaling sheet, January working liabilities assets current XXXX,

expected the with working at sufficient least during our fiscal As the that for we operations our next year. from sustain move inflows through be to XXXX, XX combined operations, months, cash will capital, next anticipate we

That concludes my remarks. Allan?

Allan Grafman

Thank you, Brooke.

you Now, to I back your for questions. Q&A. would Operator, welcome

Operator

Thank Instructions] proceed of Please question the [Operator line with your from you. first EF Our with comes Edward Hutton. question. Reilly

Edward Reilly

you that might Thanks question. remained of measures? look It’s for the inflationary despite just taking flat of rest SG&A Are guys like backdrop. cost-cutting any And year-over-year, for kind what taking the year. wondering my I’m the relatively like

Allan Grafman

to answer that, question. try and the me for let thank So you Ed,

yes. So the answer is,

not have open that filled anticipation cash examples. to few a or give reports breakeven. flow me There two a of becoming we direct positions are in Let journey

take have may have. the yes. measures other and there we but we we, and I be assure is in opportunities Publishing we Entertainment We are at taken effectively the have that don’t want using that changes, that look measures have are impact the have. And the we that expenses to And we week, to every prudent. to adversely of also that say, types would answer resources Digital We in future clearly

we We mindful. we active are are and and ever cognizant are

Edward Reilly

nice And Thanks. it. Got a seems like on opportunity. it digital, Okay. then

for dive the platform? the customer? potential the into be customers you how wondering is to going Just if you’re to maybe driving proposition potential could maybe what value And

Allan Grafman

let answers that me to or three So question. give two

and to That’s days. So end week your was for question. certain, I’m but we it an We going and first, ever, first answer to strategic on site. I ago two first Ed, call conducted the at weeks of the review. of we me plan off-site. our March; February two believe was first go didn’t what ever for It first was partially It conducted,

digital, those we digital And we consider didn’t we near-term over to then came then were we’re our with that and which the not a up are them with ideas. or businesses of think were could those which active company And XX parsed we assigned, profile put currently of intermediate we core then of were higher gave those We addressing. that these initiatives and which long-term. which those good So, in.

So, looking doing, a I we but let previously. at, which can heard actively thing to we that specify you’ve are are that pivot few a second me

on the we recall, have more to we may robust Shopify platform. web will – having be you As and presence we pivoting signed a are

We process, four ever company. something a to anyone’s software developer. pick conversion This first been of joining was weeks that I within momentum. a involved identified weeks to tend in have six you signed If the the up

We be working fans to the May calling – to we of from old the we have which greater will be and X, for system X.X, will system plan Shopify new and plateau, much to plan a to I’m interaction second an we on a migration expect we experience be to which allow much fan a with that a properties have publish. greater a and

those that two are we areas pushing are on. So forward

Edward Reilly

Okay.

you pipeline great. Then and can expectation That year the titles Great. would publishing if the for new throughout Okay. is into maybe be there? what go your

Allan Grafman

So very for SKUs. it’s approximately and this year, robust it’s approximately significant, comics. consist That X,XXX Ed pipeline. publishing X,XXX will It’s of will total be we a a productive

a like so you know specialty comics. those that’s approximately Star are number. say, I Now that as other items, of and X,XXX XXX are approximately understand of They’re I about XXX that covers. of A the Wars very Sonic large comics approximately number and properties. – large variant titles

about original have and XXX graphic collections novels. We

are those of licensed. Some

publisher. end, some are I’ll top those high or those of of original book Some are and say, graphic from shelf

on So an we emphasis ownership original; in on it’s position. are we’ve having And the more a the putting particular than done past.

licenses process to negotiating. have and in of the speak We to more are

had they We’ve a to that a swap we weeks robust keeping important as And ago, And include which for have you them with them advantage recently a we met is we pipeline, is relationship very have and publishing Random a importantly, relationship even. everyone fully amplified of so it two And with distribution broader services. competitive And Penguin a engaged. very while, with heard, and very House selected market. important us. I the a

Edward Reilly

great. it for me. That’s that. Okay, for Thank you

Operator

the from Singular line proceed question. [Operator David Research. Marsh Instructions] with with your Our of comes next question Please

David Marsh

the for everybody. taking questions. Thanks Hi

the I regard nature one that the SG&A. to out like as the go Were forward. in First, charges fall on that of quarter of wanted charges listing or first questions NASDAQ follow-up fees of the or there year, we that might to anything any happened prior quarter non-recurring with SG&A first type in

Allan Grafman

Brooke, can you answer please? that,

Brooke Feinstein

Yes.

I over – mean, York Stock fee the spread New Exchange, So our for do year. the we

So first wouldn’t impact it just the quarter.

numbers. events miscue would the But we certain in Sometimes anything that would there particularly big have this in quarters. quarter, isn’t

David Marsh

titles, the are prior a us think Could versus then Great. comment your of I we how to of give Okay. increase with year? And year-over-year much talking about just you an on that’s regard entitled great news. sense

Allan Grafman

at to me wish I to it So it but would David, my I by had take it can give title, fingertips. you that up. while I add a

not So, at my fingertips. do that I have

David Marsh

Okay. year. more titles Is this Directionally, that it’s statement? meaningfully fair a

Allan Grafman

to certain in be make in answer let you pose try because that us you I’d as happy if – writing to or estimate. we want writing, have the specifics, me to an to respond but Yes, to to question opposed with I it accurately your could

David Marsh

that least Absolutely, titles not side, With are projects give that we current me. year? there close expect like it’s Is genres hear you And for you kind you guys you to to the to to regard of then in have percolating. are feel media guys see reasonably problem. so anything might a with be just lastly great on where to – us the regard many at that might you able

Allan Grafman

So question, give to David, call. on let a me comprehensive I’m it’s because interest try to sure this of answer to that everyone

have that Animation, Amazon, with Television, Universal, have Studios, New optioned Lionsgate AMC Republic, between and like Warner they properties Warner XX are people We BBC. Bros., with and XXth Bros been somewhere Lionsgate, nine

You I’m from can reading tell list. a

come me that people will have these beginning say of people the So And a are that off that. transaction the tire in who and committed hearing process. of call this into engaged is

moved heartened I and the To two question, far specific because can two be been that tell process have the one yes, news days, to along me past we’ve specific, step taken, be have to that in let answer been your I projects next where specific very you has in the can instance.

called Earthdivers. We project have original a project, an

I his it and of announced it and and with into last was and pilot took you Earthdivers, series, partnered the we comic best-selling specifics, to committed Hulu, know, forward author a we get book script. As buyer and can’t year, – XXth some late may moved a but we has Television

So pilot buyer a sometimes, writing always, if will before but could or or go the streamer production. one is into not step a say even determines last network it often,

transaction before, those before, their action. ways. a So will to presented spending to money action have you means them on all that who they’re months in be a script, that will committed they vision allows for heard for can have That this and which IDW’s they of of a to with lead couple

The day. set it rainy they a first aside could is, for

could be rewrite. second to they may The want

commission The we we’re home the and multistep and different process. within news hours, a progress. along. on by third they We could production. it it It’s we’re heartened is know focused go to urgently pilot and projects for don’t a know, this but run on could got XX two never and be, past they pushing We

have. it a questions I hope questions. that’s that more all answer, welcome So long listeners but answers may our the certainly, But

David Marsh

Really Thank That’s appreciate me. answer. guys. That’s a great it. all from you

Operator

Financial Group. Silver the Our Corrado with next Please your Jeff question. line proceed from of comes question with

Jeff Silver

Hello, Allan.

Allan Grafman

Jeff. Hi,

Jeff Silver

an guess, any help perhaps the quarters cash was Is enterprise know raise an us, first or you this the you can environment. you us this burn of maybe the the the flow in cetera, should us environment go out obviously, is want I is whether SG&A wouldn’t the equity price an way to next cash in offshoot because question. that we’re capital word, the have et the $XXX,XXX But kind the the guiding I from given and for stock and Or but be quarter. do and of quarterly help there maybe year? certainly, value, out negative, that the in expect or you operations going three increase to rest sort to neighborhood in, given the to of to of and can So wrong understand guide

talk a So the bit rate? is can quarterly you cash – little about burn

Allan Grafman

more to going We we revenue. let anticipated, in can There is But So third, this couple could can currently are do. not at do raise capital. change. things out cut raise not that which of answer it time Jeff, yes, costs. anticipate me And a can additional we ways. We the three

the cash have us balance now sheet on right We that strategy. execute to allows our

on and focused revenue We’re costs.

not projects. cannot the side, do that on nine this revenue those change. predict. you pushing next as generate meaningful we revenue between will can’t was entertainment the and significant Whether predict side. in during the On that, we when We heard, have or but We there XX fiscal year, for revenue quarter are

that, and are an have On more reviewing costs. on we of control ongoing the basis, side, consistent we our cost

is is get appreciate business, took unpredictable, takes its rewards this life investors to It would I a its many Key, quarter’s almost that. which wildly line point success to wonderful many own. you I’ll steady a time. largely Entertainment When & Locke to straight have it years richly. results. Publishing cyclical, of platform. and So, not success,

point film may you the of also was reported York to six and in of many a out was awards, New where as will in, journey in A-XX, won them be I multibillion-dollar business, XX-year have a they we for are to major something not which I valuation. successful have Times, that that witnessed believe, the it they the

grasp. are within aspirations Our our more

and hopefully that’s, question. So I to hope, complete a your answer again, long

Jeff Silver

to say, about or kind I that What of, would see what the on digital have other one I either we platform? Sure. platform. digital question content expect should

Allan Grafman

a I’m to answer. So, going try give multipronged to I’m to going – give again,

familiar. see should You

something is harder You category, describe. and should there’s which slightly see different, to a third

So the familiar.

of on or our books whether in comixology representations platforms. the we that publish available different You are platforms, it’s should other or those the website see digital print. Currently,

is book. of a representation digital that print So the

So that’s familiar.

industry the would call what I’m what be content. – is would Second calling user-generated

artist that of by robust extracts That’s we’re the modified be So it lot it a area or original a by artist’s attempts, failure and way. of raised, exploring. lot There’s we’re with the could fans. looking user-generated or at money a a modified possibly can the There’s been carefully. be content lot by content of been very permission

And short control, and of third Those motion comics category, which which then property exploring. By comics it process book. or a of that take we would not it, I but of doing the would a the Surfside will videos, we’re there’s we’re in way example, motion call like Girls. put

between would video. look a something book it and So a

in looking. we’re the active Obviously, we’re first. So,

We’re actively exploring second and third. the the

two three. and both actively, judiciously number and door will We number frugally door explore

Jeff Silver

It you. three Thank helpful. or in very platform House in them, – of any That’s digital promising. call well, Penguin of the Random involved is – as platform the you way? any doors sounds the Do – any in in those

Allan Grafman

Let me the yes. break distribution categories. The that One on is side. into two answer is

side, knowledge. with It them not platform to up. met the not On I weeks my come ago. two did

Brooke, So, any confident. my amplification I’m do But of reasonably you answer? have

Brooke Feinstein

Currently, we digital platform stores. comic and direct-to-consumer of direct to not through go just on It’s stuff that of use book the the stores all does physical to physically distribute and market them our kind them.

So would XPL be yes, – digitally, online. But buying if just it own be they’re sorry, would that not online. all system through just XPL, our

Jeff Silver

the Terrific. and to And been have the asked. Thank detail that questions answers you. appreciate all the I helpful. It’s

Allan Grafman

much. Thank you. you Thank so

Operator

queue. Grafman closing over hand There back the to to for Mr. are remarks. no the further like questions I’d in call

Allan Grafman

downs. entire team company time shareholders you we that that history is, rewarded. and very thank is rewarded. can’t you to you I’m can’t We that predict. that focused us. recognize I’m to are So predict that, We ups had of the this delighted that shareholders long-term of and We closing that predict for that, every the joining making lot, is understanding are my took the And came certain case. has are sole can’t hoping making remark call focus much leadership us. and the outer some We join that leave predict is the And a except we effort long-term make market. all certain across really The can

Operator

conclude your today’s Ladies you for this and does gentlemen, participation. Thank teleconference.

have lines a wonderful may day. You time, your this and disconnect at

IDW Media (IDWM) 15 Mar 232023 Q1 Earnings call transcript