IDW Reports Third Quarter Fiscal Year 2020 Results

Rhea-AI Summary

IDW Media Holdings (OTC PINK:IDWM) reported a net loss of $(0.47) per share on revenue of $8.5 million for Q3 2020, marking a year-over-year revenue increase from $5.4 million. The publishing segment showed revenue growth driven by the airing of Wynonna Earp's fourth season, despite operational challenges during the COVID-19 pandemic. Total cash decreased to $12.5 million, and working capital fell to $15.1 million. Losses in operations were noted, particularly in IDW Entertainment, as direct market volumes recover slowly post-pandemic.

Positive

• Year-over-year revenue increase of $3.1 million, fueled by Wynonna Earp's season 4 airing.
• Improvement in IDW Publishing operations for the second consecutive quarter.

Negative

• Net loss of $(4.5) million, reflecting challenges in the entertainment segment.
• Working capital decreased from $18.7 million to $15.1 million.
• Loss from operations increased to $(3.4) million, primarily due to COVID-19 disruptions.

Publishing Overcomes COVID-19 Challenges to Deliver Solid Operational and Financial Results
First Half of Wynonna Earp's Season 4 Airs on SYFY - Drives Year Over Year Revenue Increase

NEWARK, NJ and LOS ANGELES, CA / ACCESSWIRE / September 14, 2020 / IDW Media Holdings, Inc. (OTC PINK:IDWM), an integrated media company, today reported a third quarter net loss per share of $(0.47) on revenue of $8.5 million for the three months ended July 31, 2020.

Operational Highlights

• SYFY has aired the first half of season four of IDW's live-action series Wynonna Earp. The balance of production - episodes 7-12 - resumed after a COVID-19 driven delay.
• IDW and its Top Shelf imprint were again honored with multiple Will Eisner Comic Industry Awards in 2020. ‘They Called Us Enemy' by George Takei, Justin Eisinger, Steven Scott, and Harmony Becker was named the "Best Reality-Based Work." Stan Sakai was named "Best Letterer" for his work on the monthly full-color Usagi Yojimbo comic book series published by IDW. Sakai's ‘Usagi Yojimbo: Grasscutter Artist Select,' a hardcover collection edited by IDW's Scott Dunbier, was named "Best Archival Collection/Project - Comic Books."
• IDW and Top Shelf were nominated for three Ignatz Awards, which recognizes exceptional works that challenge popular notions of what comics can achieve.
• IDW's publishing operations welcomed the resumption of direct market distribution early in the third quarter. Subsequent sales have gradually strengthened, augmented by robust sales through the library, digital comic, and book markets as well as web store and foreign sales.
• The sale of CTM, IDW's tourism-focused brochure distribution and marketing company, is pending lender and SBA approval related to its PPP loans.

Comments of Ezra Rosensaft, Chief Executive Officer

"First and foremost, a big thank you to my IDW colleagues across the Company for their extraordinary work and dedication. Thanks to them, IDW overcame the challenges of the COVID-19 pandemic to put together a solid quarter with minimal disruption to our customers and partners.

"In the third quarter, IDW's publishing operations continued to be impacted by the closure of many comic shops and our direct market distributor, Diamond, in the spring. On May 20th, Diamond resumed operations on a limited basis. However, direct market volumes have not yet recovered to pre-pandemic levels.

"Our publishing team, to its great credit, pivoted quickly… aggressively and successfully pursuing sales through the indirect market and direct-to-consumer channels. Sales of popular backlisted titles - including the late Congressman John Lewis' ‘March' trilogy, Alan Roberts' ‘Beauty of Horror' coloring books, ‘Teenage Mutant Ninja Turtles' titles and Joe Hill's and Gabriel Rodriquez's ‘Locke & Key' titles - were particularly strong. The latter have benefitted enormously from the success of season one of the eponymous Netflix series.

"We expect further improvement in the coming quarters as we secure better economics from our licensing deals while building our IP library to align with our entertainment division's development priorities. And I am very excited about the management team we have put in place to execute on those priorities.

"At IDW Entertainment, the first six episodes of Wynonna Earp season 4 have now aired on SYFY. Production of the second half of the season - delayed by COVID-19 - has resumed. The start of production of Locke & Key's season 2, which was ordered by Netflix this spring following the success of season one, is planned for later this month.

"At the corporate level, we continue to move forward toward re-registration with the SEC and will then seek a national exchange listing to increase IDW's visibility and liquidity in the capital markets.

"Wrapping up, I want to thank Howard Jonas and IDW's Board of Directors for entrusting me with the CEO position. It's a great honor to lead our talented team and I look forward to working with them to fulfill IDW's promise and potential."

Consolidated P&L Highlights
(Numbers may not foot due to rounding)

(in millions, except net loss per share, unaudited)		3Q20		2Q20		3Q19
Revenue		$8.5		$9.3		$5.4
Direct cost of revenue		$8.1		$3.3		$3.3
SG&A including non-cash compensation		$3.7		$4.6		$4.0
Non-cash compensation		$0.5		$0.2		$0.6
Depreciation & amortization		$0.1		$0.1		$0.1
(Loss) income from continuing operations		$(3.4)		$1.3		$(2.0)
(Loss) income from discontinued operations		$(1.1)		$(1.6)		$0.5
Net loss		$(4.5)		$(0.4)		$(1.5)
Net loss per share		$(0.47)		$(0.04)		$(0.20)

Segment P&L Highlights
(Does not include corporate overhead.)

(in millions, unaudited)		3Q20		2Q20		3Q19
Revenue
IDW Publishing		$5.2		$4.7		$5.3
IDW Entertainment		$3.3		$4.6		-
CTM*		NA		NA		NA
Income (loss) from operations*
IDW Publishing		-		$(0.6)		$(1.2)
IDW Entertainment		$(3.2)		$2.2		$(0.8)
CTM - ((Loss) income from discontinued operations)*		$(1.1)		$(1.6)		$0.5

*CTM's results are reported as ‘Net (loss) income from discontinued operations' in the third quarter fiscal 2020 and all prior periods presented.

Financial Take-Aways

• Revenue: The year over year increase in consolidated revenue reflected delivery of the first five episodes of Wynonna Earp's season four (S4) and an increase in accruals for certain tax credits.
• Loss from Operations: IDW Publishing generated year over year improvement for the second consecutive quarter despite the challenges related to COVID-19. The year over year increase in IDW's consolidated loss from operations resulted from production expenses realized upon delivery of the first five Wynonna Earp S4 episodes and reversal of certain accruals partially offset by the improved results from IDW Publishing.
• Balance Sheet Highlights: At July 31^st, IDW's cash balance decreased to $12.5 million from $14.7 million at April 30^th. Working capital (current assets less current liabilities) decreased to $15.1 million from $18.7 million over the same period.
• CTM Media: Results from CTM Media were reported as a net loss from discontinued operations of $1.1 million in 3Q20 compared to net income from discontinued operations of $474 thousand in 3Q19.

Earnings Conference Call
IDW's management will host an earnings conference call beginning at 5:00 PM Eastern 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 1-877-705-6003 (toll free - U.S.) or 1-201-493-6725 (toll - international) and request the ‘IDW Media call.'

A replay of the conference call can be accessed beginning approximately three hours after the call concludes through September 21, 2020 by dialing 1-844-512-2921 (toll free - U.S.) or 1-412-317-6671 (toll - international) and providing this replay PIN number: 13708399. A replay will also be available via streaming audio through the IDW investor relations website.

About IDW
IDW Media Holdings, Inc. (OTC PINK:IDWM) is an integrated media company. IDW's businesses include IDW Publishing - a leading publisher of comic books and graphic novels, IDW Entertainment - a producer and distributor of franchise content through television and other media, and CTM Media Group - one of North America's largest distributors of information for tourists and travelers.

Investor Contact
IDW Media Investor Relations
investor.relations@idwmh.com

IDW MEDIA HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except per share data) (unaudited)		July 31, 2020				October 31, 2019
Assets
Current assets:
Cash and cash equivalents		$	12,488			$	7,543
Trade accounts receivable, net			28,354				43,462
Taxes receivable			513				-
Inventory			3,724				3,313
Prepaid expenses			1,449				1,319
Current assets held for sale from discontinued operations			12,635				5,186
Total current assets			59,163				60,823
Property and equipment, net			434				562
Right-of-use assets, net			884				-
Non-current assets
Taxes receivable			-				513
Investments			25
Intangible assets, net			63				115
Goodwill			199				199
Television costs			3,300				9,388
Other assets			633				372
Non-current assets held for sale from discontinued operations			-				5,165
Total assets		$	64,701			$	77,137
Liabilities and stockholders' equity
Current liabilities:
Trade accounts payable		$	786			$	2,145
Accrued expenses			5,452				3,036
Deferred revenue			1,915				1,058
Bank loans payable - current portion			21,037				29,242
Related party loans payable - current portion			-				4,550
Government loans- current portion			592				-
Operating lease obligations - current portion			541				-
Other current liabilities			33				2,007
Current liabilities held for sale from discontinued operations			9,526				3,344
Total current liabilities			39,882				45,382
Non-current liabilities
Operating lease obligations - long term portion			520				-
Bank loans payable - long term portion			-				10,500
Government loans - long term portion			603				-
Related party loans payable - long term portion			3,750				4,500
Non-current liabilities held for sale from discontinued operations			-				683
Total non-current liabilities			4,873				15,683
Total liabilities		$	44,755			$	61,065
Stockholders' equity (see note 3):
Preferred stock, $.01 par value; authorized shares - 500; no shares issued at July 31, 2020 and October 31, 2019			-				-
Class B common stock, $0.01 par value; authorized shares - 12,000; 9,927 and 7,419 shares issued and 9,407 and 6,899 shares outstanding at July 31, 2020 and October 31, 2019, respectively			93				74
Class C common stock, $0.01 par value; authorized shares - 2,500; 545 shares issued and outstanding at July 31, 2020 and October 31, 2019			5				5
Stock subscription receivable			-				(1,000	)
Additional paid-in capital			111,145				96,671
Accumulated other comprehensive loss			(129)				(60	)
Accumulated deficit			(89,972)				(78,457	)
Treasury stock, at cost, consisting of 519 shares of Class B common stock at July 31, 2020 and October 31, 2019			(1,196)				(1,196	)
Total IDW Media Holdings Inc. stockholders' equity			19,946				16,037
Non-controlling interest			-				35
Total stockholders' equity			19,946				16,072
Total liabilities and stockholders' equity		$	64,701			$	77,137

IDW MEDIA HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

		Three Months Ended July 31,								Nine Months Ended July 31,
(in thousands, except per share data)		2020				2019				2020				2019
Revenues		$	8,487			$	5,373			$	28,093			$	14,456
Costs and expenses:
Direct cost of revenues			8,093				3,299				23,004				8,998
Selling, general and administrative			3,742				3,999				12,761				12,280
Depreciation and amortization			61				72				190				217
Bad debt expense			-				-				-				33
Total costs and expenses			11,896				7,370				35,955				21,528
Loss from operations			(3,409)				(1,997	)			(7,862)				(7,072	)
Interest expense, net			(13)				(1	)			(33)				(160	)
Other income (expense), net			-				12				(61)				1
Loss before income taxes			(3,422)				(1,986	)			(7,956)				(7,231	)
(Provision for) benefit from income taxes			-				-				-				-
Net loss from continuing operations			(3,422)				(1,986	)			(7,956)				(7,231	)
(Loss) income from discontinued operations, net			(1,126)				474				(3,818)				(2,120	)
Net loss			(4,548)				(1,512	)			(11,774)				(9,351	)
Net income attributable to non-controlling interests			-				28				-				28
Net loss attributable to IDW Media Holdings, Inc		$	(4,548)			$	(1,484	)		$	(11,774)			$	(9,323	)
Basic and diluted income (loss) per shar

FAQ

What were IDW Media Holdings' Q3 2020 revenue and net loss figures?

IDW Media Holdings reported Q3 2020 revenue of $8.5 million and a net loss of $(4.5) million.

How did the COVID-19 pandemic affect IDW Media Holdings' operations in Q3 2020?

The COVID-19 pandemic resulted in operational challenges, impacting direct market volumes and contributing to increased operational losses.

What is IDW Media Holdings' outlook following the Q3 2020 results?

IDW expects improvement as it secures better licensing economics and builds its IP library.

How did Wynonna Earp's fourth season impact IDW Media Holdings' financial results?

The airing of Wynonna Earp's season 4 contributed to a year-over-year revenue increase of $3.1 million for IDW.

What is the current cash position of IDW Media Holdings?

As of July 31, 2020, IDW Media Holdings reported a cash balance of $12.5 million, down from $14.7 million at the end of Q2.