Hollywood Media Corp. Reports Third Quarter 2008 Results

Hollywood Media Corp. Reports Third Quarter 2008 Results

BOCA RATON, Fla., Nov. 5 /PRNewswire-FirstCall/ -- Hollywood Media Corp. (NASDAQ:HOLL) , a leading provider of online ticketing services, today reported financial results for the third quarter ended September 30, 2008. Results reflect the divestment of the Company's Hollywood.com business in August 2008 and its Showtimes data business unit in August 2007, which have been accounted for as discontinued operations.

For the 2008 third quarter, Hollywood Media reported net revenues of $25.5 million compared to $26.8 million in the prior-year period. Broadway Ticketing represented 94% of net revenues with the balance attributable primarily to Ad Sales from the Company's U.K.-based CinemasOnline business. The decline in net revenues was mainly due to a decrease of $0.8 million in revenue from the Company's London West End ticketing operation, Theatre.com, and a decrease of $0.3 million in revenue from sales of hotel packages. As previously reported, Theatre.com has transitioned from handling its own sales to an arrangement with a third party ticket agency. As a result, Theatre.com now recognizes an agency commission based on ticket price, which reduces revenue while also lowering operating expenses.

The loss from continuing operations for the third quarter of 2008 was $1.9 million, or $0.06 per share, which includes approximately $0.4 million of non- recurring severance expense following the divestment of the Hollywood.com business and compares to a $1.7 million loss from continuing operations, or $0.05 per share, in the same period last year. Net loss for the 2008 third quarter, which includes a loss from discontinued operations of $4.4 million, was $6.3 million, or $0.20 per share, compared to net income of $8.1 million, or $0.24 per share, in the prior-year period which includes a gain from discontinued operations of $9.8 million.

The Company narrowed its EBITDA (Modified)* loss in the 2008 third quarter to $1.5 million, which, as noted above, includes approximately $0.4 million in severance costs, and compares to an EBITDA (Modified) loss of $1.6 million in last year's third quarter. Broadway.com had EBITDA of $1.1 million in the 2008 third quarter compared to $0.9 million in the corresponding period of 2007.

Mitchell Rubenstein, Chief Executive Officer of Hollywood Media Corp., commented, "Despite a more challenging market environment, we grew sponsorship revenues on Broadway.com from both strategic sponsors as well as the shows themselves. By reducing and realigning staff in the third quarter as a result of the divestitures, we expect nearly $1.5 million in annualized savings. These savings should drive meaningful improvement in EBITDA performance."

"As we move into our busy fourth quarter holiday season, we expect that prevailing economic conditions may impact overall demand for Broadway entertainment. While we are not immune to broader market trends with advanced orders for the fourth quarter off to a slower start, we are anticipating some positive effect in the quarter from new Broadway shows, including the hit show, Billy Elliot, which opens November 15th, and Shrek, based on the popular animated films. We also believe that we have the right ticket inventory levels to meet anticipated demand during the holiday period." Mr. Rubenstein concluded, "We have taken important steps to position our business for long- term performance. With the divestment of our non-core businesses, we are now largely a pure play provider in online ticketing and related services. This concentrated focus should enable us to more aggressively pursue compelling opportunities to accelerate growth while managing costs."

At September 30, 2008, cash and cash equivalents were $14.3 million, compared to $20.9 million at June 30, 2008. The cash position at quarter end reflects the purchase of increased ticketing inventory to meet anticipated demand during the fourth quarter holiday period for Broadway's most popular shows as well as the loss related to the sale of the Hollywood.com business.

Teleconference Information

Management will host a teleconference to discuss Hollywood Media's third quarter 2008 financial results on Wednesday, November 5, 2008, at 10:00 a.m. Eastern Time. To access the teleconference, please dial 888-562-3654 (U.S.) or 973-582-2703 (international) approximately 10 minutes prior to the start of the call. The reference passcode for the call is 71189453. The teleconference will also be available via live Web cast on the investor relations portion of Hollywood Media's Web site, located at http://www.hollywoodmedia.com/conference_calls.htm. Following prepared remarks, management will take questions from the audience via phone and e- mail.

If you are unable to listen to the live teleconference at its scheduled time, a replay will be available through November 24, 2008 and can be accessed by dialing 800-642-1687 or 706-645-9291 (international), passcode 71189453. An archived version of the Web cast will also be available on the investor relations portion of Hollywood Media's Web site at http://www.hollywoodmedia.com/.

About Hollywood Media Corp.

Hollywood Media is a leading provider of online ticketing services, which include Broadway.com and Hollywood Media's minority interest in MovieTickets.com. Hollywood Media also owns the UK-based CinemasOnline and its Intellectual Property division. For more information, please visit the Company's corporate Web site, http://www.hollywoodmedia.com/.

*Note on EBITDA

EBITDA and EBITDA (Modified) are non-GAAP financial measures. EBITDA is defined as net income before interest, taxes, depreciation and amortization. EBITDA (Modified) is defined as loss from continuing operations before interest, taxes, depreciation and amortization on continuing operations. Hollywood Media has presented EBITDA in this release because it considers such information an important supplemental measure which management utilizes as one of its tools in evaluating performance and believes it is frequently used by securities analysts, investors and other interested parties in the evaluation and comparison of companies in our industry as well as our results of operations from period to period. EBITDA has limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for Hollywood Media's financial results as reported under GAAP. Some of these limitations are: (a) EBITDA does not reflect changes in, or cash requirements for, Hollywood Media's working capital needs; (b) EBITDA does not reflect interest expense, or the cash requirements necessary to service interest or principal payments, if any; and (c) although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and EBITDA does not reflect any cash requirements for such capital expenditures. Because of these limitations, EBITDA should not be considered as a principal indicator of Hollywood Media's performance. Hollywood Media compensates for these limitations by relying primarily on Hollywood Media's GAAP results and using EBITDA only supplementally. Hollywood Media has provided a reconciliation of net income to EBITDA (Modified) in the attached tables.

Note on Forward-Looking Statements

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, cost efficiencies and sources of capital, the impact of potential future dispositions or other strategic transactions by Hollywood Media, our ability to develop and maintain 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 2007. Such forward-looking statements speak only as of the date on which they are made, and Hollywood Media undertakes no obligation to publicly update or revise any forward-looking statement except as required by law.

   Attached are the following financial tables:    CONSOLIDATED BALANCE SHEETS   CONSOLIDATED STATEMENTS OF OPERATIONS   SEGMENT SUMMARY FINANCIAL DATA AND EBITDA RECONCILIATION                       HOLLYWOOD MEDIA CORP. AND SUBSIDIARIES                     CONDENSED CONSOLIDATED BALANCE SHEETS                                              September 30,      December 31,                                                2008               2007                                             (unaudited)                  ASSETS   CURRENT ASSETS:    Cash and cash equivalents                 $14,279,571       $26,758,550    Receivables, net                            1,505,820         2,033,702    Inventories held for sale                   7,810,684         3,950,578    Deferred ticket costs                      12,910,215        16,481,861    Prepaid expenses                            1,531,855         2,167,109    Other receivables                           1,524,644         3,877,167    Other current assets                          217,682           629,298    Restricted cash                             2,600,000                 -    Current assets of discontinued     operations                                         -         1,124,714      Total current assets                     42,380,471        57,022,979    PROPERTY AND EQUIPMENT, net                  4,505,758         4,486,620   INVESTMENTS IN AND ADVANCES TO    UNCONSOLIDATED INVESTEES                      285,353           286,985   INTANGIBLE ASSETS, net                       1,104,227         1,071,658   GOODWILL                                    28,915,993        29,343,440   OTHER ASSETS                                    44,710            54,993   LONG-TERM ASSETS OF DISCONTINUED    OPERATIONS                                          -         1,712,161      TOTAL ASSETS                            $77,236,512       $93,978,836     LIABILITIES AND SHAREHOLDERS' EQUITY    CURRENT LIABILITIES:    Accounts payable                           $1,375,013        $3,380,403    Accrued expenses and other                  3,918,585         4,403,088    Deferred revenue                           19,231,341        24,235,125    Customer deposits                           1,460,651         1,928,357    Current portion of capital lease     obligations                                  160,696           141,809    Current portion of notes payable               54,161            53,422    Related party payable                       3,079,119                 -    Current liabilities of discontinued     operations                                         -         2,719,289      Total current liabilities                29,279,566        36,861,493    DEFERRED REVENUE                               513,213           544,491   CAPITAL LEASE OBLIGATIONS, less    current portion                               158,831           255,971   OTHER DEFERRED LIABILITY                       875,695           616,413   NOTES PAYABLE, less current portion             59,054            94,289   LONG-TERM LIABILITIES OF DISCONTINUED    OPERATIONS                                          -             5,776    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;     32,095,552 and 31,897,983 shares     issued and outstanding at September     30, 2008 and December 31, 2007,     respectively                                 320,956           318,980    Additional paid-in capital                311,101,304       310,120,531    Accumulated deficit                      (265,072,107)     (254,839,108)      Total shareholders' equity               46,350,153        55,600,403      TOTAL LIABILITIES AND       SHAREHOLDERS' EQUITY                   $77,236,512       $93,978,836                        HOLLYWOOD MEDIA CORP. AND SUBSIDIARIES                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS                                  (Unaudited)                               NINE MONTHS ENDED        THREE MONTHS ENDED                                 SEPTEMBER 30,            SEPTEMBER 30,                             2008         2007         2008         2007    NET REVENUES       Ticketing          $83,044,397  $83,930,445  $23,981,802  $25,079,163       Other                4,995,369    4,639,588    1,540,980    1,678,807                           88,039,766   88,570,033   25,522,782   26,757,970     OPERATING COSTS AND    EXPENSES       Cost of revenues        - ticketing        69,416,062   71,098,696   19,633,194   20,585,142       Editorial,        production,        development and        technology        (exclusive of        depreciation        and amortization        shown separately        below)              2,685,058    2,584,715      783,695      915,921       Selling, general        and administrative        (exclusive of        depreciation and        amortization        shown separately        below)             10,098,009   10,348,169    3,143,408    3,410,662       Payroll and        benefits           10,249,690   10,157,783    3,475,737    3,444,605       Depreciation and        amortization        1,451,359    1,014,422      466,093      358,641            Total            operating            costs and            expenses       93,900,178   95,203,785   27,502,127   28,714,971            Loss from            operations     (5,860,412)  (6,633,752)  (1,979,345)  (1,957,001)    EQUITY IN EARNINGS    (LOSSES) OF    UNCONSOLIDATED    INVESTEES               1,312,622        2,061       (4,891)       1,186    OTHER INCOME    (EXPENSE)       Interest, net          392,104      (87,458)      91,771      232,163       Other, net             (40,273)      62,033       (6,691)      21,076             Loss from             continuing             operations             before             minority             interest      (4,195,959)  (6,657,116)  (1,899,156)  (1,702,576)    MINORITY INTEREST IN    INCOME OF    SUBSIDIARIES              (97,573)     (21,488)     (31,751)     (21,106)             Loss from             continuing             operations    (4,293,532)  (6,678,604)  (1,930,907)  (1,723,682)             Gain (loss)             on sale of             discontinued             operations,             net of income             taxes         (4,303,717)   9,953,105   (4,303,717)   9,953,105            Income (loss)             from             discontinued             operations    (1,635,750)     319,315     (114,975)    (133,481)            Income             (loss) from             discontinued             operations    (5,939,467)  10,272,420   (4,418,692)   9,819,624              Net Income             (Loss)      $(10,232,999)  $3,593,816  $(6,349,599)  $8,095,942     Basic and diluted     income (loss) per     common share            Continuing             operations        $(0.13)      $(0.20)      $(0.06)      $(0.05)            Discontinued             operations         (0.19)        0.31        (0.14)        0.29            Total basic             and diluted             net income             (loss) per             share             $(0.32)       $0.11       $(0.20)       $0.24    Weighted average    common and common    equivalent shares    outstanding -    basic and diluted      31,971,997   33,439,931   32,095,554   33,613,357                                Hollywood Media Corp.            Segment Summary Financial Data and EBITDA Reconciliation    For the Nine Months Ended September 30, 2008   (unaudited)                                          Broadway        Ad     Intellectual                                         Ticketing     Sales(1)   Properties    Net Revenues                          $83,044,397  $3,959,304  $1,036,065    Operating Income (Loss)                 2,338,563    (317,053)    211,100    Net Income (Loss) from continuing    operations                             2,396,545    (295,810)    109,058      Add back (Income) Expense:          Interest, net                       (66,280)      9,865      (3,239)         Taxes                                   -       (17,418)          7         Depreciation and Amortization       657,295     463,879          75    EBITDA Income (Loss) from continuing    operations                            $2,987,560    $160,516    $105,901                                                   Other(2)           Total    Net Revenues                                        $-       $88,039,766    Operating Income (Loss)                     (8,093,022)       (5,860,412)    Net Income (Loss) from continuing    operations                                 (6,503,325)       (4,293,532)      Add back (Income) Expense:          Interest, net                           (332,450)         (392,104)         Taxes                                     59,809            42,398         Depreciation and Amortization            330,110         1,451,359    EBITDA Income (Loss) from continuing    operations                                $(6,445,856)      $(3,191,879)       For the Nine Months Ended September 30, 2007   (unaudited)                                           Broadway       Ad     Intellectual                                          Ticketing     Sales(1)   Properties    Net Revenues                            $83,930,445  $3,842,545  $797,043    Operating Income (Loss)                   1,808,754    (415,739)   41,351    Net Income (Loss) from continuing    operations                               1,831,281    (361,124)   29,057      Add back (Income) Expense:          Interest                              (48,417)      3,309    (7,133)         Taxes                                  (7,400)    (55,889)      -         Depreciation and Amortization         266,151     394,549       -    EBITDA Income (Loss) from continuing    operations                              $2,041,615    $(19,155)  $21,924                                                    Other(2)          Total    Net Revenues                                        $-       $88,570,033    Operating Income (Loss)                     (8,068,118)       (6,633,752)    Net Income (Loss) from continuing    operations                                 (8,177,818)       (6,678,604)      Add back (Income) Expense:          Interest                                 139,699            87,458         Taxes                                        735           (62,554)         Depreciation and Amortization            353,722         1,014,422    EBITDA Income (Loss) from continuing    operations                                $(7,683,662)      $(5,639,278)      For the Three Months Ended September 30, 2008   (unaudited)                                             Broadway       Ad    Intellectual                                            Ticketing    Sales(1)  Properties    Net Revenues                            $23,981,802  $1,246,955  $294,025    Operating Income (Loss)                     858,702     (86,482)   67,879    Net Income (Loss) from continuing    operations                                 870,867     (94,489)   32,315      Add back (Income) Expense:          Interest, net                         (10,759)      1,889    (1,085)         Taxes                                     -         2,189         7         Depreciation and Amortization         197,775     152,222        75    EBITDA Income (Loss) from continuing    operations                              $1,057,883     $61,811   $31,312                                                    Other(2)          Total    Net Revenues                                        $-       $25,522,782    Operating Income (Loss)                     (2,819,444)       (1,979,345)    Net Income (Loss) from continuing    operations                                 (2,739,600)       (1,930,907)      Add back (Income) Expense:          Interest, net                            (81,816)          (91,771)         Taxes                                      7,809            10,005         Depreciation and Amortization            116,021           466,093    EBITDA Income (Loss) from continuing    operations                                $(2,697,586)      $(1,546,580)      For the Three Months Ended September 30, 2007   (unaudited)                                             Broadway       Ad    Intellectual                                            Ticketing    Sales(1)  Properties    Net Revenues                            $25,079,163  $1,360,457  $318,350    Operating Income (Loss)                     857,000    (210,599)   41,472    Net Income (Loss) from continuing    operations                                 866,935    (190,313)   23,728      Add back (Income) Expense:          Interest                              (28,073)      3,419    (2,176)         Taxes                                     -       (22,061)      -         Depreciation and Amortization          96,747     140,168       -    EBITDA Income (Loss) from continuing    operations                                $935,609    $(68,787)  $21,552                                                   Other(2)           Total    Net Revenues                                        $-       $26,757,970    Operating Income (Loss)                     (2,644,874)       (1,957,001)    Net Income (Loss) from continuing    operations                                 (2,424,032)       (1,723,682)      Add back (Income) Expense:          Interest                                (205,333)         (232,163)         Taxes                                        -             (22,061)         Depreciation and Amortization            121,726           358,641    EBITDA Income (Loss) from continuing    operations                                $(2,507,639)      $(1,619,265)      (1)  The Ad Sales segment includes advertising sales by CinemasOnline.    (2)  The Other segment is comprised of payroll and benefits for corporate        and administrative personnel as well as other corporate-wide expenses        such as audit fees, proxy costs, insurance, centralized information        technology, and includes consulting fees and other fees and costs        relating to compliance with the provisions of the Sarbanes-Oxley Act        of 2002 that require Hollywood Media and its Independent Registered        Public Accounting Firm to make an assessment of and report on        internal control over financial reporting.  

First Call Analyst:
FCMN Contact:

Source: Hollywood Media Corp.

CONTACT: Investor Relations Department, Hollywood Media Corp.,
L. Melheim, +1-561-998-8000, ir@hollywoodmedia.com

Web site: http://www.hollywoodmedia.com/

Company News On-Call: http://www.prnewswire.com/comp/094769.html

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