EX-99.2 5 g09255exv99w2.htm EX-99.2 UNAUDITED PRO FORMA FINANCIAL INFORMATION EX-99.2 Unaudited Pro Forma Financial Information
 

EXHIBIT 99.2
Hollywood Media Corp.
Pro Forma Financial Information
(Unaudited)
Introduction
On August 24, 2007, Hollywood Media Corp. (the “Company”) entered into and simultaneously closed on a definitive asset purchase agreement with West World Media LLC (“WWM”), pursuant to which Hollywood Media sold to WWM substantially all of the assets of its wholly-owned subsidiary, Showtimes.com, Inc. (“Source”), for a cash purchase price of $23,000,000, subject to a potential post-closing adjustment. The following Unaudited Pro Forma Condensed Consolidated Financial Statements have been prepared to illustrate the effect of the sale of substantially all of the assets of Source, as a discontinued operation, on the historical financial position and results of operations of the Company.
The Unaudited Pro Forma Condensed Consolidated Statements of Operations for the six months ended June 30, 2006 and 2007, and for the years ended December 31, 2004, 2005 and 2006, reflect the sale of assets of Source that occurred on August 24, 2007, as if the sale had occurred as of as of January 1 of each such year. The Unaudited Pro Forma Condensed Consolidated Balance Sheet as of June 30, 2007 reflects the sale of assets of Source as if the sale occurred on June 30, 2007.
The Unaudited Pro Forma Condensed Consolidated Financial Statements are based upon available information and assumptions that the Company believes are reasonable under the circumstances. The Unaudited Pro Forma Condensed Consolidated Financial Statements have been provided for information purposes and are not necessarily indicative of the financial condition or results of operations that would have been achieved had the sale of assets of Source occurred on the date indicated. Assumptions underlying the pro forma adjustments are described in the accompanying notes, which should be read in conjunction with the Unaudited Pro Forma Condensed Consolidated Financial Statements. The Unaudited Pro Forma Condensed Consolidated Financial Statements, including the notes thereto, should be read in conjunction with the historical financial statements of the Company included in its Quarterly Report on Form 10-Q for the period ended June 30, 2007, and its Annual Report on Form 10-K for the year ended December 31, 2006.

 

HOLLYWOOD MEDIA CORP. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Six Months ended June 30, 2007
(Unaudited)
                         
    Historical     Sale of     Pro Forma  
    Hollywood Media Corp.(9)     Source(6)     Hollywood Media Corp.  
NET REVENUES
                        
Ticketing
   $ 58,784,512     $ —     $ 58,784,512  
Other
     9,141,780       (3,288,016 )     5,853,764  
 
                  
 
     67,926,292       (3,288,016 )     64,638,276  
 
                  
 
                        
OPERATING COSTS AND EXPENSES:
                        
Cost of revenues — ticketing
     50,176,228       —       50,176,228  
Editorial, production, development and technology (exclusive of depreciation and amortization shown separately below)
     3,993,379       (986,415 )     3,006,964  
Selling, general and administrative
     8,168,931       (374,620 )     7,794,311  
Payroll and benefits
     8,823,247       (748,722 )     8,074,525  
Depreciation and amortization
     945,314       (87,868 )     857,446  
 
                  
 
                        
Total operating costs and expenses
     72,107,099       (2,197,625 )     69,909,474  
 
                  
 
                        
Income (loss) from operations
     (4,180,807 )     1,090,391       (5,271,198 )
 
                        
EQUITY IN EARNINGS OF UNCONSOLIDATED INVESTEES
     875       —       875  
 
                        
OTHER INCOME (EXPENSE)
                        
 
                        
Interest, net
     (320,286 )     665       (319,621 )
Other, net
     (1,526 )     40,788       39,262  
 
                  
Income (loss) before minority interest
     (4,501,744 )     1,048,938       (5,550,682 )
 
                        
MINORITY INTEREST IN (INCOME) OF SUBSIDIARIES
     (382 )     —       (382 )
 
                  
Net income (loss)
   $ (4,502,126 )   $ 1,048,938     $ (5,551,064 )
 
                  
 
                        
Basic and diluted income (loss) per common share
   $ (0.13 )           $ (0.17 )
 
                    
 
                        
Weighted average common and common equivalent shares outstanding — basic and diluted
     33,351,780               33,351,780  
 
                    
See accompanying notes to unaudited pro forma condensed consolidated financial statements.

2

 

HOLLYWOOD MEDIA CORP. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Six Months ended June 30, 2006
(Unaudited)
                         
    Historical     Sale of     Pro Forma  
    Hollywood Media Corp.(9)     Source(6)     Hollywood Media Corp.  
NET REVENUES
                        
Ticketing
   $ 45,436,255     $ —     $ 45,436,255  
Other
     8,673,661       (3,113,598 )     5,560,063  
 
                  
 
     54,109,916       (3,113,598 )     50,996,318  
 
                  
 
                        
OPERATING COSTS AND EXPENSES:
                        
Cost of revenues — ticketing
     37,924,753       —       37,924,753  
Editorial, production, development and technology (exclusive of depreciation and amortization shown separately below)
     3,360,059       (899,083 )     2,460,976  
Selling, general and administrative
     7,278,119       (350,263 )     6,927,856  
Payroll and benefits
     7,856,577       (693,043 )     7,163,534  
Depreciation and amortization
     1,011,488       (87,246 )     924,242  
 
                  
 
                        
Total operating costs and expenses
     57,430,996       (2,029,635 )     55,401,361  
 
                  
 
                        
Income (loss) from operations
     (3,321,080 )     1,083,963       (4,405,043 )
 
                        
EQUITY IN EARNINGS OF UNCONSOLIDATED INVESTEES
     (1,768 )     —       (1,768 )
 
                        
OTHER INCOME (EXPENSE)
                        
 
                        
Interest, net
     (1,183,962 )     168       (1,183,794 )
Change in derivative liability
     344,000       —       344,000  
Other, net
     (82,734 )     250       (82,484 )
 
                  
Income (loss) before minority interest and discontinued operations
     (4,245,544 )     1,083,545       (5,329,089 )
 
                        
MINORITY INTEREST IN (INCOME) OF SUBSIDIARIES
     30,256       —       30,256  
 
                  
 
                        
Income (loss) from continuing operations
     (4,215,288 )     1,083,545       (5,298,833 )
 
                        
Income from discontinued operations
     474,870       —       474,870  
 
                  
 
                        
Net income (loss)
   $ (3,740,418 )   $ 1,083,545     $ (4,823,963 )
 
                  
 
                        
Basic and diluted income (loss) per common share
                        
Continuing operations
   $ (0.13 )           $ (0.16 )
Discontinued operations
     0.01               0.01  
 
                    
Total basic and diluted net income (loss) per share
   $ (0.12 )           $ (0.15 )
 
                    
 
                        
Weighted average common and common equivalent shares outstanding — basic and diluted
     32,480,256               32,480,256  
 
                    
See accompanying notes to unaudited pro forma condensed consolidated financial statements.

3

 

HOLLYWOOD MEDIA CORP. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Year ended December 31, 2006
(Unaudited)
                         
    Historical     Sale of     Pro Forma  
    Hollywood Media Corp.(5)     Source(6)     Hollywood Media Corp.  
NET REVENUES
                        
Ticketing
   $ 98,102,961     $ —     $ 98,102,961  
Data
     6,478,478       (6,478,478 )     —  
Other
     11,314,021       —       11,314,021  
 
                  
 
     115,895,460       (6,478,478 )     109,416,982  
 
                  
 
                        
OPERATING COSTS AND EXPENSES:
                        
Cost of revenues — ticketing
     81,928,952       —       81,928,952  
Editorial, production, development and technology (exclusive of depreciation and amortization shown separately below)
     7,204,546       (1,873,048 )     5,331,498  
Selling, general and administrative
     15,589,131       (704,863 )     14,884,268  
Payroll and benefits
     15,600,177       (1,482,798 )     14,117,379  
Depreciation and amortization
     1,879,405       (176,978 )     1,702,427  
 
                  
 
                        
Total operating costs and expenses
     122,202,211       (4,237,687 )     117,964,524  
 
                  
 
                        
Income (loss) from operations
     (6,306,751 )     2,240,791       (8,547,542 )
 
                        
EQUITY IN EARNINGS OF UNCONSOLIDATED INVESTEES
     12,227       —       12,227  
 
                        
OTHER INCOME (EXPENSE)
                        
 
                        
Interest, net
     (1,788,241 )     506       (1,787,735 )
Change in derivative liability
     640,536       —       640,536  
Other, net
     1,025       2,885       3,910  
 
                  
 
                        
Income (loss) before minority interest and discontinued operations
     (7,441,204 )     2,237,400       (9,678,604 )
 
                        
MINORITY INTEREST IN LOSSES OF SUBSIDIARIES
     4,910       —       4,910  
 
                  
 
                        
Income (loss) from continuing operations
     (7,436,294 )     2,237,400       (9,673,694 )
 
                        
Gain on sale of discontinued operations, net of income taxes of $524,265
     16,328,241       —       16,328,241  
Income from discontinued operations
     630,566       —       630,566  
 
                  
 
                        
Income from discontinued operations
     16,958,807       —       16,958,807  
 
                  
 
                        
Net income
   $ 9,522,513     $ 2,237,400     $ 7,285,113  
 
                  
 
                        
Basic and diluted income (loss) per common share
                        
Continuing operations
   $ (0.23 )           $ (0.30 )
Discontinued operations
     0.52               0.52  
 
                    
Total basic and diluted net income (loss) per share
   $ 0.29             $ 0.22  
 
                    
 
                        
Weighted average common and common equivalent shares outstanding — basic and diluted
     32,761,848               32,761,848  
 
                    
See accompanying notes to unaudited pro forma condensed consolidated financial statements.

4

 

HOLLYWOOD MEDIA CORP. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Year ended December 31, 2005
(Unaudited)
                         
    Historical     Sale of     Pro Forma  
    Hollywood Media Corp.(5)     Source(6)     Hollywood Media Corp.  
NET REVENUES
                        
Ticketing
   $ 78,890,718     $ —     $ 78,890,718  
Data
     5,359,222       (5,359,222 )     —  
Other
     6,105,090       —       6,105,090  
 
                  
 
     90,355,030       (5,359,222 )     84,995,808  
 
                  
 
                        
OPERATING COSTS AND EXPENSES:
                        
Cost of revenues — ticketing
     67,515,534       —       67,515,534  
Editorial, production, development and technology (exclusive of depreciation and amortization shown separately below)
     4,779,185       (1,788,094 )     2,991,091  
Selling, general and administrative
     11,452,679       (634,591 )     10,818,088  
Payroll and benefits
     14,688,004       (1,101,018 )     13,586,986  
Depreciation and amortization
     1,468,334       (199,188 )     1,269,146  
 
                  
 
                        
Total operating costs and expenses
     99,903,736       (3,722,891 )     96,180,845  
 
                  
 
                        
Income (loss) from operations
     (9,548,706 )     1,636,331       (11,185,037 )
 
                        
EQUITY IN EARNINGS OF UNCONSOLIDATED INVESTEES
     533,228       —       533,228  
 
                        
OTHER INCOME (EXPENSE)
                        
 
                        
Interest, net
     (546,171 )     574       (545,597 )
Change in derivative liability
     87,037       —       87,037  
Other, net
     44,523       339       44,862  
 
                  
 
                        
Income (loss) before minority interest and discontinued operations
     (9,430,089 )     1,635,418       (11,065,507 )
 
                        
MINORITY INTEREST IN (INCOME) OF SUBSIDIARIES
     (168,107 )     —       (168,107 )
 
                  
 
                        
Income (loss) from continuing operations
     (9,598,196 )     1,635,418       (11,233,614 )
 
                        
Income from discontinued operations
     685,014       —       685,014  
 
                  
Net income (loss)
   $ (8,913,182 )   $ 1,635,418     $ (10,548,600 )
 
                  
 
                        
Basic and diluted income (loss) per common share
                        
Continuing operations
   $ (0.30 )           $ (0.36 )
Discontinued operations
     0.02               0.02  
 
                    
Total basic and diluted net income (loss) per share
   $ (0.28 )           $ (0.34 )
 
                    
 
                        
Weighted average common and common equivalent shares outstanding — basic and diluted
     31,470,307               31,470,307  
 
                    
See accompanying notes to unaudited pro forma condensed consolidated financial statements.

5

 

HOLLYWOOD MEDIA CORP. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Year ended December 31, 2004
(Unaudited)
                         
    Historical     Sale of     Pro Forma  
    Hollywood Media Corp.(5)     Source(6)     Hollywood Media Corp.  
NET REVENUES
                        
Ticketing
   $ 59,689,971     $ —     $ 59,689,971  
Data
     4,601,047       (4,601,047 )     —  
Other
     5,298,223       —       5,298,223  
 
                  
 
     69,589,241       (4,601,047 )     64,988,194  
 
                  
 
                        
OPERATING COSTS AND EXPENSES:
                        
Cost of revenues — ticketing
     51,781,133       —       51,781,133  
Editorial, production, development and technology (exclusive of depreciation and amortization shown separately below)
     4,057,680       (1,691,954 )     2,365,726  
Selling, general and administrative
     10,237,259       (559,887 )     9,677,372  
Payroll and benefits
     11,021,138       (891,119 )     10,130,019  
Amortization of CBS advertising
     38,807       —       38,807  
Depreciation and amortization
     1,579,201       (102,766 )     1,476,435  
 
                  
 
                        
Total operating costs and expenses
     78,715,218       (3,245,726 )     75,469,492  
 
                  
 
                        
Income (loss) from operations
     (9,125,977 )     1,355,321       (10,481,298 )
 
                        
EQUITY IN EARNINGS OF UNCONSOLIDATED INVESTEES
     576,317       —       576,317  
 
                        
OTHER INCOME (EXPENSE)
                        
 
                        
Interest, net
     (2,608,776 )     28,166       (2,580,610 )
Other, net
     3,334       333       3,667  
 
                  
 
                        
Income (loss) before minority interest and discontinued operations
     (11,155,102 )     1,326,822       (12,481,924 )
 
                        
MINORITY INTEREST IN (INCOME) OF SUBSIDIARIES
     (388,383 )     —       (388,383 )
 
                  
 
                        
Income (loss) from continuing operations
     (11,543,485 )     1,326,822       (12,870,307 )
 
                        
Loss from discontinued operations
     (54,314 )     —       (54,314 )
 
                  
 
                        
Net income (loss)
   $ (11,597,799 )   $ 1,326,822     $ (12,924,621 )
 
                  
 
                        
Basic and diluted income (loss) per common share
                        
Continuing operations
   $ (0.42 )           $ (0.46 )
Discontinued operations
     (0.00 )             (0.00 )
 
                    
Total basic and diluted net income (loss) per share
   $ (0.42 )           $ (0.46 )
 
                    
 
                        
Weighted average common and common equivalent shares outstanding — basic and diluted
     27,784,850               27,784,850  
 
                    
See accompanying notes to unaudited pro forma condensed consolidated financial statements.

6

 

HOLLYWOOD MEDIA CORP. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEETS
As of June 30, 2007
(Unaudited)
                         
    Historical     Sale of     Pro Forma  
    Hollywood Media Corp.(5)     Source     Hollywood Media Corp.  
ASSETS
                        
 
                        
CURRENT ASSETS:
                        
Cash and cash equivalents
   $ 12,616,083     $ 23,000,000 (1)   $ 35,616,083  
Receivables, net
     3,930,807       (673,181 )(2)     3,257,626  
Inventories held for sale
     5,848,721       —       5,848,721  
Deferred ticket costs
     15,160,113       —       15,160,113  
Prepaid expenses
     2,839,284       (773,621 )(2),(8)     2,065,663  
Other receivables
     2,603,772       (13,015 )(2)     2,590,757  
Other current assets
     3,236,004       (959 )(2)     3,235,045  
 
                  
Total current assets
     46,234,784       21,539,224       67,774,008  
 
                        
PROPERTY AND EQUIPMENT, net
     2,235,507       (119,354 )(2)     2,116,153  
INVESTMENTS IN AND ADVANCES TO UNCONSOLIDATED INVESTEES
     283,113       —       283,113  
INTANGIBLE ASSETS, net
     1,646,957       —       1,646,957  
GOODWILL
     39,595,612       (9,376,256 )(2)     30,219,356  
OTHER ASSETS
     126,045       (1,170 )(2)     124,875  
 
                  
TOTAL ASSETS
   $ 90,122,018     $ 12,042,444     $ 102,164,462  
 
                  
 
                        
LIABILITIES AND SHAREHOLDERS’ EQUITY
                        
 
                        
CURRENT LIABILITIES:
                        
Accounts payable
     4,791,074       (197,962 )(2)   $ 4,593,112  
Accrued expenses and other
     5,540,145       2,562,341 (2),(3),(7),(8)     8,102,486  
Deferred revenue
     23,352,105       (86,824 )(2)     23,265,281  
Customer deposits
     1,807,346       —       1,807,346  
Current portion of capital lease obligations
     51,913       (9,492 )(2)     42,421  
 
                  
Total current liabilities
     35,542,583       2,268,063       37,810,646  
 
                        
DEFERRED REVENUE
     551,663       (67,200 )(2)     484,463  
CAPITAL LEASE OBLIGATIONS, less current portion
     114,991       (13,449 )(2)     101,542  
MINORITY INTEREST
     2,789       —       2,789  
OTHER DEFERRED LIABILITY
     304,196       (59,270 )(2)     244,926  
 
                        
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; 33,769,673 and 33,476,530 shares issued and outstanding at June 30, 2007 and December 31, 2006, respectively
     337,697       —       337,697  
Additional paid-in capital
     314,343,942       —       314,343,942  
Accumulated deficit
     (261,075,843 )     9,914,300 (4)     (251,161,543 )
 
                  
Total shareholders’ equity
     53,605,796       9,914,300       63,520,096  
 
                  
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
   $ 90,122,018     $ 12,042,444     $ 102,164,462  
 
                  
See accompanying notes to unaudited pro forma condensed consolidated financial statements.

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HOLLYWOOD MEDIA CORP. AND SUBSIDIARIES
Notes to the Pro Forma Condensed Consolidated Financial Statements
(Unaudited)
 
(1)   To record the cash proceeds of $23,000,000.
 
(2)   Represents adjustments to eliminate assets and liabilities of the Source business.
 
(3)   The amount includes an accrual for estimated transaction expenses, costs and fees associated with sale of $2,448,946.
 
(4)   To record the gain on sale of the assets of the Source business based on cash consideration:
         
Proceeds received
   $ 23,000,000  
Net assets sold
     (9,636,754 )
Accrued transaction expense
     (2,448,946 )
 
      
 
        
Gain on sale before taxes
   $ 10,914,300  
Income taxes
     (1,000,000 )
 
      
 
        
Net gain
   $ 9,914,300  
 
      
(5)   Represents the Consolidated Balance Sheet included in the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2007 and the Consolidated Statements of Operations included in the Company’s Annual Report on Form 10-K for the years ended December 31, 2006, 2005 and 2004, as applicable.
 
(6)   Represents adjustments to eliminate the results of operations of Source that the Company believes are directly attributable to the sale and are factually supportable and will not continue after sale.
 
(7)   The line item includes an accrual for estimated state and federal income tax liabilities as a result of the sale of $1,000,000.
 
(8)   The amount includes $690,627 in items accrued for and capitalized prior to filing of the Form 10-Q for the period ended June 30, 2007.
 
(9)   Represents the Consolidated Statements of Operations included in the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2007 and 2006, as applicable.

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