EX-99.2 7 g14920exv99w2.htm EX-99.2 UNAUDITED PRO FROMA CONDENSED CONSOLIDATED BALANCE SHEETS Ex-99.2 Unaudited Pro Froma Condensed Consolidated
Exhibit 99.2
Hollywood Media Corp.
Pro Forma Financial Information
(Unaudited)
Introduction
On August 21, 2008, Hollywood Media Corp. (“Hollywood Media”) entered into a purchase agreement (the “Purchase Agreement”) with R&S Investments, LLC (“Purchaser”) for the sale of Hollywood Media’s subsidiaries Hollywood.com, Inc. (“Hollywood.com”) and Totally Hollywood TV, LLC (collectively, the “Hollywood.com Business”). Pursuant to the Purchase Agreement, Hollywood Media sold the Hollywood.com Business to Purchaser for a purchase price of $10,000,000, which includes $1 million, which was paid to Hollywood Media at closing, and earn-out payments expected to total $9 million. The following Unaudited Pro Forma Condensed Consolidated Financial Statements have been prepared to illustrate the effect of the sale of the Hollywood.com Business, 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, 2007 and 2008, and for the years ended December 31, 2005, 2006 and 2007, reflect the sale of the Hollywood.com Business that occurred on August 21, 2008, as if the sale had occurred as of January 1 of each such year. The Unaudited Pro Forma Condensed Consolidated Balance Sheet as of June 30, 2008 reflects the sale of the Hollywood.com Business as if the sale occurred on June 30, 2008.
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 the Hollywood.com Business 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, 2008, and its Annual Report on Form 10-K for the year ended December 31, 2007.

 

HOLLYWOOD MEDIA CORP. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Six Months ended June 30, 2008
(Unaudited)
                         
    Historical     Sale of     Pro Forma  
    Hollywood Media Corp.(8)     Hollywood.com(7)     Hollywood Media Corp.  
NET REVENUES
                        
Ticketing
   $ 59,062,595     $ —     $ 59,062,595  
Other
     6,347,644       (2,893,255 )     3,454,389  
 
                  
 
     65,410,239       (2,893,255 )     62,516,984  
 
                  
 
                        
OPERATING COSTS AND EXPENSES:
                        
Cost of revenues — ticketing
     49,782,868       —       49,782,868  
Editorial, production, development and technology (exclusive of depreciation and amortization shown separately below)
     3,180,216       (1,278,853 )     1,901,363  
Selling, general and administrative (exclusive of depreciation and amortization shown separately below)
     8,561,579       (1,606,978 )     6,954,601  
Payroll and benefits
     8,030,321       (1,256,368 )     6,773,953  
Depreciation and amortization
     1,255,694       (270,428 )     985,266  
 
                  
 
                        
Total operating costs and expenses
     70,810,678       (4,412,627 )     66,398,051  
 
                  
 
                        
Loss from operations
     (5,400,439 )     (1,519,372 )     (3,881,067 )
 
                        
EQUITY IN EARNINGS OF UNCONSOLIDATED INVESTEES
     1,317,513       —       1,317,513  
 
                        
OTHER INCOME (EXPENSE)
                        
 
                        
Interest, net
     300,333       —       300,333  
Other, net
     (34,985 )     1,403       (33,582 )
 
                  
Loss before minority interest
     (3,817,578 )     (1,520,775 )     (2,296,803 )
 
                        
MINORITY INTEREST IN INCOME OF SUBSIDIARIES
     (65,822 )     —       (65,822 )
 
                  
 
                        
Net loss
   $ (3,883,400 )   $ (1,520,775 )   $ (2,362,625 )
 
                  
 
                        
Basic and diluted loss per common share
                        
Continuing operations
   $ (0.12 )           $ (0.07 )
 
                    
Total basic and diluted net loss per share
   $ (0.12 )           $ (0.07 )
 
                    
 
                        
Weighted average common and common equivalent shares outstanding — basic and diluted
     31,909,540               31,909,540  
 
                    
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, 2007
(Unaudited)
                         
    Historical     Sale of     Pro Forma  
    Hollywood Media Corp.(8)     Hollywood.com(7)     Hollywood Media Corp.  
NET REVENUES
                        
Ticketing
   $ 58,851,282     $ —     $ 58,851,282  
Other
     5,786,994       (2,826,213 )     2,960,781  
 
                  
 
     64,638,276       (2,826,213 )     61,812,063  
 
                  
 
                        
OPERATING COSTS AND EXPENSES:
                        
Cost of revenues — ticketing
     50,513,554       —       50,513,554  
Editorial, production, development and technology (exclusive of depreciation and amortization shown separately below)
     2,669,638       (1,000,844 )     1,668,794  
Selling, general and administrative (exclusive of depreciation and amortization shown separately below)
     7,794,311       (856,804 )     6,937,507  
Payroll and benefits
     8,074,525       (1,361,347 )     6,713,178  
Depreciation and amortization
     857,446       (201,665 )     655,781  
 
                  
 
                        
Total operating costs and expenses
     69,909,474       (3,420,660 )     66,488,814  
 
                  
 
                        
Loss from operations
     (5,271,198 )     (594,447 )     (4,676,751 )
 
                        
EQUITY IN EARNINGS OF UNCONSOLIDATED INVESTEES
     875       —       875  
 
                        
OTHER INCOME (EXPENSE)
                        
 
                        
Interest, net
     (319,621 )     —       (319,621 )
Other, net
     39,262       1,695       40,957  
 
                  
Loss before minority interest and discontinued operations
     (5,550,682 )     (596,142 )     (4,954,540 )
 
                        
MINORITY INTEREST IN INCOME OF SUBSIDIARIES
     (382 )     —       (382 )
 
                  
Loss from continuing operations
     (5,551,064 )     (596,142 )     (4,954,922 )
 
                        
Income from discontinued operations
     1,048,938       —       1,048,938  
 
                  
Net loss
   $ (4,502,126 )   $ (596,142 )   $ (3,905,984 )
 
                  
 
                        
Basic and diluted income (loss) per common share
                        
Continuing operations
   $ (0.16 )           $ (0.15 )
Discontinued operations
     0.03               0.03  
 
                    
Total basic and diluted net income (loss) per share
   $ (0.13 )           $ (0.12 )
 
                    
 
                        
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.

3

 

HOLLYWOOD MEDIA CORP. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Year ended December 31, 2007
(Unaudited)
                         
    Historical     Sale of     Pro Forma  
    Hollywood Media Corp.(6)     Hollywood.com(7)     Hollywood Media Corp.  
NET REVENUES
                        
Ticketing
   $ 111,792,068     $ —     $ 111,792,068  
Other
     12,089,155       (5,719,999 )     6,369,156  
 
                  
 
     123,881,223       (5,719,999 )     118,161,224  
 
                  
 
                        
OPERATING COSTS AND EXPENSES:
                        
Cost of revenues — ticketing
     94,017,924       —       94,017,924  
Editorial, production, development and technology (exclusive of depreciation and amortization shown separately below)
     5,635,742       (2,045,550 )     3,590,192  
Selling, general and administrative (exclusive of depreciation and amortization shown separately below)
     16,321,373       (2,051,399 )     14,269,974  
Payroll and benefits
     16,072,400       (2,703,583 )     13,368,817  
Depreciation and amortization
     1,847,171       (468,679 )     1,378,492  
 
                  
 
                        
Total operating costs and expenses
     133,894,610       (7,269,211 )     126,625,399  
 
                  
 
                        
Loss from operations
     (10,013,387 )     (1,549,212 )     (8,464,175 )
 
                        
EQUITY IN EARNINGS OF UNCONSOLIDATED INVESTEES
     4,747       —       4,747  
 
                        
OTHER INCOME (EXPENSE)
                        
 
                        
Interest, net
     199,437       —       199,437  
Other, net
     (59,572 )     8,637       (50,935 )
 
                  
Loss before minority interest and discontinued operations
     (9,868,775 )     (1,557,849 )     (8,310,926 )
 
                        
MINORITY INTEREST IN INCOME OF SUBSIDIARIES
     3,241       —       3,241  
 
                        
 
                  
Loss from continuing operations
     (9,865,534 )     (1,557,849 )     (8,307,685 )
 
                        
Gain on sale of discontinued operations, net of income taxes
     10,254,287       —       10,254,287  
Income from discontinued operations
     1,345,856       —       1,345,856  
 
                    
Income from discontinued operations
     11,600,143       —       11,600,143  
 
                        
 
                    
Net income (loss)
   $ 1,734,609     $ (1,557,849 )   $ 3,292,458  
 
                  
 
                        
Basic and diluted income (loss) per common share
                        
Continuing operations
   $ (0.30 )           $ (0.25 )
Discontinued operations
     0.35               0.35  
 
                    
Total basic and diluted net income (loss) per share
   $ 0.05             $ 0.10  
 
                    
 
                        
Weighted average common and common equivalent shares outstanding — basic and diluted
     33,303,886               33,303,886  
 
                    
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, 2006
(Unaudited)
                         
    Historical     Sale of     Pro Forma  
    Hollywood Media Corp.(6)     Hollywood.com(7)     Hollywood Media Corp.  
NET REVENUES
                        
Ticketing
   $ 98,661,705     $ —     $ 98,661,705  
Other
     10,755,277       (4,892,562 )     5,862,715  
 
                  
 
     109,416,982       (4,892,562 )     104,524,420  
 
                  
 
                        
OPERATING COSTS AND EXPENSES:
                        
Cost of revenues — ticketing
     82,496,590       —       82,496,590  
Editorial, production, development and technology (exclusive of depreciation and amortization shown separately below)
     4,763,860       (1,598,477 )     3,165,383  
Selling, general and administrative (exclusive of depreciation and amortization shown separately below)
     14,884,268       (1,529,473 )     13,354,795  
Payroll and benefits
     14,117,379       (2,016,563 )     12,100,816  
Depreciation and amortization
     1,702,427       (408,630 )     1,293,797  
 
                  
 
                        
Total operating costs and expenses
     117,964,524       (5,553,143 )     112,411,381  
 
                  
 
                        
Loss from operations
     (8,547,542 )     (660,581 )     (7,886,961 )
 
                        
EQUITY IN EARNINGS OF UNCONSOLIDATED INVESTEES
     12,227       —       12,227  
 
                        
OTHER INCOME (EXPENSE)
                        
 
                        
Interest, net
     (1,787,735 )     —       (1,787,735 )
Change in derivative liability
     640,536       —       640,536  
Other, net
     3,910       (5,520 )     (1,610 )
 
                  
Loss before minority interest and discontinued operations
     (9,678,604 )     (666,101 )     (9,023,543 )
 
                        
MINORITY INTEREST IN INCOME OF SUBSIDIARIES
     4,910       —       4,910  
 
                  
Loss from continuing operations
     (9,673,694 )     (666,101 )     (9,018,633 )
 
                        
Gain on sale of discontinued operations, net of income taxes
     16,328,241       —       16,328,241  
Income from discontinued operations
     2,867,966       —       2,867,966  
 
                  
Income from discontinued operations
     19,196,207       —       19,196,207  
 
                  
 
                        
Net income (loss)
   $ 9,522,513     $ (666,101 )   $ 10,177,574  
 
                  
 
                        
Basic and diluted income (loss) per common share
                        
Continuing operations
   $ (0.30 )           $ (0.28 )
Discontinued operations
     0.59               0.58  
 
                    
Total basic and diluted net income (loss) per share
   $ 0.29             $ 0.30  
 
                    
 
                        
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.

5

 

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.(6)     Hollywood.com(7)     Hollywood Media Corp.  
NET REVENUES
                        
Ticketing
   $ 79,189,987     $ —     $ 79,189,987  
Other
     5,805,821       (3,780,045 )     2,025,776  
 
                  
 
     84,995,808       (3,780,045 )     81,215,763  
 
                  
 
                        
OPERATING COSTS AND EXPENSES:
                        
Cost of revenues — ticketing
     68,179,732       —       68,179,732  
Editorial, production, development and technology (exclusive of depreciation and amortization shown separately below)
     2,326,893       (1,304,043 )     1,022,850  
Selling, general and administrative (exclusive of depreciation and amortization shown separately below)
     10,818,088       (1,346,004 )     9,472,084  
Payroll and benefits
     13,586,986       (2,160,987 )     11,425,999  
Depreciation and amortization
     1,269,146       (377,606 )     891,540  
 
                  
 
                        
Total operating costs and expenses
     96,180,845       (5,188,640 )     90,992,205  
 
                  
 
                        
Loss from operations
     (11,185,037 )     (1,408,595 )     (9,776,442 )
 
                        
EQUITY IN EARNINGS OF UNCONSOLIDATED INVESTEES
     533,228       —       533,228  
 
                        
OTHER INCOME (EXPENSE)
                        
 
                        
Interest, net
     (545,597 )     (2,662 )     (548,259 )
Change in derivative liability
     87,037       —       87,037  
Other, net
     44,862       4,059       48,921  
 
                  
Loss before minority interest and discontinued operations
     (11,065,507 )     (1,407,198 )     (9,655,515 )
 
                        
MINORITY INTEREST IN INCOME OF SUBSIDIARIES
     (168,107 )     —       (168,107 )
 
                        
 
                  
Loss from continuing operations
     (11,233,614 )     (1,407,198 )     (9,823,622 )
 
                        
Gain on sale of discontinued operations, net of income taxes
     —       —       —  
Income from discontinued operations
     2,320,432       —       2,320,432  
 
                  
Income from discontinued operations
     2,320,432       —       2,320,432  
 
                        
 
                  
Net loss
   $ (8,913,182 )   $ (1,407,198 )   $ (7,503,190 )
 
                  
 
                        
Basic and diluted income (loss) per common share
                        
Continuing operations
   $ (0.36 )           $ (0.31 )
Discontinued operations
     0.08               0.07  
 
                    
Total basic and diluted net income (loss) per share
   $ (0.28 )           $ (0.24 )
 
                    
 
                        
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.

6

 

HOLLYWOOD MEDIA CORP. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEETS
As of June 30, 2008
(Unaudited)
                             
    Historical     Sale of         Pro Forma  
    Hollywood Media Corp.(6)     Hollywood.com         Hollywood Media Corp.  
ASSETS
                            
 
                            
CURRENT ASSETS:
                            
Cash and cash equivalents
   $ 20,946,053     $ (2,000,000 )   (1), (4)   $ 18,946,053  
Receivables, net
     3,051,683       (1,375,933 )   (2)     1,675,750  
Inventories held for sale
     4,704,413       —           4,704,413  
Deferred ticket costs
     12,832,064       —           12,832,064  
Prepaid expenses
     1,972,518       (124,106 )   (2)     1,848,412  
Other receivables
     1,903,537       (7,904 )   (2)     1,895,633  
Dividend receivable
     1,311,100       —           1,311,100  
Other current assets
     143,294       —           143,294  
Restricted cash
     —       2,600,000     (4)     2,600,000  
 
                      
Total current assets
     46,864,662       (907,943 )         45,956,719  
 
                            
PROPERTY AND EQUIPMENT, net
     5,238,071       (712,795 )   (2)     4,525,276  
INVESTMENTS IN AND ADVANCES TO UNCONSOLIDATED INVESTEES
     290,243       —           290,243  
INTANGIBLE ASSETS, net
     1,620,594       (385,220 )   (2)     1,235,374  
GOODWILL
     29,822,422       (893,697 )   (2)     28,928,725  
OTHER ASSETS
     54,711       (8,801 )   (2)     45,910  
 
                      
TOTAL ASSETS
   $ 83,890,703     $ (2,908,456 )       $ 80,982,247  
 
                      
 
                            
LIABILITIES AND SHAREHOLDERS’ EQUITY
                            
 
                            
CURRENT LIABILITIES:
                            
Accounts payable
   $ 4,004,313     $ (2,326,749 )   (2)   $ 1,677,564  
Accrued expenses and other
     3,767,873       (179,805 )   (2),(3)     3,588,068  
Escrow liability
     —       2,600,000     (4)     2,600,000  
Deferred revenue
     20,184,994       (473,272 )   (2)     19,711,722  
Customer deposits
     1,432,357       —           1,432,357  
Current portion of capital lease obligations
     161,316       (5,708 )   (2)     155,608  
Current portion of notes payable
     59,463       —           59,463  
 
                      
Total current liabilities
     29,610,316       (385,534 )         29,224,782  
 
                            
DEFERRED REVENUE
     586,915       —           586,915  
CAPITAL LEASE OBLIGATIONS, less current portion
     223,652       (22,355 )   (2)     201,297  
OTHER DEFERRED LIABILITY
     873,711       (8,265 )   (2)     865,446  
NOTES PAYABLE, less current portion
     79,699       —           79,699  
 
                            
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 June 30, 2008 and December 31, 2007, respectively
     320,956       —           320,956  
Additional paid-in capital
     310,917,962       —           310,917,962  
Accumulated deficit
     (258,722,508 )     (2,492,302 )   (5)     (261,214,810 )
 
                      
Total shareholders’ equity
     52,516,410       (2,492,302 )         50,024,108  
 
                      
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
   $ 83,890,703     $ (2,908,456 )       $ 80,982,247  
 
                      
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 $1,000,000 less monies escrowed of $2,600,000 and $400,000 for working capital adjustment.
 
(2)   Represents adjustments to eliminate assets and liabilities of the Hollywood.com and Hollywood TV businesses.
 
(3)   The amount includes an accrual for estimated transaction expenses, costs and fees associated with sale of $257,332.
 
(4)   To record $2,600,000 liability for monies held in escrow.
 
(5)   To record the loss on sale of the assets of the Hollywood.com and Hollywood TV business based on cash consideration:
         
Proceeds received
   $ 1,000,000  
Working capital deficit
     (400,000 )
Net assets sold
     (234,970 )
Accrued transaction expense
     (257,332 )
Escrow liability
     (2,600,000 )
 
      
Net loss
   $ (2,492,302 )
 
      
(6)   Represents the Consolidated Balance Sheet included in the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2008 and the Consolidated Statements of Operations included in the Company’s Annual Report on Form 10-K for the years ended December 31, 2007, 2006 and 2005, as applicable.
 
(7)   Represents adjustments to eliminate the results of operations of Hollywood.com and Hollywood TV that the Company believes are directly attributable to the sale and are factually supportable and will not continue after sale.
 
(8)   Represents the Consolidated Statements of Operations included in the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2008 and 2007, as applicable.

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