We had guessed 2023 would be a rough year for the struggling publishers and it looks like that continues to be the case. IDW has announced that it has been delisted from the New York Stock Exchange, made changes in senior management, and laid off 39% of its workforce. All of this in an attempt to cut costs.
The company has been losing money for months and while it opened at $0.82 a share, it plunged once news came out to $0.47.
Davidi Jonas, the son of the principal IDW owner Howard Jonas will replace Allan Grafman as CEO. CFO Brooke Feinstein is out at the position. Amber Huerta has been promoted to COO.
As far as other changes, reports indicate the entire marketing and PR staff and half of the editorial staff have been let go.
While the company has been a top five publisher (when those stats were available) it has seen troubles in recent years losing numerous licenses like Transformers and G.I. Joe and while original comics and graphic novels have been well received in reviews, none have really caught fire. Recent success has mostly been through the Top Shelf imprint with releases like They Called Us Enemy and the perennial seller March.
As far as its delisting, or “going dark,” the company in the announcement stated:
The Board has elected to take these actions to preserve capital, and put the Company in the strongest position possible to unlock value from its assets, including its intellectual property and ability to generate new intellectual property.
It further stated that SEC regulations were a burden on the company and removing them would help streamline the operations and recovery:
The Board determined that going dark is the best path for the Company due to expected cost savings, reduction of pressure on limited resources and the Company’s current inability to realize many of the benefits from continued listing and Exchange Act registration and reporting.
Low trading values and volume has limited our Class B common stock’s liquidity and made it untenable to effectively use our securities as transaction consideration, attract interest from institutional investors or market analysts or provide meaningful incentive to our employees. At the same time, we continued to bear the direct and indirect expenses associated with the NYSE American listing and SEC reporting.
The announced cuts are expected to save $4.4 million annually with $900,000 being paid out in severance. Last month, the publishing division announced a $335,000 loss for the first fiscal quarter which was down from a profit of $512,000 in 2022. Sales in the direct market were down $462,000 while the book channel sales were up $734,000. IDW’s game division, which seems to have recently closed, had a decline of revenue of $1.9 million and IDW Entertainment declined from $4.3 million to near nothing due to the absence of its television offerings. IDW Media Holdings sales were down 44% from $11.8 million in Q1 2022 to $6.6 million in Q1 2023. The company lost $2 million the in quarter comparted to $2 million in profit from the prior year. The company did state in its last earnings call it had enough cash to sustain operations for the next year.
You can read IDW Media Holdings full statement here.
Source: Graphic Policy
