Wizard World Entertainment cut its operating loss by more than half in 2016, but still booked an $8.5 million loss for the year, according to SEC filings Monday.  The company’s 10K report, filed over two weeks late, covered a tough year for the company, which brought in a new CEO, had to refinance, and was in court fighting with a former executive (see “Wizard World, Stephen Shamus Settle Lawsuits”). 

On the operational front, there was considerable improvement.  Wizard cut the number of shows it ran from 25 in 2015 to 16 in 2016 with only a $.9 million decline in revenue, from $22.9 million in 2015 to $22 million in 2016, by raising prices and generating bigger, better events.  That brought up its gross margin on the convention business, and with a reduction in expenses, cut the operating loss from $2.9 million in 2015 to $1.2 million in 2016.

Although it’s a minor factor, generating sales of only $707,000 in 2016, the company’s ConBox subscription box business has now turned sharply negative, with declining sales, and a negative gross margin.  The company also booked a $262,500 loss on the CONtv joint venture, a big reduction from the $1.3 million loss in 2016. 

The big hits to earnings were non-cash expenses and change in fair value related to derivatives tied to a new financing transaction (see “Wizard World Secures Financing – At a Cost”).  “Other expenses” were a whopping $7.3 million, accounting for most of the company’s big $8.5 million loss in 2016, double the loss in 2015. 

The company has cash to operate, however, with around $2.9 million in working capital, up from $1.1 million at the end of 2015. 

Wizard World is planning 16 events in 2017, the same as in 2016, and hopes to increase its revenues and profitability on that base.