Peace Arch® Entertainment Group Inc. Reports First Quarter Fiscal 2008 Results Revenues Increase From $11 Million to $17 Million, Validating High Growth Strategy for International Entertainm
SOURCE:
Peace Arch Entertainment Group Inc.
2008-03-31 20:59:00
Peace Arch® Entertainment Group Inc. Reports First Quarter Fiscal 2008 Results
Revenues Increase From $11 Million to $17 Million, Validating High Growth Strategy for International Entertainm
TORONTO–( EMWNews – March 31, 2008) – Peace Arch Entertainment Group Inc. (
(TSX: PAE) today announced operating results for its first quarter of
fiscal 2008, ending November 30, 2007, that reported revenues of $17.2
million versus $11.3 million for the same period last year.
The Company’s revenues for the three months ended November 30, 2007 were
$17.2 million up significantly from $11.3 million last year. The growth in
revenues reflects an increase primarily in Home Entertainment which
includes new revenues from the acquisition of Trinity in the U.S.
Peace Arch reported net loss of $(1.1) million, or $(0.03) per diluted
share in the three months ended November 30, 2007, compared to a net loss
of $(373,000), or $(0.02) per diluted share for the same period last year.
Included in net loss for the three months ended November 30, 2007 was $1.7
million of interest expense compared to $822,000 in the same period last
year. The increase in interest expense is due to the increase in
production loans, and loan arrangement fees paid for new loan facilities in
the quarter.
During the quarter, the Company delivered three films, one
made-for-television movie and twenty-two episodes of three television
series, compared to the delivery of one film, one made-for-television movie
and ten episodes of two television series for the same period of the prior
year. The films delivered were “The Last Hit Man,” “The Four Horsemen,”
and “Grindstone Rd” and the made-for-television movie delivered was “Ace of
Hearts.” The Company is currently in production of “The Tudors” season II,
a 10-hour dramatic mini-series focusing on the tumultuous years of King
Henry VIII’s nearly forty year reign of England. The Home Entertainment
segment reported both strong revenues and earnings in the quarter.
During the first quarter, the Company achieved several key milestones in
support of its strategic growth initiatives as follows:
* Elected prominent entertainment industry veteran Jeffrey Sagansky as
Co-Chairman of the board and elected John Flock, President, to the board of
directors.
* Completed a sale of certain distribution rights excluding North America
with Sony Pictures Home Entertainment for the second season of the
television program series “The Tudors” focusing on the tumultuous years of
King Henry VIII’s nearly 40 year reign of England.
* The television series “The Tudors” received two Creative Emmy® Awards
from the Academy of Television Arts & Sciences. The Emmy Awards were given
for “Outstanding Costumes for a Series” and “Outstanding Original Movie
Title Theme Music.”
* Longtime Showtime acquisitions executive Larry Greenberg joined Peace
Arch as Senior Vice President, Acquisition and is based in Peace Arch’s Los
Angeles office.
* Acquired worldwide distribution rights to the following mini-series and
films: “Guns,” “The Babysitters,” and “The Devil’s Mercy.”
* Acquired Canadian distribution rights to four films from Insight Film
Studios, “Numb,” “When a Man Falls in the Forest,” “Operation Espionage,”
and “Higher Education.”
* Acquired exclusive distribution rights to Uwe Boll’s epic adventure film
“In the Name of The King.”
* Acquired exclusive North American distribution rights to crime thriller
“Towards Darkness” starring Emmy winning actress America Ferrera.
* “Chapter 27” won debut feature prize at the Zurich Film Festival for
director Jarrett Schaefer.
* Appointment of entertainment industry veteran Jeffrey Sagansky as Interim
CEO.
Subsequent to the first quarter ended November 30, 2007, the following
significant transactions occurred:
* Completion of the acquisition of the remaining 59.99% of the shares of
Dufferin Gate Productions Inc.
* Financing agreement with key shareholders in the amount of $2.7 million
for general corporate purposes.
As at November 30, 2007, Peace Arch’s total shares outstanding was
48,340,420 Common Shares (excluding 222,689 shares in escrow) and 4,347,825
Series I Preference Shares and 4,347,825 Series II Preference Shares. The
Company also has outstanding 801,000 Common Share purchase warrants.
As disclosed in its annual financial statements, the Company’s audit
opinion for the year ended August 31, 2007 contained a going concern
qualification.
Our next conference call will take place subsequent to the release of our
second quarter financial statements for the period ending February 28,
2007.
For full Financial Statements, Note Disclosure and MD&A, please refer to
the Company’s filings, which are available at: www.sedar.com and
About Peace Arch® Entertainment Group Inc.
Peace Arch Entertainment produces and acquires feature films, television
and home entertainment content for distribution to worldwide markets. Peace
Arch owns one of the largest libraries of top quality independent feature
films in the world, featuring more than 1000 classic and contemporary
titles. For additional information, please visit www.peacearch.com.
Forward-Looking Statements
This press release includes statements that may constitute forward-looking
statements, usually containing the words “believe,” “estimate,” “project,”
“expect,” or similar expressions. These statements are made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform Act of
1995. Forward-looking statements inherently involve risks and uncertainties
that could cause actual results to differ materially from the
forward-looking statements. Factors that would cause or contribute to such
differences include, but are not limited to, continued acceptance of the
Company’s products and services in the marketplace, competitive factors,
dependence upon third-party vendors, availability of capital and other
risks detailed in the Company’s periodic report filings with the Securities
and Exchange Commission. By making these forward-looking statements, the
Company undertakes no obligation to update these statements for revisions
or changes after the date of this release.
Peace Arch Entertainment Group Inc.
Consolidated Balance Sheet Highlights
Unaudited - Prepared by Management
--------------------------------------------------------------------
(In thousands of Canadian dollars)
November 30 August 31
2007 2007
Assets 166,257 150,207
----------- ---------
Liabilities 121,159 103,091
----------- ---------
Shareholders' Equity 45,098 47,116
----------- ---------
Peace Arch Entertainment Group Inc.
Consolidated Statements of Loss
Unaudited -- Prepared by Management
--------------------------------------------------------------------
(In thousands of Canadian dollars, except per share amounts)
Three Months Three Months
Ended Ended
November 30 November 30
2007 2006
Restated
Revenues
Motion Picture 2,150 4,460
Television 4,028 1,185
Home Entertainment 10,993 5,685
--------------------------------
17,171 11,330
--------------------------------
Expenses
Amortization of investment in film
and television programming, and
other production costs 4,665 4,350
Home entertainment direct costs 8,003 4,249
Selling, general and administrative 4,018 1,771
Stock and warrant-based compensation costs 247 119
Other amortization 353 124
--------------------------------
17,286 10,613
--------------------------------
Earnings (loss) before the undernoted (115) 717
Interest income 442 260
Interest expense (1,669) (822)
Foreign exchange gain (loss) 356 (317)
Loss on settlement of obligations - (13)
--------------------------------
Loss before income taxes (986) (175)
Income tax expense (139) (198)
--------------------------------
Net loss for the period (1,125) (373)
--------------------------------
Net loss per common share
Basic and Diluted $(0.03) $(0.02)
--------------------------------
The accompanying notes are an integral part of these consolidated
financial statements
Peace Arch Entertainment Group Inc.
Consolidated Statements of Deficit
Unaudited - Prepared by Management
--------------------------------------------------------------------
(In thousands of Canadian dollars)
Three Months Three Months
Ended Ended
November 30 November 30
2007 2006
Restated
Deficit -- beginning of period (15,309) (9,182)
Adjustment for implementation of new
accounting standards (67) -
Preference share dividends (81) (100)
Net loss for the period (1,125) (373)
----------------------
Deficit -- end of period (16,582) (9,655)
----------------------
Consolidated Statements of
Comprehensive Loss
Unaudited -- Prepared by Management
--------------------------------------------------------------------
(In thousands of Canadian dollars)
Three Months Three Months
Ended Ended
November 30 November 30
2007 2006
Restated
Net loss for the period (1,125) (373)
Other comprehensive loss
Unrealized foreign currency
translation losses on net assets of
self-sustaining foreign operations (1,278) -
----------------------
Comprehensive loss for the period (2,403) (373)
----------------------
The accompanying notes are an integral part of these consolidated
financial statements
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