SOURCE:
Peace Arch Entertainment Group Inc.
2008-07-15 17:41:00
Peace Arch® Entertainment Group Inc. Reports Third Quarter Fiscal 2008 Results
Year to Date Revenues Increase From $50.4 Million to $61.5 Million as Company Continues to Strengthen North American Distribution Operations
TORONTO–(EMWNews – July 15, 2008) – Peace Arch Entertainment Group Inc. (
(TSX: PAE) today announced operating results for its third quarter of
fiscal 2008, ending May 31, 2008. The Company reported revenues of $23.5
million versus $18.8 million for the same period last year, with revenues
for the nine months ended May 31, 2008 up $11.1 million to $61.5 million
compared to $50.4 million last year.
Peace Arch reported a net loss of $(6.6) million or $(0.14) per diluted
share for the three months ended May 31, 2008, compared to net earnings of
$1.1 million, or $0.03 per diluted share for the same period last year. For
the nine months ended May 31, 2008, the net loss was $(8.7) million or
$(0.18) per diluted share, as compared to net earnings of $2.0 million, or
$0.05 per diluted share last year. The loss during the quarter is largely
due to a write-down of investment in film of $2.5 million, bad debt expense
of $2.2 million and print and advertising expenditures of approximately
$900,000.
“We are pleased to report continued revenue growth even as we complete our
restructuring from a production oriented company into a leading independent
distributor,” said John Flock, President and Chief Operating Officer of
Peace Arch Entertainment. “Our Home Entertainment and Television divisions
have been profitable throughout the year, and we expect to keep building
those operations through our new U.S. DVD distribution partnership with
ContentFilm and the renewal of our series ‘The Tudors’ for a third season
on Showtime. Our Motion Picture division has suffered from the poor market
performance of direct-to-DVD titles produced by unaffiliated entities whose
results we are obligated to consolidate, but we have wound down that aspect
of our business since our change in management last November and we expect
to see the positive results of that restructuring beginning in fiscal
2009.”
Revenue for the Company’s Home Entertainment division were up 167% compared
to the same period last year, primarily due to the Company’s expansion into
the United States market through the acquisition of Trinity Home
Entertainment in July 2007.
Year-to-date Television revenues are up more than 7% compared to the first
nine months of 2007, although quarterly revenues were down 17% due to the
delivery of six new episodes of television programming during the quarter
as opposed to twelve new episodes during the third quarter of fiscal 2007.
The Motion Picture division took delivery of five new films during the
quarter, compared to two films in the third quarter last year, as the
Company completes its transition from high volume motion picture production
to focus on direct distribution in the United States and Canada. Included
in the Company’s expenses for the quarter was $900,000 for theatrical print
and advertising expenditures for films that the Company will exploit on DVD
and in other markets next year.
Peace Arch achieved several key milestones during the third quarter in
support of its strategic growth initiatives:
-- Released the feature films "Chapter 27" and "The Babysitters"
theatrically in the United States, solidifying the Company's position as a
rapidly emerging independent theatrical distribution company.
-- Completed licensing agreements for 31 motion pictures and television
series in key international territories at the Cannes Film Festival &
Market, increasing the Company's stature as a leading international sales
company.
-- Debuted the mini-series "Guns" at the MIPTV international television
sales market, resulting in the strongest MIPTV market in the Company's
history.
-- Renewed "The Tudors" for a third season with Showtime Networks, on
which production began in June.
-- Acquired North American distribution rights to the feature film "What
We Do Is Secret," starring Shane West and Bijou Phillips, to be released
theatrically in New York, Chicago and Los Angeles in August.
Significant events that occurred following the end of the quarter include:
-- On June 23, 2008, the Company announced the signing of an agreement
with London-based ContentFilm plc that will integrate both companies' U.S.
home entertainment distribution businesses effective July 1, 2008. The new
operation combines Peace Arch Home Entertainment and Allumination
Filmworks, creating one of the largest independent DVD distributors in the
U.S. marketplace.
-- On July 7, 2008, the Company announced that Gerry Noble has been named
Chief Executive Officer of the Company, effective July 21, 2008. Mr. Noble
replaces interim CEO Jeff Sagansky, who has served in the post since
November 2007.
As at May 31, 2008, Peace Arch’s total shares outstanding was 49,131,698
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.
Peace Arch will hold an investor conference call on Thursday, July 17,
2008, at 9 am Eastern, to discuss the Company’s financial performance for
the third quarter ending May 31, 2008. Callers within the United States
can access the conference call by calling (877) 407-9205; when prompted
tell the operator you would like to connect to the “Peace Arch
Entertainment conference call.” International callers can dial (201)
689-8054.
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)
May 31 August 31
2008 2007
Assets 166,423 150,207
-------- ---------
Liabilities 127,116 103,091
-------- ---------
Shareholders' Equity 39,307 47,116
-------- ---------
Peace Arch Entertainment Group Inc.
Consolidated Statements of Earnings (Loss)
Unaudited - Prepared by Management
-------------------------------------------------------------------------
(In thousands of Canadian dollars, except per share amounts)
Three Months Ended Nine Months Ended
May 31 May 31 May 31 May 31
2008 2007 2008 2007
Restated Restated
Revenues
Motion Picture 1,759 2,389 5,105 13,094
Television 9,811 11,876 22,046 20,538
Home Entertainment 11,978 4,488 34,346 16,727
---------------------------------------
23,548 18,753 61,497 50,359
---------------------------------------
Expenses
Amortization of investment in
film and television programming,
and other production costs 11,008 9,562 23,675 24,849
Home entertainment direct costs 9,364 3,563 24,929 12,059
Selling, general and
administrative 4,228 2,884 12,751 7,021
Bad debt expense 2,162 70 2,280 147
Stock and warrant-based
compensation costs 965 366 1,496 963
Other amortization 362 140 1,072 463
---------------------------------------
28,089 16,585 66,203 45,502
---------------------------------------
(Loss) earnings before the
undernoted (4,541) 2,168 (4,706) 4,857
Interest income 286 408 1,024 1,075
Interest expense (1,114) (1,384)(4,012) (3,437)
Foreign exchange gain (loss) (538) 861 20 196
Legal settlement - - - 957
Loss on settlement of obligations - (396) - (409)
---------------------------------------
(Loss) earnings before income
taxes (5,907) 1,657 (7,674) 3,239
Income tax expense (700) (519) (994) (1,238)
---------------------------------------
(Loss) earnings for the period (6,607) 1,138 (8,668) 2,001
---------------------------------------
Net (loss) earnings per common
share
Basic (0.14) 0.03 (0.18) 0.05
Diluted (0.14) 0.03 (0.18) 0.05
---------------------------------------
Peace Arch Entertainment Group Inc.
Consolidated Statements of Deficit
Unaudited - Prepared by Management
-------------------------------------------------------------------------
(In thousands of Canadian dollars)
Three Months Ended Nine Months Ended
May 31 May 31 May 31 May 31
2008 2007 2008 2007
Restated Restated
Deficit - beginning of period (17,623) (8,523)(15,309) (9,182)
Adjustment for implementation of
new accounting standards - - (67) -
Preference share dividends (105) (111) (291) (315)
Net (loss) earnings for the
period (6,607) 1,138 (8,668) 2,001
---------------------------------------
Deficit - end of period (24,335) (7,496)(24,335) (7,496)
---------------------------------------
Consolidated Statements of Comprehensive (loss) Income
Unaudited - Prepared by Management
-------------------------------------------------------------------------
(In thousands of Canadian dollars)
Three Months Ended Nine Months Ended
May 31 May 31 May 31 May 31
2008 2007 2008 2007
Restated Restated
Net (loss) earnings for the period (6,607) 1,138 (8,668) 2,001
Other comprehensive loss
Unrealized foreign currency
translation gains (losses) on net
assets of self-sustaining foreign
operations 160 - (1,422) -
--------------------------------------
Comprehensive (loss) income for
the period (6,447) 1,138(10,090) 2,001
--------------------------------------
-****-
| Contact: Roy Bodner Senior Vice President Marketing and Communications Peace Arch Entertainment 310-776-7208 |
|
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