February 5, 2009

Cinedigm Digital Cinema Corp. Announces Fiscal 2009 Third Quarter Results

Revenue Growth, Operating Income and Adjusted EBITDA Margin Improvements Continue, Driven by Virtual Print Fees and Growth in Content Delivery Business

MORRISTOWN, NJ, Feb 05, 2009 (MARKET WIRE via COMTEX News Network) -- Access Integrated Technologies, now doing business as Cinedigm Digital Cinema Corp. ("Cinedigm" or the "Company") (NASDAQ: CIDM), reported a 10% increase in year-to-date revenue to $65.1 million, and a 6% increase in revenues, to $22.7 million for the fiscal 2009 third quarter ended December 31, 2008, versus the year-ago periods. The Company posted an Adjusted EBITDA(1) (defined below) of $11.0 million or $0.40 per share, an improvement from the fiscal 2008 third quarter of $8.4 million. The net loss for the fiscal 2009 third quarter of $17.4 million includes non-cash expenses for depreciation, amortization of intangible assets, non-cash interest, stock-based expenses, stock-based compensation, impairment of goodwill and change in the fair value of interest rate swap aggregating $22.3 million or $0.81 per share compared to $11.1 million or $0.43 per share in the fiscal 2008 third quarter.

Third Quarter and Year-to-Date Highlights

--  Year-to-date revenues increased by 10% to $65 million compared to the
    prior year's $59 million, and for the third quarter increased by 6%, to
    $22.7 million from $21.5 million in the comparable year-ago-period.  The
    quarterly improvement from last year was driven largely by a 7% increase in
    the media services segment, including Virtual Print Fees ("VPFs") and
    higher media delivery fees in our satellite unit, and a 4% increase in our
    content and entertainment segment.  Quarter-over-quarter, revenues
    increased by 4%, from $21.8 million mainly due to increases in VPF,
    satellite delivery and content distribution revenue.

--  Loss From Operations for the fiscal 2009 third quarter increased to
    $5.0 million, from a loss of $1.0 million in the comparable year-ago-
    period, due to the non-recurring $6.5 million goodwill impairment charge,
    offset by increased revenues and reduced SG&A expenses.  Year-to-date, loss
    from operations improved to $2.9 million from a loss of $3.5 million in the
    prior year, also due to increased revenues and reduced SG&A, but offset by
    the impairment charge and also by increased depreciation.

--  Gross Profit (revenue less direct operating expenses) Margin for the
    year to date was 70%, an increase from last year's 66% for the same period,
    and for the third quarter was 69%, consistent with last year's third
    quarter of 69%.

--  Adjusted EBITDA(1) margins improved to 48% in the December 2008
    quarter from 39% in the comparable year ago period and 49% year-to-date
    from 36% last year.


Bud Mayo, Chief Executive Officer of Cinedigm, stated, "2009 will be a challenging year for most companies, due to the continuing uncertainty in the credit markets and other factors; however, we continue to be confident, and even optimistic, about our ability to operate our business more effectively and more efficiently even if we are unable to secure additional Phase 2 funding. Our recurring revenues from our investment in a large digital cinema asset base during a far more robust market is paying off today from long-term contracted VPF and other revenue streams. These revenues have proven to be reliable and predictable in an industry that thrives despite the recession and they have become the life blood of our business. We continue to expand the uses of this asset base with new and exciting revenue producing programs and services. Our goal is to position ourselves to benefit incrementally from a Phase 2 deployment while exploiting the 3,800 screens and satellite network we already have in place."

CONFERENCE CALL NOTIFICATION

Cinedigm will host a conference call to discuss its financial results at 10:30 a.m. EST on Thursday, February 5, 2009. The conference can be accessed by dialing 719.325.4764, at least five minutes before the start of the call. No passcode is required. The conference call will also be webcast simultaneously and will be accessible via the web on Cinedigm's Web site, www.cinedigmcorp.com. A replay of the call will be available after 1:30 p.m. Eastern at 719.457.0820 or 888.203.1112, passcode 4672831. The replay will be accessible through Thursday, February 12th.

About Cinedigm

Cinedigm Digital Cinema Corp. is the global leader in fulfilling the promise of digital cinema. Its ground-breaking technology platform helps exhibitors, distributors, studios and content providers transform the consumer movie experience -- by expanding theatrical features to include not only movies but also live 2-D and 3-D performances such as major sporting events, concerts and gaming. The Company also enables theatres to create exhibitions and advertising opportunities targeted to specific audience groups and locations thereby offering new revenue opportunities for these venues. Cinedigm's leading digital cinema platform and one-of-a-kind satellite delivery operations support more than 3,700 theatre screens equipped with DLP Cinema(R) projection systems across the United States with over nine million digital showings of Hollywood features to date. www.Cinedigm.com [CIDM-E]

Safe Harbor Statement

Investors and readers are cautioned that certain statements contained in this document, as well as some statements in periodic press releases and some oral statements of Cinedigm officials during presentations about Cinedigm, along with Cinedigm 's filings with the Securities and Exchange Commission, including Cinedigm's registration statements, quarterly reports on Form 10-QSB and annual report on Form 10-KSB, are "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Act"). Forward-looking statements include statements that are predictive in nature, which depend upon or refer to future events or conditions, which include words such as "expects," "anticipates," "intends," "plans," "could," "might," "believes," "seeks," "estimates" or similar expressions. In addition, any statements concerning future financial performance (including future revenues, earnings or growth rates), ongoing business strategies or prospects, and possible future actions, which may be provided by Cinedigm's management, are also forward-looking statements as defined by the Act. Forward-looking statements are based on current expectations and projections about future events and are subject to various risks, uncertainties and assumptions about Cinedigm, its technology, economic and market factors and the industries in which Cinedigm does business, among other things. These statements are not guarantees of future performance and Cinedigm undertakes no specific obligation or intention to update these statements after the date of this release.

(1) Adjusted EBITDA is defined by the Company to be earnings before interest, taxes, depreciation and amortization, other income (expense), net, stock-based compensation and non-recurring items. Pursuant to the requirements of Regulation G, the Company has provided a reconciliation in the tables attached to this release of Adjusted EBITDA to U.S. GAAP net income (loss). The Company calculated and communicated Adjusted EBITDA in the tables because the Company's management believes it is of importance to investors and lenders by providing additional information with respect to the performance of its fundamental business activities. The Company's calculation of Adjusted EBITDA may or may not be consistent with the calculation of this measure by other companies in the same industry. Investors should not view Adjusted EBITDA as an alternative to the U.S. GAAP operating measure of net income (loss). In addition, Adjusted EBITDA does not take into account changes in certain assets and liabilities as well as interest and income taxes that can affect cash flows. Management does not intend the presentation of these non-GAAP measures to be considered in isolation or as a substitute for results prepared in accordance with U.S. GAAP. These non-GAAP measures should be read only in conjunction with the Company's consolidated financial statements prepared in accordance with U.S. GAAP.

                         CINEDIGM DIGITAL CINEMA CORP.
                     CONSOLIDATED STATEMENTS OF OPERATIONS
               (In thousands, except for share and per share data)
                                  (Unaudited)
                                                      Three Months Ended
                                                         December 31,
                                                   -----------------------
                                                      2007         2008
                                                   ----------   ----------
Revenues                                           $   21,480   $   22,710
Costs and expenses:
Direct operating (exclusive of depreciation and
 amortization shown below)                              6,608        7,068
Selling, general and administrative                     6,090        4,691
Provision for doubtful accounts                           321           98
Research and development                                  180          107
Stock-based compensation                                  162          295
Impairment of goodwill                                     --        6,525
Depreciation of property and equipment                  8,020        8,126
Amortization of intangible assets                       1,071          821
                                                   ----------   ----------
    Total operating expenses                           22,452       27,731
                                                   ----------   ----------
Loss from operations                                     (972)      (5,021)
Interest income                                           448           88
Interest expense                                       (7,703)      (6,935)
Other expense, net                                       (125)        (162)
Change in fair value of interest rate swap                 --       (5,411)
                                                   ----------   ----------
Net loss                                           $   (8,352)  $  (17,441)
                                                   ==========   ==========
Net loss per Class A and B common share - basic
 and diluted                                       $    (0.32)  $    (0.63)
                                                   ==========   ==========
Weighted average number of Class A and B common
 shares outstanding:
Basic and diluted                                  25,931,467   27,566,462
                                                   ==========   ==========
                    Cinedigm Digital Cinema Corp.
                     Adjusted EBITDA (as defined)
                  Reconciliation to GAAP Net Income
                           (In thousands)
                            (Unaudited)
                                                      Three Months Ended
                                                         December 31,
                                                   -----------------------
                                                      2007         2008
                                                   ----------   ----------
Net loss                                           $   (8,352)  $  (17,441)
Add Back:
  Amortization of software development                    153          214
  Depreciation of property and equipment                8,020        8,126
  Amortization of intangible assets                     1,071          821
  Interest income                                        (448)         (88)
  Interest expense                                      7,703        6,935
  Other expense, net                                      125          162
  Change in fair value of interest rate swap               --        5,411
  Impairment of goodwill                                   --        6,525
  Stock-based expenses                                     --           37
  Stock-based compensation                                162          295
                                                   ----------   ----------
Adjusted EBITDA (as defined)                       $    8,434   $   10,997
                                                   ==========   ==========
                         CINEDIGM DIGITAL CINEMA CORP.
                    CONSOLIDATED STATEMENTS OF OPERATIONS
             (In thousands, except for share and per share data)
                                 (Unaudited)
                                                      Nine Months Ended
                                                         December 31,
                                                   -----------------------
                                                      2007         2008
                                                   ----------   ----------
Revenues                                           $   59,092   $   65,129
Costs and expenses:
Direct operating (exclusive of depreciation and
 amortization shown below)                             19,798       19,597
Selling, general and administrative                    17,127       13,711
Provision for doubtful accounts                           691          271
Research and development                                  503          207
Stock-based compensation                                  361          653
Impairment of goodwill                                     --        6,525
Depreciation of property and equipment                 20,950       24,394
Amortization of intangible assets                       3,210        2,669
                                                   ----------   ----------
    Total operating expenses                           62,640       68,027
                                                   ----------   ----------
Loss from operations                                   (3,548)      (2,898)
Interest income                                         1,174          311
Interest expense                                      (20,530)     (21,101)
Debt refinancing expense                               (1,122)          --
Other expense, net                                       (426)        (488)
Change in fair value of interest rate swap                 --       (3,846)
                                                   ----------   ----------
Net loss                                           $  (24,452)  $  (28,022)
                                                   ==========   ==========
Net loss per Class A and B common share - basic
 and diluted                                       $    (0.96)  $    (1.03)
                                                   ==========   ==========
Weighted average number of Class A and B common
 shares outstanding:
Basic and diluted                                  25,344,944   27,324,324
                                                   ==========   ==========
                    Cinedigm Digital Cinema Corp.
                     Adjusted EBITDA (as defined)
                  Reconciliation to GAAP Net Income
                           (In thousands)
                            (Unaudited)
                                                      Nine Months Ended
                                                         December 31,
                                                   -----------------------
                                                      2007         2008
                                                   ----------   ----------
Net loss                                           $(24,452)    $  (28,022)
Add Back:
  Amortization of software development                    448          601
  Depreciation of property and equipment               20,950       24,394
  Amortization of intangible assets                     3,210        2,669
  Interest income                                      (1,174)        (311)
  Interest expense                                     20,530       21,101
  Debt refinancing expense                              1,122           --
  Other expense, net                                      426          488
  Change in fair value of interest rate swap               --        3,846
  Impairment of goodwill                                   --        6,525
  Stock-based expenses                                     --          156
  Stock-based compensation                                361          653
                                                   ----------   ----------
Adjusted EBITDA (as defined)                       $   21,421   $   32,100
                                                   ==========   ==========
                     CINEDIGM DIGITAL CINEMA CORP.
                     CONSOLIDATED BALANCE SHEETS
                 (In thousands, except for share data)
                                                    March 31,  December 31,
                                                      2008         2008
                                                   ----------   ----------
                        ASSETS                                  (Unaudited)
Current assets
  Cash and cash equivalents                        $   29,655   $   22,565
  Accounts receivable, net                             21,494       16,400
  Unbilled revenue, current portion                     6,393        5,451
  Deferred costs                                        3,859        3,803
  Prepaid and other current assets                      1,316        1,986
  Notes receivable, current portion                       158          913
                                                   ----------   ----------
Total current assets                                   62,875       51,118
  Property and equipment, net                         269,031      246,980
  Intangible assets, net                               13,592       11,473
  Capitalized software costs, net                       2,777        3,001
  Goodwill                                             14,549        8,024
  Deferred costs, net of current portion                6,595        4,712
  Unbilled revenue, net of current portion              2,075        1,755
  Notes receivable, net of current portion              1,220        1,002
  Security deposits                                       408          425
  Accounts receivable, net of current portion             299          299
  Restricted cash                                         255          255
                                                   ----------   ----------
Total assets                                       $  373,676   $  329,044
                                                   ==========   ==========
        LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
  Accounts payable and accrued expenses            $   25,213   $    9,682
  Current portion of notes payable                     16,998       24,729
  Current portion of deferred revenue                   6,204        5,511
  Current portion of customer security deposits           333          358
  Current portion of capital leases                        89          128
                                                   ----------   ----------
Total current liabilities                              48,837       40,408
  Notes payable, net of current portion               250,689      232,416
  Capital leases, net of current portion                5,814        5,785
  Deferred revenue, net of current portion                283          953
  Customer security deposits, net of current portion       46           34
  Preferred stock subscription proceeds                    --        2,000
  Fair value of interest rate swap                         --        3,846
                                                   ----------   ----------
Total liabilities                                     305,669      285,442
                                                   ----------   ----------
Commitments and contingencies
Stockholders' equity:
  Class A common stock, $0.001 par value per
   share; 40,000,000 and 65,000,000 shares
   authorized at March 31, 2008 and December 31,
   2008, respectively; 26,143,612 and 27,104,091
   shares issued and 26,092,172 and 27,052,651
   shares outstanding at March 31, 2008 and
   December 31, 2008, respectively                          26           27
  Class B common stock, $0.001 par value per
   share; 15,000,000 shares authorized; 733,811
   shares issued and outstanding at each of March
   31, 2008 and December 31, 2008                            1           1
  Additional paid-in capital                           168,844     172,460
  Treasury Stock, at cost; 51,440 Class A shares          (172)       (172)
  Accumulated deficit                                 (100,692)   (128,714)
                                                   ----------   ----------
Total stockholders' equity                             68,007       43,602
                                                   ----------   ----------
Total liabilities and stockholders' equity         $  373,676   $  329,044
                                                   ==========   ==========

Contact:

Suzanne Moore
Cinedigm
973.290.0080
Email Contact


SOURCE: Cinedigm Digital Cinema Corp.

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