June 10, 2010

Cinedigm Digital Cinema Corp. Announces Fiscal Year 2010 and Fourth Quarter Results

Solid Q4 Year Over Year EBITDA Improvement as Phase 2 Takes Hold

MORRISTOWN, NJ, Jun 10, 2010 (MARKETWIRE via COMTEX News Network) -- Cinedigm Digital Cinema Corp. ("Cinedigm" or the "Company") (NASDAQ: CIDM) reported its fiscal fourth quarter and year end results as of March 31, 2010 with revenues of $16.4 million and $72.2 million, respectively. For the quarter revenues declined less than 1% from the previous year and for the full fiscal year 2010, revenues decreased 6.8% predominantly due to the contracted 16% step down in virtual print fee rates charged to the major movie studios, offset by revenue gains as the Company benefitted from Phase 2 deployments and better than expected screen turns in the seasonally slow fiscal fourth quarter. The Company posted Adjusted EBITDA(1) (defined below) of $8.4 million, increasing 20.8% from $6.9 million in the fourth quarter one year ago as a result of increased digital cinema services fees and the positive impact of previously completed expense reductions. Adjusted EBITDA for the full year was $37.5 million, modestly lower than the 2009 Adjusted EBITDA of $38.3 million. The net loss in the fourth quarter of $15.0 million or $0.52 per share and the net loss for the year of $29.5 million or $1.03 per share include various non-cash items aggregating to $14.5 million or $0.51 per share. The Company ended the fiscal 2010 fourth quarter with $24.2M of cash and investments on its balance sheet of which $15.1 million is restricted for various uses, including the payment of interest expense. The fourth quarter and full year results reflect the reclassification of the Company's Pavilion movie theater to discontinued operations as Cinedigm is engaged in a plan to sell the theater.

FISCAL 2010 AND RECENT HIGHLIGHTS

--  Revenues for the fiscal year 2010 fourth quarter were $16.4 million
    compared to $16.5 million in the year-ago period. Revenues for the
    fiscal year 2010 were $72.2 million compared to $77.5 million in
    fiscal year 2009. The full year decrease was primarily due to the
    November 2008 originally contracted 16% step-down in Virtual Print Fee
    (VPF) rates charged to the major movie studios via long term contracts
    and to lower advertising revenues. Partially offsetting these declines
    were Phase 2-related digital cinema services and software license
    fees.


--  Adjusted EBITDA in the fourth quarter was $8.4 million, an increase
    compared to the year-ago period of $6.9 million. Adjusted EBITDA for
    the fiscal year 2010 was $37.5 million, a small decrease compared to
    the fiscal year 2009 Adjusted EBITDA of $38.3 million. The strength of
    the Adjusted EBITDA growth as compared to revenue declines in each
    period was due to the growth of digital cinema service fees and the
    reduction in both direct operating costs, and selling, general and
    administrative expenses in the comparative periods from continued
    careful expense management. The primary expense reductions were in the
    areas of personnel costs and professional fees.


--  EBITDA, excluding our non-recourse Phase 1 and 2 deployments, improved
    sequentially to $(0.5) million in Q4 compared to cumulative $(4.4)
    million of EBITDA in those same divisions through the first 9 months
    of fiscal 2010 as Cinedigm began to benefit from positive operating
    leverage inherent in the expansion of digital cinema.


--  In May 2010, all of the Company's Phase 1, non-recourse debt was
    refinanced with $172.5 million of new non-recourse debt on more
    favorable terms than the prior facility, including a reduction in
    interest rates and greater covenant flexibility, both of which we
    expect to enable Cinedigm to receive its contracted service fees. The
    new non-recourse facility has a 6-year maturity and received a Ba1
    rating from Moody's.


--  During the quarter, Cinedigm signed 779 total screens for Phase 2
    bringing total screens under Master License Agreements (MLAs) to 1,543
    at March 31, 2010. Since the end of the quarter, an additional 101
    screens have been added for a total of 1,644 screens under MLAs as of
    June 10, 2010.


--  Also during the quarter, Cinedigm, signed the first Exhibitor-Buyer
    Phase 2 MLAs using the National Association of Theatre Owners --
    Cinema Buying Group contract.



Bud Mayo, Chief Executive Officer of Cinedigm, stated, "Overall, during the year, we've seen a major shift in momentum. Growth is returning to Cinedigm and we expect it to be evidenced in the fiscal 2011 financial results. Our balance sheet and cash flows are stronger. Our global leadership in digital cinema is continuing across all of our business units. The transformative effect of digital cinema is taking hold with well attended 3D live events and week-long theatrical engagements of content that could not have made it into the theatre five years ago."

PHASE 2 UPDATE Mayo added, "The completion of the NATO Cinema Buying Group Exhibitor-Buyer contract was a hallmark event this year and the culmination of more than a year of work. Nine CBG member theatres have signed agreements to participate in this new contract, and a total of 1,644 screens have joined the Phase 2 deployment plan. Cinedigm signed Phase 2 VPF agreements with Warner Bros. and Overture Films and now has VPF agreements with eight studios. To date we have installed 625 Phase 2 screens and more than 4,000 screens in total."

CORPORATE UPDATE Mayo concluded, "This was a year full of firsts, particularly in the Cinedigm Entertainment Group or 'CEG.' CEG distributed two independent feature movies, each of which included live virtual premieres with the actors, delivered via satellite to theatres across the country. CEG also launched its 'Million Dollar Movie' program, which helps independent movie producers obtain distribution to digital cinemas. The group launched its 3-D Concert Series with the Dave Matthews Band in 3-D which went to 520 theatres, a record for any alternative event we've distributed and followed that in the spring with PHISH 3D which went to 223 theatres. In addition, CEG continued to enhance its CineLive 3D program with the successful broadcast of the NCAA Men's Basketball Final Four and National Finals in early April. Finally, we are also growing our content delivery business as industry-wide digital deployments accelerate and we announced plans to double our satellite network."

CONFERENCE CALL NOTIFICATION Cinedigm will host a conference call to discuss its financial results at 9:00 a.m. Eastern on Thursday, June 10, 2010. The conference can be accessed by dialing 877.754.5303 or 678.894.3030 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 at http://investor.cinedigm.com/events.cfm. A replay of the call will be available after 12:00 p.m. Eastern at 800.642.1687 or 706.645.9291, conference ID 79533532. The replay will be accessible through Thursday, June 17th.

About Cinedigm Cinedigm is the leader in providing the services, experience, technology and content critical to transforming movie theaters into digital and networked entertainment centers. The Company is a technology and services integrator that works with Hollywood movie studios, independent movie distributors, and exhibitors to bring movies in digital cinema format to audiences across the country. Cinedigm's digital cinema deployment organization, software, unique combined satellite and hard drive digital movie delivery network; pre-show in-theater advertising services; and distribution platform for alternative content such as CineLive(R) 3-D and 2-D sports and concerts, thematic programming and independent movies provide a complete suite of services required to enable the digital theater conversion. Cinedigm(TM) and Cinedigm Digital Cinema Corp.(TM) are trademarks of Cinedigm Digital Cinema Corp. www.cinedigm.com [CIDM-E]

(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.

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-Q and annual report on Form 10-K, 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.



                       CINEDIGM DIGITAL CINEMA CORP.
                   CONSOLIDATED STATEMENTS OF OPERATIONS
            (In thousands, except for share and per share data)
                                (Unaudited)

                                                      Three Months Ended
                                                          March 31,
                                                  -------------------------
                                                      2009          2010
                                                  -----------   -----------


Revenues                                          $    16,494   $    16,355

Costs and expenses:
Direct operating (exclusive of depreciation and
 amortization shown below)                              5,108         4,514
Selling, general and administrative                     4,284         3,466
Provision for doubtful accounts                           316           127
Research and development                                  (19)           67
Stock-based compensation                                  291           368
Depreciation and amortization of property and
 equipment                                              8,009         8,158
Amortization of intangible assets                         765           722
                                                  -----------   -----------
     Total operating expenses                          18,754        17,422
                                                  -----------   -----------

Loss from continuing operations before other
 expense                                               (2,260)       (1,067)

Interest income                                            60            77
Interest expense                                       (6,160)       (8,843)
Other expense, net                                       (266)         (326)
Change in fair value of interest rate swap               (683)          918
Change in fair value of warrant liability                   -        (5,500)
                                                  -----------   -----------
Net loss from continuing operations                    (9,309)      (14,741)

Loss from discontinued operations                         (37)         (219)
                                                  -----------   -----------
Net loss                                               (9,346)      (14,960)

Preferred stock dividends                                 (50)         (100)
                                                  -----------   -----------
Net loss attributable to common stockholders      $    (9,396)  $   (15,060)
                                                  ===========   ===========
Net loss per Class A and B common share - basic
 and diluted
Loss from continuing operations                   $     (0.34)  $     (0.52)
Loss from discontinued operations                       (0.00)        (0.01)
                                                  -----------   -----------
                                                  $     (0.34)  $     (0.53)
                                                  ===========   ===========
Weighted average number of Class A and B common
 shares outstanding:
Basic and diluted                                  27,941,161    28,781,294
                                                  ===========   ===========





                       Cinedigm Digital Cinema Corp.
                        Adjusted EBITDA (as defined)
                     Reconciliation to GAAP Net Income
                               (In thousands)
                                (Unaudited)

                                                      Three Months Ended
                                                          March 31,
                                                  -------------------------
                                                      2009          2010
                                                  -----------   -----------
Net loss from continuing operations               $    (9,309)  $   (14,741)
Add Back:
   Amortization of software development                    76           173
   Depreciation and amortization of property and
    equipment                                           8,009         8,158
   Amortization of intangible assets                      765           722
   Interest income                                        (60)          (77)
   Interest expense                                     6,160         8,843
   Other expense, net                                     266           326
   Change in fair value of interest rate swap             683          (918)
   Change in fair value of warrants                         -         5,500
   Stock-based expenses                                    37             -
   Stock-based compensation                               291           368
                                                  -----------   -----------
Adjusted EBITDA (as defined)                      $     6,918   $     8,354
                                                  ===========   ===========





                       CINEDIGM DIGITAL CINEMA CORP.
                   CONSOLIDATED STATEMENTS OF OPERATIONS
            (In thousands, except for share and per share data)
                                (Unaudited)

                                                     Twelve Months Ended
                                                          March 31,
                                                  -------------------------
                                                      2009          2010
                                                  -----------   -----------
Revenues                                          $    77,466   $    72,205

Costs and expenses:
Direct operating (exclusive of depreciation and
 amortization shown below)                             21,423        19,217
Selling, general and administrative                    17,818        15,426
Provision for doubtful accounts                           587           535
Research and development                                  188           218
Stock-based compensation                                  943         1,479
Impairment of goodwill                                  4,565             -
Depreciation and amortization of property and
 equipment                                             32,016        32,540
Amortization of intangible assets                       3,434         2,977
                                                  -----------   -----------
     Total operating expenses                          80,974        72,392
                                                  -----------   -----------

Loss from continuing operations before other
 expense                                               (3,508)         (187)

Interest income                                           371           313
Interest expense                                      (26,481)      (33,677)
Other expense, net                                       (753)         (734)
Gain on extinguishment of debt                              -        10,744
Change in fair value of interest rate swap             (4,529)        2,994
Change in fair value of warrant liability                   -        (8,463)
                                                  -----------   -----------
Net loss from continuing operations                   (34,900)      (29,010)

Loss from discontinued operations                      (2,468)         (498)
                                                  -----------   -----------
Net loss                                              (37,368)      (29,508)

Preferred stock dividends                                 (50)         (400)
                                                  -----------   -----------
Net loss attributable to common stockholders      $   (37,418)  $   (29,908)
                                                  ===========   ===========
Net loss per Class A and B common share - basic
 and diluted
Loss from continuing operations                   $     (1.27)  $     (1.03)
Loss from discontinued operations                       (0.09)        (0.02)
                                                  -----------   -----------
                                                  $     (1.36)  $     (1.05)
                                                  ===========   ===========
Weighted average number of Class A and B common
 shares outstanding:
Basic and diluted                                  27,476,420    28,624,154
                                                  ===========   ===========





                       Cinedigm Digital Cinema Corp.
                        Adjusted EBITDA (as defined)
                     Reconciliation to GAAP Net Income
                               (In thousands)
                                (Unaudited)

                                                     Twelve Months Ended
                                                          March 31,
                                                  -------------------------
                                                      2009          2010
                                                  -----------   -----------
Net loss from continuing operations               $   (34,900)  $   (29,010)
Add Back:
   Amortization of software development                   677           659
   Depreciation and amortization of property and
    equipment                                          32,016        32,540
   Amortization of intangible assets                    3,434         2,977
   Interest income                                       (371)         (313)
   Interest expense                                    26,481        33,677
   Other expense, net                                     753           734
   Extinguishment of debt                                   -       (10,744)
   Impairment of goodwill                               4,565             -
   Change in fair value of interest rate swap           4,529        (2,994)
   Change in fair value of warrants                         -         8,463
   Stock-based expenses                                   193             -
   Stock-based compensation                               943         1,479
                                                  -----------   -----------
Adjusted EBITDA (as defined)                      $    38,320   $    37,468
                                                  ===========   ===========





                       CINEDIGM DIGITAL CINEMA CORP.
                        CONSOLIDATED BALANCE SHEETS
                   (In thousands, except for share data)
                                 (Unaudied)

                                                          March 31,
                                                  -------------------------
                                                      2009          2010
                                                  -----------   -----------
                     ASSETS
Current assets
   Cash and cash equivalents                      $    15,828   $     9,094
   Restricted available-for-sale investments                -         5,927
   Accounts receivable, net                            13,847        13,510
   Deferred costs                                       3,936         3,046
   Unbilled revenue, current portion                    3,082         4,337
   Prepaid and other current assets                     1,569         1,412
   Notes receivable, current portion                      616           737
   Assets held for sale                                 7,656         7,255
                                                  -----------   -----------
Total current assets                                   46,534        45,318
   Restricted available-for-sale investments                -         2,004
   Restricted cash                                     10,756         7,168
   Security deposits                                      385           280
   Property and equipment, net                        237,536       215,814
   Intangible assets, net                              10,707         7,730
   Capitalized software costs, net                      3,653         3,831
   Goodwill                                             6,261         6,261
   Deferred costs                                       3,967         6,763
   Unbilled revenue, net of current portion             1,253           964
   Notes receivable, net of current portion               959           816
   Accounts receivable, net of current portion            386           198
                                                  -----------   -----------
Total assets                                      $   322,397   $   297,147
                                                  ===========   ===========

      LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
   Accounts payable and accrued expenses          $    14,591   $     7,820
   Current portion of notes payable, non-
    recourse                                           24,824        26,508
   Current portion of notes payable                       424           185
   Current portion of deferred revenue                  5,533         5,892
   Current portion of customer security deposits          314            60
   Current portion of capital leases                       69           171
   Liabilities as part of held for sale assets          6,178         6,112
                                                  -----------   -----------
Total current liabilities                              51,933        46,748
   Notes payable, non-recourse, net of current
    portion                                           170,624       146,793
   Notes payable, net of current portion               55,333        69,669
   Capital leases, net of current portion                 125            78
   Warrant liability                                        -        19,195
   Fair value of interest rate swap                     4,529         1,535
   Deferred revenue, net of current portion             1,057         1,828
   Customer security deposits, net of current
    portion                                                 9             9
                                                  -----------   -----------
Total liabilities                                     283,610       285,855
                                                  -----------   -----------
Commitments and contingencies
Stockholders' equity:
   Preferred stock, $0.001 par value per share;
    15,000,000 shares authorized; Series A 10%-
    $0.001 par value per share; 20 shares
    authorized; 8 shares issued and outstanding,
    at March 31, 2009 and March 31, 2010,
    respectively. Liquidation preference $4,050         3,476         3,583
   Class A common stock, $0.001 par value per
    share; 65,000,000 and 75,000,000 shares
    authorized at March 31, 2009 and March 31,
    2010, respectively; 27,544,315 and
    28,104,235 issued and 27,492,875 and
    28,052,795 shares outstanding at March 31,
    2009 and March 31, 2010, respectively                  27            28
   Class B common stock, $0.001 par value per
    share; 15,000,000 shares authorized; 733,811
    shares issued and outstanding at March 31,
    2009 and March 31, 2010, respectively                   1             1
   Additional paid-in capital                         173,565       175,937
   Treasury Stock, at cost; 51,440 Class A
    shares                                               (172)         (172)
   Accumulated deficit                               (138,110)     (168,018)
   Accumulated other comprehensive loss                     -           (67)
                                                  -----------   -----------
Total stockholders' equity                             38,787        11,292
                                                  -----------   -----------
                                                  $   322,397   $   297,147
                                                  ===========   ===========


Contact:

Adam M. Mizel
Cinedigm Digital Cinema
(973) 290.0080
Email Contact


SOURCE: Cinedigm Digital Cinema Corp.

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