June 9, 2011

Cinedigm Digital Cinema Corp. Announces Strong Fiscal 2011 Operating Results

2011 Consolidated Revenue and Adjusted EBITDA Increase 16% and 20%, Respectively; Reports Positive Adjusted EBITDA From Non-Deployment Businesses for Fiscal Year for First Time in Company's History

MORRISTOWN, NJ and LOS ANGELES, CA -- (MARKET WIRE) -- 06/09/11 -- Cinedigm Digital Cinema Corp. (NASDAQ: CIDM), the global leader in the digital cinema industry, reported continued solid growth in its operational and financial performance in the fiscal fourth quarter and year ended March 31, 2011. Cinedigm also reported the first positive fiscal year Adjusted EBITDA(1) (defined below) from its non-deployment businesses in its history, underscoring its leadership position in building complementary business, technology and content services that leverage the growing digital cinema platform.

Revenues for the fiscal year ended March 31, 2011 were $79.9 million, representing a 15.8% increase from prior year's revenues of $69.0 million. The Company achieved Adjusted EBITDA of $45.4 million, increasing 20.3% from $37.7 million in the prior fiscal year. The net loss in the year of $(29.2) million, or $(0.95) per share compared to the net loss of ($29.5) million, or $(1.03) per share, in the prior fiscal year. The net loss for the year ended March 31, 2011 included losses related to various non-cash items and discontinued operations of $48.2 million, as compared to $36.1 million in the prior year which included a non-recurring gain on the extinguishment of note payable.

Revenues for the fiscal fourth quarter were $20.6 million, representing a 31.8% increase from prior year fourth quarter revenues of $15.6 million. The Company posted Adjusted EBITDA of $11.6 million for the fourth quarter, increasing 36.6% from the $8.5 million reported for the fourth quarter of the prior year. The net loss in the fourth quarter of $(7.3) million, or $(0.23) per share, represents a 51.5% improvement compared to the net loss of $(15.0) million, or $(0.51) per share, in the fourth quarter one year ago.

Chris McGurk, Chairman and Chief Executive Officer of Cinedigm, commented, "From a strategic, operational and financial standpoint, fiscal 2011 was an outstanding year for Cinedigm. We have continued to streamline the company's focus, directing our resources and growth efforts toward those businesses where we are confident we can be a market leader and capitalize on the growth opportunities presented by the rapidly expanding digital cinema platform, particularly software and content distribution. First and foremost, we made great progress in our deployment business this quarter, signing over 1,400 screens -- a multi-exhibitor record for the company. We now have 119 digital cinema exhibitor partners. Our software business also hit a significant milestone during the quarter with the signing of an overall services management agreement with AMC Theatres, the 2nd largest theatre chain in North America. Our content division continues to see increased activity, including the first ever wide-release 3D music performance with the Foo Fighters, the recently announced partnership with National Geographic Entertainment / YouTube for the documentary 'Life In A Day,' and the ongoing progress of The Cinedigm Network."

Adam M. Mizel, CFO and Chief Strategy Officer, added, "Cinedigm had an excellent quarter and year. In 2011 we achieved positive Adjusted EBITDA from our non-deployment businesses in the third and fourth fiscal quarters of the year, and for the full fiscal year, a trend that we fully expect to continue and accelerate in the current fiscal year."

Mr. Mizel noted that Adjusted EBITDA, exclusive of Phase I and Phase II deployment, was a positive $0.8 million in the fourth quarter, and $0.5 million for the full fiscal year, which is a significant improvement over fiscal 2010 Adjusted EBITDA losses of $(0.6) million and $(4.9) million, respectively.

On the digital cinema services side, Phase II digital system signings during the quarter were a record 1,402, resulting in 2,750 systems signed for the full fiscal year with 1,859 installed during the fiscal year and 2,195 total Phase II digital systems deployed to date.

"As we have consistently noted, each one thousand screens we deploy will add $2.0-$2.5 million of non-deployment EBITDA in the first twelve months through service fees, software license and maintenance fees, and delivery fees," Mr. Mizel continued.

"This is a very exciting time for Cinedigm," Mr. McGurk concluded. "The expanding digital screen platform provides Cinedigm with the ability to generate significant revenues and profits from the variety of software and services we provide, as well as aggressively pursue the high potential alternative content business on the digital cinema backbone. As a management team we are all committed to exploiting the many opportunities in front of us, and we are confident that a disciplined and focused approach will yield continued strong results to our bottom line, and of course shareholder value."

CONFERENCE CALL NOTIFICATION
Cinedigm will host a conference call to discuss its financial results at 9:00 a.m. Eastern Time on Thursday, June 9, 2011. The conference call can be accessed by dialing (877) 754-5303 or (678) 894-3030 at least five minutes prior to the start of the call. No passcode is required. An audio webcast of the call will be accessible at http://investor.cinedigm.com/events.cfm. Those who wish to listen to the conference call on the web should visit the Investor Relations section of the company's website at least 15 minutes prior to the event's broadcast. Then, follow the instructions provided to ensure that the necessary audio applications are downloaded and installed. These programs can be obtained at no charge.

A replay of the call will be available after 12:00 p.m. EDT at (800) 642-1687 or (706) 645-9291, conference ID 70824874. The replay will be accessible through 11:59 p.m. EDT on June 16, 2011.

About Cinedigm
Cinedigm is a leader in providing the services, experience, technology and content critical to transforming movie theaters into digital and networked entertainment centers. The Company partners 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, satellite and hard drive digital movie delivery network; pre-show in-theater advertising services; and marketing and distribution platform for alternative content such as CineLive® 3-D and 2-D sports and concerts, thematic programming and independent movies are a cornerstone of the digital cinema transformation. Cinedigm™ and Cinedigm Digital Cinema Corp.™ are trademarks of Cinedigm Digital Cinema Corp. www.cinedigm.com [CIDM-G]

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.

(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)



                           For the Three Months      For the Twelve Months

                              Ended March 31,           Ended March 31,

                         ------------------------  ------------------------

                             2011         2010         2011         2010

                         -----------  -----------  -----------  -----------

Revenues                 $    20,566  $    15,609  $    79,915  $    69,035

Costs and Expenses:

  Direct operating

   (exclusive of

   depreciation and

   amortization shown

   below)                      4,722        3,846       18,152       16,535

  Selling, general and

   administrative              4,932        3,634       19,935       16,134

  Provision for doubtful

   accounts                      146          127          581          535

  Research and

   development                    48           78          290          260

  Depreciation and

   amortization of

   property and

   equipment                   9,236        8,107       34,437       32,274

  Amortization of

   intangible assets             724          721        2,890        2,974

                         -----------  -----------  -----------  -----------

Total operating expenses      19,808       16,513       76,285       68,712

                         -----------  -----------  -----------  -----------

Income (loss) from

 operations                      758         (904)       3,630          323



  Interest income                 16           77          156          313

  Interest expense            (6,739)      (8,839)     (27,026)     (33,663)

  (Loss) gain on

   extinguishment of

   note payable                   --           --       (4,448)      10,744

  Other expense, net             (97)        (327)        (551)        (734)

  Change in fair value

   of interest rate swap        (199)         918       (1,326)       2,994

  Change in fair value

   of warrant liability           --       (5,500)       3,142       (8,463)

                         -----------  -----------  -----------  -----------

Net loss from continuing

 operations                   (6,261)     (14,575)     (26,423)     (28,486)



Loss from discontinued

 operations                   (1,001)        (385)      (2,813)      (1,022)

                         -----------  -----------  -----------  -----------

Net loss                      (7,262)     (14,960)     (29,236)     (29,508)

Preferred stock

 dividends                       (89)        (100)        (394)        (400)

                         -----------  -----------  -----------  -----------

Net loss attributable to

 common stockholders     $    (7,351) $   (15,060) $   (29,630) $   (29,908)

                         ===========  ===========  ===========  ===========

Net loss per Class A and

 Class B common share -

 basic and diluted

  Loss from continuing

   operations            $     (0.19) $     (0.51) $     (0.86) $     (1.00)

  Loss from discontinued

   operations                  (0.04)          --        (0.09)       (0.03)

                         -----------  -----------  -----------  -----------

                         $     (0.23) $     (0.51) $     (0.95) $     (1.03)

                         ===========  ===========  ===========  ===========

Weighted average number

 of Class A and Class B

 common shares

 outstanding: Basic and

 diluted                  32,144,731   28,781,294   30,794,102   28,624,154

                         ===========  ===========  ===========  ===========









                       Cinedigm Digital Cinema Corp.

                        Adjusted EBITDA (as defined)

                     Reconciliation to GAAP Net Income

                               (In thousands)

                                (Unaudited)



                           For the Three Months      For the Twelve Months

                              Ended March 31,           Ended March 31,

                         ------------------------  ------------------------

                             2011         2010         2011         2010

                         -----------  -----------  -----------  -----------

Net loss from continuing

 operations              $    (6,261) $   (14,575) $   (26,423) $   (28,486)

Add Back:

  Amortization of

   software development           65          173          636          659

  Depreciation and

   amortization of

   property and

   equipment                   9,236        8,107       34,437       32,274

  Amortization of

   intangible assets             724          721        2,890        2,974

  Interest income                (16)         (77)        (156)        (313)

  Interest expense             6,739        8,839       27,026       33,663

  Extinguishment of note

   payable                        --           --        4,448      (10,744)

  Other expense, net              97          327          551          734

  Change in fair value

   of interest rate swap         199         (918)       1,326       (2,994)

  Change in fair value

   of warrants                    --        5,500       (3,142)       8,463

  Stock-based expenses            --           --          104           --

  Stock-based

   compensation                  597          365        2,267        1,467

  Non-recurring CEO

   transition expenses           177           --        1,403           --

                         -----------  -----------  -----------  -----------

Adjusted EBITDA (as

 defined)                $    11,557  $     8,462  $    45,367  $    37,697

                         ===========  ===========  ===========  ===========



Adjustments related to

 the Phase I and Phase

 II Deployments:

  Depreciation and

   amortization of

   property and

   equipment                  (8,589)      (7,436)     (31,726)     (29,595)

  Amortization of

   intangible assets             (11)         (12)         (46)         (46)

  Stock-based

   compensation                   --           40           --          (74)

  Income from operations      (2,916)      (2,652)     (17,401)     (14,344)

  Intersegment services

   fees earned (1)               733        1,046        4,293        1,475

                         -----------  -----------  -----------  -----------

Adjusted EBITDA from

 non-deployment Phase I

 and Phase II businesses $       774  $      (552) $       487  $    (4,887)

                         ===========  ===========  ===========  ===========



(1)  Intersegment revenues of the Services segment represent service fees

     earned from the Phase I and Phase II Deployments.









                       CINEDIGM DIGITAL CINEMA CORP.

                        CONSOLIDATED BALANCE SHEETS

                   (In thousands, except for share data)

                                (Unaudited)



                                                           March 31,

                                                   ------------------------

                                                       2011         2010

                                                   -----------  -----------

                      ASSETS

Current assets

  Cash and cash equivalents                        $    10,748  $     9,094

  Restricted available-for-sale investments              6,480        5,927

  Accounts receivable, net                              19,701       13,265

  Deferred costs, current portion                        2,720        3,046

  Unbilled revenue, current portion                      6,939        4,335

  Prepaid and other current assets                       1,179        1,320

  Note receivable, current portion                         445          737

  Assets held for sale                                   4,593        8,231

                                                   -----------  -----------

Total current assets                                    52,805       45,955

  Restricted available-for-sale investments                 --        2,004

  Restricted cash                                        5,751        7,168

  Security deposits                                        178          254

  Property and equipment, net                          224,496      215,601

  Intangible assets, net                                 4,873        7,719

  Capitalized software costs, net                        3,767        3,831

  Goodwill                                               5,874        5,874

  Deferred costs, net of current portion                 7,570        6,763

  Unbilled revenue, net of current portion                 834          964

  Note receivable, net of current portion                1,296          816

  Accounts receivable, net of current portion               44          198

                                                   -----------  -----------

Total assets                                       $   307,488  $   297,147

                                                   ===========  ===========









                       CINEDIGM DIGITAL CINEMA CORP.

                        CONSOLIDATED BALANCE SHEETS

                   (In thousands, except for share data)

                          (Unaudited) (continued)



                                                           March 31,

                                                   ------------------------

                                                       2011         2010

                                                   -----------  -----------

       LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities

  Accounts payable and accrued expenses            $    10,232  $     7,761

  Current portion of notes payable, non-recourse        28,483       26,508

  Current portion of notes payable                         142          185

  Current portion of capital leases                         43          126

  Current portion of deferred revenue                    6,687        5,881

  Current portion of customer security deposits             60           12

  Liabilities as part of assets held for sale            6,022        6,315

                                                   -----------  -----------

Total current liabilities                               51,669       46,788

  Notes payable, non-recourse, net of current

   portion                                             164,071      146,793

  Notes payable, net of current portion                 78,175       69,669

  Capital leases, net of current portion                    18           38

  Warrant liability                                         --       19,195

  Interest rate swap                                     1,971        1,535

  Deferred revenue, net of current portion               9,788        1,828

  Customer security deposits, net of current

   portion                                                   9            9

                                                   -----------  -----------

  Total liabilities                                    305,701      285,855

                                                   -----------  -----------

Commitments and contingencies

Stockholders' Equity

Preferred stock, 15,000,000 shares authorized;

 Series A 10% - $0.001 par value per share; 20

 shares authorized; 7 and 8 shares issued and

 outstanding at March 31, 2011 and March 31, 2010,

 respectively. Liquidation preference $3,698             3,250        3,583

Class A common stock, $0.001 par value per share;

 75,000,000 shares authorized; 32,320,287 and

 28,104,235 shares issued and 32,268,847 and

 28,052,795 shares outstanding at March 31, 2011

 and March 31, 2010, respectively                           32           28

Class B common stock, $0.001 par value per share;

 15,000,000 shares authorized; 25,000 and 733,811

 shares issued and outstanding, at March 31, 2011

 and March 31, 2010, respectively                           --            1

  Additional paid-in capital                           196,420      175,937

  Treasury stock, at cost; 51,440 Class A shares          (172)        (172)

  Accumulated deficit                                 (197,648)    (168,018)

  Accumulated other comprehensive loss                     (95)         (67)

                                                   -----------  -----------

Total stockholders' equity                               1,787       11,292

                                                   -----------  -----------

Total liabilities and stockholders' equity         $   307,488  $   297,147

                                                   ===========  ===========



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Contact:



Adam M. Mizel

Cinedigm Digital Cinema

(973) 290.0080

amizel@cinedigm.com



David Walke

Investor Relations for Cinedigm

973-290-9980 ext. 175



Source: Cinedigm Digital Cinema

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