Published:
Entertainment Distribution Company Announces First Quarter 2008 Results
NEW YORK, May 8 /PRNewswire-FirstCall/ -- Entertainment Distribution
Company, Inc. (Nasdaq: EDCI) ("EDCI"), the majority shareholder of
Entertainment Distribution Company, LLC ("EDC, LLC") a global and independent
provider of supply chain services to the home entertainment market, today
reported first quarter financial results for the period ending March 31, 2008.
Highlights (for EDCI and its subsidiaries (the "Company") on a
consolidated basis unless noted):
-- Revenue of $83.1 million for the first quarter compared to $84.0
million for the same quarter last year.
-- Net loss of $(6.2) million, or $(0.09) per diluted share, for the first
quarter compared to net loss of $(5.9) million, or $(0.09) per diluted
share, for the first quarter of last year.
-- First quarter EBITDA from continuing operations of $2.2 million,
compared to EBITDA from continuing operations of $(1.2) million for the
same quarter last year.
-- As of March 31, 2008, total unrestricted cash and short-term
investments of $84.6 million, of which $54.1 million is held at EDCI
and $30.5 million is held at EDC, LLC.
-- As of March 31, 2008, total long-term debt of $46.9 million, net of
unamortized discount.
Jordan M. Copland, Interim Chief Executive Officer and Chief Financial
Officer of EDCI, stated, "During the first quarter, we effectively executed on
our operating strategy. While we faced a difficult business environment as a
result of industry and macro economic challenges, our operating performance
was slightly ahead of plan. We benefited from the elimination of several
non-recurring expenses and made solid strides in our efficiency and cost
containment efforts, which are reflected in our improved gross profit and
EBITDA results. We are proactively managing our business to ensure we have
the proper infrastructure to service our customers and maximize our cash flow
generation. EDCI continues to review strategic acquisition opportunities."
Conference Call
The Company will host a conference call to discuss its first quarter 2008
financial results today at 4:30 p.m. ET. To access the conference call, please
dial 973-582-2854 and reference pass code 45500254. A live webcast of the
conference call will also be available on the Company's corporate Web site,
located at www.edcllc.com. A replay of the conference call will be available
through midnight ET on Thursday, May 15, 2008. The replay can be accessed by
dialing 706-645-9291. The pass code for the replay is 45500254.
Summary of First Quarter 2008
For the first quarter of 2008, the Company reported revenue of $83.1
million compared to $84.0 million for the first quarter of 2007. The decrease
is primarily attributable to a decline in volumes from our U.S. operations,
offset by the impact of favorable exchange rate fluctuations.
The Company had EBITDA from continuing operations of $2.2 million in the
first quarter of 2008, as compared to EBITDA from continuing operations of
$(1.2) million in the first quarter of 2007. EBITDA is a non-GAAP financial
measure. A reconciliation between EBITDA and the most directly comparable
GAAP financial measure is provided following the Consolidated Financial
Statements included in this release. The reconciliation also includes a
description of how the Company calculates EBITDA. EBITDA from continuing
operations in the first quarter of 2007 included approximately $1.9 million of
non-recurring costs associated with stock option investigation and litigation
legal expenses and consulting costs.
The Company reported a net loss from continuing operations of $(7.4)
million for the first quarter of 2008, or $(0.11) per diluted share. This
compares to a net loss from continuing operations of $(6.7) million, or
$(0.10) per diluted share, for the first quarter of 2007.
For the first quarter, the Company reported net loss of $(6.2) million, or
($0.09) per diluted share, which compares to net loss $(5.9) million, or
$(0.09) per diluted share, for the first quarter of 2007.
Guidance
The Company is reconfirming its previously issued guidance for the
full-year 2008. For 2008 the Company expects EBITDA to be at the same level
or slightly higher than 2007 EBITDA. The Company's guidance assumes global
industry decline rates for the full-year to be approximately 10%-12%. In
addition, this guidance is largely based on the current release schedules from
customers and the Company's expectation that current cost initiatives will
deliver savings of approximately $10 million in 2008. Any changes in these
assumptions could materially impact the Company's expectations.
About Entertainment Distribution Company
Entertainment Distribution Company, Inc. (Nasdaq: EDCI) is the majority
shareholder of Entertainment Distribution Company, LLC ("EDC, LLC"), a global
and independent provider of supply chain services to the home entertainment
market. EDC, LLC serves every aspect of the manufacturing and distribution
process and is one of the largest providers in the industry. Its clients
include some of the world's best-known music, movies and gaming companies.
Headquartered inNew York, EDC, LLC's operations include manufacturing and
distribution facilities throughoutNorth America and inHannover, Germany, and
a manufacturing facility inBlackburn, UK. For more information, please visit
www.edcllc.com.
Safe Harbor Statement
This news release contains statements that may be forward looking within
the meaning of applicable securities laws. The statements may include
projections regarding future revenues and earnings results, and are based upon
the Company's current forecasts, expectations and assumptions, which are
subject to a number of risks and uncertainties that could cause the actual
outcomes and results to differ materially. Some of these results and
uncertainties are discussed in the Company's most recently filed Annual Report
on Form 10-K, as amended. These factors include, but are not limited to
restructuring activities; potential intellectual property infringement claims;
potential acquisitions and strategic investments; volatility of stock price;
ability to attract and retain key personnel; competition; variability of
quarterly results and dependence on key customers; potential market changes
resulting from rapid technological advances; proprietary technology; potential
changes in government regulation; international business risks; continuation
and expansion of third party agreements; sensitivity to economic trends and
customer preferences; increased costs or shortages of raw materials or energy;
dependence on Universal Music Group; potential inability to manage successful
production; advances in technology and changes in customer demands;
variability in production levels; and development of digital distribution
alternatives including copying and distribution of music and video files. The
Company assumes no obligation to update any forward-looking statements and
does not intend to do so except where legally required.
ENTERTAINMENT DISTRIBUTION COMPANY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended March 31,
2008 2007
(In thousands, except per
share amounts)
REVENUES:
Product revenues $62,328 $64,469
Service revenues 20,802 19,541
Total Revenues 83,130 84,010
COST OF REVENUES:
Cost of product revenues 56,203 57,763
Cost of service revenues 15,690 15,403
Total Cost of Revenues 71,893 73,166
GROSS PROFIT 11,237 10,844
OPERATING EXPENSES:
Selling, general and administrative expense 12,727 15,232
Amortization of intangible assets 2,383 2,034
Total Operating Expenses 15,110 17,266
OPERATING LOSS (3,873) (6,422)
OTHER INCOME (EXPENSE):
Interest income 1,112 1,157
Interest expense (1,119) (1,299)
Loss on currency swap, net (2,625) (357)
Gain (loss) on currency transaction, net (561) 109
Other income, net 12 11
Total Other Income (Expense) (3,181) (379)
LOSS FROM CONTINUING OPERATIONS BEFORE INCOME
TAXES AND MINORITY INTEREST (7,054) (6,801)
Income tax expense (benefit) 483 (86)
Minority interest income (150) -
LOSS FROM CONTINUING OPERATIONS (7,387) (6,715)
DISCONTINUED OPERATIONS, NET OF TAX:
INCOME (LOSS) FROM DISCONTINUED OPERATIONS 1,167 (304)
GAIN ON SALE OF MESSAGING BUSINESS - 1,088
NET LOSS $(6,220) $(5,931)
LOSS PER WEIGHTED AVERAGE COMMON SHARE (1):
Loss from continuing operations (0.11) (0.10)
Discontinued Operations:
Income (loss) from discontinued operations 0.02 -
Gain on sale of Messaging business - 0.02
Net loss per weighted average common share $(0.09) $(0.09)
LOSS PER DILUTED COMMON SHARE
Loss from continuing operations (0.11) (0.10)
Discontinued Operation:
Income (loss) from discontinued operations 0.02 -
Gain on sale of Messaging business - 0.02
Net loss per diluted weighted average
common share $(0.09) $(0.09)
(1) Loss per weighted average common share amounts are rounded to the
nearest $.01; therefore, such rounding may impact individual amounts
presented.
ENTERTAINMENT DISTRIBUTION COMPANY, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, December 31,
2008 2007
(unaudited)
(In thousands, except share data)
ASSETS
Current Assets:
Cash and cash equivalents $63,200 $63,850
Restricted cash 2,003 1,940
Investments 21,401 29,589
Accounts receivable, net of allowances for
doubtful accounts of $3,873 and $3,328 for
2008 and 2007, respectively 29,913 35,577
Current portion of long-term receivable 477 515
Inventories, net 7,981 9,111
Prepaid expenses and other current assets 19,381 16,180
Deferred income taxes 287 277
Total Current Assets 144,643 157,039
Restricted cash 27,540 26,015
Property, plant and equipment, net 54,350 55,245
Long-term receivable 4,471 4,244
Intangible assets 44,691 44,604
Deferred income taxes 1,817 1,934
Other assets 7,191 6,940
TOTAL ASSETS $284,703 $296,021
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $25,963 $33,287
Accrued expenses and other liabilities 35,313 37,503
Income taxes payable 193 3,697
Deferred income taxes 126 126
Loans from employees 1,281 1,267
Current portion of long-term debt 25,143 24,364
Total Current Liabilities 88,019 100,244
Other non-current liabilities 13,677 12,185
Loans from employees 2,628 3,646
Long-term debt 21,726 21,589
Pension and other defined benefit obligations 39,315 36,155
Deferred income taxes 10,766 10,195
Total Liabilities 176,131 184,014
Minority interest in subsidiary company 5,621 5,771
Commitments and contingencies
Stockholders' Equity:
Preferred stock, $.01 par value; authorized:
5,000,000 shares, no shares issued
and outstanding - -
Common stock, $.02 par value; authorized:
200,000,000 shares, issued:
March 31, 2008 -- 70,158,052 shares; December
31, 2007 -- 70,155,940 shares 1,403 1,403
Additional paid in capital 369,705 369,665
Accumulated deficit (279,553) (273,333)
Accumulated other comprehensive income 12,071 8,501
Treasury stock at cost: March 31, 2008 --
1,500,000 shares; December
31, 2007 -- 0 shares (675) -
Total Stockholders' Equity 102,951 106,236
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $284,703 $296,021
Entertainment Distribution Company, Inc.
Summary Schedule of Non-GAAP Financial Data
(In thousands) Unaudited
The following summary of financial data shows the reconciliation of loss
from continuing operations, as determined in accordance with accounting
principles generally accepted inthe United States (GAAP), to EBITDA from
continuing operations, a non-GAAP measure.
EBITDA is defined as income (loss) from continuing operations before
interest expense (income), net, income taxes, and depreciation and
amortization and is presented because the Company believes that such
information is commonly used in the entertainment industry as one measure of a
company's operating performance. EBITDA from continuing operations is not
determined in accordance with generally accepted accounting principles, it is
not indicative of cash provided by operating activities, should not be used as
a measure of operating income and cash flows from operations as determined
under GAAP, and should not be considered in isolation or as an alternative to,
or to be more meaningful than, measures of performance determined in
accordance with GAAP. EBITDA, as calculated by the Company, may not be
comparable to similarly titled measures reported by other companies and could
be misleading unless all companies and analysts calculated EBITDA in the same
manner.
Three Months Ended
March 31,
2008 2007
Loss from continuing operations (7,387) (6,715)
Income tax provision (benefit) 483 (86)
Loss on currency swap, net 2,625 357
(Gain) loss on currency
transaction, net 561 (109)
Interest expense, net 7 142
Depreciation and amortization 5,882 5,268
Other income, net (12) (11)
EBITDA from continuing operations $2,159 $(1,154)
SOURCE Entertainment Distribution Company, Inc.
Copyright © 2008, PRNewswire
Copyright © 2008, NewsBlaze,
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