M8 Entertainment Inc. (“M8” or the “Corporation”) (TSX: MEE.MV.A and MEE.SV.B), a leading film entertainment company engaged in the production, financing, acquisition, and worldwide licensing of theatrical feature films in a variety of genres, reported today financial results of operations for the three months ended September 30, 2005.
For the three months ended September 30, 2005, net losses were $3.6 million as compared to net earnings of $0.3 million for the three months ended September 30, 2004.
Operating revenue increased to $9.6 million for the three months ended September 30, 2005 from $1.9 million for the three months ended September 30, 2004.
Production and distribution expenses increased from $4.4 million for the three months ended September 30, 2004 to $11.7 million for the three months ended September 30, 2005.
“The increase in revenue was attributable primarily to recognition of sales for the films Man About Town, Running Scared, and Monster,” stated Devin Cutler, Vice President of Finance and Controller of the Corporation. “Unfortunately, this increase was more than offset by an increase in production and distribution expenses relating primarily to write-downs taken on several films. These write-downs were enacted due to changes in the estimates of ultimate revenues for the films.”
“Despite the loss for the quarter,” continued Mr. Cutler, “we are hopeful that sales on our current films, such as Lovewrecked and Man About Town, as well as continued exploitation of our film library and our slate of film acquisitions, will help to reverse the losses for the quarter.”
Total assets of the Corporation decreased from $85.4 million as of June 30, 2005 to $76.3 million as of September 30, 2005. Total liabilities decreased from $54.6 million as at June 30, 2005 to $50.6 million as at September 30, 2005.
“We would have hoped for stronger results for the quarter,” stated Sammy Lee, Chairman of the Corporation. “However, with Man About Town having been completed last quarter and Lovewrecked finished currently, combined with our announced slate of films for 2006, we are nothing but optimistic about the Corporation's prospects for the future.”
“In addition to our current productions and a strong slate of future productions, the Corporation has recently acquired six films for distribution,” stated Jenna Sanz-Agero, President of the Corporation. “These acquisitions will add to the Corporation's revenue stream without posing any significant increase to its costs and should serve to bolster the Corporation's bottom line for the subsequent fiscal year.” |
