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 quarter endedMarch 31, 2006.
For the quarter ended March 31, 2006, net loss was $7.5million, as compared to a net loss of $2.6 million for quarter ended March 31, 2005.
Operating revenue decreased to $4.5 million for the current quarter as compared to $6.6 million for the quarter ended March 31, 2005.
"The net loss reported by the Corporation resulted primarily from writedowns of estimated proceeds from the film Running Scared, which was released domestically in March of 2006," statedDevin Cutler , Vice President of Finance and Controller. "The film performed significantly under management's expectations, despite having been released on over 1600 screens."
Total assets of the Corporation decreased from $58.5 million as of December 31, 2005 to $47.9 million as of March 31, 2006. Likewise, total liabilities of the Corporation decreased from $41.7 million as of December 31, 2005 to $38.7 million as of March 31, 2006.
Shareholder's Equity decreased from $16.8 million as at December 31, 2005 to $9.3 million as at March 31, 2006. However, Shareholder's Equity would have been $9.2 million greater if the effects of cumulative currency translation adjustments, resulting primarily from the devaluation of the US Dollar as compared to the Canadian Dollar over the last few years, had been factored out.
"While we are certainly disappointed at the US box office performance of Running Scared," stated Sammy Lee, Chairman of the Corporation, "we are hopeful that the film's video release, along with its performance in the international marketplace, will allow the film to contribute further profits to the Corporation's bottom line."
"The Corporation is looking forward to its continuing slate of releases, including Lovewrecked, which will be released by The Weinstein Company, and Man About Town, to be released by Lions Gate," stated Jenna Sanz-Agero, Co-President. "In addition, we have what we feel is an exciting slate of new films going into production in the latter part of 2006 and in 2007. Armed with these projects, we look forward to a return to profitability in the near future." |
