MONTREAL, August 11, 2006 /CNW Telbec/ - M8 Entertainment Inc. (“M8” or the “Corporation”) (TSX: MEE.A and MEE.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 ended June 30, 2006.
For the quarter ended June 30, 2006, net loss was $11.3million, as compared to a net gain of $0.9 million for quarter ended June 30, 2005.
Operating revenue decreased to $7.0 million for the current quarter as compared to $17.9 million for the quarter ended June 30, 2005.
“The net loss reported by the Corporation resulted primarily from a writedown in the deferred tax benefit previously established by the Corporation. This writedown was necessitated due to a re-evaluation of the likely future benefit of such deferred taxes,” stated Devin Cutler, Vice President of Finance and Controller. “In addition, writedowns were taken on several recently produced films due to changes in the perceived ultimate value of these films.”
Total assets of the Corporation decreased from $58.5 million as of December 31, 2005 to $30.0 million as of June 30, 2006. Likewise, total liabilities of the Corporation decreased from $41.7 million as of December 31, 2005 to $32.3 million as of June 30, 2006, 2006.
Shareholder's Equity decreased from $16.8 million as at December 31, 2005 to a deficit of $2.3 million as at June 30, 2006. However, Shareholder's Equity would have been $9.5 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 the Corporation has experienced losses over the last year and a half,” stated Sammy Lee, Chairman of the Corporation, “we expect to announce some exciting new projects during the remainder of fiscal year 2006 that will highlight the profit-making potential of the Corporation's slate going forward. ”
“We have high hopes for several of our films that have not yet been released in the United States,” stated Stewart Hall, Co-President. “These include Lovewrecked, starring Amanda Bynes, whose previous films have performed excellently at the theatrical box office. In addition, we will be commencing principal photography of our next theatrical production shortly, a project that we are very excited about and that we hope will mark a turnaround in the Corporation's fortunes.”
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