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 September 30, 2006.
For the quarter ended September 30, 2006, net earnings were $2.6 million, as compared to a net loss of $3.6 million for quarter ended September 30, 2005.
Operating revenue decreased to $8.0 million for the current quarter as compared to $9.6 million for the quarter ended September 30, 2005.
“The net earnings reported by the Corporation resulted primarily from a writedown of film costs pertaining to an investment in one of our films by our parent company,” stated Devin Cutler, Vice President of Finance and Controller. “This write-down was based on a revision of ultimate revenues in prior periods for the film Lovewrecked.”
Total assets of the Corporation decreased from $58.5 million as of December 31, 2005 to $29.1 million as of September 30, 2006. Likewise, total liabilities of the Corporation decreased from $41.7 million as of December 31, 2005 to $29.0 million as of September 30, 2006, 2006.
Shareholder's Equity decreased from $16.8 million as at December 31, 2005 to $0.1 million as at September 30, 2006. However, Shareholder's Equity would have been $9.8 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.
“We are happy to report net earnings for the period after several quarters of losses,” stated Sammy Lee, Chairman of the Corporation, “and we are hopeful that our new slate of acquisitions, as well as productions such a Ramen Girl will contribute to the future profitability of the Corporation. ”
“We have just completed principal photography on Ramen Girl in Japan,” stated Stewart Hall, President. “We have high hopes for the film and its eventual benefit to the bottom line of the Corporation. In addition, we have been aggressively pursuing a policy of acquiring completed films to distribute in order to supplement our production revenues and improve our cash flow.” |
