November 12, 2009

/ CORRECTION - Cinedigm Digital Cinema Corp. Announces Fiscal Year 2010 Second Quarter Results

MORRISTOWN, NJ, Nov 12, 2009 (MARKETWIRE via COMTEX News Network) -- In the news release, "Cinedigm Digital Cinema Corp. Announces Fiscal Year 2010 Second Quarter Results," issued earlier today by Cinedigm Digital Cinema Corp. (NASDAQ: CIDM), we are advised by the Company that the subheading should read "Recent $75 Million Investment, $100 Million Credit Facility Create Platform for Growth" rather than "Recent $75 Million Equity Investment, $100 Million Credit Facility Create Platform for Growth" as originally issued. Complete corrected text follows.

Cinedigm Digital Cinema Corp. Announces Fiscal Year 2010 Second Quarter Results

Recent $75 Million Investment, $100 Million Credit Facility Create Platform for Growth

MORRISTOWN, NJ -- November 12, 2009 -- Cinedigm Digital Cinema Corp. ("Cinedigm" or the "Company") (NASDAQ: CIDM) reported a 6.5% sequential quarterly increase in revenues, to $19.9 million for the fiscal 2010 second quarter ended September 30, 2009. Revenues declined 9% versus the year-ago period. The Company posted Adjusted EBITDA(1) (defined below) of $9.7 million sequentially increasing 3.2% from $9.4 million in the first quarter. EBITDA declined 11.6% versus the year-ago period EBITDA of $10.9 million. The Net loss in the second quarter of $1.1 million or $0.04 per share includes various non-cash items aggregating $3.0 million or $0.10 per share, compared to similar items of $11.0 million or $0.40 per share in the year-ago period. The Company ended the fiscal 2010 second quarter with $37.5 million of cash and investments (including $17.7 million of restricted cash and investments) on its balance sheet.

SECOND QUARTER HIGHLIGHTS

--  Revenues for the fiscal year 2010 second quarter were $19.9 million
    compared to $21.8 million in the year-ago period.  This decline was
    primarily due to the previously announced November 2008 contracted 16% step-
    down in Virtual Print Fee (VPF) rates charged to the major movie studios
    via long term contracts and to additional movie studios on a pay for use
    basis.   Partially offsetting this rate decline was a 5% increase in VPFs
    earned per screen during the quarter due to improved screen turnover.

--  Adjusted EBITDA in the second quarter was $9.7 million, an increase of
    3.2% on a sequential quarterly basis from $9.4 million in the first quarter
    and a decrease of 11.6% from $10.9 million in the year-ago period.  The
    improvement in Adjusted EBITDA as compared to the first quarter is
    primarily the result of seasonally increased revenues and careful expense
    management.

--  Strengthened balance sheet with a $75 Million Senior Note and Warrant
    transaction to refinance existing debt.

--  Launched Exhibitor-Buyer Phase 2 ownership option with 2 exhibitor
    partners.

--  Initiated new detailed financial segment reporting to improve business
    management tools and increase transparency to investors.


Bud Mayo, Chief Executive Officer of Cinedigm, stated, "The second quarter brought a major shift to Cinedigm's capitalization with the $75 million refinancing from Sageview Capital of our $55 million senior notes and pre-payment of $5 million of Phase 1 non-recourse debt. This investment was the critical first step necessary to enable Cinedigm to strengthen its balance sheet and restart its growth during this challenging economic environment. The second step was the signing of commitment letters at the end of October for a $100 million non-recourse Phase 2 credit facility with GE Capital and Societe Generale. The support of two key Phase 1 lenders clearly shows that the credit market challenges for Cinedigm are abating, and we are pushing ahead to create value for investors.. Our new CFO and Chief Strategy Officer, Adam Mizel, has already proven to be an excellent addition to our corporate team. He has been critical in leading our financing efforts, is communicating with investors regularly, will be speaking at more financial conferences, and recommended our new financial reporting structure in an effort to increase financial transparency."

PHASE 2 UPDATE

Mayo added, "In addition to the recently announced commitment to provide senior debt to finance up to 2,133 screens by GE Capital and Societe Generale, Cinedigm launched its exhibitor-buyer program which enables an exhibitor to finance its own equipment purchase with Cinedigm's support and retention as the asset servicer managing the VPF revenue stream in return for a share of revenues. Georgia Theaters and Great Escape, with a combined 457 screens, were our launch partners. We have a robust pipeline of exhibitors interested in both of these options. Finally, Cinedigm signed Phase 2 VPF agreements with Warner Bros. and Overture Films and now has VPF agreements with 8 significant studios. To date we have installed 171 Phase 2 screens and almost 4,000 screens in total."

CORPORATE UPDATE

Mayo concluded, "It has been an exciting several months at Cinedigm and we have much more to accomplish. We expect to close on our $100 million Phase 2 facility in December or early January and are actively building our exhibitor pipeline for 2010 deployments. We are also growing our content delivery business as we expand our satellite network with proceeds from our financing and actively seek additional delivery customers. Finally, our Entertainment Group distributed its second independent film, 'Opa!,' in October and will be launching its 3-D Concert Series with Dave Matthews Band in theaters for a full week beginning December 11, 2009. As we continue to build on this momentum, we look forward to sharing our progress."

CONFERENCE CALL NOTIFICATION

Cinedigm will host a conference call to discuss its financial results at 9:00 a.m. Eastern on Thursday, November 12, 2009. The conference can be accessed by dialing 719.325.4762 at least five minutes before the start of the call. No passcode is required. The conference call will also be webcast simultaneously and will be accessible via the web on Cinedigm's Web site, www.cinedigmcorp.com. A replay of the call will be available after 1:30 p.m. Eastern at 719.457.0820 or 888.203.1112, passcode 4131313. The replay will be accessible through Thursday, November 19th.

About Cinedigm

Cinedigm is the leader in providing the services, experience, technology and content critical to transforming movie theaters into digital and networked entertainment centers. The Company is a technology and services integrator that works with Hollywood movie studios and exhibitors to bring movies in digital cinema format to audiences across the country. Cinedigm's digital cinema deployment organization, software, unique combined satellite and hard drive digital movie delivery network; pre-show in-theater advertising services; and distribution platform for alternative content such as CineLive(R) 3-D and 2-D sports and concerts, thematic programming and independent films provide a complete suite of services required to enable the digital theater conversion. www.cinedigm.com [CIDM-E]

Safe Harbor Statement

Investors and readers are cautioned that certain statements contained in this document, as well as some statements in periodic press releases and some oral statements of Cinedigm officials during presentations about Cinedigm, along with Cinedigm 's filings with the Securities and Exchange Commission, including Cinedigm's registration statements, quarterly reports on Form 10-Q and annual report on Form 10-K, are "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Act"). Forward-looking statements include statements that are predictive in nature, which depend upon or refer to future events or conditions, which include words such as "expects," "anticipates," "intends," "plans," "could," "might," "believes," "seeks," "estimates" or similar expressions. In addition, any statements concerning future financial performance (including future revenues, earnings or growth rates), ongoing business strategies or prospects, and possible future actions, which may be provided by Cinedigm's management, are also forward-looking statements as defined by the Act. Forward-looking statements are based on current expectations and projections about future events and are subject to various risks, uncertainties and assumptions about Cinedigm, its technology, economic and market factors and the industries in which Cinedigm does business, among other things. These statements are not guarantees of future performance and Cinedigm undertakes no specific obligation or intention to update these statements after the date of this release.

(1) Adjusted EBITDA is defined by the Company to be earnings before interest, taxes, depreciation and amortization, other income (expense), net, stock-based compensation and non-recurring items. Pursuant to the requirements of Regulation G, the Company has provided a reconciliation in the tables attached to this release of Adjusted EBITDA to U.S. GAAP net income (loss). The Company calculated and communicated Adjusted EBITDA in the tables because the Company's management believes it is of importance to investors and lenders by providing additional information with respect to the performance of its fundamental business activities. The Company's calculation of Adjusted EBITDA may or may not be consistent with the calculation of this measure by other companies in the same industry. Investors should not view Adjusted EBITDA as an alternative to the U.S. GAAP operating measure of net income (loss). In addition, Adjusted EBITDA does not take into account changes in certain assets and liabilities as well as interest and income taxes that can affect cash flows. Management does not intend the presentation of these non-GAAP measures to be considered in isolation or as a substitute for results prepared in accordance with U.S. GAAP. These non-GAAP measures should be read only in conjunction with the Company's consolidated financial statements prepared in accordance with U.S. GAAP.

                      CINEDIGM DIGITAL CINEMA CORP.
                 CONSOLIDATED STATEMENTS OF OPERATIONS
          (In thousands, except for share and per share data)
                                (Unaudited)
                                                    Three Months Ended
                                                       September 30,
                                                 -------------------------
                                                     2008         2009
                                                 ------------ ------------
Revenues                                         $     21,849 $     19,881
Costs and expenses:
Direct operating (exclusive of depreciation and
 amortization shown below)                              6,732        6,066
Selling, general and administrative                     4,187        4,073
Provision for doubtful accounts                           145          136
Research and development                                   93           64
Stock-based compensation                                  200          441
Depreciation and amortization of property and
 equipment                                              8,133        8,323
Amortization of intangible assets                         901          750
                                                 ------------ ------------
      Total operating expenses                         20,391       19,853
                                                 ------------ ------------
Income from operations                                  1,458           28
Interest income                                            99           95
Interest expense                                       (6,990)      (8,791)
Other income (expense), net                              (176)        (158)
Gain on extinguishment of debt                              -       10,744
Change in fair value of interest rate swap               (687)         540
Change in fair value of warrants                            -       (3,576)
                                                 ------------ ------------
Net loss                                               (6,296)      (1,118)
Preferred stock dividends                                   -         (100)
                                                 ------------ ------------
Net loss attributable to shareholders            $     (6,296)$     (1,218)
                                                 ============ ============
Net loss per Class A and B common share - basic
 and diluted                                     $      (0.23)$      (0.04)
                                                 ============ ============
Weighted average number of Class A and B common
 shares outstanding:
Basic and diluted                                  27,536,371   28,663,959
                                                 ============ ============
                      Cinedigm Digital Cinema Corp.
                      Adjusted EBITDA (as defined)
                    Reconciliation to GAAP Net Income
                             (In thousands)
                               (Unaudited)
                                                    Three Months Ended
                                                       September 30,
                                                 -------------------------
                                                     2008         2009
                                                 ------------ ------------
Net loss                                         $     (6,296)$     (1,118)
Add Back:
  Amortization of software development                    194          161
  Depreciation of property and equipment                8,133        8,323
  Amortization of intangible assets                       901          750
  Interest income                                         (99)         (95)
  Interest expense                                      6,990        8,791
  Other (income) expense, net                             176          158
  Extinguishment of debt                                    -      (10,744)
  Change in fair value of interest rate swap              687         (540)
  Change in fair value of warrants                          -        3,576
  Stock-based expenses                                     45          (37)
  Stock-based compensation                                200          441
                                                 ------------ ------------
Adjusted EBITDA (as defined)                     $     10,931 $      9,666
                                                 ============ ============
                      CINEDIGM DIGITAL CINEMA CORP.
                  CONSOLIDATED STATEMENTS OF OPERATIONS
           (In thousands, except for share and per share data)
                                 (Unaudited)
                                                     Six Months Ended
                                                       September 30,
                                                 -------------------------
                                                     2008         2009
                                                 ------------ ------------
Revenues                                         $     42,419 $     38,547
Costs and expenses:
Direct operating (exclusive of depreciation and
 amortization shown below)                             12,529       11,528
Selling, general and administrative                     9,020        7,942
Provision for doubtful accounts                           173          264
Research and development                                  100          104
Stock-based compensation                                  358          766
Depreciation and amortization of property and
 equipment                                             16,268       16,476
Amortization of intangible assets                       1,848        1,515
                                                 ------------ ------------
       Total operating expenses                        40,296       38,595
                                                 ------------ ------------
Income (loss) from operations                           2,123          (48)
Interest income                                           223          135
Interest expense                                      (14,166)     (16,341)
Other income (expense), net                              (326)        (301)
Gain on extinguishment of debt                              -       10,744
Change in fair value of interest rate swap              1,565        1,223
Change in fair value of warrants                            -       (3,576)
                                                 ------------ ------------
Net loss                                              (10,581)      (8,164)
Preferred stock dividends                                   -         (200)
                                                 ------------ ------------
Net loss attributable to shareholders            $    (10,581)$     (8,364)
                                                 ============ ============
Net loss per Class A and B common share - basic
 and diluted                                     $      (0.39)$      (0.29)
                                                 ============ ============
Weighted average number of Class A and B common
 shares outstanding:
Basic and diluted                                  27,202,593   28,475,217
                                                 ============ ============
                     Cinedigm Digital Cinema Corp.
                     Adjusted EBITDA (as defined)
                  Reconciliation to GAAP Net Income
                            (In thousands)
                              (Unaudited)
                                                     Six Months Ended
                                                       September 30,
                                                 -------------------------
                                                     2008         2009
                                                 ------------ ------------
Net loss                                         $    (10,581)$     (8,164)
Add Back:
  Amortization of software development                    387          323
  Depreciation of property and equipment               16,268       16,476
  Amortization of intangible assets                     1,848        1,515
  Interest income                                        (223)        (135)
  Interest expense                                     14,166       16,341
  Other (income) expense, net                             326          301
  Extinguishment of debt                                    -      (10,744)
  Change in fair value of interest rate swap           (1,565)      (1,223)
  Change in fair value of warrants                          -        3,576
  Stock-based expenses                                    119            -
  Stock-based compensation                                358          766
                                                 ------------ ------------
Adjusted EBITDA (as defined)                     $     21,103 $     19,032
                                                 ============ ============
                     CINEDIGM DIGITAL CINEMA CORP.
                      CONSOLIDATED BALANCE SHEETS
           (In thousands, except for share and per share data)
                              (Unaudited)
                                                     March     September
                                                   31, 2009     30, 2009
                                                 ------------ ------------
                       ASSETS
Current assets
  Cash and cash equivalents                      $     26,329 $     19,732
  Restricted short-term investment securities               -        5,594
  Accounts receivable, net                             13,884       11,527
  Deferred costs                                        3,936        2,999
  Unbilled revenue, current portion                     3,082        3,522
  Prepaid and other current assets                      1,798        3,159
  Notes receivable, current portion                       616          170
                                                 ------------ ------------
Total current assets                                   49,645       46,703
  Restricted long-term investment securities                -        4,974
  Restricted cash                                         255        7,161
  Security deposits                                       424          427
  Property and equipment, net                         243,124      235,853
  Intangible assets, net                               10,707        9,192
  Capitalized software costs, net                       3,653        3,738
  Goodwill                                              8,024        8,024
  Deferred costs                                        3,967        7,735
  Unbilled revenue, net of current portion              1,253        1,062
  Notes receivable, net of current portion                959          878
  Accounts receivable, net of current portion             386          386
                                                 ------------ ------------
Total assets                                     $    322,397 $    326,133
                                                 ============ ============
       Liabilities and stockholders' equity
Current liabilities
  Accounts payable and accrued expenses          $     14,954 $      8,995
  Current portion of notes payable, non-recourse       24,824       24,758
  Current portion of notes payable                        424          177
  Current portion of capital leases                       175          700
  Current portion of deferred revenue                   5,535        5,860
  Current portion of customer security deposits           314          314
                                                 ------------ ------------
Total current liabilities                              46,226       40,804
  Notes payable, non-recourse, net of current
   portion                                            170,624      162,112
  Notes payable, net of current portion                55,333       65,627
  Capital leases, net of current portion                5,832        5,778
  Warrant liability                                         -       14,308
  Fair value of interest rate swap                      4,529        3,306
  Deferred revenue, net of current portion              1,057        2,013
  Customer security deposits, net of current
   portion                                                  9            9
                                                 ------------ ------------
Total liabilities                                     283,610      293,957
                                                 ------------ ------------
Commitments and contingencies
Stockholders' equity:
  Preferred stock, $0.001 par value per share;
   15,000,000 shares
   authorized;
  Series A 10%-20
   shares authorized; 8 shares issued and
   outstanding, at March 31, 2009 and September
   30, 2009, respectively. Liquidation preference
   $4,050                                               3,476        3,529
  Class A common stock, $0.001 par value per
   share; 65,000,000 shares authorized;
   27,544,315 and 28,084,315 issued and
   27,492,875 and 28,032,875 shares outstanding
   at March 31, 2009 and September 30, 2009,
   respectively                                            27           28
  Class B common stock, $0.001 par value per
   share; 15,000,000 shares authorized; 733,811
   shares issued and outstanding at March 31,
   2009 and September 30, 2009, respectively                1            1
  Additional paid-in capital                          173,565      175,281
  Treasury Stock, at cost; 51,440 Class A shares         (172)        (172)
  Accumulated deficit                                (138,110)    (146,474)
  Accumulated other comprehensive loss                      -          (17)
                                                 ------------ ------------
Total stockholders' equity                             38,787       32,176
                                                 ------------ ------------
                                                 $    322,397 $    326,133
                                                 ============ ============

Contact:

Adam M. Mizel
Cinedigm Digital Cinema
(973) 290.0080
Email Contact


SOURCE: Cinedigm Digital Cinema Corp.

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