November 11, 2010

Cinedigm Digital Cinema Corp. Announces Continued Improvement in Second Quarter and First Half Operating Results

MORRISTOWN, NJ -- (MARKET WIRE) -- 11/11/10 -- Cinedigm Digital Cinema Corp. (NASDAQ: CIDM), the global leader in the digital cinema industry, today reported continued improvement in operating results for the second quarter and first half of fiscal 2011, ended September 30, 2010.

Revenues for the second quarter ended September 30, 2010 were $18.9 million, representing a 7.8% increase over the prior year. Cinedigm reported Adjusted EBITDA(1) defined below, of $10.4 million, a 10.4% improvement compared to the Adjusted EBITDA of $9.4 million one year earlier. The net loss from continuing operations in the three month period was $(9.4) million, or $(0.31) per share, as compared to a net loss from continuing operations of $(0.9) million, or $(0.03) per share, in the prior year. The second quarter of the prior year benefited from a one-time gain of $10.7 million related to the extinguishment of debt during that period. Exclusive of this one-time gain, the net loss from continuing operations for the period improved by 19.5% as compared to a year earlier.

For the first six months of fiscal 2011, the Company reported revenues of $38.2 million, representing a 13.3% increase over the first half of the prior year. Adjusted EBITDA for the first half of the fiscal year was $20.9 million, a 13.5% improvement over the Adjusted EBITDA of $18.4 million one year earlier. The net loss from continuing operations in the first half of the fiscal year was $(16.3) million, or $(0.55) per share, as compared to a net loss of $(7.8) million, or $(0.27) per share. Exclusive of the one-time gain noted above, the net loss for the first half of the fiscal year improved by 12.2% as compared to the year-earlier period.

Adjusted EBITDA in the second quarter and first half, excluding the EBITDA earned in the Company's Phase I and Phase II Deployment subsidiaries (all of which net of services fees is pledged to service the non-recourse debt of those subsidiaries) was $(178,000) and ($648,000), respectively, representing an improvement of 90.0% and 78.6% over the prior year's respective periods. This also represents a continued sequential improvement from the ($489,000) loss in the first quarter ended June 30, 2010.

Adam M. Mizel, interim co-Chief Executive Officer and Chief Financial Officer, commented, "Cinedigm continued to show solid operational and financial progress in the second quarter and the first half of fiscal 2011. Revenues and Adjusted EBITDA increased nicely, despite delays in our scheduled digital system deployment program due to manufacturing capacity limitations at our vendors. Nevertheless, we experienced a substantial increase in deployments as the second quarter progressed, which has continued in the current quarter and is expected to maintain its momentum through the balance of the fiscal year and beyond. We expect our recently announced non-recourse financing commitments from Societe Generale, Natixis and Macquarie Equipment Finance to further increase our deployment pace in the next 12 months and drive future growth."

Mr. Mizel added, "I am pleased to note that due to the strong deployment pace in the quarter, Cinedigm's non-deployment businesses experienced its first EBITDA positive month in history in September, and we expect this trend to continue as our installations expand further."

Gary S. Loffredo, interim co-Chief Executive Officer and General Counsel, said, "As noted, the December 2009 completion of the NATO Cinema Buying Group Exhibitor-Buyer contract greatly enhanced our ability to finance agreements with exhibitors. As continued evidence of this trend, during the second quarter we announced agreements with Cobb Theaters for 170 screens, and Dickinson Theaters for 250 screens, as well as an additional 195 CBG members screens. This brings Cinedigm's total screens under Master License Agreements (MLAs) to 2,383, and our strong momentum and active discussions with many significant circuits will drive an extremely active and productive time ahead."

Mr. Loffredo concluded, "We believe that Cinedigm is at a very exciting point in its development, as we have successfully laid the groundwork for outstanding operational and financial progress in the weeks and months ahead. The second half of fiscal 2011 looks to be a strong period of growth for our Company, and we expect that trend to continue for the foreseeable future."

(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.

CONFERENCE CALL NOTIFICATION
Cinedigm will host a conference call to discuss its financial results at 9:00 a.m. Eastern on Thursday, November 11, 2010. The conference can be accessed by dialing 877.754.5303 or 678.894.3030 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 at http://investor.cinedigm.com/events.cfm. A replay of the call will be available after 12:00 p.m. Eastern at 800.642.1687 or 706.645.9291, conference ID 79533532. The replay will be accessible through Thursday, November 18th.

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, independent movie distributors, 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® 3-D and 2-D sports and concerts, thematic programming and independent movies provide a complete suite of services required to enable the digital theater conversion. Cinedigm™ and Cinedigm Digital Cinema Corp.™ are trademarks of Cinedigm Digital Cinema Corp. 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.








                        CINEDIGM DIGITAL CINEMA CORP.

               CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

             (In thousands, except for share and per share data)

                                 (Unaudited)





                           For the Three Months       For the Six Months

                            Ended September 30,       Ended September 30,

                         ------------------------  ------------------------

                             2010         2009         2010         2009

                         -----------  -----------  -----------  -----------

Revenues                 $    18,899  $    17,538  $    38,249  $    33,746

Costs and Expenses:

Direct operating

 (exclusive of

 depreciation and

 amortization shown

 below)                        4,303        4,241        9,242        7,793

  Selling, general and

   administrative              5,001        4,262       10,477        8,220

  Provision for doubtful

   accounts                      228          136          332          264

  Research and

   development                    97           73          162          123

  Depreciation and

   amortization of

   property and

   equipment                   8,293        8,126       16,454       16,064

  Amortization of

   intangible assets             722          749        1,443        1,513

                         -----------  -----------  -----------  -----------

Total operating expenses      18,644       17,587       38,110       33,977

                         -----------  -----------  -----------  -----------

Income (loss) from

 operations                      255          (49)         139         (231)

Interest income                   39           95          106          135

  Interest expense            (6,647)      (8,531)     (13,478)     (15,820)

  Gain (loss) on

   extinguishment of

   note payable                   --       10,744       (4,448)      10,744

  Other expense, net            (165)        (158)        (316)        (301)

  Change in fair value

   of interest rate swap        (987)         540       (1,445)       1,223

  Change in fair value

   of warrant liability       (1,891)      (3,576)       3,142       (3,576)

                         -----------  -----------  -----------  -----------

Net loss from continuing

 operations                   (9,396)        (935)     (16,300)      (7,826)



Loss from discontinued

 operations                   (1,439)        (183)      (1,594)        (338)

                         -----------  -----------  -----------  -----------

Net loss                     (10,835)      (1,118)     (17,894)      (8,164)

Preferred stock

 dividends                      (105)        (100)        (205)        (200)

                         -----------  -----------  -----------  -----------

Net loss attributable to

 common stockholders     $   (10,940) $    (1,218) $   (18,099) $    (8,364)

                         ===========  ===========  ===========  ===========

Net loss per Class A and

 Class B common share -

 basic and diluted

  Loss from continuing

   operations            $     (0.31) $     (0.03) $     (0.55) $     (0.27)

  Loss from discontinued

   operations                  (0.05)       (0.01)       (0.05)       (0.02)

                         -----------  -----------  -----------  -----------

                         $     (0.36) $     (0.04) $     (0.60) $     (0.29)

                         ===========  ===========  ===========  ===========

Weighted average number

 of Class A and Class B

 common shares

 outstanding: Basic and

 diluted                  30,294,306   28,663,959   29,860,122   28,475,217

                         ===========  ===========  ===========  ===========







                        Cinedigm Digital Cinema Corp.

                        Adjusted EBITDA (as defined)

                      Reconciliation to GAAP Net Income

                               (In thousands)

                                 (Unaudited)





                           For the Three Months       For the Six Months

                            Ended September 30,       Ended September 30,

                         ------------------------  ------------------------

                             2010         2009         2010         2009

                         -----------  -----------  -----------  -----------

Net loss from continuing

 operations              $    (9,396) $      (935) $   (16,300) $    (7,826)

Add Back:

  Amortization of

   software development          197          162          372          323

  Depreciation and

   amortization of

   property and

   equipment                   8,293        8,126       16,454       16,064

  Amortization of

   intangible assets             722          749        1,443        1,513

  Interest income                (39)         (95)        (106)        (135)

  Interest expense             6,647        8,531       13,478       15,820

  Extinguishment of note

   payable                        --      (10,744)       4,448      (10,744)

  Other expense, net             165          158          316          301

  Change in fair value

   of interest rate swap         987         (540)       1,445       (1,223)

  Change in fair value

   of warrants                 1,891        3,576       (3,142)       3,576

  Stock-based expenses            --          (37)          --           --

  Stock-based

   compensation                  674          438        1,364          760

  Non-recurring expenses         229           --        1,141           --

                         -----------  -----------  -----------  -----------

Adjusted EBITDA (as

 defined)                $    10,370  $     9,389  $    20,913  $    18,429

                         ===========  ===========  ===========  ===========







                       CINEDIGM DIGITAL CINEMA CORP.

                   CONDENSED CONSOLIDATED BALANCE SHEETS

                   (In thousands, except for share data)





                                               September 30,    March 31,

                                                    2010           2010

                                               -------------  -------------

ASSETS                                          (Unaudited)

Current assets

  Cash and cash equivalents                    $      11,414  $       9,094

  Restricted available-for-sale investments            9,120          5,927

  Accounts receivable, net                            14,450         13,265

  Deferred costs, current portion                      2,788          3,046

  Unbilled revenue, current portion                    6,165          4,335

  Prepaid and other current assets                       956          1,320

  Note receivable, current portion                       349            737

  Assets held for sale                                 5,422          8,231

                                               -------------  -------------

Total current assets                                  50,664         45,955

  Restricted available-for-sale investments               --          2,004

  Restricted cash                                      6,011          7,168

  Security deposits                                       44            254

  Property and equipment, net                        204,920        215,601

  Intangible assets, net                               6,282          7,719

  Capitalized software costs, net                      3,713          3,831

  Goodwill                                             5,874          5,874

  Deferred costs, net of current portion               7,559          6,763

  Unbilled revenue, net of current portion               920            964

  Note receivable, net of current portion              1,653            816

  Accounts receivable, net of current portion            198            198

                                               -------------  -------------

Total assets                                   $     287,838  $     297,147

                                               =============  =============







                        CINEDIGM DIGITAL CINEMA CORP.

                    CONDENSED CONSOLIDATED BALANCE SHEETS

                    (In thousands, except for share data)

                                 (continued)





                                               September 30,    March 31,

                                                    2010           2010

                                               -------------  -------------

LIABILITIES AND STOCKHOLDERS' EQUITY            (Unaudited)

Current liabilities

  Accounts payable and accrued expenses        $       7,314  $       7,761

  Current portion of notes payable, non-

   recourse                                           25,715         26,508

  Current portion of notes payable                       192            185

  Current portion of capital leases                       57            126

  Current portion of deferred revenue                  5,705          5,881

  Current portion of customer security

   deposits                                               60             12

  Liabilities as part of held for sale assets          5,835          6,315

                                               -------------  -------------

Total current liabilities                             44,878         46,788

  Notes payable, non-recourse, net of current

   portion                                           151,378        146,793

  Notes payable, net of current portion               73,847         69,669

  Capital leases, net of current portion                  36             38

  Warrant liability                                       --         19,195

  Interest rate swap                                   2,091          1,535

  Deferred revenue, net of current portion             3,457          1,828

  Customer security deposits, net of current

   portion                                                 9              9

                                               -------------  -------------

  Total liabilities                                  275,696        285,855

                                               -------------  -------------

Commitments and contingencies (see Note 7)

Stockholders' Equity

Preferred stock, 15,000,000 shares authorized;

 Series A 10% - $0.001 par value per share; 20

 shares authorized; 8 shares issued and

 outstanding at September 30, 2010 and March

 31, 2010, respectively. Liquidation

 preference $4,050                                     3,637          3,583

Class A common stock, $0.001 par value per

 share; 75,000,000 shares authorized;

 30,643,834 and 28,084,315 shares issued and

 30,592,394 and 28,032,875 shares outstanding

 at September 30, 2010 and March 31, 2010,

 respectively                                             30             28

Class B common stock, $0.001 par value per

 share; 15,000,000 shares authorized; 733,811

 shares issued and outstanding, at September

 30, 2010 and March 31, 2010, respectively                 1              1

  Additional paid-in capital                         194,848        175,937

  Treasury stock, at cost; 51,440 Class A

   shares                                               (172)          (172)

  Accumulated deficit                               (186,117)      (168,018)

  Accumulated other comprehensive loss                   (85)           (67)

                                               -------------  -------------

Total stockholders' equity                            12,142         11,292

                                               -------------  -------------

Total liabilities and stockholders' equity     $     287,838  $     297,147

                                               =============  =============



Contact:



Adam M. Mizel

Cinedigm Digital Cinema

(973) 290.0080

Email Contact



David Walke

Investor Relations for Cinedigm

973-290-0080 x 175

Email Contact



Source: Cinedigm Digital Cinema Corp.

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