American Vantage Cos. Reports Year-End Results.LAS VEGAS Las Vegas (läs vā`gəs), city (1990 pop. 258,295), seat of Clark co., S Nev.; inc. 1911. It is the largest city in Nevada and the center of one of the fastest-growing urban areas in the United States. -- American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of Vantage Cos. (OTCBB OTCBB See OTC Bulletin Board (OTCBB). : AVCS AVCS Advanced Vehicle Control System AVCS Advanced Vidicon Camera System AVCS Automatic Vehicle Control Systems AVCS Active Vibration Control System AVCS Attitude and Velocity Control Subsystem AVCS Air Vehicle Control System AVCS Active Valve Control System ) today announced its results of operations for the year ended Dec. 31, 2005. The company reported a net loss of $4,791,000 for the year ended Dec. 31, 2005, compared to a net loss of $4,017,000 for the year ended Dec. 31, 2004. The company's reported net (loss) income for the year ended Dec. 31, 2005 includes results from continuing and discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. of $(7,330,000) and $2,539,000, respectively, compared to $577,000 and $(4,594,000) for the 2004 comparative period. The net (loss) income per share for basic and diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. for the 12 months ended Dec. 31, 2005, from continuing and discontinued operations totaled $(1.28) and $0.44, respectively. The comparable net income (loss) per share for basic and diluted for the comparable 2004 period from continuing and discontinued operations totaled $0.10 and $(.80). As previously disclosed, on March 21, 2005, the company sold American Vantage Media Corp. ("AVMC AVMC Aquatic Veterinary Medicine Committee (American Veterinary Medical Association) "), a then wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. , to Genius Products Genius Products (also known as Genius Entertainment) is a home video company based in Santa Monica, California. On December 5, 2005, Genius Products, Inc. announced a distribution joint venture with The Weinstein Company called Genius Products, LLC,[1], and Inc. ("Genius" or "GNPI GNPI Gross Net Premium Income "). Consideration received by the company included 7 million shares of GNPI common stock, at a market value of $2.25 per share, and five-year warrants to purchase an additional 1,400,000 shares of GNPI common stock, half at an exercise price of $2.56 per share, and half at an exercise price of $2.78 per share. The net income for discontinued operations for the 12 months ended Dec. 31, 2005, includes a $6,518,000 gain on the sale of AVMC. For the 12-month period ended Dec. 31, 2004, the net loss of $4,017,000 was primarily generated from discontinued operations of AVMC. Revenues For the 12 months ended Dec. 31, 2005, the company's revenues from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the , its Film and TV Production segment, totaled $313,000, as compared to $638,000 for the comparable 2004 period. The Film and TV Production segment revenues are primarily generated from co-executive producer fees generated from the television series "The O.C." Such fees were decreased for the 2005 television season. Operating Loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. from Continuing Operations The company reported an operating loss from continuing operations of $2,914,000 and $37,000 for the year ended Dec. 31, 2005 and 2004, respectively. For the years ended Dec. 31, 2005 and 2004, these operating losses included payroll and payroll-related expenses totaling $1,207,000 and $1,456,000, respectively, for the company's executives and film and TV production executives and employees, as well as other general and administrative expenses. Prior to Dec. 31, 2005, the company reduced the size of its staff, resulting in significantly reduced ongoing payroll and payroll-related expenses. The operating loss for the year ended Dec. 31, 2004, includes a pre-tax gain of $3,423,000, resulting from the consummation CONSUMMATION. The completion of a thing; as the consummation of marriage; (q.v.) the consummation of a contract, and the like. 2. A contract is said to be consummated, when everything to be done in relation to it, has been accomplished. of the sale of undeveloped land located in Las Vegas. Equity in Income of Unconsolidated Subsidiaries, Net Included in the company's net loss from operations is the company's equity income from a 49% interest in the Border Grill Grill may refer to: In food:
Non-Operating Expense During 2005, the company placed 5,625,000 shares of the Genius common stock and 225,000 warrants to purchase shares of Genius common stock, at an exercise price of $2.56 per share. Related to the placement of certain Genius securities, the company also surrendered to Genius for cancellation 225,000 warrants to purchase shares of Genius common stock, at an exercise price of $2.56 per share. The company received net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). from the placements of the Genius stock totaling $8,592,000, and recorded a loss of $4,642,000 from the placements and cancellation of the Genius warrants. Of the remaining 1,375,000 shares of the Genius common stock received by the company as consideration for the sale of AVMC, 700,000 shares are not subject to escrow escrow Instrument, such as a deed, money, or property, that constitutes evidence of obligations between two or more parties and is held by a third party. It is delivered by the third party only upon fulfillment of some condition. or pledge agreements, and are available for sale by the company. For the 12 months ended Dec. 31, 2005, the company's non-operating expense from continuing operations includes the $4,642,000 loss discussed above, a realized loss Realized Loss A loss recognized when assets are sold for a price lower than the original purchase price. Notes: A portion of the realized loss may be applied against a capital gain or realized profit to reduce taxes. of $316,000 from a decrease in the fair value of the Genius common stock at Dec. 31, 2005, and a $167,000 unrealized loss Unrealized Loss A loss that results from holding onto an asset rather than cashing it in and officially taking the loss. Notes: Let's say you own a stock that is down 50%, but you haven't sold it to realize the loss yet. This is said to be an unrealized loss. due to the change in the fair value of the Genius warrants at Dec. 31, 2005. Subsequent Events and Company Strategy At Dec. 31, 2005, restricted cash and cash equivalents represented $2,500,000 utilized to fund the escrow securing AVCS' obligations under certain AVMC promissory notes promissory note, unconditional written promise to pay a certain sum of money at a definite time to bearer or to a specified person on his order. Promissory notes are generally used as evidence of debt. . In February 2006, the AVMC promissory notes were repaid in full. As a result, on March 8, 2006, AVCS received the escrow principal and accrued interest Accrued Interest The interest that has accumulated on a bond since the last interest payment up to but not including the settlement date. There are two methods for calculating accrued interest: 1) 360-day year method, used for corporate and municipal bonds. totaling $2,530,000 and its guaranty As a verb, to agree to be responsible for the payment of another's debt or the performance of another's duty, liability, or obligation if that person does not perform as he or she is legally obligated to do; to assume the responsibility of a guarantor; to warrant. of certain of the AVMC promissory notes was terminated. At Dec. 31, 2005, the assets of the company primarily consist of the following: --Cash and cash equivalents; --Genius stock and warrants acquired as the consideration for the disposition of AVMC; --The assets of the Film and TV Production segment, primarily consisting of television and film creative projects and a co-executive production interest in the television series, "The O.C.," but excluding the segment's "back-end" interest in "The O.C." --A 49% membership interest in the limited liability corporation that operates the Border Grill; --The company's ownership of YaYa Media Inc. ("YaYa"), a non-operating entity, which holds a 10% interest in Games Media LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control , a joint venture that creates a promotional event called a video game touring festival; --Federal and state net operating loss carryforwards Net operating loss carryforwards Application of losses to offset earnings in future years. and federal general business tax credit carryforwards Carryforwards Tax losses allowed to be applied to offset future income in some specified number of future years. , and --Various other assets other assets Assets of relatively small value. For financial reporting purposes, firms frequently combine small assets into a single category rather than listing each item separately. , including prepaid expenses Prepaid Expense An asset that arises on a balance sheet because of the payment of something in advance (prepayment). Services for the payment will be received in the near future. and furniture and equipment. At Dec. 31, 2005, the liabilities of the company primarily consist of the following: --Liabilities relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the company's leased premises formerly utilized by AVMC; --Any tax liability resulting from any future placement of the GNPI common stock and warrants that the company acquired in connection with the disposition of AVMC; and --Various other liabilities other liabilities Small and relatively insignificant liabilities. For financial reporting purposes, firms often combine small liabilities into this single category rather than listing each liability separately. for operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. . The company is pursuing potential acquisition and merger transactions and development strategies, which are in various stages of discussion, in industries that could include restaurant, gaming and lifestyle. However, no assurance can be given that the company will successfully acquire other businesses or, if acquired, such businesses will prove to be profitable. Certain statements in this press release are "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements may be identified by words such as "anticipates," "believes," "can," "continue," "could," "estimates," "expects," "intends," "may," "plans," "potential," "predicts," "should," or "will" or the negative of these terms or other comparable terminology. Such statements and all phases of American Vantage Cos.' operations are subject to known and unknown risks, uncertainties and other factors, including overall economic conditions and other factors and uncertainties as are identified in American Vantage Cos.' Form 10-KSB for the year ended Dec. 31, 2005. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" . American Vantage Cos.' actual results, levels of activity, performance or achievements may be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. The company undertakes no obligation to update the forward-looking statements in this press release.
AMERICAN VANTAGE COS.
CONSOLIDATED STATEMENTS OF OPERATIONS
Twelve Months Twelve Months
Ended Ended
Dec. 31, 2005 Dec. 31, 2004
-------------- --------------
Revenues, net $313,000 $638,000
Cost of services 131,000 248,000
-------------- --------------
Gross profit 182,000 390,000
-------------- --------------
General and administrative expenses
Payroll and payroll-related 1,207,000 1,456,000
Related parties 162,000 150,000
Other 1,727,000 2,244,000
-------------- --------------
3,096,000 3,850,000
Gain on sale of undeveloped land - 3,423,000
-------------- --------------
Operating loss (2,914,000) (37,000)
-------------- --------------
Non-operating expense
Interest income and other expense, net (174,000) -
Loss on impairment of Genius equity
securities (316,000) -
Loss on sale of stock (4,642,000) -
-------------- --------------
(5,132,000) -
-------------- --------------
Loss from continuing operations before
income tax benefit (provision) (8,046,000) (37,000)
Income tax benefit (provision) 191,000 (10,000)
Equity in income of unconsolidated
subsidiaries, net 525,000 624,000
-------------- --------------
Loss from continuing operations (7,330,000) 577,000
Income (loss) from discontinued
operations
Income (loss) from discontinued
operations (including Gain on
disposal of AVMC totaling
$6,518,000 for the 12 months
ended Dec. 31, 2005) 3,967,000 (8,133,000)
Income tax (provision) benefit (1,428,000) 3,539,000
-------------- --------------
2,539,000 (4,594,000)
-------------- --------------
Net loss $(4,791,000) $(4,017,000)
============== ==============
Net (loss) income per share --
basic and diluted:
Continuing operations $(1.28) $0.10
Discontinued operations 0.44 (0.80)
-------------- --------------
$(0.84) $(0.70)
============== ==============
Weighted average number of common
shares and common share equivalents 5,729,107 5,755,000
============== ==============
AMERICAN VANTAGE COS.
CONSOLIDATED BALANCE SHEET HIGHLIGHTS
Dec. 31, Dec. 31,
2005 2004
------------ ------------
Cash and cash equivalents $2,205,000 $1,944,000
============ ============
Restricted cash and cash equivalents $2,500,000 $2,500,000
============ ============
Genius equity securities, available for
sale, at fair value, current portion $2,071,000 $-
============ ============
Investment in Genius warrants $1,077,000 $-
============ ============
Accounts receivable, net, current portion $39,000 $4,758,000
============ ============
Film inventory, net $- $8,218,000
============ ============
Capitalized film costs, net $- $3,362,000
============ ============
Genius equity securities, available for
sale, at fair value, less current
portion $707,000 $-
============ ============
Total assets $10,224,000 $30,170,000
============ ============
Current liabilities $1,064,000 $12,378,000
Long-term liabilities 671,000 4,523,000
------------ ------------
Total liabilities $1,735,000 $16,901,000
============ ============
Total stockholders' equity $8,489,000 $13,269,000
============ ============
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