Cinergi Pictures Entertainment Reports Third Quarter Results and Upward Adjustment of Merger Consideration to $2.41 Per Share.SANTA MONICA Santa Monica (săn`tə mŏn`ĭkə), city (1990 pop. 86,905), Los Angeles co., S Calif., on Santa Monica Bay; inc. 1886. Tourism and retailing are important, and the city has motion-picture, biotechnology, and software industries. , Calif.--(BUSINESS WIRE)--Nov. 19, 1997--Cinergi Pictures Entertainment Inc. (CINE CINE Cinematographic CINE Cinematograph CINE Centre for Indigenous Peoples Nutrition and Environment CINE Clasificación Internacional de la Situación en el Empleo (Spanish) CINE Communications in Education : Nasdaq) today reported results for the third quarter and nine months ended September 30, 1997. Revenues for the quarter ended September 30, 1997 were $15,649,000 compared with $30,189,000 during the third quarter of 1996. Feature film revenues for the quarter ended September 30, 1996 consisted mainly of the domestic home video availability of Nixon, domestic and international availability of Amanda, and continuing domestic and foreign revenues from Tombstone Tombstone, city (1990 pop. 1,220), Cochise co., SE Ariz.; inc. 1881. With its pleasant climate and legendary past, Tombstone is a well-known tourist attraction. The city became a national historic landmark in 1962. and Die Hard With a Vengeance with great violence; as, to strike with a vengeance s>. - Hudibras. with even greater intensity; as, to return one's insult with a vengeance s>. See also: Vengeance Vengeance . Feature film revenues for the quarter ended September 30, 1997 resulted mainly from the domestic home video availability of The Shadow Conspiracy and the receipt of overages with respect to the soundtrack to Evita. Selling, general and administrative expenses (excluding production overhead costs overhead costs see fixed costs. capitalized to film costs) increased from $2,111,000 for the third quarter of 1996 to $6,210,000 for the quarter ended September 30, 1997. The increase is due primarily to (i) no production overhead being capitalized into film costs in the third quarter of 1997 in light of the Company's previously announced agreements to sell the films in its motion picture library and the Company's current intention not to commence production on additional motion pictures, (ii) severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when payments to employees, (iii) payments made by the Company to terminate certain sales agency relationships, and (iv) expenses incurred by the Company in connection with negotiation of the film library sale and previously announced merger agreement and the preparation of related proxy materials Proxy Materials Documents regulated by the Securities & Exchange Commission in which a public company outlines its methods and procedures. These documents are used to inform shareholders and solicit votes for corporate decisions, such as the election of directors and other . Total selling, general and administrative expenses for the third quarter of 1997 were $6,210,000 as no production overhead was capitalized into film costs, compared with $3,290,000 in the same period last year which reflected $1,179,000 of production overhead capitalized into film costs. Similarly, the Company incurred interest expense of $1,970,000 for the quarter ended September 30, 1997 compared to no interest expense for the quarter ended September 30, 1996 primarily because no interest expense was capitalized to film costs in the 1997 period in light of the agreements for the film library sale and the Company's current intention not to commence production on additional motion pictures. The Company incurred a net loss for the third quarter of 1997 of $9,833,000, or $0.73 per share, compared with a net loss of $294,000, or $0.02 per share, during the same period last year. The weighted average number of common shares and common share equivalents outstanding for the third quarters of 1997 and 1996 were 13,447,000 and 14,192,000, respectively. Revenues for the nine months ended September 30, 1997 were $59,209,000 compared with $89,772,000 for the nine months ended September 30, 1996. Feature film revenues for the nine months ended September 30, 1996 consisted mainly of the domestic home video availability of The Scarlet Letter scarlet letter “A” for “adultery” sewn on Hester Prynne’s dress. [Am. Lit.: The Scarlet Letter] See : Adultery scarlet letter and Nixon, international availability of Nixon, domestic and international availability of Amanda, and continuing domestic and international revenues from Tombstone and Die Hard With a Vengeance. During the first nine months of 1997, feature film revenues resulted mainly from the theatrical release of The Shadow Conspiracy and the domestic home video availability of Evita and The Shadow Conspiracy and the receipt of overages with respect to the Evita soundtrack. During 1996, the Company adopted Statement of Financial Accounting Standards No. 121, "Accounting for the Impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of" (SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System No. 121). In April 1997, the Company announced that (i) the Company had entered into an agreement with Walt Disney Noun 1. Walt Disney - United States film maker who pioneered animated cartoons and created such characters as Mickey Mouse and Donald Duck; founded Disneyland (1901-1966) Disney, Walter Elias Disney Pictures and Television to sell to Disney substantially all of the films in the Company's motion picture library and certain 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. , (ii) the Company did not presently intend to commence production of any additional motion pictures, and (iii) the Company was considering its alternatives assuming 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 film library sale to Disney. The Company's visual effects assets are not included in the film library sale. In light of the foregoing and due to operating losses 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. of the visual effects facility, the Company determined that a write-down to net realizable value Net realizable value (NRV) is a commonly used method of evaluating an asset's worth in the field of inventory accounting. NRV is part of GAAP rules that apply to valuing inventory, so as to not overstate or understate the value of inventory goods. of the visual effects assets was required under SFAS 121. Accordingly, the Company recognized a non-cash charge Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. of $2,665,000 at June 30, 1997 for the impairment of the visual effects long-lived assets. The provision for impairment was calculated based upon the excess of the carrying amount of the visual effects assets over the estimated fair value of the visual effects assets. In September 1997, the visual effects assets were sold for aggregate consideration approximating the book value of such assets. The Company reported a net loss of $22,787,000, or $1.69 per share, for the nine months ended September 30, 1997, compared with a net loss of $1,647,000, or $0.12 per share, for the same period last year. The weighted average number of common shares and common share equivalents outstanding for the first nine months of 1997 and 1996 were 13,448,000 and 14,192,000, respectively. The Company also reported that pursuant to the terms of the previously announced Agreement of Merger, dated as of September 2, 1997, among the Company, Andrew G Andrew Jonas Günsberg (born 1974), popularly known as Andrew G, is an Australian television and radio presenter who is best known as the co-host of the reality series Australian Idol. He was also the compere of Network Ten's game show The Con Test. . Vajna (Chairman of the Board, President and Chief Executive Officer of the Company), Valdina Corporation N.V. and CPEI CPEI Computer Program End Item (NASA) Acquisition, Inc. (entities controlled by Mr. Vajna), the cash amount per share which stockholders of the Company (other than Mr. Vajna, Valdina, and stockholders who prefer dissenters' rights) will be entitled en·ti·tle tr.v. en·ti·tled, en·ti·tling, en·ti·tles 1. To give a name or title to. 2. To furnish with a right or claim to something: to receive upon conversion of their Cinergi shares in the merger of the Company and CPEI Acquisition, Inc. has been adjusted upwards from $2.39 to $2.41 per share. The purchase price has been adjusted upwards from an original price of $2.30 ($.09 of previously announced adjustments related to the settlement of the Company's "first-look" arrangement with Oliver Stone Noun 1. Oliver Stone - United States filmmaker (born in 1946) Stone and the receipt of overages with respect to the Evita Soundtrack) and is subject to potential further upward adjustment. The merger consideration has been adjusted upwards as a result of the sale of certain receivables. Pursuant to the terms of the Merger Agreement, the merger consideration was to be adjusted upwards in the event the aggregate amount of monies collected by the Company in connection with certain specified accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying (not including those relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc An Alan Smithee Film) from July 1, 1997 through the Adjustment Date (which is generally ten business days prior to the special meeting of the Company's stockholders to be held in connection with, among other things, the proposed merger) exceeds $1,573,000. The Company has sold to a third party all of such receivables which have not been previously collected. As a result, the aggregate amount of such non-Alan Smithee receivables collected by the Company has become fixed (and not subject to further adjustment) at $1,743,000 and resulted in an upward adjustment of $170,000, or $.02 per share. Pursuant to the Merger Agreement, the merger consideration will also be adjusted upwards in the event the Company sells its rights in the Evita soundtrack or collects additional overages with respect to the soundtrack prior to the Adjustment Date. The merger consideration will also be adjusted upwards in the event the sum of certain prescribed pre·scribe v. pre·scribed, pre·scrib·ing, pre·scribes v.tr. 1. To set down as a rule or guide; enjoin. See Synonyms at dictate. 2. To order the use of (a medicine or other treatment). adjustments pertaining per·tain intr.v. per·tained, per·tain·ing, per·tains 1. To have reference; relate: evidence that pertains to the accident. 2. to the (i) the Company's selling, general and administrative expenses from July 1, 1997 through the Adjustment Date, (ii) the Company's ability to collect certain receivables relating to An Allen Smithee Film from July 1, 1997 through the Adjustment Date, and (iii) the amount of monies contributed by the Company to, or the amount of expenses incurred by the Company on behalf of, the Company's 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. , Cinergi Productions Inc. (California), (or the visual effects facility previously operated by such subsidiary) from July 1, 1997 through the Adjustment Date, in each case measured against certain specified amounts, results in a net positive dollar amount. Upon the occurrence of any subsequent event resulting in a purchase price adjustment, the aggregate per share adjustment to the merger consideration will, in general terms, be calculated by dividing the aggregate dollar amount of such adjustment by the total number of issued and outstanding shares as of the Adjustment Date (including shares held by Mr. Vajna or Valdina, but excluding the 555,556 shares held by an affiliate of The Walt Disney Company which will be transferred to the Company as part of the contemplated sale of substantially all of the films in the Company's motion picture library to Disney), rounded off to the nearest whole penny. Except for the adjustment events set forth in the Merger Agreement, there are no other positive adjustments to the merger consideration. The Merger Agreement does not provide for any downward adjustments to the merger consideration. The merger is conditioned upon consummation of the transactions contemplated by the Company's previously announced agreement to sell substantially all of the films in its motion picture library and certain other assets to an affiliate of The Walt Disney Company and the Company's previously announced agreement to sell its rights in Die Hard With a Vengeance to Twentieth Century Fox Film Corporation. The merger is also subject to the satisfaction or waiver The voluntary surrender of a known right; conduct supporting an inference that a particular right has been relinquished. The term waiver is used in many legal contexts. of several other conditions, including, among others, (i) the approval of the Merger Agreement by the affirmative AFFIRMATIVE. Averring a fact to be true; that which is opposed to negative. (q.v.) 2. It is a general rule of evidence that the affirmative of the issue must be proved. Bull. N. P. 298 ; Peake, Ev. 2. 3. vote of a majority of the shares of common stock voted (including abstentions, but excluding broker non-votes) on a proposal to approve the Merger Agreement at a special meeting of stockholders to be held in connection with the merger, without taking into account those shares owned by Mr. Vajna, Valdina or any affiliate of Mr. Vajna or Valdina, and (ii) that the percentage of shares of common stock demanding appraisal does not exceed 15% of the shares outstanding at the effective time of the merger. The Merger Agreement may also be terminated and the merger abandoned in certain circumstances including, among other, if the parties to the Merger Agreement mutually agree, if the Company's agreement with Disney regarding the sale of substantially all of the films in the Company's motion picture library and certain other assets is terminated, or if the merger is not consummated con·sum·mate tr.v. con·sum·mat·ed, con·sum·mat·ing, con·sum·mates 1. a. To bring to completion or fruition; conclude: consummate a business transaction. b. by December 31, 1997. As a result of the merger, Cinergi will become wholly owned by Mr. Vajna and Valdina. The Company has filed with the Securities and Exchange Commission preliminary proxy materials relating to the special meeting of the Company's stockholders to be held in connection with the merger and the sale of the films in the Company's motion picture library. Assuming all conditions to the merger are satisfied, including approval by the Company's stockholders, the Company currently anticipates that the merger will not be consummated until at least mid-December 1997. However, the merger could be delayed beyond such time as a result of a variety of factors including the time required to obtain necessary approvals. Any delay of the merger beyond December 31, 1997 would require the consent of all parties to the Merger Agreement. The Company was formed in 1989 as an independent producer and distributor of motion pictures which are distributed in domestic and international theatrical and ancillary markets, including home video, cable and broadcast television. -0- THIS PRESS RELEASE INCLUDES FORWARD LOOKING STATEMENTS THAT INVOLVE RISKS AND UNCERTAINTIES. CERTAIN FACTORS MAY CAUSE ACTUAL EVENTS TO DIFFER MATERIALLY FROM THOSE CONTAINED IN THE FORWARD LOOKING STATEMENTS. NO ASSURANCES CAN BE GIVEN THAT THE MERGER, THE SALE OF SUBSTANTIALLY ALL OF THE FILMS IN THE COMPANY'S MOTION PICTURE LIBRARY AND CERTAIN OTHER ASSETS TO DISNEY, OR THE SALE OF THE COMPANY'S RIGHTS IN DIE HARD WITH A VENGEANCE TO TWENTIETH CENTURY FOX FILM CORPORATION (WHICH TRANSACTIONS ARE EACH SUBJECT TO A NUMBER OF CONDITIONS AND TO TERMINATION IN CERTAIN CIRCUMSTANCES) WILL BE CONSUMMATED. CINERGI AND ITS OPERATIONS ARE ALSO SUBJECT TO THE RISKS AND UNCERTAINTIES DESCRIBED IN CINERGI'S REPORTS FILED FROM TIME TO TIME WITH THE SECURITIES AND EXCHANGE COMMISSION, INCLUDING WITHOUT LIMITATION, CINERGI'S QUARTERLY REPORT ON FORM 10-Q Form 10-Q See 10-Q. FOR THE QUARTER ENDED SEPTEMBER 30, 1997, CINERGI'S FORM 8-K Form 8-K The form required by the SEC when a publicly held company incurs any event that might affect its financial situation or the share value of its stock. Form 8-K See 8-K. DATED APRIL 3,1997 FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 4, 1997, CINERGI'S FORM 8-K DATED JULY 9, 1997 FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 17, 1997, CINERGI'S FORM 8-K DATED AUGUST 25, 1997 FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 5, 1997, CINERGI'S FORM 8-K DATED OCTOBER 2, 1997 FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 9, 1997, AND CINERGI'S ANNUAL REPORT ON FORM 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. FOR THE YEAR ENDED DECEMBER 31, 1996. -0-
CINERGI PICTURES ENTERTAINMENT INC.
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(Unaudited)
Three Months Nine Months
Ended September 30, Ended September 30,
1997 1996 1997 1996
Revenues
Feature films $15,649 $30,160 $59,186 $89,712
Fee income 0 29 23 60
15,649 30,189 59,209 89,772
Costs and expenses
Amortization of film costs,
residuals & participations (17,785) (28,543) (62,198) (86,954)
Selling, general and
administrative expenses (6,210) (2,111) (14,071) (4,990)
Provision for impairment of
long-lived assets -- -- (2,665) --
Operating loss (8,346) (465) (19,725) (2,172)
Interest expense (1,970) -- (4,362) (176)
Interest income 483 171 1,300 701
Net loss ($9,833) ($294) ($22,787) ($1,647)
Net loss per share ($0.73) ($0.02) ($1.69) ($0.12)
Weighted average number of
common shares outstanding 13,447 14,192 13,448 14,192
CONTACT: Warren Braverman Chief Operating Officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. Cinergi Pictures Cinergi Pictures Entertainment Inc. was a small independent production company that was formed in 1992 by Andrew G. Vajna. Vajna had previously sold his interest in his first production company, Carolco International Pictures in 1989, which he had started with his partner Mario Entertainment Inc. 310/315-6000 or Joseph N. Jaffoni David C. Collins Jaffoni & Collins Incorporated 212/835-8500 |
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion