Cinergi Pictures Entertainment reports first quarter results.

SANTA MONICA, Calif.--(BUSINESS WIRE)--May 20, 1997--Cinergi Pictures Entertainment Inc. (CINE: Nasdaq) today reported results for the first quarter ended March 31, 1997.

Revenues for the quarter ended March 31, 1997 were $26,525,000 compared with $37,105,000 during the first quarter of 1996. The decrease in revenues is attributable to lower revenues associated with the theatrical release of The Shadow Conspiracy during the quarter compared to revenues from the international theatrical availability of Nixon and from domestic pay-per-view and foreign overages from Die Hard, With a Vengeance in the first quarter of 1996.

Selling, general and administrative expenses (excluding production overhead costs capitalized to film costs) increased to $3,519,000 for the quarter ended March 31, 1997, from $1,476,000 for the first quarter of 1996 primarily since no production overhead was capitalized into film costs in the first quarter of 1997 in light of the Company's previously announced agreement to sell substantially all of the films in its motion picture library to Walt Disney Pictures and Television (including An Alan Smithee Film which is the only film currently in production) and the Company's current intention not to commence production on additional motion pictures. In the first quarter of 1996, $1,664,000 of production overhead was capitalized into film costs. Similarly, interest expense, rose to $1,133,000 for the quarter ended March 31, 1997 from $176,000 for the quarter ended March 31, 1996 primarily because no interest expense was capitalized to film costs in the 1997 period.

The Company incurred a net loss for the first quarter of 1997 of $5,180,000, or $0.39 per share, compared with a net loss of $637,000, or $0.04 per share, during the same period last year. The weighted average number of common and common share equivalents outstanding for the first quarters of 1997 and 1996 were 13,451,000 and 14,192,000, respectively.

The Company also reported that, as a result of discussions with certain parties involved in the production of Broadway Brawler, it has recently settled various obligations in connection with the February 1997 shutdown of such film. As a result of agreements entered into among such parties, the Company was relieved of the obligation to repay $3,000,000 in advances which had been made by Buena Vista Pictures Distribution, Inc. as part of funding production of the film, the Company agreed to transfer its Broadway Brawler production subsidiary and the Company's rights in the film to one of the parties to the settlement discussions, the Company was paid an aggregate of $11,821,000 representing shutdown costs incurred or committed to by the Company in connection with the production and shutdown of the film as well as payment for the transfer of the production subsidiary and the film rights, and the Company was indemnified for additional costs it may bear (subject to certain limited exceptions and limitations) as a result of the production and shutdown of the film. The Company was not reimbursed for overhead otherwise allocable to production of the film. Of the $11,821,000 paid to the Company, approximately $8,466,000 was immediately used by the Company to repay the debt incurred under the Company's credit facility in connection with production of the film.

Cinergi also announced that it has recently settled legal proceedings with Le Film Office (LFO) relating to a minimum guarantee advance of $3,071,000 which was payable to the Company upon delivery of The Shadow Conspiracy. In accordance therewith, the Company received a reduced minimum guarantee payment of $2,300,000 as full settlement of the dispute. As a result of the settlement agreement between LFO and the Company (pursuant to which the minimum guarantee advance payable by LFO with respect to the film was reduced by $771,000), its first quarter results included an adjustment of $771,000 to reduce the film costs of The Shadow Conspiracy to its net realizable value.

Cinergi Pictures Entertainment Inc. was formed in 1989 as an independent producer and distributor of motion pictures which are distributed in all domestic and international theatrical and ancillary markets, including home video, cable and broadcast television.

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 sale of substantially all of the films in the Company's motion picture library to Walt Disney Pictures and Television (which is 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 Cinergi's quarterly report on Form 10-Q for the quarter ended March 31, 1997 and Cinergi's annual report on Form 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
                                         Ended March 31,
                                         1997       1996
Revenues:
 Feature films                        $26,525    $37,105
 Fee income                                 -         11
                                       26,525     37,116

Costs and expenses:
 Amortization of film costs and
  participations                       27,344     36,335
 Selling, general and administrative
  expenses                              3,519      1,476

Operating (loss) income                (4,338)      (695)

Interest (expense) income, net           (842)        58

Net (loss) income before income taxes  (5,180)      (637)

Provision for income taxes                  -         -

Net (loss) income                    $ (5,180)    $ (637)

Net (loss) income per common share   $  (0.39)    $(0.04)

Weighted average number of
 common shares outstanding             13,451     14,192

CONTACT: Cinergi Pictures Entertainment Inc.

Warren Braverman

Chief Operating Officer

310/315-6000

or

Jaffoni & Collins Incorporated

Joseph N. Jaffoni

David C. Collins

212/505-3015