Genius Products, Inc. Reports Year-End Results for 2005; Company Achieves 34% Increase in Net Revenue for 2005.SOLANA Solana is the Spanish word for the sunny side of a mount or valley. It can refer to:
On December 5, 2005, Genius Products, Inc. announced a distribution joint venture with The Weinstein Company called Genius Products, LLC,[1], and , Inc. (OTCBB OTCBB See OTC Bulletin Board (OTCBB). :GNPI GNPI Gross Net Premium Income ) an entertainment company that produces, publishes, licenses and distributes films, videos and music, under a variety of branded names and non-branded names, and the U.S. home video distributor for The Weinstein Weinstein is a German surname meaning wine stone and may refer to:
TWC Time-Warner Cable TWC Texas Workforce Commission (also seen as TWFC) TWC The Wellness Community TWC The Washington Center TWC Teachers & Writers Collaborative TWC Trustworthy Computing "), today announced results for the year-ended December December: see month. 31, 2005. HIGHLIGHTS AND MAJOR DEVELOPMENTS FROM 2005 Financial Highlights --Net revenue increased to $22.3 million for the year ended December 31, 2005, a 34% increase from the prior year net revenue of $16.6 million due in part to approximately $4.4 million from the acquisition of 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 Media Corporation ("AVMC AVMC Aquatic Veterinary Medicine Committee (American Veterinary Medical Association) ") --Consistent with the Company's stated strategy to move away from value products toward higher margin products, 2005 net revenue derived from higher margin products increased to $18.6 million compared to $5.5 million in 2004, an increase of $13.1 million or 238% --Cash balances increased to $30.6 million at December 31, 2005 compared to $1.2 million at December 31, 2004 as a result of financing activities throughout the year --Long-lived assets, comprised of production masters and film library, were $19.7 million at December 31, 2005 compared to $3.9 million at December 31, 2004. The increase in long-lived assets is primarily the result of additions to the Company's film library and the March 2005 acquisition of AVMC including its Wellspring well·spring n. 1. The source of a stream or spring. 2. A source: a wellspring of ideas. wellspring Noun library of approximately 700 titles --Net loss totaled $17.2 million which includes $11.2 million of charges relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the transition to higher margin products, 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 charges and transaction fees and expenses associated with The Weinstein Company transaction, partially offset by the gain of $1.35 million from the sale of Baby Genius Strategic Highlights and Other Developments --The Company accomplished several strategic and restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). goals, positioning the Company for profitable growth in 2006 and beyond through the Company's owned content library, The Weinstein Company relationship and other content providers --Signed a definitive agreement to launch a new venture which will become the exclusive U.S. home video distributor for TWC, which is expected to close in May 2006 --The Company plans to release 20 to 25 feature films per year on home video for TWC --Completed the acquisition of AVMC including the Wellspring library of approximately 700 films --Completed a sale of Baby Genius, Kid Genius, Little Tikes and Wee Worship lines of business to Pacific Entertainment in December 2005 resulting in a gain of $1.35 million being recognized in FY 2005 --Implemented corporate reorganizations of the Company's management team relating to the integration of the newly acquired AVMC and the anticipated closing of the transaction with The Weinstein Company, resulting in severance expense of $2.7 million being recorded in FY 2005 --The Company announced adjustments that reduced results by $0.4 million for each of the second and third quarters of 2005. The adjustments are primarily related to accounting for theatrical revenues, deferred licensing revenue, certain royalty expenses paid to content owners and expenses related to packaging costs which are explained in the Company's 10-K. The Company will be filing amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. 10-Qs for the three month periods ended June 30, 2005 and September 30, 2005 --Hired several new key members of the executive management team --Hired a new CFO See Chief Financial Officer. (February 2006) --Initiated a systems enhancement project to improve visibility of activity based costing, sales analytics and supply chain management in order to improve financial controls, comply with anticipated Sarbanes Oxley regulations and to accelerate future financial reporting --Changed state of incorporation from the State of Nevada to the State of Delaware Delaware, state, United States Delaware (dĕl`əwâr, –wər), one of the Middle Atlantic states of the United States, the country's second smallest state (after Rhode Island). Financial Summary Net revenues increased $5.7 million, or 34.3%, for the year ended December 31, 2005 to $22.3 million as compared to $16.6 million for the comparable prior year, due to the increase in sales of DVDs and the acquisition of AVMC, offset in part by an increase in sales returns and allowances relating to worse than anticipated sell-through to consumers of products in one retail program during the quarter ended December 31, 2005. Consistent with the Company's stated strategy to move away from lower margin value products toward higher margin products, 2005 net revenue derived from higher margin products was $18.6 million as compared to $5.5 million in 2004, an increase of $13.1 million or 238%. Sales returns, discounts and allowances increased $7.3 million, or 268.5%, during the year ended December 31, 2005 to $10.0 million, as compared to $2.7 million during the year ended December 31, 2004. The increase resulted primarily from additional discounts, higher returns from increased sales year over year, and higher than expected returns Expected Return The average of a probability distribution of possible returns, calculated by using the following formula: during the quarter ended December 31, 2005. A significant portion of the returns was related to a retail promotion with one of the Company's major retailers. The Company has completed the installation of a new fully operational inventory management system that will improve sales forecasting Sales forecast A key input to a firm's financial planning process. External sales forecasts are based on historical experience, statistical analysis, and consideration of various macroeconomic factors. and monitoring. Video and DVD DVD: see digital versatile disc. DVD in full digital video disc or digital versatile disc Type of optical disc. The DVD represents the second generation of compact-disc (CD) technology. cost of sales decreased to 55.1% of DVD and VHS (Video Home System) A half-inch, analog videocassette recorder (VCR) format introduced by JVC in 1976 to compete with Sony's Betamax, introduced a year earlier. revenues during the year ended December 31, 2005 as compared to 71.7% of DVD and VHS revenues in 2004. The improvement was due to the shift in product mix to higher margin product and was partially offset by a reserve recorded for obsolete OBSOLETE. This term is applied to those laws which have lost their efficacy, without being repealed, 2. A positive statute, unrepealed, can never be repealed by non-user alone. 4 Yeates, Rep. 181; Id. 215; 1 Browne's Rep. Appx. 28; 13 Serg. & Rawle, 447. products determined by management to be of limited or no value as the Company shifted its product mix away from the lower margin value product line. General and administrative expenses were $11 million for 2005 or 49% of net revenue, compared to $5.1 million during 2004 or 31% of net revenues in 2004. These increases were primarily due to increased payroll, rent, and utilities as a result of the acquisition of AVMC and increased payroll and overhead to support the increased sales volume anticipated as part of the new relationship with The Weinstein Company from which revenue will not be generated until 2006. Excluding expenses of $2.4 million associated with TWC transaction fees and TWC-related overhead and other charges, general and administrative expenses would have been $8.6 million in 2005, or 39% of net revenue, as compared to $5.1 million, or 31% in 2004. The net loss increased by $11.1 million for the year ended December 31, 2005, to $17.2 million, as compared to a net loss of $6.0 million for 2004. Trevor Drinkwater, President and Chief Executive Officer, commented, "We have assembled as·sem·ble v. as·sem·bled, as·sem·bling, as·sem·bles v.tr. 1. To bring or call together into a group or whole: assembled the jury. 2. a team to continue our improvement in both financial controls and business execution that will enable us to handle the anticipated dramatic acceleration of revenues in the coming years." John Mueller John E. Mueller (born 1937, Saint Paul, Minnesota) is a political scientist in the field of international relations as well as a scholar of the history of dance. He is recognized for his ideas concerning "the banality of ethnic war" [1] , EVP EVP Executive Vice President EVP EGR (Exhaust Gas Recirculation) Valve Position Sensor EVP Electronic Voice Phenomenon EVP Europäische Volkspartei (Germany) EVP Employee Value Proposition and Chief Financial Officer, emphasized, "Our finance team is working closely with our operational teams to continue improvement in our financial controls, internal management reporting and accountability in order to prepare the Company for the significant increase in sales volume from The Weinstein Company transaction and improve profitability." Mr. Drinkwater concluded, "To demonstrate the magnitude of our sales growth, due to our successful release of 'DERAILED', a Weinstein Company film starring Jennifer Aniston and Clive CLIVE Computer-aided Learning in Veterinary Education. A consortium of six veterinary schools in the United Kingdom providing computer based learning in veterinary undergraduates courses. Owen that became the number one DVD rental in its debut week in March, we will generate gross revenue in the first quarter of 2006 that will be approximately equal to the gross revenues of our Company for the entire full year 2005. With six exciting films to be released in our second quarter including The Weinstein Company's Easter weekend debut of Scary scar·y adj. scar·i·er, scar·i·est 1. Causing fright or alarm. 2. Easily scared; very timid. scar Movie 4, that achieved a record $41 million US Box Office, I am confident that 2006 will be a record year for our company and our shareholders." The Company plans on announcing first quarter 2006 results in May and will hold an investor conference call at that time. ABOUT GENIUS PRODUCTS, INC. Genius Products, Inc. (OTCBB:GNPI) is an entertainment company that produces and distributes an ever-expanding library of home entertainment products including DVDs and CDs. Sold in retail outlets retail outlet n → punto de venta retail outlet n → point m de vente retail outlet retail n → nationwide under such well-known brands as NBC News NBC News (along with NBC News + HD) is the news division of American television network NBC, a part of NBC Universal, which is majority-owned by General Electric. Its current president is Steve Capus. It is the top-rated broadcast news division and has been for a decade. , Wellspring, TV Guide(R), Sundance Channel Home Entertainment(TM) and Baby Genius(R), the Company's products are distributed through the Genius Products Branded Distribution Network, an extensive, proprietary distribution network that extends throughout the U.S. to mass, drugstore, supermarket and specialty retailers. Genius Products boasts a premiere management team comprised of seasoned executives from major Hollywood studios, who have steered the Company into the forefront of the industry through their landmark distribution deal with The Weinstein Company. Upcoming films planned for release by Genius Products include films by The Weinstein Company such as HOODWINKED, an updated retelling re·tell·ing n. A new account or an adaptation of a story: a retelling of a Roman myth. of the classic story of Red Riding Hood A hood formerly worn by women when riding A kind of cloak with a hood. See also: Riding Riding with the voices of Anne Hathaway Noun 1. Anne Hathaway - wife of William Shakespeare (1556-1623) Hathaway , Glenn Close and Jim Belushi; MRS MRS - Modifiable Representation System. An integration of logic programming into Lisp. ["A Modifiable Representation System", M. Genesereth et al, HPP 80-22, CS Dept Stanford U 1980]. . HENDERSON PRESENTS, starring Judi Dench Dame Judith Olivia Dench, CH, DBE, FRSA, (born 9 December 1934), usually known as Dame Judi Dench, is an Academy Award, Golden Globe, Tony, three-time BAFTA, and six-time Laurence Olivier Award-winning English actress. and Bob Hoskins; and THE MATADOR matador In bullfighting, the principal performer, who works the capes and attempts to dispatch the bull with a sword thrust between the shoulder blades. Most of the techniques used by modern matadors were established in the 1910s by Juan Belmonte (b. 1894–d. , starring Pierce Pierce may refer to: Places
Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Statement Except for historical matters contained herein, the matters discussed 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. . The forward-looking statements reflect assumptions and involve risks and uncertainties that may affect Genius Products' business, forecasts, projections and prospects, and cause actual results to differ materially from those in these forward-looking statements. These forward-looking statements include, but are not limited to, statements relating to the anticipated closing of the transaction with The Weinstein Company, profitability in 2006 or beyond, increased sales volume and improved profitability, the anticipated growth of revenues, the number of anticipated releases per year, the anticipated timing and financial performance of new releases including HOODWINKED, MRS. HENDERSON PRESENTS, WOLF CREEK Wolf Creek may refer to several places in the United States: Cities
2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or occurring after the date of this press release.
Genius Products, Inc. and Subsidiaries
Consolidated Balance Sheet
December 31,
2004 2005
------------------------
ASSETS
Current assets:
Cash and cash equivalents $ 1,223,881 $30,597,164
Accounts receivable, net of allowance for
doubtful accounts and sales
returns of $1,542,805 and $6,908,789 3,615,073 2,406,658
Inventories, net 3,473,483 5,567,953
Prepaid expenses 312,046 703,875
Notes receivable, related party - 750,000
------------------------
Total current assets 8,624,483 40,025,650
Property and equipment, net 264,989 396,358
Production masters, net of accumulated
amortization of $1,054,005
and $2,510,307 3,867,546 4,573,191
Film library, net of accumulated
amortization of $1,517,001 - 15,153,988
Notes receivable, related party - 1,712,353
Goodwill - 14,487,917
Deposits and other 239,148 15,545
------------------------
Total assets $12,996,166 $76,365,002
========================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 7,329,218 $ 9,242,560
Notes payable - 5,379,296
Accrued expenses 789,166 3,307,893
Customer deposits - 189,423
Debentures payable 50,750 50,750
Redeemable common stock 395,172 414,471
------------------------
Total current liabilities 8,564,306 18,584,393
Deferred gain, related party, net of current
portion - 1,212,353
Deferred tax liability - 1,380,338
------------------------
Total liabilities 8,564,306 21,177,084
Stockholders' equity
Preferred stock, $.0001 par value;
10,000,000 shares authorized; no shares
outstanding - -
Common stock, $.0001 par value; 100,000,000
shares authorized; 25,208,512 and
60,438,154 shares outstanding 2,521 6,044
Additional paid-in capital 26,006,700 93,919,755
Accumulated deficit (21,577,361)(38,737,881)
------------------------
Total stockholders' equity 4,431,860 55,187,918
------------------------
Total liabilities and stockholders'
equity $12,996,166 $76,365,002
========================
Genius Products, Inc. and Subsidiaries
Consolidated Statements of Operations
Years Ended December 31,
2003 2004 2005
---------------------------------------
Revenues:
Video and DVD $ 876,285 $15,967,711 $ 24,804,906
Theatrical - - 750,883
Audio 2,149,096 2,946,237 5,992,065
Royalties, licensing
and other 456,110 420,299 745,054
---------------------------------------
Gross revenues 3,481,491 19,334,247 32,292,908
Sales returns, discounts and
allowances (412,985) (2,704,315) (9,965,179)
---------------------------------------
Net revenues 3,068,506 16,629,932 22,327,729
Costs and expenses
Cost of revenues:
Video and DVD 466,384 11,447,806 13,664,813
Theatrical - - 2,130,182
Audio 1,081,149 1,185,112 3,814,478
Amortization of production
masters and film library 204,493 681,404 2,973,303
Warehouse expense and other 397,484 579,112 299,532
---------------------------------------
Total cost of revenues 2,149,510 13,893,434 22,882,308
---------------------------------------
Gross profit (loss) 918,996 2,736,498 (554,579)
Operating expenses (income):
Product development 428,465 956,521 1,127,481
Sales and marketing 1,020,860 2,166,785 2,582,527
General and administrative 2,081,651 5,107,547 11,036,118
Severance - - 2,745,422
Gain on sale, related party - - (1,351,710)
---------------------------------------
Total operating expenses 3,530,976 8,230,853 16,139,838
---------------------------------------
Loss from operations (2,611,980) (5,494,355) (16,694,417)
Interest expense and
other, net (129,896) (551,013) (465,303)
---------------------------------------
Loss before provision for
income tax (2,741,876) (6,045,368) (17,159,720)
Provision for income tax 800 800 800
---------------------------------------
Net loss $(2,742,676) $(6,046,168) $(17,160,520)
=======================================
Basic and diluted net
loss per share $ (0.16) $ (0.25) $ (0.42)
=======================================
Basic and diluted weighted
average shares 17,574,405 23,826,584 40,400,112
=======================================
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