Overseas Filmgroup Reports Q2 Results.Business Editors LOS ANGELES--(BUSINESS WIRE)--Aug. 22, 2000 Worldwide independent film distributor Overseas Filmgroup, Inc. (OTC OTC See: Over-the-counter. OTC See over-the-counter market (OTC). BB:OSFG) (http://www.ofg.com) today announced operating results for the three-month and six-month periods ended June 30, 2000. For the quarter ended June 30, 2000, revenues were $4,411,000, compared to $6,541,000 in the year-earlier period, as Overseas Filmgroup had lower revenues from films first available for release in the quarter, compared to the 1999 three-month period. Overseas had a loss from operations of $706,000 during the second quarter of 2000, versus income from operations of $409,000 in the year-earlier period. The quarterly 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. reflects the expensing of distribution and marketing costs amounting to $795,000 in the current quarter (as provided by a new accounting standard described below), compared to capitalizing and amortizing such costs in the comparable year-ago period. The loss also generally reflects lower gross margins and an increase in SG&A expense in the current quarter compared to a year ago. Overseas Filmgroup reported a net loss of $667,000, or $0.10 per share, for the quarter ended June 30, 2000, compared to a net loss of $48,000, or $0.01 per share, in the prior year period. The weighted average basic and diluted common shares outstanding for the 2000 and 1999 second quarter periods increased to 6,565,197 from 5,732,778, respectively, principally reflecting the weighted average impact of shares issued with respect to the Rosemary Street investment completed near the close of the second quarter of 2000. For the first half of 2000, revenues were $10,460,000, compared to $13,231,000 in the first half of 1999. For the six-month period ended June 30, 2000, the Company had an operating loss of $727,000, versus operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. of $1,015,000, during the comparable 1999 period. The Company reported a loss before cumulative effect of accounting changes for the six months ended June 30, 2000 of $1,224,000, or $0.19 per share, compared to net income of $53,000, or $0.01 per share, in the year-ago period. As a result of the adoption of SOP 00-2, Overseas Filmgroup recorded a one-time, pre-tax, 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 $15,581,738 ($14,123,133 after taxes) effective January 1, 2000. Reflecting this charge, Overseas Filmgroup reported a net loss of $15,347,000, or $2.39 per share, for the six months ended June 30, 2000. Per share results for the 2000 and 1999 six-month periods are based on 6,430,997 and 5,732,778 weighted average basic and diluted common shares outstanding, respectively. Strategic Investment by Rosemary Street In late June 2000, Overseas Filmgroup completed the $17 million equity investment by Rosemary Street Productions, LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control , the investment vehicle of New York-based commercial production and studio facilities company, EUE EUE Exotic Ungulate Encephalopathy EUE Early Unit End (Stanford Folding@Home) EUE Expected Unserved Energy EUE End User Experience EUE Early User Evaluation EUE External Upset Ends EUE Early User Experiment Screen Gems Ltd. As part of the investment, Rosemary Street President, Christopher Cooney, was appointed Overseas' Chief Executive Officer and Co-Chairman. In exchange for its investment, Rosemary Street received 5,097,413 common shares, 904,971 preferred shares Preferred shares Preferred shares give investors a fixed dividend from the company's earnings and entitle them to be paid before common shareholders. See: Preferred stock. (each convertible into two shares of common stock), and warrants to purchase 2,313,810 shares of common stock at $3.40 per share. Simultaneously, Overseas completed a new $40 million five-year, secured revolving credit Revolving Credit A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. facility (of which $33 million has been committed and $18 million is available to the Company under its current borrowing base calculation) with The Chase Manhattan Bank The Chase Manhattan Bank, now part of JPMorgan Chase, was formed by the merger of the Chase National Bank and the Bank of the Manhattan Company in 1955. The bank is headquartered in New York City. and other commercial banks and financial institutions. As a part of the financial restructuring related to the Rosemary Street investment, the Company has reduced outstanding debt and related party liabilities by approximately $16.3 million through a combination of repayments and negotiated expense forgiveness. Further enhancing the Company's capital structure, certain corporate insiders have contributed 1,588,812 shares of OSFG common stock as additional paid in capital to the Company. Assuming conversion of the Company's preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. , Overseas Filmgroup would now have 11,613,848 shares of common stock outstanding. Adoption of SOP 00-2 Overseas Filmgroup has elected early adoption of the American Institute of Certified Public Accountants With over 330,525 CPA members (in August 2006), the American Institute of Certified Public Accountants (AICPA) is the largest professional organization of Certified Public Accountants (CPAs) in the United States of America. recent Statement of Position 00-2, "Accounting by Producers or Distributors of Films" ("SOP 00-2"). SOP 00-2 establishes new film accounting standards, including changes in revenue recognition and accounting for advertising, development and overhead costs overhead costs see fixed costs. . Under SOP 00-2, distribution and marketing costs are treated as period costs and expensed as incurred, rather than capitalized and amortized as a part of film costs. Additionally, amortization time frames for films have been reduced to 10 years. Overseas Filmgroup Co-Chairman and Chief Executive Officer, Christopher Cooney, commented, "Having concluded our investment and the recapitalization of the Company in late June, we have made significant decisions to position the Company for the future and to unleash its unique potential. We have decided to dramatically reduce the debt burden which has depleted de·plete tr.v. de·plet·ed, de·plet·ing, de·pletes To decrease the fullness of; use up or empty out. [Latin d past earnings through high interest costs. We have elected early adoption of SOP 00-2 to immediately remove the overhang on profitability caused by the one-time charge, and investors should note that this write-down of our film cost asset is an accounting convention and does not impact our library value. "Looking forward, we have begun aggressive implementation of our strategic plans meant to invigorate in·vig·or·ate tr.v. in·vig·or·at·ed, in·vig·or·at·ing, in·vig·or·ates To impart vigor, strength, or vitality to; animate: "A few whiffs of the raw, strong scent of phlox invigorated her" new high profile, commercial product flow, and we have activated new revenue centers, including direct distribution of home video and television commercial production. We will be realistic with respect to the time frame for results from these new initiatives but have confidence in our near, medium and long term ability to propel the Company to the forefront of the independent sector, lead by a management team that is the best in the business. I personally am extremely excited about our future." Overseas Filmgroup is one of the few truly independent worldwide film distribution companies specializing in the acquisition, financing, packaging and distribution of independently produced feature films of all genre. The upcoming slate includes Cheri (adapted from the novel written by Colette and starring Jessica Lang); Gein (based on the true life story of the serial killer Ed serial killer Forensic psychiatry A person who commits serial murders Prototypic SK White ♂ age 30; 97% are ♂; 80% are sociopaths. See Dahmer, Depraved heart murder, Ice Man. Cf Megan's law, Son of Sam law. Gein); Till the End of Time (based on the love affair between Georgia O'Keefe and Alfred Steiglitz, and starring Linda Fiorentino and Ben Kingsley); Proximity (starring Rob Lowe and James Coburn James Harrison Coburn, Jr.[1] (August 31, 1928 – November 18, 2002) was an Academy Award-winning American actor. Biography Early life Coburn was born in Laurel, Nebraska, the son of Mylet S. (née Johnson) and James Harrison Coburn, Sr. ); Relative Values (based on the Noel Coward Noun 1. Noel Coward - English dramatist and actor and composer noted for his witty and sophisticated comedies (1899-1973) Sir Noel Pierce Coward, Coward play, and starring Julie Andrews Dame Julie Elizabeth Andrews, DBE (born Julia Elizabeth Wells[1] on 1 October 1935[2]) is an award-winning English actress, singer, author and cultural icon. , William Baldwin and Jeanne Tripplehorn); and, Greenfingers (starring Clive Owen, Helen Mirren and David Kelly  This article or section needs copy editing for grammar, style, cohesion, tone and/or spelling.You can assist by [ editing it] now. ). Previous films include Titus (directed by Julie Taymor and starring Anthony Hopkins Noun 1. Anthony Hopkins - Welsh film actor (born in 1937) Sir Anthony Hopkins, Sir Anthony Philip Hopkins, Hopkins and Jessica Lange Jessica Phyllis Lange (born April 20, 1949) is a two-time Academy Award-winning American actress. Biography Early life Lange, the third of four children, was born in Cloquet, Minnesota to Dorothy Florence Sahlman and Albert John Lange. ); Waking Ned Devine (which grossed over $25 million in the U.S. box office); and, The Prophecy (starring Christopher Walken - achieved $17 million in U.S. box office). Overseas Filmgroup's domestic division is First Look Pictures. First Look currently has The Opportunists (starring Christopher Walken) in release. First Look's next releases are Me & Isaac Newton (directed by Michael Apted and produced by Clear Blue Sky Productions); and, Blessed Art Thou (directed by Tim Disney). Previous films include: A Map of the World (starring Sigourney Weaver Sigourney Weaver (born Susan Alexandra Weaver on October 8, 1949 in New York City) is an Oscar-nominated American actress. Early life Weaver is the daughter of late NBC television executive Pat Weaver (d. 2002) and Elizabeth Inglis, a former British actress (d. and Julianne Moore Julianne Moore (born December 3, 1960) is an Emmy Award-winning American actress. She has been nominated for four Academy Awards. Biography Early life Moore was born Julie Anne Smith in Fort Bragg, near Fayetteville, North Carolina,[] , and produced by Kathleen Kennedy and Frank Marshall); Antonia's Line (Academy Award winner for Best Foreign Language Film of 1995); Mrs. Dalloway (starring Vanessa Redgrave); and, The Secret of Roan roan a coat color consisting of a relatively uniform mixture of white and colored hairs, giving a 'silvered' hue; self-describing colors are red-roan, blue-roan, chestnut roan. Inish (directed by John Sayles). First Look Pictures also specializes in the 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. release of films in the U.S. and is focused on exploiting non-theatrical rights and new distribution opportunities. This press release includes forward-looking statements that involve risks and uncertainties. Certain factors may cause actual results to differ materially from those contained in the forward looking statements, including, but not limited to, quarterly and annual fluctuations in results of operations, the unpredictability of audience acceptance of any particular motion pictures, the highly speculative and inherently risky and competitive nature of the motion picture industry, and other risks detailed from time to time in the Company's reports filed with the Securities and Exchange Commission including, but not limited to, its 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, 1999. As the motion picture business and the Company's operations are subject to numerous uncertainties, including, among other things in addition to the forgoing factors, the financing requirements of various film projects, competition from companies within the motion picture industry and in other entertainment media (many of which have significantly greater financial and other resources than the Company), and the release schedule of competing films, no assurance can be given that the Company's acquisition, production, financing and distribution goals and strategies (including as described herein) will be achieved. Actual results may differ materially from management expectations expressed in any forward-looking statements. -0-
OVERSEAS FILMGROUP, INC.
Consolidated Statements of Operations
Three Months Ended Six Months Ended
June 30, June 30,
(unaudited) (unaudited)
2000 1999 2000 1999
Revenues $4,411,005 $6,540,726 $10,460,301 $13,231,090
Expenses:
Film costs 3,352,169 5,412,347 8,008,302 10,751,083
Distribution
and marketing
costs 795,086 1,415,175
Selling,
general and
administrative 970,141 719,412 1,763,628 1,464,986
Total
expenses 5,121,446 6,131,759 11,187,105 12,216,069
(Loss) income
from operations (706,391) 408,967 (726,804) 1,015,021
Other income
(expense):
Interest income 9,660 1,520 9,710 1,809
Interest expense (458,436) (491,382) (977,409) (963,858)
Other income 507,708 4,181 562,156 29,660
Total other
income (expense) 58,932 (485,681) (405,543) (932,389)
(Loss) income before
income taxes and
cumulative effect of
accounting changes (647,459) (76,714) (1,132,347) 82,632
Income tax
(provision) benefit (19,246) 29,000 (91,620) (30,000)
(Loss) income before
cumulative effect of
accounting changes (666,705) (47,714) (1,223,967) 52,632
Cumulative effect of
accounting changes 0 0 (14,123,133) 0
Net (loss) income $(666,705) $ (47,714) $(15,347,100) $ 52,632
Basic earnings
(loss) per share:
(Loss) income
before cumulative
effect of an
accounting
change $ (0.10) $ (0.01) $ (0.19) $ 0.01
Net (loss)
income $ (0.10) $ (0.01) $ (2.39) $ 0.01
Weighted average
number of basic
and diluted common
shares outstanding 6,565,197 5,732,778 6,430,997 5,732,778
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