Printer Friendly

American Vantage Cos. Reports Year-End Results.

LAS VEGAS -- American Vantage Cos. (OTCBB: AVCS) 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 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 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"), a then wholly owned subsidiary, to Genius Products Inc. ("Genius" or "GNPI"). 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, 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 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 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 Las Vegas Restaurant ("Border Grill") that totaled $525,000 and $624,000 for the 12 months ended Dec. 31, 2005 and 2004, respectively. Cash distributions from the Border Grill during the 12 months ended Dec. 31, 2005 and 2004 totaled $575,000 and $1,055,000, respectively. The reduction in cash distributions is due to the fact that, prior to the June 2004 repayment of the company's initial investment in the Border Grill, AVCS received 100% of all cash distributions; while subsequent cash distributions are based on AVCS' 49% equity interest in the Border Grill.

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 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 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 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 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. 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 totaling $2,530,000 and its guaranty 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, a joint venture that creates a promotional event called a video game touring festival;

--Federal and state net operating loss carryforwards and federal general business tax credit carryforwards, and

--Various other assets, including prepaid expenses and furniture and equipment.

At Dec. 31, 2005, the liabilities of the company primarily consist of the following:

--Liabilities relating to 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 for operating expenses.

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" 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. 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
 ============ ============
COPYRIGHT 2006 Business Wire
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2006, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

Article Details
Printer friendly Cite/link Email Feedback
Publication:Business Wire
Geographic Code:1USA
Date:Apr 24, 2006
Words:1708
Previous Article:DFJ Element Invests $3.5 Million in Fat Spaniel Technologies; First Institutional Funding for Leading Provider of IT Infrastructure for...
Next Article:Consumers Driving Their Way To Higher Credit Scores Thanks to AutoTrakk.


Related Articles
Service extension opportunities checklist.
The audit from the inside.
IDC.
Section 404 compliance in the annual report: assessing control deficiencies now is a documented process required of management.
The Securities and Exchange Commission amended its rules to allow certain larger companies an additional year to comply with internal control...
New Rubler firm makes big splash with first venture.
1Q office vacancies nudge higher on Long Island.
Industrial vacancies down, rents up on Long Island.
Long Island 1Q vacancies nudge higher as rents edge up.
Dispute halts online testing at state schools.

Terms of use | Privacy policy | Copyright © 2019 Farlex, Inc. | Feedback | For webmasters