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CST Entertainment, Inc. Reports First Quarter Results; Announces Board Changes

CULVER CITY, Calif., Nov. 22 /PRNewswire/ -- CST Entertainment, Inc. (AMEX: CLR) today reported results for its first fiscal quarter ended September 30, 1996.

Revenues for the quarter were $1,606,750 compared with $1,078,780 a year ago. For the same period, the company sustained a net loss of $700,543, or $0.03 per share, compared with $489,777, or $0.02 per share, a year earlier.

The company has been informed by the American Stock Exchange of its intent to remove the listing of CST's common stock. CST has determined not to appeal this decision. Trading in CST's common stock was halted by the AMEX on October 16, 1996. The company expects to immediately begin trading on the NASD OTC Bulletin Board.

Jody Shapiro, president and chief executive officer, stated, "While results for the first quarter are disappointing, we are encouraged by the fact that 45 percent of the company's colorization revenues were derived from CST's Color F/X division -- which operates at a higher margin then our core coloring business.

Shapiro also added that beginning in the second fiscal quarter the company expects to benefit from lower operating expenses as a result of a previously announced agreement with Florida-based Dynacs Engineering, Inc. to utilize the production services of Dynacs' digital studio facilities in Patna, India.

Shapiro noted that Dynacs will also provide software programming and production support from its U.S.-based offices as part of the agreement.

He added that approximately 60 to 70 percent of labor intensive colorization, special effects, digital ink and paint and 3D animation work will be performed at the facility in India beginning immediately, with an estimated annualized savings in overhead for CST of over $1.5 million. Shapiro noted that CST supervisors are currently in India completing the training of Dynacs' personnel.

CST also today announced that Jody Shapiro has been elected chairman of the board, a position vacated by Gerald Shefsky who resigned on July 2, 1996. In addition, Dr. Ramendra P. Singh, president of Dynacs Engineering, Inc., has joined the board, replacing Abbey J. Butler, who resigned on October 29, 1996. Stephen S. Strick, senior vice president and secretary for CST, and Javier Benavente and Ravi Venugopal, both executives at Dynacs, have also been appointed, increasing the board from five to seven members.

A pioneer in entertainment color enhancement, CST Entertainment, Inc. utilizes a proprietary, digital state-of-the-art technology with four key applications: colorization; special effect applications for commercials and music videos; the creation of Featurizations, series and feature length productions from classic black and white footage; and animation production utilizing efficient and cost-effective technology.
 Statements of Operations
 Quarter Ended September 30
 1996 1995

 Coloring income $931,750 $678,780
 Licensing/royalty income 175,000 400,000
 Library sales income 500,000 --
 1,606,750 1,078,780

 Production 845,171 526,735
 Cost of library rights sold 500,000 --
 Research and development 5,694 36,782
 Depreciation and amortization 172,870 137,071
 Film library amortization 227,500 222,000
 General and administrative 510,657 351,361
 Participation and licensing -- 280,000
 Interest expense 45,401 14,608
 2,307,293 1,568,557
 Net loss $(700,543) $(489,777)

Per share:
 Net loss per share $(0.03) (0.02)

Weighted average number of common shares
 outstanding 27,278,340 26,201,046

SOURCE CST Entertainment, Inc.
 -0- 11/22/96

/CONTACT: Jody Shapiro of CST Entertainment, Inc., 310-417-3444; or Gary S. Maier of Pondel Parsons & Wilkinson, 310-207-9300/


CO: CST Entertainment, Inc. ST: California IN: ENT SU: ERN PER

DP-DP -- LAF048 -- 4034 11/22/96 18:58 EST
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Publication:PR Newswire
Date:Nov 22, 1996
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