Point.360 Announces Fourth Fiscal Quarter And Fiscal 2013 Results

      Point.360 Announces Fourth Fiscal Quarter And Fiscal 2013 Results

PR Newswire

LOS ANGELES, Sept. 12, 2013

LOS ANGELES, Sept. 12, 2013 /PRNewswire/ -- Point.360 (NASDAQ: PTSX), a
leading provider of integrated media management services, today announced
results for the three and twelve month periods ended June 30, 2013. For the
twelve month period ending June 30, 2013 sales were $30.9 million, and the
loss per share was $0.12. For the quarter ended June 30, 2013, the Company's
sales were $7.2 million, generating a loss of $0.08 per share. The Company
also reported $1.8 million of earnings before interest, taxes, depreciation
and amortization and non-cash charges (non-GAAP EBITDAN) for the twelve-month
period, and EBITDAN of ($0.2) million for the three-month period.

Haig S. Bagerdjian, the Company's Chairman, President and Chief Executive
Officer said: "The fiscal 2013 change in sales is the result of lower orders
from a major customer who brought "in house" some of the work previously
outsourced to Point.360. We have experienced similar activity for some
customers in the past, and we normally see these fluctuations reverse
themselves over time, as customers once again look for the efficiencies that
we provide."

Mr. Bagerdjian continued: "On a positive note, we are now approved to deliver
both feature and television content to Google's VOD platform following an
extensive technical qualification and testing period. Additionally, content
deliveries on behalf of our studio clients to Netflix, Amazon and Hulu are
growing. We look forward to improvement in fiscal 2014."

Revenues

Revenue for the quarter ended June 30, 2013 totaled $7.2 million compared to
$9.0 million in the same quarter last year. Revenues for the twelve months
ended June 30, 2013 were $30.9 million compared to $35.0 million last year.
Declines were due primarily to lower content distribution orders by a major
customer.

Gross Margin

In the fourth quarter of fiscal 2013, gross margin was $2.2 million (31% of
sales), compared to $3.6 million (40% of sales) in the prior year's fourth
quarter. For fiscal 2013, gross margin was $10.5 million or 34% of sales,
compared to $12.9 million, or 37% of sales in last year.

Selling, General and Administrative and Other Expenses

For the fourth quarter of fiscal 2013, SG&A expenses were $3.1 million, or 43%
of sales, compared to $2.9 million, or 32% of sales, in the fourth quarter of
last year. For the twelve months ended June 30, 2013, SG&A expenses were
$12.0 million (39% of sales) compared to $12.1 million (35% of sales) last
year.

Interest expense was $0.1 million and $0.4 million for the three and twelve
month periods ended June 30, 2013, and $0.2 million and $0.8 million in the
three and twelve month periods ended June 30, 2012. The decrease was due to
lower interest rates and amounts borrowed.

Other income in all periods includes sublease income. In the fiscal 2013
twelve month period, other income also included a $332,000 discount received
on the payoff of a mortgage, which was recorded as a gain on debt
extinguishment, offset by the write offs of $90,000 of deferred financing
costs related to that mortgage and a $30,000 fee to terminate a revolving
credit agreement, in addition to income of $131,000 associated with a change
in accounting estimate related to a customer rebate program.

Operating Income (Loss)

Operating loss was $0.9 million in the fourth quarter of fiscal 2013 compared
to income of $0.7 million in last year's fourth quarter. For the twelve month
period ended June 30, 2013, operating loss was $1.5 million compared to income
of $0.8 million in the prior year's twelve month period.

Net Income (Loss)

For the fourth quarter of fiscal 2013, the Company reported a net loss of $0.9
million ($0.08 per share) compared to net income of $0.6 million ($0.06 per
share) in the same period last year. For the twelve months ended June 30,
2013, the Company reported a net loss of $1.2 million ($0.12 per share)
compared to net income of $0.4 million ($0.04 per share) in the prior year
period.

Earnings Before Interest, Taxes, Depreciation, Amortization and Non-Cash
Charges (EBITDAN)*

The following table reconciles the Company's EBITDAN to net income (loss)
which is the most directly comparable financial measure under Generally
Accepted Accounting Principles ("GAAP"):

Computation of non-GAAP EBITDAN (unaudited)*

                    Three Months Ended            Twelve Months Ended

                    June 30,                      June 30,
                    2012            2013          2012          2013
Net income (loss)   $    615,000 $  (889,000) $           $ (1,234,000)
                                                  448,000
Interest (net)      197,000        78,000        814,000       394,000
Income taxes        --              23,000        --            23,000
Depreciation &      674,000         551,000       2,938,000     2,405,000
amortization
Other non-cash
charges:
 Bad debt      8,000           7,000         35,000        31,000
expense
 Stock based   43,000          64,000        294,000       222,000
compensation
                                                            

EBITDAN             $  1,537,000  $  (166,000) $  4,529,000 $  1,841,000

Consolidated Statements of Operations (unaudited) *

The table below summarizes results for the three and twelve month periods
ended June 30, 2012 and 2013:

                       Three Months Ended          Twelve Months Ended

                       June 30,                    June 30,
                                                              

                       2012          2013          2012          2013
Revenues              $       $        $         $   
                       8,951,000    7,236,000    34,960,000    30,937,000
Cost of services sold  5,368,000     (5,001,000)   (22,064,000)  (20,419,000)
Gross profit           3,583,000     2,235,000     12,896,000    10,518,000
Selling, general and   (2,864,000)   (3,099,000)   (12,074,000)  (11,982,000)
administrative expense
Research and           -             -             -             -
development expense
Impairment charge      -             -             -             -
Operating income       719,000       (864,000)     822,000       (1,464,000)
(loss)
Interest expense       (197,000)     (78,000)      (834,000)     (394,000)
Interest income        -             -             20,000        -
Other income           93,000        76,000        440,000       647,000
Income (loss) before   615,000       (866,000)     448,000       (1,211,000)
income taxes
Provision for income   -             (23,000)      -             (23,000)
taxes
Net income (loss)      $       $        $       $   
                        615,000     (889,000)    448,000       (1,234,000)
Income (loss) per
share:
 Basic:
 Net income     $       $       $       $      
(loss)                     0.06    (0.08)     0.04      (0.12)
 Weighted
average number of      10,513,166    10,513,166    10,513,166    10,513,166
shares
 Diluted:
 Net income     $       $       $       $      
(loss)                     0.06    (0.08)     0.04      (0.12)
 Weighted
average number of
shares including the   10,513,166    10,513,166    10,523,446    10,513,166
dilutive effect of
stock options

Selected Balance Sheet Statistics (unaudited)*

                                June 30,                June 30,

                                2012                    2013
Working Capital                 $       4,261,000 $      
                                                        3,420,000
Property and equipment, net     17,475,000              15,993,000
Total assets                    25,971,000              23,652,000
Current portion of long term    172,000                 490,000
debt
Long-term debt, net of current  9,236,000               8,267,000
portion
Shareholder's equity            10,231,000              9,219,000

*The consolidated statements of operations, computation of non-GAAP EBITDAN
and presentation of balance sheet statistics do not represent the results of
operations or the financial position of the Company in accordance with
generally accepted accounting principles (GAAP), and are not to be considered
as alternatives to the balance sheet, statement of income, operating income,
net income or any other GAAP measurements as an indicator of operating
performance or financial position. Not all companies calculate such
statistics in the same fashion and, therefore, the statistics may not be
comparable to other similarly titled measures of other companies. Management
believes that these computations provide additional useful analytical
information to investors.

About Point.360

Point.360 (PTSX) is a value add service organization specializing in content
creation, manipulation and distribution processes integrating complex
technologies to solve problems in the life cycle of Rich Media. With locations
in greater Los Angeles, Point.360 performs high and standard definition audio
and video post production, creates virtual effects and archives and
distributes physical and electronic Rich Media content worldwide, serving
studios, independent producers, corporations, non-profit organizations and
governmental and creative agencies. Point.360 provides the services necessary
to edit, master, reformat and archive clients' audio and video content,
including television programming, feature films and movie trailers.
Point.360's interconnected facilities provide service coverage to all major
U.S. media centers. The Company also rents and sells DVDs and video games
directly to consumers through its Movie>Q retail stores. See www.Point360.com
and www.MovieQ.com.

Forward-looking Statements

Certain statements in Point.360 press releases may contain "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. Forward-looking statements include, without limitation, statements
regarding (i) the Company's projected revenues, earnings, cash flow and
EBITDAN; (ii) planned focus on internal growth and acquisitions; (iii)
reduction of facilities and actions to streamline operations; (iv) actions
being taken to reduce costs and improve customer service and (v) new business
and new acquisitions. Please also refer to the risk factors described in the
Company's SEC filings, including its annual reports on Form 10-K. Such
statements are inherently subject to known and unknown risks, uncertainties
and other factors that may cause actual results, performance or achievements
of the Company to be materially different from those expected or anticipated
in the forward-looking statements. In addition to the factors described in
the Company's SEC filings, the following factors, among others, could cause
actual results to differ materially from those expressed herein: (a) lower
than expected net sales, operating income and earnings; (b) less than expected
growth; (c) actions of competitors including business combinations,
technological breakthroughs, new product offerings and promotional successes;
(d) the risk that anticipated new business may not occur or be delayed; (e)
the risk of inefficiencies that could arise due to top level management
changes and (f) general economic and political conditions that adversely
impact the Company's customers' willingness or ability to purchase or pay for
services from the Company. The Company has no responsibility to update
forward-looking statements contained herein to reflect events or circumstances
occurring after the date of this release.

SOURCE Point.360

Website: http://www.point360.com
Contact: Alan Steel, Executive Vice President, (818) 565-1444
 
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