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Point.360 Announces First Fiscal Quarter Results



               Point.360 Announces First Fiscal Quarter Results

PR Newswire

LOS ANGELES, Nov. 13, 2013

LOS ANGELES, Nov. 13, 2013 /PRNewswire/ -- Point.360 (NASDAQ: PTSX), a leading
provider of integrated media management services, today announced results for
the three month period ended September 30, 2013.  For the quarter, the
Company's sales were $6.8 million generating positive operating cash flow of
$0.6 million and negative earnings before interest, taxes, depreciation and
amortization and non-cash charges (EBITDAN) of $0.4 million for the period.

Haig S. Bagerdjian, the Company's Chairman, President and Chief Executive
Officer said: "We continued to generate positive operating cash flow in the
first quarter of fiscal 2014.  While revenues were negatively affected by
lower orders from one major customer, activity from others has increased. We
are seeing more opportunities for localization and deliveries of content
outside the United States on behalf of our customers. We will continue to
address this growing segment of the business."

Mr. Bagerdjian continued: "We are also very pleased that J. R. DeLang has
joined our Board of Directors. As mentioned in yesterday's news release, he
has over 20 years of experience in our industry and served as Twentieth
Century Fox's Executive Vice President of Studio and Post Production
Operations and Chief Operations Officer of Todd-AO. We look forward to his
contributions to Point.360."

Revenues

Revenue for the quarter ended September 30, 2013 totaled $6.8 million compared
to $7.7 million in the same quarter last year.  Declines were due primarily to
lower orders by a major customer.

Gross Margin

In the first quarter of fiscal 2014, gross margin was $2.0 million (30% of
sales), compared to $2.7 million (35% of sales) in the prior year's first
quarter.

Selling, General and Administrative and Other Expenses

For the first quarter of fiscal 2014, SG&A expenses were $3.0 million, or 45%
of sales, compared to $2.9 million, or 38% of sales, in the first quarter of
last year.  SG&A costs have increased $0.1 million in the current three month
period, when compared to the prior year period. 

Interest expense was $0.2 million and $0.1 million for the three month periods
ended September 30, 2012, and 2013, respectively.

Other income in all periods includes sublease income and gain on sale of fixed
assets.  In the prior year quarter, other income also included a $332,000
discount received on the payoff of a mortgage, 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.

Operating Loss

Operating loss was $1.0 million in the first quarter of fiscal 2013 compared
to a $0.2 million loss in last year's first quarter.

Net (loss)

For the first quarter of fiscal 2014, the Company reported a net loss of $1.0
million ($0.10 per share) compared to a loss of $0.1 million ($0.01 per share)
in the same period last year.

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

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

Computation of EBITDAN (unaudited)*

                                                  Three Months Ended
                                                  September 30,
                                                  2012        2013
Net income (loss)                                 $ (105,000) $(1,007,000)
     Interest (net)                               168,000     74,000
     Income taxes                                 -           -
     Depreciation & amortization                  613,000     501,000
     Other non-cash charges:
          Bad debt expense                        7,000       6,000
          Writeoff of deferred financing credits  90,000      -
          Stock based compensation                42,000      63,000
EBITDAN                                           $   815,000 $    (363,000)

Consolidated Statements of Operations (unaudited) *

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

                                  Three Months Ended

                                  September 30,
                                                          

                                  2012                   2013
Revenues                          $            7,661,000 $          
                                                          6,772,000
Cost of services sold             (4,953,000)            (4,738,000)
Gross profit                      2,708,000              2,034,000
Selling, general and              (2,933,000)            (3,046,000)
administrative expense
Operating loss                    (225,000)              (1,012,000)
Interest expense                  (168,000)              (74,000)
Other income                      288,000                79,000
Loss before income taxes          (105,000)              (1,007,000)
Provision for income taxes        -                      -
Net loss                          $            (105,000) $         (1,007,000)
Loss per share:
   Basic:
        Net loss                  $                      $                
                                   (0.01)                 (0.10)
       Weighted average number of 10,513,166             10,520,913
shares
   Diluted:
        Net loss                  $                      $                  
                                  (0.01)                 (0.10)
       Weighted average number of
shares                                                    

             including the        10,513,166             10,520,913
dilutive effect of stock options

Selected Balance Sheet Statistics (unaudited)*

                                June 30,               September 30,

                                2013                   2013
Working Capital                 $                      $       (5,561,000)^(1)
                                3,420,000
Property and equipment, net     15,993,000             15,680,000
Total assets                    23,652,000             22,886,000
Current portion of long term    490,000                528,000
debt
Long-term debt, net of current  8,267,000              8,223,000
portion
Shareholder's equity            9,219,000              8,292,000

^(1)Reflects the classification of $8.2 million of long-term debt as a current
liability due to the existence of a financial covenant default condition under
the Company's credit agreements for which a forbearance has been provided by
the bank.

*The consolidated statements of operations, computation of 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
EBITDA; (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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