Point.360 Announces Second Fiscal Quarter And First Half Results

       Point.360 Announces Second Fiscal Quarter And First Half Results

PR Newswire

LOS ANGELES, Feb. 6, 2014

LOS ANGELES, Feb. 6, 2014 /PRNewswire/ --Point.360 (NASDAQ: PTSX), a leading
provider of integrated media management services, today announced results for
the three and six month periods ended December 31, 2013, including sales of
$13.1 million for the six months, resulting in breakeven operating cash flow.

Haig S. Bagerdjian, the Company's Chairman, President and Chief Executive
Officer said: "In fiscal 2014, our results have been affected by lower orders
from a major customer as well as our exit from the inconsistent computer
graphics market. However, we are encouraged by increases in ordering activity
by another of our major clients and the adaptation of content for foreign
markets, often called localization. We believe diversification of customers
and localization will be growth opportunities for us in the future."


Revenue for the quarter ended December 31, 2013 totaled $6.3 million compared
to $7.7 million in the same quarter last year. Revenues for the six months
ended December 31, 2013 were $13.1 million compared to $15.4 million last
year. Declines were due primarily to lower orders by a major customer and our
decision in the second quarter to terminate our inconsistent computer graphics

Gross Margin

In the second quarter of fiscal 2014, gross margin was $2.2 million (35% of
sales), compared to $2.5 million (33% of revenues) in the prior year's
quarter. For the first half of fiscal 2014, gross margins were $4.2 million
or (32% of revenues), compared to $5.2 million, or 34% of revenues in last
year's period.

Selling, General and Administrative and Other Expenses

For the second quarter of fiscal 2014, SG&A expenses were $2.8 million, or 45%
of sales, compared to $2.9 million, or 38% of sales in the second quarter of
last year. For the current six month period, SG&A expenses were $5.9 million
(45% of sales), compared to $5.8 million (38% of sales) last year.

Interest expense was $0.1 million for both the three and six month periods
ended December 31, 2013, and $0.1 million and $0.2 million in last year's
three and six month periods.

Other income in all periods includes sublease income and gain on sale of fixed
assets. In the fiscal 2013 six month period, 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

The operating loss was $0.6 million in the second quarter of fiscal 2014
compared to a $0.4 million profit in last year's second quarter. For the six
months ended December 31, 2013, the operating loss was $1.6 million compared
to $0.6 million last year.

Net Loss

For the second quarter and first half of fiscal 2014, the Company reported net
losses of $0.6 million ($0.06 per share) and $1.6 million ($0.15 per share),
respectively, compared to $0.4 million ($0.04 per share) and $0.5 million
($0.05 per share) in the same periods 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             Six Months Ended

                   December 31                    December 31,
                   2012            2013           2012          2013
Net loss           $           $ (623,000)    $          $  
                   (390,000)                     (495,000)    (1,630,000)
Interest (net)     80,000          71,000         248,000       145,000
Income taxes       --              --             --            --
Depreciation &     625,000         492,000        1,238,000     801,000
Other non-cash
Bad debt expense   9,000           (119,000)      16,000        (112,000)
Stock based        60,000          77,000         102,000       140,000

EBITDAN            $          $           $          $  
                   384,000        (102,000)     1,109,000    (656,000)

 Consolidated Statements of Operations (unaudited) *

 The table below summarizes results for the three month periods
ended December 31, 2012 and 2013:
                       Three Months Ended          Six Months Ended

                       December 31,                December 31,
                                     2013          2012          2013
Revenues              $           $         $            $   
                       7,745,000    6,286,000     15,406,000   13,058,000
Cost of services sold  (5,221,000)   (4,095,000)   (10,174,000)  (8,834,000)
Gross profit           2,524,000     2,191,000     5,232,000     4,224,000
Selling, general and   (2,910,000)   (2,819,000)   (5,843,000)   (5,864,000)
administrative expense
Operating loss         (386,000)     (628,000)     (611,000)     (1,640,000)
Interest expense       (80,000)      (71,000)      (248,000)     (145,000)
Other income           76,000        76,000        364,000       155,000
Loss before income     (390,000)     (623,000)     (495,000)     (1,630,000)
Benefit from income    -             -             -             -
Net loss               $        $         $        $   
                       (390,000)     (623,000)     (495,000)     (1,630,000)
Loss per share:
 Net loss       $       $       $       $      
                         (0.04)     (0.06)       (0.05)      (0.15)
average number of      10,513,166    10,536,906    10,513,166    10,528,909
 Net loss       $       $       $       $      
                         (0.04)     (0.06)       (0.05)      (0.15)
average number of
sharesincluding the   10,513,166    10,536,906    10,513,166    10,528,909
dilutive effect of
stock options

 Selected Balance Sheet Statistics (unaudited)*
                                June 30,                December 31,

                                2013                    2013
Working Capital                 $       3,420,000 $     (5,938,000)
Property and equipment, net     15,993,000              15,318,000
Total assets                    23,652,000              21,626,000
Current portion of long term    490,000                 8,620,000
Long-term debt, net of current  8,247,000               -
Shareholder's equity            9,219,000               7,749,000

*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 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
Press spacebar to pause and continue. Press esc to stop.