Point.360 Announces Third Fiscal Quarter And Nine Month Results

       Point.360 Announces Third Fiscal Quarter And Nine Month Results

PR Newswire

LOS ANGELES, May 7, 2014

LOS ANGELES, May 7, 2014 /PRNewswire/ --Point.360 (NASDAQ: PTSX), a leading
provider of integrated media management services, today announced results for
the three and nine month periods ended March 31, 2014, including sales of
$19.2 million for the nine months, resulting in negative operating cash flow
of about $0.5 million.

Haig S. Bagerdjian, the Company's Chairman, President and Chief Executive
Officer said: "As I have stated previously, our fiscal 2014 results have been
affected by changes in customer ordering patterns and our exit from the
computer graphics market. We have also seen a continuing evolution in our
industry towards digital post production and distribution of content as well
as increasing demand for localization of content for growing foreign
consumption. We have witnessed these shifts in our customers and competitors
to varying degrees, which may provide consolidation opportunities for


Revenue for the quarter ended March 31, 2014 totaled $6.1 million compared to
$8.3 million in the same quarter last year. Revenues for the nine months
ended March 31, 2014 were $19.2 million compared to $23.7 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 third quarter of fiscal 2014, gross margin was $1.8 million (30% of
revenues), compared to $3.1 million (37% of revenues) in the prior year's
quarter. For the first nine months of fiscal 2014, gross margins were $6.1
million (32% of revenues), compared to $8.3 million, (35% of revenues) in last
year's period.

Selling, General and Administrative and Other Expenses

For the third quarter of fiscal 2014, SG&A expenses were $2.8 million, or 45%
of sales, compared to $3.0 million, or 37% of sales, in the third quarter of
last year. For the current nine month period, SG&A expenses were $8.6 million
(45% of sales), compared to $8.9 million (38% of sales) last year.

Interest expense was $0.1 million and $0.2 million in the three and nine month
periods ended March 31, 2014, and $0.1 million and $0.3 million in last year's
three and nine month periods.

Other income in all periods includes sublease income and gain on sale of fixed
assets. In the fiscal 2014 three and nine month periods, other income
includes $0.3 million from the settlement of a lawsuit. In the fiscal 2013
nine 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 Income (Loss)

The operating loss was $0.9 million in the third quarter of fiscal 2014
compared to an $11,000 profit in last year's third quarter. For the nine
months ended March 31, 2014, the operating loss was $2.6 million compared to a
loss of $0.6 million last year.

Net Income (Loss)

For the third quarter and first nine months of fiscal 2014, the Company
reported net losses of $0.7 million ($0.06 per share) and $2.3 million ($0.22
per share), respectively, compared to income of $0.2 million ($0.01 per share)
and a $0.3 million loss ($0.03 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         Nine Months Ended

                       March 31                   March 31,
                       2013         2014          2013          2014
Net income (loss)      $       $          $          $  
                       150,000     (662,000)    (345,000)    (2,292,000)
Interest (net)         68,000       70,000        316,000       215,000
Income taxes           --           --            --            --
Depreciation &         616,000      437,000       1,854,000     1,430,000
Other non-cash
Bad debt               8,000        6,000         24,000        (106,000)
Stock based            56,000       66,000        158,000       206,000
EBITDAN                $       $         $          $   
                       898,000     (83,000)     2,007,000    (547,000)

Consolidated Statements of Operations (unaudited) *

The table below summarizes results for the three and nine month periods ended
March 31, 2013 and 2014:
                      Three Months Ended           Nine Months Ended

                      March 31,                    March 31,
                      2013           2014          2013          2014
Revenues             $          $         $          $    
                      8,295,000     6,134,000    23,701,000   19,193,000
Cost of services sold (5,244,000)    (4,296,000)   (15,418,000)  (13,130,000)
Gross profit          3,051,000      1,838,000     8,283,000     6,063,000
Selling, general and
administrative        (3,040,000)    (2,767,000)   (8,883,000)   (8,632,000)
Operating Income      11,000         (929,000)     (600,000)     (2,569,000)
Interest expense      (68,000)       (70,000)      (316,000)     (215,000)
Other income          207,000        337,000       571,000       492,000
Income (loss) before  150,000        (662,000)     (345,000)     (2,292,000)
income taxes
Provision for income  -              -             -             -
Net income (loss)     $         $         $        $   
                      150,000       (662,000)    (345,000)     (2,292,000)
Income (loss) per
 Net income    $        $       $       $      
(loss)                   0.01      (0.06)       (0.03)      (0.22)
average number of     10,513,166     10,536,906    10,513,166    10,531,536
 Net income    $        $       $       $      
(loss)                   0.01      (0.06)       (0.03)      (0.22)
average number of

          10,513,166     10,536,906    10,513,166    10,531,536
including the
dilutive effect of


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

                                2013                    2014
Working Capital                 $       3,420,000 $     (6,136,000)
Property and equipment, net     15,993,000              14,950,000
Total assets                    23,652,000              20,760,000
Current portion of long term    490,000                 8,488,000
Long-term debt, net of current  8,267,000               --
Shareholder's equity            9,219,000               7,154,000

*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

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
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