TO ALL
This finally explains why the stock has off....short term(I hope)
VANCOUVER, Aug. 27 /CNW-PRN/ - MAINFRAME ENTERTAINMENT, INC.
Stock Symbol: MFE
Mainframe Entertainment, Inc. today announced its quarterly results for
the three months ended June 30, 1997. Revenue for the three months ended June
30, 1997 totaled $ 1.1 million compared to $3 million for the same period last
year. The net loss of $2.5 million or $0.31 per share compares to a net loss
of $0.38 million or $0.03 per share for the same period the previous year.
These results are represented in tabular form below:
(Millions) 3 months 3 months
Except share data June 30, 1997 June 30, 1996
Revenue $ 1.1 $ 3.0
Net Earnings (Loss) (2.5) (0.38)
Earnings (Loss) per share $ (0.31) $ (0.03)
The following Message to Shareholders will appear in Mainframe's first
quarterly report, to be sent to shareholders on August 30, 1997.
``It is with great pleasure that we present this first quarterly report
for Mainframe Entertainment, Inc. as a public company. On June 17, 1997, the
Company issued 3,000,000 common shares at $9.75 per common share and qualified
the common shares and subordinated convertible debentures issued on the
automatic exercise of the Company's previously issued special warrants. The
Company has raised over $55 million before expenses of the offering in the
past year.
During the quarter ended June 30, 1997, the Company delivered the first
two episodes of the 16 episodes for the current season of ReBoot(TM) to the
initial licensees and, at quarter-end, had another five episodes nearing
completion. In addition, during the quarter the Company finalized its
contracts for 13 new episodes of Beasties(TM) (Beast Wars(TM) outside Canada)
and began pre-production for these episodes. Since June 30, 1997, the Company
has delivered 7 episodes and currently has 10 episodes in production. Total
contracted programming for the current fiscal year is 29 episodes, up from
last year's 26 episodes.
The Company's policy is to record revenue when the licensing period
begins and the programming is available for showing. Mainframe's revenue for
the quarter was approximately $1.1 million, being contracted revenue for the
two completed ReBoot episodes. As further territories are contracted, the
Company will record the related revenue in future periods. In the first
quarter of the prior fiscal year, Mainframe delivered five episodes of
Beasties (Beast Wars outside Canada), and recorded revenues from their
worldwide distribution in addition to ongoing ReBoot distribution revenues,
resulting in revenues for that quarter of $3.0 million.
Production costs for the quarter totalled $1.1 million, compared to $2.5
million in the comparable quarter of the 1997 fiscal year. These costs
included both the costs of programming delivered to broadcasters, amortized
using the ratio of current revenue to estimated total revenues, and higher
operating costs associated with the Company's expanded production facilities
and further development of Mainframe's proprietary software.
Selling, general and administrative expenses for the quarter were
approximately $1.1 million, compared to $0.4 million a year earlier. The
Company completed its corporate reorganization effective June 30, 1996. Since
that time, Mainframe has built the corporate organization necessary to meet
its current operating requirements and expected future activities.
These factors resulted in a loss for the quarter of $2.5 million ($0.31
per share), compared to a loss for the comparable quarter of the prior year of
$0.4 million ($0.03 per share). Cash used in operations, after depreciation
and amortization, was $1.0 million ($0.12 per share).
During the quarter, Mainframe invested a further $4.2 million in capital
assets, primarily computer production equipment and software, of which $3.7
million was financed by a capital lease with a major Canadian chartered bank.
The Company also invested a further $0.2 million in the development of future
television series and feature films. As is customary in the industry, the
Company's development costs will be included in its production costs at the
time of production.
The Company is on target for the delivery of the remaining 14 episodes of
the new season of ReBoot and has begun production on the 13 new episodes of
Beasties (Beast Wars outside Canada), all of which are scheduled for delivery
in the current fiscal year. Initial audience reception to the new ReBoot
episodes, with their advanced animation techniques, has been most encouraging.
The first of the Company's two ReBoot-based films for exhibition on the
IMAX(R) Ridefilm(TM) platform will be delivered in the current quarter, and
Mainframe expects Electronic Arts to launch the interactive game ``Countdown
To Chaos'', with its original ReBoot animation, in early 1998. In addition,
the Company is reviewing other intellectual properties for television and
feature film production with potential strategic partners.
Mainframe appreciates the support we have received from our audiences,
shareholders, employees and suppliers as we enter an exciting era in our
corporate history. Mainframe remains committed to creating quality digital
entertainment for kids of all ages around the world.''
Mainframe Entertainment, Inc. is a world leader in 3D computer animation,
producing state-of-the-art animation for television, interactive media and
motion rides from its digital studio in Vancouver, B.C., Canada.
SOURCE: Mainframe Entertainment Inc.
CONTACT: Brett Gannon (604) 681-359
JimBo |
