Platinum Entertainment, Inc. Reports Record Third Quarter Revenues
Business Wire - November 16, 1998 13:44
DOWNERS GROVE, Ill.--(BUSINESS WIRE)--Nov. 16, 1998--
Internet Web Site Unveiled; Promotional Partnership with MP3.com Announced; Equity in The Music Connection Acquired
Highlights:
- Platinum's Internet site, PlatinumCD.com, was developed during the quarter and successfully launched on October 1, 1998.
Website traffic increased by 500,000 visitors in the first seven days following announcement of an ongoing promotional partnership
with MP3.com.
- EPS improved 25% without recording the earnings benefit of $900,000 that was paid by Internet partner The Music Connection
with stock.
SUMMARY OF CONSOLIDATED OPERATIONS
(Unaudited)
(In millions, except per share amounts)
3Q 1998 3Q 1997 9 months 1998 9 months 1997
----------------------------------------------------------------------
Gross Revenues $16.2 $14.4 $44.2 $43.3
----------------------------------------------------------------------
EBITDA ($1.5) ($2.6) ($1.4) ($4.2)
----------------------------------------------------------------------
EPS ($0.67) ($0.89) ($1.30) ($2.42)
----------------------------------------------------------------------
Platinum Entertainment, Inc. [NASDAQ: PTET] today reported basic and diluted loss per common shares of $0.67 compared to
basic and diluted loss per common shares of $0.89 in 1997. The net loss for the quarter before preferred dividends was $3.3 million
compared to a net loss of $4.7 million for the third quarter of 1997.
The Company also reported revenues for the third quarter of $16.2 million versus $14.4 million in 1997. Revenues for the first nine
months of 1998 were $44.2 million compared to $43.3 million in 1997. In 1998, the Company significantly reduced its direct to
consumer sales efforts from which $3 million in gross revenues were generated during the first nine months of 1997. Excluding these
direct to consumer sales efforts, gross revenues for the nine months ended September 30, 1998 increased 10% over 1997.
Steve Devick, chairman and CEO of Platinum Entertainment, stated, "The complete development of our music website this quarter
was a huge accomplishment as we prepare for the ever expanding role that online marketing will have on future music sales through
all retail channels."
The Company recently announced the opening of its new website, PlatinumCD.com, and its equity investment and revenue sharing
arrangement with Reston, VA-based The Music Connection Corporation, creators of musicmaker.com, the Web's first and largest
music compilation site. The deal exclusively combined Platinum Entertainment's catalog of more than 13,000 pop, gospel, blues,
urban, classical and jazz recordings with 160,000 songs currently available at musicmaker.com, creating the largest custom CD and
music download resource on the Internet. Mr. Devick noted, "Our unique niche music content and association with musicmaker.com
will help drive the move to digital distribution."
In related activities, Platinum and MP3.com, the leading music download site on the Internet having facilitated more than 5 million
legal, original song downloads in the last year, announced the release of promotional MP3 downloads available to music fans who
visit MP3.com or PlatinumCD.com. The ongoing MP3 promotions will include downloads from Platinum's catalog, subsidiary labels
and distributed labels. "While other record labels may still regard MP3 as a controversial format that encourages piracy, we feel
confident that most people don't want to buy stolen cars and that this is a powerful promotional tool that will help drive a large and
active audience to both traditional and online record stores to purchase our music," said Mr. Devick.
Platinum Entertainment, Inc. produces, licenses, acquires, markets and distributes high quality recorded music for a variety of music
formats. Platinum and its wholly owned subsidiaries currently produce music for the Gospel, Country, Blues, Adult Contemporary,
Urban/Dance and Classical/Themed formats, primarily under its CGI Records, House of Blues Music Co., River North Records and
Intersound labels. Platinum's products include new releases, typically by artists established in a particular format, as well as
compilations that enable Platinum to exploit its catalog of master recordings.
This press release contains certain forward-looking statements (within the meaning of the Private Securities Litigation Reform Act
of 1995) that involve substantial risks and uncertainties. A number of important factors could cause the Company's actual results,
performance or achievements for fiscal 1998 and beyond to differ materially from those expressed in such forward-looking
statements. These factors include, without limitation, commercial success of the Company's repertoire, its leveraged capital
structures, charges and costs related to acquisitions, permanent acquisition financing needs, relationships with artists and producers,
attraction and retention of key personnel, general economic and business conditions and enhanced competition and new competitors
in the recorded music industry and other factors described in the Company's filings with the Securities and Exchange Commission.
PLATINUM ENTERTAINMENT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
Nine Months
Quarter Ended September 30 Ended September 30
----------------------------------------------------
1998 1997 1998 1997
Total Gross
Revenues $16,224 $14,395 $44,156 $43,342
Total Net
Revenues 10,772 9,813 33,226 28,828
Gross Profit 4,469 4,628 13,002 13,982
Selling, general
and administrative
expenses 5,944 4,470 14,384 13,219
----------------------------------------------------------------------
EBITDA ($1,474) ($2,560) ($1,382) ($4,214)
Depreciation and
amortization (495) (482) (1,400) (1,409)
Interest expense,
net (726) (1,235) (1,948) (2,945)
Other financing
costs (564) (400) (360) (4,033)
Equity gain (loss) (63) 15 (91) 64
Net loss ($3,322) ($4,662) ($5,181) ($12,537)
Less: Preferred
dividends (716) 0 (2,086) 0
Loss applicable to
common shares ($4,038) ($4,662) ($7,267) ($12,537)
Basic and diluted
loss per common
share ($0.67) ($0.89) ($1.30) ($2.42)
Weighted average
number of common
shares
outstanding 6,028,759 5,209,049 5,571,073 5,184,113
----------------------------------------------------------------------
Other operating data:
EBITDA per common
share ($0.24) ($0.49) ($0.25) ($0.81)
CONTACT: Platinum Entertainment, Inc.
Doug Laux, 630/769-0033
%PLATINUM-ENTERTAINMENT PTET %ILLINOIS %ENTERTAINMENT %EARNINGS V%BW P%BW
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