Friday May 15, 7:31 am Eastern Time
Company Press Release
Platinum Entertainment, Inc. Reports Significant Improvement in First
Quarter Operating Results
DOWNERS GROVE, Ill.--(BUSINESS WIRE)--May 15, 1998--Platinum Entertainment, Inc. (NASDAQ: PTET - news)
today reported earnings before interest, tax, depreciation and amortization (EBITDA) of $763,000 versus a loss of $526,000
in 1997. The company also reported record revenues for the first quarter ended March 31, 1998, of $14 million versus $13.4
million in 1997.
The net loss for the quarter before preferred dividends was $182,000. After preferred dividends of $675,000 the company
had a loss of $857,000 or $0.16 per share as compared to a net loss of $3.3 million or $0.64 per share in first quarter 1997,
which include one-time charges of $2.7 million, or $0.51 per share.
''We are very pleased that our sales and operating income set new records,'' said Steve Devick, chairman and CEO of
Platinum Entertainment, ''and that earnings per share were 33% higher than analysts' expectations. The outlook for the second
quarter appears quite bright as we have a significant number of new releases scheduled, including albums by The Beach Boys,
Kansas, Juice Newton, the Band, Ronna and Dionne Warwick with current urban stars.''
Platinum signed a distribution agreement in April with Ichiban Records. Intersound Distribution, a wholly owned subsidiary of
Platinum, will distribute Ichiban releases through all normal retail channels in North America. The agreement covers Ichiban's
entire label group, and adds hundreds of classic and contemporary R&B, blues, rap, jazz and soul recordings to Platinum's
extensive music catalog. ''We look forward to many years of success, not only with the label's developing artists, but also with
Ichiban's prestigious catalog titles, which combined with Intersound's existing roster and catalog, will create a powerful force in
the distribution industry,'' said Mr. Devick.
With the announcement earlier this year of a partnership agreement with PLATINUM technology to develop and operate an
innovative Web-based entertainment emporium, the company created a unique niche and defined itself in the fast-moving world
of e-commerce. Platinum is the first record company to offer its entire music library of over 12,000 titles on a website where
consumers can digitally download songs onto the hard drive of their personal computers, enabling them (with an inexpensive
compact disc recorder) to create customized CDs at home. ''On an incremental basis, this delivery system will generate
significantly higher profit margins for Platinum per dollar of revenue than those of traditional distribution channels,'' said Mr.
Devick.
''The powerful collaboration between Platinum Entertainment and PLATINUM technology will provide consumers with the
music they want, when and where they want it,'' said Mr. Devick. ''This new distribution outlet should allow us to create
incremental demand for our existing library, as we will be reaching a large, previously untapped audience for our product.'' The
new, digitally encrypted service is expected to be fully operational in the third quarter of this year.
Platinum also recently announced the creation of a new label, Concert @ Home, reserved exclusively for music titles released
in the exciting new DVD format. DVD, which stands for ''digital versatile disc,'' represents the latest evolution in the playback
of recorded music at home, and offers more than seven times the storage capacity of a CD, as well as many options for audio
and video interactivity. ''DVD is the best medium yet for presenting music on television,'' said Mr. Devick, ''and Platinum is
well positioned to be a leading supplier of music programming on DVD. Our Concert @ Home label will present the best in
contemporary music events, as well as classic performances from many of the world's most popular entertainers.''
Concert events starring Roger Daltrey, George Clinton and Luther Allison, plus previously unavailable episodes of the
groundbreaking PBS series ''Soundstage,'' and four breathtakingly photographed ''African Classical Discovery'' compilations
accompanied by the music of George Winston, Vivaldi and other classic composers, are among the first DVD titles to be
released on Concert @ Home.
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, Classical/Themed, Adult
Contemporary, Country, Blues and Urban/Dance formats, primarily under its CGI Records, Intersound Classical, River North
Records, Intersound Country, House of Blues and Intersound Urban labels. Platinum's products include new releases, typically
by artists established in a particular format, as well as compilation and repackagings of previously recorded music that enable
Platinum to exploit its catalog of master recordings. |
