TSE SYMBOL: RNK
MAY 28, 1998
Rainmaker Announces First Quarter Earnings
VANCOUVER, BRITISH COLUMBIA--Mr. Bob Cabral, CEO of Rainmaker Digital Pictures Corp. ("Rainmaker" or the "Company") announces the Company's financial results for the first quarter of the 1998 fiscal year.
The Company's consolidated revenue for the first quarter of 1998 was $5.6 million, as compared to $6.0 million for the same period last year. Earnings before interest, taxes, depreciation, and amortization ("EBITDA") for the first quarter of 1998 were $1.4 million, as compared to $2.3 million for the same period last year. The Company's net earnings for the first three months of 1998 were $17 thousand ($0.00 per share), as compared to $872 thousand ($0.07 per share) for the same period last year.
/T/
Consolidated Results of Operations
Three months ended March 31
1998 1997
Revenue $5,611,438 $6,019,626
Expenses
Depreciation and Amortization $1,170,430 $800,291
General and Administrative $462,450 $480,269
Interest $251,810 $174,973
Operating $3,715,376 $3,214,852
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Earnings Before Income Tax $11,372 $1,349,241
Tax (expense)/recovery 6,109 (476,486)
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Earnings After Tax $17,481 $872,755
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Earnings Per Share
Basic - $0.09
Fully Diluted - $0.07
/T/
Review of Operations
As expected, the decrease in production activities that occurred during the last two months of 1997 continued through the first two months of 1998, resulting in a decrease in film and television work for both the Vancouver and Burbank facilities. The facilities had been staffed and equipped to accommodate the anticipated growth in post production in both markets which is only now materializing. Revenue from the Company's Digital Visual Effects ("Effects") segment was $2.0 million for the three months ended March 31, a decrease of $200 thousand from revenue of $2.2 million for the same period last year. Further, the Burbank effects facility experienced an increase in operating costs over last year, a result of the construction of its new facility, and an increase in overhead costs related to incremental growth in infrastructure and operating capacity. Currently, the Burbank facility is working on Warner Brother's 'Soldier', Disney's 'My
Favorite Martian', and is scheduled to begin work shortly on Warner Brother's 'Frost', Fox's 'Mumford', and Paramount's 'A Simple Plan'. During the quarter, the Vancouver effects facility worked on a number of significant projects, including 120 effects shots for the ABC movie-of-the-week 'FutureSport'.
The Digital Post & Transfer segment ('Post') generated revenue of $2.5 million for the first quarter, which is flat compared to the same period last year. The Film Lab ('Lab') segment revenue increased 18 percent to $867 thousand as compared to the first three months of 1997. The Post and Lab segments continued working on numerous episodic television series during the quarter, including 'Millennium', 'Poltergeist', 'Outer Limits', 'Stargate', and 'Police Academy'.
The New Media segment contributed $200 thousand in revenue during the first three months of 1998 from compressing, encoding, and authoring a number of DVD titles for Fox Lorber, Jet Aviation, and DIVX.
The Fox television series 'Millennium' has just been confirmed for a third season of production and post production in Vancouver. Further, the Fox pilot 'Strange Days', which was recently post produced at Rainmaker, has now been confirmed for 13 episodes to be produced in Vancouver with initial post production at Rainmaker.
A summary of the Company's balance sheet at the end of the first quarter as compared to 1997 include: an increase in working capital of 43 percent to $8.6 million, cash of $8.0 million, total assets increased 31 percent to $35.9 million, capital assets increased 44 percent to $20.0 million, and net book value per share increased 13 percent to $1.83.
Pursuant to the Company's normal course issuer bid, a total of 230,000 common shares have been repurchased as at May 25, 1998. The repurchased shares will be cancelled and returned to treasury. The Company will continue to repurchase its shares through the normal course issuer bid until management believes the stock is either fairly valued or the maximum number of shares allowable (500,000 common shares) is repurchased.
Rainmaker Digital Pictures Corp. operates digital post production facilities in Vancouver, BC and Burbank, California, providing a range of image processing services to producers of feature films, television and new media. Based in Vancouver BC, the Company operates through its segments' Digital Post & Transfer, Film Lab, Digital Visual Effects (computer animation and digital visual effects), and New Media (digital compression). The Company's Burbank facility specializes in digital visual effects for the Hollywood feature film market.
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FOR FURTHER INFORMATION PLEASE CONTACT:
Rainmaker Digital Pictures Corp.
Malcolm Earle
Investor Relations and Corporate Communications
(604) 872-6596 or 1-800-616-4433 (Toll Free)
E-mail: malcolm@rainmaker.com
rainmaker.com
The contents of this press release have neither been approved nor
disapproved by any regulatory authority.
INDUSTRY: RES
SUBJECT: ERN
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