The Board of Directors of FRV Media ("FRV" or the "Company") (TSX VENTURE:FRV)
has approved the Company's audited financial statements for the first quarter
ended June 30, 2007.
For the quarter ended June 30, 2007, FRV Media recorded a net loss of $635,479,
compared to a loss of $864,092 in the same year-ago quarter, an improvement of
$228,613 owed largely to lower operating expenses achieved following the
Company's restructuring on March 31.
The quarter's results do not reflect the production value since the beginning of
the year given that few productions were recognized in the first quarter due to
the fact that license periods tend to begin at the same time as the television
programming season. A number of major projects are underway and scheduled for
delivery later in the year, namely: Il faut prendre le taureau par les contes
(Alliance), Bob Gratton (TQS), La riviere aux castors (Alliance), Telesur (TV5),
Les Eveques (SRC/RDI), 60 tonnes d'epinettes (Canal D) and a TV magazine titled
Martin sur la route (SRC /Food Network).
"Our first quarter performance is in line with expectation both in terms of
revenues and operating costs, which decreased 27% from last year. We are also
actively working on the Imavision transaction, which we are confident will close
as announced in our June 20 press release," explained FRV Media chief executive
Richard Laferriere.
ANALYSIS OF RESULTS
KEY FIGURES, FIRST QUARTER 2008 (in thousands of dollars, except amounts
per share)
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June 30, 2007 June 30, 2006
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Gross production value 2,761.3 1,465.8
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Revenues 1,747.9 1,100.8
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Gross profit 231.1 238.0
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Operating expense 746.9 1,023.8
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Net gain (loss) (635.5) (864.1)
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Gain (loss) per share ($) (0.02) (0.02)
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Revenues
For the first quarter of fiscal 2008, ended June 30, 2007, FRV Media recorded
revenues of $1,747,845, delivering productions with a gross value of $2,761,259,
compared with revenues of $1,100,786 in the same year-ago period and gross
production value of $1,465,014, including government assistance of $365,000.
Few projects were delivered in the first quarter since the license periods tend
to begin at the same time as the programming season. Deliveries in the first
quarter consisted of: episodes of the animated series Dragon III, a documentary
titled Bachelet, Documentaire geologique, and capsules of the Mercuriades
(FCCQ). The product mix was different in the first quarter of 2006 when it was
consisted of several small productions.
Gross profit
Gross profit in the first quarter was $231,076, or 13.2% of sales, a result
below expectations attributable to the delivery of a production with a very low
margin. Gross profit for the comparable year-ago period was $238,014 or 21.6% of
sales.
Operating expenses
Consolidated operating expenses comprise those of FRV Media and its
subsidiaries. First quarter expenses fell 27.4% or $276,954, from $1,023,827 in
the same period last year to $746,873. This decrease stems from the Company's
restructuring and the fact that some activities were discontinued in the last
quarter of fiscal 2007.
Interest, depreciation and amortization
Financial expenses net of investment income were $98,417, against $54,043 in the
first quarter of last year, reflecting the financing secured to meet operating
liquidity needs.
Amortization and depreciation fell slightly, from $28,963 year-over-year to
$21,264 as at June 30, 2007, as a result of the disposal of production assets on
March 31, 2007.
Net loss
As a result of lower operating expenses, the net loss improved substantially
from the same quarter last year, decreasing by $228,613, from $864,092 as at
June 30, 2006, to $635,479.
RECENT DEVELOPMENTS AND OUTLOOK
FRV Media's strategy is to create content that can be exploited across multiple
distribution platforms with a view to generating longer term returns. We will
continue to expand by growing organically and acquiring companies that create
similar or complementary content.
As such, acquisitions remain a part of our development strategy, as evidenced by
the letter of intent signed on June 15 to acquire Imavision Distribution, a
large North-American DVD distributor. This transaction is proceeding as
scheduled and announced in a press release on June 20.
Cite Amerique has a number of projects scheduled for delivery later this year:
the second season of Bob Gratton, ma vie my life (TQS), Ludovic (CDC/SRC), Il
faut prendre le taureau par les contes, documentaries such as La riviere aux
castors, Documentaire geologique (CBC /NFB), Bachelet (SRC/RDI), 60 tonnes
d'epinettes (RDI), TeleSur (TV5) and Les Eveques (RDI/TFO), and a TV magazine
called Martin sur la route (SRC/ Food Network).
FORWARD-LOOKING INFORMATION
This press release contains forward looking statements reflecting the
objectives, estimates and expectations of FRV Media management. These statements
are identified by the use of verbs such as "believe," "anticipate," "estimate"
and "expect" as well as the use of the future or conditional tense. By their
very nature, these types of statements involve risk and uncertainty.
Consequently, results could differ materially from the Company's projections or
expectations. For more information on the risk factors not specifically
mentioned in this press release, the reader is invited to consult FRV's annual
report for the fiscal year ended March 31, 2007, under the heading "Risks and
Uncertainties," page 15.
ADDITIONAL INFORMATION
The complete management's analysis and discussion of operating results and
financial position for the quarter ended June 30, 2007 can be found on our Web
site at www.frvmedia.com as well as on SEDAR at www.sedar.com. The Company
regularly discloses additional information by press release, quarterly financial
statements and its annual notice. This information is also available on SEDAR.
ABOUT FRV MEDIA
FRV Media is a producer, exporter and integrator of quality content deployed
across multiple platforms: television, cinema, multimedia and publishing.
Through its two wholly owned subsidiaries Cite-Amerique and Delphis Films, the
Company creates and distributes dramatic content (TV series, made-for-TV movies
and feature films), youth and children's programs, documentaries, sitcoms and
magazine shows.
FRV Media Inc.
Consolidated Financial Statements
as at June 30, 2007
These consolidated financial statements
have not been reviewed
by the company's auditors
FRV Media Inc.
Consolidated Earnings (unaudited)
Three-month period ended June 30, 2007 and 2006
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2007 2006
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$ $
Revenue 1,747,845 1,100,786
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Production costs 1,195,010 580,108
Direct distribution costs 321,759 282,664
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1,516,769 862,772
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Gross profit 231,076 238,014
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Operating expenses 746,873 1,023,827
Financial expenses 100,352 54,043
Amortization of property and equipment 21,264 28,963
Interest income (1,934) (4,727)
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866,555 1,102,106
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Net loss (635,479) (864,092)
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Basic and diluted net loss per Class "A" share (0.02) (0.02)
Weighted average number of basic and diluted
Class "A" shares outstanding 37,259,923 34,993,313
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FRV Media Inc.
Consolidated Deficit (unaudited)
Three-month period ended June 30, 2007 and 2006
-------------------------------------------------------------------------
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2007 2006
-------------------------------------------------------------------------
$ $
Balance, beginning of period 9,282,799 6,196,000
Net loss 635,479 864,092
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Balance, end of period 9,918,278 7,060,092
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FRV Media Inc.
Consolidated Cash Flows (unaudited)
Three-month period ended June 30, 2007 and 2006
-------------------------------------------------------------------------
-------------------------------------------------------------------------
2007 2006
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$ $
OPERATING ACTIVITIES
Net loss (635,479) (864,092)
Non-cash items
Amortization of television and film productions 1,187,132
Amortization of distribution rights and costs (6,050) (73,377)
Write-off of projects under development 7,878
Stock-based compensation 3,302 2,509
Interest premium capitalized to convertible
debentures 35,425 10,914
Implicite interest charged to convertible
debentures 7,637
Amortization of property and equipment 21,264 28,963
Changes in assets and liabilities (2,850,025) (2,846,691)
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Cash flows from operating activities (2,228,916) (3,741,774)
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INVESTING ACTIVITIES
Short-term investments (470,273)
Restricted cash and investments 50,000 390,392
Property and equipment (3,475) (46,533)
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Cash flows from investing activities (423,748) 343,859
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FINANCING ACTIVITIES
Deferred expenses (18,973) (26,389)
Short-term debt 1,644,380 2,708,756
Short-term debentures 873,600
Long-term debt 1,083,819
Repayment of long-term debt (42,769) (26,152)
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Cash flows from financing activities 2,456,238 3,740,034
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Net increase (decrease) in cash (196,426) 342,119
Cash, beginning of period 773,970 132,262
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Cash, end of period 577,544 474,381
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FRV Media Inc.
Consolidated Balance Sheets
as of June 30, 2007 and March 31, 2007
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-------------------------------------------------------------------------
June 30, March 31,
07 07
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(unaudited) (audited)
$ $
ASSETS
Cash 577,544 773,970
Short-term investments 592,790 122,517
Restricted cash and investments 400,000 450,000
Accounts receivable 3,927,074 4,353,098
Prepaid expenses 178,345 158,106
Television and film productions 4,397,257 2,364,911
Distribution rights and costs 1,767,228 1,609,086
Balance of sale 137,500 137,500
Deferred expenses 190,228 44,855
Property and equipment 287,026 304,816
Goodwill 2,074,071 2,074,071
Future income taxes 499,325 499,325
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15,028,388 12,892,255
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LIABILITIES
Short-term debt 800,000 725,100
Bank loans for productions 4,737,534 3,168,055
Accounts payable and accrued liabilities 2,654,024 2,758,499
Deferred revenue 2,585,306 2,357,823
Short-term debentures 1,097,000 97,000
Convertible debentures 1,501,475 1,458,413
Other long-term debt 334,422 376,561
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13,709,761 10,941,451
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SHAREHOLDERS' EQUITY
Capital stock 10,169,891 10,169,891
Equity component of convertible debentures 93,000 93,000
Contributed surplus 974,014 970,712
Deficit (9,918,278) (9,282,799)
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1,318,627 1,950,804
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15,028,388 12,892,255
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