Broadcaster

Headline Media Group shows improvement

7/23/2003

TORONTO - Headline Media Group, owners of The Score and PrideVision TV showed improved third quarter results, ended May 31st today.

Its third quarter press release said net income before interest, income taxes, depreciation and amortization was $1.1 million, an improvement from a loss of $4.9 million in the same period last year. For the nine months ended May 31, 2003, net loss before interest, income taxes, depreciation and amortization was $2.4 million, an improvement of $11.4 million from a loss of $13.8 million in the same period last year.

Losses last year stemmed largely from a too-big Major League Baseball contract for The Score which was terminated early and ceased with last season's World Series.

Net income for the three months ended May 31, 2003 was $300,000 an improvement from a loss of $6 million in the same period last year. For the nine months ended May 31, 2003, net loss was $4.6 million, an improvement over the $16.5 million recorded in the first three quarters of fiscal 2002.

Consolidated revenue for the third quarter decreased by $300,000 to $9.1 million. This decrease was due to significantly lower revenue in the St. Clair Group sports and entertainment marketing division. Revenue in that group declined by $1.4 million to $3.1 million for the third quarter ended May 31, 2003 due to lower advertising revenues.

However, increased revenue in the broadcasting group offset some of this decline, as revenue increased 21.7 % to $6.0 million for the third quarter ended May 31, 2003.

Broadcasting group revenue increased 16.5% to $16.2 million for the nine months ended May 31, 2003 due to increased subscriber revenue and increased advertising revenue.

However, the company still faces an uncertain future and is still looking for funding. As reported earlier this year by www.cablecastermagazine.com, the company indicated it needed additional cash or to sell assets in order to continue past the end of this fiscal year, ended August 31st, 2003.

The release has pushed that deadline out until the first quarter of fiscal 2004, ending November 30, 2003.

"With the credit facilities and financing currently in place and assuming the successful execution of its current business plan, management believes there are sufficient resources to fund operations until the end of the first quarter in fiscal 2004. During 2002 and continuing into fiscal 2003, the company has introduced significant cost cutting measures to preserve cash and to strategically realign the company's resources. Beyond the end of the first quarter in fiscal 2004, the company will require additional funding in order to continue operations and service the commitments under significant agreements," reads the release.

"The company is actively pursuing alternative financing with potential lenders and investors, which if successful, will, in management's view, enable the company to achieve its business plans in the long-term. No agreements with potential lenders or investors have been reached yet and there can be no assurance that such agreements will be reached. In addition, the company continues to review other alternatives, which could involve renegotiating existing cash commitments, further reducing its work force, a further restructuring of the business units which may include the divestiture of certain assets of the company, or attracting a strategic investor that would assist in developing the business of the company."

For the full release, go to www.headlinemediagroup.com.

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