Cinedigm Digital Cinema Corp. Announces Fiscal Year 2010 and Fourth Quarter Results

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Solid Q4 Year Over Year EBITDA Improvement as Phase 2 Takes Hold

MORRISTOWN, NJ, Jun 10, 2010 (MARKETWIRE via COMTEX News Network) -- Cinedigm Digital Cinema Corp. ("Cinedigm" or the "Company") (NASDAQ: CIDM) reported its fiscal fourth quarter and year end results as of March 31, 2010 with revenues of $16.4 million and $72.2 million, respectively. For the quarter revenues declined less than 1% from the previous year and for the full fiscal year 2010, revenues decreased 6.8% predominantly due to the contracted 16% step down in virtual print fee rates charged to the major movie studios, offset by revenue gains as the Company benefitted from Phase 2 deployments and better than expected screen turns in the seasonally slow fiscal fourth quarter. The Company posted Adjusted EBITDA(1) (defined below) of $8.4 million, increasing 20.8% from $6.9 million in the fourth quarter one year ago as a result of increased digital cinema services fees and the positive impact of previously completed expense reductions. Adjusted EBITDA for the full year was $37.5 million, modestly lower than the 2009 Adjusted EBITDA of $38.3 million. The net loss in the fourth quarter of $15.0 million or $0.52 per share and the net loss for the year of $29.5 million or $1.03 per share include various non-cash items aggregating to $14.5 million or $0.51 per share. The Company ended the fiscal 2010 fourth quarter with $24.2M of cash and investments on its balance sheet of which $15.1 million is restricted for various uses, including the payment of interest expense. The fourth quarter and full year results reflect the reclassification of the Company's Pavilion movie theater to discontinued operations as Cinedigm is engaged in a plan to sell the theater.

FISCAL 2010 AND RECENT HIGHLIGHTS

--  Revenues for the fiscal year 2010 fourth quarter were $16.4 million    compared to $16.5 million in the year-ago period. Revenues for the    fiscal year 2010 were $72.2 million compared to $77.5 million in    fiscal year 2009. The full year decrease was primarily due to the     November 2008 originally contracted 16% step-down in Virtual Print Fee    (VPF) rates charged to the major movie studios via long term contracts    and to lower advertising revenues. Partially offsetting these declines    were Phase 2-related digital cinema services and software license     fees.  --  Adjusted EBITDA in the fourth quarter was $8.4 million, an increase    compared to the year-ago period of $6.9 million. Adjusted EBITDA for    the fiscal year 2010 was $37.5 million, a small decrease compared to    the fiscal year 2009 Adjusted EBITDA of $38.3 million. The strength of     the Adjusted EBITDA growth as compared to revenue declines in each   period was due to the growth of digital cinema service fees and the    reduction in both direct operating costs, and selling, general and    administrative expenses in the comparative periods from continued     careful expense management. The primary expense reductions were in the    areas of personnel costs and professional fees.  --  EBITDA, excluding our non-recourse Phase 1 and 2 deployments, improved    sequentially to $(0.5) million in Q4 compared to cumulative $(4.4)    million of EBITDA in those same divisions through the first 9 months    of fiscal 2010 as Cinedigm began to benefit from positive operating     leverage inherent in the expansion of digital cinema.  --  In May 2010, all of the Company's Phase 1, non-recourse debt was    refinanced with $172.5 million of new non-recourse debt on more    favorable terms than the prior facility, including a reduction in    interest rates and greater covenant flexibility, both of which we     expect to enable Cinedigm to receive its contracted service fees. The    new non-recourse facility has a 6-year maturity and received a Ba1     rating from Moody's.  --  During the quarter, Cinedigm signed 779 total screens for Phase 2    bringing total screens under Master License Agreements (MLAs) to 1,543    at March 31, 2010. Since the end of the quarter, an additional 101    screens have been added for a total of 1,644 screens under MLAs as of     June 10, 2010.  --  Also during the quarter, Cinedigm, signed the first Exhibitor-Buyer    Phase 2 MLAs using the National Association of Theatre Owners --    Cinema Buying Group contract.  Bud Mayo, Chief Executive Officer of Cinedigm, stated, "Overall, during the year, we've seen a major shift in momentum. Growth is returning to Cinedigm and we expect it to be evidenced in the fiscal 2011 financial results. Our balance sheet and cash flows are stronger. Our global leadership in digital cinema is continuing across all of our business units. The transformative effect of digital cinema is taking hold with well attended 3D live events and week-long theatrical engagements of content that could not have made it into the theatre five years ago." 

PHASE 2 UPDATE Mayo added, "The completion of the NATO Cinema Buying Group Exhibitor-Buyer contract was a hallmark event this year and the culmination of more than a year of work. Nine CBG member theatres have signed agreements to participate in this new contract, and a total of 1,644 screens have joined the Phase 2 deployment plan. Cinedigm signed Phase 2 VPF agreements with Warner Bros. and Overture Films and now has VPF agreements with eight studios. To date we have installed 625 Phase 2 screens and more than 4,000 screens in total."

CORPORATE UPDATE Mayo concluded, "This was a year full of firsts, particularly in the Cinedigm Entertainment Group or 'CEG.' CEG distributed two independent feature movies, each of which included live virtual premieres with the actors, delivered via satellite to theatres across the country. CEG also launched its 'Million Dollar Movie' program, which helps independent movie producers obtain distribution to digital cinemas. The group launched its 3-D Concert Series with the Dave Matthews Band in 3-D which went to 520 theatres, a record for any alternative event we've distributed and followed that in the spring with PHISH 3D which went to 223 theatres. In addition, CEG continued to enhance its CineLive 3D program with the successful broadcast of the NCAA Men's Basketball Final Four and National Finals in early April. Finally, we are also growing our content delivery business as industry-wide digital deployments accelerate and we announced plans to double our satellite network."