SOURCE: Seven Arts Pictures plc

Seven Arts Pictures plc

April 19, 2011 16:35 ET

Seven Arts Pictures plc Announces Results of Operations for the Six Months Ended December 31, 2010

HOLLYWOOD, CA--(Marketwire - Apr 19, 2011) - Seven Arts Pictures plc (NASDAQ: SAPX) ("Seven Arts" or the "Company") announced today its results of operations for the six months ended December 31, 2010. The Company reported revenue of approximately $1,808,000, gross profit of approximately $862,000 and profit before interest and taxes of approximately $524,000.

These results compare to the results of operations for the six months ended December 31, 2009, in which the Company reported revenues of approximately $2,983,000, gross profits of approximately $2,180,000 and profit before interest and taxes of approximately $735,000.

The Company reported net profit of approximately $537,000 for the six months ended December 31, 2009, which was a result of profit before interest and taxes plus other income of approximately $150,000 and net interest expense of approximately $349,000. Seven Arts reported a net loss of approximately $209,000 for the current six months ended December 31, 2010, which was a result of profit before interest and taxes plus other expenses of $31,000 and net interest expense of approximately $702,000.

As of December 31, 2010, Seven Arts accrued, as a matter of caution, the full amount of the indebtedness claimed by the Arrowhead Target Fund of $1,000,000 plus accrued interest. Management believes, however, that Seven Arts is not liable for these amounts and will prevail in the litigation currently pending regarding this indebtedness. If Seven Arts prevails in certain proceedings in the current fiscal year ending June 30, 2011, management expects these amounts will be removed as a liability in the fiscal year with appropriate cancellation of indebtedness income. However, there can be no assurance that Seven Arts will prevail in these proceedings.

In addition, in the six months ended December 31, 2010, Seven Arts has charged $239,000 as amortization of debt discount (included in interest expense) related to the investment by third party investors in certain convertible notes of Seven Arts, which is not a recurring item. All such notes have now been converted or reduced.

Peter Hoffman, Chief Executive Officer of Seven Arts, stated, "We are pleased to have achieved comparable profit before interest and taxes for the six months ended December 31, 2010. We do not believe the differences in net income reflect on Seven Arts' prospects. The independent film industry has experienced many challenges in the last fiscal year which led to changes in our expected revenue model. Seven Arts reduced production during the current fiscal year ended June 30, 2010 as it completed new sources of financing. We currently believe that Seven Arts is poised for success in the current fiscal year and beyond. We are particularly optimistic regarding our new relationship with Fletcher Asset Management and look forward to joint production and distribution of films with Fletcher."

Summary Financial Information.

Selected Financial Data
(in $ 000's, except per share data)
Summary Profit and Loss DataSix Months
Ended
December 31,
2010
Six Months
Ended
December 31, 2009
Total Revenues$1,808$2,983
Cost of Sales$(946)$(803)
Gross Profit$862$2,180
Other operating expenses$(338)$(1,445)
Profit before interest and taxes$524$735
Other (Expense)/ Income$(31)$150
Net interest (expense)/income$(702)$(349)
(Loss)/Profit Before Taxes$(209)$537
Provision for Taxes$0$0
Net (Loss)/Profit$(209)$537
Weighted Average Ordinary Shares used in
Earnings/(loss) per share calculation
Basic (in ,000's)7,9586,935
Diluted (in ,000's)7,9588,101
Earnings (loss) Per Share in cents - Basic$(2.6)$7.7
Earnings (loss) Per Share in cents - Diluted$(2.6)$6.6
Balance Sheet DataDecember 31, 2010December 31, 2009
Total Loans$17,521$17,137
Total Assets$28,782$29,014
Shareholders' Equity$3,018$2,217

The internally-prepared selected financial data for the six months ended December 31, 2010, were not reviewed by the Company's registered independent public accounting firm.

About Seven Arts:
Seven Arts Pictures plc was founded in 2002 as an independent motion picture production and distribution company engaged in the development, acquisition, financing, production, and licensing of theatrical motion pictures for exhibition in domestic (i.e., the United States and Canada) and foreign theatrical markets, and for subsequent worldwide release in other forms of media, including home video and pay and free television.

Cautionary Information Regarding Forward-Looking Statements:
Forward-looking statements contained in this press release are made under the Safe Harbor Provision of the Private Securities Litigation Reform Act of 1995. Any such statements are subject to risks and uncertainties that could cause actual results to differ materially from the anticipated.

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