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APPENDIX 2
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C., 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15D-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of December, 2000
PEACE ARCH ENTERTAINMENT GROUP INC.
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(Translation of Registrant's name into English)
#302, 1132 Hamilton Street, Vancouver, B.C., Canada, V6B 2S2
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(Address of principal executive office)
[Indicate by check mark whether the registrant files or will file annual reports
under cover of Form 20F or Form 40-F.
Form 20-F [ X ] Form 40-F [___]]
[Indicate by check mark whether the registrant by furnishing the information]
contained in this Form is also thereby furnishing the information to the
Commission pursuant to rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes [___] No [ X ]
(If "Yes" is marked, indicate below the file number assigned to the registrant
in connection with Rule 12g3-2(b): 82-_______________ )]
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PEACE ARCH LOGO
PEACE ARCH ENTERTAINMENT REPORTS ITS ANNUAL RESULTS,
INCLUDING A 35% INCREASE IN FOURTH QUARTER REVENUE
RECORD REVENUE ANTICIPATED IN FISCAL 2001 AS PEACE ARCH DELIVERS ITS LARGEST
SLATE OF TELEVISION PROGRAMMING IN COMPANY'S HISTORY
VANCOUVER, British Columbia (December 14, 2000) -- PEACE ARCH ENTERTAINMENT
GROUP INC. (AMEX: "PAE"; TSE: "PAE.A", "PAE.B"), which creates, develops,
produces and distributes proprietary television and Internet programming for
worldwide markets, today announced results for the quarter and fiscal year ended
August 31, 2000.
Revenue totaled $16.9 million in the fourth quarter of FY2000, which represented
a 35% increase when compared with revenue of $12.6 million in the quarter ended
August 31, 1999. Revenue has been growing steadily since the second quarter of
FY2000, reflecting a trend that is expected to continue into the current fiscal
year. During the fourth quarter of FY2000, the Company commenced delivery on two
of its four television series.
The Company reported a net loss of ($124,000), or ($0.03) per diluted share, for
the three months ended August 31, 2000, compared with net income of $446,000, or
$0.13 per diluted share, in the fourth quarter of FY1999. During the fourth
quarter of FY2000, the Company adjusted its estimates for the amortization of
purchase goodwill and its investment in television programming, resulting in a
reduction in pretax earnings of $1.5 million. The impact of these adjustments is
reflected in fourth quarter operating results. Before the adjustment associated
with goodwill and television program amortization, net income for the fourth
quarter of FY2000 increased 69% when compared with the prior-year period.
After giving effect to the fourth quarter adjustments, the Company earned $0.8
million for the year ended August 31, 2000, or $0.21 per diluted share, on
revenue of approximately $35.4 million. This compared with earnings of $1.9
million, or $0.60 per diluted share, and revenue of approximately $51.5 million
in the prior year. Diluted earnings per share were calculated on 3,806,292
weighted average shares outstanding in the most recent fiscal year, compared
with 3,473,357 weighted average shares in the previous year.
The Company reported a 32% increase in total assets during the fiscal year, due
in large part to an increase in productions in progress which represent the cost
of programs at various stages of their completion. The increase in total assets
also reflects an increase investment in television programming resulting from
the delivery of 22 episodes of FIRST WAVE, seven episodes of THE IMMORTAL, and
several television documentaries.
During the year, the Company completed a $7.9 million subordinated debt issue
and increased its revolving bank line with the Royal Bank of Canada to $25
million, of which $5.8 million had been utilized at year end (1999 - $6.9
million). The Company anticipates that it will utilize its bank line to fund a
record production slate during the next few quarters.
"During the first three quarters of fiscal 2001 we will complete delivery of
four television series, five movies and several documentaries", stated Juliet
Jones, Chief Financial Officer of Peace Arch Entertainment Group Inc. "Our
fiscal 2000 revenues do not reflect the level of programming that we commenced
during the second half of the year. Not only did we lay the foundation for
strong growth in the current fiscal year, but we added programming with
significant library potential. THE IMMORTAL and BIG SOUND were produced under a
treaty co-production agreement between Canada and the UK. This enabled the
series to meet the
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broadcast requirements for national content in Canada and throughout the
European Union, greatly improving the market potential of the shows. Our
television series BIG SOUND, which was conceived, created and developed
in-house, was financed primarily within Canada and benefited from several
Canadian government incentive programs, thus enhancing the series' long-term
profit potential."
Tim Gamble, President of Peace Arch, noted that "Fiscal 2000 was a year of
tremendous programming accomplishments that set the groundwork for fiscal
2001 and beyond. We are currently producing four television series, including
22 episodes of our half-hour comedy series BIG SOUND, 22 episodes of our
one-hour action adventure series THE IMMORTAL, 13 one-hour episodes of ANIMAL
MIRACLES with Alan Thicke, and our third 22-episode series of FIRST WAVE. We
will deliver a trilogy of television movies for PAX TV and Hallmark, based on
Catherine Marshall's international bestseller CHRISTY. In addition, we will
complete two feature length films - NOW AND FOREVER and THE IMPOSSIBLE
ELEPHANT - which were filmed last summer and fall and are scheduled for
release this spring. This level of activity bodes well for fiscal 2001, and
we are building a library of quality, marketable programming that will have
value for years to come."
Peace Arch Entertainment Group Inc. creates, develops, produces and
distributes proprietary television and Internet programming for worldwide
markets. The Company is headquartered in Vancouver, British Columbia, and its
stock trades on the American Stock Exchange under the symbol "PAE"; and on
the Toronto Stock Exchange under the symbols "PAE.A" and "PAE.B".
A conference call to discuss the Company's operating results is scheduled for
4:15 P.M. Eastern Standard Time on Thursday, December 14, 2000. The dial in
number is (973) 694-6836. The audio of this call will be posted on Peace
Arch's website (www.peacearch.net) approximately two hours after completion
of the conference call.
The call will be hosted by PEACE ARCH ENTERTAINMENT GROUP INC.'S Chief
Executive Officer, Cameron White, and its Chief Financial Officer, Juliet
Jones.
(NOTE: THE FINANCIAL STATISTICS INCLUDED IN THIS RELEASE ARE REPRESENTED IN
CANADIAN DOLLARS AND ARE REPORTED IN ACCORDANCE WITH GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES IN CANADA. ON AUGUST 31, 2000 THE BANK OF CANADA NOON
SPOT RATE WAS US $0.66 FOR EACH $1.00 CANADIAN).
THIS PRESS RELEASE INCLUDES STATEMENTS THAT MAY CONSTITUTE FORWARD-LOOKING
STATEMENTS, USUALLY CONTAINING THE WORDS "BELIEVE", "ESTIMATE", "PROJECT",
"EXPECT", OR SIMILAR EXPRESSIONS. THESE STATEMENTS ARE MADE PURSUANT TO
THE SAFE HARBOR PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT
OF 1995. FORWARD-LOOKING STATEMENTS INHERENTLY INVOLVE RISKS AND
UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM
THE FORWARD-LOOKING STATEMENTS. FACTORS THAT WOULD CAUSE OR CONTRIBUTE TO
SUCH DIFFERENCES INCLUDE, BUT ARE NOT LIMITED TO, CONTINUED ACCEPTANCE OF
THE COMPANY'S PRODUCTS AND SERVICES IN THE MARKETPLACE, COMPETITIVE
FACTORS, DEPENDENCE UPON THIRD-PARTY VENDORS, AND OTHER RISKS DETAILED IN
THE COMPANY'S PERIODIC REPORT FILINGS WITH THE SECURITIES AND EXCHANGE
COMMISSION. BY MAKING THESE FORWARD-LOOKING STATEMENTS, THE COMPANY
UNDERTAKES NO OBLIGATION TO UPDATE THESE STATEMENTS FOR REVISIONS OR
CHANGES AFTER THE DATE OF THIS RELEASE.
Additional information on Peace Arch Entertainment Group can be accessed on the
Internet at
www.peacearch.net
-----------------
For additional information, please contact:
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Juliet Jones, CFO at (604) 681-9308
Tina Baird, Media Relations at (604) 985-8991
or
R. J. Falkner & Company, Investor Relations Counsel at (800) 377-9893
or via e-mail at [email protected].
(FINANCIAL HIGHLIGHTS TO FOLLOW)
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PEACE ARCH ENTERTAINMENT GROUP INC.
CONSOLIDATED BALANCE SHEETS
AS AT AUGUST 31, 1999 AND 2000
(Reported in accordance with generally accepted accounting principles in Canada)
(Expressed in thousands of Canadian dollars)
<TABLE>
<CAPTION>
==================================================================================================================================
1999 2000
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<S> <C> <C>
ASSETS
Cash and cash equivalents $ 4,455 $ 4,459
Accounts receivable 19,901 16,443
Productions in progress 3,446 15,637
Prepaid expenses and deposits 292 882
Investment in television programming 10,227 15,550
Property and equipment 7,079 7,397
Deferred costs 278 1,049
Goodwill and trademarks 3,185 2,913
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$ 48,863 $ 64,330
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LIABILITIES AND SHAREHOLDERS' EQUITY
Bank indebtedness $ 6,932 $ 5,797
Accounts payable and accrued liabilities 6,674 10,095
Deferred revenue 3,980 8,338
Deferred gain 514 233
Deferred credit - 1,090
Future income tax 797 460
Debt 4,240 11,252
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23,137 37,265
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Shareholders' equity:
Share capital 32,182 32,378
Authorized:
100,000,000 Class A Multiple Voting Shares
Issued - 1,387,794 (1999 - 1,517,965)
100,000,000 Class B Subordinate Voting Shares
Issued - 2,434,949 (1999 - 2,267,978)
25,000,000 Preference Shares, issuable in series
Issued - nil
Other paid-up capital 136 467
Deficit
(6,592) (5,780)
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25,726 27,065
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$ 48,863 $ 64,330
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</TABLE>
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PEACE ARCH ENTERTAINMENT GROUP INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT
FOR THE THREE MONTHS AND YEARS ENDED AUGUST 31, 1999 AND 2000
(Reported in accordance with generally accepted accounting principles in Canada)
(Expressed in thousands of Canadian dollars except per share information)
<TABLE>
<CAPTION>
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3 MONTHS ENDED YEARS ENDED
1999 2000 1999 2000
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<S> <C> <C> <C> <C>
REVENUE $ 12,566 $ 16,944 $ 51,547 $ 35,438
EXPENSES:
Amortization of television programming 8,908 13,927 40,296 26,311
Other costs of production and sales 1,072 926 2,905 2,157
Depreciation and amortization 132 349 484 809
Selling, general and administrative 1,051 1,076 3,049 3,668
Interest 296 619 1,188 935
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11,459 16,897 47,922 33,880
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Earnings from operations before undernoted 1,107 47 3,625 1,558
Gain on sale of assets 360 58 360 272
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Earnings before income taxes 1,467 105 3,985 1,830
Income taxes 1,021 229 2,132 1,018
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NET EARNINGS $ 446 (124) $ 1,853 $ 812
Deficit, beginning of period (7,038) (5,656) (8,445) (6,592)
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DEFICIT, END OF PERIOD $ (6,592) $ (5,780) $ (6,592) $ (5,780)
==================================================================================================================================
BASIC NET EARNINGS PER COMMON SHARE $ 0.14 $ (0.03) $ 0.60 $ 0.21
==================================================================================================================================
FULLY DILUTED EARNINGS PER COMMON SHARE $ 0.13 $ (0.03) $ 0.58 $ 0.21
==================================================================================================================================
</TABLE>
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PEACE ARCH ENTERTAINMENT GROUP INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS AND YEARS ENDED AUGUST 31, 1999 AND 2000
(Reported in accordance with generally accepted accounting principles in Canada)
(Expressed in thousands of Canadian dollars)
<TABLE>
<CAPTION>
=================================================================================================================================
3 MONTHS ENDED YEARS ENDED
1999 2000 1999 2000
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<S> <C> <C> <C> <C>
OPERATING ACTIVITIES:
Net earnings $ 446 $ (124) $ 1,853 $ 812
Items not involving cash:
Depreciation and amortization 8,769 14,326 40,119 27,120
Interest on debt discount 96 48 96 48
Future income taxes 1,388 (137) 1,816 629
Loss (Gain) on sale of assets (361) 513 (361) 290
Other (80) (25) 7 -
Changes in non-cash working capital 509 (5,466) (3,759) (1,544)
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10,767 9,135 39,771 27,355
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INVESTING ACTIVITIES:
Investment in television programming (10,881) (16,812) (44,231) (31,599)
Increase in deferred costs 150 (690) (243) (998)
Increase in goodwill and trademarks (12) (7) (12) (39)
Property and equipment acquired (24) (183) (270) (589)
Proceeds on sale of assets, net 626 - 626 -
Acquisition of assets - (477) - (477)
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(10,141) (18,169) (44,130) (33,702)
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FINANCING ACTIVITIES:
Issue of common shares, net 4,177 - 4,177 191
Repayments to directors and shareholders - 350 (386) 350
Increase in bank indebtedness (1,139) 3,886 4,282 (1,135)
Increase in debt - 7,646 1,200 7,817
Repayment of debt (873) (664) (2,335) (872)
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2,165 11,218 6,938 6,351
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Increase (decrease) in cash and cash equivalents 2,791 2,184 2,579 4
Cash and cash equivalents, beginning of period 1,664 2,275 1,876 4,455
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CASH AND CASH EQUIVALENTS, END OF PERIOD $ 4,455 $ 4,459 $ 4,455 $ 4,459
=================================================================================================================================
Supplementary information:
Interest paid (net of amounts capitalized) $ 250 $ 506 $ 1,142 $ 787
Income taxes paid 5 (21) 12 505
Non-cash transactions:
Property sold through decrease in long-term debt
and increase in accounts receivable 2,467 - 2,467 -
Value assigned to common shares issued:
For acquisition of Peace Arch Productions Inc. 803 - 803 -
</TABLE>
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For the convenience of the reader, the annual 2000 and 1999 operating results
have been translated into US Dollars using the average exchange rate in effect
for the periods. These translations are not necessarily representative of the
amounts that would have been reported if the Company had historically reported
its financial statements in US Dollars. In addition, the rates utilized are not
necessarily indicative of rates in effect at any other time.
PEACE ARCH ENTERTAINMENT GROUP INC.
US DOLLARS
SELECTED FINANCIAL AND OPERATING INFORMATION
FOR THE YEARS ENDED AUGUST 31, 1999 AND 2000
(Reported in accordance with generally accepted accounting principles in Canada)
(Expressed in thousands of US Dollars except per share information)
STATEMENT OF OPERATIONS DATA:
<TABLE>
<CAPTION>
YEARS ENDED
1999 2000
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<S> <C> <C>
Revenue $ 34,185 $ 24,081
Net earnings for the period $ 1,259 $ 552
EBITDA $ 3,513 $ 2,244
Fully diluted earnings per common share $ 0.39 $ 0.14
</TABLE>
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Peace Arch Entertainment Group Inc.
-----------------------------------
(Registrant)
Date December 14, 2000 By /S/ JULIET JONES
----------------- -----------------------------------
(Signature)*
Juliet Jones, CFO
------------------------------
*Print the name and title under the signature of the signing officer.
GENERAL INSTRUCTIONS
A. Rule as to Use of Form 6-K
This form shall be used by foreign private issuers which are required to furnish
reports pursuant to Rule 13a-16 or 15d-16 under the Securities Exchange Act of
1934.
B. Information and Document required to be Furnished
Subject to General Instruction D herein, an issuer furnishing a report on this
form shall furnish whatever information, not required to be furnished on Form
40-F or previously furnished, such issuer (i) makes or is required to make
public pursuant to the law of the jurisdiction of its domicile or in which it is
incorporated or organized, or (ii) files or is required to file with a stock
exchange on which its securities are traded and which was made public by that
exchange, or (iii) distributes or is required to distribute to its security
holders.
The information required to be furnished pursuant to (i), (ii) or (iii) above is
that which is material with respect to the issuer and its subsidiaries
concerning: changes in business; changes in management or control; acquisitions
or dispositions of assets; bankruptcy or receivership; changes in registrant's
certifying accountants; the financial condition and results of operations;
material legal proceedings; changes in securities or in the security for
registered securities; defaults upon senior securities; material increases or
decreases in the amount outstanding of securities or indebtedness; the results
of the submission of matters to a vote of security holders; transactions with
directors, officers or principal security holders; the granting of options or
payment of other compensation to directors or officers; and any other
information which the registrant deems of material importance to security
holders.
This report is required to be furnished promptly after the material contained in
the report is made public as described above. The information and documents
furnished in this report shall not be deemed to be "filed" for the purpose of
Section 18 of the Act or otherwise subject to the liabilities of that section.
If a report furnished on this form incorporates by reference any information not
previously filed with the Commission, such information must be attached as an
exhibit and furnished with the form.
C. Preparation and Filing of Report
This report shall consist of a cover page, the document or report furnished by
the issuer, and a signature page. Eight complete copies of each report on this
form shall be deposited with the Commission. At least one complete copy shall be
filed with each United States stock exchange on which any security of the
registrant is listed and registered under Section 12(b) of the Act. At least one
of the copies deposited with the Commission and one filed with each such
exchange shall be manually signed. Unsigned copies shall be conformed.
D. Translations of Papers and Documents into English
Reference is made to Rule 12b-12(d) [17 CFR 240.12b-12(d)]. Information required
to be furnished pursuant to General Instruction B in the form of press releases
and all communications or materials distributed directly to security holders of
each class of securities to which any reporting obligation under Section 13(a)
or 15(d) of the Act relates shall be in the English language. English versions
or adequate summaries in the English language of such materials may be furnished
in lieu of original English translations.
Notwithstanding General Instruction B, no other documents or reports, including
prospectuses or offering circulars relating to entirely foreign offerings, need
be furnished unless the issuer otherwise has prepared or caused to be prepared
English translations, English versions or summaries in English thereof. If no
such English translations, versions or summary have been prepared, it will be
sufficient to provide a brief description in English of any such documents or
reports. In no event are copies of original language documents or reports
required to be furnished.
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