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EDCI Holdings, Inc. Announces 3Q2009 and YTD 3Q2009 Results

October 30, 2009

NEW YORK, Oct. 30 /PRNewswire-FirstCall/ — EDCI Holdings, Inc. (Nasdaq: EDCI) (“EDCI”), the holding company for Entertainment Distribution Company, Inc., the majority shareholder of Entertainment Distribution Company, LLC (“EDC”), a European provider of supply chain services to the optical disc market, today reported 3Q2009 and YTD 3Q2009 financial results.

3Q2009 and YTD 3Q2009 Highlights

  • EDCI Board of Directors Has Recommended a Plan of Dissolution: Special shareholder meeting to be held in the beginning of January 2010.
  • EDCI Cash and Cash Equivalents: $50.9 million or $7.62/share outstanding at 09/30/2009. This compares to $51.4 million or $7.66/share outstanding at 06/30/2009.
  • EDCI Cash Burn Rate: At current run rates, due to aggressive cost cutting, EDCI targets the annual 2009 cash burn rate at $2.5 million, or $0.37/share outstanding at 09/30/2009.
  • EDC International 3Q2009 Revenue Down (27%) Y/Y: 17% Y/Y Disc volume decline and deteriorating pricing drove 3Q2009 revenue decline of (27%) Y/Y to $42.8 million. YTD 3Q2009 revenue down (30%) Y/Y to $121.4 million.
  • EDCI 3Q2009 EBITDA Down (76%): 3Q2009 EBITDA was $1.1 million compared to $4.6 million in 3Q2008. Although revenues declined $15.4 million for the quarter, EBITDA only declined $3.5 million due to continuing cost saving efforts by the Company.
  • EDCI YTD 3Q2009 EBITDA Down (149%): YTD 3Q2009 EBITDA of ($5.2) million includes $7.2 million of severance costs for UK facility closure. Had this charge not been incurred, EBITDA would have been $1.9 million.

“The mid-teen Disc volume decline that EDC’s operations experienced in the 1H2009 continued in the 3Q2009 and further highlighted the difficult environment under which EDC’s Disc manufacturing and distribution business is operating,” said Clarke H. Bailey, Chief Executive Officer. “Negative operating leverage from rapid Disc volume declines continues to hamper EDC’s high fixed cost, moderate gross margin businesses. As Disc volume declines remain largely out of EDC’s control, management’s focus remains on controlling costs and right-sizing our operations to ensure we are maximizing cash flows.”


    3Q2009 and YTD 3Q2009 Financial Summary

    All amounts below represent continuing operations unless noted
    ($000's)
                                                     YTD        YTD
                     3Q2009     3Q2008  Change     3Q2009     3Q2008   Change
                    -------    -------  ------    --------  --------  ------
    Total revenue   $42,782    $58,217    (27%)  $121,449   $172,608   (30%)

    Gross profit      6,975     10,771    (35%)    18,286     31,337   (42%)
    Gross
     margin %         16.3%      18.5%  (220 bp.)   15.1%      18.2% (310 bp.)

    SG&A
     expense          7,526      8,243     (9%)    21,217     27,049   (22%)
    SG&A %            17.6%      14.2%  +340 bp.    17.5%      15.7%  +180 bp.

    Severance
     costs for
     UK facility
     closure              -          -      0%      7,152          -    100%
    Severance
     costs for
     UK facility
     closure as
     % of revenue      0.0%       0.0%     0 bp.     5.9%       0.0%  +590 bp.

    Operating
     income (loss)    (551)        930    (159%)  (10,083)      (555) (1,717%)
    Operating
     margin %        -1.3%        1.6%  (290 bp.)   -8.3%      -0.3% (800 bp.)

    EBITDA           1,119       4,598     (76%)   (5,209)    10,621    (149%)

    Income (loss)
     from
     continuing
     operations     (1,369)      2,542             (8,126)    (1,701)
    Income
     (loss) from
     discontinued
     operations         56      (1,491)            (2,596)    (9,194)
    Net income
     (loss)
     attributable
     to common
     stockholders*    (900)      1,012            (10,039)   (10,692)

    Common
     shares
     outstanding 6,686,137   6,694,640          6,686,137  6,694,640

    Diluted EPS     $(0.20)      $0.37             $(1.20)    $(0.24)
    Diluted EPS
     from
     discontinued
     operations      $0.01      $(0.22)            $(0.38)    $(1.31)

    * Includes both continuing and discontinued operations

EDCI & EDC 3Q2009 and YTD 3Q2009 Operating Results

  • EDC (& EDCI) Revenue:
    • EDC 3Q2009 Revenue down (27%) Y/Y: The (27%) Y/Y decline was attributable to Disc volume declines of (17%) Y/Y, business mix pressures on revenues per unit and 5 bp. of the decline related to the U.S. dollar strengthening against the Euro and British Pound.
    • EDC YTD 3Q2009 Revenue down (30%) Y/Y: The (30%) Y/Y decline was attributable to Disc volume declines of (17%) Y/Y, business mix pressures on revenues per unit and 10 bp. of the decline related to the U.S. dollar strengthening against the Euro and British Pound.

                                     Volume                  Revenue
                                     ------                  -------
                                3Q2009    YTD 3Q2009    3Q2009    YTD 3Q2009
                                  vs.         vs.         vs.         vs.
                                3Q2008    YTD 3Q2008    3Q2008    YTD 3Q2008
                               -------   -----------   -------   -----------
    EDC Hannover Manufacturing    (2%)         (5%)      (14%)       (21%)
    EDC Hannover Distribution    (12%)        (17%)      (18%)       (27%)
    EDC Blackburn Manufacturing  (46%)**      (33%)**    (56%)       (47%)

    ** EDC Blackburn volume declines include the impact of the closure of the
    Blackburn facility and our decision to forgo certain customer accounts
    due to uneconomical pricing and excessive credit risk.
  • EDC (& EDCI) Gross Margin:
    • EDC 3Q2009 Gross Margin Percentage down (220 bp.) Y/Y: 3Q2009 gross margin was 16.3%. The decrease from 3Q2008 was due to (17%) Y/Y volume declines and business mix resulting in lower revenues per unit.
    • EDC YTD 3Q2009 Gross Margin Percentage down (310 bp.) Y/Y: YTD 3Q2009 gross margin was 15.1%. The decrease from YTD 3Q2008 was due to (17%) Y/Y volume declines, redundancy costs, lower revenue per unit and the U.S. dollar strengthening against the Euro and British Pound.
  • EDCI EBITDA:
    • 3Q2009 EBITDA down (76%) Y/Y: The decrease from 3Q2008 was due to (17%) Y/Y volume declines and changes in business mix.
    • YTD 3Q2009 EBITDA down (149%) Y/Y: The decrease from YTD 3Q2008 was due to $7.2 million in restructuring charges incurred related to the EDC Blackburn – Hannover Consolidation. Had these charges not been incurred, EBITDA would have been down (82%) due to (17%) Y/Y volume declines.

    Balance Sheet Information
                                                                    % Change
                                                                   ---------
                                                                     from
    ($000,000's)                 9/30/2009   6/30/2009 12/31/2008  6/30/2009
    ------------                 ---------   --------- ----------  ---------
                               (unaudited) (unaudited)
                               ----------- -----------
    EDCI-H Cash & S/T
     Investments                     $50.9       $51.4      $52.6      (1.0%)
    EDCI-H Working Capital            50.5        50.9       52.2      (0.8%)
    EDC Working Capital               17.0        14.8       29.2      14.9%
    EDC Unrestricted Cash             27.5        27.6       22.5      (0.4%)
    EDC Accounts Receivable           14.5        12.6       19.1      15.1%
    EDC Credit Facility & UMG Debt     9.4         9.3       10.3       1.1%

  • EDCI Cash:
    • EDCI cash and cash equivalents were $50.9 million or $7.62/share outstanding at 09/30/2009. This compares to $51.4 million or $7.66/share outstanding at 06/30/2009. At current run rates, due to aggressive cost cutting, EDCI targets the annual 2009 cash burn rate at $2.5 million, or $0.37/share outstanding at 09/30/2009. The salaries of EDCI employees were reduced 19% beginning July 1, 2009.
  • EDC Working Capital:
    • EDC working capital was $17.0 million at 09/30/2009, approximately 15% higher than working capital of $14.8 million at 06/30/2009. The increase was primarily due to higher accounts receivable, which were driven by the timing of invoicing and payments received from our largest customer.
  • EDC Accounts Receivable / DSO:
    • EDC 09/30/2009 accounts receivable was $14.5 million, up approximately 15% from 06/30/2009. Days Sales Outstanding (DSO) was approximately 31 days at 09/30/2009 and 06/30/2009.

Plan of Liquidation and Dissolution

On September 9, 2009, the Company announced that its Board of Directors unanimously approved recommending a dissolution process to EDCI’s stockholders. In this regard, on October 14, 2009, the Board of Directors unanimously approved a Plan of Complete Liquidation and Dissolution (the “Plan of Dissolution”), subject to stockholder approval. The ultimate goal is to effect a distribution of the maximum available cash of EDCI to its stockholders while retaining sufficient reserves to maximize the value of any remaining assets and manage down both known and unknown liabilities in accordance with state law requirements. The Plan of Dissolution provides for an orderly wind down of EDCI’s business and operations during a three-year statutory period under Delaware law. If the dissolution is approved by the stockholders, EDCI expects to make an aggregate initial distribution of cash to its stockholders of up to $30.0 million. EDCI’s indirect ownership of 97.99% of the membership units of EDC will be an asset of EDCI that is subject to the Plan of Dissolution. The Plan of Dissolution does not directly involve the operating business, assets, liabilities or corporate existence of EDC and its subsidiaries, however, subsequent to the stockholder ratification of the Plan of Dissolution, EDCI’s consolidated financials will be required to reflect the value of EDC’s assets and liabilities under liquidation accounting. During EDCI’s three-year dissolution period, EDCI will continue to seek value for its investment in EDC by exploring strategic alternatives and seeking, as appropriate, cash distributions, subject to repayment of EDC’s bank debt and other legal requirements. If EDCI continues to own any interest in EDC at the end of the three year dissolution period, EDCI anticipates transferring such interests to a liquidating trust, for the benefit of the Company’s stockholders.

EDC Blackburn – Hannover Consolidation Update

As previously announced on March 20, 2009, the Board of Directors of EDC approved a plan to consolidate EDC’s Blackburn, UK and Hannover, Germany manufacturing volumes within the Hannover facility (the “Consolidation”). During the 3Q2009, EDC continued to take certain steps towards execution of the Consolidation and the Consolidation is proceeding according to plan. Current estimates of costs associated with the closure of the Blackburn facility are in line with those previously announced. Consummation of the Consolidation transaction requires the consent of the lenders pursuant to EDC’s credit facility. EDC is currently in negotiations to obtain the consent of the lenders to proceed with the Consolidation transaction but have yet to reach an agreement.

Share Buyback Program

EDCI announced on May 26, 2009 that the EDCI Board of Directors approved a twelve month extension of EDCI’s common stock repurchase program and also added a provision to the program which allows EDCI to repurchase shares of its common stock under a 10b5-1 plan. During the third quarter of 2009, EDCI repurchased a total of 28,887 shares. Since the original implementation of the plan, EDCI has purchased a total of 220,610 shares for an aggregate purchase price of $982,000.

Conference Call

EDCI will host a conference call to discuss the 3Q2009 financial results on Monday, November 2, 2009 at 9:00 a.m. ET. This press release, the financial tables, as well as other supplemental information including the reconciliation of certain non-GAAP measures to their nearest comparable GAAP measures, are also available on EDCI’s corporate website located at www.edcih.com.

To access the conference call, please dial (800) 642-1740 or (706) 634-7533 (international callers) and reference conference code 35710995. A live webcast of the conference call will also be available on EDCI’s corporate website. A replay of the conference call will be available through midnight ET on Friday, November 13, 2009. The replay can be accessed by dialing (800) 642-1687 or (706) 645-9291 (international callers). The conference code for the replay is 35710995.

About EDCI Holdings, Inc.

EDCI Holdings, Inc. (Nasdaq: EDCI) is a multi-national company, headquartered in New York, that is seeking to enhance shareholder value by pursuing acquisition opportunities. EDCI is the holding company of Entertainment Distribution Company, Inc., which is the majority shareholder of Entertainment Distribution Company, LLC (“EDC”), a European provider of supply chain services to the optical Disc market. EDC serves every aspect of the manufacturing and distribution process and is one of the largest providers in the industry. EDC’s clients include some of the world’s best-known music, movie and gaming companies. EDC’s operations include manufacturing and distribution facilities in Hannover, Germany, and a manufacturing facility in Blackburn, UK. For more information, please visit www.edcih.com.

Safe Harbor Statement

This news release contains statements that may be forward looking within the meaning of applicable securities laws. The statements may include projections regarding future revenues and earnings results, and are based upon EDCI’s current forecasts, expectations and assumptions, which are subject to a number of risks and uncertainties that could cause the actual outcomes and results to differ materially. Some of these results and uncertainties are discussed in EDCI’s most recently filed Annual Report on Form 10-K. These factors include, but are not limited to the current global and economic downturn; declining nature of CD and DVD industries; potential intellectual property infringement claims; variability of quarterly results and dependence on key customers; increased costs or shortages of raw materials or energy; international business risks; foreign currency translation and transaction risks; limitations on NOLs resulting from ownership changes; environmental laws and regulations; ability to attract and retain key personnel; competition; and volatility of stock price; EDCI assumes no obligation to update any forward-looking statements and does not intend to do so except where legally required.

ABOUT NON-GAAP FINANCIAL MEASURES

To supplement its consolidated financial statements, which statements are prepared and presented in accordance with GAAP, EDCI uses the following non-GAAP financial measures: EBITDA. The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. For more information on these non-GAAP financial measures, please see the tables captioned “Summary Schedule of non-GAAP Financial Data” included at the end of this release.


                      EDCI HOLDINGS, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

                                                September 30,  December 31,
                                                     2009          2008
                                                  (unaudited)
                                                 -----------   -----------
                                                      (In thousands,
                      ASSETS                        except share data)
    Current Assets:
       Cash and cash equivalents                     $78,357        $75,112
       Restricted cash                                 2,452          7,258
       Accounts receivable, net of allowances
        for doubtful accounts of $2,913 and
        $3,008 for September 30, 2009 and
        December 31, 2008, respectively               14,541         19,129
       Current portion of long-term receivable         1,256            599
       Inventories, net                                6,424          4,845
       Prepaid expenses and other current assets      13,065         12,513
       Deferred income taxes                             108            105
       Assets held for sale                            7,000          7,154
       Current assets, discontinued operations           203          8,691
                                                         ---          -----
            Total Current Assets                     123,406        135,406
    Restricted cash                                   25,396         25,439
    Property, plant and equipment, net                17,763         21,186
    Long-term receivable                               2,276          3,066
    Long-term investments                                870          1,020
    Deferred income taxes                              1,507          1,694
    Other assets                                       3,954          4,739
                                                       -----          -----
     TOTAL ASSETS                                   $175,172       $192,550
                                                    ========       ========

       LIABILITIES AND STOCKHOLDERS' EQUITY
    Current Liabilities:
       Accounts payable                              $13,174        $15,930
       Accrued expenses and other liabilities         32,139         24,435
       Loans from employees                            1,021          1,142
       Current portion of long-term debt               7,467          2,281
       Current liabilities, discontinued
        operations                                     2,049         10,226
                                                       -----         ------
            Total Current Liabilities                 55,850         54,014
    Other non-current liabilities                      3,936          8,353
    Loans from employees                               1,526          2,490
    Long-term debt                                     1,928          7,996
    Pension and other defined benefit
     obligations                                      35,677         35,052
    Non-current liabilities,
     discontinued operations                               -             41
                                                          --             --
            Total Liabilities                         98,917        107,946
    Commitments and contingencies
    Stockholders' Equity:
       Preferred stock, $.01 par value;
        authorized: 1,000,000 shares, no
        shares issued and outstanding                      -              -
       Common stock, $.02 par value;
        authorized: 15,000,000 shares
        September 30, 2009 -- 7,019,436
        shares issued; December 31, 2008 --
        7,019,436 shares issued                          140            140
       Additional paid in capital                    371,338        371,091
       Accumulated deficit                          (305,027)      (294,988)
       Accumulated other comprehensive income          6,350          4,583
       Treasury stock at cost:
            September 30, 2009 --
             333,299 shares; December
             31, 2008 -- 324,794 shares               (1,657)        (1,427)
                                                      ------         ------
            Total EDCI Holdings, Inc.
             Stockholders' Equity                     71,144         79,399
       Noncontrolling interest in
        subsidiary company                            $5,111         $5,205
                                                      ------         ------
            Total Stockholders' Equity                76,255         84,604
                                                      ------         ------
    TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY       175,172        192,550
                                                     =======        =======

                   EDCI HOLDINGS, INC. AND SUBSIDIARIES
                   CONSOLIDATED STATEMENTS OF OPERATIONS
                                (Unaudited)

                                                     Three Months Ended
                                                        September 30,
                                                        2009     2008
                                                        ----     ----
                                                   (In thousands, except
                                                     per share amounts)
    REVENUES:
       Product revenues                              $30,849  $43,634
       Service revenues                               11,933   14,583
                                                      ------   ------
          Total Revenues                              42,782   58,217
                                                      ------   ------
    COST OF REVENUES:
       Cost of product revenues                       27,467   37,888
       Cost of service revenues                        8,340    9,558
                                                       -----    -----
          Total Cost of Revenues                      35,807   47,446
                                                      ------   ------
    GROSS PROFIT                                       6,975   10,771
    OPERATING EXPENSES:
       Selling, general and administrative expense     7,526    8,243
       Amortization of intangible assets                   -    1,598
                                                       -----    -----
          Total Operating Expenses                     7,526    9,841
                                                       -----    -----
    OPERATING INCOME (LOSS)                             (551)     930
                                                        ----      ---
    OTHER INCOME (EXPENSE):
       Interest income                                    47      846
       Interest expense                                 (161)    (501)
       Gain on currency swap, net                          -    3,474
       Gain (loss) on currency transaction, net           50   (1,371)
       Other expense, net                                (32)    (351)
                                                         ---     ----
         Total Other Income (Expense)                    (96)   2,097
                                                         ---    -----
    INCOME (LOSS) FROM CONTINUING OPERATIONS,
     BEFORE INCOME TAXES                                (647)   3,027
       Income tax provision                              722      485
                                                         ---      ---
    INCOME (LOSS) FROM CONTINUING OPERATIONS          (1,369)   2,542
    DISCONTINUED OPERATIONS, NET OF TAX:
      INCOME (LOSS) FROM DISCONTINUED OPERATIONS          56   (1,491)
       GAIN ON SALE OF EDC U.S. OPERATIONS               409        -
                                                         ---        -
    NET INCOME (LOSS)                                  $(904)  $1,051
       Noncontrolling interest in subsidiary company      (4)      39
                                                          --       --
    NET INCOME (LOSS) ATTRIBUTABLE TO COMMON
     STOCKHOLDERS                                      $(900)  $1,012
                                                       =====   ======
    INCOME (LOSS) PER WEIGHTED
     AVERAGE COMMON SHARE (1):
       Income (loss) from continuing operations
        attributable to common stockholders           $(0.20)   $0.37
       Discontinued operations attributable to
        common stockholders:
            Income (loss) from discontinued
             operations attributable to common
             stockholders                               0.01    (0.22)
            Gain on sale of EDC U.S. Operations         0.06        -
                                                        ----    -----
       Net income (loss) per weighted average
        common share                                  $(0.13)   $0.15
                                                      ======    =====
    INCOME (LOSS) PER WEIGHTED AVERAGE DILUTED
     COMMON SHARE (1):                                     -        -
       Income (loss) from continuing operations
        attributable to common stockholders           $(0.20)   $0.37
       Discontinued operations attributable to
        common stockholders:
            Income (loss) from discontinued
             operations attributable to common
             stockholders                               0.01    (0.22)
            Gain on sale of EDC U.S. Operations         0.06        -
                                                        ----    -----
       Net income (loss) per weighted average
        common share                                  $(0.13)   $0.15
                                                      ======    =====

    AMOUNTS ATTRIBUTABLE TO EDCI HOLDINGS, INC.
     COMMON STOCKHOLDERS
       Income (loss) from continuing operations      $(1,359)  $2,536
       Income (loss) from discontinued operations         50   (1,524)
       Gain on sale of EDC U.S. Operations               409        -
                                                         ---    -----
       Net Income (Loss)                               $(900)  $1,012
                                                       =====   ======

    (1)  Income (loss) per weighted average common share amounts are rounded
         to the nearest $.01; therefore, such rounding may impact
         individual amounts presented.

                      EDCI HOLDINGS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                    (Unaudited)

                                                            Nine Months Ended
                                                               September 30,
                                                              2009      2008
                                                              ----      ----
                                                         (In thousands, except
                                                           per share amounts)
    REVENUES:
       Product revenues                                     $89,201  $128,475
       Service revenues                                      32,248    44,133
                                                             ------    ------
          Total Revenues                                    121,449   172,608
                                                            -------   -------
    COST OF REVENUES:
       Cost of product revenues                              79,375   111,268
       Cost of service revenues                              23,788    30,003
                                                             ------    ------
          Total Cost of Revenues                            103,163   141,271
                                                            -------   -------
    GROSS PROFIT                                             18,286    31,337
    OPERATING EXPENSES:
       Selling, general and administrative expense           21,217    27,049
       Severance costs for UK facility closure                7,152         -
       Amortization of intangible assets                          -     4,843
                                                             ------     -----
          Total Operating Expenses                           28,369    31,892
                                                             ------    ------
    OPERATING LOSS                                          (10,083)     (555)
                                                            -------      ----
    OTHER INCOME (EXPENSE):
       Interest income                                          310     2,893
       Interest expense                                        (569)   (1,759)
       Gain on currency swap, net                             2,111       881
       Gain (loss) on currency transaction, net                 537    (1,965)
       Other expense, net                                       (18)     (343)
                                                                ---      ----
         Total Other Income (Expense)                         2,371      (293)
                                                              -----      ----
    LOSS FROM CONTINUING OPERATIONS, BEFORE INCOME TAXES     (7,712)     (848)
       Income tax provision                                     414       853
                                                                ---       ---
    LOSS FROM CONTINUING OPERATIONS                          (8,126)   (1,701)
    DISCONTINUED OPERATIONS, NET OF TAX:
       LOSS FROM DISCONTINUED OPERATIONS                     (2,596)   (9,194)
       GAIN ON SALE OF EDC U.S. OPERATIONS                      589         -
                                                                ---     -----
    NET LOSS                                               $(10,133) $(10,895)
       Noncontrolling interest in subsidiary company            (94)     (203)
                                                                ---      ----
    NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS           $(10,039) $(10,692)
                                                           ========  ========
    LOSS PER WEIGHTED AVERAGE COMMON SHARE (1):
       Loss from continuing operations attributable to
        common stockholders                                  $(1.20)   $(0.24)
       Discontinued operations attributable to
        common stockholders:
            Loss from discontinued operations attributable
             to common stockholders                           (0.38)    (1.31)
            Gain on sale of EDC U.S. Operations                0.08         -
                                                               ----     -----
       Net loss per weighted average common share            $(1.50)   $(1.55)
                                                             ======    ======
    LOSS PER WEIGHTED AVERAGE DILUTED COMMON SHARE (1):           -         -
       Loss from continuing operations attributable to
        common stockholders                                  $(1.20)   $(0.24)
       Discontinued operations attributable to
        common stockholders:
            Loss from discontinued operations attributable
             to common stockholders                           (0.38)    (1.31)
            Gain on sale of EDC U.S. Operations                0.08         -
                                                               ----     -----
       Net loss per weighted average common share            $(1.50)   $(1.55)
                                                             ======    ======

    AMOUNTS ATTRIBUTABLE TO EDCI HOLDINGS, INC.
     COMMON STOCKHOLDERS
       Loss from continuing operations                      $(8,078)  $(1,641)
       Loss from discontinued operations                     (2,550)   (9,051)
       Gain on sale of EDC U.S. Operations                      589         -
                                                                ---     -----
       Net Loss                                            $(10,039) $(10,692)
                                                           ========  ========

    (1)  Income (loss) per weighted average common share amounts are rounded
         to the nearest $.01; therefore, such rounding may impact
         individual amounts presented.

                                EDCI Holdings, Inc.
                    Summary Schedule of Non-GAAP Financial Data
                             (In thousands) Unaudited

    The following summary of financial data shows the reconciliation of loss
    from continuing operations, as determined in accordance with accounting
    principles generally accepted in the United States (GAAP), to income
    (loss) from continuing operations and earnings before interest, taxes, and
    depreciation and amortization from continuing operations.

    EBITDA is income (loss) from continuing operations before interest expense
    (income), net, income taxes, and depreciation and amortization and is
    presented because the Company believes that such information is commonly
    used in the entertainment industry as one measure of a company's operating
    performance. EBITDA from continuing operations is not determined in
    accordance with generally accepted accounting principles, it is not
    indicative of cash provided by operating activities, should not be used as
    a measure of operating income and cash flows from operations as determined
    under GAAP, and should not be considered in isolation or as an alternative
    to, or to be more meaningful than, measures of performance determined in
    accordance with GAAP.  EBITDA, as calculated by the Company, may not be
    comparable to similarly titled measures reported by other companies and
    could be misleading unless all companies and analysts calculated EBITDA in
    the same manner.

                                                                YTD     YTD
                                              3Q2009  3Q2008  3Q2009  3Q2008
                                              ------  ------  ------  ------
    Income (loss) from continuing
     operations                               (1,369)  2,542  (8,126) (1,701)

    Income tax provision                         722     485     414     853
    Gain on currency swap, net                     -  (3,474) (2,111)   (881)
    (Gain) loss on currency transaction, net     (50)  1,371    (537)  1,965
    Interest (income) expense, net               114    (345)    259  (1,134)
    Depreciation and amortization              1,670   3,668   4,874  11,176
    Other expense, net                            32     351      18     343
                                                  --     ---      --     ---
    EBITDA from continuing operations          1,119   4,598  (5,209) 10,621
                                               =====   =====  ======  ======

SOURCE EDCI Holdings, Inc.


Source: newswire