Trimark Holdings announces it expects to post a second-quarter loss relating to specific projects and corporate restructuring; corporate cash flow remains strong

Business Wire, Jan 17, 1996

LOS ANGELES--(BUSINESS WIRE)--Jan. 17, 1996--Trimark Holdings Inc. (NASDAQ/NNM:TMRK) Wednesday announced that it expects to report a loss of approximately $4.5 million for the quarter ended Dec. 31, 1995, primarily due to writedowns following the poor performance of the video acquisitions "Kids" and "Death Machine," a significant reserve taken for the company's interactive CD-ROM game "The Hive" and certain restructuring charges.

"While we are disappointed that the company will report the first quarterly loss in its history," stated Chairman Mark Amin, "the company continues to generate strong cash flow. Trimark has a $25 million credit line with Bank of America and WestLB and no other long-term debt.

"We need to address the rapidly changing realities of the entertainment landscape. The difficulties which the video industry faces from severe competition, cable television and direct broadcast satellite are expected to continue for the foreseeable future.

"The company plans to continue to invest approximately $40 million in the acquisition and production of motion picture product annually. The company is currently seeking to fill a newly created position, President of Production, to oversee all acquisition, development and production operations."

Lucie Guernsey, vice president of WestLB, said: "Unlike other entertainment companies that have waited until they experienced severe cash drains before restructuring, Trimark Holdings has taken pro-active steps to address a rapidly changing marketplace while maintaining a strong cash flow. We are confident in the steps taken by Trimark's management."

The company previously announced that Trimark Interactive shipped more than 120,000 units of the interactive game "The Hive," developed exclusively for Windows `95. The retail sales of "The Hive" have been negatively affected, as have other add-on products made exclusively for Windows `95, by the dramatically smaller-than- projected installed user base of the operating system.

"The Hive" received rave reviews and is one of the best-selling native Windows `95 games, and even though Trimark recognizes Microsoft's continued support for Windows `95 as the PC operating system of the future, the company chooses to take a substantial reserve against returns now based on the slower-than-expected sales of the game.

The company's current slate of motion pictures has more than $20 million of new product including the science-fiction family film "The Warrior of Waverly Street," "Crossworlds," "The Dentist" and "The Pinocchio Syndrome."

Trimark Pictures is a division of Trimark Holdings Inc., a broad-based entertainment company that acquires, produces and distributes motion pictures domestically and internationally under the Trimark Pictures banner; licenses to the broadcast industry under the Trimark Television moniker, to the domestic home video market under the Vidmark Entertainment label and to the interactive market under the Trimark Interactive banner.

CONTACT: Trimark Holdings Inc., Los Angeles

David Bowers or Douglas L. Lowell, 310/314-2000