Cinedigm Digital Cinema Corp. (NASDAQ: CIDM) today announced financial results for the first quarter fiscal 2014 which ended June 30, 2013.

Highlights Include:

• First quarter consolidated revenues were $19.6 million, compared with $20.9 million in the year ago quarter;
• First quarter non-deployment revenues were $7.8 million, flat with the year ago quarter;
• Entertainment revenues increased by 18% year-over-year to $3.3 million;
• First quarter consolidated EBITDA was $9.0 million, compared with $13.5 million in the year ago quarter;
• First quarter non-deployment EBITDA was $(2.4) million, compared with $0.8 million in the year ago quarter, including approximately $2.6 million of upfront expenses related to advances and marketing for our movie release slate;
• Cinedigm now manages 12,349 VPF screens at 1,342 theatres with 340 exhibitor partners; and
• Cinedigm has acquired 18 independent films to date. Five films were released in FY13, five more released in the 2014 first fiscal quarter and the company has plans to release seven more by the end of Fiscal 2014.

“From a financial results standpoint, it is important to note that we are where we planned to be this quarter and are on track to perform well the rest of the year,” said Chris McGurk, Chairman and CEO. “We continue to invest in our core businesses to take advantage of the huge growth opportunities the digital revolution has created. New platforms, distribution outlets and viewing devices are driving an ever-increasing demand by consumers for film and episodic content. Through our business investments, Cinedigm is moving aggressively to take advantage of the growth opportunities generated by this dynamic change in consumer viewing behavior. We plan to harvest the financial rewards of these investments in the coming months and years.”

“We are right in the middle of our budgeted ramp up. Since March, we have released 10 movies theatrically, acquired 676 titles for our library and expensed the upfront investments in related marketing and distribution costs. In the fiscal first quarter alone, Cinedigm incurred $2.6 million of direct theatrical acquisition, marketing and releasing costs. However, our financials reflect little of the significant revenues generated by these releases as they reach the profitable home entertainment markets,” added Adam Mizel, Chief Operating Officer and CFO. “We already have secured VOD placements, DVD pre-orders and SVOD agreements for much of our content that will contribute to revenues and EBITDA beginning late in Q2 and most directly in the second half of our fiscal year. As we have previously stated, we expect these distribution deals to drive a more than doubling of our entertainment revenues this year.”

Consolidated revenues (including Phase 1 DC and Phase 2 DC subsidiaries) in the first quarter were $19.6 million, a decrease of $1.3 million versus the prior year period. Growth in revenues in the Entertainment group was more than offset by decreases in Deployment and Services revenues. Phase 1 and Phase 2 Deployment revenues declined by $1.2 million for the three months ended June 30, 2013 due to four fewer releases by studios in the current fiscal quarter as compared to the prior year fiscal quarter.

First quarter non-deployment revenues (excluding Phase 1 DC and Phase 2 DC subsidiaries) were $7.8 million, flat with the year ago quarter. Factors that affected this year’s results include lower results in Software reflecting (i) the delay of installations by several international exhibitors to later this fiscal year; (ii) an elongated go-live testing and conversion by a studio customer delaying revenue recognition into the fiscal second or third quarter; and (iii) recently closed new software sales expected to go-live later this fiscal year. These declines were offset by 18% year-over-year revenue growth in Entertainment, attributable to strong organic growth in distribution fees earned from (i) recent acquisitions of distribution rights of home entertainment titles; (ii) expanded monetization of our library of over 20,000 movies and television episodes; and (iii) revenues from theatrical releases that have reached the home entertainment window.

Consolidated Adjusted EBITDA in the first quarter was $9.0 million, a decrease of $4.5 million versus the prior year quarter. Adjusted EBITDA from non-deployment businesses was a loss of $2.4 million during the quarter, declining from a profit of $0.8 million in the year ago quarter. This decline was primarily driven by (i) the impact of the $1.2 million reduction in deployment VPF revenues and (ii) the expensing of approximately $2.6 million of content distribution costs in advance of earning ancillary home entertainment revenues. In accordance with Generally Accepted Accounting Principles (GAAP), Cinedigm must recognize its upfront content acquisition and marketing expenses at the time of a theatrical release of a movie. Cinedigm expects to recover those expenses and earn fee-based profits over the ensuing 12-36 months from revenues earned on the distribution of the movie in the ancillary home entertainment markets. To date, Cinedigm has released 10 films, with seven more in the pipeline for the remainder of this fiscal year, and the financial results do not yet reflect the full revenues associated with those releases.

After adjusting for non-recurring items such as merger and acquisition expenses and benefit from income taxes during the prior year fiscal quarter, first quarter loss from continuing operations was $7.1 million or $0.15 per fully diluted share, versus a loss of $3.6 million, or $0.08 per fully diluted share in the prior year period.

Adjusted EBITDA is defined by the Company for the periods presented to be earnings before interest, taxes, depreciation and amortization, other income, net, stock-based compensation, merger and acquisition costs, and certain other items. Pursuant to the requirements of Regulation G, the Company has provided a reconciliation in the tables attached to this release of Adjusted EBITDA to U.S. GAAP net income (loss). Adjusted EBITDA is not a measurement of financial performance under accounting principles generally accepted in the United States of America and may not be comparable to other similarly titled measures of other companies. The Company calculated and communicated Adjusted EBITDA in the tables because the Company's management believes it is of importance to investors and lenders by providing additional information with respect to the performance of its fundamental business activities. Management presents adjusted EBITDA because it believes that adjusted EBITDA is a useful supplement to net loss as an indicator of operating performance. Management also believes that adjusted EBITDA is an industry-wide financial measure that is useful both to management and investors when evaluating the Company's performance and comparing our performance with the performance of our competitors. Management also uses adjusted EBITDA for planning purposes, as well as to evaluate the Company's performance because it believes that adjusted EBITDA more accurately reflects the Company's results, as it excludes certain items, such as stock-based compensation charges, that management believes are not indicative of the Company's operating performance. The Company believes that adjusted EBITDA is a performance measure and not a liquidity measure. Adjusted EBITDA should not be considered as an alternative to operating or net loss as an indicator of performance or as an alternative to cash flows from operating activities as an indicator of cash flows, in each case as determined in accordance with accounting principles generally accepted in the United States of America, or as a measure of liquidity. In addition, EBITDA does not take into account changes in certain assets and liabilities as well as interest and income taxes that can affect cash flows. The Company's calculation of Adjusted EBITDA may or may not be consistent with the calculation of this measure by other companies in the same industry. Investors should not view Adjusted EBITDA as an alternative to the U.S. GAAP operating measure of net income (loss). In addition, Adjusted EBITDA does not take into account changes in certain assets and liabilities as well as interest and income taxes that can affect cash flows. Management does not intend the presentation of these non-GAAP measures to be considered in isolation or as a substitute for results prepared in accordance with U.S. GAAP. These non-GAAP measures should be read only in conjunction with the Company's consolidated financial statements prepared in accordance with U.S. GAAP.

Conference Call

Cinedigm will host a conference call to discuss its financial results at 4:30 p.m. EDT on August 13, 2013. To participate in the conference call, please dial (877) 754-5303 or for international callers (678) 894-3030 at least five minutes prior to the start of the call. No passcode is required. An audio webcast of the call will be accessible at http://investor.cinedigm.com/events.cfm. To listen to the live webcast, please visit the site prior to the start of the call in order to register, download and install any necessary audio software.

For those unable to participate during the live broadcast, a replay will be available beginning August 13, 2013 at 7:30 p.m. EDT, through August 20, 2013 at 11:59 p.m. EDT. To access the replay, dial (800) 585-8367 (U.S.) or (404) 537-3406 (International) and use passcode: 2910024.

About Cinedigm

Over the past decade, Cinedigm has led the digital distribution revolution that continues to transform the media landscape. In addition to its pioneering role in transitioning movie theatres from traditional film prints to digital distribution, Cinedigm continues to advance worldwide cinema modernization with its suite of software products allowing exhibitors and distributors to manage their newly digital businesses with efficiency, insight and certainty. And, as the leading distributor of independent content in the world, Cinedigm collaborates with producers and the exhibition community with unequalled transparency to market, source, curate and distribute quality content across all digital platforms to targeted and profitable audiences. Cinedigm is proud to distribute many Oscar®-nominated films including THE INVISIBLE WAR, HELL AND BACK AGAIN, GASLAND, WASTE LAND and PARADISE LOST 3: PURGATORY.

Current and upcoming CEG releases include Destin Daniel Cretton’s SHORT TERM 12, Godfrey Reggio’s VISITORS, Penny Lane’s OUR NIXON and Shaul Schwarz’s NARCO CULTURA.

Cinedigm™ and Cinedigm Digital Cinema Corp™ are trademarks of Cinedigm Digital Cinema Corp www.cinedigm.com. [CIDM-F]

Safe Harbor Statement

Investors and readers are cautioned that certain statements contained in this document, as well as some statements in periodic press releases and some oral statements of Cinedigm officials during presentations about Cinedigm, along with Cinedigm's filings with the Securities and Exchange Commission, including Cinedigm's registration statements, quarterly reports on Form 10-Q and annual report on Form 10-K, are "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Act"). Forward-looking statements include statements that are predictive in nature, which depend upon or refer to future events or conditions, which include words such as "expects," "anticipates," "intends," "plans," "could," "might," "believes," "seeks," "estimates" or similar expressions. In addition, any statements concerning future financial performance (including future revenues, earnings or growth rates), ongoing business strategies or prospects, and possible future actions, which may be provided by Cinedigm's management, are also forward-looking statements as defined by the Act. Forward-looking statements are based on current expectations and projections about future events and are subject to various risks, uncertainties and assumptions about Cinedigm, its technology, economic and market factors and the industries in which Cinedigm does business, among other things. These statements are not guarantees of future performance and Cinedigm undertakes no specific obligation or intention to update these statements after the date of this release.

Following is the reconciliation of the Company's consolidated Adjusted EBITDA to consolidated GAAP net loss from continuing operations: