Peace Arch Posts Q3 Loss

TORONTO, July 16: While
revenues were up 25 percent to C$23.5 million for the third quarter of fiscal
2008, Peace Arch Entertainment Group has reported a net loss of C$6.6 million,
as compared with last year’s profit of C$1.1 million.

The loss during the
quarter is largely due to a write-down of investment in film of C$2.5 million,
bad debt expense of C$2.2 million and print and advertising expenditures of
approximately C$900,000.

"We are pleased to
report continued revenue growth even as we complete our restructuring from a
production-oriented company into a leading independent distributor," said John Flock, the president and COO of Peace Arch Entertainment. "Our home
entertainment and television divisions have been profitable throughout the
year, and we expect to keep building those operations through our new U.S. DVD
distribution partnership with ContentFilm and the renewal of our series The
Tudors for a third season on
Showtime. Our motion-picture division has suffered from the poor market
performance of direct-to-DVD titles produced by unaffiliated entities whose
results we are obligated to consolidate, but we have wound down that aspect of
our business since our change in management last November and we expect to see
the positive results of that restructuring beginning in fiscal 2009."

The company reported
motion-picture revenues of C$1.8 million, TV revenues of C$9.8 million and
home-entertainment revenues of C$12 million.

—By Mansha Daswani