BURBANK, Calif.--(BUSINESS WIRE)--March 23, 1998--Iwerks
Entertainment, Inc. (NASDAQ/NM:IWRK - news) today began a series of
meetings with the Company's major shareholders in order to
accentuate the strategic and financial benefits of Iwerks' proposed
merger with Showscan Entertainment Inc. (NASDAQ NM:SHOW - news).
The meetings were the first of several to be held this week leading
up to a scheduled shareholder vote on the merger on March 31, 1998.
Iwerks' presentations included summary financial projections for
fiscal year 1999 which were provided to demonstrate the positive
bottom line impact the merger could have in returning the Company
to profitability after several periods of losses.
Iwerks said that Showscan's financial contribution to the merger
would allow the Company to show positive cash flow and earnings
(EBITDA) in 1999. Following are the projections offered by Iwerks.
($$millions except EPS) IWRK Alone IWRK + SHOW SHOW Contrib.
1999 1999 1999
Film license recurring
revenues $ 6.0 $ 12.2 +$ 6.2
EBITDA $ 1.7 $ 7.6 +$ 5.9
EPS $ (0.26) $ 0.02 +$ 0.28
Ending Cash $ 5.5 $ 8.0+ +$ 2.5
Charles Goldwater, CEO and President of Iwerks, said, "The proposed
merger with Showscan provides several strategic benefits, most
notably a combined network of more than 160 simulation theaters and
75 films, cost savings from consolidated operations, and a stronger
base of stable recurring revenues, which will help accelerate
Iwerks' continued expansion into the large format market." He
added, "When consummated, the merger will result in a combined
entity with the largest and most diverse offering in ride
simulation entertainment attractions and software in the world."
Both Iwerks' and Showscan's Board of Directors have unanimously
approved the merger and recommend that shareholders vote in favor
of it. Iwerks' shareholder meeting to vote on the proposed merger
and other matters will be held at 10:00 a.m. local time on March
31, 1998 at Iwerks' offices, 4540 West Valerio Street, Burbank,
California.
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Iwerks Entertainment, Inc. is one of the world's leading providers
and distributors of immersive entertainment attractions such as 2D
and 3D ride simulation, 2D and 3D giant screen theaters, 360-degree
video dance clubs and other attractions. Serving prestigious
entertainment, information and marketing providers, more than 250
Iwerks attractions can be found worldwide at location based
entertainment centers, casinos, resorts, nightclubs, restaurants,
museums, fairs, festivals and more. Visit Iwerks Entertainment on
the Internet at www.iwerks.com.
Forward-Looking Statement Disclosure
With the exception of the historical information, certain matters
discussed herein (including, but not limited to, the anticipated
effect of the Showscan acquisition, the Company's strategic and
operating plans, projected operating results and projected cash
position) are forward looking statements within the meaning of
Section 27A of the Securities Act. Such forward-looking statements
are subject to various risks and uncertainties.
Actual results could differ materially from those currently
anticipated due to a number of factors, including the following:
(i) the Company's ability to effectively integrate the combined
companies' operations, achieve anticipated cost savings, maintain
and grow recurring revenues and manage the resulting larger
operations, (ii) the Company's performance under its existing
contracts and its ability to achieve future contracts, (iii) the
Company's ability to generate future revenues, costs of sales, the
ability of the Company to maintain sales prices at levels that
maintain gross margins, the level of selling, general and
administrative expenses, (iv) the success of the Company's film
licensing, distribution and owned and operated strategies, (v) the
Company's ability to secure additional sponsors for its Reactors or
alternative sources of revenues, (vi) the success of the Company's
film software, (vii) general economic conditions in the United
States and the Company's international markets, and (viii) the
other factors discussed under the caption, 'Risk Factors,' in the
Company's Proxy Statement filed with the Securities and Exchange
Commission in connection with the Showscan merger.
The Company does not ordinarily make projections of future
operating performance and undertakes no obligation to publicly
release the result of any revisions to the projections or any other
forward looking information included herein that may be made to
reflect any future events or circumstances.
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Contact:
BSMG Worldwide
Joseph Kessler, 310/442-2532
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