COMPANY CONTACTS:
AMERICAN VANTAGE COMPANIES
RONALD J. TASSINARI, PRESIDENT AND CHIEF EXECUTIVE OFFICER
702.227.9800
AMERICAN VANTAGE MEDIA ACQUIRES WELLSPRING MEDIA, INC.
Leading Specialty Distributor of World and American Independent Cinema and
Health/Wellness Programming with a 1,000 Title Library Becomes Part
of American Vantage Media's Growing Entertainment Platform.
LAS VEGAS, NEVADA AND NEW YORK, NY - February 4, 2004 --- American Vantage Media
Corporation ("AVMC"), a wholly-owned subsidiary of American Vantage Companies
(NASDAQ:AVCS), today announced that it acquired Wellspring Media, Inc.
("Wellspring"), a leading distributor of world cinema and wellness programming.
Wellspring's assets include a 1,000 title library distributed via its
Theatrical, Home Video/DVD, Worldwide Sales and Direct Response
("www.artfilmcollection.com") and ("www.videocollection.com") units.
AVCS is an emerging-growth entertainment and media company, which recently
acquired Hypnotic Media, Inc., the producer of FOX's hit TV series, "The O.C."
and "Terry Tate, Office Linebacker" for Reebok.
For calendar year 2003, Wellspring had audited revenues of $21.1 million and
EBITDA of $4.3 million. Wellspring's 2003 net loss of $729,000 includes a
one-time inventory obsolescence write-down related to its VHS films of $575,000.
At December 31, 2003, Wellspring's programming and film rights library had an
audited net book value of $10.5 million. This film library was recently
independently appraised at a valuation of approximately $14.0 million.
Wellspring employs a staff of 50 people with offices in New York and Los
Angeles. Current senior management will remain in place, with Al Cattabiani
continuing in his role as President.
In consideration for the transaction, Wellspring's shareholders and employees
were paid $8.0 million, of which $4.0 million was paid in cash at closing and
the balance in two-year notes.
Stephen K. Bannon, Vice Chairman of American Vantage Companies and Head of the
Board of Directors' Acquisition Committee said, "Wellspring provides us with
three great assets - a first class management team, a 1,000 film/DVD library and
a worldwide distribution apparatus. Coupled with our recent acquisition of
Hypnotic in TV/film and branded content production and YaYa in interactive
gaming, we have the nucleus for an extraordinary company."
"Wellspring will be very aggressive in growing the business with our new
partners at American Vantage," said Al Cattabiani. "We see many opportunities to
build on our core distribution operation, expand our library and cultivate new
cinematic talent. We're eager to add the exciting new elements our new corporate
siblings bring - from branded content to original program development to new
technologies. This will enable us to accelerate our recent progress in
strengthening our management team and distribution channels. We can't wait to
show the market what this combination will do."
Past and upcoming Wellspring theatrical releases include critically acclaimed
films such as Alexander Sokurov's Father and Son and Russian Ark, hailed by
Roger Ebert as "one of the most astonishing films ever made.," Akira Kurosawa's
masterpiece Ran, The Circle and Crimson Gold by Jafar Panahi, Girlhood by Liz
Garbus, In My Skin by Marina de Van, Carnage by Delphine Gleize, Friday Night,
by Claire Denis, Madame Sata by Karim Ainouz, Marooned in Iraq by Bahman
Ghobadi, The Films of Rainer Werner Fassbinder, Yi Yi by Edward Yang, Les
Destinees by Olivier Assayas, Under the Sand by Francois Ozon, Adventures of
Felix by Olivier Ducastel and Jacques Martineau, Pola X and Mauvais Sang by Leos
Carax, Humanite and 29 Palms by Bruno Dumont, What Time is it There? by Tsai
Ming-liang, Ran by Akira Kurosawa and Notorious C.H.O. by Lorene Machado.
Together, the Wellspring Home Video and Worldwide Sales libraries boast 1000
titles including major works by Francois Truffaut, Jean Luc Godard, Eric Rohmer,
Luchino Visconti, Rainer Werner Fassbinder, Hou Hsiao-Hsien, The Taviani
Brothers, Peter Greenaway, Jacques Demy, Akira Kurosawa, Pedro Almodovar,
Michelangelo Antonioni, Lina Wertmuller and more. In addition to distributing
its theatrical arthouse releases on video/DVD, Wellspring's home video unit
focuses on enlightening health and wellness programming including Joseph
Campbell's The Power of Myth, and titles featuring the work of Deepak Chopra,
Dr. Andrew Weill, Dr. Paul Lam, Alan Watts and Caroline Myss.
Ronald J. Tassinari, Chairman and CEO of AVCS said, "During the last forty days
we have set the direction for our 2004 growth plan. We have profitably monetized
our last real estate asset, acquired Hypnotic Media, Inc., and have completed
the acquisition of Wellspring. We are now able to leverage our company through
internal growth, as well as continuing to pursue external growth through
additional acquisitions, strategic partnerships and synergistic joint ventures."
American Vantage Media Corporation was represented in the transaction by its
legal counsel, Jack Becker with Snow Becker Krauss, P.C. (New York, NY) and Alan
Grodin with Weisman Wolff Bergman Coleman Grodin & Evall, LLP (Beverly Hills,
CA) and its financial advisor, Steves Rodriguez with London & Co., LLP (Los
Angeles, CA). Wellspring was represented in the transaction by Jefferies & Co.
(New York, NY) and its legal counsel, Carl Koener with Koerner Silberberg &
Weiner (New York, NY).
This press release contains non-GAAP financial measures within the meaning of
Regulation G promulgated by the Securities and Exchange Commission. Included at
the end of this press release is a reconciliation of these non-GAAP financial
measures to their most directly comparable financial measures calculated in
accordance with generally accepted accounting principles as well as certain
Regulation G disclosures.
Certain statements in this press release are "forward-looking statements" within
the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. Such forward-looking statements may be
identified by words such as "anticipates," "believes," "can," "continue,"
"could," "estimates," "expects," "intends," "may," "plans," "potential,"
"predicts," "should," or "will" or the negative of these terms or other
comparable terminology. Such statements and all phases of American Vantage
Companies' operations are subject to known and unknown risks, uncertainties and
other factors, including overall economic conditions and other factors and
uncertainties as are identified in American Vantage Companies' Form 10-KSB for
the year ended July 31, 2003, Form 10-QSB for the quarter ended October 31, 2003
and Form 8-K (Date of Report: December 31, 2003). Readers are cautioned not to
place undue reliance on these forward-looking statements, which speak only as of
the date hereof. American Vantage Companies' actual results, levels of activity,
performance or achievements may be materially different from any future results,
levels of activity, performance or achievements expressed or implied by these
forward-looking statements. The Company undertakes no obligation to update the
forward-looking statements in this press release.
The following table reconciles Wellspring's EBITDA to net loss:
Year Ended
December 31, 2003
-----------------
Net loss $ (729,000)
Add:
Amortization of programming rights library 4,709,000
Interest expense 223,000
Depreciation 85,000
Provision for income taxes 23,000
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EBITDA $ 4,311,000
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