Behaviour shareholders approve debt and restructuring plan, new name for company

After four straight quarters of losses and a painful foray into digital media production, Behaviour Communications Inc has a new name, a new owner and a new business plan that shareholders hope will put the Montreal-based company back in the black. At its annual meeting on May 26, shareholders approved a debt and restructuring plan for the seven-year-old company that will see its overall debt reduced by $18.9 million, including the forgiveness of about US$2.3 million. They also agreed to a plan to turn US$5.7 million in promissory notes into Class B voting shares, with plans to issue another US$5.5 million in shares. Behaviour'sBoard of DirectorsMark DamonChair/CEOMatthew CarsonVP Finance, CFODavid ReckziegelPresident, Seville Entertainment IncGary TregaskisConsultant (U.K.)Claude LemayCEO, Alis Technologies IncLuc BousquetPresident, BHVR CommunicationsFrank FerlainoPresident, Cosmair Canada IncAs part of the restructuring, Behaviour's name will change to MDP Worldwide Entertainment Inc/Divertissements MDP Worldwide Inc, to reflect Behaviour's recent sale to MDP Worldwide, a Los Angeles movie-sales company owned and operated by Hollywood veteran Mark Damon. Damon, who's been a director on Behaviour's board since 1998, has taken over as the company's new chair and CEO. On May 26, Behaviour also reported its first quarterly profit in more than a year, bolstering investor confidence that the worst is over for the small film and television production company. At $343,000, the company's second quarter net income wasn't huge, but it was a significant improvement over the $2.8 million loss it reported for the same quarter last year. Revenue from continuing operations for the second quarter was $5.5 million, compared to $9.3 million last year. In 2Q 1999, the company lost $ 2.8 million from its Canadian distribution and new media operations, consisting of its digital studio and interactive games operations. Two years ago, under the leadership of former chair Richard Szalwinski, the company had ambitious plans to expand its film and distribution business, and migrate into digital media. Those plans began to fall apart early last year, and by November, Behaviour had sold its interactive games division. A month later, it sold its Canadian distribution operations. In May, the company finalized the $850,000 sale of its digital studio in Montreal, signaling the final chapter in the independent film company's move into new media. The studio's new owner is Tube Studios Inc, a digital animation and visual effects firm based in Montreal (CNM, May 4/00). Behaviour is now focusing on film production and licensing. A new corporate strategy Behaviour executives are implementing a new corporate strategy that they hope will return the company to profitability within two years. The plan includes developing, producing, financing and distributing two to four studio-level films each year, and negotiating agreements with major U.S. studios and international distributors to open new North American and foreign markets for its feature films. The new corporation will also see the company seek external sources of film financing for bigger-budget films. For individual films, it may obtain financing through a combination of domestic and international licensing agreements, co-production and tax subsidies, and other forms of financing. The plan also includes developing ongoing relationships with talented and creative studio producers, directors and other high profile filmmakers.

Behaviour shareholders approve debt and restructuring plan, new name for company

Broadcast | June 8, 2000

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