In this report we take a look at the activities and game plans of Canada’s public production companies.

In this report:

Alliance p. 40

Atlantis p. 42

Cinar p. 39

Coscient p. 40

Devine p. 42

Greenlight p. 43

Keystone p. 43

Malofilm p. 37

Nelvana p. 38

Paragon p. 40

In the first three months of fiscal 1996 (ended Oct. 31), Vancouver-based International Keystone Entertainment recorded a 68% drop in revenue and a loss of $357,000 (or three cents per share).

The Vancouver-based production, distribution and music company ended the first quarter with $855,140 in revenue compared to $2.7 million posted a year earlier.

Ian Fodie, financial controller for Keystone and new on the job, declines specific comment on the company’s performance, saying only that Keystone is about to ‘consolidate its position’ and that it will remain in the entertainment business. Citing the company’s desire to remain low profile – a strategy that extended through Keystone’s agm on March 4 – Fodie says he prefers to let the public documents speak for themselves.

The recent first-quarter drop in revenue is exacerbated by the sales success of the first quarter of 1994 when revenues were propelled by previously distributed films. The company expects revenues to pick up through the subsequent quarters of 1996 based on performances at the American, Cannes and Milan film markets.

About 95% of the company’s revenues come from production and distribution, and the balance comes from its money-losing music division.

A clue to Keystone’s coming consolidation may lie in the company’s 1995 annual report, which outlines the competitive nature of the direct-to-video industry – Keystone’s staple. That report talks about declining unit sales in the video industry and the growing importance and expense of a theatrical release for a successful video title.

Some proceeds from Keystone’s $4 million initial public offering in November 1994 went to complete low-budget, star-driven and action-packed features such as Malicious starring Molly Ringwald and Crash starring Michael Biehn.

Fiscal 1995 also marked Keystone’s first theatrical release with Bulletproof Heart, which played in 54 u.s. cities for six weeks before heading to the video shelves. The film features actors Anthony LePaglia and Mimi Rogers.

In fiscal 1995 (ended July 31), Keystone’s earnings were $1.1 million (or 21 cents per share) on revenues of $10.5 million. Comparable tallies for 1994 show that Keystone lost $417,000 (or 22 cents per share) on sales of $3 million.

Other film projects include Underworld, Wounded, A Clean Kill and Air Bud, which are expected to complete or begin production in fiscal 1996. IE