Vancouver: The worldwide television production lull has dragged down revenues at Vancouver-based Mainframe Entertainment by 34%, according to its year-end financial report.

Revenues for fiscal 2003 (ended March 31) were $14.3 million, compared to fiscal 2002 revenues of $21.8 million.

In fiscal 2003, Mainframe delivered 10 television episodes (eight for Spider-Man and two for Hot Wheels), one 44-minute television special based on the Scary Godmother character and the second Barbie direct-to-video feature, Barbie as Rapunzel. A year earlier, Mainframe had done 33 television episodes and one direct-to-video production.

Despite the volume slowdown, however, Mainframe made some progress stemming losses. Average monthly overhead costs, for instance, have been cut by 35%, through a 50% reduction in leased space, layoffs and a company-wide pay cut.

Losses of $18.9 million ($1.10 per share) in fiscal 2002 were reduced to $7.5 million ($0.43 per share) in fiscal 2003.

‘The company is dedicated to the growth of its proprietary brands, continuing its excellent service work with current and future clients, and growing new revenue streams in electronic gaming, branding, commercials and its burgeoning motion-capture capability,’ says CEO Rick Mischel. ‘All this growth and development will be managed carefully and conservatively, as we continue to control costs and cautiously invest for the future.’

Mischel points to continuing relationships with Mattel, Sony Pictures Television and gaming companies such as Electronic Arts Vancouver and Next Level Entertainment as positive steps towards the company’s return to profitability.

Meanwhile, Mainframe has restructured a $6.1-million convertible debenture with Imax Corporation. The new deal allows Mainframe to settle the debt through scheduled payments. Imax is retaining its equity investment in Mainframe and the two companies continue to work together on co-owned projects such as Gulliver’s Travels.

If it satisfies the payment obligations, Mainframe can reduce the number of Imax representatives on its board and terminate the debenture on its June 30, 2004 maturity date.

On Aug. 25, shares closed the Toronto Stock Exchange at $0.32. The year high is $0.52 and the year low is $0.16.

-www.mainframe.ca