Montreal: Behaviour Communications chairman Richard Szalwinski says first-quarter results in ’99 ‘indicate this company’s filmed entertainment activities can generate profits, with adequate management focus.’

Whether or not the financial results – net earnings of $604,000 on revenues of $36.2 million, almost double the revenues from the corresponding period last year – point to a sustainable turnaround, analysts have at least responded positively to news Behaviour had ceased development on its Web Channel (Scroll.Behaviour), laying off 35 new-media employees, effective Feb. 11.

ebitda increased to $5.2 million, up from $1.5 million last year, while ebitda for the new-media segment was negative $1.3 million.

The increase in revenues for the three-month period ending Dec. 31, 1998 is primarily attributable to the delivery of the Filmline International feature Eye of the Beholder and Behaviour Worldwide’s licensing of u.s. distribution rights for both Eye and Blackout, starring Dennis Hopper and Claudia Schiffer.

Behaviour Distribution generated a small profit in the first quarter – following a $3 million write-off in fiscal ’98 – based mainly on repertory box-office receipts for Monument Avenue, the grunge-conspiracy doc Kurt & Courtney, Lawn Dogs, Dancing at Lughnasa and the Cannes Film Festival winner Happiness.

Behaviour says two of three payments of us$1 million each in its acquisition schedule of international licensing division Behaviour Worldwide have been converted to 4,715,000 class b subordinate shares. The other payment, us$1.5 million, due Jan. 15, has been rescheduled to April 9, or an earlier date if the company obtains a new operating credit facility.

Share consolidation

At its agm in Montreal March 22, Behaviour will ask shareholders to approve a one-for-eight class a multiple-voting and class b share consolidation.

If the stock consolidation is approved, the trading value of Behaviour shares will become a multiple of eight. Vancouver-based Lions Gate did something similar last fall with a one-for-two conversion.

The point being, says corporate development vp Claude Thibault, the company feels the current ‘penny stock’ trading level of around $0.55 a share is misrepresentative in the longer term, and a higher share price will permit investors to benefit from margins and make selling easier for reps and traders.

‘There is no concrete change whatsoever,’ says Thibault. ‘What we are talking about is the subtleties of trading dynamics. On a sustainable basis we think our operations, as we speak, should be profitable.’

Talk to Brousseau

On the Canadian distribution and acquisition front, many of former vp Andy Myers’ duties have been assumed by Pierre Brousseau, Montreal-based senior vp distribution.

Behaviour Distribution staff now numbers 19, half in Montreal, half in Toronto. ‘Instead of dialing 416, they [producers] will dial 514 and that’s the end of it,’ says a rather busy Brousseau.

Brousseau says he’s talking to four producers in Toronto and three in Vancouver on potential acquisitions and prebuys. ‘I used to give answers [to producers] within 48 hours, now I’ve got a backlog of 10 days. I have to devote time to building relationships and to ensure new product is in the pipeline. Without that there’s nothing,’ he says.

Deal with Telescene

Brousseau says he’s pleased to be doing new business with Telescene Film Group.

Behaviour will distribute a new tv movie from producer Robin Spry, You Make Me Nervous, a comedy coproduction with New Zealand. Sam Wendel, a former exec with Telefilm Canada in l.a., is the screenwriter. Ian Mune is slated to direct.

The acting manager at the Toronto office is Brad Pelman, vp home video.

About 75% of Behaviour’s equity is controlled by Szalwinski through holding company BHVR Communications. He is also chairman of software-editing and visual-effects manufacturer Discreet Logic.