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Company Links |
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Major Stock Holders
(Prior To
Offering) |
Name |
Class A |
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Carl Stork |
19.00% |
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Falcon Mezzanine Partners II, LP |
12.20% |
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John C. Textor |
19.10% |
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Michael Bay |
16.20% |
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Rafael Fogel |
12.20% |
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Major Stock Holders
(After Offering) |
Name |
Common Stock |
Class A |
Class B |
Class C |
Class L |
ADS |
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Carl Stork |
0% |
12.90% |
0% |
0% |
0% |
0% |
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Falcon Mezzanine Partners II, LP |
0% |
8.70% |
0% |
0% |
0% |
0% |
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John C. Textor |
0% |
13.00% |
0% |
0% |
0% |
0% |
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Michael Bay |
0% |
11.00% |
0% |
0% |
0% |
0% |
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Rafael Fogel |
0% |
8.70% |
0% |
0% |
0% |
0% |
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Business Environment |
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The visual effects and animation sector has been an integral part of the entertainment industry and continues to evolve rapidly. Rapid growth in the visual effects and animation market is primarily being driven by demand for motion pictures, television commercials and several other forms of entertainment, including entertainment software.
According to an August 2007 report published by Veronis Suhler Stevenson, or VSS (all references to VSS in this prospectus are to the August 2007 report), the aggregate size of the visual advertising industry (comprised of all segments of the $209.8 billion advertising industry, excluding broadcast and satellite radio) in the United States is approximately $188.9 billion in 2006. This market is expected to grow to approximately $245.2 billion in 2011, a 5.4% annually compounded growth rate.
According to VSS, box office and home video spending in the United States generated $35.4 billion in 2006, with an expectation to reach $44.3 billion by 2011, a 4.6% annually compounded growth rate.
Digital content creation software provides users with the tools that enable visual effects and animation production: 2D and 3D modeling; digital video editing; graphics editing and imaging; and audio editing. According to an April 12, 2007 press release from Jon Peddie Research, the digital content creation software market was approximately $3.0 billion globally in 2006 (up 16% from 2005) and is projected to grow at an annually compounded growth rate of 10% to approximately $4.9 billion in 2012.
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Company Strategy |
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A leading visual effects and animation company based in Venice, California. |
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Product/Services Portfolio |
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The Company is traditionally hired by a film studio to provide visual effects and/or animation for an in-process film or a project in the development stage.
The Company is hired by advertising agencies, commercial directors and/or corporate advertisers to provide visual effects and/or animation for all advertising media, including television commercials (and campaigns of related commercials) and online interactive advertising.
The Company produces computer-generated (CG) content for all media in an innovative end-to-end digital production solution.
During the production stage, the Company provides project management, production supervision, field support, data storage, digital asset management, dailies, visual effects and animation supervision, and editorial and color management solutions.
During the digital production stage, the Company provides project management, character creation, performance capture, computer-generated imagery (CGI) modeling, animation, motion capture, matte painting, roto-scoping, tracking, compositing and other forms of 2D and 3D image manipulation.
During the post-production stage, the Company provides editorial, digital intermediate color correction, conforming and mastering solutions.
The Company currently licenses several software products to third parties through its wholly-owned subsidiary. These products are licensed directly by the Company through its own sales force, or indirectly through resellers and outside sales representatives. As of December 31, 2007, the Company has approximately 9,500 licensees of its existing products.
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Investment Analysis |
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Total revenues for the year ended December 31, 2007 were $77.8 million.
Total cost of revenues was $63.0 million for the year ended December 31, 2007.
Total selling, general and administrative expenses were $26.5 million for the year ended December 31, 2007.
Interest expense was $9.0 million for the year ended December 31, 2007.
For the year ended December 31, 2007 interest expense was $2.6 million.
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Income Data |
| Year |
Revenues |
Costs |
Oper Income |
Taxes |
Net Income |
EPS |
| 2005
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49,506,000 |
51,042,000 |
-1,536,000 |
-3,282,000 |
-4,177,000 |
-2.10 |
| 2006
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41,652,000 |
42,317,000 |
-665,000 |
-6,000 |
-1,546,000 |
-0.16 |
| 2007
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77,840,000 |
89,485,000 |
-11,645,000 |
103,000 |
-19,911,000 |
-1.65 |
| *For the period May 13 through December 31, 2006
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Balance Sheet Data
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Year |
Cash |
Acct Recv. |
Inventory |
Total Cur Assets |
Total Cur Liability |
PPE |
Total Assets |
LT Debt |
SH Equity |
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2006 |
20,899,000 |
0.00 |
0.00 |
24,693,000 |
14,523,000 |
8,099,000 |
45,266,000 |
0.00 |
17,743,000 |
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2007 |
19,274,000 |
628,000 |
0.00 |
24,422,000 |
15,518,000 |
13,589,000 |
52,356,000 |
0.00 |
10,582,000 |
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| Cash
Flow Summary
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Year |
Net Cash-Ops |
Net Cash-Inv |
Net Cash-Fin |
Net Change |
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2005 |
-48,000 |
-3,155,000 |
420,000 |
-2,783,000 |
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2006 |
8,304,000 |
7,597,000 |
4,998,000 |
20,899,000 |
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2007 |
-7,228,000 |
-9,582,000 |
15,067,000 |
-1,625,000 |
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*For the period May 13 through December 31, 2006
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- Avoid 
- Value Gap 
- Short-Term Growth
- Long-Term Growth 
- Long-Term Value 