Public Enemy Multimedia Reports 2009 Third Quarter Results
CHICAGO, Ill., October 18, 2009 – Public Enemy Multimedia (NYSE: PEM), a publicly-traded, privately-controlled integrated media conglomerate (focusing in television, Internet, film, music and professional wrestling live events) that serves as the parent company to Lords of Pain Wrestling (LPW), today announced financial results for its third quarter ending September 30, 2009 at its shareholders conference. Revenues totaled $138.8 million as compared to $16.9 million in the 2008 third quarter. Operating income was $25.2 million as compared to $19.2 million in the prior year quarter. Net income totaled $18.6 million compared to $8.4 million in the prior year quarter, while total operating costs totaled $13.2 million as compared to $10.6 million prior.
“Certainly, LPW has far-outperformed the expectations that were set at this time last year, more than doubling operating income with a 63% rise”, stated D. Hammond Samuels, Chief Executive Officer. “2008 was a challenging year for LPW, but with the proper management and utilized strategy, our work to improve cash flow and operating efficiently resulted in a dramatic increase in profit margins that has more than offset the economic downturn and adverse consumer trends.
“We are very proud to make this announcement, especially considering the economic climate one year ago. With Public Enemy Multimedia’s resources fully backing LPW, our fanbase is positively responding to LPW programming, with merchandise sales rising due to the introduction of toys, video games, entrance videos and music. In addition, fans are responding to rising talents such as Ultramarcus, Steve Monroe and the Cash Flo, while also cheering for classic superstars like SoL, Phantom Lord, and Krimson Mask. The success of LPW during America’s worst financial situation since the Great Depression shows to me that we are listening to our audience.”
In Q3 2008, the company mistakenly borrowed from high-interest investment banks, leading to a downward spiral of net revenue. After the Altered Reality IV pay-per-view, the credit problems slaughtered the promotion to the brink of bankruptcy. In dire economic straights left in the departure of previous management, the Board of Directors turned to the quick-thinking Samuels as its CEO, who later bought the company with the backing of PEM. With his business expertise, Samuels corrected past mistakes, shored up company profits and most importantly - restored the reputation of LPW.
“We must be smart with our cash flow so that LPW does not fall into the trap it did under previous ownership. We fully believe that the strategic decisions we have made, and our ongoing commitment to manage wrestler salaries and operating costs will be the map to continued success. We know that cutting the salaries of such staple LPW stars like Wevv Mang, The Rabbi, and Jonathan Blackwell are unpopular in the short-term. However, LPW must steer away from the visions of the old guard, such as those orchestrated by Mr. Sonny Reponovich. The old ideas that were safeguarded by those in positions of power are what nearly killed the federation that our fans crave, and the Illuminati will not let opposite views hamper our progression. After Inferno 15.2, I am confident that Mr. Reponovich will be forced to share the same long-term vision that I and Krimson Mask have, so that LPW can position itself to fully maximize the financial potential of our global brands. Only a fool would see otherwise.”
Results by Business Segment
The following numbers reflect net revenues by segment and by geographic region for the three months ended September 30, 2009 and September 30, 2008.
| Live Televised Programming
| Licensed Merchandise
| Digital Media
| Digital Media
| Net Revenues by Geographic Region
| North America
| Latin America
Live Televised Programming
Revenues from our live televised wrestling events were $109.2 million for the current quarter as compared to $96.8 million in the prior year quarter. The prior year quarter included revenue related to Altered Reality IV, LPW’s biggest pay-per-view of the year just before the global economic collapse that occurred last September and subsequent resignation of LPW’s previous administration.
The Insanity brand infiltrated new markets in Europe to attract international audiences with a unique brand-wide competition called Body Count, which featured the Insanity roster and select Inferno superstars to compete in single and multi-man matches to gain entry into the second-ever DeathCube match for a shot at the LPW World Heavyweight Championship. Despite the strong ratings and revenue numbers, LPW unfortunately saw the despicable role model Hatchet Ryda become the new Heavyweight Champion after defeating five more suitable men who don’t wear clown paint.
The Inferno brand toured domestically and featured a four-man tournament at the Sacrament pay-per-view, in which Mass Chaos successfully retained the LPW International Heavyweight Championship much to the disgust of many within the organization who are not on dope. Considering Q3 2009 did not have a joint-brand pay-per-view and saw champions such as Hatchet Ryda and Mass Chaos intentionally ruining their own respective brands, these revenues are an extremely good sign. We are confident that for Q4, these revenues will skyrocket once men like Andy Savana, Styxx and/or Krimson Mask successfully defeat these atrocious “champions”, and pioneer detractors such as Son of Repoman are eliminated.
- • Live event revenues were $28.6 million as compared to $15.4 million in the prior year quarter. Altered Reality IV in Q3 2008 generated approximately $9.8 million in live event revenue, however tenuous delays of the show killed higher potential revenue by cancelling two future shows. Compared to Q4, three additional shows were produced with a higher average attendance, with extra revenue coming at our international events due to a declining American dollar and need to see the reformed Illuminati and Little Red’s underpants.
- • Pay-per-view revenues accounted for $12.6 million as compared to the $6.8 million in the prior year quarter. Altered Reality IV generated more individual pay-per-view buys and revenue individually, but both Body Count and Sacrament combined for more total pay-per-view buys and resulted in an incline of pay-per-view income. With the additional buys and more events, LPW was able to leverage for promotional consideration in terms of advertisers compared to the previous quarter.
- • Venue Merchandise revenues dropped to $2.6 million as compared to $4.2 million in the prior year quarter. This resulted in lower per capita spending of $13.15 as compared to $15.69 prior year quarter. The top selling merchandise belonged to newer television personalities such as Jude Maxwell, Eddie B, and Ultramarcus. However, declining sales were chiefly caused by the under-performing fecal matter such as Drew Michaels, Hatchet Ryda, and Mass Chaos.
- • Television Rights Fees revenues increased to $18.3 million compared to $14.5 million in the prior year quarter before the financial crisis hit full stride. This increase was primarily due to fees received from our increased viewing audience, which no-doubt occurred after the Illuminati reformed when they laid out Hatchet Ryda once he became the new LPW World Heavyweight Champion. The increase in no way reflects when Hatchet actually became Champion.
- • LPW 24/7 revenues were at $1.0 million as compared to $1.3 million in the prior year quarter. I wish we could give you a detailed reason why we lost revenue, but we don’t know shit on this.
Revenues from licensed merchandise were $20.9 million versus $12.4 million in Q3 08, representing an impressive increase of 100523.4% using Little Red’s mathematical formula.
- • LPW Toys revenues accounted for $5.4 million, which first launched in December of last year. The new line featured popular toys such as the Megazord Steve Monroe doll, Pope Fred Sex Toys, and the Big B. Brownie Halloween costume. The only discontinued line that did not draw profit was Misfit Dollies. Fortunately, the company was able to meet environmental Going Green policies by taking the excess stock and recycling the material into one-ply toilet paper.
- • LPW the Music revenues accounted for $4.4 million, most of which was attributed to Villiano 187 musicals and the “I’m On a Boat” music video. LPW expects to release a full line of brand-specific compact discs and announce a merchandise agreement with iTunes in Q4 to further cash-in on this category.
- • DVD and Blu-ray net revenues accounted for $10.1 million compared to $8.1 million in the prior year quarter. The increase in home video entertainment primarily reflects the introductory line of Maria Gone Wild DVDs, in which the estranged wife of Jeff Watson can be seen having sex with over 73% of the LPW locker-room in exquisite locations like the bathroom and garage area.
Revenues from digital media related businesses accounted for $7.7 million that under-performed the prior year quarter by $0.2 million, which finished at 7.9 in the prior year quarter.
- • LPW.com revenues were 4.9 million as compared to $5.2 million in the prior year quarter, reflecting decreased sales of online advertising, which was on pace to surpass prior quarter until Son of Repoman appeared as the LPW Ambassador.
- • LPW Merchandise and ringtones fell to $1.8 million as compared to 2.5 in Q3 ‘08. The number of ringtones especially after Son of Repoman appeared his second time on Inferno programming, leading visitors to think it was okay to repo ringtones. Pirated ringtones has increased furthermore since Repoman was booked against Krimson Mask at Inferno 15.2, with speculation running rampant that illegal downloaders are getting their ringtones now before Krimson Mask kills him, thus in effect threatening ringtone pirates by scaring the pee out of themselves. Fortunately, when they do pee themselves, they will use the recycled toilet paper from recycled Misfit Dollies. Afterwards, ringtone sales are forecasted to increase 5%.
The disparity in LPW Films was a result of SoL’s feature film, “Game Day”, in which SoL played an ex-football player that houses his long-lost midget son, Lou. In a film that many reviewers suffered traumatic injuries after poking out their eyes with pencils or other sharp utensils, LPW Films saw a recorded revenue of $0.8 million in the current quarter due to third-world African citizens, who had the DVDs dumped to them, return them and pay their life-savings to LPW in order to stop the shipments to them. In Q3 ’08, the film lost $80 million in net margin.
With SoL now a member of the Illuminati and apart of Public Enemy Multimedia, he is expected to have his acting skills put to better use with future projects on the horizon.
Human Resources Expenses
Wrestler salaries increased to $25.9 million in the current quarter as compared to $17.9 million in the prior year quarter, forcing us to perform several cost-cutting measures. The revaluation of these contracts allows us to maintain cash flow while warranting budget to up-and-coming talents such as St. Jayne Nighthawk, Justus and Black Reaper.
- • The main contribution in the increased talent budget can be centered on Wevv Mang, who signed the richest contract in LPW history with approximately $5.5 million per year, not including bonus incentives.
- • In order to meet the reduced budget, we also had to cut excess salaries of The Rabbi, who suffered several nagging injuries after competing in the DeathCube match. Due to Rabbi’s legendary tenure, the daily grind of being on the road and wrestling on a nightly basis has become a liability to the company. Rabbi’s employment would force unwanted hikes in wrestler health insurance and we simply can not allow that.
- • Finally, Blackwell was cut due to inappropriate overhead costs related to his Dark Carnival. LPW must rent space for the carnival act to perform, and with Blackwell’s veteran status, his contract is becoming more than what its worth.
“To be quite honest, these cuts could have been prevented one way or the other”, quoted Samuels. “On one hand, Wevv, Rabbi, and Blackwell could still have jobs if not for a certain unforeseen corporate liability that the Board of Directors deemed to be a thorn in my butthole, One Sonny Reponovich, a.k.a. Son of Repoman. The Board gave him quite the hefty payday, and as he always say, the Repoman always collects.
“On the other hand, this could have been prevented if I had just booked this God damn match earlier. As evidenced through the revelation of Illuminati, the urgency for LPW’s economic survival is something I take very seriously. As CEO, I was hired with the specific duty of shoring up profits, of which these numbers prove. But in order for LPW to continue its onward momentum, you must be eliminated. Not like at Altered Reality IV where you were eliminated then powerbombed through the announce table by Krimson Mask. No, tonight you are entering your funeral, and Krimson Mask will give your eulogy using his fists. I want to see how much blood is left in you. I want to see how your bones break, your tendons rips, and your hope snap. Anyone who placed their hope in you will be proved so wrong.
“Tonight, the Repoman will collect. Enjoy your depleted 401(k).”
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