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MDP Reports Record 2003 Pre-Tax Earnings 2003 Net Earnings Rise by Nearly 45%

2/17/2004

MONTREAL, February 17 /CNW Telbec/ - MDP Worldwide Entertainment Inc. ("MDP" or the "Corporation") (TSE: MDP.A and MDP.B), a leading Canadian film entertainment company engaged in the financing, development, production, and worldwide licensing of theatrical feature films, reported today financial results of operations for the fiscal year ended September 30, 2003.

Earnings before income taxes increased nearly fifteen-fold to a record $5.4 million for the fiscal year ended September 30, 2003 as compared to $341,000 for the preceding fiscal year. Pre-tax earning margins increased exponentially to 16.6% for fiscal 2003 as compared to 1.0% during the preceding fiscal year.

Net earnings rose nearly 45% to $4.2 million for the fiscal year ended September 30, 2003, as compared to $2.9 million for the preceding fiscal year. Net earning margins increased dramatically to 12.9% for fiscal 2003 as compared to 7.8% during the fiscal year preceding.

Fourth quarter net earnings for fiscal 2003 were nearly $2.1 million, as compared to a net loss of $88,000 for the fourth quarter of the preceding fiscal year.

“We are extremely pleased with the record performance reported by the Corporation for fiscal 2003. These impressive financial results underscore the total effectiveness of our current financial strategy, and reflect the continuing implementation of our business plan,” stated Sammy Lee, Vice Chairman of the Corporation. “The recent theatrical release of ‘Monster’ was the most successful in the company’s history. With our upcoming 2004 slate of feature films, which promises to be the strongest in the company’s history, we will continue to build on this success and further strengthen our position as a leader in the independent film entertainment industry,” added Mr. Lee.

“Our shareholders are clearly starting to reap the financial benefits from our successful operating strategy and the equity infusion provided by Limerick Assets Limited in fiscal 2002,” further stated Mr. Lee. “We now have the capital resources to undertake strategic operating decisions that will benefit the Corporation in the long-term while having the financing flexibility to react to other business opportunities that demand a quick response,” added Mr. Lee.

“Fiscal 2003 has been an exceptional financial year for the Corporation,” stated Devin Cutler, Vice President of Finance and Controller. “We reported the highest earnings before taxes in our eleven year history, and furthermore, achieved these impressive results without fully recognizing the financial benefits to be reaped from our most successful film to date, ‘Monster.’ We expect the significant financial results from this feature film to be reported throughout fiscal 2004,” added Mr. Cutler.

“The Corporation has markedly reduced its outstanding debt level as compared to the preceding year,” Mr. Cutler further stated. “Total liabilities were significantly reduced by 46% to under $25.4 million as at September 30, 2003, from $47.6 million as at September 30, 2002. The debt/equity ratio dramatically declined to 0.75 to 1 as at September 30, 2003 compared to 1.43 to 1 as at September 30, 2002. Similarly, the asset to debt ratio improved to 2.30 to 1 as at September 30, 2003 from 1.70 to 1 as at September 30, 2002. Never before has MDP been in a comparable position of such fiscal health as that reflected by these outstanding results,” Mr. Cutler concluded.

Operating revenues for fiscal year 2003 dipped by 12.6% to $32.4 million from $37.1 million for the preceding fiscal year. Despite the reduction in operating revenues, operating expenses as a percentage of revenue decreased to 83% for the fiscal year ended September 30, 2003 as compared to 99% for the fiscal year ended September 30, 2002.

Despite a substantial increase in net earnings for fiscal 2003, Shareholder’s Equity decreased by nearly $400,000 as at September 30, 2003 as compared to the preceding fiscal year. The reduction was primarily caused by a downward exchange rate fluctuation between the US Dollar, which is the primary functional currency of the Corporation’s continuing business operations, and the Canadian Dollar, which is the reporting currency for the Corporation’s consolidated financial statements. During fiscal 2003, the US Dollar fell by nearly 15% against the Canadian Dollar, resulting in a cumulative currency translation adjustment which reduced 2003 Shareholders’ Equity by nearly $4 million. Accordingly, had the currency exchange rate for fiscal 2002 been utilized, earnings before income taxes would have been increased to approximately $6 million for fiscal 2003 as compared to the reported $5.4 million.

Basic and diluted earnings per share dipped slightly, to $0.010 from $0.014. Despite a near 45% increase in reported net earnings over the preceding fiscal year, this increase was offset by the Corporation’s issuance of over 260 million Preferred Convertible Class C Shares to Limerick Assets Limited during the fourth quarter of fiscal year 2002. Accordingly, basic and diluted earnings per share have been calculated on a weighted average number of shares outstanding for fiscal 2003 of 419,412,894 and 213,331,580 for fiscal 2002.

Certain statements in this report may constitute forward-looking statements. Such forward-looking statements involve risks, uncertainties and other factors which may cause actual results, performance or achievements of the Corporation to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.


Ticker symbols: MDP.A & MDP.B (TSE)
www.mdpworldwide.com
/For further information: Devin Cutler, Vice President of Finance and
Controller, or Pierre Kurland, Director of Financial Reporting, /
(MDP.A. MDP.B.)
CO: MDP Worldwide Entertainment Inc.
ST: Quebec
IN: ENT FLM
SU: ERN
-30-

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