Co. putting back first quarter until further notice
TORONTO — A red-faced Alliance Atlantis Communications announced Monday, for a third time, that management is delaying its reporting date for year-end financials.
AAC’s year end is Dec. 31. The company also said it is putting back reporting on its first quarter, ended March 31, until further notice.
“Establishing those deadlines was the victory of hope over experience,” AAC chairman and CEO Michael MacMillan told Daily Variety. “We should have been more cautious.”
The Toronto-based broadcaster and distributor announced in December that, “CSI” aside, it was extricating itself from most producing. Alliance Atlantis, which used to be one of the 10 largest producers in North America, co-produces “CSI” with CBS.
The company has already said it expects to take a C$315 million ($225.8 million) hit for the year to shut down that division. In doing so, however, it has to close the books on scores, if not hundreds, of productions, each of which is separately incorporated, with different elements and often located in different jurisdictions.
“The process of reviewing and exiting the vast majority of the production business has been complex and painstaking,” chief financial officer Judd Martin said. “As a result of the magnitude of the undertaking and in consultation with our auditors, PricewaterhouseCoopers, we have determined that we require additional time to complete this work.”
The company is instead focusing on its more lucrative broadcasting business and its film distribution business, which it spun off last year into an income trust. That spinoff also complicated the company’s financial reporting. It moved its year-end forward three months to Dec. 31 as well.
“Maybe in retrospect, we should have waited a year to do that,” MacMillan added.
The broadcast and motion picture division numbers have been ready for some time. The company released its Movie Distribution Income Fund fiscals last week.
One analyst acknowledged that the process would be extremely complicated, but added: “That said, these guys have been in business for 25 years. They’ve had writeoffs before.”
The quarterly deadline for the Ontario Securities Commission was Monday, and the year-end deadline is this week. MacMillan said the OSC has been advised of the situation. The regulator can halt trading for management, though an AAC press release noted that the company already has a management trading blackout.
Alliance Atlantis shares on the Nasdaq closed down more than 4% at $16.25.