Point.360 Announces First Fiscal Quarter Results

BURBANK, Calif., Nov. 12 /PRNewswire-FirstCall/ -- Point.360 (Nasdaq: PTSX), a
leading provider of integrated media management services, today announced
results for the three month period ended September 30, 2009.

Haig S. Bagerdjian, the Company's Chairman, President and Chief Executive
Officer said: "As I have mentioned in our last few shareholder conference
calls, we have been looking into opportunities to expand into the business-to-
consumer segment of our industry. During the first quarter we began a
multi-faceted research and development project to create a new service
offering. In the first phase, we will create a proof of concept for the
delivery of DVDs to retail customers.

"With the influx of online stores and kiosks, big box stores have been forced
to close due to high facility and personnel costs. We have identified a niche
between big box and on-line rentals to service the market partially abandoned
by the big-box stores, kiosks and on-line providers."

Mr. Bagerdjian continued: "On September 29, 2009 we purchased $500,000 of
equipment and software to create three proof of concept stores in Southern
California. We estimate that the project will take up to six months to
complete at a cost of $1 to $2 million. If successful, the next phase will be
implementation of the overall strategy."

The Company also indicated that sales from its traditional post production
business were down from the prior year's quarter and that the reported loss
included R&D costs related to the automated store project.

Revenues

Revenue for the quarter ended September 30, 2009 totaled $9.4 million compared
to $11.6 million in the same quarter last year. The decline reflects a
slowdown in work from several major studio customers and the effects of the
move of one of our facilities.

Gross Margin

In the first quarter of fiscal 2010, gross margin was $2.1 million (22% of
sales), compared to $3.9 million (34% of sales) in the prior year's first
quarter.

Selling, General and Administrative and Other Expenses

For the first quarter of fiscal 2010, SG&A expenses were $3.8 million, or 40%
of sales, compared to $3.7 million, or 32% of sales in the first quarter of
last year. R&D costs were $109,000 in the current year quarter.

Interest expense was $0.2 million in the first quarter of fiscal 2010 compared
to $0.1 million last year due to additional mortgage debt.

Other income represents sublease income.

Operating Income (Loss)

Operating loss was $1.8 million in the first quarter of fiscal 2010 compared
to a profit of $0.2 million in last year's first quarter.

Net Income (Loss)

For the first quarter of 2010, the Company reported a net loss of $2.0 million
($0.19 per share) compared to a net income of $59,000 ($0.01 per share) in the
same period last year.

Consolidated Statements of Income (Loss) (unaudited) *

The table below summarizes results for the three and nine month periods ended
September 30, 2008 and 2009:

Three Months Ended
September 30,
-------------
2008 2009
---- ----

Revenues $11,556,000 $9,419,000
Cost of services (7,655,000) (7,360,000)
----------- -----------

Gross profit 3,901,000 2,059,000
Selling, general and
administrative expense (3,710,000) (3,788,000)
Research and development expense - (109,000)
--- ---------

Operating income (loss) 191,000 (1,838,000)
Interest expense (129,000) (222,000)
Interest income 23,000 9,000
Other income 21,000 79,000
------ ------

Income (loss) before income
taxes 106,000 (1,972,000)
(Provision for) benefit from
income taxes (47,000) -
-------- ---

Net income (loss) $59,000 $(1,972,000)
======= ===========

Earnings (loss) per share:
Basic:
Net income (loss) $0.01 $(0.19)
Weighted average number of
shares 10,504,072 10,152,422
========== ==========

Diluted:
Net income (loss) $0.01 $(0.19)
Weighted average number of
shares including the dilutive
effect of stock options 10,504,072 10,152,422
========== ==========

Selected Balance Sheet Statistics (unaudited)*

June 30, Sept 30,
2009 2009
---- ----
Working Capital $10,049,000 $8,034,000
Property and equipment, net 20,417,000 20,159,000
Total assets 37,394,000 35,144,000
Current portion of long term debt 2,086,000 2,106,000
Long-term debt, net of current
portion 10,844,000 10,313,000
Shareholder's equity 18,009,000 16,594,000

* The consolidated statements of income (loss) and presentation of balance
sheet statistics do not represent the results of operations or the financial
position of the Company in accordance with generally accepted accounting
principles (GAAP), and are not to be considered as alternatives to the balance
sheet, statement of income, operating income, net income or any other GAAP
measurements as an indicator of operating performance or financial position.
Not all companies calculate such statistics in the same fashion and,
therefore, the statistics may not be comparable to other similarly titled
measures of other companies. Management believes that these computations
provide useful information to investors.

About Point.360

Point.360 (PTSX) is a value add service organization specializing in content
creation, manipulation and distribution processes integrating complex
technologies to solve problems in the life cycle of Rich Media. With seven
locations in greater Los Angeles and New York, Point.360 performs high and
standard definition audio and video post production, creates virtual effects
and archives and distributes physical and electronic Rich Media content
worldwide, serving studios, independent producers, advertising agencies,
corporations, non-profit organizations and governmental agencies. Point.360
provides the services necessary to edit, master, reformat and archive clients'
audio and video content, including television programming, feature films and
movie trailers. Point.360's interconnected facilities provide service coverage
to all major U.S. media centers.

Forward-looking Statements

Certain statements in Point.360 press releases may contain "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. Such statements include, without limitation (i) statements
concerning the Company's projected revenues, earnings, cash flow and EBITDA;
(ii) statements of the Company's management relating to the planned focus on
internal growth and acquisitions; (iii) statements concerning reduction of
facilities and actions to streamline operations; (iv) statements on actions
being taken to reduce costs and improve customer service and (v) statements
regarding new business and new acquisitions. Please also refer to the risk
factors described in the Company's SEC filings, including its annual reports
on Form 10-K. Such statements are inherently subject to known and unknown
risks, uncertainties and other factors that may cause actual results,
performance or achievements of the Company to be materially different from
those expected or anticipated in the forward-looking statements. In addition
to the factors described in the Company's SEC filings, the following factors,
among others, could cause actual results to differ materially from those
expressed herein; (a) lower than expected net sales, operating income and
earnings; (b) less than expected growth; (c) actions of competitors including
business combinations, technological breakthroughs, new product offerings and
marketing promotional successes; (d) the risk that anticipated new business
may not occur or be delayed; (e) the risk of inefficiencies that could arise
due to top level management changes and (f) general economic and political
conditions that adversely impact the Company's customers' willingness or
ability to purchase or pay for services from the Company. The Company has no
responsibility to update forward-looking statements contained herein to
reflect events or circumstances occurring after the date of this release.

SOURCE Point.360

Alan Steel, Executive Vice President of Point.360, +1-818-565-1444