July 17--Fab Universal Corp., whose shares were suspended since November amid questions about its business, reported a first-quarter loss Wednesday of $1.9 million after the impact of foreign currency translation.
The Oakland-based company, which was scheduled for an oral hearing Wednesday to appeal a New York Stock Exchange decision to delist its shares, said it expects lower revenue in future periods because its business is changing.
Fab, a distributor of entertainment media, said the loss compared to net income of $3.5 million in the same period a year ago. Revenue fell to $14.7 million compared to $22.6 million last year. The company did not report earnings per share that included the currency impact. Without the currency translation, it reported net income per share of 10 cents, versus 15 cents a year ago.
In a securities filing, Fab said it is changing its business model from hardware-based distribution such as CDs and DVDs to digital channels, including digital TV, mobile and the Internet. "We are anticipating a dramatic decline of revenue in wholesale, retail, advertising and membership cards going forward," the company said.
Fab said it was notified on April 28 that the NYSE staff intends to have its shares delisted because the company had not filed an annual Form 10K, a comprehensive summary of its financial performance, for the year ended Dec. 31. The Form 10K was filed on June 27.
Fab has hired a New York law firm to review claims by investors of unusual business operations and financial reporting that has led to a trading halt in the company's shares since Nov. 21. The company had been targeted by short sellers who alleged it was selling "pirated U.S. movies" and overstating the size of its distribution network in China.
John D. Oravecz is a staff writer for Trib Total Media. He can be reached at 412-320-7882 or email@example.com.
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