NEW YORK, NY--(BUSINESS WIRE)--May 24, 1999--Paradise Music & Entertainment, Inc. (NASDAQ:PDSE) today announced operating results for the three and nine-month periods ended March 31, 1999. For the fiscal third quarter, Paradise generated revenues of $1,961,242, compared to revenues of $1,968,335 in the year-ago three-month period. A 21% revenue increase from the Company's Picture Vision video production division, 22% higher revenues from its Rave commercial music production unit and a year-over-year rise in revenues from Paradises's All Access music artist management group, were offset by a decline in PUSH Records revenues, compared to the 1998 three-month period. Gross profit at Picture Vision increased significantly to 28%, versus 10% in the year-ago period, as the video production jobs in 1998 were much larger and consequently, generated smaller fees as a percentage of revenue than those in 1999. The PUSH contribution to the fiscal 1999 third quarter results was impacted by a higher volume of returns of prior releases and a lack of any current record releases during the period. The Company's net loss narrowed to $874,008, or $0.18 per diluted share during the quarter, compared to a net loss of $1,473,934, or $0.66 per diluted share in the prior year period. Paradise's successful cost-cutting measures resulted in a 20% decline in selling, general and administrative expenses, which favorably benefited operating results. Per share results for the fiscal 1999 and 1998 three-month periods are based on 4,886,500 and 2,230,574 weighted average common shares outstanding, respectively. The increase in share count is primarily due to the issuance of 2,000,000 shares to The Cassandra Group in a private placement financing in December 1998. For the nine-month period ended March 31, 1999, Paradise generated revenues of $7,740,373, compared to revenues of $8,459,367 in the comparable year-earlier period. A 42% revenue increase from the Rave division and 7% higher revenues at Picture Vision, were more than offset by lower revenue contributions from All Access and PUSH. Despite a decline in revenues, gross profit as a percentage of revenues rose to 33%, versus 30% a year ago. Selling, general and administrative expenses also fell modestly during the nine-month period. The Company's net loss narrowed to $2,218,746, or $0.69 per diluted share, compared to $2,265,759, or $1.02 per diluted share in the nine-month period ended March 31, 1998. Per share results for the fiscal 1999 and 1998 nine-month periods are based on 3,220,349 and 2,229,378 weighted average common shares outstanding, respectively. The increase in share count is primarily due to the issuance of 2,000,000 shares to The Cassandra Group in a private placement financing in December 1998. A number of important corporate developments took place since Paradise reported its fiscal second quarter results in February. In chronological order, these material developments include: - Paradise's independent record label, PUSH Records, entered into a joint venture agreement with V2 Records. Distribution in North America for PUSH/V2 will be handled by BMG. The companies recently collaborated on the successful release of Blessed Union of Souls' third album, "Walking Off The Buzz." - In April, Paradise entered into a letter of intent to acquire 100% of the assets of Straw Dogs, a profitable television commercial production company. - Jesse Dylan, a member of the Company's Board, was appointed Paradise Chairman and Chief Executive Officer. Former Paradise Chairman and Chief Executive of the Rave subsidiary, John Loeffler, was named Chairman Emeritus of Paradise. - Jay Moloney, a former partner of leading entertainment talent agency, Creative Artists Agency (CAA), was appointed President of Paradise. - Investors led by Cassandra Group committed to invest an additional $8 million in private equity financing in Paradise. Cassandra President Dana Giacchetto also entered into a formal consulting agreement with Paradise to support the Company in its future acquisition and financing efforts. Paradise Music and Entertainment, Inc. is a diversified music, entertainment, media company. In addition to its proposed acquisition of Straw Dogs, a cutting edge commercial production company, Paradise consists of: (i) PUSH Records (independent record label teamed with V2 Records), (ii) Picture Vision (film and television production; commercial and music video production), (iii) All Access Entertainment Management Group, Inc. (music artist management), and (iv) Rave Music (commercial music/jingle producer). Additional information about Paradise is available at the Paradise website located at http://www.paradiseme.com. Legal Disclaimers: This Press Release may contain forward-looking statements with the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Investors are cautioned that forward-looking statements are inherently uncertain. Actual performance and results of operations may differ materially from those projected or suggested in the forward-looking statements. The forward-looking statements contained herein represent the Company's judgment as of the date of this report hereof, and the Company cautions readers not to place undue reliance on such statements. PARADISE MUSIC & ENTERTAINMENT AND SUBSIDIARIES Consolidated Statements of Operations (unaudited) Three Months Nine Months Ended March 31, Ended March 31, 1999 1998 1999 1998 REVENUES $1,961,242 $1,968,335 $7,740,373 $8,459,367 OPERATING EXPENSES Cost of sales 1,257,611 1,491,354 5,183,600 5,917,935 Selling, general and administrative 1,584,382 1,981,039 4,807,799 4,921,645 Total operating expenses 2,841,993 3,472,393 9,991,399 10,839,580 OPERATING LOSS (880,751) (1,504,058) (2,251,026) (2,380,213) INTEREST INCOME 6,743 28,124 32,280 121,454 INCOME (LOSS) BEFORE INCOME TAXES (874,008) (1,475,934) (2,218,746) (2,258,759) INCOME TAX PROVISION (BENEFIT) -- (2,000) -- 7,000 NET INCOME (LOSS) $ (874,008)$(1,473,934)$(2,218,746)$(2,265,759) BASIC AND DILUTED INCOME (LOSS) PER COMMON SHARE $(0.18) $(0.66) $(0.69) $(1.02) WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 4,886,550 2,230,574 3,220,349 2,229,378  