LOS ANGELES, May 21 /PRNewswire/ -- NewStar Media Inc. (Nasdaq: NWST), a diversified entertainment company, today reported results for the first quarter ended March 31, 1999. Revenues for the three months ended March 31, 1999 were $1,422,000 compared with $2,693,000 for the three months ended March 31, 1998. The net loss for the first quarter was $1,626,000, or a loss of $0.10 per common share, compared to a net loss of $1,763,000, or a loss of $0.28 loss per common share for the first quarter of 1998. The decrease in revenues for the first quarter reflect a decline in series production by NewStar Television due to timing of the delivery of television motion pictures and the reduced number of audio titles published in the first quarter of 1999 versus last year's first quarter. NewStar recently entered into an agreement with Flashpoint (UK) Limited and Prosperity Pictures for overseas rights to five high-profile film projects to be produced by Showtime, reflecting the Company's philosophy of forging relationships with highly visible production partners. According to Showtime, the films will have budgets of $4 to $5.5 million each and are the biggest- budgeted and most commercially aimed projects that Showtime has in development. In April, NewStar Television began production on "Random Acts of Comedy" for the Fox Family Channel as part of NewStar's plans to enhance its position as a leading producer of television entertainment. NewStar recently announced a reorganization of its executive management staff headed by Terrence A. ("Terry") Elkes, Chairman and Chief Executive Officer and the appointment of the senior management team of the NewStar Publishing and Internet Services Division. "We are committed to expanding our audiobook publishing business, as well as our television production and worldwide television distribution businesses. NewStar's growth strategy includes making key acquisitions, targeting the broadest consumer audience for our audio books, and creating a powerful Internet presence," said Terry Elkes, Chairman and Chief Executive Officer of NewStar Media, Inc. NewStar is a diversified entertainment company engaged in the publication of audio and printed books and the production and distribution of television programming. This release contains statements relating to future results of the Company (including certain projections and business trends) that are "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those projected as a result of certain risks and uncertainties, including but not limited to, changes in political and economic conditions, demand for and market acceptance of new and existing products, as well as other risks and uncertainties detailed from time to time in the filings of the Company with the Securities and Exchange Commission. NEWSTAR MEDIA INC. CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) Three Months Ended March 31, 1999 1998 Revenues $1,297,000 $1,549,000 Publishing, net 125,000 1,144,000 Film 1,422,000 2,693,000 Cost of sales Publishing 973,000 1,186,000 Film 105,000 944,000 1,078,000 2,130,000 Gross profit 344,000 563,000 Selling, general and administrative expenses 2,364,000 2,179,000 Loss from operations (2,020,000) (1,616,000) Gain on sale of long-term investment 594,000 -- Interest expense, net (198,000) (147,000) Loss before income taxes (1,624,000) (1,763,000) Income tax expense (2,000) -- Net loss $(1,626,000) $(1,763,000) Basic and diluted loss attributable to common shareholders $(1,738,000) $(1,870,000) Basic and diluted loss per common share $(.10) $(.28) Weighted average number of common shares outstanding 17,317,000 6,579,000  