Toronto-basedAlliance Atlantis announced strong second quarter results for its distributionarm, the Motion Picture Group (MPG), which delivered nearly half of thequarter's $160m (C$252m) in revenue for the period ending Sept. 20. TheMPG's $76.2m revenue was up more than 50% from the same time last year.The numbers were driven by domestic theatrical releases such as Spy Kids 2 and Austin Powers In Goldmember, which grossed over $12.7 (C$20m), the secondhighest gross in the company's history. Video/DVD releases in the quarterincluded Lord Of The Rings: The Fellowship Of The Ring, John Q,Blade II, In The Bedroom, Van Wilder and Gosford Park.

Thecompany's UK distribution arm, Momentum Pictures, helped the revenueboost with video/DVD releases of Amelie and Just Visiting as didthe first season of the company's hit TV series, CSI: Crime SceneInvestigation. The series is thenumber one show this season on US television while a spin-off, CSI Miami, which debuted this autumn, is in the top 10, basedon seven weeks of ratings.

AACCEO Michael MacMillan said the balance of the current year's theatricalreleases, including the second Lord Of The Rings title, The Two Towers, and Chicago, will take the company to a record year at the box office. He alsonoted the unexpected strong results for the Michael Moore documentary BowlingFor Columbine. No mention was madeof the flop Formula 51.

Heexpects to announce shortly the renewal of the company's exclusive outputdeal with New Line, which expires at the end of December. He also pointed tothe bright prospects of video-on-demand output deals it has signed withCanada's major cable providers Rogers, Shaw and Cogeco.

MacMillanalso noted that the company is close to fulfilling the obligations of its 1998production agreement with Robert Lantos' Serendipity Point Pictures. Thequarter's balance sheet saw AAC pay Lantos a C$2.4m "productionfinancing non-fulfilment payment" when it chose not to finance anundisclosed Lantos production. "The maximum remaining non-fulfilmentpayments that may be paid if [AAC] chooses not to finance any proposedSerendipity motion picture project is C$1.1m. "

On that note, revenue at thecompany's production arm, the Entertainment Group, was down 16%, from$67.4m to $57.3m, a reflection of the company's production reductionstrategy: "significantly reduce the production of higher cost, lowermargin prime time television hours; limit the number and size of in-housemotion picture productions; reduce the amount of capital invested in both ofthese activities; and implement cost reductions."