Peace Arch(R) Entertainment Group Inc. Reports First Quarter Fiscal 2008 Results

Revenues Increase From $11 Million to $17 Million, Validating High Growth Strategy for International Entertainment Company

TORONTO -- (MARKET WIRE) -- 03/31/08 -- Peace Arch Entertainment Group Inc. (AMEX: PAE) (TSX: PAE) today announced operating results for its first quarter of fiscal 2008, ending November 30, 2007, that reported revenues of $17.2 million versus $11.3 million for the same period last year.

The Company's revenues for the three months ended November 30, 2007 were $17.2 million up significantly from $11.3 million last year. The growth in revenues reflects an increase primarily in Home Entertainment which includes new revenues from the acquisition of Trinity in the U.S.

Peace Arch reported net loss of $(1.1) million, or $(0.03) per diluted share in the three months ended November 30, 2007, compared to a net loss of $(373,000), or $(0.02) per diluted share for the same period last year. Included in net loss for the three months ended November 30, 2007 was $1.7 million of interest expense compared to $822,000 in the same period last year. The increase in interest expense is due to the increase in production loans, and loan arrangement fees paid for new loan facilities in the quarter.

During the quarter, the Company delivered three films, one made-for-television movie and twenty-two episodes of three television series, compared to the delivery of one film, one made-for-television movie and ten episodes of two television series for the same period of the prior year. The films delivered were "The Last Hit Man," "The Four Horsemen," and "Grindstone Rd" and the made-for-television movie delivered was "Ace of Hearts." The Company is currently in production of "The Tudors" season II, a 10-hour dramatic mini-series focusing on the tumultuous years of King Henry VIII's nearly forty year reign of England. The Home Entertainment segment reported both strong revenues and earnings in the quarter.

During the first quarter, the Company achieved several key milestones in support of its strategic growth initiatives as follows:

* Elected prominent entertainment industry veteran Jeffrey Sagansky as Co-Chairman of the board and elected John Flock, President, to the board of directors.

* Completed a sale of certain distribution rights excluding North America with Sony Pictures Home Entertainment for the second season of the television program series "The Tudors" focusing on the tumultuous years of King Henry VIII's nearly 40 year reign of England.

* The television series "The Tudors" received two Creative Emmy(R) Awards from the Academy of Television Arts & Sciences. The Emmy Awards were given for "Outstanding Costumes for a Series" and "Outstanding Original Movie Title Theme Music."

* Longtime Showtime acquisitions executive Larry Greenberg joined Peace Arch as Senior Vice President, Acquisition and is based in Peace Arch's Los Angeles office.

* Acquired worldwide distribution rights to the following mini-series and films: "Guns," "The Babysitters," and "The Devil's Mercy."

* Acquired Canadian distribution rights to four films from Insight Film Studios, "Numb," "When a Man Falls in the Forest," "Operation Espionage," and "Higher Education."

* Acquired exclusive distribution rights to Uwe Boll's epic adventure film "In the Name of The King."

* Acquired exclusive North American distribution rights to crime thriller "Towards Darkness" starring Emmy winning actress America Ferrera.

* "Chapter 27" won debut feature prize at the Zurich Film Festival for director Jarrett Schaefer.

* Appointment of entertainment industry veteran Jeffrey Sagansky as Interim CEO.

Subsequent to the first quarter ended November 30, 2007, the following significant transactions occurred:

* Completion of the acquisition of the remaining 59.99% of the shares of Dufferin Gate Productions Inc.

* Financing agreement with key shareholders in the amount of $2.7 million for general corporate purposes.

As at November 30, 2007, Peace Arch's total shares outstanding was 48,340,420 Common Shares (excluding 222,689 shares in escrow) and 4,347,825 Series I Preference Shares and 4,347,825 Series II Preference Shares. The Company also has outstanding 801,000 Common Share purchase warrants.

As disclosed in its annual financial statements, the Company's audit opinion for the year ended August 31, 2007 contained a going concern qualification.

Our next conference call will take place subsequent to the release of our second quarter financial statements for the period ending February 28, 2007.

For full Financial Statements, Note Disclosure and MD&A, please refer to the Company's filings, which are available at: www.sedar.com and www.sec.gov.

About Peace Arch(R) Entertainment Group Inc.

Peace Arch Entertainment produces and acquires feature films, television and home entertainment content for distribution to worldwide markets. Peace Arch owns one of the largest libraries of top quality independent feature films in the world, featuring more than 1000 classic and contemporary titles. For additional information, please visit www.peacearch.com.

Forward-Looking Statements

This press release includes statements that may constitute forward-looking statements, usually containing the words "believe," "estimate," "project," "expect," or similar expressions. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Factors that would cause or contribute to such differences include, but are not limited to, continued acceptance of the Company's products and services in the marketplace, competitive factors, dependence upon third-party vendors, availability of capital and other risks detailed in the Company's periodic report filings with the Securities and Exchange Commission. By making these forward-looking statements, the Company undertakes no obligation to update these statements for revisions or changes after the date of this release.

Peace Arch Entertainment Group Inc. Consolidated Balance Sheet Highlights Unaudited - Prepared by Management --------------------------------------------------------------------(In thousands of Canadian dollars)

November 30 August 31 2007 2007 Assets 166,257 150,207 ----------- ---------Liabilities 121,159 103,091 ----------- ---------Shareholders' Equity 45,098 47,116 ----------- --------- Peace Arch Entertainment Group Inc. Consolidated Statements of Loss Unaudited -- Prepared by Management --------------------------------------------------------------------(In thousands of Canadian dollars, except per share amounts)

Three Months Three Months Ended Ended November 30 November 30 2007 2006 Restated

Revenues Motion Picture 2,150 4,460 Television 4,028 1,185 Home Entertainment 10,993 5,685 -------------------------------- 17,171 11,330 --------------------------------Expenses

Amortization of investment in film and television programming, and other production costs 4,665 4,350 Home entertainment direct costs 8,003 4,249 Selling, general and administrative 4,018 1,771 Stock and warrant-based compensation costs 247 119 Other amortization 353 124 -------------------------------- 17,286 10,613 -------------------------------- Earnings (loss) before the undernoted (115) 717

Interest income 442 260 Interest expense (1,669) (822) Foreign exchange gain (loss) 356 (317) Loss on settlement of obligations - (13) --------------------------------Loss before income taxes (986) (175) Income tax expense (139) (198) --------------------------------Net loss for the period (1,125) (373) --------------------------------Net loss per common share Basic and Diluted $(0.03) $(0.02) -------------------------------- The accompanying notes are an integral part of these consolidated financial statements

Peace Arch Entertainment Group Inc. Consolidated Statements of Deficit Unaudited - Prepared by Management --------------------------------------------------------------------(In thousands of Canadian dollars) Three Months Three Months Ended Ended November 30 November 30 2007 2006 Restated

Deficit -- beginning of period (15,309) (9,182)

Adjustment for implementation of new accounting standards (67) -Preference share dividends (81) (100) Net loss for the period (1,125) (373) ----------------------Deficit -- end of period (16,582) (9,655) ---------------------- Consolidated Statements of Comprehensive Loss Unaudited -- Prepared by Management --------------------------------------------------------------------(In thousands of Canadian dollars)

Three Months Three Months Ended Ended November 30 November 30 2007 2006 Restated

Net loss for the period (1,125) (373) Other comprehensive loss

Unrealized foreign currency translation losses on net assets of self-sustaining foreign operations (1,278) - ----------------------Comprehensive loss for the period (2,403) (373) ---------------------- The accompanying notes are an integral part of these consolidated financial statements

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Contact:

Roy Bodner Vice President Public Relations Peace Arch Entertainment (310) 450-1711 rbodner@peacearch.com

2008-03-31 22:59:55 0324147 MARKETWIRE