Cinedigm First-Quarter Loss Widens13 Aug, 2013 By: Erik Gruenwedel
Promising home entertainment revenue offset by theatrical acquisition, marketing and releasing costs
Cinedigm Digital Cinema Corp. Aug. 13 posted a first-quarter (ended June 30) net loss of $7 million, compared with a loss of $222,000 during the previous-year quarter. Revenue declined slightly to $19.3 million, from $20.9 million last year.
The increased loss was due in part to $2.6 million in theatrical acquisition, marketing and related releasing costs. Since March, Cinedigm has released 10 movies theatrically, acquired 676 titles for its library and expensed the upfront investments in related marketing and distribution costs.
Meanwhile, the Los Angeles distributor realized an 18% year-over-year revenue growth in entertainment revenue, attributable to strong organic growth in distribution fees earned from recent acquisitions of distribution rights of home entertainment titles; expanded monetization of its library of more than 20,000 movies and TV episodes; and related revenue from theatrical releases that have reached the home entertainment window.
“We are right in the middle of our budgeted ramp up,” CFO Adam Mizel said in a statement. “However, our financials reflect little of the significant revenues generated by these releases as they reach the profitable home entertainment markets.”
Mizel said Cinedigm has secured VOD placements, DVD preorders and SVOD agreements for much of its content that will contribute to revenue and pre-tax earnings beginning late in Q2, and most directly in the second half of its fiscal year.
“As we have previously stated, we expect these distribution deals to drive a more than doubling of our entertainment revenues this year,” he said.