Cinedigm Narrows Quarterly Loss14 Aug, 2012 By: Erik Gruenwedel
Cinedigm Digital Cinema Corp. Aug. 14 reported a first-quarter (ended June 30) loss of $5.2 million, compared with a loss of $6.4 million during the previous-year period.
Los Angeles-based Cinedigm operates a business model transforming movie theaters into digital screens and networked entertainment centers. In May the company acquired independent distributor New Video Group for $14 million. It is prepping a multiplatform distribution strategy whereby theater operators share in the revenue of movies released early and simultaneously on disc, video-on-demand and streaming.
Indeed, the first quarter was impacted by transaction and transition costs associated with the New Video acquisition, including about $1.3 million in one-time merger and acquisition expenses. Revenue for the quarter was $20.9 million, a 15.9% increase from revenue of $18 million during the previous-year period.
The increase in revenue was primarily the result of the New Video acquisition, with non-deployment revenue almost doubling year-over-year to $6.9 million from $3.5 million, as well as growth in the digital cinema software and servicing units. This increase was partially offset by a year-over-year decline in Cinedigm’s print fee revenue due to shifting movie release timing.
During the quarter, Cinedigm theatrically released the military rape documentary The Invisible War with significant fanfare. It is slated to enter the retail window in October. The company also released the mixed martial arts documentary Like Water based on the life of UFC champion Anderson Silva. Based on pre-sales of ancillary home entertainment distribution rights and early release results, Cinedigm said it expects both releases to be profitable.
“We are extremely pleased with the integration and performance of New Video and believe this strategic and accretive acquisition positions Cinedigm well to deliver growth in the content distribution business,” CEO Chris McGurk said in a statement. “As always, we remain focused on profitably growing the entire business and making additional strategic investments to drive shareholder returns in fiscal year 2013 and beyond.”