Image Posts $3 Million Loss On Lower DVD, BD Sales

13 Aug, 2009 By: Chris Tribbey

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Citing a weaker release slate, Image Entertainment Aug. 13 reported a loss of $3.03 million for the quarter ended June 30, compared to earnings of $1.69 million in the same quarter last year.

Revenue for the quarter was down 27.3% to $23.68 million, with significant revenue drops across every distribution channel except broadcast. DVD revenue was off 32.1% (to $19.2 million), Blu-ray Disc revenue was down 30.4% (to $1.3 million) and digital distribution revenue was down 11.4% (to $670,000). Broadcast revenue was up 743%, from $165,000 during the three months ended June 30, 2008, to $1.4 million in this year’s quarter.

Jeff Framer, Image president and CFO, said during a conference call with investors that the company plans on posting better results in the next quarter.

“We’re starting to see some positive signs at retail,” he said, pointing to anticipated home video sales of Management, with Jennifer Aniston, Woody Harrelson and Steve Zahn. “We’re disappointed with the results in this quarter.”

Cost-cutting measures, including a 23% reduction in the company’s workforce, or 32 employees, helped save the company more than $3 million, Image reported.

After two failed third-party merger attempts in the past three years, Framer noted that it is working with its financial advisory firm to look at potential financing or a sale of Image. In late July the company arranged for a second amendment with Wachovia Capital Financing Corp., holder of its nearly-8% senior convertible note, deferring a $4 million principle payment to Oct. 30.

“I know everyone on the call would love to hear us update that information [about financing or a sale],” Framer said. “Unfortunately it’s impossible to predict, as the process is ongoing, whether or not we can effect a transaction, or what form that transaction will take.”

Shares of Image stock closed slightly up Aug. 13, to 93 cents.

 

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