RLJ Entertainment Ups Q2 Loss5 Aug, 2013 By: Erik Gruenwedel
Content costs, synergies remain challenges as distributor melds physical and digital distribution channels
RLJ Entertainment Aug. 5 reported a second-quarter (ended June 30) net loss of $16.9 million, compared with a pro forma loss of $4.8 million during the previous-year period. Revenue topped $34.2 million compared with pro forma revenue of $40.5 million last year.
Silver Springs, Md.-based RLJ Entertainment consists of home entertainment distributors Acorn Media Group and Image Entertainment, which were both acquired by RLJ Companies in April 2012. Pro forma financial information reflects the operating results of RLJ Entertainment as if Image and Acorn Media had been acquired Jan. 1, 2012.
RLJ Entertainment said the cost of sales (content) topped $36.1 million, reflecting a gross loss of more than $1.8 million. The loss suggests the distributor discounted content significantly in the quarter as sales, general and administrative expenses remained relatively unchanged around $13.7 million.
Regardless, RLJ Entertainment CEO Miguel Penella said the results underscored “continued successful execution” of corporate’s business strategy combining Acorn and Image.
“We remain highly-focused on identifying synergies derived from the merger of the two companies, securing additional cost savings, refining and strengthening our content investment strategy through capital reallocation, and improving our balance sheet,” Penella said in a statement. “While these efforts have impacted our financial results in the quarter, we are confident that the steps we are taking will solidify further growth opportunities, clarify the RLJ Entertainment investment thesis and enable us to achieve our long-term financial targets.”