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Feature Film DVDs Brighten Image

13 Nov, 2008 By: Erik Gruenwedel

Image Entertainment’s decision to focus on cast-driven feature films for DVD, digital and television continues to pay dividends.

The Chatsworth, Calif.-based distributor narrowed its third-quarter (ended Sept. 30) fiscal-2009 loss to $465,000, compared to a loss of $3.6 million during the prior-year period.

The significance of the loss reduction meant that Image posted net income of $1.2 million for the first six months of the fiscal year, compared to a loss of more than $6.2 million last year.

Net revenue for the quarter jumped 50% to $32.4 million, from $21.6 million last year.

“What’s especially encouraging … is that we are showing revenue increases across all formats, with our DVD sales up 53%, digital up 58% and TV sales up over 130% compared to last year,” president David Borshell said in a call with investors. “We see this as very positive, especially in light of today’s economic conditions.”

Best-selling DVD releases for the quarter included: Discovery Channel’s When We Left Earth: The NASA Missions and Shark Week: Ocean of Fear, and feature films Then She Found Me and The Secret.

Digital revenue, primarily via Apple’s iTunes, increased to $1.7 million from $1 million last year. Gross margins for the quarter increased almost 25%.

Borshell said Image’s business thus far has not been significantly affected by the economy, but management continues to monitor economic conditions.

“The entertainment industry, especially the home video side, tends to be counter cyclical during difficult financial times as watching movies and entertainment in general in the comfort of one’s home always seems appealing,” Borshell said.

He said holiday sales would be driven by several non-theatrical releases, including Jeff Dunham’s A Very Special Christmas on DVD and Blu-ray, Big Visions’ “Ghost Hunter” TV series, and The Criterion Collection’s much-anticipated Blu-ray releases.

Theatrical titles include Stuck with Mena Suvari, The Good Life with Zooey Deschanel, Werner Herzog’s Encounters With the End of the World, and Management with Steve Zahn and Jennifer Aniston.

The distributor increased its annual net revenue guidance for fiscal 2009 to an expected range of $120 million to $130 million, up from its previous guidance of $115 million to $125 million.

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