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Higher Film Profile Pays Dividends for Image

12 Aug, 2008 By: Erik Gruenwedel

Releasing edgy movies starring the likes of Philip Seymour Hoffman and Forrest Whitaker is apparently good for the bottom line.

Image Entertainment said DVD releases of Before the Devil Knows You're Dead, The Air I Breathe, The Walker and Numb helped it report first-quarter (ended June 30) fiscal-2009 net income of $1.7 million, compared to a loss of $2.6 million during the same period last year.

Net revenue increased 56%, to a record $32.6 million, from $20.9 million last year.

Other top sellers for the Chatsworth, Calif.-based producer/distributor included Mariah Carey: The Adventures of Mimi and reality show Deadliest Catch: Season 3.

David Borshell, president of Image, said Blu-ray continued to perform well, with digital distribution (streaming and sellthrough) up 53% and TV sales up 62%.

Following the failed acquisition by BTP Holdings LLC and “litany of disputes,” according to Borshell, thereafter in fiscal 2008, Image turned the page and upped selling expenses 1.6% to $3.7 million, pursuing higher profile cast-driven feature films (from ThinkFilm and other sources) for DVD, television and electronic distribution.

The result has been expanded respect at retail by big box players, including Wal-Mart, Trans World Entertainment and Target.

“We believe we have built a strong foundation for long-term growth and profitability and look forward to expanding [our] leadership role in the independent entertainment universe,” Borshell said.

In a call with analysts, the executive said all legal issues with BTP had been resolved and that confidentiality agreements precluded him from revealing details.

“Image is pleased with the outcome and ridding ourselves of the legal overhang is an accomplishment that should not be overlooked,” Borshell said.

He said Image had no plans to expand releasing select film acquisitions theatrically due to the economic risks associated with P&A costs (prints and advertising).

Image currently has Antarctica documentary Encounters at the End of the World, from director Werner Herzog, in select theaters.

Feature films slated for release in the second quarter include Autumn Hearts, with Susan Sarandon; The Secret, with David Duchovny; Then She Found Me, with Helen Hunt and Matthew Broderick; Oscar-winning documentary Taxi to the Dark Side and Criterion's version of Mishima: A Life in Four Chapters.

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