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Image Entertainment Reports First-Quarter Fiscal 2002 Revenue Slide

9 Aug, 2001 By: Hive News


Image Entertainment Inc.,in its first quarter 2002 (ended June 30), reported net revenues for the first quarter of fiscal 2002 decreased 14.5% to $20,480,000 from $23,967,000 for the first quarter of fiscal 2001.

The company says its revenue performance was negatively impacted by economic weakness in the retail sector; the loss of exclusive revenues from its license agreements with Orion Home Entertainment Corp. and Universal Studios Home Video Inc., which expired at the end of the last fiscal quarter; and reduced revenues from Internet retailing customers.

Gross profit margins for the three months ended June 30, 2001, were 28.5% compared with 29.7% for the three months ended June 30, 2000.

The company's loss from operations was $362,000 for the three months ended June 30, 2001, compared with earnings from operations of $1,800,000 for the three months ended June 30, 2000.

Net loss for the three months ended June 30, 2001, was$493,000, or $0.03 per share-diluted versus net earnings of $1,315,000, or $0.08 pershare-diluted, for the three months ended June 30, 2000. EBITDA (earnings before interest, taxes,depreciation and amortization), a measure of cash flow, for the three months ended June 30, 2001,was $460,000, compared with $2,334,000 for the three months ended June 30, 2000.

Martin W. Greenwald, Image's president and c.e.o., commented: ``Theentertainment industry is not immune to an economic slowdown. The decline in our revenues in the June 2001 quarter, compared to the June 2000 quarter's revenues, was due in great part to `belttightening' by the company's larger retail customers, the loss of revenue from the expired Orion andUniversal license agreements, as well as reduced purchasing by Internet retailers.

``While we are uncertain when the economy will begin to turn around, I am looking forward to our strengthening release schedule beginning in September 2001 and through the balance of the fiscalyear. As such, we believe we are well positioned for the holiday buying season. I believe a strengthening in the overall retail market in conjunction with the company's stronger release schedule beginning in September should bring the company back to profitability this fiscal year.''

Under the company's reinstated stock repurchase program announced in August 2000, the company has repurchased approximately 696,000 common shares through June 30, 2001, for an aggregate purchase price of $2,413,000 (at an average price of approximately $3.47 per share), includingbrokerage commissions.

At June 30, 2001, there were approximately 138,000 common shares remaining for repurchase under the January 1995 board of directors' authorized program to repurchase up to 2.5 millioncommon shares.


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