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Image Q2 Plays Sour Note

13 Nov, 2007 By: Erik Gruenwedel

When the best thing Image Entertainment CEO Martin Greenwald could say in print about second quarter results was the imminent close of the company's acquisition by BTP, you know better times haven't arrived yet.

Chatsworth, Calif.-based Image said a drop in sales of audio programming (CD/DVD) during the period ended Sept. 30 was the primary reason for a 5.3% decline in net revenue, to $21.6 million, from $22.8 million during the same period last year.

The net loss narrowed to $3.6 million for the quarter from $3.7 million in the same quarter last year.

Top selling DVDs, included Shark Week: 20th Anniversary Collection, Dirty Jobs Collection 1 (both from Discovery Channel) and Jeff Dunham: Spark of Insanity.

Last week, Image said it extended to Nov. 15 the closing date of its $132 million acquisition by BTP Acquisition Co. LLC, an investor group led by film financier and producer David Bergstein.

A notable bright spot included $598,000 in digital revenue (downloads and streams), up 193% from $205,000 during the same period last year.

Image said interest expense from loans and other sources increased to $808,000 from $479,000 last year.

Other expenses included $307,000 related to the merger with BTP and $108,000 in accelerated depreciation and amortization from the closure of a Las Vegas distribution facility. The expenses are on par with $416,000 reported during the same period last year due to the bankruptcy of Tower Records.

“The past few quarters have been a time of transition for us, and we are excited about combining our companies and moving ahead with great resolve and even greater resources,” Greenwald said in a statement.

The company expects to host an analyst call to discuss the results some time after Thanksgiving.

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