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Image Quarterly Gain Can't Offset Annual Loss

28 Jun, 2004 By: Erik Gruenwedel


Despite a near 21 percent gain in year-and-year revenue for the fourth quarter ended March 31, Image Entertainment posted a fiscal year 2004 net loss of $9.5 million, or 52 cents per diluted share, on revenue of $84.8 million, compared to a net loss of $4.2 million, or 25 cents per diluted share, on revenue of $86.9 million during the same period last year.

Chatsworth, Calif.-based Image attributed the loss in part to a 31.5 percent drop in foreign distribution, broadcast programming and revenue accounting procedures, and more than a $2.4 million loss from discontinued operations and September sale of online retailer DVD Planet.

That said, buoyed by a 5.4 percent rise in sales of exclusive DVD and CD titles, and increased music sublicense fees through German-based label BMG, Image recorded quarterly net income of 973,000, or 5 cents per diluted share, on revenue of $26.5 million, compared to a net loss of $187,000, or 2 cents per share, on revenue of $21.9 million during the same period last year.

Sources said Image is poised to generate almost $20 million in audio sales in the next fiscal year — despite an ongoing slump in global music sales.

“All-in-all, it was a very good quarter,” said Martin Greenwald, Image president and CEO. “Audio is certainly turning out to be a nice add-on business.”

Greenwald remained optimistic for the future, including the first quarter ended Wednesday, following last week's announced partnership with Dark Horse Entertainment, owner of the “Hellboy” franchise, among other comic book properties.

“[The deal] enables us as a participant in the low-budget feature film market,” Greenwald said. “We put both companies together to create compelling programming.”

He said that with 90 percent of Image's product offering driven by exclusive titles, the result is added interest from big-box retailers.

“We have become more important in the product flow to companies like Wal-Mart,” Greenwald said.

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